VISKASE COMPANIES, INC. SERIES A PREFERRED STOCK PURCHASE AGREEMENT November 7, 2006
Exhibit
10.1
VISKASE
COMPANIES, INC.
November
7, 2006
TABLE
OF CONTENTS
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Page
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1.
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Purchase
and Sale of Stock.
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1
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1.1
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Sale
and Issuance of Series A Preferred Stock.
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1
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1.2
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Closing.
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1
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2.
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Option.
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2
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2.1
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General.
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2
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2.2
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Notice
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2
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2.3
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Exercise
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2
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3.
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Representations
and Warranties of the Company
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3
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3.1
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Organization,
Good Standing and Qualification
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3
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3.2
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Subsidiaries
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3
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3.3
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Authorization
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3
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3.4
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Governmental
Consents
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3
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3.5
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Valid
Issuance of Shares, Option Shares and Underlying Common
Stock
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4
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3.6
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Capitalization
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4
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3.7
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Noncontravention
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4
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3.8
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Litigation
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5
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3.9
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SEC
Documents; Financial Statements
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5
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3.10
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Registration
Rights; Voting Rights
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5
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4.
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Representations
and Warranties of the Investors
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6
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4.1
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Authorization
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6
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4.2
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Experience
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6
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4.3
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Accredited
Investor
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6
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4.4
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Purchase
Entirely for Own Account
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6
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4.5
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Economic
Risk
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6
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4.6
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No
Public Market
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7
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4.7
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Legend
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7
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5.
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Rights
Offering
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7
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6.
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Conditions
of Investors’ Obligations at Closing and any Option
Closing
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7
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6.1
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Representations
and Warranties
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8
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6.2
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Performance
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8
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6.3
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Compliance
Certificate
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8
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6.4
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Certificate
of Designations
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8
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i
TABLE
OF CONTENTS
(CONTINUED)
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6.5
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Consents
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8
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6.6
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Registration
Rights Agreement
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8
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6.7
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Opinion
of Company Counsel
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8
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6.8
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Material
Adverse Change
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8
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7.
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Conditions
of the Company’s Obligations at Closing and any Option
Closing
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8
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7.1
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Representations
and Warranties
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9
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7.2
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Performance
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9
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7.3
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Certificate
of Designations
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9
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7.4
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Registration
Rights Agreement
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9
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8.
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Indemnification.
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9
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8.1
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Indemnification
by
the Company
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9
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8.2
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Indemnification
by the Investors
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9
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8.3
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Defense
of Third Party Claims
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9
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8.4
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Other
Claims
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10
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9.
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Miscellaneous.
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11
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9.1
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Governing
Law
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11
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9.2
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Survival
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11
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9.3
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Successors
and Assigns
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11
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9.4
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Entire
Agreement
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11
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9.5
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Notices,
Etc.
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11
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9.6
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Waiver
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11
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9.7
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Expenses
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12
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9.8
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Amendments
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12
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9.9
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Finder’s
Fee
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12
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9.10
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Counterparts
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12
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9.11
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Severability
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12
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9.12
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Titles
and Subtitles
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12
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SCHEDULES
AND EXHIBITS
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Schedule
I
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Participating
Investors
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Exhibit
A
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Certificate
of Designations
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Exhibit
B
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Disclosure
Schedule
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Exhibit
C
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Registration
Rights Agreement
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Exhibit
D
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Rights
Offering Term Sheet
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Exhibit
E
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Opinion
of Company Counsel
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ii
This
Series A Preferred Stock Purchase Agreement (this “Agreement”)
is
made as of November 7, 2006, by and between Viskase Companies, Inc., a Delaware
corporation (the “Company”),
and
the participating investors identified on Schedule
I
hereto
(each, an “Investor”
and
collectively, the “Investors”).
RECITAL
The
Company desires to sell, and the Investors wish to buy, shares of the Company’s
newly designated Series A Preferred Stock, par value $0.01 per share (the
“Series
A Preferred Stock”),
on
the terms and subject to the conditions contained herein.
AGREEMENT
The
parties agree as follows:
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1.
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Purchase
and Sale of Stock.
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1.1
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Sale
and Issuance of Series A Preferred Stock.
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(a) The
board
of directors of the Company (the “Board”)
shall
adopt and shall cause the Company to file with the Secretary of State of
Delaware on or before the Closing (as defined below in Section 1.2)
a
certificate of designations in the form attached hereto as Exhibit A
(the
“Certificate
of Designations”).
(b) Subject
to the terms and conditions of this Agreement, the Investors agree to purchase
at the Closing, and the Company agrees to sell and issue to the Investors at
the
Closing such number of shares of the Series A Preferred Stock as is set forth
opposite each Investor’s name on Schedule
I
hereto
at a purchase price of One Dollar and Ninety-Five Cents ($1.95) per share (the
“Purchase
Price”).
The
shares of Series A Preferred Stock to be sold pursuant to this Agreement are
collectively referred to herein as the “Purchased
Shares”
and
the
Purchased Shares together with any shares of Series A Preferred Stock issued
by
the Company in respect of the Purchased Shares are collectively referred to
herein as the “Shares.”
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1.2
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Closing.
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(a) The
purchase and sale of Purchased Shares (the “Closing”)
shall
occur as promptly as possible, but in no event more than three (3) business
days
following the satisfaction and/or waiver of all conditions to Closing set forth
in Sections 6
and
7,
at the
offices of Jenner & Block LLP, One IBM Plaza, Chicago, Illinois, or at such
other time and place as the Company and the Investors shall mutually agree.
The
date on which the Closing actually occurs will be referred to as the
“Closing
Date,”
and
except as otherwise expressly provided herein, the Closing shall for all
purposes be deemed effective as of 8:00 a.m., Chicago time, on the Closing
Date.
(b) At
the
Closing, the Company shall deliver to the Investors a certificate or
certificates representing the Purchased Shares against payment of the Purchase
Price therefor by wire transfer of immediately available funds to an account
designated by the Company at least one (1) business day prior to the Closing
Date.
1
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2.
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Option.
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2.1
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General.
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(a) The
Company hereby grants to Koala Holding LLC (“Koala”),
subject to the terms and conditions set forth herein, a one-time, non-assignable
right to purchase such number of shares of Common Stock, par value $0.01 per
share, of the Company (the “Common
Stock”)
as is
necessary for Koala and its affiliates to own, immediately following
consummation of the Rights Offering and the related conversion of Series A
Preferred Stock not otherwise redeemed in connection with the Rights Offering,
fifty and one-tenth percent (50.1%) of the outstanding Common Stock (on a fully
diluted basis, including after giving effect to the Investor Option pursuant
to
Section
2.1(b)
below)
for consideration per share equal to the consideration the holder of a Right
(as
defined in Section
5
below)
would be required to pay to acquire a share of Common Stock thereunder (the
“Koala
Option”).
For
purposes hereof, the percentage increase in the number of shares of Common
Stock
held by Koala resulting solely from the exercise of the Koala Option is referred
to the “Top-Up
Percentage.”
(b) The
Company hereby grants to each of the Investors (other than Koala), subject
to
the terms and conditions set forth herein, including the condition that Koala
exercise the Koala Option pursuant to Section
2.1(a)
above, a
one-time, non-assignable right to purchase a number of shares of Common Stock
equal to (i) the Top-Up Percentage (expressed as a decimal) multiplied
by
(ii) the
number of shares of Common Stock held by such Investor immediately following
consummation of the Rights Offering and the related conversion of Series A
Preferred Stock not otherwise redeemed in connection with the Rights Offering,
for consideration per share equal to the consideration the holder of a Right
(as
defined in Section
5
below)
would be required to pay to acquire a share of Common Stock thereunder (the
“Investor
Option”
and,
together with the Koala Option, the “Option”).
2.2 Notice.
Promptly
following consummation of the Rights Offering and the related conversion of
Series A Preferred Stock not otherwise redeemed in connection with the Rights
Offering, the Company will provide to each of the Investors a written notice
(“Share
Notice”)
providing (a) the total number of shares of Common Stock (on a fully diluted
basis) then outstanding and (b) the number of shares of Common Stock such
Investor has the option to purchase pursuant to Sections
2.1(a)
and
(b)
above,
as applicable, at such time (the “Option
Shares”).
2.3 Exercise.
Each
Investor may exercise the applicable Option in whole (but not in part) and
purchase the Option Shares by providing the Company written notice thereof
on or
before the tenth (10th) business day following its receipt of the Share Notice.
Each Investor exercising its Option shall promptly pay to the Company by wire
transfer of immediately available funds the aggregate consideration due under
the Option and the Company shall substantially concurrently therewith deliver
to
such Investor the fully paid and non-assessable Option Shares. The date upon
which both the consideration due under the Option is received by the Company
and
the Company completes delivery to the Investor of the applicable Option Shares
is referred to herein as the “Option
Closing.”
2
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Investors as of the date hereof
and as of the Closing and the Option Closing, if applicable, each of the
following. For purposes of this Section 3,
“Knowledge”
of
the
Company shall mean (a) the actual knowledge of the Company and
(b) that knowledge that a prudent businessperson could have obtained in the
management of his business after making due inquiry, and after exercising due
diligence with respect thereto.
3.1 Organization,
Good Standing and Qualification.
The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to carry on its business as currently conducted
and as currently proposed to be conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which it
is
required to be so qualified and in good standing, except where the failure
to be
so qualified and in good standing would not materially and adversely affect
the
business, operations, properties, assets (whether tangible or intangible) or
financial condition of the Company and its subsidiaries taken as a whole (a
“Material
Adverse Effect”).
True
and accurate copies of the Company’s Certificate of Incorporation (the
“Certificate
of Incorporation”),
as
modified by the Certificate of Designations, and Bylaws (the “Bylaws”),
each
as amended and in effect at the Closing, have been made available to the
Investors.
3.2 Subsidiaries.
Except
as set forth in Section 3.2 of the Disclosure Schedule attached hereto as
Exhibit
B
(the
“Disclosure
Schedule”),
the
Company does not presently own or control, directly or indirectly, any interest
in any other corporation or other business entity. The Company is not a
participant in any joint venture, partnership or similar arrangement.
3.3 Authorization.
All
corporate action on the part of the Company, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement and the Registration Rights Agreement of even date herewith in
substantially the form attached hereto as Exhibit
C
(the
“Registration
Rights Agreement”),
the
performance of all obligations of the Company hereunder and thereunder as of
the
Closing and the Option Closing, if applicable, and the authorization, issuance
(or reservation for issuance), sale and delivery of the Shares and the Common
Stock (as defined below in Section 3.6)
issuable upon conversion of the Shares and the Option Shares, has been taken
and
this Agreement constitutes, and the Registration Rights Agreement when executed
and delivered will constitute, a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, subject to: (a) laws
limiting the availability of specific performance, injunctive relief and other
equitable remedies; and (b) bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect generally relating
to or affecting creditors’ rights generally.
3.4 Governmental
Consents.
No
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection
with
the offer, sale or issuance of the Shares (and the Common Stock issuable upon
conversion of the Shares) and the Option Shares and/or the consummation of
any
other transaction contemplated hereby or in the Registration Rights Agreement,
except for the following: (a) the filing of the Certificate of Designations
in the office of the Secretary of State of the State of Delaware, which will
be
filed by the Company prior to the Closing; and (b) filings pursuant to
applicable federal and state securities laws, including any filings pursuant
to
the terms of the Registration Rights Agreement and any filings pursuant to
Regulation D of the Securities Act of 1933, as amended (the “Securities
Act”).
Assuming that the representations of the Investors set forth in Section 4
below
are true and correct, the offer, sale, and issuance by the Company of the
Shares, Conversion Shares and Options Shares, in each case, in conformity with
the terms of this Agreement and the Certificate of Incorporation as modified
by
the Certificate of Designation are exempt from the registration requirements
of
Section 5 of the Securities Act.
3
3.5 Valid
Issuance of Shares, Option Shares and Underlying Common Stock.
The
Shares and Option Shares, when issued, sold, and delivered in accordance with
the terms of this Agreement for the consideration expressed herein, will be
duly
and validly issued, fully paid, and nonassessable, and will be free of
restrictions on transfer other than restrictions on transfer under applicable
state and federal securities laws. The Common Stock issuable upon conversion
of
the Shares has been duly and validly reserved for issuance and, when issued
and
delivered in accordance with the terms of the Certificate of Incorporation
as
modified by the Certificate of Designation, will be duly and validly issued,
fully paid, and nonassessable, and will be free of restrictions on transfer
other than restrictions on transfer under applicable state and federal
securities laws.
3.6 Capitalization.
Immediately prior to the Closing, the authorized capital stock of the Company
consists of (a) Fifty Million (50,000,000) shares of Common Stock, par
value $0.01 per share (“Common
Stock”),
of
which 10,811,483 shares, which includes 805,270 shares of Common Stock held
in
treasury and 69,438 shares
of
restricted Common Stock that are issued but not outstanding, are issued and
9,936,775 shares are outstanding and (b) 50,000,000 shares of preferred
stock, par value $0.01 per share, of which no shares are issued and outstanding.
All of the outstanding shares of Common Stock are duly authorized, validly
issued, fully paid, non-assessable and free of preemptive rights. None of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights or rights of first refusal or first offer. Immediately prior to the
Closing, except for warrants to purchase 641,456 shares of Common Stock with
an
exercise price of $0.01 and expiring June 15, 2011 (the “2011
Warrants”),
warrants to purchase 304,127 shares of Common Stock with an exercise price
of
$10.00 and expiring April 2, 2010 (the “2010
Warrants”),
and
options granted under the Company’s 2005 Stock Option Plan, which are
exercisable for a total of 926,668 shares of Common Stock, there are no
outstanding options, rights (preemptive or otherwise) or warrants to purchase
or
to subscribe for any shares of the Company’s capital stock or that otherwise
confer on any person any right to acquire any of the Company’s capital stock or
other outstanding securities convertible into or exchangeable for shares of
the
Company’s capital stock and, except for 69,438 shares of restricted Common Stock
that are issued but not outstanding, there are no outstanding or authorized
stock appreciation, phantom stock or similar rights with respect to the
Company’s capital stock. There will be no adjustment to the exercise price of
the 2010 Warrants or 2011 Warrants as a result of consummation of the sale
of
Shares under this Agreement.
3.7 Noncontravention.
The
execution and delivery by the Company of this Agreement and the Registration
Rights Agreement and the consummation and performance by the Company of the
transactions and obligations contemplated hereby and thereby do not:
(a) violate any material law to which the Company or its subsidiaries is
subject; (b) conflict with or result in a breach of any provision of the
Certificate of Incorporation or Bylaws; (c) create a breach, default,
termination, cancellation, modification or acceleration of any obligation of
the
Company or any of its subsidiaries pursuant to any material contract to which
the Company or any of its subsidiaries is a party or by which the Company or
any
of its subsidiaries or any of its assets or properties is bound or subject;
or
(d) result in the creation or imposition of any liens on any material asset
of the Company or any of its subsidiaries.
4
3.8 Litigation.
Except
as set forth in Section 3.8 of the Disclosure Schedule, there are no legal,
administrative, grievance, arbitration or other proceedings or governmental
investigations pending or, to Knowledge of the Company, threatened, against
the
Company or any of its subsidiaries (a) that seek to restrain or enjoin the
consummation of the transactions contemplated by this Agreement or the
Registration Rights Agreement, (b) that seek relief that would reasonably
be expected to have a Material Adverse Effect, (c) that challenge the
validity of this Agreement, the Registration Rights Agreement or the Certificate
of Incorporation after giving effect to the Certificate of Designations or
(d) that challenge any action taken or to be taken by the Company or any of
its subsidiaries in connection with this Agreement or the Registration Rights
Agreement.
3.9 SEC
Documents; Financial Statements.
The
Company has filed on a timely basis all registration statements, forms, reports
and proxy statements required to be filed by the Company with the Securities
and
Exchange Commission (“SEC”)
on or
after January 25, 2005 (collectively, the “Company
Reports”).
As of
their respective dates, the Company Reports: (a) were prepared in
accordance with the applicable requirements of the Securities Act, the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder, (b) complied in all materials respects with the
then applicable accounting requirements and (c) did not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make
the statements made therein, in the light of the circumstances under which
they
were made, not misleading. Each set of the consolidated financial statements
(including in each case any notes and schedules related thereto) included in
the
Company Reports complies as to form in all material respects with all applicable
accounting requirements and published rules of the SEC (including Regulation
S-X) with respect thereto, fairly presents in all material respects the
consolidated financial position of the Company and its subsidiaries as of its
date, and each of the consolidated statements of operations, cash flows and
stockholders’ deficit included in the Company Reports (including any related
notes and schedules) fairly presents in all material respects the consolidated
results of operations, cash flows or changes in stockholders’ deficit, as the
case may be, of the Company and its subsidiaries for the periods set forth
therein, in each case in accordance with United States generally accepted
accounting principles except, in the case of unaudited statements, for normal
and recurring year-end audit adjustments and as otherwise may be noted
therein.
3.10
Registration
Rights; Voting Rights.
Except
as provided in the Registration Rights Agreement and as set forth in Section
3.10 of the Disclosure Schedule, (a) the Company has not granted or agreed
to grant, and is not under any obligation to provide, any rights to register
under the Securities Act any of its presently outstanding securities or any
of
its securities that may be issued subsequently, and (b) no stockholder of
the Company has entered into any agreement with the Company or its subsidiaries
with respect to the voting of equity securities of the Company. The Company
has
not entered into any agreement with any stockholder relating to any rights
or
restriction on or in connection with the stock of the Company except as set
forth in the Company’s Certificate of Incorporation and Certificate of
Designations or as set forth in the Company’s stock option or restricted stock
plans.
5
4. Representations
and Warranties of the Investors.
The
Investors each hereby represent and warrant to the Company, on a several
basis,
as of the date hereof and as of the Closing and the Option Closing, if
applicable, as follows:
4.1 Authorization.
All
corporate, limited liability company, limited partnership or trust action,
as
applicable, on the part of the Investor, its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement and the Registration Rights Agreement and the performance of all
obligations of the Investor hereunder and thereunder as of the Closing, has
been
taken and this Agreement constitutes, and the Registration Rights Agreement
when
executed and delivered will constitute, a valid and legally binding obligation
of the Investor, enforceable in accordance with its terms, subject to:
(a) laws limiting the availability of specific performance, injunctive
relief and other equitable remedies, and (b) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
generally relating to or affecting creditors’ rights generally.
4.2 Experience.
The
Investor is experienced in evaluating and investing in private placement
transactions of securities of companies such as the Company, and has either
individually or through its current officers, directors or partners such
knowledge and experience in financial and business matters that the Investor
is
capable of evaluating the merits and risks of the Investor’s prospective
investment in the Company, and has the ability to bear the economic risks of
the
investment.
4.3 Accredited
Investor.
The
Investor is an “accredited investor” within the meaning of Securities and
Exchange Commission Rule 501 of Regulation D, as presently in effect, under
the
Securities Act.
4.4 Purchase
Entirely for Own Account.
This
Agreement is made with the Investor in reliance upon its representation to
the
Company, which by the Investor’s execution of this Agreement the Investor hereby
confirms, that the Purchased Shares and Option Shares, if applicable, will
be
acquired for investment for its own account, not as a nominee or agent, and
not
with a view to the resale or distribution of any part thereof, and that the
Investor has no present intention of selling, granting any participation in,
or
otherwise distributing the same. By executing this Agreement, the Investor
further represents that it does not have any contract, undertaking, agreement
or
arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with
respect to any of the Purchased Shares and Option Shares, if applicable (or
any
Common Stock acquired upon conversion thereof).
4.5 Economic
Risk.
The
Investor understands that investment in the Company involves substantial risks.
The Investor further understands that the purchase of the Purchased Shares
and
Option Shares, if applicable, will be a highly speculative investment. The
Investor is able, without impairing its financial condition, to hold the
Purchased Shares and Option Shares, if applicable, for an indefinite period
of
time and to suffer a complete loss of the Investor’s investment.
6
4.6 No
Public Market.
The
Investor understands that no public market now exists for the Series A Preferred
Stock, and the Company has made no assurances that a public market will ever
exist for the Series A Preferred Stock and that it is unlikely that a public
market will ever exist for the Series A Preferred Stock.
4.7 Legend.
The
Investor acknowledges that, to the extent applicable, each certificate
evidencing the Shares, the Option Shares and the Common Stock issuable upon
conversion of the Shares shall be endorsed with the legend substantially in
the
form set forth below, as well as any additional legend imposed or required
by
applicable state securities laws:
|
THE
SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES
ONLY
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
UNLESS
AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED
AN
OPINION OF COUNSEL OR OTHER EVIDENCE, SATISFACTORY TO THE COMPANY
AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.
|
5.
Rights
Offering.
The
Company agrees to use commercially reasonable efforts to initiate and complete
a
registered offering of rights (the “Rights
Offering”)
to
acquire Common Stock (the “Rights”),
to be
initiated no later than ninety (90) calendar days after
the
date hereof and completed no later than one hundred eighty (180) calendar days
after the date hereof (the “Rights
Offering Deadline”),
and
otherwise in accordance with the terms set forth on the term sheet attached
hereto as Exhibit
D
(the
“Rights
Offering Term Sheet”).
The
Company agrees that, subject to limitations under applicable law, the proceeds
of the Rights Offering will be used exclusively to redeem Shares then held
by
the Investors on a pro rata basis. All consideration proposed to be paid by
the
Investors for any Common Stock subscribed for by the Investors under the terms
of Rights received as part of the Rights Offering may be paid in Shares valued
at their liquidation value plus accrued and unpaid dividends thereon. The
Investors agree on behalf of themselves and their respective affiliates that
own
Common Stock (“Investor
Rights Holders”)
that,
with respect to the Rights Offering, if the aggregate cash consideration paid
to
the Company by all holders of Rights (other than the Investor Rights Holders)
in
connection with the subscription for Common Stock under the Rights is equal
to
or greater than Ten Million Dollars ($10,000,000), then the Investor Rights
Holders shall be deemed to have subscribed for, without any further action
on
the part of the Company or the Investor Rights Holders, a number of shares
of
Common Stock equal to (a) the total number of shares of Common Stock the
Investor Rights Holders have the right to subscribe for under the Rights
multiplied
by
(b) (i) the total number of shares of Common Stock subscribed for
under the Rights Offering by all holders of Rights (other than the Investor
Rights Holders) divided
by
(ii) the total number of shares of Common Stock available to be subscribed
for by all holders of Rights (other than the Investor Rights Holders). The
Investors acknowledge that they shall not be entitled to receive Rights in
respect of the Shares purchased hereunder.
6.
Conditions
of Investors’ Obligations at Closing
and
any Option Closing.
The
obligation of each Investor to purchase the Purchased Shares at the Closing,
and
the Option Shares at the Option Closing, is subject to the fulfillment on or
before the Closing or the Option Closing, as applicable, of each of the
following conditions, the waiver of which shall not be effective unless
consented in writing thereto:
7
6.1 Representations
and Warranties.
The
representations and warranties of the Company contained in Section 3
shall be
true and correct in all material respects (except for any representations
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) on and as of the Closing Date and the Option Closing,
as applicable (except for any representations and warranties made as of a
specified date, which shall be true and correct in all material respects or
true
and correct in all respects, as applicable, as of such specified
date).
6.2 Performance.
The
Company shall have performed and complied in all material respects with all
agreements, obligations, and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing and
the
Option Closing, as applicable.
6.3 Compliance
Certificate.
The
President of the Company shall deliver to the Investors at the Closing and
the
Option Closing, as applicable, a certificate stating that the conditions
specified in Sections 6.1,
6.2
and
6.8
have
been fulfilled.
6.4 Certificate
of
Designations.
Prior
to the Closing, the Certificate of Designations shall have been filed with
the
Secretary of State of Delaware and the Certificate of Incorporation as modified
by the Certificate of Designations shall be in full force and effect, and a
copy
of which shall have been delivered to the Investors.
6.5 Consents.
The
Company shall have entered into a supplemental indenture and amendments to
the
security agreement and intercreditor agreement with respect to the Company’s
11½% Senior Secured Notes due 2011, and an amendment to the Company’s revolving
credit facility with ▇▇▇▇▇ Fargo Foothill, in each case, giving effect to the
amendments identified in the Rights Offering Term Sheet; such supplemental
indenture and each of such amendments shall be in full force and effect, and
copies of which shall have been delivered to the Investors.
6.6 Registration
Rights Agreement.
The
Company shall have entered into the Registration Rights Agreement and the
Registration Rights Agreement shall be in full force and effect.
6.7 Opinion
of Company Counsel.
The
Investors shall have received from Jenner & Block LLP, counsel for the
Company, an opinion, dated as of the Closing or the Option Closing, as
applicable, in the form attached hereto as Exhibit
E.
6.8 Material
Adverse Change.
There
shall have not occurred and be continuing a Material Adverse Effect.
7. Conditions
of the Company’s Obligations at Closing
and
any Option Closing.
The
obligations of the Company to the Investors under this Agreement are subject
to
the fulfillment on or before the Closing or the Option Closing, as applicable,
of each of the following conditions by the Investors:
8
7.1 Representations
and Warranties.
The
representations and warranties of the Investors contained in Section 4
shall be
true and correct in all material respects (except for any representations
qualified by materiality or Material Adverse Effect, which shall be true and
correct in all respects) on and as of the Closing Date or the Option Closing,
as
applicable (except for any representations and warranties made as of a specified
date, which shall be true and correct in all material respects or true and
correct in all respects, as applicable, as of such specified date).
7.2 Performance.
The
Investors shall have performed and complied in all material respects with all
agreements, obligations, and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing or
the
Option Closing, as applicable.
7.3 Certificate
of Designations.
Prior
to the Closing, the Certificate of Designations shall have been filed with
the
Secretary of State of Delaware and the Certificate of Incorporation as modified
by the Certificate of Designations shall be in full force and
effect.
7.4 Registration
Rights Agreement.
The
Investors shall have entered into the Registration Rights Agreement and the
Registration Rights Agreement shall be in full force and effect.
|
8.
|
Indemnification.
|
8.1 Indemnification
by
the Company.
Subject
to the provisions of this Section
8,
the
Company shall indemnify and hold harmless the Investors, their respective
successors and assigns, and their respective officers, directors, employees,
agents and Affiliates (“Investor
Indemnified Persons”)
from
and against, and shall reimburse Investor Indemnified Persons for, any and
all
losses, liabilities, claims, obligations, damages, deficiencies, assessments,
levies, fines, penalties, costs, or reasonable and documented legal expenses,
whether or not involving a third-party claim (collectively, “Losses”),
arising out of, based upon or in any way relating to
any
inaccuracy in or breach of any representation or warranty of the Company set
forth in this Agreement or any breach by the Company of, or failure of the
Company to comply with, any covenant, agreement or other obligation of the
Company in this Agreement.
8.2 Indemnification
by the Investors. Subject
to the provisions of this Section
8,
each
Investor shall, on a several (but not joint) basis, indemnify and hold harmless
the Company, its successors and assigns, and its officers, directors, partners,
members, employees, agents and Affiliates (“Company
Indemnified Persons”)
from
and against, and shall reimburse Company Indemnified Persons for, any and all
Losses, arising
out of, based upon or in any way relating to any inaccuracy in or breach of
any
representation or warranty of such Investor set forth in this Agreement or
any
breach by such Investor of, or failure of such Investor to comply with, any
covenant, agreement or other obligation of such Investor in this
Agreement.
8.3 Defense
of Third Party Claims. If
any
legal proceedings shall be instituted or any claim is asserted by any third
party in respect of which any party hereto may have an obligation
9
to indemnify another party, the party asserting such right
to
indemnity (the “Indemnified
Party”)
shall
give the party from whom indemnity is sought (the “Indemnifying
Party”)
written notice thereof, but any failure to so notify the Indemnifying Party
shall not relieve it from any liability that it may have to the Indemnified
Party, other than to the extent the Indemnifying Party is actually prejudiced
thereby. Such written notice shall describe in reasonable detail the facts
constituting the basis for such third-party claim and the amount of the
potential Loss, in each case, to the extent known. The Indemnifying Party shall
have the right, at its option and expense, to participate in the defense of
such
proceeding or claim, but not to control the defense, negotiation or settlement
thereof, which control shall at all times rest with the Indemnified Party,
unless the Indemnifying Party (a) notifies the Indemnified Party of such defense
in writing within thirty days after the Indemnified Party has given notice
of
the third party claim, (b) furnishes satisfactory evidence of its financial
ability to indemnify the Indemnified Party, and (c) conducts the defense of
the
third party claim actively and diligently; in which case, the Indemnifying
Party
may assume such control at its expense through counsel reasonably satisfactory
to such Indemnified Party; provided,
however, that:
(w) the
Indemnified Party shall be entitled to participate in the defense of such claim
and to employ counsel at its own expense to assist in the handling of such
claim; (x) the Indemnifying Party shall obtain the prior written approval of
the
Indemnified Party before entering into any settlement of such claim or ceasing
to defend against such claim (with such approval not to be unreasonably
withheld); (y) no Indemnifying Party shall consent to the entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by each claimant or plaintiff to each Indemnified Party
of a
release from all liability in respect of such claim; and (z) the Indemnifying
Party shall not be entitled to control (but shall be entitled to participate
at
its own expense in the defense of), and the Indemnified Party shall be entitled
to have sole control over, the defense or settlement of any claim to the extent
the claim seeks an order, injunction, non-monetary or other equitable relief
against the Indemnified Party which, if successful, could materially interfere
with the business, operations, assets, condition (financial or otherwise) or
prospects of the Indemnified Party.
After written notice by the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of any such action, the Indemnifying Party shall not be liable to such Indemnified Party hereunder for any legal expenses subsequently incurred by such Indemnified Party in connection with the defense thereof other than reasonable costs of investigation. If the Indemnifying Party does not assume control of the defense of such claim as provided in this Section 8.3, the Indemnified Party shall have the right to defend such claim in such manner as it may deem appropriate at the cost and expense of the Indemnifying Party, and the Indemnifying Party will promptly reimburse the Indemnified Party therefor in accordance with this Section 8.3. The reimbursement of fees, costs and expenses required by this Section 8.3 shall be made by periodic payments during the course of the investigations or defense, as and when bills are received or expenses incurred.
8.4 Other
Claims.
A claim
for indemnification for any matter not involving a third-party claim shall
be
asserted by the Indemnified Party to the Indemnifying Party in writing, setting
forth specifically the obligation with respect to which the claim is made,
the
facts giving rise to and the alleged basis for such claim and, if known or
reasonably ascertainable, the amount of the liability asserted or which may
be
asserted by reason thereof, but any failure to so notify the Indemnifying Party
shall not relieve it from any liability that it may have to the Indemnified
Party other than to the extent the Indemnifying Party is actually prejudiced
thereby.
10
|
9.
|
Miscellaneous.
|
9.1 Governing
Law.
This
Agreement shall be governed in all respects by the laws of the State of Delaware
without regard to choice of laws or conflict of laws provisions thereof.
9.2 Survival.
The
representations, warranties, covenants, and agreements made herein shall survive
any investigation made by any Investors and the closing of the transactions
contemplated hereby. All statements of the Company as to factual matters
contained in any certificate or exhibit delivered by or on behalf of the Company
pursuant hereto shall be deemed to be the representations and warranties of
the
Company hereunder as of such date of such certificate or exhibit.
9.3 Successors
and Assigns.
Except
as otherwise provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto; provided, however, that the rights of
the
Investors to purchase the Purchased Shares or the Option Shares, as applicable,
shall not be assignable to a third party who is not an affiliate of an Investor
without the consent of the Company. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto
or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
by this Agreement.
9.4 Entire
Agreement.
This
Agreement and the other documents delivered pursuant hereto constitute the
full
and entire understanding and agreement among the parties with regard to the
subjects hereof and thereof.
9.5 Notices,
Etc.
All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by registered or certified mail, postage prepaid,
return receipt requested, or otherwise delivered by hand or by messenger,
addressed (a) for the Investors, to each Investor’s address as set forth on
the signatures page of this Agreement, or to such other address as the Investors
shall have furnished to the Company in writing, or (b) for the Company, to
its address as set forth on the signature page of this Agreement addressed
to
the attention of the Corporate Secretary, or to such other address as the
Company shall have furnished to the Investor. Any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given (x) upon delivery, when delivered personally or by overnight courier
or successful fax delivery (with a copy of such fax sent by U.S. mail) or
(y) at the time received, if sent by registered or certified mail, postage
prepaid.
9.6 Waiver.
Any
waiver, permit, consent or approval of any kind or character on the part of
any
holder of any breach or default under this Agreement, or any waiver on the
part
of any holder of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in
such
writing or as provided in this Agreement, and shall not be construed to be
a
waiver of any other breach or default theretofore or thereafter occurring.
All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
11
9.7 Expenses.
Each of
the Company and the Investors shall be responsible for their own fees and
expenses, including the fees and expenses of legal counsel, arising from the
negotiation and entry into this Agreement and the consummation of transactions
contemplated hereby.
9.8 Amendments.
Any
term of this Agreement may be amended only with the written consent of each
of
the parties hereto. Any amendment effected in accordance with this paragraph
shall be binding upon each holder of any securities purchased under this
Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities and
the
Company.
9.9 Finder’s
Fee.
The
Company and the Investors each hereby represent and warrant to the other party
that no finders or brokers were utilized in the sale of the Purchased Shares.
9.10
Counterparts.
This
Agreement may be executed in any number of counterparts and signatures may
be
delivered by facsimile, each of which may be executed by less than all parties,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one
instrument.
9.11
Severability.
If any
provision of this Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, portions of such provision,
or such provision in its entirety, to the extent necessary, shall be severed
from this Agreement and the balance of this Agreement shall be enforceable
in
accordance with its terms.
9.12
Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
[THIS
SPACE LEFT BLANK INTENTIONALLY]
12
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
|
COMPANY:
|
||||
|
|
||||
|
VISKASE
COMPANIES, INC.
|
||||
|
|
||||
|
|
||||
|
By:
|
/s/
|
|||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, President and Chief Executive Officer
|
||||
|
|
||||
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
||||
|
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
|
|
||||
|
For
notice purposes, with a copy to:
|
||||
|
|
||||
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
||||
|
Jenner
& Block LLP
|
||||
|
▇▇▇
▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
||||
|
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
Signature
Page to Series A Preferred Stock Purchase Agreement
|
INVESTOR:
|
||||
|
|
||||
|
KOALA
HOLDING LLC
|
||||
|
|
||||
|
|
||||
|
By:
|
/s/
|
|||
|
|
||||
|
c/o
Icahn Associates Corp.
|
||||
|
▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
||||
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
|
|
||||
|
For
notice purposes, with a copy to:
|
||||
|
|
||||
|
Icahn
Associates Corp.
|
||||
|
▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
|
||||
|
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
|
||||
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
|
|
||||
|
INVESTOR:
|
||||
|
|
||||
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇, LTD.
|
||||
|
|
||||
|
|
||||
|
By:
|
/s/
|
|||
|
|
||||
|
▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
|
||||
|
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
|
||||
|
Attn:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
||||
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
|
|
||||
|
For
notice purposes, with a copy to:
|
||||
|
|
||||
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
||||
|
▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇
|
||||
|
▇▇
▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
|
||||
|
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
||||
|
|
||||
|
INVESTOR:
|
||||
|
|
||||
|
NORTHEAST
INVESTORS TRUST
|
||||
|
|
||||
|
|
||||
|
By:
|
/s/
|
|||
|
|
||||
|
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
|
||||
|
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ 02110-1745
|
||||
|
Attn:
▇▇▇▇▇ ▇▇▇▇▇▇
|
||||
|
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
|
||||
SCHEDULE
I
PARTICIPATING
INVESTORS
|
Investor
|
Number
of
Purchased
Shares
|
Purchase
Price
|
|||||
|
Koala
Holding LLC
|
10,769,231
|
$
|
21,000,000.45
|
||||
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇, Ltd.
|
1,025,641
|
$
|
1,999,999.95
|
||||
|
Northeast
Investors Trust
|
512,820
|
$
|
999,999.00
|
||||
|
Total
|
12,307,692
|
$
|
24,000,000
|
||||
Exhibit
D
Rights
Offering Term Sheet
This
Memorandum of Terms summarizes the principal terms of the proposed offering
(the
“Rights
Offering”)
by
Viskase Companies, Inc. (the “Company”)
of
subscription rights (the “Subscription
Rights”)
to
purchase shares of common stock, par value $0.01 per share (the “Common
Stock”),
of
the Company, for the purpose of redeeming outstanding shares of Series A
Convertible Preferred Stock, par value $0.01 per share, of the Company (the
“Series
A Preferred Stock”).
The
Series A Preferred Stock has been sold by the Company to certain investors
pursuant to the Series A Preferred Stock Purchase Agreement, dated November
7,
2006 (the “Stock
Purchase Agreement”)
|
Number
of Rights:
|
An
aggregate of 12,307,692 Rights will be issued on a ratable basis
in
respect of the issued and outstanding shares of Common Stock at the
time
of the commencement of the Rights Offering.
|
|
Exercise
Price:
|
Each
Subscription Right shall entitle the holder thereof (a “Holder”)
to subscribe for shares of Common Stock at a ratio of one (1) share
of
Common Stock per Subscription Right (the “Rights
Conversion Ratio”),
subject to adjustment as set forth below. The exercise price per
Subscription Right (the “Exercise
Price”)
shall be equal to $1.95
per
share of the Common Stock. The Subscription Rights will be exercisable
for
an aggregate exercise price of $24 million.
|
|
Adjustments:
|
If
a stock dividend or other distribution, recapitalization, forward
or
reverse stock split, subdivision, consolidation or reduction of capital,
reorganization, merger, consolidation, scheme or arrangement, split-up,
spin-off or combination, or similar transaction or event affects
the
number of shares of Common Stock issuable upon exercise of the
Subscription Rights (shares of Common Stock issuable upon the exercise
of
all Subscription Rights, the “Registrable
Shares”),
the Company will make an equitable change or adjustment as it deems
appropriate in the number and kind of securities subject to or to
be
issued in connection with the exercise of the Subscription Rights
and the
Exercise Price of the Subscription Rights. No fractional shares of
Common
Stock will be issued upon the exercise of Subscription Rights. When
any
exercise of Subscription Rights would result in the issuance of a
number
of shares of Common Stock that is not a whole number, the actual
number of
shares will be rounded down to the next lower whole number with no
further
payment or other distribution
therefor.
|
|
Offering
Period:
|
The
Subscription Rights (and related oversubscription rights) shall become
exercisable on the effective date of the registration statement for
the
registration of Registrable Shares (the “Commencement
Date”)
and shall expire at 5:00 p.m. New York City time within sixty (60)
calendar days after the Commencement Date (the “Expiration
Time”)
but in no event shall the Expiration Time occur more than one hundred
eighty (180) calendar days from the Closing (as defined in the Stock
Purchase Agreement). Prior to the expiration of such period, any
Holder
desiring to participate in the Rights Offering must exercise all
or any
portion of its Subscription Rights (and related oversubscription
rights,
if desired). Any exercise of Subscription Rights (and related
oversubscription rights) will be irrevocable. At the Expiration Time,
unexercised Subscription Rights shall terminate and be null and void
and
the Company shall not be obligated to honor any such purported exercise
received by the Company or its designee after the Expiration Time,
regardless of when the documents relating to such exercise were sent.
|
|
Transferability:
|
The
Subscription Rights are at all times transferable but, prior to the
Commencement Date, shall not be exercisable.
|
|
Exercise
Procedures:
|
In
order to exercise Subscription Rights, each Holder must: (a) return
a duly
completed subscription form (the “Subscription
Form”)
to the Company or its designee so that such form is actually received
by
the Company or its designee on or before the Expiration Time; and
(b) pay
to the Company or its designee on or before the Expiration Time the
aggregate Exercise Price for all of the Company Common Stock purchased
pursuant to the Holder’s exercise of the Subscription Rights in accordance
with the wire instructions set forth on the Subscription Form or
by bank
or cashier’s check or certificates representing Series A Preferred Stock
delivered to the Company or its designee along with the Subscription
Form.
If, on or prior to the Expiration Time, the Company or its designee
for
any reason does not receive a duly completed Subscription Form and
immediately available funds in an amount equal to the aggregate Exercise
Price, the Subscription Rights shall be deemed to have been unexercised
and to terminate and be null and void. The Company shall adopt such
detailed procedures as is necessary to efficiently administer the
exercise
of the Subscription Rights and shall prepare documents that reflect
the
terms herein and such other terms as the Company shall determine
to be
appropriate in the implementation
hereof.
|
|
Incidents
of Ownership:
|
The
Subscription Rights shall have no rights, powers or privileges other
than
as expressly set forth herein, and in particular, the Subscription
Rights
shall have no voting rights, dividend rights, conversion rights,
preemption rights, liquidation rights or other rights of a stockholder.
|
|
Use
of Proceeds:
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Upon
the exercise of Subscription Rights, all proceeds thereof shall be
applied
to the redemption of the Series A Preferred
Stock.
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Administration:
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All
questions concerning the timeliness, viability, form and eligibility
of
any exercise of Subscription Rights shall be determined by the Company
whose determination shall be final and binding. The Company may waive
in
its sole discretion any defect or irregularity, or permit a defect
or
irregularity to be corrected within such times as it may determine,
or
reject the purported exercise of any Subscription Rights that the
Company
has determined to have failed to comply with the applicable requirements.
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Extension/Termination:
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The
Company shall have the option of extending the period of the Rights
Offering, at its sole discretion; provided that, in no event shall
the
Expiration Time occur more than one hundred eighty (180) calendar
days
from the Closing (as defined in the Stock Purchase Agreement). The
Company
shall also have the right to withdraw or terminate the Rights Offering
at
any time and for any reason. In the event the Rights Offering is
withdrawn
or terminated, all funds received from subscriptions will be returned
(without interest), except to the extent Common Stock has already
been
issued in respect of any such
subscriptions.
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