EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
XXXXXX XXXXXXX INTERNATIONAL INC.
and
HALTER MARINE GROUP, INC.
Dated as of June 1, 1999
TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER
SECTION 1.01. The Merger 2
SECTION 1.02. Effective Time 2
SECTION 1.03. Effect of the Merger 2
SECTION 1.04. Certificate of Incorporation; By-laws 3
SECTION 1.05. Boards, Committees and Officers of Xxxxxx Xxxxxxx 3
ARTICLE II CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities 4
SECTION 2.02. Exchange of Certificates 5
SECTION 2.03. Stock Transfer Books 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF HALTER MARINE
SECTION 3.01. Organization and Qualification; Subsidiaries 10
SECTION 3.02. Capitalization 10
SECTION 3.03. Authority Relative to This Agreement 12
SECTION 3.04. No Conflict; Required Filings and Consents 12
SECTION 3.05. Permits; Compliance 14
SECTION 3.06. SEC Filings; Financial Statements 14
SECTION 3.07. Absence of Certain Changes or Events 15
SECTION 3.08. Employee Benefit Plans; Labor Matters 15
SECTION 3.09. Contracts; Debt Instruments 18
SECTION 3.10. Litigation 19
SECTION 3.11. Environmental Matters 19
SECTION 3.12. Trademarks, Patents and Copyrights 20
SECTION 3.13. Taxes 21
SECTION 3.14. Opinion of Financial Advisor 23
SECTION 3.15. Vote Required 23
SECTION 3.16. Brokers 23
SECTION 3.17. Insurance 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF XXXXXX XXXXXXX
SECTION 4.01. Organization and Qualification; Subsidiaries 24
SECTION 4.02. Capitalization 25
SECTION 4.03. Authority Relative to This Agreement 26
SECTION 4.04. No Conflict; Required Filings and Consents 27
SECTION 4.05. Permits; Compliance 28
SECTION 4.06. SEC Filings; Financial Statements 28
SECTION 4.07. Absence of Certain Changes or Events 29
SECTION 4.08. Employee Benefit Plans; Labor Matters 29
SECTION 4.09. Contracts; Debt Instruments 31
SECTION 4.10. Litigation 32
SECTION 4.11. Environmental Matters 33
SECTION 4.12. Trademarks, Patents and Copyrights 33
SECTION 4.13. Taxes 34
SECTION 4.14. Opinion of Financial Advisor 35
SECTION 4.15. Vote Required 35
SECTION 4.16. Brokers 35
SECTION 4.17. Insurance 36
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 5.01. Conduct of Business by Halter Marine Pending
the Closing 36
SECTION 5.02. Conduct of Business by Xxxxxx Xxxxxxx Pending
the Closing 39
SECTION 5.03. Cooperation 42
SECTION 5.04. Notices of Certain Events 42
SECTION 5.05. Contractual Consents 42
SECTION 5.06. Rights Agreements 43
SECTION 5.07. Affiliate Letters 43
ARTICLE VI ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement; Proxy Statement 43
SECTION 6.02. Stockholders' Meetings 45
SECTION 6.03. Access to Information; Confidentiality 45
SECTION 6.04. No Solicitation by Halter Marine 46
SECTION 6.05. No Solicitation by Xxxxxx Xxxxxxx 48
SECTION 6.06. Reasonable Efforts 49
SECTION 6.07. Stock Options and Other Stock Awards; Employee
Benefit Plans 51
SECTION 6.08. Letters of Accountants 53
SECTION 6.09. Update Disclosure; Breaches 53
SECTION 6.10. Public Announcements 54
SECTION 6.11. NYSE Listing 54
SECTION 6.12. Indemnification of Directors and Officers 54
SECTION 6.13. Plan of Reorganization 56
SECTION 6.14. Headquarters; Name 56
ARTICLE VII CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party Under
This Agreement 56
SECTION 7.02. Additional Conditions to Obligations of
Xxxxxx Xxxxxxx 58
SECTION 7.03. Additional Conditions to Obligations of
Halter Marine 59
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination 60
SECTION 8.02. Effect of Termination 62
SECTION 8.03. Amendment 62
SECTION 8.04. Waiver 62
SECTION 8.05. Fees 63
ARTICLE IX GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations and Warranties 65
SECTION 9.02. Notices 65
SECTION 9.03. Certain Definitions 66
SECTION 9.04. Headings 67
SECTION 9.05. Severability 67
SECTION 9.06. Entire Agreement 67
SECTION 9.07. Assignment 68
SECTION 9.08. Parties in Interest 68
SECTION 9.09. Mutual Drafting 68
SECTION 9.10. Governing Law 68
SECTION 9.11. Counterparts 68
EXHIBIT 1 FORM OF HALTER MARINE CEO EMPLOYMENT AGREEMENT
EXHIBIT 2 FORM OF HALTER MARINE CFO EMPLOYMENT AGREEMENT
EXHIBIT 3 FORM OF XXXXXX XXXXXXX CEO EMPLOYMENT AGREEMENT
EXHIBIT 4 FORM OF XXXXXX XXXXXXX EVP EMPLOYMENT AGREEMENT
EXHIBIT 5 FORM OF VOTING AND PROXY AGREEMENT
EXHIBIT 6 FORM OF STOCKHOLDER'S AGREEMENT (JLH)
EXHIBIT 7 BOARD, COMMITTEES AND OFFICERS OF XXXXXX XXXXXXX
EXHIBIT 8 FORM OF AFFILIATE LETTER
EXHIBIT 9 FORM OF XXXXXX XXXXXXX EVP - SHIPYARD OPERATIONS EMPLOYMENT AGREEMENT
EXHIBIT 10 FORM OF XXXXXX XXXXXXX OFFSHORE, INC. PRESIDENT EMPLOYMENT AGREEMENT
EXHIBIT 11 FORM OF X. XXXXXXXX EMPLOYMENT AGREEMENT
EXHIBIT 12 FORM OF X. XXXXXXX EMPLOYMENT AGREEMENT
EXHIBIT 13 FORM OF X. XXXXXX EMPLOYMENT AGREEMENT
EXHIBIT 14 FORM OF X. XXXXXX EMPLOYMENT AGREEMENT
EXHIBIT 15 FORM OF X. XXXXXXXXXXX EMPLOYMENT AGREEMENT
EXHIBIT 16 FORM OF X. XXXXXX EMPLOYMENT AGREEMENT
EXHIBIT 17 FORM OF X. XXXXXXX EMPLOYMENT AGREEMENT
EXHIBIT 18 FORM OF STOCKHOLDER'S AGREEMENT (RWS)
EXHIBIT 19 FORM OF XXXXXX XXXXXXX OPTION AGREEMENT FOR MESSRS DANE AND XXXX
Index of Defined Terms
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Section
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affiliate Section 9.03(a)
Agreement Preamble
Amex Section 3.04(b)
Articles of Merger Section 1.02
beneficial owner Section 9.03(b)
Blue Sky Laws Section 3.04(b)
Board Size Increase Section 4.03
Business Day Section 9.03(c)
CERCLA Section 3.11
Certificate of Merger Section 1.02
Certificates Section 2.02(b)
Code Preamble
Confidentiality Agreement Section 6.03(b)
contract Section 3.09
control Section 9.03(d)
Convertible Notes Section 3.02
DGCL Preamble
DLJ Section 3.14
Effective Time Section 1.02
Environmental Laws Section 3.11
Environmental Permits Section 3.11
ERISA Section 3.08(a)
Excess Shares Section 2.02(e)(ii)
Exchange Act Section 3.04(b)
Exchange Agent Section 2.02(a)
Exchange Fund Section 2.02(a)
Exchange Ratio Section 2.01(a)
Xxxxxx Xxxxxxx Preamble
Xxxxxx Xxxxxxx Acquisition Agreement Section 6.05(b)
Xxxxxx Xxxxxxx Benefit Plans Section 4.08(a)
Xxxxxx Xxxxxxx Common Stock Section 2.01(a)
Xxxxxx Xxxxxxx Disclosure Schedule Article IV Preamble
Xxxxxx Xxxxxxx Indemnified Parties Section 6.12(d)
Xxxxxx Xxxxxxx Material Adverse Effect Section 4.01
Xxxxxx Xxxxxxx Material Contract Section 4.09
Xxxxxx Xxxxxxx Meeting Section 6.02
Xxxxxx Xxxxxxx Notice Section 6.05(a)
Xxxxxx Xxxxxxx Out-of-Pocket Expenses Section 8.05(b)
Xxxxxx Xxxxxxx Permits Section 4.05
Xxxxxx Xxxxxxx Preferred Stock Section 4.02
Xxxxxx Xxxxxxx Preferred Stock Rights Section 4.02
Xxxxxx Xxxxxxx Rights Agreement Section 4.02
Xxxxxx Xxxxxxx SEC Filings Section 4.06(a)
Xxxxxx Xxxxxxx Stock Options Plans Section 4.02
Xxxxxx Xxxxxxx Stockholder Approval Section 4.03
Xxxxxx Xxxxxxx Subsidiaries Section 4.01
Xxxxxx Xxxxxxx Superior Proposal Section 6.05(b)
Xxxxxx Xxxxxxx Takeover Proposal Section 6.05(a)
GAAP Section 3.06(b)
Governmental Entity Section 3.04(b)
Halter Marine Preamble
Halter Marine Acquisition Agreement Section 6.04(b)
Halter Marine Benefit Plans Section 3.08(a)
Halter Marine By-laws Section 3.04(a)
Halter Marine Certificate Section 3.04(a)
Halter Marine Change in Control Arrangements Section 3.08(e)
Halter Marine Common Stock Section 2.01(a)
Halter Marine Disclosure Schedule Article III Preamble
Halter Marine Indemnified Parties Section 6.12(b)
Halter Marine Indenture Section 3.04(a)
Halter Marine Material Adverse Effect Section 3.01
Halter Marine Material Contract Section 3.09
Halter Marine Meeting Section 6.02
Halter Marine Notice Section 6.04(a)
Halter Marine Option Section 6.07(a)
Halter Marine Out-of-Pocket Expenses Section 8.05(c)
Halter Marine Permits Section 3.05
Halter Marine Preferred Stock Section 3.02
Halter Marine Preferred Stock Rights Section 3.02
Halter Marine Rights Agreement Section 3.02
Halter Marine SEC Filings Section 3.06(a)
Halter Marine Stockholder Approval Section 3.03
Halter Marine Superior Proposal Section 6.04(b)
Halter Marine Takeover Proposal Section 6.04(a)
Halter Marine Subsidiaries Section 3.01
Halter Marine 1996 Plan Section 6.07(a)
Hazardous Materials Section 3.11
HSR Act Section 3.04(b)
IRS Section 3.08(a)
Jefferies Section 4.14
knowledge Section 9.03(e)
Law Section 3.04(a)
MBCA Preamble
Merger Preamble
Name Change Preamble
NYSE Section 2.02(e)(ii)
Order Section 6.06(a)(ii)
person Section 9.03(f)
plan of reorganization Section 6.13
Proprietary Rights Section 3.12
Proxy Statement Section 6.01(a)
Real Estate Transfer Taxes Section 8.05(a)
Registration Statement Section 6.01(a)
Replacement Plans Section 6.07(b)
Representatives Section 6.03(a)
Securities Act Section 3.04(b)
Stock Option Plan Amendment Section 4.03
Stockholder's Agreement Preamble
Stockholders' Meetings Section 6.02
subsidiary or subsidiaries Section 9.03(g)
Surviving Corporation Section 1.01
Taxes Section 3.13(a)
Termination Fee Section 8.05(b)
5% Stockholder Section 3.13(j)
AGREEMENT AND PLAN OF MERGER, dated as of June 1, 1999 (this
"Agreement"), between XXXXXX XXXXXXX INTERNATIONAL INC., a Mississippi
corporation ("Xxxxxx Xxxxxxx"), and HALTER MARINE GROUP, INC., a Delaware
corporation ("Halter Marine").
WHEREAS, the Boards of Directors of Xxxxxx Xxxxxxx and Halter Marine
have determined that it is consistent with and in furtherance of their
respective long-term business strategies and fair to and in the best interests
of their respective companies and stockholders to combine their respective
businesses in a "merger of equals" transaction to be effected as set forth in
this Agreement;
WHEREAS, to effect such merger of equals transaction, upon the terms
and subject to the conditions of this Agreement and in accordance with the
general Corporation Law of the State of Delaware (the "DGCL") and the
Mississippi Business Corporation Act (the "MBCA"), Halter Marine will merge with
and into Xxxxxx Xxxxxxx (the "Merger");
WHEREAS, the Board of Directors of Xxxxxx Xxxxxxx (i) has determined
that the Merger is in the best interests of Xxxxxx Xxxxxxx and its stockholders
and approved and adopted this Agreement and the transactions contemplated hereby
and (ii) has recommended that the stockholders of Xxxxxx Xxxxxxx approve the
Merger;
WHEREAS, the Board of Directors of Halter Marine (i) has determined
that the Merger is in the best interests of Halter Marine and its stockholders
and has approved, adopted and declared the advisability of this Agreement and
the transactions contemplated hereby and (ii) has recommended adoption of this
Agreement and approval of the Merger by the stockholders of Halter Marine;
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a tax-free reorganization under the provisions of
section 368(a) of the United States Internal Revenue Code of 1986, as amended
(the "Code");
WHEREAS, concurrently with the execution and delivery of this
Agreement, Xxxxxx Xxxxxxx is entering into Employment Agreements with Halter
Marine's Chief Executive Officer, Chief Financial Officer and Xxxxxx Xxxxxxx'x
Chief Executive Officer and Executive Vice President, in the forms attached
hereto as Exhibits 1, 2, 3 and 4 respectively, which Employment Agreements shall
become effective upon consummation of the Merger;
WHEREAS, concurrently with the execution and delivery of this
Agreement, X.X. Xxxxxxxx and Halter Marine are entering into a Voting and Proxy
Agreement in the form attached hereto as Exhibit 5 (the "Voting Agreement");
WHEREAS, concurrently with the execution and delivery of this
Agreement, Xxxxxx Xxxxxxx and X.X. Xxxxxxxx are entering into a Stockholder's
Agreement (the "Stockholder's Agreement") in the form attached hereto as Exhibit
6, which Stockholder's Agreement shall become effective upon consummation of the
Merger;
WHEREAS, concurrently with the execution and delivery of this
Agreement, Xxxxxx Xxxxxxx Offshore, Inc. is entering into Employment Agreements
with certain key employees of Xxxxxx Xxxxxxx, in the forms attached hereto as
Exhibits 9 through 17, respectively, which Employment Agreements shall become
effective upon consummation of the Merger; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, Xxxxxx Xxxxxxx Offshore, Inc. is entering into a Stockholders
Agreement with Xxxxxx X. Xxxxxxx, in the form attached hereto as Exhibit 18,
which agreement shall become effective upon consummation of the Merger.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the DGCL and the
MBCA, at the Effective Time (as defined below), Halter Marine shall be merged
with and into Xxxxxx Xxxxxxx. As a result of the Merger, the separate corporate
existence of Halter Marine shall cease and Xxxxxx Xxxxxxx shall continue as the
surviving corporation of the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time. No later than three business days
after the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by (i)
filing a certificate of merger (the "Certificate of Merger") with the Secretary
of State of the State of Delaware, in such form as required by, and executed in
accordance with the relevant provisions of, the DGCL and (ii) filing articles of
merger (the "Articles of Merger") with the Secretary of State of the State of
Mississippi, in such form as required by, and executed in accordance with the
relevant provisions of, the MBCA (the date and time of such filings, or if
another date and time is specified in such filings, such specified date and
time, being the "Effective Time").
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of the
DGCL and the MBCA. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of Halter Marine and Xxxxxx
Xxxxxxx shall vest in the Surviving Corporation, and all debts, liabilities and
duties of Halter Marine and Xxxxxx Xxxxxxx shall become the debts, liabilities
and duties of the Surviving Corporation.
SECTION 1.04. Certificate of Incorporation; By-laws. At the
Effective Time, the Articles of Incorporation and the By-laws of Xxxxxx Xxxxxxx,
as in effect immediately prior to the Effective Time, shall be the Certificate
of Incorporation and the By-laws of the Surviving Corporation except that,
effective as of the Effective Time, the Articles of Incorporation of Xxxxxx
Xxxxxxx shall be amended, (i) without any action to be taken by any of Xxxxxx
Xxxxxxx or Halter Marine, to provide that the name of the Surviving Corporation
set forth therein shall be "Xxxxxx Xxxxxxx Halter, Inc." and (ii) as provided in
Section 6.12(a) hereof.
SECTION 1.05. Boards, Committees and Officers of Xxxxxx Xxxxxxx. (a)
Xxxxxx Xxxxxxx shall use its best efforts to (i) establish the size of the Board
of Directors as of the Effective Time at eleven (11) directors, (ii) cause the
Board of Directors of Xxxxxx Xxxxxxx as of the Effective Time to be comprised of
X.X. Xxxxxxxx, five (5) other persons who are members of the Board of Directors
of Xxxxxx Xxxxxxx as of the date of this Agreement as designated by Xxxxxx
Xxxxxxx prior to the date of the mailing of the proxy statement related to the
Merger, Xxxx Xxxx and four (4) other persons who are members of the Board of
Directors of Halter Marine as of the date of this Agreement as designated by
Halter Marine prior to the date of the mailing of the proxy statement related to
the Merger, (iii) cause the Compensation Committee of Xxxxxx Xxxxxxx as of the
Effective Time to be comprised of two (2) persons who are members of the Board
of Directors of Halter Marine as of the date of this Agreement as designated by
Halter Marine prior to the date of the mailing of the proxy statement related to
the Merger and one (1) person who is a member of the Board of Directors of
Xxxxxx Xxxxxxx as of the date of this Agreement as designated by Xxxxxx Xxxxxxx
prior to the date of the mailing of the proxy statement related to the Merger,
(iv) cause the Audit Committee of Xxxxxx Xxxxxxx as of the Effective Time to be
comprised of three (3) persons who are members of the Board of Directors of
Xxxxxx Xxxxxxx as of the date of this Agreement as designated by Xxxxxx Xxxxxxx
prior to the date of the mailing of the proxy statement related to the Merger
and two (2) persons who are members of the Board of Directors of Halter Marine
as of the date of this Agreement as designated by Halter Marine prior to the
date of the mailing of the proxy statement related to the Merger, (v) cause the
Nominating Committee of Xxxxxx Xxxxxxx as of the Effective Time to be comprised
of X.X. Xxxxxxxx, Xxxx Xxxx III, two (2) persons who are members of the Board of
Directors of Xxxxxx Xxxxxxx as of the date of this Agreement as designated by
Xxxxxx Xxxxxxx prior to the date of the mailing of the proxy statement related
to the Merger and two (2) persons who are members of the Board of Directors of
Halter Marine as of the date of this Agreement as designated by Halter Marine
prior to the date of the mailing of the proxy statement related to the Merger
and (vi) cause the officers of Xxxxxx Xxxxxxx to be as set forth on Exhibit 7
hereto, in each case until the earlier of the resignation or removal of any such
individual or until their respective successors are duly elected and qualified,
as the case may be, it being agreed that if any director shall be unable to
serve as a director (including as a member or chairperson of any committee) at
the Effective Time the party which designated such individual as set forth above
shall designate another individual to serve in such individual's place and the
Company shall use its best efforts and cause such person to be elected or
appointed to such position. If any officer set forth on Exhibit 7 ceases to be
a full-time employee of either Halter Marine or Xxxxxx Xxxxxxx at or before the
Effective Time, the parties will agree upon another person to serve in such
person's stead.
(b) It is the intention of the parties that promptly following the
Effective Time, the Board of Directors of Xxxxxx Xxxxxxx will establish itself
as a classified board as contemplated by the Articles of Incorporation of Xxxxxx
Xxxxxxx.
ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Xxxxxx Xxxxxxx,
Halter Marine or the holders of any of the following securities:
(a) Each share of common stock, par value $0.01 per share, of Halter
Marine (the "Halter Marine Common Stock") issued and outstanding
immediately prior to the Effective Time (other than any shares of Halter
Marine Common Stock to be cancelled pursuant to Section 2.01(b)) shall be
converted, subject to Section 2.02(e), into the right to receive 0.4614
shares of common stock, par value $0.01 per share ("Xxxxxx Xxxxxxx Common
Stock"), of Xxxxxx Xxxxxxx (the "Exchange Ratio") including the
corresponding percentage of a right to purchase shares of Xxxxxx Xxxxxxx
Preferred Stock pursuant to the Xxxxxx Xxxxxxx Rights Agreement (as such
terms are hereinafter defined); provided, however, that in any event, if
between the date of this Agreement and the Effective Time the outstanding
shares of Xxxxxx Xxxxxxx Common Stock or Halter Marine Common Stock shall
have been changed into a different number of shares or a different class by
reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Exchange
Ratio shall be correspondingly adjusted to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, combination or
exchange of shares. All such shares of Halter Marine Common Stock shall no
longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each certificate previously representing any such
shares shall thereafter represent the right to receive a certificate
representing the shares of Xxxxxx Xxxxxxx Common Stock into which such
Halter Marine Common Stock was converted in the Merger. Certificates
previously representing shares of Halter Marine Common Stock shall be
exchanged for certificates representing whole shares of Xxxxxx Xxxxxxx
Common Stock issued in consideration therefor upon the surrender of such
certificates, in accordance with the provisions of Section 2.02, without
interest. No fractional share of Xxxxxx Xxxxxxx Common Stock shall be
issued, and, in lieu thereof, a cash payment shall be made pursuant to
Section 2.02(e) hereof.
(b) Each share of Halter Marine Common Stock held in the treasury of
Halter Marine and each share of Halter Marine Common Stock owned by Xxxxxx
Xxxxxxx or any direct or indirect wholly owned subsidiary of Xxxxxx Xxxxxxx
or of Halter Marine immediately prior to the Effective Time shall be
cancelled and
extinguished without any conversion thereof and no payment shall be made
with respect thereto.
(c) Each share of Xxxxxx Xxxxxxx Common Stock outstanding immediately
prior to the Effective Time shall remain outstanding.
SECTION 2.02. Exchange of Certificates. (a) Exchange Agent. Prior
to the Effective Time, Xxxxxx Xxxxxxx shall deposit or shall cause to be
deposited with a bank or trust company designated by Xxxxxx Xxxxxxx and
reasonably satisfactory to Halter Marine (the "Exchange Agent"), for the
benefit of the holders of shares of Halter Marine Common Stock for exchange
in accordance with this Article II through the Exchange Agent, certificates
representing the shares of Xxxxxx Xxxxxxx Common Stock (such certificates
for shares of Xxxxxx Xxxxxxx Common Stock, together with cash in lieu of
fractional shares and any dividends or distributions with respect thereto,
being hereinafter referred to as the "Exchange Fund") issuable pursuant to
Section 2.01 in exchange for outstanding shares of Halter Marine Common
Stock. The Exchange Agent shall pursuant to irrevocable instructions
deliver the Xxxxxx Xxxxxxx Common Stock contemplated to be issued pursuant
to Section 2.01 out of the Exchange Fund. Except as contemplated by Section
2.02(e) hereof, the Exchange Fund shall not be used for any other purpose.
(b) Exchange Procedures. Promptly after the Effective Time, Xxxxxx
Xxxxxxx shall instruct the Exchange Agent to mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time
represented outstanding shares of Halter Marine Common Stock (the
"Certificates") (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall pass,
only upon proper delivery of the Certificates to the Exchange Agent and shall be
in customary form) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing shares of Xxxxxx
Xxxxxxx Common Stock. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed, and such
other documents as may be required pursuant to such instructions, the holder of
such Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Xxxxxx Xxxxxxx Common Stock that
such holder has the right to receive in respect of the shares of Halter Marine
Common Stock formerly represented by such Certificate (after taking into account
all shares of Halter Marine Common Stock then held by such holder), cash in lieu
of fractional shares of Xxxxxx Xxxxxxx Common Stock to which such holder is
entitled pursuant to Section 2.02(e) and any dividends or other distributions to
which such holder is entitled pursuant to Section 2.02(c), and the Certificate
so surrendered shall forthwith be cancelled. No interest will be paid or
accrued on any cash in lieu of fractional shares or on any unpaid dividends and
distributions payable to holders of Certificates. In the event of a transfer of
ownership of shares of Halter Marine Common Stock that is not registered in the
transfer records of Halter Marine, a certificate representing the proper number
of shares of Xxxxxx Xxxxxxx Common Stock may be issued to a transferee only if
the Certificate representing such shares of Halter Marine Common Stock is
properly endorsed and is presented to the Exchange Agent accompanied by all
documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
2.02, each Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the certificate
representing shares of Xxxxxx Xxxxxxx Common Stock, cash in lieu of any
fractional shares of Xxxxxx Xxxxxxx Common Stock to which such holder is
entitled pursuant to Section 2.02(e) and any dividends or other distributions to
which such holder is entitled pursuant to Section 2.02(c).
(c) Distributions with Respect to Unexchanged Shares of Xxxxxx Xxxxxxx
Common Stock. No dividends or other distributions declared or made after the
Effective Time with respect to Xxxxxx Xxxxxxx Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Xxxxxx Xxxxxxx Common Stock
represented thereby, and no cash payment in lieu of fractional shares shall be
paid to any such holder pursuant to Section 2.02(e), until the holder of such
Certificate shall surrender such Certificate. Subject to the effect of escheat,
tax or other applicable Laws (as defined below), following surrender of any such
Certificate, there shall be paid to the holder of the certificates representing
whole shares of Xxxxxx Xxxxxxx Common Stock issued in exchange therefor, without
interest, (i) promptly, the amount of any cash payable with respect to a
fractional share of Xxxxxx Xxxxxxx Common Stock to which such holder is entitled
pursuant to Section 2.02(e) and the amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to
such whole shares of Xxxxxx Xxxxxxx Common Stock and (ii) at the appropriate
payment date, the amount of dividends or other distributions, with a record date
after the Effective Time but prior to surrender and a payment date occurring
after surrender, payable with respect to such whole shares of Xxxxxx Xxxxxxx
Common Stock; provided, however, that any amounts remaining unclaimed by holders
of shares of Halter Marine Stock two years after the Effective Time (or such
earlier date immediately prior to such time as such amounts would otherwise
escheat to or become property of any governmental entity) shall, to the extent
permitted by applicable law, become the property of Xxxxxx Xxxxxxx, free and
clear of any claims or interest of any person previously entitled thereto.
(d) No Further Rights in Halter Marine Common Stock. All shares of
Xxxxxx Xxxxxxx Common Stock issued upon conversion of the shares of Halter
Marine Common Stock in accordance with the terms hereof (including any cash paid
pursuant to Section 2.02(c) or (e)) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Halter Marine Common
Stock.
(e) No Fractional Shares. (i) No certificates or scrip representing
fractional shares of Xxxxxx Xxxxxxx Common Stock shall be issued upon the
surrender for exchange of Certificates, no dividend or distribution with respect
to Xxxxxx Xxxxxxx Common Stock shall be payable on or with respect to any
fractional share and such fractional share interests will not entitle the owner
thereof to any rights of a stockholder of Xxxxxx Xxxxxxx.
(ii) As promptly as practicable following the Effective Time, the
Exchange Agent shall determine the excess of (x) the number of full shares of
Xxxxxx Xxxxxxx Common
Stock delivered to the Exchange Agent by Xxxxxx Xxxxxxx pursuant to Section
2.02(a) over (y) the aggregate number of full shares of Xxxxxx Xxxxxxx Common
Stock to be distributed to holders of Halter Marine Common Stock pursuant to
Section 2.02(b) (such excess being herein called the "Excess Shares"). As soon
after the Effective Time as practicable, the Exchange Agent, as agent for such
holders of Xxxxxx Xxxxxxx Common Stock, shall sell the Excess Shares at then
prevailing prices on the New York Stock Exchange ("NYSE"), all in the manner
provided in paragraph (iii) of this Section 2.02(e) which sale transactions
shall be made at such times, in such manner and on such terms as the Exchange
Agent shall determine in its reasonable discretion.
(iii) The sale of the Excess Shares by the Exchange Agent shall be
executed on the NYSE through one or more member firms of the NYSE and shall be
executed in round lots to the extent practicable. Until the net proceeds of any
such sale or sales have been distributed to such holders of Halter Marine Common
Stock, the Exchange Agent will hold such proceeds in trust for such holders of
Halter Marine Common Stock as part of the Exchange Fund. Xxxxxx Xxxxxxx shall
pay all commissions, transfer taxes and other out-of-pocket transaction costs of
the Exchange Agent incurred in connection with such sale or sales of Excess
Shares. In addition, Xxxxxx Xxxxxxx shall pay the Exchange Agent's compensation
and expenses in connection with such sale or sales. The Exchange Agent shall
determine the portion of such net proceeds to which each holder of Halter Marine
Common Stock shall be entitled, if any, by multiplying the amount of the
aggregate net proceeds by a fraction the numerator of which is the amount of the
fractional share interest to which such holder of Halter Marine Common Stock is
entitled (after taking into account all shares of Halter Marine Common Stock
then held by such holder) and the denominator of which is the aggregate amount
of fractional share interests to which all holders of Certificates representing
Halter Marine Common Stock are entitled.
(iv) Notwithstanding the provisions of Section 2.02(e)(ii) and (iii),
Xxxxxx Xxxxxxx may elect at its option, exercised prior to the Effective Time,
in lieu of the issuance and sale of Excess Shares and the making of the payments
hereinabove contemplated, to pay each former holder of Halter Marine Common
Stock an amount in cash equal to the product obtained by multiplying (A) the
fractional share interest to which such former holder (after taking into account
all shares of Halter Marine Common Stock held at the Effective Time by such
holder) would otherwise be entitled by (B) the closing price for a share of
Xxxxxx Xxxxxxx Common Stock as reported on the NYSE (as reported in The Wall
Street Journal or, if not reported thereby, any other authoritative source) on
the Closing Date, and, in such case, all references herein to the cash proceeds
of the sale of the Excess Shares and similar references shall be deemed to mean
and refer to the payments calculated as set forth in this Section 2.02(e)(iv).
(v) As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of Halter Marine Common Stock with respect
to any fractional share interests, the Exchange Agent shall promptly pay such
amounts to such holders of Halter Marine Common Stock subject to and in
accordance with the terms of Section 2.02(c).
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
that remains undistributed to the holders of Halter Marine Common Stock for one
year after the Effective Time shall be delivered to Xxxxxx Xxxxxxx, upon demand,
and any holders of Halter Marine Common Stock who have not theretofore complied
with this Article II shall thereafter look only to Xxxxxx Xxxxxxx for the shares
of Xxxxxx Xxxxxxx Common Stock, any cash in lieu of fractional shares of Xxxxxx
Xxxxxxx Common Stock to which they are entitled pursuant to Section 2.02(e) and
any dividends or other distributions with respect to Xxxxxx Xxxxxxx Common Stock
to which they are entitled pursuant to Section 2.02(c), in each case, without
any interest thereon.
(g) No Liability. Neither Xxxxxx Xxxxxxx nor Halter Marine shall be
liable to any holder of shares of Halter Marine Common Stock for any such shares
of Xxxxxx Xxxxxxx Common Stock (or dividends or distributions with respect
thereto) or cash from the Exchange Fund delivered to a public official pursuant
to any abandoned property, escheat or similar Law.
(h) Lost Certificates. If any Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Xxxxxx Xxxxxxx, the posting by such person of a bond in such reasonable amount
as Xxxxxx Xxxxxxx may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Exchange Agent will issue in
exchange for such lost, stolen or destroyed Certificate the shares of Xxxxxx
Xxxxxxx Common Stock, any cash in lieu of fractional shares of Xxxxxx Xxxxxxx
Common Stock to which the holders thereof are entitled pursuant to Section
2.02(e) and any dividends or other distributions to which the holders thereof
are entitled pursuant to Section 2.02(c), in each case, without any interest
thereon.
(i) Withholding. Xxxxxx Xxxxxxx or the Exchange Agent shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of Halter Marine Common Stock such
amounts as Xxxxxx Xxxxxxx or the Exchange Agent are required to deduct and
withhold under the Code, or any provision of state, local or foreign tax law,
with respect to the making of such payment. To the extent that amounts are so
withheld by Xxxxxx Xxxxxxx or the Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the holder of
Halter Marine Common Stock in respect of whom such deduction and withholding was
made by Xxxxxx Xxxxxxx or the Exchange Agent.
(j) Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund, as directed by Xxxxxx Xxxxxxx, on a daily
basis. Any interest and other income resulting from such investments shall be
paid to Xxxxxx Xxxxxxx.
SECTION 2.03. Stock Transfer Books. At the Effective Time, the stock
transfer books of Halter Marine shall be closed and there shall be no further
registration of transfers of shares of Halter Marine Common Stock thereafter on
the records of Halter Marine. From and after the Effective Time, the holders of
certificates representing shares of Halter
Marine Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares of Halter Marine Common
Stock except as otherwise provided herein or by Law. On or after the Effective
Time, any Certificates presented to the Exchange Agent or Xxxxxx Xxxxxxx for any
reason shall be converted into the shares of Xxxxxx Xxxxxxx Common Stock, any
cash in lieu of fractional shares of Xxxxxx Xxxxxxx Common Stock to which the
holders thereof are entitled pursuant to Section 2.02(e) and any dividends or
other distributions to which the holders thereof are entitled pursuant to
Section 2.02(c).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HALTER MARINE
Except as set forth in the Disclosure Schedule delivered by Halter
Marine to Xxxxxx Xxxxxxx prior to the execution of this Agreement (the "Halter
Marine Disclosure Schedule"), which shall identify exceptions by specific
Section references, Halter Marine hereby represents and warrants to Xxxxxx
Xxxxxxx as follows:
SECTION 3.01. Organization and Qualification; Subsidiaries. Each of
Halter Marine and each subsidiary of Halter Marine (collectively, the "Halter
Marine Subsidiaries") has been duly organized and is validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Halter Marine Material Adverse Effect (as defined below).
Each of Halter Marine and the Halter Marine Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes such qualification or licensing or good standing necessary,
except for such failures to be so qualified or licensed and in good standing
that would not, individually or in the aggregate, have a Halter Marine Material
Adverse Effect. For purposes of this Agreement, "Halter Marine Material Adverse
Effect" means any change in or effect on the business of Halter Marine and the
Halter Marine Subsidiaries that is, or is reasonably likely to be, materially
adverse to the business, financial condition, results of operations or prospects
of Halter Marine and the Halter Marine Subsidiaries taken as a whole other than
any change, effect, event or occurrence relating to (i) the United States
economy in general, (ii) this Agreement or the transactions contemplated hereby
or the announcement thereof, (iii) the failure to obtain applicable regulatory
or third party consents that may be required in connection with this Agreement
or the transactions contemplated hereby, or (iv) to the offshore oil services
industry in general; provided, however, that a Halter Marine Material Adverse
Effect shall include any change in or effect on the business of Halter Marine
and the Halter Marine Subsidiaries that is, or is reasonably likely to be,
materially adverse to the business, financial condition, results of operations
or prospects of Halter Marine and the Halter Marine Subsidiaries taken as a
whole if such change or effect is significantly more adverse to Halter
Marine and the Halter Marine Subsidiaries taken as a whole than to the offshore
oil services industry in general. Section 3.01 of Halter Marine Disclosure
Schedule sets forth a complete and correct list of all of the Halter Marine
Subsidiaries. Halter Marine has made available to Xxxxxx Xxxxxxx prior to the
execution of this Agreement complete and correct copies of its certificate of
incorporation and by-laws, as amended to date.
SECTION 3.02. Capitalization. The authorized capital stock of Halter
Marine consists of (a) 150,000,000 shares of Halter Marine Common Stock and (b)
1,000,000 shares of preferred stock, par value $0.01 per share (the "Halter
Marine Preferred Stock"). As of April 30, 1999, (i) 28,856,661 shares of Halter
Marine Common Stock were issued and outstanding, all of which were validly
issued and fully paid, nonassessable and free of preemptive rights, (ii) no
shares of Halter Marine Common Stock were held in the treasury of Halter Marine
or by the Halter Marine Subsidiaries, (iii) 3,585,600 shares of Halter Marine
Common Stock were reserved for issuance upon exercise of Halter Marine Options
heretofore granted pursuant to the Halter Marine Stock Option Plans, and (iv) no
shares of Halter Marine Preferred Stock were issued or outstanding. Except for
(i) 3,268,600 Halter Marine Options, 862,656 shares of Restricted Stock and no
Stock Equivalents (as such terms are defined in the Halter Marine Stock Option
Plans) granted pursuant to the Halter Marine Stock Option Plans, (ii) the rights
(the "Halter Marine Preferred Stock Rights") issued pursuant to the Stockholder
Rights Agreement dated as of September 23, 1996 between the Company and The Bank
of New York as Rights Agent (the "Halter Marine Rights Agreement"), (iii) the
$185 million aggregate principal amount of 4 1/2% Convertible Subordinated Notes
due September 15, 2004 (the "Convertible Notes"), or (iv) agreements or
arrangements described in Section 3.02 or 3.08 of the Halter Marine Disclosure
Schedule, there are no options, warrants or other rights, agreements,
arrangements or commitments of any character to which Halter Marine or any
Halter Marine Subsidiary is a party or by which Halter Marine or any Halter
Marine Subsidiary is bound relating to the issued or unissued capital stock of
Halter Marine or any Halter Marine Subsidiary, or securities convertible into or
exchangeable for such capital stock, or obligating Halter Marine or any Halter
Marine Subsidiary to issue or sell any shares of capital stock, or securities
convertible into or exchangeable for such capital stock of, or other equity
interests in, Halter Marine or any Halter Marine Subsidiary. Since April 30,
1999, Halter Marine has not issued any shares of its capital stock, or
securities convertible into or exchangeable for such capital stock, other than
those shares of capital stock reserved for issuance as set forth in this Section
3.02 or as set forth in Section 3.02 of the Halter Marine Disclosure Schedule.
Halter Marine has previously provided Xxxxxx Xxxxxxx with a list, as of the
date hereof, of the prices at which outstanding Halter Marine Options may be
exercised under the applicable Halter Marine Stock Option Plan and the number of
Halter Marine Options outstanding at each such price. All shares of Halter
Marine Common Stock subject to issuance as aforesaid, upon issuance prior to the
Effective Time on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Except as set forth in this
Section 3.02 or Section 3.02 of Halter Marine Disclosure Schedule, there are no
outstanding contractual obligations of Halter Marine or any Halter Marine
Subsidiary (i) restricting the transfer of, (ii) affecting the voting rights of,
(iii) requiring the repurchase, redemption or disposition of, (iv) requiring the
registration
for sale of, or (v) granting any preemptive or antidilutive right with respect
to, any shares of Halter Marine Common Stock or any capital stock of any Halter
Marine Subsidiary. Each outstanding share of capital stock of each Halter Marine
Subsidiary is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights, is owned by Halter Marine or another Halter Marine
Subsidiary and is free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on Halter
Marine's or such other Halter Marine Subsidiary's voting rights, charges and
other encumbrances of any nature whatsoever, except where failure to own such
shares free and clear would not, individually or in the aggregate, have a Halter
Marine Material Adverse Effect. Except as set forth in Section 3.02 of the
Halter Marine Disclosure Schedule, there are no material outstanding contractual
obligations of Halter Marine or any Halter Marine Subsidiary to provide funds
to, or make any investment (in the form of a loan, capital contribution or
otherwise) in, any Halter Marine Subsidiary or any other person, other than
guarantees by Halter Marine of any indebtedness of any Halter Marine Subsidiary.
SECTION 3.03. Authority Relative to This Agreement. Halter Marine
has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated herein to be consummated by Halter Marine. The
execution and delivery of this Agreement by Halter Marine and the consummation
by Halter Marine of such transactions have been duly and validly authorized by
all necessary corporate action and no other corporate proceedings on the part of
Halter Marine and no other stockholder votes are necessary to authorize this
Agreement or to consummate such transactions (other than, with respect to the
Merger, the adoption of this Agreement by the affirmative vote of a majority of
the outstanding shares of Halter Marine Common Stock entitled to vote thereon
(the "Halter Marine Stockholder Approval")). The Board of Directors of Halter
Marine, at a meeting duly called and held, has (i) determined that this
Agreement, and the transactions contemplated hereby (including the Merger), are
fair to and in the best interests of the Company's stockholders, (ii) approved,
adopted and declared the advisability of this Agreement and the transactions
contemplated hereby (including the Merger), (iii) resolved to recommend approval
and adoption of this Agreement by its stockholders and (iv) directed that this
Agreement and the transactions contemplated hereby be submitted to Halter
Marine's stockholders for approval at a meeting of such stockholders. This
Agreement has been duly authorized and validly executed and delivered by Halter
Marine and constitutes the legal, valid and binding obligation of Halter Marine,
enforceable against Halter Marine in accordance with its terms. Halter Marine
has taken all appropriate actions so that the restrictions on business
combinations contained in Section 203 of the DGCL will not apply with respect to
or as a result of the Merger and the transactions contemplated by this
Agreement, without any further action on the part of the stockholders or the
Board of Directors of Halter Marine. To Halter Marine's knowledge, no other
state takeover statute is applicable to the Merger. Halter Marine has taken all
action necessary to render the Halter Marine Preferred Stock Rights issued
pursuant to the terms of the Halter Marine Rights Agreement inapplicable to, or
not exercisable as a result of, the Merger, the execution and delivery of this
Agreement or the transactions contemplated by this Agreement.
SECTION 3.04. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Halter Marine do not, and the
performance of this Agreement by Halter Marine will not, (i) assuming the Halter
Marine Stockholder Approval is obtained, conflict with or violate any provision
of Halter Marine's Certificate of Incorporation ("Halter Marine Certificate") or
Halter Marine's By-laws ("Halter Marine By-laws") or any equivalent
organizational documents of any Halter Marine Subsidiary, (ii) assuming that all
consents, approvals, authorizations and other actions described in Section
3.04(b) have been obtained and all filings described in Section 3.04(b) have
been made, conflict with or violate any foreign or domestic law, statute, code,
ordinance, rule, regulation, order, judgment, writ, stipulation, award,
injunction or decree ("Law") applicable to Halter Marine or any Halter Marine
Subsidiary or by which any property or asset of Halter Marine or any Halter
Marine Subsidiary is bound or affected or (iii) except as set forth in Section
3.04(a) of the Halter Marine Disclosure Schedule, result in any breach of, any
loss of any benefit under or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any
right of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or other encumbrance on any property or asset of Halter
Marine or any Halter Marine Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, Halter Marine Permit
(as defined in Section 3.05) or other instrument or obligation, except, with
respect to clauses (ii) and (iii), for any such conflicts, violations, breaches,
defaults or other occurrences that would neither, individually or in the
aggregate, (A) have a Halter Marine Material Adverse Effect nor (B) prevent or
materially delay the performance of this Agreement by Halter Marine. The
execution and delivery of this Agreement by Halter Marine do not, and the
performance of this Agreement by Halter Marine will not, result in any breach
of, any loss or any benefit under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Halter Marine, under the
Indenture dated as of September 15, 1997, among Halter Marine and U.S. Trust
Company of Texas, N.A., as Trustee (the "Halter Marine Indenture") relating to
the Convertible Notes or give rise to any obligation to make an offer to
purchase the Convertible Notes pursuant to the terms of the Halter Marine
Indenture.
(b) Except as set forth in Section 3.04(b) of the Halter Marine
Disclosure Schedule, the execution and delivery of this Agreement by Halter
Marine do not, and the performance of this Agreement by Halter Marine will not,
require any consent, approval, authorization or permit of or filing with or
notification to any domestic or foreign governmental, administrative, judicial
or regulatory authority ("Governmental Entity"), except (i) for applicable
requirements of the Securities Exchange Act of 1934, as amended (together with
the rules and regulations promulgated thereunder, the "Exchange Act"), the
Securities Act of 1933, as amended (together with the rules and regulations
promulgated thereunder, the "Securities Act"), state securities or "blue sky"
laws ("Blue Sky Laws"), the American Stock Exchange (the "AMEX"), premerger
notification requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR Act"),
filing and recordation of the Certificate of Merger and Articles of Merger as
required by the DGCL and MBCA, respectively, and as otherwise set forth in
Section 3.04(b) of the Halter Marine Disclosure Schedule and (ii) where failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not (A) prevent or materially delay consummation
of the Merger, (B) otherwise prevent Halter Marine from performing its material
obligations under this Agreement or (C) individually or in the aggregate, have a
Halter Marine Material Adverse Effect.
SECTION 3.05. Permits; Compliance. Each of Halter Marine and the
Halter Marine Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals, clearances and orders of any Governmental Entity
necessary for Halter Marine or any Halter Marine Subsidiary to own, lease and
operate its properties or to carry on their respective businesses substantially
in the manner described in Halter Marine SEC Filings (as defined herein) and as
it is now being conducted (the "Halter Marine Permits"), and all such Halter
Marine Permits are valid, and in full force and effect, except where the failure
to have, or the suspension or cancellation of, any of the Halter Marine Permits
would neither, individually or in the aggregate, (a) have a Halter Marine
Material Adverse Effect nor (b) prevent or materially delay the performance of
this Agreement by Halter Marine, and, as of the date of this Agreement, no
suspension or cancellation of any of the Halter Marine Permits is pending or, to
the knowledge of Halter Marine, threatened, except where the failure to have, or
the suspension or cancellation of, any
of the Halter Marine Permits would neither, individually or in the aggregate,
(x) have a Halter Marine Material Adverse Effect nor (y) prevent or materially
delay the performance of this Agreement by Halter Marine. Neither Halter Marine
nor any Halter Marine Subsidiary is in conflict with, or in default or violation
of, (i) any Law applicable to Halter Marine or any Halter Marine Subsidiary or
by which any property, asset or operation of Halter Marine or any Halter Marine
Subsidiary is bound or affected or (ii) any Halter Marine Permits, except for
any such conflicts, defaults or violations that would neither, individually or
in the aggregate, (A) have a Halter Marine Material Adverse Effect nor (B)
prevent or materially delay the performance of this Agreement by Halter Marine.
SECTION 3.06. SEC Filings; Financial Statements. (a) Halter Marine
has timely filed all registration statements, prospectuses, forms, reports and
documents required to be filed by it under the Securities Act or the Exchange
Act, as the case may be, since June 30, 1997 (collectively, the "Halter Marine
SEC Filings"). The Halter Marine SEC Filings (i) complied as to form in all
material respects with the applicable requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No Halter Marine Subsidiary is subject to the periodic reporting
requirements of the Exchange Act.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Halter Marine SEC Filings was prepared
in accordance with United States generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods indicated (except
as may be indicated in the notes thereto) and each presented fairly the
consolidated financial position of Halter Marine and the consolidated Halter
Marine Subsidiaries as of the respective dates thereof and for the respective
periods indicated therein, except as otherwise noted therein (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments that
were not and are not expected, individually or in the aggregate, to have a
Halter Marine Material Adverse Effect). The books and records of Halter Marine
and its Subsidiaries have been, and are being, maintained in accordance with
GAAP and any other applicable legal and accounting requirements.
(c) Except as and to the extent set forth on the consolidated balance
sheet of Halter Marine and the consolidated Halter Marine Subsidiaries as of
March 31, 1998 included in Halter Marine's Form 10-K for the year ended March
31, 1998, including the notes thereto, neither Halter Marine nor any Halter
Marine Subsidiary has any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) that would be required to be
reflected on a balance sheet or in notes thereto prepared in accordance with
GAAP, except for liabilities or obligations (i) disclosed in the Halter Marine
SEC Filings filed under the Securities Act or the Exchange Act prior to the date
hereof or (ii) incurred in the ordinary course of business since March 31, 1998
that would neither individually or in the aggregate (A) have a Halter Marine
Material Adverse Effect nor (B) prevent or materially delay the performance of
this Agreement by Halter Marine.
SECTION 3.07. Absence of Certain Changes or Events. Since March 31,
1998, except as contemplated by or as disclosed in this Agreement, as set forth
in Section 3.07 of the Halter Marine Disclosure Schedule or as disclosed in any
Halter Marine SEC Filing filed prior to the date of this Agreement, Halter
Marine and the Halter Marine Subsidiaries have conducted their businesses only
in the ordinary course and in a manner consistent with past practice and, since
such date, there has not been (a) any Halter Marine Material Adverse Effect or
an event or development (including in connection with the Merger) that would,
individually or in the aggregate, have a Halter Marine Material Adverse Effect,
(b) any event that could reasonably be expected to prevent or materially delay
the performance of this Agreement by Halter Marine, or (c) any action taken by
Halter Marine or any of the Halter Marine Subsidiaries during the period from
April 1, 1998 through the date of this Agreement that, if taken during the
period from the date of this Agreement through the Effective Time, would
constitute a breach of Section 5.01.
SECTION 3.08. Employee Benefit Plans; Labor Matters. (a) Section
3.08(a) of the Halter Marine Disclosure Schedule sets forth a true and complete
list as of the date hereof of each material employee benefit plan, program,
arrangement and contract (including, without limitation, any "employee benefit
plan", as defined in section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), maintained or contributed to by Halter Marine or
any Halter Marine Subsidiary, or with respect to which Halter Marine or any
Halter Marine Subsidiary could incur material liability under Section 4069,
4212(c) or 4204 of ERISA (the "Halter Marine Benefit Plans"). With respect to
each Halter Marine Benefit Plan that is a stock-based plan, Halter Marine has
heretofore delivered to Xxxxxx Xxxxxxx a true and complete copy of such Halter
Marine Benefit Plan. With respect to each other Halter Marine Benefit Plan,
Halter Marine will make available to Xxxxxx Xxxxxxx, promptly after the date
hereof, a true and complete copy of such Halter Marine Benefit Plan and (i) the
most recent annual report (Form 5500) filed with the Internal Revenue Service
(the "IRS"), if any, (ii) the most recent actuarial report or valuation (if any)
relating to any Halter Marine Benefit Plan subject to Title IV of ERISA and
(iii) the most recent determination letter, if any, issued by the IRS with
respect to any Halter Marine Benefit Plan qualified under Section 401(a) of the
Code.
(b) With respect to each Halter Marine Benefit Plan that is subject to
Title IV of ERISA, (A) no "reportable event" (within the meaning of Section 4043
of ERISA) has occurred with respect to any Halter Marine Benefit Plan for which
the 30-day notice requirement has not been waived, except where such reportable
event would not have a Halter Marine Material Adverse Effect and (B) no
condition exists that would subject Halter Marine or any Halter Marine
Subsidiary to any fine under Section 4071 of ERISA, except where such condition
would not have a Halter Marine Material Adverse Effect. No Halter Marine
Benefit Plan is a "multiemployer pension plan" (as such term is defined in
section 3(37) of ERISA).
(c) With respect to the Halter Marine Benefit Plans, no event has
occurred and, to the knowledge of Halter Marine, there exists no condition or
set of circumstances in connection with which Halter Marine or any Halter Marine
Subsidiary could be subject to any liability under the terms of such Halter
Marine Benefit Plans, ERISA, the Code or any other
applicable Law that, individually or in the aggregate, would have a Halter
Marine Material Adverse Effect. Each of the Halter Marine Benefit Plans has been
operated and administered in all material respects in accordance with applicable
laws and administrative or governmental rules and regulations, including, but
not limited to, ERISA and the Code, except where a violation of any such law,
rule or regulation would not have a Halter Marine Material Adverse Effect. Each
of the Halter Marine Benefit Plans intended to be "qualified" within the meaning
of Section 401(a) of the Code has received a favorable determination letter as
to such qualification from the IRS, and no event has occurred, either by reason
of any action or failure to act, that would cause the loss of any such
qualification, except where such loss of qualification would not have a Halter
Marine Material Adverse Effect. Except as set forth in Section 3.08(c) of the
Halter Marine Disclosure Schedule, no Halter Marine Benefit Plan provides
benefits, including, without limitation, death or medical benefits (whether or
not insured), with respect to current or former employees of Halter Marine or
any Halter Marine Subsidiary beyond their retirement or other termination of
service, other than (i) coverage mandated by applicable law, (ii) death benefits
or retirement benefits under any "employee pension plan" (as such term is
defined in Section 3(2) of ERISA), (iii) deferred compensation benefits accrued
as liabilities on the books of Halter Marine or any Halter Marine Subsidiary or
(iv) benefits the full cost of which is borne by the current or former employee
(or his beneficiary). All contributions or other amounts payable by Halter
Marine or any Halter Marine Subsidiary as of the Effective Time with respect to
each Halter Marine Benefit Plan in respect of current or prior plan years have
been paid or accrued in accordance with GAAP and Section 412 of the Code.
(d) Except as set forth in Section 3.08(d) of the Halter Marine
Disclosure Schedule, neither Halter Marine nor any Halter Marine Subsidiary is a
party to any collective bargaining or other labor union contract applicable to
persons employed by Halter Marine or any Halter Marine Subsidiary and no
collective bargaining agreement or other labor union contract is being
negotiated by Halter Marine or any Halter Marine Subsidiary that is material to
Halter Marine and the Halter Marine Subsidiaries taken as a whole. As of the
date of this Agreement, there is no material labor dispute, strike, slowdown or
work stoppage against Halter Marine or any Halter Marine Subsidiary pending or,
to the knowledge of Halter Marine, threatened that may interfere with the
respective business activities of Halter Marine or any Halter Marine Subsidiary,
except where such dispute, strike, slowdown or work stoppage would not have a
Halter Marine Material Adverse Effect. As of the date of this Agreement, to the
knowledge of Halter Marine, none of Halter Marine, any Halter Marine Subsidiary
or their respective representatives or employees has committed any unfair labor
practices in connection with the operation of the respective businesses of
Halter Marine or any Halter Marine Subsidiary, and there is no charge or
complaint against Halter Marine or any Halter Marine Subsidiary by the National
Labor Relations Board or any comparable state or foreign agency pending or, to
the knowledge of Halter Marine, threatened, except where such unfair labor
practice, charge or complaint would not have a Halter Marine Material Adverse
Effect.
(e) Halter Marine has identified in Section 3.08(e) of the Halter
Marine Disclosure Schedule and has made available to Xxxxxx Xxxxxxx true and
complete copies of (i) all
severance and employment agreements with directors, executive officers, key
employees or material consultants of Halter Marine; (ii) all severance programs
and policies of each of Halter Marine and each Halter Marine Subsidiary with or
relating to its employees; and (iii) all plans, programs, agreements and other
arrangements of each of Halter Marine and each Halter Marine Subsidiary with or
relating to its employees that contain change in control provisions (the "Halter
Marine Change in Control Arrangements"). Except as set forth in Section 3.08(e)
of the Halter Marine Disclosure Schedule, neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
(i) result in any material payment (including, without limitation, severance,
unemployment compensation, golden parachute or otherwise) becoming due to any
director or any employee of Halter Marine or any of its affiliates from Halter
Marine or any of its affiliates under any Halter Marine Benefit Plan or
otherwise, (ii) materially increase any benefits otherwise payable under any
Halter Marine Benefit Plan or (iii) result in any acceleration of the time of
payment or vesting of any material benefits.
(f) Halter Marine is currently in compliance with all applicable laws,
regulations and rules relating to the employment of labor, including those
related to wages, hours and the payment of withholding taxes and other sums
required by a governmental authority and has withheld and paid to the
appropriate government authority or is holding for payment not yet due to such
authority all amounts required to be withheld on behalf of any of Halter
Marine's employees, and is not liable for arrears of wages, taxes, penalties or
other sums for failure to comply with the foregoing.
SECTION 3.09. Contracts; Debt Instruments. Except as disclosed in or
attached as exhibits to the Halter Marine SEC Filings or as disclosed in Section
3.09(a) of Halter Marine Disclosure Schedule, neither Halter Marine nor any of
the Halter Marine Subsidiaries is a party to or bound by any contract,
arrangement, commitment or understanding (whether written or oral) (a
"contract") (i) except as set forth in Section 3.08(e) of the Halter Marine
Disclosure Schedule, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement, or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement, (ii) as of the date hereof, any vessel or
customer contract that is a "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC), that requires expenditures in excess
of $10 million or that requires annual expenditures in excess of $10 million and
is not cancelable within one year, that has not been filed or incorporated by
reference in the Halter Marine SEC Filings, (iii) that contains any material
non-compete provisions with respect to any line of business or geographic area
in which business is conducted with respect to Halter Marine or any of the
Halter Marine Subsidiaries or that restricts the conduct of any line of business
by Halter Marine or any of the Halter Marine Subsidiaries or any geographic area
in which Halter Marine or any of the Halter Marine Subsidiaries may conduct
business, in each case in any material respect, (iv) that would prohibit or
materially delay the consummation of the Merger or any of the transactions
contemplated by this Agreement, (v) that obligates Halter Marine or any of the
Halter Marine Subsidiaries to make any compensation payments or issue or pay
anything of value to any director, executive officer, key employee or
consultant, or (vi) that is
a loan, credit or similar contract. Each contract, arrangement, commitment or
understanding of the type described in this Section 3.09, whether or not set
forth in Section 3.09 of the Halter Marine Disclosure Schedule, is referred to
herein as a "Halter Marine Material Contract." Each Halter Marine Material
Contract is valid and binding on Halter Marine or any of the Halter Marine
Subsidiaries, as applicable, and in full force and effect, and Halter Marine and
each of the Halter Marine Subsidiaries have in all material respects performed
all obligations required to be performed by them to date under each Halter
Marine Material Contract, except where such noncompliance, individually or in
the aggregate, would not have a Halter Marine Material Adverse Effect. Neither
Halter Marine nor any Halter Marine Subsidiary knows of, or has received notice
of, any violation or default under (nor does there exist any condition which
with the passage of time or the giving of notice would cause such a violation of
or default under) any Halter Marine Material Contract or any other loan or
credit agreement, note, bond, mortgage, indenture or lease, or any other
contract, agreement, arrangement or understanding to which it is a party or by
which it or any of its properties or assets is bound, except for violations or
defaults that would not, individually or in the aggregate, result in a Halter
Marine Material Adverse Effect. Set forth in Section 3.09(c) of the Halter
Marine Disclosure Schedule is a description of any material changes to the
amount and terms of the indebtedness of Halter Marine and the Halter Marine
Subsidiaries from that described in the notes to the financial statements
incorporated in Halter Marine's Form 10-K for the year ended March 31, 1998.
SECTION 3.10. Litigation. Except as disclosed in the Halter Marine
SEC Filings or in Section 3.10 of the Halter Marine Disclosure Schedule, as of
the date hereof there is no suit, claim, action, proceeding or investigation
pending or, to the knowledge of Halter Marine, threatened in writing against
Halter Marine or any Halter Marine Subsidiary by or before any Governmental
Entity that (a) individually or in the aggregate, is reasonably likely to have a
Halter Marine Material Adverse Effect or (b) challenges the validity or
propriety, or seeks to prevent consummation of, the transactions contemplated by
this Agreement. Except as disclosed in the Halter Marine SEC Filings or in
Section 3.10 of the Halter Marine Disclosure Schedule, neither Halter Marine nor
any Halter Marine Subsidiary is subject to any outstanding order, writ,
injunction or decree that has had or, insofar as can be reasonably foreseen,
individually or in the aggregate, would have a Halter Marine Material Adverse
Effect.
SECTION 3.11. Environmental Matters. Except as disclosed in the
Halter Marine SEC Filings or in Section 3.11 of the Halter Marine Disclosure
Schedule or as would not, individually or in the aggregate, have a Halter Marine
Material Adverse Effect:
(a) Halter Marine and the Halter Marine Subsidiaries (i) are in
compliance with all, and are not subject to any liability pursuant to,
applicable Environmental Laws (as defined below), (ii) hold or have applied
for all Environmental Permits (as defined below) and (iii) are in
compliance with their respective Environmental Permits;
(b) neither Halter Marine nor any Halter Marine Subsidiary has
received any written notice, demand, letter, claim, request for information
or other written communication alleging that Halter Marine or any of its
Subsidiaries may be in violation of, or liable under, any Environmental
Law;
(c) neither Halter Marine nor any Halter Marine Subsidiary (i) has
entered into or agreed to any consent decree or order or is subject to any
judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation, sampling,
monitoring, treatment, remediation, removal or cleanup of Hazardous
Materials (as defined below) and, to the knowledge of Halter Marine, no
investigation, litigation or other proceeding is pending or threatened in
writing with respect thereto, or (ii) is an indemnitor in connection with
any threatened or asserted claim by any third-party indemnitee for any
liability under any Environmental Law or relating to any Hazardous
Materials; and
(d) none of the real property owned or leased by Halter Marine or any
Halter Marine Subsidiary is listed or, to the knowledge of Halter Marine,
proposed for listing on the "National Priorities List" or the Comprehensive
Environmental Response, Compensation and Liability Information Systems
under CERCLA, or any similar state or foreign list of sites requiring
investigation or cleanup, in each case as updated through the Effective
Time.
(e) No Hazardous Material has been released, discharged or disposed of
at, to or from, or transported offsite from, any property currently owned
or operated by Halter Marine or any Halter Marine Subsidiary or, during the
period of such ownership or operation, any property formerly owned or
operated by Halter Marine or any Halter Marine Subsidiary.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended as of the Effective Date.
"Environmental Laws" means any federal, state, local or foreign
statute, law, ordinance, regulation, rule, code, treaty, writ or order and
any enforceable judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree, judgment,
stipulation, injunction, permit, authorization, policy, opinion, or agency
requirement, in each case having the force and effect of law, relating to
the pollution, protection, investigation or restoration of the environment,
health and safety or natural resources, including, without limitation,
those relating to the use, handling, presence, transportation, treatment,
storage, disposal, release, threatened release or discharge of Hazardous
Materials or noise, odor, wetlands, pollution, contamination or any injury
or threat of injury to persons or property.
"Environmental Permits" means any permit, approval, identification
number, license and other authorization required under or issued pursuant
to any applicable Environmental Law.
"Hazardous Materials" means (a) any petroleum, petroleum products, by-
products or breakdown products, radioactive materials, asbestos-containing
materials or polychlorinated biphenyls or (b) any chemical, material or
other substance defined or regulated as toxic or hazardous or as a
pollutant or contaminant or waste under any applicable Environmental Law.
SECTION 3.12. Trademarks, Patents and Copyrights. Except as set
forth in Section 3.12 of the Halter Marine Disclosure Schedule, or to the extent
the inaccuracy of any of the following (or the circumstances giving rise to such
inaccuracy), individually or in the aggregate, would not have a Halter Marine
Material Adverse Effect, Halter Marine and each of the Halter Marine
Subsidiaries own or possess adequate licenses or other legal rights to use all
patents, patent rights, trademarks, trademark rights, trade names, trade dress,
trade name rights, copyrights, service marks, trade secrets, software, mailing
lists, mask works, know-how and other proprietary rights and information,
including all applications with respect thereto (collectively, "Proprietary
Rights") used or held for use in connection with the business of Halter Marine
and the Halter Marine Subsidiaries as currently conducted or as contemplated to
be conducted, and Halter Marine is unaware of any assertion or claim challenging
the
validity of any of the foregoing. The conduct of the business of Halter Marine
and the Halter Marine Subsidiaries as currently conducted and as contemplated to
be conducted did not, does not and will not infringe in any way any Proprietary
Rights of any third party that, individually or in the aggregate, could have a
Halter Marine Material Adverse Effect. To Halter Marine's knowledge, there are
no infringements of any Proprietary Rights owned by or licensed by or to Halter
Marine or any Halter Marine Subsidiary that, individually or in the aggregate,
could have a Halter Marine Material Adverse Effect.
SECTION 3.13. Taxes. (a) Except for such matters as would not have
a Halter Marine Material Adverse Effect, (i) Halter Marine and the Halter Marine
Subsidiaries have timely filed or will timely file all returns and reports
required to be filed by them with any taxing authority with respect to Taxes (as
defined below) for any period ending on or before the Effective Time, taking
into account any extension of time to file granted to or obtained on behalf of
Halter Marine and the Halter Marine Subsidiaries, (ii) all Taxes that are due
(whether or not shown to be due on such returns or reports) prior to the
Effective Time have been paid or will be paid (other than Taxes that (1) are not
yet delinquent or (2) are being contested in good faith and have not been
finally determined), (iii) as of the date hereof, no deficiency for any Tax has
been asserted or assessed by a taxing authority against Halter Marine or any of
the Halter Marine Subsidiaries, which deficiency has not been paid other than
any deficiency being contested in good faith and (iv) Halter Marine and the
Halter Marine Subsidiaries have provided adequate reserves (in accordance with
GAAP) in their financial statements for any Taxes that have not been paid,
whether or not shown as being due on any returns. As used in this Agreement,
"Taxes" shall mean any and all taxes, fees, levies, duties, tariffs, imposts and
other charges of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed by
any Governmental Entity or taxing authority, including, without limitation:
taxes or other charges on or with respect to income, franchise, windfall or
other profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation or
net worth; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value-added or gains taxes; license, registration and
documentation fees; and customs duties, tariffs and similar charges.
(b) To the best of Halter Marine's knowledge, there are no material
disputes pending, or claims asserted in writing for, Taxes or assessments upon
Halter Marine or any of its Subsidiaries, nor has Halter Marine or any of its
Subsidiaries been requested in writing to give any currently effective waivers
extending the statutory period of limitation applicable to any federal or state
income tax return for any period which disputes, claims, assessments or waivers
are reasonably likely to have a Halter Marine Material Adverse Effect.
(c) There are no Tax liens upon any property or assets of Halter
Marine or any of the Halter Marine Subsidiaries except liens for current Taxes
not yet due and except for liens that have not had and are not reasonably likely
to have a Halter Marine Material Adverse Effect.
(d) Neither Halter Marine nor any of its Subsidiaries has been
required to include
in income any adjustment pursuant to Section 481 of the Code by reason of a
voluntary change in accounting method initiated by Halter Marine or any of its
Subsidiaries, and the IRS has not initiated or proposed any such adjustment or
change in accounting method, in either case which adjustment or change has had
or is reasonably likely to have a Halter Marine Material Adverse Effect.
(e) Except as set forth in the financial statements described in
Section 3.06, neither Halter Marine nor any of its Subsidiaries has entered into
a transaction that is being accounted for under the installment method of
Section 453 of the Code, which would be reasonably likely to have a Halter
Marine Material Adverse Effect.
(f) Neither Halter Marine nor any of its Subsidiaries has made an
election under Section 341(f) of the Code.
(g) Except as set forth in Section 3.13(g) of the Halter Marine
Disclosure Schedule, neither Halter Marine nor any of the Halter Marine
Subsidiaries is a party to any agreement providing for the allocation, sharing
or indemnification of Taxes with any entity that is not, directly or indirectly,
a wholly owned corporate subsidiary of Halter Marine, other than agreements the
consequences of which are fully and adequately reserved for in the Halter Marine
and Halter Marine Subsidiaries financial statements.
(h) As of the time of the March 31, 1997 distribution of Halter Marine
stock by Trinity Industries, Inc. there had been no negotiations, agreements or
arrangements regarding the acquisition of the stock or assets of Halter Marine
by Xxxxxx Xxxxxxx or the acquisition of the stock or assets of Xxxxxx Xxxxxxx by
Halter Marine between (1) the management or the Board of Directors of Halter
Marine or Halter Marine's representatives in their capacity as such and (2) the
management or the Board of Directors of Xxxxxx Xxxxxxx or Xxxxxx Xxxxxxx'x
representatives in their capacity as such.
(i) As of the time of the March 31, 1997 distribution of Halter Marine
stock by Trinity Industries, Inc., neither the management nor the Board of
Directors of Halter Marine had a plan or intent to effect the acquisition of the
stock of Halter Marine by Xxxxxx Xxxxxxx (or anyone else) or a plan or intent to
engage in any other transaction that would have caused the Halter Marine
stockholders (as determined immediately after the March 31, 1997 distribution of
Halter Marine stock by Trinity Industries, Inc.) to fail to own Halter Marine
stock constituting "control" within the meaning of Section 368(c) of the Code.
(j) As of the time immediately after the March 31, 1997 distribution
of Halter Marine stock by Trinity Industries, Inc., the management of Halter
Marine was not aware of any plan or intention of any Halter Marine stockholder
that individually owned 5 percent or more of the stock of Halter Marine (as
determined immediately after the March 31, 1997 distribution of Halter Marine
stock by Trinity Industries, Inc.) (each such stockholder referred to as a "5%
Stockholder") to transfer Halter Marine stock after the distribution that would
have caused, individually or in aggregate with transfers by other 5%
Stockholders, the Halter Marine stockholders (as determined immediately after
the March 31, 1997 distribution
of Halter Marine stock by Trinity Industries, Inc.) to fail to own Halter Marine
stock constituting "control" within the meaning of Section 368(c) of the Code.
SECTION 3.14. Opinion of Financial Advisor. Xxxxxxxxx Xxxxxx &
Xxxxxxxx Incorporated ("DLJ") has delivered to the Board of Directors of Halter
Marine its written opinion dated as of June 1, 1999, a copy of which opinion has
been delivered to Xxxxxx Xxxxxxx, that, as of such date, the Exchange Ratio is
fair from a financial point of view to the holders of Halter Marine Common
Stock.
SECTION 3.15. Vote Required. The Halter Marine Stockholder Approval
is the only vote of the holders of any class or series of capital stock of
Halter Marine necessary to approve the Merger.
SECTION 3.16. Brokers. No broker, finder or investment banker (other
than DLJ) is entitled to any brokerage, finder's or other fee or commission in
connection with the Merger based upon arrangements made by or on behalf of
Halter Marine or any Halter Marine Subsidiary. Halter Marine has heretofore
made available to Xxxxxx Xxxxxxx a complete and correct copy of all agreements
between Halter Marine and DLJ pursuant to which such firm would be entitled to
any payment relating to the Merger.
SECTION 3.17. Insurance. Halter Marine maintains insurance coverage
with reputable insurers in such amounts and covering such risks as are in
accordance with normal industry practice for companies engaged in businesses
similar to that of Halter Marine (taking into account the cost and availability
of such insurance).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF XXXXXX XXXXXXX
Except as set forth in the Disclosure Schedule delivered by Xxxxxx
Xxxxxxx to Halter Marine prior to the execution of this Agreement (the "Xxxxxx
Xxxxxxx Disclosure Schedule"), which shall identify exceptions by specific
Section references, Xxxxxx Xxxxxxx hereby represents and warrants to Halter
Marine as follows:
SECTION 4.01. Organization and Qualification; Subsidiaries. Each of
Xxxxxx Xxxxxxx and each other subsidiary of Xxxxxx Xxxxxxx (collectively, the
"Xxxxxx Xxxxxxx Subsidiaries") has been duly organized, and is validly existing
and in good standing, under the laws of the jurisdiction of its incorporation or
organization, as the case may be, and has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so organized, existing or in good standing or to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Xxxxxx Xxxxxxx Material Adverse Effect (as defined below).
Each of Xxxxxx Xxxxxxx and the other
Xxxxxx Xxxxxxx Subsidiaries is duly qualified or licensed to do business, and is
in good standing, in each jurisdiction where the character of the properties
owned, leased or operated by it or the nature of its business makes such
qualification or licensing or good standing necessary, except for such failures
to be so qualified or licensed and in good standing that would not, individually
or in the aggregate, have a Xxxxxx Xxxxxxx Material Adverse Effect. For purposes
of this Agreement, "Xxxxxx Xxxxxxx Material Adverse Effect" means any change in
or effect on the business of Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries
that is, or is reasonably likely to be, materially adverse to the business,
financial condition, results of operations or prospects of Xxxxxx Xxxxxxx and
the Xxxxxx Xxxxxxx Subsidiaries taken as a whole other than any change, effect,
event or occurrence relating to (i) the United States economy in general, (ii)
this Agreement or the transactions contemplated hereby or the announcement
thereof, (iii) the failure to obtain applicable regulatory or third party
consents that may be required in connection with this Agreement or the
transactions contemplated hereby, or (iv) to the offshore oil services industry
in general; provided, however, that a Xxxxxx Xxxxxxx Material Adverse Effect
shall include any change in or effect on the business of Xxxxxx Xxxxxxx and the
Xxxxxx Xxxxxxx Subsidiaries that is, or is reasonably likely to be, materially
adverse to the business, financial condition, results of operations or prospects
of Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries taken as a whole if such
change or effect is significantly more adverse to Xxxxxx Xxxxxxx and the Xxxxxx
Xxxxxxx Subsidiaries taken as a whole than to the offshore oil services industry
in general. Section 4.01 of the Xxxxxx Xxxxxxx Disclosure Schedule sets forth a
complete and correct list of all of the Xxxxxx Xxxxxxx Subsidiaries. Xxxxxx
Xxxxxxx has made available to Halter Marine prior to the execution of this
Agreement complete and correct copies of its certificate of incorporation and
by-laws, as amended to date.
SECTION 4.02. Capitalization. The authorized capital stock of Xxxxxx
Xxxxxxx consists of (a) 125,000,000 shares of Xxxxxx Xxxxxxx Common Stock and
(b) 5,000,000 shares of preferred stock, par value $0.01 per share (the "Xxxxxx
Xxxxxxx Preferred Stock"). As of April 30, 1999, (i) 23,356,572 shares of
Xxxxxx Xxxxxxx Common Stock were issued and outstanding, all of which were
validly issued and fully paid, nonassessable and free of preemptive rights, and
(ii) no shares of Xxxxxx Xxxxxxx Common Stock were held in the treasury of
Xxxxxx Xxxxxxx or by the Xxxxxx Xxxxxxx Subsidiaries. As of April 30, 1999, (i)
2,335,657 shares of Xxxxxx Xxxxxxx Common Stock were reserved for issuance upon
exercise of current stock options granted pursuant to the stock based plans set
forth in Section 4.08(a) of the Xxxxxx Xxxxxxx Disclosure Schedule (the "Xxxxxx
Xxxxxxx Stock Option Plans"), upon exercise of future grants of stock options
and upon conversion or exchange of Xxxxxx Xxxxxxx Preferred Stock and (ii) no
shares of Preferred Stock were issued and outstanding. Except for (i) Xxxxxx
Xxxxxxx Options granted pursuant to the Xxxxxx Xxxxxxx Stock Option Plans, (ii)
the rights (the "Xxxxxx Xxxxxxx Preferred Stock Rights") issued pursuant to the
Xxxxxx Xxxxxxx Stockholder Rights Agreement dated as of December 7, 1998 between
Xxxxxx Xxxxxxx and American Stock Transfer & Trust Company as Rights Agent (the
"Xxxxxx Xxxxxxx Rights Agreement"), (iii) shares issuable upon conversion of
Xxxxxx Xxxxxxx Preferred Stock or (iv) agreements or arrangements described in
Section 4.02 or Section 4.08 of the Xxxxxx Xxxxxxx Disclosure Schedule, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character to which Xxxxxx Xxxxxxx or any
Xxxxxx Xxxxxxx Subsidiary is a party or by which Xxxxxx Xxxxxxx or any Xxxxxx
Xxxxxxx Subsidiary is bound relating to the issued or unissued capital stock of
Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary, or securities convertible into
or exchangeable for such capital stock or obligating Xxxxxx Xxxxxxx or any
Xxxxxx Xxxxxxx Subsidiary to issue or sell any shares of capital stock, or
securities convertible into or exchangeable for such capital stock of, or other
equity interests in, Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary. Since
April 30, 1999, Xxxxxx Xxxxxxx has not issued any shares of its capital stock,
or securities convertible into or exchangeable for such capital stock, other
than those shares of capital stock reserved for issuance as set forth in this
Section 4.02 or as set forth in Section 4.02 of the Xxxxxx Xxxxxxx Disclosure
Schedule. All shares of Xxxxxx Xxxxxxx Common Stock subject to issuance as
aforesaid, upon issuance prior to the Effective Time on the terms and conditions
specified in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid, nonassessable and free of preemptive
rights. The shares of Xxxxxx Xxxxxxx Common Stock to be issued in connection
with the Merger, when issued as contemplated herein, will be duly authorized,
validly issued, fully paid and nonassessable and will not be issued in violation
of any preemptive rights. Except as set forth in this Section 4.02 or Section
4.02 of the Xxxxxx Xxxxxxx Disclosure Schedule, there are no outstanding
contractual obligations of Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary (i)
restricting the transfer of, (ii) affecting the voting rights of, (iii)
requiring the repurchase, redemption or disposition of, (iv) requiring the
registration for sale of, or (v) granting any preemptive or antidilutive right
with respect to, any shares of Xxxxxx Xxxxxxx Common Stock or any capital stock
of any Xxxxxx Xxxxxxx Subsidiary. Each outstanding share of capital stock of
each Xxxxxx Xxxxxxx Subsidiary is duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights, is owned by Xxxxxx Xxxxxxx or
another Xxxxxx Xxxxxxx Subsidiary and is free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on Xxxxxx Xxxxxxx'x or such other Xxxxxx Xxxxxxx Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever, except where
failure to own such shares free and clear would not, individually or in the
aggregate, have a Xxxxxx Xxxxxxx Material Adverse Effect. Except as set forth in
Section 4.02 of the Xxxxxx Xxxxxxx Disclosure Schedule, there are no material
outstanding contractual obligations of Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx
Subsidiary to provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any Xxxxxx Xxxxxxx Subsidiary or any
other person, other than guarantees by Xxxxxx Xxxxxxx of any indebtedness of any
Xxxxxx Xxxxxxx Subsidiary.
SECTION 4.03. Authority Relative to This Agreement. Xxxxxx Xxxxxxx
has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated herein to be consummated by Xxxxxx Xxxxxxx. Each of
(i) the execution and delivery of this Agreement by Xxxxxx Xxxxxxx and the
consummation by Xxxxxx Xxxxxxx of such transactions, (ii) the increase in the
number of directors of Xxxxxx Xxxxxxx to eleven (11) (the "Board Size Increase")
and (iii) the amendments to the Xxxxxx Xxxxxxx Stock Option Plan pursuant to
Section 6.07 (the "Stock Option Plan Amendment") has been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Xxxxxx Xxxxxxx are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby other than, with respect to the
approval of (i) the Merger by the affirmative vote of the holders of a majority
of the outstanding shares of Xxxxxx Xxxxxxx Common Stock and (ii) the Board Size
Increase and the Stock Option Plan Amendment by the affirmative vote of a
majority of votes cast by the holders of outstanding shares of Xxxxxx Xxxxxxx
Common Stock at a meeting of Xxxxxx Xxxxxxx Stockholders duly held for such
purposes (together, the
"Xxxxxx Xxxxxxx Stockholder Approval"). The Board of Directors of Xxxxxx
Xxxxxxx, at a meeting duly called and held, has (i) determined that this
Agreement and the transactions contemplated hereby (including the Merger) are
fair to and in the best interests of Xxxxxx Xxxxxxx'x Stockholders, (ii)
approved, adopted and declared the advisability of this Agreement and the
transactions contemplated hereby (including the Merger, the Board Size Increase
and the Stock Option Plan Amendment), (iii) resolved to recommend approval and
adoption of the Merger, the Board Size Increase and the Stock Option Plan
Amendment by its stockholders and (iv) directed that the Merger Agreement, Board
Size Increase and the Stock Option Plan Amendment be submitted to Xxxxxx
Xxxxxxx'x stockholders for approval at a meeting of such stockholders. This
Agreement has been duly authorized and validly executed and delivered by Xxxxxx
Xxxxxxx and constitutes the legal, valid and binding obligation of Xxxxxx
Xxxxxxx, enforceable against Xxxxxx Xxxxxxx in accordance with its terms. Xxxxxx
Xxxxxxx has taken all action necessary to render the Xxxxxx Xxxxxxx Preferred
Stock Rights issued pursuant to the terms of the Xxxxxx Xxxxxxx Rights Agreement
inapplicable to, or not exercisable as a result of, the Merger, the execution
and delivery of this Agreement or the transactions contemplated by this
Agreement, provided that no stockholder of Halter Marine would beneficially own
15% or more of the outstanding shares of Xxxxxx Xxxxxxx Common Stock at the
Effective Time.
SECTION 4.04. No Conflict; Required Filings and Consents. (a) The
execution and delivery of this Agreement by Xxxxxx Xxxxxxx do not, and the
performance of this Agreement by Xxxxxx Xxxxxxx will not, (i) assuming the
Xxxxxx Xxxxxxx Stockholder Approval is obtained, conflict with or violate any
provision of the Articles of Incorporation or By-laws of Xxxxxx Xxxxxxx or any
equivalent organizational documents of any Xxxxxx Xxxxxxx Subsidiary, (ii)
assuming that all consents, approvals, authorizations and other actions
described in Section 4.04(b) have been obtained and all filings described in
Section 4.04(b) have been made, conflict with or violate any foreign or domestic
Law applicable to Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary or by which
any property or asset of Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary is
bound or affected or (iii) except as set forth in Section 4.04(a) of the Xxxxxx
Xxxxxxx Disclosure Schedule, result in any breach of, any loss of any benefit
under or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Xxxxxx Xxxxxxx or any Xxxxxx
Xxxxxxx Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, Xxxxxx Xxxxxxx Permit (as defined in Section 4.05),
other instrument or obligation, except, with respect to clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults or other occurrences that
would neither, individually or in the aggregate, (A) have a Xxxxxx Xxxxxxx
Material Adverse Effect nor (B) prevent or materially delay the performance of
this Agreement by Xxxxxx Xxxxxxx.
(b) Except as set forth in Section 4.04(b) of the Xxxxxx Xxxxxxx
Disclosure Schedule, the execution and delivery of this Agreement by Xxxxxx
Xxxxxxx do not, and the performance of this Agreement by Xxxxxx Xxxxxxx will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any domestic or foreign
Governmental Entity, except (i) for applicable requirements of the Exchange Act,
the Securities Act, Blue Sky Laws, the NYSE, premerger notification requirements
of the HSR Act, filing and recordation of the Certificate of Merger and Articles
of Merger, as required by the DGCL and MBCA, respectively, and as otherwise set
forth in Section 4.04(b) of the Xxxxxx Xxxxxxx Disclosure Schedule and (ii)
where failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, would not (A) prevent or materially delay
consummation of the Merger, (B) otherwise prevent Xxxxxx Xxxxxxx from performing
its material obligations under this Agreement or (C) individually or in the
aggregate, have a Xxxxxx Xxxxxxx Material Adverse Effect.
SECTION 4.05. Permits; Compliance. Each of Xxxxxx Xxxxxxx and the
Xxxxxx Xxxxxxx Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals, clearances and orders of any Governmental Entity
necessary for Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary to own, lease and
operate its properties or to carry on their respective businesses substantially
in the manner described in the Xxxxxx Xxxxxxx SEC Filings (as defined herein)
and as it is now being conducted (the "Xxxxxx Xxxxxxx Permits"), and all such
Xxxxxx Xxxxxxx Permits are valid, and in full force and effect, except where the
failure to have, or the suspension or cancellation of, any of the Xxxxxx Xxxxxxx
Permits would neither, individually or in the aggregate, (a) have a Xxxxxx
Xxxxxxx Material Adverse Effect nor (b) prevent or materially delay the
performance of this Agreement by Xxxxxx Xxxxxxx, and, as of the date of this
Agreement, no suspension or cancellation of any of the Xxxxxx Xxxxxxx Permits is
pending or, to the knowledge of Xxxxxx Xxxxxxx, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Xxxxxx Xxxxxxx
Permits would neither, individually or in the aggregate, (x) have a Xxxxxx
Xxxxxxx Material Adverse Effect nor (y) prevent or materially delay the
performance of this Agreement by Xxxxxx Xxxxxxx. Neither Xxxxxx Xxxxxxx nor any
Xxxxxx Xxxxxxx Subsidiary is in conflict with, or in default or violation of,
(i) any Law applicable to Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary or by
which any property, asset or operation of Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx
Subsidiary is bound or affected or (ii) any Xxxxxx Xxxxxxx Permits, except for
any such conflicts, defaults or violations that would neither, individually or
in the aggregate, (A) have a Xxxxxx Xxxxxxx Material Adverse Effect nor (B)
prevent or materially delay the performance of this Agreement by Xxxxxx Xxxxxxx.
SECTION 4.06. SEC Filings; Financial Statements. (a) Xxxxxx Xxxxxxx
has timely filed all registration statements, prospectuses, forms, reports and
documents required to be filed by it under the Securities Act or the Exchange
Act, as the case may be, since July 21, 1997 (collectively, the "Xxxxxx Xxxxxxx
SEC Filings"). The Xxxxxx Xxxxxxx SEC Filings (i) complied as to form in all
material respects with the applicable requirements of the Securities Act or the
Exchange Act, as the case may be, and (ii) did not at the time they were filed
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No Xxxxxx Xxxxxxx Subsidiary is subject to the periodic reporting
requirements of the Exchange Act.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Xxxxxx Xxxxxxx SEC Filings was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods indicated (except as may be indicated in the notes thereto) and each
presented fairly the consolidated financial position of Xxxxxx Xxxxxxx and the
consolidated Xxxxxx Xxxxxxx Subsidiaries as at the respective dates thereof and
for the respective periods indicated therein, except as otherwise noted therein
(subject, in the case of unaudited statements, to normal and recurring year-end
adjustments that were not and are not expected, individually or in the
aggregate, to have a Xxxxxx Xxxxxxx Material Adverse Effect). The books and
records of Xxxxxx Xxxxxxx and its Subsidiaries have been, and are being,
maintained in accordance with GAAP and any other applicable legal and accounting
requirements.
(c) Except as and to the extent set forth on the consolidated balance
sheet of Xxxxxx Xxxxxxx and the consolidated Xxxxxx Xxxxxxx Subsidiaries as of
December 31, 1998 included in Xxxxxx Xxxxxxx'x Form 10-K for the year ended
December 31, 1998, including the notes thereto, neither Xxxxxx Xxxxxxx nor any
Xxxxxx Xxxxxxx Subsidiary has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) that would be required to
be reflected on a balance sheet or in notes thereto prepared in accordance with
GAAP, except for liabilities or obligations (i) disclosed in the Xxxxxx Xxxxxxx
SEC Filings filed under the Securities Act or the Exchange Act prior to the date
hereof or (ii) incurred in the ordinary course of business since December 31,
1998 that would neither, individually or in the aggregate, (A) have a Xxxxxx
Xxxxxxx Material Adverse Effect nor (B) prevent or materially delay the
performance of this Agreement by Xxxxxx Xxxxxxx.
SECTION 4.07. Absence of Certain Changes or Events. Since December
31, 1998, except as contemplated by or as disclosed in this Agreement, as set
forth in Section 4.07 of the Xxxxxx Xxxxxxx Disclosure Schedule or as disclosed
in any Xxxxxx Xxxxxxx SEC Filing filed prior to the date of this Agreement,
Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since such date, there has not been (a) any Xxxxxx Xxxxxxx
Material Adverse Effect or an event or development (including in connection with
the Merger) that would, individually or in the aggregate, have a Xxxxxx Xxxxxxx
Material Adverse Effect, (b) any event that could reasonably be expected to
prevent or materially delay the performance of this Agreement by Xxxxxx Xxxxxxx
or (c) any action taken by Xxxxxx Xxxxxxx or any of the Xxxxxx Xxxxxxx
Subsidiaries during the period from December 31, 1998 through the date of this
Agreement that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section 5.02.
SECTION 4.08. Employee Benefit Plans; Labor Matters. (a) Section
4.08(a) of the Xxxxxx Xxxxxxx Disclosure Schedule sets forth a true and complete
list as of the date hereof of each material employee benefit plan, program,
arrangement and contract (including, without limitation, any "employee benefit
plan", as defined in section 3(3) of ERISA, maintained or contributed to by
Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary, or with respect to which Xxxxxx
Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary could incur material liability under
section 4069, 4212(c) or 4204 of ERISA (the "Xxxxxx Xxxxxxx Benefit Plans").
With respect to each Xxxxxx Xxxxxxx Benefit Plan that is a stock-based plan,
Xxxxxx Xxxxxxx has heretofore delivered to Halter Marine a true and complete
copy of such Xxxxxx Xxxxxxx Benefit Plan. With respect to each other Xxxxxx
Xxxxxxx Benefit Plan, Xxxxxx Xxxxxxx will make available to Halter Marine,
promptly after the date hereof, a true and complete copy of such Xxxxxx Xxxxxxx
Benefit Plan and (i) the most recent annual report (Form 5500) filed with the
IRS, if any (ii) the most recent actuarial report or valuation (if any) relating
to any Xxxxxx Xxxxxxx Benefit Plan subject to Title IV of ERISA and (iii) the
most recent determination letter, if any, issued by the IRS with respect to any
Xxxxxx Xxxxxxx Benefit Plan qualified under Section 401(a) of the Code.
(b) With respect to each Xxxxxx Xxxxxxx Benefit Plan that is subject
to Title IV of ERISA, (A) no "reportable event" (within the meaning of Section
4043 of ERISA) has occurred with respect to any Xxxxxx Xxxxxxx Benefit Plan for
which the 30-day notice requirement has not been waived, except where such
reportable event would not have a Xxxxxx Xxxxxxx Material Adverse Effect, and
(B) no condition exists that would subject Xxxxxx Xxxxxxx or any ERISA Affiliate
to any fine under Section 4071 of ERISA, except where such condition would not
have a Xxxxxx Xxxxxxx Material Adverse Effect. Except as set forth in Section
4.08(b) of the Xxxxxx Xxxxxxx Disclosure Schedule, no Xxxxxx Xxxxxxx Benefit
Plan is a "multiemployer pension plan" (as such term is defined in section 3(37)
of ERISA).
(c) With respect to the Xxxxxx Xxxxxxx Benefit Plans, no event has
occurred and, to the knowledge of Xxxxxx Xxxxxxx, there exists no condition or
set of circumstances in connection with which Xxxxxx Xxxxxxx or any Xxxxxx
Xxxxxxx Subsidiary could be subject to any liability under the terms of such
Xxxxxx Xxxxxxx Benefit Plans, ERISA, the Code or any other applicable Law that,
individually or in the aggregate, would have a Xxxxxx Xxxxxxx Material Adverse
Effect. Each of the Xxxxxx Xxxxxxx Benefit Plans has been operated and
administered in all material respects in accordance with applicable laws and
administrative or governmental rules and regulations, including, but not limited
to, ERISA and the Code, except where a violation of any such law, rule or
regulation would not have a Xxxxxx Xxxxxxx Material Adverse Effect. Each of the
Xxxxxx Xxxxxxx Benefit Plans intended to be "qualified" within the meaning of
Section 401(a) of the Code has received a favorable determination letter as to
such qualification from the IRS, and no event has occurred, either by reason of
any action or failure to act, that would cause the loss of any such
qualification, except where such loss of qualification would not have a Xxxxxx
Xxxxxxx Material Adverse Effect. Except as set forth on Section 4.08(c) of the
Xxxxxx Xxxxxxx Disclosure Schedule, no Xxxxxx Xxxxxxx Benefit Plan provides
benefits, including, without limitation, death or medical benefits (whether or
not insured), with respect to current or former employees of Xxxxxx Xxxxxxx or
any Xxxxxx Xxxxxxx Subsidiary beyond their retirement or other termination of
service, other than (i) coverage mandated by applicable law, (ii) death benefits
or retirement benefits under any "employee pension plan" (as such term is
defined in Section 3(2) of ERISA), (iii) deferred compensation benefits accrued
as liabilities on the books of Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary,
or (iv) benefits the full cost of which is borne by the current or former
employee (or his beneficiary). All contributions or other amounts payable by
Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary as of the Effective Time with
respect to each Xxxxxx Xxxxxxx Benefit Plan in respect of current or prior plan
years have been paid or accrued in
accordance with GAAP and Section 412 of the Code.
(d) Except as set forth in Section 4.08(d) of the Xxxxxx Xxxxxxx
Disclosure Schedule, Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries have no
obligations or liabilities (whether accrued, absolute, contingent or otherwise)
with respect to any collective bargaining agreements that, individually or in
the aggregate, would have a Xxxxxx Xxxxxxx Material Adverse Effect.
(e) Except as set forth in Section 4.08(e) of the Xxxxxx Xxxxxxx
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director or any
employee of Xxxxxx Xxxxxxx or any of its affiliates from Xxxxxx Xxxxxxx or any
of its affiliates under any Xxxxxx Xxxxxxx Benefit Plan or otherwise, (ii)
materially increase any benefits otherwise payable under any Xxxxxx Xxxxxxx
Benefit Plan or (iii) result in any acceleration of the time of payment or
vesting of any material benefits.
(f) Xxxxxx Xxxxxxx is currently in compliance with all applicable
laws, regulations and rules relating to the employment of labor, including those
related to wages, hours and the payment of withholding taxes and other sums
required by a governmental authority and has withheld and paid to the
appropriate government authority or is holding for payment not yet due to such
authority all amounts required to be withheld on behalf of any of Xxxxxx
Xxxxxxx'x employees, and is not liable for arrears of wages, taxes, penalties or
other sums for failure to comply with the foregoing.
SECTION 4.09. Contracts; Debt Instruments. Except as disclosed in or
attached as exhibits to the Xxxxxx Xxxxxxx SEC Filings or as disclosed in
Section 4.09(a) of the Xxxxxx Xxxxxxx Disclosure Schedule, neither Xxxxxx
Xxxxxxx nor any of the Xxxxxx Xxxxxxx Subsidiaries is a party to or bound by any
contract (i) except as set forth in Section 4.08(e) of the Xxxxxx Xxxxxxx
Disclosure Schedule, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement, or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement, (ii) as of the date hereof, any vessel or
customer contract that is a "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC), that requires expenditures in excess
of $10 million or that requires annual expenditures in excess of $10 million and
is not cancelable within one year, that has not been filed or incorporated by
reference in the Xxxxxx Xxxxxxx SEC Filings, (iii) that contains any material
non-compete provisions with respect to any line of business or geographic area
in which business is conducted with respect to Xxxxxx Xxxxxxx or any of the
Xxxxxx Xxxxxxx Subsidiaries or that restricts the conduct of any line of
business by Xxxxxx Xxxxxxx or any of the Xxxxxx Xxxxxxx Subsidiaries or any
geographic area in which Xxxxxx Xxxxxxx or any of the Xxxxxx Xxxxxxx
Subsidiaries may conduct business, in each case in any material respect, (iv)
that would prohibit or materially delay the consummation of the Merger or any of
the transactions contemplated by this Agreement, (v) that obligates Xxxxxx
Xxxxxxx or any of the Xxxxxx
Xxxxxxx Subsidiaries to make any compensation payments or issue or pay anything
of value to any director, executive officer, key employee or consultant, or (vi)
that is a loan, credit or similar contract. Each contract, arrangement,
commitment or understanding of the type described in this Section 4.09, whether
or not set forth in Section 4.09 of the Disclosure Schedule, is referred to
herein as a "Xxxxxx Xxxxxxx Material Contract." Each Xxxxxx Xxxxxxx Material
Contract is valid and binding on Xxxxxx Xxxxxxx or any of the Xxxxxx Xxxxxxx
Subsidiaries, as applicable, and in full force and effect, and Xxxxxx Xxxxxxx
and each of the Xxxxxx Xxxxxxx Subsidiaries have in all material respects
performed all obligations required to be performed by them to date under each
Xxxxxx Xxxxxxx Material Contract, except where such noncompliance, individually
or in the aggregate, would not have a Xxxxxx Xxxxxxx Material Adverse Effect.
Neither Xxxxxx Xxxxxxx nor any Xxxxxx Xxxxxxx Subsidiary knows of, or has
received notice of, any violation or default under (nor does there exist any
condition which with the passage of time or the giving of notice would cause
such a violation of or default under) any Xxxxxx Xxxxxxx Material Contract or
any other loan or credit agreement, note, bond, mortgage, indenture or lease, or
any other contract, agreement, arrangement or understanding to which it is a
party or by which it or any of its properties or assets is bound, except for
violations or defaults that would not, individually or in the aggregate, result
in a Xxxxxx Xxxxxxx Material Adverse Effect. Set forth in Section 4.09(c) of the
Xxxxxx Xxxxxxx Disclosure Schedule is a description of any material changes to
the amount and terms of the indebtedness of Xxxxxx Xxxxxxx and the Xxxxxx
Xxxxxxx Subsidiaries from that described in the notes to the financial
statements incorporated in Xxxxxx Xxxxxxx'x Form 10-K for the year ended
December 31, 1998.
SECTION 4.10. Litigation. Except as disclosed in the Xxxxxx Xxxxxxx
SEC Filings or in Section 4.10 of the Xxxxxx Xxxxxxx Disclosure Schedule, as of
the date hereof, there is no suit, claim, action, proceeding or investigation
pending or, to the knowledge of Xxxxxx Xxxxxxx, threatened in writing against
Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary by or before any Governmental
Entity that (a) individually or in the aggregate, is reasonably likely to have a
Xxxxxx Xxxxxxx Material Adverse Effect or (b) challenges the validity or
propriety, or seeks to prevent consummation of, the transactions contemplated by
this Agreement. Except as disclosed in the Xxxxxx Xxxxxxx SEC Filings or in
Section 4.10 of the Xxxxxx Xxxxxxx Disclosure Schedule, neither Xxxxxx Xxxxxxx
nor any Xxxxxx Xxxxxxx Subsidiary is subject to any outstanding order, writ,
injunction or decree that has had or, insofar as can be reasonably foreseen,
individually or in the aggregate, would have a Xxxxxx Xxxxxxx Material Adverse
Effect.
SECTION 4.11. Environmental Matters. Except as disclosed in the
Xxxxxx Xxxxxxx SEC Filings or in Section 4.11 of the Xxxxxx Xxxxxxx Disclosure
Schedule or as would not, individually or in the aggregate, have a Xxxxxx
Xxxxxxx Material Adverse Effect:
(a) Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries (i) are in
compliance with all, and are not subject to any liability pursuant to,
applicable Environmental Laws, (ii) hold or have applied for all
Environmental Permits and (iii) are in compliance with their respective
Environmental Permits;
(b) neither Xxxxxx Xxxxxxx nor any Xxxxxx Xxxxxxx Subsidiary has
received any written notice, demand, letter, claim, request for information
or other written communication alleging that Xxxxxx Xxxxxxx or any of its
Subsidiaries may be in violation of, or liable under, any Environmental
Law;
(c) neither Xxxxxx Xxxxxxx nor any Xxxxxx Xxxxxxx Subsidiary (i) has
entered into or agreed to any consent decree or order or is subject to any
judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation, sampling,
monitoring, treatment, remediation, removal or cleanup of Hazardous
Materials and, to the knowledge of Xxxxxx Xxxxxxx, no investigation,
litigation or other proceeding is pending or threatened in writing with
respect thereto, or (ii) is
an indemnitor in connection with any threatened or asserted claim by any
third-party indemnitee for any liability under any Environmental Law or
relating to any Hazardous Materials;
(d) none of the real property owned or leased by Xxxxxx Xxxxxxx or any
Xxxxxx Xxxxxxx Subsidiary is listed or, to the knowledge of Xxxxxx Xxxxxxx,
proposed for listing on the "National Priorities List" or the Comprehensive
Environmental Response, Compensation and Liability Information System under
CERCLA, or any similar state or foreign list of sites requiring
investigation or cleanup, in each case as updated through the Effective
Date; and
(e) No Hazardous Material has been released, discharged or disposed of
at, to or from, or transported offsite from, any property currently owned
or operated by Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary or, during
the period of such ownership or operation, any property formerly owned or
operated by Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary.
SECTION 4.12. Trademarks, Patents and Copyrights. Except as set
forth in Section 4.12 of the Xxxxxx Xxxxxxx Disclosure Schedule, or to the
extent the inaccuracy of any of the following (or the circumstances giving rise
to such inaccuracy), individually or in the aggregate, would not have a Xxxxxx
Xxxxxxx Material Adverse Effect, Xxxxxx Xxxxxxx and each of the Xxxxxx Xxxxxxx
Subsidiaries own or possess adequate licenses or other legal rights to use all
Proprietary Rights used or held for use in connection with the business of
Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries as currently conducted or as
contemplated to be conducted, and Xxxxxx Xxxxxxx is unaware of any assertion or
claim challenging the validity of any of the foregoing. The conduct of the
business of Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries as currently
conducted and as contemplated to be conducted did not, does not and will not
infringe in any way any Proprietary Rights of any third party that, individually
or in the aggregate, could have a Xxxxxx Xxxxxxx Material Adverse Effect. To
Xxxxxx Xxxxxxx'x knowledge, there are no infringements of any Proprietary Rights
owned by or licensed by or to Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary
that, individually or in the aggregate, could have a Xxxxxx Xxxxxxx Material
Adverse Effect.
SECTION 4.13. Taxes. (a) Except for such matters as would not have
a Xxxxxx Xxxxxxx Material Adverse Effect, (i) Xxxxxx Xxxxxxx and the Xxxxxx
Xxxxxxx Subsidiaries have timely filed or will timely file all returns and
reports required to be filed by them with any taxing authority with respect to
Taxes for any period ending on or before the Effective Time, taking into account
any extension of time to file granted to or obtained on behalf of Xxxxxx Xxxxxxx
and the Xxxxxx Xxxxxxx Subsidiaries, (ii) all Taxes that are due (whether or not
shown to be due on such returns or reports) prior to the Effective Time have
been paid or will be paid (other than Taxes that (1) are not yet delinquent or
(2) are being contested in good faith and have not been finally determined),
(iii) as of the date hereof, no deficiency for any Tax has been asserted or
assessed by a taxing authority against Xxxxxx Xxxxxxx or any of the Xxxxxx
Xxxxxxx Subsidiaries, which deficiency has not been paid other than any
deficiency being contested in good faith and (iv) Xxxxxx Xxxxxxx and the Xxxxxx
Xxxxxxx Subsidiaries have provided adequate reserves (in accordance with GAAP)
in their financial statements for any Taxes that have not been paid, whether or
not shown as being due on any returns.
(b) To the best of Xxxxxx Xxxxxxx'x knowledge, there are no material
disputes pending, or claims asserted in writing for, Taxes or assessments upon
Xxxxxx Xxxxxxx, or any of the Xxxxxx Xxxxxxx Subsidiaries, nor has Xxxxxx
Xxxxxxx or any of the Xxxxxx Xxxxxxx Subsidiaries been requested in writing to
give any currently effective waivers extending the statutory period of
limitation applicable to any federal or state income tax return for any period
which disputes, claims, assessments or waivers are reasonably likely to have a
Xxxxxx Xxxxxxx Material Adverse Effect.
(c) There are no Tax liens upon any property or assets of Xxxxxx
Xxxxxxx or any of the Xxxxxx Xxxxxxx Subsidiaries except liens for current Taxes
not yet due and except for liens that have not had and are not reasonably likely
to have a Xxxxxx Xxxxxxx Material Adverse Effect.
(d) Neither Xxxxxx Xxxxxxx nor any of the Xxxxxx Xxxxxxx Subsidiaries
has been required to include in income any adjustment pursuant to Section 481 of
the Code by reason of a voluntary change in accounting method initiated by
Xxxxxx Xxxxxxx or any of its Subsidiaries, and the IRS has not initiated or
proposed any such adjustment or change in accounting method, in either case
which adjustment or change has had or is reasonably likely to have a Xxxxxx
Xxxxxxx Material Adverse Effect.
(e) Except as set forth in the financial statements described in
Section 4.06, neither Xxxxxx Xxxxxxx nor any of the Xxxxxx Xxxxxxx Subsidiaries
has entered into a transaction that is being accounted for under the installment
method of Section 453 of the Code, which would be reasonably likely to have a
Xxxxxx Xxxxxxx Material Adverse Effect.
(f) Neither Xxxxxx Xxxxxxx nor any of its Subsidiaries has made an
election under Section 341(f) of the Code.
(g) Neither Xxxxxx Xxxxxxx nor any of the Xxxxxx Xxxxxxx Subsidiaries
is a party to any agreement providing for the allocation, sharing or
indemnification of Taxes with any entity that is not, directly or indirectly, a
wholly owned corporate subsidiary of Xxxxxx Xxxxxxx, other than agreements the
consequences of which are fully and adequately reserved for in the Xxxxxx
Xxxxxxx and Xxxxxx Xxxxxxx Subsidiaries financial statements.
(h) As of the time of the March 31, 1997 distribution of Halter Marine
stock by Trinity Industries, Inc. there had been no negotiations, agreements or
arrangements regarding the acquisition of the stock or assets of Halter Marine
by Xxxxxx Xxxxxxx or the acquisition of the stock or assets of Xxxxxx Xxxxxxx by
Halter Marine between (1) the management or the Board of Directors of Xxxxxx
Xxxxxxx or Xxxxxx Xxxxxxx'x representatives in their capacity as such and (2)
the management or the Board of Directors of Trinity Industries, Inc. or Trinity
Industries, Inc.'s representatives or the management or the Board of Directors
of Halter Marine or Halter Marine's representatives in their capacity as such.
SECTION 4.14. Opinion of Financial Advisor. Jefferies & Company,
Inc. ("Jefferies") has delivered to the Board of Directors of Xxxxxx Xxxxxxx its
written opinion
dated as of June 1, 1999, a copy of which opinion has been delivered to Halter
Marine, that, as of such date, the Exchange Ratio is fair from a financial point
of view to the holders of Xxxxxx Xxxxxxx Common Stock.
SECTION 4.15. Vote Required. The Xxxxxx Xxxxxxx Stockholder Approval
is the only vote of the holders of any class or series of capital stock of
Xxxxxx Xxxxxxx necessary to approve the transactions contemplated by this
Agreement.
SECTION 4.16. Brokers. No broker, finder or investment banker (other
than Jefferies) is entitled to any brokerage, finder's or other fee or
commission in connection with the Merger based upon arrangements made by or on
behalf of Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary. Xxxxxx Xxxxxxx has
heretofore made available to Halter Marine a complete and correct copy of all
agreements between Xxxxxx Xxxxxxx and Jefferies pursuant to which such firms
would be entitled to any payment relating to the Merger.
SECTION 4.17. Insurance. Xxxxxx Xxxxxxx maintains insurance coverage
with reputable insurers in such amounts and covering such risks as are in
accordance with normal industry practice for companies engaged in businesses
similar to that of Xxxxxx Xxxxxxx (taking into account the cost and availability
of such insurance).
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 5.01. Conduct of Business by Halter Marine Pending the
Closing. Halter Marine agrees that, between the date of this Agreement and the
Effective Time, except as set forth in Section 5.01 of the Halter Marine
Disclosure Schedule or as contemplated by any other provision of this Agreement,
unless Xxxxxx Xxxxxxx shall otherwise agree in writing, which agreement shall
not be unreasonably withheld or delayed, (1) the business of Halter Marine and
the Halter Marine Subsidiaries shall be conducted only in, and Halter Marine and
the Halter Marine Subsidiaries shall not take any action except in, the ordinary
course of business consistent with past practice and (2) Halter Marine shall use
its reasonable best efforts to keep available the services of such of the
current officers, significant employees and consultants of Halter Marine and the
Halter Marine Subsidiaries and to preserve the current relationships of Halter
Marine and the Halter Marine Subsidiaries with such of the customers, suppliers
and other persons with which Halter Marine or any Halter Marine Subsidiary has
significant business relations as Halter Marine deems reasonably necessary in
order to preserve substantially intact its business organization. By way of
amplification and not limitation, except as set forth in Section 5.01 of Halter
Marine Disclosure Schedule or as contemplated by any other provision of this
Agreement, the Board of Directors of Halter Marine shall not (unless required by
applicable Laws or stock exchange regulations) cause or permit Halter Marine or
any Halter Marine Subsidiary to, and shall neither cause nor permit any of
Halter Marine's affiliates (over which it exercises control), or any of their
officers, directors, employees and agents to, between the date of this Agreement
and the Effective
Time, directly or indirectly, do, or agree to do, any of the following without
the prior written consent of Xxxxxx Xxxxxxx, which consent shall not be
unreasonably withheld or delayed:
(a) amend or otherwise change its Certificate of Incorporation or By-
laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, transfer, lease, license,
guarantee, encumber, or authorize the issuance, sale, pledge, disposition,
grant, transfer, lease, license, guarantee or encumbrance of, (i) any
shares of capital stock of Halter Marine or any Halter Marine Subsidiary of
any class, or securities convertible or exchangeable or exercisable for any
shares of such capital stock, or any options, warrants or other rights of
any kind to acquire any shares of such capital stock or such convertible or
exchangeable securities, or any other ownership interest (including,
without limitation, any phantom interest), of Halter Marine or any Halter
Marine Subsidiary or (ii) except in the ordinary course of business and in
a manner consistent with past practice, any property or assets of Halter
Marine or any Halter Marine Subsidiary, except (A) the issuance of Halter
Marine Common Stock upon the exercise of Halter Marine Options, (B)
pursuant to contracts or agreements in force at the date of this Agreement,
(C) sales, transfers or dispositions of receivables in connection with the
securitization of such receivables or (D) the award of options pursuant to
the Halter Marine Stock Option Plan in connection with promotions and new
employee hires in the ordinary course of business and consistent with past
practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock (other than dividends paid by the Halter Marine
Subsidiaries to Halter Marine or to other Halter Marine Subsidiaries in the
ordinary course) or enter into any agreement with respect to the voting of
its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) except as disclosed in Section 5.01(e) of the Halter Marine
Disclosure Schedule, (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any interest in any
corporation, partnership, other business organization, person or any
division thereof (other than a wholly owned Halter Marine Subsidiary) or
any assets, other than (A) acquisitions of assets in the ordinary course of
business consistent with past practice and (B) any other acquisitions for
consideration that are not, in the case of clause (A) or clause (B)
individually, in excess of $1,000,000; (ii) incur any indebtedness for
borrowed money or issue any debt securities or assume, guarantee or
endorse, or otherwise as an accommodation become responsible for, the
obligations of any person for borrowed money, except for (A) indebtedness
for borrowed money incurred in the ordinary course of business and
consistent with past practice and (B) other indebtedness for borrowed money
with a maturity of not more than one year in a principal amount not, in the
aggregate, in
excess of $5,000,000; (iii) terminate, cancel or request any material
change in, or agree to any material change in, any Halter Marine Material
Contract or enter into any contract or agreement material to the business,
results of operations or financial condition of Halter Marine and Halter
Marine Subsidiaries taken as a whole, in either case other than in the
ordinary course of business, consistent with past practice; (iv) make or
authorize any capital expenditure, other than capital expenditures that are
not individually in excess of $1,000,000 for Halter Marine and the Halter
Marine Subsidiaries taken as a whole; or (v) enter into or amend any
contract, agreement, commitment or arrangement that, if fully performed,
would not be permitted under this Section 5.01(e);
(f) except as may be required by contractual commitments or corporate
policies with respect to severance or termination pay in existence on the
date hereof as disclosed in Section 3.08 of the Halter Marine Disclosure
Schedule: (i) increase the compensation payable or to become payable to
its officers or employees (except for increases in accordance with past
practices in salaries or wages of employees of Halter Marine or any Halter
Marine Subsidiary which are not across-the-board increases), (ii) grant any
rights to severance or termination pay to, or enter into any employment or
severance agreement with, any director, officer or other employee of Halter
Marine or any Halter Marine Subsidiary, or establish, adopt, enter into or
amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer
or employee, except as contemplated by this Agreement or to the extent
required by applicable Law or the terms of a collective bargaining
agreement or (iii) take any affirmative action to accelerate the vesting of
any stock-based compensation;
(g) take any action with respect to accounting policies or procedures,
other than actions in the ordinary course of business and consistent with
past practice or except as required by changes in GAAP;
(h) waive, release, assign, settle or compromise any material claims
or litigation except in the ordinary course of business and consistent with
past practice;
(i) make or revoke any tax election or settle or compromise any
material federal, state, local or foreign income tax liability;
(j) take any action that would prevent or impede the Merger from
qualifying as a reorganization within the meaning of Section 368 of the
Code;
(k) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time
prior to the Effective Time, or in any of the conditions to the Merger set
forth in Article VII not being satisfied or in a
violation of any provision of this Agreement, except, in each case, as may
be required by applicable law; or
(l) authorize or enter into any formal or informal agreement or
otherwise make any commitment to do any of the foregoing.
SECTION 5.02. Conduct of Business by Xxxxxx Xxxxxxx Pending the
Closing. Xxxxxx Xxxxxxx agrees that, between the date of this Agreement and the
Effective Time, except as set forth in Section 5.02 of the Xxxxxx Xxxxxxx
Disclosure Schedule or as contemplated by any other provision of this Agreement,
unless Halter Marine shall otherwise agree in writing, which agreement shall not
be unreasonably withheld or delayed, (1) the businesses of Xxxxxx Xxxxxxx and
the Xxxxxx Xxxxxxx Subsidiaries shall be conducted only in, and Xxxxxx Xxxxxxx
and the Xxxxxx Xxxxxxx Subsidiaries shall not take any action except in, the
ordinary course of business consistent with past practice and (2) Xxxxxx Xxxxxxx
shall use its reasonable best efforts to keep available the services of such of
the current officers, significant employees and consultants of Xxxxxx Xxxxxxx
and the Xxxxxx Xxxxxxx Subsidiaries and to preserve the current relationships of
Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries with such of the customers,
suppliers and other persons with which Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx
Subsidiary has significant business relations as Xxxxxx Xxxxxxx deems reasonably
necessary in order to preserve substantially intact its business organization.
By way of amplification and not limitation, except as set forth in Section 5.02
of the Xxxxxx Xxxxxxx Disclosure Schedule or as contemplated by any other
provision of this Agreement, the Board of Directors of Xxxxxx Xxxxxxx shall not
(unless required by applicable Laws or stock exchange regulations) cause or
permit Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary to, and shall neither
cause nor permit any of Xxxxxx Xxxxxxx'x affiliates (over which it exercises
control), or any of their officers, directors, employees and agents to, between
the date of this Agreement and the Effective Time, directly or indirectly, do,
or agree to do, any of the following, without the prior written consent of
Halter Marine, which consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change its Articles of Incorporation or By-laws
or equivalent organizational documents except for an amendment to the
Articles of Incorporation to eliminate cumulative voting with respect to
the election of directors;
(b) issue, sell, pledge, dispose of, grant, transfer, lease, license,
guarantee, encumber, or authorize the issuance, sale, pledge, disposition,
grant, transfer, lease, license, guarantee or encumbrance of, (i) any
shares of capital stock of Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary
of any class, or securities convertible or exchangeable or exercisable for
any shares of such capital stock, or any options, warrants or other rights
of any kind to acquire any shares of such capital stock or such convertible
or exchangeable securities, or any other ownership interest (including,
without limitation, any phantom interest) of Xxxxxx Xxxxxxx or any Xxxxxx
Xxxxxxx Subsidiary or (ii) except in the ordinary course of business and in
a manner consistent with past practice, any property or assets of Xxxxxx
Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary, except (A) the issuance of Xxxxxx
Xxxxxxx Common Stock upon the
exercise of Xxxxxx Xxxxxxx Options or (B) pursuant to contracts or
agreements in force at the date of this Agreement or (C) sales, transfers
or dispositions of receivables in connection with the securitization of
such receivables, or (D) the award of options pursuant to the Xxxxxx
Xxxxxxx Option Plan in connection with promotions and new employee hires in
the ordinary course of business and consistent with past practice or (E)
the automatic annual grant of options to non-employee directors of Xxxxxx
Xxxxxxx pursuant to the Xxxxxx Xxxxxxx Option Plan;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock (other than dividends paid by Xxxxxx Xxxxxxx
Subsidiaries to Xxxxxx Xxxxxxx or to another Xxxxxx Xxxxxxx Subsidiary in
the ordinary course) or enter into any agreement with respect to the voting
of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(e) except pursuant to the Xxxxxx Xxxxxxx'x 1999 capital expenditure
budget, a copy of which has been provided to Halter Marine, (i) acquire
(including, without limitation, by merger, consolidation, or acquisition of
stock or assets) any interest in any corporation, partnership, other
business organization, person or any division thereof (other than a wholly
owned Xxxxxx Xxxxxxx Subsidiary) or any assets, other than acquisitions of
assets in the ordinary course of business consistent with past practice and
any other acquisitions for consideration that are not, in the aggregate, in
excess of $5,000,000; (ii) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse, or otherwise as
an accommodation become responsible for, the obligations of any person for
borrowed money, except for (A) indebtedness for borrowed money incurred in
the ordinary course of business and consistent with past practice or in
connection with transactions otherwise permitted under this Section 5.02,
(B) indebtedness incurred to refinance any existing indebtedness of Xxxxxx
Xxxxxxx, Halter Marine or any of their respective subsidiaries in
connection with the Merger or (C) other indebtedness for borrowed money
with a maturity of not more than one year in a principal amount not, in the
aggregate, in excess of $5,000,000; (iii) terminate, cancel or request any
material change in, or agree to any material change in, any Xxxxxx Xxxxxxx
Material Contract or, except in connection with transactions permitted
under this Section 5.02(e), enter into any contract or agreement material
to the business, results of operations or financial condition of Xxxxxx
Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries taken as a whole, in either
case other than in the ordinary course of business, consistent with past
practice; (iv) make or authorize any capital expenditure, other than
capital expenditures as set forth in Xxxxxx Xxxxxxx'x 1999 capital
expenditure budget that are not, in the aggregate, in excess of $5,000,000
for Xxxxxx Xxxxxxx and the Xxxxxx Xxxxxxx Subsidiaries taken as a whole; or
(v) enter into or amend any contract, agreement, commitment or arrangement
that, if fully performed, would not be permitted under this Section
5.02(e);
(f) except as may be required by contractual commitments or corporate
policies with respect to severance or termination pay in existence on the
date hereof as disclosed in Section 4.08 of the Xxxxxx Xxxxxxx Disclosure
Schedule: (i) increase the compensation payable or to become payable to
its officers or employees (except for increases in accordance with past
practices in salaries or wages of employees of Xxxxxx Xxxxxxx or any Xxxxxx
Xxxxxxx Subsidiary which are not across-the-board increases), (ii) grant
any rights to severance or termination pay to, or enter into any employment
or severance agreement with, any director, officer or other employee of
Xxxxxx Xxxxxxx or any Xxxxxx Xxxxxxx Subsidiary, or establish, adopt, enter
into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any director, officer
or employee, except as contemplated by this Agreement or to the extent
required by applicable Law or the terms of a collective bargaining
agreement or (iii) take any affirmative action to accelerate the vesting of
any stock-based compensation;
(g) take any action with respect to accounting policies or procedures,
other than actions in the ordinary course of business and consistent with
past practice or except as required by changes in GAAP;
(h) waive, release, assign, settle or compromise any material claims
or litigation except in the ordinary course of business and consistent with
past practice;
(i) make or revoke any tax election or settle or compromise any
material federal, state, local or foreign income tax liability;
(j) take any action that would prevent or impede the Merger from
qualifying as a reorganization within the meaning of Section 368 of the
Code;
(k) take any action that is intended or may reasonably be expected to
result in any of its representations and warranties set forth in this
Agreement being or becoming untrue in any material respect at any time
prior to the Effective Time, or in any of the conditions to the Merger set
forth in Article VII not being satisfied or in a violation of any provision
of this Agreement, except, in each case, as may be required by applicable
law; or
(l) authorize or enter into any formal or informal agreement or
otherwise make any commitment to do any of the foregoing.
SECTION 5.03. Cooperation. Halter Marine and Xxxxxx Xxxxxxx shall
coordinate and cooperate in connection with (i) the preparation of the
Registration Statement and the Proxy Statement, (ii) determining whether any
action by or in respect of, or filing with, any Governmental Entity is required,
or any actions, consents, approvals or waivers are
required to be obtained from parties to any Xxxxxx Xxxxxxx Material Contracts or
Halter Marine Material Contracts, in connection with the consummation of the
Merger and (iii) seeking any such actions, consents, approvals or waivers or
making any such filings, furnishing information required in connection therewith
or with the Registration Statement and the Proxy Statement and timely seeking to
obtain any such actions, consents, approvals or waivers.
SECTION 5.04. Notices of Certain Events. Each of Halter Marine and
Xxxxxx Xxxxxxx shall give prompt notice to the other of (i) any notice or other
communication from any person alleging that the consent of such person is or may
be required in connection with the Merger; (ii) any notice or other
communication from any Governmental Entity in connection with the Merger; (iii)
any actions, suits, claims, investigations or proceedings commenced or
threatened in writing against, relating to or involving or otherwise affecting
Halter Marine, any Halter Marine Subsidiary, Xxxxxx Xxxxxxx or any Xxxxxx
Xxxxxxx Subsidiary that relate to the consummation of the Merger; (iv) the
occurrence of a default or event that, with notice or lapse of time or both,
will become a material default under any Xxxxxx Xxxxxxx Material Contract or
Halter Marine Material Contract; and (v) any change that is reasonably likely to
result in any Xxxxxx Xxxxxxx Material Adverse Effect or a Halter Marine Material
Adverse Effect or is likely to delay or impede the ability of either Xxxxxx
Xxxxxxx or Halter Marine to consummate the transactions contemplated by this
Agreement or to fulfill its obligations set forth herein.
SECTION 5.05. Contractual Consents. Prior to or at the Effective
Time, each of Halter Marine and Xxxxxx Xxxxxxx shall use its reasonable best
efforts to obtain any consents necessary such that the Merger will not
constitute a change of control, or any similar event which constitutes a default
(or an event which with notice or lapse of time or both would become a default)
under, or would permit the other party or parties thereto to terminate, any
material contract (including a Halter Marine Material Contract or Xxxxxx Xxxxxxx
Material Contract, as the case may be), agreement, lease, license, permit,
franchise or other instrument or obligation to which it or any of its
subsidiaries is a party.
SECTION 5.06. Rights Agreements. (a) Promptly following the
execution and delivery of this Agreement, Halter Marine shall take all action
necessary to render the Preferred Stock Rights issued pursuant to the terms of
the Halter Marine Rights Agreement inapplicable to, or not exercisable as a
result of, the Merger, the execution and delivery of this Agreement.
(b) Promptly following the execution and delivery of this Agreement,
Xxxxxx Xxxxxxx shall take all action necessary to (i) render the Preferred Stock
Rights issued pursuant to the terms of the Xxxxxx Xxxxxxx Rights Agreement
inapplicable to, or not exercisable as a result of, the Merger, the execution
and delivery of this Agreement or the transactions contemplated by this
Agreement, provided that no stockholder of Halter Marine would beneficially own
15% or more of the outstanding shares of Xxxxxx Xxxxxxx Common Stock at the
Effective Time, and (ii) amend the Xxxxxx Xxxxxxx Rights Agreement to provide
that from and after the Effective Time until the termination of the
Stockholder's Agreement
any action by the Board of Directors of Xxxxxx Xxxxxxx thereunder must be
approved by a vote of two-thirds of the members of the Board.
SECTION 5.07. Affiliate Letters. At least 30 days prior to the
Effective Time, Halter Marine shall deliver to Xxxxxx Xxxxxxx a list, which
shall be reasonably acceptable to Xxxxxx Xxxxxxx, identifying all persons whom
it believes are, at the time this Agreement is submitted for approval to the
stockholders of Halter Marine, "affiliates" of Halter Marine for purposes of
Rule 145 under the Securities Act. Halter Marine shall use all reasonable
efforts to deliver or cause to be delivered to Xxxxxx Xxxxxxx on or prior to the
Effective Time a duly executed affiliate letter in the form of Exhibit 8 for
each such "affiliate" of Halter Marine. Xxxxxx Xxxxxxx shall be entitled to
place legends as specified in such affiliate letters on the certificates
evidencing any Xxxxxx Xxxxxxx Stock to be received by such "affiliates" pursuant
to the terms of this Agreement and to issue appropriate stop transfer
instructions to the transfer agent for Xxxxxx Xxxxxxx Stock consistent with the
terms of such affiliate letters.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement; Proxy Statement. (a) As
promptly as practicable after the execution of this Agreement, (i) Xxxxxx
Xxxxxxx and Halter Marine shall prepare and file with the SEC a joint proxy
statement relating to the meetings of Halter Marine's stockholders and Xxxxxx
Xxxxxxx'x stockholders to be held in connection with the Merger (together with
any amendments thereof or supplements thereto, the "Proxy Statement") and (ii)
Xxxxxx Xxxxxxx shall prepare and file with the SEC a registration statement on
Form S-4 (together with all amendments thereto, the "Registration Statement") in
which the Proxy Statement shall be included as a prospectus, in connection with
the registration under the Securities Act of the shares of Friede Goldman Common
Stock to be issued to the stockholders of Halter Marine pursuant to the Merger.
Each of Friede Goldman and Halter Marine will use all reasonable efforts to
cause the Registration Statement to become effective as promptly as practicable,
and, prior to the effective date of the Registration Statement, Friede Goldman
shall take all or any action required under any applicable federal or state
securities laws in connection with the issuance of shares of Friede Goldman
Common Stock in the Merger. Each of Friede Goldman and Halter Marine shall
furnish all information concerning it and the holders of its capital stock as
the other may reasonably request in connection with such actions and the
preparation of the Registration Statement and Proxy Statement. As promptly as
practicable after the Registration Statement shall have become effective, each
of Friede Goldman and Halter Marine shall mail the Proxy Statement to its
respective stockholders. The Proxy Statement shall include the recommendation
of the Board of Directors of each of Friede Goldman and Halter Marine in favor
of the Merger, except as otherwise provided in Section 6.04(b) or Section
6.05(b) hereof.
No amendment or supplement to the Proxy Statement or the Registration
Statement will be made by Friede Goldman or Halter Marine without the approval
of the other
party (which approval shall not be unreasonably withheld or delayed). Friede
Goldman and Halter Marine each will advise the other, promptly after it receives
notice thereof, of the time when the Registration Statement has become effective
or any supplement or amendment has been filed, the issuance of any stop order,
the suspension of the qualification of the Friede Goldman Common Stock issuable
in connection with the Merger for offering or sale in any jurisdiction, or any
request by the SEC for amendment of the Proxy Statement or the Registration
Statement or comments thereon and responses thereto or requests by the SEC for
additional information.
(b) The information supplied by Friede Goldman for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of Friede Goldman and Halter Marine, (iii) the time of each of the
Stockholders' Meetings (as defined below), and (iv) the Effective Time, contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. If at any time prior to the Effective Time any event or
circumstance relating to Friede Goldman or any Friede Goldman Subsidiary, or
their respective officers or directors, should be discovered by Friede Goldman
which should be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, Friede Goldman shall promptly inform Halter
Marine. All documents that Friede Goldman is responsible for filing with the
SEC in connection with the transactions contemplated herein will comply as to
form and substance in all material respects with the applicable requirements of
the Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder.
(c) The information supplied by Halter Marine for inclusion in the
Registration Statement and the Proxy Statement shall not, at (i) the time the
Registration Statement is declared effective, (ii) the time the Proxy Statement
(or any amendment thereof or supplement thereto) is first mailed to the
stockholders of Halter Marine and Friede Goldman, (iii) the time of each of the
Stockholders' Meetings, and (iv) the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. If at any time prior to the Effective Time any event or
circumstance relating to Halter Marine or any Halter Marine Subsidiary, or their
respective officers or directors, should be discovered by Halter Marine which
should be set forth in an amendment or a supplement to the Registration
Statement or Proxy Statement, Halter Marine shall promptly inform Friede
Goldman. All documents that Halter Marine is responsible for filing with the
SEC in connection with the transactions contemplated herein will comply as to
form and substance in all material respects with the applicable requirements of
the Securities Act and the rules and regulations thereunder and the Exchange Act
and the rules and regulations thereunder.
SECTION 6.02. Stockholders' Meetings. Halter Marine shall call and
hold a meeting of its stockholders (the "Halter Marine Meeting") and Friede
Goldman shall call and hold a meeting of its stockholders (the "Friede Goldman
Meeting" and, together with the Halter Marine Meeting, the "Stockholders'
Meetings") as promptly as practicable for the
purpose of obtaining the Halter Marine Stockholder Approval and the Friede
Goldman Stockholder Approval, respectively, Friede Goldman and Halter Marine
shall use their best efforts to hold the Stockholders' Meetings on the same day
and as soon as practicable after the date on which the Registration Statement
becomes effective.
SECTION 6.03. Access to Information; Confidentiality. (a) Except as
required pursuant to any confidentiality agreement or similar agreement or
arrangement to which Halter Marine or Friede Goldman or any of their respective
subsidiaries is a party or pursuant to applicable Law or the regulations or
requirements of any stock exchange or other regulatory organization with whose
rules the parties are required to comply, from the date of this Agreement to the
Effective Time, Halter Marine and Friede Goldman shall (and shall cause their
respective subsidiaries to): (i) provide to the other party (and the other
party's officers, directors, employees, accountants, consultants, legal counsel,
agents and other representatives, collectively, "Representatives") access, at
reasonable times upon prior notice, to its and its Subsidiaries' officers,
employees, agents, properties, offices, facilities books and records and (ii)
furnish promptly such information concerning its and its Subsidiaries' business,
properties, contracts, assets, liabilities and personnel as the other party or
its Representatives may reasonably request. No investigation conducted pursuant
to this Section 6.03 shall affect or be deemed to modify any representation or
warranty made in this Agreement.
(b) The parties shall comply with, and shall cause their respective
Representatives to comply with, all of their respective obligations under the
Confidentiality Agreement dated October 23, 1998 between Halter Marine and
Friede Goldman (the "Confidentiality Agreement") with respect to the information
disclosed pursuant to this Section 6.03.
SECTION 6.04. No Solicitation by Halter Marine. (a) Halter Marine
shall not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any of its directors, officers or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or encourage (including
by way of furnishing information), or take any other action designed to
facilitate, any inquiries or the making of any proposal which constitutes any
Halter Marine Takeover Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding any Halter Marine Takeover Proposal;
provided, however, that if the Board of Directors of Halter Marine determines in
good faith, after consultation with outside counsel, that it is necessary to do
so in order to comply with its fiduciary duties to Halter Marine's stockholders
under applicable law, Halter Marine may, in response to a Halter Marine Superior
Proposal (as defined in Section 6.04(b)) which was not solicited by it or which
did not otherwise result from a breach of this Section 6.04(a), and subject to
providing prior written notice of its decision to take such action to Friede
Goldman (the "Halter Marine Notice") (x) furnish information with respect to
Halter Marine and its subsidiaries to any person making a Halter Marine Superior
Proposal pursuant to a customary confidentiality agreement (as determined by
Halter Marine after consultation with its outside counsel) and (y) participate
in discussions or negotiations
regarding such Halter Marine Superior Proposal. For purposes of this Agreement,
a "Halter Marine Takeover Proposal" means any inquiry, proposal or offer from
any person relating to any direct or indirect acquisition or purchase of a
business that constitutes 15% or more of the net revenues, net income or the
assets of Halter Marine and its subsidiaries, taken as a whole, or 15% or more
of any class of equity securities of Halter Marine or any of its subsidiaries,
any tender offer or exchange offer that if consummated would result in any
person beneficially owning 15% or more of any class of equity securities of
Halter Marine or any of its subsidiaries, or any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving Halter Marine or any of its subsidiaries, other than the transactions
contemplated by this Agreement.
(b) Except as expressly permitted by this Agreement, neither the Board
of Directors of Halter Marine nor any committee thereof shall (i) withdraw or
modify, or propose publicly to withdraw or modify, in a manner adverse to Friede
Goldman, the recommendation by such Board of Directors or such committee of the
Merger or this Agreement, (ii) approve or recommend, or propose publicly to
recommend, any Halter Marine Takeover Proposal or (iii) cause Halter Marine to
enter into any letter of intent, agreement in principle, acquisition agreement
or other similar agreement (each, a "Halter Marine Acquisition Agreement")
related to any Halter Marine Takeover Proposal. Notwithstanding the foregoing,
in the event that the Board of Directors of Halter Marine receives a Halter
Marine Superior Proposal, the Board of Directors of Halter Marine may (subject
to this and the following sentences) terminate this Agreement (and concurrently
with or after such termination, if it so chooses, cause Halter Marine to enter
into any Halter Marine Acquisition Agreement with respect to any Halter Marine
Superior Proposal) but only after the fifth business day following Friede
Goldman's receipt of written notice advising Friede Goldman that the Board of
Directors of Halter Marine is prepared to accept a Halter Marine Superior
Proposal, specifying the material terms and conditions of such Halter Marine
Superior Proposal and identifying the person making such Halter Marine Superior
Proposal. For purposes of this Agreement, a "Halter Marine Superior Proposal"
means any written proposal made by a third party (i) to acquire, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction, for consideration consisting of cash and/or securities,
more than 50% of the combined voting power of the shares of Halter Marine Common
Stock then outstanding or all or substantially all the assets of Halter Marine,
(ii) that is otherwise on terms which the Board of Directors of Halter Marine
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be more favorable to Halter
Marine's stockholders than the Merger, (iii) for which financing, to the extent
required, is then committed or which, in the good faith judgment of the Board of
Directors of Halter Marine, is reasonably capable of being obtained by such
third party and (iv) for which, in the good faith judgment of the Board of
Directors of Halter Marine, no regulatory approvals are required, including
antitrust approvals, that could not reasonably be expected to be obtained.
(c) In addition to the obligations of Halter Marine set forth in
paragraphs (a) and (b) of this Section 6.04, Halter Marine shall as promptly as
practicable (and in no event
later than 24 hours) advise Friede Goldman orally and in writing of any request
for information or of any Halter Marine Takeover Proposal, including the
material terms and conditions of such request or Halter Marine Takeover Proposal
and the identity of the person making such request or Halter Marine Takeover
Proposal. Halter Marine will keep Friede Goldman fully informed of the status
and details (including amendments or proposed amendments) of any such request or
Halter Marine Takeover Proposal on a daily basis or more frequently as may be
reasonably requested by Friede Goldman.
(d) Nothing contained in this Section 6.04 shall prohibit Halter
Marine from taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure
to Halter Marine's stockholders if, in the good faith judgment of the Board of
Directors of Halter Marine, after consultation with outside counsel, failure so
to disclose would be inconsistent with its fiduciary obligations under
applicable law.
SECTION 6.05. No Solicitation by Friede Goldman. (a) Friede Goldman
shall not, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any of its directors, officers or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly through another person, (i) solicit, initiate or encourage (including
by way of furnishing information), or take any other action designed to
facilitate, any inquiries or the making of any proposal which constitutes any
Friede Goldman Takeover Proposal (as defined below) or (ii) participate in any
discussions or negotiations regarding any Friede Goldman Takeover Proposal;
provided, however, that if the Board of Directors of Friede Goldman determines
in good faith, after consultation with outside counsel, that it is necessary to
do so in order to comply with its fiduciary duties to Friede Goldman's
stockholders under applicable law, Friede Goldman may, in response to a Friede
Goldman Superior Proposal (as defined in Section 6.05(b)) which was not
solicited by it or which did not otherwise result from a breach of this Section
6.05(a), and subject to providing prior written notice of its decision to take
such action to Halter Marine (the "Friede Goldman Notice") (x) furnish
information with respect to Friede Goldman and its subsidiaries to any person
making a Friede Goldman Superior Proposal pursuant to a customary
confidentiality agreement (as determined by Friede Goldman after consultation
with its outside counsel) and (y) participate in discussions or negotiations
regarding such Friede Goldman Superior Proposal. For purposes of this
Agreement, "Friede Goldman Takeover Proposal" means any inquiry, proposal or
offer from any person relating to any direct or indirect acquisition or purchase
of a business that constitutes 15% or more of the net revenues, net income or
the assets of Friede Goldman and its subsidiaries, taken as a whole, or 15% or
more of any class of equity securities of Friede Goldman or any of its
subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 15% or more of any class of equity
securities of Friede Goldman or any of its subsidiaries, or any merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving Friede Goldman or any of its subsidiaries,
other than the transactions contemplated by this Agreement.
(b) Except as expressly permitted by this Section 6.05, neither the
Board of Directors of Friede Goldman nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Halter Marine, the recommendation by such Board of Directors or such
committee of the Merger, this Agreement or the issuance of Friede Goldman Common
Stock in connection with the Merger, (ii) approve or recommend, or propose
publicly to recommend, any Friede Goldman Takeover Proposal or (iii) cause
Friede Goldman to enter into any letter of intent, agreement in principle,
acquisition agreement or other similar agreement (each, a "Friede Goldman
Acquisition Agreement") related to any Friede Goldman Takeover Proposal.
Notwithstanding the foregoing, in the event that the Board of Directors of
Friede Goldman receives a Friede Goldman Superior Proposal, the Board of
Directors of Friede Goldman may (subject to this and the following sentences)
terminate this Agreement (and concurrently with or after such termination, if it
so chooses, cause Friede Goldman to enter into any Friede Goldman Acquisition
Agreement with respect to any Friede Goldman Superior Proposal) but only after
the fifth business day following Halter Marine's receipt of written notice
advising Halter Marine that the Board of Directors of Friede Goldman is prepared
to accept a Friede Goldman Superior Proposal, specifying the material terms and
conditions of such Friede Goldman Superior Proposal and identifying the person
making such Friede Goldman Superior Proposal. For purposes of this Agreement, a
"Friede Goldman Superior Proposal" means any written proposal made by a third
party (i) to acquire, directly or indirectly, including pursuant to a tender
offer, exchange offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction, for
consideration consisting of cash and/or securities, more than 50% of the
combined voting power of the shares of Friede Goldman Common Stock then
outstanding or all or substantially all of the assets of Friede Goldman, (ii)
that is otherwise on terms which the Board of Directors of Friede Goldman
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be more favorable to Friede
Goldman's stockholders than the Merger, (iii) for which financing, to the extent
required, is then committed or which, in the good faith judgment of the Board of
Directors of Friede Goldman, is reasonably capable of being obtained by such
third party and (iv) for which, in the good faith judgment of the Board of
Directors of Friede Goldman, no regulatory approvals are required, including
antitrust approvals, that could not reasonably be expected to be obtained.
(c) In addition to the obligation of Friede Goldman set forth in
paragraphs (a) and (b) of this Section 6.05, Friede Goldman shall as promptly as
practicable (and in no event later than 24 hours) advise Halter Marine orally
and in writing of any request for information or of any Friede Goldman Takeover
Proposal, including the material terms and conditions of such request or Friede
Goldman Takeover Proposal and the identify of the person making such request or
Friede Goldman Takeover Proposal. Friede Goldman will keep Halter Marine fully
informed of the status and details (including amendments or proposed amendments)
of any such request or Friede Goldman Takeover Proposal on a daily basis or more
frequently as may be reasonably requested by Halter Marine.
(d) Nothing contained in this Section 6.05 shall prohibit Friede
Goldman from taking and disclosing to its stockholders a position contemplated
by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to Friede
Goldman's stockholders if, in the good faith judgment of the Board of Directors
of Friede Goldman, after consultation with outside counsel, failure so to
disclose would be inconsistent with its fiduciary obligations under applicable
law.
SECTION 6.06. Reasonable Efforts. (a) (i) Each of Halter Marine
and Friede Goldman shall use all reasonable efforts to (A) take, or cause to be
taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable Law or otherwise to consummate
and make effective the transactions contemplated by this Agreement as promptly
as practicable, (B) obtain from any Governmental Entities any consents,
licenses, permits, waivers, approvals, authorizations or orders required to be
obtained or made by Friede Goldman or Halter Marine or any of their
subsidiaries, or to avoid any action or proceeding by any Governmental Entity
(including, without limitation, those in connection with the HSR Act), in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the transactions contemplated herein, including, without
limitation, the Merger, and (iii) make all necessary filings, and thereafter
make any other required submissions, with respect to this Agreement and the
Merger required under (x) the Securities Act and the Exchange Act, and any other
applicable federal or state securities Laws, (y) the HSR Act and (z) any other
applicable Law; provided that Friede Goldman and Halter Marine shall cooperate
with each other in connection with the making of all such filings, including
providing copies of all such documents to the non-filing party and its advisors
prior to filing and, if requested, to accept all reasonable additions, deletions
or changes suggested in connection therewith. Halter Marine and Friede Goldman
shall furnish to each other all information required for any application or
other filing to be made pursuant to the rules and regulations of any applicable
Law (including all information required to be included in the Proxy Statement
and the Registration Statement) in connection with the transactions contemplated
by this Agreement. Halter Marine and Friede Goldman shall not take any action,
or refrain from taking any action, the effect of which would be to delay or
impede the ability of Halter Marine and Friede Goldman to consummate the
transactions contemplated by this Agreement.
(ii) Each of the parties hereto agrees, and shall cause each of its
respective subsidiaries to cooperate and to use their respective reasonable best
efforts to obtain promptly any government clearances required for completion of
the transactions (including through compliance with the HSR Act and any
applicable foreign governmental reporting requirements), to respond to any
government requests for information, and to contest and resist any action,
including any legislative, administrative or judicial action, and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order (whether temporary, preliminary or permanent) (an "Order") that
restricts, prevents or prohibits the consummation of the Merger or any other
transactions contemplated by this Agreement. The parties hereto will consult
and cooperate with one another, and consider in good faith the views of one
another, in connection with any analyses, appearances, presentations, memoranda,
briefs, arguments, opinions and proposals made or submitted by or in behalf of
any party hereto in connection with proceedings under or relating to the HSR Act
or any other federal, state or foreign antitrust or fair trade law. Each party
shall promptly
notify the other party of any communication to that party from any Governmental
Entity in connection with any required filing with, or approval or review by,
such Governmental Entity in connection with the Merger and permit the other
party to review in advance any such proposed communication to any Governmental
Entity. Neither party shall agree to participate in any meeting with any
Governmental Entity in respect of any such filings, investigation or other
inquiry unless it consults with the other party in advance and, to the extent
permitted by such Governmental Entity, gives the other party the opportunity to
attend and participate thereat.
(iii) Notwithstanding any provision of paragraph (i) or paragraph
(ii) above, neither Halter Marine nor Friede Goldman shall be required to take
any action pursuant to this Section 6.06 that would require either Halter Marine
or Friede Goldman to sell, divest, dispose of or hold separate any assets
(including any shipyard) or business unit.
(iv) In the event any claim, action, suit, investigation or other
proceeding by any governmental body or other person or other legal or
administrative proceeding is commenced that questions the validity or legality
of the transactions contemplated hereby or seeks damages in connection
therewith, before the Effective Time, each of Halter Marine and Friede Goldman
agree to cooperate and use their reasonable efforts to defend against and
respond thereto.
(b) (i) Halter Marine and Friede Goldman shall give (or shall cause
their respective subsidiaries to give) any notices to third parties, and use,
and cause their respective subsidiaries to use, all reasonable efforts to obtain
any third party consents, (A) necessary, proper or advisable to consummate the
transactions contemplated in this Agreement, (B) disclosed or required to be
disclosed in the Halter Marine Disclosure Schedule or the Friede Goldman
Disclosure Schedule, as the case may be, or (C) required to prevent a Halter
Marine Material Adverse Effect from occurring prior to or after the Effective
Time or a Friede Goldman Material Adverse Effect from occurring after the
Effective Time.
(ii) In the event that either party shall fail to obtain any third
party consent described in subsection (b)(i) above, such party shall use all
reasonable efforts, and shall take any such actions reasonably requested by the
other party hereto, to minimize any adverse effect upon Halter Marine and Friede
Goldman, their respective subsidiaries, and their respective businesses
resulting, or which could reasonably be expected to result after the Effective
Time, from the failure to obtain such consent.
(c) From the date of this Agreement until the Effective Time, each
party shall promptly notify the other party in writing of any pending or, to the
knowledge of such notifying party, threatened action, proceeding or
investigation by any Governmental Entity or any other person (i) challenging or
seeking material damages in connection with the Merger or the conversion of
Halter Marine Common Stock into Friede Goldman Common Stock pursuant to the
Merger or (ii) seeking to restrain or prohibit the consummation of the Merger or
otherwise limit the right of Friede Goldman to own or operate all or any portion
of the businesses or assets of Halter Marine or its subsidiaries, which in
either case is reasonably likely to have a Halter Marine Material Adverse
Effect or a Friede Goldman Material Adverse
Effect prior to or after the Effective Time.
SECTION 6.07. Stock Options and Other Stock Awards; Employee Benefit
Plans. (a) Prior to the Effective Time, Halter Marine shall take such action
as may be necessary to cause each unvested option to purchase shares of Halter
Marine Common Stock (each, a "Halter Marine Option") outstanding as of the
Effective Time under Halter Marine's Amended and Restated 1996 Stock Option and
Incentive Plan (the "Halter Marine 1996 Plan"), copies of which (as amended
through the date hereof) have heretofore been provided to Friede Goldman by
Halter Marine, to be fully vested and immediately exerciseable in accordance
with the terms of the Halter Marine 1996 Plan. At least thirty (30) days prior
to the Effective Time, Halter Marine shall give written notice to each holder of
Halter Marine Options pursuant to Section 9(d) of the Halter Marine 1996 Plan
for the purpose of fixing a date which is not less than thirty (30) days after
the date of the giving of such notice and which is prior to the Effective Time
such that, after such date, any unexercised Halter Marine Option shall
terminate, be canceled and be of no further effect.
(b) From and after the Effective Time, the Friede Goldman Benefit
Plans and the Halter Marine Benefit Plans in effect as of the Effective Time
shall, subject to applicable law, the terms of this Agreement and the terms of
such plans, remain in effect with respect to the employees of Friede Goldman or
Halter Marine (or their respective subsidiaries), as the case may be, until such
time as Friede Goldman shall adopt new employee benefit plans and arrangements
with respect to employees of the Surviving Corporation and its subsidiaries (the
"Replacement Plans"). From and after the Effective Time, Friede Goldman shall,
and shall cause its subsidiaries to, honor in accordance with their terms all
Friede Goldman Benefit Plans and Halter Marine Benefit Plans, respectively, as
amended as permitted hereunder, and all other contracts, arrangements and
commitments that apply to current or former employees or directors of Friede
Goldman, Halter Marine or their respective subsidiaries.
(c) Prior to the Effective Time, a committee (consisting of the
Chairman and Chief Executive Officer of Halter Marine and the Chairman and Chief
Executive Officer of Friede Goldman and an equal number of representatives from
Halter Marine and Friede Goldman) shall be formed to conduct a review of Friede
Goldman's and Halter Marine's respective employee benefit and compensation plans
and programs in order to coordinate the provision of benefits and compensation
to the employees of the Friede Goldman and its subsidiaries after the Effective
Time and to eliminate duplicative benefits, including, without limitation,
through the establishment of the Replacement Plans. The Replacement Plans
shall, in all material respects, (i) treat similarly situated employees of
Friede Goldman and Halter Marine and their respective subsidiaries on a
substantially equivalent basis, taking into account all relevant factors,
including, without limitation, duties, geographic location, tenure,
qualifications and abilities, and (ii) not discriminate between employees who
were covered by the Friede Goldman Benefit Plans, on the one hand, and those
covered by the Halter Marine Benefit Plans, on the other, at the Effective Time.
Notwithstanding the foregoing, the employee benefit plans and arrangements
maintained for current and former employees of Friede Goldman, Halter Marine and
their respective subsidiaries following the Effective Time
shall provide, until any applicable Replacement Plan has been implemented (or,
if earlier, through the first anniversary of the Effective Time), a level of
compensation and benefits that is substantially comparable in the aggregate to
that provided under the Friede Goldman Benefit Plans or the Halter Marine
Benefit Plans, as the case may be, as in effect immediately prior to the date of
this Agreement; provided, however, that changes may be made to such plans to the
extent necessary to comply with applicable law.
(d) Employees of Friede Goldman, Halter Marine and their respective
subsidiaries shall receive credit for purposes of eligibility to participate,
vesting, benefit accrual and eligibility to receive benefits under any employee
benefit plan, program or arrangement established or maintained by the Surviving
Corporation or any of its subsidiaries for service accrued or deemed accrued
prior to the Effective Time with Friede Goldman, Halter Marine or any of their
respective subsidiaries, as the case may be; provided, however, that such
crediting of service shall not operate to duplicate any benefit or the funding
of any such benefit.
SECTION 6.08. Letters of Accountants. (a) Halter Marine shall use
its best efforts to cause to be delivered to Friede Goldman "cold comfort"
letters of Ernst & Young LLP, its independent public accountant, dated the date
on which the Registration Statement shall become effective and as of the
Effective Time, respectively, and addressed to Friede Goldman, in form and
substance reasonably satisfactory to Friede Goldman and reasonably customary in
scope and substance for letters delivered by independent public accountants in
connection with registration statements similar to the Registration Statement
and transactions such as those contemplated by this Agreement.
(b) Friede Goldman shall use its best efforts to cause to be delivered
to Halter Marine "cold comfort" letters of Arthur Andersen, LLP, its independent
public accountant, dated the date on which the Registration Statement shall
become effective and as of the Effective Time, respectively, and addressed to
Halter Marine, in form and substance reasonably satisfactory to Halter Marine
and reasonably customary in scope and substance for letters delivered by
independent public accountants in connection with registration statements
similar to the Registration Statement and transactions such as those
contemplated by this Agreement.
SECTION 6.09. Update Disclosure; Breaches. From and after the date
of this Agreement until the Effective Time, each party hereto shall promptly
notify the other party hereto by written update to its Disclosure Schedule of
(i) the occurrence, or non-occurrence, of any event that would be likely to
cause any condition to the obligations of any party to effect the Merger and the
other transactions contemplated by this Agreement not to be satisfied, or (ii)
the failure of Halter Marine or Friede Goldman, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it pursuant to this Agreement which would be likely to result in
any condition to the obligations of any party to effect the Merger and the other
transactions contemplated by this Agreement not to be satisfied; provided,
however, that the delivery of any notice pursuant to this Section 6.09 shall not
cure any breach of any representation or warranty requiring
disclosure of such matter prior to the date of this Agreement or otherwise limit
or affect the remedies available hereunder to the party receiving such notice.
SECTION 6.10. Public Announcements. Friede Goldman and Halter Marine
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to the Merger and shall not issue any
such press release or make any such public statement prior to such consultation,
except as may be required by Law or any listing agreement with the AMEX or the
NYSE.
SECTION 6.11. NYSE Listing. Friede Goldman shall promptly prepare
and submit to the NYSE a listing application covering the shares of Friede
Goldman Common Stock to be issued in the Merger, and shall use reasonable best
efforts to cause such shares to be approved for listing on the NYSE, subject to
official notice of issuance, prior to the Effective Time.
SECTION 6.12. Indemnification of Directors and Officers. (a) Friede
Goldman agrees that the indemnification obligations set forth in Friede
Goldman's Certificate and By-laws, in each case as of the date of this
Agreement, (i) shall be amended, effective as of the Effective Time, to the
fullest extent permissible under Mississippi law, to provide protections and
rights for the officers, directors, employees and agents of Friede Goldman and
for persons serving at the request of Friede Goldman as officers, directors,
employees or agents of other corporations, at least as favorable as the
protections and rights provided under Halter Marine's Certificate of
Incorporation and By-laws to officers, directors, employees and agents of Halter
Marine and such other persons serving at the request of Halter Marine, (ii) as
so amended, shall survive the Merger and (iii) shall not be further amended,
repealed or otherwise modified for a period of six years after the Effective
Time in any manner that would adversely affect the rights thereunder of the
individuals who on or prior to the Effective Time were directors, officers,
employees or agents of Halter Marine or its subsidiaries.
(b) Halter Marine shall, to the fullest extent permitted under
applicable Law and regardless of whether the Merger becomes effective, indemnify
and hold harmless, and, after the Effective Time, the Surviving Corporation
shall, to the fullest extent permitted under applicable Law, indemnify and hold
harmless, each present and former director, officer, trustee, fiduciary,
employee or agent of Halter Marine and each Halter Marine Subsidiary and each
such person who served at the request of Halter Marine or any Halter Marine
Subsidiary as a director, officer, trustee, partner, fiduciary, employee or
agent of another corporation, partnership, joint venture, trust, pension or
other employee benefit plan or enterprise (collectively, the "Halter Marine
Indemnified Parties") against all costs and expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
settlement amounts paid in connection with any claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), whether
civil, administrative or investigative, arising out of or pertaining to any
action or omission in their capacity as an officer or director, in each case
occurring before the Effective Time (including the transactions contemplated by
this Agreement). Without limiting the foregoing, in the event of any such
claim, action, suit, proceeding or investigation, (i) Halter Marine or the
Surviving
Corporation, as the case may be, shall pay the fees and expenses of counsel
selected by any Halter Marine Indemnified Party, which counsel shall be
reasonably satisfactory to Halter Marine or to the Surviving Corporation, as the
case may be, promptly after statements therefor are received (unless the
Surviving Corporation shall elect to defend such action) and (ii) Halter Marine
and the Surviving Corporation shall cooperate in the defense of any such matter.
(c) For five years from the Effective Time, the Surviving Corporation
shall provide to the current directors and officers of Halter Marine and Friede
Goldman liability insurance protection with an aggregate limitation on liability
of no less then $50 million and having customary terms, provisions, conditions
and exclusions.
(d) Friede Goldman shall, to the fullest extent permitted under
applicable Law and regardless of whether the Merger becomes effective, indemnify
and hold harmless, each present and former director, officer, trustee,
fiduciary, employee or agent of Friede Goldman and each Friede Goldman
Subsidiary and each such person who served at the request of Friede Goldman or
any Friede Goldman Subsidiary as a director, officer, trustee, partner,
fiduciary, employee or agent of another corporation, partnership, joint venture,
trust, pension or other employee benefit plan or enterprise (collectively, the
"Friede Goldman Indemnified Parties") against all costs and expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and settlement amounts paid in connection with any claim, action,
suit, proceeding or investigation (whether arising before or after the Effective
Time), whether civil, administrative or investigative, arising out of or
pertaining to any action or omission in their capacity as an officer or
director, in each case occurring before the Effective Time (including the
transactions contemplated by this Agreement). Without limiting the foregoing,
in the event of any such claim, action, suit, proceeding or investigation, (i)
Friede Goldman shall pay the fees and expenses of counsel selected by any Friede
Goldman Indemnified Party, which counsel shall be reasonably satisfactory to
Friede Goldman promptly after statements therefor are received (unless Friede
Goldman shall elect to defend such action) and (ii) Friede Goldman shall
cooperate in the defense of any such matter.
(e) In the event Halter Marine or the Surviving Corporation or any of
their respective successors or assigns (i) consolidates with or merges into any
other person or shall not be the continuing or surviving corporation or entity
in such consolidation or merger or (ii) transfers all or substantially all its
properties and assets to any person, then, and in each case, proper provision
shall be made so that the successors and assigns of Halter Marine or the
Surviving Corporation, as the case may be, honor the indemnification obligations
set forth in this Section 6.12.
(f) The obligations of Halter Marine and the Surviving Corporation
under this Section 6.12 shall not be terminated or modified in such a manner as
to adversely affect any director, officer, employee, agent or other person to
whom this Section 6.12 applies without the consent of such affected director,
officer, employees, agents or other persons (it being expressly agreed that each
such director, officer, employee, agent or other person to whom this Section
6.12 applies shall be third-party beneficiaries of this Section 6.12).
SECTION 6.13. Plan of Reorganization. The Agreement is intended to
constitute a "plan of reorganization" within the meaning of section 1.368-2(g)
of the income tax regulations promulgated under the Code. From and after the
date hereof and until the Effective Time, each party hereto shall use its
reasonable best efforts to cause the Merger to qualify, and will not knowingly
take any actions or cause any actions to be taken which could prevent the Merger
from qualifying, as a reorganization under the provisions of section 368(a) of
the Code. Following the Effective Time, neither the Surviving Corporation,
Friede Goldman nor any of their affiliates shall knowingly take any action or
knowingly cause any action to be taken which would cause the Merger to fail to
qualify as a reorganization under section 368(a) of the Code.
SECTION 6.14. Headquarters; Name. As promptly as reasonably
practicable after the Effective Time, Friede Goldman and Halter Marine shall
take all action necessary such that their combined headquarters shall be located
at Gulfport, Mississippi; provided that nothing in this Section 6.14 shall
prohibit Friede Goldman from moving the combined headquarters of Friede Goldman
and Halter Marine following the Effective Time if the Board of Directors of
Friede Goldman determines that it is necessary or advisable to relocate the
combined headquarters. Effective as of the Effective Time, Friede Goldman shall
amend its Articles of Incorporation such that its name shall be changed to
Friede Goldman Halter Marine International Inc.
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party Under This
Agreement. The respective obligations of each party to effect the Merger and
the other transactions contemplated herein shall be subject to the satisfaction
at or prior to the Effective Time of the following conditions, any or all of
which may be waived, in whole or in part, to the extent permitted by applicable
Law:
(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceedings
for that purpose shall have been initiated or, to the knowledge of Friede
Goldman or Halter Marine, threatened by the SEC.
(b) Stockholder Approval. The Friede Goldman Stockholder Approval and
the Halter Marine Stockholder Approval shall have been obtained.
(c) No Order. (i) No Governmental Entity or federal or state court
of competent jurisdiction shall have enacted, issued, promulgated, enforced
or entered any statute, rule, regulation, executive order, decree,
judgment, injunction or other order (whether temporary, preliminary or
permanent), in any case which is in effect and
which prevents or prohibits consummation of the Merger or any other
transactions contemplated in this Agreement.
(ii) No Governmental Entity shall have instituted any action or
proceeding (which remains pending at what would otherwise be the Closing
Date) or threatened to institute any action or proceeding in each case
before any United States court or other governmental body of competent
jurisdiction seeking to enjoin, restrain or otherwise prohibit consummation
of the transactions contemplated by this Agreement.
(d) Consents and Approvals. All consents, approvals and
authorizations set forth in Section 3.04 or 4.04 or the related sections of
the Halter Marine Disclosure Schedule or the Friede Goldman Disclosure
Schedule required to be obtained to consummate the Merger shall have been
obtained, except for such consents, approvals and authorizations the
failure of which to obtain would not have a Halter Marine Material Adverse
Effect or a Friede Goldman Material Adverse Effect after the Effective
Time.
(e) HSR Act. The applicable waiting period, together with any
extensions thereof, under the HSR Act shall have expired or been terminated
without any action being taken, or any agreement having been entered into
by Halter Marine, Friede Goldman or any of their respective subsidiaries or
any consent decree or other order having been issued by any Governmental
Entity, to sell, divest, dispose of or hold separate any assets (including
any shipyard) or business unit of Halter Marine, Friede Goldman or any of
their respective subsidiaries.
(f) NYSE. The shares of Friede Goldman Common Stock issuable to
Halter Marine's stockholders in the Merger shall have been approved for
listing on the NYSE subject to official notice of issuance.
SECTION 7.02. Additional Conditions to Obligations of Friede Goldman.
The obligations of Friede Goldman to effect the Merger and the other
transactions contemplated herein are also subject to the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Halter Marine contained in this Agreement, without giving
effect to any update to the Halter Marine Disclosure Schedule under Section
6.09, shall be true and correct in all material respects (except that where
any statement in a representation or warranty expressly includes a standard
of materiality, such statement shall be true and correct in all respects
giving effect to such standard) as of the Effective Time as though made on
and as of the Effective Time, except that those representations and
warranties which address matters only as of a particular date shall remain
true and correct in all material respects (except that where any statement
in a representation or warranty expressly includes a standard of
materiality, such statement shall be true and correct in all respects
giving effect to such standard) as of such date. Friede Goldman shall have
received a certificate of the Chief Executive Officer or Chief Financial
Officer of Halter Marine to that effect.
(b) Agreements and Covenants. Halter Marine shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time. Friede Goldman shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer of
Halter Marine to that effect.
(c) Tax Opinion. Friede Goldman shall have received the opinion of
Andrews & Kurth L.L.P., special counsel to Friede Goldman, dated the date
of the Effective Time and in form and substance reasonably satisfactory to
Friede Goldman, based upon facts, representations and assumptions set forth
in such opinion which are consistent with the state of facts existing at
the Effective Time, to the effect that the Merger will be treated for
federal income tax purposes as a reorganization qualifying under the
provisions of Section 368(a) of the Code, and Friede Goldman and Halter
Marine will each be a party to the reorganization. In rendering such
opinion, counsel may require and rely upon representations contained in
certificates of officers of Friede Goldman, Halter Marine and certain
stockholders of Friede Goldman and Halter Marine.
(d) Spin-Off Opinion. Friede Goldman shall have received an opinion
of Andrews & Kurth L.L.P. or other counsel reasonably satisfactory to
Friede Goldman, dated as of the date of the Effective Time and in form and
substance reasonably satisfactory to Friede Goldman, on the basis of
certain facts, representations from Friede Goldman, Halter Marine and their
respective employees and assumptions set forth in such opinion, to the
effect that the Merger pursuant to this Agreement and in accordance with
applicable state law will not adversely affect the federal income tax
consequences determined by the IRS in the private letter ruling issued to
Trinity Industries, Inc. on January 17, 1997.
(e) Accountant Letters. Friede Goldman shall have received from
Halter Marine "cold comfort" letters of Ernst & Young, LLP, dated the date
on which the Registration Statement shall become effective and the
Effective Time, respectively, and addressed to Friede Goldman, in form and
substance satisfactory to Friede Goldman, and reasonably customary in scope
and substance for letters delivered by independent public accountants in
connection with registration statements similar to the Registration
Statement and transactions such as those contemplated by this Agreement.
(f) Fairness Opinion. At the time the Proxy Statement is mailed to
Friede Goldman stockholders in connection with the Friede Goldman Meeting,
the opinion of Jefferies referred to in Section 4.14 shall not have been
modified in any manner materially adverse to Friede Goldman or withdrawn.
SECTION 7.03. Additional Conditions to Obligations of Halter Marine.
The
obligation of Halter Marine to effect the Merger and the other transactions
contemplated in this Agreement is also subject to the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Friede Goldman contained in this Agreement, without giving
effect to any update to the Friede Goldman Disclosure Schedule under
Section 6.09, shall be true and correct in all material respects (except
that where any statement in a representation or warranty expressly includes
a standard of materiality, such statement shall be true and correct in all
respects giving effect to such standard) as of the Effective Time as though
made on and as of the Effective Time, except that those representations and
warranties which address matters only as of a particular date shall remain
true and correct in all material respects (except that where any statement
in a representation or warranty expressly includes a standard of
materiality, such statement shall be true and correct in all respects
giving effect to such standard) as of such date. Halter Marine shall have
received a certificate of the Chief Executive Officer or Chief Financial
Officer of Friede Goldman to that effect.
(b) Agreements and Covenants. Friede Goldman shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time. Halter Marine shall have received a
certificate of the Chief Executive Officer or Chief Financial Officer of
Friede Goldman to that effect.
(c) Stockholder's Agreement. The Stockholder's Agreement shall remain
in full force and effect and shall not have been rescinded or repudiated by
any party thereto and all covenants therein to be complied with on or prior
to the Effective Time shall have been complied with.
(d) Tax Opinion. Halter Marine shall have received the opinion of
Shearman & Sterling, dated the date of the Effective Time, in form and
substance reasonably satisfactory to Halter Marine based upon facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing at the Effective Time, to the
effect that the Merger will be treated for federal income tax purposes as a
reorganization qualifying under the provisions of section 368(a) of the
Code, and Friede Goldman and Halter Marine will each be a party to the
reorganization. In rendering such opinion, counsel may require and rely
upon representations contained in certificates of officers of Friede
Goldman, Halter Marine and certain stockholders of Friede Goldman and
Halter Marine.
(e) Accountant Letters. Halter Marine shall have received from Friede
Goldman "cold comfort" letters of Arthur Andersen, LLP, dated the date on
which the Registration Statement shall become effective and the Effective
Time, respectively, and addressed to Halter Marine, in form and substance
satisfactory to Halter Marine, and reasonably customary in scope and
substance for letters delivered by independent public accountants in
connection with registration statements similar to the Registration
Statement and transactions such as those contemplated by this Agreement.
(f) Fairness Opinion. At the time the Proxy Statement is mailed to
Halter Marine stockholders in connection with the Halter Marine Meeting,
the opinion of DLJ referred to in Section 3.14 shall not have been modified
in any manner materially adverse to Halter Marine or withdrawn.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after the Halter Marine
Stockholder Approval or the Friede Goldman Stockholder Approval:
(a) by mutual written consent of Friede Goldman and Halter Marine;
(b) by either Friede Goldman or Halter Marine:
(i) if the Merger shall not have been consummated by March 31,
2000; provided, however, that the right to terminate this Agreement
pursuant to this Section 8.01(b)(i) shall not be available to any
party whose failure to perform any of its obligations under this
Agreement results in the failure of the Merger to be consummated by
such time;
(ii) if the approval of the Halter Marine Stockholder Approval
shall not have been obtained at the Halter Marine Meeting duly
convened therefor or at any adjournment or postponement thereof;
(iii) if the Friede Goldman Stockholder Approval shall not have
been obtained at the Friede Goldman Meeting duly convened therefor or
at any adjournment or postponement thereof; or
(iv) if there shall be any law or regulation that makes
consummation of the Merger illegal or otherwise prohibited or if any
judgment, injunction, order or decree enjoining any party from
consummating the Merger is entered and such judgment, injunction,
order or decree shall have become final and non-appealable.
(c) by Friede Goldman, if (i) Halter Marine shall have breached or
failed to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to the failure of a
condition set forth in Section 7.03(a) or (b), and (B) is incapable of
being cured by Halter Marine or is not cured within 30 days of notice of
such breach or failure or (ii) if the opinion of Jefferies referred to in
Section 4.14 shall have been modified in any manner materially adverse to
Friede Goldman or withdrawn at any time prior to the time of mailing of the
Proxy Statement to the Friede Goldman stockholders in connection with the
Friede Goldman Meeting;
(d) by Friede Goldman in accordance with Section 6.05(b); provided
that, in order for the termination of this Agreement pursuant to this
paragraph (d) to be deemed effective, Friede Goldman shall have complied
with all provisions contained in Section 6.05, including the notice
provisions therein, and with applicable requirements, including the payment
of the Termination Fee and Halter Marine Out-of Pocket Expenses, of Section
8.05;
(e) by Halter Marine, if (i) Friede Goldman shall have breached or
failed to perform in any material respect any of its representations,
warranties, covenants or other agreements contained in this Agreement,
which breach or failure to perform (A) would give rise to the failure of a
condition set forth in Section 7.02(a) or (b), and (B) is incapable of
being cured by Friede Goldman or is not cured within 30 days of notice of
such breach or failure or (ii) if the opinion of DLJ referred to in Section
3.14 shall have been modified in any manner materially adverse to Halter
Marine or withdrawn at any time prior to the time of mailing of the Proxy
Statement to the Halter Marine stockholders in connection with the Halter
Marine Meeting; or
(f) by Halter Marine in accordance with Section 6.04(b); provided
that, in order for the termination of this Agreement pursuant to this
paragraph (g) to be deemed effective, Halter Marine shall have complied
with all provisions of Section 6.04, including the notice provisions
therein, and with applicable requirements, including the payment of the
Termination Fee and Friede Goldman Out-of-Pocket Expenses, of Section 8.05.
SECTION 8.02. Effect of Termination. In the event of termination of
this Agreement by either Halter Marine or Friede Goldman as provided in Section
8.01, this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Friede Goldman or Halter Marine, other
than the provisions of Section 3.16, Section 4.16, Section 6.03(b), this Section
8.02, Section 8.05 and Article IX, which provisions will survive such
termination, and except to the extent that such termination results from the
willful and material breach by a party of any of its representations,
warranties, covenants or agreements set forth in this Agreement. No such
termination will release any party from any liabilities or damages resulting
from any willful or grossly negligent breach by that party of any provision of
this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that,
after the Halter Marine Stockholder Approval is obtained, no amendment may be
made which would reduce the amount or change the type of consideration into
which each share of Halter Marine Common Stock shall be converted
pursuant to this Agreement upon consummation of the Merger. This Agreement may
not be amended except by an instrument in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties of the other party contained herein or in
any document delivered pursuant hereto and (c) waive compliance by the other
party with any of the agreements or conditions contained herein; provided,
however, that after the Halter Marine Stockholder Approval is obtained, there
may not be, without further approval of such stockholders, any extension or
waiver of this Agreement or any portion thereof which reduces the amount or
changes the form of the consideration to be delivered to the holders of Halter
Marine Common Stock hereunder other than as contemplated by this Agreement. Any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party or parties to be bound thereby, but such extension
or waiver or failure to insist on strict compliance with an obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
SECTION 8.05. Fees. (a) Except as provided in this Section 8.05,
all fees and expenses incurred in connection with the Merger, this Agreement,
and the transactions contemplated by this Agreement shall be paid by the party
incurring such fees or expenses, whether or not the Merger is consummated,
except that each of Friede Goldman and Halter Marine shall bear and pay one-half
of the costs and expenses incurred in connection with (i) the preparation,
filing, printing and mailing of the Form S-4 and the Joint Proxy Statement
(including SEC filing fees) and (ii) the filings of the premerger notification
and report forms under the HSR Act (including filing fees). Friede Goldman
shall file any return with respect to, and shall pay, any state or local taxes
(including any penalties or interest with respect thereto), if any, which are
attributable to the transfer of the beneficial ownership of Halter Marine's real
property (collectively, the "Real Estate Transfer Taxes") as a result of the
Merger. Halter Marine shall cooperate with Friede Goldman in the filing of such
returns, including, in the case of Halter Marine, supplying in a timely manner a
complete list of all real property interests held by Halter Marine and any
information with respect to such property that is reasonably necessary to
complete such returns. The fair market value of any real property of Halter
Marine subject to the Real Estate Transfer Taxes shall be as agreed to between
Friede Goldman and Halter Marine.
(b) In the event that (i) a Halter Marine Takeover Proposal shall have
been made known to Halter Marine or any of its subsidiaries or has been made
directly to its stockholders generally or any person shall have publicly
announced an intention (whether or not conditional) to make a Halter Marine
Takeover Proposal and thereafter this Agreement is terminated by either Friede
Goldman or Halter Marine pursuant to Section 8.01(b)(i) or (ii) or (ii) this
Agreement is terminated by Halter Marine pursuant to Section 8.01(f), then
Halter Marine shall promptly, but in no event later than two days after the date
of such termination, pay Friede Goldman a fee equal to the sum of $6.5 million
(the "Termination Fee") plus the Friede Goldman Out-of-Pocket Expenses payable
by wire transfer of same day funds;
provided, however, that no Termination Fee shall be payable to Friede Goldman
pursuant to clause (i) of this paragraph (b) unless and until within 18 months
of such termination Halter Marine or any of its Subsidiaries enters into any
Halter Marine Acquisition Agreement or consummates any Halter Marine Takeover
Proposal (for the purposes of the foregoing proviso the terms "Halter Marine
Acquisition Agreement" and "Halter Marine Takeover Proposal" shall have the
meanings assigned to such terms in Section 6.04 except that the references to
15% in the definition of "Halter Marine Takeover Proposal" in Section 6.04(a)
shall be deemed to be references to 35% and "Halter Marine Takeover Proposal"
shall only be deemed to refer to a transaction involving Halter Marine, or with
respect to assets (including the shares of any subsidiary), of Halter Marine and
its Subsidiaries, taken as a whole, and not any of its Subsidiaries alone), in
which event the Termination Fee shall be payable upon the first to occur of such
events. "Friede Goldman Out-of-Pocket Expenses" means the lesser of (A) all
documented out-of-pocket expenses and fees incurred by Friede Goldman
(including, without limitation, fees and expenses payable to all legal,
accounting, financial, public relations and other professional advisers) arising
out of, in connection with or related to this Agreement and the transactions
contemplated herein and (B) $2 million. Halter Marine acknowledges that the
agreements contained in this Section 8.05(b) are an integral part of the
transactions contemplated by this Agreement, and that, without these agreements,
Friede Goldman would not enter into this Agreement; accordingly, if Halter
Marine fails promptly to pay the amount due pursuant to this Section 8.05(b),
and, in order to obtain such payment, Friede Goldman commences a suit which
results in a judgment against Halter Marine for the fee set forth in this
Section 8.05(b), Halter Marine shall pay to Friede Goldman its costs and
expenses (including attorneys' fees and expenses) in connection with such suit,
together with interest on the amount of the fee at the prime rate of Citibank
N.A. in effect on the date such payment was required to be made.
(c) In the event that (i) a Friede Goldman Takeover Proposal shall
have been made known to Friede Goldman or any of its subsidiaries or has been
made directly to its stockholders generally or any person shall have publicly
announced an intention (whether or not conditional) to make a Friede Goldman
Takeover Proposal and thereafter this Agreement is terminated by either Friede
Goldman or Halter Marine pursuant to Section 8.01(b)(i) or (iii) or (ii) this
Agreement is terminated by Friede Goldman pursuant to Section 8.01(d) then
Friede Goldman shall promptly, but in no event later than two days after the
date of such termination, pay Halter Marine the sum of the Termination Fee and
the Halter Marine Out-of-Pocket Expenses, payable by wire transfer of same day
funds; provided, however, that no Termination Fee shall be payable to Halter
Marine pursuant to clause (i) of this paragraph (c) unless and until within 18
months of such termination Friede Goldman or any of its subsidiaries enters into
any Friede Goldman Acquisition Agreement or consummates any Friede Goldman
Takeover Proposal (for the purposes of the foregoing proviso the terms "Friede
Goldman Acquisition Agreement" and "Friede Goldman Takeover Proposal" shall have
the meanings assigned to such terms in Section 6.05 except that the references
to 15% in the definition of "Friede Goldman Takeover Proposal" in Section
6.05(a) shall be deemed to be references to 35% and "Friede Goldman Takeover
Proposal" shall only be deemed to refer to a transaction involving Friede
Goldman, or with respect to assets (including the shares of any subsidiary), of
Friede Goldman and its subsidiaries, taken as a whole, and not any of its
subsidiaries alone), in which event the Termination Fee shall be payable upon
the first to occur of such events. "Halter Marine Out-of-Pocket Expenses" means
the lesser of (A) all documented out-of-pocket expenses and fees incurred by
Halter Marine (including, without limitation, fees and expenses payable to all
legal, accounting, financial, public relations and other professional advisers)
arising out of, in connection with or related to this Agreement and the
transactions contemplated herein and (B) $2 million. Friede Goldman
acknowledges that the agreements contained in this Section 8.05(c) are an
integral part of the transactions contemplated by this Agreement, and that,
without these agreements, Halter Marine would not enter into this Agreement;
accordingly, if Friede Goldman fails promptly to pay the amount due pursuant to
this Section 8.05(c), and, in order to obtain such payment, Halter Marine
commences a suit which results in a judgment against Friede Goldman for the fee
set forth in this Section 8.05(c), Friede Goldman shall pay to Halter Marine its
costs and expenses (including attorneys' fees and expenses) in connection with
such suit, together with interest on the amount of the fee at the prime rate of
Citibank N.A. in effect on the date such payment was required to be made.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Effective Time. This
Section 9.01 shall not limit any covenant or agreement of the parties which by
its terms contemplates performance after the Effective Time.
SECTION 9.02. Notices. All notices, requests, claims, demands and
other communications given or made pursuant hereto shall be given (and shall be
deemed to have been duly given upon receipt) or by delivery in person, by
facsimile, cable, telecopy, telegram or telex, or by registered or certified
mail (postage prepaid, return receipt requested) or nationally recognized
courier service to the respective parties at the following addresses (or at such
other address for a party as shall be specified in a notice given in accordance
with this Section 9.02):
(a) If to Friede Goldman, addressed to it at:
523 East Capitol Street, Suite 402
Jackson, Mississippi 39201
Telecopier No.: (601) 352-1107
Attention: General Counsel
With a copy to:
Andrews & Kurth L.L.P.
4200 Chase Tower
Houston, Texas 77002
Telecopier No.: (713) 220-4285
Attention: Thomas P. Mason, Esq.
(b) If to Halter Marine, addressed to it at:
13085 Industrial Seaway Road
Gulfport, Mississippi 39503
Telecopier No.: (228) 897-4866
Attention: General Counsel
With a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Telecopier No.: (212) 848-7179
Attention: John J. Madden, Esq.
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with the first-mentioned person;
(b) "beneficial owner" means, with respect to any shares of Halter
Marine Common Stock or Friede Goldman Common Stock, a person who shall be
deemed to be the beneficial owner of such shares (i) which such person or
any of its affiliates or associates beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or associates
(as such term is defined in Rule 12b-2 of the Exchange Act) has, directly
or indirectly, (A) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (B) the
right to vote pursuant to any agreement, arrangement or understanding,
(iii) which are beneficially owned, directly or indirectly, by any other
persons with whom such person or any of its affiliates or associates has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any such shares or (iv) pursuant to Section
13(d) of the Exchange Act and any rules or regulations promulgated
thereunder;
(c) "Business Day" shall mean any day other than a day on which banks
in the State of New York are authorized or obligated to be closed;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock
or as trustee or executor, by contract or credit arrangement or otherwise;
(e) "knowledge" will be deemed to be present when the matter in
question was brought to the attention of any executive officer of Friede
Goldman or Halter Marine, as the case may be;
(f) "person" means an individual, corporation, limited liability
company, partnership, association, trust, unincorporated organization,
other entity or group (as defined in Section 13(d) of the Exchange Act);
(g) "subsidiary" or "subsidiaries" of Friede Goldman, Halter Marine,
the Surviving Corporation or any other person means any corporation,
partnership, joint venture or other legal entity of which Friede Goldman,
Halter Marine, the Surviving Corporation or such other person, as the case
may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, 50% or more of the stock or other equity
interests the holders of which are generally entitled to vote for the
election of the Board of Directors or other governing body of such
corporation or other legal entity.
SECTION 9.04. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
SECTION 9.05. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible.
SECTION 9.06. Entire Agreement. This Agreement (together with the
Exhibits, Friede Goldman and Halter Marine Disclosure Schedules and the other
documents delivered pursuant hereto) and the Confidentiality Agreements
constitute the entire agreement of the parties and supersede all prior
agreements and undertakings, both written and oral, between the parties, or any
of them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein, are not intended to confer upon any other person any
rights or remedies hereunder. No addition to or modification of any provision
of this Agreement shall be binding upon either party hereto unless made in
writing and signed by both
parties hereto.
SECTION 9.07. Assignment. This Agreement shall not be assigned by
operation of law or otherwise.
SECTION 9.08. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and their respective
successors and assigns, and nothing in this Agreement, express or implied, other
than pursuant to Section 6.07 or 6.12 or the right to receive the consideration
payable in the Merger pursuant to Article II, is intended to or shall confer
upon any other person any rights, benefits or remedies, obligations or
liabilities of any nature whatsoever under or by reason of this Agreement.
SECTION 9.09. Mutual Drafting. Each party hereto has participated in
the drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties.
SECTION 9.10. Governing Law. This Agreement shall be governed by the
Laws of the State of Delaware as applied to contracts executed and to be
performed entirely in such state.
SECTION 9.11. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, Friede Goldman and Halter Marine have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
FRIEDE GOLDMAN INTERNATIONAL INC.
By: /s/ J.L. Holloway
--------------------------------------------
Name: J.L. Holloway
Title: Chairman, Chief Executive Officer
and President
HALTER MARINE GROUP, INC.
By: /s/ John Dane III
--------------------------------------------
Name: John Dane III
Title: Chairman, Chief Executive Officer
and President
EXHIBIT 7
Officers
--------
J.L. Holloway - Chairman and Chief Executive Officer
John Dane III - Vice Chairman, President and Chief Operating Officer
Richard S. Rees - Chief Financial Officer and Executive Vice President
John F. Alford - Executive Vice President
EXHIBIT 8
FORM OF AFFILIATE LETTER
__________, 1998
Friede Goldman, Inc.
[Address]
Attention:
Ladies and Gentlemen:
I have been advised that as of the date of this letter I may be deemed
to be an "affiliate" of Halter Marine Group, Inc., a Delaware corporation
("Halter Marine"), as the term "affiliate" is defined for purposes of paragraphs
(c) and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"). Pursuant to the
terms of the Agreement and Plan of Merger, dated as of June 1, 1999 (the "Merger
Agreement"), between Halter Marine and Friede Goldman International Inc., a
Mississippi corporation ("Friede Goldman"), Halter Marine will be merged with
and into Friede Goldman (the "Merger"), with Friede Goldman as the surviving
corporation.
As a result of the Merger, I may receive shares of common stock, $0.01
par value per share, of Friede Goldman ("Friede Goldman Common Stock") or
options to purchase shares of Friede Goldman Common Stock (the "Friede Goldman
Options") (the Friede Goldman Common Stock, the Friede Goldman Options and any
Friede Goldman Common Stock issued upon exercise of the Friede Goldman Options
are collectively referred to hereinafter as the "Friede Goldman Securities") in
exchange for shares of the common stock, $0.01 par value per share, of Halter
Marine (the "Halter Marine Common Stock") or options to purchase Halter Marine
Common Stock, as the case may be.
I represent, warrant and covenant to Friede Goldman that if I receive
any Friede Goldman Securities as a result of the Merger:
a. I shall not make any sale, transfer or other disposition of the
Friede Goldman Securities in violation of the Securities Act or the Rules
and Regulations.
b. I have carefully read this letter and the Merger Agreement and, to
the extent I felt it necessary, discussed the requirements of such
documents and other applicable limitations upon my ability to sell,
transfer or otherwise dispose of the Friede Goldman Securities with my
counsel or counsel for Halter Marine.
c. I have been advised that the issuance of Friede Goldman Common
Stock to me pursuant to the Merger has been registered with the SEC under
the Securities Act on a Registration Statement on Form S-4. However, I
have also been advised that, since at the time the Merger was submitted for
a vote of the stockholders of Halter Marine, I may be deemed to have been
an affiliate of Halter Marine and the distribution by me of the Friede
Goldman Securities has not been registered under the Act, I may not sell,
transfer or otherwise dispose of the Friede Goldman Securities issued to me
in the Merger unless (i) such sale, transfer or other disposition has been
registered under the Securities Act, (ii) such sale, transfer or other
disposition is made in conformity with Rule 145 promulgated by the SEC
under the Securities Act, or (iii) in the opinion of counsel reasonably
acceptable to Friede Goldman, or a "no-action" letter obtained by me from
the staff of the SEC, such sale, transfer or other disposition is otherwise
exempt from registration under the Securities Act. Pursuant to the
regulations of the SEC as currently in effect, I may make bona fide gifts
or distributions without consideration so long as the recipients thereof
agree not to sell, transfer or otherwise dispose of the Friede Goldman
Common Stock except as provided herein. With respect to a transfer under
clause (ii) above, I understand that unless you have a reasonable basis for
believing to the contrary, such transfer will be viewed by you as in
conformity with Rule 145 upon my delivery to you or your transfer agent of
a broker's letter in customary form stating that the requirements of Rule
145(d)(1) have been met.
d. I understand that Friede Goldman is under no obligation to
register the sale, transfer or other disposition of the Friede Goldman
Securities by me or on my behalf under the Securities Act or to take any
other action necessary in order to make compliance with an exemption from
such registration available other than to timely file all reports as
required under the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC thereunder.
e. I also understand that stop transfer instructions will be given to
Friede Goldman's transfer agent with respect to the Friede Goldman Common
Stock and that there will be placed on the certificates for the Friede
Goldman Common Stock issued to me in the Merger or the Friede Goldman
Common Stock issued to me upon exercise of the Friede Goldman Options, or
any substitutions therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
1933 APPLIES. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT DATED
_______________, 1998 BETWEEN THE REGISTERED HOLDER HEREOF AND Friede
Goldman, INC., A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICES OF Friede Goldman, INC."
f. I also understand that unless the transfer by me of my Friede
Goldman Securities has been registered under the Securities Act or is made
in a sale in conformity with the provisions of Rule 145, Friede Goldman
reserves the right to put the following legend on the certificates issued
to my transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ACQUIRED FROM A
PERSON WHO RECEIVED SUCH SHARES IN A TRANSACTION TO WHICH RULE 145
PROMULGATED UNDER THE SECURITIES ACT OF 1933 APPLIES. THE SHARES HAVE
BEEN ACQUIRED BY THE HOLDER NOT WITH A VIEW TO, OR FOR RESALE IN
CONNECTION WITH, ANY DISTRIBUTION THEREOF WITHIN THE MEANING OF THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT OF 1933."
The legend(s) set forth in paragraphs "e" and, if applicable, "f"
above shall be removed by delivery of substitute certificates without such
legend if such legend is not required for purposes of the Securities Act or this
letter. Such legend(s) and the stop transfer orders referred to above will be
removed if (i) one year shall have elapsed from the date the undersigned
acquired the Friede Goldman Securities received in the Merger and the provisions
of Rule 145(d)(2) are then available to the undersigned, (ii) two years shall
have elapsed from the date the undersigned acquired the Friede Goldman
Securities received in the Merger and the provisions of Rule 145(d)(3) are then
applicable to the undersigned, or (iii) Friede Goldman has received either an
opinion of counsel, which opinion and counsel shall be reasonably satisfactory
to Friede Goldman, or a "no-action" letter obtained by the undersigned from the
staff of the SEC, to the effect that the restrictions imposed by Rule 145 under
the Securities Act no longer apply to the undersigned.
Name:
