Document:

Exhibit 4.2

 

Execution Version

 

 

 

 

TRANSMONTAIGNE PARTNERS L.P.,
 TLP FINANCE CORP.

 

AND EACH OF THE GUARANTORS PARTY HERETO

 

6.125% SENIOR NOTES DUE 2026

 

 

FIRST SUPPLEMENTAL INDENTURE

 

Dated as of February 12, 2018

 

 

U.S. BANK NATIONAL ASSOCIATION

 

Trustee

 

 

 

 

 

CROSS-REFERENCE TABLE*

 

	
Trust Indenture
    Act Section
    	
 
    	
Indenture
    Section
    
	
310(a)(1)
    	
 
    	
8.10
    
	
(a)(2)
    	
 
    	
8.10
    
	
(a)(3)
    	
 
    	
N/A
    
	
(a)(4)
    	
 
    	
N/A
    
	
(a)(5)
    	
 
    	
8.10
    
	
(b)
    	
 
    	
8.03
    
	
(c)
    	
 
    	
N/A
    
	
311(a)
    	
 
    	
8.11
    
	
(b)
    	
 
    	
8.11
    
	
(c)
    	
 
    	
N/A
    
	
312(a)
    	
 
    	
3.05
    
	
(b)
    	
 
    	
13.03
    
	
(c)
    	
 
    	
13.03
    
	
313(a)
    	
 
    	
8.06
    
	
(b)(1)
    	
 
    	
N/A
    
	
(b)(2)
    	
 
    	
8.06, 8.07
    
	
(c)
    	
 
    	
8.06, 13.02
    
	
(d)
    	
 
    	
8.06
    
	
314(a)
    	
 
    	
5.03, 5.04, 13.02
    
	
(b)
    	
 
    	
N/A
    
	
(c)(1)
    	
 
    	
13.04
    
	
(c)(2)
    	
 
    	
13.04
    
	
(c)(3)
    	
 
    	
N/A
    
	
(d)
    	
 
    	
N/A
    
	
(e)
    	
 
    	
13.05
    
	
(f)
    	
 
    	
N/A
    
	
315(a)
    	
 
    	
8.01
    
	
(b)
    	
 
    	
8.05, 13.02
    
	
(c)
    	
 
    	
8.01
    
	
(d)
    	
 
    	
8.01
    
	
(e)
    	
 
    	
7.11
    
	
316(a)(last sentence)
    	
 
    	
3.08
    
	
(a)(1)(A)
    	
 
    	
7.05
    
	
(a)(1)(B)
    	
 
    	
7.04
    
	
(a)(2)
    	
 
    	
N/A
    
	
(b)
    	
 
    	
7.07
    
	
(c)
    	
 
    	
10.01
    
	
317(a)(1)
    	
 
    	
7.08
    
	
(a)(2)
    	
 
    	
7.09
    
	
(b)
    	
 
    	
3.04
    
	
318(a)
    	
 
    	
13.01
    
	
(b)
    	
 
    	
N/A
    
	
(c)
    	
 
    	
9.02, 13.01
    

 

N/A means not applicable.

*This Cross-Reference Table is not part of this First Supplemental Indenture.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 1
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 1.01
    	
 
    	
Application of this   First Supplemental Indenture
    	
2
    
	
Section 1.02
    	
 
    	
Effect of this First   Supplemental Indenture
    	
2
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 2
    	
 
    
	
 
    	
 
    	
DEFINITIONS AND   INCORPORATION
    	
 
    
	
 
    	
 
    	
BY REFERENCE
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 2.01
    	
 
    	
Definitions
    	
3
    
	
Section 2.02
    	
 
    	
Other Definitions
    	
26
    
	
Section 2.03
    	
 
    	
Incorporation by   Reference of Trust Indenture Act
    	
27
    
	
Section 2.04
    	
 
    	
Rules of   Construction
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 3
    	
 
    
	
 
    	
 
    	
THE NOTES
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 3.01
    	
 
    	
Form and Dating
    	
27
    
	
Section 3.02
    	
 
    	
Execution and   Authentication
    	
28
    
	
Section 3.03
    	
 
    	
Registrar and Paying   Agent
    	
28
    
	
Section 3.04
    	
 
    	
Paying Agent to Hold   Money in Trust
    	
29
    
	
Section 3.05
    	
 
    	
Holder Lists
    	
29
    
	
Section 3.06
    	
 
    	
Transfer and Exchange
    	
29
    
	
Section 3.07
    	
 
    	
Replacement Notes
    	
33
    
	
Section 3.08
    	
 
    	
Outstanding Notes
    	
33
    
	
Section 3.09
    	
 
    	
Treasury Notes
    	
34
    
	
Section 3.10
    	
 
    	
Temporary Notes
    	
34
    
	
Section 3.11
    	
 
    	
Cancellation
    	
34
    
	
Section 3.12
    	
 
    	
Defaulted Interest
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 4
    	
 
    
	
 
    	
 
    	
REDEMPTION AND   PREPAYMENT
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 4.01
    	
 
    	
Notices to Trustee
    	
35
    
	
Section 4.02
    	
 
    	
Selection of Notes to   Be Redeemed
    	
35
    
	
Section 4.03
    	
 
    	
Notice of Redemption
    	
35
    
	
Section 4.04
    	
 
    	
Effect of Notice of   Redemption
    	
36
    
	
Section 4.05
    	
 
    	
Deposit of Redemption   or Purchase Price
    	
36
    
	
Section 4.06
    	
 
    	
Notes Redeemed or   Purchased in Part
    	
37
    
	
Section 4.07
    	
 
    	
Optional Redemption
    	
37
    
	
Section 4.08
    	
 
    	
Mandatory Redemption
    	
38
    
	
Section 4.09
    	
 
    	
Offer to Purchase by   Application of Excess Proceeds
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 5
    	
 
    
	
 
    	
 
    	
COVENANTS
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 5.01
    	
 
    	
Payment of Notes
    	
40
    
	
Section 5.02
    	
 
    	
Maintenance of Office   or Agency
    	
40
    
	
Section 5.03
    	
 
    	
Reports
    	
40
    

 

i

 

	
Section 5.04
    	
 
    	
Compliance Certificate
    	
41
    
	
Section 5.05
    	
 
    	
Taxes
    	
42
    
	
Section 5.06
    	
 
    	
Stay, Extension and   Usury Laws
    	
42
    
	
Section 5.07
    	
 
    	
Restricted Payments
    	
42
    
	
Section 5.08
    	
 
    	
Dividend and Other   Payment Restrictions Affecting Subsidiaries
    	
46
    
	
Section 5.09
    	
 
    	
Incurrence of   Indebtedness and Issuance of Disqualified Equity
    	
47
    
	
Section 5.10
    	
 
    	
Asset Sales
    	
51
    
	
Section 5.11
    	
 
    	
Transactions with   Affiliates
    	
53
    
	
Section 5.12
    	
 
    	
Liens
    	
55
    
	
Section 5.13
    	
 
    	
Limitations on Finance   Corp. Activities
    	
56
    
	
Section 5.14
    	
 
    	
Corporate Existence
    	
56
    
	
Section 5.15
    	
 
    	
Offer to Repurchase   Upon Change of Control
    	
56
    
	
Section 5.16
    	
 
    	
Additional Guarantees
    	
58
    
	
Section 5.17
    	
 
    	
Designation of   Restricted and Unrestricted Subsidiaries
    	
58
    
	
Section 5.18
    	
 
    	
Termination of   Covenants
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 6
    	
 
    
	
 
    	
 
    	
SUCCESSORS
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 6.01
    	
 
    	
Merger, Consolidation   or Sale of Assets
    	
59
    
	
Section 6.02
    	
 
    	
Successor Corporation   Substituted
    	
61
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 7
    	
 
    
	
 
    	
 
    	
DEFAULTS AND   REMEDIES
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 7.01
    	
 
    	
Events of Default
    	
61
    
	
Section 7.02
    	
 
    	
Acceleration
    	
63
    
	
Section 7.03
    	
 
    	
Other Remedies
    	
63
    
	
Section 7.04
    	
 
    	
Waiver of Past Defaults
    	
64
    
	
Section 7.05
    	
 
    	
Control by Majority
    	
64
    
	
Section 7.06
    	
 
    	
Limitation on Suits
    	
64
    
	
Section 7.07
    	
 
    	
Rights of Holders of   Notes to Receive Payment
    	
64
    
	
Section 7.08
    	
 
    	
Collection Suit by   Trustee
    	
64
    
	
Section 7.09
    	
 
    	
Trustee May File   Proofs of Claim
    	
65
    
	
Section 7.10
    	
 
    	
Priorities
    	
65
    
	
Section 7.11
    	
 
    	
Undertaking for Costs
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 8
    	
 
    
	
 
    	
 
    	
TRUSTEE
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 8.01
    	
 
    	
Duties of Trustee
    	
66
    
	
Section 8.02
    	
 
    	
Rights of Trustee
    	
67
    
	
Section 8.03
    	
 
    	
Individual Rights of   Trustee
    	
67
    
	
Section 8.04
    	
 
    	
Trustee’s Disclaimer
    	
67
    
	
Section 8.05
    	
 
    	
Notice of Defaults
    	
67
    
	
Section 8.06
    	
 
    	
Reports by Trustee to   Holders of the Notes
    	
68
    
	
Section 8.07
    	
 
    	
Compensation and   Indemnity
    	
68
    
	
Section 8.08
    	
 
    	
Replacement of Trustee
    	
69
    
	
Section 8.09
    	
 
    	
Successor Trustee by   Merger, etc.
    	
70
    
	
Section 8.10
    	
 
    	
Eligibility;   Disqualification
    	
70
    
	
Section 8.11
    	
 
    	
Preferential Collection   of Claims Against the Issuers
    	
70
    

 

ii

 

	
 
    	
 
    	
ARTICLE 9
    	
 
    
	
 
    	
 
    	
LEGAL DEFEASANCE   AND COVENANT DEFEASANCE
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 9.01
    	
 
    	
Option to Effect Legal   Defeasance or Covenant Defeasance
    	
70
    
	
Section 9.02
    	
 
    	
Legal Defeasance and   Discharge
    	
70
    
	
Section 9.03
    	
 
    	
Covenant Defeasance
    	
71
    
	
Section 9.04
    	
 
    	
Conditions to Legal or Covenant   Defeasance
    	
71
    
	
Section 9.05
    	
 
    	
Deposited Money and   Government Securities to be Held in Trust; Other Miscellaneous Provisions
    	
72
    
	
Section 9.06
    	
 
    	
Repayment to the   Issuers
    	
73
    
	
Section 9.07
    	
 
    	
Reinstatement
    	
73
    
	
 
    	
 
    	
ARTICLE 10
    	
 
    
	
 
    	
 
    	
AMENDMENT,   SUPPLEMENT AND WAIVER
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 10.01
    	
 
    	
Without Consent of   Holders of Notes
    	
74
    
	
Section 10.02
    	
 
    	
With Consent of Holders   of Notes
    	
75
    
	
Section 10.03
    	
 
    	
Revocation and Effect   of Consents
    	
76
    
	
Section 10.04
    	
 
    	
Notation on or Exchange   of Notes
    	
76
    
	
Section 10.05
    	
 
    	
Trustee to Sign   Amendments, etc.
    	
77
    
	
Section 10.06
    	
 
    	
Compliance with Trust   Indenture Act
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 11
    	
 
    
	
 
    	
 
    	
NOTE GUARANTEES
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 11.01
    	
 
    	
Guarantee
    	
77
    
	
Section 11.02
    	
 
    	
Limitation on Guarantor   Liability
    	
78
    
	
Section 11.03
    	
 
    	
Execution and Delivery   of Notation of Note Guarantee
    	
78
    
	
Section 11.04
    	
 
    	
Guarantors   May Consolidate, etc., on Certain Terms
    	
79
    
	
Section 11.05
    	
 
    	
Releases
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 12
    	
 
    
	
 
    	
 
    	
SATISFACTION AND   DISCHARGE
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 12.01
    	
 
    	
Satisfaction and   Discharge
    	
80
    
	
Section 12.02
    	
 
    	
Application of Trust Money
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
ARTICLE 13
    	
 
    
	
 
    	
 
    	
MISCELLANEOUS
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Section 13.01
    	
 
    	
Trust Indenture Act   Controls
    	
81
    
	
Section 13.02
    	
 
    	
Notices
    	
82
    
	
Section 13.03
    	
 
    	
Communication by   Holders of Notes with Other Holders of Notes
    	
83
    
	
Section 13.04
    	
 
    	
Certificate and Opinion   as to Conditions Precedent
    	
83
    
	
Section 13.05
    	
 
    	
Statements Required in   Certificate or Opinion
    	
83
    
	
Section 13.06
    	
 
    	
Rules by Trustee   and Agents
    	
83
    
	
Section 13.07
    	
 
    	
No Personal Liability   of Directors, Officers, Employees and Stockholders
    	
83
    
	
Section 13.08
    	
 
    	
Governing Law
    	
84
    
	
Section 13.09
    	
 
    	
No Adverse   Interpretation of Other Agreements
    	
84
    
	
Section 13.10
    	
 
    	
Successors
    	
84
    
	
Section 13.11
    	
 
    	
Severability
    	
84
    
	
Section 13.12
    	
 
    	
Counterpart Originals
    	
84
    
	
Section 13.13
    	
 
    	
Table of Contents,   Headings, etc.
    	
84
    
	
Section 13.14
    	
 
    	
Payment Date Other Than   a Business Day
    	
84
    
	
Section 13.15
    	
 
    	
Evidence of Action by   Holder
    	
85
    

 

iii

 

EXHIBITS

 

	
Exhibit A
    	
FORM OF GLOBAL   NOTE
    
	
Exhibit B
    	
FORM OF NOTATION   OF GUARANTEE
    
	
Exhibit C
    	
FORM OF SUPPLEMENTAL   INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS
    

 

iv

 

This First Supplemental Indenture, dated as of February 12, 2018 (the “First Supplemental Indenture”), is among TransMontaigne Partners L.P., a Delaware limited partnership (“TransMontaigne Partners”), TLP Finance Corp., a Delaware corporation (“Finance Corp.” and, together with TransMontaigne Partners, the “Issuers”), the subsidiary guarantors listed on the signature pages hereof (each, a “Guarantor” and collectively, the “Guarantors”) and U.S. Bank National Association, a national banking association, as trustee under the Indenture, dated as of February 12, 2018, among the Issuers and the Trustee (the “Base Indenture” and, as amended and supplemented by this First Supplemental Indenture in respect of the Notes (as herein defined) and otherwise amended and supplemented from time to time, the “Indenture”).

 

The Issuers, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Issuers’ Initial Notes and Additional Notes:

 

RECITALS

 

The Issuers and the Guarantors have duly authorized, executed and delivered the Base Indenture to provide for the issuance from time to time of the Issuers’ debentures, notes or other debt instruments (herein called the “Securities”), to be issued in one or more series, which Securities may be guaranteed by each of the Guarantors, as the Base Indenture provides.

 

Section 9.1(i) of the Base Indenture provides that the Issuers and the Trustee may enter into indentures supplemental to the Base Indenture, without the consent of any Securityholder (as defined in the Base Indenture), to provide for the issuance of and establish the form and terms and conditions of any Security as permitted by the Base Indenture.

 

Pursuant to Sections 2.1 and 2.2 of the Base Indenture, the Issuers desire to execute this First Supplemental Indenture to establish the form and terms, and to provide for the issuance, of a series of senior notes designated as 6.125% Senior Notes due 2026 in an initial aggregate principal amount of $300,000,000 (the “Initial Notes”).

 

From time to time subsequent to the Issue Date (as herein defined), the Issuers may, if permitted to do so pursuant to the terms of the Indenture, the Initial Notes and the terms of their other contractual obligations existing on such future date, issue additional senior notes of the same series as the Initial Notes in accordance with this First Supplemental Indenture (the “Additional Notes” and, together with the Initial Notes, the “Notes”), pursuant to this First Supplemental Indenture.

 

The Issuers and the Guarantors are members of the same consolidated group of companies.  The Guarantors will derive direct and indirect economic benefit from the issuance of the Securities.  Accordingly, each Guarantor has duly authorized the execution and delivery of this First Supplemental Indenture to provide for its full, unconditional and joint and several Guarantee (as herein defined) of the Notes to the extent provided in or pursuant to the Indenture.

 

This First Supplemental Indenture is subject to the provisions of the Trust Indenture Act of 1939, as amended, that are required to be a part of this First Supplemental Indenture and shall, to the extent applicable, be governed by such provisions.

 

The Notes, when executed by the Issuers and authenticated and delivered hereunder and duly issued by the Issuers, shall constitute the valid obligations of the Issuers. The Guarantees, when the Notes have been executed by the Issuers and authenticated and delivered hereunder and duly issued by the Issuers, shall constitute the valid obligations of the Guarantors.  The Indenture constitutes a valid agreement of each of the Issuers and the Guarantors, in accordance with its terms.

 

1

 

ARTICLE 1

 

APPLICATION OF FIRST SUPPLEMENTAL INDENTURE
 AND CREATION OF THE INITIAL NOTES

 

Section 1.01          Application of this First Supplemental Indenture.

 

Notwithstanding any other provision of this First Supplemental Indenture, the provisions of this First Supplemental Indenture, including as provided in Section 1.02 below, and the Guarantees of the Notes by the Guarantors are expressly and solely for the benefit of the Holders of the Notes and shall not apply to any other series of Securities that may be issued hereafter under the Base Indenture.  The Notes constitute a series of Securities (as defined in the Base Indenture) as provided in Sections 2.1 and 2.2 of the Base Indenture.  Unless otherwise expressly specified, references in this First Supplemental Indenture to specific Article numbers or Section numbers refer to Articles and Sections contained in this First Supplemental Indenture, and not the Base Indenture or any other document.

 

Section 1.02          Effect of this First Supplemental Indenture.

 

With respect to the Notes (and any notation of Note Guarantee endorsed thereon) only, the Base Indenture shall be supplemented and amended pursuant to Section 9.1 thereof to establish the form and terms of the Notes (and any notation of Note Guarantee endorsed thereon) as set forth in this First Supplemental Indenture, including as follows:

 

(1)           Definitions.  The provisions of Article I of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 2 of this First Supplemental Indenture;

 

(2)           Security Forms.  The provisions of Article II of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 3 of this First Supplemental Indenture;

 

(3)           Redemption.  The provisions of Article III of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 4 of this First Supplemental Indenture;

 

(4)           Covenants.  The provisions of Article IV of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 5 of this First Supplemental Indenture;

 

(5)           Successors.  The provisions of Article V of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 6 of this First Supplemental Indenture;

 

(6)           Defaults and Remedies.  The provisions of Article VI of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 7 of this First Supplemental Indenture;

 

(7)           The Trustee.  The provisions of Article VII of the Base Indenture are deleted in their entirety by the provisions of Article 8 of this First Supplemental Indenture;

 

(8)           Satisfaction and Discharge of Indenture; Defeasance.  The provisions of Article VIII of the Base Indenture are deleted and replaced in their entirety by the provisions of Articles 9 and 12 of this First Supplemental Indenture;

 

(9)          Amendments and Waivers.  The provisions of Article IX of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 10 of this First Supplemental Indenture;

 

2

 

(10)        Guarantees.  Certain of the provisions relating to the Guarantees of the Notes are set forth in Article 11 of this First Supplemental Indenture.

 

(11)         Miscellaneous Provisions.  The provisions of Article X of the Base Indenture are deleted and replaced in their entirety by the provisions of Article 13 of this First Supplemental Indenture; and

 

(12)         Sinking Fund. The provisions of Article XI of the Base Indenture are deleted in their entirety.

 

To the extent that the provisions of this First Supplemental Indenture (including those referred to in clauses (1) through (12) above) conflict with any provision of the Base Indenture, the provisions of this First Supplemental Indenture shall govern and be controlling, but solely with respect to the Notes (and any notation of Guarantee endorsed thereon).

 

ARTICLE 2

DEFINITIONS AND INCORPORATION
 BY REFERENCE

 

Section 2.01          Definitions.

 

“Acquired Debt” means, with respect to any specified Person:

 

(1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person, but excluding Indebtedness which is extinguished, retired or repaid in connection with such Person merging with or becoming a Subsidiary of such specific Person; and

 

(2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

 

“Additional Notes” means additional Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 3.02 and 4.07 hereof, as part of the same series as the Initial Notes.

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

 

“Agent” means any Registrar or Paying Agent.

 

“Applicable Premium” means, with respect to any Note at the time of determination, the greater of:

 

(1) 1.00% of the principal amount of the Note; or

 

(2) the excess of:  (a) the present value at such time of (i) the redemption price of the Note at February 15, 2021 (such redemption price being set forth in the table appearing in Section

 

3

 

4.07 hereof) plus (ii) all required interest payments due on the Note through February 15, 2021 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of the Note, if greater.

 

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

 

“Asset Sale” means:

 

(1) the sale, lease, conveyance or other disposition of any assets or rights; provided that the sale, lease, conveyance or other disposition of all or substantially all of the assets of TransMontaigne Partners and its Restricted Subsidiaries taken as a whole will be governed by Section 5.15 hereof and/or Section 6.01 hereof and not by Section 5.10 hereof; and

 

(2) the issuance of Equity Interests in any of TransMontaigne Partners’ Restricted Subsidiaries or the sale of Equity Interests in any of its Restricted Subsidiaries.

 

Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

 

(1) any sale, assignment, lease, license, transfer, abandonment or other disposition of (A) damaged, worn-out, unserviceable or other obsolete or excess equipment or other property or (B) other property no longer necessary for the proper conduct of the business of TransMontaigne Partners or any of its Restricted Subsidiaries;

 

(2) any single transaction or series of related transactions that: (a) involves assets having a Fair Market Value of less than $20.0 million or (b) results in net proceeds to TransMontaigne Partners and its Restricted Subsidiaries of less than $20.0 million;

 

(3) a transfer of assets between or among TransMontaigne Partners and its Restricted Subsidiaries;

 

(4) an issuance of Equity Interests by a Restricted Subsidiary of TransMontaigne Partners to TransMontaigne Partners or to a Restricted Subsidiary of TransMontaigne Partners;

 

(5) the sale or lease of products, services or accounts receivable in the ordinary course of business;

 

(6) the sale or other disposition of cash or Cash Equivalents, Hedging Obligations or other financial instruments in the ordinary course of business;

 

(7) a Restricted Payment that does not violate Section 5.07 hereof or a Permitted Investment;

 

(8) any trade or exchange by TransMontaigne Partners or any Restricted Subsidiary of properties or assets of any type for properties or assets of any type owned or held by another Person, including any disposition of some but not all of the Equity Interests of a Restricted Subsidiary in exchange for assets or properties and after which the Person whose Equity Interests have been so disposed of continues to be a Restricted Subsidiary, provided that the Fair Market Value of the properties or assets traded or exchanged by TransMontaigne Partners or such

 

4

 

Restricted Subsidiary (together with any cash or Cash Equivalent together with the liabilities assumed by such other Person) is reasonably equivalent to the Fair Market Value of the properties or assets (together with any cash or Cash Equivalent together with liabilities assumed by TransMontaigne Partners or such Restricted Subsidiary) to be received by TransMontaigne Partners or such Restricted Subsidiary; and provided further that any cash received must be applied in accordance with Section 5.10 hereof;

 

(9) the creation or perfection of a Lien that is not prohibited by Section 5.12 hereof;

 

(10) surrender or waiver of contract rights or the settlement, release or surrender of contract, tort or other claims of any kind;

 

(11) the grant in the ordinary course of business of any non-exclusive license of patents, trademarks, registrations therefor and other similar intellectual property; and

 

(12) any disposition of defaulted receivables that arose in the ordinary course of business for collection.

 

“Attributable Debt” in respect of a sale-and-leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale-and-leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended.  As used in the preceding sentence, “net rental payments” under any lease for any such period shall mean the sum of rental and other payments required to be paid with respect to such period by the lessee thereunder, excluding any amounts required to be paid by such lessee on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges.  In the case of any lease that is terminable by the lessee upon payment of penalty, such net rental payment shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated.  For purposes of this definition, present value shall be calculated using a discount rate equal to the rate of interest implicit in the subject transaction, determined in accordance with GAAP; provided, however, that if such sale-and-leaseback transaction results in a Capital Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capital Lease Obligation.”

 

“Available Cash” has the meaning assigned to such term in the Partnership Agreement, as in effect on the Issue Date.

 

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

 

“Base Indenture” has the meaning set forth in the Preamble.

 

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time.  The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

 

“Board of Directors” means:

 

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(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

 

(2) with respect to a partnership, the board of directors or board of managers of the general partner of the partnership, or in the case of TransMontaigne Partners, the board of directors of TransMontaigne GP L.L.C.;

 

(3) with respect to a limited liability company, the board of managers or directors, the managing member or members or any controlling committee of managing members thereof; and

 

(4) with respect to any other Person, the board or committee of such Person serving a similar function.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the applicable person to have been adopted by the Board of Directors of such person or pursuant to authorization by the Board of Directors of such person and to be in full force and effect on the date of the certificate and delivered to the Trustee.

 

“Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York or another place of payment are authorized or required by law to close.

 

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation shall be, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at such time be required to be capitalized on a balance sheet in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

 

“Capital Stock” means:

 

(1) in the case of a corporation, corporate stock;

 

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

(3) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

 

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock.

 

“Cash Equivalents” means:

 

(1) United States dollars;

 

(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency thereof (provided that the full faith and credit of such government is

 

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pledged in support of those securities) having maturities of not more than one year from the date of acquisition thereof;

 

(3) time deposits with, certificates of deposit, bankers’ acceptances or Eurodollar time deposits of, any commercial bank that (a) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia or any United States branch of a foreign bank, and is a member of the Federal Reserve System, (b) issues long term securities with a rating of at least A- (or then equivalent grade, in each case with a stable outlook) by S&P and A3 (or then equivalent grade, in each case with a stable outlook) by Moody’s at the time of acquisition and (c) has combined capital and surplus of at least $500,000,000, in each case with maturities of not more than one year from the date of acquisition thereof;

 

(4) commercial paper of an issuer rated at least “A-2” (or the then equivalent grade) by S&P or “P-2” (or the then equivalent grade) by Moody’s at the time of acquisition or guaranteed by a letter of credit issued by a financial institution rated at least A- (or then equivalent grade, in each case with stable outlook) by S&P and A3 (or then equivalent grade, in each case with stable outlook) by Moody’s at the time of acquisition and such financial institution otherwise meets the requirements of subsections (a) and (c) of clause (3) of this definition, in each case having a tenor of not more than 270 days;

 

(5) taxable and tax-exempt municipal securities rated at least A- (or then equivalent grade) by S&P and A3 (or then equivalent grade) by Moody’s, including variable rate municipal securities, having maturities or put rights of not more than one year from the date of acquisition;

 

(6) corporate or bank debt of an issuer rated at least A- (or then equivalent grade, in each case with a stable outlook) by S&P and A3 (or then equivalent grade, in each case with stable outlook) by Moody’s at the time of acquisition and having maturities of not more than one year from the date of acquisition;

 

(7) repurchase agreements relating to any of the investments listed in clauses (1) through (6) above with a market value at least equal to the consideration paid in connection therewith, with any Person who regularly engages in the business of entering into repurchase agreements and has a combined capital and surplus of not less than $500,000,000 whose long term securities are rated at least A- (or then equivalent grade) by S&P and A3 (or then equivalent grade) by Moody’s at the time of acquisition;

 

(8) asset-backed securities having as the underlying asset securities issued or guaranteed by the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association rated at least A- (or then equivalent grade, in each case with stable outlook) by S&P and A3 (or then equivalent grade, in each case with case with stable outlook) by Moody’s at the time of acquisition and having maturities of not more than one year from the date of acquisition; and

 

(9) Investments, classified in accordance with GAAP as current assets of TransMontaigne Partners or any of its Subsidiaries, in money market mutual or similar funds having assets in excess of $100,000,000, at least 95% of the assets of which are comprised of assets specified in clauses (1) through (8) above of this definition.

 

“Change of Control” means the occurrence of any of the following:

 

(1) the direct or indirect sale, lease, transfer, conveyance or other disposition (other than

 

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by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets (including Capital Stock of the Restricted Subsidiaries) of TransMontaigne Partners and its Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d) of the Exchange Act), other than a Qualified Owner, which occurrence is followed by a Rating Decline;

 

(2) the adoption of a plan relating to the liquidation or dissolution of TransMontaigne Partners or the removal of the General Partner by the limited partners of TransMontaigne Partners; or

 

(3) the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any “person” (as defined above), other than a Qualified Owner, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the General Partner, measured by voting power rather than number of shares, which occurrence is followed by a Rating Decline.

 

Notwithstanding the preceding, a conversion of TransMontaigne Partners from a limited partnership to a corporation, limited liability company or other form of entity or an exchange of all of the outstanding limited partner interests for capital stock in a corporation, for member interests in a limited liability company or for Equity Interests in such other form of entity shall not constitute a Change of Control, so long as following such conversion or exchange the “persons” (as defined above) who Beneficially Owned the Capital Stock of TransMontaigne Partners immediately prior to such transactions continue to Beneficially Own in the aggregate more than 50% of the Voting Stock of such entity, or continue to Beneficially Own sufficient Equity Interests in such entity to elect a majority of its directors, managers, trustees or other persons serving in a similar capacity for such entity and no other “person”  (other than a Qualified Owner) Beneficially Owns more than 50% or the Voting Stock of such entity.

 

“Clearstream” means Clearstream Banking, S.A.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Consolidated Cash Flow” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus, without duplication:

 

(1) an amount (to the extent not included in Consolidated Net Income) equal to the dividends or distributions paid during such period in cash or Cash Equivalents to such Person or any of its Restricted Subsidiaries by a Person that is not a Restricted Subsidiary of such Person; plus

 

(2) an amount equal to any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale or the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries to the extent such loss was deducted in computing such Consolidated Net Income; plus

 

(3) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income for such period; plus

 

(4) the Fixed Charges of such Person and its Restricted Subsidiaries for such period (together with items excluded from the definition of “Fixed Charges” pursuant to clause (B) of the definition thereof), to the extent that such Fixed Charges were deducted in computing such

 

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Consolidated Net Income; plus

 

(5) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; minus

 

(6) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business,

 

in each case, on a consolidated basis and determined in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

 

(1) the aggregate Net Income (but not loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;

 

(2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders, partners or members;

 

(3) the cumulative effect of a change in accounting principles will be excluded;

 

(4) unrealized losses and gains under derivative instruments included in the determination of Consolidated Net Income, including, without limitation those resulting from the application of Accounting Standards Codification No. 815 will be excluded;

 

(5) any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with (a) any Asset Sale (including dispositions pursuant to sale-and-leaseback transactions) or (b) the disposition of any securities by such Person or the extinguishment of any Indebtedness of such Person shall be excluded;

 

(6) any impairment charge or asset write-off pursuant to Accounting Standards Codification No. 350 “Goodwill and Other Intangible Assets” shall be excluded;

 

(7) any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards shall be excluded;

 

(8) any unusual or nonrecurring gain, loss or charge, together with any related provision for taxes on such unusual or nonrecurring gain, loss or charge, shall be excluded; and

 

(9) any non-cash or other charges relating to any premium or penalty paid, write-off of

 

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deferred finance costs or other charges in connection with redeeming or retiring any Indebtedness prior to its Stated Maturity shall be excluded.

 

“Consolidated Net Tangible Assets” means, with respect to any Person at any date of determination, the aggregate amount of total assets included in such Person’s most recent quarterly or annual consolidated balance sheet prepared in accordance with GAAP less applicable reserves reflected in such balance sheet, after deducting the following amounts: (a) all current liabilities reflected in such balance sheet, and (b) all goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles reflected in such balance sheet, with such pro forma adjustments to total assets, reserves, current liabilities, goodwill, trademarks, patents, unamortized debt discounts and expenses and other like intangibles as are appropriate and consistent with the pro forma adjustment provisions set forth in the definition of “Fixed Charge Coverage Ratio.”

 

“Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 13.02 hereof (except with respect to payments on the Notes, in which case this address will be U.S. Bank National Association, 100 Wall Street, Suite 1600, New York, New York 10005) or such other address as to which the Trustee may give prior written notice to the Issuers in accordance with the notice provisions set forth herein.

 

“Credit Agreement” means that certain Third Amended and Restated Senior Secured Credit Facility, dated as of March 13, 2017, among TransMontaigne Operating Company L.P., as borrower, Wells Fargo Bank, National Association, as administrative agent, US Bank, National Association, as syndication agent, joint lead arranger and joint book runner, Bank of America, N.A., Citibank, N.A., MUFG Union Bank, N.A. and Royal Bank of Canada, each as documentation agents, Wells Fargo Securities, LLC, as joint lead arranger and joint lead book runner, and the other financial institutions a party thereto, as amended by that certain First Amendment to Third Amended and Restated Senior Secured Credit Facility, dated as of December 14, 2017, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection with the foregoing, and, in each case, as further amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part, from time to time.

 

“Credit Facilities” means one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities or Debt Issuances, in each case, with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders, other financiers or to special purpose entities formed to borrow from (or sell such receivables to) such lenders or other financiers against such receivables), letters of credit, bankers’ acceptances, other borrowings or Debt Issuances, in each case, as amended, restated, modified, renewed, extended, refunded, replaced or refinanced (in each case, without limitation as to amount), in whole or in part, from time to time (including through one or more Debt Issuances) and any agreements and related documents governing Indebtedness or Obligations incurred to refinance amounts then outstanding or permitted to be outstanding, whether or not with the original administrative agent, lenders, investment banks, insurance companies, mutual funds, other lenders, investors or any of the foregoing and whether provided under the original agreement, indenture or other documentation relating thereto.

 

“Custodian” means the Trustee, as custodian with respect to the Global Notes, or any successor entity thereto.

 

“Debt Issuances” means, with respect to TransMontaigne Partners or any of its Restricted Subsidiaries, one or more issuances after the Issue Date of Indebtedness evidenced by notes, debentures, bonds or other similar securities or instruments.

 

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“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

 

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 3.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

“Designated Non-cash Consideration” means the fair market value (as determined in good faith by an Officer of the General Partner) of non-cash consideration received by TransMontaigne Partners or one of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as “Designated Non-cash Consideration” pursuant to an Officers’ Certificate, less the amount of cash or Cash Equivalents received in connection with a subsequent sale of such Designated Non-cash Consideration.

 

“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 3.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

 

“Disqualified Equity” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Equity Interest), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Equity Interest, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature, except such Equity Interest that is solely redeemable with, or solely exchangeable for, any Equity Interest of such Person that is not Disqualified Equity. Notwithstanding the preceding sentence, any Equity Interest that would constitute Disqualified Equity solely because the holders of the Equity Interest have the right to require TransMontaigne Partners to repurchase such Equity Interest upon the occurrence of a change of control or an asset sale will not constitute Disqualified Equity if the terms of such Equity Interest provide that TransMontaigne Partners may not repurchase or redeem any such Equity Interest pursuant to such provisions unless such repurchase or redemption complies with Section 5.07 hereof.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

“Equity Offering” means any public or private sale of Equity Interests (other than Disqualified Equity) made for cash on a primary basis by TransMontaigne Partners after the Issue Date that has not been applied to redeem, prepay or refinance any other Indebtedness (other than the temporary repayment of Indebtedness under a revolving facility).

 

“Euroclear” means Euroclear Bank SA/NV, as operator of the Euroclear system.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Existing Indebtedness” means the aggregate principal amount of Indebtedness of TransMontaigne Partners and its Subsidiaries (other than Indebtedness under the Credit Agreement) in existence on the Issue Date, until such amounts are repaid.

 

“Fair Market Value” means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, as determined in good faith by (a) an executive officer of TransMontaigne Partners if the value is less than $50.0 million or (b) the Board of Directors of TransMontaigne Partners if the value is $50.0 million or more.

 

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“Finance Corp.” has the meaning assigned to it in the Preamble to this Indenture, and includes any successors thereto.

 

“First Supplemental Indenture” has the meaning set forth in the Preamble.

 

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Restricted Subsidiaries incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise discharges any Indebtedness or issues, repurchases or redeems Disqualified Equity subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such incurrence, assumption, Guarantee, repayment, repurchase, redemption, defeasance or other discharge of Indebtedness, or such issuance, repurchase or redemption of Disqualified Equity, and the use of the proceeds therefrom, as if the same had occurred at the beginning of the applicable Reference Period.

 

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

 

(1) acquisitions (including, without limitation, a single asset, a division or segment or an entire company) that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers, asset purchase transactions or consolidations and including any related financing transactions during the Reference Period or subsequent to such Reference Period and on or prior to the Calculation Date will be given pro forma effect as if they had occurred on the first day of the Reference Period, including any Consolidated Cash Flow and any pro forma expense and cost reductions that have occurred or are reasonably expected to occur, in the reasonable judgment of the chief financial or accounting officer of TransMontaigne Partners (regardless of whether those cost savings or operating improvements could then be reflected in pro forma financial statements in accordance with Regulation S-X promulgated under the Securities Act or any other regulation or policy of the SEC related thereto);

 

(2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded;

 

(3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses (and ownership interests therein) disposed of prior to the Calculation Date, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date;

 

(4) except as provided in clause (5) below, if any Indebtedness bears a floating rate of interest, the interest expense on such Indebtedness will be calculated as if the average rate in effect from the beginning of the applicable period to the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligation applicable to such Indebtedness if such Hedging Obligation has a remaining term as at the Calculation Date in excess of 12 months); and

 

(5) if any Indebtedness is incurred under a revolving credit facility and is being given pro forma effect, the interest on such indebtedness shall be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation.

 

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“Fixed Charges” means, with respect to any specified Person for any period, (A) the sum, without duplication, of:

 

(1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letters of credit or bankers’ acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations in respect of interest rates; plus

 

(2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; plus

 

(3) any interest on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon; plus

 

(4) an amount equal to all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Equity of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests of TransMontaigne Partners (other than Disqualified Equity) or to TransMontaigne Partners or a Restricted Subsidiary of TransMontaigne Partners (such amount, the “Disqualified Dividend Amount”); provided that, in the event such Person is not treated as a partnership or other pass-through entity for U.S. federal income tax purposes, the amount included in Fixed Charges as a result of this clause (4) shall be the product of (i) the Disqualified Dividend Amount, times (ii) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, in each case, determined on a consolidated basis in accordance with GAAP; minus

 

(B) to the extent included in (A) above, write-off of non-recurring deferred financing costs of such Person and its Restricted Subsidiaries during such period and any charge related to, or any premium or penalty paid in connection with, paying any such Indebtedness of such Person and its Restricted Subsidiaries prior to its Stated Maturity.

 

“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time. Notwithstanding the foregoing, the characterization of leases as operating or capital leases shall be determined in accordance with GAAP as in effect on the date of entry into the applicable lease.

 

If there occurs a change in generally accepted accounting principles relating to revenue recognition resulting from the joint revenue recognition standard of the Financial Accounting Standards Board (“FASB”) and the International Accounting Standards Board, or a change in generally accepted accounting principles relating to capital lease obligations resulting from the lease standard of FASB, and either such change would cause a change in the method of calculation of standards or terms as determined in good faith by TransMontaigne Partners (an “Accounting Change”), then TransMontaigne Partners may elect, as evidenced by a written notice of TransMontaigne Partners to the Trustee, that such standards or

 

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terms shall be calculated as if such Accounting Change had not occurred. Any such election with respect to such Accounting Change may not thereafter be changed.

 

“General Partner” means TransMontaigne GP L.L.C., a Delaware limited liability company which is controlled by Gulf TLP Holdings, LLC, and its successors and permitted assigns as general partner of TransMontaigne Partners or as the business entity with the ultimate authority to manage the business and operations of TransMontaigne Partners.

 

“Global Note Legend” means the legend set forth in Section 3.06(f) hereof, which is required to be placed on all Global Notes issued under this Indenture.

 

“Global Notes” means a note in global form deposited with or on behalf of and registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Section 3.01 hereof.

 

“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America for the payment of which guarantee or obligations the full faith and credit of the United States of America is pledged.

 

“Guarantee” means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness, and the term “Guaranteed” has a correlative meaning.

 

“Guarantors” means each of:

 

(1) the Subsidiaries of TransMontaigne Partners, other than Finance Corp., executing this Indenture as initial Guarantors;

 

(2) each of the Restricted Subsidiaries of TransMontaigne Partners that becomes a guarantor of the Notes pursuant to Section 5.16 hereof; and

 

(3) each other Person executing a supplemental indenture in which such Person agrees to be a Guarantor of the Notes and to be bound by the terms of this Indenture;

 

and their respective successors and permitted assigns; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its Note Guarantee is released in accordance with the terms of this Indenture.

 

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person incurred in the ordinary course of business and not for speculative purposes under:

 

(1) interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements entered into with one or more financial institutions and designed to reduce costs of borrowing or to protect the Person or any of its Restricted Subsidiaries entering into the agreement against fluctuations in interest rates with respect to Indebtedness incurred;

 

(2) other agreements or arrangements designed to manage interest rates or interest rate risk; and

 

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(3) other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

 

“Holder” means a Person in whose name a Note is registered.

 

“Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

 

(1) in respect of borrowed money;

 

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

 

(3) in respect of banker’s acceptances;

 

(4) representing Capital Lease Obligations or Attributable Debt in respect of sale and leaseback transactions;

 

(5) representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or

 

(6) representing any Hedging Obligations,

 

if and to the extent any of the preceding items (other than letters of credit, Attributable Debt and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset (other than Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by TransMontaigne Partners or any Restricted Subsidiary of TransMontaigne Partners, in each case, securing Indebtedness of such Unrestricted Subsidiary or Joint Venture, as applicable) of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

 

Notwithstanding the foregoing, the following shall not constitute “Indebtedness”:

 

(1) accrued expenses and trade accounts payable arising in the ordinary course of business;

 

(2) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of Indebtedness in respect of bid, performance, surety, appeal, payment, insurance contracts and similar bonds issued for the account of TransMontaigne Partners and any of its Restricted Subsidiaries in the ordinary course of business, including Guarantees and obligations of TransMontaigne Partners or any of its Restricted Subsidiaries with respect to letters of credit supporting such obligations (in each case other than an obligation for money borrowed);

 

(3) any Indebtedness which has been defeased in accordance with GAAP or defeased pursuant to the deposit of cash or Government Securities (in an amount sufficient to satisfy all such Indebtedness obligations at Stated Maturity or redemption, as applicable, and all payments of interest and premium, if any) in a trust or account created or pledged for the sole benefit of the holders of such Indebtedness and subject to no other Liens, and the other applicable terms of the instrument governing such Indebtedness;

 

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(4) any obligation arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such obligation is extinguished within five Business Days of its incurrence; and

 

(5) any obligation arising from any agreement providing for indemnities, Guarantees, purchase price adjustments, holdbacks, contingency payment obligations based on the performance of the acquired or disposed assets or similar obligations (other than Guarantees of Indebtedness) incurred by any Person in connection with the acquisition or disposition of assets.

 

“Indenture” has the meaning set forth in the Preamble.

 

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

 

“Initial Notes” means the first $300,000,000 aggregate principal amount of Notes issued under this Indenture on the Issue Date.

 

“Investment Grade Rating” of the Notes, means that the Notes shall have been assigned a Moody’s rating of Baa3 or higher and an S&P rating of BBB- or higher, or if one of such rating agencies shall not make a rating on the Notes publicly available for reasons outside the control of the Issuers, then “Investment Grade Rating” shall mean that the Notes shall have been assigned such a rating by one of such rating agencies and an equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” registered under Section 15E of the Exchange Act selected by the Issuers.

 

“Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), or capital contributions, purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If TransMontaigne Partners or any Subsidiary of TransMontaigne Partners sells or otherwise disposes of any Equity Interests of any direct or indirect Subsidiary of TransMontaigne Partners such that, after giving effect to any such sale or disposition, such Person is no longer a Subsidiary of TransMontaigne Partners, TransMontaigne Partners will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of TransMontaigne Partners’ Investments in such Subsidiary that were not sold or disposed of in an amount determined as provided in Section 5.07(b) hereof.

 

“Issue Date” means the first date on which the Notes are issued, authenticated and delivered under this Indenture.

 

“Issuers” has the meaning set forth in the Preamble.

 

“Joint Venture” means any Person that is not a direct or indirect Subsidiary of TransMontaigne Partners in which TransMontaigne Partners or any of its Restricted Subsidiaries makes any Investment.

 

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or

 

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agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction, other than a precautionary financing statement respecting a lease not intended as a security agreement. In no event shall a right of first refusal be deemed to constitute a Lien.

 

“Moody’s” means Moody’s Investors Service, Inc., or any successor to the rating agency business thereof.

 

“Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however, any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries.

 

“Net Proceeds” means the aggregate cash proceeds received by TransMontaigne Partners or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of:

 

(1) the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale,

 

(2) taxes paid or payable as a result of the Asset Sale, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements,

 

(3) amounts required to be applied to the repayment of Indebtedness, other than Indebtedness under a Credit Facility, secured by a Lien on the asset or assets that were the subject of such Asset Sale and all distributions and payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Asset Sale, and

 

(4) any amounts to be set aside in any reserve established in accordance with GAAP or any amount placed in escrow, in either case for adjustment in respect of the sale price of such properties or assets or for liabilities associated with such Asset Sale and retained by TransMontaigne Partners or any of its Restricted Subsidiaries until such time as such reserve is reversed or such escrow arrangement is terminated, in which case Net Proceeds shall include only the amount of the reserve so reversed or the amount returned to TransMontaigne Partners or its Restricted Subsidiaries from such escrow arrangement, as the case may be.

 

“Non-Recourse Debt” means Indebtedness:

 

(1)  as to which neither TransMontaigne Partners nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; and

 

(2)  no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of TransMontaigne Partners or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity.

 

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For purposes of determining compliance with Section 5.09 hereof, in the event that any Non-Recourse Debt of any of TransMontaigne Partners’ Unrestricted Subsidiaries ceases to be Non-Recourse Debt of such Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of TransMontaigne Partners.

 

“Note Guarantee” means the Guarantee by each Guarantor of the Issuers’ obligations under this Indenture and the Notes, which may be evidenced by a notation thereof executed pursuant to the provisions of this Indenture.

 

“Notes” has the meaning assigned to it in the Recitals to this Indenture.  The Initial Notes and the Additional Notes shall be treated as a single series for all purposes under this Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase, and unless the context otherwise requires, all references to the Notes shall include the Initial Notes and any Additional Notes.

 

“Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness.

 

“Officer” means with respect to any Person the Chief Executive Officer or the Chief Financial Officer of such Person (or, if such Person is a limited partnership, the general partner of such Person).

 

“Officers’ Certificate” means a certificate signed on behalf of TransMontaigne Partners by two Officers of TransMontaigne Partners or the General Partner, one of whom in the case of any Officers’ Certificate delivered to the Trustee pursuant to Section 5.04(a), must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of TransMontaigne Partners, that meets the requirements of Section 13.05 hereof.

 

“Operating Surplus” has the meaning assigned to such term in the Partnership Agreement, as in effect on the Issue Date, except that clause (b) of the definition thereof shall be replaced with $15 million.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 13.05 hereof.  The counsel may be an employee of or counsel to TransMontaigne Partners, the General Partner, any Subsidiary of TransMontaigne Partners or the General Partner or the Trustee.

 

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

 

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of TransMontaigne Partners L.P., dated May 27, 2005, as amended by that certain First Amendment to the First Amended and Restated Agreement of Limited Partnership of TransMontaigne Partners L.P., dated January 23, 2006, Second Amendment to the First Amended and Restated Agreement of Limited Partnership of TransMontaigne Partners L.P., dated April 7, 2008 and Third Amendment to the First Amended and Restated Agreement of Limited Partnership of TransMontaigne Partners L.P., dated May 5, 2015, as such may be further amended, modified or supplemented from time to time.

 

“Permitted Acquisition Indebtedness” means Indebtedness or Disqualified Equity of TransMontaigne Partners or any of its Restricted Subsidiaries to the extent such Indebtedness or Disqualified Equity was Indebtedness or Disqualified Equity of (i) a Subsidiary prior to the date on which such Subsidiary became a Restricted Subsidiary or (ii) a Person that merged into or consolidated with TransMontaigne Partners or a Restricted Subsidiary; provided that on the date such Subsidiary became a Restricted Subsidiary or the date such Person was merged into or consolidated with TransMontaigne

 

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Partners or a Restricted Subsidiary, as applicable, after giving pro forma effect thereto, (a) TransMontaigne Partners would be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test described under Section 5.09(a) hereof or (b) the Fixed Charge Coverage Ratio for TransMontaigne Partners would be equal to or greater than the Fixed Charge Coverage Ratio for TransMontaigne Partners immediately prior to such transaction; provided that such Indebtedness was not incurred in contemplation of, or in connection with, such acquisition, merger or consolidation.

 

“Permitted Business” means either (1) marketing, gathering, transporting (by barge, pipeline, ship, truck or other modes of hydrocarbon transportation), terminalling, storing, producing, acquiring, developing, exploring for, exploiting, producing, processing, dehydrating and otherwise handling crude oil, gas, casinghead gas, drip gasoline, natural gasoline, condensates, distillates, liquid hydrocarbons, asphalt, gaseous hydrocarbons and all other constituents, elements, compounds or products refined or processed from any of the foregoing, which activities shall include, for the avoidance of doubt, constructing pipeline, platform, dehydration, processing, storing and other energy-related facilities, and activities or services reasonably related or ancillary thereto, including entering into purchase and sale agreements, supply agreements and Hedging Obligations related to these businesses, (2) any other business that generates gross income at least 90% of which constitutes “qualifying income” under Section 7704(d) of the Code or (3) any activity that is ancillary, complementary or incidental to or necessary or appropriate for the activities described in clauses (1) and (2) of this definition.

 

“Permitted Business Investments” means Investments by TransMontaigne Partners or any of its Restricted Subsidiaries in any Unrestricted Subsidiary of TransMontaigne Partners or in any Joint Venture, provided that:

 

(1) either (a) at the time of such Investment and immediately thereafter, TransMontaigne Partners could incur $1.00 of additional Indebtedness under the Fixed Charge Coverage Ratio test set forth in Section 5.09(a) hereof or (b) such Investment does not exceed the aggregate amount of Incremental Funds (as defined in Section 5.07 hereof) not previously expended at the time of making such Investment;

 

(2) if such Unrestricted Subsidiary or Joint Venture has outstanding Indebtedness at the time of such Investment, either (a) all such Indebtedness is Non-Recourse Debt or (b) any such Indebtedness of such Unrestricted Subsidiaries or Joint Venture that is recourse to TransMontaigne Partners or any of its Restricted Subsidiaries could, at the time such Investment is made, be incurred at that time by TransMontaigne Partners and its Restricted Subsidiaries under Section 5.09(a) hereof; and

 

(3) such Unrestricted Subsidiary’s or Joint Venture’s activities are not outside the scope of the Permitted Business.

 

“Permitted Investments” means:

 

(1) any Investment in TransMontaigne Partners or in a Restricted Subsidiary of TransMontaigne Partners;

 

(2) any Investment in Cash Equivalents;

 

(3) any Investment by TransMontaigne Partners or any Restricted Subsidiary of TransMontaigne Partners in a Person, if as a result of such Investment:

 

(a) such Person becomes a Restricted Subsidiary of TransMontaigne Partners; or

 

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(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its properties or assets to, or is liquidated into, TransMontaigne Partners or a Restricted Subsidiary of TransMontaigne Partners;

 

(4) any Investment made as a result of the receipt of non-cash consideration from:

 

(a) an Asset Sale that was made pursuant to and in compliance with Section 5.10 hereof; or

 

(b) a disposition of assets deemed not to be an Asset Sale under the definition of “Asset Sale”;

 

(5) any Investment in any Person solely in exchange for the issuance of Equity Interests (other than Disqualified Equity) of TransMontaigne Partners;

 

(6) any Investments received in compromise or resolution of (A) obligations of trade creditors or customers that were incurred in the ordinary course of business of TransMontaigne Partners or any of its Restricted Subsidiaries, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer, or as a result of a foreclosure, perfection or enforcement by TransMontaigne Partners or any of its Restricted Subsidiaries with respect to any secured Investment in default; or (B) litigation, arbitration or other disputes with Persons who are not Affiliates;

 

(7) Investments represented by Hedging Obligations permitted hereunder to be incurred;

 

(8) loans or advances to employees made in the ordinary course of business of TransMontaigne Partners or any Restricted Subsidiary of TransMontaigne Partners in an aggregate principal amount not to exceed $2.5 million at any one time outstanding;

 

(9) repurchases of the Notes;

 

(10) any Investments in prepaid expenses, negotiable instruments held for collection and lease, utility, workers’ compensation and performance and other similar deposits and prepaid expenses made in the ordinary course of business;

 

(11) Permitted Business Investments; and

 

(12) other Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (12) that are at the time outstanding not to exceed the greater of (a) $50.0 million and (b) 5.0% of TransMontaigne Partners’ Consolidated Net Tangible Assets; provided, however, that if any Investment pursuant to this clause (12) is made in any Person that is not a Restricted Subsidiary at the date of the making of such Investment and such Person becomes a Restricted Subsidiary after such date, then such Investment shall thereafter be deemed to have been made pursuant to clause (1) above and shall cease to have been made pursuant to this clause (12) for so long as such Person continues to be a Restricted Subsidiary;

 

provided, however, that with respect to any Investment, TransMontaigne Partners may, in its sole discretion, allocate all or any portion of any Investment and later re-allocate all or any portion of any Investment to one or more of the above clauses (1) through (12) so that the entire Investment would be a Permitted Investment.

 

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“Permitted Liens” means:

 

(1) Liens securing any Indebtedness under any of the Credit Facilities and all Obligations and Hedging Obligations relating to such Indebtedness;

 

(2) Liens in favor of TransMontaigne Partners or the Guarantors;

 

(3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with TransMontaigne Partners or any Subsidiary of TransMontaigne Partners; provided that such Liens were in existence prior to such merger or consolidation (and not incurred in contemplation thereof) and do not extend to any assets other than those of the Person merged into or consolidated with TransMontaigne Partners or the Subsidiary;

 

(4) Liens on property existing at the time of acquisition of the property by TransMontaigne Partners or any Restricted Subsidiary of TransMontaigne Partners; provided that such Liens were in existence prior to, such acquisition, and not incurred in contemplation of, such acquisition;

 

(5) Liens and deposits to secure the performance of statutory obligations, surety or appeal bonds, workers compensation obligations, reimbursement obligations owed to insurers, bids, performance bonds, true leases, other types of social security or other obligations of a like nature incurred in the ordinary course of business (including Liens to secure letters of credit issued to assure payment of such obligations);

 

(6) Liens existing on the Issue Date (other than Liens securing the Credit Facilities);

 

(7) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

 

(8) Liens imposed by law, such as carriers’, warehousemen’s, landlord’s, repairman’s, mechanics’ and other like Liens, in each case, incurred in the ordinary course of business;

 

(9) defects, irregularities and deficiencies in title of any rights of way, survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

(10) inchoate Liens arising under the Employee Retirement Income Security Act of 1974, and any amendments thereto (“ERISA”);

 

(11) Liens created for the benefit of (or to secure) the Notes (or the Note Guarantees);

 

(12) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of Section 5.09(b) hereof covering only the assets acquired and proceeds thereof with or financed by such Indebtedness; provided that such Liens on any property or asset acquired, constructed or improved by TransMontaigne Partners or any of its Restricted Subsidiaries (a “Purchase Money Lien”) shall be (a) in favor of the seller of such property or assets, in favor of the Person developing, constructing, repairing or improving such asset or property, or in favor of

 

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the Person that provided the funding for the acquisition, development, construction, repair or improvement cost, as the case may be, of such asset or property, (b) created within 360 days after the acquisition, development, construction, repair or improvement, (c) to secure the purchase price or development, construction, repair or improvement cost, as the case may be, of such asset or property in an amount up to 100% of the Fair Market Value of such acquisition, construction or improvement of such asset or property, and (d) limited to the asset or property so acquired, constructed or improved (including the proceeds thereof, accessions thereto and upgrades thereof);

 

(13) Liens on and pledges of the Equity Interests of any Unrestricted Subsidiary or any Joint Venture owned by TransMontaigne Partners or any Restricted Subsidiary of TransMontaigne Partners to the extent securing Non-Recourse Debt or other Indebtedness of such Unrestricted Subsidiary or Joint Venture;

 

(14) Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of TransMontaigne Partners or any of its Restricted Subsidiaries on deposit with or in possession of such bank;

 

(15) Liens to secure performance of Hedging Obligations of TransMontaigne Partners or any of its Restricted Subsidiaries;

 

(16) Liens on pipelines or pipeline facilities that arise by operation of law;

 

(17) Liens incurred in the ordinary course of business of TransMontaigne Partners or any Restricted Subsidiary of TransMontaigne Partners with respect to obligations that at any one time outstanding do not exceed the greater of (a) $50.0 million and (b) 5.0% of Consolidated Net Tangible Assets;

 

(18) Liens resulting from the deposit of money or other cash equivalents in trust for the purpose of defeasing Indebtedness of TransMontaigne Partners or any of its Restricted Subsidiaries;

 

(19) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under this Indenture; provided, however, that:

 

(a) the new Lien is limited to all or part of the same property or assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and

 

(b) the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged with such Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

 

(20) Liens relating to future escrow arrangements securing Indebtedness incurred in accordance with this Indenture; and

 

(21) Liens renewing, extending, refinancing or refunding a Lien permitted by clauses (1) through (20) above; provided that (a) the principal amount of Indebtedness secured by such Lien

 

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does not exceed the principal amount of such Indebtedness outstanding immediately prior to the renewal, extension, refinance or refund of such Lien, plus all accrued interest on the Indebtedness secured thereby and the amount of all fees, expenses and premiums incurred in connection therewith, and (b) no assets encumbered by any such Lien other than the assets permitted to be encumbered immediately prior to such renewal, extension, refinance or refund are encumbered thereby.

 

“Permitted Refinancing Indebtedness” means any Indebtedness of TransMontaigne Partners or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to renew, refund, refinance, replace, defease or discharge other Indebtedness of TransMontaigne Partners or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

 

(1) the principal amount of such Permitted Refinancing Indebtedness does not exceed the principal amount of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);

 

(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged;

 

(3) if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes or the Note Guarantees, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes or the Note Guarantees, on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and

 

(4) such Indebtedness is not incurred by a Restricted Subsidiary (other than Finance Corp. or a Guarantor) if TransMontaigne Partners or a Guarantor is the issuer or other primary obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.

 

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

 

“Prospectus Supplement” means the final Prospectus Supplement of the Issuers, dated February 7, 2018 with respect to the Initial Notes, to the Prospectus dated September 2, 2016.

 

“Qualified Owner” means (i) ArcLight Capital Partners, LLC and any individuals that are Affiliates of ArcLight Capital Partners, LLC, (ii) any Affiliated fund, holding company or investment vehicle (other than a portfolio operating company) of any Person in clause (i), (iii) any director, officer, general partner, managing member, principal or managing director of any Person described in clause (i) and (ii) above, (iv) TransMontaigne Partners and its Restricted Subsidiaries or (v) any group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any successor provision) of which any of the forgoing are members.

 

“Rating Agencies” means Moody’s and S&P.

 

“Rating Categories” means:

 

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(1)   with respect to S&P, any of the following categories: AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories); and

 

(2)   with respect to Moody’s, any of the following categories:  Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories).

 

“Rating Decline” means the occurrence of a decrease in the rating of the Notes by one or more gradations by each of Moody’s and S&P (including gradations within the rating categories, as well as between categories), within 60 days before or after the earlier of (x) a Change of Control, (y) the date of public notice of the occurrence of a Change of Control or (z) public notice of the intention of TransMontaigne Partners to effect a Change of Control (which 60-day period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by either Moody’s or S&P).

 

“Reference Period” means, with respect to any date of determination, the four most recent fiscal quarters of TransMontaigne Partners for which internal financial statements are available.

 

“Reporting Default” means a Default described in clause (4) of Section 7.01 hereof.

 

“Responsible Officer,” when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. References to Restricted Subsidiaries are to Restricted Subsidiaries of TransMontaigne Partners unless otherwise indicated.

 

“S&P” means S&P Global Ratings, a division of The McGraw-Hill Companies, Inc., or any successor to the rating agency business thereof.

 

“SEC” means the Securities and Exchange Commission.

 

“Securities” has the meaning set forth in the Recitals.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Senior Indebtedness” means with respect to any Person, Indebtedness of such Person, unless the instrument creating or evidencing such Indebtedness provides that such Indebtedness is subordinate in right of payment to the Notes or the Note Guarantee of such Person, as the case may be.

 

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date.

 

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the documentation governing such Indebtedness as of the Issue Date, and will not include any contingent

 

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obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

 

“Subsidiary” means, with respect to any specified Person:

 

(1) any corporation, association or other business entity (other than a partnership or limited liability company) of which more than 50% of the total voting power of shares of the Voting Stock is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

 

(2) any partnership (whether general or limited) or limited liability company (a) the sole general partner or managing member of which is such Person or a Subsidiary of such Person, or (b) if there are more than a single general partner or member, either (x) the only general partners or managing members of which are such Person or one or more Subsidiaries of such Person (or any combination thereof) or (y) such Person owns or controls, directly or indirectly, a majority of the outstanding general partner interests, member interests or other Voting Stock of such partnership or limited liability company, respectively.

 

“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).

 

“TransMontaigne Partners” has the meaning assigned to it in the Preamble to this Indenture, and includes any successors thereto.

 

“Treasury Rate” means, as of the time of computation, the yield to maturity as of such time of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to February 15, 2021; provided, however, that if the period from the Redemption Date to February 15, 2021, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

“Trustee” means U.S. Bank National Association unless and until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

 

“Unrestricted Subsidiary” means any Subsidiary of TransMontaigne Partners (other than Finance Corp. or any successor to it) that is designated by the Board of Directors of TransMontaigne Partners as an Unrestricted Subsidiary pursuant to a resolution of such Board of Directors, but only to the extent that such Subsidiary (as the case may be):

 

(1) except to the extent permitted by subclause (2)(b) of the definition of “Permitted Business Investments” has no Indebtedness other than Non-Recourse Debt;

 

(2) except as permitted under clauses (b)(3) and (b)(4) of Section 5.11 hereof, is not party to any agreement, contract, arrangement or understanding with TransMontaigne Partners or any Restricted Subsidiary of TransMontaigne Partners unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to TransMontaigne Partners or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of TransMontaigne Partners;

 

(3) is a Person with respect to which neither TransMontaigne Partners nor any of its

 

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Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

 

(4) has not Guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of TransMontaigne Partners or any of its Restricted Subsidiaries.

 

As of the Issue Date, there are no Unrestricted Subsidiaries. All Subsidiaries of an Unrestricted Subsidiary shall be also Unrestricted Subsidiaries. Any designation of a Subsidiary of TransMontaigne Partners as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 5.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of TransMontaigne Partners as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 5.09 hereof, TransMontaigne Partners will be in default of such covenant.

 

“Voting Stock” of any specified Person as of any date means the Capital Stock of such Person that is at the time entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors of such Person.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

 

(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

 

(2) the then outstanding principal amount of such Indebtedness.

 

Section 2.02          Other Definitions.

 

	
 
    	
 
    	
Defined in
    
	
Term
    	
 
    	
Section
    
	
“Affiliate Transaction”
    	
 
    	
5.11(a)
    
	
“Asset Sale Offer”
    	
 
    	
4.09
    
	
“Authentication Order”
    	
 
    	
3.02
    
	
“Change of Control Offer”
    	
 
    	
5.15(a)
    
	
“Change of Control Payment”
    	
 
    	
5.15(a)
    
	
“Change of Control Payment Date”
    	
 
    	
5.15(a)(2)
    
	
“Covenant Defeasance”
    	
 
    	
9.03
    
	
“DTC”
    	
 
    	
3.03
    
	
“Event of Default”
    	
 
    	
7.01
    
	
“Excess Proceeds”
    	
 
    	
5.10
    
	
“incur”
    	
 
    	
5.09(a)
    
	
“Incremental Funds”
    	
 
    	
5.07(a)(1)(D)
    
	
“Legal Defeasance”
    	
 
    	
9.02
    
	
“Offer Amount”
    	
 
    	
4.09
    

 

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Defined in
    
	
Term
    	
 
    	
Section
    
	
“Offer Period”
    	
 
    	
4.09
    
	
“Paying Agent”
    	
 
    	
3.03
    
	
“Payment Default”
    	
 
    	
7.01(6)(A)
    
	
“Permitted Debt”
    	
 
    	
5.09(b)
    
	
“Purchase Date”
    	
 
    	
4.09
    
	
“Redemption Date”
    	
 
    	
4.07(d)
    
	
“Registrar”
    	
 
    	
3.03
    
	
“Restricted Payments”
    	
 
    	
5.07(a)(4)
    
	
“Termination Date”
    	
 
    	
5.18(a)
    

 

Section 2.03          Incorporation by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  Any terms incorporated in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.

 

Section 2.04          Rules of Construction.

 

Unless the context otherwise requires:

 

(1) a term has the meaning assigned to it;

 

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3) “or” is not exclusive;

 

(4) words in the singular include the plural, and in the plural include the singular;

 

(5) “will” shall be interpreted to express a command;

 

(6) provisions apply to successive events and transactions; and

 

(7) references to sections of or rules under the TIA, the Exchange Act or the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.

 

ARTICLE 3
 THE NOTES

 

Section 3.01          Form and Dating.

 

(a)   General.  The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto.  The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage.  Each Note will be dated the date of its authentication.  The Notes shall be in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

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The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Issuers, the Guarantor and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.  However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

 

(b)   Global Notes.  Notes issued in global form will be substantially in the form of Exhibit A hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto).  Notes issued in definitive form will be substantially in the form of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto).  Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, repurchases and redemptions.  Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 3.06 hereof.

 

Section 3.02          Execution and Authentication.

 

At least one Officer must sign the Notes for each of the Issuers by manual or facsimile signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.

 

A Note will not be valid until authenticated by the manual signature of the Trustee.  The signature will be conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee will, upon receipt of a written order of the Issuers signed by two Officers of each Issuer (an “Authentication Order”), authenticate Notes for original issue that may be validly issued under this Indenture, including any Additional Notes.  The aggregate principal amount of Notes outstanding at any time may not exceed the aggregate principal amount of Notes authorized for issuance by the Issuers pursuant to one or more Authentication Orders, except as provided in Section 3.07 hereof.

 

The Trustee may appoint an authenticating agent acceptable to the Issuers to authenticate Notes.  An authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Issuers.

 

Section 3.03          Registrar and Paying Agent.

 

The Issuers will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar will keep a register of the Notes and of their transfer and exchange.  The Issuers may appoint one or more co-registrars and one or more additional paying agents.  The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent.  The Issuers may change any Paying Agent or Registrar without notice to any Holder.  The Issuers will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture.  If the Issuers fail to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as

 

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such.  TransMontaigne Partners, Finance Corp. or any of TransMontaigne Partners’ other Subsidiaries may act as Paying Agent or Registrar.

 

The Issuers initially appoint The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.

 

The Issuers initially appoint the Trustee to act as the Registrar and Paying Agent at its Corporate Trust Office and to act as Custodian with respect to the Global Notes.

 

Section 3.04          Paying Agent to Hold Money in Trust.

 

The Issuers will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Issuers in making any such payment.  While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee.  Upon payment over to the Trustee, the Paying Agent (if other than TransMontaigne Partners or a Subsidiary) will have no further liability for the money.  If TransMontaigne Partners or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent.  Upon any bankruptcy or reorganization proceedings relating to TransMontaigne Partners, the Trustee will serve as Paying Agent for the Notes.

 

Section 3.05          Holder Lists.

 

The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee is not the Registrar, the Issuers will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.

 

Section 3.06          Transfer and Exchange.

 

(a)   Transfer and Exchange of Global Notes.  A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.  All Global Notes will be exchanged by the Issuers for Definitive Notes if:

 

(1) the Issuers deliver to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Issuers within 90 days;

 

(2) the Issuers, at their option but subject to the Depositary’s rules, determine that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and deliver a written notice to such effect to the Trustee;  or

 

(3) there has occurred and is continuing a Default or Event of Default with respect to the Notes, and the Depositary notifies the Trustee of its decision to exchange the Global Notes for Definitive Notes.

 

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Upon the occurrence of any of the preceding events in (1), (2) or (3) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee.  Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 3.07 and 3.10 hereof.  Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 3.06 or Section 3.07 or 3.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note.  A Global Note may not be exchanged for another Note other than as provided in this Section 3.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 3.06(b) or (c) hereof.

 

(b)   Transfer and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (1) or (2) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

(1) Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in a Global Note.  No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 3.06(b)(1).

 

(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and exchanges of beneficial interests that are not subject to Section 3.06(b)(1) above, the transferor of such beneficial interest must deliver to the Registrar either:

 

(A)  both:

 

(i)    a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(ii)   instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

 

(B)  both:

 

(i)    a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(ii)   instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above.

 

Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 3.06(g) hereof.

 

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(c)   Transfer or Exchange of Beneficial Interests for Definitive Notes.

 

(1) Beneficial Interests in Global Notes to Definitive Notes.  If any holder of a beneficial interest in a Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 3.06(b)(2) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 3.06(g) hereof, and the Issuers will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 3.06(c)(1) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest requests through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant.  The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered.

 

(d)   Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes. A Holder of a Definitive Note may exchange such Note for a beneficial interest in a Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Global Note at any time.  Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Global Notes.

 

(e)   Transfer and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 3.06(e), the Registrar will register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing.  In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 3.06(e).

 

(f)    Global Note Legend.  Each Global Note will bear a legend in substantially the following form:

 

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A

 

31

 

NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.”

 

(g)   Cancellation and/or Adjustment of Global Notes.  At such time as all beneficial interests in a particular Global Note have been exchanged for beneficial interests in another Global Note or Definitive Notes, or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 3.11 hereof.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

(h)   General Provisions Relating to Transfers and Exchanges.

 

(1) To permit registrations of transfers and exchanges, the Issuers will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 3.02 hereof or at the Registrar’s request.

 

(2) No service charge will be made to a Holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Issuers may require payment of a sum sufficient to cover any transfer or exchange tax or similar governmental charge payable in connection therewith (other than any such transfer or exchange taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.10, 4.06, 4.09, 5.10, 5.15 and 10.04 hereof).

 

(3) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Issuers, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(4) Neither the Registrar nor the Issuers will be required:

 

(A)  to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 4.02 hereof and ending at the close of business on the day of selection;

 

32

 

(B)  to register the transfer of or to exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part; or

 

(C)  to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

 

(5) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Issuers may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Issuers shall be affected by notice to the contrary.

 

(6) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 3.02 hereof.

 

(7) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 3.06 to effect a registration of transfer or exchange may be submitted by facsimile.

 

Section 3.07          Replacement Notes.

 

If any mutilated Note is surrendered to the Trustee or the Issuers and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Issuers will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met.  If required by the Trustee or the Issuers, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Issuers to protect the Issuers, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced.  The Issuers may charge for their expenses in replacing a Note.

 

Every replacement Note is an additional obligation of each of the Issuers and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

 

Section 3.08          Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 3.08 as not outstanding.  Except as set forth in in TIA §316(a) or Section 3.09 hereof, a Note does not cease to be outstanding because the Issuers or an Affiliate of the Issuers holds the Note; however, Notes held by TransMontaigne Partners or a Subsidiary of TransMontaigne Partners shall not be deemed to be outstanding for purposes of Section 4.07(a) hereof.

 

If a Note is replaced pursuant to Section 3.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

 

If the principal amount of any Note is considered paid under Section 5.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

 

If the Paying Agent (other than TransMontaigne Partners, a Subsidiary or an Affiliate of any thereof) holds, by 11:00 a.m., Eastern Time, on a Redemption Date or other maturity date, money

 

33

 

sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.

 

Section 3.09          Treasury Notes.

 

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuers or any Guarantor, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuers or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.

 

Section 3.10          Temporary Notes.

 

Until certificates representing Notes are ready for delivery, the Issuers may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes.  Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Issuers consider appropriate for temporary Notes and as may be reasonably acceptable to the Trustee.  Without unreasonable delay, the Issuers will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.

 

Holders of temporary Notes will be entitled to all of the benefits of this Indenture.

 

Section 3.11          Cancellation.

 

The Issuers at any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act).  Certification of the destruction of all canceled Notes will be delivered to the Issuers.  The Issuers may not issue new Notes to replace Notes that they have paid or that have been delivered to the Trustee for cancellation.

 

Section 3.12          Defaulted Interest.

 

If the Issuers default in a payment of interest on the Notes, they will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 5.01 hereof.  The Issuers will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment.  The Issuers will fix or cause to be fixed each such special record date and payment date; provided that no such special record date may be less than 10 days prior to the related payment date for such defaulted interest.  At least 15 days before the special record date, the Issuers (or, upon the written request of the Issuers, the Trustee in the name and at the expense of the Issuers) will send or cause to be sent to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

 

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ARTICLE 4
 REDEMPTION AND PREPAYMENT

 

Section 4.01          Notices to Trustee.

 

If the Issuers elect to redeem Notes pursuant to the optional redemption provisions of Section 4.07 hereof, they must furnish to the Trustee, at least five Business Days (unless a shorter period is satisfactory to the Trustee) before a notice of such redemption is given pursuant to Section 4.03, an Officers’ Certificate setting forth the information to be stated in such notice as provided in Section 4.03.

 

Section 4.02          Selection of Notes to Be Redeemed.

 

If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:

 

(1)         if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

 

(2)         if the Notes are not listed on any national securities exchange, on a pro rata basis; or

 

(3)         in the case of Global Notes, by such other method as DTC may prescribe that most nearly approximates pro rata selection.

 

No Notes of $2,000 or less can be redeemed in part.  In the event of partial redemption, the particular Notes to be redeemed will be selected, unless otherwise provided herein, not less than 15 nor more than 60 days prior to the redemption by the Trustee from the outstanding Notes not previously called for redemption.

 

The Trustee will promptly notify the Issuers in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected will be in amounts of $2,000 or whole multiples of $1,000 in excess thereof; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed.  Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

 

Section 4.03          Notice of Redemption.

 

At least 15 days but not more than 60 days before a Redemption Date, the Issuers will mail or cause to be mailed, by first class mail, (or sent electronically in the case of notices to DTC) a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be given more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article 9 or 12 hereof. Notice of any redemption of the Notes (including upon an Equity Offering or in connection with a transaction (or series of related transactions) that constitute a Change of Control) may, at the Issuers’ discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering or Change of Control. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuers’ discretion, the Redemption Date may be delayed until such time (including more than 60 days after the date the notice of redemption was delivered) as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed, or such notice may be rescinded at any time in the Issuers’ discretion if in the good faith judgment of the Issuers any or all of such conditions will not be satisfied.

 

The notice will identify the Notes to be redeemed and will state:

 

35

 

(1) the Redemption Date;

 

(2) the redemption price, if then determinable and, if not, the manner of its determination;

 

(3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the Redemption Date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued in the name of the Holder thereof upon cancellation of the original Note;

 

(4) the name and address of the Paying Agent;

 

(5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

 

(6) that, unless the Issuers default in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date;

 

(7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

 

(8) any condition precedent to the redemption; and

 

(9) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.

 

At the Issuers’ request, the Trustee will give the notice of redemption in the Issuers’ names and at their expense; provided, however, that the Issuers have delivered to the Trustee an Officers’ Certificate in accordance with Section 4.01 requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

 

Section 4.04          Effect of Notice of Redemption.

 

Once notice of redemption is given in accordance with Section 4.03 hereof, Notes called for redemption without condition will become irrevocably due and payable on the Redemption Date at the redemption price.

 

Section 4.05          Deposit of Redemption or Purchase Price.

 

Prior to 11:00 a.m., Eastern Time, on the redemption or purchase date, the Issuers will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest on all Notes to be redeemed or purchased on that date.  The Trustee or the Paying Agent will promptly return to the Issuers any money deposited with the Trustee or the Paying Agent by the Issuers in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest on all Notes to be redeemed or purchased.

 

If the Issuers comply with the provisions of the preceding paragraph and the Paying Agent holds money sufficient to pay notes payable on the redemption date, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or accepted for purchase.  If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date.  If any Note called for redemption or tendered for purchase is not so paid upon surrender for redemption or purchase because of

 

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the failure of the Issuers to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 5.01 hereof.

 

Section 4.06          Notes Redeemed or Purchased in Part.

 

Upon surrender of a Note that is redeemed or purchased in part, the Issuers will issue and, upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the expense of the Issuers a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.

 

Section 4.07          Optional Redemption.

 

(a)   At any time prior to February 15, 2021, the Issuers may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture, upon prior notice in accordance with Section 4.02 hereof, at a redemption price of 106.125% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (subject to the right of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date), with an amount of cash not greater than the net cash proceeds of one or more Equity Offerings by TransMontaigne Partners; provided that:

 

(1) at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture (excluding Notes held by TransMontaigne Partners and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and

 

(2) the redemption occurs within 180 days of the date of the closing of such Equity Offering.

 

(b)   Except pursuant to the preceding paragraph, subsection (d) of this Section 4.07, and Section 5.15(d) hereof, the Notes will not be redeemable at the Issuers’ option prior to February 15, 2021.

 

(c)   On or after February 15, 2021, the Issuers may redeem all or a part of the Notes, upon prior notice in accordance with Section 4.02 hereof, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes redeemed to, but excluding, the applicable Redemption Date, if redeemed during the twelve-month period beginning on February 15th of each year indicated below, subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2021
    	
 
    	
104.594
    	
%
    
	
2022
    	
 
    	
103.063
    	
%
    
	
2023
    	
 
    	
101.531
    	
%
    
	
2024 and   thereafter
    	
 
    	
100.000
    	
%
    

 

(d)   At any time prior to February 15, 2021, the Issuers may also redeem all or a part of the Notes, upon prior notice in accordance with Section 4.02 hereof, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid

 

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interest, if any, to, but excluding, the date of redemption (the “Redemption Date”), subject to the rights of Holders on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date. The notice need not set forth the Applicable Premium but only the manner of calculation of the redemption price. With respect to any redemption pursuant to this Section 4.07(d), TransMontaigne Partners will (i) calculate the Treasury Rate on the second Business Day preceding the applicable Redemption Date and (ii) prior to such Redemption Date file with the Trustee an Officers’ Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail. The Trustee shall not be responsible for any such calculation.

 

(e)   Any redemption pursuant to this Section 4.07 or Section 5.15(d) shall be made pursuant to the provisions of Sections 4.01 through 4.06 hereof.

 

(f)    Unless the Issuers default in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable Redemption Date.

 

Section 4.08          Mandatory Redemption.

 

The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. The Issuers are not prohibited from acquiring the Notes by means other than a redemption, whether pursuant to a tender offer, open market purchase or otherwise, so long as the acquisition does not violate the terms of this Indenture.

 

Section 4.09          Offer to Purchase by Application of Excess Proceeds.

 

In the event that, pursuant to Section 5.10 hereof, the Issuers are required to commence an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it will follow the procedures specified below.

 

The Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets.  The Asset Sale Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business Days, except to the extent that a longer period is required by applicable law (the “Offer Period”).  No later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Issuers will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer.  Payment for any Notes so purchased will be made in the same manner as interest payments are made.

 

If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

 

Upon the commencement of an Asset Sale Offer, the Issuers will send, in the manner prescribed in Section 13.02, a notice to the Trustee and each of the Holders, with a copy to the Trustee.  The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer.  The notice, which will govern the terms of the Asset Sale Offer, will state:

 

(1) that the Asset Sale Offer is being made pursuant to this Section 4.09 and Section 5.10 hereof and the length of time the Asset Sale Offer will remain open;

 

(2) the Offer Amount, the purchase price and the Purchase Date;

 

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(3) that any Note not tendered or accepted for payment will continue to accrue interest;

 

(4) that, unless the Issuers default in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase Date;

 

(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only;

 

(6) that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Issuers, a Depositary, if appointed by the Issuers, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

 

(7) that Holders will be entitled to withdraw their election if the Issuers, the depositary for the Asset Sale Offer or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

 

(8) that, if the aggregate principal amount of Notes and other pari passu Indebtedness surrendered by holders thereof exceeds the Offer Amount, the Notes and other pari passu Indebtedness to be purchased will be selected on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered (with such adjustments as may be deemed appropriate by the Issuers so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, will be purchased); and

 

(9) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

 

On or before the Purchase Date, the Issuers will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating that such Notes or portions thereof were accepted for payment by the Issuers in accordance with the terms of this Section 4.09.  The Issuers, the depositary for the Asset Sale Offer or the Paying Agent, as the case may be, will mail or deliver to each tendering Holder (x) in the case of the Issuer, on the Purchase Date and (y) in the case of such depositary or Paying Agent, promptly (but in any case not later than five days after the Purchase Date), an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Issuers for purchase, and the Issuers will promptly issue a new Note, and the Trustee, upon written request from the Issuers, will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered.  Any Note not so accepted shall be promptly mailed or delivered by the Issuers to the Holder thereof.  The Issuers will publicly announce the results of the Asset Sale Offer on the Purchase Date.

 

Other than as specifically provided in this Section 4.09, any purchase pursuant to this Section 4.09 shall be made pursuant to the provisions of Sections 4.05 and 4.06 hereof.

 

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ARTICLE 5
 COVENANTS

 

Section 5.01          Payment of Notes.

 

The Issuers will pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes.  Principal, premium, if any, and interest will be considered paid on the date due if the Paying Agent, if other than the TransMontaigne Partners or a Subsidiary thereof, holds as of 11:00 a.m. Eastern Time on the due date money deposited by the Issuers in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due.

 

Section 5.02          Maintenance of Office or Agency.

 

The Issuers will maintain in the City of New York an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Issuers in respect of the Notes and this Indenture may be served.  The Issuers will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency.  If at any time the Issuers fail to maintain any such required office or agency or fails to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

The Issuers may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Issuers of their obligation to maintain an office or agency in the City of New York for such purposes.  The Issuers will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

 

The Issuers hereby designate the Corporate Trust Office of the Trustee as one such office or agency of the Issuers in accordance with Section 3.03 hereof.

 

Section 5.03          Reports.

 

(a)   Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, TransMontaigne Partners shall furnish to the Holders of Notes or cause the Trustee to furnish to the Holders of Notes, within the time periods applicable to non-accelerated filers specified in the SEC’s rules and regulations:

 

(1) all quarterly and annual reports that would be required to be filed with the SEC on Forms 10-Q and 10-K if TransMontaigne Partners were required to file such reports, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; and

 

(2) all current reports that would be required to be filed with the SEC on Form 8-K if TransMontaigne Partners were required to file such reports.

 

All such reports will be prepared in all material respects in accordance with all of the rules and regulations applicable to such reports. Each annual report on Form 10-K will include a report on TransMontaigne Partners’ consolidated financial statements by TransMontaigne Partners’ independent registered public accounting firm.  In addition, TransMontaigne Partners will file a copy of each of the reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods

 

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specified in the rules and regulations applicable to such reports (unless the SEC will not accept such a filing) and will post the reports on its website within those time periods.

 

If, at any time TransMontaigne Partners is no longer subject to the periodic reporting requirements of the Exchange Act for any reason, TransMontaigne Partners will nevertheless continue filing the reports specified in the preceding paragraphs of this Section 5.03 with the SEC within the time periods specified above unless the SEC will not accept such a filing; provided that, for so long as TransMontaigne Partners is not subject to the periodic reporting requirements of the Exchange Act for any reason, the time period for filing reports on Form 8-K shall be five  Business Days after the event giving rise to the obligation to file such report.  TransMontaigne Partners will not take any action for the purpose of causing the SEC not to accept any such filings.  If, notwithstanding the foregoing, the SEC will not accept TransMontaigne Partners’ filings for any reason,  TransMontaigne Partners will post the reports referred to in the preceding paragraphs on its website within the time periods that would apply if TransMontaigne Partners were required to file those reports with the SEC.

 

Any and all Defaults or Events of Default arising from a failure to comply with this Section 5.03 shall be deemed cured (and TransMontaigne Partners shall be deemed to be in compliance with this Section 5.03) upon furnishing or filing such information or report as contemplated by this covenant (but without regard to the date on which such information or report is so furnished or filed); provided that such cure shall not otherwise affect the rights of Holders under Section 7.01 hereof if all outstanding Notes shall have been accelerated in accordance with the terms of the Indenture and such acceleration has not been rescinded or cancelled prior to such cure.

 

(b)   For so long as any Notes remain outstanding, if at any time none of TransMontaigne Partners and the Guarantors is required to file with the SEC the reports required by paragraph (a) of this Section 5.03, TransMontaigne Partners and the Guarantors will furnish to the Holders of Notes and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

 

TransMontaigne Partners will be deemed to have furnished each of the reports referred to above to the Trustee and the Holders on the date that TransMontaigne Partners files such reports with the SEC via the EDGAR (or any successor) filing system and such reports are publicly available.

 

Delivery of such reports, information and documents to the Trustee is for informational purposes only, and the Trustee’s receipt of such reports, information and documents shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including TransMontaigne Partners’ compliance with any of its covenants under this Indenture (or to which the Trustee is entitled to rely exclusively on an Officers’ Certificate).

 

Section 5.04          Compliance Certificate.

 

(a)   The Issuers and each Guarantor shall deliver to the Trustee, within 90 days after the end of each fiscal year, commencing with the fiscal year ending December 31, 2018, an Officers’ Certificate (at least one of the signatories of which shall be the principal executive officer, the principal financial officer, or the principal accounting officer of TransMontaigne Partners) stating that a review of the activities of the Issuers and TransMontaigne Partners’ Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Issuers have kept, observed, performed and fulfilled their obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Issuers have kept, observed, performed and fulfilled each and every covenant contained in this Indenture and are not in default in the performance or observance of any of the terms, provisions and

 

41

 

conditions of this Indenture (or, if a Default or Event of Default has occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Issuers are taking or propose to take with respect thereto).

 

(b)   So long as any of the Notes are outstanding, the Issuers will deliver to the Trustee, promptly upon any Officer becoming aware of any Default or Event of Default, an Officers’ Certificate specifying such Default or Event of Default and what action the Issuers are taking or propose to take with respect thereto.

 

Section 5.05          Taxes.

 

TransMontaigne Partners will pay, and will cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

 

Section 5.06          Stay, Extension and Usury Laws.

 

The Issuers and each of the Guarantors covenant (to the extent that they may lawfully do so) that they will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuers and each of the Guarantors (to the extent that they may lawfully do so) hereby expressly waive all benefit or advantage of any such law, and covenants that they will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

Section 5.07          Restricted Payments.

 

(a)   TransMontaigne Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(1) declare or pay any dividend or make any other payment or distribution on account of TransMontaigne Partners’ or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving TransMontaigne Partners or any of its Restricted Subsidiaries) or to the direct or indirect holders of TransMontaigne Partners’ or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than distributions or dividends payable in Equity Interests of TransMontaigne Partners (other than Disqualified Equity) and other than distributions or dividends payable to TransMontaigne Partners or a Restricted Subsidiary);

 

(2) purchase, redeem or otherwise acquire or retire for value (including without limitation, in connection with any merger or consolidation involving TransMontaigne Partners) any Equity Interests of TransMontaigne Partners or any direct or indirect parent of TransMontaigne Partners;

 

(3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness of the Issuers or any Guarantor that is  contractually subordinated to the Notes or to any Note Guarantee (excluding intercompany Indebtedness between or among TransMontaigne Partners and any of its Restricted Subsidiaries), except a payment of interest or principal within one year of the Stated Maturity thereof; or

 

42

 

(4) make any Restricted Investment (all such payments and other actions set forth in these clauses (1) through (4) above being collectively referred to as “Restricted Payments”),

 

unless, at the time of and after giving effect to such Restricted Payment, no Default or Event of Default (except a Reporting Default) has occurred and is continuing or would occur as a consequence of such Restricted Payment and either:

 

(1) if the Fixed Charge Coverage Ratio for TransMontaigne Partners’ Reference Period is not less than 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by TransMontaigne Partners and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4) (to the extent, in the case of clause (4), payments are made other than to TransMontaigne Partners or a Restricted Subsidiary), (5), (6), (7), (9) and (10)  of Section 5.07(b) hereof) during the quarter in which such Restricted Payment is made, is less than the sum, without duplication, of:

 

(A)  Available Cash from Operating Surplus as of the end of the immediately preceding quarter; plus

 

(B)  100% of the aggregate net cash proceeds received by TransMontaigne Partners (including the Fair Market Value of any Permitted Business or long-term assets that are used or useful in a Permitted Business to the extent acquired in consideration of Equity Interests of TransMontaigne Partners (other than Disqualified Equity)) since the Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests of TransMontaigne Partners (other than Disqualified Equity) or from the issue or sale of convertible or exchangeable Disqualified Equity or convertible or exchangeable debt securities of TransMontaigne Partners that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Equity or debt securities) sold to a Subsidiary of TransMontaigne Partners); plus

 

(C)  to the extent that any Restricted Investment that was made after the Issue Date is sold for cash or Cash Equivalents or otherwise liquidated or repaid for cash or Cash Equivalents, the return of capital or similar payment made in cash or Cash Equivalents with respect to such Restricted Investment (less the cost of disposition, if any); plus

 

(D)  the net reduction in Restricted Investments made after the Issue Date resulting from dividends, repayments of loans or advances, or other transfers of assets in each case to TransMontaigne Partners or any of its Restricted Subsidiaries from any Person (including, without limitation, Unrestricted Subsidiaries) or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries, to the extent such amounts have not been included in Available Cash from Operating Surplus for any period commencing on or after the Issue Date (items (b), (c) and (d) being referred to as “Incremental Funds”); minus

 

(E)   the aggregate amount of Incremental Funds previously expended pursuant to this clause (1) and clause (2) below; or

 

(2) if the Fixed Charge Coverage Ratio for TransMontaigne Partners’ Reference Period is less than 1.75 to 1.00, such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by TransMontaigne Partners and its Restricted Subsidiaries (excluding Restricted Payments permitted by clauses (2), (3), (4) (to the extent, in the case of clause (4),

 

43

 

payments are made other than to TransMontaigne Partners or a Restricted Subsidiary), (5), (6),  (7), (8), (9) and (10) of Section 5.07(b) hereof) during the quarter in which such Restricted Payment is made (such Restricted Payments for purposes of this clause (2) meaning only distributions on common units or other Capital Stock of TransMontaigne Partners, plus the related distribution on the general partner interest), is less than the sum, without duplication, of:

 

(A)  $125.0 million less the aggregate amount of all Restricted Payments made by TransMontaigne Partners and its Restricted Subsidiaries pursuant to this clause (2)(A) during the period since the Issue Date; plus

 

(B)  Incremental Funds to the extent not previously expended pursuant to this clause (2) or clause (1) above.

 

(b)   The provisions of Section 5.07(a) hereof will not prohibit:

 

(1) the payment of any dividend or distribution or the consummation of an irrevocable redemption of subordinated Indebtedness within 60 days after the date of the declaration of such dividend or distribution, or the delivery of the irrevocable notice of redemption, as the case may be, if at the date of declaration  or the date on which such irrevocable notice is delivered, such dividend, distribution or redemption would have complied with the provisions of this Indenture (assuming, in the case of a redemption payment, the giving of the notice of such redemption payment would have been deemed to be a Restricted Payment at such time and such deemed Restricted Payment would have been permitted at such time);

 

(2) the making of any Restricted Payment in exchange for, or out of the net cash proceeds of, a substantially concurrent (a) common equity capital contribution to TransMontaigne Partners from any Person (other than a Restricted Subsidiary of TransMontaigne Partners) or (b) sale (other than to a Restricted Subsidiary of TransMontaigne Partners) of Equity Interests (other than Disqualified Equity) of TransMontaigne Partners, with a contribution or sale being deemed substantially concurrent if such Restricted Payment occurs not more than 120 days after such sale; provided that the amount of any such net cash proceeds that are utilized for any such Restricted Payment will be excluded or deducted, as applicable, from the calculation of Available Cash from Operating Surplus and Incremental Funds;

 

(3) the purchase, redemption, defeasance or other acquisition or retirement for value of any subordinated Indebtedness of TransMontaigne Partners or any Guarantor with the net cash proceeds from a substantially concurrent incurrence of, or in substantially concurrent exchange for, Permitted Refinancing Indebtedness;

 

(4) the payment of any distribution or dividend by a Restricted Subsidiary of TransMontaigne Partners to the holders of its Equity Interests (other than Disqualified Equity) on a pro rata basis, or on a basis more favorable to TransMontaigne Partners or a Restricted Subsidiary;

 

(5) so long as no Default has occurred and is continuing or would be caused thereby, the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of TransMontaigne Partners or any Restricted Subsidiary of TransMontaigne Partners held by any current or former officer, director, consultant or employee of the General Partner (or its general partner), TransMontaigne Partners or any of TransMontaigne Partners’ Restricted Subsidiaries pursuant to any equity subscription agreement or plan, stock or unit option agreement, shareholders’ agreement, employment agreement or similar agreement; provided, that the

 

44

 

aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $5.0 million in any twelve-month period (with unused amounts in any twelve-month period being carried over to succeeding twelve-month periods); provided further, that such amount in any calendar year may be increased by an amount not to exceed (a) the cash proceeds received by TransMontaigne Partners from the sale of Equity Interests of TransMontaigne Partners (other than Disqualified Stock) to members of management, employees or directors of the General Partner, TransMontaigne Partners or its Restricted Subsidiaries that occurs after the Issue Date (to the extent the cash proceeds from the sale of such Equity Interests have not otherwise been applied to the payment of Restricted Payments by virtue of clauses 1(B) or 2(B) of Section 5.07(a) hereof), plus (b) the cash proceeds of key man life insurance policies received by TransMontaigne Partners after the Issue Date, less (c) the amount of any Restricted Payments made pursuant to clauses (a) and (b) of this clause (5);

 

(6) so long as no Default (except a Reporting Default) has occurred and is continuing or would be caused thereby, payments of dividends on Disqualified Equity issued pursuant to Section 5.09 hereof;

 

(7) repurchases of Capital Stock deemed to occur upon exercise of stock options, warrants or other convertible securities if such Capital Stock represents a portion of the exercise price of such options, warrants or other convertible securities;

 

(8) cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of TransMontaigne Partners, or arising from stock dividends, splits or business combinations;

 

(9) in connection with an acquisition by TransMontaigne Partners or any of its Restricted Subsidiaries, the return to TransMontaigne Partners or any of its Restricted Subsidiaries of Equity Interests of TransMontaigne Partners or any of its Restricted Subsidiaries constituting a portion of the purchase consideration in settlement of indemnification claims or pursuant to purchase price adjustments under the acquisition agreement; and

 

(10) so long as no Default (except a Reporting Default) or Event of Default has occurred and is continuing, the purchase, redemption, defeasance or other acquisition or retirement for value of any subordinated Indebtedness pursuant to Sections 5.10 or 5.15; provided that all Notes tendered by Holders in connection with a Change of Control Offer or Asset Sale Offer, as applicable, have been purchased, redeemed, defeased or otherwise acquired or retired for value.

 

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by TransMontaigne Partners or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment, except that the amount of any non-cash dividend or distribution paid in accordance with clause (1) of Section 5.07(b) hereof shall be the Fair Market Value as of the date on which such dividend or distribution is declared. The Fair Market Value of any assets or securities that are required to be valued by this Section 5.07 will be determined in the manner prescribed in the definition of that term. For the purposes of determining compliance with this Section 5.07, in the event that a Restricted Payment meets the criteria of more than one of the categories of Restricted Payments described in the preceding clauses (1) through (10), TransMontaigne Partners will be permitted to classify (or later reclassify in whole or in part in its sole discretion) such Restricted Payment in any manner that complies with this Section 5.07.

 

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Section 5.08          Dividend and Other Payment Restrictions Affecting Subsidiaries.

 

(a)   TransMontaigne Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

 

(1) pay dividends or make any other distributions on its Equity Interests to TransMontaigne Partners or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to TransMontaigne Partners or any of its Restricted Subsidiaries; provided that priority of any preferred equity or similar Equity Interest in receiving dividends or liquidating distributions prior to the payment of dividends or liquidating distributions on common equity shall not be deemed to be a restriction on the ability to make distributions on Capital Stock so long as the terms of such preferred equity do not expressly restrict the ability of such Restricted Subsidiary to pay dividends or make distributions on its Equity Interests;

 

(2)  make loans or advances to TransMontaigne Partners or any of its Restricted Subsidiaries; or

 

(3) sell, lease or transfer any of its properties or assets to TransMontaigne Partners or any of its Restricted Subsidiaries.

 

(b)   The restrictions in Section 5.08(a) hereof will not apply to encumbrances or restrictions existing under or by reason of:

 

(1) agreements as in effect on the Issue Date and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements or the Indebtedness to which they relate; provided that the amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings are not, in the good faith judgment of an Officer of the General Partner, materially more restrictive, taken as a whole, with respect to such dividend, distribution and other payment restrictions than those contained in those agreements on the Issue Date;

 

(2) this Indenture, the Notes and the Note Guarantees;

 

(3) agreements governing other Indebtedness permitted to be incurred under the provisions of the covenant described above under Section 5.09 and any amendments, restatements, modifications, renewals, supplements, refundings, replacements or refinancings of those agreements; provided that the restrictions therein are in the good faith judgment of an Officer of the General Partner, either (a)  not materially more restrictive, taken as a whole, than those contained in this Indenture, the Notes and the Note Guarantees or (b) not reasonably likely to have a material adverse effect on the ability of the Issuers to make required payments on the Notes;

 

(4) applicable law, rule, regulation or order;

 

(5) any instrument governing Indebtedness or Equity Interest of a Person acquired by TransMontaigne Partners or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Equity Interest was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;

 

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(6) customary non-assignment provisions in transportation agreements or purchase and sale or exchange agreements, pipeline and terminals agreements, or similar operational agreements or in licenses or leases, in each case entered into in the ordinary course of business;

 

(7) purchase money obligations for property acquired in the ordinary course of business and Capital Lease Obligations that impose restrictions on the property purchased or leased of the nature described in clause (3) of Section 5.08(a) hereof;

 

(8) any agreement (a) for the sale or other disposition of a Restricted Subsidiary that contains any such restrictions on that Restricted Subsidiary pending its sale or other disposition or (b) for the sale or other disposition of a particular asset or line of business of a Restricted Subsidiary that imposes restrictions on assets subject to any agreement of the nature described in clause (3) of the preceding paragraph;

 

(9) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

 

(10) Liens permitted to be incurred under the provisions of Section 5.12 hereof that limit the right of the debtor to dispose of the assets subject to such Liens;

 

(11) provisions limiting the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, sale-leaseback agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business, which limitation is applicable only to those assets or property that are the subject of such agreements;

 

(12) any agreement or instrument relating to any property or assets acquired after the Issue Date, so long as such encumbrance or restriction relates only to the property or assets so acquired and is not and was not created in anticipation of such acquisitions;

 

(13) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and

 

(14) encumbrances or restrictions contained in, or in respect of, Hedging Obligations permitted under this Indenture from time to time.

 

Section 5.09          Incurrence of Indebtedness and Issuance of Disqualified Equity.

 

(a)   TransMontaigne Partners will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, Guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and TransMontaigne Partners will not issue any Disqualified Equity and will not permit any of its Restricted Subsidiaries to issue any Disqualified Equity; provided, however, that TransMontaigne Partners and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt) and TransMontaigne Partners and the Restricted Subsidiaries may issue Disqualified Equity, if the Fixed Charge Coverage Ratio for the TransMontaigne Partners’ Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Equity is issued, as the case may be, would have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had

 

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been incurred or the Disqualified Equity had been issued, as the case may be, at the beginning of such Reference Period.

 

(b)   The provisions of Section 5.09(a) hereof will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

 

(1)  the incurrence by TransMontaigne Partners, Finance Corp. and any Guarantor of additional Indebtedness and letters of credit and the Guarantees thereof under Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of TransMontaigne Partners and its Restricted Subsidiaries thereunder) not to exceed the greater of (a) $1.0 billion and (b) the sum of $750.0 million and 30.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom);

 

(2) the incurrence by Finance Corp., TransMontaigne Partners and its Restricted Subsidiaries of the Existing Indebtedness;

 

(3) the incurrence by the Issuers and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the Issue Date;

 

(4) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of TransMontaigne Partners or any of its Restricted Subsidiaries, in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred pursuant to this clause (4), at any time outstanding not to exceed the greater of  (a) $50.0 million and (b) 5.0% of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom);

 

(5) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace any Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under Section 5.09(a) hereof or clauses (2), (3) or (9) of this Section 5.09(b) or this clause (5);

 

(6) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of intercompany Indebtedness between or among TransMontaigne Partners and any of its Restricted Subsidiaries; provided, however, that:

 

(A)  if TransMontaigne Partners or any Guarantor is the obligor on such Indebtedness and the payee is not TransMontaigne Partners or a Guarantor, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations then due with respect to the Notes, in the case of TransMontaigne Partners, or the Note Guarantee, in the case of a Guarantor; and

 

(B)  (1) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than TransMontaigne Partners or a Restricted Subsidiary of TransMontaigne Partners and (2) any sale or other transfer of

 

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any such Indebtedness to a Person that is not either TransMontaigne Partners or a Restricted Subsidiary of TransMontaigne Partners,

 

will be deemed, in each case, to constitute an incurrence of such Indebtedness by TransMontaigne Partners or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6);

 

(7) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of Hedging Obligations;

 

(8) the Guarantee by TransMontaigne Partners or any of its Restricted Subsidiaries of (a) Indebtedness of TransMontaigne Partners or a Restricted Subsidiary of TransMontaigne Partners that was permitted to be incurred by another provision of this Section 5.09 or (b) Indebtedness incurred by Joint Ventures,  provided that such Guarantee constitutes a Permitted Investment; and provided further, in each case, that if the Indebtedness being Guaranteed is subordinated to or pari passu with the Notes or the Note Guarantees, then the Guarantee shall be subordinated or pari passu, as applicable, to the same extent as the Indebtedness Guaranteed;

 

(9) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of Indebtedness in respect of workers’ compensation claims, health or other types of social security benefits, unemployment or other insurance or self-insurance obligations, insurance contracts, reclamation, statutory obligations, bankers’ acceptances, and performance, payment, appeal and surety bonds in the ordinary course of business, including Guarantees and obligations respecting standby letters of credit supporting such obligations, to the extent not drawn (in each case other than an obligation for money borrowed) and replacements of any of the foregoing;

 

(10) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of Permitted Acquisition Indebtedness;

 

(11) the issuance by TransMontaigne Partners or any of its Restricted Subsidiaries of Disqualified Equity to TransMontaigne Partners or any of its Restricted Subsidiaries, as the case may be; provided, however, that:

 

(A)  any subsequent issuance or transfer of Equity Interests of a Restricted Subsidiary that results in any such Disqualified Equity being held, directly or indirectly, by a Person other than TransMontaigne Partners or a Restricted Subsidiary of TransMontaigne Partners; and

 

(B)  any sale or other transfer of any such Disqualified Equity to a Person that is not either TransMontaigne Partners or a Restricted Subsidiary of TransMontaigne Partners;

 

will be deemed, in each case, to constitute an issuance of such Disqualified Equity by TransMontaigne Partners or such Restricted Subsidiary that was not permitted by this clause (11):

 

(12) the incurrence by TransMontaigne Partners of Indebtedness in the ordinary course of business under documentary letters of credit which are to be repaid in full not more than one year after the date on which such Indebtedness was originally incurred to finance the purchase of goods by TransMontaigne Partners or any of its Restricted Subsidiaries; and

 

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(13) the incurrence by TransMontaigne Partners or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount at any time outstanding not to exceed  the greater of (a) $50.0 million and (b) 5.0 % of Consolidated Net Tangible Assets (determined as of the date of incurrence and after giving effect to the use of proceeds therefrom).

 

TransMontaigne Partners will not incur, and will not permit Finance Corp. or any Guarantor to incur, any Indebtedness (including Permitted Debt) that is contractually subordinated in right of payment to any other Indebtedness of TransMontaigne Partners, Finance Corp. or such Guarantor unless such Indebtedness is also contractually subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially identical terms; provided, however, that no Indebtedness shall be deemed to be contractually subordinated in right of payment to any other Indebtedness of TransMontaigne Partners, Finance Corp. or any such Guarantor solely by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.

 

For purposes of determining compliance with this Section 5.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (13) above, or is entitled to be incurred pursuant to Section 5.09(a) hereof, TransMontaigne Partners will be permitted to classify such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of such item of Indebtedness, in any manner that complies with this Section 5.09.  Indebtedness under Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (1) of the definition of Permitted Debt.

 

The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Equity in the form of additional shares or units of the same class of Disqualified Equity will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Equity for purposes of this Section 5.09; provided, in each such case, that the amount of any such accrual, accretion or payment is included in Fixed Charges of TransMontaigne Partners as accrued to the extent required by the definition of such term.  Notwithstanding any other provision of this Section 5.09, the maximum amount of Indebtedness that TransMontaigne Partners or any Restricted Subsidiary may incur pursuant to this Section 5.09 shall not be deemed to be exceeded solely as a result of fluctuations in exchange rates or currency values.

 

The amount of any Indebtedness outstanding as of any date will be:

 

(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount;

 

(2) the principal amount of the Indebtedness, in the case of any other Indebtedness; and

 

(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the specified Person, the lesser of:

 

(A) the Fair Market Value of such assets at the date of determination; and

 

(B) the amount of the Indebtedness of the other Person.

 

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date

 

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such Indebtedness was incurred, in the case of term debt, or first committed, in the case of revolving credit debt;  provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed (i) the principal amount of such Indebtedness being refinanced plus (ii) the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses incurred in connection with such refinancing. The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

 

Section 5.10          Asset Sales.

 

TransMontaigne Partners will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

 

(1) TransMontaigne Partners (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of (such Fair Market Value to be determined on the date of contractual agreement to such Asset Sale by the parties thereto and which shall give effect to the assumption by another Person of any liabilities as provided for in clause (2)(A) below; and

 

(2) at least 75% of the consideration received in the Asset Sale by TransMontaigne Partners or such Restricted Subsidiary, together with the consideration received in all other Asset Sales by TransMontaigne Partners or any Restricted Subsidiary since the Issue Date (on a cumulative basis), is in the form of cash or Cash Equivalents.  For purposes of this provision, each of the following shall be deemed to be cash:

 

(A)  any liabilities, as shown on TransMontaigne Partners’ most recent consolidated balance sheet, of TransMontaigne Partners or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantees) that are assumed by the transferee of any such assets pursuant to a novation agreement that releases TransMontaigne Partners or such Restricted Subsidiary from further liability;

 

(B)  any securities, notes or other obligations received by TransMontaigne Partners or any such Restricted Subsidiary from such transferee that are within 180 days after the Asset Sale (subject to ordinary settlement periods), converted by TransMontaigne Partners or such Restricted Subsidiary into cash, to the extent of the cash received in that conversion;

 

(C)  any Designated Non-cash Consideration received by TransMontaigne Partners or any of its Restricted Subsidiaries in such Asset Sale; provided that the aggregate fair market value of such Designated Non-cash Consideration, taken together with the fair market value at the time of receipt of all other Designated Non-cash Consideration received pursuant to this clause (C) is less than 5.0% of Consolidated Net Tangible Assets at the time of the receipt of such Designated Non-cash Consideration

 

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(with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value);

 

(D)  any stock or assets of the kind referred to in clauses (2) or (4) of the next succeeding paragraph; and

 

(E)   accounts receivable of a business retained by TransMontaigne Partners or any of its Restricted Subsidiaries, as the case may be, following the sale of such business, provided such accounts receivable (i) are not past due more than 60 days and (ii) do not have a payment date greater than 90 days from the date of the invoices creating such accounts receivable.

 

Within 365 days after the receipt of any Net Proceeds from an Asset Sale, TransMontaigne Partners (or the applicable Restricted Subsidiary, as the case may be) may apply such Net Proceeds:

 

(1) to repay Senior Indebtedness of TransMontaigne Partners and/or its Restricted Subsidiaries (or to make an offer to repurchase or redeem such Indebtedness, provided that such repurchase or redemption closes within 45 days after the end of such 365-day period);

 

(2) to acquire all or substantially all of the assets of, or any Capital Stock of, another Permitted Business, if, after giving effect to any such acquisition of Capital Stock, the Permitted Business is or becomes a Restricted Subsidiary of TransMontaigne Partners;

 

(3) to make a capital expenditure in respect of a Permitted Business; or

 

(4) to acquire other assets that are not classified as current assets under GAAP and that are used or useful in a Permitted Business.

 

Notwithstanding the foregoing, if within 365 days after the receipt of any Net Proceeds from an Asset Sale, TransMontaigne Partners (or the applicable Restricted Subsidiary, as the case may be) enters into a binding written agreement irrevocably committing TransMontaigne Partners or such Restricted Subsidiary to an application of funds of the kind described in clause (2), (3) or (4) of the preceding paragraph, and as to which the only condition to closing is the receipt of required governmental approvals or, in the case of clause (3), the completion of required construction of the applicable asset(s), then TransMontaigne Partners or such Restricted Subsidiary shall be deemed not to be in violation of the preceding paragraph; provided that such Net Proceeds are so applied pursuant to any such binding agreement within two years after the date of receipt of such Net Proceeds.

 

Pending the final application of any Net Proceeds, TransMontaigne Partners or any Restricted Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by this Indenture.

 

Any Net Proceeds from Asset Sales that are not applied or invested as provided in the second paragraph of this Section 5.10 will constitute “Excess Proceeds.”  When the aggregate amount of Excess Proceeds exceeds $20.0 million, within five days thereof, the Issuers will make an Asset Sale Offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds.  The offer price in any Asset Sale Offer will be equal to 100% of the principal amount plus accrued and unpaid interest, if any, to the date of purchase, and will be payable in cash.  If any Excess Proceeds remain after consummation of an Asset Sale Offer, TransMontaigne Partners may use those Excess Proceeds for any purpose not otherwise

 

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prohibited by this Indenture.  If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the representative of such other pari passu Indebtedness will select such other pari passu Indebtedness to be purchased on a pro rata basis.  Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.

 

TransMontaigne Partners will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of Section 4.09 hereof or this Section 5.10, TransMontaigne Partners will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 4.09 hereof or this Section 5.10 by virtue of such compliance.

 

Section 5.11          Transactions with Affiliates.

 

(a)   TransMontaigne Partners will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any Affiliate of TransMontaigne Partners (each, an “Affiliate Transaction”), if such Affiliate Transaction involves aggregate consideration in excess of $20.0 million, unless:

 

(1) the Affiliate Transaction is on terms that are no less favorable to TransMontaigne Partners or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by TransMontaigne Partners or such Restricted Subsidiary with an unrelated Person or, if in the good faith judgment of the Board of Directors of TransMontaigne Partners, no comparable transaction is available with which to compare such Affiliate Transaction, such Affiliate Transaction is fair and reasonable to TransMontaigne Partners or the relevant Restricted Subsidiary from a financial or commercial point of view; and

 

(2) TransMontaigne Partners delivers to the Trustee with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $50.0 million, a resolution of the Board of Directors of TransMontaigne Partners set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with this Section 5.11 and that such Affiliate Transaction has been approved by either a Conflicts Committee of the Board of Directors of TransMontaigne Partners (so long as a majority of the members of the Conflicts Committee approving the Affiliate Transaction are disinterested) or a majority of the disinterested members of the Board of Directors of TransMontaigne Partners

 

(b)   The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of Section 5.11(a) hereof:

 

(1)  reasonable fees and compensation paid to or for the benefit of any employee, officer or director of TransMontaigne Partners, any of its Restricted Subsidiaries or the General Partner (or its direct or indirect parent or general partner), and any employment agreement, employee benefit plan, officer or director indemnification agreement or any similar arrangement entered into by TransMontaigne Partners or any of its Restricted Subsidiaries existing on the Issue Date, or entered into thereafter in the ordinary course of business, and any indemnities or other transactions permitted or required by bylaw, statutory provisions or any of the foregoing agreements, plans or arrangements;

 

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(2) transactions between or among TransMontaigne Partners and/or its Restricted Subsidiaries;

 

(3) transactions with a Person (other than an Unrestricted Subsidiary of TransMontaigne Partners) that is an Affiliate of TransMontaigne Partners solely because TransMontaigne Partners owns, directly or through a Restricted Subsidiary, an Equity Interest in, or controls, such Person;

 

(4) any issuance of Equity Interests (other than Disqualified Equity) of TransMontaigne Partners to Affiliates of TransMontaigne Partners;

 

(5) Restricted Payments or Permitted Investments that do not violate Section 5.07 hereof;

 

(6) customary compensation, indemnification and other benefits made available to officers, directors or employees of TransMontaigne Partners, a Restricted Subsidiary of TransMontaigne Partners or the General Partner (or its direct or indirect parent or general partner), including reimbursement or advancement of out-of-pocket expenses and provisions of officers’ and directors’ liability insurance;

 

(7) in the case of processing, gathering, transportation, marketing, hedging, production handling, operating, construction, terminalling, storage, lease, platform use, or other operational contracts, any such contracts are entered into in the ordinary course of business on terms substantially similar to those contained in similar contracts entered into by TransMontaigne Partners or any Restricted Subsidiary and third parties, or if neither TransMontaigne Partners nor any Restricted Subsidiary has entered into a similar contract with a third party, that the terms are no less favorable than those available from third parties on an arm’s-length basis, as determined in good faith by either the Conflicts Committee of the Board of Directors of TransMontaigne Partners (so long as a majority of the members of the Conflicts Committee approving the Affiliate Transaction are disinterested) or a majority of the disinterested members of the Board of Directors of TransMontaigne Partners;

 

(8) loans or advances to employees in the ordinary course of business not to exceed $5.0 million in the aggregate at any one time outstanding;

 

(9) the existence of, or the performance by TransMontaigne Partners or any Restricted Subsidiary of its obligations under the terms of, any agreements that are described in TransMontaigne Partners’ Annual Report on Form 10-K for the fiscal year ended December 31, 2016 under the heading “Certain Relationships and Related Transactions, and Director Independence” to which it is a party as of the date of the Prospectus Supplement and any amendments thereto, and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by TransMontaigne Partners or any Restricted Subsidiary of its obligations under, any future amendment to such agreements or under any such similar agreements shall only be permitted by this clause (9) to the extent that the terms of any such amendment or new agreement, taken as a whole, are not less favorable to the Holders in any material respect as determined in good faith by either the Conflicts Committee of the Board of Directors of TransMontaigne Partners (so long as a majority of the members of the Conflicts Committee approving the Affiliate Transaction are disinterested) or a majority of the disinterested members of the Board of Directors of TransMontaigne Partners;

 

(10) Guarantees of performance by TransMontaigne Partners or any of its Restricted Subsidiaries in the ordinary course of business, except for Guarantees of Indebtedness in respect of borrowed money;

 

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(11) (A) Guarantees by TransMontaigne Partners or any of its Restricted Subsidiaries of the performance of obligations of Unrestricted Subsidiaries or Joint Ventures in the ordinary course of business, except for Guarantees of Indebtedness in respect of borrowed money, and (B) pledges by TransMontaigne Partners or any Restricted Subsidiary of Capital Stock in Unrestricted Subsidiaries or Joint Ventures for the benefit of lenders or other creditors of Unrestricted Subsidiaries or Joint Ventures as contemplated by clause (13) of the definition of “Permitted Liens” so long as any such transaction described in this clause (B), if involving aggregate consideration in excess of $50.0 million, has been approved by either the Conflicts Committee of the Board of Directors of TransMontaigne Partners (so long as a majority of the members of the Conflicts Committee approving the Affiliate Transaction are disinterested) or a majority of the disinterested members of the Board of Directors of TransMontaigne Partners;

 

(12) if such Affiliate Transaction is with a Person in its capacity as a holder of Indebtedness or Equity Interests of TransMontaigne Partners or any of its Restricted Subsidiaries, a transaction in which such Person is treated no more favorably than the other holders of such Indebtedness or Equity Interests;

 

(13) any transaction in which TransMontaigne Partners or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an accounting, appraisal or investment banking firm of national standing stating that such transaction is fair to TransMontaigne Partners or such Restricted Subsidiary from a financial point of view or that such transaction meets the requirements of clause (1) of the first paragraph of this Section 5.11; and

 

(14) any transactions between TransMontaigne Partners or any Restricted Subsidiary and any Person, a director of which is also a director of TransMontaigne Partners or a Restricted Subsidiary and such common director is the sole cause for such other Person to be deemed an Affiliate of the Company or a Restricted Subsidiary, provided that such director abstains from voting as a director of TransMontaigne Partners or the Restricted Subsidiary, as applicable, in connection with the approval of the transaction.

 

Section 5.12          Liens.

 

TransMontaigne Partners will not and will not permit any Restricted Subsidiary to, create, incur, assume or otherwise cause or permit to exist or become effective any Lien of any kind (other than Permitted Liens) securing Indebtedness (including any Attributable Debt), upon any of their property or assets, now owned or hereafter acquired, unless:

 

(1)           in the case of Liens securing subordinated Indebtedness of TransMontaigne Partners or a Restricted Subsidiary, the Notes or Note Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on a senior basis to the subordinated Indebtedness so secured with the same priority that the Notes or Note Guarantees, as applicable, have to such subordinated Indebtedness until such time as such subordinated Indebtedness is no longer so secured by a Lien; and

 

(2)           in the case of Liens securing Senior Indebtedness of TransMontaigne Partners or a Restricted Subsidiary, the Notes or Note Guarantees, as applicable, are contemporaneously secured by a Lien on such property or assets on an equal and ratable basis with the Senior Indebtedness so secured until such time as such Senior Indebtedness is no longer so secured by a Lien.

 

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Any Lien on property or assets of any Issuer or Guarantor created for the benefit of Holders of the Notes pursuant to the preceding paragraph shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged at such time as there are no other Liens of any kind (other than Permitted Liens) on such property or assets securing such Indebtedness.

 

Section 5.13          Limitations on Finance Corp. Activities.

 

Finance Corp. will not hold any material assets, become liable for any material obligations or engage in any significant business activities; provided, that Finance Corp. may be a co-obligor or guarantor with respect to Indebtedness if TransMontaigne Partners is an obligor on such Indebtedness and the net proceeds of such Indebtedness are received by TransMontaigne Partners, Finance Corp. or one or more Guarantors. At any time after TransMontaigne Partners is a corporation, Finance Corp. may consolidate or merge with or into TransMontaigne Partners or any Restricted Subsidiary.

 

Section 5.14          Corporate Existence.

 

Subject to Article 6 hereof, TransMontaigne Partners shall do or cause to be done all things necessary to preserve and keep in full force and effect:

 

(1) its limited partnership existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of TransMontaigne Partners or any such Subsidiary; and

 

(2) the rights (charter and statutory), licenses and franchises of TransMontaigne Partners and its Subsidiaries; provided, however, that TransMontaigne Partners shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the General Partner shall determine that the preservation thereof is no longer desirable in the conduct of the business of TransMontaigne Partners and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes.

 

Section 5.15          Offer to Repurchase Upon Change of Control.

 

(a)   Upon the occurrence of a Change of Control, the Issuers will make an offer (a “Change of Control Offer”) to each Holder of Notes to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to, but excluding, the date of purchase (the “Change of Control Payment”), subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the date of purchase. Within 30 days following any Change of Control, the Issuers will send a notice to each Holder describing the transaction or transactions that constitute the Change of Control and stating:

 

(1) that the Change of Control Offer is being made pursuant to this Section 5.15 and that all Notes tendered will be accepted for payment;

 

(2) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is sent (the “Change of Control Payment Date”);

 

(3) that any Note not tendered will continue to accrue interest;

 

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(4) that, unless the Issuers Default in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date;

 

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

 

(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and

 

(7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.

 

The Issuers will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control.  To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Section 5.15, the Issuers will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Section 5.15 by virtue of such compliance.

 

(b)   On the Change of Control Payment Date, the Issuers will, to the extent lawful:

 

(1) accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer;

 

(2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and

 

(3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Issuers.

 

On the Change of Control Payment Date, the Paying Agent will promptly mail to each Holder of Notes properly tendered the Change of Control Payment for such Notes (or, if all the Notes are then in global form, it will make such payment through the facilities of DTC), and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.  The Issuers will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

 

The provisions described above that require the Issuers to make a Change of Control Offer following a Change of Control will be applicable whether or not any other provisions of this Indenture are applicable.

 

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(c)   Notwithstanding anything to the contrary in this Section 5.15, the Issuers will not be required to make a Change of Control Offer upon a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 5.15 and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption has been given pursuant to Section 4.07 hereof, unless and until there is a default in payment of the applicable redemption price.

 

(d)   With respect to the Notes, in the event that Holders of not less than 90% of the aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuers (or the third party making the Change of Control Offer in lieu of the Issuers as provided above) purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuers will have the right, upon not less than 30 nor more than 60 days’ prior notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer described above, to redeem all of the Notes that remain outstanding following such purchase at a redemption price equal to 101% of the aggregate principal amount of such Notes, plus accrued and unpaid interest on the Notes that remain outstanding to, but excluding, the date of redemption (subject to the right of Holders of record on the relevant record date to receive interest due on an Interest Payment Date that is on or prior to the Redemption Date).

 

Section 5.16          Additional Guarantees.

 

If, after the Issue Date, any Subsidiary (other than Finance Corp.) of TransMontaigne Partners that is not already a Guarantor Guarantees any Indebtedness of either of the Issuers or a Guarantor under a Credit Facility in an aggregate principal amount in excess of $25.0 million, then that Subsidiary will become a Guarantor by executing and delivering a supplemental indenture in substantially the form of Exhibit C to this Indenture to the Trustee within 20 Business Days of the date on which it Guaranteed or incurred such Indebtedness; provided that the preceding shall not apply to Subsidiaries of TransMontaigne Partners that have been properly designated as Unrestricted Subsidiaries in accordance with this Indenture for so long as they continue to constitute Unrestricted Subsidiaries. Notwithstanding the preceding, any Note Guarantee of a Restricted Subsidiary that was incurred pursuant to this Section 5.16 will be released in accordance with Section 11.05 hereof.

 

Section 5.17          Designation of Restricted and Unrestricted Subsidiaries.

 

The Board of Directors of TransMontaigne Partners may designate any Restricted Subsidiary (other than Finance Corp.) to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all outstanding Investments owned by TransMontaigne Partners and its Restricted Subsidiaries in the Subsidiary designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will either reduce the amount available for Restricted Payments under Section 5.07 hereof or qualify as a Permitted Investment under one or more clauses of the definition of “Permitted Investments”, as determined by TransMontaigne Partners; provided that any designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

Any designation of a Subsidiary of TransMontaigne Partners as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 5.07 hereof.  If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness

 

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of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of TransMontaigne Partners as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 5.09 hereof, TransMontaigne Partners will be in default of such covenant.  The Board of Directors of TransMontaigne Partners may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of TransMontaigne Partners; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of TransMontaigne Partners of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section 5.09 hereof, calculated on a pro forma basis as if such designation had occurred at the beginning of the Reference Period; and (2) no Default or Event of Default would be in existence following such designation.

 

Section 5.18          Termination of Covenants.

 

(a)   If at any time (i) the Notes are assigned an Investment Grade Rating from both Rating Agencies and (ii) no Default or Event of Default has occurred and is continuing under this Indenture (the “Termination Date”), TransMontaigne Partners and its Restricted Subsidiaries will no longer be subject to the following provisions of this Indenture:

 

(1) Section 5.07;

 

(2) Section 5.08 ;

 

(3) Section 5.09;

 

(4) Section 5.10 ;

 

(5) Section 5.11;

 

(6) Section 5.13;

 

(7) Section 5.16 ;

 

(8) Section 5.17; and

 

(9) Clause (a)(4) of Section 6.01.

 

No Subsidiary may be designated as an Unrestricted Subsidiary after the Termination Date.

 

ARTICLE 6
 SUCCESSORS

 

Section 6.01          Merger, Consolidation or Sale of Assets.

 

(a)   Neither of the Issuers may: (1) consolidate or merge with or into another Person (whether or not such Issuer is the surviving entity); or (2) directly or indirectly sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of the properties or assets of the Issuers and the Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:

 

(1) either:

 

(A)  such Issuer is the surviving entity; or

 

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(B)       the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a Person organized or existing under the laws of the United States, any state of the United States or the District of Columbia; provided, however, that Finance Corp. may not consolidate or merge with or into any Person other than a corporation satisfying such requirement so long as TransMontaigne Partners is not a corporation;

 

(2) the Person formed by or surviving any such consolidation or merger (if other than such Issuer) or the Person to which such sale, assignment, transfer, lease, conveyance or other disposition has been made assumes all the obligations of such Issuer under the Notes and this Indenture pursuant to agreements reasonably satisfactory to the Trustee;

 

(3)  immediately after such transaction, no Default or Event of Default exists;

 

(4) in the case of a transaction involving TransMontaigne Partners and not Finance Corp., TransMontaigne Partners or the Person formed by or surviving any such consolidation or merger (if other than TransMontaigne Partners), or to which such sale, assignment, transfer, lease, conveyance or other disposition has been made, will:

 

(A)       on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable Reference Period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 5.09(a); or

 

(B)       have a Fixed Charge Coverage Ratio, on the date of such transaction and after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable Reference Period, not less than the Fixed Charge Coverage Ratio of TransMontaigne Partners immediately prior to such transaction; and

 

(5) such Issuer has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or disposition and such supplemental indenture (if any) comply with this Indenture and all conditions precedent therein relating to such transaction have been satisfied.

 

provided that this Section 6.01 will not apply to any sale, assignment, transfer, conveyance, lease or other disposition of assets between or among TransMontaigne Partners and its Restricted Subsidiaries, provided further that Sections 6.01(a)(3) and (4) will not apply to any merger or consolidation of TransMontaigne Partners (A) with or into one of its Restricted Subsidiaries for any purpose or (B) with or into an Affiliate solely for the purpose of reorganizing TransMontaigne Partners in another jurisdiction under the law of the United States or any state thereof or the District of Columbia.

 

(b)         Notwithstanding Section 6.01(a), TransMontaigne Partners will be permitted to reorganize as any other form of entity in accordance with the procedures established in this Indenture; provided that:

 

(1) the reorganization involves the conversion (by merger, sale, contribution or exchange of assets or otherwise) of TransMontaigne Partners into a form of entity other than a limited partnership formed under Delaware law;

 

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(2) the entity so formed by or resulting from such reorganization is an entity organized or existing under the laws of the United States, any state thereof or the District of Columbia;

 

(3) the entity so formed by or resulting from such reorganization assumes all the obligations of TransMontaigne Partners under the Notes and this Indenture pursuant to agreements reasonably satisfactory to the Trustee;

 

(4) immediately after such reorganization no Default or Event of Default exists; and

 

(5) such reorganization is, in the good faith judgment of an Officer of the General Partner, not materially adverse to the Holders of the Notes (for purposes of this clause (5) it is stipulated that such reorganization shall not be considered materially adverse to the Holders of the Notes solely because the successor or survivor of such reorganization (a) is subject to federal or state income taxation as an entity or (b) is considered to be an “includible corporation” of an affiliated group of corporations within the meaning of Section 1504(b) of the Code or any similar state or local law).

 

Section 6.02                             Successor Corporation Substituted.

 

Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties or assets of TransMontaigne Partners in a transaction that is subject to, and that complies with the provisions of, Section 6.01 hereof, the successor Person formed by such consolidation or into or with which TransMontaigne Partners is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition, the provisions of this Indenture referring to the “TransMontaigne Partners” shall refer instead to the successor Person and not to TransMontaigne Partners), and may exercise every right and power of TransMontaigne Partners under this Indenture with the same effect as if such successor Person had been named as TransMontaigne Partners herein.

 

ARTICLE 7
 DEFAULTS AND REMEDIES

 

Section 7.01                             Events of Default.

 

Each of the following is an “Event of Default”:

 

(1) default for 30 days in the payment when due of interest with respect to the Notes;

 

(2) default in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium, if any, on, the Notes;

 

(3) failure by TransMontaigne Partners or any of its Restricted Subsidiaries to make a Change of Control Offer or an Asset Sale Offer within the time periods set forth, or consummate a purchase of Notes when required pursuant to the terms described in Section 5.15 or Sections 4.09 and 5.10 or to  comply with the provisions of Section 6.01 hereof;

 

(4) failure by TransMontaigne Partners for 90 days after notice to TransMontaigne Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with Section 5.03;

 

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(5) failure by TransMontaigne Partners or any of its Restricted Subsidiaries for 60 days after notice to TransMontaigne Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of the other agreements in the Indenture; or

 

(6) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by TransMontaigne Partners or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by TransMontaigne Partners or any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default:

 

(A)       is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”); or

 

(B)       results in the acceleration of such Indebtedness prior to its express maturity,

 

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $50.0 million or more, provided, however, that if, prior to any acceleration of the Notes, (i) any such Payment Default is cured or waived, (ii) any such acceleration is rescinded, or (iii) such Indebtedness is repaid during the 20 Business Day period commencing upon the end of any applicable grace period for such Payment Default or the occurrence of such acceleration, as applicable, any Default or Event of Default (but not any acceleration) caused by such Payment Default or acceleration shall automatically be rescinded, so long as such rescission does not conflict with any judgment, decree or applicable law;

 

(7) failure by any Issuer or any Restricted Subsidiary to pay final judgments entered by a court or courts of competent jurisdiction aggregating in excess of $50.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

 

(8) any Issuer or Restricted Subsidiary that is a Significant Subsidiary, or any group of Restricted Subsidiaries of TransMontaigne Partners that, taken together, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law:

 

(A)       commences a voluntary case,

 

(B)       consents to the entry of an order for relief against it in an involuntary case,

 

(C)       consents to the appointment of a custodian of it or for all or substantially all of its property,

 

(D)       makes a general assignment for the benefit of its creditors, or

 

(E)        generally is not paying its debts as they become due;

 

(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

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(A)       is for relief against any Issuer or any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary in an involuntary case;

 

(B)       appoints a custodian of any Issuer or any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary or for all or substantially all of the property of an Issuer or any Restricted Subsidiary that is a Significant Subsidiary, or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary; or

 

(C)       orders the liquidation of any Issuer or Restricted Subsidiary that is a Significant Subsidiary, or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary;

 

and the order or decree remains unstayed and in effect for 60 consecutive days; and

 

(10) except as permitted by this Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or disaffirms its obligations under its Note Guarantee.

 

Section 7.02                             Acceleration.

 

In the case of an Event of Default specified in clause (8) or (9) of Section 7.01 hereof, with respect to Finance Corp., TransMontaigne Partners or any Restricted Subsidiary that is a Significant Subsidiary, or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice.  If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.

 

Upon any such declaration, the Notes shall become due and payable immediately.

 

The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest, or premium, if any, on, or the principal of, the Notes.

 

Section 7.03                             Other Remedies.

 

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and interest, if any, on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  All remedies are cumulative to the extent permitted by law.

 

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Section 7.04                             Waiver of Past Defaults.

 

Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium or interest on the Notes (including in connection with an offer to purchase); provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration.  Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Section 7.05                             Control by Majority.

 

Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it.  However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.

 

Section 7.06                             Limitation on Suits.

 

A Holder may pursue a remedy with respect to this Indenture or the Notes only if:

 

(1) such Holder gives to the Trustee written notice that an Event of Default is continuing;

 

(2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

 

(3) such Holder or Holders offer and, if requested, provide to the Trustee security or indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;

 

(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(5) during such 60-day period, Holders of a majority in aggregate principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with such request.

 

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

 

Section 7.07                             Rights of Holders of Notes to Receive Payment.

 

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and interest and on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

Section 7.08                             Collection Suit by Trustee.

 

If an Event of Default specified in Section 7.01(1) or (2) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Issuers for the whole amount of principal of, premium and interest remaining unpaid on, the Notes and

 

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interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

 

Section 7.09                             Trustee May File Proofs of Claim.

 

The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Issuers (or any other obligor upon the Notes), their creditors or their property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 8.07 hereof.  To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 8.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.  Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

 

Section 7.10                             Priorities.

 

If the Trustee collects any money pursuant to this Article 7, it shall pay out the money in the following order:

 

First:                                    to the Trustee, its agents and attorneys for amounts due under Section 8.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

 

Second:                      to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and interest ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

 

Third:                                to the Issuers or to such party as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 7.10.

 

Section 7.11                             Undertaking for Costs.

 

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party

 

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litigant.  This Section 7.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 7.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.

 

ARTICLE 8
 TRUSTEE

 

Section 8.01                             Duties of Trustee.

 

(a)         If an Event of Default has occurred and is continuing, the Trustee will exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)         Except during the continuance of an Event of Default:

 

(1) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture.  However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

(c)          The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(1) this paragraph does not limit the effect of paragraph (b) of this Section 8.01;

 

(2) the Trustee will not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

 

(3) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 7.05 hereof.

 

(d)         Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 8.01.

 

(e)          No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability.  The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has furnished to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

 

(f)           The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers.  Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

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Section 8.02                             Rights of Trustee.

 

(a)         The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or matter stated in the document.

 

(b)         Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both.  The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officers’ Certificate or Opinion of Counsel.  The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

 

(c)          The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d)         The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

 

(e)          Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuers will be sufficient if signed by an Officer of each of the Issuers.

 

(f)           The Trustee will be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders have furnished to the Trustee reasonable indemnity or security against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.

 

Section 8.03                             Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuers or any Affiliate of the Issuers with the same rights it would have if it were not Trustee.  However, in the event that the Trustee acquires any conflicting interest (as such term is defined in the TIA) after a Default has occurred and is continuing, it must eliminate such conflict within 90 days or resign.  Any Agent may do the same with like rights and duties.  The Trustee is also subject to Sections 8.10 and 8.11 hereof.

 

Section 8.04                             Trustee’s Disclaimer.

 

The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Issuers’ use of the proceeds from the Notes or any money paid to the Issuers or upon the Issuers’ direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or Recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

 

Section 8.05                             Notice of Defaults.

 

If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee will send to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs.  Except in the case of a Default or Event of Default in payment of principal of, premium, if any,

 

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or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

 

Section 8.06                             Reports by Trustee to Holders of the Notes.

 

(a)         Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee will send to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted).  The Trustee also will comply with TIA § 313(b)(2).  The Trustee will also transmit, in the manner prescribed in Section 13.02, all reports as required by TIA § 313(c).

 

(b)         A copy of each report at the time it is sent to the Holders of Notes will be sent by the Trustee to the Issuers and filed by the Trustee with the SEC and each stock exchange on which the Notes are listed in accordance with TIA § 313(d).  The Issuers will promptly notify the Trustee when the Notes are listed on any stock exchange.

 

Section 8.07                             Compensation and Indemnity.

 

(a)         The Issuers will pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder.  The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust.  The Issuers will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services.  Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

 

(b)         The Issuers and the Guarantors will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Issuers and the Guarantors (including this Section 8.07) and defending itself against any claim (whether asserted by the Issuers, the Guarantors, any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith.  The Trustee will notify the Issuers promptly of any claim for which it may seek indemnity.  Failure by the Trustee to so notify the Issuers will not relieve the Issuers or any of the Guarantors of their obligations hereunder.  The Issuers or such Guarantor will defend the claim and the Trustee will cooperate in the defense.  The Trustee may have separate counsel and the Issuers will pay the reasonable fees and expenses of such counsel.  Neither the Issuers nor any Guarantor need pay for any settlement made without its consent, which consent will not be unreasonably withheld.

 

(c)          The obligations of the Issuers and the Guarantors under this Section 8.07 will survive the satisfaction and discharge of this Indenture.

 

(d)         To secure the Issuers’ and the Guarantors’ payment obligations in this Section 8.07, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes.  Such Lien will survive the satisfaction and discharge of this Indenture.

 

(e)          When the Trustee incurs expenses or renders services after an Event of Default specified in Section 7.01(8) or (9) hereof occurs, the expenses and the compensation for the services (including

 

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the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

 

(f)           The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent applicable.

 

Section 8.08                             Replacement of Trustee.

 

(a)         A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 8.08.

 

(b)         The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Issuers.  The Holders of a majority in aggregate principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Issuers in writing.  The Issuers may remove the Trustee if:

 

(1) the Trustee fails to comply with Section 8.10 hereof;

 

(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

 

(3) a custodian or public officer takes charge of the Trustee or its property; or

 

(4) the Trustee becomes incapable of acting.

 

(c)          If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Issuers will promptly appoint a successor Trustee.  Within one year after the successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Issuers.

 

(d)         If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Issuers, or the Holders of at least 10% in aggregate principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

 

(e)          If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 8.10 hereof, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

(f)           A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers.  Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee will send a notice of its succession to Holders.  The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 8.07 hereof.  Notwithstanding replacement of the Trustee pursuant to this Section 8.08, the Issuers’ obligations under Section 8.07 hereof will continue for the benefit of the retiring Trustee.

 

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Section 8.09                             Successor Trustee by Merger, etc.

 

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.

 

Section 8.10                             Eligibility; Disqualification.

 

There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition.

 

This Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1), (2) and (5).  The Trustee is subject to TIA § 310(b).

 

Section 8.11                             Preferential Collection of Claims Against the Issuers.

 

The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated therein.

 

ARTICLE 9
 LEGAL DEFEASANCE AND COVENANT DEFEASANCE

 

Section 9.01                             Option to Effect Legal Defeasance or Covenant Defeasance.

 

The Issuers may at their option and at any time, elect to have either Section 9.02 or 9.03 hereof be applied to all outstanding Notes and Note Guarantees upon compliance with the conditions set forth below in this Article 9.

 

Section 9.02                             Legal Defeasance and Discharge.

 

Upon the Issuers’ exercise under Section 9.01 hereof of the option applicable to this Section 9.02, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 9.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”).  For this purpose, Legal Defeasance means that the Issuers and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 9.05 hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the same), except to the extent such obligations are imposed by TIA § 318(c) and except for the following provisions which will survive until otherwise terminated or discharged hereunder:

 

(1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on, such Notes when such payments are due from the trust referred to in Section 9.04 hereof;

 

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(2) the Issuers’ obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

 

(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers’ and the Guarantors’ obligations in connection therewith; and

 

(4) this Article 9.

 

Subject to compliance with this Article 9, the Issuers may exercise their option under this Section 9.02 notwithstanding the prior exercise of its option under Section 9.03 hereof.

 

Section 9.03                             Covenant Defeasance.

 

Upon the Issuers’ exercise under Section 9.01 hereof of the option applicable to this Section 9.03, the Issuers and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 9.04 hereof, be released from each of their obligations under the covenants contained in Sections 5.03, 5.04, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13, 5.15, 5.16 and 5.17 hereof and clause (a)(4) of Section 6.01 hereof with respect to the outstanding Notes, and the Guarantors will be released from their obligations with respect to the Note Guarantees, on and after the date the conditions set forth in Section 9.04 hereof are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes to the extent permitted by GAAP).  For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Issuers and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 7.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby.  In addition, upon the Issuers’ exercise under Section 9.01 hereof of the option applicable to this Section 9.03, subject to the satisfaction of the conditions set forth in Section 9.04 hereof, Sections 7.01(3) through 7.01(7) inclusive hereof will not constitute Events of Default.

 

Section 9.04                             Conditions to Legal or Covenant Defeasance.

 

In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 9.02 or 9.03 hereof:

 

(1) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of a nationally recognized investment bank, appraisal firm or firm of independent public accountants, to pay the principal of, or interest and premium, if any, on the outstanding Notes on the stated date for payment thereof or on the applicable Redemption Date, as the case may be, and the Issuers must specify whether the Notes are being defeased to such stated date for payment or to a particular Redemption Date;

 

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(2) in the case of an election under Section 9.02 hereof, the Issuers must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that:

 

(A)       the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling; or

 

(B)       since the Issue Date, there has been a change in the applicable federal income tax law,

 

in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

(3) in the case of an election under Section 9.03 hereof, the Issuers must deliver to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

 

(4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness or other borrowing of funds or the grant of Liens securing such Indebtedness or other borrowing, all or a portion of the proceeds of which will be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Issuers or any Guarantor is a party or by which the Issuers or any Guarantor is bound;

 

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which TransMontaigne Partners or any of its Subsidiaries is a party or by which TransMontaigne Partners or any of its Subsidiaries is bound;

 

(6) the Issuers must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders of Notes over the other creditors of the Issuers with the intent of defeating, hindering, delaying or defrauding any creditors of the Issuers or others; and

 

(7) the Issuers must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 9.05                             Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

 

Subject to Section 9.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 9.05, the “Trustee”) pursuant to Section 9.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including either Issuer acting as

 

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Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest but such money need not be segregated from other funds except to the extent required by law.

 

The Issuers will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 9.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

 

Notwithstanding anything in this Article 9 to the contrary, the Trustee will deliver or pay to the Issuers from time to time upon the request of the Issuers any money or non-callable Government Securities held by it as provided in Section 9.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 9.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

 

Section 9.06                             Repayment to the Issuers.

 

Any money deposited with the Trustee or any Paying Agent, or then held by the Issuers, in trust for the payment of the principal of, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Issuers on their request or (if then held by the Issuers) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Issuers for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuers as trustee thereof, will thereupon cease; provided, however, that, if any Definitive Note is then outstanding, the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuers cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuers.

 

Section 9.07                             Reinstatement.

 

If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Section 9.02 or 9.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuers’ and the Guarantors’ obligations under this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 9.02 or 9.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 9.02 or 9.03 hereof, as the case may be; provided, however, that, if the Issuers make any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Issuers will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

 

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ARTICLE 10
 AMENDMENT, SUPPLEMENT AND WAIVER

 

Section 10.01                      Without Consent of Holders of Notes.

 

Notwithstanding Section 10.02 of this Indenture, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture or the Notes or the Note Guarantees without the consent of any Holder of Note:

 

(1) to cure any ambiguity, defect or inconsistency;

 

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

 

(3) to provide for the assumption of the Issuers’ or a Guarantor’s obligations to the Holders of the Notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Issuers’ or such Guarantor’s assets, as applicable, in accordance with the terms of this Indenture;

 

(4) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any such Holder;

 

(5) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

 

(6) to conform the text of this Indenture, the Notes or the Note Guarantees to any provision of the “Description of Notes” section of the Prospectus Supplement to the extent that such provision was intended to be a verbatim recitation of a provision of this Indenture, the Notes or the Note Guarantees;

 

(7) to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture as of the Issue Date;

 

(8) to allow any Guarantor to execute a supplemental indenture and/or a notation of a Note Guarantee with respect to the Notes or to reflect the release of a Note Guarantee in accordance with this Indenture;

 

(9) to secure the Notes and/or the Note Guarantees and to release such Liens, in each case, pursuant to the requirements of Section 5.12 herein;

 

(10) to comply with the rules of any applicable securities depository; or

 

(11) to provide for the reorganization of TransMontaigne Partners as any other form of entity, in accordance with Section 6.01(a).

 

Upon the request of the Issuers, and upon receipt by the Trustee of the documents described in Section 10.05 hereof, the Trustee will join with the Issuers and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

 

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Section 10.02                      With Consent of Holders of Notes.

 

Except as provided below in this Section 10.02, the Issuers, the Guarantors and the Trustee may amend or supplement this Indenture (including, without limitation, Sections 4.09, 5.10 and 5.15 hereof) and the Notes and the Note Guarantees with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any), including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes, and, subject to Sections 7.04 and 7.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, Additional Notes, if any), including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes.  (Section 3.08 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 10.02.) However, without the consent of each Holder affected, an amendment, supplement or waiver under this Section 10.02 may not (with respect to any Notes held by a non-consenting Holder):

 

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

 

(2) reduce the principal of or change the fixed maturity of any Note or alter any of the provisions with respect to the redemption of the Notes; provided, however, that any purchase or repurchase of Notes pursuant to Sections 4.09 and 5.10 or Section 5.15 hereof, shall not be deemed a redemption of the Notes;

 

(3) reduce the rate of or change the time for payment of interest, including default interest on any Note;

 

(4) waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

 

(5) make any Note payable in money other than that stated in the Notes;

 

(6) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of, principal of, or interest or premium, if any, on, the Notes (other than as permitted by clause (7) below);

 

(7) waive a redemption payment with respect to any Note (other than a payment required by Sections 4.09 and 5.10 or Section 5.15 hereof);

 

(8) release any Guarantor from any of its obligations under its Note Guarantee or this Indenture, except in accordance with the terms of this Indenture; or

 

(9) make any change in the preceding amendment and waiver provisions.

 

Upon the request of the Issuers accompanied by a resolution of their respective Boards of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 10.05 hereof, the

 

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Trustee will join with the Issuers and the Guarantors in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental indenture.

 

It is not necessary for the consent of the Holders of Notes under this Section 10.02 to approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient if such consent approves the substance thereof.

 

After an amendment, supplement or waiver under this Section 10.02 becomes effective, the Issuers will send to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver.  Any failure of the Issuers to send such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver.

 

Section 10.03                      Revocation and Effect of Consents.

 

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note.  However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective.  An amendment, supplement or waiver becomes effective in accordance with its terms (except as provided in the second succeeding paragraph) and thereafter binds every Holder.

 

The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver.  If a record date is fixed, then notwithstanding the second to last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies) and only those Persons, shall be entitled to consent to such amendment or waiver or revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.

 

After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of the clauses (1) through (9) of Section 10.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the consenting Holder’s Note.

 

Section 10.04                      Notation on or Exchange of Notes.

 

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated.  The Issuers in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

 

Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.

 

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Section 10.05                      Trustee to Sign Amendments, etc.

 

The Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 10 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee.  In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 8.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 13.04 hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

 

Section 10.06                      Compliance with Trust Indenture Act.

 

Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental indenture that complies with the TIA as then in effect.

 

A consent to any amendment, supplement or waiver under this Indenture by any Holder given in connection with a purchase, tender or exchange of such Holder’s Notes shall not be rendered invalid by such purchase, tender or exchange.

 

ARTICLE 11
  NOTE GUARANTEES

 

Section 11.01                      Guarantee.

 

(a)         Subject to this Article 11, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Issuers hereunder or thereunder, that:

 

(1)  the principal of, premium, if any, and interest on, the Notes will be promptly paid in full when due, whether at Stated Maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Issuers to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

 

(2) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.

 

Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately.  Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection.

 

(b)         The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuers, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor.  Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuers, any right to require a proceeding first against the Issuers, protest, notice and all demands whatsoever and covenants that its Note Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

 

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(c)          If any Holder or the Trustee is required by any court or otherwise to return to the Issuers, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuers or the Guarantors, any amount paid by either to the Trustee or such Holder, each Note Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

 

(d)         Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.  Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 7 hereof for the purposes of this Section 11.01, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such obligations as provided in Article 7 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purposes of this Section 11.01.  The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.

 

Section 11.02                      Limitation on Guarantor Liability.

 

Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirm that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee.  To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance.

 

Section 11.03                      Execution and Delivery of Notation of Note Guarantee.

 

To evidence its Note Guarantee set forth in Section 11.01 hereof, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form attached as Exhibit B hereto will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture (including any supplement thereto) will be executed on behalf of such Guarantor by one of its Officers.

 

Each Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee.

 

If an Officer whose signature is on this Indenture or on the notation of its Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which such notation of its Note Guarantee is endorsed, the Note Guarantee will be valid nevertheless.

 

The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors.

 

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In the event that the Issuers or any of TransMontaigne Partners’ Restricted Subsidiaries creates or acquires any Subsidiary after the date of this Indenture, if required by Section 5.16 hereof, the Issuers will cause such Subsidiary to comply with the provisions of Section 5.16 hereof and this Article 11, to the extent applicable.

 

Section 11.04                      Guarantors May Consolidate, etc., on Certain Terms.

 

Except as otherwise provided in Section 11.05 hereof, no Guarantor may sell or otherwise dispose of all or substantially all of its properties or assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than TransMontaigne Partners or another Guarantor, unless:

 

(1) immediately after giving effect to such transaction, no Default or Event of Default exists; and

 

(2) either:

 

(A)       the Person acquiring the properties or assets in any such sale or disposition or the Person formed by or surviving any such consolidation or merger is a Guarantor, or unconditionally assumes all the obligations of that Guarantor under this Indenture and its Note Guarantee on the terms set forth herein or therein, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee; or

 

(A)       if the Person acquiring the properties or assets in any such sale or disposition or the Person formed by or surviving any such consolidation or merger is not (either before or after giving effect to such transaction) a Guarantor, then such transaction does not violate Section 5.10 hereof, including the application of the Net Proceeds thereof.

 

In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor.  Such successor Person thereupon may cause to be signed any or all of the notations of Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Issuers and delivered to the Trustee.  All the Note Guarantees so issued will in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof.

 

Section 11.05                      Releases.

 

(a)                     The Guarantee of a Guarantor of the Notes and all of such Guarantor’s other Obligations under the Indenture will be released:

 

(1)         in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) TransMontaigne Partners or a Restricted Subsidiary of TransMontaigne Partners, if the sale or other disposition does not violate Section 5.10 hereof.

 

(2)         in connection with any sale or other disposition of all of the Capital Stock of that Guarantor after which the applicable Guarantor is no longer a Restricted Subsidiary of

 

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TransMontaigne Partners, if the sale or other disposition does not violate Section 5.10 hereof; provided that the Issuers shall deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Issuers in accordance with the provisions of the Indenture, including without limitation Section 5.10 hereof;

 

(3)         if TransMontaigne Partners designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with Section 5.17 hereof;

 

(4)         at such time as such Guarantor ceases to guarantee any other Indebtedness under a Credit Facility that resulted in the creation of such Guarantee;

 

(5)         upon Legal or Covenant Defeasance or satisfaction and discharge of the Indenture as provided in Articles 9 and 12 hereof; or

 

(6)         upon the merger, amalgamation or consolidation of such Guarantor with and into an Issuer or another Guarantor that is the surviving Person in such merger, amalgamation or consolidation, or upon the liquidation or dissolution of such Guarantor in accordance with the applicable provisions of the Indenture.

 

ARTICLE 12
 SATISFACTION AND DISCHARGE

 

Section 12.01                      Satisfaction and Discharge.

 

This Indenture will be discharged and will cease to be of further effect as to all Notes issued hereunder, when:

 

(1) either:

 

(A)       all Notes that have been authenticated, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuers, have been delivered to the Trustee for cancellation; or

 

(B)       all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the sending of a notice of redemption or otherwise or will become due and payable within one year and the Issuers or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest, if any, to the date of Stated Maturity or redemption;

 

(2) in the case of clause (1)(B) above, no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) and the deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which any Issuer or any Guarantor is a party or by which any Issuer or any Guarantor is bound;

 

80

 

(3) the Issuers or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and

 

(4) the Issuers have delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at Stated Maturity or on the Redemption Date, as the case may be.

 

In addition, the Issuers must deliver to the Trustee (a) an Officers’ Certificate stating that all conditions precedent set forth in clauses (1) through (4) above have been satisfied, and (b) an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and qualifications), stating that all conditions precedent to satisfaction and discharge set forth in Section 12.01(2) and (4) have been satisfied; provided that the Opinion of Counsel with respect to 12.01(2) above may be to the knowledge of such counsel.

 

Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section 12.01, the provisions of Sections 12.02 and 9.06 hereof will survive.  In addition, nothing in this Section 12.01 will be deemed to discharge those provisions of Section 8.07 hereof, that, by their terms, survive the satisfaction and discharge of this Indenture.

 

Section 12.02                      Application of Trust Money.

 

Subject to the provisions of Section 9.06 hereof, all money deposited with the Trustee pursuant to Section 12.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including either Issuer acting as Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

 

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 12.01 hereof by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Issuers’ and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 12.01 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 12.01; provided that if the Issuers have made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of their obligations, the Issuers shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

 

ARTICLE 13
 MISCELLANEOUS

 

Section 13.01                      Trust Indenture Act Controls.

 

If any provision of the Indenture limits, qualifies or conflicts with another provision which is required to be included in the Indenture by the TIA (or in any other indenture qualified thereunder), the provision required by the TIA shall control.

 

81

 

Section 13.02                      Notices.

 

Any notice or communication by the Issuers, any Guarantor or the Trustee to the others is duly given if in writing in the English language and delivered in Person or by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

 

If to the Issuers and/or any Guarantor:

 

TransMontaigne Partners L.P.

TLP Finance Corp. 
 1670 Broadway, Suite 3100
 Denver, Colorado 80202
 Facsimile No.:  (303) 626-8238
 Attention:  Chief Financial Officer

 

With a copy to:

 

Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Facsimile No.:  (713) 546-5401

Attention:  Ryan J. Maierson

 

If to the Trustee:

 

U.S. Bank National Association
 Houston Greenway Plaza

8 Greenway Plaza, Suite 1100

Houston, Texas 77046

Facsimile No.:  (713) 212-3718
 Attention:  Alejandro Hoyos

 

The Issuers, any Guarantor or the Trustee, by notice to the others, may designate additional or different addresses for subsequent notices or communications.

 

All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication will also be so mailed to any Person described in TIA § 313(c), to the extent required by the TIA.

 

Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar; provided, however, that any notice or communication to a Holder of a Global Note will be given in the manner prescribed by DTC or other Depositary. Failure to give a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.

 

If a notice or communication is sent in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

 

82

 

If the Issuers send a notice or communication to Holders, they will send a copy to the Trustee and each Agent at the same time.

 

Section 13.03                      Communication by Holders of Notes with Other Holders of Notes.

 

Holders may communicate with other Holders with respect to their rights under this Indenture or the Notes.  The Issuers, the Guarantors, the Trustee, the Registrar and anyone else shall have the protection of the TIA § 312(c).

 

Section 13.04                      Certificate and Opinion as to Conditions Precedent.

 

Upon any request or application by the Issuers to the Trustee to take any action under this Indenture, the Issuers shall furnish to the Trustee:

 

(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

 

(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 13.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

 

Section 13.05                      Statements Required in Certificate or Opinion.

 

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture must include:

 

(1) a statement that the person making such certificate or opinion has read such covenant or condition;

 

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3) a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and

 

(4) a statement as to whether or not, in the opinion of such person, such condition or covenant has been satisfied.

 

Section 13.06                      Rules by Trustee and Agents.

 

The Trustee may make reasonable rules for action by or at a meeting of Holders.  The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

 

Section 13.07                      No Personal Liability of Directors, Officers, Employees and Stockholders.

 

No past, present or future director, officer, partner, member, employee, incorporator, manager or unit holder or other owner of Equity Interest of the Issuers, the General Partner or any Guarantor, as such, will have any liability for any obligations of the Issuers or the Guarantors under the Notes, this Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their

 

83

 

creation.  Each Holder of Notes by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees.

 

Section 13.08                      Governing Law.

 

THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES.

 

Section 13.09                      No Adverse Interpretation of Other Agreements.

 

This Indenture may not be used to interpret any other indenture, loan or debt agreement of TransMontaigne Partners or its Subsidiaries or of any other Person.  Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

Section 13.10                      Successors.

 

All agreements of the Issuers in this Indenture and the Notes will bind their respective successors.  All agreements of the Trustee in this Indenture will bind its successors.  All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 11.05 hereof.

 

Section 13.11                      Severability.

 

In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

 

Section 13.12                      Counterpart Originals.

 

The parties may sign any number of copies of this Indenture, and each party hereto may sign any number of separate copies of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes.  Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

Section 13.13                      Table of Contents, Headings, etc.

 

The Table of Contents and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

 

Section 13.14                      Payment Date Other Than a Business Day.

 

If any payment with respect to any principal of, premium, if any, on, or interest on any Note (including any payment to be made on any date fixed for redemption or purchase of any Note) is due on a day which is not a Business Day, then the payment need not be made on such date, but may be made on the next Business Day with the same force and effect as if made on such date, and no interest will accrue for the intervening period.

 

84

 

Section 13.15                      Evidence of Action by Holder.

 

Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount of the Notes may take action (including the making of any demand or request, the giving of any direction, notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with procedures approved by the Trustee, (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders or (d) in the case of Notes evidenced by a Global Note, by any electronic transmission or other message, whether or not in written format, that complies with the Depositary’s applicable procedures.

 

[Signatures on following page]

 

85

 

SIGNATURES

 

IN WITNESS WHEREOF, the parties have executed this Indenture as of the date first written above.

 

	
 
    	
TRANSMONTAIGNE PARTNERS L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
TransMontaigne   GP L.L.C.,
    
	
 
    	
 
    	
its   general partner
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Robert T. Fuller
    
	
 
    	
 
    	
Robert   T. Fuller
    
	
 
    	
 
    	
Executive   Vice President, Chief Financial
   Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TLP FINANCE CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Robert T. Fuller
    
	
 
    	
 
    	
Robert T. Fuller
    
	
 
    	
 
    	
Executive Vice President,   Chief Financial 
    
	
 
    	
 
    	
Officer   and Treasurer
    

 

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	
 
    	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
RAZORBACK   L.L.C., a Delaware   limited liability company
    
	
 
    	
 
    
	
 
    	
TLP   OPERATING FINANCE CORP., a Delaware corporation
    
	
 
    	
 
    
	
 
    	
TPME   L.L.C., a Delaware   limited liability company
    
	
 
    	
 
    
	
 
    	
TPSI   TERMINALS L.L.C., a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
TRANSMONTAIGNE   OPERATING GP L.L.C.,   a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
TRANSMONTAIGNE   TERMINALS L.L.C., a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert T. Fuller
    
	
 
    	
 
    	
Robert T. Fuller
    
	
 
    	
 
    	
Executive   Vice President, Chief Financial Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TRANSMONTAIGNE   OPERATING COMPANY L.P.,   a Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
 
    	
By: TransMontaigne   Operating GP L.L.C., its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert T. Fuller
    
	
 
    	
 
    	
Robert T. Fuller
    
	
 
    	
 
    	
Executive   Vice President, Chief Financial Officer and Treasurer
    
				

 

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[SIGNATURE PAGE TO THE INDENTURE]

 

 

EXHIBIT A

 

FORM OF GLOBAL NOTE

 

CUSIP:  89376VAA8

 

6.125% Senior Notes due 2026

 

	
No.
    	
$
    

 

TRANSMONTAIGNE PARTNERS L.P.

and

TLP FINANCE CORP.

 

promises to pay to                , or registered assigns,

 

the principal sum of                                                            DOLLARS [or such greater or lesser amount as may be specified on the attached schedule]* on February 15, 2026.

 

Interest Payment Dates:  February 15 and August 15

 

Record Dates:  February 1 and August 1

 

Dated:                 , 20

	
 
    	
TRANSMONTAIGNE PARTNERS L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
TransMontaigne GP L.L.C.,
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
TLP FINANCE CORP.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
This is one of the   Notes referred to
    	
 
    
	
in the within-mentioned   Indenture:
    	
 
    
	
 
    	
 
    
	
U.S. BANK NATIONAL   ASSOCIATION,
    	
 
    
	
as Trustee
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Authorized   Signatory
    	
 
    
				

 

*                 To be included only if the Note is issued in global form.

 

 

[Form of Face of Note]

 

6.125% Senior Notes due 2026

 

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 3.11 OF THE INDENTURE AND (4) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.  UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

3

 

EXHIBIT A

 

[Form of Reverse of Note]

 

6.125% Senior Notes due 2026

 

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

 

(1) INTEREST.  TransMontaigne Partners L.P., a Delaware limited partnership (“TransMontaigne Partners”), and TLP Finance Corp., a Delaware corporation (“Finance Corp.” and, together with TransMontaigne Partners, the “Issuers”), promise to pay interest on the principal amount of this Note at 6.125% per annum from February 12, 2018 until maturity.  The Issuers will pay interest semi-annually in arrears on February 15 and August 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”).  Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided further that the first Interest Payment Date shall be August 15, 2018. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

(2) METHOD OF PAYMENT.  The Issuers will pay interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the February 1 or August 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 3.12 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium and interest at the office or agency of the Issuers maintained for such purpose within or without the City and State of New York, or, at the option of the Issuers, payment of interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders; provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest and premium on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Issuers or the Paying Agent to an account in the United States.  Such payment will be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

 

(3) PAYING AGENT AND REGISTRAR.  Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar.  The Issuers may change any Paying Agent or Registrar without notice to any Holder.  TransMontaigne Partners or any of its Subsidiaries may act in any such capacity.

 

(4) INDENTURE.  The Issuers issued the Notes under the Indenture, dated as of February 12, 2018 (the “Base Indenture”), among the Issuers and U.S. Bank National Association, a national banking association, as trustee, as amended and supplemented by the First Supplemental Indenture, dated as of February 12, 2018 (the “First Supplemental Indenture”), among the Issuers, the subsidiary guarantors listed on the signature pages thereto (each, a “Guarantor” and collectively, the “Guarantors”) and U.S. Bank National Association, a national banking association, as trustee.  The terms of the Notes include those stated in the Indenture.  The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.  The Notes are

 

 

unsecured obligations of the Issuers.  The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.

 

(5) OPTIONAL REDEMPTION.

 

(a)         Except pursuant to paragraphs (b), (c) and (d) of this Section 4, the Notes will not be redeemable at the Issuers’ option prior to February 15, 2021.  On or after February 15, 2021, the Issuers may redeem all or a part of the Notes, upon prior notice in accordance with Section 4.02 of the Indenture, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest on the Notes redeemed to, but excluding, the applicable Redemption Date, if redeemed during the twelve-month period beginning on February 15th of each year indicated below, subject to the rights of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date:

 

	
Year
    	
 
    	
Percentage
    	
 
    
	
2021
    	
 
    	
104.594
    	
%
    
	
2022
    	
 
    	
103.063
    	
%
    
	
2023
    	
 
    	
101.531
    	
%
    
	
2024 and   thereafter
    	
 
    	
100.000
    	
%
    

 

Unless the Issuers default in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable Redemption Date.

 

(b)         Notwithstanding the provisions of subparagraph (a) of this Paragraph 4, at any time prior to February 15, 2021, the Issuers may on any one or more occasions redeem, upon prior notice in accordance with Section 4.03 of the Indenture, up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture at a redemption price of 106.125% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the Redemption Date (subject to the right of Holders of Notes on the relevant record date to receive interest due on an interest payment date that is on or prior to the Redemption Date), with an amount of cash not greater than the net cash proceeds of one or more Equity Offerings by TransMontaigne Partners; provided that at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued under this Indenture (excluding Notes held by TransMontaigne Partners and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and the redemption occurs within 180 days of the date of the closing of such Equity Offering.

 

(c)                                  Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to February 15, 2021, the Issuers may also redeem all or a part of the Notes, upon prior notice  in accordance with Section 4.02 of the Indenture, at a redemption price equal to 100% of the principal amount of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid interest to, but excluding, the Redemption Date, subject to the rights of Holders on the relevant record date to receive interest due on an interest payment date that is on prior to the Redemption Date.

 

(d)                                 The Issuers may also redeem the Notes as provided in Section 5.15(d) of the Indenture, on the terms and subject to the conditions set forth therein.

 

For purposes of this Paragraph 5, “Applicable Premium” means, with respect to any Note at the time of determination, the greater of: (1) 1.00% of the principal amount of the Note; or (2) the excess of: (a) the present value at such time of (i) the redemption price of the Note at February 15, 2021 (such

 

5

 

redemption price being set forth in the table appearing in Section 4.07 of the Indenture) plus (ii) all required interest payments due on the Note through February 15, 2021 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points; over (b) the principal amount of the Note, if greater. “Treasury Rate” means, as of the time of computation, the yield to maturity as of such time of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to February 15, 2021; provided, however, that if the period from the Redemption Date to February 15, 2021, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

(6) MANDATORY REDEMPTION.

 

The Issuers are not required to make mandatory redemption or sinking fund payments with respect to the Notes. The Issuers may acquire the Notes by means other than a redemption, whether pursuant to a tender offer, open market purchase or otherwise, so long as the acquisition does not violate the terms of the Indenture.

 

(7) REPURCHASE AT THE OPTION OF HOLDER.

 

(a)         If there is a Change of Control, the Issuers will be required to make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of each Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant interest payment date that is on or prior to the date of purchase (the “Change of Control Payment”).  Within 30 days following any Change of Control, the Issuers will send a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture.

 

(b)         If the Issuers or a Restricted Subsidiary of TransMontaigne Partners consummates any Asset Sales, within five days of each date on which the aggregate amount of Excess Proceeds exceeds $20.0 million, the Issuers will commence an offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in Section 5.10 of the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount plus accrued and unpaid interest to the date of purchase, in accordance with the procedures set forth in Section 4.09 of the Indenture.  If any Excess Proceeds remain after consummation of an Asset Sale Offer, TransMontaigne Partners (or any Restricted Subsidiary) may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture.  If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the representative of such other pari passu Indebtedness will select such other pari passu Indebtedness to be purchased on a pro rata basis.  Holders of Notes that are the subject of an Asset Sale Offer will receive an offer to purchase from the Issuers prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” attached to the Notes.

 

6

 

(8) NOTICE OF REDEMPTION.  Notice of redemption will be mailed (or sent electronically in the case of notices to DTC), at least 15 days but not more than 60 days before the Redemption Date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be given more than 60 days prior to a Redemption Date if the notice is issued in connection with a defeasance of the Notes or a satisfaction or discharge of the Indenture.  Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 and in excess of $2,000, unless all of the Notes held by a Holder are to be redeemed. Notice of any redemption of the Notes (including upon an Equity Offering or in connection with a transaction (or series of related transactions) that constitute a Change of Control) may, at the Issuers’ discretion, be given prior to the completion thereof and be subject to one or more conditions precedent, including, but not limited to, completion of the related Equity Offering or Change of Control. In addition, if such redemption is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuers’ discretion, the Redemption Date may be delayed until such time (including more than 60 days after the date the notice of redemption was delivered) as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the Redemption Date, or by the Redemption Date so delayed, or such notice may be rescinded at any time in the Issuers’ discretion if in the good faith judgment of the Issuers any or all of such conditions will not be satisfied

 

(9) DENOMINATIONS, TRANSFER, EXCHANGE.  The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.  The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.  The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Issuers may require a Holder to pay any transfer tax or similar governmental charge required by law or permitted by the Indenture.  The Issuers need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part.  Also, the Issuers need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

 

(10) PERSONS DEEMED OWNERS.  The registered Holder of a Note may be treated as its owner for all purposes, and only such Holders have rights under the Indenture.

 

(11) AMENDMENT, SUPPLEMENT AND WAIVER.  Subject to certain exceptions, the Indenture or the Notes or the Note Guarantees may be amended or supplemented with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any, and any existing Default or Event of Default or compliance with any provision of the Indenture or the Notes or the Note Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes including Additional Notes, if any.  Without the consent of any Holder of a Note, the Indenture or the Notes or the Note Guarantees may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Issuers’ or a Guarantor’s obligations to Holders of the Notes and Note Guarantees in the case of a merger or consolidation or sale of all or substantially all of the Issuers’ or such Guarantor’s assets, as applicable and in accordance with the Indenture, to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the TIA, to conform the text of the Indenture, the Notes or the Note Guarantees to any

 

7

 

provision of the “Description of Notes” section of the Issuers’ Prospectus Supplement to the extent that such provision was intended to be a verbatim recitation of a provision of the Indenture, the Notes or Note Guarantee, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture as of the Issue Date, to allow any Guarantor to execute a Supplemental Indenture and/or a notation of a Note Guarantee with respect to the Notes or to reflect the release of a Note Guarantee in accordance with this Indenture, to secure the Notes and/or the Note Guarantees and to release such Liens, in each case pursuant to Section 5.12 of the Indenture, to comply with the rules of any applicable securities depository or to provide for the reorganization of TransMontaigne Partners in any other form or entity, in accordance with Section 6.01(b) of the Indenture.

 

(12) DEFAULTS AND REMEDIES.  Events of Default include:  (i) default for 30 days in the payment when due of interest on, with respect to the Notes; (ii) default in the payment when due (at Stated Maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the Notes; (iii) failure by TransMontaigne Partners or any of its Restricted Subsidiaries to timely consummate repurchase offers under Section 5.15 or Sections 4.09 and 5.10 of the Indenture  or to comply with Section 6.01 of the Indenture; (iv) failure by TransMontaigne Partners for 90 days after written notice to TransMontaigne Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with Section 5.03(a) of the Indenture, (v) failure by TransMontaigne Partners or any of its Restricted Subsidiaries for 60 days after written notice to TransMontaigne Partners by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding to comply with any of the other agreements in the Indenture; (vi) default under certain other agreements relating to Indebtedness of TransMontaigne Partners or its Restricted Subsidiaries which default (A) is caused by a failure to pay principal of, or interest or premium, if any, on, such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a “Payment Default”) or (B) results in the acceleration of such Indebtedness prior to its express maturity, in each case subject to a minimum threshold and cure period; (vii) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (viii) certain events of bankruptcy or insolvency with respect to the Issuers or any of TransMontaigne Partners’ Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary; and (ix) except as permitted by the Indenture, any Note Guarantee is held in any judicial proceeding to be unenforceable or invalid or ceases for any reason to be in full force and effect or any Guarantor or any Person acting on its behalf denies or disaffirms its obligations under such Guarantor’s Note Guarantee.  If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.  Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to Finance Corp., TransMontaigne Partners or any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, all outstanding Notes will become due and payable immediately without further action or notice.  Holders may not enforce the Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except a Default or Event of Default relating to the payment of principal, interest, or premium, if any.  The Holders of a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, rescind an acceleration or waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest or premium,

 

8

 

if any, on, or the principal of, the Notes.  The Issuers and the Guarantors are required to deliver to the Trustee annually, commencing with the fiscal year ending December 31, 2018, a statement regarding compliance with the Indenture, and the Issuers and the Guarantors are required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default and what action TransMontaigne Partners is taking or proposes to take with respect thereto.

 

(13) TRUSTEE DEALINGS WITH THE ISSUERS.  The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Issuers or their Affiliates, and may otherwise deal with the Issuers or their Affiliates, as if it were not the Trustee.

 

(14) NO RECOURSE AGAINST OTHERS.  A director, officer, partner, member, employee, incorporator, manager or unit holder or other owner of Equity Interest of the Issuers, the General Partner or any Guarantor, as such, will not have any liability for any obligations of the Issuers or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for the issuance of the Notes and the Note Guarantees.

 

(15) AUTHENTICATION.  This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

 

(16) ABBREVIATIONS.  Customary abbreviations may be used in the name of a Holder or an assignee, such as:  TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

(17) CUSIP NUMBERS.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Issuers have caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.

 

(18) GOVERNING LAW.  THE LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES.

 

The Issuers will furnish to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:

 

TRANSMONTAIGNE PARTNERS L.P.

TLP Finance Corp. 
 1670 Broadway, Suite 3100
 Denver, Colorado 80202
 Attention:  Chief Financial Officer

 

9

 

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

	
(I) or (we) assign   and transfer this Note to:
    	
 
    
	
 
    	
(Insert   assignee’s legal name)
    
	
 
    	
 
    
	
 
    
	
(Insert   assignee’s soc. sec. or tax I.D. no.)
    
	
 
    
	
 
    
	
 
    
	
(Print or type   assignee’s name, address and zip code)
    
	
 
    
	
and irrevocably appoint
    
	
to transfer this Note   on the books of the Issuers. The agent may substitute another to act for him.
    
			

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
(Sign exactly as   your name appears on the face of this Note)
    
	
 
    	
 
    	
 
    

 

	
Signature Guarantee*:
    	
 
    	
 
    

 

*                                         Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-1

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Issuers pursuant to Section 5.10 or 5.15 of the Indenture, check the appropriate box below:

 

o Section 5.10                                                                                                        o Section 5.15

 

If you want to elect to have only part of the Note purchased by the Issuers pursuant to Section 5.10 or Section 5.15 of the Indenture, state the amount you elect to have purchased:

 

	
 
    	
$
    

 

	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Your Signature:
    	
 
    
	
 
    	
 
    	
 
    	
(Sign exactly as   your name appears on the face of this Note)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Tax Identification No.:
    

 

	
Signature   Guarantee*:
    	
 
    	
 
    	
 
    

 

*                                         Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-2

 

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

 

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

 

	
Date of Exchange
    	
 
    	
Amount of decrease in 
   Principal Amount
   of
   this Global Note
    	
 
    	
Amount of increase in 
   Principal Amount
   of
   this Global Note
    	
 
    	
Principal Amount
   of this Global Note 
   following such 
   decrease
   (or increase)
    	
 
    	
Signature of authorized
    officer of Trustee or 
   Custodian
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

*                 This schedule should be included only if the Note is issued in global form.

 

A-3

 

EXHIBIT E

 

[FORM OF NOTATION OF GUARANTEE]

 

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture, dated as of February 12, 2018 (the “Indenture”), among TransMontaigne Partners L.P., a Delaware limited partnership (“TransMontaigne Partners”), and TLP Finance Corp., a Delaware corporation (“Finance Corp.” and, together with TransMontaigne Partners, the “Issuers”), the Guarantors party thereto and U.S. Bank National Association, as trustee (the “Trustee”), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes, whether at Stated Maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other obligations of the Issuers to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise.  The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 11 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee.  Each Holder of a Note, by accepting the same, agrees to and shall be bound by such provisions.

 

Capitalized terms used but not defined herein have the meanings given to them in the Indenture.

 

	
 
    	
[NAME OF GUARANTOR(S)]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

E-1

 

EXHIBIT F

 

FORM OF SUPPLEMENTAL INDENTURE
 TO BE DELIVERED BY SUBSEQUENT GUARANTORS

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of                 , 200  ,  is among                    (the “Guaranteeing Subsidiary”), TransMontaigne Partners L.P., a Delaware limited partnership (“TransMontaigne Partners”), and TLP Finance Corp. (“Finance Corp.” and, together with TransMontaigne Partners, the “Issuers”), the other Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, as trustee under the Indenture referred to below (the “Trustee”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuers have heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of February 12, 2018 providing for the issuance of 6.125% Senior Notes due 2026 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a Supplemental Indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Issuers’ Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Note Guarantee”); and

 

WHEREAS, pursuant to Section 10.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

1.                                      CAPITALIZED TERMS.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2.                                      AGREEMENT TO GUARANTEE.  The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Note Guarantee and in the Indenture including but not limited to Article 11 thereof.

 

4.                                      NO RECOURSE AGAINST OTHERS.  No past, present or future director, officer, partner, member, employee, incorporator, manager,  unit holder or other owner of an Equity Interest of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Issuers or the Guarantors under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of the Notes by accepting a Note waives and releases all such liability.  The waiver and release are part of the consideration for issuance of the Notes and the Note Guarantees.

 

5.                                      NEW YORK LAW TO GOVERN.  THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

 

6.                                      COUNTERPARTS.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.

 

7.                                      EFFECT OF HEADINGS.  The Section headings herein are for convenience only and shall not affect the construction hereof.

 

F-1

 

8.                                      THE TRUSTEE.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the Recitals contained herein, all of which Recitals are made solely by the Guaranteeing Subsidiary and the Issuers.

 

F-2

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

 

	
 
    	
[GUARANTEEING   SUBSIDIARY]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TRANSMONTAIGNE PARTNERS L.P.
    
	
 
    	
 
    
	
 
    	
By:
    	
TransMontaigne GP L.L.C.,
    
	
 
    	
 
    	
its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Robert T. Fuller
    
	
 
    	
 
    	
Title:
    	
Executive Vice President, Chief Financial
    
	
 
    	
 
    	
Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
TLP FINANCE CORP.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    	
Robert T. Fuller
    
	
 
    	
 
    	
Title:
    	
Executive Vice   President, Chief Financial
    
	
 
    	
 
    	
 
    	
Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[EXISTING GUARANTORS]
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
U.S. BANK NATIONAL   ASSOCIATION,
    
	
 
    	
as Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Signatory
    

 

F-3Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of January 26, 2018, by and between DRONE USA,
INC., a Delaware corporation, with headquarters located at 16 Hamilton Street, West Haven, CT 06516 (the “Company”),
and AUCTUS FUND, LLC, a Delaware limited liability company, with its address at 177 Huntington Avenue, 17th Floor, Boston,
MA 02115 (the “Buyer”).

 

WHEREAS:

 

A.
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933 Act”);

 

B.
Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement
the 10% convertible note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$105,000.00
(together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the “Note”), convertible into shares of common stock, $0.0001 par value per share, of the
Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note.

 

C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set
forth immediately below its name on the signature pages hereto; and

 

NOW
THEREFORE, the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1. PURCHASE
AND SALE OF NOTE.

 

a.
Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees
to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature
pages hereto.

 

b. Form
of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued
and sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately
available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the
Note in the principal amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the
signature pages hereto, and (ii) the Company shall deliver such duly executed Note on behalf of the Company, to the
Buyer, against delivery of such Purchase Price.

 

     

     

    

 

c.
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 7 and Section
8 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall
be 12:00 noon, Eastern Standard Time on or about January 26, 2018, or such other mutually agreed upon time. The closing of the
transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may
be agreed to by the parties.

 

2. REPRESENTATIONS
AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company that:

 

a.
Investment Purpose. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any,
as are issuable (i) on account of interest on the Note (ii) as a result of the events described in Sections 1.3 and
1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant
to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and,
collectively with the Note, the “Securities”) for its own account and not with a present view towards the public sale
or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided,
however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum
or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.

 

b. Accredited
Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D (an “Accredited Investor”).

 

c.
Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying
upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility
of the Buyer to acquire the Securities.

 

d. Information.
The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be, furnished
with all materials relating to the business, finances and operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been,
and for so long as the Note remains outstanding will continue to be, afforded the opportunity to ask questions of
the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and
will not disclose such information unless such information is disclosed to the public prior to or promptly following such
disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its
advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations
and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a
significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company's
representations and warranties made herein.

 

    	 	2	 

     

    

 

e.
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Securities.

 

f. Transfer
or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless
(a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall
have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope
customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company,
(c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the
1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities
only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to
Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule)
(“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of
counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion
shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in
accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under
circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as
that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register
such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities
may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. In the event
that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or Regulation S, within three (3) business days of delivery of
the opinion to the Company, the Company shall pay to the Buyer liquidated damages of five percent (5%) of the outstanding
amount of the Note per day plus accrued and unpaid interest on the Note, prorated for partial months, in cash or shares at
the option of the Buyer (“Standard Liquidated Damages Amount”). If the Buyer elects to be pay the Standard
Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price (as defined in the
Note) at the time of payment.

 

    	 	3	 

     

    

 

g.
Legends. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under the
1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular
date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the certificates for such Securities):

 

“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for
sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation
S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such
holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act,
which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities,
including those represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus
delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with
respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline,
it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

    	 	4	 

     

    

 

h.
Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed
and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in
accordance with its terms.

 

i. Residency.
The Buyer is a resident of the jurisdiction set forth in the preamble.

 

3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer that:

 

a.
Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly
organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power
and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now
owned, leased, used, operated and conducted. The Company and each of its Subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have
a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations,
assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries”
means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly,
any equity or other ownership interest.

 

b. Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement,
the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with
the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the
consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the
Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof)
have been duly authorized by the Company’s Board of Directors and no further consent or authorization of the Company,
its Board of Directors, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the
Company by its authorized representative, and such authorized representative is the true and official representative with
authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly,
and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments
will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its
terms.

 

    	 	5	 

     

    

 

c.
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: (i) 200,000,000 shares
of Common Stock, of which approximately 43,460,630 shares are issued and outstanding; and (ii) 5,000,000 shares of preferred stock,
of which 250 are issued and outstanding. Except as disclosed in the SEC Documents, no shares are reserved for issuance pursuant
to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than the Note) exercisable
for, or convertible into or exchangeable for shares of Common Stock and 15,384,615 shares are reserved for issuance upon conversion
of the Note. All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully
paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights
of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company.
Except as disclosed in the SEC Documents, as of the effective date of this Agreement, (i) there are no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments
or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of
capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or
may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements
or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities
under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the
Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion
Shares. The Company has filed in its SEC Documents true and correct copies of the Company’s Certificate of Incorporation
as in effect on the date hereof (“Certificate of Incorporation”), the Company’s By-laws, as in effect on the
date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the
Company and the material rights of the holders thereof in respect thereto. The Company shall provide the Buyer with a written
update of this representation signed by the Company’s Chief Executive on behalf of the Company as of the Closing Date.

 

d. Issuance
of Shares. The issuance of the Note is duly authorized and, upon issuance in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens, charges
and other encumbrances with respect to the issue thereof. The Conversion Shares are duly authorized and reserved for
issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and
non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be
subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability
upon the holder thereof.

 

    	 	6	 

     

    

 

e.
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock
upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation to
issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

 

f. No
Conflicts. The execution, delivery and performance of this Agreement and the Note by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and
reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of
the Certificate of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or
instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any
self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for
such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or
in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its
Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries
is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its
Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take
any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the
Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being
conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or
regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933
Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of,
or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization
or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this
Agreement, the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms
hereof and to issue the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or
prior to the date hereof. The Company is not in violation of the listing requirements of the OTC Pink (the “OTC
Pink”), the OTCQB or any similar quotation system, and does not reasonably anticipate that the Common Stock will be
delisted by the OTC Pink, the OTCQB or any similar quotation system, in the foreseeable future nor are the Company's
securities “chilled” by DTC. The Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing.

 

    	 	7	 

     

    

 

g.
SEC Documents; Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended
(the “1934 Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being
hereinafter referred to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies
of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. None of the statements made in any
such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of
the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present
in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in
the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business subsequent to September 30, 2017, and (ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under generally accepted accounting principles to be reflected in such financial statements,
which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The
Company is subject to the reporting requirements of the 1934 Act. For the avoidance of doubt, filing of the documents required
in this Section 3(g) via the SEC’s Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) shall
satisfy all delivery requirements of this Section 3(g).

 

    	 	8	 

     

    

 

h. Absence
of Certain Changes. Since September 30, 2017, there has been no material adverse change and no material
adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations,
prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

 

i. Absence
of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of
its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in
their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary
description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any
of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are
unaware of any facts or circumstances which might give rise to any of the foregoing.

 

j. Patents,
Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all
patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service
marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its
business as now operated (and, as presently contemplated to be operated in the future). Except as disclosed in the SEC
Documents, there is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s
knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property
necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future);
to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products,
services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is
unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual
Property.

 

k. No
Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter,
corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is
expected to have a Material Adverse Effect.

 

    	 	9	 

     

    

 

l. Tax
Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the
extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent
to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.
The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of
any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing
authority.

 

m. Certain
Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes
payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries
could obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c), none of the officers,
directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries
(other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

 

n. Disclosure.
All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to
the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and
correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the
statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or
circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business,
properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public
disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this
purpose that the Company’s reports filed under the 1934 Act are being incorporated into an effective registration
statement filed by the Company under the 1933 Act).

 

o.
Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting
solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby.
The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of
its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice
or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents to
the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of
the Company and its representatives.

 

    	 	10	 

     

    

 

p.
No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities
to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.

 

q.
No Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or the transactions contemplated hereby.

 

r.  
Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and
operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”),
and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of
the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of
the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Since September 30, 2017, neither the Company nor any of its Subsidiaries
has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices
relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse
Effect.

 

s.
Environmental Matters.

 

(i)
There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of
the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the
environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give
rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its
Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the
Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including,
without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants
contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered,
promulgated or approved thereunder.

 

    	 	11	 

     

    

 

(ii)
Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are
contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no
Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its
Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in
the normal course of the Company’s or any of its Subsidiaries’ business.

 

(iii)
There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its
Subsidiaries that are not in compliance with applicable law.

 

t. Title
to Property. Except as disclosed in the SEC Documents the Company and its Subsidiaries have good and marketable title in
fee simple to all real property and good and marketable title to all personal property owned by them which is material to
the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such
as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its
Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a
Material Adverse Effect.

 

u.
Internal Accounting Controls. Except as disclosed in the SEC Documents the Company and each of its Subsidiaries maintain
a system of internal accounting controls sufficient, in the judgment of the Company’s board of directors, to provide reasonable
assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.

 

    	 	12	 

     

    

 

v.
Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee
or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the
Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political
activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or
employee.

 

w. Solvency.
The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets
have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they
become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the
Company would not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it
intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith
as such debts mature. The Company did not receive a qualified opinion from its auditors with respect to its most recent
fiscal year end and, after giving effect to the transactions contemplated by this Agreement, does not anticipate or know of
any basis upon which its auditors might issue a qualified opinion in respect of its current fiscal year. For the avoidance
of doubt any disclosure of the Borrower’s ability to continue as a “going concern” shall not, by itself, be
a violation of this Section 3(w).

 

x.
No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.

 

y.
 Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that
it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written
request the Company will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’
liability coverage, errors and omissions coverage, and commercial general liability coverage.

 

z.
Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act
as amended on the basis of being a “bad actor” as that term is established in the September 19, 2013 Small Entity
Compliance Guide published by the SEC.

 

    	 	13	 

     

    

 

aa. Shell
Status. The Company represents that it is not a “shell” issuer and has never been a
“shell” issuer, or that if it previously has been a “shell” issuer, that at least twelve (12) months
have passed since the Company has reported Form 10 type information indicating that it is no longer a “shell”
issuer. Further, the Company will instruct its counsel to either (i) write a 144- 3(a)(9) opinion to allow for salability of
the Conversion Shares or (ii) accept such opinion from Holder’s counsel.

 

bb.
No-Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any
of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in
its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

cc. Manipulation
of Price. The Company has not, and to its knowledge no one acting on its behalf has: (i) taken, directly or indirectly,
any action designed to cause or to result, or that could reasonably be expected to cause or result, in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or
agreed to pay to any person any compensation for soliciting another to purchase any other securities of the
Company.

 

dd. 
Sarbanes-Oxley Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley
Act of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder
that are effective as of the date hereof.

 

ee. Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs
any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective
employees are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of
the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the
Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company or any such
Subsidiary. To the knowledge of the Company, no executive officer or other key employee of the Company or any of its
Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may be)
does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The
Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where
failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

 

    	 	14	 

     

    

 

ff. Breach
of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the
representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer
pursuant to this Agreement and it being considered an Event of Default under Section 3.5 of the Note, the Company shall pay
to the Buyer the Standard Liquidated Damages Amount in cash or in shares of Common Stock at the option of the Company, until
such breach is cured. If the Company elects to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such
shares shall be issued at the Conversion Price at the time of payment.

 

4.
COVENANTS.

 

a.
Best Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions
described in Section 7 and 8 of this Agreement.

 

b.
Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take
such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable
closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States
(or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or
prior to the Closing Date.

 

c.
Use of Proceeds. The Company shall use the proceeds from the sale of the Note for working capital and other general corporate
purposes and shall not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership,
enterprise or other person (except in connection with its currently existing direct or indirect Subsidiaries).

 

    	 	15	 

     

    

 

d.
Right of First Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the
closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms
and conditions thereof, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice
to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the
limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First
Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity financing (including
debt with an equity component) (“Future Offerings”) during the period beginning on the Closing Date and ending twelve
(12) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any
respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice
to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an
option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities
being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply
to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply
to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous
offering pursuant to Rule 415 under the 1933 Act), (ii) issuances to employees, officers, directors, contractors, consultants
or other advisors approved by the Board, (iii) issuances to strategic partners or other parties in connection with a commercial
relationship, or providing the Company with equipment leases, real property leases or similar transactions approved by the Board
(iv) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic
partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition
or acquisition of a business, product or license by the Company. The Right of First Refusal also shall not apply to the issuance
of securities upon exercise or conversion of the Company’s options, warrants or other convertible securities outstanding
as of the date hereof or to the grant of additional options or warrants, or the issuance of additional securities, under any Company
stock option or restricted stock plan approved by the shareholders of the Company.

 

e.
Expenses. The Company shall reimburse Buyer for any and all expenses incurred by them in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection herewith
(“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and expenses,
transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents or any
consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of
restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, including,
but not limited to, any and all wire fees, otherwise the Company must make immediate payment for reimbursement to the Buyer for
all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. At Closing, the
Company’s initial obligation with respect to this transaction is to reimburse Buyer’s legal expenses shall be $2,750.00
plus the cost of wire fees.

 

f. Financial
Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers,
assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual
Report on Form 10-K its Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1)
day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and
(iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or
other information the Company makes available or gives to such shareholders. For the avoidance of doubt, filing the documents
required in (i) above via EDGAR or releasing any documents set forth in (ii) above via a recognized wire service shall
satisfy the delivery requirements of this Section 4(f).

 

    	 	16	 

     

    

 

g.
Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange
or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance)
and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain
and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTC Pink, OTCQB
or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq
SmallCap”), the New York Stock Exchange (“NYSE”), or the NYSE American and will comply in all respects with
the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority
(“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any material
notices it receives from the OTC Pink, OTCQB and any other exchanges or quotation systems on which the Common Stock is then listed
regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems. The Company shall
pay any and all fees and expenses in connection with satisfying its obligation under this Section 4(g).

 

h.
Corporate Existence. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or
sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i)
assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith
and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTC Pink, OTCQB, Nasdaq, NasdaqSmallCap,
NYSE or AMEX.

 

i.
No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of
the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.

 

j.
Failure to Comply with the 1934 Act. So long as the Buyer beneficially owns the Note, the Company shall comply with the
reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934
Act.

 

k.
Trading Activities. Neither the Buyer nor its affiliates has an open short position (or other hedging or similar transactions)
in the common stock of the Company and the Buyer agree that it shall not, and that it will cause its affiliates not to, engage
in any short sales of or hedging transactions with respect to the common stock of the Company.

 

    	 	17	 

     

    

 

l.
Restriction on Activities. Commencing as of the date first above written, and until the sooner of the six month anniversary
of the date first written above or payment of the Note in full, or full conversion of the Note, the Company shall not, directly
or indirectly, without the Buyer’s prior written consent, which consent shall not be unreasonably withheld: (a) change the
nature of its business; (b) sell, divest, acquire, change the structure of any material assets other than in the ordinary course
of business; or (c) solicit any offers for, respond to any unsolicited offers for, or conduct any negotiations with any other
person or entity in respect of any variable rate debt transactions (i.e., transactions were the conversion or exercise price of
the security issued by the Company varies based on the market price of the Common Stock) above $500,000, whether a transaction
similar to the one contemplated hereby or any other investment; or (d) file any registration statements with the SEC.

 

m. Legal
Counsel Opinions. Upon the request of the Buyer from to time to time, the Company shall be responsible (at its cost) for
promptly (within two (2) business days from Buyer’s request) supplying to the Company’s transfer agent and
the Buyer a customary legal opinion letter of its counsel (the “Legal Counsel Opinion”) to the effect that the
sale of Conversion Shares by the Buyer or its affiliates, successors and assigns is exempt from the registration requirements
of the 1933 Act pursuant to Rule 144 (provided the requirements of Rule 144 are satisfied and provided the Conversion Shares
are not then registered under the 1933 Act for resale pursuant to an effective registration statement). Should the
Company’s legal counsel fail for any reason to issue the Legal Counsel Opinion, the Buyer may (at the Company’s
cost) secure another legal counsel to issue the Legal Counsel Opinion, and the Company will instruct its transfer agent to
accept such opinion.

 

n.
Par Value. If the closing bid price at any time the Note is outstanding falls below $0.0001, the Company shall cause
the par value of its Common Stock to be reduced to $0.0001 or less.

 

o.
Breach of Covenants. The Company agrees that if the Company breaches any of the covenants set forth in this Section 4,
and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default
under Section 3.4 of the Note, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash or in shares
of Common Stock at the option of the Buyer, until such breach is cured, or with respect to Section 4(d) above, the Company shall
pay to the Buyer the Standard Liquidated Damages Amount in cash or shares of Common Stock, at the option of the Buyer, upon each
violation of such provision. If the Company elects to pay the Standard Liquidated Damages Amounts in shares of Common Stock, such
shares shall be issued at the Conversion Price at the time of payment.

 

    	 	18	 

     

    

 

5. Transaction
Expense Amount.  Upon Closing, the Company shall pay Seven Thousand Two Hundred Fifty and No/100 United States
Dollars (US$7,250.00) to Auctus Fund Management, LLC (“Auctus Management”) to cover  the Holder's
due diligence, monitoring, and other transaction costs incurred for services rendered in connection herewith (the
“Transaction Expense Amount”).  The Transaction Expense Amount shall be offset against the proceeds of the
Note and shall be paid to Auctus Management upon the execution hereof.

 

6. Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue
certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from
time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof (the
“Irrevocable Transfer Agent Instructions”).  In the event that the Borrower proposes to replace its transfer
agent, the Borrower shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer
Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the
provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to
Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933 Act or the date on which the
Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular
date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of
this Agreement.  The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the
Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion
Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that
can then be immediately sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be
freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note;
(ii) it will not direct its transfer agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring
(or issuing)(electronically or in certificated form) any certificate for Conversion Shares to be issued to the Buyer upon
conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement; and (iii) it will
not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from
removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for
any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the
Note and this Agreement.  Nothing in this Section shall affect in any way the Buyer’s obligations and agreement
set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the
Securities.  If the Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in form,
substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such
Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer
provides reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer,
and, in the case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from
restrictive legend, in such name and in such denominations as specified by the Buyer.  The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of
the transactions contemplated hereby.  Accordingly, the Company acknowledges that the remedy at law for a breach of its
obligations under this Section may be inadequate and agrees, in the event of a breach or threatened breach by the Company of
the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and
without any bond or other security being required.

 

    	 	19	 

     

    

 

7. CONDITIONS
PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell the Note
to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following
conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company
at any time in its sole discretion:

 

a.
The Buyer shall have executed this Agreement and delivered the same to the Company.

 

b.
The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

 

c.
The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date),
and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

 

d.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

8. CONDITIONS
PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Note at the
Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that
these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole
discretion:

 

a.
The Company shall have executed this Agreement and delivered the same to the Buyer.

 

    	 	20	 

     

    

 

b.
The Company shall have delivered to the Buyer the duly executed Note (in such denominations as the Buyer shall request) and in
accordance with Section 1(b) above.

 

c.
The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall
have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

 

d.
The representations and warranties of the Company shall be true and correct in all material respects as of the date when made
and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific
date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and
conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.
The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as
of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including,
but not limited to certificates with respect to the Company’s Certificate of Incorporation, By-laws and Board of Directors’
resolutions relating to the transactions contemplated hereby.

 

e.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this
Agreement.

 

f.  
No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but
not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934
Act reporting obligations.

 

g.
The Conversion Shares shall have been authorized for quotation on the OTC Pink, OTCQB or any similar quotation system and trading
in the Common Stock on the OTC Pink, OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTC
Pink, OTCQB or any similar quotation system.

 

h.
The Buyer shall have received an officer’s certificate described in Section 3(c) above, dated as of the Closing Date.

 

    	 	21	 

     

    

 

9. GOVERNING LAW; MISCELLANEOUS.

 

a.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without
regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated
by this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby shall be brought only
in the state courts of Massachusetts or in the federal courts located in the state of Massachusetts. The parties to this Agreement
hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER
TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may
prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding
in connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

b.
Counterparts; Signatures by Facsimile. This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts
have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering
this Agreement.

 

c.
Construction; Headings.  This Agreement shall be deemed to be jointly drafted by the Company and the Buyer and shall
not be construed against any person as the drafter hereof. The headings of this Agreement are for convenience of reference only
and shall not form part of, or affect the interpretation of, this Agreement.

 

    	 	22	 

     

    

 

d.
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute
or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision hereof.

 

e.
Entire Agreement; Amendments. This Agreement, the Note and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No
provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest
of the Buyer.

 

f. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, email, or facsimile, addressed as set forth below or to such other address as
such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by email or facsimile, with accurate confirmation
generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during
normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other
than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following
the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be:

 

If
to the Company, to:

 

Drone
USA, Inc.

16
Hamilton Street

West
Haven, CT 06516

Attn:
Michael Bannon

E-mail:
mike@droneusainc.com

 

    	 	23	 

     

    

 

If
to the Buyer:

 

Auctus
Fund, LLC

177
Huntington Avenue, 17th Floor

Boston,
MA 02115

Attn:
Lou Posner

Facsimile:
(617) 532-6420

 

With
a copy to (which copy shall not constitute notice):

 

Chad
Friend, Esq., LL.M.

Legal
& Compliance, LLC

330
Clematis Street, Suite 217

West
Palm Beach, FL 33401

E-mail:
CFriend@LegalandCompliance.com

 

Each
party shall provide notice to the other party of any change in address.

 

g.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the
prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights
hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,”
as that term is defined under the 1934 Act, without the consent of the Company.

 

h.
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

 

i.
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing hereunder not withstanding any due diligence investigation conducted by or on behalf of the Buyer. The
Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage
arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses
as they are incurred.

 

j. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.

 

    	 	24	 

     

    

 

k.
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.

 

l. Remedies.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a
breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition
to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or
injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and
provisions hereof, without the necessity of showing economic loss and without any bond or other security being
required.

 

m.
Publicity. The Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any
press releases, SEC, OTCQB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press
release or SEC, OTCQB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by
applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release
prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

 

n.
Indemnification. In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities
hereunder, and in addition to all of the Company’s other obligations under this Agreement or the Note, the Company shall
defend, protect, indemnify and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing persons’ agents or other representatives (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Company in this Agreement or the Note or any other agreement, certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or the Note
or any other agreement, certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or
claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf
of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement
or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed
or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the
status of the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by this
Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall
make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under
applicable law.

 

[signature
page follows]

 

    	 	25	 

     

    

 

IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above
written.

 

	DRONE USA, INC.	 
	 	 	 
	By:		 
	Name:	Michael Bannon	 
	Title:	Chief Executive Officer	 
	 	 	 
	AUCTUS FUND, LLC  	 
	 	 	 
	By:		 
	Name:	Lou Posner	 
	Title:	Managing Director	 

 

	AGGREGATE SUBSCRIPTION AMOUNT:	 	 	 	 
	 	 	 	 	 
	Aggregate Principal Amount of Note:	 	 US$	105,000.00	 
	 	 	 	 	 
	Aggregate Purchase Price:	 	 US$	105,000.00	 

 

 

26

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