EX-10.69 7 h86529ex10-69.txt SUBORDINATION AGREEMENT - DATED 2/7/01 1 EXHIBIT 10.69 SUBORDINATION AGREEMENT This Subordination Agreement (this "Agreement") is made as of February 7, 2001, by GMAC Commercial Credit LLC, a New York limited liability company ("GMACCC") as Agent under the Credit Agreement referred to below (in such capacity, herein called the "Mortgage Holder") and TransTexas Gas Corporation, a Delaware corporation (herein called "TransTexas") for the benefit of Mirant Americas Energy Capital, LP, formerly named Southern Producer Services, L.P., and TCW DR VI Investment Partnership, L.P. (herein collectively called the "Production Payment Owners"). RECITALS: 1. The Mortgage Holder and TransTexas have entered into that certain Oil & Gas Revolving Credit and Term Loan Agreement dated as of March 15, 2000 (herein, as from time to time amended or supplemented, called the "Credit Agreement"), for the benefit of the Agent and the financial institutions (including GMACCC) from time to time parties thereto as Lenders. Pursuant to the Credit Agreement, TransTexas has executed and delivered certain mortgages, deeds of trust, security agreements and financing statements (collectively, the "Security Documents") to secure the Obligations (as defined in the Credit Agreement and used herein with the same meaning). A true and complete list of such Security Documents which burden properties in Texas is attached as Schedule 1 hereto and made a part hereof. Each deed of trust and mortgage listed on Schedule 1 is herein called a "Mortgage". 2. As described in Section 9.2 of each Mortgage, TransTexas has heretofore executed and delivered to the Production Payment Owners that certain Production Payment Conveyance made effective as of 9:00 a.m., Houston, Texas time on March 1, 2000 (defined in each such Section 9.2 as the "Production Payment Conveyance" and herein called the "Original Conveyance"), pursuant to which TransTexas conveyed and assigned to the Production Payment Owners a certain production payment (defined in each such Section 9.2 as the "Production Payment" and herein called the "Original Production Payment"). As described in Section 9.2 of each Mortgage, the Original Conveyance was given pursuant to an Order of the United States Bankruptcy Court. As contemplated in such Court Order, the Original Conveyance has heretofore been supplemented by a First Supplement to Production Payment Conveyance dated as of June 7, 2000 (the "First Supplement"), by a Second Supplement to Production Payment Conveyance dated as of September 8, 2000 (the "Second Supplement"), and by a Third Supplement to Production Payment Conveyance dated as of November 7, 2000 (the "Third Supplement"), to increase the unliquidated balance of the "Primary Sum" thereunder. The Original Conveyance, the First Supplement, the Second Supplement, and the Third Supplement have been recorded as set forth in Schedule 1 to Exhibit A hereto. 3. Concurrently herewith, in consideration of funds to be paid to TransTexas, TransTexas and the Production Payment Owners are executing and delivering that certain Fourth Supplement to Production Payment Conveyance of even date herewith (the "Fourth Supplement") which further supplements and amends the Original Conveyance. Prior to the 2 effective time of the Fourth Supplement, one of the three original owners of the Production Payment (TCW Portfolio No. 1555 DR V Sub-Custody Partnership, L.P.) is conveying all of its interests in the Production Payment to Mirant Americas Energy Capital, LP, formerly named Southern Producer Services, L.P., one of the two remaining Production Payment Owners, and after the effective time of the Fourth Supplement, Mirant Americas Energy Capital, LP, formerly named Southern Producer Services, L.P., is conveying part of its interests in the Production Payment to TCW DR VI Investment Partnership, L.P., the other remaining Production Payment Owner. True and correct copies of both such conveyances, and a true and correct copy of the Fourth Supplement, are attached hereto as Exhibit A-1, Exhibit A-2 and Exhibit A-3, respectively, and each is hereby made a part hereof. As used herein, "Conveyance" means the Original Conveyance as amended and supplemented by the First Supplement, the Second Supplement, the Third Supplement, the Fourth Supplement, and such conveyances, and "Production Payment" has the meaning given to such term in the Conveyance. 4. Under the Credit Agreement, the Production Payment constitutes "First Lien Debt" secured by a "Permitted Lien" (as such terms are defined in the Credit Agreement). Pursuant to Section 15.2 of the Credit Agreement, TransTexas has delivered a "Subordination Request" to the Mortgage Holder, asking the Mortgage Holder to enter into this Agreement in order to subordinate the Mortgage Holder Liens to the Production Payment and the Conveyance (after taking the Fourth Supplement into account), and TransTexas has satisfied the conditions in such Section 15.2. (As used herein, "Mortgage Holder Liens" means all liens, security interests, assignments (of production or otherwise) and other rights or interests of the Mortgage Holder at any time existing on or in any properties or assets of TransTexas which are in any way subject to the Production Payment or the Conveyance, whether such liens, security interests, assignments and other rights or interests arise under the Credit Agreement or the Security Documents or by operation of law or otherwise.) NOW, THEREFORE, in consideration of the foregoing, and in order to induce the Production Payment Owners to enter into the Fourth Supplement and pay funds to TransTexas in connection therewith, the Mortgage Holder and TransTexas hereby agree as follows: Section 1. Subordination. The Production Payment and the proceeds thereof are and hereafter shall be senior in right and priority to all Mortgage Holder Liens, regardless of the relative priority of the Mortgage Holder Liens and the Production Payment as determined without regard to this Agreement, and the same shall have the same validity and effect as if the Conveyance (including all supplements thereto) had been executed, delivered and properly recorded prior to the date and time of execution of the Credit Agreement and the date and time of execution and recordation of the Security Documents. All references in Section 9.2 of each Mortgage to the "Production Payment Conveyance" shall hereafter refer to the Conveyance, as defined herein, and all references in Section 9.2 of each Mortgage to the "Production Payment Conveyance" shall henceforth refer to the Production Payment Conveyance, as defined herein. As so modified, the terms of Section 9.2 of each Mortgage are hereby ratified and confirmed. Section 2. Acknowledgment of Reliance. The parties acknowledge and agree that Production Payment Owners have entered into the Fourth Supplement in reliance on the priority 2 3 of the Conveyance, and thus are relying on the waiver, relinquishment and subordination set forth herein. Section 3. Governing Law. This Agreement shall be deemed a contract and instrument made under the laws of the State of Texas and shall be construed and enforced in accordance with and governed by the laws of such state and the laws of the United States of America, without regard to principles of conflicts of law. Section 4. Invalidity of Particular Provisions. If any term or provision of this Agreement shall be determined to be illegal or unenforceable, all other terms and provisions hereof shall nevertheless remain effective and shall be enforced to the fullest extent permitted by applicable law. Section 5. Successors and Assigns. This Agreement shall pass to and be fully binding upon and inure to the benefit of the successors and assigns of each party hereto (including the Production Payment Owners). Section 6. Counterparts. This Agreement may be separately executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to constitute one and the same instrument. IN WITNESS WHEREOF, this Agreement is executed by the parties hereto on the dates set out below in their respective acknowledgments, to take effect as of the date first above written. MORTGAGE HOLDER: GMAC COMMERCIAL CREDIT LLC, as Agent under the Credit Agreement By: -------------------------------------- Name: Title: TRANSTEXAS: TRANSTEXAS GAS CORPORATION By: -------------------------------------- Ed Donahue, Vice President 3 4 STATE OF NEW YORK ) ) COUNTY OF NEW YORK ) The foregoing instrument was acknowledged before me on this ____ day of February, 2001, by ___________________________________, as _______________________________ of GMAC Commercial Credit LLC, a New York limited liability company, on behalf of such limited liability company in its capacity as Agent under the above-described Credit Agreement. [SEAL] ----------------------------------------- Notary Public, State of New York My commission expires: ---------------------- STATE OF TEXAS ) ) COUNTY OF HARRIS ) The foregoing instrument was acknowledged before me on this ____ day of February, 2001, by Ed Donahue as Vice President of TransTexas Gas Corporation, a Delaware corporation, on behalf of such corporation. [SEAL] ----------------------------------------- Notary Public, State of Texas My commission expires: ---------------------- 4 5 SCHEDULE 1 TO SUBORDINATION AGREEMENT SCHEDULE OF TEXAS RECORDING DATA COUNTERPARTS OF THE MORTGAGE, DEED OF TRUST, ASSIGNMENT OF PRODUCTION, SECURITY AGREEMENT AND FINANCING STATEMENT, DATED AS OF MARCH 15, 2000, FROM TRANSTEXAS GAS CORPORATION, AS MORTGAGOR AND DEBTOR, TO JACK MACGOWAN, TRUSTEE, FOR THE BENEFIT OF GMAC COMMERCIAL CREDIT LLC, IN ITS CAPACITY AS AGENT, AS MORTGAGEE AND SECURED PARTY, ARE RECORDED IN THE REAL PROPERTY RECORDS IN THE COUNTIES IN THE STATE OF TEXAS AS SET FORTH IN THE FOLLOWING TABLE:
COUNTY IN WHICH RECORDING DATA COUNTERPART IS (REFERENCE IS ALSO MADE TO THE "NOTE" IMMEDIATELY FOLLOWING THIS TABLE) RECORDED DATE ------------------------------------------------------------------------------- (EACH IN THE STATE OF OF REFERENCE / FILE / TEXAS) RECORDING VOL/BK PAGE(S) FILM CODE NUMBER INSTRUMENT / DOCUMENT NUMBER --------------------- --------- ------ ---------- ---------------- ---------------------------- AUSTIN 03/16/00 001521 BRAZORIA 03/16/00 00010928 CALHOUN 03/21/00 250 1 CHAMBERS 03/17/00 00-448 684 COLORADO 03/16/00 330 742 GALVESTON 03/17/00 0 14-39-0375 HARRIS 03/21/00 U286246 HIDALGO 03/21/00 856645 JIM HOGG 03/20/00 17 421 KENT 03/16/00 2 33 LIVE OAK 03/20/00 380 124 SAN JACINTO 03/16/00 00-612 5814-5897 STARR 03/16/00 0857 772
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COUNTY IN WHICH RECORDING DATA COUNTERPART IS (REFERENCE IS ALSO MADE TO THE "NOTE" IMMEDIATELY FOLLOWING THIS TABLE) RECORDED DATE ------------------------------------------------------------------------------- (EACH IN THE STATE OF OF REFERENCE / FILE / TEXAS) RECORDING VOL/BK PAGE(S) FILM CODE NUMBER INSTRUMENT / DOCUMENT NUMBER --------------------- --------- ------ ---------- ---------------- ---------------------------- VAL VERDE 03/21/00 737 252 WEBB 03/21/00 891 334 690350 WHARTON 03/20/00 360 657 - 777 ZAPATA 03/17/00 629 528 - 636
NOTE: A COUNTERPART OF THE DEED OF TRUST REFERENCED ABOVE, WITH A COMPLETE EXHIBIT "A," IS RECORDED IN THE REAL PROPERTY RECORDS OF GALVESTON COUNTY, TEXAS, AS SET FORTH IN THE FOREGOING TABLE. AS TO THE COUNTERPARTS OF THE DEED OF TRUST REFERENCED ABOVE THAT ARE RECORDED IN THE REAL PROPERTY RECORDS OF OTHER COUNTIES IN THE STATE OF TEXAS (AS INDICATED IN THE TABLE ABOVE), THE EXHIBIT "A" ATTACHED TO EACH SUCH RECORDED COUNTERPART IDENTIFIES ONLY THOSE REAL PROPERTIES LOCATED IN THE COUNTY IN THE STATE OF TEXAS IN WHICH SUCH COUNTERPART IS RECORDED. FOR A COMPLETE LIST OF ALL REAL PROPERTIES IN ALL COUNTIES IN THE STATE OF TEXAS THAT ARE SUBJECT TO THE DEED OF TRUST REFERENCED ABOVE, REFER TO, AND REFERENCE IS HEREBY MADE FOR ALL PURPOSES TO, THE COUNTERPART OF THE DEED OF TRUST REFERENCED ABOVE THAT IS RECORDED IN THE REAL PROPERTY RECORDS OF GALVESTON COUNTY, TEXAS. ADDITIONAL SECURITY DOCUMENTS SECURITY AND PLEDGE AGREEMENT DATED AS OF MARCH 15, 2000, BY AND BETWEEN TRANSTEXAS GAS CORPORATION, A DELAWARE CORPORATION, AS DEBTOR, AND GMAC COMMERCIAL CREDIT LLC, AS AGENT FOR THE "LENDERS" DEFINED AND DESCRIBED THEREIN. FINANCING STATEMENT OF FORM UCC-1 FROM TRANSTEXAS GAS CORPORATION, AS DEBTOR, TO GMAC COMMERCIAL CREDIT LLC, AS AGENT, AS SECURED PARTY, FILED MARCH 22, 2000, IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF TEXAS UNDER FILE NUMBER 0000457016. FINANCING STATEMENT OF FORM UCC-1 FROM TRANSTEXAS GAS CORPORATION, AS DEBTOR, TO GMAC COMMERCIAL CREDIT LLC, AS AGENT, AS SECURED PARTY, FILED NOVEMBER 8, 2000, IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF TEXAS UNDER FILE NUMBER 0000620472 FINANCING STATEMENT OF FORM UCC-1 FROM TRANSTEXAS GAS CORPORATION, AS DEBTOR, TO GMAC COMMERCIAL CREDIT LLC, AS AGENT, AS SECURED PARTY, FILED NOVEMBER 8, 2000, IN THE OFFICE OF THE SECRETARY OF STATE OF THE STATE OF DELAWARE UNDER FILE NUMBER 0079165 7 EXHIBIT A-1 TO SUBORDINATION AGREEMENT Conveyance of Interest in Production Payment 8 EXHIBIT A-2 TO SUBORDINATION AGREEMENT Partial Conveyance of Production Payment 9 EXHIBIT A-3 TO SUBORDINATION AGREEMENT Fourth Supplement to Production Payment Conveyance