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EXHIBIT 10.27
TRANSAMERICAN ENERGY CORPORATION
$475,000,000 11 1/2% Senior Secured Notes due 2002
$1,130,000,000 13% Senior Secured Discount Notes due 2002
PURCHASE AGREEMENT
June 5, 1997
Xxxxxxxxx & Company, Inc.
00000 Xxxxx Xxxxxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
Pursuant to this Purchase Agreement (this "Agreement"), each of
TransAmerican Energy Corporation, a Delaware corporation (the "Issuer"), and
each other TransAmerican Entity (as defined below) hereby agrees with you as
follows:
1. Issuance of Securities. The Issuer proposes to issue and sell to
Xxxxxxxxx & Company, Inc. (the "Purchaser") $475,000,000 aggregate principal
amount of 11 1/2% Senior Secured Notes due 2002, Series A (the "Series A Senior
Secured Notes") and $1,130,000,000 aggregate principal amount of 13% Senior
Secured Discount Notes due 2002, Series A (the "Series A Senior Secured
Discount Notes" and, together with the Series A Senior Secured Notes, the
"Series A Notes"). The Series A Notes will be issued pursuant to an indenture,
to be dated as of June 13, 1997 (the "Indenture"), among the Issuer and Firstar
Bank of Minnesota, N.A., as trustee (the "Trustee"). The obligations under the
Notes (as defined below in Section 3) will be secured by security interests in
or pledges of (the "Security Interests") certain assets (the "Collateral") of
the Issuer as set forth in the Offering Circular (defined below).
The Series A Notes will be offered and sold to the Purchaser
pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "Securities Act"). The Issuer has
prepared a preliminary offering circular dated May 14, 1997 (the "Preliminary
Offering Circular") and a final offering circular dated June 5, 1997 (the
"Offering Circular") relating to the offer and sale of the Series A Notes (the
"Offering").
Upon original issuance thereof, and until such time as the same
is no longer required under the applicable requirements of the Securities Act,
the Series A Notes shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER
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SUCH SECURITY, PRIOR TO THE DATE THAT IS TWO YEARS (OR SUCH SHORTER
PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) UNDER THE
SECURITIES ACT AS PERMITTING RESALES BY NON-AFFILIATES OF RESTRICTED
SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH TRANSAMERICAN ENERGY CORPORATION
(THE "COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY) 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 SECURITIES
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, OR
(E) 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
CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS 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 SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE.
2. Agreements to Sell and Purchase. On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions hereof, the Issuer shall issue and sell to the Purchaser,
and the Purchaser shall purchase from the Issuer, $475,000,000 aggregate
principal amount of Series A Senior Secured Notes and $1,130,000,000 aggregate
principal amount of Series A Senior Secured Discount Notes. The purchase price
for the Series A Senior Secured Notes shall be $463,125,000, and the purchase
price for the Series A Senior Secured Discount Notes shall be $853,125,000.
3. Terms of Offering. The Purchaser has advised the Issuer that the
Purchaser will make offers to sell (the "Exempt Resales") some or all of the
Series A Notes purchased by the Purchaser hereunder on the terms set forth in
the Offering Circular, as amended or supplemented, solely to persons whom the
Purchaser reasonably believes to be "qualified institutional buyers" as defined
in Rule 144A under the Securities Act ("QIBs" or "Eligible Purchasers").
Holders of the Series A Notes (including subsequent transferees)
will have the registration rights set forth in the registration rights
agreement (the "Registration Rights Agreement"), to be executed on and dated as
of the Closing Date (as defined below in Section 4). Pursuant to the
Registration Rights Agreement, the Issuer and the other TransAmerican Entities
(as defined below) will agree, among other things, to file with the Securities
and Exchange Commission (the "Commission") (i) a registration statement
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under the Securities Act (the "Exchange Offer Registration Statement") relating
to, among other things, the 11 1/2% Senior Secured Notes due 2002, Series B, of
the Issuer (the "Series B Senior Secured Notes") and the 13% Senior Secured
Discount Notes due 2002, Series B, of the Issuer (the "Series B Senior Secured
Discount Notes" and, together with Series A Notes and the Series B Senior
Secured Notes the "Notes"), identical in all respects to the Series A Senior
Secured Notes and the Series A Senior Secured Discount Notes, respectively,
(except for references to series and restrictive legends) to be offered in
exchange for the Series A Notes (such offer to exchange being referenced herein
as the "Registered Exchange Offer") and/or (ii) under certain circumstances, a
shelf registration statement pursuant to Rule 415 under the Securities Act (the
"Shelf Registration Statement") relating to the resale by certain holders of
the Series A Notes.
On the Closing Date, the following transactions shall occur:
(a) The Issuer will enter into a security and pledge agreement
(the "Issuer Pledge Agreement") and a collateral assignment (the "Issuer
Collateral Assignment") relating to each of the TARC Mortgage, the
TransTexas Texas Mortgage, the TransTexas Louisiana Mortgage, the
TransTexas Mississippi Mortgage, the TransTexas Alabama Mortgage, the
TransTexas North Dakota Mortgage, the TARC Pledge and the TransTexas
Pledge, that will provide for the grant of the Security Interests in the
Collateral to the Trustee, as collateral agent (in such capacity, the
"Collateral Agent"), for the benefit of the holders of the Notes. The
Security Interests will secure the payment and performance when due of
all of the obligations of the Issuer under the Indenture, the Notes, and
the Issuer Pledge Agreement.
(b) The Issuer and TransAmerican Refining Corporation, a Texas
corporation ("TARC"), will enter into a loan agreement (the "TARC Loan
Agreement"), pursuant to which the Issuer shall lend to TARC a portion
of the proceeds from the offering and sale of the Series A Notes and
TARC will execute a promissory note in favor of the Issuer (the "TARC
Intercompany Note") all as described in the Offering Circular. The
obligations of TARC under the TARC Loan Agreement and the TARC
Intercompany Note will be secured by (i) an act of mortgage, assignment
of leases and rents, security agreement and financing statement (the
"TARC Mortgage") and (ii) a security and pledge agreement that will
provide for the grant of a security interest in certain collateral to
the Issuer (the "TARC Pledge").
(c) The Issuer and TransTexas Gas Corporation, a Delaware
corporation ("TransTexas"), will enter into a loan agreement (the
"TransTexas Loan Agreement"), pursuant to which the Issuer shall lend to
TransTexas a portion of the proceeds from the offering and sale of the
Series A Notes and TransTexas will execute a promissory note in such
amount in favor of the Issuer (the "TransTexas Intercompany Note") all
as described in the Offering Circular. The obligations of TransTexas
under the TransTexas Loan Agreement and the TransTexas Intercompany Note
will be secured by (i) a mortgage, deed of trust, security agreement and
financing statement, relating to certain properties located in the State
of Texas (the "TransTexas Texas Mortgage"), (ii) an act of mortgage,
assignment of leases and rents, security agreement and financing
statement, relating to certain properties located in the State of
Louisiana (the "TransTexas Louisiana Mortgage"), (iii) a mortgage, deed
of trust, assignment of leases and rents, security agreement and
financing statement, relating to certain properties located in the State
of Mississippi (the "TransTexas Mississippi Mortgage"), (iv) a mortgage,
deed of trust, assignment of leases and rents, security agreement and
financing statement, relating to certain properties
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located in the State of Alabama (the "TransTexas Alabama Mortgage"), (v)
a mortgage, assignment of leases and rents, security agreement and
financing statement, relating to certain properties located in the State
of North Dakota (the "TransTexas North Dakota Mortgage") and (vi) a
security and pledge agreement that will provide for the grant of a
security interest in certain collateral to the Issuer (the "TransTexas
Pledge").
(d) The Issuer and TARC will also enter into a disbursement
agreement (the "TARC Disbursement Agreement") with Firstar Bank of
Minnesota, N.A., as disbursement agent, Firstar Bank of Minnesota, N.A.,
as trustee, and Xxxxx & X'Xxxxx, Inc., as construction supervisor,
pursuant to which funds will be deposited in an account which will
secure the obligations of TARC under the TARC Loan Agreement and the
TARC Intercompany Note.
(e) The Issuer and TransTexas will also enter into a
disbursement agreement (the "TransTexas Disbursement Agreement") with
Firstar Bank of Minnesota, N.A., as disbursement agent, pursuant to
which funds will be deposited in an account which will secure the
obligations of TransTexas under the TransTexas Loan Agreement and the
TransTexas Intercompany Note.
The Issuer has previously entered into the Dealer Manager
Agreement dated May 14, 1997 (the "Issuer Dealer Manager Agreement") with
Xxxxxxxxx & Company, Inc., as dealer manager; XXXX has previously entered into
the Dealer Manager Agreement dated May 14, 1997 (the "TARC Dealer Manager
Agreement") with Xxxxxxxxx & Company, Inc., as dealer manager; and TransTexas
has previously entered into the Dealer Manager Agreement dated May 14, 1997
(the "TransTexas Dealer Manager Agreement" and together with the Issuer Dealer
Manager Agreement and the TARC Dealer Manager Agreement, the "Dealer Manager
Agreements") with Xxxxxxxxx & Company, Inc., as dealer manager. The TARC Loan
Agreement, the TARC Intercompany Note, the TARC Mortgage, the TARC Pledge, the
TransTexas Loan Agreement, the TransTexas Intercompany Note, the TransTexas
Texas Mortgage, the TransTexas Louisiana Mortgage, the TransTexas Mississippi
Mortgage, the TransTexas Alabama Mortgage, the TransTexas North Dakota Mortgage
and the TransTexas Pledge are referenced herein as the "Intercompany Loan
Documents." This Agreement, the Dealer Manager Agreements, the Indenture, the
Notes, the Registration Rights Agreement, the Issuer Pledge Agreement, the
Issuer Collateral Assignment, the Intercompany Loan Documents, the TARC
Disbursement Agreement, the TransTexas Disbursement Agreement, any
intercreditor agreement contemplated by the Offering Circular and all other
documents and instruments executed by the Issuer or any of the Subsidiaries (as
defined below in Section 6(c)) in connection with the transactions contemplated
hereby and thereby are referenced herein as the "Documents." The Issuer, TARC
and TransTexas are referenced collectively herein as the "TransAmerican
Entities." The transactions contemplated by the Documents, including without
limitation, the Lobo Sale (as defined in the Offering Circular), the Offering
and the use of the proceeds therefrom as described in the Offering Circular,
are collectively referenced herein as the "Transactions."
4. Delivery and Payment. Delivery to the Purchaser of and payment
for the Series A Notes shall be made at a Closing (the "Closing") to be held at
9:00 a.m., New York City time, on June 13, 1997 (the "Closing Date") at the
offices of Gardere & Xxxxx L.L.P., 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000, Xxxxx. The Closing Date and the location of delivery of and the form of
payment for the Series A Notes may be varied by agreement between the Purchaser
and the Issuer.
The Issuer shall deliver to the Purchaser (i) one or more
certificates representing the Series A Senior Secured Notes and the Series A
Senior Secured Discount Notes (the "Global Securities"), each
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in definitive form, registered in the name of Cede & Co., as nominee of The
Depository Trust Company ("DTC"), or such other names as the Purchaser may
request upon at least one business day's notice to the Issuer, in an amount
corresponding to the aggregate principal amount of the Series A Senior Secured
Notes and the Series A Senior Secured Discount Notes sold pursuant to Exempt
Resales to QIBs, and (ii) one or more certificates representing the Series A
Senior Secured Notes and the Series A Senior Secured Discount Notes (the
"Individual Securities") in definitive form, registered in such names and
denominations as the Purchaser may so request, in an aggregate amount
corresponding to the aggregate principal amount of Senior Secured Notes or the
Series A Senior Secured Discount Notes, as the case may be, sold pursuant to
Exempt Resales to non U.S. persons pursuant to offers and sales that occur
outside the United States of America in reliance on Regulation S under the
Securities Act in each case against payment by the Purchaser of the purchase
price therefor by immediately available Federal funds bank wire transfer to
such bank account as the Issuer shall designate at least two business days
prior to the Closing. In compensation of delivery of payment by the Purchaser
in same day funds, the Issuer hereby acknowledges that the Purchaser will
deduct from the purchase price an amount equal to the Purchaser's cost of funds
with respect thereto for the period between the date on which such funds are
wire transferred and the next business day.
The Global Securities and the Individual Securities in definitive
form shall be made available to the Purchaser for inspection at such place as
shall be acceptable to the Purchaser not later than 9:30 a.m. on the business
day immediately preceding the Closing Date.
5. Agreements of the Issuer. The Issuer hereby agrees:
(a) To prepare the Offering Circular in a form approved by the
Purchaser; to make no amendment or any supplement to the Offering
Circular which shall be disapproved by the Purchaser promptly after
reasonable notice thereof; and to furnish the Purchaser with copies
thereof.
(b) To (i) advise the Purchaser promptly after obtaining
knowledge (and, if requested by the Purchaser, confirm such advice in
writing) of (A) the issuance by any state securities commission of any
stop order suspending the qualification or exemption from qualification
of any of the Notes for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purpose by any state securities
commission or other regulatory authority, or (B) the happening of any
event that makes any statement of a material fact made in the Offering
Circular untrue or that requires the making of any additions to or
changes in the Offering Circular in order to make the statements
therein, in the light of the circumstances under which they are made,
not misleading, (ii) use its best efforts to prevent the issuance of any
stop order or order suspending the qualification or exemption from
qualification of any of the Notes under any state securities or Blue Sky
laws, and (iii) if at any time any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of any of the Notes under any such laws,
use its best efforts to obtain the withdrawal or lifting of such order
at the earliest possible time.
(c) To (i) furnish the Purchaser, without charge, as many
copies of the Offering Circular, and any amendments or supplements
thereto, as the Purchaser may request and (ii) promptly prepare, upon
the Purchaser's request, any amendment or supplement to the Offering
Circular that the Purchaser xxxxx xxx be reasonably necessary in
connection with Exempt Resales
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(and the TransAmerican Entities hereby consent to the use by the
Purchaser of the Preliminary Offering Circular prior to the availability
of the Offering Circular, and after such availability, to the use by the
Purchaser of the Offering Circular and any amendments and supplements
thereto, in connection with Exempt Resales).
(d) Not to amend or supplement the Offering Circular prior to
the Closing Date unless the Purchaser shall previously have been advised
thereof and shall not have objected thereto within five business days
after being furnished a copy thereof.
(e) So long as the Purchaser shall hold any Notes, (i) if any
event shall occur as a result of which, in the reasonable judgment of
the Issuer or the Purchaser, it becomes necessary or advisable to amend
or supplement the Offering Circular in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary to amend or supplement the
Offering Circular to comply with Applicable Law (defined below),
forthwith to prepare an appropriate amendment or supplement to the
Offering Circular (in form and substance satisfactory to the Purchaser)
so that (A) as so amended or supplemented the Offering Circular will not
include an untrue statement of material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (B)
the Offering Circular will comply with applicable law and (ii) if it
becomes necessary or advisable to amend or supplement the Offering
Circular so that the Offering Circular will contain all of the
information specified in, and meet the requirements of, Rule
144(A)(d)(4) of the Securities Act, forthwith to prepare an appropriate
amendment or supplement to the Offering Circular (in form and substance
satisfactory to the Purchaser) so that the Offering Circular, as so
amended or supplemented, will contain the information specified in, and
meet the requirements of, such Rule.
(f) Promptly from time to time to take such action as
Purchaser may reasonably request in connection with the qualification of
the Notes for offering and sale under the securities or Blue Sky laws of
such jurisdictions as the Purchaser may request and to comply with such
laws so as to permit the continuance of such qualification in effect so
long as reasonably required for Exempt Resales; provided, that no
TransAmerican Entity shall be required in connection therewith to file
any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction where it is not now so qualified.
(g) Regardless of whether any of the Transactions are
consummated or this Agreement is terminated, to pay or cause to be paid
(i) all costs, expenses, fees and taxes incident to and in connection
with: (A) the preparation, printing and distribution of the Preliminary
Offering Circular and the Offering Circular and all amendments and
supplements thereto (including, without limitation, financial statements
and exhibits), and all preliminary and final Blue Sky memoranda and all
other agreements, memoranda, correspondence and other documents prepared
and delivered in connection herewith, (B) the printing, processing and
distribution (including, without limitation, word processing and
duplication costs) and delivery of, and performance under, each of the
Documents, (C) the issuance and delivery of the Notes, (D) the
qualification of the Notes for offer and sale under the securities or
Blue Sky laws of the several states (including, without limitation, the
fees and disbursements of the Purchaser's counsel relating to such
registration or qualification), (E) furnishing such copies of the
Preliminary Offering Circular and the Offering Circular, and all
amendments and supplements thereto, as may reasonably be requested for
use by
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the Purchaser, and (F) the preparation of the Notes (including, without
limitation, printing and engraving thereof), (ii) all reasonable fees,
disbursements and expenses of the counsel and accountants of the
TransAmerican Entities, (iii) all expenses and listing fees in
connection with the application for quotation of the Notes in the
Private Offerings, Resales and Trading Through Automatic Linkages
("PORTAL") market of the National Association of Securities Dealers,
Inc. ("NASD"), (iv) all reasonable fees and expenses (including fees and
expenses of counsel) of the TransAmerican Entities in connection with
approval of the Notes by DTC for "book-entry" transfer, (v) all fees
charged by rating agencies in connection with the rating of the Notes,
(vi) all reasonable fees and expenses of the Trustee and any agent of
the Trustee and the fees and disbursements of counsel for the Trustee in
connection with the Indenture and the Notes and (vii) all reasonable
fees and expenses (including reasonable fees and expenses of counsel)
incurred by the Purchaser in connection with the preparation,
negotiation and execution of the Documents and the consummation of the
Transactions.
(h) To use the proceeds from the sale of the Series A Notes
substantially in the manner described in the Offering Circular under the
caption "Use of Proceeds."
(i) To the extent it may lawfully do so, not to insist upon,
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension, usury or other law, wherever enacted,
now or at any time hereafter in force, that would prohibit or forgive
the payment of all or any portion of the principal of or interest on the
Notes, the TARC Intercompany Note or the TransTexas Intercompany Note,
or that may affect the covenants or the performance of the Indenture,
the TARC Loan Agreement, the TransTexas Loan Agreement or any of the
other Documents (and, to the extent it may lawfully do so, each
TransAmerican Entity hereby expressly waives all benefit or advantage of
any such law, and covenants that it shall not, by resort to any such
law, hinder, delay or impede the execution of any power granted to the
Trustee in the Indenture, to the Collateral Agent in the Issuer Pledge
Agreement, or to the Issuer in any of the Intercompany Loan Documents,
but shall suffer and permit the execution of every such power as though
no such law had been enacted).
(j) To do and perform all things required to be done and
performed by it under the Documents prior to and after the Closing Date.
(k) Not to, and to ensure that no affiliate (as defined in
Rule 501(b) of the Securities Act) of the Issuer will, sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Securities Act) that would be integrated
with the sale of the Series A Senior Secured Notes or the Series A
Senior Secured Discount Notes in a manner that would require the
registration under the Securities Act of the sale to the Purchaser or to
the Eligible Purchasers of the Series A Senior Secured Notes or the
Series A Senior Secured Discount Notes.
(l) For so long as any of the Notes remain outstanding, during
any period in which the Issuer is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to
furnish at its own expense, upon request, to any owner of the Notes in
connection with any sale thereof and any prospective Eligible Purchaser
of such Notes from such owner, the information required by Rule
144A(d)(4) under the Securities Act.
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(m) To comply with the representation letter of the Issuer to
DTC relating to the approval of the Notes by DTC for "book-entry"
transfer.
(n) To use its best efforts to effect the inclusion of the
Notes in PORTAL.
(o) To file with the Commission, not later than 15 days after
the Closing Date, five copies of a notice on Form D under the Securities
Act (one of which will be manually signed by a person duly authorized by
the Issuer); to otherwise comply with the requirements of Rule 503 under
the Securities Act; and to furnish promptly to you evidence of each such
required timely filing, including a copy thereof.
(p) For so long as the Notes are outstanding, and regardless
of whether required to do so by the rules and regulations of the
Commission, to furnish to the Trustee and deliver or cause to be
delivered to the holders of the Notes and the Purchaser as soon as
practicable (i) all quarterly and annual financial information that
would be required to be contained in a filing with the Commission on
Forms 10-Q and 10-K if the Issuer were required to file such Forms,
including for each a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and, with respect to the annual
information only, a report thereon by the Issuer's independent certified
public accountants including a balance sheet and statements of income,
shareholder's equity and cash flows of the Issuer and the Subsidiaries
and (ii) all reports that would be required to be filed with the
Commission on Form 8-K if the Issuer were required to file such reports.
(q) Except in connection with the Registered Exchange Offer or
the filing of the Shelf Registration Statement, not to, and not to
authorize or permit any person acting on its behalf to, (i) distribute
any offering material in connection with the offering and sale of the
Notes other than the Preliminary Offering Circular and the Offering
Circular and any amendments and supplements to the Offering Circular
prepared in compliance with Section 5(d) hereof or (ii) solicit any
offer to buy or offer to sell the Notes by means of any form of general
solicitation or general advertising (including, without limitation, as
such terms are used in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2) of
the Securities Act.
(r) Not to, directly or indirectly, without the prior consent
of the Purchaser, offer, sell, grant any option to purchase, or
otherwise dispose (or announce any offer, sale, grant of any option to
purchase or other disposition) of any securities of any of them for a
period of 90 days after the date of the Offering Circular, except as
contemplated by the Registration Rights Agreement or the Offering
Circular.
(s) For so long as the Purchaser shall hold any Notes, to
notify the Purchaser promptly in writing if any TransAmerican Entity or
Affiliate of a TransAmerican Entity becomes a party in interest or a
disqualified person with respect to any employee benefit plan. The
terms "ERISA," "Affiliates," "party in interest," "disqualified person"
and "employee benefit plan" shall have the meanings as set forth in
Section 6(y) hereof.
(t) Not to be or become, at any time prior to the expiration
of three years after the Closing Date, an open-end investment company,
unit investment trust, closed-end investment company or face-amount
certificate company that is or is required to be registered under
Section 8 of the Investment Company Act of 1940, as amended.
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6. Representations and Warranties of the Issuer. The Issuer
represents and warrants to the Purchaser that:
(a) Each of the Preliminary Offering Circular and the Offering
Circular, both including the Annual Reports on Form 10-K for the fiscal
year ended January 31, 1997 of each of the TransAmerican Entities, as of
its respective date does not, and the Offering Circular as of the
Closing Date will not, and each supplement or amendment thereto as of
its date will not, contain any untrue statement of a material fact or
omit to state any material fact (except, in the case of the Preliminary
Offering Circular, for pricing terms and other financial terms
intentionally left blank) required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Any reference herein to the
Preliminary Offering Circular or the Offering Circular shall be deemed
to refer to and include the most recent Annual Reports on Form 10-K of
each of the TransAmerican Entities and all subsequent documents filed by
any of the TransAmerican Entities with the Commission pursuant to
Section 13(a), 13(c) or 15(d) of the Exchange Act on or prior to the
date of the Preliminary Offering Circular or the Offering Circular, as
the case may be, and any reference herein to the Preliminary Offering
Circular or the Offering Circular, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include (i)
any documents filed by any of the TransAmerican Entities with the
Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act
after the date of the Preliminary Offering Circular or the Offering
Circular, as the case may be, and prior to such specified date; and all
documents filed under the Exchange Act (the "Exchange Act Reports") are
so deemed to be included in the Preliminary Offering Circular or the
Offering Circular, as the case may be, or any amendment or supplement
thereto. The Exchange Act Reports, when they were or are filed with the
Commission, conformed or will conform in all material respects to the
applicable requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder. No injunction or order has
been issued that either (i) asserts that any of the Transactions is
subject to the registration requirements of the Securities Act or (ii)
would prevent or suspend the issuance or sale of the Notes or the use of
the Preliminary Offering Circular, the Offering Circular, or any
amendment or supplement thereto, in any jurisdiction. Each of the
Preliminary Offering Circular and the Offering Circular, as of their
respective dates contained, and the Offering Circular as amended or
supplemented as of the Closing Date will contain, all the information
specified in, and meet the requirements of, Rule 144A(d)(4) under the
Securities Act.
(b) Each of the Issuer and each Subsidiary (as defined below)
(i) has been duly incorporated, is validly existing and is in good
standing under the laws of its jurisdiction of organization, (ii) has
full corporate power and authority to conduct its business and to own,
lease and operate its properties and assets as described in the Offering
Circular and (iii) is duly registered and qualified to conduct its
business and is in good standing as a foreign corporation authorized to
do business in each jurisdiction or place in which the nature of such
businesses or the ownership or leasing of such properties requires such
registration or qualification, except where the failure to be so
registered or qualified would not have a Material Adverse Effect (as
defined below in Section 6(d)).
(c) Immediately following the Closing, the only direct or
indirect subsidiaries of the Issuer (collectively, the "Subsidiaries")
will be TARC, TransTexas and the other corporations identified on
Schedule 6(c). There are no outstanding (x) securities convertible into
or
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exchangeable for any capital stock of the Issuer or any of the
Subsidiaries, (y) options, warrants or other rights to purchase or
subscribe to capital stock of the Issuer or any of the Subsidiaries or
securities convertible into or exchangeable for capital stock of the
Issuer or any of the Subsidiaries (other than the TARC Warrants (as
defined in below in Section 9(a)(vii))) or (z) contracts, commitments,
agreements, understandings, arrangements, calls or claims of any kind
relating to the issuance of any capital stock of the Issuer or any of
the Subsidiaries, any such convertible or exchangeable securities or any
such options, warrants or rights (other than the Reimbursement and
Credit Agreement dated as of January 25, 1996, as amended, between
TransTexas and SunAmerica, Inc.). Immediately following the Closing,
the Issuer will not directly or indirectly own any capital stock or
other equity interest in any person other than the Subsidiaries.
(d) Immediately following the Closing, the total authorized
capital stock of the Issuer shall consist of (i) 100,000 shares of
common stock, $0.01 par value, of which 9,000 shares shall be issued and
outstanding and (ii) 1,000 shares of preferred stock, $0.01 par value.
All of the outstanding shares of capital stock of the Issuer have been
duly authorized and validly issued, and all of the outstanding shares of
common stock of the Issuer are owned beneficially and of record by
TransAmerican Natural Gas Corporation, a Texas corporation. Immediately
following the Closing, the total authorized capital stock of TransTexas
shall consist of 100,000,000 shares of common stock, $0.01 par value, of
which 74,000,000 shares shall be issued and outstanding. All of the
outstanding shares of capital stock of TransTexas have been duly
authorized and validly issued, are fully paid and nonassessable, and
were not issued in violation of, and are not subject to, any preemptive
or similar rights. The Issuer owns 40,000,000 of such shares
beneficially, free and clear of Liens (except for Liens securing the
Notes and Liens securing the TARC Notes). Immediately following the
Closing, the total authorized capital stock of TARC shall consist of
100,000,000 shares of common stock, $0.01 par value, of which 30,000,000
shares shall be issued and outstanding. All of the outstanding shares
of capital stock of TARC have been duly authorized and validly issued,
are owned beneficially and of record by the Issuer, free and clear of
Liens (except Liens securing the Notes and Liens securing the TARC
Notes), are fully paid and nonassessable, and were not issued in
violation of, and are not subject to, any preemptive or similar rights.
The table under the caption "Capitalization of TEC" in the Offering
Circular (including the footnotes thereto) sets forth, as of its date,
(i) the capitalization of the Issuer and its Subsidiaries on a
consolidated basis and (ii) the pro forma capitalization of the Issuer
and its subsidiaries on a consolidated basis after giving effect to the
transactions described in the Offering Circular. The table under the
caption "Capitalization of TransTexas" in the Offering Circular
(including the footnotes thereto) sets forth, as of its date, (i) the
capitalization of TransTexas and its Subsidiaries on a consolidated
basis and (ii) the pro forma capitalization of TransTexas and its
Subsidiaries on a consolidated basis after giving effect to the
transactions described in the Offering Circular. The table under the
caption "Capitalization of TARC" in the Offering Circular (including the
footnotes thereto) sets forth, as of its date, (i) the capitalization of
TARC and its subsidiaries on a consolidated basis and (ii) the pro forma
capitalization of TARC and its Subsidiaries on a consolidated basis
after giving effect to the transactions described in the Offering
Circular. Except as set forth in such tables, immediately following the
Closing, neither the Issuer nor any of the Subsidiaries shall have any
liabilities, absolute, accrued, contingent or otherwise other than (x)
liabilities that are recorded or disclosed in the Financial Statements
(defined below), or (y) liabilities incurred subsequent to the date
thereof in the ordinary course of business, consistent with past
practice, that would not, singly or in the aggregate, reasonably be
expected to have a material adverse effect (a "Material Adverse Effect")
on (i) the properties, business, prospects, operations,
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earnings, assets, liabilities or condition (financial or otherwise) of
any of the TransAmerican Entities and its Subsidiaries, taken as a
whole, (ii) the ability of any TransAmerican Entity to perform its
obligations under any of the Documents or (iii) the perfection or
priority of any Security Interest in any portion of the Collateral.
(e) Except for this Agreement, the Registration Rights
Agreement, the other Documents and agreements previously disclosed in
documents filed by any of the TransAmerican Entities with the
Commission, neither the Issuer nor any of the Subsidiaries has entered
into any pending agreement (i) to register its securities under the
Securities Act or (ii) other than as contemplated by the Offering
Circular, to purchase or offer to purchase any securities of the Issuer,
any of the Subsidiaries or any of their respective affiliates.
(f) Each TransAmerican Entity has all requisite power and
authority to enter into, deliver and perform its obligations under the
Documents to which it is a party and to consummate the Transactions.
Each of the Documents has been duly and validly authorized by each
TransAmerican Entity that is, or will be, a party thereto, and this
Agreement is, and when executed and delivered on the Closing Date
(assuming the due authorization, execution and delivery thereof by the
other parties thereto) each other Document will be, a legal, valid and
binding obligation of each TransAmerican Entity that is a party hereto
or thereto, enforceable against each such person in accordance with its
terms, subject to (i) any applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditor's rights and remedies generally and (ii) general principles of
equity (regardless of whether enforcement is sought in a proceeding at
equity or at law). When executed and delivered, each Document will
conform in all material respects to the description thereof in the
Offering Circular. On the Closing Date, the Indenture will conform to
the requirements of the Trust Indenture Act of 1939, as amended (the
"TIA"), applicable to an indenture that is required to be qualified
under the TIA.
(g) The Series A Notes have been duly and validly authorized
by the Issuer for issuance and sale to the Purchaser pursuant to this
Agreement and, when executed and authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the Purchaser in
accordance with the terms hereof, will be legal, valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance
with their terms, subject to (i) any applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or affecting
creditor's rights and remedies generally, and (ii) general principles of
equity (regardless of whether enforcement is sought in a proceeding at
equity or at law). The Series B Senior Secured Notes and the Series B
Senior Secured Discount Notes have been duly and validly authorized by
the Issuer and, when executed, authenticated and delivered in accordance
with the terms of the Indenture and the Registration Rights Agreement,
will be legal, valid and binding obligations of the Issuer, enforceable
against the Issuer in accordance with their terms, subject to (i) any
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws relating to or affecting creditors' rights and remedies
generally and (ii) general principles of equity (regardless of whether
enforcement is sought in a proceeding at equity or at law).
(h) Neither the Issuer nor any of the Subsidiaries is (i) in
violation of its respective charter or by-laws or similar organizational
documents, each as amended to the Closing Date (collectively, "Charter
Documents"), other than violations that would not, singly or in the
aggregate, result in a Material Adverse Effect, (ii) in violation of any
Federal, state, local or
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foreign statute, law (including, without limitation, common law) or
ordinance, or any judgment, decree, rule, regulation or order
(collectively, "Applicable Law") of any government, governmental or
regulatory agency or body, court or arbitrator, domestic or foreign
(each, a "Governmental Authority"), other than violations that would
not, singly or in the aggregate, result in a Material Adverse Effect or
(iii) other than breaches or defaults that would not, singly or in the
aggregate, result in a Material Adverse Effect, in breach of or default
under (with the passage of time or otherwise) any bond, debenture, note
or other evidence of indebtedness, indenture, mortgage, deed of trust,
lease or any other agreement or instrument to which any such person is a
party or by which any of them or their respective property is bound
(collectively, "Applicable Agreements"). There exists no condition
that, with the passage of time or otherwise, would constitute a
violation of such Charter Documents or Applicable Laws or a breach of or
default under any Applicable Agreement or result in the imposition of
any penalty or the acceleration of any indebtedness, other than
breaches, violations, penalties, defaults or conditions that shall have
been waived prior to Closing or that would not, singly or in the
aggregate, result in a Material Adverse Effect.
(i) Neither the execution, delivery or performance of the
Documents nor the consummation of the Transactions will conflict with,
violate, constitute a breach of or a default (with the passage of time
or otherwise) under, require the consent of any person (other than
consents obtained prior to Closing) under, result in the imposition of a
Lien on any assets of the Issuer or any of the Subsidiaries (except
pursuant to the Documents), or result in an acceleration of indebtedness
pursuant to (i) the Charter Documents of the Issuer or any of the
Subsidiaries, (ii) any Applicable Agreement, other than such breaches,
violations or defaults that shall have been waived prior to Closing or
would not, singly or in the aggregate, result in a Material Adverse
Effect or (iii) any Applicable Law. After giving effect to the
Transactions, no Default or Event of Default (as defined in the
Indenture) will exist.
(j) No permit, authorization, approval, consent, certificate,
license or order of, or filing, registration or qualification with, any
Governmental Authority (collectively, "Permits") and no approval or
consent of any other person, is required in connection with, or as a
condition to, the execution, delivery or performance of any of the
Documents or the consummation of any of the Transactions, other than
such Permits (i) as have been made or obtained on or prior to the
Closing Date, (ii) as are not required to be made or obtained on or
prior to the Closing Date that will be made or obtained when required or
(iii) the failure of which to make or obtain would not, singly or in the
aggregate, result in a Material Adverse Effect.
(k) Except as adequately disclosed in the Offering Circular,
(A) there is no action, claim, suit or proceeding (including, without
limitation, an investigation or partial proceeding, such as a
deposition), domestic or foreign (collectively, "Proceedings"), pending
or, to the knowledge of the Issuer or the Subsidiaries, threatened
against the Issuer or the Subsidiaries, that (i) would be required to be
described in the Offering Circular or Preliminary Offering Circular, if
Item 103 of Regulation S-K under the Securities Act were to apply to the
Offering Circular, (ii) seek to restrain, enjoin, prevent the
consummation of, or otherwise challenges any of the Documents or any of
the Transactions or (iii) could, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect and (B) neither the Issuer
nor any of the Subsidiaries is subject to any judgment, order, decree,
rule or regulation of any Governmental Authority that could, singly or
in the aggregate, have a Material Adverse Effect.
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(l) Each of the Issuer and the Subsidiaries has such Permits
as are necessary to own, lease and operate the properties and to conduct
the businesses described in the Offering Circular other than those the
failure of which to have could not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect. All such
Permits are in full force and effect. None of the Issuer and the
Subsidiaries has received any notice or threat of Proceedings relating
to the revocation or modification of any such Permits. Each of the
Issuer and the Subsidiaries has fulfilled and performed in all material
respects all of its current obligations with respect to such Permits,
subject to such qualifications as may be set forth in the Offering
Circular. The property and business of the Issuer and the Subsidiaries
conform in all material respects to the descriptions thereof contained
in the Offering Circular and Preliminary Offering Circular. No event
has occurred that allows, or after notice or lapse of time would allow,
the revocation or termination by the issuer of any such Permits or which
results in any material impairment of the rights of the holder of any
such Permits. Neither the Issuer nor any of the Subsidiaries has any
reason to believe that any issuer is considering limiting, suspending or
revoking any such Permit.
(m) Except as would not have a Material Adverse Effect,
immediately following the Closing, the Issuer and the Subsidiaries (i)
will have good, valid and defensible title, free and clear of all Liens
(except for Permitted Liens (as defined below)), to substantially all
property and assets described in the Offering Circular as being owned by
them after the Lobo Sale (as defined in the Offering Circular),
including, without limitation, the assets described in the reserve
report of Netherland, Xxxxxx & Associates, Inc., dated April 28, 1997
(the "Reserve Report"), which report is included as Annex C to the
Preliminary Offering Circular and (ii) will be entitled to enjoy
peaceful and undisturbed possession under all leases to which any of
them is a party as lessee. "Permitted Liens" means, collectively, (i)
Permitted Liens as defined in the Indenture, (ii) Liens on assets
securing Indebtedness outstanding under the Notes and (iii) Purchase
Money Liens as defined in the Indenture. All Applicable Agreements are
in full force and effect and are legal, valid and binding obligations of
the Issuer or the Subsidiaries party to such agreement, and no default
has occurred or is continuing thereunder, other than such defaults that
would not, singly or in the aggregate, have a Material Adverse Effect.
TransTexas and its subsidiaries own, in the aggregate, respective
undivided working interests and net revenue interests in the leases upon
which the Reserve Report is based of not materially less, in the
aggregate, than those set forth in the Reserve Report. Except as
described in the Offering Circular, with respect to the leases covering
all xxxxx and lands to which value has been ascribed in the Reserve
Report, TransTexas and its subsidiaries have valid, subsisting and
enforceable leases, superior and paramount to all other leases
respecting the properties to which they pertain, and all rentals,
royalties and other amounts due and payable in accordance with the terms
of the leases have been duly paid or provided for, and such leases are
in full force and effect, except, in each case, for any inaccuracies in
the foregoing that would not, singly or in the aggregate, result in a
Material Adverse Effect. The Issuer and the Subsidiaries maintain
insurance covering their properties, operations, personnel and
businesses against such losses and risks as they reasonably deem
adequate in accordance with customary industry practice. Any such
insurance is outstanding and duly in force.
(n) Upon execution and delivery thereof, the Issuer Pledge
Agreement will create, in favor of the Collateral Agent, for the benefit
of the holders of the Notes, a valid grant of a security interest in the
Collateral and the proceeds thereof and, upon the filings or the
recording required by the Issuer Pledge Agreement, the Collateral Agent
will have, other than with respect to Permitted Liens, a first priority
perfected security interest in the Collateral, subject to the prior
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liens securing the TARC Notes and the prior liens securing the
TransTexas Senior Notes (as defined below in Section 9(a)(vii)). Upon
execution and delivery thereof, each of the TARC Mortgage, the TARC
Pledge, the TransTexas Texas Mortgage, the TransTexas Louisiana
Mortgage, the TransTexas Mississippi Mortgage, the TransTexas Alabama
Mortgage, the TransTexas North Dakota Mortgage and the TransTexas Pledge
will create, in favor of the Issuer, a valid grant of a security
interest in the collateral described in such instrument and the proceeds
thereof and, upon the filings or the recording required by such
instrument, the Issuer will have, other than with respect to Permitted
Liens, a first priority perfected security interest in such collateral,
subject to the prior liens securing the TARC Notes and the prior liens
securing the TransTexas Senior Notes (as defined below in Section
9(a)(vii)).
(o) All tax returns required to be filed by the Issuer and the
Subsidiaries in any jurisdiction (including foreign jurisdictions) have
been filed (other than Forms 5500 or state tax returns, the failure of
which to timely file cannot result in any material penalty) and, when
filed, all such returns were accurate in all material respects, and all
taxes, assessments, fees and other charges (including, without
limitation, withholding taxes, penalties and interest) due or claimed to
be due from such entities have been paid, other than those being
contested in good faith by appropriate proceedings, or those that are
currently payable without penalty or interest and, in each case, for
which an adequate reserve or accrual has been established on the books
and records of the Issuer or the Subsidiary, as applicable, in
accordance with generally accepted accounting principles of the United
States of America, consistently applied ("GAAP"). There are no actual
or, to the knowledge any of the TransAmerican Entities, proposed
additional tax assessments for any fiscal period against the Issuer or
any of the Subsidiaries that could, singly or in the aggregate, have a
Material Adverse Effect. Other than as disclosed in the Offering
Circular, the charges, accruals and reserves on the books of each of the
Issuer and the Subsidiaries in respect of any income and tax liability
for any years not finally determined are adequate to meet any
assessments or re-assessments for additional income tax for any years
not finally determined.
(p) The Issuer and the Subsidiaries own, or are licensed
under, and have the right to use, all patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks and trade names
(collectively, "Intellectual Property") currently used in, or necessary
for the conduct of, their businesses as set forth in the Offering
Circular, other than failures to own or be licensed under or have the
rights to use, patents, patent rights, licenses, inventions, copyrights,
know-how, trademarks, service marks and trade names, which failures
would not, singly or in the aggregate have a Material Adverse Effect.
No claims have been asserted by any person challenging the use of any
such Intellectual Property by the Issuer or any of the Subsidiaries or
questioning the validity or effectiveness of any license or agreement
related thereto, to the knowledge of the Issuer and the Subsidiaries,
there is no valid basis for any such claim (other than any claims that
would not, singly or in the aggregate, have a Material Adverse Effect),
and to the knowledge of the Issuer, the use of such Intellectual
Property by the Issuer and the Subsidiaries will not infringe on the
Intellectual Property rights of any other person.
(q) Each of the Issuer and the Subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) material transactions are executed in accordance with
management's general or specific authorization, (ii) material
transactions are
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recorded as necessary to permit preparation of financial statements in
conformity with GAAP, and to maintain asset accountability and (iii) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any material differences.
(r) Each of the audited consolidated financial statements of
the Issuer and related notes contained or incorporated by reference in
the Offering Circular (the "Financial Statements") present fairly in all
material respects the consolidated financial position, results of
operations and cash flows of the Issuer and its Subsidiaries, as of the
respective dates and for the respective periods to which they apply, and
have been prepared in accordance with GAAP and the requirements of
Regulation S-X that would be applicable if the Offering Circular were a
prospectus included in a registration statement on Form S-1 filed under
the Securities Act. The summary historical financial data included in
the Offering Circular have been derived accurately from the Financial
Statements. The pro forma consolidated financial statements and related
notes for the year ended January 31, 1997 included in the Offering
Circular (i) comply with the rules and guidelines of the Commission with
respect to pro forma financial statements, (ii) have been prepared on a
basis consistent with the Financial Statements, except for the pro forma
adjustments specified therein, and (iii) are based on good faith,
reasonable estimates and assumptions of the Issuer. The summary pro
forma financial information included in the Offering Circular have been
derived from such pro forma financial statements. All other financial
and statistical data included in the Offering Circular are fairly and
accurately presented.
(s) Subsequent to the respective dates as of which information
is given in the Offering Circular, except as adequately disclosed in the
Offering Circular, (i) neither the Issuer nor any of the Subsidiaries
has issued any securities, or incurred any material liabilities or
obligations, direct or contingent, for borrowed money, or entered into
any transaction, not in the ordinary course of business, or entered into
any transaction with any Affiliate that would otherwise be required to
be disclosed in the Offering Circular, (ii) there has not been any
material change in the capital stock or other equity or any material
increase in long-term indebtedness or short-term indebtedness of any of
them, or any payment of or declaration to pay any dividends or any other
distribution with respect to any of them, and (iii) there has not been
any change or development, regardless of whether arising in the ordinary
course of business, involving or which may reasonably be expected to
involve a material adverse change in the properties, business,
prospects, operations, earnings, assets, liabilities or condition
(financial or otherwise) of any of the TransAmerican Entities and its
Subsidiaries taken as a whole (each of clauses (i), (ii) and (iii), a
"Material Adverse Change"). There is no event that is reasonably likely
to occur, which if it were to occur, could reasonably be expected to,
singly or in the aggregate, have a Material Adverse Effect, except such
events that have been adequately disclosed in the Offering Circular.
(t) Immediately following the Closing, and after giving pro
forma effect to the Transactions, (i) the present fair salable value of
the assets of each TransAmerican Entity will exceed the amount that will
be required to pay its probable liability on its existing debts
(including contingent and unliquidated debts) as they become absolute
and matured, (ii) the sum of the debts of each TransAmerican Entity
(including contingent and unliquidated debts) will be less than all of
its assets at a fair valuation, and (iii) no TransAmerican Entity will
be engaged in a business or intend to engage in a business for which its
remaining unencumbered assets constitute unreasonably
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small capital. Neither the Issuer nor any of its Subsidiaries intends
to incur or believes that it will incur debts beyond its ability to pay
as they mature.
(u) Except as contemplated by this Agreement, neither the
Issuer nor any of its Affiliates has (i) taken, directly or indirectly,
any action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of any of them to facilitate
the sale or resale of any of the Notes or (ii) except as disclosed in
the Offering Circular, (A) sold, bid for, purchased, or paid anyone any
compensation for soliciting purchases of, any of the Notes or (B) paid
or agreed to pay to any person any compensation for soliciting another
to purchase any other securities of any of them. Neither the Issuer nor
any of its Affiliates has distributed and, prior to the later to occur
of (A) the Closing Date or (B) completion of the distribution of the
Notes, will distribute without your prior written consent any offering
material in connection with the offering and sale of the Notes other
than the Offering Circular, the Preliminary Offering Circular or other
materials, if any, permitted by the Securities Act.
(v) To the knowledge of the Issuer and its Subsidiaries,
neither the Issuer or any Subsidiary nor any of their respective
subsidiaries, predecessors, employees or agents has made any payment of
funds of the Issuer or any Subsidiary or any of their respective
subsidiaries or predecessors, or has received any funds, in violation of
any law or rule or regulation, which payment, receipt or retention of
funds is of a character required to be disclosed in the Offering
Circular.
(w) No registration under the Securities Act, and no
qualification of the Indenture under the TIA is required for the sale of
the Series A Notes to the Purchaser as contemplated hereby or for the
Exempt Resales, assuming (i) that the Eligible Purchasers who buy the
Series A Notes in the Exempt Resales are QIBs and (ii) the accuracy of
the Purchaser's representations contained herein regarding the absence
of general solicitation in connection with the sale of the Series A
Notes to the Purchaser and the Exempt Resales. No form of general
solicitation or general advertising was used by the Issuer or any of its
Affiliates or any of their representatives (other than the Purchaser,
with respect to which the TransAmerican Entities make no representation)
in connection with the offer and sale of any of the Series A Notes or in
connection with Exempt Resales. No securities of the same class as any
of the Notes have been offered, issued or sold by the Issuer or any of
its Affiliates within the six-month period immediately prior to the date
hereof.
(x) When the Notes are issued and delivered pursuant to this
Agreement, the Notes will not be of the same class (within the meaning
of Rule 144A under the Securities Act) as securities that are listed on
a national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation
system.
(y) Neither the Issuer nor any of its "Affiliates" is a "party
in interest" or a "disqualified person" with respect to any employee
benefit plans except for those described in the Offering Circular. No
condition exists or event or transaction has occurred in connection with
any employee benefit plan that could result in the Issuer or any such
"Affiliate" incurring any liability, fine or penalty that could, singly
or in the aggregate, have a Material Adverse Effect. With respect to
any employee pension benefit plan that is subject to Title IV of ERISA,
(i) the fair market value
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of the assets of such employee pension benefit plan equals or exceeds
the present value of the liabilities of such pension plan (as determined
in accordance with the actuarial methods and assumptions set forth in
the latest actuarial report for such employee pension benefit plan),
except where the failure to so equal or exceed would not, singly or in
the aggregate, have a Material Adverse Effect and (ii) there exists no
accumulated funding deficiency which could, singly or in the aggregate,
have a Material Adverse Effect. The terms "employee benefit plan,"
"employee pension benefit plan," and "party in interest" shall have the
meanings assigned to such terms in Section 3 of the Employee Retirement
Income Act of 1974, as amended, or the rules and regulations promulgated
thereunder ("ERISA"), the term "Affiliate" shall have the meaning
assigned to such term in Section 407(d)(7) of ERISA, and the term
"disqualified person" shall have the meaning assigned to such term in
section 4975 of the Internal Revenue Code of 1986, as amended, or the
rules, regulations and published interpretations promulgated thereunder
the ("Code").
(z) None of the Transactions will violate or result in a
violation of Section 7 of the Exchange Act (including, without
limitation, Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R.
Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of Governors
of the Federal Reserve System).
(aa) Neither the Issuer nor any of the Subsidiaries has dealt
with any broker, finder, commission agent or other person (other than
the Purchaser) in connection with the Transactions (other than the Lobo
Sale) and neither the Issuer nor any of the Subsidiaries is under any
obligation to pay any broker's fee or commission in connection with such
transactions (other than with respect to the Lobo Sale and commissions
and fees to the Purchaser as set forth in the Offering Circular).
(bb) Neither the Issuer nor any Subsidiary is engaged in any
unfair labor practice. Except as adequately disclosed in the Offering
Circular, there is (i) no unfair labor practice complaint or other
proceeding pending or, to the knowledge of the Issuer, threatened
against the Issuer or any of the Subsidiaries before the National Labor
Relations Board or any state, local or foreign labor relations board or
any industrial tribunal, and to the knowledge of the Issuer, no
grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending or threatened, (ii) no
strike, labor dispute, slowdown or stoppage pending or, to the knowledge
of the Issuer after due inquiry, threatened against the Issuer or any of
the Subsidiaries, and (iii) no union representation question existing
with respect to the employees of the Issuer or any of the Subsidiaries,
and to the knowledge of the Issuer, no union organizing activities are
taking place that, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(cc) Except as adequately disclosed in the Offering Circular,
neither the Issuer nor any Subsidiary is involved in any labor dispute
nor, to the knowledge of the Issuer or any Subsidiary, is any such
dispute threatened.
(dd) Except as set forth in the Offering Circular, or as could
not reasonably be expected to have a Material Adverse Effect:
(i) each of the Issuer and its Subsidiaries and, to the
best knowledge of the Issuer and its Subsidiaries, any Person for
whom any of the foregoing are or may be
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responsible by law or contract, is in compliance with all
federal, state, local and foreign laws and regulations relating
to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including,
without limitation, laws and regulations relating to emissions,
discharges, releases or threatened releases of Materials of
Environmental Concern (as defined below), or otherwise relating
to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of
Environmental Concern (collectively, "Environmental Laws"), which
compliance includes, but is not limited to, (1) compliance with
all standards, schedules and timetables therein, and (2) the
possession of all permits, licenses, approvals and other
authorizations required under the Environmental Laws with respect
to the operation of the business, property and assets of the
Issuer or any of its Subsidiaries or any such Person, and
compliance with the terms and conditions thereof and (3) any
federal, state, local or foreign approvals required pursuant to
any Environmental Laws that pertain or relate to the transactions
contemplated by this Agreement;
(ii) each of the Issuer and its Subsidiaries has not
received any notice or claim (written or oral), whether from a
governmental authority, citizens group, employee or otherwise,
that alleges that it is in violation of any Environmental Law;
each of the Issuer and its Subsidiaries has no liability under
any Environmental Law; and, to the best knowledge of each of the
Issuer and its Subsidiaries, there are no past or present
actions, activities, circumstances, conditions, events or
incidents that may be expected to prevent or interfere with full
compliance by each of the Issuer and its Subsidiaries (or any
Person for whom the Issuer or any of its Subsidiaries is or may
be responsible by law or contract) with applicable Environmental
Laws in the future;
(iii) there is no claim, action, cause of action,
investigation or notice (written or oral) by any Person alleging
potential or actual liability (including, without limitation,
potential or actual liability for investigating costs, clean up
costs, governmental response costs, natural resources damages,
property damages, personal injuries or penalties) arising out of,
based upon, resulting from or relating to or under any
Environmental Law, including, without limitation, any such
liability relating to the presence, or release into the
environment of any Material of Environmental Concern (as defined
below), or circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law (collectively,
"Environmental Liability") pending or, to the best knowledge of
the Issuer, threatened against the Issuer or any of its
Subsidiaries;
(iv) there are no past or present actions, activities,
circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge, presence or
disposal of any pollutants, contaminants, chemicals, industrial,
toxic or hazardous wastes, substances or constituents, petroleum
and petroleum products (or any by-product or constituent
thereof), asbestos or asbestos-containing materials, or
polychlorinated biphenyls (collectively, "Materials of
Environmental Concern"), that could reasonably be expected to
form the basis of any Environmental Liability against the Issuer
or any of its Subsidiaries;
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(v) no real property or facility owned, used, operated,
leased, managed or controlled by the Issuer or any of its
Subsidiaries, or, to the best knowledge of each of the Issuer and
its Subsidiaries, any predecessor in interest for which the
Issuer or any of its Subsidiaries could be responsible, is listed
or proposed for listing on the National Priorities List or the
Comprehensive Environmental Response, Compensation, and Liability
Information System pursuant to the Comprehensive Environmental
Response, Compensation, and Liability Act, as amended, or on any
comparable state or local lists established pursuant to any
Environmental Law;
(vi) there have been no releases (including, without
limitation, any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, disposing or dumping, on-site or off-site) of
Materials of Environmental Concern by the Issuer or any of its
Subsidiaries or, to the best knowledge of each of the Issuer and
its Subsidiaries, any predecessor in interest, for which the
Issuer or any of its Subsidiaries could reasonably be expected to
incur liability under or pursuant to any Environmental Law, at,
on, under, from or into any facility or real property owned,
operated, leased, managed or controlled by the Issuer or any of
its Subsidiaries, and each of the Issuer and its Subsidiaries has
not incurred or reasonably could be expected to incur any
Environmental Liability for contamination at, on, under, from or
into any on-site or off-site locations where the Issuer or any of
its Subsidiaries has stored, disposed or arranged for the
disposal of Materials of Environmental Concern;
(vii) the condition of all underground storage tanks or
other underground storage receptacles, or related piping, that
are located on a facility or property owned, operated, leased,
managed or controlled by the Issuer or any of its Subsidiaries is
such that each of the Issuer and its Subsidiaries is not, and
cannot reasonably be expected to become, subject to any
Environmental Liability relating thereto or resulting therefrom;
and
(viii) there is no asbestos contained in or forming part
of any building, building component, structure or office space,
and no polychlorinated biphenyls ("PCBs") or PCB-containing items
are used or stored at any property, owned, operated, leased or
managed for which removal, abatement or cleanup is or may be
required or for which such matters the Issuer or any of its
Subsidiaries could be liable.
(ee) Xxxxxxx & Xxxxxxx L.L.P. are independent accountants with
respect to the Issuer and its Subsidiaries as required by the Securities
Act, who have certified or shall certify the financial statements filed
or to be filed with the Commission which are included as part of the
Offering Circular and the Preliminary Offering Circular.
(ff) Xxxxx & X'Xxxxx, Inc. are independent energy consultants
with respect to the TransAmerican Entities and their Subsidiaries.
(gg) Netherland, Xxxxxx & Associates, Inc. (the "Engineers")
are independent petroleum engineers with respect to TransTexas and its
Subsidiaries, and information based upon the Engineers' reports on the
oil and gas reserves of TransTexas is included or incorporated by
reference in the Offering Circular.
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(hh) The Issuer is subject to Section 13 or 15(d) of the
Exchange Act.
(ii) None of the Issuer or any Subsidiary is (i) an "investment
company" within the Investment Company Act of 1940, as amended, and is
not subject to registration under such act or (ii) a "public utility
holding company" under the Public Utility Holding Company Act of 1935,
as amended, and is not subject to regulation as a public utility holding
company under such act or (ii) subject to regulation under the Federal
Power Act or the Interstate Commerce Act or (iv) subject to regulation
under any other federal or state statute, rule or regulation restricting
its ability to incur indebtedness for borrowed money.
(jj) Any certificate signed by any officer of the Issuer or any
Subsidiary and delivered to the Purchaser or to counsel for the
Purchaser pursuant to the terms of this Agreement shall be deemed a
representation and warranty by the Issuer or any such Subsidiary, as the
case may be, to the Purchaser as to the matters covered thereby.
7. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants with respect to itself that:
(a) It is a QIB.
(b) It (i) is not acquiring the Series A Notes with a view to
any distribution thereof that would violate the Securities Act or the
securities laws of any state of the United States of America or any
other applicable jurisdiction and (ii) will be soliciting offers for the
Series A Notes only from, and will be reoffering and reselling the
Series A Notes only to (A) persons in the United States of America whom
it reasonably believes to be QIBs in reliance on the exemption from the
registration requirements of the Securities Act provided by Rule 144A
and (B) non U.S. persons outside the United States of America in
transactions meeting the requirements of Regulation S under the
Securities Act.
(c) No form of general solicitation or general advertising in
violation of the Securities Act has been or will be used by such
Purchaser or any of its representatives in connection with the offer and
sale of any of the Series A Notes.
(d) In connection with the Exempt Resales, it will solicit
offers to buy the Series A Notes only from, and will offer and sell the
Series A Notes only to, Eligible Purchasers who, in purchasing such
Series A Notes, will be deemed to have represented and agreed (i) if
such Eligible Purchasers are QIBs, that they are purchasing the Series A
Notes for their own accounts or accounts with respect to which they
exercise sole investment discretion and that they or such accounts are
QIBs, (ii) that such Series A Notes will not have been registered under
the Securities Act and may be resold, pledged or otherwise transferred
only (A) inside the United States of America to a person who the seller
reasonably believes is a QIB in a transaction meeting the requirements
of Rule 144A, in a transaction meeting the requirements of Rule 144 or
in accordance with another exemption from the registration requirements
of the Securities Act, (B) to the Issuer, (C) pursuant to an effective
registration statement, and (D) outside the United States of America to
a foreign person in a transaction meeting the requirements of Regulation
S under the Securities Act and, in each case, in accordance with any
applicable securities laws of any state of the United States of America
or any other applicable jurisdiction, and (iii) that the holder will,
and each
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subsequent holder is required to, notify any purchaser from it of the
security evidenced thereby of the resale restrictions set forth in (ii)
above.
(e) It has all requisite power and authority to enter into,
deliver and perform its obligations under this Agreement and the
Registration Rights Agreement and each of this Agreement and the
Registration Rights Agreement has been duly and validly authorized by
it.
8. Indemnification.
(a) Each TransAmerican Entity shall, jointly and severally,
without limitation as to time, indemnify and hold harmless the Purchaser
and each person, if any, who controls (within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act) the Purchaser
(any of such persons being hereinafter referenced as a "controlling
person"), and the respective officers, directors, partners, employees,
representatives and agents of the Purchaser and any such controlling
person (collectively, the "Indemnified Parties"), to the fullest extent
lawful, from and against any and all losses, claims, damages,
liabilities, costs (including, without limitation, costs of preparation
and reasonable attorneys' fees) and expenses (including, without
limitation, costs and expenses incurred in connection with
investigating, preparing, pursuing or defending against any of the
foregoing) (collectively, "Losses"), as incurred, directly or indirectly
caused by, related to, based upon, arising out of or in connection with
any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Offering Circular or the Offering Circular
(or any amendment or supplement thereto), or any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except insofar
as any such Loss arises out of or is based upon any untrue statement or
omission or alleged untrue statement or omission that has been made
therein or omitted therefrom in reliance upon and in conformity with the
information provided in writing to the Issuer by or on behalf of the
Purchaser, expressly for use in the Registration Statement or the
Offering Circular, and the TransAmerican Entities agree that the only
such information provided in writing by or on behalf of the Purchaser,
expressly for use in the Preliminary Offering Circular or the Offering
Circular is that information contained in the section of the Preliminary
Offering Circular or the Offering Circular entitled "Plan of
Distribution" and the last paragraph of text on the cover page of the
Preliminary Offering Circular and the Offering Circular; provided, that
the indemnity agreement contained in this Section 8(a) with respect to
any Preliminary Offering Circular or amended Preliminary Offering
Circular shall not inure to the benefit of the Indemnified Party from
whom the person asserting any such loss, expense, liability or claim
purchased the Securities which is the subject thereof, if the Offering
Circular corrected any such alleged untrue statement or omission and if
the Purchaser failed to deliver or have delivered on its behalf a copy
of the Offering Circular, excluding any documents incorporated by
reference, to such person at or prior to the written confirmation of the
sale of Securities to such person, provided that the Issuer has
delivered the Offering Circular to the Purchaser in sufficient quantity
not less than one full business day prior to the written confirmation of
the sale to the person asserting such claim. Notwithstanding any
provision hereof to the contrary, the liability of each of TARC and
TransTexas pursuant to this Section 8(a) shall be limited to the amount
of proceeds of the Offering received directly or indirectly by such
corporation, including without limitation pursuant to the transactions
contemplated hereby or by the Offering Circular.
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If any action is brought against the Purchaser or any of its
affiliates or any of their respective officers, shareholders, counsel,
agents, employees, directors or any person who controls the Purchaser
(as described above) in respect of which indemnity may be sought against
any of the TransAmerican Entities pursuant to the foregoing paragraph,
the Purchaser shall promptly notify the TransAmerican Entities in
writing of the institution of such action (provided, that the failure to
give such notice shall not relieve any of the TransAmerican Entities of
any liability which it may have pursuant to this Agreement, unless it
shall have been determined by a court of competent jurisdiction by final
judgment that such failure has resulted in the forfeiture of substantive
rights or defenses by the indemnifying party) and the TransAmerican
Entities shall assume the defense of such action, including the
employment of counsel and payment of reasonable expenses. The Purchaser
or such affiliate, officer, shareholder, counsel, agent, employee,
director or person who controls the Purchaser (as described) shall have
the right to employ its or their own counsel in any such case and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Purchaser or such other person
unless: (i) the TransAmerican Entities shall have failed to assume the
defense of such action or the TransAmerican Entities shall have failed
to employ counsel reasonably satisfactory to the Purchaser or such other
person in any such action; or (ii) such indemnified party shall have
been advised by counsel that there may be one or more defenses available
to it that are different from or additional to those available to the
TransAmerican Entities (in which case, if such indemnified party
notifies the TransAmerican Entities in writing that it elects to employ
separate counsel at the expense of the TransAmerican Entities, the
TransAmerican Entities shall not have the right to assume the defense of
such action on behalf of such indemnified party), in any of which events
such fees and expenses shall be borne by the TransAmerican Entities and
paid as incurred; provided, that the TransAmerican Entities shall be
responsible for the fees and expenses of only one counsel (in addition
to any reasonably required local counsel) for all indemnified parties
hereunder. Anything in this paragraph to the contrary notwithstanding,
the TransAmerican Entities shall not be liable for any settlement of any
such claim or action effected without its written consent, which consent
shall not be unreasonably withheld.
(b) The Purchaser agrees to indemnify, defend and hold
harmless each of the TransAmerican Entities, their respective affiliates
and their respective directors, officers, shareholders, counsel, agents
and employees and any person who controls any of the TransAmerican
Entities or any of its affiliates within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act from and against any Losses
incurred insofar as such Loss is caused by, related to, based upon,
arises out of or is in connection with any untrue statement or omission
or alleged untrue statement or omission which has been made in or
omitted from the Preliminary Offering Circular or the Offering Circular
in reliance upon and in conformity with the information relating to the
Purchaser furnished in writing by or on behalf of the Purchaser to the
Issuer expressly for use in the Preliminary Offering Circular or the
Offering Circular. The TransAmerican Entities agree that the only
information provided in writing by or on behalf of the Purchaser to the
Issuer, expressly for use in the Preliminary Offering Circular or the
Offering Circular, is that information contained in the section of the
Preliminary Offering Circular or the Offering Circular entitled "Plan of
Distribution" and the last paragraph of text on the cover page of the
Preliminary Offering Circular or the Offering Circular.
If any action is brought against any of the TransAmerican
Entities or any of its affiliates or any other such person in respect of
which indemnity may be sought against the Purchaser
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pursuant to the foregoing paragraph, the TransAmerican Entities, such
affiliate or such other person shall promptly notify the Purchaser in
writing of the institution of such action (provided, that the failure to
give such notice shall not relieve the Purchaser of any liability which
it may have pursuant to this Agreement, unless it shall have been
determined by a court of competent jurisdiction by final judgment that
such failure has resulted in the forfeiture of substantive rights or
defenses by the indemnifying party) and the Purchaser shall assume the
defense of such action, including the employment of counsel and payment
of reasonable expenses. The TransAmerican Entities, such affiliate or
such other person shall have the right to employ its or their own
counsel in any such case and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the
TransAmerican Entities, such affiliate or such other person unless: (i)
the Purchaser shall have failed to assume the defense of the action or
shall have failed to employ counsel reasonably satisfactory to the
TransAmerican Entities or such other person in any such action; or (ii)
such indemnified party shall have been advised by counsel that there may
be one or more defenses available to it that are different from or
additional to those available to the Purchaser (in which case, if such
indemnified party notifies the Purchaser in writing that it elects to
employ separate counsel at the expense of the Purchaser, the Purchaser
shall not have the right to assume the defense of such action on behalf
of the indemnified party), in any of which events such fees and expenses
shall be borne by the Purchaser and paid as incurred; provided, that the
Purchaser shall be responsible for the fees and expenses of only one
counsel (in addition to any reasonably required local counsel) for all
indemnified parties. Anything in this paragraph to the contrary
notwithstanding, the Purchaser shall not be liable for any settlement of
any such claim or action effected without the written consent of the
Purchaser, which consent shall not be unreasonably withheld.
The Issuer shall notify the Purchaser promptly of the
institution, threat or assertion of any Proceeding of which the Issuer
or any Subsidiary is aware in connection with the matters addressed by
this Agreement which involves the Issuer, any of the Subsidiaries or any
of the indemnified parties.
(c) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless for any Losses in respect of which this
Section 8 would otherwise apply by its terms (other than by reason of
exceptions provided in this Section 8), then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such
Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the TransAmerican Entities, on the one hand, and
the Purchaser, on the other hand, from the offering of the Series A
Notes or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referenced in clause (i) above
but also the relative fault of the TransAmerican Entities, on the one
hand, and the Purchaser, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses, as well
as any other relevant equitable considerations. The relative benefits
received by the TransAmerican Entities, on the one hand, and the
Purchaser, on the other
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hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the
TransAmerican Entities, and the total discounts and commissions received
by the Purchaser, bear to the total price of the Series A Notes in
Exempt Resales in each case as set forth in the table on the cover page
of the Offering Circular. The relative fault of the TransAmerican
Entities, on the one hand, and the Purchaser, on the other hand, shall
be determined by reference to, among other things, whether any untrue or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
TransAmerican Entities, on the one hand, or the Purchaser, on the other
hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
amount paid or payable by an indemnified party as a result of any Losses
shall be deemed to include any legal or other fees or expenses incurred
by such party in connection with any Proceeding, to the extent such
party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section 8 was available to such
party.
Each party hereto agrees that it would not be just and
equitable if contribution pursuant to this Section 8(c) were determined
by pro rata allocation or by any other method of allocation which does
not take account of the equitable considerations referenced in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 8(c), the Purchaser shall not be required to contribute, in the
aggregate, any amount in excess of the amount by which the total
discounts and commissions received by it with respect to the Series A
Notes exceeds the amount of any damages that the Purchaser has otherwise
been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
(d) The indemnity and contribution agreements contained in
this Section 8 are in addition to any liability that the TransAmerican
Entities or the Purchaser may otherwise have to the indemnified parties.
9. Conditions.
(a) The obligation of the Purchaser to purchase the Series A
Notes under this Agreement is subject to the satisfaction or waiver of
each of the following conditions:
(i) All the representations and warranties of each
TransAmerican Entity in each of the Documents to which it is a
party shall be true and correct in all material respects (other
than representations and warranties with a materiality qualifier,
which shall be true and correct as written) at and as of the
Closing Date after giving effect to the Transactions with the
same force and effect as if made on and as of such date. On or
prior to the Closing Date, each of the TransAmerican Entities
and, to the knowledge of each of the TransAmerican Entities after
due inquiry, each other party to the Documents (other than the
Purchaser) shall have performed or complied in all material
respects with all of the agreements and satisfied in all material
respects all conditions on their respective parts to be
performed, complied with or satisfied pursuant to the Documents.
(ii) The Offering Circular shall have been printed and
copies made available to the Purchaser not later than 12:00 noon,
New York City time, on the second business day following the date
of this Agreement or at such later date and time as the Purchaser
may approve.
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(iii) No injunction, restraining order or order of any
nature by a Governmental Authority shall have been issued as of
the Closing Date that would prevent or interfere with the
consummation of any of the Transactions; and no stop order
suspending the qualification or exemption from qualification of
any of the Series A Notes in any jurisdiction shall have been
issued and no Proceeding for that purpose shall have been
commenced or be pending or contemplated.
(iv) No action shall have been taken and no Applicable
Law shall have been enacted, adopted or issued that would, as of
the Closing Date, prevent the consummation of any of the
Transactions. No Proceeding shall be pending or threatened other
than Proceedings that (A) if adversely determined could not,
singly or in the aggregate, adversely affect the issuance or
marketability of the Series A Notes and (B) could not reasonably
be expected to have a Material Adverse Effect.
(v) Since the date as of which information is given in
the Offering Circular, there shall not have been any Material
Adverse Change.
(vi) The Notes shall have (A) been designated PORTAL
securities in accordance with the rules and regulations adopted
by the NASD relating to trading in the PORTAL market, and (B)
received a rating of B+ and B3 from Standard & Poor's Corporation
and Xxxxx'x Investors Services, Inc., respectively.
(vii) The Purchaser shall have received on the Closing
Date (A) certificates dated the Closing Date, signed by (1) the
Chief Executive Officer and (2) the principal financial or
accounting officer of each of the TransAmerican Entities, on
behalf of such TransAmerican Entity, (x) confirming the matters
set forth in paragraphs (i), (v) and (vi) and to the knowledge of
such officer, paragraphs (iii) and (iv) of this Section 9(a) and
(y) certifying as to such other matters as the Purchaser may
reasonably request and (B) a certificate, dated the Closing Date,
signed by the Secretary of each TransAmerican Entity, certifying
such matters as the Purchaser may reasonably request.
(viii) The Purchaser shall have received:
(A) an opinion of Xxxxxxx & Xxxxx, L.L.P.,
counsel to the Issuer, dated the Closing Date, in the form
of Exhibit A hereto;
(B) an opinion of Xxxxxxxx, XxXxxxxx, Xxxxxxxx,
Xxxxxxx & Xxxxx, special counsel to the Issuer, dated the
Closing Date, in the form of Exhibit B hereto;
(C) an opinion of Xxxxx, Xxxxxx & Xxxxxx, Ltd.,
special counsel to the Issuer, dated the Closing Date, in
the form of Exhibit C hereto;
(D) an opinion, dated the Closing Date, of
Xxxxxxx, Arps, Slate, Xxxxxxx & Xxxx LLP, in form and
substance reasonably satisfactory to the Purchaser
covering such matters as are customarily covered in such
opinions.
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(ix) The Purchaser shall have received from Xxxxxxx &
Xxxxxxx L.L.P. (A) a customary comfort letter, dated the date of
the Offering Circular, in form and substance reasonably
satisfactory to the Purchaser, with respect to the financial
statements and certain financial information contained in the
Offering Circular, and (B) a customary comfort letter, dated the
Closing Date, in form and substance reasonably satisfactory to
the Purchaser, to the effect that they reaffirm the statements
made in the letter furnished pursuant to clause (A), except that
the specified date referenced shall be a date not more than five
days prior to the Closing Date.
(x) Each of the Documents shall have been executed and
delivered by all parties thereto and the Purchaser shall have
received a fully executed original of each Document.
(xi) The Purchaser shall have received copies of all
opinions, certificates, letters and other documents delivered
under or in connection with the Transactions, and letters to the
effect that the Purchaser may rely on such opinions, as if
addressed to the Purchaser.
(xii) The Purchaser shall have received evidence
satisfactory to it, of (A) amendments satisfactory to the
Purchaser to the terms of TransTexas' 13 1/4% Series A Senior
Subordinated Notes due 2003; (B) the satisfaction and discharge
of all obligations of TransTexas under all of its outstanding 11
1/2% Senior Secured Notes due 2002 (the "TransTexas Senior
Notes") or the mailing of a notice of redemption of all the
TransTexas Senior Notes in accordance with the provisions of the
indenture governing such notes; (C) the receipt of the Requisite
Consents (as defined in TARC's Offer to Purchase and Consent
Solicitation dated May 15, 1997 (the "TARC Offer to Purchase")
relating to its 18 1/2% Guaranteed First Mortgage Discount Notes
due 2002 (the "TARC Discount First Mortgage Notes") and its 16
1/2% Guaranteed First Mortgage Notes due 2002 (the "TARC First
Mortgage Notes" and together with the TARC Discount First
Mortgage Notes, the "TARC Notes")); (D) there having been validly
tendered and not withdrawn at least 66 2/3% of the aggregate
outstanding principal amount of the TARC Notes pursuant to the
TARC Offer to Purchase and the acceptance of such tenders by
TARC; (E) there having been validly tendered and not withdrawn at
least 50% of all the outstanding TARC Warrants (as defined below)
pursuant to the Issuer's Offer to Purchase dated May 14, 1997
relating to its offer to purchase all of the Common Stock
Purchase Warrants of TARC issued pursuant to the Warrant
Agreement dated as of February 23, 1995 (the "TARC Warrants");
(F) the redemption of all the issued and outstanding shares of
preferred stock of the Issuer; (G) the receipt of the Requisite
Consents (as defined in TransTexas' Consent Solicitation
Statement dated May 14, 1997 relating to its 13 1/4% Senior
Subordinated Notes due 2003), (H) the amendment of the Amended
and Restated Accounts Receivable Management and Security
Agreement dated as of October 31, 1996 among TransTexas,
TransTexas Transmission Corporation and BNY Financial Corporation
(the "TransTexas Credit Agreement") and (I) the amendment of the
certificate of incorporation of TEC to permit the consummation of
the Offering.
(xiii) The Purchaser and the Collateral Agent shall have
received (A) executed copies of each UCC-1 financing statement
filed in such jurisdictions as the Purchaser may
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reasonably require, relating to the perfection of security
interests securing indebtedness under the Notes and the
Intercompany Loan Documents; (B) the original stock certificates
pledged to the Collateral Agent pursuant to the Issuer Pledge
Agreement, together with undated stock powers or endorsements
duly executed in blank in connection therewith; and (C) bailee
letters, in form and substance reasonably satisfactory to the
Purchaser, executed by the Issuer for delivery to each of the
Persons identified in the Issuer Pledge Agreement as holding
Collateral.
(xiv) Counsel to the Purchaser shall have been furnished
with such documents as they may reasonably require for the
purpose of enabling them to review or pass upon the matters
referenced in this Section 9 and in order to evidence the
accuracy, completeness or satisfaction in all material respects
of any of the representations, warranties or conditions herein
contained.
(b) The obligation of the Issuer to sell the Series A Notes
under this Agreement is subject to the satisfaction or waiver of each of
the following conditions:
(i) The Purchaser shall have delivered payment to the
Issuer for the Series A Notes pursuant to Sections 2 and 4 of
this Agreement.
(ii) All of the representations and warranties of the
Purchaser in this Agreement shall be true and correct in all
material respects at and as of the Closing Date, with the same
force and effect as if made on and as of such date.
(iii) No injunction, restraining order or order of any
nature by a Governmental Authority shall have been issued as of
the Closing Date that would prevent or interfere with the
issuance and sale of the Series A Notes; and no stop order
suspending the qualification or exemption from qualification of
any of the Series A Notes in any jurisdiction shall have been
issued and no Proceeding for that purpose shall have been
commenced or be pending or contemplated as of the Closing Date.
(iv) No Applicable Law shall have been enacted, adopted
or issued that would, as of the Closing Date, prevent the
consummation of any of the Transactions.
10. Termination. The Purchaser may terminate this Agreement at any
time prior to the Closing Date by written notice to the Issuer if any of the
following has occurred:
(a) since the date as of which information is given in the
Offering Circular, any Material Adverse Effect or development involving
a prospective Material Adverse Effect on the properties, business,
prospects, operations, earnings, assets, liabilities or condition
(financial or otherwise), of the Issuer or any Subsidiary, regardless of
whether arising in the ordinary course of business, that could, in the
Purchaser's judgment, (i) make it impracticable or inadvisable to
proceed with the offering or delivery of the Series A Notes on the terms
and in the manner contemplated in the Offering Circular or (ii)
materially impair the investment quality of any of the Notes;
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(b) the failure of the Issuer to satisfy the conditions
contained in Section 9(a) hereof on or prior to the sixth business day
following the date of this Agreement;
(c) any outbreak or escalation of hostilities or other
national or international calamity or crisis or material adverse change
in economic conditions in or the financial markets of the United States
of America or elsewhere, if the effect of such outbreak, escalation,
calamity, crisis or material adverse change in the economic conditions
in or in the financial markets of the United States of America or
elsewhere make it, in the Purchaser's judgment, impracticable or
inadvisable to market or proceed with the offering or delivery of the
Series A Notes on the terms and in the manner contemplated in the
Offering Circular or to enforce contracts for the sale of any of the
Series A Notes;
(d) the suspension or limitation of trading generally in
securities on the New York Stock Exchange, the American Stock Exchange
or the NASDAQ National Market or any setting of limitations on prices
for securities on any such exchange or NASDAQ National Market;
(e) the enactment, publication, decree or other promulgation
after the date hereof of any Applicable Law that in the Purchaser's
opinion materially and adversely affects, or could materially and
adversely affect, the properties, business, prospects, operations,
earnings, assets, liabilities or condition (financial or otherwise) of
the Issuer or any Subsidiary;
(f) any securities of any TransAmerican Entity shall have been
downgraded or placed on any "watch list" for possible downgrading by any
"nationally recognized statistical rating organization," as such term is
defined for purposes of Rule 431(g)(2) under the Securities Act; or
(g) the declaration of a banking moratorium by any
Governmental Authority or the taking of any Governmental Authority after
the date hereof in respect of its monetary or fiscal affairs that in the
Purchaser's opinion could have a material adverse effect on the
financial markets in the United States of America or elsewhere.
The indemnities and contribution and expense reimbursement
provisions and other agreements, representations and warranties of the
TransAmerican Entities and the Purchaser set forth in or made pursuant to this
Agreement shall remain operative and in full force and effect, and will
survive, regardless of (i) any investigation, or statement as to the results
thereof, made by or on behalf of the Purchaser, (ii) acceptance of the Notes,
and payment for them hereunder, and (iii) any termination of this Agreement.
Without limiting the foregoing, notwithstanding any termination of this
Agreement, each of the TransAmerican Entities shall be liable (i) for all
expenses that it has agreed to pay pursuant to Section 5(g) hereof, and (ii)
pursuant to Section 8 hereof.
11. Default by Purchaser. If the Purchaser shall fail or refuse to
purchase the Series A Notes that it has agreed to purchase hereunder on the
Closing Date and arrangements satisfactory to the Issuer for the purchase of
such Series A Notes are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of the Issuer, except
as otherwise provided in Section 10 hereof. Nothing herein shall relieve the
Purchaser from liability for its default.
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12. Miscellaneous.
(a) All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Purchaser shall be directed to Xxxxxxxxx & Company, Inc., 000000 Xxxxx
Xxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, attention of Xxxxx X.
Xxxxx, Esq., with a copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000,
attention of Xxxxxxx X. Xxxxxx, Xx., Esq.; and notices to the Issuer
shall be directed to 0000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000-0000, to the attention of Xx Xxxxxxx, with a copy
to Gardere & Xxxxx, L.L.P., 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000, attention of X. Xxxxxx Xxxxxxxxxxx, Esq.
(b) This Agreement has been and is made solely for the benefit
of and shall be binding upon the Issuer, the Purchaser and, to the
extent provided in Section 8 hereof, the controlling persons officers,
directors, partners, employees, representatives and agents referenced in
Section 8 and their respective heirs, executors, administrators,
successors and assigns, all as and to the extent provided in this
Agreement, and no other person shall acquire or have any right under or
by virtue of this Agreement. The term "successors and assigns" shall not
include a purchaser of any of the Series A Notes from the Purchaser
merely because of such purchase. Notwithstanding the foregoing, it is
expressly understood and agreed that each purchaser who purchases Series
A Notes from the Purchaser is intended to be a beneficiary of the
Issuer's covenants contained in the Registration Rights Agreement to the
same extent as if the Notes were sold and those covenants were made
directly to such purchaser by the Issuer, and each such purchaser shall
have the right to take action against the Issuer to enforce, and obtain
damages for any breach of, those covenants.
(c) THIS AGREEMENT SHALL BE CONSTRUED, INTERPRETED AND THE
RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW
EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. EACH
TRANSAMERICAN ENTITY 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 AGREEMENT, AND IRREVOCABLY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH
TRANSAMERICAN ENTITY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION
THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. EACH TRANSAMERICAN ENTITY IRREVOCABLY
CONSENTS, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER
APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF
BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY TRANSAMERICAN
ENTITY AT THE
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ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PURCHASER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY TRANSAMERICAN ENTITY IN ANY
OTHER JURISDICTION.
(d) This Agreement may be signed in various counterparts which
together shall constitute one and the same instrument.
(e) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
(f) If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties
that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(g) This Agreement may be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may be
given, provided that the same are in writing and signed by each of the
signatories hereto.
(h) The indemnities and contribution and expense reimbursement
provisions set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery and
payment for the Series A Notes, regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of any party
hereto, (ii) acceptance of the Series A Notes, and payment for them
hereunder, and (iii) any termination of this Agreement.
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Please confirm that the foregoing correctly sets forth the
agreement between the Issuer and the Purchaser.
Very truly yours,
TRANSAMERICAN ENERGY CORPORATION
By:
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Name:
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Title:
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TRANSAMERICAN REFINING CORPORATION
By:
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Name:
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Title:
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TRANSTEXAS GAS CORPORATION
By:
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Name:
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Title:
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Accepted and Agreed to:
XXXXXXXXX & COMPANY, INC.
By:
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Name:
------------------------------------
Title:
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