SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 4, 1997
HALTER MARINE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-12159 75-2656828
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
13085 Industrial Seaway Road, Gulfport, Mississippi 39503
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (601)896-0029
(Not Applicable)
(Former name or former address, if changed since last report)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
On April 4, 1997, Halter Marine, Inc., a wholly owned
subsidiary of the Registrant, purchased fifty-one percent of the
issued and outstanding capital stock of Maritime Holdings, Inc., a
Delaware corporation ("MHI"), from Messrs. Thomas C. Weller, Jr.,
Ronald J. Stevens and Rick S. Rees (the "MHI Sellers") for
$15,498,000. The primary asset of MHI is eighty percent of the
issued and outstanding capital stock of Texas Drydock, Inc., a
Texas corporation ("Texas Drydock"). Simultaneously, Halter
Marine, Inc. purchased fifty-one percent of the other twenty
percent of the issued and outstanding capital stock of Texas
Drydock from Mr. Don O. Covington (the "Texas Drydock Seller") for
$3,874,500.00. Funds for the purchase were obtained by borrowing
under the Registrant's general line of credit from its lender
banks.
Texas Drydock is engaged in marine repair and manufacturing of
offshore drilling and workover units, operating six shipyards in
southeast Texas. Halter intends to continue and expand the
operations of Texas Drydock under Halter's ownership.
For the same consideration, Halter Marine, Inc. obtained an
option to acquire the remaining forty-nine percent of the MHI stock
and the remaining forty-nine percent of the other twenty percent of
the Texas Drydock stock (collectively, the "Minority Stock"). The
option is exercisable no earlier than twelve months and no later
than twenty four months after April 4, 1997 at an aggregate option
exercise price of not less than $20,580,000 nor more than
$30,000,000, with the exact price to be determined by future
negotiations based upon estimated consolidated earnings of Texas
Drydock for the twelve months ending March 31, 1999, but with the
absolute option to purchase the Minority Stock at an aggregate
exercise price of $30,000,000. Conversely, the MHI Sellers and
the Texas Drydock Seller, acting jointly, have an option to cause
Halter Marine, Inc. to purchase the Minority Stock no earlier than
eighteen months nor later than twenty-four months after April 4,
1997 for an aggregate purchase price of $20,580,000.
In connection with the purchase, Mr. Weller, Chairman of the
Board of MHI and of Texas Drydock entered into a three year
Consulting Agreement to serve as consultant to Texas Drydock and
its affiliates; Mr. Rees, President of MHI, in addition to already
being a director of the Registrant, was elected on April 2, 1997,
an Executive Vice President of Registrant; and Mr. Covington,
President of Texas Drydock, entered into a three year Employment
Agreement to continue as President of Texas Drydock.
<PAGE>
Item 7. Financial Statements and Exhibits.
List below the financial statements, pro forma financial
information and exhibits, if any, filed as a part of this report.
(a) Financial Statements of Business Acquired.
None Required.
(b) Pro Forma Financial Information.
None Required.
(c) Exhibits.
99.2 * Stock Purchase Agreement dated February 14, 1997 by
and among Thomas C. Weller, Jr., Ronald J. Stevens,
Rick S. Rees, Don O. Covington and Halter Marine,
Inc.
99.3 * Amendment No. 1 to Stock Purchase Agreement dated
April 4, 1997 by and among Thomas C. Weller, Jr.,
Ronald J. Stevens, Rick S. Rees, Don O. Covington
and Halter Marine, Inc.
99.4 Escrow Agreement dated April 4, 1997 among Halter
Marine, Inc., Thomas C. Weller, Jr., Ronald J.
Stevens, Rick S. Rees, Don O. Covington and Bank
One, Louisiana, National Association.
99.5 Weller Consulting Agreement dated April 4, 1997 by
and between Texas Drydock, Inc. and Thomas C.
Weller, Jr.
99.6 Covington Employment Agreement dated April 4, 1997
by and between Texas Drydock, Inc. and Don O.
Covington.
99.7 Fogal Employment Agreement dated April 4, 1997 by
and between Texas Drydock, Inc. and Robert W.
Fogal.
_______________
* Omitted from Exhibits 99.2 and 99.3 are the attachments
referred to in those documents. It is believed that the
attachments (when considered with the other Exhibits
filed herein) are not material to an investment decision.
Registrant agrees to furnish supplementally a copy of any
of the omitted attachments to the Commission upon
request.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
HALTER MARINE GROUP, INC.
(Registrant)
/s/ John Dane, III
By:
John Dane, III
Chairman, President and
Chief Executive Officer
Date: April 17, 1997
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
99.2 Stock Purchase Agreement dated February 14, 1997 by
and among Thomas C. Weller, Jr., Ronald J. Stevens,
Rick S. Rees, Don O. Covington and Halter Marine,
Inc.
99.3 Amendment No. 1 to Stock Purchase Agreement dated
April 4, 1997 by and among Thomas C. Weller, Jr.,
Ronald J. Stevens, Rick S. Rees, Don O. Covington
and Halter Marine, Inc.
99.4 Escrow Agreement dated April 4, 1997 among Halter
Marine, Inc., Thomas C. Weller, Jr., Ronald J.
Stevens, Rick S. Rees, Don O. Covington and Bank
One, Louisiana, National Association.
99.5 Weller Consulting Agreement dated April 4, 1997 by
and between Texas Drydock, Inc. and Thomas C.
Weller, Jr.
99.6 Covington Employment Agreement dated April 4, 1997
by and between Texas Drydock, Inc. and Don O.
Covington.
99.7 Fogal Employment Agreement dated April 4, 1997 by
and between Texas Drydock, Inc. and Robert W.
Fogal.
<PAGE>
EXHIBIT 99.1
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is entered
into this 14th day of February , 1997, by and among THOMAS
C. WELLER, JR. ("Weller"), an individual whose mailing address is
2595 Woodward Way, N.W., Atlanta, Georgia 30305, RONALD J. STEVENS
("Stevens"), an individual whose mailing address is 2009 Old
Country Road, Daphne, Alabama 36526, and RICK S. REES ("Rees"), an
individual whose mailing address is 80 Tern Street, New Orleans,
Louisiana 70124, (such three individuals being sometimes
collectively referred to herein as the "MHI Sellers"), who own one
hundred percent (100%) of the issued and outstanding stock of
MARITIME HOLDINGS, INC., a Delaware corporation ("MHI"), which owns
eighty percent (80%) of the issued and outstanding capital stock of
TEXAS DRYDOCK, INC., a Texas corporation ("Texas Drydock"), and DON
O. COVINGTON ("Covington"), whose mailing address is 4322 Memorial
Drive, Orange, Texas 77632 (such individual being sometimes
referred to herein as the "Texas Drydock Seller"), who owns the
other twenty percent (20%) of the issued and outstanding stock of
Texas Drydock (all such individuals being sometimes collectively
referred herein to as the "Sellers"), and HALTER MARINE, INC., a
Nevada corporation (hereinafter called "Purchaser"), which has its
principal offices at 13085 Industrial Seaway, Gulfport,
Mississippi, 39503;
W I T N E S S E T H :
WHEREAS, the MHI Sellers desire to sell to Purchaser, and
Purchaser desires to purchase from the MHI Sellers, fifty-one
percent (51%) of the issued and outstanding stock of MHI; and
WHEREAS, the Texas Drydock Seller desires to sell to
Purchaser, and Purchaser desires to purchase from the Texas Drydock
Seller, fifty-one percent (51%) of the twenty percent (20%) of the
issued and outstanding capital stock of Texas Drydock owned by the
Texas Drydock Seller; and
WHEREAS, Purchaser desires to have from the MHI Sellers a
right and option to purchase from the MHI Sellers, and the MHI
Sellers desire to have an option to put to Purchaser, the other
forty-nine percent (49%) of the outstanding capital stock of MHI
upon the terms and conditions set forth herein; and
WHEREAS, Purchaser desires to have from the Texas Drydock
Seller the right and option to purchase from the Texas Drydock
Seller, and the Texas Drydock Seller desires to have an option to
put to Purchaser, the other forty-nine percent (49%) of the twenty
percent (20%) of the issued and outstanding capital stock of Texas
Drydock owned by the Texas Drydock Seller upon the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the covenants, conditions
and agreements hereinafter set forth, Sellers and Purchaser hereby
agree as follows:
ARTICLE 1.
Sale and Transfer of Shares; Purchase Price; Closing
1.1 The MHI Shares. Subject to the terms and conditions of
this Agreement, at the Closing (as hereinafter defined), the MHI
Sellers will sell and transfer to Purchaser, and Purchaser will
purchase from the MHI Sellers, fifty-one percent (51%) of the
issued and outstanding shares of capital stock of MHI (such fifty-
one percent (51%) of the issued and outstanding shares of capital
stock of MHI being hereinafter referred to as the "MHI Shares").
1.2 The Texas Drydock Shares. Subject to the terms and
conditions of this Agreement, at the Closing, the Texas Drydock
Seller will sell and transfer to Purchaser, and Purchaser will
purchase from the Texas Drydock Seller, fifty-one percent (51%) of
the twenty percent (20%) of the issued and outstanding shares of
capital stock of Texas Drydock owned by the Texas Drydock Seller
(such fifty-one (51%) of twenty percent (20%) of the issued and
outstanding capital stock of Texas Drydock being hereinafter
referred to as the "Texas Drydock Shares").
1.3 Purchase Price for the MHI Shares. The purchase price
for the MHI Shares shall be Fifteen Million Four Hundred Ninety
Eight Thousand Dollars ($15,498,000.00), payable at the Closing to
each of the MHI Sellers in the respective percentages set forth
below opposite the name of each of the MHI Sellers:
Weller Fifty percent (58.061%)
Stevens Twenty-five percent (23.778%)
Rees Twenty-five percent (18.161%)
1.4 Purchase Price for Texas Drydock Shares. The purchase
price for the Texas Drydock Shares shall be Three Million Eight
Hundred Seventy Four Thousand Five Hundred Dollars ($3,874,500.00),
payable at the Closing to the Texas Drydock Seller.
1.5 Closing. The closing (the "Closing") of the purchases
and sales provided for in this Agreement will take place at the
principal offices of Purchaser at 10:00 a.m. (local time) on the
later of (i) April 4, 1997 or (ii) that date that is two business
days following the termination of the applicable waiting period
under the Hart-Scott-Rodino Act (the "HSR Act"), or at such other
date, time and place as the parties may agree. The actual date of
Closing is hereinafter sometimes called the "Closing Date".
Subject to the provisions of Article 10, failure to consummate the
purchases and sales provided for in this Agreement on the date and
time and at the place determined pursuant to this Section will not
result in the termination of this Agreement and will not relieve
any party of any obligation under this Agreement.
1.6 Closing Obligations. At the Closing:
(a) The MHI Sellers will deliver to Purchaser:
(i) certificates representing the MHI Shares, duly
endorsed (or accompanied by duly executed
stock powers), with signatures guaranteed by a
commercial bank or by a member firm of the New
York Stock Exchange, for transfer to
Purchaser;
(ii) releases in the form of Exhibit 1.06(a)(ii)
executed by each of the MHI Sellers
(collectively, the "MHI Sellers' Releases");
(iii) a noncompetition agreement in the form of
Exhibit 1.6(a)(iii) executed by Stevens
("Stevens Noncompetition Agreement");
(iv) a certificate executed by each of the MHI
Sellers representing and warranting to
Purchaser that each of MHI Sellers'
representations and warranties in Article 2 of
this Agreement was accurate in all material
respects as of the date of this Agreement,
after giving effect to the Disclosure Letter,
and is accurate in all material respects as of
the Closing Date as if made on the Closing
Date, after giving effect to the Disclosure
Letter and any supplement to the Disclosure
Letter delivered to Purchaser prior to the
Closing; and
(v) such other documents or instruments with
respect to MHI or the MHI Sellers as Purchaser
may reasonably request.
(b) The Texas Drydock Seller will deliver to Purchaser:
(i) certificates representing the Texas Drydock
Shares, duly endorsed (or accompanied by duly
executed stock powers), with signatures
guaranteed by a commercial bank or by a member
firm of the New York Stock Exchange, for
transfer to Purchaser;
(ii) a release in the form of Exhibit 1.06(b)(ii)
executed by the Texas Drydock Seller (the
"Texas Drydock Seller's Release");
(iii) a certificate executed by the Texas Drydock
Seller's representing and warranting to
Purchaser that each of Texas Drydock Seller's
representations and warranties in Article 3 of
this Agreement was accurate in all material
respects as of the date of this Agreement,
after giving effect to the Disclosure Letter,
and is accurate in all material respects as of
the Closing Date as if made on the Closing
Date, after giving effect to the Disclosure
Letter and any supplement to the Disclosure
Letter delivered to Purchaser prior to the
Closing; and
(iv) such other documents or instruments with
respect to the Texas Drydock Seller as
Purchaser may reasonably request.
(c) Sellers acting jointly will deliver to Purchaser:
(i) a certificate executed by each of the Sellers
representing and warranting to Purchaser that
each of Sellers' representations and
warranties in Article 4 of this Agreement was
accurate in all material respects as of the
date of this Agreement, after giving effect to
the Disclosure Letter, and is accurate in all
respects as of the Closing Date as if made on
the Closing Date, after giving effect to the
Disclosure Letter and any supplement to the
Disclosure Letter delivered to Purchaser prior
to the Closing;
(ii) an escrow agreement in the form of the Exhibit
1.6(c)(ii), executed by Sellers (the "Escrow
Agreement");
(iii) a true and complete copy of a consulting
agreement in the form of Exhibit 1.6(c)(iii),
as executed by Weller and Texas Drydock (the
"Weller Consulting Agreement);
(iv) a true and complete copy of an employment
agreement in the form of Exhibit 1.6(c)(iv),
as executed by Covington and Texas Drydock
(the "Covington Employment Agreement");
(v) a true and complete copy of an employment
agreement in the form of Exhibit 1.6(c)(v), as
executed by Robert W. Fogal and Texas Drydock
(the "Fogal Employment Agreement");
(vi) an opinion of Jones, Walker, Waechter,
Poitevent, Carrere and Denegre, L.L.P.,
counsel to Sellers, dated the Closing Date, in
form and substance satisfactory to Purchaser;
and
(vii) such other documents or instruments with
respect to Texas Drydock, Inc. and its
subsidiary, TDI International, Ltd., a Cayman
Islands corporation ("Subsidiary"), as
Purchaser may reasonably request.
(d) Purchaser will deliver:
(i) to each of the MHI Sellers the aggregate
amount set forth in Section 1.3 of this
Agreement in the respective percentages set
forth opposite each such person's name in
Section 1.3 of this Agreement by wire transfer
to an account specified by such person;
(ii) to the Texas Drydock Seller the amount set
forth in Section 1.4 of this Agreement by wire
transfer to an account specified by such
person;
(iii) to the Sellers a copy of the Escrow Agreement
executed by Purchaser;
(iv) to the Sellers a certificate executed by
Purchaser to the effect that each of
Purchaser's representations and warranties in
Article 5 of this Agreement was accurate in
all material respects as of the date of this
Agreement and is accurate in all material
respects as of the Closing Date as if made on
the Closing Date;
(v) to the Sellers an opinion of Joe French &
Associates, P.C., counsel to Purchaser, dated
the Closing Date, in form and substance
satisfactory to Sellers; and
(vi) such other documents or instruments with
respect to Purchaser as Sellers may reasonably
request.
ARTICLE 2.
Representations and Warranties of MHI Sellers
Except as set forth in the Disclosure Letter, MHI Sellers, and
each of them, represent and warrant to Purchaser the following:
2.1 Ownership of MHI Stock. At Closing, Weller will own
fifty eight thousand and sixty one (58,061) shares, Stevens will
own twenty three thousand seven hundred seventy eight (23,778)
shares, and Rees will own eighteen thousand one hundred sixty one
(18,161) shares of Common Stock, par value $1.00 per share, of MHI.
Such shares represent all of the issued and outstanding capital
stock of MHI. Each of the MHI Sellers has good and marketable
title thereto and has all requisite power and authority to sell,
assign and deliver the MHI Shares to the Purchaser, free and clear
of any lien, claim, demand, encumbrance or voting agreement. At
the time of delivery of the MHI Shares to Purchaser at the Closing,
against payment therefor, the MHI Sellers will deliver good and
marketable title to the MHI Shares to Purchaser, free and clear of
any liens, claims, encumbrances, equities, voting rights or
agreements.
2.2 Capitalization of MHI. At Closing, the authorized
capital stock of MHI will consist of one hundred thousand (100,000)
shares of Common Stock, par value $1.00 per share, of which one
hundred thousand (100,000) shares will be issued and outstanding.
All outstanding shares of the capital stock of MHI will have been
duly authorized and validly issued and will be fully paid and
nonassessable. At Closing, MHI will not have any outstanding
stock, subscription, option, warrant, rights or other agreement or
commitment obligating MHI to issue, sell or redeem shares of its
capital stock or any securities or obligations convertible into, or
exchangeable for, any shares of its capital stock.
2.3 MHI Organization and Good Standing. MHI is a
corporation validly existing and in good standing under the laws of
the state of Delaware and is not duly qualified to do business as
a foreign corporation in any other state and neither the nature of
its business nor the property owned or leased by it makes such
qualification necessary in any other jurisdiction. MHI has full
corporate power and authority to conduct its business as it is now
being conducted, to own or use the properties and assets that it
purports to own or use, and to perform all its obligations under
its existing agreements, contracts and obligations. Prior to the
Closing, MHI Sellers will make available to Purchaser true and
complete copies of the Certificate of Incorporation, the Bylaws,
the Minute Books containing the minutes of all meetings of the
Board of Directors and stockholders of MHI, and the stock record
books of MHI, as in effect at that time.
2.4 Ownership of Texas Drydock Stock. MHI owns eight
hundred (800) shares of Common Stock, par value $1.00 per share, of
Texas Drydock. MHI has good and marketable title thereto, free and
clear of any lien, claim, demand, encumbrance or voting agreement.
2.5 MHI'S Assets, Liabilities and Obligations. At Closing
MHI will have no debt or liability of any kind and will not be
subject to any agreement, contract, obligation, promise or
undertaking (whether written or oral and whether express or
implied) that is legally binding upon MHI. At Closing MHI will
have no assets other than stock of Texas Drydock constituting
eighty percent (80%) of Texas Drydock's outstanding stock and cash
sufficient to pay all debts and liabilities so disclosed and any
costs and expenses related thereto.
2.6 MHI Sellers' Authority; Conflicts. (a) This Agreement
constitutes the legal, valid, and binding obligation of the MHI
Sellers, enforceable against MHI Sellers in accordance with its
terms. Upon the execution and delivery by MHI Sellers of the MHI
Sellers' Releases, by Weller of the Weller Consulting Agreement and
by Stevens of the Stevens Noncompetition Agreement (collectively,
the "MHI Sellers' Closing Documents"), the MHI Sellers' Closing
Documents will constitute the legal, valid, and binding obligations
of the MHI Sellers, or in the case of the Weller Consulting
Agreement, Weller, or in the case of the Stevens Consulting
Agreement, Stevens, enforceable against MHI Sellers, Weller and
Stevens, as appropriate, in accordance with their respective terms.
The MHI Sellers, Weller and Stevens, as appropriate, have the
absolute and unrestricted right, power, authority, and capacity to
execute and deliver this Agreement and the MHI Sellers' Closing
Documents and to perform their obligations under this Agreement and
the MHI Sellers' Closing Documents.
(b) Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the transactions
contemplated by this Agreement will, directly or indirectly (with
or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Certificate of
Incorporation of MHI, or (B) any resolution adopted by the
Board of Directors or the stockholders of MHI;
(ii) contravene, conflict with, or result in a
violation of, or give any governmental body or other person
the right to challenge any of the transactions contemplated by
this Agreement or to exercise any remedy or obtain any relief
under any statute, regulation, or judicial or administrative
order to which MHI or any of the MHI Sellers, or any of the
assets owned or used by MHI at Closing, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any
governmental body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any license, permit or
authorization that will be held by MHI at Closing or that
otherwise relates to the business of, or any of the assets
will be owned at Closing by, MHI;
(iv) cause Purchaser or MHI to become subject to, or
to become liable for the payment of, any federal, state or
local tax that would not otherwise be imposed, assessed or
collected from Purchaser or MHI; except for transactions
contemplated by Article 12 or Article 13 hereof;
(v) contravene, conflict with, or result in a
violation or breach of any provision of, or give any person
the right to declare a default or exercise any remedy under,
or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any material agreement, contract,
obligation, promise or undertaking (whether written or oral
and whether express or implied) that is legally binding upon
MHI; or
(vi) result in the imposition or creation of any
lien or encumbrance upon or with respect to any of the assets
owned by MHI at Closing.
Except as required by the HSR Act, none of the MHI Sellers or MHI
is or will be required to give any notice to or obtain any consent,
authorization, approval or waiver from any person in connection
with the execution and delivery of this Agreement or the
consummation or performance of any of the transactions contemplated
by this Agreement.
ARTICLE 3.
Representations and Warranties of Texas Drydock Seller
Except as set forth in the Disclosure Letter, the Texas
Drydock Seller represents and warrants to Purchaser the following:
3.1 Ownership of Texas Drydock Stock. The Texas Drydock
Seller owns two hundred (200) shares of Common Stock, par value
$1.00 per share, of Texas Drydock. The Texas Drydock Seller has
good and marketable title thereto and has all requisite power and
authority to sell, assign and deliver such shares to the Purchaser,
free and clear of any lien, claim, demand, encumbrance or voting
agreement. At the time of delivery of the Texas Drydock Shares to
Purchaser at the Closing, against payment therefor, the Texas
Drydock Seller will deliver good and marketable title to the Texas
Drydock Shares to Purchaser, free and clear of any liens, claims,
encumbrances, equities, voting rights or agreements.
3.2 Authority; Conflicts. This Agreement constitutes the
legal, valid, and binding obligation of the Texas Drydock Seller,
enforceable against the Texas Drydock Seller in accordance with its
terms. Upon the execution and delivery by the Texas Drydock Seller
of the Texas Drydock Seller's Release, and the Covington Employment
Agreement (collectively, the "Texas Drydock Seller's Closing
Documents"), the Texas Drydock Seller's Closing Documents will
constitute the legal, valid, and binding obligations of the Texas
Drydock Seller, enforceable against the Texas Drydock Seller in
accordance with their respective terms. The Texas Drydock Seller
has the absolute and unrestricted right, power, authority, and
capacity to execute and deliver this Agreement and the Texas
Drydock Seller's Closing Documents and to perform his obligations
under this Agreement and the Texas Drydock Seller's Closing
Documents.
Except as required by the HSR Act, neither the Texas Drydock Seller
nor Texas Drydock is or will be required to give any notice to or
obtain any consent, authorization, approval or waiver from any
person in connection with the execution and delivery of this
Agreement or the consummation or performance of any of the
transactions contemplated by this Agreement.
ARTICLE 4.
Representations and Warranties of Sellers
Except as set forth in the Disclosure Letter, Sellers, and
each of them, represent and warrant to Purchaser the following
(except that with respect to MHI, only the MHI Sellers make such
representations and warranties and the Texas Drydock Seller makes
no representation or warranty with respect to MHI):
4.1 Outstanding Stock of Texas Drydock; Conflicts. The
shares of Common Stock, of Texas Drydock registered in the name of
MHI and the Texas Drydock Seller represent all of the issued and
outstanding capital stock of Texas Drydock. The execution and
delivery of this Agreement and the compliance with the terms and
provisions hereof will not result in a violation of, or be in
conflict with, or constitute a default under, the terms, conditions
or provisions of any mortgage, lien, lease, indenture, agreement,
instrument, judgement, decree, order, statute, rule or governmental
regulation applicable to the shares of Texas Drydock or by which
Texas Drydock is bound, and will not result in the creation or
imposition of any lien, charge or encumbrance of any nature upon
any of the shares of Texas Drydock or any of its properties.
4.2 Texas Drydock's Capitalization. The authorized capital
stock of Texas Drydock consists of one thousand (1,000) shares of
Common Stock, par value $1.00 per share, of which one thousand
(1,000) shares are issued and outstanding. All outstanding shares
of the capital stock of Texas Drydock have been duly authorized and
validly issued and are fully paid and nonassessable. Texas Drydock
does not have any outstanding stock, subscription, option, warrant,
rights or other agreement or commitment obligating Texas Drydock to
issue, sell or redeem shares of its capital stock or any securities
or obligations convertible into, or exchangeable for, any shares of
its capital stock.
4.3 Texas Drydock's Organization and Good Standing. Texas
Drydock is a corporation validly existing and in good standing
under the laws of the state of Texas and is not duly qualified to
do business as a foreign corporation in any other state and neither
the nature of its business nor the property owned or leased by it
makes such qualification necessary, except in any jurisdiction in
which the failure to so qualify would not have a materially adverse
effect on the business or properties of Texas Drydock. Texas
Drydock has full corporate power and authority to conduct its
business as it is now being conducted, to own or use the properties
and assets that it purports to own or use, and to perform all its
obligations under each agreement, contract, obligation, promise or
undertaking (whether written or oral and whether express or
implied) that is legally binding upon Texas Drydock. Prior to
Closing, Sellers will make available to Purchaser true and complete
copies of the Articles of Incorporation and the Bylaws of Texas
Drydock, the Minute Books containing true and complete copies of
the minutes of each meeting of the Board of Directors and
shareholders of Texas Drydock and its stock record books, as in
effect at that time.
4.4 Subsidiary. Texas Drydock owns all of the issued and
outstanding stock of TDI International, Ltd., a Cayman Islands
corporation (which is hereinafter called "Subsidiary"), which is
the only subsidiary of Texas Drydock. As used herein, the term
"subsidiary" means any corporation or other legal entity of which
securities or other interests having the power to elect a majority
of that corporation's or other legal entity's board of directors or
similar governing body, or otherwise having the power of directors
or similar governing body, or otherwise having the power to direct
the business and policies of that corporation or other legal entity
(other than securities or other interest having such power only
upon the happening of a contingency that has not occurred) are held
directly or indirectly by Texas Drydock. Texas Drydock has no
agreement or contract to own or acquire any equity securities of
any other corporation or legal entity or any direct or indirect
ownership interest in any other business, except that Subsidiary is
a party to a joint venture agreement with an entity operating under
the laws of Bahrain to conduct a business activity in Bahrain.
Prior to Closing, Sellers will make available to Purchaser, a true
and complete copy of such joint venture agreement.
4.5 Ownership of Subsidiary. Texas Drydock owns one hundred
(100) shares of Common Stock, par value $1.00 per share, of
Subsidiary. Such shares represent all of the issued and
outstanding capital stock of Subsidiary. Texas Drydock has good
and marketable title to all outstanding shares of capital stock of
Subsidiary, free and clear of any lien, claim, demand, encumbrance
or voting agreement. The execution and delivery of this Agreement
and the compliance with the terms and provisions hereof will not
result in a violation of, or be in conflict with, or constitute a
default under, the terms, conditions or provisions of any mortgage,
lien, lease, indenture, agreement, instrument, judgement, decree,
order, statute, rule or governmental regulation applicable to the
shares of capital stock of Subsidiary or by which Subsidiary is
bound, and will not result in the creation or imposition of any
lien, charge or encumbrance of any nature upon any of the shares of
capital stock of Subsidiary or any of its properties.
4.6 Subsidiary's Capitalization. The authorized capital
stock of Subsidiary consists of fifty thousand (50,000) shares of
Common Stock, par value $1.00 per share, of which one hundred (100)
shares are issued and outstanding. All outstanding shares of the
capital stock of Subsidiary have been duly authorized and validly
issued and are fully paid and nonassessable. Subsidiary does not
have any outstanding stock, subscription, option, warrant, rights
or other agreement or commitment obligating Subsidiary to issue,
sell or redeem shares of its capital stock or any securities or
obligations convertible into, or exchangeable for, any shares of
its capital stock.
4.7 Subsidiary's Organization and Good Standing. Subsidiary
is a corporation validly existing and in good standing under the
laws of the state of the Cayman Islands, which is the only
jurisdictions in which the nature of its business or the property
owned or leased by it makes such qualification necessary, except in
any jurisdiction in which the failure to so qualify would not have
a materially adverse effect on the business or properties of
Subsidiary. Subsidiary has full corporate power and authority to
conduct its business as it is now being conducted, to own or use
the properties and assets that it purports to own or use, and to
perform all its obligations under each agreement, contract,
obligation, promise or undertaking (whether written or oral and
whether express or implied) that is legally binding upon
Subsidiary. Prior to Closing, Sellers will make available to
Purchaser true and complete copies of the Articles of Incorporation
and the Bylaws of Subsidiary, the Minute Books containing the
minutes of each meeting of the Board of Directors and shareholders
of Subsidiary and its stock record books, as in effect at that
time.
4.8 Authority; Conflicts. Neither the execution and
delivery of this Agreement nor the consummation or performance of
any of the transactions contemplated by this Agreement will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Articles of
Incorporation of Texas Drydock or the certificate or articles
of incorporation of Subsidiary, or (B) any resolution adopted
by the board of directors or the stockholders of either Texas
Drydock or Subsidiary;
(ii) contravene, conflict with, or result in a
violation of, or give any governmental body or other person
the right to challenge any of the transactions contemplated by
this Agreement or to exercise any remedy or obtain any relief
under any statute, regulation, or judicial or administrative
order to which either Texas Drydock or Subsidiary or any of
the Sellers, or any of the assets owned or used by either
Texas Drydock or Subsidiary, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any
governmental body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any license, permit or
authorization that is held by either Texas Drydock or
Subsidiary or that otherwise relates to the business of, or
any of the assets owned or used by, either Texas Drydock or
Subsidiary;
(iv) cause Purchaser, Texas Drydock or Subsidiary to
become subject to, or to become liable for the payment of, any
federal, state or local tax that would not otherwise be
imposed, assessed or collected from Purchaser, Texas Drydock
or Subsidiary, except for transactions contemplated by Article
12 or Article 13 hereof;
(v) contravene, conflict with, or result in a violation
or breach of any provision of, or give any person the right to
declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel,
terminate, or modify, any agreement, contract, obligation,
promise or undertaking (whether written or oral and whether
express or implied) that is legally binding upon either Texas
Drydock or Subsidiary; or
(vi) result in the imposition or creation of any
lien or encumbrance upon or with respect to any of the assets
owned or used by either Texas Drydock or Subsidiary.
Except as required by the HSR Act, neither any of the Sellers,
Texas Drydock nor Subsidiary is or will be required to give any
notice to or obtain any consent, authorization, approval or waiver
from any person in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the
transactions contemplated by this Agreement.
4.9 Financial Statements. Sellers have delivered to
Purchaser financial statements consisting of consolidated balance
sheets of Texas Drydock and Subsidiary at September 30, 1996, 1995
and 1994, and the related consolidated statements of earnings and
retained earnings for each of the years then ended, and the related
notes, as certified by KPMG Peat Marwick LLP, independent certified
public accountants, (the "Audited Financial Statements"). In
accordance with Section 6.8 hereof, Sellers will deliver, and they
do hereby agree to deliver, to Purchaser financial statements
consisting of an unaudited balance sheet of Texas Drydock and
Subsidiary at December 31, 1996 and the related unaudited
statements of earnings and retained earnings for the period then
ended (the "Unaudited Financial Statements"). The Audited
Financial Statements fairly present, and the Unaudited Financial
Statements when delivered will fairly present, the financial
position of Texas Drydock and Subsidiary and the results of
operations as at the respective dates and for the periods referred
to in such financial statements, all in accordance with generally
accepted accounting principles applied on a consistent basis. In
respect to the balance sheet at December 31, 1996 (the "Unaudited
Balance Sheet") contained in the Unaudited Financial Statements,
the Sellers represent to Purchaser that:
(i) The funded reserve established for all
outstanding Workman's Compensation and Longshoremen and Harbor
Workers claims is sufficient to settle all such claims as at
the date of such balance sheet;
(ii) The reserve for bad debts set forth in such
Unaudited Balance Sheet is sufficient to cover uncollectible
accounts and notes receivable as of the date of such Unaudited
Balance Sheet;
(iii) The premiums on insurance policies were accrued
and expensed through the date of such Unaudited Balance Sheet
in accordance with Texas Drydock's and Subsidiary's usual
practice;
(iv) Real property taxes and assessments have been
accrued through the date of such Unaudited Balance Sheet,
based on actual assessments for the year or the taxes and
assessments in prior years; and
(v) An appropriate amount has been accrued for
federal, state and local income and franchise taxes through
the date of such Unaudited Balance Sheet.
4.10 Operations of Texas Drydock and Subsidiary. Since
September 30, 1996:
(i) The operations of Texas Drydock and Subsidiary
have been conducted in the usual and customary manner; and
(ii) There has been no adverse change in the
business, properties or financial condition of either Texas
Drydock or Subsidiary other than changes resulting from
transactions in the ordinary course of business, none of which
(individually or in the aggregate) have been materially
adverse, other than changes contemplated or required by the
provisions of this Agreement.
4.11 Title to Properties; Encumbrances. The Disclosure
Letter contains a complete and accurate list of all real property,
leaseholds, or other interests therein owned by Texas Drydock and
Subsidiary. Texas Drydock and Subsidiary own (with good and
marketable title in the case of real property, subject only to the
matters permitted by the following sentence) all the properties and
assets (whether real, personal, or mixed and whether tangible or
intangible) reflected as owned in the Unaudited Balance Sheet, or
if acquired since that date, in the books and records of Texas
Drydock and Subsidiary (except for assets held under capitalized
leases disclosed or not required to be disclosed in the Disclosure
Letter) and personal property sold or abandoned since the date of
such Unaudited Balance Sheet in the ordinary course of business,
and all of the properties and assets purchased or otherwise
acquired by Texas Drydock and Subsidiary since the date of such
Unaudited Balance Sheet (except for personal property acquired and
sold since the date of such Unaudited Balance Sheet in the ordinary
course of business and consistent with past practice). All
material properties and assets reflected in such Unaudited Balance
Sheet are free and clear of all encumbrances and restrictions and
are not, in the case of real property, subject to any rights of
way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature except, with respect to
all such properties and assets, (a) mortgages or security interests
securing particular liabilities or obligations shown in such
Unaudited Balance Sheet, with respect to which no default (or event
that, with notice or lapse of time or both, would constitute a
default) exists, (b) mortgages or security interests incurred in
connection with the purchase of property or assets after the date
of the such Unaudited Balance Sheet (such mortgages and security
interests being limited to the property or assets so acquired),
with respect to which no default (or event that, with notice or
lapse of time or both, would constitute a default) exists,
(c) liens for current taxes not yet due, and (d) with respect to
real property, (i) minor imperfections of title, if any, none of
which is substantial in amount, materially detracts from the value
or impairs the use of the property subject thereto, or impairs the
operations of any Texas Drydock, and (ii) zoning laws and other
land use restrictions that do not impair the present or anticipated
use of the property subject thereto. All buildings, plants, and
structures owned by Texas Drydock lie wholly within the boundaries
of the real property owned by Texas Drydock and do not encroach
upon the property of, or otherwise conflict with the property
rights of, any other person.
4.12 Condition and Sufficiency of Assets. The buildings,
plants, structures and equipment of Texas Drydock and Subsidiary in
all material respects are structurally sound, are in good operating
condition and repair, and are adequate for the uses to which they
are being put, and none of such buildings, plants, structures, or
equipment is in need of maintenance or repairs except for ordinary,
routine maintenance and repairs that are not material in nature or
cost. To the best of Sellers knowledge, the building, plants,
structures and equipment of Texas Drydock and Subsidiary are
sufficient for the continued conduct of Texas Drydock's and
Subsidiary's businesses as presently conducted, except, of course,
for ordinary wear and tear and except as set forth in the
Disclosure Schedule.
4.13 Accounts and Notes Receivable. The Disclosure Schedule
correctly sets forth a schedule of all accounts receivable, notes
receivable and other monies due and owing to Texas Drydock and
Subsidiary reflected in the Unaudited Balance Sheet (the "Current
Receivables"), specifying the debtor, the amounts thereof, the due
dates, whether secured or unsecured and, with respect to secured
indebtedness, the general nature of the property securing same, and
an aging thereof by 30, 60 and over 90 days from the due date. All
such Current Receivables represented valid obligations arising from
sales actually made or services actually performed in the ordinary
course of business of either Texas Drydock or Subsidiary. Unless
such accounts are paid prior to the Closing Date, the reserves for
uncollectible accounts reflected in such Unaudited Balance Sheet
are adequate and have been calculated consistent with past practice
and do not represent a greater percentage of the Accounts
Receivable at that date than the average of the reserves reflected
in the balance sheets as of September 30, 1996, 1995 and 1994
contained in the Audited Financial Statement with respect to the
Accounts Receivable reflected therein. There is no known contest,
claim, or right of set-off that has been agreed to or is or has
been asserted by obligor relating to the amount or validity of any
of the Current Receivables.
4.14 Inventory. All inventory of Texas Drydock and
Subsidiary, whether or not reflected in the Unaudited Balance
Sheet, consists of a quality and quantity usable and salable in the
ordinary course of business either Texas Drydock or Subsidiary
within one hundred and twenty (120) days of the date of such
Unaudited Balance Sheet, except for obsolete items and items of
below-standard quality, all of which have been written off or
written down to net realizable value in the such balance sheet.
All inventories not written off have been priced at the lower of
cost or net realizable on a last in, first out basis. The
quantities of each item of inventory (whether raw materials, work-
in-process, or finished goods) are not excessive, but are
reasonable in the present circumstances of Texas Drydock and
Subsidiary.
4.15 No Undisclosed Liabilities. Texas Drydock and
Subsidiary has no liability or obligation of any nature (whether
known or unknown and whether absolute, accrued, contingent, or
otherwise), except for liabilities or obligations reflected or
reserved against in the Unaudited Balance Sheet and current
liabilities incurred in the ordinary course of business since the
date thereof; and the liabilities of Texas Drydock and Subsidiary
reflected in the Unaudited Balance Sheet are accurately stated as
of the date thereof in accordance with generally accepted
accounting principles.
4.16 Taxes. (a) Texas Drydock and Subsidiary have filed or
caused to be filed timely all tax returns that are or were required
to be filed by or with respect to either of them pursuant to
applicable laws. Texas Drydock and Subsidiary have paid, or made
provision for the payment of, all taxes that have or may have
become due pursuant to those tax returns or otherwise, or pursuant
to any assessment with respect to such taxes received by any of the
Sellers, MHI, Texas Drydock or Subsidiary, except such taxes, if
any, being contested in good faith and as to which adequate
reserves (determined in accordance with generally accepted
accounting principles) have been provided in the balance sheet at
September 30, 1996 contained in the Audited Financial Statements
and in the Unaudited Balance Sheet.
(b) The United States federal income tax returns of MHI,
Texas Drydock and Subsidiary have been audited by the Internal
Revenue Service or are closed by the applicable statute of
limitations for all taxable years through September 30, 1992. All
deficiencies proposed as a result of any such federal or state
audits have been paid, reserved against, settled, or are being
contested in good faith by appropriate proceedings. No such
proposed deficiency or settlement thereof is likely to have any
material adverse effect on any taxable year after the Closing.
(c) The charges, accruals, and reserves with respect to
taxes on the respective books of Texas Drydock and Subsidiary are
adequate (determined in accordance with generally accepted
accounting principles) and are at least equal to Texas Drydock's
and Subsidiary's liability for taxes. There exists no proposed tax
assessment against Texas Drydock or Subsidiary, except as disclosed
in the balance sheet as at September 30, 1996 contained in the
Audited Financial Statements. All taxes that either Texas Drydock
or Subsidiary is or was required by applicable law to withhold or
collect have been duly withheld or collected and, to the extent
required, have been paid to the proper governmental authority or
other person.
(d) All tax returns filed by (or that include on a
consolidated basis) either Texas Drydock or Subsidiary are true,
correct, and complete in all material respects. There is no tax
sharing agreement that will require any payment by either Texas
Drydock or Subsidiary after the date of this Agreement.
4.17 Employee Benefits. (a) As used in this Section, the
following terms have the meanings set forth below:
"Company Pension Plan" means all Pension Plans of which, in
the last five years, either Texas Drydock or Subsidiary or an ERISA
Affiliate of either Texas Drydock or Subsidiary is or was a Plan
Sponsor, otherwise contributes or has contributed, or otherwise
participates or has participated.
"ERISA" means the Employee Retirement Income Security Acts of
1974 or any successor law, and regulations and rules issued
pursuant to that Act or any successor law.
"ERISA Affiliate" means, with respect to either Texas Drydock
or Subsidiary, any other person that, together with the such
company, would be treated as a single employer under Internal
Revenue Code Section 414.
"Multiemployer Plan" has the meaning given in ERISA Section
3(37)(A).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" has the meaning given in ERISA Section 3(2)(A).
"Plan" has the meaning given in ERISA Section 3(3).
"Plan Sponsor"has the meaning given in ERISA Section 3(16)(B).
"Qualified Plan" means any Plan that meets or purports to meet
the requirements of Internal Revenue Code Section 401(a).
"Welfare Plan" has the meaning given in ERISA Section 3(1).
(b) The Disclosure Letter contains a complete and accurate
list of all Company Pension Plans and all Welfare Plans of Texas
Drydock and Subsidiary.
(c) The Disclosure Letter contains a complete and accurate
list of (i) all ERISA Affiliates of each of Texas Drydock and
Subsidiary, and (ii) all Pension Plans of which any such ERISA
Affiliate, in the last five years, is or was a Plan Sponsor,
participates or has participated, or contributes or has
contributed.
(d) Sellers will make available to Purchaser prior to
Closing, upon written request of Purchaser, true and complete
copies of any of the following:
(i) all documents that set forth the terms of each
Company Pension Plan, and Welfare Plan of Texas Drydock or
Subsidiary, including all plan descriptions and summary plan
descriptions of Company Pension Plans for which MHI, Texas
Drydock or Subsidiary are required to prepare, file, and
distribute.
(ii) all personnel, payroll, and employment manuals
and policies of Texas Drydock and Subsidiary;
(iii) all collective bargaining agreements pursuant
to which contributions have been made or obligations incurred
with respect to a Company Pension Plan maintained by Texas
Drydock and Subsidiary and the ERISA Affiliates;
(iv) all insurance policies purchased by or to
provide benefits under any Welfare Plan of Texas Drydock or
Subsidiary;
(v) all contracts with third party administrators,
actuaries, investment managers, consultants, and other
independent contractors that relate to any Company Pension
Plan;
(vi) all notifications to employees of their rights
under ERISA Section 601 et seq. and Internal Revenue Code
Section 4980B regarding continuation health coverage;
(vii) the Form 5500 filed in each of the most recent
three plan years with respect to each Company Pension Plan and
Welfare Plan of Texas Drydock and Subsidiary, including all
schedules thereto and the opinions of independent accountants;
(viii) the most recent determination letter for each
plan of Texas Drydock and Subsidiary that is a Qualified Plan;
and
(e) No Company Pension Plan is subject to Title IV of ERISA,
other than a Multiemployer Plan.
(f) No Welfare Plan of Texas Drydock and Subsidiary is
maintained in connection with any trust described in Section
501(c)(9) of the Internal Revenue Code,
(g) Texas Drydock and Subsidiary, with respect to all
Company Pension Plans, is in compliance in all material respects
with ERISA, the Internal Revenue Code and other applicable laws,
and with any applicable collective bargaining agreement.
(h) No transaction prohibited by ERISA Section 406 and no
"prohibited transaction" under Internal Revenue Code Section
4975(c) have occurred with respect to any Company Pension Plan.
(i) Neither Texas Drydock nor Subsidiary has any material
liability to the PBGC with respect to any Plan or has any liability
either (i) to the Internal Revenue Service for any tax imposed
under Chapter 43 of the Internal Revenue Code or (ii) under ERISA
Section 502 or Section 4071.
(j) All filings required by ERISA and the Internal Revenue
Code as to each Company Pension Plan have been timely filed, and
all notices and disclosures to participants required by either
ERISA or the Internal Revenue Code have been timely provided.
(k) All contributions and payments made or accrued with
respect to Company Pension Plans or Welfare Plans of Texas Drydock
and Subsidiary are deductible under Internal Revenue Code Section
162 or Section 404.
(l) Since September 30, 1996 there has been no establishment
or amendment of any Company Pension Plan.
(m) No event has occurred or circumstance exists that could
result in a material increase in premium costs of Welfare Plans of
Texas Drydock and Subsidiary that are insured, or a material
increase in benefit costs of such Welfare Plans that are self-
insured.
(n) Other than claims for benefits submitted by participants
or beneficiaries, no claim against, or legal proceeding involving,
any Company Pension Plan, or Welfare Plan of Texas Drydock and
Subsidiary is pending or, to Sellers' knowledge, is pending or
threatened.
(o) Each Qualified Plan of each of Texas Drydock and
Subsidiary listed on the Disclosure Letter is qualified in form and
operation under Internal Revenue Code Section 410(a); each trust
for each such Plan is except from federal income tax under Internal
Revenue Code Section 501(a). No event has occurred or circumstance
exists that will or could give rise to disqualification or loss of
tax-exempt status of any such Plan or trust.
(p) Neither Texas Drydock, Subsidiary nor any ERISA
Affiliate has filed a notice of intent to terminate any Company
Pension Plan or has adopted any amendment to treat a Company
Pension Plan as terminated. The PBGC has not instituted
proceedings to treat any Company Plan as terminated. No event has
occurred or circumstance exists that may constitute grounds under
ERISA Section 4042 for the termination of, or the appointment of a
trustee to administer, any Company Pension Plan.
(q) No amendment has been made, or is reasonably expected to
be made, to any Plan that has required or could require the
provision of security under ERISA Section 307 or Internal Revenue
Code Section 401(a)(29).
(r) No accumulated funding deficiency, whether or not
waived, exists with respect to any Company Pension Plan; no event
has occurred or circumstance exists that may result in an
accumulated funding deficiency as of the last day of the current
plan year of any such Company Pension Plan.
(s) The actuarial report for each Multiemployer Plan of each
of Texas Drydock and Subsidiary and each ERISA Affiliate fairly
presents the financial condition and the results of operations of
each such Plan in accordance with generally accepted accounting
principles.
(t) No reportable event (as defined in ERISA Section 4043
and in regulations issued thereunder) has occurred.
(u) Neither Texas Drydock, Subsidiary nor any ERISA
Affiliate has withdrawn from any Multiemployer Plan with respect to
which there is any outstanding liability as of the date of this
Agreement.
(v) Texas Drydock and Subsidiary have complied in all
material respects with the provisions of ERISA Section 601 et seq.
and Internal Revenue Code Section 4980B.
(w) Except to the extent required under ERISA Section 601
et.seq. and Internal Revenue Code Section 4980B, neither Texas
Drydock nor Subsidiary provides, or is obligated to provide, health
or welfare benefits for any retired or former employee.
4.18 Compliance With Laws; Governmental Authorizations.
(a) Each of Texas Drydock and Subsidiary is in full compliance in
all material respects with the legal requirements of any laws that
are applicable to it or to the conduct or operation of its business
or the ownership or use of any of its assets;
(b) No event has occurred or circumstance exists that (with
or without notice or lapse of time) (A) will constitute or result
in a violation by either Texas Drydock or Subsidiary of, or a
failure on the part of Texas Drydock or Subsidiary to comply with,
any law applicable to it that would have a material adverse effect
on the conduct or operation of its business or the ownership or use
of any of its assets, or (B) will give rise to any obligation on
the part of either Texas Drydock or Subsidiary to undertake, or to
bear all or any portion of the cost of, any remedial action of any
material nature; and
(c) Neither Texas Drydock nor Subsidiary has received, at
any time since September 30, 1996, any notice or other
communication (whether oral or written) from any governmental
authority or any other person regarding (A) any actual, alleged,
possible, or potential violation of, or failure to comply with, any
applicable law that would have a material adverse effect on the
conduct or operation of its business or the ownership or use of any
of its assets or (B) any actual, alleged, possible, or potential
obligation on the part of either Texas Drydock or Subsidiary to
undertake, or to bear all or any portion of the cost of, any
remedial action of any material nature.
4.19 Legal Proceedings; Orders. (a) There is no action,
arbitration, audit, hearing, investigation, litigation or suit (a
"Proceeding") pending:
(i) that has been commenced by or against either
Texas Drydock or Subsidiary or that otherwise relates to or
may affect the business of, or any of the assets owned or used
by, either Texas Drydock or Subsidiary; or
(ii) that challenges, or that, if decided adversely,
would have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the transactions
contemplated by the Agreement.
To the knowledge of any of the Sellers, Texas Drydock and
Subsidiary, (1) no such Proceeding has been threatened, and (2) no
event has occurred or circumstance exists that may give rise to or
serve as a basis for the commencement of any such Proceeding. Prior
to Closing, the Sellers, upon written request of Purchaser, will
make available to Purchaser true and complete copies of all
pleadings, correspondence, and other documents relating to each
Proceeding listed in the Disclosure Letter. The Proceedings listed
in the Disclosure Letter will not have a material adverse effect on
the business, operations, assets, condition, or prospects of either
Texas Drydock or Subsidiary.
(b) There is no judicial or administrative order to which
either Texas Drydock or Subsidiary, or any of the assets owned or
used by either Texas Drydock or Subsidiary, is subject;
(c) None of the Sellers is subject to any judicial or
administrative order that relates to the business of, or any of the
assets owned or used by, either Texas Drydock or Subsidiary; and
(d) No officer or director, and to the best of Seller's
knowledge, no agent, or employee, of either Texas Drydock or
Subsidiary is subject to any judicial or administrative order that
prohibits such officer, director, agent, or employee from engaging
in or continuing any conduct, activity, or practice relating to the
business of either Texas Drydock or Subsidiary.
(e) Each of Texas Drydock and Subsidiary is in full
compliance in all material respects with all of the terms and
requirements of any judicial or administrative order to which it,
or any of the assets owned or used by it, is subject;
(f) No event has occurred or circumstance exists that would
constitute or result in (with or without notice or lapse of time)
a violation of or failure to comply with any term or requirement of
any judicial or administrative order to which either Texas Drydock
or Subsidiary, or any of the assets owned or used by either Texas
Drydock or Subsidiary, is subject; and
(g) Neither Texas Drydock nor Subsidiary has received any
notice or other communication (whether oral or written) from any
governmental authority or any other person regarding any actual,
alleged, possible, or potential violation of, or failure to comply
with, any term or requirement of any judicial or administrative
order to which either Texas Drydock or Subsidiary, or any of the
assets owned or used by either Texas Drydock or Subsidiary, is
subject.
4.20 Absence of Certain Changes and Events. Since September
30, 1996, each of Texas Drydock and Subsidiary has conducted its
businesses only in the ordinary course and there has not been any:
(a) change in either Texas Drydock or Subsidiary authorized
or issued capital stock; grant of any stock option or right to
purchase shares of capital stock of either Texas Drydock or
Subsidiary; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption,
retirement, or other acquisition by either Texas Drydock or
Subsidiary of any shares of any such capital stock; or declaration
or payment of any dividend or other distribution or payment in
respect of shares of capital stock;
(b) amendment to the certificate or articles of
incorporation or the Bylaws of either Texas Drydock or Subsidiary;
(c) increase by either Texas Drydock or Subsidiary of any
bonuses, salaries, or other compensation to any stockholder,
director, officer, or (except for normal increases in the ordinary
course of business) employee or entry into any employment,
severance, or similar contract or agreement with any director,
officer, or employee;
(d) adoption of, or increase in the payments to or benefits
under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for
or with any employees of either Texas Drydock or Subsidiary;
(e) damage to or destruction or loss of any asset or
property of either Texas Drydock or Subsidiary, whether or not
covered by insurance, materially and adversely affecting the
properties, assets, business, financial condition, or prospects of
Texas Drydock and Subsidiary, taken as a whole;
(f) termination of, or receipt of notice of termination of
any contract or transaction involving a total remaining commitment
by or to Texas Drydock or Subsidiary of at least Fifty Thousand
Dollars ($50,000.00);
(g) sale (other than in the ordinary course of business),
lease, or other disposition of any asset or property of either
Texas Drydock or Subsidiary or mortgage, pledge, or imposition of
any lien or other encumbrance on any material asset or property of
either Texas Drydock or Subsidiary;
(h) cancellation or waiver of any claims or rights with a
value to Texas Drydock or Subsidiary or both in excess of Fifteen
Thousand Dollars ($15,000.00);
(i) material change in the accounting methods used by either
Texas Drydock or Subsidiary; or
(j) agreement, whether oral or written, by either Texas
Drydock or Subsidiary to do any of the foregoing.
4.21 Significant Contracts; No Defaults. (a) The Disclosure
Letter contains a complete and accurate list, and upon written
request of Purchaser, Sellers will cause to be delivered to
Purchaser true and complete copies, of:
(i) each contract or agreement that involves
performance of services or delivery of goods or materials by
either Texas Drydock or Subsidiary of an amount or value in
excess of One Hundred Thousand Dollars ($100,000.00);
(ii) each contract or agreement that involves
performance of services or delivery of goods or materials to
either Texas Drydock or Subsidiary of an amount or value in
excess of One Hundred Thousand Dollars ($100,000.00);
(iii) each contract or agreement that was not entered
into in the ordinary course of business and that either
involves expenditures or receipts of either Texas Drydock or
Subsidiary in excess of Twenty-Five Thousand ($25,000.00) or
contains or provides for an express undertaking by either
Texas Drydock or Subsidiary to be responsible for
consequential damages;
(iv) each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and other
contract or agreement affecting the ownership of, leasing of,
title to, use of, or any leasehold or other interest in, any
real or personal property (except personal property leases and
installment and conditional sales agreements having a value
per item or aggregate payments of less than Ten Thousand
Dollars ($10,000.00) and with terms of less than one year);
(v) each material licensing agreement or other
applicable contract or agreement with respect to patents,
trademarks, copyrights, or other intellectual property,
including agreements with current or former employees,
consultants, or contractors regarding the appropriation or the
non-disclosure of trade secrets, confidential information,
customer lists, or process technology;
(vi) each collective bargaining agreement and other
material contract to or with any labor union or other employee
representative of a group of employees;
(vii) each joint venture, partnership, and other
contract or agreement (however named) involving a sharing of
profits, losses, costs, or liabilities by either Texas Drydock
or Subsidiary with any person;
(viii) each contract or agreement containing covenants
that in any way purport to restrict the business activity of
either Texas Drydock or Subsidiary or any affiliate of either
Texas Drydock or Subsidiary or limit the freedom of either
Texas Drydock or Subsidiary or any affiliate of either Texas
Drydock or Subsidiary to engage in any line of business or to
compete with any person, other than Purchaser or a person
controlling, controlled by or under common control with,
Purchaser;
(ix) each contract or agreement providing for
payments to or by any person based on sales, purchases, or
profits, other than direct payments for goods;
(x) each written warranty, guaranty, and or other
similar undertaking with respect to contractual performance
extended by either Texas Drydock or Subsidiary other than in
the ordinary course of business; and
(xi) each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing.
The listing in the Disclosure Letter shall set forth in reasonable
detail the nature of each of such contracts and agreements,
including the parties, the approximate amount of the remaining
commitment of Texas Drydock and Subsidiary under such contracts and
agreements, and the office of either Texas Drydock or Subsidiary
where details relating to each such contract or agreement are
located. Upon Purchaser's written request, Sellers will make
available to Purchaser true and complete copies of any such control
or agreement.
(b) Neither any of the Sellers (nor any person affiliated
with any of the Sellers) has any rights under, and neither any of
the Sellers has or is subject to any obligation or liability under,
any contract or agreement that relates to the business of, or any
of the assets owned or used by, either Texas Drydock or Subsidiary;
and
(c) No officer or director, and to the best knowledge of any
of the Sellers, no agent, employee, consultant, or contractor of
either Texas Drydock or Subsidiary is bound by any contract or
agreement that purports to limit the ability of such officer,
director, agent, employee, consultant, or contractor to (A) engage
in or continue any conduct, activity, or practice relating to the
business of either Texas Drydock or Subsidiary, or (B) assign to
either Texas Drydock or Subsidiary or to any other person any
rights to any invention, improvement, or discovery.
(d) To the best of Sellers' knowledge, each contract and
agreement identified or required to be identified in the Disclosure
Letter is in all material respects in full force and effect and is
valid and enforceable by or against Texas Drydock or Subsidiary, as
appropriate, in accordance with its terms.
(e) Each of Texas Drydock and Subsidiary is in full
compliance in all material respects with all applicable terms and
requirements of each contract and agreement under which it has any
obligation or liability or by which it or any of the assets owned
or used by it is bound;
(f) To the best of Sellers' knowledge, each person that has
any contract or agreement involving an amount or value of more than
Ten Thousand Dollars ($10,000.00) under which either Texas Drydock
or Subsidiary has or had any rights is in full compliance in all
material respects with all applicable terms and requirements of
such contract or agreement;
(g) To the best of Sellers' knowledge, no event has occurred
or circumstance exists that (with or without notice or lapse of
time) will contravene, conflict with, or result in a violation or
breach of, or give either Texas Drydock or Subsidiary or any other
party to an agreement or contract with Texas Drydock or Subsidiary
the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate,
or modify, any contract or agreement involving an amount or value
of more than Ten Thousand Dollars ($10,000.00); and
(h) Neither Texas Drydock nor Subsidiary has given to or
received from any other person, at any time since September 30,
1996 any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential violation or
breach of, or default under, any contract or agreement involving an
amount or value of more than Ten Thousand Dollars ($10,000.00).
(i) There are no renegotiations of, attempts to renegotiate,
or outstanding rights to renegotiate, any material amounts paid or
payable to either Texas Drydock or Subsidiary under current or
completed contracts or agreements with any person and no person has
made written demand for such renegotiation.
4.22 Insurance. (a) Prior to Closing, Sellers shall
have made available to Purchaser:
(i) true and complete copies of all policies of
insurance to which either Texas Drydock or Subsidiary is a
party or under which either Texas Drydock or Subsidiary, or
any director of either Texas Drydock or Subsidiary, is or has
been covered at any time within the three (3) years preceding
the date of this Agreement;
(ii) true and complete copies of all pending
applications for policies of insurance; and
(iii) any statement by the auditor of either Texas
Drydock's or Subsidiary's financial statements with regard to
the adequacy of such entity's coverage or of the reserves for
claims.
(b) The Disclosure Letter describes:
(i) any self-insurance arrangement by or affecting
either Texas Drydock or Subsidiary, including any reserves
established thereunder;
(ii) any contract or arrangement, other than a
policy of insurance, for the transfer or sharing of any risk
by Texas Drydock or Subsidiary; and
(iii) all obligations of Texas Drydock and Subsidiary
to third parties with respect to insurance (including such
obligations under leases and service agreements) and
identifies the policy under which such coverage is provided.
(c) The Disclosure Letter sets forth, by year, for the
current policy year and each of the two preceding policy years:
(i) a summary of the loss experience under each
policy;
(ii) a statement describing each claim under an
insurance policy for an amount in excess of Fifty Thousand
Dollars ($50,000.00), which sets forth:
(A) the name of the claimant;
(B) a description of the policy by insurer, type of
insurance, and period of coverage; and
(C) the amount and a brief description of the
claim; and
(iii) a statement describing the loss experience for
all claims that were self-insured, including the number and
aggregate cost of such claims.
(d) To the best of Sellers' knowledge, all policies to which
Texas Drydock or Subsidiary is a party or that provide coverage to
Texas Drydock or Subsidiary, or any director or officer of either
Texas Drydock or Subsidiary:
(i) are valid, outstanding, and enforceable;
(ii) are issued by an insurer that is financially
sound and reputable;
(iii) taken together, provide adequate insurance
coverage for all risks normally insured against by a person
carrying on the same business or businesses as Texas Drydock
and Subsidiary;
(iv) are sufficient for compliance with all
applicable laws and all contracts and agreements to which
Texas Drydock or Subsidiary is a party or by which either of
them is bound;
(v) will not terminate by reason of this Agreement
or the consummation of the transactions contemplated by this
Agreement; and
(e) No policy to which Texas Drydock or Subsidiary is a
party or that provides coverage to either Texas Drydock or
Subsidiary provides for any retrospective premium adjustment or
other experienced-based liability on the part of either Texas
Drydock or Subsidiary.
(f) Neither any of the Sellers, MHI, Texas Drydock nor
Subsidiary has received (A) any refusal of coverage or any notice
that a defense will be afforded with reservation of rights, or (B)
any notice of cancellation or any other indication that any
insurance policy is no longer in full force or effect or will not
be renewed or that the issuer of any policy is not willing or able
to perform its obligations thereunder.
(g) Texas Drydock and Subsidiary have paid all premiums due,
and have otherwise performed all of their respective obligations,
under each policy to which either of them is a party or that
provides coverage to either of them or any director thereof.
(h) Texas Drydock and Subsidiary have given notice to the
insurer of all claims that may be insured thereby.
4.23 Environmental Matters. (a) Each of Texas Drydock and
Subsidiary is in compliance in all material respects with, and is
not in violation of or liable under, any Environmental Law. For
purposes of this Agreement, the term "Environmental Laws" is
defined as all laws, rules, regulations, statues, ordinances,
decrees or orders of any governmental entity relating to (i) the
control of any potential pollutant or protection of the air, water,
or land, (ii) solid, gaseous or liquid waste generation, handling,
treatment, storage, disposal or transportation, and (iii) exposure
to hazardous, toxic or other substances alleged to be harmful, and
includes without limitation, (A) the terms and conditions of any
license, permit, approval, or other authorization by any
governmental entity, and (B) judicial, administrative, or other
regulatory decrees, judgments, and orders of any governmental
entity. The term "Environmental Laws" shall include, but not be
limited to the following statues and the regulations promulgated
thereunder: the Clean Air Act, 42 U.S.C. Section 7401 et seq., the Clean
Water Act 33 U.S.C. Section 1251 et seq., the Resource Conservation
Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq., the Superfund
Amendments and Reauthorization Act, 42 U.S.C. Section 11011 et seq., the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq., the Water
Pollution Control Act, 33 U.S.C. Section 1251 et seq., the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq., the Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA"),
42 U.S.C. Section 9601 et seq., and any state, county, or local
regulations similar thereto.
(b) Neither any of the Sellers, Texas Drydock or Subsidiary
has received, or has any knowledge of, any actual or threatened
order, notice, or other communication from (i) any governmental
authority or private citizen acting in the public interest, or (ii)
the current or prior owner or operator of any facilities, of any
actual or potential violation or failure to comply with any
Environmental Law, or of any actual or threatened obligation to
undertake or bear any cost, damages, expense, liability or other
responsibility arising from or under any Environmental Law or any
occupational safety and health law with respect to any of the
facilities of either Texas Drydock or Subsidiary or any other
properties or assets (whether real, personal, or mixed) in which
either Texas Drydock or Subsidiary has had an interest, or with
respect to any property or facility at or to which Hazardous
Materials (as defined in any applicable Environmental Law,
including petroleum and all derivatives thereof or synthetic
substitutes therefor and asbestos or asbestos-containing materials)
were generated, manufactured, refined, transferred, imported, used,
or processed by Texas Drydock or Subsidiary, or any other person
for whose conduct they are or may be held responsible, or from
which Hazardous Materials have been transported, treated, stored,
handled, transferred, disposed, recycled, or received.
(c) There are no pending or, to the knowledge of any of the
Sellers, Texas Drydock or Subsidiary, threatened claims,
encumbrances, or other restrictions of any nature, resulting from
any cost, damages, expense, liability or other responsibility
arising from or under or pursuant to any Environmental Law, with
respect to or affecting any of the facilities or any other
properties and assets (whether real, personal, or mixed) in which
Texas Drydock or Subsidiary has or had an interest.
(d) Neither any of the Sellers, Texas Drydock nor Subsidiary
has received, or has any knowledge of, any citation, directive,
inquiry, notice, judicial or administrative order, summons, or
warning that relates to the distribution, generation, handling,
importing, management, manufacturing, processing, production,
refinement, release, storage, transfer, transportation, treatment,
or use (including any withdrawal or other use of groundwater) of
Hazardous Materials in, on, under, about, or from the facilities of
Texas Drydock or Subsidiary into the environment, and any other
act, business, operation, or thing that increases the danger, or
risk of danger, or poses an unreasonable risk of harm to persons or
property on or off such facilities, or that may affect the value of
such facilities or either Texas Drydock or Subsidiary, or any
alleged, actual, or potential violation or failure to comply with
any Environmental Law, or of any alleged, actual, or potential
obligation to undertake or bear the cost, damages, expense,
liability or other responsibility arising from or under or pursuant
to any Environmental Law with respect to any of the facilities or
any other properties or assets (whether real, personal, or mixed)
in which either Texas Drydock or Subsidiary had an interest, or
with respect to any property or facility to which Hazardous
Materials generated, manufactured, refined, transferred, imported,
used, or processed by Texas Drydock or Subsidiary, or any person
for whose conduct they are or may be held responsible, have been
transported, treated, stored, handled, transferred, disposed,
recycled, or received.
(e) There has been no release or, to the knowledge of any of
the Sellers, Texas Drydock and Subsidiary, a threat of release, of
any Hazardous Materials at or from the facilities of either Texas
Drydock or Subsidiary or at any other locations where any Hazardous
Materials were generated, manufactured, refined, transferred,
produced, imported, used, or processed from or by the facilities,
or from or by any other properties and assets (whether real,
personal, or mixed) in which Texas Drydock or Subsidiary has or had
an interest, except in compliance with Environmental Laws.
(f) Prior to Closing, Sellers will deliver to Purchaser true
and complete copies and results of any of the following, if
requested by Purchaser: reports, studies, analyses, tests, or
monitoring possessed or initiated by any of the Sellers, MHI, Texas
Drydock or Subsidiary pertaining to Hazardous Materials or
Hazardous Activities in, on, or under the facilities of either
Texas Drydock or Subsidiary, or concerning compliance by Texas
Drydock or Subsidiary or any other person for whose conduct they
are or may be held responsible, with respect to Environmental Laws.
4.24 Employees. (a) The Disclosure Letter contains a
complete and accurate list of the following information for each
employee, officer or director of Texas Drydock or Subsidiary,
including each officer or employee on leave of absence or layoff
status, whose compensation for the calendar year 1996 exceeded, or
whose annualized compensation at such officer's or employee's
current pay rate can be expected to exceed, Fifty Thousand Dollars
($50,000.00): employer; name; job title; current compensation paid
or payable and any change in compensation since September 30, 1996;
vacation accrued; and service credited for purposes of vesting and
eligibility to participate under Texas Drydock's or Subsidiary's
pension, retirement, profit-sharing, thrift-savings, deferred
compensation, stock bonus, stock option, cash bonus, employee stock
ownership (including investment credit or payroll stock ownership),
severance pay, insurance, medical, welfare, or vacation plan, or
other employee benefit plan.
(b) To Sellers' knowledge, no director, officer, or other
key employee of either Texas Drydock or Subsidiary intends to
terminate his employment with such company.
(c) No retired employee, officer or director of either Texas
Drydock or Subsidiary, or any of their dependents, is receiving
benefits or scheduled to receive benefits in the future: under any
pension benefit, pension option election, retiree medical insurance
coverage, retiree life insurance coverage, or similar benefit plan
under which Texas Drydock or Subsidiary has any obligation
whatsoever.
4.25 Labor Relations; Compliance. No group of employees of
either Texas Drydock or Subsidiary is represented by any union or
other collective bargaining unit; no petition for an election as to
representation of any group of employees of either Texas Drydock or
Subsidiary by a union or other collective bargaining unit has been
filed; and there is no collective bargaining agreement or
employment contract between either Texas Drydock or Subsidiary and
any employee or any representative of any group of employees of
either Texas Drydock or Subsidiary. In the three (3) years
preceding this Agreement, there has not been, there is not
presently pending or existing, and there is not now threatened, (a)
any strike, slowdown, picketing, work stoppage, or employee
grievance process, (b) any proceeding against or affecting either
Texas Drydock or Subsidiary relating to the alleged violation of
any applicable laws or regulations pertaining to labor relations or
employment matters, including any charge or complaint filed by an
employee or union with the National Labor Relations Board, the
Equal Employment Opportunity Commission, or any comparable
governmental authority, organizational activity, or other labor or
employment dispute against or affecting either Texas Drydock or
Subsidiary, or (c) any application for certification of a
collective bargaining agent. To Sellers' knowledge, no event has
occurred or circumstance exists that could provide the basis for
any work stoppage or other labor dispute. There is no lockout of
any employees by either Texas Drydock or Subsidiary, and no such
action is contemplated by either Texas Drydock or Subsidiary. Each
of Texas Drydock and Subsidiary has complied in all material
respects with all applicable laws relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages,
hours, benefits, collective bargaining, the payment of social
security and similar taxes, occupational safety and health, and
plant closing. Neither Texas Drydock nor Subsidiary is liable for
the payment of any compensation, damages, taxes, fines, penalties,
or other amounts, however designated, for failure to comply with
any applicable labor or employment laws.
4.26 Intellectual Property. (a) Neither Texas Drydock nor
Subsidiary uses in the regular course of its business or possesses
any assumed or fictitious business names, trademarks or trading
names, patents, patent applications, inventions, discoveries that
may be patentable, or licenses, except for any license implied by
the sale of a product and perpetual, paid-up licenses for commonly
available software programs with a value of less than Five Thousand
Dollars ($5,000.00) under which Texas Drydock or Subsidiary is the
licensee.
(b) None of the products manufactured and sold, nor any
process or know-how used, by each of Texas Drydock and Subsidiary
infringes upon, and each of Texas Drydock and Subsidiary conducts
its business as now operated without conflict with, or infringement
upon, any valid patent, application for patent, invention,
trademark, trade name, copyright, trade secret or secret formula of
any person.
4.27 Certain Payments. In the five (5) years preceding the
date of this Agreement, neither Texas Drydock nor Subsidiary nor
any director, officer, agent, or employee of Texas Drydock or
Subsidiary or, to Sellers' knowledge, any other person associated
with or acting for or on behalf of either Texas Drydock or
Subsidiary, has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback, or other
payment to any person, private or public, regardless of form,
whether in money, property, or services (i) to obtain favorable
treatment in securing business, (ii) to pay for favorable treatment
for business secured, (iii) to obtain special concessions or for
special concessions already obtained, for or in respect of either
Texas Drydock or Subsidiary or (iv) in violation of any applicable
law, (b) established or maintained any fund or asset that has not
been recorded in the books and records of either Texas Drydock or
Subsidiary.
4.28 Disclosure. (a) No representation or warranty of
Sellers in this Agreement and no statement in the Disclosure Letter
omits to state a material fact necessary to make the statements
herein or therein, in light of the circumstances in which they were
made, not misleading.
(b) There is no fact known to any of the Sellers that has
specific application to Texas Drydock or Subsidiary (other than
general economic or industry conditions) and that materially
adversely affects the assets, business, prospects, financial
condition, or results of operations of Texas Drydock and Subsidiary
(on a consolidated basis) that has not been set forth in this
Agreement or the Disclosure Letter.
4.29 Brokers or Finders. Sellers and their agents have
incurred no obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other similar
payment in connection with this Agreement.
4.30 Unfilled Purchase Orders. All unfilled purchase orders
of each of Texas Drydock and Subsidiary were are at prices that
were competitive at the time the purchase order was entered into,
and no such purchase order was, is or will be with any person who
is one of the Sellers or who is related to or affiliated with any
of the Sellers.
4.31 Uncompleted Sales Contracts. All uncompleted sales
contracts of each of Texas Drydock and Subsidiary are with persons,
corporations or other entities that are not related to or
affiliated with any of the Sellers. Each of Texas Drydock and
Subsidiary has accounted for all uncompleted contracts for
financial accounting purposes under the percentage of completion
method in accordance with generally accepted accounting principles
consistently applied. The Disclosure Letter sets forth a
percentage of completion cost and profit analysis for each major
(over $100,000) sales contract of each of Texas Drydock and
Subsidiary reflected in the Unaudited Financial Statements. Given
the additional knowledge gained to the date of this Agreement,
Sellers continue to believe that the estimates and assumptions
utilized to prepare such analysis remains realistic as of the date
of this Agreement. The Disclosure Letter separately identifies
each major contract of either Texas Drydock or Subsidiary that at
the date of this Agreement Sellers expect to be completed at a
loss.
4.32 Warranty Claims. At the date of this Agreement, there
are no material (in excess of $25,000) warranty claims or similar
demands that have been made against either Texas Drydock or
Subsidiary and at the date of this Agreement, all warranty claims
or similar demands that have been made against either Texas Drydock
or Subsidiary do not exceed in the aggregate One Hundred and Fifty
Thousand Dollars ($150,000.00). At the date of this Agreement,
there are no known customer claims, chargebacks, offsets, refunds
or similar demands that have been made by customers of either Texas
Drydock or Subsidiary.
4.33 Licenses and Permits. Each of Texas Drydock and
Subsidiary has all governmental licenses, permits and other
authorizations that are material to the conduct or operation of
their respective businesses as currently conducted and operated.
ARTICLE 5.
Representations and Warranties of Purchaser
Purchaser represents and warrants to Sellers the following:
5.1 Organization and Good Standing. Purchaser is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware.
5.2 Authority; Conflicts. Subject to appropriate action by
the Board of Directors of Trinity Industries, Inc. to authorize
Purchaser to enter into this Agreement (unless by reason of certain
events occurring subsequent to the date of this Agreement, such
authorization ceases to be necessary) and subject to appropriate
actions by the respective Boards of Directors of Halter Marine
Group, Inc. and Purchaser to authorize the execution and delivery
of this Agreement:
(a) This Agreement constitutes the legal, valid, and binding
obligation of Purchaser, enforceable against Purchaser in
accordance with its terms. Purchaser has the absolute and
unrestricted right, power, and authority to execute and deliver
this Agreement and to perform its obligations under this Agreement;
and
(b) Neither the execution and delivery of this Agreement by
Purchaser nor the consummation or performance by Purchaser of any
of the transactions contemplated by this Agreement will, directly
or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Certificate of
Incorporation of Purchaser, or (B) any resolution adopted by
the Board of Directors or the stockholders of Purchaser;
(ii) contravene, conflict with, or result in a
violation of, or give any governmental body or other person
the right to challenge any of the transactions contemplated by
this Agreement or to exercise any remedy or obtain any relief
under any statute, regulation, or judicial or administrative
order to which at Closing Purchaser or any of the assets owned
or used by Purchaser, may be subject;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any
governmental body the right to revoke, withdraw, suspend,
cancel, terminate, or modify, any license, permit or
authorization that will be held by Purchaser at Closing or
that otherwise relates to the business of, or any of the
assets will be owned at Closing by, Purchaser;
(iv) contravene, conflict with, or result in a
violation or breach of any provision of, or give any person
the right to declare a default or exercise any remedy under,
or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any material agreement, contract,
obligation, promise or undertaking (whether written or oral
and whether express or implied) that is legally binding upon
Purchaser; or
(v) result in the imposition or creation of any
lien or encumbrance upon or with respect to any of the assets
owned Purchaser at Closing.
Except as required by the HSR Act, Purchaser is not and will not be
required to give notice to or obtain any consent from any person in
connection with the execution and delivery of this Agreement or the
consummation or performance of any of the transactions contemplated
by this Agreement.
5.3 Investment Intent. Purchaser is acquiring the MHI
Shares and the Texas Drydock Shares for its own account and not
with a view to their distribution within the meaning of Section
2(11) of the Securities Act of 1933, as amended.
5.4 Certain Proceedings. There is no pending Proceeding
that has been commenced against Purchaser and that challenges, or
may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the transactions contemplated by
this Agreement. To Purchaser's knowledge, no such Proceeding has
been threatened.
5.5 Brokers or Finders. Purchaser and its officers and
agents have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or
other similar payment in connection with this Agreement.
ARTICLE 6.
Covenants of Sellers Prior to Closing
6.1 Access and Investigation. Between the date of this
Agreement and the Closing Date, Sellers will, and will cause each
of MHI, Texas Drydock and Subsidiary and its officers, employees
and agents to, (a) afford Purchaser and its representatives
(collectively, "Purchaser's Advisors") full and free access during
normal business hours to the personnel, properties (including
subsurface testing), contracts, books and records, and other
documents and data of each of MHI, Texas Drydock and Subsidiary,
(b) furnish Purchaser and Purchaser's Advisors with copies of all
such contracts, books and records, and other existing documents and
data as Purchaser may reasonably request, and (c) furnish Purchaser
and Purchaser's Advisors with such additional financial, operating,
and other data and information as Purchaser may reasonably request.
6.2 Operation of the Businesses of Texas Drydock and
Subsidiary. Between the date of this Agreement and the Closing
Date, Sellers will, and will cause each of Texas Drydock and
Subsidiary to:
(a) conduct the business of such company only in the
ordinary course of business;
(b) use their best efforts to preserve intact the current
business organization of each of Texas Drydock and Subsidiary, keep
available the services of the current officers, employees, and
agents of each of Texas Drydock and Subsidiary, and maintain the
relations and good will with suppliers, customers, landlords,
creditors, employees, agents, and others having business
relationships with each of Texas Drydock and Subsidiary;
(c) confer with Purchaser concerning operational matters of
a material nature; and
(d) otherwise report periodically to Purchaser concerning
the status of the business, operations, and finances of each Texas
Drydock and Subsidiary.
6.3 Required Approvals. As promptly as practicable after
the date of this Agreement, Sellers will, and will cause each of
MHI, Texas Drydock and Subsidiary to, make all filings required by
applicable law to be made by them in order to consummate the
transactions contemplated by this Agreement (including all filings
under the HSR Act). Between the date of this Agreement and the
Closing Date, Sellers will, and will cause each of MHI, Texas
Drydock and Subsidiary to, (a) cooperate with Purchaser with
respect to all filings that Purchaser elects to make or is required
by law to make in connection with the transactions contemplated by
this Agreement, and (b) cooperate with Purchaser in obtaining all
consents that may be required (including taking all actions
requested by Purchaser to cause early termination of any applicable
waiting period under the HSR Act).
6.4 Notification. Between the date of this Agreement and
the Closing Date, each of the Sellers will promptly notify
Purchaser in writing if either of the Sellers, MHI, Texas Drydock
or Subsidiary becomes aware of any fact or condition that causes or
constitutes a breach of any of the MHI Sellers', the Texas Drydock
Seller's or the Sellers' representations and warranties as of the
date of this Agreement, or if any of the Sellers, MHI, Texas
Drydock or Subsidiary becomes aware of the occurrence after the
date of this Agreement of any fact or condition that would (except
as expressly contemplated by this Agreement) cause or constitute a
breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence
or discovery of such fact or condition. Should any such fact or
condition require any change in the Disclosure Letter if the
Disclosure Letter were dated the date of the occurrence or
discovery of any such fact or condition, each of the Sellers will
promptly deliver to Purchaser a supplement to the Disclosure Letter
specifying such change. During the same period, each of the
Sellers will promptly notify Purchaser of the occurrence of any
breach of any covenant of Sellers in this Article 6 or of the
occurrence of any event that may make the satisfaction of the
conditions in Article 8 impossible or unlikely.
6.5 Payment of Indebtedness by Related Persons. Sellers
will cause all indebtedness, if any, owed to each of MHI, Texas
Drydock and Subsidiary by any of the Sellers or any person related
to or affiliated with any of the Sellers to be paid in full prior
to Closing.
6.6 Best Efforts. Between the date of this Agreement and
the Closing Date, Sellers will use their best efforts to cause the
conditions in Articles 8 and 9 to be satisfied.
6.7 Payment of Bonuses. Listed on the Disclosure Schedule
are all bonuses which Texas Drydock or Subsidiary is or will be
obligated to pay or intend to pay to their respective employees
after the date of this Agreement. Sellers will cause Texas Drydock
or Subsidiary to pay at or prior to Closing all such bonuses set
forth in the Disclosure Schedule and the total amount of all such
bonuses shall not exceed Three Million Two Hundred Fifty Thousand
Dollars ($3,250,000.00).
6.8 Delivery of Unaudited Financial Statements. Sellers
will cause to be prepared and delivered to Purchaser the Unaudited
Financial Statements required by Section 4.9 of this Agreement no
later than five (5) days after the date of this Agreement.
6.9 Delivery of Disclosure Letter. Sellers will cause
the Disclosure Letter to be prepared and delivered to Purchaser no
later than twenty-one (21) days after the date of this Agreement.
ARTICLE 7.
Covenants of Purchaser Prior to Closing Date
7.1 Approvals of Governmental Authorities. As promptly as
practicable after the date of this Agreement, Purchaser will, and
will cause each of persons affiliated with it to make all filings
required by applicable law to be made by them to consummate the
transactions contemplated by this Agreement (including all filings
under the HSR Act). Between the date of this Agreement and the
Closing Date, Purchaser will, and will cause each person affiliated
with it to, cooperate with Sellers with respect to all filings that
Sellers are required by applicable law to make in connection with
the transactions contemplated by this Agreement, and (ii) cooperate
with Sellers in obtaining all consents may be required; provided
that this Agreement will not require Purchaser to dispose of or
make any change in any portion of its business or to incur any
other burden to obtain a governmental authorization or approval,
other than the HSR Act filing fee.
7.2 Best Efforts. Except as set forth in the proviso to
Section 7.1, between the date of this Agreement and the Closing
Date, Purchaser will use its best efforts to cause the conditions
in Articles 8 and 9 to be satisfied.
7.3 Review of Unaudited Financial Statements. No later than
five (5) days after the date of its receipt of the Unaudited
Financial Statements, Purchaser, in its sole and absolute
discretion, either shall accept in writing the Unaudited Financial
Statements as appropriate for this Agreement and Purchaser's
expectations or shall reject the same. If the Purchaser does not
so accept in writing the Unaudited Financial Statements within such
five (5) day period, Purchaser shall be deemed to have rejected the
Unaudited Financial Statements. Any rejection of the Unaudited
Financial Statements shall invoke Article 10 of this Agreement.
7.4 Review of Disclosure Letter. No later than fourteen
(14) days after the date of its receipt of the Disclosure Letter,
Purchaser shall, in its sole and absolute discretion, either accept
in writing the Disclosure Letter and the matters specifically
disclosed therein or reject the same. If the Purchaser does not
accept in writing the Disclosure Letter and the matters
specifically disclosed therein within such fourteen (14) day
period, Purchaser shall be deemed to have rejected the Disclosure
Letter. Any rejection of the Disclosure Letter shall invoke
Article 10 of this Agreement.
ARTICLE 8.
Conditions Precedent to Purchaser's Obligation to Close
Purchaser's obligation to purchase the MHI Shares and the
Texas Drydock Shares and to take the other actions required to be
taken by Purchaser at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions
(any of which may be waived by Purchaser, in whole or in part):
8.1 Accuracy of Representations. All of the MHI Sellers',
the Texas Drydock Seller's and the Sellers' representations and
warranties in this Agreement (considered collectively), and each of
these representations and warranties (considered individually),
must have been accurate in all material respects as of the date of
this Agreement, after giving effect to the Disclosure Letter, and
must be accurate in all material respects as of the Closing Date as
if made on the Closing Date, after giving effect to the Disclosure
Letter and any supplement to the Disclosure Letter.
8.2 Sellers' Performance. (a) All of the covenants and
obligations that Sellers are required to perform or to comply with
pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered by the MHI
Sellers, the Texas Drydock Seller and the Sellers pursuant to
Section 1.6 must have been delivered, and each of the other
covenants and obligations in Section 6.3 and Section 6.6 must have
been performed and complied with in all respects.
8.3 Weller Consulting Agreement. Weller shall have executed
than delivered to Texas Drydock the Weller Consulting Agreement and
the same shall not have been amended or modified and shall be in
full force and effect at the time of Closing.
8.4 Covington Employment Agreement. Covington shall have
executed and delivered to Texas Drydock the Covington Employment
Agreement and the same shall not have been amended or modified and
shall be in full force and effect at the time of Closing.
8.5 Fogal Employment Agreement. Robert W. Fogal shall have
executed and delivered to Texas Drydock the Fogal Employment
Agreement and the same shall not have been amended or modified and
shall be in full force and effect at the time of Closing.
8.6 Authorizations. The Board of Directors of Trinity
Industries, Inc. shall have authorized Purchaser to enter into this
Agreement (if the same is required at the time of Closing) and the
respective Boards of Directors of Halter Marine Group, Inc. and
Purchaser shall have authorized the execution and delivery of this
Agreement on behalf of Purchaser.
8.7 No Proceedings. Since the date of this Agreement, there
must not have been commenced or threatened against Purchaser, or
against any person affiliated with Purchaser, any Proceeding
(a) involving any challenge to, or seeking damages or other relief
in connection with, any of the transactions contemplated by this
Agreement, or (b) that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with any of the
transactions contemplated by this Agreement.
8.8 No Claim Regarding Stock Ownership or Sale Proceeds.
There must not have been made or threatened by any person any claim
asserting that such person (a) is the holder or the beneficial
owner of, or has the right to acquire or to obtain beneficial
ownership of, any stock of, or any other voting, equity, or
ownership interest in, either MHI, Texas Drydock or Subsidiary, or
(b) is entitled to all or any portion of the purchase price payable
for either the MHI Shares or the Texas Drydock Shares.
8.9 HSR Act. Notification shall have been duly given under
the HSR Act of the transactions contemplated hereby and either the
waiting period required by such act shall have expired or there
shall have been an earlier termination of such waiting period.
8.10 Divesture by Trinity Industries, Inc. Trinity
Industries, Inc. shall have distributed to its stockholders
substantially all of its stock of Halter Marine Group, Inc.
ARTICLE 9.
Conditions Precedent to Sellers' Obligation to Close
The MHI Sellers' obligation to sell the MHI Shares and the
Texas Drydock Seller's obligation to sell the Texas Drydock Shares
and the Sellers' obligation to take the other actions required to
be taken by Sellers at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions
(any of which may be waived by Sellers, in whole or in part):
9.1 Accuracy of Representations. All of Purchaser's
representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties
(considered individually), must have been accurate in all material
respects as of the date of this Agreement and must be accurate in
all material respects as of the Closing Date as if made on the
Closing Date.
9.2 Purchaser's Performance. (a) All of the covenants and
obligations that Purchaser is required to perform or to comply with
pursuant to this Agreement at or prior to the Closing (considered
collectively), and each of these covenants and obligations
(considered individually), must have been performed and complied
with in all material respects.
(b) Purchaser must have delivered each of the documents
required to be delivered by Purchaser pursuant to Section 1.6 and
must have made the cash payments required to be made by Purchaser
pursuant to Section 1.6(d)(i) and Section 1.6(d)(ii).
9.3 No Proceedings. Since the date of this Agreement, there
must not have been commenced or threatened against any of the
Sellers, or against any person affiliated with any of the Sellers,
any Proceeding (a) involving any challenge to, or seeking damages
or other relief in connection with, any of the transactions
contemplated by this Agreement, or (b) that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with
any of the transactions contemplated by this Agreement.
9.4 HSR Act. Notification shall have been duly given under
the HSR Act of the transactions contemplated hereby and either the
waiting period required by such act shall have expired or there
shall have been an earlier termination of such waiting period.
9.5 Divesture by Trinity Industries, Inc. Trinity
Industries, Inc. shall have distributed to its stockholders
substantially all of its stock of Halter Marine Group, Inc.
ARTICLE 10.
Termination
10.1 Termination Events. This Agreement may, by notice given
prior to or at the Closing, be terminated:
(a) by either Purchaser or Sellers if Purchaser rejects or
is deemed to reject the Unaudited Financial Statements pursuant to
Section 7.3 of this Agreement;
(b) by either Purchaser or Sellers if Purchaser rejects or
is deemed to reject the Disclosure Letter pursuant to Section 7.4
of this Agreement;
(c) by Purchaser if Seller delivers one or more supplements
to the Disclosure Letter and Purchaser, in its sole judgment,
determines that the matters disclosed in any such supplement or
supplements, individually or collectively, have had or may have an
adverse effect on any of the businesses, assets, prospects or
affairs of Texas Drydock or Subsidiary.
(d) by either Purchaser or Sellers if a material breach of
any provision of this Agreement has been committed by the other
party and such breach has not been waived;
(e) (i) by Purchaser if any of the conditions in Article 8
has not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the
failure of Purchaser to comply with its obligations under this
Agreement) and Purchaser has not waived such condition on or before
the Closing Date; or (ii) by Sellers, if any of the conditions in
Article 9 has not been satisfied as of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other
than through the failure of Sellers to comply with their
obligations under this Agreement) and Sellers have not waived such
condition on or before the Closing Date;
(f) by mutual consent of Purchaser and Sellers; or
(g) by either Purchaser or Sellers if the Closing has not
occurred (other than through the failure of any party seeking to
terminate this Agreement to comply fully with its obligations under
this Agreement) on or before May 31, 1997 or such later date as the
parties may agree upon.
10.2 Effect of Termination. Upon any termination of this
Agreement pursuant to Section 10.1, this Agreement shall be void
and of no effect, other than the obligations in Section 16.1 and
Section 16.3 which will survive, and shall result in no obligation
of or liability to any party, unless such termination was the
result of an intentional breach of any representation, warranty or
covenant in this Agreement, in which case the party who breached
the representation, warranty or covenant shall be liable to the
other party for damages, and all costs and expenses incurred in
connection with the preparation, negotiation, execution and
performance of this Agreement and filing under the HSR Act.
ARTICLE 11.
Indemnification; Remedies
11.1 Survival; Right to Indemnification Not Affected by
Knowledge. All representations, warranties, covenants, and
obligations in this Agreement, the Disclosure Letter, the
supplements to the Disclosure Letter, the certificates delivered
pursuant to Section 1.6(a)(iv), Section 1.6(b)(iii), Section
1.6(c)(i) and Section 1.6(d)(iv) and any other certificate or
document delivered pursuant to this Agreement will survive the
Closing. The right to indemnification, payment of damages or other
remedy based on such representations, warranties, covenants, and
obligations will not be affected by any investigation conducted
with respect to, or, except as set forth in the Disclosure Letter
or any supplement to the Disclosure Letter, any knowledge acquired
(or capable of being acquired) at any time, whether before or after
the execution and delivery of this Agreement or the Closing Date,
with respect to the accuracy or inaccuracy of or compliance with,
any such representation, warranty, covenant, or obligation.
11.2 Indemnification and Payment of Damages by Sellers.
Sellers severally, in the proportion to the amounts of money paid
by Purchaser to each of the Sellers in accordance with Section 1.3
and Section 1.4 of this Agreement, will indemnify and hold harmless
Purchaser, MHI, Texas Drydock and Subsidiary and their respective
officers, directors, stockholders, controlling persons, and
affiliates (collectively, the "Indemnified Persons") for, and will
pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage (including incidental and consequential damages),
expense (including costs of investigation and defense and
reasonable attorneys' fees), diminution of value, whether or not
involving a third-party claim, or environmental damages (including
costs of cleanup, containment, or other remediation) (collectively,
"Damages"), arising, directly or indirectly, from or in connection
with:
(a) any breach of any representation or warranty made by the
MHI Sellers, the Texas Drydock Seller or the Sellers in this
Agreement (after giving effect to the Disclosure Letter and any
supplement to the Disclosure Letter delivered to Purchaser prior to
the Closing), the Disclosure Letter, any supplement to the
Disclosure Letter, or any other certificate or document delivered
by any of the Sellers pursuant to this Agreement;
(b) any breach by any of the Sellers of any covenant or
obligation of such Seller in this Agreement;
(c) any product shipped or manufactured by, or any services
provided by, MHI, Texas Drydock or Subsidiary prior to the Closing
Date;
(d) federal, foreign, state, municipal and other taxes
assessed against or owing by MHI, Texas Drydock or Subsidiary for
any period, or a part of any period, prior to the Closing Date to
the extent not expressly set forth in the Disclosure Letter or not
reflected as a liability in the Unaudited Balance Sheet; provided,
however, any federal or state income tax (other than interest and
penalties) due to the disallowance of a deduction or the
acceleration of income on a federal or state income tax return of
Texas Drydock or Subsidiary for any period prior to the Closing
Date that, due to timing differences, will be allowed as a
deduction or an increase in basis of a depreciable asset (in the
case of a disallowed deduction) or will not be required to be
reported as income (in the case of acceleration of income) after
the Closing Date, will not be considered "Damages" as that term is
defined herein;
(e) any claim by any person for brokerage or finder's fees
or commissions or similar payments based upon any agreement or
understanding alleged to have been made by any such person with any
of the Sellers, MHI, Texas Drydock or Subsidiary (or any person
acting on their behalf) in connection with any of the transactions
contemplated by this Agreement;
(f) any environmental, health, and safety liability arising
out of or relating to: (i) (A) the ownership, operation, or
condition at any time on or prior to the Closing Date of the
facilities or any other properties and assets (whether real,
personal, or mixed and whether tangible or intangible) in which
MHI, Texas Drydock or Subsidiary has or had an interest, or (B) any
Hazardous Materials (as defined under existing environmental laws
or regulations) or other contaminants that were present on the
facilities or other properties and assets at any time on or prior
to the Closing Date; or (ii) (A) any Hazardous Materials or other
contaminants, wherever located, that were, or were allegedly,
generated, transported, stored, treated, released, or otherwise
handled by MHI, Texas Drydock or Subsidiary or by any other person
for whose conduct they are or may be held responsible at any time
on or prior to the Closing Date, or (B) any Hazardous Activities
(as defined under existing environmental laws or regulations) that
were, or were allegedly, conducted by MHI, Texas Drydock or
Subsidiary or by any other person for whose conduct they are or may
be held responsible; or
(g) any bodily injury (including illness, disability, and
death, and regardless of when any such bodily injury occurred, was
incurred, or manifested itself), personal injury, property damage
(including trespass, nuisance, wrongful eviction, and deprivation
of the use of real property), or other damage of or to any person,
including any employee or former employee of MHI, Texas Drydock or
Subsidiary or any other person for whose conduct they are or may be
held responsible, in any way arising from or allegedly arising from
any Hazardous Activity conducted or allegedly conducted with
respect to the facilities or the operation of MHI, Texas Drydock or
Subsidiary prior to the Closing Date, or from Hazardous Material
that was (i) present or suspected to be present on or before the
Closing Date on or at the facilities (or present or suspected to be
present on any other property, if such Hazardous Material emanated
or allegedly emanated from any of the facilities and was present or
suspected to be present on any of the facilities on or prior to the
Closing Date) or (ii) released or allegedly released by MHI, Texas
Drydock or Subsidiary or any other person for whose conduct they
are or may be held responsible, at any time on or prior to the
Closing Date.
In respect to any Damages for which any of the Indemnified
Persons may seek indemnification from Sellers under Section 11.2(f)
or Section 11.2(g), Purchaser will first attempt to recover any
such Damages from any third person who may have indemnified Texas
Drydock, and/or from any other person that may be responsible, for
any loss, cost or expense in respect to all or a part of such
Damages before Sellers shall pay any such Damages. Purchaser will
be entitled to control any cleanup, any related environmental
Proceeding, and, except as provided in the following sentence, any
other Proceeding with respect to which indemnity may be sought
under Section 11.2(f) or Section 11.2(g). The procedure described
in Section 11.6 will apply to any claim solely for monetary damages
relating to a matter covered by Section 11.2(f) or Section 11.2(g).
11.3 Indemnification and Payment of Damages by Purchaser.
Purchaser will indemnify and hold harmless Sellers, and will pay to
Sellers the amount of any damages arising, directly or indirectly,
from or in connection with:
(a) any breach of any representation or warranty made by
Purchaser in this Agreement;
(b) any breach by Purchaser of any covenant or obligation of
Purchaser in this Agreement; or
(c) any claim by any person for brokerage or finder's fees
or commissions or similar payments based upon any agreement or
understanding alleged to have been made by such person with
Purchaser (or any person acting on its behalf) in connection with
any of the transactions contemplated by this Agreement.
11.4 Time Limitations. If the Closing occurs, Sellers will
have no liability (for indemnification under Section 11.2 or
otherwise) with respect to any representation, warranty, covenant
or obligation of Sellers under this Agreement, unless on or before
three (3) years after the Closing Date, Purchaser notifies Sellers
of a claim specifying the factual basis of that claim in reasonable
detail to the extent then known by Purchaser. If the Closing
occurs, Purchaser will have no liability (for indemnification under
Section 11.3 or otherwise) with respect to any representation,
warranty, covenant or obligation of Purchaser under this Agreement,
unless on or before three (3) years after the Closing Date, Sellers
notify Purchaser of a claim specifying the factual basis of that
claim in reasonable detail to the extent then known by Sellers.
11.5 Limitations on Amount-Sellers. Notwithstanding anything
herein to the contrary, the term "Damages" shall not include any
amount paid by any third party insurance carrier to or on behalf of
any of the Indemnified Persons or reimbursed to any of the
Indemnified Persons. Further, Sellers shall have no liability (for
indemnification under Section 11.2 or otherwise) until the total
Damages of all Indemnified Persons exceeds Seven Hundred Thousand
Dollars ($700,000.00), and then only for the amount by which
Damages exceed Seven Hundred Thousand Dollars ($700,000.00) up to
a maximum total liability for all Sellers of Ten Million Dollars
($10,000,000.00). However, this Section 11.5 will not apply to any
breach of any of representations and warranties of the MHI Sellers,
the Texas Drydock Seller or the Sellers which any of the Sellers
knew to be untrue or false at the time such representation and
warranty was made or any intentional breach of any covenant or
obligation of any of the Sellers under this Agreement. Further,
this Section 11.5 shall not apply to any liability or obligation of
MHI that is not set forth in the Disclosure Letter or to the amount
of any such liability or obligation of MHI in excess of the amount
for such liability or obligation set forth in the Disclosure
Letter.
11.6 Procedure for Indemnification-Third Party Claims. (a)
Promptly after receipt by an indemnified party under Section 11.2
or Section 11.3 of notice of the commencement of any Proceeding
against it, such indemnified party will, if a claim is to be made
against an indemnifying party under such Section, give notice to
the indemnifying party of the commencement of such claim, but the
failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that the indemnifying party may
have to any indemnified party, except to the extent that the
indemnifying party demonstrates that the defense of such action is
prejudiced by the indemnifying party's failure to give such notice.
(b) If any Proceeding referred to in Section 11.6(a) is
brought against an indemnified party, the indemnifying party will
cooperate and assist in the defense of such Proceeding. An
indemnifying party may elect (unless (i) the indemnifying party is
also a party to such Proceeding and the indemnified party
determines in good faith that joint representation would be
inappropriate, (ii) the indemnifying party fails to provide
reasonable assurance to the indemnified party of the indemnifying
party's financial capacity to defend such Proceeding and provide
indemnification with respect to such Proceeding or (iii) the
indemnified party determines in good faith that there is a
reasonable probability that the Proceeding may adversely affect it
or its affiliates other than as a result of monetary damages for
which it would be entitled to indemnification under this Agreement)
to assume the defense of such Proceeding with counsel satisfactory
to the indemnified party, after notice in writing from the
indemnifying party to the indemnified party of the indemnifying
party's election to assume the defense of such Proceeding. If the
indemnifying party assumes the defense of a Proceeding, (i) it will
be conclusively established for purposes of this Agreement that the
claims made in that Proceeding are within the scope of and subject
to indemnification; (ii) no compromise or settlement of such claims
may be effected by the indemnifying party without the indemnified
party's consent unless (A) there is no finding or admission of any
violation of any applicable laws or any violation of the rights of
any person and no effect on any other claims that may be made
against the indemnified party, (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party,
and (C) the indemnified party will have no liability with respect
to any compromise or settlement of such claims effected without its
consent, which consent will not be unreasonably withheld. Unless
the indemnifying party assumes the defense, the indemnified party
will select counsel and conduct the defense. The indemnified party
may from time to time request that the indemnifying party pay or
reimburse any fees of counsel or any other out-of-pocket expenses
incurred by the indemnified party in connection with the defense of
such Proceeding, including reasonable out-of-pocket costs of
investigation, as such fees and expenses are incurred, upon the
agreement that the indemnified party will repay such amounts if it
shall ultimately be determined that the indemnified party is not
entitled to be indemnified by the indemnifying party hereunder.
Any request for such counsel fees or other out-of-pocket expenses
or costs delivered to the indemnifying party that is not paid
within thirty (30) days from the date of such request shall bear
interest at the prime rate of interest from time to time in effect
at Bank One Louisiana, National Association, in New Orleans,
Louisiana, from the date of such request. The indemnified party
shall have (unless the indemnifying party shall have assumed the
defense of such Proceeding) the exclusive right to defend,
compromise or settle such Proceeding. The indemnifying party will
be bound by any determination made in such Proceeding or any
compromise or settlement effected in good faith by the indemnified
party.
11.7 Procedure for Indemnification-Other Claims. A claim for
indemnification for any matter not involving a third-party claim
may be asserted by notice to the party from whom indemnification is
sought.
ARTICLE 12.
Purchaser's Option
12.1 Option to Purchase MHI Option Shares. If the Closing
occurs, the MHI Sellers hereby give and grant to Purchaser an
irrevocable option to purchase from the MHI Sellers the other
forty-nine percent (49%) of the issued and outstanding shares of
capital stock of MHI (such forty-nine percent (49%) of the issued
and outstanding shares of capital stock of MHI being hereinafter
referred to as the "MHI Option Shares") on the terms hereinafter
set forth in this Article 12.
s an Option to Purchase Texas Drydock Option Shares. If the
Closing occurs, the Texas Drydock Seller hereby gives and grants to
Purchaser an irrevocable option to purchase from the Texas Drydock
Seller the other forty-nine percent (49%) of the twenty percent
(20%) of the issued and outstanding shares of capital stock of
Texas Drydock (such forty-nine percent (49%) of the twenty percent
(20%) the issued and outstanding shares of capital stock of Texas
Drydock being hereinafter referred to as the "Texas Drydock Option
Shares") on the terms hereinafter set forth in this Article 12.
12.3 Purchase Option Exercise Price for MHI Option Shares.
The consideration to be paid by Purchaser upon the exercise of its
option to purchase the MHI Option Shares shall be eighty percent
(80%) of the Purchase Option Total Exercise Price (as hereinafter
defined).
12.4 Purchase Option Exercise Price for Texas Drydock Option
Shares. The consideration to be paid by Purchaser upon the
exercise of its option to purchase the Texas Drydock Option Shares
shall be twenty percent (20%) of the Purchase Option Total Exercise
Price.
12.5 Purchase Option Total Exercise Price. The total
consideration (the "Purchase Option Total Exercise Price") to be
paid by Purchaser upon exercise of the options granted to Purchaser
to purchase the MHI Option Shares and the Texas Drydock Option
Shares shall be an amount that is not less than Twenty Million Five
Hundred Eighty Thousand Dollars ($20,580,000.00) (the "Minimum
Price") nor more than Thirty Million Dollars ($30,000,000.00) (the
"Maximum Price"). The Minimum Price was determined by negotiation
between the parties on the premise that the estimated consolidated
income before taxes of Texas Drydock and Subsidiary for the twelve
month period ending March 31, 1999 is expected to be no more than
Eight Million Dollars ($8,000.000.00). If after reviewing
operating statements for prior periods the estimated consolidated
income before taxes of Texas Drydock and Subsidiary for the twelve
month period ending March 31, 1999 is reasonably expected by each
of the Purchaser and the Representative (as hereinafter defined) of
Sellers to exceed Eight Million Dollars ($8,000.000.00), then
Purchaser and the Representative, commencing as early as twelve
months after the Closing Date and in no event later than eighteen
months after the Closing Date shall attempt in good faith to
negotiate a mutually agreeable price (the "Negotiated Price"), not
exceeding the Maximum Price for the exercise of the options granted
to Purchaser to purchase the MHI Option Shares and the Texas
Drydock Option Shares, based upon the estimated consolidated income
before taxes of Texas Drydock and Subsidiary for the twelve month
period ending March 31, 1999 and expected future earnings. For
purposes of this Agreement, the term "Purchase Option Total
Exercise Price" shall mean (i) the Minimum Price, if the estimated
consolidated income before taxes of Texas Drydock and Subsidiary
for the twelve month period ending March 31, 1999 is reasonably
expected by each of the Purchaser and the Representative to be not
more than Eight Million Dollars ($8,000.000.00), or (ii) the
Negotiated Price, if the estimated consolidated income before taxes
of Texas Drydock and Subsidiary for the twelve month period ending
March 31, 1999 is reasonably expected by each of the Purchaser and
the Representative to exceed Eight Million Dollars ($8,000.000.00);
provided, however, that the Purchase Option Total Exercise Price
shall never exceed the Maximum Price and Purchaser shall always
have the unilateral right and option, in its sole discretion, to
make the Purchase Option Total Exercise Price be equal to the
Maximum Price.
12.6 Time of Exercise of Purchase Options. The options
granted to Purchaser to purchase the MHI Option Shares and the
Texas Drydock Option Shares must be exercised at the same time and
may not be separately exercised and shall be exercised, if at all,
no earlier than twelve (12) months after the Closing Date and no
later than twenty-four (24) months after the Closing Date. Time is
of the essence hereof.
12.7 Manner of Exercise of Purchase Options . The options
granted to Purchaser to purchase the MHI Option Shares and the
Texas Drydock Option Shares shall be exercised by a notice (the
"Notice of Exercise") in writing signed by the Purchaser and
mailed, by registered or certified mail, return receipt requested,
to each of the Sellers at their respective addresses as set forth
above, or at such other address as a Seller shall have specified by
a notice in writing to all other parties that specifically refers
to this Agreement, and to the Escrow Agent. The Notice of Exercise
shall specify a date for the closing (the "Purchase Option Closing
Date"), which date shall be a business day on which the offices of
the Escrow Agent are normally open for business and that is not
less than three (3) days nor more than ten (10) days after the date
that the Notice of Exercise is deposited in the United State mail.
12.8 Purchase Option Closing. If exercised by Purchaser, the
closing (the "Purchase Option Closing") of the options granted to
Purchaser to purchase the MHI Option Shares and the Texas Drydock
Option Shares shall take place at the offices of Escrow Agent at
10:00 a.m. (local time) on the Purchase Option Closing Date, or at
such other date, time and place as the parties may agree.
12.9 Deliveries at Purchase Option Closing. At the Purchase
Option Closing:
(a) The Purchaser will deliver to the Escrow Agent in
immediately available funds, or in such other form of consideration
as Purchaser and Sellers may agree upon, the amount of the Purchase
Option Total Exercise Price and a certificate signed by the
Chairman, President and Chief Executive Officer of Purchaser or a
Vice President of Purchaser stating an amount (the "Escrow Amount")
to be retained by the Escrow Agent. The Escrow Amount shall be a
sum (subject to Section 11.5 of this Agreement) estimated by
Purchaser to be necessary to satisfy all known claims then pending
or threatened, including the estimated legal and other out-of-
pocket expenses to defend such claims, of which Purchaser prior to
that time has given notice to Sellers requesting indemnification
and has not received payment or other satisfaction from Sellers,
plus One Million Dollars ($1,000,000.00). Purchaser shall make
such certificate available to Representative prior to delivery to
the Escrow Agent and, if requested by Representative, will meet
with Representative to discuss the appropriate Escrow Amount;
however, Purchaser shall control the ultimate decision as to the
appropriate Escrow Amount.
(b) The Escrow Agent will deliver to the Purchaser the
certificates representing the MHI Option Shares, duly endorsed (or
accompanied by duly executed stock powers), with signatures
guaranteed by a commercial bank or by a member firm of the New York
Stock Exchange, for transfer to Purchaser and the certificates
representing the Texas Drydock Option Shares, duly endorsed (or
accompanied by duly executed stock powers), with signatures
guaranteed by a commercial bank or by a member firm of the New York
Stock Exchange, for transfer to Purchaser, that have been deposited
with the Escrow Agent; and
(c) Except for the Escrow Amount which will be held by the
Escrow Agent as security for the payment of the indemnification
obligations of the respective Sellers under this Agreement, the
Escrow Agent will promptly disburse to the Texas Drydock Seller
twenty percent (20%) of the balance of the Purchase Option Total
Exercise Price and to the respective MHI Sellers, the remainder of
such balance in accordance with written instructions signed by each
of the MHI Sellers and delivered to the Escrow Agent at or before
the Purchase Option Closing.
ARTICLE 13.
Sellers' Put Option
13.1 Option to Put MHI Option Shares. If the Closing occurs,
the Purchaser hereby gives and grants to the MHI Sellers an
irrevocable option to cause Purchaser to purchase from the MHI
Sellers the MHI Option Shares on the terms hereinafter set forth in
this Article 13.
13.2 Option to Put Texas Drydock Option Shares. If the
Closing occurs, the Purchaser hereby gives and grants to the Texas
Drydock Seller an irrevocable option to cause Purchaser to purchase
from the Texas Drydock Seller the Texas Drydock Option Shares on
the terms hereinafter set forth in this Article 13.
13.3 Put Option Price for MHI Option Shares. If the MHI
Sellers exercise their option to cause Purchaser to purchase of the
MHI Option Shares, the consideration to be paid by Purchaser for
the MHI Option Shares shall be eighty percent (80%) of the Put
Option Total Price (as hereinafter defined).
13.4 Put Option Price for Texas Drydock Option Shares. If
the Texas Drydock Seller exercises his option to cause Purchaser to
purchase of the MHI Option Shares, the consideration to be paid by
Purchaser for the Texas Drydock Shares shall be twenty percent
(20%) of the Put Option Total Price.
13.5 Put Option Total Price. The total consideration (the
"Put Option Total Price") to be paid by Purchaser upon exercise by
the MHI Sellers and the Texas Drydock Seller of the options granted
to the MHI Sellers to cause Purchaser to purchase the MHI Option
Shares and to the Texas Drydock Seller to cause Purchaser to
purchase the Texas Drydock Option Shares shall be equal to Twenty
Million Five Hundred Eighty Thousand Dollars ($20,580,000.00).
13.6 Time of Exercise of Put Options. The options granted to
the MHI Sellers to cause Purchaser to purchase the MHI Option
Shares and to the Texas Drydock Seller to cause Purchaser to
purchase the Texas Drydock Option Shares must be exercised, if at
all, at the same time and may not be exercised separately and shall
be exercised no earlier than eighteen (18) months after the Closing
Date and no later than twenty-four (24) months after the Closing
Date. Time is of the essence hereof.
13.7 Manner of Exercise of Put Options. The options granted
to the MHI Sellers to cause Purchaser to purchase the MHI Option
Shares and to the Texas Drydock Seller to cause Purchaser to
purchase the Texas Drydock Option Shares shall be exercised by a
notice (the "Notice of Put") in writing signed by each of the
Sellers, or by the Representative of Sellers purporting to act on
behalf of each of the Sellers, and mailed by registered or
certified mail, return receipt requested, to the Purchaser at its
address as set forth above, or at such other address as Purchaser
shall have specified by a notice in writing to all other parties
that specifically refers to this Agreement, and to the Escrow
Agent.
13.8 Notice of Put Option Closing. After its receipt of the
Notice of Put, the Purchaser shall have up to fourteen days within
which to give notice (the "Notice of Put Option Closing") in
writing signed by the Purchaser and mailed, by registered or
certified mail, return receipt requested, to each of the Sellers
and the Escrow Agent that specifies a date for the closing (the
"Put Option Closing Date") of its purchase of the MHI Option Shares
and the Texas Drydock Option Shares, which date shall be a business
day on which the offices of the Escrow Agent are normally open for
business and that is not less than three (3) days nor more than ten
(10) days after the date that the Notice of Put Option Closing is
deposited in the United State mail. In the case of any failure of
the Purchaser to give within the specified time the Notice of Put
Option Closing to the Purchasers and the Escrow Agent, the Put
Option Closing Date will be automatically fixed as the fourteenth
day following the date of the Notice of Put, unless such day is a
Saturday, Sunday or legal holiday on which the Escrow Agent is not
open for business and in such event, the Closing Date will be the
next succeeding business day on which the Escrow Agent is normally
open for business.
13.9 Put Option Closing. The closing (the "Put Option
Closing") of the options granted to the MHI Sellers to cause
Purchaser to purchase the MHI Option Shares and to the Texas
Drydock Seller to cause Purchaser to purchase the Texas Drydock
Option Shares shall take place at the offices of Escrow Agent at
10:00 a.m. (local time) on the Put Option Closing Date, or at such
other date, time and place as the parties may agree.
13.10 Deliveries at Put Option Closing. At the Put Option
Closing:
(a) The Purchaser will deliver to the Escrow Agent in
immediately available funds, or in such other form of consideration
as Purchaser and Sellers may agree upon, the amount of the Put
Option Total Price and a certificate signed by the Chairman,
President and Chief Executive Officer of Purchaser or a Vice
President of Purchaser stating the "Escrow Amount", as defined in
Section 12.9(a) of this Agreement, to be retained by the Escrow
Agent.
(b) The Escrow Agent will deliver to the Purchaser the
certificates representing the MHI Option Shares, duly endorsed (or
accompanied by duly executed stock powers), with signatures
guaranteed by a commercial bank or by a member firm of the New York
Stock Exchange, for transfer to Purchaser and the certificates
representing the Texas Drydock Option Shares, duly endorsed (or
accompanied by duly executed stock powers), with signatures
guaranteed by a commercial bank or by a member firm of the New York
Stock Exchange, for transfer to Purchaser, that have been deposited
with the Escrow Agent; and
(c) Except for the Escrow Amount which will be held by the
Escrow Agent as security for the payment of the indemnification
obligations of the respective Sellers under this Agreement, the
Escrow Agent will promptly disburse to the Texas Drydock Sellers
twenty percent (20%) of the balance of the Put Option Total Price
and to the respective MHI Sellers, the remainder of such balance in
accordance with written instructions signed by each of the Sellers
and delivered to the Escrow Agent at or before the Put Option
Closing.
ARTICLE 14.
Escrow
14.1 Escrow Agreement. (a) If Closing occurs, Sellers,
Purchaser and Bank One Louisiana, National Association, at New
Orleans, a national banking association, or other national bank
mutually selected by Sellers and Purchaser (the "Escrow Agent"),
shall enter into the Escrow Agreement at the time of Closing.
14.2 Duties of Escrow Agent. The Escrow Agent shall have
only those duties and responsibilities as are set forth in the
Escrow Agreement.
ARTICLE 15.
Sellers' Representative.
15.1 Appointment of Representative. The Sellers hereby
irrevocably appoint Weller to act as the representative (the
"Representative") of the Sellers in all matters that after the
Closing may arise under or pertain to this Agreement or the Escrow
Agreement and in any way affecting any of the Sellers, including
without limitation, all matters relating to indemnification arising
under this Agreement, the determination of a Negotiated Price under
Article 12 of this Agreement and the exercise of the options to
cause Purchaser to purchase the MHI Option Shares and the Texas
Drydock Option Shares under Article 13 of this Agreement. In the
event of the death, incapacity, removal or resignation of Weller,
a successor Representative shall be appointed by Sellers or their
successors in interest.
15.2 Additional Powers of the Representative. The
Representative also shall be fully authorized to take any action
(or to determine to take no action) with respect to all
indemnification claims and all notices and communications relating
to indemnification claims as the Representative may deem appropri-
ate, including, without limitation, the institution or defense of
litigation on behalf of the Sellers and the settlement or
compromise of any dispute or controversy.
15.3 Fees and Expenses of Representative. Any out-of-pocket
fees or expenses incurred by the Representative shall be borne by
the Sellers, or reimbursed to the Representative by the Sellers, in
the proportion to their respective interests in the escrow.
15.4 Liability of Representative. The Representative shall
not have any liability or obligation for anything the
Representative may do or refrain from doing in connection with the
rights, obligations or duties of the Representative under this
Agreement or the Escrow Agreement, except as a result of gross
negligence, willful misconduct or bad faith on the part of the
Representative.
ARTICLE 16.
General Provisions
16.1 Expenses. Except as otherwise expressly provided in
this Agreement, each party to this Agreement will bear its
respective expenses incurred in connection with the preparation,
execution, and performance of this Agreement and the transactions
contemplated by this Agreement, including all fees and expenses of
agents, representatives, counsel, and accountants. Purchaser will
pay the HSR Act filing fee. Sellers will cause MHI, Texas Drydock
and Subsidiary not to incur any out-of-pocket expenses in
connection with this Agreement. In the event of termination of
this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from
a breach of this Agreement by another party.
16.2 Public Announcements. Any public announcement or
similar publicity with respect to this Agreement or the
transactions contemplated by this Agreement will be issued, if at
all, at such time and in such manner as Purchaser determines.
Unless consented to by Purchaser in advance or required by
applicable law, prior to the Closing Sellers shall, and shall cause
MHI, Texas Drydock and Subsidiary to, keep this Agreement strictly
confidential and may not make any disclosure of this Agreement to
any person. Sellers and Purchaser will consult with each other
concerning the means by which the employees, customers, and
suppliers and others having dealings with MHI, Texas Drydock or
Subsidiary will be informed of the transactions contemplated by
this Agreement, and Purchaser will have the right to be present for
any such communication.
16.3 Confidentiality. Between the date of this Agreement and
the Closing Date, Purchaser and Sellers will maintain in
confidence, and will cause the directors, officers, employees,
agents, and advisors of Purchaser and MHI, Texas Drydock and
Subsidiary to maintain in confidence, any written, oral, or other
information obtained in confidence from another party or MHI, Texas
Drydock or Subsidiary in connection with this Agreement or the
transactions contemplated by this Agreement, unless (a) such
information is already known to such party or to others not bound
by a duty of confidentiality or such information becomes publicly
available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or
obtaining any consent or approval required for the consummation of
the transactions contemplated by this Agreement, or (c) the
furnishing or use of such information is necessary or appropriate
in connection with legal proceedings.
If the transactions contemplated by this agreement are not
consummated, each party will return or destroy as much of such
written information as the other party may reasonably request.
16.4 Preparation of Certain Tax Returns. Sellers and
Purchasers agree to cause KPMG Peat Marwick LLP to prepare, on or
before the due dates as extended, proper federal income tax returns
for MHI and its affiliated group (as defined in Internal Revenue
Code Section 1504(a)) for the fiscal year ended September 30, 1996
and for the fiscal year ending September 30, 1997. With respect to
the federal income tax return for the fiscal year ended September
30, 1996, Sellers shall make, and with respect to the federal
income tax return for the fiscal year ending September 30, 1997,
Sellers and Purchaser shall cooperate with each other in jointly
making (with the idea being that Purchaser will accede to the
wishes of Sellers if MHI, Texas Drydock or Subsidiary will not be
adversely affected) any elections or decisions to be made in
connection with the preparation and filing of such returns so long
as any such election or decision does not violate any applicable
law.
16.5 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (b) sent
by telecopier, provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the addressee, if
sent by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses set forth in
the first paragraph of this Agreement (or to such other addresses
as a party may designate by notice to the other parties).
Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement may be brought
against any of the parties in the courts of the State of Delaware,
County of New Castle, or, if it has or can acquire jurisdiction, in
the United States District Court for the District of Delaware, and
each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process
in any action or proceeding referred to in the preceding sentence
may be served on any party anywhere in the world.
16.6 Further Assurances. The parties agree (a) to furnish
upon request to each other such further information, (b) to execute
and deliver to each other such other documents, and (c) to do such
other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
16.7 Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure
nor any delay by any party in exercising any right, power, or
privilege under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of
such right, power, or privilege or the exercise of any other right,
power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the
documents referred to in this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no
waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to
or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this
Agreement.
16.8 Entire Agreement and Modification. This Agreement
supersedes all prior agreements between the parties with respect to
its subject matter and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement
of the terms of the agreement between the parties with respect to
its subject matter. This Agreement may not be amended except by a
written agreement executed by all parties to this Agreement.
16.9 Disclosure Letter. (a) The disclosures in the
Disclosure Letter, and those in any supplement thereto, shall
expressly refer to a Section of this Agreement and shall be deemed
to refer only to the representation or warranty in that particular
Section of this Agreement; however, disclosures in the Disclosure
Letter expressly referring to a Section of this Agreement may
incorporate by reference the disclosures in the Disclosure Letter
with respect to any other Section of this Agreement.
(b) In the event of any inconsistency between the statements
in the body of this Agreement and those in the Disclosure Letter
(other than an exception expressly set forth as such in the
Disclosure Letter with respect to a specifically identified
representation or warranty), the statements in the body of this
Agreement will control.
16.10 Assignments, Successors, and No Third-Party Rights. No
party may assign any of its or his rights under this Agreement
without the prior consent of the other parties, except that
Purchaser may assign any of its rights under this Agreement to any
wholly owned subsidiary of Purchaser. Subject to the preceding
sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted
assigns of the parties. Nothing expressed or referred to in this
Agreement will be construed to give any person other than the
parties to this Agreement any legal or equitable right, remedy, or
claim under or with respect to this Agreement or any provision of
this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to
this Agreement and their successors and assigns.
16.11 Severability. If any provision of this Agreement is
held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in full
force and effect to the extent not held invalid or unenforceable.
16.12 Section Headings; Construction. The headings of the
Articles and Sections in this Agreement are provided for
convenience only and will not affect its construction or
interpretation. All references to "Section" or "Sections" refer to
the corresponding Section or Sections of this Agreement. All words
used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words
or terms.
16.13 Time of Essence. With regard to all dates and time
periods set forth or referred to in this Agreement, time is of the
essence.
16.14 Governing Law. This Agreement will be governed by the
laws of the State of Delaware without regard to conflicts of laws
principles.
16.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together, will
be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date first written above.
MHI SELLERS: PURCHASER:
/s/ Thomas C. Weller, Jr. HALTER MARINE, INC.
______________________________
THOMAS C. WELLER, JR. /s/ John Dane, III
By: __________________________
/s/ Ronald J. Stevens John Dane, III
______________________________ Chairman, President and
RONALD J. STEVENS Chief Executive Officer
/s/ Rick S. Rees
______________________________
RICK S. REES
TEXAS DRYDOCK SELLER:
/s/ Don O. Covington
______________________________
DON O. COVINGTON
<PAGE>
EXHIBIT 99.3
<PAGE>
AMENDMENT NO. 1 TO
STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of this
4th day of April , 1997, amends the STOCK PURCHASE
AGREEMENT (the "Agreement") executed as of the 14th day of
February, 1997, by and among THOMAS C. WELLER, JR., RONALD J.
STEVENS, RICK S. REES, DON O. COVINGTON and HALTER MARINE, INC.
1.
Capitalized terms used in this Amendment shall have the same
meanings as set forth in the Agreement, unless otherwise
specifically defined herein or the context shall clearly indicate
otherwise.
2.
This Amendment incorporates and supersedes the amendments to
the Agreement contained in the letter agreement of Sellers to
Purchaser dated February 19, 1997 requesting an extension of time
for the delivery of the Unaudited Financial Statements and the
letter agreement of Purchaser to Sellers dated March 19, 1997
requesting an extension of time to review the Disclosure Letter.
3.
Section 1.3 of the Agreement is amended to correctly state the
respective percentages that should have been set forth opposite the
name of each of the MHI Sellers, as follows:
Weller Fifty-eight and 61/1000ths percent (58.061%)
Stevens Twenty-three and 778/1000ths percent (23.778%)
Rees Eighteen and 161/1000ths percent (18.161%)
4.
Section 1.6(c)(vi) of the Agreement is amended to provide that
the opinion of Jones, Walker, Waechter, Poitevent, Carrere and
Denegre, L.L.P., counsel to Sellers, dated the Closing Date, to
shall be substantially in the form of Exhibit 1.6(c)(vi) attached
to this Amendment.
5.
Section 1.6(d)(v) of the Agreement is amended to provide that
the opinion of Joe French & Associates, P.C., counsel to Purchaser,
dated the Closing Date, shall be substantially in the form of
Exhibit 1.6(d)(v) attached to this Amendment.
6.
Section 2.2 of the Agreement is amended so that the first
sentence thereof shall read: "At Closing, the authorized capital
stock of MHI will consist of one hundred thousand six hundred
twenty-five (100,625) shares of Common Stock, par value $1.00 per
share, of which one hundred thousand (100,000) shares will be
issued and outstanding."
7.
Section 5.1 of the Agreement is amended to substitute "Nevada"
for "Delaware" so that Purchaser represents that it is a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Nevada.
8.
Section 6.8 and Section 7.3 of the Agreement are hereby
deleted in their entirety. Purchaser acknowledges receipt and
acceptance of the Unaudited Financial Statements required by
Section 4.9 of the Agreement.
9.
Section 6.9 and Section 7.4 of the Agreement are hereby
deleted in their entirety. Purchaser acknowledges receipt and
acceptance of the Disclosure Letter and the matters specifically
disclosed therein.
10.
Subsections (a) and (b) of Section 10.1 of the Agreement are
hereby deleted in their entirety. Purchaser and Sellers agree that
Purchaser neither rejected nor is deemed to have rejected either
the Unaudited Financial Statements or the Disclosure Letter.
11.
Section 11.2 of the Agreement is hereby amended to add new
Subsections (h) and (i) that shall read as set forth below so that
Sellers also agree to indemnify with respect to the following:
"(h) Any loss, claim, liability, cost or
expense, or failure to adequately fund, any of the
pension plans disclosed in Exhibit 7 of the Disclosure
Letter relating to or for any period prior to Closing, to
the extent that the aggregate amount of all such losses,
claims, liabilities, costs and expenses exceeds the
allowance or reserve, if any, or liability for the same
reflected in the Unaudited Financial Statements.
(i) Any loss, liability. cost or expense relating
to, or adverse judgment rendered against Texas Drydock or
MHI in, any of the legal proceedings disclosed in Exhibit
8 of the Disclosure Letter (other than Andrew Ryan v.
Texas Drydock, Inc.) to the extent that the aggregate
amount of all such losses, liabilities, costs, expenses
and, to the extent not otherwise included as a loss,
liability, cost or expense, adverse judgements exceeds
the allowance or reserve, if any, or liability for the
same reflected in the Unaudited Financial Statements."
Section 11.2 of the Agreement is also amended so that the
first sentence of the last paragraph of Section 11.1 shall read:
"In respect to any Damages for which any of the
Indemnified Persons may seek indemnification from Sellers
under Section 11.2(f), Section 11.2(g), Section 11.2(h)
or Section 11.2(i), Purchaser will first attempt to
recover any such Damages from any third person who may
have indemnified Texas Drydock, and/or from any other
person that may be responsible, for any loss, cost or
expense in respect to all or a part of such Damages
before Sellers shall pay any such Damages."
12.
The Agreement is hereby amended to add a new Article 17
that shall read as follows:
"ARTICLE 17
Post Closing Matters
17.1 Meeting of Stockholders of MHI. Promptly
after the Closing, a meeting of the stockholders of MHI
shall be held (or a unanimous written consent in lieu of
a meeting of the stockholders shall be executed) at which
it is agreed that the following actions shall be taken:
(a) Section 2 of Article II of the Bylaws of
MHI shall be amended to delete the language "at
the corporation's offices in Montrose, Alabama"
and, at the end of the first sentence of Section
2, to change the period to a comma and to add the
words: "or at such other time and date as the
Board of Directors may determine."
(b) Section 1 of Article III of the Bylaws of
MHI shall be amended to fix the number of
directors at six (6).
(c) John Dane, III, K. W. Lewis and Dan
Mortimer shall be elected directors of MHI to fill
the vacancies created by the increase in the
number of directors, each to serve until the next
Annual Meeting of Stockholders or until death,
resignation or removal.
17.2 Meeting of the Board of Directors of MHI.
Promptly after the Closing, a meeting of the Board of
Directors of MHI shall be held (or a unanimous written
consent in lieu of a meeting of the directors shall be
executed) at which it is agreed that the following
actions shall be taken:
(a) Each of the existing officers of MHI who have
not previously resigned shall be removed and the
following persons shall be elected to the office or
offices set forth opposite their respective names:
John Dane, III Chairman of the Board,
President and Chief
Executive Officer
T. C. Weller, Jr. Vice President
R. S. Rees Vice President
R. J. Stevens Vice President
Keith Voights Vice President, Treasurer
and Assistant Secretary
J. J. French, Jr. Secretary
17.3 Meeting of Stockholders of Texas Drydock.
Promptly after the Closing, a meeting of the stockholders
of Texas Drydock shall be held (or a unanimous written
consent in lieu of a meeting of the stockholders shall be
executed) at which it is agreed that the following
actions shall be taken:
(a) Section 1 of Article III of the Bylaws of
Texas Drydock shall be amended to fix the number
of directors at seven (7).
(b) John Dane, III, K. W. Lewis and Dan
Mortimer shall be elected directors of Texas
Drydock to fill the vacancies created by the
increase in the number of directors, each to serve
until the next Annual Meeting of Stockholders or
until death, resignation or removal.
17.2 Meeting of the Board of Directors of Texas
Drydock. Promptly after the Closing, a meeting of the
Board of Directors of Texas Drydock shall be held (or a
unanimous written consent in lieu of a meeting of the
directors shall be executed) at which it is agreed that
the following actions shall be taken:
(a) Each of the existing officers of Texas
Drydock who have not previously resigned shall be
removed and the following persons shall be elected
to the office or offices set forth opposite their
respective names:
Dan Mortimer Chairman of the Board
Don O. Covington President and Chief
Executive Officer
Robert W. Fogal Vice President
T. C. Weller, Jr. Vice President
R. J. Stevens Vice President
R. S. Rees Vice President
Keith Voights Vice President, Treasurer
and Assistant Secretary
J. J. French, Jr. Secretary
Kay Thames Assistant Secretary
17.5 Meeting of Stockholders of TDI
International, Ltd. Promptly after the Closing, a
meeting of the stockholders of TDI International, Ltd.
shall be held (or a unanimous written consent in lieu of
a meeting of the stockholders shall be executed) at which
it is agreed that the following actions shall be taken:
(a) The number of directors of TDI
International, Ltd. shall be increased to four
(4).
(b) John Dane, III and Dan Mortimer shall be
elected directors of TDI International, Ltd. to
fill the vacancies created by the increase in the
number of directors, each to serve until the next
Annual Meeting of Stockholders or until death,
resignation or removal.
17.6 Meeting of the Board of Directors of TDI
International, Ltd. Promptly after the Closing, a
meeting of the Board of Directors of TDI International,
Ltd. shall be held (or a unanimous written consent in
lieu of a meeting of the directors shall be executed) at
which it is agreed that the following actions shall be
taken:
(a) Each of the existing officers of TDI
International, Ltd. who have not previously
resigned shall be removed and the following
persons shall be elected to the office or offices
set forth opposite their respective names:
John Dane, III Chairman of the Board
Don O. Covington President
Robert W. Fogal Vice President
Keith Voights Vice President, Treasurer
and Assistant Secretary
J. J. French, Jr. Secretary
Kay Thames Assistant Secretary
Caldonian Bank &
Trust Company Assistant Secretary
(b) John Dane, III shall be appointed by TDI
International, Ltd. to replace Thomas C. Weller,
Jr. as one of the three members appointed by TDI
International, Ltd. to serve on the Board of
Directors of the joint venture established under
the Joint Venture Agreement between Abdulla Ahmed
Nass Contracting Company, W.L.L. and TDI
International, Ltd."
13.
Exhibit 1.6(c)(ii) attached to this Admendment, which has been
revised to incorporate the comments and suggestions of the Escrow
Agent, is substituted in its entirety in lieu of Exhibit 1.6(c)(ii)
attached to the Agreement.
14.
The parties by their execution hereof reaffirm their intention
to be bound by the terms, provisions and conditions of the
Agreement, as amended by this Amendment.
IN WITNESS WHEREOF, the parties have executed and delivered
this Amendment as of the date first written above.
SELLERS:
/s/ Thomas C. Weller, Jr.
______________________________
THOMAS C. WELLER, JR.
/s/ Ronald J. Stevens
______________________________
RONALD J. STEVENS
/s/ Rick S. Rees
______________________________
RICK S. REES
/s/ Don O. Covington
______________________________
DON O. COVINGTON
PURCHASER:
HALTER MARINE, INC.
/s/ John Dane, III
By: __________________________
John Dane, III
Chairman, President and
Chief Executive Officer
<PAGE>
EXHIBIT 99.4
<PAGE>
ESCROW AGREEMENT
AMONG
HALTER MARINE, INC.
THOMAS C. WELLER, JR.
RONALD J. STEVENS
RICK S. REES
DON O. COVINGTON
AND
BANK ONE, LOUISIANA,
NATIONAL ASSOCIATION
<PAGE>
1. Definitions and Appointment of Escrow Agent . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . 2
1.2 Appointment and Acceptance of Escrow Agent. . . 2
2. Escrow Account. . . . . . . . . . . . . . . . . . . . . . 3
2.1 Deposit of Option Shares. . . . . . . . . . . . 3
2.2 Exercise of Purchase Option or Put Option . . . 4
2.3 Investment of Escrow Amount . . . . . . . . . . 6
2.4 Reports of Escrow Agent . . . . . . . . . . . . 7
3. Delivery of Documents . . . . . . . . . . . . . . . . . . 7
3.1 Notice of Claims for Indemnification. . . . . . 7
3.2 Payment of Indemnification Claims . . . . . . . 7
4. Payment from the Escrow Account . . . . . . . . . . . . . 9
5. Distributions to Sellers from the Escrow Agent. . . . . . 9
5.1 Third Anniversary Distribution. . . . . . . . . 9
5.2 Final Distribution. . . . . . . . . . . . . . 10
5.3 Manner of Seller Distributions. . . . . . . . 10
6. Beneficial Ownership of MHI and Texas Drydock Stock . . 11
6.1 Exercise of Voting Rights . . . . . . . . . . 11
6.2 Dividends . . . . . . . . . . . . . . . . . . 11
6.3 Tax Reporting. . . . . . . . . . . . . . . . 12
7. Obligations of Escrow Agent . . . . . . . . . . . . . . 12
8. Compensation of Escrow Agent. . . . . . . . . . . . . . 14
9. Indemnification of Escrow Agent . . . . . . . . . . . . 15
10. Reliance on Documents . . . . . . . . . . . . . . . . . 16
11. Certain Transactions. . . . . . . . . . . . . . . . . . 17
12. Resignation or Removal of Escrow Agent. . . . . . . . . 17
13. Duties and Obligations of Representative. . . . . . . . 18
14. Notices . . . . . . . . . . . . . . . . . . . . . . . . 19
15. Successors. . . . . . . . . . . . . . . . . . . . . . . 20
16. Governing Law . . . . . . . . . . . . . . . . . . . . . 20
17. Counterparts. . . . . . . . . . . . . . . . . . . . . . 16
18. Entire Understanding. . . . . . . . . . . . . . . . . . 20
19. Headings. . . . . . . . . . . . . . . . . . . . . . . . 20
20. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . 21
21. Further Assurances. . . . . . . . . . . . . . . . . . . 23<PAGE>
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into this 4th day of
April , 1997, by and among THOMAS C. WELLER, JR., RONALD J.
STEVENS, and RICK S. REES, the shareholders of MARITIME HOLDINGS,
INC. ("MHI"), sometimes referred to herein as the "MHI Sellers",
and DON O. COVINGTON, a shareholder of TEXAS DRYDOCK, INC. ("Texas
Drydock"), sometimes referred to as "Covington", (all such
individuals being sometimes collectively referred to herein as the
"Sellers"), HALTER MARINE, INC., a Nevada corporation
("Purchaser"), and BANK ONE, LOUISIANA, NATIONAL ASSOCIATION, at
New Orleans, Louisiana, a national banking association ("Escrow
Agent"), with reference to the following:
WITNESSETH:
WHEREAS, Purchaser and Sellers have entered into a Stock
Purchase Agreement, dated as of February 14, 1997 (the "Stock
Purchase Agreement"), a copy of which is attached hereto as Exhibit
A, pursuant to which Purchaser simultaneously is acquiring fifty-
one percent (51%) of the issued and outstanding stock of MHI and
fifty-one percent (51%) of the twenty percent (20%) of the issued
and outstanding stock of Texas Drydock and is to have an option to
purchase the remaining forty-nine percent (49%) of the issued and
outstanding stock of MHI and the other forty-nine percent (49%) of
the twenty percent (20%) of the issued and outstanding stock of
Texas Drydock; and
WHEREAS, Purchaser and Sellers desire that the Escrow Agent
receive, hold, manage and dispose of the Escrow Account (as defined
herein) in accordance with the terms, conditions and provisions of
this Agreement, and the Escrow Agent is willing to do so; and
WHEREAS, Thomas C. Weller, Jr. has been designated to act as
the representative of the Sellers pursuant to the Stock Purchase
Agreement (in which capacity he is herein referred to as the
"Representative"); and
NOW, THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
1. Definitions and Appointment of Escrow Agent.
1.1 Definitions. For purposes of this Escrow Agreement,
all terms not otherwise specifically defined herein, which are
defined in the Stock Purchase Agreement, shall have the respective
meanings therein stated.
1.2 Appointment and Acceptance of Escrow Agent. Bank
One, Louisiana, National Association, is hereby appointed and
hereby accepts appointment as the Escrow Agent hereunder and agrees
to hold in trust for the purposes herein and for no other purpose
the assets delivered hereunder,(the "Escrow Account"), subject to
the terms and conditions hereof.
2. Escrow Account.
2.1 Deposit of Option Shares. Pursuant to and in
accordance with the terms of the Stock Purchase Agreement, the MHI
Sellers have agreed to, and do hereby, deposit into escrow their
stock certificates evidencing their ownership of the MHI Option
Shares, duly endorsed (or accompanied by duly executed stock
powers) with signatures guaranteed by a commercial bank or by a
member firm of the New York Stock Exchange, for transfer to
Purchaser, and the Texas Drydock Seller has agreed to, and does
hereby, deposit into escrow his stock certificates evidencing his
ownership of the Texas Drydock Option Shares, duly endorsed (or
accompanied by duly executed stock powers) with signatures
guaranteed by a commercial bank or by a member firm of the New York
Stock Exchange, for transfer to Purchaser (the "Escrow Account").
The MHI Sellers hereby pledge their MHI Option Shares and the Texas
Drydock Seller hereby pledges his Texas Drydock Option Shares, and
grant to Purchaser a security interest therein, in order to secure
the respective obligations of Sellers under the Stock Purchase
Agreement. The registration of such certificates shall not be
changed unless and until the Escrow Agent has received in
immediately available funds either (a) the amount of the Purchase
Option Total Exercise Price in accordance with Article 12 of the
Stock Purchase Agreement or (b) the amount of the Put Option Total
Price in accordance with Article 13 of the Stock Purchase
Agreement. In the event that there has been no exercise of either
(i) the options granted to the Purchaser under Article 12 of the
Stock Purchase Agreement or (ii) the options granted to Sellers
under Article 13, on or before the expiration of twenty-four months
after the Date of this Agreement, then promptly after the
expiration of such period of time, the Escrow Agent shall return
such certificates to the registered holders thereof (and the duly
executed stock powers, if any) and, subject to the payment of all
fees then due to the Escrow Agent by Purchaser and Sellers in
accordance with Section 8 hereof, this Escrow Agreement shall
terminate.
2.2 Exercise of Purchase Option or Put Option. In the
event of (i) the exercise by Purchaser of the options granted to
Purchaser to purchase the MHI Option Shares and the Texas Drydock
Option Shares under Article 12 of the Stock Purchase Agreement or
(ii) the exercise by Sellers of the options granted to Sellers to
cause Purchaser to purchase the MHI Option Shares and the Texas
Drydock Option Shares under Article 13 of the Stock Purchase
Agreement:
(a) The Purchaser will deliver to the Escrow Agent the
amount of the Purchase Option Total Exercise Price or the Put
Option Total Price, as appropriate, and a certificate signed
by the Chairman, President and Chief Executive Officer of
Purchaser or a Vice President of Purchaser stating the Escrow
Amount;
(b) The Escrow Agent will deliver to the Purchaser the
certificates representing the MHI Option Shares, duly endorsed
(or accompanied by duly executed stock powers), with
signatures guaranteed by a commercial bank or by a member firm
of the New York Stock Exchange, for transfer to Purchaser and
the certificates representing the Texas Drydock Option Shares,
duly endorsed (or accompanied by duly executed stock powers),
with signatures guaranteed by a commercial bank or by a member
firm of the New York Stock Exchange, for transfer to
Purchaser; and
(c) Except for the Escrow Amount which will be held by
the Escrow Agent as security for the payment of the
indemnification obligations of the respective Sellers under
the Stock Purchase Agreement, the Escrow Agent will promptly
disburse to Covington twenty (20%) of the balance of such
Purchase Option Total Exercise Price or the Put Option Total
Price, as appropriate, and the remainder of such balance to
the MHI Sellers in accordance with the written instructions
signed by each of the MHI Sellers and delivered to the Escrow
Agent.
2.3 Investment of Escrow Amount. If either of the
options provided for in Articles 12 or 13 of the Stock Purchase
Agreement are exercised, the Escrow Amount shall be invested from
time to time by the Escrow Agent, to the extent possible, in United
States Treasury Bills having a remaining maturity of 90 days or
less and repurchase obligations secured by the United States
Treasury Bills, with the remainder being deposited and maintained
in a money market fund of the Escrow Agent, unless otherwise
directed in writing by Representative and Purchaser jointly from
time to time. Any earnings on the Escrow Amount shall be for the
account of the Sellers. The Escrow Agent is authorized to
liquidate in accordance with its customary procedures any portion
of the Escrow Account to provide for payments to be made under this
Agreement.
2.4 Reports of Escrow Agent. Escrow Agent shall provide
each of the parties hereto with a quarterly accounting of the
Escrow Account.
3. Delivery of Documents. The parties to this Escrow
Agreement shall deliver certain documents as follows:
3.1 Notice of Claims for Indemnification. If Purchaser
believes that it is entitled to indemnification under Article 11 of
the Stock Purchase Agreement, Purchaser shall deliver, or cause to
be delivered, a written notice of an indemnification claim (the
"Indemnification Claim") to the Representative with a copy to the
Escrow Agent.
3.2 Payment of Indemnification Claims. At any time after
any Damages (as defined in the Stock Purchase Agreement) shall
become a liquidated amount, the Purchaser may submit to the Escrow
Agent and the Representative a notice ("Payment Notice") setting
forth the amount of the Damages and request the payment thereof
from the Escrow Account. Upon receipt of such Payment Notice, the
Representative shall, within ten (10) days after receipt of the
Payment Notice, notify the Purchaser and the Escrow Agent in
writing if the Representative objects to the payment from the
Escrow Account of the amount set forth in the Payment Notice.
Failure of the Representative to notify the Purchaser and the
Escrow Agent within said ten (10) days that the Representative
objects to the payment of such amount will be deemed to constitute
an authorization for the Escrow Agent to pay to the Purchaser the
amount set forth in the Payment Notice. If Representative gives
notice to the Purchaser and Escrow Agent within said ten (10) day
period that the Representative objects to payment of that amount
specified in the Payment Notice, the same shall not be paid from
the Escrow Account, until either (i) the Escrow Agent shall have
received joint instructions from the Purchaser and the
Representative with respect to such Payment Notice or (ii) a final
nonappealable order of a court of competent jurisdiction or other
tribunal has been entered with respect to the amount set forth in
the Payment Notice. If the Representative objects to only a
portion of the amount set forth in a Payment Notice or a particular
item therein, then the Escrow Agent shall pay from the Escrow
Account in the manner described in Section 4 hereof that portion as
to which the Representative has no objection. Nothing herein shall
prevent the Purchaser from reducing the amount of, deleting certain
items and/or amounts from, or withdrawing a Payment Notice, without
prejudice to resubmitting the same in a subsequent Payment Notice.
The Purchaser shall notify the Escrow Agent and the Representative
in writing of any such reduction, deletion or withdrawal. Any
amount in a Payment Notice timely objected to by Representative, if
ultimately paid to Purchaser, shall bear interest at the prime rate
of interest from time to time in effect at Bank One, Louisiana,
National Association, in New Orleans, Louisiana, from the date of
the Payment Notice to the date of payment.
4. Payment from the Escrow Account. As soon as practicable
after receipt of a Payment Notice unless the Representative has
given written notice of objection to the payment thereof within the
time specified above, the Escrow Agent shall pay the amount in such
Payment Notice to Purchaser or its designee(s).
5. Distributions to Sellers from the Escrow Agent. Other
than as provided for herein distributions to the Sellers shall be
made from the Escrow Account as follows:
5.1 Third Anniversary Distribution. On that date which
is three years after the Closing (the "Third Anniversary"), the
Escrow Agent shall distribute to the Sellers all assets remaining
in the Escrow Account less only assets having a then fair market
value equal to the amount set forth in a certificate signed by the
President or any Vice President of the Purchaser and delivered to
the Escrow Agent and the Representative at or near the time of the
Third Anniversary, setting forth (i) the aggregate dollar amount of
all Payment Notices (including the disputed portions thereof) that
have been delivered to the Escrow Agent and Representative prior to
the Third Anniversary and that have not been paid in full or
otherwise discharged prior to such date, and (ii) an amount
estimated by Purchaser to be necessary to satisfy all Indem-
nification Claims delivered to the Escrow Agent and Representative
prior to the Third Anniversary which have not been paid in full or
otherwise discharged prior to such date, including with respect to
each such Indemnification Claim, the estimated legal and other out-
of-pocket expenses to defend such Indemnification Claim. Any
distribution to the Sellers under this Section 5.1 shall be made in
conformity with Section 5.3 hereof.
5.2 Final Distribution. When all Payment Notices and
Indemnification Claims received by the Escrow Agent have been
resolved by payment or otherwise, Purchaser and the Representative
shall execute and deliver to the Escrow Agent a certificate to that
effect and, as promptly as is practicable after its receipt of such
certificate, the Escrow Agent shall distribute to the Sellers all
remaining funds held in the Escrow Account.
5.3 Manner of Seller Distributions. When the Escrow
Agent is required to make any distribution of funds to Sellers
under Sections 5.1 and 5.2 above, the Escrow Agent shall distribute
the funds to the Sellers by wire transfer to an account specified
by each of the Sellers as follows: to Covington twenty (20%) of the
distribution and the remainder of such distribution to the MHI
Sellers in accordance with the written instructions signed by each
of the MHI Sellers and delivered to the Escrow Agent.
6. Beneficial Ownership of MHI and Texas Drydock Stock.
The MHI and Texas Drydock Stock held in the Escrow Account shall be
held for the account and benefit of the Sellers and the Sellers
shall be entitled to exercise any and all beneficial ownership
rights pertaining to MHI and Texas Drydock Stock, including, but
not limited to, the following:
6.1 Exercise of Voting Rights. All voting rights of the
shares of MHI and Texas Drydock Stock shall be vested in the
Sellers until the Purchase Option Total Exercise Price or Put
Option Total Price has been deposited with the Escrow Agent.
6.2 Dividends. The Escrow Agent shall pay to the
Sellers in accordance with their respective interests all amounts
received by the Escrow Agent as dividends on the shares of MHI and
Texas Drydock Stock in the event that any shares of MHI or Texas
Drydock Stock shall ever be registered in the name of the Escrow
Agent. The Purchaser and Representative warrant to the Escrow
Agent that there are no federal, state or local tax liabilities or
filing requirements whatsoever concerning the Escrow Agent's
actions contemplated hereunder and warrant and represent to the
Escrow Agent that the Escrow Agent has no duty to withhold or file
any report or any tax liability under any federal or state income
tax, local or state property tax, local or state sales or use
taxes, or any other tax by any taxing authority. The Purchaser nd
the Representative hereto agree jointly and severally to identify
the Escrow Agent fully from any tax liability, penalties or
interest incurred by the Escrow Agent arising hereunder and agree
to pay in full any such tax liability together with penalty and
interest, if any, that is ultimately assessed against the Escrow
Agent for any reason as a result of its action hereunder (except
for the Escrow Agent's individual income tax liability).
6.3 Tax Reporting. Until the Purchase Option Closing
or Put Option Closing, the Sellers shall be deemed to own their
respective shares of MHI and Texas Drydock Stock held by the Escrow
Agent and all dividends, gain or loss from sale, and other income
allocable to the MHI and Texas Drydock Stock held by the Escrow
Agent shall be reported as income by the respective Sellers in
accordance with their respective interests in the Escrow Account.
7. Obligations of Escrow Agent. The Escrow Agent shall
have no duties or obligations hereunder except those specifically
set forth herein and such duties and obligations shall be
determined solely by the express provisions of this Escrow
Agreement. In connection with its duties hereunder, the Escrow
Agent shall be protected in acting or refraining from acting upon
any written notice, request, consent, certificate, order,
affidavit, letter, telegram or other document furnished to it
hereunder and believed by it to be genuine and to have been signed
or sent by the proper party or parties and the Escrow Agent shall
not be liable for anything it may do or refrain from doing in
connection with its duties hereunder except as a result of its own
gross negligence, willful misconduct or bad faith. The Escrow
Agent may consult counsel and shall be protected in respect of any
action taken or admitted to be taken by it in good faith on the
advice of such counsel. In the event of any dispute between or
conflicting claims by or among Purchaser and the Representative
and/or any other person or entity with respect to any property
deposited hereunder, the Escrow Agent shall be entitled, at its
sole option, to refuse to comply with any and all claims, demands,
or instructions with respect to such property or funds so long as
such dispute or conflict shall continue, and the Escrow Agent shall
not be or become liable in any way to Purchaser or an indemnified
party or the Sellers or the Representative or any other person or
entity for its failure or refusal to comply with such conflicting
claims, demands or instructions. The Escrow Agent shall be
entitled to refuse to act until, at its sole option, either such
conflicting or adverse claims or demands shall have been finally
determined by arbitration or in a court of competent jurisdiction
or settled by agreement between the conflicting parties as
evidenced in a writing satisfactory to the Escrow Agent, or the
Escrow Agent shall have received security or an indemnity
satisfactory to the Escrow Agent sufficient to save the Escrow
Agent harmless from and against any and all loss, liability or
expenses which the Escrow Agent may incur by reason of its acting.
The Escrow Agent may in addition elect in its sole option to
commence an interpleader action or seek other judicial relief or
orders as the Escrow Agent may deem necessary.
8. Compensation of Escrow Agent. The Escrow Agent shall be
paid reasonable compensation for its services hereunder and
reimbursed for all expenses, including counsel fees, reasonably
incurred by it in connection with the performance of its duties and
obligations under this Escrow Agreement. All such fees and
expenses shall be borne one-half by Purchaser and the other one-
half shall be borne by Sellers (if neither of the options granted
pursuant to Articles 12 and 13 of the Stock Purchase Agreement have
been exercised within the time period therefor) or shall be a valid
Indemnification Claim by Purchaser to be paid out of the Escrow
Account. The Escrow Agent shall render statements to Purchaser and
the Representative setting forth in detail the amount of its fees
and charges hereunder and the basis upon which such fees and
charges were computed in the period or periods covered thereby.
9. Indemnification of Escrow Agent. Subject to the terms
and conditions hereinafter set forth, Purchaser and Sellers agree
to protect, defend, indemnify and hold harmless and compensate the
Escrow Agent for any and all damages, losses, liabilities,
deficiencies, costs or expenses (including, without limitation, all
reasonable legal and accounting fees and expenses and other costs)
incurred by the Escrow Agent (all of which are hereinafter called
the "Escrow Agent's Costs") in connection with any and all actions,
suits, proceedings, demands, investigations, judgments or
settlements relating to, resulting from, or arising out of the
conduct by the Escrow Agent of its duties hereunder, provided,
however, that the Escrow Agent shall not be entitled to any
indemnification for any willful misconduct, gross negligence or bad
faith on the part of itself, its employees or agents. Upon receipt
by the Escrow Agent of notice of any claim by a third party which
might give rise to indemnification of the Escrow Agent hereunder,
the Escrow Agent shall give prompt written notice to Purchaser with
a copy to the Representative. The notice shall set forth a
description of the claim or claims which entitle it to
indemnification and shall recite that such notice is given pursuant
to this Escrow Agreement. Purchaser and Sellers shall be entitled
to participate in the defense of any such claim or action, and to
assume control of the defense thereof, with counsel of its
choosing. The Escrow Agent may not compromise or settle any claim
for which it has asserted or may assert its right to
indemnification without the prior written consent of Purchaser and
the Representative.
10. Reliance on Documents. The Escrow Agent shall be
protected and shall incur no liability for or in respect of any
action taken or thing suffered by it in reliance upon any notice,
consent, certificate, affidavit, statement, order, judgment,
instruction, or other document delivered to it in compliance with
the provisions of this Agreement and shall not be required to
determine the authenticity or the correctness of any fact stated
therein or the propriety or validity of service thereof. The
Escrow Agent may act in reliance upon an instrument comporting with
the provisions of this Agreement reasonably believed by it to be
genuine and to have been presented or signed by the proper parties,
and the Escrow Agent shall be under no duty whatsoever to inquire
into or investigate the validity or accuracy thereof and may assume
that any person purporting to give any notice, receipt or advice or
make any statement or execute any document in connection with the
provisions hereof has been duly authorized to do so.
11. Certain Transactions. The Escrow Agent and its
affiliates may become the owner of, or acquire interests in,
securities of Purchaser and its affiliates or any Seller, and may
engage or be interested in any financial or other transaction with
Purchaser or any affiliate of Purchaser or any Seller as freely as
if it were not the Escrow Agent hereunder.
12. Resignation or Removal of Escrow Agent. The Escrow
Agent may resign at any time or be removed by the mutual written
consent of Purchaser and the Representative upon notice to the
other parties hereto given at least thirty (30) days prior to the
effective date of such resignation or removal; provided, however,
that no resignation or removal of the Escrow Agent shall be
effective until the appointment of a successor Escrow Agent, which
may be effected by the mutual written agreement of Purchaser and
the Representative. In the event of the resignation or removal of
the Escrow Agent, and the failure of Purchaser and the Repre-
sentative to agree upon a successor Escrow Agent within thirty (30)
days after receipt of notice of such resignation or removal,
Purchaser shall have the right to appoint a successor Escrow Agent
which shall be a commercial bank or trust company having a combined
capital and surplus of at least $500,000,000. Any successor Escrow
Agent, whether appointed by the mutual agreement of Purchaser and
the Representative or otherwise, shall execute and deliver to the
predecessor Escrow Agent an instrument accepting such appointment
and thereupon such successor Escrow Agent shall, without further
act, become vested with all the estates, properties, rights, powers
and duties of the predecessor Escrow Agent as is originally named
herein. Such predecessor, upon payment of its charges and
disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Escrow Agent
shall be entitled to receive, all securities and other property on
deposit with or held by such predecessor as Escrow Agent hereunder.
13. Duties and Obligations of Representative. The
Representative shall have no duties or obligations hereunder except
those specifically set forth herein and under the Stock Purchase
Agreement and such duties and obligations shall be determined
solely by the express provisions of this Escrow Agreement and the
Stock Purchase Agreement. The Representative is the sole and
exclusive representative, spokesman and agent for the Sellers and
neither the Escrow Agent, Purchaser nor any indemnified party shall
have any responsibility to meet, discuss or deal with, or any
liability for refusal to meet, discuss or deal with, any other
person or entity, unless such person or entity has been designated
in writing as an agent or representative of the Representative with
respect to a particular matter or situation.
14. Notices. All notices, demands and other communications
which are required to be given to or made by any party hereunder
shall be in writing, shall be delivered by hand or mailed by
registered or certified mail or by couriers and shall be deemed
given when received at the following addresses:
If to Escrow Agent:
Bank One, Louisiana, National Association
Capital Markets
200 Carondelet St., Suite 404
New Orleans, LA 70130
Attention: Mr. W. Mason Curran
If to Representative:
Thomas C. Weller, Jr.
2595 Woodward Way, N.W.
Atlanta, Georgia 30305
If to Purchaser:
Halter Marine, Inc.
13085 Industrial Seaway
Gulfport, Mississippi 39503
Attention: Mr. John Dane, III
15. Successors. This Escrow Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but shall not be assignable by
any party hereto without the written consent of all of the other
parties hereto or as otherwise provided herein.
16. Governing Law. This Escrow Agreement shall be governed
and construed in accordance with the laws of the State of
Louisiana.
17. Counterparts. This Escrow Agreement may be executed in
any number of counterparts, each of which shall be an original,
which together shall constitute one in the same instrument.
18. Entire Understanding. This Escrow Agreement and the
Stock Purchase Agreement contain the entire understanding between
the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, warranties, oral or
written, covenants or undertakings between the parties other than
those expressly set forth herein or in the Stock Purchase
Agreement. This Escrow Agreement may not be modified or changed,
in whole or in part, except by supplemental agreement signed by all
the parties hereto.
19. Headings. The headings of the Sections of this Escrow
Agreement are solely for convenience in reference and shall not
limit or otherwise affect the meaning of the terms or provisions of
this Escrow Agreement.
20. Miscellaneous.
(a) The rights created by this Escrow Agreement shall
inure to the benefit of, and the obligations created hereby shall
be binding upon, the successors and assigns of each of the parties
hereto.
(b) This Escrow Agreement shall terminate and Escrow
Agent shall be discharged of all responsibility hereunder at such
time as Escrow Agent shall have completed its duties hereunder;
provided, however, the Escrow Agent's rights to indemnity and to
receive payment of its fees and expenses shall survive any
termination of this Escrow Agreement.
(c) This Escrow Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to
the transactions described herein and supersedes all prior
agreements or understandings, written or oral, between the parties
with respect thereto. There are no implied duties under this
Escrow Agreement. The Escrow Agent's only duty is to act in
accordance with specific written instructions furnished by the
parties to this Escrow Agreement. The Escrow Agent is not a party
to any other agreement and the Escrow Agent shall not be subject to
any other agreement even though reference thereto may be made
herein.
(d) If any provision of this Escrow Agreement is
declared by a court of competent jurisdiction to be invalid, void
or unenforceable, the remaining provisions shall nevertheless
continue in full force and effect without being impaired or
invalidated in any way.
(e) No amendment, modification or waiver of any
provisions of this Escrow Agreement nor consent to any departure by
any Person from the provisions hereof shall be effective in any
event unless the same shall be in writing and signed by each of
Purchaser, Representative and Escrow Agent, and then any such
waiver or consent shall be effective only in the specific instance
and purpose for which given.
(f) Pursuant to the regulations of the Office of the
Comptroller of the Currency [12 C.F.R. 12.5(a)], the Purchaser and
the Representative have the right to receive, at no additional cost
and within five business days of the transaction, a written
notification disclosing certain information relating to securities
purchase and sale transactions in the Escrow Account. The Escrow
Agent has the option of furnishing to the Purchaser and the
Representative either (1) a copy of the broker-dealer confirmation
relating to the transaction of (2) a written notification
disclosing; the Escrow Agent's name, the account name, the Escrow
Agent's capacity in the transaction, the date of execution (and,
upon the Purchaser's and the Representative's written request, the
time of execution) of the transaction, the identity, price and
number of shares involved, the remuneration to the broker-dealer
and his identify, the total remuneration to be received by the
Escrow Agent, and, if no broker-dealer was involved, the identify
of the person from whom the security was purchased or to whom it
was sold.
In lieu of the foregoing time and form of notification, the
Purchaser and the Representative agree that the Escrow periodic
statements, transmitted pursuant to the terms of this Escrow
Agreement, will suffice.
21. Further Assurances. Each party hereby agrees to execute
and deliver such instruments and take such other action as the
other parties may reasonably require in order to carry out the
intent of this Escrow Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Escrow
Agreement on the date and year first above-written.
HALTER MARINE, INC. THOMAS C. WELLER, JR.
Individually and as the
Representative
/s/ John Dane, III /s/ T. D. Weller, Jr.
By:_________________________ ________________________
Its: President
RONALD J. STEVENS RICK S. REES
/s/ Ronald J. Stevens /s/ Rick S. Rees
_________________________ ___________________________
BANK ONE, LOUISIANA, DON O. COVINGTON
NATIONAL ASSOCIATION
/s/ W. Mason Curram /s/ Don O. Covington
By:___________________________
Its: Assistant Vice President
"Escrow Agent"
<PAGE>
EXHIBIT 99.5
<PAGE>
CONSULTING AGREEMENT
This Agreement (this "Agreement") is entered into as of
April 4 , 1997, by and between TEXAS DRYDOCK, INC., a
Texas corporation ("Company") and THOMAS C. WELLER, JR., an
individual, having his principal residence at 2595 Woodward Way,
N.W., Atlanta, Georgia 30305, ("Consultant").
The parties hereto agree as follows:
1. Engagement. Company hereby engages Consultant and
Consultant hereby agrees to hold himself available to render, and
to render at the request of Company, independent marketing,
advisory and consulting services for Company and its affiliates, to
the best of his ability, upon the terms and conditions hereinafter
set forth.
2. Term. The term of this Agreement shall begin as of the
date of this Agreement and shall terminate on that date which is
four (4) years after this Agreement; provided, however, that this
Agreement shall terminate earlier in the event of Consultant's
death, incapacity or disability or upon written notice by either
party to the other in case of a material breach by the other or by
mutual consent.
3. Compensation. As compensation for all services rendered
by Consultant under this Agreement, Company shall pay Consultant
during the term of this Agreement the sum of One Hundred Thousand
Dollars ($100,000.00) per year, which shall be paid monthly in
installments in arrears of Eight Thousand Three Hundred Thirty-
Three and 33/100 Dollars ($8,333.33) each on the last day of each
month during the term of this Agreement.
4. Duties. Consultant shall hold himself available to
render, and shall render at the request of Company from time to
time, consulting and marketing services for the Company, including,
without limitation, advice and assistance on the following:
(a) marketing the services of Company and its affiliates to
customers;
<PAGE>
(b) developing sales and marketing literature and programs;
(c) customer relations; and
(d) performance of services by Company for its customers.
Consultant shall render such services conscientiously and
shall devote his best efforts and abilities thereto, at such times
during the term hereof, and in such manner, as Company and
Consultant shall mutually agree, it being acknowledged that
Consultant's services shall be performed at such places at such
times as are reasonably convenient to Consultant. It is
anticipated that Consultant shall devote at least a minimum of two
days per month to his duties hereunder, plus attend the Offshore
Technical Conference and National Ocean Industry Association
Conference when requested by the Company. Consultant shall observe
all policies and directives promulgated from time to time by
Company's Board of Directors or Officers.
Company shall have the right from time to time during the term
hereof, without the payment to Consultant of additional
compensation, to loan the services of Consultant to one or more of
Company's affiliated companies, including, without limitation,
Halter Marine Group, Inc. and its subsidiaries, including
particularly, Halter Marine, Inc.
5. Expenses. Consultant shall be reimbursed by Company for
all reasonable business expenses which are deductible by Company
for U.S. Federal income tax purposes and which were incurred by
Consultant during the performance of his services hereunder.
Company's obligation to reimburse Consultant pursuant to this
subparagraph shall be subject to the presentation to Company by
Consultant of an itemized account of such expenditures, together
with supporting vouchers, in accordance with Company's policies as
in effect from time to time.
6. Independent Contractor. It is expressly agreed that
Consultant is acting as an independent contractor in performing his
services hereunder. Company shall carry no Workmen's Compensation
insurance or any health or accident insurance to cover Consultant.
Company shall not pay any contributions to Social Security,
unemployment insurance, federal or state withholding taxes, nor
provide any other contributions or benefits which might be expected
in an employer-employee relationship.
7. Confidential Information. The Consultant acknowledges
that during the term of this Agreement, the Consultant will be
afforded access to Confidential Information and (b) public
disclosure of such Confidential Information could have an adverse
effect on the Company and its business. Consultant covenants that
during the period of this Agreement and for a period of three (3)
years thereafter, the Consultant will hold in confidence such
Confidential Information and will not disclose it to any person
other than in further of the business of the Company, except with
specific prior written consent of the Company or except as
otherwise permitted by this Agreement. For purposes hereof, the
term "Confidential Information" means any and all:
(a) trade secrets concerning the business and affairs of the
Company, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current, and planned
research and development, current and planned manufacturing or
distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies,
business plans, computer software and programs (including object
code and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae,
compositions, processes, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and
information) and any other information, however documented, that is
normally considered in the industry to be a trade secret; and
(b) information concerning the business and affairs of the
Company (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key
personnel, personnel training and techniques and materials, and
similar information, however documented); and
(c) notes, analysis, compilations, studies, summaries, and
other material prepared by or for the Company containing or based,
in whole or in part, on any information included in the foregoing.
<PAGE>
The term "Confidential Information" shall not include, however, any
information that is in the public domain (other than information in
the public domain by reason of its wrongful release by Consultant)
or that Consultant learned from sources outside of the Company or
that has been released by the Company to the public.
8. Non-Competition Provisions. The Consultant acknowledges
that the services to be performed by him under this Agreement are
of a special, unique, unusual, extraordinary, and intellectual
character, that the Company's business is international in scope
and its products are marketed throughout the world, that the
Company competes with other businesses that are or could be located
in any part of the world, and that the provisions of this Section
are reasonable and necessary to protect the Company's business.
Therefore, in consideration of the compensation to be paid to the
Consultant by the Company, the Consultant covenants that he will
not, directly or indirectly:
(a) during the period of this Agreement, except in the
course of Consultant's duties hereunder, and during the period
ending three (3) years thereafter, engage or invest in, own,
manage, operate, finance, control, or participate in the ownership,
management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend the
Consultant's name or any similar name to, lend Consultant's credit
to or render services or advice to, any business whose products or
activities compete in whole or in part with the products or
activities of the Company; provided, however, that the Consultant
may purchase or otherwise acquire up to (but not more than) five
percent of any class of securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if
such securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934;
(b) whether for the Consultant's own account or for the
account of any other person, at any time during the period of this
Agreement and during the period ending three (3) years thereafter,
solicit business of the same or similar type being carried on by
the Company, from any person known by the Consultant to be a
customer of the Company, whether or not the Consultant had personal
<PAGE>
contact with such person during and by reason of the Consultant's
employment with the Company;
(c) whether for the Consultant's own account or the
account of any other person (i) at any time during the period of
this Agreement and ending three (3) years thereafter, solicit,
employ, or otherwise engage as an employee, independent contractor,
or otherwise, any person who is or was an employee of the Company
at any time during the period of this Agreement or in any manner
induce or attempt to induce any employee of the Company to
terminate his employment with the Company; or (ii) at any time
during the period of this Agreement and for three years thereafter,
interfere with the Company's relationship with any person,
including any person who at any time during the period of this
Agreement was an employee, contractor, supplier, or customer of the
Company.
If any covenant in this Section is held to be unreasonable,
arbitrary, or against public policy, such covenant will be
considered to be divisible with respect to scope, time, and
geographic area, and such lesser scope, time, or geographic area,
or all of them, as a court of competent jurisdiction may determine
to be reasonable, not arbitrary, and not against public policy,
will be effective, binding, and enforceable against the Consultant.
9. Injunctive Relief and Additional Remedy. The Consultant
acknowledges that the injury that would be suffered by the Company
as a result of a breach of the provisions of Sections 7 and 8 of
this Agreement would be irreparable and that an award of monetary
damages to the Company for such a breach would be an inadequate
remedy. Consequently, the Company will have the right, in addition
to any other rights it may have, to obtain injunctive relief to
restrain any breach or threatened breach or otherwise to
specifically enforce any provision of this Agreement, and the
Company will not be obligated to post bond or other security in
seeking such relief.
10. Covenants of Sections 7 and 8 are Essential and
Independent Covenants. The covenants by the Consultant in Sections
7 and 8 are essential elements of this Agreement, and without the
Consultant's agreement to comply with such covenants, the
corporation which has agreed to purchase stock from the
stockholders of a company that owns eighty percent (80%) of the
stock of Company and also to purchase from a stockholder who owns
the other twenty percent (20%) of the stock of the Company would
not agree to close its Stock Purchase Agreement and the Company
would not have entered into this Agreement. The Company and the
Consultant have independently consulted their respective counsel
and have been advised in all respects concerning the reasonableness
and propriety of such covenants, with specific regard to the nature
of the business conducted by the Company.
If this Agreement expires or is terminated, this Agreement
will continue in full force and effect as is necessary or
appropriate to enforce the covenants and agreements of the
Consultant in Sections 11 and 12.
11. Representations and Warranties by the Consultant. The
Consultant represents and warrants to the Company that the
execution and delivery by the Consultant of this Agreement do not,
and the performance by the Consultant of the Consultant's
obligations hereunder will not, with or without the giving of
notice or the passage of time, or both: (a) violate any judgment,
writ, injunction, or order of any court, arbitrator, or
governmental agency applicable to the Consultant; or (b) conflict
with, result in the breach of any provisions of or the termination
of, or constitute a default under, any agreement to which the
Consultant is a party or by which the Consultant is or may be
bound.
12. Obligations Contingent on Performance. The obligations
of the Company hereunder, including its obligation to pay the
compensation provided for herein, are contingent upon the
Consultant's performance of the Consultant's obligations hereunder.
13. Waiver. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Neither the failure
nor any delay by either party in exercising any right, power, or
privilege under this Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise
of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one party, in whole or in part,
by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a
party will be applicable except in the specific instance for which
it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such party or of the
right of the party giving such notice or demand to take further
action without notice or demand as provided in this Agreement.
14. Binding Effect; Delegation of Duties Prohibited. This
Agreement shall inure to the benefit of, and shall be binding upon,
the parties hereto and their respective successors, assigns, heirs,
and legal representatives, including any entity with which the
Company may merge or consolidate or to which all or substantially
all of its assets may be transferred. The duties and covenants of
the Consultant under this Agreement, being personal, may not be
delegated.
15. Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with
written confirmation of receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the
appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate
by notice to the other parties):
If to Company: John Dane, III
Chairman of the Board
Texas Drydock, Inc.
c/o Halter Marine Group, Inc.
13085 Industrial Seaway
Gulfport, Mississippi 39503
Facsimile No.: (601) 897-4803
If to the Consultant: Mr. Thomas C. Weller, Jr.
2595 Woodward Way, N.W.
Atlanta, Georgia 30305
<PAGE>
16. Entire Agreement; Amendments. This Agreement contains
the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with
respect to the subject matter hereof. This Agreement may not be
amended orally, but only by an agreement in writing signed by the
parties hereto.
17. Governing Law. This Agreement will be governed by the
laws of the State of Texas without regard to conflicts of laws
principles.
18. Section Headings, Construction. The headings of
Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references
to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement unless otherwise specified. All words
used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words
or terms.
19. Severability. If any provision of this Agreement is
held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in full
force and effect to the extent not held invalid or unenforceable.
20. Counterparts. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original
copy of this Agreement and all of which, when taken together, will
be deemed to constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date above first written above.
COMPANY
TEXAS DRYDOCK, INC.
/s/Rick S. Rees
By:_________________________
Name: Rick Rees
Title: Treasurer
CONSULTANT
/s/T. C. Weller, Jr.
_______________________________
Thomas C. Weller, Jr.
<PAGE>
EXHIBIT 99.6
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of
April 4, , 1997 by and between TEXAS DRYDOCK, INC. a
Texas corporation (the "Employer"), and DON O. COVINGTON, an
individual who resides 4322 Memorial Drive, Orange, Texas 77632
(the "Executive");
W I T N E S S E T H:
The parties hereto agree as follows:
ARTICLE 1.
EMPLOYMENT TERMS AND DUTIES
1.1 Employment. The Employer hereby employs the
Executive, and the Executive hereby accepts employment by the
Employer, upon the terms and conditions set forth in this
Agreement.
1.2 Term. The term of the Executive's employment under
this Agreement shall commence as of the date of this Agreement and
shall terminate on that date which is four (4) years after the date
of this Agreement, subject to Article 5 of this Agreement.
1.3 Duties. The Executive will have such duties as are
assigned or delegated to the Executive by the Board of Directors or
Chairman of the Board, and will initially serve as President of the
Employer. The Executive will devote his entire business time,
attention, skill, and energy to the business of the Employer, will
use his best efforts to promote the success of the Employer's
business, and will cooperate fully with the Board of Directors in
the advancement of the best interests of the Employer. Nothing in
this Section, however, will prevent the Executive from engaging in
additional activities in connection with personal investments and
community affairs that are not inconsistent with the Executive's
duties under this Agreement.
ARTICLE 2.
COMPENSATION
2.1 Base Compensation. The Executive will be paid an
annual salary of Two Hundred Eighty Thousand Dollars ($280,000.00),
subject to adjustment as provided below (the "Base Compensation"),
which will be payable in equal periodic installments according to
the Employer's customary payroll practices, but no less frequently
than monthly. The Base Compensation will be reviewed by the Board
of Directors of the Employer (of if applicable, the Board of
Directors of the corporation which is the parent of the Employer),
or a Compensation Committee appointed by such Board of Directors,
not less frequently than annually, and may be adjusted upward or
downward in the sole discretion of such Board of Directors or
Compensation Committee, but in no event will the Base Compensation
be less than Two Hundred Eighty Thousand Dollars ($280,000.00) per
year, without Executive's consent.
2.2 Incentive Compensation. As additional compensation
(the "Incentive Compensation") for the services to be rendered by
the Executive pursuant to this Agreement, the Employer will pay the
Executive with respect to each fiscal year of the Employer during
the period of Executive's employment, commencing on or after April
1, 1997, a bonus as determined from time to time by the Board of
Directors or an amount that is based upon the Employer's incentive
program (the "Incentive Program") as established by the Board of
Directors of Employer (or if applicable, the Board of Directors of
the corporation which is the parent of Employer). Employer may
modify any Incentive Program from time to time and any such
modification may affect prospectively Employee's Incentive
Compensation.
2.3 Benefits. The Executive will, during the term of
Executive's employment under the Agreement, be permitted to
participate in such pension, profit sharing, bonus, life insurance,
hospitalization, major medical, and other employee benefit plans of
the Employer that may be in effect from time to time, to the extent
the Executive is eligible under the terms of those plans
(collectively, the "Benefits").
ARTICLE 3.
FACILITIES AND EXPENSES
3.1 General. The Employer will furnish the Executive
office space, equipment, supplies, and such other facilities and
personnel as the Employer deems necessary or appropriate for the
performance of the Executive's duties under this Agreement. The
Employer will pay the Executive's dues in such professional
societies and organizations as the Chairman of the Board deems
appropriate, and will pay on behalf of the Executive (or reimburse
the Executive for) reasonable expenses incurred by the Executive at
the request of, or on behalf of, the Employer in the performance of
the Executive's duties pursuant to this Agreement, and in
accordance with the Employer's employment policies, including
reasonable expenses incurred by the Executive in attending
conventions, seminars, and other business meetings, in appropriate
business entertainment activities, and for promotional expenses.
The Executive must file expense reports with respect to such
expenses in accordance with the Employer's policies.
3.2 Automobile. The Employer will include the
Executive in the Employer's automobile allowance policy. The
Executive will own his own automobile, and maintain and insure it
at his own expense, for his business use in connection with his
employment under this Agreement. The Executive will at his own
expense maintain liability insurance on any automobile used in
connection with the Employer's business.
ARTICLE 4.
VACATIONS AND HOLIDAYS
The Executive will be entitled to a paid vacation during
each fiscal year in accordance with the vacation policies of the
Employer in effect for its executive officers from time to time.
Vacation must be taken by the Executive at such time or times as
approved by the Chairman of the Board. The Executive will also be
entitled to the paid holidays as set forth in the Employer's
policies. Vacation days and holidays during any fiscal year of the
Employer that are not used by the Executive during such fiscal year
may not be used in any subsequent fiscal year.
ARTICLE 5.
TERMINATION
5.1 Events of Termination. The Executive's Base
Compensation and Incentive Compensation, and any and all other
rights of the Executive under this Agreement or otherwise as an
employee of the Employer will terminate:
(a) upon the death of the Executive;
(b) upon the disability of the Executive (as defined in
Section 5.2) immediately upon notice from either party to the
other;
(c) for cause (as defined in Section 5.3), immediately
upon notice from the Employer to the Executive, or at such later
time as such notice may specify; or
(d) for good reason (as defined in Section 5.4) upon
not less than thirty days' prior notice from the Executive to the
Employer.
5.2 Definition of Disability. For purposes of
Section 5.1, the Executive will be deemed to have a "disability"
if, for physical or mental reasons, the Executive is unable to
perform the Executive's duties under this Agreement for 120
consecutive days, or 180 days during any twelve month period, as
determined in accordance with this Section 5.2. The disability of
the Executive will be determined by a medical doctor selected by
written agreement of the Employer and the Executive upon the
request of either party by notice to the other. If the Employer
and the Executive cannot agree on the selection of a medical
doctor, each of them will select a medical doctor and the two
medical doctors will select a third medical doctor who will
determine whether the Executive has a disability. The
determination of the medical doctor selected under this Section 5.2
will be binding on both parties. The Executive must submit to a
reasonable number of examinations by the medical doctor making the
determination of disability under this Section 5.2, and the
Executive hereby authorizes the disclosure and release to the
Employer of such determination and all supporting medical records.
If the Executive is not legally competent, the Executive's legal
guardian or duly authorized attorney-in-fact will act in the
Executive's stead, under this Section 5.2, for the purposes of
submitting the Executive to the examinations, and providing the
authorization of disclosure, required under this Section 5.2.
5.3 Definition of "for Cause". For purposes of Section
5.1, the phrase "for cause" means: (a) the Executive's material
breach of Sections 6 or 7 of this Agreement; (b) the willful and
continued failure by Executive to substantially perform his duties
hereunder (other than any failure resulting from Executive's
disability as specified in Section 5.2) after demand for
substantial performance is delivered by the Employer that
specifically identifies the manner in which the Employer believes
Executive has not substantially performed his duties; (c) the
appropriation (or attempted appropriation) of a material business
opportunity of the Employer, including attempting to secure or
securing any personal profit in connection with any transaction
entered into on behalf of the Employer; (d) the misappropriation
(or attempted misappropriation) of any of the Employer's funds or
property; or (e) the conviction of, the indictment for (or its
procedural equivalent), or the entering of a guilty plea or plea of
no contest with respect to, a felony, the equivalent thereof, or
any other crime with respect to which imprisonment is a possible
punishment. For purposes of this Section, no act or failure to act
on Executive's part shall be considered "willful" unless done, or
omitted to be done, without reasonable belief that his action or
omission was in the best interests of Employer. Any act, or
failure to act, by Executive that is based upon authority given
pursuant to a resolution duly adopted by the Board of Directors or
based upon the advice of counsel for Employer shall be presumed to
be done, or omitted to be done, by Executive in the best interests
of Employer. Notwithstanding the foregoing, Executive may not be
terminated for Cause without delivery to Executive of a Notice of
Termination setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive's employment under clause (a),(b), (c), (d) or (e) of
this Section; provided, however, that if clause (b) above forms the
basis for such termination, (i) the Employer must have delivered to
Executive a demand for substantial performance in accordance with
clause (b) above and (ii) the Notice of Termination must be
preceded by written notice to Executive (A) specifically
identifying the manner in which Employer believes Executive has not
substantially performed his duties after the Employer's demand for
substantial performance and (B) providing an opportunity for
Executive, together with his counsel, to be heard before the Board
of Directors of the Employer.
5.4 Definition of "for Good Reason". For purposes of
Section 5.1, the phrase "for good reason" means any of the
following: (a) The Employer's material breach of this Agreement;
(b) the assignment of the Executive without his consent to a
position, responsibilities, or duties of a materially lesser status
or degree of responsibility than his position, responsibilities, or
duties at the Effective Date; or (c) the relocation of the
Employer's principal executive offices to another area; or (d) the
requirement by the Employer that the Executive be based anywhere
other than the Employer's principal executive offices, in either
case without the Executive's consent.
5.5 Termination Pay. Effective upon the termination of
this Agreement, the Employer will be obligated to pay the Executive
(or, in the event of his death, his designated beneficiary as
defined below) only such compensation as is provided in this
Section 5.5. For purposes of this Section 5.5, the Executive's
designated beneficiary will be such individual beneficiary or trust
as the Executive may designate by notice to the Employer from time
to time or, if the Executive fails to give notice to the Employer
of such a beneficiary, the Executive's estate. Notwithstanding the
preceding sentence, the Employer will have no duty, in any
circumstances, to attempt to open an estate on behalf of the
Executive, to determine whether any beneficiary designated by the
Executive is alive or to ascertain the address of any such
beneficiary, to determine the existence of any trust, to determine
whether any person or entity purporting to act as the Executive's
personal representative (or the trustee of a trust established by
the Executive) is duly authorized to act in that capacity, or to
locate or attempt to locate any beneficiary, personal
representative, or trustee.
(a) Termination by the Executive for Good Reason. If
the Executive terminates this Agreement for good reason, the
Employer will pay the Executive (i) the Executive's Base
Compensation for the remainder, if any, of the calendar month in
which such termination is effective and (ii) that portion of the
Executive's Incentive Compensation, if any, for the fiscal year
during which the termination is effective, prorated through the
date of termination.
(b) Termination by the Employer for Cause. If the
Employer terminates this Agreement for cause, the Executive will be
entitled to receive his Base Compensation only through the date
such termination is effective, but will not be entitled to any
Incentive Compensation for the fiscal year during which such
termination occurs.
(c) Termination upon Disability. If this Agreement is
terminated by either party as a result of the Executive's
disability, as determined under Section 5.2, the Employer will pay
the Executive his Base Compensation through the remainder of the
calendar month during which such termination is effective and for
the lesser of (i) six (6) consecutive months thereafter, or
(ii) the period until disability insurance benefits commence under
the disability insurance coverage furnished by the Employer to the
Executive and for that part of the Executive's Incentive
Compensation, if any, for the fiscal year during which disability
occurs, prorated through the end of the calendar month during which
disability occurs.
(d) Termination upon Death. If this Agreement is
terminated because of the Executive's death, the Executive will be
entitled to receive his Base Compensation through the end of the
calendar month in which his death occurs, and that part of the
Executive's Incentive Compensation, if any, for the fiscal year
during which his death occurs, prorated through the end of the
calendar month during which his death occurs.
(e) Benefits. The Executive's accrual of, or
participation in plans providing for, the Benefits will cease at
the effective date of the termination of this Agreement, and the
Executive will be entitled to accrued Benefits pursuant to such
plans only as provided in such plans. The Executive will not
receive, as part of his termination pay pursuant to this Section 5,
any payment or other compensation for any vacation, holiday, sick
leave, or other leave unused on the date the notice of termination
is given under this Agreement.
ARTICLE 6.
NON-DISCLOSURE
6.1 Acknowledgments by the Executive. The Executive
acknowledges that (a) during the period of Executive's employment
with the Employer, and as a part of his employment, the Executive
will be afforded access to Confidential Information and (b) public
disclosure of such Confidential Information could have an adverse
effect on the Employer and its business. For purposes hereof, the
term "Confidential Information" means any and all:
(a) trade secrets concerning the business and affairs of the
Employer, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current, and planned
research and development, current and planned manufacturing or
distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies,
business plans, computer software and programs (including object
code and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae,
compositions, processes, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and
information) and any other information, however documented, that is
normally considered in the industry to be a trade secret; and
(b) information concerning the business and affairs of the
Employer (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key
personnel, personnel training and techniques and materials, and
similar information, however documented; and
(c) notes, analysis, compilations, studies, summaries, and
other material prepared by or for the Employer containing or based,
in whole or in part, on any information included in the foregoing.
The term "Confidential Information" shall not include, however, any
information that is in the public domain (other than information in
the public domain by reason of its wrongful release by Executive)
or that Executive learned from sources outside of the Employer or
that has been released by the Employer to the public.
6.2 Agreements of the Executive. In consideration of
the compensation and benefits to be paid or provided to the
Executive by the Employer under this Agreement, the Executive
covenants as follows:
(a) During the period of Executive's employment with
the Employer and for three (3) years thereafter, the Executive will
hold in confidence the Confidential Information and will not
disclose it to any person other than in furtherance of the
Employer's business except with the specific prior written consent
of the Employer or except as otherwise expressly permitted by the
terms of this Agreement.
(b) The Executive will not remove from the Employer's
premises (except to the extent such removal is for purposes of the
performance of the Executive's duties at home or while traveling,
or except in furtherance of the business of the Employer or as
otherwise specifically authorized by the Employer) any document,
record, notebook, plan, model, component, device, or computer
software or code, whether embodied in a disk or in any other form
(collectively, the "Proprietary Items"). The Executive recognizes
that, as between the Employer and the Executive, all of the
Proprietary Items, whether or not developed by the Executive, are
the exclusive property of the Employer. Upon termination of this
Agreement by either party, or upon the request of the Employer
during the period of employment, the Executive will return to the
Employer all of the Proprietary Items in the Executive's possession
or subject to the Executive's control, and the Executive shall not
retain any copies, abstracts, sketches, or other physical
embodiment of any of the Proprietary Items.
ARTICLE 7.
NON-COMPETITION AND NON-INTERFERENCE
7.1 Acknowledgments by the Executive. The Executive
acknowledges that: (a) the services to be performed by him under
this Agreement are of a special, unique, unusual, extraordinary,
and intellectual character; (b) the Employer's business is
international in scope and its products are marketed throughout the
world; (c) the Employer competes with other businesses that are or
could be located in any part of the world; and (d) the provisions
of this Section 7 are reasonable and necessary to protect the
Employer's business.
7.2 Covenants of the Executive. In consideration of
the acknowledgments by the Executive, and in consideration of the
compensation and Benefits to be paid or provided to the Executive
by the Employer, the Executive covenants that he will not, directly
or indirectly:
(a) during the period of Executive's employment with
the Employer, except in the course of his employment hereunder, and
during the period ending three (3) years thereafter, engage or
invest in, own, manage, operate, finance, control, or participate
in the ownership, management, operation, financing, or control of,
be employed by, associated with, or in any manner connected with,
lend the Executive's name or any similar name to, lend Executive's
credit to or render services or advice to, any business whose
products or activities compete in whole or in part with the
products or activities of the Employer; provided, however, that the
Executive may purchase or otherwise acquire up to (but not more
than) five percent of any class of securities of any enterprise
(but without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under Section
12(g) of the Securities Exchange Act of 1934;
(b) whether for the Executive's own account or for the
account of any other person, at any time during the period
commencing with Executive's employment with the Employer and ending
three (3) years thereafter, solicit business of the same or similar
type being carried on by the Employer, from any person known by the
Executive to be a customer of the Employer, whether or not the
Executive had personal contact with such person during and by
reason of the Executive's employment with the Employer; or
(c) whether for the Executive's own account or the
account of any other person (i) at any time during the period
commencing with the Executive's employment with the Employer and
ending three (3) years thereafter, solicit, employ, or otherwise
engage as an employee, independent contractor, or otherwise, any
person who is or was an employee of the Employer at any time during
the period of Executive's employment with the Employer or in any
manner induce or attempt to induce any employee of the Employer to
terminate his employment with the Employer; or (ii) at any time
during the period of Executive's employment with the Employer and
for three years thereafter, interfere with the Employer's
relationship with any person, including any person who at any time
during the period of Executive's employment with the Employer was
an employee, contractor, supplier, or customer of the Employer.
If any covenant in this Section 7.2 is held to be
unreasonable, arbitrary, or against public policy, such covenant
will be considered to be divisible with respect to scope, time, and
geographic area, and such lesser scope, time, or geographic area,
or all of them, as a court of competent jurisdiction may determine
to be reasonable, not arbitrary, and not against public policy,
will be effective, binding, and enforceable against the Executive.
ARTICLE 8.
GENERAL PROVISIONS
8.1 Injunctive Relief and Additional Remedy. The
Executive acknowledges that the injury that would be suffered by
the Employer as a result of a breach of the provisions of Sections
6 and 7 of this Agreement would be irreparable and that an award
of monetary damages to the Employer for such a breach would be an
inadequate remedy. Consequently, the Employer will have the right,
in addition to any other rights it may have, to obtain injunctive
relief to restrain any breach or threatened breach or otherwise to
specifically enforce Sections 6 and 7 of this Agreement, and the
Employer will not be obligated to post bond or other security in
seeking such relief.
8.2 Covenants of Sections 6 and 7 are Essential and
Independent Covenants. The covenants by the Executive in Sections
6 and 7 are essential elements of this Agreement, and without the
Executive's agreement to comply with such covenants, the
corporation which has agreed to purchase stock from the
stockholders of a company that owns eighty percent (80%) of the
stock of Employer and also to purchase stock of Employer from the
Executive who owns the other twenty percent (20%) of the stock of
the Employer would not agree to close its Stock Purchase Agreement
and the Employer would not have entered into this Agreement. The
Employer and the Executive have independently consulted their
respective counsel and have been advised in all respects concerning
the reasonableness and propriety of such covenants, with specific
regard to the nature of the business conducted by the Employer.
If the Executive's employment hereunder expires or is
terminated, this Agreement will continue in full force and effect
as is necessary or appropriate to enforce the covenants and
agreements of the Executive in Sections 6 and 7.
8.3 Representations and Warranties by the Executive.
The Executive represents and warrants to the Employer that the
execution and delivery by the Executive of this Agreement do not,
and the performance by the Executive of the Executive's obligations
hereunder will not, with or without the giving of notice or the
passage of time, or both: (a) violate any judgment, writ,
injunction, or order of any court, arbitrator, or governmental
agency applicable to the Executive; or (b) conflict with, result in
the breach of any provisions of or the termination of, or
constitute a default under, any agreement to which the Executive is
a party or by which the Executive is or may be bound.
8.4 Obligations Contingent on Performance. The
obligations of the Employer hereunder, including its obligation to
pay the compensation provided for herein, are contingent upon the
Executive's performance of the Executive's obligations hereunder.
8.5 Waiver. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither the
failure nor any delay by either party in exercising any right,
power, or privilege under this Agreement will operate as a waiver
of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any
other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising
out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the claim or right unless
in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party
will be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take further
action without notice or demand as provided in this Agreement.
8.6 Binding Effect; Delegation of Duties Prohibited.
This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns,
heirs, and legal representatives, including any entity with which
the Employer may merge or consolidate or to which all or
substantially all of its assets may be transferred. The duties and
covenants of the Executive under this Agreement, being personal,
may not be delegated.
8.7 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with
written confirmation of receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the
appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate
by notice to the other parties):
If to Employer: John Dane, III
Chairman of the Board
Texas Drydock, Inc.
c/o Halter Marine Group, Inc.
13085 Industrial Seaway
Gulfport, Mississippi 39503
Facsimile No.: (601) 897-4803
If to the Executive: Mr. Don O. Covington
4322 Memorial Drive
Orange, Texas 77632
8.8 Entire Agreement; Amendments. This Agreement
contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with
respect to the subject matter hereof. This Agreement may not be
amended orally, but only by an agreement in writing signed by the
parties hereto.
8.9 Governing Law. This Agreement will be governed by
the laws of the State of Texas without regard to conflicts of laws
principles.
8.10 Section Headings, Construction. The headings of
Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references
to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement unless otherwise specified. All words
used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words
or terms.
8.11 Severability. If any provision of this Agreement
is held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in full
force and effect to the extent not held invalid or unenforceable.
8.12 Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed to be an
original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date above first written above.
EMPLOYER
TEXAS DRYDOCK, INC.
/s/ T. C. Weller, Jr.
By:____________________________
Name: T. C. Weller, Jr.
Title: Chairman
EXECUTIVE
/s/Don O. Covington
_______________________________
Don O. Covington
<PAGE>
EXHIBIT 99.7
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made as of
April 4 , 1997 by TEXAS DRYDOCK, INC. a Texas
corporation (the "Employer"), and ROBERT W. FOGAL, an individual
who resides AT 15526 San Milo , Houston , Texas 77068
(the "Executive");
W I T N E S S E T H:
The parties hereto agree as follows:
ARTICLE 1.
EMPLOYMENT TERMS AND DUTIES
1.1 Employment. The Employer hereby employs the
Executive, and the Executive hereby accepts employment by the
Employer, upon the terms and conditions set forth in this
Agreement.
1.2 Term. The term of the Executive's employment under
this Agreement shall commence as of the date of this Agreement and
shall terminate on that date which is four (4) years after the date
of this Agreement, subject to Article 5 of this Agreement.
1.3 Duties. The Executive will have such duties as are
assigned or delegated to the Executive by the Board of Directors or
Chairman of the Board, and will initially serve as Vice President
of the Employer. The Executive will devote his entire business
time, attention, skill, and energy to the business of the Employer,
will use his best efforts to promote the success of the Employer's
business, and will cooperate fully with the Board of Directors in
the advancement of the best interests of the Employer. Nothing in
this Section, however, will prevent the Executive from engaging in
additional activities in connection with personal investments and
community affairs that are not inconsistent with the Executive's
duties under this Agreement.
ARTICLE 2.
COMPENSATION
2.1 Base Compensation. The Executive will be paid an
annual salary of One Hundred Thirty-Eighty Thousand Dollars
($138,000.00), subject to adjustment as provided below (the "Base
Compensation"), which will be payable in equal periodic
installments according to the Employer's customary payroll
practices, but no less frequently than monthly. The Base
Compensation will be reviewed by the Board of Directors of the
Employer (of if applicable, the Board of Directors of the
corporation which is the parent of the Employer), or a Compensation
Committee appointed by such Board of Directors, not less frequently
than annually, and may be adjusted upward or downward in the sole
discretion of such Board of Directors or Compensation Committee,
but in no event will the Base Compensation be less than One Hundred
Thirty-Eighty Thousand Dollars ($138,000.00) per year, without
Executive's consent.
2.2 Incentive Compensation. As additional compensation
(the "Incentive Compensation") for the services to be rendered by
the Executive pursuant to this Agreement, the Employer will pay the
Executive with respect to each fiscal year of the Employer during
the period of Executive's employment, commencing on or after April
1, 1997, a bonus as determined from time to time by the Board of
Directors or an amount that is based upon the Employer's incentive
program (the "Incentive Program") as established by the Board of
Directors of Employer (or if applicable, the Board of Directors of
the corporation which is the parent of Employer). Employer may
modify any Incentive Program from time to time and any such
modification may affect prospectively Employee's Incentive
Compensation.
2.3 Benefits. The Executive will, during the term of
Executive's employment under the Agreement, be permitted to
participate in such pension, profit sharing, bonus, life insurance,
hospitalization, major medical, and other employee benefit plans of
the Employer that may be in effect from time to time, to the extent
the Executive is eligible under the terms of those plans
(collectively, the "Benefits").
ARTICLE 3.
FACILITIES AND EXPENSES
3.1 General. The Employer will furnish the Executive
office space, equipment, supplies, and such other facilities and
personnel as the Employer deems necessary or appropriate for the
performance of the Executive's duties under this Agreement. The
Employer will pay the Executive's dues in such professional
societies and organizations as the Chairman of the Board deems
appropriate, and will pay on behalf of the Executive (or reimburse
the Executive for) reasonable expenses incurred by the Executive at
the request of, or on behalf of, the Employer in the performance of
the Executive's duties pursuant to this Agreement, and in
accordance with the Employer's employment policies, including
reasonable expenses incurred by the Executive in attending
conventions, seminars, and other business meetings, in appropriate
business entertainment activities, and for promotional expenses.
The Executive must file expense reports with respect to such
expenses in accordance with the Employer's policies.
3.2 Automobile. The Employer will include the
Executive in the Employer's automobile allowance policy. The
Executive will own his own automobile, and maintain and insure it
at his own expense, for his business use in connection with his
employment under this Agreement. The Executive will at his own
expense maintain liability insurance on any automobile used in
connection with the Employer's business.
ARTICLE 4.
VACATIONS AND HOLIDAYS
The Executive will be entitled to a paid vacation during
each fiscal year in accordance with the vacation policies of the
Employer in effect for its executive officers from time to time.
Vacation must be taken by the Executive at such time or times as
approved by the Chairman of the Board. The Executive will also be
entitled to the paid holidays as set forth in the Employer's
policies. Vacation days and holidays during any fiscal year of the
Employer that are not used by the Executive during such fiscal year
may not be used in any subsequent fiscal year.
ARTICLE 5.
TERMINATION
5.1 Events of Termination. The Executive's Base
Compensation and Incentive Compensation, and any and all other
rights of the Executive under this Agreement or otherwise as an
employee of the Employer will terminate:
(a) upon the death of the Executive;
(b) upon the disability of the Executive (as defined in
Section 5.2) immediately upon notice from either party to the
other;
(c) for cause (as defined in Section 5.3), immediately
upon notice from the Employer to the Executive, or at such later
time as such notice may specify; or
(d) for good reason (as defined in Section 5.4) upon
not less than thirty days' prior notice from the Executive to the
Employer.
5.2 Definition of Disability. For purposes of
Section 5.1, the Executive will be deemed to have a "disability"
if, for physical or mental reasons, the Executive is unable to
perform the Executive's duties under this Agreement for 120
consecutive days, or 180 days during any twelve month period, as
determined in accordance with this Section 5.2. The disability of
the Executive will be determined by a medical doctor selected by
written agreement of the Employer and the Executive upon the
request of either party by notice to the other. If the Employer
and the Executive cannot agree on the selection of a medical
doctor, each of them will select a medical doctor and the two
medical doctors will select a third medical doctor who will
determine whether the Executive has a disability. The
determination of the medical doctor selected under this Section 5.2
will be binding on both parties. The Executive must submit to a
reasonable number of examinations by the medical doctor making the
determination of disability under this Section 5.2, and the
Executive hereby authorizes the disclosure and release to the
Employer of such determination and all supporting medical records.
If the Executive is not legally competent, the Executive's legal
guardian or duly authorized attorney-in-fact will act in the
Executive's stead, under this Section 5.2, for the purposes of
submitting the Executive to the examinations, and providing the
authorization of disclosure, required under this Section 5.2.
5.3 Definition of "for Cause". For purposes of Section
5.1, the phrase "for cause" means: (a) the Executive's material
breach of Article 6 this Agreement; (b) the willful and continued
failure by Executive to substantially perform his duties hereunder
(other than any failure resulting from Executive's disability as
specified in Section 5.2) after demand for substantial performance
is delivered by the Employer that specifically identifies the
manner in which the Employer believes Executive has not
substantially performed his duties; (c) the appropriation (or
attempted appropriation) of a material business opportunity of the
Employer, including attempting to secure or securing any personal
profit in connection with any transaction entered into on behalf of
the Employer; (d) the misappropriation (or attempted
misappropriation) of any of the Employer's funds or property; or
(e) the conviction of, the indictment for (or its procedural
equivalent), or the entering of a guilty plea or plea of no contest
with respect to, a felony, the equivalent thereof, or any other
crime with respect to which imprisonment is a possible punishment.
For purposes of this Section, no act or failure to act on
Executive's part shall be considered "willful" unless done, or
omitted to be done, without reasonable belief that his action or
omission was in the best interests of Employer. Any act, or
failure to act, by Executive that is based upon authority given
pursuant to a resolution duly adopted by the Board of Directors or
based upon the advice of counsel for Employer shall be presumed to
be done, or omitted to be done, by Executive in the best interests
of Employer. Notwithstanding the foregoing, Executive may not be
terminated for Cause without delivery to Executive of a Notice of
Termination setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive's employment under clause (a),(b), (c), (d) or (e) of
this Section; provided, however, that if clause (b) above forms the
basis for such termination, (i) the Employer must have delivered to
Executive a demand for substantial performance in accordance with
clause (b) above and (ii) the Notice of Termination must be
preceded by written notice to Executive (A) specifically
identifying the manner in which Employer believes Executive has not
substantially performed his duties after the Employer's demand for
substantial performance and (B) providing an opportunity for
Executive, together with his counsel, to be heard before the Board
of Directors of the Employer.
5.4 Definition of "for Good Reason". For purposes of
Section 5.1, the phrase "for good reason" means any of the
following: (a) The Employer's material breach of this Agreement;
(b) the assignment of the Executive without his consent to a
position, responsibilities, or duties of a materially lesser status
or degree of responsibility than his position, responsibilities, or
duties at the Effective Date; or (c) the relocation of the
Employer's principal executive offices to another area; or (d) the
requirement by the Employer that the Executive be based anywhere
other than the Employer's principal executive offices, in either
case without the Executive's consent.
5.5 Termination Pay. Effective upon the termination of
this Agreement, the Employer will be obligated to pay the Executive
(or, in the event of his death, his designated beneficiary as
defined below) only such compensation as is provided in this
Section 5.5. For purposes of this Section 5.5, the Executive's
designated beneficiary will be such individual beneficiary or trust
as the Executive may designate by notice to the Employer from time
to time or, if the Executive fails to give notice to the Employer
of such a beneficiary, the Executive's estate. Notwithstanding the
preceding sentence, the Employer will have no duty, in any
circumstances, to attempt to open an estate on behalf of the
Executive, to determine whether any beneficiary designated by the
Executive is alive or to ascertain the address of any such
beneficiary, to determine the existence of any trust, to determine
whether any person or entity purporting to act as the Executive's
personal representative (or the trustee of a trust established by
the Executive) is duly authorized to act in that capacity, or to
locate or attempt to locate any beneficiary, personal
representative, or trustee.
(a) Termination by the Executive for Good Reason. If
the Executive terminates this Agreement for good reason, the
Employer will pay the Executive (i) the Executive's Base
Compensation for the remainder, if any, of the calendar month in
which such termination is effective and (ii) that portion of the
Executive's Incentive Compensation, if any, for the fiscal year
during which the termination is effective, prorated through the
date of termination.
(b) Termination by the Employer for Cause. If the
Employer terminates this Agreement for cause, the Executive will be
entitled to receive his Base Compensation only through the date
such termination is effective, but will not be entitled to any
Incentive Compensation for the fiscal year during which such
termination occurs.
(c) Termination upon Disability. If this Agreement is
terminated by either party as a result of the Executive's
disability, as determined under Section 5.2, the Employer will pay
the Executive his Base Compensation through the remainder of the
calendar month during which such termination is effective and for
the lesser of (i) six (6) consecutive months thereafter, or
(ii) the period until disability insurance benefits commence under
the disability insurance coverage furnished by the Employer to the
Executive and for that part of the Executive's Incentive
Compensation, if any, for the fiscal year during which disability
occurs, prorated through the end of the calendar month during which
disability occurs.
(d) Termination upon Death. If this Agreement is
terminated because of the Executive's death, the Executive will be
entitled to receive his Base Compensation through the end of the
calendar month in which his death occurs, and that part of the
Executive's Incentive Compensation, if any, for the fiscal year
during which his death occurs, prorated through the end of the
calendar month during which his death occurs.
(e) Benefits. The Executive's accrual of, or
participation in plans providing for, the Benefits will cease at
the effective date of the termination of this Agreement, and the
Executive will be entitled to accrued Benefits pursuant to such
plans only as provided in such plans. The Executive will not
receive, as part of his termination pay pursuant to this Section 5,
any payment or other compensation for any vacation, holiday, sick
leave, or other leave unused on the date the notice of termination
is given under this Agreement.
ARTICLE 6.
NON-DISCLOSURE
6.1 Acknowledgments by the Executive. The Executive
acknowledges that (a) during the period of Executive's employment
with the Employer, and as a part of his employment, the Executive
will be afforded access to Confidential Information and (b) public
disclosure of such Confidential Information could have an adverse
effect on the Employer and its business. For purposes hereof, the
term "Confidential Information" means any and all:
(a) trade secrets concerning the business and affairs of the
Employer, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current, and planned
research and development, current and planned manufacturing or
distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies,
business plans, computer software and programs (including object
code and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae,
compositions, processes, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and
information) and any other information, however documented, that is
normally considered in the industry to be a trade secret; and
(b) information concerning the business and affairs of the
Employer (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key
personnel, personnel training and techniques and materials, and
similar information, however documented; and
(c) notes, analysis, compilations, studies, summaries, and
other material prepared by or for the Employer containing or based,
in whole or in part, on any information included in the foregoing.
The term "Confidential Information" shall not include, however, any
information that is in the public domain (other than information in
the public domain by reason of its wrongful release by Executive)
or that Executive learned from sources outside of the Employer or
that has been released by the Employer to the public.
6.2 Agreements of the Executive. In consideration of
the compensation and benefits to be paid or provided to the
Executive by the Employer under this Agreement, the Executive
covenants as follows:
(a) During the period of Executive's employment with
the Employer, the Executive will hold in confidence the
Confidential Information and will not disclose it to any person
other than in furtherance of the Employer's business except with
the specific prior written consent of the Employer or except as
otherwise expressly permitted by the terms of this Agreement.
(b) The Executive will not remove from the Employer's
premises (except to the extent such removal is for purposes of the
performance of the Executive's duties at home or while traveling,
or except in furtherance of the business of the Employer or as
otherwise specifically authorized by the Employer) any document,
record, notebook, plan, model, component, device, or computer
software or code, whether embodied in a disk or in any other form
(collectively, the "Proprietary Items"). The Executive recognizes
that, as between the Employer and the Executive, all of the
Proprietary Items, whether or not developed by the Executive, are
the exclusive property of the Employer. Upon termination of this
Agreement by either party, or upon the request of the Employer
during the period of employment, the Executive will return to the
Employer all of the Proprietary Items in the Executive's possession
or subject to the Executive's control, and the Executive shall not
retain any copies, abstracts, sketches, or other physical
embodiment of any of the Proprietary Items.
ARTICLE 7.
GENERAL PROVISIONS
7.1 Injunctive Relief and Additional Remedy. The
Executive acknowledges that the injury that would be suffered by
the Employer as a result of a breach of the provisions of Section
6 of this Agreement would be irreparable and that an award of
monetary damages to the Employer for such a breach would be an
inadequate remedy. Consequently, the Employer will have the right,
in addition to any other rights it may have, to obtain injunctive
relief to restrain any breach or threatened breach or otherwise to
specifically enforce Section 6 of this Agreement, and the Employer
will not be obligated to post bond or other security in seeking
such relief.
7.2 Covenants of Section 6 are Essential and
Independent Covenants. The covenants by the Executive in Section
6 are essential elements of this Agreement, and without the
Executive's agreement to comply with such covenants, the
corporation which has agreed to purchase stock from the
stockholders of a company that owns eighty percent (80%) of the
stock of Employer and also to purchase stock of Employer from a
stockholder who owns the other twenty percent (20%) of the stock of
the Employer would not agree to close its Stock Purchase Agreement
and the Employer would not have entered into this Agreement. The
Employer and the Executive have independently consulted their
respective counsel and have been advised in all respects concerning
the reasonableness and propriety of such covenants, with specific
regard to the nature of the business conducted by the Employer.
If the Executive's employment hereunder expires or is
terminated, this Agreement will continue in full force and effect
as is necessary or appropriate to enforce the covenants and
agreements of the Executive in Section 6.
7.3 Representations and Warranties by the Executive.
The Executive represents and warrants to the Employer that the
execution and delivery by the Executive of this Agreement do not,
and the performance by the Executive of the Executive's obligations
hereunder will not, with or without the giving of notice or the
passage of time, or both: (a) violate any judgment, writ,
injunction, or order of any court, arbitrator, or governmental
agency applicable to the Executive; or (b) conflict with, result in
the breach of any provisions of or the termination of, or
constitute a default under, any agreement to which the Executive is
a party or by which the Executive is or may be bound.
7.4 Obligations Contingent on Performance. The
obligations of the Employer hereunder, including its obligation to
pay the compensation provided for herein, are contingent upon the
Executive's performance of the Executive's obligations hereunder.
7.5 Waiver. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither the
failure nor any delay by either party in exercising any right,
power, or privilege under this Agreement will operate as a waiver
of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any
other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising
out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the claim or right unless
in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party
will be deemed to be a waiver of any obligation of such party or of
the right of the party giving such notice or demand to take further
action without notice or demand as provided in this Agreement.
7.6 Binding Effect; Delegation of Duties Prohibited.
This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns,
heirs, and legal representatives, including any entity with which
the Employer may merge or consolidate or to which all or
substantially all of its assets may be transferred. The duties and
covenants of the Executive under this Agreement, being personal,
may not be delegated.
7.7 Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given when (a) delivered by hand (with
written confirmation of receipt), (b) sent by facsimile (with
written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the
appropriate addresses and facsimile numbers set forth below (or to
such other addresses and facsimile numbers as a party may designate
by notice to the other parties):
If to Employer: John Dane, III
Chairman of the Board
Texas Drydock, Inc.
c/o Halter Marine Group, Inc.
13085 Industrial Seaway
Gulfport, Mississippi 39503
Facsimile No.: (601) 897-4803
If to the Executive: Mr. Robert W. Fogal
1526 SAN MILO
HOUSTON , Texas 77068
8.8 Entire Agreement; Amendments. This Agreement
contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with
respect to the subject matter hereof. This Agreement may not be
amended orally, but only by an agreement in writing signed by the
parties hereto.
8.9 Governing Law. This Agreement will be governed by
the laws of the State of Texas without regard to conflicts of laws
principles.
8.10 Section Headings, Construction. The headings of
Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references
to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement unless otherwise specified. All words
used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words
or terms.
8.11 Severability. If any provision of this Agreement
is held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held
invalid or unenforceable only in part or degree will remain in full
force and effect to the extent not held invalid or unenforceable.
8.12 Counterparts. This Agreement may be executed in
one or more counterparts, each of which will be deemed to be an
original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement as of the date above first written above.
EMPLOYER
TEXAS DRYDOCK, INC.
/s/T. C. Weller, Jr.
By:___________________________
Name: T. C. Weller, Jr.
Title: Chairman
EXECUTIVE
/s/Robert W. Fogal
_______________________________
Robert W. Fogal
