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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 11, 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.
Not applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
This Current Report on Form 8-K is being filed by TransAmerican
Refining Corporation, a Texas corporation ("TARC"), to give the
holders of its 16% Senior Subordinated Notes due 2003 the
opportunity to review the terms of certain of the documents to
be executed in connection with the Transaction defined and
described in the Consent Solicitation Statements of TARC dated
October 5, 1998, and supplements thereto dated November 24, 1998
(the "Consent Solicitation Statements"). Such documents are
attached as exhibits hereto. The closing of the Transaction is
expected to occur on Tuesday, December 15, 1998.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed as a part of this report:
99.1 -- Form of Certificate of Designations of Class A Participating
Preferred Stock, Series A of TCR Holding Corporation ("TCR
Holding").
99.2 -- Form of Certificate of Designations of Class A Participating
Preferred Stock, Series B of TCR Holding.
99.3 -- Form of Certificate of Designations of Class B Junior
Non-Voting Participating Preferred Stock of TCR Holding.
99.4 -- Form of Certificate of Designations of Class C Junior
Non-Voting Participating Preferred Stock of TCR Holding.
99.5 -- Form of Certificate of Designations of Class D Junior
Non-Voting Participating Preferred Stock of TCR Holding.
99.6 -- Form of Certificate of Designations of Class E Junior
Non-Voting Participating Preferred Stock of TCR Holding.
99.7 -- Form of Certificate of Designations of 6% Participating
Preferred Stock of TransContinental Refining Corporation
("TransContinental").
99.8 -- Form of Stockholders Agreement by and among TCR Holding, TARC
and the Initial Holders named therein.
99.9 -- Form of Stockholders Agreement by and among TransContinental,
TCR Holding and the Initial Holders named therein.
99.10 -- Form of Indenture between TARC, as Issuer, and The Bank of New
York, as Trustee, governing TARC's 15% Senior Secured Notes due
2003.
99.11 -- Form of Pledge Agreement by TARC in favor of TransAmerican
Energy Corporation ("TEC").
99.12 -- Form of Pledge Agreement by TCR Holding in favor of TEC.
99.13 -- Form of Repurchase Rights Agreement by and among TEC, TCR
Holding and Certain Stockholders of TCR Holding.
99.14 -- Form of Letter Agreement by and between TARC and Trust Company
of the West pursuant to which TARC will be granted certain
repurchase rights with respect to the Class B Common Stock of
TCR Holding Corporation ("TCR Holding").
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
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Name: Ed Donahue
Title: Vice President
Dated: December 11, 1998
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EXHIBITS
Exhibit
No. Description
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99.1 -- Form of Certificate of Designations of Class A Participating
Preferred Stock, Series A of TCR Holding.
99.2 -- Form of Certificate of Designations of Class A Participating
Preferred Stock, Series B of TCR Holding.
99.3 -- Form of Certificate of Designations of Class B Junior
Non-Voting Participating Preferred Stock of TCR Holding.
99.4 -- Form of Certificate of Designations of Class C Junior
Non-Voting Participating Preferred Stock of TCR Holding.
99.5 -- Form of Certificate of Designations of Class D Junior
Non-Voting Participating Preferred Stock of TCR Holding.
99.6 -- Form of Certificate of Designations of Class E Junior
Non-Voting Participating Preferred Stock of TCR Holding.
99.7 -- Form of Certificate of Designations of 6% Participating
Preferred Stock of TransContinental.
99.8 -- Form of Stockholders Agreement by and among TCR Holding,
TARC and the Initial Holders named therein.
99.9 -- Form of Stockholders Agreement by and among TransContinental,
TCR Holding and the Initial Holders named therein.
99.10 -- Form of Indenture between TARC, as Issuer, and The Bank of New
York, as Trustee, governing TARC's 15% Senior Secured Notes due
2003.
99.11 -- Form of Pledge Agreement by TARC in favor of TEC.
99.12 -- Form of Pledge Agreement by TCR Holding in favor of TEC.
99.13 -- Form of Repurchase Rights Agreement by and among TEC, TCR
Holding and Certain Stockholders of TCR Holding.
99.14 -- Form of Letter Agreement by and between TARC and __________
pursuant to which TARC will be granted certain repurchase
rights with respect to the Class B Common Stock of TCR Holding.
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EXHIBIT 99.1
CERTIFICATE OF DESIGNATIONS
of
CLASS A PARTICIPATING PREFERRED STOCK, SERIES A
of
TCR HOLDING CORPORATION
(Pursuant to Section 151(g)of the
Delaware General Corporation Law)
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TCR Holding Corporation, a corporation organized and existing
under the laws of the State of Delaware (the "COMPANY"), hereby certifies that
the following resolution was adopted at a meeting of the Board of Directors of
the Company (the "BOARD OF DIRECTORS") pursuant to Section 151(g) of the
Delaware General Corporation Law on December __, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Company, the Board of Directors
hereby creates a series of Preferred Stock, par value $.01 per share (the "CLASS
A PARTICIPATING PREFERRED STOCK, SERIES A"), of the Company and hereby states
the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series A Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of this series
shall be designated as "Class A Participating Preferred Stock, Series A" (the
"SERIES A PREFERRED STOCK") and the number of shares constituting the Series A
Preferred Stock shall be fifteen million eighty-one thousand four hundred and
twenty-nine (15,081,429). Such number of shares may be increased or decreased by
resolution of the board of directors of the Company; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding.
SECTION 2. DEFINITIONS. For all purposes of this Certificate
of Designations, the following terms shall have the indicated meanings:
"CAPITAL STOCK" means, with respect to any Person, any capital
stock of such Person and shares, interests, participations, or other ownership
interests (however designated) of such Person and any rights (other than debt
securities convertible into Capital Stock and rights under the Repurchase Rights
Agreement among TEC and the holders of certain Capital Stock of the Company
dated as of the Issue Date), warrants or options to purchase any of the
foregoing, including without limitation, each class of common stock and
preferred stock of such Person, if
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such Person is a corporation, and each general or limited partnership interest
or other equity interest of such Person, if such Person is a partnership.
"COMMON STOCK" means the Company's common stock, par value
$0.01 per share.
"DEBT" means, with respect to any Person, without duplication
all liabilities, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (b) evidenced by bonds, notes, debentures,
or similar instruments or letters of credit or representing the balance deferred
and unpaid of the purchase price of any property acquired by such Person or
services received by such Person (other than long-term service or supply
contracts which require minimum periodic payments), (c) evidenced by bankers'
acceptances or similar instruments issued or accepted by banks or obligations
under interest rate or currency exchange rate agreements, (d) for the payment of
money relating to a lease obligation required to be capitalized for financial
reporting purposes in accordance with GAAP and (e) the obligation of the Company
as lessee under any sale and leaseback transaction.
"EQUIVALENT SECURITIES" shall mean, with respect to each share
of Series A Preferred Stock, a unit consisting of separately detachable
securities that include (a) one share of preferred stock of the Company (or any
successor) having substantially the same rights, preferences, qualifications,
limitations and restrictions (including an equivalent Liquidation Preference) as
the Series A Preferred Stock immediately prior to the issuance of such preferred
stock, except that such preferred stock shall have no voting rights (other than
as may be required under applicable law) and shall have no rights to receive or
participate in any dividends or distributions other than the right to receive
Scheduled Dividends, Default Dividends (when applicable), Preference Reductions
and the then-applicable Liquidation Preference in the event of any liquidation,
dissolution or winding up of the Company (or its successor) and (b) one share of
Common Stock of the Company (or, in the case of a successor to the Company, the
same amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common Stock of
the Company is changed or exchanged).
"GAAP" means generally accepted accounting principles,
consistently applied.
"HOLDER" means any holder of the Series A Preferred Stock.
"INCUR" or, as appropriate, an "INCURRENCE" means to create,
incur, assume, guarantee, or otherwise become liable, contingently or otherwise.
"ISSUANCE DATE" means the date of first issuance of the Series
A Preferred Stock.
"LIQUIDATION PREFERENCE" means, with respect to each share of
Series A Preferred Stock, an amount equal to (a)(i) at any time after the
Issuance Date and prior to December 15, 1998, $52.299 plus the Proportionate
Amount, (ii) at any time on or after December 15, 1998 and prior to June 15,
1999, $56.483 plus the Proportionate Amount or (iii) at any time on or after
June 15, 1999, $61.002, plus (b) all accrued and unpaid Scheduled Dividends
thereon, minus (c) the aggregate amount of all Preference Reductions paid
thereon, minus (d) the aggregate amount of any reduction of Liquidation
Preference with respect to such share calculated in accordance with Section 10,
minus (e) the aggregate amount of all Forced Sale Liquidation Preference
Reduction Amounts paid thereon.
"PLEDGED SHARES" has the meaning ascribed to that term in
Section 11.
"PAYMENT DATE" shall have the meaning ascribed to that term
in Section 3(A).
"PERSON" means any corporation, individual, joint stock
company, joint venture, partnership, limited liability company, unincorporated
association, governmental regulatory entity, country, state, or political
subdivision thereof, trust, municipality, or other entity.
"PREFERRED STOCK" means any class or classes of the Company's
Capital Stock (however designated) that is preferred as to the payment of
dividends, or as to the distribution of assets upon a voluntary or involuntary
liquidation or dissolution of the Company over shares of any other Capital Stock
of the Company.
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"PROPORTIONATE AMOUNT" means, as of any date, an amount equal
to the product of (i) the Liquidation Preference for the period immediately
following the period in which such date occurs (prior to adjustment for the
Proportionate Amount) less the Liquidation Preference for the period in which
such date occurs (prior to adjustment for the Proportionate Amount) multiplied
by (ii) a fraction, the numerator of which is the actual number of days elapsed
from the beginning of the period in which such date occurs to such date and the
denominator of which is the actual number of days in the period in which such
date occurs.
"REDEMPTION NOTES" means notes representing Debt of the
Company issued to the Holder with an aggregate principal amount equal to the
aggregate Liquidation Preference of the shares of Series A Preferred Stock with
respect to which such Debt is issued as of the date of issuance of such Debt, a
maturity date of June 1, 2002 and bearing interest at a rate of 16% per annum.
"SERIES B SCHEDULED DIVIDENDS" means "Scheduled Dividends" as
defined in the certificate of designations for the Series B Preferred Stock of
the Company as in effect on the Issuance Date.
"SERIES B PREFERRED STOCK" means the Class A Participating
Preferred Stock, Series B of the Company.
"TARC" means TransAmerican Refining Corporation, a Texas
corporation.
"TARC INTERCOMPANY LOAN" means the loan between TARC and TEC
pursuant to the Loan Agreement dated as of June 13, 1997, as amended.
"TEC" TransAmerican Energy Corporation, a Delaware
corporation.
"WORKING CAPITAL LOAN" means the loan from TEC to TARC of up
to $50 million from the proceeds of the sale of the TEC Notes evidenced by a
note dated as of October 1, 1998 as assigned to and assumed by the Company.
SECTION 3. DIVIDENDS AND DISTRIBUTIONS.
(A) Scheduled Dividends. On the dates set forth on Schedule A
(each a "PAYMENT DATE"), the Holder, in preference to the holder of any other
shares of Capital Stock of the Company, shall be entitled to receive, when, as
and if declared by the Board of Directors out of legally available funds
available for such purpose, and, to the extent such funds are legally available
for such purpose, the Board of Directors shall declare, a cash dividend (a
"SCHEDULED DIVIDEND") in an amount per share equal to the amount set forth
opposite such Payment Date on Schedule A.
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(B) Special Distributions. In the event the Company shall pay
any dividend or other distribution (other than a Scheduled Dividend, a Series B
Scheduled Dividend or a Preference Reduction) on any shares of its Capital Stock
(a "SPECIAL DISTRIBUTION"), the Holder shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for
such purpose, on the date of payment of such Special Distribution, an amount
per share equal to the amount paid on each other share in each case, rounded to
the nearest cent of the aggregate amount of such Special Distribution.
(C) Preference Reductions. The Holder shall also be entitled
to receive dividends or other distributions (other than Scheduled Dividends and
Special Distributions), payable solely to holders of the Series A Preferred
Stock, when, as and if declared by the Board of Directors out of funds legally
available for such purpose (a "PREFERENCE REDUCTION"); provided that the Company
shall not declare or pay any Preference Reduction if such payment would cause
the Liquidation Preference to be less than zero. The amount of each Preference
Reduction per share shall equal the aggregate amount of the Preference Reduction
paid on all shares of Series A Preferred Stock divided by the aggregate amount
of all shares of Series A Preferred Stock outstanding at the time of payment.
(D) Calculations of Value. All calculations of the amount of
dividends or distributions paid to holders of Capital Stock of the Company shall
be made without regard to whether such dividends or other distributions consist
of cash dividends or distributions or non-cash dividends or distributions
(except that dividends payable to the holders of a class or series of Capital
Stock of the Company, in shares of the same such class or series, or a
subdivision of the outstanding shares of Capital Stock of the Company (by
reclassification or otherwise) shall not be considered to have any value for
purposes hereof). Any non-cash dividends or other distributions shall be valued
by the Board of Directors of the Company in good faith and if the valuation so
determined is objected to in writing by the Holder within 30 days of notice of
such valuation, by a nationally recognized investment banking or valuation firm
(an "APPRAISER") selected by the Holder and the Company. If the Company and the
Holder cannot, in good faith, agree upon an Appraiser, then the Company, on the
one hand, and the Holder, on the other hand, each shall elect an Appraiser, and
the two selected Appraisers shall select a third Appraiser who shall make the
required valuation. Such subsequent valuation shall be binding on the Holder and
the Company. No dividend that is not cash shall be paid within such 30 day
period or during such subsequent valuation.
(E) Interpretative Provision. Any reference to "distribution"
contained in this Section 3 shall be deemed not to include any distribution made
in connection with any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary.
(F) Increased Dividends. If the Company fails to pay any
dividend or other distribution in full when due to the Holder under this Section
3 ("UNPAID DISTRIBUTION"), dividends ("DEFAULT DIVIDENDS") shall accrue on the
amount of such Unpaid Distribution for the period from the due date of any such
Unpaid Distribution until such Unpaid Distribution is paid in full and shall be
due and payable until paid at a rate per annum equal per $100 of the amount of
such Unpaid Distribution equal at all times to the lesser of (i) the
then-applicable amount of the Scheduled Dividend plus $1.50 per annum per $100
of the amount of such Unpaid Distribution and (ii) the maximum non-usurious
interest rate (if such dividends were considered as interest), if any, permitted
from time to time under applicable laws to be contracted for, taken, reserved,
charged or received as of the time of calculation of the Default Interest.
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SECTION 4. VOTING RIGHTS. The Holder shall have the following
voting rights:
(A) The Holder shall be entitled to cast one vote per share
held, at each meeting of the stockholders of the Company or pursuant to each
consent by such stockholders, voting in person or by proxy.
(B) The Holder shall be entitled to vote separately as a
class, in person or by proxy, on all matters required by law to be submitted to
a vote by such class of the Series A Preferred Stock.
(C) So long as any of the Series A Preferred Stock is
outstanding, the Company shall not, without the affirmative vote or consent of
the Holder of the Series A Preferred Stock, voting separately as a class in
person or by proxy (i) amend, alter or repeal (by merger, consolidation or
otherwise) any provision of the Certificate of Incorporation, so as to affect
adversely the relative rights, preferences, qualifications, limitations or
restrictions of the Series A Preferred Stock, (ii) authorize or issue, or
increase the authorized amount of, any additional class or series of stock, or
any security convertible into stock of such class or series, ranking senior to
or on a parity with the Series A Preferred Stock (other than the Company's Class
A Participating Preferred Stock, Series B) in respect of the payment of
dividends or upon liquidation, dissolution or winding up of the Company, (iii)
effect any reclassification of the Series A Preferred Stock or (iv) Incur any
Debt other than the Working Capital Loan.
(D) Except as otherwise provided herein, in the Stockholders
Agreement dated as of the Issuance Date by and among the holders of Capital
Stock of the Company or by law, the Holder shall have no voting rights and their
consent shall not be required for taking any corporate action.
SECTION 5. CERTAIN RESTRICTIONS. Whenever dividends or
distributions are payable on the Series A Preferred Stock as provided in Section
3, thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Preferred Stock outstanding shall
have been paid in full, the Company shall not (i) pay dividends, or make any
other distributions, on any other shares of Capital Stock of the Company other
than Series B Preferred Stock, or (ii) redeem or purchase or otherwise acquire
for consideration, any other shares of Capital Stock of the Company other than
the Series B Preferred Stock.
SECTION 6. STATUS OF REACQUIRED OR SURRENDERED SHARES. Any
shares of Series A Preferred Stock redeemed, purchased or otherwise acquired by
the Company in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof.
SECTION 7. LIQUIDATION, DISSOLUTION OR WINDING UP. In the
event of any liquidation, dissolution or winding up of the Company (a
"LIQUIDATION EVENT"), whether voluntary or involuntary, the Holder shall be
entitled to receive out of the assets of the Company, whether such assets are
stated capital or surplus of any nature, for each share of Series A Preferred
Stock, an amount equal to the sum of (a) the Liquidation Preference with respect
to such share as of the date of the Liquidation Event, before any payment shall
be made or any assets distributed to the holders of any other class or series of
the Company's Capital Stock other than Series B Preferred Stock and (b) the
pro-rata portion on a share for share basis of the aggregate amount, in excess
of the
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Liquidation Preference distributed to all holders of its Common Stock and all
Capital Stock of the Company ranking on a parity with the Common Stock as to
payment of dividends and making of distributions. Neither a merger,
consolidation, or other business combination of the Company with or into another
corporation or other entity nor a sale or transfer of all or part of the
Company's assets for cash, securities or other property shall be considered a
Liquidation Event for purposes of this Section 7 (unless in connection therewith
the liquidation of the Company is specifically approved).
SECTION 8. CONSOLIDATION, MERGER, ETC. The Company shall be
permitted to, without a vote of the holders of Series A Preferred Stock,
consolidate with or merge with or into any other Person, or, directly or
indirectly, sell, lease, assign, transfer or convey all or substantially all of
its assets (on a consolidated basis), to another Person or group of Persons
acting in concert, whether in a single transaction or through a series of
related transactions; provided that (i) the Company shall be the continuing
Person or the Person (if other than the Company), formed by such consolidation
or into which the Company is merged or to which all or substantially all of the
properties and assets of the Company are transferred as an entirety or
substantially as an entirety (the Company or such other Person, the "SURVIVING
PERSON"), shall be a corporation or partnership organized and validly existing
under the laws of the United States, any State thereof or the District of
Columbia, and (ii) the Surviving Person shall issue Equivalent Securities to the
Holder on or prior to the consummation of such transaction.
SECTION 9. OPTIONAL REDEMPTION. The Company, at its option,
may redeem Series A Preferred Stock, in whole but not in part, on any date set
by the Board of Directors, by payment, at any time on and after July 15, 1999,
to the Holder of (i) the Redemption Notes and, (ii) one share of Common Stock
for each share of Series A Preferred Stock and by granting a security interest
securing repayment of the Redemption Notes by a lien on of the Pledged Shares,
any such payment being hereinafter referred to as the "REDEMPTION PRICE".
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Not more than 180 nor less than 5 days prior to the redemption
date, notice by first class mail, postage prepaid, shall be given to the Holder
of the shares of Series A Preferred Stock to be redeemed, at the Holder's
address as it shall appear upon the stock transfer books of the Company. Each
such notice of redemption shall specify the date fixed for redemption, the
Redemption Price, the place or places of payment, that payment will be made upon
presentation and surrender of the certificate(s) evidencing the shares of Series
A Preferred Stock to be redeemed and, that on and after the redemption date,
dividends will cease to accrue on such shares.
Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice; and failure to give such notice by mail, or any defect in
such notice, to the Holder shall not affect the validity of the proceedings for
the redemption as stated in such notice of the shares of Series A Preferred
Stock. On and after the date fixed for redemption, the Holder shall surrender
the certificate evidencing such shares to the Company at the place designated in
such notice and shall thereupon be entitled to receive payment of the Redemption
Price as herein provided. If, on the date fixed for redemption, the securities
and other consideration constituting the Redemption Price shall be available
therefor and shall have been irrecoverably deposited or set aside, then,
notwithstanding that the certificates evidencing any shares so called for
redemption shall not have been surrendered, the dividends with respect to the
shares so called shall cease to accrue after the date fixed for redemption, the
shares shall no longer be deemed outstanding, the Holder shall cease to hold
such shares of Series A Preferred Stock, and all rights whatsoever with respect
to the shares so called for redemption (except the right of the Holder to
receive payment of the Redemption Price as herein provided without interest upon
surrender of its certificates therefor) shall terminate. At the close of
business on the redemption date, the Holder (unless the Company defaults on its
obligations to deliver the securities constituting the Redemption Price) shall
be, without any further action, deemed a holder of the securities constituting
the Redemption Price.
Except as set forth in Section 11 the shares of Series A
Preferred Stock shall not be subject to the operation of any purchase,
retirement, mandatory redemption or sinking fund.
The Holder shall not be entitled to receive payment of the
Redemption Price for such shares until it shall cause to be delivered to the
place specified in the notice given with respect to such redemption (i) the
certificate(s) representing such shares of Series A Preferred Stock redeemed and
(ii) transfer instrument(s) reasonably satisfactory to the Company and
sufficient to transfer such shares of Series A Preferred Stock to the Company
free of any adverse interest. No dividends or interest shall accrue on any share
of Series A Preferred Stock after its redemption date.
All shares of Capital Stock of the Company which may be
delivered upon redemption of the Series A Preferred Stock will upon delivery be
duly and validly issued and fully paid and non-assessable, free of all liens
(other than liens created by the Holders) and charges and not subject to any
preemptive rights, and prior to giving notice of redemption the Company shall
take any corporate action necessary therefor.
SECTION 10. REDUCTION OF LIQUIDATION PREFERENCE ON CERTAIN
PAYMENTS. The aggregate Liquidation Preference shall automatically be reduced
pro rata among the shares of Series A Preferred Stock by an amount equal to the
amount by which the principal amount of the
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obligation under the TARC Intercompany Loan is reduced in accordance with
Section 3.1 of the agreement governing the TARC Intercompany Loan as in effect
on the Issue Date. For purposes of this Section 10 any notes of TEC, delivered
by the Company to the Holder shall be deemed to have been delivered to TEC.
SECTION 11. FORCED SALE AND MANDATORY REDUCTION OF LIQUIDATION
PREFERENCE. Whenever (A)(i) the Company shall be in default of its obligation to
pay dividends pursuant to Section 3, (ii) holders of the Senior Subordinated
Notes of TARC due 2003 have exercised their foreclosure remedies with respect to
default under such notes, (iii) holders of the Senior Secured Notes of TEC due
2002 have exercised their foreclosure remedies on the TARC Intercompany Loan
with respect to a default under such notes and (iv) the Working Capital Loan is
no longer outstanding, the Holder may, upon delivery of written notice to the
Company, require the Company to sell (a "FORCED SALE"), the number of shares of
common stock of TransContinental Refining Corporation, a Delaware corporation,
owned by the Company on the Issue Date (adjusted to account for any
distributions pro rata among holders of such common stock, subdivisions of the
outstanding shares of such common stock and combinations of the outstanding
shares of such common stock) (the "PLEDGED SHARES") and (B) the Series A
Preferred Stock shall be outstanding after June 1, 2002 provided further that
the Holder shall have the right to require the Company to apply the proceeds
returned to the Company from any foreclosure on the Pledged Shares by the lender
under the Working Capital Loan to reduce the aggregate amount of the Liquidation
Preference at such time.
The Company shall effect such Forced Sale within 90 days of
receipt of such written notice. The Company shall apply the proceeds of a Forced
Sale, up to the aggregate amount of the Liquidation Preference at such time, to
reduce the Liquidation Preference (such amount a "FORCED SALE LIQUIDATION
PREFERENCE REDUCTION") of shares of Series A Preferred Stock. The Company shall
effect such Forced Sale Liquidation Preference Reduction by paying a cash
dividend from the proceeds of the Forced Sale to the Holder (the "FORCED SALE
LIQUIDATION PREFERENCE REDUCTION AMOUNT") on a date not later than 10 days after
consummation of the Forced Sale.
SECTION 12. MANDATORY CONVERSION. Upon (i) the closing of the
sale of Common Stock in a firm commitment, underwritten public offering
registered under the Securities Act of 1933, as amended (the "Securities Act")
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or (iii) the exercise of drag-along rights, with respect to the shares of Series
A Preferred Stock subject thereto, pursuant to the TCR Holding Stockholders
Agreement dated as of the Issuance Date, as amended the shares of Series A
Preferred Stock shall be convertible, at the option of the Company, into
Equivalent Securities.
SECTION 13. NO PREEMPTIVE RIGHTS. The Series A Preferred Stock
shall not be entitled to any preemptive or subscription rights in respect of any
securities of the Company.
SECTION 14. TRANSFER RESTRICTIONS. The Holder shall not be
permitted to transfer (except pursuant to the pledge agreement between TCR
Holding and TEC dated as of the Issuance Date with respect to the Pledged
Shares) any shares of Series A Preferred Stock by sale, assignment, gift or
other disposition at any time.
SECTION 15. SEVERABILITY OF PROVISIONS. Whenever possible,
each provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
SECTION 16. MUTILATED CERTIFICATES. If a mutilated or spindled
certificate representing shares of Series A Preferred Stock is surrendered to
the Company or if the Holder claims and submits an affidavit or other evidence,
satisfactory to the Company, to the Company to the effect that the certificate
has been lost, destroyed or wrongfully taken, the Company shall issue a
replacement certificate if its requirements for issuance are met. The Company
may require the Holder to provide an indemnity bond or other indemnity,
sufficient in the judgment of the Company to protect the Company from any loss
that it may suffer if a certificate is replaced. The Company may charge the
holder reasonable out-of-pocket expenses in replacing such certificate.
SECTION 17. ADJUSTMENT. Each share of Series A Preferred Stock
shall be adjusted proportionately to account for subdivisions of the outstanding
shares of Common Stock and combinations of the outstanding shares of Common
Stock.
SECTION 18. RIGHT TO RECEIVE STATEMENT. Upon written request
to the Company by any Holder of Series A Preferred Stock, the Company shall
provide such Holder without charge a statement of the powers, designations,
preferences and relative, participating, optional or other special rights of the
Series A Preferred Stock and the qualifications, limitations, or restrictions
of such preferences and/or rights.
9
<PAGE> 10
IN WITNESS WHEREOF, TCR Holding Corporation has caused this
Certificate of Designations of Series A Preferred Stock to be duly executed by
______________, this __th day of December, 1998.
TCR HOLDING CORPORATION
--------------------------------
10
<PAGE> 11
Schedule A
<TABLE>
<CAPTION>
Date Scheduled Dividend
---- ------------------
<S> <C>
December 15, 1999............................................. $4.88017
June 15, 2000................................................. $4.88017
December 15, 2000............................................. $4.88017
June 15, 2001................................................. $4.88017
December 15, 2001............................................. $4.88017
June 1, 2002.................................................. $4.88017
</TABLE>
11
<PAGE> 1
EXHIBIT 99.2
CERTIFICATE OF DESIGNATIONS
of
CLASS A PARTICIPATING PREFERRED STOCK, SERIES B
of
TCR HOLDING CORPORATION
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
------------------------------------
TCR Holding Corporation, a corporation organized and existing
under the laws of the State of Delaware (the "COMPANY"), hereby certifies that
the following resolution was adopted at a meeting of the board of directors of
the Company (the "BOARD OF DIRECTORS"), pursuant to Section 151(g) of the
Delaware General Corporation Law on December __, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Company, the Board of Directors
hereby creates a series of Preferred Stock, par value $0.01 per share (the
"CLASS A PARTICIPATING PREFERRED STOCK, SERIES B"), of the Company and hereby
states the designation and number of shares, and fixes the relative rights,
preferences and limitations thereof as follows:
Series B Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of this series
shall be designated as "Class A Participating Preferred Stock, Series B" (the
"SERIES B PREFERRED STOCK") and the number of shares constituting the Series B
Preferred Stock shall be three million two hundred seventy-eight thousand five
hundred seventy-one (3,278,571). Such number of shares may be increased or
decreased by resolution of the board of directors of the Company; provided, that
no decrease shall reduce the number of shares of Series B Preferred Stock to a
number less than the number of shares then outstanding.
SECTION 2. DEFINITIONS. For all purposes of this Certificate
of Designations, the following terms shall have the indicated meanings:
"CAPITAL STOCK" means, with respect to any Person, any capital
stock of such Person and shares, interests, participations, or other ownership
interests (however designated) of such Person and any rights (other than debt
securities convertible into Capital Stock and rights under the Repurchase Rights
Agreement among TEC and the holders of certain Capital Stock of the Company
dated as of the Issue Date), warrants or options to purchase any of the
foregoing,
<PAGE> 2
including without limitation, each class of common stock and preferred stock of
such Person, if such Person is a corporation, and each general or limited
partnership interest or other equity interest of such Person, if such Person is
a partnership.
"COMMON STOCK" means the Company's common stock, par value
$0.01 per share.
"DEBT" means, with respect to any Person, without duplication
all liabilities, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (b) evidenced by bonds, notes, debentures,
or similar instruments or letters of credit or representing the balance deferred
and unpaid of the purchase price of any property acquired by such Person or
services received by such Person (other than long-term service or supply
contracts which require minimum periodic payments), (c) evidenced by bankers'
acceptances or similar instruments issued or accepted by banks or obligations
under interest rate or currency exchange rate agreements, (d) for the payment of
money relating to a lease obligation required to be capitalized for financial
reporting purposes in accordance with GAAP and (e) the obligation of the Company
as lessee under any sale and leaseback transaction.
"EQUIVALENT SECURITIES" shall mean, with respect to each
share of Series B Preferred Stock, a unit consisting of separately detachable
securities that include (a) one share of preferred stock of the Company (or any
successor) having substantially the same rights, preferences, qualifications,
limitations and restrictions (including an equivalent Liquidation Preference)
as the Series B Preferred Stock immediately prior to the issuance of such
preferred stock, except that such preferred stock shall have no voting rights
(other than as may be required under applicable law) and shall have no rights
to receive or participate in any dividends or distributions other than the
right to receive Scheduled Dividends, Default Dividends (when applicable),
Preference Reductions and the then-applicable Liquidation Preference in the
event of any liquidation, dissolution or winding up of the Company (or its
successor) and (b) one share of Common Stock of the Company (or, in the case of
a successor to the Company, the same amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock of the Company is changed or exchanged).
"GAAP" means generally accepted accounting principles,
consistently applied.
"HOLDER" means any holder of the Series B Preferred Stock.
"INCUR" or, as appropriate, an "INCURRENCE" means to create,
incur, assume, guarantee, or otherwise become liable, contingently or otherwise.
"ISSUANCE DATE" means the date of first issuance of the Series
B Preferred Stock.
"LIQUIDATION PREFERENCE" means, with respect to each share of
Series B Preferred Stock, an amount equal to (a) $61.002, plus (b) all accrued
and unpaid Scheduled Dividends thereon, minus (c) the aggregate amount of all
Preference Reductions paid thereon, minus (d) the aggregate amount of all
Forced Sale Liquidation Preference Reduction Amounts paid thereon.
"PAYMENT DATE" shall have the meaning ascribed to that term
in Section 3(A).
"PERSON" means any corporation, individual, joint stock
company, joint venture, partnership, limited liability company, unincorporated
association, governmental regulatory entity, country, state, or political
subdivision thereof, trust, municipality, or other entity.
"PLEDGED SHARES" has the meaning ascribed to that term in
Section 10.
"PREFERRED STOCK" means any class or classes of the Company's
Capital Stock (however designated) that is preferred as to the payment of
dividends, or as to the distribution of assets upon a voluntary or involuntary
liquidation or dissolution of the Company over shares of any other Capital Stock
of the Company.
"REDEMPTION NOTES" means notes representing Debt of the
Company issued to the Holder with an aggregate principal amount equal to the
aggregate Liquidation Preference of the shares of Series B Preferred Stock with
respect to which such Debt is issued as of the date
2
<PAGE> 3
of issuance of such Debt, a maturity date of June 1, 2002 and bearing interest
at a rate of 16% per annum.
"SERIES A SCHEDULED DIVIDENDS" means "Scheduled Dividends" as
defined in the certificate of designations for the Series A Preferred Stock of
the Company as in effect on the Issuance Date.
"SERIES A PREFERRED STOCK" means the Class A Participating
Preferred Stock, Series A of the Company.
"TARC" means TransAmerican Refining Corporation, a Texas
corporation.
"TARC INTERCOMPANY LOAN" means the loan between TARC and TEC
pursuant to the Loan Agreement dated as of June 13, 1997, as amended.
"TEC" TransAmerican Energy Corporation, a Delaware
corporation.
"TEC NOTES" means the Senior Secured Notes of TEC due 2002.
"WORKING CAPITAL LOAN" means the loan from TEC to TARC of up
to $50 million from the proceeds of the sale of the TEC Notes evidenced by a
note dated as of October 1, 1998 as assigned to and assumed by the Company.
SECTION 3. DIVIDENDS AND DISTRIBUTIONS.
(A) Scheduled Dividends. On the dates set forth on Schedule A
(each a "PAYMENT DATE"), the Holder, in preference to the holders of any other
shares of Capital Stock of the Company, shall be entitled to receive, when, as
and if declared by the Board of Directors out of legally available funds
available for such purpose, and, to the extent such funds are legally available
for such purpose, the Board of Directors shall declare, a cash dividend (a
"SCHEDULED DIVIDEND") in an amount per share equal to the amount set forth
opposite such Payment Date on Schedule A.
(B) Special Distributions. In the event the Company shall pay
any dividend or other distribution (other than a Scheduled Dividend, a Series A
Scheduled Dividend or a Preference Reduction) on any shares of its Capital Stock
(a "SPECIAL DISTRIBUTION"), the Holder shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for
such purpose, on the date of payment of such Special Distribution, an amount per
share equal to the amount paid on each other share (in each case, rounded to the
nearest cent) of the aggregate amount of such Special Distribution.
(C) Preference Reductions. The Holder shall also be entitled
to receive dividends or other distributions (other than Scheduled Dividends and
Special Distributions), payable solely to holders of the Series B Preferred
Stock, when, as and if declared by the Board of Directors out
3
<PAGE> 4
of funds legally available for such purpose (a "PREFERENCE REDUCTION"); provided
that the Company shall not declare or pay any Preference Reduction if such
payment would cause the Liquidation Preference to be less than zero. The amount
of each Preference Reduction per share shall equal the aggregate amount of the
Preference Reduction paid on all shares of Series B Preferred Stock divided by
the aggregate amount of all shares of Series B Preferred Stock outstanding at
the time of payment.
(D) Calculations of Value. All calculations of the amount of
dividends or distributions paid to holders of Capital Stock of the Company shall
be made without regard to whether such dividends or other distributions consist
of cash dividends or distributions or non-cash dividends or distributions
(except that dividends payable to the holders of a class or series of Capital
Stock of the Company, in shares of the same such class or series, or a
subdivision of the outstanding shares of Capital Stock of the Company (by
reclassification or otherwise) shall not be considered to have any value for
purposes hereof). Any non-cash dividends or other distributions shall be valued
by the Board of Directors of the Company in good faith and if the valuation so
determined is objected to in writing by the Holder within 30 days of notice of
such valuation, by a nationally recognized investment banking or valuation firm
(an "APPRAISER") selected by the Holder and the Company. If the Company and the
Holder cannot, in good faith, agree upon an Appraiser, then the Company, on the
one hand, and a majority of the holders, on the other hand, each shall elect an
Appraiser, and the two selected Appraisers shall select a third Appraiser who
shall make the required valuation. Such subsequent valuation shall be binding on
the Holder and the Company. No dividend that is not cash shall be paid within
such 30 day period or during such subsequent valuation.
(E) Interpretative Provision. Any reference to "distribution"
contained in this Section 3 shall be deemed not to include any distribution made
in connection with any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary.
(F) Increased Dividends. If the Company fails to pay any
dividend or other distribution in full when due to the Holder under this Section
3 ("UNPAID DISTRIBUTION"), dividends ("DEFAULT DIVIDENDS") shall accrue on the
amount of such Unpaid Distribution for the period from the due date of any such
Unpaid Distribution until such Unpaid Distribution is paid in full and shall be
due and payable until paid at a rate per annum per $100 of the amount of such
Unpaid Distribution equal at all times to the lesser of (i) the rate of the
Scheduled Dividend plus $1.50 per annum per $100 of the amount of such Unpaid
Distribution and (ii) the maximum non-usurious interest rate (if such dividends
were considered as interest), if any, permitted from time to time under
applicable laws to be contracted for, taken, reserved, charged or received as of
the time of calculation of the Default Dividends.
SECTION 4. VOTING RIGHTS. The Holder shall have the following
voting rights:
(A) The Holder shall be entitled to cast one vote per share
held, at each meeting of the stockholders of the Company or pursuant to each
consent by such stockholders, voting in person or by proxy.
(B) The Holder shall be entitled to vote separately as a
class, in person or by proxy, on all matters required by law to be submitted to
a vote by such class of the Series B Preferred Stock.
4
<PAGE> 5
(C) So long as any of the Series B Preferred Stock is
outstanding, the Company shall not, without the affirmative vote or consent of
the Holder of the Series B Preferred Stock, voting separately as a class in
person or by proxy (i) amend, alter or repeal (by merger, consolidation or
otherwise) any provision of the Certificate of Incorporation, so as to affect
adversely the relative rights, preferences, qualifications, limitations or
restrictions of the Series B Preferred Stock, (ii) authorize or issue, or
increase the authorized amount of, any additional class or series of stock, or
any security convertible into stock of such class or series, ranking senior to
or on a parity with the Series B Preferred Stock (other than the Company's Class
A Participating Preferred Stock, Series A) in respect of the payment of
dividends or upon liquidation, dissolution or winding up of the Company, (iii)
effect any reclassification of the Series B Preferred Stock or (iv) Incur any
debt other than the Working Capital Loan.
(D) Except as otherwise provided herein, in the Stockholders
Agreement dated as of the Issuance Date by and among the holders of Capital
Stock of the Company or by law, the Holder shall have no voting rights and their
consent shall not be required for taking any corporate action.
SECTION 5. CERTAIN RESTRICTIONS. Whenever dividends or
distributions are payable on the Series B Preferred Stock as provided in Section
3, thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series B Preferred Stock outstanding shall
have been paid in full, the Company shall not (i) pay dividends, or make any
other distributions, on any other shares of Capital Stock of the Company other
than Series A Preferred Stock, or (ii) redeem or purchase or otherwise acquire
for consideration, any other shares of Capital Stock of the Company other than
the Series A Preferred Stock.
SECTION 6. STATUS OF REACQUIRED OR SURRENDERED SHARES. Any
shares of Series B Preferred Stock redeemed, purchased or otherwise acquired by
the Company in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof.
SECTION 7. LIQUIDATION, DISSOLUTION OR WINDING UP. In the
event of any liquidation, dissolution or winding up of the Company (a
"LIQUIDATION EVENT"), whether voluntary or involuntary, the Holder shall be
entitled to receive out of the assets of the Company, whether such assets are
stated capital or surplus of any nature, for each share of Series B Preferred
Stock, an amount equal to the sum of (a) the Liquidation Preference with respect
to such share as of the date of the Liquidation Event, before any payment shall
be made or any assets distributed to the holders of any other class or series of
the Company's Capital Stock other than Series A Preferred Stock and (b) the
pro-rata portion on a share for share basis of the aggregate amount, in excess
of the Liquidation Preference, distributed to all holders of Common Stock and
all Capital Stock of the Company ranking on a parity with the Common Stock as to
payment of dividends and making of distributions. Neither a merger,
consolidation, or other business combination of the Company with or into another
corporation or other entity nor a sale or transfer of all or part of the
Company's assets for cash, securities or other property shall be considered a
Liquidation Event for purposes of this Section 7 (unless in connection therewith
the liquidation of the Company is specifically approved).
SECTION 8. CONSOLIDATION, MERGER, ETC. The Company shall be
permitted to, without a vote of the holders of Series B Preferred Stock,
consolidate with or merge with or into any other Person, or, directly or
indirectly, sell, lease, assign, transfer or convey all or substantially all of
its assets (on a consolidated basis), to another
5
<PAGE> 6
Person or group of Persons acting in concert, whether in a single transaction or
through a series of related transactions; provided that (i) the Company shall be
the continuing Person or the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or to which all or
substantially all of the properties and assets of the Company are transferred as
an entirety or substantially as an entirety (the Company or such other Person,
the "SURVIVING PERSON"), shall be a corporation or partnership organized and
validly existing under the laws of the United States, any State thereof or the
District of Columbia, and (ii) the Surviving Person shall issue Equivalent
Securities to the Holder on or prior to the consummation of such transaction.
SECTION 9. OPTIONAL REDEMPTION. The Company, at its option,
may redeem Series B Preferred Stock, in whole but not in part, on any date set
by the Board of Directors, by payment, at any time on and after July 15, 1999,
to the Holder of (i) the Redemption Notes, and (ii) one share of Common Stock
for each share of Series B Preferred Stock and by granting a security interest
securing repayment of the Redemption Notes by a springing lien on the Pledged
Shares effective upon repayment of the obligations of the Company pursuant to
Debt issued in exchange for the Company's Series A Preferred Stock pursuant to
the certificate of designations therefor, any such payment being hereinafter
referred to as the "REDEMPTION PRICE".
Not more than 180 nor less than 5 days prior to the redemption
date, notice by first class mail, postage prepaid, shall be given to the Holder
of the shares of Series B Preferred Stock to be redeemed, at the Holder's
address as it shall appear upon the stock transfer books of the Company. Each
such notice of redemption shall specify the date fixed for redemption, the
Redemption Price, the place or places of payment, that payment will be made upon
presentation and surrender of the certificate(s) evidencing the shares of Series
B Preferred Stock to be redeemed and, that on and after the redemption date,
dividends will cease to accrue on such shares.
Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice; and failure to give such notice by mail, or any defect in
such notice, to the Holder shall not affect the validity of the proceedings for
the redemption as stated in such notice of the shares of Series B Preferred
Stock.
6
<PAGE> 7
On and after the date fixed for redemption, the Holder shall surrender the
certificate evidencing such shares to the Company at the place designated in
such notice and shall thereupon be entitled to receive payment of the Redemption
Price as herein provided. If, on the date fixed for redemption, the securities
and other consideration constituting the Redemption Price shall be available
therefor and shall have been irrecoverably deposited or set aside, then,
notwithstanding that the certificates evidencing any shares so called for
redemption shall not have been surrendered, the dividends with respect to the
shares so called shall cease to accrue after the date fixed for redemption, the
shares shall no longer be deemed outstanding, the Holder shall cease to hold
such shares of Series B Preferred Stock, and all rights whatsoever with respect
to the shares so called for redemption (except the right of the Holder to
receive payment of the Redemption Price as herein provided without interest upon
surrender of its certificates therefor) shall terminate. At the close of
business on the redemption date, the Holder (unless the Company defaults on its
obligations to deliver the securities constituting the Redemption Price) shall
be, without any further action, deemed a holder of the securities constituting
the Redemption Price.
Except as set forth in Section 10, the shares of Series B
Preferred Stock shall not be subject to the operation of any purchase,
retirement, mandatory redemption or sinking fund.
The Holder shall not be entitled to receive payment of the
Redemption Price for such shares until it shall cause to be delivered to the
place specified in the notice given with respect to such redemption (i) the
certificate(s) representing such shares of Series B Preferred Stock redeemed and
(ii) transfer instrument(s) reasonably satisfactory to the Company and
sufficient to transfer such shares of Series B Preferred Stock to the Company
free of any adverse interest. No dividends or interest shall accrue on any share
of Series B Preferred Stock after its redemption date.
All shares of Capital Stock of the Company which may be
delivered upon redemption of the Series B Preferred Stock will upon delivery be
duly and validly issued and fully paid and non-assessable, free of all liens
(other than liens created by the Holder) and charges and not subject to any
preemptive rights, and prior to giving notice of redemption the Company shall
take any corporate action necessary therefor.
SECTION 10. FORCED SALE AND MANDATORY REDUCTION OF LIQUIDATION
PREFERENCE. Whenever (A) (i) the Company shall be in default of its obligation
to pay dividends pursuant to Section 3, (ii) holders of the Senior Subordinated
Notes of TARC due 2003 have exercised their foreclosure remedies with respect to
a default under such notes, (iii) the holders of the TEC Notes shall have
released their lien on the shares of common stock of TransContinental Refining
Corporation, a Delaware corporation, owned by the Company on the Issue Date
(adjusted to account for any distribution pro-rata among holders of such common
stock, subdivisions of the outstanding shares of such common stock and
combinations of the outstanding shares of such common stock) (the "PLEDGED
SHARES"), and (iv) the Working Capital Loan is no longer outstanding, or (B) the
Series B Preferred Stock shall be outstanding after June 1, 2002, the Holder
may, upon delivery of written notice to the Company, require the Company to sell
(a "FORCED SALE"),
7
<PAGE> 8
the Pledged Shares; provided however that the Holder shall have the right to
require the Company to apply the proceeds returned to the Company from any
foreclosure on the Pledged Shares by the lender under the Working Capital Loan
and remaining after the exercise of rights of the holders of the TEC Notes to
reduce the aggregate amount of the Liquidation Preference at such time.
The Company shall effect such Forced Sale within 90 days of
receipt of such written notice. The Company shall apply the proceeds of a Forced
Sale, up to the aggregate amount of the Liquidation Preference at such time, to
reduce the Liquidation Preference (such amount, a "FORCED SALE LIQUIDATION
PREFERENCE REDUCTION") of shares of Series B Preferred Stock. The Company shall
effect such Forced Sale Liquidation Preference Reduction by paying a cash
dividend from the proceeds of the Forced Sale to the Holder (the "FORCED SALE
LIQUIDATION PREFERENCE REDUCTION AMOUNT") on a date not later than 10 days after
consummation of the Forced Sale.
SECTION 11. MANDATORY CONVERSION. Upon (i) the closing of the
sale of Common Stock in a firm commitment, underwritten public offering
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
or (ii) the exercise of drag-along rights, with respect to the shares of Series
B Preferred Stock subject thereto, pursuant to the TCR Holding Stockholders
Agreement dated as of the Issuance Date, as amended the shares of Series B
Preferred Stock shall be convertible, at the option of The Company into
Equivalent Securities.
8
<PAGE> 9
SECTION 12. NO PREEMPTIVE RIGHTS. The Series B Preferred Stock
shall not be entitled to any preemptive or subscription rights in respect of any
securities of the Company.
SECTION 13. TRANSFER RESTRICTIONS. The Holder shall not be
permitted to transfer (except pursuant to the pledge agreement between TCR
Holding and TEC dated as of the Issuance Date with respect to the Pledged
Shares) any shares of Series B Preferred Stock by sale, assignment, gift or
other disposition at any time.
SECTION 14. SEVERABILITY OF PROVISIONS. Whenever possible,
each provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
SECTION 15. MUTILATED CERTIFICATES. If a mutilated or spindled
certificate representing shares of Series B Preferred Stock is surrendered to
the Company or if the Holder claims and submits an affidavit or other evidence,
satisfactory to the Company, to the Company to the effect that the certificate
has been lost, destroyed or wrongfully taken, the Company shall issue a
replacement certificate if its requirements for issuance are met. The Company
may require the Holder to provide an indemnity bond or other indemnity,
sufficient in the judgment of the Company to protect the Company from any loss
that it may suffer if a certificate is replaced. The Company may charge the
holder reasonable out-of-pocket expenses in replacing such certificate.
SECTION 16. ADJUSTMENT. Each share of Series B Preferred Stock
shall be adjusted proportionately to account for subdivisions of the outstanding
shares of Common Stock and combinations of the outstanding shares of Common
Stock.
SECTION 17. RIGHT TO RECEIVE STATEMENT. Upon written request
to the Company by any holder of Series B Preferred Stock, the Company shall
provide such holder without charge a statement of the powers, designations,
preferences and relative, participating, optional or other special rights of
the Series B Preferred Stock and the qualifications, limitations, or
restrictions of such preferences and/or rights.
9
<PAGE> 10
IN WITNESS WHEREOF, TCR Holding Corporation has caused this
Certificate of Designations of Series B Preferred Stock to be duly executed by
______________, this ___ th day of December, 1998.
TCR HOLDING CORPORATION
------------------------
10
<PAGE> 11
Schedule A
<TABLE>
<CAPTION>
Date Scheduled Dividend
---- ------------------
<S> <C>
June 15, 1999....................................... $4.88017
December 15, 1999................................... $4.88017
June 15, 2000....................................... $4.88017
December 15, 2000................................... $4.88017
June 15, 2001....................................... $4.88017
December 15, 2001................................... $4.88017
June 1, 2002........................................ $4.88017
</TABLE>
11
<PAGE> 1
EXHIBIT 99.3
CERTIFICATE OF DESIGNATIONS
of
CLASS B JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK
of
TCR Holding Corporation
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
------------------------------------
TCR Holding Corporation, a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the "CORPORATION"),
hereby certifies that the following resolution was adopted at a meeting of the
board of directors of the Corporation (the "BOARD OF DIRECTORS") pursuant to
Section 151(g) of the Delaware General Corporation Law on ____, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Corporation, the Board of Directors
hereby creates a series of Preferred Stock, liquidation preference $0.01 per
share (the "CLASS B JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences and limitations thereof as follows:
Class B Junior Non-Voting Participating Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of this series
shall be designated as "Class B Junior Non-Voting Participating Preferred Stock"
(the "CLASS B JUNIOR PREFERRED STOCK") and the number of shares constituting the
Class B Junior Preferred Stock shall be 7,500,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors ; provided, that
no decrease shall reduce the number of shares of Class B Junior Preferred Stock
to a number less than the number of shares then outstanding.
SECTION 2. LIQUIDATION PREFERENCE. In the event of a
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, (a) before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of classes or series of stock or other securities of the Corporation
ranking junior to the Class B Junior Preferred Stock upon liquidation,
dissolution or winding up and (b)
<PAGE> 2
after the payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of classes or
series of stock or other securities of the Corporation ranking prior to the
Class B Junior Preferred Stock upon liquidation, dissolution or winding up, the
holders of the Class B Junior Preferred Stock shall be entitled to receive $0.01
per share. The holders of the Class B Junior Preferred Stock shall not be
entitled to receive or participate in any payment or distribution of the assets
of the Corporation upon such liquidation, dissolution or winding up in excess of
$0.01 per share until the holders of the Common Stock shall have received
payment upon such liquidation, dissolution or winding up of the Corporation of
$0.01 per share, and thereafter the holders of the Common Stock and the Class B
Junior Preferred Stock (together with the holders of any series of preferred
stock and/or Class B Junior Preferred Stock which, pursuant to the resolution or
resolutions of the Board of Directors providing for the issue of such series,
shall be entitled to participate therein with the holders of the Common Stock
and the Class B Junior Preferred Stock) shall be entitled to participate
equally, share for share as if a single class, in any further payment or
distribution of the assets of the Corporation upon such liquidation, dissolution
or winding up of the Corporation.
The Class B Junior Preferred Stock shall rank, as to the
payment or distribution of the assets of the Corporation (whether capital or
surplus) upon liquidation, dissolution or winding up of the Corporation, (a)
junior to the Corporation's Class A Participating Preferred Stock Series A and
Class A Participating Preferred Stock Series B (but only to the extent of the
liquidation preference thereon) and (b) on parity with all other securities of
the Corporation (except as provided in the preceding paragraph).
SECTION 3. VOTING. Except as otherwise required by law, the
holders of Class B Junior Preferred Stock shall not be entitled to vote such
shares on any matter on which the stockholders of the Corporation shall be
entitled to vote, and shares of Class B Junior Preferred Stock shall not be
included in determining the number of shares voting or entitled to vote on any
such matters.
SECTION 4. DIVIDENDS. The holders of Class B Junior Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, dividends and
distributions per share equal to the aggregate amount per share (payable in
kind) of all cash dividends or other distributions (whether by way of a dividend
or a reclassification of stock, a recapitalization, reorganization or a partial
liquidation of the Corporation or otherwise) declared on the Common Stock. The
Corporation shall declare a dividend or other distribution on the Class B Junior
Preferred Stock at the same time it declares a dividend or other distribution on
the Common Stock. No cash or non-cash dividend or other distribution shall be
paid or set aside for payment on the Common Stock (or any other securities
ranking, as to the payment of dividends, on a parity with or junior to the Class
B Junior Preferred Stock) unless a dividend or other distribution in respect of
such dividend or other distribution on the Common Stock shall be simultaneously
paid, or set aside for payment on the Class B Junior Preferred Stock in the
amount required by this Section 4. If the Corporation in any manner splits,
subdivides or combines the outstanding shares of Common Stock, the outstanding
shares of Class B Junior Preferred Stock shall be split, subdivided or combined
in the same manner proportionately and on the same basis per share.
The Class B Junior Preferred Stock shall rank, as to the
payment of dividends, (a) junior to the Corporation's Class A Participating
Preferred Stock Series A and Class A Participating Preferred Stock Series B
(but only to the extent of the liquidation preference thereon and except as to
Special Distributions as defined in the certificate of designations as to such
Class A Preferred Stock) and (b) on a parity with all other securities of the
Corporation.
SECTION 5. CONVERSION; NO PREEMPTIVE RIGHTS; NO REDEMPTION.
Except as set forth in Section 2 and Section 6, the shares of Class B Junior
Preferred Stock shall not be convertible. The Class B Junior Preferred Stock
shall not be entitled to any preemptive or subscription rights in respect of any
securities of the Corporation. The Class B Junior Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof except as
otherwise required by law.
SECTION 6. CONVERSION.
(A) Forced Conversion. The Company may force the conversion of
each share of Class B Junior Preferred Stock into one fully paid and
non-assessable, non-voting (or, with the approval of the Board of Directors,
voting) share of Common Stock at any time after (i) the closing of the sale of
the Common Stock in a firm commitment, underwritten public offering registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), other than
a registration relating solely to a transaction under
2
<PAGE> 3
Rule 145 promulgated under the Securities Act or to an employee benefit plan of
the Company, (ii) the consummation of a merger of the Corporation with and into
any other Person or sale of all or substantially all of the assets of the
Corporation to any other Person, (iii) the Transfer of the Majority Voting
Securities to a Third Party (each of such capitalized terms as defined in the
TCR Holding Stockholders Agreement dated as of the date of initial issuance of
securities hereunder, as amended (the "STOCKHOLDERS AGREEMENT")) and (iv) the
exercise by TransAmerican Energy Corporation, a Delaware corporation, of its
repurchase rights under that certain Repurchase Rights Agreement dated as of the
date of initial issuance of securities hereunder (the "REPURCHASE RIGHTS
AGREEMENT"). "PERSON" means any corporation, individual, joint stock company,
joint venture, partnership, unincorporated association, governmental regulatory
entity, country, state, or political subdivision thereof, trust, municipality,
or other entity.
Such conversion shall be effective immediately upon notice of
such conversion by the Corporation to the stockholders and, from and after the
time of such notice, each certificate representing shares of Class B Junior
Preferred Stock shall be deemed to represent shares of non-voting (or, with the
approval of the Board of Directors, voting) Common Stock and the holder of any
such certificates representing shares of Class B Junior Preferred Stock shall be
entitled to have the Corporation exchange such certificate for a certificate
representing such Common Stock of the Corporation.
(B) Right of Conversion. Subject to and upon compliance with
the provisions of this Section 6(B), each share of Class B Junior Preferred
Stock shall, at the option of the holder of record thereof, be convertible at
any time, into one fully paid and non-assessable, non-voting share of Common
Stock (calculated as to each conversion to the nearest 1/100th of a share).
In order to exercise the conversion privilege, the holder of
one or more shares of Class B Junior Preferred Stock to be converted shall
surrender such shares at the principal executive office of the Corporation (or
at any other office or agency that is to be maintained for such purpose of which
the Corporation gives notice to such holders) accompanied by the funds, if any,
required below and shall give written notice of conversion in the form provided
on such shares of Class B Junior Preferred Stock (or such other notice as is
acceptable to the Corporation) to the Corporation at such office or agency that
the holder specifies in said notice. Such notice shall also state the name or
names, together with the address or addresses, in which the certificate or
certificates shall be issued for shares of non-voting Common Stock which shall
be issuable in such conversion. Each share of Class B Junior Preferred Stock
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the name in which such share is registered, be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder of record or his duly authorized attorney and an
amount sufficient to pay any transfer or similar tax. As promptly as practicable
after the surrender of such shares of Class B Junior Preferred Stock and the
receipt of such notice, instruments of transfer and funds, if any, as aforesaid,
the Corporation shall issue and deliver at such office or agency to such holder,
or on such holder's written order, a certificate or certificates for the number
of full shares of non-voting Common Stock issuable upon the conversion of such
share of Class B Junior Preferred Stock in accordance with the provisions of
this Section 6(B).
3
<PAGE> 4
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such shares of
Class B Junior Preferred Stock shall have been surrendered and such notice (and
any applicable instruments of transfer and any required taxes) received by the
Corporation as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of non-voting Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such person or persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open.
The Corporation covenants that it will at all times take
action to reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of non-voting Common Stock or
its issued shares of non-voting Common Stock held in its treasury, or both, for
the purpose of effecting conversions of shares of Class B Junior Preferred
Stock, the full number of shares of non-voting Common Stock deliverable upon the
conversion of all outstanding shares of Class B Junior Preferred Stock not
theretofore converted and on or before (and as a condition of) taking any action
that would result in an increase in the number of shares of non-voting Common
Stock deliverable upon conversion above the number thereof previously reserved
and available therefor, the Corporation shall take all such action so required.
The Corporation covenants that all shares of non-voting Common Stock which may
be delivered upon conversions of shares of Class B Junior Preferred Stock will
upon delivery be duly and validly issued and fully paid and non-assessable, free
of all liens and charges and not subject to any preemptive rights.
SECTION 7. REACQUIRED SHARES. Any shares of Class B Junior
Preferred Stock redeemed, purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Amended and Restated Certificate of
Incorporation or in any other certificate of designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
SECTION 8. OTHER RIGHTS AND PREFERENCES. Except as otherwise
specifically set forth herein, all shares of Class B Junior Preferred Stock and
Common Stock shall have the same rights, preferences and privileges.
4
<PAGE> 5
SECTION 9. TRANSFER RESTRICTIONS. Holders of the Class B
Junior Preferred Stock shall not be permitted to transfer any shares of Class B
Junior Preferred Stock by sale, assignment, gift or other disposition
("TRANSFER") at any time if such transfer would require registration under the
Securities Act. In addition, no holder may Transfer shares of Class B Junior
Preferred Stock in violation of the Stockholders Agreement or of the Repurchase
Rights Agreement.
SECTION 10. SEVERABILITY OF PROVISIONS. Whenever possible,
each provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
5
<PAGE> 6
IN WITNESS WHEREOF, TCR Holding Corporation has caused this
Certificate of Designations of Class B Junior Preferred Stock to be duly
executed by its ____________, this __th day of December, 1998.
TCR Holding Corporation
-------------------------------
6
<PAGE> 1
Exhibit 99.4
CERTIFICATE OF DESIGNATIONS
of
CLASS C JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK
of
TCR Holding Corporation
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
------------------------------------
TCR Holding Corporation, a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the "CORPORATION"),
hereby certifies that the following resolution was adopted at a meeting of the
board of directors of the Corporation (the "BOARD OF DIRECTORS") pursuant to
Section 151(g) of the Delaware General Corporation Law on ____, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Corporation, the Board of Directors
hereby creates a series of Preferred Stock, liquidation preference $.01 per
share (the "CLASS C JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences and limitations thereof as follows:
Class C Junior Non-Voting Participating Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of this series
shall be designated as "Class C Junior Non-Voting Participating Preferred Stock"
(the "CLASS C JUNIOR PREFERRED STOCK") and the number of shares constituting the
Class C Junior Preferred Stock shall be 4,125,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Class C Junior Preferred Stock
to a number less than the number of shares then outstanding.
SECTION 2. LIQUIDATION PREFERENCE. In the event of a
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, (a) before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of classes or series of stock or other securities of the Corporation
ranking junior to the Class C Junior Preferred Stock upon liquidation,
dissolution or winding up and (b)
<PAGE> 2
after the payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of classes or
series of stock or other securities of the Corporation ranking prior to the
Class C Junior Preferred Stock upon liquidation, dissolution or winding up, the
holders of the Class C Junior Preferred Stock shall be entitled to receive $.01
per share. The holders of the Class C Junior Preferred Stock shall not be
entitled to receive or participate in any payment or distribution of the assets
of the Corporation upon such liquidation, dissolution or winding up in excess of
$0.01 per share until the holders of the Common Stock shall have received
payment upon such liquidation, dissolution or winding up of the Corporation of
$0.01 per share, and thereafter the holders of the Common Stock and the Class C
Junior Preferred Stock (together with the holders of any series of preferred
stock and/or Class C Junior Preferred Stock which, pursuant to the resolution or
resolutions of the Board of Directors providing for the issue of such series,
shall be entitled to participate therein with the holders of the Common Stock
and the Class C Junior Preferred Stock) shall be entitled to participate
equally, share for share as if a single class, in any further payment or
distribution of the assets of the Corporation upon such liquidation, dissolution
or winding up of the Corporation.
The Class C Junior Preferred Stock shall rank, as to the
payment or distribution of the assets of the Corporation (whether capital or
surplus) upon liquidation, dissolution or winding up of the Corporation, (a)
junior to the Corporation's Class A Participating Preferred Stock Series A and
Class A Participating Preferred Stock Series B (but only to the extent of the
liquidation preference thereon) and (b) on parity with all other securities of
the Corporation (except as provided in the preceding paragraph).
SECTION 3. VOTING. Except as otherwise required by law, the
holders of Class C Junior Preferred Stock shall not be entitled to vote such
shares on any matter on which the stockholders of the Corporation shall be
entitled to vote, and shares of Class C Junior Preferred Stock shall not be
included in determining the number of shares voting or entitled to vote on any
such matters.
SECTION 4. DIVIDENDS. The holders of Class C Junior Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, dividends and
distributions per share equal to the aggregate amount per share (payable in
kind) of all cash dividends or other distributions (whether by way of a dividend
or a reclassification of stock, a recapitalization, reorganization or a partial
liquidation of the Corporation or otherwise) declared on the Common Stock. The
Corporation shall declare a dividend or other distribution on the Class C Junior
Preferred Stock at the same time it declares a dividend or other distribution on
the Common Stock. No cash or non-cash dividend or other distribution shall be
paid or set aside for payment on the Common Stock (or any other securities
ranking, as to the payment of dividends, on a parity with or junior to the Class
C Junior Preferred Stock) unless a dividend or other distribution in respect of
such dividend or other distribution on the Common Stock shall be simultaneously
paid, or set aside for payment on the Class C Junior Preferred Stock in the
amount required by this Section 4. If the Corporation in any manner splits,
subdivides or combines the outstanding shares of Common Stock, the outstanding
shares of Class C Junior Preferred Stock shall be split, subdivided or combined
in the same manner proportionately and on the same basis per share.
The Class C Junior Preferred Stock shall rank, as to the
payment of dividends, (a) junior to the Corporation's Class A Participating
Preferred Stock Series A and Class A Participating Preferred Stock Series B (but
only to the extent of the liquidation preference thereon and except as to
Special Distributions as defined in the certificate of designations as to such
Class A Preferred Stock) and (b) on a parity with all other securities of the
Corporation.
SECTION 5. CONVERSION; NO PREEMPTIVE RIGHTS; NO REDEMPTION.
Except as set forth in Section 2 and Section 6, the shares of Class C Junior
Preferred Stock shall not be convertible. The Class C Junior Preferred Stock
shall not be entitled to any preemptive or subscription rights in respect of any
securities of the Corporation. The Class C Junior Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof except as
otherwise required by law.
SECTION 6. CONVERSION.
(A) Forced Conversion. The Company may force the conversion of
each share of Class C Junior Preferred Stock into one fully paid and
non-assessable, non-voting (or, with the approval of the Board of Directors,
voting) share of Common Stock at any time after (i) the closing of the sale of
the Common Stock in a firm commitment, underwritten public offering registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), other than
a registration relating solely to a transaction under
2
<PAGE> 3
Rule 145 promulgated under the Securities Act or to an employee benefit plan of
the Company, (ii) the consummation of a merger of the Corporation with and into
any other Person or sale of all or substantially all of the assets of the
Corporation to any other Person, (iii) the Transfer of the Majority Voting
Securities to a Third Party (each of such capitalized terms as defined in the
TCR Holding Stockholders Agreement dated as of the date of initial issuance of
securities hereunder, as amended (the "STOCKHOLDERS AGREEMENT")) and (iv) the
exercise by TransAmerican Energy Corporation, a Delaware corporation, of its
repurchase rights under that certain Repurchase Rights Agreement dated as of the
date of initial issuance of securities hereunder (the "REPURCHASE RIGHTS
AGREEMENT"). "PERSON" means any corporation, individual, joint stock company,
joint venture, partnership, unincorporated association, governmental regulatory
entity, country, state, or political subdivision thereof, trust, municipality,
or other entity.
Such conversion shall be effective immediately upon notice of
such conversion by the Corporation to the stockholders and, from and after the
time of such notice, each certificate representing shares of Class C Junior
Preferred Stock shall be deemed to represent shares of non-voting (or, with the
approval of the Board of Directors, voting) Common Stock and the holder of any
such certificates representing shares of Class C Junior Preferred Stock shall be
entitled to have the Corporation exchange such certificate for a certificate
representing such Common Stock of the Corporation.
(B) Right of Conversion. Subject to and upon compliance with
the provisions of this Section 6(B), each share of Class C Junior Preferred
Stock shall, at the option of the holder of record thereof, be convertible at
any time, into one fully paid and non-assessable, non-voting share of Common
Stock (calculated as to each conversion to the nearest 1/100th of a share).
In order to exercise the conversion privilege, the holder of
one or more shares of Class C Junior Preferred Stock to be converted shall
surrender such shares at the principal executive office of the Corporation (or
at any other office or agency that is to be maintained for such purpose of which
the Corporation gives notice to such holders) accompanied by the funds, if any,
required below and shall give written notice of conversion in the form provided
on such shares of Class C Junior Preferred Stock (or such other notice as is
acceptable to the Corporation) to the Corporation at such office or agency that
the holder specifies in said notice. Such notice shall also state the name or
names, together with the address or addresses, in which the certificate or
certificates shall be issued for shares of non-voting Common Stock which shall
be issuable in such conversion. Each share of Class C Junior Preferred Stock
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the name in which such share is registered, be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder of record or his duly authorized attorney and an
amount sufficient to pay any transfer or similar tax. As promptly as practicable
after the surrender of such shares of Class C Junior Preferred Stock and the
receipt of such notice, instruments of transfer and funds, if any, as aforesaid,
the Corporation shall issue and deliver at such office or agency to such holder,
or on such holder's written order, a certificate or certificates for the number
of full shares of non-voting Common Stock issuable upon the conversion of such
share of Class C Junior Preferred Stock in accordance with the provisions of
this Section 6(B).
3
<PAGE> 4
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such shares of
Class C Junior Preferred Stock shall have been surrendered and such notice (and
any applicable instruments of transfer and any required taxes) received by the
Corporation as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of non-voting Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such person or persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open.
The Corporation covenants that it will at all times take
action to reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of non-voting Common Stock or
its issued shares of non-voting Common Stock held in its treasury, or both, for
the purpose of effecting conversions of shares of Class C Junior Preferred
Stock, the full number of shares of non-voting Common Stock deliverable upon the
conversion of all outstanding shares of Class C Junior Preferred Stock not
theretofore converted and on or before (and as a condition of) taking any action
that would result in an increase in the number of shares of non-voting Common
Stock deliverable upon conversion above the number thereof previously reserved
and available therefor, the Corporation shall take all such action so required.
The Corporation covenants that all shares of non-voting Common Stock which may
be delivered upon conversions of shares of Class C Junior Preferred Stock will
upon delivery be duly and validly issued and fully paid and non-assessable, free
of all liens and charges and not subject to any preemptive rights.
SECTION 7. REACQUIRED SHARES. Any shares of Class C Junior
Preferred Stock redeemed, purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Amended and Restated Certificate of
Incorporation or in any other certificate of designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
SECTION 8. OTHER RIGHTS AND PREFERENCES. Except as otherwise
specifically set forth herein, all shares of Class C Junior Preferred Stock and
Common Stock shall have the same rights, preferences and privileges.
4
<PAGE> 5
SECTION 9. TRANSFER RESTRICTIONS. Holders of the Class C
Junior Preferred Stock shall not be permitted to transfer any shares of Class C
Junior Preferred Stock by sale, assignment, gift or other disposition
("TRANSFER") at any time if such transfer would require registration under the
Securities Act. In addition, no holder may Transfer shares of Class C Junior
Preferred Stock in violation of the Stockholders Agreement or of the Repurchase
Rights Agreement.
SECTION 10. Severability of Provisions. Whenever possible,
each provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
5
<PAGE> 6
IN WITNESS WHEREOF, TCR Holding Corporation has caused this
Certificate of Designations of Class C Junior Preferred Stock to be duly
executed by its ____________, this __th day of December, 1998.
TCR Holding Corporation
---------------------------
6
<PAGE> 1
EXHIBIT 99.5
CERTIFICATE OF DESIGNATIONS
of
CLASS D JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK
of
TCR Holding Corporation
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
------------------------------------
TCR Holding Corporation, a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the "CORPORATION"),
hereby certifies that the following resolution was adopted at a meeting of the
board of directors of the Corporation (the "BOARD OF DIRECTORS") pursuant to
Section 151(g) of the Delaware General Corporation Law on ____, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Corporation, the Board of Directors
hereby creates a series of Preferred Stock, liquidation preference $0.01 per
share (the "CLASS D JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences and limitations thereof as follows:
Class D Junior Non-Voting Participating Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of this series
shall be designated as "Class D Junior Non-Voting Participating Preferred Stock"
(the "CLASS D JUNIOR PREFERRED STOCK") and the number of shares constituting the
Class D Junior Preferred Stock shall be 10,875,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Class D Junior Preferred Stock
to a number less than the number of shares then outstanding.
SECTION 2. LIQUIDATION PREFERENCE. In the event of a
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, (a) before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of classes or series of stock or other securities of the Corporation
ranking junior to the Class D Junior Preferred Stock upon liquidation,
dissolution or winding up and (b) after the payment or distribution of the
assets of the Corporation (whether capital or surplus)
<PAGE> 2
shall be made to or set apart for the holders of classes or series of stock or
other securities of the Corporation ranking prior, to the Class D Junior
Preferred Stock upon liquidation, dissolution or winding up, the holders of the
Class D Junior Preferred Stock shall be entitled to receive $0.01 per share. The
holders of the Class D Junior Preferred Stock shall not be entitled to receive
or participate in any payment or distribution of the assets of the Corporation
upon such liquidation, dissolution or winding up in excess of $0.01 per share
until the holders of the Common Stock shall have received payment upon such
liquidation, dissolution or winding up of the Corporation of $0.01 per share,
and thereafter the holders of the Common Stock and the Class D Junior Preferred
Stock (together with the holders of any series of preferred stock and/or Class D
Junior Preferred Stock which, pursuant to the resolution or resolutions of the
Board of Directors providing for the issue of such series, shall be entitled to
participate therein with the holders of the Common Stock and the Class D Junior
Preferred Stock) shall be entitled to participate equally, share for share as if
a single class, in any further payment or distribution of the assets of the
Corporation upon such liquidation, dissolution or winding up of the Corporation.
The Class D Junior Preferred Stock shall rank, as to the payment or
distribution of the assets of the Corporation (whether capital or surplus) upon
liquidation, dissolution or winding up of the Corporation, (a) junior to the
Corporation's Class A Participating Preferred Stock Series A and Class A
Participating Preferred Stock Series B (but only to the extent of the
liquidation preference thereon) and (b) on parity with all other securities of
the Corporation (except as provided in the preceding paragraph).
SECTION 3. VOTING. Except as otherwise required by law, the
holders of Class D Junior Preferred Stock shall not be entitled to vote such
shares on any matter on which the stockholders of the Corporation shall be
entitled to vote, and shares of Class D Junior Preferred Stock shall not be
included in determining the number of shares voting or entitled to vote on any
such matters.
SECTION 4. DIVIDENDS. The holders of Class D Junior Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, dividends and
distributions per share equal to the aggregate amount per share (payable in
kind) of all cash dividends or other distributions (whether by way of a dividend
or a reclassification of stock, a recapitalization, reorganization or a partial
liquidation of the Corporation or otherwise) declared on the Common Stock. The
Corporation shall declare a dividend or other distribution on the Class D Junior
Preferred Stock at the same time it declares a dividend or other distribution on
the Common Stock. No cash or non-cash dividend or other distribution shall be
paid or set aside for payment on the Common Stock (or any other securities
ranking, as to the payment of dividends, on a parity with or junior to the Class
D Junior Preferred Stock) unless a dividend or other distribution in respect of
such dividend or other distribution on the Common Stock shall be simultaneously
paid, or set aside for payment on the Class D Junior Preferred Stock in the
amount required by this Section 4. If the Corporation in any manner splits,
subdivides or combines the outstanding shares of Common Stock, the outstanding
shares of Class D Junior Preferred Stock shall be split, subdivided or combined
in the same manner proportionately and on the same basis per share.
The Class D Junior Preferred Stock shall rank, as to the payment of
dividends, (a) junior to the Corporation's Class A Participating Preferred Stock
Series A and Class A Participating Preferred Stock Series B (but only to the
extent of the liquidation preference thereon and except as to Special
Distributions as defined in the certificate of designations as to such Class A
Preferred Stock) and (b) on a parity with all other securities of the
Corporation.
SECTION 5. CONVERSION; NO PREEMPTIVE RIGHTS; NO REDEMPTION.
Except as set forth in Section 2 and Section 6, the shares of Class D Junior
Preferred Stock shall not be convertible. The Class D Junior Preferred Stock
shall not be entitled to any preemptive or subscription rights in respect of any
securities of the Corporation. The Class D Junior Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof except as
otherwise required by law.
SECTION 6. CONVERSION.
(A) Forced Conversion. The Company may force the conversion of
each share of Class D Junior Preferred Stock into one fully paid and
non-assessable, non-voting (or, with the approval of the Board of Directors,
voting) share of Common Stock at any time after (i) the closing of the sale of
the Common Stock in a firm commitment, underwritten public offering registered
under the Securities Act of 1933, as amended (the "SECURITIES ACT"), other than
a registration relating solely to a transaction under Rule 145 promulgated under
the Securities Act or to an employee benefit plan of the Company,
2
<PAGE> 3
(ii) the consummation of a merger of the Corporation with and into any other
Person or sale of all or substantially all of the assets of the Corporation to
any other Person, (iii) the Transfer of the Majority Voting Securities to a
Third Party (each of such capitalized terms as defined in the TCR Holding
Stockholders Agreement dated as of the date of initial issuance of securities
hereunder, as amended (the "STOCKHOLDERS AGREEMENT")) and (iv) the exercise by
TransAmerican Energy Corporation, a Delaware corporation, of its repurchase
rights under that certain Repurchase Rights Agreement dated as of the date of
initial issuance of securities hereunder (the "REPURCHASE RIGHTS AGREEMENT").
"PERSON" means any corporation, individual, joint stock company, joint venture,
partnership, unincorporated association, governmental regulatory entity,
country, state, or political subdivision thereof, trust, municipality, or other
entity.
Such conversion shall be effective immediately upon notice of
such conversion by the Corporation to the stockholders and, from and after the
time of such notice, each certificate representing shares of Class D Junior
Preferred Stock shall be deemed to represent shares of non-voting (or, with the
approval of the Board of Directors, voting) Common Stock and the holder of any
such certificates representing shares of Class D Junior Preferred Stock shall be
entitled to have the Corporation exchange such certificate for a certificate
representing such Common Stock of the Corporation.
(B) Right of Conversion. Subject to and upon compliance with
the provisions of this Section 6(B), each share of Class D Junior Preferred
Stock shall, at the option of the holder of record thereof, be convertible at
any time, into one fully paid and non-assessable, non-voting share of Common
Stock (calculated as to each conversion to the nearest 1/100th of a share).
In order to exercise the conversion privilege, the holder of
one or more shares of Class D Junior Preferred Stock to be converted shall
surrender such shares at the principal executive office of the Corporation (or
at any other office or agency that is to be maintained for such purpose of which
the Corporation gives notice to such holders) accompanied by the funds, if any,
required below and shall give written notice of conversion in the form provided
on such shares of Class D Junior Preferred Stock (or such other notice as is
acceptable to the Corporation) to the Corporation at such office or agency that
the holder specifies in said notice. Such notice shall also state the name or
names, together with the address or addresses, in which the certificate or
certificates shall be issued for shares of non-voting Common Stock which shall
be issuable in such conversion. Each share of Class D Junior Preferred Stock
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the name in which such share is registered, be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder of record or his duly authorized attorney and an
amount sufficient to pay any transfer or similar tax. As promptly as practicable
after the surrender of such shares of Class D Junior Preferred Stock and the
receipt of such notice, instruments of transfer and funds, if any, as aforesaid,
the Corporation shall issue and deliver at such office or agency to such holder,
or on such holder's written order, a certificate or certificates for the number
of full shares of non-voting Common Stock issuable upon the conversion of such
share of Class D Junior Preferred Stock in accordance with the provisions of
this Section 6(B).
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such shares of
Class D Junior Preferred Stock shall have
3
<PAGE> 4
been surrendered and such notice (and any applicable instruments of transfer and
any required taxes) received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates for shares of
non-voting Common Stock shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented thereby
at such time on such date, unless the stock transfer books of the Corporation
shall be closed on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of business
on the next succeeding day on which such stock transfer books are open.
The Corporation covenants that it will at all times take
action to reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of non-voting Common Stock or
its issued shares of non-voting Common Stock held in its treasury, or both, for
the purpose of effecting conversions of shares of Class D Junior Preferred
Stock, the full number of shares of non-voting Common Stock deliverable upon the
conversion of all outstanding shares of Class D Junior Preferred Stock not
theretofore converted and on or before (and as a condition of) taking any action
that would result in an increase in the number of shares of non-voting Common
Stock deliverable upon conversion above the number thereof previously reserved
and available therefor, the Corporation shall take all such action so required.
The Corporation covenants that all shares of non-voting Common Stock which may
be delivered upon conversions of shares of Class D Junior Preferred Stock will
upon delivery be duly and validly issued and fully paid and non-assessable, free
of all liens and charges and not subject to any preemptive rights.
SECTION 7. REACQUIRED SHARES. Any shares of Class D Preferred
Stock redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions on issuance set
forth herein, in the Amended and Restated Certificate of Incorporation or in any
other certificate of designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
SECTION 8. OTHER RIGHTS AND PREFERENCES. Except as otherwise
specifically set forth herein, all shares of Class D Junior Preferred Stock and
Common Stock shall have the same rights, preferences and privileges.
4
<PAGE> 5
SECTION 9. TRANSFER RESTRICTIONS. Holders of the Class D
Junior Preferred Stock shall not be permitted to transfer any shares of Class D
Junior Preferred Stock by sale, assignment, gift or other disposition
("TRANSFER") at any time if such transfer would require registration under the
Securities Act. In addition, no holder may Transfer shares of Class D Junior
Preferred Stock in violation of the Stockholders Agreement or of the Repurchase
Rights Agreement.
SECTION 10. SEVERABILITY OF PROVISIONS. Whenever possible,
each provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
5
<PAGE> 6
IN WITNESS WHEREOF, TCR Holding Corporation has caused this
Certificate of Designations of Class D Junior Preferred Stock to be duly
executed by its ____________, this __th day of December, 1998.
TCR Holding Corporation
-------------------------------
6
<PAGE> 1
EXHIBIT 99.6
CERTIFICATE OF DESIGNATIONS
of
CLASS E JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK
of
TCR Holding Corporation
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
------------------------------------
TCR Holding Corporation, a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the "CORPORATION"),
hereby certifies that the following resolution was adopted at a meeting of the
board of directors of the Corporation (the "BOARD OF DIRECTORS") pursuant to
Section 151(g) of the Delaware General Corporation Law on ____, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Corporation, the Board of Directors
hereby creates a series of Preferred Stock, liquidation preference $ 0.01 per
share (the "CLASS E JUNIOR NON-VOTING PARTICIPATING PREFERRED STOCK"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences and limitations thereof as follows:
Class E Junior Non-Voting Participating Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of this series
shall be designated as "Class E Junior Non-Voting Participating Preferred Stock"
(the "CLASS E JUNIOR PREFERRED STOCK") and the number of shares constituting the
Class E Junior Preferred Stock shall be 24,900,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Class E Junior Preferred Stock
to a number less than the number of shares then outstanding.
SECTION 2. LIQUIDATION PREFERENCE. In the event of a
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, (a) before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of classes or series of stock or other securities of the Corporation
ranking junior to the Class E Junior Preferred Stock upon liquidation,
dissolution or winding up and (b)
<PAGE> 2
after the payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of classes or
series of stock or other securities of the Corporation ranking prior, to the
Class E Junior Preferred Stock upon liquidation, dissolution or winding up, the
holders of the Class E Junior Preferred Stock shall be entitled to receive $0.01
per share. The holders of the Class E Junior Preferred Stock shall not be
entitled to receive or participate in any payment or distribution of the assets
of the Corporation upon such liquidation, dissolution or winding up in excess of
$0.01 per share until the holders of the Common Stock shall have received
payment upon such liquidation, dissolution or winding up of the Corporation of
$0.01 per share, and thereafter the holders of the Common Stock and the Class E
Junior Preferred Stock (together with the holders of any series of preferred
stock and/or Class E Junior Stock which, pursuant to the resolution or
resolutions of the Board of Directors providing for the issue of such series,
shall be entitled to participate therein with the holders of the Common Stock
and the Class E Junior Preferred Stock) shall be entitled to participate
equally, share for share as if a single class, in any further payment or
distribution of the assets of the Corporation upon such liquidation, dissolution
or winding up of the Corporation.
The Class E Junior Preferred Stock shall rank, as to the payment or
distribution of the assets of the Corporation (whether capital or surplus) upon
liquidation, dissolution or winding up of the Corporation, (a) junior to the
Corporation's Class A Participating Preferred Stock Series A and Class A
Participating Preferred Stock Series B (but only to the extent of the
liquidation preference thereon) and (b) on parity with all other securities of
the Corporation (except as provided in the preceding paragraph).
SECTION 3. VOTING. Except as otherwise required by law, the
holders of Class E Junior Preferred Stock shall not be entitled to vote such
shares on any matter on which the stockholders of the Corporation shall be
entitled to vote, and shares of Class E Junior Preferred Stock shall not be
included in determining the number of shares voting or entitled to vote on any
such matters.
SECTION 4. DIVIDENDS. The holders of Class E Junior Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for that purpose, dividends and
distributions per share equal to the aggregate amount per share (payable in
kind) of all cash dividends or other distributions (whether by way of a dividend
or a reclassification of stock, a recapitalization, reorganization or a partial
liquidation of the Corporation or otherwise) declared on the Common Stock. The
Corporation shall declare a dividend or other distribution on the Class E Junior
Preferred Stock at the same time it declares a dividend or other distribution on
the Common Stock. No cash or non-cash dividend or other distribution shall be
paid or set aside for payment on the Common Stock (or any other securities
ranking, as to the payment of dividends, on a parity with or junior to the Class
E Junior Preferred Stock) unless a dividend or other distribution in respect of
such dividend or other distribution on the Common Stock shall be simultaneously
paid, or set aside for payment on the Class E Junior Preferred Stock in the
amount required by this Section 4. If the Corporation in any manner splits,
subdivides or combines the outstanding shares of Common Stock, the outstanding
shares of Class E Junior Preferred Stock shall be split, subdivided or combined
in the same manner proportionately and on the same basis per share.
The Class E Junior Preferred Stock shall rank, as to the
payment of dividends, (a) junior to the Corporation's Class A Participating
Preferred Stock Series A and Class A Participating Preferred Stock Series B (but
only to the extent of the liquidation preference thereon and except as to
Special Distributions as defined in the certificate of designations as to such
Class A Preferred Stock) and (b) on a parity with all other securities of the
Corporation.
SECTION 5. CONVERSION; NO PREEMPTIVE RIGHTS; NO REDEMPTION.
Except as set forth in Section 2 and Section 6, the shares of Class E Junior
Preferred Stock shall not be convertible. The Class E Junior Preferred Stock
shall not be entitled to any preemptive or subscription rights in respect of any
securities of the Corporation. The Class E Junior Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof except as
otherwise required by law.
SECTION 6. CONVERSION.
(A) Forced Conversion. The Company may force the conversion of
each share of Class E Junior Preferred Stock into one fully paid and
non-assessable, non-voting (or, with the approval of the Board of Directors,
voting) share of Common Stock at any time after (i) the closing of the sale of
the Common Stock in a firm commitment, underwritten public offering registered
under the Securities Act of 1933, as
2
<PAGE> 3
amended (the "SECURITIES ACT"), other than a registration relating solely to a
transaction under Rule 145 promulgated under the Securities Act or to an
employee benefit plan of the Company, (ii) the consummation of a merger of the
Corporation with and into any other Person or sale of all or substantially all
of the assets of the Corporation to any other Person, (iii) the Transfer of the
Majority Voting Securities to a Third Party (each of such capitalized terms as
defined in the TCR Holding Stockholders Agreement dated as of the date of
initial issuance of securities hereunder, as amended (the "STOCKHOLDERS
AGREEMENT")) and (iv) the exercise by TransAmerican Energy Corporation, a
Delaware corporation, of its repurchase rights under that certain Repurchase
Rights Agreement dated as of the date of initial issuance of securities
hereunder (the "REPURCHASE RIGHTS AGREEMENT"). "PERSON" means any corporation,
individual, joint stock company, joint venture, partnership, unincorporated
association, governmental regulatory entity, country, state, or political
subdivision thereof, trust, municipality or other entity.
Such conversion shall be effective immediately upon notice of
such conversion by the Corporation to the stockholders and, from and after the
time of such notice, each certificate representing shares of Class E Junior
Preferred Stock shall be deemed to represent shares of non-voting (or, with the
approval of the Board of Directors, voting) Common Stock and the holder of any
such certificates representing shares of Class E Junior Preferred Stock shall be
entitled to have the Corporation exchange such certificate for a certificate
representing such Common Stock of the Corporation.
(B) Right of Conversion. Subject to and upon compliance with
the provisions of this Section 6(B), each share of Class E Junior Preferred
Stock shall, at the option of the holder of record thereof, be convertible at
any time, into one fully paid and non-assessable, non-voting share of Common
Stock (calculated as to each conversion to the nearest 1/100th of a share).
In order to exercise the conversion privilege, the holder of
one or more shares of Class E Junior Preferred Stock to be converted shall
surrender such shares at the principal executive office of the Corporation (or
at any other office or agency that is to be maintained for such purpose of which
the Corporation gives notice to such holders) accompanied by the funds, if any,
required below and shall give written notice of conversion in the form provided
on such shares of Class E Junior Preferred Stock (or such other notice as is
acceptable to the Corporation) to the Corporation at such office or agency that
the holder specifies in said notice. Such notice shall also state the name or
names, together with the address or addresses, in which the certificate or
certificates shall be issued for shares of non-voting Common Stock which shall
be issuable in such conversion. Each share of Class E Junior Preferred Stock
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the name in which such share is registered, be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder of record or his duly authorized attorney and an
amount sufficient to pay any transfer or similar tax. As promptly as practicable
after the surrender of such shares of Class E Junior Preferred Stock and the
receipt of such notice, instruments of transfer and funds, if any, as aforesaid,
the Corporation shall issue and deliver at such office or agency to such holder,
or on such holder's written order, a certificate or certificates for the number
of full shares of non-voting Common Stock issuable upon the conversion of such
share of Class E Junior Preferred Stock in accordance with the provisions of
this Section 6(B).
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<PAGE> 4
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such shares of
Class E Junior Preferred Stock shall have been surrendered and such notice (and
any applicable instruments of transfer and any required taxes) received by the
Corporation as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of non-voting Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares represented thereby at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such person or persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open.
The Corporation covenants that it will at all times take
action to reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of non-voting Common Stock or
its issued shares of non-voting Common Stock held in its treasury, or both, for
the purpose of effecting conversions of shares of Class E Junior Preferred
Stock, the full number of shares of non-voting Common Stock deliverable upon the
conversion of all outstanding shares of Class E Junior Preferred Stock not
theretofore converted and on or before (and as a condition of) taking any action
that would result in an increase in the number of shares of non-voting Common
Stock deliverable upon conversion above the number thereof previously reserved
and available therefor, the Corporation shall take all such action so required.
The Corporation covenants that all shares of non-voting Common Stock which may
be delivered upon conversions of shares of Class E Junior Preferred Stock will
upon delivery be duly and validly issued and fully paid and non-assessable, free
of all liens and charges and not subject to any preemptive rights.
SECTION 7. REACQUIRED SHARES. Any shares of Class E Junior
Preferred Stock redeemed, purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Amended and Restated Certificate of
Incorporation or in any other certificate of designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
SECTION 8. OTHER RIGHTS AND PREFERENCES. Except as otherwise
specifically set forth herein, all share of Class E Junior Preferred Stock and
Common Stock shall have the same rights, preferences and privileges.
4
<PAGE> 5
SECTION 9. TRANSFER RESTRICTIONS. Holders of the Class E
Junior Preferred Stock shall not be permitted to transfer any shares of Class E
Junior Preferred Stock by sale, assignment, gift or other disposition
("TRANSFER") at any time if such transfer would require registration under the
Securities Act. In addition, no holder may Transfer shares of Class E Junior
Preferred Stock in violation of the Stockholders Agreement or of the Repurchase
Rights Agreement.
SECTION 10. SEVERABILITY OF PROVISIONS. Whenever possible,
each provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
5
<PAGE> 6
IN WITNESS WHEREOF, TCR Holding Corporation has caused this
Certificate of Designations of Class E Junior Preferred Stock to be duly
executed by its ____________, this ___th day of December, 1998.
TCR Holding Corporation
-------------------------------------
6
<PAGE> 1
EXHIBIT 99.7
CERTIFICATE OF DESIGNATIONS
of
6% PARTICIPATING PREFERRED STOCK
of
TRANSCONTINENTAL REFINING CORPORATION
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
------------------------------------
TransContinental Refining Corporation, a corporation organized
and existing under the laws of the State of Delaware (hereinafter called the
"COMPANY"), hereby certifies that the following resolution was adopted at a
meeting of the board of directors of the Company (the "BOARD OF DIRECTORS")
pursuant to Section 151(g) of the Delaware General Corporation Law on December
___, 1998:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the Company, the Board of Directors
hereby creates a series of Preferred Stock, par value $0.01 per share (the "6%
PARTICIPATING PREFERRED STOCK"), of the Company and hereby states the
designation and number of shares, and fixes the relative rights, preferences,
and limitations thereof as follows:
6% Participating Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of this series
shall be designated as "6% Participating Preferred Stock" (the "6% PARTICIPATING
PREFERRED STOCK") and the number of shares constituting the 6% Participating
Preferred Stock shall be six million (6,000,000). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of 6% Participating Preferred
Stock to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities issued
by the Company convertible into 6% Participating Preferred Stock.
SECTION 2. Definitions. For all purposes of this Certificate
of Designations, the following terms shall have the indicated meanings:
"AFFILIATE" means (i) any Person (other than Jefferies &
Company, Inc., Trust Company of the West or their respective affiliates or
transferees to the extent such transferees
<PAGE> 2
would not otherwise be Affiliates) directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
subsidiary of the Company or any officer, director, or employee of the Company
or any subsidiary of the Company or of such Person, (ii) the spouse, any
immediate family member, or any other relative who has the same principal
residence of any Person described in clause (i) above, and any Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with, such spouse, family member, or other relative, and (iii) any trust
in which any Person described in clause (i) or (ii), above, is a fiduciary or
has a beneficial interest. For purposes of this definition the term "control"
means (a) the power to direct the management and policies of a Person, directly
or through one or more intermediaries, whether through the ownership of voting
securities, by contract or otherwise, or (b) the beneficial ownership of 10% or
more of the voting equity of such Person (on a fully diluted basis) or of
warrants or other rights to acquire such equity (whether or not presently
exercisable).
"AFFILIATE TRANSACTION" means, with respect to any Person, any
direct or indirect transaction or series of related transactions with any
Affiliate of such Person (including, without limitation: (i) the sale, lease,
transfer or other disposition of properties, assets or securities to such
Affiliate; (ii) the purchase or lease of any properties, assets, or securities
from such Affiliate; (iii) an investment in such Affiliate; and (iv) any
amendment of any contract or agreement with or for the benefit of an Affiliate).
"ASSET SALE" means any direct or indirect conveyance, sale,
transfer or other disposition, excluding through damage or destruction for which
Insurance Proceeds are paid, or by condemnation, in one or a series of related
transactions, of any of the properties, businesses or assets of the Company or
any of its consolidated subsidiaries other than (a) a disposition of inventory
of the Company or any of its consolidated subsidiaries in the ordinary course of
business or (b) a pledge of the assets of the Company or any of its consolidated
subsidiaries to secure Debt of the Company or such subsidiary.
"CONSOLIDATED EBITDA" of the Company means, for any period,
the following: (a) the Consolidated Net Income of the Company for such period,
plus (b) the sum, without duplication (and only to the extent such amounts are
deducted from net revenues in determining such Consolidated Net Income), of (i)
the provision for income taxes for such period for the Company and its
consolidated subsidiaries, (ii) depreciation, depletion and amortization of the
Company and its consolidated subsidiaries for such period and (iii) Consolidated
Fixed Charges of the Company for such period, determined, in each case, on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGES" of the Company for any period
means (without duplication), the sum of (i) Consolidated Interest Expense of the
Company for such period, (ii) dividend requirements of the Company and its
consolidated subsidiaries (whether in cash or otherwise), with respect to
Preferred Stock paid, accrued or scheduled to be paid or accrued during such
period, in each case to the extent attributable to such period and excluding
items eliminated in consolidation and (iii) fees paid, accrued or scheduled to
be paid or accrued during such period by the Company and its subsidiaries in
respect of performance bonds or other guarantees of payment. For purposes of
clause (ii) above, dividend requirements shall be increased to an amount
representing the pre-tax earnings that would be required to cover such dividend
requirements; accordingly, the increased amount shall be equal to a fraction,
the
2
<PAGE> 3
numerator of which is such dividend requirements and the denominator of
which is one minus the applicable actual combined Federal, state, local and
foreign income tax rate of the Company and its subsidiaries (expressed as a
decimal), on a consolidated basis, for the fiscal year immediately preceding the
date of the transaction giving rise to the need for calculating Consolidated
Fixed Charges.
"CONSOLIDATED INTEREST EXPENSE" of the Company and its
consolidated subsidiaries means, for any period, the aggregate interest (without
duplication), whether expensed or capitalized, paid, accrued or scheduled to be
paid or accrued during such period in respect of all Debt of the Company and its
consolidated subsidiaries determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED NET INCOME" for any period means the net income
(loss) of the Company and its consolidated subsidiaries for such period,
determined in accordance with GAAP, excluding (without duplication) (i) all
extraordinary, unusual and nonrecurring gains and (ii) the net income, if
positive, of any other Person, other than a consolidated subsidiary of the
Company, in which the Company or any of its consolidated subsidiaries has an
interest, except to the extent of the amount of any dividends or distributions
actually paid in cash to the Company or a consolidated subsidiary of the Company
during such period, but not in excess of the Company's pro rata share of such
other Person's aggregate net income earned during such period or earned during
the immediately preceding period and not distributed during such period.
"CONVERSION ADJUSTED PARTICIPATION PERCENTAGE" means, (A)
prior to any conversion pursuant to Section 9, 0.06 and (B) at and after the
time of any conversion pursuant to Section 9 and until the next such conversion,
the difference between (1) the lesser of 0.06 and the previously existing
Conversion Adjusted Participation Percentage and (2) the previously existing
Conversion Adjusted Participation Percentage multiplied by the quotient of (x)
the number of shares of 6% Participating Preferred Stock converted pursuant to
Section 9 since the last adjustment to the Conversion Adjusted Participation
Percentage divided by (y) the number of shares of 6% Participating Preferred
Stock outstanding immediately prior to the time of such conversion.
"DEBT" means, with respect to any Person, without duplication
(i) all liabilities, contingent or otherwise, of such Person (a) for borrowed
money (whether or not the recourse of the lender is to the whole of the assets
of such Person or only to a portion thereof), (b) evidenced by bonds, notes,
debentures, or similar instruments or letters of credit, or representing the
deferred and unpaid balance of the purchase price of any property acquired by
such Person or services received by such Person (other than long-term service or
supply contracts which require minimum periodic payments), (c) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks or Swap
Obligations, (d) for the payment of money relating to a lease obligation
required to be capitalized for financial reporting purposes in accordance with
GAAP and (e) the obligation of the lessee under any Sale and Leaseback
Transaction.
"GAAP" means generally accepted accounting principles,
consistently applied.
"INDENTURE" means the Indenture dated as of the Issue Date
governing the Company's $150,000,000 15% Senior Secured Notes due 2003 as it
existed as of the Issue Date regardless of whether the indenture ceases, at any
time, to be in full force and effect for any reason.
3
<PAGE> 4
"INSURANCE PROCEEDS" means the interest in and to all proceeds
(net of costs of collection, including attorney's fees) that now or hereafter
may be paid under any insurance policies now or hereafter obtained by or on
behalf of the Company or its subsidiaries, together with interest payable
thereon and the right to collect and receive the same, including without
limitation, proceeds of casualty insurance, title insurance, business
interruption insurance and any other insurance now or hereafter maintained by
the Company or its subsidiaries.
"INTEREST RATE OR CURRENCY AGREEMENT" means any forward
contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors, collars, puts and
similar agreements) of the Company or any of its subsidiaries relating to, or
the value of which is dependent upon, interest rates or currency exchange rates.
"PERMITTED AFFILIATE TRANSACTIONS" means those transactions
into which the Company would be permitted to enter in accordance with the
provisions of Section 4.10 of the Indenture.
"PERSON" means any corporation, individual, joint stock
company, joint venture, partnership, limited liability company, unincorporated
association, governmental regulatory entity, country, state, or political
subdivision thereof, trust, municipality or other entity.
"PREFERRED STOCK" means any class or classes of the Company's
capital stock (however designated) that is preferred as to the payment of
dividends, or as to the distribution of assets upon a voluntary or involuntary
liquidation or dissolution of the Company over shares of any other capital stock
of the Company.
"PREFERRED STOCK TRIGGER EVENT" shall mean (i) the Company
shall be in default of its obligations hereunder, (ii) TCR Holding Corporation
("TCR Holding") or TARC shall be in breach of its obligations under the
stockholders agreement among TCR Holding, TARC and the holders of capital stock
of TCR Holding dated as of December 15, 1998, (iii) the Company or TCR Holding
shall be in breach of its obligations under the TransContinental Stockholders
Agreement or (iv) either of such agreements shall have terminated for
any reason other than strictly in accordance with its terms.
"SALE AND LEASEBACK TRANSACTIONS" means arrangements relating
to property owned on the Issue Date or thereafter acquired whereby the Company
or a subsidiary of the Company transfers such property to a Person and leases it
back from such Person.
"SWAP OBLIGATION" of any Person means any Interest Rate or
Currency Agreement entered into by the Company or any of its subsidiaries with
one or more financial institutions or one or more futures exchanges in the
ordinary course of business and not for purposes of speculation that is designed
to protect such Person against fluctuations in (x) interest rates with respect
to Debt incurred, or (y) currency exchange rates.
"TARC" means TransAmerican Refining Corporation, a Texas
corporation.
"TRANSCONTINENTAL STOCKHOLDERS AGREEMENT" means the
stockholders agreement among the Company, TCR Holding and certain other holders
dated as of December 15, 1998.
SECTION 3. DIVIDENDS AND DISTRIBUTIONS.
(A) EBITDA Dividends. Not later than the first day of May and
the fifteenth day of June, September and December of each year commencing 1999,
each holder of shares of 6% Participating Preferred Stock, in preference to the
holders of any other shares of capital stock of the Company, shall be entitled
to receive such holder's pro rata portion (rounded to the nearest cent) of a
cash dividend (an "EBITDA DIVIDEND") in an aggregate amount equal to (i) the
Conversion Adjusted Participation Percentage as of the record date for such
EBITDA Dividend multiplied by (ii) the Consolidated EBITDA of the Company for
the fiscal quarter (or partial fiscal quarter) immediately preceding payment of
such EBITDA Dividend (or the last fiscal quarter of the prior year in the case
of payments made on May 1); provided that the EBITDA Dividend to be paid on the
first day of May 1999 shall be calculated based on the Consolidated EBITDA from
the Issue Date.
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(B) Asset Sale Distributions. Upon payment by the Company of
any dividend or other distribution on any shares of its capital stock within 60
days after the consummation of an Asset Sale (an "ASSET SALE DISTRIBUTION"),
each holder of shares of 6% Participating Preferred Stock shall be entitled to
receive on the date of payment of such Asset Sale Distribution such holder's pro
rata portion (rounded to the nearest cent) of a cash distribution in an
aggregate amount equal to (i) the Conversion Adjusted Participation Percentage
as of the record date for such Asset Sale Distribution multiplied by (ii) the
aggregate amount of such Asset Sale Distribution; provided that such dividend or
other distribution shall be deemed to be an Asset Sale Distribution only to the
extent it does not exceed the aggregate amount of proceeds received by the
Company from the related Asset Sale (and any excess amount shall be treated as
an Other Distribution hereunder).
(C) Other Distributions. Upon payment by the Company of any
dividend or other distribution (other than an EBITDA Dividend or an Asset Sale
Distribution) on any shares of its capital stock (other than capital stock of
the Company that ranks on a parity with respect to dividends or other
distributions with the 6% Participating Preferred Stock) (an "OTHER
DISTRIBUTION"), each holder of shares of 6% Participating Preferred Stock shall
be entitled to receive on the date of payment of such Other Distribution such
holder's pro rata portion (rounded to the nearest cent) of a cash distribution
in an aggregate amount equal to (1) the product of (i) the Conversion Adjusted
Participation Percentage as of the record date for such Other Distribution
multiplied by (ii) the difference of (x) the aggregate amount of all dividends
and other distributions paid by the Company on its capital stock (including such
Other Distribution, prior Other Distributions and EBITDA Dividends, but
excluding Asset Sale Distributions) minus (y) the aggregate Consolidated EBITDA
of the Company, in each case for the period from the Issue Date, through the end
of the fiscal quarter immediately preceding the payment of such Other
Distribution minus (2) the aggregate amount of all Other Distributions
previously paid with respect to the shares of 6% Participating Preferred Stock
outstanding on the date of the Other Distribution which causes payment of the
dividend then being calculated under this clause (C).
(D) Calculations of Value. All calculations of the amount of
dividends or distributions paid to holders of capital stock of the Company shall
be made without regard to whether such dividends or other distributions consist
of cash dividends or distributions or non-cash dividends or distributions
(except that dividends payable in shares of Common Stock, par value $0.01 per
share (the "COMMON STOCK"), of the Company, or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise) shall not be
considered for purposes hereof). Any non-cash dividends or other distributions
shall be valued by the Board of Directors in good faith and if the valuation so
determined is objected to in writing by holders of not less than a majority of
the 6% Participating Preferred Stock within 30 days notice of such valuation, by
a nationally recognized investment banking or valuation firm (an "APPRAISER")
selected by holders of record of a majority of the 6% Participating Preferred
Stock and the Company. If the Company and the holders cannot, in good faith,
agree upon an Appraiser, then the Company, on the one hand, and a majority of
the holders, on the other hand, each shall select an Appraiser, and the two
selected Appraisers shall select a third Appraiser who shall make the required
valuation. Such subsequent valuation shall be binding on the Company. No
dividend that is not cash shall be paid within such 30 day period or during such
subsequent valuation. Except as otherwise permitted by a vote of holders of the
6% Participating Preferred Stock pursuant to Section 4(C), the Company shall not
pay any dividend or distribution declared on any capital stock of the Company
prior to payment of the dividends or distributions due and payable on the 6%
Participating Preferred Stock.
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(E) Record Date, Etc. Dividends shall accrue on outstanding
shares of 6% Participating Preferred Stock from the Issue Date. The Board of
Directors may fix a record date for the determination of holders of shares of 6%
Participating Preferred Stock entitled to receive payment of a dividend or other
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof. If no record date is so fixed,
the holders of record of shares of 6% Participating Preferred Stock on the date
such dividend or distribution is declared shall be entitled to receive payment
thereof. The Company shall be the registrar, transfer agent, conversion agent
and dividend disbursing agent for the 6% Participating Preferred Stock and the
transfer agent and registrar for the Common Stock issuable upon conversion of
the 6% Participating Preferred Stock on the books of the Company until such time
as a majority of the holders of record of the 6% Participating Preferred Stock
shall select a new registrar, transfer agent, conversion agent and/or dividend
disbursing agent.
(F) Interpretative Provision. For purposes of this Section 3,
any purchase, redemption or other acquisition by the Company or any of its
subsidiaries of any shares of the Company's capital stock (other than a
conversion or redemption of shares of 6% Participating Preferred Stock), shall
be deemed to be a dividend or other distribution on such capital stock in an
amount equal to the aggregate amount paid to effect such purchase, redemption or
other acquisition whether in cash or otherwise except to the extent such
purchase, redemption or other acquisition shall be made by the Company for
consideration consisting of capital stock that is junior to the 6% Participating
Preferred Stock with respect to dividends and upon liquidation or winding up.
Dividends shall not include payments made under the Amended and Restated
Services Agreement dated as of June 13, 1997, as amended as of the Issue Date,
the Services Agreement dated as of the Issue Date, the Expense Reimbursement
Agreement dated as of the Issue Date or the Tax Allocation Agreement dated as of
the Issue Date, each of which was executed by the Company, as each such
agreement existed on the Issue Date or such later date as any of them was
amended (with respect to that agreement only) with the approval of the Board of
Directors; provided that any such amendment is not adverse to the holders of the
6% Participating Preferred Stock.
Any reference to "distribution" contained in this Section 3
shall not be deemed to include any distribution made in connection with any
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary.
(G) Increased Dividends. If the Company fails to pay any
dividend or other distribution in full when due to the holders of the 6%
Participating Preferred Stock under this Section 3 ("UNPAID DISTRIBUTION"),
dividends shall accrue on the amount of such Unpaid Distribution at a rate of
$15.00 per annum per $100 of Unpaid Distribution amount ("DEFAULT DIVIDENDS")
for the period from and including the due date of any such Unpaid Distribution
to and including the date the Unpaid Distribution is paid in full. Any
incremental Unpaid Distribution amount in excess of an even $100 shall accrue
Default Dividends at the same rate as any other Unpaid Distribution amount.
Accrued Default Dividends shall be due and payable until paid.
(H) Cumulative Dividends. If dividends are not paid in full,
or declared in full and sums set apart for the payment thereof, upon the 6%
Participating Preferred Stock and any other preferred stock ranking on a parity
as to dividends with the 6% Participating Preferred Stock when due hereunder,
all dividends declared upon shares of 6% Participating Preferred Stock and such
other parity preferred stock will when, as and if declared, be declared pro-rata
so that in all cases the amount of dividends declared and paid per share on the
6% Participating Preferred Stock and such other parity preferred stock will bear
to each other
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the same ratio that accumulated dividends per share on the shares of 6%
Participating Preferred Stock and such other preferred stock bear to each other.
Except as set forth above, unless full cumulative dividends on the 6%
Participating Preferred Stock have been paid, or declared and sums set aside for
the payment thereof, dividends may not be paid, or declared and set aside for
payment, and other distributions may not be made upon the common stock or on any
other stock of TCR Holding ranking junior to the 6% Participating Preferred
Stock as to dividends; and neither common stock nor any other stock of the
Company ranking junior to the 6% Participating Preferred Stock as to dividends
may be redeemed purchased or otherwise acquired for any consideration by the
Company.
SECTION 4. VOTING RIGHTS. The holders of shares of 6%
Participating Preferred Stock shall not have voting rights except as set forth
herein or required by law:
(A) So long as a Preferred Stock Trigger Event has occurred
and is continuing, the holders of the 6% Participating Preferred Stock shall be
entitled, exclusively and in their sole discretion, to elect, voting separately
as a class in person or by proxy three (3) of the five (5) members of the Board
of Directors in accordance with the provisions of the TransContinental
Stockholders Agreement. At any time that the holders of 6% Participating
Preferred Stock are entitled to appoint a majority of the members of the Board
of Directors, two directors shall be deemed to have resigned in accordance with
the TransContinental Stockholders Agreement, and, unless persons holding all the
directorships entitled to be filled by the holders of the 6% Participating
Preferred Stock have been elected and are in office, and in addition to any
other vote required herein or by law, no action authorized by the Board of
Directors shall be taken by the Company without the affirmative vote or consent
of the holders of at least a majority of all outstanding shares of 6%
Participating Preferred Stock, voting separately as a class in person or by
proxy.
(B) The holders of shares of 6% Participating Preferred Stock
shall vote separately as a class, in person or by proxy, on all matters required
by law to be submitted to a vote by such class of stockholders of the Company.
(C) So long as any of the 6% Participating Preferred Stock is
outstanding, the Company shall not, without the affirmative vote or consent of
the holders of at least a majority of all outstanding 6% Participating Preferred
Stock (unless the vote or consent of a greater percentage is required by
applicable law or the Amended and Restated Certificate of Incorporation of the
Company), voting separately as a class in person or by proxy (i) amend, alter or
repeal (by merger, consolidation or otherwise) any provision of the Amended and
Restated Certificate of Incorporation or the Bylaws of the Company, as amended,
so as to affect adversely the relative rights, preferences, qualifications,
limitations or restrictions of the 6% Participating Preferred Stock or to change
the number of directors of the Company, (ii) authorize or issue, or increase the
authorized amount of, the 6% Participating Preferred Stock, any
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additional class or series of stock, or any security convertible into stock of
such class or series, ranking prior to or on a parity with the 6% Participating
Preferred Stock in respect of the payment of dividends or upon liquidation,
dissolution or winding up of the Company (other than a series of stock ranking
on a parity with the 6% Participating Preferred Stock issued to purchasers of
senior secured debt of the Company ranking pari passu with the Company's 15%
Senior Secured Notes due 2003), (iii) effect any reclassification of the 6%
Participating Preferred Stock, (iv) enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for, or changed into stock or other securities, cash and/or any other
property (other than a sale of the Common Stock pursuant to that certain Pledge
and Security Agreement dated as of the Issue Date granted by TCR Holding in
favor of Firstar Bank of Minnesota, N.A., as trustee), (v) assume or otherwise
become obligated with respect to the Debt of any Affiliate or (vi) enter into
any Affiliate Transaction other than a Permitted Affiliate Transaction.
(D) Whenever the Company shall be in default of its
obligations hereunder (including, without limitation, failure to pay dividends),
two directors shall be deemed to have resigned in accordance with the
TransContinental Stockholders Agreement, the holders of the 6% Participating
Preferred Stock shall have the exclusive right to elect, voting separately as a
class in person or by proxy, three of the five directors of the Company and, in
addition to any other vote required herein or by law, unless persons holding
all the directorships entitled to be filled by the holders of the 6%
Participating Preferred Stock have been elected as provided in this Section
4(D) and are in office, no action authorized by the Board of Directors shall be
taken by the Company without the affirmative vote or consent of the holders of
at least a majority of all outstanding shares of 6% Participating Preferred
Stock, voting separately as a class in person or by proxy.
(E) In the case of any vacancy in the office of a director
occurring among the directors elected by the holders of record of the 6%
Participating Preferred Stock, a successor director shall be elected by a
majority of the holders of record of the 6% Participating Preferred Stock,
voting separately as a class in person or by proxy, to hold the office so
vacated for the unexpired term of the director or directors whose place or
places shall be vacant. Any director who shall have been elected by the holders
of the 6% Participating Preferred Stock, including any successor director
elected pursuant to the immediately preceding sentence, may be removed only by
holders of record of a majority of the 6% Participating Preferred Stock during
the term of office of such director and may be removed by such holders with or
without cause. A meeting for the purpose of electing a director to fill a
vacancy shall be called; provided that, in addition to any other vote required
herein or by law, unless such vacancies have been filled as provided in this
Section 4(E), no action authorized by the Board of Directors shall be taken by
the Company without the affirmative vote or consent of holders of at least a
majority of all outstanding 6% Participating Preferred Stock voting separately
as a class in person or by proxy.
(F) Whenever under the provisions hereof the right shall have
accrued to the holders of the 6% Participating Preferred Stock to vote as a
single class to elect a majority of the
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Company's directors or to fill any vacancy in the office of director, the Board
of Directors shall, within ten days after delivery to the Company at its
principal office of a request to such effect by the holders of record of a
majority of the then outstanding shares of 6% Participating Preferred Stock,
call a special meeting for the election of such directors, to be held upon not
less than ten nor more than twenty days' notice to such holders. If such notice
of meeting is not given within the ten days required above, the holders of the
6% Participating Preferred Stock requesting such meeting may also call such
meeting and for such purposes shall have access to the stock books and records
of the Company. At any meeting so called or at any other meeting held while the
holders of shares of 6% Participating Preferred Stock shall have the voting
right noted above, the holders of record of a majority of the shares of 6%
Participating Preferred Stock present in person or by proxy or voting by written
consent, shall be sufficient to constitute a quorum for the election of
directors as provided herein. Notwithstanding the foregoing provisions, the
holders of a majority of the 6% Participating Preferred Stock may elect such
directors by written consent of such holders.
SECTION 5. CERTAIN RESTRICTIONS.
(A) Whenever dividends or distributions are payable on the 6%
Participating Preferred Stock as provided in Section 3, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on
shares of 6% Participating Preferred Stock outstanding shall have been paid in
full, the Company shall not (except as otherwise permitted by a vote of holders
of the 6% Participating Preferred Stock pursuant to Section 4(C)):
(i) pay dividends, or make any other distributions,
on any other shares of capital stock of the
Company; or
(ii) redeem or purchase or otherwise acquire for
consideration, any shares of capital stock of
the Company (other than shares of 6%
Participating Preferred Stock).
(B) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under Section 5(A), purchase or
otherwise acquire such shares at such time and in such manner.
SECTION 6. STATUS OF REACQUIRED OR SURRENDERED SHARES. Any
shares of 6% Participating Preferred Stock purchased or otherwise acquired by
the Company in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Amended and Restated
Certificate of Incorporation, or in any other certificate of designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
SECTION 7. LIQUIDATION, DISSOLUTION OR WINDING UP. In the
event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the holders of 6% Participating Preferred Stock shall
be entitled to receive out of the assets of the Company, whether such assets are
stated capital or surplus of any nature, an amount equal to the sum of (a) the
dividends accrued and unpaid thereon to the date of final distribution to such
holders, whether or not declared, with Default Dividends if any, and (b) $ 0.683
per share, before any payment shall be made or any assets distributed to the
holders of any other
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class or series of the Company's capital stock. If there is any dividend paid or
distribution made to holders of any other class or series of the Company's
capital stock in connection with a liquidation, dissolution or winding up
(whether before or after payment of the liquidation preference of the shares of
6% Participating Preferred Stock), such dividend or distribution shall be deemed
an Asset Distribution. Neither a merger, consolidation or other business
combination of the Company with or into another corporation or other entity nor
a sale or transfer of all or part of the Company's assets for cash, securities
or other property shall be considered a liquidation, dissolution or winding up
of the Company for purposes of this Section 7 (unless such action is
specifically approved by holders of a majority of the 6% Participating Preferred
Stock).
The holder of any shares of 6% Participating Preferred Stock
shall not be entitled to receive any payment owed for such shares under this
Section 7 until such holder shall cause to be delivered to the Company (i) the
certificate(s) representing such shares of 6% Participating Preferred Stock and
(ii) transfer instrument(s) satisfactory to the Company and sufficient to
transfer such shares of 6% Participating Preferred Stock to the Company free of
any adverse interest. No interest shall accrue on any payment after the
liquidation date.
SECTION 8. CONSOLIDATION, MERGER, ETC. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or converted or changed into
other stock or securities, cash and/or any other property in accordance with
Section 4(C), then in any such case each share of 6% Participating Preferred
Stock shall at the same time be similarly exchanged or changed into an amount
(in cash or securities) per share equal to the quotient of:
(1) the Conversion Adjusted Participation Percentage
multiplied by the value of all stock, securities,
cash and/or any other property (payable in kind), as
the case may be, into which or for which all shares
of Common Stock (on a fully diluted basis) are
converted, changed or exchanged (with the value of
all property other than cash and securities traded on
the New York Stock Exchange, The Nasdaq Stock Market
or another national securities exchange set by
resolution of the Board of Directors in good faith);
divided by
(2) the total number of shares of 6% Participating
Preferred Stock outstanding at the time of
calculation;
(3) plus the right to receive the amount set forth in the
following sentence. At the first payment date with
respect to EBITDA Dividends which would have occurred
after conversion, change or exchange of any shares of
6% Participating Preferred Stock pursuant to
consolidation, merger, combination or other
transaction, the Company shall pay pro rata to the
holder of record of the shares so converted, changed
or exchanged, an amount (in addition to other accrued
and unpaid amounts due (whether or not declared) with
respect to such shares) equal to the EBITDA Dividends
that otherwise would have been paid to such holder on
such shares multiplied by a fraction the numerator of
which is the number of days in the fiscal quarter in
which such conversion, change or exchange occurred
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prior to and including the date of conversion, change
or exchange and the denominator of which is the total
number of days in such fiscal quarter.
SECTION 9. CONVERSION RIGHT.
(A) Right of Conversion. Subject to and upon compliance with
the provisions of this Section 9, each share of 6% Participating Preferred Stock
shall, at the option of the holder of record thereof, be convertible at any
time, into that number of fully paid and non-assessable shares of Common Stock
(calculated as to each conversion to the nearest 1/100th of a share) equal to
the quotient of:
(i) the product of:
(a) the Conversion Adjusted
Participation Percentage; multiplied
by
(b) the aggregate number of shares of
Common Stock outstanding or which
may be issued upon exercise or
exchange of all outstanding
warrants, options or rights to
subscribe for or purchase shares of
Common Stock or securities
convertible into or exchangeable for
Common Stock (including, without
limitation, the outstanding shares
of 6% Participating Preferred
Stock); divided by
(ii) the total number of shares of 6%
Participating Preferred Stock outstanding at
the time of calculation;
plus the right to receive an amount equal to EBITDA Dividends pursuant to the
final paragraph of Section 9(B).
(B) Manner of Exercise of Conversion Privilege. In order to
exercise the conversion privilege, the holder of one or more shares of 6%
Participating Preferred Stock to be converted shall surrender such shares at any
of the offices or agencies to be maintained for such purpose by the Company
accompanied by the funds, if any, required by the last paragraph of this Section
9(B) and shall give written notice of conversion in the form provided on such
shares of 6% Participating Preferred Stock (or such other notice as is
acceptable to the Company) to the Company at such office or agency that the
holder elects to convert the shares of 6% Participating Preferred Stock
specified in said notice. Such notice shall also state the name or names,
together with the address or addresses, in which the certificate or certificates
shall be issued for shares of Common Stock issuable in such conversion. Each
share of 6% Participating Preferred Stock surrendered for conversion shall,
unless the shares issuable on conversion are to be issued in the same name as
the name in which such share is registered, be accompanied by instruments of
transfer, in form satisfactory to the Company, duly executed by the holder of
record or his duly authorized attorney and an amount sufficient to pay any
transfer or similar tax. As promptly as practicable after the surrender of such
shares of 6% Participating Preferred Stock and the receipt of such notice,
instruments of transfer and funds, if any, as aforesaid, the Company shall issue
and deliver at such office or agency to such holder, or on such holder's written
order,
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a certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such share of 6% Participating Preferred Stock
in accordance with the provisions of this Section 9 and a check or cash in
respect of any fractional interest in a share of Common Stock arising upon such
conversion, as provided in Section 9(C).
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such shares of
6% Participating Preferred Stock shall have been surrendered and such notice
(and any applicable instruments of transfer and any required taxes) received by
the Company as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby at such time on such date, unless the stock
transfer books of the Company shall be closed on that date, in which event such
person or persons shall be deemed to have become such holder or holders of
record at the close of business on the next succeeding day on which such stock
transfer books are open.
At the first payment date with respect to EBITDA Dividends to
occur (or, if all such shares are converted, which would have occurred) after
each conversion of any shares of 6% Participating Preferred Stock, the Company
shall pay pro rata to the holder of record of the shares so converted an amount
(in addition to other accrued and unpaid amounts due (whether or not declared)
with respect to such shares) equal to the EBITDA Dividends that otherwise would
have been paid to such holder had such holder not so converted such shares
multiplied by a fraction the numerator of which is the number of days in the
fiscal quarter in which such conversion occurred prior to and including the date
of conversion and the denominator of which is the total number of days in such
fiscal quarter.
(C) Cash Payments in Lieu of Fractional Shares. No fractional
shares or scrip representing fractions of shares of Common Stock shall be issued
upon conversion of 6% Participating Preferred Stock. In lieu of any fractional
interest in a share of Common Stock that would otherwise be deliverable upon the
conversion of any share of 6% Participating Preferred Stock, the Company shall
pay to the holder of such shares an amount in cash (computed to the nearest
cent) equal to the value of a share of Common Stock (as determined by the Board
of Directors in good faith) on the business day next preceding the day of
conversion multiplied by the fractional interest that otherwise would have been
deliverable upon conversion of such share.
(D) Notice to Holders Prior to Certain Corporate Actions. In
case:
(i) there shall be any merger or consolidation
to which the Company is a party, or any sale
or transfer of all or substantially all of
the assets of the Company; or
(ii) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of
the Company;
then in each such case the Company shall cause to be given to the holders of
record of shares of 6% Participating Preferred Stock and the stock transfer or
conversion agent, as appropriate, as promptly as possible, but in any event at
least 20 days prior to the applicable date hereinafter
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specified, a notice stating the date on which such merger, consolidation, sale,
transfer, dissolution, liquidation or winding up is expected to become effective
or occur, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such merger, consolidation,
sale, transfer, statutory exchange, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the legality
or validity of the proceedings described in this Section 9(D).
(E) Reservation of Shares of Common Stock. The Company
covenants that it will at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued shares of
Common Stock or its issued shares of Common Stock held in its treasury, or both,
for the purpose of effecting conversions of shares of 6% Participating Preferred
Stock, the full number of shares of Common Stock deliverable upon the conversion
of all outstanding shares of 6% Participating Preferred Stock not theretofore
converted and on or before (and as a condition of) taking any action that would
result in an increase in the number of shares of Common Stock deliverable upon
conversion above the number thereof previously reserved and available therefor,
the Company shall take all such action so required. For purposes of this Section
9(E), the number of shares of Common Stock deliverable upon the conversion of
all outstanding shares of 6% Participating Preferred Stock shall be computed as
if at the time of computation all outstanding shares of 6% Participating
Preferred Stock were held by a single holder.
Before taking any action that would reduce the imputed
conversion price for the 6% Participating Preferred Stock below the par value
(if any) of the shares of Common Stock deliverable upon conversion of the shares
of 6% Participating Preferred Stock, the Company shall take all corporate action
that is, in the opinion of its counsel, necessary in order that the Company may
validly and legally issue fully paid and non-assessable shares of Common Stock
at such imputed conversion price.
(F) Transfer Taxes, Etc. The Company shall pay any and all
documentary stamp, issue or transfer taxes, and any other similar taxes payable
in respect of the issue or delivery of shares of Common Stock upon conversions
of shares of 6% Participating Preferred Stock pursuant hereto; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Common Stock in a name other than that of the holder of the shares of 6%
Participating Preferred Stock to be converted and no such issue or delivery
shall be made unless and until the person requesting such issue or delivery has
paid to the Company the amount of any such tax or has established, to the
satisfaction of the Company, that such tax has been paid.
(G) Automatic Conversion. Each share of 6% Participating
Preferred Stock shall automatically be converted into that number of fully paid
and non-assessable shares of Common Stock (calculated as to each conversion to
the nearest 1/100th of a share) equal to the quotient of:
(i) the product of:
(a) the Conversion Adjusted
Participation Percentage; multiplied
by:
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<PAGE> 14
(b) the aggregate number of shares of
Common Stock outstanding or which
may be issued upon exercise or
exchange of all outstanding
warrants, options or rights to
subscribe for or purchase shares of
Common Stock or securities
convertible into or exchangeable for
Common Stock (including, without
limitation, the outstanding shares
of 6% Participating Preferred
Stock); divided by
(ii) the total number of shares of 6%
Participating Preferred Stock outstanding at
the time of calculation,
effective contemporaneously with the a firm commitment, underwritten public
offering Common Stock registered under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), other than a registration relating solely to a
transaction under Rule 145 promulgated under the Securities Act or to an
employee benefit plan of the Company, that results in (i) proceeds to the
Company and/or any selling stockholders of not less than $100 million, (ii)
total market capitalization of outstanding equity shares of Common Stock (on a
fully diluted basis) of $500 million and (iii) such Common Stock being listed on
the American Stock Exchange or the New York Stock Exchange or quoted for trading
on the Nasdaq National Market Tier of The Nasdaq Stock Market; provided that all
accrued and unpaid amounts (whether or not declared) the full amount of the
liquidation preference on the 6% Participating Preferred Stock and Default
Dividends shall have been paid in full in cash.
At the first payment date with respect to EBITDA Dividends to
occur (or, if all such shares are converted, which would have occurred) after
each conversion of any shares of 6% Participating Preferred Stock, the Company
shall pay pro rata to the holder of record of the shares so converted an amount
(in addition to other accrued and unpaid amounts due (whether or not declared)
with respect to such shares) equal to the EBITDA Dividends that otherwise would
have been paid to such holder had such holder not so converted such shares
multiplied by a fraction the numerator of which is the number of days in the
fiscal quarter in which such conversion occurred prior to and including the
date of conversion and the denominator of which is the total number of days in
such fiscal quarter.
(H) Covenant as to Common Stock. The Company covenants that
all shares of Common Stock delivered upon conversions of shares of 6%
Participating Preferred Stock will upon delivery be duly and validly issued and
fully paid and non-assessable, free of all liens and charges and not subject to
any preemptive rights.
The Company further covenants that if at any time the Common
Stock shall be listed on the New York Stock Exchange, The Nasdaq Stock Market or
any other national securities exchange the Company will, if permitted by the
rules of such exchange or market, list and keep listed so long as the Common
Stock shall be so listed on such exchange or market, all Common Stock issuable
upon conversion of the shares of 6% Participating Preferred Stock.
SECTION 10. OPTIONAL REDEMPTION. At any time after the sale by
the Company of all or substantially all of its assets in accordance with Section
4(C), the Company, at its option, may redeem shares of 6% Participating
Preferred Stock, in whole but not in part, on any date set by the Board of
Directors, by payment to each holder of shares of 6% Participating Preferred
Stock of an amount per share in cash equal to the quotient of:
(i) the Conversion Adjusted Participation Percentage
multiplied by the value of all stock, securities,
cash and/or any other property (payable in kind), as
the case may be, distributed or otherwise made
available to holders of Common Stock (with the value
of all property other than cash and securities traded
on the New York Stock Exchange, The Nasdaq Stock
Market or other national securities
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<PAGE> 15
exchange set by resolution of the Board of Directors
in good faith); divided by
(ii) the total number of shares of 6% Participating
Preferred Stock outstanding at the time of
calculation;
plus the right to receive the amount set forth in the immediately succeeding
paragraph; provided that the Company has redeemed or otherwise retired in full
all of its obligations on its 15% Senior Secured Notes due 2003 and paid all
accrued and unpaid amounts due with respect to such shares of 6% Participating
Preferred Stock. Any such payment shall be hereinafter referred to as the
"REDEMPTION PRICE".
At the first payment date with respect to EBITDA Dividends to
occur (or, if all such shares are redeemed, which would have occurred) after
each redemption of shares of 6% Participating Preferred Stock, the Company shall
pay pro rata to the holder of record of the shares so redeemed an amount (in
addition to other accrued and unpaid amounts due (whether or not declared) with
respect to such shares) equal to the EBITDA Dividends that otherwise would have
been paid to such holder had the Company not so redeemed such shares, multiplied
by a fraction the numerator of which is the number of days in the fiscal quarter
in which such conversion occurred prior to and including the date of redemption
and the denominator of which is the total number of days in such fiscal quarter.
Not more than 60 nor less than 20 days prior to the redemption
date, notice by first class mail, postage prepaid, shall be given to the holders
of record of shares of 6% Participating Preferred Stock to be redeemed, at each
holder's address as it shall appear upon the stock transfer books of the
Company. Each such notice of redemption shall specify the date fixed for
redemption, the Redemption Price, the place or places of payment, that payment
will be made upon presentation and surrender of the certificate(s) evidencing
the shares of 6% Participating Preferred Stock to be redeemed and that on and
after the redemption date, dividends will cease to accrue on such shares.
Any notice that is mailed as herein provided shall be
conclusively presumed to have been duly given, whether or not the holder of
shares of 6% Participating Preferred Stock receives such notice; and failure to
give such notice by mail, or any defect in such notice, to a holder shall not
affect the validity of the proceedings for the redemption as stated in such
notice of the shares of 6% Participating Preferred Stock. On and after the date
fixed for redemption, the holders of shares of 6% Participating Preferred Stock
shall surrender the certificates evidencing such shares to the Company at the
place designated in such notice and shall thereupon be entitled to receive
payment of the Redemption Price as herein provided. If, on the date fixed for
redemption, the Redemption Price shall be available therefor and shall have been
irrecoverably deposited or set aside, then, notwithstanding that the
certificates evidencing any shares so called for redemption shall not have been
surrendered, the dividends with respect to the shares so called shall cease to
accrue after the date fixed for redemption, the shares shall no longer be deemed
outstanding, the holders thereof shall cease to hold such shares of 6%
Participating Preferred Stock, and all rights whatsoever with respect to the
shares so called for redemption (except the right of a holder thereof to receive
payment of the Redemption Price as herein provided without interest upon
surrender of its certificates therefor) shall terminate. At the close of
business on the redemption date, the holders of 6% Participating Preferred Stock
(unless the Company
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<PAGE> 16
defaults on its obligations to deliver the Redemption Price) shall be, without
any further action, deemed a holder of the Redemption Price.
Except as set forth in this Section 9(G), the shares of 6%
Participating Preferred Stock shall not be subject to the operation of any
purchase, retirement, mandatory redemption or sinking fund.
No holder of shares of 6% Participating Preferred Stock shall
be entitled to receive payment of the Redemption Price for such shares until it
shall cause to be delivered to the place specified in the notice given with
respect to such redemption (i) the certificate(s) representing such shares of 6%
Participating Preferred Stock redeemed and (ii) transfer instrument(s)
satisfactory to the Company duly executed by the holder of record and sufficient
to transfer such shares of 6% Participating Preferred Stock to the Company free
of any adverse interest.
SECTION 11. RANK; NO PREEMPTIVE RIGHTS. The 6% Participating
Preferred Stock shall rank, with respect to the payment of dividends and the
distribution of assets, and as to distributions of assets upon liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary,
senior to all series of any other class of Preferred Stock unless otherwise
permitted by the holders of the 6% Participating Preferred Stock in accordance
with Section 4(C)(ii). Except as set forth herein, the 6% Participating
Preferred Stock shall not be entitled to any preemptive or subscription rights
in respect of any securities of the Company.
SECTION 12. FINANCIAL STATEMENTS, ETC. The Company shall
deliver to the holders of record of the 6% Participating Preferred Stock:
(A) as soon as available and in any event within 60 days after
the end of each quarterly fiscal period of each fiscal year of the Company
(other than the fourth fiscal quarter), consolidated and consolidating
statements of income, retained earnings and cash flow of the Company and its
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 the Company 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 the Company, which certificate
shall state that those consolidated financial statements fairly present the
consolidated financial condition and results of operations of the Company and
its consolidated subsidiaries, and those consolidating financial statements
fairly present the respective individual unconsolidated financial condition and
results of operations of the Company and of each of its 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);
(B) as soon as available and in any event within 105 days
after the end of each fiscal year of the Company, consolidated and consolidating
statements of income, retained earnings and cash flow of the Company and its
consolidated subsidiaries for such fiscal year and the related consolidated and
consolidating balance sheets of the Company 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
16
<PAGE> 17
accompanied (i) in the case of those consolidated statements and balance sheet
of the Company, by an opinion of independent certified public accountants of
recognized national standing, which opinion shall state that those consolidated
financial statements fairly present the consolidated financial condition and
results of operations of the Company and its consolidated subsidiaries as at the
end of, and for, such fiscal year in accordance with GAAP and (ii) in the case
of those consolidating statements and balance sheets, by a certificate of a
senior financial officer of the Company, which certificate shall state that
those consolidating financial statements fairly present the respective
unconsolidated financial condition and results of operations of the Company and
of each of its consolidated subsidiaries, in each case in accordance with GAAP
as at the end of, and for, such fiscal year;
(C) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the Company
has filed with the Securities and Exchange Commission or any national securities
exchange (delivery of quarterly reports on Form 10-Q and annual reports on Form
10-K will be deemed to satisfy the requirements of clauses (A) and (B) of this
Section 12, respectively);
(D) promptly upon their being mailed or provided to the
stockholders of the Company generally, copies of all financial statements,
reports and proxy statements so mailed or provided (without duplication of such
statements delivered pursuant to clauses (A) and (B) above);
(E) promptly after the Company knows or has reason to believe
that any default, or an event that with notice or the passage of time or both
will result in a default, has occurred with respect to any indebtedness of the
Company with an aggregate principal amount in excess of $10 million, a notice of
such default or event describing the same in reasonable detail and, together
with such notice or as soon thereafter as possible, a description of the action
that the Company has taken or proposes to take with respect to such default or
event; and
(F) from time to time such other information regarding the
financial condition, operations, business or prospects of the Company or any of
its subsidiaries as holders of record of a majority of the 6% Participating
Preferred Stock may reasonably request.
SECTION 13. SEVERABILITY OF PROVISIONS. Whenever possible,
each provision hereof shall be interpreted in a manner as to be effective and
valid under applicable law, but if any provision hereof is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
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<PAGE> 18
SECTION 14. EXTERNAL DOCUMENTS. Any document referred to
herein will be made available to any holder of 6% Participating Preferred Stock
without charge upon written request to the Company.
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<PAGE> 1
EXHIBIT 99.8
STOCKHOLDERS AGREEMENT (TCR HOLDING)
This STOCKHOLDERS AGREEMENT (this "Agreement") is made and
entered into as of December __, 1998, by and among TCR Holding Corporation, a
Delaware corporation (the "Company"), TransAmerican Refining Corporation, a
Texas corporation ("TARC") and each of the other parties signatories hereto who
hold Securities (as defined below) (such holders, together with TARC, being
referred to herein as the "Initial Holders").
W I T N E S S E T H
WHEREAS, TARC owns all of the issued and outstanding shares of
(i) Class A Voting Preferred Stock, Series A, par value $.01 per share, of the
Company and (ii) Class A Voting Preferred Stock, Series B, par value $.01 per
share, of the Company (collectively, the "Voting Preferred Shares");
WHEREAS, the Direct Purchasers (as defined below) own all of
the issued and outstanding shares of Class A Voting Common Stock, Series A, par
value $.01 per share, of the Company (the "Voting Common Shares");
WHEREAS, (a) the New Lenders (as defined below) and the
Purchasers (as defined below) own all of the issued and outstanding shares of
(i) Class B Junior Non-Voting Participating Preferred Stock, par value $.01 per
share, of the Company, (ii) Class C Junior Non-Voting Participating Preferred
Stock, par value $.01 per share, of the Company and (iii) Class D Junior
Non-Voting Participating Preferred Stock, par value $.01 per share, of the
Company and (b) the New Lenders, the Purchasers and the TARC Warrant Holders (as
defined below) own all of the issued and outstanding shares of Class E Junior
Non-Voting Participating Preferred Stock, par value $.01 per share, of the
Company (collectively, the "Non-Voting Preferred Shares");
WHEREAS, the TCW Funds (as defined below) own all of the
issued and outstanding shares of Class B Non-Voting Common Stock, par value $.01
per share, of the Company (the "Non-Voting Common Shares");
WHEREAS, the Company and each of the Initial Holders deem it
to be in their best interests to provide for continuity in the control and
operation of the Company, for restrictions on the transfer of certain securities
and for various other matters set forth herein.
NOW, THEREFORE, in consideration of the agreements and mutual
covenants set forth herein, the parties agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the
following terms have the following meanings:
"Affiliate" means, with respect to any specified Person, (i)
any subsidiary of such Person, (ii) any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person, (iii) any other Person that owns, directly or indirectly,
10% or more of such specified Person's capital stock, (iv) any officer or
director of (A) any such specified person, (B) any subsidiary of such specified
Person, or (C) any Person described in clause (ii) or (iii) above or (v) any
other Person having a relationship with any
<PAGE> 2
natural Person by blood, marriage or adoption not more remote than first cousin
or any Person directly or indirectly controlling or controlled by or under
common control with such other Person described in this clause (v). For purposes
of this definition, (i) "control," with respect to any specified Person, means
the possession of the power, whether or not exercised, to direct or cause the
direction of the management or policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing and (ii) none of the Direct Purchasers shall be deemed to be an
Affiliate of either the Company or TransContinental.
"Agreement" shall mean this Stockholders Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States
Code entitled "Bankruptcy," as amended, or any successor statute.
"Direct Purchasers" shall mean the TCW Funds and Jefferies.
"Employment Trigger Event" shall mean TransContinental shall
have terminated Jack Stanley's employment with TransContinental in accordance
with the terms of his employment agreement.
"Environmental Compliance Program" means the policy and
objectives, and measures intended to achieve those objectives, set forth in a
written plan adopted and approved by the TransContinental Board, relating to the
compliance with environmental laws and mitigation of the risk of environmental
liabilities, as the same shall be amended from time to time.
"Holder" shall mean the Initial Holders and any other Person
that is a party to this Agreement and holds Securities, whether by succession to
or assignment from a Holder or otherwise.
"Initial Public Offering" means a firm commitment,
underwritten public offering of common stock of the Company registered under the
Securities Act, other than a registration relating solely to a transaction under
Rule 145 promulgated under the Securities Act or to an employee benefit plan of
the Company, that results in (i) proceeds to the Company and/or any selling
stockholders of not less than $100 million, (ii) total market capitalization of
outstanding common stock (on a fully diluted basis) of $500 million and (iii)
such common stock being listed on the American Stock Exchange or the New York
Stock Exchange or quoted for trading on the Nasdaq National Market tier of the
Nasdaq Stock Market or any of their respective successors.
"Jefferies" shall mean Jefferies & Company, Inc. and any
Affiliate thereof that holds at any time any of the Securities.
"Major Decisions" has the meaning assigned to such term in
Section 4(e).
"Majority Voting Holders" shall mean the holders of a majority
of the combined voting power (with respect to matters for which the Voting
Securities and the common stockholders are entitled to vote together) of all
Voting Securities.
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<PAGE> 3
"Majority Voting Securities" shall mean Voting Securities
representing a majority of the combined voting power (with respect to matters
for which the Voting Securities and the common stockholders are entitled to vote
together) of all Voting Securities.
"New Lenders" shall mean the holders of the Notes.
"Notes" shall mean the 15% Senior Secured Notes due 2003 of
TARC, which Notes are to be assumed by TransContinental on the date hereof.
"Notes Trigger Event" shall mean the earlier of (i) a default
by TransContinental in the payment of principal, interest or any other amount
owing under the Notes when such payment shall become due (without regard to any
applicable cure period) (a "Payment Default") or (ii) a default (other than a
Payment Default) by TransContinental under the Notes, which default results in
the principal and interest owing under the Notes becoming accelerated.
"Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or agency or political
subdivision thereof.
"Preferred Stock Trigger Event" shall mean (i)
TransContinental shall be in default of its obligations under the Certificate of
Designation of the 6% Participating Preferred Stock of TransContinental, (ii)
the Company or TARC shall be in breach of its obligations under this Agreement,
(iii) TransContinental or the Company shall be in breach of its obligations
under the TransContinental Stockholders Agreement or (iv) this Agreement or the
TransContinental Stockholders Agreement shall have terminated for any reason
other than strictly in accordance with its terms.
"Purchasers" shall mean the holders of debt securities of TEC
and TARC who purchased Non-Voting Preferred.
"Refinery" shall mean the refinery owned and operated by
TransContinental and located in St. Charles Parish, Louisiana.
"Repurchase Date" shall mean the date on which TEC or its
assignee consummates the repurchase of certain Non-Voting Preferred Shares
pursuant to the exercise of its rights under that certain Repurchase Rights
Agreement dated as of the date hereof among TEC and the holders of the Series B,
C and D Junior Participating Preferred Stock of the Company.
"Securities" shall mean the Voting Preferred Shares, the
Voting Common Shares, the Non-Voting Preferred Shares, the Non-Voting Common
Shares and any other shares of capital stock (and any securities, including
warrants, convertible into, exchangeable for or otherwise exercisable for shares
of capital stock, excluding the TransContinental Preferred Stock) of the Company
existing on the date of this Agreement or issued hereafter.
"Securities Act" has the meaning assigned to such term in
Section 2(a)(ii).
"TARC" shall mean TransAmerican Refining Corporation, a Texas
corporation.
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<PAGE> 4
"TARC Warrant Holders" shall mean holders of TARC's common
stock purchase warrants outstanding on the date of this Agreement.
"TCR Holding Board" shall mean the Board of Directors of the
Company.
"TCW Funds" shall mean each of the parties to this Agreement
listed as a "TCW Fund" on the signature pages hereto and any Affiliate of such
party that holds at any time any of the Securities.
"TEC" shall mean TransAmerican Energy Corporation, a Delaware
corporation.
"Third Party" shall mean, with respect to any proposed
transferee of Securities, any Person other than an Affiliate of the proposed
transferor of such Securities.
"TransContinental" shall mean TransContinental Refining
Corporation, a Delaware corporation.
"TransContinental Board" shall mean the Board of Directors of
TransContinental.
"TransContinental Preferred Holders" shall mean the holders of
TransContinental Preferred Stock.
"TransContinental Preferred Stock" shall mean the 6%
Convertible Participating Preferred Stock, par value $.01 per share, of
TransContinental.
"TransContinental Stockholders Agreement" shall mean the
Stockholders Agreement of even date herewith by and among TransContinental, the
Company and the TransContinental Preferred Holders.
"Transfer" has the meaning assigned to such term in Section
2(a).
"Transferee" has the meaning assigned to such term in Section
2(a).
"Transfer Notice" has the meaning assigned to such term in
Section 3.
"Transferor" has the meaning assigned to such term in Section
2(a).
"Voting Securities" shall mean, at the time of determination,
all of the shares of capital stock of the Company entitled to vote generally on
matters brought for a vote of the common stockholders of the Company, including
without limitation, the Voting Common Shares and, to the extent they vote
together with the common stockholders, the Voting Preferred Shares.
4
<PAGE> 5
SECTION 2. GENERAL PROVISIONS REGARDING TRANSFER.
(a) General Restrictions. So long as this Agreement shall
remain in force, no Securities may be issued, sold, assigned, transferred, given
away or in any way disposed of (any of the foregoing being hereinafter referred
to as a "Transfer") unless:
(i) the Person in whose favor such Transfer is made (a
"Transferee") shall deliver to the Company and the Holders a
written acknowledgment of such Transferee that the Securities
to be transferred are subject to this Agreement and that such
Transferee and such Transferee's successors in interest and
assigns are bound hereby;
(ii) if such Transfer shall be made other than pursuant
to a public offering registered under the Securities Act of
1933, as amended (the "Securities Act"), and in accordance
with applicable state law, the Transferor shall give to the
Company, if requested by the Company, a written opinion in
form and substance reasonably satisfactory to the Company's
legal counsel to the effect that the proposed Transfer may be
effected without registration under the Securities Act or any
applicable state law; provided, that no such opinion of
counsel shall be required in connection with the resale of
Securities by the initial purchasers thereof pursuant to the
Purchase Agreement dated December___, 1998 by and among TARC,
TCR Holding, the Company and the Direct Purchasers;
(iii) the Person proposing to make such Transfer (the
"Transferor") shall (A) take all such actions and execute and
deliver all such documents as may be necessary or reasonably
requested by the Company in order to consummate the Transfer
of such Securities to such Transferee and (B) pay to the
Company such amounts as may be required for any applicable
stock transfer taxes; and
(iv) Prior to the Repurchase Date, if TARC or any
Affiliate of TARC is the Transferor, TARC or such Affiliate of
TARC first shall have (x) obtained the written consent of the
Majority Voting Holders and (y) complied with the provisions
of Section 3(a).
Any attempted Transfer other than in accordance with this
Agreement shall be void, and the Company shall refuse to recognize any such
Transfer and shall not reflect on the Company's records any change in record
ownership of the Securities pursuant to any such attempted Transfer.
(b) Pledge and Hypothecation Prohibited. Prior to an Initial
Public Offering, without the prior written consent of the Majority Voting
Holders, no Holder (other than the TCW Funds) shall in any manner pledge,
hypothecate or encumber, or grant options with respect to, any Securities;
provided that, notwithstanding this restriction, TARC may pledge its Securities
to TEC solely for the purpose of securing repayment (not to exceed $920 million
in aggregate principal amount) under the intercompany note dated June 13, 1997,
as amended, issued by TARC to TEC.
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<PAGE> 6
SECTION 3. TAG-ALONG AND DRAG-ALONG
(a) Tag-Along. Prior to an Initial Public Offering, if any
Holder proposes to Transfer more than two percent (2%) of the total number of
outstanding Securities to a Third Party, in a single transaction or series of
related transactions, then, at least fifteen (15) days prior to any such
Transfer, such Holder shall provide to the other Holders a notice (a "Tag-Along
Notice") delivered in accordance with Section 7(a) hereof explaining the terms
of such Transfer and identifying the name and address of the Third Party. If
such notice is sent, then, upon the written request of any such other Holder
made within ten (10) days after the day the Tag-Along Notice is received by such
other Holder, the Holder proposing to make the Transfer shall cause the Third
Party to purchase from such other Holder a number of Securities equal to (i) a
fraction (expressed as a percentage) equal to (A) the total number of Securities
held by such other Holder divided by (ii) the total number of outstanding
Securities of the Company, multiplied by (B) the total number of Securities
proposed to be Transferred to such Third Party. Such purchase shall be made on
the same date and at the same price and on terms and conditions at least as
favorable to such other Holder as the terms and conditions contained in the
Tag-Along Notice delivered in connection with such proposed transaction;
provided that no Direct Purchaser shall be required to provide a Tag Along
Notice or otherwise comply with this provision if (i) such Direct Purchaser is
Transferring Securities in connection with a Transfer of Notes or other debt of
the Company or TransContinental or any of their respective subsidiaries or
Affiliates and (ii) the aggregate amount received by such Direct Purchaser for
such Securities and Notes or other debt does not exceed 115% of the principal
amount of such Notes or other debt. This Section 3(a) shall not apply to the
Voting Preferred Shares so long as such shares shall remain outstanding.
(b) Drag-Along Rights. If, prior to the earlier of the
Repurchase Date or an Initial Public Offering, the Majority Voting Holders
propose to Transfer the Majority Voting Securities to a Third Party, such
Majority Voting Holders may, at their sole option, (i) provide the other
Holders, at least fifteen (15) days prior to the date of the proposed Transfer,
a notice (a "Drag Along Notice") delivered in accordance with Section 7(a)
hereof stating the number of Securities to be so Transferred to such Third Party
and summarizing the economic terms of such Transfer, including the purchase
price, closing date and the identity of such Third Party and (ii) require each
other Holder to sell up to a number of Securities equal to (x) a fraction
(expressed as a percentage) equal to (A) the total number of Securities proposed
to be Transferred by the Majority Voting Holders to such Third Party divided by
(B) the total number of Securities held by such Majority Voting Holders,
multiplied by (y) the total number of Securities held by such other Holder. Such
sale shall be made at a price per share to such other Holder equal to the amount
per share received by the Majority Voting Holders for their Securities from such
Third Party and otherwise on the same terms and conditions (including any escrow
or indemnification obligation); provided, however, that, unless a Notes Trigger
Event or a Preferred Stock Trigger Event has occurred and is continuing, the
Majority Voting Holders shall not have the right to require TARC to Transfer any
Securities pursuant to this Section 3(b). This Section 3(b) shall not apply to
the Voting Preferred Shares so long as such shares shall remain outstanding;
provided, however, if the Voting Preferred Shares are subsequently exchanged
for Securities that include common shares, such common shares shall be subject
to this Section 3(b) and, if such common shares are issued after the date of a
Drag Along Notice, such shares shall be sold immediately to the Third Party on
the same terms and conditions applicable to the sale of Securities by the other
Holders.
6
<PAGE> 7
SECTION 4. BOARD OF DIRECTORS REPRESENTATION AND MANAGEMENT
RIGHTS.
(a) Representation on TCR Holding Board. The bylaws of the
Company shall provide that the TCR Holding Board shall at all times consist of
five (5) members. Of the five members, TARC shall be entitled, exclusively and
in its sole discretion, to designate two members (the "TARC Designees), the TCW
Funds shall be entitled, exclusively and in their sole discretion, to designate
two (2) members (the "TCW Designees") and, prior to the Repurchase Date,
Jefferies shall be entitled, exclusively and in its sole discretion, to
designate one (1) member (the "Fifth Designee"). After the Repurchase Date, TARC
shall be entitled, exclusively and in its sole discretion, to designate the
Fifth Designee; provided, that if there shall not have occurred prior to the
first anniversary of the Repurchase Date either an Initial Public Offering or a
sale of all or substantially all of the assets of either TCR Holding or the
Company, then the TCW Funds shall be entitled, exclusively and in their sole
discretion, to designate the Fifth Designee. Any Person so entitled to designate
a member of the TCR Holding Board also shall be entitled, exclusively and in
such Person's sole discretion, to designate such member for removal from the TCR
Holding Board. The TCW Funds shall be entitled to select which TCR Holding Board
member shall serve as Chairman of the TCR Holding Board. Unless a Notes Trigger
Event, a Preferred Stock Trigger Event or an Employment Trigger Event has
occurred and is continuing, TARC shall be entitled to select which TCR Holding
Board member shall serve as the Vice Chairman of the TCR Holding Board. The TCW
Funds shall be entitled to designate one non-voting representative to attend
meetings of the TCR Holding Board and committees thereof.
(b) Quorum; Committees of TCR Holding Board; Visitation
Rights. At least one TCW Designee shall be present (in accordance with the
bylaws of the Company) in order for a quorum of the TCR Holding Board to be
established; provided, that a quorum may be established at a meeting of the TCR
Holding Board without any such TCW Designee being present if (i)(A) at least one
TCW Designee holds a seat on the TCR Holding Board, (B) prior to such meeting,
the Company shall have given written notice of each meeting of the TCR Holding
Board to each TCW Designee in accordance with the bylaws of the Company and to
the TCW Funds in accordance with Section 7(a) hereof at least five (5) days in
advance of each such meeting and (C) no TCW Designee shall have attended any of
the three meetings of the TCR Holding Board immediately preceding such meeting
or (ii)(A) no TCW Designee holds a seat on the TCR Holding Board and (B) the TCW
Funds shall have failed to designate an individual to serve as a TCW Designee
for a period of 60 days after receiving a written request from TARC to so
designate a TCW Designee. So long as at least one TCW Designee holds a seat on
the TCR Holding Board, the TCR Holding Board may act, in lieu of a meeting, by
unanimous written consent; provided, however, that at any time that no TCW
Designee holds a seat on the TCR Holding Board, the TCR Holding Board may act by
unanimous written consent solely for the purpose of electing of directors to the
TransContinental Board in strict compliance with paragraph (c) below. Except as
otherwise approved by a majority of the TCW Designees and the Fifth Designee,
each TCW Designee and each Fifth Designee shall sit on each authorized committee
of the TCR Holding Board.
(c) Representation on TransContinental Board. Each Holder
agrees that the bylaws of TransContinental shall provide that the
TransContinental Board shall at all times consist of five (5) members in
accordance with the TransContinental Stockholders Agreement. Of the four (4)
members of the TransContinental Board which TCR Holding has the right to
designate pursuant to the TransContinental Stockholders Agreement, each Holder
shall cause the
7
<PAGE> 8
members of the TCR Holding Board to vote and otherwise take or cause to be taken
all such other action as may be necessary so that two (2) members of the
TransContinental Board shall be individuals designated by TARC, exclusively and
in its sole discretion (the "TARC TransContinental Board Designees"), and two
(2) members shall be individuals designated by the TCW Funds, exclusively and in
their sole discretion (the "TCW TransContinental Board Designees"). Any Person
so entitled to designate a member of the TransContinental Board also shall be
entitled, exclusively and in such Person's sole discretion, to designate such
member for removal from the TransContinental Board. Each Holder shall cause the
members of the TCR Holding Board to vote and otherwise take or cause to be taken
all such other action as may be necessary to cause the removal of any member of
the TransContinental Board so designated for removal. The TCW Funds shall be
entitled to select which TransContinental Board member shall serve as Chairman
of the TransContinental Board. Unless a Notes Trigger Event, a Preferred Stock
Trigger Event or an Employment Trigger Event has occurred and is continuing,
TARC shall be entitled to select which TransContinental Board member shall serve
as the Vice Chairman of the TransContinental Board. The TCW Funds shall be
entitled to designate one non-voting representative to attend meetings of the
TransContinental Board and committees thereof.
(d) Quorum; Committees of TransContinental Board; Visitation
Rights. At least one TCW TransContinental Board Designee shall be present (in
accordance with the bylaws of the TransContinental) in order for a quorum of the
TransContinental Board to be established; provided, that a quorum may be
established at a meeting of the TransContinental Board without any such TCW
TransContinental Board being present if (i)(A) at least one TCW TransContinental
Board Designee holds a seat on the TransContinental Board, (B) prior to such
meeting, TransContinental shall have given written notice of each meeting of the
TransContinental Board to each TCW TransContinental Board Designee in accordance
with the bylaws of TransContinental and to the TCW Funds in accordance with
Section 7(a) hereof at least five (5) days in advance of each such meeting and
(C) no TCW TransContinental Board Designee shall have attended any of the three
meetings of the TransContinental Board immediately preceding such meeting or
(ii)(A) no TCW TransContinental Board Designee holds a seat on the
TransContinental Board and (B) the TCW Funds shall have failed to designate an
individual to serve as a TCW TransContinental Board Designee for a period of 60
days after receiving a written request from TARC to so designate a TCW
TransContinental Board Designee. So long as at least one TCW TransContinental
Board Designee sits on the TransContinental Board, the TransContinental Board
may act, in lieu of a meeting, by unanimous written consent. Except as otherwise
approved by the TCW TransContinental Board Designees, each TCW TransContinental
Board Designee shall sit on each authorized committee of the TransContinental
Board.
(e) Major Decisions. Subject to (f) below, no action shall be
taken, sum expended, decision made or obligation incurred by or on behalf of the
Company with respect to any matter unless approved or ratified by a majority of
the TCR Holding Board. Notwithstanding the foregoing, unless and until the TCR
Holding Board revokes such authority, Glenn McGinnis shall have general
authority to take actions in the ordinary course of business for and on behalf
of the Company, and Mr. McGinnis also may delegate authority to take such
actions to other employees of the Company over which he has supervisory
authority; provided, that, except to the extent set forth on Exhibit A, no such
8
<PAGE> 9
action shall be taken if such action would constitute a Major Decision. "Major
Decisions" shall mean and consist of the following:
(i) granting to any individual the authority to open and
draw checks on bank accounts in the name of the Company or
endorse checks for deposit to such accounts;
(ii) the sale, lease or other disposition of assets of
the Company, other than assets having a fair market value,
individually or in the aggregate with assets sold, leased or
otherwise disposed in a transaction or series of related
transactions, of less than $250,000;
(iii) entering into, terminating or materially modifying
either (i) any material agreement to which the Company is or
hereafter becomes a party or (ii) the Environmental Compliance
Plan;
(iv) approving or incurring any capital expenditure,
purchase or other expenditure of the Company which exceeds in
the aggregate with all other capital expenditures, purchases
or other expenditures during the fiscal year in which such
purchase or expenditure is approved or incurred, $250,000,
unless such capital expenditure, purchase or other expenditure
is identified in the annual or quarterly capital operating
budget of the Company previously approved by the TCR Holding
Board;
(v) the incurrence or assumption of any indebtedness for
borrowed money by, or the repayment (other than in accordance
with the express terms thereof) refinancing of any
indebtedness of, the Company or the granting of any mortgage,
lien or other encumbrance on any of the assets of the Company
or the giving of any guaranty by the Company;
(vi) the (i) entry of an order for relief or other
commencement of a voluntary case under the Bankruptcy code or
any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, (ii) consent to the entry of an order
for relief in an involuntary case or the conversion of an
involuntary case into a voluntary case under any such law,
(iii) consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial
part of the property of the Company or (iv) assignment of the
assets of the Company for the benefit of creditors generally;
(vii) the issuance of any securities of the Company;
(viii) the appointment or termination of the officers or
senior managers of the Company and the establishment of (i)
benefit plans, salaries and bonuses for officers or directors
of the Company and (ii) the organizational structure and
staffing plan, including salary ranges for each position;
9
<PAGE> 10
(ix) payment of any dividend, distribution, redemption
payment or other payment to the Holders of the Company or the
stockholders;
(x) approval of the annual and quarterly operating
budgets of the Company;
(xi) any decision with respect to the principal place of
business of the Company or the fiscal year of the Company;
(xii) any amendment or restatement of the Certificate of
Incorporation or the bylaws of the Company;
(xiii) the entry by the Company into any transaction or
agreement with any Affiliate of the Company;
(xiv) the engagement or retention of outside legal
counsel by the Company; and
(xv) except as otherwise set forth in this Agreement,
such other matters or business as would properly or
customarily be decided by or submitted to the board of
directors of a corporation.
In addition, any action by the Company to materially amend, modify or supplement
any document, instrument, transaction or other matter described above as a Major
Decision shall require the approval of a majority of the TCR Holding Board if
the same as so amended, modified or supplemented would be inconsistent with the
terms previously approved with respect thereto by the TCR Holding Board.
(f) Minority Rights. (i) prior to the Repurchase Date, unless
a Notes Trigger Event or a Preferred Stock Trigger Event has occurred and is
continuing, any decision to sell all or substantially all of assets of the
Company shall require the unanimous consent of the Board and (ii) at all times
after the Repurchase Date, unless the TCW Funds have the right to designate the
Fifth Designee to the TCR Holding Board pursuant to Section 4(a), the following
actions shall require the unanimous consent of the Board:
(i) the sale, lease or other disposition of assets of
the Company, other than assets having a fair market value,
individually or in the aggregate with assets sold, leased or
otherwise disposed in a transaction or series of related
transactions, of less than $250,000;
(ii) the (a) entry of an order for relief or other
commencement of a voluntary case under the Bankruptcy code or
any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or (b) consent to the entry of an
order for relief in an involuntary case or the conversion of
an involuntary case into a
10
<PAGE> 11
voluntary case under any such law or (c) consent to the
appointment of or taking possession by a receiver, trustee or
other custodian for all or a substantial party of the property
of the Company or (d) assignment of the assets of the Company
for the benefit of creditors generally;
(iii) any and all decisions or authorizations with
respect to the amount and type of insurance of the Refinery;
(iv) any and all matters relating to the adoption or
modification of or compliance with the environmental
compliance policies of the Company;
(v) any amendment or restatement of the Certificate of
Incorporation or the bylaws of the Company; and
(vi) the entry by the Company into any transaction or
agreement with any Affiliate of the Company.
(g) Compensation. Members of the TCR Holding Board shall not be
entitled to any compensation for their service on such board (other than
reimbursement of reasonable out-of-pocket expenses incurred in connection with
board meetings or director-related activities for services as a board member)
without the written consent of Majority Voting Holders; provided, however, that
no member of the TCR Holding Board who is an employee or officer of (i) the
Company, (ii) any Holder or (iii) any Affiliate of the Company or any Holder
shall be entitled to compensation (other than reimbursement of reasonable
out-of-pocket expenses incurred in connection with board meetings or
director-related activities for services) as a board member.
(h) D&O Insurance. The Company shall at all times maintain in
force for the benefit of all directors and officers of the Company coverage from
a reputable insurer selected by the Majority Voting Holders with coverages
(including, without limitation, commercially available coverages against
environmental liabilities) which are not less than Twenty Five Million Dollars
($25,000,000) and deductibles which are approved by the Majority Voting Holders.
If the Company shall ever fail to pay when due any premium or other charge with
respect to such insurance coverage, or otherwise fail to renew such coverage,
the Majority Voting Holders or their Affiliates may pay such premium or charge,
or renew such coverage, and the Company shall promptly reimburse such Majority
Voting Holders or their Affiliates
(i) Voting Agreement. All parties to this Agreement agree that
this Section 4 shall constitute a voting agreement within the meaning of Section
218 of the Delaware General Corporation Law.
(j) Termination of Certain Rights under this Section. Upon the
Transfer of the Majority Voting Securities to a Third Party in accordance with
this Agreement, in one transaction or in a series of related transactions, prior
to the Repurchase Date, the provisions of this Section 4 (other than
clause(f)(i), clause (i) and this clause (j)) shall terminate and be of no
further force or effect. Notwithstanding the foregoing, TARC's rights pursuant
to Section 4(a) with respect to the TARC Designees (and any right of
(k) Each Holder agrees that at such time as the right of the
holders of the Class A Participating Preferred Stock, Series A or the Class B
Participating Preferred Stock, Series B to force the sale of common stock of
TransContinental arises under either of the respective certificates of
designation with respect to such stock, that such Holder will vote to approve
such sale in accordance with the terms thereof.
11
<PAGE> 12
TARC to designate the Fifth Director) and Section 4(c) with respect to the TARC
TransContinental Board Designees shall survive such Transfer, unless (i) in
connection with such Transfer, TARC Transferred any Securities pursuant to its
rights under Section 3(a), (ii) immediately after such Transfer of the Majority
Voting Securities, TARC no longer owns at least 15% of the outstanding
Securities or (iii) a Notes Trigger Event or a Preferred Stock Trigger Event has
occurred and is continuing.
SECTION 5. CERTIFICATES.
(a) Restrictive Endorsements. Each certificate evidencing any
Securities shall bear a legend in substantially the following form:
"The securities evidenced by this certificate are subject to a
Stockholders Agreement dated as of December __, 1998, copies
of which are on file at the principal office of the
corporation and will be furnished to the holder on request to
the Secretary of the corporation. Such Stockholders Agreement
provides, among other things, for certain restrictions on
voting, sale, transfer, pledge, hypothecation or other
disposition of the securities evidenced by this certificate
and that such securities may be subject to purchase upon the
occurrence of certain events."
In addition, unless counsel to the Company has advised that such legend is no
longer needed, each certificate evidencing the Securities shall bear a legend in
substantially the following form:
"The securities evidenced by this certificate have not been
registered pursuant to the Securities Act of 1933, as amended
(the "Act"), or any state securities law, and such securities
may not be sold, transferred or otherwise disposed of unless
the same are registered and qualified in accordance with the
Act and any applicable state securities laws, or in the
opinion of counsel reasonably satisfactory to the corporation
such registration and qualification are not required."
(b) Replacement Certificates. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any of its respective certificates evidencing any Securities, and
(in the case of loss, theft or destruction) of indemnity reasonably satisfactory
to it, upon surrender and cancellation of such certificate or receipt of such
indemnity, the Company will execute, register and deliver a new certificate of
like tenor in lieu of such lost, stolen, destroyed or mutilated certificate.
SECTION 6. EQUITABLE RELIEF. The parties hereto agree and
declare that legal remedies may be inadequate to enforce the provisions of this
Agreement and that equitable relief, including specific performance and
injunctive relief, may be used to enforce such provisions.
SECTION 7. MISCELLANEOUS.
(a) Notices. All notices and other communications provided for
or permitted under this Agreement shall be made in writing by hand-delivery,
certified first-class mail, return
12
<PAGE> 13
receipt requested, next-day air courier or facsimile, in the case of the
Purchasers, to the addresses listed below their names on the signature pages
and, in the case of the Company and TARC, to the following:
(i) if to the Company:
TCR Holding Corporation
14902 River Road
New Sarpy, LA 70078
Telecopy Number: (504) 764-2359
Attention: Mr. Glenn McGinnis
(ii) if to TARC:
TransAmerican Refining Corporation
1300 North Houston Parkway East, Suite 310
Houston, Texas 77032-2949
Telecopy Number: (281) 986-8865
Attention: Secretary
Copy to:
Gardere & Wynne, L.L.P.
1601 Elm Street,
3000 Thanksgiving Tower
Dallas, Texas 75201
Telecopy Number: (214) 999-4667
Attention: C. Robert Butterfield, Esq.
or, if to any other Person who is the registered holder of any Securities to the
address for the purpose of such holder as it appears in the stock ledger of the
Company or at such other address as such party may have furnished in writing to
each other party hereto.
Any notice shall be deemed to have been duly given when delivered by hand, if
personally delivered, and if sent by mail, two business days after being
deposited in the mail, postage prepaid.
(b) Amendment. This Agreement may be changed, modified or amended
only by a writing signed by all of the Holders of the Voting Securities;
provided that no such change, modification or amendment shall be enforceable
against any party to this Agreement whose
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<PAGE> 14
rights or obligations hereunder will be materially and adversely affected
thereby unless the same shall be in writing and signed by such party.
(c) Waiver. No failure or delay on the part of the parties or
any of them in exercising any right, power or privilege hereunder, nor any
course of dealing between the parties or any of them shall operate as a waiver
of any such right, power or privilege nor shall any single or partial exercise
of any such right, power or privilege preclude the simultaneous or later
exercise of any other right, power or privilege. The rights and remedies herein
expressly provided are cumulative and are not exclusive of any rights or
remedies which the parties or any of them would otherwise have. No notice to or
demand on any party hereto shall entitle such party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the other parties or any of them to take any other or further action
in any circumstances without notice or demand.
(d) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(e) Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Delaware
applied to contracts to be made and to be performed therein without giving
effect to the considerations of conflicts of laws.
(f) Filing. A copy of this Agreement and of all amendments
hereto shall be filed at the principal office of the Company.
(g) Termination. This Agreement may be terminated at any time
by an instrument in writing signed by all of the Holders of the Voting
Securities.
(h) All Securities Subject to this Agreement.
(i) Any Securities now or hereafter held by any Person
shall be held by such Person subject to the transfer and other
restrictions of this Agreement and such Person shall be deemed
to be a "Holder" for all such purposes of this Agreement;
(ii) A Holder who ceases to own any Securities as
provided for in this Agreement shall cease to be a Holder for
purposes of this Agreement; and
(iii) The provisions of this Agreement shall be deemed to
apply equally to any Security or other equity securities
distributed in respect of the Securities.
(i) Benefit and Binding Effect. Except as otherwise provided
in this Agreement, no right under this Agreement shall be assignable and any
attempted assignment in violation of this provision shall be void; provided,
that the Purchasers and the TCW Funds (and their respective assignees) may
assign their respective rights under this Agreement (other than the right to
designate any TCW Designee or TCW TransContinental Board Designee) to any Person
who (i) is, immediately following such assignment, in compliance with all of the
covenants and agreements applicable to such Holder hereunder and (ii) assumes
all obligations of such Holder under this Agreement. Subject to compliance with
the terms of this Agreement regarding Transfer of Securities, this Agreement
shall be binding upon
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<PAGE> 15
and inure to the benefit of the parties and their executors, administrators,
personal representatives, heirs, successors and permitted assigns. Except as set
forth in this clause (i), this Agreement does not create and shall not be
construed as creating any rights enforceable by any Person not a party hereto.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
(k) Exercise of Company's Option to Effect Exchange of Voting
Preferred Shares. Notwithstanding anything to the contrary contained in this
Agreement or elsewhere, the Majority Voting Holders shall have the exclusive
right to cause the Company to exercise its option to exchange debt and equity
securities of the Company for the Voting Preferred Shares pursuant to the terms
of the certificate of designations governing the Voting Preferred Shares.
(l) Conversion of Non-Voting Preferred. Prior to the earlier
of the Repurchase Date or an Initial Public Offering, in the event that the TCR
Holding Board approves the exercise of the Company's option to force the
conversion of the Non-Voting Preferred Shares in accordance with the respective
certificates of designations governing the Non-Voting Preferred Shares, the TCR
Holding Board also may provide, in its sole discretion, that the shares issuable
upon conversion of such Non-Voting Preferred Shares shall be shares of voting
common stock, in lieu of shares of non-voting common stock.
(m) Further Assurance. Each Holder shall cause all Securities
that are entitled to vote and are registered in the name of such Holder to be
voted, and will otherwise take or cause to be taken all such other action as may
be necessary, to implement the provisions of this Agreement and the
TransContinental Stockholders Agreement and shall not take any action
inconsistent herewith or therewith.
[signature page follows]
15
<PAGE> 16
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the day and year first above written.
TRANSAMERICAN REFINING
CORPORATION, a Texas corporation
By:
--------------------------------------
Ed Donahue
Vice President
TCR HOLDING CORPORATION, a Delaware
corporation
By:
--------------------------------------
R. Glenn McGinnis
President
16
<PAGE> 17
THE DIRECT PURCHASERS:
THE TCW FUNDS: TCW LEVERAGED INCOME TRUST, L.P.
By: TCW ADVISORY (BERMUDA), LTD.,
Its 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 Advisory (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 SHARED OPPORTUNITY FUND III, L.P.
By: TCW ASSET 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.
17
<PAGE> 18
Jefferies: Jefferies & Company, Inc
By:
-------------------------------------
NAME:
Title:
At: Jefferies & Company, Inc.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, CA 90025
Attention: Joe Maly
Copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
Attention: Rod A. Guerra, Jr.
SIGNATURE PAGE TO STOCKHOLDERS AGREEMENT (TCR Holding)
This signature page is for the Stockholders Agreement (TCR
Holding) dated as of December __, 1998 (the "Agreement"), by and among the
Company, TransAmerican Refining Corporation and the Initial Holders, and by
execution below the undersigned agrees that it shall be attached as a signature
page to such agreement.
By:
-------------------------------------
NAME:
-------------------------------------
Title:
-------------------------------------
Tax I.D. No.:
--------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
Attention:
--------------------------------
Fax Number:
--------------------------------
Phone Number:
--------------------------------
18
<PAGE> 1
EXHIBIT 99.9
STOCKHOLDERS AGREEMENT (TRANSCONTINENTAL)
This STOCKHOLDERS AGREEMENT (this "Agreement") is made and
entered into as of December __, 1998, by and among TransContinental Refining
Corporation, a Delaware corporation (the "Company"), TCR Holding Corporation, a
Delaware corporation ("TCR Holding"), and each of the other parties signatories
hereto who hold Securities (as defined below) (the "Preferred Holders" and,
together with TCR Holding, the "Initial Holders").
W I T N E S S E T H
WHEREAS, TCR Holding owns all of the issued and outstanding
shares of common stock, par value $.01 per share, of the Company (the "Common
Shares");
WHEREAS, the Preferred Holders own all of the issued and
outstanding shares of 6% Participating Convertible Preferred Stock, par value
$.01 per share, of the Company (the "Preferred Shares");
WHEREAS, the Company and each of the Initial Holders deem it
to be in their best interests to provide for continuity in the control and
operation of the Company, for restrictions on the transfer of certain
securities and for various other matters set forth herein.
NOW, THEREFORE, in consideration of the agreements and mutual
covenants set forth herein, the parties agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the
following terms have the following meanings:
"Affiliate" means, with respect to any specified Person, (i)
any subsidiary of such Person, (ii) any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person, (iii) any other Person that owns, directly or
indirectly, 10% or more of such specified Person's capital stock, (iv) any
officer or director of (A) any such specified person, (B) any subsidiary of
such specified Person, or (C) any Person described in clause (ii) or (iii)
above or (v) any other Person having a relationship with any natural Person by
blood, marriage or adoption not more remote than first cousin or any Person
directly or indirectly controlling or controlled by or under common control
with such other Person described in this clause (v). For purposes of this
definition, (i) "control," with respect to any specified Person, means the
possession of the power, whether or not exercised, to direct or cause the
direction of the management or policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing and (ii) none of the Preferred Holders shall be deemed to be an
Affiliate of either TCR Holding or the Company.
"Agreement" shall mean this Stockholders Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States
Code entitled "Bankruptcy," as amended, or any successor statute.
"Board" shall mean the Board of Directors of the Company.
<PAGE> 2
"Holder" shall mean the Initial Holders and any other Person
that is a party to this Agreement and holds Securities, whether by succession
to or assignment from an Initial Holder or otherwise.
"Initial Public Offering" means a firm commitment,
underwritten public offering of Common Shares of the Company registered under
the Securities Act, other than a registration relating solely to a transaction
under Rule 145 promulgated under the Securities Act or to an employee benefit
plan of the Company, that results in (i) proceeds to the Company and/or any
selling stockholders of not less than $100 million, (ii) total market
capitalization of outstanding Common Shares (on a fully diluted basis) of $500
million and (iii) such Common Shares being listed on the American Stock
Exchange or the New York Stock Exchange or quoted for trading on the Nasdaq
National Market tier of the Nasdaq Stock Market or any of their respective
successors.
"Jefferies" shall mean Jefferies & Company, Inc. and any
Affiliate thereof that holds at any time any of the Securities.
"Majority Preferred Holders" shall mean a majority of the
Preferred Shares held of record by Jefferies, the TCW Funds and their respective
Affiliates, so long as such Persons hold at least 25% of the outstanding
Preferred Shares, and, thereafter, shall mean the Preferred Holders of record
holding a majority of the then outstanding Preferred Shares.
"Major Decisions" has the meaning assigned to such term in
Section 4(c)(1).
"Notes" shall mean the 15% Senior Secured Notes due 2003 of
TARC, which Notes are to be assumed by the Company on the date hereof.
"Notes Trigger Event" shall mean the earlier of (i) a default
by the Company in the payment of principal, interest or any other amount owing
under the Notes when such payment shall become due (without regard to any
applicable cure period) (a "Payment Default") or (ii) a default (other than a
Payment Default) by the Company under the Notes, which default results in the
principal and interest owing under the Notes becoming accelerated.
"Person" shall mean any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust, unincorporated organization or government or agency or political
subdivision thereof.
"Preferred Stock Trigger Event" shall mean (i) the Company
shall be in default of its obligations under the Certificate of Designation of
the Preferred Shares, (ii) TCR Holding or TARC shall be in breach of its
obligations under the TCR Holding Stockholders Agreement, (iii) the Company or
TCR Holding shall be in breach of its obligations under this Agreement or (iv)
this Agreement or the TCR Holding Stockholders Agreement shall have terminated
for any reason other than strictly in accordance with its terms.
"Repurchase Date" shall mean the date on which TEC or its
assignee consummates the repurchase of certain capital stock of TCR Holding
pursuant to the exercise of its rights under that certain Repurchase Rights
Agreement dated as of the date hereof among TEC and the holders of the Series B,
C and D Junior Participating Preferred Stock of TCR Holding.
2
<PAGE> 3
"Securities" shall mean the Common Shares and the Preferred
Shares and any other shares of capital stock (and any securities, including
warrants, convertible into, exchangeable for or otherwise exercisable for
shares of capital stock) of the Company existing on the date of this Agreement
or issued hereafter.
"Securities Act" has the meaning assigned to such term in
Section 2(a)(ii).
"TARC" shall mean TransAmerican Refining Corporation, a
Texas corporation.
"TCR Holding" shall have the meaning assigned to such term
in the introductory paragraph to this Agreement.
"TCR Holding Stockholders Agreement" shall mean the
Stockholders Agreement of even date herewith by and among TCR Holding, TARC and
the Preferred Holders.
"TCW Funds" shall mean each of the parties to this Agreement
listed as a "TCW Fund" on the signature pages hereto and any Affiliate of such
party that holds at any time any of the Securities.
"TEC" shall mean TransAmerican Energy Corporation, a Delaware
corporation.
"Third Party" shall mean with respect to any proposed
transferee of Securities, any Person other than an Affiliate of the proposed
transferor of such Securities.
"Transfer" has the meaning assigned to such term in Section
2(a).
"Transferee" has the meaning assigned to such term in Section
2(a).
"Transferor" has the meaning assigned to such term in Section
2(a).
SECTION 2. GENERAL PROVISIONS REGARDING TRANSFER.
(a) General Restrictions. So long as this Agreement shall
remain in force, no Securities may be issued, sold, assigned, transferred,
given away or in any way disposed of (any of the foregoing being hereinafter
referred to as a "Transfer") unless:
(i) the Person in whose favor such Transfer is made (a
"Transferee") shall deliver to the Company and the Holders a
written acknowledgment of such Transferee that the Securities
to be transferred are subject to this Agreement and that such
Transferee and such Transferee's successors in interest and
assigns are bound hereby;
(ii) if such Transfer shall be made other than pursuant
to a public offering registered under the Securities Act of
1933, as amended (the "Securities Act"), and in accordance
with applicable state law, the Transferor shall give to the
Company, if reasonably requested by the Company, a written
opinion in form and substance reasonably satisfactory to the
Company's legal counsel to the effect that the proposed
Transfer may be effected without registration under the
Securities
3
<PAGE> 4
Act or any applicable state law; provided, that no such
opinion of counsel shall be required in connection with the
resale of Preferred Shares by the initial purchasers thereof
pursuant to the Purchase Agreement dated December___, 1998 by
and among TARC, TCR Holding, the Company, the TCW Funds and
Jefferies; and
(iii) the Person proposing to make such Transfer (the
"Transferor") shall (A) take all such actions and execute and
deliver all such documents as may be necessary or reasonably
requested by the Company in order to consummate the Transfer
of such Securities to such Transferee and (B) pay to the
Company such amounts as may be required for any applicable
stock transfer taxes
Any attempted Transfer other than in accordance with this Agreement shall be
void, and the Company shall refuse to recognize any such Transfer and shall not
reflect on the Company's records any change in record ownership of the
Securities pursuant to any such attempted Transfer.
(b) Pledge and Hypothecation Prohibited. Prior to an Initial
Public Offering, without the prior written consent of the Majority Preferred
Holders, TCR Holding shall not in any manner pledge, hypothecate or encumber,
or grant options with respect to, any Securities; provided that,
notwithstanding this restriction, TCR Holding (i) may pledge its Common Shares
to TEC solely for the purpose of securing repayment (not to exceed $50 million
in aggregate principal amount) under the promissory note dated October 1, 1998
originally issued by TARC to TEC (which note was assumed on the date hereof by
TCR Holding), (ii) may subject its Common Shares to the forced sale right
granted in the Certificate of Designations of the Class A Voting Preferred
Stock, Series A, par value $.01 per share, of TCR Holding or (iii) may pledge
its Common Shares to TARC solely for the purpose of securing payment (not to
exceed $920 million in aggregate principal amount) under the intercompany note
to be issued to TARC upon exchange of the Class A Voting Preferred Stock,
Series A, par value $.01 per share, of TCR Holding.
SECTION 3. TAG-ALONG AND DRAG-ALONG
(a) Tag-Along. If, at any time (i) after the Repurchase Date
or (ii) so long as a Preferred Stock Trigger Event relating to a breach of
Section 4(a) of this Agreement or Section 4(c) of the TCR Holding Stockholders
Agreement has occurred and is continuing, TCR Holding proposes to Transfer any
Common Shares to a Third Party, then, at least fifteen (15) days prior to any
such Transfer, TCR Holding shall provide to the Preferred Holders a notice (a
"Tag-Along Notice") delivered in accordance with Section 7(a) hereof explaining
the terms of such Transfer and identifying the name and address of the Third
Party. If such notice is sent, then, upon the written request of any such
Preferred Holder made within ten (10) days after the day the Tag-Along Notice
is received by such Preferred Holder, TCR Holding shall cause the Third Party
to purchase from such Preferred Holder a number of Common Shares equal to (i) a
fraction (expressed as a percentage) equal to (A) the total number of Common
Shares issuable upon conversion of the Preferred Shares held by such Preferred
Holder divided by (B) the total number of Common Shares (on a fully diluted
basis) of the Company, multiplied by (ii) the total number of Common Shares
proposed to be Transferred to such Third Party. Such purchase shall be made on
the same date and at the same price and on terms and conditions at least as
favorable to such Preferred Holder as the terms and conditions contained in the
Tag-Along Notice delivered in connection with such proposed transaction.
4
<PAGE> 5
(b) Drag-Along Rights. If, at any time prior to the
Repurchase Date and so long as no Preferred Stock Trigger Event relating to a
breach of Section 4(a) of this Agreement or Section 4(c) of the TCR Holding
Stockholders Agreement has occurred and is continuing, TCR Holding proposes to
Transfer a majority of the Common Shares to a Third Party, TCR Holding may, at
its sole option, (i) provide the Preferred Holders at least fifteen (15) days
prior to the date of the proposed Transfer a notice (a "Drag Along Notice")
delivered in accordance with Section 7(a) hereof stating the amount of Common
Shares to be so Transferred to such Third Party and summarizing the economic
terms of such Transfer, including the purchase price, closing date and the
identity of such Third Party and (ii) require each Preferred Holder to sell up
to a number of Securities equal to (x) a fraction (expressed as a percentage)
equal to (A) the total number of Common Shares proposed to be Transferred by
TCR Holding to such Third Party divided by (B) the total number of Common
Shares held by such TCR Holding, multiplied by (y) the total number of Common
Shares issuable upon conversion of the Preferred Shares held by such Preferred
Holder. Such sale shall be made at a price per share to such Preferred Holder
equal to the amount per share received by TCR Holding its Common Shares from
such Third Party and otherwise on the same terms and conditions (including any
escrow or indemnification obligation).
5
<PAGE> 6
SECTION 4. BOARD OF DIRECTORS REPRESENTATION AND MANAGEMENT
RIGHTS.
(a) Representation. The bylaws of the Company shall provide
that the Board shall at all times consist of five (5) members. Of the five
members, TCR Holding shall be entitled to designate four (4) members (the "TCR
Holding Designees") and, subject to the following provisions, the Majority
Preferred Holders shall be entitled to designate one (1) member (the "Fifth
Designee"). Initially, Jefferies shall be entitled, exclusively and in its sole
discretion, to designate the Fifth Designee on behalf of the Majority Preferred
Holders until such time as Jefferies (x) refuses or fails to designate the Fifth
Designee upon the written request of the Majority Preferred Holders and such
board seat remains vacant for 5 days or (y) the Fifth Designee fails to attend
three consecutive meetings of the Board after due notice in each instance. After
the Repurchase Date, TARC shall be entitled, exclusively and in its sole
discretion, to designate the Fifth Designee; provided, that if there shall not
have occurred prior to the first anniversary of the Repurchase Date either an
Initial Public Offering or a sale of all or substantially all of the assets of
either TCR Holding or the Company, then the TCW Funds shall be entitled,
exclusively and in their sole discretion, to designate the Fifth Director.
Notwithstanding the foregoing, however, so long as a Preferred Stock Trigger
Event has occurred and is continuing, the Majority Preferred Holders shall be
entitled, exclusively and in their sole discretion, to appoint three (3) of the
five (5) members of the Board and the TCW Funds and TARC each shall be entitled,
exclusively and in their sole discretion, to designate one (1) member. At any
time that the Majority Preferred Holders are entitled to appoint a majority of
the members of the Board, no meeting of the Board shall take place (or if any
meeting takes place, no action taken at such meeting shall be valid) until the
earlier to occur of (i) 30 days after notice shall have been given to or by the
holders of the Preferred Shares that a Preferred Stock Trigger Event shall have
occurred or (ii) the Majority Preferred Shares shall have duly appointed such
members. Any Person entitled to designate a member of the Board pursuant to the
foregoing provisions also shall be entitled, exclusively and in such Person's
sole discretion, to designate such member for removal from the Board. So long as
no Preferred Stock Trigger Event relating to a breach of Section 4(a) of this
Agreement or Section 4(c) of the TCR Holding Stockholders Agreement has occurred
and is continuing, TCR Holding shall select which Board member shall serve as
Chairman of the Board and Vice Chairman of the Board; otherwise the Majority
Preferred Holders shall make such selection.
(b) Major Decisions. Subject to clause (c) below, no action
shall be taken, sum expended, decision made or obligation incurred by or on
behalf of the Company with respect to any matter unless approved or ratified by
a majority of the Board. Notwithstanding the foregoing, unless and until
the Board revokes such authority, Glenn McGinnis shall have general authority to
take actions in the ordinary course of business for and on behalf of the
Company, and Mr. McGinnis also may delegate authority to take such actions to
other employees of the Company over which he has supervisory authority;
provided, that, except to the extent set forth on Exhibit A, no such action
shall be taken if such action would constitute a Major Decision. "Major
Decisions" shall mean and consist of the following:
6
<PAGE> 7
(i) granting to any individual the authority to open and
draw checks on bank accounts in the name of the Company or
endorse checks for deposit to such accounts;
(ii) the sale, lease or other disposition of assets of the
Company, other than assets having a fair market value,
individually or in the aggregate with assets sold, leased or
otherwise disposed in a transaction or series of related
transactions, of less than $250,000;
(iii) entering into, terminating or materially modifying
either (i) any material agreement to which the Company is or
hereafter becomes a party or (ii) the Environmental
Compliance Plan;
(iv) approving or incurring any capital expenditure,
purchase or other expenditure of the Company which exceeds in
the aggregate with all other capital expenditures, purchases
or other expenditures during the fiscal year in which such
purchase or expenditure is approved or incurred, $250,000,
unless such capital expenditure, purchase or other
expenditure is identified in the annual or quarterly capital
operating budget of the Company previously approved by the
Board;
(v) the incurrence or assumption of any indebtedness for
borrowed money by, or the repayment (other than in accordance
with the express terms thereof) refinancing of any
indebtedness of, the Company or the granting of any mortgage,
lien or other encumbrance on any of the assets of the Company
or the giving of any guaranty by the Company;
(vi) the (i) entry of an order for relief or other
commencement of a voluntary case under the Bankruptcy code or
any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, (ii) consent to the entry of an
order for relief in an involuntary case or the conversion of
an involuntary case into a voluntary case under any such law,
(iii) consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial
part of the property of the Company or (iv) assignment of the
assets of the Company for the benefit of creditors generally;
(vii) the issuance of any securities of the Company;
(viii) the appointment or termination of the officers or
senior managers of the Company and the establishment of (i)
benefit plans, salaries and bonuses for officers or directors
of the Company and (ii) the organizational structure and
staffing plan, including salary ranges for each position;
(ix) payment of any dividend, distribution, redemption
payment or other payment to the Holders of the Company or the
stockholders;
(x) approval of the annual and quarterly operating
budgets of the Company;
7
<PAGE> 8
(xi) any decision with respect to the principal place of
business of the Company or the fiscal year of the Company;
(xii) any amendment or restatement of the Certificate of
Incorporation or the bylaws of the Company;
(xiii) the entry by the Company into any transaction or
agreement with any Affiliate of the Company;
(xiv) the engagement or retention of outside legal
counsel by the Company; and
(xv) except as otherwise set forth in this Agreement,
such other matters or business as would properly or
customarily be decided by or submitted to the board of
directors of a corporation.
In addition, any action by the Company to materially amend,
modify or supplement any document, instrument, transaction or other matter
described above as a Major Decision shall require the approval of a majority of
the Board if the same as so amended, modified or supplemented would be
inconsistent with the terms previously approved with respect thereto by the
Board.
(c) Minority Rights. (i) prior to the Repurchase Date, unless
a Notes Trigger Event or a Preferred Stock Trigger Event has occurred and is
continuing, any decision to sell all or substantially all of the assets of the
Company shall require the unanimous consent of the Board and (ii) at all times
after the Repurchase Date, unless the TCW Funds have the right to designate the
Fifth Designee to the Board pursuant to Section 4(a), the following actions
shall require the unanimous consent of the Board:
(1) the sale, lease or other disposition of assets
of the Company, other than assets having a fair market
value, individually or in the aggregate with assets sold,
leased or otherwise disposed in a transaction or series
of related transactions, of less than $250,000;
(2) the (i) entry of an order for relief or other
commencement of a voluntary case under the Bankruptcy
code or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or (ii) consent
to the entry of an order for relief in an involuntary
case or the conversion of an involuntary case into a
voluntary case under any such law or (iii) consent to the
appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial party
of the property of the Company or (iv) assignment of the
assets of the Company for the benefit of creditors
generally;
(3) any and all decisions or authorizations with
respect to the amount and type of insurance of the
Refinery;
8
<PAGE> 9
(4) any and all matters relating to the adoption or
modification of or compliance with the environmental
compliance policies of the Company;
(5) any amendment or restatement of the Certificate
of Incorporation or the bylaws of the Company; and
(6) the entry by the Company into any transaction
or agreement with any Affiliate of the Company.
(d) Compensation. Members of the Board shall not be entitled
to any compensation for their service on such Board (other than reimbursement
of reasonable out-of-pocket expenses incurred in connection with Board meetings
or director-related activities for services as a Board member) without the
written consent of Majority Preferred Holders; provided, however, that no
member of the Board who is an employee or officer of (i) the Company, (ii) any
Holder or (iii) any Affiliate of the Company or any Holder shall be entitled to
compensation (other than reimbursement of reasonable out-of-pocket expenses
incurred in connection with Board meetings or director-related activities for
services) as a Board member.
(e) D&O Insurance. The Company shall at all times maintain in
force for the benefit of all directors and officers of the Company coverage from
a reputable insurer selected by the Majority Preferred Holders with coverages
(including, without limitation, commercially available coverages against
environmental liabilities) which are not less than Twenty Five Million Dollars
($25,000,000) and deductibles which are approved by the Majority Preferred
Holders. If the Company shall ever fail to pay when due any premium or other
charge with respect to such insurance coverage, or otherwise fail to renew such
coverage, the Majority Preferred Holders or their Affiliates may pay such
premium or charge, or renew such coverage, and the Company shall promptly
reimburse such Majority Preferred Holders or their Affiliates
(f) Voting Agreement. All parties to this Agreement agree
that this Section 4 shall constitute a voting agreement within the meaning of
Section 218 of the Delaware General Corporation Law.
SECTION 5. CERTIFICATES.
(a) Restrictive Endorsements. Each certificate evidencing any
Securities shall bear a legend in substantially the following form:
"The securities evidenced by this certificate are
subject to a Stockholders Agreement dated as of
December __, 1998, copies of which are on file at
the principal office of the corporation and will be
furnished to the holder on request to the Secretary
of the corporation. Such Stockholders Agreement
provides, among other things, for certain
restrictions on voting, sale, transfer, pledge,
hypothecation or other disposition of the securities
evidenced by this certificate and that such
securities may be subject to purchase upon the
occurrence of certain events."
9
<PAGE> 10
In addition, unless counsel to the Company has advised that such legend is no
longer needed, each certificate evidencing the Securities shall bear a legend
in substantially the following form:
"The securities evidenced by this certificate have
not been registered pursuant to the Securities Act
of 1933, as amended (the "Act"), or any state
securities law, and such securities may not be sold,
transferred or otherwise disposed of unless the same
are registered and qualified in accordance with the
Act and any applicable state securities laws, or in
the opinion of counsel reasonably satisfactory to
the corporation such registration and qualification
are not required."
(b) Replacement Certificates. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of any of its respective certificates evidencing any Securities, and
(in the case of loss, theft or destruction) of indemnity reasonably
satisfactory to it, upon surrender and cancellation of such certificate or
receipt of such indemnity, the Company will execute, register and deliver a new
certificate of like tenor in lieu of such lost, stolen, destroyed or mutilated
certificate.
SECTION 6. EQUITABLE RELIEF. The parties hereto agree and
declare that legal remedies may be inadequate to enforce the provisions of this
Agreement and that equitable relief, including specific performance and
injunctive relief, may be used to enforce such provisions.
SECTION 7. MISCELLANEOUS.
(a) Notices. All notices and other communications provided
for or permitted under this Agreement shall be made in writing by
hand-delivery, certified first-class mail, return receipt requested, next-day
air courier or facsimile, in the case of the case of the Company and TCR
Holding, as follows:
14902 River Road
New Sarpy, LA
70078
Telecopy Number: (504) 764-2359
Attention: Mr. Glenn McGinnis
copies to:
TransAmerican Refining Corporation
1300 North Houston Parkway East, Suite 310
Houston, Texas 77032-2949
Telecopy Number: (281) 986-8865
Attention: Secretary
and
Gardere & Wynne, L.L.P.
1601 Elm Street,
3000 Thanksgiving Tower
Dallas, Texas 75201
Telecopy Number: (214) 999-4667
Attention: C. Robert Butterfield, Esq.
or, if to the Initial Holders of the Preferred Shares, to the addresses listed
below their names on the signature pages hereto and, if to any other Person who
is the registered holder of any Securities, to the address for the purpose of
such holder as it appears in the stock ledger of the Company or at such other
address as such party may have furnished in writing to each other party hereto.
10
<PAGE> 11
Any notice shall be deemed to have been duly given when delivered by hand, if
personally delivered, and if sent by mail, two business days after being
deposited in the mail, postage prepaid.
(b) Amendment. This Agreement may be changed, modified or
amended by a writing signed by TCR Holding and the Majority Preferred Holders;
provided that no such change, modification or amendment shall be enforceable
against any party to this Agreement whose rights or obligations hereunder will
be materially and adversely affected thereby unless the same shall be in writing
and signed by such party.
(c) Waiver. No failure or delay on the part of the parties or
any of them in exercising any right, power or privilege hereunder, nor any
course of dealing between the parties or any of them shall operate as a waiver
of any such right, power or privilege nor shall any single or partial exercise
of any such right, power or privilege preclude the simultaneous or later
exercise of any other right, power or privilege. The rights and remedies herein
expressly provided are cumulative and are not exclusive of any rights or
remedies which the parties or any of them would otherwise have. No notice to or
demand on the Company shall entitle the Company to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the
rights of the other parties or any of them to take any other or further action
in any circumstances without notice or demand.
(d) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(e) Governing Law. This Agreement shall be construed in
accordance with and governed by the internal laws of the State of Delaware
applied to contracts to be made and to be performed therein without giving
effect to the considerations of conflicts of laws.
(f) Filing. A copy of this Agreement and of all amendments
hereto shall be filed at the principal office of the Company.
(g) Termination. This Agreement may be terminated at any time
by an instrument in writing signed by TCR Holding and the Majority Preferred
Holders.
(h) All Securities Subject to this Agreement.
(i) Any Securities now or hereafter held by any Person
shall be held by such Person subject to the transfer and
other restrictions of this Agreement and such Person shall be
deemed to be a "Holder" for all such purposes of this
Agreement;
(ii) A Holder who ceases to own any Securities as
provided for in this Agreement shall cease to be a Holder for
purposes of this Agreement; and
(iii) The provisions of this Agreement shall be deemed to
apply equally to any Security or other equity securities
distributed in respect of the Securities.
11
<PAGE> 12
(i) Benefit and Binding Effect. Except as otherwise provided
in this Agreement, no right under this Agreement shall be assignable and any
attempted assignment in violation of this provision shall be void; provided,
that the Preferred Holders may assign their respective rights under this
Agreement to any Person who (i) is, immediately following such assignment, in
compliance with all of the covenants and agreements applicable to the Preferred
Holders hereunder and (ii) assumes all applicable obligations of the Preferred
Holders under this Agreement. Subject to compliance with the terms of this
Agreement regarding Transfer of Securities, this Agreement shall be binding
upon and inure to the benefit of the parties and their executors,
administrators, personal representatives, heirs, successors and permitted
assigns. Except as set forth in this clause (i), this Agreement does not create
and shall not be construed as creating any rights enforceable by any Person not
a party hereto.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provisions in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
(k) Further Assurances. Each Holder shall cause all Securities
that are entitled to vote and are registered in the name of such Holder to be
voted, and will otherwise take or cause to be taken all such other action as may
be necessary, to implement the provisions of this Agreement and shall not take
any action inconsistent herewith or therewith.
[signature page follows]
12
<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the day and year first above written.
TRANSCONTINENTAL REFINING CORPORATION,
a Delaware corporation
By:
----------------------------------------
Ed Donahue
Vice President
TCR HOLDING CORPORATION, a Delaware
corporation
By:
----------------------------------------
R. Glenn McGinnis
President
THE PREFERRED HOLDERS:
TCW FUNDS: TCW LEVERAGED INCOME TRUST, L.P.
By: TCW ADVISORY (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 Advisory (Bermuda), Ltd.,
as General Partner
By:
----------------------------------------
Name:
Title:
By: TCW Investment Management Company,
as Investment Advisor
By:
----------------------------------------
Name:
Title:
TCW SHARED OPPORTUNITY FUND III, L.P.
By: TCW ASSET 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.
13
<PAGE> 14
At: 11100 Santa Monica Boulevard
Suite 2000
Los Angeles, CA 90025
Attention: Nick Tell
Copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street, 30th Floor
Los Angeles, CA 90017
Attention: Kenneth J. Baronsky
Jefferies: JEFFERIES & COMPANY, INC
By:
----------------------------------------
[NAME]
Authorized Signatory
At: Jefferies & Company, Inc.
11100 Santa Monica Boulevard
10th Floor
Los Angeles, CA 90025
Attention: Joe Maly
Copy to:
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, CA 90071
Attention: Rod Guerra, Jr.
THE OTHER PREFERRED HOLDERS:
- ---------------------------- ---------------------------------------
- ---------------------------- ---------------------------------------
14
<PAGE> 1
EXHIBIT 99.10
=====================================================================
$150,000,000 15% Senior Secured Notes due 2003
INDENTURE
between
TRANSAMERICAN REFINING CORPORATION,
a Texas corporation
as Issuer
and
THE BANK OF NEW YORK,
as Trustee
Dated as of December __, 1998
=====================================================================
<PAGE> 2
<TABLE>
<CAPTION>
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
<S> <C>
310 (a)(1) .......................................................... 7.10
(a)(2) .......................................................... 7.10
(a)(3) .......................................................... N.A.
(a)(4) .......................................................... N.A.
(a)(5) .......................................................... 7.10
(b) .......................................................... 7.8; 7.10
(c) .......................................................... N.A.
311 (a) .......................................................... 7.11
(b) .......................................................... 7.11
(c) .......................................................... N.A.
312 (a) .......................................................... 2.5
(b) .......................................................... 12.3
(c) .......................................................... 12.3
313 (a) .......................................................... 7.6
(b)(1) .......................................................... 7.6
(b)(2) .......................................................... 7.6
(c) .......................................................... 7.6; 12.2
(d) .......................................................... 7.6
314 (a) .......................................................... 4.7; 4.8; 12.2
(b) .......................................................... 11.2(b)
(c)(1) .......................................................... 2.2; 7.2; 11.4(b);
.......................................................... 12.4
(c)(2) .......................................................... 7.2; 11.4(b); 12.4
(c)(3) .......................................................... N.A.
(d) .......................................................... 11.2(b); 11.4(b)
(e) .......................................................... 12.5
(f) .......................................................... N.A.
315 (a) .......................................................... 7.1(b)
(b) .......................................................... 7.5; 12.2
(c) .......................................................... 7.1(a)
(d) .......................................................... 6.11; 7.1(c)
(e) .......................................................... 6.13
316 (a)(last sentence)...................................................... 2.9
(a)(1)(A) .......................................................... 6.11
(a)(1)(B) .......................................................... 6.12
(a)(2) .......................................................... N.A.
(b) .......................................................... 6.12; 6.8
(c) .......................................................... 9.4; 10.5
317 (a)(1) .......................................................... 6.3
(a)(2) .......................................................... 6.4
(b) .......................................................... 2.4
318 (a) .......................................................... 12.1
</TABLE>
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N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of this Indenture.
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Article I DEFINITIONS AND INCORPORATION BY REFERENCE.........................................1
Section 1.1 Definitions............................................................1
Section 1.2 Incorporation by Reference of TIA.....................................26
Section 1.3 Rules of Construction.................................................26
Article II THE NOTES........................................................................27
Section 2.1 Form and Dating.......................................................27
Section 2.2 Execution and Authentication..........................................27
Section 2.3 Registrar and Paying Agent............................................28
Section 2.4 Paying Agent to Hold Assets in Trust..................................29
Section 2.5 Noteholder Lists......................................................29
Section 2.6 Transfer and Exchange of Definitive Notes.............................29
Section 2.7 Replacement Notes.....................................................33
Section 2.8 Outstanding Notes.....................................................33
Section 2.9 Treasury Notes........................................................34
Section 2.10 Temporary Notes.......................................................34
Section 2.11 Cancellation..........................................................34
Section 2.12 Defaulted Interest....................................................34
Section 2.13 Computation of Interest...............................................35
Section 2.14 Legends...............................................................35
Section 2.15 PIK Notes.............................................................36
Section 2.16 Additional Notes......................................................36
Article III REDEMPTION......................................................................37
Section 3.1 Right of Redemption...................................................37
Section 3.2 Notices to Trustee....................................................37
Section 3.3 Selection of Notes to Be Redeemed.....................................37
Section 3.4 Notice of Redemption..................................................37
Section 3.5 Effect of Notice of Redemption........................................38
Section 3.6 Deposit of Redemption Price...........................................39
Section 3.7 Notes Redeemed in Part................................................39
Article IV COVENANTS........................................................................39
Section 4.1 Payment of Notes......................................................39
Section 4.2 Maintenance of Office or Agency.......................................40
Section 4.3 Limitation on Restricted Payments.....................................40
Section 4.4 Corporate Existence...................................................41
Section 4.5 Payment of Taxes and Other Claims.....................................42
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Section 4.6 Maintenance of Properties and Insurance...............................42
Section 4.7 Compliance Certificate; Notice of Default.............................43
Section 4.8 Commission Reports....................................................43
Section 4.9 Limitation on Status as Investment Company or Public Utility Company..44
Section 4.10 Limitation on Transactions with Related Persons.......................44
Section 4.11 Limitation on Incurrences of Additional Debt and Issuances of Disqualified
Capital Stock.........................................................45
Section 4.12 Limitations on Restricting Subsidiary Dividends.......................47
Section 4.13 Limitation on Liens...................................................48
Section 4.14 Waiver of Stay; Extension or Usury Laws...............................48
Section 4.15 Separate Existence and Formalities....................................49
Section 4.16 [INTENTIONALLY OMITTED]...............................................50
Section 4.17 Repurchase of Notes at the Option of the Holder Upon a
Change of Control ....................................................50
Section 4.18 Minimum Consolidated Adjusted EBITDA..................................51
Section 4.19 Guarantee by Subsidiaries.............................................51
Section 4.20 Limitation on Asset Sales.............................................52
Section 4.21 Limitation on Line of Business........................................53
Section 4.22 Automatic Payment Upon Completion of Phase II.........................53
Section 4.23 Event of Loss.........................................................54
Section 4.24 Compliance with Environmental Laws....................................55
Section 4.25 Maintenance of Rights.................................................56
Section 4.26 Use of Proceeds.......................................................56
Section 4.27 Independent Engineer..................................................56
Section 4.28 Amendments, Waivers and Enforcement of Certain Agreements.............56
Section 4.29 Modifications of Charter Documents....................................57
Section 4.30 Capital Expenditures..................................................57
Section 4.31 Notice of Default.....................................................57
Section 4.32 Limitation on Issuance of Preferred Stock by Subsidiaries.............57
Article V SUCCESSOR CORPORATION.............................................................57
Section 5.1 When the Company and its Subsidiaries May Merge, Etc..................57
Section 5.2 Successor Corporation Substituted.....................................58
Article VI EVENTS OF DEFAULT AND REMEDIES...................................................59
Section 6.1 Events of Default.....................................................59
Section 6.2 Acceleration of Maturity Date; Rescission and Annulment...............61
Section 6.3 Collection of Indebtedness and Suits for Enforcement by Trustee.......62
Section 6.4 Trustee May File Proofs of Claim......................................63
Section 6.5 Trustee May Enforce Claims Without Possession of Notes................63
Section 6.6 Priorities............................................................64
Section 6.7 Limitation on Suits...................................................64
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Section 6.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest .............................................................65
Section 6.9 Rights and Remedies Cumulative........................................65
Section 6.10 Delay or Omission Not Waiver..........................................65
Section 6.11 Control by Holders....................................................65
Section 6.12 Waiver of Past Default................................................66
Section 6.13 Undertaking for Costs.................................................66
Section 6.14 Restoration of Rights and Remedies....................................66
Article VII TRUSTEE.........................................................................67
Section 7.1 Duties of Trustee.....................................................67
Section 7.2 Rights of Trustee.....................................................68
Section 7.3 Individual Rights of Trustee..........................................69
Section 7.4 Trustee's Disclaimer..................................................69
Section 7.5 Notice of Default.....................................................69
Section 7.6 Reports by Trustee to Holders.........................................69
Section 7.7 Compensation and Indemnity............................................70
Section 7.8 Replacement of Trustee................................................71
Section 7.9 Successor Trustee by Merger, Etc......................................72
Section 7.10 Eligibility; Disqualification.........................................72
Section 7.11 Preferential Collection of Claims against Company.....................72
Section 7.12 No Bond...............................................................72
Section 7.13 Condition to Action...................................................72
Section 7.14 Investment............................................................72
Article VIII SATISFACTION AND DISCHARGE.....................................................73
Section 8.1 [INTENTIONALLY OMITTED]...............................................73
Section 8.2 Termination of Obligations Upon Cancellation of the Notes.............73
Section 8.3 Survival of Certain Obligations.......................................73
Section 8.4 Acknowledgment of Discharge by Trustee................................73
Section 8.5 [INTENTIONALLY OMITTED]...............................................73
Section 8.6 [INTENTIONALLY OMITTED]...............................................73
Section 8.7 Reinstatement.........................................................73
Article IX AMENDMENTS, SUPPLEMENTS AND WAIVERS..............................................74
Section 9.1 Supplemental Indentures Without Consent of Holders....................74
Section 9.2 Amendments, Supplemental Indentures and Waivers with Consent
of Holders............................................................75
Section 9.3 Compliance with TIA...................................................76
Section 9.4 Revocation and Effect of Consents.....................................76
Section 9.5 Notation on or Exchange of Notes......................................77
Section 9.6 Trustee to Sign Amendments, Etc.......................................77
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Article X MEETINGS OF NOTEHOLDERS...........................................................77
Section 10.1 Purposes for Which Meetings May Be Called.............................77
Section 10.2 Manner of Calling Meetings............................................78
Section 10.3 Call of Meetings by Company or Holders................................78
Section 10.4 Who May Attend and Vote at Meetings...................................78
Section 10.5 Regulations May Be Made by Trustee; Conduct of the Meeting; Voting
Rights; Adjournment...................................................79
Section 10.6 Voting at the Meeting and Record to Be Kept...........................79
Section 10.7 Exercise of Rights of Trustee or Noteholders May Not Be Hindered
or Delayed by Call of Meeting.........................................80
Article XI SECURITY.........................................................................80
Section 11.1 Grant of Security Interest............................................80
Section 11.2 Recording; Opinions of Counsel........................................80
Section 11.3 Disposition of Certain Collateral Without Requesting Release..........81
Section 11.4 Requesting Release of Collateral......................................82
Section 11.5 Substitute Collateral Other Than Cash Collateral......................84
Section 11.6 Release Upon Satisfaction and Discharge of this Indenture.............85
Section 11.7 Reliance on Opinion of Counsel........................................85
Section 11.8 Purchaser May Rely....................................................85
Section 11.9 Payment of Expenses...................................................85
Section 11.10 Trustee's Duties......................................................86
Section 11.11 Authorization of Actions to be Taken by the Trustee Under the Security
Documents.............................................................86
Article XII MISCELLANEOUS...................................................................87
Section 12.1 TIA Controls..........................................................87
Section 12.2 Notices...............................................................87
Section 12.3 Communications by Holders with Other Holders..........................88
Section 12.4 Certificate and Opinion as to Conditions Precedent....................88
Section 12.5 Statements Required in Certificate or Opinion.........................88
Section 12.6 Rules by Trustee, Paying Agent, Registrar.............................89
Section 12.7 Legal Holidays........................................................89
Section 12.8 Governing Law.........................................................89
Section 12.9 No Adverse Interpretation of Other Agreements.........................89
Section 12.10 No Recourse against Others............................................90
Section 12.11 Successors............................................................90
Section 12.12 Duplicate Originals...................................................90
Section 12.13 Severability..........................................................90
Section 12.14 Table of Contents, Headings, Etc......................................90
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SIGNATURES .................................................................................90
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Certificate of Transferor
Exhibit C - Form of Mortgage
Exhibit D - Form of Security Agreement
Exhibit E - Company's Board Resolutions
Exhibit F - Form of Construction Collateral and Disbursement Agreement
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of this Indenture.
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INDENTURE, dated as of December __ , 1998, between TRANSAMERICAN
REFINING CORPORATION, a Texas corporation (together with its successors and
permitted assigns, the "COMPANY"), and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee.
Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Company's 15%
Senior Secured Notes due 2003:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"ACCELERATION NOTICE" shall have the meaning specified in Section 6.2.
"ADDITIONAL NOTES" shall have the meaning specified in Section 2.16.
"ADJUSTED CONSOLIDATED NET INCOME" of any Person for any period means
the net income (loss) of such Person and its consolidated Subsidiaries for such
period, determined in accordance with GAAP, excluding (without duplication) (i)
all extraordinary gains, (ii) the net income, if positive, of any other Person,
other than a consolidated Subsidiary, in which such Person or any of its
consolidated Subsidiaries has an interest, except to the extent of the amount of
any dividends or distributions actually paid in cash to such Person or a
consolidated Subsidiary of such Person during such period, (iii) the net income,
if positive, of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition and (iv) the net income, if
positive, of any Subsidiary of such Person to the extent that the declaration or
payment of dividends or similar distributions is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule, or governmental regulation applicable to such
Subsidiary.
"ADJUSTED NET ASSETS" of a Guarantor means the lesser of (a) the amount
by which the Guarantor's Property, at a fair valuation, exceeds the sum of its
debts (including unliquidated or contingent debts), (b) the amount by which the
present fair salable value of the Guarantor's assets exceeds the amount that
will be required to pay its probable liability on its existing debts as they
become absolute and matured, (c) the amount by which the Guarantor's assets
exceed the maximum amount that would constitute unreasonably small capital for
its business or (d) the amount by which the Guarantor's assets exceed the amount
that such Guarantor should reasonably retain to pay its debts (including
unliquidated or contingent debts) as they mature.
"AFFILIATE" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with, such specified Person or (ii) any officer,
director or controlling shareholder of such other Person. For purposes of this
definition, the term "control" means (a) the power to direct the management and
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policies of a Person, directly or through one or more intermediaries, whether
through the ownership of voting securities, by contract, or otherwise, or (b)
without limiting the foregoing, the beneficial ownership of 5% or more of the
voting power of the voting common equity of such Person (on a fully diluted
basis) or of warrants or other rights to acquire such equity (regardless of
whether presently exercisable). Notwithstanding the foregoing, none of the
Holders shall be deemed "Affiliates" of the Company or any of its Subsidiaries.
"AGENT" means any Registrar, Paying Agent or co-Registrar.
"APPRAISAL" means, when used with respect to the valuation of any
Property, an appraisal prepared by an Appraiser as to the Appraised Value of
such Property.
"APPRAISED VALUE" means, with respect to any Property at any date, the
then current fair market value of such Property as set forth in the most recent
Appraisal.
"APPRAISER" means an independent appraiser of national recognition
qualified to appraise the Property appraised.
"ASBESTOS" shall have the meaning provided under any relevant
Environmental Laws and shall include, without limitation, asbestos fibers and
friable asbestos, as such terms are defined under the relevant Environmental
Laws.
"ASSET SALE" means any direct or indirect conveyance, sale, transfer or
other disposition, excluding through damage or destruction for which Insurance
Proceeds are paid or by condemnation, in one transaction or a series of related
transactions, of any of the properties, businesses or assets of the Company or
any Subsidiary of the Company, whether owned on the Issue Date or thereafter
acquired; provided, however, that "Asset Sale" shall not include any pledge or
disposition of assets (if such pledge or disposition would otherwise constitute
an Asset Sale) to the extent and only to the extent that it results in the
creation of a Permitted Lien or in connection with the Transaction on the Issue
Date.
"ASSET SALE AGREEMENTS" means the agreement pursuant to which TARC
transfers certain assets and liabilities to TCR Holding and TCR Holding
transfers certain assets and liabilities to TransContinental, made as part of
the Transaction on the Issue Date.
"ATTRIBUTABLE DEBT" in respect of a Sale and Leaseback Transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP or,
in the event that such rate of interest is not reasonably determinable,
discounted at the rate of interest borne by the Notes) of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such Sale and Leaseback Transaction (including any period for which such
lease has been extended or may, at the option of the lessor, be extended).
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar Federal, state
or foreign law for the relief of debtors.
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"BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person or any committee of the Board of Directors of such
Person authorized, with respect to any particular matter, to exercise the power
of the Board of Directors of such Person.
"BOARD RESOLUTION" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person.
"BORROWING BASE" means, as of any date, an amount equal to the sum of
(a) 90% of the book value of all accounts receivable owned by the Company and
its Subsidiaries (excluding any accounts receivable that are more than 90 days
past due, less (without duplication) the allowance for doubtful accounts
attributable to such current accounts receivable) calculated on a consolidated
basis and in accordance with GAAP and (b) 85% of the current market value of all
inventory owned by the Company and its Subsidiaries as of such date. To the
extent that information is not available as to the amount of accounts receivable
and inventory as of a specific date, the Company may utilize, to the extent
reasonable, the most recent available information for purposes of calculating
the Borrowing Base.
"BUDGET" shall have the meaning given to such term in the Construction
Collateral and Disbursement Agreement.
"BUSINESS DAY" means a day that is not a Legal Holiday in New York,
Louisiana, Texas or California.
"CAPITAL EXPENDITURES" of a Person means expenditures (whether paid in
cash or accrued as a liability) by such Person or any of its Subsidiaries that,
in conformity with GAAP, are or would be included in "capital expenditures,"
"additions to Property, plant, or equipment" or comparable items in the
consolidated financial statements of such Person consistent with prior
accounting practices.
"CAPITAL IMPROVEMENT PROGRAM" means the expansion and improvement
program of the Company as described in the Offering Circular under the heading
"Business -- Capital Improvement Program" as such program subsequently may be
modified or expanded by the Company in a manner determined by the Board of
Directors of the Company, in their judgment as reflected in a Board Resolution,
to improve the potential cash flow of the Company.
"CAPITAL STOCK" means, with respect to any Person, any capital stock of
such Person and shares, interests, participations, or other ownership interests
(however designated) of such Person and any rights (other than debt securities
convertible into corporate stock), warrants or options to purchase any of the
foregoing, including without limitation, each class of common stock and
preferred stock of such Person, if such Person is a corporation, and each
general or limited partnership interest or other equity interest of such Person,
if such Person is a partnership.
"CAPITALIZED LEASE OBLIGATION" means obligations under a lease that are
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of Debt represented by such obligations shall be the
capitalized amount of such obligations, as determined in accordance with GAAP.
"CASH" means U.S. Legal Tender.
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"CASH EQUIVALENTS" means (a) United States dollars, (b) securities
issued, or directly and fully guaranteed or insured, by the United States
government or any agency or instrumentality thereof having maturities of not
more than one year from the date of acquisition, (c) certificates of deposit
with maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year, and overnight bank deposits,
in each case, with any Eligible Institution, (d) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clauses (b) and (c) entered into with any Eligible Institution, (e)
commercial paper rated "P-1," "A-1" or the equivalent thereof by Moody's
Investors Service, Inc. or Standard & Poor's Corporation, Inc., respectively,
and in each case maturing within one year after the date of acquisition, (f)
shares of money market funds, including those of the Trustee, that invest solely
in United States dollars and securities of the types described in clauses (a)
through (e), (g) demand and time deposits and certificates of deposit not
meeting the qualifications specified in clause (c) above with any commercial
bank organized in the United States or an Eligible Institution; provided that
such deposits and certificates support bonds, letters of credit and other
similar types of obligations are incurred in the ordinary course of business,
(h) deposits, including deposits denominated in foreign currency, with any
Eligible Institution, provided that all such deposits do not exceed $10,000,000
in the aggregate at any one time, and (i) demand or fully insured time deposits
used in the ordinary course of business with commercial banks insured by the
Federal Deposit Insurance Corporation.
"CHANGE OF CONTROL" means (i) the liquidation or dissolution of, or the
adoption of a plan of liquidation by, the Company or (ii) any transaction, event
or circumstance pursuant to which any "person" or "group" (as such terms are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or
not applicable), other than TCR Holding, Trust Company of the West or Jefferies
& Company, Inc. or any of their respective Affiliates, is or becomes the
"beneficial owner" (as that term is used in Rules 13d-3 and 13d-5 under the
Exchange Act, whether or not applicable), directly or indirectly, of more than
50% of the total voting power of the Company's then outstanding Voting Stock;
provided that the transactions contemplated by the Transaction to occur on the
Issue Date will be deemed not to constitute a Change of Control.
"CHANGE OF CONTROL OFFER" shall have the meaning specified in Section
4.17.
"CHANGE OF CONTROL PAYMENT DATE" shall have the meaning specified in
Section 4.17.
"CHANGE OF CONTROL PURCHASE PRICE" shall have the meaning specified in
Section 4.17.
"CLOSING DATE" shall mean December 15, 1998.
"COLLATERAL" means (x) the assets of the Company that are mortgaged or
pledged to the Trustee as security for the Notes or in which a security interest
is otherwise granted in accordance with the Security Documents and (y) the
assets of the Guarantors that are mortgaged or pledged to the Trustee as
security for the Guarantees; subject to the release and subordination provisions
in Section 11.
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"COMMISSION" means the Securities and Exchange Commission and any
successor agency thereof.
"COMMON STOCK" means the TransContinental's common stock, $0.01 par
value.
"COMPANY" means the party named as such in this Indenture until a
successor or permitted assign replaces it pursuant to this Indenture (including,
without limitation, TransContinental, upon consummation of the Transaction on
the Issue Date and the transactions contemplated by the Asset Sale Agreements)
and thereafter means such successor or permitted assign.
"COMPANY ORDER" means a written request or order signed in the name of
the Company by any one of its Chairman of the Board, its President or a Vice
President (regardless of vice presidential designation), and by any one of its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"CONSOLIDATED ADJUSTED EBITDA" of any Person for any period, unless
otherwise provided herein, means (a) the Consolidated Net Income of such Person
for such period minus the amount that the Board of Directors of the Company
reasonably determines to have constituted Maintenance Capital Expenditures for
such period, plus (b) the sum, without duplication (and only to the extent such
amounts are deducted from net revenues in determining such Consolidated Net
Income), of (i) the provision for income taxes for such period for such Person
and its consolidated Subsidiaries, (ii) depreciation, depletion, and
amortization of such Person and its consolidated Subsidiaries (but not in excess
of such Person's pro rata share of depreciation, depletion and amortization of
any such Subsidiary) for such period and (iii) Consolidated Fixed Charges of
such Person for such period, determined, in each case, on a consolidated basis
for such Person and its consolidated Subsidiaries in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" on any date (the "TRANSACTION
DATE") means, with respect to any Person, the ratio, on a pro forma basis, of
(i) the aggregate amount of Consolidated Adjusted EBITDA of such Person
(attributable to continuing operations and businesses and exclusive of the
amounts attributable to operations and businesses discontinued or disposed of,
on a pro forma basis as if such operations and businesses were discontinued or
disposed of on the first day of the Reference Period) for the Reference Period
to (ii) the aggregate Consolidated Fixed Charges of such Person (exclusive of
amounts attributable to discontinued operations and businesses on a pro forma
basis as if such operations and businesses were discontinued or disposed of on
the first day of the Reference Period, but only to the extent that the
obligations giving rise to such Consolidated Fixed Charges would no longer be
obligations contributing to such Person's Consolidated Fixed Charges subsequent
to the Transaction Date) during the Reference Period; provided, that for
purposes of such computation, in calculating Consolidated Adjusted EBITDA and
Consolidated Fixed Charges, (a) the transaction giving rise to the need to
calculate the Consolidated Fixed Charge Coverage Ratio shall be assumed to have
occurred on the first day of the Reference Period, (b) the incurrence of any
Debt or issuance of Disqualified Capital Stock or the retirement of any Debt or
Disqualified Capital Stock during the Reference Period or subsequent thereto and
on or prior to the Transaction Date shall be assumed to have occurred on the
first day of such Reference Period
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and (c) Consolidated Interest Expense attributable to any Debt (whether existing
or being incurred) bearing a floating interest rate shall be computed as if the
rate in effect on the Transaction Date had been the applicable rate for the
entire period, unless such Person or any of its Subsidiaries is a party to a
Swap Obligation (that remains in effect for the 12-month period after the
Transaction Date) that has the effect of fixing the interest rate on the date of
computation, in which case such rate (whether higher or lower) shall be used.
"CONSOLIDATED FIXED CHARGES" of any Person for any period means (without
duplication) the sum of (i) Consolidated Interest Expense of such Person for
such period, (ii) dividend requirements of such Person and its consolidated
Subsidiaries (whether in cash or otherwise (except dividends payable solely in
shares of Qualified Capital Stock)) with respect to Preferred Stock paid,
accrued, or scheduled to be paid or accrued during such period, in each case to
the extent attributable to such period and excluding items eliminated in
consolidation and (iii) fees paid, accrued, or scheduled to be paid or accrued
during such period by such Person and its Subsidiaries in respect of performance
bonds or other guarantees of payment. For purposes of clause (ii) above,
dividend requirements shall be increased to an amount representing the pre-tax
earnings that would be required to cover such dividend requirements;
accordingly, the increased amount shall be equal to a fraction, the numerator of
which is such dividend requirements and the denominator of which is one minus
the applicable actual combined effective Federal, state, local, and foreign
income tax rate of such Person and its Subsidiaries (expressed as a decimal), on
a consolidated basis, for the fiscal year immediately preceding the date of the
transaction giving rise to the need to calculate Consolidated Fixed Charges.
"CONSOLIDATED INTEREST EXPENSE" of any Person means, for any period, the
aggregate interest (without duplication), whether expensed or capitalized, paid,
accrued, or scheduled to be paid or accrued during such period in respect of all
Debt of such Person and its consolidated Subsidiaries (including (i)
amortization of deferred financing costs and original issue discount and
non-cash interest payments or accruals, (ii) the interest portion of all
deferred payment obligations, calculated in accordance with the effective
interest method and (iii) all commissions, discounts, other fees, and charges
owed with respect to letters of credit and banker's acceptance financing and
costs associated with Swap Obligations, in each case to the extent attributable
to such period) determined on a consolidated basis in accordance with GAAP. For
purposes of this definition, (x) interest on a Capitalized Lease Obligation
shall be deemed to accrue at an interest rate reasonably determined to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP (including Statement of Financial Accounting Standards No. 13 of the
Financial Accounting Standards Board), and (y) Consolidated Interest Expense
attributable to any Debt represented by the guarantee by such Person or a
Subsidiary of such Person other than with respect to Debt of such Person or a
Subsidiary of such Person shall be deemed to be the interest expense
attributable to the item guaranteed.
"CONSOLIDATED NET INCOME" of any Person for any period means the net
income (loss) of such Person and its consolidated Subsidiaries for such period,
determined in accordance with GAAP, excluding (without duplication) (i) all
extraordinary, unusual and nonrecurring gains (but not losses), including,
without limitation gains (but not losses) arising from Asset Sales, Sale and
Leaseback Transactions, dispositions of securities and extinguishment of Debt,
(ii) the net income, if positive, of any other Person, other than a consolidated
Subsidiary, in which such
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Person or any of its consolidated Subsidiaries has an interest, except to the
extent of the amount of any dividends or distributions actually paid in cash to
such Person or a consolidated Subsidiary of such Person during such period, but
not in excess of such Person's pro rata share of such other Person's aggregate
net income earned during such period or earned during the immediately preceding
period and not distributed during such period, (iii) the net income, if
positive, of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition and (iv) the net income, if
positive, of any Subsidiary of such Person to the extent that the declaration or
payment of dividends or similar distributions is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule, or governmental regulation applicable to such
Subsidiary.
"CONSTRUCTION COLLATERAL AND DISBURSEMENT AGREEMENT" means the
Construction Collateral and Disbursement Agreement of even date with this
Indenture among the Company, the securities intermediary, the Trustee, the
Disbursement Agent and the Independent Engineer, as amended, supplemented or
otherwise modified from time to time in accordance with the terms of this
Indenture and the other Security Documents.
"CONSTRUCTION DISBURSEMENT ACCOUNT" means that certain account, to be
maintained by the Disbursement Agent pursuant to the terms of the Construction
Collateral and Disbursement Agreement, into which the net proceeds will be
deposited from (i) the sale of the Notes, (ii) in certain circumstances the Port
Commission Bond Financing and (iii) any other financing (other than purchase
money financing) conducted by the Company for the purpose of completion of Phase
I and Phase II, except in the case of the foregoing clauses (ii) and (iii) to
the extent such proceeds are set aside to fund a reserve required by the terms
of such financing.
"CRUDE UNIT" means the No. 2 Crude Unit constructed as part of the
Capital Improvement Program.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEBT" means, with respect to any Person, without duplication (i) all
liabilities, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (b) evidenced by bonds, notes, debentures,
or similar instruments or letters of credit or representing the deferred and
unpaid balance of the purchase price of any Property acquired by such Person or
services received by such Person (other than long-term service or supply
contracts which require minimum periodic payments), (c) evidenced by bankers'
acceptances or similar instruments issued or accepted by banks or Swap
Obligations, (d) for the payment of money relating to a Capitalized Lease
Obligation and (e) the Attributable Debt associated with any Sale and Leaseback
Transaction; (ii) reimbursement obligations of such Person with respect to
letters of credit; (iii) all liabilities of others of the kind described in the
preceding clause (i) or (ii) that such Person has guaranteed or that is
otherwise its legal liability (to the extent of such guaranty or other legal
liability) other than for endorsements, with recourse, of negotiable instruments
in the ordinary course of business; (iv) all obligations secured by a Lien
(other than Permitted Liens, except to the extent the obligations secured by
such Permitted Liens are otherwise included in
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<PAGE> 15
clause (i), (ii) or (iii) of this definition and are obligations of such Person)
to which the Property or assets (including, without limitation, leasehold
interests and any other tangible or intangible property rights) of such Person
are subject, regardless of whether the obligations secured thereby shall have
been assumed by or shall otherwise be such Person's legal liability (but, if
such obligations are not assumed by such Person or are not otherwise such
Person's legal liability, the amount of such Debt shall be deemed to be limited
to the fair market value of such Property or assets determined as of the end of
the preceding fiscal quarter); and (v) any and all deferrals, renewals,
extensions, refinancings, and refundings (whether direct or indirect) of, or
amendments, modifications, or supplements to, any liability of the kind
described in any of the preceding clauses (i) through (iv) regardless of whether
between or among the same parties.
"DEFAULT" means an event or condition, the occurrence of which is, or
with the lapse of time or giving of notice or both would be, an Event of
Default.
"DEFAULTED INTEREST" shall have the meaning specified in Section 2.12.
"DEFINITIVE NOTES" means Notes that are in the form of the Notes
attached hereto as Exhibit A, and that do not include the information called for
by footnotes 1 and 2 thereof.
"DELAYED COKING UNIT" means the delayed coking unit being constructed as
part of the Capital Improvement Program.
"DEPOSITORY" means the Person specified in Section 2.3 as the Depository
with respect to the Notes issuable in global form, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"DIRECT PURCHASERS" means the Holders who purchase the Notes on the
Issue Date directly from the Company.
"DISBURSEMENT AGENT" means The Bank of New York, together with its
successors in such capacity.
"DISQUALIFIED CAPITAL STOCK" means, with respect to any Person, any
Capital Stock of such Person or its Subsidiaries that, by its terms or by the
terms of any security into which it is convertible or exchangeable, is, or upon
the happening of an event or the passage of time would be, required to be
redeemed or repurchased by such Person or its subsidiaries, including at the
option of the holder, in whole or in part, or has, or upon the happening of an
event or passage of time would have, a redemption or similar payment due, on or
prior to December 1, 2003.
"DTC" means The Depository Trust Company.
"ELIGIBLE INSTITUTION" means a commercial banking institution that has
combined capital and surplus of not less than $250,000,000 and that is rated "A"
(or higher) according to Moody's Investors Service, Inc. or Standard & Poor's
Corporation, Inc. at the time as of which any Investment or rollover of any
Investment therein is made.
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<PAGE> 16
"ENVIRONMENTAL APPROVALS" means Governmental Approvals required under
applicable Environmental Laws.
"ENVIRONMENTAL LAWS" means any and all Federal, state and local Laws (as
well as obligations, duties and requirements to avoid liability under common
law) relating to: (a) emissions, discharges, spills, releases or threatened
releases of pollutants, contaminants, Hazardous Materials, materials containing
Hazardous Materials or hazardous or toxic materials or wastes into ambient air,
surface water, groundwater, watercourses, publicly or privately-owned treatment
works, drains, sewer systems, wetlands, septic systems or onto land surface or
subsurface strata; (b) the use, treatment, storage, disposal, handling,
manufacturing, transportation or shipment of Hazardous Materials, materials
containing Hazardous Materials or hazardous and/or toxic wastes, materials,
substances, products or by-products (or of equipment or apparatus containing
Hazardous Materials); (c) pollution or the protection of human health, the
environment or natural resources; or (d) zoning and land use.
"EQUIPMENT" means and includes all of the Company's or any of its
Subsidiaries' now owned or hereafter acquired Vehicles, rolling stock and
related equipment, construction equipment and other assets accounted for as
equipment by the Company or its Subsidiaries in its financial statements, all
proceeds thereof (from insurance or otherwise), and all documents of title,
books, records, ledger cards, files, correspondence and computer files, tapes,
disks and related data processing software that at any time evidence or contain
information relating to the foregoing; provided that "Equipment" shall not
include any assets constituting part of the Company's Refinery or fixed assets
used in the Company's processing or storage operations.
"EVENT OF DEFAULT" shall have the meaning specified in Section 6.1.
"EVENT OF LOSS" means, with respect to any Collateral, any of the
following: (i) any loss, destruction or damage of such Property or asset; (ii)
any actual condemnation, seizure or taking by exercise of the power of eminent
domain or otherwise of such Property or asset, or confiscation of such Property
or asset or the requisition of the use of such Property or asset; or (iii) any
settlement in lieu of clause (ii) above or with respect to the institution of
any proceedings for any such condemnation, seizure, taking, confiscation or
requisition.
"EVENT OF LOSS OFFER" shall have the meaning specified in Section 4.23.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Commission thereunder.
"EXCHANGE AND REGISTRATION RIGHTS AGREEMENT" means the Exchange and
Registration Rights Agreement entered into among TARC, TCR Holding, certain
holders of Capital Stock of TCR Holding and TransContinental Participating
Preferred Stock dated as of the Issue Date.
"EXCHANGE OFFER" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes.
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<PAGE> 17
"EXPENSE REIMBURSEMENT AGREEMENT" means the Expense Reimbursement
Agreement among TEC, TARC, TCR Holding and TransContinental.
"FIRST LIEN DEBT" means any Debt or other obligation secured by a
Permitted Lien described in clause (c), (d), (f), (g), (h), (i), (j), (l), (n),
(o), (p) (to the extent that the Incurrence of the Permitted Lien to which such
clause (p) relates is one of the other clauses listed here), (q) and (t) of the
definition of "Permitted Liens," including, in each case, any refinancings
thereof.
"FLUID CATALYTIC CRACKING UNIT " means the MSCC(sm) Fluid Catalytic
Cracking Unit being constructed as part of the Capital Improvement Program.
"GAAP" means generally accepted accounting principles as in effect in
the United States on the Issue Date applied on a basis consistent with that used
in the preparation of the audited financial statements of the Company
incorporated by reference in the Offering Circular.
"GLOBAL NOTE" means a Note in the form of the Note attached hereto as
Exhibit A and that contains the paragraph referred to in footnote 1 and the
additional schedule referred to in footnote 2.
"GOVERNMENTAL APPROVALS" means any authorization, application, consent,
approval, order, consent decree, license, franchise, lease, ruling, permit,
tariff, rate, certification, exemption, filing or registration by or with any
Governmental Authority (including, without limitation, Environmental Approvals,
zoning variances, special exceptions and non-conforming uses) relating to the
construction, ownership, operation or maintenance of the Refinery.
"GOVERNMENTAL AUTHORITY" means any government, governmental or
quasi-governmental department, ministry, commission, board, bureau, agency,
regulatory authority, instrumentality of any government (central or local),
judicial, legislative or administrative body, domestic or foreign, federal,
state or local, having jurisdiction over the Person or matter in question.
"GUARANTEE" means any guarantee of the obligations of the Company under
this Indenture by any Guarantor.
"GUARANTOR" means each of TransContinental's Subsidiaries that becomes a
guarantor of the Notes in compliance with the provisions of this Indenture.
"HAZARDOUS MATERIALS" means (i) hazardous materials, hazardous wastes,
hazardous substances, extremely hazardous wastes, restricted hazardous wastes,
toxic substances, toxic pollutants, contaminants, pollutants or words of similar
import, as used under Environmental Laws, including but not limited to the
following: the Hazardous Materials Transportation Act, 49 U.S.C. 5101 et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. 9601 et seq., the Federal Water Pollution Control Act, 33 U.S.C. 1251 et
seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Toxic Substances
Control Act, 15 U.S.C. 2601 et seq., the Safe
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<PAGE> 18
Drinking Water Act, 42 U.S.C. Section 300f et seq., and the Oil Pollution Act,
33 U.S.C. Section 2701 et seq., as each may be amended from time to time, and
their state and local counterparts or equivalents; (ii) petroleum, petroleum
products, by-products and wastes, including crude oil and any fractions thereof;
(iii) natural gas, synthetic gas and any mixtures or liquids thereof; (iv)
Asbestos and/or any material which contains any hydrated mineral silicate,
whether friable or nonfriable; (v) polychlorinated biphenyls ("PCBs"), or
PCB-containing materials or fluids; (vi) radon; (vii) any other hazardous
radioactive, toxic or noxious substance, material, pollutant, or solid, liquid
or gaseous waste; and (viii) any substance that, whether by its nature or its
use, is subject to regulation under any Environmental Law or with respect to
which any Federal, state or local Environmental Law or governmental agency
requires environmental investigation, monitoring or remediation.
"HDS UNIT" means the hydrodesulfurization unit being constructed as part
of the Capital Improvement Program.
"HOLDER" means the Person in whose name a Note is registered on the
Registrar's books.
"INCUR" or, as appropriate, "INCURRENCE" shall have the meaning
specified in Section 4.11.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"INDEPENDENT ENGINEER" means Turner, Mason & Company and any successor
independent engineer appointed in accordance with the terms of the Construction
Collateral and Disbursement Agreement.
"INSURANCE PROCEEDS" means the interest in and to all proceeds (net of
costs of collection, including reasonable attorney's fees) which now or
hereafter may be paid under any insurance policies now or hereafter obtained by
or on behalf of the Company or any Guarantor in connection with any Collateral,
together with interest payable thereon and the right to collect and receive the
same, including, without limitation, proceeds of casualty insurance, title
insurance, business interruption insurance and any other insurance now or
hereafter maintained with respect to such Collateral.
"INTEREST PAYMENT DATE" means the stated due date of an installment of
interest on the Notes.
"INTEREST RATE OR CURRENCY AGREEMENT" of any Person means any forward
contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors, collars, puts and
similar agreements) relating to, or the value of which is dependent upon,
interest rates or currency exchange rates.
"INVENTORY" means and includes, as to any Person, all now owned or
hereafter acquired feedstock, raw materials, work or materials in process and
refined petroleum products, all proceeds thereof (from insurance or otherwise),
all documents of title,
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<PAGE> 19
(excluding copies thereof retained by such Person) and copies of each of the
following (excluding copies thereof retained by such Person): all books,
records, ledger cards, files and correspondence that at any time evidence or
contain information relating to the foregoing.
"INVESTMENT" by any Person in any other Person means: (a) the
acquisition (whether for cash, Property, services, securities or otherwise) of
capital stock, bonds, notes, debentures, partnership, or other ownership
interests or other securities of such other Person or any agreement to make any
such acquisition; (b) the making by such Person of any deposit with, or advance,
loan or other extension of credit to such other Person (including the purchase
of Property from another Person subject to an understanding or agreement,
contingent or otherwise, to resell such Property to such other Person) and
(without duplication) any amount committed to be advanced, loaned or extended to
such other Person; (c) the entering into of any guarantee of, or other
contingent obligation with respect to, Debt or other liability of such other
Person; (d) the entering into of any Swap Obligation with such other Person; or
(e) the making of any capital contribution by such Person to such other Person.
"INVESTMENT GRADE RATING" means, with respect to any Person or issue of
debt securities or preferred stock, a rating in one of the four highest letter
rating categories (without regard to "+" or "--" or other modifiers) by any
rating agency or if any such rating agency has ceased using letter rating
categories or the four highest of such letter rating categories are not
considered to represent "investment grade" ratings, then the comparable
"investment grade" ratings (as designated by any such rating agency).
"ISSUE DATE" means the date of first issuance of the Notes under this
Indenture.
"LAW" means any statute, law, rule, regulation, ordinance, order, code,
policy or rule of common law or any published guideline or policy having the
force of law, now or hereafter in effect, and any judicial or administrative
interpretation thereof by a Governmental Authority or otherwise, including any
judicial or administrative order, consent decree or judgment.
"LEGAL HOLIDAY" shall have the meaning specified in Section 12.7.
"LIEN" means any mortgage, lien, pledge, charge, security interest, or
other encumbrance of any kind, regardless of whether filed, recorded, or
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement and any lease deemed to constitute a security
interest and any option or other agreement to give any security interest).
"MAINTENANCE CAPITAL EXPENDITURE" means those expenditures that would be
classified as Capital Expenditures under GAAP and that are required to maintain
the operation of the Refinery.
"MAJORITY HOLDERS" means (i) at any time that the Direct Purchasers hold
25% or more of the aggregate principal amount of the Notes outstanding at the
time, the Direct Purchasers holding not less than a majority in the aggregate
principal amount of all Notes outstanding at the time held by all Direct
Purchasers and (ii) at any time that the Direct Purchasers hold less than 25% of
the aggregate principal amount of the Notes outstanding at the time, the Holders
holding
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<PAGE> 20
not less than a majority in the aggregate principal amount of all Notes
outstanding at the time held by all Holders.
"MATERIAL ADVERSE CHANGE" means a material adverse change in, or effect
on, (a) the financial position, business prospects, results of operations or
business of the Company, (b) the ability of the Company to complete Phase I by
the Phase I Completion Date or Phase II by the Phase II Completion Date, (c) the
ability of the Company to complete the Capital Improvement Program in accordance
with the construction schedule therefor, as such schedule may be amended from
time to time with the approval of a majority of Board of Directors of the
Company and the Independent Engineer, (d) the Company's ability to perform any
of its material obligations under this Indenture, the Notes, the Security
Documents or the Project Agreements, (e) the validity or priority of the Liens
on the Collateral pursuant to any of the Security Documents or (f) the validity
or enforceability of any of the Security Documents.
"MATURITY DATE," when used with respect to any Note, means the date on
which the principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration, call
for redemption or otherwise.
"MORTGAGE" means the Mortgage, Assignment of Leases and Rents, Security
Agreement and Financing Statement from the Company in favor of the Trustee as
amended from time to time in accordance with the terms of this Indenture and the
other Security Documents.
"NAPHTHA PRETREATER" means the naphtha pretreater being constructed as
part of the Capital Improvement Program.
"NET CASH PROCEEDS" means an amount equal to the aggregate amount of
cash received by the Company and its Subsidiaries in respect of an Asset Sale,
less the sum of (i) all reasonable out-of-pocket fees, commissions, and other
expenses incurred in connection with such Asset Sale including the amount
(estimated in good faith by the Company) of income, franchise, sales and other
applicable taxes to be paid, payable or accrued by the Company or any Subsidiary
of the Company (in each case as estimated in good faith by the Company or such
Subsidiary without giving effect to tax attributes unrelated to such Asset Sale)
in connection with such Asset Sale and (ii) the aggregate amount of cash so
received which is used to retire any then existing Debt of the Company or its
Subsidiaries (other than the Notes), as the case may be, which is required by
the terms of such Debt to be repaid in connection with such Asset Sale.
"NET LOSS PROCEEDS" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Event of Loss, including,
without limitation, insurance proceeds, condemnation awards or damages awarded
by any judgment, net of the direct costs of recovery of such Net Loss Proceeds
(including, without limitation, legal, accounting, appraisal and insurance
adjuster fees and any relocation expenses incurred as a result thereof), amounts
required to be applied to the repayment of Debt (to the extent, in the case of
revolving credit Debt, such Debt is permanently reduced) secured by a Lien on
the asset or assets that were the subject of such Event of Loss, and any taxes
paid or payable as a result thereof.
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<PAGE> 21
"NET PROCEEDS" means (a) in the case of any sale by a Person of
Qualified Capital Stock, the aggregate net cash proceeds received by such Person
from the sale of Qualified Capital Stock (other than to a Subsidiary) after
payment of reasonable out-of-pocket expenses, commissions and discounts incurred
in connection therewith and (b) in the case of any exchange, exercise,
conversion or surrender of any outstanding securities or Debt of such Person for
or into shares of Qualified Capital Stock of such Person, the net book value of
such outstanding securities as adjusted on the books of such Person or Debt of
such Person to the extent recorded in accordance with GAAP, in each case, on the
date of such exchange, exercise, conversion or surrender (plus any additional
amount required to be paid by the holder of such Debt or securities to such
Person upon such exchange, exercise, conversion or surrender and less (i) any
and all payments made to the holders of such Debt or securities and (ii) all
other expenses incurred by such Person in connection therewith, in each case, in
so far as such payments or expenses are incident to such exchange, exercise,
conversion, or surrender).
"NET WORTH" of any Person means, at any date of determination,
stockholders' equity as set forth on the most recently available quarterly or
annual consolidated balance sheet of such Person and its Subsidiaries (which
shall be as of a date not more than 90 days prior to the date of such
computation), less any amounts included therein attributable to Disqualified
Capital Stock or any equity security convertible into or exchangeable for Debt,
the cost of treasury stock (not otherwise deducted from stockholder's equity),
and the principal amount of any promissory notes receivable from the sale of the
Capital Stock of such Person or any of its Subsidiaries, each item to be
determined in conformity with GAAP.
"NO. 2 REFORMER" means the No. 2 reformer being constructed as part of
the Capital Improvement Program.
"NOTEHOLDER" means the Person in whose name a Note is registered on the
Registrar's book.
"NOTES" means, collectively, the Series A Notes and the Series B Notes
in an aggregate principal amount up to $150,000,000, any Additional Notes in an
aggregate principal amount up to $150,000,000 and any PIK Notes, in each case as
issued or supplemented from time to time in accordance with the terms of this
Indenture.
"OFFERING CIRCULAR" means the final offering circular dated as of
December __, 1998 pursuant to which the Notes were offered.
"OFFICE LEASE" means the lease of the Company's office space at 1300
North Sam Houston Parkway East, Houston, Texas 77032-2949.
"OFFICER" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice President of such Person.
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<PAGE> 22
"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Company or a Guarantor, as the case may be, by two Officers of the Company or a
Guarantor, as the case may be, one of whom must be the principal accounting
officer of the Company or a Guarantor, as the case may be, that meets the
requirements of Sections 12.4 and 12.5.
"OPINION OF COUNSEL" means a written opinion from legal counsel,
reasonably acceptable to the Trustee, complying with the requirements of
Sections 12.4 and 12.5 and the TIA.
"PAYING AGENT" shall have the meaning specified in Section 2.3.
"PERMITTED HEDGING TRANSACTIONS" means non-speculative transactions in
futures, forwards, swaps or option contracts (including both physical and
financial settlement transactions) engaged in by the Company or its Subsidiaries
as part of their normal business operations as a risk-management strategy or
hedge against adverse changes in the prices of natural gas, feedstock or refined
products; provided that, at the time of such transaction (i) the counter party
to any such transaction is an Eligible Institution or a Person that has an
Investment Grade Rating or has an issue of debt securities or preferred stock
outstanding with an Investment Grade Rating or (ii) such counter-party's
obligation pursuant to such transaction is unconditionally guaranteed in full
by, or secured by a letter of credit issued by, an Eligible Institution or a
Person that has an Investment Grade Rating or that has an issue of debt
securities or preferred stock outstanding with an Investment Grade Rating.
"PERMITTED INVESTMENT" means, when used with reference to the Company or
its Subsidiaries, (i) trade credit extended to Persons in the ordinary course of
business; (ii) Investments in Cash Equivalents; (iii) Swap Obligations; (iv) the
receipt of Capital Stock in lieu of cash in connection with the settlement of
litigation; (v) advances to officers and employees in connection with the
performance of their duties in the ordinary course of business in an amount not
to exceed $1,000,000 in the aggregate outstanding at any time; (vi) margin
deposits in connection with Permitted Hedging Transactions; (vii) Investments
made as a part of the Transaction on the Issue Date; (viii) deposits permitted
by the definition of Permitted Liens or any extension, renewal or replacement of
any of them; (ix) other Investments not in excess of $1,000,000 in the aggregate
outstanding at any one time; (x) a guaranty by the Company or any Subsidiary of
the Company permitted under Section 4.11; (xi) bonding or similar arrangements
securing Debt permitted under Section 4.11; and (xii) Investments (except of
Property comprising the Refinery) in Guarantors wholly-owned by the Company.
"PERMITTED LIENS" means (a) Liens imposed by Governmental Authorities
for taxes, assessments, or other charges not yet due or which are being
contested in good faith and by appropriate proceedings, if adequate reserves
with respect thereto are maintained on the books of any of the Company and its
Subsidiaries in accordance with GAAP; (b) statutory Liens of landlords,
carriers, warehousemen, mechanics, materialmen, repairmen, mineral interest
owners, or other like Liens arising by operation of law in the ordinary course
of business, provided that (i) the underlying obligations are not overdue for a
period of more than 60 days, or (ii) such Liens are being contested in good
faith and by appropriate proceedings and adequate reserves with respect thereto
are maintained on the books of any of the Company and its Subsidiaries in
accordance with GAAP; (c) deposits of cash or Cash Equivalents to secure (i) the
performance of
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<PAGE> 23
bids, trade contracts (other than borrowed money), leases, statutory
obligations, surety bonds, performance bonds, and other obligations of a like
nature incurred in the ordinary course of business (or to secure reimbursement
obligations or letters of credit issued to secure such performance or other
obligations) in an aggregate amount outstanding at any one time not in excess of
$5,000,000 or (ii) appeal or supersedeas bonds (or to secure reimbursement
obligations or letters of credit in support of such bonds); (d) easements,
servitudes, rights-of-way, zoning, similar restrictions and other similar
encumbrances or title defects incurred in the ordinary course of business which,
in the aggregate, are not material in amount and which do not, in any case,
materially detract from the value of the Property subject thereto (as such
Property is used by any of the Company and its Subsidiaries) or materially
interfere with the ordinary conduct of the business of any of the Company and
its Subsidiaries, including, without limitation, any easement or servitude
granted in connection with the Port Commission Bond Financing, the Substation
Financing or the financing of the Tank Storage Debt or any Debt permitted to be
Incurred as described in clause (c) of Section 4.11; (e) Liens arising by
operation of law in connection with judgments, only to the extent, for an amount
and for a period not resulting in an Event of Default with respect thereto; (f)
pledges or deposits made in the ordinary course of business in connection with
worker's compensation, unemployment insurance, other types of social security
legislation, property insurance and liability insurance; (g) Liens on Equipment,
Receivables and Inventory; (h) Liens on the assets of any entity existing at the
time such assets are acquired by any of the Company or its Subsidiaries, whether
by merger, consolidation, purchase of assets or otherwise so long as such Liens
(i) are not created, incurred or assumed in contemplation of such assets being
acquired by any of the Company or its Subsidiaries and (ii) do not extend to any
other assets of any of the Company and its Subsidiaries (unless such extension
or coverage would otherwise constitute a Permitted Lien); (i) Liens (including
extensions and renewals thereof) on real or personal property, acquired after
the Issue Date ("NEW PROPERTY"); provided that (i) such Lien is created solely
for the purpose of securing Debt Incurred to finance the cost (including the
cost of improvement or construction) of the item of New Property subject thereto
and such Lien is created at the time of or within six months after the later of
the acquisition, the completion of construction, or the commencement of full
operation of such New Property, (ii) the principal amount of the Debt secured by
such Lien does not exceed 100% of such cost plus reasonable financing fees and
other associated reasonable out-of-pocket expenses, (iii) any such Lien shall
not extend to or cover any Property or assets other than such item of New
Property and any improvements on such New Property (unless such extension or
coverage would otherwise constitute a Permitted Lien) and (iv) such Lien does
not extend to assets or Property which are part of the fixed refinery assets
that are part of the Capital Improvement Program (unless such extension or
coverage would otherwise constitute a Permitted Lien); (j) leases or subleases
granted to others that do not materially interfere with the ordinary course of
business of any of the Company and its Subsidiaries, taken as a whole; (k) Liens
on the assets of the Company in favor of any Guarantors or on the assets of any
Guarantors in favor of any other of the Company and any Guarantors; (l) Liens
securing reimbursement obligations with respect to letters of credit that
encumber documents relating to such letters of credit and the products and
proceeds thereof; provided that such reimbursement obligations are not matured
for a period of over 60 days; (m) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (n) Liens encumbering customary
initial deposits and margin deposits securing Swap
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<PAGE> 24
Obligations or Permitted Hedging Transactions and Liens encumbering contract
rights in connection with Permitted Hedging Transactions; (o) Liens on cash
deposits to secure reimbursement obligations with respect to letters of credit;
(p) Liens on (i) the proceeds of any Property subject to a Permitted Lien or
deposit accounts containing any such proceeds, (ii) the proceeds of any Property
that is not Collateral or deposit accounts containing any such proceeds and
(iii) the proceeds of Debt permitted to be Incurred pursuant to Section 4.11 to
the extent such proceeds are set aside to fund a reserve required by the terms
of such financing or deposit accounts containing any such proceeds; (q) Liens
imposed on the Port Facility Assets; (r) any extension, renewal or replacement
of the Liens created pursuant to any of clauses (a) through (f), (h) through (q)
or (t) through (w); provided that such Liens would have otherwise been permitted
under such clauses, and provided further that the Liens permitted by this clause
(r) do not secure any additional Debt or encumber any additional Property; (s)
Liens created by the Security Documents; (t) Liens on the Tank Storage Facility
for the purpose of securing the Tank Storage Debt; (u) Liens granted to secure
any Debt permitted to be incurred pursuant to clauses (c), (d), (j) and (l) of
Section 4.11, provided that the Debt secured by such Liens will rank pari passu
with or subordinate to the Notes; and (v) other Liens securing Debt or other
obligations with an aggregate principal amount or value not in excess of
$1,000,000 at any one time outstanding.
"PERSON" means any corporation, individual, joint stock company, joint
venture, partnership, unincorporated association, governmental regulatory
entity, country, state, or political subdivision thereof, trust, municipality,
or other entity.
"PHASE I" has the meaning given to it in the Offering Circular under the
heading "Business -- Capital Improvement Program."
"PHASE I COMPLETION DATE" means the date on which the Independent
Engineer issues a written notice (the "PHASE I COMPLETION NOTICE") to the
Company and the Disbursement Agent certifying that the Phase I Performance Test
has been completed and that the portion of the Refinery comprising Phase I has
been constructed in accordance with the Plans with respect to Phase I (and the
cost therefor from and including November 1, 1998 has not exceeded the amount
budgeted therefor (including contingency amounts) as set fourth in the Budget by
more than $1,000,000), and that all mechanic's Liens with respect to Phase I
have been fully and finally released or amounts remain in the Construction
Disbursement Account which, together with an amount equal to 50% of Projected
Net Operating Cash Flow for the next 90 day period, are sufficient to pay in
full the amounts claimed by the beneficiaries of all such Liens, provided that,
for purposes of this definition of "Phase I Completion Date," Phase I shall
exclude the No. 2 Reformer.
"PHASE I PERFORMANCE TEST" means, for a period of at least 72
uninterrupted hours, the Refinery has simultaneously averaged (i) at least
150,000 barrels per day Crude Unit throughput while processing a combined
feedstock slate with an API gravity of 22 degrees or less, (ii) vacuum tower
operations at rates equivalent to 100% of the Crude Unit bottoms yield, (iii)
Delayed Coking Unit operations at rates equivalent to 100% of the vacuum tower
bottoms yield, (iv) operation of the HDS Unit at a rate of 60,000 barrels per
day, and (v) operation of the sulfur recovery system, including the Claus Units
and tailgas treater, at levels sufficient to preclude flaring or hydrogen
sulfide.
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<PAGE> 25
"PHASE II" has the meaning given to it in the Offering Circular under
the heading "Business -- Capital Improvement Program."
"PHASE II COMPLETION DATE" means the date on which the Independent
Engineer issues a written notice (the "Phase II Completion Notice") to the
Company and the Disbursement Agent certifying that the Phase II Performance Test
has been completed and that all Phase II units, including, for this purpose, the
No. 2 Reformer, have been constructed in accordance with the Plans therefor (and
the cost therefor from and including November 1, 1998 has not exceeded the
amount budgeted therefor (including contingency amounts) as set forth in the
Budget by more than the sum of $6,000,000 and the amount, if any, by which the
amount budgeted for Phase I (including contingency amounts) as set forth in the
Budget exceeds the actual cost of Phase I from and including November 1, 1998)
and that all mechanic's Liens have been fully and finally released or that
amounts remain in the Construction Disbursement Account which, together with an
amount equal to 50% of Projected Net Operating Cash Flow for the next 90 day
period, are sufficient to pay in full the amounts claimed by the beneficiaries
of all such Liens.
"PHASE II MECHANICAL COMPLETION DATE" means the date on which the
Independent Engineer issues a written notice to the Company certifying that the
portion of the Refinery comprising Phase II has been sufficiently constructed in
accordance with the Plans with respect to Phase II to begin commissioning.
"PHASE II PERFORMANCE TEST" means that (a) for a period of at least 72
uninterrupted hours, the Refinery has simultaneously averaged (i) at least
180,000 barrels per day Crude Unit throughput while processing a combined
feedstock slate with an API gravity of 22 degrees or less, (ii) liquid yield of
at least 94.0 volume percent of total refinery feedstock, with all facilities
included in the Capital Improvement Program operating, and (iii)
on-specification light transportation fuels (combined gasoline, No. 2 diesel,
No. 2 heating oil and kerosene) production of 117,000 barrels per day, and (b)
for a minimum period of at least 24 hours, the Refinery has simultaneously
averaged on (i) the Delayed Coking Unit at 65,000 barrels per day of feed and
4,000 tons per day of coke production (may be separate demonstrations), (ii) the
Fluid Catalytic Cracking Unit at 100,000 barrels per day of feed with an average
Conradson carbon of 1.8%, (iii) the naphtha pretreater at 30,000 barrels per day
of feed, (iv) the No. 2 Reformer at 12,000 barrels per day of feed, and (v) the
sulfur recovery system including the Claus Units and tailgas treater at combined
rates of 370 long tons per day of sulfur.
"PHASE II MECHANICAL COMPLETION DATE" means the date on which the
Independent Engineer issues a written notice to the Company certifying that the
portion of the Refinery comprising Phase II has been sufficiently constructed in
accordance with the Plans with respect to Phase II to begin commissioning.
"PIK NOTES" shall have the meaning specified in Section 2.15.
"PLANS" means (a) the plans and specifications prepared by or on behalf
of the Company, in the form delivered to the Trustee and the Independent
Engineer on the Issue Date and which describe and show the proposed expansion
and modification of the Refinery and (b) a budget prepared by or on behalf of
the Company; in each case, as amended, supplemented or otherwise modified from
time to time by the Board of Directors of the Company by resolutions and as
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<PAGE> 26
approved by the Independent Engineer in writing; provided that the Plans with
respect to Phase I and Phase II will not be amended without the consent of the
Majority Holders in accordance with the terms of this Indenture.
"PORT COMMISSION BOND FINANCING" means a financing transaction involving
the transfer (including by sale, lease, Lien or mortgage) of the Company's
interest in all or some of the Port Facility Assets (together with the granting,
at the Company's discretion, of any easements or servitudes or similar rights
reasonably necessary to the ownership and operation of such assets by the
transferee) or a financing secured by the Port Facility Assets.
"PORT FACILITY ASSETS" means some or all of (i) the Prospect Road tank
farm; (ii) certain docks and dock improvements; (iii) the dock vapor recovery
system; (iv) the coke handling system; (v) the refinery waste water treatment
facility; (vi) tankage for liquefied petroleum gas; and (vii) tankage for crude
oil.
"PREFERRED STOCK" means, with respect to any corporation, any class or
classes (however designated) of Capital Stock of such Person that is preferred
as to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation over
shares of Capital Stock of any other class of such corporation.
"PROJECT" means the construction and commissioning of assets in the
Capital Improvement Program.
"PROJECT AGREEMENTS" means each of (i) the Construction Services
Agreement, dated October 1, 1998, as amended, between the Company and Shaw
Constructors, Inc., (ii) the Engineering Services Agreement dated May 25, 1995,
as amended, between the Company and Raytheon Engineers & Constructors, Inc., and
(iii) the Agreement for Engineering, Procurement and Construction Services dated
June 6, 1995, as amended, between the Company and Fluor Daniel, Inc., each as
amended from time to time in accordance with Section 4.28.
"PROJECTED NET OPERATING CASH FLOW" means projected Consolidated Net
Income for such period (i) plus projected depreciation, depletion and
amortization for such period, (ii) plus projected non-cash interest for such
period, (iii) minus projected Maintenance Capital Expenditures for such period
and (iv) plus projected non-cash deferred taxes for such period, in each case as
determined by the Company's Board of Directors and approved by the Independent
Engineer.
"PROPERTY" means any right or interest in or to property or assets of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"QIB" means "qualified institutional buyer" as defined in Rule 144A.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not
Disqualified Capital Stock.
"RECEIVABLES" means and includes, as to any Person, the right to receive
payment for any feedstock or refined petroleum products sold by such Person.
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<PAGE> 27
"RECORD DATE" means a Record Date specified in the Notes regardless of
whether such Record Date is a Business Day.
"REDEMPTION DATE" means, when used with respect to any Note to be
redeemed, the date fixed for such redemption pursuant to this Indenture and
Paragraph 5 in the form of Note attached hereto as Exhibit A.
"REDEMPTION PRICE" when used with respect to any Note to be redeemed,
means the redemption price for such redemption pursuant to Paragraph 5 in the
form of Note attached hereto as Exhibit A, which shall include, without
duplication, in each case, accrued and unpaid interest to the Redemption Date.
"REFERENCE PERIOD" with regard to any Person means the four full fiscal
quarters of such Person ended on or immediately preceding any date upon which
any determination is to be made pursuant to the terms of the Notes or this
Indenture.
"REFINANCING DEBT" shall have the meaning specified in Section 4.11(g).
"REFINERY" means the Company's refinery located in St. Charles Parish,
Louisiana as more particularly described in the Mortgage.
"REGISTRAR" shall have the meaning specified in Section 2.3.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
in connection with the registration under federal securities laws of the Notes
and between the Company and the initial Holders, as in effect on the Issue Date
and as amended from time to time.
"RELATED BUSINESS" means the business of (i) processing, blending,
terminaling, storing, marketing, refining or distilling crude oil, condensate,
natural gas liquids, petroleum blendstocks or refined products thereof and (ii)
after the Phase II Completion Date, the exploration for, acquisition of,
development of, production, transportation and gathering of crude oil, natural
gas, condensate and natural gas liquids from outside of the United States and
retail marketing of refined petroleum products.
"RELATED PERSON" means (i) any Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any Subsidiary of the Company or any officer, director, or employee of the
Company or any Subsidiary of the Company or of such Person, (ii) the spouse, any
immediate family member, or any other relative who has the same principal
residence of any Person described in clause (i) above, and any Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with, such spouse, family member, or other relative, and (iii) any trust
in which any Person described in clause (i) or (ii), above, is a fiduciary or
has a beneficial interest. For purposes of this definition the term "control"
means (a) the power to direct the management and policies of a Person, directly
or through one or more intermediaries, whether through the ownership of voting
securities, by contract, or otherwise, or (b) the beneficial ownership of 10% or
more of the voting
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<PAGE> 28
common equity of such Person (on a fully diluted basis) or of warrants or other
rights to acquire such equity (whether or not presently exercisable); provided
that the initial Holders and their respective Affiliates and any transferees
that are not Affiliates of such Persons will be deemed not to constitute Related
Persons.
"RELATED PERSON TRANSACTION" shall have the meaning specified in Section
4.10.
"RELEASE", when used in connection with any Hazardous Material, means
and includes any release, spill, emission, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration, where such release is
either regulated by applicable Environmental Law or may serve as the basis for
liability.
"RELEASE REQUEST" means a written request of the Company (or with
respect to the Security Documents, the grantor of the security interest
thereunder) in the form of an Officers' Certificate delivered pursuant to
Article XI.
"RELIABILITY TEST" means a demonstration, certified by the Independent
Engineer, made no later than June 30, 2001 over a 12 calendar month consecutive
period that (i) the Delayed Coking Unit and Fluid Catalytic Cracking Unit were
mechanically available for operation a minimum of 330 calendar days and that all
other Refinery units were mechanically available for a minimum of 345 calendar
days, and (ii) the following minimum cumulative throughputs were achieved:
<TABLE>
<CAPTION>
UNIT THOUSAND
- ---- BARRELS
-------
<S> <C>
Delayed Coking Unit.................. 18,500
Fluid Catalytic Cracking Unit........ 30,000
HDS Unit............................. 18,500
</TABLE>
"REQUIRED PHASE I COMPLETION DATE" means April 30, 1999.
"RESTRICTED INVESTMENT" means any direct or indirect Investment by the
Company or any Subsidiary of the Company other than a Permitted Investment.
"RESTRICTED NOTES" means Notes that bear or are required to bear the
legends set forth in Exhibit A.
"RESTRICTED PAYMENT" means, with respect to any Person, (i) any
Restricted Investment, (ii) any dividend or other distribution on shares of
Capital Stock of such Person or any Subsidiary of such Person, (iii) any payment
on account of the purchase, redemption, or other acquisition or retirement for
value of any shares of Capital Stock of such Person or any Subsidiary of such
Person, and (iv) any defeasance, redemption, repurchase, or other acquisition or
retirement for value, or any payment in respect of any amendment in anticipation
of or in connection with any such retirement, acquisition, or defeasance, in
whole or in part, of any Subordinated Debt, directly or indirectly, of such
Person or a Subsidiary of such Person prior to the scheduled maturity or prior
to any scheduled repayment of principal in respect of such
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<PAGE> 29
Subordinated Debt; provided, however, that the term "Restricted Payment" does
not include (a) any dividend, distribution, or other payment on shares of
Capital Stock of an issuer solely in shares of Qualified Capital Stock of such
issuer that is at least as junior in ranking as the Capital Stock on which such
dividend, distribution, or other payment is to be made, (b) any dividend,
distribution, or other payment to the Company from any of its Subsidiaries, (c)
any defeasance, redemption, repurchase, or other acquisition or retirement for
value, in whole or in part, of any Subordinated Debt of such Person payable
solely in shares of Qualified Capital Stock of such Person, (d) any payments or
distributions made pursuant to and in accordance with the Asset Sale Agreements,
the Services Agreement, the Office Lease, the Expense Reimbursement Agreement,
the Secondment Agreement and the Tax Allocation Agreement, (e) the redemption,
purchase, retirement or other acquisition of any Debt including any premium paid
thereon, with the proceeds of any refinancing Debt permitted to be incurred
pursuant to clause (g) of Section 4.11, (f) any dividend, distribution or other
payment by the Company to the holders of TransContinental's 6% Participating
Preferred Stock, par value $.01 per share, in accordance with the Certificate of
Designation as in effect on the Issue Date or other shares of Preferred Stock
issued in connection with the issuance of Additional Notes issued after the
Issue Date and (g) any payment made as part of the Transaction on the Issue
Date.
"RULE 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"SALE AND LEASEBACK TRANSACTION" means an arrangement relating to
Property owned on the Issue Date or thereafter acquired whereby the Company or a
Subsidiary of the Company transfers such Property to a Person and leases it back
from such Person.
"SECONDMENT AGREEMENT" means the Secondment Agreement between TransTexas
and TARC, as amended from time to time; provided that any such amendment is not
materially adverse to the Holders of the Notes.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"SECURITY AGREEMENT" means the Security Agreement of even date with this
Indenture between the Company and the Trustee, as amended from time to time in
accordance with the terms of this Indenture and the other Security Documents.
"SECURITY DOCUMENTS" means this Indenture, the Security Agreement, the
Mortgage, the Construction Collateral and Disbursement Agreement and any other
ancillary documents under which security for repayment of the Notes is provided.
"SECURITY INTERESTS" means the Liens on the Collateral created by the
Security Documents in favor of the Trustee for the benefit of the Holders.
"SERIES A NOTES" means the Company's 15% Series A Senior Secured Notes
due 2003, as authenticated and issued under this Indenture.
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<PAGE> 30
"SERIES B NOTES" means the Company's 15% Series B Senior Secured Notes
due 2003, as authenticated and issued under this Indenture.
"SERVICES AGREEMENT" means the Amended and Restated Services Agreement
among TNGC Holdings Corporation and certain of its Affiliates, TARC, TCR
Holding, TransContinental and TransTexas, as in effect on the Issue Date and as
amended from time to time, provided that any such amendment is not materially
adverse to the holders of the Notes.
"SITE" means the tracts of land or interests therein located in St.
Charles Parish, Louisiana, which are more particularly described in the Mortgage
and that certain lease dated July 24, 1994 between Kathryn Gore and TARC.
"SPECIAL RECORD DATE" for payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 2.12.
"STATED MATURITY," when used with respect to any Note, means December 1,
2003.
"STOCKHOLDERS AGREEMENTS" means the Stockholders Agreements of even date
with this Indenture entered into among certain of TransAmerican, TEC, TARC, TCR
Holding, TransContinental and certain purchasers named therein, as amended from
time to time.
"SUBORDINATED DEBT" means Debt of the Company that (i) requires no
payment of principal prior to or on the date on which all principal of and
interest on the Notes is paid in full and (ii) is subordinate and junior in
right of payment to the Notes in the event of a liquidation.
"SUBSIDIARY" means, with respect to any Person, (i) a corporation with
respect to which such Person or its Subsidiaries owns, directly or indirectly,
at least fifty percent of such corporation's Capital Stock with voting power,
under ordinary circumstances, to elect directors, or (ii) a partnership in which
such Person or a subsidiary of such Person is, at the time, a general partner of
such partnership and has more than 50% of the total voting power of partnership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of managers thereof, or (iii) any other Person (other than a
corporation or a partnership) in which such Person, one or more Subsidiaries of
such Person, or such Person and one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has (x) at least a
fifty percent ownership interest or (y) the power to elect or direct the
election of the directors or other governing body of such other Person.
"SUBSTATION ASSETS" means certain transformers, switch gear and other
high-voltage electrical equipment and related facilities that constitute the
Prospect Avenue Substation, the Good Hope Substation and the primary electrical
distribution system of the Refinery.
"SUBSTATION FINANCING" means a sale-leaseback or other financing or
disposition with respect to the Substation Assets.
"SUBSTITUTE COLLATERAL" means Property that is substituted for
Collateral in accordance with Section 11.5.
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<PAGE> 31
"SULFUR RECOVERY SYSTEM" means the two sulfur units being constructed as
part of the Capital Improvement Program.
"SURVIVING PERSON" shall have the meaning specified in Section 5.1(a).
"SWAP OBLIGATION" of any Person means any Interest Rate or Currency
Agreement entered into with one or more financial institutions or one or more
futures exchanges in the ordinary course of business and not for purposes of
speculation; provided that Swap Obligations will be designed to protect such
Person against fluctuations in (x) interest rates with respect to Debt Incurred
and which shall have a notional amount no greater than 105% of the principal
amount of the Debt being hedged thereby, or (y) currency exchange rates.
"TANK STORAGE DEBT" means the 13% Senior Secured Notes of TARC due 2002
in aggregate principal amount of $36,000,000, to be assumed by TCR Holding (in
connection with the release of TARC from the obligations thereunder) and to be
assumed by TransContinental (in connection with the release of TCR Holding from
the obligations thereunder).
"TANK STORAGE FACILITY" means those tanks, docks, pipelines and
supporting facilities and buildings and associated real property acquired by
TARC pursuant to a purchase agreement dated as of September 19, 1997, together
with all subsequently acquired Property required to be incorporated therein by
the terms of the Tank Storage Debt.
"TARC" means TransAmerican Refining Corporation, a Texas corporation.
"TARC NOTES" means the 16% Senior Subordinated Notes due 2003 of TARC.
"TAX ALLOCATION AGREEMENT" means the Tax Allocation Agreement, dated as
of the Issue Date, between TCR Holding and TransContinental as amended from time
to time; provided that any such amendment is not materially adverse to the
holders of the Notes.
"TCR HOLDING" means TCR Holding Corporation, a Delaware corporation.
"TCR HOLDING INTERCOMPANY OBLIGATIONS" means (a) the dividend obligation
and repayment of the liquidation preference of the participating preferred stock
issued by TCR Holding to TARC with a maximum aggregate liquidation preference of
$1,120,000,000 or the principal and interest payment obligations under any Debt
of TCR Holding issued in exchange for such participating preferred stock in an
aggregate principal amount not in excess of the aggregate liquidation preference
of the then outstanding participating preferred stock for which such debt is
exchanged and (b) the payment obligations of TCR Holding (as assignee) under one
or more promissory notes made by TARC in favor of TEC in an aggregate principal
amount not exceeding $50,000,000 at any one time.
"TEC" means TransAmerican Energy Corporation, a Delaware corporation.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date of the execution of this Indenture.
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<PAGE> 32
"TRANSACTION" means a series of related transactions as more fully
described in the Offering Circular pursuant to which, among other things, (i)
TARC transfers to TCR Holding the assets comprising the Refinery in exchange for
(x) all of the capital stock of TCR Holding, (y) the assumption by TCR Holding
of substantially all of the debt and other obligations of TARC, other than the
TARC Notes, the debt issued pursuant to the Loan Agreement dated as of June 13,
1997, as amended, between TEC and TARC, and certain accounts payable and other
liabilities and (z) the issuance of preferred stock of TCR Holding to TARC
providing for payment of amounts owed by TARC with respect to the TARC Notes,
(ii) TCR Holding transfers to TransContinental the assets comprising the
Refinery and TransContinental assumes substantially all of the debt and other
obligations of TARC assumed by TCR Holding other than the working capital loan
from TEC to TARC of up to $50,000,000 and (iii) the Holders purchase (x) the
Notes, (y) equity securities issued by TransContinental and (z) TCR Holding
capital stock from TARC.
"TRANSAMERICAN" means TransAmerican Natural Gas Corporation, a Texas
corporation.
"TRANSCONTINENTAL" means TransContinental Refining Corporation, a
Delaware corporation.
"TRANSTEXAS" means TransTexas Gas Corporation, a Delaware corporation.
"TRUSTEE" means The Bank of New York until a successor replaces it in
accordance with the provisions of this Indenture and thereafter means such
successor.
"TRUST OFFICER" means any officer within the corporate trust department
(or any successor group) of the Trustee including any vice president, assistant
vice president, assistant treasurer or any other officer or assistant officer of
the Trustee customarily performing functions similar to those performed by the
Persons who at that time shall be such officers, and also means, with respect to
a particular corporate trust matter, any other officer of the corporate trust
department (or any successor group) of the Trustee to whom such trust matter is
referred because of his knowledge of and familiarity with the particular
subject.
"U.S. GOVERNMENT OBLIGATIONS" means direct non-callable obligations of,
or non-callable obligations guaranteed by, the United States of America for the
payment of which obligation or guarantee the full faith and credit of the United
States of America is pledged.
"U.S. LEGAL TENDER" means such coin or currency of the United States of
America as at the time payment shall be legal tender for the payment of public
and private debts.
"VEHICLES" means all trucks, automobiles, trailers and other vehicles
covered by a certificate of title.
"VOTING STOCK" means Capital Stock of a Person having generally the
right to vote in the election of directors of such Person.
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<PAGE> 33
"WEIGHTED AVERAGE LIFE" means, as of the date of determination, with
respect to any debt instrument, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such debt instrument
multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
"YIELD ENHANCEMENT" shall have the meaning specified in the Registration
Rights Agreement.
Section 1.2 Incorporation by Reference of TIA. Whenever this Indenture
refers to a provision of the TIA, such provision is incorporated by reference in
and made a part of this Indenture. The following TIA terms used in this
Indenture have the following meanings:
"INDENTURE SECURITIES" means the Notes.
"INDENTURE SECURITYHOLDER" means a Holder or a Noteholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the Notes means the Company and any other obligor on the
Notes.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them
thereby.
Section 1.3 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in
the plural include the singular;
(5) provisions apply to successive events and transactions;
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(7) references to Sections or Articles means reference to
such Section or Article in this Indenture, unless stated
otherwise.
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<PAGE> 34
ARTICLE II
THE NOTES
Section 2.1 Form and Dating. The Notes and the Trustee's certificate of
authentication, in respect thereof, shall be substantially in the form of
Exhibit A, the terms of which are incorporated in and made a part of this
Indenture. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. The Company and the Trustee shall approve the
form of the Notes and any notation, legend or endorsement on them. Any such
notations, legends or endorsements not contained in the forms of Note attached
as Exhibit A hereto shall be delivered in writing to the Trustee. Each Note
shall be dated the date of its authentication.
The terms and provisions contained in the forms of Note shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. In the event of any inconsistency between the Notes and this Indenture,
this Indenture controls.
The Notes will be issued (i) in global form (the "GLOBAL NOTE"),
substantially in the form of Exhibit A attached hereto (including the text
referred to in footnotes 1 and 2 thereto) and (ii) in definitive form (the
"DEFINITIVE NOTES"), substantially in the form of Exhibit A attached hereto
(excluding the text referred to in footnotes 1 and 2 thereto). The Global Note
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon; provided, that the aggregate amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of the Global
Note to reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.6.
Section 2.2 Execution and Authentication. Two Officers shall sign, or
one Officer shall sign and one Officer or any Assistant Secretary shall attest
to, the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note was an Officer at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Note, the Note shall be valid nevertheless and the Company
shall nevertheless be bound by the terms of the Notes and this Indenture.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note but such
signature shall be conclusive evidence that the Note has been authenticated
pursuant to the terms of this Indenture.
The Trustee shall authenticate Notes for original issue in the
aggregate principal amount of up to $150,000,000 and shall authenticate any
other Notes permitted to be issued under this Indenture, upon a written order of
the Company in the form of an Officers' Certificate.
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The Officers' Certificate shall specify the amount of Notes to be authenticated
and the date on which the Notes are to be authenticated. The aggregate principal
amount of Notes outstanding at any time may not exceed $300,000,000 plus the
principal amount of any PIK Notes, except as provided in Section 2.7. Upon the
written order of the Company in the form of an Officers' Certificate, the
Trustee shall authenticate Notes in substitution of Notes originally issued to
reflect any name change of the Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless otherwise provided in the appointment, an
authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with any Obligor, any Affiliate of any Obligor, or any of their
respective Subsidiaries.
Notes shall be issuable only in registered form without coupons
in denominations (rounded, if necessary, to the nearest dollar) of $1 and any
integral multiple thereof.
Section 2.3 Registrar and Paying Agent. The Company shall
maintain an office or agency in the Borough of Manhattan in the City of New
York, New York, where Notes may be presented for registration of transfer or for
exchange ("REGISTRAR") and an office or agency in the Borough of Manhattan in
the City of New York, New York, where Notes may be presented for payment
("PAYING AGENT"). Notices and demands to or upon the Company in respect of the
Notes may be served as is provided in Section 12.2. The Company or any Affiliate
of the Company may act as Registrar or Paying Agent, except that, for the
purposes of Articles III, VIII and XI, neither the Company nor any Affiliate of
the Company shall act as Paying Agent. The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company may have one or more
co-Registrars and one or more additional Paying Agents. The term "Paying Agent"
includes any additional Paying Agent. The Company hereby initially appoints the
Trustee as Registrar and Paying Agent, and the Trustee hereby initially agrees
so to act.
The Company shall enter into an appropriate written agency
agreement with any Agent not a party to this Indenture, which agreement shall
implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee in writing in advance of the name and address
of any such Agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such.
The Company initially appoints DTC to act as Depository with
respect to the Global Notes. The Trustee shall act as custodian for the
Depository with respect to the Global Notes.
Except as otherwise required by the TIA, nothing herein shall
require the Trustee to communicate with any beneficial owner (other than the
Direct Purchasers) and the Trustee shall perform hereunder only with the
registered holders.
Section 2.4 Paying Agent to Hold Assets in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that each
Paying Agent shall hold in trust
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for the benefit of Holders or the Trustee all assets held by the Paying Agent
for the payment of principal of, or interest on, the Notes (whether such assets
have been distributed to it by the Company or any other obligor on the Notes),
and shall notify the Trustee in writing of any Default in making any such
payment. If the Company or any Affiliate of the Company acts as Paying Agent, it
shall segregate such assets and hold them as a separate trust fund for the
benefit of the Holders or the Trustee. The Company at any time may require a
Paying Agent to distribute all assets held by it to the Trustee and account for
any assets disbursed and the Trustee may at any time during the continuance of
any payment Default, upon written request to a Paying Agent, require such Paying
Agent to distribute all assets held by it to the Trustee and to account for any
assets distributed. Upon distribution to the Trustee of all assets that shall
have been delivered by the Company to the Paying Agent, the Paying Agent (if
other than the Company, or any Affiliate of the Company) shall have no further
liability for such assets.
Section 2.5 Noteholder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee on or before the third Business Day preceding each
Interest Payment Date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee reasonably may
require of the names and addresses of Holders.
Section 2.6 Transfer and Exchange of Definitive Notes.
(a) When Definitive Notes are presented by a Holder to the
Registrar with a request (1) to register the transfer of the Definitive Notes or
(2) to exchange such Definitive Notes for an equal principal amount of
Definitive Notes of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements for such
transactions are met; provided, that (A) the Definitive Notes so presented have
been duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by his attorney,
duly authorized in writing, and (B) if such Definitive Notes are Restricted
Notes, such request shall be accompanied by the following additional documents:
(i) if such Restricted Note is being delivered to the
Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification to that effect (in
substantially the form of Exhibit B attached hereto); or
(ii) if such Restricted Note is being transferred to a
QIB in accordance with Rule 144A or pursuant to an effective
registration statement under the Securities Act, a certification
to that effect (in substantially the form of Exhibit B attached
hereto); or
(iii) if such Restricted Note is being transferred in
reliance on another exemption from the registration requirements
of the Securities Act, a certification to that effect (in
substantially the form of Exhibit B attached hereto) and an
Opinion of Counsel reasonably acceptable to the Company and the
Registrar to the effect that such transfer is in compliance with
the Securities Act.
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(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may be exchanged for a beneficial interest in a
Global Note only upon receipt by the Trustee of a Definitive Note, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(i) written instructions directing the Trustee to make
an endorsement on the Global Note to reflect an increase in the
aggregate principal amount of the Notes represented by the
Global Note, and
(ii) if such Definitive Note is a Restricted Note, a
certification (in substantially the form of Exhibit B attached
hereto) to the effect that such Definitive Note is being
transferred to a QIB in accordance with Rule 144A;
in which case the Trustee shall cancel such Definitive Note and cause the
aggregate principal amount of Notes represented by the Global Note to be
increased accordingly. If no Global Note is then outstanding, the Company shall
issue and the Trustee shall authenticate a new Global Note in the appropriate
principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture and the procedures of
the Depository therefor, which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note. Upon receipt by the Trustee of written transfer instructions
(or such other form of instructions as is customary for the Depository), from
the Depository (or its nominee) on behalf of any Person having a beneficial
interest in a Global Note, the Trustee shall, in accordance with the standing
instructions and procedures existing between the Depository and the Trustee,
cause the aggregate principal amount of Global Notes to be reduced accordingly
and, following such reduction, the Company shall execute and the Trustee shall
authenticate and make available for delivery to the transferee a Definitive Note
in the appropriate principal amount; provided, that in the case of a Restricted
Note, such instructions shall be accompanied by the following additional
documents:
(i) if such beneficial interest is being transferred to
the Person designated by the Depository as being the beneficial
owner, a certification to that effect (in substantially the form
of Exhibit B attached hereto); or
(ii) if such beneficial interest is being transferred to
a QIB in accordance with Rule 144A or pursuant to an effective
registration statement under the Securities Act, a certification
to that effect (in substantially the form of Exhibit B attached
hereto); or
(iii) if such beneficial interest is being transferred
in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that
effect (in substantially the form of Exhibit B attached hereto)
and, if the Trustee deems it
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appropriate, an Opinion of Counsel reasonably acceptable to the
Company and to the Registrar to the effect that such transfer is
in compliance with the Securities Act.
Definitive Notes issued in exchange for a beneficial interest in
a Global Note shall be registered in such names and in such authorized
denominations as the Depository shall instruct the Trustee.
(e) Transfer and Exchange of Global Notes. Notwithstanding any
other provision of this Indenture, the Global Note may not be transferred as a
whole except by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository; provided, that if:
(i) the Depository notifies the Company that the
Depository is unwilling or unable to continue as Depository and
a successor Depository is not appointed by the Company within 90
days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of
Definitive Notes under this Indenture,
then the Company shall execute and the Trustee shall authenticate and make
available for delivery, Definitive Notes in an aggregate principal amount equal
to the aggregate principal amount of the Global Note in exchange for such Global
Note.
(f) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in the Global Note have either been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the Global Note shall be
returned to or retained and cancelled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in the Global Note is exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the aggregate principal
amount of Notes represented by such Global Note shall be reduced accordingly and
an endorsement shall be made on such Global Note by the Trustee to reflect such
reduction.
(g) General Provisions Relating to Transfers and Exchanges of
Notes. To permit registrations of transfers and exchanges, the Company shall
execute and the Trustee shall authenticate Definitive Notes and Global Notes at
the Registrar's request. All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes shall
be legal, valid and binding obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Notes or Global Notes surrendered upon such registration of transfer or
exchange.
No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental charge
payable upon exchange (without transfer to another Person) pursuant to Sections
2.10, 3.1 and 9.5)
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The Company shall not be required to (i) issue, register the
transfer of or exchange Notes during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption under Section 3.2
and ending at the close of business on the day of such mailing; or (ii) register
the transfer of or exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part; or (iii)
register the transfer of or exchange a Note between a record date and the next
succeeding interest payment date.
Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Note is registered as the absolute owner of such Note for all
purposes, and neither the Trustee, any Agent nor the Company shall be affected
by notice to the contrary.
(h) Exchange of Series A Notes for Series B Notes. The Series A
Notes may be exchanged for Series B Notes pursuant to the terms of the Exchange
Offer. The Trustee and Registrar shall make the exchange as follows:
The Company shall present the Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Series B Notes, the transactions
contemplated by the Exchange Offer have been consummated;
and
(B) the principal amount of Series A Notes properly tendered
in the Exchange Offer that are represented by a Global
Note and the principal amount of Series A Notes properly
tendered in the Exchange Offer that are represented by
Definitive Notes, the name of each Holder of such
Definitive Notes, the principal amount at maturity
properly tendered in the Exchange Offer by each such
Holder and the name and address to which Series B Notes
represented by Definitive Notes shall be registered and
sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii)
an Opinion of Counsel (x) to the effect that the Series B Notes have been
registered under Section 5 of the Securities Act and this Indenture has been
qualified under the TIA and (y) with respect to the matters set forth in Section
6 of the Registration Rights Agreement and (iii) a Company Order, shall
authenticate (A) a Global Note for Series B Notes in an aggregate principal
amount equal to the aggregate principal amount of Series A Notes represented by
a Global Note indicated in such Officers' Certificate as having been properly
tendered and (B) Definitive Notes representing Series B Notes registered in the
names of, and in the principal amounts indicated in such Officers' Certificate.
If the principal amount at maturity of the Global Note for the
Series B Notes is less than the principal amount at maturity of the Global Note
for the Series A Notes, the Trustee shall make an endorsement on such Global
Note for Series A Notes indicating a reduction in the principal amount at
maturity represented thereby.
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Section 2.7 Replacement Notes. If a mutilated Note is surrendered to the
Trustee or if the Holder of a Note claims and submits an affidavit or other
evidence, satisfactory to the Company and Trustee, to the Trustee to the effect
that the Note has been lost, destroyed or wrongfully taken, the Company shall
issue and the Trustee shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, such Holder
must provide an indemnity bond or other indemnity, sufficient in the judgment of
both the Company and the Trustee, to protect the Company, the Trustee or any
Agent from any loss which any of them may suffer if a Note is replaced. The
Company and the Trustee may charge such Holder for its reasonable, out-of-pocket
expenses in replacing a Note. Every replacement Note is an additional obligation
of the Company.
Section 2.8 Outstanding Notes. Notes outstanding at any time are all the
Notes that have been authenticated by the Trustee except those cancelled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section 2.8 as not outstanding. A Note does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Note, except as provided in Section 2.9.
If a Note is replaced pursuant to Section 2.7 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.7.
If on a Redemption Date or the Maturity Date the Paying Agent
(other than the Company or an Affiliate of the Company) holds U.S. Legal Tender
or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Notes payable on that date, then on and after that date such
Notes cease to be outstanding and interest on them ceases to accrue.
Section 2.9 Treasury Notes. In determining whether the Holders of the
required outstanding principal amount of Notes have concurred in any direction,
amendment, supplement, waiver or consent, Notes owned by the Company and
Affiliates of the Company shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, amendment, supplement, waiver or consent, only Notes that the Trustee
knows or has reason to know are so owned shall be disregarded.
Section 2.10 Temporary Notes. Until Definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of Definitive Notes
but may have variations that the Company reasonably and in good faith considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate Definitive Notes in exchange for
temporary Notes. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as permanent Notes
authenticated and delivered hereunder.
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Section 2.11 Cancellation. The Company at any time may deliver Notes to
the Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Notes surrendered to them for transfer, exchange or payment.
The Trustee, or, at the direction of the Trustee, the Registrar or the Paying
Agent (other than the Company or any Affiliate of the Company), and no one else,
shall cancel, but in no event shall be required to destroy, all Notes
surrendered for transfer, exchange, payment or cancellation. Subject to Section
2.7, the Company may not issue new Notes to replace Notes it has paid or
delivered to the Trustee for cancellation. No Notes shall be authenticated in
lieu of or in exchange for any Notes cancelled as provided in this Section 2.11,
except as expressly permitted in the forms of Note and as permitted by this
Indenture.
Section 2.12 Defaulted Interest. Interest on any outstanding Note which
is payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Note (or one or more
predecessor Notes) is registered at the close of business on the Record Date for
such interest.
Any interest on any outstanding Note which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date plus, to the
extent lawful, any interest payable on the defaulted interest (herein called
"DEFAULTED INTEREST") shall forthwith cease to be payable to the registered
Holder on the relevant Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Notes (or
their respective predecessor Notes) are registered at the close
of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note
and the date of the proposed payment, and, at the same time, the
Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as
provided in this clause (1). Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder at his
address set forth upon the registry books of the Company on the
10th day prior to such Special Record Date. The Trustee may, in
its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a
newspaper, customarily published in the English language on each
Business Day and of general circulation in the Borough of
Manhattan, The City of New York, but such publication shall not
be a condition precedent to the establishment of
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such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having
been mailed as aforesaid, such Defaulted Interest shall be paid
to the Persons in whose names the Notes (or their respective
predecessor Notes) are registered on such Special Record Date
and shall no longer be payable pursuant to the following clause
(2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes may
be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause accompanied by
an Opinion of Counsel stating that the manner of payment
complies with this clause, such manner shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Note shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Note.
Section 2.13 Computation of Interest. Interest on the Notes will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
Section 2.14 Legends. Except as permitted by subsection (b) hereof, each
Note shall bear legends relating to restrictions on transfer pursuant to the
securities laws in substantially the form set forth on Exhibit A attached
hereto.
(a) Upon any sale or transfer of a Restricted Note (including
any Restricted Note represented by a Global Note) pursuant to Rule 144A under
the Securities Act or pursuant to an effective registration statement under the
Securities Act:
(i) in the case of any Restricted Note that is a
Definitive Note, the Registrar shall permit the Holder thereof
to exchange such Restricted Note for a Definitive Note that does
not bear the legends required by subsection (a) above; and
(ii) in the case of any Restricted Note represented by a
Global Note, such Restricted Note shall not be required to bear
the legends required by subsection (a) above, but shall continue
to be subject to the provisions of Section 2.6(c); provided,
that with respect to any request for an exchange of a Restricted
Note that is represented by a Global Note for a Definitive Note
that does not bear the legends required by subsection (a) above,
which request is made in reliance upon Rule 144A, the Holder
thereof shall certify in writing to the Registrar that such
request is being made pursuant to Rule 144A.
(b) The Company shall issue and the Trustee shall authenticate
Series B Notes in exchange for Series A Notes accepted for exchange in the
Exchange Offer. The Series B Notes shall not bear the legends required by
subsection (a) above unless the Holder of such Series A Notes is either (A) a
broker-dealer who purchased Series A Notes directly from the
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Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act, or (B) a Person participating in the distribution of the
Series A Notes.
Section 2.15 PIK Notes. On each Interest Payment Date through and
including December 1, 2000, the Company may, at its option and in its sole
discretion, in lieu of the payment of interest in cash on the Notes, pay
interest on all outstanding Notes in whole, but not in part, through the
issuance of PIK Notes ("PIK NOTES"), in denominations (rounded, if necessary to
the nearest dollar) of $1 and integral multiples thereof, in an aggregate
principal amount equal to the amount of interest that would be payable with
respect to such Notes, if such interest were paid in cash. The Company shall
notify the Holders and the Trustee in writing of its election to pay interest
through the issuance of PIK Notes not less than 10 nor more than 45 days prior
to the record date for an Interest Payment Date on which PIK Notes will be
issued. On each such Interest Payment Date, the Company shall issue and deliver
PIK Notes to each Holder as of the relevant Record Date in the aggregate
principal amount required to pay such interest. Each PIK Note is an additional
obligation of the Company and shall be governed by, and entitled to the benefits
of, and shall be subject to the terms of, this Indenture and shall rank pari
passu with and be subject to the same terms (including the interest rate from
time to time payable thereon) as the Notes with respect to which such PIK Notes
were issued (except, as the case may be, with respect to the issuance date and
aggregate principal amount).
Section 2.16 Additional Notes. The Company may, at its option and in its
sole discretion, issue Additional Notes ("ADDITIONAL NOTES"), in denominations
(rounded, if necessary to the nearest dollar) of $1 and integral multiples
thereof, in an aggregate principal amount of up to $150,000,000. The Company
shall notify the Holders and the Trustee in writing of any issuance of
Additional Notes not less than 10 days prior to the date on which Additional
Notes will be issued. Each Additional Note is an additional obligation of the
Company and shall be governed by, and entitled to the benefits of, and shall be
subject to the terms of, this Indenture and shall rank pari passu with and be
subject to the same terms (including the interest rate from time to time payable
thereon) as any other Note (except, as the case may be, with respect to the
issuance date and aggregate principal amount).
ARTICLE III
REDEMPTION
Section 3.1 Right of Redemption. Redemption of Notes, as permitted or
required by any provision of this Indenture, shall be made in accordance with
such provision and this Article III. The Notes may be redeemed at the election
of the Company, as a whole or from time to time in part, at any time, at the
applicable Redemption Price specified in Paragraph 5 of the forms of Note
attached as Exhibit A hereto, set forth therein under the caption "Optional
Redemption," in each case, including accrued and unpaid interest, if any, to the
Redemption Date.
Section 3.2 Notices to Trustee. If the Company elects to redeem Notes
pursuant to Paragraph 5 of the Notes, it shall notify the Trustee in writing of
the Redemption Date and the
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principal amount of Notes to be redeemed and whether it wants the Trustee to
give notice of redemption to the Holders.
The Company shall give each notice to the Trustee provided for in
this Section 3.2 at least 30 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee).
Section 3.3 Selection of Notes to Be Redeemed. If less than all of the
Notes are to be redeemed pursuant to Paragraph 5 thereof, the Trustee shall
select the Notes to be redeemed, pro rata, by lot or in such other manner as in
its sole discretion it deems appropriate and fair, and in such manner as
complies with any applicable legal and stock exchange requirements.
The Trustee shall make the selection from the Notes outstanding
and not previously called for redemption and shall promptly notify the Company
in writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.4 Notice of Redemption. At least 15 days but not more than 60
days before a Redemption Date, the Company shall mail a notice of redemption by
first class mail, postage prepaid, to the Trustee and each Holder whose Notes
are to be redeemed. At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense. The date fixed
for redemption contained in any notice of redemption and the obligation of the
Company to redeem any Notes upon such date may be subject to the satisfaction or
waiver of conditions determined by the Company in its sole discretion. Each
notice for redemption shall identify the Notes to be redeemed and shall state
the following and such other matters as the Trustee shall deem proper:
(1) the Redemption Date;
(2) the Redemption Price, including the amount of accrued
and unpaid interest to be paid upon such redemption;
(3) the name, address and telephone number of the Paying
Agent;
(4) that Notes called for redemption must be surrendered to
the Paying Agent at the address specified in such notice
to collect the Redemption Price;
(5) that, unless the Company defaults in its obligation to
deposit U.S. Legal Tender with the Paying Agent in
accordance with Section 3.6, interest on Notes called
for redemption ceases to accrue on Notes called for
redemption on and after the Redemption Date and the only
remaining right of the Holders of such Notes is to
receive payment of the Redemption
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Price, including accrued and unpaid interest, upon
surrender to the Paying Agent of the Notes called for
redemption and to be redeemed;
(6) if any Note is being redeemed in part, the portion of
the principal amount, equal to $1,000 or any integral
multiple thereof, of such Note that will not be redeemed
and that, after the Redemption Date, and upon surrender
of such Note, a new Note or Notes in aggregate principal
amount equal to the unredeemed portion thereof will be
issued;
(7) if less than all the Notes are to be redeemed, the
identification of the particular Notes (or portion
thereof) to be redeemed, as well as the aggregate
principal amount of such Notes to be redeemed and the
aggregate principal amount of Notes to be outstanding
after such partial redemption;
(8) the CUSIP number of the Notes to be redeemed; and
(9) that the notice is being sent pursuant to this Section
3.4 and pursuant to the redemption provisions of
Paragraph 5 of the Notes.
Section 3.5 Effect of Notice of Redemption. Once notice of redemption is
mailed in accordance with Section 3.4, Notes called for redemption shall become
due and payable on the Redemption Date and at the Redemption Price, including
accrued and unpaid interest. Upon surrender to the Trustee or Paying Agent, such
Notes called for redemption shall be paid at the Redemption Price, including
interest, if any, accrued and unpaid on the Redemption Date; provided that if
the Redemption Date is after a regular Record Date and on or prior to the
Interest Payment Date, the accrued interest through the Redemption Date shall be
payable to the Holder of the redeemed Notes registered on the relevant Record
Date; and provided, further, that if a Redemption Date is a Legal Holiday,
payment shall be made on the next succeeding Business Day and no interest shall
accrue for the period from such Redemption Date to such succeeding Business Day.
Upon compliance by the Company with the provisions of this
Article III, including but not limited to Section 3.6, and upon satisfaction or
waiver of any conditions precedent to the Company's obligation to effect such
redemption contained in the related notice of redemption, interest on the Notes
called for redemption will cease to accrue on the Notes called for redemption,
on and after the Redemption Date, regardless of whether such Notes are presented
for payment.
Section 3.6 Deposit of Redemption Price. On or prior to the Redemption
Date, the Company shall deposit with the Paying Agent (other than the Company or
an Affiliate of the Company) U.S. Legal Tender sufficient to pay the Redemption
Price of, including accrued and unpaid interest on, all Notes to be redeemed on
such Redemption Date (other than Notes or portions thereof called for redemption
on that date that have been delivered by the Company to the Trustee for
cancellation). The Paying Agent shall promptly return to the Company any U.S.
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Legal Tender so deposited which is not required for that purpose upon the
written request of the Company.
If the Company complies with the preceding paragraph and the
other provisions of this Article III, interest on the Notes to be redeemed will
cease to accrue on the applicable Redemption Date regardless of whether such
Notes are presented for payment. Notwithstanding anything herein to the
contrary, if any Note surrendered for redemption in the manner provided in the
Notes shall not be so paid upon surrender for redemption because of the failure
of the Company to comply with the preceding paragraph, interest shall continue
to accrue and be paid from the Redemption Date until such payment is made on the
unpaid principal and, to the extent lawful, on any interest not paid on such
unpaid principal, in each case at the rate and in the manner provided in Section
4.1 and the Note.
Section 3.7 Notes Redeemed in Part. Upon surrender of a Note that is to
be redeemed in part, the Company shall execute and the Trustee shall
authenticate and deliver to the Holder, without service charge, a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
ARTICLE IV
COVENANTS
Section 4.1 Payment of Notes.
The Company shall pay the principal of and interest on the
outstanding Notes on the dates and in the manner provided in the Notes to the
Trustee at its New York agent's office unless otherwise instructed in writing by
the Trustee. An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or an Affiliate of the Company) holds for the benefit of the
Holders, on or before 12:00 noon, New York time on that date, U.S. Legal Tender
deposited and designated for and sufficient to pay the installment. The Company
shall pay any and all amounts, including without limitation, Yield Enhancement,
if any, on the dates and in the manner required under the Registration Rights
Agreement.
The Company shall pay interest on overdue principal and on
overdue installments of interest at the rate specified in the Notes compounded
semi-annually, to the extent lawful.
Notwithstanding anything to the contrary contained in this
Indenture, the Company or the Trustee may, to the extent required by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal, premium or interest payments on the Notes.
Section 4.2 Maintenance of Office or Agency. The Company shall maintain
in the Borough of Manhattan in The City of New York, New York, an office or
agency where Notes may be presented or surrendered for payment, where Notes may
be surrendered for registration
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of transfer or exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company shall give
prior written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 12.2.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan in The City of New York, New York, for such purposes. The
Company shall give prior written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency. The Company hereby initially designates the corporate trust office of
the Trustee in the Borough of Manhattan in the City of New York, New York, as
such office of the Company.
Section 4.3 Limitation on Restricted Payments. The Company shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, make
any Restricted Payment; provided, however, that the Company and its Subsidiaries
may make a Restricted Payment if, at the time and after giving effect thereto on
a pro forma basis, no Default or Event of Default would occur or be continuing,
and:
(a) the Company's Consolidated Fixed Charge Coverage
Ratio exceeds 3.0 to 1; and
(b) the aggregate amount of all Restricted Payments made
by all of the Company and its Subsidiaries, including such
proposed Restricted Payment and all payments that may be made
pursuant to the proviso at the end of this sentence (if not made
in cash, then the fair market value of any Property used
therefor), from and after the Issue Date and on or prior to the
date of such Restricted Payment, would not exceed an amount
equal to (x) 50% of Adjusted Consolidated Net Income of the
Company accrued for the period (taken as one accounting period)
from the first full fiscal quarter that commenced after the
Issue Date to and including the fiscal quarter ended immediately
prior to the date of each calculation for which financial
statements are available (or, if the Company's Adjusted
Consolidated Net Income for such period is a deficit, then minus
100% of such deficit), plus (y) the aggregate Net Proceeds
received by the Company from the issuance or sale (other than to
a Subsidiary of the Company) of its Qualified Capital Stock from
and after the Issue Date and on or prior to the date of such
Restricted Payment, minus (z) 100% of the amount of any
write-downs, write-offs, other negative revaluations, and other
negative extraordinary charges not otherwise reflected in the
Company's Adjusted Consolidated Net Income during such period;
provided, that this Section 4.3 shall not prohibit the payment of any dividend
by the Company to TCR Holding in an amount equal to the next scheduled payment
of the TCR Holding Intercompany Obligations to the extent that (x) no Default
has occurred and is continuing and (y)
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the Company receives a certificate from the Independent Engineer to the effect
that amounts remaining in the Construction Disbursement Account, together with
an amount equal to (A) 50% of Projected Net Operating Cash Flow from the date
such dividend is declared for the next 90 day period plus (B) an amount equal to
the portion of the proceeds of the Port Commission Bond Financing held by the
entity serving as collateral agent or in similar capacity with respect to such
financing the Capital Improvement Program, plus (C) without duplication, cash on
hand that has been approved by the Company's Board of Directors to be escrowed
in a segregated account and allocated only for the purpose of completion of the
Capital Improvement Program, are sufficient to make all Capital Expenditures
necessary in the opinion of the Independent Engineer to complete the Capital
Improvement Program; provided, further, that this Section 4.3 shall not prohibit
the payment of any dividend within 60 days after the date of its declaration if
such dividend could have been made on the date of its declaration in compliance
with the foregoing provisions.
Section 4.4 Corporate Existence. Subject to Article V, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the corporate or other existence of each
of its Subsidiaries in accordance with the respective organizational documents
of each of them and the rights (charter and statutory) and corporate franchises
of the Company and each of its Subsidiaries; provided, however, that the Company
shall not be required to preserve, with respect to itself, any right or
franchise, and with respect to any of its Subsidiaries, any such existence,
right or franchise, if (a) the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and (b) the loss thereof is not disadvantageous in any
material respect to the Holders.
Section 4.5 Payment of Taxes and Other Claims. The Company shall, and
shall cause each of its Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, all taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon the Company or any of its
Subsidiaries or any of their respective properties and assets; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment or charge whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which disputed amounts adequate reserves have been
established in accordance with GAAP.
Section 4.6 Maintenance of Properties and Insurance.
(a) Each of the Company and its Subsidiaries shall cause the
properties to be used or useful to the conduct of its business and the business
of itself and each of its Subsidiaries to be maintained and kept in good
condition, repair, and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment and shall cause to be made all necessary
repairs, renewals, replacements, betterments, and improvements thereof, all as
in its reasonable judgment may be necessary, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
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(b) Each of the Company and its Subsidiaries shall provide, or
cause to be provided, for itself and each of its Subsidiaries, insurance
(including appropriate self-insurance) against loss or damage of the kinds that
are set forth herein or in the Mortgage, with reputable insurers or with the
government of the United States of America or an agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as are set
forth in the Mortgage. In addition, all such insurance shall be payable to the
Trustee as loss payee, as its interests may appear, under a "standard" or
"Texas" mortgagee and loss payee clause. Without limiting the foregoing, each of
the Company and its Subsidiaries shall (i) keep all of its physical Property
insured with hazard insurance on an "all risks" basis, with broad form flood and
earthquake coverages and electronic data processing coverage, with a full
replacement cost endorsement and an "agreed amount" clause in an amount equal to
100% of the full replacement cost of such Property, (ii) maintain all such
workers' compensation or similar insurance as may be required by law and (iii)
maintain, in amounts and with deductibles equal to those generally maintained by
businesses engaged in similar activities in similar geographic areas, general
public liability insurance against claims of bodily injury, death or Property
damage occurring on, in or about the properties of the Company and its
Subsidiaries.
(c) All policies of insurance shall provide for at least 15
days' prior written cancellation notice to the Trustee. In the event of failure
by the Company and its Subsidiaries to provide and maintain insurance as herein
provided, any one or more Holders may, at their option, provide such insurance
and charge the amount thereof to the Company and its Subsidiaries. The Company
and its Subsidiaries shall furnish the Trustee with certificates of insurance
and policies evidencing compliance with the foregoing insurance provision.
Section 4.7 Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee within 60 days
after the end of each of its fiscal quarters, or 105 days after the end of a
fiscal quarter that is also the end of a fiscal year, an Officers' Certificate
complying with Section 314(a)(4) of the TIA and stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
quarter has been made under the supervision of the signing Officers with a view
to determining whether the Company and its Subsidiaries have kept, observed,
performed and fulfilled its obligations (excluding those obligations addressed
by Section 11.2) under this Indenture and further stating, as to each such
Officer signing such certificate, regardless of whether the signer knows of any
failure by the Company or any Subsidiary of the Company to comply with any
conditions or covenants in this Indenture, or of the occurrence of any Default,
and, if such signor does know of such a failure to comply or Default, the
certificate shall describe such failure or Default with particularity.
(b) The Company shall promptly deliver to the Trustee within 90
days after the end of each of its fiscal years a written report of a firm of
independent certified public accountants with an established national reputation
stating that in conducting their audit for such fiscal year, nothing has come to
their attention that caused them to believe that the Company or any Subsidiary
of the Company was not in compliance with the provisions set forth in Section
4.3 or 4.11.
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(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, immediately upon becoming aware of any
Default or Event of Default under this Indenture, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto. The Trustee shall not be deemed
to have knowledge of a Default or an Event of Default unless one of its trust
officers receives notice of the Default giving rise thereto from the Company or
any of the Holders.
Section 4.8 Commission Reports. The Company and each of its
Subsidiaries, where applicable, shall deliver to the Trustee and each Holder,
within 15 days after it files the same with the Commission, copies of all
reports and information (or copies of such portions of any of the foregoing as
the Commission may by rules and regulations prescribe), if any, which such
Person is required to file with the Commission in accordance with Section 13 or
15(d) of the Exchange Act. The Company shall, at any time it is not subject to
Section 13 or 15(d) of the Exchange Act and to the extent permitted by the
Exchange act, file with the Trustee and the Commission such supplementary and
periodic information, reports and documents as it would be required to file if
it were so subject as if it were so subject. Prior to the Phase II Completion
Date, the Company shall include in all such reports filed with the Commission
(other than current reports filed on form 8-K) a summary of the status of the
Capital Improvement Program, including a description of sources of funds
available for the completion of the Capital Improvement Program. The Company
agrees to continue to be subject to and comply with the filing and reporting
requirements of the Commission as long as any of the Notes are outstanding.
Concurrently with the reports delivered pursuant to the preceding
paragraph, the Company shall deliver to the Trustee and to each Holder annual
and quarterly financial statements with appropriate footnotes of the Company and
its Subsidiaries, all prepared and presented in a manner substantially
consistent with those of the Company required by the preceding paragraph. The
Company shall also comply with the other provisions of Section 314(a) of the
TIA.
So long as is required for an offer or sale of the Notes to
qualify for an exemption under Rule 144A, the Company shall, upon request,
provide the information required by clause (d)(4) thereunder to each Holder and
to each beneficial owner and prospective purchaser of Notes identified by any
Holder of Restricted Notes.
Section 4.9 Limitation on Status as Investment Company or Public Utility
Company. The Company shall not, and shall not permit any of its Subsidiaries to
become an "investment company" (as that term is defined in the Investment
Company Act of 1940, as amended), or a "holding company," or "public utility
company" (as such terms are defined in the Public Utility Holding Company Act of
1935, as amended), or otherwise become subject to regulation under the
Investment Company Act or the Public Utility Holding Company Act.
Section 4.10 Limitation on Transactions with Related Persons.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, enter directly or indirectly into, or permit to exist, any
transaction or series of related transactions with any Related Person (including
without limitation: (i) the sale, lease, transfer, or other disposition
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of properties, assets, or securities to such Related Person; (ii) the purchase
or lease of any properties, assets, or securities from such Related Person;
(iii) an Investment in such Related Person (excluding Investments permitted to
be made pursuant to clauses (v), (vii), (ix) or (x) of the definition of
"Permitted Investment"); and (iv) entering into or amending any contract or
agreement with or for the benefit of a Related Person (each a "RELATED PERSON
TRANSACTION")), except for (a) Restricted Payments excluded from the definition
of Restricted Payments by the proviso contained in the definition of "Restricted
Payments," (b) transactions made in good faith, the terms of which are (x) fair
and reasonable to the Company or such Subsidiary, as the case may be, and (y)
are at least as favorable as the terms which could be obtained by the Company or
such Subsidiary, as the case may be, in a comparable transaction made on an
arm's length basis with Persons who are not Related Persons, (c) transactions
between the Company and any of its wholly owned Subsidiaries or transactions
between wholly owned Subsidiaries of the Company, (d) transactions pursuant to
the Asset Sale Agreements, the Services Agreement, the Expense Reimbursement
Agreement, the Secondment Agreement, the Tax Allocation Agreement, the Security
Documents, the Registration Rights Agreement, the Exchange and Registration
Rights Agreement, the Stockholders Agreements and the Office Lease, provided
that payments under such Office Lease do not exceed in the aggregate $500,000
per year, (e) amounts payable by the Company to Southeast Louisiana Contractors
of Norco, Inc., pursuant to the contract between such parties as in effect on
the Issue Date, for employee services provided to the Company, not to exceed
actual costs of payroll, payroll taxes and employee benefits, plus related
administrative costs, (f) indemnity provided on behalf of officers, directors,
employees or consultants of the Company or of its Subsidiaries, as approved by a
majority of the directors of the Company or such Subsidiary, (g) the delivery to
TEC, TARC or TCR Holding of Senior Secured Notes due 2002 of TEC or of the TARC
Notes in satisfaction of all or a portion of the TCR Holding Intercompany
Obligations, (h) payments of dividends in compliance with the penultimate
proviso of Section 4.3 and (i) transactions that are a part of the Transaction
on the Issue Date.
(b) As an additional restriction on the foregoing, (a) with respect to
any Related Person Transaction or series of Related Person Transactions (other
than any Related Person Transaction described in clause (a) (with respect to
permitted Restricted Payments by virtue of clauses (a), (b), (c), (f) and (g) of
the proviso contained in the definition of "Restricted Payments"), (c), (d)
(other than any amendment to any agreement referred to in such clause), (e)
(other than any amendment to the contract referred to in such clause), (f) or
(h) of the first paragraph of this Section 4.10) with an aggregate value in
excess of $1,000,000, such transaction must first be approved by a majority of
the Board of Directors of the Company or its Subsidiary which is the transacting
party and a majority of the directors of such entity who are disinterested in
the transaction pursuant to a Board Resolution, as (i) fair and reasonable to
the Company or such Subsidiary, as the case may be, and (ii) on terms which are
at least as favorable as the terms which could be obtained by the Company or
such Subsidiary, as the case may be, on an arm's length basis with Persons who
are not Related Persons, and (b) with respect to any Related Person Transaction
or series of related Person Transactions (other than any Related Person
Transaction described in clause (a) (with respect to permitted Restricted
Payments by virtue of clauses (a), (b), (c), (f) and (g) of the proviso
contained in the definition of "Restricted Payments"), (c), (d) (other than any
amendment to any agreement referred to in such clause), (e) (other than any
amendment to the contract referred to in such clause), (f) or (h) of clause (a)
of
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this Section 4.10) with an aggregate value in excess of $5,000,000, the Company
must first obtain a favorable written opinion as to the fairness of such
transaction to the Company or such Subsidiary, as the case may be, from a
financial point of view, from a nationally recognized investment banking or
accounting firm.
Section 4.11 Limitation on Incurrences of Additional Debt and
Issuances of Disqualified Capital Stock. Except as set forth in this Section
4.11, from and after the Issue Date, the Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee, or otherwise become liable for, contingently or otherwise (to "INCUR"
or, as appropriate, an "INCURRENCE"), any Debt or issue any Disqualified Capital
Stock, except:
(a) Debt evidenced by the Notes (other than the Additional
Notes) or the Guarantees;
(b) Subordinated Debt of the Company solely to any Guarantor, or
Debt of any Guarantor solely to the Company or to any Guarantor;
(c) Debt in an aggregate principal amount at any one time not to
exceed the greater of (x) $100,000,000 or (y) the Borrowing Base;
(d) Debt in an aggregate principal amount not to exceed at any
one time $10,000,000;
(e) Debt Incurred in connection with the Port Commission Bond
Financing and the Tank Storage Debt, and in each case any Attributable Debt
related thereto, in an aggregate amount not to exceed $115,000,000;
(f) [INTENTIONALLY OMITTED];
(g) Debt Incurred as an extension, renewal, replacement,
modification or refunding of any item of the Debt permitted to be Incurred by
clause (e) of this Section 4.11, the third paragraph of this Section 4.11 or
this clause (g) (each such item of Debt is collectively referred to as
"REFINANCING DEBT"), provided that (1) the maximum principal amount of each item
of Refinancing Debt (or, if such Refinancing Debt is issued with original issue
discount, the original issue price of such Refinancing Debt) permitted under
this clause (g) may not exceed the lesser of (x) the principal amount of the
item of Debt being extended, renewed, replaced, modified or refunded plus
reasonable fees incurred to secure such Refinancing Debt, or (y) if such item of
Debt being extended, renewed, replaced, modified or refunded was issued at an
original issue discount, the original issue price, plus amortization of the
original issue discount at the time of the Incurrence of the Refinancing Debt
plus reasonable fees incurred to secure such Refinancing Debt, (2) each item of
Refinancing Debt has a Weighted Average Life and a final maturity that is equal
to or greater than the related Debt being extended, renewed, replaced, modified
or refunded at the time of such extension, renewal, replacement, modification or
refunding and (3) each item of Refinancing Debt shall rank with respect to the
Notes to an extent
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no less favorable in respect thereof to the Holders than the related Debt being
refinanced and shall be issued by the same issuer thereof;
(h) Debt represented by trade payables or accrued expenses, in
each case, incurred on normal, customary terms in the ordinary course of
business, not overdue for a period of more than 90 days (or, if overdue for a
period of more than 90 days, being contested in good faith and by appropriate
proceedings and adequate reserves with respect thereto being maintained on the
books of the obligor thereunder in accordance with GAAP) and not constituting
any amounts due to banks or other financial institutions;
(i) Swap Obligations;
(j) Debt Incurred and Disqualified Capital Stock issued on the
Issue Date as part of the Transaction or in connection with the issuance of
Additional Notes;
(k) Letters of credit and reimbursement obligations relating
thereto to the extent collateralized by cash or Cash Equivalents;
(l) Debt in an amount not to exceed $75,000,000 in aggregate
principal amount at any one time outstanding;
(m) Debt secured by Liens permitted pursuant to clauses (g) and
(i) of the definition of "Permitted Liens" not to exceed $35,000,000 in
aggregate principal amount at any one time outstanding; and
(n) any guarantee of Debt permitted by clauses (c), (d), (e),
(f), (g) or (m) hereof.
For the purpose of determining the amount of outstanding Debt
that has been Incurred pursuant to this Section 4.11, there shall be included in
any of the foregoing clauses the principal amount then outstanding of any Debt
originally Incurred pursuant to such clause and, after any renewal, replacement
or refunding of such Debt, any outstanding Debt Incurred pursuant to clause (g)
above so as to renew, replace or refund such Debt Incurred pursuant to this
Section 4.11 and any subsequent renewals, replacements, refinancings or
refundings thereof.
Notwithstanding the foregoing provisions of this Section 4.11,
the Company and its Subsidiaries may Incur Subordinated Debt and the Company and
its Subsidiaries may issue Disqualified Capital Stock if, at the time such
Subordinated Debt is Incurred or such Disqualified Capital Stock is issued, (i)
no Default or Event of Default shall have occurred and be continuing at the time
or immediately after giving effect to such transaction on a pro forma basis, and
(ii) immediately after giving effect to the Consolidated Fixed Charges in
respect of such Subordinated Debt being Incurred or such Disqualified Capital
Stock being issued and the application of the proceeds therefrom to the extent
used to reduce Debt or Disqualified Capital Stock, on a pro forma basis, the
Consolidated Fixed Charge Coverage Ratio of the Company for the Reference Period
is greater than 2.5 to 1.
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Debt Incurred and Disqualified Capital Stock issued by any Person
that is not a Subsidiary of the Company, which Debt or Disqualified Capital
Stock is outstanding at the time such Person becomes a Subsidiary of or is
merged into or consolidated with, the Company or one of its Subsidiaries, as the
case may be, shall be deemed to have been Incurred or issued, as the case may
be, at the time such Person becomes a Subsidiary of, or is merged into, or
consolidated with the Company, or one of its Subsidiaries.
For the purpose of determining compliance with this Section 4.11,
(A) if an item of Debt meets the criteria of more than one of the types of Debt
described in the above clauses (a) through (m), the Company or the Subsidiary in
question shall have the right to determine in its sole discretion the category
to which such Debt applies and shall not be required to include the amount and
type of such Debt in more than one of such categories and may elect to apportion
such item of Debt between or among any two or more of such categories otherwise
applicable, and (B) the amount of any Debt which does not pay interest in cash
or which was issued at a discount to face value shall be deemed to be equal to
the amount of the liability in respect thereof determined in accordance with
GAAP.
Section 4.12 Limitations on Restricting Subsidiary Dividends. The
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, create, assume, or suffer to exist any consensual encumbrance or
restriction on the ability of any Subsidiary of the Company to (a) pay dividends
or make other distributions on the Capital Stock of any Subsidiary of the
Company, (b) make payments on or in respect of any Debt owed to the Company or
any of its Subsidiaries, (c) make loans or advances to the Company or any of its
Subsidiaries or (d) transfer any of its assets to the Company or any of its
Subsidiaries, in each case except encumbrances and restrictions (i) existing
under this Indenture, the Notes and the Security Documents, or any Debt
permitted to be Incurred as described in clause (c) or (e) of Section 4.11; (ii)
existing under agreements in effect on the Issue Date; (iii) in any agreement of
a Person acquired by the Company or a Subsidiary of the Company, which
restrictions existed at the time of acquisition, were not put in place in
anticipation of such acquisition and are not applicable to any Person or
Property other than the Person or any Property of the Person so acquired; (iv)
existing under any agreement that refinances or replaces any of the agreements
under clause (ii) or (iii) above; provided that the terms and conditions of any
such restrictions are not materially less favorable to the Company or such
Subsidiary than those under the agreement refinanced or replaced; and (v)
customary non-assignment and sublease provisions of any lease governing a
leasehold interest of the Company or such Subsidiary or any contract or
agreement of the Company or such Subsidiary entered into in the ordinary course
of business under which goods or services will be provided.
Section 4.13 Limitation on Liens. The Company shall not, and shall not
permit any Subsidiary to, directly or indirectly, Incur, or suffer to exist, any
Lien upon any of their respective properties or assets, whether now owned or
hereafter acquired which Property or assets constitute Collateral, other than
Permitted Liens. For the purpose of determining compliance with this Section
4.13, if a Lien meets the criteria of more than one of the types of Permitted
Liens, the Company or the Subsidiary in question shall have the right to
determine in its sole discretion the category of Permitted Lien to which such
Lien applies, shall not be
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required to include such Lien in more than one of such categories and may elect
to apportion such Lien between or among any two or more categories otherwise
applicable.
Section 4.14 Waiver of Stay; Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law or any usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on the Notes as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company hereby expressly waives all benefit or advantage of any such law,
and covenants that it shall not hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the execution
of every such power as though no such law had been enacted.
It is the intention of the parties hereto to comply strictly with
applicable usury laws; accordingly, notwithstanding any provision to the
contrary in this Indenture or in any of the documents securing the payment of
the Notes or otherwise relating thereto, in no event shall this Indenture or
such documents require or permit the payment, charging, taking, reserving, or
receiving of any sums constituting interest under applicable laws which exceed
the maximum amount permitted by such laws. If any such excess interest is
contracted for, charged, taken, reserved, or received in connection with the
Notes or in any of the documents securing the payment thereof or otherwise
relating thereto, or in any communication by the Holders or any other Person to
the Company or any other Person, or in the event all or part of the principal or
interest on the Notes shall be prepaid or accelerated, so that under any of such
circumstances or under any other circumstance whatsoever the amount of interest
contracted for, charged, taken, reserved, or received on the amount of principal
actually outstanding from time to time under the Notes shall exceed the maximum
amount of interest permitted by applicable usury laws, then in any such event it
is agreed as follows: (i) the provisions of this paragraph shall govern and
control, (ii) any such excess shall be deemed an accidental and bona fide error
and canceled automatically to the extent of such excess, and shall not be
collected or collectible, (iii) any such excess which is or has been paid or
received notwithstanding this paragraph shall be credited against the then
unpaid principal balance on the Notes or refunded to the Company, at the
Holders' option, and (iv) the effective rate of interest shall be automatically
reduced to the maximum lawful rate allowed under applicable laws as construed by
courts having jurisdiction hereof or thereof. Without limiting the foregoing,
all calculations of the rate of interest contracted for, charged, taken,
reserved, or received in connection herewith which are made for the purpose of
determining whether such rate exceeds the maximum lawful rate shall be made to
the extent permitted by applicable laws by amortizing, prorating, allocating and
spreading during the period of the full term of the Notes, including all prior
and subsequent renewals and extensions, all interest at any time contracted for,
charged, taken, reserved, or received. The terms of this paragraph shall be
deemed to be incorporated in every document, security instrument, and
communication relating to this Indenture and the Notes.
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Section 4.15 Separate Existence and Formalities. The Company hereby
covenants and agrees that:
(a) it shall maintain procedures designed to prevent commingling
of the funds of the Company and its Subsidiaries, other than pursuant to the
Services Agreement and the Tax Allocation Agreement;
(b) all actions taken by the Company and its Subsidiaries shall
be taken pursuant to authority granted by the Board of Directors of the Company
and its Subsidiaries, to the extent required by law or the Company's and its
Subsidiaries' Certificate of Incorporation or By-laws;
(c) the Company and its Subsidiaries shall maintain separate
records and books of account in each case in accordance with GAAP;
(d) the Company and its Subsidiaries shall maintain correct
minutes of the meetings and other corporate proceedings of the owners of its
capital stock and the Board of Directors and otherwise comply with requisite
corporate formalities required by law;
(e) the Company and its Subsidiaries shall not knowingly mislead
any other Person as to the identity or authority of the Company and its
Subsidiaries; and
(f) the Company and its Subsidiaries shall maintain procedures
designed to assure that all written communications of the Company and its
Subsidiaries, including, without limitation, letters, invoices, purchase orders,
contracts, statements and applications, shall appropriately identify the entity
on whose behalf such communication is made.
Section 4.16 [INTENTIONALLY OMITTED]
Section 4.17 Repurchase of Notes at the Option of the Holder Upon a
Change of Control.
(a) In the event that a Change of Control occurs, each Holder of
Notes shall have the right, at such Holder's option, subject to the terms and
conditions of this Indenture, to require the Company to repurchase all or any
part of such Holder's Notes (provided that the principal amount of such Notes
must be $1,000 or an integral multiple thereof) on a date that is no earlier
than 10 Business Days after the Company makes a Change of Control Offer and no
later than 60 Business Days after the occurrence of such Change of Control (the
date on which the repurchase is effected being referred to herein as the "CHANGE
OF CONTROL PAYMENT DATE"), at a cash purchase price equal to 100% of the
aggregate outstanding principal amount of the Notes (the "CHANGE OF CONTROL
PURCHASE PRICE"), plus accrued and unpaid interest, if any, through and
including the Change of Control Payment Date.
(b) The Company shall notify the Trustee within five Business
Days after each date upon which the Company knows, or reasonably should know, of
the occurrence of a Change of Control. Within 20 Business Days after the Company
knows, or reasonably should know, of the occurrence of each Change of Control,
the Company shall make an irrevocable,
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unconditional offer (a "CHANGE OF CONTROL OFFER") to the Holders of Notes to
purchase all of the Notes at the Change of Control Purchase Price by sending
written notice of a Change of Control Offer, by first class mail, to each Holder
at its registered address, with a copy to the Trustee. The notice to Holders
shall contain all instructions and materials required by applicable Law and
shall contain or make available to Holders other information material to such
Holders' decision to tender Notes pursuant to the Change of Control Offer.
(c) On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Notes or portions thereof properly tendered
pursuant to the Change of Control Offer prior to the close of the third Business
Day prior to the Change of Control Payment Date, (ii) deposit with the Paying
Agent U.S. Legal Tender sufficient to pay the Change of Control Purchase Price
of all Notes so tendered, and (iii) deliver or cause to be delivered to the
Trustee Notes so accepted together with an Officers' Certificate listing the
Notes or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to the Holders of Notes so accepted payment in an amount equal to
the Change of Control Purchase Price, and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in principal
amount to any unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date.
(d) To the extent applicable and if required by law, the Company
shall comply with Section 14 of the Exchange Act and the provisions of
Regulation 14E and any other tender offer rules under the Exchange Act and other
securities laws, rules, and regulations which may then be applicable to any
offer by the Company to purchase the Notes at the option of Holders upon a
Change of Control and, if such laws, rules, and regulations require or prohibit
any action inconsistent with the foregoing, compliance by the Company with such
laws, rules, and regulations shall not constitute a breach of the Company's
obligations with respect to the foregoing.
Section 4.18 Minimum Consolidated Adjusted EBITDA. The Company shall not
permit its Consolidated Adjusted EBITDA to be less than the following respective
amounts for the following respective periods:
<TABLE>
<CAPTION>
AMOUNT
PERIOD (IN MILLIONS)
- ------ -------------
<S> <C>
February 1, 1999 through April 30, 1999..................... $ 15
February 1, 1999 through July 31, 1999...................... $ 35
February 1, 1999 through October 31, 1999................... $ 60
February 1, 1999 through January 31, 2000................... $100
The four quarters ending April 30, 2000..................... $120
The four quarters ending July 31, 2000...................... $140
The four quarters ending October 31, 2000................... $160
The four quarters ending January 31, 2001 and each of the
four quarters ending at the end of each quarter thereafter.. $180
</TABLE>
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Section 4.19 Guarantee by Subsidiaries. If the Company or any of its
respective Subsidiaries shall, except as part of the Transaction, make
Investments in an aggregate amount, or otherwise transfer (including by capital
contribution) or cause to be transferred, in a manner otherwise permitted
pursuant to this Indenture, any assets (tangible or intangible), businesses,
divisions, real property, or equipment having a book value as shown in the
Company's most recent consolidated balance sheet or the notes thereto (or if
greater, a fair market value at the time of transfer) in excess of $1,000,000 in
or to any Subsidiary that is not a Guarantor or an obligor on the Notes, the
Company shall (a) cause such transferee Subsidiary to (x) guarantee payment of
the Notes, by executing a Guarantee and (y) execute the appropriate security
document, in substantially the form of the relevant Security Document, necessary
to grant a security interest in all of the assets of such Subsidiary (other than
Inventory and Receivables) to secure such Guarantee and (b) deliver to the
Trustee an Opinion of Counsel, in form reasonably satisfactory to the Trustee,
that such Guarantee and each related security document is a valid, binding and
enforceable obligation of such Subsidiary, subject to customary exceptions for
bankruptcy, fraudulent transfer and equitable principles.
The liability of each Guarantor under its Guarantee shall be
limited to the amount of its Adjusted Net Assets. Each Guarantor that makes a
payment under its Guarantee of the Notes shall be entitled to assert a claim for
reimbursement from each other Guarantor of the payment of the Notes, in each
case in an amount not to exceed the product of (x) the other Guarantor's
Adjusted Net Assets multiplied by (y) a fraction, the numerator of which is the
other Guarantor's Adjusted Net Assets and the denominator of which is the sum of
the Adjusted Net Assets of all Guarantors of the Notes.
Section 4.20 Limitation on Asset Sales. The Company shall not, and shall
not permit any of its Subsidiaries to, consummate an Asset Sale unless: (I) an
amount equal to the Net Cash Proceeds therefrom is (i) in the case of an Asset
Sale by the Company in excess of $5,000,000, deposited in the Construction
Disbursement Account or treated as Remaining Amounts pursuant to Section 4.22,
or (ii) with respect to an Asset Sale by the Company or any of its Subsidiaries
after the Phase II Completion Date, used for Capital Expenditures in a Related
Business within 180 days after the date of such Asset Sale; provided that (a)
prior to the payment in full of the Notes, the aggregate amount does not exceed
$10,000,000, (b) in the case of any Asset Sale or series of related Asset Sales,
at least 85% of the value of the consideration for such Asset Sales consists of
cash, Cash Equivalents or any combination thereof, and (c) the value of
consideration received from each Asset Sale is not less than the fair market
value of the Property subject to such Asset Sale; or (II) such Asset Sale is a
part of the Transaction on the Issue Date. Notwithstanding the foregoing
limitations on Asset Sales and restrictions on the use of Net Cash Proceeds
therefrom (other than clause (c) above):
(A) [INTENTIONALLY OMITTED];
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(B) the Company and its Subsidiaries may engage in Asset Sales
in the ordinary course of business, including, without limitation, in
connection with a financing secured by a pledge or assignment of
Inventory or Receivables;
(C) the Company and its Subsidiaries may engage in Asset Sales
not otherwise permitted in clauses (A), (B) or (D) through (H) of this
Section 4.20, provided that the aggregate proceeds from all such Asset
Sales do not exceed $5,000,000 in any twelve-month period;
(D) the Company and its Subsidiaries may engage in Asset Sales
in accordance with Section 5.2;
(E) the Company and its Subsidiaries may sell, assign, lease,
license, transfer, abandon or otherwise dispose of (a) damaged, worn
out, unserviceable or other obsolete Property in the ordinary course of
business or (b) other Property no longer necessary for the proper
conduct of their business;
(F) the Company and its Subsidiaries may convey, sell, transfer
or otherwise dispose of crude oil and refined products in the ordinary
course of business;
(G) [INTENTIONALLY OMITTED]; and
(H) the Company may transfer the Port Facility Assets in
connection with the Port Commission Bond Financing, or the Tank Storage
Facility in connection with the Tank Storage Debt, or the Substation
Assets in connection with the financing thereof, or in each case any
renewal, refunding or refinancing thereof.
Unless otherwise required by the foregoing clauses (A) through
(H), the proceeds of any Asset Sale permitted thereby shall be used by the
Company or its Subsidiaries for purposes not otherwise prohibited by this
Indenture.
For the purpose of determining compliance with this Section 4.20
with respect to the application or use of the Net Cash Proceeds of any Asset
Sale consummated by the Company or any Subsidiary of the Company, if such Net
Cash Proceeds would be eligible for application or use under or pursuant to more
than one of the categories of application or use permitted under this Section
4.20, the Company shall have the right to determine in its sole discretion the
eligible category or categories of application or use pursuant to which all or
any portion of such Net Cash Proceeds shall be applied or used.
Notwithstanding any exception from the limitations on Asset Sales
and restrictions on the use of Net Cash Proceeds therefrom (other than the
exception set forth in clause (D) above), the Company shall not sell the Delayed
Coking Unit, the Fluid Catalytic Cracking Unit or the Crude Unit unless the Net
Cash Proceeds are deposited in the Construction Disbursement Account pursuant to
Section 4.22.
Section 4.21 Limitation on Line of Business. None of the Company or its
Subsidiaries shall directly or indirectly engage to any substantial extent in
any line or lines of business
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activity other than a Related Business and such other business activities as
are reasonably related or incidental thereto.
Section 4.22 Automatic Payment Upon Completion of Phase II. After the
Phase II Completion Date, the Company is required to use amounts remaining in
the Construction Disbursement Account if such amounts (net of any amount thereof
reserved to satisfy mechanic's liens and other payments to vendors to complete
Phase II but only to the extent the same cannot be funded or paid out of 50% of
the Projected Net Operating Cash Flow for the next 90 day period) equal or
exceed $1,000,000 in the aggregate (the "REMAINING AMOUNTS") to prepay
outstanding Notes (up to the unpaid principal amount thereof), pro rata among
all Holders, at a purchase price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon to the date
of purchase, which date may not be more than 60 days from the Phase II
Completion Date. If the Remaining Amount is less than $1,000,000, such amount
may be used by the Company for general corporate purposes.
Section 4.23 Event of Loss. The Company and its Subsidiaries shall
deposit the Net Loss Proceeds from any Event of Loss into the Construction
Disbursement Account or, after the Final Disbursement Date (as defined in the
Construction Collateral and Disbursement Agreement), in accordance with the
Mortgage. Within 30 days after any Event of Loss with respect to any Collateral,
the Independent Engineer shall certify to the Trustee and the Disbursement Agent
as to whether the expected Net Loss Proceeds together with all other
unrestricted funds available to the Company will be sufficient to rebuild,
repair, replace or construct the improvements to the Refinery necessary to
complete the Capital Improvement Program or, if the Capital Improvement Program
is complete, the affected Collateral. Within 180 days after any Event of Loss
with respect to any Collateral with a fair market value (or replacement cost, if
greater) of less than $10,000,000, the Company or the affected Subsidiary of the
Company, as the case may be, may apply the Net Loss Proceeds from such Event of
Loss to the rebuilding, repair, replacement or construction of the affected
Collateral, with no concurrent obligation to make any purchase of any Notes;
provided that the Company delivers to the Trustee within 90 days of such Event
of Loss (a) a written certificate from the Independent Engineer that the
affected Collateral can be rebuilt, repaired, replaced, or constructed and the
Refinery operating (or, if the Refinery can operate without such Collateral,
such Collateral will be operating) within 180 days of such Event of Loss and (b)
an Officers' Certificate certifying that the Company has available from Net Loss
Proceeds or other sources sufficient funds to complete such rebuilding, repair,
replacement or construction. If (i) the Collateral with respect to the Event of
Loss has a fair market value (or replacement cost, if greater) in excess of
$10,000,000 or (ii) the Net Loss Proceeds with respect to one or more Events of
Loss not used within any 180-day period to rebuild, repair or replace the
affected Collateral equals or exceeds in the aggregate $10,000,000, then the
Company shall make an offer to all Holders to purchase the maximum principal
amount of Notes that may be purchased out of the Net Loss Proceeds (an "EVENT OF
LOSS OFFER"), at a purchase price in cash in an amount equal to 100% of the
principal amount thereof, plus accrued and unpaid interest thereon to the date
of purchase, which date shall not be less than 30 or more than 60 days from the
date of such Event of Loss Offer, in accordance with this Indenture. If the
aggregate principal amount of Notes tendered pursuant to an Event of Loss Offer
exceeds the Net Loss Proceeds, the Trustee shall select the Notes to be
purchased in the manner set forth in this Indenture. To the extent that the
aggregate amount of Notes tendered
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pursuant to any Event of Loss Offer is less than the Net Loss Proceeds, the
Company may, subject to the other provisions of this Indenture and the other
Security Documents, use any remaining Net Loss Proceeds for general corporate
purposes.
Section 4.24 Compliance with Environmental Laws. The Company shall:
(a) comply with all Environmental Laws and Environmental
Approvals applicable to the ownership, construction, operation and use
of the Site and the Project, use best efforts to cause all tenants,
operators, lessees, employees, invitees, licensees, contractors,
subcontractors, agents, representatives, Affiliates, consultants and
other Persons occupying the Site or the Project to comply with all such
Environmental Laws and Environmental Approvals, and promptly pay or
cause to be paid when due all costs and expenses incurred in connection
with such compliance as such costs and expenses become due and payable,
except for such failures to comply as could not reasonably be expected
to result in (i) investigation, response or cleanup costs or liabilities
to third parties outstanding at any one time that exceed $2,000,000 per
non-compliance or series of related non-compliances or $10,000,000, in
the aggregate, for all such non-compliances (excluding up to $5,000,000
of response or clean up costs related to the Tank Storage Facility), or
(ii) unpaid fines or penalties outstanding at any one time that exceed
$100,000 per non-compliance or series of related non-compliances or
$5,000,000, in the aggregate, for all such non-compliances; provided
that such failures to comply are remedied as soon as reasonably
practicable after discovery by or notification to the Company or earlier
if required by Environmental Law; provided further that any contingent
liabilities for the payment of money that have not been resolved,
settled, or reduced to judgment shall not be considered outstanding if
the company has recorded adequate reserves for the payment thereof;
(b) not generate, use, treat, store, release, dispose of,
arrange for the disposal of or transport, or fail to use best efforts to
prevent the use, generation, treatment, storage, release, disposal or
transportation of Hazardous Materials by any third party in, on, at,
under, from or to the Site or the Project or onto any other Property
except for such use, generation, treatment, release, storage, disposal
or transportation that could not reasonably be expected to result in
investigation, response or cleanup costs, or unpaid fines, penalties or
liabilities to third parties outstanding at any one time that exceed
$2,000,000 relating to individual events or series of related events or
$10,000,000, in the aggregate for all such events; provided that such
costs, fines, penalties or liabilities are paid or discharged (or, in
the event of contingent liabilities for the payment of money that have
not been resolved, settled or reduced to judgment, the Company has
recorded adequate reserves for the payment thereof) as soon as
reasonably practicable after discovery by or notification to the Company
or earlier if required by Environmental Law; provided further that any
contingent liabilities for the payment of money that have not been
resolved, settled, or reduced to judgment shall not be considered
outstanding if the company has recorded adequate reserves for the
payment thereof;
(c) conduct any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to
remove and clean
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up all Hazardous Materials from the Site and any operations thereon in
accordance with the requirements of all applicable Environmental Laws,
and in accordance with the orders and directives of all Governmental
Authorities; and
(d) develop and implement a plan for evaluating environmental
compliance and environmental risk management issues relating to the
construction, ownership and operation of the Refinery, Project and Site,
and for remedying as soon as practicable conditions and circumstances
that constitute failures to comply with applicable Environmental Law and
Environmental Approvals or that otherwise fail to comply with
environmental compliance and risk management objectives established and
approved by the Board of Directors of the Company.
Section 4.25 Maintenance of Rights. The Company shall, and shall cause
each of its Subsidiaries to, preserve and enforce all its rights, and comply
with all its respective obligations, under the Project Agreements and shall
comply with all Requirements of Law, in each case except to the extent
noncompliance could not reasonably be expected to result in a Material Adverse
Change or except as otherwise provided under Section 4.28.
Section 4.26 Use of Proceeds. The Company shall use the aggregate net
cash proceeds from the sale of, and in connection with the subsequent assumption
by the Company of, the Notes strictly to, (i) complete the Capital Improvement
Program and otherwise cause the Refinery to become operational, (ii) repay
certain obligations of the Company or (iii) permit TCR Holding to pay interest
due on December 15, 1998 under the Promissory Note dated October 1, 1998 made by
TARC in favor of TEC. The Company shall make additional deposits into the
Construction Disbursement Account as required by the Construction Collateral and
Disbursement Agreement.
Section 4.27 Independent Engineer. The Company shall cooperate in all
reasonable respects with the Independent Engineer in the performance of its
duties under the Construction Collateral and Disbursement Agreement.
Section 4.28 Amendments, Waivers and Enforcement of Certain Agreements.
The Company shall not, directly or indirectly, consent to or enter into any
transfer of rights, termination, assignment, amendment or waiver under, of or to
any Project Agreement, without the consent of the Majority Holders to such
proposed transfer, termination, assignment, amendment or waiver; provided,
however, that such consent shall not be required if (i) no Event of Default
shall have occurred and be continuing and as a result of such transfer,
termination, assignment, amendment or waiver, no Default or Event of Default
shall have occurred and be continuing, and (ii) the proposed transfer,
termination, assignment, amendment or waiver could not reasonably be expected to
adversely affect the Company's ability to repay any Notes on a timely basis or
to comply with the terms of this Indenture (as certified by the Independent
Engineer) or the ability of the Trustee, on behalf of the Holders, to realize on
the Collateral. In the case of any entry into an amendment to any Project
Agreement or the entry into any replacement Project Agreement, the Company shall
take all necessary actions (including the execution, filing and recording of any
public deed or other instrument or document) to continue or create, as the case
may be, and to perfect the first-priority Lien of the Security Documents on
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such Project Agreement or such replacement agreement, and, within forty-five
(45) days of the end of each fiscal year of the Company, the Company shall
deliver to the Trustee an Opinion of Counsel to the effect that all Project
Agreements to which the Company is then a party shall comprise part of the
Collateral and be subject to the Lien of the Security Documents.
Section 4.29 Modifications of Charter Documents. The Company shall not
amend or modify any of its charter documents (except as may be required by Law
or in connection with the Transaction) or change its fiscal year unless such
action could not reasonably be expected to result in a Material Adverse Change.
Section 4.30 Capital Expenditures. The Company shall not, and shall not
permit its Subsidiaries to, make any material Capital Expenditure not provided
for in the capital budget set forth in the Capital Improvement Plan, except as
necessary to comply with Applicable Law, including Environmental Law.
Section 4.31 Notice of Default. The Company shall notify the Trustee
promptly, but in all cases within five Business Days, after the Company obtains
knowledge of the occurrence thereof, written notice of the occurrence of any
event or condition that constitutes (or that, upon notice or lapse of time or
both, would constitute) a Default or an Event of Default, specifically stating
that such event or condition has occurred and describing the nature thereof and
the action the Company proposes to take with respect thereto.
Section 4.32 Limitation on Issuance of Preferred Stock by Subsidiaries.
The Company shall not permit any of its Subsidiaries to, directly or indirectly,
issue, contingently or otherwise, any shares of such Subsidiary's Preferred
Stock, warrants, rights or options to purchase or acquire shares of such
Subsidiary's Preferred Stock now or hereafter authorized for issuance except to
the Company or a wholly owned Subsidiary of the Company.
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 When the Company and its Subsidiaries May Merge, Etc.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, consolidate with or merge with or into any other Person, or,
directly or indirectly, sell, lease, assign, transfer or convey all or
substantially all of its assets (computed on a consolidated basis), to another
Person or group of Persons acting in concert, whether in a single transaction or
through a series of related transactions, unless:
(A) in accordance with the Asset Sale Agreements; or
(B) subsequent to the consummation of all of the
transactions contemplated by clause (A) above (i) either (a) the Company
or such Subsidiary, as the case may be, shall be the continuing Person
or (b) the resulting, surviving, or transferee entity (the Company or
such other Person being hereinafter referred to as the "SURVIVING
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<PAGE> 64
PERSON") shall be a corporation, limited liability company or
partnership organized under the laws of the United States, any state
thereof, or the District of Columbia, and shall expressly assume all of
the obligations of the Company or such Subsidiary, as the case may be,
under the Notes, the Security Documents, the Exchange and Registration
Rights Agreement, the Stockholder Agreements, the Registration Rights
Agreement and this Indenture by a supplemental indenture or other
appropriate document supplemental hereto, and execute and deliver to the
Trustee on or prior to the consummation of such transaction, in form
satisfactory to the Trustee, any supplements to any Security Documents
as the Trustee, in its sole discretion, may require to ratify and
confirm the continuing first priority of, and to regrant, the Liens
(subject to Permitted Liens) created by the Security Documents; (ii) no
Default or Event of Default shall exist or shall occur immediately after
giving effect to such transaction; (iii) immediately after giving effect
to such transaction on a pro forma basis, the Net Worth of the surviving
or transferee entity is at least equal to the Net Worth of such
predecessor or transferring entity immediately prior to such
transaction; (iv) the surviving or transferee entity would immediately
thereafter be permitted to Incur at least $1.00 of additional
Subordinated Debt pursuant to the third paragraph following clause (n)
of Section 4.11; and (v) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, assignment, or transfer and such supplemental
indenture comply with this Article V and that all conditions precedent
herein provided relating to such transaction have been satisfied.
For purposes of this Section 5.1, the Consolidated Fixed Charge
Coverage Ratio shall be determined on a pro forma consolidated basis (after
giving effect to such transaction) for the four fiscal quarters immediately
preceding such transaction.
(b) For purposes of clause (a), the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
Section 5.2 Successor Corporation Substituted. Upon any consolidation or
merger or any transfer of all or substantially all of the assets of the Company
or any of its Subsidiaries in accordance with Section 5.1, the Surviving Person
formed by such consolidation or into which the Company is merged or to which
such transfer is made, shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or such Subsidiary under this
Indenture or the other Security Documents with the same effect as if such
Surviving Person had been named as the Company herein. Upon consummation of the
Transaction on the Issue Date (including, without limitation, the transactions
contemplated by the Asset Sale Agreements), then TARC and TCR Holding
respectively will be released from all obligations under this Indenture and the
other Security Documents, TransContinental will be the "Company" for all
purposes of this Indenture and the other Security Documents and TARC and TCR
Holding will have no rights or interests under this Indenture.
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ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of Default. "Event of Default," wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be caused voluntarily or involuntarily or effected,
without limitation, by operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
(a) default in the payment of any interest upon any Note as and
when the same becomes due and payable, and the continuance of such default for a
period of 30 days;
(b) default in the payment of all or any part of the principal
of (or premium, if any, applicable to), the Notes when and as the same becomes
due and payable at maturity, redemption, by acceleration, or otherwise including
payment of the Change of Control Purchase Price;
(c) default in the observance or performance of, or breach of,
any covenant, agreement or warranty of the Company or any of its Subsidiaries
contained in the Notes or this Indenture or any of the Security Documents (other
than a default in the performance of any covenant, agreement or warranty which
is specifically dealt with elsewhere in this Section 6.1), and continuance of
such default or breach for the period of 30 days after written notice is given
to the Company by the Trustee or the Company and the Trustee by the Majority
Holders;
(d) a default which extends beyond any stated period of grace
applicable thereto, including any extension thereof, under any mortgage,
indenture or instrument under which there is outstanding any Debt of the Company
or any of its Subsidiaries with an aggregate principal amount in excess of
$5,000,000, if by reason of such default the principal of such Debt and all
accrued interest thereon has been declared due and payable, or failure to pay
such Debt at its stated maturity, provided that a waiver by all of the requisite
lenders of such debt of such default shall constitute a waiver hereunder for the
same period;
(e) a decree, judgment, or order by a court of competent
jurisdiction shall have been entered adjudging the Company or any of its
Subsidiaries or TCR Holding as bankrupt or insolvent, or ordering relief against
the Company or any of its Subsidiaries, TEC, TARC or TCR Holding in response to
the commencement of an involuntary bankruptcy case, or approving as properly
filed a petition seeking reorganization or liquidation of the Company or any of
its Subsidiaries or TCR Holding under any bankruptcy or similar law, and such
decree or order shall have continued undischarged and unstayed for a period of
60 days; or a decree or order of a court of competent jurisdiction over the
appointment of a receiver, liquidator, trustee, or assignee in bankruptcy or
insolvency of the Company, any of its Subsidiaries, TEC, TARC, TCR Holding, or
of the Property of any such Person, or for the winding up or liquidation of the
affairs of any such Person, shall have been entered, and such decree, judgment,
or order shall have remained in force undischarged and unstayed for a period of
60 days;
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(f) the Company or any of its Subsidiaries, TEC, TARC or TCR
Holding shall institute voluntary bankruptcy proceedings, or shall consent to
the filing of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization or liquidation under any bankruptcy or
similar law or similar statute, or shall consent to the filing of any such
petition, or shall consent to the appointment of a Custodian, receiver,
liquidator, trustee, or assignee in bankruptcy or insolvency of it or any of its
assets or Property, or shall make a general assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due, or shall, within the meaning of any Bankruptcy Law, become
insolvent, fail generally to pay its debts as they become due, or take any
corporate action in furtherance of or to facilitate, conditionally or otherwise,
any of the foregoing;
(g) final judgments not covered by insurance for the payment of
money, or the issuance of any warrant of attachment against any portion of the
Property or assets of the Company or any Subsidiary, which, in the aggregate,
equal or exceed $5,000,000 at any one time shall be entered against the Company
or any of its Subsidiaries by a court of competent jurisdiction and not be
stayed, bonded or discharged for a period (during which execution shall not be
effectively stayed) of 60 days (or, in the case of any such final judgment which
provides for payment over time, which shall so remain unstayed, unbonded or
undischarged beyond any applicable payment date provided therein);
(h) any of the Security Documents shall for any reason cease to
be in full force and effect (except where no material adverse effect to the
Holders would result), or shall cease to give the Trustee for the ratable
benefit of the Holders the Liens, rights, powers and privileges purported to be
created thereby including but not limited to, a perfected security interest in,
and Lien on, the Collateral in accordance with the terms thereof (including,
without limitation, a first priority perfected Lien (subject to Permitted Liens)
on the Collateral), except where the failure to have such Lien, rights, powers
and privileges shall not have a material adverse effect on the Holders;
(i) the Phase I Completion Date has not occurred by the Required
Phase I Completion Date;
(j) the Phase II Mechanical Completion Date has not occurred by
October 1, 1999;
(k) the Reliability Test has not been completed by June 30,
2001;
(l) the Phase II Completion Date has not occurred by December 1,
1999;
(m) any of the Stockholders Agreements shall cease to be in full
force and effect or cease to cause the election of directors by the parties
thereto as set forth therein;
(n) the actual cost of Phase I from and including November 1,
1998 exceeds the amount budgeted therefor (including contingency amounts) as set
forth in the Budget by more than $1,000,000; or
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(o) the actual cost of Phase II from and including November 1,
1998 exceeds the amount budgeted therefor (including contingency amounts) as set
forth in the Budget by more than the sum of $6,000,000 and the amount, if any,
by which the amount budgeted for Phase I (including contingency amounts) as set
forth in the Budget exceeds the actual cost of Phase I from and including
November 1, 1998.
If a default occurs and is continuing and if a Trust Officer of
the Trustee receives written notice thereof, the Trustee must, within 30 days
after the occurrence of such default, give to the Holders notice of such
default; provided that, except in the case of default in payment of principal
of, premium, if any, or interest on the Notes, including a default in the
payment of the Change of Control Purchase Price, the Trustee will be protected
in withholding such notice if it in good faith determines that the withholding
of such notice is in the interest of the Holders.
A Default under clause (c) above (other than in the case of any
Defaults under Sections 4.3, 4.11 or 5.1, which Defaults shall be Events of
Default without the notice specified in this paragraph or Section 4.7(c) and
upon the passage of 10 days) is not an Event of Default until the Trustee
notifies the Company, or the Majority Holders notify the Company and the Trustee
of the Default, and the Company does not cure the Default within 30 days after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default." Such notice shall
be given by the Trustee if so requested by the Majority Holders.
In the case of any Event of Default pursuant to the provisions of
this Section 6.1 occurring by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company or any Subsidiary with the
intention of avoiding the period of time the Notes are not optionally redeemable
or the payment of the premium which the Company would have to pay if the Company
then had elected to redeem the Notes pursuant to Paragraph 5 of the Notes, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law, anything in this Indenture or in the Notes to the
contrary notwithstanding.
Section 6.2 Acceleration of Maturity Date; Rescission and Annulment. If
an Event of Default (other than an Event of Default specified in Section 6.1(e)
or (f) relating to the Company or its Subsidiaries) occurs and is continuing,
then, and in every such case, unless the principal of all of the Notes shall
have already become due and payable, either the Trustee or the Majority Holders,
by a notice in writing to the Company and to the Disbursement Agent (and to the
Trustee if given by Holders) (an "ACCELERATION NOTICE"), may declare all of the
principal of the Notes determined as set forth below, including in each case
accrued interest thereon, or, as appropriate, the Change of Control Purchase
Price, to be due and payable immediately. If an Event of Default specified in
Section 6.1(e) or (f) relating to the Company or its Subsidiaries occurs, all
principal and accrued interest on the Notes shall be immediately due and payable
on all outstanding Notes without any declaration or other act on the part of the
Trustee or the Holders.
At any time prior to such a declaration of acceleration being
made, the Majority Holders, by written notice to the Company and the Trustee,
may waive, on behalf of all Holders,
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any default or potential default if the Company has paid or deposited with the
Trustee a sum sufficient to pay:
(1) all accrued but unpaid interest on all Notes,
(2) the principal of (and premium, if any, applicable to) any
Notes and accrued but unpaid interest thereon at the rate borne by the
Notes,
(3) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Notes, and
(4) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel.
Section 6.3 Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if an Event of Default in payment of
principal, premium or interest specified in Section 6.1 occurs and is
continuing, the Company shall, upon demand of the Trustee, pay to the Trustee,
for the benefit of the Holders of such Notes, the whole amount then due and
payable on such Notes for principal, premium (if any) and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, at the
rate borne by the Notes, and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including
compensation to, and expenses, disbursements and advances of the Trustee, its
agents and counsel.
If the Company fails to pay such amounts within ten days of such
demand, the Trustee, in its own name and as trustee of an express trust in favor
of the Holders, may institute a judicial proceeding for the collection of the
sums so due and unpaid, may prosecute such proceeding to judgment or final
decree and may enforce the same against the Company or any other obligor upon
the Notes and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the Property of the Company or any other obligor upon the
Notes, wherever situated. If an Event of Default occurs and is continuing, the
Trustee may in its discretion proceed to protect and enforce its rights and the
rights of the Holders by such appropriate judicial proceedings as the Trustee
shall deem most effective to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
The Trustee shall also be authorized to take whatever additional
action at law or in equity may appear to be necessary or desirable to collect
the monies necessary to pay the principal, premium (if any) and interest on the
Notes.
Section 6.4 Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the
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Notes or the Property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company or
any obligor for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise to take any and
all actions under the TIA, including:
(a) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other Property payable
or deliverable on any such claims and to distribute the same;
and any debtor-in-possession or Custodian or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment, or composition affecting the Notes
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.5 Trustee May Enforce Claims Without Possession of Notes. All
rights of action and claims under this Indenture or the Notes may be prosecuted
and enforced by the Trustee without the possession of any of the Notes or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee of an
express trust in favor of the Holders, and any recovery of judgment shall, after
provision for the payment of compensation to, and expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Notes in respect of which such judgment has been recovered.
Section 6.6 Priorities. Any money collected by the Trustee pursuant to
this Article VI shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal, premium (if any) or interest, upon presentation of the Notes and
the notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the Trustee in payment of all amounts due pursuant to
Section 7.7;
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SECOND: To the Holders in payment of the amounts then due and
unpaid for principal of, premium (if any) and interest on, the Notes in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Notes for principal,
premium (if any) and interest, respectively; and
THIRD: To whomsoever may be lawfully entitled thereto, the
remainder, if any.
Section 6.7 Limitation on Suits. No Holder of any Note shall have any
right to order or direct the Trustee to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(b) the Majority Holders shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder; and
(c) such Holder or Holders have offered to the Trustee security
reasonably acceptable to the Trustee or indemnity against the costs, expenses
and liabilities to be incurred or reasonably probable to be incurred in
compliance with such request;
it being understood and agreed that no Holder (including, without limitation,
any Direct Purchaser) shall constitute or be deemed to be an agent, trustee or
fiduciary in any capacity under this Indenture or the other Security Documents
of any other Holder or have any duties or responsibilities to any Holder or be
required to initiate or conduct any action on behalf of any other Holder. Each
Holder (including, without limitation, each Direct Purchaser) may, at all times,
act to further its own interests without regard to the interests of any other
Holder and no such action will create any liability of any such Holder or Direct
Purchaser to any other Holder.
Section 6.8 Unconditional Right of Holders to Receive Principal, Premium
and Interest. Notwithstanding any other provision of this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of, and premium (if any) and interest on, such
Note on the Maturity Dates of such payments as expressed in such Note and to
institute suit for the enforcement of any such payment after such respective
dates, and such rights shall not be impaired without the consent of such Holder.
Section 6.9 Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Notes in Section 2.7, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
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assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 6.10 Delay or Omission Not Waiver. No delay or omission by the
Trustee or by any Holder of any Note to exercise any right or remedy arising
upon any Default or Event of Default shall impair the exercise of any such right
or remedy or constitute a waiver of any such Event of Default. Every right and
remedy given by this Article VI or by law to the Trustee or to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
Section 6.11 Control by Holders. The Majority Holders shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred upon
the Trustee, provided that:
(a) such direction shall not be in conflict with any rule of law
or with this Indenture,
(b) the Trustee shall not determine that the action so directed
would be unjustly prejudicial to the Holders not taking part in such direction
or that such action may involve the Trustee in personal liability,
(c) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(d) the Trustee shall be entitled to be indemnified by the
Holders before taking any such action directed by the Holders.
Section 6.12 Waiver of Past Default. Subject to Section 6.8, the
Majority Holders may, on behalf of all Holders, prior to the declaration of the
maturity of the Notes, waive any past default hereunder and its consequences,
except a default in the payment of the principal of, premium, if any, or
interest on, any Note as specified in clauses (a) and (b) of Section 6.1.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair the exercise of any right arising therefrom.
Section 6.13 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted to be taken by it as
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section 6.13 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group
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of Holders, holding in the aggregate more than 10% in aggregate principal amount
of the outstanding Notes, or to any suit instituted by any Holder for
enforcement of the payment of principal of, or premium (if any) or interest on,
any Note on or after the respective Maturity Date expressed in such Note
(including, in the case of redemption, on or after the Redemption Date).
Section 6.14 Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of the Trustee
and the Holders shall continue as though no such proceeding had been instituted.
ARTICLE VII
TRUSTEE
The Trustee hereby accepts the trust imposed upon it by this
Indenture and covenants and agrees to perform the same, as herein expressed.
Section 7.1 Duties of Trustee
(a) After a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in their exercise
as a prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture and no others, and no
covenants or obligations shall be implied in or read into this
Indenture which are adverse to the Trustee.
(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee shall examine
certificates and opinions which are required under this
Indenture to be delivered to the Trustee to determine whether or
not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.1.
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(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts.
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.2 or
Section 6.11.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any action
under this Indenture or at the request, order or direction of the Holders or in
the exercise of any of its rights or powers if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c), (d), (e) and (f) of this
Section 7.1.
(f) The Trustee shall not be liable for loss on Permitted
Investments made pursuant to this Indenture or interest on any assets received
by it except as the Trustee may agree in writing with the Company. Assets held
in trust by the Trustee need not be segregated from other assets except to the
extent required by law.
Section 7.2 Rights of Trustee. Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected in acting
or refraining from acting on any document or legal opinion believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Sections 12.4 and 12.5. The Trustee shall be
entitled to rely upon the advice or written opinion of counsel selected by it
and the Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such certificate or opinion.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
(e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
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(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request, order
or direction of any of the Holders, pursuant to the provisions of this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) Whenever by the terms of this Indenture, the Trustee shall
be required to transmit notices or reports to any or all Holders, the Trustee
shall be entitled to rely on the information provided by the Registrar as to the
names and addresses of the Holders as being correct. If the Registrar is other
than the Trustee, the Trustee shall not be responsible for the accuracy of such
information.
Section 7.3 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Company, its Subsidiaries, or their respective Affiliates with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee must comply with Sections 7.10 and 7.11.
Section 7.4 Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Notes or disclosure
documentation related thereto and it shall not be accountable for the Company's
use of the proceeds from the Notes, and it shall not be responsible for (i) the
use or application of any funds received by a Paying Agent other than the
Trustee, (ii) any statement in the Notes, other than the Trustee's certificate
of authentication or (iii) the sufficiency of the collateral for the Notes. The
Trustee shall have no liability and shall be held harmless by the Holders and
the Company in the event that the Project is not completed, and the Trustee
makes no representations with respect to the likelihood of such completion. For
the avoidance of doubt, under no circumstances shall any provision of this
Indenture or the Mortgage be interpreted to require that the Trustee foreclose
on the Mortgage or exercise any remedy with respect to the Mortgage unless and
until the Trustee has received full indemnification deemed satisfactory to it.
The Trustee shall have no environmental liability whatsoever, and makes no
representations as to the adequacy of the Mortgage or with respect to
environmental contamination of any property subject to the Mortgage. The assets
held or collected by the Trustee described in the third paragraph of Section 7.7
shall (after payment of the fees and expenses of the Trustee) be the sole source
of any funds expended by the Trustee for remediation of potential or actual
environmental costs.
The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the part
of the Company hereunder or in any Security Documents, except as specifically
set forth herein or therein.
Section 7.5 Notice of Default. If a Default or an Event of Default
occurs and is continuing and a Trust Officer has received written notice
thereof, the Trustee shall mail to DTC notice of the uncured Default or Event of
Default within 30 days after such Default or Event of Default occurs. Except in
the case of a Default or an Event of Default in payment of principal (or
premium, if any,) of, or interest on, any Note (including all payments due on
any Maturity Date), the Trustee may withhold the notice if and so long as the
Board of Directors, the executive
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committee or a trust committee of directors and/or responsible officers of the
Trustee in good faith determines that withholding the notice is in the interest
of the Holders.
Section 7.6 Reports by Trustee to Holders. On or before each May15th
beginning with May 15, 1999, the Trustee shall, if required, mail to each
Noteholder a brief report dated as of such May 15th that complies with TIA
Section 313(a). The Trustee also shall comply with TIA Sections 313(b) and
313(c).
A copy of each report at the time of its mailing to Noteholders
shall be mailed to the Company and filed with the Commission and each stock
exchange, if any, on which the Notes are listed.
Section 7.7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time compensation for its services (in whatever capacity
rendered) in accordance with the Trustee's fee schedule, as may be amended from
time to time. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable disbursements, expenses and advances
incurred or made by it. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
counsel. The reasonable fees and expenses of the Trustee's legal counsel shall
be payable on the Issue Date, and on the date of execution and delivery of any
amendment hereto.
The Company shall indemnify the Trustee (in its capacity as
Trustee) and each of its officers, directors, attorneys-in-fact and agents for,
and hold it harmless against, any claim, demand, expense (including but not
limited to, compensation, disbursements and expenses of the Trustees' agents and
counsel), loss or liability incurred by it without negligence or bad faith on
its part, arising out of or in connection with the administration of this trust
and its rights or duties hereunder including the reasonable costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. The Company shall defend the claim and the Trustee
shall provide reasonable cooperation at the Company's expense in the defense.
The Trustee may have separate counsel and the Company shall pay the reasonable
fees and expenses of such counsel; provided that the Company will not be
required to pay such fees and expenses if it assumes the Trustee's defense and
there is no conflict of interest as reasonably determined by the Trustee between
the Company and the Trustee in connection with such defense. The Company need
not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee solely through its negligence, bad faith or
willful misconduct.
Following the occurrence of an Event of Default, to secure the
Company's payment obligations in this Section 7.7, the Trustee shall have a Lien
prior to the Notes on all assets held or collected by the Trustee, in its
capacity as Trustee. Prior to the occurrence of an Event of Default, the Trustee
shall have a Lien prior to the Notes on all such assets, except assets held in
trust to pay principal (and premium, if any,) or interest on particular Notes,
and the Trustee shall be entitled to use such assets to pay the fees and
expenses of the Trustee incurred in the performance of its obligations under
this Indenture relating to the engagement of an
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environmental auditor or engineer to assess the existence, extent and costs of
remediating contamination at the Refinery.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.7 and any Lien
arising hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article VIII and any
rejection or termination of this Indenture under any Bankruptcy Law.
Section 7.8 Replacement of Trustee. The Trustee may resign by so
notifying the Company in writing. The Majority Holders may remove the Trustee by
so notifying the Company and the Trustee in writing and may appoint a successor
trustee with the Company's consent. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver, Custodian, or other public officer takes
charge of the Trustee or its Property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Majority Holders may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that
and provided that all sums owing to the Trustee provided for in Section 7.7 have
been paid, the retiring Trustee shall transfer all Property held by it as
Trustee to the successor Trustee, subject to the Lien provided in Section 7.7,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holder or Holders of at least 10% in principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Noteholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
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Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
Section 7.9 Successor Trustee by Merger, Etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation, the resulting,
surviving or transferee corporation without any further act shall, if such
resulting, surviving or transferee corporation is otherwise eligible hereunder,
be the successor Trustee.
Section 7.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1), (a)(2) and (a)(5). The
Trustee shall comply with TIA Section 310(b).
Section 7.11 Preferential Collection of Claims against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
Section 7.12 No Bond. The Trustee shall not be required to give any bond
or surety in respect to the execution of its trusts, powers, rights and duties
under this Indenture or otherwise in respect of the premises.
Section 7.13 Condition to Action. Notwithstanding anything elsewhere in
this Indenture to the contrary, the Trustee shall have the right, but shall not
be required, to demand, in respect of the authentication of any Notes or any
other action within the purview of this Indenture, any showings, certificates,
opinions, or other information, or corporate action or evidence thereof in
addition to that by the terms hereof required, as a condition of such action by
the Trustee if reasonably deemed desirable by the Trustee for the purpose of
establishing the right to the authentication of any Notes or the taking of any
other action by the Trustee.
Section 7.14 Investment. The Trustee shall not be responsible or liable
for any loss suffered in connection with any investment of funds made by it at
the direction of the Company.
ARTICLE VIII
SATISFACTION AND DISCHARGE
Section 8.1 [INTENTIONALLY OMITTED].
Section 8.2 Termination of Obligations Upon Cancellation of the Notes.
The Company may terminate all of its obligations under this Indenture (subject
to Sections 8.3 and 8.7) when (a) all Notes theretofore authenticated and
delivered (other than Notes which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.7) have been delivered to
the Trustee for cancellation or the Company has paid or caused to be paid all
sums payable hereunder by the Company and (b) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent
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specified herein relating to the satisfaction and discharge of this Indenture
have been complied with.
Section 8.3 Survival of Certain Obligations. Notwithstanding the
satisfaction and discharge of this Indenture and of the Notes referred to in
Section 8.2, the respective obligations of the Company and the Trustee under
Sections 2.3, 2.4, 2.5, 2.6, 2.7, 4.1, 4.2, 4.4, 7.7, 8.7 and this Section 8.3
shall survive until the Notes are no longer outstanding, and thereafter the
obligations of the Company and the Trustee under Sections 7.7 and this Section
8.3 shall survive. Nothing contained in this Article VIII shall abrogate any of
the obligations or duties of the Trustee under this Indenture.
Section 8.4 Acknowledgment of Discharge by Trustee. After (i) the
conditions of Section 8.2 have been satisfied, (ii) the Company has paid or
caused to be paid all other sums payable hereunder by the Company and (iii) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent referred to in clause (i),
above, relating to the satisfaction and discharge of this Indenture have been
complied with, the Trustee upon request shall acknowledge in writing the
discharge the Company's obligations under this Indenture except for those
surviving obligations specified in Section 8.3.
Section 8.5 [INTENTIONALLY OMITTED].
Section 8.6 [INTENTIONALLY OMITTED].
Section 8.7 Reinstatement. If the Trustee or Paying Agent is unable to
apply any U.S. Legal Tender or U.S. Government Obligations in accordance with
Section 8.2 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture, the Security Documents and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.2 until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with Section 8.2; provided, however, that
if the Company has made any payment of principal of or interest on any Notes
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Notes to receive such payment from the U.S.
Legal Tender or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.1 Supplemental Indentures Without Consent of Holders. Without
the consent of any Holder, the Company, when authorized by Board Resolutions,
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto or amendments to the Security Documents or the
Construction Collateral and Disbursement Agreement, in form satisfactory to the
Trustee, for any of the following purposes:
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(a) to cure any ambiguity, defect, or inconsistency, or to make
any other provisions with respect to matters or questions arising under this
Indenture, the Security Documents or the Construction Collateral and
Disbursement Agreement which shall not be inconsistent with the provisions of
this Indenture, provided such action pursuant to this clause (a) shall not
adversely affect the interests of any Holder in any respect;
(b) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon the Company
or to make any other change that does not adversely affect the rights of any
Holder, provided that the Company has delivered to the Trustee an Opinion of
Counsel stating that such change does not adversely affect the rights of any
Holder;
(c) to provide for additional collateral for the Notes;
(d) to evidence the succession of another Person to the Company
and the assumption by any such successor of the obligations of the Company
herein and in the Notes in accordance with Article V;
(e) to comply with the TIA; or
(f) after the date upon which a Change of Control Offer is
required to be made, reduce the Change of Control Purchase Price or make changes
in Section 4.17.
Section 9.2 Amendments, Supplemental Indentures and Waivers with Consent
of Holders. Subject to Section 6.8, with the consent of the Majority Holders, by
written act of said Holders (including an electronic mechanism utilized by DTC
as a means of receiving consents or tenders of securities) delivered to the
Company and the Trustee, the Company, when authorized by Board Resolutions, and
the Trustee may amend or supplement this Indenture, the Notes, any of the
Security Documents, or the Plans with respect to Phase I or Phase II or enter
into an indenture or indenture supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or the Notes or of modifying in any manner the rights of the
Holders under this Indenture or the Notes. Subject to Section 6.8, the Majority
Holders may waive compliance by the Company with any provision of this Indenture
or the Notes. Notwithstanding any of the above, however, no such amendment,
supplemental indenture or waiver shall, without the consent of the Holder of
each outstanding Note affected thereby:
(a) reduce the percentage of outstanding principal amount of
Notes whose Holders must consent to an amendment, supplement or waiver of any
provision of this Indenture or the Notes;
(b) reduce the rate or extend the time for payment of interest
on any Note;
(c) reduce the principal amount of any Note;
(d) change the Stated Maturity or the payment date of any
installment of principal of, or the payment date of any installment of interest
on, any Note;
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(e) alter the redemption provisions of Article III or of
Paragraph 5 of the Notes;
(f) make any changes in the provisions concerning waivers of
Defaults or Events of Default by Holders of the Notes (except to increase any
required percentage or to provide that certain other provisions hereof cannot be
modified or waived without the consent of the Holders of each outstanding Note
affected thereby) or the rights of Holders to recover the principal or premium
of, interest on, or redemption payment with respect to, any Note;
(g) make any changes in Section 6.4, 6.7 or this third sentence
of this Section 9.2;
(h) make the principal of, or the interest on, any Note payable
with anything or in any manner other than as provided for in this Indenture
(including changing the place of payment where, or the coin or currency in
which, any Note or any premium or the interest thereon is payable) and the Notes
as in effect on the date hereof; or
(i) after the date upon which a Change of Control Offer is
required to be made, reduce the Change of Control Purchase Price or alter the
provisions of Section 4.17.
It shall not be necessary for the consent of the Holders under
this Section 9.2 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
After an amendment, supplement or waiver under this Section 9.2
or 9.4 becomes effective, it shall bind each Holder.
In connection with any amendment, supplement or waiver under this
Article IX, the Company may, but shall not be obligated to, offer to any Holder
who consents to such amendment, supplement or waiver, or to all Holders,
consideration for such Holder's consent to such amendment, supplement or waiver.
Section 9.3 Compliance with TIA. Every amendment, waiver or supplement of this
Indenture or the Notes shall comply with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents. Until an
amendment, waiver or supplement becomes effective, a consent to it by a Holder
is a continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder's Note,
even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to his Note or portion of
his Note by written notice to the Company or the Person designated by the
Company as the Person
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to whom consents should be sent if such revocation is received by the Company or
such Person before the date on which the Trustee receives an Officers'
Certificate certifying that the Holders of the requisite principal amount of
Notes have consented (and not theretofore revoked such consent) to the
amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a Record Date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which Record Date shall be the date so fixed by the
Company notwithstanding the provisions of the TIA. If a Record Date is fixed,
then notwithstanding the last sentence of the immediately preceding paragraph,
those Persons who were Holders at such Record Date, and only those Persons (or
their duly designated proxies), shall be entitled to revoke any consent
previously given, regardless of whether such Persons continue to be Holders
after such Record Date. No such consent shall be valid or effective for more
than 90 days after such Record Date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Noteholder; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal and premium of
and interest on a Note, on or after the respective dates set for such amounts to
become due and payable expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates.
Section 9.5 Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder of the Note to deliver it to the Trustee or require the Holder to put an
appropriate notation on the Note. The Trustee may place an appropriate notation
on the Note about the changed terms and return it to the Holder. Alternatively,
if the Company or the Trustee so determines, the Company in exchange for the
Note shall issue and the Trustee shall authenticate a new Note that reflects the
changed terms. Any failure to make the appropriate notation or to issue a new
Note shall not affect the validity of such amendment, supplement or waiver.
Section 9.6 Trustee to Sign Amendments, Etc. The Trustee shall execute
any amendment, supplement or waiver authorized pursuant to this Article IX,
provided that the Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture. The Trustee at the expense of the Company
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of any amendment, supplement or
waiver authorized pursuant to this Article IX is authorized or permitted by this
Indenture.
ARTICLE X
MEETINGS OF NOTEHOLDERS
Section 10.1 Purposes for Which Meetings May Be Called. A meeting of
Noteholders may be called at any time and from time to time pursuant to the
provisions of this Article X for any of the following purposes:
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(a) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to waive or to consent to the waiving of
any Default or Event of Default hereunder and its consequences, or to take any
other action authorized to be taken by Noteholders pursuant to any of the
provisions of Article VI;
(b) to remove the Trustee or appoint a successor Trustee pursuant
to the provisions of Article VII;
(c) to consent to an amendment, supplement or waiver pursuant to
the provisions of Section 9.2; or
(d) to take any other action (i) authorized to be taken by or on
behalf of the Holder or Holders of any specified aggregate principal amount of
the Notes under any other provision of this Indenture, or authorized or
permitted by law or (ii) which the Trustee deems necessary or appropriate in
connection with the administration of this Indenture.
Section 10.2 Manner of Calling Meetings. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place in the City of New York, New York or
elsewhere as the Trustee shall determine. Notice of every meeting of
Noteholders, setting forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed by the
Trustee, first-class postage prepaid, to the Company and to the Holders at their
last addresses as they shall appear on the registration books of the Registrar,
not less than 10 nor more than 60 days prior to the date fixed for a meeting.
Any meeting of Noteholders shall be valid without notice if the
Holders of all Notes then outstanding are present in Person or by proxy, or if
notice is waived before or after the meeting by the Holders of all Notes
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 10.3 Call of Meetings by Company or Holders. In case at any time
the Company, pursuant to a Board Resolution, or the Holders of not less than 10%
in aggregate principal amount of the Notes then outstanding, shall have
requested the Trustee to call a meeting of Noteholders to take any action
specified in Section 10.1, by written request setting forth in reasonable detail
the action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or the Holders of Notes in the amount above specified may
determine the time and place in the City of New York, New York or elsewhere for
such meeting and may call such meeting for the purpose of taking such action, by
mailing or causing to be mailed notice thereof as provided in Section 10.2, or
by causing notice thereof to be published at least once in each of two
successive calendar weeks (on any Business Day during such week) in a newspaper
or newspapers printed in the English language, customarily published at least
five days a week of a general circulation in the City of New York, State of New
York, the first such publication to be not less than 10 nor more than 60 days
prior to the date fixed for the meeting.
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Section 10.4 Who May Attend and Vote at Meetings. To be entitled to vote
at any meeting of Noteholders, a Person shall (a) be a registered Holder of one
or more Notes, or (b) be a Person appointed by an instrument in writing as proxy
for the registered Holder or Holders of Notes. The only Persons who shall be
entitled to be present or to speak at any meeting of Noteholders shall be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 10.5 Regulations May Be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment. Notwithstanding any other provision of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any action by or any meeting of Noteholders, in regard to proof of
the holding of Notes and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, and submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think appropriate.
Such regulations may fix a record date and time for determining the Holders of
record of Notes entitled to vote at such meeting, in which case those and only
those Persons who are Holders of Notes at the record date and time so fixed, or
their proxies, shall be entitled to vote at such meeting regardless of whether
they shall be such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Noteholders as provided in Section 10.3, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Majority Holders
represented at the meeting and entitled to vote.
At any meeting each Noteholder or proxy shall be entitled to one
vote for each $1,000 outstanding principal amount of Notes held or represented
by him; provided, however that no vote shall be cast or counted at any meeting
in respect of any Notes challenged as not outstanding and ruled by the chairman
of the meeting to be not then outstanding. The chairman of the meeting shall
have no right to vote other than by virtue of Notes held by him or instruments
in writing as aforesaid duly designating him as the proxy to vote on behalf of
other Noteholders. Any meeting of Noteholders duly called pursuant to the
provisions of Section 10.2 or Section 10.3 may be adjourned from time to time by
vote of the Majority Holders represented at the meeting and entitled to vote,
and the meeting may be held as so adjourned without further notice.
Section 10.6 Voting at the Meeting and Record to Be Kept. The vote upon
any resolution submitted to any meeting of Noteholders shall be by written
ballots on which shall be subscribed the signatures of the Holders of Notes or
of their representatives by proxy and the principal amount of the Notes voted by
the ballot. The permanent chairman of the meeting shall appoint two inspectors
of votes, who shall count all votes cast at the meeting for or against any
resolution and who shall make and file with the secretary of the meeting their
verified written reports in duplicate of all votes cast at the meeting. A record
in duplicate of the proceedings of each meeting of Noteholders shall be prepared
by the secretary of the meeting and there shall be
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attached to such record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more Persons having
knowledge of the facts, setting forth a copy of the notice of the meeting and
showing that such notice was mailed as provided in Section 10.2 or published as
provided in Section 10.3. The record shall be signed and verified by the
affidavits of the permanent chairman and the secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of
the matters therein stated.
Section 10.7 Exercise of Rights of Trustee or Noteholders May Not Be
Hindered or Delayed by Call of Meeting. Nothing contained in this Article X
shall be deemed or construed to authorize or permit, by reason of any call of a
meeting of Noteholders or any rights expressly or impliedly conferred hereunder
to make such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Noteholders under any of the
provisions of this Indenture or of the Notes.
ARTICLE XI
SECURITY
Section 11.1 Grant of Security Interest. In order to secure the payment
and performance of all obligations of the Company with respect to the Notes
including the due and punctual payment of the principal of, interest on and
premium, if any, on the Notes when and as the same shall become due and payable,
whether on an interest payment date, at a Maturity Date, by acceleration, call
for redemption or otherwise, and interest on the overdue principal and interest,
if any, of the Notes, the Company hereby covenants to execute, deliver and file
of record for the benefit of the Holders, the Security Documents to which it is
a party and this Indenture. The Security Documents shall grant to the Trustee a
security interest in the collateral therein described and when filed shall be
deemed hereby incorporated by reference herein to the same extent and as fully
as if set forth in their entirety at this place, and reference is made hereby to
each Security Document for a more complete description of the terms and
provisions thereof. Each Holder, by accepting a Note, agrees to all of the terms
and provisions of the Security Documents and the Trustee agrees to all of the
terms and provisions of the Security Documents signed by it. At such time, if
any, that (a) any Collateral released pursuant to Section 11.4(a)(vii) becomes
unencumbered by the Permitted Liens described in such Section or (b) the Tank
Storage Facility becomes encumbered by Liens securing the Tank Storage Debt or
any refinancing thereof, such released Collateral or the Tank Storage Facility
(as the case may be) shall, for all purposes of this Indenture and the other
Security Documents, become Collateral and the Company shall, in each instance,
confirm that the Security Interests in such Collateral is effective pursuant to
the Security Documents and Section 11.2, duly perfected and subject to no prior
Security Interests other than Permitted Liens.
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Section 11.2 Recording; Opinions of Counsel
(a) The Company has executed, delivered, filed and recorded and
shall execute, deliver, file and record, all instruments and documents, and has
done and shall do all such acts and other things, at the expense of the Company,
as are reasonably necessary to subject the Collateral to the Security Interests.
As soon as practicable, the Company shall execute, deliver, file and record all
instruments and do all acts and other things as may be reasonably necessary or
advisable to perfect, maintain and protect the Security Interests.
(b) The Company shall cause (x) TIA Section 314(b), relating to
Opinions of Counsel regarding the Lien of the Security Documents, and (y) TIA
Section 314(d), relating to the release of Collateral from the Lien of the
Security Documents and Officers' Certificates or other documents regarding fair
value of the Collateral, to be complied with to the extent applicable. Any
certificate or opinion required by TIA Section 314(d) may be made by an Officer
of the Company or any other obligor upon the Notes, as applicable, to the extent
permitted by TIA Section 314(d).
(c) The Company shall furnish to the Trustee, within 30 days
after the end of the Company's first fiscal year after the date hereof, within
30 days after the end of each fiscal year thereafter, and at least 30 days prior
to the expiration of any financing statements filed in connection with the
Security Interests, an Officers' Certificate, dated as of such date, (i) stating
that either (A) all action has been taken with respect to the recording,
registering, filing, rerecording and refiling of this Indenture, all
supplemental indentures, the Security Documents, financing statements,
continuation statements and all other instruments of further assurance as are
necessary and desirable fully to maintain, protect and preserve the Security
Interests and the rights of the Holders and the Trustee hereunder and under the
Security Documents and reciting the details of such action or referring to prior
Officers' Certificates in which such details are given or (B) no such action is
necessary to maintain, preserve and protect the Security Interests and the
rights of the Holders and the Trustee hereunder and under the Security Documents
during such period, (ii) stating either (A) that, with respect to the trademarks
and service marks, all filings with the United States Patent and Trademark
Office, any state office or other appropriate governmental body necessary to
maintain, protect and preserve the Security Interests in the trademarks and
service marks have been made or (B) that no such action is necessary and (iii)
stating what, if any, action of the forgoing character is necessary during the
fiscal year so as to maintain, protect and preserve the rights of the Holders
and the Trustee hereunder and under the Security Documents.
Section 11.3 Disposition of Certain Collateral Without Requesting
Release.
(a) Notwithstanding the provisions of Sections 11.4, 11.5, 11.6
and 11.7, the Company (or with respect to the Security Documents, the grantor of
the security interest thereunder) may, without requesting or receiving the
consent of the Trustee (and any lender, trustee or collateral agent under any of
the Security Documents):
(i) sell, assign, transfer, license or otherwise dispose
of, free from the Security Interests, any personal property
constituting Collateral that has become worn
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out, obsolete, or unserviceable, upon replacing the same with
machinery or equipment constituting Collateral not necessarily
of the same character but, at the time of such sale, assignment,
transfer, license or other disposition, being of at least equal
value and utility as the Property so disposed of, which Property
shall without further action become Collateral subject to the
Security interests;
(ii) (A) sell, assign, transfer, license or otherwise
dispose of, free from the Security Interests, inventory in the
ordinary course of business and consistent with past practices,
(B) collect, liquidate, sell, factor or otherwise dispose of,
free from the Security Interests, notes receivable in the
ordinary course of business and consistent with past practices
or (C) make cash payments (including repayments of Debt
permitted to be Incurred hereby) that are not otherwise
prohibited by this Indenture;
(iii) sell, assign, lease, license, transfer, abandon or
otherwise dispose of (a) damaged, worn out or other obsolete
Property in the ordinary course of business or (b) other
Property certified by the Independent Engineer to be no longer
necessary for the proper conduct of its business; and
(b) Notwithstanding the provisions of subsection (a) above: (x)
the Company (or with respect to the Security Documents, the grantor of the
security interest thereunder) shall not dispose of or transfer (by lease,
assignment, sale or otherwise) Collateral pursuant to the provisions of Section
11.3(a)(ii) or (iii), having, in the good faith judgment of the Company (or with
respect to the Security Documents, the grantor of the security interest
thereunder) and, if required by the TIA, an Appraiser, a fair value of 5% or
more of the aggregate fair value of all Collateral then existing in any
transaction or any series of related transactions without complying with Section
11.4; and (y) the right of the Company (or with respect to the Security
Documents, the grantor of the security interest thereunder) to rely upon the
provisions of Section 11.3(a)(ii) and (iii) from the date of this Indenture to
December 31, 1998 and for each twelve-month period thereafter beginning on
January 1 (a "TWELVE-MONTH PERIOD") shall be conditioned upon the Company (or
with respect to the Security Documents, the grantor of the security interest
thereunder) delivering to the Trustee, on or before January 30, 1999 and
thereafter within 30 days following the end of such Twelve-Month Period, an
Officers' Certificate to the effect that the proceeds of all of such
dispositions, collections and cash payments which involve Collateral during such
Twelve-Month Period (other than those such dispositions, collections or payments
wherein the Company (or with respect to the Security Documents, the grantor of
the security interests thereunder) has complied with Section 11.4) were used by
the Company (or with respect to the Security Documents, the grantor of the
security interest thereunder) in connection with their businesses.
(c) Any disposition of Collateral made in compliance with the
provisions of this Section 11.3 shall be deemed not to impair the Security
Interests in contravention of the provisions of this Indenture.
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Section 11.4 Requesting Release of Collateral.
(a) Upon receipt of a Release Request, the Trustee shall execute and
deliver, within five Business Days from the receipt of such Release Request, any
instruments prepared by the Company deemed by the Company (or with respect to
the Security Documents, the grantor of the security interests thereunder) to be
reasonably necessary or reasonably appropriate to release all or a part of the
Collateral from the Security Interests, if the provisions of this Section 11.4
have been complied with. Any such Release Request shall request the Trustee to
execute one or more specifically described release instruments (which release
instruments shall accompany such Release Request) and shall certify (i) that no
Default has occurred and is continuing (or with respect to a Release Request
relating to any of the Security Documents, that no default has occurred and is
continuing under the applicable Security Document) and (ii) that one of the
conditions of this Section 11.4(a) set forth below (specifying such condition),
and if such specified condition is described in clause (i), (ii) or (iii) below,
that the conditions of Section 11.3, 11.5 or 11.7, if applicable, have been, or
simultaneously with or immediately following the release will be, fulfilled:
(i) the Collateral will be disposed of in compliance
with Section 11.3;
(ii) there is a substitution of Substitute Collateral in
accordance with Section 11.5;
(iii) the Collateral to be released will be used within
five Business Days either to make redemptions or purchases of
Notes which will be delivered to the Trustee for cancellation;
(iv) all of the conditions precedent to the termination
of the Security Document under which the Lien in the Collateral
to be released was created, or to the release of such Collateral
from the Lien created by such Security Document, as set forth in
such Security Document, have been satisfied;
(v) the Majority Holders have consented in writing to
such release of Collateral from the Security Interests;
(vi) [INTENTIONALLY OMITTED]; or
(vii) the Collateral to be released constitutes First
Lien Debt and such Collateral is (or will be, upon obtaining
such release) encumbered by a Lien permitted pursuant to the
terms of clauses (d), (j), (q) and (t) of the definition of
Permitted Lien.
(b) As a condition to any release of Collateral under this Section
11.4, the Company shall deliver to the Trustee any certificate or opinion
required by TIA Section 314(d), as to the fair value to the obligor of any
Substitute Collateral and as to the fair value of any Collateral to be released,
or by TIA Section 314(c), as to the fulfillment of any condition precedent to
such release, dated as of a date not more than 60 days prior to the date of
substitution or release. Such certificate or opinion shall state that the
proposed release of
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Collateral will not impair the Security Interests in contravention of the
provisions of this Indenture. The Person delivering such certificate or opinion
must be independent with respect to the Company if required by TIA Section
314(d).
(c) In addition to any certificates or opinions required by Section
11.4(b), as a condition to any release of Collateral pursuant to Section 11.5,
the Company (or with respect to releases under the Security Documents, the
grantor of the security interest thereunder) shall deliver to the Trustee an
Opinion of Counsel to the effect that, in the opinion of such counsel, subject
to necessary qualifications, exceptions or limitations, the Trustee is
authorized to execute and deliver the instruments requested and such execution
and delivery will not result in a violation of the terms hereof or any violation
of applicable law and that either (a) all such instruments and documents have
been duly and validly executed and delivered and have been properly recorded and
filed so as to make effective the Security Interest intended to be created by
this Indenture and the Security Documents in the Substitute Collateral or Cash
Collateral to be substituted for the Collateral to be released, and reciting the
details of such action or referring to prior Opinions of Counsel in which such
details are given, or (b) no such action is necessary to make the Security
Interest in such Substitute Collateral or Cash Collateral effective.
(d) Any release or subordination of Collateral made in compliance
with the provisions of this Section 11.4 shall be deemed not to impair the
Security Interests in contravention of the provisions of this Indenture.
Section 11.5 Substitute Collateral Other Than Cash Collateral.
(a) The Company (or with respect to releases under the Security
Documents, the grantor of the security interest thereunder) may, at its option,
obtain a release of Collateral by subjecting other proposed Collateral to the
respective Security Interests in place of and in exchange for such Collateral to
be released, all in accordance with the provisions and conditions of Section
11.4 and this Section 11.5. The Trustee shall not be bound to ascertain or
inquire as to the Company's (or with respect to substitutions of Collateral
under the Security Documents, the applicable grantor's) title in and to any such
Substitute Collateral or as to the existence of any Liens or encumbrances on any
such Substitute Collateral.
(b) The Company (or with respect to substitutions of Collateral
under the Security Documents, the grantor of the security interest) may
substitute Collateral pursuant to this Section 11.5, if all of the following
conditions are met:
(1) the Company (or with respect to substitutions of Collateral
under the Security Documents, the grantor of the security interest)
complies with Section 11.4(a) and the Company (or with respect to
substitutions of Collateral under the Security Documents, the grantor of
the security interest) delivers a Release Request to the Trustee
stating, in addition to the other requirements of Section 11.4, that the
Company (or with respect to substitutions of Collateral under the
Security Documents, the grantor of the security interest), as the case
may be, intends to substitute the Property specifically described
therein for the Collateral specifically described therein;
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(2) the fair value of the proposed Substitute Collateral is at
least equal to the fair value of the Collateral to be released and, if
and only if the fair value of Collateral to be released, and the fair
value of all other Collateral released without an Appraisal pursuant to
this Section 11.5 during the then current calendar year exceeds 10% of
the aggregate principal amount of the Notes, the Company shall deliver
to the Trustee an Appraisal stating that the Appraised Value of the real
property Collateral to be released or the dollar amount of the cash
collateral to be released is less than or equal to the Appraised Value
of such proposed Substitute Collateral; and
(3) as of the date of the release of the Collateral to be
released, the Security Interests in the Substitute Collateral are
effective pursuant to the Security Documents and Section 11.2, duly
perfected and subject to no prior Security Interests other than
Permitted Liens.
(c) Any release of Collateral made in compliance with the provisions
of this Section 11.5 shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
(d) Notwithstanding anything to the contrary in this Section 11.5,
the Company shall not substitute the Delayed Coking Unit, the Fluid Catalytic
Cracking Unit or the Crude Unit.
Section 11.6 Release Upon Satisfaction and Discharge of this Indenture.
(a) In the event that the Company delivers an Officers' Certificate
certifying that all of the provisions of Section 8.2 have been satisfied, the
Trustee shall disclaim and give up any and all rights it has in or to the
Collateral, and any rights it has under the Security Documents (subject to
Section 8.7).
(b) Any release of Collateral made in compliance with the provisions
of this Section 11.6 shall be deemed not to impair the Security Interests in
contravention of the provisions of this Indenture.
Section 11.7 Reliance on Opinion of Counsel. The Trustee shall, before
taking any action under this Article XI, be entitled to receive an Opinion of
Counsel at the expense of the Company, stating the legal effect of such action,
and that such action will not be in contravention of the provisions hereof, and
such opinion shall be full protection to the Trustee for any action taken or
omitted to be taken in reliance thereon; provided that the Trustee's action
under this Article XI shall at all times be and remain subject to its duties and
protections under Article VII.
Section 11.8 Purchaser May Rely. A purchaser in good faith of the
Collateral or any part thereof or interest therein which is purported to be
transferred, granted or released by the Trustee as provided in this Article XI
(i) shall not be obligated to ascertain the validity of the transfer, grant or
release, and may rely on the authority of the Trustee to execute the document
evidencing such transfer, grant or release, (ii) shall not be obligated to
inquire as to the
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satisfaction of any conditions precedent to the exercise of such authority, and
(iii) shall not be obligated to determine whether the application of the
purchase price therefor complies with the terms hereof.
Section 11.9 Payment of Expenses. Without limiting Section 7.7, on
demand of the Trustee, the Company forthwith shall pay or satisfactorily provide
for all reasonable expenditures incurred by the Trustee under this Article XI
(including the reasonable fees and expenses of counsel). In the event that the
Company (or with respect to any Security Documents, the grantor of the security
interest thereunder) makes a Release Request more often than once a month, the
Trustee and the Company shall negotiate an additional reasonable fee for each
such request. All such sums referred to in this Section 11.9 shall be a Lien
upon the Collateral and shall be secured thereby.
Section 11.10 Trustee's Duties. The powers and duties conferred upon the
Trustee by this Article XI are solely to protect the Security Interests and
shall not impose any duty upon the Trustee to exercise any such powers except as
expressly provided in this Indenture. The Trustee shall be under no duty to the
Company (or with respect to any Security Documents, the grantor of the security
interest thereunder) whatsoever to make or give any presentment, demand for
performance, notice of non-performance, protest, notice of protest, notice of
dishonor, or other notice or demand in connection with any Collateral, or to
take any steps necessary to preserve any rights against prior parties except as
expressly provided in this Indenture. The Trustee shall not be liable to the
Company (or with respect to any Security Documents, the grantor of the security
interest thereunder) for failure to collect or realize upon any or all of the
Collateral, or for any delay in so doing, nor shall the Trustee be under any
duty to the Company (or with respect to any Security Documents, the grantor of
the security interest thereunder) to take any action whatsoever with regard
thereto. The Trustee shall have no duty to the Company (or with respect to any
Security Documents, the grantor of the security interest thereunder) to comply
with any recording, filing, or other legal requirements necessary to establish
or maintain the validity, priority or enforceability of the Security Interests
in, or the Trustee's rights in or to, any of the Collateral.
Section 11.11 Authorization of Actions to be Taken by the Trustee Under
the Security Documents. The Trustee may, in its sole discretion and without the
consent of the Holders, but subject to Article VII, take all actions it deems
necessary or appropriate in order to (a) enforce or effect the Security
Documents and (b) collect and receive any and all amounts payable in respect of
the obligations of the Company hereunder in accordance with and to the extent
provided in the Security Documents. Such actions shall include, but not be
limited to, enforcing or effecting any term or provision of the Security
Documents. Subject to the provisions of the Security Documents, the Trustee
shall have the power to institute and to maintain such suits and proceedings as
it may deem expedient to prevent any impairment of the Collateral by any acts
which may be unlawful or in violation of the Security Documents or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security
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hereunder or be prejudicial to the interests of the Holders or of the Trustee).
In addition, the Trustee may act upon any Release Request by the Company (or
with respect to any Security Documents, the grantor of the security interest
thereunder) on behalf of the Company.
ARTICLE XII
MISCELLANEOUS
Section 12.1 TIA Controls. If any provision of this Indenture limits,
qualifies, or conflicts with the duties imposed by operation of the TIA, the
imposed duties, upon qualification of this Indenture under the TIA, shall
control.
Section 12.2 Notices. Any notices or other communications to the Company
or the Trustee required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by telex, by telecopier or
registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
if to the Company:
TransAmerican Refining Corporation
14902 River Road
New Sarpy, LA 70078
Telephone: (504) 764-8611
Facsimile: (504) 764-2359
Attention: Glenn McGinnis
with a copy to:
Gardere & Wynne, L.L.P.
1601 Elm Street, Suite 3000
Dallas, Texas 75201
Telephone: (214) 999-3000
Facsimile: (214) 999-4667
Attention: C. Robert Butterfield
if to the Trustee:
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Telephone: (212) 815-5359
Facsimile: (212) 815-5915
Attention: Corporate Trust Administration
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<PAGE> 92
The Company or the Trustee by notice to each other party may
designate additional or different addresses as shall be furnished in writing by
such party. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered, if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and five Business Days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).
Any notice or communication mailed to DTC shall be mailed to DTC
by first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar and shall be sufficiently given to him
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, regardless of whether the addressee receives it.
Section 12.3 Communications by Holders with Other Holders. Noteholders
may communicate pursuant to TIA Section 312(b) with other Noteholders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of TIA
Section 312(c).
Section 12.4 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel (in form and substance reasonably
satisfactory to the Trustee) stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 12.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
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(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
Section 12.6 Rules by Trustee, Paying Agent, Registrar. The Trustee may
make reasonable rules for action by or at a meeting of Noteholders. The Paying
Agent or Registrar may make reasonable rules for its functions.
Section 12.7 Legal Holidays. A "LEGAL HOLIDAY" used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions at such place are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
Section 12.8 Governing Law. THIS INDENTURE AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. INSOFAR AS THIS
INDENTURE RELATES TO THE MORTGAGE OR THE CREATION, PERFECTION OR FORECLOSURE OF
LIENS AND THE ENFORCEMENT OF RIGHTS AND REMEDIES AGAINST THE COLLATERAL UNDER
THE SECURITY DOCUMENTS, IT SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION
SPECIFIED IN SUCH DOCUMENTS. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS INDENTURE AND THE NOTES AND IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF
THE AFORESAID COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT THEY
MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION
WHICH THEY 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 THE TRUSTEE OR ANY
NOTEHOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION.
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<PAGE> 94
Section 12.9 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any of its Subsidiaries. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 12.10 No Recourse against Others. A director, officer, employee,
stockholder or incorporator, as such, of the Company or any of its Subsidiaries
shall not have any liability for any obligations of the Company or such
Subsidiary under the Notes or this Indenture or for any claim based on, in
respect of or by reason of such obligations or their creations. Each Noteholder
by accepting a Note waives and releases all such liability. Such waiver and
release are part of the consideration for the issuance of the Notes.
Section 12.11 Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
Section 12.12 Duplicate Originals. All parties may sign any number of
copies or counterparts of this Indenture. Each signed copy or counterpart shall
be an original, but all of them together shall represent the same agreement.
Section 12.13 Severability. In case any one or more of the provisions in
this Indenture or in the Notes shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and enforceability of any
such provision in every other respect and of the remaining provisions shall not
in any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
Section 12.14 Table of Contents, Headings, Etc. The Table of Contents,
Cross-Reference Table and headings of the Articles and the Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
or provisions hereof.
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<PAGE> 95
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
TRANSAMERICAN REFINING CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[Seal]
Attest:
- -----------------------------------
THE BANK OF NEW YORK, as Trustee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
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<PAGE> 96
EXHIBITS
<TABLE>
<S> <C>
Exhibit A - Form of Note
Exhibit B - Certificate of Transferor
Exhibit C - Form of Mortgage
Exhibit D - Form of Security Agreement
Exhibit E - Company's Board Resolutions
Exhibit F - Form of Construction Collateral and Disbursement Agreement
</TABLE>
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<PAGE> 97
EXHIBIT A
(FACE OF SENIOR SECURED NOTE)
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY (THE "DEPOSITORY") TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE
DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.](1)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE 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 NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH NOTE, PRIOR TO THE DATE WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD
THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) 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 COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH
NOTE) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE
- -----------
(1) This paragraph should be included only if the Note is issued in global
form.
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<PAGE> 98
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 NOTE 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 COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH
OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THIS
NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE.
A-2
<PAGE> 99
[FORM OF NOTE]
TRANSAMERICAN REFINING CORPORATION
15% SENIOR SECURED NOTE DUE 2003
No.__________ $________ CUSIP_______________
TransAmerican Refining Corporation, a Texas corporation
(hereinafter called the "COMPANY," which term includes any successor corporation
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ____________________________, or registered assigns, the
principal sum of ________________ Dollars, on December 1, 2003.
Interest Payment Dates: June 1 and December 1, commencing [_____]
Record Dates: May 15 and November 15
Reference is made to the further provisions of this Note on the
reverse side, which will, for all purposes, have the same effect as if set forth
at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
TRANSAMERICAN REFINING CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Trustee's Certificate of Authentication:
This is one of the Notes referred to in the within-mentioned Indenture:
_______________________________, as Trustee
By:
--------------------------------
Authorized Signature
Dated:
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<PAGE> 100
(BACK OF NOTE)
TRANSAMERICAN REFINING CORPORATION
15% SENIOR SECURED NOTE DUE 2003
1. Interest.
TransAmerican Refining Corporation, a Texas corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at a
rate of 15% per annum. To the extent it is lawful, the Company promises to pay
interest on any interest payment due but unpaid on such principal amount at a
rate of 2% per annum compounded semi-annually. On each Interest Payment Date
through and including December 1, 2000, the Company may, at its option and in
its sole discretion, in lieu of the payment of interest in cash on the Notes,
pay interest on all outstanding Notes in whole, but not in part, through the
issuance of PIK Notes, in denominations (rounded, if necessary to the nearest
dollar) of $1 and integral multiples thereof, in an aggregate principal amount
equal to the amount of interest that would be payable with respect to such
Notes, if such interest were paid in cash. The Company shall notify the Holders
and the Trustee in writing of its election to pay interest through the issuance
of PIK Notes not less than 10 nor more than 45 days prior to the record date for
an Interest Payment Date on which PIK Notes will be issued. The Company may, at
its option and in its sole discretion, issue Additional Notes, in denominations
(rounded, if necessary to the nearest dollar) of $1 and integral multiples
thereof, in an aggregate principal amount of up to $150,000,000. The Company
shall notify the Holders and the Trustee in writing of any issuance of
Additional Notes not less than 10 days prior to the date on which Additional
Notes will be issued.
Each PIK Note or Additional Note is an additional obligation of
the Company and shall be governed by, and entitled to the benefits of, and shall
be subject to the terms of, this Agreement and shall rank pari passu with and be
subject to the same terms (including the interest rate from time to time payable
thereon) as any other Note (except, as the case may be, with respect to the
issuance date and aggregate principal amount).
The Company will pay interest semi-annually on June 1 and
December 1 of each year (each, an "INTEREST PAYMENT DATE"), commencing
[________]. Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance of the Notes. Interest on the Notes will be computed on the basis of a
360-day year consisting of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date. Holders must
surrender Notes to a Paying Agent to collect principal payments. Except as
provided below, the Company shall pay principal and interest in
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<PAGE> 101
such coin or currency of the United States of America as at the time of payment
shall be legal tender for payment of public and private debts ("U.S. LEGAL
TENDER"). However, the Company may pay principal and interest by wire transfer
of Federal funds, or interest by its check payable in such U.S. Legal Tender or,
to the extent provided above, by issuance of PIK Notes. The Company shall
deliver any such interest payment to the Paying Agent who shall remit such
payment to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "TRUSTEE") will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders. The Company or an Affiliate of it
may, subject to certain exceptions, act as Paying Agent, Registrar or
co-Registrar.
4. Indenture.
The Company issued the Notes under an Indenture, dated as of
December __, 1998 (the "INDENTURE"), between the Company and the Trustee.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as in effect on the date of the Indenture. The Notes are subject to all
such terms, and Holders of Notes are referred to the Indenture and said Act for
a statement of them. The Notes are senior secured obligations of the Company
limited in aggregate principal amount to $300,000,000 plus the principal amount
of any PIK Notes.
5. Optional Redemption.
The Notes may be redeemed in whole or from time to time in part
at any time at the option of the Company, at par, in each case, together with
any accrued but unpaid interest to the Redemption Date. Any such redemption will
comply with Article III of the Indenture.
6. Notice of Redemption.
Notice of redemption will be mailed by first class mail at least
15 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at his registered address. Notes in denominations larger
than $1,000 may be redeemed in part.
Except as set forth in the Indenture, from and after any
Redemption Date, if monies for the redemption of the Notes called for redemption
shall have been deposited with the Paying Agent on such Redemption Date the
Notes called for redemption will cease to bear interest and the only right of
the Holders of such Notes will be to receive payment of the Redemption Price and
any accrued and unpaid interest to the Redemption Date.
7. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in
denominations of $1 and integral multiples thereof. A Holder may register the
transfer of, or exchange Notes in accordance with, the Indenture. The Registrar
may require a Holder, among other things, to
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<PAGE> 102
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Notes selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it
for all purposes.
9. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agent(s) will pay the money
back to the Company at its written request. Thereafter, all liability of the
Trustee and such Paying Agent(s) with respect to such money shall cease.
10. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits into an irrevocable trust
with the Trustee U.S. Legal Tender or U.S. Government Obligations sufficient to
pay the principal of and interest on the Notes to redemption or maturity and
complies with the other provisions of the Indenture relating thereto, the
Company will be discharged from certain provisions of the Indenture and the
Notes (including the financial covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the written consent of the Majority Holders, and
any existing Default or Event of Default or compliance with any provision may be
waived with the consent of the Majority Holders. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency
(provided such amendment or supplement does not adversely affect the rights of
any Holder of a Note).
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the
Company and its Subsidiaries to, among other things, Incur additional Debt or
issue Disqualified Capital Stock, make payments in respect of its Capital Stock,
enter into transactions with Related Persons, incur Liens, merge or consolidate
with any other Person and sell, lease, transfer or otherwise dispose of
substantially all of its properties or assets. The limitations are subject to a
number of important qualifications and exceptions. The Company must deliver a
quarterly report to the Trustee on compliance with such limitations.
13. Successors.
When a successor assumes all the obligations of its predecessor
under the Notes and the Indenture, the predecessor will be released from those
obligations.
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<PAGE> 103
14. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or
the Majority Holders may declare all the Notes to be due and payable immediately
in the manner and with the effect provided in the Indenture. Holders of Notes
may not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Majority Holders may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of Notes notice of any continuing Default or Event of
Default (except a Default in payment of principal, premium, if any, or interest,
including a Default at any Maturity Date), if it determines that withholding
notice is in their interest.
15. No Recourse Against Others.
No stockholder, director, officer, employee or incorporator, as
such, past, present or future, of the Company or any of its Subsidiaries or any
successor corporation shall have any liability for any obligation of the Company
or such Subsidiary under the Notes or the Indenture or for any claim based on,
in respect of or by reason of, such obligations or their creation.
Each Holder of a Note by accepting a Note waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Notes.
16. Authentication.
This Note shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on the other side of this Note.
17. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship and not
as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to
Minors Act). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to them in the Indenture.
18. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company will cause CUSIP numbers
to be printed on the Notes as a convenience to the Holders of the Notes. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
19. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Note, by his acceptance thereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, dated as of
December __, 1998, between the Company and the initial Holders (the
"REGISTRATION RIGHTS AGREEMENT"), including but not
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<PAGE> 104
limited to the obligations of the Holders with respect to a registration and the
indemnification of the Company and the Purchasers (as defined therein) to the
extent provided therein.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
TransAmerican Refining Corporation
14902 River Road
New Sarpy, LA 70078
Telephone: (504) 764-8611
Facsimile: (504) 764-2359
Attention: Glenn McGinnis.
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<PAGE> 105
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to .
(Insert assignee's soc. sec. or tax I.D. No. )
- -------------------------------------------------------------------------------.
- -------------------------------------------------------------------------------.
- -------------------------------------------------------------------------------.
- -------------------------------------------------------------------------------.
(Print or type assignee's name, address and zip code)
and irrevocably appoint________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:
Signature
- ------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*
- ------------------------------------------
* NOTICE: The signature must be guaranteed by an institution which is a member
of one of the following recognized signature guarantee programs:
(1) The Securities Transfer Agents Medallion Program (STAMP);
(2) The New York Stock Exchange Medallion Stamp Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-9
<PAGE> 106
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES(2)
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
<TABLE>
<CAPTION>
Amount of Amount of
decrease in increase in Principal Amount Signature of
Principal Amount Principal Amount of this Global authorized
of this Global of this Global Note decrease (or signatory of
Date of Exchange Note Note increase) Trustee
<S> <C> <C> <C> <C>
</TABLE>
- ---------------
(2) This should be included only if the Note is issued in global form.
A-10
<PAGE> 107
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER OF SENIOR SECURED NOTES
Re: [Series A] [Series B] 15% Senior Secured Notes due 2003 (the "NOTES") of
TransAmerican Refining Corporation.
This Certificate relates to $_______________ principal amount of Notes held in
* [ ] book-entry or * [ ] definitive form by
________________________________________ (the "TRANSFEROR").
The Transferor, by written order, has requested the Trustee:
[ ] to deliver in exchange for its beneficial interest in the Global Notes
held by the depository, a Note or Notes in definitive, registered form
of authorized denominations and an aggregate principal amount equal to
its beneficial interest in such Global Note (or the portion thereof
indicated above); or
[ ] to exchange or register the transfer of a Note or Notes. In connection
with such request and in respect of each such Note, the Transferor does
hereby certify that Transferor is familiar with the Indenture relating
to the above captioned Notes and, the transfer of this Note does not
require registration under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), because such Note:
[ ] is being acquired for the Transferor's own account, without transfer;
[ ] is being transferred pursuant to an effective registration statement;
[ ] is being transferred to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act), in reliance on such Rule 144A;
[ ] is being transferred pursuant to an exemption from registration in
connection with Rule 904 under the Securities Act;**
[ ] is being transferred pursuant to Rule 144 under the Securities Act;** or
[ ] is being transferred pursuant to another exemption from the registration
requirements of the Securities Act (explain:
______________________________________________).**
[INSERT NAME OF TRANSFEROR]
Date:___________________________ By:_________________________________
- ---------------
* Check applicable box.
** If this box is checked, this certificate must be accompanied by an
opinion of counsel to the effect that such transfer is in compliance
with the Securities Act.
<PAGE> 1
EXHIBIT 99.11
TRANSAMERICAN REFINING CORPORATION,
A TEXAS CORPORATION
SECURITY AND PLEDGE AGREEMENT
BY
TRANSAMERICAN REFINING CORPORATION,
A TEXAS CORPORATION
IN FAVOR OF
TRANSAMERICAN ENERGY CORPORATION,
A DELAWARE CORPORATION
DATED AS OF DECEMBER ___, 1998
<PAGE> 2
TRANSAMERICAN REFINING CORPORATION
(A TEXAS CORPORATION)
SECURITY AND PLEDGE AGREEMENT
This Security and Pledge Agreement (this "Agreement") is made and
entered into as of December ___, 1998, by TransAmerican Refining Corporation, a
Texas corporation (the "Company"), in favor of TransAmerican Energy Corporation,
a Delaware corporation (the "Lender").
RECITALS
WHEREAS, the Company and the Lender have entered into that certain Loan
Agreement dated as of June 13, 1997, as amended by (i) a First Amendment to Loan
Agreement dated as of December 30, 1997, (ii) a Second Amendment to Loan
Agreement dated as of November 13, 1998, and (iii) a Third Amendment to Loan
Agreement dated as of December ___, 1998 (said Loan Agreement, as so amended,
the "TARC Intercompany Loan Agreement"), each executed by the Company and the
Lender; and
WHEREAS, the Company's obligations under the TARC Intercompany Loan
Agreement are evidenced by that certain promissory note dated June 13, 1997, in
the principal amount of $920,000,000, and executed by the Company in favor of
the Lender (the "TARC Intercompany Note"); and
WHEREAS, in order to secure the payment and performance in full of the
obligations of the Company under the TARC Intercompany Loan Agreement, the
parties hereto desire to set forth their mutual understanding and certain
agreements regarding the terms and conditions of the grant of a security
interest in the Pledged Collateral (as defined below);
NOW, THEREFORE, for the good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Lender hereby
agree as follows:
Section 1. Definitions.
(a) As used in this Agreement, capitalized terms not otherwise
defined herein have the meanings set forth in the TARC Intercompany Loan
Agreement or, if not defined therein, the meanings set forth in the
Indenture (hereinafter defined), and the following terms shall have the
respective meanings set forth below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Default" and "Event of Default" shall have the meanings assigned
to those terms in Section 7(a) of this Agreement.
"GAAP" means generally accepted accounting principles of the
United States of America, consistently applied.
<PAGE> 3
"Indebtedness" means the following indebtedness and liabilities
of the Company (and any extensions, renewals, refunding, increases,
substitutions, replacements, consolidations, modifications or
rearrangements of such indebtedness and liabilities, regardless of
whether the Company executes any extension agreement or renewal
instrument):
(i) all amounts advanced or expended by the Lender under the
TARC Intercompany Loan Agreement and/or under or in connection
with this Agreement, all reasonable costs and out-of-pocket
expenses (excluding expenses representing administrative
overhead) at any time and from time to time incurred by the
Lender in connection with the administration and/or enforcement
of this Agreement (including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel employed by the Lender
in connection therewith), and all indemnities at any time and
from time to time payable hereunder to the Lender, and
(ii) all principal, premium and accrued interest owing on the
TARC Intercompany Note, and
(iii) all other amounts payable by the Company under the
Notes and the TARC Intercompany Loan Agreement.
"Indenture" means the Indenture dated as of June 13, 1997 between
TEC and the TEC Indenture Trustee, pursuant to which TEC's 11.5% Senior
Secured Notes due 2002 and 13% Senior Secured Discount Notes due 2002
were issued, as supplemented by First Supplemental Indenture dated as of
December 30, 1997, by Second Supplemental Indenture dated as of November
13, 1998, and by Third Supplemental Indenture dated as of December ___,
1998.
"Indenture Trustee" means Firstar Bank of Minnesota, N.A., as
Trustee under the TEC Indenture, and its successors and assigns in such
capacity.
"New Lenders" shall have the meaning assigned to that term in the
Offering Circular.
"Obligations" shall have the meaning assigned to that term in
Section 2 of this Agreement.
"Offering Circular" means the offering circular dated December
___, 1998, pursuant to which $150,000,000 in aggregate principal amount
of the 15% Senior Secured Notes due 2003 of TransAmerican Refining
Corporation, a Texas corporation, were issued.
"Perfection Certificate" means the certificate delivered to the
Lenders substantially in the form of EXHIBIT A hereto.
"Pledged Collateral" shall have the meaning assigned to that term
in Section 2 of this Agreement.
"Purchasers" shall have the meaning assigned to that term in the
Offering Circular.
"Series A Preferred Stock" means the Class A Participating
Preferred Stock, Series A, of TCR Holding.
2
<PAGE> 4
"Series B Preferred Stock" means the Class A Participating
Preferred Stock, Series B, of TCR Holding.
"TCR Holding" means TCR Holding corporation, a Delaware
corporation.
"TCR Holding Participating Preferred Stock" means the Series A
Preferred Stock and the Series B Preferred Stock.
"TCR Holding Stockholders Agreement" means the Stockholders
Agreement (TCR Holding) dated as of December ___, 1998, among TCR
Holding, the Company, the New Lenders and the Purchasers, as the same
may be amended, supplemented, modified and/or restated and in effect
from time to time.
"UCC" means the Uniform Commercial Code as in effect in the State
of New York.
(b) All terms used in this Agreement which are defined in the
UCC, other than those which are defined in the Indenture or specifically
defined in Section 1(a) above, shall have the same meaning herein as in
the UCC.
Section 2. Grant of Security Interest.
(a) The Company hereby pledges to the Lender, and grants to the
Lender a security interest in all of the Company's right, title and
interest in, to and under any and all of the following described
property, rights and interests, in each case, wherever located, whether
now owned or hereafter acquired or arising, all accessions and additions
thereto, all substitutions and replacements therefor, and all proceeds
and products thereof (collectively, the "Pledged Collateral"):
(i) all of the issued and outstanding shares of the TCR
Holding Participating Preferred Stock identified on Schedule 2(a)
attached hereto;
(ii) all other shares of TCR Holding Participating Preferred
Stock now or hereafter acquired by the Company in any manner
issued by TCR Holding, and the certificates representing such TCR
Holding Participating Preferred Stock, and any present or future
options, warrants or other rights to subscribe for or purchase
any TCR Holding Participating Preferred Stock or any notes,
bonds, debentures or other evidences of indebtedness now or
hereafter owned or acquired by the Company in any manner that are
any time convertible, exchangeable or exercisable into TCR
Holding Participating Preferred Stock; and
(iii) all proceeds and products of the foregoing and
distributions thereof or with respect thereto, including without
limitation dividends, distributions, cash, instruments and other
property or securities, now or hereafter at any time or from time
to time received or receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the
foregoing.
3
<PAGE> 5
(b) Subject to any Permitted Liens, pursuant to the terms hereof,
the Company has endorsed, assigned and delivered to the Lender or such
other Person that the Lender has designated as its agent to hold for
perfection purposes all negotiable or non-negotiable instruments
(including certificated securities) and chattel paper pledged by its
hereunder, together with instruments of transfer or assignment duly
executed in blank as the Lender may have specified. In the event that
the Company shall, after the date of this Agreement, acquire any other
negotiable or non-negotiable instruments (including certificated
securities) or chattel paper to be pledged by it hereunder, the Company
shall, subject to Permitted Liens, forthwith endorse, assign and deliver
the same to the Lender, accompanied by such instruments of transfer or
assignment duly executed in blank as the Lender may from time to time
specify. To the extent that any securities are uncertificated,
appropriate book-entry transfers reflecting the pledge of such
securities created hereby have been, or in the case of uncertificated
securities hereafter acquired by the Company, will at the time of such
acquisition be, duly made for the account of the Lender or one or more
nominees of the Lender will the issuer of such securities or other
appropriate book-entry facility or financial intermediary, with the
Lender having at all times the rights to obtain definitive certificates
(in the Lender's name or in the name of one or more nominees of the
Lender) where the issuer customarily or otherwise issues certificates,
all to be held as Pledged Collateral hereunder. The Company hereby
acknowledges that the Lender may, in its discretion, appoint one or more
financial institutions to act as the Lender's agent in holding in
custodial accounts instruments or other financial assets, including
securities, in which the Lender is granted a security interest
hereunder, including, without limitation, certificates of deposit and
other instruments evidencing short term obligations.
(c) The inclusion of proceeds in this Agreement does not
authorize the Company to sell, dispose of or otherwise use the Pledged
Collateral in any manner not specifically authorized hereby or under the
Indenture.
(d) This Agreement secures the prompt and complete (i) payment of
all obligations of the Company to the Lender under the TARC Intercompany
Note, whether such obligations are now existing or hereafter arising,
and all renewals, extensions, amendments, supplements and rearrangements
thereof and (ii) payment and performance and all representations,
covenants and conditions by the Company contained or incorporated herein
and in the TARC Intercompany Loan Agreement, in each case whether for
principal, interest, prepayment premium, taxes, costs, losses,
compensation, reimbursements, fees, expenses or any other amount payable
to the Lender under the terms of this Agreement (all such obligations,
covenants and conditions described in the foregoing clauses (i) and (ii)
being hereinafter collectively referred to as the "Obligations").
Section 3. Representations and Warranties. The Company represents and
warrants, as of the date hereof, to the Lender as follows:
(a) The chief executive office and principal place of business of
the Company is located at 1300 N. Sam Houston Parkway East, Suite 320,
Houston, Harris County, Texas 77032. Any and all Pledged Collateral not
delivered to the Lender or its designated agent is and will continue to
be located only in the States of Texas and Louisiana.
(b) The Company is the legal and beneficial owner of all of the
Pledged Collateral free and clear of any lien, security interest, charge
or encumbrance of any kind or nature, except for
4
<PAGE> 6
the lien and security interest created hereby and for Permitted Liens,
and has not made any other pledge, assignment, mortgage, hypothecation
or transfer of the Pledged Collateral except as permitted hereunder or
under the TARC Intercompany Loan Agreement. Except for the lien and
security interest created hereby, and for Permitted Liens, all of the
Pledged Collateral is free from any material credit, deduction,
allowance, defense, dispute, setoff or counterclaim, and there is no
material extension or indulgence with respect thereto. The Pledged
Collateral is not subject to any put, call, option or other right in
favor of any other person whatsoever.
(c) The Pledged Collateral is accurately described in Schedule
2(a) hereto.
(d) This Agreement has been duly executed and delivered by the
Company and creates a valid security interest in, and lien on, the
Pledged Collateral securing the payment of the Obligations. Upon the
physical delivery of the certificates evidencing the Pledged Collateral
to the Lender or its designated agent and the making of the filing of a
financing statement in the Office of the Secretary of State of Texas and
the taking of all other actions necessary to perfect the security
interests created hereby, including, without limitation, those actions
specified in Section 2(a) and Section 4, the security interests created
by this Agreement will be duly perfected security interests subject to
no equal or prior lien, security interest or encumbrance of any kind or
nature other than Permitted Liens.
(e) The Company has the requisite corporate power and authority
to pledge the Pledged Collateral in the manner hereby done or
contemplated and to defend its title thereto against the lawful claims
of all persons whomsoever.
(f) Neither the execution and delivery of this Agreement by the
Company, the performance by the Company of its obligations hereunder,
nor the transactions herein contemplated will (i) violate the Company's
charter or bylaws, (ii) violate the terms of any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document
to which the Company is a party, (iii) violate any law, order, rule or
regulation applicable to the Company of any court or any government,
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company or its properties, or (iv) result
in or require the creation or imposition of any lien (other than the
lien contemplated hereby), upon or with respect to any of the property
now owned or hereafter acquired by the Company, which violation or
conflict would have a material adverse effect on the financial
condition, business, assets or liabilities of the Company or on the
value of the Pledged Collateral or a material adverse effect on the
security interests hereunder.
(g) The Pledged Collateral includes all of the issued and
outstanding shares of the TCR Holding Participating Preferred Stock
owned by the Company on the date hereof, which shares are described in
Schedule 2(a) attached hereto.
(h) No consent or approval which has not been obtained on or
prior to the date hereof of any other person or entity and no
authorization, approval or other action (other than delivery of physical
certificates evidencing the Pledged Collateral) by, and no notice to or
filing with any governmental body (other than UCC filings), regulatory
authority or securities exchange, was or is necessary as a condition to
the validity of the pledge hereunder of the Pledged Collateral, and such
pledge is effective to vest in the Lender the rights of the Lender in
the Pledged Collateral as
5
<PAGE> 7
set forth herein. Except for the limitations and restrictions imposed by
the TCR Holding Stockholders Agreement, there are no restrictions on the
transferability of any of the Pledged Collateral transferred or
delivered by the Company hereunder or, except for the limitations and
restrictions imposed by the TCR Holding Stockholders Agreement and
restrictions related to federal and state securities laws governing the
sale of "restricted stock" or "control stock," with respect to the
foreclosure, transfer or disposition thereof by the Lender.
Section 4. Covenants. During the term of this Agreement and until all of
the Obligations with respect to the Indebtedness have been fully and finally
paid and discharged in full, the Company covenants and agreed with the Lender
that:
(a) Except as permitted by the TARC Intercompany Loan Agreement
or in the ordinary course of business, the Company will not make any
compromise or settlement with respect to the Pledged Collateral without
notice to or consent of the Lender.
(b) The Company shall deliver to the Lender or its designated
agent concurrently with the execution of this Agreement or, to the
extent acquired subsequent to the date of execution hereof, immediately
upon the Company's acquisition thereof: (i) all certificates and
instruments representing the Pledged Collateral and a revised Schedule
2(a), and (ii) all certificates and instruments representing each other
item of the Pledged Collateral (including all certificates, instruments
and notes representing any proceeds of the Pledged Collateral). Any and
all Pledged Collateral delivered to the Lender or its designated agent
in the form of certificates, securities, instruments, or documents shall
be accompanied by undated duly executed powers in blank and by such
other instruments of transfer or documents as the Lender may reasonably
request. The Lender may hold the certificates representing the Pledged
Collateral delivered to it in its own name or in the name of its
nominee, all in form and substance satisfactory to the Lender.
(c) From time to time, the Company shall, at its own expense,
promptly give, execute, deliver, file and/or otherwise formalize any
such notice, statement, instrument, document, agreement or other papers,
and do all such other acts and things, as may be necessary or desirable,
or and as the Lender may reasonably request, in order to create,
evidence, preserve, perfect, validate or continue any lien or security
interest created pursuant to this Agreement or to enable the Lender to
exercise or enforce its rights hereunder with respect to such lien or
security interest, or otherwise further to effect the purposes of this
Agreement. Without limiting the generality of the foregoing, the Company
shall, at any time or from time to time upon the request of the Lender
and at the Company's own expense, execute, acknowledge, witness,
deliver, file and/or record such financing and continuation statements,
notices, additional assignments and other documents or instruments (all
of which shall be in form and substance reasonably satisfactory to the
Lender and its counsel) as the Lender may from time to time reasonably
request for the perfection of the liens and security interests created
hereby.
(d) The Company shall promptly notify the Lender (i) of any
material changes in any fact or circumstance represented or warranted by
the Company with respect to any material portion of the Pledged
Collateral, (ii) of any material impairment of the Pledged Collateral
and (iii) of any claim, action or proceeding affecting title to all or
any material portion of the Pledged Collateral.
6
<PAGE> 8
(e) Except for the liens and security interests created by this
Agreement and the Permitted Liens in the Pledged Collateral, the Company
shall at its own expense defend the Pledged Collateral against any and
all liens, claims, security interests and other encumbrances or
interest, howsoever arising and shall maintain and preserve the security
interest granted hereunder with respect to the Pledged Collateral as
long as this Agreement shall remain in full force and effect. The
Company shall not make any other pledge, assignment, mortgage,
hypothecation or transfer of the Pledged Collateral except as permitted
hereunder or under the TARC Intercompany Loan Agreement.
(f) The Company shall at all times keep accurate and complete
records with respect to the Pledged Collateral, including, without
limitation, records of all payments made, credit granted and proceeds
received in connection therewith.
(g) The Company shall not relocate its principal place of
business or chief executive office to a county or state other than that
specified in Section 3(a) of this Agreement unless the Company gives 30
days' prior written notice to the Lender, which notice shall specify the
county and state into which such relocation is to be made. The Pledged
Collateral, to the extent not delivered to the Lender pursuant to
Section 2, will be kept at the location specified in Section 3(a) of
this Agreement, and the Company will not remove the Pledged Collateral
from such location without providing at lease 30 days' prior written
notice to the Lender.
(h) The Lender, or its representative, shall at all times have
full and free access during normal business hours to all of the books,
correspondence and records of the Company relating to the Pledged
Collateral (other than information that is privileged and confidential);
the Lender and its representatives may examine the same, make abstracts
therefrom and make photocopies thereof; and the Company agrees to render
to the Lender, at the Company's cost and expense, such clerical and
other assistance as may be reasonably requested by the Lender with
regard thereto.
(i) The Company shall not permit TCR Holding to issue to the
Company any securities of the type required to be pledged hereunder
unless such securities are promptly pledged and delivered hereunder to
the Lender or its designated agent in accordance with Section 2(a).
(j) If, while this Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the
capital structure, including the creation of any subscription or other
rights relating to the Pledged Collateral, is declared or made, or
proposed to be declared or made, by TCR Holding, all substituted and
additional securities or interest issued with respect to the Pledged
Collateral and evidenced by certificates shall be endorsed in blank by
the Company promptly upon receipt thereof or otherwise appropriately
transferred to the Lender in negotiable form, and all certificates or
instruments evidencing such securities shall be delivered to the Lender
to be held under the terms of this Agreement in the same manner as, and
as a part of, the Pledged Collateral. All Pledged Collateral shall be
evidenced by one or more certificates. Any securities that may be issued
upon exercise of any subscription or other rights relating to the
Pledged Collateral shall be endorsed in blank and delivered to the
Lender with any necessary powers.
Section 5. Powers of the Secured Party.
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<PAGE> 9
(a) The Company hereby irrevocably designates and appoints the
Lender as its attorney-in-fact, with full power of substitution, for the
purposes of carrying out the provisions of this Agreement and taking any
action and executing any instrument, including, without limitation, any
financing statement or continuation statement, and taking any other
action to maintain the validity, perfection, priority and enforcement of
the security interest intended to be created hereunder, that the Lender
may reasonably deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled
with an interest.
(b) Without limiting the generality of Section 5(a) hereof, the
Company hereby irrevocably authorizes and empowers the Lender, upon the
occurrence and during the continuation of any Event of Default, at the
expense of the Company, either in the Lender's own name or in the name
of the Company, at any time and from time to time:
(i) to ask, demand, receive, issue a receipt for, give
acquittance for, settle and compromise any and all monies which
may be or become due or payable or remain unpaid at any time or
times to the Company, and any and all other property which may be
or become deliverable at any time or times to the Company, under
or with respect to the Pledged Collateral;
(ii) to endorse any drafts, checks, orders or other
instruments for the payment of money payable to the Company on
account of the Pledged Collateral (including any such draft,
check, order or instrument issued by any insurance company
payable jointly to the Company and the Lender); and
(iii) to settle, compromise, prosecute or defend any action,
claim or proceeding, or take any other action, all either in its
own name or in the name of the Company or otherwise, which the
Lender may deem to be necessary or advisable for purpose of
exercising and enforcing its powers and rights under this
Agreement or in the furtherance of the purposes hereof, including
any action which by the terms of this Agreement is to be taken by
the Company.
(c) Nothing in this Agreement shall be construed as requiring or
obligating the Lender to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by it, or to
present or file any claim or notice, or to take any other action with
respect to any of the Pledged Collateral or any part thereof or the
amounts due or to become due in respect thereof or any property covered
thereby, or to collect or enforce the payment of any amounts assigned to
it or to which it may otherwise be entitled hereunder at any time or
times other than to account for amounts or Pledged Collateral received.
(d) The Lender shall be entitled at any time to file this
Agreement, or a photographic or any other reproduction of this
Agreement, as a financing statement, but the failure of the Lender to do
so shall not impair the validity or enforceability of this Agreement.
The Lender shall have no duty to comply with any recording, filing or
other legal requirements necessary to establish or maintain the
validity, priority or enforceability of, or the Lender's rights in or
to, any of the Pledged Collateral.
8
<PAGE> 10
(e) In its discretion, the Lender may discharge taxes and other
encumbrances at any time levied or placed on any of the Pledged
Collateral, make repairs thereto and pay any necessary filing fees. The
Company agrees to reimburse the Lender on demand for any and all
reasonable expenditures so made with interest on unpaid amounts at the
maximum rate permitted by law. The Lender shall have no obligation to
the Company to make any such expenditures, nor shall the making thereof
relieve the Company of any default.
(f) Anything herein to the contrary notwithstanding, the Company
shall remain liable under each contract or agreement comprised in the
Pledged Collateral to be observed or performed by the Company
thereunder. The Lender shall not have any obligation or liability under
any such contract or agreement by reason of or arising out of this
Agreement or the receipt by the Lender of any payment relating to any of
the Pledged Collateral, nor shall the Lender be obligated in any manner
to perform any of the obligations of the Company under or pursuant to
any such contract or agreement, to make inquiry as to the nature or
sufficiency of any payment received by the Lender in respect of the
Pledged Collateral or as to the sufficiency of any performance by any
party under any such contract or agreement, to present or file any
claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to the Lender or to
which the Lender may be entitled at any time or times other than to
account for amounts or Pledged Collateral received, an no action taken
or omitted shall give rise to any defense, counterclaim or right of
action against the Lender, unless the Lender's actions are taken or
omitted to be taken with gross negligence or bad faith or constitute
willful misconduct. The Lender's sole duty with respect to the custody,
safe keeping and physical preservation of the Pledged Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to
deal with such Pledged Collateral in the same manner as the Lender deals
with similar property for its own account.
(g) If an Event of Default has occurred and is continuing, the
Lender may at any time at its option, transfer to itself or any nominee
any securities constituting the Pledged Collateral, receive any income
thereon and hold such income as additional Pledged Collateral or apply
it to the Indebtedness. Regardless of whether any Indebtedness is due,
the Lender may demand, sue for, collect, or make any settlement or
compromise which it deems desirable with respect to the Pledged
Collateral. Regardless of the adequacy of Pledged Collateral or any
other security for the Indebtedness, any deposits or other sums at any
time credited by or due from the Lender to the Company may at any time
be applied to or set off against any of the Indebtedness.
(h) If an Event of Default shall have occurred and be continuing,
the Company shall, at the request of the Lender, notify obligors on the
chattel paper and general intangibles of the Company and obligors on
instruments for which the Company is an obligee of the security interest
of the Lender in any chattel paper, general intangibles and instruments
and that payment thereof is to be made directly to the Lender or to any
financial institution designated by the Lender as the Lender's agent
therefore, and the Lender may itself, if an Event of Default shall have
occurred and be continuing, without notice to or demand upon the
Company, so notify said obligors. After the making of such a request or
the giving of any such notification, the Company shall hold any proceeds
of collection of chattel paper, general intangibles and instruments
received by the Company as trustee for the Lender without commingling
the same with other funds of the Company and shall turn the same over to
the Lender in the identical form received, together with any necessary
endorsements or assignments. The Lender shall apply the proceeds of
collection of
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<PAGE> 11
chattel paper, general intangibles and instruments received by the
Lender to the Indebtedness, such proceeds to be immediately entered
after final payment in cash of the items given rise to them.
Section 6. Voting Rights, Dividends, Etc.
(a) Until an Event of Default shall have occurred and be
continuing:
(i) except as otherwise provided in this Agreement, but
subject to the provisions of the TCR Holding Stockholders
Agreement, the Company shall be entitled to exercise any and all
voting or consensual rights and powers, including subscription
rights, in relation to the Pledged Collateral; provided, however,
that no vote shall be cast or consent, waiver or ratification
given or action taken which would materially impair the Pledged
Collateral or the value thereof or violate any provision of this
Agreement, the Indenture or any other ancillary document;
(ii) except as otherwise provided in this Agreement, the
Company shall be entitled to receive and retain any and all
dividends, distributions or other payments in respect of the
Pledged Collateral and the Lender, upon receipt of any of the
foregoing, shall promptly pay or distribute the same to the
Company, and, to the extent so permitted, any distributions
received by the Company and transferred to other persons shall
pass free and clear of the lien and security interest hereof; and
(iii) the Lender shall execute and deliver to the Company or
cause to be executed and delivered to the Company, all such
proxies, powers of attorney, dividend orders and other
instruments as the Company may reasonably request for the purpose
of enabling it to exercise the voting or consensual rights and
powers which the Company is entitled to exercise pursuant to the
foregoing Section 6(a)(i) or to receive the dividends,
distributions or other payments which the Company is authorized
to retain pursuant to the foregoing Section 6(a)(ii).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of the Company to exercise the voting or consensual
rights and powers which the Company would otherwise be entitled to
exercise pursuant to Section 6(a)(i) and to receive the dividends,
distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested
in the Lender, which shall then have the sole and exclusive right and
authority to exercise, in its sole discretion, all such voting and
consensual rights and powers and to receive and retain as Pledged
Collateral all such dividends, distributions and other payments. Without
limiting the foregoing, in such event the Lender may exercise all voting
and corporate rights at any meeting of any corporation issuing any such
securities and any and all rights of conversion, exchange, subscription
or any other rights, privileges or options pertaining to any such
securities as if it were the absolute owner thereof, including, without
limitation, the rights to exchange at its discretion, any and all such
securities upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any corporation issuing any
such securities or upon the exercise by any such issuer or the Lender of
any right, privilege or option pertaining to any such securities, and,
in connection therewith, to deposit and deliver any and all securities
with any committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it my determine, all
10
<PAGE> 12
without liability except to account for the property actually received
by it, but the Lender shall have no duty to exercise any of the
aforesaid rights, privileges or options and the Lender shall not be
responsible for any failure to do so or delay in so doing.
Section 7. Default.
(a) It shall constitute a Default or an Event of Default under
this Agreement if a "Default" or an "Event of Default" shall occur under
the Indenture.
(b) If an Event of Default shall have occurred and is continuing,
in addition to any other rights and remedies that may be available to
the Lender under the UCC or the TARC Intercompany Loan Agreement or
under Section 5(a) or 5(b) of this Agreement or otherwise under this
Agreement or at law, the Lender shall also have the following rights and
powers:
(i) The Lender may, without being required to give any notice
except as hereinafter provided, sell the Pledged Collateral, or
any part thereof, at public or private sale, for cash, upon
credit or for future delivery and at such price or prices as the
Lender deem satisfactory, and the Lender and/or its collateral
agent may be the purchaser of any or all of the Pledged
Collateral so sold and thereafter hold the same absolutely free
from any right or claim of whatsoever kind by or on behalf of the
Company, and the Indebtedness or any portion of the Indebtedness
may be applied as a credit against the purchase price.
(ii) Upon any such sale, the Lender shall have the right to
deliver, assign and transfer to the purchaser thereof the Pledged
Collateral so sold. Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or rights of
whatsoever kind by or on behalf of the Company, including any
equity or rights of redemption of the Company, and the Company
hereby specifically waives, to the full extent permitted by
applicable law, all rights of redemption, stay or appraisal which
it has or may have under any rule or law or statute now existing
or hereafter adopted.
(iii) The Lender shall give the Company ten (10) Business
Days' written notice (which the Company agrees is reasonable
notification within the meaning of Section 9-504 of the UCC) of
its intention to make any such public or private sale. Such
notice, in case of public sale, shall state the time and place
fixed for such sale and, in case of a private sale, shall state
the date after which such sale is to be made.
(iv) Any such public sale shall be held at such time or times
within ordinary business hours and at such places as the Lender
may fix in the notices of such sale. At any such sale the Pledged
Collateral may be sold in one lot as an entirety or in separate
parcels, as the Lender may, in its sole discretion, determine.
(v) The Lender shall not be obligated to make any sale of the
Pledged Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of the Pledged Collateral may
have been given. The Lender may, without notice or publication,
adjourn any public or private sale or cause the same to be
adjourned from time to time by
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<PAGE> 13
announcement at the time and place fixed for the sale, and such
sale may, without further notice, be made at any time or place to
which the same shall be so adjourned.
(vi) In case of any sale of all or any part of the Pledged
Collateral on credit or for future delivery, the Pledged
Collateral so sold may be retained by the Lender until the
selling price is paid by the purchaser thereof, but the Lender
shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Pledged Collateral so sold
and, in case of any such failure, such Pledged Collateral may
again be sold upon like notice.
(vii) The Lender, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law
or in equity to exercise its remedies regarding the Pledged
Collateral and sell the Pledged Collateral, or any portion
thereof, under a judgment or decree of a court or courts of
competent jurisdiction.
(viii) The Company agrees that if any Event of Default shall
have occurred and be continuing, then the Lender shall have the
right to take possession of the Pledged Collateral, and for that
purpose the Lender may, so far as the Company can give authority
therefor, enter upon any premises on which the Pledged Collateral
may be situated and remove the same therefrom with or without
notice or process of law. The Company waives any and all rights
that it may have to a judicial hearing in advance of the
enforcement of any of the Lender's rights hereunder, including,
without limitation, its right following an Event of Default to
take immediate possession of the Pledged Collateral and to
exercise its rights with respect thereto. To the extent that any
of the Obligations are to be paid or performed by a person other
than the Company, the Company waives and agrees not to assert any
rights or privileges which it may have under Section 9-112 of the
UCC.
(ix) If under mandatory requirements of applicable law, the
Lender shall be required to make disposition of the Pledged
Collateral within a period of time that does not permit the
giving of notice to the Company as hereinbefore provided, the
Lender need give the Company only such notice of disposition as
shall be reasonably practicable in view of such mandatory
requirements of law.
(x) The Lender may instruct the obligor or obligors on any
agreement, instrument or other obligation constituting the
Pledged Collateral to make any payment or render any performance
required by the terms of such agreement, instrument or obligation
directly to the Lender or its designee.
(c) The Lender shall incur no liability as a result of the sale
of the Pledged Collateral, or any part thereof, at any private sale
other than for its own gross negligence or willful misconduct. The
Company hereby waives, to the maximum extent permitted by applicable
law, any claims against the Lender arising by reason of the fact that
the price at which the Pledged Collateral may have been sold at such
private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Indebtedness,
even if the Lender accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.
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<PAGE> 14
(d) The Lender shall not be obligated to pursue or exhaust its
rights and remedies against any particular Pledged Collateral or other
security for the Indebtedness before pursuing or enforcing its rights
and remedies against any other Pledged Collateral or other security for
the Indebtedness.
(e) To the extent permitted by law, the Company hereby waives (i)
any rights to require the Lender to proceed first against any other
Person, to exhaust its rights in the Pledged Collateral or other
security for the Indebtedness or to pursue any other right that the
Lender might have, (ii) with respect to the TARC Intercompany Note,
presentment and demand for payment, protest, notice of protest and
nonpayment, notice of dishonor, notice of the intention to accelerate
and notice of acceleration (except as otherwise set forth in the TARC
Intercompany Loan Agreement), and (iii) all rights of marshaling in
respect of any and all of the Pledged Collateral.
(f) Without precluding any other methods of sale, the Company
acknowledges that the sale of the Pledged Collateral shall have been
made in a commercially reasonable manner if conducted in conformity with
reasonable commercial practices of banks disposing of similar property.
The Lender shall not be liable for any depreciation in the value of the
Pledged Collateral.
(g) The Company agrees that its obligation to deliver the Pledged
Collateral is of the essence of this Agreement and that accordingly,
upon application to a court of equity having jurisdiction, the Lender
shall be entitled to a decree requiring specific performance by the
Company of such obligation.
(h) Remedies of the Lender are cumulative and the exercise of any
one or more of the remedies provided herein shall not be construed as a
waiver of any of the other remedies of the Lender.
(i) If an Event of Default shall have occurred and be continuing,
the proceeds of any sale of or other realization upon all or any part of
the Pledged Collateral and any other amounts held by the Lender under
this Agreement shall be applied by the Lender as provided in the
Indenture.
Any amounts remaining after such applications and the payment in full of
the TARC Intercompany Note with respect to the Indebtedness shall be remitted to
the Company, its successors or assigns, or as a court of competent jurisdiction
may otherwise direct.
Section 8. Regarding Sales of Pledged Collateral.
(a) The Company recognizes that the Lender may be unable, or find
it undesirable, to effect a public sale of any or all the Pledged
Collateral by reason of certain prohibitions contained in the Securities
Act of 1933, as amended (the "Securities Act"), and applicable state
securities laws or otherwise, but may be compelled or desire to resort
to one or more private sales thereof to a restricted group of purchasers
who will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to
the distribution or resale thereof in violation of the Securities Act.
The Company acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if
such
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<PAGE> 15
sale were a public sale, but, notwithstanding such circumstances, such
private sale shall be deemed to have been made in a commercially
reasonable manner. The Lender shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time necessary
to permit the issuing corporation of such securities to register such
securities for public sale under the Securities Act, or under applicable
state securities laws, even if the issuing corporation would agree to do
so.
(b) The Company further agrees to use commercially reasonable
efforts to do or cause to be done all such other acts and things as may
be necessary to make such sale or sales of any portion or all of the
Pledged Collateral valid and binding and in compliance with any and all
applicable laws, regulations, order, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any
such sale or sales, all at the Company's expense. The Company further
agrees that a breach of any of the covenants contained in this Section 8
will cause irreparable injury to the Lender, that the Lender has no
adequate remedy at law in respect of such breach and, as a consequence,
agrees that each and every covenant contained in this Section 8 shall be
specifically enforceable against the Company, and the Company hereby
waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no
Event of Default has occurred under the Indenture.
Section 9. General Provisions.
(a) Continuing Security Interest: Binding Effect. This Agreement
shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect until termination of the
obligations of the Company under the TARC Intercompany Loan Agreement
and the indefeasible payment in full thereafter of the Obligations; (b)
be binding upon the Company and its successors and assigns; and (c)
inure to the benefit of the Lender and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c),
the Lender may assign or otherwise transfer any of its rights under this
Agreement to any other Person, and such Person shall thereupon become
vested with all the benefits in respect thereof granted herein or
otherwise to the Lender. Upon the termination of the obligations of the
Lender under the Indenture and the indefeasible payment in full
thereafter of the Obligations, the Company shall be entitled to the
return, upon its request and at its expense, of such of the Pledged
Collateral as in the Lender's possession and as shall not have been sold
or otherwise disposed of pursuant to the terms hereof.
(b) Security Interest Absolute. The lien and security interest
created hereunder and the Company's obligations hereunder and the
Lender's rights hereunder shall not be release, diminished, impaired or
adversely affected by the occurrence of any one or more of the following
events:
(i) The taking or accepting of any other security or
assurance for any or all of the Indebtedness;
(ii) Any release, surrender, exchange, subordination or loss
of any security or assurance at any time existing in connection
with any or all of the Indebtedness;
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<PAGE> 16
(iii) The modification of, amendment to, or waiver of
compliance with any terms of the TARC Intercompany Loan Agreement
or the TARC Intercompany Note;
(iv) Any renewal, extension and/or rearrangement of the
payment of any or all of the Indebtedness or any statement,
indulgence, forbearance or compromise that may be granted or
given by the Lender to the company or any other Person;
(v) any negligent, delay, omission, failure or refusal of the
Lender to make or prosecute any action in connection with any
agreement, document or other instrument evidencing, security or
assuring the payment of any of all of the Indebtedness;
(vi) the illegality, invalidity or unenforceability of all or
any part of the TARC Intercompany Loan Agreement or the TARC
Intercompany Note; or
(vii) any other circumstance (other than payment in full of
the Obligations) that might otherwise constitute a defense
available to, or a discharge of, the Company or any party to any
document in respect of the Obligations.
(c) Amendments. This Agreement or any term hereof may be amended
or changed only by an instrument in writing executed jointly by the
Company and the Lender and in accordance with Article IX of the
Indenture.
(d) Remedies Cumulative. Each right, power and remedy herein
specifically granted to the Lender or otherwise available to it or now
or hereafter existing in law or in equity shall be cumulative and
concurrent, and shall be in addition to every other right, power and
remedy herein specifically given or now or hereafter existing at law, in
equity, or otherwise (including, without limitation, all rights, powers
and remedies granted to a secured party under the UCC), and each such
right, power and remedy, whether specifically granted herein or
otherwise existing, may be exercised at any time and from time to time
as often and in such order as may be deemed expedient by the Lender in
its sole and complete discretion. The provisions of this Agreement may
only be waived by an instrument in writing signed by the Lender, and no
failure on the part of the Lender to exercise, and no delay in
exercising, and no course of dealing with respect to, any such right,
power or remedy, shall operate as a wavier thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right. No
notice to or demand on the Company hereunder shall, of itself, entitle
the Company to any other or further notice or demand in the same or
similar circumstances.
(e) Assignment. Neither this Agreement nor any interest herein or
in the Pledged Collateral, or any part thereof, may be assigned by the
Company without the prior written consent of the Lender, except as
expressly permitted herein or in the TARC Intercompany Loan Agreement.
The Company hereby acknowledges and consents to the Pledged Collateral
assignment by the Lender of this agreement and the Lender's interest in
the Pledged Collateral to the Indenture Trustee, as defined in the TARC
Intercompany Loan Agreement. The Company also agrees that, in the case
of an Event of Default, the Indenture Trustee may exercise any rights
and remedies of the Lender under this agreement, and any reference to
the "Lender" hereunder shall also include the Indenture Trustee.
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<PAGE> 17
(f) Headings. The descriptive headings of the several sections of
this agreement are inserted for convenience only an shall not control or
affect the meaning or construction of any of the provisions hereof.
(g) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity of enforceability or such provision in any other
jurisdiction.
(h) Survival. All representations and warranties contained
herein, in the Indenture or made in writing by the Company in connection
herewith or therewith, shall survive the execution and delivery of this
Agreement, the Indenture and any documents executed in connection
herewith or therewith.
(i) Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of
which when so executed and delivered shall be deemed o be an original,
but all of which when taken together shall constitute one and the same
instrument. A complete set of counterparts shall be lodged with the
Lender.
(j) Waiver. To the extend permitted by applicable law the Company
hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to any of the Indenture obligations and this
Agreement and any requirement that the Lender protect, secure, perfect
or insure any security interest or any property subject thereto or
exhaust any right or take any action against the Company or any other
person or entity; provided however, that the Lender shall in any event
take such care in the handling of any Pledged Collateral in its
possession as it takes with respect to is own property of a similar
nature in its possession.
(k) Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given
if made by hand delivery, by telex, by facsimile or registered or
certified mail, postage prepaid, return receipt requested, addressed as
provided in Section 9.3 of the TARC Intercompany Loan Agreement. Any
party hereto may by notice to the other party designate such additional
or different addresses as shall be furnished in writing to such party.
Any notice or communication to any party shall be deemed to have been
given or made as of the date so delivered, if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; and
five (5) calendar days after mailing, if sent by registered or certified
mail (except that a notice of change of address shall not be deemed to
have been given until actually received by the addressee).
(l) Conflicting Terms. In the event of any conflict or
inconsistency between the terms, covenants, conditions and provisions
set forth in this Agreement and the terms, covenants, conditions and
provisions set forth in the Indenture, the terms, covenants, conditions
and provisions of the Indenture shall prevail.
(m) Release. The Pledged Collateral, in whole or in part, may be
released in accordance with the TARC Intercompany Loan Agreement and the
Indenture.
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<PAGE> 18
(n) Conflicts. If any provision of the TARC Intercompany Loan
Agreement limits, qualifies, or conflicts with any similar provision of
this Agreement, such provision of the TARC Intercompany Loan Agreement
shall control.
(o) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE 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). THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION
THAT 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. THE COMPANY IRREVOCABLY CONSENTS, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AT ITS SAID ADDRESS,
SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE LENDER TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER JURISDICTION.
17
<PAGE> 19
IN WITNESS WHEREOF, the Company and the Lender have executed this
Agreement as of the date first above written.
TRANSAMERICAN REFINING CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
TRANSAMERICAN ENERGY CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
By: ____________________________________
Name: __________________________________
Title: _________________________________
18
<PAGE> 20
EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, Vice President of TransAmerican Refining Corporation, a
Texas corporation (the "Company"), hereby certify with reference to the Security
and Pledge Agreement dated as of December ___, 1998 between the Company and
TransAmerican Energy Corporation, as Lender (terms defined therein being used
herein as therein defined), to the Lender as follows:
Section 1. Names.
(a) The exact corporate name of the Company, as it appears in
its certificate of incorporation is as follows:
TransAmerican Refining Corporation
(b) Set forth below is each other corporate name the Company
has had since its organization, together with the date of
the relevant change:
n/a
(c) The Company has not changed its identity or corporate
structure in any way within the past five years except:
n/a
(d) The following is a list of other names (including trade
names or similar appellations) used by the Company or any
of its divisions or other business units at any time
during the past five years.
n/a
Section 2. Current Locations.
(a) The chief executive office of the Company is located at
the following address:
Mailing Address County State
--------------- ------ -----
1300 N. Sam Houston Parkway East Harris Texas
Houston, 77032
-1-
<PAGE> 21
(b) The following are all of the places of business of the
Company not identified above:
Mailing Address County State
--------------- ------ -----
14902 River Road St. Charles Louisiana
New Sarpy, 70078
Section 3. Prior Locations. Set forth below is the information
required by subparagraphs (a) and (b) of Section 2 with
respect to each location or place of business maintained
by the Company at any time during the past five years:
n/a
Section 4. UCC Filings. A duly signed financing statement on Form
UCC-1 in substantially the form of Schedule 4 hereto has
been duly field in the UCC filing office in each
jurisdiction identified in Section 2 hereof. The Company
will deliver a true copy of each such filing duly
acknowledged by he filing officer as soon as practicable
after the date hereof.
Section 5. Schedule of Filings. Attached hereto as Schedule 5 is a
schedule setting forth filing information with respect to
the filings described in Section 4 above.
Section 6. Filing Fees. All filing fees and taxes payable in
connection with the filings described in Section 4 above
have been paid.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands this
____ day of December, 1998, in the respective capacities, indicated below their
signatures.
________________________________________
Name: __________________________________
Title: _________________________________
-2-
<PAGE> 22
SCHEDULE 2(a)
PLEDGED COLLATERAL
<TABLE>
<CAPTION>
====================================================================================================
Percentage of
Stock Outstanding
Certificate Number of Shares of
Issuer Class of Stock No.(s) Par Value Shares Class
====================================================================================================
<S> <C> <C> <C> <C> <C>
TCR Holding Class A 100%
Corporation Participating
Preferred Stock,
Series A
- ----------------------------------------------------------------------------------------------------
TCR Holding Class A 100%
Corporation Participating
Preferred Stock,
Series B
====================================================================================================
</TABLE>
-1-
<PAGE> 23
SCHEDULE 4
DESCRIPTION OF PLEDGED COLLATERAL
All of the Debtor's right, title and interest in, to and under any and all of
the following described property, assets and rights, in each case, wherever
located, whether now owned or hereafter acquired or arising, all accessions and
additions thereto, all substitutions and replacements therefor, and all proceeds
and products thereof and assigns all rights in and to all collateral securing
the following described property, assets and rights:
(a) all of the issued and outstanding shares of (i) the
Class A Participating Preferred Stock, Series A, and (ii) the
Class A Participating Preferred Stock, Series B, each of TCR
Holding Corporation, a Delaware corporation, owned by the Debtor,
which shares are identified on Schedule 2(a);
(b) all other shares of (i) the Class A Participating
Preferred Stock, Series A, and (ii) the Class A Participating
Preferred Stock, Series B, each of TCR Holding Corporation, a
Delaware corporation, now or hereafter acquired by the Debtor,
and the certificates representing such securities, and any
present or future options, warrants or other rights to subscribe
for or purchase any shares of (i) the Class A Participating
Preferred Stock, Series A, and/or (ii) the Class A Participating
Preferred Stock, Series B, each of TCR Holding Corporation, a
Delaware corporation, or any notes, bonds, debentures or other
evidences of indebtedness now or hereafter owned or acquired by
the Debtor in any manner that are at any time convertible,
exchangeable or exercisable into shares of (i) the Class A
Participating Preferred Stock, Series A, and/or (ii) the Class A
Participating Preferred Stock, Series B, each of TCR Holding
Corporation, a Delaware corporation; and
(iii) all proceeds and products of the foregoing and
distributions thereof or with respect thereto, including without
limitation dividends, distributions, cash, instruments and other
property or securities, now or hereafter at any time or from time
to time received or receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the
foregoing.
-1-
<PAGE> 24
SCHEDULE 5
SCHEDULE OF FILINGS
<TABLE>
<CAPTION>
Debtor Filing Officer File Number Date(1)
- ------ -------------- ----------- -------
<S> <C> <C> <C>
TransAmerican N/A ___________________________ 11/ /98
Refining Corporation (St. Charles Parish, L.A.)
TransAmerican N/A ___________________________ 11/ /98
Refining Corporation (Texas, Secretary of State)
</TABLE>
- ------------------
(1) Indicate lapse date, if other than fifth anniversary.
-1-
<PAGE> 1
EXHIBIT 99.12
TCR HOLDING CORPORATION,
A DELAWARE CORPORATION
SECURITY AND PLEDGE AGREEMENT
BY
TCR HOLDING CORPORATION,
A DELAWARE CORPORATION
IN FAVOR OF
TRANSAMERICAN ENERGY CORPORATION,
A DELAWARE CORPORATION
DATED AS OF DECEMBER ___, 1998
<PAGE> 2
TCR HOLDING CORPORATION
(A DELAWARE CORPORATION)
SECURITY AND PLEDGE AGREEMENT
This Security and Pledge Agreement (this "Agreement") is made and
entered into as of December ___, 1998, by TCR Holding Corporation, a Delaware
corporation (the "Company"), in favor of TransAmerican Energy Corporation, a
Delaware corporation (the "Lender").
RECITALS
WHEREAS, TransAmerican Refining Corporation, a Texas corporation
("TARC") has executed and delivered to the Lender its Promissory Note dated
October 1, 1998, payable to the order of the Lender in the stated principal
amount of $50,000,000 (the "TARC Working Capital Note"), to evidence advances
made from time to time by the Lender to TARC as provided in the TARC Working
Capital Note; and
WHEREAS, the outstanding principal balance of the TARC Working Capital
Note on the date hereof is $_________________________, and accrued but unpaid
interest on the TARC Working Capital Note on the date hereof is
$_________________________; and
WHEREAS, as part of the consideration for the transfer of certain assets
of TARC by TARC to the Company, and pursuant to an Assignment and Assumption
Agreement (TARC Working Capital Note) of even date herewith, TARC assigned all
of its rights, titles, and interests in the TARC Working Capital Note to the
Company, and the Company assumed the payment and performance of all of the
indebtedness and obligations of the "Maker" under the TARC Working Capital Note
(the "Assignment and Assumption"); and
WHEREAS, in order to induce the Lender to consent to the Assignment and
Assumption and to secure the payment and performance in full of the obligations
of the Company under the TARC Working Capital Note by reason of the Assignment
and Assumption, the parties hereto desire to set forth their mutual
understanding and certain agreements regarding the terms and conditions of the
grant of a security interest in the Pledged Collateral (as defined below);
NOW, THEREFORE, in consideration of, and for the purposes set forth in,
the premises and for the good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Lender hereby
agree as follows:
Section 1. Definitions.
(a) As used in this Agreement, capitalized terms not otherwise
defined herein have the meanings set forth in the TARC Working Capital
Note or, if not defined therein, the meanings set forth in the TEC
Indenture (hereinafter defined), and the following terms shall have the
respective meanings set forth below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Default" and "Event of Default" shall have the meanings assigned
to those terms in Section 7(a) of this Agreement.
<PAGE> 3
"GAAP" means generally accepted accounting principles of the
United States of America, consistently applied.
"Indebtedness" means the following indebtedness and liabilities
of the Company (and any extensions, renewals, refunding, increases,
substitutions, replacements, consolidations, modifications or
rearrangements of such indebtedness and liabilities, regardless of
whether the Company executes any extension agreement or renewal
instrument):
(i) all amounts advanced or expended by the Lender under
the TARC Working Capital Note and/or under or in connection with
this Agreement, all reasonable costs and out-of-pocket expenses
(excluding expenses representing administrative overhead) at any
time and from time to time incurred by the Lender in connection
with the administration and/or enforcement of this Agreement
(including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel employed by the Lender in
connection therewith), and all indemnities at any time and from
time to time payable hereunder to the Lender, and
(ii) all principal, premium and accrued interest owing on the
TARC Working Capital Note, and
(iii) all other amounts payable by the Company under the TARC
Working Capital Note.
"Obligations" shall have the meaning assigned to that term in
Section 2 of this Agreement.
"Offering Circular" means the offering circular dated December
___, 1998, pursuant to which $150,000,000 in aggregate principal amount
of the 15% Senior Secured Notes due 2003 of TransAmerican Refining
Corporation, a Texas corporation, were issued.
"Pledged Collateral" shall have the meaning assigned to that term
in Section 2 of this Agreement.
"Perfection Certificate" means the certificate delivered to the
Lenders substantially in the form of EXHIBIT A hereto.
"TEC Indenture" means the Indenture dated as of June 13, 1997
between TEC and the TEC Indenture Trustee, pursuant to which TEC's 11.5% Senior
Secured Notes due 2002 and 13% Senior Secured Discount Notes due 2002 were
issued, as supplemented by First Supplemental Indenture dated as of December 30,
1997, by Second Supplemental Indenture dated as of November 13, 1998, and by
Third Supplemental Indenture dated as of December ___, 1998.
"TEC Indenture Trustee" means Firstar Bank of Minnesota, N.A., as
Trustee under the TEC Indenture, and its successors and assigns in such
capacity.
"TransContinental" means TransContinental Refining Corporation, a
Delaware corporation.
2
<PAGE> 4
"TransContinental Common Stock" means the common stock, par value
$.01 per share, of TransContinental.
"TransContinental Preferred Stock" shall have the meaning
assigned to that term in the Offering Circular.
"TransContinental Stockholders Agreement" means the Stockholders
Agreement (TransContinental) dated as of December ___, 1998, among
TransContinental, the Company, and the holders of the TransContinental
Preferred Stock..
"UCC" means the Uniform Commercial Code as in effect in the State
of New York.
(b) All terms used in this Agreement which are defined in the
UCC, other than those which are defined in the TEC Indenture or
specifically defined in Section 1(a) above, shall have the same meaning
herein as in the UCC.
Section 2. Grant of Security Interest.
(a) The Company hereby pledges to the Lender, and grants to the
Lender a security interest in all of the Company's right, title and
interest in, to and under any and all of the following described
property, rights and interests, in each case, wherever located, whether
now owned or hereafter acquired or arising, all accessions and additions
thereto, all substitutions and replacements therefor, and all proceeds
and products thereof (collectively, the "Pledged Collateral"):
(i) all of the issued and outstanding shares of the
TransContinental Common Stock identified on Schedule 2(a)
attached hereto; and
(ii) all proceeds and products of the foregoing and
distributions thereof or with respect thereto, including without
limitation dividends, distributions, cash, instruments and other
property or securities, now or hereafter at any time or from time
to time received or receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the
foregoing.
(b) The inclusion of proceeds in this Agreement does not
authorize the Company to sell, dispose of or otherwise use the Pledged
Collateral in any manner not specifically authorized hereby or under the
TEC Indenture.
(c) This Agreement secures the prompt and complete (i) payment of
all obligations of the Company to the Lender under the TARC Working
Capital Note, whether such obligations are now existing or hereafter
arising, and all renewals, extensions, amendments, supplements and
rearrangements thereof and (ii) payment and performance and all
representations, covenants and conditions by the Company contained or
incorporated herein, in each case whether for principal, interest,
prepayment premium, taxes, costs, losses, compensation, reimbursements,
fees, expenses or any other amount payable to the Lender under the terms
of this Agreement (all such obligations, covenants and conditions
described in the foregoing clauses (i) and (ii) being hereinafter
collectively referred to as the "Obligations").
3
<PAGE> 5
Section 3. Representations and Warranties. The Company represents and
warrants, as of the date hereof, to the Lender as follows:
(a) The chief executive office and principal place of business of
the Company is located at 1300 N. Sam Houston Parkway East, Suite 320,
Houston, Harris County, Texas 77032. Any and all Pledged Collateral not
delivered to the Lender or its designated agent is and will continue to
be located only in the States of Texas and Louisiana.
(b) The Company is the legal and beneficial owner of all of the
Pledged Collateral free and clear of any lien, security interest, charge
or encumbrance of any kind or nature, except for the lien and security
interest created hereby and for Permitted Liens, and has not made any
other pledge, assignment, mortgage, hypothecation or transfer of the
Pledged Collateral except as permitted hereunder. Except for the lien
and security interest created hereby, all of the Pledged Collateral is
free from any material credit, deduction, allowance, defense, dispute,
setoff or counterclaim, and there is no material extension or indulgence
with respect thereto. The Pledged Collateral is not subject to any put,
call, option or other right in favor of any other person whatsoever.
(c) The Pledged Collateral is accurately described in Schedule
2(a) hereto.
(d) This Agreement has been duly executed and delivered by the
Company and creates a valid security interest in, and lien on, the
Pledged Collateral securing the payment of the Obligations. Upon the
physical delivery of the certificates evidencing the Pledged Collateral
to the Lender or its designated agent and the making of the filing of a
financing statement in the Office of the Secretary of State of Texas and
the taking of all other actions necessary to perfect the security
interests created hereby, including, without limitation, those actions
specified in Section 2(a) and Section 4, the security interests created
by this Agreement will be duly perfected security interests subject to
no equal or prior lien, security interest or encumbrance of any kind or
nature other than Permitted Liens.
(e) The Company has the requisite corporate power and authority
to pledge the Pledged Collateral in the manner hereby done or
contemplated and to defend its title thereto against the lawful claims
of all persons whomsoever.
(f) Neither the execution and delivery of this Agreement by the
Company, the performance by the Company of its obligations hereunder,
nor the transactions herein contemplated will (i) violate the Company's
charter or bylaws, (ii) violate the terms of any agreement, indenture,
mortgage, deed of trust, equipment lease, instrument or other document
to which the Company is a party, (iii) violate any law, order, rule or
regulation applicable to the Company of any court or any government,
regulatory body or administrative agency or other governmental body
having jurisdiction over the Company or its properties, or (iv) result
in or require the creation or imposition of any lien (other than the
lien contemplated hereby), upon or with respect to any of the property
now owned or hereafter acquired by the Company, which violation or
conflict would have a material adverse effect on the financial
condition, business, assets or liabilities of the Company or on the
value of the Pledged Collateral or a material adverse effect on the
security interests hereunder.
4
<PAGE> 6
(g) The Pledged Collateral includes all of the issued and
outstanding shares of TransContinental Common Stock owned by the Company
on the date hereof, which shares are described in Schedule 2(a) attached
hereto.
(h) No consent or approval which has not been obtained on or
prior to the date hereof of any other person or entity and no
authorization, approval or other action (other than delivery of physical
certificates evidencing the Pledged Collateral) by, and no notice to or
filing with any governmental body (other than UCC filings), regulatory
authority or securities exchange, was or is necessary as a condition to
the validity of the pledge hereunder of the Pledged Collateral, and such
pledge is effective to vest in the Lender the rights of the Lender in
the Pledged Collateral as set forth herein. Except for the limitations
and restrictions imposed by the TransContinental Stockholders Agreement,
there are no restrictions on the transferability of any of the Pledged
Collateral transferred or delivered by the Company hereunder or, except
for the limitations and restrictions imposed by the TCR Holding
Stockholders Agreement and restrictions related to federal and state
securities laws governing the sale of "restricted stock" or "control
stock," with respect to the foreclosure, transfer or disposition thereof
by the Lender.
Section 4. Covenants. During the term of this Agreement and until all of
the Obligations with respect to the Indebtedness have been fully and finally
paid and discharged in full, the Company covenants and agreed with the Lender
that:
(a) Except in the ordinary course of business, the Company will
not make any compromise or settlement with respect to the Pledged
Collateral without notice to or consent of the Lender.
(b) The Company shall deliver to the Lender or its designated
agent concurrently with the execution of this Agreement or, to the
extent acquired subsequent to the date of execution hereof, immediately
upon the Company's acquisition thereof: (i) all certificates and
instruments representing the Pledged Collateral and a revised Schedule
2(a), and (ii) all certificates, instruments and notes representing any
proceeds of the Pledged Collateral. Any and all Pledged Collateral
delivered to the Lender or its designated agent in the form of
certificates, securities, instruments, or documents shall be accompanied
by undated duly executed powers in blank and by such other instruments
of transfer or documents as the Lender may reasonably request. The
Lender may hold the certificates representing the Pledged Collateral
delivered to it in its own name or in the name of its nominee, all in
form and substance satisfactory to the Lender.
(c) From time to time, the Company shall, at its own expense,
promptly give, execute, deliver, file and/or otherwise formalize any
such notice, statement, instrument, document, agreement or other papers,
and do all such other acts and things, as may be necessary or desirable,
or and as the Lender may reasonably request, in order to create,
evidence, preserve, perfect, validate or continue any lien or security
interest created pursuant to this Agreement or to enable the Lender to
exercise or enforce its rights hereunder with respect to such lien or
security interest, or otherwise further to effect the purposes of this
Agreement. Without limiting the generality of the foregoing, the Company
shall, at any time or from time to time upon the request of the Lender
and at the Company's own expense, execute, acknowledge, witness,
deliver, file and/or record such financing and continuation statements,
notices, additional assignments and other documents or instruments (all
of which shall be in form and substance reasonably satisfactory to the
Lender
5
<PAGE> 7
and its counsel) as the Lender may from time to time reasonably request
for the perfection of the liens and security interests created hereby.
(d) The Company shall promptly notify the Lender (i) of any
material changes in any fact or circumstance represented or warranted by
the Company with respect to any material portion of the Pledged
Collateral, (ii) of any material impairment of the Pledged Collateral
and (iii) of any claim, action or proceeding affecting title to all or
any material portion of the Pledged Collateral.
(e) Except for the liens and security interests created by this
Agreement and the Permitted Liens in the Pledged Collateral, the Company
shall at its own expense defend the Pledged Collateral against any and
all liens, claims, security interests and other encumbrances or
interest, howsoever arising and shall maintain and preserve the security
interest granted hereunder with respect to the Pledged Collateral as
long as this Agreement shall remain in full force and effect. The
Company shall not make any other pledge, assignment, mortgage,
hypothecation or transfer of the Pledged Collateral except as permitted
hereunder.
(f) The Company shall at all times keep accurate and complete
records with respect to the Pledged Collateral, including, without
limitation, records of all payments made, credit granted and proceeds
received in connection therewith.
(g) The Company shall not relocate its principal place of
business or chief executive office to a county or state other than that
specified in Section 3(a) of this Agreement unless the Company gives 30
days' prior written notice to the Lender, which notice shall specify the
county and state into which such relocation is to be made. The Pledged
Collateral, to the extent not delivered to the Lender pursuant to
Section 2, will be kept at the location specified in Section 3(a) of
this Agreement, and the Company will not remove the Pledged Collateral
from such location without providing at lease 30 days' prior written
notice to the Lender.
(h) The Lender, or its representative, shall at all times have
full and free access during normal business hours to all of the books,
correspondence and records of the Company relating to the Pledged
Collateral (other than information that is privileged and confidential);
the Lender and its representatives may examine the same, make abstracts
therefrom and make photocopies thereof; and the Company agrees to render
to the Lender, at the Company's cost and expense, such clerical and
other assistance as may be reasonably requested by the Lender with
regard thereto.
(i) If, while this Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the
capital structure, including the creation of any subscription or other
rights relating to the Pledged Collateral, is declared or made, or
proposed to be declared or made, by TransContinental, all substituted
and additional securities or interest issued with respect to the Pledged
Collateral and evidenced by certificates shall be endorsed in blank by
the Company promptly upon receipt thereof or otherwise appropriately
transferred to the Lender in negotiable form, and all certificates or
instruments evidencing such securities shall be delivered to the Lender
to be held under the terms of this Agreement in the same manner as, and
as a part of, the Pledged Collateral. All Pledged Collateral shall be
evidenced by one or more certificates. Any securities that may be issued
upon exercise of any subscription or other rights relating to the
Pledged Collateral shall be endorsed in blank and delivered to the
Lender with any necessary powers.
6
<PAGE> 8
Section 5. Powers of the Secured Party.
(a) The Company hereby irrevocably designates and appoints the
Lender as its attorney-in-fact, with full power of substitution, for the
purposes of carrying out the provisions of this Agreement and taking any
action and executing any instrument, including, without limitation, any
financing statement or continuation statement, and taking any other
action to maintain the validity, perfection, priority and enforcement of
the security interest intended to be created hereunder, that the Lender
may reasonably deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled
with an interest.
(b) Without limiting the generality of Section 5(a) hereof, the
Company hereby irrevocably authorizes and empowers the Lender, upon the
occurrence and during the continuation of any Event of Default, at the
expense of the Company, either in the Lender's own name or in the name
of the Company, at any time and from time to time:
(i) to ask, demand, receive, issue a receipt for, give
acquittance for, settle and compromise any and all monies which
may be or become due or payable or remain unpaid at any time or
times to the Company, and any and all other property which may be
or become deliverable at any time or times to the Company, under
or with respect to the Pledged Collateral;
(ii) to endorse any drafts, checks, orders or other
instruments for the payment of money payable to the Company on
account of the Pledged Collateral (including any such draft,
check, order or instrument issued by any insurance company
payable jointly to the Company and the Lender); and
(iii) to settle, compromise, prosecute or defend any action,
claim or proceeding, or take any other action, all either in its
own name or in the name of the Company or otherwise, which the
Lender may deem to be necessary or advisable for purpose of
exercising and enforcing its powers and rights under this
Agreement or in the furtherance of the purposes hereof, including
any action which by the terms of this Agreement is to be taken by
the Company.
(c) Nothing in this Agreement shall be construed as requiring or
obligating the Lender to make any commitment or to make any inquiry as
to the nature or sufficiency of any payment received by it, or to
present or file any claim or notice, or to take any other action with
respect to any of the Pledged Collateral or any part thereof or the
amounts due or to become due in respect thereof or any property covered
thereby, or to collect or enforce the payment of any amounts assigned to
it or to which it may otherwise be entitled hereunder at any time or
times other than to account for amounts or Pledged Collateral received.
(d) The Lender shall be entitled at any time to file this
Agreement, or a photographic or any other reproduction of this
Agreement, as a financing statement, but the failure of the Lender to do
so shall not impair the validity or enforceability of this Agreement.
The Lender shall have no duty to comply with any recording, filing or
other legal requirements necessary to establish or maintain the
validity, priority or enforceability of, or the Lender's rights in or
to, any of the Pledged Collateral.
7
<PAGE> 9
(e) In its discretion, the Lender may discharge taxes and other
encumbrances at any time levied or placed on any of the Pledged
Collateral, make repairs thereto and pay any necessary filing fees. The
Company agrees to reimburse the Lender on demand for any and all
reasonable expenditures so made with interest on unpaid amounts at the
maximum rate permitted by law. The Lender shall have no obligation to
the Company to make any such expenditures, nor shall the making thereof
relieve the Company of any default.
(f) The Lender's sole duty with respect to the custody, safe
keeping and physical preservation of the Pledged Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to
deal with such Pledged Collateral in the same manner as the Lender deals
with similar property for its own account.
(g) If an Event of Default has occurred and is continuing, the
Lender may at any time at its option, transfer to itself or any nominee
any securities constituting the Pledged Collateral, receive any income
thereon and hold such income as additional Pledged Collateral or apply
it to the Indebtedness.
Section 6. Voting Rights, Dividends, Etc.
(a) Until an Event of Default shall have occurred and be
continuing:
(i) except as otherwise provided in this Agreement, but
subject to the provisions of the TransContinental Stockholders
Agreement, the Company shall be entitled to exercise any and all
voting or consensual rights and powers, including subscription
rights, in relation to the Pledged Collateral; provided, however,
that no vote shall be cast or consent, waiver or ratification
given or action taken which would materially impair the Pledged
Collateral or the value thereof or violate any provision of this
Agreement or any other ancillary document;
(ii) except as otherwise provided in this Agreement, the
Company shall be entitled to receive and retain any and all
dividends, distributions or other payments in respect of the
Pledged Collateral and the Lender, upon receipt of any of the
foregoing, shall promptly pay or distribute the same to the
Company, and, to the extent so permitted, any distributions
received by the Company and transferred to other persons shall
pass free and clear of the lien and security interest hereof; and
(iii) the Lender shall execute and deliver to the Company or
cause to be executed and delivered to the Company, all such
proxies, powers of attorney, dividend orders and other
instruments as the Company may reasonably request for the purpose
of enabling it to exercise the voting or consensual rights and
powers which the Company is entitled to exercise pursuant to the
foregoing Section 6(a)(i) or to receive the dividends,
distributions or other payments which the Company is authorized
to retain pursuant to the foregoing Section 6(a)(ii).
(b) Upon the occurrence and during the continuance of an Event of
Default, all rights of the Company to exercise the voting or consensual
rights and powers which the Company would otherwise be entitled to
exercise pursuant to Section 6(a)(i) and to receive the dividends,
8
<PAGE> 10
distributions and other payments which the Pledgor would otherwise be
authorized to receive and retain pursuant to Section 6(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested
in the Lender, which shall then have the sole and exclusive right and
authority to exercise, in its sole discretion, all such voting and
consensual rights and powers and to receive and retain as Pledged
Collateral all such dividends, distributions and other payments. Without
limiting the foregoing, in such event the Lender may exercise all voting
and corporate rights at any meeting of any corporation issuing any such
securities and any and all rights of conversion, exchange, subscription
or any other rights, privileges or options pertaining to any such
securities as if it were the absolute owner thereof, including, without
limitation, the rights to exchange at its discretion, any and all such
securities upon the merger, consolidation, reorganization,
recapitalization or other readjustment of any corporation issuing any
such securities or upon the exercise by any such issuer or the Lender of
any right, privilege or option pertaining to any such securities, and,
in connection therewith, to deposit and deliver any and all securities
with any committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as it my determine, all
without liability except to account for the property actually received
by it, but the Lender shall have no duty to exercise any of the
aforesaid rights, privileges or options and the Lender shall not be
responsible for any failure to do so or delay in so doing.
Section 7. Default.
(a) It shall constitute a Default or an Event of Default under
this Agreement if the Company shall (a) default in the payment of any
portion of the principal or interest owing on the TARC Working Capital
Note and such default is not cured within five (5) days after notice
thereof is received by the Company from the holder of the TARC Working
Capital Note, (b) apply for or consent to the appointment of a receiver,
trustee, intervenor, custodian or liquidator of the Company or of all or
a substantial part of the Company's assets, (c) be adjudicated a
bankrupt or insolvent or file a voluntary petition for bankruptcy, (d)
make a general assignment for the benefit of creditors, (e) file a
petition or answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy or insolvency laws, or
(f) file an answer admitting the material allegations of, or consent to,
or default in answering, a petition filed against the Company in any
bankruptcy reorganization or insolvency proceeding, or take other action
for the purpose of effecting any of the foregoing.
(b) If an Event of Default shall have occurred and is continuing,
in addition to any other rights and remedies that may be available to
the Lender under the UCC or the TARC Working Capital Note or under
Section 5(a) or 5(b) of this Agreement or otherwise under this Agreement
or at law, the Lender shall also have the following rights and powers:
(i) The Lender may, without being required to give any notice
except as hereinafter provided, sell the Pledged Collateral, or
any part thereof, at public or private sale, for cash, upon
credit or for future delivery and at such price or prices as the
Lender deem satisfactory, and the Lender and/or its collateral
agent may be the purchaser of any or all of the Pledged
Collateral so sold and thereafter hold the same absolutely free
from any right or claim of whatsoever kind by or on behalf of the
Company, and the Indebtedness or any portion of the Indebtedness
may be applied as a credit against the purchase price.
9
<PAGE> 11
(ii) Upon any such sale, the Lender shall have the right to
deliver, assign and transfer to the purchaser thereof the Pledged
Collateral so sold. Each purchaser at any such sale shall hold
the property sold absolutely free from any claim or rights of
whatsoever kind by or on behalf of the Company, including any
equity or rights of redemption of the Company, and the Company
hereby specifically waives, to the full extent permitted by
applicable law, all rights of redemption, stay or appraisal which
it has or may have under any rule or law or statute now existing
or hereafter adopted.
(iii) The Lender shall give the Company ten (10) Business
Days' written notice (which the Company agrees is reasonable
notification within the meaning of Section 9-504 of the UCC) of
its intention to make any such public or private sale. Such
notice, in case of public sale, shall state the time and place
fixed for such sale and, in case of a private sale, shall state
the date after which such sale is to be made.
(iv) Any such public sale shall be held at such time or times
within ordinary business hours and at such places as the Lender
may fix in the notices of such sale. At any such sale the Pledged
Collateral may be sold in one lot as an entirety or in separate
parcels, as the Lender may, in its sole discretion, determine.
(v) The Lender shall not be obligated to make any sale of the
Pledged Collateral if it shall determine not to do so, regardless
of the fact that notice of sale of the Pledged Collateral may
have been given. The Lender may, without notice or publication,
adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may, without further notice, be
made at any time or place to which the same shall be so
adjourned.
(vi) In case of any sale of all or any part of the Pledged
Collateral on credit or for future delivery, the Pledged
Collateral so sold may be retained by the Lender until the
selling price is paid by the purchaser thereof, but the Lender
shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Pledged Collateral so sold
and, in case of any such failure, such Pledged Collateral may
again be sold upon like notice.
(vii) The Lender, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law
or in equity to exercise its remedies regarding the Pledged
Collateral and sell the Pledged Collateral, or any portion
thereof, under a judgment or decree of a court or courts of
competent jurisdiction.
(viii) The Company agrees that if any Event of Default shall
have occurred and be continuing, then the Lender shall have the
right to take possession of the Pledged Collateral, and for that
purpose the Lender may, so far as the Company can give authority
therefor, enter upon any premises on which the Pledged Collateral
may be situated and remove the same therefrom with or without
notice or process of law. The Company waives any and all rights
that it may have to a judicial hearing in advance of the
enforcement of any of the Lender's rights hereunder, including,
without limitation, its right following an Event of Default to
take immediate possession of the Pledged Collateral and to
exercise its rights with respect thereto. To the extent that any
of the Obligations are
10
<PAGE> 12
to be paid or performed by a person other than the Company, the
Company waives and agrees not to assert any rights or privileges
which it may have under Section 9-112 of the UCC.
(ix) If under mandatory requirements of applicable law, the
Lender shall be required to make disposition of the Pledged
Collateral within a period of time that does not permit the
giving of notice to the Company as hereinbefore provided, the
Lender need give the Company only such notice of disposition as
shall be reasonably practicable in view of such mandatory
requirements of law.
(x) The Lender may instruct the obligor or obligors on any
agreement, instrument or other obligation constituting the
Pledged Collateral to make any payment or render any performance
required by the terms of such agreement, instrument or obligation
directly to the Lender or its designee.
(c) The Lender shall incur no liability as a result of the sale
of the Pledged Collateral, or any part thereof, at any private sale
other than for its own gross negligence or willful misconduct. The
Company hereby waives, to the maximum extent permitted by applicable
law, any claims against the Lender arising by reason of the fact that
the price at which the Pledged Collateral may have been sold at such
private sale was less than the price which might have been obtained at a
public sale or was less than the aggregate amount of the Indebtedness.
(d) The Lender shall not be obligated to pursue or exhaust its
rights and remedies against any particular Pledged Collateral or other
security for the Indebtedness before pursuing or enforcing its rights
and remedies against any other Pledged Collateral or other security for
the Indebtedness.
(e) To the extent permitted by law, the Company hereby waives (i)
any rights to require the Lender to proceed first against any other
Person, to exhaust its rights in the Pledged Collateral or other
security for the Indebtedness or to pursue any other right that the
Lender might have, (ii) with respect to the TARC Working Capital Note,
presentment and demand for payment, protest, notice of protest and
nonpayment, notice of dishonor, notice of the intention to accelerate
and notice of acceleration (except as otherwise set forth in the TARC
Working Capital Note), and (iii) all rights of marshaling in respect of
any and all of the Pledged Collateral.
(f) Without precluding any other methods of sale, the Company
acknowledges that the sale of the Pledged Collateral shall have been
made in a commercially reasonable manner if conducted in conformity with
reasonable commercial practices of banks disposing of similar property.
The Lender shall not be liable for any depreciation in the value of the
Pledged Collateral.
(g) The Company agrees that its obligation to deliver the Pledged
Collateral is of the essence of this Agreement and that accordingly,
upon application to a court of equity having jurisdiction, the Lender
shall be entitled to a decree requiring specific performance by the
Company of such obligation.
11
<PAGE> 13
(h) Remedies of the Lender are cumulative and the exercise of any
one or more of the remedies provided herein shall not be construed as a
waiver of any of the other remedies of the Lender.
(i) If an Event of Default shall have occurred and be continuing,
the proceeds of any sale of or other realization upon all or any part of
the Pledged Collateral and any other amounts held by the Lender under
this Agreement shall be applied by the Lender to the payment of the
Obligations in such manner and order of priority as the Lender may
determine in its sole discretion.
Any amounts remaining after such applications and the payment in full of
the TARC Working Capital Note with respect to the Indebtedness shall be remitted
to the Company, its successors or assigns, or as a court of competent
jurisdiction may otherwise direct.
Section 8. Regarding Sales of Pledged Collateral.
(a) The Company recognizes that the Lender may be unable, or find
it undesirable, to effect a public sale of any or all the Pledged
Collateral by reason of certain prohibitions contained in the Securities
Act of 1933, as amended (the "Securities Act"), and applicable state
securities laws or otherwise, but may be compelled or desire to resort
to one or more private sales thereof to a restricted group of purchasers
who will be obliged to agree, among other things, to acquire such
securities for their own account for investment and not with a view to
the distribution or resale thereof in violation of the Securities Act.
The Company acknowledges and agrees that any such private sale may
result in prices and other terms less favorable to the seller than if
such sale were a public sale, but, notwithstanding such circumstances,
such private sale shall be deemed to have been made in a commercially
reasonable manner. The Lender shall be under no obligation to delay a
sale of any of the Pledged Collateral for the period of time necessary
to permit the issuing corporation of such securities to register such
securities for public sale under the Securities Act, or under applicable
state securities laws, even if the issuing corporation would agree to do
so.
(b) The Company further agrees to use commercially reasonable
efforts to do or cause to be done all such other acts and things as may
be necessary to make such sale or sales of any portion or all of the
Pledged Collateral valid and binding and in compliance with any and all
applicable laws, regulations, order, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental
instrumentalities, domestic or foreign, having jurisdiction over any
such sale or sales, all at the Company's expense. The Company further
agrees that a breach of any of the covenants contained in this Section 8
will cause irreparable injury to the Lender, that the Lender has no
adequate remedy at law in respect of such breach and, as a consequence,
agrees that each and every covenant contained in this Section 8 shall be
specifically enforceable against the Company, and the Company hereby
waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no
Event of Default has occurred.
Section 9. General Provisions.
(a) Continuing Security Interest: Binding Effect. This Agreement
shall create a continuing security interest in the Pledged Collateral
and shall (a) remain in full force and effect
12
<PAGE> 14
until termination of the obligations of the Company under the TARC
Working Capital Note and the indefeasible payment in full thereafter of
the Obligations; (b) be binding upon the Company and its successors and
assigns; and (c) inure to the benefit of the Lender and its successors,
transferees and assigns. Without limiting the generality of the
foregoing clause (c), the Lender may assign or otherwise transfer any of
its rights under this Agreement to any other Person, and such Person
shall thereupon become vested with all the benefits in respect thereof
granted herein or otherwise to the Lender. Upon the termination of the
obligations of the Company under the TARC Working Capital Note and the
indefeasible payment in full thereafter of the Obligations, the Company
shall be entitled to the return, upon its request and at its expense, of
such of the Pledged Collateral as in the Lender's possession and as
shall not have been sold or otherwise disposed of pursuant to the terms
hereof.
(b) Security Interest Absolute. The lien and security interest
created hereunder and the Company's obligations hereunder and the
Lender's rights hereunder shall not be release, diminished, impaired or
adversely affected by the occurrence of any one or more of the following
events:
(i) The taking or accepting of any other security or
assurance for any or all of the Indebtedness;
(ii) Any release, surrender, exchange, subordination or loss
of any security or assurance at any time existing in connection
with any or all of the Indebtedness;
(iii) The modification of, amendment to, or waiver of
compliance with any terms of the TARC Working Capital Note;
(iv) Any renewal, extension and/or rearrangement of the
payment of any or all of the Indebtedness or any statement,
indulgence, forbearance or compromise that may be granted or
given by the Lender to the company or any other Person;
(v) any negligent, delay, omission, failure or refusal of the
Lender to make or prosecute any action in connection with any
agreement, document or other instrument evidencing, security or
assuring the payment of any of all of the Indebtedness;
(vi) the illegality, invalidity or unenforceability of all or
any part of the TARC Working Capital Note; or
(vii) any other circumstance (other than payment in full of
the Obligations) that might otherwise constitute a defense
available to, or a discharge of, the Company or any party to any
document in respect of the Obligations.
(c) Amendments. This Agreement or any term hereof may be amended
or changed only by an instrument in writing executed jointly by the
Company and the Lender.
(d) Remedies Cumulative. Each right, power and remedy herein
specifically granted to the Lender or otherwise available to it or now
or hereafter existing in law or in equity shall be cumulative and
concurrent, and shall be in addition to every other right, power and
remedy herein
13
<PAGE> 15
specifically given or now or hereafter existing at law, in equity, or
otherwise (including, without limitation, all rights, powers and
remedies granted to a secured party under the UCC), and each such right,
power and remedy, whether specifically granted herein or otherwise
existing, may be exercised at any time and from time to time as often
and in such order as may be deemed expedient by the Lender in its sole
and complete discretion. The provisions of this Agreement may only be
waived by an instrument in writing signed by the Lender, and no failure
on the part of the Lender to exercise, and no delay in exercising, and
no course of dealing with respect to, any such right, power or remedy,
shall operate as a wavier thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right. No notice
to or demand on the Company hereunder shall, of itself, entitle the
Company to any other or further notice or demand in the same or similar
circumstances.
(e) Assignment. Neither this Agreement nor any interest herein or
in the Pledged Collateral, or any part thereof, may be assigned by the
Company without the prior written consent of the Lender, except as
expressly permitted herein or in the TARC Working Capital Note. The
Company hereby acknowledges and consents to the Pledged Collateral
assignment by the Lender of this agreement and the Lender's interest in
the Pledged Collateral to the TEC Indenture Trustee. The Company also
agrees that, in the case of an Event of Default, the TEC Indenture
Trustee may exercise any rights and remedies of the Lender under this
agreement, and any reference to the "Lender" hereunder shall also
include the TEC Indenture Trustee.
(f) Headings. The descriptive headings of the several sections of
this agreement are inserted for convenience only an shall not control or
affect the meaning or construction of any of the provisions hereof.
(g) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity of enforceability or such provision in any other
jurisdiction.
(h) Survival. All representations and warranties contained herein
or made in writing by the Company in connection herewith, shall survive
the execution and delivery of this Agreement and any documents executed
in connection herewith or therewith.
(i) Counterparts. This Agreement may be executed in any number of
counterparts and by different parties in separate counterparts, each of
which when so executed and delivered shall be deemed o be an original,
but all of which when taken together shall constitute one and the same
instrument. A complete set of counterparts shall be lodged with the
Lender.
(j) Waiver. To the extent permitted by applicable law the Company
hereby waives promptness, diligence, notice of acceptance and any other
notice with respect to this Agreement and any requirement that the
Lender protect, secure, perfect or insure any security interest or any
property subject thereto or exhaust any right or take any action against
the Company or any other person or entity; provided however, that the
Lender shall in any event take such care in the handling of any Pledged
Collateral in its possession as it takes with respect to is own property
of a similar nature in its possession.
14
<PAGE> 16
(k) Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given
if made by hand delivery, by telex, by facsimile or registered or
certified mail, postage prepaid, return receipt requested, addressed to
the party to be notified as follows:
in the case of the Company, to:
TCR Holding Corporation
1300 North Sam Houston Parkway East
Suite 320
Houston, Texas 77032
Attention: Ed Donahue
Telecopy No.: (281) 986-8820
in the case of the Lender, to:
TransAmerican Energy Corporation
1300 North Sam Houston Parkway East
Suite 320
Houston, Texas 77032-2949
Attention: Ed Donahue
Telecopy No.: (281) 986-8820
Any party hereto may by notice to the other party designate such
additional or different addresses as shall be furnished in writing to
such party. Any notice or communication to any party shall be deemed to
have been given or made as of the date so delivered, if personally
delivered; when answered back, if telexed; when receipt is acknowledged,
if faxed; and five (5) calendar days after mailing, if sent by
registered or certified mail (except that a notice of change of address
shall not be deemed to have been given until actually received by the
addressee).
(l) Conflicts. If any provision of the TARC Working Capital Note
limits, qualifies, or conflicts with any similar provision of this
Agreement, such provision of the TARC Working Capital Note shall
control.
(m) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE 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). THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, JURISDICTION OF THE AFORESAID
COURTS. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
15
<PAGE> 17
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE
COMPANY IRREVOCABLY CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
COMPANY AT ITS SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDER
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY OTHER
JURISDICTION.
16
<PAGE> 18
IN WITNESS WHEREOF, the Company and the Lender have executed this
Agreement as of the date first above written.
TCR HOLDING CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
TRANSAMERICAN ENERGY CORPORATION
By: ____________________________________
Name: __________________________________
Title: _________________________________
By: ____________________________________
Name: __________________________________
Title: _________________________________
17
<PAGE> 19
EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, Vice President of TCR Holding Corporation, a Delaware
corporation (the "Company"), hereby certify with reference to the Security and
Pledge Agreement dated as of December ___, 1998 between the Company and
TransAmerican Energy Corporation, as Lender (terms defined therein being used
herein as therein defined), to the Lender as follows:
Section 1. Names.
(a) The exact corporate name of the Company, as it appears in
its certificate of incorporation is as follows:
TCR Holding Corporation
(b) Set forth below is each other corporate name the Company
has had since its organization, together with the date of
the relevant change:
n/a
(c) The Company has not changed its identity or corporate
structure in any way within the past five years except:
n/a
(d) The following is a list of other names (including trade
names or similar appellations) used by the Company or any
of its divisions or other business units at any time
during the past five years.
n/a
Section 2. Current Locations.
(a) The chief executive office of the Company is located at
the following address:
Mailing Address County State
--------------- ------ -----
1300 N. Sam Houston Parkway East Harris Texas
Houston, 77032
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<PAGE> 20
(b) The following are all of the places of business of the
Company not identified above:
Mailing Address County State
--------------- ------ -----
None.
Section 3. Prior Locations. Set forth below is the information
required by subparagraphs (a) and (b) of Section 2 with
respect to each location or place of business maintained
by the Company at any time during the past five years:
n/a
Section 4. UCC Filings. A duly signed financing statement on Form
UCC-1 in substantially the form of Schedule 4 hereto has
been duly field in the UCC filing office in each
jurisdiction identified in Section 2 hereof. The Company
will deliver a true copy of each such filing duly
acknowledged by he filing officer as soon as practicable
after the date hereof.
Section 5. Schedule of Filings. Attached hereto as Schedule 5 is a
schedule setting forth filing information with respect to
the filings described in Section 4 above.
Section 6. Filing Fees. All filing fees and taxes payable in
connection with the filings described in Section 4 above
have been paid.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands this
____ day of December, 1998, in the respective capacities, indicated below their
signatures.
________________________________________
Name: __________________________________
Title: _________________________________
-2-
<PAGE> 21
SCHEDULE 2(a)
PLEDGED COLLATERAL
<TABLE>
<CAPTION>
====================================================================================================
Percentage of
Stock Certificate Outstanding
No.(s) Number of Shares of Class
Issuer Class of Stock Par Value Shares
====================================================================================================
<S> <C> <C> <C> <C> <C>
TransContinental
Refining
Corporation Common Stock $__ per share 100%
====================================================================================================
</TABLE>
-1-
<PAGE> 22
SCHEDULE 4
DESCRIPTION OF PLEDGED COLLATERAL
All of the Debtor's right, title and interest in, to and under any and all of
the following described property, assets and rights, in each case, wherever
located, whether now owned or hereafter acquired or arising, all accessions and
additions thereto, all substitutions and replacements therefor, and all proceeds
and products thereof and assigns all rights in and to all collateral securing
the following described property, assets and rights:
(i) all of the issued and outstanding shares of the common
stock, par value $___ per share, of TransContinental Refining
Corporation, a Delaware corporation, identified on Schedule 2(a);
and
(ii) all proceeds and products of the foregoing and
distributions thereof or with respect thereto, including without
limitation dividends, distributions, cash, instruments and other
property or securities, now or hereafter at any time or from time
to time received or receivable or otherwise distributed or
distributable in respect of or in exchange for any or all of the
foregoing.
-1-
<PAGE> 23
SCHEDULE 5
SCHEDULE OF FILINGS
<TABLE>
<CAPTION>
Debtor Filing Officer File Number Date(1)
- ------ -------------- ----------- -------
<S> <C> <C> <C>
TCR Holding N/A ___________________________ 11/ /98
Corporation (St. Charles Parish, L.A.)
TCR Holding N/A ___________________________ 11/ /98
Corporation (Texas, Secretary of State)
</TABLE>
- -------------
(1) Indicate lapse date, if other than fifth anniversary.
-1-
<PAGE> 1
EXHIBIT 99.13
================================================================================
REPURCHASE RIGHTS AGREEMENT
BY AND AMONG
TRANSAMERICAN ENERGY CORPORATION,
TCR HOLDING CORPORATION
AND
CERTAIN STOCKHOLDERS
OF
TCR HOLDING CORPORATION
DECEMBER __, 1998
================================================================================
<PAGE> 2
REPURCHASE RIGHTS AGREEMENT
This Repurchase Rights Agreement (this "Agreement") dated as of December
__, 1998, is by and among TransAmerican Energy Corporation, a Delaware
corporation ("TEC"), TCR Holding Corporation, a Delaware corporation ("TCR
Holding"), and certain stockholders (the "Initial Stockholder Parties") of TCR
Holding listed on Exhibit A attached hereto.
W I T N E S S E T H
WHEREAS, TARC, TCR Holding, TransContinental Refining Corporation, a
Delaware corporation ("TransContinental"), and certain of the Initial
Stockholder Parties have entered into a Securities Purchase Agreement, dated
December -, 1998 (the "Purchase Agreement"), pursuant to which (a) TARC will
issue and sell $150 million in aggregate principal amount of its 15% Senior
Secured Notes due 2003 (the "Notes"), (b) TransContinental will issue and sell
6,000,000 shares of its 6% participating preferred stock (the "TransContinental
Preferred Stock") and (c) TARC will sell to the Initial Stockholder Parties,
among other securities, (i) 6,000,000 shares of TCR Holding's Class B Junior
Non-Voting Participating Preferred Stock (the "Class B Preferred Stock"), (ii)
3,300,000 shares of TCR Holding's Class C Junior Non-Voting Participating
Preferred Stock (the "Class C Preferred Stock"), and (iii) 8,700,000 shares of
TCR Holding's Class D Junior Non-Voting Participating Preferred Stock (the
"Class D Preferred Stock", and together with the Class B Preferred Stock and the
Class C Preferred Stock, the "TCR Holding Repurchasable Preferred Stock");
WHEREAS, upon consummation of the transactions contemplated by the
Purchase Agreement , each Initial Stockholder Party shall individually own
record and beneficial title to the number of shares of TCR Holding Repurchasable
Preferred Stock set forth beside their name on Exhibit A attached hereto; and
WHEREAS, the Initial Stockholder Parties, TEC and TCR Holding wish to
enter into this agreement to set forth certain rights of TEC to repurchase
shares of the TCR Holding Repurchasable Preferred Stock from the Stockholder
Parties (as defined herein).
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions. As used in this Agreement:
(a) "Addendum Agreement" means an addendum agreement in the form
attached hereto as Exhibit B.
(b) "Aggregate Exercise Price" has the meaning given such term
in Section 2.
(c) "Capital Expenditures" of a Person means expenditures
(whether paid in cash or accrued as a liability) by such Person or any
of its subsidiaries that, in conformity with GAAP, are or would be
included in "capital expenditures", "additions to property, plant or
equipment" or comparable items in the consolidated financial statements
of such Person consistent with prior accounting practices.
(d) "Capital Improvement Program" has the meaning given such
term in the Indenture.
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<PAGE> 3
(e) "Capitalized Lease Obligation" means obligations under a
lease that are required to be capitalized for financial reporting
purposes in accordance with GAAP, and the amount of Debt represented by
such obligations shall be the capitalized amount of such obligations, as
determined in accordance with GAAP.
(f) "Completion Cost" means the cost of completion of
construction of Phase I and Phase II commencing November 1, 1998. For
purposes of this definition, the costs of completing Phase I and Phase
II commencing November 1, 1998 shall be deemed to include accounts
payable of TARC for work that had been completed but not paid for at
October 31, 1998.
(g) "Consolidated Adjusted EBITDA" for any period, means (a) the
Consolidated Net Income for such period minus the amount that the board
of directors of TransContinental reasonably determines to have
constituted Maintenance Capital Expenditures for such period, plus (b)
the sum, without duplication (and only to the extent such amounts are
deducted from net revenues in determining such Consolidated Net Income),
of (i) the provision for income taxes for such period for TCR Holding
and its consolidated Subsidiaries, (ii) depreciation, depletion, and
amortization of TCR Holding and its consolidated Subsidiaries (but not
in excess of TCR Holding's pro rata share of depreciation, depletion and
amortization of any such Subsidiary) for such period and (iii)
Consolidated Fixed Charges for such period, determined, in each case, on
a consolidated basis for TCR Holding and its consolidated Subsidiaries
in accordance with GAAP.
(h) "Consolidated Fixed Charge Coverage Ratio" on any date (the
"Transaction Date") means the ratio, on a pro forma basis, of (i) the
aggregate amount of Consolidated Adjusted EBITDA (attributable to
continuing operations and businesses and exclusive of the amounts
attributable to operations and businesses discontinued or disposed of,
on a pro forma basis as if such operations and businesses were
discontinued or disposed of on the first day of the Reference Period)
for the Reference Period to (ii) the aggregate Consolidated Fixed
Charges (exclusive of amounts attributable to discontinued operations
and businesses on a pro forma basis as if such operations and businesses
were discontinued or disposed of on the first day of the Reference
Period, but only to the extent that the obligations giving rise to such
Consolidated Fixed Charges would no longer be obligations contributing
to TCR Holding's Consolidated Fixed Charges subsequent to the
Transaction Date) during the Reference Period; provided, that for
purposes of such computation, in calculating Consolidated Adjusted
EBITDA and Consolidated Fixed Charges, (a) the transaction giving rise
to the need to calculate the Consolidated Fixed Charge Coverage Ratio
shall be assumed to have occurred on the first day of the Reference
Period, (b) the incurrence of any Debt or issuance of Disqualified
Capital Stock or the retirement of any Debt or Disqualified Capital
Stock during the Reference Period or subsequent thereto and on or prior
to the Transaction Date shall be assumed to have occurred on the first
day of such Reference Period and (c) Consolidated Interest Expense
attributable to any Debt (whether existing or being incurred) bearing a
floating interest rate shall be computed as if the rate in effect on the
Transaction Date had been the applicable rate for the entire period,
unless such Person or any of its Subsidiaries is party to a Swap
Obligation (that remains in effect for the 12-month period after the
Transaction Date) that has the effect of fixing the interest rate on the
date of computation, in which case such rate (whether higher or lower)
shall be used.
(i) "Consolidated Fixed Charges" for any period means (without
duplication) the sum of (i) Consolidated Interest Expense for such
period, (ii) dividend requirements of TCR Holding and its consolidated
Subsidiaries (whether in cash or otherwise (except dividends payable
solely in shares of capital stock that is not Disqualified Capital
Stock)) with respect to Preferred Stock paid, accrued, or scheduled to
be paid or accrued during such period, in each case to the extent
attributable
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to such period and excluding items eliminated in consolidation and (iii)
fees paid, accrued, or scheduled to be paid or accrued during such
period by TCR Holding and its Subsidiaries in respect of performance
bonds or other guarantees of payment. For purposes of clause (ii) above,
dividend requirements shall be increased to an amount representing the
pre-tax earnings that would be required to cover such dividend
requirements; accordingly, the increased amount shall be equal to a
fraction, the numerator of which is such dividend requirements and the
denominator of which is one minus the applicable actual combined
effective Federal, state, local, and foreign income tax rate of TCR
Holding and its Subsidiaries (expressed as a decimal), on a consolidated
basis, for the fiscal year immediately preceding the Repurchase Notice
Date.
(j) "Consolidated Interest Expense" means, for any period, the
aggregate interest (without duplication), whether expensed or
capitalized, paid, accrued, or scheduled to be paid or accrued during
such period in respect of all Debt of TCR Holding and its consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP.
(k) "Consolidated Net Income" for any period means the net income
(loss) of TCR Holding and its consolidated Subsidiaries for such period,
determined in accordance with GAAP, excluding (without duplication) (i)
all extraordinary, unusual and nonrecurring gains (but not losses), (ii)
the net income, if positive, of any other Person, other than a
consolidated Subsidiary, in which TCR Holding or any of its consolidated
Subsidiaries has an interest, except to the extent of the amount of any
dividends or distributions actually paid in cash to TCR Holding or a
consolidated Subsidiary of TCR Holding during such period, but not in
excess of TCR Holding's pro rata share of such other Person's aggregate
net income earned during such period or earned during the immediately
preceding period and not distributed during such period, (iii) the net
income, if positive, of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition and
(iv) the net income, if positive, of any Subsidiary of TCR Holding to
the extent that the declaration or payment of dividends or similar
distributions is not at the time permitted by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, rule, or governmental regulation applicable to such Subsidiary.
(l) "Debt" means, with respect to any Person, without duplication
(i) all liabilities, contingent or otherwise, of such Person (a) for
borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof), (b)
evidenced by bonds, notes, debentures, or similar instruments or letters
of credit or representing the deferred and unpaid balance of the
purchase price of any property acquired by such Person or services
received by such Person (other than long-term service or supply
contracts which require minimum periodic payments), (c) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks
or obligations under interest rate or currency exchange rate agreements,
(d) for the payment of money relating to a Capitalized Lease Obligation
and (e) the obligation of such Person as lessee under any sale and
leaseback transaction; (ii) reimbursement obligations of such Person
with respect to letters of credit; (iii) all liabilities of others of
the kind described in the preceding clause (i) or (ii) that such Person
has guaranteed or that is otherwise its legal liability to the extent of
such guaranty or other legal liability) other than for endorsements,
with recourse, of negotiable instruments in the ordinary course of
business; (iv) all obligations secured by a lien to which the property
or assets of such Person are subject, regardless of whether the
obligation secured thereby shall have been assumed by or shall otherwise
be such Person's legal liability (but, if such obligations are not
assumed by such Person or are not otherwise such Person's legal
liability, the amount of such Debt shall be deemed to be limited to the
fair market value of such property or assets determined as of the end of
the preceding fiscal quarter); and (v) any and all deferrals, renewals,
extensions,
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<PAGE> 5
refinancings, and refundings (whether direct or indirect) of, or
amendments, modifications, or supplements to, any liability of the kind
described in any of the preceding clauses (i) through (iv) regardless of
whether between or among the same parties.
(m) "Disbursement Agent" means The Bank of New York, together
with its successors in such capacity pursuant to the terms of the
Disbursement Agreement.
(n) "Disbursement Agreement" means the Construction Collateral
and Disbursement Agreement of even date with the Indenture among TARC,
the securities intermediary, the Trustee, the Disbursement Agent and the
Independent Engineer, as amended, supplemented or otherwise modified
from time to time.
(o) "Disposition" means any sale, inter vivos transfer, pledge,
mortgage or other encumbrance, foreclosure of such a pledge, mortgage or
other encumbrance, or any other disposition of TCR Holding Repurchasable
Preferred Stock whatsoever.
(p) "Disqualified Capital Stock" means any capital stock of TCR
Holding or its subsidiaries that, by its terms or by the terms of any
security into which it is convertible or exchangeable, is, or upon the
happening of an event or the passage of time would be, required to be
redeemed or repurchased by TCR Holding or its Subsidiaries, including at
the option of the holder, in whole or in part, or has, or upon the
happening of an event or passage of time would have, a redemption or
similar payment due, on or prior to two years after the Repurchase
Notice Date.
(q) "GAAP" means generally accepted accounting principles as in
effect in the United States on the date of issuance of the TCR Holding
Repurchasable Preferred Stock to the Initial Stockholder Parties applied
on a basis consistent with that used in the preparation of the audited
financial statements of TCR Holding.
(r) "Indenture" means the indenture, dated as of December 15,
1998, by and between TARC and the Trustee, relating to the Notes, as
assigned to and assumed by TCR Holding and TransContinental.
(s) "Independent Consultant" means the Independent Engineer.
(t) "Independent Engineer" means Turner, Mason & Company and any
successor independent engineer appointed in accordance with the terms of
the Disbursement Agreement.
(u) "Maintenance Capital Expenditures" means those expenditures
that would be classified as Capital Expenditures under GAAP and that are
required to maintain the operation of the Refinery.
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<PAGE> 6
(v) "Net Debt" means the aggregate Debt of TCR Holding and
TransContinental to the extent recorded in accordance with GAAP, less
cash and cash equivalents of TCR Holding and TransContinental, in each
case as measured on a consolidated basis and as of the last day of the
month ended immediately prior to the exercise of the Repurchase Right on
a pro forma basis giving effect to any recapitalization in connection
therewith.
(w) "Notes" has the meaning given such term in the first
"Whereas" clause hereof.
(x) "Person" means any corporation, individual, joint stock
company, joint venture, partnership, unincorporated association,
governmental regulatory entity, country, state or political subdivision
thereof, trust, municipality or other entity.
(y) "Phase I" has the meaning given such term in the Indenture.
(z) "Phase II" has the meaning given such term in the Indenture.
(aa) "Permissible Construction Costs" means the sum of (i) $216.9
million and (ii) the lesser of (x) $1 million and (y) the amount by
which the costs of construction of Phase I commencing November 1, 1998
(including accounts payable of TARC for work on Phase I that had been
completed but not paid for at October 31, 1998) exceed $49.1 million.
(bb) "Preferred Stock" means any class or classes (however
designated) of capital stock of TCR Holding that is preferred as to the
payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of TCR Holding over
shares of capital stock of any other class of TCR Holding.
(cc) "Reference Period" means, with respect to any Repurchase
Notice Date, (i) prior to January 1, 2000, the period from January 1,
1999 through December 31, 1999, in which case Consolidated Adjusted
EBITDA for that portion of the Reference Period that will occur after
the Repurchase Notice Date may be based on projections of TEC if TEC
provides a certificate of the Independent Consultant to the effect that
such projections are reasonable, provided that no such certificate shall
be required if, within 15 days of the receipt of a request therefor, the
Independent Consultant fails to deliver to TEC a certificate to the
effect that such projections are reasonable and fails to nominate a new
Independent Consultant and (ii) on and after January 1, 2000, the 12
month period ending on the last day of the calendar month immediately
preceding the Repurchase Notice Date.
(dd) "Refinery" means TARC's refinery located in St. Charles
Parish, Louisiana as more particularly described in the Mortgage,
Assignment of Leases and Rents, Security Agreement and Financing
Statement from TARC in favor of the Trustee.
(ee) "Repurchase Notice Date" means the date TEC provides notice
to the Stockholder Parties pursuant to Section 4.
(ff) "Repurchase Right" has the meaning given such term in
Section 2.
(gg) "Stockholder Parties" means the Initial Stockholder Parties
and each transferee or pledgee of TCR Holding Repurchasable Preferred
Stock that is subject to this Agreement at the time of the Disposition
of such stock.
(hh) "Subsidiary" means, with respect to TCR Holding, (i) a
corporation with respect to which TCR Holding or its Subsidiaries owns,
directly or indirectly, at least fifty percent of such corporation's
capital stock with voting power, under ordinary circumstances, to elect
directors, or
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<PAGE> 7
(ii) a partnership in which TCR Holding or a Subsidiary of TCR Holding
is, at the time, a general partner of such partnership and has more than
50% of the total voting power of partnership interests entitled (without
regard to the occurrence of any contingency) to vote in the election of
managers thereof, or (iii) any other Person (other than a corporation or
a partnership) in which TCR Holding, one or more Subsidiaries of TCR
Holding, or such other Person and one or more Subsidiaries of such other
Person, directly or indirectly, at the date of determination thereof has
(x) at least a fifty percent ownership interest or (y) the power to
elect or direct the election of the directors or other governing body of
such other Person.
(ii) "Swap Obligation" has the meaning given such term in the
Indenture.
(jj) "TARC" means TransAmerican Refining Corporation, a Texas
corporation.
(kk) "TransContinental" has the meaning given such term in the
first "Whereas" clause hereof.
(ll) "TransContinental Preferred Stock" has the meaning given
such term in the first "Whereas" clause hereof.
(mm) "TARC Subordinated Notes" means, collectively, TARC's 16%
Series A Senior Subordinated Notes due 2003 and 16% Series C Senior
Subordinated Notes due 2003, and upon exchange therefor, TARC's 16%
Series B Senior Subordinated Notes due 2003.
(nn) "TCR Holding Repurchasable Preferred Stock" has the meaning
given such term in the first "Whereas" clause hereof.
(oo) "TEC Notes" means, collectively, TEC's 11-1/2% Senior
Secured Notes due 2002 and 13% Senior Secured Discount Notes due 2002.
(pp) "Trustee" means The Bank of New York, together with its
successors in such capacity under the Indenture.
2. Repurchase Right. Subject to satisfaction of the conditions set
forth in Section 3, TEC shall have the right to repurchase (the "Repurchase
Right") from the Stockholder Parties shares of the TCR Holding Repurchasable
Preferred Stock. TEC may repurchase, in whole but not in part,
(a) from the date hereof through May 31, 1999, at an aggregate
price equal to the greater of $180 million or 30% of the difference
between $1.7 billion and the Net Debt, all of the shares of the Class B
Preferred Stock, the Class C Preferred Stock and the Class D Preferred
Stock;
(b) from June 1, 1999 through November 30, 1999, at an aggregate
price equal to the greater of $140 million or 20% of the difference
between $1.9 billion and the Net Debt, all of the shares of the Class C
Preferred Stock and the Class D Preferred Stock; or
(c) from December 1, 1999 through November 30, 2000, at a price
equal to the greater of $125 million or 14.5% of the difference between
$2.1 billion and the Net Debt, all of the shares of the Class D
Preferred Stock.
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<PAGE> 8
The aggregate price paid by TEC to the Stockholder Parties for the TCR Holding
Repurchasable Preferred Stock shall be the "Aggregate Exercise Price".
3. Conditions to Repurchase Right. The Repurchase Right may be
exercised only if:
(a) the Notes have been paid in full;
(b) all TEC Notes, TARC Subordinated Notes and the promissory
note from TARC to TEC in the original principal amount of $50 million
dated October 1, 1998 have been paid in full;
(c) the Consolidated Fixed Charge Coverage Ratio for the
Reference Period with respect to the Repurchase Notice Date is not less
than 3.0 to 1.0; and
(d) the estimated Completion Cost, based on the most recent
estimate thereof by the Independent Engineer contained in the
Independent Engineer's monthly status report delivered to the
Disbursement Agent and TransContinental pursuant to the Disbursement
Agreement is not in excess of the Permissible Construction Costs.
4. Exercise of Repurchase Right. If TEC desires to exercise the
Repurchase Right, then it shall provide a notice to each of the Stockholder
Parties stating (a) the number of shares of the TCR Holding Repurchasable
Preferred Stock to be repurchased, (b) the purchase price to be paid for such
shares of the TCR Holding Repurchasable Preferred Stock and (c) the closing date
of the repurchase, which date shall be no earlier than 10 days and not later
than 60 days after the date of such notice. The place of the closing shall be as
agreed upon among the parties thereto or, if no such agreement is reached, at
the principal office of TEC. The purchase price of the shares of the TCR Holding
Repurchasable Preferred Stock to be purchased pursuant to the Repurchase Right
shall be paid by certified or cashier's check or by wire transfer upon the
closing and receipt of the certificates representing such shares of the TCR
Holding Repurchasable Preferred Stock together with appropriate stock powers. If
requested by the Stockholder Party and if proper wiring instructions are
provided to TEC, the purchase price shall be delivered by wire transfer to such
Stockholder Party. If the purchase price is paid by check, such check shall be
actually delivered to the Stockholder Party or sent by certified or registered
mail, postage prepaid, return receipt requested, to the address of the
Stockholder Party. In the latter case, delivery shall be deemed to have been
made to the Shareholder Party upon the deposit of such check in the mails.
5. Termination of Repurchase Right. The Repurchase Right shall
expire if the Completion Cost is in excess of the Permissible Construction
Costs.
6. Transfers of TCR Holding Repurchasable Preferred Stock. No
Stockholder Party shall make any Disposition of any shares of TCR Holding
Repurchasable Preferred Stock unless the transferee or pledgee of such shares of
TCR Holding Repurchasable Preferred Stock is a Stockholder Party or executes and
delivers to TEC an Addendum Agreement prior to such Disposition.
7. Changes in TCR Holding Repurchasable Preferred Stock.
(a) Stock Splits and Reverse Splits. In the event that TCR
Holding shall at any time subdivide its outstanding shares of TCR
Holding Repurchasable Preferred Stock into a greater number of shares,
the number of shares of TCR Holding Repurchasable Preferred Stock
purchasable pursuant to the Repurchase Right immediately prior to such
subdivision shall be proportionately increased and, conversely, in the
event that the outstanding shares of TCR Holding Repurchasable Preferred
Stock shall at any time be combined into a smaller number of shares, the
number of shares
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<PAGE> 9
of TCR Holding Repurchasable Preferred Stock purchasable pursuant to the
Repurchase Right immediately prior to such combination shall be
proportionately reduced.
(b) Conversions, Reorganizations, Mergers and Asset Sales. If (i)
the TCR Holding Repurchasable Preferred Stock is converted into common
stock or any other class of capital stock of TCR Holding or (ii) any
capital reorganization or reclassification of the capital stock of TCR
Holding, or any consolidation, merger or share exchange of TCR Holding
with another person or entity, or the sale, transfer or other
disposition of all or substantially all of its assets to another person
or entity shall be effected and, in either case, a holder of shares of
TCR Holding Repurchasable Preferred Stock shall receive or be entitled
to receive capital stock, securities or assets with respect to or in
exchange for its shares of TCR Holding Repurchasable Preferred Stock,
then the provisions hereof shall thereafter be applicable, as nearly as
possible, in relation to any shares of capital stock, securities or
assets issued or payable with respect to, upon conversion of or in
exchange for such shares of TCR Holding Repurchasable Preferred Stock.
(c) Adjustment for Asset Distribution. If TCR Holding declares a
dividend or other distribution payable to all holders of shares of Class
B Preferred Stock, Class C Preferred Stock or Class D Preferred Stock in
notes or other evidences of indebtedness of TCR Holding or other assets
of TCR Holding (including cash (other than regular cash dividends
declared by the Board of Directors), capital stock or other property),
the Aggregate Exercise Price in effect immediately prior to such
declaration of such dividend or other distribution that is related to
such shares shall be reduced by an amount equal to the aggregate amount
of such dividend or distribution attributable to the shares that are
then subject to the Repurchase Right, in the case of a cash dividend or
distribution, or by the fair value of such dividend or distribution (as
reasonably determined in good faith by the Board of Directors of TCR
Holding), in the case of any other dividend or distribution. Such
reduction shall be made whenever any such dividend or distribution is
made and shall be effective as of the date as of which a record is taken
for purpose of such dividend or distribution or, if a record is not
taken, the date as of which holders of record of TCR Holding
Repurchasable Preferred Stock entitled to such dividend or distribution
are determined.
8. Representations of the Stockholder Parties. Each of the
Stockholder Parties represents and warrants to each of the other Stockholder
Parties and to TEC that:
(a) such Stockholder Party has the requisite power and authority
to enter into and perform this Agreement;
(b) if such Stockholder Party is a corporation, the execution,
delivery and performance of this Agreement have been duly authorized by
all necessary corporate action on the part of such Stockholder Party,
and this Agreement has been duly executed by a duly authorized officer
of such Stockholder Party;
(c) if such Stockholder Party is a partnership, the execution,
delivery and performance of this Agreement have been duly authorized by
all necessary partnership action on the part of such Stockholder Party,
and this Agreement has been duly executed by a duly authorized partner
of such Stockholder Party;
(d) the performance of this Agreement by the Stockholder Party
will not require such Stockholder Party to obtain the consent, waiver or
approval of any person and will not violate, result
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<PAGE> 10
in a breach of or constitute a default under any statute, regulation,
agreement, trust instrument, judgment, consent, decree or restriction by
which it is bound;
(e) if it is an Initial Stockholder Party, such Stockholder Party
is the record and/or beneficial owner of the shares of TCR Holding
Repurchasable Preferred Stock as described in Exhibit A hereto; and
(f) at the time of the delivery of the shares of TCR Holding
Repurchasable Preferred Stock by such Stockholder Party pursuant to
Section 4, such Stockholder Party will own beneficially and of record
and will have full power and authority to convey free and clear of all
liens, encumbrances, restrictions and claims of every kind, the shares
of TCR Holding Repurchasable Preferred Stock subject to the Repurchase
Right and, upon delivery of and payment for such shares of TCR Holding
Repurchasable Preferred Stock as provided in this Agreement, TEC will
acquire good and valid title thereto, free and clear of all liens,
encumbrances, restrictions and claims of every kind.
9. Representations of TEC. TEC represents and warrants to each
Stockholder Party that:
(a) TEC has the requisite power and authority to enter into and
perform this Agreement; and
(b) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part
of TEC, and this Agreement has been duly executed by a duly authorized
officer of TEC.
10. Endorsement of Stock Certificates. All certificates representing
shares of TCR Holding Repurchasable Preferred Stock to be issued pursuant to the
Purchase Agreement and any certificates representing shares of TCR Holding
Repurchasable Preferred Stock that are issued in the future shall be endorsed on
the back thereof as follows, or in words of similar meaning:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF THE REPURCHASE RIGHTS AGREEMENT DATED DECEMBER 15, 1998
(THE "AGREEMENT"), BY AND AMONG THE COMPANY, TRANSAMERICAN ENERGY
CORPORATION AND CERTAIN STOCKHOLDERS OF THE COMPANY. THE COMPANY
WILL FURNISH TO THE RECORD HOLDER HEREOF WITHOUT CHARGE UPON
WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS
OR ITS REGISTERED OFFICE A COPY OF THE AGREEMENT. A TRANSFEREE,
PLEDGEE OR MORTGAGEE OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE DEEMED TO HAVE NOTICE OF AND TO BE BOUND BY
THE TERMS OF THE AGREEMENT.
Such certificates shall be endorsed on the front thereof as follows, or
in words of similar meaning:
"SEE REVERSE FOR IMPORTANT NOTICE ON TRANSFER
RESTRICTIONS AND OTHER INFORMATION."
11. Termination. This Agreement shall continue in effect for the
period commencing on the date hereof until its termination on December 1, 2000
or its earlier termination in accordance with the terms hereof; provided that
this Agreement shall continue in effect thereafter if the Repurchase Right has
theretofore been exercised. The representations and warranties of the parties
contained in this Agreement
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<PAGE> 11
shall survive termination of this Agreement and the delivery of the shares of
TCR Holding Repurchasable Preferred Stock pursuant to the exercise of the
Repurchase Right.
12. Amendments. This Agreement may be changed, modified or amended by a
writing signed by TEC, TCR Holding and the Stockholder Parties who own a
majority of the shares of the TCR Holding Repurchasable Preferred Stock then
subject to the Repurchase Right; provided that no such change, modification or
amendment shall be enforceable against any party to this Agreement whose rights
or obligations hereunder will be materially and adversely affected thereby
unless the same shall be in writing and signed by such party.
13. Notices. All notices, requests, demands and other communications
made in connection with this Agreement shall be in writing and shall be deemed
to have been duly given on the date delivered, if delivered personally, by
overnight delivery service or sent by facsimile machine to the persons
identified below, or three days after mailing in the U.S. Mail if mailed by
certified or registered mail, postage prepaid, return receipt requested,
addressed as follows:
(a) if to TCR Holding:
TCR Holding Corporation
14902 River Road
New Sarpy, Louisiana 70078
Facsimile: (504) 764-2359
Attn: Glenn McGinnis
(b) if to TEC:
TransAmerican Energy Corporation
1300 North Sam Houston Parkway East, Suite 200
Houston, Texas 77032-2949
Facsimile: 281.986.8865
Attn: Ed Donahue
(c) if to the Stockholder Parties, to the address of
each Stockholder Party as indicated on Exhibit A
hereto (with respect to the Initial Stockholder
Parties) or their respective Addendum Agreements
(with respect to other Stockholder Parties).
Such addresses may be changed, from time to time, by means of a notice given in
the manner provided in this Section 13.
14. Waiver. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(regardless of whether such provision is similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
15. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties
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<PAGE> 12
as closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the extent possible.
16. Entire Agreement. This Agreement and the other agreements
contemplated hereby constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral, written or inferred,
of the parties, and there are no other warranties, representations or agreements
between the parties in connection with the subject matter hereof.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE 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 ARISING OUT OF OR RELATING TO THIS AGREEMENT AND
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED 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 TO 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.
18. Binding Effect and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. TEC shall have the right to assign this
Agreement and its rights hereunder at its discretion. TCR Holding may not assign
its obligations under this Agreement. Nothing in this Agreement, express or
implied, is intended to confer upon any person other than the parties hereto and
their respective heirs, successors and permitted assigns, any rights, benefits
or obligations hereunder.
19. Specific Performance. If any of the Stockholder Parties refuses
to consummate the Repurchase Right pursuant to the terms of this Agreement for
any reason other than termination hereof pursuant to a right granted to the
Stockholder Parties hereunder to do so, then TEC may (a) enforce specific
performance of the obligations of the Stockholder Parties and (b) seek any other
rights, recourses or remedies available to TEC.
20. Headings. The headings contained herein are inserted for
convenience of reference only and are not intended to be a part of or affect the
meaning or interpretation of this Agreement.
21. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[SIGNATURES ON FOLLOWING PAGES]
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<PAGE> 13
TRANSAMERICAN ENERGY CORPORATION
By: ____________________________________
Name:
Title:
TCR HOLDING CORPORATION
By: ____________________________________
Name:
Title:
INITIAL STOCKHOLDER PARTIES:
THE TCW FUNDS: TCW LEVERAGED INCOME TRUST, L.P.
By: TCW ADVISORY (BERMUDA), LTD.,
as General Partner
By:
-----------------------------------
Name:
Title:
By: TCW INVESTMENT MANAGEMENT COMPANY,
as Investment Advisor
By:
-----------------------------------
Name:
Title:
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW Advisory (Bermuda), Ltd.,
as General Partner
By:
-----------------------------------
Name
Title
By: TCW Investment Management Company,
as Investment Advisor
By:
----------------------------------
Name
Title
TCW SHARED OPPORTUNITY FUND III, L.P.
By: TCW ASSET MANAGEMENT COMPANY,
as Investment Advisor
By:
-----------------------------------
Name:
Title:
-12-
<PAGE> 14
JEFFERIES & COMPANY, INC.
By: ____________________________________
Name:
AUTHORIZED SIGNATORY
[SIGNATURES OF OTHER INITIAL STOCKHOLDER PARTIES CONTINUE
ON THE FOLLOWING PAGES]
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<PAGE> 15
SIGNATURE PAGE TO REPURCHASE RIGHTS AGREEMENT
This signature page is for the Repurchase Rights Agreement dated as of
December ___, 1998 (the "Agreement"), by and among TEC, TCR Holding and the
Initial Stockholder Parties, and by execution below the undersigned agrees that
it shall be attached as a signature page to the Agreement.
________________________________________
By: ____________________________________
Name:
Title:
________________________________________
________________________________________
________________________________________
[Address]
-14-
<PAGE> 16
EXHIBIT A
INITIAL STOCKHOLDER PARTIES
<TABLE>
<CAPTION>
Number of Shares of TCR Holding Repurchasable Preferred Stock
-----------------------------------------------------------------
Class B Class C Class D
------- ------- -------
<S> <C> <C> <C>
TCW Leveraged Income Trust, L.P.
11100 Santa Monica Blvd.
Suite 2000
Los Angeles, CA 90025
Attn. Nicholas W. Tell, Jr.
Facsimile:
TCW Leveraged Income Trust II, L.P.
11100 Santa Monica Blvd.
Suite 2000
Los Angeles, CA 90025
Attn. Nicholas W. Tell, Jr.
Facsimile:
TCW Shared Opportunity
Fund III, L.P.
11100 Santa Monica Blvd.
Suite 2000
Los Angeles, CA 90025
Attn. Nicholas W. Tell, Jr.
Facsimile:
Jefferies & Company, Inc.
11100 Santa Monica Blvd.
10th Floor
Los Angeles, CA 90025
Attn. Joe Maly
Facsimile:
[Name]
[address]
</TABLE>
-15-
<PAGE> 17
EXHIBIT B
ADDENDUM AGREEMENT
Addendum Agreement made this ___ day of ___________, _____ , by and
between ___________________ (the "New Stockholder") and TransAmerican Energy
Corporation, a Delaware corporation ("TEC"), TCR Holding Corporation, a Delaware
corporation ("TCR Holding"), and such stockholders (the "Stockholders") of TCR
Holding who are parties to that certain Repurchase Rights Agreement dated
December ___, 1998 (the "Agreement"), by and among TEC, TCR Holding and the
Stockholders.
W I T N E S S E T H:
WHEREAS, TEC, TCR Holding and the Stockholders entered into the
Agreement to impose certain restrictions and obligations upon the Stockholders
and certain shares of capital stock (the "TCR Holding Repurchasable Preferred
Stock") of TCR Holding owned by the Stockholders;
WHEREAS, the New Stockholder is desirous of becoming a stockholder of
TCR Holding; and
WHEREAS, TCR Holding, TEC and the Stockholders have required in the
Agreement that any person being offered shares of TCR Holding Repurchasable
Preferred Stock must enter into an Addendum Agreement binding the New
Stockholder to the Agreement to the same extent as if the New Stockholder was an
original party thereto, so as to promote the mutual interests of TCR Holding,
TEC, the Stockholders and the New Stockholder by imposing the same restrictions
and obligations on the New Stockholder and the shares of capital stock of TCR
Holding to be acquired by the New Stockholder as were imposed upon the
Stockholders under the Agreement;
NOW, THEREFORE, in consideration of the mutual promises of the parties,
and as a condition of the purchase of the shares of TCR Holding Repurchasable
Preferred Stock, the New Stockholder acknowledges that the New Stockholder has
read the Agreement. The New Stockholder shall be a "Stockholder Party" (as
defined in the Agreement) and shall be bound by, and shall have the benefit of,
all of the terms and conditions set out in the Agreement to the same extent as
if the New Stockholder were an "Initial Stockholder Party" (as defined in the
Agreement). This Addendum Agreement shall be attached to and become a part of
the Agreement.
_____________________________ ________________________________________
[New Stockholder]
________________________________________
[New Stockholder's Address]
ACCEPTED BY TCR HOLDING
ON BEHALF OF ITSELF, TEC
AND THE STOCKHOLDERS:
TCR HOLDING CORPORATION
_____________________________
Name:
Title:
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<PAGE> 1
[TCW LETTERHEAD]
December __, 1998
TransAmerican Refinery Corporation
1300 North Sam Houston Parkway, Suite 200
Houston, Texas 77032-2949
Attention: Mr. Ed Donahue
Gentlemen:
Pursuant to a Securities Purchase Agreement dated December __, 1998
executed in connection with a financing in which certain affiliates of TCW
Investment Management Company, Inc. (the "TCW" Funds) are investing,
TransAmerican Refinery Corporation ("TARC") has agreed to pay the TCW Funds a
funding fee in the form of 3,000,000 shares (the "Shares") of Class B
Non-Voting Common Stock, par value $0.01 per share, of TCR Holding Corporation
("TCR Holding"), which Shares are held by TARC. The Shares shall be subject to
repurchase by TARC, in whole but not in part, at any time prior to the second
anniversary of the date of this letter by bank wire transfer of immediately
available funds in the amount of $5,000,000 to such account as the TCW Funds
may designate upon no less than five (5) days written notice.
Notwithstanding the foregoing, in the event that the holders of a majority
of the voting stock of TCR Holding do not notify TCR Holding, on or prior to
July 31, 1999, that such holders irrevocably exercise their option under the
Stockholders Agreement dated as of the date hereof to cause the Company to
exchange the shares of Class A Participating Preferred Stock of TCR Holding
held by TARC for debt and common stock of TCR Holding pursuant to the
certificate of designation governing such Participating Preferred Stock, then
the TCW Funds shall immediately transfer the Shares to TARC and relinquish all
of the TCW Funds' right, title and interest in the Shares.
Please confirm your agreement to the foregoing by signing a copy of this
letter as indicated below.
Sincerely,
LEVERAGED INCOME TRUST, L.P.
By: TCW Advisory (Bermuda), Ltd.,
as General Partner
By: _____________________________
Name:
Title:
<PAGE> 2
By: TCW Investment Management Company,
as Investment Advisor
By:
------------------------------------
Name:
Title:
TCW Leveraged Income Trust II, L.P.
By: TCW Advisory (Bermuda), Ltd.,
as General Partner
By:
------------------------------------
Name:
Title:
By: TCW Asset Management Company,
as Investment Adviser
By:
------------------------------------
Name:
Title:
TCW Shared Opportunity Fund III, L.P.
By: TCW Asset Management Company, as
Investment Adviser
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
<PAGE> 3
Agreed and Accepted:
TRANSAMERICAN REFINERY CORPORATION
By:
------------------------------
Name:
Title:
