FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
FIRST
AMENDMENT TO
This
First Amendment Loan and Security Agreement (this “Amendment”),
dated
as of March 28, 2006, is by and between VISKASE
COMPANIES, INC., a
Delaware corporation (the “Borrower”),
and
XXXXX
FARGO FOOTHILL, INC., a
California corporation (the “Lender”).
R
E C I T A L S
A. The
Borrower and the Lender are parties to that certain Loan and Security Agreement
dated as of June 29, 2004 (the “Original
Loan Agreement”).
B. The
parties hereto desire to amend certain of the terms and provisions of the
Original Loan Agreement (as the Original Loan Agreement is amended by this
Amendment, and as the Original Loan Agreement may be further amended, modified
or restated from time, collectively the “Loan
Agreement”)
as
provided herein.
NOW,
THEREFORE,
in
consideration of the premises herein contained, and for other good and valuable
consideration (the receipt, sufficiency and adequacy of which are hereby
acknowledged), the parties hereto (intending to be legally bound) hereby agree
as follows:
1.
Definitions.
Terms
capitalized herein and not otherwise defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.
2.
Amendments
to Original Loan Agreement.
Subject
to the terms and conditions contained herein, the parties hereto hereby amend
the Original Loan Agreement as follows:
(a) Section
1.1
of the
Original Loan Agreement is hereby amended by adding the clause “, which shall
include such sales of Inventory from the Borrower to Viskase Mexico (as defined
herein) subject to Section 7.13(c),” to the end of subsection (b) in the
definition of “Permitted Dispositions.”
(b) Section
6.2
of the
Original Loan Agreement is hereby amended to provide that in all instances
where
any reporting covenants contained therein relate to Inventory, the Borrower
shall report any Inventory of the Borrower located in Mexico separately from
any
other Inventory of the Borrower.
(c) Section
7.1(g)
of the
Original Loan Agreement is hereby amended by deleting subsection (3) in its
entirety and replacing it as follows and by adding a new subsection (4) to
read
as follows:
“,(3)
Borrower or any of its Foreign Subsidiaries to the Borrower or its Foreign
Subsidiaries in an amount not to exceed $5,000,000 in the aggregate at any
time
outstanding minus
the
aggregate dollar amount outstanding at such time of Accounts of the Borrower
directly arising from the sale of Inventory by the Borrower to Viskase del
Norte, S.A. de C.V. (“Viskase
Mexico”)
pursuant to Section 7.13(c) of this Agreement, so long as all such Indebtedness
is subject to the Intercompany Subordination Agreement and (4) Viskase Mexico
to
the Borrower in an amount not to exceed $10,000,000 in the aggregate at any
time
outstanding, which amount represents loans for start-up costs and equipment,
so
long as such Indebtedness of Viskase Mexico to the Borrower is subject to the
Intercompany Subordination Agreement.”
(d) Section
7.13(c)
of the
Original Loan Agreement is hereby amended by inserting the phrase “except solely
with respect to the sale of Inventory from the Borrower to Viskase Mexico at
cost so long as the outstanding amount at any one time does not exceed
$5,000,000 in the aggregate” at the beginning of such section.
(e)
Schedule
5.7(a)
of the
Loan and Security Agreement is hereby deleted in its entirety and Exhibit
A
attached
hereto is substituted therefor.
(f)
Schedule
5.7(b)
of the
Loan and Security Agreement is hereby deleted in its entirety and Exhibit
B
attached
hereto is substituted therefor.
(g)
Schedule
5.7(c)
of the
Loan and Security Agreement is hereby deleted in its entirety and Exhibit
C
attached
hereto is substituted therefor.
(h)
Schedule
5.8(c)
of the
Loan and Security Agreement is hereby deleted in its entirety and Exhibit
D
attached
hereto is substituted therefor.
3.
Waivers.
In
September of 2005, the Borrower formed a new Subsidiary, Viskase del Norte,
S.A.
de C.V., under the laws of Mexico (“Viskase
Mexico”).
The
Borrower has transferred certain of its equipment and inventory located at
its
Indiana facility to Viskase Mexico’s facility (the “Equipment
and Inventory Transfer”)
and
has made certain investments in Viskase Mexico (the “Initial
Investments”).
The
formation of Viskase Mexico, the Equipment and Inventory Transfer and the
Initial Investments have breached certain provisions of the Loan and Security
Agreement. Upon satisfaction of the conditions set forth in Section
4
of this
Amendment, the Lender hereby waives the Borrower’s violation of (a) Section
6.9
of the
Loan and Security Agreement for failing to amend Schedule
5.5
to
reflect the Equipment and Inventory Transfer, (b) Section
6.15
of the
Loan and Security Agreement for failing to pledge 65% of the outstanding capital
Stock of Viskase Mexico in favor of the Lender, (c) clause
(i)
of the
definition of Permitted Investment as required pursuant to Section
7.12
of the
Loan and Security Agreement for (i) failure to provide the Lender with 15 days
prior written notice of the Initial Investments and (ii) making the Initial
Investment while an Event of Default existed as a result of the Borrower’s
breach of Section
6.15
of the
Loan and Security Agreement described in clause
(b)
above,
(d) Section
6.2
of the
Loan Agreement by failing to deliver such items as required thereunder during
the occurrence and continuance of a Triggering Event, and (e) Section
6.3(e)
of the
Loan and Security Agreement by failing to give notice to Lender of the
violations described herein within 5 days of obtaining knowledge
thereof.
2
4.
Consent.
The
Borrower now desires to sell the equipment and inventory subject to the
Equipment and Inventory Transfer to Viskase Mexico and certain other equipment
and inventory to be transferred from its Indiana facility. The sale of such
equipment referenced in the first sentence of this Section
4
will be
evidenced by the Xxxx of Sale as set forth on Exhibit
E
attached
hereto (such sale, the “Equipment
Sale”).
The
sale of such inventory referenced in the first sentence of this Section
4
will be
evidenced by ordinary course invoice. The Equipment Sale and Inventory Sale
are
permitted under Section
7.4
of the
Loan and Security Agreement; provided, however, solely with respect to the
Equipment Sale, so long as such sale meets the requirements of a Permitted
Investment pursuant to Section
7.12
of the
Loan and Security Agreement. At this time, the Borrower does not meet the
requirements of clause
(i)
of the
definition of Permitted Investment as (a) the Events of Default listed in
Section
2
above
currently exist and (b) the Borrower has not provided the Lender with 15 days
prior written notice of the Equipment and Inventory Sale (collectively, the
“Unsatisfied
Requirements”).
Upon
satisfaction of the conditions set forth in Section
5
of this
Amendment, the Lender hereby consents to the Equipment Sale and waives the
Unsatisfied Requirements.
5.
Conditions
Precedent.
The
amendments, waivers and consent contained in Section
2, 3 and 4
above
are subject to, and contingent upon, the prior or contemporaneous satisfaction
of each of the following conditions precedent, each in form and substance
satisfactory to the Lender:
(a) The
Borrower and the Lender shall have executed and delivered to each other this
Amendment;
(b) The
Borrower shall have executed and delivered in favor of Lender that certain
First
Amendment to Pledge Agreement of even date herewith (and acknowledged by Viskase
Mexico);
(c) The
Borrower shall have delivered to the Collateral Agent for the benefit of the
Collateral Agent and the Lender that certain Promissory Note dated of even
date
herewith made by Viskase Mexico in favor of the Borrower in the original
principal amount of $10,000,000, which shall be in form and substance
satisfactory to the Lender;
(d) Viskase
Mexico shall have executed and delivered in favor of Lender that certain Joinder
No. 1 to Intercompany Subordination Agreement of even date herewith;
(e) The
Borrower shall have paid to the Lender, a fully-earned, non-refundable
amendment, waiver and consent fee in the amount of $50,000;
(f) The
Borrower shall have paid the Lender’s legal counsel’s fees incurred in
connection with this Amendment; and
(g) The
Borrower shall have satisfied any other conditions of the Lender required in
connection with this Amendment.
6.
Reference
to and Effect on the Loan Agreement.
Except
as expressly provided herein, the Loan Agreement and all of the Loan Documents
shall remain unmodified and continue in full force and effect and are hereby
ratified and confirmed. Except as expressly provided herein, the execution,
delivery and effectiveness of this Amendment shall not operate as a waiver
of:
(a) any right, power or remedy of the Lender under the Loan Agreement or any
of
the Loan Documents, or (b) any Default or Event of Default under the Loan
Agreement or any of the Loan Documents.
3
7.
Representations
and Warranties of the Borrower.
The
Borrower hereby represents and warrants to the Lender, which representations
and
warranties shall survive the execution and delivery of this Amendment, that
on
and as of the date hereof and after giving effect to this
Amendment:
(a) The
execution, delivery, and performance by Borrower of this Amendment have been
duly authorized by all necessary action on the part of Borrower.
(b) The
execution, delivery, and performance by Borrower of this Amendment does not
and
will not (i) violate any provision of federal, state, or local law or regulation
applicable to Borrower, the Governing Documents of Borrower, or any order,
judgment, or decree of any court or other Governmental Authority binding on
Borrower, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of Borrower, (iii) result in or require the creation or imposition
of
any Lien of any nature whatsoever upon any properties or assets of Borrower,
other than Permitted Liens, or (iv) require any approval of Borrower’s interest
holders or any approval or consent of any Person under any material contractual
obligation of Borrower, other than consents or approvals that have been obtained
and that are still in force and effect.
(c) This
Amendment and all other documents contemplated hereby, when executed and
delivered by Borrower will be the legally valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating
to
or limiting creditors’ rights generally.
(d) The
representations and warranties of the Borrower set forth in the Loan Agreement
and in the Loan Documents are true, correct and complete, in all material
respects, on and as of the date hereof (except to the extent that such
representation and warranty relates solely to an earlier date); provided, that
the references to the Loan Agreement therein shall be deemed to include the
Loan
Agreement as amended by this Amendment.
(e) The
Borrower acknowledges that the Lender is specifically relying upon the
representations, warranties and agreements contained in this Amendment and
that
such representations, warranties and agreements constitute a material inducement
to the Lender in entering into this Amendment.
4
8.
Release
by the Borrower.
In
further consideration of the Lender’s execution of this Amendment, the Borrower
hereby waives any defense, right of set-off or claim against Lender, and any
of
its affiliates, directors, officers, employees, agents and representatives
existing as of the date hereof with respect to the Loan Agreement and the Loan
Documents and Borrower hereby forever remises, releases, acquits, satisfies
and
forever discharges the Lender, and each of its successors, assigns, affiliates,
officers, employees, directors, agents and attorneys (collectively, the
“Releasees”)
from
any and all claims, demands, liabilities, disputes, damages, suits,
controversies, penalties, fees, losses, costs, expenses, reasonable attorneys’
fees, actions and causes of action (whether at law or in equity) and obligations
of every nature whatsoever, whether liquidated or unliquidated, known or
unknown, matured or unmatured, fixed or contingent, that Borrower ever had,
now
has, or may have against or seek from any or all of the Releasees that arise
from or relate to any actions that any or all of the Releasees may have taken
or
omitted to take prior to the date this Amendment was executed (or otherwise)
with respect to the Obligations, any Collateral, the Loan Agreement and any
of
the Loan Documents, other than for the Lender’s gross negligence or willful
misconduct.
9.
Reference
to Loan Agreement; No Waiver.
9.1
Upon
the
effectiveness of this Amendment, each reference in the Loan Agreement to “this
Loan Agreement,” “hereunder,” “hereof,” “herein” or words of like import shall
mean and be a reference to the Loan Agreement as amended hereby. The term “Loan
Documents” as defined in Section
1.1
of the
Loan Agreement shall include (in addition to the Loan Documents described in
the
Loan Agreement) this Amendment and any other agreements, instruments or other
documents executed in connection herewith.
9.2
The
Lender’s failure, at any time or times hereafter, to require strict performance
by the Borrower of any provision or term of the Loan Agreement, this Amendment
or the other Loan Documents shall not waive, affect or diminish any right of
the
Lender thereafter to demand strict compliance and performance therewith. In
no
event shall the Lender’s execution and delivery of this Amendment establish a
course of dealing among the Lender, the Borrower, or any other obligor or in
any
other way obligate the Lender to hereafter provide any amendments or waivers
with respect to the Loan Agreement. The terms and provisions of this Amendment
shall be limited precisely as written and shall not be deemed: (A) to be a
consent to a modification, amendment or waiver of any other term or condition
of
the Loan Agreement or of any other Loan Documents, or (B) to prejudice any
right
or remedy that the Lender or any Lender may now have under or in connection
with
the Loan Agreement or any of the other Loan Documents.
10.
Successors
and Assigns; Amendment.
This
Amendment shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided,
however,
Borrower may not assign this Amendment or any of its respective rights hereunder
without the Lender's prior written consent. Any prohibited assignment of this
Amendment shall be absolutely null and void. This Amendment may only be amended
or modified by a writing signed by the Lender and the Borrower.
11.
Severability;
Construction.
Wherever possible, each provision of this Amendment shall be interpreted in
such
a manner so as to be effective and valid under applicable law, but if any
provision of this Amendment is held to be prohibited by or invalid under
applicable law, such provision or provisions shall be ineffective only to the
extent of such provision and invalidity, without invalidating the remainder
of
this Amendment. Neither this Amendment nor any uncertainty or ambiguity herein
shall be construed or resolved against Lender, whether under any rule of
construction or otherwise. On the contrary, this Amendment has been reviewed
by
all parties hereto and shall be construed and interpreted according to the
ordinary meaning of the words used so as to fairly accomplish the purposes
and
intentions of the parties hereto.
5
12.
Counterparts;
Facsimile.
This
Amendment may be executed in one or more counterparts, each of which taken
together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Amendment by telefacsimile shall be equally as effective
as
delivery of a manually executed counterpart of this Amendment. Any party
delivering an executed counterpart of this Amendment by telefacsimile shall
also
deliver a manually executed counterpart of this Amendment, but the failure
to
deliver a manually executed counterpart shall not affect the validity,
enforceability or binding effect of this Amendment.
13.
CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE
VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING
HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
ILLINOIS.
(b) THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AMENDMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF XXXX,
STATE
OF ILLINOIS, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
BORROWER COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT LENDER’S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE LENDER ELECTS TO BRING SUCH ACTION OR WHERE
BORROWER’S COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER AND THE LENDER
WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE
TO
ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT
ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
13(b).
(c) BORROWER
AND THE LENDER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AMENDMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND
THE
LENDER REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AMENDMENT MAY BE FILED
AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
[Signature
Pages Follow]
6
IN
WITNESS WHEREOF,
the
undersigned have caused this Amendment to be duly executed and delivered as
of
the date first above written.
|
VISKASE
COMPANIES, INC.
|
||
|
a
Delaware corporation, as Borrower
|
||
|
By:
|
/s/
Xxxxxx X. Xxxxxxx
|
|
|
Title:
|
Vice
President and Chief Financial Officer
|
|
|
XXXXX
FARGO FOOTHILL, INC.,
|
||
|
a
California corporation, as Lender
|
||
|
By:
|
/s/
Xxxxxx X. Xxxx
|
|
|
Title:
|
Vice
President
|
|
EXHIBIT
A
Schedule
5.7(a)
States
of Organization
|
NAME
OF ENTITY
|
STATE
OF ORGANIZATION
|
|
Viskase
Companies, Inc.
|
Delaware
|
|
Viskase
Films, Inc.
|
Delaware
|
|
WSC
Corp. d/b/a Wisconsin Steel Company
|
Delaware
|
|
Viskase
Brasil Embalagens Ltda.
|
Brazil
|
|
Viskase
Europe Limited
|
United
Kingdom
|
|
Viskase
Canada Inc.
|
Canada
|
|
Viskase
S.A.S.
|
France
|
|
Viskase
GMBH
|
Germany
|
|
Viskase
SpA
|
Italy
|
|
Viskase
Polska SP.Z0.0
|
Poland
|
|
Viskase
Holdings Limited
|
United
Kingdom
|
|
Viskase
International Limited
|
United
Kingdom
|
|
Viskase
Limited
|
United
Kingdom
|
|
Viskase
(UK) Limited
|
United
Kingdom
|
|
Viskase
del Norte, S.A. de C.V.
|
Mexico
|
EXHIBIT
B
Schedule
5.7(b)
Chief
Executive Office
|
NAME
OF ENTITY
|
CHIEF
EXECUTIVE OFFICE
|
|
Viskase
Companies, Inc.
|
000
Xxxxxxxxxxx Xxxxxx Xxxxxxx
Xxxxxxxxxxx,
Xxxxxxxx 00000 (Du Page County)
|
|
WSC
Corp. d/b/a Wisconsin Steel Company
|
Same
as above.
|
|
Viskase
Brasil Embalagens Ltda.
|
Same
as above.
|
|
Viskase
Europe Limited
|
Same
as above.
|
|
Viskase
Canada Inc.
|
Same
as above.
|
|
Viskase
S.A.S.
|
Same
as above.
|
|
Viskase
GMBH
|
Same
as above.
|
|
Viskase
SpA
|
Same
as above.
|
|
Viskase
Polska SP.Z0.0
|
Same
as above.
|
|
Viskase
Holdings Limited
|
Same
as above.
|
|
Viskase
International Limited
|
Same
as above.
|
|
Viskase
Limited
|
Same
as above.
|
|
Viskase
(UK) Limited
|
Same
as above.
|
|
Viskase
del Norte, S.A. de C.V.
|
Same
as above.
|
EXHIBIT
C
Schedule
5.7(c)
Organizational
Identification Numbers
|
NAME
OF ENTITY
|
ORGANIZATIONAL
I.D. NUMBER
|
|
Viskase
Companies, Inc.
|
0757401
|
|
Viskase
Films, Inc.
|
0838080
|
|
WSC
Corp. d/b/a Wisconsin Steel Company
|
2065779
|
|
Viskase
Brasil Embalagens Ltda.
|
Foreign
|
|
Viskase
Europe Limited
|
Foreign
|
|
Viskase
Canada Inc.
|
Foreign
|
|
Viskase
S.A.S.
|
Foreign
|
|
Viskase
GMBH
|
Foreign
|
|
Viskase
SpA
|
Foreign
|
|
Viskase
Polska SP.Z0.0
|
Foreign
|
|
Viskase
Holdings Limited
|
Foreign
|
|
Viskase
International Limited
|
Foreign
|
|
Viskase
Limited
|
Foreign
|
|
Viskase
(UK) Limited
|
Foreign
|
|
Viskase
del Norte, S.A. de C.V.
|
Foreign
|
EXHIBIT
D
Schedule
5.8(c)
Capitalization
of Borrower’s Subsidiaries
|
NAME
OF ENTITY
|
JURISDICTION
|
NUMBER
OF SHARES AUTHORIZED
|
NUMBER
& PERCENTAGE OF OUTSTANDING SHARES OWNED BY
BORROWER
|
|
Viskase
Films, Inc.
|
Delaware
|
100
|
100
(100%)
|
|
WSC
Corp. d/b/a Wisconsin Steel Company
|
Delaware
|
1,000
|
1,000
(100%)
|
|
Viskase
Brasil Embalagens Ltda.
|
Brazil
|
33,956,830
|
27,335,248
(81%)
|
|
Viskase
Europe Limited
|
United
Kingdom
|
30,000,000
|
30,000,000
(100%)
|
|
Viskase
Canada Inc.
|
Canada
|
Common:
Unlimited
Preferred:
Unlimited
|
20
Common
(100%)
480,000
Preferred
(100%)
|
|
Xxxxxxx
xxx Xxxxx, X.X. xx X.X.
|
Xxxxxx
|
00
Class A
|
49
Class A
(98%)
|
|
Viskase
S.A.S.
(owned
by Viskase Europe Limited)
|
France
|
429,543
|
429,543
(100%)
|
|
Viskase
GMBH
(owned
by Viskase S.A.S.)
|
Germany
|
1
|
1
(100%)
|
|
Viskase
SpA
(owned
by Viskase S.A.S.)
|
Italy
|
45,000
|
45,000
(100%)
|
|
Viskase
Polska SP.Z0.0
(owned
by Viskase S.A.S.)
|
Poland
|
300
|
300
(100%)
|
|
Viskase
Holdings Limited
(owned
by Viskase S.A.S.)
|
United
Kingdom
|
1,900,100
|
20
(100%)
|
|
Viskase
International Limited
(owned
by Viskase Holdings Limited)
|
United
Kingdom
|
6,895,895
|
6,895,895
(100%)
|
|
Viskase
Limited
(owned
by Viskase Holdings Limited)
|
United
Kingdom
|
16,895,620
|
16,895,620
(100%)
|
|
Viskase
(UK) Limited
(owned
by Viskase (UK) Limited)
|
United
Kingdom
|
6,308,114
|
6,308,114
(100%)
|
EXHIBIT
E
Xxxx
of Sale
See
Attached.
