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
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
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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.........................................32
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...................................................41
SECTION 5.04. Notices of Certain Events.....................................42
SECTION 5.05. Contractual Consents..........................................42
SECTION 5.06. Rights Agreements.............................................42
SECTION 5.07. Affiliate Letters.............................................43
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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..............................45
SECTION 6.05. No Solicitation by Xxxxxx Xxxxxxx.............................47
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..........................................53
SECTION 6.11. NYSE Listing..................................................54
SECTION 6.12. Indemnification of Directors and Officers.....................54
SECTION 6.13. Plan of Reorganization........................................55
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........57
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.........................................61
SECTION 8.03. Amendment.....................................................62
SECTION 8.04. Waiver........................................................62
SECTION 8.05. Fees..........................................................62
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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....................................................67
SECTION 9.08. Parties in Interest...........................................67
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
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Index of Defined Terms
Section
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)
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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
vii
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
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"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 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,
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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,
4
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
5
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
6
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
7
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
8
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
9
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:
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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
11
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
12
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
13
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,
14
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
15
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
16
"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.
17
(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
18
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
19
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
20
(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
21
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
22
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
23
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).
24
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
25
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,
26
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
27
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.
28
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
29
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
30
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.
31
(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
32
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:
33
(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
34
Goldman 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.
35
(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
36
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
37
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);
38
(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,
39
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
40
(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);
41
(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
42
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
43
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 Xxxxxx Xxxxxxx 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
44
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
45
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
46
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
47
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
48
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
49
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
50
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,
51
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
52
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
53
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.
54
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.
55
(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
56
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
57
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
58
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.
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(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
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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
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(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
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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
63
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.
64
(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.
65
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
66
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;
67
(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
68
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.
69
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
2
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
3
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.
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