EXHIBIT 4.3
EXECUTION COPY
EQUITY REGISTRATION RIGHTS AGREEMENT
DATED AS OF JUNE 29, 2004
BETWEEN
VISKASE COMPANIES, INC.
AND
XXXXXXXXX & COMPANY, INC.
This Equity Registration Rights Agreement (the "Agreement") is made and
entered into as of June 29, 2004, between Viskase Companies, Inc., a Delaware
corporation (the "Company"), and Xxxxxxxxx & Company, Inc. (the "Initial
Purchaser"), who has agreed to purchase from the Company, pursuant to the
Purchase Agreement (as defined below) (i) 90,000 units (the "Units"), each Unit
consisting of (A) $1,000 in aggregate principal amount of an 11-1/2% Senior
Secured Note due 2011 of the Company (the "Notes") and (B) one warrant
representing the right to purchase 8.947 shares of common stock, par value $0.01
per share, of the Company (the "Common Stock"), at an exercise price of $0.01
per share, subject to adjustment (collectively, the "Warrants"). The Common
Stock issuable upon exercise of the Warrants are hereinafter collectively
referred to as the "Warrant Shares".
This Agreement is made pursuant to the Purchase Agreement (the "Purchase
Agreement"), dated as of June 17, 2004, between the Company and the Initial
Purchaser. To induce the Initial Purchaser to purchase the Warrants, the Company
has agreed to provide the registration rights set forth in this Agreement. The
execution and delivery of this Agreement is a condition to the obligations of
the Initial Purchaser set forth in Section 3 of the Purchase Agreement. Unless
otherwise defined herein, capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to them in the Purchase Agreement.
The parties hereby agree as follows:
Section 1. Definitions.
As used in this Agreement, the following capitalized terms shall have the
following meanings:
"Affiliate": As defined in Rule 144 of the Securities Act.
"Closing Date": The date hereof.
"Common Stock": The common stock, par value $0.01 per share, of the
Company.
"Effectiveness Date": The 270th day after the Closing Date.
"Exchange Act": The Securities Exchange Act of 1934, as amended.
"Existing Holders": As defined in Section 6(b) hereof.
"Filing Date": The 180th day after the Closing Date.
"Holder": As defined in Section 2 hereof.
"NASD": means the National Association of Securities Dealers, Inc.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Piggy-Back Registration": As defined in Section 6 hereof.
"Prospectus: The prospectus included in a Registration Statement at the
time such Registration Statement is declared effective, as supplemented by any
prospectus supplement, and all material incorporated by reference into such
prospectus.
"Public Equity Offering": means an underwritten offering of Common Stock
pursuant to a registration statement that has been declared effective by the SEC
pursuant to the Securities Act (other than a registration statement on Form S-8
or otherwise relating to equity securities issuable under any employee benefit
plan of the Company).
"Registrable Securities": At any time, any of (i) the Warrant Shares
(whether or not the related Warrants have been exercised) and (ii) any other
securities issued or issuable with respect to any Warrant Shares by way of stock
dividends or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise. As
to any particular Registrable Securities, such securities shall cease to be
Registrable Securities when (a) a Registration Statement with respect to the
offering of such securities by the Holder thereof shall have been declared
effective under the Securities Act and such securities shall have been disposed
of by such Holder pursuant to such Registration Statement, (b) such securities
have been sold to the public pursuant to Rule 144(k) (or any similar provisions
then in force, but not Rule 144A) promulgated under the Securities Act, (c) such
securities shall have been otherwise transferred by the Holder thereof and new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force or
(d) such securities shall have ceased to be outstanding.
"Registration Statement": Any registration statement of the Company
relating to, or entitling a Holder to request, the registration for resale of
Registrable Securities, including the Prospectus included therein, all
amendments thereto (including post-effective amendments) and all exhibits and
all material incorporated by reference therein.
"Restricted Securities": As defined in Rule 144 of the Securities Act.
"SEC": The Securities and Exchange Commission.
"Securities Act": The Securities Act of 1933, as amended.
"Shelf Registration Statement": As defined in Section 4 hereof.
"Warrant Agreement": The Warrant Agreement dated the Closing Date by and
between the Company and Xxxxx Fargo Bank, National Association, as Warrant
Agent.
"Warrant Shares": The Common Stock or other securities that any Holder may
acquire upon exercise of a Warrant, together with any other securities which
such Holder may acquire on account of any such securities, including, without
limitation, as the result of any dividend or other distribution on Common Stock
or any split or combination of such Common Stock as provided for in the Warrant
Agreement.
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"Warrants": The warrants of the Company issued and sold pursuant to the
Purchase Agreement and the Warrant Agreement, together with any warrants issued
in substitution or replacement therefor.
Section 2. Holders of Registrable Securities.
A Person is deemed to be a Holder of Registrable Securities (a "Holder")
whenever such Person owns Registrable Securities or has the right to acquire
such Registrable Securities by exercising Warrants held by such Person, whether
or not such acquisition has actually been effected.
Section 3. Registration Procedures.
In connection with any Registration Statement filed by the Company, the
Company shall:
(a) (i) furnish to the Holders, prior to the filing thereof with the
Commission, a copy of the Registration Statement (including all such
documents incorporated therein by reference) and each amendment thereof
and each supplement, if any, to the Prospectus, which documents will be
subject to the review and comment of such Holders in connection with such
sale, if any, for a period of at least five business days, and the Company
will not file any such Registration Statement or related Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus
(including all documents incorporated therein by reference) to which such
selling Holders shall reasonably object within five business days after
the receipt thereof; and (ii) include the names of the Holders who propose
to sell Registrable Securities pursuant to the Registration Statement as
selling securityholders. A selling Holder shall be deemed to have
reasonably objected to such filing if such Registration Statement,
amendment, related Prospectus or supplement, as applicable, as proposed to
be filed, contains an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading
or fails to comply with the applicable requirements of the Securities Act;
(b) give written notice to the Initial Purchaser and the Holders:
(i) when the Registration Statement or any amendment thereto
has been filed with the SEC and when the Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the SEC for amendments or supplements
to the Registration Statement or the Prospectus or for additional
information;
(iii) of the issuance by the SEC of any stop order suspending
the effectiveness of the Registration Statement or the initiation of
any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of
the Registrable
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Securities for sale in any jurisdiction or the initiation or
threatening in writing of any proceeding for such purpose; and
(v) of the happening of any event that requires the Company to
make changes in the Registration Statement or the Prospectus in
order that the Registration Statement or the Prospectus does not
contain an untrue statement of a material fact nor omit to state a
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.;
(c) make every reasonable effort to obtain the withdrawal at the
earliest possible time, of any order suspending the effectiveness of the
Registration Statement;
(d) furnish to each Holder, without charge, at least one copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, if the Holder so requests in
writing, all exhibits thereto (including those, if any, incorporated by
reference);
(e) during the period which the Registration Statement is effective,
deliver to each Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in the Registration
Statement as such Holder may reasonably request. The Company consents,
subject to the provisions of this Agreement, to the use of the Prospectus
by each of the Holders in connection with the offering and sale of
Registrable Securities;
(f) prior to any public offering of the Registrable Securities
pursuant to any Registration Statement, register or qualify or reasonably
cooperate with the Holders and their respective counsel in connection with
the registration or qualification of the Registrable Securities for offer
and sale under the securities or "blue sky" laws of such states of the
United States as any Holder reasonably requests in writing and do any and
all other acts or things necessary or reasonably advisable to enable the
offer and sale in such jurisdictions of the Registrable Securities;
provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it is not then so
qualified or (ii) take any action which would subject it to general
service of process or to taxation in any jurisdiction where it is not then
so subject;
(g) use reasonable good faith efforts to cooperate with the Holders
to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such
denominations and registered in such names as the Holders may request a
reasonable period of time prior to sales of the Registrable Securities
pursuant to such Registration Statement;
(h) upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 3(b) above during the period for which the Company
is required to maintain an effective Registration Statement, prepare and
file as soon as reasonably practicable a post-effective amendment to the
Registration Statement or a supplement to
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the related Prospectus and any other required document so that, as
thereafter delivered to Holders or purchasers of Securities, the
Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading;
(i) not later than the effective date of the Registration Statement,
provide a CUSIP number for the Registrable Securities and provide the
Warrant Agent with printed certificates for the Registrable Securities, in
a form eligible for deposit with The Depository Trust Company;
(j) use its reasonable best efforts to comply with all rules and
regulations of the Commission to the extent and so long as they are
applicable to the Registration Statement and will make generally available
to its security holders (or otherwise provide in accordance with Section
11(a) of the Securities Act) an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45 days
after the end of a 12-month period (or 90 days, if such period is a fiscal
year) beginning with the first month of the Company's first fiscal quarter
commencing after the effective date of the Registration Statement, which
statement shall cover such 12-month period;
(k) require, at the Company's option, each Holder of Registrable
Securities to be sold pursuant to a Registration Statement to furnish to
the Company such information as may be required or reasonably advisable
(i) under applicable requirements of the SEC or (ii) to obtain any
acceleration of the effective date of a Registration Statement, and the
Company may exclude from such registration the Registrable Securities of
any Holder that fails to furnish such information within 20 business days
after receiving such request;
(l) enter into such customary agreements and take all such other
action, if any, in order to facilitate the disposition of the Registrable
Securities pursuant to any Registration Statement;
(m) (i) make reasonably available for inspection by the Holders of
the Registrable Securities and any attorney, accountant or other agent
retained by the Holders of the Registrable Securities all pertinent
financial and other relevant corporate records of the Company and its
subsidiaries and (ii) cause the officers, directors, employees,
accountants and auditors of the Company and its subsidiaries to supply all
relevant information reasonably requested by the Holders of the
Registrable Securities or any such attorney, accountant or agent in
connection with the Registration Statement, in each case, as shall be
reasonably necessary to enable such Persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, any such records, documents, properties and such
information that is designated in writing by the Company, in good faith,
as confidential at the time of delivery of such records, documents,
properties or information shall be kept confidential by any such Persons
pursuant to the terms of a confidentiality agreement between the Company
and such Persons containing customary terms and provisions and in form and
substance reasonably satisfactory to the Company and such Persons,
prohibiting the use or disclosure of any such information, except as
required by law or legal process or as otherwise provided therein.
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(n) if requested by any Holder of Registrable Securities, cause (i)
its counsel to deliver an opinion and updates thereof relating to the
Registrable Securities, containing opinions customary for transactions of
this type and customary assumptions and qualifications, addressed to such
Holders thereof and dated, in the case of the initial opinion, the
effective date of such Registration Statement (it being agreed that the
matters to be covered by such opinion shall include, without limitation,
as of the date of the opinion and as of the effective date of the
Registration Statement or most recent post-effective amendment thereto, as
the case may be, a statement that it has not come to such counsel's
attention that such Registration Statement and the prospectus included
therein, as then amended or supplemented, and any documents incorporated
by reference therein contain an untrue statement of a material fact or
omit to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of the prospectus,
in light of the circumstances under which they were made, and in the case
of any such documents, in light of the circumstances existing at the time
that such documents were filed with the SEC under the Exchange Act) not
misleading); (ii) its independent public accountants to provide to the
Holders a comfort letter in customary form and covering matters of the
type customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards
No. 72; and (iii) use its reasonable best efforts to cause the disposition
of the Registrable Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities; provided,
however, that the Company shall not be required to (i) qualify generally
to do business in any jurisdiction where it is not then so qualified or
(ii) take any action which would subject it to general service of process
or to taxation in any jurisdiction where it is not then so subject.
If any such Registration Statement refers to any Holder by name or
otherwise as the holder or any securities of the Company, then such Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
by such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of the
reference to such Holder in any amendment or supplement to the Registration
Statement filed or prepared subsequent to the time that such reference ceases to
be required.
Section 4. Shelf Registration.
(a) The Company shall use its reasonable best efforts to (i) on or
before the Filing Date, prepare and cause to be filed with the SEC
pursuant to Rule 415 under the Securities Act a shelf registration
statement on the appropriate form relating to resales of all Registrable
Securities (the "Shelf Registration Statement", (ii) cause the Shelf
Registration Statement to be declared effective under the Securities Act
on or prior to the
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Effectiveness Date and (iii) keep any Shelf Registration Statement
required by this Section 4(a) continuously effective, supplemented,
amended and current as required by and subject to the provisions of
Section 4(a) hereof and in conformity with the requirements of this
Agreement, the Securities Act and the rules and regulations of the
Commission promulgated thereunder from time to time (including (A)
preparing and filing with the SEC such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary to keep
such Shelf Registration Statement effective; (B) cause the Prospectus to
be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 under the Securities Act,
and complying fully with Rules 424, 430A and 462, as applicable, under the
Securities Act in a timely manner; and (C) comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such Shelf Registration Statement), until the second
anniversary of the effective date of such Shelf Registration Statement;
provided that such obligation shall expire before such date if all the
Registrable Securities covered by the Shelf Registration Statement (i)
have been sold pursuant thereto or (ii) are no longer Restricted
Securities.
(b) No Holder may include any of its Registrable Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 20 business days
after receipt of a request therefor, the information specified in Item 507
or 508 of Regulation S-K, as applicable, of the Securities Act for use in
connection with any Shelf Registration Statement or Prospectus or
preliminary Prospectus included therein. Each selling Holder agrees to
promptly furnish additional information required to be disclosed in order
to make the information previously furnished to the Company by such Holder
not materially misleading.
(c) The Company shall be deemed not to have used its best efforts to
keep the Shelf Registration Statement effective during the requisite
period if it voluntarily takes any action that would result in Holders of
Registrable Securities covered thereby not being able to offer and sell
such Registrable Securities during that period, unless such action is
required by applicable law or this Agreement.
Section 5. Limitations, Conditions and Qualifications to Obligations under
Registration Covenants.
(a) The obligations of the Company described in Section 4 and
Section 6 of this Agreement are subject to the obligations of the Holders
(i) to furnish all information and materials described in Section 3(k)
hereof and (ii) to take any and all actions as may be required under
Federal and state securities laws and regulations to permit the Company to
comply with all applicable requirements of the SEC and to obtain any
acceleration of the effective date of such Registration Statement.
(b) Notwithstanding anything to the contrary in this Agreement,
subject to the next sentence of this paragraph, the Company shall be
entitled to postpone, for a reasonable period of time, the effectiveness
of, or suspend the rights of any selling Holders Registrable Securities to
make sales pursuant to any Registration Statement otherwise required to be
prepared, filed and kept effective by it under Section 4 or 6 in
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the event that, and for a period (a "Blackout Period") not to exceed an
aggregate of 90 days in any 12-month period, the board of directors of the
Company determines, in good faith, that (1) an event or circumstance
occurs and is continuing as a result of which the Registration Statement,
any related Prospectus or any document incorporated therein by reference
as then amended or supplemented or proposed to be filed would, in the good
faith judgment of the Company's board of directors, contain an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and (2) (a) the disclosure of
an event, occurrence or other item at that time would reasonably be
expected to have a material adverse effect on the Company's business,
operations or prospects or (b) the disclosure otherwise relates to a
material business transaction or development that has not yet been
publicly disclosed and the board of directors also determines, in good
faith, that any disclosure thereof would jeopardize the success of the
transaction or that disclosure of the transaction is prohibited by the
terms thereof. If the Company shall so postpone the effectiveness of, or
suspend the rights of any selling Holders of Registrable Securities to
make sales pursuant to, a Registration Statement, it shall, as promptly as
possible, notify any selling Holders of Registrable Securities of such
determination, and the selling Holders of Registrable Securities shall (x)
have the right, in the case of a postponement of the effectiveness of a
Registration Statement, upon the affirmative vote of selling Holders of
Registrable Securities of not less than a majority of the Registrable
Securities to be included in such Registration Statement, to withdraw the
request for registration by giving written notice to the Company within 10
days after receipt of such notice or (y) in the case of a suspension of
the right to make sales, receive an extension of the registration period
referred to in Section 4(a) or Section 6(a) hereof, as applicable, equal
to the number of days of the suspension.
(c) Each Holder agrees, if and to the extent requested by the
managing underwriter or underwriters in a Public Equity Offering, not to
effect any public sale or distribution of Resalable Securities, including
a sale pursuant to Rule 144A (except as part of such Public Equity
Offering), during the 90 day period beginning on the closing date of any
such Public Equity Offering (which period may be extended to 180 days in
the case of the Company's initial Public Equity Offering), to the extent
timely notified in writing by the Company or such managing underwriter or
underwriters. In the event that the Company is not otherwise in compliance
with the provisions of this Agreement at the time the Company or such
managing underwriter or underwriters send notice pursuant to this Section
5(c), the Holders shall not be required to comply with this Section 5(c).
In addition, the provisions of this Section 5(c) shall not apply to any
Holder of Registrable Securities if such Holder is prevented by applicable
statute or regulation from entering into any such agreement; provided,
that any such Holder shall undertake not to effect any public sale or
distribution of any Registrable Securities commencing on the closing date
of any such Public Equity Offering unless it has provided 45 days' prior
written notice of such sale or distribution to the managing underwriter or
underwriters.
Section 6. Piggy-Back Registration of Registrable Securities.
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(a) If at any time after the Closing Date the Company proposes to
file a registration statement under the Securities Act with respect to a
Public Equity Offering, then the Company shall give written notice of such
proposed filing to the Holders of Registrable Securities as soon as
practicable (but in no event fewer than 20 days before the anticipated
filing date), and such notice shall offer such Holders the opportunity to
register such number of Registrable Securities as each Holder may request
in writing within 10 business days after receipt of such written notice
from the Company (which request shall specify the Registrable Securities
intended to be disposed of by such selling Holder of Registrable
Securities and the intended method of distribution thereof) (a "Piggy-Back
Registration"); provided that any holder of Warrants so requesting shall
agree, upon or prior to effectiveness of any such Registration Statement
other than a registration statement filed with the SEC pursuant to Rule
415 under the Securities Act (but in no event earlier than the Separation
Date (as defined in the Warrant Agreement)), to exercise their Warrants at
least to the extent necessary for such holder to acquire the number of
Registrable Securities for which such holder has requested registration;
provided, further, that no Holder of Registrable Securities shall have
"piggy-back" registration rights with respect to their Registrable
Securities for any registration statement filed by the Company to register
exchange notes for the Notes pursuant to the Registration Rights
Agreement, dated as of June 29, 2004, by and between the Company and the
Initial Purchaser. The Company shall use its reasonable best efforts to
keep such Piggy-Back Registration continuously effective under the
Securities Act until at least the earlier of (a) the second anniversary of
the effective date thereof or (b) the consummation of the distribution by
the Holders of all of the Registrable Securities covered thereby. The
Company shall use its reasonable best efforts to cause the managing
underwriter or underwriters, if any, of such proposed offering to permit
the Registrable Securities requested to be included in a Piggy-Back
Registration to be included on the same terms and conditions as any
similar securities of the Company or any other security holder included
therein and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method of distribution thereof.
Any selling Holder of Registrable Securities shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
Shelf Registration Statement pursuant to this Section 6 by giving written
notice to the Company of its request to withdraw a reasonable time prior
to the filing of such Shelf Registration Statement with the SEC. The
Company will pay all registration expenses described in Section 7 hereof
in connection with each registration of Registrable Securities requested
pursuant to this Section 6, and each Holder of Registrable Securities
shall pay all underwriting discounts and commissions and transfer taxes,
if any, relating to the sale or disposition of such Holder's Registrable
Warrant Shares pursuant to a Piggy-Back Registration effected pursuant to
this Section 6.
No registration effected under this Section 6, and no failure to
effect a registration under this Section 6, shall relieve the Company of
its obligations to effect a registration pursuant to Section 4 hereof of
any Registrable Securities not included in such Piggy-Back Registration,
and no failure to effect a registration required under this Section 6 and
to complete the sale of securities registered thereunder in connection
therewith shall relieve the Company of any other obligation under this
Agreement.
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(b) Priority in Piggy-Back Registration. In a registration pursuant
to this Section 6 involving an underwritten offering, if the managing
underwriter or underwriters of such underwritten offering have informed,
in writing, the Company and the selling Holders of Registrable Securities
requesting inclusion in such offering that in such underwriter's or
underwriters' opinion the total number of securities which the Company,
the selling Holders of Registrable Securities and any other Persons
desiring to participate in such registration intend to include in such
offering is such as to adversely affect the success of such offering,
including the price at which such securities can be sold, then the Company
will be required to include in such registration only the amount of
securities which it is so advised should be included in such registration.
In such event: (x) in cases initially involving the registration for sale
of securities for the Company's own account, securities shall be
registered in such offering in the following order of priority: (i) first,
the securities which the Company proposes to register, (ii) second,
provided that no securities proposed to be registered by the Company have
been excluded from such registration, the securities that have been
requested to be included in such registration statement by the holders
(collectively, the "Existing Holders") of Registrable Securities (as
defined in that certain Registration Rights Agreement by and among the
Company and High River Limited Partnership, Debt Strategies Fund, Inc. and
Northeast Investors Trust, dated as fo Xxxxx 00, 0000, (xxx) third,
provided that no securities sought to be included by the Existing Holders
have been excluded from such registration, the securities that have been
requested to be included in such registration by the selling Holders of
Registrable Securities (pro rata based on the amount of securities sought
to be registered by such Persons) pursuant to this Agreement, and (iii)
fourth, provided that no securities sought to be included by the selling
Holders of Registrable Securities have been excluded from such
registration, the securities of other Persons entitled to exercise
"piggy-back" registration rights pursuant to contractual commitments of
the Company (pro rata based on the amount of securities sought to be
registered by such Persons); and (y) in cases initially involving the
registration for sale of securities pursuant to demand registration
rights, securities shall be registered in such offering in the following
order of priority: (i) first, the securities of any Person whose exercise
of a "demand" registration right pursuant to a contractual commitment of
the Company is the basis for the registration, (ii) second, provided that
no securities of any Person whose exercise of a "demand" registration
right pursuant to a contractual commitment of the Company is the basis for
such registration have been excluded from such registration, the
securities requested to be included in such registration by the Existing
Holders, (iii) third, provided that no securities sought to be included by
the Existing Holders have been excluded from such registration, the
securities requested to be included in such registration by the selling
Holders of Registrable Securities pursuant to this Agreement (pro rata
based on the amount of securities sought to be registered by such
Persons), (iv) fourth, provided that no securities sought to be included
by the selling Holders of Registrable Securities have been excluded from
such registration, securities of other Persons entitled to exercise
"piggy-back" registration rights pursuant to contractual commitments of
the Company (pro rata based on the amount of securities sought to be
registered by such Persons) and (v) fifth, provided that no securities
sought to be included by other Persons entitled to exercise "piggy-back"
registration rights pursuant to such contractual commitments have
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been excluded from such registration, any securities which the Company
proposes to register.
(c) Exclusion of Registrable Warrant Shares. The Company shall not
be required by this Section 6 to include Registrable Securities in a
Piggy-Back Registration if (i) in the written opinion of outside counsel
to the Company, addressed to the Holders of Registrable Securities and
delivered to them, the Holders of such Registrable Securities seeking
registration would be free to sell all such Registrable Securities within
the current calendar quarter without registration under Rule 144, which
opinion may be based in part upon the representation by the Holders of
such Registrable Securities seeking registration, which representation
shall not be unreasonably withheld, that each such Holder is not an
affiliate of the Company within the meaning of the Securities Act, and
(ii) all requirements under the Securities Act for effecting such sales
are satisfied at such time.
Section 7. Registration Expenses.
(a) All expenses incurred by the Company in connection with its
performance of and compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement is ever filed or becomes
effective, including without limitation:
(i) all registration and filing fees and expenses (including all SEC
and stock exchange and NASD fees and expenses);
(ii) all fees and expenses of compliance with federal securities and
state "blue sky" or securities laws (including, without limitation,
reasonable fees and disbursements of counsel for any underwriters in
connection with blue sky qualifications of the Registrable Securities);
(iii) all expenses of printing, preparing, filing, duplicating and
distributing a Registration Statement and the related prospectus
(including certificates for the Securities to be issued in the
registration and printing of Prospectuses) requested in accordance with
this Agreement,
(iv) messenger and delivery services and telephone usage and costs
and charges of any transfer agent;
(v) all fees and disbursements of counsel for the Company;
(vi) all fees and disbursements of independent certified public
accountants of the Company (including the expenses of any special audit
required by or incident to such performance);
(vii) the fees and commissions of underwriters customarily paid by
issuers or sellers of securities (but not including any underwriting
discounts or commissions or transfer taxes, if any, attributable to the
sale of Registrable Securities by selling Holders);
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(viii) fees and expenses of one counsel for the selling Holders and
other reasonable out-of-pocket expenses of the selling holders not to
exceed $15,000 in the aggregate;
(ix) Securities Act liability insurance, if the Company desires such
insurance;
(x) the fees and expenses of all other Persons retained by the
Company;
(xi) fees and expenses of any "qualified independent underwriter" or
other independent appraiser participating in an offering pursuant to
Section 3 of Schedule E to the By-laws of the NASD, but only where such a
"qualified independent underwriter" is required due to a relationship with
the Company;
(xii) internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees of the
Company performing legal or accounting duties);
(xiii) the expense of any annual audit;
(xiv) the fees and expenses of the Trustee and the Exchange Agent;
and
(xv) the expenses relating to printing, word processing and
distributing all Registration Statements, underwriting agreements,
securities sales agreements, indentures and any other documents necessary
in order to comply with this Agreement.
(b) The Company will bear its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expenses of any annual audit and the fees and
expenses of any Person, including special experts, retained by the Company.
(c) The Holders shall pay the underwriting discounts, commissions, and
transfer taxes, if any, in connection with the Registration Statement requested
under Section 4 or 6, which costs shall be allocated pro rata among all Holders
on whose behalf Registrable Securities of the Company are included in such
registration on the basis of the respective amounts of the Registrable
Securities then being registered on their behalf.
Section 8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Holder and each
Person, if any, who controls such Holder within the meaning of the Securities
Act or the Exchange Act from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof (including, but
not limited to, any losses, claims, damages, liabilities or actions relating to
purchases and sales of the Registrable Securities) to which each Indemnified
Party (as defined in Section 8(c) below) may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary Prospectus relating to a Registration, or arise out of, or are based
upon, the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein (in the case of
the Prospectus, in light of the circumstances under which they were made) not
misleading, except to the extent that Losses are based upon information relating
to such Holder or
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Participating Broker-Dealer and furnished in writing to the Company (or reviewed
and approved in writing) by or on behalf of such Holder or Participating
Broker-Dealer or their counsel expressly for use therein, and shall reimburse,
as incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
(i) the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary Prospectus relating to a Registration Statement in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein and (ii) with respect to any untrue statement or omission
or alleged untrue statement or omission made in any preliminary Prospectus
relating to the Registration Statement, the indemnity agreement contained in
this subsection (a) shall not inure to the benefit of any Holder from whom the
Person asserting any such losses, claims, damages or liabilities purchased the
Registrable Securities concerned, to the extent that the Prospectus was required
to be delivered by such Holder under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Holder results
from the fact that there was not sent or given to such Person, at or prior to
the written confirmation of the sale of such Registrable Securities to such
Person, a copy of the final Prospectus if the Company had previously furnished
copies thereof to such Holder; provided further, however, that this indemnity
agreement will be in addition to any liability which the Company may otherwise
have to such Indemnified Party.
(b) Each Holder of the Registrable Securities, severally and not jointly,
will indemnify and hold harmless the Company and each Person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act from and against any and all losses, claims, damages or liabilities or any
actions in respect thereof, to which the Company or any such controlling Person
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in a Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary Prospectus relating to a Registration
Statement, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein (in the
case of the Prospectus, in light of the circumstances under which they were
made) not misleading, but in each case only to the extent that the untrue
statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, shall reimburse, as incurred, the Company for any legal
or other expenses reasonably incurred by the Company or any such controlling
Person in connection with investigating or defending any loss, claim, damage,
liability or action in respect thereof. This indemnity agreement will be in
addition to any liability which such Holder may otherwise have to the Company or
any of its controlling Persons.
(c) Promptly after receipt by any Person in respect of which indemnity may
be sought pursuant to Section 8(a) or (b) (any such Person, an "Indemnified
Party") under this Section 8 of notice of the commencement of any action or
proceeding (including a governmental investigation), such Indemnified Party
will, if a claim in respect thereof is to be made against the
-13-
indemnifying party under this Section 8, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not, in any event, relieve the indemnifying party from any obligations to any
Indemnified Party other than the indemnification obligation provided in
paragraph (a) or (b) above. In case any such action is brought against any
Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such Indemnified Party of its election so to assume
the defense thereof the indemnifying party will not be liable to such
Indemnified Party under this Section 8 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
Indemnified Party in connection with the defense thereof. No indemnifying party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened action in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party unless such settlement includes an
unconditional release of such Indemnified Party from all liability on any claims
that are the subject matter of such action, and does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
any Indemnified Party. The indemnifying party shall not be liable for the costs
and expenses of any settlement of such action effected by such Indemnified Party
without the consent of the indemnifying party, which consent shall not be
unreasonably withheld.
(d) If the indemnification provided for in this Section 8 is unavailable
or insufficient to hold harmless an Indemnified Party under subsections (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such Indemnified Party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) covered by subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and the
Indemnified Party on the other from the sale of the Registrable Securities by
the Holders, or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and the
Indemnified Party on the other in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) covered by subsection (a) or (b) above as well as any other
relevant equitable considerations. The relative fault of the parties shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or such Holder or such other Indemnified Party, as the case may be, on the
other, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid by
an Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding any other provision of this
Section 8(d), the Holders of the Registrable Securities shall not be required to
contribute any amount in excess of the amount by which the net proceeds received
by such Holders from
-14-
the sale of the Registrable Securities pursuant to the Registration Statement
exceeds the amount of damages which such Holders have otherwise been required to
pay (and for which it was entitled to indemnification hereunder) by reason of
such untrue or alleged untrue statement or omission or alleged omission and with
respect to which such Holder was entitled to indemnification hereunder. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each Person, if any, who controls such Indemnified Party within
the meaning of the Securities Act or the Exchange Act shall have the same rights
to contribution as such Indemnified Party, and each Person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act shall
have the same rights to contribution as the Company.
(e) The agreements contained in this Section 8 shall survive the sale of
the Registrable Securities pursuant to the Registration Statement and shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement or any investigation made by or on behalf of any Indemnified
Party.
Section 9. Rule 144A and Rule 144.
Subject to the Indenture, the Company shall file the reports required to
be filed by it under the Securities Act and the Exchange Act in a timely manner
and, if at any time the Company is not required to file such reports, it will,
upon the request of any Holder, make publicly available other information so
long as necessary to permit sales of their securities pursuant to Rules 144 and
144A. The Company covenants that it will take such further action as any Holder
may reasonably request, all to the extent required from time to time to enable
such Holder to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144 and
144A (including the requirements of Rule 144A(d)(4)). The Company will provide a
copy of this Agreement to prospective purchasers of Registrable Securities
identified to the Company by the Initial Purchaser upon request. Upon the
request of any Holder, the Company shall deliver to such Holder a written
statement as to whether it has complied with such requirements. Notwithstanding
the foregoing, nothing in this Section 9 shall be deemed to require the Company
to register any of its securities pursuant to the Exchange Act.
Section 10. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by the
Company to comply with its obligations under Section 4 and Section 6 hereof may
result in material irreparable injury to the Holders for which there is no
adequate remedy at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of any such failure, any Holder may
obtain such relief as may be required to specifically enforce the Company's
obligations under Section 4 and Section 6 hereof.
(b) No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not
-15-
inconsistent with the rights granted to the holders of the Company's securities
under any agreement in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Company and the written
consent of the Holders of a majority of the Registrable Securities affected by
such amendment, modification, supplement, waiver or consent.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(1) if to a Holder of the Securities, at the most current
address given by such Holder to the Company or Warrant Agent.
(2) if to the Company, at the address as follows:
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
with a copy (which shall not constitute notice) to:
Jenner & Block LLC
Xxx XXX Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq
(3) if to the Warrant Agent, at its address as follows:
Xxxxx Fargo Bank, N.A.
Corporate Trust Services
Sixth and Marquette
MAC X0000-000
Xxxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxx X. Xxxxxxxxx
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(e) Third Party Beneficiaries. It is expressly understood and agreed that
each Holder is intended to be a beneficiary of the Company's covenants contained
in this Agreement to the
-16-
same extent as if those covenants were made directly to such Holder by the
Company, and each such Holder shall have the right to take action against the
Company to enforce, and obtain damages for any breach of, those covenants.
(f) Successors and Assigns. This Agreement shall be binding upon the
Company, the Initial Purchaser and each of their successors and assigns.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
(j) Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(k) Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company or its Affiliates (other
than subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Registrable
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
VISKASE COMPANIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
18 EQUITY REGISTRATION RIGHTS AGREEMENT
XXXXXXXXX & COMPANY, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice Chairman
-19- EQUITY REGISTRATION RIGHTS AGREEMENT
