As filed with the Securities and Exchange Commission on May 11, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INSILCO HOLDING CO.
(exact name of registrant as specified in its charter)
Delaware 06-1158291
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Kenneth H. Koch
Vice President and General Counsel
Insilco Holding Co.
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Richard D. Truesdell, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to public: From time to
time following the effectiveness of this Registration Statement.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box: [x]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
<TABLE>
CALCULATION OF REGISTRATION FEE
==================================================================================================================================
Amount Proposed Maximum Proposed Maximum
Title of Each Class of to be Offering Aggregate Aggregate Offering Amount of
Securities to be Registered Registered Price Per Security(1) Price(1) Registration Fee
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<S> <C> <C> <C> <C>
Warrants to purchase common stock............ 120,000 warrants $45.00 (2) 5,400,000 $1,502
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Common Stock, par value $.001 per share...... 62,400 shares (3) $24.00 (4) 1,497,600 $417
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</TABLE>
(1) Estimated solely for the purpose of calculating the amount of registration
fee.
(2) Based on the exercise price of the Warrants.
(3) 62,400 shares of common stock of the Company are issuable upon exercise of
the Warrants being registered hereunder, plus a presently indeterminable
number of shares of Common Stock, if any, as shall be issuable from time
to time as required pursuant to adjustments under the Warrants.
(4) The average of the bid and asked prices of the Common Stock in the
over-the-counter market on May 5, 1999.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
================================================================================
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED May 11, 1999
PROSPECTUS
Issued ______, 1999
INSILCO HOLDING CO.
COMMON STOCK
WARRANTS TO PURCHASE COMMON STOCK
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This prospectus relates to the resale of 120,000 warrants to purchase
shares of our common stock, par value $.001 per share, by certain holders named
in this prospectus or in an accompanying supplement to this prospectus. This
prospectus also relates to the issuance and sale of shares of our common stock
upon the exercise of the warrants. All of the common stock and warrants being
registered may be offered and sold from time to time by certain of the holders.
See "Plan of Distribution."
We will not receive any proceeds from the sale of the common stock or
warrants by the selling holders, other than payment of the exercise price of the
warrants. The warrants were issued pursuant to an exemption from the
registration requirements of the Securities Act of 1933, as amended. The
warrants are being registered by the Company pursuant to registration rights
granted in connection with the placement of the warrants.
For a more detailed description of the warrants, see "Description of
Warrants" beginning on page 17.
For a more detailed description of our common stock, see "Description of
Capital Stock" beginning on page 20.
We have agreed to bear certain expenses in connection with the
registration and sale of the warrants and the common stock being offered by the
warrantholders.
Our common stock is traded in the over-the-counter market under the symbol
"INSL." On May 5, 1999, the last sale price for our common stock in the
over-the-counter market was $23 1/2 per share.
See "Risk Factors" beginning on page 7 hereof for certain information that
should be considered by you.
------------------------
Neither the Securities and Exchange Commission or any state securities
commission has approved or disapproved of the securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone to provide you with
information that is different. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of those documents.
<PAGE>
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TABLE OF CONTENTS
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Page
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Prospectus Summary............................................................3
Risk Factors..................................................................7
Use of Proceeds..............................................................13
Management...................................................................13
Warrantholders...............................................................15
Description of Warrants......................................................17
Description of Capital Stock.................................................20
Certain Federal Income Tax Consequences......................................23
Plan of Distribution.........................................................26
Legal Matters................................................................26
Experts......................................................................26
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with
the U.S. Securities and Exchange Commission (the "SEC"). Our SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus and information that we file later with the
SEC will automatically update and supersede the information in this
prospectus. We incorporate by reference the document listed below (SEC File
No. 333-71947) and any future filings made with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(i) Holding's Annual Report on Form 10-K............ Year ended
December 31, 1998
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Insilco Holding Co.
425 Metro Place North
Dublin, Ohio 43017
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SUMMARY
This section summarizes the more detailed information in this prospectus
and you should read all of such information carefully and in its entirety.
Because various entities discussed in this prospectus have similar sounding
names, we refer to ourselves, as "Holdings," "we," "us" or "our company," and we
refer to Insilco Corporation, our wholly-owned subsidiary as "Insilco." For a
discussion of important factors that could cause actual results to differ
materially from the forward-looking statements, see "Risk Factors."
THE COMPANY
Overview
We produce automotive, telecommunications and electronics components, and
are a leading specialty publisher of student yearbooks.
We report our financial results in four segments:
o the Automotive Components segment, which manufactures
o transmission components and assemblies and
o heat exchangers (such as radiators and air conditioning condensers)
and heat exchanger tubing;
o the Technologies segment, which manufactures
o high performance data-grade connectors for the telecommunications
and networking markets,
o cable and wire assemblies primarily for the telecommunications
market, and
o precision metal stampings and power transformers primarily for the
electronics market.
o Specialty Publishing, which produces student yearbooks and other
specialty books.
o Other, which manufactures stainless steel tubing and mills, machinery
and equipment for the heat exchanger market.
Our portfolio of businesses serves several market segments, which we
believe tends to minimize the effects of cyclicality and diversify business risk
from any one market. Our broad base of more than 17,000 customers includes
automotive and non-automotive original equipment manufacturers ("OEMs"),
telecommunications, networking and electronics companies and school yearbook
departments nationwide.
The Automotive Components Segment:
Our automotive components segment consists of:
o Thermal Components which produces aluminum-and copper-based heat
exchanger tubing for automotive OEMs and Tier 1 suppliers, and
also manufactures radiators, air conditioning condensers and
other heat exchangers for automotive and industrial applications.
o Steel Parts which is the leading supplier of automatic
transmission clutch plates to Ford and produces other stamped
components for OEMs and Tier 1 suppliers.
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o Thermalex, a joint venture owned equally by us and Mitsubishi
Aluminum Co., Ltd. ("Mitsubishi Aluminum"), which is, we believe,
the nation's leading producer of precision extruded multi-port
aluminum heat exchanger tubing used in automotive
air-conditioning condensers.
The Technologies Segment
Our technologies segment generally focuses on niche products which are
designed for specific customer applications and seeks to supply all or a
substantial portion of its customers' requirements. The group has four operating
units:
o Escod Industries, a supplier of cable and wire assemblies to the
telecommunications market, including Northern Telecom and Siemens
Telecom Network;
o Stewart Connector and EFI, producers of high performance data-grade
connectors for the computer networking and telecommunications markets;
o Stewart Stamping, a producer of highly customized precision stamped
metal parts, primarily for the electronics industry; and
o Signal Transformer, a producer of 50-60 Hz power transformers used in
a variety of products.
Specialty Publishing
Taylor Publishing Company ("Taylor") is one of the nation's leading
publishers of student yearbooks. We believe that Taylor was the first major
yearbook publisher to make extensive use of digital pre-press technology
(permitting cutting, pasting, and rescaling of text and graphics on a computer)
as opposed to the more widely used pre-press process which involves manual
cutting, pasting and rescaling. We believe that we use digital pre-press
technology more extensively than our competitors, and that this technology
offers yearbook departments superior quality and greater flexibility in altering
page design. The student yearbook business is not very cyclical, has low
customer turnover and many of the sales are pre-paid.
Other
o Romac which produces stainless steel tubing for marine, architectural,
industrial and automotive applications.
o McKenica which manufactures high speed welded tube mills and other
machinery and equipment for the heat exchanger market.
Business Strategy
We seek sales growth through internal growth and acquisitions. In
addition, we seek to improve operating margins through cost reduction programs
and an ongoing process of efficiency improvements. Our strategy includes the
following:
Focus on Niche Markets
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Develop New Products and Applications
Increase Value-Added Content
Implement Cost Reduction Programs and Efficiency Improvements
Expand Strategic Acquisitions and Partnerships; Divestitures
For more complete information on our business strategies, you should read
the section called "Business--Business Strategies."
Recent Developments
The Mergers. On August 17, 1998, we formed a wholly owned subsidiary which
was then merged with and into Insilco (what we call the "Reorganization
Merger"). In the merger, each of Insilco existing stockholders had his or her
shares converted into the same number of our shares and the right to receive
$0.01 per share in cash, and we became Insilco's corporate parent. Promptly
following the Reorganization Merger, a second merger took place pursuant to
which Silkworm Acquisition Corporation, an affiliate of DLJ Merchant Banking
Partners II, L.P., merged with and into us (what we call the "Merger," and
together with the Reorganization Merger, the "Mergers") and each share of our
common stock was converted into the right to receive $43.47 in cash and retain
0.03378 of a share of our common stock. Thus, as a result of the Mergers, each
of Insilco's existing stockholders:
-- received $43.48 in cash (consisting of $.01 received in the
Reorganization Merger and $43.47 received in the Merger) and
-- retained 0.03378 of a share of our common stock.
In conjunction with the Mergers, DLJ Merchant Banking Partners II, L.P.
and certain related funds and entities (what we call the "DLJMB Funds")
purchased 1,400,000 shares of our 15% Senior Exchangeable Preferred Stock due
2012 (the "PIK Preferred Stock"), and warrants to purchase 65,603 shares of our
common stock at an exercise price of $0.01 per share.
As a result of those transactions, following the Mergers,
o Insilco stockholders received, in the aggregate, approximately 10.1%
(9.4% on a fully diluted basis) of the outstanding shares of our
common stock;
o the DLJMB Funds held approximately 69.0% (69.8% on a fully diluted
basis) of the outstanding shares of our common stock;
o 399 Venture Partners, Inc., an affiliate of Citibank, N.A. ("CVC"),
purchased shares of Silkworm which in the Merger were converted into
approximately 19.3% (17.8% on a fully diluted basis) of the
outstanding shares of our common stock; and
o Insilco's management purchased approximately 1.7% (1.5% on a fully
diluted basis) of the outstanding shares of our common stock.
Immediately before the Reorganization Merger, each outstanding option to
acquire shares of Insilco's common stock that had been granted to Insilco's
employees and directors, whether or not vested, was canceled and each holder of
an option received a cash payment (collectively, the "Option Cash Payments") in
an amount equal to:
the excess, if any, of $45.00 over the exercise price of the option
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multiplied by
the number of shares subject to the option, less applicable
withholding taxes. Certain option holders elected to use the Option
Cash Payments to purchase our stock or equity units.
The Merger Financing. The cash required to consummate the foregoing
transactions was approximately $204.4 million. This amount was financed with
o approximately $70.2 million from the issuance by Silkworm of units
(which were converted into our units (the "Holdings Units") in the
Merger), each unit consisting of $1,000 principal amount of our 14%
Senior Discount Notes due 2008 (the "Holdings Senior Discount Notes")
and one warrant to purchase 0.325 of a share of our common stock at an
exercise price of $0.01 per share,
o approximately $56.1 million from the issuance by Silkworm to the DLJMB
Funds, CVC and certain members of our management of 1,245,138 shares
of Silkworm common stock (which was converted into our common stock in
the Merger),
o $35.0 million from the issuance to the DLJMB Funds of 1,400,000 shares
of the PIK Preferred Stock by Holdings and the DLJMB Warrants to
purchase 65,603 shares of our common stock at an exercise price of
$0.01 per share, and
o approximately $43.1 million of new borrowings under our then existing
bank credit facility.
Offer to Purchase. Because the Mergers caused a "change in control" of
Insilco, we were required to make an offer to purchase all of our outstanding
$150.0 million 101/4% Senior Subordinated Notes due 2007 at 101% of their
aggregate principal amount, plus accrued interest. We issued the Old Notes as
units together with warrants to purchase our common stock and used the proceeds,
together with certain borrowings under our new bank credit facility, to
repurchase all of the 101/4% notes.
New Credit Facility. On November 24, 1998, we entered into a new credit
facility with a group of lenders led by DLJ Capital Funding Inc. to replace our
existing credit facility. The new credit facility includes a $125 million term
loan facility and a $175 million revolving credit facility (subject to
adjustment as described below). The term loan facility has a maturity of seven
years. The revolving credit facility will terminate on July 8, 2003. See
"Description of Certain Indebtedness--New Credit Facility." The offering of the
Old Notes, together with the repurchase of the 10 1/4% notes pursuant to the
offer to purchase the 10 1/4% notes, and the borrowings under the new credit
facility are referred to as the "Refinancing."
Acquisitions. We recently acquired Eyelets for Industry, Inc. (EFI) and
its wholly owned subsidiary EFI Metal Forming Inc. and are currently in
negotiations with respect to another potential acquisition. Neither the EFI
acquisition, nor the other potential acquisition, if consummated, is material to
our financial position.
Jostens Litigation. On January 14, 1997, Taylor sued one of its principal
competitors in the yearbook business, Jostens, Inc. ("Jostens"), in the U.S.
District Court for the Eastern District of Texas, alleging violations of the
federal antitrust laws as well as various claims arising under state law. On May
13, 1998, the jury in the case returned a verdict in favor of Taylor, and, on
June 12, 1998, the judge rendered his judgment in the amount of $25.2 million
plus interest at an annual rate of 5.434%. On January 14, 1999, in response to a
motion by Jostens, the judge entered an order vacating the jury verdict and
granting judgment in Jostens' favor. We will seek to overturn the order and
reinstate the jury verdict on appeal. We cannot assure you what the actual
amount is, if any, that Taylor will recover from Jostens.
------------------------
Our principal executive offices are located at 425 Metro Place North,
Fifth Floor, Dublin, Ohio 43017, and our telephone number is (614) 792-0468.
6
<PAGE>
RISK FACTORS
You should carefully consider the specific risk factors set forth below.
Substantial Leverage; Liquidity
Leverage
In connection with the Merger and Merger Financing, we incurred
significant indebtedness. As of March 31, 1999, we had: (i) total consolidated
indebtedness of approximately $410.2 million; and (ii) $76.5 million of
additional revolving borrowings available under the then existing bank credit
facility, subject to customary conditions. In addition, subject to the
restrictions in the new credit facility and the indenture, we may incur
significant additional indebtedness, which may be secured, from time to time.
The level of our indebtedness could have important consequences,
including:
o limiting cash flow available for general corporate purposes, including
acquisitions, because a substantial portion of our cash flow from
operations must be dedicated to debt service;
o limiting our ability to obtain additional debt financing in the future
for working capital, capital expenditures or acquisitions;
o limiting our flexibility in reacting to competitive and other changes
in the industry and economic conditions generally; and
o exposing us to risks inherent in interest rate fluctuations because
certain of our borrowings may be at variable rates of interest, which
could result in higher interest expense in the event of increases in
interest rates.
Conditions that may impact our ability to repay our Debt
Our ability to pay or to refinance our indebtedness will depend upon our
future operating performance, which will be affected by general economic,
financial, competitive, legislative, regulatory, business and other factors
beyond our control.
We anticipate that our operating cash flow, together with money we can
borrow under our new credit facility, will be sufficient to meet anticipated
future operating expenses, capital expenditures and to service debt as it
becomes due. However, if our future operating cash flows are less than currently
anticipated we may be forced, in order to meet our debt service obligations, to
reduce or delay acquisitions or capital expenditures, sell assets or reduce
operating expenses. If we were still unable to meet our debt service
obligations, we could attempt to restructure or refinance our indebtedness or
seek additional equity capital. There can be no assurance that we will be able
to accomplish that on satisfactory terms, if at all.
In addition, subject to the restrictions and limitations contained in our
debt agreements, we may incur significant additional indebtedness to finance
future acquisitions, which could adversely affect our operating cash flows and
our ability to service indebtedness. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources."
Restrictive Covenants
The indenture governing our public debt (and Insilco's public debt)
contain various covenants that limit our ability to engage in certain
transactions. These covenants limit our and certain of our subsidiaries' ability
to:
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o borrow and to place liens on assets
o pay dividends or make certain other restricted payments
o enter into certain transactions with affiliates; or
o merge or consolidate with any other person or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of the
assets of Insilco.
In addition, our new credit facility contains other and more restrictive
covenants and prohibits us from prepaying our other indebtedness. Our new credit
facility also requires us to maintain specified financial ratios and satisfy
certain other financial condition tests. Our ability to meet those financial
ratios and tests can be affected by events beyond our control, and there can be
no assurance that we will meet those tests. A breach of any of these covenants
could result in a default under our new credit facility and/or the notes. Upon
the occurrence of an event of default under our new credit facility, the lenders
could elect to declare all amounts outstanding under our new credit facility to
be immediately due and payable and terminate all commitments to extend further
credit. If we were unable to repay those amounts, the lenders could proceed
against the collateral granted to them to secure that indebtedness. We have
pledged substantially all of our assets, other than assets of our foreign
subsidiaries, as security under our new credit facility.
Holding Company Structure
We conduct all of our operations through subsidiaries, and our ability to
meet our debt service and other obligations is dependent upon the receipt of
dividends from our direct and indirect subsidiaries.
o Subject to the provisions of our public debt indentures, future
borrowings by our subsidiaries may contain restrictions or
prohibitions on the payment of dividends by such subsidiaries to
Insilco.
o Under applicable state law, our subsidiaries may be limited in amounts
that they are permitted to pay as dividends on their capital stock.
Customer Concentration; Absence of Long-Term Contracts
A significant portion of our sales are made to a relatively small group of
major customers. In 1998, sales to Ford represented approximately 9% of our net
sales and sales to a group of our nine next largest customers represented
approximately 22% of net sales.
Our reliance on these major customers exposes us to
o the risk of changes in the business condition of our major customers
and
o the risk that the loss of a major customer could adversely affect
Insilco's results of operations.
While we have supplied Ford for 40 years, Ford is not contractually bound
to purchase supplies from us in the future. Thus, our relationship with Ford is
subject to termination at any time. If we were to lose Ford as a customer, our
results of operations would be adversely affected.
Cyclical Markets
A substantial portion of our revenues derive from sales to markets that
have been historically, and are likely to continue to be, cyclical. For example,
our Automotive Components Group, which accounted for approximately 40% of
Insilco's net sales and 46% of operating income for the year ended December 31,
1998, primarily serves the automobile OEM market and the automobile parts
aftermarket through the manufacture of automotive heat exchangers
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and related tubing, and automatic transmission and suspension components. (For
the year ended December 31, 1998, however, approximately 17% and 36% of the
Automotive Components Group's net sales were attributable to the automotive
aftermarket and non-automotive OEMs, respectively.) The automobile industry has
experienced recessionary or slow growth conditions for substantial periods in
the past and may experience recessionary conditions in the future. Any
substantial weakening of the automobile industry would have an adverse effect on
our results of operations.
Seasonality; Production Disruption
In certain of our businesses in which there is high customer concentration
or high production seasonality, we would be exposed to potentially significant
revenue losses if we (or our customers) were to experience substantial
disruption in production. With the continued emphasis on reductions in component
inventories and "just-in-time" deliveries, especially in the automotive
industry, any disruption in our production or by our major customers, through
work stoppages or otherwise, could have an immediate and adverse effect on our
results of operations.
Additionally, a portion of our revenues and operating income are exposed
to the seasonality of the yearbook production cycle. A majority of the annual
revenues of Taylor are recognized in our second quarter. Any disruption during
the peak production period (April to June) through work stoppages, loss of
production facilities or otherwise, has caused and could in the future cause
lost revenues or delay revenue recognition in the year in which it occurred or
increase expenses and adversely affect future years' contract renewals.
Competition
The businesses in which we are engaged are highly competitive and in some
cases highly fragmented, with many small manufacturers. In some of our
businesses, especially the data grade connector business and the heat exchanger
business, we compete with entities having significantly more resources. In
certain other businesses we compete with entities that have a greater share of
the relevant market and lower costs. As competition increases, profit margins on
some of our significant business lines could decrease, and in the more
fragmented markets consolidation could occur, resulting in the creation of
larger and financially stronger competitors.
We believe that, to remain competitive and maintain or increase
profitability, we must pursue a strategy focusing on growth and product
innovation. However, our competitors can be expected to continue to seek their
own growth, to improve the design and performance of their products, to reduce
costs of existing competitive products and to introduce new products with
competitive price and performance characteristics. Although we believe that,
with respect to most of our businesses, we have certain technological,
manufacturing and other advantages over our competitors, maintaining these
advantages will require continued investment in research and development, sales
and marketing, productivity improvements and information systems. We cannot
assure you that we will have sufficient resources to continue to make such
investments, that such investments will be successful or that we will be able to
maintain our existing competitive advantages.
Technology and the Development of New Products
The markets for many of our products, particularly the data grade
connector products, are characterized by technological change, evolving industry
standards, product customization and frequent new product introductions, which
may render existing or proposed products noncompetitive or obsolete.
Many of our products require significant planning, design, development and
testing at the technological, product and manufacturing process levels.
Moreover, many of our customers use our products and proprietary technologies as
components of other products which they manufacture or assemble, which may
become uncompetitive or obsolete.
Although we work closely with our customers to stay informed with respect
to product development, we cannot assure you that any of the products we are
currently developing or those to be developed in the future, will be
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completed in any particular time frame or that our or our customers' products or
proprietary technologies will not become uncompetitive or obsolete.
Acquisition Growth Strategy; Management and Funding of Growth
We have historically pursued an acquisition strategy and recently
completed an acquisition of a precision stamping company that specializes in
"deep drawn" components for the electronics, automotive and consumer markets. We
are currently in negotiations with respect to another potential acquisition as
part of our ongoing strategy to promote growth. See "Summary--Recent
Developments." There are various risks associated with pursuing a growth
strategy of this nature.
o Any future growth will require us to manage our expanding domestic and
international operations, integrate new businesses and adapt our
operational and financial systems to respond to changes in our
business environment, while maintaining a competitive cost structure.
o The acquisition strategy will continue to place demands on our
management to improve our operational, financial and management
information systems, to develop further the management skills of our
managers and supervisors, and to continue to retain, train, motivate
and effectively manage our employees.
Our failure to manage growth effectively could have a material adverse effect on
us. We also cannot assure you that suitable acquisition candidates will be
available or that acquisitions can be completed on reasonable terms.
Additionally, our ability to maintain and increase our revenue base and to
respond to shifts in customer demand and changes in industry trends will be
partially dependent on our ability to generate sufficient cash flow or obtain
sufficient capital for the purpose of, among other things, financing
acquisitions, satisfying customer contractual requirements and financing
infrastructure growth. We cannot assure you that we will be able to generate
sufficient cash flow or that financing will be available on acceptable terms (or
permitted to be incurred under the terms of our new credit facility, the
indenture and any future indebtedness) to fund our future growth.
Environmental Matters
Our operations are subject to federal, state, local and foreign laws and
regulations relating to the storage, handling, generation, treatment, emission,
release, discharge and disposal of certain substances and wastes. As a result,
we are involved from time to time in administrative or legal proceedings
relating to environmental matters and have incurred in the past and will
continue to incur capital costs and other expenditures relating to environmental
matters.
Certain properties now or previously owned by us are undergoing
remediation. Liability under environmental laws may be imposed on current and
prior owners of property or businesses without regard to fault or to knowledge
about the condition or action causing the liability. As an owner and operator of
those properties, we may be required to incur costs relating to the remediation,
and environmental conditions could lead to claims for personal injury, property
damage or damages to natural resources.
We have also in the past and may in the future be named a potentially
responsible party ("PRP") at off-site third-party disposal sites to which our
businesses have sent waste.
We believe, based on current information, that any costs we may incur
relating to environmental matters will not have a material adverse effect on our
business, financial condition or result of operations. We cannot assure you,
however, that we will not incur significant fines, penalties or other
liabilities associated with noncompliance or clean-up liabilities or that future
events, such as changes in laws or the interpretation thereof, the development
of new facts or the failure of other PRPs to pay their share, will not cause us
to incur additional costs that could have a material adverse effect on our
business, financial condition or results of operations. See
"Business--Environmental Regulation and Proceedings."
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<PAGE>
Dependence on Key Personnel
Our success depends to a significant extent upon the services of our
senior management and other management in our various businesses. We could be
adversely affected if any of these persons were unwilling or unable to continue
in our employ.
Risks Associated with Foreign Operations; Exchange Rate Fluctuations
Our products are manufactured and assembled at facilities in the United
States, the Dominican Republic, Germany, Ireland, the United Kingdom and Mexico
and sold in many foreign countries. In 1998, approximately 9% of our net sales
and costs of goods sold occurred outside the United States and Canada.
International manufacturing and sales are subject to inherent risks, including
changes in local economic or political conditions, the impositions of currency
exchange restrictions, unexpected changes in regulatory environments,
potentially adverse tax consequences and exchange rate risk. We cannot assure
you that these factors will not have a material adverse impact on our production
capabilities or otherwise adversely affect our business and operating results.
Control by Principal Shareholders
We are wholly owned by Holdings, and approximately 69.0% of the
outstanding shares of Holdings' common stock is held by the DLJMB Funds. As a
result of their stock ownership, the DLJMB Funds control us and (subject to any
agreement they may have with CVC as described in "Description of Capital
Stock--Other Stockholder Arrangements") have the power to elect all of our
directors, appoint new management and approve any action requiring the approval
of the holders of common stock, including adopting amendments to the certificate
of incorporation and approving acquisitions or sales of all or substantially all
of our assets.
The general partners of each of the DLJMB Funds are affiliates or
employees of Donaldson, Lufkin & Jenrette, Inc. ("DLJ, Inc."). DLJ Capital
Funding, Inc., which is an agent and lender under our new credit facility, and
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC"), which was the
initial purchaser of the Old Notes, are also affiliates of DLJ, Inc.
Circumstances may occur in which the interests of such principal
shareholders could be in conflict with your interests. In addition, such
shareholders may have an interest in pursuing transactions that, in their
judgment, enhance the value of their equity investment in Insilco, even though
such transactions may involve risks to the holders of the notes.
Limited Liquidity of Common Stock
Our common stock trades only on the over-the counter market. Although
trade prices are published by the National Association of Securities Dealers,
Inc. periodically in the "pink sheets," quotes for such shares will likely not
be readily available. As a result, purchasers may experience difficulty selling
any of our common stock received upon the exercise of the warrants.
Lack of Public Market
The warrants were issued on November 9, 1998 to a limited number of
investors. There is currently no active trading market for the warrants, and it
is not possible to predict how the warrants will trade in the secondary market
or whether such market will be liquid or illiquid. If a trading market does
develop, the warrants may trade at a discount from their initial offering price,
depending upon the market for similar securities and other factors, including
economic conditions and the financial condition, and the performance of, and
prospects for, Insilco. We do not intend to apply for listing of the warrants on
any securities exchange or for quotation through NASDAQ.
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<PAGE>
Holdings Capital Structure; Absence of Dividends
We have not paid dividends to date on our common stock and do not
anticipate paying any cash dividends on our common stock in the forseeable
future. We are a holding company that is dependent on distributions from our
subsidiaries to meet our cash requirements. The terms of the indentures
governing our public debt and the new credit facility restrict the ability of
our subsidiaries to make distributions to us and, consequently, also restrict
our ability to pay dividends on our common stock, and the terms of our PIK
Preferred Stock also restrict our ability to pay such dividends. Holders of the
warrants will not have the right to receive any dividends so long as their
warrants are unexercised.
Year 2000
Many existing computer programs utilized globally use only two digits to
identify a year in the date field. These programs, if not corrected, could fail
or create erroneous results after the century date changes on January 1, 2000 or
when otherwise dealing with dates later than December 31, 1999. We have
implemented a comprehensive "Year 2000" compliance program and believe that our
internal systems are Year 2000 compliant or will be upgraded or replaced in
connection with previously planned changes to information systems prior to the
need to comply with Year 2000 requirements.
The costs incurred to implement our Year 2000 compliance program have been
immaterial to date and we presently expect to incur less than $1.0 million of
costs in total.
However, we are uncertain as to the extent our customers and vendors may
be affected by Year 2000 issues that require commitment of significant resources
and may cause disruptions in the customers' and vendors' businesses Moreover,
Year 2000 issues present a number of risks that are beyond our reasonable
control, such as:
o the failure of utility companies to deliver electricity,
o the failure of telecommunications companies to provide voice and data
services,
o the failure of financial institutions to process transactions and
transfer funds,
o the failure of vendors to deliver materials or perform services
required by the us and
o the collateral effects on us of the effects of Year 2000 issues on the
economy in general or on the our customers in particular.
Although we believe that our Year 2000 compliance program is designed to
appropriately identify and address those Year 2000 issues that are subject to
our reasonable control, there can be no assurance that our efforts in this
regard will be fully effective or that Year 2000 issues will not have a material
adverse effect on our business, financial condition or results of operations.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources--Year 2000 Compliance."
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<PAGE>
USE OF PROCEEDS
All of the warrants offered hereby are being sold by the warrantholders.
We will not receive any of the proceeds from the sale of the warrants or our
common stock issued upon the exercise of the warrants, other than upon the
exercise of the warrants.
MANAGEMENT
The following table sets forth the name, age and position of each person
who is a director or executive officer of Insilco.
Name Age Position
- ---- --- ---------
Robert L. Smialek............. 55 Chairman of the Board, President and
Chief Executive Officer
David A. Kauer................ 43 Vice President and Chief Financial
Officer
Kenneth H. Koch............... 43 Vice President, General Counsel and
Secretary
Leslie G. Jacobs.............. 48 Vice President, Human Resources and
Assistant Secretary
Michael R. Elia............... 40 Vice President and Controller
Thompson Dean................. 40 Director
William F. Dawson, Jr......... 34 Director
David Y. Howe................. 34 Director
Randall E. Curran............. 43 Director
Keith Palumbo................. 34 Director
John F. Fort III.............. 57 Director
Robert L. Smialek has served as Chairman of the Board, President and Chief
Executive Officer of Insilco since May 1, 1993. From October 1992 to May 1993,
Mr. Smialek served as the President and Chief Operating Officer of the
Temperature and Appliance Controls Group of Siebe plc, a global controls and
engineering firm. From September 1990 to October 1992, Mr. Smialek served as
President and Chief Operating Officer of Ranco, Inc., a subsidiary of Siebe,
Inc. Mr. Smialek is a director of General Cable Corporation and Gleason
Corporation.
David A. Kauer has been Vice President and Chief Financial Officer since
May 1998, Vice President and Treasurer from April 1997 to May 1998 and Treasurer
from September 1993 to April 1997. Previously, Mr. Kauer was the Controller and
Treasurer of Johnson Yokogawa Corporation (a joint venture of Yokogawa Electric
Corporation and Johnson Controls, Inc.) from October 1989 to September 1993.
Kenneth H. Koch has been Vice President, General Counsel and Secretary
since October 1993. Prior thereto, Mr. Koch was a partner with the law firm of
Porter, Wright, Morris & Arthur.
Leslie G. Jacobs has been Vice President, Human Resources since August
1993 and was Director of Human Resources from January 1990 to August 1993. Prior
thereto, Mr. Jacobs was Director, Compensation and Employee Programs, of
Rockwell International.
Michael R. Elia has been Vice President and Controller since August 1998.
Prior thereto, Mr. Elia was Chief Financial Officer of Jordan Telecommunication
Products and from 1994 to 1997, he was Director of Strategic Planning for
Fieldcrest Cannon, Inc. From 1983 to 1994, Mr. Elia held senior financial
positions with Insilco's Technologies Group.
Thompson Dean has been the Managing Partner of DLJMB Inc. since November
1996. Prior thereto, Mr. Dean was a Managing Director of DLJMB Inc. (and its
predecessor). Mr. Dean serves as a director of Commvault Inc., Von Hoffman
Corporation, Manufacturers' Services Limited, Phase Metrics, Inc., and Arcade
Holding Corporation.
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<PAGE>
William F. Dawson, Jr. has been a Principal of DLJMB Inc. since August
1997. From December 1995 to August 1997, he was a Senior Vice President in DLJ's
High Yield Capital Markets Group. Prior thereto, Mr. Dawson was a Vice President
in the Leveraged Finance Group within DLJ's Investment Banking Group. Mr. Dawson
serves as a director of Von Hoffman Corporation and Thermadyne Holdings
Corporation.
David Y. Howe has been a Vice President of Citicorp Venture Capital, Ltd.
since 1993. Mr. Howe serves as a director of Aetna Industries, Inc., American
Italian Pasta Company, IPC Information Systems, Inc, and Pen-Tab Industries,
Inc.
Randall E. Curran has been a director, Chairman of the Board, President
and Chief Executive Officer of Thermadyne LLC since May 1998. Mr. Curran has
also served as a Director of Thermadyne Holdings since February 1994 and was
elected Chairman of the Board and Chief Executive Officer of Thermadyne Holdings
in February 1995, having previously served as President of Thermadyne Holdings
since August 1994 and as Executive Vice President and Chief Operating Officer of
Thermadyne Holdings since February 1994. He also serves as President of
Thermadyne Industries, Inc., a position he has held since 1992. From 1986 to
1992, Mr. Curran was Chief Financial Officer of Thermadyne Holdings and/or its
predecessors. Prior to 1986, Mr. Curran held various executive positions with
Cooper Industries, Inc.
Keith Palumbo has been a Vice President of DLJMB Inc. since December 1997.
Prior thereto, Mr. Palumbo was an Associate in DLJ's investment banking group.
John F. Fort, III served as Chairman of the Board of the Directors of Tyco
International, Inc. from 1982 to December 1992, and as Chief Executive Officer
from 1982 to June 1992. Mr. Fort serves as a director of Tyco International,
Inc., Dover Corporation and Roper Industries.
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<PAGE>
WARRANTHOLDERS
Below is information with respect to the number of the warrants, and
shares of our common stock owned by each of the warrantholders. The warrants are
being registered to permit public secondary trading of the warrants and the
common stock issued upon the exercise of the warrants, and the warrantholders
may offer the warrants and common stock issued upon the exercise of the warrants
for resale from time to time. See "Plan of Distribution."
We have filed with the SEC a registration statement, of which this
prospectus forms a part, with respect to the resale of the warrants and the
issuance and resale of our common stock issued upon the exercise of the warrants
from time to time, pursuant to Rule 415 under the Securities Act, in the
over-the-counter market, in privately-negotiated transactions, in underwritten
offerings or by a combination of such methods of sale, and have agreed to use
our best efforts to keep such registration statement effective until the earlier
of (i) two years following the first date on which no warrants remain
outstanding and (ii) if all warrants expire unexercised, the expiration of the
warrants (August 15, 2007).
The warrants and our common stock issued upon the exercise of the warrants
offered by this prospectus may be offered from time to time by the persons or
entities named below:
<TABLE>
Type and Number of Warrants Ownership
Owned Prior to Offering After Offering
--------------------------- -----------------------
Number of Number of
Shares of Type and Shares Number of
Name and Address of Common Stock Number of Issuable Upon Shares of
Holders Owned Prior to Warrants Exercise Common Stock Percent
-------------- ----------- -------------- ------------ -------
<S> <C> <C> <C> <C> <C>
</TABLE>
None of such holders have, or within the past three years had, any
position, office or other material relationship with us or any of our
predecessors or affiliates.
Because the selling holders may, pursuant to this prospectus, offer all or
some portion of the warrants or the common stock issuable upon conversion of the
warrants, no estimate can be given as to the amount of the warrants or the
common stock issuable upon conversion of the warrants that will be held by the
selling holders upon termination of any such sales. In addition, the selling
holders identified above may have sold, transferred or otherwise disposed of all
or a portion of their warrants, since the date on which they provided the
information regarding their warrants, in transactions exempt from the
registration requirements of the Securities Act. See "Plan of Distribution."
Only selling holders identified above who beneficially own the securities
set forth opposite each such selling holder's name in the foregoing table on the
effective date of the registration statement of which this prospectus forms a
part may sell such securities pursuant to the registration statement. Prior to
any use of this prospectus in connection with an offering of the warrants and/or
the common stock issuable upon conversion of warrants by any holder not
identified above, this prospectus will be supplemented to set forth the name and
number of shares beneficially owned
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<PAGE>
by the selling securityholder intending to sell such warrants and/or common
stock, and the number of warrants and/or shares of common stock to be offered.
The prospectus supplement will also disclose whether any selling securityholder
selling in connection with such prospectus supplement has held any position or
office with, been employed by or otherwise has had a material relationship with,
us or any of our affiliates during the three years prior to the date of the
prospectus supplement if such information has not been disclosed herein.
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<PAGE>
DESCRIPTION OF WARRANTS
General
The warrants were issued pursuant to a Warrant Agreement between us and
National City Bank, as Warrant Agent. Because the following is only a summary of
the material provisions of the Warrant Agreement, you should read the entire
Warrant Agreement, including the definitions therein of certain terms used
below. A copy of the Warrant Agreement has been filed as an exhibit to the
registration statement of which this prospectus forms a part.
Each warrant, when exercised, will entitle the holder thereof to receive
0.52 of a fully paid and non-assessable share of our common stock, at an
exercise price of $45.00 per share. The exercise price and the number of warrant
shares are both subject to adjustment in certain cases referred to below. The
holders of the warrants would be entitled, in the aggregate, to purchase shares
of our common stock representing approximately 4% of our common stock on a fully
diluted basis as of the date hereof. Unless exercised, the warrants will
automatically expire on August 15, 2007.
The warrants may be exercised by surrendering to us the warrant
certificate evidencing the warrants to be exercised with the accompanying form
of election to purchase properly completed and executed, together with payment
of the exercise price. Payment of the exercise price may be made at the election
(i) in cash in United States dollars by wire transfer or by certified or
official bank check to the order of the Issuer or (ii) without a cash payment
being required, for such number of warrant shares equal to the product of (A)
the number of warrant shares for which such warrant is exercisable as of the
date of exercise (if the exercise price were being paid in cash) and (B) the
Cashless Exercise Ratio. The Cashless Exercise Ratio shall equal a fraction the
numerator of which is the Market Value (as defined in the Warrant Agreement) per
share of our common stock on the date of exercise minus the exercise price per
share as of the date of exercise and the denominator of which is the Market
Value per share on the date of exercise. Upon surrender of the warrant
certificate and payment of the exercise price, we will deliver or cause to be
delivered, to or upon the written order of such Holder, stock certificates
representing the number of whole warrant shares to which the Holder is entitled.
If less than all of the warrants evidenced by a warrant certificate are to be
exercised, a new warrant certificate will be issued for the remaining number of
warrants. Holders of warrants will be able to exercise their warrants for cash
only if the exercise of such warrants is exempt from the registration
requirements of the Securities Act or a registration statement relating to the
warrant shares underlying the warrants is then in effect in the case of warrants
resold pursuant the shelf registration statement, and such securities are
qualified for sale or exempt from qualification under the applicable securities
laws of the states in which the various holders of warrants or other persons to
whom it is proposed that warrant shares be issued on exercise of the warrants
reside.
No fractional warrant shares will be issued upon exercise of the warrants.
The Holdings will pay to the holder of the warrant at the time of exercise an
amount in cash equal to the current market value of any such fractional warrant
shares less a corresponding fraction of the exercise price.
The holder of the warrants will have no right to vote on matters submitted
to the stockholders of the Holdings and will have no right to receive dividends
The holders of the warrants will not be entitled to share in the assets of
Holdings in the event of liquidation, dissolution or the winding up of the
Holdings. In the event a bankruptcy or reorganization is commenced by or against
Holdings, a bankruptcy court may hold that unexercised warrants are executory
contracts which may be subject to rejection by Holdings with approval of the
bankruptcy court, and the holders of the warrants may, even if sufficient funds
are available, receive nothing or a lesser amount as a result of any such
bankruptcy case than they would be entitled to if they had exercised their
warrants prior to the commencement of any such case.
In the event of a taxable distribution to holders of our common stock that
results in an adjustment to the number of warrant shares or other consideration
for which a warrant may be exercised, the holders of the warrants may, in
certain circumstances, be deemed to have received a distribution subject to
United States federal income tax as a dividend.
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<PAGE>
Adjustments
The number of warrant shares purchasable upon exercise of warrants and the
exercise price will be subject to adjustment, subject to certain exceptions, in
certain events including: (i) the payment by us of dividends and other
distributions on the our common stock in our common stock, (ii) subdivisions,
combinations and reclassification of the our common stock, (iii) the issuance to
all holders of our common stock of rights, options or warrants entitling them to
subscribe for our common stock or securities convertible into, or exchangeable
or exercisable for, our common stock at a price which is less than the Fair
Value per share (as defined) of our common stock, (iv) certain distributions to
all holders of our common stock of any of our assets, debt securities, other
securities or any rights or warrants to purchase any such securities (excluding
those rights and warrants referred to in clause (iii) above), (v) the issuance
of shares of our common stock for consideration per share less than the then
Fair Value per share of our common stock (excluding securities issues in
transactions referred to in clauses (i) through (iv) above) and (vi) the
issuance of securities convertible into or exchangeable for our common stock for
a conversion or exchange price plus consideration received upon issuance less
than the then Fair Value per share of our common stock (excluding securities
issued in transactions referred to in clauses (i) through (iv) above).
Adjustments to the exercise price per share will be calculated to the nearest
cent. No adjustment need be made for any of the foregoing transactions if
warrant holders are to participate in the transaction on a basis and with notice
that our Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of our common stock participate in the
transaction.
"Fair Value" per security at any date of determination shall be (1) in
connection with a sale to a party that is not an Affiliate of our company in an
arm's-length transaction (a "Non-Affiliate Sale"), the price per security at
which such security is sold and (2) in connection with any sale to an Affiliate
of our company, (a) the last price per security at which such security was sold
in a Non-Affiliate Sale within the three-month period preceding such date of
determination or (b) if clause (a) is not applicable, the fair market value of
such security determined in good faith by (i) a majority of our Board of
Directors, including a majority of the Disinterested Directors, and approved in
a board resolution delivered to the Warrant Agent or (ii) a nationally
recognized investment banking, appraisal or valuation firm, which is not an
Affiliate of our company, in each case, taking into account, among all other
factors deemed relevant by our Board of Directors or such investment banking,
appraisal or valuation firm, the trading price and volume of such security on
any national securities exchange or automated quotation system on which such
security is traded.
"Disinterested Director" means, in connection with any issuance of
securities that gives rise to a determination of the Fair Value thereof, each
member of our Board of Directors who is not an officer, employee, director or
other Affiliate of the party to whom we are proposing to issue the securities
giving rise to such determination.
No adjustment in the exercise price will be required unless such
adjustment would require an increase or decrease of at least one percent (1.0%)
in the exercise price, provided however, that any adjustment that is not made
will be carried forward and taken into account in any subsequent adjustment. In
the case of certain consolidations or mergers, or the sale of all or
substantially all of our assets to another corporation, (i) each warrant will
thereafter be exercisable for the right to receive the kind and amount of shares
of stock or other securities or property to which such holder would have been
entitled as a result of such consolidation, merger or sale had the warrants been
exercised immediately prior thereto and (ii) the Person formed by or surviving
any such consolidation or merger (if other than our company) or to which such
sale shall have been made will assume the obligations of our company under the
Warrant Agreement.
Reservation of Shares
We will at all times reserve and keep available such number of shares of
our common stock as will be issuable upon the exercise of all outstanding
warrants. Such shares of our common stock, when paid for and issued, will be
duly and validly issued, fully paid and non-assessable, free of preemptive
rights and free from all taxes, liens, charges and security interests with
respect to the issuance thereof.
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<PAGE>
Amendment
From time to time, our company and the Warrant Agent, without the consent
of the holders of the warrants, may amend or supplement the Warrant Agreement
for certain purposes, including curing defects or inconsistencies or making any
change that does not materially adversely affect the legal rights of any holder.
Any amendment or supplement to the Warrant Agreement that materially adversely
affects the legal rights of the holders of the warrants will require the written
consent of the holders of a majority of the then outstanding warrants (excluding
warrants held by Holdings or any of its Affiliates). The consent of each holder
of the warrants affected will be required for any amendment pursuant to which
the exercise price would be increased or the number of warrant shares
purchasable upon exercise of warrants would be decreased (other than pursuant to
adjustments provided in the Warrant Agreement).
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
The following is a summary of certain of the rights and privileges
pertaining to the shares of our capital stock, including shares of our common
stock issuable upon exercise of the warrants. Our authorized capital stock
consists of 15,000,000 shares of Common Stock, par value $0.001 per share, of
which 1,385,169 shares are outstanding (excluding 172,853 shares reserved for
issuance for outstanding warrants, including the warrants offered by this
prospectus) and 3,000,000 shares of preferred stock, par value $0.001 per share,
of which 1,400,000 shares are outstanding. See "--PIK Preferred Stock."
Common Stock
Voting Rights. The holders of shares are entitled to one vote per share on
all matters submitted for action by the stockholders. There is no provision for
cumulative voting with respect to the election of directors. Accordingly, the
holders of more than 50% of the shares can, if they choose to do so, elect the
entire Board of Directors and determine most matters on which stockholders are
entitled to vote.
Dividend Rights. Subject to the preferential rights of holders of
outstanding shares of preferred stock, holders of shares are entitled to share
equally in all dividends declared on shares of common stock, whether payable in
cash, property or securities of our company.
Liquidation Rights; Other Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of our company, the holders
of Shares are entitled to share equally in the assets available for distribution
after payment of liabilities, subject to the rights of the holders of
outstanding shares of preferred stock. Holders of Shares have no conversion,
redemption or preemptive rights.
Transfer Agent and Registrar
The transfer agent and registrar for the our common stock is National City
Bank, Cleveland, Ohio.
PIK Preferred Stock
Our Board of Directors has authorized the designation of 3,000,000 shares
of 15% Senior Exchangeable Preferred Stock Due 2010 ("PIK Preferred Stock"), par
value $0.001 per share. Each share of PIK Preferred Stock accretes cumulative,
quarterly dividends at a compound rate of 15% per annum. Prior to August 1,
2003, dividends on the PIK Preferred Stock are payable in additional shares of
PIK Preferred Stock. After August 1, 2003, dividends are payable in cash. Shares
of PIK Preferred Stock have a liquidation preference equal to the sum of $25
plus, subject to certain conditions, accreted dividends. Shares of PIK Preferred
Stock are non-voting, except as otherwise provided by law or by agreement. The
PIK Preferred Stock is subject to redemption at the option of Holdings at any
time, at 115.00% of liquidation preference prior to August 1, 2003, at 107.50%
of liquidation preference from August 1, 2003 to July 31, 2004, at 105.00% of
liquidation preference from August 1, 2004 to July 31, 2005, at 102.50% of
liquidation preference from August 1, 2005 to July 31, 2006, and at 100.00% of
liquidation preference thereafter. On August 1, 2010, the PIK Preferred Stock
will be subject to mandatory redemption by Holdings. Upon the occurrence of a
Change of Control, each holder of PIK Preferred Stock will have the right to
require Holdings to repurchase all or any part of such holder's PIK Preferred
Stock at an offer price in cash equal to 101% of the liquidation preference
thereof. Holdings may at any time but subject to certain conditions exchange all
outstanding shares of PIK Preferred Stock for 15% Subordinated Exchange
Debentures due 2010 (the "Exchange Debentures"). The Exchange Debentures will
rank senior to all other subordinated debt (but junior to our 14% Senior
Discount Notes due 2008 and our guarantee of Insilco's obligations under its
credit facility), preferred stock and common equity of Holdings.
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<PAGE>
Warrants
In addition to the warrants offered hereby, we issued the DLJMB warrants
(which were issued together with the PIK Preferred Stock) to purchase 65,603
shares of our common stock at a purchase price of $0.01 per share and issued
warrants to purchase 44,850 shares of our common stock at a purchase price of
$0.01 per share as part of Units with our 14% Senior Discount Notes due 2008
issued August 17, 1998. In connection with the offering of the Holdings Units,
we granted to the holders thereof certain registration rights related thereto.
Other Stockholder Arrangements
In connection with the DLJMB equity investment, we and the DLJMB Funds
entered into an Investors' Agreement (the "Investors' Agreement") granting the
DLJMB Funds the right to demand registration of any of our common stock and
warrants acquired in the DLJMB equity investment or thereafter issued by us in
respect of such our common stock or warrants by way of conversion, exchange,
stock dividend, split or combination, recapitalization, merger, consolidation,
other reorganization or otherwise (the "Investors' Registrable Securities").
Under the Investors' Agreement, DLJMB (on behalf of the DLJMB Funds) is entitled
to require that we register some or all of the Investors' Registrable Securities
for a period of up to 180 days (or such lesser period as is necessary to
complete such offering) (an "Investors' Demand Registration"). The DLJMB Funds
are in the aggregate limited to four such Investors' Demand Registrations. In
addition, pursuant to the terms of the Investors' Agreement, if we proposes to
file a registration statement under the Securities Act with respect to any
offering of (or including) our common stock or warrants (other than certain
registrations relating to our common stock or warrants issued in certain
business combinations or pursuant to certain employee benefit plans), then we
will provide, subject to certain limitations, the DLJMB Funds an opportunity to
register their Investors' Registrable Securities of the same type as are
proposed to be registered on the same terms and conditions (an "Investors'
Piggyback Registration").
In connection with any Investors' Demand Registration or Investors'
Piggyback Registration, we will be responsible for all expenses incurred in
connection with such registration other than underwriting fees, discounts or
commissions that may be payable in connection with the sale of Investors'
Registrable Securities. In addition, we will indemnify the DLJMB Funds and the
underwriters and each of their employees and affiliates against certain
liabilities, including liabilities under the Securities Act, or will contribute
to payments such indemnitee may be required to make in respect thereof.
CVC is also a party to the Investors' Agreement. Under the Investor's
Agreement, CVC has the right to participate pro rata in any sale by the DLJMB
Funds of their our common stock above a threshold amount, and the DLJMB Funds
have the right to require CVC to participate pro rata in certain sales by the
DLJMB Funds of their our common stock. The Investors' Agreement also grants CVC
the right to participate in any demand registration made by the DLJMB Funds, on
a pro rata basis, and certain pre-emptive and other rights.
We have agreed to take such actions as may be necessary to permit the
DLJMB Funds to resell their shares of PIK Preferred Stock pursuant to Rule 144A
under the Securities Act, including, without limitation, preparing an offering
memorandum and entering into customary purchase agreements and registration
rights agreements.
The foregoing summarizes certain provisions of the Investors' Agreement,
but is not complete and is subject to, and qualified by reference to, the rest
of the Investors' Agreement, a copy of which has been filed as an exhibit to the
registration statement of which this prospectus forms a part.
Holdings and Water Street entered into a registration rights agreement
granting Water Street, among other things, the right to demand registration of
the our common stock retained by Water Street in the Merger or thereafter issued
by Holdings in respect of such our common stock by way of conversion, exchange,
stock dividend, split or combination, recapitalization, merger, consolidation,
other reorganization or otherwise (the "Registrable Securities").
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<PAGE>
Under the registration rights agreement, Water Street is entitled to
require that we register some or all of the Registrable Securities for a period
of up to 180 days (or such lesser period as is necessary to complete such
offering) (a "Demand Registration"). Water Street is limited to one such Demand
Registration, which it may exercise at any time from the date commencing six
months after the Mergers and continuing through the first anniversary thereof.
In addition, pursuant to the terms of the registration rights agreement, for the
period commencing six months after the Mergers and continuing through the first
anniversary of the Mergers, if we propose to file a registration statement under
the Securities Act with respect to any offering of (or including) our common
stock (other than certain registrations relating to our common stock issued in
certain business combinations or pursuant to certain employee benefit plans),
then we will provide Water Street an opportunity to register its Registrable
Securities on the same terms and conditions (a "Piggyback Registration"). To the
extent any affiliates of Water Street may hold or acquire our common stock, such
affiliates will be permitted to participate in any registration contemplated by
the registration rights agreement on the same terms as Water Street.
In connection with any Demand Registration or Piggyback Registration, we
will be responsible for all expenses incurred in connection with such
registration, except that Water Street (or such other participating holders, if
any) will pay any underwriting discounts or commissions that may be payable in
connection with the sale of its Registrable Securities. In addition, we will
indemnify Water Street and the underwriters and each of their employees and
affiliates against certain liabilities, including liabilities under the
Securities Act, or will contribute to payments Water Street may be required to
make in respect thereof. The registration rights agreement terminates, except
with respect to rights to indemnification, upon the earliest to occur of the
sale of all of the Registrable Securities, the first anniversary of the Mergers
and the mutual consent of the parties.
The foregoing summarizes the material provisions of the registration
rights agreement, but is not complete and is subject to, and qualified in its
entirety by reference to, the rest of the registration rights agreement, a copy
of which has been filed as an exhibit to the registration statement of which
this prospectus forms a part.
Section 203 of Delaware General Corporation Law
Holdings is a Delaware corporation subject to Section 203 of the DGCL. In
general, Section 203 prevents an "interested stockholder" (defined generally, as
a person owning 15% or more of a corporation's outstanding voting stock) from
engaging in a "business combination" (as defined) with a Delaware corporation
for three years following the date such person became an interested stockholder,
subject to certain exceptions, such as transactions effected with the approval
of the Board of Directors or of the holders of at least two-thirds of the
outstanding shares of voting stock not owned by the interested stockholder.
22
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following describes the material United States federal income tax
consequences of the ownership, disposition and exercise of Warrants applicable
to holders of Warrants. This summary is based on the Internal Revenue Code of
1986, as amended to the date hereof (the "Code"), administrative pronouncements,
judicial decisions and existing and proposed Treasury Regulations, and
interpretations of the foregoing, changes to any of which subsequent to the date
of this Prospectus may affect the tax consequences described herein, possibly
with retroactive effect. This summary discusses only Warrants and the shares of
Holdings Common Stock received upon exercise of a Warrant ("Warrant Shares")
held as capital assets within the meaning of Section 1221 of the Code. It does
not discuss all of the tax consequences that may be relevant to a holder in
light of his particular circumstances or to holders subject to special rules,
such as certain financial institutions, tax-exempt entities, insurance
companies, dealers and traders in securities and holders who hold the Warrants
or Warrant Shares as part of a hedging transaction, "straddle," conversion
transaction or other integrated transaction, or persons who have ceased to be
United States citizens or to be taxed as resident aliens. Persons considering
the purchase of Warrants should consult their tax advisors with regard to the
application of the United States federal income tax laws to their particular
situations as well as any tax consequences arising under the laws of any state,
local or foreign taxing jurisdiction.
As used herein, the term "U.S. Holder" means a beneficial owner of a
Warrant or Warrant Share that for United States federal income tax purposes is
(i) a citizen or resident of the United States, (ii) a corporation created or
organized in or under the laws of the United States or of any political
subdivision thereof, (iii) an estate the income of which is subject to United
States federal income taxation regardless of its source or (iv) a trust if a
court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have the
authority to control all substantial decisions of the trust.
"Non-U.S. Holder" means an owner of a Warrant or Warrant Share that is,
for United States federal income tax purposes, (i) a nonresident alien
individual, (ii) a foreign corporation, (iii) a nonresident alien fiduciary of a
foreign estate or trust or (iv) a foreign partnership one or more of the members
of which is a nonresident alien individual, a foreign corporation or a
nonresident alien fiduciary of a foreign estate or trust.
U.S. Holders
The Warrants
A U.S. Holder will generally not recognize any gain or loss upon exercise
of any Warrants (except with respect to any cash received in lieu of a
fractional Warrant Share). A U.S. Holder will have an initial tax basis in the
Warrant Shares received on exercise of the Warrants equal to the sum of its tax
basis in the Warrants and the aggregate cash exercise price, if any, paid in
respect of such exercise. A U.S. Holder's holding period in such Warrant Shares
will commence on the day after the Warrants are exercised, although it is
possible that, in a cashless exercise of a Warrant, a U.S. Holder's holding
period in such Warrant Shares would include the holding period of the Warrant.
If a Warrant expires without being exercised, a U.S. Holder will recognize
a capital loss in an amount equal to its tax basis in the Warrant. Upon the sale
or exchange of a Warrant, a U.S. Holder will generally recognize a capital gain
or loss equal to the difference, if any, between the amount realized on such
sale or exchange and the U.S. Holder's tax basis in such Warrant. Such capital
gain or loss will be long-term capital gain or loss if, at the time of such sale
or exchange, the Warrant has been held for more than one year.
Under Section 305 of the Code, a U.S. Holder of a Warrant may be deemed to
have received a constructive distribution from Holdings, which may result in the
inclusion of ordinary dividend income, in the event of certain adjustments to
the number of Warrant Shares to be issued on exercise of a Warrant.
23
<PAGE>
Backup Withholding
Certain noncorporate U.S. Holders may be subject to backup withholding at
a rate of 31% on dividends received with respect to Warrant Shares, and the
proceeds of a disposition of a Warrant or Warrant Shares. Backup withholding
will apply only if the U.S. Holder (i) fails to furnish its Taxpayer
Identification Number ("TIN") which, in the case of an individual, is his or her
Social Security Number, (ii) furnishes an incorrect TIN, (iii) is notified by
the Internal Revenue Service ("IRS") that it has failed to properly report
payments of interest or dividends or (iv) under certain circumstances, fails to
certify, under penalty of perjury, that it has furnished a correct TIN and has
not been notified by the IRS that it is subject to backup withholding. U.S.
Holders should consult their tax advisors regarding their qualification for
exemption from backup withholding and the procedure for obtaining such an
exemption if applicable. The amount of any backup withholding from a payment to
a U.S. Holder is not an additional tax and is allowable as a credit against such
U.S. Holder's United States federal income tax liability and may entitle such
U.S. Holder to a refund, provided that the required information is furnished to
the IRS.
Non-U.S. Holders
Under present United States federal tax law, and subject to the discussion
below concerning backup withholding:
(a) Dividends paid to a Non-U.S. Holder of Warrant Shares (and, after
December 31, 1999, any deemed dividends resulting from certain adjustments to
the number of Warrant Shares to be issued on exercise of a Warrant) generally
will be subject to withholding tax at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty.
(b) A Non-U.S. Holder of a Warrant or Warrant Shares will not be subject
to United States federal income tax on gain realized on the sale, exchange or
other disposition of such Warrant or Warrant Shares, unless (i) such holder is
an individual who is present in the United States for 183 days or more in the
taxable year of the disposition, and either the gain is attributable to an
office or other fixed place of business maintained by such individual in the
United States or, generally, such individual has a "tax home" in the United
States, (ii) such gain is effectively connected with the Non- U.S. Holder's
conduct of a trade or business in the United States, or (iii) the Warrant or
Warrant Share was a "United States real property interest" as defined in Section
897(c)(1) of the Code at any time during the five year period prior to the sale
or exchange or at any time during the time that the Non-U.S. Holder held such
Warrant or Warrant Share, whichever time was shorter. A Warrant or Warrant Share
would be a United States Real Property Interest only if, at any time during the
five years prior to the sale or exchange of such Warrant or Warrant Share or at
any time during the period that the Non-U.S. Holder held such Warrant or Warrant
Share, whichever time was shorter, Holdings had been a "United States real
property holding corporation" as defined in Section 897(c)(2) of the Code.
Holdings believes that it is not, has not been and will not become a "United
States real property holding corporation" for federal income tax purposes. If,
at the time of the disposition of a Warrant or Warrant Shares, Holdings Common
Stock is considered to be regularly traded on an established securities market,
the rules in clause (iii) above would only apply to a Non-U.S. Holder who
directly or constructively had owned more than 5% of such series of Common Stock
during the relevant time period.
(c) An individual Non-U.S. Holder who is treated as the owner of, or has
made certain lifetime transfers of, an interest in a Warrant or Warrant Shares
will be required to include the value thereof in his gross estate for U.S.
federal estate tax purposes, and may be subject to U.S. federal estate tax
unless an applicable estate tax treaty provides otherwise.
Currently, for purposes of determining whether tax is to be withheld at a
30% rate or at a reduced treaty rate as described in paragraph (a) above,
Holdings ordinarily will presume that dividends paid on or before December 31,
1999 to an address in a foreign country are paid to a resident of such country
absent knowledge that such presumption is not warranted. Under Treasury
Regulations effective for payments after December 31, 1999, Non-U.S. Holders
will be required to satisfy certain applicable certification requirements to
claim treaty benefits.
24
<PAGE>
If a Non-U.S. Holder of a Warrant or Warrant Share is engaged in a trade
or business in the United States, and if dividends with respect to Warrant
Shares or gain realized on the sale, exchange or other disposition of Warrants
or Warrant Shares is effectively connected with the conduct of such trade or
business, the Non-U.S. Holder, although exempt from the withholding tax
discussed in the preceding paragraphs, will generally be subject to regular
United States income tax on such effectively connected income in the same manner
as if it were a U.S. Holder. See "--U.S. Holders" above. Such a holder will be
required to provide to the withholding agent a properly executed IRS Form 4224
(or, on or after January 1, 2000, a Form W-8) to claim an exemption from
withholding tax. In addition, if such Non- U.S. Holder is a foreign corporation,
it may be subject to a 30% branch profits tax (unless reduced or eliminated by
an applicable treaty) on its earnings and profits for the taxable year
attributable to such effectively connected income, subject to certain
adjustments.
Backup Withholding and Information Reporting
Backup withholding (described above under "--U.S. Holders--Backup
Withholding") generally will not apply to dividends paid on or before December
31, 1999 to a Non-U.S. Holder at an address outside the United States, provided
Holdings or its paying agent does not have actual knowledge that the payee is a
United States Person. Under Treasury Regulations effective for payments made
after December 31, 1999, however, a Non-U.S. Holder will be subject to backup
withholding unless applicable certification requirements are met.
Under current Treasury Regulations, payments on the sale, exchange or
other disposition of a Warrant or Warrant Share made to or through a foreign
office of a broker generally will not be subject to backup withholding. However,
if such broker is (i) a United States person, (ii) a controlled foreign
corporation for United States federal income tax purposes, (iii) a foreign
person 50 percent or more of whose gross income is effectively connected with a
United States trade or business for a specified three-year period or (iv), in
the case of payments made after December 31, 1999, a foreign partnership with
certain connections to the United States, then information reporting (but not
backup withholding) will be required unless the broker has in its records
documentary evidence that the beneficial owner is not a United States person and
certain other conditions are met or the beneficial owner otherwise establishes
an exemption. Backup withholding may apply to any payment that such broker is
required to report if the broker has actual knowledge that the payee is a United
States person. Payments to or through the United States office of a broker will
be subject to backup withholding and information reporting unless the holder
certifies, under penalties of perjury, that it is not a United States person or
otherwise establishes an exemption.
Non-U.S. Holders of Warrants or Warrant Shares should consult their tax
advisers regarding the application of information reporting and backup
withholding in their particular situations, the availability of an exemption
therefrom, and the procedure for obtaining such an exemption, if available. Any
amount withheld from a payment to a Non-U.S. Holder under the backup withholding
rules is not an additional tax and is allowable as a credit against such
holder's United States federal income tax liability, if any, or may entitle such
holder to a refund, provided that the required information is furnished to the
IRS.
25
<PAGE>
PLAN OF DISTRIBUTION
We will receive no proceeds from this offering, other than in connection
with the exercise of warrants. The warrants and the our common stock issued upon
the exercise of the warrants offered hereby may be sold by the warrantholders
from time to time in transactions in the over-the-counter market, in negotiated
transactions, in underwritten offerings, or a combination of such methods of
sale, at fixed prices which may be changed, at market prices prevailing at the
time of sale, at prices related to prevailing market prices or at negotiated
prices. The warrantholders may effect such transactions by selling the warrants
and our common stock issued upon the exercise of the warrants to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the warrantholders and/or the
purchasers of the warrants for whom such broker-dealers may act as agents or to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions).
In order to comply with the securities laws of certain states, if
applicable, the warrants and the our common stock will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the warrants and the our common stock may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.
The warrantholders and any broker-dealers or agents that participate with
the warrantholders in the distribution of the warrants or our common stock
issued upon the exercise of the warrants may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commissions received by them
and any profit on the resale of the warrants or our common stock issued upon the
exercise of the warrants purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
Each warrantholder will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of shares of the our common stock by the
warrantholders.
The costs of the registration of the warrants will be paid by us,
including, without limitation, SEC filing fees and expenses of compliance with
state securities or "blue sky" laws; provided, however, that the selling holders
will pay all underwriting discounts and selling commissions, if any. The selling
holders will be indemnified by us against certain civil liabilities, including
certain liabilities under the Securities Act, or will be entitled to
contribution in connection therewith.
LEGAL MATTERS
Certain legal matters with respect to the validity of the warrants and
shares of our common stock issuable upon the exercise of the warrants offered
hereby are being passed upon for us by Davis Polk & Wardwell, New York, New
York.
EXPERTS
The financial statements of Insilco as of December 31, 1998 and 1997, and
for each of the years in the three-year period ended December 31, 1998, have
been incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
26
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all estimated expenses incurred or
expected to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered hereby, other than underwriting
discounts and commissions.
Item Amount
---- ---------
SEC Registration Fee...................................... $ 1,919
Legal Fees and Expenses................................... 25,000
Accounting Fees and Expenses.............................. 5,000
Other..................................................... 500
---------
Total.................................................. $ 32,419
=========
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify any of its directors or officers who was or is a party, or is
threatened to be made a party to any third party proceeding by reason of the
fact that such person is or was a director or officer of the corporation,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reason to believe that such person's conduct was unlawful. In
a derivative action, i.e., one by or in the right of the corporation, the
corporation is permitted to indemnify directors and officers against expenses
(including attorneys' fees) actually and reasonably incurred by them in
connection with the defense or settlement of an action or suit if they acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made if such person shall have been adjudged liable to
the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
directors or officers are fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability. Article Seventh of Insilco's
Certificate of Incorporation provides for full indemnification of its officers,
directors, employees and agents to the extent permitted by Section 145.
Insilco provides insurance from commercial carriers against certain
liabilities incurred by the directors and officers of Insilco.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
Exhibit
Number Description
------- -----------
1.1* Warrant Registration Rights Agreement dated as of November 9, 1998
between Insilco, the Guarantors and Donaldson, Lufkin & Jenrette
Securities Corporation, as Initial Purchaser
P-1
<PAGE>
2.1 Agreement and Plan of Merger, dated as of March 24, 1998, among
Insilco, INR Holding Co., and Silkworm Acquisition Corporation
(incorporated by reference to Exhibit 10(n) to the Registration
Statement on Form S-4 (Reg. No. 333-51145) of Insilco).
2.2 Amendment No. 1 to the Agreement and Plan of Merger, dated June 8,
1998, among Insilco, INR Holding Co. and Silkworm Acquisition
Corporation (incorporated by reference Exhibit 10(r) to the
Registration Statement on Form S-4 (Reg. No. 333-51145) of Insilco).
3.1.1 Certificate of Incorporation (incorporated by reference to Exhibit
3.1 to the Current Report on Form 8-K filed by Insilco on August 18,
1998).
3.1.2 By laws incorporated by reference to Exhibit 3.2 to the Current
Report on Form 8-K filed by Insilco on August 18, 1998).
4.1* Warrant Agreement dated as of November 9, 1998 between Insilco
Holding Co. and National City Bank, as Warrant Agent.
4.2 Investors' Agreement, dated as of August 17, 1998, among Insilco
Holding Co. and the investors named therein (incorporated by
reference to Exhibit 4.5 to the Registration Statement on Form S-1
(Reg. No. 333-65039) of Insilco Holding Co.
5.1* Opinion of Davis Polk & Wardwell with respect to the validity of the
securities.
10.1 Insilco Holding Co. Direct Investment Program (incorporated by
reference to Exhibit 4(c) to the Registration Statement on Form S-8
(File No. 333-61809)).
10.2 Insilco Holding Co. Stock Option Plan (incorporated by reference to
Exhibit 4(d) to the Registration Statement on Form S-8 (File No.
333-61809)).
10.3 Insilco Holding Co. and Insilco Corporation Equity Unit Plan
(incorporated by reference to Exhibit 4(c) to the Registration
Statement on Form S-8 (File No. 333-61811)).
10.4 Indenture, dated as of November 9, 1998 between Insilco and the
Trustee (incorporated by reference to Exhibit 4.3 to the
Registration Statement on Form S-1 (File No. 333-71947)
10.5 First Supplemental Indenture, dated as of December 21, 1998 between
Insilco and the Trustee (incorporated by reference to Exhibit 4.3 to
the Registration Statement on Form S-1 (File No. 333-71947)).
10.6 Second Supplemental Indenture dated as of January 25, 1999 between
Insilco and the Trustee (incorporated by reference to Exhibit 4.4 to
the Registration Statement on Form S-1 (File No. 333-71947)).
10.7 Credit Agreement among Insilco Corporation and a syndicate of banks
and other financial institutions led by Donaldson, Lufkin & Jenrette
Securities Corporation, DLJ Capital Funding and The First National
Bank of Chicago (incorporated by reference to Exhibit 4.4 to the
Registration Statement on Form S-1 (File No. 333-71947)).
23.1* Consent of Davis Polk & Wardwell (contained in their opinion filed
as Exhibit 5.1).
23.2* Consent of KPMG LLP.
24.1* Power of Attorney.
P-2
<PAGE>
- ------------------
* Filed herewith
(b) Financial Statement Schedules.
Schedule II--Valuation and Qualifying Accounts.
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown on the
financial statements or notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) under the Securities Act of 1933
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
Insilco pursuant to the provisions described in Item 15, or otherwise, Insilco
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Insilco of expenses incurred or paid
by a director, officer or controlling person of Insilco in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered,
Insilco will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
P-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this registration to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dublin, State of Ohio, on the 11th day
of May, 1999.
INSILCO HOLDING CO.
By: *
---------------------------------------
Robert L. Smialek,
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chairman and Chief Executive Officer May 11, 1999
- ------------------------- (Principal Executive Officer)
Robert L. Smialek
* Vice President and Chief Financial Officer May 11, 1999
- ------------------------- (Principal Financial Officer)
David A. Kauer
/s/ Michael R. Elia Vice President and Comptroller May 11, 1999
- ------------------------- (Principal Accounting Officer)
Michael R. Elia
*
- ------------------------- Director May 11, 1999
William F. Dawson
*
- ------------------------- Director May 11, 1999
Thompson Dean
*
- ------------------------- Director May 11, 1999
David Y. Howe
*
- ------------------------- Director May 11, 1999
Randall E. Curran
*
- ------------------------- Director May 11, 1999
Keith Palumbo
*
- ------------------------- Director May 11, 1999
John F. Fort III
*By: /s/ Kenneth H. Koch
-----------------------------
Kenneth H. Koch
Attorney-in-fact
</TABLE>
Exhibit 1.1
EXECUTION COPY
- -------------------------------------------------------------------------------
WARRANT
REGISTRATION RIGHTS AGREEMENT
INSILCO HOLDING CO.
--------------------------------------------------------------
Warrants to Purchase 62,400 Shares of Common Stock
--------------------------------------------------------------
Dated as of November 9, 1998
--------------------------------------------------------------
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
- ------------------------------------------------------------------------------
<PAGE>
This Warrant Registration Rights Agreement (this "Agreement") is made
and entered into as of November 9, 1998, by and among Insilco Holding Co., a
Delaware corporation (the "Issuer"), and Donaldson, Lufkin & Jenrette Securities
Corporation (the "Initial Purchaser"), which has agreed to purchase the Warrants
of the Issuer issued pursuant to the Warrant Agreement (the "Warrant Agreement")
between the Issuer and National City Bank, as warrant agent (the "Warrant
Agent").
The Warrants are being issued and sold in connection with the offering
by Insilco Corporation, a wholly owned subsidiary of the Issuer ("Insilco") of
120,000 Units each consisting of (i) $1,000 principal amount at maturity of 12%
Senior Subordinated Notes due 2007 (the "Notes") of Insilco and (ii) one
Warrant.
This Agreement is made pursuant to the Purchase Agreement, dated
November 2, 1998 (the "Purchase Agreement"), by and between the Issuer, Insilco
and the Initial Purchaser. In order to induce the Initial Purchaser to purchase
the Warrants, the Issuer 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 9 of the
Purchase Agreement. Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Warrant Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144.
Black Out Notice: As defined in Section 4(b) hereof.
Black Out Period: As defined in Section 3(a) hereof.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expiration Date: 5:00 p.m. New York City time on August 15, 2007.
Holders: As defined in Section 2 hereof.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all
<PAGE>
2
material incorporated by reference into such Prospectus.
Registration Statement: Any registration statement of the Issuer
relating to the registration for resale of Transfer Restricted Securities that
is filed pursuant to the provisions of this Agreement and including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Rule 144: Rule 144 promulgated under the Act.
Transfer Restricted Securities: (a) Each Warrant and Warrant Share held
by an Affiliate of the Issuer and (b) each other Warrant and Warrant Share until
the earlier to occur of (i) the date on which such Warrant or Warrant Share has
been disposed of in accordance with a Registration Statement or the date on
which such Warrant Share is issued upon exercise of a Warrant in accordance with
a registration statement filed under the Act and (ii) the date on which such
Warrant or Warrant Share is distributed to the public pursuant to Rule 144 under
the Act.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person is (i) the holder of record of any
definitive certificated security which are Transfer Restricted Securities or
(ii) a beneficial holder of any global security which are Transfer Restricted
Securities.
SECTION 3. SHELF REGISTRATION
(a) Shelf Registration. The Issuer shall prepare and cause to be filed
with the Commission on or before 120 days from the Closing Date pursuant to Rule
415 under the Securities Act a Registration Statement on the appropriate form
relating to resales of Transfer Restricted Securities by the Holders thereof.
The Company shall use its reasonable best efforts to cause the Registration
Statement to be declared effective by the Commission on or before 150 days after
the Closing Date.
To the extent necessary to ensure that the Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 3(a), the Issuer shall use its
reasonable best efforts to keep any Registration Statement required by this
Section 3(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 Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the earlier of (i) two years following the first date as of which no Warrants
remain outstanding and (ii) if all of the Warrants expire unexercised, the
expiration of the Warrants; provided that such obligation shall expire before
such date if the Issuer delivers to the Warrant Agent a written opinion of
counsel to the Issuer (which opinion of counsel shall be satisfactory to the
Issuer) that all Holders (other than Affiliates of the Issuer) of Warrants and
Warrant Shares may resell the Warrants and the Warrant Shares without
registration under the Act and without restriction as to the manner, timing or
volume of any such sale and instruct the Warrant Agent to remove the Private
Placement Legend from all Warrants and Warrant shares; and provided, further,
that notwithstanding the foregoing, any Affiliate of the Issuer may, with notice
to the Issuer, require the Issuer to keep the Registration Statement
continuously effective for resales by such Affiliate for so long as such
Affiliate holds
<PAGE>
3
Warrants or Warrant Shares, including as a result of any market-making
activities or other trading activities of such Affiliate. Notwithstanding the
foregoing, the Issuer shall not be required to amend or supplement the
Registration Statement, any related prospectus or any document incorporated
therein by reference, for a period (a "Black Out Period") not to exceed, for so
long as this Agreement is in effect, an aggregate of 60 days in any calendar
year, in the event that (i) an event 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 would, in the
Issuer's good faith judgment, 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 (ii)(A) the Issuer determines in its good faith judgment that the disclosure
of such event at such time would have a material adverse effect on the business,
operations or prospects of the Issuer or (B) the disclosure otherwise relates to
a material business transaction which has not yet been publicly disclosed;
provided that such Black Out Period shall be extended for any period, not to
exceed an aggregate of 30 days in any calendar year, during which the Commission
is reviewing any proposed amendment or supplement to the Registration Statement,
any related prospectus or any document incorporated therein by reference which
has been filed by the Issuer; and provided, further, that no Black Out Period
may be in effect during the three months prior to the Expiration Date.
(b) Provision by Holders of Certain Information in Connection with the
Registration Statement. No Holder of Transfer Restricted Securities may include
any of its Transfer Restricted Securities in any Registration Statement pursuant
to this Agreement unless and until such Holder furnishes to the Issuer in
writing, within 20 days after receipt of a request therefor, the information
specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for
use in connection with any 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 Issuer by such Holder not materially misleading.
SECTION 4. REGISTRATION PROCEDURES
(a) In connection with the Registration Statement and any related
Prospectus required by this Agreement, the Issuer shall:
(i) use its reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities
being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the
Issuer pursuant to Section 3(b) hereof), and pursuant thereto the
Issuer will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under
the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods
of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof;
(ii) use its reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 of this Agreement.
Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue
statement of material fact or omit to state any material fact necessary
to make the statements therein, in the light
<PAGE>
4
of the circumstances under which they were made, not misleading or (B)
not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Issuer
shall, subject to Section 3(a), file promptly an appropriate amendment
to such Registration Statement or a supplement to the Prospectus, as
applicable, curing such defect, and, in the case of an amendment, use
its reasonable best efforts to cause such amendment to be declared
effective as soon as practicable;
(iii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule<-1- 95>424 under the Act, and
to comply fully with Rules 424, 430A and 462, as applicable, under the
Act in a timely manner; and comply with the provisions of the Act with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iv) advise the Initial Purchaser promptly and, if requested
by the Initial Purchaser, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any applicable Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, and (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Issuer shall use its
reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(v) subject to Section 4(a)(ii), if any fact or event
contemplated by Section 4(a)(iv)(D) hereof shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the
<PAGE>
5
statements therein, in the light of the circumstances under which they
were made, not misleading;
(vi) furnish to the Initial Purchaser, before filing with the
Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment
of such Persons, if any, for a period of at least five Business Days,
and the Issuer will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by
reference) to which the Initial Purchaser shall reasonably object
within five Business Days after the receipt thereof. The Initial
Purchaser shall be deemed to have reasonably objected to such filing if
such Registration Statement, amendment, 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, in the light of the circumstances under which they
were made, not misleading or fails to comply with the applicable
requirements of the Act;
(vii) promptly prior to the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the Initial Purchaser,
make the Issuer's representatives available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as the Initial
Purchaser may reasonably request;
(viii) make available, at reasonable times, for inspection by
the Initial Purchaser and any attorney or accountant retained by the
Initial Purchaser, all financial and other records, pertinent corporate
documents of the Issuer and cause the Issuer's officers, directors and
employees to supply all information reasonably requested by the Initial
Purchaser, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the
filing thereof and prior to its effectiveness;
(ix) if requested by the Initial Purchaser, promptly include
in any Registration Statement or Prospectus, pursuant to a supplement
or post-effective amendment if necessary, such information as the
Initial Purchaser may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities and the use of the
Registration Statement or Prospectus for market-making activities; and
make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Issuer is
notified of the matters to be included in such Prospectus supplement or
post-effective amendment;
(x) furnish to the Initial Purchaser and each Holder upon
request, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
(xi) deliver to the Initial Purchaser and each Holder, without
charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement
<PAGE>
6
thereto as the Initial Purchaser or such Holder reasonably may request;
the Issuer hereby consents to the use (in accordance with law and
subject to Section 4(d) hereof) of the Prospectus and any amendment or
supplement thereto by each selling Person in connection with the
offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto and all
market-making activities of the Initial Purchaser, as the case may be;
(xii) upon the request of the Initial Purchaser, enter into
such agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be
reasonably requested by the Initial Purchaser in connection with any
sale or resale pursuant to any applicable Registration Statement. In
such connection, the Issuer shall:
(A) upon request of the Initial Purchaser, furnish
(or in the case of paragraphs (2) and (3), use its reasonable
best efforts to cause to be furnished) to the Initial
Purchaser, upon the effectiveness of the Registration
Statement:
(1) a certificate, dated such date, signed
on behalf of the Issuer by (x) the President or any
Vice President and (y) a principal financial or
accounting officer of the Issuer, confirming, as of
the date thereof, the matters set forth in Sections
6(cc), 9(a) and 9(b) of the Purchase Agreement and
such other similar matters as such Person may
reasonably request;
(2) an opinion, dated the date of
effectiveness of the Registration Statement, of
counsel for the Issuer covering matters similar to
those set forth in Sections 9(e) and (f) of the
Purchase Agreement and such other matters as the
Initial Purchaser may reasonably request, and in any
event including a statement to the effect that such
counsel has participated in conferences with officers
and other representatives of the Issuer,
representatives of the independent public accountants
for the Issuer and have considered the matters
required to be stated therein and the statements
contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying
as to materiality to the extent such counsel deems
appropriate upon the statements of officers and other
representatives of the Issuer) and without
independent check or verification), no facts came to
such counsel's attention that caused such counsel to
believe that the applicable Registration Statement,
at the time such Registration Statement or any
post-effective amendment thereto became effective
contained an untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus
contained in such Registration Statement as of its
date contained an untrue statement of a material fact
or omitted 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. Without
<PAGE>
7
limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility
for, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial
data included in any Registration Statement
contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the
date of effectiveness of the Registration Statement,
from the Issuer's independent accountants, in the
customary form and covering matters of the type
customarily covered in comfort letters to
underwriters in connection with underwritten
offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Section 9(h) of
the Purchase Agreement; and
(B) deliver such other documents and certificates as
may be reasonably requested by the Initial Purchaser to
evidence compliance with the matters covered in clause (A)
above and with any customary conditions contained in any
agreement entered into by the Issuer pursuant to this clause;
(xiii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; provided that the Issuer shall
not be required to register or qualify as a foreign corporation where
it is not now so qualified or to take any action that would subject it
to the service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xiv) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the selling Holders may request at
least two Business Days prior to such sale of Transfer Restricted
Securities;
(xv) use its reasonable best efforts to cause the disposition
of the Transfer Restricted 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 Transfer
Restricted Securities, subject to the proviso contained in clause
(xiii) above;
<PAGE>
8
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Warrant Agent with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with The Depository
Trust Company;
(xvii) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in Rule 158(c) under the Act); and
(xviii) provide promptly to the Initial Purchaser, upon
request, each document filed with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange Act.
(b) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security and the Initial Purchaser agrees that, upon receipt
of the notice from the Issuer of the commencement of a Black Out Period (in each
case, a "Black Out Notice"), such Person will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement until such Person is advised in writing by the Issuer of the
termination of the Black Out Period. Each Person receiving a Black Out Notice
hereby agrees that it will either (i) destroy any Prospectuses, other than
permanent file copies, then in such Person's possession which have been replaced
by the Issuer with more recently dated Prospectuses or (ii) deliver to the
Issuer (at the Issuer's expense) all copies, other than permanent file copies,
then in such Person's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Black Out
Notice.
SECTION 5. REGISTRATION EXPENSES
All expenses incident to the Issuer's performance of or compliance with
this Agreement will be borne by the Issuer, regardless of whether a Registration
Statement becomes effective, including, without limitation: (i) all registration
and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including printing Prospectuses (whether for sales, market-making or
otherwise), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Issuer; (v) all application and filing fees in
connection with listing the Warrant Shares on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the Issuer
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Issuer will, in any event, 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
Issuer.
<PAGE>
9
SECTION 6. INDEMNIFICATION
(a) The Issuer agrees to indemnify and hold harmless each Holder, its
directors, officers and each Person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Issuer to any Holder or
any prospective purchaser of Transfer Restricted Securities, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by an untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to a Holder furnished in
writing to the Issuer by such Holder.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Issuer, its directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Issuer, to the same extent
as the foregoing indemnity from the Issuer set forth in Section 6(a) hereof, but
only with reference to information relating to such Holder furnished in writing
to the Issuer by such Holder expressly for use in any Registration Statement. In
no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 6(a) or 6(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing,
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that,
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 6(a) and 6(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 6(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party, unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more
<PAGE>
10
legal defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by a majority of the Holders, in the case of
the parties indemnified pursuant to Section 6(a), and by the Issuer, in the case
of parties indemnified pursuant to Section 6(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action effected with its written consent. Notwithstanding the foregoing,
in the case of Section 6(a) hereof, any such settlement may be effected by the
Initial Purchaser without the Issuer's written consent if the settlement is
entered into more than twenty Business Days after the Issuer shall have received
a request from the Initial Purchaser for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
Issuer) and, prior to the date of such settlement, the Issuer shall have failed
to comply with such reimbursement request. In the case of Section 6(a) hereof,
the Issuer shall not, without the prior written consent of the Initial
Purchaser, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party. Notwithstanding the foregoing, in
the case of Section 6(b) hereof, any such settlement may be effected by the
indemnified party without the indemnifying party's written consent if the
settlement is entered into more than twenty Business Days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the Indemnified party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. In the case of Section 6(b) hereof, the indemnifying
party shall not, without the prior written consent of the indemnified party,
effect any settlement or compromise of, or consent to the entry of judgment with
respect to, any pending or threatened action in respect of which the indemnified
party is or could have been a party and indemnity or contribution may be or
could have been sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability on claims that are or could have been the
subject matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in this Section
6 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuer, on the one
hand, and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 6(d)(i) is not permitted
<PAGE>
11
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 6(d)(i) hereof but also the relative
fault of the Issuer, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Issuer, on the one hand, and
of the Holder, on the other hand, 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 Issuer, on the one hand, or by the Holder, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 6(a),
any legal or other fees or expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments.
The Issuer and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6, no Holder, its directors, its
officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 6(d) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.
(e) The Issuer agrees that the indemnity and contribution provisions of
this Section 6 shall apply to the Initial Purchaser to the same extent, on the
same conditions, as it applies to Holders.
SECTION 7. RULE 144
The Issuer agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Issuer is subject to Section 13 or 15(d) of the Exchange Act, to make all
filings required thereby in a timely manner in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144.
SECTION 8. MISCELLANEOUS
(a) Remedies. The Issuer acknowledges and agrees that any failure by
the Issuer to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Initial Purchaser or the Holders for which
there is no adequate remedy at law, that it will not be possible
<PAGE>
12
to measure damages for such injuries precisely and that, in the event of any
such failure, the Initial Purchaser or any Holder may obtain such relief as may
be required to specifically enforce the Issuer's obligations under Section 3
hereof. The Issuer further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuer 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 inconsistent with
the rights granted to the holders of the Issuer'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 or departures from
the provisions hereof may not be given unless (i) in the case of this Section
8(c)(i), the Issuer has obtained the written consent of Holders of all
outstanding Transfer Restricted Securities, and (ii) in the case of all other
provisions hereof, the Issuer has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Issuer or its Affiliates);
provided that this Agreement may be amended without the consent of any Holder
pursuant to Section 11(l) of the Warrant Agreement.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements granting rights to Holders made hereunder
between the Issuer, on the one hand, and the Initial Purchaser, on the other
hand, and shall have the right to enforce such agreements directly to the extent
they may deem such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Warrant Agent, with a copy to the Warrant Agent; and
(ii) if to the Issuer:
Insilco Holding Co.
425 Metro Place N.
Box 7196
Dublin, Ohio 43017
Attention: Kenneth Koch, Esq.
With a copy to:
<PAGE>
13
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopier No.: (212) 450-4000
Attention: Richard D. Truesdell, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in Warrant Agreement.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including, without limitation, and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Warrant
Agreement. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.
(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 THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that 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) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This
<PAGE>
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
INSILCO HOLDING CO.
By:______________________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:______________________________________
Name:
Title:
Exhibit 4.1
EXECUTION COPY
================================================================================
INSILCO HOLDING CO.
Warrants to Purchase
62,400 Shares of Common Stock
WARRANT AGREEMENT
Dated as of November 9, 1998
NATIONAL CITY BANK
Warrant Agent
================================================================================
<PAGE>
WARRANT AGREEMENT, dated as of November 9, 1998 between
Insilco Holding Co., a Delaware corporation (the "Company"), and National City
Bank, as warrant agent (the "Warrant Agent").
WHEREAS, the Company proposes to issue warrants (the
"Warrants") to initially purchase up to an aggregate of 62,400 shares of Common
Stock, par value $.001 per share (the "Common Stock"), of the Company (the
Common Stock issuable on exercise of the Warrants being referred to herein as
the "Warrant Shares"), in connection with the offering (the "Offering") by
Insilco Corporation, the Company's wholly owned subsidiary ("Insilco"), of
120,000 Units (the "Units"), each consisting of $1,000 principal amount of
Insilco's 12% Senior Subordinated Notes due 2007 (the "Notes") and one Warrant,
each Warrant initially representing the right to purchase 0.52 of a Warrant
Share.
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act in connection
with the issuance of Warrant Certificates (as defined) and other matters as
provided herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
"144A Global Warrant" means a global Warrant substantially in
the form of Exhibit A hereto bearing the Global Warrant Legend and the
Private Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as
used with respect to any Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of such specified Person, whether through the
ownership of voting securities, by agreement or otherwise; provided
that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Warrant, the
rules and procedures of the Depositary.
"Business Day" means any day other than a Legal Holiday.
<PAGE>
2
"Closing Date" means the date hereof.
"Commission" means the Securities and Exchange Commission.
"Definitive Warrant" has the meaning given such term in
Section 3.1(b) hereof.
"Depositary" means, with respect to the Warrants issuable or
issued in whole or in part in global form, the Person specified in
Section 3.3 hereof as the Depositary with respect to the Warrants, and
any and all successors thereto appointed as Depositary hereunder and
having become such pursuant to the applicable provision of the
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Global Warrants" means, individually and collectively, each
of the Restricted Global Warrants and the Unrestricted Global Warrants,
substantially, in the form of Exhibit A hereto issued in accordance
with Section 3.1(b) and 3.5 hereof.
"Global Warrant Legend" means the legend set forth in Section
3.5(g)(ii), which is required to be placed on all Global Warrants
issued under this Warrant Agreement.
"Holder" means a person who is listed as the record owner of
Warrants.
"Indenture" means the indenture, dated the date hereof,
between Insilco and Star Bank, N.A. as trustee relating to the Notes.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Warrant through a Participant.
"Initial Purchaser" means Donaldson, Lufkin & Jenrette
Securities Corporation.
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act, which is not also a QIB.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York, or at a place of payment,
are authorized by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue on such payment for the
intervening period.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer,
<PAGE>
3
the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Vice-President of such Person.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Warrant Agent in form and substance
reasonably acceptable to the Warrant Agent. The counsel may be an
employee of or counsel to the Company, any subsidiary of the Company or
the Warrant Agent.
"Participant" means, with respect to the Depositary, a Person
who has an account with the Depositary.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof, including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity,
subdivision or business.
"Private Placement Legend" means the legend set forth in
Section 3.5(g)(i)(A) to be placed on all Warrants issued under this
Warrant Agreement except where otherwise permitted by the provisions of
this Warrant Agreement.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
"Registration Statement" as defined in the Warrant
Registration Rights Agreement or herein.
"Registrable Securities" shall mean the Warrants, the Warrant
Shares and any other securities issued or issuable with respect to the
Warrants or the Warrant Shares by way of a stock dividend or stock
split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization; provided that a security
ceases to be a Registrable Security when it is no longer a Transfer
Restricted Security. The Registrable Securities are entitled to the
benefits of the Warrant Registration Rights Agreement.
"Restricted Definitive Warrant" means a Definitive Warrant
bearing the Private Placement Legend.
"Restricted Global Warrant" means a Global Warrant bearing the
Private Placement Legend.
"Rule 144" means Rule 144 promulgated under the Securities
Act.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
<PAGE>
4
"Securities Act" means the Securities Act of 1933, as amended.
"Separation Date" means the earliest of (i) 180 days after the
closing of the Offering, (ii) the date on which a registration
statement with respect to a registered exchange offer for the Notes is
declared effective under the Securities Act, (iii) the date a shelf
registration statement with respect to the Notes is declared effective
under the Securities Act, (iv) such date as Donaldson, Lufkin &
Jenrette Securities Corporation in its sole discretion shall determine
and (v) the occurrence of a Change of Control (as defined in the
Indenture).
"Transfer Restricted Securities" shall mean (a) each Warrant
and Warrant Share held by an Affiliate of the Issuer and (b) each other
Warrant and Warrant Share until the earlier to occur of (i) the date on
which such Warrant or Warrant Share has been disposed of in accordance
with a Registration Statement (or the date on which such Warrant Share
is issued upon exercise of a Warrant in accordance with a Registration
Statement) and (ii) the date on which such Warrant or Warrant Share is
distributed to the public pursuant to Rule 144 under the Act.
"Trustee" means the trustee under the Indenture.
"Unrestricted Global Warrant" means a global Warrant
substantially in the form of Exhibit A attached hereto that bears the
Global Warrant Legend and that has the "Schedule of Exchanges of
Interests in the Global Warrant" attached thereto, and that is
deposited with or on behalf of and registered in the name of the
Depositary, representing Warrants that do not bear the Private
Placement Legend.
"Unrestricted Definitive Warrant" means one or more Definitive
Warrants that do not bear and are not required to bear the Private
Placement Legend.
"U.S. Person" means a U.S. person as defined in Rule 902(o)
under the Securities Act.
"Warrant Registration Rights Agreement" means the registration
rights agreement, dated as of November 9, 1998, by and among the
Company and the Initial Purchaser relating to the Warrants and the
Warrant Shares.
Section 2. Appointment of Warrant Agent.
The Company hereby appoints the Warrant Agent to act as agent
for the Company in accordance with the instructions set forth hereinafter in
this Agreement and the Warrant Agent hereby accepts such appointment.
Section 3. Issuance of Warrants; Warrant Certificates.
<PAGE>
5
3.1. Form and Dating.
(a) General.
The Warrants shall be substantially in the form of Exhibit A
hereto (the "Warrant Certificates"). The Warrants may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Warrant shall
be dated the date of the countersignature. The terms and provisions contained in
the Warrants shall constitute, and are hereby expressly made, a part of this
Warrant Agreement. The Company and the Warrant Agent, by their execution and
delivery of this Warrant Agreement, expressly agree to such terms and provisions
and to be bound thereby. However, to the extent any provision of any Warrant
conflicts with the express provisions of this Warrant Agreement, the provisions
of this Warrant Agreement shall govern and be controlling.
(b) Global Warrants.
Warrants issued in global form shall be substantially in the
form of Exhibit A attached hereto (including the Global Warrant Legend thereon
and the "Schedule of Exchanges of Interests in the Global Warrant" attached
thereto). Warrants issued in definitive form ("Definitive Warrants") shall be
substantially in the form of Exhibit A attached hereto (but without the Global
Warrant Legend thereon and without the "Schedule of Exchanges of Interests in
the Global Warrant" attached thereto). Each Global Warrant shall represent such
of the outstanding Warrants as shall be specified therein and each shall provide
that it shall represent the number of outstanding Warrants from time to time
endorsed thereon and that the number of outstanding Warrants represented thereby
may from time to time be reduced or increased, as appropriate, to reflect
exchanges and redemptions. Any endorsement of a Global Warrant to reflect the
amount of any increase or decrease in the number of outstanding Warrants
represented thereby shall be made by the Warrant Agent in accordance with
instructions given by the Holder thereof as required by Section 3.5 hereof.
3.2. Execution.
An Officer shall sign the Warrants for the Company by manual
or facsimile signature.
If the Officer whose signature is on a Warrant no longer holds
that office at the time a Warrant is countersigned, the Warrant shall
nevertheless be valid.
A Warrant shall not be valid until countersigned by the manual
signature of the Warrant Agent. The signature shall be conclusive evidence that
the Warrant has been properly issued under this Warrant Agreement.
<PAGE>
6
The Warrant Agent shall, upon a written order of the Company
signed by an Officer (a "Warrant Countersignature Order"), countersign Warrants
for original issue up to the number stated in the preamble hereto.
The Warrant Agent may appoint an agent acceptable to the
Company to countersign Warrants. Such an agent may countersign Warrants whenever
the Warrant Agent may do so. Each reference in this Warrant Agreement to a
countersignature by the Warrant Agent includes a countersignature by such agent.
Such an agent has the same rights as the Warrant Agent to deal with the Company
or an Affiliate of the Company.
3.3. Registrar.
The Company shall maintain an office or agency where Warrants
may be presented for registration of transfer or for exchange ("Warrant
Registrar"). The Warrant Registrar shall keep a register of the Warrants and of
their transfer and exchange. The Company may appoint one or more co-Warrant
Registrars. The term "Warrant Registrar" includes any co-Warrant Registrar. The
Company may change any Warrant Registrar without notice to any holder. The
Company shall notify the Warrant Agent in writing of the name and address of any
agent not a party to this Warrant Agreement. If the Company fails to appoint or
maintain another entity as Warrant Registrar, the Warrant Agent shall act as
such. The Company or any of its subsidiaries may act as Warrant Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Warrants.
The Company initially appoints the Warrant Agent to act as the
Warrant Registrar with respect to the Warrants.
3.4. Holder Lists.
The Warrant Agent shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders. If the Warrant Agent is not the Warrant Registrar, the
Company shall promptly furnish to the Warrant Agent at such times as the Warrant
Agent may request in writing, a list in such form and as of such date as the
Warrant Agent may reasonably require of the names and addresses of the Holders.
3.5. Transfer and Exchange.
(a) Transfer and Exchange of Global Warrants.
A Global Warrant may not be transferred as a whole except by
the Depositary to a nominee of the Depositary, by a nominee of the Depositary to
the Depositary or to another nominee of the Depositary, or by the Depositary or
any such nominee to a successor Depositary or
<PAGE>
7
a nominee of such successor Depositary. All Global Warrants will be exchanged by
the Company for Definitive Warrants if (i) the Company delivers to the Warrant
Agent notice from the Depositary that it is unwilling or unable to continue to
act as Depositary or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 120 days after the date of such notice from the Depositary or
(ii) the Company in its sole discretion determines that the Global Warrants (in
whole but not in part) should be exchanged for Definitive Warrants and delivers
a written notice to such effect to the Warrant Agent. Upon the occurrence of
either of the preceding events in (i) or (ii) above, Definitive Warrants shall
be issued in such names as the Depositary shall instruct the Warrant Agent.
Global Warrants also may be exchanged or replaced, in whole or in part, as
provided in Sections 3.6 and 3.7 hereof. A Global Warrant may not be exchanged
for another Warrant other than as provided in this Section 3.5(a) or pursuant to
Section 3.5(c), however, beneficial interests in a Global Warrant may be
transferred and exchanged as provided in Section 3.5(b) or (c) hereof.
(b) Transfer and Exchange of Beneficial Interests in the
Global Warrants.
The transfer and exchange of beneficial interests in the
Global Warrants shall be effected through the Depositary, in accordance with the
provisions of this Warrant Agreement and the Applicable Procedures. Beneficial
interests in the Restricted Global Warrants shall be subject to restrictions on
transfer comparable to those set forth herein to the extent required by the
Securities Act. Transfers of beneficial interests in the Global Warrants also
shall require compliance with either subparagraph (i) or (ii) below, as
applicable, as well as one or more of the other following subparagraphs, as
applicable:
(i) Transfer of Beneficial Interests in the Same Global
Warrant. Beneficial interests in any Restricted Global Warrant may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Warrant in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Warrant may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Warrant. No written
orders or instructions shall be required to be delivered to the Warrant
Registrar to effect the transfers described in this Section 3.5(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
in Global Warrants. In connection with all transfers and exchanges of
beneficial interests that are not subject to Section 3.5(b)(i) above,
the transferor of such beneficial interest must deliver to the Warrant
Registrar either (A) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance with the
Applicable Procedures directing the Depositary to credit or cause to be
credited a beneficial interest in another Global Warrant in an amount
equal to the beneficial interest to be transferred or exchanged and (2)
instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited
with such increase or (B) (1) a written order from a Participant or an
Indirect Participant given to the Depositary in
<PAGE>
8
accordance with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Warrant in an amount equal to the
beneficial interest to be transferred or exchanged and (2) instructions
given by the Depositary to the Warrant Registrar containing information
regarding the Person in whose name such Definitive Warrant shall be
registered. Upon effectiveness of the Registration Statement (as
defined in the Warrant Registration Rights Agreement) by the Company in
accordance with Section 3.5(f) hereof, the requirements of this Section
3.5(b)(ii) shall be deemed to have been satisfied upon receipt by the
Warrant Registrar of a certification required by the Company in
connection with such Registration Statement delivered by the Holder of
such beneficial interests in the Restricted Global Warrants. Upon
satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Warrants contained in this Agreement and
the Warrants or otherwise applicable under the Securities Act, the
Warrant Agent shall adjust the principal amount of the relevant Global
Warrant(s) pursuant to Section 3.5(h) hereof.
(iii) (intentionally omitted)
(iv) Transfer and Exchange of Beneficial Interests in a
Restricted Global Warrant for Beneficial Interests in the Unrestricted
Global Warrant. A beneficial interest in any Restricted Global Warrant
may be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Warrant or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Warrant if the exchange or transfer complies with
the requirements of Section 3.5(b)(ii) above and:
(A) such transfer is effected pursuant to the
Registration Statement in accordance with the Warrant
Registration Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Warrant proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Warrant, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a)
thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Warrant proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global
Warrant, a certificate from such holder in the form
of Exhibit B hereto, including the certifications in
item (3) thereof;
and, in each such case (other than a transfer pursuant to Rule 144) set
forth in this subparagraph (B), if the Warrant Registrar so requests or
if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Warrant Registrar to
<PAGE>
9
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B)
above at a time when an Unrestricted Global Warrant has not yet been
issued, the Company shall issue and, upon receipt of an Warrant
Countersignature Order in accordance with Section 3.2 hereof, the
Warrant Agent shall countersign one or more Unrestricted Global
Warrants in the number equal to the number of beneficial interests
transferred pursuant to subparagraph (B) above.
(c) Transfer and Exchange of Beneficial Interests for
Definitive Warrants.
(i) Beneficial Interests in Restricted Global Warrants to
Restricted Definitive Warrants. If any holder of a beneficial interest
in a Restricted Global Warrant proposes to exchange such beneficial
interest for a Restricted Definitive Warrant or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Restricted Definitive Warrant, then, upon receipt by the Warrant
Registrar of the following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Warrant proposes to exchange such beneficial
interest for a Restricted Definitive Warrant, a certificate
from such holder in the form of Exhibit C hereto, including
the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A under the Securities
Act, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraph (B) above, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of
Counsel required by item (2) thereof, if applicable; or
(D) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (2)(b) thereof,
the Warrant Agent shall cause, in accordance with the standing
instructions and procedures existing between the Depositary and the
Warrant Agent, the number of Warrants represented by the Global Warrant
to be reduced by the number of Warrants to be represented by the
Definitive Warrant pursuant to Section 3.5(h) hereof, and the
<PAGE>
10
Company shall execute and the Warrant Agent shall countersign and
deliver to the Person designated in the instructions a Definitive
Warrant in the appropriate amount. Any Definitive Warrant issued in
exchange for a beneficial interest in a Restricted Global Warrant
pursuant to this Section 3.5(c) shall be registered in such name or
names as the holder of such beneficial interest shall instruct the
Warrant Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Warrant Agent shall deliver
such Definitive Warrants to the Persons in whose names such Warrants
are so registered. Any Definitive Warrant issued in exchange for a
beneficial interest in a Restricted Global Warrant pursuant to this
Section 3.5(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Warrants to
Unrestricted Definitive Warrants. A holder of a beneficial interest in
a Restricted Global Warrant may exchange such beneficial interest for
an Unrestricted Definitive Warrant or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Warrant only if:
(A) such transfer is effected pursuant to the
Registration Statement in accordance with the Warrant
Registration Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the holder of such beneficial
interest in a Restricted Global Warrant proposes to
exchange such beneficial interest for a Definitive
Warrant that does not bear the Private Placement
Legend, a certificate from such holder in the form of
Exhibit C hereto, including the certifications in
item (1)(b) thereof; or
(2) if the holder of such beneficial
interest in a Restricted Global Warrant proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Warrant that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (3) thereof;
and, in each such case (other than a transfer pursuant to Rule
144) set forth in this subparagraph (B), if the Warrant
Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Warrant Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
<PAGE>
11
(iii) Beneficial Interests in Unrestricted Global Warrants to
Unrestricted Definitive Warrants. If any holder of a beneficial
interest in an Unrestricted Global Warrant proposes to exchange such
beneficial interest for a Definitive Warrant or to transfer such
beneficial interest to a Person who takes delivery thereof in the form
of a Definitive Warrant, then, upon satisfaction of the conditions set
forth in Section 3.5(b)(ii) hereof, the Warrant Agent shall cause the
amount of the applicable Global Warrant to be reduced accordingly
pursuant to Section 3.5(h) hereof, and the Company shall execute and
the Warrant Agent shall countersign and deliver to the Person
designated in the instructions a Definitive Warrant in the appropriate
principal amount. Any Definitive Warrant issued in exchange for a
beneficial interest pursuant to this Section 3.5(c)(iii) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct
the Warrant Registrar through instructions from the Depositary and the
Participant or Indirect Participant. The Warrant Agent shall deliver
such Definitive Warrants to the Persons in whose names such Warrants
are so registered. Any Definitive Warrant issued in exchange for a
beneficial interest pursuant to this Section 3.5(c)(iii) shall not bear
the Private Placement Legend.
(d) Transfer and Exchange of Definitive Warrants for
Beneficial Interests.
(i) Restricted Definitive Warrants to Beneficial Interests in
Restricted Global Warrants. If any Holder of a Restricted Definitive
Warrant proposes to exchange such Warrant for a beneficial interest in
a Restricted Global Warrant or to transfer such Restricted Definitive
Warrants to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Warrant, then, upon receipt
by the Warrant Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive
Warrant proposes to exchange such Warrant for a beneficial
interest in a Restricted Global Warrant, a certificate from
such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Warrant is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (1)
thereof; or
(C) if such Restricted Definitive Warrant is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2)(b) thereof, the
Warrant Agent shall cancel the Restricted Definitive Warrant
and increase or cause to be increased the amount of the
appropriate Restricted Global Warrant.
(ii) Restricted Definitive Warrants to Beneficial Interests in
Unrestricted Global Warrants. A Holder of a Restricted Definitive
Warrant may exchange such
<PAGE>
12
Warrant for a beneficial interest in an Unrestricted Global Warrant or
transfer such Restricted Definitive Warrant to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Warrant only if:
(A) such transfer is effected pursuant to the
Registration Statement in accordance with the Registration
Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the Holder of such Definitive
Warrants proposes to exchange such Warrants for a
beneficial interest in the Unrestricted Global
Warrant, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in
item (1)(c) thereof; or
(2) if the Holder of such Definitive
Warrants proposes to transfer such Warrants to a
Person who shall take delivery thereof in the form of
a beneficial interest in the Unrestricted Global
Warrant, a certificate from such Holder in the form
of Exhibit B hereto, including the certifications in
item (3) thereof;
and, in each such case (other than a transfer pursuant to Rule
144) set forth in this subparagraph (C), if the Warrant
Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Warrant Registrar to the effect that such exchange or
transfer is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 3.5(d)(ii), the Warrant Agent shall cancel the Definitive
Warrants and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Warrant.
(iii) Unrestricted Definitive Warrants to Beneficial Interests
in Unrestricted Global Warrants. A Holder of an Unrestricted Definitive
Warrant may exchange such Warrant for a beneficial interest in an
Unrestricted Global Warrant or transfer such Definitive Warrants to a
Person who takes delivery thereof in the form of a beneficial interest
in an Unrestricted Global Warrant at any time. Upon receipt of a
request for such an exchange or transfer, the Warrant Agent shall
cancel the applicable Unrestricted Definitive Warrant and increase or
cause to be increased the amount of one of the Unrestricted Global
Warrants.
If any such exchange or transfer from a Definitive Warrant to a
beneficial interest is effected pursuant to subparagraphs (ii)(B) or
(iii) above at a time when an Unrestricted
<PAGE>
13
Global Warrant has not yet been issued, the Company shall issue and,
upon receipt of an Warrant Countersignature Order in accordance with
Section 3.2 hereof, the Warrant Agent shall countersign one or more
Unrestricted Global Warrants in the number equal to the number of
beneficial interests of Definitive Warrants so transferred.
(e) Transfer and Exchange of Definitive Warrants for
Definitive Warrants.
Upon request by a Holder of Definitive Warrants and such
Holder's compliance with the provisions of this Section 3.5(e), the Warrant
Registrar shall register the transfer or exchange of Definitive Warrants. Prior
to such registration of transfer or exchange, the requesting Holder shall
present or surrender to the Warrant Registrar the Definitive Warrants duly
endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Warrant Registrar duly executed by such Holder or by its
attorney, duly authorized in writing. In addition, the requesting Holder shall
provide any additional certifications, documents and information, as applicable,
required pursuant to the following provisions of this Section 3.5(e).
(i) Restricted Definitive Warrants to Restricted Definitive
Warrants. Any Restricted Definitive Warrant may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Warrant if the Warrant Registrar receives
the following:
(A) if the transfer will be made pursuant to Rule
144A under the Securities Act, then the transferor must
deliver a certificate in the form of Exhibit B hereto,
including the certifications in item (1) thereof;
(B) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (2)
thereof, if applicable.
(ii) Restricted Definitive Warrants to Unrestricted Definitive
Warrants. Any Restricted Definitive Warrant may be exchanged by the
Holder thereof for an Unrestricted Definitive Warrant or transferred to
a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Warrant if:
(A) any such transfer is effected pursuant to the
Registration Statement in accordance with the Warrant
Registration Rights Agreement; or
(B) the Warrant Registrar receives the following:
(1) if the Holder of such Restricted
Definitive Warrants proposes to exchange such
Warrants for an Unrestricted Definitive
<PAGE>
14
Warrant, a certificate from such Holder in the form
of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or
(2) if the Holder of such Restricted
Definitive Warrants proposes to transfer such
Warrants to a Person who shall take delivery thereof
in the form of an Unrestricted Definitive Warrant, a
certificate from such Holder in the form of Exhibit B
hereto, including the certifications in item (3)
thereof;
and, in each such case (other than a transfer pursuant to Rule
144) set forth in this subparagraph (C), if the Warrant
Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Warrants to Unrestricted
Definitive Warrants. A Holder of Unrestricted Definitive Warrants may
transfer such Warrants to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Warrant. Upon receipt of a request
to register such a transfer, the Warrant Registrar shall register the
Unrestricted Definitive Warrants pursuant to the instructions from the
Holder thereof.
(f) Registration Statement.
Upon the effectiveness of the Registration Statement and sales
of Warrants in connection therewith in accordance with the Warrant Registration
Rights Agreement, the Company shall issue and, upon receipt of a Warrant
Countersignature Order in accordance with Section 3.2, the Warrant Agent shall
countersign (i) one or more Unrestricted Global Warrants in an amount equal to
the amount of the beneficial interests in the Restricted Global Warrants sold
under such Registration Statement and (ii) Definitive Warrants in an amount
equal to the amount of the beneficial interests of the Restricted Definitive
Warrants sold under such Registration Statement. Concurrently with the issuance
of such Warrants, the Warrant Agent shall cause the amount of the applicable
Restricted Global Warrants to be reduced accordingly, and the Company shall
execute and the Warrant Agent shall countersign and deliver to the Persons
designated by the Holders of Definitive Warrants so accepted Definitive Warrants
in the appropriate amount.
(g) Legends.
The following legends shall appear on the face of all Global
Warrants and Definitive Warrants issued under this Warrant Agreement unless
specifically stated otherwise in the applicable provisions of this Warrant
Agreement.
(i) Private Placement Legend.
<PAGE>
15
(A) Except as permitted by subparagraph (B) below,
each Global Warrant and each Definitive Warrant (and all
Warrants issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
"THIS WARRANT (OR ITS PREDECESSOR) AND THE WARRANT
SHARES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB") OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),(2), (3)
OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE
TRANSFER THIS WARRANT OR THE WARRANT SHARES EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) TO
AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE WARRANT
AGENT A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM
OF WHICH CAN BE OBTAINED FROM THE WARRANT AGENT) AND AN
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (E) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
<PAGE>
16
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO
WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING
THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING.
(B) Notwithstanding the foregoing, any Global Warrant
or Definitive Warrant issued pursuant to subparagraphs
(b)(iv), (c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii),
(e)(iii) or (f) to this Section 3.5 (and all Warrants issued
in exchange therefor or substitution thereof) shall not bear
the Private Placement Legend.
(C) Any Warrant Shares issued pursuant to an exercise
of Warrants bearing a Private Placement Legend shall, unless
such exercise is pursuant to a Registration Statement or
unless the Company determines that the Holder thereof is
otherwise entitled to have the Private Placement Legend
removed, bear a Private Placement Legend.
(ii) Global Warrant Legend. Each Global Warrant shall bear a
legend in substantially the following form:
"THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS
DEFINED IN THE WARRANT AGREEMENT GOVERNING THIS WARRANT) OR
ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.5 OF
THE WARRANT AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 3.5(A)
OF THE WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT MAY BE
DELIVERED TO THE WARRANT AGENT FOR CANCELLATION PURSUANT TO
SECTION 3.8 OF THE WARRANT AGREEMENT AND (IV) THIS GLOBAL
WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE
PRIOR WRITTEN CONSENT OF THE COMPANY."
(iii) Unit Legend. Each Warrant issued prior to the Separation
Date shall bear a legend in substantially the following form:
"THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE
INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS (THE
"UNITS"),
<PAGE>
17
EACH OF WHICH CONSIST OF $1,000 PRINCIPAL AMOUNT OF THE 12%
SENIOR SUBORDINATED NOTES DUE 2007 OF INSILCO CORPORATION.
(THE "NOTES") AND ONE WARRANT (THE "WARRANTS") INITIALLY
ENTITLING THE HOLDER THEREOF TO PURCHASE 0.52 OF A SHARE, PAR
VALUE $0.001 PER SHARE, OF INSILCO HOLDING CO. COMMON STOCK.
PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER
THE CLOSING OF THE OFFERING OF THE UNITS, (II) THE DATE ON
WHICH A REGISTRATION STATEMENT WITH RESPECT TO A REGISTERED
EXCHANGE OFFER FOR THE NOTES IS DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (III) THE DATE A SHELF REGISTRATION STATEMENT
WITH RESPECT TO THE NOTES IS DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (IV) SUCH DATE AS DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION IN ITS SOLE DISCRETION SHALL DETERMINE
AND (V) THE OCCURRENCE OF A CHANGE OF CONTROL (AS DEFINED IN
THE INDENTURE GOVERNING THE NOTES), THE WARRANTS EVIDENCED BY
THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED
SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY
TOGETHER WITH, THE NOTES.
(h) Cancellation and/or Adjustment of Global Warrants.
At such time as all beneficial interests in a particular
Global Warrant have been exercised or exchanged for Definitive Warrants or a
particular Global Warrant has been exercised, redeemed, repurchased or canceled
in whole and not in part, each such Global Warrant shall be returned to or
retained and canceled by the Warrant Agent in accordance with Section 3.8
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Warrant is exercised or exchanged for or transferred to a Person who will
take delivery thereof in the form of a beneficial interest in another Global
Warrant or for Definitive Warrants, the amount of Warrants represented by such
Global Warrant shall be reduced accordingly and an endorsement shall be made on
such Global Warrant by the Warrant Agent or by the Depositary at the direction
of the Warrant Agent to reflect such reduction; and if the beneficial interest
is being exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Warrant, such other
Global Warrant shall be increased accordingly and an endorsement shall be made
on such Global Warrant by the Warrant Agent or by the Depositary at the
direction of the Warrant Agent to reflect such increase.
<PAGE>
18
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Warrant Agent shall countersign Global
Warrants and Definitive Warrants upon the Company's order or at the
Warrant Registrar's request.
(ii) No service charge shall be made to a holder of a
beneficial interest in a Global Warrant or to a holder of a Definitive
Warrant for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith .
(iii) All Global Warrants and Definitive Warrants issued upon
any registration of transfer or exchange of Global Warrants or
Definitive Warrants shall be the duly authorized, executed and issued
warrants for Common Stock of the Company, not subject to any preemptive
rights, and entitled to the same benefits under this Warrant Agreement,
as the Global Warrants or Definitive Warrants surrendered upon such
registration of transfer or exchange.
(iv) Prior to due presentment for the registration of a
transfer of any Warrant, the Warrant Agent, and the Company may deem
and treat the Person in whose name any Warrant is registered as the
absolute owner of such Warrant for all purposes and none of the Warrant
Agent, or the Company shall be affected by notice to the contrary.
(v) The Warrant Agent shall countersign Global Warrants and
Definitive Warrants in accordance with the provisions of Section 3.2
hereof.
(j) Facsimile Submissions to Warrant Agent.
All certifications, certificates and Opinions of Counsel
required to be submitted to the Warrant Registrar pursuant to this Section 3.5
to effect a registration of transfer or exchange may be submitted by facsimile.
All references to Exhibits B and C herein shall include any other form of
certificate containing comparable certifications approved by the Company).
Notwithstanding anything herein to the contrary, as to any
certificates and/or certifications delivered to the Warrant Registrar pursuant
to this Section 3.5, the Warrant Registrar's duties shall be limited to
confirming that any such certifications and certificates delivered to it are
substantially in the form of Exhibits B and C attached hereto. The Warrant
Registrar shall not be responsible for confirming the truth or accuracy of
representations made in any such certifications or certificates. As to any
Opinions of Counsel delivered pursuant to this Section 3.5, the Warrant
Registrar may rely upon, and be fully protected in relying upon, such opinions.
<PAGE>
19
3.6. Replacement Warrants.
If any mutilated Warrant is surrendered to the Warrant Agent
or the Company and the Warrant Agent receives evidence to its satisfaction of
the destruction, loss or theft of any Warrant, the Company shall issue and the
Warrant Agent, upon receipt of a Warrant Countersignature Order, shall
countersign a replacement Warrant if the Warrant Agent's requirements are met.
If required by the Warrant Agent or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Warrant Agent
and the Company to protect the Company, the Warrant Agent, any Agent and any
agent for purposes of the countersignature from any loss that any of them may
suffer if a Warrant is replaced. The Company may charge for its expenses in
replacing a Warrant.
Every replacement Warrant is an additional warrant of the
Company and shall be entitled to all of the benefits of this Warrant Agreement
equally and proportionately with all other Warrants duly issued hereunder.
3.7. Temporary Warrants.
Until certificates representing Warrants are ready for
delivery, the Company may prepare and the Warrant Agent, upon receipt of a
Warrant Countersignature Order, shall issue temporary Warrants. Temporary
Warrants shall be substantially in the form of certificated Warrants but may
have variations that the Company considers appropriate for temporary Warrants
and as shall be reasonably acceptable to the Warrant Agent. Without unreasonable
delay, the Company shall prepare and the Warrant Agent shall countersign
definitive Warrants in exchange for temporary Warrants.
Holders of temporary Warrants shall be entitled to all of the
benefits of this Warrant Agreement.
3.8. Cancellation.
Subject to Section 3.5(h) hereof, the Company at any time may
deliver Warrants to the Warrant Agent for cancellation. The Warrant Registrar
and Warrant Paying Agent shall forward to the Warrant Agent any Warrants
surrendered to them for registration of transfer, exchange or exercise. The
Warrant Agent and no one else shall cancel all Warrants surrendered for
registration of transfer, exchange, exercise, replacement or cancellation and
shall destroy canceled Warrants (subject to the record retention requirement of
the Exchange Act). Certification of the destruction of all canceled Warrants
shall be delivered to the Company. The Company may not issue new Warrants to
replace Warrants that have been exercised or that have been delivered to the
Warrant Agent for cancellation.
<PAGE>
20
SECTION 4. SEPARATION OF WARRANTS; TERMS OF WARRANTS; EXERCISE
OF WARRANTS.
(a) The Notes and Warrants will not be separately transferable
until the Separation Date. Subject to the terms of this Agreement, each Warrant
holder shall have the right, which may be exercised during the period commencing
at the opening of business on the Separation Date and until 5:00 p.m., New York
City time on August 15, 2007 (the "Exercise Period"), to receive from the
Company the number of fully paid and nonassessable Warrant Shares which the
holder may at the time be entitled to receive on exercise of such Warrants and
payment of the exercise price (the "Exercise Price") as set forth below in cash,
by wire transfer or by certified or official check payable to the order of the
Company, in each case, equal to the Exercise Price then in effect for such
Warrant Shares; provided that holders shall be able to exercise their Warrants
only if a registration statement relating to the such exercise is then in
effect, or the exercise of such Warrants is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act")
and such holder delivers to the Company such notices as the Company shall
reasonably request in connection therewith, and such securities are qualified
for sale or exempt from qualification under the applicable securities laws of
the states in which the various holders of the Warrants or other persons to whom
it is proposed that the Warrant Shares be issued on exercise of the Warrants
reside. Each holder may exercise its right, during the Exercise Period, to
receive Warrant Shares on a net basis, such that, without the exchange of any
funds, the holder will receive such number of Warrant Shares equal to the
product of (A) the number of Warrant Shares for which such Warrant is
exercisable as of the date of exercise (if the Exercise Price were being paid in
cash) and (B) the Cashless Exercise Ratio. The Cashless Exercise Ratio shall
equal a fraction the numerator of which is the Market Value (as defined below)
per share of Common Stock minus the Exercise Price per share as of the date of
exercise and the denominator of which is the Market Value per share on the date
of exercise. Each Warrant not exercised prior to 5:00 p.m., New York City time,
on August 15, 2007 (the "Expiration Date") shall become void and all rights
thereunder and all rights in respect thereof under this agreement shall cease as
of such time. No adjustments as to dividends will be made upon exercise of the
Warrants.
The "Market Value" per share of Common Stock as of any date
shall equal (i) if Common Stock is primarily traded on a securities exchange,
the last sale price on such securities exchange on the trading day immediately
prior to the date of determination, or if no sales occurred on such day, the
mean between the closing "bid" and "asked" prices on such day, (ii) if the
principal market for Common Stock is in the over-the-counter market, the closing
sale price on the trading day immediately prior to the date of the
determination, as published by the National Association of Securities Dealers
Automated Quotation System or similar organization, or if such price is not so
published on such day, the mean between the closing "bid" and "asked" prices, if
available, on such day, which prices may be obtained from any reputable pricing
service, broker or dealer, and (iii) if neither clause (i) nor clause (ii) is
applicable, the fair market value on the date of determination of Common Stock
as determined in good faith by the Board of Directors of the Company.
<PAGE>
21
(b) In order to exercise all or any of the Warrants
represented by a Warrant Certificate, the holder thereof must deliver to the
Warrant Agent at its corporate trust office set forth in Section 15 hereof the
Warrant Certificate and the form of election to purchase on the reverse thereof
duly filled in and signed, which signature shall be medallion guaranteed by an
institution which is a member of a Securities Transfer Association recognized
signature guarantee program, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price, which is set forth in the form of
Warrant Certificate attached hereto as Exhibit A, as adjusted as herein
provided, for the number of Warrant Shares in respect of which such Warrants are
then exercised. Payment of the aggregate Exercise Price shall be made (i) in
cash, by wire transfer or by certified or official bank check payable to the
order of the Company or (ii) on a net basis in the manner provided in Section
4(a) hereof.
(c) Subject to the provisions of Section 5 hereof, upon
compliance with clause (b) above, the Warrant Agent shall deliver or cause to be
delivered with all reasonable dispatch, to or upon the written order of the
holder and in such name or names as the Warrant holder may designate, a
certificate or certificates for the number of whole Warrant Shares issuable upon
the exercise of such Warrants or other securities or property to which such
holder is entitled hereunder, together with cash as provided in Section 9
hereof; provided that if any consolidation, merger or lease or sale of assets is
proposed to be effected by the Company as described in Section 8(m) hereof, or a
tender offer or an exchange offer for shares of Common Stock shall be made, upon
such surrender of Warrants and payment of the Exercise Price as aforesaid, the
Warrant Agent shall, as soon as possible, but in any event not later than two
business days thereafter, deliver or cause to be delivered the full number of
Warrant Shares issuable upon the exercise of such Warrants in the manner
described in this sentence or other securities or property to which such holder
is entitled hereunder, together with cash as provided in Section 9 hereof. Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrants
and payment of the Exercise Price.
(d) The Warrants shall be exercisable, at the election of the
holders thereof, either in full or from time to time in part. If less than all
the Warrants represented by a Warrant Certificate are exercised, such Warrant
Certificate shall be surrendered and a new Warrant Certificate of the same tenor
and for the number of Warrants which were not exercised shall be executed by the
Company and delivered to the Warrant Agent and the Warrant Agent shall
countersign the new Warrant Certificate, registered in such name or names as may
be directed in writing by the holder, and shall deliver the new Warrant
Certificate to the Person or Persons entitled to receive the same.
(e) All Warrant Certificates surrendered upon exercise of
Warrants shall be cancelled by the Warrant Agent. Such cancelled Warrant
Certificates shall then be disposed of by the Warrant Agent in a manner
satisfactory to the Company. The Warrant Agent shall account promptly to the
Company with respect to Warrants exercised and concurrently pay to the
<PAGE>
22
Company all monies received by the Warrant Agent for the purchase of the Warrant
Shares through the exercise of such Warrants.
(f) The Warrant Agent shall keep copies of this Agreement and
any notices given or received hereunder available for inspection by the holders
during normal business hours at its office. The Company shall supply the Warrant
Agent from time to time with such numbers of copies of this Agreement as the
Warrant Agent may request.
SECTION 5. PAYMENT OF TAXES.
The Company will pay all documentary stamp taxes attributable
to the initial issuance of Warrant Shares upon the exercise of Warrants;
provided that the Company shall not be required to pay any tax or taxes which
may be payable in respect of any transfer involved in the issue of any Warrant
Certificates or any certificates for Warrant Shares in a name other than that of
the registered holder of a Warrant Certificate surrendered upon the exercise of
a Warrant, and the Company shall not be required to issue or deliver such
Warrant Certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 6. RESERVATION OF WARRANT SHARES.
(a) The Company will at all times reserve and keep available,
free from preemptive rights, out of the aggregate of its authorized but unissued
Common Stock or its authorized and issued Common Stock held in its treasury, for
the purpose of enabling it to satisfy any obligation to issue Warrant Shares
upon exercise of Warrants, the maximum number of shares of Common Stock which
may then be deliverable upon the exercise of all outstanding Warrants.
(b) The Company or, if appointed, the transfer agent for the
Common Stock (the "Transfer Agent") and every subsequent transfer agent for any
shares of the Company's capital stock issuable upon the exercise of any of the
rights of purchase aforesaid will be irrevocably authorized and directed at all
times to reserve such number of authorized shares as shall be required for such
purpose. The Company will keep a copy of this Agreement on file with the
Transfer Agent and with every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock certificates
required to honor outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement. The Company will supply such Transfer Agent with
duly executed certificates for such purposes and will provide or otherwise make
available any cash which may be payable as provided in Section 9 hereof. The
Company will furnish such Transfer Agent a copy of all notices of adjustments,
and certificates related thereto, transmitted to each holder pursuant to Section
11 hereof.
<PAGE>
23
(c) Before taking any action which would cause an adjustment
pursuant to Section 8 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take any corporate action
which may, in the opinion of its counsel (which may be counsel employed by the
Company), be necessary in order that the Company may validly and legally issue
fully paid and nonassessable Warrant Shares at the Exercise Price as so
adjusted.
(d) The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will, upon issue, be fully paid, nonassessable,
free of preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.
SECTION 7. OBTAINING STOCK EXCHANGE LISTINGS.
The Company will from time to time take all action which may
be necessary so that the Warrant Shares, immediately upon their issuance upon
the exercise of Warrants, will be listed on the principal securities exchanges,
automated quotation systems or other markets within the United States of
America, if any, on which other shares of Common Stock are then listed, if any.
SECTION 8. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF
WARRANT SHARES ISSUABLE.
The Exercise Price and the number of Warrant Shares issuable
upon the exercise of each Warrant are subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 8. For purposes of
this Section 8, "Common Stock" means shares now or hereafter authorized of any
class of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.
(a) Adjustment for Change in Capital Stock.
If the Company (i) pays a dividend or makes a distribution on
its Common Stock in shares of its Common Stock, (ii) subdivides its outstanding
shares of Common Stock into a greater number of shares, (iii) combines its
outstanding shares of Common Stock into a smaller number of shares, (iv) makes a
distribution on its Common Stock in shares of its capital stock other than
Common Stock or (v) issues by reclassification of its Common Stock any shares of
its capital stock, then the Exercise Price in effect immediately prior to such
action shall be proportionately adjusted so that the holder of any Warrant
thereafter exercised may receive the aggregate number and kind of shares of
capital stock of the Company which he would have owned immediately following
such action if such Warrant had been exercised immediately prior to such action.
<PAGE>
24
The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, after an adjustment, a holder of a Warrant upon exercise of it may receive
shares of two or more classes of capital stock of the Company, the Company shall
determine, in good faith, the allocation of the adjusted Exercise Price between
the classes of capital stock. After such allocation, the exercise privilege and
the Exercise Price of each class of capital stock shall thereafter be subject to
adjustment on terms comparable to those applicable to Common Stock in this
Section 8. Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to
all holders of its Common Stock entitling them for a period expiring within 45
days after the record date mentioned below to purchase shares of Common Stock at
a price per share less than the Fair Value (as defined herein) per share on that
record date, the Exercise Price shall be adjusted in accordance with the
formula:
O + N x P
-----
E' = E x M
----------------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock to be issued
pursuant to
such rights, options or warrants.
P = the price per share of the additional shares.
M = the Fair Value per share of Common Stock on the record date.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
<PAGE>
25
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock
any of its assets or debt securities or any rights or warrants to purchase debt
securities, assets or other securities of the Company, the Exercise Price shall
be adjusted in accordance with the formula:
M - F
E' = E x ---------------
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the Fair Value per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the
assets, securities, rights or warrants to be
distributed in respect of one share of Common Stock
as determined in good faith by the Board of Directors
of the Company (the "Board of Directors").
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This Section 8(c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as shown on
the books of the Company prepared in accordance with generally accepted
accounting principles. Also, this Section 8(c) does not apply to rights, options
or warrants referred to in Section 8(b) hereof.
(d) Adjustment for Common Stock Issue.
If the Company issues shares of Common Stock for a
consideration per share less than the Fair Value per share on the date the
Company fixes the offering price of such additional shares, the Exercise Price
shall be adjusted in accordance with the formula:
P
----
E' = E x O + M
-----------
A
where:
<PAGE>
26
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such additional shares.
P = the aggregate consideration received for the
issuance of such additional shares.
M = the Fair Value per share on the date of issuance of such
additional shares.
A = the number of shares outstanding immediately after the issuance
of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in
subsections (a), (b) and (c) of this Section 8,
(2) the exercise of Warrants or any other rights,
options or warrants to purchase Common Stock outstanding on the date
hereof, or the conversion or exchange of other securities convertible
or exchangeable for Common Stock the issuance of which caused an
adjustment to be made under Section 8(e),
(3) Common Stock issued to the Company's employees
(or employees of its subsidiaries) under bona fide employee benefit
plans adopted by the Board of Directors and approved by the holders of
Common Stock when required by law, if such Common Stock would otherwise
be covered by this subsection (d) (but only to the extent that the
aggregate number of shares excluded hereby and issued after the date of
this Warrant Agreement shall not exceed 5% of the Common Stock
outstanding at the time of the adoption of each such plan, exclusive of
anti-dilution adjustments thereunder),
(4) Common Stock issued to shareholders of any person
which merges into the Company, or with a subsidiary of the Company, in
proportion to their stock holdings of such person immediately prior to
such merger, upon such merger, provided that if such person is an
Affiliate of the Company, the Board of Directors shall have obtained a
fairness opinion from a nationally recognized investment banking,
appraisal or valuation firm, which is not an Affiliate of the Company,
stating that the consideration received in such merger is fair to the
Company from a financial point of view, or
(5) the issuance of shares of Common Stock pursuant
to rights, options or warrants which were originally issued in a
Non-Affiliate Sale (as defined below) together with one or more other
securities as part of a unit at a price per unit.
<PAGE>
27
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (b) and (c) of this Section 8) for a consideration per
share of Common Stock initially deliverable upon conversion or exchange of such
securities less than the Fair Value per share on the date of issuance of such
securities, the Exercise Price shall be adjusted in accordance with this
formula:
P
-----
O + M
E' = E x ----------------
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the Fair Value per share on the date of issuance of
such securities.
D = the maximum number of shares deliverable upon conversion or in
exchange for such securities at the initial conversion or
exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after
such issuance.
If all of the Common Stock deliverable upon conversion or
exchange of such securities have not been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such securities.
This subsection (e) does not apply to convertible securities
issued to shareholders of any person which merges into the Company, or with a
subsidiary of the Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger, provided that if such person
is an Affiliate of the Company, the Board of Directors shall have obtained a
fairness opinion from a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, stating that the
consideration received in such merger is fair to the Company from a financial
point of view.
<PAGE>
28
(f) Consideration Received.
For purposes of any computation respecting consideration
received pursuant to subsections (d), and (e) of this Section 8, the following
shall apply:
(1) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the Company for
any underwriting of the issue or otherwise in connection therewith;
(2) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of Directors
(irrespective of the accounting treatment thereof), whose determination
shall be conclusive, and described in a Board resolution which shall be
filed with the Warrant Agent;
(3) in the case of the issuance of securities
convertible into or exchangeable for shares, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such securities plus the
additional minimum consideration, if any, to be received by the Company
upon the conversion or exchange thereof (the consideration in each case
to be determined in the same manner as provided in clauses (1) and (2)
of this subsection); and
(4) in the case of the issuance of shares of Common
Stock pursuant to rights, options or warrants which rights, options or
warrants were originally issued together with one or more other
securities as part of a unit at a price per unit, the consideration
shall be deemed to be the fair value of such rights, options or
warrants at the time of issuance thereof as determined in good faith by
the Board of Directors whose determination shall be conclusive and
described in a Board resolution which shall be filed with the Warrant
Agent plus the additional minimum consideration, if any, to be received
by the Company upon the exercise, conversion or exchange thereof (as
determined in the same manner as provided in clauses (1) and (2) of
this subsection).
<PAGE>
29
(g) Fair Value.
In Sections 8(d) and (e) hereof, the "Fair Value" per security
at any date of determination shall be (1) in connection with a sale by the
Company to a party that is not an Affiliate of the Company in an arm's-length
transaction (a "Non-Affiliate Sale"), the price per security at which such
security is sold and (2) in connection with any sale by the Company to an
Affiliate of the Company, (a) the last price per security at which such security
was sold in a Non-Affiliate Sale within the three-month period preceding such
date of determination or (b) if clause (a) is not applicable, the fair market
value of such security determined in good faith by (i) a majority of the Board
of Directors, including a majority of the Disinterested Directors, and approved
in a Board resolution delivered to the Warrant Agent or (ii) a nationally
recognized investment banking, appraisal or valuation firm, which is not an
Affiliate of the Company, in each case, taking into account, among all other
factors deemed relevant by the Board of Directors or such investment banking,
appraisal or valuation firm, the trading price and volume of such security on
any national securities exchange or automated quotation system on which such
security is traded. Notwithstanding the foregoing, any sale to Donaldson, Lufkin
& Jenrette Securities Corporation (or any successor thereto) pursuant to an
underwritten public offering registered under the Securities Act shall be deemed
to be and treated as a Non-Affiliate Sale.
In Sections 8(b) and (c) hereof, the "Fair Value" per security
at any date of determination shall be (a) the last price per security at which
such security was sold by the Company in a Non-Affiliate Sale within the
three-month period preceding such date of determination or (b) if clause (a) is
not applicable, the fair market value of such security determined in good faith
by (i) a majority of the Board of Directors, including a majority of the
Disinterested Directors, and approved in a Board resolution delivered to the
Warrant Agent or (ii) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account, among all other factors deemed relevant by the Board of Directors
or such investment banking, appraisal or valuation firm, the trading price and
volume of such security on any national securities exchange or automated
quotation system on which such security is traded.
For purposes of this Section 8(g), "Disinterested Director"
means, in connection with any issuance of securities that gives rise to a
determination of the Fair Value thereof, each member of the Board of Directors
who is not an officer, employee, director or other Affiliate of the party to
whom the Company is proposing to issue the securities giving rise to such
determination.
For purposes of this Section 8(g), "Affiliate" of any
specified Person means (A) any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person and (B) any director, officer or employee of such specified person. For
purposes of this definition "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control with") as used
with respect
<PAGE>
30
to any Person, shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
(h) When De Minimis Adjustment May Be Deferred.
No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price. Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 8
shall be made to the nearest cent or to the nearest 1/100th of a share, as the
case may be, it being understood that no such rounding shall be made under
subsection (p).
(i) When No Adjustment Required.
No adjustment need be made for a transaction referred to
Section 8(a), (b), (c), (d), (e) or (f) hereof, if Warrant holders are to
participate (without being required to exercise their Warrants) in the
transaction on a basis and with notice that the Board of Directors determines to
be fair and appropriate in light of the basis and notice on which holders of
Common Stock participate in the transaction. No adjustment need be made for (i)
rights to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest or (ii) a change in the par value or no par value of the
Common Stock. To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
(j) Notice of Adjustment.
Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 10 hereof.
(k) Notice of Certain Transactions.
If (i) the Company takes any action that would require an
adjustment in the Exercise Price pursuant to Section 8(a), (b), (c), (d), (e) or
(f) hereof and if the Company does not arrange for Warrant holders to
participate pursuant to Section 8(i) hereof, (ii) the Company takes any action
that would require a supplemental Warrant Agreement pursuant to Section 8(l)
hereof or (iii) there is a liquidation or dissolution of the Company, then the
Company shall mail to Warrant holders a notice stating the proposed record date
for a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 15 days
before such date. Failure to mail the notice or any defect in it shall not
affect the validity of the transaction.
<PAGE>
31
(l) Reorganization of Company.
Immediately after the date hereof, if the Company consolidates
or merges with or into, or transfers or leases all or substantially all its
assets to, any person, upon consummation of such transaction the Warrants shall
automatically become exercisable for the kind and amount of securities, cash or
other assets which the holder of a Warrant would have owned immediately after
the consolidation, merger, transfer or lease if the holder had exercised the
Warrant immediately before the effective date of the transaction. Concurrently
with the consummation of such transaction, the corporation formed by or
surviving any such consolidation or merger if other than the Company, or the
person to which such sale or conveyance shall have been made, shall enter into
(i) a supplemental Warrant Agreement so providing and further providing for
adjustments which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Section 8(l) and (ii) a supplement to the
Warrant Registration Rights Agreement providing for the assumption of the
Company's obligations thereunder. The successor Company shall mail to Warrant
holders a notice describing the supplemental Warrant Agreement and Warrant
Registration Rights Agreement. If the issuer of securities deliverable upon
exercise of Warrants under the supplemental Warrant Agreement is an affiliate of
the formed, surviving, transferee or lessee corporation, that issuer shall join
in the supplemental Warrant Agreement and Warrant Registration Rights Agreement.
If this Section 8(l) applies, Sections 8(a), (b), (c), (d), (e) and (f) hereof
do not apply.
(m) Company Determination Final.
Any determination that the Company or the Board of Directors
must make pursuant to Section 8(a), (c), (d), (e), (f), (g), (h) or (i) hereof
is conclusive.
(n) Warrant Agent's Disclaimer.
The Warrant Agent has no duty to determine when an adjustment
under this Section 8 should be made, how it should be made or what it should be.
The Warrant Agent has no duty to determine whether any provisions of a
supplemental Warrant Agreement under Section 8(l) hereof are correct. The
Warrant Agent makes no representation as to the validity or value of any
securities or assets issued upon exercise of Warrants. The Warrant Agent shall
not be responsible for the Company's failure to comply with this Section 8.
<PAGE>
32
(o) When Issuance or Payment May Be Deferred.
In any case in which this Section 8 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such record date
the Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
and (ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 10 hereof; provided that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional Warrant Shares, other capital stock and cash upon the
occurrence of the event requiring such adjustment.
(p) Adjustment in Number of Shares.
Upon each adjustment of the Exercise Price pursuant to this
Section 8, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment of
the adjusted Exercise Price that number of shares of Common Stock (calculated to
the nearest hundredth) obtained from the following formula:
N' = N x E
---
E'
where:
N' = the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number or Warrant Shares previously issuable
upon exercise of a Warrant by payment of the Exercise
Price prior to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(q) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the Warrants initially issuable
pursuant to this Agreement.
SECTION 9. FRACTIONAL INTERESTS.
<PAGE>
33
The Company shall not be required to issue fractional Warrant
Shares on the exercise of Warrants. If more than one Warrant shall be presented
for exercise in full at the same time by the same holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed on the basis of the aggregate number of Warrant Shares purchasable on
exercise of the Warrants so presented. If any fraction of a Warrant Share would,
except for the provisions of this Section 9, be issuable on the exercise of any
Warrants (or specified portion thereof), the Company shall pay an amount in cash
equal to the Fair Value per Warrant Share, as determined on the day immediately
preceding the date the Warrant is presented for exercise, multiplied by such
fraction, computed to the nearest whole U.S. cent.
SECTION 10. NOTICES TO WARRANT HOLDERS.
(a) Upon any adjustment of the Exercise Price pursuant to
Section 8 hereof, the Company shall promptly thereafter (i) cause to be filed
with the Warrant Agent a certificate of a firm of independent public accountants
of recognized standing selected by the Board of Directors of the Company (who
may be the regular auditors of the Company) setting forth the Exercise Price
after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are based and setting
forth the number of Warrant Shares (or portion thereof) issuable after such
adjustment in the Exercise Price, upon exercise of a Warrant and payment of the
adjusted Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, and (ii) cause to be given to each
of the registered holders of Warrants at the address appearing on the Warrant
register for each such registered holder written notice of such adjustments by
first-class mail, postage prepaid. Where appropriate, such notice may be given
in advance and included as a part of the notice required to be mailed under the
other provisions of this Section 10.
(b) In case:
(i) the Company shall authorize the issuance to all holders of
shares of Common Stock of rights, options or warrants to subscribe for
or purchase shares of Common Stock or of any other subscription rights
or warrants;
(ii) the Company shall authorize the distribution to all
holders of shares of Common Stock of evidences of its indebtedness or
assets (other than dividends or cash distributions paid out of
consolidated current or retained earnings as shown on the books of the
Company prepared in accordance with generally accepted accounting
principles or dividends payable in shares of Common Stock or
distributions referred to in Section 10(a) hereof);
(iii) of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company is
required, or of the conveyance or transfer of the properties and assets
of the Company substantially as an entirety, or of any reclassification
or change of Common Stock issuable upon exercise of the Warrants (other
<PAGE>
34
than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or
combination), or a tender offer or exchange offer for shares of Common
Stock;
(iv) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(v) the Company proposes to take any action (other than
actions of the character described in Section 8(a) hereof) which would
require an adjustment of the Exercise Price pursuant to Section 8
hereof;
then the Company shall cause to be filed with the Warrant Agent and shall cause
to be given to each of the registered holders of Warrants at his address
appearing on the Warrant register, at least 20 days (or 10 days in any case
specified in clauses (i) or (ii) above) prior to the applicable record date
hereinafter specified, or promptly in the case of events for which there is no
record date, by first-class mail, postage prepaid, a written notice stating (x)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are to be
determined, (y) the initial expiration date set forth in any tender offer or
exchange offer for shares of Common Stock, or (z) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock shall be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up. The failure to give the notice required
by this Section 11 or any defect therein shall not affect the legality or
validity of any distribution, right, option, warrant, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up, or the vote upon
any action.
(c) Nothing contained in this Agreement or in any of the
Warrant Certificates shall be construed as conferring upon the holders of
Warrants the right to vote or to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter, or any rights whatsoever as stockholders of the
Company.
SECTION 11. MERGER, CONSOLIDATION OR CHANGE OF NAME OF
WARRANT AGENT.
(a) Any corporation into which the Warrant Agent may be merged
or with which it may be consolidated, or any corporation resulting from any
merger or consolidation to which the Warrant Agent shall be a party, or any
corporation succeeding to the business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor warrant agent
under the provisions
<PAGE>
35
of Section 13 hereof. In case at the time such successor to the Warrant Agent
shall succeed to the agency created by this Agreement, and in case at that time
any of the Warrant Certificates shall have been countersigned but not delivered,
any such successor to the Warrant Agent may adopt the countersignature of the
original Warrant Agent; and in case at that time any of the Warrant Certificates
shall not have been countersigned, any successor to the Warrant Agent may
countersign such Warrant Certificates either in the name of the predecessor
Warrant Agent or in the name of the successor to the Warrant Agent; and in all
such cases such Warrant Certificates shall have the full force and effect
provided in the Warrant Certificates and in this Agreement.
(b) In case at any time the name of the Warrant Agent shall be
changed and at such time any of the Warrant Certificates shall have been
countersigned but not delivered, the Warrant Agent whose name has been changed
may adopt the countersignature under its prior name, and in case at that time
any of the Warrant Certificates shall not have been countersigned, the Warrant
Agent may countersign such Warrant Certificates either in its prior name or in
its changed name, and in all such cases such Warrant Certificates shall have the
full force and effect provided in the Warrant Certificates and in this
Agreement.
SECTION 12. WARRANT AGENT.
The Warrant Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Warrants, by their acceptance thereof,
shall be bound:
(a) The statements contained herein and in the Warrant
Certificates shall be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrant
Certificates except as herein otherwise provided.
(b) The Warrant Agent shall not be responsible for any failure
of the Company to comply with any of the covenants contained in this Agreement
or in the Warrant Certificates to be complied with by the Company.
(c) The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Company) and the Warrant Agent
shall incur no liability or responsibility to the Company or to any holder of
any Warrant Certificate in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
(d) The Warrant Agent shall incur no liability or
responsibility to the Company or to any holder of any Warrant Certificate for
any action taken in reliance on any Warrant Certificate, certificate of shares,
notice, resolution, waiver, consent, order, certificate, or other
<PAGE>
36
paper, document or instrument believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties.
(e) The Company agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the execution of
this Agreement, to reimburse the Warrant Agent for all expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for anything done or omitted by the Warrant Agent in the
execution of this Agreement except as a result of its negligence or bad faith.
(f) The Warrant Agent shall be under no obligation to
institute any action, suit or legal proceeding or to take any other action
likely to involve expense unless the Company or one or more registered holders
of Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this provision
shall not affect the power of the Warrant Agent to take such action as it may
consider proper, whether with or without any such security or indemnity. All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
shall be brought in its name as Warrant Agent and any recovery of judgment shall
be for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.
(g) The Warrant Agent, and any stockholder, director, officer
or employee of it, may buy, sell or deal in any of the Warrants or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Warrant Agent
under this Agreement. Nothing herein shall preclude the Warrant Agent from
acting in any other capacity for the Company or for any other legal entity.
(h) The Warrant Agent shall act hereunder solely as agent for
the Company, and its duties shall be determined solely by the provisions hereof.
The Warrant Agent shall not be liable for anything which it may do or refrain
from doing in connection with this Agreement except for its own negligence or
bad faith.
(i) The Warrant Agent shall not at any time be under any duty
or responsibility to any holder of any Warrant Certificate to make or cause to
be made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same. The Warrant Agent shall not
be accountable with respect to the validity or value or the kind or amount of
any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of
<PAGE>
37
any Warrant or with respect to whether any such Warrant Shares or other
securities will when issued be validly issued and fully paid and nonassessable,
and makes no representation with respect thereto.
SECTION 13. CHANGE OF WARRANT AGENT.
If the Warrant Agent shall become incapable of acting as
Warrant Agent, the Company shall appoint a successor to such Warrant Agent. If
the Company shall fail to make such appointment within a period of 30 days after
it has been notified in writing of such incapacity by the Warrant Agent or by
the registered holder of a Warrant Certificate, then the registered holder of
any Warrant may apply to any court of competent jurisdiction for the appointment
of a successor to the Warrant Agent. Pending appointment of a successor to such
Warrant Agent, either by the Company or by such a court, the duties of the
Warrant Agent shall be carried out by the Company. The holders of a majority of
the unexercised Warrants shall be entitled at any time to remove the Warrant
Agent and appoint a successor to such Warrant Agent. Such successor to the
Warrant Agent need not be approved by the Company or the former Warrant Agent.
After appointment the successor to the Warrant Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Warrant Agent without further act or deed; provided that the former
Warrant Agent shall deliver and transfer to the successor to the Warrant Agent
any property at the time held by it hereunder and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Failure to
give any notice provided for in this Section 13, however, or any defect therein,
shall not affect the legality or validity of the appointment of a successor to
the Warrant Agent.
SECTION 14. REPORTS.
(a) Whether or not required by the rules and regulations of
the Commission, so long as any Warrants or the Warrant Shares are outstanding,
the Company shall furnish to the Warrant Agent and the holders of Warrants or
Warrant Shares (i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, whether or not required by the rules
and regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability (unless the
Commission shall not accept such a filing) and make such information available
to securities analysts and prospective investors upon request.
(b) The Company shall provide the Warrant Agent with a
sufficient number of copies of all such reports that the Warrant Agent may be
required to deliver to the holders of the Warrants and the Warrant Shares under
this Section 14.
<PAGE>
38
SECTION 15. REGISTRATION.
.
Holders shall be able to exercise their Warrants only if a
registration statement relating to such exercise is then in effect, or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act, and such securities are qualified for sale or exempt from
qualification under the applicable securities laws of the states in which the
various holders of the Warrants or other persons to whom it is proposed that the
Warrant Shares be issued on exercise of the Warrants reside.
(a) The Company shall prepare and cause to be filed within 120
days of the issuance date of the Warrants with the Commission pursuant to Rule
415 under the Securities Act a shelf registration statement (the "Registration
Statement") on the appropriate form relating to the offer and sale by the
Company of the Warrant Shares to the holders of Warrants upon exercise of the
Warrants.
(b) The Company shall use its reasonable best efforts to cause
such Registration Statement to be declared effective by the Commission on or
before 150 days from the date of issuance of the Warrants.
(c) The Company shall use its reasonable best efforts to keep
the Registration Statement continuously effective under the Securities Act in
order to permit the prospectus included therein to be lawfully delivered by the
Company to the holders exercising the Warrants until the earlier of (i) two
years following the first date as of which no Warrants remain outstanding and
(ii) if all of the Warrants expire unexercised, the Expiration Date; provided
that, except as provided below with respect to any Black Out Period (as defined
herein), the Company shall be deemed not to have used its reasonable best
efforts to keep the Registration Statements effective during the requisite
period if it voluntarily takes any action that would result in it not being able
to offer and sell the Warrant Shares upon exercise of the Warrants during that
period, unless such action is required by applicable law. Notwithstanding the
foregoing, the Company shall not be required to amend or supplement the
Registration Statement, any related prospectus or any document incorporated
therein by reference, for a period (a "Black Out Period") not to exceed, for so
long as this Agreement is in effect, an aggregate of 60 days in any calendar
year, in the event that (i) an event occurs and is continuing as a result of
which the Registration Statements, any related prospectus or any document
incorporated therein by reference as then amended or supplemented would, in the
Company's good faith judgment, 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 (ii)(A) the Company determines in its good faith judgment that the
disclosure of such event at such time would have a material adverse effect on
the business, operations or prospects of the Company or (B) the disclosure
otherwise relates to a material business transaction which has not yet been
publicly disclosed; provided, further, that such Black Out Period shall be
extended for any period, not to exceed an aggregate of 30 days in any calendar
year, during which the Commission is reviewing any proposed amendment or
supplement to the Registration Statement,
<PAGE>
39
any related prospectus or any document incorporated therein by reference which
has been filed by the Company; and provided, further, that no Black Out Period
may be in effect during the three months prior to the Expiration Date.
(d) The Company shall cause the Registration Statement and the
related prospectus and any amendment or supplement thereto, as of the effective
date of the Registration Statement, amendment or supplement, (i) to comply in
all material respects with the applicable requirements of the Securities Act and
the rules and regulations of the Commission and (ii) not to contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(e) The Company shall give prompt written notice to the
holders of the Warrants, the Initial Purchaser and the Warrant Agent of (i) the
effectiveness of the Registration Statement or any post-effective amendment
thereto, (ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statements or the initiation or threatening of
any proceedings for that purpose, (iii) the receipt by the Company or its legal
counsel of any notification with respect to the suspension of the qualification
of the Warrant Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, (iv) the happening of any event
that requires the Company to make changes in the Registration Statements or the
prospectus in order to make the statements therein not misleading and (v) the
commencement and termination of any Black Out Period.
(f) The Company shall use its reasonable best efforts to
prevent the issuance or obtain the withdrawal of any order suspending the
effectiveness of the Registration Statements at the earliest possible time.
(g) Upon the occurrence of any event contemplated by Section
15(e)(iv) or (v) hereof (subject to the last sentence of Section 15(c) hereof)
the Company shall promptly prepare a post-effective amendment to the
Registration Statement or a supplement to the related prospectus or file any
other required document so that, as thereafter delivered to holders of the
Warrants, the prospectus will not contain an untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading and will
contain the current information required by the Securities Act.
(h) Not later than the effective date of the Registration
Statements, the Company will provide a CUSIP number for the Warrant Shares and
provide the Warrant Agent with printed certificates for the Warrant Shares in a
form eligible for deposit with the Depository Trust Company.
(i) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the
Registration Statement.
<PAGE>
40
(j) The Company shall register or qualify or cooperate with
the holders in connection with the registration or qualification of the Warrant
Shares for offer and sale by the Company upon exercise of the Warrants under the
securities or blue sky laws of such states of the United States as any holder
reasonably requests and do any and all other acts or things necessary or
advisable to enable such offer and sale in such jurisdictions; provided that the
Company shall not be required to (i) qualify to do business in any jurisdiction
in which 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 in which it
is not then so subject.
(k) The Company shall bear all expenses incurred by it in
connection with the performance of its obligations under this Section 15.
(l) The Company acknowledges and agrees that any remedy at law
for breach of any provision of this Section 15 will be inadequate and that, in
addition to any other remedies that the holder may have, the holders shall be
entitled to the remedy of specific performance to ensure the Company performs
its obligations under this Section 15. The election of any one or more remedies
by the holders hereunder shall not constitute a waiver of the right to pursue
other available remedies.
(m) No person is entitled to include any securities of the
Company held by such person in, or to have such securities registered under, the
Registration Statement.
SECTION 16. NOTICES TO COMPANY AND WARRANT AGENT.
Any notice or demand authorized by this Agreement to be given
or made by the Warrant Agent or by the registered holder of any Warrant to or on
the Company shall be sufficiently given or made when received if deposited in
the mail, first class or registered, postage prepaid, addressed (until another
address is filed in writing by the Company with the Warrant Agent) as follows:
Insilco Holding Co.
425 Metro Place N.
Box 7196
Dublin, Ohio 43017
Telephone: (614) 792-0468
Attention: Kenneth H. Koch, Esq.
With a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopier No.: (212) 450-4800
<PAGE>
41
Attention: Richard Truesdell, Jr, Esq.
In case the Company shall fail to maintain such office or
agency or shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Warrant Agent.
Any notice pursuant to this Agreement to be given by the
Company or by the registered holder(s) of any Warrant to the Warrant Agent shall
be sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as follows:
National City Bank
Corporate Trust Administration
629 Euclid Avenue
Cleveland, Ohio 44114
Telephone: (330) 575-2644
Attention: J. Dean Presson
SECTION 17. SUPPLEMENTS AND AMENDMENTS.
The Company and the Warrant Agent may from time to time
supplement or amend this Agreement without the approval of any holders of
Warrants in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which shall not in any way materially adversely
affect the interests of the holders of Warrants. Any amendment or supplement to
this Agreement that has a material adverse effect on the interests of the
holders of Warrants shall require the written consent of the holders of a
majority of the then outstanding Warrants (excluding Warrants held by the
Company or any of its affiliates). The consent of each holder of Warrants
affected shall be required for any amendment pursuant to which the Exercise
Price would be increased or the number of Warrant Shares purchasable upon
exercise of Warrants would be decreased (other than pursuant to adjustments
provided in this Agreement).
SECTION 18. SUCCESSORS.
All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Warrant Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 19. TERMINATION.
<PAGE>
42
This Agreement shall terminate at 5:00 p.m., New York City
time on August 15, 2007. Notwithstanding the foregoing, this Agreement will
terminate on any earlier date if all Warrants have been exercised. The
provisions of Section 12 shall survive such termination.
SECTION 20. GOVERNING LAW.
This Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of New York
and for all purposes shall be construed in accordance with the internal laws of
said State.
SECTION 21. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company, the Warrant Agent and the
registered holders of Warrants any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the registered holders of
Warrants.
SECTION 22. COUNTERPARTS.
This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
INSILCO HOLDING CO.
By:
------------------------------------
Name:
Title:
NATIONAL CITY BANK, as Warrant Agent
By:
------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
[Form of Warrant Certificate]
[Face]
Unit Legend. Each Warrant issued prior to the Separation Date
shall bear the following legend (the "Unit Legend") on the face thereof:
THE WARRANTS EVIDENCED BY THIS CERTIFICATE ARE INITIALLY
ISSUED AS PART OF AN ISSUANCE OF UNITS (THE "UNITS"), EACH OF WHICH CONSIST OF
$1,000 PRINCIPAL AMOUNT AT MATURITY OF THE 12% SENIOR SUBORDINATED NOTES DUE
2007 OF INSILCO CORPORATION. (THE "NOTES") AND ONE WARRANT (THE "WARRANTS")
INITIALLY ENTITLING THE HOLDER THEREOF TO PURCHASE 0.52 OF A SHARE, PAR VALUE
$0.001 PER SHARE, OF INSILCO HOLDING CO. COMMON STOCK.
PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE
CLOSING OF THE OFFERING OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION
STATEMENT WITH RESPECT TO A REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (III) THE DATE A SHELF REGISTRATION
STATEMENT WITH RESPECT TO THE NOTES IS DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (IV) SUCH DATE AS DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION IN
ITS SOLE DISCRETION SHALL DETERMINE AND (V) THE OCCURRENCE OF A CHANGE OF
CONTROL (AS DEFINED IN THE INDENTURE GOVERNING THE NOTES), THE WARRANTS
EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY
FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE NOTES.
Private Placement Legend: Each Warrant issued pursuant to an
exemption from the registration requirements of the Securities Act shall bear
the following legend (the "Private Placement Legend") on the face thereof
THIS WARRANT (OR ITS PREDECESSOR) AND THE WARRANT SHARES TO BE
ISSUED UPON ITS EXERCISE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B)
<PAGE>
2
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1),(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI"),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS
WARRANT OR THE WARRANT SHARES EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (D) TO AN IAI THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE WARRANT AGENT A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF WHICH CAN BE OBTAINED FROM THE WARRANT AGENT) AND AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION,
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
THE WARRANT AGREEMENT CONTAINS A PROVISION REQUIRING
THE WARRANT AGENT TO REFUSE TO REGISTER ANY TRANSFER OF THIS
SECURITY IN VIOLATION OF THE FOREGOING.
Global Warrant Legend: Each Global Warrant shall bear the following
legend (the "Global Warrant Legend") on the face thereof:
THIS GLOBAL WARRANT IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
WARRANT AGREEMENT GOVERNING THIS WARRANT) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON
UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE WARRANT AGENT MAY MAKE SUCH
NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 3.5 OF THE WARRANT
AGREEMENT, (II) THIS GLOBAL WARRANT MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 3.5(A) OF THE WARRANT AGREEMENT, (III) THIS GLOBAL WARRANT
MAY BE DELIVERED TO THE WARRANT AGENT FOR CANCELLATION PURSUANT TO SECTION 3.8
OF THE WARRANT AGREEMENT AND (IV) THIS
<PAGE>
3
GLOBAL WARRANT MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY.
<PAGE>
1
No. ___________ ___Warrants
CUSIP No. ________
Warrant Certificate
INSILCO HOLDING CO.
This Warrant Certificate certifies that its registered
assigns, is the registered holder of Warrants expiring August 15, 2007 (the
"Warrants") to purchase Common Stock, par value $.001 (the "Common Stock"), of
Insilco Holding Co., a Delaware corporation (the "Company"). Each Warrant
entitles the registered holder upon exercise at any time from 9:00 a.m. on the
Separation Date referred to below (the "Exercise Date") until 5:00 p.m. New York
City Time on August 15, 2007, to receive from the Company 0.52 fully paid and
nonassessable shares of Common Stock (the "Warrant Shares") at the initial
exercise price (the "Exercise Price") of $45.00 per share payable upon surrender
of this Warrant Certificate and payment of the Exercise Price at the office or
agency of the Warrant Agent, but only subject to the conditions set forth herein
and in the Warrant Agreement referred to on the reverse hereof. Notwithstanding
the foregoing, Warrants may be exercised without the exchange of funds pursuant
to the net exercise provisions of Section 4 of the Warrant Agreement. The
Exercise Price and number of Warrant Shares issuable upon exercise of the
Warrants are subject to adjustment upon the occurrence of certain events set
forth in the Warrant Agreement.
The holder of this Warrant by the acceptance hereof agrees
that upon the occurrence of any Special Redemption (as defined in the Indenture)
of the Notes, it shall deliver to the Company for cancellation one Warrant for
each $1,000 principal amount of Notes being redeemed from such holder, which
Warrants shall be deemed canceled upon redemption of such Notes pursuant to the
Special Redemption.
"Separation Date"shall mean the earliest of (i) May 8, 1999,
(ii) the date on which a registration statement with respect to a registered
exchange offer for the Notes is declared effective under the Securities Act,
(iii) the date a shelf registration statement with respect to the Notes is
declared effective under the Securities Act, (iv) such date as Donaldson, Lufkin
& Jenrette Securities Corporation in its sole discretion shall determine and (v)
the occurrence of a Change of Control (as defined in the Indenture governing the
Notes).
No Warrant may be exercised after 5:00 p.m., New York City
Time on August 15, 2007, and to the extent not exercised by such time such
Warrants shall become void.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
<PAGE>
2
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent, as such term is used in the Warrant
Agreement.
This Warrant Certificate shall be governed by and construed in
accordance with the internal laws of the State of New York.
<PAGE>
3
IN WITNESS WHEREOF, Insilco Holding Co. has caused this
Warrant Certificate to be signed below.
Dated: November 9, 1998
INSILCO HOLDING CO.
By:
--------------------------------
Name:
Title:
Countersigned:
NATIONAL CITY BANK
as Warrant Agent
By:
-------------------------------
Authorized Signature
<PAGE>
[Reverse of Warrant Certificate]
The Warrants evidenced by this Warrant Certificate are part of
a duly authorized issue of Warrants expiring at 5:00 p.m. New York City time on
August 15, 2007 entitling the holder on exercise to receive shares of Common
Stock, and are issued or to be issued pursuant to a Warrant Agreement dated as
of November 9, 1998 (the "Warrant Agreement"), duly executed and delivered by
the Company to National City Bank, as warrant agent (the "Warrant Agent"), which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Warrant Agent,
the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Warrants. A copy of the Warrant
Agreement may be obtained by the holder hereof upon written request to the
Company.
Warrants may be exercised at any time on or after the
Separation Date and on or before 5:00 p.m. New York City time on August 15,
2007; provided that holders shall be able to exercise their Warrants only if a
registration statement relating to the Warrants Shares is then in effect, or the
exercise of such Warrants is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and such securities
are qualified for sale or exempt from qualification under the applicable
securities laws of the states in which the various holders of the Warrants or
other persons to whom it is proposed that the Warrant Shares be issued on
exercise of the Warrants reside. The Company has agreed pursuant to the Warrant
Agreement and a Warrant Registration Rights Agreement dated as of November 9,
1998 (the "Warrant Registration Rights Agreement") to file within 120 days after
the issuance of the Warrants and use its reasonable best efforts to make
effective on or before 150 days after such date a shelf registration statement
on the appropriate form under the Securities Act, and to use its reasonable best
efforts to keep such registration statement continuously effective, subject to
certain exceptions, under the Securities Act in order to permit the resale of
the Warrants and Warrant Shares by the holders thereof and the issuance of
Warrants Shares upon exercise of Warrants resold pursuant to an effective
Registration Statement, subject to certain exceptions, until the earlier of (i)
two years following the first date as of which no Warrants remain outstanding
and (ii) if all of the Warrants expire unexercised, the Expiration Date.
In order to exercise all or any of the Warrants represented by
this Warrant Certificate, the holder must deliver to the Warrant Agent at its
New York corporate trust office set forth in Section 19 of the Warrant Agreement
this Warrant Certificate and the form of election to purchase on the reverse
hereof duly filled in and signed, which signature shall be medallion guaranteed
by an institution which is a member of a Securities Transfer Association
recognized signature guarantee program, and upon payment to the Warrant Agent
for the account of the Company of the Exercise Price, as adjusted as provided in
the Warrant Agreement, for the
A-1
<PAGE>
number of Warrant Shares in respect of which such Warrants are then exercised.
Notwithstanding the foregoing, Warrants may be exercised without the exchange of
funds pursuant to the net exercise provisions of Section 4 of the Warrant
Agreement. No adjustment shall be made for any dividends on any Common Stock
issuable upon exercise of this Warrant.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the Warrant
Agreement provides that the number of shares of Common Stock issuable upon the
exercise of each Warrant shall be adjusted. No fractions of a share of Common
Stock will be issued upon the exercise of any Warrant, but the Company will pay
the cash value thereof determined as provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the
Warrant Agent by the registered holder thereof in person or by legal
representative or attorney duly authorized in writing, may be exchanged, in the
manner and subject to the limitations provided in the Warrant Agreement, but
without payment of any service charge, for another Warrant Certificate or
Warrant Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this
Warrant Certificate at the office of the Warrant Agent a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for this
Warrant Certificate, subject to the limitations provided in the Warrant
Agreement, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company and the Warrant Agent may deem and treat the
registered holder(s) thereof as the absolute owner(s) of this Warrant
Certificate (notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, of any distribution to
the holder(s) hereof, and for all other purposes, and neither the Company nor
the Warrant Agent shall be affected by any notice to the contrary. Neither the
Warrants nor this Warrant Certificate entitles any holder hereof to any rights
of a stockholder of the Company.
A-2
<PAGE>
[Form of Election to Purchase]
(To Be Executed Upon Exercise Of Warrant)
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to receive _____________ shares
of Common Stock and herewith tenders payment for such shares to the order of
INSILCO HOLDING CO., in the amount of $__________ in accordance with the terms
hereof unless the holder is exercising Warrants pursuant to the net exercise
provisions of Section 4 of the Warrant Agreement in which case the holder shall
receive such number of Warrant Shares equal to the product of (A) the number of
Warrant Shares for which this Warrant Certificate is exercisable as of the date
of exercise (if the Exercise Price were being paid in cash) and (B) the Cashless
Exercise Ratio (as defined in the Warrant Agreement). The undersigned requests
that a certificate for such shares be registered in the name of _______________,
whose address is __________________ and that such shares be delivered to
___________, whose address is ____________________________. If said number of
shares is less than all of the shares of Common Stock purchasable hereunder, the
undersigned requests that a new Warrant Certificate representing the remaining
balance of such shares be registered in the name of ______________________,
whose address is ____________________, and that such Warrant Certificate be
delivered to whose address is ____________________.
-------------------------------
Signature
Date:
-------------------------------
Signature Guaranteed
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Warrant Agent, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Warrant Agent in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-3
<PAGE>
SCHEDULE OF EXCHANGES OF INTERESTS OF GLOBAL WARRANTS
The following exchanges of a part of this Global Warrant have been made:
<TABLE>
Number of
Amount of Amount of Warrants in this
decrease in increase in Global Warrant Signature of
Number of Number of following such authorized
Date of warrants in this Warrants in this decrease or officer of
Exchange Global Warrant Global Warrant increase Warrant Agent
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
A-4
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Insilco Holding Co.
425 Metro Place N.
Box 7196
Dublin, Ohio 43017
National City Bank
Corporate Trust Administration
629 Euclid Avenue
Cleveland, Ohio 44114
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of
November 9, 1998 (the "Warrant Agreement"), between Insilco Holding Co., as
issuer (the "Company"), and National City Bank, as warrant agent. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Warrant Agreement.
___________________, (the "Transferor") owns and proposes to
transfer the Warrant[s] or interest in such Warrant[s] specified in Annex A
hereto, in the principal amount at maturity of $___________ in such Warrant[s]
or interests (the "Transfer"), to ___________________________ (the
"Transferee"), as further specified in Annex A hereto. In connection with the
Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] Check if Transferee will take delivery of a beneficial
interest in the 144A Global Warrant or a Definitive Warrant Pursuant to Rule
144A. The Transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further certifies that the
beneficial interest or Definitive Warrant is being transferred to a Person that
the Transferor reasonably believed and believes is purchasing the beneficial
interest or Definitive Warrant for its own account, or for one or more accounts
with respect to which such Person exercises sole investment discretion, and such
Person and each such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and
such Transfer is in compliance with any applicable blue sky securities laws of
B-1
<PAGE>
any state of the United States. Upon consummation of the proposed Transfer in
accordance with the terms of the Warrant Agreement, the transferred beneficial
interest or Definitive Warrant will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the 144A Global Warrant
and/or the Definitive Warrant and in the Warrant Agreement and the Securities
Act.
2. [ ] Check and complete if Transferee will take delivery of
a beneficial interest in a Definitive Warrant pursuant to any provision of the
Securities Act other than Rule 144A. The Transfer is being effected in
compliance with the transfer restrictions applicable to beneficial interests in
Restricted Global Warrants and Restricted Definitive Warrants and pursuant to
and in accordance with the Securities Act and any applicable blue sky securities
laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a subsidiary
thereof;
or
(c) [ ] such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with
the prospectus delivery requirements of the Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A or Rule 144,
and the Transferor hereby further certifies that it has not engaged in
any general solicitation within the meaning of Regulation D under the
Securities Act and the Transfer complies with the transfer restrictions
applicable to beneficial interests in a Restricted Global Warrant or
Restricted Definitive Warrants and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed
by the Transferee in the form of Exhibit D to the Warrant Agreement and
(2) if the Company requests, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), to the effect that such Transfer is in
compliance with the Securities Act. Upon consummation of the
B-2
<PAGE>
proposed transfer in accordance with the terms of the Warrant
Agreement, the transferred beneficial interest or Definitive Warrant
will be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the IAI Global Warrant and/or the
Definitive Warrants and in the Warrant Agreement and the Securities
Act.
3. [ ] Check if Transferee will take delivery of a beneficial
interest in an Unrestricted Global Warrant or of an Unrestricted Definitive
Warrant.
(a) [ ] Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions
contained in the Warrant Agreement and any applicable blue sky
securities laws of any state of the United States and (ii) the
restrictions on transfer contained in the Warrant Agreement and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will no longer be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Warrants, on
Restricted Definitive Warrants and in the Warrant Agreement.
(b) [ ] Check if Transfer is Pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an
exemption from the registration requirements of the Securities Act
other than Rule 144 or Rule 144A and in compliance with the transfer
restrictions contained in the Warrant Agreement and any applicable blue
sky securities laws of any State of the United States and (ii) the
restrictions on transfer contained in the Warrant Agreement and the
Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Warrant Agreement, the
transferred beneficial interest or Definitive Warrant will not be
subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Global Warrants or
Restricted Definitive Warrants and in the Warrant Agreement.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
----------------------------------------
[Insert Name of Transferor]
By:
------------------------------------
B-3
<PAGE>
Name:
Title:
Dated:
------------------------
B-4
<PAGE>
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the 144A Global Warrant, or
(b) [ ] a Restricted Definitive Warrant.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] IAI Global Warrant, or
(iv) [ ] Unrestricted Global Warrant; or
(b) [ ] a Restricted Definitive Warrant; or
(c) [ ] an Unrestricted Definitive Warrant,
in accordance with the terms of the Warrant Agreement.
B-5
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Insilco Holding Co.
425 Metro Place N.
Box 7196
Dublin, Ohio 43017
National City Bank
Corporate Trust Administration
629 Euclid Avenue
Cleveland, Ohio 44114
Re: Warrants
(CUSIP ____________)
Reference is hereby made to the Warrant Agreement, dated as of
November 9, 1998 (the "Warrant Agreement"), between Insilco Holding Co., as
issuer (the "Company"), and National City Bank, as warrant agent. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Warrant Agreement.
__________________________, (the "Owner") owns and proposes to
exchange the Warrant[s] or interest in such Warrant[s] specified herein, in the
amount of $____________ in such Warrant[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Warrants or Beneficial
Interests in a Restricted Global Warrant for Unrestricted Definitive Warrants or
Beneficial Interests in an Unrestricted Global Warrant
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to beneficial interest in an Unrestricted Global
Warrant. In connection with the Exchange of the Owner's beneficial
interest in a Restricted Global Warrant for a beneficial interest in an
Unrestricted Global Warrant in an equal principal amount, the Owner
hereby certifies (i) the beneficial interest is being acquired for the
Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the
C-1
<PAGE>
transfer restrictions applicable to the Global Warrants and pursuant to
and in accordance with the United States Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer
contained in the Warrant Agreement and the Private Placement Legend are
not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Warrant is
being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
(b) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to Unrestricted Definitive Warrant. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global
Warrant for an Unrestricted Definitive Warrant, the Owner hereby
certifies (i) the Definitive Warrant is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to the Restricted
Global Warrants and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Warrant
Agreement and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the Definitive
Warrant is being acquired in compliance with any applicable blue sky
securities laws of any state of the United States.
(c) [ ] Check if Exchange is from Restricted Definitive Warrant to
beneficial interest in an Unrestricted Global Warrant. In connection
with the Owner's Exchange of a Restricted Definitive Warrant for a
beneficial interest in an Unrestricted Global Warrant, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in
compliance with the transfer restrictions applicable to Restricted
Definitive Warrants and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the
Warrant Agreement and the Private Placement Legend are not required in
order to maintain compliance with the Securities Act and (iv) the
beneficial interest is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(d) [ ] Check if Exchange is from Restricted Definitive Warrant to
Unrestricted Definitive Warrant. In connection with the Owner's
Exchange of a Restricted Definitive Warrant for an Unrestricted
Definitive Warrant, the Owner hereby certifies (i) the Unrestricted
Definitive Warrant is being acquired for the Owner's own account
without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive
Warrants and pursuant to and in accordance with the Securities Act,
(iii) the restrictions on transfer contained in the Warrant Agreement
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the Unrestricted Definitive
Warrant
C-2
<PAGE>
is being acquired in compliance with any applicable blue sky securities
laws of any state of the United States.
2. Exchange of Restricted Definitive Warrants or Beneficial
Interests in Restricted Global Warrants for Restricted Definitive Warrants or
Beneficial Interests in Restricted Global Warrants
(a) [ ] Check if Exchange is from beneficial interest in a Restricted
Global Warrant to Restricted Definitive Warrant. In connection with the
Exchange of the Owner's beneficial interest in a Restricted Global
Warrant for a Restricted Definitive Warrant in a number equal to the
number of beneficial interests exchanged, the Owner hereby certifies
that the Restricted Definitive Warrant is being acquired for the
Owner's own account without transfer. Upon consummation of the proposed
Exchange in accordance with the terms of the Warrant Agreement, the
Restricted Definitive Warrant issued will continue to be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the Restricted Definitive Warrant and in the Warrant
Agreement and the Securities Act.
(b) Check if Exchange is from Restricted Definitive Warrant to
beneficial interest in a Restricted Global Warrant. In connection with
the Exchange of the Owner's Restricted Definitive Warrant for a
beneficial interest in the 144A Global Warrant, in a number equal to
the number of beneficial interests exchanged, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's
own account without transfer and (ii) such Exchange has been effected
in compliance with the transfer restrictions applicable to the
Restricted Global Warrants and pursuant to and in accordance with the
Securities Act, and in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Warrant
Agreement, the beneficial interest issued will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the relevant Restricted Global Warrant and in the Warrant
Agreement and the Securities Act.
C-3
<PAGE>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company.
---------------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------------
Name:
Title:
Dated:
--------------------------
C-4
<PAGE>
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Insilco Holding Co.
425 Metro Place N.
Box 7196
Dublin, Ohio 43017
National City Bank
Corporate Trust Administration
629 Euclid Avenue
Cleveland, Ohio 44114
Re: Warrants
Reference is hereby made to the Warrant Agreement, dated as of
November 9, 1998 (the "Warrant Agreement"), between Insilco Holding Co., as
issuer (the "Company"), and National City Bank, as warrant agent. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Warrant Agreement.
In connection with our proposed purchase of____________
Definitive Warrants, we confirm that:
1. We understand that any subsequent transfer of the Warrants
or any interest therein is subject to certain restrictions and conditions set
forth in the Warrant Agreement and the undersigned agrees to be bound by, and
not to resell, pledge or otherwise transfer the Warrants or any interest therein
except in compliance with, such restrictions and conditions and the United
States Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Warrants have
not been registered under the Securities Act, and that the Warrants and any
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Warrants or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
D-1
<PAGE>
Company a signed letter substantially in the form of this letter and, if
requested by the Company, an Opinion of Counsel in form reasonably acceptable to
the Company to the effect that such transfer is in compliance with the
Securities Act, (D) pursuant to the provisions of Rule 144(k) under the
Securities Act or (E) pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person purchasing the
Definitive Warrant or beneficial interest in a Global Warrant from us in a
transaction meeting the requirements of clauses (A) through (D) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.
3. We understand that, on any proposed resale of the Warrants
or beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Warrants purchased by
us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Warrants,
and we and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Warrants or beneficial interest
therein purchased by us for our own account or for one or more accounts (each of
which is an institutional "accredited investor") as to each of which we exercise
sole investment discretion.
We agree not to engage in any hedging transactions with
regard to the Warrants unless such hedging transactions are in compliance with
the Securities Act.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
---------------------------------------------
[Insert Name of Transferor]
By:
-----------------------------------------
Name:
Title:
D-2
<PAGE>
Dated:
--------------------------
D-3
<PAGE>
EXHIBIT E
FORM OF WARRANT REGISTRATION RIGHTS AGREEMENT
E-1
Exhibit 5.1
May 10, 1999
Insilco Holding Co.
425 Metro Place North, Fifth Floor
Dublin, Ohio 43017
We have acted as special counsel for Insilco Holding Co., a Delaware
corporation (the "Company") in connection with the Registration Statement on
Form S-2 (the "Registration Statement") filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the "Act"). The
Registration Statement relates to registration under the Act of (i) the resale
of 120,000 warrants (the "Warrants") to purchase shares of Common Stock, par
value $.001 per share (the "Common Stock"), of the Company by certain holders
named in an accompanying supplement thereto ("Warrantholders") and (ii) the
issuance of up to 62,400 shares of Common Stock ("Warrant Shares") upon
exercise of such Warrants to persons who have purchased Warrants under the
immediately preceding clause (i) ("Exercising Warrantholders").
The Warrants were issued pursuant to a Warrant Agreement (the
"Warrant Agreement") dated as of November 9, 1998 between the Company and
National City Bank, as Warrant Agent (the "Warrant Agent").
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary for the purposes of rendering this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Warrants have been duly authorized, executed and
delivered by the Company and are valid and binding
obligations of the Company, enforceable against the Company
in accordance with their terms, except as (x) such
enforcement may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights
<PAGE>
generally and (y) such enforcement may be limited by
equitable principles of general applicability, regardless of
whether enforcement is sought in a proceeding at law or in
equity.
2. The Company has duly authorized and reserved for issuance
the Warrant Shares to be issued upon the exercise of the
Warrants and, when issued and delivered upon the exercise of
the Warrants against payment of the exercise price as
provided in the Warrant Agreement, the Warrant Shares will
have been validly issued and will be fully paid and non
assessable.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of
the United States of America and the General Corporation Law of the State of
Delaware.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our name under the heading
"Legal Matters" in the related Prospectus.
Very truly yours,
Consent of Independent Auditors'
The Board of Directors
Insilco Holding Co.:
We consent to the use of our report incorporated herein by reference and to the
reference to our Firm unde the heading "Experts" in the prospectus.
KPMG LLP
Columbus, Ohio
May 6, 1999
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Smialek, David A. Kauer, Kenneth H.
Koch, and Michael E. Elia or each of them as his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for for him or her and in his or her name, place and stead, in
any and all capacities, to sign the Registration Statement, in connextion with
the registration of wArrants to purchase 62,400 ahsres of Insilco Holding Co.
("Issuer") common stock, which Warrants were issued and sold in connection
with the offering by Insilco Corporation, a wholly owned subsidiary of Issuer,
of 120,000 Units, each consisting of $1,000 principal amount at maturity of
12% Senior Subordinated Notes due 2007 ("Notes"), and one Warrant, to sign any
and all amendments to said Registration Statement (including post-effective
amendments and related registration statements (or amendments thereto) filed
pursuant to Rule 462 promulgated under the Securities Act of 1933); and to file
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agentsk, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done inc connection
therewith as fully to all intents and purposes as he or she might or could do
in person, thereby ratifying and confirming that all sais attorneys-in-fact and
agenmts, or their substitute or substitutes may law fully do or cause to be
done by virtue thereof.
Dated: April 21, 1999
/s/ Robert L. Smialek /s/ Thompson Dean
- ------------------------------------- -------------------------------------
Robert L. Smialek Thompson Dean
/s/ William F. Dawson, Jr. /s/ David Y. Howe
- ------------------------------------- -------------------------------------
William F. Dawson David Y. Howe
/s/ Randall E. Curran /s/ Keith Palumbo
- ------------------------------------- -------------------------------------
Randall E. Curran Keith Palumbo
/s/ John F. Fort III /s/ David A. Kauer
- ------------------------------------- -------------------------------------
John F. Fort III David A. Kauer
/s/ Michael R. Elia
- -------------------------------------
Michael R. Elia
