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EXHIBIT 10.7
FOURTH AMENDMENT TO TAX ALLOCATION AGREEMENT
THIS FOURTH AMENDMENT to the TAX ALLOCATION AGREEMENT of the
affiliated group of which TransAmerican Natural Gas Corporation, a Texas
corporation ("TANG"), is a member (the "Affiliated Group") is made and entered
into as of June 12, 1997 by and among each of the corporations identified on
the signature page of this amendment.
WHEREAS, a TAX ALLOCATION AGREEMENT dated as of August 24, 1993 was
entered into by TANG, as the then common parent of the Affiliated Group, and
other identified corporations (collectively with TANG, the "Members");
WHEREAS, the TAX ALLOCATION AGREEMENT dated as of August 24, 1993 was
amended by the FIRST AMENDMENT TO THE TAX ALLOCATION AGREEMENT dated as of
March 9, 1994, by the SECOND AMENDMENT TO THE TAX ALLOCATION AGREEMENT dated as
of February 23, 1995 and by the THIRD AMENDMENT TO THE TAX ALLOCATION AGREEMENT
dated as of May 29, 1997 (as amended, the "AGREEMENT");
WHEREAS, the Affiliated Group desires to allocate potential tax
liability in connection with various recent transactions described below and to
add a corporate signatory to the AGREEMENT;
WHEREAS, the parties hereto desire to confirm and continue all other
provisions of the Agreement in all respects.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the corporations listed on the execution pages of this FOURTH
AMENDMENT TO TAX ALLOCATION AGREEMENT hereto agree to amend the AGREEMENT as
follows:
1. The following paragraph shall be added at the end of Section 6
of the AGREEMENT, effective as of May 29, 1997:
Notwithstanding anything in this TAX ALLOCATION AGREEMENT to the
contrary, TANG (or its successors) shall assume primary liability with respect
to the payment of any Federal income or alternative minimum tax and Texas
franchise tax, together with any interest or penalty thereon (collectively, the
"Lobo Trend Tax Liability"), which might become due and payable with respect to
(i) the transfer of certain oil and gas producing properties in Xxxx
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and Zapata Counties, Texas and related assets by TransTexas Gas Corporation
("TransTexas Gas") to TransTexas Transmission Corporation ("Transmission")
pursuant to the Asset Contribution Agreement between TransTexas Gas and
Transmission dated February 1, 1997 and effective January 31, 1997 and the
transfer of any other assets from TransTexas Gas to Transmission subsequent to
January 31, 1997 and (ii) the sale of the stock of Transmission to First Union
Bank of Connecticut, as trustee under the First Intercontinental Leasing Trust,
a Connecticut trust ("First Union"), pursuant to the Stock Purchase Agreement
between TransTexas Gas and First Union dated May 29, 1997 (collectively,
clauses (i) and (ii) are referred to as the "Lobo Trend Transfers"). Any
refund of all or a portion of the Lobo Trend Tax Liability assumed by TANG
shall belong to TANG.
2. The following sentence shall be added at the end of Section 10
effective May 29, 1997:
Further, notwithstanding the previous sentence, the payment
obligations of TANG under Section 6 as amended by this FOURTH AMENDMENT TO TAX
ALLOCATION AGREEMENT shall in all events apply with respect to the Lobo Trend
Tax Liability.
3. TransTexas Drilling Services, Inc., a Delaware corporation,
shall be added as Member of the AGREEMENT effective January 31, 1997.
* * * * * * * * * * *
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officer effective as of the date first set
forth above.
TNGC HOLDINGS CORPORATION
By:
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TRANSAMERICAN NATURAL GAS
CORPORATION
By:
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TRANSAMERICAN REFINING
CORPORATION
By:
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TRANSTEXAS GAS CORPORATION
By:
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TRANSAMERICAN PIPELINE
CORPORATION
By:
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SOUTHERN STATES, INC.
By:
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SOUTHERN STATES EXPLORATION, INC.
By:
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LAREDO EXPLORATION, INC.
By:
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SOUTHERN PETROLEUM TRADING
COMPANY, LTD.
By:
---------------------------------
TRANSAMERICAN GAS TRANSMISSION
CORPORATION
By:
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JRS REALTY INC.
By:
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JRS PROPERTIES, INC.
By:
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GOOD HOPE CHEMICAL CORP.
By:
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SOUTHEAST MARINE, INC.
By:
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TRANSAMERICAN ENERGY CORPORATION
By:
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TRANSTEXAS DRILLING SERVICES, INC.
By:
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TRANSAMERICAN EXPLORATION CORPORATION
By:
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TRANSTEXAS EXPLORATION CORPORATION
By:
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TRANSLOUISIANA PIPELINE CORPORATION
By:
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SOUTHEAST LOUISIANA CONTRACTORS OF
NORCO, INC.
By:
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