Letter Agreement
October 9, 2003
LB I Group, Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Re: Transfer of Series B Convertible Preferred Stock ("Series B Stock")
Ladies and Gentlemen:
This Letter Agreement is being delivered to you in connection with the
transfer of 32,095 shares (the "Shares") of the Series B Stock of
TransMontaigne Inc., a Delaware corporation (the "Company"), from First
Reserve Fund VII, Limited Partnership, a Delaware limited partnership
("Fund VII") and First Reserve Fund VIII, L.P., a Delaware limited
partnership ("Fund VIII" and with Fund VII, the "Sellers") to LB I Group,
Inc. (the "Buyer"), pursuant to the Stock Purchase Agreement, dated October
9, 2003, by and among Buyer and the Sellers (the "Purchase Agreement").
The Company and Buyer hereby agree as follows:
(a) This Letter Agreement shall not become effective until all of
the following conditions have been met:
(i) the consummation of the transactions contemplated by the
Purchase Agreement and the written notification of such
consummation provided by Buyer to the Company;
(ii) the execution and delivery of an amendment to the
Agreement to Elect Directors by and between First Reserve
Corporation and certain of its affiliates and the Company, dated
as of April 17, 1996, as amended, in form and substance
reasonably satisfactory to the Company, the effect of which
amendment shall be to decrease the number of directors that First
Reserve Corporation may designate to the Company's board of
directors from two to one; and
(iii) the receipt by the Company of a resignation from Xx.
Xxx Xxxxx from his position on the Company's board of directors.
If such conditions shall not have been met by October 9, 2003, this
Letter Agreement shall be null and void and have no further effect.
(b) The Company hereby consents to the assignment of the rights
and obligations of the Sellers under the Company's Preferred Stock
Recapitalization Agreement dated June 27, 2002 (the "Recapitalization
Agreement") to Buyer so that (i) Buyer shall be deemed an "Investor" (as
defined in the Recapitalization Agreement) and (ii) Buyer shall have the
rights and obligations as an "Investor" under the Recapitalization
Agreement provided in Sections 4, 5, 6, 7, 10, 11, 13, 14, and 15 thereof.
(c) The Company hereby consents to the assignment of the rights
and obligations of the Sellers under the Company's Stockholders' Agreement
dated as of June 28, 2002 (the "Stockholders' Agreement"), to Buyer so that
(i) Buyer shall be and have all rights and obligations as an "Investor" and
a member of the "Investor Group" (each as defined in the Stockholders'
Agreement), including without limitation such rights provided in Sections 2
and 3 of the Stockholders' Agreement, (ii) the Shares shall be "Investor
Shares" (as defined in the Stockholders' Agreement), and (iii) for purposes
of the calculation required by Section 3 of the Stockholders' Agreement, so
long as the Shares are owned beneficially by Buyer or its Affiliates, the
Shares shall be treated as though they continued to be beneficially owned
by the original Investors.
(d) The Company hereby consents to the assignment of the rights
and obligations of the Sellers under the Company's Preferred Stock Investor
Registration Rights Agreement dated as of June 27, 2002 (the "Registration
Rights Agreement") to Buyer so that (i) Buyer shall be and have all rights
and obligations as a "Series B Investor" and a "Preferred Stock Investor"
(each as defined in the Registration Rights Agreement), including without
limitation such rights provided in Sections 2.1 through 2.5 of the
Registration Rights Agreement and (ii) the Shares shall be "Registrable
Securities" and "Series B Investor Shares" (each as defined in the
Registration Rights Agreement).
(e) The Company hereby agrees that, upon consummation of the
transactions contemplated by the Purchase Agreement, the Company will take
all such actions that are necessary or advisable in order to cause Xxxxx X.
Xxxxxxx, or such other designee of Buyer as Buyer may determine ("Buyer
Designee") to be elected as a member of the Company's board of directors
(the "Board"), and thereafter will include Buyer Designee on the slate of
directors recommended by the Company, and will oppose any proposal to
remove Buyer Designee, at each meeting of stockholders at which the
election or removal of directors is on the agenda until such time as Buyer
no longer beneficially owns at least 5% of the Company's outstanding common
stock (including outstanding common equivalents) (the "Board Termination
Event"). Upon the occurrence of the Board Termination Event, Buyer's right
to designate a member of the Company's Board and the Company's obligations
with respect thereto shall cease and Buyer will cause Buyer Designee to
resign from the Board.
(f) The Company represents and warrants to Buyer that:
(i) Upon the conversion of any of the Shares into shares of
the Company's common stock, par value $.01 per share ("Common
Shares"), in accordance with Section 5 of the Company's
Certificate of Designations of Series B Convertible Preferred
Stock, such Common Shares shall be validly issued and
outstanding, fully paid and non-assessable, free and clear of all
liens, taxes, proxies, rights (including rights of first offer
and tag along rights) or other encumbrances, and not subject to
preemptive, participation or similar rights of the stockholders
of the Company or others. The Common Shares issuable upon
conversion of the Shares have been validly reserved for issuance.
(ii) At September 22, 2003, the authorized capital stock of
the Company consists of (i) 80,000,000 Common Shares, of which
40,681,030 shares are validly issued and outstanding, fully paid
and nonassessable, and (ii) 2,000,000 shares of the Company's
preferred stock, par value $0.01 per share, of which 100,000 are
designated as Series B Convertible Preferred Stock, of which
72,890 are validly issued and outstanding, fully paid and
nonassessable. Other than with respect to the Company documents
referred to in sections (b) through (d) above or as disclosed in
the Annual Report on From 10-K for the year ended June 30, 2003,
there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, shares of
any class of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is
or may become bound relating to the issuance, repurchase or
transfer of any shares of capital stock or options, warrants or
rights to purchase or acquire any shares of capital stock of the
Company or any of its subsidiaries.
(iii) The transfer of the Shares from the Sellers to Buyer
does not trigger any control share acquisition, business
combination, poison pill or other similar anti-takeover statute
or contractual provision applicable to the Company.
(iv) The advanced notice provisions applicable to the
transfer of the Shares in the Company's Certificate of
Designations of Series B Convertible Preferred Stock and the
Recapitalization Agreement have been satisfied.
[Remainder of Page Intentionally Blank - Signatures Follow]
When accepted by you, this Letter Agreement will constitute the
agreement of the Company and Buyer with respect to the foregoing. Please
indicate your acceptance be signing in the space provided below.
Very truly yours,
By: /s/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
AGREED AND ACCEPTED:
LB I GROUP INC.
By: /s/ Xxxx Xxxxxxxxx
-------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
Date: October 9. 2003
