Exhibit 10.13

 

EXECUTION COPY

 

TRANSACTION FEE AGREEMENT

TRANSACTION FEE AGREEMENT, dated as of October 20, 2004, by and among Edgen
Corporation, a Nevada corporation (the “Company”), Jed DiPaolo (“DiPaolo”), John
B. Elstrott (“Elstrott”), Edgar Hotard (“Hotard”), Dan O’Leary (“O’Leary”) and
David L. Laxton, III (“Laxton”).

W I T N E S S E T H:

WHEREAS, the Company and its subsidiaries (the “Subsidiaries”) are in the
business of supplying and distributing prime carbon and alloy steel pipe to the
energy, process and fabrication industries;

WHEREAS, the Company is evaluating possible transactions pursuant to which one
or more third parties would acquire, either directly or through a subsidiary,
substantially all of the assets or alternatively, all of the issued and
outstanding capital shares of the Company and/or its Subsidiaries (a “Sale”);

WHEREAS, each of DiPaolo, Elstrott and Hotard serves as a director of the
Company (collectively, the “Directors”);

WHEREAS, O’Leary serves as President and Chief Executive Officer of the Company
and Edgen Louisiana Corporation, a Louisiana corporation and a wholly-owned
subsidiary of the Company (“Edgen Louisiana”), and Laxton serves as Chief
Financial Officer and Senior Vice, President of the Company and Edgen Louisiana
(collectively, the “Executives”);

WHEREAS, the Company desires that each of the Directors continue his
directorship arrangement with the Company until the consummation of the Sale;

WHEREAS, the Company desires that each of the Executives continue his employment
with the Company and Edgen Louisiana until the consummation of the Sale;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, hereto, intending to be legally bound hereby,
agree as follows:

1.             Effective Date.  This Agreement shall be effective as of the date
first above written (the “Effective Date”),

2.             Compensation.  Concurrent with the closing of (i) a stock sale,
merger, joint venture formation or other business combination or
recapitalization of the Company or its Subsidiaries in connection with which
control of the Company or its Subsidiaries, as the case may be, is assumed by
one or more unaffiliated third parties (collectively, a “Business Combination”),
or (ii) a sale of all or substantially all of the Company’s or its Subsidiaries’
assets (an “Asset Sale”, and, together with a Business Combination, a
“Transaction”), the

 

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Company will pay to the Directors, Executives and certain other individuals an
aggregate amount equal to 2% of the Transaction Amount (the “Transaction Fee”).

(a)           Concurrent with, and as a condition to, the closing of a
Transaction, the Company will pay to each Director, in consideration of such
Director’s continued services as a director of the Company until the
consummation of a Transaction, a fee in an amount set forth opposite such
Director’s name on Schedule A attached hereto (the “Director Transaction Fee”).

(b)           Concurrent with, and as a condition to, the closing of a
Transaction, the Company will pay to each Executive, in consideration of such
Executive’s continued employment with the Company and with Edgen Louisiana until
the consummation of a Transaction, a fee in an amount equal to the percentage
set forth opposite such Executive’s name on Schedule A attached hereto of the
Transaction Fee (the “Executive Transaction Fee”).

(c)           The balance of the Transaction Fee shall be paid to certain
individuals at the discretion of, and by the mutual agreement of, Ira Kleinman
and O’Leary.

(d)           “Transaction Amount” as used herein, is defined as the total
consideration paid or contributed for the assets, or existing and any newly
issued stock of the Company or any of its Subsidiaries, and shall include
amounts paid in cash, notes, property, stock or other evidences of indebtedness
or securities.  Any securities that form part or all of the Transaction Amount
will be valued at the quoted public market price or, in the absence of a quoted
market price, the fair value thereof.  If part of the consideration paid or
contributed in a Business Combination or Asset Sale shall be payable in
installments or shall be contingent, then the amount, if any, of the Transaction
Fee shall be payable in the proportionate amounts and at the same time as such
installments or contingent payments are made.  In the event of a
recapitalization, Transaction Amount shall equal the value of cash, notes,
property and securities distributed to the Company’s stockholders. The
Transaction Fee will be payable so long as a Transaction is consummated.

3.             Term.  The term of this Agreement shall commence on the date
hereof and shall terminate upon March 31, 2005 (the “Term”).

4.             Assignment.  Neither the Executive nor the Company may assign
this Agreement or any of their respective rights or obligations hereunder,
except that either of them may assign or transfer this Agreement to any other
person who or which acquires all or substantially all of their respective
property, business and assets.

5.             Severability.  The invalidity or unenforceability of any
provision of this Agreement shall, not in any manner or way affect any other
provision hereof; and this Agreement shall be construed, if possible, as if
amended to conform to legal requirement, failing which it shall be construed as
if any such offending provision were omitted.

6.             Governing Law.  This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
without giving effect to the conflicts of law principles there of.

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7.             Entire Agreement.  This Agreement constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof.

8.             Binding Nature.  Subject to the restrictions on assignability
contained herein, each and all of the covenants, terms, conditions, provisions
and agreements herein contained shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors, heirs and permitted
assigns.

9.             Amendment, etc.  The provisions of this Agreement may not be
amended, waived, modified or changed except by an instrument in writing signed
by all of the parties hereto.  No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition, whether or like or different nature.

10.           Counterparts.  This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which, when taken
together, shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their representatives thereinto duly authorized on the date first above
written.

EDGEN CORPORATION

 

 

 

By:

 

/s/ Ira Kleinman

Name:

 

 

Title:

 

 

 

 

/s/ Jed DiPaolo

 

 

Jed DiPaolo

 

 

 

 

 

/s/ John B. Elsrott

 

 

John B. Elsrott

 

 

 

 

 

/s/ Edgar Hotard

 

 

Edgar Hotard

 

 

 

 

 

/s/ Dan O’Leary

 

 

Dan O’Leary

 

 

 

 

 

/s/ David L. Laxton

 

 

David L. Laxton, III

 

 

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SCHEDULE A

Director

 

Director Transaction Fee Amount

Jed DiPaolo

 

The lesser of $50,000 and 8.33% of the Transaction Fee

John B. Elsrott

 

The lesser of $50,000 and 8.33% of the Transaction Fee

Edgar Hotard

 

The lesser of $50,000 and 8.33% of the Transaction Pee

 

 

 

Executive

 

Executive Transaction Fee Amount Multiplier

Dan O’Leary

 

50%

David L. Laxton III

 

25%

 

 

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