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EXHIBIT 4.27
===============================================================================
$25,000,000
16% Senior Subordinated Notes due 2003
INDENTURE
between
TRANSAMERICAN REFINING CORPORATION,
as Issuer
and
First Union National Bank
as Trustee
Dated as of March 16, 1998
===============================================================================
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- -------
310(a)(1).......................................................................... 7.10
(a)(2)....................................................................... 7.10
(a)(3)....................................................................... N.A.
(a)(4)....................................................................... N.A.
(a)(5)....................................................................... 7.10
(b).......................................................................... 7.08; 7.10
(c).......................................................................... N.A.
311(a)............................................................................. 7.11
(b).......................................................................... 7.11
(c).......................................................................... N.A.
312(a)............................................................................. 2.05
(b).......................................................................... 13.03
(c).......................................................................... 13.03
313(a)............................................................................. 7.06
(b)(1)....................................................................... 7.06
(b)(2)....................................................................... 7.06
(c).......................................................................... 7.06; 13.02
(d).......................................................................... 7.06
314(a)............................................................................. 4.08; 13.02
(b).......................................................................... 12.03(b)
(c)(1)....................................................................... 2.02; 7.02;
13.04
(c)(2)....................................................................... 7.02; 13.04
(c)(3)....................................................................... N.A.
(d).......................................................................... 12.03(b);
12.04(b)
(e).......................................................................... 13.05
(f).......................................................................... N.A.
315(a)............................................................................. 7.01(b)
(b).......................................................................... 7.05; 13.02
(c).......................................................................... 7.01(a)
(d).......................................................................... 6.11; 7.01(c)
(e).......................................................................... 6.13
316(a)(last sentence).............................................................. 2.09
(a)(1)(A).................................................................... 6.11
(a)(1)(B).................................................................... 6.12
(a)(2)....................................................................... N.A.
(b).......................................................................... 6.12; 6.08
(c).......................................................................... 10.05
317(a)(1).......................................................................... 6.03
(a)(2)....................................................................... 6.04
(b).......................................................................... 2.04
318(a)............................................................................. 13.01
--------------
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
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TABLE OF CONTENTS
PAGE
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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..........................................23
Section 1.3 Rules of Construction......................................................23
ARTICLE II
THE NOTES.........................................................................................24
Section 2.1 Form and Dating............................................................24
Section 2.2 Execution and Authentication...............................................24
Section 2.3 Registrar and Paying Agent.................................................25
Section 2.4 Paying Agent to Hold Assets in Trust.......................................25
Section 2.5 Noteholder Lists...........................................................26
Section 2.6 Transfer and Exchange......................................................26
Section 2.7 Replacement Notes..........................................................29
Section 2.8 Outstanding Notes..........................................................29
Section 2.9 Treasury Notes.............................................................30
Section 2.10 Temporary Notes............................................................30
Section 2.11 Cancellation...............................................................30
Section 2.12 Defaulted Interest.........................................................30
Section 2.13 Computation of Interest....................................................31
Section 2.14 Legends....................................................................31
Section 2.15 Separation of Notes and Warrants...........................................32
ARTICLE III
REDEMPTION........................................................................................32
Section 3.1 Right of Redemption........................................................32
Section 3.2 Notices to Trustee.........................................................32
Section 3.3 Selection of Notes to Be Redeemed..........................................33
Section 3.4 Notice of Redemption.......................................................33
Section 3.5 Effect of Notice of Redemption.............................................34
Section 3.6 Deposit of Redemption Price................................................34
Section 3.7 Notes Redeemed in Part.....................................................34
ARTICLE IV
COVENANTS.........................................................................................35
Section 4.1 Payment of Notes...........................................................35
Section 4.2 Maintenance of Office or Agency............................................35
Section 4.3 Limitation on Restricted Payments..........................................35
Section 4.4 Corporate Existence........................................................36
Section 4.5 Payment of Taxes and Other Claims..........................................36
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Section 4.6 Maintenance of Properties and Insurance....................................37
Section 4.7 Compliance Certificate; Notice of Default..................................37
Section 4.8 SEC Reports................................................................38
Section 4.9 Limitation on Status as Investment Company or Public Utility
Company....................................................................38
Section 4.10 Limitation on Transactions with Related Persons............................38
Section 4.11 Limitation on Incurrences of Additional Debt and Issuances of
Disqualified Capital Stock.................................................39
Section 4.12 Limitations on Restricting Subsidiary Dividends............................41
Section 4.13 Liens......................................................................41
Section 4.14 Limitation on Asset Sales..................................................42
Section 4.15 Waiver of Stay, Extension or Usury Laws....................................45
Section 4.16 Guarantee by Subsidiaries..................................................45
Section 4.17 Intentionally Omitted......................................................46
Section 4.18 Limitations on Line of Business............................................46
Section 4.19 Separate Existence and Formalities.........................................46
Section 4.20 Accounts Receivable Subsidiary.............................................46
Section 4.21 Limitation on Ranking of Future Debt.......................................47
Section 4.22 Maintenance of Interest Reserve Account....................................47
Section 4.23 Restriction on Sale and Issuance of Subsidiary Stock.......................49
ARTICLE V
SUCCESSOR CORPORATION.............................................................................49
Section 5.1 When the Company May Merge, Etc............................................49
Section 5.2 Successor Corporation Substituted..........................................50
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES....................................................................51
Section 6.1 Events of Default..........................................................51
Section 6.2 Acceleration of Maturity Date; Rescission and Annulment....................52
Section 6.3 Collection of Indebtedness and Suits for Enforcement by Trustee............53
Section 6.4 Trustee May File Proofs of Claim...........................................54
Section 6.5 Trustee May Enforce Claims Without Possession of Notes.....................54
Section 6.6 Priorities.................................................................55
Section 6.7 Limitation on Suits........................................................55
Section 6.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest.....................................................................................55
Section 6.9 Rights and Remedies Cumulative.............................................56
Section 6.10 Delay or Omission Not Waiver...............................................56
Section 6.11 Control by Holders.........................................................56
Section 6.12 Waiver of Past Default.....................................................56
Section 6.13 Undertaking for Costs......................................................56
Section 6.14 Restoration of Rights and Remedies.........................................57
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ARTICLE VII
TRUSTEE...........................................................................................57
Section 7.1 Duties of Trustee..........................................................57
Section 7.2 Rights of Trustee..........................................................58
Section 7.3 Individual Rights of Trustee...............................................59
Section 7.4 Trustee's Disclaimer.......................................................59
Section 7.5 Notice of Default..........................................................59
Section 7.6 Reports by Trustee to Holders..............................................59
Section 7.7 Compensation and Indemnity.................................................59
Section 7.8 Replacement of Trustee.....................................................60
Section 7.9 Successor Trustee by Merger, Etc...........................................61
Section 7.10 Eligibility; Disqualification..............................................61
Section 7.11 Preferential Collection of Claims against Company..........................61
Section 7.12 No Bond....................................................................61
Section 7.13 Condition to Action........................................................61
Section 7.14 Investment.................................................................61
ARTICLE VIII
SATISFACTION AND DISCHARGE........................................................................61
Section 8.1 Satisfaction, Discharge of the Indenture and Defeasance of the Notes.......61
Section 8.2 Termination of Obligations Upon Cancellation of the Notes..................63
Section 8.3 Survival of Certain Obligations............................................63
Section 8.4 Acknowledgment of Discharge by Trustee.....................................63
Section 8.5 Application of Trust Assets................................................63
Section 8.6 Repayment to the Company...................................................63
Section 8.7 Reinstatement..............................................................64
ARTICLE IX
AMENDMENTS, SUPPLEMENTS AND WAIVERS...............................................................64
Section 9.1 Supplemental Indentures Without Consent of Holders.........................64
Section 9.2 Amendments, Supplemental Indentures and Waivers with Consent of
Holders......................................................................................64
Section 9.3 Compliance with TIA........................................................66
Section 9.4 Revocation and Effect of Consents..........................................66
Section 9.5 Notation on or Exchange of Notes...........................................66
Section 9.6 Trustee to Sign Amendments, Etc............................................66
ARTICLE X
MEETINGS OF NOTEHOLDERS...........................................................................67
Section 10.1 Purposes for Which Meetings May Be Called..................................67
Section 10.2 Manner of Calling Meetings.................................................67
Section 10.3 Call of Meetings by Company or Holders.....................................67
Section 10.4 Who May Attend and Vote at Meetings........................................67
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Section 10.5 Regulations May Be Made by Trustee; Conduct of the Meeting; Voting
Rights; Adjournment..........................................................................68
Section 10.6 Voting at the Meeting and Record to Be Kept................................68
Section 10.7 Exercise of Rights of Trustee or Noteholders May Not Be Hindered or
Delayed by Call of Meeting...................................................................69
ARTICLE XI
RIGHT TO REQUIRE REPURCHASE.......................................................................69
Section 11.1 Repurchase of Notes at Option of the Holder Upon Change of Control.........69
ARTICLE XII
SUBORDINATION.....................................................................................70
Section 12.1 Notes Subordinated to Senior Indebtedness..................................70
Section 12.2 No Payment on Securities in Certain Circumstances..........................71
Section 12.3 Notes Subordinated to Prior Payment of All Senior Debt on Dissolution,
Liquidation or Reorganization................................................................72
Section 12.4 Securityholders to Be Subrogated to Rights of Holders of Senior Debt.......72
Section 12.5 Obligations of the Company Unconditional...................................73
Section 12.6 Trustee Entitled to Assume Payments Not Prohibited in Absence of
Notice.......................................................................................73
Section 12.7 Application by Trustee of Assets Deposited with It.........................73
Section 12.8 Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Debt............................................................74
Section 12.9 Holders of Notes Authorize Trustee to Effectuate Subordination of
Securities...................................................................................74
Section 12.10 Right of Trustee to Hold Senior Debt.......................................74
Section 12.11 Article XII Not to Prevent Events of Default...............................74
Section 12.12 No Fiduciary Duty of Trustee to Holders of Senior Debt.....................74
ARTICLE XIII
MISCELLANEOUS.....................................................................................75
Section 13.1 TIA Controls...............................................................75
Section 13.2 Notices....................................................................75
Section 13.3 Communications by Holders with Other Holders...............................76
Section 13.4 Certificate and Opinion as to Conditions Precedent.........................76
Section 13.5 Statements Required in Certificate or Opinion..............................76
Section 13.6 Rules by Trustee, Paying Agent, Registrar..................................76
Section 13.7 Legal Holidays.............................................................76
Section 13.8 Governing Law..............................................................76
Section 13.9 No Adverse Interpretation of Other Agreements..............................77
Section 13.10 No Recourse against Others.................................................77
Section 13.11 Successors.................................................................77
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Section 13.12 Duplicate Originals........................................................77
Section 13.13 Severability...............................................................77
Section 13.14 Table of Contents, Headings, Etc...........................................77
SIGNATURES............................................................................................78
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Unit
Exhibit C - Certificate of Transferor
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 March 16, 1998, between TRANSAMERICAN REFINING
CORPORA TION, a Texas corporation (the "Company"), and FIRST UNION NATIONAL
BANK, 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 16% Senior
Subordinated Notes due 2003:
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.1 Definitions.
"Accounts Receivable Subsidiary" means a subsidiary of TEC designated
as an Accounts Receivable Subsidiary for the purpose of financing the accounts
receivable of the Company.
"Accounts Receivable Subsidiary Notes" means the notes to be issued by
the Accounts Receivable Subsidiary for the purchase of accounts receivable.
"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
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
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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).
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Alkylation Unit" means the alkylation unit being constructed as part
of the Capital Improvement Program.
"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.
"Asset Sale" means any direct or indirect conveyance, sale, transfer or
other disposition (including 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 Series A/B Issue Date or
thereafter acquired; provided, however, that "Asset Sale" shall not include (i)
any disposition of Receivables, Inventory or Equipment, or (ii) 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.
"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.
"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.
"Business Day" means a day that is not a Legal Holiday.
"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.
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"Capital Improvement Program" means the expansion and improvement
program at the Company as described in the Registration Statement on Form S-4,
as amended, of TEC under the heading "Business of TARC--Capital Improvement
Program" and including both Phase I and Phase II.
"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.
"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 ▇▇▇▇▇'▇
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 with any
commercial bank organized in the United States not meeting the qualifications
specified in clause (c) above or an Eligible Institution, provided that such
deposits and certificates support bonds, letters of credit and other similar
types of obligations 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.
"CATOFIN(R) Unit" means certain real property currently owned by the
Company as more specifically defined in the security documents relating to the
TEC Notes, together with all personal property of the Company now or hereinafter
located on such real property but only to the extent that such property is part
of a refining unit designed to produce propane and butane mono-olefins using the
CATOFIN(R) process.
"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 Section 13(d) and 14(d) of the Exchange Act, whether or
not applicable), other than ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (or his heirs, his estate, or any
trust in which he or his immediate family members have, directly or indirectly,
a beneficial interest in excess of 50%) and his Subsidiaries or the TEC
Indenture Trustee, 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%, on a
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fully diluted basis, of the total voting power of the Company's then outstanding
Voting Stock unless, at the time of the occurrence of an event specified in
clauses (i) or (ii), the Notes have a current rating issued by a Rating Agency;
provided, however, that if, at any time within the period commencing on the date
that is immediately prior to the date of the first public announcement of such
event and ending on, but not including, the date that is 90 days after
occurrence of such event (which period shall be deemed to be extended so long as
prior to the end of such 90-days period and continuing thereafter the rating of
the Notes is under publicly announced consideration for possible downgrade by
either Rating Agency) either (a) the Notes are downgraded by either Rating
Agency to a rating at least one gradation (including a change within rating
categories, e.g., a decline in rating from BB+ to BB, or from B to B--) below
that which existed on the date immediately prior to the date of the first public
announcement of such an event, or (b) either Rating Agency withdraws its rating
of the Notes, then, in either case, such event shall be a "Change of Control."
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.
"Common Stock" means the Company's common stock, $0.01 par value.
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Consolidated EBITDA" of any Person for any period, unless otherwise
defined herein, means (a) the Consolidated Net Income of such Person 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 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 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 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 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, (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
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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 1 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 but excluding any interest accrued on intercompany payables for
taxes to the extent the liability for such taxes has been assumed by
TransAmerican pursuant to the Tax Allocation Agreement) 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, (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, 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
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operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule, or governmental regulation applicable to such
Subsidiary.
"Consolidated Net Tangible Assets" means, as of any date, the total
assets of the Company and its Subsidiaries on a consolidated basis as of such
date (less applicable reserves and other items properly deductible from total
assets) and after deduction therefrom: (i) total liabilities and total capital
items as of such date except the following: items constituting Debt,
paid-in-capital and retained earnings, provisions for deferred income taxes and
deferred gains, and reserves which are not reserves for any contingencies not
allocated to any particular purpose; (ii) good will, trade names, trademarks,
patents, unamortized debt discount and expense, and other intangible assets; and
(iii) all Investments other than Permitted Investments.
"Construction Supervisor" means ▇▇▇▇▇ & ▇'▇▇▇▇▇, Inc., as construction
supervisor of the Capital Improvement Program or any successor construction
supervisor appointed pursuant to the Disbursement Agreement.
"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, (c) 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 contracts or
supply contracts which require minimum periodic payments and other than any such
balance that represents an account payable or other monetary obligation to a
trade creditor created, incurred, assumed or guaranteed by such Person in the
ordinary course of business of such Person in connection with obtaining goods,
materials or services due within twelve months (or such longer period for
payment as is customarily extended by such trade creditor) of the Incurrence
thereof, which account is not overdue by more than 150 days, unless such account
payable is being contested in good faith or has been extended, (d) evidenced by
bankers' acceptances or similar instruments issued or accepted by banks or Swap
Obligations, (e) for the payment of money relating to a Capitalized Lease
Obligation or (f) 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 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.
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"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.
"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 hereof 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.
"Disbursement Agreement" means the Disbursement Agreement, among TEC,
the Company, the disbursement agent named therein and the Construction
Supervisor, as amended pursuant to the terms thereof.
"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 June 30, 2003.
"DTC" means The Depository Trust Company.
"Eligible Institution" means a commercial banking institution that has
combined capital and surplus of not less than $500,000,000 and that is rated "A"
(or higher) according to ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's
Corporation, Inc. at the time as of which any investment or rollover therein is
made.
"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 and other assets accounted for as equipment by such Person in
its financial statements, all proceeds thereof, 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.
"Equity Offering" of any Person means any Public Equity Offering or any
private placement of any Capital Stock of such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"Event of Default" shall have the meaning specified in Section 6.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
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15
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement, dated March 16, 1998 between the
Company and ▇▇▇▇▇▇▇▇▇ & Company, Inc. to exchange Series D Notes for Series C
Notes.
"Expense Reimbursement Agreement" means an express reimbursement
agreement pursuant to which the Company will reimburse certain expenses of TEC,
including, without limitation, registration expenses under state and federal
securities laws, franchise taxes, directors' fees and litigation support
expenses.
"GAAP" means generally accepted accounting principles as in effect in
the United States on the Series A/B Issue Date applied on a basis consistent
with that used in the preparation of the audited financial statements of the
Company included in the Offering Circular.
"Gas Purchase Agreement" means the Interruptible Gas Sales Terms and
Conditions between the Company and TransTexas, as in effect on the Series A/B
Issue Date and as amended from time to time, provided that any such amendment is
not adverse to the holders of the Notes in any material respect.
"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.
"Guarantee" has the meaning set forth in Section 4.16 hereof.
"Guarantor" means each of the Company's future Subsidiaries that
becomes a guarantor of the Notes and the Company's obligations under this
Indenture in compliance with the provisions of this Indenture.
"Guarantor Senior Debt" means all Debt of a Guarantor created,
incurred, assumed or guaranteed by any Guarantor (and all renewals, extensions,
increases or refundings thereof) (including the principal of, interest on and
fees, premiums, expenses (including costs of collection), indemnities and other
amounts payable in connection with such Debt, and including any
Post-Commencement Amounts), unless the instrument governing such Debt expressly
provides that such Debt is not senior or superior in right of payment to the
Guarantee. Notwithstanding the foregoing, Guarantor Senior Debt does not include
any Debt of the Guarantor to the Company or any Subsidiary or any Unrestricted
Subsidiary.
"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.
"Hydrocarbons" means oil, natural gas, condensate, and natural gas
liquids.
"Incur" 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.
"Insurance Proceeds" means the interest in and to all proceeds (net of
costs of collection, including 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, TARC, TransTexas, or any Guarantor in connection with any assets
thereof,
8
16
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 assets.
"Intercompany Loan Redemption" means the redemption by the Company of
all or a portion of the principal amount then outstanding under the TARC
Intercompany Loan together with all accrued and unpaid interest, if any, to and
including the redemption date.
"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 feedstocks, refined products, chemicals
and catalysts, other supplies and storeroom items and similar items accounted
for as inventory by the Company on its financial statements, all proceeds
thereof, 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.
"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 if 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.
"Junior Security" means any Qualified Capital Stock and any Debt of the
Company or a Guarantor, as applicable, that is subordinated in right of payment
to the Notes or the Guarantees, as applicable, and has no scheduled installment
of principal due, by redemption, sinking fund payment or otherwise, on or prior
to the Stated Maturity of the Notes.
"Legal Holiday" shall have the meaning provided in Section 13.7.
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17
"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).
"Liquidated Damages" has the meaning provided in the registration
rights agreement relating to the Notes.
"Material Subsidiary" means any Subsidiary of the Company which, as of
the relevant date of determination, would be a "significant subsidiary" as
defined in Reg. ss. 230.405 promulgated pursuant to the Securities Act as in
effect on the Series A/B Issue Date, assuming the Company is the "registrant"
referred to in such definition, except that the 10% amounts referred to in such
definition shall be deemed to be 5%.
"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, Change of Control Payment Date,
Purchase Date or by declaration of acceleration, call for redemption or
otherwise.
"Mechanical Completion" means with respect to the Capital Improvement
Program, Phase I, Phase II or any specified unit or component thereof,
sufficient completion of the construction of the Capital Improvement Program,
Phase I, Phase II or any specified unit or component, as the case may be, in
accordance with the Plans, so that the Capital Improvement Program, Phase I,
Phase II or such unit or component, as the case may be, can be operated for its
intended purpose.
"Naphtha Pretreater" means the naphtha pretreater being constructed as
part of the Capital Improvement Program.
"Net Cash Proceeds" means, with respect to any Asset Sale of any
Person, an amount equal to the cash proceeds received (including any cash
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise, but only as and when received, and
excluding any other consideration until such time as such consideration is
converted into cash) therefrom, in each case net of all legal, title and
recording tax expenses, commissions and other fees and expenses incurred, and
all federal, state or local taxes required to be accrued as a liability as a
consequence of such Asset Sale, and in each case net of all Debt secured by such
assets, in accordance with the terms of any Lien upon or with respect to such
assets, or which must, by its terms or in order to obtain a necessary consent to
such Asset Sale to prevent a default or event of default under Senior Debt or by
applicable law, be repaid out of the proceeds from such Asset Sale and that is
actually so repaid.
"Net Debt" of a Person means such Person's outstanding Debt to the
extent recorded in accordance with GAAP, less cash and Cash Equivalents of such
Person, in each case as measured on a consolidated basis and as of the last day
of the measuring period.
"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,
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18
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,
insofar as such payments or expenses are incident to such exchange, exercise,
conversion, or surrender).
"Net Working Capital" of any Person means (i) all current assets of
such Person and its consolidated Subsidiaries, minus (ii) all current
liabilities of such Person and its consolidated Subsidiaries other than the
current portion of long term Debt, each item to be determined in conformity with
GAAP.
"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 105 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.
"NNM" means the Nasdaq National Market.
"Non-Recourse Debt" of any Accounts Receivable Subsidiary means Debt of
such Accounts Receivable Subsidiary that (a) is not guaranteed by the Company or
any of its Subsidiaries (other than a guaranty by the Company limited in
recourse to the stock of the Accounts Receivable Subsidiary), (b) is not
recourse to and does not obligate the Company or any of its Subsidiaries (other
than as described in clause (a) above), and (c) does not subject any assets of
the Company (other than Capital Stock of such Accounts Receivable Subsidiary) or
any of its Subsidiaries, to the payment thereof.
"Noteholder" means the Person in whose name a Note is registered on the
Registrar's book.
"Note Redemption" means a redemption of Notes by the Company pursuant
to the redemption provisions of this Indenture.
"Note Repurchase" means a purchase of Notes by the Company, other than
pursuant to a Note Redemption or a Change of Control Offer; provided that all
Notes purchased are delivered to the Trustee for cancellation promptly upon
their receipt by the Company.
"Notes" means the 16% Series C Senior Subordinated Notes due 2003 and
the 16% Series D Senior Subordinated Notes due 2003, in each case as
supplemented from time to time in accordance with the terms hereof, issued under
this Indenture; provided, however, that at any time after, and for so long as,
the Requisite Percentage Amendment is in effect, in determining whether the
Holders of the required Value of Notes have concurred in any direction,
amendment, supplement, waiver or consent, the definition of Notes shall include
the Series A/B Notes.
"NYSE" means the New York Stock Exchange.
"Obligation" means any principal, premium, interest, penalties, fees,
reimbursements, damages, indemnification and other liabilities relating to
obligations of the Company or any Guarantor under the Notes
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19
or the Indenture, including any liquidated damages pursuant to the registration
rights agreement relating to the Notes.
"Offer Price" shall have the meaning specified in Section 4.14.
"Offer to Purchase" means any offer made by the Company to Holders of
the Securities required by Section 4.14."
"Offering Circular" means the offering circular dated as of March 6,
1998 pursuant to which the Notes were offered.
"Office Leases" means the existing leases of office space at ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Officer" means, with respect to the Company, the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Treasurer, the Controller, or the Secretary of the
Company.
"Officers' Certificate" means, with respect to the Company, a
certificate signed by two Officers or by an Officer and an Assistant Secretary
of the Company and otherwise complying with the requirements of Sections 13.4
and 13.5.
"Old TARC Warrants" means the Common Stock Purchase Warrants of the
Company issued on February 23, 1995.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee complying with the requirements of Sections
13.4 and 13.5. Unless otherwise required by the Trustee, the counsel may be
outside counsel to the Company.
"Pari Passu Debt" means any other Debt of the Company that specifically
provides that such Indebtedness is to rank pari passu with the Notes in right of
payment.
"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 TARC Entities 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) purchases of Cash Equivalents; (iii) Investments by the
Company or its wholly owned Subsidiaries in wholly owned Subsidiaries of the
Company
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that are engaged in a Related Business; (iv) Swap Obligations; (v) the receipt
of Capital Stock in lieu of cash in connection with the settlement of
litigation; (vi) advances to officers and employees in connection with the
performance of their duties in the ordinary course of business in an amount not
to exceed $3 million in the aggregate outstanding at any time; (vii) margin
deposits in connection with Permitted Hedging Transactions; (viii) an Investment
in one or more Unrestricted Subsidiaries of the Company in an aggregate amount
not in excess of $10,000,000 since the Series A/B Issue Date (net of returns on
investment) plus the assets comprising the CATOFIN(R) Unit owned by the Company
as of the date hereof, less the amount of any Unrestricted Non-Recourse Debt
outstanding of the Company or any of its Subsidiaries; (ix) deposits permitted
by the definition of Permitted Liens or any extension, renewal, or replacement
of any of them, (x) Investments in Accounts Receivables Notes by TARC in an
Accounts Receivable Subsidiary in amounts not to exceed the greater of $20
million or 20% of the TARC Borrowing Base at any one time (xi) Investments by
the Company in a reincorporation subsidiary in connection with the initial
capitalization thereof and not to exceed $1,000 since the Series A/B Issue Date,
(xii) Investments by the Company or any of its wholly owned Subsidiaries in an
aggregate amount not to exceed $250,000 since the Series A/B Issue Date, for the
purpose of facilitating a redemption, repurchase or other retirement for value
of the Old TARC Warrants or the conversion of the Old TARC Warrants into the
right to receive cash, (xiii) a guaranty by a Subsidiary of the Company
permitted under clause (h) of Section 4.11; (xiv) deposits permitted by the
definition of "Permitted Liens" or any extension, renewal, or replacement of any
of them; (xv) other Investments not in excess of $5 million at any time
outstanding, (xvi) loans made (X) to officers, directors and employees of the
Company or any of its Subsidiaries approved by the applicable Board of Directors
(or by an authorized officer), the proceeds of which are used solely to purchase
stock or to exercise stock options received pursuant to an employee stock option
plan or other incentive plan, in a principal amount not to exceed the purchase
price of such stock or the exercise price of such stock options, as applicable
and (Y) to refinance loans, together with accrued interest thereon made pursuant
to this clause, in each case not in excess of $3 million in the aggregate
outstanding at any one time and (xvii) Investments in money market mutual or
similar funds having assets in excess of $100,000,000.
"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 the Company or any of 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 the Company or any of its Subsidiaries in
accordance with GAAP; (c) deposits of cash or Cash Equivalents to secure (i) the
performance of bids, trade contracts (other than borrowed money), leases,
statutory obligations, surety bonds, performance bonds, and other obligations of
a like nature incurred in the ordinary course of business (or to secure
reimbursement obligations or letters of credit issued to secure such performance
or other obligations) in an aggregate amount outstanding at any one time not in
excess of $5 million or (ii) appeal or supersedeas bonds (or to secure
reimbursement obligations or letters of credit in support of such bonds); (d)
easements, servitudes, rights-of-way, zoning, similar restrictions and other
similar encumbrances or title defects incurred in the ordinary course of
business which, in the aggregate, are not material in amount and which do not,
in any case, materially detract from the value of the property subject thereto
(as such property is used by any of the TARC Entities) or materially interfere
with the ordinary conduct of the business of any of the TARC Entities including
without limitation, any easement or servitude granted in connection with the
financing of the Storage Assets; (e) Liens arising by operation of law in
connection with judgments, only to the extent, for an amount and for a period
not resulting in an Event of Default with respect thereto; (f) Liens securing
Debt or other obligations not in
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excess of $3 million; (g) 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; (h) Liens on Equipment, Receivables and Inventory; (i) Liens on the
assets of any entity existing at the time such assets are acquired by any of the
TARC Entities, whether by merger, consolidation, purchase of assets or otherwise
so long as such Liens (i) are not created, incurred or assumed in contemplation
of such assets being acquired by any of the TARC Entities and (ii) do not extend
to any other assets of any of the TARC Entities; (j) Liens (including extensions
and renewals thereof) on real or personal property, acquired after the Series
A/B Issue Date ("New Property"); provided, however, that (i) such Lien is
created solely for the purpose of securing Debt Incurred to finance the cost
(including the cost of improvement or construction) of the item of New 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
and (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;
(k) leases or subleases granted to others that do not materially interfere with
the ordinary course of business of any of the TARC Entities, taken as a whole;
(l) Liens on the assets of one of the TARC Entities in favor of another TARC
Entity; (m) Liens securing reimbursement obligations with respect to letters of
credit that encumber documents relating to such letters of credit and the
products and proceeds thereof; provided, that, such reimbursement obligations
are not matured for a period of over 60 days; (n) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (o) Liens encumbering
customary initial deposits and margin deposits securing Swap Obligations or
Permitted Hedging Transactions; (p) Liens on cash deposits to secure
reimbursement obligations with respect to letters of credit after the Delayed
Coking Unit is completed; (q) Liens that secure Unrestricted Non-Recourse Debt;
provided, however, that at the time of incurrence the aggregate fair market
value of the assets securing such Lien (exclusive of the stock of the applicable
Unrestricted Subsidiary) shall not exceed the amount of allowed Unrestricted
Non-Recourse Debt of the Company; (r) Liens on the proceeds of any property
subject to a Permitted Lien and Liens on the proceeds of any Debt Incurred in
accordance with the provisions hereof, or on deposit accounts containing any
such proceeds; (s) Liens imposed in connection with Debt incurred pursuant to
clause (f) of Section 4.11; provided, that such liens, if not Permitted Liens,
do not extend to property other than the Storage Assets, the proceeds of
financing related to the Storage Assets or deposit accounts containing such
proceeds; and (t) any extension, renewal or replacement of the Liens created
pursuant to any of clauses (a) through (g), (i) through (s) or (u) provided that
such Liens would have otherwise been permitted under such clauses, and provided
further that the Liens, permitted by this clause (t) do not secure any
additional Debt or encumber any additional property; (u) Liens that secure
Senior Debt; and (v) Liens on any property of the Company (or any agreement to
grant such Liens) securing the Series A/B Notes or the Notes.
"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 Registration Statement on
Form S-4, as amended, of TEC under the heading "Business of TARC--Capital
Improvement Program."
"Phase I Completion Date" means the date on which the Construction
Supervisor issues a written notice (the "Phase I Completion Notice") to the
Company and the Disbursement Agent certifying that (a) the process units and
supporting facilities included in the definition of "Phase I" have reached
Mechanical
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Completion in accordance with the Plans, and (b) for a period of at least 15
consecutive days, the Company's refinery has sustained (i) the successful
performance of the Delayed Coking Unit, the HDS Unit and the Sulfur Recovery
System, (ii) an average feedstock throughput level of at least 150,000 barrels
per day, and (iii) no net production of vacuum tower bottoms when using as input
a combined feedstock slate with an average API Gravity of 22 degrees or less.
"Phase II" has the meaning given to it in the Registration Statement on
Form S-4, as amended, of TEC under the heading "Business of TARC--Capital
Improvement Program."
"Phase II Completion Date" means the date on which the Construction
Supervisor issues a written notice (the "Phase II Completion Notice") to the
Company and the Disbursement Agent certifying that (a) the process units and
supporting facilities included in the definition of "Phase II" have reached
Mechanical Completion in accordance with the Plans, and (b) for a period of at
least 72 uninterrupted hours, the Company's refinery has sustained (i) the
successful performance of all of the Phase I facilities plus the Fluid Catalytic
Cracking (FCC) Unit, the FCC Flue Gas Scrubber and the Alkylation Unit, (ii) an
average feedstock throughput level of at least 180,000 barrels per day, and
(iii) average production yields (measured as the liquid volume percent of
feedstock throughput) of refined products with a specific gravity of gasoline or
lighter of at least 40% and of middle distillates or lighter of at least 70%,
when using a combined Crude Unit feedstock slate with an average API Gravity of
22 degrees or less.
"Plans" means (a) the plans and specifications prepared by or on behalf
of the Company as used in the Disbursement Agreement, which describe and show
the proposed expansion and modification of the Company's refinery and (b) a
budget prepared by or on behalf of the Company as used in the Disbursement
Agreement.
"Post-Commencement Amounts" means all interest and fees accrued or
accruing after the commencement of any proceeding initiated under any Bankruptcy
Law in accordance with and at the contract rate (including, without limitation,
any non-usurious rate applicable upon default) and all premiums, expenses
(including costs of collection), indemnities and other amounts that would have
accrued or been incurred after the commencement of any such proceeding in any
case as specified in any agreement or instrument creating, evidencing, or
governing any Senior Debt, whether or not, pursuant to applicable law or
otherwise, the claim for such interest, fees, premiums, expenses, indemnities or
other amounts is allowed and non-avoidable as a claim in such proceeding.
"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.
"principal amount" when used with respect to a Note means the principal
amount of such Note as indicated on the face of such Note.
"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.
"Public Equity Offering" means an underwritten public offering by a
nationally recognized member of the National Association of Securities Dealers
of Qualified Capital Stock of any Person pursuant to an effective registration
statement filed with the SEC pursuant to the Securities Act.
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"Publicly Traded Stock" means, with respect to any Person, Capital
Stock of such Person that is registered under Section 12 of the Exchange Act and
actively traded on the New York Stock Exchange or American Stock Exchange or
quoted in the National Association of Securities Dealers Automated Quotation
System (National Market System).
"QIB" shall mean "qualified institutional buyer" as defined in Rule
144A.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Rating Agency" means Standard & Poor's Ratings Group (or any successor
thereto) and ▇▇▇▇▇'▇ Investors Service, Inc. (or any successor thereto) or, if
either of them shall have ceased to be a "nationally recognized statistical
rating organization" (as defined in Rule 436 under the Act) or shall have ceased
to make publicly available a rating on any outstanding securities of any company
engaged primarily in the oil and gas business, such other organization or
organizations, as the case may be, then making publicly available a rating on
the Notes as is selected by the Company.
"Receivables" means and includes, as to any Person, any and all of such
Person's now owned or hereafter acquired "accounts" as such term is defined in
Article 9 of the Uniform Commercial Code in the State of New York, all products
and proceeds thereof, and all books, records, ledger cards, files,
correspondence, and computer files, tapes, disks or software that at any time
evidence or contain information relating to the foregoing.
"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 forms 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
forms 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.
"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 Capital
Stock of the Company pledged to the TEC Indenture Trustee under the TEC
Indenture, as in effect on the Series A/B Issue Date and as amended from time to
time, provided that any such amendment is not materially adverse to the holders
of the Notes.
"Related Business" means the business of (i) processing, blending,
terminalling, storing, marketing (other than through operating retail gasoline
stations), 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
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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 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).
"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 the Notes required to bear the legends set
forth in Exhibit A hereto.
"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, 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 Pari
Passu Debt or 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 Pari Passu Debt or
Subordinated Debt; provided, however, that the term "Restricted Payment" does
not include (i) any dividend, distribution, or other payment on shares of
Capital Stock of an issuer solely in shares of Qualified Capital Stock of such
issuer that is at least as junior in ranking as the Capital Stock on which such
dividend, distribution, or other payment is to be made, (ii) any dividend,
distribution, or other payment to the Company from any of its Subsidiaries,
(iii) any defeasance, redemption, repurchase, or other acquisition or retirement
for value, in whole or in part, of any Pari Passu Debt or Subordinated Debt of
such Person payable solely in shares of Qualified Capital Stock of such Person,
(iv) any payments or distributions made pursuant to and in accordance with the
Services Agreement, the Expense Reimbursement Agreement, the Office Leases, the
Transfer Agreement or the Tax Allocation Agreement, (v) any redemption,
repurchase or other retirement for value of the Old TARC Warrants by the
Company, including any premium paid thereon, (vi) 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 (o) of the covenant described herein under the heading "Limitation on the
Incurrences of Additional Debt and Issuances of Disqualified Capital Stock,"
(vii) the purchase by the Company of shares of Capital Stock of the Company,
TransTexas or TTXD in connection with each of its employee benefit plans,
including without limitation any employee stock ownership plans or any employee
stock option plans, in an aggregate amount not to exceed 7% of the aggregate
market value of the voting stock held by nonaffiliates of the issuer measured
from the date of the first such purchase, (viii) distributions of common stock
of TransTexas to TEC, and (ix) any dividend or other distribution on the Capital
Stock of any Subsidiary of the Company.
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"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 Series A/B 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.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Senior Debt" means, all Debt of the Company, including, without
limitation, the TARC Discount Notes, the TARC Mortgage Notes, the TARC Working
Capital Note and the TARC Intercompany Loan, now or hereafter created, incurred,
assumed or guaranteed by the Company (and all renewals, extensions or refundings
thereof or of any part thereof) (including the principal of, interest on and
fees, premiums, expenses (including costs of collection), indemnities and other
amounts payable in connection with such Indebtedness, and including
Post-Commencement Amounts), unless the instrument governing such Debt expressly
provides that such Debt is not senior or superior in right of payment to the
Notes. Notwithstanding the foregoing, Senior Debt of the Company shall not
include (i) Debt evidenced by the Series A/B Notes or the Notes, (ii) Debt of
the Company to any Subsidiary of the Company or to any Unrestricted Subsidiary
of the Company, or (iii) any amounts payable or other Debt to trade creditors
created, incurred, assumed or guaranteed by the Company or any Subsidiary of the
Company in the ordinary course of business in connection with obtaining goods or
services.
"Series A/B Guarantees" means those subsidiary guarantees of the Series
A/B Notes issued pursuant to the Series A/B Indenture.
"Series A/B Indenture" means the Indenture dated as of December 30,
1997 between the Company and First Union National Bank, as trustee, providing
for the issuance of the Series A/B Notes, as such may be amended and
supplemented from time to time.
"Series A/B Issue Date" means the date on which the Series A/B Notes
were originally issued under the Series A/B Indenture, as such may be amended or
supplemented from time to time.
"Series A/B Notes" means the Company's 16% Senior Subordinated Notes
due 2003 issued pursuant to the Series A/B Indenture.
"Series C Notes" means the Company's 16% Series C Senior Subordinated
Notes due 2003 issued pursuant to the Indenture.
"Series D Notes" means the Company's 16% Series D Senior Subordinated
Notes due 2003, issued in exchange for the Series C Notes pursuant to the
Indenture.
"Services Agreement" means the Services Agreement among TNGC Holdings
and its Subsidiaries, as in effect on the Series A/B Issue Date and as amended
from time to time, provided that any such amendment is not materially adverse to
the holders of the Notes.
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"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 June 30,
2003.
"Storage Assets" means the following assets existing or under
construction in or near the Company's refinery: (i) the Prospect Road tank farm
and other tanks; (ii) certain dock improvements; (iii) the dock vapor recovery
system; (iv) the coke handling system; (v) the refinery waste water treatment
facility; (vi) tankage for liquefied petroleum gas and (vii) the assets adjacent
to the refinery purchased on September 19, 1997.
"Subordinated Debt" means Debt of any Person 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" with respect to any Person, means (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;
provided, however, that "Subsidiary" shall not include (i) for the purposes of
the Indenture provisions "Subsidiary Guarantees," and "Limitation on
Transactions with Related Persons" a joint venture an investment in which would
constitute a Permitted Investment, provided that, for purposes of the covenant
described herein under the heading "Limitation on Transactions with Related
Persons," such investment is not with a Related Person other than solely because
the party engaging in such transaction has the ability to control the Related
Person under the definition of "Control" contained within the definition of
Related Person or (ii) any Unrestricted Subsidiary of such Person.
"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 that is 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 rate fluctuations.
"TARC" means TransAmerican Refining Corporation, a Texas corporation,
and any successor corporation pursuant to the terms of the provision described
under Article V.
"TARC 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
as of
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a specific date, the Company may utilize, to the extent reasonable, the most
recent available information for purposes of calculating the TARC Borrowing
Base.
"TARC Discount Notes" means the Guaranteed First Mortgage Discount
Notes due 2002 issued by TARC and guaranteed by TEC.
"TARC Entities" means TARC and each of its Subsidiaries.
"TARC Intercompany Loan" means the senior secured promissory note from
the Company to TEC in the fully accreted principal amount of $920,000,000 upon
substantially the terms described in the Registration Statement on Form S-4, as
amended, of TEC under the heading "Description of Existing Indebtedness--TARC
Intercompany Loan."
"TARC Mortgage Notes" means the Guaranteed First Mortgage Notes due
2002 issued by TARC and guaranteed by TEC.
"TARC Working Capital Note" means the promissory note from the Company
to TEC dated as of July 31, 1997.
"Tax Allocation Agreement" means the Tax Allocation Agreement, dated as
of August 24, 1993, among TNGC Holdings Corporation, the Company, TEC and other
subsidiaries of TNGC Holdings Corporation as in effect on the Series A/B Issue
Date and as amended from time to time, provided that any such amendment is not
materially adverse to the holders of the Notes.
"TEC" means TransAmerican Energy Corporation, a Delaware corporation.
"TEC Indenture" means the indenture, dated as of June 13, 1997, by and
between TEC and Firstar Bank of Minnesota, N.A., as trustee, relating to the TEC
Notes.
"TEC Indenture Trustee" means the trustee under TEC Indenture.
"TEC Notes" means TEC's 11 1/2% Senior Secured Notes due 2002 and 13%
Senior Secured Discount Notes due 2002, issued pursuant to the TEC Indenture.
"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.
"Trading Day" means any day on which the securities in question are
quoted on the NYSE, or if such securities are not approved for listing on the
NYSE, on the principal national securities market or exchange on which such
securities are listed or admitted, or if not listed or admitted for trading on
any national securities market or exchange, on the NNM.
"TransAmerican" means TransAmerican Natural Gas Corporation, a Texas
corporation.
"Transfer Agreement" means the Transfer Agreement, dated as of August
24, 1993, among TransAmerican, TransTexas Transmission Corporation, and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇, as in effect on the Series A/B Issue Date and as amended from time to
time, provided that any such amendment is not materially adverse to the holders
of the Notes.
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"TransTexas" means TransTexas Gas Corporation, a Delaware corporation.
"Trust Officer" means any officer within the corporate trust department
(or any successor group) of the Trustee including any vice president, assistant
vice president, secretary, assistant secretary 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.
"Trustee" means the party named as such in this Indenture until a
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"TTXD" means TransTexas Drilling Services, Inc., a Delaware corporation
or a newly formed corporation which is initially a wholly owned Subsidiary of
TransTexas formed for the purpose of receiving certain drilling assets of
TransTexas.
"Units" means the Units consisting of $25,000,000 aggregate principal
amount of Notes and 25,000 Warrants, issued by the Company. Each Unit consists
of one Note in the principal amount of $1000 and one Warrant to purchase
13.344257 shares of the Company's common stock, par value $.01 per share.
"Unrestricted Non-Recourse Debt" of the Company or any of its
Subsidiaries means (i) Debt of such Person that is secured solely (other than
with respect to clause (ii) below) by a Lien upon the stock of an Unrestricted
Subsidiary of such Person and as to which there is no recourse (other than with
respect to clause (ii) below) against such Person or any of its assets other
than against such stock (and the dollar amount of any Debt of such Person as
described in this clause (i) shall be deemed to be zero for purposes of all
other provisions of the Indenture) and (ii) guarantees of the Debt of
Unrestricted Subsidiaries of such Person; provided, that the aggregate of all
Debt of such Person Incurred and outstanding pursuant to clause (ii) of this
definition, together with all Permitted Investments (net of any return on such
Investment) in Unrestricted Subsidiaries of such Person, does not exceed 20% of
TARC's Consolidated EBITDA since the Phase II Completion Date in the case of
TARC plus in the case of clause (ii) of this definition of Unrestricted Non-
Recourse Debt, Restricted Payments permitted to be made pursuant to Section 4.3.
"Unrestricted Subsidiary" of any Person means any other Person ("Other
Person") that would, but for this definition of "Unrestricted Subsidiary" be a
Subsidiary of such Person organized or acquired after the Series A/B Issue Date
as to which all of the following conditions apply: (i) neither such Person nor
any of its other Subsidiaries provides credit support of any Debt of such Other
Person (including any undertaking, agreement or instrument evidencing such
Debt), other than Unrestricted Non-Recourse Debt; (ii) such Other Person is not
liable, directly or indirectly, with respect to any Debt other than Unrestricted
Subsidiary Debt; (iii) neither such Person nor any of its Subsidiaries has made
an Investment in such Other Person unless such Investment was permitted by the
provisions described under Section 4.3 and (iv) the Board of Directors of such
Person, as provided below, shall have designated such Other Person to be an
Unrestricted Subsidiary on or prior to the date of organization or acquisition
of such Other Person. Any such designation by the Board of Directors of such
Person shall be evidenced to the Trustee by delivering to the Trustee a
resolution thereof giving effect to such designation and an Officers'
Certificate certifying that such designation complies with the foregoing
conditions. The Board of Directors of any Person may designate any Unrestricted
Subsidiary of such Person as a Subsidiary of such Person; provided, that, (a) if
the Unrestricted Subsidiary has any Debt outstanding or is otherwise liable for
any Debt or has a negative Net Worth, then immediately after giving pro forma
effect to such designation, such Person could incur at least $1.00 of additional
Debt
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pursuant to the provisions described under Section 4.11 (assuming, for purposes
of this calculation, that each dollar of negative Net Worth is equal to one
dollar of Debt), (b) all Debt of such Unrestricted Subsidiary shall be deemed to
be incurred by a Subsidiary of the Person on the date such Unrestricted
Subsidiary becomes a Subsidiary, and (c) no Default or Event of Default would
occur or be continuing after giving effect to such designation. Any subsidiary
of an Unrestricted Subsidiary shall be an Unrestricted Subsidiary for purposes
of the Indenture.
"Unrestricted Subsidiary Debt" means, as to any Unrestricted Subsidiary
of any Person, Debt of such Unrestricted Subsidiary (i) as to which neither such
Person nor any Subsidiary of such Person is directly or indirectly liable (by
virtue of such Person or any such Subsidiary being the primary obligor on,
guarantor of, or otherwise liable in any respect to, such Debt), unless such
liability constitutes Unrestricted Non-Recourse Debt and (ii) which, upon the
occurrence of a default with respect thereto, does not result in, or permit any
holder (other than the Company or any Subsidiary of the Company) of any Debt of
such Person or any Subsidiary of such Person to declare, a default on such Debt
of such Person or any Subsidiary of such Person or cause the payment thereof to
be accelerated or payable prior to its stated maturity, unless, in the case of
this clause (ii), such Debt constitutes Unrestricted Non-Recourse Debt.
"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 of payment shall be legal tender for the payment of
public and private debts.
"Value" means, as of any date, the outstanding principal amount of the
Notes, plus all accrued and unpaid interest thereon.
"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.
"Warrant" means any one of the warrants to purchase shares of Common
Stock issued by the Company pursuant to the Warrant Agreement.
"Warrant Agent" means First Union National Bank, in its capacity as
Warrant Agent under the Warrant Agreement, and any successor thereto.
"Warrant Agreement" means the Warrant Agreement, dated March 16, 1998,
by and between the Company and the Warrant Agent.
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:
"Commission" means the SEC.
"indenture securities" means the Notes.
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"indenture securityholder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"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 SEC rule and not
otherwise defined herein have the meanings assigned to them thereby.
Section 1.3 Rules of Construction. Unless the context otherwise
requires:
(l) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accor dance 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.
ARTICLE II
THE NOTES
Section 2.1 Form and Dating. Subject to Section 2.15, 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.
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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 hereof.
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 or the Units, as the case may be, for the Company by manual or
facsimile signature. The Company's seal shall be impressed, affixed, imprinted
or reproduced on the Notes or Units, as the case may be, and may be in facsimile
form.
If an Officer whose signature is on a Note or Unit, as the case may be,
was an Officer at the time of such execution but no longer holds that office at
the time the Trustee authenticates the Note or Unit, as the case may be, the
Note or Unit, as the case may be, shall be valid nevertheless and the Company
shall nevertheless be bound by the terms of the Notes or Units, as the case may
be and this Indenture.
A Note or Warrant, as the case may be, shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Note or Unit, as the case may be, but such signature shall
be conclusive evidence that the Note or Unit, as the case may be, has been
authenticated pursuant to the terms of this Indenture.
The Trustee shall authenticate Notes or Units, as the case may be, for
original issue in the aggregate principal amount of $25,000,000, upon a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of Notes or Units, as the case may be, to
be authenticated and the date on which the Notes or Units, as the case may be,
are to be authenticated. The aggregate principal amount of Notes or Units, as
the case may be, outstanding at any time may not exceed $25,000,000 in aggregate
principal amount, 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 or Units, as the case may be, in substitution of Notes or
Units, as the case may be, originally issued to reflect any name change of the
Company.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes or Units, as the case may be. Unless otherwise
provided in the appointment, an authenticating agent may authenticate Notes or
Units, as the case may be, 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 of $1,000 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
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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 13.2. 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 and Sections 4.14 and 4.16, 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.
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 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.
(a) Transfer and Exchange of Definitive Notes. 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 trans actions are met; provided, that the Definitive
Notes so presented (A) 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) in the case
of a Restricted Note, such request shall be accompanied by the following
additional documents:
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(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 C 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 C 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 C 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.
(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 C 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
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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 C
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 C 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 C attached hereto) and, if the Trustee deems it
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
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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, 4.14, 4.21, 4.24, Article XI and 9.5 of this Indenture).
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 day of any selection of Notes for redemption under Section 3.2
hereof and ending at the close of business on the day of selection; 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 C Notes for Series D Notes. The Series C Notes
may be exchanged for Series D 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 D Notes, the transactions
contemplated by the Exchange Offer have been consummated; and
(B) the principal amount of Series C Notes properly tendered in
the Exchange Offer that are represented by a Global Note and
the principal amount of Series C 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
Definitive Notes for Series D Notes shall be registered and
sent for each such Holder.
The Trustee, upon receipt of (i) such Officers' Certificate and (ii) an
Opinion of Counsel (x) to the effect that the Series D 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 relating to the Notes, shall authenticate
(A) a Global Note for Series D Notes in an
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aggregate principal amount equal to the aggregate principal amount of Series C
Notes represented by a Global Note indicated in such Officers' Certificate as
having been properly tendered and (B) Definitive Notes representing Series D
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 D
Notes is less than the principal amount at maturity of the Global Note for the
Series C Notes, the Trustee shall make an endorsement on such Global Note for
Series C Notes indicating a reduction in the principal amount at maturity
represented thereby.
The Trustee shall deliver such Definitive Notes for Series D Notes to
the Holders thereof as indicated in such Officers' Certificate.
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 Value 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
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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.
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 and, at the written direction of the Company, shall dispose of 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 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
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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.
(a) Except as permitted by subsections (b) or (c) 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 or Exhibit B
attached hereto, as applicable.
(b) Upon any sale or transfer of a Restricted Note (including any
Restricted Note represented by a Global Note) pursuant to Rule 144 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) or (k), as applicable,
hereof; 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 144, the Holder thereof
shall certify in writing to the Registrar that such request is being
made pursuant to Rule 144.
(c) The Company shall issue and the Trustee shall authenticate Series D
Notes in exchange for Series C Notes accepted for exchange in the Exchange
Offer. The Series D Notes shall not bear the legends required by subsection (a)
above unless the Holder of such Series D Notes is either (A) a broker-dealer who
purchased such Series D Notes directly from the Company to resell pursuant to
Rule 144A or any other available exemption under the Securities Act, (B) a
Person participating in the distribution of the Series D Notes or (C) a Person
who is an affiliate (as defined in Rule 144A) of the Company.
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Separation of Notes and Warrants. The Notes and the Warrants that
comprise the Units shall not be separately transferable until the earlier of (i)
one year from the Series A/B Issue Date, (ii) commencement of the Exchange Offer
and (iii) such other date as may be determined by ▇▇▇▇▇▇▇▇▇ & Company, Inc.
The Units and the beneficial interest in the Notes and the Warrants
that comprise the Units shall be evidenced only by one or more certificates in
substantially the form of Exhibit B hereto, the terms of which are incorporated
in and made a part of this Indenture. The terms of the Warrants are governed by
the Warrant Agreement and are subject to the terms and provisions contained
therein. If any Units are presented for registration of transfer or exchange in
accordance with the terms of this Indenture and the Warrant Agreement, or if the
Warrants evidenced thereby are exercised, the Company shall cause the Trustee,
the Registrar or the Warrant Agent, as appropriate, to issue certificates
evidencing the Notes and the Warrants (to the extent unexercised) in lieu of
such Units. In accordance with the Warrant Agreement, fractional Warrants will
not be issued upon separation of the Notes and Warrants, but in lieu thereof, a
cash adjustment will be paid.
The provisions of Section 2.1 through 2.14, to the extent applicable to
the Notes, shall also apply to the Notes evidenced by any Units.
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 Company may redeem at its election, at
any time on or after the Issue Date, any or all of the Notes in cash at the
applicable Redemption Prices specified in Paragraph 5 of the forms of Note
attached as Exhibit A hereto, set forth therein under the caption "Optional
Redemption," 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 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
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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 and/or the original issue
discount ceases to accrete 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 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 become due
and payable on the Redemption Date and at the
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Redemption Price, including accrued and unpaid interest; provided, however,
that 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. 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 date of redemption
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, and/or the original issue discount
will cease to accrete 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. 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, and/or the original issue discount
will cease to accrete on the Notes to be redeemed 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
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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 11:00 a.m. Houston, Texas 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, Liquidated Damages, if any, on the dates and in the manner required
under the registration rights agreement relating to the Notes.
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 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 13.2.
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 dividend or other distribution on shares of Capital Stock of the Company or
any Subsidiary of the Company or make any payment on account of the purchase,
redemption, or other acquisition or retirement for value of any such shares of
Capital Stock unless such dividends, distributions, or payments are made in
cash or Capital Stock or a combination thereof. In addition, 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 may make a
Restricted Payment if, at the time or 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 2.25 to 1; and
(b) the aggregate amount of all Restricted Payments made by
all of the TARC Entities, 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 Series A/B 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
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(taken as one accounting period) from the first full fiscal quarter that
commenced after the Series A/B 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 Series A/B 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;
and
provided, that nothing in this Section 4.3 shall 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 used or useful to the conduct of its business and the business of
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.
(b) Each of the Company and its Subsidiaries shall provide, or
shall cause to be provided, for itself and each of its Subsidiaries, insurance
(including appropriate self-insurance) against loss or damage of the kinds
that, in its reasonable, good faith opinion, are adequate and appropriate for
the conduct of its business and the business of such Subsidiaries in a prudent
manner, 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 is customary, in its reasonable, good faith
opinion, and adequate and
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appropriate for the conduct of its business and the business of its
Subsidiaries in a prudent manner for companies engaged in a similar business.
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 12.3) 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 ▇▇▇▇▇▇ does know of such a failure to comply or Default, the
certificate shall describe such failure or Default with particularity.
(b) The Company shall deliver to the Trustee within 105 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,
4.11 or 4.14.
(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.
(d) The Company shall deliver to the Trustee an Officers'
Certificate specifying any changes in the composition of the Board of Directors
of the Company or any of its Subsidiaries or of any amendment to the charter or
bylaws of the Company or any of its Subsidiaries. The Officers' Certificate
shall include a description in reasonable detail of such amendment or change
and an explanation why such amendment or change does not constitute a Default
or Event of Default.
Section 4.8 SEC Reports. The Company shall deliver to the Trustee and
each Holder, within 15 days after it files the same with the SEC, copies of all
reports and information (or copies of such portions of any of the foregoing as
the SEC may by rules and regulations prescribe), if any, which the Company is
required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange
Act. The Company shall include in all such reports and information a summary
of the status of the Company's Capital Improvement Program, including a
description of sources of funds available for the completion of the Capital
Improvements 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
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those of the Company required by the preceding paragraph. The Company shall
also comply with the other provisions of TIA Section 314(a).
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 of properties, assets or securities to such Related Person, (ii)
the purchase or lease of any property, assets or securities from such Related
Person, (iii) an Investment in such Related Person (excluding Investments
permitted to be made pursuant to clauses (iii), (vi), (viii), (x), (xi), (xii),
and (xvi) 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) permitted
Restricted Payments, including for this purpose the transactions 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) 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 Services Agreement, the Transfer Agreement,
the Tax Allocation Agreement, the Gas Purchase Agreement, the Expense
Reimbursement Agreement, the TARC Intercompany Loan and related security
documents, and the Registration Rights Agreement (E) the lease of office space
to the Company or an Affiliate of the Company by TransAmerican or an Affiliate
of TransAmerican, provided that payments thereunder do not exceed in the
aggregate $200,000 per year, (F) any employee compensation arrangement in an
amount which together with the amount of all other cash compensation paid to
such employee by the Company and its Subsidiaries does not provide for cash
compensation in excess of $5,000,000 in any fiscal year of the Company or any
Subsidiary and which has been approved by a majority of the Company's
Independent Directors and found in good faith by such directors to be in the
best interests of the Company or such Subsidiary, as the case may be, (G) loans
to the Company which are permitted to be Incurred pursuant to the terms of
Section 4.11; (H) the amounts payable by the TEC and its Subsidiaries to
Southeast Contractors for employee services provided to the Company not
exceeding the actual costs to Southeast Contractors of the employees, which
costs consist solely of payroll and employee benefits, plus related
administrative costs and an administrative fee, not exceeding $2,000,000 per
year in the aggregate; and (I) the Company and its Subsidiaries may pay a
management fee to TransAmerican in an amount not to exceed $2,500,000 per year.
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(b) Without limiting the foregoing, except for sales of accounts
receivable to an Accounts Receivable Subsidiary in accordance with Section
4.20, (i) 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
(i), (ii), (iv), (vii), (ix), (x) or (xi) of the proviso contained in the
definition of "Restricted Payments"), (C), (D), (E), or (G) of Section 4.10(a))
with an aggregate value in excess of $5,000,000, 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 (x) fair and reasonable to the Company or such Subsidiary, as
the case may be, and (y) 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 (ii)
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 (i), (ii),
(iv), (vii), (ix), (x) or (xi) of the proviso contained in the definition of
"Restricted Payments") (C), (D), (E) or (G) of Section 4.10(a)) with an
aggregate value in excess of $10,000,000, 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
"big 6 accounting firm" or a nationally recognized investment banking firm;
provided that such opinion shall not be necessary if approval of the Board of
Directors to such Related Person Transaction has been obtained after receipt of
bona fide bids of at least two other independent parties and such Related
Person Transaction is in the ordinary course of business.
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 Series A/B 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 Series A/B
Notes, the Notes, the Series A/B Guarantees and the Guarantees in an aggregate
principal amount not to exceed $200 million; (b) Debt evidenced by the TARC
Intercompany Loan and any other Debt at any time owing by any of the TARC
Entities to TEC in an aggregate outstanding principal amount, when added to the
then outstanding principal amount of the TARC Intercompany Loan and any other
Debt incurred pursuant to this clause (b) or pursuant to clause (o) below to
replace, extend, renew or refund Debt incurred pursuant to this clause (b), at
any one time outstanding not in excess of $920 million less any amount repaid
pursuant to paragraph (c) (i) of the covenant described herein under Section
4.14 hereof; (c) Subordinated Debt of the Company solely to any wholly owned
Subsidiary of the Company, or Debt of any wholly owned Subsidiary of the
Company solely to the Company or to any wholly owned Subsidiary of the Company;
(d) Debt of the Company outstanding at any time in an aggregate principal
amount not to exceed the greater of (x) $100 million or (y) the TARC Borrowing
Base, less, in each case, the amount of any Debt of an Accounts Receivable
Subsidiary (other than Debt owed to the Company); (e) Debt in an aggregate
principal amount not to exceed at any one time $50 million; (f) Debt secured by
the Storage Assets in an aggregate amount outstanding at any one time not to
exceed $115 million; (g) Debt secured by a Permitted Lien that meets the
requirements of clause (c), (g), (m), (o) and (r) of the definition of
"Permitted Liens," to the extent that such Liens would give rise to Debt under
clauses (i), (ii), or (iii) of the definition of "Debt;" (h) Any guaranty of
Debt incurred pursuant to clauses (d), (e), (g) or (n) hereof which guaranty
shall not be included in the determination of the amount of Debt which may be
Incurred pursuant to (d), (e), (g) or (n) hereof; (i) Swap Obligations of the
Company; (j) Unrestricted Non-Recourse Debt of the Company; (k) Debt evidenced
by the TARC Mortgage Notes; (l) letters of credit and reimbursement obligations
relating thereto to the extent collateralized by cash or Cash Equivalents; (m)
Debt evidenced by the TARC Discount Notes; (n) Debt of TARC or any of its
Subsidiaries owed to TEC which is loaned pursuant to terms of the fourth
paragraph of either of the covenants contained
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under the headings "--Excess Cash" and "--Additional Interest Excess Cash
Offer" under the TEC Indenture in the aggregate not in excess of $50 million;
(o) the Company may Incur Debt as an extension, renewal, replacement, or
refunding of any of the Debt permitted to be Incurred by clauses (b) or (q)
hereof, or this clause (o) (such Debt is collectively referred to as
"Refinancing Debt"), provided, that (1) the maximum principal amount 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 (o) may not exceed the lesser of (x) the principal amount of the
Debt being extended, renewed, replaced, or refunded plus Refinancing Fees or
(y) if such Debt being extended, renewed, replaced, or refunded was issued at
an original issue discount, the original issue price, plus amortization of the
original issue discount as of the time of the Incurrence of the Refinancing
Debt plus Refinancing Fees and (2) the Refinancing Debt shall rank with respect
to the Notes to an extent no less favorable in respect thereof to the Holders
than the Debt being refinanced; (p) Debt secured by Liens permitted pursuant to
clauses (h) and (j) of Permitted Liens, in an aggregate principal amount not to
exceed $35 million; (q) Debt of the Company Incurred in connection with the
acquisition, construction or improvement of a CATOFIN(R) Unit not in excess of
20% of the Company's Consolidated EBITDA accrued for the period (taken as one
accounting period) commencing with the first full fiscal quarter that commenced
after the Phase I Completion Date, to and including the fiscal quarter ended
immediately prior to the date of such calculation, provided, that, no such Debt
may be Incurred unless (i) the Phase II Completion Date has occurred or (ii)
the Construction Supervisor shall have provided the Trustee with written
certification that, based upon its bi-monthly evaluation of the Capital
Improvement Program, the amounts remaining in the disbursement accounts to
complete Phase II are sufficient to complete Phase II in accordance with the
Plans approved by the Construction Supervisor, and (r) Debt of the Company owed
to TEC that does not in the aggregate exceed $50 million principal amount
outstanding at any one time.
For the purpose of determining the amount of outstanding Debt that has
been Incurred pursuant to this covenant, there shall be included in each such
case the principal amount then outstanding of any Debt originally Incurred
pursuant to such clause and, after any refinancing or refunding of such Debt,
any outstanding Debt Incurred pursuant to clause (o) above so as to refinance
or refund such Debt Incurred pursuant to such clause and any subsequent
refinancings or refundings thereof.
Notwithstanding the foregoing provisions of this covenant, (a) the
Company may Incur Senior Debt and the Company may issue Disqualified Capital
Stock if, at the time such Senior 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 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 2.25 to l, and (b) the Company may
Incur Subordinated Debt if, at the time such Subordinated Debt is incurred, (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 and the application
of the proceeds therefrom to the extent used to reduce Debt, on a pro forma
basis, the Consolidated Fixed Charge Coverage Ratio of the Company for the
Reference Period is greater than 2.0 to I.
Debt Incurred and Disqualified Capital Stock issued by any Person that
is not a Subsidiary of the Company as the case may be, 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
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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 or one of its Subsidiaries.
For the purpose of determining compliance with this covenant, (A) if
an item of Debt meets the criteria of more than one of the types of Debt
described in the above clauses, 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
pay dividends or make other distributions on the Capital Stock of any
Subsidiary of the Company, except encumbrances and restrictions existing under
this Indenture and 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. Notwithstanding anything contained herein to the
contrary, the Company may not create an encumbrance or restriction on their
ability to pay premium, if any, principal of, or interest on, the TARC
Intercompany Loan.
Section 4.13 Liens. The Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, Incur, or suffer to
exist any Lien upon any of its respective property or assets, whether now owned
or hereafter acquired, 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 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. The
Company covenants to grant to the Trustee on behalf of the Holders a Lien on
the assets of the Company currently subject to a Lien in favor of TEC;
provided, that the Company is then permitted under the Series A/B Indenture to
grant such Lien and further provided that the Company shall not be required to
grant such Lien until the TARC Intercompany Loan has been paid in full and has
not been refinanced, refunded or replaced with the proceeds of Other Debt
("Other Debt"), which Other Debt has a lower cost of capital to TARC than the
TARC Intercompany Loan and the principal amount of such Other Debt (or, if such
Other Debt is issued with original issue discount, the original issue amount of
such Other Debt) is equal to or less than the original issue price of, plus
amortization of the original issue discount on, the TARC Intercompany Loan at
the time of the incurrence of such Other Debt.
Section 4.14 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its
Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or its Subsidiaries, as the case may be)
receives consideration at the time of such sale or other disposition
at least equal to the fair market value thereof (as determined in good
faith by the Company's Board of Directors and evidenced by a board
resolution in the case
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of any Asset Sales or series of related Asset Sales having a fair
market value of $15 million or more);
(ii) at least 85% of the proceeds received by the Company (or
its Subsidiaries, as the case may be) from each such Asset Sale
consists of (A) cash, (B) Cash Equivalents, (C) Publicly Traded Stock
or (D) any combination of the foregoing; provided, however, that (l)
the amount of (x) any liabilities (as shown on the Company's or such
Subsidiary's most recent balance sheet or in the notes thereto) of the
Company or such Subsidiary (other than liabilities that are by their
terms expressly subordinated to the Notes or any guarantee thereof)
that are assumed by the transferee of any such assets and (y) any
notes or other obligations received by the Company or any such
Subsidiary from such transferee that, within 90 days following the
closing of such sale or disposition, are converted by the Company or
such Subsidiary into cash (to the extent of the cash received), shall
be deemed to be cash for purposes of this provision and (2) the
aggregate fair market value (as determined in good faith by the Board
of Directors of the Company, evidenced by a board resolution) of all
consideration of the type specified in clause (C) above received by
the Company and its Subsidiaries from all Asset Sales after the Series
A/B Issue Date shall not exceed 15% of Consolidated Net Tangible
Assets at the time of such Asset Sale; and
(iii) the Net Cash Proceeds received by the Company (or its
Subsidiaries, as the case may be) from such Asset Sales are applied in
accordance with subsection (c) below.
(b) Notwithstanding the foregoing limitations on Asset Sales and
restrictions on the use of Net Cash Proceeds therefrom:
(A) The Company or any Guarantor may convey, sell, lease,
transfer, or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Company or any Guarantor;
(B) the Company and its Subsidiaries may engage in Asset Sales
in the ordinary course of business;
(C) the Company and its Subsidiaries may engage in Asset Sales
not otherwise permitted in clauses (A), (B) or (D) through (K) of this
sentence provided that the aggregate proceeds from all such Asset
Sales do not exceed $10 million in any twelve-month period;
(D) the Company and its Subsidiaries may engage in Asset Sales
pursuant to and in accordance with the provisions described under
Article V hereof;
(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 sell accounts
receivable to an Accounts Receivable Subsidiary in accordance with the
provisions described under Section 4.20;
(G) The Company and its Subsidiaries may convey, sell,
transfer or otherwise dispose of crude oil and refined products in the
ordinary course of business;
(H) The Company and its Subsidiaries may engage in Asset Sales
(a) the Net Cash Proceeds of which are used for (i) payment of cash
interest on the Series A/B Notes or the Notes or (ii) a one-time
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payment of cash interest on the TARC Intercompany Loan, (b) in
connection with the settlement of litigation or the payment of
judgments or (c) the Net Cash Proceeds of which are used in connection
with the settlement of litigation or for the payment of judgments;
provided, that the aggregate value of assets transferred pursuant to
clauses (b) and (c) above from and after the Series A/B Issue Date
does not exceed $25,000,000;
(I) The Company may transfer the Storage Assets in connection
with the financing thereof pursuant to clause (f) of the covenant
described herein under Section 4.11 hereof;
(J) The Company and its Subsidiaries may dispose of assets of
the Company or its Subsidiaries in exchange for capital assets that
(i) are for use in a Related Business and (ii) have an aggregate fair
market value which, when added to the fair market value of any cash,
Cash Equivalents or Publicly Traded Stock received by the Company or
any of its Subsidiaries in exchange for such capital assets, is equal
to or greater than the aggregate fair market value of the property and
assets being disposed of, provided, however, that (A) in no event may
the Company and its Subsidiaries, in any 12-month period, dispose of
assets pursuant to this paragraph having an aggregate fair market
value of in excess of $10 million;
(K) The Company may sell common stock of TransTexas to
TransTexas; and
(L) Unless otherwise required by the foregoing clauses (A)
through (K), the proceeds of any Asset Sale permitted thereby shall be
used by the Company or its Subsidiaries for purposes not otherwise
prohibited by the Indenture.
(c) The Company may, within 360 days following the receipt of Net Cash
Proceeds from any Asset Sale, apply an amount equal to such Net Cash Proceeds
to: (i) the repayment of Senior Debt of the Company or any Guarantor that
results in a permanent reduction in the principal amount of such Senior Debt in
an amount equal to the principal amount so repaid or (ii) make Capital
Expenditures for use in a Related Business or (iii) make cash payments in the
ordinary course of business that are not otherwise prohibited by the Indenture,
provided that the aggregate amount so used from and after the Series A/B Issue
Date does not exceed $20,000,000 (without duplication of amounts used for
Capital Expenditures in clause (ii) above).
If, upon completion of the 360-day period (the "Trigger Date"), an
amount equal to any portion of the Net Cash Proceeds of any Asset Sale shall
not have been applied by the Company as described in clauses (i), (ii) or (iii)
of the preceding paragraph and such amount together with an amount equal to any
remaining net cash proceeds from any prior Asset Sale (such aggregate
constituting "Excess Proceeds"), exceeds $10 million, then the Company shall
make an offer (the "Offer to Purchase") to purchase from all Holders of the
Notes, the Series A/B Notes and holders of any then outstanding Pari Passu Debt
required to be repurchased or repaid on a permanent basis in connection with an
Asset Sale, an aggregate principal amount of Notes, the Series A/B Notes and
any then outstanding Pari Passu Debt equal to such Excess Proceeds as follows:
(l) (i) the Company shall make an offer to purchase from all
Holders of the Notes in accordance with the procedures set forth in
the Indenture the maximum principal amount (expressed as a multiple of
$1000) of Notes that may be purchased out of an amount (the "Offer
Amount") equal to the product of such Excess Proceeds multiplied by a
fraction, the numerator of which is the outstanding principal amount
of the Notes and the denominator of which is the sum of the
outstanding principal amount of the Notes, the Series A/B Notes and
such Pari Passu Debt, if any and (ii) to the extent required by the
Series A/B Notes and such Pari Passu Debt and provided there is a
permanent reduction in the
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principal amount of such Series A/B Notes or Pari Passu Debt and a
corresponding permanent reduction in the Company's ability to incur
Pari Passu Debt or Subordinated Debt, the Company shall make an offer
to purchase the Series A/B Notes and such Pari Passu Debt (the "Pari
Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the
excess of the Excess Proceeds over the Offer Amount.
(2) The offer price for the Notes shall be payable in cash in
an amount equal to 100% of the principal amount of the Notes tendered
pursuant to an Offer to Purchase, plus accrued and unpaid interest, if
any, to the date such Offer to Purchase is consummated (the "Offer
Price"), in accordance with the procedures set forth in the Indenture.
To the extent that the aggregate Offer Price of the Notes tendered
pursuant to an Offer to Purchase is less than the Offer Amount
relating thereto or the aggregate amount of the Series A/B Notes or
Pari Passu Debt that is purchased or repaid pursuant to the Pari Passu
Offer is less than the Pari Passu Debt Amount (such shortfall
constituting a "Net Proceeds Deficiency"), the Company may use such
Net Proceeds Deficiency, or any portion thereof, for general corporate
purposes, subject to the "Limitation on Restricted Payments" covenant
set forth in Section 4.3.
(3) If the aggregate Offer Price of Notes validly tendered and
not withdrawn by Holders thereof exceeds the Offer Amount, Notes to be
purchased will be selected on a pro rata basis. Upon completion of an
Offer to Purchase and a Pari Passu Offer, the amount of Excess
Proceeds shall be reset to zero.
The Company, to the extent applicable and if required by law, will
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 any other federal
and state securities laws, rules and regulations which may then be applicable
to any offer by the Company to purchase the Notes at the option of the holders
pursuant to an Offer to Purchase.
It is expected that agreements with respect to Senior Debt the Company
may enter into would prohibit, and the TARC Intercompany Loan currently
prohibits, the repurchase of Debt subordinated to such Senior Debt, which would
include the Notes. Failure of the Company to repurchase the Notes validly
tendered to the Company pursuant to an Offer to Purchase would create an Event
of Default with respect to the Notes. In addition, the subordination provisions
of the Indenture prohibit, subject to certain conditions, the repurchase or
repayment of the Notes if there is a default under Senior Debt. As a result,
the Company may be prohibited from making payment pursuant to an Offer to
Purchase in connection with an Asset Sale.
Section 4.15 Waiver of Stay, Extension or Usury Laws. The
Company covenants (to the extent that it may lawfully do so) that it will 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 will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will 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
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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.
Section 4.16 Guarantee by Subsidiaries. All future Material
Subsidiaries and Subsidiaries that guarantee any pari passu Debt, Series A/B
Notes or Subordinated Debt of the Company or of any other Subsidiary of the
Company shall jointly and severally guarantee irrevocably and unconditionally
all principal, premium, if any, and interest on the Notes on a senior
subordinated unsecured basis (a "Guarantee"). The Company covenants to cause
each of such Subsidiaries promptly to execute and deliver to the Trustee a
Guarantee pursuant to which such Subsidiary will guarantee payment of the Notes
and the performance of the Company's other obligations under this Indenture to
the extent set forth in this Section 4.16.
The liability of each Guarantor under its Guarantee will be limited to
the amount of its Adjusted Net Assets.
Section 4.17 Intentionally Omitted.
Section 4.18 Limitations on Line of Business. The Company shall
not directly or indirectly engage to any substantial extent in any line or
lines of business activity other than a Related Business and, such other
business activities as are reasonably related or incidental thereto.
Section 4.19 Separate Existence and Formalities. The Company
hereby covenants and agrees that:
(a) it will maintain procedures designed to prevent commingling of
the funds of the Company, its Subsidiaries' and TransAmerican, other than
pursuant to the Services Agreement;
(b) all actions taken by the Company and its Subsidiaries will 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 will maintain separate
records and books of account and such records and books of account shall be
separate from those of TransAmerican in each case in accordance with generally
accepted accounting principles;
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(d) the Company and its Subsidiaries will 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 will 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 will provide for all of their
operating expenses and liabilities from their own separate funds, other than
pursuant to the Services Agreement.
Section 4.20 Accounts Receivable Subsidiary.
(a) Notwithstanding the provisions of Section 4.3, the Company
may, and may permit any of its Subsidiaries to, make Investments in an Accounts
Receivable Subsidiary (i) the proceeds of which are applied within five
Business Days of the making thereof solely to finance the purchase of accounts
receivable of the Company and its Subsidiaries and (ii) in the form of Accounts
Receivable Subsidiary Notes to the extent permitted by clause (b) below;
provided that the aggregate amount of such Investments shall not exceed the
greater of $20 million or 20% of the TARC Borrowing Base at any time;
(b) The Company may not, nor may it permit any of its Subsidiaries
to, sell accounts receivable to an Accounts Receivable Subsidiary except for
consideration in an amount not less than that which would be obtained in an
arm's length transaction and solely in the form of cash or Cash Equivalents;
provided that an Accounts Receivable Subsidiary may pay the purchase price for
any such accounts receivable in the form of Accounts Receivable Subsidiary
Notes so long as, after giving effect to the issuance of any such Accounts
Receivable Subsidiary Notes, the aggregate principal amount of all Accounts
Receivable Subsidiary Notes outstanding shall not exceed the greater of $20
million or 20% of the aggregate purchase price paid for all outstanding
accounts receivable purchased by an Accounts Receivable Subsidiary since the
date of this Indenture (and not written off or required to be written off in
accordance with the normal business practice of an Accounts Receivable
Subsidiary);
(c) The Company may not, nor may it permit any of its Subsidiaries
to, enter into any guarantee, subject any of their respective properties or
assets (other than the accounts receivable sold by them to an Accounts
Receivable Subsidiary) to the satisfaction of any liability or obligation or
otherwise incur any liability or obligation (contingent or otherwise), in each
case, on behalf of an Accounts Receivable Subsidiary or in connection with any
sale of accounts receivable or participation interests therein by or to an
Accounts Receivable Subsidiary, other than obligations relating to breaches of
representations, warranties, covenants, and other agreements of the Company or
any of its Subsidiaries with respect to the accounts receivable sold by the
Company or any of its Subsidiaries to an Accounts Receivable Subsidiary or with
respect to the servicing thereof; provided that neither the Company nor any of
its Subsidiaries shall at any time guarantee or be otherwise liable for the
collectibility of accounts receivable sold by them; and
(d) The Company may not, nor may it permit any of its Subsidiaries
to, sell accounts receivable to, or enter into any such transaction with or for
the benefit of, an Accounts Receivable Subsidiary (i) if such Accounts
Receivable Subsidiary pursuant to or within the meaning of any Bankruptcy Law
(A) commences a voluntary case, (B) consents to the entry of an order for
relief against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes
general assignment for the benefit of its creditors, or (E) generally is not
paying its debts as they become due; or (ii) if a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for
relief against such
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Accounts Receivable Subsidiary in an involuntary case, (B) appoints a Custodian
of such Accounts Receivable Subsidiary or for all or substantially all of the
property of such Accounts Receivable Subsidiary, or (C) orders the liquidation
of such Accounts Receivable Subsidiary, and, with respect to clause (ii)
hereof, the order or decree remains unstayed and in effect for 60 consecutive
days.
Section 4.21 Limitation on Ranking of Future Debt. The Company
shall not, directly or indirectly, incur, create, or suffer to exist any Debt
(other than the Series A/B Notes) which is contractually subordinate or junior
in right of payment (to any extent) to any Debt of the Company and which is not
expressly by the terms of the instrument creating such Debt made pari passu
with, or subordinated and junior in right of payment to, the Notes. The
Guarantors will not, directly or indirectly, issue, assume, guarantee, incur or
otherwise become liable for any Debt which is both subordinate or junior in
right of payment to any Guarantor Senior Debt and senior or superior in right
of payment to the Guarantees.
Section 4.22 Maintenance of Interest Reserve Account.
(a) The Company shall establish and maintain with and at the
Trustee a custodial account in the name of the Trustee (or any agent thereof)
(the "Interest Reserve Account"), under the sole dominion and control of the
Trustee. Funds shall be released from the Interest Reserve Account only in
accordance with this Section 4.22.
(b) The Company shall, out of the proceeds received by it from the
issuance of the Notes, make an initial deposit into the Interest Reserve
Account in the amount of $6,000,000 (the "Interest Reserve Amount"), such
deposit being of sufficient amount to pay for the first three (3) semi-annual
interest payments on the Notes issued on the date hereof that will become due
and payable on June 30, 1998, December 30, 1998 and June 30, 1999 (the "Subject
Interest Payment Dates").
(c) The Interest Reserve Account will be held in trust by the
Trustee for the equal and ratable benefit of the Holders and not commingled
with any ordinary deposit or commercial bank account, will be maintained with
the corporate trust department of the Trustee for the equal and ratable benefit
of the Holders and, to the extent expressly provided herein, for the Company,
and will be subject to the provisions of this Agreement; provided, however,
that if the Series A/B Indenture has been amended to permit the "Interest
Reserve Account" (as defined therein) to be commingled with the Interest
Reserve Account hereunder, then such Interest Reserve Accounts may be
commingled. In accordance with written instructions received from the Company,
the Trustee shall, subject to the Trustee's rights under this Section 4.22, (i)
invest amounts on deposit in the Interest Reserve Account in Cash Equivalents
in the name of the Trustee as the Company may select, (ii) invest interest paid
on the Cash Equivalents referred to in clause (i) above, and reinvest other
proceeds of any such Cash Equivalents that may mature or be sold, in Cash
Equivalents in the name of the Trustee as the Company may select (the Cash
Equivalents referred to in clauses (i) and (ii) above being, collectively,
"Reserve Account Investments") and (iii) deposit and hold in the Interest
Reserve Account all interest and proceeds that are not invested or reinvested
in Reserve Account Investments. All disbursements made to the Holders pursuant
to this Agreement shall be made by the Trustee irrespective of, and without
deduction for, any counterclaim, defense, recoupment or setoff and shall be
final, and the Trustee will not seek to recover from any Holder for any reason
any such payment once made. All service charges and fees with respect to the
Interest Reserve Account shall be paid by the Company.
(d) The Company has no right to direct the Trustee to disburse the
funds in the Interest Reserve Account, other than the rights, exercisable upon
the giving by the Company of not less than one Business Day prior written
notice to the Trustee, (i) from time to time during the term of this Agreement,
to direct the Trustee to disburse to or for the account of the Company all or
any portion of the interest and other earnings on the funds on deposit in the
Interest Reserve Account and on Reserve Account Investments and (ii) if the
Company optionally redeems the
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Notes, from time to time during the term of this Agreement, to direct the
Trustee to disburse to or for the account of the Company all or any portion of
the funds on deposit in the Interest Reserve Account in an aggregate amount
that bears the same proportion to the aggregate amount of funds in the Interest
Reserve Account immediately prior to the release of such proceeds as the
aggregate principal amount of the Notes so redeemed by the Company bears to the
aggregate principal amount of Notes outstanding immediately prior to such
redemption; provided, however, that the Trustee shall not be required to
disburse any funds pursuant to this paragraph (d) after the occurrence and
during the continuance of an Event of Default. The amount of funds that may be
released by the Trustee to the Company in connection with any such optional
redemption shall be net of any costs, fees and expenses (such as breakage
costs) incurred to permit such release.
(e) The Trustee shall liquidate part or all of the Reserve Account
Investments, as necessary, to provide the availability of such funds in the
Investment Reserve Account as may be necessary to pay (and shall to the extent
funds are in the Interest Reserve Account pay therefrom) each of the first
three (3) semi-annual interest payments on the Notes, when and as they come
due, and to make such disbursements as may from time to time be requested by
the Company as permitted hereby. The Trustee shall disburse funds from the
Interest Reserve Account solely for the purposes of making the payments and
distributions described hereunder.
(f) Promptly after the payment in full of the interest accrued
through and including the installment of interest payable on the June 30, 1999
interest payment, the Trustee shall liquidate all Reserve Account Investments
remaining and shall disburse the full amount of the funds then on deposit in
the Interest Reserve Account to or for the account of the Company, whereupon
the Interest Reserve Account shall be closed; provided, however, that the
Trustee shall not disburse any funds pursuant to this paragraph (f) after the
occurrence and during the continuance of an Event of Default. If any such Event
of Default is continuing at the Interest Payment Date following the Subject
Interest Payment Dates, the funds in the Interest Reserve Account shall be
applied to (and the Trustee shall, to the extend of such funds, pay therefrom)
the interest payment due on such Interest Payment Date.
Section 4.23 Restriction on Sale and Issuance of Subsidiary
Stock. The Company shall not sell, and shall not permit any of its
Subsidiaries to, issue or sell, any shares of Capital Stock of any Subsidiary
of the Company to any Person other than the Company or a Wholly Owned
Subsidiary of the Company unless an amount equal to the net proceeds of such
sale is used by the Company within 180 days after the date of such sale for one
or more of the purposes specified in Section 4.14(a).
ARTICLE V
SUCCESSOR CORPORATION
Section 5.1 When the Company May Merge, Etc.
(a) The Company shall not, and shall not permit any Guarantor 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:
(1) either (a) the Company or the Guarantor, as the case may be,
shall be the continuing Person, or (b) the Person (if other than the Company)
formed by such consolidation or into which the Company or the Guarantor,
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as the case may be, is merged or to which all or substantially all of the
properties and assets of the Company, or the Guarantor, as the case may be, are
transferred as an entirety or substantially as an entirety (the Company or the
Guarantor, as the case may be, or such other Person being hereinafter referred
to as 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 shall expressly assume, by an indenture
supplemental hereto executed and delivered to the Trustee on or prior to the
consummation of such transaction, in form satisfactory to the Trustee, all the
obligations of the Company or the Guarantor, as the case may be, under the
Notes and this Indenture;
(2) No Default or Event of Default shall exist or shall occur
immediately after giving effect to such transaction;
(3) on a pro forma consolidated basis, immediately after giving
effect to such transaction and the assumption of the obligations contemplated
by clause (1), above, and the incurrence or anticipated incurrence of any Debt
or Disqualified Capital Stock to be incurred or issued in connection therewith,
(x) the Net Worth of the Surviving Person is at least equal to the Net Worth of
such predecessor or transferring entity immediately prior to such transaction
and (y) except for a merger of the Company into a wholly owned Subsidiary of
TEC or its wholly owned Subsidiary incorporated in the State of Delaware solely
for the purpose of facilitating a reincorporation in Delaware or a repurchase
of the Old TARC Warrants into a right to receive cash, which conversion or
reincorporation would not require cash payments by the Company in excess of
$250,000 in the aggregate, the Surviving Person could incur $1.00 of additional
Senior Debt pursuant to the third paragraph of Section 4.11, as applicable (in
all cases for this purpose only, as if the Phase I Completion Date has
occurred);
(4) 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; and
(5) except for a merger of the Company into a wholly owned
Subsidiary of TEC or its wholly owned Subsidiary incorporated in the State of
Delaware solely for the purpose of facilitating a reincorporation in Delaware
or a repurchase of the Old TARC Warrants into a right to receive cash, which
conversion or reincorporation would not require cash payments by the Company in
excess of $250,000 in the aggregate, at the time of or within 45 days after the
occurrence of the event specified above, the Notes, if then rated, have not
been or are not downgraded by Standard & Poor's Corporation, Inc., ▇▇▇▇▇'▇
Investors Service, Inc. or any successor rating agencies to either entity to a
rating below that which existed immediately prior to the time the event
specified above is first publicly announced.
For purposes of this Section 5.1, the Consolidated Fixed Charge
Coverage Ratio shall be determined on a pro forma consolidated basis (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.
(c) Notwithstanding anything contained in the foregoing to the
contrary, any Subsidiary of the Company with a Net Worth greater than zero, may
merge into the Company (or a wholly owned Subsidiary of the Company) at any
time, provided, that the Company, shall have delivered to the Trustee an
Officers' Certificate stating that
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such Subsidiary has a Net Worth greater than zero and such merger does not
result in a Default or an Event of Default hereunder. Notwithstanding anything
contained in the foregoing, an Accounts Receivable Subsidiary may merge into
the Company, provided, that such merger does not result in a Default or Event
of Default hereunder.
Section 5.2 Successor Corporation Substituted. Upon any consolidation
or merger, or any transfer of assets in accordance with Section 5.1, the
Surviving Person formed by such consolidation or into which the Company, or a
Guarantor, as the case may be, 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 Guarantor, as the case may be, under this
Indenture with the same effect as if such Surviving Person had been named as
the Company, or such Guarantor, as the case may be, herein. When a Surviving
Person duly assumes all of the obligations of the Company pursuant hereto and
pursuant to the Notes, the predecessor shall be released from such obligations.
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
default in the payment of the Offer Price in accordance with Section 4.14 or
the Change of Control Purchase Price in accordance with Article XI;
(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, and continuance of such default or
breach for the period and after the notice, if any, specified below;
(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 $20,000,000, or failure to pay such Debt at its stated maturity, if either
(a) such default results from the failure to pay principal of, premium, if any,
or interest on any such Debt when due and such default continues beyond any
applicable cure, forebearance or notice period; provided that a waiver by the
lenders of such Debt of such default shall constitute a waiver hereunder for
the same period or (b) as a result of such default, the maturity of such Debt
has been accelerated prior to its scheduled maturity, and such default or
acceleration continues for a period of 10 days; provided, that a rescission or
annulment of such default or acceleration (prior to any action taken by the
Trustee with respect to the acceleration of the Obligations under the Notes)
pursuant to the agreement governing such Debt 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
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its Subsidiaries as bankrupt or insolvent, or ordering relief against the
Company or any of its Subsidiaries 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 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, 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;
(f) the Company or any of its Subsidiaries 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 $25,000,000 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); or
(h) a Guarantee shall cease to be in full force and effect (other
than a release of a Guarantee by designation of a Guarantor as an Unrestricted
Subsidiary or otherwise in accordance with this Indenture) or any Guarantor
shall deny or disaffirm its obligations with respect thereto.
If a default occurs and is continuing and if it is known to the
Trustee, the Trustee must, within 90 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 Offer Price or the Change of
Control Purchase Price as required by this Indenture, 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, 4.14, 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 Holders of at least 25% in principal amount of the
outstanding Notes 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 Holders of at least 25% in principal amount of the Notes
then outstanding.
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
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5 of the Notes, an equivalent premium (or, in the case of an Event of Default
prior to the time optional redemptions are permitted, to the extent permitted
by law, a premium equal to the stated interest rate of the Notes multiplied by
the quotient of (i) the number of full years left to maturity plus one, divided
by (ii) seven) 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
Holders of not less than 25% in aggregate Value of then outstanding Notes, by a
notice in writing to the Company (and to the Trustee if given by Holders) (an
"Acceleration Notice"), may declare all of the principal of the Notes (or the
Change of Control Purchase Price if the Event of Default includes failure to
pay the Change of Control Purchase Price), determined as set forth below,
including in each case accrued interest thereon, 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 after such a declaration of acceleration being made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article VI, the Holders of a
majority in aggregate Value of then outstanding Notes, by written notice to the
Company and the Trustee, may waive, on behalf of all Holders, any such
declaration of acceleration if:
(a) 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
which would become due otherwise than by such declaration of acceleration, 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,
(4) all sums paid or advanced by the Trustee hereunder and the
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and
(b) all Events of Default, other than the non-payment of the
principal of, premium, if any, and interest on Notes which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 6.12, including, if applicable, any Event of Default
relating to the covenants contained in Section 11.1.
Notwithstanding the previous sentence of this Section 6.2, no waiver
shall be effective for any Event of Default or event which with notice or lapse
of time or both would be an Event of Default with respect to any covenant or
provision which cannot be modified or amended without the consent of (x) 66
2/3% in aggregate Value of the Notes or (y) the affected Holder of each of the
outstanding Notes, unless (x) 66 2/3% in aggregate Value of the Notes or (y)
all such affected Holders, respectively, agree, in writing, to waive such Event
of Default or event. No such waiver shall cure or waive any subsequent default
or impair any right consequent thereon.
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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 clause (1) or (2) of Section 6.1
occurs and is continuing, the Company shall, upon demand of the Trustee, pay to
it, 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 10 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 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.
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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;
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 Holders of not less than 25% in principal amount of then
outstanding Notes 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;
(c) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities to be
incurred or reasonably probable to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the outstanding Notes;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
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Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
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 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 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 Holder or Holders of a
majority in aggregate Value of then outstanding Notes 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, and
(c) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Section 6.12 Waiver of Past Default. Subject to Section
6.8, the Holder or Holders of not less than a majority in aggregate Value of
the outstanding Notes 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
(a) 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, or
(b) in respect of a covenant or provision hereof which, under
Article IX, cannot be modified or amended without the consent of the Holder of
each outstanding Note affected or 66 2/3% in aggregate Value of the Notes at
the time outstanding, as the case may be; provided that such a default may be
waived by the consent of Holders of each outstanding Note affected or 66 2/3%
in aggregate value of the Notes outstanding, as the case may be.
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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 shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group 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) If 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. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
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(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.
(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) and (f) of this Section
7.1.
(f) The Trustee shall not be liable for 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.
(g) The Trustee shall execute and deliver the Intercreditor
Agreements and any Subordination Agreements as provided in Section 12.2.
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 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 13.4 and 13.5. 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 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 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 if it is known to the Trustee pursuant to Section
4.7(c), the Trustee shall mail to each Noteholder notice of the uncured Default
or Event of Default within 90 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 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. Within 60 days after each
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall, if required, mail to each Noteholder a brief report dated as of
such May 15 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 SEC 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.
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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 pay for any settlement made without its written consent, which
shall not be unreasonably withheld. The Company need not reimburse any expense
or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
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, except assets held in trust to pay
principal (and premium, if any,) or interest on particular Notes.
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 Holder or Holders of a majority in
principal amount of the outstanding Notes 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 Holder or Holders of a majority in principal amount of the Notes 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
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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.
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 Satisfaction, Discharge of the Indenture and Defeasance
of the Notes. The Company shall be deemed to have paid and discharged the
entire Debt on the Notes and the provisions of this Indenture shall cease to be
of further effect (subject to Sections 8.3 and 8.7), if:
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(a) The Company irrevocably deposits in trust for the benefit of
the Holders of the Notes with the Trustee, pursuant to an irrevocable trust
agreement in form and substance reasonably satisfactory to the Trustee, (i)
U.S. Legal Tender, (ii) U.S. Government Obligations or (iii) a combination
thereof which, after payment of all Federal, state and local taxes or other
charges or assessments in respect thereof payable by the Trustee, through the
payment of principal and interest will provide, not later than one day before
the due date of payment in respect of the Notes, U.S. Legal Tender in an amount
which, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof (in form and
substance reasonably satisfactory to the Trustee) delivered to the Trustee, is
sufficient to pay the principal of, premium, if any, and each installment of
principal and interest on the Notes then outstanding, on the stated maturity or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date;
(b) Such deposits shall not cause the Trustee to have a conflicting
interest as defined in and for purposes of the TIA;
(c) No Default or Event of Default relating to clauses (e) or (f)
of Section 6.1 shall have occurred or be continuing on the date of such deposit
or shall occur on or before the 91st day (or one day after such greater period
of time in which any such deposit of trust funds may remain subject to set
aside or avoidance under bankruptcy or insolvency laws) after the date of such
deposit, and such deposit will not result in a Default or Event of Default
under this Indenture or a breach or violation of, or constitute a default
under, any other instrument to which the Company or any Subsidiary of the
Company is a party or by which it or its property is bound;
(d) The deposit, defeasance and discharge will not be deemed, or
result in, a Federal income taxable event to the Holders of the Notes and the
Holders will be subject to Federal income tax in the same amounts and in the
same manner and at the same times as would have been the case if such deposit
and defeasance had not occurred;
(e) The deposit shall not result in the Company, the Trustee or the
trust being subject to regulation under the Investment Company Act of 1940;
(f) After the passage of 90 days (or any greater period of time in
which any such deposit of trust funds may remain subject to set aside or
avoidance under Bankruptcy Laws insofar as those laws apply to the Company)
following the irrevocable deposit of the trust funds, such funds will not be
subject to any set aside or avoidance under Bankruptcy Laws affecting
creditors' rights generally; and
(g) The Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel (who may be outside counsel to the
Company, but not in-house counsel to the Company), each in form and substance
satisfactory to the Trustee, stating that all conditions precedent specified
herein relating to the defeasance contemplated by this Section 8.1 have been
complied with.
In the event all or any portion of the Notes are to be redeemed
through such irrevocable trust, the Company must make arrangements satisfactory
to the Trustee, at the time of such deposit, for the giving of the notice of
such redemption or redemptions by the Trustee in the name and at the expense of
the Company.
In the event that the Company takes the necessary action to comply
with the provisions described in this Section 8.1 and the Notes are declared
due and payable because of the occurrence of an Event of Default within the
time period specified in Section 8.1(c), or at any time under Section 8.3, the
Company will remain liable for all amounts due on the Notes at the time of
acceleration resulting from such Event of Default in excess of the
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amount of U.S. Legal Tender and U.S. Government Obligations deposited with the
Trustee pursuant to this Section 8.1 at the time of such acceleration.
Section 8.2 Termination of Obligations Upon Cancellation of the Notes.
In addition to the Company's rights under Section 8.1, the Company may
terminate all of its respective 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;
(b) the Company has paid or caused to be paid all sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent 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 8.1 or 8.2, the respective obligations of the Company and the Trustee
under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.11, 2.12, Article III, 4.1, 4.2,
4.4, 6.8, 7.7, 7.8, 8.5, 8.6, 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 6.8, 7.7, 7.8, 8.5, 8.6, 8.7 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 8.1 or 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 Application of Trust Assets. The Trustee shall hold any
U.S. Legal Tender or U.S. Government Obligations deposited with it in the
irrevocable trust established pursuant to Section 8.1. The Trustee shall apply
the deposited U.S. Legal Tender or U.S. Government Obligations, together with
earnings thereon, through the Paying Agent (other than the Company or any
Subsidiary of the Company), in accordance with this Indenture and the terms of
the irrevocable trust agreement, to the payment of principal of and interest on
the Notes.
Section 8.6 Repayment to the Company. Upon termination of the trust
established pursuant to Section 8.1, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them.
The Trustee and the Paying Agent shall pay to the Company upon
request, and, if applicable, in accordance with the irrevocable trust
established pursuant to Section 8.1, any U.S. Legal Tender or U.S. Government
Obligations held by them for the payment of principal of or interest on the
Notes that remain unclaimed for two years after the date on which such payment
shall have become due; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may, at the expense of
the Company, cause to be published once, in a newspaper customarily published
on each Business Day and of general circulation in the Borough of Manhattan,
The City of New York, notice that such money remains unclaimed and
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that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then
remaining shall be repaid to the Company. After payment to the Company,
Holders entitled to such payment must look to the Company for such payment as
general creditors unless an applicable abandoned property law designates
another Person.
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 8.1 or 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 8.1 or 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 8.1 or 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 surrogated 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 and the Guarantors, if any, 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 in form
satisfactory to the Trustee, for any of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency, or to make any
other provisions with respect to matters or questions arising under this
Indenture 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 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; or
(d) to comply with the TIA.
Section 9.2 Amendments, Supplemental Indentures and Waivers with
Consent of Holders. Subject to Section 6.8, with the consent of the Holders of
not less than a majority in aggregate Value of then outstanding Notes, by
written act of said Holders (including an electronic mechanism utilized by the
Depository Trust Company 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 or enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or
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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; provided, that no such modification may, without the
consent of the Holders of not less than 66 2/3 in aggregate Value of the Notes
at the time outstanding, (i) prior to a Change of Control, reduce the Change of
Control Purchase Price or alter the provisions of Article XI or (ii) prior to
the date upon which an Offer to Purchase is required to be made, reduce the
Offer Price or alter the provisions of Section 4.14 in a manner adverse to the
Holders. Subject to Section 6.8, the Holder or Holders of not less than a
majority, in aggregate Value of then outstanding Notes may waive compliance by
the Company with any provision of this Indenture or the Notes; provided, that
no such waiver may, without the consent of the Holders of not less than 66 2/3
in aggregate Value of the Notes at the time outstanding, have the effect of (i)
prior to a Change of Control, reducing the Change of Control Purchase Price or
altering the provisions of Article XI or (ii) prior to the date upon which an
Offer to Purchase is required to be made, reduce the Offer Price or alter the
provisions of Section 4.14 in a manner adverse to the Holders. 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 Value 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) (i) reduce the principal amount of any Note or (ii) after the
date upon which a Change of Control Offer is required to be made, reduce the
Change of Control Purchase Price or (iii) after the date upon which an Offer to
Purchase is required to be made, reduce the to Purchase Offer Price or (iv)
reduce the Redemption Price;
(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;
(e) (i) alter the redemption provisions of Article III or of
paragraph 5 of the Notes or (ii) after the date upon which a Change of Control
Offer is required to be made, alter the terms or provisions of Article XI;
(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; or
(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.
It shall not be necessary for the consent of the Holders under this
Section 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 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of
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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 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
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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:
(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
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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.
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 Holders of a majority
in principal amount of the Notes 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 Value 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 Holder or Holders of a majority in aggregate Value of the Notes 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 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.
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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
RIGHT TO REQUIRE REPURCHASE
Section 11.1 Repurchase of Notes at Option of the Holder Upon
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, upon the terms and
conditions of this Article XI, to require the Company to repurchase all or any
part of such Holder's Notes (provided that the principal amount of such Notes
at maturity must be $1,000 or an integral multiple thereof) on a date that is
no later than 60 Business Days after the occurrence of a 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 (the "Change of
Control Purchase Price") equal to 101% of the principal amount thereof, plus
accrued and unpaid interest, if any, on and including the Change of Control
Payment Date.
(b) Within 20 Business Days after the Company knows, or reasonably
should know, of the occurrence of a Change of Control, the Company shall make
an irrevocable unconditional offer (a "Change of Control Offer") to the Holders
to purchase for U.S. Legal Tender all of the Notes pursuant to the offer
described in clause (c) of this Section 11.1 at the Change of Control Purchase
Price. Within five Business Days after each date upon which the Company knows,
or reasonably should know, of the occurrence of a Change of Control requiring
the Company to make a Change of Control Offer pursuant to this Section 11.1,
the Company shall so notify the Trustee.
(c) Notice of a Change of Control Offer shall be sent, at least 20
Business Days prior to the Final Change of Control Put Date (as defined below),
by first class mail, by the Company to each Holder at its registered address,
with a copy to the Trustee. The notice to the 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. The notice, which shall
govern the terms of the Offer, shall state:
(1) that the Change of Control Offer is being made pursuant to such
notice and this Section 11.1 and that all Notes, or portions thereof, tendered
will be accepted for payment;
(2) the Change of Control Purchase Price, the Change of Control
Payment Date and the Final Change of Control Put Date (as defined below);
(3) that any Note, or portion thereof, not tendered or accepted for
payment will continue to accrue interest, if interest is then accruing;
(4) that, unless the Company defaults in depositing U.S. Legal
Tender with the Paying Agent in accordance with the last paragraph of this
clause (c), or payment is otherwise prevented, any Note, or portion thereof,
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accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Note, or portion thereof,
purchased pursuant to a Change of Control Offer will be required to surrender
the Note, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Note completed, to the Paying Agent (which may not for purposes
of this Section 11.1, notwithstanding anything in this Indenture to the
contrary, be the Company or any Affiliate of the Company) at the address
specified in the notice prior to the close of business on the third Business
Day prior to the Change of Control Payment Date (the "Final Change of Control
Put Date");
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, prior to the close of business on the Final Change of
Control Put Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Notes the Holder is
withdrawing and a statement containing a facsimile signature that such Holder
is withdrawing his election to have such principal amount of Notes purchased;
(7) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered; and
(8) a brief description of the events resulting in such Change of
Control.
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 business on the Final Change of
Control Put Date, (ii) deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Change of Control Purchase Price (including accrued and
unpaid interest) 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
(including accrued and unpaid interest), 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 Payment
Date. Any such Change of Control Offer shall comply with all applicable
provisions of Federal and state laws, rules and regulations, including those
regulating tender offers, if applicable, and, if such laws, rules or
regulations require or prohibit any action inconsistent with the foregoing,
compliance by the Company with such laws, rules and regulations will not
constitute a breach of the Company's obligations with respect to the foregoing.
ARTICLE XII
SUBORDINATION
Section 12.1 Notes Subordinated to Senior Indebtedness.
The Company and each Holder, by its acceptance of Notes, agree that
(a) the payment of the principal of and interest on the Notes and (b) any other
payment in respect of the Notes, including on account of the acquisition or
redemption of the Notes by the Company (including, without limitation,
pursuant to Article XI) is subordinated, to the extent and in the manner
provided in this Article XII, to the prior payment in full of all Senior Debt
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of the Company, whether outstanding at the date of this Indenture or thereafter
created, incurred, assumed or guaranteed, and that these subordination
provisions are for the benefit of the holders of Senior Debt.
This Article XII shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt, and such holders are made obligees hereunder and any one or more
of them may enforce such provisions.
Section 12.2 No Payment on Securities in Certain Circumstances.
(a) No payment may be made by the Company or on behalf of the
Company on account of principal of or interest on the Notes or to acquire or
repurchase any of the Notes or on account of the redemption provisions of the
Notes (i) upon the maturity of any Senior Debt by lapse of time, acceleration
or otherwise, unless and until all such Senior Debt is first paid in full or
(ii) upon the happening of any default in payment of any principal of or
interest on any Senior Debt when the same becomes due and payable (a "Payment
Default"), unless and until such Payment Default shall have been cured or
waived or shall have ceased to exist.
(b) Upon (i) the happening of an event of default (other than a
Payment Default) that permits the holders of Senior Debt to declare such Senior
Debt to be due and payable (or, in the case of letters of credit, require cash
collateralization thereof) and (ii) written notice of such event of default
given to the Company and the Trustee by the lenders' agent under the Company's
working capital facility, if any, secured by Receivables and Inventory
(provided that such working facility constitutes Senior Debt) or holders of an
aggregate of at least $30 million principal amount outstanding of any Senior
Debt or their representative (a "Payment Notice"), then, unless and until such
event of default has been cured or waived or otherwise has ceased to exist, no
payment (by set-off or otherwise) may be made by or on behalf of the Company or
any Guarantor which is an obligor under such Senior Debt on account of any
Obligation in respect of the Notes, including the principal of, premium, if
any, or interest on the Notes, or to repurchase any of the Notes, or on account
of the redemption provisions of the Notes (or liquidated damages pursuant to
the registration rights agreement relating to the Notes), in any such case,
other than payments made with Junior Securities. Notwithstanding the
foregoing, unless the Senior Debt in respect of which such event of default
exists has been declared due and payable in its entirety within 179 days after
the Payment Notice is delivered as set forth above (the "Payment Blockage
Period") (and such declaration has not been rescinded or waived), at the end of
the Payment Blockage Period, the Company and the Guarantors shall be required
to pay all sums not paid to the Holders of the Notes during the Payment
Blockage Period due to the foregoing prohibitions and to resume all other
payments as and when due on the Notes. Any number of Payment Notices may be
given; provided, however, that (i) not more than one Payment Notice shall be
given within a period of any 360 consecutive days, and (ii) no default that
existed upon the date of such Payment Notice or the commencement of such
Payment Blockage Period (whether or not such event of default is on the same
issue of Senior Debt) shall be made the basis for the commencement of any other
Payment Blockage Period unless such other Payment Blockage Period is commenced
by a Payment Notice from the Representative and such event of default shall
have been cured or waived for a period of at least 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company or any Guarantor (other than Junior
Securities) shall be received by the Trustee or the Holders at a time when such
payment or distribution is prohibited by the foregoing provisions, such payment
or distribution shall be held in trust for the benefit of the holders of such
Senior Debt, and shall be paid or delivered by the Trustee or such Holders, as
the case may be, to the holders of such Senior Debt remaining unpaid or
unprovided for or to their representative or representatives, or to the trustee
or trustees under any indenture pursuant to which any instruments evidencing
any of such Senior Debt may have issued, ratably according to the aggregate
principal
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amounts remaining unpaid on account of such Senior Debt held or represented by
each, for application to the payment of all such Senior Debt remaining unpaid,
to the extent necessary to pay or to provide for the payment of all such Senior
Debt in full in cash or Cash Equivalents or otherwise to the extent holders
accept satisfaction of amounts due by settlement in other than cash or Cash
Equivalents after giving effect to any concurrent payment or distribution to
the holders of such Senior Debt.
Section 12.3 Notes Subordinated to Prior Payment of All Senior Debt
on Dissolution, Liquidation or Reorganization.
Upon any distribution of assets of the Company or any Guarantor upon
any dissolution, winding up, total or partial liquidation or reorganization of
the Company or a Guarantor, whether voluntary or involuntary, in bankruptcy,
insolvency, receivership or a similar proceeding or upon assignment for the
benefit of creditors or any marshalling of assets or liabilities, (i) the
holders of all Senior Debt of the Company or such Guarantor, as applicable,
will first be entitled to receive payment in full in cash or Cash Equivalents
or otherwise to the extent holders accept satisfaction of amounts due by
settlement in other than cash or Cash Equivalents (or have such payment duly
provided for) before the Holders are entitled to receive any payment on account
of any Obligation in respect of the Notes, including the principal of, premium,
if any, and interest on the Notes (or liquidated damages pursuant to the
registration rights agreement relating to the Notes) (other than Junior
Securities) and (ii) any payment or distribution of assets of the Company or
such Guarantor of any kind or character from any source, whether in cash,
property or securities (other than Junior Securities) to which the Holders or
the Trustee on behalf of the Holders would be entitled (by set-off or
otherwise) but for the subordination provisions contained in the Indenture,
will be paid by the liquidating trustee or agent or other person making such a
payment or distribution directly to the holders of such Senior Debt or their
representative to the extent necessary to make payment in full in Cash or Cash
Equivalents (or have such payment duly provided for) on all such Senior Debt
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Debt.
Section 12.4 Securityholders to Be Subrogated to Rights of Holders
of Senior Debt.
Subject to the payment in full of all Senior Debt of the
Company as provided herein, the Holders of Notes shall be subrogated to the
rights of the holders of such Senior Debt to receive payments or distributions
of assets of the Company applicable to the Senior Debt until all amounts owing
on the Notes shall be paid in full, and for the purpose of such subrogation no
such payments or distributions to the holders of such Senior Debt by the
Company, or by or on behalf of the Holders by virtue of this Article XII, which
otherwise would have been made to the Holders shall, as between the Company and
the Holders, be deemed to be payment by the Company or on account of such
Senior Debt, it being understood that the provisions of this Article XII are
and are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of such Senior Debt, on the other
hand.
If any payment or distribution to which the Holders would
otherwise have been entitled but for the provisions of this Article XII shall
have been applied, pursuant to the provisions of this Article XII, to the
payment of amounts payable under Senior Debt of the Company, then the Holders
shall be entitled to receive from the holders of such Senior Debt any payments
or distributions received by such holders of Senior Debt in excess of the
amount sufficient to pay all amounts payable under or in respect of such Senior
Debt in full.
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Section 12.5 Obligations of the Company Unconditional.
Nothing contained in this Article XII or elsewhere in this
Indenture or in the Notes is intended to or shall impair as between the Company
and the Holders, the obligation of each such Person, which is absolute and
unconditional, to pay to the Holders the principal of, premium, if any,
interest on, and Liquidated Damages with respect to, the notes as and when the
same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Company other than the holders of the Senior Debt, nor shall anything
herein or therein prevent the Trustee or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII, of the
holders of Senior Debt in respect of cash, property or securities of the
Company received upon the exercise of any such remedy. Notwithstanding
anything to the contrary in this Article XII or elsewhere in this Indenture or
in the Notes, upon any distribution of assets of the Company referred to in
this Article XII, the Trustee, subject to the provisions of Sections 7.1 and
7.2, and the Holders shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the Persons entitled
to participate in such distribution, the holders of the Senior Debt and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article XII so long as such court has been apprised of the provisions
of, or the order, decree or certificate makes reference to, the provisions of
this Article XII. Nothing in this Section 12.5 shall apply to the claims of,
or payments to, the Trustee under or pursuant to Section 7.7.
Section 12.6 Trustee Entitled to Assume Payments Not Prohibited
in Absence of Notice.
The Trustee shall not at any time be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee unless and until a Trust Officer of the Trustee or any Paying
Agent shall have received, no later than one Business Day prior to such
payment, written notice thereof from the Company or from one or more holders of
Senior Indebtedness or from any representative therefor and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Sections 7.1 and 7.2, shall be entitled in all respects conclusively to assume
that no such fact exists.
Section 12.7 Application by Trustee of Assets Deposited with It.
Amounts deposited in trust with the Trustee pursuant to and in
accordance with Article VIII shall be for the sole benefit of the Holders of
the Notes and, to the extent allocated for the payment of Notes, shall not be
subject to the subordination provisions of this Article XII. Otherwise, any
deposit of assets with the Trustee or the Agent (whether or not in trust) for
the payment of principal of or interest on any Notes shall be subject to the
provisions of Sections 12.1, 12.2, 12.3 and 12.4; provided that, if prior to
one Business Day preceding the date on which by the terms of this Indenture any
such assets may become distributable for any purpose (including, without
limitation, the payment of either principal of or interest on any Note) the
Trustee or such Paying Agent shall not have received with respect to such
assets the written notice provided for in Section 12.6, then the Trustee or
such Paying Agent shall have full power and authority to receive such assets
and to apply the same to the purpose for which they were received, and shall
not be affected by any notice to the contrary which may be received by it on or
after such date.
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Section 12.8 Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior Debt.
No right of any present or future holders of any Senior Debt
to enforce subordination provisions contained in this Article XII shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of Senior Debt may extend, renew,
modify or amend the terms of the Senior Debt or any security therefor and
release, sell or exchange such security and otherwise deal freely with the
Company, all without affecting the liabilities and obligations of the parties
to this Indenture or the Holders.
Section 12.9 Holders of Notes Authorize Trustee to Effectuate
Subordination of Securities.
Each Holder of the Notes by his acceptance thereof authorizes
and expressly directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provisions contained
in this Article XII and to protect the rights of the Holders pursuant to this
Indenture, and appoints the Trustee his attorney-in-fact for such purpose,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors of
the Company), the immediate filing of a claim for the unpaid balance of his
Notes in the form required in said proceedings and cause said claim to be
approved. If the Trustee does not file a proper claim or proof of debt in the
form required in such proceeding prior to 30 days before the expiration of the
time to file such claim or claims, then the holders of the Senior Debt or their
representative are or is hereby authorized to have the right to file and are or
is hereby authorized to file an appropriate claim for and on behalf of the
Holders of said Notes. Nothing herein contained shall be deemed to authorize
the Trustee or the holders of Senior Debt or their representative to authorize
or consent to or accept or adopt on behalf of any Holder of Notes any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee or the holders of
Senior Debt or their representative to vote in respect of the claim of any
Holder of Note in any such proceeding.
Section 12.10 Right of Trustee to Hold Senior Debt.
The Trustee shall be entitled to all of the rights set forth
in this Article XII in respect of any Senior Debt at any time held by it to the
same extent as any other holder of Senior Debt, and nothing in this Indenture
shall be construed to deprive the Trustee of any of its rights as such holder.
Section 12.11 Article XII Not to Prevent Events of Default.
The failure to make a payment on account of principal of,
premium, if any, interest on, or Liquidated Damages with respect to, the Notes
by reason of any provision of this Article XII shall not be construed as
preventing the occurrence of a Default or an Event of Default under Section 6.1
or in any way prevent the Holders from exercising any right hereunder other
than the right to receive payment on the Notes.
Section 12.12 No Fiduciary Duty of Trustee to Holders of Senior
Debt.
The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt, and shall not be liable to any such holders (other
than for its willful misconduct or negligence) if it shall in good faith
mistakenly pay over or distribute to the Holders of Securities or the Company
or any other Person, cash, property
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or securities to which any holders of Senior Debt shall be entitled by virtue
of this Article XII or otherwise. Nothing in this Section 12.12 shall affect
the obligation of any other such Person to hold such payment for the benefit
of, and to pay such payment over to, the holders of Senior Debt or their
representative.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 TIA Controls. If any provision of this
Indenture limits, qualifies, or conflicts with the duties imposed by operation
of, or otherwise conflicts with any of the provisions of, the TIA, the imposed
duties, or provisions upon qualification of this Indenture under the TIA, shall
control.
Section 13.2 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
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
if to the Trustee:
First Union National Bank
Corporate Trust Department
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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 a Noteholder shall be mailed to
him 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.
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Section 13.3 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 13.4 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 13.5 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;
(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 regardless of 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 13.6 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 13.7 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 13.8 Governing Law. THIS INDENTURE, THE NOTES AND THE
GUARANTEES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE 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. 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
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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.
Section 13.9 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt
agreement of any of the Company or any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 13.10 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 13.11 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 13.12 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 13.13 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 13.14 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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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:
-------------------------------------------
▇▇ ▇▇▇▇▇▇▇, Vice President and Secretary
[Seal]
Attest:
------------------------------------
▇▇▇ ▇▇▇▇▇, Assistant Secretary
FIRST UNION NATIONAL BANK
as Trustee
By:
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
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EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Unit
Exhibit C - Certificate of Transferor
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EXHIBIT A
(FACE OF 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 DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF 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 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.
------------------------
1 This paragraph should be included only if the Note is issued in global form.
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[FORM OF NOTE]
TRANSAMERICAN REFINING CORPORATION
16% SENIOR SUBORDINATED NOTE DUE 2003
No. $
THIS NOTE WILL BE ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") WITHIN THE
MEANING OF SECTION 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE
ISSUE DATE OF THIS NOTE IS MARCH 16, 1998. INFORMATION REGARDING THE ISSUE
PRICE, THE TOTAL AMOUNT OF OID, AND THE YIELD TO MATURITY MAY BE OBTAINED BY
WRITTEN REQUEST OF THE HOLDERS OF THIS NOTE FROM THE COMPANY, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ATTENTION: INVESTOR
RELATIONS MANAGER, TELEPHONE NUMBER (▇▇▇) ▇▇▇-▇▇▇▇.
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 June 30, 2003.
Interest Payment Dates: June 30 and December 30,
commencing June 30, 1998
Record Dates: June 15 and December 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.
Dated:
TRANSAMERICAN REFINING CORPORATION
By:
------------------------------------
Name:
Title:
Attest:
---------------------------
Secretary
[Seal]
A-2
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Trustee's Certificate of Authentication:
This is one of the Notes referred to
in the within-mentioned Indenture:
First Union National Bank
By:
-------------------------------------
Authorized Signature
A-3
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(BACK OF NOTE)
TRANSAMERICAN REFINING CORPORATION
16% SENIOR SUBORDINATED 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 16% per annum. To the extent it is lawful, the Company promises to pay
interest on any interest payment due but unpaid on such principal amount at a
rate of 18% per annum compounded semi- annually.
The Company will pay interest semi-annually on June 30 and December
30 of each year (each, an "Interest Payment Date"), commencing June 30, 1998.
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 December 30, 1997.
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 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.
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, First Union National Bank (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 March
16, 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 subordinated obligations of the
Company limited in aggregate principal amount to $25,000,000.
A-4
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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 the Redemption Price (expressed as a
percentage of principal amount) set forth below with respect to the indicated
Redemption Date, in each case, together with any accrued but unpaid interest to
the Redemption Date.
If redeemed during
the period
indicated below Redemption Price
------------------------ ----------------
December 30, 1997 - June 29, 20.0. . . . . . . 116.00%
June 30, 2000 - June 29, 2001 . . . . . . . . 110.67%
June 30, 2001 - June 29, 2002 . . . . . . . . 105.33%
June 30, 2002 - and thereafter . . . . . . . . 100.00%
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
$1,000 and integral multiples of $1,000. 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 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.
▇-▇
▇▇
▇▇. 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 Holders of at least a
majority in aggregate Value of the Notes then outstanding, and any existing
Default or Event of Default or compliance with any provision may be waived with
the consent of the Holders of a majority in aggregate Value of the Notes then
outstanding. 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, sell assets,
change the nature of its business, 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. Change of Control.
In the event there shall occur any Change of Control, each Holder of
Notes shall have the right, at such Holder's option but subject to the
limitations and conditions set forth in the Indenture, to require the Company
to purchase on the Change of Control Payment Date in the manner specified in
the Indenture, all or any part (in integral multiples of $1,000) of such
Holder's Notes at a Change of Control Purchase Price equal to 101% of the
principal amount thereof, together with accrued and unpaid interest, if any, on
and including the Change of Control Payment Date.
14. 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.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate combined Value of the Notes then
outstanding 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, Holders of a majority
in aggregate Value of the Notes then
A-6
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outstanding 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.
16. 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.
17. 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.
18. 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.
19. 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.
20. 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
March 16, 1998, among the Company and the ▇▇▇▇▇▇▇▇▇ & Company, Inc. (the
"Registration Rights Agreement"), including but not 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, ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
▇-▇
▇▇
▇▇. Ranking.
Payment of principal, premium, if any, interest on and Liquidated
Damages with respect to the Notes is subordinated, to the extent set forth in
the Indenture, to the prior payment of all Senior Debt. The Notes rank pari
passu with the Series A/B Notes in right of payment.
A-8
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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 Signature
Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-9
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.14 or Article XI of the Indenture, check the
appropriate box below:
[ ] Section 4.14 [ ] Article XI
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 4.14 or Article XI of the Indenture, as the
case may be, state the principal amount (in integral multiples of $1,000) you
want to be purchased: $_____________
Date: Signature
----------------- ------------------------------
(Sign exactly as your name
appears on the face of
this Note)
Your Social Security or Tax Identification Number:
------------------------
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 Signature
Program (MSP);
(3) The Stock Exchange Medallion Program (SEMP).
A-10
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SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES2
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
Amount of decrease Amount of increase Principal Amount Signature of
in Principal Amount in Principal Amount of this Global Note authorized signatory
Date of Exchange of this Global Note of this Global Note decrease (or increase)of Trustee
------------------------------------------------------------------------------------------------------------------------
----------------------------
2 This should be included only if the Note is issued in global form.
A-11
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EXHIBIT B
[Form of Unit]
TRANSAMERICAN REFINING CORPORATION
UNITS
CONSISTING OF 16% SENIOR SUBORDINATED NOTES DUE 2003
AND COMMON STOCK PURCHASE WARRANTS
No. Units
CUSIP [ ]
Each Unit consists of $1,000 principal amount of 16%
Senior Subordinated Notes due 2003 of TransAmerican Refining Corporation, a
Texas corporation (hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to) and one
Warrant to purchase 13.344257 shares of Common Stock, par value $0.01 per share,
of the Company for $0.01 per share (subject to adjustment) at any time before
5:00 p.m., New York City time, on June 30, 2003 (the "Expiration Date"). The
Notes and the Warrants are not separately transferable until the earlier of (i)
December 30, 1998, (ii) commencement of the Exchange Offer (as defined in the
Indenture) and (iii) such other date as determined by ▇▇▇▇▇▇▇▇▇ & Company, Inc.
The terms of the Warrants are governed by a Warrant Agreement dated as of March
16, 1998 (the "Warrant Agreement") between the Company and First Union National
Bank, as Warrant Agent (the "Warrant Agent"), and are subject to the terms and
provisions contained therein, to all of which terms and provisions the holder of
this Unit consents by acceptance hereof. Copies of the Warrant Agreement are on
file at the office of the Warrant Agent at First Union National Bank, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Department, and are available to any Warrant holder on written request and
without cost. The Warrant shall be void unless exercised before 5:00 p.m. New
York City time on the Expiration Date.
The Company, for value received, hereby promises to
pay to ____________, or registered assigns, the principal sum of ____________
Dollars, on June 30, 2003.
Interest Payment Dates: June 30 and December 30,
commencing June 30, 1998
Record Dates: June 15 and December 15
Reference is made to the further provisions of the
Note evidenced by this Unit on the reverse side, which will, for all purposes,
have the same effect as if set forth at this place.
B-1
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IN WITNESS WHEREOF, the Company has caused this Unit to be
signed manually or by facsimile by its duly authorized officers..
Dated:
TRANSAMERICAN REFINING CORPORATION
By:
----------------------------------
Attest:
--------------------------
Secretary
[Seal]
B-2
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Unit evidences one of those Notes described in the within-mentioned
Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
as Trustee
By:
-------------------------------
Authorized Signatory
Dated:
B-3
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TRANSAMERICAN REFINING CORPORATION
UNITS
CONSISTING OF 16% SENIOR SUBORDINATED NOTES DUE 2003
AND COMMON STOCK PURCHASE WARRANTS
1. Interest.
TransAmerican Refining Corporation, a Texas corporation (the
"Company"), promises to pay interest on the principal amount of the Notes at a
rate of 16% per annum (subject to adjustment). 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 18% per annum (subject to adjustment) compounded
semi-annually.
The Company will pay interest semi-annually on June 30 and
December 30 of every year (each, an "Interest Payment Date"), commencing June
30, 1998. 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 December 30,
1997. Interest 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 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.
The Company may deliver any such interest payment to the Paying Agent or the
Company may mail any such interest payment to a Holder at the Holder's
registered address.
3. Paying Agent and Registrar.
Initially, First Union National Bank (the "Trustee") will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or so-Registrar without notice to the Holders. The Company or any of
its Subsidiaries 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
March 16, 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 TIA, 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 subordinated obligations of the Company limited in
aggregate principal amount to $25,000,000.
B-4
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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 the Redemption Price
(expressed as a percentage of the principal amount thereof) set forth below
with respect to the indicated Redemption Date, in each case, together with any
accrued but unpaid interest to the Redemption Date.
If redeemed during the
period indicated below Redemption Price
---------------------- ----------------
December 30, 1997 - June 29, 2000 . . . . . . 116.00%
June 30, 2000 - June 29, 2001 . . . . . . . . 110.67%
June 30, 2001 - June 29, 2002 . . . . . . . . 105.33%
June 30, 2002 and thereafter . . . . . . . . 100.00%
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 $l,000 and integral multiples of $1,000. 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 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. After that, all liability of the
Trustee and such Paying Agent(s) with respect to such money shall cease.
B-5
102
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 Government Securities 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 Holders of at least
a majority in aggregate value of the Notes then outstanding, and any existing
Default or Event of Default or compliance with any provision may be waived with
the consent of the Holders of a majority in aggregate value of the Notes then
outstanding. Without notice to or consent of any Holder, the parties thereto
may amend or supplement the Indenture or the Securities 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, sell assets,
change the nature of its business, 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. Change of Control.
In the event there shall occur any Change of Control, each
Holder of Notes shall have the right, at such Holder's option but subject to
the limitations and conditions set forth in the Indenture, to require the
Company to purchase on the Change of Control Payment Date in the manner
specified in the Indenture, all or any part (in integral multiples of $1,000)
of such Holder's Notes at a Change of Control Purchase Price equal to 101 % of
the principal amount thereof, together with accrued and unpaid interest, if
any, to the Change of Control Payment Date.
14. 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.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25 % in aggregate value of the Notes then
outstanding 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, Holders of a majority
in aggregate value of the Notes then outstanding 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.
B-6
103
16. 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.
17. Authentication.
The Note evidenced by this Unit shall not be valid until the
Trustee or authenticating agent signs the certificate of authentication on the
other side of this Unit.
18. 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).
19. 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 and the Units as a convenience to the
holders of the Notes and holders of the Units. No representation is made as to
the accuracy of such numbers as printed on the Notes or the Units and reliance
may be placed only on the other identification numbers printed thereon and
hereon.
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Note evidenced by this Unit, by his
acceptance thereof, acknowledges and agrees to the provisions of the
Registration Rights Agreement, dated as of March 16, 1998, between the Company
and ▇▇▇▇▇▇▇▇▇ & Company, Inc. (the "Registration Rights Agreement"), including
but not 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, ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
21. Ranking.
Payments of principal, premium, if any, interest on and
Liquidated Damages with respect to, the Notes is subordinated, to the extent
set forth in the Indenture, to the prior payment of all Senior Debt. The Notes
rank pari passu with the Series A/B Notes in right of payment.
B-7
104
TRANSAMERICAN REFINING CORPORATION
DEPOSIT OF WARRANTS TO PURCHASE COMMON STOCK OF TRANSAMERICAN REFINING
CORPORATION
Under the terms of the Warrant Agreement, and until such time as the
Holder of this Unit shall have surrendered this Unit to the Warrant Agent for
the exchange of this Unit, in whole or in part, for one or more Warrant
Certificates (as defined in the Warrant Agreement) and one or more Notes of a
like aggregate principal amount and of authorized denominations, the Holder of
this Unit is for each Unit evidenced by this certificate, the beneficial owner
of one Warrant expiring June 30, 2003, entitling the holder thereof initially
to purchase 13.344257 shares of Common Stock, par value $0.01 per share (the
"Common Stock"), of the Company (subject to adjustment as provided in the
Warrant Agreement).
The Company has deposited with the Warrant Agent, as custodian for
Holders of Units, certificates for such Warrants. Prior to the exchange of this
Unit for one or more Warrant Certificates and one or more Notes, beneficial
ownership of such Warrants is transferable only by the transfer of this Unit
pursuant to the Indenture. After such exchange, ownership of a Warrant is
transferable only by the transfer of the certificate representing such Warrant
in accordance with the provisions of the Warrant Agreement.
By accepting a Unit, each Holder of this Unit shall be bound by all of
the terms and provisions of the Warrant Agreement (a copy of which is available
on request to the Company or the Warrant Agent) as fully and effectively as if
such Holder had signed the same.
B-8
105
ELECTION TO EXERCISE WARRANTS
The undersigned registered Holder of this Unit hereby irrevocably
elects to exercise Warrants (evidenced by Warrant Certificates deposited with
the Warrant Agent the beneficial ownership of which is evidenced by this Unit)
representing the right to receive ___ shares of Common Stock, and in payment of
the Warrant Price (as defined in the Warrant Agreement) the undersigned
herewith tenders payment in money of the United States of America or by
certified or official bank check in lawful money of the United States of
America to the order of TransAmerican Refining Corporation in the amount of
$__________. The undersigned requests that a certificate representing the
Common Stock issuable upon exercise of such Warrants be registered in the name
of __________________________ whose address is ___________________________ and
that such certificate be delivered to ________________ whose address is
_________________________. All payments to be made in lieu of issuing a
fractional share should be made by check payable to
__________________________________ whose address is
______________________________________.
The undersigned hereby irrevocably instructs the Warrant Agent (A) to
deliver this Note to the Trustee pursuant to the provisions of the Indenture
with instructions to issue in the name of the registered Holder a Note in
principal amount equal to the principal amount of the Note evidenced by this
Unit; (B) to issue in the name of the undersigned registered Holder a Warrant
Certificate representing the number of Warrants equal to the difference between
(x) the number of Warrants represented by this Unit and (y) the Warrants
exercised hereby on behalf of the undersigned registered Holder; and (C) as
custodian of the Warrants on behalf of such registered Holder, to cause such
Warrants to be exercised on behalf of the undersigned Holder as provided in the
Warrant Agreement.
Dated:
Name of Holder of this Note:
--------------------------------------
Address:
--------------------------------
Signature:
------------------------------
[Note: the above signature must correspond with the name as written upon the
face of this Unit in every particular, without alteration or enlargement
whatever.]
B-9
106
ASSIGNMENT
I or we assign this Unit to:
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
(Print or type name, address and zip code of assignee)
Please insert Social Security or other identifying number of assignee:
--------------------------------------
and irrevocably appoint ____________________ agent to transfer this Unit on the
books of the Company. The agent may substitute another to act for him.
Dated:
----------
Signature:
---------------------------------------------
(Sign exactly as name appears on the other side of this Unit)
B-10
107
EXCHANGE
I or we assign the Note evidenced by this Unit to:
TransAmerican Refining Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
I.R.S. Employer Identification No.: ▇▇-▇▇▇▇▇▇▇
and irrevocably appoint ____________________ agent to transfer the Note
evidenced by this Unit on the books of the Company. The agent may substitute
another to act for him.
Dated:
----------
Signature:
---------------------------------------------
(Sign exactly as name appears on the other side of this Unit)
B-11
108
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have the Note evidenced by this Unit
purchased by the Company pursuant to Section 4.14 or Article XI of the
Indenture, check the appropriate box below:
[ ] Section 4.14 [ ] Article XI
If you want to elect to have only part of the Note evidenced
by this Unit purchased by the Company pursuant to Section 4.14 or Article XI of
the Indenture, as the case may be, state the amount you want to be purchased:
$____________
Dated:
-----------------
Signature:
-----------------------------------
(Sign exactly as your name appears
on the other side of this Unit)
Your Social Security or Tax Identification Number:
----------------
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 Signature Program (MSP)
(3) The Stock Exchange Medallion Program (SEMP)
B-12
109
EXHIBIT C
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF NOTES
Re: [Series C] [Series D] 16% Senior Subordinated 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
Note 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
accordance 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]
By:
--------------------------------
Date:
------------------------
-----------------------
* 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.
C-1