UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 12)
Insilco Corporation
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(Name of Issuer)
Common Stock (Par Value $.001 Per Share)
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(Title of Class of Securities)
457659704
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(CUSIP Number)
David J. Greenwald, Esq.
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
(212) 902-1000
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
August 17, 1998
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: / /.
page 1 of 11
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CUSIP NO. 457659704
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Water Street Corporate Recovery Fund I, L.P.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO; WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------ ------ --------------------------------------------- --------
Number of 7. SOLE VOTING POWER
Shares -0-
------ --------------------------------------------- --------
Beneficially 8. SHARED VOTING POWER
Owned By -0-*
------ --------------------------------------------- --------
Each 9. SOLE DISPOSITIVE POWER
Reporting -0-
------ --------------------------------------------- --------
Person With 10. SHARED DISPOSITIVE POWER
-0-*
- ------------------ ------ --------------------------------------------- --------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-*
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
/ /
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%*
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14. TYPE OF REPORTING PERSON
PN
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* See Item 5 of the attached Schedule.
page 2 of 11 pages
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CUSIP NO. 457659704
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Goldman Sachs Group, L.P.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/ /
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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Number of 7. SOLE VOTING POWER
Shares -0-*
------ --------------------------------------------- --------
Beneficially 8. SHARED VOTING POWER
Owned By -0-*
------ --------------------------------------------- --------
Each 9. SOLE DISPOSITIVE POWER
Reporting -0-*
------ --------------------------------------------- --------
Person With 10. SHARED DISPOSITIVE POWER
-0-*
- ------------------ ------ --------------------------------------------- --------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-*
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
/ /
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%*
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14. TYPE OF REPORTING PERSON
HC; PN
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* See Item 5 of the attached Schedule.
page 3 of 11 pages
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CUSIP NO. 457659704
- ----------------------------
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Goldman, Sachs & Co.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
/x/
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ------------------ ------ --------------------------------------------- --------
Number of 7. SOLE VOTING POWER
Shares -0-
------ --------------------------------------------- --------
Beneficially 8. SHARED VOTING POWER
Owned By -0-*
------ --------------------------------------------- --------
Each 9. SOLE DISPOSITIVE POWER
Reporting -0-
------ --------------------------------------------- --------
Person With 10. SHARED DISPOSITIVE POWER
-0-*
- ------------------ ------ --------------------------------------------- --------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-*
- --------------------------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
/ /
- --------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%*
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14. TYPE OF REPORTING PERSON
BD; PN; IA
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- ------------------------------------
* See Item 5 of the attached Schedule.
page 4 of 11 pages
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AMENDMENT NO. 12 TO
SCHEDULE 13D
RELATING TO THE COMMON STOCK OF
INSILCO CORPORATION
Water Street Corporate Recovery Fund I, L.P. ("Water Street"),
Goldman, Sachs & Co. ("Goldman Sachs") and The Goldman Sachs Group, L.P. ("GS
Group" and, collectively with Water Street and Goldman Sachs, the "Reporting
Persons")* hereby file this Amendment No. 12 (this "Amendment No. 12") to the
Statement on Schedule 13D filed with respect to the Common Stock, par value
$.001 per share (the "Common Stock"), of Insilco Corporation, a Delaware
corporation (the "Company"), as most recently amended by Amendment No. 11
thereto dated June 15, 1998 (as amended, the "Schedule 13D"). Unless otherwise
indicated, all capitalized terms not otherwise defined herein shall have the
same meanings as those set forth in the Schedule 13D.
This Amendment No. 12 is being filed to report the exchange of
all of the Reporting Persons' shares of Common Stock for (i) $43.48 in cash and
(ii) 0.03378 shares of Insilco Holding Co. ("Holdings") in connection with the
consummation of the Reorganization Merger and the Merger and the other
transactions contemplated by the Merger Agreement on August 17, 1998. As a
result of these transactions, which are described more fully in Item 4, the
Reporting Persons ceased to be the beneficial owners of more than five percent
of the Company's Common Stock and, accordingly, ceased to be Reporting Persons.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended and supplemented as follows:
As previously reported in the Schedule 13D, on March 24, 1998,
the Company entered into the Merger Agreement with DLJMB and Merger Sub, which
provided for, among other things, (i) the Reorganization Merger, pursuant to
which a newly formed, wholly-owned subsidiary of Holdings (which, prior to the
Reorganization Merger, was a subsidiary of the Company) was to be merged with
and into the Company, with the Company surviving as a wholly-owned subsidiary of
Holdings, and (ii) the Merger, pursuant to which Merger Sub was to be merged
with and into Holdings, with Holdings continuing as the surviving corporation.
On August 17, 1997, the Reorganization Merger was consummated
(the "Reorganization Merger Effective Time") and the Merger was consummated (the
"Merger Effective Time"). Pursuant to the Merger Agreement, as a result of the
Reorganization Merger and the Merger, each share of the Company's Common Stock
outstanding was exchanged for $43.48 in cash and 0.03378 shares of common stock
of Holdings ("Holdings Common Stock"). As a result of the foregoing
transactions, Water Street received approximately $81,041,415 in cash and
retained 62,961 shares of Holdings Common Stock (representing approximately 4.6%
of Holdings Common Stock outstanding after the Merger), based on information
contained in the Company's Proxy Statement/Prospectus dated July 8, 1998.
Holdings and Water Street have entered into a Registration
Rights Agreement, dated as of August 17, 1998 (the "Registration Rights
Agreement"). Pursuant to the Registration Rights Agreement, Holdings has agreed,
among other things, that (i) as promptly as practicable,
* Neither the present filing nor anything contained herein shall be construed as
an admission that Water Street, Goldman Sachs or GS Group constitute a "person"
for any purpose other than Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or that Water Street, Goldman Sachs and GS
Group constitute a "group" for any purpose.
page 5 of 11 pages
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but in any event within 90 days of the Merger Effective Time, it will cause a
shelf registration statement in accordance with Rule 415 of the Securities Act
to be declared effective (the "Shelf Registration Statement") relating to the
sale, from time to time, of Holdings Common Stock held by Water Street and
certain related parties ("Holders") after the Merger and (ii) it will keep the
Shelf Registration Statement continuously effective and in compliance with the
Securities Act until the first anniversary of the Merger Effective Time, subject
to the right of Holdings, under certain circumstances, to postpone or suspend
for a reasonable period of time, not to exceed 60 days in the aggregate, the
proposed offering of Holdings Common Stock pursuant to the Shelf Registration
Statement (the "Blackout Period"). Holdings has also agreed to use its best
efforts to meet certain reporting requirements under the Securities Act and the
Exchange Act to enable Holders to sell their shares of Holdings Common Stock
without registration under the Securities Act as contemplated by Rules 144 and
145 thereunder.
The foregoing description of the Registration Rights Agreement
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the text of the Registration Rights Agreement, which is filed
as Exhibit 15 hereto and is incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5(a) is hereby amended and restated as follows:
(a) As of the date hereof, Water Street (i) no longer
beneficially owns shares of Common Stock and (ii) beneficially owns 62,961
shares of Holdings Common Stock. Based upon the foregoing, Water Street
beneficially owns approximately 4.6% of the Holdings Common Stock outstanding as
of August 17, 1998 following the Merger Effective Time (based on information
contained in the Company's Proxy Statement/Prospectus dated July 8, 1998).
As of the date hereof, GS Group (i) no longer owns any shares
of Common Stock and (ii) owns an aggregate of 11 shares of Holdings Common Stock
and, in addition, each of GS Group and Goldman Sachs (i) no longer beneficially
owns shares of Common Stock and (ii) may be deemed to be the beneficial owner of
the 62,961 shares of Holdings Common Stock beneficially owned by Water Street,
representing in the aggregate approximately 4.6% of the outstanding Holdings
Common Stock. Each of GS Group and Goldman Sachs disclaims beneficial ownership
of the shares of Holdings Common Stock held by Water Street to the extent the
partnership interests in Water Street are held by persons other than GS Group,
Goldman Sachs or their affiliates. To the knowledge of the Reporting Persons,
each of the persons listed on Schedule I (i) no longer owns shares of Common
Stock and (ii) owns approximately 5 shares of Holdings Common Stock. Each of the
Reporting Persons disclaims beneficial ownership with respect to such shares.
Item 5(c) is hereby amended and supplemented as follows:
(c) As described in Item 4 above, on August 17, 1997, the
Reorganization Merger and the Merger were consummated. Pursuant to the Merger
Agreement, as a result of the Reorganization Merger and the Merger, each of the
(i) 1,863,878 shares of Common Stock held by Water Street, (ii) 334 shares of
Common Stock held by GS Group and (iii) 167 shares of Common Stock known to the
Reporting Persons to be held by each of the persons listed on Schedule I, was
exchanged for $43.48 in cash and 0.03378 shares of Holdings Common Stock.
As a result of the foregoing transactions, (i) Water Street
received approximately $81,041,415 in cash and retained 62,961 shares of
Holdings Common Stock (representing approximately 4.6% of Holdings Common Stock
outstanding after the Merger), (ii) GS Group received approximately $14,520 in
cash and 11 shares of Holdings Common Stock (representing approximately 0.0% of
Holdings Common Stock outstanding after the Merger) and (iii) to the
page 6 of 11 pages
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knowledge of the Reporting Persons, each of the persons listed on Schedule I
received approximately $7,260 in cash and 5 shares of Holdings Common Stock
(representing, together with certain other persons, in the aggregate,
approximately 0.1% of Holdings Common Stock outstanding after the Merger).
Except for the transactions described herein, there have been
no transactions in the Common Stock effected by the Reporting Persons or, to the
knowledge of the Reporting Persons, any of the persons listed on Schedule I
hereto within the last 60 days.
(e) On August 17, 1998, as a result of the Reorganization
Merger and the Merger, the Reporting Persons ceased to be the beneficial owner
of more than 5% of the Common Stock or the Holdings Common Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 is hereby amended and supplemented as follows:
As described in Item 4 above, Holdings and Water Street have
entered into the Registration Rights Agreement, pursuant to which Holdings has
agreed, among other things, that (i) as promptly as practicable, but in any
event within 90 days of the Merger Effective Time, it will cause the Shelf
Registration Statement to be declared effective relating to the sale, from time
to time, by Holders of Holdings Common Stock after the Merger and (ii) it will
keep the Shelf Registration Statement continuously effective and in compliance
with the Securities Act until the first anniversary of the Merger Effective Time
(subject to the Blackout Period). Holdings has also agreed to use its best
efforts to meet certain reporting requirements under the Securities Act and the
Exchange Act to enable Holders to sell their shares of Holdings Common Stock
without registration under the Securities Act as contemplated by Rules 144 and
145 thereunder. The Registration Rights Agreement also contains, among other
things, customary indemnification and contribution agreements between the
parties.
The foregoing description of the Registration Rights Agreement
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the text of the Registration Rights Agreement, which is filed
as Exhibit 15 hereto and is incorporated herein by reference.
In connection with the consummation of the Merger, as required
by the Merger Agreement, Water Street executed a letter, dated as of August 17,
1998 (the "Letter Agreement"), pursuant to which Water Street agreed, among
other things, not to sell or otherwise dispose of Holdings Common Stock retained
by it after the Merger Effective Time in violation of the Securities Act. The
foregoing description of the Letter Agreement does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the text of
the Letter Agreement, which is filed as Exhibit 16 hereto and is incorporated
herein by reference.
page 7 of 11 pages
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is hereby amended and supplemented by adding thereto
the following:
(15) Registration Rights Agreement, dated as of August 17,
1998, between Insilco Holding Co. and Water Street
Corporate Recovery Fund I, L.P.
(16) Letter Agreement, dated as of August 17, 1998,
between Water Street Corporate Recovery Fund I, L.P.
and Insilco Holding Co.
page 8 of 11 pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
WATER STREET CORPORATE RECOVERY FUND I, L.P.
By: Goldman, Sachs & Co., its general partner
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: Managing Director
GOLDMAN, SACHS & CO.
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: Managing Director
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation, its general partner
By: /s/ Richard A. Friedman
Name: Richard A. Friedman
Title: Executive Vice President
Dated: August 20, 1998
page 9 of 11 pages
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INDEX TO EXHIBITS
Exhibit No. Exhibit Page
(15) Registration Rights Agreement, dated as of August 17,
1998, between Insilco Holding Co. and Water Street
Corporate Recovery Fund I, L.P.
(16) Letter Agreement, dated as of August 17, 1998,
between Water Street Corporate Recovery Fund I, L.P.
and Insilco Holding Co.
page 10 of 11 pages
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SCHEDULE I
The name of each director of The Goldman Sachs Corporation and The Goldman,
Sachs & Co. L.L.C. and of each member of the executive committees of The Goldman
Sachs Corporation, The Goldman Sachs & Co. L.L.C., The Goldman Sachs Group, L.P.
and Goldman, Sachs & Co. is set forth below.
The business address of each person listed below except John L. Thornton is
85 Broad Street, New York, NY 10004. The business address of John L. Thornton is
133 Fleet Street, London EC4A 2BB, England. Each person is a citizen of the
United States of America. The present principal occupation or employment of each
of the listed persons is as a managing director of Goldman, Sachs & Co. or
another Goldman Sachs operating entity and as a member of the executive
committee.
Jon Z. Corzine
Henry M. Paulson, Jr.
Roy J. Zuckerberg
Robert J. Hurst
John A. Thain
John L. Thornton
page 11 of 11 pages
Exhibit 15
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of August 17, 1998 (this
"Agreement"), between Insilco Holding Co., a Delaware corporation (the
"Company"), and the undersigned holder of shares of Insilco Corporation
("Insilco") common stock, par value $.001 per share (the "Stockholder" and,
together with the Company, the "Parties"), who will, as of the effective time of
the Reorganization Merger (as defined below) be the holder of shares of common
stock, par value $0.001 per share, of the Company (the "Common Shares").
PRELIMINARY STATEMENTS
WHEREAS, the Company is currently a wholly owned subsidiary of
Insilco;
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of March
24, 1998 by and among the Company, Silkworm Acquisition Corporation, a Delaware
corporation ("MergerSub"), and Insilco (as the same has been amended through the
date hereof, the "Merger Agreement"), a wholly owned subsidiary of the Company
("Reorg Sub") will be merged with and into Insilco pursuant to Section 251(a) of
the Delaware General Corporation Law (the "Reorganization Merger"), with Insilco
continuing as the surviving corporation and as a wholly owned subsidiary of the
Company;
WHEREAS, immediately following the Reorganization Merger, MergerSub
will be merged with and into the Company (the "Merger", and together with the
Reorganization Merger, the "Mergers"), with the Company continuing as the
surviving corporation;
WHEREAS, the Stockholder will retain Common Shares in accordance with
the terms of the Merger Agreement; and
WHEREAS, upon consummation of the Mergers, the Stockholder may be
subject to certain resale restrictions in respect of the Common Shares imposed
by the federal securities laws and the rules and regulations promulgated
thereunder.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained in this Agreement, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. Terms used but not defined herein are used herein
as defined in the Merger Agreement. The following terms, as used herein, have
the following meanings:
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(a) "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person. For the purpose of this definition, the term "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise;
(b) The "Commission" means the Securities and Exchange Commission;
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder from time to time
by the Commission;
(d) "Holder(s)" means the Stockholder, any of its Affiliates and any
successors and Affiliates thereof;
(e) "Person" means any individual, corporation, general or limited
partnership, limited liability company, joint venture, association, trust,
unincorporated organization, government or department thereof, other entity or
group (as defined in the Exchange Act);
(f) "Registrable Securities" means, except as may be limited by Section
2.1, (i) the Common Shares to be received pursuant to the Merger Agreement and
owned (beneficially or of record) by the Holders or any current or former
partners or employees (the "GS Employees") of Goldman, Sachs & Co. ("Goldman
Sachs") (which GS Employees shall be deemed "Holders" for purposes of this
Agreement) immediately after the effective time of the Merger (the "Effective
Time"), (ii) any Common Shares described in clause (i) acquired by Goldman Sachs
or its Affiliates from GS Employees after the Effective Time and (iii) any
securities issued or issuable in respect of such Common Shares by way of
conversion, exchange, stock dividend, split or combination, recapitalization,
merger, consolidation, other reorganization or otherwise; and
(g) "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder from time to time by the
Commission.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. REGISTRABLE SECURITIES. The registration rights provided
herein apply to Registrable Securities, but with respect to any particular
Registrable Security, only so long as such security continues to be a
Registrable Security. Any Registrable Security will cease to be a Registrable
Security when (i) a registration statement (including the Shelf Registration
Statement (as defined in Section 2.2)) covering such Registrable Security has
been declared effective by the Commission and such Registrable Security has been
sold, transferred or otherwise disposed of pursuant to such effective
registration statement, (ii) it is sold pursuant to Rule 144 promulgated under
the Securities Act, (iii) it has been otherwise transferred in compliance with
Section 5.07 of the Merger Agreement and it may be freely resold without
subsequent registration under the
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Securities Act or any blue sky law then in force, or (iv) it is sold,
transferred or otherwise disposed of, whether directly or indirectly, to any
Person other than a Holder or an Affiliate thereof.
SECTION 2.2. SHELF REGISTRATION STATEMENT. (a) The Company shall prepare
and file with the Commission a shelf registration statement (as amended and
supplemented from time to time, the "SHELF REGISTRATION STATEMENT") relating to
the resale of the Registrable Securities (and which may also include certain
warrants to purchase the Company's Common Shares in accordance with Rule 415
under the Securities Act) and will use its best efforts (i) to cause such Shelf
Registration Statement to be declared effective as promptly as practicable, but
in any event within 90 days of the date hereof and (ii) to keep such Shelf
Registration Statement continuously effective and in compliance with the
Securities Act and usable for resale of the Registrable Securities (including,
without limitation, the filing of any amendments or supplements to such Shelf
Registration Statement or the prospectus or any prospectus supplements forming a
part thereof), from the date on which the Commission declares effective the
Shelf Registration Statement until the first anniversary of the date hereof. The
prospectus forming a part of the Shelf Registration Statement shall include, in
addition to the other items required therein, a "Plan of Distribution" section
providing for, among other things, one or more sales of Registrable Securities
by the Holders, from time to time, (x) in market transactions or in privately
negotiated transactions or (y) as contemplated by Section 2.1(b) below, pursuant
to an underwritten offering to be described in a prospectus supplement to such
prospectus. The Stockholder will use reasonable efforts to notify the Company of
the sale of the last of the Registrable Securities; PROVIDED, that the failure
of the Stockholder to so notify the Company in accordance with this sentence
will not constitute a breach of any of the terms of this Agreement.
(b) If the Stockholder so elects, the offering of Registrable Securities
pursuant to the Shelf Registration Statement may be in the form of an
underwritten offering. In such case, the Stockholder shall select the
book-running and other managing underwriters in connection with such
underwritten offering and any additional investment bankers and managers, if
any, to be used in connection with the offering, in each case which are
reasonably satisfactory to the Company; PROVIDED, that Goldman Sachs, if chosen
by the Stockholder, shall be reasonably satisfactory to the Company.
ARTICLE III
REGISTRATION PROCEDURES
SECTION 3.1. FILINGS; INFORMATION. In connection with the Shelf
Registration Statement pursuant to Section 2.2 hereof, the Parties agree as
follows:
(a) The Stockholder will notify the Company at least 5 business days prior
to any Holder making any offer or sale of any Registrable Securities pursuant to
the Shelf Registration Statement other than as contemplated by clause (x) of the
last sentence of Section 2.2 (which will not require such notice), to the extent
such offer or sale will require the preparation and
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distribution of an amendment or supplement to the prospectus forming a part of
the Shelf Registration Statement. Such notice shall contain such information
regarding the selling Holders, the proposed plan of underwriting of the
Registrable Securities (if applicable) and such other information as may be
legally required in connection with such registration (which notice may be
required to be updated with such required information as the Company may from
time to time reasonably request). The Company will promptly incorporate such
information in the Shelf Registration Statement, pursuant to a post-effective
amendment or supplement, if necessary, including a prospectus supplement. The
Company shall be entitled, by written notice to the Stockholder, to postpone or
suspend for a reasonable period of time (not to exceed a total of 60 days during
the period of effectiveness of the Shelf Registration Statement) (the "Blackout
Period") the proposed offering of Registrable Securities if the Company shall
determine in good faith that such offering is reasonably likely to interfere
with a pending or contemplated merger, sale or acquisition of assets,
recapitalization or other corporate action or policies of the Company (other
than sales of equity securities of the Company or securities convertible into or
exchangeable for equity securities of the Company, unless the Company agrees to
include the Registrable Securities sought to be sold by the Holders in the
offering by the Company). If the Company elects to so postpone or suspend the
proposed offering of Registrable Securities, the Company shall, to the extent
necessary, amend or supplement the Shelf Registration Statement to permit the
offering of Registrable Securities as soon as is reasonably practicable, but in
any event, within the number of days remaining in the Blackout Period.
(b) The Company will, if requested, prior to filing the Shelf Registration
Statement or any amendment or supplement thereto, furnish to the Stockholder and
each managing underwriter, if any, copies thereof (which documents will be
subject to their review), and thereafter furnish to the Stockholder and each
such underwriter, if any, such number of copies of the Shelf Registration
Statement, and any amendments and supplements thereto (in each case including
all exhibits thereto and documents incorporated by reference therein) and the
prospectus and any prospectus supplements included in the Shelf Registration
Statement (including each preliminary prospectus) as the Stockholder or such
underwriter may reasonably request in order to facilitate the sale of the
Registrable Securities;
(c) (i) the Company will notify the Stockholder (and, if requested, confirm
such notice in writing), promptly after the Company shall receive notice thereof
(x) of the time when the Shelf Registration Statement has become effective or
when any amendment or supplement to the Shelf Registration Statement or any
prospectus or prospectus supplement forming a part thereof has been filed, and
(y) of any request by the Commission for the amendment or supplement of the
Shelf Registration Statement, the prospectus or any prospectus supplement or for
additional information; and (ii) after the filing of the Shelf Registration
Statement, the Company will promptly notify the Stockholder of any stop order
issued or, to the knowledge of the Company, threatened to be issued by the
Commission and take all necessary actions required to prevent the entry of such
stop order or to remove it if such stop order is entered;
(d) the Company will use all reasonable efforts to qualify the Registrable
Securities for offer and sale under such other securities or blue sky laws of
such jurisdictions in the United States as the Stockholder or the managing
underwriter, if any, reasonably (in light of the
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Holders' intended plan of distribution) requests; PROVIDED, HOWEVER, that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction;
(e) the Company shall, as promptly as practicable, notify the Stockholder
(and, if requested, confirm such notice in writing), at any time when a
prospectus relating to the sale of the Registrable Securities is required by law
to be delivered, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus or prospectus supplement so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus or prospectus supplement will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and as promptly as practicable make
available to the Holders and to the underwriters, if any, any such supplement or
amendment. The Holders agree that, upon receipt of any notice from the Company
of the happening of any event of the kind described in the preceding sentence,
the Holders will forthwith discontinue the offer and sale of Registrable
Securities pursuant to the Shelf Registration Statement until receipt of the
copies of such supplemented or amended prospectus or prospectus supplement and,
if so directed by the Company, the Holders will deliver to the Company all
copies, other than permanent file copies then in the Holders' possession, of the
most recent prospectus or prospectus supplement, as the case may be, covering
such Registrable Securities at the time of receipt of such notice. In the event
the Company shall give such notice, the Company shall extend the period during
which such Shelf Registration Statement shall be maintained effective as
provided in Section 2.2(a)(ii) hereof by the number of days during the period
from and including the date of the giving of such notice to the date when the
Company shall make available to the Holders such supplemented or amended
prospectus or prospectus supplement, as the case may be;
(f) the Company will enter into customary agreements (including an
underwriting agreement in customary form that is reasonably acceptable to it)
and take such other actions as are reasonably required in order to expedite or
facilitate the sale of such Registrable Securities;
(g) in connection with underwritten offerings, at the request of the
Stockholder or any managing underwriter, the Company will furnish to the
Stockholders and to each underwriter, if any, a signed counterpart, addressed to
the Holders and each underwriter, of (i) an opinion or opinions of counsel to
the Company (including a "Rule 10b-5" opinion) and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily covered by
opinions or comfort letters delivered to such parties;
(h) the Company will make available for inspection by the Holders
participating in such offering, any underwriter participating in any disposition
pursuant to the Shelf Registration Statement, any attorney, accountant or other
agent retained by any such Holder or such underwriter, all financial and other
records, pertinent corporate documents and properties of the Company, and cause
the Company's officers, directors and employees to supply all information
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reasonably requested by any such Holder, underwriter, attorney, accountant or
agent in connection with the Shelf Registration Statement, and cause such
officers, directors and employees to be available for discussion of such
information and other customary due diligence matters;
(i) commencing within three months after the effective date of the Shelf
Registration Statement, the Company will make generally available to its
securityholders, as soon as reasonably practicable, a consolidated earnings
statement covering a period of 12 months, which earnings statement shall satisfy
the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder;
(j) the Company will use its best efforts to cause all Common Shares
(including, without limitation, all Registrable Securities) to be listed on each
securities exchange, if any, or the National Association of Securities Dealers'
(the "NASD") Nasdaq National Market or Nasdaq SmallCap Market interdealer
quotation systems on which similar securities issued by the Company are then
listed, but only if such securities are listed at such time;
(k) the Company will use reasonable best efforts to cause the Registrable
Securities covered by the Shelf Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable the Holders participating in such offering or the underwriters, if
any, to consummate the disposition of such offering of Registrable Securities,
subject to the proviso contained in clause (d) above;
(l) the Company will cooperate and assist in any filings required to be
made with the NASD and in performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is required
to be retained in accordance with the rules and regulations of the NASD; and
(m) the Company will provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of the Shelf
Registration Statement.
SECTION 3.2. REGISTRATION EXPENSES. In connection with the offering of
Registrable Securities pursuant to the Shelf Registration Statement, the Holders
participating in such offering shall be responsible for any underwriting
discounts or commission that may be payable in connection with the sale of their
securities. The Company will pay all other expenses incurred in connection with
such registration, including, but not limited to, (i) all filing fees with the
Commission, (ii) fees and expenses of compliance with securities or blue sky
laws (including reasonable fees and disbursements of counsel in connection with
blue sky qualifications of the securities), (iii) printing expenses, (iv) the
fees and expenses incurred in connection with any listing of the securities, (v)
fees and expenses of counsel and independent certified public accountants for
the Company (including the expenses of any comfort letters pursuant to Section
3.1(g) hereof) and (vi) the reasonable fees and expenses of any additional
experts retained by the Company in connection with such registration. The
Company shall also pay internal Company expenses (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties) relating to the offering of Registrable Securities pursuant
to the Shelf Registration Statement.
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ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
SECTION 4.1. (a) INDEMNIFICATION BY THE COMPANY. In the event of any
registration pursuant to Article II hereunder, the Company will, and hereby
does, indemnify and hold harmless, to the fullest extent permitted by law, each
Holder, its employees, officers, directors, fiduciaries, shareholders, general
and limited partners (and the employees, officers, directors, fiduciaries,
shareholders and general and limited partners thereof), each other Person who
participates as an underwriter or a qualified independent underwriter, if any,
in the offering or sale of such securities, each employee, officer, director,
fiduciary, shareholder and general and limited partner of such Person, and each
other Person (including any such Person's employees, officers, directors,
fiduciaries, shareholders and general and limited partners), if any, who
controls any of the foregoing within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages, liabilities (joint or several), actions and proceedings
(whether commenced or threatened) in respect thereof ("Claims") and expenses
(including reasonable fees and expenses of counsel and any amounts paid in any
settlement effected with the Company's consent, which consent shall not be
unreasonably withheld or delayed) (such expenses and amounts paid in settlement,
collectively, "Damages") actually incurred by each such indemnified party under
the Securities Act, the Exchange Act or otherwise, insofar as such Claims or
Damages arise out of or are based upon any of the following actual or alleged
statements, omissions or violations (each, a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in any
registration statement under which such securities were registered pursuant to
this Agreement under the Securities Act or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; (ii) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary, final or
summary prospectus or any amendment or supplement thereto, together with the
documents incorporated by reference therein, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; or (iii) any violation by the Company of any federal,
state or common law rule or regulation applicable to the Company and relating to
action required of or inaction by the Company in connection with any such
registration, and the Company will reimburse any such indemnified party for any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim as such expenses are
incurred; PROVIDED, that the Company shall not be liable to any such indemnified
party in any such case to the extent such Claims or Damages arise out of or is
based upon (x) any sales by any such indemnified party after the Company has
informed the Stockholder under Section 3.1(e) and prior to the delivery by the
Company of any supplement or amendment to such prospectus (where such supplement
or amendment is intended to cure the defect giving rise to such Claims or
Damages), and (y) any Violation which occurs in reliance upon and in conformity
with written information furnished to the Company or its representatives by or
on behalf of such indemnified party expressly stating that such information is
for use therein. Such indemnity and reimbursement of expenses shall remain in
full force and
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effect regardless of any investigation made by or on behalf of such indemnified
party and shall survive the transfer of such securities by such Holder.
(b) INDEMNIFICATION BY THE HOLDERS. Each Holder of Registrable Securities
as to which the Shelf Registration Statement is being effected shall, severally
and not jointly, indemnify and hold harmless (in the same manner and to the same
extent as set forth in paragraph (a) of this Section 4.1), to the extent
permitted by law, the Company, its employees, officers, directors, fiduciaries
and shareholders (and the employees, officers, directors, fiduciaries and
shareholders and general and limited partners thereof) and each other Person
(including any such Person's employees, officers, directors, fiduciaries,
shareholders and general and limited partners), if any, controlling the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and all other prospective sellers and their employees,
officers, directors, fiduciaries, shareholders and respective controlling
Persons (including any such Person's employees, officers, directors,
fiduciaries, shareholders and general and limited partners), against any and all
Claims and Damages actually incurred by each such indemnified party under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims or Damages
arise out of or are based upon any Violation which occurs in reliance upon and
in conformity with written information furnished in writing to the Company or
its representatives by or on behalf of such Holder expressly stating that such
information is for use in connection with any registration statement,
preliminary, final or summary prospectus or amendment or supplement or document
incorporated by reference into any of the foregoing; PROVIDED, HOWEVER, that the
aggregate amount which any such Holder shall be required to pay pursuant to this
Article IV shall be limited to the amount of the net proceeds received by such
Holder from the sale of Registrable Securities pursuant to the registration
statement giving rise to such Claim. The Company and the Stockholder hereby
acknowledge and agree that, unless otherwise expressly agreed to in writing by
any Holder to the contrary, for all purposes of this Agreement, the only
information furnished or to be furnished to the Company for use in any such
registration statement, preliminary, final or summary prospectus or amendment or
supplement thereto are statements specifically relating to (A) the beneficial
ownership of Common Shares by such Holder, (B) the name and address of such
Holder and (C) any information included in any notice provided pursuant to the
first sentence of Section 3.1(a) (including, without limitation, the proposed
plan of underwriting described therein). Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder.
SECTION 4.2. BLUE SKY. Indemnification similar to that specified in the
preceding Section 4.1 (with appropriate modifications) shall be given by the
Company and each seller of Registrable Securities (and, if the Company requires
as a condition to including any Registrable Securities in any registration
statement filed in accordance with Article II, any underwriter and qualified
independent underwriter, if any) with respect to any required registration or
other qualification of securities under any state securities and "blue sky"
laws.
SECTION 4.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt
by an indemnified party under Section 4.1 (a) or (b) above of notice of the
commencement of any action, such indemnified party (the "Indemnified Party")
shall, if a Claim in respect thereof is to
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be made against an indemnifying party under such subsection (the "Indemnifying
Party"), notify the Indemnifying Party in writing of the commencement thereof;
but the omission so to notify the Indemnifying Party shall not relieve it from
any liability which it may have to any Indemnified Party (i) except to the
extent that the Indemnifying Party is prejudiced by such failure to notify or
(ii) otherwise than under such subsection. In case any such action shall be
brought against any Indemnified Party and it shall notify the Indemnifying Party
of the commencement thereof, the Indemnifying Party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party (who shall not, except
with the consent of the Indemnified Party, be counsel to the Indemnifying
Party), and, after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume the defense thereof, the Indemnifying Party shall
not be liable to such Indemnified Party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such Indemnified Party, in connection with the defense thereof other
than reasonable costs of investigation. The Indemnifying Party shall not be
liable for any Damages arising out of or relating to any settlement or
compromise of any proceeding effected without its prior written consent (which
consent shall not be unreasonably withheld), but if settled or compromised with
such consent, or if there be a final, nonappealable judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless any Indemnified Party
from and against any and all Damages actually incurred by such Indemnified
Person (to the extent provided in this Article IV) by reason of such settlement
or judgment. No Indemnifying Party shall, without the written consent of the
Indemnified Party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the Indemnified Party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the Indemnified Party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or failure to act, by or on behalf of, any Indemnified
Party.
SECTION 4.4. CONTRIBUTION. (a) If the indemnification provided for in this
Article IV is unavailable to or insufficient to hold harmless an Indemnified
Party under Section 4.1 (a) or (b) above in respect of any Claims and Damages
(or actions in respect thereof) referred to therein, then each Indemnifying
Party shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Claims and Damages (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and the Indemnified Party in connection with the Violations (or actions in
respect thereof) which resulted in such Claims and Damages (or actions in
respect thereof). If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then the Indemnifying
Party shall contribute to such amount paid or payable by such Indemnified Party
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and the Indemnified Party in connection with the Violations
which resulted in such Claims and Damages (or actions in respect thereof), as
well as any other relevant equitable considerations (including any material
prejudice as a result of any failure to give notice as required by Section 4.3
above). The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material
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fact relates to information supplied by the Indemnifying Party or the
Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by an Indemnified Party as a result of the Claims and
Damages (or actions in respect thereof) referred to above in this Section 4.4
shall be deemed to include any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or Claim.
(b) The Parties agree that it would not be just and equitable if
contribution pursuant to this Section 4.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(c) Notwithstanding the provisions of this Section 4.4, no Holder shall be
required to contribute any amount in excess of the amount of the net proceeds
received by such Holder from the sale of Registrable Securities pursuant to the
Shelf Registration Statement giving rise to such contribution obligation.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. RULE 144. The Company covenants that it will use its best
efforts to file any reports required to be filed by it under the Securities Act
and the Exchange Act and that it will take such further action as the Holders
may reasonably request, all to the extent required from time to time to enable
the Holders to sell Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by Rule 144 and
Rule 145 under the Securities Act, as such rules may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission.
Upon the request of any Holder, the Company will promptly deliver to the Holders
a written statement as to whether it has complied with such requirements.
SECTION 5.2. HOLDBACK AGREEMENT. In connection with any offering in which a
Holder participates pursuant to this Agreement or otherwise, the Parties agree
that neither the Company nor any other holder of securities of the Company shall
be required to enter into any agreement, or make any commitment, that prohibits,
limits or restricts (or purports to prohibit, limit or restrict) in any fashion
their ability to effect any public sale or distribution of any Common Shares, or
any securities convertible into or exchangeable or exercisable for Common
Shares, whether pursuant to an underwritten public offering or otherwise, except
to the extent necessary to comply with Section 3.1(a).
SECTION 5.3. ASSIGNMENT. The Stockholder and its Affiliates shall be
entitled to assign the rights granted herein, in whole or in part, to any
transferee of Registrable Securities
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that is an Affiliate of such Stockholder or any of its Affiliates and such
Registrable Securities do not cease being Registrable Securities pursuant to
Section 2.1 upon consummation of such transfer. Upon such assignment, each
reference in this Agreement to the "Stockholder," the "Holders" or the "Parties"
shall be deemed to include the permitted assignee. Except as set forth in this
Section 5.3, none of the rights of any Holder under this Agreement shall be
assignable by any such Holder to any Person to which such Holder has, directly
or indirectly, sold, transferred or otherwise disposed of Registrable
Securities.
SECTION 5.4. TERMINATION. This Agreement shall terminate upon the earlier
to occur of (i) the sale of all Registrable Securities by the Holders and any
permitted transferee pursuant to Section 5.3, (ii) the mutual consent of the
Parties and (iii) one year from the date hereof, except that such one-year
period shall be extended by the same number of days as required by the last
sentence of Section 3.1(e); PROVIDED, HOWEVER, that, in any event, Article IV
shall survive such termination.
SECTION 5.5. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by telecopy
or telegram or by registered or certified mail (postage prepaid, return receipt
requested) to the respective Parties at the following addresses (or at such
other address for a Party as shall be specified in a notice given in accordance
with this Section 5.5):
(a) if to the Company:
Insilco Holding Co.
425 Metro Place North
5th Floor
Dublin, Ohio 43017
Telecopier: (614) 791-3195
Attention: General Counsel
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telecopier No.: (212) 450-4800
Attention: John W. Buttrick, Esq.
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(b) if to Stockholder:
Water Street Corporate Recovery Fund I, L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Telecopier: (212) 357-5505
Attention: David J. Greenwald, Esq.
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Telecopier No.: (212) 403-2000
Attention: Mitchell S. Presser, Esq.
SECTION 5.6. AMENDMENTS; WAIVER. Subject to the terms of Section 5.3
hereof, this Agreement may not be amended or modified except by an instrument in
writing signed by, or on behalf of, the Parties; PROVIDED, HOWEVER, that the
Parties may (i) extend the time for the performance of any of the obligations or
other acts of the other Party or (ii) waive compliance with any of the
agreements or conditions of the other Party contained herein. Any such extension
or waiver shall be valid only if set forth in an instrument in writing signed by
the Party to be bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of the
same term or condition, or a waiver of any other term or condition, of this
Agreement. The failure of any Party to assert any of its rights hereunder shall
not constitute a waiver of any such rights.
SECTION 5.7. 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 set forth in this Agreement is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in a mutually acceptable manner in
order that the transactions set forth in this Agreement be consummated as
originally contemplated to the fullest extent possible.
SECTION 5.8. BINDING EFFECT; BENEFIT. This Agreement shall be binding upon
and shall inure to the benefit of the Parties and their respective successors
and permitted assigns. Notwithstanding anything contained in this Agreement to
the contrary, except as expressly provided in Article IV, nothing in this
Agreement, is intended to confer on any person other than the Parties, the
Holders and their respective permitted successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
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SECTION 5.9. SPECIFIC PERFORMANCE. The Parties agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the Parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 5.10. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware
applicable to contracts executed in and to be performed in that State. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined in any Delaware state or federal court.
SECTION 5.11. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 5.12. COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different Parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
SECTION 5.13. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE STOCKHOLDER
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE COMPANY OR THE STOCKHOLDERS IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
SECTION 5.14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the Parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings among the Parties with
respect thereto. No addition to or modification of any provision of this
Agreement shall be binding upon any Party unless made in writing and signed by
all Parties.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
INSILCO HOLDING CO.
By: /s/ Kenneth H. Koch
Name: Kenneth H. Koch
Title: Vice President and General Counsel
STOCKHOLDER:
WATER STREET CORPORATE RECOVERY
FUND I, L.P.
By: Goldman, Sachs & Co.,
its General Partner
By: /s/ Joseph Gleberman
Name: Joseph Gleberman
Title: Managing Director
14
Exhibit 16
August 6, 1998
Insilco Holding Co.
425 Metro Place North
5th Floor
Box 7196
Dublin, Ohio 43017
Ladies and Gentlemen:
We have been advised that as of the date of this letter, Water Street
Recovery Fund I, L.P. ("Water Street") may be deemed to be an "affiliate" of
Insilco Corporation, a Delaware corporation ("Insilco"), immediately prior to
the Reorganization Effective Time and Insilco Holding Co., a Delaware
corporation ("ExistingSub") immediately after the Reorganization Effective Time,
as the term "affiliate" is defined for purposes of paragraphs (c) and (d) of
Rule 145 of the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Act"). Pursuant to the terms of the Agreement and Plan
of Merger dated as of March 24, 1998, as amended (the "Agreement") among
Insilco, ExistingSub and Silkworm Acquisition Corporation ("MergerSub"), the
Reorganization Merger will occur pursuant to which Insilco will merge with and
into a subsidiary of ExistingSub, with Insilco continuing as the surviving
corporation and as a result thereof Insilco will become a wholly owned
subsidiary of ExistingSub. Immediately after the Reorganization Merger, the
Merger will occur pursuant to which MergerSub will merge with and into
ExistingSub, with ExistingSub continuing as the surviving corporation (the
"Surviving Corporation"). Any capitalized term used but not defined herein shall
have the meaning set forth in the Agreement.
As a result of the Reorganization Merger, Water Street will receive one
share of ExistingSub's Common Stock, par value $0.001 per share ("ExistingSub
Securities") and $0.01 in cash, in exchange for each share owned by it of
Insilco's Common Stock, par value $0.001 per share. As a result of the Merger,
in exchange for each share of ExistingSub Securities received by it in the
Reorganization Merger, Water Street will receive an amount in cash and be
entitled to retain a certain number of shares of common stock of the Surviving
Corporation (the "Surviving Corporation Shares") determined on the basis of a
fixed exchange ratio.
We represent, warrant and covenant to Insilco and ExistingSub that as
of the date Water Street receives any ExistingSub Securities as a result of the
Mergers:
<PAGE>
A. Water Street shall not make any sale, transfer or other
disposition of the ExistingSub Securities in violation of
the Act or the Rules and Regulations.
B. We have carefully read this letter and the Agreement and
discussed the requirements of such documents and other
applicable limitations upon Water Street's ability to sell
transfer or otherwise dispose of the Surviving Corporation
Shares to the extent we felt necessary with its counsel or
counsel for Insilco.
C. We have been advised that the issuance of Surviving
Corporation Shares to Water Street pursuant to the Mergers
has been registered with the Commission under the Act on a
Registration Statement on Form S-4. However, we have also
been advised that, since at the time the Mergers were
submitted for a vote of the shareholders of Insilco, Water
Street may be deemed to have been an affiliate of Insilco
and the distribution by it of the Surviving Corporation
Shares has not been registered under the Act, Water Street
may not sell, transfer or otherwise dispose of the Surviving
Corporation Shares issued to it in the Mergers unless (i)
such sale, transfer or other disposition has been registered
under the Act, (ii) such sale, transfer or under other
disposition is made in conformity with Rule 145 promulgated
by the Commission under the Act, or (iii) in the opinion of
counsel reasonably acceptable to ExistingSub, or a "no
action" letter obtained by the undersigned from the staff of
the Commission, such sale, transfer or other disposition is
otherwise exempt from registration under the Act.
D. We understand that Surviving Corporation is under no
obligation to register the sale, transfer or other
disposition of the Surviving Corporation Shares by Water
Street or on its behalf under the Act or to take any other
action necessary in order to make compliance with an
exemption from such registration available other than
pursuant to the Registration Rights Agreement between
Existing Sub and Water Street.
E. We also understand that unless the transfer by Water Street
of its Surviving Corporation Shares has been registered
under the Act or is a sale made in conformity with the
provisions of Rule 145 or any other applicable exemption
from the registration requirements under the Act, the
Surviving Corporation reserves the right to put the
following legend on the certificates issued to Water
Street's transferee:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND WERE
ACQUIRED FROM A PERSON WHO RECEIVED SUCH SHARES IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE
SECURITIES ACT
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OF 1933 APPLIES. THE SHARES MAY NOT BE SOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE OR IN
ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OF 1933."
It is understood and agreed that the legend set forth in paragraph E
above shall be removed by delivery of substitute certificates without such
legend if such legend is not required for purposes of the Act or this Agreement.
It is understood and agreed that such legend shall be removed if the Surviving
Corporation receives from Water Street either an opinion of counsel (which
opinion of counsel must be reasonably satisfactory to the Surviving Corporation)
or a "no action" letter obtained by me from the staff of the Commission, in
either case to the effect that the restrictions imposed by Rule 145 under the
Act no longer apply.
Execution of this letter should not be considered an admission on Water
Street's part that Water Street is an "affiliate" of Insilco or ExistingSub as
described in the first paragraph of this letter or as a waiver of any rights
Water Street may have to object to any claim that it is such an affiliate on or
after the date of this letter.
Very truly yours,
/s/Terence M. O'Toole
Water Street Recovery Fund I, L.P.
By: GOLDMAN SACHS & CO.
General Partner
By: Terence M. O'Toole
Managing Director
Accepted this day of
August, 1998 by
Insilco Holding Co.
By:
Name: Kenneth H. Koch
Title: Vice President, General Counsel and Secretary
3
