STOCK PURCHASE AGREEMENT by and between ZAPATA CORPORATION and OMEGA PROTEIN CORPORATION Dated as of September 8, 2006
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EXECUTION VERSION
by and between
XXXXXX CORPORATION
and
OMEGA PROTEIN CORPORATION
Dated as of September 8, 2006
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Exhibit A — Majority Stockholder Written Consent |
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Exhibit B — Letter Agreements with Purchaser Executive Officers |
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Exhibit C —Form Amended and Restated Registration Rights Agreement |
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Exhibit D — Form of Opinion Letter for Purchaser’s Counsel |
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Exhibit E — Form of Opinion Letter for Seller’s Counsel |
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Exhibit F — Forms of Resignation of Xxxxx X. Xxxxxx and Xxxxxxx XxXxxxx |
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Exhibit G — Form of Call Option Exercise Notice |
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Exhibit H — Form of Seller Call Option Exercise Closing Certificate |
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Exhibit I — Form of Purchaser Call Option Exercise Closing Certificate |
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This STOCK PURCHASE AGREEMENT dated as of September 8, 2006 (this “Agreement”), is
entered into by and between Xxxxxx Corporation, a Nevada corporation (the “Seller”), and
Omega Protein Corporation, a Nevada corporation (the “Purchaser”). (Each of the Seller and
the Purchaser is a “Party”, and together are the “Parties”).
RECITALS
WHEREAS, the Seller is the beneficial owner of 14,501,000 shares of the common stock, par
value $0.01 per share (the “Common Stock”), of the Purchaser;
WHEREAS, the Purchaser desires to repurchase from the Seller, and the Seller desires to sell
to the Purchaser, 9,268,292 shares of Common Stock held by the Seller and represented by that
certain share certificate of the Purchaser number OM0000230 registered in the name of the Seller
dated September 6, 2006 (the “Shares”), upon the terms and subject to the conditions
contained in this Agreement;
WHEREAS, the Purchaser desires to acquire from the Seller, and the Seller desires to grant to
the Purchaser, an option to acquire all of the shares of Common Stock held by the Seller on the
date of the exercise of such option, upon the terms and subject to the conditions contained in this
Agreement (the “Call Option Shares”);
WHEREAS, concurrently with the execution and delivery of this Agreement, the holder of a
majority of the outstanding shares of common stock, par value $0.01 per share, of the Seller (the
“Seller Common Stock”) has duly executed and delivered to the Seller a written consent, a
copy of which is attached hereto as Exhibit A (the “Majority Stockholder Written
Consent”), approving this Agreement and the transactions contemplated hereby, including the
sale of the Shares and the Call Option Shares, in accordance with the requirements of the NGCL and
the Seller’s articles of incorporation and bylaws; and
WHEREAS, concurrently with the execution and delivery of this Agreement, the Purchaser
Executive Officers have duly executed and delivered to the Purchaser and the Seller agreements,
copies of which are attached hereto as Exhibit B, confirming that neither this Agreement
nor the transactions contemplated hereby, including the sale of the Shares and the Call Option
Shares, shall constitute a change of control for the purposes of their employment or change of
control agreements with the Purchaser.
NOW, THEREFORE, in consideration of the premises and covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Seller and the Purchaser agree as follows:
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ARTICLE 1
DEFINITIONS, USAGE, ETC.
| SECTION 1.1 Defined Terms. |
SECTION 1.1 Defined Terms. As used in this Agreement, the terms below have the following meanings:
“Accrued Interest” has the meaning assigned to such term in Section 3.1.
“Acquisition Documents” shall mean this Agreement, the Escrow Agreement, the Amended
and Restated Registration Rights Agreement and each of the other certificates, documents and
instruments to be executed and delivered by the Parties hereto pursuant to the terms hereof.
“Acquisition Proposal” shall mean any inquiry, proposal, offer or action relating to,
or that is reasonably likely to lead to, any sale, exchange, transfer or other disposition of any
or all of a number of shares of Common Stock that exceeds the Pre-Closing Remaining Shares.
“Affiliate” means, as to any Person, any other Person which directly or indirectly
controls, or is under common control with, or is controlled by, such Person. As used in this
definition “control” (including, with its correlative meanings, “controlled by” and “under common
control with”) means possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or partnership or other
ownership interest, by contract or otherwise). For the purposes of this Agreement, an Affiliate of
the Purchaser shall not be deemed to include the Seller, and an Affiliate of the Seller shall not
be deemed to include the Purchaser.
“Agreement” has the meaning assigned to such term in the preamble.
“Amended and Restated Registration Rights Agreement” means the Amended and Restated
Registration Rights Agreement in the form attached as Exhibit C which amends and restates
the Registration Rights Agreement.
“Applicable Law” means, with respect to any Person, any Law applicable to such Person
or its business, properties or assets.
“Beneficially Own” has the meaning set forth in Rule 13d-3 under the Exchange Act.
“Call Option” has the meaning assigned to such term in Section 9.2(a).
“Call Option Closing” has the meaning assigned to such term in Section 9.2(b).
“Call Option Closing Date” has the meaning assigned to such term in Section 9.2(a).
“Call Option Exercise Notice” has the meaning assigned to such term in Section 9.2(a).
“Call Option Exercise Period” has the meaning assigned to such term in Section 9.2(a).
“Call Option Purchase Price” has the meaning assigned to such term in Section 9.2(a).
“Call Option Shares” has the meaning assigned to such term in the recitals.
“Call Option Transaction” has the meaning assigned to such term in Section 9.2.
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“Cerberus Commitment Letter” means the commitment letter dated September 8, 2006 from
Ableco Finance LLC, an affiliate of Cerberus Capital Management, L.P., to provide debt financing
(the “Financing”) for (i) acquiring the Shares, (ii) providing future working capital and
(iii) paying fees and expenses related thereto, together with any amendments or supplements thereto
or replacements thereof obtained by the Purchaser from time to time.
“Closing” has the meaning assigned to such term in Article 4.
“Closing Date” has the meaning assigned to such term in Article 4.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” has the meaning assigned to such term in the recitals.
“Damages” has the meaning assigned to such term in Section 11.2.
“Direct Claim” has the meaning assigned to such term in Section 11.3.
“Distributions” has the meaning assigned to such term in Section 3.1.
“EBITDA” means, for the applicable period, the Purchaser’s consolidated net income
(loss) before interest, taxes, depreciation and amortization, excluding (i) any non-recurring,
extraordinary or unusual income, gains or charges (including without limitation, the “Loss
resulting from natural disaster, net (see Note 11 — Hurricane Losses)” disclosed in the
Purchaser’s Form 10-Q for the period ended September 30, 2005 filed with the Commission), all as
determined in accordance with the generally accepted accounting principles applied on a consistent
basis. For purposes of the forgoing, net income shall exclude the income or loss of any entity
accrued prior to the date on which it becomes a subsidiary or is merged into or consolidated with
Purchaser or any subsidiary of Purchaser or the date on which such entity’s assets are acquired by
the Purchaser or any consolidated subsidiary of the Purchaser.
“Encumbrances” has the meaning assigned to such term in Article 2.
“Escrow Agent” has the meaning assigned to such term in Section 3.1.
“Escrow Agreement” has the meaning assigned to such term in Section 3.1.
“Escrow Date” has the meaning assigned to such term in Section 3.1.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Financing” has the meaning assigned to such term in the definition of Cerberus
Commitment Letter in Section 1.1.
“Financing Transaction Documents” means the definitive agreements, notes, instruments
and other documents to be executed by the Purchaser and/or any of its subsidiaries and Ableco
Finance LLC, with respect to which the Financing is be provided to the Purchaser.
“Governmental Authority” means any federal, state or local government, or any
political subdivision of any of the foregoing, or any court, agency or other entity, body,
organization or group, exercising any executive, legislative, judicial, quasi judicial, regulatory
or administrative function of government.
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“Indemnified Party” has the meaning assigned to such term in Section 11.3.
“Indemnifying Party” has the meaning assigned to such term in Section 11.3.
“Information Statement” has the meaning assigned to such term in Section 5.4.
“Interest Margin Amount” has the meaning assigned to such term in Section 3.2.
“Law” means all applicable state and federal laws, statutes, rules and regulations and
ordinances including all applicable decisions of courts having the effect of law in any such
jurisdiction.
“Majority Stockholder Written Consent” has the meaning assigned to such term in the
recitals.
“1934 Act Reports” has the meaning assigned to such term in Section 6.7.
“NGCL” means the general corporation law of the State of Nevada contained in Chapter
78 of the Nevada Revised Statutes.
“NMFS” has the meaning assigned to such term in Section 6.3.
“NMFS Consent” has the meaning assigned to such term in Section 6.3.
“Party” or “Parties” has the meaning assigned to such term in the preamble.
“Person” means any corporation, limited liability company, joint venture, partnership,
individual, limited partnership, trust or other business entity.
“Pre-Closing Remaining Shares” means 5,232,708 shares of Common Stock held by the
Seller on the date of this Agreement less any such shares of Common Stock that are sold, exchanged,
transferred or otherwise disposed of by the Seller on or before the Closing Date.
“Proxy” has the meaning assigned to such term in Section 9.1.
“Purchase Price” has the meaning assigned to such term in Article 2.
“Purchaser” has the meaning assigned to such term in the preamble.
“Purchaser Executive Officers” means Xxxxxx X. xxx Xxxxxxxxx III, Xxxxxx X. Xxxxxxxx,
Xxxx X. Held, J. Xxxxx Xxxxxxx and Xxxxxx X. Xxxxxxxx.
“Purchaser Information” has the meaning assigned to such term in Section 6.8.
“Qualified Transaction Proposal” has the meaning assigned to such term in Section 7.1.
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“Registration Period” has the meaning assigned to such term in Section 7.10.
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of
April 12, 1998, between the Seller and the Purchaser.
“Remaining Shares” has the meaning assigned to such term in Section 7.4.
“Registration Statement” has the meaning assigned to such term in Section 7.10.
“Representative” means any officer, director, employee, partner, trustee, attorney,
accountant, advisor, agent or other representative of any Person.
“Securities Act” means the Securities Act of 1933, as amended.
“Seller” has the meaning assigned to such term in the preamble.
“Seller Common Stock” has the meaning assigned to such term in the recitals.
“Separation Agreement” means the Separation Agreement, dated as of April 12, 1998,
between the Seller and the Purchaser.
“Shares” has the meaning assigned to such term in the recitals.
“Special Committee” has the meaning assigned to such term in Section 6.2(b).
“Stockholder Notice Period” has the meaning assigned to such term in Section 5.4.
“Subject Shares” means both the Shares and the Call Option Shares.
“Subsidiary” or “subsidiary” means, with respect to any Person, any
corporation, limited liability company, joint venture, limited partnership or partnership of which
such Person (a) Beneficially Owns, either directly or indirectly, more than 50% of (i) the total
combined voting power of all classes of voting securities of such entity, (ii) the total combined
equity interests or (iii) the capital or profit interests in the case of a partnership; or (b)
otherwise has the power to vote or to direct the voting of sufficient securities to elect a
majority of the board of directors or similar governing body; provided, however,
that the Purchaser shall not be considered a Subsidiary of the Seller for the purposes of this
Agreement.
“Superior Proposal” means any Acquisition Proposal (on its most recently amended or
modified terms, if amended or modified) (i) involving the acquisition of all of the Shares and (ii)
with respect to which the Seller’s board of directors (A) determines in good faith that such
Acquisition Proposal, if accepted, is reasonably likely to be consummated on a timely basis, taking
into account all legal, financial, regulatory and other aspects of the Acquisition Proposal and the
Person making the Acquisition Proposal, (B) determines in its good faith judgment (based on, among
other things, the advice of its outside financial advisor) to be more favorable, from a financial
point of view, to the Seller’s stockholders than the sale of the Shares pursuant to
the terms hereof taking into account all relevant factors (including whether, in the good
faith judgment of the Seller’s board of directors, after obtaining the advice of such financial
advisor,
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any proposed changes to this Agreement that may be proposed by the Purchaser in response
to such Acquisition Proposal) and (C) which provides that any requisite external
financing (sufficient to pay the cash portion, if any, of the proposed transaction consideration
and expenses related thereto) is either then committed or otherwise funded and not subject to any
contingency other than those contained in the Cerberus Commitment Letter.
“Third-Party Claim” means any claim, demand, action, suit or proceeding made or
brought by any Person who or which is not a party to this Agreement or who or which is not an
Affiliate of any Party to this Agreement.
“TM Capital Solvency Opinion” has the meaning assigned to such term in Section 6.2(d).
“Transaction” means the repurchase of the Shares by the Purchaser from the Seller,
including the financing of the Purchase Price by the Financing, upon the terms and subject to the
conditions contained in this Agreement.
“Transaction Documents” means the Acquisition Documents together with the Financing
Transaction Documents.
“Voting Agreement Certificate” has the meaning assigned to such term in Section 9.1.
“Voting Agreement Termination Event” means the earlier to occur of the following dates
(a) the last day of any 12 calendar month period in which the Purchaser’s trailing 12-month EBITDA
is less than $15,000,000, (b) the continuation of an uncured or unwaived event of default or
default for more than 30 days on one or more of the Purchaser’s outstanding indebtedness for
borrowed money in excess of $1,000,000 or (c) the first day following the Call Option Exercise
Period that the average closing price of the Common Stock for 10 consecutive trading days is less
than the Call Option Purchase Price.
“Voting Securities” has the meaning assigned to such term in Section 9.1.
| SECTION 1.2 Usage of Terms. |
SECTION 1.2 Usage of Terms. Except where the context otherwise requires, words
importing the singular number shall include the plural number and vice versa.
| SECTION 1.3 References to Articles and Sections. |
SECTION 1.3 References to Articles and Sections. All references in this Agreement to
Articles and Sections (and other subdivisions), Exhibits and Schedules refer to the corresponding
Articles, Sections (and other subdivisions), Exhibits and Schedules of to this Agreement, unless
the context expressly, or by necessary implication, otherwise requires.
ARTICLE 2
SALE AND PURCHASE OF THE SHARES
SECTION 2.1 Sale and Purchase.
(a) On the terms and subject to the conditions contained in this Agreement, the Seller is
selling, conveying, transferring and assigning to the Purchaser, and the Purchaser is acquiring
from the Seller, the Shares at a purchase price of $5.125 per Share for an aggregate purchase
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price of $47,500,000 (the “Purchase Price”) payable in cash at the Closing against the delivery
of the share certificates for the Shares, duly endorsed for transfer, free and clear of all liens,
pledges, adverse claims, restrictions on transfer or voting, hypothecations, mortgages, security
interests, charges, options, right of first refusal or any other encumbrances
(“Encumbrances”) other than those arising from applicable federal and state securities
laws.
(b) The Purchaser hereby waives any and all notice requirements that otherwise apply to the
transfer, sale or assignment of the Subject Shares under the Separation Agreement or otherwise.
(c) At the Closing, the Purchaser shall give directions to its transfer agent to retire all of
the Shares upon the purchase thereof and to cancel all certificates representing the Shares.
(d) At the Closing, the Parties shall execute and deliver to each other the Amended and
Restated Registration Rights Agreement.
| SECTION 2.2 Adjustments Upon Changes in Capitalization. |
SECTION 2.2 Adjustments Upon Changes in Capitalization. In the event of any
reorganization, recapitalization, split, merger, stock split, stock dividend, combination or
exchange of shares, or issuance of other securities in exchange for Common Stock that results in a
change in the number and the kind of shares of Common Stock or securities convertible into Common
Stock, the terms “Shares” and “Call Option Shares” shall be deemed to refer to and include the
Shares and Call Option Shares, respectively, as well as all such dividends and distributions
thereon, and the Seller shall deliver the Shares and all such dividends and distributions to the
Purchaser at the Closing and the Call Option Shares and all such dividends and distributions to the
Purchaser at the Call Option Closing if the Call Option is exercised, and the amount to be paid per
share by the Purchaser for the Shares and the Call Option Shares, respectively, shall be adjusted
so that the total amount to be paid by the Purchaser hereunder as the Purchase Price or the Call
Option Purchase Price remains unchanged.
ARTICLE 3
ESCROW
| SECTION 3.1 Escrow of the Shares and the Purchase Price. |
SECTION 3.1 Escrow of the Shares and the Purchase Price. Concurrent with the execution
and delivery of this Agreement, the Seller, the Purchaser and Manufacturers and Traders Trust
Company (the “Escrow Agent”) have entered into an escrow agreement (the “Escrow
Agreement”). Within 45 days following the date hereof (or such later date or time as the
Parties may agree in writing) (the “Escrow Date”), (i) the Purchaser shall deposit the
Purchase Price by wire transfer of immediately available funds with the Escrow Agent and, (ii) upon
written notice of such deposit by the Purchaser from the Escrow Agent to the Seller, the Seller
shall promptly thereafter deposit the original stock certificates representing
the Shares with the Escrow Agent, together with such instruments of assignment, conveyance and
transfer as Purchaser may deem necessary or desirable, duly executed by the Seller, in each case to
be held in accordance with and, pending the Closing or the termination of, this Agreement or the
Escrow Agreement in accordance with their respective terms. The Purchase Price shall earn interest
on a daily basis at the rate offered by the Escrow Agent during the period such amount is on
deposit with the Escrow Agent (such amount of interest, the “Accrued Interest”), and the
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Accrued Interest shall be paid to the Purchaser upon the release of the Purchase Price to the
Seller or the termination of this Agreement or the Escrow Agreement in accordance with their
respective terms. The Purchase Price shall be invested by the Escrow Agent only in the Permitted
Investments (as defined in the Escrow Agreement). All fees and expenses of the Escrow Agent shall
be paid by the Purchaser. All dividends or distributions (whether in cash, property, securities,
rights or otherwise) declared or paid with respect to the Shares after the Escrow Date and prior to
Closing (the “Distributions”) shall be (i) delivered by the Seller to the Escrow Agent
immediately following receipt thereof by the Seller and (ii) invested by the Escrow Agent in the
Permitted Investments.
| SECTION 3.2 Distributions and Accrued Interest. |
SECTION 3.2 Distributions and Accrued Interest. At Closing, (a) all Distributions
shall be payable to the Purchaser concurrently with the transfer of the Shares together with all
accrued interest thereon while held in escrow, (b) all Accrued Interest shall be paid to the
Purchaser concurrently with the payment of the Purchase Price to the Seller and (c) the Seller
shall pay to the Purchaser the amount in cash by which the pre-default accrued interest on the
Purchase Price resulting from the Financing exceeds the Accrued Interest (the “Interest Margin
Amount”) through the Closing Date. If this Agreement is terminated in accordance with its
terms, then (x) the Shares and all Distributions shall be released to the Seller, together with all
accrued interest, if any, on the Distributions while held in escrow, (y) the Purchase Price and all
Accrued Interest shall be disbursed by the Escrow Agent to the Purchaser and (z) the Seller shall
pay to the Purchaser the Interest Margin Amount through the date of termination. Notwithstanding
the foregoing, the Seller shall not be obligated to pay the Purchaser the Interest Margin Amount
until the second business day after the Purchaser has provided to the Seller a written statement
signed by an officer of the Purchaser setting forth a calculation of the Interest Margin Amount
with supporting documentation attached thereto.
| SECTION 3.3 Release from Escrow. |
SECTION 3.3 Release from Escrow. The Escrow Agent shall be authorized by the Parties
to hold and disburse the certificates representing the Shares, and hold, invest and disburse the
Purchase Price, the Accrued Interest and any Distributions and all accrued interest thereon in
accordance with the terms and provisions hereof and in the Escrow Agreement. Not later than two
business days prior to the Closing, the Purchaser and the Seller shall deliver to the Escrow Agent
the Closing Notice referred to in Section 4(b) of the Escrow Agreement authorizing the Closing
deliveries provided for herein and the release and distribution of the Escrowed Property (as
defined in the Escrow Agreement) in accordance with the Escrow Agreement and this Article 3.
ARTICLE 4
CLOSING
The Closing of the transactions contemplated by this Agreement (the “Closing”) shall
take place at the offices of Xxxxxx & Xxxxxx, L.L.P., 0000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxx, Xxxxx 00000, as soon as possible, but in no event later than two business days, after
satisfaction or waiver of the conditions set forth in Article 6 (other than those conditions that
by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of
those conditions), or at such other time or place as the Purchaser and the Seller may agree (the
“Closing Date”).
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Purchaser as follows:
| SECTION 5.1 Due Organization. |
SECTION 5.1 Due Organization. The Seller has been duly incorporated and is a validly
existing corporation in good standing under the Laws of the State of Nevada.
| SECTION 5.2 Power and Authority; Authorization; Binding Effect; Approval. |
SECTION 5.2 Power and Authority; Authorization; Binding Effect; Approval. The
Seller has all necessary power and authority to execute and deliver this Agreement and the other
Acquisition Documents to which it is or at the Closing will be a party, to consummate the
transactions contemplated hereby and thereby and to perform its obligations hereunder in accordance
with the terms of this Agreement and the other Acquisition Documents to which at the Closing it
will be a party. This Agreement and the other Acquisition Documents to which it is or at the
Closing will be a party have been duly authorized, executed and delivered by the Seller and
constitutes, or will constitute when executed and delivered by the Seller, a legal, valid and
binding obligation of the Seller enforceable against the Seller in accordance with their terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar
Laws affecting the enforcement of creditors’ rights in general and subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding in equity or at
Law).
(b) Without limiting the generality of the foregoing, the Seller’s board of directors, at a
meeting duly called and held, has unanimously (i) determined that the sale of the Shares and the
Call Option Shares by the Seller and the other transactions contemplated hereby are fair to, and in
the best interests of, the Seller and the Seller’s stockholders, (ii) approved and adopted this
Agreement and the other Acquisition Documents to which the Seller is or will be a party and the
transactions contemplated hereby and thereby, including the sale of the Shares and the Remaining
Shares not otherwise transferred or disposed of prior the delivery of the Call Option Exercise
Notice, all in accordance with the requirements of the NGCL and the Seller’s articles of
incorporation and bylaws and (iii) directed that this Agreement be submitted to the Seller’s
majority stockholder for its approval and adoption.
(c) Subject to and assuming the accuracy of the Purchaser’s representation and warranty in
Section 6.12, the only vote of holders of any class or series of capital stock of the
Seller necessary to approve this Agreement and the transactions contemplated hereby, including
the sale of the Shares and the Call Option Shares, is the affirmative vote of the holders of a
majority of the Seller Common Stock. A true and complete copy of the executed Majority Stockholder
Written Consent delivered to the Seller is attached hereto as Exhibit A, which Majority
Stockholder Written Consent has been delivered to the Seller in accordance with the requirements of
the NGCL and the Seller’s articles of incorporation and bylaws and, assuming the due execution
thereof, as represented therein, is valid, binding and is in full force and effect, subject to
termination after the date hereof as provided therein. The Majority Stockholder Written Consent
constitutes the requisite and final consent and action of holders of at least a majority of the
voting power of the Seller to take action and consummate the transactions contemplated hereby
without further approval or action, including by any other stockholder of the Seller or the Seller.
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| SECTION 5.3 Ownership of the Shares and the Call Option Shares. |
SECTION 5.3 Ownership of the Shares and the Call Option Shares. The Seller is the
record and beneficial owner of the Shares and, upon sale and delivery of the Shares to the
Purchaser and upon payment by the Purchaser to the Seller of the Purchase Price, the Seller will
convey to the Purchaser good and marketable title to the Shares, free and clear of all Encumbrances
other than those arising under federal and state securities law. As of the date hereof, the Seller
is the record and beneficial owner of the Remaining Shares, free and clear of all Encumbrances
other than those arising under federal and state securities law. There are no transfer (other than
applicable federal and state securities Laws), voting (other than as provided for herein) or other
restrictions imposed upon or with respect to the Shares or the Remaining Shares and no notices or
consents to or from any other party are required under any agreement, court order, Law or otherwise
with respect to the transfer of the Shares or the Remaining Shares hereunder. The Shares and the
Remaining Shares are not otherwise subject to any preemptive rights or rights of first refusal or
any other rights (including without limitation proxy rights or options, except as provided herein)
pursuant to any contract, arrangement or understanding entered into or acknowledged by the Seller
or its Affiliates. Except as provided herein, neither the Seller nor any of its Affiliates is a
party to any stockholder agreement, voting trust or other similar contract or agreement with
respect to the Shares or the Remaining Shares.
| SECTION 5.4 Consents and Approvals. |
SECTION 5.4 Consents and Approvals. No consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority or other Person is required to
be made or obtained by the Seller in connection with the execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby, except for (a) the
filing with the Commission of an information statement (together with any amendments thereof and
any supplements thereto, the “Information Statement”) pursuant to Regulation 14C of the
Exchange Act and the expiration of the applicable time period referred to in Regulation 14C after
the mailing of the Information Statement to the Seller’s stockholders (the “Stockholder Notice
Period”), and (b) the filing with the Commission of such reports under the Exchange Act, as may
be required in connection with this Agreement and the transactions contemplated hereby.
| SECTION 5.5 Compliance with Applicable Law; No Conflicts. |
SECTION 5.5 Compliance with Applicable Law; No Conflicts. The execution, delivery and performance by the Seller of this Agreement, the sale of the
Shares and the Remaining Shares and the consummation of the other transactions contemplated hereby
(a) will not violate any Applicable Law applicable to the Seller, or any order or decree of any
court or governmental instrumentality applicable to the Seller, any of the Seller’s Subsidiaries or
any of their property, (b) will not conflict with or result in the breach or termination of,
constitute a default under or accelerate any performance required by, any indenture, mortgage, deed
of trust, lease, agreement or other instrument to which the Seller or any of its Subsidiaries is a
party or by which the Seller, any of its Subsidiaries or any of their property is bound and (c)
will not result in a breach or violation of the charter or bylaws, or other formation documents, of
the Seller or its Subsidiaries.
| SECTION 5.6 Litigation. |
SECTION 5.6 Litigation. As of the date hereof, there are no pending actions, suits or
proceedings against or involving the Seller or any of its property, or involving any of its
Subsidiaries or any of their respective properties, that would materially and adversely affect the
ability of the Seller to perform its obligations under this Agreement, or that are otherwise
material in the context of the sale of the Shares or the Call Option Shares or the other
transaction contemplated hereby, and, to the Seller’s knowledge, no such actions, suits or
proceedings are threatened or contemplated.
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| SECTION 5.7 Brokers. |
SECTION 5.7 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the origination, negotiation or
execution of this Agreement or the other transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Seller.
Notwithstanding anything herein to the contrary, the foregoing representations and warranties
shall not apply to the Remaining Shares to the extent they are hereafter transferred, assigned or
disposed of by the Seller to any party other than the Purchaser prior to Closing.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller:
| SECTION 6.1 Due Organization. |
SECTION 6.1 Due Organization. The Purchaser has been duly incorporated and is a validly
existing corporation in good standing under the Laws of the State of Nevada.
SECTION 6.2 Power and Authority; Authorization; Binding Effect; Approvals; Opinions.
(a) The Purchaser has all necessary corporate power and authority to execute and deliver this
Agreement and the other Transaction Documents to which it is or at the Closing will be a party and
to consummate the transactions contemplated hereby and thereby and to perform
its obligations hereunder and thereunder. This Agreement, the other Transaction Documents to
which the Purchaser is or at the Closing will be a party have been duly authorized, and this
Agreement, and the other Transaction Documents to be executed and delivered at the Closing, when
signed by the Purchaser will be, duly executed and delivered by the Purchaser and constitute the
legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in
accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar Laws affecting the enforcement of creditors’ rights in general and
subject to general principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at Law).
(b) Without limiting the generality of the foregoing, a special committee of the Purchaser’s
board of directors consisting solely of independent, disinterested directors (the “Special
Committee”), at a meeting duly called and held, has unanimously (i) determined that the
purchase of the Shares by the Purchaser and the other transactions contemplated hereby together
with the Financing are fair to, and the purchase of the Shares and the other transactions
contemplated hereby together with the Financing are in the best interests of, the Purchaser and its
stockholders (other than the Seller) and (ii) approved and adopted this Agreement and the other
Transaction Documents to which it is or will be a party together with the Transaction and the
Financing, all in accordance with the requirements of the NGCL and the Purchaser’s articles of
incorporation and bylaws.
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(c) The Purchaser has received an opinion of TM Capital Corp. (which is an independent
financial advisor to the Special Committee) to the effect that, as of the date of this Agreement,
the Purchase Price to be paid by the Purchaser to the Seller for the Shares is fair, from a
financial point of view, to the stockholders of the Purchaser (other than the Seller). Such
opinion has not been withdrawn, revoked or modified. The Purchaser has provided the Seller with a
true and complete copy of such opinion.
(d) (i) The Purchaser has also received an opinion of TM Capital Corp. (“TM Capital
Solvency Opinion”) to the effect that, as of the date of this Agreement, immediately after
giving effect to the Transaction, (A) the Purchaser will be able to pay its debts as they become
due in the usual course of business, (B) the Purchaser’s total assets will be greater than or equal
to the sum of its total liabilities plus the amount that would be needed, if the Purchaser were to
be dissolved immediately after giving effect to the Transaction, to satisfy the preferential rights
upon dissolution of stockholders whose preferential rights are superior to the Seller, (C) the fair
value of the Purchaser’s assets would exceed its stated liabilities and identified and valued
contingent liabilities, and (D) the capital remaining in the Purchaser after the Transaction would
not be unreasonably small for the business in which the Purchaser is engaged, as is now conducted
and is proposed to be conducted following the consummation of the Transaction. Such opinion has not
been withdrawn revoked or modified. The Purchaser has provided the Seller with a true and complete
copy of such opinion.
(ii) In connection with the TM Capital Insolvency Opinion delivered as of the date of this
Agreement, the Purchaser provided TM Capital Corp. with financial projections attached as Schedule
II to the representation letter attached to the opinion. Such financial projections have been
reasonably prepared based on the Company’s reasonable, good faith estimates as of the date thereof
of the future financial results and condition of the Company
and as of the date thereof, the Purchaser was unaware of any event that may substantially
alter these projections. The Company has no other known material liabilities or contingent
liabilities other than those included on the balance sheet as of June 30, 2006 (or incurred in the
ordinary course thereafter) or disclosed on the Schedule I to the representation letter attached to
TM Capital Opinion. Additionally, to the best of the Purchaser’s knowledge there are no additional
contingent liabilities required to be disclosed by the Purchaser in its filings with the
Commission, except as set forth in the Purchaser’s Form 10-K for the year ended December 31, 2005
and Form 10-Q for the quarterly period ended June 30, 2006, both as filed with the Commission.
(iii) The Purchaser has received from TM Capital Corp., and has delivered to the Seller, a
reliance letter with respect to the opinion described in this Section 6.2(d).
| SECTION 6.3 Consents and Approvals. |
SECTION 6.3 Consents and Approvals. No consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority or other Person is required to
be made or obtained by the Purchaser in connection with the execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is or will become a party and the
consummation of the transactions contemplated hereby and thereby, except for (a) the filing with
the Commission of such reports under the Exchange Act, as may be required in connection with this
Agreement and the transactions contemplated hereby, (b) the consent (the “NMFS Consent”) of
the United States National Marine Fisheries Service (“NMFS”) to the Transaction with
respect to the series of approval letters and related loan and
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security agreements with the NMFS
pursuant to which the NMFS has made loans to the Purchaser and (c) notice within 30 days after the
Closing Date or the Call Option Closing Date of any changes in information with respect to the
Purchaser’s officers, directors and stockholders, including 5% or more stockholders, to the
Citizenship Approval Officer of the Maritime Administration of the United States Department of
Transportation pursuant to 46 C.F.R. 356.5(g).
| SECTION 6.4 Compliance with Applicable Law: No Conflicts. |
SECTION 6.4 Compliance with Applicable Law: No Conflicts. The execution, delivery and
performance by the Purchaser of this Agreement and the other Transaction Documents to which it is
or will be a party and the consummation of the transactions contemplated hereby and thereby (a)
will not violate any Applicable Law, or any order or decree of any court or governmental
instrumentality applicable to the Purchaser, any of the Purchaser’s Subsidiaries or any of their
property, (b) will not conflict with or result in the breach or termination of, constitute a
default under or accelerate any performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which the Purchaser or any of its Subsidiaries is a party
(including any change of control payments or other rights pursuant to any employment, change of
control, severance or other employee agreement (excluding those with the Purchaser Executive
Officers, all which have been waived) or stock option, restricted stock, stock appreciation or
other equity award or equity like award issued to any employee of the Purchaser or any of its
subsidiaries) or by which the Purchaser, any of its Subsidiaries or any of their property is bound
and (c) will not result in a breach or violation of the charter or bylaws, or other formation
documents, of the Purchaser or its Subsidiaries, other than, in the case of clause (b), any
contract, agreement or item listed on Schedule A attached hereto or, upon the exercise of
the Call Option, the vesting of an immaterial amount of stock
options issued pursuant to the Company’s 2000 Long-Term Incentive Plan.
| SECTION 6.5 Litigation. |
SECTION 6.5 Litigation. As of the date hereof, there are no pending actions, suits or
proceedings against or involving the Purchaser or any of its property, or involving any of its
Subsidiaries or any of their respective properties, that would materially and adversely affect the
ability of the Purchaser to perform its obligations under this Agreement or any of the other
Transaction Documents to which it is or will be a party, or that are otherwise material in the
context of the purchase and sale of the Shares or the Call Option Shares or the other transactions
contemplated hereby or the other Transaction Documents; and, to the Purchaser’s knowledge, no such
actions, suits or proceedings are threatened or contemplated.
| SECTION 6.6 Solvency and Surplus. |
SECTION 6.6 Solvency and Surplus. Immediately before and after the Closing and upon giving
effect to the Transaction, (i) the Purchaser will be able to pay its debts as they become due in
the usual course of business, (ii) the Purchaser’s total assets will be greater than or equal to
the sum of its total liabilities plus the amount that would be needed, if the Purchaser were to be
dissolved immediately after the Closing and giving effect to the Transaction and the Financing, to
satisfy the preferential rights upon dissolution of stockholders whose preferential rights are
superior to the Seller, (iii) the fair value of the Purchaser’s assets would exceed its stated
liabilities and identified and valued contingent liabilities; and (iv) the capital remaining in the
Purchaser after the Transaction would not be unreasonably small for the business in which the
Purchaser is engaged, as is now conducted and is proposed to be conducted following the
consummation of the Transaction.
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| SECTION 6.7 Accuracy of 1934 Act Reports. |
SECTION 6.7 Accuracy of 1934 Act Reports. Since January 1, 2003, the Purchaser has
filed all reports, schedules, forms, statements and other documents required to be filed by it with
the Commission pursuant to the reporting requirements of the Exchange Act, and the rules and
regulations promulgated thereunder (all of the foregoing filed prior to or on the date hereof and
all exhibits included therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “1934 Act Reports”).
As of the date of filing of such 1934 Act Reports, each such 1934 Act Report, as it may have been
subsequently amended by filings made by the Purchaser with the Commission prior to the date hereof,
complied in all material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder applicable to such 1934 Act Reports. None of
the 1934 Act Reports, as of the date filed and as they may have been subsequently amended by
filings made by the Purchaser with the Commission prior to the date hereof, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. As of the date hereof, the Purchaser is qualified to register the
resale of Remaining Shares on Form S-3 of the Commission.
| SECTION 6.8 Purchaser Information in Information Statement. |
SECTION 6.8 Purchaser Information in Information Statement. None of the information
supplied or to be supplied by the Purchaser in writing,
expressly for inclusion or incorporation by reference in the Information Statement, any
amendment or supplement thereto or any other documents filed with the Commission by the Seller in
connection with the transactions (“Purchaser Information”), when supplied to the Seller,
when filed with the Commission and, in case of the Information Statement, when mailed to Seller’s
stockholders, will contain any statement which, at the time and in the light of the circumstances
under which it is made, is false or misleading with respect to any material fact, or which omits to
state any material fact necessary in order to make the statements therein not false or misleading
or necessary to correct any statement in any earlier communication with respect to the same meeting
or subject matter which has become false or misleading.
| SECTION 6.9 Brokers. |
SECTION 6.9 Brokers. Except for TM Capital Corp. and Cerberus Capital Management,
L.P., no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or
commission in connection with the origination, negotiation or execution of this Agreement or the
other transactions contemplated by this Agreement based upon arrangements made by or on behalf of
the Purchaser. The Purchaser shall be solely responsible for all fees and expenses payable to or
associated with TM Capital Corp. or Cerberus Capital Management, L.P.
| SECTION 6.10 Cerberus Commitment Letter. |
SECTION 6.10 Cerberus Commitment Letter. The Purchaser has provided to
Seller a true, complete and correct copy of the executed Cerberus Commitment Letter. The Cerberus
Commitment Letter is a legal, valid and binding obligation of the Purchaser. The Purchaser has
fully paid any and all commitment fees or other fees, if any, required by the Cerberus Commitment
Letter to be paid on or before the date of this Agreement. The Cerberus Financing Commitment has
not been amended or modified prior to the date of this Agreement and the commitment contained in
the Cerberus Commitment Letter has not been withdrawn or rescinded in any respect. The Cerberus
Commitment Letter is in full force and effect. Except for the payment of customary fees, there are
no conditions precedents or other contingencies related to the funding of the full amount of the
Cerberus Commitment Letter, other than as expressly set forth in the Cerberus Commitment Letter. No
event has occurred which, with or without notice,
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lapse of time or both, would constitute a default
or breach on the part of the Purchaser or, to the knowledge of the Purchaser, Ableco Finance LLC,
under the Cerberus Commitment Letter. The Purchaser has no reason to believe that any of the
conditions to the Financing contemplated by the Cerberus Commitment Letter will not be satisfied or
that the Financing will not be made available to Purchaser on the Closing Date.
| SECTION 6.11 No Resale. |
SECTION 6.11 No Resale. The Purchaser is acquiring the Shares, and if it
acquires the Call Option Shares it will be acquiring them, for its own account and not with a view
to, or in connection with, or with any present intention of, any resale or other disposition
thereof.
| SECTION 6.12 No Ownership of Seller Common Stock. |
SECTION 6.12 No Ownership of Seller Common Stock. Except for Xxxxx X. Xxxxxx and
Xxxxxxx XxXxxxx, neither the Purchaser, nor to the Purchaser’s knowledge, any of its directors or
executive officers beneficially owned any shares of the Seller Common Stock, as of the date hereof.
ARTICLE 7
COVENANTS
SECTION 7.1 Acquisition Proposals.
(a) From the date hereof until the earlier of the Closing or the termination of the Agreement
pursuant to Article 10, the Seller shall not, nor shall it authorize or permit any of its
Subsidiaries or any of their respective Affiliates or Representatives to, directly or indirectly
(i) solicit, initiate, encourage or induce the making, submission or announcement of any
Acquisition Proposal, or (ii) participate in any discussions or negotiations regarding, or furnish
to any Person any information with respect to, or take any other action to facilitate any inquiries
or the making of any proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal; provided, however, that this Section 7.1(a) shall not
prohibit the Seller from entering into a confidentiality agreement or discussions or negotiations
with, or disclosing the terms of this Agreement, including the Purchase Price, to any Person in
response to a bona fide unsolicited written Acquisition Proposal submitted by such Person (and not
withdrawn), and, upon the request of the Seller, the Purchaser shall, and it shall cause its
officers and Representatives to, cooperate and respond accurately, promptly and fully to any
inquiries or requests for documents by such Person, if (A) none of the Seller, any of its
Subsidiaries or any of their respective Affiliates or Representatives shall have violated any of
the restrictions set forth in this Section 7.1, (B) the Seller’s board of directors determines in
good faith (after consultation with its outside legal counsel), that there is a substantial
likelihood the failure to take such action would be inconsistent with its fiduciary duties under
Applicable Law, and (C) (1) at least two business days prior to furnishing (or requesting the
Purchaser to furnish) any such information to, or entering into discussions or negotiations with,
such Person, the Seller gives the Purchaser written notice of the identity of such Person and of
the Seller’s intention to furnish information (or request Purchaser to furnish) to, or enter into
discussions or negotiations with, such Person, and (2) the Purchaser receives from such Person an
executed confidentiality agreement containing terms no less favorable to the Purchaser than the
least favorable confidentiality
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agreement entered into by the Purchaser with any other potential
purchaser of the Shares (such a Acquisition Proposal in compliance with the foregoing provision is
referred to herein as a “Qualified Transaction Proposal”). In addition to the foregoing
obligations of the Seller, as promptly as practicable, and in any event within one business day
after any of the executive officers of the Seller becomes aware thereof, the Seller shall advise
the Purchaser of any request received by the Seller for information which the Seller reasonably
believes could lead to a Qualified Transaction Proposal, the material terms and conditions of such
request or Qualified Transaction Proposal, and the identity of the Person making any such request
or Qualified Transaction Proposal. The Seller shall keep the Purchaser informed promptly of
material amendments or modifications to any such request or Qualified Transaction Proposal. All
such disclosures shall be subject to a confidentiality agreement dated April 12, 2006 between the
Purchaser and the Seller.
(b) Except as permitted by this Section 7.1(b), neither the Seller’s board of directors nor
any committee thereof shall (i) withdraw or modify its approval of this Agreement and the sale of
the Shares and the Call Option Shares, (ii) approve or recommend to the Seller’s
stockholders any Qualified Transaction Proposal, or (iii) cause the Seller or any of its
Subsidiaries to enter into an agreement with respect to any Qualified Transaction Proposal,
provided that the foregoing restrictions shall not apply if the Seller’s board of directors
determines in good faith that (A) such Qualified Transaction Proposal is a Superior Proposal and
(B) (after consulting with its outside legal counsel) the failure to take such action would be
inconsistent with its fiduciary duties to the Seller’s stockholders under Applicable Law.
(c) Notwithstanding any other provision of this Agreement to the contrary, if the Seller’s
board of directors determines in good faith that a Qualified Transaction Proposal is a Superior
Proposal in conformity with Section 7.1(b), the Seller’s board of directors may terminate this
Agreement subject to the Seller’s obligation under Section 10.3 to reimburse the Purchaser for its
actual out-of-pocket expenses, up to a maximum of $1,300,000.
(d) The Seller shall, and shall cause its Subsidiaries and their respective Representatives
to, immediately cease any and all existing activities, discussions or negotiations with any Persons
conducted heretofore with respect to any Acquisition Proposal and will use their respective
reasonable best efforts to enforce any confidentiality or similar agreement relating to any such
Acquisition Proposal. Without limiting the foregoing, it is agreed that any violation of the
restrictions set forth in this Section 7.1, by the Seller, any of the Seller’s Subsidiaries or any
of their respective Affiliates or Representatives shall be deemed to be a breach of this Section
7.1 by the Seller.
| SECTION 7.2 No Acquisition of Common Stock. |
SECTION 7.2 No Acquisition of Common Stock. From the date hereof until the earlier to
occur of the date of the termination of this Agreement pursuant to Article 10 or the date of the
expiration of the Call Option Exercise Period, neither the Seller nor any of its Affiliates shall,
without the prior written consent of the Purchaser, in any manner acquire, agree to acquire or make
any proposal to acquire, directly or indirectly, any shares of Common Stock, whether such agreement
or proposal is with the Purchaser or any of its Subsidiaries or with a third party; provided,
however, the foregoing shall not preclude the exercise by Xxxxx X. Xxxxxx of any stock options he
holds in the Purchaser.
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| SECTION 7.3 Information Statement. |
SECTION 7.3 Information Statement. As soon as practicable, but no later than 10
business days after the date hereof, the Seller shall prepare and file with the Commission a
preliminary Information Statement. Prior to filing with the Commission the preliminary Information
Statement and any amendment thereto, the Seller shall provide the Purchaser with a copy of the
proposed filing to review and comment thereon. Following the initial filing of the preliminary
Information Statement, the Seller shall (a) diligently inquire with the Commission to determine
whether the Commission will furnish comments with respect to the Information Statement, (b) respond
as promptly as practicable to any comments made by the Commission with respect to the Information
Statement, (c) promptly supply the Purchaser with copies of all correspondence between the Seller
or any of its Representatives, on the one hand, and the Commission or its staff, on the other hand,
with respect to the Information Statement, and (d) cause the definitive Information Statement to be
mailed to its stockholders at the earliest practicable date following the clearance of the
Information Statement by the Commission. The Purchaser shall at all times cooperate and
provide the Seller in a timely manner comments to all proposed filings submitted to it,
provide the Seller with information as is necessary for the Seller to prepare, complete and file
the preliminary Information Statement and any amendments or supplements thereto, including the
definitive Information Statement, with the Commission and respond to any requests or comments made
by the Commission in connection therewith.
| SECTION 7.4 Reports Under the Exchange Act. |
SECTION 7.4 Reports Under the Exchange Act. From the Closing Date until the date on
which all of the shares of Common Stock held by the Seller immediately following the Closing Date
(the “Remaining Shares”) become freely transferable under Rule 144(k) promulgated under the
Securities Act, the Purchaser agrees to use its reasonable best efforts to:
(a) make and keep public information available, as those terms are understood and defined in
the General Instructions to Form S-3, or any successor or substitute form, and in Rule 144, and
file in a timely manner all forms, reports and other documents that it is required to file with the
Commission in order to continue to be qualified to register its securities on Form S-3, or any
successor or substitute form,
(b) file with the Commission all reports and other documents required to be filed by an issuer
of securities registered under Sections 13 or 15(d) of the Exchange Act,
(c) if such filings are not available via XXXXX, to furnish to the Seller as long as the
Seller owns Remaining Shares prior to the applicable termination date described above, a copy of
the most recent annual or quarterly report of the Purchaser, and such other reports and documents
so filed by the Purchaser under Sections 13 or 15(d) of the Exchange Act as may be reasonably
requested in availing the Seller of any rule or regulation of the Commission permitting the selling
of any of the Remaining Shares without registration,
(d) exclude the Seller and the Remaining Shares together with any subsequent transferee or
holder thereof from any rights plan, charter or bylaw amendment or board resolution or any similar
action that would prohibit, frustrate or adversely affect the ability of the Seller to sell or
distribute any of the Remaining Shares, and
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(e) cause its officers and employees as designated by the Seller during normal business hours
(except for travel) to cooperate and assist the Seller in the sale of the Remaining Shares,
including promptly, accurately and fully responding to the questions and due diligence inquiries,
making management presentations and participating in investor meetings at the Company’s offices or
at such other locations as may be reasonably designated by the Seller; provided that the foregoing
shall not interfere unreasonably with the normal business and operations of the Purchaser.
| SECTION 7.5 Directors’ and Officers’ Insurance and Indemnification. |
SECTION 7.5 Directors’ and Officers’ Insurance and Indemnification. After the Closing
Date, the Purchaser shall maintain, directors’ and officers’ liability insurance covering, for a
period of six years after the Closing Date, Xxxxx X. Xxxxxx and Xxxxxxx XxXxxxx with respect to
claims arising from facts or events that occurred on or before the Closing Date, on terms and
conditions no less favorable than those currently in effect for such directors on the date of this Agreement.
| SECTION 7.6 Consents and Approvals. |
SECTION 7.6 Consents and Approvals. Each of the Parties shall use reasonable best
efforts to obtain as promptly as practicable all consents, authorizations, approvals and waivers
required to be obtained by it in connection with the consummation of the transactions contemplated
by this Agreement, provided, however, that except for filing and administrative
fees, neither Party shall be obligated to pay any consideration therefor to the third party from
whom such consents are requested.
| SECTION 7.7 Reasonable Best Efforts; Cooperation. |
SECTION 7.7 Reasonable Best Efforts; Cooperation. Upon the terms and subject to the
conditions herein provided, each of the Parties agrees to use reasonable best efforts to take or
cause to be taken all action, to do or cause to be done, and to assist and cooperate with the other
Party in doing, all things necessary, proper or advisable under Applicable Laws and regulations to
consummate and make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including without limitation using reasonable best efforts to cause
the representations and warranties herein made with respect to themselves herein to remain true and
correct through the Closing Date.
| SECTION 7.8 Consummation of Financing. |
SECTION 7.8 Consummation of Financing. The Purchaser shall use its reasonable best
efforts to arrange and obtain as promptly as practicable (and in any event within 45 days of the
date hereof) the proceeds of the Financing on the terms and conditions described in the Cerberus
Commitment Letter, including using reasonable best efforts to (a) negotiate the Financing
Transaction Documents, (b) to satisfy all terms, conditions, representations and warranties to the
consummation and funding thereof in such definitive agreements and (c) enforce its rights under the
Cerberus Commitment Letter. Purchaser shall promptly forward to the Seller a copy of all Financing
Documents prior to the closing and the execution thereof together with final signed copies thereof.
In the event any portion of the Financing becomes unavailable on the terms and conditions
contemplated in the Cerberus Commitment Letter, the Purchaser shall use its reasonable best efforts
to arrange to obtain any such portion from alternative sources as promptly as practicable following
the occurrence of such event. The Purchaser shall give the Seller prompt notice of any breach by
any party of the Cerberus Commitment Letter or any termination of the Cerberus Commitment Letter.
The Purchaser shall keep the Seller reasonably informed on a prompt and current basis in reasonable
detail of the status of its efforts to arrange the Financing and prior to the consummation of the
Financing, the Purchaser shall not permit any material amendment or modification to be made to, or
any material waiver of any provision or remedy under, the Cerberus Commitment Letter without first
obtaining the Seller’s prior written consent.
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| SECTION 7.9 Publicity. |
SECTION 7.9 Publicity. The Parties agree to cooperate and consult with each other
before issuing, and provide each other the opportunity to review and comment upon, any press
release or written public statement with respect to this Agreement or the transactions contemplated
hereby and, except for any press releases and written public statements the issuance of which may
be required by Applicable Law or any rules or regulations of any national securities exchange, will
not issue any such press release or written public statement prior to such consultation.
SECTION 7.10 Post-Closing Purchaser Registration Statement and Restrictions on Omega’s
Sale of its Stock. Registration Statement
(i) As promptly as practicable after the date hereof, but no less than 20 business days after
the date hereof, the Purchaser shall file, a “shelf” registration statement (the “Registration
Statement”) on Form S-3 (or such successor or other appropriate form) pursuant to Rule 415 (or
similar rule that may be adopted by the Commission under the Securities Act) for the resale of the
Remaining Shares. The Purchaser shall use its reasonable best efforts to cause the Registration
Statement to become effective as soon as practicable (with a goal of having it effective as of the
Closing) and to keep the Registration Statement effective for a period (the “Registration
Period”) of 390 days after the Closing or, if shorter, until the earlier of (A) the date when
all the Remaining Shares have been sold pursuant to the Registration Statement, (B) the first date
on which the Seller may sell all of the Remaining Shares held by it without registration pursuant
to Rule 144 of the Commission (or any successor rule) within a three-month period or (C) the Call
Option Closing Date.
(ii) During the Registration Period, the Purchaser will amend or supplement the Registration
Statement and any prospectus contained therein to the extent necessary to comply with the
Securities Act and any applicable state securities statute or regulations, including with respect
to any change in the method of distribution of the Remaining Shares by the Seller. The Purchaser
will also promptly provide the Seller with as many copies of the prospectus contained in the
Registration Statement as the Seller may reasonably request.
(iii) During the Registration Period, the Purchaser shall file in a timely manner all
documents that the Purchaser is required to file under the Exchange Act and shall furnish to the
Seller upon reasonable request: (A) any such documents filed by the Purchaser with the Commission;
(B) any other information concerning the Purchaser that is generally available to the public; and
(C) an adequate number of copies of the prospectuses relating to the resale of the Remaining Shares
to supply to any party requiring such prospectuses.
(iv) The Purchaser shall bear all Registration Expenses, provided, however, that the Purchaser
shall have no obligation to pay or otherwise bear any portion of the Selling Expenses attributable
to the Remaining Shares being offered and sold by the Seller.
(v) Capitalized terms used in this Section 7.10 and not otherwise defined herein shall have
the meaning given thereto in the Amended and Restated Registration Rights Agreement. Sections 5(c)
through (j), 6, 7, 8 and 12(a) of the Amended and Restated Registration Rights Agreement shall
apply to the Registration Statement and Remaining Shares hereunder as if it were a registration
made pursuant to the Amended and Restated Registration
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Rights Agreement and no other provisions thereof shall apply hereto and the Registration Statement shall not be considered one of the
Seller’s demand registrations under Section 2.1 of the Amended and Restated Registration Rights
Agreement.
(b) Restriction on Omega Stock Sales. During the Registration Period,
without the Seller’s consent, the Purchaser shall not sell, make any short sale of, loan,
grant any option for the purchase of (other than pursuant to employee benefit plans), effect any
public sale or distribution of or otherwise dispose of any of its equity securities in public sales
except as required under the Amended and Restated Registration Rights Agreement or pursuant to
registrations on Form S-8 or solely with respect to the offering of securities in connection with a
transaction that requires the use of a Form S-4 that is not an offering of securities for cash.
ARTICLE 8
CONDITIONS TO CLOSING
| SECTION 8.1 Conditions to Obligations of the Seller. |
SECTION 8.1 Conditions to Obligations of the Seller. The obligation of the Seller to
consummate the transactions contemplated hereunder is subject to the satisfaction of the following
conditions (any of which may be waived by the Seller):
(a) the Purchaser shall have delivered, or if the Purchase Price has been deposited with the
Escrow Agent, caused the Escrow Agent to have delivered, to the Seller the Purchase Price by wire
transfer of immediately available funds to an account or accounts designated by Seller, by notice
to Purchaser and the Escrow Agent;
(b) (i) the representations and warranties of the Purchaser set forth in this Agreement and in
all documents delivered to the Seller hereunder and thereunder shall be true and correct in all
material respects as of the Closing Date as though made on and as of the Closing Date; (ii) no
order, writ, injunction or decree shall have been entered and be in effect that restrains, enjoins
or invalidates, or otherwise materially adversely affects the transactions contemplated by this
Agreement; and (iii) the Purchaser shall have performed each of the obligations required to be
performed by it under this Agreement on or prior to the Closing Date;
(c) the Stockholder Notice Period shall have expired;
(d) the NMFS Consent shall have been obtained and copy thereof provided to the Seller;
(e) the Purchaser shall have delivered to the Seller a certificate of the Chief Executive
Officer of the Purchaser confirming compliance with the conditions set forth in Section 8.1(b);
(f) the Purchaser shall have delivered to the Seller a Certificate of the Secretary or
Assistant Secretary of the Purchaser, together with true and correct copies of the Purchaser’s
articles of incorporation and bylaws of the Purchaser, and all amendments thereto, true and correct
copies of the resolutions of the Purchaser’s board of directors and the Special Committee
authorizing or ratifying the execution, delivery and performance of this Agreement, and the names
of the officer or officers of the Purchaser authorized to sign this Agreement and the other
Transaction Documents to which Purchaser is a party, together with a sample of the true signature
of each such officer;
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(g) the Purchaser’s counsel (which may include Xxxx X. Held, the Purchaser’s Executive Vice
President and General Counsel, the law firm of Xxxx Xxxx Peek Xxxxxxxx and Xxxxxx, and/or the law
firm of Liskow & Xxxxx) shall have delivered its legal opinion in the form of Exhibit D
annexed hereto;
(h) TM Capital Corp. shall have delivered to the Purchaser a certificate in which it shall
have confirmed the TM Capital Solvency Opinion as of the Closing Date and the Seller’s right to
continue to rely thereon; provided, however, that if TM Capital Corp. is unwilling
or unavailable to deliver such certificate, the Purchaser shall use its reasonable best efforts to
engage another investment banking firm and provide it with the necessary background materials for
the purposes of delivering such certificate; and
(i) the Purchaser shall have delivered to the Seller such other documents and instruments as
may be reasonably required to consummate the transactions contemplated by this Agreement and to
comply with the terms hereof.
| SECTION 8.2 Conditions to Obligations of the Purchaser. |
SECTION 8.2 Conditions to Obligations of the Purchaser. The obligation of the Purchaser
to consummate the transactions contemplated hereunder is subject to the satisfaction of the
following conditions (any of which may be waived by the Purchaser):
(a) the Financing contemplated by the Cerberus Commitment Letter shall have been consummated;
(b) the Seller shall have delivered, or caused the Escrow Agent to have delivered to the
Purchaser original stock certificates representing the Shares, together with such instruments of
assignment, conveyance and transfer as Purchaser may deem necessary or desirable, duly executed by
the Seller;
(c) (i) the representations and warranties of the Seller set forth in this Agreement and in
all documents delivered to the Purchaser hereunder and thereunder shall be true and correct in all
material respects as of the Closing Date as though made on and as of the Closing Date; (ii) no
order, writ, injunction or decree shall have been entered and be in effect that restrains, enjoins
or invalidates, or otherwise materially adversely affects the transactions contemplated by this
Agreement; and (iii) the Seller shall have performed each of the obligations required to be
performed by it under this Agreement on or prior to the Closing Date;
(d) the Stockholder Notice Period shall have expired;
(e) the NMFS Consent shall have been obtained;
(f) the Seller shall have delivered to the Purchaser a certificate of the Chief Executive
Officer of the Seller confirming compliance with the conditions set forth in Section 8.2(c);
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(g) the Seller shall have delivered to the Purchaser a Certificate of the Secretary or
Assistant Secretary of the Seller, together with true and correct copies of the Seller’s articles
of incorporation and bylaws, and all amendments thereto, true and correct copies of the
resolutions of the Seller’s board of directors and stockholders authorizing or ratifying the
execution, delivery and performance of this Agreement, and the names of the officer or officers of
the Seller authorized to sign this Agreement, together with a sample of the true signature of each
such officer;
(h) the Seller’s counsel (which may include the law firms of Xxxxx Xxxxxx Xxxxxx LLP and
Xxxxxxxx and Wedge) shall have delivered its legal opinion in the form of Exhibit E annexed
hereto;
(i) TM Capital Corp. shall have delivered to the Purchaser a certificate in which it shall
have confirmed the TM Capital Solvency Opinion as of the Closing Date and the Seller’s right to
continue to rely thereon; provided, however, that if TM Capital Corp. is unwilling
or unavailable to deliver such certificate, the Purchaser shall use its reasonable best efforts to
engage another investment banking firm and provide it with the necessary background materials for
the purposes of delivering such certificate;
(j) the Seller shall have delivered to the Purchaser resignations of Xxxxx X. Xxxxxx and
Xxxxxxx XxXxxxx, dated the Closing Date and in the form attached as Exhibit F; and
(k) the Seller shall have delivered to the Purchaser such other documents and instruments as
may be reasonably required to consummate the transactions contemplated by this Agreement and to
comply with the terms hereof.
ARTICLE 9
FURTHER AGREEMENTS
SECTION 9.1 Voting.
(a) The Seller and the Purchaser agree that at all times prior to the Closing, the Purchaser
shall have no rights as a stockholder with respect to the Subject Shares by virtue of this
Agreement or otherwise, and all such rights, including the right to vote the Subject Shares, shall
remain with the Seller.
(b) Provided that the Purchaser is not then in material breach of any provision of this
Agreement or the other Acquisition Documents, during the period from the Closing to the occurrence
of a Voting Agreement Termination Event, in the event that any action is submitted to the holders
of Common Stock for their approval, whether at a meeting or by written consent, the Seller will,
subject to Section 9.1(b) below, unless otherwise approved in writing in advance by the Purchaser,
cause to be voted all shares of Common Stock as to which the Seller has the right to vote or direct
the vote (the “Voting Securities”) in favor of the directors nominated by the Purchaser’s
board of directors or a committee thereof and in favor of all actions approved and recommended by
the Purchaser’s board of directors; provided, however, that this Section 9.1 shall
not apply to any merger, consolidation, stock exchange, asset sale, dissolution, recapitalization,
restructuring, charter amendment or similar transaction the effect of which will
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cause the Seller
to receive less than the Call Option Price in immediately available funds. The
Seller hereby appoints the Chief Executive Officer and the Chief Financial Officer of the
Purchaser, acting severally, as its proxy (the “Proxy”), with full power of substitution,
in the name, place and stead of the Seller, to vote all Voting Securities at any such meeting (and
at any adjournment or adjournments thereof) or with respect to any such written consent in the
manner described in the preceding sentence; provided that upon the occurrence of a Voting Agreement
Termination Event, the Proxy shall terminate and no longer be effective. The Seller agrees that the
Proxy is coupled with an interest and shall be irrevocable, except as provided herein.
(c) No more than 30 days and no less than 20 days prior to any vote of the Purchaser’s
stockholders or the solicitation of any written consent of the Purchaser’s stockholders, the
Purchaser shall provide to the Seller a written certificate (the “Voting Agreement
Certificate”) executed by the Chief Executive Officer and President of the Purchaser or the
Executive Vice President and Chief Financial Officer of the Purchaser certifying that a Voting
Agreement Termination Event has not occurred and, upon request, and providing copies of the
applicable resolutions of the Purchaser’s board of directors or committee thereof, as applicable,
and supporting calculations. If, within 10 days after the date of the Purchaser’s delivery of the
Voting Agreement Certificate, the Seller determines in good faith that a Voting Agreement
Termination Event has occurred, the Seller shall give written notice to the Purchaser within such
10-day period specifying in reasonable detail the Seller’s basis that a Voting Agreement
Termination Event has occurred, including relevant facts, circumstances, events or calculations.
The failure by the Seller to so express such determination and provide such notice within such
10-day period will constitute the acceptance of the Voting Agreement Certificate and the Proxy may
be exercised as provided in Section 9.1(b). The Purchaser and the Seller shall attempt in good
faith to resolve any disagreement between them with respect to occurrence or non-occurrence of a
Voting Agreement Termination Event within five days after the giving of notice by the Seller to the
Purchaser of such disagreement. If the Purchaser and the Seller are unable to resolve any
disagreement between them with respect to occurrence or non-occurrence of a Voting Agreement
Termination Event within such five-day period the Proxy shall be terminated and, in addition to any
other remedy available at Law or in equity, the Purchaser or the Seller shall be entitled to seek
specific performance or injunctive relief in the courts of the State of Nevada without posting a
bond, or other security, and without the necessity of proving actual damages. The prevailing party
shall be awarded reasonable attorneys’ fees, expert and non-expert witness costs and expenses
incurred in connection with any such proceeding. If the Purchaser is the prevailing party in such
proceeding, the Proxy will be reinstated in accordance with its terms.
| SECTION 9.2 Call Option. Exercise of Call Option. |
SECTION 9.2 Call Option. Exercise of Call Option. Subject to the terms and
provisions hereof (including the conditions in Section 9.2(b) which must be satisfied or waived as
of the Call Option Closing Date) and so long as the Purchaser is not in default and has not
breached this Agreement or any of the other Acquisition Documents, the Purchaser shall have the
right and option (the “Call Option”) to purchase all (but not less than all) of the
Remaining Shares held by the Seller at the time of the exercise thereof at a purchase price of
$4.50 per share (the “Call Option Purchase Price”) payable in cash on the Call Option
Closing Date against the delivery of the share certificates for the Call Option Shares, duly
endorsed for transfer, free and clear of Encumbrances other than those due to federal and state
securities laws. At any time after the
date 270 days after the Closing Date and prior to the date 390 days after the Closing Date
(the
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“Call Option Exercise Period”), the Purchaser may exercise on a single occasion the
Call Option by written notice of exercise (the “Call Option Exercise Notice”) in the form
of Exhibit G delivered to the Seller two business days in advance of the closing date
therefor (the “Call Option Closing Date”). For avoidance of doubt, at all times prior to
the delivery of the Call Option Exercise Notice to the Seller in accordance with the foregoing (and
at any time following the delivery of the Call Option Exercise Notice if the Call Option Closing
does not occur within two business days thereafter due to any reason other than a breach by
Seller), the Seller shall have the right and be free to sell any or all of the Remaining Shares at
such times and in such manner as it may determine, free and clear of the Call Option and upon any
such disposition of the Remaining Shares, the Remaining Shares shall be free and clear of the Call
Option and the Call Option shall no longer be applicable thereto.
(b) Call Option Conditions/Closing Deliveries.
(i) The obligation of the Purchaser to consummate the purchase of the Call Option Shares
pursuant to a Call Option Exercise Notice shall be subject to the satisfaction of the following
conditions (any of which may be waived by the Purchaser): (A) the Seller shall have delivered a
certificate in the form of Exhibit H attached hereto, signed by an officer of the Seller,
(B) the Seller shall have delivered a legal opinion from its counsel with respect to the matters
set forth in paragraphs 1, 2(a), 4, 5 and 6 of such certificate and otherwise in form substantially
similar to Exhibit E attached hereto, (C) no order, writ, injunction or decree shall have
been entered and be in effect that restrains, enjoins or invalidates, or otherwise materially
adversely affects such transaction, (D) the Purchaser shall have received an opinion of TM Capital
Corp. or any investment banking firm reasonably acceptable to the Purchaser to the effect that, as
of the Call Option Closing Date, immediately after giving effect to the Call Option and any
associated financing and other transactions (collectively, the “Call Option Transaction”),
(I) the Purchaser will be able to pay its debts as they become due in the usual course of business,
(II) the Purchaser’s total assets will be greater than or equal to the sum of its total liabilities
plus the amount that would be needed, if the Purchaser were to be dissolved immediately after
giving effect to the Call Option Transaction, to satisfy the preferential rights upon dissolution
of stockholders whose preferential rights are superior to the Seller, (III) the fair value of the
Purchaser’s assets would exceed its stated liabilities and identified and valued contingent
liabilities and (IV) the capital remaining in the Purchaser after the Call Option Transaction
would not be unreasonably small for the business in which the Purchaser is engaged, as is then
conducted and is proposed to be conducted following the consummation of the Call Option Transaction
and (E) the Seller shall deliver to the Purchaser the original stock certificates representing the
Call Option Shares, free and clear of all Encumbrances other than those due to federal and state
securities laws, together with such instruments of assignment, conveyance and transfer as the
Purchaser may deem necessary or desirable, duly executed by the Seller.
(ii) The obligation of the Seller to consummate the sale of Call Option Shares pursuant to a
Call Option Exercise Notice shall be subject to the satisfaction of the following conditions (any
of which may be waived by the Seller): (A) the Purchaser shall have delivered a certificate in the
form of Exhibit I attached hereto, signed by an officer of the Purchaser, (B) the Purchaser
shall have delivered a legal opinion from its counsel (which may include Xxxx X. Held, the
Purchaser’s Executive Vice President and General Counsel, the law
firm of Xxxx Xxxx Peek Xxxxxxxx and Xxxxxx, and/or the law firm of Liskow & Xxxxx) with
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respect to
the matters set forth in paragraphs 1, 2(a), 3, 4 and 5 of such certificate and otherwise in form
substantially similar to Exhibit D attached hereto, (C) no order, writ, injunction or
decree shall have been entered and be in effect that restrains, enjoins or invalidates, or
otherwise materially adversely affects such transaction, (D) the Purchaser shall have delivered to
the Seller a reliance letter from the issuer of the opinion referred to in Section 9.2 (b)(i)(D)
allowing Seller to rely on such opinion in all respects, which reliance letter shall be
substantially similar to the reliance letter previously given to the Seller by TM Capital Corp.,
and (E) the Purchaser shall deliver to the Seller the Call Option Purchase Price by wire transfer
of immediately available funds to an account or accounts designated by Seller, by notice to
Purchaser, not later than one business day prior to the Call Option Closing Date .
(iii) At the closing of the Call Option (the “Call Option Closing”), the Purchaser
shall retire the Call Option Shares, restoring them to the status of authorized but unissued shares
of Common Stock.
| SECTION 9.3 Cooperation with Financial Reporting. |
SECTION 9.3 Cooperation with Financial Reporting. From the Closing Date, the
Purchaser shall, and shall cause its Affiliates and Representatives to, provide the Seller such
financial records and other information related to the Purchaser to enable the Seller to complete
its legal, regulatory, stock exchange and financial reporting requirements in connection with its
ownership of the Common Stock, including but not limited to: (a) reasonably cooperate with the
Seller’s requests in the preparation of the Seller’s financial statements determined by the Seller
to be necessary to meet its reporting obligations in connection with its ownership of the Common
Stock; (b) furnish to the Seller drafts of the Purchaser’s filings on Form 10-K and Form 10-Q with
the Commission, and such other reports, financial information and documents as the Seller may
reasonably request; and (c) furnish to the Seller such other information requested by the Seller in
connection with any regulatory inquiries as they pertain to the Purchaser or the Seller’s ownership
of the Common Stock.
ARTICLE 10
TERMINATION
| SECTION 10.1 Termination. |
SECTION 10.1 Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) by mutual written consent of the Purchaser and the Seller;
(b) by the Purchaser or the Seller, if an order has been entered by a Governmental Authority
restraining, enjoining or otherwise prohibiting the consummation of the sale of the Shares and such
order is final and non-appealable;
(c) by the Purchaser or the Seller if the Closing does not occur on or before the
90th day after the execution and delivery of this Agreement (which 90-day period shall
automatically be extended for up to an additional 45 days for a total of up to 135 days if the
Seller has not received clearance of the Information Statement by the Commission), unless the
failure to consummate the Closing is due to the failure of the terminating party to perform any of
its obligations under this Agreement to the extent required to be performed by it on or prior to
the Closing Date;
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(d) by the Purchaser (provided that the Purchaser is not then in material breach of any
provision of this Agreement), if (i) the Seller’s board of directors has withdrawn or modified or
changed in a manner adverse to the Purchaser, its approval of this Agreement or the sale of the
Shares, or has approved an Acquisition Proposal (other than this Agreement and related sale of the
Shares), (ii) the Seller or any of its Subsidiaries accepts a written offer or otherwise enters
into an agreement to consummate or consummates a Acquisition Proposal (other than this Agreement
and related sale of the Shares), or (iii) the Seller fails to perform in any material respect its
obligations under Section 7.1 ;
(e) by the Purchaser (provided that the Purchaser is not then in material breach of any
provision of this Agreement), if there has been a material violation or breach by the Seller of any
covenant, representation or warranty contained in this Agreement which has prevented the
satisfaction of any condition to the obligations of the Purchaser at the Closing, and such
violation or breach has not been waived by the Purchaser or, in the case of a covenant breach,
cured by the Seller within ten days after written notice thereof from the Purchaser;
(f) by the Seller (provided that the Seller is not then in material breach of any provision of
this Agreement), if there has been a material violation or breach by the Purchaser of any covenant,
representation or warranty contained in this Agreement which has prevented the satisfaction of any
condition to the obligations of the Seller at the Closing, and such violation or breach has not
been waived by the Seller or, in the case of a covenant breach, cured by the Purchaser within ten
days after written notice thereof from the Seller;
(g) by the Seller (provided that the Seller is not then in material breach of any provision of
this Agreement), if within 45 days of the execution and delivery of this Agreement, (i) the
Financing contemplated by the Cerberus Commitment Letter has not been consummated, (ii) Purchase
Price has not been deposited by the Purchaser with the Escrow Agent, or (iii) the NMFS Consent has
not been obtained; or
(h) by the Seller (provided that the Seller is not then in material breach of any provision of
this Agreement), pursuant to the terms and conditions of Section 7.1(c).
| SECTION 10.2 Procedure and Effect of Termination. |
SECTION 10.2 Procedure and Effect of Termination. In the event of termination of the
transactions contemplated hereby pursuant to Section 10.1, written notice thereof shall forthwith
be given to the other Party to this Agreement, and this Agreement shall terminate, the transactions
contemplated hereby shall be abandoned without further action by either of the Parties, and no
Party shall have any liability or further obligation under this Agreement, except that the
obligations set forth in this Section 10.2, Section 10.3, Section 10.4, Section 10.5 and Article
12 shall survive any termination and remain in full force and effect; provided, that, if this
Agreement is validly terminated pursuant to Section 10.1(e) or Section 10.1(f), such termination
shall not affect any right or remedy which has accrued hereunder or
under Applicable Law prior to or on account of such termination, and the
provisions of this Agreement shall survive such termination to the extent required so that each
Party may enforce all rights and remedies available to such party hereunder or under Applicable Law
in respect of such termination and so that any Party responsible for any such breach or
nonperformance of its obligations hereunder
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prior to termination shall remain liable for the
consequences therefor. If this Agreement is terminated as provided herein, upon request therefor,
each Party shall redeliver all documents, work papers and other material of any other Party
relating to the transactions contemplated hereby, whether obtained before or after the execution
hereof, to the Party furnishing the same. Upon written notice of termination in accordance with
this Section 10.2, either Party may give the Escrow Agent the Termination Notice provided for in
the Escrow Agreement. If a Party receives a Termination Notice, it may at any time within ten days
thereafter give the Escrow Agent a Termination Objection Notice, as defined in the Escrow
Agreement, stating that it disputes the right of the Party giving the Termination Notice to
terminate this Agreement or if it has a claim against the terminating Party for material breach of
this Agreement.
| SECTION 10.3 Purchaser’s Remedy |
SECTION 10.3 Purchaser’s Remedy If the Purchaser terminates this Agreement pursuant
to Section 10.1(d) or (e) or the Seller terminates this Agreement pursuant to Section 10.1(h), the
Seller shall reimburse the Purchaser for its actual out-of-pocket expenses incurred in connection
with the Transaction up to maximum amount of $1,300,000 upon submission by the Purchaser to the
Seller of supporting documentation for such expenses. This right shall be in addition to any other
right or remedy that the Purchaser may have available at law or equity.
| SECTION 10.4 Seller’s Remedy. |
SECTION 10.4 Seller’s Remedy. If the Seller terminates this Agreement pursuant to
Section 10.1(f) or (g), the Purchaser shall reimburse the Seller for its actual out-of-pocket
expenses incurred in connection with the Transaction (not including the Financing) up to maximum
amount of $1,000,000 upon submission by the Seller to the Purchaser of supporting documentation for
such expenses. This right shall be in addition to any other right or remedy that the Seller may
have available at law or equity.
| SECTION 10.5 Payment. |
SECTION 10.5 Payment. Any reimbursement of actual out-of-pocket expenses pursuant to
Section 10.3 and Section 10.4 shall be made within two business days after termination of this
Agreement and submission by the applicable Party of supporting documentation for such expenses by
wire transfer of immediately available funds to an account designated by the Purchaser or the
Seller, as applicable. The Parties acknowledge that the agreements contained in this Article 10 are
an integral part of the transactions contemplated by this Agreement, and that, without these
agreements, none of the Parties would enter into this Agreement; accordingly, if (a) the Seller
fails promptly to pay or cause to be paid the amounts due pursuant to Section 10.3 and, in order to
obtain such payment, the Purchaser commences a suit that results in a judgment against the Seller
for the amounts set forth in Section 10.3, the Seller shall pay to the Purchaser its reasonable
costs and expenses (including attorneys’ fees and expenses) in connection with such
suit and any appeal relating thereto, together with interest on the amounts set forth in
Section 10.3 at the prime rate of Citibank, N.A. in effect on the date such payment was required to
be made, (b) the Purchaser fails promptly to pay or cause to be paid the amounts due pursuant to
Section 10.4 and, in order to obtain such payment, the Seller commences a suit that results in a
judgment against the Purchaser for the amounts set forth in Section 10.4, the Purchaser shall pay
to the Seller its reasonable costs and expenses (including attorneys’ fees and expenses) in
connection with such suit and any appeal relating thereto, together with interest on the amounts
set forth in Section 10.4 at the prime rate of Citibank, N.A. in effect on the date such payment
was required to be made.
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ARTICLE 11
SURVIVAL; INDEMNIFICATION
| SECTION 11.1 Survival. |
SECTION 11.1 Survival. The representations, warranties and covenants of the Parties
contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in
connection herewith will survive the Closing indefinitely. The representations and warranties will
not be affected or reduced as a result of any investigation or knowledge of the Seller or the
Purchaser.
| SECTION 11.2 Indemnification. |
SECTION
11.2 Indemnification. (a) The Seller will indemnify, defend and hold harmless
the Purchaser and its officers, directors, employees, affiliates and agents, and the successors to
the foregoing (and their respective officers, directors, employees, affiliates and agents), against
any and all liabilities, damages and losses and, but only to the extent asserted in a Third-Party
Claim, punitive damages, and all costs or expenses, including reasonable attorneys’ and
consultants’ fees and expenses incurred in respect of Third-Party Claims or claims between the
Parties hereto (collectively, “Damages”), to the extent incurred or suffered as a result of
or arising out of (i) the failure of any representation or warranty made by the Seller in Article 5
or any other Acquisition Document to be true and correct as of the Closing Date or the Call Option
Closing Date, as the case may be, or (ii) any covenant herein or in any Acquisition Document
(b) The Purchaser will indemnify, defend and hold harmless the Seller and its officers,
directors, employees, affiliates, stockholders and agents, and the successors to the foregoing (and
their respective officers, directors, employees, affiliates, stockholders and agents), against any
and all Damages, incurred or suffered as a result of or arising out of (i) the failure of any
representation or warranty made by the Purchaser in Article 6 or any other Acquisition Document to
be true and correct as of the Closing Date or the Call Option Closing Date, as the case may be,
(ii) any covenant herein or in any other Acquisition Document or (iii) any statement contained in
the definitive Information Statement at the date it was first mailed to the Seller’s stockholders,
which, at the time and in the light of the circumstances under which it was made, was false or
misleading with respect to any material fact, or any omission therefrom to state any material fact
necessary in order to make the statements therein not false or misleading or necessary to correct
any statement in any earlier communication with respect to the same meeting or subject matter which
has become false or misleading made in reliance upon and in conformity with the Purchaser Information
SECTION 11.3 Procedures.
(a) If any Person who or which is entitled to seek indemnification under Section 11.2 (an
“Indemnified Party”) receives notice of the assertion or commencement of any Third-Party
Claim against such Indemnified Party with respect to which the Person against whom or which such
indemnification is being sought (an “Indemnifying Party”) is obligated to provide
indemnification under this Agreement, the Indemnified Party will give such Indemnifying Party
reasonably prompt written notice thereof, but in any event not later than 20 days after receipt of
such written notice of such Third-Party Claim. Such notice by the Indemnified Party will describe
the Third-Party Claim in reasonable detail, will include copies
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of all available material written
evidence thereof and will indicate the estimated amount, if reasonably estimable, of the Damages
that have been or may be sustained by the Indemnified Party. The Indemnifying Party will have the
right to participate in, or, by giving written notice to the Indemnified Party, to assume, the
defense of any Third-Party Claim at such Indemnifying Party’s own expense and by such Indemnifying
Party’s own counsel (which will be reasonably satisfactory to the Indemnified Party), and the
Indemnified Party will cooperate in good faith in such defense.
(b) Any Indemnifying Party will have the right to defend the Indemnified Party against any
third party claim for which it is entitled to indemnification from such Indemnifying Party under
this Article 11 with counsel reasonably satisfactory to the Indemnified Party so long as (i) the
Indemnifying Parties notifies the Indemnified Party in writing within 15 days after the Indemnified
Party has given notice of the Third Party Claim that all of the Indemnifying Parties will indemnify
the Indemnified Party from and against the entirety of Damages the Indemnified Party may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim
to the extent provided in Section 11.2, (ii) the Indemnifying Parties provides the Indemnified
Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Parties
will have the financial resources to defend against the Third Party Claim and fulfill their
indemnification obligations hereunder, (iii) the Third Party Claim involves only money damages and
does not seek an injunction or other equitable relief, (iv) settlement of, or an adverse judgment
with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party,
likely to establish a precedential custom or practice materially adverse to the continuing business
interests of the Indemnified Party, and (v) the Indemnifying Parties diligently conducts the
defense of the Third Party Claim.
So long as the Indemnifying Party has undertaken to conduct the defense of the Third Party
Claim in accordance with the foregoing Section 11.3(b), (i) the Indemnified Party may retain
separate co-counsel at its sole cost and expense and participate in the defense of the Third Party
Claim, (ii) the Indemnified Party will not consent to the entry of any judgment or enter into any
settlement with respect to the Third Party Claim without the prior written consent of the
Indemnifying Party, and (iii) the Indemnifying Party shall keep the Indemnified Party informed as
to the status of the claim for which it is providing a defense. Notwithstanding anything to the
contrary herein, in the event that (w) any of the conditions in this Section 11.3(b) is or becomes
unsatisfied; (x) the Indemnifying Party shall not have employed counsel reasonably satisfactory to
the Indemnified Party to defend such action within thirty (30) days after the Indemnifying Party received notice of the Third Party Claim; (y) the Indemnified Party
shall have reasonably concluded, based upon written advice of counsel, that it has defenses
available to it that are different from or additional to those available to the Indemnifying Party
(in which case the Indemnifying Party shall not have the right to direct the defense of such action
on behalf of the Indemnified Party with respect to such different defenses); or (z) representation
of such Indemnified Party by the counsel retained by the Indemnifying Party would be inappropriate
due to actual or potential differing interests between such Indemnified Party and any other party
represented by such counsel in such proceeding, then the Indemnified Party may defend against, and
consent to the entry of any judgment or enter into any settlement with respect to, the Third Party
Claim in any manner it may deem appropriate (and the Indemnified Party need not consult with, or
obtain any consent from, any Indemnifying Party in connection therewith) and, the Indemnifying
Parties will be responsible for the Indemnified Party’s costs of
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defending against the Third Party
Claim (including reasonable attorneys’ fees and expenses), and the Indemnifying Parties will remain
responsible for the entirety of the Damages the Indemnified Party may suffer resulting from,
arising out of, relating to, in the nature of, or caused by the Third Party Claim.
(c) Any claim by an Indemnified Party on account of Damages which does not result from a
Third-Party Claim (a “Direct Claim”) will be asserted by giving the Indemnifying Party
written notice thereof. The Indemnifying Party will have a period of 20 days within which to
respond in writing to such Direct Claim. If the Indemnifying Party does not so respond within such
20 day period, the Indemnifying Party will be deemed to have rejected such claim, in which event
the Indemnified Party will be free to pursue such remedies as may be available to the Indemnified
Party on the terms and subject to the provisions of this Agreement or at law.
(d) A failure to give timely notice or to include any specified information in any notice as
provided in Section 11.3(a) or 11.3(b) will not affect the rights or obligations of any Party
hereunder, except and only to the extent that, as a result of such failure, any Party which was
entitled to receive such notice was deprived of its right to recover any payment under its
applicable insurance coverage or was otherwise materially prejudiced as a result of such failure.
SECTION 11.4 Payment of Indemnification Payments; Insurance; Remedy.
(a) All indemnifiable Damages under this Agreement will be paid in cash in immediately
available funds.
(b) All indemnification payments payable hereunder shall be reduced by the amount of insurance
proceeds or amounts paid by third parties in connection with Damages as of the date that an
indemnification payment is due, but in each case only to the extent actually received by the
Indemnified Party (net of any applicable deductible or self-insured retention and any costs of
collection) as a result of the Damage for which the Indemnified Party is seeking indemnification.
Each Party agrees to promptly make a claim against any applicable insurance with respect to any
Damage that would otherwise be payable pursuant to Section 11.2. If an Indemnified Party hereunder
both collects proceeds from any insurance company or third party and receives a payment from the
Indemnifying Party hereunder, and the sum of such proceeds and payment is in excess of the amount
payable with respect to the matter that is the subject of
the indemnity, then the Indemnified Party shall promptly refund to the Indemnifying Party the
amount of such excess.
(c) The remedies provided herein shall be cumulative and shall not preclude any Party from
asserting any other right or seeking any other remedies against the other Party and shall survive
the Closing.
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ARTICLE 12
MISCELLANEOUS
| SECTION 12.1 Notices. |
SECTION 12.1 Notices. Unless otherwise provided in this Agreement, any notice, request,
instruction or other communication to be given hereunder by either Party to the other shall be in
writing and (a) delivered personally, (b) mailed by first-class mail, postage prepaid, (such mailed
notice to be effective four days after the date it is mailed) or (c) sent by facsimile
transmission, with a confirmation sent by way of one of the above methods, as follows:
If to the Seller, addressed to:
Xxxxxx Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxx Xxxxxx Xxxxxx LLP
0 Xxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Forth
Facsimile: (000) 000-0000
0 Xxxxx Xxxxxx
000 Xxxxxxxxxx Xxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx Forth
Facsimile: (000) 000-0000
If to the Purchaser, addressed to:
Omega Protein Corporation
0000 Xxxx Xxxx Xxxx., Xxxx. 0, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Held
Facsimile: (000) 000-0000
0000 Xxxx Xxxx Xxxx., Xxxx. 0, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Held
Facsimile: (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxx, L.L.P.
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
0000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
Either Party may designate in a writing to the other Party any other address or facsimile number to
which, and any other Person to whom or which, a copy of any such notice, request, instruction or
other communication should be sent.
| SECTION 12.2 Choice of Law. |
SECTION 12.2 Choice of Law. This Agreement shall be construed (both as to validity and
performance) and enforced in accordance with, and governed by the Laws of the State of Nevada
applicable to agreements made and to be performed wholly within such jurisdiction and irrespective
of any choice of Law provision that would require application of the Law of any other jurisdiction.
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| SECTION 12.3 Expenses. |
SECTION 12.3 Expenses. Whether or not the transactions contemplated by this Agreement
are consummated, except as otherwise expressly provided for in Sections 3.1, 10.3 and 10.4, the
Parties will pay or cause to be paid all of their own fees and expenses incident to this Agreement
and in preparing to consummate and in consummating the transactions contemplated hereby, including
the fees and expenses of any broker, finder, financial advisor, investment banker, legal advisor or
similar person engaged by such Party.
| SECTION 12.4 No Consequential or Punitive Damages. |
SECTION 12.4 No Consequential or Punitive Damages. Neither Party hereto (or any of
their respective Affiliates) shall, under any circumstance, be liable to the other Party (or its
Affiliates) for any consequential, exemplary, special, indirect, incidental or punitive damages
claimed by such other Party under the terms of or due to any breach of this Agreement, including,
but not limited to, loss of revenue or income, cost of capital, or loss of business reputation or
opportunity.
| SECTION 12.5 Titles. |
SECTION 12.5 Titles. The headings of the articles and sections of this Agreement are
inserted for convenience of reference only and shall not affect the meaning or interpretation of
this Agreement.
| SECTION 12.6 Waiver. |
SECTION 12.6 Waiver. No failure of a Party to require, and no delay by a Party in
requiring, the other Party to comply with any provision of this Agreement shall constitute a waiver
of the right to require such compliance. No failure of a Party to exercise, and no delay by a Party
in exercising, any right or remedy under this Agreement shall constitute a waiver of such right or
remedy. No waiver by a Party of any right or remedy under this Agreement shall be effective unless
made in writing. Any waiver by a Party of any right or remedy under this Agreement shall be limited
to the specific instance and shall not constitute a waiver of such right or remedy in the future.
| SECTION 12.7 Binding; Third-Party Beneficiaries. |
SECTION 12.7 Binding; Third-Party Beneficiaries. This Agreement shall be binding upon
the Parties and upon each of their respective successors and assignees and shall inure to the
benefit of, and be enforceable by, each Party and each of their respective successors and
assignees; provided, however, that, with the exception of an assignment by the
Seller to any Affiliate thereof, neither Party shall assign any right or obligation arising
pursuant to this Agreement without first obtaining the written consent of the other Party. Nothing
in this Agreement shall create or be deemed to create any third-party beneficiary rights in any
Person not a party to this Agreement.
| SECTION 12.8 Entire Agreement. |
SECTION 12.8 Entire Agreement. This Agreement and the other Acquisition Documents
contains the entire agreement between the Parties with respect to the subject of this Agreement,
and supersedes each course of conduct previously pursued, accepted or acquiesced in, and each
written and oral agreement and representation previously made, by the Parties with respect thereto,
whether or not relied or acted upon, including the letter agreement dated August 23, 2006, between
the Seller and the Purchaser. Notwithstanding the foregoing, the confidentiality agreement dated
April 12, 2006, between the Purchaser and the Seller shall survive and continue in effect.
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| SECTION 12.9 Severability. |
SECTION 12.9 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
| SECTION 12.10 Modification. |
SECTION 12.10 Modification. No course of performance or other conduct hereafter
pursued, accepted or acquiesced in, and no oral agreement or representation made in the future, by
the Parties, whether or not relied or acted upon, and no usage of trade, whether or not relied or
acted upon, shall modify or terminate this Agreement, impair or otherwise affect any obligation of
the Parties pursuant to this Agreement or otherwise operate as a waiver of any such right or
remedy. No modification of this Agreement or waiver of any such right or remedy shall be effective
unless made in writing duly executed by the Purchaser and the Seller.
| SECTION 12.11 Counterparts. |
SECTION 12.11 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which taken together shall constitute one and
the same instrument. Either Party may execute this Agreement by facsimile signature and the other
Party shall be entitled to rely on such facsimile signature as evidence that this Agreement has
been duly executed by such Party. Either Party executing this Agreement by facsimile signature
shall immediately forward to the other Party an original signature page by overnight mail or
delivery service.
SECTION 12.12 Time of Essence. Time is of the essence in this Agreement.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the Purchaser and the Seller has caused to be executed by a duly
authorized officer this Agreement on the day and year indicated at the beginning of this Agreement.
| OMEGA PROTEIN CORPORATION |
||||
| By: | /s/ Xxxxxx X. xxx Xxxxxxxxx III | |||
| Xxxxxx X. xxx Xxxxxxxxx III, President and | ||||
| Chief Executive Officer | ||||
| XXXXXX CORPORATION |
||||
| By: | /s/ Xxxxx X. Xxxxxx | |||
| Xxxxx X. Xxxxxx, Chairman, President and | ||||
| Chief Executive Officer | ||||
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