LETTER AGREEMENT
EXHIBIT 10.2
Omega Protein Corporation
|
Xxxxxx Corporation | |
0000 XxxxXxxx Xxxxxxxxx
|
000 Xxxxxxxx Xxxxxx | |
Xxxxxxxx 0, Xxxxx 000
|
Xxxxx 000 | |
Xxxxxxx, Xxxxx 00000
|
Xxxxxxxxx, Xxx Xxxx 00000 |
December 1, 2006
Gentlemen:
Reference is made to a Stock Purchase Agreement dated as of December 1, 2006 (the
“Purchase Agreement”), between Xxxxxx Corporation, a Nevada corporation (the
“Xxxxxx”) and certain purchasers (the “Purchasers”) pursuant to which Xxxxxx has
agreed to sell to the Purchasers, and the Purchasers have agreed to purchase from Xxxxxx, 5,232,708
shares of the common stock, par value $.01 per share, of Omega Protein Corporation, a Nevada
corporation (the “Omega”). In order to induce the Purchasers to complete such purchase,
Omega has agreed to provide certain registration rights to the Purchasers with respect to such
shares pursuant to a Registration Rights Agreement dated as of December 1, 2006 (the
“Registration Rights Agreement”), entered into by Omega and the Purchasers in satisfaction
of a condition to closing under the Purchase Agreement. Terms not otherwise defined herein shall
have the meanings given to them in the Registration Rights Agreement.
Pursuant to Section 2 of the Registration Rights Agreement, Omega is required to file a
Registration Statement with the SEC covering the Registrable Securities within 30 days after the
Closing Date and to use commercially reasonable efforts to have it declared effective as soon as
practicable. Under Section 2(c) of the Registration Rights Agreement, Omega is liable for the
payment of liquidated damages to the Purchasers under the following circumstances (each a
“Section 2(c) Default Event”) (i) if the Registration Statement does not become effective
prior to the 90th day after the Closing Date (the 120th day after the Closing
Date in the event that the Registration Statement has not been declared effective through no fault
of Omega) or (ii) if, after the Registration Statement has been declared effective by the SEC,
sales cannot be made pursuant to such Registration Statement for any reason (including without
limitation by reason of a stop order, or Omega’s failure to update the Registration Statement), but
excluding the inability of any Purchaser to sell the Registrable Securities covered thereby due to
market conditions and except as excused pursuant to Section 2(c)(ii) of the Registration Rights
Agreement. Upon the occurrence of a Section 2(c) Default Event, Omega must make pro rata
liquidated damages payments to each Purchaser in an amount equal to 1.0% of the aggregate amount
invested by such Purchaser pursuant to the Purchase Agreement for each 30-day period or pro rata
for any portion thereof following the date by which such Registration Statement should have been
effective. Section 2(d) of the Registration Rights Agreement limits Omega’s liability for
liquidated damages under the Registration Rights Agreement (including any liquidated damages paid
pursuant to Section 2(a) of the Registration Rights Agreement for failure to file the Registration
Statement within 30 days of the Closing Date) to an aggregate of 10% of the aggregate purchase
price paid by the Purchasers pursuant to the Purchase Agreement.
Subject to terms and conditions herein, Xxxxxx hereby agrees that if the Registration
Statement has been filed with the SEC and a Section 2(c) Default Event Occurs which requires a
liquidated damages payment to the Purchasers under the terms of the Registration Rights Agreement,
Xxxxxx shall reimburse Omega in an amount equal to such liquidated damages paid by Omega to the
Purchasers. Omega shall provide Xxxxxx with written notice of any payment by Omega to the
Purchasers of liquidated damages and the amount thereof. Within three Business Days after delivery
of such notice, Xxxxxx will pay Omega the amount of such liquidated damages in cash by wire
transfer of immediately available funds to such account(s) as Omega may designate in writing to
Xxxxxx.
Within five Business Days after the written request of Xxxxxx, Omega will provide Xxxxxx with
information and documents to ascertain whether Omega has fulfilled the following conditions: (i)
Omega has not breached the Registration Rights Agreement, (ii) Omega has responded promptly to the
extent commercially reasonable to all SEC comment letters, questions and requests involving the
Registration Rights Agreement, (iii) Omega promptly files to the extent commercially reasonable all
required pre-effective and post-effective amendments to the Registration Statements and prepares
and provides the Purchasers with any necessary supplements to the prospectus included in the
Registration Statement in each case in a commercially reasonably manner, (iv) Omega files with the
SEC a request for acceleration in accordance with Rule 461 promulgated under the 1933 Act, within
five Business Days of the date that Omega is notified by the SEC that a Registration Statement will
not be “reviewed,” or is not subject to further review, and (v) Omega does not intentionally take
an action or omit to take an action that would result in a Section 2(c) Default Event to exist or
not be removed. Omega hereby covenants and agrees to fulfill each of the foregoing conditions.
If Xxxxxx and Omega agree that Omega has not fulfilled any of the foregoing conditions, Omega
shall, on the next Business Day after such agreement, repay any amounts paid by Xxxxxx to Omega
pursuant to the immediately preceding paragraph plus interest thereon calculated using the prime
rate of interest as in effect from time to time as published in the Wall Street Journal plus four
percent (the “Default Rate”), in cash by wire transfer of immediately available funds to
such account(s) as Xxxxxx may designate in writing to Omega. In addition, if any arbitrator or
court of law determines by way of decision, order or judgment that Omega was not entitled to a
payment made by Xxxxxx to Omega hereunder, then in addition to repaying to Xxxxxx such amount Omega
shall also pay Xxxxxx interest on such amount from the date that Xxxxxx made the payment until the
date it is repaid to Xxxxxx at the Default Rate.
If Xxxxxx and Omega cannot agree within 15 days after payment is made that Omega has not
fulfilled any of the foregoing conditions, then either party may submit the matter to binding
arbitration by giving written notice to the other party hereto provided, however, that either party
may seek injunctive relief or other equitable relief to preserve the status quo pending
arbitration. Within 30 days after receipt of such notice by such party, the American Arbitration
Association shall select an arbitrator experienced in the securities laws. The arbitrator shall be
impartial and unrelated, directly or indirectly, so far as rendering of services is concerned to
either of the parties or any of their respective Affiliates. The arbitration shall be conducted in
Chicago, Illinois in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, as then in effect, except as otherwise provided herein, and the arbitrator shall be
paid on an hourly basis, except as otherwise mutually agreed. The arbitrator shall investigate the
facts and may, in his or her discretion, hold hearings, at which the parties hereto may present
evidence and arguments, be represented by counsel and conduct cross-examination. The arbitrator
shall render a written decision on the matter presented as soon as practicable after his or her
appointment and in any event not more than 90 days after such appointment. The decision of the
arbitrator, which may include equitable relief, shall be final and binding on the parties hereto,
and judgment upon the decision may be entered in any court having jurisdiction thereof. If the
arbitrator shall fail to render a decision within such 90-day period, either party may institute
such action or proceeding in such court as shall be appropriate in the circumstances and upon the
institution of such action, the arbitration proceeding shall be terminated and shall be of no
further force and effect.
In resolving any dispute, the arbitrator shall apply the provisions of this letter agreement
and applicable law, without varying therefrom in any respect. The arbitrator shall not have the
power to add to, modify or change any of the provisions of this letter agreement.
Omega will not consent to any amendment, change or modification to the Registration Rights
Agreement which would in any way affect Omega’s liability under Section 2(c) of the Registration
Rights Agreement without Xxxxxx’x prior written consent unless Omega first fully and completely
terminates this letter agreement and releases Xxxxxx from any and all liability or obligations with
respect the matters described herein.
Unless otherwise provided in this letter 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 Xxxxxx, addressed to:
Xxxxxx Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, President and Chief Executive Officer
Facsimile: (000) 000-0000
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxx, President and Chief Executive Officer
Facsimile: (000) 000-0000
And
Xxxxxx Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx XxXxxxx, Vice President
Facsimile: (000) 000-0000
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxx XxXxxxx, Vice President
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 Omega, 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.
This letter agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the same letter
agreement. A facsimile or photocopy of any signature shall have the same force and effect as an
original.
This letter agreement constitutes the entire agreement between Xxxxxx and Omega with respect
to the subject matter hereof and may not be amended or modified except pursuant to a written
instrument signed by the party to be charged.
It is further understood and agreed that money damages would not be a sufficient remedy for
any breach of this letter agreement and that either party shall be entitled, without being required
to post a bond or other security, to equitable relief, including injunction and specific
performance, as a remedy for any such breach. Such remedies
shall not be deemed to be the exclusive remedies for a breach by a party of this letter agreement
but shall be in addition to all other remedies available at law or equity to the non-breaching
party. In the event of litigation relating to this letter agreement, if a court of competent
jurisdiction determines that either party has breached this letter agreement, then the breaching
party shall be liable and pay to the non-breaching party the reasonable legal fees and
out-of-pocket costs incurred by the non-breaching party in connection with such litigation,
including any appeal therefrom.
This letter agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles thereof.
[Signature Page Follows]
OMEGA PROTEIN CORPORATION, a Nevada corporation | ||||||
By: | /s/ Xxxx X. Held | |||||
Xxxx X. Held | ||||||
Executive Vice President, General Counsel | ||||||
XXXXXX CORPORATION, a Nevada corporation | ||||||
By: | /s/ Xxxxxxx XxXxxxx | |||||
Xxxxxxx XxXxxxx | ||||||
Vice President — Finance, Chief Financial Officer |