Exhibit 10.1
SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT (this "Agreement") is entered into as of the
14th day of April, 2006, by and among Macquarie Terminal Holdings LLC, a
Delaware limited liability company (the "Investor"), Loving Enterprises, Inc., a
Louisiana corporation, (or its successor in interest established pursuant to
Section 16(a) hereof) together with all of its Subsidiaries (collectively, the
"Company"), the Current Beneficial Shareholders and the Current Shareholder (as
defined herein) and the rights and obligations hereunder shall become effective
upon the Effective Date. The Investor, the Current Shareholder and the Current
Beneficial Shareholders shall be referred to herein individually as a
"Shareholder" and collectively as the "Shareholders". Each of the Investor, the
Company, the Current Shareholder and the Current Beneficial Shareholders are
referred to herein individually as a "Party" and collectively as the "Parties."
WHEREAS, the Current Shareholder is the current owner of record of all of
the issued and outstanding shares of the capital stock of the Company, which
consists of one thousand (1,000) shares of Common Stock, $100.00 par value per
share (the "Company Common Stock");
WHEREAS, the Current Beneficial Shareholders are all of the current owners
of record of the Voting Trust certificates issued and outstanding issued
pursuant to the Voting Trust (as defined herein);
WHEREAS, the Company, the Current Shareholder, the Current Beneficial
Shareholders and the Investor are parties to a Stock Subscription Agreement
dated as of April 14, 2006 (the "Stock Subscription Agreement") pursuant to
which the Investor will invest in the Company through the authorization and
issuance by the Company of an additional one thousand (1,000) shares (the
"Investor Shares") of the Company Common Stock, resulting in the Investor owning
50% of the issued and outstanding shares of Company Common Stock; and
WHEREAS, the Company, the Current Shareholder, the Current Beneficial
Shareholders and the Investor desire to enter into this Agreement for the
purposes, among others, of establishing mutually acceptable terms of corporate
governance, payment of dividends, and restrictions on the sale of securities.
The execution and delivery of this Agreement is a condition to the Investor's
acquisition of the Investor Shares pursuant to the Stock Subscription Agreement.
WHEREAS, The Parties intend the rights and obligations of this Agreement
to become effective upon the Effective Date.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
1. Definitions.
(a) "1940 Act" shall have the meaning set forth in Section 7(b).
(b) "AAA" shall have the meaning set forth in Section 12(a)(i).
(c) "Additional Dividend" has the meaning set forth in Section 5(a).
(d) "Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls, or is under common control with, the Person
specified or in which the Person specified has Beneficial Ownership. For this
purpose, "control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract, or otherwise.
Without limiting the foregoing, (i) Affiliates of the Investor shall include
Macquarie Infrastructure Company Trust and its direct and indirect Subsidiaries,
Macquarie Bank Limited, its direct and indirect Subsidiaries and funds or
companies managed by such Subsidiaries and (ii) Affiliates of the Current
Beneficial Shareholders shall include their siblings, spouses, ancestors,
descendants, or descendant's spouses, or any entity in which any of them has
Beneficial Ownership.
(e) "Agreement" shall have the meaning set forth in the preamble to this
Agreement.
(f) "Appointed Member" shall have the meaning set forth in Section
3(a)(ii).
(g) "Beneficial Ownership" means voting or investment control, as such
determinations are made pursuant to Rules 16a-1 and 16a-8 of the Rules and
Regulations under the Securities Exchange Act, of ten percent (10%) or more of
the equity securities of a Person.
(h) "Board" shall have the meaning set forth in Section 3(a).
(i) "Business Day" shall mean any day other than Saturday or Sunday or any
other day on which the banks in the State of New York are permitted or obligated
to be closed for business.
(j) "Buy/Sell Notice" shall have the meaning set forth in Section
13(c)(i).
(k) "Capital Expenditure" means all capitalized expenditures relating to
the investment in or the acquisition of assets, equity securities or debt
securities.
(l) "Claim" mean all claims and demands for indemnification under Article
IX of the Stock Subscription Agreement.
(m) "Closing" shall have the meaning ascribed to it in the Stock
Subscription Agreement.
(n) "Code" means the Internal Revenue Code of 1986, as amended.
(o) "Company" shall have the meaning set forth in the preamble to this
Agreement. Unless otherwise specified, all references to the Company shall
include the Company together with all of its Subsidiaries.
(p) "Company Common Stock" shall have the meaning set forth in the
preamble to this Agreement.
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(q) "Current Beneficial Shareholders" mean James J. Coleman, Jr., Thomas
B. Coleman, Peter D. Coleman and Dian C. Winingder.
(r) "Current Shareholder" means the Voting Trust.
(s) "Deadlock" shall have the meaning set forth in Section 13(a).
(t) "EBITDA" means the earnings before interest, income taxes,
depreciation and amortization of the Company for the previous four full Fiscal
Quarters (including the Fiscal Quarter for which the calculation is being
undertaken) plus all payments received for such period pursuant to transactions
accounted for as leases by the Company that have not otherwise been included in
the earnings before interest, income taxes, depreciation and amortization of the
Company for such period less total debt service payments (principal, interest
and mandatory reserve account contributions) on non-recourse project
indebtedness of the Company for such period. For the purpose of clarifying this
definition, Company shall mean the Company and its Subsidiaries accounted for on
a consolidated basis.
(u) "Effective Date" shall mean the Closing.
(v) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
(w) "ERISA Affiliates" means members of the same controlled group of
corporations or trades or businesses under common control within the meaning of
Sections 414(b) or (c) of the Code or Sections 4001(a)(14) or (b) of ERISA or
entities which are with respect to the funding liability and lien rules of
Section 412 of the Code or Section 302 of ERISA treated as a single employer
under Sections 414(m) or (o) of the Code.
(x) "Fiscal Quarter" means the three month periods commencing on the first
day of the first, fourth, seventh and tenth month, respectively, of each Fiscal
Year.
(y) "Fiscal Year" means the twelve month period commencing at 12:00 a.m.
January 1 of each calendar year and ending at 11:59 p.m. on December 31 of each
year.
(z) "GAAP" means United States generally accepted accounting principles,
applied consistently from period to period.
(aa) "Government Authority" shall mean any court, tribunal, arbitrator,
authority (including any quasi-governmental authority), agency, commission,
official or other instrumentality of the United States, any foreign country or
any domestic or foreign state, county, city, municipal or other political or
governmental subdivision.
(bb) "Initial Dividend" shall have the meaning set forth in Section 5(a).
(cc) "Investor" shall have the meaning set forth in the preamble to this
Agreement.
(dd) "Investor Representative" shall have the meaning set forth in Section
3(i).
(ee) "Investor Shares" shall have the meaning set forth in the preamble to
this Agreement.
(ff) "IR" shall have the meaning set forth in Section 3(i).
(gg) "Joinder" shall have the meaning set forth in Section 9(f).
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(hh) "Loss" shall have the meaning set forth in Section 3(k).
(ii) "Major Decisions" shall have the meaning set forth in Section 3(j).
(jj) "Members" shall have the meaning set forth in Section 3(a).
(kk) "Minimum Distribution" means fourteen million dollars ($14,000,000).
(ll) "Net Debt" means the aggregate funded indebtedness of the Company
(excluding trade payables) less (i) the aggregate non-recourse project
indebtedness of the Company; (ii) the aggregate cash and cash equivalent
balances of the Company; and (iii) funded indebtedness extended by any
Shareholder. For the purpose of clarifying this definition, Company shall mean
the Company and its Subsidiaries accounted for on a consolidated basis.
(mm) "Non-selling Shareholder" shall have the meaning set forth in Section
9(b).
(nn) "Offer" shall have the meaning set forth in Section 9(b).
(oo) "Offered Shares" shall have the meaning set forth in Section 9(b).
(pp) "Offering Party" shall have the meaning set forth in Section
13(c)(1).
(qq) "Opportunity" shall have the meaning set forth in Section 6.
(rr) "Party" and "Parties" shall have the meaning set forth in the
preamble to this Agreement.
(ss) "Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, an investment fund, any other business
entity and a governmental entity or any department, agency or political
subdivision thereof.
(tt) "Purchasing Party" shall have the meaning set forth in Section
13(c)(ii).
(uu) "Referring Shareholder" shall have the meaning set forth in Section
6.
(vv) "Reformed Offer" shall have the meaning set forth in Section 9(b).
(ww) "Responding Party" shall have the meaning set forth in Section
13(c)(i).
(xx) "Resolution Board" shall have the meaning set forth in Section 12(a).
(yy) "ROFR" shall have the meaning set forth in Section 9(b).
(zz) "Securities Act" means the Securities Act of 1933, as amended.
(aaa) "Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(bbb) "Selling Party" shall have the meaning set forth in Section
13(c)(ii).
(ccc) "Selling Shareholder" shall have the meaning set forth in Section
9(b).
(ddd) "Senior Manager" means, as of any date, the four (4) highest
compensated individuals other than non-executive sales people, as measured by
annualized compensation as of the end of the most recently-ended Fiscal Year.
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(eee) "Shareholder" shall have the meaning set forth in the preamble to
this Agreement.
(fff) "Shareholder Loans" shall have the meaning set forth in Section
4(b).
(ggg) "Shareholders" shall have the meaning set forth in the preamble to
this Agreement.
(hhh) "Shares" means (i) any of the Company Common Stock and/or the
Investor Shares, (ii) any equity securities issued or issuable directly or
indirectly with respect to the Shares referred to in clause (i) above by way of
share dividend or share split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization, and (iii) any
other shares of any class or series of equity securities of the Company,
including rights to acquire the foregoing, now held or subsequently acquired by
any individual or entity, including but not limited to Current Shareholder and
Investor.
(iii) "Stated Value" shall have the meaning set forth in Section 13(c)(i).
(jjj) "Stock Subscription Agreement" shall have the meaning set forth in
the preamble to this Agreement.
(kkk) "Subsidiary" and "Subsidiaries" means, with respect to any Person,
any corporation, limited liability company, partnership, association, or
business entity of which (i) if a corporation, a majority of the total voting
power of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, or trustees thereof
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,
or (ii) if a limited liability company, partnership, association, or other
business entity (other than a corporation), a majority of partnership or other
similar ownership interest thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more Subsidiaries of that Person or a
combination thereof. For purposes hereof, a Person or Persons shall be deemed to
have a majority ownership interest in a limited liability company, partnership,
association, or other business entity (other than a corporation) if such Person
or Persons shall be allocated a majority of limited liability company,
partnership, association, or other business entity gains or losses or shall be
or control any managing director or general partner of such limited liability
company, partnership, association, or other business entity. For purposes
hereof, references to a "Subsidiary" of any Person shall be given effect only at
such times that such Person has one or more Subsidiaries, and, unless otherwise
indicated, the term "Subsidiary" refers to a Subsidiary of the Company.
(lll) "Third Party" shall have the meaning set forth in Section 9(b).
(mmm) "Transfer" shall have the meaning set forth in Section 15(b).
(nnn) "Voting Trust" means the Voting Trust for Loving Enterprises, Inc.
under Agreement dated November 21, 2002 and any replacement voting trust between
the Current Beneficial Shareholders.
2. Voting Trust.
The holder and owners of the Company Common Stock are represented herein
to be the Current Shareholder and the Current Beneficial Shareholders
respectively. Each is
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referred herein individually as a Shareholder. References are made within this
Agreement to certain actions, privileges, obligations and voting rights of a
Shareholder or Shareholders. Notwithstanding any provision herein to the
contrary, in the event of any dispute between the Current Shareholder and any
Current Beneficial Shareholder hereunder, the Company and the Investor shall
deem the Current Shareholder's position to prevail over that of any individual
or group of Current Beneficial Shareholders. Each of the Current Beneficial
Shareholders acknowledge and agree that the Company and the Investor shall be
entitled to rely on the direction of the Current Shareholder as being authorized
by each of them, regardless of whether in the future any Current Beneficial
Shareholder challenges the right of the Current Shareholder to act on its behalf
or challenges the Current Shareholder's action or decision with respect to any
specific issue or issues. The foregoing shall cease to apply only after the
Company and the Investor have received evidence reasonably satisfactory to each
of them that the Current Shareholder has been terminated in accordance with the
terms of the Voting Trust.
3. Board of Directors; Investor Representative.
(a) From and after the Closing (as defined in the Stock Subscription
Agreement), each Shareholder or in the case of the Current Beneficial
Shareholders, the Current Shareholder, shall vote all of his, her or its Shares
and any other voting securities of the Company over which such holder has voting
control and shall take all other necessary or desirable actions within his
control (whether in his capacity as a stockholder, director, member of a board
committee or officer of the Company or otherwise, and including, without
limitation, removal of members of the Company's board of directors (such board
of directors the "Board" and such members the "Members") in accordance with the
terms of this Agreement, attendance at meetings in person or by proxy for
purposes of obtaining a quorum and execution of written consents in lieu of
meetings), and the Company shall take all necessary or desirable actions within
its control (including, without limitation, calling special board and
stockholder meetings), so that:
(i) a total of six (6) Members shall comprise the Board;
(ii) each Shareholder shall be entitled to appoint one Member for
each sixteen and six-tenths percent (16.6%) of the Shares of the Company over
which such Shareholder maintains Beneficial Ownership (which, for each of the
Current Shareholder and the Investor, shall mean 3 such Members and for the
Current Beneficial Shareholders, shall mean no such Members) or other voting
rights (each an "Appointed Member");
(iii) the removal, with or without cause, from the Board of any
Member shall be upon (and only upon) the written request of the Shareholders
entitled to appoint such Member to serve;
(iv) in the event that any Member appointed under subparagraph (ii)
for any reason ceases to serve as a Member, the resulting vacancy on the Board
shall be filled by a person appointed by the Shareholder originally entitled to
appoint such Member pursuant to subparagraph (ii);
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(v) immediately upon the Closing, each Shareholder shall vote each
of his shares to elect the Appointed Members.
(b) Members of the Board appointed by the respective Shareholders pursuant
to Section 3(a)(ii) shall be elected at each annual meeting of Shareholders for
a term of one (1) year in accordance with Section 3(a)(ii). Each Member shall
serve until his successor is duly elected and qualified or until his death,
resignation or removal by operation of this Agreement.
(c) A quorum of the Board shall consist of four (4) Members comprising two
(2) Investor appointed Members and two (2) Current Shareholder appointed
Members.
(d) At each meeting of the Board at which a quorum is present, all
questions and business shall be determined by the affirmative vote of a majority
of the Members present, which majority shall include at least one Member
appointed by each Shareholder holding at least fifty percent (50%) of the Shares
(for this purpose, the Voting Trust and the Current Beneficial Shareholders
shall be considered the same Shareholder). Except as set forth in the prior
sentence, each Member (including the Chairman) shall have one vote which shall
be equal in all respects.
(e) At each meeting of the Board, the Chairman of the Board, or, if a
Chairman has not been appointed or is absent, a chairman of the meeting chosen
by a majority of the Members present, shall preside over a meeting.
(f) As long as the Current Shareholder retains the right to appoint a
Member of the Board, the Current Shareholder, by majority vote of its Appointed
Members, shall have the right to appoint one of the Current Shareholder's
Appointed Members to be the Chairman of the Board, otherwise the Chairman shall
be elected by majority vote of the Board.
(g) Unless otherwise agreed by majority vote of the Board, meetings of the
Board shall be held at least quarterly, at a date, time, and place agreed to in
person or in writing by each Member of the Board. Any Member of the Board may
call a meeting of the Board.
(h) Members shall receive no compensation from the Company.
(i) For so long as Investor is entitled to appoint a Member of the Board,
Investor shall also be entitled to appoint a representative (the "Investor
Representative" or "IR") to monitor the Company's business on behalf of
Investor. The Investor Representative shall have such access to books, records,
facilities, and personnel of the Company as is customarily provided to senior
executive management of the Company. The process of addressing Major Decisions
(as defined below) shall be as further provided in this Section 3(i) and in
Section 3(j).
(i) The Investor Representative shall be notified by the Company's
Chief Executive Officer of all Major Decisions as far in advance of action or
execution by the Company as is reasonably possible under the circumstances.
(ii) In the event that the Major Decision is among those set forth
in Section 3(j)(i), then the approval of the Board shall be required as set
forth in Section 3(d).
(iii) In the event that the Major Decision is among those set forth
in Section 3(j)(ii), then the Investor Representative shall approve or deny the
action or omission
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proposed by the Company or may submit such Major Decision for approval by the
Board as set forth in Section 3(d) in each case in advance of the taking of
actions or omission by the Company. The Investor Representative may also elect
to refer any of the Major Decisions otherwise within the IR's purview to the
Board for resolution. Notwithstanding the foregoing, any Major Decision that the
Investor Representative declines to approve may be referred to the Board by the
Company's Chief Executive Officer or by the Current Shareholder. The action of
the Board (as described in Section 3(d)) shall override a rejection by the
Investor Representative.
(j) The following decisions, if made after the Closing, shall constitute
"Major Decisions." Major Decisions set forth in Section 3(j)(i) shall require
the affirmative vote or consent of the Board regardless of whether the Board's
consent results from an appeal of the decision of the Investor Representative.
Major Decisions set forth in Section 3(j)(ii) shall require the affirmative vote
or consent of the Board only after either referral by the Investor
Representative or, after initial rejection by the Investor Representative,
referral by the Company's Chief Executive Officer or any Shareholder other than
Investor for reconsideration.
(i) The following Major Decisions made with respect to the Company
or any of its Subsidiaries shall require the affirmative vote or consent of the
Board:
(A) Undertaking activities outside of the ordinary course of
business in which the Company is engaged as of the date
hereof;
(B) Declaring or paying any dividends or distributions of
cash, stock, debt, or property (subject to the
obligations set forth in Sections 4 and 5 hereof);
(C) Changing the Company's accounting to a basis other than
GAAP;
(D) Changing materially the terms of employment of any
Senior Manager;
(E) Electing the Chief Executive Officer or Chief Financial
Officer of the Company (subject to the limitations set
forth in Section 8 below);
(F) Issuing or redeeming of Shares or any securities of the
Company or any Subsidiary, including any public offering
of securities under the Securities Act, any options or
warrants or other similar securities entitling the
holder to acquire Shares, any stock appreciation rights,
phantom stock, or similar instruments, or any securities
of the Company, in each case other than transactions
among the Company and its Subsidiaries;
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(G) Appointing annually the company's independent auditor
(which as of the date hereof is Ernst & Young LLP);
(H) Engaging in any business arrangements, transactions or
agreements with any Shareholder or Affiliate of any
Shareholder;
(I) Forming and/or populating any committee of the Board;
(J) Populating the board of directors of any Subsidiary
other than with employees of the Company;
(K) Approving annual budgets and business plans for the
Company (which the Shareholders shall cause the Company
to submit to the Board for approval prior to the
commencement of the Fiscal Year to which the annual
budget relates and, to the best efforts of the Company,
subsequently operate within);
(L) Selling or transferring, in any Fiscal Year (other than
in the ordinary course of business), any quantity of
Company assets in the aggregate with a book value in
excess of ten percent (10%) of the book value of the
aggregate tangible assets of the Company (as measured at
the end of the immediately preceeding Fiscal Year);
(M) Incurring liabilities in the aggregate in any Fiscal
Year (other than for normal working capital purposes)
with a book value in excess of ten percent (10%) of the
book value of the aggregate tangible assets of the
Company (as measured at the end of the immediately
preceeding Fiscal Year);
(N) Refinancing any material indebtedness or voluntarily
repaying any material indebtedness (if penalty payments
result from such repayment or such indebtedness is
unable to be redrawn) or materially amending the terms
of any material indebtedness (unless any of the
foregoing is specifically approved in the
then-effective, Board-approved Company budget);
(O) Making any material loans or financial investments
(other than to Subsidiaries or the investment of excess
cash balances in short dated liquid securities with a
credit rating of A or better by Standard and Poors);
(P) Creating any mortgage, lien or security interest over
assets or properties of the Company in the aggregate in
any Fiscal Year (other than statutory liens incurred in
the ordinary course of business) with a book value
exceeding ten percent (10%) of the book value of the
aggregate tangible assets of the Company (as
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measured at the end of the immediately preceeding Fiscal
Year);
(Q) Amending the Company's Bylaws (whether adopted by the
Company or its successor under Section 16(a), Articles
of Incorporation or Certificate of Incorporation, as the
case may be;
(R) Merging or consolidating with any Person or permitting
any Subsidiary to merge or consolidate with any Person
except with or to the Company or any wholly owned direct
or indirect Subsidiary of the Company;
(S) Settling or compromising any pending or threatened suit,
action or claim by or against the Company or any of its
Subsidiaries in excess of $5,000,000;
(T) Causing or permitting a voluntary dissolution,
liquidation or bankruptcy of the Company or any material
Subsidiary of the Company; or
(U) Approving the taking or not taking of any action by the
Company or any Shareholder (whether in such
Shareholder's capacity as a stockholder, Member, member
of a board committee or officer of the Company or
otherwise), as required pursuant to Section 7(b) hereof.
(ii) The following Major Decisions made with respect to the Company
or any of its Subsidiaries shall, if made after the Closing, require the
affirmative vote or consent of the Board only if so requested by the Company's
Chief Executive Officer, or any Shareholder other than Investor, after rejection
by the Investor Representative, or if referred to the Board by the Investor
Representative:
(A) Incurring any liabilities in aggregate in any Fiscal
Year (other than for normal working capital purposes)
with a book value exceeding three percent (3%) of the
book value of the aggregate tangible assets of the
Company (as measured at the end of the immediately
preceding Fiscal Year);
(B) Selling or transferring, in any Fiscal Year (other than
in the ordinary course of business), any quantity of
Company assets in aggregate with a book value in excess
of three percent (3%) of the book value of the aggregate
tangible assets of the Company (as measured at the end
of the immediately preceding Fiscal Year);
(C) Amending the last annual budget approved by the Board,
or the Investor Representative, (which as at the Closing
shall be the
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2006 Fiscal Year budget provided to Investor on February
24, 2006) by an aggregate amount greater than five
percent (5%) of the budgeted EBITDA for the Fiscal Year
if it is an amendment relating to the income statement
or 5% of the total budgeted Capital Expenditures for the
Fiscal Year if it is an amendment relating to Capital
Expenditures;
(D) Committing to any Capital Expenditures outside of the
then current Fiscal Year;
(E) Paying fees or expenses to any person other than as
reasonable compensation on arms length terms or better
for work performed or services provided;
(F) Creating any mortgage, lien or security interest over
assets or properties of the Company in the aggregate in
any Fiscal Year (other than statutory liens incurred in
the ordinary course of business) with a book value
exceeding three percent (3%) of the book value of the
aggregate tangible assets of the Company (as measured at
the end of the immediately preceeding Fiscal Year);
(G) Entering into any contract or agreement outside the
ordinary course of business which cannot be terminated
within 12 months from the date thereof without penalty
or which has extended payment terms;
(H) Causing or permitting a voluntary bankruptcy of any
immaterial Subsidiary;
(I) Appointing financial advisors, to the extent the total
fees payable are reasonably likely to amount to greater
than five hundred thousand dollars ($500,000) (provided
that the engagement of any Affiliates of the Investor
will also be subject to any approvals required under the
internal policies of Investor and its parent entities
governing related party transactions);
(J) Incurring due diligence costs in excess of five hundred
thousand dollars ($500,000) in the aggregate in any
Fiscal Year with respect to acquisitions or investments;
(K) Engaging in any interest rate, currency hedging or other
derivative transactions;
(L) Modifying materially the insurance coverage or terms of
the Company including directors and officers insurance;
and
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(M) Amending materially any material internal policies or
procedures of the Company.
(k) The Company shall defend, indemnify and hold harmless each Member of
the Board and each officer, and, with respect to Section 3(k)(ii), each
Shareholder from and against any loss, liability, damage, cost or expense,
including reasonable attorneys' fees (collectively, "Loss") incurred by reason
of any demands, claims, suits, actions, or proceedings arising out of (i) the
indemnified person's services on the Board or as an officer or (ii) the
indemnified person's incurring any liability under ERISA as a result of the
operation of Section 13(c) herein; except to the extent that such
indemnification is not allowed by law or to the extent that such Loss arises
from an act or omission by the indemnitee finally determined by a court of
competent jurisdiction or by arbitration pursuant to this Agreement to
constitute bad faith, fraud, or willful misconduct. Expenses (including
reasonable attorneys' fees and disbursements) incurred in defending any claim,
demand, action, suit or proceeding, whether civil, criminal, administrative or
investigative, will be paid by the Company sufficiently in advance of the final
disposition of such claim to enable the indemnitee to pay its expenses on a
commercially acceptable schedule. The Company shall purchase director and
officer insurance in scope and amount of coverage comparable to similarly
situated businesses and reasonably acceptable to all Shareholders entitled to
appoint Members.
4. Dividend Policy.
(a) The Shareholders shall cause the Members of the Board appointed by
them to, and the Company shall, declare and pay a dividend with respect to each
Fiscal Quarter ending subsequent to the Closing (commencing with the Fiscal
Quarter ending June 30, 2006) to the Shareholders within 30 days of the end of
each such Fiscal Quarter (except to the extent that (i) such dividend is not
permitted by the terms of the financing agreements of the Company or by
applicable law; or (ii) payment of such dividend would result in the Company
retaining insufficient reserves of cash, cash equivalents and/or committed and
unutilized credit facilities to enable the Company to meet the normal
requirements of its business and to fund Capital Expenditure previously approved
by the Board which as of the Closing shall be the Capital Expenditure amounts
included in the budget provided to Investor on February 24, 2006) equal to:
(i) For Fiscal Quarters ending subsequent to the Closing and prior
to and including December 31, 2007, the Minimum Distribution; or
(ii) For the Fiscal Quarter ending March 31, 2008 and all Fiscal
Quarters thereafter, an amount equal to the sum of Cash Flows from Operating
Activities and Cash Flows from Investing Activities (both as determined in
accordance with GAAP) of the Company for the respective Fiscal Quarter less the
amount of Capital Expenditure spent solely in respect of maintenance and
environmental remediation issues by the Company for the respective Fiscal
Quarter, it being agreed between the Parties, for the purpose of clarification,
that in no case should Capital Expenditures be included in the calculation of
Cash Flows from Investing Activities.
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(b) With respect to Fiscal Quarters ending subsequent to the Closing and
prior to and including December 31, 2007, the Current Shareholder or Current
Beneficial Shareholders (as applicable) will loan all dividends received on
account of such Fiscal Quarters (net of all taxes payable by the Current
Beneficial Shareholders on such dividends) to the Company on an unsecured basis
(the "Shareholder Loans"). The Shareholder Loans shall not be made to, or
guaranteed by, any Subsidiary. The Shareholder Loans shall bear interest of five
and five-tenths percent (5.5%) on daily balances without compounding, interest
payable quarterly in arrears through December 31, 2022, and will amortize with
equal quarterly installments of principal over 15 years commencing March 31,
2008 and ending on December 31, 2022. So long as payments of principal and
interest are being made with respect to the Shareholder Loans, no aspect of the
Shareholder Loans shall in any way limit the obligation of the Company to pay
dividends pursuant to Sections 4 or 5 of this Agreement.
(c) Except for the provisions of Section 4(a), notwithstanding anything to
the contrary in this Section 4, the Shareholders shall cause the Members of the
Board appointed by them to, and the Company shall, declare and pay the dividend
determined in accordance with Paragraph (a)(i) of this Section 4 with respect to
the Fiscal Quarter ending on December 31, 2007 on or before December 31, 2007.
(d) Except for the provisions of Section 4(a), notwithstanding anything to
the contrary in this Section 4, if on the last day of the Fiscal Quarter ending
on March 31, 2008 or any Fiscal Quarter thereafter, the Company's Net Debt to
EBITDA ratio exceeds 4.25 to 1, the Board may, but shall not be required to,
declare a dividend with respect to such Fiscal Quarter.
(e) Notwithstanding anything to the contrary in this Section 4 (other than
Section 4(a)), with respect to the Fiscal Quarter ending on March 31, 2008 or
any Fiscal Quarter thereafter, the Board may, but shall not be required to
declare any amount of dividend (determined in accordance with Paragraph (a)(ii)
of this Section 4 with respect to such Fiscal Quarter) that if declared and paid
on the last day of such Fiscal Quarter would have caused the Company's Net Debt
to EBITDA ratio on the last day of such Fiscal Quarter to exceed 4.25 to 1
subsequent to the payment of such dividend.
(f) For the purpose of clarifying this Section 4, the "Company" shall mean
the Company and its Subsidiaries accounted for on a consolidated basis.
(g) For purposes of determining payment priority, any amounts that become
payable with respect to a Claim shall be paid to the extent possible at the time
of, but in priority to, the payment of any Company dividends as determined in
accordance with Section 4 and 5 for any Fiscal Quarter. The sum of the Claim
amount paid and Company dividends paid with respect to any Fiscal Quarter shall
not exceed the total Company dividends payable with respect to such Fiscal
Quarter as determined in accordance with Sections 4 and 5. For the avoidance of
doubt, to the extent that any portion of any Claim remains unpaid at the end of
any Fiscal Quarter, such unpaid amount shall remain an obligation of the
Company.
13
5. Capital Structure Policy.
(a) If on the last day of the Fiscal Quarter ending on September 30, 2007
or any Fiscal Quarter thereafter, the Company's Net Debt to EBITDA ratio would
have been less than 3.75 to 1 subsequent to the payment of a dividend in an
amount determined in accordance with Section 4 with respect to each such Fiscal
Quarter (assuming that such dividend had been funded from Net Debt and paid on
the last day of each such Fiscal Quarter) (the "Initial Dividend"), the
Shareholders shall cause the Members of the Board appointed by them to, and the
Company shall, declare and pay quarterly a dividend in addition to the Initial
Dividend (the "Additional Dividend") with respect to each such Fiscal Quarter to
the Shareholders within 30 days of the end of each such Fiscal Quarter (except
to the extent that (i) such dividend is not permitted by the terms of the
financing agreements of the Company or by applicable law; or (ii) payment of
such dividend would result in the Company retaining insufficient reserves of
cash, cash equivalents and/or committed and unutilized credit facilities to
enable the Company to meet the normal requirements of its business and to fund
Capital Expenditures previously approved by the Board which as at the Closing
shall be the Capital Expenditure amounts included in the budget provided to
Investor on February 24, 2006). Subject to the provisos contained in the
preceeding sentence, the Additional Dividend payable with respect to each such
Fiscal Quarter shall be of an amount such that if both the Additional Dividend
and the Initial Dividend had been funded from Net Debt and paid on the last day
of each such Fiscal Quarter, the Company's Net Debt to EBITDA ratio on the last
day of each such Fiscal Quarter subsequent to the payment of the Additional
Dividend and the Initial Dividend would have been equal to 3.75 to 1.
(b) The Shareholders shall cause the Company and the Members of the Board
appointed by them to, and the Company shall, re-negotiate, refinance (including,
if necessary, the payment of prepayment premiums or make wholes) and/or
establish debt facilities to the extent possible as required to enable the
capital structure and dividend policy described in Sections 4 and 5 hereof to be
implemented.
(c) In the event that the Company is unable or unwilling to comply with
the requirements of Section 4 and 5 hereof as a result of any action or omission
by any Subsidiary of the Company, then the Company and the Shareholders shall
take such actions as are necessary to remove any Subsidiary directors or
officers whose removal would facilitate compliance. For the purpose of
clarifying this Section 5, the "Company" shall mean the Company and its
Subsidiaries accounted for on a consolidated basis.
(d) Notwithstanding the foregoing provisions of Section 4 or this Section
5, no Shareholder shall be required to lend or otherwise convey to the Company
any Additional Dividend paid with respect to Fiscal Quarters ending September
30, 2007 or December 31, 2007.
6. Corporate Opportunities.
If any Shareholder (for purposes of this Section 6 and Section 7 below
only, "Shareholder" shall include Investor, Macquarie Infrastructure Company
LLC, wholly owned Subsidiaries of Macquarie Infrastructure Company LLC and any
Affiliate of the Current Beneficial Shareholders) identifies an acquisition,
"greenfield" development,
14
expansion or upgrade opportunity for bulk liquid storage and/or bulk liquid
terminalling facilities that it wishes to pursue, which involves Capital
Expenditure anticipated to be greater than $2,500,000 in the aggregate in any
consecutive 12 month period (the "Opportunity"), the Opportunity must first be
offered to the Company.
If the Company declines the Opportunity, the Shareholder that referred the
Opportunity to the Company (the "Referring Shareholder") will have a right
either to pursue the Opportunity on its own (but not within the existing
terminalling facilities of the Company), or in conjunction with partners other
than the Company. Notwithstanding the foregoing, a Shareholder shall not pursue
the Opportunity if such pursuit results in either competition with the business
of the Company or solicitation of the customers, staff or suppliers of the
Company, to the detriment of the business of the Company.
7. Covenants of Shareholders.
(a) Covenant Not to Compete; Prohibited Activities. None of the
Shareholders shall, for any reason whatsoever, directly or indirectly, for
himself, or on behalf of or in conjunction with any other Person:
(i) engage as a stockholder, officer, director, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee, independent
contractor, consultant or advisor, in any business selling any products or
services in direct competition with the Company; provided, however, no
Shareholder shall be precluded from the ownership of securities of corporations
that are listed on a national securities exchange or traded in the national
over-the-counter market in an amount that shall not exceed one percent (1%) of
the outstanding shares of any such corporation; or
(ii) employ, or call upon for the purpose or with the intent of
enticing away from or out of the employ of the Company, any person who is at
that time, or was within one (1) year prior to that time, an employee of the
Company.
The Parties intend that the covenants contained in this Section 7(a)
shall be deemed to be a series of separate covenants, one for each county in
each state of the United States and, except for geographic coverage, each such
separate covenant shall be identified in terms to the covenant contained in this
Section 7(a).
(b) 1940 Act; Prohibited Activities. Without the prior approval of the
Board pursuant to Section 3(j)(i)(U) hereof, neither the Company nor any
Shareholder (whether in such Shareholder's capacity as a stockholder, Member,
member of a board committee or officer of the Company or otherwise) shall take
any action that if taken, or refrain from taking any action that if not taken,
could cause the Company or any of its Subsidiaries to (i) be deemed an
"investment company," as such term is defined in the Investment Company Act of
1940, as amended or any successor act (the "1940 Act"), or (ii) rely on the
exemptions from the definition of investment company set forth in Section
3(c)(1) or Section 3(c)(7) (or successor provision) of the 1940 Act.
15
8. Succession of Chief Executive Officer and Chief Financial Officer.
(a) In the event of the resignation, termination, incapacity, or death of
Thomas B. Coleman, the Shareholders agree to cause their respective Appointed
Members of the Board to elect as successor Chief Executive Officer, Richard D.
Courtney, provided that Mr. Courtney is nominated to the Board by a majority of
the Appointed Members who were appointed by the Current Shareholder. Thereafter,
or in the event Richard D. Courtney is not nominated by a majority of the
Appointed Members who were elected by the Current Shareholder, a majority of the
Appointed Members of the Current Shareholder shall be entitled to nominate to
the Board candidates to be the Company's Chief Executive Officer. No Party shall
be obligated to support in any way any individual candidate to be Chief
Executive Officer, other than as set forth above with respect to Richard D.
Courtney.
(b) In the event of the resignation, termination, incapacity or death of
Howard W. Streiffer, a majority of the Appointed Members elected by Investor
shall be entitled to nominate candidates to be the Company's Chief Financial
Officer. No party shall be obligated to support in any way any individual
candidate to be Chief Financial Officer.
9. Transfer Restriction/Right of First Refusal.
(a) Without the prior written consent of all Shareholders, no Shareholders
may sell, assign or transfer any shares of stock in the Company, except to its
respective Affiliates and in compliance with Section 15 hereof, until the tenth
(10th) anniversary of the effective date of this Agreement. Following the tenth
(10th) anniversary of this Agreement, the Shareholders may sell, assign or
transfer their respective Shares according to the terms of the remainder of this
Section 9.
(b) If at any time after the tenth (10th) anniversary of the effective
date of this Agreement, a Shareholder receives a bona fide offer to purchase any
Shares of the Company then registered in its name (the "Offered Shares") from a
party who is not its Affiliate (herein a "Third Party"), such Shareholder (a
"Selling Shareholder") shall not transfer its Offered Shares, directly or
indirectly, to such Third Party until it has first offered in writing (the
"Offer") the Offered Shares for sale to each remaining Shareholder ("Non-selling
Shareholder"), on a pro-rata basis, for the same price and on the same terms as
are offered by such Third Party, except should the Third Party offer contain
terms and conditions that would serve to prohibit or unreasonably restrict the
ability of a Non-selling Shareholder to accept the Offer (other than the
purchase price for the Offered Shares), then such Non-selling Shareholder may
disregard such terms and conditions and accept or reject the Offer without such
terms and conditions (the "Reformed Offer") (the foregoing right of first
refusal, the "ROFR").
(c) (i) The Offer to the Non-selling Shareholders shall attach a copy of
the Third Party offer and shall otherwise identify the Third Party and specify
all of the terms of the Third Party offer, including the total number of Offered
Shares to be transferred, the nature and quantity of the economic interest to be
transferred, the price, and the other terms and conditions related to such
transfer. Each Non-selling Shareholder shall have sixty (60) days to accept or
reject his, her, or its pro-rata portion of the Offer, or the Reformed Offer as
the case may be. Except as set forth in Section (c)(ii) hereof, if the
Non-selling Shareholder
16
accepts the Offer or the Reformed Offer as the case may be, the purchase of the
Offered Shares shall close no later than one hundred twenty (120) days following
such acceptance. If the Non-selling Shareholder chooses not to accept the Offer
or the Reformed Offer, as the case may be, the Selling Shareholder may sell to
such Third Party for the price and on the terms specified in the Third Party
offer; provided, that, any such transaction is completed within one hundred
twenty (120) days after the Selling Shareholder receives notice that the
Non-selling Shareholder has rejected the Offer or the Reformed Offer, as the
case may be. Any decrease in price or change in terms shall require a separate
written Offer to be made to the Non-selling Shareholder pursuant to the terms of
Sections 9(b) and 9(c).
(ii) Notwithstanding the foregoing, where any Non-selling
Shareholder elects to purchase its pro-rata portion of the Offered Shares, the
Selling Shareholder may, in its sole discretion elect not to transfer such
Offered Shares to any of the Non-selling Shareholders (and may not transfer to
less than all Non-selling Shareholders), provided that the Selling Shareholder
(A) shall provide written notice to such Non-selling Shareholders of this
decision within ten (10) days of its receipt of such Non-selling Shareholder's
acceptance of the offer which is the basis for the Selling Shareholders election
not to transfer the Offered Shares and (B) may not transfer the Offered Shares
to the original Third Party offeree (or any other Third Party) without again
complying with this Section 9.
(d) Notwithstanding the foregoing, any Selling Shareholder shall be
required to obtain the prior written consent of all Non-selling Shareholders
(such consent not be unreasonably withheld, conditioned or delayed) in
connection with any transfer to a Third Party.
(e) Notwithstanding the foregoing, nothing in this Agreement shall prevent
a Shareholder from selling, assigning or transferring its Shares to one or more
of its Affiliates in a transfer that complies with Section 15 hereof. However,
unless released by the other Party (which release shall not be unreasonably
withheld, conditioned, or delayed) such Shareholder shall remain liable for all
of its obligations under this Agreement. After the tenth (10th) anniversary of
the effective date of this Agreement, or prior thereto with the consent of the
other Parties, a Shareholder may pledge or assign its Shares as collateral for
any indebtedness provided that should ownership or voting rights be later
transferred in connection with such pledge or assignment the transaction will be
subject to the Non-selling Shareholders' ROFR and the rights under clause (d)
above, provided, however, that (i) the pledging Shareholder shall notify the
secured party of the existence of the obligations of ROFR and (ii) in the event
that the secured party under such pledge or assignment forecloses on such
shares, then the Non-selling Shareholder's ROFR shall apply as if such
foreclosure were a sale. In addition, any selling or transferring such shares
subsequent to such foreclosure shall also be subject to the Non-selling
Shareholder's ROFR with respect to such sale and the receipt of prior written
consent of all Non-selling Shareholders (such consent not to be unreasonably
withheld, conditioned or delayed) in connection with any such transfer by a
secured party. In the event that a ROFR in favor of Non-selling Shareholder is
triggered by the foreclosure by a pledgee or assignee, then the ROFR shall
operate as set forth in this Section 9 except as set forth explicitly in this
paragraph 9(e). The price to be paid by Non-selling Shareholders with respect to
a ROFR triggered by foreclosure shall be established by an accounting or
valuation firm of national standing selected mutually by a majority of
Non-selling Shareholders and the Shareholder whose shares have been foreclosed
upon. The
17
foregoing valuation shall not include discounts for minority interest or lack of
marketability. The time limits otherwise set forth in this Section 9 shall
commence upon the rendering of the foregoing valuation. In the event that any
Shareholder (including the pledgor) is reasonably dissatisfied with such
valuation, such Shareholder may engage, at its own expense, a separate
accounting or valuation firm of national standing according to the restrictions
set forth herein. In the event of a difference between the two valuations, they
will be averaged. Any Shareholder pledging or assigning its Shares as collateral
for indebtedness shall inform the lender of the terms of this Section 9.
(f) Any Shareholder who sells, assigns, gifts, pledges, or otherwise
transfers any Shares or other Company securities, shall require that any person
or entity who acquires Shares or other Company securities as a consequence of
such transaction shall (i) execute the joinder attached hereto as Exhibit C (the
"Joinder") and (ii) in any event, automatically, upon acquiring Beneficial
Ownership of such Shares or other Company securities, become a party to this
Agreement. The Company shall not recognize or reflect any change in the
ownership of its Shares or other securities, on its share ledger or otherwise,
unless the new owner of such Shares or other securities has executed the
Joinder.
(g) Selling Shareholders will be required to indemnify the Company for the
fair value of any negative tax consequences to the Company resulting from any
direct or indirect sale or transfer of some or all their shares in the Company.
The indemnification payment required by this Section 9(g) shall be made by the
Selling Shareholder(s) to the Company prior to the transfer of shares, based
upon the reasonable estimate of qualified advisors appointed by the Non-selling
Shareholders but who are not Affiliates of the Non-selling Shareholders.
(h) Any sale, assignment, gift, pledge, or other transfer of Shares or
other Company securities in violation of this Section 9 or Section 15 shall be
void.
10. Shareholder Default.
(a) In the event that any Shareholder breaches materially this Agreement
and, such breach is not cured within sixty (60) days after written notice
thereof, then the remaining Shareholders shall be entitled to such remedies as
are available to them at law and under this Agreement.
(b) In the event any Shareholder shall file a voluntary bankruptcy
petition, such Shareholder shall give notice to the other Shareholders prior to
filing such petition, and as soon as reasonably practical after making the
decision to file such petition.
(c) Without limiting in any way the rights or obligations under this
Agreement, the Shareholders shall use commercially reasonable efforts to promote
the business of the Company.
(d) Notwithstanding anything in this Agreement to the contrary, the
Company, and not the Current Shareholder nor the Current Beneficial
Shareholders, shall be responsible for any monetary damages resulting from the
breach of this Agreement by the Current Shareholder or the Current Beneficial
Shareholders. Nothing in this Section 10 shall be interpreted to limit the
remedies or obligations of any Shareholder pursuant to Section 16(d) hereof.
Further, the Company and not the Current Shareholder nor the Current Beneficial
18
Shareholders, shall be responsible for any equitable relief resulting from the
breach of this Agreement by the Current Shareholder or the Current Beneficial
Shareholders, except to the extent that failing to obtain equitable relief from
the Current Shareholder or any Current Beneficial Shareholder would deny the
Investor the benefit of the bargain contemplated hereby. For example, specific
performance of the ROFR or the voting obligations contemplated hereby against
the Current Shareholder or any Current Beneficial Shareholder would be
permitted.
(e) In the event that Investor seeks monetary damages after the Closing
and such damages are found to be the responsibility of the Company, the Current
Shareholder or any Current Beneficial Shareholder, then the Company shall pay to
the Investor an amount equal to two times (2x) the damages sustained by the
Investor, which amount shall be paid in the priority provided to Claims pursuant
to Section 4(g) hereof. As the first example, where damages of one million
dollars ($1,000,000) are incurred by Investor due to breach of this Agreement by
other Shareholder(s) or the Company, the amount payable to the Investor by the
Company pursuant to this Section 10(e) shall be two million dollars
($2,000,000). As the second example, for clarification, where damages of one
million dollars ($1,000,000) are incurred by the other Shareholder(s) and/or the
Company in aggregate due to breach of this Agreement by the Investor, the Amount
payable to other Shareholder(s) and/or the Company in aggregate by Investor
pursuant to this Section 10(e) shall be one million dollars ($1,000,000). For
the purpose of clarification, Section 4(g) hereof does not apply to damages paid
by the Investor.
11. Special Governance Standards.
If at any point during any Fiscal Year, Investor has Beneficial Ownership
greater than fifty percent (50%) of the Shares in the Company, each Shareholder
will, if requested by Investor, take all actions necessary during such Fiscal
Year to cause the Company to meet the financial statement, disclosure controls
and internal controls over financial reporting requirements as applicable to a
subsidiary of a company with a class of securities registered pursuant to the
Sections 12(b) or 12(g) of the Exchange Act which are listed on the New York
Stock Exchange, including under the Sarbanes-Oxley Act of 2002, as amended. In
addition, each Shareholder will take all actions necessary during such Fiscal
Year to cause the Company to meet the internal policies and procedures of
Macquarie Infrastructure Company LLC and to cause its books and records to be
adjusted in order to conform with GAAP as applied to majority-owned subsidiaries
of Macquarie Infrastructure Company LLC.
12. Contractual Dispute Resolution.
(a) In the event of a dispute between the Shareholders related to this
Agreement, the Shareholders shall attempt in good faith to settle such dispute.
If a mutually agreeable settlement cannot be reached in thirty (30) calendar
days following written notice describing in reasonable detail the basis of the
dispute, the dispute shall be submitted to a panel comprised of one senior-level
representative of each Shareholder (the "Resolution Board"). Should the dispute
not be settled by mutual agreement within twenty (20) days after submission to
the Resolution Board, then the dispute shall be referred to arbitration with
such
19
arbitration to be held at any place within the State of Delaware as the
Shareholders shall agree, in accordance with the following rules and procedures:
(i) Such dispute between the Shareholders arising out of the
Shareholders Agreement shall be governed by the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA").
(ii) The arbitration shall be heard and determined by a panel of
three (3) arbitrators. Each Shareholder shall appoint an arbitrator of its
choice within fifteen (15) days of the submission of a notice of arbitration.
These arbitrators shall in turn appoint a presiding arbitrator of the tribunal
within fifteen (15) days following the appointment of such arbitrators. The
presiding arbitrator shall have served as a judge on the Chancery Court of the
State of Delaware. Each of the arbitrators shall have the minimum qualifications
set forth below. If the Shareholder appointed arbitrators cannot reach agreement
on a presiding arbitrator of the tribunal and/or one Shareholder fails or
refuses to appoint its arbitrator within the prescribed period, the appointment
authority for the presiding arbitrator and/or such Shareholder appointed
arbitrator shall be the AAA, who, in each case, shall appoint an independent
arbitrator who does not have any financial interest in the dispute, controversy
or claim or bear any relationship to either Shareholder. If an arbitrator should
die, withdraw or otherwise become incapable of serving, or refuse to serve, a
successor arbitrator shall be selected and appointed in the same manner as the
original arbitrator.
An arbitrator:
(A) Cannot be a current director, officer, employee, or
consultant of any Shareholder or any of its Affiliates,
or a family member of any person currently serving in
such capacity;
(B) Cannot have served as a director, officer, employee, or
consultant of any Shareholder or any of its Affiliates;
(C) Cannot have a direct or indirect material business or
other relationship, or be a shareholder, partner, family
member or other equity holder of any company or other
entity that has a direct or indirect material business
or other relationship, with any Shareholder or any of
its Affiliates; and
(D) Cannot have a relationship referenced in items (A), (B)
or (C) above with any competitor of the Company and/or
its Subsidiaries or any of the Shareholders or their
Affiliates.
In the resolution of any dispute related to this Agreement, the arbitrator
shall be obligated to honor the original intentions of the Parties as evidenced
by the plain meaning of the terms and provisions herein.
13. Resolution of Deadlock of the Board of Directors.
(a) For so long as the Current Beneficial Shareholders or Investor
Beneficially Own fifty percent (50%) of the Shares and has the right to appoint
fifty percent (50%) of the
20
Members of the Board, a deadlock (a "Deadlock") may be declared by either
Shareholder (i) before or on the tenth (10th) anniversary of this Agreement if
the Board shall be unable to reach agreement by the required affirmative vote on
any Major Decision after such matter has been submitted for consideration at two
meetings (any of which may be a meeting duly called by any Member of the Board),
the second of which is to be at least 10 days after the previous such meeting or
(ii) after the tenth (10th) anniversary of this Agreement if the Board shall be
unable to reach agreement by the required affirmative vote on any Major Decision
after such matter has been submitted for consideration at four meetings (any of
which may be a special meeting duly called by any Member of the Board) the third
and fourth of which are at least one month after the previous such meeting.
(b) If a Deadlock is declared before or on the tenth (10th) anniversary of
the date of this Agreement, the Shareholders shall negotiate in good faith and
use their respective commercially reasonable efforts to resolve such Deadlock.
If, however, after ten (10) Business Days such Deadlock remains, any
Shareholder, by giving notice to the other Shareholder, may request that such
Deadlock be referred for resolution to a senior executive officer of each
Shareholder. The senior executive officers shall meet within ten (10) Business
Days thereafter and shall attempt in good faith to resolve such Deadlock within
ten (10) days, after which time it shall be concluded that such senior executive
officers have not succeeded in resolving the Deadlock. Any resolution agreed to
in writing by the senior executive officers shall be final and binding on the
Company and the Shareholders. If none of the means otherwise required by this
Section 13(b) have succeeded in resolving the Deadlock, then the Deadlock shall
be submitted for resolution by a arbitration conducted in compliance with
Section 12 hereof, provided, however, arbitrators selected by the Investor and
the Current Shareholder shall, in addition to all other requirements thereof,
have a senior executive-level of experience in an enterprise of a comparable
size and complexity to the Company.
(c) If a Deadlock is declared after the tenth (10th) anniversary of the
date of this Agreement, the Shareholders shall negotiate in good faith and use
their respective commercially reasonable efforts to resolve such Deadlock. If,
however, after twenty (20) Business Days such Deadlock remains, any Shareholder,
by giving notice to the other Shareholder, may request that such Deadlock be
referred for resolution to a senior executive officer of each Shareholder. The
senior executive officers shall meet within twenty (20) Business Days thereafter
and shall attempt in good faith to resolve such Deadlock within twenty (20)
days, after which time it shall be concluded that such senior executive officers
have not succeeded in resolving the Deadlock. Any resolution agreed to in
writing by the senior executive officers shall be final and binding on the
Company and the Shareholders. If none of the means otherwise required by this
Section 13(c) have succeeded in resolving the Deadlock, then, either
Shareholder, within thirty (30) Business Days thereafter, shall be authorized to
offer to purchase all of the Shares of the other Shareholder pursuant to the
procedures set forth in the following provisions, provided that the Shareholders
may, by written agreement, elect to terminate the procedures at any time prior
to their conclusion as described below:
(i) Either Shareholder (the initiating party being hereinafter
referred to as the "Offering Party") may by written notice (a "Buy/Sell Notice")
to the other party (the "Responding Party") assert their opinion of the
aggregate fair value, on a going concern
21
basis, of all of the outstanding Shares (and other equity interests) in the
Company (the "Stated Value"). The provision of such written notice of Stated
Value by the Offering Party shall constitute the irrevocable offer of such party
to either (A) purchase all of the Responding Party's Shares or (B) sell to the
Responding Party all of the Offering Party's Shares for the purchase price
provided for hereinafter.
(ii) Within forty-five (45) calendar days after receipt of the
Buy/Sell Notice, the Responding Party shall determine whether it shall sell its
Shares or purchase the Offering Party's Shares in the Company as provided herein
and shall give written notice to the Offering Party of its decision and shall
designate in that notice which party will be the "Selling Party" and which party
shall be the "Purchasing Party." If the Responding Party fails to give notice of
its election to the Offering Party within the forty-five (45) calendar day
period, then the Responding Party shall be deemed to have given notice of its
election to sell all of its Shares in the Company pursuant to the provisions
hereof. The terms of such sale shall include an indemnification by the
Purchasing Party of the Selling Party and its ERISA Affiliates for any
continuing liability of the Selling Party and its ERISA Affiliates under ERISA,
with respect to employee benefit plans of the Company and its ERISA Affiliates.
(iii) Within one hundred fifty (150) calendar days after the date on
which the Responding Party provides the notice referred to in (ii) above (or, if
later, within five (5) calendar days after the date on which any waiting period
under the Hart-Scott-Rodino Improvements Act of 1976, as amended, shall have
expired or been terminated), the Purchasing Party shall close the purchase of
all of the Shares in the Company then owned by the Selling Party. The purchase
price for such Shares shall be the product obtained by multiplying the Stated
Value times the percentage interest in the Company represented by the Shares of
the Selling Party. The Purchasing Party shall pay the purchase price for such
Shares in cash by wire transfer of immediately available funds at the closing.
The Selling Party shall deliver to the Purchasing Party at the closing such
documents and instruments as may be necessary or desirable, in the opinion of
counsel for the Purchasing Party, to effect the transfer of the Selling Party's
Shares to the Purchasing Party, which Shares shall be free and clear of all
encumbrances.
(iv) In the event each Shareholder receives an offer to purchase
from the other (either simultaneously or prior to receipt of an offer) and such
offers contain different Stated Values, the Shareholder offering the higher
Stated Value shall be deemed the Offering Party for the purposes herein.
14. Investor Information and Reporting Requirements; Visitation.
(a) The Company and its Subsidiaries will provide Investor with financial
and non-financial information with respect to the Company and its Subsidiaries
and provide other assistance to Investor, in a form, scope and within a
time-frame and after procuring any necessary third party consents, as reasonably
requested by Investor, to enable its parent entities Macquarie Infrastructure
Company Inc, Macquarie Infrastructure Company LLC and Macquarie Infrastructure
Company Trust, in their judgment, to (i) satisfy their disclosure and other
obligations arising under applicable U.S., securities law or stock exchange
regulations (both regular and in association with any capital raisings); (ii) to
monitor the financial and
22
operating performance and risk management controls of the Company as established
by the Company from time to time; (iii) satisfy their reporting obligations to
any lenders; and (iv) to accurately prepare federal and state corporate tax
returns with respect to its investment in the Company and to provide information
to nominee holders of the shares of Macquarie Infrastructure Company Trust with
respect to the US federal income tax characteristics of distributions from
Macquarie Infrastructure Company Trust so as to enable such nominees to withhold
appropriate amounts of withholding tax on distributions from Macquarie
Infrastructure Company Trust to non-resident shareholders (including without
limitation the provision of quarterly calculations of the Company's consolidated
earning and profits (as such terms are defined in the Code)).
(b) Each Shareholder shall have the right to visit and inspect any of the
properties of the Company and to discuss the affairs, finances and accounts of
the Company with its officers, and to review such information as is reasonably
requested all at such reasonable times and as often as may be reasonably
requested.
15. ERISA Affiliate Status Limitations and Requirements.
(a) It is intended by the Parties that the Company and the Investor not be
treated as ERISA Affiliates. The Current Beneficial Shareholders and the Current
Shareholder agree that they will take no action as would cause the Company and
the Investor to be ERISA Affiliates, including, but not limited to, accepting
employment with the Company or an ERISA Affiliate with the Company (except for
Thomas B. Coleman); becoming a principal owner, officer, partner or fiduciary of
any entity as would cause the Shares of such Current Beneficial Shareholders or
the Current Shareholder to be treated as excluded stock (under the rules
applicable for determining ERISA Affiliate status); transferring Shares by sale,
assignment, gift, pledge or other transfer to any party whose ownership would
cause the Shares to be treated as excluded stock or whose ownership would be
attributed to the Investor; or granting any party the option or right to acquire
all or any of the Shares held by the Current Beneficial Shareholders or Current
Shareholder, as the case may be.
(b) Neither the Current Shareholder nor any Current Beneficial Shareholder
may transfer any Shares, whether by sale, assignment, gift, pledge or other
transfer and neither the Current Shareholder nor any Current Beneficial
Shareholder shall issue any rights to acquire such Shares (collectively a
"Transfer") unless such Transfer is otherwise permitted under the terms of this
Agreement and prior to such Transfer the Current Shareholder or Current
Beneficial Shareholder delivers to the Company and the Investor an opinion of
legal counsel in a form acceptable to the Investor that such Transfer will not
result in the Company and the Investor being treated as ERISA Affiliates.
16. Miscellaneous
(a) Change of Jurisdiction of Incorporation. Each Shareholder agrees to
take such actions as are required, immediately after the Closing, to change the
Company's jurisdiction of incorporation from Louisiana to Delaware. It is
expected that the method of reincorporation will be merger of the Company with
and into a newly formed Delaware corporation the name of which shall be IMTT
Holdings Inc.
23
(b) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company and the Shareholders and their respective
permitted successors and assigns. No Party may assign its rights or obligations
hereunder without the prior written consent of the remaining Parties hereto.
Notwithstanding the foregoing, each Party hereby irrevocably consents to the
assignment of this Agreement to such entity as the Board elects to facilitate
the reincorporation of the Company as contemplated by Section 16(a) hereof. Such
successor company shall have a Certificate of Incorporation and Bylaws
substantially in the form set forth in Exhibit A and Exhibit B.
(c) Governing Law. This Agreement shall in all respects be interpreted,
construed and governed by and in accordance with the laws of the State of
Delaware, without regard to its principles of conflicts of laws. Each of the
Parties irrevocably submits to the jurisdiction of, and to service of process
under the power of, the state and federal courts in Wilmington, Delaware.
(d) Specific Performance; Remedies Not Exclusive. Each party hereto
acknowledges that the other Parties hereto shall be irreparably harmed and that
there shall be no adequate remedy at law for any violation by any of them of any
of the covenants or agreements contained in this Agreement. It is accordingly
agreed that, in addition to, but not in lieu of, any other remedies which may be
available upon the breach of any such covenants or agreements, each Party hereto
shall have the right to obtain injunctive relief during the arbitration process
to restrain a breach or threatened breach of, or otherwise to obtain specific
performance of, the other Parties' covenants and agreements contained in this
Agreement. All rights and remedies of the Parties under this Agreement shall be
cumulative, and the exercise of one or more rights or remedies will not preclude
the exercise of any other right or remedy available under this Agreement or
applicable law.
(e) Severability. Each section, subsection and lesser section of this
Agreement constitutes a separate and distinct undertaking, covenant and/or
provision hereof. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be deemed severed
from this Agreement, but every other provision of this Agreement shall remain in
full force and effect; provided, however that if such unlawful clause is so
material to the Party for whose benefit the clause was originally included so
that such Party would not have entered into this Agreement without such unlawful
clause, the severability of such clause shall be arbitrated pursuant to Section
12 hereof.
(f) Amendment. This Agreement may be amended, supplemented or modified by
execution of an instrument in writing signed by or on behalf of each Party
hereto.
(g) Waiver. Any Party hereto, by action taken by or on behalf of its
Board, may to the extent permitted by applicable law (i) extend the time for the
performance of any of the obligations or other acts of the other Parties hereto
or (ii) waive compliance with any of the agreements of the other Parties hereto
contained herein. No such extension or waiver shall be effective unless set
forth in a written instrument duly executed by or on behalf of the Party
extending the time of performance or waiving any such inaccuracy or
non-compliance. No waiver by any Party of any term of this Agreement, in any one
or more instances, shall be deemed to be or construed as a waiver of the same or
any other term of this Agreement on any future occasion.
24
(h) Notices. All notices, requests, consents, waivers, and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given (a) if personally delivered, upon
delivery or refusal of delivery; (b) if mailed by registered or certified United
States mail, return receipt requested, postage prepaid, upon delivery or refusal
of delivery; or (c) if sent by a nationally recognized overnight delivery
service, upon delivery or refusal of delivery. All notices, consents, waivers,
or other communications required or permitted to be given hereunder shall be
addressed as follows:
(i) If to the Investor:
MACQUARIE TERMINAL HOLDINGS LLC
125 West 55th St.
New York, NY 10019
Attention: David Mitchell, Chief Financial Officer
Telephone: 1 (212) 231-1814
Facsimile: 1 (212) 231-1828
with a copy to:
Pillsbury Winthrop Shaw Pittman LLP
1650 Tysons Blvd
McLean, Virginia 22102
Attention: Craig Chason
Telephone: 703-770-7947
Facsimile: 703-770-7901
(ii) If to CURRENT SHAREHOLDER:
Voting Trust of Loving Enterprises, Inc.
Coleman, Johnson, Artigues & Jurisich, L.L.C.
321 St. Charles Avenue
New Orleans, Louisiana 70130
Telephone: (504) 586-1979
Facsimile: (504) 525-9464
ATTENTION: Richard B. Jurisich, Jr.
with a copy to:
Coleman, Johnson, Artigues & Jurisich, L.L.C.
321 St. Charles Avenue
New Orleans, Louisiana 70130
ATTENTION: Bertrand F. Artigues
Telephone: 504.586.1979
Facsimile: 504.525.9464
25
(iii) If to Company:
Loving Enterprises, Inc.
321 St. Charles Avenue
New Orleans, Louisiana 70130
ATTENTION: Richard B. Jurisich, Jr.
Telephone: 504.586.8300
Facsimile: 504.525.9464
with a copy to:
Bertrand F. Artigues
Coleman, Johnson, Artigues & Jurisich, L.L.C.
321 St. Charles Avenue, 10th Floor Suite
New Orleans, LA 70130
(iv) If to Current Beneficial Shareholders:
James J. Coleman, Jr.
Thomas B. Coleman
Peter D. Coleman
Dian C. Winingder
in care of:
Richard B. Jurisich, Jr.
Coleman, Johnson, Artigues & Jurisich, L.L.C.
321 St. Charles Avenue, 10th Floor Suite
New Orleans, LA 70130
or at such other address or addresses as the Party addressed may from time to
time designate in writing pursuant to notice given in accordance with this
section.
(i) Complete Agreement. This Agreement, those documents expressly referred
to herein, including all exhibits and schedules hereto, and the other documents
of even date herewith embody the complete agreement and understanding among the
Parties and supersede and preempt any prior understandings, agreements or
representation by or among the Parties, written or oral, which may have related
to the subject matter herein.
(j) Absence of Third Party Beneficiary Rights. No provision of this
Agreement is intended, nor will be interpreted, to provide or create any third
party beneficiary rights or any other rights of any kind in any client,
customer, Subsidiaries, stockholder, employee or partner of any Party hereto or
any other Person.
26
(k) Mutual Drafting. This Agreement is the mutual product of the Parties,
and each provision hereof has been subject to the mutual consultation,
negotiation and agreement of each of the Parties, and shall not be construed for
or against any Party hereto.
(l) Further Representations. Each party to this Agreement acknowledges and
represents that it has been represented by its own legal counsel in connection
with the transaction contemplated by this Agreement, with the opportunity to
seek advice as to its legal rights from such counsel. Each party further
represents that it is being independently advised as to the tax or securities
consequences of the transactions contemplated by this Agreement and is not
relying on any representation or statements made by the other party as to such
tax and securities consequences.
(m) Gender. Unless the context clearly indicates otherwise, where
appropriate the singular shall include the plural and the masculine shall
include the feminine or neuter, and vice versa, to the extent necessary to give
the terms defined herein and/or the terms otherwise used in this Agreement the
proper meanings.
(n) Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
(o) Counterparts. This Agreement may be executed in two or more
counterparts, each of which when executed and delivered shall be deemed an
original and all of which, taken together, shall constitute the same agreement.
This Agreement and any document or schedule required hereby may be executed by
facsimile signature which shall be considered legally binding for all purposes.
(p) Effective Date. This Agreement shall have no force or effect until the
occurrence of the Effective Date.
27
IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be
signed by its officer thereunto duly authorized as of the date first above
written.
MACQUARIE TERMINAL HOLDINGS LLC
By: Macquarie Infrastructure Company Inc.
(d/b/a Macquarie Infrastructure Company
(US))
By: /s/ Peter Stokes
-------------------------------------
Name: Peter Stokes
Title: Chief Executive Officer
LOVING ENTERPRISES, INC.
By: /s/ Thomas B. Coleman
-------------------------------------
Name: Thomas B. Coleman
Title: Chief Executive Officer
CURRENT BENEFICIAL SHAREHOLDERS
/s/ Thomas B. Coleman
-------------------------------------
Thomas B. Coleman
/s/ James J. Coleman, Jr.
-------------------------------------
James J. Coleman, Jr.
/s/ Peter D. Coleman
-------------------------------------
Peter D. Coleman
/s/ Dian Coleman Winingder
-------------------------------------
Dian Coleman Winingder
28
CURRENT SHAREHOLDER
By: VOTING TRUST FOR LOVING ENTERPRISES,
INC.
By: /s/ James J. Coleman, Sr.
-------------------------------------
Trustee:
29
EXHIBIT A
CERTIFICATE OF INCORPORATION
FIRST: The name of this corporation shall be: IMTT Holdings, Inc.
SECOND: Its registered office in the State of Delaware is to be located at
1209 Orange Street, in the City of Wilmington, County of New Castle, 19801 and
its registered agent at such address is THE CORPORATION TRUST COMPANY.
THIRD: The purpose or purposes of the corporation shall be:
To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of
Delaware.
FOURTH: The total number of shares of stock which this corporation is
authorized to issue is: two thousand (2000) shares.
FIFTH: The name and address of the incorporator is as follows: Steven
Kaplan, Suite 1400, 1650 Tysons Blvd, McLean, VA 22102
SIXTH: The Board of Directors shall have the power to adopt, amend or
repeal the by-laws.
SEVENTH: No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law, (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this Article Seventh
shall apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
IN WITNESS WHEREOF, the undersigned, being the incorporator herein before
named, has executed signed and acknowledged this certificate of incorporation
this __ day of ___________, A.D. 2006.
--------------------
Name: Steven Kaplan
A-1
EXHIBIT B
BYLAWS
OF
LOVING ENTERPRISE, INC.
(A LOUISIANA CORPORATION)
AND
BYLAWS
OF
IMTT HOLDINGS, INC.
(A DELAWARE CORPORATION)
ARTICLE I
SHAREHOLDERS AGREEMENT
Where these bylaws are silent, or where there is any conflict, the
Shareholders' Agreement by and among Macquarie Terminal Holdings LLC, a Delaware
limited liability company, Loving Enterprises, Inc., a Louisiana corporation,
(or its successor in interest) together with all of its subsidiaries, the Voting
Trust of Loving Enterprises, Inc. dated as of November 21, 2002, and James J.
Coleman, Jr., Thomas B. Coleman, Peter D. Coleman and Dian C. Winingder dated
April 14, 2006 (or any successor voting trust) (the "Shareholders' Agreement")
shall govern. The fact that these Bylaws and the Shareholders' Agreement refer
to "Shareholders" rather than "Stockholders" shall not have any effect on their
interpretation.
ARTICLE II
STOCK CERTIFICATES
The shares of the corporation may be represented by a certificate or may
be uncertificated. Certificates shall be signed by (a) (i) the chairman or
vice-chairman of the board of directors, or (ii) the president or
vice-president, and (b) (i) the treasurer or an assistant treasurer, or (ii) the
secretary or assistant secretary of the corporation. The board of directors may
direct a new certificate or certificates or uncertificated shares to be issued
in place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate or
certificates or uncertificated shares, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim
B-1
that may be made against the corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
ARTICLE III
GENERAL PROVISIONS
Section 1. Fiscal Year. The fiscal year of the corporation shall be fixed by
resolution of the board of directors, but in the absence of resolution, the
corporation's fiscal year shall end on December 31.
Section 2. Seal. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE IV
AMENDMENTS
The Bylaws may be amended according to the terms of the Shareholders'
Agreement.
B-2
EXHIBIT C
SHAREHOLDERS' AGREEMENT
JOINDER
The undersigned is executing and delivering this Joinder pursuant to the
Shareholders' Agreement dated as of __________, 2006 (as the same may hereafter
be amended, the "Shareholders Agreement"), among _____________________, and the
other persons named as parties therein from time to time.
By executing and delivering to the Company this Joinder, the undersigned
hereby agrees to become a party to, to be bound by, and to comply with the
provisions of the Shareholders' Agreement as a Shareholder in the same manner as
if the undersigned were the original signatory to the Shareholders' Agreement
who owned the shares being acquired by the undersigned.
Accordingly, the undersigned has executed and delivered this Joinder as of
the ___ day of _______, 20__.
[Shareholder]
By: ____________________
Name: ____________________
Its: ____________________