Exhibit 10.3
LETTER AMENDMENT NO. 6
to
TransMontaigne Inc. Master Shelf Agreement
As of September 30, 1999
The Prudential Insurance Company of America
U.S. Private Placement Fund
c/o Prudential Capital Group
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We refer to the Master Shelf Agreement dated as of April 17, 1997, as
amended by Letter Amendment No. 1 dated March 31, 1998, Letter Amendment No. 2
dated as of June 30, 1998, Letter Amendment No. 3 dated as of October 30, 1998,
Letter Amendment No. 4 dated as of March 25, 1999 and Letter Amendment No. 5
dated as of June 29, 1999 (as amended, the "Agreement"), among the undersigned,
TransMontaigne Inc., formerly known as TransMontaigne Oil Company, (the
"Company") and The Prudential Insurance Company of America ("Prudential") and
U.S. Private Placement Fund (collectively, the "Purchasers"). Unless otherwise
defined herein, the terms defined in the Agreement shall be used herein as
therein defined.
The Company has requested that you agree to certain amendments of the
terms of the Agreement, including the modification of financial covenants and
other covenants. You have indicated your willingness to so agree. Accordingly,
it is hereby agreed by you and us as follows:
1. Amendments to the Agreement. The Agreement is, effective the date first
above written, hereby amended as follows:
(a) ▇▇▇▇▇▇▇▇▇ ▇▇. Credit Fee. Paragraph 5Q is amended in its
entirety to read as follows:
"5Q. Credit Fee. (i) Primary Credit Fee. On June 30, 1999, the Company
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shall pay in respect of the fiscal quarter commencing July 1, 1999 to
each holder a credit fee equal to 0.375% of the principal amount of
Notes held by such holder on June 30,1999. On each day after June 30,
1999 on which, pursuant to
paragraph 5A, delivery is made, or should have been made (without any
grace), whichever is earlier (the "Delivery Date"), of financial
statements for the fiscal year ended June 30, 1999 and each fiscal
quarter or fiscal year, as the case may be, thereafter (the quarter in
respect of which, or ending the period for which, such financial
statements are being, or should have been, delivered is herein referred
to as the "Reference Quarter"), the Company shall pay, in respect of the
next fiscal quarter commencing after such Delivery Date (unless, in the
case of annual financial statements, such Delivery Date falls within the
second quarter after the Reference Quarter, in which case such payment
shall be in respect of the quarter in which such Delivery Date falls),
to each holder a credit fee equal to 0.375% of the principal amount of
Notes held by such holder as of the last day of such Reference Quarter,
if both (i) on such Delivery Date, the senior unsecured debt of the
Company is not rated BBB- or higher by S&P or Baa3 or higher by ▇▇▇▇▇'▇
and (ii) on the last day of such Reference Quarter, the Company is not
in compliance with one or more of the covenants contained in paragraphs
6A and 6B, provided, however, that for purposes of this paragraph 5Q
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only, compliance with the covenants contained in paragraphs 6A(1),
6A(2), 6A(3) and 6A(4) shall be determined using the percentages set
forth in the table below for the Reference Quarters ending on the dates
set forth in the table below in place of the relevant percentages set
forth in such paragraph, and provided, further that, for purposes of
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this paragraph 5Q(i), the proviso at the end of clause (a) of paragraph
6A(1) providing that the ratio used to determine compliance with such
paragraph may be as low as 150% so long as for the next succeeding
period of four consecutive fiscal quarters (which shall include the last
three quarters of the prior period) such ratio equals or exceeds 200%
shall not apply for purposes of determining compliance with paragraph
6A(1):
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Covenant June 30, 1999, September 30, March 31, 2001
1999, December 31, 1999, and thereafter
March 31, 2000, June 30, 2000,
September 30, 2000 and
December 31, 2000
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6A(1) 250% 275%
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6A(2) 60% 55%
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6A(3) 70% 60%
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6A(4) 300% 250%
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(ii) Secondary Credit Fee. On each Delivery Date after September 30
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1999, the Company shall pay, in respect of the next fiscal quarter
commencing after such Delivery Date (unless, in the case of annual
financial statements, such Delivery Date falls within the second quarter
after the Reference Quarter, in which case such payment shall be in
respect of the quarter in which such Delivery Date falls), to each
holder a credit fee in addition to the credit fee described in paragraph
5Q(i) above equal to 0.25% of the principal amount of Notes held by such
holder as of the last day of such Reference Quarter, if both (i) on such
Delivery Date, the senior unsecured debt of the Company is not rated
BBB- or higher by S&P or Baa3 or higher by ▇▇▇▇▇'▇ and (ii) on the last
day of such Reference Quarter, the Company is not in compliance with one
or more of the covenants contained in paragraphs 6A and 6B, provided,
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however, that for purposes of this paragraph 5Q(ii) only, compliance
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with the covenants contained in paragraphs 6A(1) and 6A(4) shall be
determined using the percentages set forth in the table below for the
Reference Quarters ending on the dates set forth in the table below in
place of the relevant percentages set forth in such paragraph, and
provided, further that, for purposes of this paragraph 5Q(ii), the
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proviso at the end of clause (a) of paragraph 6A(1) providing that the
ratio used to determine compliance with such paragraph may be as low as
150% so long as for the next succeeding period of four consecutive
fiscal quarters (which shall include the last three quarters of the
prior period) such ratio equals or exceeds 200% shall not apply for
purposes of determining compliance with paragraph 6A(1):
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Covenant September 30, 1999 and
thereafter
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6A(1) 200%
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6A(4) 350%
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(b) Paragraph 6A(1). Interest Coverage. Clause (i) of paragraph 6A(1) of
the Agreement is amended in full to read as follows:
"(i) For any period of four consecutive fiscal quarters of the Company,
commencing with such period ended September 30, 1999 and ending with such
period ended March 31, 2000, the ratio (expressed as a percentage) of (i)
the Consolidated EBITDA of the Company and its Subsidiaries for such period
to (ii) the Consolidated Interest Expense of the Company and its
Subsidiaries for such period to be less than 150%; for the period of four
consecutive fiscal quarters of the Company ended June 30, 2000, the ratio
(expressed as a percentage) of (i) the Consolidated EBITDA of the Company
and its Subsidiaries for such period to (ii) the Consolidated Interest
Expense
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of the Company and its Subsidiaries for such period to be less than
175%; and for any period of four consecutive fiscal quarters of the
Company, commencing with such period ended September 30, 2000, the ratio
(expressed as a percentage) of (i) the Consolidated EBITDA of the Company
and its Subsidiaries for such period to (ii) the Consolidated Interest
Expense of the Company and its Subsidiaries for such period to be less than
200%; provided, however, that for any single period of four consecutive
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fiscal quarters commencing with the period of four consecutive fiscal
quarters ended December 31, 2000, such ratio may be as low as 150% so long
as for the next succeeding period of four consecutive fiscal quarters
(which shall include the last three quarters of the prior period) such
ratio equals or exceeds 200%."
(c) Paragraph 6A(2). Leverage Ratio. Paragraph 6A(2) of the Agreement is
amended in full to read as follows:
"6A(2) Leverage Ratio. The Company will not permit at any time on
and after September 30, 1999 the Leverage Ratio of the Company and its
Subsidiaries to exceed 60%; provided, however, that so long as no
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Default or Event of Default shall exist on December 31, 2000, then on or
after such date the Leverage Ratio of the Company and its Subsidiaries may
exceed 60% but at no time shall exceed 65%."
(d) Paragraph 6A(4). Cash Flow Leverage Ratio. Paragraph 6A(4) of the
Agreement is amended in full to read as follows:
"6A(4) Cash Flow Leverage Ratio. The Company will not permit at any
time (i) on the last day of each fiscal quarter of the Company, commencing
with the fiscal quarter ended September 30, 1999 and ending with the fiscal
quarter ended March 31, 2000, the ratio (expressed as a percentage) of (a)
the Consolidated Net Liabilities of the Company and its Subsidiaries to (b)
the Consolidated Pro Forma EBITDA of the Company and its Subsidiaries for
the period of four consecutive fiscal quarters then ended to exceed 450%;
(ii) on the last day of each of the fiscal quarters of the Company ended
June 30, 2000 and September 30, 2000, the ratio (expressed as a percentage)
of (a) the Consolidated Net Liabilities of the Company and its Subsidiaries
to (b) the Consolidated Pro Forma EBITDA of the Company and its
Subsidiaries for the period of four consecutive fiscal quarters then ended
to exceed 400%; and (iii) on the last day of each fiscal quarter of the
Company, commencing with the fiscal quarter ended December 31, 2000, the
ratio (expressed as a percentage) of (a) the Consolidated Net Liabilities
of the Company and its Subsidiaries to (b) the Consolidated Pro Forma
EBITDA of the Company and its Subsidiaries for the period of four
consecutive fiscal quarters then ended to exceed 350%."
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(e) Paragraph 10B. Other Terms. Paragraph 10B of the Agreement is
amended by amending the definition of "Consolidated EBITDA" in full to read as
follows:
"'Consolidated EBITDA' shall mean, for any period, the total of:
(a) Consolidated Net Income; plus
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(b) all amounts deducted in computing such Consolidated Net Income in
respect of (i) depreciation, amortization and other non-cash charges
(including increases of reserves), (ii) Consolidated Interest Expense and
(iii) taxes based upon or measured by net income; plus
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(c) all amounts included in computing such Consolidated Net Income in
respect of any non-cash reductions in the value of Minimum Petroleum
Products Inventory Requirements; minus
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(d) all amounts included in computing such Consolidated Net Income in
respect of any non-cash increases in the value of Minimum Petroleum
Products Inventory Requirements; minus
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(e) all amounts included in computing such Consolidated Net Income in
respect of dividends received in any form other than cash; minus
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(f) taxes based upon or measured by net income that are actually paid
in cash during such period; minus
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(g) all amounts included in Consolidated Net Income in respect of
deferred income tax benefits; minus
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(h) all amounts representing payments from reserves to pay liabilities
during such period that were not deducted in computing such Consolidated
Net Income."
and (2) adding the following definition in the appropriate alphabetical order:
"'Minimum Petroleum Products Inventory Requirements' shall mean, on
any date, the physical amount of petroleum products, consisting of pipeline
fill, tank bottoms and intransit barrels and working stocks, which must be
maintained by the Company and its Subsidiaries within their pipelines and
terminals and those of third parties in order for the Company and its
Subsidiaries to meet the exchange and supply needs of their customers in an
effecient and timely manner."
(f) Schedule 5A(i). Covenant Compliance Certificate. Schedule 5A(i) is
replaced in its entirety by Schedule 5A(i) attached hereto.
2. Consent of Guarantors. Each Guarantor under the Guaranty contained in
paragraph 11 of the Agreement, hereby consents to this letter amendment and
hereby confirms and agrees that the Guaranty is, and shall continue to be, in
full force and effect and is hereby confirmed and ratified in all respects
except that, upon the effectiveness of, and on and after the date of,
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said letter amendment, all references in the Guaranty to the Agreement,
"thereunder", "thereof", or words of like import referring to the Agreement
shall mean the Agreement as amended by said letter amendment.
3. Consent of Pledgors. Each of the Company, TransMontaigne Transportation
Services Inc., TransMontaigne Product Services Inc. and TransMontaigne Pipeline
Inc. is a Pledgor under the Pledge Agreement (the "Pledgors") and each hereby
agrees (i) the Pledge Agreement shall continue to be, in full force and effect
and is hereby confirmed and ratified in all respects except that, upon the
effectiveness of, and on and after the date of, this letter amendment, all
references in the Pledge Agreement to the Loan Documents shall mean the Loan
Documents as amended by this Amendment and (ii) all of the Loan Security
described therein does, and shall continue to, secure the payment by the
Pledgors of their obligations under the Loan Documents, as amended by this
letter amendment.
4. Representations and Warranties. In order to induce you to enter into this
Amendment, each of the Obligors hereby represents and warrants that each of the
representations and warranties contained in paragraph 8 of the Agreement is true
and correct on the date hereof.
5. Miscellaneous.
(a) Effect on Agreement. On and after the effective date of this letter
amendment, each reference in the Agreement to "this Agreement", "hereunder",
"hereof", or words of like import referring to the Agreement, and each reference
in the Notes to "the Agreement", "thereunder", "thereof", or words of like
import referring to the Agreement, and each reference in the Pledge Agreement to
"the Shelf Agreement" "thereunder", "thereof", or words of like import referring
to the Agreement, shall mean the Agreement as amended by this letter amendment.
The Agreement, as amended by this letter amendment, is and shall continue to be
in full force and effect and is hereby in all respects ratified and confirmed.
The execution, delivery and effectiveness of this letter amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy under the Agreement nor constitute a waiver of any provision of the
Agreement.
(b) Counterparts. This letter amendment may be executed in any number of
counterparts and by any combination of the parties hereto in separate
counterparts, each of which counterparts shall be an original and all of which
taken together shall constitute one and the same letter amendment.
(c) Effectiveness. This letter amendment shall become effective as of the
date first
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above written when and if each of the conditions set forth in this subparagraph
(c) shall have been satisfied.
(I) Executed Counterparts. Counterparts of this letter amendment
shall have been executed by the Company, each Guarantor, each Pledgor and
you.
(II) No Default or Event of Default. No Default or Event of Default
under the Agreement shall have occurred and be continuing.
(III) Bank Consent. The Bank Agent and each other requisite holder,
if any, of Indebtedness issued under the Bank Agreement shall have
consented, to the extent required under the Bank Agreement and the
Intercreditor Agreement, to the modifications of the Agreement effected
hereby, the terms and conditions of such consent to be satisfactory to the
Purchasers, and shall have acknowledged that the Intercreditor Agreement
remains in full force and effect; and the covenants of the Company set
forth in the Bank Agreement shall have been amended to reflect the covenant
modifications of the Agreement made herein.
(IV) Fees. The holders of the Notes shall have received an amendment
fee in immediately available funds as follows:
The Prudential Insurance Company of America - $175,000.00:
Bank of New York
New York, NY
ABA No. ▇▇▇-▇▇▇-▇▇▇
For Credit to the Account of: The Prudential Insurance Company of
America
Account No. ▇▇▇-▇▇▇▇-▇▇▇
Re: TransMontaigne Amendment Fee
U.S. Private Placement Fund - $12,500.00:
Boston Safe Deposit and Trust Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇
For Credit to the Account of: U.S. Private Placement Fund
Account No. U1FF1000002
DDA No.: 108111
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(d) Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK.
If you agree to the terms and provisions hereof, please evidence your
agreement by executing and returning at least a counterpart of this letter
amendment to TransMontaigne Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
Very truly yours,
TRANSMONTAIGNE INC.
(f/k/a TransMontaigne Oil Company)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: President
Guarantors/Pledgors
TRANSMONTAIGNE PRODUCT SERVICES
MIDWEST INC. (f/k/a TransMontaigne
Product Services Inc.)
TRANSMONTAIGNE PIPELINE INC.
TRANSMONTAIGNE TERMINALING INC.
TRANSMONTAIGNE TRANSPORTATION
SERVICES INC.
BEAR PAW ENERGY INC.
TRANSMONTAIGNE PRODUCT SERVICES
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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As C.E.O. of each of the foregoing
corporations
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Agreed as of the date first above written:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ ▇▇▇ ▇. ▇▇▇▇
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Vice President
U.S. PRIVATE PLACEMENT FUND
By: Prudential Private Placement
Investors, L.P., Investment Advisor
By: Prudential Private Placement
Investors, Inc., its General Partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇
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Vice President
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