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EXHIBIT 10.7
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT is made and entered into this 30th day of
November, 1992 by and among Universal Partners, Inc., a corporation duly
organized and existing under the laws of the State of Louisiana ("Universal"),
XxXxxxxxx Incorporated, a corporation duly organized and existing under the
laws of the State of Delaware ("McDermott"), and Universal Fabricators
Incorporated, a close corporation duly organized and existing under the laws of
the State of Delaware (the "Company").
WITNESSETH:
WHEREAS, on November 6, 1992, Universal and McDermott caused the
incorporation of the Company in the State of Delaware as a close corporation
and subscribed to fifty-one (51%) and forty-nine (49%) percent, respectively,
of the total authorized and to be issued share capital of the Company;
WHEREAS, Universal, McDermott and the Company are parties to a
Contribution Agreement of even date herewith (the "Contribution Agreement")
governing the assignment, conveyance, transfer and delivery to the Company of
all of their right, title and interest in, to or arising from the Contributed
Assets; and
WHEREAS, Universal, McDermott and the Company are entering into this
Shareholders' Agreement to govern certain aspects of their relationship and the
relationship of their successors in title as Shareholders of the Company and
their respective rights and obligations each towards the other.
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NOW, THEREFORE, in consideration of the premises and promises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the Parties hereby represent, warrant, covenant and agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
1.01 DEFINITIONS. In addition to the terms defined elsewhere in this
Shareholders' Agreement, unless otherwise clearly required by the
context of this Shareholders' Agreement, the terms listed herein
shall have the following meanings:
(a) "Act" shall mean the Delaware General Corporation Law, as
amended.
(b) "Affiliate" shall have the meaning set forth in Rule 12b-2
promulgated under the Securities Exchange Act of 1934, as
amended.
(c) "Business Day" shall mean any day other than a Saturday, Sunday
or other day on which banks in the City of Lafayette, Louisiana
are authorized or required by law to close.
(d) "By-Laws" shall mean the document attached hereto as Annex "B".
(e) "Certificate of Incorporation" shall mean the document attached
hereto as Annex "A".
(f) "Control" shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or
policies of any Person, whether through the ownership of voting
securities, by contract or otherwise.
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(g) "Party/Parties" shall mean Universal, McDermott or the Company or
all of them collectively, as the case may be, and shall include
their respective successors in interest hereunder.
(h) "Person" shall mean an individual, a corporation, a partnership,
an association, a joint venture, a trust or other entity of any
kind, including a government or political subdivision or agency
or instrumentality thereof.
(i) "Securities Act" shall mean the Securities Act of 1933, as
amended and the rules and regulations promulgated thereunder.
(j) "Shareholder/Shareholders" shall mean either or both of Universal
and McDermott collectively, as the case may be, and shall include
their respective successors in interest hereunder.
(k) "Third Party" shall mean any Person other than a Party or an
Affiliate of a Party.
1.02 INTERPRETATION. For purposes of this Shareholders' Agreement,
the following Rules of Interpretation shall apply.
(a) Unless the context clearly indicates otherwise, words importing
the singular number include the plural number and vise versa.
(b) Words of any gender include the correlative words of the other,
or neuter, gender.
(c) In the event of any inconsistency between the rights or
obligations of Universal and McDermott under the Certificate of
Incorporation and/or By-Laws of the Company and under this
Shareholders' Agreement, the provisions of this Shareholders'
Agreement shall prevail as between Universal and McDermott hereto
and as between them as Shareholders of the Company and as between
their respective appointees as Directors of the Company.
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(d) The captions, headings and table of contents in this
Shareholders' Agreement are solely for convenience of reference
and in no way define or limit the scope of intent of any
Articles, Sections, Subsections, Paragraphs, Subparagraphs or
clauses hereof.
ARTICLE II
PURPOSE OF THE COMPANY; DURATION
2.01 PURPOSE. The purpose of the Company shall be the fabrication and
assembly at the Port of New Iberia, Iberia Parish, Louisiana of
jackets, decks, topside facilities, quarters buildings, drilling
rigs and equipment for installation and use offshore in the
production, processing and storage of oil and gas and boats and
barges, unless and until the purpose is changed in accordance
with the Certificate of Incorporation.
2.02 POWERS. To facilitate the achievement of its purpose, the
Company shall have the power to engage in any and all activities
related, necessary, proper, convenient or incidental to the
accomplishment thereof.
2.03 DURATION. The duration of the Company shall be perpetual
commencing as of the date of the filing of its Certificate of
Incorporation with the Secretary of State of the State of
Delaware.
ARTICLE III
LAWS AND REGULATIONS
3.01 ASSURANCES OF THE PARTIES. Each Party to this Shareholders'
Agreement gives its assurance to the other Parties that it will
perform all of its responsibilities under this Shareholders'
Agreement and will conduct all activities relating to the Company
in such a manner as not to violate or cause the other Parties to
be in
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violation of any applicable laws or regulations of any government
or political subdivision or any agency or instrumentality
thereof.
3.02 COMPLIANCE WITH LAWS AND REGULATIONS. Compliance with all
applicable laws and regulations relating to the Company shall be
a continuing obligation of the Parties to this Shareholders'
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF UNIVERSAL
Universal represents and warrants to McDermott and the Company as
follows:
4.01 ORGANIZATION; AUTHORITY. Universal is a corporation duly
organized and existing under the laws of the State of Louisiana
and has full legal right, power and authority, without the
consent of any other Person, to execute, deliver and perform this
Shareholders' Agreement. All corporate, shareholder and other
acts or proceedings required to be taken by Universal to
authorize the execution, delivery and performance of this
Shareholders' Agreement have been duly and properly taken.
4.02 VALIDITY. This Shareholders' Agreement has been duly executed
and delivered and constitutes a lawful, valid and legally binding
obligation of Universal, enforceable in accordance with its terms
except to the extent that such enforceability may be limited by
bankruptcy, insolvency, or other similar laws relating to
creditors' rights generally and is subject to general principles
of equity, including the discretion of a court in granting
equitable remedies. The execution, delivery and performance of
this Shareholders' Agreement will not result in the creation of
any lien, charge or encumbrance on any of Universal's assets or
the acceleration of any indebtedness or other obligation
applicable to Universal and is not
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prohibited by, does not violate or conflict with any provision
of, and does not constitute a default under or a breach of (a)
the Charter or By-Laws of Universal, (b) any contract, agreement
or other instrument to which Universal is a party or by which
Universal or any of its assets are bound, (c) any order, writ,
injunction, decree or judgment of any court or governmental
agency, or (d) any law, rule or regulation applicable to
Universal, except for violations, conflicts or defaults that
would not, in the aggregate or individually, have a material
adverse effect on the execution, delivery and performance of this
Shareholders' Agreement, in the case of clauses (b), (c) and (d)
above. No approval, authorization, consent or other order or
action of or filing with any court, administrative agency or
other governmental authority is required for the execution,
delivery and performance by Universal of this Shareholders'
Agreement.
4.03 INVESTMENT REPRESENTATION. The shares acquired by Universal
under the terms of the Contribution Agreement were acquired by it
for its own account and for the purpose of investment, and not
with the view to, or for resale in connection with, any
distribution or public offering thereof in violation of the
Securities Act and other applicable federal or state securities
laws and the rules and regulations promulgated thereunder.
Universal understands that the shares have not been registered
under the Securities Act or other applicable federal or state
securities laws and the rules and regulations promulgated
thereunder by reason of the issuance of the shares in a
transaction exempt from the registration and prospectus delivery
requirements of the Securities Act and state securities laws and
the rules and regulations promulgated thereunder. Universal
further represents that it is fully informed as to the applicable
limitations upon any distribution or resale of the shares under
the Securities Act and other applicable federal or state
securities laws and the rules and regulations promulgated
thereunder. Universal agrees that it will refrain from
acquiring, transferring or otherwise disposing of the shares, or
any interest
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therein, in such manner as to violate any registration
requirements of the Securities Act or of any applicable federal
or state securities law, and the rules and regulations
promulgated thereunder regulating the disposition thereof. The
State in which Universal's principal office or principal
residence is located is the State of Louisiana. Universal is an
"accredited investor" as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.
4.04 DUE DILIGENCE Without waiving or limiting in any way its right
to rely on the representations and warranties contained in this
Shareholders' Agreement, Universal has performed its own
independent investigation, with due diligence, of the investment
represented by the investment in the Company and has formed its
own independent assessment of the risks and potential returns of
the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX
XxXxxxxxx represents and warrants to Universal and the Company as
follows:
5.01 ORGANIZATION; AUTHORITY. McDermott is a corporation duly
organized and existing under the laws of the State of Delaware
and has full legal right, power and authority, without the
consent of any other Person, to execute, deliver and perform this
Shareholders' Agreement. All corporate, shareholder and other
acts or proceedings required to be taken by McDermott to
authorize the execution, delivery and performance of this
Shareholders' Agreement have been duly and properly taken.
5.02 VALIDITY. This Shareholders' Agreement has been duly executed
and delivered and constitutes a lawful, valid and legally binding
obligation of McDermott, enforceable in accordance with its terms
except to the extent that such enforceability may be limited by
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bankruptcy, insolvency, or other similar laws relating to
creditors' rights generally and is subject to general principles
of equity, including the discretion of a court in granting
equitable remedies. The execution, delivery and performance of
this Shareholders' Agreement will not result in the creation of
any lien, charge or encumbrance on any of XxXxxxxxx'x assets or
the acceleration of any indebtedness or other obligation
applicable to McDermott and is not prohibited by, does not
violate or conflict with any provision of, and does not
constitute a default under or a breach of (a) the Charter or
By-Laws of McDermott, (b) any contract, agreement or other
instrument to which McDermott is a party or by which McDermott or
any of its assets are bound, (c) any order, writ, injunction,
decree or judgment of any court or governmental agency, or (d)
any law, rule or regulation applicable to McDermott, except for
violations, conflicts or defaults that would not, in the
aggregate or individually, have a material adverse effect on the
execution, delivery and performance of this Shareholders'
Agreement, in the case of clauses (b), (c) and (d) above. No
approval, authorization, consent or other order or action of or
filing with any court, administrative agency or other
governmental authority is required for the execution, delivery
and performance by McDermott of this Shareholders' Agreement.
5.03 INVESTMENT REPRESENTATION. The shares acquired by McDermott
under the terms of the Contribution Agreement were acquired by it
for its own account and for the purpose of investment, and not
with the view to, or for resale in connection with, any
distribution or public offering thereof in violation of the
Securities Act and other applicable federal or state securities
laws and the rules and regulations promulgated thereunder.
McDermott understands that the shares have not been registered
under the Securities Act or other applicable federal or state
securities laws and the rules and regulations promulgated
thereunder by reason of the issuance of the shares in a
transaction exempt from the registration and prospectus delivery
requirements of the Securities Act and state securities
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laws and the rules and regulations promulgated thereunder.
McDermott further represents that it is fully informed as to the
applicable limitations upon any distribution or resale of the
shares under the Securities Act and other applicable federal or
state securities laws and the rules and regulations promulgated
thereunder. McDermott agrees that it will refrain from
acquiring, transferring or otherwise disposing of the shares, or
any interest therein, in such manner as to violate any
registration requirements of the Securities Act or of any
applicable federal or state securities law, and the rules and
regulations promulgated thereunder regulating the disposition
thereof. The State in which XxXxxxxxx'x principal office or
principal residence is located is the State of Louisiana.
McDermott is an "accredited investor" as defined in Rule 501(a)
of Regulation D promulgated under the Securities Act.
5.04 DUE DILIGENCE Without waiving or limiting in any way its right
to rely on the representations and warranties contained in this
Shareholders' Agreement, McDermott has performed its own
independent investigation, with due diligence, of the investment
represented by the investment in the Company and has formed its
own independent assessment of the risks and potential returns of
the Company.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company represents and warrants to Universal and McDermott as
follows:
6.01 ORGANIZATION; AUTHORITY. The Company is a corporation duly
organized and existing under the laws of the State of Delaware
and has full legal right, power and authority, without the
consent of any other Person, to execute, deliver and perform this
Shareholders' Agreement. All corporate, shareholder and other
acts or proceedings required to be taken by the Company to
authorize the execution,
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delivery and performance of this Shareholders' Agreement have
been duly and properly taken.
6.02 VALIDITY. This Shareholders' Agreement has been duly executed
and delivered and constitutes a lawful, valid and legally binding
obligation of the Company, enforceable in accordance with its
terms except to the extent that such enforceability may be
limited by bankruptcy, insolvency, or other similar laws relating
to creditors' rights generally and is subject to general
principles of equity, including the discretion of a court in
granting equitable remedies. The execution, delivery and
performance of this Shareholders' Agreement will not result in
the creation of any lien, charge or encumbrance on any of the the
Company's assets or the acceleration of any indebtedness or other
obligation applicable to the Company and is not prohibited by,
does not violate or conflict with any provision of, and does not
constitute a default under or a breach of (a) the Charter or
By-Laws of the Company, (b) any contract, agreement or other
instrument to which the Company is a party or by which the
Company or any of its assets are bound, (c) any order, writ,
injunction, decree or judgment of any court or governmental
agency, or (d) any law, rule or regulation applicable to the
Company, except for violations, conflicts or defaults that would
not, in the aggregate or individually, have a material adverse
effect on the execution, delivery and performance of this
Shareholders' Agreement, in the case of clauses (b), (c) and (d)
above. No approval, authorization, consent or other order or
action of or filing with any court, administrative agency or
other governmental authority is required for the execution,
delivery and performance by the Company of this Shareholders'
Agreement.
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ARTICLE VII
CAPITAL
7.01 SHARE CAPITAL. On the date of this Shareholders' Agreement, the
Company has an authorized and issued share capital of One
Thousand (1,000.00) shares divided into Five Hundred Ten (510)
Class "A" common shares of par value $1.00 each and Four Hundred
Ninety (490) Class "B" common shares of par value $1.00 each.
Unless otherwise provided in this Shareholders' Agreement, Class
"A" common shares and Class "B" common shares shall at all times
have the same rights and privileges and shall be subject to the
same restrictions.
7.02 DISTRIBUTION OF SHARE CAPITAL. The share capital of the Company
referred to in Section 7.01 has been subscribed for and
distributed among the Shareholders as follows:
Percentage of
Party No. of Shares Share Capital
--------- ------------- -------------
Universal 510 51%
McDermott 490 49%
The shares issued to Universal have been designated Class "A" common
shares and the shares issued to McDermott have been designated Class "B"
common shares. Unless otherwise unanimously agreed between the
Shareholders, all subsequent issues of shares of the Company, whether
with or without par value, or securities of the Company convertible into
such shares shall be issued at or convertible into Class "A" and Class
"B" common shares on a 51/49% ratio. The holders of shares of Class "A"
common stock shall have the preemptive right, as a class, to subscribe
to any or all additional issues of Class "A" common stock of the Company
or to any securities of the Company convertible into such stock and the
holders of shares of Class "B" common stock shall have the preemptive
right, as a class, to subscribe to any or all additional issues of Class
"B" common stock of the Company or to any securities of the Company
convertible into such stock.
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7.03 CHANGES IN SHARE CAPITAL. The share capital of the Company may
be increased by the unanimous decision of the Shareholders, and
such shares shall be available to the Shareholders for
subscription thereto in proportion to their shares in the capital
of the Company as set forth in Section 7.02 above. The share
capital of the Company may be reduced by the unanimous decision
of the Shareholders, and, subject to the Act, the capital so
reduced shall be distributed to the Shareholders in proportion to
their respective shares in the capital of the Company as set
forth in Section 7.02 above.
7.04 CAPITAL REQUIREMENTS; GUARANTEES.
(a) All operating capital and capital expenditure funds for the
Company's operation shall be designated in budgets approved by
the Board of Directors as hereinafter set forth. Such funds
shall be contributed as paid-in capital or loaned by the
Shareholders in proportion to each Shareholders' share in the
capital of the Company, or as otherwise mutually agreed, except
to the extent such funds are obtained by internal financing or
the Company's borrowings within limits set by the Board of
Directors. Any loans from the Shareholders shall be on terms and
conditions mutually acceptable to the Shareholders and the
Company.
(b) Any guarantees at any time required from the Shareholders, or
their Affiliates, as determined by the Board of Directors, to
finance the Company or for any other purposes required by the
Company shall, with the mutual written consent of the
Shareholders, be provided by or obtained from the Shareholders,
or their Affiliates, in proportion to each Shareholder's share in
the share capital of the Company each within the restrictions of
any loan covenants to which a Shareholder, or their Affiliates,
may be bound. Each Shareholder shall also ensure than any
guarantees given by or obtained from them or their Affiliates are
not varied, revoked, withdrawn or allowed to lapse at any time
prior to such Shareholder ceasing to hold shares
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in the Company, without the prior written consent of the other
Shareholder, which consent shall not unreasonably be withheld.
(c) In order to satisfy the Company's capital needs on an ongoing
basis, the Company may require additional capital beyond that
established in the initial budget. The Shareholders agree that
the order of preference for meeting these additional requirements
is as follows:
i) Internal financing;
ii) Non-recourse Third Party debt;
iii) Third Party debt with recourse; and
iv) Such other means as may be agreed upon by the Board of
Directors.
7.05 RIGHT OF FIRST REFUSAL.
(a) No Party shall transfer, sell, pledge, encumber or in any way
dispose of any part of its shares in the Company (hereinafter
referred to as "Transfer(s)") except as provided for in this
Section 7.05.
(b) Universal shall be entitled to Transfer its shares to an
Affiliate with the written consent of McDermott, which consent
shall not be unreasonably withheld. McDermott shall be entitled
to Transfer its shares to an Affiliate with the written consent
of Universal, which shall not be unreasonably withheld.
(c) During the first seven (7) years commencing from the date of
incorporation of the Company, the Shareholders shall not transfer
their shares in the Company.
(d) This subsection (d) only applies to transfer occurring after the
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first seven (7) years from the date of incorporation of the
Company and is subject to the terms of a Put/Call Agreement
entered into by and between Universal and McDermott of even date
herewith. If either Shareholder should receive a bona fide offer
from a Third Party to purchase its shares in the Company and is
desirous of accepting such offer, such Shareholder shall notify
the Company's Secretary utilizing one of the methods specified in
Section 14.03 hereof (hereinafter referred to as "Sale Notice").
The Sale Notice shall specify: the name and address of the Third
Party, the percentage of said Shareholder's shares in the Company
to be sold, and the terms of the bona fide offer. No such Sale
Notice shall be withdrawn (unless such Third Party shall revoke
same) except with the unanimous approval of the Board of
Directors. The Company shall act as selling agent for the
Shareholder giving said Sale Notice and shall give notice of said
bona fide offer to the other Shareholder hereto. The Shareholder
receiving this Sale Notice shall have an option for thirty (30)
days to purchase the shares subject to said Sale Notice at the
same price and upon the same terms and conditions as contained in
the Sale Notice. In the event the Shareholder receiving the Sale
Notice elects to exercise its option, the shares shall be sold to
it. If the option is not exercised, the Shareholder giving such
Sale Notice shall be free to sell its shares to the Third Party
at the price and upon the terms and conditions contained in the
Sale Notice. If the Shareholder giving such Sale Notice fails to
so sell the interest on the same basis as provided in the Sale
Notice, said Shareholder shall again become subject to the
restrictions of this Section 7.05(d).
(e) The closing of the purchase and sale of shares as provided above
shall be held at a mutually acceptable place on a mutually
acceptable date (the "Closing Date") not more than ninety (90)
days after receipt of Notice by the Party receiving the Sale
Notice as provided in subparagraph (d) of this Article VII;
provided, however, that the Closing Date may be postponed until
such time as any consent, approach, or authorization required of
any governmental or
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regulatory authority has been obtained; and provided, further,
that the Shareholders agree to use their best efforts to obtain
such consents, approvals, or authorizations in a timely manner.
At such Closing, the Shareholder selling its shares shall
transfer such shares free and clear of all liens, claims, and
encumbrances, and shall execute all documents as may be necessary
to effectuate such sale. The applicable purchase price shall be
payable by wire transfer of immediately available federal funds
to an account designated by the Parties that are selling their
shares on the Closing Date.
(f) During the pendency of the transactions contemplated by this
Article VII, the business and affairs of the Company shall be
conducted as provided in this Shareholders' Agreement, unaffected
by the pendency of such transaction.
(g) A notation substantially in the following text shall be placed on
any and all share certificates issued by the Company:
"The transfer of this certificate and of the shares it relates to
and the voting of such shares is restricted by the provisions of
a Shareholders' Agreement. A copy of this Shareholders'
Agreement may be obtained by a shareholder on written request to
the Corporation".
(h) Any Shareholder who transfers its shares in the Company to any
Third Party shall include, as part of the transfer agreement,
provisions which require the Third Party to accept and agree to
be bound by the provisions of this Shareholders' Agreement. The
Selling Party shall continue to be responsible for obligations of
the Company which obligations accrued, or the events leading to
the accrual of an obligation accrued, prior to the transfer on
the basis provided in this Shareholders' Agreement unless
otherwise agreed between the Selling Party and the Third Party or
otherwise.
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7.06 NO PUBLIC OFFERINGS. The Company shall make no offering of any
of its stock of any class, or any securities convertible into
such stock, which would constitute a public offering within the
meaning of the Securities Act.
ARTICLE VIII
MANAGEMENT
8.01 BOARD OF DIRECTORS.
(a) The Board of Directors shall be composed of five (5) members,
three (3) of whom shall be appointed by and represent Universal,
and two (2) of whom shall be appointed by and represent McDermott
(hereinafter referred to as a "Director" and collectively, the
"Board of Directors"). The initial Board of Directors designated
in the Certificate of Incorporation shall serve until the first
annual meeting of the shareholders or until a successor is
elected and qualified. Directors appointed by Universal shall be
designated Class "A" Directors and Directors appointed by
McDermott shall be designated Class "B" Directors. The Directors
shall receive no remuneration for service in such office.
However, transportation and accommodation expenses during the
period when Board meetings are held shall be billed to and shall
be paid by the Company. Nothing in the foregoing two (2)
sentences shall prohibit the Company from paying a salary to a
Director in such Director's capacity as an officer or employee of
the Company.
(b) As vacancies occur on the Board of Directors, they shall be
filled in the same manner as the replaced Directors were
originally appointed. Except as provided in this Section 8.01,
appointments to the Board of Directors shall be without
restriction, and such appointees to the Board of Directors shall
be replaceable at any time, without notice or cause, by the
Shareholder which made the appointment. Directors may serve
concurrently as an officer or employee of the Company. The term
of office of each Director shall
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be one (1) year which may be renewed by the Shareholder who
appointed him or until his death or his resignation or removal
from the Board of Directors, if earlier. Upon the happening of
such Director's death, resignation or removal, the Shareholder
who appointed such Director shall appoint his successor. The
Shareholders agree to exercise their respective voting rights at
Shareholders' Meetings in order to cause the individuals so
appointed to be elected.
8.02 MEETINGS.
(a) The Board of Directors shall meet at least one (1) time a year.
Meetings shall be called by the Chairman of the Board of
Directors or upon the request of any Director and shall
normally take place in New Iberia, Louisiana, but may also take
place elsewhere. Notice of any meeting must be given by the
Secretary of the Company to the individual Directors in
writing. Notice is to be provided in accordance with Section
14.03 of this Shareholders' Agreement, at an address nominated
by each Director, so as to be received at least seventy-two
(72) hours prior to the time of the meeting. Said notice shall
contain a statement of the agenda to be considered at the
meeting and shall set forth the location and time (date and
hour) of the meeting. A call for Board of Directors' meeting
shall not be required if all of the Directors are present at
the meeting. Board of Directors' Meetings shall be entitled to
consider matter(s) not set forth in the call therefor. Board
of Directors' actions may be taken without, and in lieu of, a
meeting by unanimous written consent. At all meetings of the
Board of Directors, including any adjournments thereof, any one
or more Directors may participate by means of a conference
telephone or similar communications equipment by which all
persons participating in the meeting may simultaneously hear
each other. Participation by such means shall constitute
presence in person at a meeting. The presence of one (1)
Director elected by the Shareholders holding Class "A" common
shares and one (1) Director elected by the
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Shareholders holding Class "B" common shares will be necessary
to constitute a quorum of the Board of Directors, including any
adjournments thereof. Each Director shall be entitled to one
vote. Except as specified in Section 8.03 below, resolutions
of the Board of Directors shall be valid if adopted by a
majority of the Directors.
(b) The annual meeting of the Shareholders shall be convened by the
Board of Directors within the first four (4) months of the
close of each fiscal year for the purpose of the election of
Directors and to transact such other business as may properly
come before the meeting or any or adjournments thereof. The
annual meeting and all special meetings may be held at such
place as shall be stated in the notice calling the meeting. At
all shareholders' meetings, including any adjournments thereof,
the presence in person or by proxy of holders of at least
fifty-two (52%) percent of the share capital of the Company
shall be necessary to constitute a quorum. Except as specified
in Section 8.04 below, resolutions of Shareholders' meetings
shall require the affirmative vote of 52% of the share capital
of the Company; each share of share capital, whether Class "A"
common shares or Class "B" common shares, having one (1) vote.
Notice of the annual and any special Shareholders' meetings
shall be given by the Secretary of the Company to the
Shareholders and to each Party's Corporate Secretary in
writing. Notice is to be provided in accordance with Section
14.03 of this Agreement, so as to be received at least thirty
(30) days prior to the date of the meeting. Said notice shall
contain a statement of the agenda to be considered at the
meeting and shall set forth the location and time (date and
hour) of the meeting. A notice for a Shareholders' meeting
shall not be required if all of the Shareholders are present or
represented by proxy at the meeting. Shareholders' meetings
may consider matter(s) not set forth in the notice therefor.
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8.03 CERTAIN ACTIONS OF THE BOARD OF DIRECTORS. The consent of at
least one (1) Director elected by the Shareholders holding
Class "A" common stock and one (1) Director elected by the
Shareholders holding Class "B" common stock shall be necessary
for approval of the following corporation actions:
(i) Amend or supplement the By-Laws of the Company.
(ii) To set the Company's policies relating to personnel and banking
from those previously in effect at Universal, entering into any
contracts with value of Ten Million ($10,000,000.00) Dollars or
greater or any amendments to contracts which would result in
the value thereof increasing to Ten Million ($10,000,000.00)
Dollars or greater, or any customer contract without a job
profit and the approval or amendment of the annual operating
plans and budgets.
(iii) To approve the withdrawal of a Sale Notice.
(iv) The election and any change in the title, duties, salary, or
other compensation of an officer of the Company and the removal
of any officer of the Company.
(v) Any corporate indebtedness, business transaction or financial
commitment involving amounts in excess of those levels
previously established by the Board of Directors or the giving
of any guarantees or indemnities to, or becoming surety for,
any other company, partnership, joint venture, trust or other
enterprise.
(vi) Selling, lease, exchange or other disposition of more than
twenty-five (25%) percent of the properties or other assets of
the Company whether in the regular course of business or other
than in the regular course of business, or an acquisition by
the Company of the share capital (or equivalent) or of the
assets of any other company, partnership, joint venture, trust
or other enterprise.
(vii) Any business transactions between a Shareholder, Director,
officer,
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20
or any person performing the normal duties and responsibilities
assigned by applicable law to directors or officers and the
Company and a company, partnership, joint venture, trust or
other enterprise, or association in which one or more of the
Shareholders, Directors or officers, or any person performing
the normal duties and responsibilities assigned by applicable
law to directors or officers are shareholders, officers,
directors, employees or partners or have a material financial
interest, direct or indirect or affiliates of any such company,
partnership or association.
(viii) To request the provision of any guarantees from the
Shareholders or their Affiliates.
(ix) To appoint the Company's auditors to be chosen from among those
auditors duly licensed to practice in the State of Louisiana,
it being understood that, unless otherwise unanimously agreed,
the shareholders shall appoint as the Company's auditors the
firm of Ernst & Young.
(x) The formation of any subsidiaries, partnerships, joint
ventures, trusts or other enterprises by or with the Company.
(xi) Any change in the dividend policy set forth in Section 9.03
hereof.
8.04 CERTAIN ACTIONS OF THE SHAREHOLDERS. The unanimous consent of
all of the Shareholders of the Company shall be necessary for
approval of the following corporate actions:
(i) Amend or supplement the Certificate of Incorporation of the
Company.
(ii) Selling, lease, exchange or other disposition of more than
twenty-five (25%) percent of the properties or other assets of
the Company whether in the regular course of business or other
than in the
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21
regular course of business, or the acquisition by the Company
of the share capital (or equivalent) or of the assets of any
other company, partnership, joint venture, trust or other
enterprise.
(iii) Dissolving the Company or its merger or consolidation with any
other company, partnership, joint venture, trust or other
enterprise.
(iv) To change the capital structure of the Company or the issue of
further shares or other securities or the creation of any
option to subscribe or acquire shares or other securities of
the Company.
(v) To change the purpose of the Company.
(vi) To increase and decrease the number of Directors.
(vii) To add, change or remove restrictions on the transfer of shares
of the Company as set forth in the Certificate of
Incorporation.
Subject to the foregoing, the convening of meetings of the Board of Directors
and the Shareholders and other corporate matters shall be handled in accordance
with the Certificate of Incorporation and By-Laws of the Company and the Act.
ARTICLE IX
FISCAL MATTERS
9.01 BOOKS OF ACCOUNT. Separate books of account shall be kept and
maintained by the Company for the entry of all transactions relating thereto.
Such books of account shall be maintained in accordance with generally accepted
accounting principles. The Company shall supply to the Directors, on
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22
a monthly basis, financial statements prepared in accordance with generally
accepted accounting principles. The Company's books of account shall be
audited annually by those independent auditors appointed by the Shareholders as
provided in Section 8.03(ix) above. The Company's books of account shall be
kept at the Company's head office or such other place as the Board of Directors
may determine to be appropriate. Each Shareholder or its duly authorized
representative(s) shall have access to the general records and the complete
books of accounts of the Company and all supporting documentation at all
reasonable times. The Company shall provide the Directors copies of all tax
returns filed upon request.
9.02 FISCAL YEAR. The Company's fiscal year shall begin on April 1 of each
calendar year and terminate on March 31 of the following calendar year;
provided, however, that the period that has elapsed from the date of the
Company's incorporation until March 31, 1993 shall be referred to as a "stub
year".
9.03 DIVIDENDS. The Shareholders have agreed that the Directors shall not
declare any dividends during the stub year of the Company operations.
Thereafter, unless otherwise approved by at least one (1) Director elected by
the Shareholders holding Class "A" common stock and one (1) Director elected by
the Shareholders holding Class "B" common stock, the Company shall distribute
to the Shareholders in proportion to the share of each Shareholder in the
capital of the Company ninety (90%) percent of the net income for the prior
fiscal year as reflected on the audited Consolidated Statement of Income (Loss)
and Retained Earnings of the Company for such fisal year beginning with fiscal
year 1994. The annual dividend for each fiscal year shall be paid within the
first four (4) months following the end of each fiscal year.
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23
ARTICLE X
DEFAULTS
10.01 EVENTS OF DEFAULT. In the event of -
(a) a default or breach of either of the Shareholders under this
Shareholders' Agreement or a failure by either of the
Shareholders to observe or perform any of the terms of this
Shareholders' Agreement on its part to be observed and
performed and not being so remedied within thirty (30) days, or
such longer period as required under the circumstances, after
written notice thereof to the Defaulting Party by the other
Shareholder (the "Non-Defaulting Party");
(b) a Shareholder shall (i) apply for or consent to the appointment
of a receiver, trustee or liquidator of such Shareholder or of
all or a substantial part of such Shareholder's assets, (ii) be
adjudicated a bankrupt or insolvent, or file a voluntary
petition in bankruptcy, or admit in writing its inability to
pay its debts as they come due, (iii) make a general assignment
for the benefit of creditors, (iv) file a petition or an answer
seeking reorganization or arrangement with creditors or to take
advantage of any insolvency law, or (v) file an answer
admitting the material allegations, or consents to, or default
in answering a petition filed against such Shareholder in any
bankruptcy, reorganization or insolvency proceeding;
(c) an order, judgment or decree shall be entered by any court of
competent jurisdiction approving a petition seeking
reorganization of a Shareholder or an arrangement with
creditors (or any class of creditors) of a Shareholder or
appointing a receiver, trustee or liquidator of a Shareholder
or of all or a substantial part of the assets of a Shareholder,
and such order, judgment or decree shall continue unstayed and
in effect for a period of ninety (90) consecutive days; or
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24
(d) the shareholders of a Shareholder as of the date of this
Shareholders' Agreement cease to own or Control at least fifty
(50%) percent of the voting shares outstanding as of the date
hereof of such Shareholder;
then such event shall be an Event of Default in respect of such Shareholder
(the "Defaulting Party") for the purposes of this Shareholders' Agreement.
10.02 DEEMED OFFER UPON EVENT OF DEFAULT. Upon an Event of Default, the
Defaulting Party shall be deemed to have given a Sale of Notice in accordance
with the provisions of Section 7.05(d) hereof. The Per Share Value to be paid
in respect of the shares of a Defaulting Party shall be determined in
accordance with the provisions of Section 10.04 hereof. If the Shareholder
entitled to purchase said shares as a result of an Event of Default elects to
purchase said shares within the time period specified in Sections 7.05(d)
hereof then such shares shall be sold to it on the basis specified in Sections
7.05(e) and (f) hereof and at the Per Share Value. If the Shareholder entitled
to purchase said shares as a result of an Event of Default elects not to
purchase said shares within the time period specified in Section 7.05(d) hereof
then the Directors may offer such shares to a Third Party at the Per Share
Value or at any other price as such Directors shall determine to be reasonable
under the circumstances.
10.03 RIGHTS AND OBLIGATIONS UPON EVENT OF DEFAULT.
When an Event of Default occurs -
(a) the Directors may apply any dividends or interest payments
which accrue or are payable to the Defaulting Party towards any
moneys which the Defaulting Party is liable to pay or provide
to the Company and which have not been so paid or provided;
(b) the Directors may treat any amount due and payable to the
Company by a Defaulting Party as a debt, and the Directors may
charge the Defaulting Party interest on the amount of the debt
at the Prime
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25
Rate at the time of the Event of Default which would be
applicable to the Company;
(c) the Defaulting Party shall not be entitled to vote in respect
of its shares at any shareholders' meetings during the period
from the date of the Event of Default to the date that it is
rectified and the Shareholders shall take all necessary steps
to ensure that the Defaulting Party is not entitled to vote;
(d) the Board of Directors shall be reduced to only those directors
appointed by the Non-Defaulting Party and the Shareholders
shall take all necessary steps to ensure that any Directors
appointed by the Defaulting Party resign;
(e) the Defaulting Party shall not be entitled to appoint any
Directors during the period between the date of the Event of
Default to the date that it is rectified; and
(f) the provisions of Section 8.03 and 8.04 hereof shall not be
effective.
10.04 GOING CONCERN VALUE. Upon an Event of Default the Directors appointed by
the Non-Defaulting Party shall engage Xxxxxxx Xxxx & Company or a comparable
investment banking firm having relevant expertise doing business in the City of
New Orleans, Louisiana (the "Investment Banker") to render its opinion of the
value of the Company on a "going concern" basis (the "Going Concern Value") as
of the date of the opinion. Prior to engaging the Investment Banker, the
Directors shall require such Investment Banker to certify to them in writing
that they are capable of establishing the Going Concern Value without bias. The
Investment Xxxxx shall render its opinion of the Going Concern Value within
sixty (60) days of its appointment and the cost of such opinion shall be bourne
entirely by the Company. The Going Concern Value taken as a whole shall be
divided by the total number of issued and outstanding shares of capital in
order to determine the value of each such share (the "Per Share Value").
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26
ARTICLE XI
FORCE MAJEURE
The non-performance or delay in performance by the Parties of any obligation
under this Shareholders' Agreement shall be excused if and to the extent that
such non-performance or delay is caused by Force Majeure. The period of any
such non- performance or delay, together with such period as may be necessary
for the restoration of any damage done during such delay, shall be added to the
time given under this Agreement for the performance of such obligation and for
the performance of any obligation dependent thereto.
"Force Majeure" within the meaning of this Article shall be any order,
regulation or direction of the Government of the United States, any other
government which in any way governs the activities of the Company and/or the
Shareholders, or a political subdivision or any agency or instrumentality
thereof, whether promulgated in the form of law or otherwise, or any act of
God, insurrection, riot, war, strike or other labor disturbance, fires, floods
or any other cause beyond the reasonable control of the Company or the Party
and/or Shareholders affected and whether similar or dissimilar to any cause
whatsoever herein specified or not.
ARTICLE XII
COVENANTS OF THE SHAREHOLDERS
Each Shareholder hereby covenants and agrees, from and after the date of this
Shareholders' Agreement and so long as this Shareholders' Agreement shall
remain in effect, unless the other Shareholder shall have otherwise consented
specifically in writing:
12.01 INFORMATION. (a) Each Shareholder shall provide to the other Shareholder
at the addresses specified in Section 14.03 hereof, annual audited consolidated
financial statements with respect to such Shareholder, together with all notes
thereto, within ninety (90) days after the end of each fiscal
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27
year of such Shareholder such consolidated statements to contain a balance
sheet, a statement of income (loss) and retained earnings and a statement of
cash flows, and to be prepared in accordance with generally accepted accounting
principles, applied on a consistent basis. The Shareholders shall ensure that
such financial statements present fairly the financial position and results of
operations of the Shareholders and their subsidiaries as of the end of, and
for, the period then ended, in all respects in accordance with generally
accepted accounting principles, applied on a consistent basis. Each
Shareholder shall accompany each of such sets of financial statements with the
written certification of its Chief Financial Officer that such Shareholder has
complied with all of its obligations as set forth in this Shareholders'
Agreement.
(b) Each Shareholder shall promptly provide to the other
Shareholder at the address specified in Section 14.03 hereof, written notice of
the occurrence of any event of default which results in the acceleration of any
amounts due under any obligation for borrowed money or any indebtedness
constituting the deferred portion of the purchase price of any property or
assets of such Shareholder or any of its subsidiaries in excess of $100,000.00.
Accompanying said written notice shall be a certificate signed by such
Shareholder's Chief Financial Officer as to the actions the Shareholder or its
subsidiaries, as applicable, are taking or proposes to take with respect
thereto.
(c) From time to time each Shareholder shall provide to the other
Shareholder such additional information regarding the financial position,
business, properties or affairs of each Shareholder or its subsidiaries as the
other Shareholder may reasonably request.
Section 12.02 PAYMENT OF OBLIGATIONS. Each Shareholder will pay and discharge,
at or before maturity, all of its obligations and liabilities (including,
without limitation, tax liabilities), except those that may be contested in
good faith and by appropriate proceedings.
Section 12.03 CORPORATE EXISTENCE. Each Shareholder will maintain (a) its
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28
corporate existence, its qualification to do business and its good standing in
each jurisdiction in which qualification is necessary for the proper conduct of
its businesses, and (b) all licenses, permits and other authorizations
necessary for the ownership and operation of its properties and business, and
(c) insurance on all of its property, assets, and businesses in at least such
amounts and against at least such risks as are usually insured against in the
same area by companies of established repute engaged in the same or a similar
business.
Section 12.04 COMPLIANCE WITH LAWS. Each Shareholder will comply, in all
material respects, with all applicable laws, ordinances, rules, regulations,
and requirements of governmental authorities (including, without limitation,
ERISA) except where the necessity of compliance therewith is being contested in
good faith and by appropriate proceedings.
ARTICLE XIII
COVENANTS OF UNIVERSAL
Section 13.01 ORDERLY WIND UP. Universal shall limits its business after the
date hereof to that of a Shareholder of the Company and will engage in no
further business other than that necessary for the orderly winding up of its
obligations under existing contracts, customer orders, leases, licenses,
purchase orders and other commitments to the extent not included in Assumed
Liabilities.
Section 13.02 LIMITATION OF DIVIDENDS. During the fiscal years ending March
31, 1993, 1994 and 1995, the Board of Directors of Universal will not declare
and Universal will not pay any dividends to its shareholders, in cash or other
property, on Universal's shares of capital stock or other securities held by
its shareholders in excess of the respective fiscal year's federal taxable
income less federal and state income taxes plus Two Hundred Thousand
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29
($200,000.00) Dollars. During the period from the Effective Time until 180
calendar days subsequent to the Effective Time, Universal will not redeem,
retire, purchase or otherwise acquire from its shareholders any shares of its
capital stock now or hereafter authorized or outstanding. After 180 calendar
days subsequent to the Effective Time and through March 31, 1995, Universal
will not expend more than Five Hundred Thousand ($500,000.00) Dollars in any
fiscal year to redeem, retire, purchase or acquire from its shareholders any
shares of its capital stock now or hereafter authorized or outstanding during
such fiscal years.
ARTICLE XIV
GENERAL
14.01 SCOPE OF SHAREHOLDER'S AUTHORITY. Unless otherwise expressly provided in
this Shareholders' Agreement, no Shareholder shall, without the prior written
consent of the other Shareholder, in any manner use the name of, or commit, or
act or purport to act for or as representative of, or assume any obligations or
responsibilities on behalf of, the other Shareholder or the Company, whether
before or after incorporation thereof.
14.02 ASSIGNMENT. The Parties hereto shall not sell, assign, pledge or
otherwise transfer its interest in this Shareholders' Agreement or any part
thereof, without obtaining the prior written consent of the other Parties
hereto, which consent will not be unreasonably be withheld.
14.03 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered in person or sent by
registered or certified mail, postage prepaid, or by telecopy as follows:
(a) If to Universal: Universal Partners, Inc.
X.X. Xxx 00000
Xxxx Xxxx, Xxxx xx Xxx Xxxxxx
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30
New Xxxxxx, Xxxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
With a copy to: Xxx, Xxxxxxx & Xxxxxxxx
Xxxx Xxxx, Xxxxx 00
000 Xxxxxx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxx, III
Telecopy: (000) 000-0000
(b) If to McDermott: XxXxxxxxx Incorporated
0000 Xxxxxx Xxxxxx
X.X. Xxx 00000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Senior Vice President &
Chief Financial Officer
Telecopy: (000) 000-0000
With a copy to: XxXxxxxxx Incorporated
1010 Common street
X.X. Xxx 00000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Vice President, Secretary & General
Counsel
Telecopy: (000) 000-0000
If to the Company: Universal Fabricators Incorporated
X.X. Xxx 00000
Xxxx Xxxx, Xxxx xx Xxx Xxxxxx
New Xxxxxx, Xxxxxxxxx 00000
Attention: President
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31
Telecopy: (000) 000-0000
Any party may change its address for receiving notice by written notice given
to the others named above.
14.04 GOVERNING LAW. This Shareholders' Agreement shall be governed by and
construed in accordance with the internal substantive laws of the State of
Delaware, and the Parties hereby irrevocably and unconditionally consent and
submit to the in personam jurisdiction of any court located in Lafayette,
Louisiana having jurisdiction over all matters relating to this Shareholders'
Agreement. Each Party agrees that service of process in any action or
proceeding hereunder may be made upon such party by certified mail, return
receipt requested to the address for notice set forth herein. Each Party
irrevocably waives any objection it may have to the venue of any action, suit
or proceeding brought in such courts or to the convenience of the forum and
each Party irrevocably waives the right to proceed in any other jurisdiction.
Final judgment in any such action, suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment, a certified or
true copy of which shall be conclusive evidence of the fact and the amount of
any indebtedness or liability of any Party therein described.
14.05 BINDING EFFECT. The terms and conditions of the within Shareholders
Shareholders' Agreement shall extend to, be binding upon, and inure to the
benefit of, the heirs, successors, administrators, legal representatives, and
permitted assigns of the Parties hereto.
14.06 EFFECTIVE DATE; TERM. The effective date of this Shareholders' Agreement
shall be the date of its execution by the Parties as written above, and, unless
sooner terminated as provided herein, it shall remain in effect for an initial
term of ten (10) years. Thereafter, at any time within two (2) years prior to
the expiration of such initial term or any renewal thereof, the Parties may
extend the duration of this Shareholders' Agreement for as many additional
periods, each not to exceed ten (10) years, as the Parties may agree.
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32
14.07 ANNEXES. All Annexes to this Shareholders' Agreement are integral parts
of this Agreement and are incorporated into this Agreement as if herein fully
set out.
14.08 COUNTERPARTS. This Shareholders' Agreement is being executed in multiple
originals and each original shall have equal force.
14.09 MODIFICATIONS. Neither this Shareholders' Agreement nor any provision
hereof may be waived, modified, discharged or terminated except by an
instrument in writing signed by each of the Shareholders hereto.
14.10 CONFIDENTIALITY. (a) Each of the Parties hereto hereby agrees that it
shall hold in strict confidence all data and other information of any kind and
description received by said Party from the other Parties or an Affiliate of
the other Parties pursuant to, as a result of, or in connection with the
activities contemplated by this Shareholders' Agreement and shall disclose such
data and other information to Third Parties only when authorized in writing by
the other Parties or to the extent such disclosure is required by law.
(b) The confidentiality obligation of each Party under Section 14.10(a)
above shall not apply to data and other information which:
(i) is or becomes publicly known through no wrongful act of a
Party;
(ii) is received by a Party from a Third Party without breach of any
obligation of nondisclosure owed by said Third Party to an
other Party or an Affiliate of such other Party;
(iii) it or has been independently developed by a Party as shown to
the satisfaction of the other Parties by written records;
(iv) is contained in any published patent or published patent
application or which becomes published or otherwise generally
known
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33
to a Party through no wrongful act form and after the date it
becomes published or generally known; or
(v) is published pursuant to governmental or judicial requirement.
(c) The confidentiality obligation of each Party under Section 14.10(b)
above shall terminate, in any event, seven (7) years from its receipt of
such data and such other information or three (3) years after
dissolution of the Company, whichever is longer; provided, however, that
such expiration shall not be a grant to a Party of the right to publish
or to disclose to others any such data and other information marked
"trade secret".
14.11 CRAWLER CRANE RENTALS; ROLLED PIPE SUBCONTRACTS. The Shareholders have
agreed that XxXxxxxxx shall have a first right of refusal for crawler crane
rentals and rolled pipe subcontracts from the Company. Accordingly, the
Company shall include XxXxxxxxx as a bidder for any such rentals or
subcontracts at anytime that the Company is soliciting bids or proposals
therefor from any Third Party. In the event that XxXxxxxxx'x offer in response
thereto is competitive as to price and delivery than the Company shall rent
such crawler cranes or subcontract such rolled pipe to XxXxxxxxx.
14.12 PURPOSE OF AGREEMENT. The Shareholders agree that they shall vote at all
levels of Shareholders and/or Board of Directors meetings in respect of the
shares held by them in such a manner that the provisions of this Agreement are
complied with.
ENTIRE AGREEMENT
This Shareholders' Agreement constitutes the entire agreement between the
Parties hereto relating to the subject matter hereof except for those certain
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Letter Agreements dated November 30, 1992 and December 1, 1992 between
XxXxxxxxx and Universal which is by reference incorporated herein. There are
no terms, obligations, covenants, representations, statements or conditions
other than those contained herein and therein.
No variation or modification of this Shareholders' Agreement nor waiver of any
of the terms and provisions hereof shall be deemed valid unless in writing by
the Parties hereto.
IN WITNESS WHEREOF, the Parties hereto have caused this Shareholders' Agreement
to be executed as of the date first written above.
UNIVERSAL PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: President
-----------------------------
XxXXXXXXX INCORPORATED
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
----------------------------
Title: Senior Vice-President and
----------------------------
Chief Financial Officer
----------------------------
UNIVERSAL FABRICATORS INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: President
-----------------------------
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35
ANNEXES INTENTIONALLY OMITTED
REGISTRANT WILL PROVIDE COPIES UPON REQUEST
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