<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: SEPTEMBER 6, 1996
INSILCO CORPORATION
(Exact Name of Registrant as specified in its charter)
DELAWARE 0-22098 06-0635844
(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation or organization) Identification Number)
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(Address, including zip code, and telephone number
including area code of Registrant's
principal executive offices)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 3, 1996, Insilco Corporation (the "Company") through its wholly
owned subsidiary, Rolodex Corporation, sold Curtis Manufacturing Co., Inc.
("Curtis"), its computer accessories business, to Esselte Corporation, a
subsidiary of Esselte AB, Stockholm, Sweden ("Esselte") for estimated net
proceeds of approximately $6.3 million after payment of transaction costs and
subject to adjustment for certain post closing items, which will be utilized to
reduce the outstanding principal on the Company's bank term loan.
The aggregate purchase price was arrived at by arm's-length negotiations
between the Company and Esselte. There was no material relationship between
Esselte and the Company or any of the Company's affiliates, directors or
officers, or any associate of any director or officer of the Company.
The Company's press release issued September 3, 1996 regarding this
transaction is attached as an exhibit to this report and is incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
The following unaudited pro forma condensed consolidated statement
are filed with this report:
<TABLE>
<S> <C>
Pro Forma Condensed Consolidated Balance Sheet as of June 30, 1996.....................Page F-1
Pro Forma Condensed Consolidated Statements of Operations
Six Months Ended June 30, 1996................................................Page F-2
Year Ended December 31, 1995..................................................Page F-3
</TABLE>
The following pro forma unaudited condensed consolidated balance
sheet as of June 30, 1996, presents the estimated impact of the sale
of Curtis as discussed in Item 2 on the Company's consolidated
financial position assuming such sale had occurred at June 30, 1996.
The following pro forma unaudited condensed consolidated statements
of operations for the six months ended June 30, 1996 and the year
ended December 31, 1995 present the estimated impact of the sale of
Curtis on the Company's historical consolidated statements of
operations if such sale had occurred at the beginning of the
applicable period. The nonrecurring transactions related directly to
the sale are excluded from the pro forma statements of operations.
The significant assumptions utilized for the pro forma financial
statements include: (i) net proceeds totaling $6.3 million; (ii) the
net proceeds of $6.3 million will be utilized to reduce the
outstanding debt described above; (iii) the interest rates for the
outstanding debt are based upon the weighted average rates during
the applicable periods; (iv) income tax expense (benefit)
attributable to the pro forma transactions is provided at the
statutory tax rate.
2
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The unaudited pro forma condensed consolidated financial statements
have been prepared by the Company based upon assumptions deemed
proper. The unaudited pro forma condensed consolidated financial
statements presented herein are shown for illustrative purposes only
and are not necessarily indicative of the future financial position
or future results of operations of the Company, or of the financial
position or results of operations of the Company that would have
actually occurred had the transaction been in effect as of the date
or for the periods presented. In addition, it should be noted that
the Company's financial statements will reflect the disposition only
from September 3, 1996, the Closing Date.
The unaudited pro forma condensed consolidated financial statements
should be read in conjunction with the historical financial
statements and related notes of the Company.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
2(i) Stock Purchase Agreement, dated as of
September 3, 1996, between the Company's
subsidiary and Esselte Corporation.
20 Press release of the Company issued
September 3, 1996.
</TABLE>
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.
INSILCO CORPORATION
------------------------------
Registrant
Date: September 6, 1996 By: /s/ JAMES D. MILLER
-----------------------------
James D. Miller
Executive Vice President
3
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EXHIBIT INDEX
Exhibit No. Description Page
2(i) Stock Purchase Agreement, dated as of
September 3, 1996, between the Company's
subsidiary and Esselte Corporation.
20 Press release of the Company issued
September 3, 1996.
4
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INSILCO CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 1996
(In thousands)
<TABLE>
<CAPTION>
Adjustment to
Record Sale of
Curtis and
Debt
Historical Reductions Pro Forma
---------- ---------- ---------
(1)
<S> <C> <C> <C>
ASSETS
------
Current assets:
Cash and cash equivalents $ 10,908 -- 10,908
Trade receivables, net 86,511 (4,175) 82,336
Other receivables 6,998 124 7,122
Inventories 77,710 (3,433) 74,277
Deferred tax asset 8,581 -- 8,581
Prepaid expenses 8,576 (310) 8,266
-------- ------ -------
Total current assets 199,284 (7,794) 191,490
Property, plant and equipment 93,516 (975) 92,541
Deferred tax asset 21,140 -- 21,140
Other assets 31,704 (48) 31,656
-------- ------ -------
Total assets $345,644 (8,817) 336,827
======== ====== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt $ 21,656 -- 21,656
Current portion of other long-term obligations 7,160 -- 7,160
Accounts payable 36,495 (1,236) 35,259
Accrued expenses and other 62,817 (1,035) 61,782
-------- ------ -------
Total current liabilities 128,128 (2,271) 125,857
Long-term debt 171,725 (6,300) 165,425
Other long-term obligations 43,500 -- 43,500
Stockholders' equity 2,291 (246) 2,045
-------- ------ -------
Total liabilities and stockholders' equity $345,644 (8,817) 336,827
======== ====== =======
</TABLE>
F-1
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INSILCO CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Six Months Ended June 30, 1996
(In thousands, except share data)
<TABLE>
<CAPTION>
Pro Forma Adjustments to
Record Sale of Curtis
------------------------
Historical Operations Interest Pro Forma
---------- ---------- -------- ---------
(2) (3) (4)
<S> <C> <C> <C> <C>
Sales $ 300,497 (8,278) -- 292,219
Cost of products sold 202,752 (5,752) -- 197,000
Depreciation 8,058 (267) -- 7,791
Selling, general and administrative expenses 56,773 (2,500) -- 54,273
Amortization of intangibles 29 -- -- 29
---------- ------ --- ---------
Operating income 32,885 241 -- 33,126
---------- ------ --- ---------
Other income (expense):
Interest expense (9,400) -- 217 (9,183)
Interest income 460 -- -- 460
Other income (expense), net 3,104 8 -- 3,112
---------- ------ --- ---------
(5,836) 8 217 (5,611)
---------- ------ --- ---------
Income before income taxes 27,049 249 217 27,515
Income tax expense (9,098) (96) (84) (9,278)
---------- ------ --- ---------
Net income $ 17,951 153 133 18,237
========== ====== === =========
Net income per common share and common
share equivalents $ 1.81 1.84
========== =========
Weighted average number of common shares
outstanding and common share equivalents 9,908,973 9,908,973
========== =========
</TABLE>
F-2
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INSILCO CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Condensed Consolidated Statement of Operations
Year Ended December 31, 1995
(In thousands, except share data)
<TABLE>
<CAPTION>
Pro Forma Adjustments to
Record Sale of Curtis
------------------------
Historical Operations Interest Pro Forma
---------- ---------- -------- ---------
(3) (4)
<S> <C> <C> <C> <C>
Sales $ 561,203 (19,539) -- 541,664
Cost of products sold 385,720 (14,044) -- 371,676
Depreciation 14,758 (554) -- 14,204
Selling, general and administrative expenses 97,736 (8,436) -- 89,300
Nonrecurring charges 6,200 (1,000) -- 5,200
Amortization of intangibles 32,172 -- -- 32,172
----------- ------- ---- ----------
Operating income 24,617 4,495 -- 29,112
----------- ------- ---- ----------
Other income (expense):
Interest expense (19,546) -- 458 (19,088)
Interest income 1,577 -- -- 1,577
Other income (expense), net 12,126 1,636 -- 13,762
----------- ------- ---- ----------
(5,843) 1,636 458 (3,749)
----------- ------- ---- ----------
Income before income taxes 18,774 6,131 458 25,363
Income tax expense (16,199) (2,360) (176) (18,735)
----------- ------- ---- ----------
Net income $ 2,575 3,771 282 6,628
=========== ======= ==== ==========
Net income per common share and common
share equivalent $ 0.25 0.65
=========== ==========
Weighted average number of common shares
outstanding and common share equivalents 10,132,174 10,132,174
=========== ==========
</TABLE>
F-3
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The notes to the pro forma unaudited condensed consolidated statements of
operations and balance sheet follow:
(1) To record the sale of Curtis as of June 30, 1996 including the
resulting loss of $0.2 million. In addition, the estimated net
proceeds of $6.3 million are utilized to reduce the Company's
outstanding debt.
(2) The 1995 $1.0 million nonrecurring charge relates to a provision for
the discontinuance of a product line. In addition, during 1995 Curtis
recorded a provision for approximately $1.3 million relating to the
writedown of excess and obsolete inventory, $1.0 million for a
valuation allowance for customers returns and uncollectible accounts
receivable, $0.8 million relating to a major customer program expected
to benefit future periods and $0.4 million for transition and legal
expense.
(3) To record the effect on sales and costs and expenses assuming Curtis
was sold at the beginning of the period presented.
(4) To record the reduced interest expense and related income tax expense,
as applicable, assuming the net proceeds of $6.3 million was applied
to reduce the Company's outstanding debt at the beginning of the
period.
F-4
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EXHIBIT 2(i)
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
September 3, 1996, between Rolodex Corporation, a Delaware corporation (the
"Seller"), and Esselte Corporation, a New York corporation (the "Purchaser"),
W I T N E S S E T H:
WHEREAS, Curtis Manufacturing Co., Inc., a New Hampshire
corporation (the "Subsidiary"), is a wholly owned subsidiary of the Seller; and
WHEREAS, the Seller is the owner of 474 shares of common
stock, without par value (the "Common Stock"), of the Subsidiary (the
"Shares"), and the Shares constitute all the issued and outstanding shares of
Common Stock of the Subsidiary; and
WHEREAS, the Purchaser desires to acquire the Shares from the
Seller, and the Seller desires to sell the Shares to the Purchaser, upon the
terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants, agreements and conditions
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
The terms set forth below in this Article I shall have the
meanings ascribed to them below or in the part of this Agreement referred to
below:
1.1. Accountant: KPMG Peat Marwick.
1.2. Agreement: as defined above in the preamble.
1.3. Assets: (a) as at the Balance Sheet Date, the assets of the
Subsidiary disclosed on the Balance Sheet, consisting of cash and cash
equivalents, accounts receivable (net of reserves applicable thereto),
inventory (net of reserves applicable thereto), prepaid assets, and fixed
assets (net of accumulated depreciation thereon) but excluding rent deposits;
and (b) as at the Closing Date,and for purposes of preparing the Closing
Balance Sheet, the assets of the Subsidiary consisting of cash and cash
equivalents, accounts receivable (net of reserves applicable thereto),
inventory (net of reserves applicable thereto), prepaid assets, and fixed
assets
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(net of the accumulated depreciation applicable to fixed assets as at the
Balance Sheet Date) of the Subsidiary, and excluding rent deposits.
1.4. Balance Sheet: the unaudited balance sheet of the Subsidiary as
at the Balance Sheet Date and attached hereto as Exhibit A.
1.5. Balance Sheet Date: June 30, 1996.
1.6. Best Efforts: a party's best efforts in accordance with
reasonable commercial practice and without the incurrence of unreasonable
expense.
1.7. Charter Documents: with respect to any corporation, the articles
or certificate of incorporation and by-laws of such corporation.
1.8. Claim Notice: as defined in Section 9.4(A).
1.9. Closing: as defined in Article III.
1.10. Closing Balance Sheet: the unaudited balance sheet of the
Subsidiary as at the Closing Date, prepared using the same accounting
principles, practices and procedures that were used to prepare the Balance
Sheet, applied in a manner consistent therewith.
1.11. Closing Date: as defined in Article III.
1.12. Code: the Internal Revenue Code of 1986, as amended.
1.13. Consolidated Returns: the consolidated federal income tax
returns of the Insilco Group.
1.14. Credit Agreement: the Credit Agreement dated as of October 21,
1994 among Insilco, as borrower, the Lenders and Issuing Banks from time to
time parties thereto, and Citicorp USA, Inc., as Agent, as amended to date.
1.15. Curtis Data: as defined in Section 9.1.
1.16. Effective Time: as defined in Article III.
1.17. Election Period: as defined in Section 9.4(A).
1.18. ERISA: the Employee Retirement Income Security Act of 1974, as
amended.
1.19. Excess Receivables: as defined in Section 2.4
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1.20. Exchange Act: the Securities Exchange Act of 1934, as amended.
1.21. Financial Statements: the financial statements described in
Section 4.1(F).
1.22. Fixed Assets: the tangible physical property, equipment and
computer software of the Subsidiary described in Section 4.1(F).
1.23. GAAP: generally accepted accounting principles, consistently
applied throughout the applicable period.
1.24. Indemnified Party: as defined in Section 9.4(A).
1.25. Indemnitee: as defined in Section 9.4(B).
1.26. Indemnity Notice: as defined in Section 9.4(D).
1.27. Independent Accountant: any nationally recognized certified
public accounting firm mutually agreed to by the Seller and the Purchaser.
1.28. Insilco: Insilco Corporation, a Delaware corporation.
1.29. Insilco Affiliate: any person that directly or indirectly,
through one or more intermediaries, controls or is controlled by or is under
common control with Insilco, including Seller; provided, however, that the term
Insilco Affiliate shall not refer to the Subsidiary.
1.30. Insilco Group: the affiliated group of corporations, as defined
in Section 1504(a) of the Code, of which Insilco is the common parent.
1.31. Intercompany Debt: as of any date, the indebtedness of the
Subsidiary to Insilco or any Insilco Affiliate (including therein the tax
expense or credit allocable to Subsidiary).
1.32. Liabilities: (a) as at the Balance Sheet Date, the liabilities
of the Subsidiary disclosed on the Balance Sheet, excluding the Retained
Liabilities and the Intercompany Debt; and (b) as at the Closing Date and for
purposes of preparing the Closing Balance Sheet, the liabilities of the
Subsidiary, excluding the Retained Liabilities and Intercompany Debt, prepared
on a basis consistent with the Balance Sheet in accordance with GAAP.
1.33. License: the limited trademark license granted to the Subsidiary
by Insilco, as set forth in Section 6.1(E), substantially in the form attached
as Exhibit C.
1.34. Loss: as defined in Section 9.2(A).
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1.35. Material Adverse Effect: any material adverse effect on the
business, financial condition or results of operations, as applicable, of (a)
the Subsidiary or (b) the Purchaser.
1.36. NASD: National Association of Securities Dealers, Inc.
1.37. Net Book Value: as of any date, Assets minus Liabilities.
1.38. Plans: as defined in Section 4.1(L).
1.39. Purchase Price: as defined in Section 2.2.
1.40. Purchase Price Adjustment: as defined in Section 2.3(B).
1.41. Purchaser Indemnified Loss: as defined in Section 9.2(A).
1.42. Retained Employees: as defined in Section 8.1.
1.43. Retained Liabilities: liabilities of the Subsidiary to be
retained by Seller as identified in Schedule 1.43.
1.44. Retained Assets: assets of the Subsidiary to be dividended to
Seller immediately prior to Closing as identified in Schedule 1.44.
1.45. Schedule: a schedule to this Agreement.
1.46. Security Documents: collectively, the Loan Documents (as such
term is defined in the Credit Agreement).
1.47. Seller Indemnified Loss: as defined in Section 9.2(B).
1.48. Seller's Computations: as defined in Section 2.3(A).
1.49. Shares: as defined in the preamble.
1.50. Subsidiary: as defined in the preamble.
1.51. Subsidiary Guaranty: the guaranty made by the Subsidiary, as of
October 21, 1994, to secure the borrowings of Insilco under the Credit
Agreement.
1.52. Subsidiary Liens: all liens and security interests on properties
of the Subsidiary which secure the obligations of the Subsidiary under the
Subsidiary Guaranty or the obligations of the Seller under the Credit
Agreement.
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1.53. Taxes: (a) all federal, foreign, state or local net or gross
income (whether measured by or based on income), gross receipts, sales, use, ad
valorem, valued-added, franchise, withholding, payroll, employment, excise,
property or similar taxes, assessments, duties, fees, levies or other
governmental charges, together with any interest thereon, any penalties,
additions to tax or additional amounts with respect thereto and any interest in
respect of such penalties, additions or additional amounts and (b) liability
for the payment of any consolidated tax, including any interest thereon, any
penalties, additions to tax or additional amounts with respect thereto and any
interest in respect of such penalties, additions or additional amounts, of the
type described in clause (a) of this definition, including any federal,
foreign, state or local consolidated income tax liability, together with any
interest thereon, any penalties, additions to tax or additional amounts with
respect thereto and any interest in respect of such penalties, additions or
additional amounts, as a result of being a member of, and which may be imposed
upon, the Insilco Group.
1.54. Third Party Claim: as defined in Section 9.4(A).
1.55. Threshold Amount: as defined in Section 9.2(A).
1.56. UCC: the Uniform Commercial Code as the same may be, from time
to time, in effect in the State of New York.
ARTICLE II
PURCHASE AND SALE
2.1 THE SALE. On the terms and subject to the conditions of this
Agreement, at the Closing the Seller will sell, assign, transfer and deliver to
the Purchaser, and the Purchaser will purchase and acquire from the Seller, the
Shares. To effect the sale of the Shares, the Seller will deliver to the
Purchaser one or more stock certificates representing the Shares and duly
endorsed in blank for transfer or with duly executed stock powers attached.
2.2 PURCHASE PRICE. The purchase price to be paid by the Purchaser for
the Shares shall be $6,391,813.50 (the "Purchase Price"), adjusted pursuant to
Section 2.3. The Purchaser shall pay the Seller the Purchase Price at Closing
by wire transfer in immediately available funds to the account or accounts
specified in writing by the Seller to the Purchaser.
2.3 PURCHASE PRICE; POST-CLOSING ADJUSTMENT. The Purchase Price shall
be adjusted from the dollar amount stated in Section 2.2 to reflect any change
in Net Book Value from the Balance Sheet Date to the Closing Date as provided
in this Section 2.3. Net Book Value as of the Closing Date shall be determined
as follows:
(A) The Seller shall prepare and deliver to the Purchaser,
within 60 days of the Closing Date, (i) the Closing Balance Sheet,
(ii) the Seller's calculation of Net Book
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Value as derived from the Closing Balance Sheet and (iii) the
resulting adjustment to the Purchase Price to be made pursuant to
Section 2.3(B) (collectively, the "Seller's Computations"). The
Seller's Computations shall be conclusive and binding upon the Seller
and the Purchaser, absent manifest error. The Purchaser shall have
seven (7) days after receiving the Seller's Computations to object to
any manifest error therein. If the Purchaser does not object by
written notice to the Seller within such seven (7) days, the Purchaser
shall be deemed to have accepted and agreed to the Seller's
Computations. If the Purchaser objects to the Seller's Computations
within such time period, then within seven (7) days after such
objection is received by the Seller, the Seller (a) may accordingly
revise the Seller's Computations, which shall be binding upon and
deemed to be agreed to by the Seller and the Purchaser, or (b) direct
the Independent Accountant to review the Seller's Computations, and
determine whether such error exists. The fees and expenses of the
Independent Accountant relating to such review and determination shall
be shared equally by the Purchaser and the Seller. The Independent
Accountant's determination shall be made within thirty (30) days after
the date that the Independent Accountant receives the Seller's
Computations, and such determination shall be final and binding on the
Purchaser and the Seller.
(B) The Purchase Price will be, as determined by the
procedure set forth in Section 2.3(A), (i) increased by the amount by
which Net Book Value as of the Closing Date exceeds the Net Book Value
as of the Balance Sheet Date or (ii) decreased by the amount by which
the Net Book Value as of the Balance Sheet Date exceeds Net Book Value
as of the Closing Date, as applicable (the "Purchase Price
Adjustment").
(C) The Purchaser or the Seller, as applicable, shall pay the
Purchase Price Adjustment to the other party by wire transfer in
immediately available funds on or before the fifth day following the
final determination thereof.
2.4 COLLECTION OF EXCESS RECEIVABLES. The Seller will cause a report
of the Subsidiary's account receivables to be created as at Closing identifying
all accounts receivable. The Purchaser will use its Best Efforts to collect the
accounts receivable. Purchaser has discounted Seller's accounts receivable by
$546,000 more than Seller's reserves for doubtful accounts. If Purchaser
collects more in respect of the accounts receivable than the stated value of
the accounts receivables at Closing, less Seller's reserves applicable thereto
and less Purchaser's additional discount of $546,000, the Purchaser shall remit
to the Seller 50% of the excess collections (the "Excess Receivables").
Seller's share of the Excess Receivables will be remitted to the Seller
promptly after Purchaser's receipt thereof, together with appropriate
documentation on the status of collection efforts and balances remaining
outstanding.
2.5 BANK ACCOUNTS; LOCKBOX; ADMINISTRATION OF OUTSTANDING CHECKS.
(A) Control of the Subsidiary's existing bank accounts will
remain with the Seller, except that the Seller will use its Best
Efforts to transfer to the Purchaser at
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<PAGE> 7
Closing the Subsidiary's lockbox and associated demand deposit
account. If the Subsidiary's lockbox account is not transferred to
the Purchaser at Closing, the Seller will collect proceeds received in
the Subsidiary's lockbox account and remit the proceeds to the
Subsidiary by wire transfer on a weekly basis.
(B) The Seller will cause the Subsidiary's outstanding checks
existing at Closing to be honored when presented for payment and will
cause the Subsidiary's bank accounts to remain open for thirty (30)
days following Closing to facilitate the clearing of such outstanding
checks. For purposes of determining the Purchase Price Adjustment,
checks of the Subsidiary outstanding at Closing will be classified as
Intercompany Debt.
2.6 REIMBURSEMENT FOR DRAWS ON OUTSTANDING LETTERS OF CREDIT. As an
accomodation to the Subsidiary, Insilco has provided certain of the
Subsidiary's suppliers with the letters of credit described in Schedule 4.1(I).
The Purchaser will use its Best Efforts to be substituted in place of Insilco
with respect to such letter of credit obligations and agrees that, as soon as
practicable and not later than 24 hours following receipt of notice from
Insilco of a draw on any such letters of credit, it will reimburse Insilco for
the full amount of such draw (and associated fees) by wire transfer in
immediately available funds.
ARTICLE III
CLOSING DATE AND EFFECTIVE TIME
The closing of the purchase and sale of the Shares (the "Closing")
shall be held at the offices of Sidley & Austin, 875 Third Avenue, New York,
New York at 10:00 a.m., New York City time, on September 3, 1996 or at such
other place or time as the Purchaser and the Seller may mutually agree (the
"Closing Date"). The effective time of the transfer of the Shares shall be
deemed to have been 12:01 a.m., New York City time, on the Closing Date (the
"Effective Time").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES BY THE SELLER. Except as otherwise
disclosed in this Agreement or the Schedules, the Seller hereby represents and
warrants that:
(A) ORGANIZATION AND GOOD STANDING. The Subsidiary is a
corporation duly organized, validly existing and in good standing
under the laws of the State of New Hampshire and has all requisite
corporate power and authority to own and lease the properties and
assets it currently owns and leases and to carry on its business as
such business is currently conducted. The Seller has previously
delivered to the Purchaser true, correct and complete copies of the
Charter Documents, each as amended to date,
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<PAGE> 8
of the Subsidiary. The Subsidiary is duly licensed or qualified to do
business as a foreign corporation and is in good standing in all
jurisdictions in which the character of the properties and assets now
owned or leased by it or the nature of the business now conducted by
it requires it to be so licensed or qualified and where the failure so
to qualify reasonably might be expected to have a Material Adverse
Effect on the Subsidiary. Schedule 4.1(A) sets forth a list of all
jurisdictions in which the Subsidiary is currently licensed or
qualified to transact business as a foreign corporation.
(B) CORPORATE AUTHORITY AND APPROVAL. The Seller has all
requisite corporate power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to
perform all the terms and conditions hereof to be performed by it. The
execution and delivery of this Agreement by the Seller, the
performance by the Seller of all the terms and conditions hereof to be
performed by it and the consummation of the transactions contemplated
hereby have been duly authorized and approved by all requisite
corporate action on the part of the Seller. This Agreement constitutes
the valid and binding obligation of the Seller enforceable against the
Seller in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or other similar
laws relating to or affecting the enforcement of creditors' rights
generally and to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(C) CAPITALIZATION OF THE SUBSIDIARY; OWNERSHIP OF THE
SHARES. The authorized capital stock of the Subsidiary consists
solely of 600 shares of Common Stock, of which only the Shares are now
and will be at the Closing Date issued and outstanding. There are no
outstanding subscriptions, options, warrants, preemptive or
preferential rights, convertible or exchangeable securities or other
agreements or commitments of any character (contractual or otherwise)
for the purchase or acquisition (with or without value) by any person
of shares of capital stock or other securities issued or issuable by
the Subsidiary or any other equity or other ownership interest in the
Subsidiary (other than this Agreement or as hereafter may be arranged
by the Purchaser), and none of the Shares has been issued in violation
of any preemptive or preferential rights or any federal or state
securities law. The delivery at the Closing of certificates
representing the Shares will transfer to the Purchaser good and valid
title thereto, free and clear of any and all claims, pledges, security
interests, mortgages, liens and encumbrances of any kind, except those
incurred by the Purchaser.
(D) NO VIOLATION. Except as set forth in Schedule 4.1(D), to
the knowledge of the Seller, this Agreement and the execution and
delivery hereof by the Seller do not, and the fulfillment and
compliance with the terms and conditions hereof and the consummation
of the transactions contemplated hereby will not:
(i) violate or conflict with any provision of the
Charter Documents of the Subsidiary, each as amended to date;
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(ii) violate or conflict with any provision of, or
require any filing, consent, authorization or approval under,
any law or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ,
injunction or decree applicable to or binding upon the Seller
or the Subsidiary (assuming receipt of all governmental
consents and the making of all governmental filings typically
acquired or made after consummation of transactions of the
nature contemplated by this Agreement);
(iii) conflict with, result in a breach of,
constitute a default under (whether with notice or the lapse
of time or both), or accelerate or permit the acceleration of
the performance required by, or require any consent,
authorization or approval under, (a) any mortgage, indenture,
loan or credit agreement or any other agreement or instrument
evidencing indebtedness for money borrowed to which the
Subsidiary is a party or by which the Subsidiary is bound or
to which any of its properties is subject or (b) any lease,
license, contract or other agreement or instrument to which
the Subsidiary is a party or by which it is bound or to which
any of its properties is subject; or
(iv) result in the creation or imposition of any
lien, charge or other encumbrance upon the assets of the
Subsidiary,
which violation, conflict, breach, default, acceleration, lien, charge or
encumbrance, or the failure to make or obtain such filing, consent,
authorization or approval, with respect to the matters specified in clauses
(ii) through (iv) of this paragraph (D), will have a Material Adverse Effect on
the Subsidiary.
(E) NO DEFAULT; COMPLIANCE WITH LAWS AND REGULATIONS. Except
as set forth in Schedule 4.1(E), to the knowledge of the Seller:
(i) neither the Seller nor the Subsidiary is in
default under, and no condition exists that with notice or
lapse of time or both would constitute a default under, (a)
any mortgage, loan agreement, indenture, evidence of
indebtedness or other instrument evidencing borrowed money to
which either the Seller or the Subsidiary is a party or by
which the Seller or the Subsidiary or its properties is
bound, (b) any judgment, order or injunction of any court,
arbitrator or governmental agency or (c) any other agreement,
contract, lease, license or other instrument, which default
or potential default in any such case will have a Material
Adverse Effect on the Subsidiary; and
(ii) each of the Seller and the Subsidiary has
complied with all laws, regulations, orders, judgments or
decrees of any federal or state court or governmental
authority applicable to its respective businesses and
operations,
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noncompliance with which reasonably might be expected to have
a Material Adverse Effect on the Subsidiary.
(F) FINANCIAL STATEMENTS. The Seller has delivered to the
Purchaser copies of the Balance Sheet and the related unaudited
statement of operations (collectively, the "Financial Statements") for
the period ended on the Balance Sheet Date. The Financial Statements
fairly present the financial position of the Subsidiary and its
results of operations as at the Balance Sheet Date and for the period
then ended, subject to normal year-end audit adjustments.
(G) ABSENCE OF CERTAIN CHANGES. Except as set forth in
Schedule 4.1(G), or the Financial Statements, since June 30, 1996,
there has not been:
(i) any change in the business, financial condition
or results of operations of the Subsidiary which had, or
reasonably might be expected to have, a Material Adverse
Effect on the Subsidiary and which was not a development
generally affecting other companies in the Subsidiary's
industry;
(ii) any damage, destruction or loss, whether
covered by insurance or not, which has had, or reasonably
might be expected to have, a Material Adverse Effect on the
Subsidiary;
(iii) any material change by the Subsidiary in
accounting methods or principles which would be required to
be disclosed under GAAP;
(iv) any issuance by the Subsidiary of any shares of
Common Stock;
(v) any sale, lease or other disposition of
properties and assets of the Subsidiary other than in the
ordinary course of business;
(vi) any merger or consolidation of the Subsidiary
with any other corporation, person or entity or any
acquisition by the Subsidiary of the stock or business of
another corporation, partnership or other entity;
(vii) any borrowing, or agreement to borrow funds,
by the Subsidiary or any termination or material amendment of
any evidence of indebtedness, contract, agreement, deed,
mortgage, lease, license or other instrument, commitment or
agreement to which the Subsidiary is bound or by which any it
or its properties is bound other than in the ordinary course
of business and consistent with past practices or, in any
event, material to the business, financial condition or
results of operations of the Subsidiary;
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(viii) any declaration or payment of any dividend
on, or any other distribution with respect to, the Common
Stock of the Subsidiary, other than the dividend of the
Retained Assets;
(ix) any material increase in the compensation of
the directors, officers or employees of the Subsidiary (other
than in the ordinary course of business and consistent with
past practices), or any increase in benefits or benefit plan
costs (other than costs outside of the control of the
Subsidiary), or any increase in any bonus, insurance,
pension, compensation or other benefit plan made for or with
or covering any officers or directors; or
(x) any contract or commitment to do any of the
foregoing.
(H) TAXES. The operations of the Subsidiary have been
reflected in the Consolidated Returns for the five taxable years ended
December 31, 1994. The Seller and the Subsidiary have (or will have by
the Closing) caused to be timely filed with the appropriate federal,
state, local and other governmental authorities all returns,
information returns or statements and reports with respect to Taxes
required to be filed on or before the Closing Date for any taxable
period ending on or before the Closing Date and which, if not filed,
would have a Material Adverse Effect on the Subsidiary, and have (or
will have by the Closing Date) caused to be paid or deposited or made
adequate provision (in accordance with GAAP) for the payment of all
Taxes shown to be due on such returns or reports. The Internal Revenue
Service has audited the Consolidated Returns for taxable years through
1990. The settlement of the liabilities of the Insilco Group for
federal income Taxes for years through 1990 is the subject of an Order
Authorizing Compromise of Controversy with the Internal Revenue
Service which was filed on July 10, 1992 in the United States
Bankruptcy Court for the Western District of Texas and of a closing
agreement between the Seller and the Commissioner of Internal Revenue
which was executed by the Seller on September 15, 1992 and by the
Commissioner of Internal Revenue on October 28, 1992, copies of which
documents have previously been made available to the Purchaser for its
review. The members of the Insilco Group are not parties to any
agreement respecting the allocation or sharing of Taxes. The Internal
Revenue Service is currently auditing the Consolidated Returns for
taxable years through 1993, and has not yet issued a final
determination with respect to the Subsidiary's taxable income and
adjustments to its tax liabilities through the period.
(I) CONTRACTS, AGREEMENTS, PLANS AND COMMITMENTS. Schedule
4.1(I) sets forth a list of the following contracts, agreements, plans
and commitments to which the Subsidiary is a party or by which any of
its material properties are bound as of the date hereof:
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<PAGE> 12
(i) any contract, commitment or agreement which
involves aggregate expenditures by the Subsidiary of more
than $100,000 per year;
(ii) any indenture, trust, loan agreement or note,
other than the Credit Agreement and the Seller Security
Documents, under which the Subsidiary has outstanding
indebtedness, obligations or liabilities for borrowed money
in an amount in excess of $100,000;
(iii) any lease or sublease for the use or occupancy
of real property which involves aggregate expenditures by the
Subsidiary of more than $100,000 per year, together with a
list of the location of such leased property, the date of
termination of such arrangements, the name of the other
parties thereto and the rental payments required to be made
for such arrangements;
(iv) any employment agreement or any collective
bargaining or other contract with any labor union;
(v) any agreement that restricts the right of the
Subsidiary to engage in any type of business; and
(vi) any guaranty, direct or indirect, of the Seller
or any Insilco Affiliate of any contract, lease or agreement
entered into by the Subsidiary.
(J) INSURANCE. Schedule 4.1(J) sets forth a list of all
material insurance policies of or with respect to the Subsidiary,
other than directors' and officers' liability policies, by which the
Subsidiary or any of its properties or assets are covered against
present losses, all of which are now in full force and effect. To the
extent that any such policy is owned or held by Insilco or any Insilco
Affiliate, it may be terminated after the Closing Date; provided,
however, that the Seller agrees to maintain, or to cause to be
maintained, such policies (or policies of substantially the same
nature) in full force and effect at all times through the Closing
Date.
(K) PATENTS, TRADEMARKS AND COPYRIGHTS. Except as set forth
in Schedule 4.1(K), neither the Seller nor the Subsidiary has any
material patent, patent application, trademark (whether registered or
unregistered), trademark application, trade name or copyright or any
material trade secrets, manufacturing processes or formulae directly
relating to the business or operations of the Subsidiary.
(L) EMPLOYEE BENEFIT MATTERS. Schedule 4.1(L) sets forth a
list of all the following (copies or descriptions of which have been
made available to the Purchaser and which collectively are referred to
as "Plans"):
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<PAGE> 13
(i) each "employee benefit plan," as such term is
defined in Section 3(3) of ERISA, which is covered by Title I
of ERISA and which is maintained, or otherwise contributed
to, by the Seller or the Subsidiary for the benefit of the
employees of the Subsidiary;
(ii) each management or employment contract or
contract for personal services between the Subsidiary and any
officer, consultant, director, employee or any other person
or entity that is not by its terms terminable at will or on
not more than sixty (60) days' notice without penalty by the
Subsidiary;
(iii) each other plan, contract or arrangement
providing for bonuses, pensions, deferred compensation,
retirement plan payments, profit sharing, incentive pay,
hospitalization or medical expense or insurance for any
officer, consultant, director, annuitant or employee of the
Subsidiary or members of their respective families (other
than directors' and officers' liability policies), whether or
not insured;
(iv) each collective bargaining agreement or other
contract with any labor union to which the Subsidiary is a
party and which is not listed on Schedule 4.1(I); and
(v) any other agreement to which the Subsidiary is a
party that provides for the payment of severance benefits.
(M) LITIGATION. Except as disclosed in Schedule 4.1(M), there
are no material actions, suits, proceedings or governmental
investigations or inquiries pending, or to the knowledge of the Seller
threatened, against the Seller or the Subsidiary or their respective
properties, assets, operations or businesses which might delay,
prevent or hinder the consummation of the transactions contemplated
hereby or reasonably might be expected to have a Material Adverse
Effect on the Subsidiary.
(N) TERMINATION OF SUBSIDIARY GUARANTY AND RELEASE OF
SUBSIDIARY LIENS AND OBLIGATIONS UNDER THE SECURITY DOCUMENTS. When
the Purchaser acquires title to the Shares pursuant to this Agreement,
the Subsidiary Guaranty shall have terminated and shall then have no
force or effect, none of the Subsidiary's properties of any character
shall remain subject to any of the Subsidiary Liens, which shall have
been fully and finally released as to all such properties, and the
Subsidiary shall have no continuing executory obligations under any of
the Security Documents.
4.2 REPRESENTATIONS AND WARRANTIES BY THE PURCHASER. Except as
otherwise disclosed in this Agreement or in the Schedules, the Purchaser hereby
represents and warrants that:
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(A) ORGANIZATION AND GOOD STANDING. The Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of New York and has all requisite corporate power and
authority to own and lease the properties and assets it currently owns
and leases and to carry on its business as such business is currently
conducted. The Purchaser has previously delivered to the Seller true,
correct and complete copies of its Charter Documents, each as amended
to date.
(B) CORPORATE AUTHORITY AND APPROVAL. The Purchaser has all
requisite corporate power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to
perform all the terms and conditions hereof to be performed by it. The
execution and delivery of this Agreement by the Purchaser, the
performance by the Purchaser of all the terms and conditions hereof to
be performed by it and the consummation of the transactions
contemplated hereby have been duly authorized and approved by all
requisite corporate action on the part of the Purchaser. This
Agreement constitutes the valid and binding obligation of the
Purchaser enforceable against the Purchaser in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or other similar laws relating to or affecting
the enforcement of creditors' rights generally and to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law). The Purchaser is purchasing the
Shares for investment purposes and not with a view to the distribution
thereof.
(C) NO VIOLATION. This Agreement and the execution and
delivery hereof by the Purchaser do not, and the fulfillment and
compliance with the terms and conditions hereof and the consummation
of the transactions contemplated hereby will not:
(i) violate or conflict with any provision of the
Charter Documents of the Purchaser, each as amended to date,
(ii) violate or conflict with any provision of, or
require any filing, consent, authorization or approval under
any law or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ,
injunction or decree applicable to or binding upon the
Purchaser or any of its subsidiaries (assuming receipt of all
governmental consents and the making of all governmental
filings typically acquired or made after consummation of
transactions of the nature contemplated by this Agreement),
or
(iii) conflict with, result in a breach of,
constitute a default under (whether with notice or the lapse
of time or both), or accelerate or permit the acceleration of
the performance required by, or require any consent,
authorization or approval under, (a) any mortgage, indenture,
loan or credit agreement or any other agreement or instrument
evidencing indebtedness for money borrowed to which the
Purchaser is a party or by which the Purchaser is bound or to
which
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any of its properties is subject or (b) any lease, license,
contract or other agreement or instrument to which the
Purchaser is a party or by which any of them is bound or to
which any of its properties is subject,
which violation, conflict, breach, default, acceleration, lien, charge
or encumbrance, or the failure to make or obtain such filing, consent,
authorization or approval, with respect to the matters specified in
clauses (ii) through (iii) of this paragraph (C) will have a Material
Adverse Effect on the Purchaser.
(D) NO DEFAULT; COMPLIANCE WITH LAWS AND REGULATIONS. To the
knowledge of the Purchaser:
(i) the Purchaser is not in default under, and no
condition exists that with notice or lapse of time or both
would constitute a default under, (a) any mortgage, loan
agreement, indenture, evidence of indebtedness or other
instrument evidencing borrowed money to which the Purchaser
is a party or by which the Purchaser or its properties is
bound, (b) any judgment, order or injunction of any court,
arbitrator or governmental agency or (c) any other agreement,
contract, lease, license or other instrument, which default
or potential default in any such case will have a Material
Adverse Effect on the Purchaser; and
(ii) the Purchaser has complied in all material
respects with all laws, regulations, orders, judgments or
decrees of any federal or state court or governmental
authority applicable to its respective businesses and
operations, noncompliance with which reasonably might be
expected to have a Material Adverse Effect on the Purchaser.
(E) FUNDS AVAILABLE. The Purchaser has, or will have on and
after the Closing Date, sufficient sources of immediately available
funds to enable it to pay the Purchase Price and any Purchase Price
Adjustment to be paid by the Purchaser.
(F) LITIGATION. There are no material actions, suits,
proceedings or governmental investigations or inquiries pending, or to
the knowledge of the Purchaser threatened, against the Purchaser or
its subsidiaries or their respective properties, assets,
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operations or businesses which might delay, prevent or hinder the
consummation of the transactions contemplated hereby.
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
5.1 COVENANTS OF THE SELLER. The Seller covenants and agrees with the
Purchaser as follows:
(A) CERTAIN CHANGES. Except as expressly may be permitted
hereunder, contemplated hereby or set forth in the Schedules, the
Seller covenants that, from the date hereof until the Closing Date,
without first obtaining the written consent of the Purchaser (which
consent will not be unreasonably withheld), the Seller will not permit
the Subsidiary to:
(i) make any material change in the conduct of its
business or operations;
(ii) terminate or amend in any material respect any
contract or agreement required to be disclosed pursuant to
Section 4.1(I) or 4.1(L) except in the ordinary course of
business;
(iii) declare, set aside or pay any dividends, or
make any distributions, in respect of its Common Stock (other
than the dividend to the Seller of the Retained Assets), or
repurchase, redeem or otherwise acquire any such Common
Stock;
(iv) merge into or with or consolidate with any
other corporation or acquire all or substantially all the
business or assets of any corporation, person or entity;
(v) make any change in its Charter Documents, each
as amended to date;
(vi) purchase any securities of any corporation,
person or entity except for investments made in the ordinary
course of business consistent with past practices;
(vii) increase or decrease the indebtedness of the
Subsidiary to the Seller or any Insilco Affiliate, or of the
Seller or any Insilco Affiliate to the Subsidiary, other than
in the ordinary course of business or consistent with past
practices;
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(viii) other than pursuant to existing contracts or
commitments, sell, lease or otherwise dispose of any of its
assets or properties (except assets and properties sold,
leased or otherwise disposed of in the ordinary course of
business and the dividend to the Seller of the Retained
Assets); or
(ix) commit itself to do any of the foregoing.
(B) OPERATION OF PROPERTIES. The Seller covenants and agrees
with the Purchaser that from the date hereof until the Closing Date,
except as permitted hereunder or contemplated hereby or as consented
to in writing by the Purchaser, the Seller will cause the Subsidiary
to carry on its business in the usual and ordinary course and to use
its Best Efforts to preserve and maintain its business organization,
employees and business relationships consistent with past practices.
(C) ACCESS. The Seller will cause the Subsidiary to provide
the Purchaser and its authorized representatives, at the Purchaser's
sole expense, risk and cost, reasonable access from the date hereof
until the Closing Date, during normal business hours, to the
Subsidiary's personnel, properties, books and records and will cause
the Subsidiary to furnish to the Purchaser such additional financial
and operating data and other information as it may reasonably request
to the extent that such access and disclosure would not violate the
terms of any agreement to which the Subsidiary, the Seller or any
Insilco Affiliate is a party or by which it is bound or any applicable
law or regulation; provided, however, that any data or information so
acquired by the Purchaser shall be maintained confidential by the
Purchaser and its representatives in accordance with Section 5.2(E).
(D) BEST EFFORTS. The Seller will use its Best Efforts to
obtain the satisfaction of the conditions to Closing set forth in
Section 6.1.
(E) CONFIDENTIALITY. After the Closing Date, the Seller shall
not, directly or indirectly, disclose or provide to any other person
any non-public information of a confidential nature concerning the
business or operations of the Subsidiary, except as is required in
governmental filings or judicial, administrative or arbitration
proceedings.
(F) PUBLIC ANNOUNCEMENTS. Subject to applicable securities
law, stock exchange or NASD requirements, until the Closing Date, the
Seller shall promptly advise and obtain the approval of the Purchaser
(which approval shall not be unreasonably withheld) before issuing, or
permitting any of the directors, officers, employees or agents of the
Seller or the Subsidiary to issue, any press release with respect to
this Agreement or the transactions contemplated hereby.
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(G) CONTRIBUTION OF INTERCOMPANY INDEBTEDNESS. At or before
Closing, the Seller will cause the Intercompany Debt to be contributed
to the capital of the Subsidiary.
(H) TRANSITIONAL RESPONSIBILITIES. The Seller will use its
Best Efforts to assist the Purchaser in the transition of operational
control and financial responsibility for the Subsidiary, including
providing the Purchaser, or the Purchaser's representatives, with
reasonable access, during normal business hours, to those of Seller's
employees familiar with the Subsidiary's operations, including,
customer and dealer service, order processing, shipping, finance,
credit and collections, and data processing. The Purchaser shall
reimburse the Seller for Seller's reasonable documented out-of-pocket
expenses incurred in providing such services.
(I) OPERATIONAL RESPONSIBILITIES. The Seller will be
compensated for any ongoing operational services it elects to provide,
in its discretion, to the Subsidiary following a request therefore by
the Subsidiary or the Purchaser, as the case may be, at the Seller's
usual and customary overhead rates allocable to such operation,
together with reimbursement of Seller's reasonable documented
out-of-pocket expenses incurred in providing such services.
5.2 COVENANTS OF THE PURCHASER. The Purchaser covenants and agrees
with the Seller as follows:
(A) BEST EFFORTS. The Purchaser will use its Best Efforts to
obtain the satisfaction of the conditions to Closing set forth in
Section 6.2.
(B) PRESERVATION OF BOOKS AND RECORDS. For a period of seven
(7) years after the Closing Date, the Purchaser shall (i) preserve and
retain the corporate, accounting, legal, auditing and other books and
records of the Subsidiary (including, but not limited to, any
documents relating to any governmental or non-governmental actions,
suits, proceedings or investigations arising out of the conduct of the
business and operations of the Subsidiary prior to the Closing Date)
and (ii) make such books and records available at the then current
administrative headquarters of the Subsidiary to the Seller or
Insilco, or their respective successors and assigns, and their
respective officers, employees and agents, on reasonable notice and at
reasonable times, it being understood that the Seller (or Insilco,or
its successors and assigns, as the case may be) shall be entitled to
make copies of any such books and records as it shall deem necessary.
The Purchaser agrees to permit representatives of the Seller (or
Insilco,or its successors and assigns, as the case may be) to meet
with employees of the Purchaser or the Subsidiary on a mutually
convenient basis in order to obtain additional information and
explanations of any materials provided pursuant to this Section
5.2(B).
(C) PUBLIC ANNOUNCEMENTS. Subject to applicable securities
law, stock exchange or NASD requirements, until the Closing Date, the
Purchaser shall promptly
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advise and obtain the approval of the Seller (which approval shall not
be unreasonably withheld) before issuing, or permitting any of the
Purchaser's directors, officers, employees or agents, or any of the
Purchaser's subsidiaries, to issue, any press release with respect to
this Agreement or the transactions contemplated hereby.
(D) CONFIDENTIAL INFORMATION. and its representatives shall
keep confidential any data or information received by the Purchaser
regarding the business and assets of the Seller and the Subsidiary in
accordance with the Confidentiality Agreement executed by the
Purchaser. The Purchaser and its representatives further covenant to
keep confidential, and to cause the Subsidiary and its representatives
and employees to keep confidential, any data or information in their
possession after the Closing, regarding the business and assets of the
Seller, Insilco or any Insilco Affiliate.
(E) PAYMENTS IN RESPECT OF RETAINED ASSETS AND RETAINED
LIABILITIES. The Purchaser agrees to cause the Subsidiary to endorse
and remit to the Seller, promptly following the Subsidiary's receipt
thereof, any payments received by the Subsidiary in respect of the
Retained Assets or the Retained Liabilities.
(F) ROLODEX PROGRAMS. The Seller's affiliate, the Rolodex
division of Insilco, has entered into certain programs and commitments
with customers with respect to the division's sales of the
Subsidiary's products. The Purchaser agrees to cause the Subsidiary to
honor the terms of these programs, and to reimburse the Rolodex
division for the Subsidiary's allocable pro rata share (with the
determination of such pro rata share to commence on the Closing Date)
of any rebate obligations to the Rolodex division's customers with
respect to such programs. The Seller will cause the Rolodex division,
on request, to furnish the Subsidiary with the terms of such programs,
and, at the time a rebate is due with respect to any such program, a
report summarizing the Subsidiary's allocable share of that rebate.
ARTICLE VI
CONDITIONS TO CLOSING
6.1 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The obligations of
the Purchaser to proceed with the Closing are subject to the satisfaction on or
prior to the Closing Date of all the following conditions, any one or more of
which may be waived, in whole or in part, by the Purchaser:
(A) COMPLIANCE. The Seller shall have complied in all
material respects with each of its covenants and agreements contained
herein, and each of its representations and warranties contained in
Section 4.1 shall be true on and as of the Closing Date in all
material respects.
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(B) OFFICER'S CERTIFICATE. The Purchaser shall have received
a certificate, dated the Closing Date, of an executive officer of the
Seller certifying as to the matters specified in Section 6.1(A).
(C) LEGAL OPINION. The Purchaser shall have received from the
General Counsel of Insilco Corporation an opinion dated the Closing
Date to the effect that:
(i) the Seller and the Subsidiary are each
corporations duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation, with the corporate power and authority to own
their respective properties and assets and to carry on their
respective businesses as are now being conducted;
(ii) the Seller has the corporate power under its
Charter Documents and the laws of the jurisdiction of its
incorporation to execute and deliver this Agreement and to
consummate the transactions contemplated hereby; all
corporate acts and other proceedings required to be taken by
or on the part of the Seller to execute and deliver this
Agreement and to consummate the transactions contemplated
herein have been duly and validly taken; and this Agreement
has been duly executed and delivered by, and constitutes the
valid and binding obligation of, the Seller enforceable
against the Seller in accordance with its terms, subject to
any applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance or other similar laws relating to or
affecting the enforcement of creditors' rights generally and
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law);
(iii) the authorized capital stock of the Subsidiary
consists solely of 600 shares of Common Stock of which 474
shares of Common Stock are validly issued and outstanding;
(iv) the execution and delivery by the Seller of
this Agreement do not and the consummation of the
transactions contemplated hereby will not violate any
provision of or constitute a default (whether with notice or
the lapse of time or both) under (a) the Charter Documents,
each as amended to date, of the Seller or the Subsidiary or
(b) any provision of any material indenture, mortgage, lien,
lease, agreement, instrument, order, arbitration award,
judgment or decree known to such counsel to which the Seller
or the Subsidiary is a party or by which either of them or
any of their respective assets or properties is bound, which
violation, breach or default, in the case of clause (b),
might have a Material Adverse Effect on the Subsidiary; and
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(v) on the sale of the Shares to the Purchaser
pursuant to this Agreement, the Purchaser (assuming the
Purchaser is a "bona fide purchaser" as defined in Article 8
of the UCC) will acquire valid title to the Shares, free and
clear of any pledges and security interests.
(D) NO ORDERS. The Closing shall not violate any order or
decree of any court or governmental body having competent jurisdiction
over the transactions contemplated by this Agreement.
(E) LICENSE AGREEMENT. The Subsidiary shall have executed a
license agreement with Insilco, substantially in the form attached
hereto as Exhibit C, providing for a one year limited license to the
Subsidiary of the right to use the trademark Rolodex(R), in connection
with the trademark "Curtis by Rolodex(R)" in the use and sale of
remaining stocks of packaging and inventory bearing such trademark.
6.2 CONDITIONS TO THE OBLIGATIONS OF THE SELLER. The obligations of
the Seller to proceed with the Closing are subject to the satisfaction on or
prior to the Closing Date of all the following conditions, any one or more of
which may be waived, in whole or in part, by the Seller:
(A) COMPLIANCE. The Purchaser shall have complied in all
material respects with each of its covenants and agreements contained
herein, and each of its representations and warranties contained in
Section 4.2 shall be true on and as of the Closing Date in all
material respects.
(B) OFFICER'S CERTIFICATE. The Seller shall have received a
certificate, dated the Closing Date, of an executive officer of the
Purchaser certifying as to the matters specified in Section 6.2(A).
(C) LEGAL OPINION. The Seller shall have received, from the
General Counsel of Purchaser, an opinion dated the Closing Date to the
effect that:
(i) the Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of New
York, with the corporate power and authority to own its
property and assets and carry on its business as is now being
conducted; and
(ii) the Purchaser has the corporate power under its
Charter Documents and the laws of the jurisdiction of its
incorporation to execute and deliver this Agreement and to
consummate the transactions contemplated hereby; all
corporate acts and other proceedings required to be taken by
or on the part of the Purchaser to authorize it to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby have been duly and validly taken; and
this
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Agreement has been duly executed and delivered by the
Purchaser and constitutes the valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance
with its terms subject to any applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or other
similar laws relating to or affecting the enforcement of
creditors' rights generally and general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(D) NO ORDERS. The Closing shall not violate any order or
decree of any court or governmental body having competent jurisdiction
over the transactions contemplated by this Agreement.
ARTICLE VII
TAXES
The Seller shall be liable for, and shall indemnify the Purchaser and
hold the Purchaser harmless from any liability for, all Taxes which are imposed
upon or are incurred by (a) any member of the Insilco Group other than the
Subsidiary for any taxable period, and (b) the Subsidiary for any taxable period
ending on or before the Closing Date (including federal income Taxes imposed on
or incurred by the Subsidiary for periods which are included in Consolidated
Returns, but excluding any federal income Taxes attributable to events
occurring, or income arising or deemed to arise, on or after the Closing Date),
provided that any such indemnification shall be made pursuant to the procedures
set forth in Section 9.4. The Purchaser shall be liable for, and shall indemnify
the Seller and hold the Seller harmless from any liability for, (i) all Taxes
which are imposed on or incurred by the Subsidiary except Taxes for which the
Seller is liable pursuant to the immediately preceding sentence, and (ii) all
transfer Taxes arising from the sale of the Shares, provided that any such
indemnification shall be made pursuant to the procedures set forth in Section
9.4. No election (if otherwise permissible) will be made under Treas. Reg.
Section 1.1502-76(b)(5) to include the Subsidiary in any affiliated group other
than the Insilco Group or to exclude the Subsidiary from the Insilco Group. The
Seller may elect, under Treas. Reg. Section 1.1502-20(g), to reattribute to it
the maximum permissible amount of net operating loss carryovers of the
Subsidiary, and the Subsidiary and the Purchaser will take all steps necessary
to perfect such election. The Seller will make no election under Prop. Treas.
Reg. Section 1.1502-95(e) to apportion to the Subsidiary any part of the
"consolidated section 382 limitation" therein referred to. Each party will
provide to the other such information and access to records as such other party
may reasonably request in order to enable such other party to prepare any Tax
returns and handle any audit respecting Taxes or controversy with any Tax
authorities for which such other party is responsible.
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ARTICLE VIII
EMPLOYEE BENEFITS
8.1 EMPLOYMENT. The Purchaser shall retain the employees of Subsidiary
identified on Schedule 8.1 (the "Retained Employees"). Each Retained Employee,
to the extent that such person does not voluntarily resign from the Subsidiary
on or before the Closing Date, shall be given credit for service with the
Subsidiary for all purposes under any employee benefit plan, program or
practice of the Purchaser (except Purchaser's pension plan, for which Retained
Employees become eligible as of the Closing) which is in existence as of the
Closing Date.
8.2 SEVERANCE PAY AND CERTAIN PROGRAMS. For a period of at least (1)
one year after the Closing Date, the Purchaser shall cause the Subsidiary or
any successor to maintain the Subsidiary's severance pay plan (without
substantive change) for the benefit of the Retained Employees.
8.3 EMPLOYEE BENEFIT PLANS. Coverage for the Retained Employees of the
Subsidiary under the Plans will cease on Closing, except as otherwise provided
under the terms of such Plans, or ERISA, or as otherwise required by law. The
Seller will use its Best Efforts to obtain applicable consents of the Insilco
Board of Directors to vest the Retained Employees with a pro rata share of: (i)
stock options awarded to Retained Employees under the 1993 Insilco Corporation
Long Term Incentive Plan; and (ii) Insilco matching funds paid to the accounts
of any of the Retained Employees in respect of their elective contributions
under the Insilco Corporation Employee Thrift Plan (401(k) Plan).
8.4 BONUS PLANS. The Closing Balance Sheet will include, as a
Liability of the Subsidiary, an accrual for bonuses payable to the Retained
Employees equal to two-thirds of the bonuses paid to such Retained Employees
for services rendered in 1995, not to exceed $25,000.
ARTICLE IX
EXTENT AND SURVIVAL OF REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS; INDEMNIFICATION
9.1 SCOPE OF REPRESENTATIONS OF THE SELLER. Except as and to the
extent set forth in this Agreement, the Schedules and the Exhibits, the Seller
makes no representations or warranties whatsoever and disclaims all liability
and responsibility for any representation, warranty or statement made or
information communicated (orally or in writing) to the Purchaser (including,
but not limited to, any opinion, information or advice which may have been
provided to the Purchaser or any affiliate thereof by any officer, stockholder,
director, employee, accounting firm, legal counsel or any other agent,
consultant or representative of the Seller or the Subsidiary). The Purchaser
acknowledges and affirms that it has had full access to the information
prepared by the Seller and the Subsidiary to assist persons investigating the
Subsidiary (the "Curtis Data") and that the Purchaser has made its own
independent investigation, analysis and evaluation of the Subsidiary and its
properties, assets, business, financial condition, operations and prospects.
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<PAGE> 24
9.2 INDEMNIFICATION OF PARTIES.
(A) INDEMNIFICATION OF THE PURCHASER. The Seller agrees to
indemnify and defend the Purchaser against, and hold the Purchaser
harmless from, any claim, liability, loss, damage or expense
(including reasonable attorneys' fees) (collectively "Losses" and
individually a "Loss"), whether arising before or after the Closing
Date, sustained by the Purchaser arising out of or resulting from (i)
a Retained Liability; or (ii) any inaccuracy in or breach of any of
the representations, warranties or covenants made by the Seller herein
(any such Loss or Losses being referred to herein as a "Purchaser
Indemnified Loss");
PROVIDED, HOWEVER, that the Purchaser shall not be entitled to assert rights of
indemnification under this Article IX for Purchaser Indemnified Losses until
the aggregate of all Purchaser Indemnified Losses of Purchaser exceeds $250,000
(the "Threshold Amount") (it being understood that all such Purchaser
Indemnified Losses shall accumulate until such time or times as the aggregate
of all Purchaser Indemnified Losses exceeds such Threshold Amount, whereupon
the Purchaser shall be entitled to indemnification hereunder for any Purchaser
Indemnified Losses, in excess of, but excluding such Threshold Amount); AND
PROVIDED, FURTHER, that the Threshold Amount shall not apply to the Seller's
obligations to the Purchaser with respect to the Retained Liabilities as set
forth in this Section 9.2(A)(i), or pursuant to Articles II and VII and Section
10.2, and the Purchaser shall not be entitled to assert rights of
indemnification under this Article IX for Purchaser Indemnified Losses arising
out of breaches of the representations, warranties and covenants of the Seller
contained in this Agreement unless such assertion is made within the time
period specified in Section 9.3.
(B) INDEMNIFICATION OF THE SELLER. The Purchaser agrees to
indemnify and defend the Seller against, and hold the Seller harmless
from, any Loss or Losses, whether arising before or after the Closing
Date, sustained by the Seller:
(i) arising out of or resulting from any inaccuracy
in or breach of any of the representations, warranties or
covenants made by the Purchaser herein;
(ii) arising from or related to any asset or
property owned or operated by the Subsidiary on or before the
Closing Date;
(iii) arising from or related to any liability of
the Subsidiary existing on or after the Closing Date other
than the Retained Liabilities; and
(iv) arising out of any claim based on acts
occurring on or after the Closing Date made by any employees
of the Subsidiary, including the Retained Employees, or any
other claim arising from an employer-employee relationship,
including any claim related to any Plans (any such Loss or
Losses being referred to herein as a "Seller Indemnified
Loss");
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PROVIDED, HOWEVER, that the Seller shall not be entitled to assert rights of
indemnification under this Article IX for Seller Indemnified Losses arising out
of breaches of the representations, warranties and covenants of the Purchaser
contained in this Agreement unless such assertion is made within the time
period specified in Section 9.3.
Neither the Seller nor the Purchaser shall be obligated to make any
payment of indemnity under this Agreement except pursuant to the procedures set
forth in Section 9.4.
9.3 SURVIVAL. The representations, warranties and covenants set forth
in this Agreement and in any certificate or instrument delivered in connection
herewith shall terminate and expire two years after the Closing Date, following
which event no party may institute any action or present any claim for a breach
of such representations, warranties, covenants or agreements; provided,
however, that the representations and warranties set forth in Section 4.1(C)
and the covenants and agreements set forth in Sections 2.3, 2.4, 2.5, 2.6 and
5.2 (B),(D) and (F), this Article IX and Articles VII, VIII, X, XI, XII and
XIII shall survive until the expiration of the applicable statute of
limitations period (including all periods of extension or tolling), except for
matters that are the subject of a timely claim made hereunder prior to such
expiration date,which shall not terminate or expire at any time pursuant to
this Section 9.3.
9.4 INDEMNIFICATION PROCEDURES. All claims for indemnification under
this Agreement shall be asserted and resolved as follows:
(A) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall promptly (i) notify the party from whom
indemnification is sought (the "Indemnifying Party") of any
third-party claim or claims ("Third Party Claim") asserted against the
Indemnified Party which could give rise to a right of indemnification
under this Agreement and (ii) transmit to the Indemnifying Party a
written notice ("Claim Notice") describing in reasonable detail the
nature of the Third Party Claim, a copy of all papers served with
respect to such claim (if any), an estimate of the amount of damages
attributable to the Third Party Claim, if reasonably possible, and the
basis of the Indemnified Party's request for indemnification under
this Agreement.
Within thirty (30) days after receipt of any Claim Notice
(the "Election Period"), the Indemnifying Party shall notify the
Indemnified Party (i) whether the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Agreement with
respect to such Third Party Claim and (ii) whether the Indemnifying
Party desires, at the sole cost and expense of the Indemnifying Party,
to defend the Indemnified Party against such Third Party Claim.
(B) If the Indemnifying Party notifies the Indemnified Party
within the Election Period that the Indemnifying Party does not
dispute its potential liability to the Indemnified Party under this
Agreement and that the Indemnifying Party elects to assume
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the defense of the Third Party Claim, then the Indemnifying Party
shall have the right to defend, at its sole cost and expense, such
Third Party Claim by all appropriate proceedings, which proceedings
shall be prosecuted diligently by the Indemnifying Party to a final
conclusion or settled at the discretion of the Indemnifying Party in
accordance with this Section 9.4(B). The Indemnifying Party shall have
full control of such defense and proceedings, including any compromise
or settlement thereof. The Indemnified Party is hereby authorized, at
the sole cost and expense of the Indemnifying Party (but only if the
Indemnified Party is actually entitled to indemnification hereunder or
if the Indemnifying Party assumes the defense with respect to the
Third Party Claim), to file, during the Election Period, any motion,
answer or other pleadings which the Indemnified Party shall deem
necessary or appropriate to protect its interests or those of the
Indemnifying Party and which are not unnecessarily prejudicial to the
Indemnifying Party. If requested by the Indemnifying Party, the
Indemnified Party shall, at the sole cost and expense of the
Indemnifying Party, cooperate with the Indemnifying Party and its
counsel in contesting any Third Party Claim which the Indemnifying
Party elects to contest, including the making of any related
counterclaim against the person asserting the Third Party Claim or any
cross-complaint against any person. The Indemnified Party may
participate in, but not control, any defense or settlement of any
Third Party Claim controlled by the Indemnifying Party pursuant to
this Section 9.4(B) and, except as permitted above or pursuant to
Section 9.4(C), shall bear its own costs and expenses with respect to
such participation. Notwithstanding anything in this Section 9.4 to
the contrary, the Indemnifying Party shall not, without the written
consent of the Indemnified Party, (i) settle or compromise any action,
suit or proceeding or consent to the entry of any judgment which does
not include as an unconditional term thereof the delivery by the
claimant or plaintiff to the Indemnified Party of a written release
from all liability in respect of such action, suit or proceeding or
(ii) settle or compromise any action, suit or proceeding in any manner
that may materially and adversely affect the Indemnified Party other
than as a result of money damages or other money payments.
(C) If the Indemnifying Party fails to notify the Indemnified
Party within the Election Period that the Indemnifying Party elects to
defend the Indemnified Party pursuant to Section 9.4(B), or if the
Indemnifying Party elects to defend the Indemnified Party pursuant to
Section 9.4(B) but fails to diligently and promptly prosecute or
settle the Third Party Claim, then the Indemnified Party shall have
the right to defend, at the sole cost and expense of the Indemnifying
Party, the Third Party Claim by all appropriate proceedings, which
proceedings shall be promptly and vigorously prosecuted by the
Indemnified Party to a final conclusion or settled. The Indemnified
Party shall have full control of such defense and proceedings;
provided, however, that the Indemnified Party may not, without the
Indemnifying Party's consent, which shall not be unreasonably
withheld, (i) settle or compromise any action, suit or proceeding or
consent to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or plaintiff
to the Indemnified Party of a written release from all liability in
respect of such action, suit or proceeding or (ii) settle or
compromise any action, suit or
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proceeding in any manner that may materially and adversely affect the
Indemnified Party other than as a result of money damages or other
money payments. Notwithstanding the foregoing, if the Indemnifying
Party has delivered a written notice to the Indemnified Party to the
effect that the Indemnifying Party disputes its potential liability to
the Indemnified Party under this Agreement and if such dispute is
resolved in favor of the Indemnifying Party by final, nonappealable
order of a court of competent jurisdiction, the Indemnifying Party
shall not be required to bear the costs and expenses of the
Indemnified Party's defense pursuant to this Section 9.4(C) or of the
Indemnifying Party's participation therein at the Indemnified Party's
request and the Indemnified Party shall reimburse the Indemnifying
Party in full for all costs and expenses of such litigation. The
Indemnifying Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to this
Section 9.4(C), and the Indemnifying Party shall bear its own costs
and expenses with respect to such participation.
(D) If an Indemnified Party should have a claim against an
Indemnifying Party hereunder which does not involve a Third Party
Claim, or knowledge of facts which could give rise to such a claim,
the Indemnified Party shall transmit to the Indemnifying Party a
written notice (the "Indemnity Notice") describing in reasonable
detail the nature of the claim, an estimate of the amount of damages
attributable to such claim and the basis of the Indemnified Party's
request for indemnification under this Agreement. If the Indemnifying
Party does not notify the Indemnified Party within sixty (60) days
from its receipt of the Indemnity Notice that the Indemnifying Party
disputes such claim, the claim specified by the Indemnified Party in
the Indemnity Notice shall be deemed a liability of the Indemnifying
Party hereunder. If the Indemnifying Party has timely disputed such
claim, as provided above, such dispute shall be resolved by litigation
in an appropriate court of competent jurisdiction.
(E) Payments of all amounts owing by the Indemnifying Party
pursuant to Sections 9.4(B) and (C) and 9.5 shall be made within (30)
days after the latest of (i) the effective date of the settlement of
the Third Party Claim, (ii) the date an adjudication of such Third
Party Claim becomes final and nonappealable or (iii) the date an
adjudication of the Indemnifying Party's liability to the Indemnified
Party under this Agreement becomes final and nonappealable. Payments
of all amounts owing by the Indemnifying Party pursuant to Section
9.4(D) shall be made within thirty (30) days after the later of (i)
the expiration of the sixty (60) day Indemnity Notice period or (ii)
the date an adjudication of the Indemnifying Party's liability to the
Indemnified Party under this Agreement becomes final and
nonappealable.
9.5 INSURANCE.
(A) In determining the amount of any loss, damage or expense
for which any party is entitled to indemnification under this
Agreement, the gross amount thereof will
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be reduced by any proceeds actually realized under insurance policies
by such party; provided, however, that, if such party has been
indemnified but does not actually receive such insurance proceeds
until after being indemnified, such party shall reimburse the
Indemnifying Party for amounts paid to or on behalf of such party to
the extent of the insurance proceeds so received.
(B) Following the Closing Date, if the Seller should suffer
any loss, damage or expense covered by any of the Seller's insurance
policies and wishes to make a claim against the issuer of such policy,
the Purchaser shall use its best efforts to assist the Seller in
ascertaining and establishing coverage, pursuing such claim and
collecting under such policy.
(C) If both the Indemnifying Party and the Indemnified Party
have insurance coverage respecting a particular loss, damage or
expense for which indemnification is provided pursuant to this Article
IX, the Purchaser and the Seller agree that the insurance coverage of
the Indemnifying Party will be called upon before the insurance
coverage of the Indemnified Party is called upon.
9.6 INDEMNIFICATION OF SUBSIDIARY REPRESENTATIVES.
(A) The Purchaser agrees that all rights to indemnification
now existing in favor of the directors and officers, employees, agents
and other representatives of the Subsidiary as provided in its Charter
Documents or otherwise in effect on the date of this Agreement will
survive the Closing Date and continue in full force and effect for a
period of six (6) years from the Closing Date, and the Purchaser will
honor, or cause to be honored, all such rights to indemnification;
provided, however, that in the event that any claim or claims are
asserted or made within such six (6) year period, such period shall
continue until final disposition of all such claims.
(B) If the Purchaser or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all its properties and
assets to any person or persons, then and in each such case proper
provisions shall be made so that its successor or assign or such
person or persons shall assume the obligations of the Purchaser, set
forth in this Section.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at any
time prior to the Closing Date:
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(A) by the mutual written agreement of the Seller and the
Purchaser;
(B) by the Seller by written notice thereof to the the
Purchaser if the purchase and sale of the Shares contemplated hereby
shall not have been consummated by the thirtieth (30th) day following
the date hereof, or such other date, if any, as the Seller and the
Purchaser shall agree upon in writing; or
(C) by the Seller or the Purchaser if the consummation of
such transactions would violate any nonappealable final order, decree
or judgment of any court or governmental body having competent
jurisdiction enjoining, restraining or otherwise preventing, or
awarding substantial damages in connection with, the consummation of
this Agreement or the transactions contemplated hereby;
PROVIDED, HOWEVER, that a party shall not be allowed to exercise any right of
termination pursuant to this Section 10.1 if the event giving rise to such
termination right shall be due to the negligent or willful failure of the party
seeking to terminate this Agreement to perform or observe in any material
respect any of the covenants or agreements set forth herein to be performed or
observed by such party.
10.2 EFFECT OF TERMINATION. The following provisions shall apply in
the event of a termination of this Agreement:
(A) If this Agreement is terminated by the Seller or by the
Purchaser as permitted under Section 10.1 hereof and not as the result
of the negligent or willful failure of any party to perform its
obligations hereunder, such termination shall be without liability to
any party to this Agreement or any stockholder, director, officer,
employee, agent or representative of such party.
(B) If this Agreement is terminated as a result of the
negligent or willful failure of a party to this Agreement to perform
its obligations hereunder, such party shall be fully liable for any
and all damages sustained or incurred by the other party, and the
other party shall be entitled to equitable relief, including
injunctive relief and specific performance to the full extent
available at law or in equity, as well as to all other remedies
available at law or in equity.
(C) The Seller and the Purchaser agree that the provisions of
this Section 10.2, Section 5.2(E) and Articles XI and XII shall
survive any termination of this Agreement.
10.3 AMENDMENT. This Agreement may be amended by the parties, by
action taken by their respective Boards of Directors, at any time, but may not
be amended except by an instrument signed on behalf of each of the parties.
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10.4 EXTENSION; WAIVER. At any time the parties, by action taken by
their respective Boards of Directors, may, to the extent legally allowed,
extend the time for the performance of any of the obligations or other acts of
the other party, waive any inaccuracies in the representations and warranties
contained in this Agreement or in any document delivered pursuant to it and
waive compliance with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a party to any such extension or waiver
will be valid only if set forth in an instrument signed on behalf of such
party.
10.5 PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER. A
termination or amendment of this Agreement or an extension or waiver pursuant
to any of the foregoing Sections of this Article X will, in order to be
effective, require action of the relevant party's Board of Directors or an
authorized committee or designee thereof.
ARTICLE XI
BROKERS
The Purchaser and the Seller each represent to the other that neither
the Purchaser nor the Seller has, directly or indirectly, employed any broker,
finder or intermediary in connection with such transactions who might be
entitled to a fee or commission upon the execution of this Agreement or
consummation of the transactions contemplated hereby.
ARTICLE XII
EXPENSES
Except as specifically provided herein, all legal and other costs and
expenses in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Seller (and not the Subsidiary) or the Purchaser,
as the case may be, depending upon which party incurred such costs and
expenses.
ARTICLE XIII
NOTICES; MISCELLANEOUS
13.1 NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed given when delivered personally or when received
if sent by registered or certified mail, return receipt requested, or telecopy
to the parties at the following addresses (or at such other address as a party
may specify by like notice):
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(A) If to the Purchaser, to:
Esselte Corporation
71 Clinton Road
Garden City, New York 11530
Attention: General Counsel
Telecopy: (516) 747-8949
(B) If to the Seller, to:
Insilco Corporation
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
Attention: General Counsel
Telecopy: (614) 791-3195
13.2 BOOKS AND RECORDS. The Seller agrees that the Seller will
promptly after the Closing deliver or cause to be delivered to the Purchaser
all corporate minute books and stock transfer records of the Subsidiary, to the
extent not then in the possession of the Subsidiary.
13.3 MISCELLANEOUS.
(A) EXCLUSIVE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement (i) supersedes all prior agreements between the parties
(written or oral) other than the Confidentiality Agreement between the
Seller and the Purchaser, (ii) together with such Confidentiality
Agreement, is intended as a complete and exclusive statement of the
terms of the agreement between the parties and (iii) except pursuant
to Article VIII and Sections 5.2(B), 9.6 and 9.7, does not and is not
intended to confer on any person other than the parties any rights or
remedies.
(B) CHOICE OF LAW. This Agreement shall be governed by the
laws of the State of New York, except to the extent the laws of the
State of New Hampshire apply to the sale of the Shares.
(C) ASSIGNMENTS. No party hereto shall assign this Agreement
or any part hereof without the prior written consent of the other
party. Except as otherwise provided herein, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. No such assignment shall
release the Purchaser of any of its obligations under the Agreement.
(D) SCHEDULES. The Seller may revise or supplement the
Schedules at any time at or prior to the Closing; provided, however,
that no such revision or supplement shall revise or supplement any
such Schedule to reflect any information materially adverse to the
Purchaser not previously disclosed to the Purchaser.
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(E) SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any
rule of law or public policy, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions
contemplated hereby is not affected in any adverse manner to either
party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an
acceptable manner so that the transactions contemplated hereby are
fulfilled to the greatest extent possible.
(F) COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one and the
same agreement.
(G) FURTHER ASSURANCES. The Seller and the Purchaser agree to
deliver or cause to be delivered to each other such additional
instruments, or to make any such filings, on the Closing Date and at
such other times thereafter as either of them may reasonably request
for the purpose of carrying out this Agreement.
(H) INTERPRETATION. When a reference is made in this
Agreement to Articles, Sections, Schedules or Exhibits, such reference
is to an Article or a Section of, or a Schedule or an Exhibit to, this
Agreement, unless otherwise indicated. The table of contents and
headings contained in this Agreement are for reference purposes only
and will
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not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are used in
this Agreement, they will be understood to be followed by the words
"without limitation."
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
ROLODEX CORPORATION
By: /s/ KENNETH H. KOCH
------------------------------
Name: Kenneth H. Koch
Title: Vice President
ESSELTE CORPORATION
By: /s/ ROBERT E. HAWES, JR.
------------------------------
Name: Robert E. Hawes, Jr.
Title: Executive Vice
President
GUARANTY
Insilco hereby guarantees the obligations of Seller to Purchaser
pursuant to Section 9.2(A) of this Agreement.
INSILCO CORPORATION
By: /s/ KENNETH H. KOCH
------------------------------
Name: Kenneth H. Koch
Title: Vice President
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EXHIBIT 20
Excellence in Electronics, Telecommunications, Automotive, Office Products,
Publishing
- --------------------------------------------------------------------------------
NEWS RELEASE
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE CONTACT: DAVID A. KAUER
TREASURER
(614) 792-0468
INSILCO COMPLETES SALE OF CURTIS MANUFACTURING
COLUMBUS, OHIO, SEPTEMBER 3, 1996 -- INSILCO CORPORATION (NASDAQ:INSL)
reported today that it has completed the previously announced sale of Curtis
Manufacturing, its computer accessories business, to Esselte Americas, a
division of Esselte AB of Stockholm, Sweden. Sale proceeds are approximately
$6.4 million, subject to post-closing adjustments. Curtis sales were $19.5
million in 1995 and $8.6 million through the first half of 1996. Curtis
recorded an operating loss in 1995, including $1.0 million in non-recurring
charges, and has been operating at approximately breakeven in 1996. The Company
commented that this sale will allow management to further sharpen its focus on
the Company's core industrial businesses and indicated that the sale proceeds
would be used both to reduce outstanding bank debt and make additional
investments in its core businesses.
Insilco Corporation, based in suburban Columbus Ohio, with 1995 sales
of $561 million, is a diversified manufacturer of industrial components serving
the telecommunications, electronics and automotive markets, as well as a
marketer/manufacturer of office and specialty publishing products. The
company's business units include Rolodex, a leading marketer of office
products; Taylor Publishing, a major publisher of school yearbooks; Thermal
Components Group and Steel Parts Corporation serving the automotive and other
industrial markets; and Insilco Technologies Group comprised of Stewart
Connector Systems, Escod Industries, Stewart Stamping and Signal Transformer,
serving the electronics and telecommunications markets.
Investor Relations Contact: David A. Kauer, (614) 792-0468 or write to Insilco
Corporation, Investor Relations, 425 Metro Place North, Box 7196, Dublin, OH
43017 or call Melodye Demastus, Melrose Consulting (614) 771-0860.
