UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-10281
Smith Corona Corporation
(Exact name of registrant as specified in its charter)
Delaware 51-0286862
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
839 Route 13 South, Cortland, New York 13045
(Address of principal executive offices) (Zip Code)
(607) 753-6011
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13, or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Outstanding at
Class May 9, 1997
Common Stock, par value $.001 2,666,812
per share
SMITH CORONA CORPORATION AND SUBSIDIARIES
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 1997 and June 30, 1996 1
Consolidated Statements of Operations - For the
three and nine months ended March 31, 1997
and 1996 2
Consolidated Statement of Changes in Stockholders'
Equity - For the nine months ended March 31, 1997 3
Consolidated Statements of Cash Flows - For the
nine months ended March 31, 1997 and 1996 4
Notes to Consolidated Financial Statements 5-14
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 15-17
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 17
Item 6. Exhibits and Reports on Form 8-K 18-19
Signatures 20
Exhibit Index
SMITH CORONA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
<TABLE>
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March 31, June 30,
1997 1996
ASSETS (audited)
Current assets:
Cash and cash equivalents $ 22,259 $ 29,929
Accounts receivable (net of allowance
for doubtful accounts of $889 and
$1,576, respectively) 12,227 17,185
Inventories 12,544 16,873
Prepaid expenses and other current
assets 3,239 4,754
Total current assets 50,269 68,741
Property, plant and equipment, net 12,169 12,639
Other assets 565 2,492
TOTAL $ 63,003 $ 83,872
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $ 4,999 $ 3,569
Accrued liabilities 12,560 10,353
Income taxes payable 3,522 702
Total current liabilities 21,081 14,624
Pension liability 4,832 -
Postretirement benefits 12,472 -
Other long-term liabilities 3,199 -
Liabilities subject to compromise - 60,120
Total liabilities 41,584 74,744
Stockholders' equity:
Common stock-2,514,437 shares
and 30,250,000 shares issued
and outstanding, respectively 3 303
Additional paid-in capital 55,068 44,697
Deferred compensation (165) -
Accumulated deficit (33,487) (35,872)
Total stockholders' equity 21,419 9,128
TOTAL $ 63,003 $ 83,872
</TABLE>
See accompanying notes to consolidated financial statements.
SMITH CORONA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share amounts)
Three months ended Nine months ended
March 31, March 31,
1997 1996 1997 1996
<TABLE>
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Net sales $16,905 $20,026 $60,354 $89,792
Cost of goods sold 13,988 18,914 47,396 83,773
Gross margin 2,917 1,112 12,958 6,019
Selling, general and
administrative expenses 4,964 7,136 12,181 21,703
Reorganization costs 1,208 2,090 6,416 8,147
Restructuring expense(income) - (16,995) - (18,296)
Other expense (income) - (441) 150 (1,537)
Operating income (loss) (3,255) 9,322 (5,789) (3,998)
Interest (income) expense (89) (4) (98) 596
Income (loss) before income
taxes and extraordinary gain (3,166) 9,326 (5,691) (4,594)
Income taxes 20 255 46 400
Income (loss)
before extraordinary gain (3,186) 9,071 (5,737) (4,994)
Extraordinary gain 8,122 - 8,122 -
Net income (loss) $ 4,936 $ 9,071 $ 2,385 $(4,994)
Income (loss) per common and
common equivalent share:
Income (loss) before
extraordinary gain $(1.42) $ 4.03 $(2.55) $(2.22)
Extraordinary gain 3.61 - 3.61 -
Net income (loss) per common
and common equivalent
share $ 2.19 $ 4.03 $ 1.06 $(2.22)
Weighted average common and
common equivalent shares
outstanding (in thousands) 2,249 2,249 2,249 2,249
</TABLE>
See accompanying notes to consolidated financial statements.
SMITH CORONA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the nine months ended March 31, 1997
($ in thousands)
<TABLE>
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Additional
Common Paid-In Deferred Accumulated
Stock Capital Compensation Deficit Total
Balance June 30, 1996 $303 $44,697 - $(35,872) $ 9,128
Net income - - - 2,385 2,385
Deferred compensation - 171 $(171) - -
Amortization of deferred
compensation - - 6 - 6
Cancellation of old
common stock (303) 303 - - -
Issuance of new common
stock to creditors 3 9,897 - - 9,900
Balance March 31, 1997 $ 3 $55,068 $(165) $(33,487) $21,419
</TABLE>
See accompanying notes to consolidated financial statements.
SMITH CORONA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
Nine months ended
March 31,
1997 1996
<TABLE>
<S> <S> <S>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 2,385 $(4,994)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 2,708 4,402
Gain on disposition of
property, plant and equipment (439) (16,196)
Inventory provisions 1,812 4,243
Pension curtailment gain (3,394) (1,524)
Extraordinary gain (8,122) -
Other noncash items (132) (63)
Changes in assets and liabilities:
Accounts receivable 4,958 16,223
Inventories 2,517 28,297
Prepaid expenses and
other current assets 1,515 115
Other assets (85) 48
Trade payables 1,496 (6,101)
Accrued liabilities and income taxes
payable 210 (14,192)
Postretirement benefits and pension
liability (1,181) 845
Other long-term liabilities 337 (80)
Net cash provided by
operating activities 4,585 11,023
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the sale of property,
plant and equipment 466 24,003
Capital expenditures (247) (229)
Net cash provided by
investing activities 219 23,774
CASH FLOWS FROM FINANCING ACTIVITIES:
Bank loans (repayments), net - (17,400)
Payments made to settle
liabilities subject to compromise (12,474) -
Net cash used in
financing activities (12,474) (17,400)
Increase (decrease) in
cash and cash equivalents (7,670) 17,397
Cash and cash equivalents:
Beginning of period 29,929 7,003
End of period $22,259 $24,400
See accompanying notes to consolidated financial statements.
SMITH CORONA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
($ in thousands, except per share amounts)
NOTE 1 - PETITION FOR REORGANIZATION UNDER CHAPTER 11 AND BASIS
OF PRESENTATION
On July 5, 1995 (the "Petition Date"), Smith Corona Corporation (the
"Company") filed a voluntary petition for relief under Chapter 11 of
the United States Bankruptcy Code (the "Bankruptcy Code") in the United
States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"). On August 18, 1995, SCM Office Supplies, Inc., SCC LI
Corporation (formerly known as Histacount Corporation) and Hulse
Manufacturing Company, all wholly-owned nonoperating subsidiaries of
the Company (collectively, the "Nonoperating Subsidiaries"), filed
Chapter 11 petitions. On October 31, 1996, Smith Corona Overseas
Holdings, Inc., SCM Inter-American Corporation and SCM (United Kingdom)
Limited, all wholly-owned domestic subsidiaries (the "Wholly-Owned
Domestic Subsidiaries"), also filed Chapter 11 petitions. (The
petitions of the Company, the Nonoperating Subsidiaries and the Wholly-Owned
Domestic Subsidiaries are referred to herein collectively as the
"Bankruptcy Proceedings"). The primary purpose of the October 31, 1996
filings, which had no effect on operations, was to better protect
corporate assets during the reorganization period. The Bankruptcy
Proceedings primarily related to all U.S. assets and operations and did
not pertain to the Company's international subsidiaries. From July 5,
1995 to February 28, 1997, the Company operated as a debtor-in-possession.
On January 27, 1997 the Bankruptcy Court entered an order confirming
the Company's Third Amended Second Joint Plan of Reorganization (the
"Confirmation Order"). The Confirmation Order was subject to
satisfaction of certain conditions precedent to the effective date.
The Company satisfied the conditions and emerged from the Bankruptcy
Proceedings on February 28, 1997 (the "Effective Date").
The consolidated financial statements for periods prior to the
Effective Date have been presented in accordance with the American
Institute of Certified Public Accountants Statement of Position 90-7:
"Financial Reporting by Entities in Reorganization Under the Bankruptcy
Code." The consolidated financial statements have been prepared in
accordance with generally accepted accounting principles applicable to
a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.
Accordingly, the consolidated financial statements for periods prior to
the Effective Date do not reflect adjustments or provide for the
potential consequences of the Bankruptcy Proceedings. In particular,
the consolidated financial statements for periods prior to the
Effective Date do not purport to show (a) the realizable value of
assets on a liquidation basis or their availability to satisfy
liabilities; (b) prepetition liability amounts that may be allowed for
claims or contingencies or the status and priority thereof; (c) the
effect of any changes that may be made to the capitalization of the
Company; or (d) the effect of any changes that may be made in the
Company's business operations.
Liabilities recorded by the Company as of June 30, 1996, that were
expected to be compromised under a plan of reorganization consisted of
the following:
June 30,
1996
Trade payables $10,417
Accrued liabilities 10,787
Income taxes payable 3,088
Postretirement benefits 12,497
Pension liability 17,681
Other long-term liabilities 5,650
Total(1) $60,120
(1) Excludes a net intercompany (receivable) payable in the amount of
$24,637 to the Company's subsidiaries not included in the
Bankruptcy Proceedings. If the Wholly-Owned Domestic Subsidiaries
were reflected as part of the June 30, 1996 amount, the net
intercompany (receivable) payable would have been a net
intercompany receivable of $(1,203).
The Company recorded reorganization costs relating to its Bankruptcy
Proceedings aggregating $6,416 for the nine months ended March 31,
1997. These charges include professional fees, a provision for closing
the New Canaan, Connecticut headquarters and relocation of such
headquarters to Cortland, New York, and costs associated with the
distribution of the Company's Third Amended Second Joint Plan of
Reorganization (the "POR") for the solicitation of creditors, offset by
interest income earned on domestic cash balances of $607, a purchase
deposit forfeiture of $500 and a settlement the Company reached with
its banks relating to the Company's debtor-in-possession financing of
$500.
An administrator was appointed on August 2, 1995 for the Company's
wholly-owned subsidiary in Australia. The Administrator was appointed
as Liquidator on August 29, 1995. Due to the liquidation, the
Australian subsidiary's assets, liabilities and operating results were
removed from the consolidated financial statements as of August 2, 1995
and the Company had recorded in other expense (income) an estimated
loss on liquidation of approximately $415 and $291 in the first and
third quarters, respectively, of the year ended June 30, 1996. On
December 6, 1996, the Company received the final distribution of funds
in the liquidation of the Australian subsidiary which resulted in a
gain, recorded in other income, of approximately $157 during the second
quarter ended December 31, 1996. The Company has established a
distributor relationship in the Australian market for the purpose of
maintaining its distribution capacity.
At the Company's request, the Bankruptcy Court established a bar date
of October 31, 1995 for pre-petition claims against the Company. The
Bankruptcy Court also established an administrative claims bar date of
(i) October 18, 1996 for claims that occurred on or before August 16,
1996 and (ii) April 29, 1997 for claims that occurred after August 16,
1996 and on or before the Effective Date. A bar date is the date by
which claims against the Company must be filed if the claimants wish to
receive any distribution in the Bankruptcy Proceedings. The Company
has given notice to all known actual or potential claimants subject to
the October 31, 1995, October 18, 1996 and April 29, 1997 bar dates of
their need to file a proof of claim with the Bankruptcy Court. The
Company is reconciling claims that differ from the Company's records,
and any differences that cannot be resolved by negotiated agreements
between the Company and the claimant will be resolved by the Bankruptcy
Court.
Under the POR, all allowed general unsecured claims will be satisfied
through the distribution to holders of such claims of (i) the unsecured
class cash of approximately $11,330 (less any amounts paid to holders
of allowed convenience class claims discussed below), and (ii) 85
percent of the reorganized company's common stock to be issued pursuant
to the POR. Each holder of an allowed general unsecured claim will
receive one share of the reorganized company's common stock for each
ten dollars in allowed claim value. All allowed claims senior to
allowed general unsecured claims will be satisfied by the payment in
full in cash or notes (as provided for by the Bankruptcy Code) or the
assumption of all such claims. As described below, the distributions
to holders of allowed general unsecured claims and claims senior to
such claims have commenced. Allowed convenience class claims (general
unsecured claims of one thousand five hundred dollars or less) received
payment in cash in an amount equal to 60 percent of the amount of such
claims. In addition, registered holders as of August 15, 1996, of the
Company's common stock, par value $.01 per share, which was outstanding
prior to the Effective Date (the "Old Common Stock") have received
warrants to purchase one share of common stock, par value $.001 per
share (the "Common Stock") in the reorganized company for each twenty
shares of Old Common Stock.
For the quarter ended March 31, 1997, the Company made a disbursement
of $12,474 to the distribution agent for payment of allowed general
unsecured claims and claims senior to such claims. Additionally, in
accordance with the POR, as of March 31, 1997 2,456,634 Common Shares
were issued to allowed general unsecured claim holders. Once disputed
general unsecured claims are resolved and allowed, such claimants will
share, on a pro rata basis, in the aforementioned cash pool as well as
in 85 percent of the Common Stock. On February 28, 1997 the Company
recorded a value of approximately $9,900 for 85 percent of the Common
Stock. In connection with the POR going effective, certain liabilities
recorded as subject to compromise were retained by the Company and
approximately $30,496 of such liabilities were settled which resulted
in a pre-tax and after-tax extraordinary gain of approximately $8,122.
Under the POR, the reorganized company plans to significantly expand
its product line, primarily by sourcing new products from outside
manufacturers. Such sourcing may, over time, include entering into
strategic alliances with third parties to provide products or services.
In that respect, the reorganized company will focus its efforts on
forging alliances with companies that provide technologically advanced
office products but presently do not have a substantial United States
market share or market presence, and are intent on building or
increasing market share by selling their products under the well-known
"Smith Corona" name. The reorganized company intends to rely on its
existing distribution network to become a leading vendor of
technologically advanced office products. Further, the reorganized
company intends to maintain its core business of manufacturing and
distributing its current product line of typewriters and personal word
processors and related supplies and accessories to satisfy continuing
worldwide demand for these products.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The accompanying interim consolidated financial statements, although
not necessarily indicative of results of operations for the entire
fiscal year, include all adjustments of a normal recurring nature which
are, in the opinion of management, necessary for a fair presentation of
the results for the periods covered. They have been prepared by the
Company without audit in accordance with the instructions to Form 10-Q
and should be read in conjunction with the consolidated financial
statements and the notes thereto for the fiscal year ended June 30,
1996, as contained in the Company's Annual Report on Form 10-K.
Income (loss) per common and common equivalent share for all periods
presented are based on the weighted average number of common shares
outstanding since the Effective Date and the effect of considering
common stock equivalents. Primary and fully diluted income (loss) per
common and common equivalent share are approximately the same, and
therefore, are not shown separately.
Certain reclassifications have been made to the prior year's financial
statements to conform with the fiscal 1997 presentation.
NOTE 3 - CONTINGENCIES
See Note 4 for a description of the termination proceedings for the
Defined Benefit Plans. See Note 1 for a description of the Bankruptcy
Proceedings.
Certain aspects of the Company's past handling and/or disposal of
hazardous substances have been the subject of investigation by federal
and state regulatory authorities, or have been the subject of lawsuits
filed by such authorities or by private parties. At March 31, 1997 and
June 30, 1996, the Company had recorded liabilities of approximately
$3,325 and $4,160, respectively, related to environmental matters.
Because of the uncertainties associated with assessing environmental
matters, the related ultimate liabilities are not presently
determinable. However, based on facts presently known, management does
not believe that these investigations or lawsuits, if resolved
adversely to the Company, would individually or in the aggregate have a
material adverse effect on the Company's financial position or results
of operations.
The Company was the owner and operator of manufacturing facilities in
Groton, New York (the "Groton Site") and Cortlandville, New York (the
"Cortlandville Site") and, together (the "Owner/Operator Sites"). The
Company's liability, if any, at the Owner/Operator Sites stems from
groundwater contamination at the Cortlandville Site and soil
contamination at the Groton Site. Remediation programs at the
Owner/Operator Sites currently consist of round-the-clock pumping and
filtering (Cortlandville Site) or soil venting with a soil infiltration
injection system (Groton Site). The costs of establishing remediation
programs at the Owner/Operator Sites had largely been paid by the
Company prior to the Petition Date. To the Company's knowledge, the
only future costs that will be associated with remediation of those
sites are for operation, maintenance, monitoring, shutdown, and post-shutdown of
the systems. Under the POR, the reorganized company will
continue to be responsible for those costs. The Company believes that
it has set aside adequate reserves for the payment of expenses for the
ongoing remediation programs at the Groton and Cortlandville Sites.
Claims asserted by the New York Department of Environmental
Conservation ("DEC") and the New York Department of Health ("DOH") in
the Company's bankruptcy proceedings for past and future costs at the
Groton and Cortlandville Sites, and at eight other sites, were resolved
by the Company and the State of New York on August 6, 1996 at amounts
that were not material to the Company's financial results.
The Company was served in June 1992 with a summons and complaint and,
in June 1994, with an amended complaint, in a contribution action
brought by five private plaintiffs in the United States District Court
for the Northern District of New York pursuant to the federal
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") and certain state law theories (the "Cooper Industries
action"). The plaintiffs in this action are Cooper Industries, Inc.,
Keystone Consolidated Industries, Inc., The Monarch Machine Tool Co.,
Niagara Mohawk Power Corporation and Overhead Door Corporation. The
amended complaint, which listed the Company and fourteen other persons
or entities as defendants, sought contribution or reimbursement for
response costs incurred to date, and to be incurred in the future, for
the remediation of a site in Cortland, New York known as the "Rosen
Site". Claims concerning the Rosen Site were filed against the Company
in the Bankruptcy Court by the United States Environmental Protection
Agency ("EPA"), the United States Department of the Interior ("DOI"),
the DEC, the DOH and certain plaintiffs and defendants in the Cooper
Industries action. The Company entered into a written agreement with
the United States (on behalf of the EPA and DOI), the State of New York
(on behalf of the DEC and DOH), and the five Cooper Industries
plaintiffs dated as of February 14, 1997 (the "Rosen Site Settlement").
The Rosen Site Settlement was lodged with the Bankruptcy Court on April
7, 1997. It will become effective subject to three conditions: (i)
publication by the United States of a Notice of Lodging in the Federal
Register (which occurred on April 21, 1997); (ii) a 30-day period of
public notice and comment (which will elapse on May 21, 1997); and (ii)
final approval and entry by the Bankruptcy Court, upon motion of the
United States. Pursuant to the Rosen Site Settlement, all Rosen Site-related
claims of the signing parties, including the Cooper Industries
action, will be resolved as to the Company in exchange for
consideration that includes an allowed general unsecured claim in the
Bankruptcy Proceedings. In addition, the Rosen Site Settlement
provides for a grant of judicial protection to the Company against
contribution actions or claims regarding the matters addressed therein,
including such claims of the Company's co-defendants in the Cooper
Industries action. This agreement resulted in a fiscal 1997 second
quarter charge of $250.
The Company is also a defendant or plaintiff in various other legal
actions that have arisen in the ordinary course of its business. It is
the opinion of management that the ultimate resolution of these matters
and the environmental matters discussed above will not have a material
adverse effect on the Company's financial position or results of
operation.
NOTE 4 - PENSION PLAN TERMINATION
The Company sponsored and maintained two defined benefit pension plans:
(i) The Smith Corona Corporation Hourly Employees' Retirement Plan and
SCM Office Supplies, Inc. Salaried Employees' and Hourly Employees'
Retirement Plan, as amended and restated as of December 31, 1995 (the
"Hourly Plan"); and (ii) the Smith Corona Corporation Salaried
Employees' Retirement Plan, as amended and restated as of January 1,
1994 the ("Salaried Plan")(collectively, the "Defined Benefit Plans").
Employees do not contribute to the Defined Benefit Plans.
On August 6, 1996, the Company decided to discontinue future benefit
accruals under the Defined Benefit Plans as of September 1, 1996 and to
seek termination of the Defined Benefit Plans as of October 6, 1996.
On August 7, 1996, pursuant to applicable Federal law and regulations,
the Company caused a Notice of Intent to Terminate to be issued to
affected parties under the Defined Benefit Plans. The freezing of
benefit accruals resulted in a $3,394 curtailment gain recorded in
selling, general and administrative expenses during the three months
ended September 30, 1996.
On August 23, 1996, the Company filed with the Bankruptcy Court a
Motion for Approval of Distress Termination of Pension Plans (the
"Termination Motion"). Among other things, the Termination Motion
asked the Bankruptcy Court to find that the Company met the standards
for distress termination of the Defined Benefit Plans, to approve such
a termination pursuant to applicable statutes and regulations, and to
determine the claims of the Pension Benefit Guaranty Corporation (the
"PBGC"), if any, arising from such a termination.
The PBGC opposed termination of the Defined Benefit Plans. On December
17, 1996, the Company and the PBGC executed a settlement agreement
whereby the Company withdrew its application with the PBGC to terminate
the Salaried Plan, withdrew its Bankruptcy Court motion to terminate
the Salaried Plan, and notified participants and beneficiaries that the
Salaried Plan will continue on a frozen basis, i.e., no future benefits
for plan participants will be earned. The agreement between the
Company and the PBGC also provided that the Company promptly complete
its distress termination filing with the PBGC with respect to the
Hourly Plan. Termination of the Hourly Plan resulted in the PBGC
receiving an allowed general unsecured claim in the Bankruptcy
Proceedings of $8,300. Upon final court approval, obtained on January
22, 1997, all PBGC claims with respect to the Salaried and Hourly
Plans, except the $8,300 general unsecured claim, were withdrawn and
the PBGC's objection to confirmation of the Company's POR also was
withdrawn.
NOTE 5 - INVENTORIES
A summary of inventories, by major classification and net of reserves,
is as follows:
March 31, June 30,
1997 1996
</TABLE>
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Raw materials and work-in-process $ 5,102 $ 6,180
Finished goods 7,442 10,693
Total $12,544 $16,873
</TABLE>
NOTE 6 - RESTRUCTURING COSTS
On May 8, 1995 the Company announced a major restructuring whereby the
Company's typewriter manufacturing would be relocated from its
Singapore and Batam Island, Indonesia facilities to its Mexico
facility. This action resulted in the termination of approximately
1,300 workers in Singapore and Batam Island. The Company ceased
production in Singapore and Batam Island, Indonesia in November 1995,
and relocated equipment to Mexico where typewriter production commenced
in December 1995. The Company sold certain of its Singapore machinery
and equipment for proceeds of approximately $2,333 resulting in a loss
of approximately $1,489 which was accrued as part of the fiscal 1995
restructuring charge. Additionally, the Company sold its Singapore
facility and the underlying land lease on February 8, 1996 for net
proceeds of approximately $21,041. The sale of the facility resulted
in a pretax gain of approximately $17,755 and was included in
restructuring expense (income) for the third quarter of fiscal 1996.
In addition to the relocation of typewriter manufacturing to Mexico,
the Company also eliminated approximately 180 support positions within
research and development, finance, service, distribution, selling and
marketing areas in both its Cortland, New York and New Canaan,
Connecticut locations (collectively, the "Restructuring").
Approximately $10,000 in additional annual pretax savings were realized
from elimination of these support positions. These reductions were
completed by the end of the first quarter of fiscal 1996 and resulted
in a pension curtailment gain of approximately $1,524 included in
restructuring expense (income) for the second quarter of fiscal 1996.
As a result of these actions, the Company recorded a pretax charge of
approximately $14,870 in the fourth quarter of fiscal 1995, of which
approximately $1,877 represented primarily non-cash machinery and
equipment asset write-offs, and the remainder related to employee
severance. Additionally, certain costs, primarily relating to the
shutdown of Singapore operations, of approximately $1,622 pretax, were
recognized as charges to operations as incurred during fiscal 1996 as
they do not qualify as restructuring costs.
The activity for the nine months ended March 31, 1997 in the
restructuring accrual is as follows:
Other
Severance Costs Total
June 30, 1996 balance $ 4,685 $ 320 $ 5,005
1997 Activity (1) (4,685) (320) (5,005)
March 31, 1997
balance $ - $ - $ -
(1) The severance amount of $4,685 and other costs amount of $279 were
compromised and paid on March 7, 1997 as part of the POR.
Additionally, other costs includes cash payments for liquidation of
Singapore operations amounting to $41.
NOTE 7 - CASH FLOWS
There were no borrowings or repayments under the Company's credit
facility for the nine months ended March 31, 1997. However, aggregate
borrowings amounted to $1,330,700 for the nine months ended March 31,
1996, while aggregate repayments were $1,348,100 for the same period.
NOTE 8 - BANK LOANS
On July 10, 1995, the Company entered into a Debtor-In-Possession
Credit Agreement (the "Debtor-In-Possession Credit Agreement") with its
lenders which was approved by the Bankruptcy Court on August 2, 1995.
Proceeds from the Debtor-In-Possession Credit Agreement were used to
repay amounts outstanding under the Company's Amended and Restated
Credit Agreement dated April 7, 1995 under which the Company was, as of
June 30, 1995, in technical default. The Debtor-In-Possession Credit
Agreement, as amended, provided for extensions of revolving credit
loans, term loans and letters of credit, limited to a percentage of
eligible receivables and inventories, in an amount not to exceed
$24,000 through June 30, 1996 and $10,000 from June 30, 1996 through
the termination date of March 31, 1997 or the Effective Date, whichever
was earlier. On the Effective Date, the Debtor-In-Possession Credit
Agreement terminated.
On February 28, 1997, as part of the POR, the Company entered into a
loan and security agreement (the "Loan and Security Agreement") with a
new lender. The Loan and Security Agreement provides for extensions of
revolving credit loans, term loans and letters of credit, limited to a
percentage of eligible accounts receivable and inventories in the
amount not to exceed $25,000 through the February 28, 2000 expiration
date. Interest is .75 percent over the Prime Rate or 3 percent over
the Adjusted Eurodollar Rate. Payment of dividends is prohibited by
the terms of the Loan and Security Agreement, except for non-cash
dividends pursuant to the Rights Agreement (as hereinafter described).
Pursuant to the provisions of the Loan and Security Agreement the
Company must maintain an adjusted net worth of $11,074. Management
believes that it has adequate flexibility and that such a covenant
should not impose an undue restriction on the operations of the
Company. The Loan and Security Agreement is secured by all of the
Company's assets.
NOTE 9 - STOCKHOLDERS' EQUITY
Common Stock
As of the Effective Date, the Company has authorized 100,000,000 shares
of Common Stock, par value $.001 per share. Prior to the Effective
Date the Company had authorized 90,000,000 shares of Old Common Stock.
Preferred Stock
As of the Effective Date, the Company has authorized 10,000,000 shares
of preferred stock, par value of $.001 per share. 10,000 shares of
Preferred Stock, Series A, whose terms are fixed by the Rights
Agreement, have been reserved for issuance.
Rights Agreement
On February 28, 1997, pursuant to the POR, the Board of Directors of
the Company declared a dividend distribution of one Right for each
outstanding share of Common Stock, payable to stockholders of record at
the close of business on such date and payable with respect to Common
Stock issued thereafter. Each right, when it becomes exercisable,
entitles the registered holder to purchase from the Company one one-thousandth
of a share (a "Unit") of Preferred Stock, Series A at a
purchase price of $25.50 per Unit, subject to adjustment. Initially,
the Rights will be attached to all certificates representing shares of
Common Stock, and no separate certificates evidencing The Rights will
be distributed. The Rights will separate from the Common Stock and
will be exercisable upon the earlier of (i) ten days (or such later
date as the Board of Directors shall determine) following public
disclosure that a person or group of affiliated or associated persons
has become an "Acquiring Person" (as defined below) or (ii) ten
business days (or such later date as the Board shall determine)
following the commencement of a tender offer or exchange offer that
would result in a person or group becoming an "Acquiring Person".
Except for certain claimants under the POR, for whom the percentage is
higher, an "Acquiring Person" is a person or group of affiliated or
associated persons who has acquired beneficial ownership of 15 percent
or more of the outstanding shares of Common Stock. The term "Acquiring
Person" excludes (i) the Company, (ii) any subsidiary of the Company,
(iii) any employee benefit plan of the Company or any subsidiary of the
Company or (iv) any person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such
plan. The Rights, which do not have voting rights, will expire on
February 28, 2007 unless extended or earlier redeemed by the Company.
In the event that a person becomes an Acquiring Person, each holder of
a Right will have the right to receive, upon exercise of the Right,
Common Stock having a value equal to two times the exercise price of
the Right. Rights that are owned by any Acquiring Person will be null
and void. In the event that a person has become an Acquiring Person
and the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, or
more than 50 percent of the Company's assets or earning power is sold,
each holder of a Right (except Rights which previously have been voided
as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to
two times the exercise price of the Right.
The Rights may be redeemed by the Company at a price of $.001 per Right
at any time until ten days following the date on which a person has
become an Acquiring Person.
Warrants
Also on the Effective Date, the Company issued warrants to stockholders
of record as of August 15, 1996 of the Old Common Stock. Eligible
stockholders received one warrant to purchase one share of Common Stock
for every 20 shares of the Old Common Stock held by them. The Old
Common Stock was canceled on the Effective Date. The exercise price of
the warrants has initially been set at $8.50 per share. The warrants
may be exercised at any time from August 28, 1997 to February 28, 1999.
As of March 31, 1997, there were 1,512,423 warrants issued.
Senior Officer Stock
Pursuant to the POR, the Chief Executive Officer, Chief Financial
Officer and Senior Vice President/Marketing may be granted up to 5
percent of the total shares of Common Stock which are issued under the
provisions of the POR (not including the effect of the exercise of any
of the above warrants). Rights to these shares shall not vest prior to
the earlier of the second anniversary of the Effective Date (the
"Restriction Period") or a change in control. The market value of
these shares at the date of award is reflected as deferred compensation
in Stockholders' Equity and is being amortized over the Restriction
Period. The number of shares of the Company's Common Stock awarded and
outstanding under this plan as of March 31, 1997 were 57,803.
Employee Stock Incentive Plan
Pursuant to the POR, the Company shall implement an employee stock
incentive or other similar plan, which shall provide for the issuance
of up to 10 percent of the total shares of Common Stock (or options to
acquire such shares)which are issued pursuant to the provisions of the
POR (not including the effect of the exercise of any of the above
warrants). This employee stock incentive plan has not yet been
implemented.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
With the Company experiencing sales declines and operating
losses, having extended payments to trade vendors, and needing
additional financing to meet operating requirements and fund the
Restructuring, the Company filed a voluntary petition for
reorganization under Chapter 11 of the Bankruptcy Code in the
Bankruptcy Court on July 5, 1995. On August 18, 1995, SCM
Office Supplies, Inc., SCC LI Corporation (formerly Histacount
Corporation) and Hulse Manufacturing Company, the Nonoperating
Subsidiaries, filed Chapter 11 petitions. On October 31, 1996
the Wholly-Owned Domestic Subsidiaries, Smith Corona Overseas
Holdings, Inc., SCM Inter-American Corporation and SCM (United
Kingdom) Limited, filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code.
On January 27, 1997 the Bankruptcy Court entered the
Confirmation Order and the Company emerged from the Bankruptcy
Proceedings on the Effective Date of February 28, 1997.
During the Bankruptcy Proceedings, the Company confined
expenditures to those manufacturing and operating costs that
were necessary to preserve and maintain going-concern value. In
light of its financial condition, the Company also implemented a
planned reduction in its workforce and a consolidation of its
manufacturing and distribution operations and relocated its
world headquarters from New Canaan, Connecticut to its facility
in Cortland, New York. Additionally, as part of a major
restructuring plan announced by the Company on May 8, 1995, the
Company relocated its typewriter manufacturing operations to its
Mexico facility from facilities in Singapore and Batam Island,
Indonesia.
The forward-looking comments in this Management's Discussion and
Analysis of Results of Operations and Financial Condition are
estimates by the Company's management of future performance and
are subject to a variety of risks and uncertainties that could
cause actual results to differ from management's current
expectations.
Results of Operations
Net sales of $16.9 million for the quarter ended March 31, 1997
decreased 15.6 percent from last year's third quarter net sales
of $20.0 million. For the nine month period ended March 31,
1997, net sales were $60.4 million, a 32.8 percent decrease from
last year's comparable period of $89.8 million. Overall, unit
sales of typewriters increased 4.8 percent for the quarter ended
March 31, 1997 over the same period last year, while unit sales
of personal word processors and related accessories and supplies
are lower than a year ago. For the nine month period unit sales
of typewriters, personal word processors and related accessories
and supplies are lower than a year ago, both domestically and
internationally, as a result of a shrinking market and a
continuing difficult and competitive environment. Under the
POR, the reorganized company plans to significantly expand its
product line, primarily by sourcing new products from outside
manufacturers. Such sourcing may, over time, include entering
into strategic alliances with third parties to provide products
or services. In that respect, the reorganized company will
focus its efforts on forging alliances with companies that
provide technologically advanced office products but presently
do not have a substantial United States market share or market
presence, and are intent on building or increasing market share
by selling their products under the well-known "Smith Corona"
name. The reorganized company intends to rely on its existing
distribution network to become a leading vendor of
technologically advanced office products. Further, the
reorganized company intends to maintain its core business of
manufacturing and distributing its current product line of
typewriters, personal word processors and related accessories
and supplies to satisfy continuing worldwide demand for these
products.
Gross margin, as a percentage of net sales, was 17.3 percent for
the quarter and 21.5 percent for the nine months ended March 31,
1997, as compared to 5.6 percent and 6.7 percent, respectively,
for the comparable periods last year. The margin improvement is
primarily the result of manufacturing efficiencies gained from
the Restructuring. The prior year gross margin was adversely
impacted by a second quarter charge of approximately $4.4
million for inventory-related provisions.
Selling, general and administrative expenses for the three
months and nine months ended March 31, 1997 decreased $2.2
million and $9.5 million, respectively, as compared to the prior
periods last year. The decreases reflect the overall savings in
employee-related costs as a result of the Restructuring and
reorganization efforts as well as the impact of a pension plan
curtailment gain of $3.4 million which was recorded in the first
quarter ended September 30, 1996.
The Company recorded reorganization costs for its bankruptcy
proceedings aggregating $1.2 million and $6.4 million for the
three and nine months ended March 31, 1997, respectively,
compared to $2.1 million and $8.1 million for the same periods a
year ago. These charges primarily include professional fees
attributable to the bankruptcy proceedings. On October 7, 1996
the Company announced the relocation of its world headquarters
from New Canaan, Connecticut to its facility in Cortland, New
York which resulted in a second quarter charge of approximately
$.7 million. Additionally, reorganization costs for the nine
months ended March 31, 1997 includes income from a purchase
deposit forfeiture of $.5 million, interest income earned on
domestic cash balances of $.6 million and a settlement the
Company reached with its banks relating to the Company's
debtor-in-possession financing of $.5 million.
As a result of emergence from the Bankruptcy Proceedings the
Company recognized a pre-tax and after-tax extraordinary gain of
$8.1 million for debt forgiveness in the three and nine month
periods ended March 31, 1997.
Financial Condition
The Company's primary source of liquidity and capital resources,
on both a short- and long-term basis, are cash balances, cash
flows generated from operations and available borrowing
capacity.
On February 28, 1997, the Company entered into a loan and
security agreement (the "Loan and Security Agreement") with its
lender. The Loan and Security Agreement provides for extensions
of revolving credit loans, term loans and letters of credit,
limited to a percentage of eligible accounts receivable and
inventories in the amount not to exceed $25.0 million through
the February 28, 2000 expiration date. Interest is .75 percent
over the Prime Rate or 3 percent over the Adjusted Eurodollar
Rate. Payment of dividends is prohibited by the terms of the
Loan and Security Agreement, except for non-cash dividends
pursuant to the Rights Agreement. Pursuant to the provisions of
the Loan and Security Agreement the Company must maintain an
adjusted net worth of $11.1 million. Management believes that
it has adequate flexibility and that such a covenant should not
impose an undue restriction on the operations of the Company.
The Loan and Security Agreement is secured by all of the
Company's assets.
During the nine months ended March 31, 1997, the Company's
operating activities provided $4.6 million of cash, primarily as
a result of a decrease in accounts receivable and inventories.
Accounts receivable decreased $5.0 million which is attributable
to the reduction of sales compared to the prior year.
The Company had no material commitments for capital expenditures
at March 31, 1997.
The Company believes that its cash and borrowing capabilities
will be sufficient to meet its operating cash and capital
expenditure requirements in the foreseeable future.
PART II - Other Information
Item 1. Legal Proceedings.
Information required by this item is incorporated by
reference from "Note 1 - Petition for Reorganization
Under Chapter 11 and Basis of Presentation," "Note 3 -
Contingencies" and "Note 4 - Pension Plan Termination"
in the Notes to the Consolidated Financial Statements
appearing in this Form 10-Q Quarterly Report.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2.1 Debtors' Third Amended Second Joint Plan of
Reorganization under Chapter 11 of the
United States Bankruptcy Code (incorporated
by reference to Exhibit 2.1 to the
Registrant's Annual Report on Form 10-K for
the fiscal year ended June 30, 1996 (File
No. 1-10281) (see Exhibit A included
therein).
2.2 Motion to Approve Technical Amendments to
the Debtors' Third Amended Second Joint Plan
of Reorganization, as approved by the United
States Bankruptcy Court for the District of
Delaware (incorporated by reference to
Exhibit 2 to the Registrant's Registration
Statement on Form 8-A dated January 30, 1997
(File No. 1-10281)).
3.1 Restated Certificate of Incorporation of
Smith Corona Corporation (incorporated by
reference to Exhibit 3.1 to the Registrant's
Form 8-K Current Report dated February 28,
1997 (File No. 1-10281)).
3.2 Certificate of Designation, Preferences and
Rights of Preferred Stock, Series A
(incorporated by reference to Exhibit 3.2 to
the Registrant's Form 8-K Current Report
dated February 28, 1997 (File No. 1-10281)).
3.3 By-Laws of Smith Corona Corporation
(incorporated by reference to Exhibit 3.3 to
the Registrant's Form 8-K Current Report
dated February 28, 1997 (File No. 1-10281)).
4.1 Rights Agreement between Smith Corona
Corporation and Marine Midland Bank, as
Rights Agent, dated as of February 28,
1997 (incorporated by reference to Exhibit
4.1 to the Registrant's Form 8-K Current
Report dated February 28, 1997 (File No. 1-
10281)).
4.2 Warrant Agreement between Smith Corona
Corporation and Marine Midland Bank, as
Warrant Agent, dated as of February 28,1997
(incorporated by reference to Exhibit 4.2 to
the Registrant's Form 8-K Current Report
dated February 28, 1997 (File No. 1-10281)).
10 Loan and Security Agreement by and between
Congress Financial Corporation, as Lender,
and Smith Corona Corporation, as Borrower,
dated February 28, 1997.
11 Statement Re Computation of Income (Loss)Per
Common Share
27 Financial Data Schedule
(b) Reports on Form 8-K
Three Current Reports on Form 8-K were filed with
the Commission during the third quarter of the
Company's 1997 fiscal year.
(a) The December 19, 1996 Form 8-K Current Report
disclosed under Item 5 that (i) on December 19,
1996, the Company announced the resolution of all
outstanding issues with regard to the Company's
Defined Benefit Plans and the PBGC's claim in the
Company's Bankruptcy Proceedings and (ii) the
hearing to confirm its POR was held on Wednesday,
January 22, 1997, at 2:00 P.M. in Wilmington,
Delaware.
(b) The January 27, 1997 Form 8-K Current Report
disclosed under Item 3 that on January 27, 1997,
the Bankruptcy Court confirmed the POR.
(c) The February 28, 1997 Form 8-K Current Report
disclosed under Item 5 that (i) on February 28,
1997, the POR became effective and the Company
emerged from the protection of Chapter 11 of the
Bankruptcy Code; and (ii) the Company's
Disbursing Agent began on March 7, 1997, the cash
and stock distributions to holders of allowed
claims designated in the POR.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SMITH CORONA CORPORATION
May 13 , 1997
By: /s/ John A. Piontkowski
John A. Piontkowski
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
By: /s/ Martin D. Wilson
Martin D. Wilson
Vice President/Controller
(Principal Accounting Officer)
EXHIBIT INDEX
Exhibit No. Description
2.1 Debtors' Third Amended Second Joint Plan of
Reorganization under Chapter 11 of the United
States Bankruptcy Code (incorporated by reference
to Exhibit 2.1 to the Registrant's Annual Report
on Form 10-K for the fiscal year ended June 30,
1996 (File No. 1-10281)) (see Exhibit A included
therein).
2.2 Motion to Approve Technical Amendments to the
Debtors' Third Amended Second Joint Plan of
Reorganization, as approved by the United States
Bankruptcy Court for the District of Delaware
(incorporated by reference to Exhibit 2 to the
Registrant's Registration Statement on Form 8-A
dated January 30, 1997 (File No. 1- 10281)).
3.1 Restated Certificate of Incorporation of Smith
Corona Corporation (incorporated by reference to
Exhibit 3.1 to the Registrant's Form 8-K Current
Report dated February 28, 1997 (File No. 1-10281)).
3.2 Certificate of Designation, Preferences and
Rights of Preferred Stock, Series A (incorporated
by reference to Exhibit 3.2 to the Registrant's
Form 8-K Current Report dated February 28, 1997
(File No. 1-10281)).
3.3 By-Laws of Smith Corona Corporation (incorporated
by reference to Exhibit 3.3 to the Registrant's
Form 8-K Current Report dated February 28, 1997
(File No. 1-10281)).
4.1 Rights Agreement between Smith Corona Corporation
and Marine Midland Bank, as Rights Agent, dated
as of February 28, 1997 (incorporated by
reference to Exhibit 4.1 to the Registrant's Form
8-K Current Report dated February 28, 1997 (File
No. 1-10281)).
4.2 Warrant Agreement between Smith Corona
Corporation and Marine Midland Bank, as Warrant
Agent, dated as of February 28,1997 (incorporated
by reference to Exhibit 4.2 to the Registrant's
Form 8-K Current Report dated February 28, 1997
(File No. 1-10281)).
EX-10 Loan and Security Agreement by and between
Congress Financial Corporation, as Lender, and
Smith Corona Corporation, as Borrower, dated
February 28, 1997.
EX-11 Statement RE Computation of Earnings (loss)Per
Common Share
EX-27 Financial Data Schedule
Schedule 19
LITIGATION
1. In re Smith Corona Corporation, et al., U.S.B.C. D.Del.
Docket No. 95-788 (HSB) The Corporation
and its domestic subsidiaries filed for protection under
Chapter 11 of the United States Bankruptcy Code.
See response to Question 3 of this Information Certificate.
As part of these proceedings, and pursuant to the
Plan of Reorganization confirmed by order dated January 27, 1997,
many personsand entities have asserted claims against the
Corporation. The Corporation has objected to many of such claims on a
variety of grounds.
All claims allowed and determined to be entitled to
priority under the Bankruptcy Code will be entitled to
receive payment in full in cash
under the Plan of Reorganization. All claims allowed
and determined not to be entitled to priority under the
Bankruptcy Code will receive their
pro rata share of a pool of cash set aside for such
claimants, as well as their pro rata share of 85% of the
common stock of the Corporation, and will then be
discharged.
2. Melville Site
The Corporation is involved in proceedings with the
New York Department of Environmental Conservation ("DEC"),
the Suffolk County Department of Health ("DOH") and the
United States Environmental Protection Agency ("EPA")
regarding the clean-up of a now-closed manufacturing
facility in Melville, New York (the "Melville Site") and
certain waste disposal sites in upstate New York. The
Corporation's wholly-owned subsidiary, SCC LI, formerly
known as Histacount, was a lessee of the Melville Site
beginning in June, 1989 and sublessor of the Site to HC
Delaware Acquisition Corp., now known as Histacount ("New
Histacount"), beginning in November, 1994. The Corporation
has never been an owner, operator, or lessee of the Melville
Site. Operations at the Site ceased in 1995 and the Site is
currently owned by USI Realty.
A prepetition closure plan (the "Closure Plan") was
completed and approved by the DEC for this Site in
connection with SCC LI's termination of its lease. The
Corporation performed concrete sampling on November 28,
1995, taking concrete chip samples to test
for possible chromium contamination in the concrete floor of
the former manufacturing facility located on the Site. The
Corporation has also pumped out solid wastes from a sanitary
facility (cesspool) located on the north side of the site,
as required under the Closure Plan. An agreement between
the Corporation and counsel for the DEC with respect to
additional environmental testing and certain work at the
Melville Site has been reached.
The Corporation is a party to a certain Amended and
Restated Cross-Indemnification Agreement, dated as of July
14, 1989 (the "Indemnification Agreement"), between the
Corporation and HMH. On May 30, 1996, the Corporation
formally notified HMH of possible indemnification
liabilities of HMH with respect to the Melville Site.
USI Realty has asserted administrative claims
against the Corporation in its bankruptcy proceedings with
respect to the Melville Site, alleging an entitlement to
recover costs previously incurred and to be incurred in the
future with respect to the Melville Site. The Corporation
has objected to these claims, which objection will be
determined by the Bankruptcy Court
3. Rosen Site (Cooper Industries)
In June, 1992, the Corporation was served with a
Summons and Complaint in the United States District Court
for the Northern District of New York in a private
contribution action entitled Cooper Industries, Inc. v.
Agway, Inc., 92-CV-0478, and brought pursuant to the
Federal Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA"). The plaintiffs in this action
are Cooper Industries, Inc., Keystone Consolidated
Industries, Inc., The Monarch Machine Tool Co., Niagara
Mohawk Power Corporation and Overhead Door
Corporation. The action, which lists the Corporation and
fourteen other persons or entities as defendants, seeks
contribution or reimbursement for response costs incurred to
date, and to be incurred in the future, for the
environmental remediation of a site in Cortland, New York
known as the Rosen Site ("Rosen Site"). Based on the
Corporation's records and other evidence available to it,
the Corporation does not believe that it disposed of any
hazardous substances at this site and has vigorously
contested this matter.
The United States, on behalf of the EPA and the
United States Department of the Interior ("DOI"), has
asserted claims with respect to the Rosen Site for response
costs that have been or may be incurred in the future, and
for damage to natural resources. The United States asserts
that the EPA has incurred response costs of $474,490.97 with
respect to the Rosen Site through April 30, 1995, and will
incur between $5 million and $25 million in response costs
in the future. On behalf of the DOI, the United States
claims damage to natural resources amounting to
approximately $83,000. On January 31, 1996, the Corporation
objected to the United States' claims on the Corporation
never disposed of hazardous substances, or sent such
substances for treatment, at the Rosen Site.
Parties from the Cooper Industries litigation have
asserted claims with respect to the Rosen Site against the
Corporation in the bankruptcy proceedings. Certain
plaintiffs from the Cooper Industries litigation seek the
Corporation's contribution and reimbursement of response
costs paid by these potentially responsible parties to
remediate environmental conditions at the Rosen Site, and
the reimbursement of future response costs that the
potentially responsible parties anticipate paying. Certain
defendants from the Cooper Industries litigation have sought
contribution from the Corporation in the event that they are
held liable in that action. Pursuant to its Omnibus
Environmental Objection, the Corporation seeks to have the
claims of the private parties disallowed and expunged
because (i) the claims are duplicative of the claim of the
United States; (ii) the claims are for contingent
contribution; and (iii) as the Corporation has consistently
maintained, the Corporation never arranged for the disposal
of any hazardous substances at the Rosen Site. The
claimants have filed responses to the Corporation's
objections. The Cooper Industries plaintiffs argue that
(i) a direct contingent claim brought by private parties
cannot be disallowed under 11 U.S.C. 502(e)(1)(B), (ii)
their claims do not duplicate those of the United States,
and (iii) the testimony of certain witnesses shows that the
Corporation disposed of metal turnings and other
waste that was hauled to the Rosen Site. The Cooper
Industries defendants have raised similar legal arguments.
The Corporation has agreed to terms of a settlement
with the United States, the EPA, the DOI, the States of New
York and the plaintiffs from the Cooper Industries
Litigation (collectively, the "Claimants") resolving all
claims and litigation relating to the Rosen Site. The
Claimants shall receive consideration consisting of an
allowed general unsecured claim in the Corporation's
bankruptcy case in the amount of $202,337.71, plus cash in
the amount of $47,662.29 (the "Settlement Proceeds"). The
source of the cash will be amounts held by the Corporation
and by the United States relating to certain United
States Customs Refunds. The Claimants shall take
responsibility for dividing and allocating the Settlement
Proceeds among themselves. Upon the approval of the
Stipulation and Order by the Bankruptcy Court, the
Corporation shall pay to the United States the amount of
$30,114.45, representing 50% of a disputed United States
Customs Refund previously paid to the Corporation and now in
the Corporation's
possession. The Corporation shall retain for its own
account the other 50% of the refund. This payment also
resolves all claims of the United States and the Corporation
relating to the Refund. Further, upon the approval of the
Stipulation and Order, the United States shall be entitled
to retain the amount of $17,547.81, which it presently holds
concerning another United States Customs Refunds. Pursuant
to the Stipulation, all claims respecting the Rosen Site
filed in the Corporation's bankruptcy proceedings by the
United States, by the State of New York, and by the
plaintiffs in the Litigation, shall be withdrawn with
prejudice and expunged. Further, the Cooper Industries
Litigation shall be dismissed with prejudice as against the
Corporation. Additionally, the United States and the State
of New York shall grant the Corporation contribution
protection with respect to the Rosen Site to the maximum
extent permitted by law. This contribution protection will
ef have the fect of barring any claim or litigation against
the Corporation relating to the Rosen Site that has been or
may be brought by any potentially responsible party
nototherwise covered in this settlement (including but not
limited to defendants in the Cooper Industries Litigation).
The Stipulation is subject to approval by Judge Helen
S.Balick of the United States Bankruptcy Court for the
District of Delaware.
4. Cortlandville
In February, 1987, the New York State Attorney
General, the Cortland County Board of Health, the Town of
Cortlandville and the City of Cortland, New York, commenced
an action entitled State of New York et al. v. Smith Corona
Corporation against the Corporation in the United States
District Court, Northern District of New York, pursuant to
CERCLA, with respect to ground water contamination
allegedly linked to a facility owned and operated by the
Corporation.
Pursuant to a settlement agreement in 1989, claims
against the Corporation were settled in exchange for certain
payments which were made, as well as for continuing
monitoring and remediation by the Corporation, which
monitoring and remediation still continues.
5. Groton
The Corporation entered into various consent orders
with the DEC with respect to contamination with respect to a
site located in Groton, New York owned by the Corporation
which formerly housed operations of the Corporation.
Pursuant to the consent orders, the Corporation is
undertaking certain remediation actions. As part of the
bankruptcy proceedings, claims of the DEC against the
Corporation for past costs were settled for an agreement to
make payments of $196,930 over four years, and an agreement
to pay up to $119,000 for future costs of the DEC as they
accrue.
INFORMATION CERTIFICATE OF
SMITH CORONA CORPORATION
Dated: February 28, 1997
Congress Financial Corporation
1133 Avenue of the Americas
New York, New York 10036
In order to assist you in the continuing evaluation of the
financing you are considering of Smith Corona
Corporation (the "Corporation") and to expedite the preparation
of any documentation which may be required
and to induce you to provide such financing to the Corporation,
we represent and warrant to you the following
information about the Corporation, its organizational structure
and other matters of interest to you:
1. The full and exact name of the Corporation as set forth in
its Certificate of Incorporation is: Smith
Corona Corporation
2. The Corporation uses and owns the following trade name(s) in
the operation of its business (e.g.
billing, advertising, etc.; note: do not include names which
are product names only): Smith Corona
In the event any trade name appears on an invoice, a sample
copy of such invoice is annexed. (See
schedule 2b)
3. The date of incorporation of the Corporation was September
6, 1985, under the laws of the State of
Delaware, and the Corporation is in good standing under
those laws. The Corporation has never
been involved in a bankruptcy or reorganization except:
Smith Corona Corporation filed for
Chapter 11 Reorganization on July 5, 1995. Confirmation of
a Plan of Reorganization was
approved by the U.S. Bankruptcy Court on January 27, 1997
and Smith Corona Corporation
expects to emerge from Chapter 11 shortly thereafter.
4. The Corporation is duly qualified and authorized to transact
business as a foreign corporation in the
following states and is in good standing in such states:
California
Connecticut
Colorado
Georgia
Illinois
Massachusetts
New Jersey
New York
Pennsylvania
Tennessee
Texas
Virginia
5. Since the date of incorporation, the corporate name of the
Corporation has been changed as follows:
Date Prior Name
September 6, 1985 HSCM-10 Inc.
September 12, 1986 Smith-Corona Corporation
September 17, 1986 Smith Corona Corporation
6. Since the date of incorporation, the Corporation has made or
entered into the following mergers or
acquisitions:
The Company was incorporated in 1985 in the State of Delaware.
Prior to 1986, the
businesses of the Company were operated by SCM Corporation ("SCM") which
was acquired
by Hanson PLC ("Hanson") in March 1986. At the time it was acquired,
SCM consisted of a
number of businesses, including the current business of the Company and
businesses in the
chemical, paper and food industries. Although Hanson owned the
businesses of the Company
through various subsidiaries, the typewriter and personal word processor
operations were
managed as an integrated business. On August 3, 1989, the Company
completed a registered
public offering of 14,750,000 shares of common stock, par value $.01 per
share (the "Common
Stock"), in the United States and abroad (the "Offerings"). In
connection with the Offerings,
Hanson initiated a series of transactions to combine the electronic
typewriter, personal word
processor and office supplies business under a single parent entity
being the Company. Since
that time, there have been no mergers or acquisitions.
7. The chief executive office of the Corporation is located at:
839 NYS 13, PO Box 2090, Cortland, New York 13045.
8. The books and records of the Corporation pertaining to accounts,
contract rights, inventory, etc. are
located at (if other than the chief executive office referred to in
section 7 above): 839 Route 13
South, PO Box 2090, Cortland, New York 13045
<PAGE>
9. The Corporation has other places of business and/or maintains
inventory or other assets at the
following addresses (indicate whether locations are owned, leased
or operated by third parties and if
leased or operated by third parties, their name and address):
Street Address
City, State
Lessor/Operator
a)
202 Main Street
(vacant land)
Groton, NY
Owned
b)
Av. Corporativo
No. 3 AL 11
(Factory)
Tijuana, Mexico
Inmobiliaria Mex-Hong, S.A.
De C.V.
c)
2055 Dublin Dr.
(Distribution, office)
San Diego, CA
805 Properties
d)
Office 201, Caparra Gallery
(Sales, Distribution)
Guaynabo, PR
Berwind Reality, SE
e)
17480 Dallas Pkwy, Suite 102
(Sales)
Dallas, TX
O.R.D.A. Corporation
10. The premises listed below owned by the Corporation are subject to
mortgages as follows (state name
and address of mortgagee and approximate principal balance of
mortgage):
Location Mortgagee Principal Balance
839 NYS 13 Cortland Chemical Banks, as Agent 0
11. The places of business or other locations of any assets used by the
Corporation during the last four (4)
months other than those listed above are as follows:
65 Locust Avenue New Canaan CT
Street Address City State
12. The Corporation is affiliated with, or has ownership in, the
following corporations (including
subsidiaries):
All companies named below are wholly-owned subsidiaries or
wholly-owned by subsidiaries of
Smith Corona Corporation
Chief Jurisdiction
Executive of
Ref Name Office Incorporation
(A) SCC LI Corp. Reference is made New York
State
(A) Hulse Manufacturing Company to question #7 New York
State
(A) SCM Inter-American Corporation California
(A) SCM Office Supplies Inc. Delaware
(A) SCM (United Kingdom) Limited Delaware
Smith Corona (UK) Holdings Limited United
Kingdom
Smith Corona (UK) Limited United
Kingdom
Coronashere Limited United Kingdom
(B) Smith Corona Australia Pty. Limited New
South Wales
Smith Corona (Canada) Ltd. Canada
(B) Smith Corona France S.A.R.L. France
Smith Corona GmbH Germany
Smith Corona de Mexico, S.A. de C.V. Mexico
Smith Corona International Ltd. Virgin
Islands
(A) Smith Corona Overseas Holdings, Inc. Delaware
Smith-Corona Private Limited Republic of
Singapore
(B) P.T. Smith Corona Batam Republic of
Indonesia
Smith Corona Services Pte Ltd. Singapore
Smith Corona S.A. (Belgium) Belgium
Smith Corona S.A. (France) France
(A) Entities are the subject of substantive consolidation upon the
confirmation effective date.
(B) In liquidation.
Hanson PLC beneficially owns 47.9% of the common stock of Smith
Corona Corporation (see question
#18).
13. The Federal Employer Identification Number of the Corporation is as
follows: 51-0286862
14. There is no provision in the Certificate of Incorporation or
By-laws of the Corporation, or in the laws of
the State of its incorporation, requiring any vote or consent of
shareholders to borrow or to authorize the
mortgage or pledge of or creation of a security interest in any assets
of the Corporation or any subsidiary. Such
power is vested exclusively in its Board of Directors.
15. The officers of the Corporation and their respective titles are as
follows:
Ronald F. Stengel.(1)(2).... President, Chief Executive Officer
and Director
John A. Piontkowski ........ Senior Vice President, Chief
Financial Officer and Assistant
Secretary
Thomas A. Cawley..(2)....... Vice President/Administration
and Director
Michael W. Chernago......... Vice President/Operations
Jerry L. Diener ............ Senior Vice President/Sales
Gary J. Lynch............... Vice President/Treasurer
James B. McCormick.......... Vice President/Product Management
Alfred N. Scallon .......... Vice President/International
Operations
David P. Verostko........... Vice President/Human Resources
Martin D. Wilson............ Vice President/Controller
John W. Wolff............... Vice President/Product Development
(1)W. Michael Driscoll will become President, Chief Executive
Officer upon the confirmation
effective date.
(2)Ronald F. Stengel and Thomas A. Cawley will resign as officers
of the Corporation upon the
confirmation effective date.
The following will have signatory powers as to all transactions
with the Corporation:
President, Chief Executive Officer
Senior Vice President and Chief Financial Officer
Vice President/Controller
Vice President/Treasurer
16. With respect to the officers noted above, such officers are
affiliated with or have ownership in the
following corporations (indicate name and address of affiliated
companies, type of operations, ownership
percentage or other relationship):
Ronald F. Stengel and Thomas A. Cawley are President and Vice
President, respectively, of the
firm R. F. Stengel & Co., Inc. R. F. Stengel & Co. Inc. provides
interim management services
during the bankruptcy proceedings.
17. The members of the Board of Directors of the Corporation are:
Robert Van Buren............ Chairman of the Board and Director
Ronald F. Stengel........... President, Chief Executive
Officer and Director
John A. Piontkowski ........ Senior Vice President, Chief
Financial Officer and Assistant
Secretary
Thomas A. Cawley............ Vice President/Administration
and Director
George H. Hempstead, III.... Director
Robert J. Kammerer ......... Director
John E. Lushefski .......... Director
Craig C. Sergeant .......... Director
Richard R. West ............ Director
Members of the Board of Directors will change upon the confirmation
effective date as shown below:
Jerome A. Colletti
W. Michael Driscoll
William J. Morgan
Michael J. Murray
Peter Parts
Richard N. Rosett
Ronald F. Stengel
18. The name of the stockholders of the Corporation and their stock
holdings are as follows (if stock is widely held
indicate only stockholders owning 10% or more of the voting stock):
Hanson PLC (1) 47.9%
_______
(1) Record ownership of the shares indicated is in the name of
Milleniun Chemicals, Inc. The
business address of Hanson PLC is 1 Grosvenor Place, London
SW1X 7JH, England. The
business address of Hanson Natural Resources Company is c/o
Hanson Industries, 99 Wood
Avenue South, Iselin, New Jersey 08830.
Upon the confirmation effective date, all existing common stock
will be canceled and new shares issued
to the unsecured creditors. The Pension Benefit Guarantee
Corporation is likely to own more than
10% of the voting stock.
19. There are no judgments or litigation pending by or against the
Corporation, its subsidiaries and/or affiliates or
any of its officers/principals, except as follows: See Schedule 19
20. At the present time, there are no delinquent taxes due (including,
but not limited to, all payroll taxes, personal
property taxes, real estate taxes or income taxes) except as
follows: Certain taxes incurred prior to July 5,
1995 which are subject to the bankruptcy proceedings have not been
paid. All such unpaid taxes are
treated in the Plan of Reorganization, and will be discharged upon
effectiveness of the Plan. Income
taxes owing to the Internal Revenue Service in the amount of
approximately $2.8 million will be
satisfied by issuance of a Priority Tax Note, which will bear
interest at a rate per annum equal to 9%,
and under which interest will be paid quarterly, and principal will
be paid in six equal annual
installments.
21. The Corporation's assets are owned and held free and clear of any
security interests, liens or attachments,
except as follows:
Amount of
Lienholder Assets Debt Secured
Chase Bank Secured interest reimbursement
(formerly Chemical in all Company assets obligations
Bank) under letters
of credit
22. The Corporation has not guaranteed and is not otherwise liable for
the obligations of others, except as follows
Amount of
Debtor Creditor Obligation
Smith Corona de Mexico Inmobiliaria Mex-Hong, Unliquidated-
S.A. de C.V. S.A. de C.V. lease
Obligations
23. The Corporation does not own or license any trademarks, patents,
copyrights or other intellectual property,
except as follows (indicate type of intellectual property and
whether owned or licensed, registration number,
date of registration, and, if licensed, the name and address of the
licensor): See Schedule 23
24. The Corporation does not have any deposit or investment accounts
with any bank, savings and loan or other
financial institution, except as follows for the purposes and of
the types indicated:
Bank Account No. Purpose/Type
See Schedule 24
25. The Corporation's fiscal year ends: June 30
26. With regard to any pension or profit sharing plan:
These plans will be treated as provided in the agreement between
the Pension Benefit Guaranty
Corporation and Smith Corona Corporation dated 12/17/96, a copy of
which is attached as Schedule
26.
27. Certified Public Accounts for the Corporation is the firm of:
Deloitte and Touche LLP
333 Ludlow Street
Stamford, CT 06904
Partner Handling Relationship: Andrew Wallace
Were statements uncertified for any fiscal year? No
28. Prompt written notice will be given you of any change or amendment
with respect to any of the foregoing.
Until such notice is received by you, you shall be entitled to rely
upon the foregoing in all respects.
Very truly yours,
CORPORATE SEAL TO BE
AFFIXED HEREINBELOW /S/ John A. Piontkowski
By: John A. Piontkowski
Title: Sr. VP & CFO
Schedule 2b
Copy of Smith Corona Invoice.
SCHEDULE 3.9
CERTAIN INTELLECTUAL PROPERTY MATTERS
<TABLE>
<CAPTION>
SMITH CORONA - U.S. PATENTS
T-NO. TITLE INVENTOR PAT. NO. ISSUE DATE EXPIRE
<S> <C> <C> <C> <C> <C>
T-206 DUAL SEGMENT CONT. PORTERFIELD 4131374 12/26/78 12/26/95
MOTION RIBBON FEED
MECHANISM
T-208 RIBBON FEED MECH. PORTERFIELD 4140407 02/20/79 02/20/96
RESPONSIVE TO CASE SHATTUCK
SHIFT MECHANISM
T-213 TYPEWRITER SPIRAL HOCK 4149809 04/17/79 04/17/96
DISC PRINTER
T-191 LOW SILHOUETTE DANNATT 4188137 02/12/80 02/12/97
KEYBOARD
T-216 TYPEWRITER KEY MUELLER 4191483 03/04/80 03/04/97
ACTION
T-218 PLATEN VARIABLE DEWEY 4235556 11/25/80 11/25/97
NELSON
T-214 MULTI BAR ENCODING JALBERT 4258356 03/24/81 03/24/98
APPARATUS UTILIZING
ACOUSTIC ENERGY
T-217 KEY MECHANISM LONGROD 4269521 05/26/81 05/26/98
HAVING SNAP ACTION
T-226 ACOUSTIC RIMBEY 4311991 01/19/82 01/19/99
TRANSMISSION
T-233 RELEASABLE RIBBON CAPPOTTO 4337001 06/29/82 06/29/99
LOCKING DEVICE IN A
RIBBON CARTRIDGE
T-223 ELECTRIC MOTOR ASSY HOYER 4340830 07/20/82 07/20/99
-ELLEFSEN
T-246 HALFSPACE CONTROL SMITH 4408918 10/11/83 10/11/00
SYSTEM FOR ELECTRONIC
TYPEWRITER WITH
CORRECTION REGISTER
T-280 AUTOMATIC WORD BLANCHARD 4561793 12/31/85 12/31/02
CORRECTING SYSTEM
T-290 ONE-TOUCH CHARACTER GRAY 4585362 04/29/86 04/29/03
CORRECTION AND RE-
PLACEMENT SYSTEM
T-300 SPELLING ERROR ADAMS 4855620 04/07/87 04/07/04
FINDING FEATURE GRAY
INCLUDING AN
ELECTRONIC SPELLING
DICTIONARY
T-304 RIGHT MARGIN ZONE CURLEY 4878351 07/07/87 07/07/04
HYPHENATION
T-308 TYPEWRITER LID MUELLER 4768891 09/06/88 09/06/05
ACTUATED PRINTING
ELEMENT HOMING
AND CARRIER
REPOSITIONING DEVICE
T-291 COMPACT SPELLING GRAY 4782484 11/01/88 11/01/05
-CHECK ADAMS
DICTIONARY DUNCAN
T-292 SPELLING CHECK GRAY 4783761 11/08/88 11/08/05
DICTIONARY WITH ADAMS
EARLY ERROR SIGNAL DUNCAN
T-299 WORD PROCESSOR DUNCAN 4797855 01/10/89 01/10/06
HAVING SPELLING GRAY
CORRECTOR BATTISTA
ADAPTIVE TO OPERATOR
ERROR EXPERIENCE
T-301 DICTIONARY MEMORY DUNCAN 4807181 02/21/89 02/21/06
WITH VISUAL ADAMS
SCANNING FROM A GRAY
SELECTABLE STARTING
POINT
T-314 ELECTRONIC KEYBOARD CURLEY 4828826 04/04/89 04/04/06
LONGROD
T-316 DICTIONARY MCRAE 4847766 07/11/89 07/11/06
TYPEWRITER WITH ROBERTS
CORRECTION OF
COMMONLY CONFUSED
WORDS
T-328 KEYBUTTON GUIDE CURLEY 4855548 08/08/89 08/08/06
ASSY FOR A KEYBOARD LONGROD
T-324 TAPE CASSETTE FOR MUELLER 4886383 12/12/89 12/12/06
METERING CORRECTION
T-327 RIBBON TENSIONING CAPPOTTO 4886385 12/12/89 12/12/06
MECH. TAPE FEED
T-326 PUNCTUATION CHECK MCRAE 4887920 12/19/89 12/19/06
FEATURE FOR AN ROBERTS
ELECTRONIC
TYPEWRITER
T-317 MEMORY TYPEWRITER MCRAE 4888730 12/19/89 12/19/06
WITH COUNT OF ROBERTS
OVERUSED WORDS
T-322 INK RIBBON AND MUELLER 4900171 02/13/90 02/13/07
CORRECTION TAPE CAPPOTTO
CASSETTE CAPABILITY
T-311 AUTO-REALIGNED PRINT DUNCAN 4907900 03/13/90 03/13/07
CORRECTION
T-325 THESAURUS FEATURE BLANCHARD 4923314 05/08/90 05/08/07
FOR ELECTRONIC ROBERTS
TYPEWRITERS
T-329 PLURAL CASSETTES MUELLER 4971462 11/20/90 11/20/07
HAVING COMPATIBILITY CAPPOTTO
ARRANGEMENT
T-331 PRINT CARRIER RACK LONGROD 4976556 12/11/90 12/11/07
DRIVEMENT
T-343 PLAIN PAPER CARTRIDGE CURLEY 505793 10/15/91 10/15/08
FOR FACSIMILE MACHINE
T-330 ELECTRONIC DUNCAN 5060154 10/22/91 10/22/08
TYPEWRITER OR WORD
PROCESSOR WITH
DETECTION AND/OR
CORRECTION OF
SELECTED PHRASES
T-344 THERMAL PAPER CURLEY 5060076 10/21/91 10/21/08
CARTRIDGE FOR
FACSIMILE MACHINE
T-349 THERMAL PRINT HEAD MARTINEZ 5106213 04/21/92 04/21/09
CONTROL MECHANISM CURLEY
T-362 INTEGRAL LOCKING BARON 5158382 10/27/92 10/27/09
DEVICE FOR A ANDERSON, JR.
TYPEWRITER
T-346 HINGE FOR USE WITH SHERMAN 5165145 11/24/92 11/24/09
PORTABLE ELECTRONIC
APP.
T-361 PRINTING DEVICE MARTINEZ 5174666 12/29/92 12/29/09
HAVING PRINTWHEEL MUELLER
COUPLING MEANS
T-363 PRINTING MECHANISM PAWLAK 5174671 12/29/92 12/29/92
WITH PRINT HAMMER RIMBEY
HAVING NOISE ANDERSON, JR.
DAMPENER
T-358 QUIET IMPACT RIMBEY 5183344 02/02/93 02/02/10
PRINTER MECH. PAWLAK
RODEE
T-358 QUIET IMPACT. RIMBEY 5199804 04/06/93 04/06/10
CIP PRINTER MECH PAWLAK
T-329 CASSETTE HAVING CAPPOTTO 5267803 12/07/93 12/07/10
C4 COMPATIBILITY
ARRANGEMENT
T-367 MINIATURE KEYBOARD SMILEY 5383735 01/24/95 01/24/12
DIV
</TABLE>
<PAGE>
SMITH CORONA - U.S. DESIGN PATENTS
ISSUE
T-NO. TITLE INVENTOR PAT. NO. DATE EXPIRE
TD-225 CARRYING CASE FOR A LABARBARA D259,975 07/28/81 07/28/95
TYPEWRITERS
TD-224 TYPEWRITER LABARBARA D262,036 11/24/81 11/24/95
TD-227 RIBBON CARTRIDGE CHRISTIE D265,566 07/27/82 07/27/96
CAPPOTTO
TD-238 RIBBON CARTRIDGE CHRISTIE D265,567 07/27/82 07/27/96
CAPPOTTO
TD-241 TYPEWRITER JOLLIFFE D266,674 10/26/82 10/26/96
TD-236 PRINT ELEMENT CLAXTON D266,742 11/02/82 11/02/96
CONTAINER
TD-240 CONTROL KNOB FOR JOLLIFFE D267,254 12/14/82 12/14/96
OFFICE MACHINES
TD-248 RIBBON CARTRIDGE PAONE D267,542 01/11/83 01/11/97
SHIPPING TRAY
TD-262 CONTROL KNOB FOR AN JOLLIFFE D268,846 05/03/83 05/03/97
OFFICE MACHINE
TD-260 PRINTER LABARBARA D269,346 06/14/83 06/14/97
TD-259 CASE FOR A LABARBARA D269,647 07/12/83 07/12/97
TYPEWRITER
TD-258 TYPEWRITER CLAXTON D270,070 08/09/83 08/09/97
JOLLIFFE
TD-255 TYPEWRITER METZNER D270,545 09/13/83 09/13/97
TD-273 TYPEWRITER JOLLIFFE D271,024 10/18/83 10/18/97
TD-275 TYPEWRITER JOLLIFFE D277,968 03/12/85 03/12/99
TD-278 TYPEWRITER CORNELIUS D281,253 11/05/85 11/05/99
TD-281 TYPEWRITER JOLLIFFE D281,509 11/26/85 11/26/99
TD-293 RIBBON CASSETTE CAPPOTTO D289,529 04/28/87 04/28/01
BARTOLONE
TD-297 TYPEWRITER BENSON D289,902 05/19/87 05/19/01
TD-294 TYPEWRITER LID GREENE D290,468 06/23/87 06/23/01
MCCALL
TD-303 TYPEWRITER KASPRZYCKI D301,041 05/09/89 05/09/03
TD-323 RIBBON CASSETTE MUELLER D308,070 05/22/90 05/22/04
VOUGHT
TD-319 TYPEWRITER KASPRZYCKI D308,535 06/12/90 06/12/04
VOUGHT
TD-335 PORTABLE WORD LAMPE D309,859 08/14/90 08/14/04
PROCESSOR
TD-332 HAND HELD ELECTRONIC KASPRZYCKI D310,209 08/28/90 08/28/04
DICTIONARY
TD-323 RIBBON CASSETTE MUELLER D310,384 09/04/90 09/04/04
CIP VOUGHT
TD-312 TYPEWRITER KASPRZYCKI D311,926 11/06/90 11/06/04
TD-336 PRINTER LAMPE D315,172 03/05/91 03/05/05
TD-333 TYPEWRITER PIERCE D316,558 04/30/91 04/30/05
TD-313 TYPEWRITER KASPRZYCKI D317,321 06/04/91 06/04/05
TD-334 TYPEWRITER PIERCE D317,934 07/02/91 07/02/05
TD-339 POCKET ELECTRONIC PIERCE D319,223 08/20/91 08/20/05
DICTIONARY KASPRZYCKI
TD-338 WORD PROCESSOR LAMPE D319,636 09/03/91 09/03/05
TD-348 RIBBON CASSETTE LAMPE D319,652 09/03/91 09/03/05
TD-337 TYPEWRITER KASPRZYCKI D322,087 12/03/91 12/03/05
TD-340 TYPEWRITER PIERCE D332,960 02/02/93 02/02/07
TD-353 WORD PROCESSOR LAMPE D333,830 03/09/93 03/09/07
TD-355 WORD PROCESSOR SMILEY D333,816 03/09/93 03/09/07
TD-354 PORTABLE WORD SMILEY D335,123 04/27/93 04/27/07
PROCESSOR<PAGE>
SMITH CORONA, FOREIGN PATENTS
T-NO. TITLE COUNTRY PAT. NO. ISSUE
DATE
T-223 ELECTRIC MOTOR ASSEMBLY CANADA 1156704 11/08/83
T-242 RIBBON CARTRIDGE HANDLING CANADA 1256593 11/08/83
APPARATUS
T-244 SPACEBAR TOUCH CONTROL CANADA 1150657 07/26/83
APPARATUS
T-253 REVERSE TABULATION CANADA 1193993 09/24/85
T-276 CABLE DRIVE SYSTEM CANADA 1214423 11/25/86
T-276 CABLE DRIVE SYSTEM JAPAN 2-39,989 09/09/90
T-280 AUTOMATIC WORD CANADA 1219680 03/24/87
CORRECTING SYSTEM
T-280 AUTOMATIC WORD GREAT 2156559 01/22/87
CORRECTING SYSTEM BRITAIN
T-314 ELECTRONIC KEYBOARD CANADA 1294020 07/01/92
T-322 CASSETTE COMPATIBILITY TAIWAN UM071575 02/21/92
T-322 CASSETTE COMPATIBILITY MEXICO 171119 10/01/93
T-322 CASSETTE COMPATIBILITY TAIWAN NI-42715 11/21/90
T-322 CASSETTE COMPATIBILITY CANADA 1309371 10/27/92
T-322 CASSETTE COMPATIBILITY TAIWAN UM-101630 10/12/95
T-322 CASSETTE COMPATIBILITY KOREA 66238 10/08/93
T-322 CASSETTE COMPATIBILITY JAPAN 63-215341 02/26/96
T-324 TAPE CASSETTE FOR TAIWAN NI-37536 06/26/90
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR EUROPEAN 0330777 07/17/91
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR KOREA 43988 08/30/91
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR MEXICO 164035 07/10/92
METERING CORRECTION
TAPE FEED
T-324 TAPE CASSETTE FOR SINGAPORE 1136/92 11/12/92
METERING CORRECTION
TAPE FEED
T-327 RIBBON TENSIONING MECH. KOREA 61177 05/01/92
T-327 RIBBON TENSIONING MECH. JAPAN 2057379
T-328 KEYBUTTON GUIDE ASSY CANADA 1327222 02/22/94
FOR A KEYBOARD
T-329 PLURAL CASSETTES HAVING FRANCE 0319285 03/03/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-329 PLURAL CASSETTES HAVING SINGAPORE 9390627.9 06/16/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-329 PLURAL CASSETTES HAVING GERMANY 387853.5 03/03/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-329 PLURAL CASSETTES HAVING ITALY 67608 BE-93 03/08/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-329 PLURAL CASSETTES HAVING SWITZERLAND 319285.4 03/08/93
COMPATIBILITY ARRANGEMENT
(RIBBON CASSETTE)
T-359 SYSTEM INCLUDING INK GREAT 0449392 05/18/94
RIBBON AND CORRECTION BRITAIN
TAPE CASSETTES HAVING A
COMPATIBILTY ARRANGEMENT
T-360 CORRECTION TAPE CASSETTE GREAT 448184 07/06/94
HAVING COMPATIBILITY BRITAIN
ARRANGEMENT
T-360 CORRECTION TAPE CASSETTE ITALY 70350 BE-94 10/04/94
HAVING COMPATIBILITY
ARRANGEMENT<PAGE>
SMITH CORONA, FOREIGN PATENT - DESIGN
T-NO. TITLE COUNTRY PAT. NO. ISSUE DATE
TD-323 RIBBON CASSETTE CANADA 62181 12/20/88
TD-323 RIBBON CASSETTE FRANCE 88 3447 09/08/89
TD-323 RIBBON CASSETTE GREAT 1051115 01/04/89
BRITAIN
TD-323 RIBBON CASSETTE GERMANY MR29654 06/30/88
TD-323 RIBBON CASSETTE ITALY 53758 04/02/90
TD-323 RIBBON CASSETTE JAPAN 62 7791 10/25/91
TD-323 RIBBON CASSETTE KOREA 96880 10/12/89
TD-323 RIBBON CASSETTE MEXICO 3955 11/14/90
TD-323 RIBBON CASSETTE SWITZERLAND 116899 09/26/88
TD-323CIP RIBBON CASSETTE FRANCE 88 7313 11/17/89
TD-323CIP RIBBON CASSETTE GERMANY M88030784 11/09/88
TD-323CIP RIBBON CASSETTE ITALY 57054 02/07/92
TD-323CIP RIBBON CASSETTE SWITZERLAND 117158 11/25/88
TD-348 RIBBON CASSETTE FRANCE 02 96095 05/30/91
<PAGE>
SMITH CORONA, U.S. APPLICATIONS
T-NO. TITLE S.N. FILING DATE
T-366 INTEGRAL LINEFINDER 08/144,387 11/02/93
AND RIBBON GUIDE
T-368 MINIATURE KEYBOARD 08/095,470 07/23/93
T-372 LABEL PRINTER AND TAPE 08/174,936 12/28/93
AND INK CARTRDIGE FOR
USE THEREIN
DES.
- ------
TD-373 LABEL PRINTER 29/018,252 02/02/94
TD-374 RIBBON AND TAPE CART. 29/018,262 02/02/94
<PAGE>
SMITH CORONA, FOREIGN APPLICATIONS
T-NO. TITLE COUNTRY S.N. FILING
DATE
T-314 ELECTRONIC KEYBOARD JAPAN 63-325,750 12/23/88
T-314 ELECTRONIC KEYBOARD KOREA 17,062/1988 12/20/88
T-322 CASSETTE COMPATIBILITY TAIWAN 80 212,802 07/28/88
T-324 TAPE CASSETTE FOR METERING JAPAN 63-221,514 09/06/88
CORRECTION TAPE FEED
T-327 RIBBON TENSIONING MECH. JAPAN 1-116,249 05/11/89
T-328 KEYBUTTON GUIDE ASSEMBLY JAPAN 1-46,358 02/27/89
FOR A KEYBOARD
T-331 CARRIER RACK DRIVE CANADA 2004580 12/05/89
T-331 CARRIER RACK DRIVE JAPAN 1-338862 12/28/89
T-331 CARRIER RACK DRIVE KOREA 2371990 01/08/90
T-331 CARRIER RACK DRIVE MEXICO 19029 01/05/90
T-331 CARRIER RACK DRIVE NORWAY P900067 01/08/90
T-331 CARRIER RACK DRIVE PORTUGAL 92,810L 01/09/90
T-347 RIBBON CASSETTE WITH CANADA 2031152 11/29/90
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH JAPAN 2-414792 12/27/90
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH KOREA 20522/1990 12/13/90
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH NORWAY P905335 01/07/91
INTEGRAL PAPER GUIDE
T-347 RIBBON CASSETTE WITH PORTUGAL 96466 01/11/91
INTEGRAL PAPER GUIDE
T-352 BRAKE MECHANISM FOR A CANADA 2037323 02/28/91
PIVOTABLE CHARACTER DISPLAY
T-352 BRAKE MECHANISM FOR A JAPAN 3-94696 04/01/91
PIVOTABLE CHARACTER DISPLAY
T-358CIP QUIET IMPACT PRINTER MECH. CANADA 2076992 08/27/92
T-358CIP QUIET IMPACT PRINTER MECH. JAPAN 4-265,306 09/08/92
T-358CIP QUIET IMPACT PRINTER MECH. MEXICO 92-6123 10/23/92
T-363 PRINTING MECH. WITH PRINT CANADA 2076900 08/27/92
HAMMER HAVING NOISE
DAMPENER
T-363 PRINTING MECH. WITH PRINT JAPAN 4-266,489 09/09/92
HAMMER HAVING NOISE
DAMPENER
T-363 PRINTING MECH. WITH PRINT MEXICO 92-6188 10/27/92
HAMMER HAVING NOISE
DAMPENER
T-372 LABEL PRINTER AND TAPE AND CANADA N.A. 11/17/94
INK CARTRIDGE FOR USE
THEREIN
T-372 LABEL PRINTER AND TAPE AND EUROPEAN 94308594.4 11/22/94
INK CARTRIDGE FOR USE
THEREIN
<PAGE>
SCHEDULE 2
- ----------
TRADEMARKS AND TRADEMARK LICENSES
Trade Name
- ----------
Smith Corona Corporation
Trademark License
- -----------------
SCM Office Supplies, Inc. and Ampad Corporation
July 5, 1994
TRADEMARKS
----------
A. U.S. TRADEMARKS
<TABLE>
<CAPTION>
TRADEMARK GOODS REGNO EXPIRES C_UDATE
- --------- ----- ----- ------- -------
<S> <C> <C> <C> <C>
AUTOSPELL TYPEWRITERS 1469029 2007/12/15 2007/06/
CHARACTERSWAP TYPEWRITERS/PWPS 1783432 2003/07/20 1998/07/
CITATION TYPEWRITERS 727463 2002/02/13 2001/07/
CORONA TYPEWRITERS 1807465 2003/11/30 1998/11/
CORONACOM WP PRINTED CIRCUIT BOARD 1792130 2003/09/07 1998/09/
CORONAFAX FAX MACHINES, CARRYING CASES,
KITS, PAPER FOR FAX MACHINES APPLN
CORONAFONT COMPUTER SOFTWARE FOR PRINTIN
FONTS 1667484 2001/12/10 1996/12/
CORONAJET PRINTERS 1769203 2003/05/04 1998/05/
CORONAMATIC TYPEWRITER AND TYPEWRITER 1023212
RIBBON CARTRIDGES
CORONAPRINT CORRECTION TAPES, ET AL.
FOR WPS AND TYPEWRITERS 1820586 2004/02/08 1999/02/
DESIGN (KEYBUTTON), WORDPROCESSORS 1625761
AND TYPEWRITERS
DEVILLE TYPEWRITERS 932178 2002/01/14 2001/07/
ERASE-A-WORD TYPEWRITERS 1442567SR 2007/06/09 1992/06/
EXPRESSION TYPEWRITERS APPLN
FLAT PAPER
OUTPUT FACSIMILE MACHINES APPLN
GALAXIE TYPEWRITERS 707783 2000/11/29 2000/05/
GRAMMAR-RIGHT
SYSTEM I TYPEWRITERS 1503854 2008/09/13 1993/09/
H KITS - WP & TYPEWRITER 1748229 2003/01/26 1997/07/
INKIT INK KITS FOR PRINTER CARTRIDGES APPLN
INKIT AND DESIGN INK KITS FOR PRINTER CARTRIDES APPLN
HRT PRINTERS 1810619 2003/12/14 1998/12/
IQ
IQ INTELLIGENTLY
TYPEWRITERS/WPS 1778243 2003/06/22 1998/06/
LIFT-RITE TW RIBBONS,CARTRIDGES 1214793 2002/11/02 2001/06/
LINEERASER AUTOMATIC ERASING MEANS
SOLD AS PART OF TYPEWRITER 1558632SR 1999/08/07 1994/08/
MEMORY CORRECT TYPEWRITERS 1976917
OFFICE 2000 TYPEWRITERS 1959363
PHRASE ALERT TYPEWRITER COMPONENT
SIGNALLING OPERATOR OF
MISUSED PHRASES 1624761 2000/11/27 1995/11/
PUNCTUATION
CHECK TYPEWRITERS 1578403SR 2000/01/16 1995/01/
PWP WORD PROCESSORS 1670136 2001/12/31 1996/12/
PWP START-RITE SUPPLIES FOR PWP 1479472 2008/03/08 2007/10/
PWP START-RITE KITS WP PRINT WHEELS, DATA
DISKS & CASSETTES 1800511 2003/10/26 1998/04/
RE-RITE TW RIBBON CARTRIDGES 1079860 1997/12/20 1997/06/
RIGHT RIBBON
SYSTEM WORD PROCESSORS, TYPEWRITERS
AND ACC & SUPPLIES 1583619 2000/02/20 1995/02/
SCM TYPEWRITERS AND TYPEWRITER
RIBBON CASSETTES 1873814 2005/01/17 2000/01/
SCM (tri-bar) TYPEWRITERS 738222 2002/09/25 2002/03/
SCM (tri-bar) RIBBON CARTRIDGES 1208293 2002/09/14 2002/03/
SCM (tri-bar) ELECTROSTATIC COPY PAPERS 774333 2004/08/04 2004/02/
SCM (tri-bar) TYPEWRITERS AND TYPEWRITER
RIBBON CASSETTES 1871294 2005/01/03 2000/01/
SCM OFFICE SUPPLIES 1909974
SCM (tri-bar) OFFICE SUPPLIES 1909973
SIMPLY SMART COMPUTERS 1709808 2002/08/25 1997/08/
SMITH CORONA WORD PROCESSORS 1620948 2000/11/06 1995/11/
SMITH CORONA PRINTERS 1631434 2001/01/15 1996/01/
SMITH CORONA
(LOGO) WORD PROCESSORS 1633823 2001/02/05 1996/02/
SMITH CORONA
(LOGO) TYPEWRITERS 1396799 2006/06/10 2005/12/
SMITH CORONA
(LOGO) PRINTERS 1633042 2001/01/29 1996/01/
SMITH CORONA
(LOGO) MACHINES FOR LAMINATING
DOCUMENTS 1870333 2004/12/27 1999/12/
SMITH CORONA
(LOGO) FAX MACHINES, ETC, PAPER
& SUPPLIES FOR FAX 1940192
SMITH CORONA
(LOGO) CALCULATORS 1859130
SMITH CORONA WORD PROCESSORS 1620948 2000/11/06 1995/11/
SMITH-CORONA TYPEWRITERS,ADD MACHINES 517362 2009/11/08 2009/05/
SMITH CORONA SUPPLIES/ACCESSORIES
(horizontal FOR TYPEWRITERS, WORD
form) PROCESSORS 1889075
SPELL-RIGHT I TYPEWRITERS 1529647 1999/03/14 1994/03/
TOOLS FOR
THOUGHT WPS, TYPEWRITERS, PCS 1787277 2003/08/20 1998/08/
WORKROOM OFFICE, WORK STATIONS, DESK
& COMPUTER ACCESSORIES APPLN
WORD-RIGHT WORD PROCESSOR, TYPEWRITER
COMPONENTS 1776316 2003/06/15 1998/06/
WORD-RIGHT &
DESIGN TYPEWRITERS 1410436 2006/09/23 2006/03/
WORDERASER TYPEWRITERS 1361225SR 2005/09/17 2005/03/
WORDERASER TYPEWRITER COMPONENT
FOR ERASING SPELLING ERRORS 1683757 2002/04/21 1997/04/
WORDFIND TYPEWRITERS 1428368 2007/02/10 2006/08/
WORDSWAP TYPEWRITERS/PWPS 1779404 2003/06/29 1998/06/
B. FOREIGN TRADEMARKS
Trademark INDEX# Country Goods Regno C_ud
- ----------------------------------- ------- ----- ----
SCM (tri-bar) SCM106 ARGENTINA CALCULATORS, ADDING
MACHINES 1054227 2003
SMITH-CORONA SCM111 ARGENTINA TYPEWRITERS 1053107 2003
CORONACALC SCM193 AUSTRALIA ALL GOODS IN CLASS 9 A525768 1996
CORONAMATIC SCM92 AUSTRALIA TYPEWRITERS, RIBBON
CARTRIDGES 302674 1997
RIGHT RIBBON
SYSTEM SCM133 AUSTRALIA TYPEWRITERS & PARTS APPLN
RIGHT RIBBON
SYSTEM SCM133 AUSTRALIA TYPEWRITERS, PARTS
& ACCES. APPLN
SCM (tri-bar) SCM106 AUSTRALIA TYPEWRITERS & PARTS B172444 1998
SCM (tri-bar) SCM106 AUSTRALIA TYPEWRITER REPAIR,
SERVICE, MAINTENANCE B332952 1999
SMITH CORONA SCM236 AUSTRALIA WORD PROCESSORS A521844 1996
SMITH CORONA
logo SCM229 AUSTRALIA TYPEWRITERS A560884 1996
SMITH CORONA
logo SCM229 AUSTRALIA WORD PROCESSORS &
COMPUTER HDW A560885 1998
SMITH CORONA
logo SCM395 AUSTRALIA CALCULATORS & OTHER
GOODS IN CLASS APPLN
SMITH CORONA
logo SCM416 AUSTRALIA MACHINES FOR LAMINA-
TING DOCUMENTS A606182 2000
SMITH-CORONA SCM111 AUSTRALIA TYPEWRITERS & PARTS A105164 2006
START-RITE SCM117A AUSTRALIA ALL GOODS IN CLASS 16 561034 1998
START-RITE SCM117B AUSTRALIA ALL GOODS IN CLASS 9 B55588 1997
START-RITE SCM117C AUSTRALIA SUPPLIES FOR
TYPEWRITERS & W/P A606181
IQ INTELLIGENTLY
QUIET SCM360 AUSTRIA TWS, WP SYSTEMS, ETC 147077 2002
SMITH CORONA
logo SCM229 AUSTRIA WORD PROCESSORS,
TYPEWRITERS 140341 2001
SMITH-CORONA SCM236 AUSTRIA TYPEWRITERS & WORD
PROCESSORS 034124 1995
WORDERASER SCM122 AUSTRIA TYPEWRITERS, WORD
PROCESSORS 130171 1999
CORONA SCM90 BENELUX TYPEWRITERS 72103 2000
CORONAMATIC SCM92 BENELUX TYPEWRITERS 335003 1995
H SCM191 BENELUX TYPEWRITER PARTS &
ACCESSORIES 538481 2003
IQ SERIES
INTELLIGENTLY
QUIET SCM360 BENELUX TYPEWRITERS 520111 2001
RIGHT RIBBON
SYSTEM SCM133 BENELUX ALL GOODS IN CLASSES
9 & 16 466898 1999
SCM (tri-bar) SCM106 BENELUX TYPEWRITERS, COPIERS,
CALCULATORS 072106 2002
SMITH CORONA SCM236 BENELUX WORDPROCESSORS 474890 1999
SMITH CORONA
logo SCM229 BENELUX TYPEWRITERS ETC 505484 2001
SMITH-CORONA
design SCM111 BENELUX TYPEWRITERS,
CALCULATORS 072105 2000
SMITH CORONA
design SCM416 BENELUX MACHINES FOR
LAMINATING DOCUMENTS 535836 2003
SMITH CORONA
design SCM395 BENELUX CALCULATORS 535836 2003
SPELL-RIGHT SCM33A BENELUX TYPEWRITERS 464222 1998
SPELL-RIGHT SCM33B BENELUX COMPUTERS,WORD
PROCESSORS &
TYPEWRITERS 464222 1998
SPELL-RIGHT &
design SCM33C BENELUX TYPEWRITERS &
ACCESSORIES 431230 1996
WORDERASER SCM122 BENELUX TYPEWRITERS &
ACCESSORIES 430672 1996
SCM (tri-bar) SCM106 BOLIVIA TYPEWRITERS 37465 1997
SMITH-CORONA SCM111A BOLIVIA CALCULATING MACHINES 42442 1999
SMITH-CORONA SCM111B BOLIVIA TYPEWRITERS & PARTS 42443 1999
SMITH-CORONA SCM111 BRAZIL TYPEWRITERS, PARTS
SUPPLIES, WPS &
PRINTERS 2778637 2001
CHARACTER SWAP SCM376 CANADA TYPEWRITERS/WORD
PROCESSORS APPLN
CORONAFAX SCM245 CANADA FACSIMILE MACHINES&
ACCESSORIE APPLN
CORONAFONT SCM319 CANADA COMPUTER SOFTWARE FOR
PRINTING FONTS 439983 2009
CORONAMATIC SCM92 CANADA TYPEWRITERS &
CARTRIDGES 212703 2005
CORONCALC SCM193 CANADA WORD PROCESSORS 379789 2005
H SCM191 CANADA WORD PROCESSORS APPLN
IQ INTELLIGENTLY
QUIET SCM360 CANADA TYPEWRITERS & PWPS 426936 2008
PHRASE ALERT SCM151 CANADA TYPEWRITER FEATURE 373404 2005
PRESTIGE SCM175 CANADA TYPEWRITERS 276505 1997
PWP SCM196 CANADA WORD PROCESSORS 386454 2006
RIGHT RIBBON
SYSTEM SCM133A CANADA TYPEWRITERS 363178 2004
RIGHT RIBBON
SYSTEM SCM133B CANADA WPS,RIBBON, TAPE
CASSETTES FOR APPLN
TWS & WPS
RIGHT RIBBON
SYSTEM SCM133C CANADA TYPEWRITERS 363178 2004
SCM (tri-bar) SCM106 CANADA TYPEWRITERS, ADDING
MACHINES,PHOTOCOPY 149596 1996
SMITH CORONA SCM236 CANADA WPS,COMPONENTS, ELECT
REF DEVICES 423537 2008
SMITH CORONA
Logo SCM229A CANADA TYPEWRITERS 333676 2002
SMITH CORONA
Logo SCM229B CANADA TYPEWRITERS, WORD
PROCESSORS, PARTS 427137 2008
SMITH CORONA
Logo SCM395 CANADA CALCULATORS 435689 2009
SMITH CORONA
Logo SCM416 CANADA MACHINES FOR
LAMINATING DOCUMENTS APPLN
SMITH-CORONA SCM111 CANADA TYPEWRITERS, RIBBONS, TMDA
PAPER+ 54677 2002
SPELL-RIGHT I &
design SCM33 CANADA TYPEWRITERS 328817 2002
START-RITE SCM117 CANADA PRINT/CORRECTION
RIBBONS & PRINT WHEELS356852 2003
TOMORROWS TECH-
NOLOGY AT YOUR
TOUCH SCM178 CANADA WORD PROCESSORS 393105 2006
TOOLS FOR
THOUGHT SCM351 CANADA TYPEWRITERS, W/P, PCS 422527 2008
WORDERASER SCM122 CANADA TYPEWRITERS 341784 2002
WORDSWAP SCM377 CANADA TYPEWRITERS/WORD
PROCESSORS APPLN
SCM (tri-bar) SCM106 CHILE TYPEWRITERS, PAPER 411685 2003
SMITH CORONA
logo SCM229 CHILE WORD PROCESSORS,
TYPEWRITERS 378177 2001
SMITH-CORONA SCM111 CHILE TYPEWRITERS, COPYING,
PRINTING 350316 1999
SMITH CORONA
Logo SCM229 COLOMBIA TYPEWRITERS 158737 2003
SCM (tri-bar) SCM106 COLOMBIA TYPEWRITERS 94965 1998
SMITH-CORONA SCM111 COLOMBIA TYPEWRITERS 29016 2001
29016A
SCM (tri-bar) SCM106 COSTA RICA TYPEWRITERS 26614 1997
SMITH-CORONA SCM111 COSTA RICA TYPEWRITERS & PARTS 13067 2000
SMITH-CORONA SCM111 CYPRUS TYPEWRITERS & PARTS 4550 2001
H-SERIES SCM191 DENMARK TYPEWRITER PARTS &
ACCESSORIES
IQ SERIES
INTELLIGENTLY SCM360 DENMARK TYPEWRITERS 9416/ 2002
QUIET 1992
SCM (tri-bar) SCM106 DENMARK TYPEWRITERS,+ VRO3589 2004
1964
SMITH CORONA SCM236 DENMARK WORD PROCESSORS APPLN
SMITH CORONA
logo SCM229 DENMARK WORD PROCESSORS, 07214/ 2003
TYPEWRITERS ETC 1993
SMITH-CORONA SCM111 DENMARK TYPEWRITERS,+ 353/19512000
SPELL-RIGHT SCM33 DENMARK TYPEWRITERS 3256- 1999
1990
SMITH-CORONA SCM111 DOMINICAN TYPEWRITERS, ADDING 7601 2000
REP MACHINES
SMITH CORONA
logo SCM111 ESTONIA TYPEWRITER, WPS 09811 1999
SMITH CORONA
logo SCM229 FINLAND WORD PROCESSORS,
TYPEWRITERS 129988 2003
SMITH-CORONA SCM111 FINLAND TYPEWRITERS, ADDING
MACHINES 64935 1995
CORONA SCM90 FRANCE ADDING MACHINES 1652125 2000
CORONA SCM90B FRANCE TYPEWRITERS & PARTS 1195240 2001
H SCM191 FRANCE TYPEWRITER PARTS &
ACCESSORIES 934873252003
IQ INTELLIGENTLY
QUIET SCM360 FRANCE TYPEWRITERS & PWPS 924326322002
RIGHT RIBBON
SYSTEM SCM133 FRANCE ALL GOODS IN CLASSES
9 & 16 1558288 1999
SCM (tri-bar) SCM106 FRANCE TYPEWRITERS 1589956 1999
SMITH CORONA SCM236 FRANCE WORD PROCESSORS 1584299 1999
SMITH CORONA
Logo SCM229 FRANCE TYPEWRITERS, WORD
PROCESSORS 1692649 2001
SMITH CORONA
logo SCM395 FRANCE CALCULATORS 460268 2002
SMITH CORONA
logo SCM416 FRANCE MACHINES FOR 93/
LAMINATING DOCUMENTS 478888 2003
SMITH-CORONA SCM111 FRANCE TYPEWRITERS, WORD
PROCESSORS 1584299 1999
SPELL-RIGHT SCM33 FRANCE TYPEWRITERS 1528853 1998
WORDERASER SCM122 FRANCE ALL GOODS IN CLASSES
9&16 1569351 1998
H SCM191 GERMANY TYPEWRITERS PARTS &
ACCESSORIES APPLN
SCM SMITH-CORONA SCM111A GERMANY TYPEWRITERS 857102 1996
SMITH CORONA SCM236 GERMANY WORD PROCESSORS 1179305 1996
SMITH CORONA
logo SCM229 GERMANY TYPEWRITERS & WORD
PROCESSORS 2030234 2001
SMITH CORONA
logo SCM416 GERMANY LAMINATING MACHINES
FOR DOCUMENTS 2067581 2003
SMITH CORONA
logo SCM395 GERMANY CALCULATORS, POCKET
CALCULATORS 2067581 2003
SMITH-CORONA SCM111 GERMANY TYPEWRITERS 627719 2000
H SCM191 GREECE TYPEWRITER PARTS
& ACCESSORIES APPLN
SMITH-CORONA SCM111 GREECE TYPEWRITERS,
ADDING MACHINES 47177 2001
SPELL-RIGHT SCM33 GREECE TYPEWRITERS 95160 1999
SMITH-CORONA SCM111A GUATEMALA TYPEWRITERS & PARTS 7930 2001
SMITH-CORONA SCM111B GUATEMALA ADDING MACHINES 7929 2001
CORONAMATIC SCM92 HONG KONG TYPEWRITERS & PARTS 1769 1997
SCM (tri-bar) SCM106 HONG KONG TYPEWRITERS & ADDING
MACHINES 8584/5 2002
SMITH-CORONA SCM111 HONG KONG TYPEWRITERS & ADDING 1072/
MACHINES 1949 2004
SMITH CORONA
logo SCM229 HUNGARY WORD PROCESSORS 132293 2006
SMITH-CORONA SCM111 INDIA TYPEWRITERS & PARTS 147010 2000
SMITH-CORONA SCM111 INDONESIA TYPEWRITERS & ADDING
MACHINES 85506 1997
H SERIES SCM191 IRELAND TYPEWRITERS,
ACCESSORIES & STA APPLN
SCM (tri-bar) SCM106 ISRAEL TYPEWRITERS 34228 2006
SMITH-CORONA SCM111 ISRAEL TYPEWRITERS & PARTS 34230 2006
H SCM191 ITALY TYPEWRITERS & WORD
PROCESSORS
CORONA SCM90A ITALY TYPEWRITERS & PARTS 429388 1993
IQ INTELLIGENTLY
QUIET SCM360 ITALY TYPEWRITERS & PWPS APPLN
SCM SCM109 ITALY TYPEWRITERS + VARIOUS
GOODS 264828
2000
SCM (tri-bar) SCM106 ITALY TYPEWRITERS + VARIOUS
GOODS 264830 2000
SMITH CORONA SCM236 ITALY WORD PROCESSORS 605763 1998
SMITH CORONA
Logo SCM229 ITALY TYPEWRITERS & WORD
PROCESSORS APPLN
SMITH-CORONA SCM111 ITALY TYPEWRITERS 423515
SPELL-RIGHT SCM33 ITALY ALL GOODS IN CLASES
9&16 557752 1999
WORDERASER SCM122 ITALY ALL GOODS IN CLASSES
9&16 559888 1999
SCM (tri-bar) SCM106A JAPAN ADDING MACHINES 613969 2002
SCM SCM106B JAPAN CARBON RIBBONS AND
STATIONERY 616121 ABAN
SMITH CORONA SCM236 JAPAN WORD PROCESSORS 2495000 2002
SMITH CORONA
Logo SCM395 JAPAN CALCULATORS APPLN
SMITH-CORONA SCM111 JAPAN TYPEWRITERS & PARTS 437649 2003
CORONAMATIC SCM92 KOREA TYPEWRITERS, RIBBONS,
CARTRIDG 56828 1998
GRAMMAR RIGHT
SYSTEM I SCM124 KOREA TYPEWRITERS 202081 2000
LINEERASER SCM149 KOREA TYPEWRITERS 204262 2000
PHRASE ALERT SCM151 KOREA TYPEWRITERS 204263 2000
SCM (tri-bar) SCM106 KOREA TYPEWRITERS, ADDING
MACHINES 6526 2001
SMITH-CORONA SCM111 KOREA TWS, RIBBONS &
CARTRIDGES FOR TWS 494 1994
SMITH CORONA
Logo SCM111 LATVIA TYPEWRITERS, WPS
SMITH-CORONA SCM111 LEBANON TYPEWRITERS, ADDING
MACHINES 41879 1996
SPELL-RIGHT SCM33 LIECH- COMPUTERS (WORD
PROCESSORS)
TENSTEIN 7673 2009
SMITH CORONA
logo SCM111 LITHUANIA TYPEWRITERS, WPS APPLN
H-SERIES SCM191 MEXICO TYPEWRITER PARTS &
ACCESSORIES 456209 1996
H-SERIES SCM191 MEXICO TYPEWRITER PARTS &
ACCESSORIES 456210 1996
IQ INTELLIGENTLY
QUIET SCM360 MEXICO TYPEWRITERS & PWPS 435451 1995
RIGHT RIBBON SCM133 MEXICO WORD PROCESSORS,
CASSETTES, IN 381135 2004
RIGHT RIBBON
SYSTEM SCM133 MEXICO WORD PROCESSORS 381136 2004
SCM SCM106 MEXICO TYPEWRITER RIBBONS 110702 2001
SMITH CORONA
Logo SCM229 MEXICO WORD PROCESSORS 119736 2001
SMITH CORONA
Logo SCM395 MEXICO CALCULATORS 448372 2002
SMITH CORONA
Logo SCM416 MEXICO MACHINES FOR
LAMINATING DOCUME 467275 1997
SMITH-CORONA SCM111 MEXICO TYPEWRITERS, ADDING
MACHINES 63435 2004
SMITH CORONA SCM111A MEXICO ELECTRIC TYPEWRITERS 461538 1999
SMITH CORONA SCM236 MEXICO WPS AND ELECTRONIC
COMPONENTS 461689 1999
WORDERASER SCM122 MEXICO ALL GOODS IN CLASS 9 396650/11994
SPELL-RIGHT SCM202 MONACO COMPUTERS (WORD 89.
PROCESSORS) 12768 1999
CORONAMATIC SCM92 NEW ZEALAND TYPEWRITERS & PARTS 118726 1997
SCM (tri-bar) SCM106 NEW ZEALAND TYPEWRITERS, ADDING
MACHINES 70479 1996
SMITH CORONA
logo SCM229 NEW ZEALAND WORD PROCESSORS APPLN
SMITH-CORONA SCM111A NEW ZEALAND TYPEWRITERS 98086 2006
SMITH-CORONA SCM111B NEW ZEALAND TYPEWRITERS,ELECTRIC 100085 2006
SPELL-RIGHT SCM202 NEW ZEALAND COMPUTERS, ETC. APPLN
SPELL-RIGHT SCM33 NEW ZEALAND TYPEWRITERS APPLN
IQ SERIES
INTELLIGENTLY
QUIET SCM360 NORWAY TYPEWRITERS APPLN
SCM (tri-bar) SCM106 NORWAY COPIERS, ADDING
MACHINES 61277 2002
SMITH CORONA SCM236 NORWAY WORD PROCESSORS 148501 2001
SMITH CORONA
Logo SCM229 NORWAY TYPEWRITERS, WPS &
PARTS 154460 2002
SMITH-CORONA SCM111 NORWAY TYPEWRITERS, ADDING
MACHINES 48132 1995
CORONAMATIC SCM92 PAKISTAN TYPEWRITERS & PARTS 65413 1998
SCM (tri-bar) SCM106 PAKISTAN TYPEWRITERS & PARTS 65455 1998
SMITH-CORONA SCM111 PAKISTAN TYPEWRITERS & PARTS 65412 1998
SMITH-CORONA SCM111 PARAGUAY TYPEWRITERS,
CARTRIDGES 150507 2001
SMITH CORONA SCM111A PEO.REP.
CHINA TYPEWRITERS APPLN
SMITH CORONA SCM111B PEO.REP.
CHINA WORD PROCESSORS APPLN
SMITH CORONA
Logo SCM395 PEO.REP.
CHINA COMPUTERS/CALCULATORS 691549 2003
CORONAMATIC SCM92 PHILIPPINES TYPEWRITERS & PARTS 28910 2000
SCM (tri-bar) SCM106 PHILIPPINES TYPEWRITERS & PARTS 29182 2000
SMITH CORONA SCM111 POLAND TYPEWRITERS 79458 2002
SMITH CORONA
Logo SCM229A POLAND TYPEWRITERS APPLN
H SCM191 PORTUGAL TYPEWRITER PARTS &
ACCESSORIES APPLN
IQ INTELLIGENTLY
QUIET SCM 360 PORTUGAL TYPEWRITERS & PWPS 284665N 1998
SCM (tri-bar) SCM106 PORTUGAL TYPEWRITERS 179599L 1997
SMITH CORONA SCM236 PORTUGAL WORD PROCESSORS 262064J 1997
SMITH CORONA
Logo SCM229B PORTUGAL WORD PROCESSORS 277111-K1998
SMITH CORONA
logo SCM229A PORTUGAL TYPEWRITERS 276247U 1998
SMITH-CORONA SCM111 PORTUGAL TYPEWRITERS & PARTS 179670B 1997
SPELL-RIGHT SCM33 PORTUGAL ALL GOODS IN CLASS 16 256500 1997
WORDERASER SCM122 PORTUGAL ALL GOODS IN CLASS 16 256723Y 1997
IQ INTELLIGENTLY
QUIET SCM360 ROMANIA TYPEWRITERS & PWPS APPLN
SMITH CORONA SCM111 ROMANIA TYPEWRITERS APPLN
SMITH CORONA
Logo SCM229A ROMANIA TYPEWRITERS APPLN
SMITH CORONA &
DEVICE SCM229 SAUDI
ARABIA ALL IN CLASS 16 245/60 2000
CORONA SCM90 SINGAPORE TYPEWRITERS & PARTS S/56465 1993
CORONACALC SCM193 SINGAPORE GOODS IN CLASS 9 S/789/901996
IQ SERIES
INTELLIGENTLY
QUIET SCM360 SINGAPORE IN CLASS 16 APPLN
SCM (tri-bar) SCM106 SINGAPORE TYPEWRITERS & PARTS 56466 1993
SMITH CORONA SCM236 SINGAPORE WORD PROCESSORS 854/90 1996
SMITH CORONA
Logo SCM229 SINGAPORE TYPEWRITERS S/7364/
91 2001
SMITH-CORONA SCM111 SINGAPORE TYPEWRITERS & PARTS 56467 2002
CORONA SCM90 SOUTH
AFRICA TYPEWRITERS 12/25 1996
SCM (tri-bar) SCM106 SOUTH
AFRICA TYPEWRITERS 62/0501
/1 1995
SMITH CORONA SCM236 SOUTH
AFRICA WORD PROCESSORS 90/0523 1999
SMITH-CORONA SCM111 SOUTH
AFRICA TYPEWRITERS 139/51 1994
H SCM191 SPAIN TYPEWRITERS APPLN
H SCM191 SPAIN WORD PROCESSORS APPLN
IQ INTELLIGENTLY
QUIET SCM360 SPAIN TYPEWRITERS & PWPS APPLN
SCM (tri-bar) SCM106 SPAIN TYPEWRITERS 397245 2003
SCM (tri-bar) SCM107 SPAIN ADDING MACHINES
CALCULATORS 379246 2003
SMITH CORONA SCM236 SPAIN WORD PROCESSORS 1583772 2003
SMITH CORONA
Logo SCM229 SPAIN TYPEWRITERS, WORD
PROCESSORTS 1664112 2001
SMITH-CORONA SCM111 SPAIN TYPEWRITERS 243964 1995
SPELL-RIGHT SCM33B SPAIN ALL GOODS IN CLASS 16 APPLN
SPELL-RIGHT SCM33A SPAIN TYPEWRITERS APPLN
WORDERASER SCM122A SPAIN TYPEWRITERS 1504265 2001
WORDERASER SCM122B SPAIN ALL GOODS IN CLASS 9 1504264 2000
SMITH CORONA
logo SCM229 SWEDEN ALL GOODS IN CLASSES
9/16 261384 2004
SMITH-CORONA SCM111 SWEDEN TYPEWRITERS, ADDING
MACHINES 141547 2002
SMITH CORONA SCM236 SWEDEN WORD PROCESSORS 253252 2003
CORONA SCM90 SWITZERLAND TYPEWRITERS 302645 1999
CORONAMATIC SCM92 SWITZERLAND TYPEWRITERS 267554 2003
IQ INTELLIGENTLY
QUIET SCM360 SWITZERLAND TYPEWRITERS & PWPS 400125 2001
SCM (tri-bar) SCM106 SWITZERLAND TYPEWRITERS 319239 2001
SMITH CORONA
logo SCM229 SWITZERLAND TYPEWRITERS 392201 2011
SMITH-CORONA SCM111 SWITZERLAND TYPEWRITERS, WPS,
RIBBON CARTR 381910 2009
SCM (tri-bar) SCM106 TAIWAN TYPEWRITERS & PARTS 91619 1997
SMITH CORONA SCM236 TAIWAN COMPUTERS, WORD
PROCESSORS 514665 2000
SMITH CORONA
Logo SCM229A TAIWAN TYPEWRITERS &
PRINTWHEELS FOR TWS 554694 1994
SMITH CORONA
Logo SCM229B TAIWAN WORD PROCESSORS,
PRINTWHEELS, 612722 2000
SMITH CORONA
Logo SCM229C TAIWAN SHEET FEEDERS;
CASSETTES; CORRECTION
TAPES ETC. 616446 2003
SMITH-CORONA SCM111 TAIWAN TYPEWRITERS 2715 1994
CORONAMATIC SCM92 THAILAND TYPEWRITERS & PARTS 61578 1996
IQ INTELLIGENTLY
QUIET SCM 360 THAILAND TYPEWRITERS & PWPS TM13954 2002
SMITH CORONA
Logo SCM236A THAILAND WORD PROCESSORS APPLN
SMITH CORONA
Logo SCM236B THAILAND TYPEWRITERS APPLN
SMITH-CORONA SCM111 THAILAND TYPEWRITERS 69772 1996
SMITH-CORONA
Logo SCM229 THAILAND TYPEWRITERS APPLN
SCM & DESIGN SCM106 TURKEY TYPEWRITERS,
CALCULATING MACHINES 60222 1997
SMITH-CORONA SCM111 TURKEY TYPEWRITERS,
TYPEWRITER RIBBON 60292 1997
SMITH CORONA
Logo SCM229A U.A.E TYPEWRITERS & WORD
PROCESSORS 7858 2001
SMITH CORONA
Logo SCM229B U.A.E. WORD PROCESSORS 7857 2001
SPELL-RIGHT SCM33 U.S.S.R ALL GOODS IN CLASSES
9&16 88740 1999
AUTOSPELL SCM87 U.S.S.R. ALL GOODS IN CLASSES
9/16 95466 2000
RIGHT RIBBON
SYSTEM SCM133A U.S.S.R. ALL GOODS IN CLASSES
9&16 88646 1999
RIGHT RIBBON
SYSTEM(CYRILLIC) SCM133B U.S.S.R. ALL GOODS IN CLASSES
9 & 16 96867 2000
SMITH CORONA
device SCM111 U.S.S.R. ALL GOODS IN CLASSES
9/16 88647 1999
SMITH CORONA
device(CYR) SCM229 U.S.S.R. ALL GOODS IN CLASSE
9/16 88644 1999
SPELL-RIGHT
(CYRILLIC) SCM33 U.S.S.R. TYPEWRITERS & WORD
PROCESSORS 96869 2000
WORDERASER SCM122A U.S.S.R. ALL GOODS IN CLASSES
9&16 88739 1999
WORDERASER
(CYRILLIC) SCM122B U.S.S.R. ALL GOODS IN CLASSES
9/16 96870 2000
WORDFIND SCM123A U.S.S.R. TYPEWRITERS,
WORDPROCESSORS 88645 1999
WORDFIND(IN CYR) SCM123B U.S.S.R. TYPEWRITERS, WORD
PROCESSORS, ETC. 96968 2000
WORDRIGHT SCM121 U.S.S.R. TYPEWRITERS, WORD
PROCESSORS 95467 2000
CHARACTER SWAP SCM377 UNITED
KINGDOM WORD PROCESSORS B1502090 1998
CORONA SCM90 UNITED
KINGDOM TYPEWRITERS 341299 1995
CORONACALC SCM193 UNITED
KINGDOM COMPUTERS (WORD
PROCESSORS) 1407399 1996
CORONAMATIC UNITED TYPEWRITER, ACCESSORIES 1034665
KINGDOM
IQ SERIES
INTELLIGENTLY SCM360 UNITED
QUIET KINGDOM TYPEWRITERS 1504616 1998
SCM (tri-bar) SCM106 UNITED
KINGDOM TYPEWRITERS 855595 1998
SMITH CORONA SCM111 UNITED
KINGDOM TYPEWRITERS, PARTS 695405 1999
SMITH CORONA SCM395 UNITED
KINGDOM CALCULATORS, PARTS AND
CORONAMATIC SCM191 UNITED TYPEWRITE PARTS AND B1567183/84
KINGDOM ACCESSORIES
RIGHT RIBBON SYSTEM UNITED TYPEWRITERS AND
KINGDOM ACCESSORIES
FITTINGS 1524682 1999
SMITH CORONA SCM236 UNITED
KINGDOM WORD PROCESSORS 1396565 1996
SMITH CORONA
Logo SCM229A UNITED
KINGDOM TYPEWRITERS 1472565 1998
SMITH CORONA
Logo SCM229B UNITED
KINGDOM WORD PROCESSORS 1472564 1998
SMITH CORONA
logo SCM416 UNITED
KINGDOM MACHINES FOR
LAMINATING DOCUMENTS 1540505 2000
START-RITE SCM117 UNITED
KINGDOM TW ACCESSORIES, PRINT
& CORRECTION RIBBONS 1333449 2004
WORD SWAP SCM376 UNITED
KINGDOM WORD PROCESSORS APPLN
SCM (tri-bar) VENEZUELA BUSINESS CARDS 104782-F 1998
SCM (tri-bar) SCM106 VENEZUELA TYPEWRITERS 99855-F 1997
SCM(tri-bar) SCM106 VENEZUELA TYPEWRITERS 99833-F 1997
SMITH CORONA
Logo SCM229 VENEZUELA TYPEWRITERS,
WORD PROCESSORS APPLN
SMITH-CORONA SCM111A VENEZUELA TYPEWRITERS 107491-F 1998
SMITH-CORONA SCM111B VENEZUELA TYPEWRITERS 17819-D 1998
SCM SCM106 URUGUAY TYPEWRITERS 272.638
SCM SCM109A VENEZUELA TYPEWRITERS 99834
SCM SCM109B VENEZUELA TYPEWRITERS 99818-F
SCM SCM106C VENEZUELA TYPEWRITERS 104782-F
</TABLE>
Schedule 6.5
Authorized Officers
John A. Piontkowski
Martin Wilson
Gary Lynch
Karen Pappalardo
James W. Porter
SCHEDULE 8.4
EXISTING LIENS
1. A second priority security interest in favor of the Pension Benefit
Guaranty Corporation -- all accounts
receivable, inventory, equipment, general intangibles, and real estate.
2. Cash collateral in the amount of $583,028 deposited with The Chase
Manhattan Bank, as security for
certain
undrawn letters of credit.
3. 1997 Taxes -- an item not yet payable.
4. Certain operating and capital leases of equipment.
5. Materialmen's claims not yet a lien for work done with respect to
environmental remediation.
6. Claims of creditors with respect to tooling used in the manufacturing
process outside of the United States.
7. A security interest in favor of the The Chase Manhattan Bank and Bank of
America Illinois (which security
interest does not secure indebtedness in excess of $2 million) in, among
other things, all domestic accounts
receivable, inventory, equipment, real estate and stock of certain
wholly-owned subsidiaries of Borrower, as
security for obligations under the Debtor-in-Possession Credit Agreement,
dated as of July 10, 1995.
SCHEDULE 8.8
ENVIRONMENTAL MATTERS
MATTER
1. State of New York, et al. v. SCC, Index No. 87 CV 0190
(USDC NDNY)
Thomson & Thomson
04/02/97 January 355.00 355.00 0.00 29.29
384.29
0.00 355.00 0.00 355.00 0.00 29.29
384.29
State and municipal authorities sued SCC for cleanup costs
under the Comprehensive Environmental Response Compensation
and Liability Act ("CERCLA") for groundwater contamination in
Cortlandville and Cortland, New York
Entered into settlement agreement May 12, 1989 resolving
SCC's liability to State and municipal authorities. Public
nuisance claims not released until completion of remedial
action. Pursuant to a Stipulation and Order entered into on
August 6, 1996 between SCC and the New York State Department
of Environmental Conservation ("NYDEC"), SCC remediation
obligations under the settlement agreement will survive the
bankruptcy and remedial activity will continue.
2. Groton, New York Site
NYDEC listed SCC's former operations in Groton, New York as
an inactive hazardous waste disposal site.
Consent Orders entered into with NYDEC on September 9, 1987,
September 29, 1989, and March 31, 1993; Pursuant to August 6,
1996 Stipulation with the NYDEC, SCC agreed to fulfill its
obligations under these consent orders, and its remediation
obligations will continue unaffected by the bankruptcy and
current remedial efforts will remain in full force and
effect. In settlement of the NYDEC's claim in SCC's
bankruptcy relating to the Groton Site, SCC must pay the
NYDEC $196,930 in annual installments of $50,000 in the first
through third years and a final installment of $46,930 in the
fourth year following the bankruptcy. Further, the NYDEC's
claim for future oversight costs at the site have been capped
at $119,000.
3. Rosen Superfund Site; Cooper Industries, Inc., et al. v.
Agway, Inc. et al., No. 92-CV-748 (USDC NDNY)
U.S. Environmental Protection Agency ("EPA") named SCC a
potentially responsible party (PRP") at Rosen superfund Site.
Further, private contribution action was brought against SCC
and others by parties participating in the clean-up of the
Rosen Superfund Site. SCC had used a hauler related to the
site owner, but only to haul non-hazardous waste.
SCC has always contended it has no liability with respect to
the Rosen Site. However, SCC entered into a Stipulation on
_____________, 1997, with the United States, the NYDEC, and
the Cooper Industries Plaintiffs fully and finally settling
any obligations it may have with respect to the site, for an
allowed general unsecured claim in SCC's bankruptcy and some
cash consideration (collectively, totalling approximately
$250,000). Stipulation is currently subject to public review
and comment period and approval by the Bankruptcy Court.
Defendants in Cooper Industries action still have claims
against SCC in the Bankruptcy case. However, pursuant to the
Stipulation, SCC will be given full contribution protection
by the United States pursuant to CERCLA.
4. Quanta Resources Site
Named a PRP by EPA at Quanta Resources site in Syracuse, New
York, to which SCC allegedly sent hazardous waste for
disposal.
Any liability of SCC to the State of New York was fully
liquidated by August 6, 1996 Stipulation with the NYDEC, in
which NYDEC was given a $24,500 general unsecured claim in
full and complete satisfaction for SCC's obligations at eight
different sites. On August 30, 1996, SCC was informed by EPA
that it intends to perform additional removal/response action
at the Site. However, EPA asserted no claim in SCC's
bankruptcy proceedings. SCC believes its liability at the
site is, if anything, de minimis.
5. Melville Site
Site located on Walt Whitman Road in Melville, New York.
SCC's former subsidiary, Histacount, was a lessee and
sublessor of the Melville Site. Operations at the site
ceased in 1995. Site currently owned by USI Realty.
On November 21, the NYDEC and the Suffolk County Department
of Health issued to SCC a certificate of closure with respect
to the site.
Current landlord, USI Realty, has filed a claim against SCC
for indemnification with respect to the site. SCC does not
intend to assume any obligations or liabilities with respect
to the site, and SCC's liability at the site will be finally
and fully liquidated upon resolution of USI's claim.
6. Fisher Kalo Site
Superfund Site located in Indiana.
SCC has signed an amendment to a consent decree shielding it
from any further liability with respect to the site.
7. Onondaga Lake Site
Located in the greater Syracuse, New York metropolitan area.
In June 1996, SCC received an inquiry from the EPA and NYDEC
regarding manufacturing activity at a former Syracuse, New
York plant closed in 1961. SCC does not believe that it
possesses any corporate records that indicate that it
polluted or contributed to pollution at Onondaga Lake through
its former Syracuse manufacturing facility. SCC believes
that any liability at this site, if any, is purely de
minimis.
<PAGE>
SCHEDULE 9.9
EXISTING INDEBTEDNESS
1. A Priority Tax Note payable to the Internal Revenue Service in the
approximate amount of $2.85 million.
2. Obligations in connection with undrawn letters of credit in the
face amount of $555,265.
3. Obligations of Borrower to pay administrative, priority, secured
and reclamation claims under the Third Amended Second Joint Plan of
Reorganization.
4. Obligations under certain operating and capital leases of
equipment.
Schedule 9.9
Rights Agreement
Rights Agreement between Smith Corona Corportation and Marine Midland
Bank, as Rights Agent, dated as of
February 28, 1997 (incorporated by reference to Exhibit 4.1 to the
Registrant's Form 8-K Current Report dated
February 28, 1997 (File No. 1-10281)).
EXHIBIT B
TO
PATENT COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
LICENSES
1. Agreement with Microlytics, Inc. dated February 24, 1989
2. Agreement with IBM Information Products Corporation dated March 22,
1991
3. Agreement with IBM Corporation dated January 1, 1993
EXHIBIT B
TO
TRADEMARK COLLATERAL ASSIGNMENT
AND SECURITY AGREEMENT
LICENSES
1. Agreement between SCM Office Supplies, Inc. and Ampad Corporation
dated July 5, 1994
Exhibit 11
SMITH CORONA CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME (LOSS)
PER COMMON AND COMMON EQUIVALENT SHARE
Three months ended Nine months ended
March 31, 1997 March 31, 1997
Primary PRIMARY
FULLY DILUTED Fully Diluted
<TABLE>
<S> <C> <C> <C> <C>
Net income
available to common:
Income (loss) before
extraordinary gain
$(3,186,000) $(3,186,000) $(5,737,000) $(5,737,000)
Adjustments:
(1) Assumed exercise of
warrants
(a) (a) (a) ( a)
Total income (loss)
before extraordinary gain
(3,186,000) (3,186,000) (5,737,000) (5,737,000)
Extraordinary gain
8,122,000 8,122,000 8,122,000 8,122,000
Net Income
$ 4,936,000 $ 4,936,000 $ 2,385,000 $ 2,385,000
Shares:
Weighted average common
shares outstanding
2,214,786 2,214,786 2,214,786 2,214,786
Adjustments:
(1) Assumed exercise of
restricted stock awards
34,390 33,788 34,390 33,788
(2) Assumed exercise of
warrants
(a) (a) (a) (a)
Total Shares
2,249,176 2,248,574 2,249,176 2,248,574
Income (loss) per
common and common
equivalent share:
Income (loss) before
extraordinary gain
$(1.42) $(1.42) $(2.55) $(2.55)
Extraordinary gain
3.61 3.61 3.61 3.61
Net income per common
and common equivalent
share
$2.19 $2.19 $1.06 $1.06
</TABLE>
(a) Warrants are not reflected in per share calculations because exercise
price of warrants exceeds
market price of Common Stock. Additionally, warrants do not
become exercisable until August 28, 1997.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE MARCH 31, 1997 CONSOLIDATED FINANCIAL STATEMENTS FILED WITH THIS
QUARTERLY REPORT FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 22259
<SECURITIES> 0
<RECEIVABLES> 13116
<ALLOWANCES> 889
<INVENTORY> 12544
<CURRENT-ASSETS> 50269
<PP&E> 32872
<DEPRECIATION> 20703
<TOTAL-ASSETS> 63000
<CURRENT-LIABILITIES> 21081
<BONDS> 0
3
0
<COMMON> 0
<OTHER-SE> 21416
<TOTAL-LIABILITY-AND-EQUITY> 63003
<SALES> 60354
<TOTAL-REVENUES> 60354
<CGS> 47396
<TOTAL-COSTS> 47396
<OTHER-EXPENSES> 150
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (98)
<INCOME-PRETAX> (5691)
<INCOME-TAX> 46
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 8122
<CHANGES> 0
<NET-INCOME> 2385
<EPS-PRIMARY> 1.06
<EPS-DILUTED> 1.06
</TABLE>
