-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W0ACALtob4H4nMbysQedG5fgUCzQ/sZFqGQiSQ9ElLaBPm4Gt8co2s+V2uz7q4EG 6WIKP92KxSAWOdNILwtT8A== 0000950134-02-008096.txt : 20020703 0000950134-02-008096.hdr.sgml : 20020703 20020703172843 ACCESSION NUMBER: 0000950134-02-008096 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20020703 GROUP MEMBERS: FIRST RESERVE FUND VI LP GROUP MEMBERS: FIRST RESERVE FUND VII LP GROUP MEMBERS: FIRST RESERVE FUND VIII LP GROUP MEMBERS: FIRST RESERVE GP VII LP GROUP MEMBERS: FIRST RESERVE GP VIII LP FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FIRST RESERVE CORP CENTRAL INDEX KEY: 0001041828 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 13430 NW FRWY STREET 2: STE 350 CITY: HOUSTON STATE: TX ZIP: 77040 MAIL ADDRESS: STREET 1: 13430 NW FRWY STREET 2: STE 350 CITY: HOUSTON STATE: TX ZIP: 77040 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRANSMONTAIGNE INC CENTRAL INDEX KEY: 0000755199 STANDARD INDUSTRIAL CLASSIFICATION: PIPE LINES (NO NATURAL GAS) [4610] IRS NUMBER: 061052062 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-36106 FILM NUMBER: 02696841 BUSINESS ADDRESS: STREET 1: 370 17TH ST STREET 2: SUITE 2750 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036268200 MAIL ADDRESS: STREET 1: P O BOX 5660 STREET 2: SUITE 2750 CITY: DENVER STATE: CO ZIP: 80217 FORMER COMPANY: FORMER CONFORMED NAME: SHEFFIELD EXPLORATION CO INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: TRANSMONTAIGNE OIL CO DATE OF NAME CHANGE: 19960724 SC 13D/A 1 d98175a7sc13dza.txt AMENDMENT NO. 7 TO SCHEDULE 13D SCHEDULE 13D (Rule 13d-101) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Under the Securities Exchange Act of 1934 Amendment No. 7 --- TransMontaigne, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 89393410 - -------------------------------------------------------------------------------- (CUSIP Number) Thomas R. Denison - First Reserve Corporation, 1801 California St., #4110, Denver, CO 80202, (303) 382-1270 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 28, 2002 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box following box. [ ] Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SEC 1746 (12-91) - -------------------- -------------------- CUSIP No. 89393410 SCHEDULE 13D Page 2 of 16 Pages - -------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Reserve Corporation I.R.S. No.: 06-1210123 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X] (b) [ ] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 10,112,244 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 10,112,244 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,112,244 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 22.6% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------- -------------------- CUSIP No. 89393410 SCHEDULE 13D Page 3 of 16 Pages - -------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Reserve Fund VI, Limited Partnership I.R.S. No.: 06-1334650 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 0 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 0.0% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------- -------------------- CUSIP No. 89393410 SCHEDULE 13D Page 4 of 16 Pages - -------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Reserve Fund VII, Limited Partnership I.R.S. No.: 06-1457408 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 3,894,481 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 3,894,481 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,894,481 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 9.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------- -------------------- CUSIP No. 89393410 SCHEDULE 13D Page 5 of 6 Pages - -------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Reserve Fund VIII, L.P. I.R.S. No.: 06-1507364 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 6,225,953 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 6,225,953 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,225,953 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------- -------------------- CUSIP No. 89393410 SCHEDULE 13D Page 6 of 16 Pages - -------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Reserve GP VII, L.P. I.R.S. No.: 06-1520256 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 3,894,481 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 3,894,481 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,894,481 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 9.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. - -------------------- -------------------- CUSIP No. 89393410 SCHEDULE 13D Page 7 of 16 Pages - -------------------- -------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Reserve GP VIII, L.P. I.R.S. No.: 06-1507318 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* N/A - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES 0 BENEFICIALLY ------------------------------------------------------ OWNED BY 8 SHARED VOTING POWER EACH REPORTING 6,225,953 PERSON ------------------------------------------------------ WITH 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------------------ 10 SHARED DISPOSITIVE POWER 6,225,953 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 6,225,953 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 14.5% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN - -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 8 This Amendment No. 7 to the statement on Schedule 13D (the "Statement"), originally filed on June 4, 1996, is filed by First Reserve Fund VI, Limited Partnership ("Fund VI"), First Reserve Fund VII, Limited Partnership ("Fund VII"), First Reserve GP VII, L.P. ("GP VII"), First Reserve Fund VIII, L.P. ("Fund VIII"), First Reserve GP VIII, L.P. ("GP VIII"), and First Reserve Corporation ("First Reserve," and collectively, the "Reporting Persons") and relates to the Common Stock, par value $0.01 per share (the "Common Stock"), of TransMontaigne Inc., a Delaware corporation (the "Issuer" or "TransMontaigne"). That Schedule 13D is hereby amended as set forth below. ITEM 2. IDENTITY AND BACKGROUND. Schedule I (providing information required by Item 2 with respect to the executive officers and directors of First Reserve Corporation) is amended and restated in the manner attached. ITEM 4. PURPOSE OF THE TRANSACTION. Item 4 is hereby amended by adding the following: On June 28, 2002, the Issuer engaged in a recapitalization transaction with certain of its stockholders pursuant to which (i) certain holders of shares of Series A Preferred Stock and Warrants to purchase Common Stock exchanged these securities for a combination of Series B Preferred Stock, Common Stock and cash, and (ii) shares of Common Stock held by Fund VI were redeemed for cash. In this transaction, (A) Fund VII exchanged all 26,767 of its shares of Series A Preferred and all 1,666,750 of its Warrants for 12,345 shares of Series B Preferred, 2,015,837 shares of Common Stock, and $3,608,000 in cash; (B) Fund VIII exchanged all 42,827 of its shares of Series A Preferred and all 2,666,800 of its Warrants for 19,750 shares of Series B Preferred, 3,225,339 shares of Common Stock, and $5,773,000 in cash; and (C) Fund VI exchanged all 4,130,473 of its shares of Common Stock for $20,445,841 in cash (a price of $4.95 per share). See Item 6 - "Recapitalization Agreement" and "Fund VI Stock Purchase" Fund VI entered into the recapitalization transaction for the purpose of liquidating its ownership position in the Issuer. Fund VII and Fund VIII entered to the recapitalization transaction to assist the Issuer in reducing the total amount of preferred stock outstanding, thereby reducing required dividend payments by the Issuer. In addition, Fund VII and Fund VIII received the right to nominate members to the Issuer's board of directors, which right was formerly held by Fund VI and prior First Reserve Corporation affiliates. See Item 6 - "Agreement to Elect Directors" Fund VII and Fund VIII intend to participate in and influence the affairs of the Issuer through the exercise of their voting rights with respect to the shares of Series B Preferred Stock and Common Stock owned by such persons. 9 Each of Fund VII and Fund VIII intend to review on a continuing basis its investment in the Issuer, and may or may not acquire additional shares, on the open market or otherwise, subject to: the price and availability of the Issuer's securities; subsequent developments affecting the energy market as a whole; the Issuer and the Issuer's business and prospects; other investment and business opportunities available to such Fund, general stock market and economic conditions; and other factors. Each of Fund VII and Fund VIII may or may not also decide to dispose of Issuer securities at any time, including without limitation through adoption and execution of a written plan under Rule 10b5-1 of the Exchange Act of 1934, or to formulate other purposes, plans or proposals regarding the Issuer or any of its securities based on all of the above factors and on the terms of the Certificate of Designations of Series B Preferred Stock of the Issuer (see Item 6 - "Series B Certificate of Designations"); the terms of the Preferred Stock Recapitalization Agreement, dated June 27, 2002 (see Item 6 - "Recapitalization Agreement"); the terms of the Stockholders' Agreement, dated June 28, 2002 (see Item 6 - "Stockholders' Agreement"), and the eventual liquidation of such Fund in accordance with its partnership agreement. ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER. Item 5(a) is hereby amended and restated in its entirety as follows: (a) As of June 28, 2002, the Reporting Persons beneficially owned an aggregate of 10,112,244 shares of Common Stock, which constitutes beneficial ownership of approximately 22.6% of the 39,946,848 shares of Common Stock outstanding as of June 28, 2002, as reported by the Issuer.
REPORTING PARTY NUMBER OF SHARES PERCENTAGE OF BENEFICIALLY CLASS OWNED First Reserve Corporation (1) 10,112,244 (2) 22.6% Fund VII (1) 3,894,481 (3) 9.3% Fund VIII (1) 6,225,953 (4) 14.5% GP VII (1) 3,894,481 (3) 9.3% GP VIII (1) 6,225,953 (4) 14.5%
(1) GP VII and GP VIII are the general partners of Fund VII and Fund VIII, respectively, and may be deemed to beneficially own the shares of Common Stock owned by Fund VII and Fund VIII. First Reserve, as the general partner of GP VII and GP VIII, may be deemed to beneficially own all of the shares of Common Stock owned by all Reporting Persons. Fund VII and GP VII each disclaim beneficial ownership of any shares of Common Stock not held by Fund VII; Fund VIII and GP VIII each disclaim beneficial ownership of any shares of Common Stock not held by Fund VIII. 10 (2) This includes 4,862,878 shares of Common Stock currently issuable upon conversion of Series B Preferred Stock held by Fund VII and Fund VIII, and 8,190 shares of Common Stock held by John A. Hill, which may be deemed beneficially owned by each of Fund VII and Fund VIII. (3) This includes 1,870,454 shares of Common Stock currently issuable upon conversion of Series B Preferred Stock held by Fund VII, and 8,190 shares of Common Stock held by John A. Hill, which may be deemed beneficially owned by Fund VII. (4) This includes 2,992,424 shares of Common Stock currently issuable upon conversion of Series B Preferred Stock held by Fund VIII, and 8,190 shares of Common Stock held by John A. Hill, which may be deemed beneficially owned by Fund VIII. Item 5(c) is hereby deleted and replaced with the following: (c) During the last 60 days, the transactions described under Item 6 - "Recapitalization Agreement" and "Fund VI Stock Purchase" were effected. (d) To the best knowledge of the Reporting Persons, no other person has the right to receive, or the power to direct the receipt of dividends from, or the power to direct the receipt of proceeds of the sale of the shares of Common Stock owned by the Reporting Persons. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENT, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is hereby amended by adding the following: RECAPITALIZATION AGREEMENT On June 28, 2002, the Issuer, Fund VII, Fund VIII and several other holders of the Issuer's Series A Preferred Stock and Warrants entered into the Preferred Stock Recapitalization Agreement (the "Recapitalization Agreement"), pursuant to which (i) certain holders of shares of Series A Preferred Stock and Warrants to purchase Common Stock exchanged these securities for a combination of Series B Preferred Stock, Common Stock and cash, and (ii) shares of Common Stock held by Fund VI were redeemed for cash. In this transaction, (A) Fund VII exchanged all 26,767 of its shares of Series A Preferred and all 1,666,750 of its Warrants for 12,345 shares of Series B Preferred, 2,015,837 shares of Common Stock, and $3,608,000 in cash; and (B) Fund VIII exchanged all 42,827 of its shares of Series A Preferred and all 2,666,800 of its Warrants for 19,750 shares of Series B Preferred, 3,225,339 shares of Common Stock, and $5,773,000 in cash. Also, in the Recapitalization Agreement, the Issuer agreed to limitations on its ability to issue new shares of capital stock, or to redeem outstanding shares of capital stock. 11 Fund VII and Fund VIII also agreed to give to the Issuer 15 days' advance notice of any proposed sale of Common Stock to the extent sales by such persons would exceed 3% of the then outstanding Common Stock during a nine month period. FUND VI STOCK PURCHASE As a condition to the closing of the Recapitalization Agreement, pursuant to a letter agreement between the Issuer and Fund VI, dated June 27, 2002, the Issuer agreed to purchase, and Fund VI agreed to sell, 4,130,473 shares of Common Stock for $20,445,841 in cash. The closing of the purchase was conditioned upon closing of the Recapitalization Agreement. AGREEMENT TO ELECT DIRECTORS Pursuant to a letter agreement among the Issuer, Fund VI, Fund VII and Fund VIII, dated June 26, 2002, the parties amended the Agreement to Elect Directors dated as of April 17, 1996 (the "Agreement to Elect Directors"), to provide that Fund VII and Fund VIII are "First Reserve Investors" under that agreement, and that such agreement will continue until First Reserve Investors beneficially own less than 10% of the Common Stock. The Agreement to Elect Directors, as amended, requires the Issuer to take all action necessary to cause two individuals designated by the First Reserve Investors to be elected to the Issuer's board of directors. John A. Hill and Ben A. Guill are currently the designees of the First Reserve Investors. STOCKHOLDERS' AGREEMENT As a condition to the closing of the Recapitalization Agreement, the parties amended and restated the Stockholders' Agreement, dated March 29, 1999, to provide that holders of Series B Preferred Stock (including Fund VII and Fund VIII) with tag-along rights with respect to key members of the Issuer's management. In the event of a proposed sale of Common Stock by such key managers, such individuals must also include in such sale shares of held by Fund VII and Fund VIII (among others) on a pro rata basis. Such requirements do not apply to transfers by such key managers of up to 35% of the shares of Common Stock held by such individuals as of June 30, 2002. REGISTRATION RIGHTS AGREEMENT As a condition to the closing of the Recapitalization Agreement, the parties amended and restated the Preferred Stock Investors Registration Rights Agreement, dated March 29, 1999, to provide specified holders (including Fund VII and Fund VIII) with demand and piggyback registration rights with respect to shares held by such holders. CERTIFICATE OF DESIGNATIONS OF SERIES B PREFERRED STOCK As a condition to the closing of the Recapitalization Agreement, the Issuer filed with the Delaware Secretary of State the Certificate of Designations of Series B Preferred Stock (the "Certificate"). The Certificate provides holders of Series B Preferred Stock certain dividend, liquidation preference, redemption, conversion and voting rights. In connection with transactions that would involve a change of control of the Issuer, the holders of Series B Preferred Stock may 12 elect to cause the Issuer to redeem in cash the shares of Series B Preferred Stock at the greater of (a) the aggregate liquidation value (plus accrued and unpaid dividends), or (b) the value of consideration such holders would receive were they to convert their shares of Series B Preferred Stock immediately prior to such transaction. In addition, holders of Series B Preferred Stock are required to give the Issuer 15 days' advance notice of any proposed sale of Series B Preferred Stock to the extent sales by such persons would exceed 3% of the then outstanding Series B Preferred Stock during a nine month period. ITEM 7. EXHIBITS. A. Preferred Stock Recapitalization Agreement, dated June 27, 2002 B. Letter Agreement between Issuer and Fund VI, dated June 27, 2002, relating to purchase of Common Stock by Issuer from Fund VI. C. Letter Agreement among Issuer, Fund VI, Fund VII and Fund VIII, dated June 26, 2002, amending the Agreement to Elect Directors, dated April 17, 1996. D. Stockholders' Agreement among Issuer and various stockholders, dated June 28, 2002. E. Amended and Restated Preferred Stock Investors Registration Rights Agreement, dated June 28, 2002. F. Certificate of Designations of Series B Preferred Stock. 13 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. Dated: July 1, 2002. FIRST RESERVE CORPORATION By: /s/ Thomas R. Denison -------------------------- Name: Thomas R. Denison Title: Managing Director FIRST RESERVE FUND VI, LIMITED PARTNERSHIP By: First Reserve Corporation, its General Partner By: /s/ Thomas R. Denison -------------------------- Name: Thomas R. Denison Title: Managing Director FIRST RESERVE FUND VII, LIMITED PARTNERSHIP By: First Reserve GP VII, L.P., its General Partner By: First Reserve Corporation, its General Partner By: /s/ Thomas R. Denison -------------------------- Name: Thomas R. Denison Title: Managing Director 14 FIRST RESERVE FUND VIII, LIMITED PARTNERSHIP By: First Reserve GP VIII, L.P., its General Partner By: First Reserve Corporation, its General Partner By: /s/ Thomas R. Denison -------------------------- Name: Thomas R. Denison Title: Managing Director FIRST RESERVE GP VII, L.P. By: First Reserve Corporation, its General Partner By: /s/ Thomas R. Denison -------------------------- Name: Thomas R. Denison Title: Managing Director FIRST RESERVE GP VIII, L.P. By: First Reserve Corporation, its General Partner By: /s/ Thomas R. Denison -------------------------- Name: Thomas R. Denison Title: Managing Director 15 SCHEDULE I The name, business address and present principal occupation or employment of each of the executive officers and directors of the First Reserve Corporation are set forth below. Unless otherwise indicated, (i) the business address of each is 411 West Putnam Ave., Suite 109, Greenwich, Connecticut 06830, (ii) each such person is a citizen of the United States, and (iii) such person does not have any other principal occupation:
Name Position with First Reserve Corporation ---- --------------------------------------- William E. Macaulay Chairman, CEO, Managing Director and Director John A. Hill Vice Chairman, Managing Director and Director Ben A. Guill President, Managing Director and Director Will Honeybourne Managing Director Thomas R. Denison Managing Director, General Counsel, Secretary Jennifer Zarrilli Vice President, Treasurer and Chief Financial Officer Thomas Sikorski Managing Director
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION ------- ----------- A. Preferred Stock Recapitalization Agreement, dated June 27, 2002 B. Letter Agreement between Issuer and Fund VI, dated June 27, 2002, relating to purchase of Common Stock by Issuer from Fund VI. C. Letter Agreement among Issuer, Fund VI, Fund VII and Fund VIII, dated June 26, 2002, amending the Agreement to Elect Directors, dated April 17, 1996. D. Stockholders' Agreement among Issuer and various stockholders, dated June 28, 2002. E. Amended and Restated Preferred Stock Investors Registration Rights Agreement, dated June 28, 2002. F. Certificate of Designations of Series B Preferred Stock.
EX-99.A 3 d98175a7exv99wa.txt PREFERRED STOCK RECAPITALIZATION 16 EXHIBIT A EXECUTION COPY PREFERRED STOCK RECAPITALIZATION AGREEMENT This PREFERRED STOCK RECAPITALIZATION AGREEMENT is dated as of June 27, 2002, between TransMontaigne Inc., a Delaware corporation (the "Company"), and the Investor listed on the signature page of this Agreement (the "Investor"). WITNESSETH: WHEREAS, the Company desires to recapitalize (the "Recapitalization") 157,715.2402 of the outstanding shares of the Company's Series A Convertible Preferred Stock, par value $.01 per share (the "Series A Preferred Stock"), and 9,841,493 of the outstanding Warrants to purchase three-fifths of one share of the Common Stock of the Company (the "Warrants") into an aggregate of (i) 11,902,705 shares of the Company's Common Stock, par value $.01 per share (the "Common Stock"), (ii) $21,303,000 in cash (including accrued but unpaid dividends on all the Series A Preferred Stock through June 30, 2002), and (iii) $72,890,000 liquidation value of the Company's Series B Convertible Preferred Stock, par value $.01 per share (the "Series B Preferred Stock"), and the Investor has agreed to participate in the Recapitalization on the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: SECTION 1. RECAPITALIZATION OF PREFERRED STOCK AND WARRANTS (a) Subject to the terms and conditions hereof and in reliance upon the representations and warranties of the Company contained herein, the Investor agrees to tender to the Company on the Closing Date specified in Section 2 hereof, the number of shares of Series A Preferred Stock in certificated form (except for fractional shares which are held by the Company's transfer agent in book-entry form) and the number of Warrants set forth opposite the Investor's name on Schedule 1 hereto to be recapitalized for, and the Company agrees to issue and/or deliver to the Investor, (i) the number of shares of Common Stock in certificated form, (ii) the amount in cash net of tax withholding, if applicable and (iii) the number of shares of Series B Preferred Stock, each as set forth opposite the Investor's name on Schedule 1 hereto (the "Proceeds"). The shares of Series B Preferred Stock being acquired under this Agreement by the Investor and by the other Investors under the other Recapitalization Agreements are collectively referred to herein as the "Shares", containing rights and privileges as more fully set forth in the 17 Certificate of Designations of the Company in the form attached hereto as Exhibit A (the "Certificate of Designations"). (b) The shares of Series A Preferred Stock and the Warrants held by the holders thereof listed on Schedule 1 hereto (all such holders who participate in the Recapitalization being herein called the "Investors") are being recapitalized by the Company pursuant to this Agreement and the other Preferred Stock Recapitalization Agreements (all such agreements collectively, as from time to time supplemented or amended or as the terms thereof may be waived, the "Recapitalization Agreements"). All Recapitalization Agreements shall be identical except as to the identities of the respective Investors, the number of shares of Series A Preferred Stock and the number of Warrants to be tendered by each Investor in the Recapitalization, the consideration to be received by each Investor and the date of such Recapitalization Agreement; provided, however, that the proportions of cash, before withholding taxes, if any, Initial Common Stock and Shares paid in consideration for the Recapitalization (other than any payment in cash for fractional shares of Initial Common Stock) received by each Investor shall be identical. The Recapitalization under each of the Recapitalization Agreements is a separate transaction, and no Investor shall have any liability under any Recapitalization Agreement other than the Recapitalization Agreement to which it is a party. (c) The amount of cash withheld pursuant to Section 1(a) (ii), as indicated on Schedule 1 hereto, shall be the amount of any withholding tax assessed or assessable on the Proceeds or any prior cash dividends on the Series A Preferred Stock, to the extent required by law. (d) All shares of Series A Preferred Stock recapitalized pursuant to this Agreement shall be retired and canceled and shall upon cancellation be restored to the status of authorized but unissued shares of preferred stock, subject to reissuance by the Board of Directors as shares of preferred stock of one or more other series but not as shares of Series A Preferred Stock. (e) The Company intends (i) to treat the Recapitalization as a reorganization within the meaning of Section 368(a)(1) of the Code, (ii) to treat the Series A Preferred Stock and the Series B Preferred Stock as other than "preferred stock" within the meaning of Section 305(b) of the Code and Treas. Reg. Section 1.305-5(a) and (iii) to amend its 2001 U.S. Federal income tax information returns with respect to distributions paid-in-kind on the Series A Preferred Stock to treat such distributions as other than "dividends" within the meaning of Section 6042 of the Code. SECTION 2. THE CLOSING (a) Subject to the terms and conditions hereof, the closing of the Recapitalization (the "Closing") will take place at the offices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New York at 2:00 P.M., New York City time, on June 28, 2002 or such later time and date as shall be specified by the Company and mutually 18 agreed to by the Investors (with at least 48 hours notice). Such time and date are herein referred to as the "Closing Date". (b) Subject to the terms and conditions hereof, on the Closing Date (i) the Company will deliver to the Investor (x) a certificate registered in the Investor's name (or the name of its nominee, if any, as specified on Schedule 1 hereto) evidencing the number of shares of Common Stock set forth opposite the Investor's name on Schedule 1 hereto, (y) a certificate registered in the Investor's name (or the name of its nominee, if any, as specified on Schedule 1 hereto) evidencing the number of Shares set forth opposite the Investor's name on Schedule 1 hereto and (z) a wire transfer in an amount equal to the amount set forth opposite the Investor's name on Schedule 1 hereto and (ii) the Investor will deliver to the Company (x) certificates evidencing the number of whole shares of Series A Preferred Stock set forth opposite the Investor's name on Schedule 1 hereto and (y) certificates evidencing the number of Warrants set forth opposite the Investor's name on Schedule 1 hereto. At least seven (7) calendar days prior to the Closing Date, the Investor shall provide the Company with current wire transfer instructions for payment of the cash portion of the consideration to be paid in the Recapitalization and any future cash dividends paid in respect of the Series B Preferred Stock. As long as the Investor continues to hold Shares, the Investor shall provide the Company promptly with any updated wire transfer instructions for payment of dividends in respect of such Shares. SECTION 3. DEFINITIONS (a) For purposes of this Agreement, the following definitions shall apply (such definitions to be equally applicable to both the singular and plural form of the terms defined): "Additional Shares of Stock" has the meaning set forth in Section 12 of the Certificate of Designations. "Affiliate", when used with respect to any Person, means (i) if such Person is a corporation, any officer or director thereof and any Person which is, directly or indirectly, the beneficial owner (by itself or as part of any group) of more than five percent (5%) of any class of any equity security (within the meaning of the Securities Exchange Act) thereof, and, if such beneficial owner is a partnership, any general partner thereof, or if such beneficial owner is a corporation, any Person controlling, controlled by or under common control with such beneficial owner, or any officer or director of such beneficial owner or of any corporation occupying any such control relationship, (ii) if such Person is a partnership, any general or limited partner thereof, and (iii) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person. For purposes of this definition, "control" (including the correlative terms "controlling", "controlled by" and "under common control with"), with respect to any Person, shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person whether through the ownership of voting securities or by contract or otherwise. The holding of Initial Common Stock 19 or Shares (or of Conversion Shares obtained upon conversion of Shares), and the rights under any Recapitalization Agreement or under the Certificate of Designations, the Stockholders' Agreement or the Registration Rights Agreement, or the exercise of any such rights, shall not cause an Investor to be deemed to be an "Affiliate" of the Company or of any Subsidiary. "Agreement" means this Preferred Stock Recapitalization Agreement (together with exhibits and schedules) as from time to time supplemented or amended or as the terms hereof may be waived. "Benefit Plan" means any Plan, existing at the Closing Date or prior thereto, established or to which contributions have at any time been made by the Company or any Subsidiary, or any predecessor of any of the foregoing, or under which any employee, former employee or director of the Company or any Subsidiary or any beneficiary thereof is covered, is eligible for coverage or has benefit rights. "Board" or "Board of Directors" means with respect to any Person which is a corporation, a business trust or other entity, the board of directors or other group, however, designated, which is charged with legal responsibility for the management of such Person, or any committee of such board of directors or group, however designated, which is authorized to exercise the power of such board or group in respect of the matter in question. "Business Day" means any day that is not a Saturday, a Sunday or any day on which banks in the State of New York are authorized or obligated to close. "Capitalized Leases" means any lease to which the Company or a Subsidiary is party as lessee, or by which it is bound, under which it leases any property (real, personal or mixed) from any lessor other than the Company or a Subsidiary, and which is required to be capitalized in accordance with generally accepted accounting principles consistently applied. "Certificate of Designations" has the meaning set forth in Section 1(a) hereof. "Closing" has the meaning set forth in Section 2(a) hereof. "Closing Date" has the meaning set forth in Section 2(a) hereof. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and the regulations thereunder. "Commission" means the Securities and Exchange Commission and any successor agency of the federal government administering the Securities Act or the Securities Exchange Act. "Common Stock" means the Company's Common Stock, par value $.01 per share, and shall also include any capital stock or other securities of the Company into which the Common Stock is changed, including by way of a reclassification, combination or subdivision. 20 "Company" means TransMontaigne Inc., a Delaware corporation, and its successors and assigns. "Consolidated" or "consolidated", when used with reference to any financial term in this Agreement, means the aggregate for the Company and its Subsidiaries of the amounts signified by such term for all such Persons, with intercompany items eliminated, and otherwise as determined in accordance with generally accepted accounting principles consistently applied (except as otherwise expressly provided herein). "Conversion Price" has the meaning set forth in Section 3 of the Preferred Stock and Warrant Purchase Agreements. "Conversion Share" or "Conversion Shares" means the shares of the Common Stock obtained or obtainable upon conversion of Shares and shall also include any capital stock or other securities into which Conversion Shares are changed and any capital stock or other securities resulting from or comprising a reclassification, combination or subdivision of, or a stock dividend on, any Conversion Shares. "Credit Agreement" means the Fourth Amended and Restated Credit Agreement dated as of February 11, 2000, between the Company and Fleet National Bank (formerly BankBoston, N.A.) as agent, as amended, modified or the terms of which are waived from time to time, or one or more credit agreements, that subsequent to the termination or expiration of the Credit Agreement, may be entered into to refinance the indebtedness incurred in connection with the Credit Agreement or any successor credit agreement, as amended, modified or the terms of which are waived from time to time. "Derivative Security" has the meaning set forth in Section 12 of the Certificate of Designations. "Environmental Laws" means all applicable federal, state, local, foreign, civil and criminal laws, statutes, ordinances, orders, codes, Environmental Permits, rules and regulations and common law relating to the protection of the environment and human health or relating to the release, handling, use, generation, treatment, storage, transportation or disposal of Hazardous Materials, including but not limited to the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; The Occupational Safety and Health Act, 29 U.S.C. Section 651; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section 136y et seq.; and the Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., all as may be amended or superseded from time to time. "Environmental Lien" means any Liens arising under or pursuant to any Environmental Law. 21 "Environmental Permits" means all permits, licenses, approvals, authorizations or consents required by any Governmental Authority under any applicable Environmental Law and includes any and all orders, consent orders or binding agreements issued by or entered into with a Governmental Authority under any applicable Environmental Law. "ERISA" means Employee Retirement Income Security Act of 1974, as amended. "ERISA Affiliate" means each "person" (as defined in Section 3(9) of ERISA) which is under "common control" with the Company or any of its Subsidiaries (within the meaning of Section 414(b) or (c) or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) or (o) of the Code). "Exercise Price" has the meaning set forth in the Introduction to the Warrant Agreement. "Fair Market Value" has the meaning set forth in Section 12 of the Certificate of Designations. "Financial Officer" of the Company means its chief executive officer, chief financial officer, chief operating officer, chairman, president, treasurer or any of its vice presidents whose primary responsibility is for its financial affairs, in each case whose incumbency and signatures have been certified to the Investor by the secretary or other appropriate attesting officer of the Company. "Governmental Authority" means any federal, state, or local governmental agency or authority (including regulatory authority) having jurisdiction over the Company or any of its Subsidiaries or any of its respective assets or businesses. "Guaranty" means (i) any guaranty or endorsement of the payment or performance of, or any contingent obligation in respect of, any indebtedness or other obligation of any other Person, (ii) any other arrangement whereby credit is extended to one obligor (directly or indirectly) on the basis of any promise or undertaking of another Person (a) to pay the indebtedness of such obligor, (b) to purchase an obligation owed by such obligor, (c) to purchase or lease assets (or to provide funds, goods or services) under circumstances that would enable such obligor to discharge one or more of its obligations or (d) to maintain the capital, working capital, solvency or general financial condition of such obligor, in each case whether or not such arrangement is disclosed in the balance sheet of such other Person or is referred to in a footnote thereto and (iii) any liability as a general partner of a partnership in respect of indebtedness or other obligations of such partnership; provided, however, that the term "Guaranty" shall not include (1) endorsements for collection or deposit in the ordinary course of business or (2) obligations of the Company or its Subsidiaries which would constitute Guaranties solely by virtue of the continuing liability of a Person which has sold assets subject to liabilities for the liabilities which were assumed by the Person acquiring the assets, unless such liability is required to be carried on the consolidated balance sheet of the Company. The amount of any Guaranty and 22 the amount of indebtedness resulting from such Guaranty shall be the maximum amount of the guarantor's potential obligation in respect of such Guaranty. "Hazardous Materials" means any petroleum, petroleum hydrocarbons, petroleum waste or petroleum products, underground storage tanks, asbestos or asbestos-containing materials, pesticides, lead and lead-containing materials, urea formaldehyde insulation and polychlorinated biphenyls (PCBs), ionizing and non-ionizing radiation including radon and electromagnetic frequency radiation; and any chemicals, materials, substances or wastes in any amount or concentration which are now or hereafter designated or regulated as "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances" or "toxic pollutants" under any Environmental Law. "Indebtedness" of any Person means, without duplication, as of any date as of which the amount thereof is to be determined, (i) all obligations of such Person to repay money borrowed (including, without limitation, all notes payable and drafts accepted representing extensions of credit, all obligations under letters of credit, all obligations evidenced by bonds, debentures, notes or other similar instruments and all obligations upon which interest charges are customarily paid), (ii) all Capitalized Leases in respect of which such Person is liable as lessee or as the guarantor of the lessee, (iii) all monetary obligations which are secured by any Lien existing on property owned by such Person whether or not the obligations secured thereby have been incurred or assumed by such Person, (iv) all conditional sales contracts and similar title retention debt instruments under which such Person is obligated to make payments, (v) all Guaranties by such Person and (vi) all contractual obligations (whether absolute or contingent) of such Person to repurchase goods sold and distributed. "Indebtedness" shall not include, however, (1) Indebtedness of the Company to any of its wholly-owned Subsidiaries or Indebtedness of any wholly-owned Subsidiary to the Company or to another wholly-owned Subsidiary, and (2) any unfunded obligations in any employee pension benefit plan (as defined in ERISA) of the Company or of any Subsidiary. "Initial Common Stock" means the shares of Common Stock issued upon the Recapitalization of the Series A Preferred Stock and the Warrants, such shares having an implied value of $5.53 per share based on the liquidation value of the shares of Series A Preferred Stock recapitalized and the shares of Series B Preferred Stock and cash issued pursuant to the Recapitalization Agreements. "Institutional Investors" means all of the Investors which are parties to the Stockholders' Agreement. "Investment" means, with respect to any Person, (i) any loan, advance or extension of credit by such Person to, and any contributions to the capital of, any other Person, (ii) any Guaranty by such Person, (iii) any interest in any capital stock, equity interest or other securities of any other Person, (iv) any transfer or sale of property of such Person to any other Person other than upon full payment, in cash, or not less than the fair market value of such property and (v) any commitment or option to make an Investment if, in the case of an option, the 23 consideration for the acquisition of such option exceeds $10,000, and any of the foregoing under clauses (i) through (v) shall be considered an Investment whether such Investment is acquired by purchase, exchange, merger or any other method; provided, that the term "Investment" (1) shall not include an Investment in the Company or in a wholly-owned Subsidiary, (2) shall not include current trade and customer accounts receivable and allowances, provided they relate to goods furnished in the ordinary course of business and are given in accordance with the customary practices of the Company or a Subsidiary, (3) shall not include temporary investments of excess cash of the Company or of any Subsidiary in any of the following: (A) investment grade obligations maturing within one year of their issuance which as to principal and interest constitute direct obligations of, or obligations guaranteed by, the United States of America, (B) negotiable certificates of deposit of banks or trust companies which are organized under the laws of the United States of America or any state thereof and which have capital and surplus of at least $500,000,000, (C) commercial paper which is rated not less than prime-one or A-1 or their equivalents by Moody's Investor Service, Inc. or Standard & Poor's Corporation or their successors, (D) any repurchase agreement secured by any one or more of the foregoing and (E) money market funds primarily investing in any of the foregoing securities and sponsored by or affiliated with nationally recognized brokerage or investment advisory firms, and (4) shall not include Investments of the Company or any Subsidiary existing on the date hereof. "Investor" means the person who accepts and agrees to the terms hereof as indicated by such person's signature (as "the undersigned Investor") on the execution page of this Agreement, together with its successors. "Investors" has the meaning set forth in Section 1(b) hereof, together with their respective successors. "knowledge of the Company" or "Company's knowledge" means the actual knowledge, after due inquiry, of the executive officers of the Company. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority or other security interest of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same effect as any of the foregoing, any assignment or other conveyance of any right to receive income and any assignment of receivables with recourse against the assignor), any filing of a financing statement as debtor under the Uniform Commercial Code or any similar statute and any agreement to give or make any of the foregoing. "Material Adverse Effect" means a material adverse effect on the business, assets, operations, condition (financial or other) or prospects of the Company and its Subsidiaries on a consolidated basis. "Notice Period" has the meaning set forth in Section 14(a) hereof. "Outstanding" or "outstanding" means (a) when used with reference to the Shares or Initial Common Stock as of a particular time, all Shares or shares of Common Stock theretofore duly issued except (i) Shares or shares of Common Stock theretofore reported as lost, 24 stolen, mutilated or destroyed or surrendered for transfer, exchange or replacement, in respect of which new or replacement Shares or shares of Common Stock have been issued by the Company, (ii) Shares and shares of Common Stock theretofore canceled by the Company and (iii) Shares and shares of Common Stock registered in the name of, as well as Shares and shares of Common Stock owned beneficially by, the Company, any Subsidiary or any of their Affiliates. For purposes of the preceding sentence, in no event shall "Affiliates" include (x) the persons which are identified as "Investors" on Schedule 1 hereto or (y) any Affiliates of any such persons. "Pension Plan" means any "employee pension benefit plan" as defined in Section 3(2) of ERISA. "Person" or "person" shall mean an individual, partnership, corporation, trust, unincorporated organization, joint venture, government agency, political subdivision or any other entity of any kind. "Plan" means any bonus, incentive compensation, deferred compensation, pension, profit sharing, retirement, stock purchase, stock option, stock ownership, stock appreciation rights, phantom stock, leave of absence, layoff, vacation, day or dependent care, legal services, cafeteria, life, health, accident, disability, workers' compensation or other insurance, severance, separation or other employee benefit plan, practice, policy or arrangement of any kind, whether written or oral, or whether for the benefit of a single individual or more than one individual including, but not limited to, any "employee benefit plan" within the meaning of Section 3(3) of ERISA. "Preferred Stock" means any class of the capital stock of a corporation (whether or not convertible into any other class of such capital stock) which has any right, whether absolute or contingent, to receive dividends or other distributions of the assets of such corporation (including, without limitation, amounts payable in the event of the voluntary or involuntary liquidation, dissolution or winding-up of such corporation), which right is superior to the rights of another class of the capital stock of such corporation. "Preferred Stock" includes, without limitation, the Series B Preferred Stock. "Preferred Stock and Warrant Purchase Agreements" means the Preferred Stock and Warrant Purchase Agreements between the Company and each of the Investors, dated March 1999. "Proceeds" has the meaning specified in Section 1(a) hereof. "Recapitalization" has the meaning specified in the recitals to this Agreement. "Recapitalization Agreements" has the meaning specified in Section 1(b) hereof. "Registration Rights Agreement" means the Amended and Restated Registration Rights Agreement, dated as of March 25, 1999 and amended and restated as of the Closing Date, 25 among the Company and each of the Investors and any other Preferred Stock Investors (as defined in the Registration Rights Agreement). "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder. "SEC Reports" has the meaning set forth in Section 4.2 hereof. "Series A Preferred Stock" means the Company's Series A Convertible Preferred Stock, par value $.01 per share, which will be cancelled upon the recapitalization by the Company of such Series A Preferred Stock on the Closing Date. "Series B Preferred Stock" means the Company's Series B Convertible Preferred Stock, par value $.01 per share, which will have the rights, powers and privileges on the Closing Date as more fully set forth in the Certificate of Designations. "Shares" has the meaning set forth in Section 1(a) hereof. In the event that any Shares are transferred (other than a transfer to an Affiliate of the Investor), then the transferees of such Shares shall not be entitled to any benefits under this Agreement with respect to such Shares and such Shares shall no longer be considered to be "Shares" for purposes of any provision of this Agreement. "Stockholders' Agreement" means the Stockholders' Agreement, dated as of the Closing Date, among the Company, the Institutional Investors and certain officers of the Company. "Subsidiary", with respect to any Person, means any corporation, association or other entity of which more than 50% of the total voting power of shares of stock or other equity interests (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is, at the time as of which any determination is being made, owned or controlled, directly or indirectly, by such Person or one or more of its Subsidiaries, or both. The term "Subsidiary" or "Subsidiaries" when used herein without reference to any particular Person, means a Subsidiary or Subsidiaries of the Company. "Taxes" means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, together with any interest, penalties, additions to tax or additional amounts with respect thereto. "Taxing Authority" means any governmental agency, board, bureau, body, department or authority of any United States federal, state or local jurisdiction, or any foreign jurisdiction, having or purporting to exercise jurisdiction with respect to any Tax. 26 "Tax Returns" means any returns, reports or statements (including any information returns) required to be filed for purposes of a particular Tax. "Warrants" has the meaning set forth in the preamble to this Agreement. "Warrant Agreement" means the Warrant Agreement between the Company and BankBoston, N.A., as the Warrant Agent, dated March 25, 1999. (b) For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (i) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision; (ii) any uses of the masculine, feminine or neuter gender shall also be deemed to include any other gender, as appropriate; (iii) all references herein to actions by the Company or any Subsidiary, such as "exchange", "redeem", "sell", "transfer", "dispose of", etc., mean such action whether voluntary or involuntary, by operation of law or otherwise; and (iv) each of the representations and warranties of the Company contained in Section 4 hereof is separate and is not limited, qualified or modified by the existence, wording or satisfaction of any other representation or warranty of the Company in Section 4 or otherwise. SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to the Investor as follows as of the date hereof and as of the Closing Date: 4.1 Corporate Existence, Power and Authority. (a) The Company and each active Subsidiary are corporations duly organized, validly existing and in good standing under the laws of their jurisdictions of incorporation. The Company and each Subsidiary are duly qualified, licensed and authorized to do business and are in good standing in each jurisdiction in which they own or lease any property or in which the conduct of their business requires them to so qualify or be licensed, except for such jurisdictions where the failure to so qualify or be so licensed would not have a Material Adverse Effect. Each of the Company and each Subsidiary has all requisite power, authority (corporate and other) and legal right to own or to hold under lease and to operate the properties it owns or holds and to conduct its business as now being conducted. 27 (b) No proceeding has been commenced for the dissolution or merger of the Company or the amendment of its certificate of incorporation (other than the Certificate of Designations). The Company is not in violation in any respect of its certificate of incorporation or by-laws. (c) The Company has all requisite power, authority (corporate and other) and legal right to execute, deliver, enter into, consummate the transactions contemplated by and perform its obligations under (i) the Recapitalization Agreements, including, without limitation, the issuance by the Company of the Initial Common Stock, the Shares and the Conversion Shares as contemplated herein and therein and in the Certificate of Designations, (ii) the Stockholders' Agreement and (iii) the Registration Rights Agreement. The execution, delivery and performance of the Recapitalization Agreements, the Stockholders' Agreement and the Registration Rights Agreement by the Company (including, without limitation, the issuance by the Company of the Initial Common Stock, the Shares and the Conversion Shares as contemplated herein and therein and in the Certificate of Designations) have been duly authorized by all required corporate and other actions. The Company has duly executed and delivered the Recapitalization Agreements, the Stockholders' Agreement and the Registration Rights Agreement. The Recapitalization Agreements, the Stockholders' Agreement and the Registration Rights Agreement constitute the legal, valid and binding obligations of the Company enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws relating to the rights of creditors generally from time to time in effect, to general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding in equity or at law. 4.2 Capital Stock. (a) The authorized capital stock of the Company consists of (i) 80,000,000 shares of Common Stock, par value $.01 per share, and (ii) 2,000,000 shares of Preferred Stock, par value $.01 per share, of which 250,000 shares have been designated as Series A Convertible Preferred Stock and, after giving effect to the Certificate of Designations, 100,000 shares will have been designated as Series B Convertible Preferred Stock. On the date hereof, there are outstanding (i) 182,136.4806 shares of Series A Convertible Preferred Stock and (ii) 32,174,616 shares of Common Stock. On the Closing Date, after giving effect to the Recapitalization Agreements but not taking into account any repurchase by the Company of the shares of Common Stock owned by First Reserve Fund VI, Limited Partnership, (a) 24,421.2402 shares of Series A Convertible Preferred Stock, (b) no more than 72,890 shares of Series B Convertible Preferred Stock and (c) 44,077,321 shares of Common Stock will be outstanding and 3,340,139 shares of Common Stock (as of May 31, 2002) are reserved for issuance under the Company's equity incentive plans. All of such outstanding shares are, or on the Closing Date will be, duly authorized, validly issued and outstanding, fully paid and non-assessable. The shares of the Company's Common Stock issuable upon conversion of the Series B Convertible Preferred Stock will be, when issued in accordance with the terms of the Series B Convertible Preferred Stock, duly authorized, validly issued, fully paid and non-assessable. Except as disclosed on Schedule 2 hereto or pursuant to the Recapitalization Agreements, none of the shares of the Company's 28 capital stock which will be outstanding at the Closing (i) were or will be subject to preemptive rights when issued or (ii) provide the holders thereof with any preemptive rights with respect to any issuances of capital stock. (b) The only shares of the Company's Common Stock reserved for issuance by the Company are (i) shares of Common Stock to be issued upon conversion of the Shares, (ii) shares of Common Stock to be issued upon conversion of the Series A Preferred Stock and exercise of the Warrants, (iii) shares of Common Stock to be issued pursuant to the Company's equity incentive plans and (iv) additional shares of Common Stock reserved for issuance not in excess of 100,000 shares in the aggregate. (c) Except as disclosed on Schedule 2 hereto or pursuant to the Recapitalization Agreements, there are no outstanding options, warrants, subscriptions, rights, convertible securities or other agreements or plans under which the Company may become obligated to issue or sell shares of its capital stock or other securities. (d) Except as disclosed on Schedule 2 hereto, there are no outstanding registration rights with respect to any capital stock of the Company or of any Subsidiary, which will be outstanding on the Closing Date, or any capital stock referred to in Section 4.2(b) or 4.2(c) or in the last sentence of Section 4.3(b) below. (e) Except as disclosed on Schedule 2 hereto, there are no voting agreements, voting trusts, proxies or other agreements or understandings with third parties to which the Company is a party with respect to the voting of any capital stock of the Company or any Subsidiary. (f) Except as disclosed on Schedule 2 hereto or pursuant to the Recapitalization Agreements, there are no anti-dilution protections or other adjustment provisions in existence with respect to any capital stock of the Company or any Subsidiary or any capital stock referred to in Section 4.2(b) or 4.2(c) or in the last sentence of Section 4.3(b) below. (g) The Certificate of Designations has been duly adopted by the Company and as of the Closing Date will be in full force and effect. Upon filing of the Certificate of Designations with the Secretary of State of Delaware, the Shares will have all of the rights, priorities and terms set forth in the Certificate of Designations. (h) To the knowledge of the Company, those persons who, as of the date hereof, beneficially own, directly or indirectly, more than 5% of the Company's outstanding Common Stock are as follows: Cortlandt S. Dietler, First Reserve Corporation and its managed funds, Merrill Lynch Investment Managers, L.P., Louis Dreyfus Corporation, Vencap Holdings (1987) Pte Ltd, Yorktown Partners LLC, Vestar Capital Partners III, L.P. and JPMorgan Chase & Co. 29 4.3. Subsidiaries. (a) The only Subsidiaries of the Company are those set forth on Schedule 2 hereto. Such Subsidiaries are owned as set forth on Schedule 2 hereto. Neither the Company nor any Subsidiary has any Investments in any other Person, except as described on Schedule 2 hereto. (b) All outstanding shares of capital stock of the Subsidiaries have been duly authorized and validly issued and are fully paid and non-assessable and, except as disclosed on Schedule 2 hereto, are owned beneficially and of record by the Company free and clear of all Liens, options or claims of any kind. Except as disclosed on Schedule 2 hereto, there are no outstanding options, warrants, subscriptions, rights, convertible securities or other agreements or plans under which any Subsidiary may become obligated to issue, sell or transfer shares of its capital stock or other securities. (c) Except as described on Schedule 2 hereto, there are no restrictions (whether by charter, agreement, instrument, judgment, decree, order or otherwise (other than by applicable law)) that prohibit any Subsidiary from paying dividends to the Company. 4.4. Business. The Company and its Subsidiaries are engaged primarily in the business of providing a broad range of logistical services, including transportation, terminaling, supply, distribution, gathering, processing and marketing, of petroleum products and petrochemicals. Neither the Company nor any of its Subsidiaries currently engages in, or has any intention of engaging in, any other business. The Company is not subject to the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, as amended, or subject to regulation as a "public utility" or "public service corporation" or subject to regulation under the applicable legal requirements of any state relating to public utilities and/or public service corporations. 4.5. No Defaults or Conflicts. (a) Neither the Company nor any of its Subsidiaries is in violation or default in any material respect under any indenture, agreement or instrument to which it is a party or by which it or its properties may be bound other than for such defaults as could not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary is in default under any material order, writ, injunction, judgment or decree of any court or other governmental authority or arbitrator(s) other than for such defaults as could not reasonably be expected to have a Material Adverse Effect. (b) Other than as set forth on Schedule 2, the execution, delivery and performance by the Company of the Recapitalization Agreements, the Stockholders' Agreement and the Registration Rights Agreement and any of the transactions contemplated hereby or thereby (including, without limitation, the issuance of the Shares and the Conversion Shares as contemplated herein and therein and in the Certificate of Designations and the adoption of the Certificate of Designations as an amendment to the Company's certificate of incorporation) do 30 not and will not (i) violate or conflict with, with or without the giving of notice or the passage of time or both, any provision of (A) the respective certificates or articles of incorporation or by-laws of the Company or any of its Subsidiaries (or with respect to any Subsidiary organized under the laws of a jurisdiction outside the United States, the respective comparable documents under the laws of such jurisdiction) or (B) any law, rule, regulation or order of any federal, state, county, municipal or other governmental authority, or any judgment, writ, injunction, decree, award or other action of any court or governmental authority or arbitrator(s), or any agreement, indenture or other instrument applicable to the Company or any of its Subsidiaries or any of their respective properties, (ii) result in the creation of any Lien upon any of the Company's or any Subsidiary's properties, assets or revenues, (iii) other than (A) as required by Delaware law or the Securities Exchange Act (with respect to filings only) or (B) with respect to the Registration Rights Agreement, pursuant to the Securities Act or state securities laws, require the consent, waiver, approval, order or authorization of, or declaration, registration, qualification or filing with, any Person (whether or not a governmental authority and including, without limitation, any shareholder approval), or (iv) cause anti-dilution clauses of any outstanding securities to become operative or give rise to any preemptive rights. 4.6. Other Information. Since June 30, 2001, except as disclosed on Schedule 2 hereto or in the Company's quarterly reports on Form 10-Q for the quarters ended September 30, 2001, December 31, 2001 and March 31, 2002, (i) the business of the Company and the Subsidiaries has been conducted in the ordinary course and (ii) there have been no material adverse changes in the assets, properties, liabilities, business, affairs, results of operations, condition (financial or otherwise) or prospects of the Company on a consolidated basis. As of the Closing Date and as of the date hereof, except as disclosed on Schedule 2 hereto, there are no material liabilities of the Company or any Subsidiary which would be required to be provided for in a consolidated balance sheet of the Company as of either such date prepared in accordance with United States generally accepted accounting principles consistently applied, other than liabilities provided for in the historical financial statements included in the Company's filings with the Commission pursuant to the Securities Act. 4.7. Litigation. Except as disclosed on Schedule 2 hereto, there is no action, suit, proceeding, investigation or claim pending or, to the knowledge of the Company or the Subsidiaries, threatened in law, equity or otherwise before any court, administrative agency or arbitrator which (i) questions the validity of the Recapitalization Agreements, the Certificate of Designations, the Stockholders' Agreement, the Registration Rights Agreement, the Shares, or the Initial Common Stock or any action taken or to be taken pursuant hereto or thereto, or (ii) could reasonably be expected to have a Material Adverse Effect. 4.8. Taxes. Each of the Company and each Subsidiary has timely filed or caused to be filed all 31 Tax Returns required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Company or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. 4.9. ERISA. (a) All Benefit Plans are listed in Schedule 2, and copies of all documentation relating to such Benefit Plans have been delivered or made available to the Investors (including copies of written Benefit Plans, written descriptions of oral Benefit Plans, summary plan descriptions, trust agreements, the three most recent annual returns, employee communications, and IRS determination letters). (b) Each Benefit Plan has at all times been maintained and administered in all material respects in accordance with its terms and with the requirements of all applicable law, including ERISA and the Code except where the failure to comply would not be reasonably expected to result in a material liability, and each Benefit Plan intended to qualify under section 401(a) of the Code has at all times since its adoption been so qualified, and each trust which forms a part of any such plan has at all times since its adoption been tax-exempt under section 501(a) of the Code. (c) No Benefit Plan has incurred any "accumulated funding deficiency" within the meaning of section 302 of ERISA or section 412 of the Code, and neither the Company nor any ERISA Affiliate has incurred any liability to a Benefit Plan (other than for contributions not yet due) or to the Pension Benefit Guaranty Corporation (other than for payment of premiums not yet due) with respect to any Benefit Plan subject to Title IV of ERISA. (d) No "reportable event" (within the meaning of section 4043 of ERISA) has occurred with respect to any Benefit Plan or any Plan maintained by an ERISA Affiliate since the effective date of said section 4043 other than a reportable event for which the 30-day notice requirement has been waived. (e) No Benefit Plan is a multiemployer plan within the meaning of section 3(37) of ERISA. (f) No direct, contingent or secondary liability has been incurred or is expected to be incurred by the Company or any Subsidiary under Title IV of ERISA to any party with respect to any Benefit Plan, or with respect to any other Plan presently or heretofore maintained or contributed to by any ERISA Affiliate. (g) Neither the Company, any Subsidiary nor any ERISA Affiliate has incurred any liability for any tax imposed under section 4971 through 4980B of the Code or civil liability under section 502(i) or (l) of ERISA. 32 (h) No benefit under any Benefit Plan, including, without limitation, any severance or parachute payment plan or agreement, will be established or become accelerated, vested or payable solely by reason of any transaction contemplated under this Agreement. (i) No Benefit Plan provides health or death benefit coverage beyond the termination of an employee's employment, except as required by Part 6 of Subtitle B of Title I of ERISA or section 4980B of the Code or any State laws requiring continuation of benefits coverage following termination of employment. (j) No material suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of plan activities) has been brought or, to the knowledge of the Company or any Subsidiary, threatened against or with respect to any Benefit Plan and there are no facts or circumstances known to the Company or any Subsidiary that could reasonably be expected to give rise to any such suit, action or other litigation. (k) All contributions to Benefit Plans that were required to be made under such Benefit Plans have been made when due, and all benefits accrued under any unfunded Benefit Plan have been paid, accrued or otherwise adequately reserved in accordance with generally accepted accounting principles and each of the Company and each Subsidiary has performed all material obligations required to be performed under all Benefit Plans. (l) The execution, delivery and performance of the Recapitalization Agreements, the Stockholders' Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby (including, without limitation, the recapitalization by the Company, and the tender by the Investor of the shares of Series A Preferred Stock and the Warrants and the issue by the Company and the acceptance by the Investor of the Shares, the Conversion Shares, and the Initial Common Stock) will not involve any "prohibited transaction" within the meaning of ERISA or the Code. 4.10. Legal Compliance. (a) Each of the Company and each Subsidiary has complied with all applicable laws, rules, regulations, orders, licenses, judgments, writs, injunctions, decrees or demands, except to the extent that failure to so comply could not reasonably be expected to result in a Material Adverse Effect. (b) There are no adverse orders, judgments, writs, injunctions, decrees or demands of any court or administrative body, domestic or foreign, or of any other governmental agency or instrumentality, domestic or foreign, outstanding against the Company or any Subsidiary which could reasonably be expected to result in a Material Adverse Effect. 4.11. Outstanding Securities. All securities (as defined in the Securities Act) of each of the Company and the Subsidiaries have been offered, issued, sold and delivered in compliance with, or pursuant to 33 exemptions from, all applicable federal and state laws, and the rules and regulations of federal and state regulatory bodies governing the offering, issuance, sale and delivery of securities. 4.12. Permits, Licenses and Approvals; Intellectual Property and Other Rights. To the knowledge of the Company, each of the Company and each Subsidiary owns or possesses all franchises, licenses, permits, consents, approvals and other authority (governmental or otherwise), patents, patent rights, trademarks, trademark rights, trade names, trade name rights and copyrights, and all rights and privileges with respect to any of the foregoing, as are necessary for the conduct of its business as now being conducted and as proposed to be conducted. Neither the Company nor any Subsidiary is in default in any material respect under any of such franchises, licenses, permits, consents, approvals or other authority. To the knowledge of the Company, the rights of (and use by) each of the Company and each Subsidiary with respect to such or any other patents, patent rights, trademarks, trademark rights, trade names, trade name rights or copyrights do not conflict with or infringe any rights of others in a manner which could reasonably be expected to result in a Material Adverse Effect and no such claim of conflict or infringement has been asserted by any Person. 4.13. Properties. Each of the Company and each Subsidiary has good and marketable title to its real property. Certain real property used by the Company or the Subsidiaries in the conduct of their respective businesses is held under lease, and neither the Company nor any Subsidiary is aware of any pending or threatened claim or action by any lessor of any such property to terminate any such lease. All such leases are valid and in full force and effect, and none of such leases is in default. 4.14. Environmental Compliance. To the Company's knowledge, the Company (i) is not in violation of any Environmental Laws in effect in any jurisdiction in which any properties owned, operated or leased by the Company or any of its Subsidiaries are located or where any of them conducts its business, (ii) does not own, operate or lease any real property contaminated with any Hazardous Materials, at levels or in amounts that require investigation or remediation under any Environmental Laws, (iii) is not liable or alleged to be liable for any off-site transportation, treatment, storage or disposal of Hazardous Materials or contamination pursuant to any Environmental Laws, and (iv) is not subject to any claim arising under Environmental Laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect, and no executive officer of the Company has received written or oral notice of any pending investigation which might lead to such a claim. 4.15. Offering of Shares. None of the Company, any Subsidiary, any agent or any other person acting on its behalf, directly or indirectly, (i) offered any of the Shares or any similar security of the Company 34 (A) by any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) or (B) for sale to or solicited offers to buy any thereof from, or otherwise approached or negotiated with respect thereto with, any person other than the Investors and other investors each of which the Company reasonably believed was an "accredited investor" within the meaning of Regulation D under the Securities Act or (ii) has done or caused to be done (or has omitted to do or to cause to be done) any act which act (or which omission) would result in bringing the issuance or sale of the Shares within the provisions of Section 5 of the Securities Act or the filing, notification or reporting provisions of any state securities laws. 4.16. SEC Reports. The Company has filed all proxy statements, reports and other documents required to be filed by it under the Securities Exchange Act. The Company has furnished the Investor with copies of (i) its Annual Report on Form 10-K for the fiscal year ended June 30, 2001, (ii) its Quarterly Report on Form 10-Q for the fiscal quarters ended September 30, 2001, December 31, 2001 and March 31, 2002 and (iii) its Proxy Statement dated October 12, 2001 (collectively, the "SEC Reports"). Each SEC Report was in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of their respective dates or as subsequently supplemented or amended, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 4.17. Other Names. The businesses previously or presently conducted by the Company and the Subsidiaries have not been conducted under any corporate, trade or fictitious name, other than those names listed on Schedule 2 hereto. 4.18. Brokers. No broker, finder or investment banker or other party is entitled to any brokerage, finder's or other similar fee or commission in connection with any Recapitalization Agreement, the Stockholders' Agreement, the Registration Rights Agreement, or the Certificate of Designations or any of the transactions contemplated hereby or thereby, based upon arrangements made by or on behalf of the Company or any of its Subsidiaries or Affiliates. SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR The Investor represents and warrants to the Company as follows as of the date hereof and as of the Closing Date: 5.1 Corporate Power and Authority. 35 The Investor has all requisite power, authority and legal right to execute, deliver, enter into, consummate the transactions contemplated by and perform its obligations under this Agreement, the Stockholders' Agreement (if a party thereto) and the Registration Rights Agreement. The execution, delivery and performance of this Agreement, the Stockholders' Agreement (if a party thereto) and the Registration Rights Agreement by the Investor have been duly authorized by all required corporate and other actions. The Investor has duly executed and delivered this Agreement, the Stockholders' Agreement (if a party thereto) and each of the Registration Rights Agreement, and this Agreement, the Stockholders' Agreement (if a party thereto) and the Registration Rights Agreement constitutes the legal, valid and binding obligations of the Investor enforceable against the Investor in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws relating to the rights of creditors generally from time to time in effect, to general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding in equity or at law. 5.2 Investment Intent. The Investor is acquiring the Initial Common Stock and the Shares to be delivered in the Recapitalization for its own account for investment and not with a view to any distribution thereof in violation of applicable securities laws; provided, however, that the Investor may transfer record and/or beneficial ownership of the Initial Common Stock, the Shares or the Conversion Shares to one or more Affiliates, officers or employees of Affiliates or investment funds managed by Affiliates of the Investor so long as such transfer is made in compliance with the Securities Act and any applicable state securities laws. It is understood that the disposition of the Investor's property shall at all times be within the Investor's control. If the Investor should in the future decide to dispose of any of its Initial Common Stock, Shares or Conversion Shares, it is understood that it may do so only in compliance with the Securities Act, applicable securities laws and this Agreement. The Investor is an "accredited investor" as defined in Rule 501(a) under the Securities Act. 5.3 Access. The Investor has had access to such financial and other information, and has been afforded the opportunity to ask such questions of representatives of the Company and its Affiliates and receive answers thereto, as the Investor deems necessary in connection with its decision to participate in the Recapitalization. 5.4 Investor Qualification. (a) The Investor owns the shares of Series A Preferred Stock and Warrants set forth opposite the Investor's name in Schedule 1 hereto. 36 (b) The Investor (alone or with the aid of its investment advisors) has such knowledge and experience in financial and business matters that the Investor is capable of evaluating the merits and risks of its investment in the Initial Common Stock and the Shares. (c) The Investor is able to bear the economic risk of an investment in the Initial Common Stock and the Shares and has the ability to hold the Initial Common Stock and the Shares to be acquired by such Investor indefinitely and the ability to suffer a complete loss of such investment. (d) The Investor is familiar with the type of investment which the Initial Common Stock and the Shares constitute and has reviewed the investment in the Initial Common Stock and the Shares subscribed herein with tax and legal counsel and investment representatives to the extent deemed advisable. The Investor believes that the Initial Common Stock and the Shares and the amount of such Investor's investment are consistent with such Investor's overall investment program and financial position. (e) All information the Investor has supplied to the Company is true and accurate. (f) The Investor will immediately notify the Company if any of the representations and warranties made herein become untrue. SECTION 6. TRANSFER OF SECURITIES 6.1 Restrictions. The Investor agrees that it will not sell or otherwise dispose of any Initial Common Stock, Shares or Conversion Shares unless such Initial Common Stock, Shares or Conversion Shares have been registered under the Securities Act and, to the extent required, under any applicable state securities laws, or pursuant to an applicable exemption from such registration requirements. The Company may endorse on all certificates evidencing Initial Common Stock, Shares or Conversion Shares a legend stating or referring to such transfer restrictions and require, as a condition to transfer, from the Investor and any proposed transferee of the Investor, such certifications, legal opinions or other information as the Company may reasonably require to confirm that such transfer is being made in compliance with, pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act or any state securities laws; provided, however, that no such legend shall be endorsed on any such certificates which, when issued, are no longer subject to the restrictions of this Section 6. SECTION 7. INFORMATION AS TO THE COMPANY 7.1. Financial Information. 37 (a) The Company will maintain, and cause each Subsidiary to maintain, a system of accounting established and administered in accordance with sound business practices to permit preparation of financial statements in accordance with United States generally accepted accounting principles consistently applied. (b) So long as any of the Shares remain Outstanding, the Company will deliver to each Investor without duplication of any of the items listed below, the following: (i) within ninety-five (95) days after the close of each fiscal year of the Company, (A) an audited consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year and (B) audited consolidated statements of operations, stockholders' equity and cash flows of the Company and its Subsidiaries for such fiscal year, in each case setting forth in comparative form the corresponding figures for the preceding fiscal year; and such statements shall be accompanied by a management analysis of any material differences between the results for such fiscal year and the corresponding figures for the preceding year, provided that the delivery within such time period of the Company's Form 10-K and annual report to each Investor shall satisfy its obligation under this Section 7.1(b)(i); (ii) as soon as practicable, copies (A) of all financial statements, proxy material or reports sent to the Company's or any Subsidiary's stockholders (other than wholly owned Subsidiaries), (B) of any public press releases and (C) of all reports or registration statements (without exhibits) filed with the Commission pursuant to the Securities Act or the Securities Exchange Act; (iii) within fifty (50) days after the close of each of the first three (3) fiscal quarters of the Company, (A) a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal quarter and (B) consolidated statements of operations, stockholders' equity and cash flows of the Company and its Subsidiaries for the portion of the fiscal year ended with the end of such quarter, in each case in reasonable detail, signed by a Financial Officer of the Company and setting forth in comparative form the corresponding figures for the comparable period one year prior thereto (subject to normal year-end adjustments), together with a management analysis of any material differences between such results and the corresponding figures for such prior period, provided that the delivery within such time period of the Company's Form 10-Q shall satisfy its obligations under this Section 7.1(b)(iii); (iv) within fifty (50) days after the close of each fiscal quarter of the Company, a certificate of an officer of the Company certifying the Company's compliance with the covenants contained in Section 10 of this Agreement; (v) as soon as practicable and without duplication of any of the above items, any other materials furnished to holders of the Company's Common Stock; 38 (vi) as soon as practicable, such other information as may reasonably be requested by a Investor; (vii) as soon as practicable and upon the receipt of consent the Company's independent public accountants, copies of management letters with respect to the Company or its Subsidiaries or their operations submitted to the Company by such independent public accountants; (viii) as soon as practicable, copies of the annual budget within 90 days after the beginning of each fiscal year; and (ix) as soon as practicable, notice of default under any material agreement, contract or other instrument to which the Company or any of its Subsidiaries is a party or by which any of them is bound; and (x) as soon as practicable after any regularly scheduled meeting of the Company's Board of Directors, (1) copies of the minutes of any previous Board meetings submitted to the Board of Directors for ratification and approval, (2) the agenda from the most recent Board meeting and (3) selected financial and operational reports relating to the Company that have been delivered to the Board of Directors and deemed to be materially important by the Company's management; provided, further, that if the Investor requests additional written materials indicated on the agenda, the Company shall provide such information to the Investor as well. In lieu of the foregoing clauses (i) to (x), the Company may deliver, as soon as practicable, to each Investor any materials furnished to the Company's lenders under the Credit Agreement so long as such materials include information substantially similar to the information described in clauses (i) to (x) of this Section 7.1(b). The Company's obligations under this Section 7.1(b), Section 7.2, Section 7.3 and Section 7.5 shall terminate with respect to any Investor, if after any sale or conversion of Shares by such Investor, such Investor ceases to hold a number of Shares equal to or greater than 10% of the number of Shares set forth opposite such Investor's name on Schedule 1 hereto. (c) All such financial statements referred to in this Section 7.1 shall be prepared in accordance with United States generally accepted accounting principles consistently applied (except for any change in accounting principles specified therein and except that any interim financial statements may omit notes and may be subject to normal year-end adjustments). (d) Without limiting the foregoing provisions of this Section 7.1, the Company agrees that, if requested in writing by any Investor, it will not deliver to such Investor(until otherwise instructed by such Investor) (x) any non-public information or non- public materials regarding the Company or any Subsidiary (whether described in this Section 7.1 39 or otherwise) and (y) any information (whether or not included in clause (x)) which such Investor specifies that it does not want to receive. The Company shall comply with any such request with respect to each such Investor until instructed otherwise by the Investor. 7.2. Communication with Accountants. With the prior written approval of the Company (such approval not to be unreasonably withheld or delayed), and subject to the terms and conditions set forth in such approval, the Investor may communicate directly with the independent certified public accountants for the Company or any Subsidiary and with the Company's prior written consent (such approval not to be unreasonably withheld or delayed) may receive from such accountants any and all financial statements and any other information of any kind that they may have with respect to the assets, properties, liabilities, business, affairs, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary. 7.3. Inspection. The Company will permit each Investor holding Shares representing such amounts specified in Section 7.1(b) hereof and any authorized representative of such Investor to visit and inspect any of the properties of the Company and its Subsidiaries, to examine their respective books and records and to discuss with their officers their books and records and the assets, properties, liabilities, business, affairs, results of operations, condition (financial or otherwise) or prospects of the Company or any Subsidiary, all at such reasonable times and as often as may be reasonably requested. 7.4. Notices. The Company will give notice to all holders of Shares promptly after it learns (other than by notice from all of such holders) of the existence of any of the following: (a) any default under any Indebtedness (or under any indenture, mortgage or other agreement relating to any Indebtedness) which Indebtedness is in an aggregate principal amount exceeding $200,000 (or the equivalent thereof in other currencies) in respect of which the Company or any Subsidiary is liable; (b) any action or proceeding which has been commenced or threatened against the Company or any of its Subsidiaries (i) which, if adversely determined, would have, individually or in the aggregate, a material adverse effect on the ability of the Company to perform its obligations under the Recapitalization Agreements, the Stockholders' Agreement, the Registration Rights Agreement, or the Certificate of Designations or (ii) which involves primarily a claim for damages if the amount involved, exclusive of interest and costs, exceeds $2,000,000; (c) if any (i) "reportable event" (as such term is described in Section 4043(c) of ERISA) has occurred; or (ii) "accumulated funding deficiency" (within the meaning of Section 40 412(a) of the Code) has been incurred with respect to a Pension Plan maintained or contributed to (or required to be maintained or contributed to) by the Company or any ERISA Affiliate that is subject to the funding requirements of ERISA and the Code or that an application may be or has been made to the Secretary of the Treasury for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code, in each case with respect to such a Pension Plan; or (iii) Pension Plan maintained or contributed to (or required to be maintained or contributed to) by the Company or any ERISA Affiliate has been terminated, reorganized, petitioned or declared insolvent under Title IV of ERISA. (d) each of the Company and its Subsidiaries shall immediately notify the holders of Shares, and provide copies upon receipt, of all written claims, complaints, notices or inquiries from governmental authorities relating to the condition of its facilities and properties or compliance with Environmental Laws which could reasonably be expected to have a Material Adverse Effect. Such notice, (i) with respect to (a), shall specify the nature and period of existence of any such default and what the Company proposes to do with respect thereto and, (ii) with respect to (b), (c) or (d), shall specify the nature of any such matter referred to in such clause, what action the Company or any Subsidiary proposes to take with respect thereto and what action any other relevant Person is taking or proposes to take with respect thereto. 7.5 Management Conferences. (a) Within two (2) weeks after each regularly scheduled meeting of the Company's Board of Directors, the Company will hold a teleconference for the Investor and all other Investors holding Shares representing such amounts specified in Section 7.1(b) hereof with the Company's senior management to discuss the Board materials distributed to the Investors. (b) Notices for each teleconference session will be sent to Investors no less than two (2) days prior to each such meeting. 7.6. Confidentiality. (a) The Investor agrees to keep any information delivered or made available by the Company pursuant to Section 5.3 or this Section 7 confidential from anyone other than persons employed or retained by such Investor (who shall be informed of and agree to maintain the confidentiality obligation imposed by this Section 7.6); provided that nothing herein shall prevent any Investor from disclosing such information (i) to any of its Affiliates, (ii) upon the order of any court or administrative agency or as otherwise required by law, (iii) upon the request or demand of any regulatory agency or authority, (iv) which had been publicly disclosed or is otherwise publicly available other than as a result of a disclosure by the Investor prohibited by this Agreement, (v) in connection with any litigation to which the Investor may be a party, (vi) to the extent necessary in connection with the exercise of any remedy hereunder, or (viii) to such Investor's legal counsel and independent auditors. 41 (b) The Investor agrees not to use, and to cause its Affiliates not to use, any confidential information delivered or made available by the Company pursuant to Section 5.3 or this Section 7 to purchase or sell any securities of the Company in a manner or under circumstances that would violate the Securities Exchange Act. SECTION 8. CONDITIONS TO INVESTOR'S OBLIGATIONS The Investor's obligations hereunder are subject to satisfaction of the following conditions at the Closing (any of which may be waived by the Investor): 8.1 Certificate of Designations; Registration Rights Agreement. (a) The certificate of incorporation of the Company shall have been duly amended by the filing of the Certificate of Designations in the form of Exhibit A hereto. (b) The Company, the Investors and certain officers of the Company named therein shall have entered into a Stockholders' Agreement substantially in the form of Exhibit B hereto. (c) The Company shall have entered into the Registration Rights Agreement with the Investor substantially in the form of Exhibit C hereto. 8.2 Payment and Certificates for Initial Common Stock and Shares. The Investor shall concurrently receive the cash payment and the certificates for the Initial Common Stock and the Shares contemplated by Section 2(b) hereof. 8.3. Accuracy of Representations and Warranties. The representations and warranties of the Company contained in the Recapitalization Agreement or in any certificate or document delivered pursuant hereto shall be true and correct on and as of the Closing Date with the same effect as though made on and as of the Closing Date. 8.4. Compliance with Agreements. The Company shall have performed and complied in all material respects with all agreements, covenants and conditions contained in the Recapitalization Agreements and any other document contemplated hereby or thereby which are required to be performed or complied with by the Company on or before the Closing Date. 8.5. Officers' Certificates. 42 The Investor shall have received a certificate dated the Closing Date and signed by the President or Chief Executive Officer and by the Secretary or the Treasurer of the Company, to the effect that the conditions of Sections 8.1(a), 8.3, 8.4 and 8.8 have been satisfied. 8.6. Proceedings. All corporate and other proceedings in connection with the transactions contemplated by the Recapitalization Agreements, and all documents incident thereto, shall be in form and substance satisfactory to the Investor and its counsel, and the Investor shall have received all such originals or certified or other copies of such documents as the Investor or its counsel may reasonably request. 8.7. Legality; Governmental and Other Authorization. The recapitalization of the Series A Preferred Stock and the Warrants for the Initial Common Stock and the Shares shall not be prohibited by any law or governmental order, rule, ruling, regulation, release, interpretation or opinion applicable to the Investor and shall not subject the Investor to any penalty, tax, liability or other onerous condition. Any necessary consents, approvals, licenses, permits, orders and authorizations of, and any filings, registrations or qualifications with, any governmental or administrative agency or other Person, with respect to the transactions contemplated by the Recapitalization Agreements, shall have been obtained or made and shall be in full force and effect. The Company shall have delivered to the Investor, upon its reasonable request setting forth what is required, factual certificates or other evidence, in form and substance reasonably satisfactory to the Investor and its special counsel, to enable the Investor to establish compliance with this condition. 8.8. No Material Adverse Change. There shall have been no material adverse change in the assets, properties, liabilities, business, affairs, results of operations, condition (financial or otherwise) or prospects of the Company on a consolidated basis since March 31, 2002. 8.9 Opinion of Counsel. The Investor shall have received an opinion, dated the Closing Date and addressed to the Investor, of Cravath, Swaine & Moore, as counsel for the Company, substantially in the form set forth in Exhibit D hereto. 8.10. Recapitalization of Series A Preferred Stock and Warrants. The recapitalization of 157,715.2402 shares of the Series A Preferred Stock and 9,841,493 of the Warrants for the Initial Common Stock and the Shares pursuant to the Recapitalization Agreements between each of the Investors and the Company shall be or shall have been consummated. 43 8.11. Other Documents. The Investor shall have received such other documents, in form and substance satisfactory to the Investor and its counsel, relating to matters incident to the transactions contemplated hereby as the Investor may reasonably request. 8.12. Additional Conditions. (a) The Company shall have received approval from the American Stock Exchange for the listing of the Initial Common Stock and the Conversion Shares. (b) The Credit Agreement shall have been amended in the form of amendment attached hereto as Exhibit E and $21,303,000 shall be available thereunder for distribution to the Investors in the Recapitalization. (c) The Institutional Investors (as defined in the Registration Rights Agreement) shall have entered into the Institutional Investor Registration Rights Agreement (as defined in the Registration Rights Agreement), as amended and restated. (d) Louis Dreyfus Corporation shall have entered into the LDC Registration Rights Agreement (as defined in the Registration Rights Agreement), as amended and restated. (e) Holders of at least two-thirds of the Series A Preferred Stock shall have entered into Recapitalization Agreements on or before June 27, 2002. (f) The Company shall have repurchased the 4,130,473 shares of Common Stock owned by First Reserve Fund VI, Limited Partnership. SECTION 9. CONDITIONS TO THE COMPANY'S OBLIGATIONS 9.1 The Company's obligations hereunder are subject to the satisfaction of the following conditions at the Closing (any of which may be waived by the Company): (a) The Company shall have received approval from the American Stock Exchange for the listing of the Initial Common Stock and the Conversion Shares. (b) The Credit Agreement shall have been amended in the form of amendment attached hereto as Exhibit E and $21,303,000 shall be available thereunder for distribution in the Recapitalization. (c) The Institutional Investors (as defined in the Registration Rights Agreement) shall have entered into the Institutional Investor Registration Rights Agreement (as defined in the Registration Rights Agreement), as amended and restated. 44 (d) Louis Dreyfus Corporation shall have entered into the LDC Registration Rights Agreement (as defined in the Registration Rights Agreement), as amended and restated. (e) Holders of at least two-thirds of the Series A Preferred Stock shall have entered into the Registration Rights Agreement and Recapitalization Agreements. (f) Each Investor shall have provided to the Company a properly executed and updated Form W-9, Form W-8BEN, Form W-8ECI or Form W-8EXP, as applicable, upon which the Company may rely in satisfying its withholding obligations with respect to the Series A Preferred Stock and the Series B Preferred Stock. (g) The Company shall have repurchased the 4,130,473 shares of Common Stock owned by First Reserve Fund VI, Limited Partnership. SECTION 10. AFFIRMATIVE COVENANTS The Company covenants and agrees as follows: 10.1. Maintenance of Existence, Properties and Franchises; Compliance with Law; Taxes; Insurance. The Company will, and will cause each Subsidiary to: (a) maintain their respective corporate existence, rights and other franchises in full force and effect; provided, that the Company may terminate the corporate existence of any Subsidiary, or permit the termination or abandonment of rights or other franchises, if in the opinion of the Company it is no longer in the Company's best interests to maintain such existence, rights or other franchises; (b) maintain their respective tangible assets in good repair, working order and condition so far as necessary or advantageous to the proper carrying on of their respective businesses; (c) comply with all applicable laws and with all applicable orders, rules, rulings, certificates, licenses, regulations, demands, judgments, writs, injunctions and decrees; provided, that such compliance shall not be necessary so long as (i) the applicability or validity of any such law, order, rule, ruling, certificate, license, regulation, demand, judgment, writ, injunction or decree shall be contested in good faith by appropriate proceedings and (ii) failure to so comply could not reasonably be expected to have a Material Adverse Effect; (d) pay promptly when due all Taxes imposed upon its properties, assets or income and all claims or indebtedness (including, without limitation, vendor's, workmen's and like claims) which might become a lien upon such properties or assets; provided, that payment of any such Tax shall not be necessary so long as (i) the applicability or validity thereof shall be 45 contested in good faith by appropriate proceedings and a reserve, if appropriate, shall have been established with respect thereto and (ii) failure to make such payment could not reasonably be expected to have a Material Adverse Effect; and (e) keep adequately insured, by insurers of nationally recognized stature, all its properties (excluding terminal equipment, underground pipelines and above-ground storage tanks, all of which are self-insured in a manner the Company believes to be fiscally prudent) of a character customarily insured by entities similarly situated, against loss or damage of the kinds and in amounts customarily insured against by such entities and with such deductibles or coinsurance as is customary; provided, however, that the Company may self-insure in a manner believed to be fiscally prudent by the Company. 10.2. Environmental Matters. Each of the Company and its Subsidiaries shall use and operate all of its facilities and properties in material compliance with all Environmental Laws, keep all Environmental Permits in effect and remain in material compliance therewith, and handle all Hazardous Materials in material compliance with all applicable Environmental Laws, except where any failure to so act could not, individually or in the aggregate, have a Material Adverse Effect. SECTION 11. NEGATIVE COVENANTS The Company covenants and agrees that without the prior written consent of (i) in the case of Section 11.1(a), Section 11.1(b) and Section 11.1(f), two-thirds of the outstanding shares of Series A Preferred Stock and Series B Preferred Stock, voting together as a single class, with each share of Series A Preferred Stock or Series B Preferred Stock entitled to such number of votes per share equal to the number of shares of Common Stock into which each such share of Series A Preferred Stock or Series B Preferred Stock, as the case may be, is convertible on the date of the vote and (ii) in all other cases, two-thirds of the outstanding Shares: 11.1. No Dilution or Impairment; No Changes in Capital Stock. The Company will not, by amendment of its certificate of incorporation or through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of the Recapitalization Agreements, the Certificate of Designations, the Registration Rights Agreement or the Stockholders' Agreement (it being understood that the Company will not be prohibited from taking actions that are permitted by the terms of such agreements). The Company (a) will not issue any shares or class or series of equity or equity-linked security, which is senior to, or pari passu with, the Series B Convertible Preferred Stock as to dividend payments or amounts payable in the event of liquidation or winding-up of the Company other than any additional shares of Series A Preferred Stock issued as dividends on the Series A Preferred Stock and any additional shares of Series B Preferred Stock issued as 46 dividends on the Series B Preferred Stock, (b) except as otherwise contemplated by the TransMontaigne Inc. Certificate of Designations of Series A Convertible Preferred Stock as in existence on the date hereof, the Certificate of Designations, the Warrant Agreement or this Agreement, will not redeem, repurchase or otherwise acquire, either directly or indirectly through any of its Subsidiaries, any shares of capital stock of the Company, or any other rights or options to subscribe for or purchase any capital stock of the Company, (c) will not permit the par value or the determined or stated value of any shares of Common Stock receivable upon the conversion of the Shares to exceed the amount payable therefor upon such conversion, (d) will take all such action within its control as may be necessary or appropriate in order that the Company may at all times validly and legally issue duly authorized, fully paid and non-assessable shares of the Common Stock free from all taxes, Liens and charges with respect to the issue thereof, upon the conversion of the Shares from time to time outstanding, (e) will not take any action which results in any adjustment of the current conversion price under the Certificate of Designations if the total number of shares of the Common Stock (or other securities) issuable after the action upon the conversion of all of the then outstanding Shares would exceed the total number of shares of Common Stock (or other securities) then authorized by the Company's certificate of incorporation and available for the purpose of issuance upon such conversion or exercise and (f) will not have any authorized Common Stock (and will not issue any Common Stock) other than its existing authorized Common Stock, par value per $.01 share; provided, however, that nothing herein shall be deemed to require the Company to obtain consent from holders of the Series B Preferred Stock in connection with any repurchase by the Company of shares of Common Stock owned by First Reserve Fund VI, Limited Partnership, as contemplated in Section 8.12(f). 11.2. Actions Prior to the Closing Date. From the date hereof through the Closing Date, the Company will not, and will not permit any Subsidiary to, (a) issue or agree to issue any capital stock or any securities exercisable for, or convertible or exchangeable into, capital stock or (b) purchase, redeem or otherwise acquire any of its capital stock; provided, however, that this Section 11.2 shall not limit, or be applicable to, (i) the transactions contemplated by the Recapitalization Agreements and (ii) grants of options or issuances of Common Stock to officers, directors or employees of the Company pursuant to the current terms of the Company's 1997 Option Plan. 11.3. Additional Issuances of Series B Convertible Preferred Stock. The Company will not issue in excess of 72,890 shares of Series B Convertible Preferred Stock, other than shares of Series B Convertible Preferred Stock issued in lieu of cash dividends on existing shares of Series B Convertible Preferred Stock. SECTION 12. EXPENSES (a) Whether or not the transactions herein contemplated are consummated, the Company will pay (i) the costs, fees and expenses of the Company and its counsel in connection with the Recapitalization Agreements, the Certificate of Designations, the Stockholders' 47 Agreement and the Registration Rights Agreement and the issuance of the Initial Common Stock, the Shares and the Conversion Shares and the furnishing of all opinions by counsel for the Company and (ii) the reasonable fees and expenses of counsel (previously identified by the Investor and approved by the Company) in connection with the negotiation and execution of the Recapitalization Agreements, the Certificate of Designations, the Stockholders' Agreement and the Registration Rights Agreement and the transactions contemplated hereby and thereby and the closing of the transactions contemplated hereby (whether or not a closing occurs hereunder and if a Closing occurs the Company will make such payment on the Closing Date); provided, however, that in the event such fees and expenses of the Investor's counsel are to exceed $25,000, a prior written estimate of such fees and expenses, including a detailed statement of accounts, shall be provided to the Company. (b) In addition to all other sums due hereunder or provided for in this Agreement, the Company shall pay to the Investor or its agents, respectively, an amount sufficient to indemnify such persons (net of any Taxes on any indemnity payments) against all reasonable costs and expenses (including reasonable attorneys' fees and expenses and reasonable costs of investigation) and damages and liabilities incurred by the Investor or its agents pursuant to any investigation or proceeding (other than an investigation or proceeding initiated by an Investor) against any or all of the Company, the Investor, or their respective agents, arising out of or in connection with the Recapitalization Agreement, or the issuance of the Initial Common Stock or the Shares (or any transaction contemplated hereby or thereby or any other document or instrument executed herewith or therewith or pursuant hereto or thereto), whether or not the transactions contemplated by this Agreement are consummated, which investigation or proceeding requires the participation of the Investor or its agents or is commenced or filed against the Investor or its agents because of the Recapitalization Agreements, the Stockholders' Agreement, the issuance of the Initial Common Stock or the Shares or any of the transactions contemplated hereby or thereby (or any other document or instrument executed herewith or therewith or pursuant hereto or thereto), other than any investigation or proceeding in which it is finally determined that there was gross negligence or willful misconduct on the part of the Investor or its agents. The Company shall assume the defense, and shall have its counsel represent the Investor and such agents, in connection with investigating, defending or preparing to defend any such action, suit, claim or proceeding (including any inquiry or investigation); provided, however, that the Investor, or any such agent, shall have the right (without releasing the Company from any of its obligations hereunder) to employ its own counsel and either to direct its own defense or to participate in the Company's defense, but the fees and expenses of such counsel shall be at the expense of such person unless (i) the employment of such counsel shall have been authorized in writing by the Company in connection with such defense, (ii) the Company shall not have provided its counsel to take charge of such defense or (iii) the Investor, or such agent of the Investor, shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company, then in any of such events referred to in clauses (i), (ii) or (iii) such reasonable counsel fees and expenses (but only for one counsel for the Investors and their agents) shall be borne by the Company. Any settlement of any such action, suit, claim or proceeding shall require the consent of both the Company and such indemnified person (neither of which shall unreasonably withhold its consent). 48 (c) The Company agrees to pay, or to cause to be paid, all documentary, stamp and other similar Taxes levied under the laws of the United States of America, any state or local Taxing Authority thereof or therein or any other applicable jurisdiction in connection with the issuance of the Initial Common Stock or the Shares to the Investors and the execution and delivery of the Recapitalization Agreements, the Stockholders' Agreement, the Registration Rights Agreement and any other documents or instruments contemplated hereby or thereby and will hold the Investor harmless without limitation as to time against any and all liabilities with respect to all such Taxes. (d) The obligations of the Company under this Section 12 shall survive the Closing hereunder and any termination of the Recapitalization Agreements. SECTION 13. INDEMNIFICATION (a) The representations, warranties, covenants and agreements of the Company and the Investor contained in this Agreement, the Registration Rights Agreement or in any document or certificate delivered pursuant hereto or thereto or in connection herewith shall survive, and shall continue in effect following, the execution and delivery of the Recapitalization Agreements, the Registration Rights Agreement, the closing hereunder and thereunder, any investigation at any time made by the Investor or on its behalf or by any other Person, the issuance, sale and delivery of the Shares or the Initial Common Stock, any disposition thereof and any payment, conversion or cancellation of the Shares; provided, that this Section 13 shall terminate upon conversion of all of the Shares. All statements contained in any certificate or other document delivered by or on behalf of the Company pursuant hereto shall constitute representations and warranties by the Company hereunder. (b) The Company agrees to indemnify and hold the Investor harmless from and against, and will pay to the Investor the full amount of, any loss, damage, liability or expense (including amounts paid in settlement and reasonable attorneys' fees and expenses) to the Investor resulting either directly or indirectly from any breach of the representations, warranties, covenants or agreements of the Company contained in this Recapitalization Agreement, or in the Registration Rights Agreement or any other document or certificate delivered pursuant hereto or thereto or in connection herewith or therewith; provided, however, that the Company shall not be required to indemnify the Investor or any other indemnified party for any diminution in the value of the Shares, the Initial Common Stock or the Conversion Shares. If an indemnity is sought pursuant to this Section 13 for any breach of the representations and warranties of the Company contained in this Redemption Agreement, or in the Registration Rights Agreement or any other document or certificate delivered pursuant hereto or thereto or in connection herewith or therewith, other than the representations and warranties set forth in Section 4.2(a) hereto and other than any claim of fraud or under Rule 10b-5 under the Securities Exchange Act, such indemnity shall be the sole remedy for such breach. 49 (c) The Company will defend, indemnify and hold harmless the Investor, its employees, officers, directors, stockholders, partners, agents, representatives and assigns, from and against any judgments, suits and claims, joint or several, and any loss, damage, liability and expense (including attorneys' fees and expenses and costs of investigation) arising out of (i) the presence, disposal, release, removal, discharge, storage or transportation of any Hazardous Material upon, into, from or affecting any real property (including improvements) currently or formerly owned, leased, operated or occupied by the Company or any Subsidiary; (ii) any judicial or administrative action, suit or proceeding, actual or threatened, relating to Hazardous Material upon, in, from or affecting any real property (including improvements) currently or formerly owned, leased, operated or occupied by the Company or any Subsidiary; (iii) any violation of any Environmental Law by the Company or any Subsidiary or any of their agents, tenants, subtenants or invitees; (iv) the imposition of any Environmental Lien for the recovery of costs expended in the investigation, study or remediation of any environmental liability of (or asserted against) the Company or any Subsidiary; and (v) any liability arising out of or related to the off-site shipment, disposal, treatment, handling, storage or transportation of Hazardous Materials; provided, however, that the Company shall not be required to indemnify the Investor or any other indemnified party for any diminution in the value of the Shares, the Conversion Shares or the Initial Common Stock. This Section 13(c) shall survive any payment, conversion or transfer of Shares or Initial Common Stock and any termination of this Agreement. SECTION 14. NOTICE OF SALE (a) The Investor may not sell, transfer or agree to sell or transfer any of its shares of Common Stock held on the Closing Date (including, but not limited to, the Initial Common Stock) and any shares of Common Stock received upon the conversion or redemption of the Series B Preferred Stock in excess of three percent (3%) of the then outstanding Common Stock during any nine (9) month period to any Person other than an Affiliate of the Investor unless the Investor has first provided written notice to the Company of its intention to sell or transfer such shares at least fifteen (15) calendar days prior to such sale, transfer or agreement (the "Notice Period"); provided, that if such shares have not been sold or transferred within the ninety (90) Business Day period immediately following the expiration of the Notice Period such Investor shall be required to issue another notice of its intention to sell pursuant to this Section 14. (b) Nothing in this Section 14 shall be deemed to restrict the transfer of record and/or beneficial ownership of shares of Common Stock from an Investor to one or more Affiliates of such Investor. SECTION 15. MISCELLANEOUS 15.1 Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by prepaid telex, cable or telecopy or sent, postage prepaid, by registered, certified or express mail or reputable 50 overnight courier service and shall be deemed given when so delivered by hand, telexed, cabled or telecopied, or if mailed, three (3) days after mailing (one (1) business day in the case of express mail or overnight courier service), as follows: (i) if to the Company, to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Phone: (303) 626-8200 Fax: (303) 626-8228 Attention: Erik B. Carlson with a copy to: Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Phone: (212) 474-1600 Fax: (212) 474-3700 Attention: Kris F. Heinzelman, Esq. (ii) If to the Investor, to the address indicated on Schedule 1 hereto. 15.2. Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and permitted assignees. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein. This Agreement constitutes the entire agreement and understanding, and supersedes and terminates all prior agreements and understandings, both oral and written (including those contained in the letter agreement dated April 17, 2002 between the Company and the Investor), between the parties hereto relating to the subject matter hereof. 15.3. Amendments and Waiver. The terms and provisions of this Agreement may be amended, waived, modified or terminated only with the written consent of (1) the Company and (2) either (A) the Investor or (B) in the case of an amendment, waiver, modification or termination applicable to all Recapitalization Agreements, the holders of two-thirds of the outstanding Shares; provided, however, that no such amendment, waiver, modification or termination shall change this Section 15.3 without the written consent of the Investors then holding Shares. 51 15.4. Consents. The Investor acknowledges that the Series B Preferred Stock will rank pari passu with the Series A Preferred Stock as to dividend payments and amounts payable in the event of liquidation or winding up of the Company, and the Investor consents pursuant to (a) the Preferred Stock and Warrant Purchase Agreements, including Section 9 thereof and (b) the TransMontaigne Inc. Certificate of Designations of Series A Convertible Preferred Stock, including Sections 9, 11 and 12 thereof, to (1) the Recapitalization, (2) the issuance of the Series B Preferred Stock (including any shares of Series B Preferred Stock issued as dividends on such Series B Preferred Stock), (3) the performance by the Company of its obligations under the terms of this Agreement and the Certificate of Designations, as filed with the Secretary of State of the State of Delaware in June 2002, in respect of the Series B Preferred Stock issued in connection with the Recapitalization and any shares of Series B Preferred Stock issued as dividends on such Series B Preferred Stock and (4) the repurchase by the Company of 4,130,473 shares of Common Stock owned by First Reserve Fund VI, Limited Partnership as contemplated in Section 8.12(f). The Investor agrees that none of (i) the issuance by the Company of the Initial Common Stock, (ii) the issuance by the Company of the Series B Preferred Stock (including any share of Series B Preferred Stock issued as a dividend on such Series B Preferred Stock), (iii) the issuance by the Company of any shares of Common Stock upon redemption or conversion of shares of the Series B Preferred Stock in accordance with the terms of the Certificate of Designations or (iv) the issuance or sale of up to (whether directly or indirectly, including by assumption in a merger in which the Company is the surviving entity) at any time, and from time to time, on or prior to December 31, 2003, of up to an aggregate of 10,000,000 Additional Shares of Stock (including such number of Derivative Securities convertible, exercisable or exchangeable into or for up to 10,000,000 shares of Common Stock) in exchange for consideration in an amount per Additional Share of Stock, or in the case of Derivative Securities, consideration on a per share of Common Stock basis based on the number of shares of Common Stock issuable upon conversion, exercise or exchange of such Derivative Securities) equal to or greater than the Fair Market Value (determined at the time of the such issuance or sale and excluding any underwriters' fees or discounts), will result in an adjustment to the Conversion Price under the TransMontaigne Inc. Certificate of Designations of Series A Convertible Preferred Stock or an adjustment to the Exercise Price under the Warrant Agreement or will give rise to any rights of the Investor under Section 10 of the Preferred Stock and Warrant Purchase Agreements; furthermore, the Investor waives any right it may have (A) to cause an adjustment to the Conversion Price under Section 5(d) of the TransMontaigne Inc. Certificate of Designations of Series A Convertible Preferred Stock or an adjustment to the Exercise Price under Section 5 of the Warrant Agreement or (B) to purchase shares of capital stock of the Company under Section 10 of the Preferred Stock and Warrant Purchase Agreements, upon the occurrence of any of the events listed in clauses (i), (ii), (iii) or (iv) above. The Investor further agrees that it will not sell or transfer any shares of Series A Preferred Stock or any Warrants to any other party unless such party agrees to be bound by the agreements and waiver in the preceding sentence. Pursuant to the Certificate of Designations and this Agreement, the Investor hereby consents to the performance by the Company of its obligations under the terms of the TransMontaigne Inc. Certificate of Designations of Series A Convertible Preferred Stock as in existence on the date hereof, the Preferred Stock and Warrant Purchase Agreements and the Warrant Agreement in respect of the Series A Preferred Stock and Warrants outstanding on the Closing Date following the Recapitalization and any shares of Series A Preferred Stock issued as 52 dividends on such Series A Preferred Stock. The Investor further agrees that the first sentence of Section 9 of the Preferred Stock and Warrant Purchase Agreements is hereby amended by deleting the phrase "two-thirds of the outstanding Shares" and inserting in lieu thereof the phrase "(i) in the case of Section 9.1(a), Section 9.1(b) and Section 9.1(f), two-thirds of the outstanding shares of Series A Preferred Stock and the Company's Series B Convertible Preferred Stock, par value $.01 per share (the "Series B Preferred Stock"), voting together as a single class, with each share of Series A Preferred Stock or Series B Preferred Stock entitled to such number of votes per share equal to the number of shares of Common Stock into which each such share of Series A Preferred Stock or Series B Preferred Stock, as the case may be, is convertible on the date of the vote and (ii) in all other cases, two-thirds of the outstanding Shares" and that the second sentence of Section 9.1 of the Preferred Stock and Warrant Purchase Agreements is hereby amended by deleting the phrase "(b) except as otherwise permitted by the Certificate of Designations or the Warrant Agreement" and inserting in lieu thereof the phrase "(b) except as otherwise contemplated by the Certificate of Designations, the Warrant Agreement, the TransMontaigne Inc. Certificate of Designations of Series B Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware in June 2002, or the Preferred Stock Recapitalization Agreements among the Company and each of the Purchasers, dated June 27, 2002". 15.5. Assignability. (a) Other than with respect to a transfer to an Affiliate of the Investor, no party to this Agreement may assign any of its rights, duties or obligations under this Agreement without the other party's prior written consent, which consent shall not be unreasonably withheld. The Investor shall provide the Company with reasonable notice of any transfer to an Affiliate. (b) If permitted pursuant to Section 15.5(a), the Investor may assign, in whole or in part, any or all of its rights (and/or obligations) under this Agreement to any permitted transferee of any or all of its Shares or Initial Common Stock, and (unless such assignment expressly provides otherwise) any such assignment shall not diminish the rights the Investor would otherwise have under this Agreement or with respect to any remaining Shares or Initial Common Stock held by the Investor. 15.6. Governing Law; Jurisdiction; Waiver of Jury Trial. (a) This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (other than any conflict of laws rule which might result in the application of the laws of any other jurisdiction). (b) THE PARTIES HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE CERTIFICATE OF DESIGNATIONS, THE STOCKHOLDERS' AGREEMENT, THE SHARES, THE INITIAL COMMON STOCK OR THE CONVERSION SHARES WILL BE LITIGATED IN SUCH COURTS. THE PARTIES ACCEPT FOR THEMSELVES AND IN CONNECTION WITH 53 THEIR PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. (c) THE COMPANY AND THE INVESTOR HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE CERTIFICATE OF DESIGNATIONS, THE STOCKHOLDERS' AGREEMENT, THE SHARES, THE INITIAL COMMON STOCK OR THE CONVERSION SHARES, OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY AND THE INVESTOR FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT, THE CERTIFICATE OF DESIGNATIONS, THE STOCKHOLDERS' AGREEMENT, THE SHARES, THE INITIAL COMMON STOCK OR THE CONVERSION SHARES. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL (WITHOUT A JURY) BY THE COURT. 15.7. Attorney Fees. A party in breach of this Agreement shall, on demand, indemnify and hold harmless the other parties hereto from and against all reasonable out-of-pocket expenses, including legal fees, incurred by such other parties by reason of the enforcement and protection of their rights under this Agreement. The payment of such expenses is in addition to any other relief to which such other parties may be entitled. 15.8. Section and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 15.9. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties. 54 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written. TRANSMONTAIGNE INC. By: ------------------------------------ Name: Title: Accepted and Agreed to as of the date first above written by the undersigned Investor: [ ] By: ------------------------ Name: Title: Exhibit A [Form of Certificate of Designations] Exhibit B [Form of Stockholders' Agreement] Exhibit C [Form of Registration Rights Agreement] Exhibit D [Form of CSM Opinion] We have acted as counsel for TransMontaigne, Inc., a Delaware corporation (the "Company"), in connection with the Preferred Stock Recapitalization Agreements dated June 27, 2002 (the "Recapitalization Agreements"), between the Company and the investors listed on Schedule 1 to the Recapitalization Agreements attached thereto (the "Investors"), relating to the recapitalization of certain of the Company's Series A Convertible Preferred Stock, par value $.01 per share and Warrants, each to purchase three-fifths of a share of the Company's Common Stock, par value $.01 per share, for (i) shares of the Company's Common Stock (the "Initial Common Stock"), (ii) cash and (iii) shares of the Company's Series B Convertible Preferred Stock, par value $.01 per share (the "Series B Convertible Preferred Stock"). Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Recapitalization Agreements. In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including: (a) the Restated Certificate of Incorporation of the Company; (b) the Amended and Restated By-laws of the Company; (c) resolutions adopted by the Board of Directors of the Company on June 27, 2002; (d) the Recapitalization Agreements; (e) the Amended and Restated Registration Rights Agreement dated June 27, 2002 (the "Registration Rights Agreement"), between the Company and the Investors; (f) the Certificate of Designations of Series B Convertible Preferred Stock; (g) the Stockholders' Agreement and (h) specimen certificates representing the Initial Common Stock and the Series B Convertible Preferred Stock. Based on the foregoing, we are of the opinion as follows: 1. Based solely on a certificate from the Secretary of State of the State of Delaware, the Company is a corporation validly existing and in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease and operate its properties and conduct its businesses as now being conducted. 2. The authorized capital stock of the Company consists of (i) 80,000,000 shares of Common Stock, par value $.01 per share, and (ii) 2,000,000 shares of Preferred Stock, par value $0.1 per share, of which 250,000 shares have been designated as Series A Convertible Preferred Stock and 100,000 shares have been designated as Series B Convertible Preferred Stock. The Company has duly reserved for issuance an aggregate of 12,727,272 shares of its authorized Common Stock for the exercise of the conversion rights provided in Section 5 of the Certificate of Designations. The shares of Common Stock reserved for issuance upon conversion of the Series B Convertible Preferred Stock have been duly authorized and, upon issuance thereof upon conversion of the Series B Convertible Preferred Stock, in accordance with the terms thereof, will be validly issued, fully paid and non-assessable. 3. Each of the Recapitalization Agreements, the Stockholders' Agreement and the Registration Rights Agreement has been duly authorized, executed and delivered by the Company, and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect, and subject, as to enforceability, to general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law), and except insofar as rights to indemnification and contribution contained therein may be limited by Federal or state securities laws or related public policy. 4. When issued and delivered by the Company in accordance with the terms of the Recapitalization Agreements for the recapitalization of the shares of Series A Convertible Preferred Stock and the Warrants tendered in accordance with the terms of the Recapitalization Agreements, and assuming that the certificates for the Initial Common Stock conform as to form to the specimen certificates examined by us and that such certificates have been duly signed by the Company and countersigned by the Transfer Agent, the Initial Common Stock will be duly and validly issued, fully paid and nonassessable. 5. Based solely on a certificate of the Secretary of State of the State of Delaware, the Certificate of Designations has been duly filed with the Secretary of State of the State of Delaware. When issued and delivered by the Company in accordance with the terms of the Series B Convertible Preferred Stock Certificate of Designations for the recapitalization of the shares of Series A Convertible Preferred Stock and the Warrants tendered in accordance with the terms of the Recapitalization Agreements, and assuming that the certificates for the Series B Convertible Preferred Stock conform as to form to the specimen certificates examined by us and that such certificates have been duly signed by the Company and countersigned by the Transfer Agent, the Series B Convertible Preferred Stock will be duly and validly issued, fully paid and nonassessable. The Series B Convertible Preferred Stock reserved for issuance as dividends have been duly authorized and, upon issuance thereof as dividends in accordance with the terms of the Certificate of Designations, will be validly issued, fully paid and non-assessable. 6. None of the issue of the Initial Common Stock or the Series B Convertible Preferred Stock, the consummation of any other transactions contemplated by the Recapitalization Agreements or the performance of the terms of the Recapitalization Agreements (i) will conflict with, result in a breach of or constitute a default under, the Restated Certificate of Incorporation, the Amended and Restated By-laws of the Company, the Fourth Amended and Restated Credit Agreement, dated as of February 11, 2000, between the Company and Fleet National Bank (formerly known as BankBoston, N.A.), as agent or (ii) will contravene any law, rule or regulation of the United States or the State of New York or the General Corporation Law of the State of Delaware or, to our knowledge, any order or decree of any court or government agency or instrumentality. In connection with the foregoing, we point out that certain of the agreements referred to in clause (i) above are or may be governed by laws other than the laws of the State of New York. For purposes of the opinion expressed in this paragraph, however, we have assumed that all such agreements are governed by and would be interpreted in accordance with the laws of the State of New York. 7. Assuming that the representations of the Investors made in Section 5 of the Recapitalization Agreements are true and correct, it is not necessary in connection with the issuance, sale and delivery of the Initial Common Stock or the Series B Convertible Preferred Stock being acquired by you on the date hereof to register such Initial Common Stock or the Series B Convertible Preferred Stock under the Securities Act of 1933, as amended, it being understood that no opinion is expressed as to any subsequent resale of the Initial Common Stock or the Series B Convertible Preferred Stock. We are admitted to practice in the State of New York, and we express no opinion as to any law other than the law of the State of New York, the General Corporation Law of the State of Delaware and the Federal law of the United States of America. We are furnishing this opinion to you, as the Investors solely for your benefit. This opinion may not be relied upon by any other person or for any other purpose or used, circulated, quoted or otherwise referred to for any other purpose. EXHIBIT E [Form of Amended Credit Agreement] Schedule 1
Number of Number of Shares of Shares of Series A Series B Cumulative Cumulative Preferred Number of Preferred Investor Address Stock (1) Warrants Stock - ------------------------- -------------------------- -------------- ------------- ------------ Mr. Cortlandt S. Dietler TransMontaigne Inc. 2,141.3335 133,340.00 988.0000 370 17th St., Suite 2750 Denver, CO 80202 First Reserve Fund VII, First Reserve Corporation 26,766.6699 1,666,750.00 12,345.0000 L.P. Att: Mr. Ben A. Guill 600 Travis St., Suite 6000 Houston, TX 77002 First Reserve Fund First Reserve Corporation 42,826.6718 2,666,800.00 19,750.0000 VIII, L.P. Att: Mr. Ben A. Guill 600 Travis St., Suite 6000 Houston, TX 77002 Fleming US Discovery Windcrest Discovery 18,455.0837 1,149,191.00 8,511.0000 Fund III, L.P. Capital Partners Att: Mr. Robert L. Burr 122 East 42nd St., 47th Fl. New York, NY 10168 Fleming US Discovery Windcrest Discovery 2,958.2523 184,209.00 1,364.0000 Offshore Fund III, L.P. Capital Partners Att: Mr. Robert L. Burr 122 East 42nd St., 47th Fl. New York, NY 10168 Vencap Holdings Att: Mr. Andrew Kwee 13,199.3141 833,375.00 6,172.0000 (1987) Pte Ltd. GIC Special Investments Pte Ltd. 156 West 56th St., Suite 1900 New York, NY 10019 Number of Amount of Shares of Cash Before Tax Common Tax Withholding Net Cash to be Investor Address Stock Withholding (2) Distributed (2) - ------------------------- -------------------------- ----------- -------------- ----------- --------------- Mr. Cortlandt S. Dietler TransMontaigne Inc. 161,267 $ 289,000.00 $ 289,000.00 370 17th St., Suite 2750 Denver, CO 80202 First Reserve Fund VII, First Reserve Corporation 2,015,837 $ 3,608,000.00 $ 3,608,000.00 L.P. Att: Mr. Ben A. Guill 600 Travis St., Suite 6000 Houston, TX 77002 First Reserve Fund First Reserve Corporation 3,225,339 $ 5,773,000.00 $ 5,773,000.00 VIII, L.P. Att: Mr. Ben A. Guill 600 Travis St., Suite 6000 Houston, TX 77002 Fleming US Discovery Windcrest Discovery 1,389,879 $ 2,488,000.00 $ 2,488,000.00 Fund III, L.P. Capital Partners Att: Mr. Robert L. Burr 122 East 42nd St., 47th Fl. New York, NY 10168 Fleming US Discovery Windcrest Discovery 222,790 $ 399,000.00 $ 399,000.00 Offshore Fund III, L.P. Capital Partners Att: Mr. Robert L. Burr 122 East 42nd St., 47th Fl. New York, NY 10168 Vencap Holdings Att: Mr. Andrew Kwee 1,007,918 $ 1,804,000.00 $ 1,804,000.00 (1987) Pte Ltd. GIC Special Investments Pte Ltd. 156 West 56th St., Suite 1900 New York, NY 10019
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Number of Number of Shares of Shares of Series A Series B Number of Cumulative Cumulative Shares of Preferred Number of Preferred Common Investor Address Stock (1) Warrants Stock Stock - ------------------------- -------------------------- -------------- ------------- ------------ ----------- Laughlin Trustees et al Att: Ms. Casey Linehan 1,070.6667 66,670.00 494.0000 80,633 FBO Larkspur Services Inc. Ricard R. Ohrstrom, Jr. 4303 Faquier Avenue The Plains, VA 20198 Laughlin Trustees et al Att: Ms. Casey Linehan 1,070.6667 66,670.00 494.0000 80,633 FBO Larkspur Services Inc. Kenneth M. Ohrstrom 4303 Faquier Avenue The Plains, VA 20198 Laughlin Trustees et al Att: Ms. Casey Linehan 1,070.6667 66,670.00 494.0000 80,633 FBO Larkspur Services Inc. George L. Ohrstrom 4303 Faquier Avenue The Plains, VA 20198 Laughlin Trustees et al Att: Ms. Casey Linehan 1,070.6667 66,670.00 494.0000 80,633 FBO Larkspur Services Inc. Barnaby A. Ohrstrom 4303 Faquier Avenue The Plains, VA 20198 Codan Trustees et al FBO Att: Ms. Casey Linehan 1,070.6667 66,670.00 494.0000 80,633 Christopher F. Ohrstrom Larkspur Services Inc. 4303 Faquier Avenue The Plains, VA 20198 Codan Trustees et al FBO Att: Ms. Casey Linehan 1,070.6667 66,670.00 494.0000 80,633 Mark J. Ohrstrom Larkspur Services Inc. 4303 Faquier Avenue The Plains, VA 20198 Codan Trustees et al FBO Att: Ms. Casey Linehan 1,070.6667 66,670.00 494.0000 80,633 Esmond V. Harmsworth Larkspur Services Inc. 4303 Faquier Avenue The Plains, VA 20198 Yorktown Energy c/o Yorktown Partners LLC 21,413.3359 1,333,400.00 9,876.0000 1,612,669 Partners III, LP Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 Amount of Cash Before Tax Tax Withholding Net Cash to be Investor Address Withholding (2) Distributed (2) - ------------------------- -------------------------- -------------- ----------- --------------- Laughlin Trustees et al Att: Ms. Casey Linehan $ 144,000.00 $ 144,000.00 FBO Larkspur Services Inc. Ricard R. Ohrstrom, Jr. 4303 Faquier Avenue The Plains, VA 20198 Laughlin Trustees et al Att: Ms. Casey Linehan $ 144,000.00 $ 144,000.00 FBO Larkspur Services Inc. Kenneth M. Ohrstrom 4303 Faquier Avenue The Plains, VA 20198 Laughlin Trustees et al Att: Ms. Casey Linehan $ 144,000.00 $ 144,000.00 FBO Larkspur Services Inc. George L. Ohrstrom 4303 Faquier Avenue The Plains, VA 20198 Laughlin Trustees et al Att: Ms. Casey Linehan $ 144,000.00 $ 144,000.00 FBO Larkspur Services Inc. Barnaby A. Ohrstrom 4303 Faquier Avenue The Plains, VA 20198 Codan Trustees et al FBO Att: Ms. Casey Linehan $ 144,000.00 $24,500.00 $ 119,500.00 Christopher F. Ohrstrom Larkspur Services Inc. 4303 Faquier Avenue The Plains, VA 20198 Codan Trustees et al FBO Att: Ms. Casey Linehan $ 144,000.00 $24,500.00 $ 119,500.00 Mark J. Ohrstrom Larkspur Services Inc. 4303 Faquier Avenue The Plains, VA 20198 Codan Trustees et al FBO Att: Ms. Casey Linehan $ 144,000.00 $24,500.00 $ 119,500.00 Esmond V. Harmsworth Larkspur Services Inc. 4303 Faquier Avenue The Plains, VA 20198 Yorktown Energy c/o Yorktown Partners LLC $ 2,886,000.00 $2,886,000.00 Partners III, LP Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022
3
Number of Number of Shares of Shares of Series A Series B Number of Cumulative Cumulative Shares of Preferred Number of Preferred Common Investor Address Stock (1) Warrants Stock Stock - ------------------------- -------------------------- -------------- ------------- ------------ ----------- Franklin W. Hobbs c/o Yorktown Partners LLC 214.1333 13,334.00 99.0000 16,127 Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 Nicholas F. Brady Trust c/o Yorktown Partners LLC 214.1333 13,334.00 99.0000 16,127 Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 David W. Niemiec c/o Yorktown Partners LLC 214.1333 13,334.00 99.0000 16,127 Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 George H. Weiler c/o Yorktown Partners LLC 16.0599 1,000.00 7.0000 1,209 Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 Ticonderoga e-Services Att: Mr. Robert Hannon 5,353.3340 333,350.00 2,469.0000 403,167 Fund I, LP 20 William Street, Suite G-40 Wellesley, MA 02481 Amount of Cash Before Tax Tax Withholding Net Cash to be Investor Address Withholding (2) Distributed (2) - ------------------------- -------------------------- ------------- ----------- --------------- Franklin W. Hobbs c/o Yorktown Partners LLC $ 29,000.00 $ 29,000.00 Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 Nicholas F. Brady Trust c/o Yorktown Partners LLC $ 29,000.00 $ 29,000.00 Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 David W. Niemiec c/o Yorktown Partners LLC $ 29,000.00 $ 29,000.00 Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 George H. Weiler c/o Yorktown Partners LLC $ 2,000.00 $ 2,000.00 Att: Mr. Peter A. Leidel 410 Park Avenue, 19th Floor New York, NY 10022 Ticonderoga e-Services Att: Mr. Robert Hannon $ 722,000.00 $722,000.00 Fund I, LP 20 William Street, Suite G-40 Wellesley, MA 02481
4
Number of Number of Shares of Shares of Series A Series B Number of Cumulative Cumulative Shares of Preferred Number of Preferred Common Investor Address Stock (1) Warrants Stock Stock - ------------------------- -------------------------- -------------- ------------- ------------ ----------- CFE, Inc. General Electric Capital 5,353.3340 333,350.00 2,469.0000 403,167 Corporation Att: Mr. Mark Hempfling 201 High Ridge Road Stamford, CT 06927 Vestar Capital Vestar Capital Partners 10,559.4513 666,700.00 4,938.0000 806,335 Partners III, L.P. Att: Mr. J. Christopher Henderson 1225 17th St., Suite 1660 Denver, CO 80202 Wiegers & Co. c/o Mr. George A. Wiegers 267.6665 16,668.00 123.0000 20,158 Wiegers & Co. 30 Benchmark Road #212 Avon, CO 81620 Wiegers Family c/o Mr. George A. Wiegers 267.6665 16,668.00 123.0000 20,158 Foundation Wiegers & Co. 30 Benchmark Road #212 Avon, CO 81620 ------------ --------- ---------- ---------- Total 157,715.2402 9,841,493 72,890.000 11,902,705 ============ ========= ========== ========== Amount of Cash Before Tax Tax Withholding Net Cash to be Investor Address Withholding (2) Distributed (2) - ------------------------- -------------------------- ------------- ----------- --------------- CFE, Inc. General Electric Capital $ 722,000.00 $ 722,000.00 Corporation Att: Mr. Mark Hempfling 201 High Ridge Road Stamford, CT 06927 Vestar Capital Vestar Capital Partners $ 1,443,000.00 $ 1,443,000.00 Partners III, L.P. Att: Mr. J. Christopher Henderson 1225 17th St., Suite 1660 Denver, CO 80202 Wiegers & Co. c/o Mr. George A. Wiegers $ 36,000.00 $ 36,000.00 Wiegers & Co. 30 Benchmark Road #212 Avon, CO 81620 Wiegers Family c/o Mr. George A. Wiegers $ 36,000.00 $ 36,000.00 Foundation Wiegers & Co. 30 Benchmark Road #212 Avon, CO 81620 -------------- ---------- -------------- Total $21,303,000.00 $73,500.00 $21,229,500.00 ============== ========== ==============
- ---------- (1) Whole shares are held in certificate form by each Investor, fractional shares are held by EquiServe Trust Company, N.A. in book entry. (2) Estimated withholding tax will be withheld, and any withheld funds in excess of actual amounts of withholding will be refunded by check. 8 Schedule 2 DISCLOSURE SCHEDULE 1. Preemptive Rights (4.2(a)) Antidilution Rights Agreement dated as of April 17, 1996, by and between TransMontaigne Oil Company and Water Wagon & Co., Nominee for Merrill Lynch Growth Fund for Investment and Retirement. 2. Outstanding options, warrants, subscriptions, rights, convertible securities or other arrangements regarding capital stock of the Company.
Before Recapitalization After Recapitalization Agreement Agreement ----------------------- ---------------------- Employee stock options outstanding pursuant to the 1995 and 1997 Equity Incentive Plans 1,297,730 1,297,730 Warrants to purchase common stock. Each warrant allows holder to purchase 0.6 shares of common 11,341,568 warrants 1,500,075 warrants stock at $14.00 per share 6,804,937 common stock 900,045 common stock equivalents equivalents Shares of common stock into which Series A could convert at $15.00 per share 12,142,416 1,628,082 Shares of common stock into which Series B could convert at $6.60 per share 11,043,940
3. Registration Rights (4.2(d)). a. Registration Rights Agreement by and between TransMontaigne Inc. and the Institutional Investors dated as of April 17, 1996, as amended and restated as of June 27, 2002. b. Registration Rights Agreement by and between TransMontaigne Inc. and Louis Dreyfus Corporation dated as of October 30, 1998, as amended and restated as of June 27, 2002. c. Registration Rights Agreement by and between TransMontaigne Inc. and the Series A Convertible Preferred Stock purchasers' signatories thereto dated March 25, 1999, as amended and restated as of June 27, 2002. 4. Voting trusts, proxies or other voting arrangements with third parties (4.2(e)). None. 9 5. Antidilution Rights (4.2(f)). a. Employee Stock Options issued pursuant to Equity Incentive Plans of 1991, 1995 and 1997 (share adjustment only in event of stock splits). b. Series A Preferred Stock 6. List of Subsidiaries and Investments (4.3(a)).
Ownership% Name of Company ---------- --------------- SUBSIDIARIES OF TRANSMONTAIGNE INC. 100% TransMontaigne Product Services Inc. 100% K123 Corporation 97% Refined Solutions Inc. 100% Republic Natural Gas Company 100% TransMontaigne Canada Ltd. 100% TransMontaigne Transport Inc. INVESTMENTS OF TRANSMONTAIGNE INC. 18.036% Lion Oil Company INVESTMENTS OF TRANSMONTAIGNE PRODUCT SERVICES INC. 60% Razorback Pipeline Company
7. Subsidiary options, warrants, subscription rights, convertible securities or other agreements. 4.3(b). All outstanding shares of capital stock of the Subsidiaries have been pledged to and are in the possession of Fleet National Bank pursuant to the Credit Agreement. 8. Restrictions on dividends from subsidiaries (4.3(c)). None. 10 9. Defaults or Conflicts (4.5(b)). a. Registration Rights Agreement by and between TransMontaigne Inc. and the Institutional Investors dated as of April 17, 1996, as amended and restated as of June 27, 2002. b. Registration Rights Agreement by and between TransMontaigne Inc. and Louis Dreyfus Corporation dated as of October 30, 1998, as amended and restated as of June 27, 2002. 10. Preemptive Rights (4.5(b)(iv)). Antidilution Rights Agreement dated as of April 17, 1996, by and between TransMontaigne Oil Company and Water Wagon & Co., Nominee for Merrill Lynch Growth Fund for Investment and Retirement. 11. Material adverse change in business since 6/30/01 (4.6). None. 12. Pending litigation (4.7). None. 13. Benefit Plans (4.9(a)). TransMontaigne Product Services Inc. Savings and Profit Sharing Plan TransMontaigne Product Services Inc. PPO/Comprehensive Group Medical Plan TransMontaigne Product Services Inc. Group Dental Plan TransMontaigne Product Services Inc. Group Long Term Disability Insurance TransMontaigne Product Services Inc. Group Life Insurance TransMontaigne Product Services Inc. Voluntary Term Life Insurance TransMontaigne Product Services Inc. Section 125 Pre-Tax Salary Reduction Health Care Reimbursement Plan TransMontaigne Product Services Inc. Section 125 Pre-Tax Salary Reduction Dependent Care Reimbursement Plan TransMontaigne Product Services Inc. Blanket Accident Insurance 14. Other names under which the Company has conducted business (4.17). TransMontaigne Oil Company EX-99.B 4 d98175a7exv99wb.txt LETTER AGREEMENT DATED JUNE 27, 2002 11 EXHIBIT B JUNE 27, 2002 - -------------------------------------------------------------------------------- First Reserve Fund VI, Limited Partnership In care of First Reserve Corporation 1801 California Street, Suite 4110 Denver, CO 80202 Attention: Thomas R. Denison Re: Sale of TransMontaigne Inc. Common Stock Dear Tom: As you know, TransMontaigne Inc. (the "Company") is currently undertaking a financial restructuring. In connection with the restructuring, the Company desires to repurchase (the "Repurchase") all of the Company's Common Stock, par value $0.01 per share (the "Common Stock") held by First Reserve Fund VI, Limited Partnership ("Fund VI"). In furtherance of the Repurchase and for good and valuable consideration the parties hereto agree as follows: 1. Fund VI agrees to sell to the Company, and the Company agrees to purchase from Fund VI on the Closing Date (as defined below), 4,130,473 shares of the Common Stock (the "Shares") for an aggregate purchase price of $20,445,841 (the "Purchase Price"). No further payment shall be required from the Company for the Shares. 2. The Closing of the purchase and sale of the Shares by the Company shall take place at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York 10019 at 10:00 a.m. New York City time on June 28, 2002 or such other time and date as shall be mutually agreed to by the parties. Such time and date are herein referred to as the "Closing Date". 3. At the Closing, Fund VI will deliver to the Company certificates evidencing 4,130,473 shares of Common Stock, and the Company will deliver to Fund VI a certified or official bank check (or wire transfer) in an amount equal to the Purchase Price. 4. Each of Fund VI and the Company hereby represents that (a) it has all requisite power, authority and legal right to execute, deliver, enter into, consummate the transactions contemplated by and perform its obligations under this Letter Agreement; (b) its execution, delivery and performance of this Letter Agreement has been duly authorized by all required corporate and other actions; (c) it has duly executed and delivered this Letter Agreement, and this Letter Agreement constitutes its legal, valid and binding obligations, enforceable against each party in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws relating to the rights of creditors generally from time to time in effect and to general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding in equity or at law; and (d) the execution, delivery and performance by it of this Letter Agreement and any of the transactions contemplated hereby do not and will not (i) violate 12 or conflict with any provision of (A) its charter or by-laws, (B) any law, rule, regulation or order of any federal, state, county, municipal or other governmental authority, or any judgment, writ, injunction, decree, award or other action of any court or governmental authority or arbitrator(s), or any agreement, indenture or other instrument applicable to it or any of its respective properties, or (C) any agreement or instrument to which it is a party or by which it is bound, except in the case of subclauses (B) and (C), such violations or conflicts which would not individually or in the aggregate have a material adverse effect on the condition of its business. 5. Fund VI represents that it has, or as of the Closing Date will have, good and valid title to the Shares, free and clear of all liens, charges, claims, pledges or other encumbrances of any kind. 6. Each party's obligations hereunder are subject to the consummation of the recapitalization of the certain shares of the Company's Series A Convertible Preferred Stock, par value $.01 per share (the "Series A Preferred Stock") and certain of the Warrants, each to purchase three-fifths of one share of Common Stock pursuant to the Preferred Stock Recapitalization Agreements between each of the holders of the Series A Preferred Stock and the Company. 7. This Letter Agreement shall be governed by the laws of the State of New York applicable to contracts performed entirely therein. This Letter Agreement may not be amended, modified or withdrawn without the consent of each of the parties hereto. 13 Please acknowledge your agreement with the foregoing by executing this letter below, and returning one copy to the undersigned. TransMontaigne Inc. by ---------------------------------- Name: Title: First Reserve Fund VI, Limited Partnership by First Reserve Corporation, its general partner by ---------------------------------- Name: Title: EX-99.C 5 d98175a7exv99wc.txt LETTER AGREEMENT DATED JUNE 26, 2002 14 EXHIBIT C [TRANSMONTAIGNE LETTERHEAD] June 26, 2002 First Reserve Fund VI, Limited Partnership ("Fund VI") First Reserve Fund VII, Limited Partnership ("Fund VII") First Reserve Fund VIII, L.P. ("Fund VIII") c/o First Reserve Corporation 1801 California Street, Suite 4110 Denver, CO 80202 Re: Amendment to Agreement to Elect Directors dated as of April 17, 1996 (the "Agreement") Dear Tom: This letter will amend the above-referenced Agreement to include Fund VII and Fund VIII as "First Reserve Investors" as defined in the Agreement. All other terms of the Agreement shall remain unchanged and in full force and effect except that Section 2.7 shall be amended and restated as set forth below: Section 2.7. Term. This Agreement shall terminate and no longer be binding on the parties hereto at such time as the First Reserve Investors beneficially own (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934) less than 10% of the Common Stock. To acknowledge your agreement to this amendment, please sign below on behalf of Fund VI, Fund VII and Fund VIII. Sincerely, ------------------------------------- TransMontaigne Inc. Acknowledged this 26th day of June, 2002 15 FIRST RESERVE FUND VI, Limited Partnership By: First Reserve Corporation, its General Partner By: --------------------------------------- FIRST RESERVE FUND VII, Limited Partnership By: First Reserve GP VII, L.P., its General Partner By: First Reserve Corporation, its General Partner By: --------------------------------------- FIRST RESERVE FUND VIII, L.P. By: First Reserve GP VIII, L.P., its General Partner By: First Reserve Corporation, its General Partner By: --------------------------------------- EX-99.D 6 d98175a7exv99wd.txt STOCKHOLDERS AGREEMENT 16 EXHIBIT D EXECUTION COPY STOCKHOLDERS' AGREEMENT This STOCKHOLDERS' (this "Agreement") is dated as of June 28, 2002, among TransMontaigne Inc., a Delaware corporation (the "Company"), Cortlandt S. Dietler ("Dietler"), Donald H. Anderson ("Anderson"), Harold R. Logan, Jr. ("Logan"), William S. Dickey ("Dickey"), Randall J. Larson ("Larson") (the "Key Senior Executives"), and the Investors listed on the signature pages of this Agreement (such purchasers are collectively referred to herein as the "Investor Group" and, individually, as an "Investor.") WITNESSETH: WHEREAS, each member of the Investor Group is a party to the Stockholders' Agreement dated March 25, 1999, among the Company, certain officers of the Company including Dietler and Logan (the "1999 Officers") and the Investor Group (the "1999 Stockholders' Agreement") relating to the shares of the Company's Series A Convertible Preferred Stock, par value $.01 per share (the "Series A Preferred Stock"), and the Company's Warrants (the "Warrants"), each to purchase three-fifths of one share of the Company's Common Stock, par value $.01 per share (the "Common Stock"), held by such Investor Group and the shares of Common Stock into which such shares of Series A Preferred Stock and the Warrants are convertible; WHEREAS, pursuant to the terms of the Preferred Stock Recapitalization Agreement between the Company and each of the Investors, the Company has agreed to recapitalize (the "Recapitalization") 157,715.2402 of the outstanding shares of the Series A Preferred Stock and 9,841,493 of the outstanding Warrants into an aggregate of (i) 11,902,705 shares of the Company's Common Stock, (ii) $21,303,000 in cash (including accrued but unpaid dividends on all the Series A Preferred Stock through June 30, 2002), and (iii) $72,890,000 liquidation value of the Company's Series B Convertible Preferred Stock, par value $.01 per share (the "Series B Preferred Stock"), and the Investors have agreed to participate in the Recapitalization on the terms and subject to the conditions set forth therein; WHEREAS, certain of the Investors will continue to hold shares of the Series A Preferred Stock and Warrants; WHEREAS, the Key Senior Executives own approximately 8.21% of the outstanding shares of the Company's Common Stock (such shares, along with any shares of Common Stock, that the Key Senior Executives may subsequently acquire, the "Shares"); Page 16 of __ 17 WHEREAS, it is a condition precedent to the Company's and the Investors' respective obligations to consummate the transactions contemplated by the Preferred Stock Recapitalization Agreement that the parties hereto shall have entered into this Agreement; and WHEREAS, each of Dietler, Anderson, Logan, Dickey, and Larson, the Company and the Investors desires to enter into this Agreement to regulate certain aspects of their relationship; NOW, THEREFORE, in consideration of the agreements and mutual covenants contained herein, the parties hereto hereby agree as follows: 1. Termination of 1999 Stockholders' Agreement The 1999 Stockholders' Agreement is hereby terminated and each Investor agrees that the rights of the Investors under the 1999 Stockholders' Agreement are hereby terminated, and releases (i) the Company and (ii) each of the 1999 Officers from all obligations under the 1999 Stockholders' Agreement. 2. Rights of Inclusion (Tag-Along Rights) (a) In the event any of the Key Senior Executives proposes to Transfer any Shares (the "Transferor Shares") in excess of the amounts and during the time periods specified in Section 3 hereof (other than pursuant to a transaction open to all holders of the Common Stock) to any Person (the "Buyer"), as a condition to such Transfer, such Key Senior Executive shall cause the Buyer to offer (the "Inclusion Offer") to purchase from each Investor, at each such Investor's option, up to that number of Investor Shares determined in accordance with Section 2(b) on the same terms and conditions as are applicable to the Transferor Shares except that each Investor shall not be required to provide any representation, warranty or other undertaking other than with respect to its ownership of, and authority to Transfer, the Investor Shares owned by it free of any liens or encumbrances. Such Key Senior Executive shall provide prompt written notice to each Investor (the "Inclusion Notice") setting forth all the terms and conditions of the Inclusion Offer, and each Investor may accept the Inclusion Offer in whole or in part by providing a written notice of acceptance with respect to Investor Shares owned by it to such Key Senior Executive within fifteen (15) days of delivery of the Inclusion Notice to it (the "Acceptance Notice"). (b) Each Investor shall have the right to sell, pursuant to the Inclusion Offer, Investor Shares representing the same percentage of all Investor Shares owned by it as the Transferor Shares are of all Shares owned by such Key Senior Executive (such percentage shall be calculated on the basis that all shares of Series A Preferred Stock and Series B Preferred Stock owned by each Investor have been converted into shares of Common Stock at the then current conversion price per share under Section 5 of the TransMontaigne Inc. Certificate of Designations of Series A Convertible Preferred Stock or Section 5 of the TransMontaigne Inc. Certificate of Designations of Series B Convertible Preferred Stock, as applicable, and all Warrants owned by each Investor have been exercised at the then current exercise price); provided, however, that if no Investor elects to exercise such right, such Key Senior Executive shall nonetheless be entitled to Transfer all of the Transferor Shares described in the Inclusion Notice. In the event the number of Investor Shares for which the Investor Group elects to Page 17 of __ 18 exercise such right, along with the Transferor Shares and any other shares of the Company to be sold by other stockholders pursuant to any similar rights granted to such other stockholders, exceed the number of shares which the Buyer is willing to purchase, the number of shares to be Transferred to the Buyer by each transferor shall be reduced so that each transferor is entitled to Transfer the same percentage of its shares (determined on a Common Stock equivalent basis) included in its Acceptance Notice as each other transferor. If an Investor elects to exercise such right, such Investor may, in its sole discretion, determine the composition of the Investor Shares (i.e., the number of the shares of Series A Preferred Stock, Series B Preferred Stock, Warrants and Common Stock to be included in the Investor Shares) to be transferred by it to the Buyer pursuant to the Inclusion Offer. In the event that any Investor chooses to include any shares of Series A Preferred Stock or Series B Preferred Stock or Warrants in the Investor Shares to be Transferred by it to the Buyer pursuant to the Inclusion Offer, any such Investor shall, prior to or simultaneously with such Transfer, convert such shares of Series A Preferred Stock and Series B Preferred Stock or exercise such Warrants, as applicable, into or for shares of Common Stock so that each Investor Transfers only Common Stock to the Buyer. (c) Each Key Senior Executive shall have ninety (90) days, commencing on the date of the Inclusion Notice, in which to Transfer, on behalf of himself and the Investor Group up to the number of shares covered by the Inclusion Offer (including the Transferor Shares) to the Buyer. The terms of such Transfer, including, without limitation, price and form of consideration, shall be as set forth in the Inclusion Notice. If at the end of such ninety (90) day period such Key Senior Executive has not completed the Transfer of the Transferor Shares and the Investor Shares (if any) proposed to be Transferred, such Key Senior Executive may not proceed with such Transfer or any other Transfer without first giving a new Inclusion Notice pursuant to the provisions of this Section 2. (d) If a Key Senior Executive is able to complete the Transfer of the Transferor Shares and the Investor Shares (if any) proposed to be Transferred within such ninety (90) day period, at the closing thereof, each Investor shall deliver to the Buyer a certificate or certificates representing the Investor Shares owned by it to be Transferred pursuant to the Inclusion Offer, free and clear of all liens and encumbrances, and the Buyer shall pay to each such Investor the purchase price for the Investor Shares so Transferred pursuant to this Section 2 and shall furnish such other evidence of the completion of such Transfer and the terms thereof as may be reasonably requested by the Investor Group. (e) Notwithstanding any provision hereof to the contrary if any Key Senior Executive and the Investors agree that the strict enforcement of the terms of Section 2 hereof is unduly burdensome then the Investors and such Key Senior Executive shall agree on terms for that particular transaction that carry out the intent of this agreement. 3. Limitation on Transfers (a) So long as at least 50% (on an individual or aggregate basis) of the Investor Shares beneficially owned by the Investors or their Affiliates as of the date hereof (calculated based on total number of shares of Common Stock into or for which such Investor Shares are convertible or exercisable on the date hereof) remain beneficially owned by such Investors or Page 18 of __ 19 such Affiliates during the five year period beginning on the date hereof and ending on the fifth anniversary of such date, each Key Senior Executive agrees not to Transfer, in any transaction or series of transactions during such period, that number of Shares that represents in excess of thirty five percent (35%) of the aggregate number of Shares (calculated by treating all options held by such Key Senior Executive to purchase shares of Common Stock as exercised) held by such Key Senior Executive as of June 30, 2002, and shares acquired subsequent to such date, as adjusted to reflect any stock split, stock dividend, recapitalization or similar event after June 30, 2002 (other than in compliance with Section 2 hereof or in a transaction open to all holders of Common Stock). (b) Any attempt to Transfer or any purported Transfer of the Shares not in accordance with the terms of this Agreement shall be null and void and the Company, as the issuer of such securities, shall not permit any transfer agent of such securities to give any effect to any such attempted Transfer in its stock records of which, after due inquiry, it has knowledge. (c) On September 30, 2002 and at the end of each subsequent fiscal quarter of the Company, each Key Senior Executive will deliver to the Company's secretary all reports or filings made by such Key Senior Executive with the Securities and Exchange Commission (or other securities regulatory authority or body) pursuant to Rule 144 or Section 16 of the Securities Exchange Act of 1934, as amended (or similar rules or sections). (d) Notwithstanding any other provision hereof any Transfer of Shares by a Key Senior Executive pursuant any legal settlement, including, without limitation, to a divorce decree, will not be considered a Transfer for purposes of this Agreement. 4. Definitions As used herein, the following terms shall have the respective meanings set forth below: "Acceptance Notice" shall have the meaning set forth in Section 2(a) hereof. "Affiliate" shall have the meaning given it in Section 3 of the Preferred Stock Recapitalization Agreement. "Anderson" shall have the meaning set forth in the first paragraph hereof. "Buyer" shall have the meaning set forth in Section 2(a) hereof. "Common Stock" means the Company's Common Stock, par value $.01 per share; and shall also include any capital stock or other securities into which Common Stock is changed and any capital stock or other securities resulting from or comprising a reclassification, combination or subdivision of, or a stock dividend on, any Common Stock. "Company" shall have the meaning set forth in the first paragraph hereof. "Dickey" shall have the meaning set for in the first paragraph hereof. Page 19 of __ 20 "Dietler" shall have the meaning set forth in the first paragraph hereof. "Inclusion Notice" shall have the meaning set forth in Section 2(a) hereof. "Inclusion Offer" shall have the meaning set forth in Section 2(a) hereof. "Investor" shall have the meaning set forth in the first paragraph hereof. "Investor Group" shall have the meaning set forth in the first paragraph hereof. "Investor Shares" means all Series B Preferred Stock, Series A Preferred Stock and Warrants and Common Stock obtained as a result of conversion of Series B Preferred Stock and Series A Preferred Stock or exercise of the Warrants, owned by the Investor Group. "Larson" shall have the meaning set forth in the first paragraph hereof. "Logan" shall have the meaning set forth in the first paragraph hereof. "1999 Officers" has the meaning set forth in the first WHEREAS clause hereof. "1999 Stockholders' Agreement" has the meaning set forth in the first WHEREAS clause hereof. "Person" means an individual, corporation, partnership, firm, association, joint venture, trust, unincorporated organization, governmental body, agency, political subdivision or other entity. "Series A Preferred Stock" shall have the meaning set forth in the first WHEREAS clause hereof. "Series B Preferred Stock" shall have the meaning set forth in the second WHEREAS clause hereof. "Shares" shall have the meaning set forth in the fourth WHEREAS clause hereof. "Transfer" means, with respect to any security, any direct or indirect sale, transfer, assignment, hypothecation, pledge or any other disposition of such security or any interest therein. "Transferor Shares" shall have the meaning set forth in Section 2(a) hereof. Page 20 of __ 21 5. Miscellaneous (a) In the event of a breach by any party to this Agreement of its obligations under this Agreement, any party injured by such breach, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The parties agree that the provisions of this Agreement shall be specifically enforceable, it being agreed by the parties that the remedy at law, including monetary damages, for breach of any such provision will be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. (b) Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement will be effective against any party hereto unless such modification, amendment or waiver is approved in writing by the party against whom such modification, amendment or waiver is to be effective, which in the case of the Investors shall require the approval of Investors holding two-thirds of the Investor Shares. The failure of any party to enforce any of the provisions of this Agreement will in no way be construed as a waiver of such provisions and will not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. (c) All covenants and agreements in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not; provided that no party to this Agreement may assign any of its rights, duties or obligations under this Agreement, except with the other parties' written consent. (d) All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally or by facsimile transmission or sent by nationally recognized overnight courier service to the parties at the following addresses or facsimile numbers: (i) If to an Investor, to: the addresses indicated on Schedule 1 to the Preferred Stock Recapitalization Agreement (ii) If to the Company, to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Attn: Erik B. Carlson Page 21 of __ 22 (iii) If to Dietler, to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Attn: Cortlandt S. Dietler (iv) If to Anderson, to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Attn: Donald H. Anderson (v) If to Logan, to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Attn: Harold R. Logan, Jr. (vi) If to Dickey, to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Attn: William S. Dickey (vii) If to Larson, to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Attn: Randall J. Larson All such notices, requests and other communications will (x) if delivered personally to the address as provided in this Section 5(d), be deemed given upon delivery, (y) if delivered by facsimile transmission to the facsimile number as provided in this Section 5(d), be deemed given upon receipt and (z) if delivered by nationally recognized overnight courier service in the manner described above to the address as provided in this Section 5(d), be deemed given on the business day following the day it was sent (in each case regardless of whether such notice, request or other Page 22 of __ 23 communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 5(d)). Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other parties hereto. (e) The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. (f) If any provision of this Agreement is held to be illegal, invalid or unenforceable, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected then, (i) such provision will be fully severable, (ii) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (iii) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible. (g) This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to a contract executed and performed in such State without giving effect to the conflicts of laws principles thereof. (h) This Agreement may be executed in any number of counterparts (which counterparts may include any counterparts delivered prior to June 30, 2002), each of which will be deemed an original, but all of which together will constitute one and the same instrument. (i) The terms of this Agreement shall cease and be of no further effect with respect to a Key Senior Executive upon the death or resignation, removal or termination of employment with the Company of such Key Senior Executive, but shall continue with respect to all other Key Senior Executives. Page 23 of __ 24 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above. TRANSMONTAIGNE INC. By: ------------------- Name: Title: KEY SENIOR EXECUTIVES ---------------------- Cortlandt S. Dietler ---------------------- Donald H. Anderson ---------------------- Harold R. Logan, Jr. ---------------------- William S. Dickey ---------------------- Randall J. Larson [Stockholders' Agreement Signature Page] Page 24 of __ 25 INVESTORS FIRST RESERVE FUND VII, LIMITED PARTNERSHIP By: FIRST RESERVE GP VII, L.P. its general partner By: FIRST RESERVE CORPORATION its general partner By: ----------------------- Name: Title: FIRST RESERVE FUND VIII, L.P. By: FIRST RESERVE GP VIII, L.P. its general partner By: FIRST RESERVE CORPORATION its general partner By: ----------------------- Name: Title: [Stockholders' Agreement Signature Page] Page 25 of __ 26 VENCAP HOLDINGS (1987) PTE LTD By: ---------------------------- Name: Title: [Stockholders' Agreement Signature Page] Page 26 of __ 27 FLEMING US DISCOVERY FUND III, L.P. By: FLEMING US DISCOVERY PARTNERS, L.P., its general partner By: FLEMING US DISCOVERY, LLC. its general partner By: ----------------------- Name: Title: FLEMING US DISCOVERY OFFSHORE FUND III, L.P. By: FLEMING US DISCOVERY PARTNERS, L.P., its general partner By: FLEMING US DISCOVERY, LLC. its general partner By: ----------------------- Name: Title: [Stockholders' Agreement Signature Page] Page 27 of __ 28 LAUGHLIN TRUSTEES ET AL FBO RICARD R. OHRSTROM, JR. DTD 12/22/97 By: ------------------------- Name: Title: LAUGHLIN TRUSTEES ET AL FBO KENNETH M. OHRSTROM DTD 12/22/97 By: ------------------------- Name: Title: LAUGHLIN TRUSTEES ET AL FBO GEORGE L. OHRSTROM II DTD 12/22/97 By: ------------------------- Name: Title: LAUGHLIN TRUSTEES ET AL FBO BARNABY A. OHRSTROM DTD 12/22/97 By: ------------------------- Name: Title: [Stockholders' Agreement Signature Page] Page 28 of __ 29 CODAN TRUSTEES ET AL FBO CHRISTOPHER F. OHRSTROM DTD 12/22/97 By: ------------------------- Name: Title: CODAN TRUSTEES ET AL FBO MARK J. OHRSTROM DTD 12/22/97 By: ------------------------- Name: Title: CODAN TRUSTEES ET AL FBO ESMOND V. HARMSWORTH DTD 12/22/97 By: ------------------------- Name: Title: [Stockholders' Agreement Signature Page] Page 29 of __ 30 YORKTOWN ENERGY PARTNERS III, L.P. By: YORKTOWN III COMPANY, L.L.C., its general partner By: ------------------------- Name: Title: YORKTOWN PARTNERS, L.L.C., as agent By: ------------------------- Name: Title: TICONDEROGA E-SERVICES FUND I, LP, By: ------------------------- Name: Title: [Stockholders' Agreement Signature Page] Page 30 of __ 31 CFE, INC. By: ------------------------- Name: Title: [Stockholders' Agreement Signature Page] Page 31 of __ 32 VESTAR CAPITAL PARTNERS III, L.P. By: Vestar Associates III, L.P., its general partner By: Vestar Associates Corporation III, its general partner By: ------------------------- Name: Title: [Stockholders' Agreement Signature Page] Page 32 of __ EX-99.E 7 d98175a7exv99we.txt AMENDED AND RESTATED PREFERRED STOCK INVESTORS 33 EXHIBIT E AMENDED AND RESTATED PREFERRED STOCK INVESTOR REGISTRATION RIGHTS AGREEMENT AMENDED AND RESTATED PREFERRED STOCK INVESTOR REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of June 27, 2002, between TransMontaigne Inc., a Delaware corporation (the "Company"), and the entities listed on the signature pages of this Amended and Restated Registration Rights Agreement (the "Preferred Stock Investors"). WHEREAS, pursuant to the terms of the Preferred Stock and Warrant Purchase Agreements between the Company and each of the Preferred Stock Investors (the "Stock and Warrant Purchase Agreements"), the Preferred Stock Investors have purchased (x) shares of the Company's Series A Convertible Preferred Stock, par value $.01 per share (the "Series A Preferred Stock") and (y) Warrants, each to purchase three-fifths of one share of the Company's Common Stock, par value $.01 per share (the "Common Stock") and are beneficiaries of a Registration Rights Agreement dated as of March 25, 1999 with the Company (the "Original Registration Rights Agreement"); WHEREAS, pursuant to the terms of the Preferred Stock Recapitalization Agreements (the "Recapitalization Agreements") entered into, or to be entered into, between the Company and the Preferred Stock Investors (the "Series B Investors"), the Series B Investors have agreed to tender (the "Recapitalization") certain of their shares of Series A Preferred Stock and Warrants for recapitalization by the Company for consideration consisting of (x) shares of Common Stock, (y) cash and (z) shares of the Company's Series B Convertible Preferred Stock, par value $0.01 per share (the "Series B Preferred Stock"); and WHEREAS, it is a condition precedent to the Series B Investors' obligations to participate in the Recapitalization as contemplated by the Recapitalization Agreements that the Company and the Series B Investors shall have entered into this Agreement to, among other things, (i) grant registration rights in respect of the Series B Investor Shares similar to the rights set forth in (x) the Registration Rights Agreement, dated as of April 17, 1996, and amended and restated as of June 27, 2002 (the "Institutional Investor Registration Rights Agreement"), by and among the Company and the institutional investors identified therein (the "Institutional Investors"), (y) the Registration Rights Agreement, dated as of October 30, 1998, and amended and restated as of June 27, 2002 (the "LDC Registration Rights Agreement"), between the Company and Louis Dreyfus Corporation ("LDC") and (z) the Original Registration Rights Agreement and (ii) amend and restate the Original Registration Rights Agreement as evidenced hereby. Page 33 of __ 34 NOW, THEREFORE, in consideration of the aforesaid and the mutual promises hereinafter made, the parties hereto agree that the Original Registration Rights Agreement is hereby amended and restated in its entirety as follows: Definitions Definitions. The following terms, as used herein, shall have the following meanings: "Advice" has the meaning set forth in Section 2.3. "Affiliate" means, with respect to any specified person, any other person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified person. For the purposes of this definition, "control" when used with respect to any specified person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agreement" has the meaning set forth in the preamble to this Agreement. "Board" means the Board of Directors of the Company. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York are authorized or obligated by law or executive order to close. "Commission" means the Securities and Exchange Commission or any other Federal agency from time to time administering the 1933 Act or the Exchange Act. "Common Stock" has the meaning set forth in the recitals to this Agreement. "Common Stock Equivalent" means any securities of any person convertible into or exchangeable or exercisable for Common Stock (whether at the option of such person or of the holder of such securities), including the Series A Preferred Stock and the Series B Preferred Stock. "Company" has the meaning set forth in the preamble to this Agreement. "Demand Registration" has the meaning set forth in Section 2.2.1. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Institutional Investor Demand Registration" has the meaning set forth in Section 2.2.1. "Institutional Investor Notice" has the meaning set forth in Section 2.2.1. Page 34 of __ 35 "Institutional Investor Registration Rights Agreement" has the meaning set forth in the recitals to this Agreement. "Institutional Investors" has the meaning set forth in the recitals to this Agreement. "LDC" has the meaning set forth in the recitals to this Agreement. "LDC Demand Registration" has the meaning set forth in Section 2.2.1. "LDC Holders" has the meaning set forth in the LDC Registration Rights Agreement. "LDC Notice" has the meaning set forth in Section 2.2.1. "LDC Registration Rights Agreement" has the meaning set forth in the recitals to this Agreement. "1933 Act" means the Securities Act of 1933, as amended. "Original Registration Rights Agreement" has the meaning set forth in the recitals to this Agreement. "Permitted Affiliate of the Preferred Stock Investors" means any Affiliate, officer or employee of an Affiliate or investment fund managed by an Affiliate of any Preferred Stock Investor to which any Preferred Stock Investor may transfer record and/or beneficial ownership of the Preferred Stock Investor Shares. "person" means any individual, corporation, limited liability company, firm, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or any other entity or organization, including a government, a governmental body, a political subdivision or an agency or instrumentality thereof. "Piggyback Registration" has the meaning set forth in Section 2.1.1. "Preferred Stock Investors" has the meaning set forth in the recitals to this Agreement, and includes the Series B Investors unless expressly indicated otherwise. "Preferred Stock Investor Demand Notice" has the meaning set forth in Section 2.2.1. "Preferred Stock Investor Demand Registration" has the meaning set forth in Section 2.2.1. "Preferred Stock Investor Holders" has the meaning set forth in Section 2.1.1. "Preferred Stock Investor Notice" has the meanings set forth in Section 2.2.1. Page 35 of __ 36 "Preferred Stock Investor Shares" means the Series B Investor Shares and any shares of Common Stock issued or issuable upon conversion of the Series A Preferred Stock or upon exercise of the Warrants by the Preferred Stock Investors. "Recapitalization" has the meaning set forth in the recitals to this Agreement. "Recapitalization Agreement" has the meaning set forth in the recitals to this Agreement. "Registration" has the meaning set forth in Section 2.3. "Registrable Securities" means (v) any shares of Common Stock issued upon recapitalization of the Series A Preferred Stock and the Warrants pursuant to the Recapitalization, (w) any shares of Common Stock issued or issuable upon conversion or redemption of the Series B Preferred Stock by the Series B Investors and owned by a Series B Investor or a Permitted Affiliate of the Preferred Stock Investors or any other transferee of the foregoing, (x) any shares of Common Stock issued or issuable upon conversion or redemption of the Series A Preferred Stock, if any, by the Preferred Stock Investors and owned by a Preferred Stock Investor or a Permitted Affiliate of the Preferred Stock Investors or any other transferee of the foregoing, (y) any shares of Common Stock issued or issuable upon exercise of the Warrants, if any, and (z) any shares of Common Stock which may be issued or distributed in respect of such shares of Common Stock by way of concession, stock dividend or stock split or other distribution, recapitalization or reclassification, but with respect to such shares of Common Stock, only so long as such shares are "Restricted Securities". A share of Common Stock shall be deemed to be a "Restricted Security" until such time as such share (i) has been effectively registered under the 1933 Act pursuant to a registration statement with respect to the sale of such share and disposed of pursuant to such registration statement, (ii) has been distributed to the public pursuant to Rule 144 (or any similar provision then in force) under the 1933 Act, (iii) has been otherwise transferred, new certificates for it not bearing a legend restricting further transfer having been delivered by the Company and the subsequent disposition of it not requiring registration or qualification of it under the 1933 Act or any state securities or blue sky law then in force or (iv) has ceased to be outstanding. "Request Notice" has the meaning set forth in Section 2.2.1. "Series A Preferred Stock" has the meaning set forth in the recitals to this Agreement. "Series B Investor Shares" means the Common Stock issued upon recapitalization of the Series A Preferred Stock and the Warrants and any shares of Common Stock issued or issuable upon conversion of the Series B Preferred Stock. "Series B Investors" has the meaning set forth in the preamble to this Agreement, and shall include the holders of the Series B Investor Shares. Page 36 of __ 37 "Series B Preferred Stock" means the Company's Series B Convertible Preferred Stock, par value $.01 per share, which Series B Preferred Stock is convertible into shares of Common Stock. "Shelf Registration" has the meaning set forth in Section 2.2.1. "Stock and Warrant Purchase Agreements" has the meaning set forth in the recitals to this Agreement. "Stop Order" has the meaning set forth in Section 2.2.3. "Third Party" has the meaning set forth in Section 2.1.1. "Third Party Registration" has the meaning set forth in Section 2.1.3. "Warrants" shall mean Warrants to purchase shares of Common Stock as more fully set forth in the Stock and Warrant Purchase Agreements. ARTICLE II Registration and Related Rights SECTION 2.1. Company Registration. 2.1.1. Right to Piggyback on Company Registration of Common Stock. Subject to Section 2.1.3, if the Company proposes, on its own initiative or at the request of a party holding rights to demand registrations of the Common Stock other than under the LDC Registration Rights Agreement, the Institutional Investor Registration Rights Agreement or this Agreement (a "Third Party") to register any Common Stock under the 1933 Act in connection with the offering of a primary issuance or, in the case of such Third Party, a secondary issuance, of such Common Stock on any form other than Form S-4 or Form S-8 or any form substituting therefor (except for a registration in connection with an exchange offer of securities solely to existing securityholders of the Company) and such proposal would result in the filing of a registration statement with the Commission in connection therewith at any time, the Company shall at such time promptly give each Preferred Stock Investor, each Permitted Affiliate of the Preferred Stock Investors and any other transferee of the foregoing then owning Registrable Securities (collectively, the "Preferred Stock Investor Holders") written notice of such determination no later than thirty-five (35) days prior to the proposed effectiveness date (such proposed effectiveness date to be specified by the Company in the written notice) of the registration statement to be prepared in connection with such proposed registration. Any Preferred Stock Investor Holder wishing to register all or any portion of such Preferred Stock Investor Holder's Registrable Securities pursuant to such proposed registration (a "Piggyback Registration") must give written notice to the Company of its intent to participate in such proposed registration no later than fifteen (15) days after receipt of the notice delivered by the Company. Subject to the allocations set forth in Section 2.1.3, upon receipt of such written request of any such Preferred Stock Investor Holder, the Company will use its reasonable best efforts to effect the registration under the 1933 Act of all Registrable Securities which the Company has been so requested to register by the Preferred Stock Investor Holders. Any Preferred Stock Investor Holder holding Registrable Securities that has requested Page 37 of __ 38 to be included in such registration may elect, in writing at least five (5) Business Days prior to the effective date of the registration statement filed in connection with such registration, not to register such Registrable Securities in such registration. Selection of Underwriters. If the Company in its sole discretion decides a Piggyback Registration shall be underwritten, the Company shall have sole discretion in the selection of any underwriter or underwriters to manage such Piggyback Registration. Priority on Piggyback Registrations. If the managing underwriter or underwriters of a Piggyback Registration (or in the case of a Piggyback Registration not being underwritten, holders of a majority of the shares of Common Stock proposed to be registered by (x) the Preferred Stock Investor Holders, (y) the LDC Holders pursuant to the LDC Registration Rights Agreement and (z) the Institutional Investors pursuant to the Institutional Investor Registration Rights Agreement) advise the Company in writing that in its or their opinion the number of shares of Common Stock proposed to be sold in such Piggyback Registration (including any shares proposed to be sold by (i) LDC Holders pursuant to the LDC Registration Rights Agreement, (ii) Institutional Investors pursuant to the Institutional Investor Registration Rights Agreement and (iii) Preferred Stock Investor Holders pursuant to this Agreement) exceeds the number which can be sold, or would adversely affect the price at which the Common Stock could be sold in such offering, the Company will include in such Piggyback Registration only that number of shares of Common Stock which, in the opinion of such underwriter or underwriters (or in the case of a Piggyback Registration not being underwritten, holders of a majority of the shares of Common Stock proposed to be registered by the Preferred Stock Investor Holders, the LDC Holders and the Institutional Investors, as the case may be), can be sold in such offering without so affecting such price. The shares of Common Stock to be included in such Piggyback Registration shall be apportioned (a) first, to any shares of Common Stock that the Company proposes to sell, or in the case of a registration at the request of a Third Party (a "Third Party Registration"), to any shares of Common Stock that the Third Party proposes to sell, (b) second, pro rata among any shares of Common Stock proposed to be sold by (x) any LDC Holder pursuant to the LDC Registration Rights Agreement and (y) any Institutional Investor pursuant to the Institutional Investor Registration Rights Agreement, up to a maximum of 40% of the balance of the shares of Common Stock to be included in such Piggyback Registration after subtracting the shares proposed to be sold by the Company, or the Third Party, as the case may be, (c) third, pro rata among any shares of Common Stock proposed to be sold by any Preferred Stock Investor Holder and (d) fourth, pro rata among any other shares of Common Stock proposed to be included in such Piggyback Registration, including, in the case of a Third Party Registration, the Company, and in the case of a primary issuance by the Company, any Third Party, in each case according to the total number of shares of Common Stock requested for inclusion by the Preferred Stock Investor Holders, the LDC Holders and the Institutional Investors, as applicable, or in such other proportions as shall mutually be agreed to among such selling stockholders, as applicable. Notwithstanding the foregoing, after June 30, 2004, the shares of Common Stock to be included in such Piggyback Registration shall be apportioned (I) first, to any shares of Common Stock that the Company proposes to sell, or in the case of a Third Party Registration, to any shares of Common Stock that the Third Party proposes to sell, (II) second, pro rata among any shares of Common Stock proposed to be sold by (A) any Preferred Stock Investor Holder, (B) any LDC Holder pursuant to the LDC Registration Rights Agreement and (C) any Institutional Investor pursuant to the Institutional Investor Registration Rights Agreement and (III) third, pro rata among any other shares of Common Stock proposed to be included in such Page 38 of __ 39 Piggyback Registration, including, in the case of a Third Party Registration, the Company, and in the case of a primary issuance by the Company, any Third Party, in each case according to the total number of shares of Common Stock requested for inclusion by the Preferred Stock Investor Holders, the LDC Holders and the Institutional Investors, as applicable, or in such other proportions as shall mutually be agreed to among such selling stockholders, as applicable. SECTION 2.2. Demand Registration Rights. 2.2.1. Right to Demand. If, at any time on or after June 30, 2004, or at any time in respect of shares of Common Stock issued upon conversion or redemption of the Series B Preferred Stock or the Series A Preferred Stock, any one or more of the Preferred Stock Investor Holders holding Registrable Securities representing five percent (5%) or more in the aggregate of the then outstanding Common Stock (assuming conversion or exercise of all Common Stock Equivalents held by the Preferred Stock Investor Holders into Registrable Securities at the then conversion price or exercise price) submits a written request (a "Request Notice") to the Company for registration with the Commission under and in accordance with the provisions of the 1933 Act of all or part of the Registrable Securities then owned by such Preferred Stock Investor Holder or Preferred Stock Investor Holders (a "Preferred Stock Investor Demand Registration"), the Company shall thereupon, as expeditiously as possible, use its reasonable best efforts to file a registration statement with the Commission and have the registration statement declared effective by the Commission; provided, however, that the number of Registrable Securities as to which such request is made shall represent not less than five percent (5%) of the then outstanding Common Stock and Common Stock Equivalents. The Preferred Stock Investor Holders acknowledge that, within ten (10) days after receipt of such Request Notice, the Company will serve written notice of such registration request to (a) all LDC Holders who hold shares of Common Stock which carry registration rights pursuant to the LDC Registration Rights Agreement (the "LDC Notice"), (b) all Institutional Investors who hold shares of Common Stock which carry registration rights pursuant to the Institutional Investor Registration Rights Agreement (the "Institutional Investor Notice") and (c) all other Preferred Stock Investor Holders (the "Preferred Stock Investor Demand Notice"), and, subject to the pro rata allocations set forth in Section 2.2.4, the Company will include in such Preferred Stock Investor Demand Registration all such shares of Common Stock held by the LDC Holders, Institutional Investors and Preferred Stock Investor Holders with respect to which the Company has received a written request for inclusion therein within twenty (20) days after the giving of the LDC Notice, the Institutional Investor Notice and the Preferred Stock Investor Demand Notice; provided, however, that in the event of a Preferred Stock Investor Demand Registration prior to June 30, 2004, Preferred Stock Investor Holders may only request for inclusion in such Preferred Stock Investor Demand Registration those shares of Common Stock issued upon conversion of the Series B Preferred Stock or the Series A Preferred Stock. Any Preferred Stock Investor Demand Registration representing five percent (5%) or more in the aggregate of the then outstanding Common Stock (assuming conversion or exercise of all Common Stock Equivalents held by the Preferred Stock Investor Holders into Registrable Securities at the then conversion price or exercise price) shall, at the Company's option, be underwritten by one or more underwriters and shall be subject to Section 2.2.2 if such Preferred Stock Investor Holder Demand Registration has not previously been designated an underwritten offering; provided, however, that any Preferred Stock Investor Page 39 of __ 40 Demand Registration exclusively involving shares of Common Stock sold pursuant to block trades need not be underwritten. The LDC Holders and the Institutional Investors have rights to demand registrations under the LDC Registration Rights Agreement and the Institutional Investor Registration Rights Agreement, respectively, similar to those of the Preferred Stock Investor Holders under this Agreement. The Company agrees that it shall, within ten (10) days after receipt of a demand registration request notice from (X) any one or more of the LDC Holders pursuant to the LDC Registration Rights Agreement (an "LDC Demand Registration") or (Y) any one or more of the Institutional Investors pursuant to the Institutional Investor Registration Rights Agreement (an "Institutional Investor Demand Registration") (with the terms "LDC Demand Registration", "Institutional Investor Demand Registration" and "Preferred Stock Investor Demand Registration" being collectively referred to herein as a "Demand Registration"), serve written notice (the "Preferred Stock Investor Notice") of such registration request to all Preferred Stock Investor Holders holding Registrable Securities and, subject to the pro rata allocations set forth in Section 2.2.4, the Company shall include in such LDC Demand Registration or such Institutional Investor Demand Registration, as the case may be, all Registrable Securities held by Preferred Stock Investor Holders with respect to which the Company has received a written request for inclusion therein within twenty (20) days after the giving of the Preferred Stock Investor Notice. Any request by one or more Preferred Stock Investor Holders for inclusion in an LDC Demand Registration or an Institutional Investor Demand Registration shall be deemed to be one (1) of the four (4) Demand Registrations permitted hereunder if (i) such request is in respect of at least 1,000,000 shares of Common Stock and (ii) at least 75% of the shares of Common Stock requested for inclusion by the Preferred Stock Investor Holders are so included. The Company represents that the LDC Holders and the Institutional Investors have agreed to the Preferred Stock Investor Holders' right to participate in LDC Demand Registrations and Institutional Investor Demand Registrations, respectively, on the terms and conditions set forth in this Section 2. All Preferred Stock Investor Holders requesting registration of their Registrable Securities pursuant to this Section 2.2.1 shall specify the aggregate number of Registrable Securities proposed to be registered and the intended methods of disposition thereof. The Preferred Stock Investor Holders shall collectively be entitled to request, or participate in a Preferred Stock Investor Holder request, an Institutional Investor request or an LDC Holder request for, four (4) Demand Registrations (the last of which shall be a shelf registration pursuant to Rule 415 under the 1933 Act to be effective for not less than 180 days (the "Shelf Registration")) pursuant to which a registration statement covering Registrable Securities shall be filed with and declared effective by the Commission, the expenses of which shall be borne by the Company in accordance with Section 2.4, and no more than one (1) Preferred Stock Investor Demand Registration may be requested by any Preferred Stock Investor Holder in any 12-month period; provided, however, that if, following the effective date of any registration statement filed pursuant to a Demand Registration, any Preferred Stock Investor Holder whose Registrable Securities are to be included in such Demand Registration pursuant to this Section 2.2.1 elects, by giving written notice to the Company not later than ninety (90) days after such effective date, not to dispose of its Registrable Securities because of a material adverse change in the business, condition (financial or otherwise), assets or prospects of the Company and its subsidiaries, taken as a whole, or because of a material adverse event with respect to the Company and its Page 40 of __ 41 subsidiaries, taken as a whole, not disclosed in the final prospectus prepared in connection with such Demand Registration, then such Demand Registration shall not count as one (1) of the four (4) Demand Registrations permitted hereunder unless shares of Common Stock representing five percent (5%) or more of the then outstanding Common Stock, including Common Stock Equivalents, are sold pursuant to the registration statement prepared in connection with such Demand Registration within ninety (90) days of the effective date of such registration statement and prior to the occurrence of such material adverse change or event. If at the time of any Request Notice (I) the Company is engaged in a registered public offering as to which the Preferred Stock Investor Holders had the right to include their Registrable Securities, whether as a Piggyback Registration or pursuant to the Preferred Stock Investor Holders' participation rights in respect of an LDC Demand Registration or an Institutional Investor Demand Registration, or which was made on Form S-4 or any successor form, (II) the Company is engaged in any other activity outside of the ordinary course of business, such as a merger, consolidation, recapitalization or acquisition which, in the good faith judgment of the Board, would be materially and adversely affected by the requested registration or (III) the Board makes a good faith determination that the public disclosures required to be made in the requested registration statement would have a material and adverse impact on the business, financial condition or prospects of the Company, the Company may at its option direct that such request be delayed for a period of not more than ninety (90) days, which right to delay may be exercised by the Company only one (1) time in respect of each Preferred Stock Investor Demand Registration. The Company shall have the same rights to piggyback on a Preferred Stock Investor Demand Registration as a Preferred Stock Investor Holder would have in a Piggyback Registration permitted under Section 2.1 subject to the pro rata allocations set forth in Section 2.2.4. 2.2.2. Selection of Underwriters. If a proposed Preferred Stock Investor Demand Registration involves either a firm or best efforts underwritten offering, the Preferred Stock Investor Holder(s) giving the Request Notice with respect to such Preferred Stock Investor Demand Registration shall have the right, subject to approval by the Company (which approval shall not be unreasonably withheld), to select the underwriter or underwriters to manage such Preferred Stock Investor Demand Registration. 2.2.3. Effective Registration Statement. A registration requested pursuant to this Section 2.2 shall not be deemed to have been effected unless the registration statement prepared in connection therewith has become effective; provided, however, that if, within 75 days after such registration statement has become effective (135 days in the case of the Shelf Registration), the offering of Registrable Securities pursuant to such registration statement is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court (collectively, a "Stop Order"), such registration shall be deemed not to have been effected. Notwithstanding the preceding sentence, if any such Stop Order is rescinded, the effective period shall continue upon such rescission and be extended by the number of days by which such Stop Order reduced the effective period. Page 41 of __ 42 2.2.4. Priority on Demand Registrations. If the managing underwriter or underwriters of a Demand Registration initiated under this Agreement, the LDC Registration Rights Agreement or the Institutional Investor Registration Rights Agreement advise the Company in writing that in its or their opinion the number of shares of Common Stock proposed to be sold in such Demand Registration exceeds the number which can be sold, or would adversely affect the price at which the Common Stock could be sold in such offering, the Company will include in such registration only that number of shares of Common Stock which, in the opinion of such underwriter or underwriters, can be sold in such offering without so affecting such price. The shares of Common Stock to be included in such Demand Registration shall be apportioned (x) first, pro rata among (i) shares of Common Stock held by Preferred Stock Investor Holders who have made a request to be included in such Demand Registration, (ii) shares of Common Stock held by LDC Holders who have made a request to be included in such Demand Registration and (iii) shares of Common Stock held by Institutional Investors who have made a request to be included in such Demand Registration, based on the number of shares required to be included in such registration statement, and (y) second, pro rata among any other shares of Common Stock proposed to be included in such Demand Registration, including any shares proposed to be sold by the Company pursuant to such Demand Registration. Notwithstanding the foregoing, the shares of Common Stock to be included in any Demand Registration prior to June 30, 2004 shall be apportioned (a) first, pro rata among any shares of Common Stock proposed to be sold by (x) any LDC Holder pursuant to the LDC Registration Rights Agreement and (y) any Institutional Investor pursuant to the Institutional Investor Registration Rights Agreement, up to a maximum of 40% of the total number of shares of Common Stock to be included in such Demand Registration, (b) second, pro rata among any shares of Common Stock proposed to be sold by any Preferred Stock Investor Holder and (c) third, pro rata among any other shares of Common Stock proposed to be included in such Demand Registration, including any shares proposed to be sold by the Company pursuant to such Demand Registration, in each case according to the total number of shares of Common Stock requested for inclusion by the Preferred Stock Investor Holders, the LDC Holders and the Institutional Investors, as applicable, or in such other proportions as shall mutually be agreed to among such selling stockholders, as applicable. 2.2.5. Approval of LDC Holders and Institutional Investors. As evidenced by the Institutional Investor Registration Rights Agreement and the LDC Registration Rights Agreement, each in the form attached hereto, the Company represents that the Institutional Investors and the LDC Holders have approved the Company's entering into this Agreement and the granting to the Preferred Stock Investor Holders of registration rights in respect of Piggyback Registrations and Demand Registrations on the terms and conditions set forth herein. 2.2.6. Additional Rights. If the Company at any time grants to any other holders of Common Stock or Common Stock Equivalents any rights to request the Company to effect the registration under the 1933 Act of any such shares of Common Stock on terms more favorable to such holders than the terms set forth in this Agreement, the terms of this Agreement shall be deemed amended or supplemented to the extent necessary to provide the Preferred Stock Investor Holders with the same, more favorable terms. The Company shall not grant any other person rights to register securities of the Company on terms which could restrict in any way the ability of the Company fully to perform its obligations to the Preferred Stock Investor Holders pursuant to this Agreement, except for the Institutional Investor Registration Rights Agreement and the Page 42 of __ 43 LDC Registration Rights Agreement and the granting of registration rights in respect of Piggyback Registrations and Demand Registrations to the Institutional Investors and the LDC Holders, respectively, on the respective terms and conditions set forth in such agreements, to which the Preferred Stock Investors hereby consent. SECTION 2.3. Registration Procedures. It shall be a condition precedent to the obligations of the Company and any underwriter or underwriters to take any action pursuant to this Article II that the Preferred Stock Investor Holders requesting inclusion in any Piggyback Registration or Demand Registration (collectively referred to as a "Registration") furnish to the Company such information regarding them, the Registrable Securities held by them, the intended method of disposition of such Registrable Securities, and such agreements regarding indemnification, disposition of such securities and the other matters referred to in this Article II as the Company may reasonably request and as may be required in connection with any action to be taken by the Company or any such underwriter. With respect to any Registration which includes Registrable Securities held by a Preferred Stock Investor Holder, the Company shall, subject to Sections 2.1 and 2.2; 2.3.1. Prepare and file with the Commission a registration statement on the appropriate form prescribed by the Commission within ninety (90) days after the end of the period within which requests for registration may be given to the Company, file with the Commission any necessary amendments to the registration statement with respect to such Registrable Securities and use its reasonable best efforts to cause such registration statement to become effective; provided, however, that at least five (5) business days prior to filing a registration statement and at least three (3) business days prior to the filing of a prospectus or any amendments or supplements to a registration statement or a prospectus, including documents incorporated by reference after the initial filing of the registration statement, the Company shall furnish to the holders of the Registrable Securities covered by such registration statement and the underwriter or underwriters, if any, copies of or drafts of all such documents proposed to be filed, which documents shall be subject to the reasonable review of such holders and underwriters, if any, and the Company shall not file any registration statement or amendment thereto or any prospectus or any supplement thereto or any documents required to be incorporated by reference therein to which the Preferred Stock Investor Holders or the underwriters, if any, shall reasonably object; 2.3.2. Prepare and file with the Commission such amendments and post-effective amendments to such registration statement and any documents required to be incorporated by reference therein as may be necessary to keep the registration statement effective for a period of time as necessary to complete the offering, which period shall be not less than 90 days (or 180 days in the case of the Shelf Registration) (or such shorter period that shall terminate when all Registrable Securities covered by such registration statement have been sold or withdrawn, but not prior to the expiration of the time period referred to in Section 4(3) of the 1933 Act and Rule 174 thereunder, if applicable); cause the prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the 1933 Act (or any successor rule); and comply with the provisions of the 1933 Act applicable to it with respect to the disposition of all Registrable Securities covered by such registration statement during the applicable period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement or supplement to the prospectus; Page 43 of __ 44 2.3.3. Furnish to each such Preferred Stock Investor Holder, without charge, at least one (1) conformed copy of the registration statement and any post-effective amendment thereto, upon request, and such number of copies of the prospectus (including each preliminary prospectus) and any amendments or supplements thereto, and any exhibits or documents incorporated by reference therein as any such Preferred Stock Investor Holder or underwriter or underwriters, if any, may request in order to facilitate the disposition of the securities being sold by any such Preferred Stock Investor Holder (it being understood that the Company consents to the use of the prospectus and any amendment or supplement thereto by any such Preferred Stock Investor Holder covered by the registration statement and the underwriter or underwriters, if any, in connection with the offering and sale of the securities covered by the prospectus or any amendments or supplements thereto); 2.3.4. Immediately notify each such Preferred Stock Investor Holder, at any time when a prospectus relating thereto is required to be delivered under the 1933 Act, when the Company becomes aware of the occurrence of any event as a result of which the prospectus included in such registration statement (as then in effect) contains any untrue statement of material fact or omits to state a material fact necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading and, as promptly as practicable thereafter, prepare and file with the Commission and furnish a supplement or amendment to such prospectus so that, as thereafter delivered to the Preferred Stock Investor Holders (a reasonable number of such amended and supplemented prospectuses having been delivered to the Preferred Stock Investor Holders), such prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 2.3.5. Use its reasonable best efforts to cause all securities included in such registration statement to be listed, by the date of the first sale of securities pursuant to such registration statement, on each national securities exchange or market on which the Common Stock is then listed; 2.3.6. Make every reasonable effort to obtain the withdrawal of any Stop Order suspending the effectiveness of the registration statement at the earliest possible moment; 2.3.7. Subject to the time limitations specified in Section 2.3.2, if requested by the managing underwriter or underwriters or any such Preferred Stock Investor Holder, promptly incorporate in a prospectus supplement or post-effective amendment such information with respect to the offering as the managing underwriter or underwriters or such Preferred Stock Investor Holder reasonably requests to be included therein, including, without limitation, with respect to the number of shares being sold by such Preferred Stock Investor Holder to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and with respect to any term of the underwritten offering of the securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; Page 44 of __ 45 2.3.8. As promptly as practicable after the filing with the Commission of any document which is incorporated by reference into a registration statement, deliver a reasonable number of copies of such document to each such Preferred Stock Investor Holder; 2.3.9. Prior to the date on which the registration statement is declared effective, use its reasonable best efforts to register or qualify, and cooperate with such Preferred Stock Investor Holders, the underwriter or underwriters, if any, and their counsel in connection with the registration or qualification of, the securities covered by the registration statement for offer and sale under the securities or blue sky laws of each state and other jurisdiction of the United States as such Preferred Stock Investor Holders or managing underwriter or underwriters, if any, requests in writing, use its reasonable best efforts to keep each such registration or qualification effective, including through new filings, or amendments or renewals, during the period such registration statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in all such jurisdictions of the Registrable Securities covered by the applicable registration statement; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject; 2.3.10. Enter into such customary agreements (including an underwriting agreement in customary form) and take such other actions customarily taken by registrants, if any, as the Preferred Stock Investor Holders or the underwriters may reasonably request in order to expedite or facilitate the disposition of such Registrable Securities; 2.3.11. Obtain a "comfort" letter or letters from the Company's independent public accountants in customary form and covering matters of the type customarily covered by "comfort" letters as the underwriters, if any, may reasonably request; 2.3.12. Make available for inspection by any Preferred Stock Investor Holder holding Registrable Securities covered by such registration statement, by any underwriter participating in any disposition to be effected pursuant to such registration statement and by any attorney, accountant or other agent retained by any such seller or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors and employees to supply all information reasonably requested by any such Preferred Stock Investor Holder, underwriter, attorney, accountant or agent in connection with such registration statement; 2.3.13. Cooperate with such Preferred Stock Investor Holders and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing securities to be sold under the registration statement, and enable such securities to be in such denominations and registered in such names as the Preferred Stock Investor Holders or the managing underwriter or underwriters, if any, may request; and 2.3.14. Use its reasonable best efforts to cause the securities covered by the registration statement to be registered with or approved by such other governmental agencies or authorities Page 45 of __ 46 within the United States, including, without limitation, the National Association of Securities Dealers, Inc., as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities. The Preferred Stock Investor Holders, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.3.4, shall forthwith discontinue disposition of the securities until the Preferred Stock Investor Holders' receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.3.4 or until they are advised in writing (the "Advice") by the Company that the use of the prospectus may be resumed, and have received copies of any additional or supplemental filings which are incorporated by reference in the prospectus, and, if so directed by the Company, each Preferred Stock Investor Holder shall, or shall request the managing underwriter or underwriters, if any, to, deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such Preferred Stock Investor Holder's possession, of the prospectus covering such securities which is current at the time of receipt of such notice. In the event that the Company gives any such notice, the time periods set forth in Section 2.3.4 shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 2.3.4 or the Advice. SECTION 2.4. Registration Expenses. In the case of any Registration, the Company shall bear all of the costs and expenses of such Registration (including, without limitation, the expenses of preparing any registration statement, Commission and state "blue sky" filings, registration and qualification fees, the cost of providing any legal opinion or "comfort" letters requested by the Preferred Stock Investor Holders and printing costs) and legal fees or expenses of one (1) counsel for the Preferred Stock Investor Holders, the LDC Holders and the Institutional Investors mutually selected by the Preferred Stock Investor Holders, the LDC Holders and the Institutional Investors (such counsel being subject to the reasonable approval of the Company); provided, however, that the Company shall not be responsible for registration or qualification fees or underwriter's discounts or commissions that are attributable to the Registrable Securities of a Preferred Stock Investor Holder. In connection with any Registration, the Company shall be required to obtain independent outside counsel that is sophisticated in securities law matters and that is reasonably satisfactory to a majority of the Preferred Stock Investor Holders that have shares of Common Stock included in such Registration. SECTION 2.5. Indemnification and Contribution. 2.5.1. Indemnification by the Company. The Company agrees to indemnify and hold harmless each Preferred Stock Investor Holder, its officers, directors and agents and each person who controls (within the meaning of the 1933 Act and the Exchange Act) such Preferred Stock Investor Holder against all losses, claims, damages, liabilities and expenses arising out of or based upon any untrue or allegedly untrue statement of a material fact contained in any registration statement, prospectus or preliminary prospectus in which such Preferred Stock Investor Holder is participating or in any document incorporated by reference therein or any omission or alleged omission to state therein a material fact necessary to make the statements therein (in the case of the prospectus or any preliminary prospectus, in light of the circumstances under which they were made) not misleading, except insofar as the same are caused by, based upon or contained in any information with respect to such Preferred Stock Investor Holder furnished in writing to the Company by such Preferred Stock Investor Holder expressly for use therein; provided, however, Page 46 of __ 47 that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any Preferred Stock Investor Holder from whom the person asserting such loss, claim, damage or liability purchased shares of Common Stock if it is determined that it was the responsibility of such Preferred Stock Investor Holder to provide such person with a current copy of the prospectus and such current copy of the prospectus would have cured such loss, claim, damage or liability. The Company shall also indemnify underwriters (as such term is defined in the 1933 Act), their officers and directors and each person who controls such persons (within the meaning of the 1933 Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the Preferred Stock Investor Holders. 2.5.2. Indemnification by Preferred Stock Investors. In connection with any Registration in which a Preferred Stock Investor Holder is participating, such Preferred Stock Investor Holder shall furnish to the Company in writing such information and affidavits with respect to such Preferred Stock Investor Holder as the Company may reasonably request for use in connection with any registration statement or prospectus and the Preferred Stock Investors agree to indemnify and hold harmless the Company, its directors, officers and agents and each person who controls (within the meaning of the 1933 Act and the Exchange Act) the Company against any losses, claims, damages, liabilities and expenses arising out of or based upon any untrue statement of a material fact or any omission to state a material fact necessary to make the statements in the registration statement or prospectus or preliminary prospectus (in the case of the prospectus or preliminary prospectus, in light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information or affidavit with respect to such Preferred Stock Investor Holder furnished in writing to the Company by such Preferred Stock Investor Holder expressly for use therein; provided, however, that the amount recoverable by the Company from the Preferred Stock Investors under this indemnification provision shall not exceed the amount of net proceeds received by all Preferred Stock Investor Holders from the sale of Registrable Securities in connection with any such Registration; and provided further that the indemnity agreement contained in this Section 2.5.2 shall not apply to amounts paid in settlement of any loss, claim, damage, liability or action arising pursuant to a Registration if such settlement is effected without the consent of the Preferred Stock Investors (which consent shall not be unreasonably withheld). Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any of the prospective sellers, or any of their respective Affiliates, directors, officers or controlling persons and shall survive the transfer of such securities by such seller. 2.5.3. Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall (x) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (y) unless in such indemnified party's reasonable judgment a conflict of interest may exist between such indemnified and indemnifying party, permit the indemnifying party to assume the defense of such claim, with counsel reasonably satisfactory to the indemnified party. The failure to so notify the indemnifying party shall relieve the indemnifying party from any liability hereunder with respect to the action to the extent that such failure materially prejudices the indemnifying party. Whether or not such defense is assumed by the indemnifying party, the indemnifying party shall not be subject to any liability for any settlement made without its consent (which consent shall not be unreasonably withheld). No Page 47 of __ 48 indemnifying party shall consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party, a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the reasonable fees and expenses of such additional counsel or counsels. 2.5.4. Contribution. If for any reason the indemnification provided for in the preceding Sections 2.5.1 and 2.5.2 is unavailable to an indemnified party as contemplated by the preceding Sections 2.5.1 and 2.5.2 for any reason, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. Notwithstanding the foregoing, if the indemnifying party is any Preferred Stock Investor Holder, any contribution pursuant to this Section 2.5.4 shall be several and not joint, and shall be limited to the amount of net proceeds received by such Preferred Stock Investor Holder from the sale of Registrable Securities in connection with the applicable Registration. 2.5.5. Other Indemnification. Indemnification similar to that set forth in the preceding subdivisions of this Section 2.5 (with appropriate modifications) shall be given by the Company and the Preferred Stock Investors with respect to any required registration or other qualification of securities under any Federal or state law or regulation or governmental authority other than the 1933 Act. SECTION 2.6. Exchange Act Reports. The Company agrees that it will use its reasonable best efforts to file in a timely manner all reports required to be filed by it pursuant to the Exchange Act to the extent the Company is required to file such reports. Upon request of a Preferred Stock Investor Holder, the Company will furnish the requesting Preferred Stock Investor Holder with such information as may be necessary to enable such Preferred Stock Investor Holder to effect sales pursuant to Rule 144A. SECTION 2.7 Restrictions on Public Sale by Holder of Securities. 2.7.1. Lock-Up Periods for Selling Holders. To the extent not inconsistent with applicable law, any Preferred Stock Investor Holder whose Registrable Securities are included in a Registration relating in whole or in part to an underwritten public offering agrees not to effect any public sale or distribution of the issue being registered or any similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, including a public sale pursuant to Rule 144 under the 1933 Act, during the fourteen (14) days prior to, and during the 180-day period beginning on, the effective date of such registration statement (except as part of such Registration); provided, however, that the foregoing shall only apply if and to the extent requested by the managing underwriter or underwriters. Page 48 of __ 49 2.7.2. Lock-Up Periods During Company Offering. Each Preferred Stock Investor Holder agrees that, in the event the Company files a registration statement under the 1933 Act with respect to an underwritten public offering of any shares of Common Stock or Common Stock Equivalents, such Preferred Stock Investor Holder shall not effect any public sale or distribution of any Common Stock owned by it (other than as part of such underwritten public offering) within seven (7) days prior to, and during the 180-day period beginning on, the effective date of such registration statement and the Company hereby also so agrees and agrees to use its reasonable best efforts to cause, as the managing underwriters may require, each other holder of any equity security, or of any security convertible into or exchangeable or exercisable for any equity security, of the Company purchased from the Company (at any time other than in a public offering) to so agree. SECTION 2.8. Participation in Registrations. No Preferred Stock Investor Holder may participate in any Registration hereunder unless such Preferred Stock Investor Holder (x) agrees to sell such Preferred Stock Investor Holder's securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (y) completes and executes all questionnaires, powers of attorney, underwriting agreements and other documents customarily required under the terms of such underwriting arrangements. SECTION 2.9. Remedies. Each Preferred Stock Investor shall have the right and remedy to have the provisions of Sections 2.1 and 2.2 specifically enforced by any court having jurisdiction in the event that the Company breaches such provisions, and the Company shall reimburse the Preferred Stock Investor for the reasonable costs of the expenses for counsel for the Preferred Stock Investor incurred in connection with such proceeding. ARTICLE III Miscellaneous SECTION 3.1. Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by prepaid telex, cable or telecopy or sent, postage prepaid, by registered, certified or express mail or reputable overnight courier service and shall be deemed given when so delivered by hand, telexed, cabled or telecopied, or if mailed, three (3) days after mailing (one (1) business day in the case of express mail or overnight courier service), as follows: (x) if to the Company, to: TransMontaigne Inc. 370 Seventeenth Street Suite 2750 Denver, Colorado 80202 Phone: (303) 626-8200 Fax: (303) 626-8228 Attention: Erik B. Carlson, Esq. Page 49 of __ 50 with a copy to: Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Phone: (212) 474-1000 Fax: (212) 474-3700 Attention: Kris F. Heinzelman, Esq. (y) If to a Preferred Stock Investor, to the addresses indicated on Schedule 1 to the Recapitalization Agreements. SECTION 3.2. Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement, the other Preferred Stock Investor Holders, if any, and their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein. This Agreement constitutes the entire agreement and understanding, and supersedes and terminates all prior agreements and understandings, both oral and written (including those contained in the letter agreements dated April 17, 2002 between the Company and each Preferred Stock Investor and the Recapitalization Agreements), between the parties hereto relating to the subject matter hereof. SECTION 3.3. Waiver. Any party hereto may, by written notice to any other party (x) extend the time for the performance of any of the obligations or other actions of such other party under this Agreement to the extent that such obligations or other actions are due to the party giving notice; (y) waive compliance with any of the conditions or covenants of such other party contained in this Agreement to the extent that such conditions or covenants relate to the party giving notice; and (z) waive or modify performance of any of the obligations of such other party under this Agreement to the extent that such obligations are due to the party giving notice. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement contained herein. Neither the waiver by any party hereto of a breach of any provision hereof or any preceding or succeeding breach nor the failure by any party to exercise any right or privilege hereunder shall be deemed a waiver of such party's rights or privileges hereunder nor shall it be deemed a waiver of such party's rights to exercise the same at any subsequent time or times hereunder. SECTION 3.4. Amendments. No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by the Company and the holders of two-thirds of the Registrable Securities. Any such amendment, modification or waiver in respect of this Agreement executed by or on behalf of the Preferred Stock Investors shall bind Page 50 of __ 51 each other Preferred Stock Investor Holder, if any, to the terms and conditions thereof. The Company agrees that all holders of Registrable Securities shall be notified by the Company in advance of any proposed amendment, modification or waiver of this Agreement, but failure to give such notice shall not in any way affect the validity of any such amendment, modification or waiver. In addition, promptly after obtaining the written consent of the holders as herein provided, the Company shall transmit a copy of any amendment, modification or waiver which has been adopted to all holders of Registrable Securities then outstanding, but failure to transmit copies shall not in any way affect the validity of any such amendment, modification or waiver. SECTION 3.5. Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by either the Company or any Preferred Stock Investor (other than, in the case of any Preferred Stock Investor, to a Permitted Affiliate of the Preferred Stock Investors in connection with a transfer of a portion of the Preferred Stock Investor Shares), or any transferee of the foregoing. SECTION 3.6. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State. SECTION 3.7. Attorney Fees. A party in breach of this Agreement shall, on demand, indemnify and hold harmless the other parties hereto from and against all reasonable out-of-pocket expenses, including legal fees, incurred by such other parties by reason of the enforcement and protection of their rights under this Agreement. The payment of such expenses is in addition to any other relief to which such other parties may be entitled. SECTION 3.8. Section and Other Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. SECTION 3.9. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties. Page 51 of __ 52 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above. TRANSMONTAIGNE INC. By: ------------------------------ Name: Title: [Registration Rights Agreement Signature Page] Page 52 of __ 53 FIRST RESERVE FUND VII, LIMITED PARTNERSHIP By: FIRST RESERVE GP VII, L.P. its general partner By: FIRST RESERVE CORPORATION its general partner By: -------------------------------- Name: Title: FIRST RESERVE FUND VIII, L.P. By: FIRST RESERVE GP VIII, L.P. its general partner By: FIRST RESERVE CORPORATION its general partner By: -------------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 53 of __ 54 VENCAP HOLDINGS (1987) PTE LTD By: -------------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 54 of __ 55 FLEMING US DISCOVERY FUND III, L.P. By: FLEMING US DISCOVERY PARTNERS, L.P., its general partner By: FLEMING US DISCOVERY, LLC. its general partner By: -------------------------------- Name: Title: FLEMING US DISCOVERY OFFSHORE FUND III, L.P. By: FLEMING US DISCOVERY PARTNERS, L.P., its general partner By: FLEMING US DISCOVERY, LLC. its general partner By: -------------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 55 of __ 56 LAUGHLIN TRUSTEES ET AL FBO RICARD R. OHRSTROM, JR. DTD 12/22/97 By: --------------------------- Name: Title: LAUGHLIN TRUSTEES ET AL FBO KENNETH M. OHRSTROM DTD 12/22/97 By: --------------------------- Name: Title: LAUGHLIN TRUSTEES ET AL FBO GEORGE L. OHRSTROM II DTD 12/22/97 By: --------------------------- Name: Title: LAUGHLIN TRUSTEES ET AL FBO BARNABY A. OHRSTROM DTD 12/22/97 By: --------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 56 of __ 57 CODAN TRUSTEES ET AL FBO CHRISTOPHER F. OHRSTROM DTD 12/22/97 By: --------------------------- Name: Title: CODAN TRUSTEES ET AL FBO MARK J. OHRSTROM DTD 12/22/97 By: --------------------------- Name: Title: CODAN TRUSTEES ET AL FBO ESMOND V. HARMSWORTH DTD 12/22/97 By: --------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 57 of __ 58 YORKTOWN ENERGY PARTNERS III, L.P. By: YORKTOWN III COMPANY, L.L.C., its general partner By: ------------------------------- Name: Title: YORKTOWN PARTNERS, L.L.C., as agent By: ------------------------------- Name: Title: TICONDEROGA E-SERVICES FUND I, LP, By: ------------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 58 of __ 59 CFE, INC. By: ------------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 59 of __ 60 WIEGERS & CO. By: --------------------------- Name: Title: WIEGERS FAMILY FOUNDATION By: --------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 60 of __ 61 VESTAR CAPITAL PARTNERS III, L.P. By: Vestar Associates III, L.P., its general partner By: Vestar Associates Corporation III, its general partner By: --------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 61 of __ 62 CORTLANDT S. DIETLER ---------------------------------- [Registration Rights Agreement Signature Page] Page 62 of __ 63 FRANKLIN W. HOBBS ---------------------------------- [Registration Rights Agreement Signature Page] Page 63 of __ 64 NICHOLAS F. BRADY TRUST By: ------------------------------- Name: Title: [Registration Rights Agreement Signature Page] Page 64 of __ 65 DAVID W. NIEMIEC ---------------------------------- [Registration Rights Agreement Signature Page] Page 65 of __ 66 GEORGE H. WEILER ---------------------------------- [Registration Rights Agreement Signature Page] Page 66 of __ 67 [Form of Institutional Investor Registration Rights Agreement] Page 67 of __ 68 [Form of LDC Registration Rights Agreement] Page 68 of __ EX-99.F 8 d98175a7exv99wf.txt CERTIFICATE OF DESIGNATIONS EXHIBIT F 69 TRANSMONTAIGNE INC. CERTIFICATE OF DESIGNATIONS OF SERIES B CONVERTIBLE PREFERRED STOCK ---------- Pursuant to Section 151(g) of the Delaware General Corporation Law The undersigned officer hereby certifies that: A. He is the duly elected and acting chief executive officer of TRANSMONTAIGNE INC., a Delaware corporation (the "Corporation"). B. On June 27, 2002, the Board of Directors of the Corporation duly adopted resolutions in order to designate the Series B Preferred Stock (as set forth in the resolution below). C. The resolution set forth below has not been modified, altered or amended and is presently in full force and effect. RESOLVED, that pursuant to the authority expressly vested in the Board of Directors of the Corporation by Article 5.3 of the Certificate of Incorporation of the Corporation, the Board of Directors hereby fixes and determines the voting rights, designations, preferences, qualifications, privileges, limitations, restrictions, options, conversion rights and other special and relative rights of a series of the preferred stock, par value $0.01 per share, which shall be designated as Series B Convertible Preferred Stock (the "Series B Preferred Stock"). Certain defined terms used herein are set forth in Section 12 hereof. DESIGNATION. 100,000 SHARES OF PREFERRED STOCK, PAR VALUE $.01 PER SHARE, OF THE CORPORATION ARE HEREBY CONSTITUTED AS A SERIES OF THE PREFERRED STOCK DESIGNATED AS "SERIES B CONVERTIBLE PREFERRED STOCK". DIVIDENDS. (a) CASH DIVIDENDS ON SERIES B PREFERRED STOCK. THE CORPORATION SHALL PAY, WHEN AND AS DECLARED BY THE CORPORATION'S BOARD OF DIRECTORS, TO THE HOLDERS OF THE SERIES B PREFERRED STOCK, OUT OF THE ASSETS OF THE CORPORATION LEGALLY AVAILABLE THEREFOR, CASH DIVIDENDS (SUBJECT TO SECTION 2(a)(ii)(B) HERETO) AT THE TIMES, IN THE AMOUNTS AND WITH SUCH PRIORITIES AS FOLLOWS: (i) DIVIDEND RATE. DIVIDENDS ON SHARES OF SERIES B PREFERRED STOCK WILL BE PAYABLE IN ARREARS IN CASH AT A RATE PER ANNUM EQUAL TO 6% OF THE LIQUIDATION VALUE THEREOF ON THE DIVIDEND PAYMENT DATE. DIVIDENDS Page 69 of __ 70 WILL BE CALCULATED ON THE BASIS OF A 360-DAY YEAR CONSISTING OF TWELVE MONTHS OF 30 DAYS EACH IN A YEAR. (ii) ACCRUAL AND PAYMENT OF DIVIDENDS. (A) Dividends on each share of Series B Preferred Stock shall accrue cumulatively on a daily basis commencing July 1, 2002 (or, if such share is issued after July 1, 2002, from the issue date of such share, as determined in accordance with Section 2(a)(iv)) to the date on which the redemption or conversion of such share of Series B Preferred Stock shall have been effected, whether or not such dividends have been declared and whether or not there shall be (at the time such dividends became or become payable or any other time) profits, surpluses or other funds of the Corporation legally available for the payment of dividends. Dividends will be calculated with respect to each Dividend Period. A "Dividend Period" means a three (3) month period commencing on January 1, April 1, July 1 and October 1 of each year and ending on the corresponding Record Date. (B) In the event that the Corporation is legally prohibited or restricted from paying dividends on the Series B Preferred Stock in full in cash, such dividends shall be paid, solely to the extent of the prohibition or restriction, by the distribution to the holders of the Series B Preferred Stock of additional shares of Series B Preferred Stock ("Additional Preferred Shares"). The number of Additional Preferred Shares issued in lieu of cash dividends pursuant to the preceding sentence shall be determined by dividing (1) the amount in cash that was payable on the Dividend Payment Date (in accordance with Section 2(a)) but not paid by (2) the Liquidation Value of such Additional Preferred Shares. PAYMENT DATES. FULL CUMULATIVE DIVIDENDS ON SHARES OF SERIES B PREFERRED STOCK FOR A DIVIDEND PERIOD SHALL BE PAYABLE QUARTERLY, ON THE FIFTEENTH (15TH) DAY OF FEBRUARY, MAY, AUGUST AND NOVEMBER IN EACH YEAR (EACH, A "DIVIDEND PAYMENT DATE") FOLLOWING THE END OF SUCH DIVIDEND PERIOD; PROVIDED, HOWEVER, SUCH SHARES REMAIN OUTSTANDING AND HAVE NOT BEEN CONVERTED PRIOR TO SUCH DIVIDEND PAYMENT DATE. THE FIRST DIVIDEND PAYMENT DATE SHALL BE NOVEMBER 15, 2002. IF ANY DIVIDEND PAYMENT DATE SHALL BE ON A DAY OTHER THAN A BUSINESS DAY, THEN THE DIVIDEND PAYMENT DATE SHALL BE ON THE NEXT SUCCEEDING BUSINESS DAY. AN AMOUNT EQUAL TO THE FULL CUMULATIVE DIVIDENDS SHALL ALSO BE PAYABLE, IN SATISFACTION OF SUCH DIVIDEND OBLIGATION, UPON LIQUIDATION AS PROVIDED UNDER SECTION 3 HEREOF, AND UPON REDEMPTION AS PROVIDED UNDER SECTION 6 HEREOF. THE RECORD DATES FOR THE DETERMINATION OF HOLDERS OF SHARES OF SERIES B PREFERRED STOCK ENTITLED TO RECEIVE PAYMENT OF THE DIVIDENDS PAYABLE PURSUANT TO THIS SECTION 2 SHALL BE THE LAST DAY OF MARCH, JUNE, SEPTEMBER AND DECEMBER IN EACH YEAR (EACH, A "RECORD DATE") PRECEDING THE RELATED DIVIDEND PAYMENT DATE. THE FIRST RECORD DATE SHALL BE SEPTEMBER 30, 2002. AMOUNTS PAYABLE. THE AMOUNT OF DIVIDENDS PAYABLE ON SERIES B PREFERRED STOCK ON EACH DIVIDEND PAYMENT DATE SHALL BE THE FULL CUMULATIVE DIVIDENDS WHICH ARE UNPAID THROUGH AND INCLUDING THE PRECEDING RECORD DATE. THE ISSUE DATE OF ANY ADDITIONAL PREFERRED SHARES PAID AS DIVIDENDS PURSUANT TO SECTION 2(A)(II) WILL BE THE RELEVANT RECORD DATE. DIVIDENDS THAT ARE NOT PAID FOR ANY REASON Page 70 of __ 71 WHATSOEVER ON A DIVIDEND PAYMENT DATE SHALL CUMULATE AT A RATE PER ANNUM EQUAL TO 12% OF THE LIQUIDATION VALUE FROM THE RECORD DATE IMMEDIATELY PRECEDING THE DIVIDEND PAYMENT DATE ON WHICH SUCH DIVIDENDS WERE PAYABLE UNTIL THE NEXT RECORD DATE IMMEDIATELY PRECEDING THE DIVIDEND PAYMENT DATE ON WHICH PAYMENT IS MADE (OR UPON LIQUIDATION OR REDEMPTION AS PROVIDED HEREIN) AND SHALL BE PAYABLE ON SUCH DIVIDEND PAYMENT DATE. HOLDERS OF SHARES OF SERIES B PREFERRED STOCK CALLED FOR REDEMPTION ON A REDEMPTION DATE FALLING BETWEEN THE CLOSE OF BUSINESS ON A RECORD DATE AND THE OPENING OF BUSINESS ON THE CORRESPONDING DIVIDEND PAYMENT DATE SHALL, IN LIEU OF BEING ENTITLED TO RECEIVE SUCH DIVIDEND PAYMENT ON THE DIVIDEND PAYMENT DATE FIXED THEREFOR, BE ENTITLED TO RECEIVE AN AMOUNT EQUAL TO SUCH DIVIDEND PAYMENT (CONSISTING OF ALL ACCUMULATED AND UNPAID DIVIDENDS THROUGH THE REDEMPTION DATE) ON THE DATE FIXED FOR REDEMPTION AS PART OF THE REDEMPTION PRICE AS PROVIDED IN SECTION 6(A) HERETO. HOLDERS OF SHARES OF SERIES B PREFERRED STOCK CONVERTED ON A DATE FALLING BETWEEN THE CLOSE OF BUSINESS ON A RECORD DATE AND THE OPENING OF BUSINESS ON THE CORRESPONDING DIVIDEND PAYMENT DATE SHALL NOT BE ENTITLED TO RECEIVE THE DIVIDEND PAYMENT ON SUCH DIVIDEND PAYMENT DATE, BUT SHALL INSTEAD BE PAID AS SPECIFIED IN SECTION 5(A) HERETO. IF FOR WHATEVER REASON ALL PAYMENTS HAVE NOT BEEN MADE WITH RESPECT TO ANY SHARE OF SERIES B PREFERRED STOCK AS REQUIRED BY SECTION 3 ON A DISTRIBUTION DATE OR ALL PAYMENTS HAVE NOT BEEN MADE WITH RESPECT TO ANY SHARE OF SERIES B PREFERRED STOCK AS REQUIRED BY SECTION 6 ON A REDEMPTION DATE (OTHER THAN BECAUSE OF A FAILURE BY THE HOLDER THEREOF TO TENDER SUCH SHARES FOR PAYMENT ON SUCH DATE), THEN, NOTWITHSTANDING ANY OTHER PROVISIONS HEREOF, DIVIDENDS SHALL CONTINUE TO ACCUMULATE ON SUCH OUTSTANDING SHARES UNTIL PAID. WITHHOLDING. (A) THE CORPORATION SHALL HAVE THE RIGHT TO REQUEST THAT EACH HOLDER OF SERIES B PREFERRED STOCK PROVIDE TO THE CORPORATION A PROPERLY EXECUTED AND UPDATED FORM W-9, FORM W-8BEN, FORM W-8ECI OR FORM W-8EXP, AS APPLICABLE, UPON WHICH THE CORPORATION MAY RELY IN SATISFYING ITS WITHHOLDING OBLIGATIONS WITH RESPECT TO THE SERIES B PREFERRED STOCK. (B) THE CORPORATION SHALL WITHHOLD FROM DIVIDENDS PAID ON THE SERIES B PREFERRED STOCK ANY AMOUNTS REQUIRED TO BE WITHHELD BY LAW. IN THE EVENT THAT ANY DIVIDENDS PAID IN THE FORM OF ADDITIONAL PREFERRED SHARES ARE SUBJECT TO WITHHOLDING, THE CORPORATION SHALL SATISFY ITS WITHHOLDING OBLIGATION BY EITHER (I) REQUIRING THE HOLDERS OF THE SERIES B PREFERRED STOCK TO PAY THE CORPORATION A CASH AMOUNT EQUAL TO THE CORPORATION'S WITHHOLDING OBLIGATION WITH RESPECT TO THE ADDITIONAL PREFERRED SHARE DIVIDEND OR (II) THE CORPORATION SHALL REDUCE THE NUMBER OF ADDITIONAL PREFERRED SHARES THAT THE CORPORATION DELIVERS TO THE HOLDER PURSUANT TO SECTION 2(A)(II)(B) OF THIS AGREEMENT BY THE NUMBER OF ADDITIONAL PREFERRED SHARES THAT HAVE AN AGGREGATE VALUE EQUAL TO THE AMOUNT OF THE WITHHOLDING OBLIGATION. FOR PURPOSES OF SATISFYING THE CORPORATION'S WITHHOLDING OBLIGATION PURSUANT TO THIS SECTION 2(A)(V), THE VALUE OF EACH ADDITIONAL PREFERRED SHARE SHALL BE DEEMED TO EQUAL THE LIQUIDATION VALUE OF SUCH ADDITIONAL PREFERRED SHARE. Page 71 of __ 72 (C) IN THE EVENT THAT ANY ADJUSTMENT OF CONVERSION PRICE UNDER SECTION 5(D) GIVES RISE TO A DEEMED DIVIDEND FOR U.S. FEDERAL INCOME TAX PURPOSES, THE CORPORATION SHALL WITHHOLD FROM AMOUNTS ACTUALLY PAID ON THE SERIES B PREFERRED STOCK ANY AMOUNT NECESSARY FOR THE CORPORATION TO SATISFY ITS WITHHOLDING OBLIGATION WITH RESPECT TO SUCH DEEMED DIVIDEND. DIVIDENDS ON COMMON STOCK. IN THE EVENT THAT (i) THE CORPORATION SHALL AT ANY TIME OR FROM TIME TO TIME DECLARE, ORDER, PAY OR MAKE A DIVIDEND OR OTHER DISTRIBUTION (WHETHER IN CASH, SECURITIES, RIGHTS TO PURCHASE SECURITIES OR OTHER PROPERTY) ON ITS COMMON STOCK AND (ii) SUCH DIVIDEND OR OTHER DISTRIBUTION EXCEEDS ON A PER SHARE COMMON STOCK EQUIVALENT BASIS THE AMOUNT PAYABLE ON A SHARE OF SERIES B PREFERRED STOCK ON THE DIVIDEND PAYMENT DATE IMMEDIATELY FOLLOWING THE DECLARATION OF SUCH DIVIDEND OR OTHER DISTRIBUTION ON THE COMMON STOCK, THE HOLDERS OF THE SERIES B PREFERRED STOCK SHALL RECEIVE, IN LIEU OF THE DIVIDEND PAYABLE UNDER SECTION 2(a) ON SUCH DIVIDEND PAYMENT DATE, FROM THE CORPORATION, WITH RESPECT TO EACH SHARE OF SERIES B PREFERRED STOCK HELD, A DIVIDEND OR DISTRIBUTION THAT IS THE SAME DIVIDEND OR DISTRIBUTION THAT WOULD BE RECEIVED BY A HOLDER OF THE NUMBER OF SHARES OF COMMON STOCK INTO WHICH SUCH SHARE OF SERIES B PREFERRED STOCK IS CONVERTIBLE PURSUANT TO THE PROVISIONS OF SECTION 5 HEREOF ON THE RECORD DATE FOR SUCH DIVIDEND OR DISTRIBUTION WITH RESPECT TO COMMON STOCK; PROVIDED, HOWEVER, THAT IF SUCH DIVIDEND OR DISTRIBUTION ON THE COMMON STOCK WOULD HAVE RESULTED IN AN ADJUSTMENT TO THE CONVERSION PRICE PURSUANT TO SECTION 5(d)(i) (BUT FOR THE LAST SENTENCE OF SECTION 5(d)(i)), THE CORPORATION SHALL ALSO PAY TO THE HOLDERS OF THE SERIES B PREFERRED STOCK THE DIVIDEND PAYABLE UNDER SECTION 2(a) ON SUCH DIVIDEND PAYMENT DATE. ANY SUCH DIVIDEND OR DISTRIBUTION SHALL BE DECLARED, ORDERED, PAID OR MADE ON THE SERIES B PREFERRED STOCK AT THE SAME TIME SUCH DIVIDEND OR DISTRIBUTION IS DECLARED, ORDERED, PAID OR MADE ON THE COMMON STOCK. LIMITATION ON DIVIDENDS, REPURCHASES AND REDEMPTIONS. SO LONG AS ANY SHARE OF SERIES B PREFERRED STOCK SHALL BE OUTSTANDING, THE CORPORATION SHALL NOT DECLARE OR PAY OR SET APART FOR PAYMENT ANY DIVIDENDS OR MAKE ANY OTHER DISTRIBUTIONS ON ANY JUNIOR SECURITIES, WHETHER IN CASH, SECURITIES, RIGHTS TO PURCHASE SECURITIES OR OTHER PROPERTY (OTHER THAN DIVIDENDS OR DISTRIBUTIONS PAYABLE IN SHARES OF THE CLASS OR SERIES UPON WHICH SUCH DIVIDENDS OR DISTRIBUTIONS ARE DECLARED OR PAID), NOR SHALL THE CORPORATION OR ANY OF ITS SUBSIDIARIES PURCHASE, REDEEM OR OTHERWISE ACQUIRE FOR ANY CONSIDERATION OR MAKE PAYMENT ON ACCOUNT OF THE PURCHASE, REDEMPTION OR OTHER RETIREMENT OF ANY PARITY SECURITIES OR JUNIOR SECURITIES, NOR SHALL ANY MONIES BE PAID OR MADE AVAILABLE FOR A SINKING FUND FOR THE PURCHASE OR REDEMPTION OF ANY PARITY SECURITIES OR JUNIOR SECURITIES, UNLESS WITH RESPECT TO ALL OF THE FOREGOING ALL DIVIDENDS OR OTHER DISTRIBUTIONS TO WHICH THE HOLDERS OF SERIES B PREFERRED STOCK SHALL HAVE BEEN ENTITLED, PURSUANT TO SECTION 2(a) HEREOF, SHALL HAVE BEEN PAID OR DECLARED; PROVIDED, HOWEVER, THAT THE CORPORATION MAY ONLY DECLARE, PAY OR SET APART FOR PAYMENT CASH DIVIDENDS, OR MAKE ANY OTHER DISTRIBUTIONS IN CASH (INCLUDING ANY PURCHASE, REDEMPTION OR ACQUISITION OF ANY JUNIOR SECURITIES), ON ANY JUNIOR SECURITIES ON ANY PAYMENT DATE, OR IN RESPECT OF ANY RECORD DATE THEREFOR, IF THE DIVIDENDS PAYABLE TO THE Page 72 of __ 73 HOLDERS OF SERIES B PREFERRED STOCK ON A DIVIDEND PAYMENT DATE RELATING TO THE RECORD DATE IMMEDIATELY PRECEDING SUCH CASH PAYMENT OR DISTRIBUTION (INCLUDING ANY PURCHASE, REDEMPTION OR ACQUISITION) HAVE BEEN PAID IN CASH, OR HAVE BEEN DECLARED AND A SUM OF CASH HAS BEEN SET APART FOR THE FULL PAYMENT THEREOF; PROVIDED, FURTHER, THAT THE CORPORATION SHALL NOT MAKE ANY SUCH CASH PAYMENT OR DISTRIBUTION (INCLUDING ANY PURCHASE, REDEMPTION OR ACQUISITION) IN RESPECT OF ANY JUNIOR SECURITIES IN EXCESS OF $10 MILLION DURING ANY TWELVE (12) MONTH PERIOD WITHOUT THE WRITTEN CONSENT OF HOLDERS OF TWO-THIRDS OF THE THEN OUTSTANDING SHARES OF SERIES B PREFERRED STOCK. IN NO EVENT SHALL THE COMPANY MAKE ANY CASH PAYMENT OR DISTRIBUTION (INCLUDING ANY PURCHASE, REDEMPTION OR ACQUISITION) IN RESPECT OF JUNIOR SECURITIES THAT WOULD, ON A PRO FORMA BASIS, RESULT IN THE CORPORATION'S BEING PROHIBITED FROM PAYING CASH DIVIDENDS ON THE SERIES B PREFERRED STOCK UNDER THE TERMS OF THE CREDIT AGREEMENT OR ANY OTHER AGREEMENT. PRO RATA PAYMENTS. IN THE EVENT THAT FULL DIVIDENDS ARE NOT PAID OR MADE AVAILABLE TO THE HOLDERS OF ALL OUTSTANDING SHARES OF SERIES B PREFERRED STOCK AND OF ANY PARITY SECURITIES AND FUNDS AVAILABLE FOR PAYMENT OF DIVIDENDS SHALL BE INSUFFICIENT TO PERMIT PAYMENT IN FULL TO HOLDERS OF ALL SUCH STOCK OF THE FULL PREFERENTIAL AMOUNTS TO WHICH THEY ARE THEN ENTITLED, THEN THE ENTIRE AMOUNT AVAILABLE FOR PAYMENT OF DIVIDENDS SHALL BE DISTRIBUTED RATABLY AMONG ALL SUCH HOLDERS OF SERIES B PREFERRED STOCK AND OF ANY PARITY SECURITIES IN PROPORTION TO THE FULL AMOUNT TO WHICH THEY WOULD OTHERWISE BE RESPECTIVELY ENTITLED. PREFERENCE ON LIQUIDATION. (a) LIQUIDATION PREFERENCE FOR SERIES B PREFERRED STOCK. IN THE EVENT THAT THE CORPORATION SHALL LIQUIDATE, DISSOLVE OR WIND UP, WHETHER VOLUNTARILY OR INVOLUNTARILY, NO DISTRIBUTION SHALL BE MADE TO THE HOLDERS OF SHARES OF COMMON STOCK OR OTHER JUNIOR SECURITIES (AND NO MONIES SHALL BE SET APART FOR SUCH PURPOSE) UNLESS, PRIOR THERETO, THE HOLDERS OF SHARES OF SERIES B PREFERRED STOCK SHALL HAVE RECEIVED AN AMOUNT PER SHARE EQUAL TO THE GREATER OF (i) THE SUM OF (x) THE LIQUIDATION VALUE, PLUS (y) ALL ACCRUED BUT UNPAID DIVIDENDS THEREON THROUGH THE DATE OF DISTRIBUTION AND (ii) THE RATABLE DISTRIBUTIONS DETERMINED WITH RESPECT TO THE HOLDERS OF SERIES B PREFERRED STOCK, ANY OTHER SECURITIES CONVERTIBLE INTO, EXCHANGEABLE FOR OR EXERCISABLE FOR COMMON STOCK AND COMMON STOCK ON THE BASIS OF THE NUMBER OF SHARES OF COMMON STOCK INTO WHICH SUCH SERIES B PREFERRED STOCK COULD BE CONVERTED PURSUANT TO THE PROVISIONS OF SECTION 5 HEREOF IMMEDIATELY PRIOR TO SUCH DISTRIBUTION (THE GREATER OF (i) AND (ii) ABOVE IS HEREIN REFERRED TO AS THE "SERIES B LIQUIDATION PREFERENCE"). THE "LIQUIDATION VALUE" MEANS $1,000 PER SHARE WITH RESPECT TO THE SERIES B PREFERRED STOCK. PRO RATA PAYMENTS. IF, UPON ANY SUCH LIQUIDATION, DISSOLUTION OR OTHER WINDING UP OF THE AFFAIRS OF THE CORPORATION, THE ASSETS OF THE CORPORATION SHALL BE INSUFFICIENT TO PERMIT THE PAYMENT IN FULL OF THE SERIES B LIQUIDATION PREFERENCE FOR EACH SHARE OF SERIES B PREFERRED STOCK THEN OUTSTANDING AND THE FULL LIQUIDATING PAYMENTS ON ALL PARITY SECURITIES, THEN THE ASSETS OF THE CORPORATION REMAINING SHALL BE RATABLY DISTRIBUTED AMONG THE HOLDERS OF SERIES B PREFERRED Page 73 of __ 74 STOCK AND OF ANY PARITY SECURITIES IN PROPORTION TO THE FULL AMOUNTS TO WHICH THEY WOULD OTHERWISE BE RESPECTIVELY ENTITLED IF ALL AMOUNTS THEREON WERE PAID IN FULL. SALE NOT A LIQUIDATION. NEITHER THE VOLUNTARY SALE, CONVEYANCE, EXCHANGE OR TRANSFER (FOR CASH, SHARES OF STOCK, SECURITIES OR OTHER CONSIDERATION) OF ALL OR SUBSTANTIALLY ALL THE PROPERTY OR ASSETS OF THE CORPORATION NOR THE CONSOLIDATION, MERGER OR OTHER BUSINESS COMBINATION OF THE CORPORATION WITH OR INTO ONE OR MORE CORPORATIONS SHALL BE DEEMED TO BE A LIQUIDATION, DISSOLUTION OR WINDING-UP, VOLUNTARY OR INVOLUNTARY, OF THE CORPORATION. NOTICE OF LIQUIDATION. WRITTEN NOTICE OF ANY LIQUIDATION, DISSOLUTION OR WINDING UP OF THE CORPORATION, STATING THE PAYMENT DATE OR DATES WHEN AND THE PLACE OR PLACES WHERE AMOUNTS DISTRIBUTABLE IN SUCH CIRCUMSTANCES SHALL BE PAYABLE, SHALL BE GIVEN BY FIRST-CLASS MAIL, POSTAGE PREPAID, NOT LESS THAN THIRTY (30) CALENDAR DAYS PRIOR TO ANY PAYMENT DATE SPECIFIED THEREIN, TO THE HOLDERS OF RECORD OF THE SERIES B PREFERRED STOCK AT THEIR RESPECTIVE ADDRESSES AS SHALL APPEAR ON THE RECORDS OF THE CORPORATION. VOTING RIGHTS. RIGHT TO VOTE. THE HOLDERS OF RECORD OF SHARES OF SERIES B PREFERRED STOCK SHALL VOTE TOGETHER WITH THE HOLDERS OF RECORD OF SHARES OF COMMON STOCK AND THE HOLDERS OF RECORD OF SHARES OF SERIES A PREFERRED STOCK AS A SINGLE CLASS ON ALL ACTIONS TO BE VOTED ON BY THE STOCKHOLDERS OF THE CORPORATION, OTHER THAN THE ELECTION OF DIRECTORS. COMPUTATION. WHEN VOTING TOGETHER WITH THE COMMON STOCK AND THE SERIES A PREFERRED STOCK, EACH SHARE OF SERIES B PREFERRED STOCK SHALL ENTITLE THE HOLDER THEREOF TO SUCH NUMBER OF VOTES PER SHARE ON EACH SUCH ACTION AS SHALL EQUAL THE NUMBER OF SHARES OF COMMON STOCK (EXCLUDING FRACTIONS OF A SHARE) INTO WHICH EACH SHARE OF SERIES B PREFERRED STOCK IS CONVERTIBLE ON THE RECORD DATE FOR SUCH STOCKHOLDER VOTE. THE HOLDERS OF SERIES B PREFERRED STOCK SHALL BE ENTITLED TO NOTICE OF ANY STOCKHOLDER'S MEETING IN ACCORDANCE WITH THE BY-LAWS OF THE CORPORATION. CONVERSION. THE HOLDERS OF SHARES OF SERIES B PREFERRED STOCK SHALL HAVE THE RIGHT TO CONVERT ALL OR A PORTION OF SUCH SHARES TO FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK AS FOLLOWS: (a) RIGHT TO CONVERT. SUBJECT TO AND UPON COMPLIANCE WITH THE PROVISIONS OF THIS SECTION 5, A HOLDER OF SHARES OF SERIES B PREFERRED STOCK SHALL HAVE THE RIGHT, AT THE OPTION OF SUCH HOLDER, AT ANY TIME, TO CONVERT ANY OR ALL OF SUCH SHARES INTO THE NUMBER OF FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK (CALCULATED AS TO EACH CONVERSION ROUNDED DOWN TO THE NEAREST 1/100TH OF A SHARE) OBTAINED BY DIVIDING (x) THE AGGREGATE LIQUIDATION VALUE OF THE SHARES TO BE CONVERTED BY (y) THE CONVERSION PRICE AND BY SURRENDER OF SUCH SHARES, SUCH SURRENDER TO BE MADE IN THE MANNER PROVIDED IN PARAGRAPH (b) OF THIS SECTION 5; PROVIDED, HOWEVER, THAT NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, AT THE CORPORATION'S OPTION AND WITH THE CONSENT OF (A) THE HOLDER OF THE Page 74 of __ 75 SHARES OF SERIES B PREFERRED STOCK SUBMITTED FOR CONVERSION AND (B) THE HOLDERS OF TWO-THIRDS OF THE THEN OUTSTANDING SHARES OF SERIES B PREFERRED STOCK, IN LIEU OF ISSUING COMMON STOCK TO SUCH HOLDER UPON SUCH CONVERSION OF ANY PORTION OF THE SURRENDERED SHARES, THE CORPORATION MAY DELIVER TO SUCH HOLDER CASH EQUAL TO THE FAIR MARKET VALUE MULTIPLIED BY THE NUMBER OF SHARES OF COMMON STOCK INTO WHICH SUCH CONVERTED SHARES OF SERIES B PREFERRED STOCK WOULD HAVE BEEN CONVERTED. ALL ACCRUED BUT UNPAID DIVIDENDS ON THE SHARES OF SERIES B PREFERRED STOCK BEING CONVERTED, THROUGH AND INCLUDING THE CONVERSION DATE, SHALL BE PAYABLE IN EITHER (i) CASH OR (ii) THE NUMBER OF SHARES OF COMMON STOCK EQUAL TO THE AMOUNT OF SUCH ACCRUED BUT UNPAID DIVIDENDS DIVIDED BY THE FAIR MARKET VALUE, AT THE OPTION OF THE CORPORATION. THE COMMON STOCK ISSUABLE UPON CONVERSION OF THE SHARES OF SERIES B PREFERRED STOCK, WHEN SUCH COMMON STOCK SHALL BE ISSUED IN ACCORDANCE WITH THE TERMS HEREOF, IS HEREBY DECLARED TO BE AND SHALL BE DULY AUTHORIZED, VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE COMMON STOCK. MECHANICS OF CONVERSION. EACH HOLDER OF SERIES B PREFERRED STOCK THAT DESIRES TO CONVERT THE SAME SHALL SURRENDER THE CERTIFICATE OR CERTIFICATES THEREFOR, DULY ENDORSED, AT THE PRINCIPAL OFFICE OF THE CORPORATION OR OF ANY TRANSFER AGENT FOR THE SERIES B PREFERRED STOCK, ACCOMPANIED BY (A) WRITTEN NOTICE TO THE CORPORATION (x) STATING THEREIN THAT SUCH HOLDER ELECTS TO CONVERT THE SAME AND (y) STATING THEREIN THE NUMBER OF SHARES OF SERIES B PREFERRED STOCK BEING CONVERTED, AND (z) IF THE NAME OR NAMES IN WHICH SUCH HOLDER WISHES THE CERTIFICATE OR CERTIFICATES FOR SHARES OF COMMON STOCK (IF ANY) TO BE ISSUED SHALL BE DIFFERENT THAN THAT OF SUCH HOLDER, SETTING FORTH SUCH NAME OR NAMES, AND (B) IN THE CASE OF SUBSECTION (A)(z) OF THIS SECTION 5(b), A MEDALLION GUARANTEE OF SIGNATURE AND AN EXECUTED AND CERTIFIED CORPORATE RESOLUTION AUTHORIZING THE ISSUANCE IN SUCH NAME OR NAMES IN THE CASE OF ANY HOLDER THAT IS NOT A NATURAL PERSON, (THE DATE OF RECEIPT OF SUCH SURRENDER AND NOTICE BEING HEREIN CALLED THE "CONVERSION DATE"). THEREUPON, TO THE EXTENT SUCH CONVERSION ENTITLES THE HOLDER TO RECEIVE SHARES OF COMMON STOCK, THE CORPORATION SHALL ISSUE AND DELIVER AT SUCH OFFICE ON THE FIFTH (5TH) SUCCEEDING BUSINESS DAY AFTER A COMPLETE NOTICE (INCLUDING ANY REQUIRED ACCOMPANYING RESOLUTIONS) AND A PROPERLY ENDORSED CERTIFICATE OR CERTIFICATES HAVE BEEN DELIVERED PURSUANT TO THIS SECTION 5(b) (UNLESS SUCH CONVERSION IS IN CONNECTION WITH AN UNDERWRITTEN PUBLIC OFFERING OF COMMON STOCK, IN WHICH EVENT CONCURRENTLY WITH SUCH CONVERSION OR UNLESS THE HOLDER HAS CONSENTED TO A CONVERSION IN CASH BUT THE REQUISITE CONSENTS ARE NOT OBTAINED, IN WHICH EVENT ON THE FIFTEENTH (15TH) SUCCEEDING BUSINESS DAY) TO SUCH HOLDER OR ON SUCH HOLDER'S WRITTEN ORDER, (i) A CERTIFICATE OR CERTIFICATES FOR THE NUMBER OF VALIDLY ISSUED, FULLY PAID AND NONASSESSABLE FULL SHARES OF COMMON STOCK TO WHICH SUCH HOLDER IS ENTITLED AND (II) IF LESS THAN THE FULL NUMBER OF SHARES OF SERIES B PREFERRED STOCK EVIDENCED BY THE SURRENDERED CERTIFICATE OR CERTIFICATES ARE BEING CONVERTED, A NEW CERTIFICATE OR CERTIFICATES, OF LIKE TENOR, FOR THE NUMBER OF SHARES EVIDENCED BY SUCH SURRENDERED CERTIFICATE OR CERTIFICATES LESS THE NUMBER OF SHARES CONVERTED. ANY CASH PAYMENT MADE BY THE CORPORATION IN RESPECT OF A Page 75 of __ 76 CONVERSION SHALL BE PAID ON THE BUSINESS DAY FOLLOWING THE DAY ON WHICH THE REQUISITE CONSENTS HAVE BEEN OBTAINED. Each conversion shall be deemed to have been effected immediately prior to the close of business on the Conversion Date with respect to the shares to be converted (except that if such conversion is in connection with an underwritten public offering of Common Stock, then such conversion shall be deemed to have been effected upon such surrender) so that the rights of the holder thereof as to the shares being converted shall cease at such time except for the right to receive shares of Common Stock or cash, as applicable, and the person receiving shares of Common Stock upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock at such time. CONDITIONAL CONVERSION. NOTWITHSTANDING ANY OTHER PROVISION HEREOF, IF CONVERSION OF ANY SHARES OF SERIES B PREFERRED STOCK IS TO BE MADE IN CONNECTION WITH A PUBLIC OFFERING OF COMMON STOCK OR ANY TRANSACTION DESCRIBED IN SECTION 5(d)(iii) HEREOF, THE CONVERSION OF ANY SHARES OF SERIES B PREFERRED STOCK MAY, AT THE ELECTION OF THE HOLDER THEREOF, BE CONDITIONED UPON THE CONSUMMATION OF THE PUBLIC OFFERING OR SUCH TRANSACTION, IN WHICH CASE SUCH CONVERSION SHALL NOT BE DEEMED TO BE EFFECTIVE UNTIL THE CONSUMMATION OF SUCH PUBLIC OFFERING OR TRANSACTION. ADJUSTMENT OF THE CONVERSION PRICE. THE CONVERSION PRICE SHALL BE ADJUSTED FROM TIME TO TIME AS FOLLOWS: (i) ADJUSTMENT FOR STOCK DIVIDENDS, SPLITS AND COMBINATIONS. IF THE CORPORATION AT ANY TIME OR FROM TIME TO TIME AFTER THE ISSUE DATE, PAYS A STOCK DIVIDEND IN SHARES OF COMMON STOCK, EFFECTS A SUBDIVISION OF THE OUTSTANDING COMMON STOCK, COMBINES THE OUTSTANDING SHARES OF COMMON STOCK, OR ISSUES BY RECLASSIFICATION OF SHARES OF ITS COMMON STOCK ANY SHARES OF CAPITAL STOCK OF THE CORPORATION, THEN, IN EACH SUCH CASE, THE CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH EVENT SHALL BE ADJUSTED SO THAT EACH HOLDER OF SHARES OF SERIES B PREFERRED STOCK SHALL HAVE THE RIGHT TO CONVERT ITS SHARES OF SERIES B PREFERRED STOCK INTO THE NUMBER OF SHARES OF COMMON STOCK WHICH IT WOULD HAVE OWNED AFTER THE EVENT HAD SUCH SHARES OF SERIES B PREFERRED STOCK BEEN CONVERTED IMMEDIATELY BEFORE THE HAPPENING OF SUCH EVENT. ANY ADJUSTMENT UNDER THIS SECTION 5(D)(I) SHALL BECOME EFFECTIVE RETROACTIVELY IMMEDIATELY AFTER THE RECORD DATE IN THE CASE OF A DIVIDEND AND SHALL BECOME EFFECTIVE IMMEDIATELY AFTER THE EFFECTIVE DATE IN THE CASE OF AN ISSUANCE, SUBDIVISION, COMBINATION OR RECLASSIFICATION. IF THE CORPORATION PAYS A STOCK DIVIDEND IN SHARES OF COMMON STOCK AND THE HOLDERS OF THE SERIES B PREFERRED STOCK RECEIVED SUCH STOCK DIVIDEND PURSUANT TO SECTION 2(B) HEREOF, THE CONVERSION PRICE SHALL NOT BE ADJUSTED FOR SUCH DIVIDEND UNDER THIS SECTION 5(D)(I). ISSUANCE OF ADDITIONAL SHARES OF STOCK. IF THE CORPORATION SHALL ISSUE OR SELL, WHETHER DIRECTLY OR INDIRECTLY, INCLUDING BY ASSUMPTION IN A MERGER IN WHICH THE CORPORATION IS THE SURVIVING CORPORATION, ANY ADDITIONAL SHARES OF STOCK (OTHER Page 76 of __ 77 THAN UPON THE CONVERSION, EXERCISE OR EXCHANGE OF A DERIVATIVE SECURITY IN ACCORDANCE WITH ITS TERMS) IN EXCHANGE FOR CONSIDERATION IN AN AMOUNT PER ADDITIONAL SHARE OF STOCK LESS THAN (1) IN THE CASE OF AN ISSUANCE OR SALE ON OR PRIOR TO DECEMBER 31, 2003, THE GREATER OF (I) THE FAIR MARKET VALUE (DETERMINED AT THE TIME OF SUCH ISSUANCE OR SALE EXCEPT AS OTHERWISE PROVIDED HEREIN) AND (II) THE CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH ISSUANCE OR SALE OR (2) AT ANY TIME AFTER DECEMBER 31, 2003, THE CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH ISSUANCE OR SALE, THEN THE CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH ISSUANCE OR SALE OF SUCH ADDITIONAL SHARES OF STOCK (THE "ADJUSTMENT EVENT") SHALL BE ADJUSTED TO EQUAL THE PRICE DETERMINED BY MULTIPLYING SUCH CONVERSION PRICE BY A FRACTION, OF WHICH: (X) THE NUMERATOR SHALL BE (1) THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING IMMEDIATELY PRIOR TO SUCH ADJUSTMENT EVENT PLUS (2) THE NUMBER OF SHARES OF COMMON STOCK WHICH THE AGGREGATE AMOUNT OF CONSIDERATION, IF ANY, RECEIVED BY THE CORPORATION FOR THE TOTAL NUMBER OF ADDITIONAL SHARES OF STOCK WOULD PURCHASE AT THE GREATER OF (I) THE MARKET PRICE PER SHARE OF THE COMMON STOCK IN EFFECT IMMEDIATELY PRIOR TO SUCH ADJUSTMENT EVENT OR (II) THE CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH ADJUSTMENT EVENT, AND (Y) THE DENOMINATOR SHALL BE THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING IMMEDIATELY AFTER SUCH ADJUSTMENT EVENT; provided, however, that such adjustment shall be made only if the Conversion Price determined from such adjustment shall be less than the Conversion Price in effect immediately prior to the issuance of such Additional Shares of Stock. The provisions of this Section 5(d)(ii) shall not apply to any issuance of Additional Shares of Stock for which an adjustment is provided under Section 5(d)(i), 5(d)(iii) or 5(d)(iv). (III) ISSUANCE OF DERIVATIVE SECURITIES. IF THE CORPORATION SHALL ISSUE OR SELL, WHETHER DIRECTLY OR INDIRECTLY, INCLUDING BY ASSUMPTION IN A MERGER IN WHICH THE CORPORATION IS THE SURVIVING CORPORATION, ANY DERIVATIVE SECURITY (OTHER THAN UPON THE CONVERSION, EXERCISE OR EXCHANGE OF ANOTHER DERIVATIVE SECURITY IN ACCORDANCE WITH ITS TERMS) IN EXCHANGE FOR CONSIDERATION (ON A PER SHARE COMMON STOCK BASIS BASED ON THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION, EXERCISE OR EXCHANGE OF SUCH DERIVATIVE SECURITY) LESS THAN (1) IN THE CASE OF AN ISSUANCE OR SALE ON OR PRIOR TO DECEMBER 31, 2003, THE GREATER OF (I) THE FAIR MARKET VALUE (DETERMINED AT THE TIME OF SUCH ISSUANCE OR SALE EXCEPT AS OTHERWISE PROVIDED HEREIN) AND (II) THE CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH ISSUANCE OR SALE OR (2) AT ANY TIME AFTER DECEMBER 31, 2003, THE CONVERSION PRICE IN EFFECT IMMEDIATELY PRIOR TO SUCH ISSUANCE OR SALE, THEN THE CONVERSION PRICE SHALL BE ADJUSTED AS PROVIDED IN SECTION 5(D)(II), EXCEPT THAT "ADJUSTMENT EVENT" SHALL MEAN Page 77 of __ 78 SUCH ISSUANCE OR SALE AND THE DENOMINATOR SHALL INCLUDE THE MAXIMUM NUMBER OF SHARES OF COMMON STOCK THAT COULD BE ISSUED UPON CONVERSION, EXERCISE OR EXCHANGE OF SUCH DERIVATIVE SECURITY. IF ANY ISSUANCE OR SALE OF A DERIVATIVE SECURITY IS MADE UPON THE CONVERSION, EXERCISE OR EXCHANGE OF ANY OTHER DERIVATIVE SECURITY IN ACCORDANCE WITH ITS TERMS FOR WHICH ADJUSTMENTS OF THE CONVERSION PRICE HAVE BEEN OR ARE TO BE MADE PURSUANT TO THIS OR ANY OTHER PROVISION OF THIS SECTION 5(D), NO FURTHER ADJUSTMENTS OF CONVERSION PRICE SHALL BE MADE BY REASON OF SUCH ISSUANCE OR SALE; provided, however, that such adjustment shall be made only if the Conversion Price determined from such adjustment shall be less than the Conversion Price in effect immediately prior to the issuance of such Derivative Security. The provisions of this Section 5(d)(iii) shall not apply to any issuance of any Derivative Security for which an adjustment is provided under Section 5(d)(i), 5(d)(ii) or 5(d)(iv) or any Derivative Security sold in an underwritten registered public offering. (IV) REORGANIZATION, RECLASSIFICATION, MERGER OR CONSOLIDATION. IF THE CORPORATION SHALL AT ANY TIME REORGANIZE OR RECLASSIFY THE OUTSTANDING SHARES OF COMMON STOCK (OTHER THAN A CHANGE IN PAR VALUE, OR FROM NO PAR VALUE TO PAR VALUE, OR FROM PAR VALUE TO NO PAR VALUE, OR AS A RESULT OF A SUBDIVISION OR COMBINATION) OR CONSOLIDATE WITH OR MERGE INTO ANOTHER CORPORATION (WHERE THE CORPORATION IS NOT THE CONTINUING CORPORATION AFTER SUCH MERGER OR CONSOLIDATION), THE SERIES B PREFERRED STOCK NOT REDEEMED PURSUANT TO SECTION 6(C) HERETO SHALL AUTOMATICALLY BECOME CONVERTIBLE INTO THE SAME KIND AND NUMBER OF SHARES OF STOCK AND OTHER SECURITIES, CASH OR OTHER PROPERTY (AND UPON THE SAME TERMS AND WITH THE SAME RIGHTS) AS WOULD HAVE BEEN RECEIVABLE BY A HOLDER OF THE NUMBER OF SHARES OF COMMON STOCK INTO WHICH SUCH SHARES OF SERIES B PREFERRED STOCK COULD HAVE BEEN CONVERTED IMMEDIATELY PRIOR TO SUCH REORGANIZATION, RECLASSIFICATION, CONSOLIDATION OR MERGER. THE CONVERSION PRICE UPON SUCH CONVERSION SHALL BE THE CONVERSION PRICE THAT WOULD OTHERWISE BE IN EFFECT PURSUANT TO THE TERMS HEREOF. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE CORPORATION WILL NOT EFFECT ANY SUCH REORGANIZATION, RECLASSIFICATION, MERGER OR CONSOLIDATION UNLESS PRIOR TO THE CONSUMMATION THEREOF, THE CORPORATION WHICH MAY BE REQUIRED TO DELIVER ANY STOCK, SECURITIES, CASH OR OTHER PROPERTY UPON THE CONVERSION OF THE SERIES B PREFERRED STOCK SHALL AGREE BY AN INSTRUMENT IN WRITING TO DELIVER SUCH STOCK, SECURITIES, CASH OR OTHER PROPERTY TO THE HOLDERS OF THE SERIES B PREFERRED STOCK. A SALE, TRANSFER OR LEASE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE CORPORATION TO ANOTHER PERSON SHALL BE DEEMED A REORGANIZATION, RECLASSIFICATION, CONSOLIDATION OR MERGER FOR THE FOREGOING PURPOSES. (V) EXCEPTIONS TO ADJUSTMENT OF CONVERSION PRICE. ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, THE CORPORATION SHALL NOT MAKE ANY ADJUSTMENT OF THE CONVERSION PRICE (A) IN THE CASE OF THE ISSUANCE OF Page 78 of __ 79 SHARES OF COMMON STOCK (1) ON ANY CONVERSION OF SHARES OF SERIES B PREFERRED STOCK, (2) PURSUANT TO STOCK OPTIONS OR OTHER EQUITY INCENTIVE PLANS FOR EMPLOYEES, OFFICERS AND/OR DIRECTORS OF THE CORPORATION OR (3) PURSUANT TO THE TERMS OF ANY OTHER SECURITIES OUTSTANDING ON THE ISSUE DATE, (B) IN THE CASE OF THE ISSUANCE OF ADDITIONAL PREFERRED SHARES AS DIVIDENDS ON SERIES B PREFERRED STOCK, (C) IN THE CASE OF THE ISSUANCE OF PARITY SECURITIES AS DIVIDENDS ON PARITY SECURITIES OR (D) IN THE CASE OF THE ISSUANCE OR SALE (WHETHER DIRECTLY OR INDIRECTLY, INCLUDING BY ASSUMPTION IN A MERGER IN WHICH THE CORPORATION IS THE SURVIVING CORPORATION) AT ANY TIME, AND FROM TIME TO TIME, ON OR PRIOR TO DECEMBER 31, 2003, OF UP TO AN AGGREGATE OF 10,000,000 ADDITIONAL SHARES OF STOCK (INCLUDING SUCH NUMBER OF DERIVATIVE SECURITIES CONVERTIBLE, EXERCISABLE OR EXCHANGEABLE INTO OR FOR UP TO 10,000,000 SHARES OF COMMON STOCK) IN EXCHANGE FOR CONSIDERATION IN AN AMOUNT PER ADDITIONAL SHARE OF STOCK (OR, IN THE CASE OF DERIVATIVE SECURITIES, CONSIDERATION ON A PER SHARE OF COMMON STOCK BASIS BASED ON THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION, EXERCISE OR EXCHANGE OF SUCH DERIVATIVE SECURITIES) EQUAL TO OR GREATER THAN THE FAIR MARKET VALUE (DETERMINED AT THE TIME OF SUCH ISSUANCE OR SALE EXCEPT AS OTHERWISE PROVIDED HEREIN AND EXCLUDING ANY UNDERWRITERS' FEES OR DISCOUNTS). (VI) CHALLENGE TO GOOD FAITH DETERMINATION. WHENEVER THE BOARD OF DIRECTORS OF THE CORPORATION SHALL BE REQUIRED TO MAKE A DETERMINATION IN GOOD FAITH OF THE FAIR VALUE OF ANY ITEM UNDER THIS SECTION 5(D), SUCH DETERMINATION MAY BE CHALLENGED IN GOOD FAITH BY THE HOLDERS OF TWO-THIRDS OF THE SERIES B PREFERRED STOCK AND ANY DISPUTE SHALL BE RESOLVED BY AN INVESTMENT BANKING FIRM OF RECOGNIZED NATIONAL STANDING SELECTED BY THE CORPORATION. THE FEES OF SUCH INVESTMENT BANKER SHALL BE BORNE BY SUCH HOLDERS UNLESS SUCH INVESTMENT BANKER'S CALCULATION RESULTS IN A DOWNWARD ADJUSTMENT OF THE CONVERSION PRICE EXCEEDING 110% OF THE ADJUSTMENT MADE IN ACCORDANCE WITH THE CORPORATION'S CALCULATION, IN WHICH CASE SUCH FEES SHALL BE PAID BY THE CORPORATION. (VII) CONVENTIONS. (A) COMPUTATION OF CONSIDERATION. TO THE EXTENT THAT ANY ADDITIONAL SHARES OF STOCK OR DERIVATIVE SECURITY SHALL BE ISSUED FOR CASH CONSIDERATION, THE CONSIDERATION RECEIVED BY THE CORPORATION THEREFOR SHALL BE THE AMOUNT OF THE CASH RECEIVED BY THE CORPORATION THEREFOR (OR, IF SOLD TO DEALERS OR UNDERWRITERS IN CONNECTION WITH A PUBLIC OFFERING, THE INITIAL PUBLIC OFFERING PRICE THEREFOR BUT EXCLUDING ANY ACCRUED DIVIDENDS OR INTEREST) WHICH SHALL BE DEEMED TO INCLUDE, IN THE CASE OF ANY DERIVATIVE SECURITY, ANY ADDITIONAL AMOUNT PAYABLE TO THE CORPORATION UPON CONVERSION, EXERCISE OR EXCHANGE THEREOF. TO THE EXTENT THAT SUCH ISSUANCE SHALL BE FOR A CONSIDERATION OTHER THAN CASH, THEN EXCEPT AS HEREIN OTHERWISE EXPRESSLY PROVIDED, THE AMOUNT OF SUCH CONSIDERATION SHALL BE DEEMED TO BE THE FAIR VALUE OF SUCH CONSIDERATION AT THE TIME OF SUCH ISSUANCE AS DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS OF THE Page 79 of __ 80 CORPORATION. IN CASE OF THE ISSUANCE OF ANY ADDITIONAL SHARES OF STOCK OR DERIVATIVE SECURITY IN CONNECTION WITH ANY MERGER IN WHICH THE CORPORATION ISSUES ANY SECURITIES, THE AMOUNT OF CONSIDERATION THEREFOR SHALL BE DEEMED TO BE THE FAIR VALUE, AS DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS OF THE CORPORATION, OF SUCH PORTION OF THE ASSETS AND BUSINESS OF THE NONSURVIVING CORPORATION AS SUCH BOARD IN GOOD FAITH SHALL DETERMINE TO BE ATTRIBUTABLE TO SUCH ADDITIONAL SHARE OF STOCK OR DERIVATIVE SECURITY, AS THE CASE MAY BE. IN CASE OF THE ISSUANCE AT ANY TIME OF ANY ADDITIONAL SHARES OF STOCK IN PAYMENT OR SATISFACTION OF ANY DIVIDENDS OR INTEREST UPON ANY CLASS OF STOCK OTHER THAN COMMON STOCK, THE CORPORATION SHALL BE DEEMED TO HAVE RECEIVED FOR SUCH ADDITIONAL SHARES OF STOCK A CONSIDERATION EQUAL TO THE AMOUNT OF SUCH DIVIDEND SO PAID OR SATISFIED. (B) DATE OF DETERMINATION. IN DETERMINING THE FAIR MARKET VALUE UNDER SECTION 5(D), THE FAIR MARKET VALUE WILL BE DETERMINED AT THE TIME OF THE ISSUANCE OR SALE OF THE ADDITIONAL SHARES OF STOCK OR DERIVATIVE SECURITY OR IF SUCH ISSUANCE OR SALE IS PURSUANT TO A BINDING AGREEMENT ENTERED INTO BY THE CORPORATION, THE DATE OF SUCH BINDING AGREEMENT (UNLESS THE PRICE CONTAINED IN SUCH AGREEMENT IS TIED TO A VALUATION OF THE COMMON STOCK ON ANOTHER DATE, IN WHICH CASE SUCH DATE WILL BE USED TO DETERMINE THE FAIR MARKET VALUE). (C) SUPERSEDING ADJUSTMENTS. IF, AT ANY TIME AFTER ANY ADJUSTMENT OF THE CONVERSION PRICE MADE PURSUANT TO SECTION 5(D)(III) AS A RESULT OF ANY ISSUANCE OF ANY DERIVATIVE SECURITY, (x) such Derivative Security ceases to be outstanding without the related shares of Common Stock being issued or (y) the consideration that is received (or deemed received) for such Derivative Security is increased or decreased, THEN SUCH PREVIOUS ADJUSTMENT PURSUANT TO SECTION 5(D)(III) SHALL BE RESCINDED AND ANNULLED; PROVIDED, HOWEVER, IN THE CASE OF CLAUSE (Y), A RECOMPUTATION OF THE ADJUSTMENT SHALL BE MADE WITH RESPECT TO THE DERIVATIVE SECURITY (1) treating the number of Additional Shares of Stock or other property, if any, actually issued pursuant to any previous conversion, exercise or exchange of such Derivative Security as having been issued on the date or dates of any such exercise and for the consideration actually received and receivable therefor, and (2) treating any such Derivative Security which then remains outstanding as having resulted in additional cash consideration to the Corporation equal to such increase in (y); Page 80 of __ 81 WHEREUPON THE RECOMPUTATION SHALL SUPERSEDE THE PREVIOUS ADJUSTMENT SO RESCINDED AND ANNULLED BUT SHALL NOT SUPERSEDE ANY OTHER ADJUSTMENTS TO THE CONVERSION PRICE. (VIII) WHEN ADJUSTMENTS SHALL BE MADE. THE ADJUSTMENTS REQUIRED BY THIS SECTION 5(D) SHALL BE MADE WHENEVER AND AS OFTEN AS ANY EVENT REQUIRING AN ADJUSTMENT SHALL OCCUR, EXCEPT THAT ANY ADJUSTMENT OF THE CONVERSION PRICE THAT WOULD OTHERWISE BE REQUIRED MAY BE POSTPONED (EXCEPT IN THE CASE OF A SUBDIVISION OR COMBINATION OF SHARES OF THE COMMON STOCK, AS PROVIDED FOR IN SECTION 5(D)(I)) IF SUCH ADJUSTMENT EITHER BY ITSELF OR WITH OTHER ADJUSTMENTS NOT PREVIOUSLY MADE AMOUNTS TO A CHANGE IN THE CONVERSION PRICE OF LESS THAN $0.05. ANY ADJUSTMENT REPRESENTING A CHANGE OF LESS THAN SUCH MINIMUM AMOUNT (EXCEPT AS AFORESAID) WHICH IS POSTPONED SHALL BE CARRIED FORWARD AND MADE AS SOON AS SUCH ADJUSTMENT, TOGETHER WITH OTHER ADJUSTMENTS REQUIRED BY THIS SECTION 5(D) AND NOT PREVIOUSLY MADE, WOULD RESULT IN A MINIMUM ADJUSTMENT. FOR THE PURPOSE OF ANY ADJUSTMENT, ANY EVENT SHALL BE DEEMED TO HAVE OCCURRED AT THE CLOSE OF BUSINESS ON THE DATE OF ITS OCCURRENCE. (IX) OFFICER'S CERTIFICATE. UPON EACH ADJUSTMENT OF THE CONVERSION PRICE, AND IN THE EVENT OF ANY CHANGE IN THE RIGHTS OF A HOLDER OF SERIES B PREFERRED STOCK BY REASON OF OTHER EVENTS HEREIN SET FORTH, THEN AND IN EACH SUCH CASE, THE CORPORATION WILL PROMPTLY PROVIDE A CERTIFICATE OF A DULY AUTHORIZED OFFICER OF THE CORPORATION, STATING THE ADJUSTED CONVERSION PRICE, OR SPECIFYING THE OTHER SHARES OF THE COMMON STOCK, SECURITIES OR ASSETS AND THE AMOUNT THEREOF RECEIVABLE AS A RESULT OF SUCH CHANGE IN RIGHTS, AND SETTING FORTH IN REASONABLE DETAIL THE METHOD OF CALCULATION AND THE FACTS UPON WHICH SUCH CALCULATION IS BASED. THE CORPORATION WILL PROMPTLY MAIL A COPY OF SUCH CERTIFICATE TO THE HOLDERS OF SERIES B PREFERRED STOCK. IF THE HOLDERS OF TWO-THIRDS OF THE SERIES B PREFERRED STOCK DISAGREE WITH SUCH CALCULATION, THE CORPORATION AGREES TO OBTAIN WITHIN THIRTY (30) BUSINESS DAYS AN OPINION OF A FIRM OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS SELECTED BY THE CORPORATION'S BOARD OF DIRECTORS TO REVIEW SUCH CALCULATION AND THE OPINION OF SUCH FIRM OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS SHALL BE FINAL AND BINDING ON THE PARTIES AND SHALL BE CONCLUSIVE EVIDENCE OF THE CORRECTNESS OF THE COMPUTATION WITH RESPECT TO ANY SUCH ADJUSTMENT OF THE CONVERSION PRICE. THE FEES OF SUCH ACCOUNTING FIRM SHALL BE BORNE BY SUCH HOLDERS UNLESS SUCH ACCOUNTING FIRM'S CALCULATION RESULTS IN A DOWNWARD ADJUSTMENT OF THE CONVERSION PRICE EXCEEDING 110% OF THE ADJUSTMENT MADE IN ACCORDANCE WITH THE CORPORATION'S CALCULATION, IN WHICH CASE SUCH FEES SHALL BE PAID BY THE CORPORATION. (X) CORPORATION TO PREVENT DILUTION. IN CASE AT ANY TIME OR FROM TIME TO TIME CONDITIONS ARISE BY REASON OF ACTION TAKEN BY THE CORPORATION, WHICH IN THE GOOD FAITH OPINION OF ITS BOARD OF DIRECTORS ARE NOT ADEQUATELY COVERED BY THE PROVISIONS OF THIS SECTION 5(D), AND WHICH MIGHT MATERIALLY AND ADVERSELY AFFECT THE EXERCISE RIGHTS OF THE HOLDERS OF THE SERIES B PREFERRED STOCK, THE BOARD OF DIRECTORS OF THE CORPORATION Page 81 of __ 82 SHALL APPOINT A FIRM OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS, WHICH SHALL GIVE THEIR OPINION UPON THE ADJUSTMENT, IF ANY, ON A BASIS CONSISTENT WITH THE STANDARDS ESTABLISHED IN THE OTHER PROVISIONS OF THIS SECTION 5(D), NECESSARY WITH RESPECT TO THE CONVERSION PRICE, SO AS TO PRESERVE, WITHOUT DILUTION (OTHER THAN AS SPECIFICALLY CONTEMPLATED BY THE CERTIFICATE OF INCORPORATION), THE EXERCISE RIGHTS OF THE HOLDERS OF THE SERIES B PREFERRED STOCK. UPON RECEIPT OF SUCH OPINION, THE BOARD OF DIRECTORS OF THE CORPORATION SHALL FORTHWITH MAKE THE ADJUSTMENTS DESCRIBED THEREIN. (e) NO IMPAIRMENT. THE CORPORATION WILL NOT, BY AMENDMENT OF ITS CERTIFICATE OF INCORPORATION OR THROUGH ANY REORGANIZATION, RECAPITALIZATION, TRANSFER OF ASSETS, CONSOLIDATION, MERGER, DISSOLUTION, ISSUE OR SALE OF SECURITIES OR ANY OTHER VOLUNTARY ACTION, AVOID OR SEEK TO AVOID THE OBSERVANCE OR PERFORMANCE OF ANY OF THE TERMS TO BE OBSERVED OR PERFORMED HEREUNDER BY THE CORPORATION (IT BEING UNDERSTOOD THAT THE CORPORATION WILL NOT BE PROHIBITED FROM TAKING ACTIONS THAT ARE PERMITTED BY THE TERMS HEREUNDER) BUT WILL AT ALL TIMES IN GOOD FAITH ASSIST IN THE CARRYING OUT OF ALL THE PROVISIONS OF SECTION 5 HEREOF AND IN THE TAKING OF ALL SUCH ACTION AS MAY BE NECESSARY OR APPROPRIATE IN ORDER TO PROTECT THE CONVERSION RIGHTS OF THE HOLDERS OF THE SERIES B PREFERRED STOCK AGAINST IMPAIRMENT. NO FRACTIONAL SHARES ADJUSTMENTS. IN COMPUTING ADJUSTMENTS UNDER THIS SECTION 5, FRACTIONAL INTERESTS IN THE COMMON STOCK SHALL BE TAKEN INTO ACCOUNT TO THE NEAREST 1/100TH OF A SHARE. NO FRACTIONAL SHARES SHALL BE ISSUED UPON CONVERSION OF THE SERIES B PREFERRED STOCK. THE NUMBER OF FULL SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF ALL SHARES OF SERIES B PREFERRED STOCK CONVERTED BY THE SAME STOCKHOLDER AT THE SAME TIME SHALL BE COMPUTED ON THE BASIS OF THE AGGREGATE AMOUNT OF THE SHARES TO BE CONVERTED. INSTEAD OF ANY FRACTIONAL SHARES OF COMMON STOCK WHICH WOULD OTHERWISE BE ISSUABLE UPON CONVERSION OF ANY SHARES OF SERIES B PREFERRED STOCK, THE CORPORATION WILL PAY A CASH ADJUSTMENT IN RESPECT OF SUCH FRACTIONAL INTEREST IN AN AMOUNT EQUAL TO THE SAME FRACTION OF THE MARKET PRICE PER SHARE OF COMMON STOCK ON THE DAY OF CONVERSION. SHARES TO BE RESERVED. THE CORPORATION SHALL AT ALL TIMES RESERVE AND KEEP AVAILABLE, OUT OF ITS AUTHORIZED AND UNISSUED STOCK, SOLELY FOR THE PURPOSE OF EFFECTING THE CONVERSION OF THE SERIES B PREFERRED STOCK, SUCH NUMBER OF SHARES OF COMMON STOCK AS SHALL FROM TIME TO TIME BE SUFFICIENT TO EFFECT THE CONVERSION OF ALL OF THE SERIES B PREFERRED STOCK FROM TIME TO TIME OUTSTANDING. THE CORPORATION SHALL FROM TIME TO TIME, IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, USE ITS BEST EFFORTS TO OBTAIN STOCKHOLDER APPROVAL TO INCREASE, AND THEREAFTER TO INCREASE, THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK IF AT ANY TIME THE NUMBER OF SHARES OF AUTHORIZED BUT UNISSUED COMMON STOCK SHALL BE INSUFFICIENT TO PERMIT THE CONVERSION IN FULL OF THE SERIES B PREFERRED STOCK. TAXES AND CHARGES. THE CORPORATION WILL PAY ANY AND ALL ISSUE OR OTHER TAXES THAT MAY BE PAYABLE IN RESPECT OF ANY ISSUANCE OR DELIVERY OF SHARES OF COMMON STOCK ON CONVERSION OF THE SERIES B PREFERRED STOCK. THE CORPORATION SHALL NOT, Page 82 of __ 83 HOWEVER, BE REQUIRED TO PAY ANY TAX WHICH MAY BE PAYABLE IN RESPECT OF ANY TRANSFER INVOLVED IN THE ISSUANCE OR DELIVERY OF COMMON STOCK IN A NAME OTHER THAN THAT OF THE REGISTERED HOLDER OF THE SERIES B PREFERRED STOCK, AND NO SUCH ISSUANCE OR DELIVERY SHALL BE MADE UNLESS AND UNTIL THE PERSON REQUESTING SUCH ISSUANCE HAS PAID TO THE CORPORATION THE AMOUNT OF SUCH TAX OR HAS ESTABLISHED, TO THE SATISFACTION OF THE CORPORATION, THAT SUCH TAX HAS BEEN PAID. CLOSING OF BOOKS. THE CORPORATION WILL AT NO TIME CLOSE ITS TRANSFER BOOKS AGAINST THE TRANSFER OF ANY SHARES OF SERIES B PREFERRED STOCK OR OF ANY SHARES OF COMMON STOCK ISSUED OR ISSUABLE UPON THE CONVERSION OF ANY SHARES OF SERIES B PREFERRED STOCK IN ANY MANNER WHICH INTERFERES WITH THE TIMELY CONVERSION OF SUCH SHARES OF SERIES B PREFERRED STOCK. 6. REDEMPTION (a) MANDATORY REDEMPTION. THE CORPORATION SHALL REDEEM ALL THE THEN OUTSTANDING SHARES OF SERIES B PREFERRED STOCK BETWEEN JUNE 30, 2007 AND DECEMBER 31, 2007, INCLUSIVE, ON A DATE SELECTED BY THE CORPORATION. REDEMPTION OF THE SERIES B PREFERRED STOCK PURSUANT TO THIS SECTION 6(a) SHALL BE AT A PRICE PER SHARE EQUAL TO THE LIQUIDATION VALUE PLUS ALL ACCRUED BUT UNPAID DIVIDENDS THEREON THROUGH THE REDEMPTION DATE (THE "REDEMPTION PRICE"). THE REDEMPTION PRICE SHALL BE PAID, AT THE ELECTION OF THE CORPORATION, IN CASH OR SHARES OF COMMON STOCK (OR ANY COMBINATION THEREOF); PROVIDED, HOWEVER, THAT, FOR PURPOSES OF CALCULATING THE NUMBER OF SHARES OF COMMON STOCK TO BE RECEIVED BY EACH HOLDER OF SERIES B PREFERRED STOCK, EACH SUCH SHARE OF COMMON STOCK SHALL BE VALUED AT THE LOWER OF (i) THE CONVERSION PRICE AND (ii) 90% OF THE FAIR MARKET VALUE. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT THE CORPORATION DESIRES TO PAY THE REDEMPTION PRICE IN SHARES OF COMMON STOCK AND THE CORPORATION IS RESTRICTED FROM ISSUING SHARES OF COMMON STOCK TO ONE OR MORE OF THE HOLDERS OF SERIES B PREFERRED STOCK, THE REDEMPTION PRICE SHALL BE PAID IN CASH TO THE HOLDERS OF SERIES B PREFERRED STOCK AFFECTED BY SUCH RESTRICTIONS, TO THE EXTENT OF SUCH RESTRICTIONS. OPTIONAL REDEMPTION. THE CORPORATION MAY, AT ITS OPTION, REDEEM SHARES OF SERIES B PREFERRED STOCK THEN OUTSTANDING AT THE REDEMPTION PRICE AT ANY TIME OR FROM TIME TO TIME ON OR AFTER JUNE 30, 2005, IF AS OF THE DAY PRECEDING THE NOTICE OF ANY SUCH REDEMPTION THE AVERAGE MARKET PRICE OF A SHARE OF COMMON STOCK FOR THE TRADING DAYS DURING THE THIRTY (30) CALENDAR DAY PERIOD ENDING ON SUCH PRECEDING DAY EXCEEDED $10.00 PER SHARE. ANY REDEMPTION OF THE SERIES B PREFERRED STOCK PURSUANT TO THIS SECTION 6(b) SHALL BE AT A PRICE PER SHARE OF SERIES B PREFERRED STOCK EQUAL TO THE REDEMPTION PRICE AND SHALL BE PAYABLE IN CASH. ANY REDEMPTION OF THE SERIES B PREFERRED STOCK PURSUANT TO THIS SECTION 6(b) THAT IS FOR LESS THAN ALL THE SHARES OF SERIES B PREFERRED STOCK THEN OUTSTANDING SHALL BE DONE ON A PRO RATA BASIS AMONG ALL HOLDERS OF THE SERIES B PREFERRED STOCK IN PROPORTION TO THE NUMBER OF SHARES OF SERIES B PREFERRED STOCK THEN HELD BY SUCH HOLDERS. Page 83 of __ 84 (c) REDEMPTION AT OPTION OF HOLDER UPON A FUNDAMENTAL CHANGE. IF A FUNDAMENTAL CHANGE OCCURS, EACH HOLDER OF SERIES B PREFERRED STOCK SHALL HAVE THE RIGHT, AT THE HOLDER'S OPTION, TO REQUIRE THE CORPORATION TO REDEEM ALL OF SUCH HOLDER'S SERIES B PREFERRED STOCK, OR ANY PORTION THEREOF, ON THE DATE (THE "REDEMPTION DATE") SELECTED BY THE CORPORATION THAT IS NOT LESS THAN TEN (10) NOR MORE THAN TWENTY (20) DAYS AFTER THE FINAL SURRENDER DATE, AT A PRICE PER SHARE EQUAL TO THE REDEMPTION PRICE; PROVIDED, THAT THE CORPORATION MAY NOT EFFECT SUCH REDEMPTION IF THE CORPORATION DOES NOT HAVE SUFFICIENT CAPITAL AND SURPLUS TO PERMIT SUCH REDEMPTION UNDER DELAWARE LAW, ALTHOUGH SUCH FAILURE TO MAKE SUCH REDEMPTION SHALL NOT AFFECT IN ANY WAY THE LEGAL CLAIM OF THE HOLDERS FOR SUCH REDEMPTION; PROVIDED, FURTHER, THAT THE CORPORATION'S OBLIGATION TO PAY THE REDEMPTION PRICE UPON A FUNDAMENTAL CHANGE SHALL CONSTITUTE A CLAIM THAT IS SUBORDINATED TO ANY INDEBTEDNESS OR ANY OTHER CREDITOR'S CLAIM OF THE CORPORATION. NOTHING HEREIN SHALL BE DEEMED TO RESTRICT THE RIGHTS OF THE HOLDERS OF SERIES B PREFERRED STOCK UNDER SECTION 5(a) HERETO. THE CORPORATION AGREES THAT IT WILL NOT VOLUNTARILY COMPLETE ANY FUNDAMENTAL CHANGE UNLESS PROPER PROVISION HAS BEEN MADE TO SATISFY ITS OBLIGATIONS UNDER THIS SECTION 6(c). ANY REDEMPTION OF THE SERIES B PREFERRED STOCK PURSUANT TO THIS SECTION 6(c) SHALL BE AT A REDEMPTION PRICE PER SHARE EQUAL TO THE REDEMPTION PRICE, EXCEPT THAT, FOR PURPOSES OF THE CALCULATION OF THE REDEMPTION PRICE UNDER THIS SECTION 6(c) IN THE CASE OF A FUNDAMENTAL CHANGE OTHER THAN THE DELISTING OF THE CORPORATION'S COMMON STOCK FROM ANY NATIONAL SECURITIES EXCHANGE ON WHICH THE COMMON STOCK IS LISTED, THE REDEMPTION PRICE SHALL MEAN THE GREATER OF (1) THE LIQUIDATION VALUE PLUS ALL ACCRUED BUT UNPAID DIVIDENDS THEREON THROUGH THE REDEMPTION DATE AND (2) THE AMOUNT PER SHARE SUCH HOLDERS WOULD HAVE RECEIVED IF SUCH HOLDERS HAD CONVERTED THEIR SHARES OF SERIES B PREFERRED STOCK INTO SHARES OF COMMON STOCK IMMEDIATELY PRIOR TO THE FUNDAMENTAL CHANGE. PAYMENT OF THE REDEMPTION PRICE SHALL BE MADE IN CASH. (d) PROCEDURES FOR REDEMPTION. IN THE EVENT THE CORPORATION SHALL REDEEM SHARES OF SERIES B PREFERRED STOCK PURSUANT TO THIS SECTION 6, THE CORPORATION SHALL GIVE WRITTEN NOTICE OF SUCH REDEMPTION BY FIRST-CLASS MAIL, POSTAGE PREPAID, MAILED NOT LESS THAN THIRTY (30) NOR MORE THAN NINETY (90) DAYS PRIOR TO THE REDEMPTION DATE, TO EACH HOLDER OF RECORD OF THE SHARES TO BE REDEEMED, AT SUCH HOLDER'S ADDRESS AS THE SAME APPEARS ON THE STOCK RECORDS OF THE CORPORATION. EACH SUCH NOTICE SHALL STATE, IF APPLICABLE: (i) THE REDEMPTION DATE; (ii) THE NUMBER OF SHARES OF SERIES B PREFERRED STOCK TO BE REDEEMED; (iii) THE REDEMPTION PRICE; (iv) THE PLACE OR PLACES WHERE CERTIFICATES FOR SUCH SHARES ARE TO BE SURRENDERED FOR PAYMENT OF THE REDEMPTION PRICE; (v) THAT PAYMENT WILL BE MADE UPON PRESENTATION AND SURRENDER OF SUCH SERIES B PREFERRED STOCK; (vi) THE THEN CURRENT CONVERSION PRICE AND THE DATE ON WHICH THE RIGHT TO CONVERT SUCH SHARES OF SERIES B PREFERRED STOCK WILL EXPIRE; (vii) THAT DIVIDENDS ON THE SHARES TO BE REDEEMED SHALL CEASE TO ACCRUE FOLLOWING SUCH REDEMPTION DATE; (viii) THAT DIVIDENDS, IF ANY, ACCRUED TO THE DATE FIXED FOR REDEMPTION WILL BE PAID AS SPECIFIED IN SUCH NOTICE; AND (ix) IN THE CASE OF A REDEMPTION OF SHARES OF SERIES B PREFERRED STOCK PURSUANT TO SECTION 6(b), THAT Page 84 of __ 85 THE CORPORATION BELIEVES, IN GOOD FAITH, THAT (a) IT WILL HAVE MONEYS SUFFICIENT TO PAY THE REDEMPTION PRICE ON THE REDEMPTION DATE AND (b) IT WILL BE ABLE TO OBTAIN ANY CONSENTS, IF NECESSARY, NEEDED TO CONSUMMATE SUCH REDEMPTION AND WILL OTHERWISE NOT BE RESTRICTED FROM CONSUMMATING SUCH REDEMPTION. NOTICE HAVING BEEN MAILED AS AFORESAID, FROM AND AFTER THE REDEMPTION DATE, UNLESS THE CORPORATION SHALL BE IN DEFAULT IN THE PAYMENT OF THE REDEMPTION PRICE, (A) DIVIDENDS ON THE SHARES OF THE SERIES B PREFERRED STOCK SO CALLED FOR REDEMPTION SHALL CEASE TO ACCRUE, (B) SUCH SHARES SHALL BE DEEMED NO LONGER OUTSTANDING AND (C) ALL RIGHTS OF THE HOLDERS THEREOF AS STOCKHOLDERS OF THE CORPORATION (EXCEPT THE RIGHT TO RECEIVE FROM THE CORPORATION (i) ANY MONEYS OR SHARES OF COMMON STOCK PAYABLE UPON REDEMPTION WITHOUT INTEREST THEREON AND, (ii) IN THE CASE OF A PARTIAL REDEMPTION, ANY SHARES OF SERIES B PREFERRED STOCK NOT REDEEMED PURSUANT TO THIS SECTION 6) SHALL CEASE. Upon surrender in accordance with such notice of the certificates for any such shares so redeemed pursuant to this Section 6 (properly endorsed or assigned for transfer, if the Board of Directors shall so require and the notice shall so state), such shares shall be redeemed by the Corporation at the Redemption Price. Notwithstanding the foregoing if notice of redemption has been given pursuant to Section 6(a) or Section 6(b) and any holder of shares of Series B Preferred Stock shall, prior to the close of business on the third (3rd) Business Day preceding the redemption date, give written notice to the Corporation pursuant to Section 5(b) hereof of the conversion of any or all of the shares to be redeemed held by such holder (accompanied by a certificate or certificates for such shares, duly endorsed or assigned to the Corporation), then the conversion of such shares to be redeemed shall become effective as provided in Section 5 hereof and such shares will not be redeemed. (e) NOTICE OF FUNDAMENTAL CHANGE. WITHIN THIRTY (30) DAYS AFTER THE OCCURRENCE OF A FUNDAMENTAL CHANGE, THE CORPORATION SHALL MAIL TO ALL HOLDERS OF RECORD OF THE SERIES B PREFERRED STOCK A NOTICE IN THE MANNER AND CONTAINING THE INFORMATION SET OUT IN CLAUSES (i) THROUGH (vii) OF THE SECOND SENTENCE OF THE FIRST PARAGRAPH OF SECTION 6(d), EXCEPT THAT, FOR PURPOSES OF THIS SECTION 6(e) SUCH NOTICE SHALL ALSO DESCRIBE THE OCCURRENCE OF SUCH FUNDAMENTAL CHANGE AND OF THE REDEMPTION RIGHT ARISING AS A RESULT THEREOF. TO EXERCISE THE REDEMPTION RIGHT, A HOLDER OF SERIES B PREFERRED STOCK MUST SURRENDER, ON OR BEFORE THE DATE WHICH IS, SUBJECT TO ANY CONTRARY REQUIREMENTS OF APPLICABLE LAW, THIRTY (30) DAYS AFTER THE DATE OF MAILING OF THE NOTICE FROM THE CORPORATION (THE "FINAL SURRENDER DATE"), THE CERTIFICATES REPRESENTING THE SERIES B PREFERRED STOCK WITH RESPECT TO WHICH THE RIGHT IS BEING EXERCISED, DULY ENDORSED FOR TRANSFER TO THE CORPORATION, TOGETHER WITH A WRITTEN NOTICE OF ELECTION. (f) FAILURE TO REDEEM. IN THE EVENT THE CORPORATION FAILS TO REDEEM (i) ALL THE THEN OUTSTANDING SHARES OF SERIES B PREFERRED STOCK BY DECEMBER 31, 2007, IN ACCORDANCE WITH SECTION 6(a) OR (ii) ANY SHARES OF SERIES B PREFERRED STOCK SUBMITTED FOR REDEMPTION PURSUANT TO SECTION 6(c) (a "REDEMPTION DEFAULT"), THEN UNTIL SUCH SHARES ARE REDEEMED THE DIVIDEND PAYABLE Page 85 of __ 86 ON SUCH SHARES SHALL INCREASE TO A RATE PER ANNUM EQUAL TO 12% OF THE LIQUIDATION VALUE FOR THE FIRST TWELVE (12) MONTHS FOLLOWING THE REDEMPTION DEFAULT AND SHALL INCREASE TO A RATE PER ANNUM EQUAL TO 15% OF THE LIQUIDATION VALUE THEREAFTER. SHARES TO BE RETIRED. ANY SHARE OF SERIES B PREFERRED STOCK CONVERTED, REDEEMED, REPURCHASED OR OTHERWISE ACQUIRED BY THE CORPORATION SHALL BE RETIRED AND CANCELED AND SHALL UPON CANCELLATION BE RESTORED TO THE STATUS OF AUTHORIZED BUT UNISSUED SHARES OF PREFERRED STOCK, SUBJECT TO REISSUANCE BY THE BOARD OF DIRECTORS AS SHARES OF PREFERRED STOCK OF ONE OR MORE OTHER SERIES BUT NOT AS SHARES OF SERIES B PREFERRED STOCK. AFFIRMATIVE COVENANTS. (a) OFFICE FOR PAYMENT, EXCHANGE AND REGISTRATION; LOCATION OF OFFICE; NOTICE OF CHANGE OF NAME OR OFFICE. SO LONG AS ANY SHARES OF SERIES B PREFERRED STOCK ARE OUTSTANDING, THE CORPORATION WILL MAINTAIN AN OFFICE OR AGENCY WHERE SHARES OF SERIES B PREFERRED STOCK MAY BE PRESENTED FOR REDEMPTION, EXCHANGE, CONVERSION, EXERCISE OR REGISTRATION OF TRANSFER. SUCH OFFICE OR AGENCY INITIALLY SHALL BE THE OFFICE OF THE CORPORATION. The Corporation shall give each holder of shares of Series B Preferred Stock at least twenty (20) calendar days' prior written notice of any change in (i) the name of the Corporation as then in effect or (ii) the location of the office of the Corporation required to be maintained under this Section 8(a). RESERVATION OF SHARES. THE CORPORATION SHALL AT ALL TIMES KEEP RESERVED, FREE FROM PREEMPTIVE RIGHTS, OUT OF ITS AUTHORIZED COMMON STOCK A NUMBER OF SHARES OF COMMON STOCK SUFFICIENT TO PROVIDE FOR THE EXERCISE OF THE CONVERSION RIGHTS PROVIDED IN SECTION 5 HEREOF. SECURITIES EXCHANGE ACT REGISTRATION. UNLESS A FUNDAMENTAL CHANGE HAS OCCURRED OR WOULD OCCUR, THE CORPORATION WILL MAINTAIN THE REGISTRATION OF ITS COMMON STOCK, UNDER SECTION 12(b) OR SECTION 12(g), WHICHEVER IS APPLICABLE, OF THE SECURITIES EXCHANGE ACT, AND THE CORPORATION WILL FILE ON TIME SUCH INFORMATION, DOCUMENTS AND REPORTS AS THE COMMISSION MAY REQUIRE OR PRESCRIBE FOR COMPANIES WHOSE STOCK HAS BEEN REGISTERED PURSUANT TO SUCH SECTION 12(b) OR SECTION 12(g), WHICHEVER IS APPLICABLE. DELIVERY OF INFORMATION FOR RULE 144 OR RULE 144A TRANSACTIONS. IF REQUIRED TO PERMIT SALES OF SHARES OF SERIES B PREFERRED STOCK PURSUANT TO RULE 144, THE CORPORATION WILL, UPON THE REQUEST OF ANY HOLDER OF SHARES OF SERIES B PREFERRED STOCK, MAKE GENERALLY AVAILABLE TO THE PUBLIC SUCH FINANCIAL AND OTHER INFORMATION, AS IS SET FORTH IN CLAUSE (c)(2) OF RULE 144. If a holder of shares of Series B Preferred Stock proposes to transfer any such shares pursuant to Rule 144A under the Securities Act (as in effect from time to time), the Corporation agrees to provide (upon the request of such holder or the prospective transferee) to such holder and (if requested) to the prospective transferee any financial or other information concerning the Corporation which is required to be delivered by such holder to any transferee of such shares pursuant to such Rule 144A. Page 86 of __ 87 NEGATIVE COVENANTS. THE CORPORATION COVENANTS AND AGREES THAT WITHOUT THE PRIOR WRITTEN CONSENT OF THE HOLDERS OF A TWO-THIRDS OF THE OUTSTANDING SHARES OF SERIES B PREFERRED STOCK: INDEBTEDNESS. THE CORPORATION WILL NOT (i) INCUR INDEBTEDNESS, OTHER THAN ANY INDEBTEDNESS PERMITTED TO BE INCURRED PURSUANT TO THE CREDIT AGREEMENT OR PURSUANT TO ANY INDENTURE OR (II) ENTER INTO ANY AGREEMENT RELATED TO DEBT THAT PROHIBITS THE CORPORATION FROM PAYING DIVIDENDS ON THE SERIES B PREFERRED STOCK IN ADDITIONAL PREFERRED SHARES. MAINTENANCE OF PUBLIC MARKET. THE CORPORATION WILL NOT PROCEED WITH A PROGRAM OF ACQUISITION OF ITS COMMON STOCK, INITIATE A CORPORATE REORGANIZATION OR RECAPITALIZATION OR UNDERTAKE A CONSOLIDATION OR MERGER OR AUTHORIZE, CONSENT TO OR TAKE ANY ACTION (OTHER THAN A TRANSACTION OPEN TO ALL HOLDERS OF COMMON STOCK IN WHICH THE CONSIDERATION OFFERED IS CASH OR SECURITIES REGISTERED UNDER THE SECURITIES EXCHANGE ACT AND SUCH SECURITIES ARE REGISTERED ON A NATIONAL SECURITIES EXCHANGE (OR THE NASDAQ STOCK MARKET) AND THE AVERAGE NUMBER OF OUTSTANDING SHARES OF SUCH CAPITAL STOCK (OTHER THAN SHARES HELD BY AFFILIATES) OVER THE PRIOR THREE MONTH PERIOD IS NOT LESS THAN THE AVERAGE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK (OTHER THAN SHARES HELD BY AFFILIATES)) (A) WHICH RESULTS IN THE REGISTRATION OF THE CORPORATION'S COMMON STOCK UNDER THE SECURITIES EXCHANGE ACT TO BE NO LONGER REQUIRED; (B) REQUIRING THE CORPORATION TO MAKE A FILING UNDER SCHEDULE 13E-3 OF THE SECURITIES EXCHANGE ACT; (C) SUBSTANTIALLY ELIMINATING THE PUBLIC MARKET FOR SHARES OF COMMON STOCK OF THE CORPORATION; OR (D) CAUSING A DELISTING OF THE CORPORATION'S COMMON STOCK FROM THE AMERICAN STOCK EXCHANGE (OR ANY NATIONAL SECURITIES EXCHANGE ON WHICH THE COMMON STOCK IS LISTED) UNLESS SUCH COMMON STOCK IS DELISTED AS A RESULT OF BEING LISTED ON THE NASDAQ STOCK MARKET OR ANOTHER NATIONAL SECURITIES EXCHANGE. CONDUCT OF BUSINESS. THE CORPORATION AND ITS SUBSIDIARIES SHALL ONLY ENGAGE IN THE BUSINESSES PERMITTED BY THE CREDIT AGREEMENT. DISTRIBUTIONS; INVESTMENTS. NEITHER THE CORPORATION NOR ANY OF ITS SUBSIDIARIES WILL DECLARE OR MAKE OR PERMIT TO BE DECLARED OR MADE: (i) ANY DISTRIBUTION UNLESS SUCH DISTRIBUTION WOULD BE PERMITTED TO BE DECLARED OR MADE PURSUANT TO THE CREDIT AGREEMENT OR PURSUANT TO ANY INDENTURE OR (II) ANY INVESTMENT NOT PERMITTED TO BE MADE PURSUANT TO THE CREDIT AGREEMENT OR PURSUANT TO ANY INDENTURE. NO RESTRICTIONS ON DIVIDENDS. NEITHER THE CORPORATION NOR ANY SUBSIDIARY WILL CREATE (OR PERMIT TO EXIST) ANY CONSENSUAL RESTRICTIONS (WHETHER BY AGREEMENT OR OTHERWISE) THAT MAY AFFECT OR LIMIT THE ABILITY OF ANY SUBSIDIARY TO PAY DIVIDENDS OR TO MAKE OTHER DISTRIBUTIONS OF ANY OR ALL OF ITS ASSETS TO THE CORPORATION OR TO ANY SUBSIDIARY, EXCEPT AS PERMITTED UNDER THE CREDIT AGREEMENT OR UNDER ANY INDENTURE. EXEMPTIVE STATUS. NEITHER THE CORPORATION NOR ANY AGENT NOR OTHER PERSON ACTING ON THE CORPORATION'S BEHALF WILL DO OR CAUSE TO BE DONE ANY ACT WHICH ACT WOULD Page 87 of __ 88 REQUIRE THE REGISTRATION OF THE INITIAL ISSUANCE OR SALE BY THE CORPORATION OF THE SERIES B PREFERRED STOCK WITHIN THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT OR THE FILING, NOTIFICATION OR REPORTING REQUIREMENTS OF ANY STATE SECURITIES LAW. AMENDMENTS TO CHARTER; BY-LAWS. THE CORPORATION WILL NOT AMEND ITS CERTIFICATE OF INCORPORATION OR BY-LAWS IN ANY MANNER THAT WOULD IMPAIR OR REDUCE THE RIGHTS OF THE SERIES B PREFERRED STOCK. NOTICE OF SALE. NO HOLDER OF SHARES OF SERIES B PREFERRED STOCK MAY SELL, TRANSFER OR AGREE TO SELL OR TRANSFER ANY OF SUCH SHARES IN AN AMOUNT IN EXCESS OF THREE PERCENT (3%) OF THE SHARES OF SERIES B PREFERRED STOCK OUTSTANDING DURING ANY NINE (9) MONTH PERIOD TO ANY PERSON OTHER THAN AN AFFILIATE OF SUCH HOLDER UNLESS SUCH HOLDER HAS PROVIDED WRITTEN NOTICE TO THE CORPORATION OF ITS INTENTION TO SELL OR TRANSFER SUCH SHARES AT LEAST FIFTEEN (15) CALENDAR DAYS PRIOR TO SUCH SALE, TRANSFER OR AGREEMENT (THE "NOTICE PERIOD"); PROVIDED, THAT IF SUCH SHARES HAVE NOT BEEN SOLD OR TRANSFERRED WITHIN THE NINETY (90) BUSINESS DAY PERIOD IMMEDIATELY FOLLOWING THE EXPIRATION OF THE NOTICE PERIOD, SUCH HOLDER SHALL BE REQUIRED TO ISSUE ANOTHER NOTICE OF ITS INTENTION TO SELL OR TRANSFER SUCH SHARES PURSUANT TO THIS SECTION 10. NOTHING IN THIS SECTION 10 SHALL BE DEEMED TO RESTRICT THE TRANSFER OF RECORD AND/OR BENEFICIAL OWNERSHIP OF THE SERIES B PREFERRED STOCK FROM A HOLDER OF SUCH SERIES B PREFERRED STOCK TO ONE OR MORE AFFILIATES OF SUCH HOLDER. AMENDMENTS WITH CONSENT OF HOLDERS. THE CORPORATION MAY AMEND THIS CERTIFICATE OF DESIGNATIONS WITH THE CONSENT OF THE HOLDERS OF TWO-THIRDS OF THE OUTSTANDING SHARES OF SERIES B PREFERRED STOCK. HOWEVER, WITHOUT THE CONSENT OF EACH HOLDER AFFECTED THEREBY, AN AMENDMENT MAY NOT: (i) REDUCE THE AMOUNT OF HOLDERS WHICH MUST CONSENT TO AN AMENDMENT; (II) REDUCE THE RATE OF OR EXTEND THE TIME FOR PAYMENT OF DIVIDENDS UNDER SECTION 2 HEREOF; (III) REDUCE THE NUMBER OF SHARES TO BE ISSUED OR CHANGE THE PRICE PAYABLE UPON THE CONVERSION, PURSUANT TO SECTION 5, OR REDEMPTION, PURSUANT TO SECTION 6 OR CHANGE THE FORM OF THE CONSIDERATION PAYABLE UPON SUCH REDEMPTION, OF SHARES OF SERIES B PREFERRED STOCK OR CHANGE THE DATE ON WHICH SHARES OF SERIES B PREFERRED STOCK MAY BE CONVERTED OR REDEEMED IN ACCORDANCE WITH SECTION 5 OR SECTION 6; AND (IV) MAKE ANY CHANGE IN THIS SECTION 11. It shall not be necessary for the consent of the holders under this Section 11 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. The Corporation agrees that all holders of Series B Preferred Stock shall be notified by the Corporation in advance of any proposed amendment of this Certificate of Designations, but failure to give such notice shall not in any way affect the validity of any such amendment. In addition, promptly after obtaining the consent of the holders as herein provided, the Corporation shall transmit a copy of any amendment which has been adopted to all holders of Series B Preferred Stock then outstanding, but failure to transmit copies shall not in any way affect the validity of any such amendment. Page 88 of __ 89 DEFINITIONS. AS USED HEREIN, THE FOLLOWING TERMS SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH BELOW: "Additional Preferred Shares" means additional shares of Series B Preferred Stock paid as a dividend on the Series B Preferred Stock in accordance with Section 2(a)(ii). "Additional Shares of Stock" means all shares of Common Stock issued by the Corporation after the Issue Date, other than (a) on any conversion of shares of Series B Preferred Stock, including any Additional Preferred Shares, (b) pursuant to stock options or other equity incentive plans for employees, officers and/or directors of the Corporation or (c) pursuant to the terms of any other securities outstanding on the Issue Date. "Adjustment Event" shall have the meaning set forth in Section (5)(d)(ii). "Affiliate", when used with respect to any Person, means (i) if such Person is a corporation, any officer or director thereof and any Person which is, directly or indirectly, the beneficial owner (by itself or as part of any group) of more than five percent (5%) of any class of any equity security (within the meaning of the Securities Exchange Act) thereof, and, if such beneficial owner is a partnership, any general partner thereof, or if such beneficial owner is a corporation, any Person controlling, controlled by or under common control with such beneficial owner, or any officer or director of such beneficial owner or of any corporation occupying any such control relationship, (ii) if such Person is a partnership, any general or limited partner thereof, and (iii) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person. For purposes of this definition, "control" (including the correlative terms "controlling", "controlled by" and "under common control with"), with respect to any Person, shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. "Business Day" means any day that is not a Saturday, a Sunday or any day on which banks in the State of New York are authorized or obligated to close. "Capitalized Leases" means any lease to which the Corporation or a Subsidiary is party as lessee, or by which it is bound, under which it leases any property (real, personal or mixed) from any lessor other than the Corporation or a Subsidiary, and which is required to be capitalized in accordance with generally accepted accounting principles consistently applied. "Commission" means the United States Securities and Exchange Commission and any successor agency of the federal government administering the Securities Act or the Securities Exchange Act. "Common Stock" means the Corporation's Common Stock, par value $0.01 per share, and shall also include any capital stock or other securities of the Page 89 of __ 90 Corporation into which Common Stock is changed, including by way of a reclassification, combination or subdivision. "Consolidated", when used with reference to any financial term in this Agreement, means the aggregate for the Corporation and its Subsidiaries of the amounts signified by such term for all such Persons, with intercompany items eliminated, and otherwise as determined in accordance with generally accepted accounting principles consistently applied (except as otherwise expressly provided herein). "Conversion Date" shall have the meaning set forth in Section 5(b). "Conversion Price" means the Conversion Price per share of Common Stock into which the Series B Preferred Stock is convertible, as such Conversion Price may be adjusted pursuant to Section 5 hereof. The initial Conversion Price will be $6.60. "Corporation" means TransMontaigne Inc., a Delaware corporation. "Credit Agreement" means the Fourth Amended and Restated Credit Agreement dated as of February 11, 2000, between the Corporation and Fleet National Bank (formerly BankBoston, N.A.) as agent, as amended, modified or the terms of which are waived from time to time, or one or more credit agreements, that subsequent to the termination or expiration of the Credit Agreement, may be entered into to refinance the indebtedness incurred in connection with the Credit Agreement or any successor credit agreement with a bank or other financial institution, as amended, modified or the terms of which are waived from time to time. "Derivative Security" means any security that is convertible into or exercisable or exchangeable for shares of Common Stock. "Distribution" shall have the meaning set forth in the Credit Agreement. "Dividend Payment Date" shall have the meaning set forth in Section 2(a)(iii). "Dividend Period" shall have the meaning set forth in Section 2(a)(ii)(A). "Fair Market Value" shall mean the average Market Price of a share of Common Stock for the trading days during the period of thirty (30) consecutive calendar days ending (i) in the case of Section 5(a), on the date shares of Series B Preferred Stock are surrendered for conversion; (ii) in the case of Section 5(d), on the date outlined in Section 5(d)(vii)(B); (iii) in the case of Section 6(a), on the date of redemption and (iv) in the case of Section 15, on the date of payment; provided, however, that in the case of any shares of Common Stock sold in a Page 90 of __ 91 public offering pursuant to Section 5(d)(v)(D), the Fair Market Value of such shares shall be deemed to be the public offering price of such shares. "Final Surrender Date" shall have the meaning set forth in Section 6(e). "Fundamental Change" means any of the following events: (i) the sale of all or substantially all of the assets of the Corporation; (ii) any event (A) which results in the registration of the Corporation's Common Stock under the Securities Exchange Act to be no longer required; (B) requiring the Corporation to make a filing under Schedule 13e-3 of the Securities Exchange Act; (C) substantially eliminating the public market for shares of Common Stock of the Corporation; or (D) causing a delisting of the Corporation's Common Stock from the American Stock Exchange (or any national securities exchange on which the Common Stock is listed) unless such Common Stock is delisted as a result of being listed on the Nasdaq Stock Market or another national securities exchange; (iii) any consolidation of the Corporation with, or merger of the Corporation into, any other person, any merger of another person into the Corporation or any other business combination involving the Corporation which results in the holders of the Corporation's stock immediately prior to giving effect to such transaction owning shares of capital stock of the surviving corporation in such transaction representing fifty percent (50%) or less of the total voting power of all shares of capital stock of such surviving corporation entitled to vote generally in the election of directors; (iv) the commencement by the Corporation of a voluntary case under the Federal bankruptcy laws or any other applicable Federal or state bankruptcy, insolvency or similar law; the consent by the Corporation to the entry of an order for relief in an involuntary case under such law or to the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of any substantial part of its property; any assignment by the Corporation for the benefit of its creditors; any admission by the Corporation in writing of its inability to pay its debts generally as they become due; the entry of a decree or order for relief in respect of the Corporation by a court having jurisdiction in the premises in an involuntary case under Federal bankruptcy laws or any other applicable Federal or state bankruptcy, insolvency or similar law appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other similar official) of the Corporation or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and on account of any such event the Corporation shall liquidate, dissolve or wind up; or the liquidation, dissolution or winding up of the Corporation under any other circumstances; Page 91 of __ 92 (v) an event of default (under the Credit Agreement or any Indenture) which has resulted in the acceleration of the Indebtedness outstanding under such Credit Agreement or Indenture, but only if such acceleration has not been cured, waived or otherwise annulled (including by way of repayment of the Indebtedness) within ten (10) days of such acceleration; (vi) any Person, together with "affiliates" and "associates" of such Person within the meaning of Rule 12b-2 of the Exchange Act, which is not now a beneficial owner of at least 1% of the equity securities of the Corporation shall acquire after the date hereof beneficial ownership within the meaning of Rule 13d-3 of the Exchange Act of greater than 50% of the voting power of the capital stock of the Corporation; or (vii) any failure to comply with any of the terms of Section 8 or Sections 9(c), 9(f) or 9(g) hereof, which failure is not cured within thirty (30) days of notice of its occurrence. "Guaranty" means (i) any guaranty or endorsement of the payment or performance of, or any contingent obligation in respect of, any indebtedness or other obligation of any other Person, (ii) any other arrangement whereby credit is extended to one obligor (directly or indirectly) on the basis of any promise or undertaking of another Person (a) to pay the indebtedness of such obligor, (b) to purchase an obligation owed by such obligor, (c) to purchase or lease assets (or to provide funds, goods or services) under circumstances that would enable such obligor to discharge one or more of its obligations or (d) to maintain the capital, working capital, solvency or general financial condition of such obligor, in each case whether or not such arrangement is disclosed in the balance sheet of such other Person or is referred to in a footnote thereto and (iii) any liability as a general partner of a partnership in respect of indebtedness or other obligations of such partnership; provided, however, that the term "Guaranty" shall not include (1) endorsements for collection or deposit in the ordinary course of business or (2) obligations of the Corporation or its Subsidiaries which would constitute Guaranties solely by virtue of the continuing liability of a Person which has sold assets subject to liabilities for the liabilities which were assumed by the Person acquiring the assets, unless such liability is required to be carried on the consolidated balance sheet of the Corporation. The amount of any Guaranty and the amount of indebtedness resulting from such Guaranty shall be the maximum amount of the guarantor's potential obligation in respect of such Guaranty. "Indebtedness" of any Person means, without duplication, as of any date as of which the amount thereof is to be determined, (i) all obligations of such Person to repay money borrowed (including, without limitation, all notes payable and drafts accepted representing extensions of credit, all obligations under letters of credit, all obligations evidenced by bonds, debentures, notes or other similar instruments and all obligations upon which interest charges are customarily paid), (ii) all Capitalized Leases in respect of which such Person is liable as lessee or as Page 92 of __ 93 the guarantor of the lessee, (iii) all monetary obligations which are secured by any Lien existing on property owned by such Person whether or not the obligations secured thereby have been incurred or assumed by such Person, (iv) all conditional sales contracts and similar title retention debt instruments under which such Person is obligated to make payments, (v) all Guaranties by such Person and (vi) all contractual obligations (whether absolute or contingent) of such Person to repurchase goods sold and distributed. "Indebtedness" shall not include, however, (1) Indebtedness of the Corporation to any of its wholly-owned Subsidiaries or Indebtedness of any wholly-owned Subsidiary to the Corporation or to another wholly-owned Subsidiary, and (2) any unfunded obligations in any employee pension benefit plan (as defined in the Employee Retirement Income Security Act of 1974) of the Corporation or of any Subsidiary. "Indenture" means any indenture, deed of trust or other similar instrument pursuant to which debt securities of the Corporation are outstanding, whether existing on the Issue Date or at any subsequent date, as amended, modified or the terms or which are waived from time to time. "Issue Date" means the date of the original issuance of the Series B Preferred Stock by the Corporation. "Junior Securities" mean the Common Stock and any other class of capital stock or series of preferred stock hereafter created by the Corporation which does not expressly provide that it ranks senior to or pari passu with the Series B Preferred Stock as to dividends, other distributions, liquidation preference or otherwise. "Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority or other security interest of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same effect as any of the foregoing, any assignment or other conveyance of any right to receive income and any assignment of receivables with recourse against the assignor), any filing of a financing statement as debtor under the Uniform Commercial Code or any similar statute and any agreement to give or make any of the foregoing. "Liquidation Value" shall have the meaning set forth in Section 3(a). "Market Price" means, as to any security on the date of determination thereof, the closing price of such security's sales on the principal United States securities exchange on which such security may at the time be listed, or, if there shall have been no sales on any such exchange on any day, the last trading price of such security on such day, or if there is no such price, the average of the bid and asked prices at the end of such day, on the Nasdaq Stock Market. If at any time such security is not listed on any exchange or the Nasdaq Stock Market, the Market Price shall be deemed to be the fair value thereof determined by an Page 93 of __ 94 investment banking firm of nationally recognized standing selected by the Board of Directors of the Corporation, as of the most recent practicable date when the determination is to be made, taking into account the value of the Corporation as a going concern, and without taking into account any lack of liquidity of such security or any discount for a minority interest. "Notice Period" shall have the meaning set forth in Section 10(a). "Parity Securities" mean the Series A Preferred Stock and any class of capital stock or series of preferred stock hereafter created by the Corporation with the prior written consent of the holders of two-thirds of the outstanding shares of Series B Preferred Stock, which expressly provides that it ranks pari passu with the Series B Preferred Stock as to dividends, other distributions, liquidation preference or otherwise. "Person" or "person" shall mean an individual, partnership, corporation, trust, unincorporated organization, joint venture, government or agency, political subdivision thereof, or any other entity of any kind. "Record Date" shall have the meaning set forth in Section 2(a)(iii). "Redemption Date" shall have the meaning set forth in Section 6(c). "Redemption Default" shall have the meaning set forth in Section 6(f). "Redemption Price" shall have the meaning set forth in Section 6(a). "Rule 144" means (i) Rule 144 under the Securities Act as such Rule is in effect from time to time and (ii) any successor rule, regulation or law, as in effect from time to time. "Rule 144A" means (i) Rule 144A under the Securities Act as such Rule is in effect from time to time and (ii) any successor rule, regulation or law, as in effect from time to time. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended. "Series A Preferred Stock" means the Corporation's Series A Convertible Preferred Stock, par value $0.01 per share. "Series B Liquidation Preference" shall have the meaning set forth in Section 3(a). Page 94 of __ 95 "Series B Preferred Stock" shall have the meaning set forth in the resolution paragraph in the preamble. Such Series B Preferred Stock ranks pari passu with the Series A Preferred Stock as to dividends, other distributions, liquidation preference or otherwise. "Subsidiary", with respect to any Person, means any corporation, association or other entity of which more than fifty percent (50%) of the total voting power of shares of stock or other equity interests (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is, at the time as of which any determination is being made, owned or controlled, directly or indirectly, by such Person or one or more of its Subsidiaries, or both. The term "Subsidiary" or "Subsidiaries" when used herein without reference to any particular Person, means a Subsidiary or Subsidiaries of the Corporation. EXCHANGE OF SHARES; CANCELLATION OF SURRENDERED SHARES REPLACEMENT. (a) SUBJECT TO SECTION 5 HEREOF, AT ANY TIME AT THE REQUEST OF ANY HOLDER OF SHARES OF SERIES B PREFERRED STOCK OF THE CORPORATION AT ITS ADDRESS PROVIDED UNDER SECTION 13 HEREOF, THE CORPORATION AT ITS EXPENSE (EXCEPT FOR ANY TRANSFER TAX ARISING OUT OF THE EXCHANGE) WILL ISSUE AND DELIVER TO OR UPON THE ORDER OF THE HOLDER IN EXCHANGE THEREFOR A NEW CERTIFICATE OR CERTIFICATES IN SUCH AMOUNT OR AMOUNTS AS SUCH HOLDER MAY REQUEST IN THE AGGREGATE REPRESENTING THE NUMBER OF SHARES OF SERIES B PREFERRED STOCK REPRESENTED BY SUCH SURRENDERED CERTIFICATES, AND REGISTERED IN THE NAME OF SUCH HOLDER OR AS SUCH HOLDER MAY DIRECT; PROVIDED, HOWEVER, THAT THE HOLDER AND ANY PROPOSED TRANSFEREE DELIVER TO THE CORPORATION SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE CORPORATION MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE IN COMPLIANCE WITH, PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR ANY STATE SECURITIES LAWS. ANY SHARE CERTIFICATE FOR SERIES B PREFERRED STOCK WHICH IS CONVERTED INTO CONVERSION SHARES IN WHOLE OR IN PART SHALL BE CANCELED BY THE CORPORATION, AND NO NEW SHARE CERTIFICATE FOR SERIES B PREFERRED STOCK SHALL BE ISSUED IN LIEU OF ANY SHARES OF SERIES B PREFERRED STOCK WHICH HAVE BEEN CONVERTED INTO CONVERSION SHARES. THE CORPORATION SHALL ISSUE A NEW CERTIFICATE WITH RESPECT TO ANY SHARES OF SERIES B PREFERRED STOCK WHICH WERE NOT CONVERTED INTO CONVERSION SHARES AND WERE REPRESENTED BY A CERTIFICATE WHICH WAS CONVERTED IN PART. UPON RECEIPT OF EVIDENCE SATISFACTORY TO THE CORPORATION OF THE LOSS, THEFT, DESTRUCTION OR MUTILATION OF ANY SHARE CERTIFICATE FOR SERIES B PREFERRED STOCK AND, IN THE CASE OF ANY SUCH LOSS, THEFT OR DESTRUCTION, UPON DELIVERY OF AN INDEMNITY AGREEMENT REASONABLY SATISFACTORY TO THE CORPORATION (IF REQUESTED BY THE CORPORATION), OR IN THE CASE OF ANY SUCH MUTILATION, UPON SURRENDER OF SUCH SHARE CERTIFICATE (WHICH SURRENDERED SHARE CERTIFICATE SHALL BE CANCELED BY THE CORPORATION), THE CORPORATION WILL ISSUE A NEW SHARE CERTIFICATE FOR SERIES B Page 95 of __ 96 PREFERRED STOCK, OF LIKE TENOR IN LIEU OF SUCH LOST, STOLEN, DESTROYED OR MUTILATED SHARE CERTIFICATE AS IF THE LOST, STOLEN, DESTROYED OR MUTILATED SHARE CERTIFICATE WERE THEN SURRENDERED FOR EXCHANGE. NOTICES. EXCEPT AS MAY OTHERWISE BE PROVIDED FOR HEREIN, ALL NOTICES REFERRED TO HEREIN SHALL BE IN WRITING, AND ALL NOTICES HEREUNDER SHALL BE DEEMED TO HAVE BEEN GIVEN (i) UPON RECEIPT, IN THE CASE OF A NOTICE OF CONVERSION GIVEN TO THE CORPORATION AS CONTEMPLATED IN SECTION 5(b) HEREOF, OR (II) IN ALL OTHER CASES, UPON THE EARLIER OF (x) RECEIPT OF SUCH NOTICE, (y) THREE (3) BUSINESS DAYS AFTER THE MAILING OF SUCH NOTICE IF SENT BY REGISTERED MAIL (UNLESS FIRST-CLASS MAIL SHALL BE SPECIFICALLY PERMITTED FOR SUCH NOTICE UNDER THE TERMS HEREOF) OR (z) THE BUSINESS DAY FOLLOWING SENDING SUCH NOTICE BY OVERNIGHT COURIER, IN ANY CASE WITH POSTAGE OR DELIVERY CHARGES PREPAID, ADDRESSED: IF TO THE CORPORATION, TO ITS OFFICES AT 370 SEVENTEENTH STREET, SUITE 2750, DENVER, CO 80202, ATTENTION: ERIK B. CARLSON, OR TO AN AGENT OF THE CORPORATION DESIGNATED AS PERMITTED BY THE CERTIFICATE OF INCORPORATION, OR, IF TO ANY HOLDER OF THE SERIES B PREFERRED STOCK, TO SUCH HOLDER AT THE ADDRESS OF SUCH HOLDER OF THE SERIES B PREFERRED STOCK AS LISTED IN THE STOCK RECORD BOOKS OF THE CORPORATION, OR TO SUCH OTHER ADDRESS AS THE CORPORATION OR HOLDER, AS THE CASE MAY BE, SHALL HAVE DESIGNATED BY NOTICE SIMILARLY GIVEN. FRACTIONAL SHARES. ANY SHARES OF COMMON STOCK ISSUED TO HOLDERS WHETHER AS A RESULT A DIVIDEND PAYMENT, A CONVERSION, A REDEMPTION OR OTHERWISE SHALL BE ISSUED IN WHOLE SHARES ONLY, WITH ANY FRACTIONAL SHARES BEING PAID IN CASH. THE AMOUNT OF CASH PAID IN THE CASE OF FRACTIONAL SHARES OF COMMON STOCK SHALL BE THE FAIR MARKET VALUE OF SUCH SHARES. ANY ADDITIONAL PREFERRED SHARES PAYABLE TO HOLDERS OF SERIES B PREFERRED STOCK WILL BE ISSUED IN WHOLE SHARE AMOUNTS WITH ANY FRACTIONAL SHARES HELD IN BOOK-ENTRY FORM BY THE CORPORATION'S TRANSFER AGENT. Page 96 of __ 97 IN WITNESS WHEREOF, TransMontaigne Inc. has caused this Certificate of Designations to be signed by its Chief Executive Officer and attested to by its Secretary, all as of the 27th day of June, 2002. TRANSMONTAIGNE INC. By: ------------------------------ Name: Donald H. Anderson Title: Chief Executive Officer Attest: By: ------------------------------ Name: Erik B. Carlson Title: Secretary Page 97 of __ -----END PRIVACY-ENHANCED MESSAGE-----