As submitted to the Securities and Exchange Commission on April 7, 1999
Registration No. 333-71947
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT No. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Insilco Corporation
(Exact name of Registrant as specified in its charter)
(and Certain Subsidiaries identified in Footnote (1) below)
Delaware 274, 471, 346, 361, 367 06-1158291
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation Classification Code Number) Identification No.)
or organization)
425 Metro Place North, Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Kenneth H. Koch
Vice President and General Counsel
Insilco Corporation
425 Metro Place North, Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Richard D. Truesdell, Jr., Esq.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date.
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, please check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list the
Securities Act registration number of the earliest effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Each Class of to be Offering Aggregate Registration
Securities to be Registered(1) Registered Price Per Note Offering Price(2) Fee
<S> <C> <C> <C> <C>
12% Series B Senior Subordinated Notes due 2007... $120,000,000 100% $120,000,000 $33,360.00(4)
Senior Subordinated Guarantees(3).................
</TABLE>
(1) The following subsidiaries of Insilco Corporation are Co-Registrants and
guarantors of the 12% Senior Subordinated Notes due 2007, each of which is
incorporated in the state and has the I.R.S. Employer Identification Number
indicated: Great Lake, Inc. 31-1454822, a Delaware corporation; Insilco Asia
Corporation 31-1498845, a Delaware corporation; Signal Transformer Co., Inc.
06-1150000, a Delaware corporation; Signal Caribe, Inc. 06-1081561, a
Delaware corporation; Steel Parts Corporation 35-1103002, a Delaware
corporation; Stewart Connector Systems, Inc. 23-2013714, a Pennsylvania
corporation; Stewart Stamping Corporation 13-1733105, a Delaware
corporation; Taylor Publishing Company 75-1251430, a Delaware corporation;
Thermal Components, Inc. 63-0621666, a Delaware corporation; Thermal
Components Division, Inc. 31-1467510, a Delaware corporation; Eyelets For
Industry, Inc. 06-1252551, a Connecticut corporation; and EFI Metal Forming,
Inc. 06-1443376, a Connecticut corporation.
(2) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(f) under the Securities Act of 1933.
(3) The 12% Senior Subordinated Notes due 2007 are unconditionally (as well as
jointly and severally) guaranteed by the guarantors on an unsecured, senior
subordinated basis. No separate consideration will be paid in respect of the
guarantees.
(4) Previously paid.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the SEC, acting pursuant to said
Section 8(a), may determine.
================================================================================
<PAGE>
EXPLANATORY NOTE
This Registration Statement covers the registration of an
aggregate principal amount of $120,000,000 of 12% Series B Senior Subordinated
Notes due 2007 (the "New Notes") of Insilco Corporation ("Insilco") that may be
exchanged for equal principal amounts of Insilco's outstanding 12% Series A
Senior Subordinated Notes due 2007 (the "Old Notes") (the "Exchange Offer").
This Registration Statement also covers the registration of the New Notes for
resale by Donaldson, Lufkin & Jenrette Securities Corporation in market-making
transactions. The complete prospectus relating to the Exchange Offer (the
"Prospectus") follows immediately after this Explanatory Note. Following the
prospectus are certain pages of the Prospectus relating solely to such
market-making transactions (the "Market-Making Prospectus"), including
alternate front and back cover pages, a section entitled "Risk
Factors--Trading Market for the New Notes" to be used in lieu of the section
entitled "Risk Factors--Lack of Public Market," an alternate "Use of Proceeds"
section and an alternate "Plan of Distribution" section. In addition, the
Market-Making Prospectus will not include the following captions (or the
information set forth under such captions) in the Exchange Offer Prospectus:
"Summary-- The Exchange Offer," "Summary--Consequences of Exchanging Old
Notes pursuant to the Exchange Offer," "Risk Factors--Lack of Public Market,"
"The Exchange Offer" and "Certain United States Tax Consequences of the
Exchange Offer." All other sections of the Exchange Offer Prospectus will be
included in the Market-Making Prospectus.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commssion is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED APRIL 7, 1999
PROSPECTUS
Insilco Corporation
Offer to Exchange
12% Series A Senior Subordinated Notes Due 2007 for
12% Series B Senior Subordinated Notes Due 2007
which have been registered under the Securities Act of 1933, as amended
Insilco Corporation is offering to exchange an aggregate
principal amount of up to $120,000,000 of its 12% Series B Senior Subordinated
Notes due 2007 (the "New Notes"), which have been registered under the
Securities Act of 1933, as amended (the "Securities Act") for its existing 12%
Series A Senior Subordinated Notes due 2007 (the "Old Notes").
The terms of the New Notes are identical in all material
respects to the terms of the Old Notes, except that the New Notes have been
registered under the Securities Act, and certain transfer restrictions and
registration rights relating to the Old Notes do not apply to the New Notes.
To exchange your Old Notes for New Notes, you must complete and
send the letter of transmittal that accompanies this Prospectus to the
exchange agent by 5:00 p.m., New York time, on , 1999. If your Old
Notes are held in book-entry form at The Depository Trust Company ("DTC"), you
must instruct DTC through your signed letter of transmittal that you wish to
exchange your Old Notes for New Notes. When the exchange offer closes, your DTC
account will be changed to reflect your exchange of Old Notes for New Notes.
See "Risk Factors" beginning on page 14 for a discussion of
certain risk factors that should be considered by you prior to tendering your
Old Notes in the Exchange Offer.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of the securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is April 7, 1999.
<PAGE>
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission (the
"SEC") a Registration Statement on Form S-1 under the Act with respect to our
offering of the New Notes. This prospectus does not contain all the information
included in the Registration Statement and the exhibits and schedules thereto.
You will find additional information about us and the New Notes in the
Registration Statement. The Registration Statement and the exhibits and
schedules thereto may be inspected and copied at the public reference
facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the public reference facilities
of the SEC's Regional Offices: New York Regional Office, Seven World Trade
Center, Suite 1300, New York, New York 10048; and Chicago Regional Office,
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of
this material may also be obtained from the Public Reference Section of the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. The SEC also maintains a site on the World Wide Web
(http://www.sec.gov) that contains reports, proxy and information statements
and other information regarding registrants, including Insilco, that file
electronically with the SEC. Statements made in this Prospectus about legal
documents may not necessarily be complete and you should read the documents
which are filed as exhibits to the Registration Statement or otherwise filed
with the SEC.
If for any reason we are not required to comply with the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), we are still required under the indenture to furnish the
holders of the New Notes with the information, documents and other reports
specified in Sections 13 and 15(d) of the Exchange Act. In addition, we have
agreed that, for so long as any notes remain outstanding, we will furnish to
the holders of the notes and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
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Certain of the titles and logos of our products referenced
herein are trademarks of Insilco. Each trade name, trademark or servicemark
of any other company appearing in this Prospectus is the property of its
holder.
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Cautionary Statement Concerning Forward-Looking Statements
The information contained in this prospectus includes some
forward-looking statements that involve a number of risks and uncertainties.
A number of factors could cause our actual results, performance, achievements,
or industry results to be very different from the results, performance or
achievements expressed or implied by such forward-looking statements.
These factors include, but are not limited to:
o the competitive environment in our industry in general and in our
specific market areas;
o changes in prevailing interest rates and the availability of and terms
of financing to fund the anticipated growth of our business;
o inflation;
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o changes in costs of goods and services;
o economic conditions in general and in our specific market areas;
o changes in or our failure to comply with federal, state, local or
foreign government regulations;
o liability and other claims asserted against our company;
o changes in operating strategy or development plans;
o the ability to attract and retain qualified personnel;
o labor disturbances;
o our significant indebtedness;
o changes in our acquisition and capital expenditure plans;
o and other factors referenced herein.
In addition, forward-looking statements depend upon
assumptions, estimates and dates that may not be correct or precise and
involve known and unknown risks, uncertainties and other factors. Accordingly,
a forward-looking statement in this prospectus is not a prediction of future
events or circumstances and may not occur. Given these uncertainties,
prospective investors are warned not to rely on such forward-looking
statements. A forward-looking statement is usually identified by the use of
terminology such as "believes," "expects," "may," "will," "should," "seeks,"
"pro forma," "anticipates" or "intends," or by discussions of strategy or
intentions. We are not undertaking any obligation to update any such factors
or to publicly announce the results of any changes to our forward-looking
statements due to future events or developments.
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<PAGE>
PROSPECTUS SUMMARY
This section summarizes the more detailed information in this
prospectus and you should read all of such information carefully and in its
entirety. Because various entities discussed in this prospectus have similar
sounding names, we refer to Insilco Holdings Co., our parent company, as
"Holdings" and we refer to ourselves as "Insilco" the "Company," "we," "us" or
"our company." All of the information that we present about Holdings and
Insilco, except for historical financial information, reflects our recent
merger, as described below and the various financings that we obtained in
connection with the merger.
THE COMPANY
Overview
We produce automotive, telecommunications and electronics
components, and are a leading specialty publisher of student yearbooks.
We report our financial results in four segments:
o the Automotive Components Group, which manufactures
o transmission components and assemblies and
o heat exchangers (such as radiators and air conditioning condensers)
and heat exchanger tubing;
o the Technologies Group, which manufactures
o high performance data-grade connectors for the telecommunications and
networking markets,
o cable and wire assemblies primarily for the telecommunications
market, and
o precision metal stampings and power transformers primarily for the
electronics market.
o Specialty Publishing, which produces student yearbooks and other
specialty books.
o Other, which manufactures stainless steel tubing and mills, machinery
and equipment for the heat exchanger market.
Our portfolio of businesses serves several market segments,
which we believe tends to minimize the effects of cyclicality and diversify
business risk from any one market. Our broad base of more than 17,000
customers includes automotive and non-automotive original equipment
manufacturers ("OEMs"), telecommunications, networking and electronics
companies and school yearbook departments nationwide.
We primarily focus on tailoring our products for
customer-specific applications in niche markets. For example, (1) we customize
products for particular customers and applications and (2) we develop
technology to enhance product function. We believe that this focus on niche
markets results in more stable revenues, higher margins and longer term
customer relationships (often as the sole supplier to that customer). From
fiscal 1994 to fiscal 1998, our net sales from continuing operations increased
from $438.4 million to $535.6 million, representing a compound annual growth
rate ("CAGR") of 5.1%, and Adjusted EBITDA (as we define on page 13) increased
from $56.6 million to $64.9 million, representing a CAGR of 3.5%.
<PAGE>
<TABLE>
<CAPTION>
Year Ended
December 31, 1998
-----------------
Adjusted
Segment Sales EBITDA(1) Principal Products/markets Largest Customers
- ------- ----- --------- ------------------------------------ ----------------------
(in millions)
<S> <C> <C> <C> <C>
Automotive $213.4 $33.4 --Transmission/suspension components --Ford
Components Group --Radiators/air conditioning condensors --Valeo
--Heat exchanger tubing --Caterpillar
--Behr
--Delphi
Technologies Group 189.8 28.4 --Cable harness assemblies --Nortel
--50/60 Hz transformers --Siemens
--Modular jacks & plugs --Littelfuse
--Precision high speed stamping --Ericsson
--Lucent
--IBM
Specialty Publishing 101.3 8.5 --School yearbooks --High Schools
--Universities
Other 31.1 2.3 --Stainless steel tubing --Tubing distributors
--Heat exchanger mills/equipment --Ford
Unallocated Corporate -- (7.7)
Overhead ------ -----
Total $535.6 $64.9
====== =====
</TABLE>
- ----------
(1) See footnote 6 to the "Summary Historical and Unaudited Pro Forma
Consolidated Financial Operating Data".
The Automotive Components Group:
Our automotive components group consists of:
o Thermal Components which produces aluminum-and copper-based heat
exchanger tubing for automotive OEMs and Tier 1 suppliers, and also
manufactures radiators, air conditioning condensers and other heat
exchangers for automotive and industrial applications.
o Steel Parts which is the leading supplier of automatic transmission
clutch plates to Ford and produces other stamped components for OEMs
and Tier 1 suppliers.
o Thermalex, a joint venture owned equally by us and Mitsubishi
Aluminum Co., Ltd. ("Mitsubishi Aluminum"), which is, we believe, the
nation's leading producer of precision extruded multi-port aluminum
heat exchanger tubing used in automotive air-conditioning condensers.
In 1998, Thermalex, which is accounted for as an unconsolidated
investment, contributed $2.9 million to our consolidated pre-tax
income and paid a $1.3 million cash dividend to Insilco. On a
stand-alone basis, Thermalex generated $12.0 million of EBITDA in
1998; however, only the $1.3 million dividend is included in our
Adjusted EBITDA.
We believe that the impact of the economic cycle in the
automotive industry on our automotive components group's financial performance
is lessened by the group's sales in the automotive aftermarket and to
non-automotive OEMs, which represented 17% and 36%, respectively, of the
group's 1998 net sales.
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The Technologies Group
Our technologies group generally focuses on niche products
which are designed for specific customer applications and seeks to supply all
or a substantial portion of its customers' requirements. The group has four
operating units:
o Escod Industries, a supplier of cable and wire assemblies to the
telecommunications market, including Northern Telecom and Siemens
Telecom Network;
o Stewart Connector, a producer of high performance data-grade connectors
for the computer networking and telecommunications markets;
o Stewart Stamping, a producer of highly customized precision stamped
metal parts, primarily for the electronics industry; and
o Signal Transformer, a producer of 50-60 Hz power transformers used in a
variety of products.
Specialty Publishing
Taylor Publishing Company ("Taylor") is one of the nation's
leading publishers of student yearbooks. We believe that Taylor was the first
major yearbook publisher to make extensive use of digital pre-press technology
(permitting cutting, pasting, and rescaling of text and graphics on a
computer) as opposed to the more widely used pre-press process which involves
manual cutting, pasting and rescaling. We believe that we use digital
pre-press technology more extensively than our competitors, and that this
technology offers yearbook departments superior quality and greater
flexibility in altering page design. The student yearbook business is not very
cyclical, has low customer turnover and many of the sales are pre-paid.
Other
o Romac which produces stainless steel tubing for marine, architectural,
industrial and automotive applications.
o McKenica which manufactures high speed welded tube mills and other
machinery and equipment for the heat exchanger market.
Competitive Strengths
We believe that we possess a number of competitive strengths,
including the following:
Strong Niche Market Positions
Many of our products are targeted to niche markets in which we
can capitalize on our ability to produce highly customized products designed
for a single customer or a specific application which often requires formal
qualification. We believe that the specialized knowledge and experience we
have gained from these niche markets and applications cannot be easily
duplicated or replaced and strengthens our competitive position.
Long Standing Customer Base
We have many long-term customer relationships, which provides
an ideal platform from which to offer new products to existing customers. In
addition, such long-term relationships provide us with early insight into
customers' changing needs and allow us to introduce application-specific
products. The average length of our relationship with our ten largest
customers is over twenty years.
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<PAGE>
Recognized Quality
We have received industry recognition and awards for quality.
Awards recently received include: Ford's Q1 Quality Award, Eastman Kodak's
Preferred Vendor Status, Littelfuse Supplier Ingenuity Award, Panasonic's (ACOM
Division) Supplier of the Year, Sensormatic's Preferred Vendor and Siemens
Success Supplier--Ship to Stock Award. In addition, several of our plants have
been certified "QS 9000", "ISO 9001" or "ISO 9002", domestic and international
standards certification recognizing quality manufacturing processes.
Experienced Management Team
The current management team, headed by chief executive officer,
Robert L. Smialek, significantly reduced Insilco's debt during the past
several years from $253.7 million on January 1, 1994 to $58.6 million prior to
our recapitalization in June 1997 (at which time we borrowed money to buy back
Insilco stock). At the same time, we increased adjusted EBITDA from $56.6
million in 1994 to $64.9 million in 1998, representing a compound annual
growth rate of 3.5%. Management accomplished these improvements by divesting
certain non-core businesses such as paint products, computer accessories and
office products, focusing investments on its core businesses and actively
managing working capital.
Business Strategy
We seek sales growth through internal growth and acquisitions.
In addition, we seek to improve operating margins through cost reduction
programs and an ongoing process of efficiency improvements. Our strategy
includes the following:
Focus on Niche Markets
Develop New Products and Applications
Increase Value-Added Content
Implement Cost Reduction Programs and Efficiency Improvements
Expand Strategic Acquisitions and Partnerships; Divestitures
For more complete information on our business strategies, you
should read the section called "Business--Business Strategies."
Recent Developments
Potential Charge Associated With Cost Reduction Program. We
are reviewing a number of programs designed to improve operating efficiencies
and reduce expenses. While the scope of these programs has not been finalized,
we recorded non-recurring charges of $1.5 million in the aggregate during the
fourth quarter of 1998 and expect to record approximately $1.0 million in the
aggregate during the first quarter of 1999.
The Mergers. On August 17, 1998, Holdings formed a wholly owned
subsidiary which was then merged with and into Insilco (what we call the
"Reorganization Merger"). In the merger, each of our existing stockholders
had his or her shares converted into the same number of shares of Holdings and
the right to receive $0.01 per share in cash, and Holdings became our
corporate parent. Promptly following the Reorganization Merger, a second
merger took place pursuant to which Silkworm Acquisition Corporation, an
affiliate of DLJ Merchant Banking Partners II, L.P., merged with and into
Holdings (what we call the "Merger," and together with the Reorganization
Merger, the "Mergers") and each share of Holdings Common Stock ("Holdings
Common Stock") was converted into the right to receive $43.47
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in cash and retain 0.03378 of a share of the Holdings Common Stock. Thus, as a
result of the Mergers, each of our existing stockholders:
-- received $43.48 in cash (consisting of $.01 received in the
Reorganization Merger and $43.47 received in the Merger) and
-- retained 0.03378 of a share of Holdings Common Stock.
In conjunction with the Mergers, DLJ Merchant Banking Partners
II, L.P. and certain related funds and entities (what we call the "DLJMB
Funds") purchased 1,400,000 shares of Holdings' 15% Senior Exchangeable
Preferred Stock due 2012 (the "PIK Preferred Stock"), and warrants to purchase
65,603 shares of Holdings Common Stock at an exercise price of $.001 per share.
As a result of those transactions, following the Mergers,
o Insilco stockholders received, in the aggregate, approximately 10.1%
(9.4% on a fully diluted basis) of the outstanding shares of Holdings
Common Stock;
o the DLJMB Funds held approximately 69.0% (69.8% on a fully diluted
basis) of the outstanding shares of Holdings Common Stock;
o 399 Venture Partners, Inc., an affiliate of Citibank, N.A. ("CVC"),
purchased shares of Silkworm which in the Merger were converted into
approximately 19.3% (17.8% on a fully diluted basis) of the outstanding
shares of Holdings Common Stock; and
o our management purchased approximately 1.7% (1.5% on a fully diluted
basis) of the outstanding shares of Holdings Common Stock.
Immediately before the Reorganization Merger, each outstanding
option to acquire shares of our common stock that had been granted to our
employees and directors, whether or not vested, was canceled and each holder
of an option received a cash payment (collectively, the "Option Cash
Payments") in an amount equal to:
the excess, if any, of $45.00 over the exercise price of the option
multiplied by
the number of shares subject to the option, less applicable withholding
taxes. Certain option holders elected to use the Option Cash Payments to
purchase stock or equity units of Holdings.
The Merger Financing. The cash required to consummate the
foregoing transactions was approximately $204.4 million. This amount was
financed with
o approximately $70.2 million from the issuance by Silkworm of units
(which were converted into units of Holdings (the "Holdings Units") in
the Merger), each unit consisting of $1,000 principal amount of 14%
Senior Discount Notes due 2008 (the "Holdings Senior Discount Notes")
and one warrant to purchase 0.325 of a share of Holdings Common Stock at
an exercise price of $0.01 per share,
o approximately $56.1 million from the issuance by Silkworm to the DLJMB
Funds, CVC and certain members of our management of 1,245,138 shares of
Silkworm common stock (which was converted into Holdings Common Stock in
the Merger),
o $35.0 million from the issuance to the DLJMB Funds of 1,400,000 shares
of the PIK Preferred Stock by Holdings and the DLJMB Warrants to
purchase 65,603 shares of Holdings Common Stock at an exercise price of
$.001 per share, and
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<PAGE>
o approximately $43.1 million of new borrowings under our then existing
bank credit facility.
Offer to Purchase. Because the Mergers caused a "change in
control" of Insilco, we were required to make an offer to purchase all of our
outstanding $150.0 million 10(1)/(4)% Senior Subordinated Notes due 2007 at
101% of their aggregate principal amount, plus accrued interest. We issued
the Old Notes as units together with warrants to purchase Holdings Common
Stock and used the proceeds, together with certain borrowings under our new
bank credit facility, to repurchase all of the 10(1)/(4)% notes.
New Credit Facility. On November 24, 1998, we entered into a
new credit facility with a group of lenders led by DLJ Capital Funding Inc. to
replace our existing credit facility. The new credit facility includes a $125
million term loan facility and a $175 million revolving credit facility
(subject to adjustment as described below). The term loan facility has a
maturity of seven years. The revolving credit facility will terminate on July
8, 2003. See "Description of Certain Indebtedness--New Credit Facility." The
offering of the Old Notes, together with the repurchase of the 10 1/4% notes
pursuant to the offer to purchase the 10 1/4% notes, and the borrowings under
the new credit facility are referred to as the "Refinancing."
Acquisitions. We recently acquired Eyelets for Industry, Inc.
(EFI) and its wholly owned subsidiary EFI Metal Forming Inc. and are currently
in negotiations with respect to another potential acquisition. Neither the EFI
acquisition, nor the other potential acquisition, if consummated, is material
to our financial position.
Jostens Litigation. On January 14, 1997, Taylor sued one of its
principal competitors in the yearbook business, Jostens, Inc. ("Jostens"), in
the U.S. District Court for the Eastern District of Texas, alleging violations
of the federal antitrust laws as well as various claims arising under state
law. On May 13, 1998, the jury in the case returned a verdict in favor of
Taylor, and, on June 12, 1998, the judge rendered his judgment in the amount
of $25.2 million plus interest at an annual rate of 5.434%. On January 14,
1999, in response to a motion by Jostens, the judge entered an order vacating
the jury verdict and granting judgment in Jostens' favor. We will seek to
overturn the order and reinstate the jury verdict on appeal. We cannot assure
you what the actual amount is, if any, that Taylor will recover from Jostens.
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Our principal executive offices are located at 425 Metro Place
North, Fifth Floor, Dublin, Ohio 43017, and our telephone number is (614)
792-0468.
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<PAGE>
THE EXCHANGE OFFER
Securities Offered...................... We are offering up to $120,000,000
aggregate principal amount of 12%
Series B Senior Subordinated Notes
due 2007, which have been
registered under the Securities
Act.
The Exchange Offer...................... We are offering to issue the New
Notes in exchange for a like
principal amount of your Old Notes.
We are offering to issue the New
Notes to satisfy our obligations
contained in the registration
rights agreement entered into when
the Old Notes were sold in
transactions pursuant to Rule 144A
under the Securities Act and
therefore not registered with the
SEC. For procedures for tendering,
see "The Exchange Offer."
Tenders, Expiration Date, Withdrawal.... The Exchange Offer will expire at
5:00 p.m. New York City time on
, 1999 unless it
is extended. If you decide to
exchange your Old Notes for New
Notes, you must acknowledge that
you are not engaging in, and do not
intend to engage in, a distribution
of the New Notes. If you decide to
tender your Old Notes pursuant to
the Exchange Offer, you may
withdraw them at any time prior to
, 1999. If we decide for any
reason not to accept any Old Notes
for exchange, your Old Notes will
be returned to you without expense
to you promptly after the Exchange
Offer expires.
Federal Income Tax Consequences......... Your exchange of Old Notes for New
Notes pursuant to the Exchange
Offer will not result in any
income, gain or loss to you for
Federal income tax purposes. See
"Certain United States Federal
Income Tax Consequences of the
Exchange Offer."
Use of Proceeds......................... We will not receive any proceeds
from the issuance of the New Notes
pursuant to the Exchange Offer.
Exchange Agent.......................... Star Bank, N.A. is the exchange
agent for the Exchange Offer
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<PAGE>
CONSEQUENCES OF EXCHANGING OLD NOTES
PURSUANT TO THE EXCHANGE OFFER
We believe that New Notes issued in exchange for Old Notes
pursuant to the Exchange Offer may be offered for resale, resold or otherwise
transferred by you without registering the New Notes under the Securities Act
or delivering a prospectus so long as you (1) are not one of our "affiliates",
which is defined in Rule 405 of the Securities Act, and (2) acquire the New
Notes in the ordinary course of your business and, unless you are a broker
dealer, you do not have any arrangement with any person to participate in the
distribution of such New Notes. Our belief is based on interpretations by the
SEC's staff in no-action letters issued to third parties.
Unless you are a broker-dealer, you must acknowledge that you
are not engaged in, and do not intend to engage in, a distribution of the New
Notes and that you have no arrangement or understanding to participate in a
distribution of the New Notes. If you are an affiliate of Insilco, or you are
engaged in, intend to engage in or have any arrangement or understanding with
respect to, the distribution of New Notes acquired in the Exchange Offer, you
(1) should not rely on our interpretations of the position of the SEC's staff
and (2) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction.
If you are a broker-dealer and receive New Notes for your own
account pursuant to the Exchange Offer, you must acknowledge that you will
deliver a prospectus in connection with any resale of such New Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, you will not be deemed to admit that you are an "underwriter"
within the meaning of the Securities Act. If you are a broker-dealer, you may
use this prospectus, as it may be amended or supplemented from time to time,
in connection with the resale of New Notes received in exchange for Old Notes
acquired by you as a result of market-making or other trading activities. For
a period of 90 days after the expiration of the Exchange Offer, we will make
this prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution."
In addition, you may offer or sell the New Notes in certain
jurisdictions only if they have been registered or qualified for sale there,
or an exemption from registration or qualification is available and is
complied with. Subject to the limitations specified in the registration rights
agreement, we will register or qualify the New Notes for offer or sale under
the securities laws of any jurisdictions that you reasonably request in
writing. Unless you request that the sale of the New Notes be registered or
qualified in a jurisdiction, we currently do not intend to register or qualify
the sale of the New Notes in any jurisdiction. If you do not comply with
such requirement, you could incur liability under the Securities Act, and we
will not indemnify you in such circumstances.
8
<PAGE>
SUMMARY DESCRIPTION OF THE NOTES
The terms of the New Notes and the Old Notes are identical in
all material respects, except that the New Notes have been registered under
the Securities Act, and certain transfer restrictions and registration rights
relating to Old Notes do not apply to the New Notes.
Maturity Date............................ August 15, 2007
Interest Payment Dates................... Every February 15 and August 15,
beginning February 15, 1999.
Optional Redemption...................... We may redeem any of the notes at
our option on or after August 15,
2002 at the redemption prices set
forth on page 63, plus accrued
interest.
Change of Control........................ Upon the occurrence of a Change of
Control, you may require us to
repurchase your notes at 101% of
their principal amount, plus
accrued interest. We cannot assure
you that we will have sufficient
resources to satisfy our repurchase
obligation in such circumstances.
See "Risk Factors--Possible
Inability to Repurchase Notes upon
Change of Control" and "Description
of Notes."
Ranking.................................. The notes rank junior to all of our
senior indebtedness and secured
indebtedness, including the new
credit facility. The notes will
rank equally with any of our future
unsecured senior subordinated
indebtedness. The notes will
effectively rank junior to all
liabilities of subsidiaries that
have not guaranteed the notes. On
December 31, 1998 Insilco and the
guarantors had outstanding $191.1
million of senior indebtedness.
Note Guarantees.......................... The notes are unconditionally
guaranteed on a senior subordinated
basis by all of our wholly-owned
domestic subsidiaries (the
"guarantors"). The note guarantees
are unsecured obligations of the
guarantors and rank junior to all
existing and future senior
indebtedness of the guarantors,
including indebtedness under our
bank credit facility. See
"Description of Notes--Note
Guarantees."
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<PAGE>
Certain Covenants........................ The indenture governing the notes
contains certain covenants limiting
or prohibiting our ability and our
subsidiaries' ability to:
o incur additional indebtedness or
issue preferred stock;
o pay dividends or make
distributions on, and to redeem
or repurchase, capital stock or
to repurchase subordinated
indebtedness;
o engage in transactions with
affiliates;
o engage in sale and leaseback
transactions;
o create liens securing
indebtedness;
o make investments and sell
assets; and
o consolidate with or merge into,
or sell substantially all of our
assets to, another person.
See "Description of Notes--Certain
Covenants."
Use of Proceeds.......................... We will not receive any proceeds
from the exchange of New Notes for
Old Notes.
10
<PAGE>
SUMMARY HISTORICAL AND UNAUDITED PRO FORMA
FINANCIAL AND OPERATING DATA
The summary historical consolidated financial data presented
below are derived from our audited consolidated financial statements. You
should read the information contained in this table in conjunction with
"Selected Consolidated Financial Data," "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Unaudited Pro Forma
Consolidated Financial Data" and the consolidated financial statements and the
notes thereto included elsewhere in this prospectus (the "Consolidated
Financial Statements").
The unaudited pro forma condensed consolidated financial data
of Insilco and our subsidiaries for the years ended December 31, 1997 and 1998
are based upon historical information that has been adjusted to give effect to
the transactions described in footnote 1. The Reorganization Merger was
accounted for as a reorganization of entities under common control, and the
Merger was accounted for as a recapitalization. As a result, the Mergers had
no impact on the historical basis of our assets or liabilities.
The unaudited pro forma condensed consolidated income
statements for the years ended December 31, 1997 and 1998 have been prepared
as if the Mergers, the Merger Financing, the Refinancing and the 1997
Transactions (as defined below) all occurred at the beginning of the relevant
period. The expenses directly related to the aforementioned transactions
(other than interest expense) are excluded from the pro forma statement of
operations data. The unaudited pro forma financial data are based on certain
assumptions and estimates, and therefore do not purport to be indicative of
the results that would have been obtained had the transactions been completed
as of such dates or indicative of future results of operations and financial
position. See "Unaudited Pro Forma Condensed Consolidated Financial Data."
11
<PAGE>
Summary Historical and Unaudited Pro Forma Consolidated Financial and
Operating Data
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------------------------------
Pro Forma Pro Forma
1994 1995 1996 1997 1998 1997 1998
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Operations Data:
Net sales............................... $438.4 $449.5 $492.4 $528.2 $535.6 $528.2 $535.6
Operating income(2)..................... 9.5 38.9 48.4 51.1 17.3 51.1 38.2
Other income (expense):
Interest expense........................ (29.1) (19.5) (18.3) (20.5) (29.2) (37.3) (35.3)
Interest income......................... 1.8 1.4 0.7 2.8 1.0 0.8 1.0
Other income, net(3).................... 3.2 13.9 7.7 3.4 5.8 3.4 5.8
------ ------ ------ ------ ------ ------ ------
Income (loss) from continuing operations
before income taxes and extraordinary
items.................................... (14.6) 34.7 38.5 36.8 (5.1) 18.0 9.7
Income tax expense (benefit)............... (5.7) (16.7) (13.3) (13.4) 0.9 (6.1) (3.1)
------ ------ ------ ------ ------ ------ ------
Income (loss) from continuing operations
before extraordinary items................ (20.3) 18.0 25.2 23.4 (4.2) 11.9 6.6
Income (loss) from discontinued operations,
net of tax(4)............................. (9.7) (15.4) 13.8 58.9 -- -- --
------ ------ ------ ------ ------ ------ ------
Income (loss) before extraordinary
items.................................... (30.0) 2.6 39.0 82.3 (4.2) 11.9 6.6
Extraordinary items, net of tax............ (2.1) -- -- (0.7) (5.9) -- --
------ ------ ------ ------ ------ ------ ------
Net income (loss)....................... $(32.1) $2.6 $39.0 $81.6 $(10.1) $11.9 $6.6
====== ====== ====== ====== ====== ====== ======
Other Data:
EBITDA(5)............................... $56.6 $68.4 $63.8 $69.5 $37.5 $69.5 $58.4
Adjusted EBITDA(6)...................... 56.6 64.6 68.7 71.3 64.9 71.3 64.9
Cash interest expense................... 28.1 17.9 16.7 19.3 28.8 35.2 33.6
Depreciation and amortization........... 12.3 13.3 15.4 18.4 20.2 18.4 20.2
Amortization of Reorganization
Goodwill.............................. 34.8 16.2 -- -- -- -- --
Capital expenditures.................... 17.5 20.2 20.0 23.6 20.2 23.6 20.2
Balance Sheet Data (at period end):
Cash and cash equivalents............... $8.7 $9.9 $3.5 $10.7 $7.4 $7.4
Working capital......................... 33.9 44.9 51.4 39.5 67.2 67.2
Total assets............................ 368.7 340.1 348.4 302.7 323.0 323.0
Total debt.............................. 198.1 186.5 161.0 257.7 312.4 312.4
Stockholders' equity (deficit).......... (13.5) (15.8) 33.4 (102.3) (136.9) (136.9)
Credit Statistics:
Adjusted EBITDA/Cash interest expense... 1.9x
Net debt/Adjusted EBITDA(7)............. 4.7x
Ratio Data:
Ratio of Earnings to Fixed Charge(8)........ -- 2.63x 2.91x 2.64x -- 1.25x
</TABLE>
- ----------
(1) Pro forma results reflect (i) the following transactions (the "1997
Transactions"): the entry into the Existing Credit Facility on July 3,
1997, the issuance of the 10(1)/(4)% notes on August 12, 1997 and our
repurchase of 5,714,284 shares of common stock in the third quarter of 1997
for an aggregate of $220 million (the "Share Repurchase"); (ii) the Mergers
and the Merger Financing and (iii) the Refinancing and the application of
proceeds thereof, in each case, as if they occurred at the beginning of the
relevant period.
(2) Operating income in 1994 and 1995 includes the deduction for the
amortization of our reorganization value over the aggregate fair value of
its tangible and identified intangible assets at March 31, 1993
("Reorganization Goodwill") of $34.8 million and $16.2 million,
respectively, due to the adoption of "fresh start" accounting principles.
Operating income in 1995 includes a gain of $4.3 million related to a
change in our pension plan (see Note 12 to the Consolidated Financial
Statements).
(3) Other income, net in 1995 includes favorable adjustments of $3.6 million
related to our environmental liabilities, $1.5 million related to the
resolution of several legal disputes and a $4.0 million gain on the sale of
idle corporate assets. Other income, net in 1996 includes a $2.2 million
adjustment related to the satisfaction of certain of our environmental
liabilities following completion of a site clean-up for an amount less than
previously estimated.
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<PAGE>
(4) In March 1997, we completed the sale of its Office Products Business (as
defined below) with the divestiture of its traditional office products
business (the "Rolodex Business") for $112.6 million, net of transaction
costs, resulting in a gain of $57.8 million, net of taxes of $37.2 million.
The divestiture of the Rolodex Business was preceded in 1996 by the
divestiture of the Rolodex electronics product line ("Rolodex Electronics")
and our computer accessories business ("Curtis"). The proceeds from these
sales aggregated $21.8 million (see Note 20 to the Consolidated Financial
Statements for unaudited pro forma financial information with respect to
these divestitures). Rolodex, Rolodex Electronics and Curtis are referred
to collectively as the "Office Products Business."
In July 1998, we amended our Form 10-K for the year ended December 31, 1997
(the "Form 10-K") to account for the sale of the Office Products Business
as a discontinued operation and, accordingly, the accompanying consolidated
statements of operations and cash flows for the periods prior to the sale
have been reclassified. Revenues associated with the discontinued Office
Products Business for the years 1994, 1995, 1996 and 1997 were $105.2
million, $111.7 million, $80.1 million and $10.8 million, respectively.
(5) "EBITDA" is defined as net income before interest expense, interest income,
income taxes, depreciation and amortization, other income, equity in net
income of Thermalex and net gain or net loss on sale of assets. EBITDA is
not intended to represent and should not be considered more meaningful
than, or an alternative to, operating income, cash flows from operating
activities or other measures of performance in accordance with generally
accepted accounting principles. EBITDA data are included because we
understand that such information is used by certain investors as one
measure of an issuer's historical ability to service debt. While EBITDA is
frequently used as a measure of operations and the ability to meet debt
service requirements, it is not necessarily comparable to other similarly
titled captions of other companies, or to the defined term "Consolidated
EBITDA" used in "Description of Notes--Certain Covenants--Limitation on
Consolidated Debt", due to the potential inconsistencies in the method of
calculation.
(6) "Adjusted EBITDA" equals EBITDA plus dividends received from Thermalex of
$0.4 million, $3.4 million, $1.5 million, and $1.3 million for the years
ended December 31, 1995, 1996, 1997 and 1998, respectively, and excluding
the effect of: (i) a $4.3 million gain relating to a change in our pension
plan in the year ended December 31, 1995 (see Note 12 to the Consolidated
Financial Statements); (ii) a $1.5 million restructuring charge at Taylor
Publishing in the years ended December 31, 1996; (iii) $0.4 million, and
$1.3 million of legal expenses relating to the Jostens antitrust suit for
the years ended December 31, 1997 and 1998, respectively; (iv) $1.3 million
and $1.0 million of corporate officers' and business unit severance,
respectively, for the year ended December 31, 1998; (v) Merger expenses
recorded and paid of $20.9 million for the year ended December 31, 1998;
(vi) $0.9 million of facility rationalization/consolidation expenses for
the year ended December 31, 1998; and (vii) $0.6 million of legal expenses
related to a successful judgment on a breach of contract lawsuit against a
former employee for the year ended December 31, 1998.
(7) Net debt represents total debt less cash and cash equivalents and is
calculated based on pro forma cash and debt balances as of September 30,
1998.
(8) Ratio of earning to fixed charges equals (i) income from continuing
operations before income taxes, plus cash and non-cash interest expense and
imputed interest expense related to operating rents divided by (ii) cash
and non-cash interest expense, plus imputed interest expense related to
operating rents. In 1994 earnings were insufficient to cover fixed charges
by $15.1 million, primarily due to amortization expense of reorganization
goodwill recognized that year. In 1998 earnings were insufficient to cover
fixed charges by $5.3 million, primarily due to merger expenses incurred
that year.
13
<PAGE>
RISK FACTORS
In addition to the other matters described in this prospectus,
you should carefully consider the following risk factors before accepting the
Exchange Offer.
Consequences of Failure to Exchange Your Notes
If you do not exchange your Old Notes in the Exchange Offer,
your Old Notes will continue to be subject to the restrictions on transfer
described in the legend on the certificate for the Old Notes. In general, you
may offer or sell the Old Notes only if they are registered under, offered or
sold pursuant to an exemption from, or offered or sold in a transaction not
subject to, the Securities Act and applicable state securities laws.
We believe that New Notes issued in exchange for Old Notes
pursuant to the Exchange Offer may be offered for resale, resold or otherwise
transferred by you without registering the New Notes under the Securities Act
or delivering a prospectus so long as you (1) are not one of our "affiliates",
which is defined in Rule 405 of the Securities Act, and (2) acquire the New
Notes in the ordinary course of your business and, unless you are a broker
dealer, you do not have any arrangement with any person to participate in the
distribution of such New Notes. Our belief is based on interpretations by the
SEC's staff in no-action letters issued to third parties. Please note that the
SEC has not considered our Exchange Offer in the context of a no-action letter
and we cannot assure you that the SEC's staff would make a similar
determination with respect to our Exchange Offer.
Unless you are a broker-dealer, you must acknowledge that you
are not engaged in, and do not intend to engage in, a distribution of the New
Notes and that you have no arrangement or understanding to participate in a
distribution of the New Notes. If you are an affiliate of Insilco, or you are
engaged in, intend to engage in or have any arrangement or understanding with
respect to, the distribution of New Notes acquired in the Exchange Offer, you
(1) should not rely on our interpretations of the position of the SEC's staff
and (2) must comply with the registration and prospectus delivery requirements
of the Securities Act in connection with any resale transaction.
If you are a broker-dealer and receive New Notes for your own
account pursuant to the Exchange Offer, you must acknowledge that you will
deliver a prospectus in connection with any resale of such New Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, you will not be deemed to admit that you are an "underwriter"
within the meaning of the Securities Act. If you are a broker-dealer, you may
use this prospectus, as it may be amended or supplemented from time to time,
in connection with the resale of New Notes received in exchange for Old Notes
acquired by you as a result of market-making or other trading activities. For
a period of 90 days after the expiration of the Exchange Offer, we will make
this prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution."
In addition, you may offer or sell the New Notes in certain
jurisdictions only if they have been registered or qualified for sale there,
or an exemption from registration or qualification is available and is
complied with. Subject to the limitations specified in the registration rights
agreement, we will register or qualify the New Notes for offer or sale under
the securities laws of any jurisdictions that you reasonably request in
writing. Unless you request that the sale of the New Notes be registered or
qualified in a jurisdiction, we currently do not intend to register or qualify
the sale of the New Notes in any jurisdiction.
Substantial Leverage; Liquidity
Leverage
In connection with the Merger and Merger Financing, we incurred
significant indebtedness. As of December 31, 1998, we had: (i) total
consolidated indebtedness of approximately $312.4 million; and (ii) $101.6
million of additional revolving borrowings available under the new credit
facility, subject to customary conditions. In addition, subject to the
14
<PAGE>
restrictions in the new credit facility and the indenture, we may incur
significant additional indebtedness, which may be secured, from time to time.
The level of our indebtedness could have important
consequences, including:
o limiting cash flow available for general corporate purposes, including
acquisitions, because a substantial portion of our cash flow from
operations must be dedicated to debt service;
o limiting our ability to obtain additional debt financing in the future
for working capital, capital expenditures or acquisitions;
o limiting our flexibility in reacting to competitive and other changes in
the industry and economic conditions generally; and
o exposing us to risks inherent in interest rate fluctuations because
certain of our borrowings may be at variable rates of interest, which
could result in higher interest expense in the event of increases in
interest rates.
Conditions that may impact our ability to repay our Debt
Our ability to pay or to refinance our indebtedness will depend
upon our future operating performance, which will be affected by general
economic, financial, competitive, legislative, regulatory, business and other
factors beyond our control.
We anticipate that our operating cash flow, together with
money we can borrow under our new credit facility, will be sufficient to meet
anticipated future operating expenses, capital expenditures and to service
debt as it becomes due. However, if our future operating cash flows are less
than currently anticipated we may be forced, in order to meet our debt service
obligations, to reduce or delay acquisitions or capital expenditures, sell
assets or reduce operating expenses. If we were still unable to meet our debt
service obligations, we could attempt to restructure or refinance our
indebtedness or seek additional equity capital. There can be no assurance
that we will be able to accomplish that on satisfactory terms, if at all.
In addition, subject to the restrictions and limitations
contained in our debt agreements, we may incur significant additional
indebtedness to finance future acquisitions, which could adversely affect our
operating cash flows and our ability to service indebtedness. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
Restrictive Covenants
The indenture governing the notes contains various covenants
that limit our ability to engage in certain transactions. These covenants
limit our and certain of our subsidiaries' ability to:
o borrow and to place liens on assets
o pay dividends or make certain other restricted payments
o enter into certain transactions with affiliates; or
o merge or consolidate with any other person or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of the
assets of Insilco.
In addition, our new credit facility contains other and more
restrictive covenants and prohibits us from prepaying our other indebtedness
(including the notes). Our new credit facility also requires us to maintain
15
<PAGE>
specified financial ratios and satisfy certain other financial condition
tests. Our ability to meet those financial ratios and tests can be affected by
events beyond our control, and there can be no assurance that we will meet
those tests. A breach of any of these covenants could result in a default
under our new credit facility and/or the notes. Upon the occurrence of an event
of default under our new credit facility, the lenders could elect to declare
all amounts outstanding under our new credit facility to be immediately due
and payable and terminate all commitments to extend further credit. If we were
unable to repay those amounts, the lenders could proceed against the
collateral granted to them to secure that indebtedness. We have pledged
substantially all of our assets, other than assets of our foreign
subsidiaries, as security under our new credit facility. We cannot assure you
that, if the lenders under our new credit facility accelerate the repayment of
borrowings thereunder, we will have sufficient assets to repay our new credit
facility and our other indebtedness, including your notes. See "Description
of Certain Indebtedness--New Credit Facility."
Subordination
The notes rank junior to all of our existing and future senior
indebtedness, including all indebtedness under our new credit facility. In
addition, the note guarantee of each guarantor will rank junior to all of
senior indebtedness of such guarantor (including the guarantees of our bank
credit facility) to the same extent that the notes rank junior to senior
indebtedness of Insilco. As of December 31, 1998 Insilco and the guarantors
would have had approximately $191.1 million of senior indebtedness,
substantially all of which would have been secured borrowings.
As a result of such subordination, if:
(i) Insilco and the guarantors are insolvent or enter into a
bankruptcy or similar proceeding;
(ii) Insilco fails to make a payment when due on senior
indebtedness; or
(iii) any senior indebtedness is accelerated
then the holders of such senior indebtedness and any other creditors of
subsidiaries, if any, must be paid in full before the holders of the notes may
be paid. If we or the guarantors incur any additional debt that ranks equally
with the notes, the holders of such debt will be entitled to share ratably
with you in any proceeds distributed in connection with any insolvency,
liquidation, reorganization, dissolution or other winding-up of Insilco or the
guarantors. This may have the effect of reducing the amount of such proceeds
paid to you.
In addition, we cannot make any cash payments to you if we have
failed to make payments to holders of senior indebtedness. Under certain
circumstances, we cannot make any payments to you for a period of up to 179
days if we have defaulted (other than failures to make payments) on our senior
indebtedness covenants.
Certain of our subsidiaries have not guaranteed the notes. As
a result, the notes are not debt of such subsidiaries, and holders of
indebtedness and other liabilities will effectively be senior to your claims
against such subsidiaries. As of December 31, 1998, these subsidiaries had
$24.5 million of outstanding liabilities, including trade payables. See
"Description of Notes--Subordination."
Holding Company Structure
We conduct all of our operations through subsidiaries, and our
ability to meet our debt service obligations is dependent upon the receipt of
dividends from our direct and indirect subsidiaries.
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<PAGE>
o Subject to the provisions of the indenture, future borrowings by our
subsidiaries may contain restrictions or prohibitions on the payment of
dividends by such subsidiaries to Insilco. See "Description of
Notes--Certain Covenants."
o Under applicable state law, our subsidiaries may be limited in amounts
that they are permitted to pay as dividends on their capital stock.
Possible Inability to Repurchase Notes upon Change of Control
Upon the occurrence of certain change of control events, you
may require us to purchase your notes at 101% of their principal amount, plus
accrued interest. Please note that the terms of our new credit facility limit
our ability to purchase your notes in such circumstances. Any of our future
debt agreements may contain similar restrictions and provisions. Accordingly,
we may not be able to satisfy our obligations to purchase your notes unless we
are able to refinance or obtain waivers with respect to our new credit
facility and certain other indebtedness. We cannot assure that we will have
the financial resources to purchase your notes, particularly if such change of
control event triggers a similar repurchase requirement for, or results in the
acceleration of, other indebtedness. Our new credit facility currently
provides that certain change of control events will constitute a default and
could result in the acceleration of our indebtedness under the new credit
facility.
Customer Concentration; Absence of Long-Term Contracts
A significant portion of our sales are made to a relatively
small group of major customers. In 1998, sales to Ford represented
approximately 9% of our net sales and sales to a group of our nine next
largest customers represented approximately 22% of net sales.
Our reliance on these major customers exposes us to
o the risk of changes in the business condition of our major customers and
o the risk that the loss of a major customer could adversely affect
Insilco's results of operations.
While we have supplied Ford for 40 years, Ford is not
contractually bound to purchase supplies from us in the future. Thus, our
relationship with Ford is subject to termination at any time. If we were to
lose Ford as a customer, our results of operations would be adversely affected.
Cyclical Markets
A substantial portion of our revenues derive from sales to
markets that have been historically, and are likely to continue to be,
cyclical. For example, our Automotive Components Group, which accounted for
approximately 40% of Insilco's net sales and 46% of adjusted operating income
before the allocation of corporate overhead for the year ended December 31,
1998, primarily serves the automobile OEM market and the automobile parts
aftermarket through the manufacture of automotive heat exchangers and related
tubing, and automatic transmission and suspension components. (For the year
ended December 31, 1998, however, approximately 17% and 36% of the Automotive
Components Group's net sales were attributable to the automotive aftermarket
and non-automotive OEMs, respectively.) The automobile industry has
experienced recessionary or slow growth conditions for substantial periods in
the past and may experience recessionary conditions in the future. Any
substantial weakening of the automobile industry would have an adverse effect
on our results of operations.
Seasonality; Production Disruption
In certain of our businesses in which there is high customer
concentration or high production seasonality, we would be exposed to
potentially significant revenue losses if we (or our customers) were to
experience substantial disruption in production. With the continued emphasis
on reductions in component inventories and "just-in-time" deliveries,
especially in the automotive industry, any disruption in our production or by
our major customers, through work stoppages or otherwise, could have an
immediate and adverse effect on our results of operations.
17
<PAGE>
Additionally, a portion of our revenues and operating income
are exposed to the seasonality of the yearbook production cycle. A majority of
the annual revenues of Taylor are recognized in our second quarter. Any
disruption during the peak production period (April to June) through work
stoppages, loss of production facilities or otherwise, has caused and could in
the future cause lost revenues or delay revenue recognition in the year in
which it occurred or increase expenses and adversely affect future years'
contract renewals.
Competition
The businesses in which we are engaged are highly competitive
and in some cases highly fragmented, with many small manufacturers. In some of
our businesses, especially the data grade connector business and the heat
exchanger business, we compete with entities having significantly more
resources. In certain other businesses we compete with entities that have a
greater share of the relevant market and lower costs. As competition
increases, profit margins on some of our significant business lines could
decrease, and in the more fragmented markets consolidation could occur,
resulting in the creation of larger and financially stronger competitors.
We believe that, to remain competitive and maintain or increase
profitability, we must pursue a strategy focusing on growth and product
innovation. However, our competitors can be expected to continue to seek their
own growth, to improve the design and performance of their products, to reduce
costs of existing competitive products and to introduce new products with
competitive price and performance characteristics. Although we believe that,
with respect to most of our businesses, we have certain technological,
manufacturing and other advantages over our competitors, maintaining these
advantages will require continued investment in research and development,
sales and marketing, productivity improvements and information systems. We
cannot assure you that we will have sufficient resources to continue to make
such investments, that such investments will be successful or that we will be
able to maintain our existing competitive advantages.
Technology and the Development of New Products
The markets for many of our products, particularly the data
grade connector products, are characterized by technological change, evolving
industry standards, product customization and frequent new product
introductions, which may render existing or proposed products noncompetitive
or obsolete.
Many of our products require significant planning, design,
development and testing at the technological, product and manufacturing
process levels. Moreover, many of our customers use our products and
proprietary technologies as components of other products which they
manufacture or assemble, which may become uncompetitive or obsolete.
Although we work closely with our customers to stay informed
with respect to product development, we cannot assure you that any of the
products we are currently developing or those to be developed in the future,
will be completed in any particular time frame or that our or our customers'
products or proprietary technologies will not become uncompetitive or obsolete.
Acquisition Growth Strategy; Management and Funding of Growth
We have historically pursued an acquisition strategy and
recently completed an acquisition of a precision stamping company that
specializes in "deep drawn" components for the electronics, automotive and
consumer markets. We are currently in negotiations with respect to another
potential acquisition as part of our ongoing strategy to promote growth. See
"Summary--Recent Developments." There are various risks associated with
pursuing a growth strategy of this nature.
o Any future growth will require us to manage our expanding domestic and
international operations, integrate new businesses and adapt our
operational and financial systems to respond to changes in our business
environment, while maintaining a competitive cost structure.
18
<PAGE>
o The acquisition strategy will continue to place demands on our
management to improve our operational, financial and management
information systems, to develop further the management skills of our
managers and supervisors, and to continue to retain, train, motivate and
effectively manage our employees.
Our failure to manage growth effectively could have a material adverse effect
on us. We also cannot assure you that suitable acquisition candidates will be
available or that acquisitions can be completed on reasonable terms.
Additionally, our ability to maintain and increase our revenue
base and to respond to shifts in customer demand and changes in industry
trends will be partially dependent on our ability to generate sufficient cash
flow or obtain sufficient capital for the purpose of, among other things,
financing acquisitions, satisfying customer contractual requirements and
financing infrastructure growth. We cannot assure you that we will be able to
generate sufficient cash flow or that financing will be available on
acceptable terms (or permitted to be incurred under the terms of our new
credit facility, the indenture and any future indebtedness) to fund our future
growth.
Environmental Matters
Our operations are subject to federal, state, local and foreign
laws and regulations relating to the storage, handling, generation, treatment,
emission, release, discharge and disposal of certain substances and wastes. As
a result, we are involved from time to time in administrative or legal
proceedings relating to environmental matters and have incurred in the past
and will continue to incur capital costs and other expenditures relating to
environmental matters.
Certain properties now or previously owned by us are undergoing
remediation. Liability under environmental laws may be imposed on current and
prior owners of property or businesses without regard to fault or to knowledge
about the condition or action causing the liability. As an owner and operator
of those properties, we may be required to incur costs relating to the
remediation, and environmental conditions could lead to claims for personal
injury, property damage or damages to natural resources.
We have also in the past and may in the future be named a
potentially responsible party ("PRP") at off-site third-party disposal sites
to which our businesses have sent waste.
We believe, based on current information, that any costs we may
incur relating to environmental matters will not have a material adverse
effect on our business, financial condition or result of operations. We cannot
assure you, however, that we will not incur significant fines, penalties or
other liabilities associated with noncompliance or clean-up liabilities or
that future events, such as changes in laws or the interpretation thereof, the
development of new facts or the failure of other PRPs to pay their share, will
not cause us to incur additional costs that could have a material adverse
effect on our business, financial condition or results of operations. See
"Business--Environmental Regulation and Proceedings."
Dependence on Key Personnel
Our success depends to a significant extent upon the services
of our senior management and other management in our various businesses. We
could be adversely affected if any of these persons were unwilling or unable
to continue in our employ.
Risks Associated with Foreign Operations; Exchange Rate Fluctuations
Our products are manufactured and assembled at facilities in
the United States, the Dominican Republic, Germany, Ireland, the United
Kingdom and Mexico and sold in many foreign countries. In 1997, less than 9%
of our net sales and costs of goods sold occurred outside the United States
and Canada. International manufacturing and sales are subject to inherent
risks, including changes in local economic or political conditions, the
impositions of currency exchange restrictions, unexpected changes in
19
<PAGE>
regulatory environments, potentially adverse tax consequences and exchange
rate risk. We cannot assure you that these factors will not have a material
adverse impact on our production capabilities or otherwise adversely affect
our business and operating results.
Control by Principal Shareholders
We are wholly owned by Holdings, and approximately 69.0% of the
outstanding shares of Holdings' common stock is held by the DLJMB Funds. As a
result of their stock ownership, the DLJMB Funds control us and (subject to
any agreement they may have with CVC as described in "Description of Capital
Stock--Other Stockholder Arrangements") have the power to elect all of our
directors, appoint new management and approve any action requiring the
approval of the holders of common stock, including adopting amendments to the
certificate of incorporation and approving acquisitions or sales of all or
substantially all of our assets.
The general partners of each of the DLJMB Funds are affiliates
or employees of Donaldson, Lufkin & Jenrette, Inc. ("DLJ, Inc."). DLJ Capital
Funding, Inc., which is an agent and lender under our new credit facility, and
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC"), which was the
initial purchaser of the Old Notes, are also affiliates of DLJ, Inc.
Circumstances may occur in which the interests of such
principal shareholders could be in conflict with your interests. In addition,
such shareholders may have an interest in pursuing transactions that, in their
judgment, enhance the value of their equity investment in Insilco, even though
such transactions may involve risks to the holders of the notes.
Fraudulent Transfer Statutes
Federal or state fraudulent transfer laws permit a court, if it
makes certain findings, to
o avoid all or a portion of Insilco's obligations to you;
o subordinate Insilco's obligations to you to other existing and future
indebtedness of Insilco, entitling other creditors to be paid in full
before any payment is made on the notes; and
o take other action detrimental to you, including, in certain
circumstances, invalidating the notes.
In that event, there would be no assurance that you would ever be repaid.
Under federal and state fraudulent transfer laws, in order to
take any of the actions described above, courts will typically need to find
that, at the time the notes were issued, we:
(i) issued the notes with the intent of hindering, delaying or
defrauding current or future creditors; or
(ii) received less than fair consideration or reasonably equivalent
value for incurring the indebtedness represented by the notes and
(1) were insolvent or were rendered insolvent by reason of the
issuance of the notes,
(2) were engaged, or about to engage, in a business or transaction
for which our assets were unreasonably small; or
(3) intended to incur, or believed (or should have believed) we would
incur, debts beyond our ability to pay as such debts mature (as all
of the foregoing terms are defined in or interpreted under such
fraudulent transfer statutes),
20
<PAGE>
Different jurisdictions define "insolvency" differently.
However, we generally would be considered insolvent at the time we incurred
the indebtedness constituting the notes if (i) the fair market value (or fair
saleable value) of our assets is less than the amount required to pay our
total existing debts and liabilities (including the probable liability on
contingent liabilities) as they become absolute or matured or (ii) we were
incurring debts beyond our ability to pay as such debts mature. We cannot
assure you as to what standard a court would apply in order to determine
whether Insilco was "insolvent" as of the date the notes were issued, and we
cannot assure you that, regardless of the method of valuation, a court would
not determine that Insilco was insolvent on that date. Nor can we assure you
that a court would not determine, regardless of whether Insilco was insolvent
on the date the notes were issued, that the payments constituted fraudulent
transfers on another ground.
Our obligations under the notes are guaranteed by certain of
our subsidiaries, and the guarantees also may be subject to review under
various laws for the protection of creditors, including federal and state
fraudulent conveyance and fraudulent transfer laws. In such a case, the
analysis set forth above would generally apply.
In addition, creditors could also claim that, since the
guarantees were incurred for the benefit of Insilco (and only indirectly for
the benefit of the guarantors), the obligations of the guarantors thereunder
were incurred for less than reasonably equivalent value or fair consideration.
Courts could take actions similar to those outlined above. Please note that,
in an attempt to limit the applicability of fraudulent transfer laws, the
indenture limits the amount of each guarantee to the amount that will result
in it not constituting a fraudulent conveyance or improper corporate
distribution, and we cannot assure you as to what standard a court would apply
in making a determination as to what would be the maximum liability of each
guarantor.
Lack of Public Market
The New Notes are being offered to holders of the Old Notes,
which were issued on November 9, 1998 to a limited number of investors. There
is currently no active trading market for the notes, and it is not possible to
predict how the notes will trade in the secondary market or whether such
market will be liquid or illiquid. If a trading market does develop, the
notes may trade at a discount from their initial offering price, depending
upon prevailing interest rates, the market for similar securities and other
factors, including economic conditions and the financial condition, and the
performance of, and prospects for, Insilco. The liquidity of, and trading
markets for, the notes may also be adversely affected by declines in the
market for high yield securities generally. We do not intend to apply for
listing of the notes on any securities exchange or for quotation through
NASDAQ.
Year 2000
Many existing computer programs utilized globally use only two
digits to identify a year in the date field. These programs, if not
corrected, could fail or create erroneous results after the century date
changes on January 1, 2000 or when otherwise dealing with dates later than
December 31, 1999. We have implemented a comprehensive "Year 2000" compliance
program and believe that our internal systems are Year 2000 compliant or will
be upgraded or replaced in connection with previously planned changes to
information systems prior to the need to comply with Year 2000 requirements.
The costs incurred to implement our Year 2000 compliance
program have been immaterial to date and we presently expect to incur less
than $1.0 million of costs in total.
However, we are uncertain as to the extent our customers and
vendors may be affected by Year 2000 issues that require commitment of
significant resources and may cause disruptions in the customers' and vendors'
businesses. Moreover, Year 2000 issues present a number of risks that are
beyond our reasonable control, such as:
o the failure of utility companies to deliver electricity,
o the failure of telecommunications companies to provide voice and data
services,
21
<PAGE>
o the failure of financial institutions to process transactions and
transfer funds,
o the failure of vendors to deliver materials or perform services required
by us and
o the collateral effects on us of the effects of Year 2000 issues on the
economy in general or on our customers in particular.
Although we believe that our Year 2000 compliance program is
designed to appropriately identify and address those Year 2000 issues that are
subject to our reasonable control, there can be no assurance that our efforts
in this regard will be fully effective or that Year 2000 issues will not have
a material adverse effect on our business, financial condition or results of
operations. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources--Year 2000
Compliance."
22
<PAGE>
USE OF PROCEEDS
We will not receive any cash proceeds from the issuance of the
New Notes offered hereby. New Notes will be exchanged for Old Notes as
described in this prospectus on our receipt of Old Notes in like principal
amount. The Old Notes surrendered in exchange for the New Notes will be
retired and canceled. Accordingly, the issuance of the New Notes will not
result in any change in the indebtedness of Insilco.
The net proceeds to us from the sale of the Old Notes together
with the warrants was approximately $116 million (after deduction of
underwriting discounts and commissions and other expenses of the offering).
Such net proceeds, together with borrowings under our new credit facility,
were used to repurchase the 10(1)/(4)% notes.
23
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization
of Insilco as of December 31, 1998. This table should be read in conjunction
with the Consolidated Financial Statements.
<TABLE>
As of December 31,
1998
(in millions)
------------------
<S> <C>
Cash and cash equivalents........................... $ 7.4
======
Long-term debt:
Revolving Credit Facility..................... $ 65.9
Term Loan..................................... 125.0
10(1)/(4)% Senior Subordinated Notes.......... 1.3
12% Senior Subordinated Notes................. 120.0
Other debt obligations........................ 0.2
------
Total long-term debt (including current
portion).................................. 312.4
------
Stockholders' deficit......................... (136.9)
------
Total capitalization...................... $175.5
======
</TABLE>
24
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The selected historical consolidated financial data presented
below as of and for each of the years in the five year period ended December
31, 1998 are derived from our Consolidated Financial Statements and
accompanying notes included elsewhere herein, which have been audited by KPMG
LLP, independent certified public accountants. The information in this table
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements.
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------------------------
1994 1995 1996 1997 1998
---- ---- ---- ---- ----
(in millions)
<S> <C> <C> <C> <C> <C>
Operations Data:
Net sales............................................. $438.4 $449.5 $492.4 $528.2 $535.6
Operating income(1)................................... 9.5 38.9 48.4 51.1 17.3
Other income (expense):
Interest expense.................................... (29.1) (19.5) (18.3) (20.5) (29.2)
Interest income..................................... 1.8 1.4 0.7 2.8 1.0
Other income, net(2)................................ 3.2 13.9 7.7 3.4 5.8
------ ------ ------ ------ ------
Income (loss) from continuing operations before income
taxes and extraordinary item........................ (14.6) 34.7 38.5 36.8 (5.1)
Income tax expense (benefit).......................... (5.7) (16.7) (13.3) (13.4) 0.9
------ ------ ------ ------ ------
Income (loss) from continuing operations before
extraordinary item.................................. (20.3) 18.0 25.2 23.4 (4.2)
Income (loss) from discontinued operations, net of
tax(3).............................................. (9.7) (15.4) 13.8 58.9 --
------ ------ ------ ------ ------
Income (loss) before extraordinary item............... (30.0) 2.6 39.0 82.3 (4.2)
Extraordinary item, net of tax........................ (2.1) -- -- (0.7) (5.9)
------ ------ ------ ------ ------
Net income (loss)..................................... $(32.1) $2.6 $39.0 $81.6 $(10.1)
====== ====== ====== ====== ======
Balance Sheet Data (at period end):
Working capital....................................... $33.9 $44.9 $51.4 $39.5 $67.2
Total assets.......................................... 368.7 340.1 348.4 302.7 323.0
Long-term debt........................................ 198.1 186.5 161.0 257.7 312.4
Stockholders' equity (deficit)........................ (13.5) (15.8) 33.4 (102.3) (136.9)
Ratio Data:
Ratio of Earnings to Fixed Charges(4)................. -- 2.63x 2.91x 2.64x --
</TABLE>
- ----------
(1) Operating income in 1994 and 1995 includes the deduction for the
amortization of Reorganization Goodwill of $34.8 million and $16.2 million,
respectively, due to the adoption of "fresh start" accounting principles.
Operating income in 1995 includes a gain of $4.3 million related to a change
in our pension plan (see Note 12 to the Consolidated Financial Statements
appearing elsewhere herein).
(2) Other income, net in 1995 includes favorable adjustments of $3.6 million
related to our environmental liabilities and $1.5 million related to the
resolution of several legal disputes and a $4 million gain on the sale of
ide corporate assets. Other income, net in 1996 includes a $2.2 million
favorable adjustment related to the satisfaction of certain of our
environmental liabilities following completion of a site clean-up for an
amount less than previously estimated.
(3) In March 1997, we completed the sale of its Office Products Business with
the divestiture of the Rolodex Business for $112.6 million, net of
transaction costs, resulting in a gain of $57.8 million, net of taxes of
$37.2 million. The divestiture of the Rolodex Business was preceded in 1996
by the divestiture of Rolodex Electronics and Curtis. The proceeds from
these sales aggregated $21.8 million (see Note 20 to the Consolidated
Financial Statements for unaudited pro forma financial information with
respect to these divestitures).
In July 1998, we amended our Form 10-K to account for the sale of the Office
Products Business as a discontinued operation and, accordingly, the
consolidated statements of operations and cash flows for the periods prior
to the sale have been reclassified. Revenues associated with the
discontinued Office Products Business for the years 1994, 1995, 1996 and
1997 were $105.2 million, $111.7 million, $80.1 million and $10.8 million,
respectively.
(4) Ratio of earning to fixed charges equals (i) income from continuing
operations before income taxes, plus cash and non-cash interest expense and
imputed interest expense related to operating rents divided by (ii) cash
and non-cash interest expense, plus imputed interest expense related to
operating rents. In 1994 earnings were insufficient to cover fixed charges
by $15.1 million, primarily due to amortization expense of reorganization
goodwill recognized that year. In 1998 earnings were insufficient to cover
fixed charges by $5.3 million, primarily due to merger expenses incurred
that year.
25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
Insilco's three primary business segments have different
operating and growth characteristics.
The Automotive Components segment designs, manufactures, and
distributes component products used in automotive, heavy-equipment, and other
transportation vehicles. Growth and performance in this segment is tied closely
to the vehicle production rates of automotive and heavy-equipment
manufacturers as well as after-market demand for replacement products.
The growth and performance of the Technologies segment is
dependent on the demand for its customers' end products and network
infrastructure build-outs. The Technologies segment feels it has aligned
itself with market leaders in the electric, electrical, telecommunications and
data communications markets.
Insilco is one of the largest producers of yearbooks to middle
and high school markets and colleges. The growth and performance of the
Specialty Publishing segment is dependent on the growth rate of the domestic
school age population and on increasing the proportion of students who
purchase school yearbooks.
Insilco's Other segment includes two operating units that fall
below the quantitative reporting thresholds and do not meet all of the
criteria for aggregation with our reportable segments. The two units consist
of: (1) a manufacturer of high speed welded tube mills and other machinery and
equipment for the heat exchanger market (typically sold to suppliers and OEMs)
and (2) a welded stainless steel tubing manufacturer that provides tubing and
tubing products to a variety of markets, including pipe and tube distributors,
recreational, marine and construction.
We consummated several material transactions in 1998, 1997 and
1996 that resulted in significant changes to our debt and capital structure.
A summary of these transactions is as follows:
o The Mergers: On August 17, 1998, we completed a series of
transactions. These transactions included, among other things, the
formation by Insilco Holding Co. ("Holdings") (then a wholly owned
subsidiary of Insilco) of a wholly owned subsidiary ("ReorgSub"),
followed by the merger of ReorgSub with and into Insilco (the
"Reorganization Merger"), pursuant to which each stockholder of
Insilco had his or her shares of Insilco converted into the same
number of shares of Holdings and the right to receive $0.01 per share
in cash, and Holdings became the parent of Insilco.
Promptly following the Reorganization Merger, a second merger took
place pursuant to which Silkworm Acquisition Corporation
("Silkworm"), an affiliate of DLJMB, merged with and into Holdings
(the "Merger," and together with the Reorganization Merger, the
"Mergers") and each share of Holdings Common Stock was converted into
the right to receive $43.47 in cash and 0.03378 of a share of
Holdings Common Stock. Thus, as a result of the Mergers, each
stockholder of Insilco, in respect of each of his or her shares,
received $43.48 in cash and retained 0.03378 of a share of Holdings
Common Stock.
Following the Mergers:
o Insilco's existing stockholders retained, in the aggregate,
approximately 10.1% (9.4% on a fully diluted basis) of the
outstanding shares of Holdings Common Stock;
o the DLJMB Funds held approximately 69.0% (69.8% on a fully
diluted basis) of the outstanding shares of Holdings Common
Stock;
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<PAGE>
o 399 Venture Partners Inc., an affiliate of Citibank, N.A.
("CVC"), purchased shares of Silkworm which were converted in
the Merger into approximately 19.3% (17.8% on a fully diluted
basis) of the outstanding shares of Holdings Common Stock; and
o management of Insilco purchased approximately 1.7% (1.5% on a
fully diluted basis) of the outstanding shares of Holdings
Common Stock.
Immediately prior to the effectiveness of the Reorganization Merger,
each outstanding option to acquire shares of the common stock of
Insilco granted to employees and directors, whether or not vested
(the "Options") was canceled and in lieu thereof, each holder of an
Option received a cash payment in an amount equal to (x) the excess,
if any, of $45.00 over the exercise price of the Option multiplied by
(y) the number of shares subject to the Option, less applicable
withholding taxes (the "Option Cash Payments"). Approximately $3.6
million of Option Cash Payments were used by certain holders of such
Options to purchase shares or equity units of Holdings.
o The Merger Financing: The total amount of cash required to consummate
the foregoing transactions was approximately $204.4 million. This
amount was financed with (i) gross proceeds of approximately $70.2
million from the issuance by Silkworm of units (which were converted
into units of Holdings (the "Holdings Units") in the Merger), each
unit consisting of $1,000 principal amount at maturity of 14% Senior
Discount notes due 2008 (the "Holdings Senior Discount Notes") and
one warrant to purchase 0.325 of a share of Holdings Common Stock at
an exercise price of $0.01 per share, (ii) the issuance by Silkworm
to the DLJMB Funds, CVC and certain members of management of Insilco,
for an aggregate consideration of approximately $56.1 million, of
1,245,138 shares of Silkworm common stock (which were converted into
Holdings Common Stock in the Merger), (iii) the issuance by Holdings
to the DLJMB Funds, for an aggregate consideration of $35.0 million,
of 1,400,000 shares of the Holding's 15% Senior Exchangeable
Preferred Stock due 2012 ("PIK Preferred Stock") and the DLJMB
Warrants to purchase 65,603 shares of Holdings Common Stock at an
exercise price of $0.001 per share, and (iv) approximately $43.1
million of new borrowings under Insilco's existing credit facility
(the "Existing Credit Facility").
We incurred $20.9 million of costs related to the merger in 1998.
o Refinancing of 10(1)/(4)% Subordinated Debt: As a result of the
Merger, we were required to make an Offer to Purchase (as defined in
the indenture relating to the 10(1)/(4)% Notes) all of the
outstanding 10(1)/(4)% Notes at 101% of their aggregate principal
amount, plus accrued interest. To fund a portion of the repurchase of
the 10(1)/(4)% Notes, Insilco, on November 9, 1998, completed the
sale of $120 million of 12% Senior Subordinated Notes due 2007 (the
"12% Notes") with warrants to purchase 62,400 shares of Holdings
common stock at $45 per share. The net proceeds from the sale of the
12% Notes, which was approximately $116.4 million after payment of
$3.6 million in underwriting fees to DLJSC and other expenses, along
with approximately $30.0 million in borrowings under Insilco's Credit
Facilities, were used to repurchase the 10(1)/(4)% Notes plus the
accrued and unpaid interest. As of December 31, 1998, we purchased
$148.5 million of these notes and in February 1999, purchased an
additional $1.5 million. As of March 26, 1999, there is an aggregate
of $26,000 principal amount of 10(1)/(4)% Notes outstanding.
In addition, on November 24, 1998, we amended and restated our Bank
Credit Agreement to, among other things, provide for two credit
facilities: a $175 million revolving loan and $125 million term loan.
o Acquisitions: In 1996, we acquired Great Lake, Inc. ("Great Lake"),
which serves the automotive, heavy truck and industrial manufacturing
radiator replacement market and the automotive aluminum tube business
of Helmut Lingemann GmbH & Co. (the "Lingemann Business") for
approximately $37.7 million in the aggregate including transaction
fees and expenses.
27
<PAGE>
These acquisitions have been accounted for as purchases and,
accordingly, the purchase prices have been allocated to the assets
and liabilities acquired based on their fair values at the
acquisition dates. The operating results of the businesses acquired
have been included for the period subsequent to their acquisition
dates. (See Note 20 for pro forma results). The fair value of the
assets acquired totaled $47.5 million and the liabilities assumed
totaled $9.8 million.
o Divestitures: The Office Products Business of Insilco's Office
Products/Specialty Publishing Group was divested in three separate
transactions during 1996 and the first quarter of 1997. The 1996
transactions included the divestitures of Insilco's computer
accessories business (Curtis) and electronic organizer business
(Rolodex Electronics) for $21.8 million in the aggregate which was
used to reduce Insilco's bank indebtedness. On March 5, 1997, the
remainder of the Office Products Business, which consisted of the
Rolodex Business, was sold for net cash proceeds of approximately
$112 million (the "Rolodex Proceeds"). As a result of the sale of the
Rolodex Business, the Office Products Business segment is being
accounted for as a discontinued operation (See "Discontinued
Operations").
o 1997 Amended and Restated Credit Agreement: We entered into an
Amended and Restated Credit Agreement as of July 3, 1997 (the
"Existing Credit Facility") that among other things, provided for (i)
a $200 million revolving credit facility, (ii) a $50 million sublimit
for commercial and standby letters of credit, and (iii) a $50 million
sublimit for advances in selected foreign currencies.
o Issuance of 10(1)/(4)% Subordinated Debt: On August 12, 1997, we
issued $150 million aggregate principal amount of 10.25% Senior
Subordinated Notes due 2007 (the "10(1)/(4)% Notes"), realizing
therefrom net proceeds of $145.9 million.
o Share Repurchase: On July 10, 1997, using the proceeds from the sale
of the Rolodex Business, we purchased an aggregate of 2,857,142
shares of our common stock for $110 million. On August 12, 1997, we
completed a tender offer pursuant to which we purchased an additional
2,857,142 shares for $110 million. These shares were purchased with
proceeds received from the issuance of $150 million aggregate amount
of the 10(1)/(4)% Notes.
These transactions have had a significant impact on our results of
operations and financial position. Results of operations have been
affected by increases in the amortization of intangibles, inventory
costs, depreciation, interest expense, and deferred financing and
prepayment fees. As a result of these transactions, our consolidated
results for 1998, 1997 and 1996 are not directly comparable. Pro
forma results of operations, which assume these transactions occurred
at the beginning of their respective periods, are presented in Note
20 of the Notes to the Consolidated Financial Statements.
Results of Operations
The table below is a summary (in thousands) of net sales from
continuing operations, operating income from continuing operations and net
income (loss) for the periods ended December 31, 1998, 1997, and 1996,
respectively. This presentation and the discussion that follows is based on a
management approach and is consistent with the basis and manner in which our
management internally disaggregates financial information for the purposes of
assisting in making internal operating decisions (see Note 18 of the
Consolidated Financial Statements).
28
<PAGE>
1998 1997 1996
-------- -------- --------
Net sales from continuing operations
Automotive Components............. $213,365 $193,839 $169,280
Technologies...................... 189,781 198,941 183,663
Specialty Publishing.............. 101,325 98,222 99,020
Other............................. 31,158 37,231 40,442
-------- -------- --------
Total.......................... $535,629 $528,233 $492,405
======== ======== ========
Operating income from continuing
operations
Automotive Components............. $ 23,015 $ 21,859 $ 21,722
Technologies...................... 21,169 26,734 27,604
Specialty Publishing.............. 4,945 7,299 5,136
Other............................. 1,290 4,748 5,175
Unallocated amounts:
Corporate operating expenses.... (7,752) (9,138) (9,704)
Significant legal expenses...... (1,954) (400) --
Severance and write-downs....... (2,542) -- (1,500)
Merger fees and expenses........ (20,890) -- --
-------- -------- --------
Total operating income from
continuing operations........ $ 17,281 $ 51,102 $ 48,433
======== ======== ========
Net income (loss) $(10,081) $ 81,644 $ 39,053
======== ======== ========
1998 Compared to 1997
Consolidated Results of Operations: Net sales from continuing
operations in 1998 increased $7.4 million, or 1%, to $535.6 million from
$528.2 million in 1997. The increase in sales was due primarily to higher
sales from the Automotive Components segment, which increased $19.5 million or
10% over 1997. This increase was due primarily to higher heat exchanger and
tubing sales, which were up 16%. These increased sales were partially offset
by a 2% decrease in the sales of transmission related components. The increase
in automotive component sales was partly offset by a decrease in sales of
technologies related components, which declined $9.1 million or 5%. Although
connector product sales increased 7%, sales of wire and cable assemblies,
transformers and precision stampings declined a combined 9%. In addition,
sales of heat exchanger machinery and equipment and welded stainless steel
tubing products decreased a combined $6.1 million or 16%.
Operating income from continuing operations in 1998 decreased
$33.8 million, or 66%, to $17.3 million from $51.1 million in 1997.
Contributing to this decrease in operating income were merger expenses
relating to our August 1998 merger with DLJMB, charges for severance expenses
totaling $2.3 million related to workforce reductions at Corporate, and in the
Specialty Publishing and Technologies segments and write-downs related to
lease cancellation costs of $0.2 million. In addition, we incurred higher
legal expenses relating to two significant lawsuits. Excluding the effects of
these items, operating income in 1998 would have decreased $8.4 million, or
17% to $42.7 million from $51.5 million in 1997. This decrease (excluding the
legal and non-recurring charges) was due to lower operating income from the
Technologies, Specialty Publishing, and Other segments, which were partly
offset by a $1.2 million increase in operating income from the Automotive
Components segment.
Operating income from the Technologies segment declined $5.6
million, or 21%, from 1997 due mainly to the decline in sales and related
decrease in gross profits and higher depreciation expense. Operating income
from the Specialty Publishing segment was down $2.4 million from 1997 due to
higher delivery expenses, higher commissions and new marketing initiatives.
Operating income from Insilco's Other segment declined $3.5 million as a
result of a $3.6 million decrease in operating income relating to its heat
exchanger equipment and machinery product line, which had a 45% decrease in
sales.
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<PAGE>
Interest expense in 1998 increased $8.6 million to $29.2
million from $20.6 million in 1997, reflecting higher interest rates on
Insilco's 1998 debt offerings and higher debt levels as a result of the August
1998 mergers and the July 1997 share repurchase.
Interest income in 1998 decreased $1.8 million to $1.0 million
from $2.8 million in 1997, due to lower investment levels. Other income in
1998 increased $2.2 million to $3.0 million from $0.8 million in 1997, due to
various non- operating, non-recurring items. Equity income from Insilco's
unconsolidated joint venture, Thermalex, in 1998 increased $0.2 million to
$2.9 million from $2.7 million in 1997, due to an improvement in Thermalex's
net income as a result of higher sales.
We had an income tax benefit in 1998 of $0.9 million compared
to an expense of $13.4 million in 1997 due to the loss generated from
continuing operations in 1998. For information concerning the provision for
income taxes, as well as information regarding differences between effective
tax rates and statutory rates, see Note 13 of the Notes to the Consolidated
Financial Statements.
We recorded income from discontinued operations of $59.0
million in 1997 and $13.8 million in 1996 relating to the sale of our Office
Products Business, a significant line of business within Insilco's then Office
Products/Specialty Publishing segment. The sale of this line of business was
completed on March 5, 1997 with the sale of Rolodex for $112.6 million, net of
transaction costs. This sale was preceded in 1996 by the sale of Rolodex
Electronics and Curtis for an aggregate $21.8 million, net of transaction
costs. As a result of these sales, the Office Products Business has been
accounted for as a discontinued operation and, accordingly, the accompanying
consolidated statements of operations and cash flows for the periods prior to
the sales have been reclassified. Revenues associated with the discontinued
Office Products Business for the years 1998, 1997 and 1996 were $0, $10.8
million and $80.1 million, respectively.
We recorded an extraordinary item of $5.9 million, net of tax,
in 1998 relating to the write-off of deferred financing fees associated with
the Existing Credit Facility and the 10(1)/(4)% Notes.
Automotive Components Segment: Net sales in 1998 increased
$19.5 million, or 10%, to $213.4 million from $193.8 million in 1997. The
increase was due to higher aluminum and charged-air-cooler tubing, aluminum
heat exchangers, and radiator sales. These sales increases were partially
offset by lower transmission component and brass tubing sales.
Operating income in 1998 increased $1.2 million, or 5%, to
$23.0 million from $21.8 million in 1997 due to higher sales and the resulting
increase in gross profits while selling, general, administrative and
depreciation expenses were flat compared to 1997. Operating margins in 1998
decreased to 10.8% from 11.3% in 1997. This decrease is attributable to lower
gross profit margins due to a product mix shift to lower margin products
offset by a decline in selling, general and administrative expenses as a
percent of sales, which fell to 8.9% in 1998 from 9.7% in 1997.
Technologies Segment: Net sales in 1998 decreased $9.1 million,
or 5%, to $189.8 million from $198.9 million in 1997. While connector sales
were up 7% from 1997, sales of wire and cable assemblies, transformers and
precision stampings were collectively down 9% due a continuing slowdown in
global electronics markets and weak demand for electronic end products.
Operating income in 1998 decreased $5.5 million, or 21%, to
$21.2 million from $26.7 million in 1997. The decrease was due primarily to
the decrease in sales and a slight decrease in gross profit margins, which
resulted in lower gross profits. In addition, selling, general and
administrative expenses increased 3% and depreciation expense increased 17%.
The majority of the increase in depreciation was due to tooling investments
for new connector and precision stamped products.
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<PAGE>
Specialty Publishing Segment: Net sales in 1998 increased $3.1
million, or 3%, to $101.3 million from $98.2 million in 1997. A 5% increase in
yearbook sales was partially offset by a $2.0 million decrease in non-yearbook
publication sales.
Operating income in 1998 decreased $2.4 million, or 32%, to
$4.9 million from $7.3 million in 1997 due to higher yearbook delivery
expenses and increased selling, general and administrative expenses due to new
marketing initiatives and increased sales commissions to sales representatives
on higher yearbook revenues.
Other Segment: Net sales in 1998 decreased $6.0 million, or
16%, to $31.2 million from $37.2 million in 1997. A 45% decrease in heat
exchanger equipment sales, as a result of weak domestic and international
demand for welded tube-mills accounted for the decline.
Operating income in 1998 decreased $3.5 million, or 73%, to
$1.3 million from $4.8 million in 1997 due to the decline in heat exchanger
equipment sales.
1997 Compared to 1996
Consolidated Results of Operations: Net sales from continuing
operations in 1997 increased $35.8 million, or 7%, to $528.2 million from
$492.4 million in 1996. This increase was due to a $21.4 million, or 10%,
increase in automotive component sales due to the acquisition of Lingemann,
which was not owned for the full year in 1996. In addition, electronic and
telecommunications component sales increased $15.2 million, or 8%, primarily
due to higher sales of wire and cable assemblies, transformers, and precision
stampings.
Operating income from continuing operations in 1997 increased
$2.7 million, or 6%, to $51.1 million from $48.4 million in 1996. This
increase was due to increased productivity in the Specialty Publishing
segment, which accounted for $2.2 million of the increase. In addition, we
recorded a $1.5 million restructuring charge in 1996 for severance expenses
relating to a salaried workforce reduction in our Specialty Publishing
segment. A $0.9 million decrease in operating income from the Technologies
segment due to higher selling, general and administrative expenses partially
offset these gains. Operating margins in 1997 were flat at 9.7% compared to
9.8% in 1996.
Interest expense in 1997 increased $2.2 million to $20.6
million from $18.4 million in 1996 due to higher interest costs relating to
the 1997 debt financing and higher debt levels due to the July 1997 share
repurchase. Interest income in 1997 increased $2.1 million to $2.8 million
from $0.7 million in 1996. The increase reflects higher interest income earned
on the sales proceeds derived from Insilco's sale of the Rolodex Business on
March 5, 1997, which were later used in the share repurchase. Other income in
1997 decreased $4.0 million to $0.8 million from $4.8 million in 1996, due to
the inclusion in 1996 of a $2.2 million environmental liability settlement for
an amount less than previously estimated and several other smaller items.
Equity income from Thermalex in 1997 decreased $0.3 million to $2.6 million
from $2.9 million in 1996 due to additional expenses relating to Thermalex's
plant expansion and the start-up of a new extrusion press.
Automotive Components Segment: Net sales in 1997 increased
$24.6 million, or 15%, to $193.8 million from $169.2 million in 1996. The
increase is primarily attributable to the acquisition of Lingemann, which was
not owned for the full year in 1996. Sales for the full year in 1997 and the
partial year of 1996 relating to this acquisition were $31.6 million and $13.1
million, respectively. We also experienced higher sales of aluminum tubing,
charge-air-cooler tubing, radiators, and transmission components due to strong
OEM and supplier demand. The increase in transmission sales was also due to
the shift from three-speed to four and five-speed automatic transmissions,
which increased our content per vehicle produced.
Operating income in 1997 was flat at $21.9 million compared to
$21.7 million in 1996 due to increased expenses relating to the integration of
Lingemann. Selling, general and administrative expenses increased $4.8
million, of which $2.5 million was due to the acquisition of Lingemann and
$0.5 million related to our new R&D tech center.
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<PAGE>
Technologies Segment: Net sales in 1997 increased $15.2
million, or 8%, to $198.9 million from $183.7 million in 1996. The increase is
primarily due to increased sales across all product lines except connectors.
Sales of wire and cable assemblies were up 19% due to strong demand from
existing telecommunications customers and additional sales from new customers.
Transformer sales increased 9% over 1996 due to higher demand for
internationally certified products from electronic OEMs. Precision stampings
sales were up 7% due to new products and strong demand from automotive,
electrical control and circuit protection markets. Connector sales decreased
1% from the prior year as a result of price erosion within older product lines
and delayed new product introductions. International connector sales grew to
41% of sales in 1997 from 40% of sales in 1996.
Operating income in 1997 decreased $0.9 million, or 3%, to
$26.7 million from $27.6 million in 1996, as a result of lower operating
margins on connector products caused by competitive price pressures and delays
in introducing new, higher margin connector products. Also impacting operating
income were additional start-up costs relating to our new El Paso stamping
facility. Higher sales and gross profits from wire and cable assemblies offset
a portion of these declines.
Specialty Publishing Segment: Net sales in 1997 were flat at
$98.2 million compared to $99.0 million in 1996. The lack of growth is
attributable to flat yearbook sales and a $1.9 million decrease in
non-yearbook publication sales.
Operating income in 1997 increased $2.2 million, or 42%, to
$7.3 million from $5.1 million in 1996 due to increased productivity relating
to workflow improvements.
Other Segment: Net sales in 1997 decreased $3.2 million, or
8%, to $37.2 million from $40.4 million in 1996. Heat exchanger equipment
sales decreased 15% and sales of welded stainless steel tubing products were
down 4%.
Operating income in 1997 decreased $0.4 million, or 8%, to $4.8
million from $5.2 million in 1996. A $1.5 million decrease in operating income
from heat exchanger equipment sales was offset by a $1.1 million increase in
operating income from welded stainless steel tubing products.
Liquidity and Capital Resources
In general, we require liquidity for working capital, capital
expenditures, interest, taxes, debt repayment and our acquisition strategy. Of
primary importance are our working capital requirements, which increase
whenever we experience strong incremental demand or geographical expansion. We
expect to satisfy our liquidity requirements through a combination of funds
generated from operating activities and the funds available under our new
credit facility.
Operating activities: For the year ended December 31, 1998,
net cash provided from operating activities was $4.3 million compared to $45.5
million provided from operating activities during the same period in 1997. The
increase in cash requirements was primarily the result of the merger expenses
and lower operating income as previously discussed. In addition, we required
additional working capital due to the timing of year-end collections from a
large automotive components customer and two large technologies customers,
which accounted for a significant increase in accounts receivable and were
collected in January.
Investing activities: For the year ended December 31, 1998,
capital expenditures were $3.4 million less than the comparable period for
1997. Capital spending for equipment in the Automotive Components segment
accounted for approximately 47% and spending related to connector and
precision stamping equipment and tooling in the Technologies segment accounted
for 39%. We expect our 1999 capital expenditures to be flat compared to 1998.
We also acquired two small cable assembly operations for a total of $2.3
million during 1998. These operations are located in Ireland and Northern
Ireland and are being integrated into the Technologies segment.
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<PAGE>
We received cash dividends from our investment in Thermalex in
1998 and 1997 of $1.3 million and $1.5 million, respectively. In addition, as
of December 31, 1998, we had a dividend receivable from this investment of
$2.9 million relating to the declaration of a dividend that was paid in
February 1999.
Financing activities: We have completed several transactions
during 1998, 1997 and 1996 relating to our Merger with DLJMB and changes in
our debt and equity structure. For details regarding these transactions see
the beginning of this section.
Our annual cash interest expense on our 12% Notes, which are
due 2007, is approximately $14.4 million. Interest on these notes is payable
semi-annually on February 15 and August 15 of each year commencing February
15, 1999.
The new credit facility consists of a $125.0 million Term
Facility and a $175.0 million Revolving Facility, which provides for revolving
loans and up to $50 million of letters of credit. The Revolving Facility can
be used to fund acquisitions, provide working capital, and for other general
corporate purposes. The Term Facility has a maturity of seven years and is
subject to mandatory quarterly prepayments of $0.3 million for the first six
years and quarterly payments of approximately $29.4 million in the seventh
year. Cash interest on the Term Facility is based on a leverage ratio. At
December 31, 1998, the applicable spread was LIBOR plus 3.75%. Payments of
principal and interest on the Term Facility are due quarterly each March,
June, September and December. The Revolving Facility terminates on July 8,
2003 and interest is based on a leverage ratio. At December 31, 1998, the
applicable spread was LIBOR plus 3.00%. Availability under the Revolving
Facility will decrease by $21.4 million in May 1999 unless we have entered
into a definitive acquisition agreement prior to that time, and by $17.5
million on each of July 10, 2001 and July 10, 2002.
The new credit facility is secured by a first-priority
perfected lien on substantially all of our assets, including a pledge of all
of the stock of our domestic subsidiaries and 65% of the stock of our foreign
subsidiaries. Payment of principal and interest on amounts borrowed under the
new credit facility are guaranteed by all of our domestic subsidiaries. As of
March 24, 1999, we have approximately $83.0 million of available funds under
this facility.
Future cash uses during fiscal 1999 include the purchase of the
remaining $1.5 million in outstanding 10(1)/(4)% Notes. We also acquired the
stock of EFI, a precision stamping operation, on January 25, 1999 for $23.6
million including acquisition costs. EFI will be integrated into the
Technologies segment. See Note 21 of the Notes to Consolidated Financial
Statements.
We expect our principal sources of liquidity to be from our
operating activities and funding from the Revolving Credit Facility. We
further expect that these sources will enable us to meet our long-term cash
requirements for working capital, capital expenditures, interest, taxes, debt
repayment, and future acquisitions for the foreseeable future.
Accumulated Deficit: At December 31, 1998, we had a
stockholders' deficit totaling $136.9 million, which is a result of both the
1998 mergers and 1997 share repurchase previously described in this section.
Market Risk and Risk Management
Foreign currency exchange rate movements create a degree of
risk to our operations by affecting the U.S. dollar value of sales made in
foreign currencies and the U.S. dollar value of costs incurred in foreign
currencies. Foreign currency exchange rate movements also affect our
competitive position, as exchange rate changes may affect business practices
and/or pricing strategies of non-U.S. based competitors.
Our general policy is to use foreign currency borrowings as
needed to finance our foreign currency denominated assets. We use such
borrowings to reduce our asset exposure to the effects of changes in exchange
rates - not as speculative investments.
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<PAGE>
As of December 31, 1998, we did not have any derivative
instruments in place for managing foreign currency exchange rate risks.
Considering both the anticipated cash flows from operations for the next
quarter and the foreign loans in place at year end, a hypothetical 10%
weakening of the U.S. dollar relative to all other currencies would not
materially adversely affect expected first quarter 1999 earnings or cash
flows. This analysis is dependent on actual foreign sales and costs during the
next quarter occurring within 10% of the budgeted forecasts. The effect of the
hypothetical change in exchange rates ignores the effect this movement may
have on other variables including competitive risk. If it were possible to
quantify the competitive impact, the results could well be different than the
sensitivity effects noted above. In addition, it is unlikely that all
currencies would uniformly strengthen or weaken relative to the U.S. dollar.
In reality, some currencies may weaken while others may strengthen.
We also are exposed to changes in interest rates primarily from
our long-term debt arrangements. As of December 31, 1998, we had no interest
rate derivative instruments to manage exposure to interest rate changes.
A comparison of the net fair value of all interest sensitive
financial instruments using a hypothetical 100 basis point increase in
interest rates along the entire interest rate yield curve as of December 31,
1998 is as follows (in thousands):
Hypothetical
Fair Market Fair Market
Description of Security Value Value
----------- ------------
12% Senior Subordinated Notes due 2007... $123,600 $117,852
The Year 2000 Issues
Many existing computer programs utilized globally use only two
digits to identify a year in the date field. These programs, if not
corrected, could fail or create erroneous results after the century date
changes on January 1, 2000 or when otherwise dealing with dates later than
December 31, 1999. This "Year 2000" issue is believed to affect virtually all
companies and organizations, including Insilco.
We rely on computer-based technology and primarily utilize a
variety of third-party hardware and software and to a minimal degree some
proprietary software. In addition to such information technology ("IT")
systems, our operations rely on various non-IT equipment and systems that
contain embedded computer technology. Third parties with whom we have
commercial relationships, including raw materials suppliers and service
providers (such as banking and financial services, data processing services,
telecommunications services and utilities), are also highly reliant on
computer-based technology.
In 1996, we commenced an assessment of the potential effects of
the Year 2000 issue on our business, financial condition and results of
operations. In conjunction with such assessment, we developed and implemented
a "Year 2000" compliance program as described below.
Third-Party IT Systems. The majority of our IT systems are
third party systems for which we have received Year 2000 compliant versions.
We do not expect any significant outlay of cash for these systems as all of
the third party systems are under current maintenance agreements which provide
for continuing operation including functions involving Year 2000. The
strategy instituted by us to identify and address Year 2000 issues affecting
third-party IT Systems includes contacting all third-party providers of
computer hardware and software to secure appropriate representations to the
effect that such hardware or software is or will timely be Year 2000 compliant.
Proprietary IT Systems. We do not rely heavily on Company
developed proprietary IT systems. Pursuant to our Year 2000 compliance
program, we have examined our proprietary IT systems for Year 2000 problems.
All such systems that were identified as relating to a critical function and
that were not Year 2000 compliant are being fixed. We believe that nearly all
of our proprietary IT systems have been fixed and we are in the process of
testing the remediated systems for Year 2000 compliance.
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<PAGE>
Non-IT Systems. We have undertaken a review of our non-IT
systems and are in the process of fixing such systems that are within our
control. We expect to complete this remediation effort by April 30, 1999.
Non-IT Vendors and Suppliers. We procure our raw materials and
operating supplies from a vast network of vendors located both within and
outside the United States. As a part of our contingency planning effort, we
are continually assessing the Year 2000 readiness of our important vendors in
order to identify any significant exposures that may exist and establish
alternate sources or strategies where necessary.
Costs. The costs incurred to implement our Year 2000
compliance program have been immaterial to date and we presently expect to
incur less than $1.0 million of costs in the aggregate. All of our Year 2000
compliance costs have been or are expected to be funded from our operating
cash flow. Our Year 2000 compliance budget does not include material amounts
for hardware replacement because we have historically employed a strategy to
continually upgrade our business systems. Consequently, our Year 2000 budget
has not required the diversion of funds from or the postponement of the
implementation of other planned IT projects.
Risks Associated With Year 2000 Issues. Our Year 2000
compliance program is directed primarily towards ensuring that we will be able
to continue to perform three critical functions:
o make and sell our products,
o order and receive raw material and supplies, and
o pay our employees and vendors.
It is difficult, if not impossible, to assess with any degree
of accuracy the impact on any of these three areas of the failure of one or
more aspects of our compliance program.
The novelty and complexity of the issues presented and the
proposed solutions therefore and our dependence on the technical skills of
employees and independent contractors and on the representations and
preparedness of third parties are among the factors that could cause our
efforts to be less than fully effective. Moreover, Year 2000 issues present a
number of risks that are beyond our reasonable control, such as the failure of
utility companies to deliver electricity, the failure of telecommunications
companies to provide voice and data services, the failure of financial
institutions to process transactions and transfer funds, the failure of
vendors to deliver materials or perform services required by us and the
collateral effects on us of the effects of Year 2000 issues on the economy in
general or on our customers in particular. Although we believe that our Year
2000 compliance program is designed to appropriately identify and address
those Year 2000 issues that are subject to our reasonable control, there can
be no assurance that our efforts in this regard will be fully effective or
that Year 2000 issues will not have a material adverse effect on our business,
financial condition or results of operations.
Seasonality and Inflation
Insilco's specialty publishing segment is highly seasonal, with
a majority of sales occurring in the second and third quarter of the year. We
receive significant advance deposits from our Specialty Publishing customers
in the first and fourth quarters of each year. Our other segments are not
highly seasonal. See "Item 1. Business--Specialty Publishing."
The impact of inflation on Insilco's operations has not been
significant. However, there can be no assurance that a high rate of inflation
in the future would not have an adverse effect on our operating results.
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BUSINESS
Overview
We produce automotive, telecommunications and electronics
components, and are a leading specialty publisher of student yearbooks.
We report our financial results in four segments:
o the Automotive Components Group, which manufactures
o transmission components and assemblies and
o heat exchangers (such as radiators and air conditioning
condensers) and heat exchanger tubing;
o the Technologies Group, which manufactures
o high performance data-grade connectors for the
telecommunications and networking markets,
o cable and wire assemblies primarily for the
telecommunications market, and
o precision metal stampings and power transformers
primarily for the electronics market.
o Specialty Publishing, which produces student yearbooks and
other specialty books.
o Other, which manufactures stainless steel tubing and mills,
machinery and equipment for the heat exchanger market.
Our portfolio of businesses serves several market segments,
which we believe tends to minimize the effects of cyclicality and diversify
business risk from any one market. Our broad base of more than 17,000
customers includes automotive and non-automotive original equipment
manufacturers ("OEMs"), telecommunications, networking and electronics
companies and school yearbook departments nationwide.
We primarily focus on tailoring our products for
customer-specific applications in niche markets. For example, (1) we customize
products for particular customers and applications and (2) we develop
technology to enhance product function. We believe that this focus on niche
markets results in more stable revenues, higher margins and longer term
customer relationships (often as the sole supplier to that customer). From
fiscal 1994 to the year ended December 31, 1998, our net sales from continuing
operations increased from $438.4 million to $535.6 million, representing a
compound annual growth rate ("CAGR") of 5.1%, and Adjusted EBITDA (as we
define on page 13) increased from $56.6 million to $64.9 million, representing
a CAGR of 3.5%.
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<PAGE>
<TABLE>
Year Ended
December 31, 1998
Adjusted
Segment Sales EBITDA(1) Principal Products/markets Largest Customers
- ------- --------- ------------- --------------------------------------- ---------------------
(in millions)
<S> <C> <C> <C> <C>
Automotive $ 213.4 $ 33.4 --Transmission/suspension components --Ford
Components Group --Radiators/air conditioning condensors --Valeo
--Heat exchanger tubing --Caterpillar
--Behr
--Delphi
Technologies Group 189.8 28.4 --Cable harness assemblies --Nortel
--50/60 Hz transformers --Siemens
--Modular jacks & plugs --Littelfuse
--Precision high speed stamping --Ericsson
--Lucent
--IBM
Specialty Publishing 101.3 8.5 --School yearbooks --High Schools
--Universities
Other 31.1 2.3 --Stainless steel tubing --Tubing distributors
--Heat exchanger mills/equipment --Ford
Unallocated Corporate
Overhead -- $ (7.7)
------- ------
Total $ 535.6 $ 64.9
======= ======
</TABLE>
- ---------
(1) See footnote 6 to the "Summary Historical and Unaudited Pro Forma
Consolidated Financial Operating Data".
The Automotive Components Group:
The Automotive Components Group consists of two operating
units and a joint venture,
o Thermal Components which produces aluminum-and copper-based
heat exchanger tubing for automotive OEMs and Tier 1
suppliers, and also manufactures radiators, air
conditioning condensers and other heat exchangers for
automotive and industrial applications.
o Steel Parts which is the leading supplier of automatic
transmission clutch plates to Ford and produces other
stamped components for OEMs and Tier 1 suppliers.
o Thermalex, a joint venture owned equally by us and
Mitsubishi Aluminum, which is, management believes, the
nation's leading producer of precision extruded multi-port
aluminum heat exchanger tubing used in automotive
air-conditioning condensers. In 1998, Thermalex, which is
accounted for as an unconsolidated investment, contributed
$2.9 million to our consolidated pre-tax income and paid a
$1.3 million cash dividend to us. On a stand-alone basis,
Thermalex generated $12.0 million of EBITDA in 1998;
however, only the $1.3 million dividend is included in our
Adjusted EBITDA.
We believe that the impact of the automotive cycle on the
automotive components group's financial performance is lessened by the group's
sales to the automotive aftermarket and non-automotive OEMs, which represented
17% and 36%, respectively, of the group's 1998 net sales.
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<PAGE>
The Technologies Group:
Our Technologies Group generally focuses on niche products
which are designed for specific customer applications and seeks to supply all
or a substantial portion of its customers' requirements. The group has four
operating units:
o Escod Industries, a supplier of cable and wire assemblies
to the telecommunications market, including Northern
Telecom and Siemens Telecom Network;
o Stewart Connector, a producer of high performance
data-grade connectors for the computer networking and
telecommunications markets;
o Stewart Stamping, a producer of highly customized precision
stamped metal parts, primarily for the electronics
industry; and
o Signal Transformer, a producer of 50-60 Hz power
transformers used in a variety of products.
Specialty Publishing
Specialty Publishing consists of Taylor, one of the nation's
leading publishers of student yearbooks. We believe that Taylor was the first
major yearbook publisher to make extensive use of digital pre-press technology
as opposed to the more widely used pre-press process which involves manual
cutting, pasting and rescaling. We believe it uses digital pre-press
technology more extensively than its competitors, which offers yearbook
departments superior quality and greater flexibility in altering page design.
The student yearbook business is not very cyclical, has low customer turnover
and many of the sales are prepaid.
Other
o Romac which produces stainless steel tubing for marine,
architectural, which industrial and automotive
applications.
o McKenica which manufactures high speed welded tube mills
and other machinery and equipment for the heat exchanger
market.
Competitive Strengths
We believe we possess a number of competitive strengths,
including the following:
Strong Niche Market Positions
Many of our products are targeted to niche markets in which we
can capitalize on our ability to produce highly customized products designed
for a single customer or a specific application which often requires formal
qualification. We believe that the specialized knowledge and experience we
have gained from these niche markets cannot be easily duplicated or replaced
and strengthens our competitive position. As a result, we believe we have an
advantage in competing with potential new entrants attempting to displace us
as a supplier in many of its niche markets. We further believes that we are
the sole supplier to customers of many of our niche products. Examples of our
niche market products include automatic clutch plates for domestic Ford
automobiles and light trucks, certain customer-specific high-speed data-grade
transmission connectors, and certain customer-specific cable and wire
assemblies for Nortel and Siemens.
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<PAGE>
Long Standing Customer Base
Our customer base, characterized by many long-term
relationships, provides an ideal platform from which to offer new products to
existing customers. In addition, such long-term relationships provide us with
early insight into customers' changing needs and allow us to introduce
application-specific products. The length of our average relationship with its
ten largest customers is over twenty years.
Recognized Quality
We have received industry recognition and awards for quality.
Awards recently received include: Ford's Q1 Quality Award, Eastman Kodak's
Preferred Vendor Status, Littelfuse Supplier Ingenuity Award, Panasonic's (ACOM
Division) Supplier of the Year, Sensormatic's Preferred Vendor and Siemens
Success Supplier--Ship to Stock Award. In addition, several of our plants have
been certified as "QS 9000", "ISO 9001" or "ISO 9002", domestic and
international standards certification recognizing quality manufacturing
processes.
Experienced Management Team
The current management team, headed by chief executive officer,
Robert L. Smialek, significantly reduced Insilco's debt during the past
several years from $253.7 million on January 1, 1994 to $58.6 million prior to
our recapitalization in June 1997 (at which time we borrowed money to buy back
Insilco stock), while increasing adjusted EBITDA from $56.6 million in 1994 to
$64.9 million in the year ended December 31, 1998, representing a compound
annual growth rate of 3.5%. Management accomplished these improvements by
divesting certain non-core businesses such as paint products, computer
accessories and office products, focusing investments on its core businesses
and actively managing working capital.
Business Strategy
We seek sales growth through internal growth and acquisitions.
In addition, we seek to improve operating margins through cost reduction
programs and an on-going process of efficiency improvements. Our strategy
includes the following:
Focus on Niche Markets
Our primary focus is to tailor our products for customer
specific applications in niche markets. This strategy includes customizing
products for particular accounts and applications and developing technology to
enhance product function. We believe that this niche market focus results in
more stable revenues, higher margins and longer term, often sole-supplier,
customer relationships.
Develop New Products and Applications
We pursue internal growth by developing specialized products
and by developing new applications for existing products. To further this
goal, the Automotive Components Group formed a technical center to research
emerging trends in heat transfer technologies and to develop new products and
applications. One longer-term project involves adapting our condenser
technology for use in HVAC applications for the residential market. We believe
our heat exchanger technology could be used in the design of smaller, more
energy efficient aluminum condensers to replace the conventional copper/brass
condensers currently used in residential HVAC systems. In addition, working
with customers such as Xircom, we have introduced several new products at
Stewart Connector in 1998, including a Xircom PCMCIA modem containing multiple
standard RJ45 connectors. Finally, our investments in digital pre-press
technology at Taylor are designed to lower production costs and improve
yearbook quality.
39
<PAGE>
Increase Value Added Content
Our business strategy also emphasizes increasing value added
content to provide customers with integrated solutions rather than individual
components. For example, our Steel Parts unit has expanded its product
offering to include sub-assemblies in addition to component parts. Our
contract cable assembly unit has expanded its services to include complete
wire harness systems, and our high-precision stamping unit now offers a number
of finishing processes, in addition to designing and stamping high-precision
parts. By doing more to the components we produce, through value-added
assemblies and manufacturing processes, we are able to foster long-term
relationships with customers, and increase sales and margins. Moreover, OEM
customers are able to reduce their supplier base, while ensuring that an
integrated sub-assembly passes quality standards and meets exacting design
compatibility requirements.
Implement Cost Reduction Programs and Efficiency Improvements
We have a continual improvement philosophy which, by
recognizing and rewarding efficiency and quality improvements, has reduced
scrap rates, improved labor productivity and increased operating margins. In
addition, our individual businesses have automated manufacturing processes and
have increased production at lower cost plants, such as those in the Dominican
Republic, Mexico, Ireland and El Paso, Texas. For example, new equipment
installed at Thermal Components in 1996 has increased capacity, substantially
reduced cycle time, and lowered costs and product defect ratios. Taylor
Publishing has switched to automated pre-press operations and introduced a
pilot program through which selected customers are using the Internet to proof
and approve electronic copy, which we believe will lead to reduced pre-press
production costs.
Expand Strategic Acquisitions and Partnerships; Divestitures
We believe that we operate in highly fragmented industries
which provide many strategic acquisition and partnership opportunities.
Through acquisitions and partnerships, we seek to leverage our technical
expertise, customer contacts and managerial talent to augment our core
business, broaden our product lines, increase our geographic scope and better
serve our customers. For example, we just completed the acquisition of a
precision metal stamping company that adds "deep draw" precision stamping
capabilities, and significant new markets (e.g. consumer goods) and customers,
to our precision stamping business. In 1996, we acquired Great Lake, Inc.,
which expanded our product reach to include the automotive and heavy truck
radiator replacement market, and acquired the automotive aluminum tubing
business of Helmut Lingemann GmbH & Co., which expanded our international
market position in the automotive heat exchanger tubing market. We believe
that numerous acquisition candidates exist globally and intend to continue to
seek new acquisition opportunities in our technology and automotive segments.
In addition, we have explored and are continuing to explore divestiture
opportunities.
Business Segments
Insilco operates in three primary business segments: Automotive
Components, Technologies, which produces telecommunications and electronics
components, and Specialty Publishing. The percentages of Insilco's total net
sales by segment in each of its last three fiscal years were as follows:
1998 1997 1996
---- ---- ----
Automotive Components ................... 40% 37% 35%
Technologies ............................ 35 38 37
Specialty Publishing .................... 19 18 20
Other(1) ................................ 6 7 8
--- --- ---
Total ............................... 100% 100% 100%
=== === ===
- ---------
(1) This segment includes two operating units that fall below the quantitative
reporting thresholds. They are a manufacturer of machinery and equipment
for the heat exchanger market and a welded stainless steel tubing
manufacturer.
40
<PAGE>
For additional business segment information, see Note 18 to the
Consolidated Financial Statements.
Automotive Components Segment
The Automotive Components segment is made up of two operating
units, Thermal Components Group ("Thermal"), and Steel Parts Corporation
("Steel Parts"). The businesses in this segment manufacture automotive heat
exchangers and related tubing, and automatic transmission and suspension
components, respectively.
Tubing and Heat Transfer. Thermal is a vertically integrated
manufacturer of heat exchangers for the automotive, specialty vehicle, truck,
heavy equipment and off-road vehicle and industrial equipment markets. Its
products include thin wall aluminum and brass tubes used principally in heat
transfer applications, radiators, air conditioning condensers, and oil coolers
and heaters used in the manufacture and assembly of automotive heat exchangers.
Thermal uses a direct sales force and independent sales
representatives to market its products. Thermal sells to both original
equipment manufacturers ("OEMs") and aftermarket customers.
Thermalex, a joint venture owned equally by Insilco (through a
holding company subsidiary), and Mitsubishi Aluminum Co., Ltd., manufactures
multiport aluminum extrusions used principally in automotive air conditioning
condensers.
The markets for automobile heat-exchanger products are highly
competitive and have many participants, particularly automobile OEMs that
produce for their own use and several large independent manufacturers. Thermal
supplies tubes and, through Thermalex, extrusions to domestic automobile OEMs
and independent manufacturers. Thermal is an established supplier of welded
radiator tubes to manufacturers and repair shops in the heat-exchanger
aftermarket.
Thermal has manufacturing facilities in Alabama, Michigan,
South Carolina, Wisconsin and Germany. At December 31, 1998, Thermal
(excluding Thermalex) had 883 employees.
Transmission Components. Steel Parts manufactures automotive
parts consisting of close-tolerance precision metal stampings at its facility
in Indiana. Its products include clutch plates for automatic transmissions,
suspension parts for vibration-reducing assemblies and engine mounts.
Substantially all Steel Parts' sales are made to the domestic
automobile industry, either directly or indirectly through other independent
automotive parts suppliers. As a result, the demand for Steel Parts' products
historically has been heavily dependent on the level of new car production by
the domestic automobile industry. Steel Parts has also seen its production
content per automobile increase in recent years as automobile manufacturers
have moved from three-speed to four- and five-speed automatic transmissions.
The market for original equipment automobile parts is highly competitive and
has many participants, principally the automobile manufacturers themselves
because of their ability to make their own parts. Approximately 72%, 70% and
70% of Steel Parts' sales were to one of the "Big 3" domestic automotive
manufacturers in 1998, 1997 and 1996, respectively.
At December 31, 1998, Steel Parts had 361 employees.
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<PAGE>
Technologies Segment
The Technologies segment consists of four operating units,
Stewart Connector, Signal Transformer, Stewart Stamping and Escod Industries,
which manufacture telecommunication and electrical component products for the
computer networking, telephone digital switching, premises wiring, main frame
computer, automotive and medical equipment markets.
Specialized Connector Systems. Stewart Connector designs and
manufactures specialized high speed data connector systems, including modular
plugs, modular jacks, shielded and nonshielded specialized connectors, and
cable assemblies for telecommunications, cellular communications and data
transmission, including local and wide area networks. Its primary
manufacturing facility is located in Pennsylvania, with an assembly operation
in Mexico.
Stewart Connector sells its products throughout the world,
directly and through sales subsidiaries, and through a network of
manufacturers' representatives. Foreign sales accounted for approximately 36%
of Stewart Connector's sales in 1998, 41% in 1997 and 40% in 1996. It
maintains direct sales offices (and to a lesser extent, distribution
operations) in England, Japan and Germany and has numerous domestic and
foreign competitors, some of which are substantially larger than Stewart
Connector. Competition is based principally on price with respect to older
product lines, and on technology and product features for newer products and
to a lesser extent, patent protection.
At December 31, 1998, Stewart Connector had 1,139 employees.
Power Transformers. Signal Transformer manufactures both
standard "off-the-shelf" and custom-made power transformers serving a broad
customer base in a variety of industries. Signal's markets include
telecommunications, home and retail security systems, medical instrumentation,
gaming and entertainment and process controls. Signal markets its products
directly, utilizing catalogs and print advertising, and indirectly through
selective independent sales representatives in targeted regions of the
country. It has a customer base of over nine thousand accounts, consisting
of both OEMs and aftermarket resellers.
The electronic transformer industry includes both domestic and
foreign manufacturers and there are numerous competitors to Signal.
Competition is based on price and availability of product to meet customers'
needs. Signal has directed its marketing efforts for many years towards
engineers and other customers having specialized, low-volume demand and prompt
delivery requirements. To capitalize on an identified market niche, Signal
has a service that guarantees 24 hour delivery for small order quantities of
certain "off-the-shelf" transformers.
Signal manufactures its transformers at production facilities
located in the Dominican Republic, Puerto Rico and New York. The New York
facility also serves as Signal's major sales, administration and distribution
center.
At December 31, 1998, Signal had 519 employees.
Precision Stampings and Wireforms. Stewart Stamping is a tool
designer and subcontract manufacturer of precision stampings and wireformed
parts. Stewart Stamping manufactures components used in electrical devices
such as circuit breakers, electric fuses, lighting and process controls and
the electronics industries, including passive components such as capacitor
cans and connector contacts. Stewart Stamping sells its products to a broad
customer base primarily in the U.S. through a network of manufacturers'
representatives. Stewart Stamping manufactures its products at its plant in
Yonkers, New York and El Paso, Texas.
Stewart Stamping's competitors in each of its product lines are
numerous (including, in the case of metal stampings, its own customers), but
Stewart Stamping traditionally has focused on products that, because of the
engineering and manufacturing capability required to produce them, have the
potential for repeat business.
At December 31, 1998, Stewart Stamping had 320 employees.
42
<PAGE>
Cable and Wire Assemblies. Escod Industries produces
electronic cable assemblies, specialized wire harnesses and certain
telecommunication equipment subassemblies for sale to manufacturers of
telecommunications, computer and other electronics equipment. Escod's markets
generally are regional in nature. Escod has three production facilities in
the Carolinas, one in Florida, one in Northern Ireland and one in Ireland,
which are operated principally to serve local plants of OEMs. Because
substantially all of Escod's customers are OEMs having a number of production
facilities, the demand for Escod's products depends not only on the demand for
its customers' products, but also on its customers' varying utilization of
their production sites.
Telecommunications and computer OEMs account for the bulk of
Escod's sales. Two telecommunications OEMs directly or indirectly together
accounted for approximately 64%, 68% and 66% of Escod's total revenues in
1998, 1997 and 1996, respectively. Escod's dependence on these two major
customers makes its revenues and operating income sensitive to changes in
demand from those customers.
Competition in Escod's markets is based primarily on price and,
to a lesser extent, on responsiveness to customers' needs. The profitability
of Escod's sales generally depend on the relative raw material content, labor
productivity, quality of the products sold, proximity to customers and
timeliness of delivery. As a result of the low barriers to entry into Escod's
business and increased, low-cost foreign competition in recent years, Escod's
business has become intensely competitive.
At December 31, 1998, Escod had 292 employees.
Specialty Publishing Segment
Taylor Publishing Company is engaged primarily in the contract
design and printing of student yearbooks from which it derived at least 88% of
its revenues in each of the last three years. Its principal yearbook
customers are secondary (middle and senior high) schools. Other yearbook
customers include elementary schools, colleges and academies. Taylor also
publishes a variety of specialty books on a contract basis and a limited
number of its own publishing titles and provides reunion planning and other
services for alumni of schools, colleges and academies.
Competition in the yearbook industry is based upon customer
service, quality and price. The market for yearbooks is affected more by
demographic trends than by business cycles. Taylor offers several yearbook
lines with different graphic and typographic options and capabilities. Taylor
has expended significant resources in recent years to develop a system of
electronic copy preparation designed to enhance the quality and consistency of
photographs, reduce production costs and shorten the time required for
yearbook production. Taylor has developed proprietary software programs for
use by its customers in developing yearbooks. This software facilitates the
yearbook design work performed by schools and improves the overall production
process.
Taylor markets its yearbook services through commissioned
independent sales representatives who maintain contact with yearbook faculty
advisors, school principals and other key purchasing personnel. It also
trains students and their advisors in layout, design and marketing, conducts
seminars and workshops and provides supporting materials, including software,
to assist student yearbook staffs in the production process.
Yearbook production is highly seasonal. Orders are normally
obtained in the fall and finished yearbooks are delivered at or near the end
of the school year, typically late spring to early summer and to a lesser
degree, in the fall of the following school year. Deposits representing
approximately 25% of the yearbook contract price are due from the yearbook
customer upon its submission of the first set of yearbook pages. Given the
seasonal production cycle, Insilco typically receives significant cash
deposits commencing each November and continuing through each March. These
deposits are available to fund the working capital requirements of the
yearbook production cycle, and to a lesser extent, to provide Insilco working
capital for general corporate purposes.
43
<PAGE>
Taylor operates six production facilities in Texas and one in
Pennsylvania. Its work force reflects the seasonality of its business,
typically ranging from 1,000 to 1,700 full-time employees. At December 31,
1998, it had 1,327 employees.
Other Segment
Stainless Steel Tubing. Romac manufactures stainless steel
tubing for a variety of marine, architectural, automotive and decorative
applications at its facility in North Carolina. Substantially all of its
sales are domestic.
The markets for these products are highly competitive.
Competition is based principally on price and, to a lesser extent, on the
shapes and finishes that can be achieved with the tubing.
At December 31, 1998, Romac had 130 employees.
Heat exchanger machinery and equipment. McKenica manufactures
high speed welded tube mills and other machinery and equipment for the heat
exchanger market. It sells its products predominantly to automotive suppliers
and automotive OEMs.
At December 31, 1998, McKenica had 80 employees.
Divested Office Products Businesses
On September 3, 1996, Insilco sold Curtis, its computer
accessories business. On October 4, 1996, Insilco sold the Rolodex
Electronics product line. On March 5, 1997, Insilco sold the Rolodex
Business. Curtis, Rolodex Electronics and the Rolodex Business are referred
to collectively as the "Office Products Business." See Item 7 "Managements
Discussion and Analysis of Financial Condition and Results of Operations --
Discontinued Operations."
Patents and Trademarks
Insilco holds patents or trademarks in most of its businesses
which have expiration dates ranging from 1999 to 2019. Insilco expects to
maintain such patents and to renew the trademarks important to its business
prior to their expiration and does not believe the expiration of any one of
its patents will have a material adverse effect on any of its businesses.
Raw Materials and Supplies
The principal raw materials and supplies used by Insilco include:
o steel, aluminum, copper, zinc, brass and nickel (Automotive
Components Group);
o copper wire, steel, brass, aluminum, plastics, ceramics and
precious metals (Technologies Group); and
o paper, film and other photographic and printing supplies
(Specialty Publishing).
Insilco purchases these materials and supplies on the open
market to meet its current requirements and believes its sources of supply are
adequate for its needs.
44
<PAGE>
Backlog
Insilco's backlog by industry segment, believed to be firm, at
December 31, 1998 and 1997 follows (in thousands):
December 31,
---------------------
1998 1997
------- -------
Automotive Components............ 54,986 56,049
Technologies..................... 46,528 51,245
Speciality Publishing............ 120,017 113,232
Other............................ 5,190 3,347
------- -------
Total........................ 226,721 223,873
======= =======
Management believes that approximately $211 million of its 1998
backlog will be filled in 1999, and the remainder in 2000.
Employees and Labor Relations
At December 31, 1998, Insilco employed approximately 5,541
people on a full-time basis, of whom approximately 25% were covered by
collective bargaining agreements with various unions. The largest collective
bargaining unit covers approximately 563 employees. Among the union
agreements that will expire in 1999 are those covering certain union employees
of McKenica and Steel Parts. Insilco considers relations with its employees
to be good.
Insilco has defined benefit and defined contribution pension
plans covering substantially all employees. For information respecting
defined benefit pension plans, See Note 11 to the Consolidated Financial
Statements.
Environmental Regulation and Proceedings
Insilco's manufacturing operations involve the generation of a
variety of waste materials and are subject to extensive federal, state and
local environmental laws and regulations. The waste materials generated
include metal scrap from stamping operations, cutting and cooling oils,
degreasing agents, chemicals from plating and tinning operations, etching
acids and photographic and printing chemicals. Insilco uses offsite disposal
facilities owned by third parties to dispose of its wastes and does not store
wastes it generates to the extent such storage would require a permit.
Insilco does not treat, store or dispose of waste for others. Insilco is
required to obtain permits to operate various of its facilities, and these
permits generally are subject to revocation or modification.
Insilco has taken significant measures to address emissions,
discharges and waste generation and disposal; improve management practices and
operations in response to legal requirements; and internally audit compliance
with applicable environmental regulations and approved practices. These
measures include: raw material and process substitution; recycling and
material management programs; periodic review of hazardous waste storage and
disposal practices; and reviewing the compliance and financial status and
management practices of its offsite third-party waste management firms.
As a result of Insilco's 1993 reorganization, much uncertainty
has been removed concerning Insilco's potential liability for environmental
contamination at sites owned or operated by Insilco (and at third party
disposal and waste management facilities used by Insilco) prior to the filing
of its bankruptcy petition. During the reorganization, Insilco settled all
claims of the United States relating to Insilco's pre-petition date conduct at
previously owned or third party sites arising under the federal Comprehensive
Environmental Response, Compensation, and Liability Act ("CERCLA").
This settlement:
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<PAGE>
o discharged Insilco's liability to the United States at a
number of hazardous waste sites;
o protects Insilco from contribution claims of the remaining
potentially responsible parties;
o limits the amount Insilco may be required to pay the United
States in any one year on pre-petition claims; and
o provides that any such payment may be made in cash or, at
Insilco's option, common stock valued at 30% of the allowed
claim.
Insilco is also currently engaged in clean up programs at sites
located in Newtown, Connecticut, Mount Vernon, New York and Oak Creek,
Wisconsin. Insilco has established what it believes are appropriate reserves
for anticipated remedial obligations. Due to the establishment of these
reserves and the environmental settlements reached during Insilco's
reorganization, management does not believe that environmental compliance or
remedial requirements are likely to have a material adverse effect on Insilco.
Financial Information about Export Sales
In 1998, Insilco's export sales were $46.7 million or 9% of
consolidated sales. Export Sales in 1998 to Europe, Asia, Canada and Mexico
were $ 22.8 million, $ 8.8 million, $ 7.7 million and $3.0, respectively. All
other export sales in 1998 totaled $4.4 million. In 1997, Insilco's export
sales were $55.4 million or 10% of consolidated sales. Export sales in 1997
to Europe, Asia, Canada and Mexico were $21.2 million, $14.0 million, $9.7
million and $4.3 million, respectively. All other export sales in 1997
totaled $6.2 million. In 1996, export sales were $58.2 million or 12% of
consolidated sales. Insilco's transactions are primarily in U.S. dollars.
Corporate History
We have undergone significant change and restructuring in the
past five years. A review of the most significant developments follows, in
chronological order:
o On April 1, 1993, we emerged from Chapter 11 bankruptcy
proceedings pursuant to the Plan of Reorganization. The
Plan of Reorganization resulted in a reduction in our
liabilities by $532.3 million, an extraordinary gain
realized in 1993 of $448.3 million attributable to the
discharge of such liabilities, and a change in control of
us.
The Plan of Reorganization among other matters provided
for: (i) the issuance of 9,230,839 shares of our common
stock in exchange for allowed unsecured claims; (ii)
deferred payment of certain pre-petition claims, including
various state and Federal taxes and trade debt; and (iii)
provisions to issue additional stock to other unsecured
creditors over time at the pre-determined rate of 18 shares
of stock per $1,000 of allowed claim as those claims are
determined. Settlements were reached in 1997 on all
remaining claims pending in the Bankruptcy Court and the
Chapter 11 cases were closed on June 12, 1997.
o In 1994, we sold our paint products segment for $50.8
million, and entered into a long-term $285 million credit
facility that allowed us to retire our outstanding 10 3/8%
Senior Secured Guaranteed Notes due July 1, 1997 and 9 1/2%
Notes due 1997.
o In 1996, we acquired, for an aggregate purchase price of
approximately $37 million, Great Lake, an aftermarket
automotive, heavy truck and industrial radiator
manufacturer, and the Lingemann Business.
o We divested the office products business of our Office
Products/Specialty Publishing Group in three separate
transactions during 1996 and the first quarter of 1997. The
1996 transactions included the divestitures of
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<PAGE>
Curtis and Rolodex Electronics for an aggregate $21.8
million. On March 5, 1997, the Rolodex Business was sold
for net cash proceeds of approximately $112 million.
o Following the sale of the Rolodex Business, we refinanced
our existing debt.
o In the third quarter of 1997, using the proceeds from the
sale of the Rolodex Business and the proceeds received on
the issuance of the 10(1)/(4)% notes, we repurchased $220
million of Insilco common stock..
o On August 17, 1998, Holdings was formed followed by the
merger of ReorgSub with and into Insilco, pursuant to which
each of our stockholders had his or her shares of Insilco
converted into the same number of shares of Holdings and
the right to receive $0.01 per share in cash, and Holdings
became the parent of Insilco.
o Soon after this, a second merger took place pursuant to
which Silkworm Acquisition Corporation , an affiliate
DLJMB, merged with and into Holdings and each share of
Holdings Common Stock was converted into the right to
receive $43.47 in cash and 0.03378 of a share of Holdings
Common Stock. Thus, as a result of the Mergers, each of our
stockholders, in respect of each of his or her shares,
received $43.48 in cash and retained 0.03378 of a share of
Holdings Common Stock. Concurrently with the consummation
of the Mergers, the DLJMB Funds purchased 1,400,000 shares
of Holdings 15% Senior Exchangeable Preferred Stock due
2012 (the "PIK Preferred Stock"), and warrants to purchase
65,603 shares of Holdings Common Stock at an exercise price
of $.001 per share.
o Following the Mergers, (i) our existing stockholders
retained, in the aggregate, approximately 10.1% (9.4% on a
fully diluted basis) of the outstanding shares of Holdings
Common Stock; (ii) the DLJMB Funds held approximately 69.0%
(69.8% on a fully diluted basis) of the outstanding shares
of Holdings Common Stock; (iii) 399 Venture Partners Inc.,
an affiliate of Citibank, N.A. ("CVC"), purchased shares of
Silkworm which in the Merger were converted into
approximately 19.3% (17.8% on a fully diluted basis) of the
outstanding shares of Holdings Common Stock; and (iv)
management of Insilco purchased approximately 1.7% (1.5% on
a fully diluted basis) of the outstanding shares of
Holdings Common Stock.
o Immediately prior to the effectiveness of the
Reorganization Merger, each outstanding option to acquire
shares of the common stock of Insilco granted to employees
and directors, whether or not vested (the "Options") was
canceled and in lieu thereof, each holder of an Option
received a cash payment in an amount equal to (x) the
excess, if any, of $45.00 over the exercise price of the
Option multiplied by (y) the number of shares subject to
the Option, less applicable withholding taxes (the "Option
Cash Payments"). Certain holders of such Options elected to
utilize amounts otherwise receivable by them to purchase
stock or equity units of Holdings.
o The total amount of cash required to consummate the
foregoing transactions was approximately $204.4 million.
This amount was financed with (i) gross proceeds of
approximately $70.2 million from the issuance by Silkworm
of units (which were converted into units of Holdings (the
"Holdings Units") in the Merger), each unit consisting of
$1,000 principal amount of 14% Senior Discount Notes due
2008 (the "Holdings Senior Discount Notes") and one warrant
to purchase 0.325 of a share of Holdings Common Stock at an
exercise price of $0.01 per share, (ii) the issuance by
Silkworm to the DLJMB Funds, CVC and certain members of
management of Insilco, for an aggregate consideration of
approximately $56.1 million, of 1,245,138 shares of
Silkworm common stock (which was converted into Holdings
Common Stock in the Merger), (iii) the issuance by Holdings
to the DLJMB Funds, for an aggregate consideration of $35.0
million, of 1,400,000 shares of the PIK Preferred Stock by
Holdings and the DLJMB Warrants to purchase 65,603 shares
of Holdings Common Stock at an exercise price of $.001 per
share, and (iv) approximately $43.1 million of new
borrowings under our then existing $200 million credit
facility.
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<PAGE>
o The "change in control" of Insilco resulting from the
Mergers required Insilco to make an offer to repurchase the
10 1/4% notes. To finance this repurchase and also to
obtain an expanded line of credit for acquisitions,
Insilco: (i) issued the Old Notes realizing therefrom net
proceeds of approximately $116 million; and (ii) entered
into a new credit facility that includes a $125 million
term loan facility and a $175 million revolving credit
facility.
Properties
Insilco manufactures its products in various locations,
primarily in the United States. Management believes that Insilco's facilities
generally are well maintained and adequate for the purposes of which they are
used. Insilco's principal operating plants and offices at December 31, 1998
included the following properties:
<TABLE>
Approxim
ate Square Terms of
Business Segment Location Principal Use Footage Occupancy
- ------------------------ --------------------- --------------------- ------------ -----------
<S> <C> <C> <C> <C>
Automotive Components
Montgomery, AL Office/Manufacturing 137,325 Owned
Montgomery, AL Manufacturing 45,000 Leased
Franklin, WI Office/Manufacturing 123,200 Leased
Iron Ridge, WI Manufacturing 44,000 Owned
Montgomery, AL Office 10,890 Leased
Belleville, MI Manufacturing 42,000 Leased
Duncan, SC Manufacturing 100,000 Owned
Dortmund, Germany Manufacturing 45,000 Owned
Dortmund, Germany Office 8,500 Leased
Tipton, IN Office/Manufacturing 235,350 Owned
Technologies
Durham, NC Office 3,205 Leased
N. Myrtle Beach, SC Manufacturing 46,506 Owned
Lake Wales, FL Manufacturing 42,000 Owned
Taylorsville, NC Manufacturing 44,350 Owned
Loris, SC Manufacturing 36,960 Owned
Colorado Springs, Co. Warehouse 1,400 Leased
Loris, SC Warehouse 9,500 Leased
Winterhaven, FL Warehouse 3,000 Leased
Carraoe, County Manufacturing 25,120 Leased
Galway, Ireland
Larne, County Antrim, Manufacturing 25,000 Leased
Northern Ireland
Inwood, NY Office/Manufacturing 39,361 Owned
St. Just, PR Manufacturing 41,214 Leased
San Cristobal, Dominican Manufacturing 27,773 Leased
Republic
Glen Rock, PA Office/Manufacturing 84,000 Owned
Santa Clara, CA Office 133 Leased
Essex, UK Office 485 Leased
Freidrichsdorf/Ts.,
Germany Office 1,500 Leased
Yokohama, Japan Office/Warehouse 4,695 Leased
Cananea, Mexico Warehouse/ 22,646 Leased
Manufacturing
</TABLE>
48
<PAGE>
<TABLE>
Approxim
ate Square Terms of
Business Segment Location Principal Use Footage Occupancy
- ------------------------ --------------------- --------------------- ------------ -----------
<S> <C> <C> <C> <C>
Yonkers, NY Office/Manufacturing 190,000 Owned
El Paso, TX Office/Manufacturing 41,400 Leased
Specialty Publishing
Dallas, TX Office/Manufacturing 320,000 Owned
Dallas, TX Manufacturing 25,000 Owned
San Angelo, TX Manufacturing 33,200 Leased
El Paso, TX Manufacturing 31,000 Leased
El Paso, TX Manufacturing 52,000 Leased
Malvern, PA Manufacturing 41,000 Leased
San Angelo, TX Manufacturing 7,800 Leased
Orange, CA Office 3,373 Leased
Other
Troutman, NC Office/Manufacturing 110,000 Owned
Buffalo, NY Office/Manufacturing 78,800 Leased
Corporate
Dublin, OH Office 18,300 Leased
</TABLE>
- ---------
(1) Property is leased from an industrial development authority in connection
with an expired industrial revenue bond and is eligible for purchase by
Insilco for a nominal consideration at the expiration of the lease term.
Substantially all of Insilco's material domestic assets, including owned
properties, are subject to major encumbrances securing Insilco's
obligations under the new credit facility.
Insilco believes that all of its production facilities have additional
production capacity.
Legal Proceedings
On January 14, 1997, Taylor sued one of its principal
competitors in the yearbook business, Jostens, Inc. ("Jostens"), in the U.S.
District Court for the Eastern District of Texas, alleging violations of the
federal antitrust laws as well as various claims arising under state law. On
May 13, 1998, the jury in the case returned a verdict in favor of Taylor, and,
on June 12, 1998, the judge rendered his judgment in the amount of $25.2
million plus interest at an annual rate of 5.434%. On January 14, 1999, in
response to a motion by Jostens, the judge entered an order vacating the jury
verdict and granting judgment in Jostens' favor. Insilco will seek to
overturn the order and reinstate the jury verdict on appeal, but is uncertain
what the actual amount is, if any, that Taylor will recover from Jostens.
From time to time, Insilco is involved in litigation relating
to claims arising out of its operations in the normal course of its business.
Insilco maintains insurance coverage against potential general liability and
certain other claims in an amount it believes to be adequate. In Insilco's
opinion, the outcome of these matters will not have a material adverse effect
on Insilco's financial condition, liquidity or results of operations.
49
<PAGE>
MANAGEMENT
The following table sets forth the name, age and position of
each person who is a director or executive officer of Insilco.
<TABLE>
Name Age Position
- ---- --- --------
<S> <C> <C>
Robert L. Smialek.................. 55 Chairman of the Board, President and Chief Executive Officer
David A. Kauer..................... 43 Vice President and Chief Financial Officer
Kenneth H. Koch.................... 43 Vice President, General Counsel and Secretary
Leslie G. Jacobs................... 48 Vice President, Human Resources and Assistant Secretary
Michael R. Elia.................... 40 Vice President and Controller
Thompson Dean...................... 40 Director
William F. Dawson, Jr.............. 34 Director
</TABLE>
Robert L. Smialek has served as Chairman of the Board,
President and Chief Executive Officer of Insilco since May 1, 1993. From
October 1992 to May 1993, Mr. Smialek served as the President and Chief
Operating Officer of the Temperature and Appliance Controls Group of Siebe
plc, a global controls and engineering firm. From September 1990 to October
1992, Mr. Smialek served as President and Chief Operating Officer of Ranco,
Inc., a subsidiary of Siebe, Inc. Mr. Smialek is a director of General Cable
Corporation and Gleason Corporation.
David A. Kauer has been Vice President and Chief Financial
Officer since May 1998, Vice President and Treasurer from April 1997 to May
1998 and Treasurer from September 1993 to April 1997. Previously, Mr. Kauer
was the Controller and Treasurer of Johnson Yokogawa Corporation (a joint
venture of Yokogawa Electric Corporation and Johnson Controls, Inc.) from
October 1989 to September 1993.
Kenneth H. Koch has been Vice President, General Counsel and
Secretary since October 1993. Prior thereto, Mr. Koch was a partner with the
law firm of Porter, Wright, Morris & Arthur.
Leslie G. Jacobs has been Vice President, Human Resources since
August 1993 and was Director of Human Resources from January 1990 to August
1993. Prior thereto, Mr. Jacobs was Director, Compensation and Employee
Programs, of Rockwell International.
Michael R. Elia has been Vice President and Controller since
August 1998. Prior thereto, Mr. Elia was Chief Financial Officer of Jordan
Telecommunication Products and from 1994 to 1997, he was Director of Strategic
Planning for Fieldcrest Cannon, Inc. From 1983 to 1994, Mr. Elia held senior
financial positions with Insilco's Technologies Group.
Thompson Dean has been the Managing Partner of DLJMB Inc. since
November 1996. Prior thereto, Mr. Dean was a Managing Director of DLJMB Inc.
(and its predecessor). Mr. Dean serves as a director of Commvault Inc., Von
Hoffman Corporation, Manufacturers' Services Limited, Phase Metrics, Inc., and
Arcade Holding Corporation.
William F. Dawson, Jr. has been a Principal of DLJMB Inc. since
August 1997. From December 1995 to August 1997, he was a Senior Vice President
in DLJ's High Yield Capital Markets Group. Prior thereto, Mr. Dawson was a
Vice President in the Leveraged Finance Group within DLJ's Investment Banking
Group. Mr. Dawson serves as a director of Von Hoffman Corporation and
Thermadyne Holdings Corporation.
50
<PAGE>
EXECUTIVE COMPENSATION
The aggregate remuneration of the Chief Executive Officer
during 1998 and the three other most highly compensated executive officers of
Insilco whose salary and bonus exceeded $100,000 for the fiscal year ended
December 31, 1998, is set forth in the following table:
Summary Compensation Table
<TABLE>
Securities
Other Annual Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation Options (#) Compensation ($)
- --------------------------- ---- ---------- --------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Smialek, President
and CEO......................... 1998 $ 550,000 -- -- -- $ 13,519(4)
1997 550,000 300,000 -- -- 9,901
1996 537,499 235,000 -- -- 13,251
David A. Kauer, Vice President
and Chief Financial Officer..... 1998 196,667 40,000 -- -- 93,830(5)
1997 164,000 80,000 -- $ 10,000 3,369
1996 143,917 58,000 -- 1,500 3,109
Kenneth H. Koch, Vice
President, General Counsel
and Secretary................... 1998 173,500 27,500 -- -- 393,254(6)
1997 162,833 75,000 -- 10,000 3,314
1996 151,167 78,373 -- 2,500 3,114
Leslie G Jacobs, Vice President,
Human Resources and
Assistant Secretary............. 1998 174,167 13,500 $ 13,500(3) -- 388,921(7)
1997 165,000 70,000 -- 10,000 4,031
1996 155,833 62,500 -- -- 3,762
Michael R. Elia, Vice President,
and Corporate Controller.... 1998 70,288(1) 44,875(2) 14,875(3) -- 99,294(8)
1997 -- -- -- -- --
1996 -- -- -- -- --
</TABLE>
- ---------
(1) Joined the Company on August 1, 1998.
(2) Includes $30,000 sign-on bonus.
(3) Portion of bonus deferred to purchase equity units (see Long-term
Incentive Plan Table).
(4) Includes employer contributions under Insilco's Employee Thrift Plan
401(k) (the "Thrift Plan") and insurance premiums paid by Insilco.
(5) Includes $90,300 from the Value Appreciation Agreement and employer
contributions under the Thrift Plan and insurance premiums paid by Insilco.
(6) Includes $390,000 from the Value Appreciation Agreement and employer
contributions under the Thrift Plan and insurance premiums paid by Insilco.
(7) Includes $384,800 from the Value Appreciation Agreement and employer
contributions under the Thrift Plan and insurance premiums paid by Insilco.
(8) Includes moving expenses and employer contributions under the Thrift Plan
and insurance premiums paid by Insilco.
Stock Options
None of the executive officers were granted any stock options
in 1998.
51
<PAGE>
The following table provides certain information regarding the
number and the value of Options exercised during 1998 and the value of the
Options held by the executive officers named in the summary compensation table
at fiscal year end.
<TABLE>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options at
Shares Value Options at Fiscal Year-End (#) Year-End ($)
Acquired on Realized ------------------------------ -----------------------------
Name Exercise (#) ($)(#) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------ -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert L. Smialek. N/A(1) $3,120,010 -- -- -- --
David A. Kauer.... N/A(2) -- -- -- -- --
Kenneth H. Koch... N/A(3) 17,530 -- -- -- --
Leslie G. Jacobs.. N/A(4) 271,790 -- -- -- --
Michael R. Elia... -- -- -- -- -- --
</TABLE>
- ---------
(1) Option gain of $999,990 rolled over into Equity Unit Plan.
(2) Option gain of $322,500 rolled over into Equity Unit Plan.
(3) Option gain of $299,970 rolled over into Equity Unit Plan.
(4) Option gain of $ 99,990 rolled over into Equity Unit Plan.
The following table provides certain information regarding
long-term incentive plan awards of the Company's Common Stock granted to
executive officers named in the summary compensation table in 1998 under the
1993 Long-Term Incentive Plan.
Long-Term Incentive Plans - Awards in Last Fiscal Year
Number of Shares,
Units or Other Performance or Other Period
Name Rights (#) Until Maturation or Payout (1)
---- ----------------- ------------------------------
Robert L. Smialek.. 22,222 --
David A. Kauer..... 14,000 --
Kenneth H. Koch.... 6,666 --
Leslie G. Jacobs... 4,444 --
Michael R. Elia.... 3,777 --
- ---------
(1) The shares of Holdings Common Stock were sold to such persons at a
purchase price of $45 per share. Holders of such common stock are not
permitted to transfer it until (i) sixty days after they are terminated
from Insilco or (ii) a Significant Event (as defined) occurs. Upon the
occurrence of any Significant Event prior to August 17, 2008, or the
person's termination, Holdings has a right to purchase from such person,
and the holder has a right to sell to Holdings, the Holdings Common Stock
at a price equal to the common stock's Fair Market Value (as defined)
thereof or, if such holder was terminated for Cause (as defined), at the
lesser of $45 and the Fair Market Value. Holders of the equity units
purchased them for a price equal to their Fair Market Value (which could
have been paid for in cash, the termination of options or the agreement to
forego future salary and bonus payments). Such equity units are cancelled
upon the occurrence of a Significant Event or the holder's termination
from Insilco, at which time the holder will receive a payment equal to the
Fair Market Value of the equity units or, if such holder was terminated
for Cause (as defined), a payment equal to the lesser of $45 and the Fair
Market Value (which amount may be paid, at the committee's discretion,
either in cash or shares of Holdings Common Stock).
52
<PAGE>
Retirement Plan and Supplemental Arrangements
The Company's Retirement Plan for Salaried Employees (the
"Retirement Plan") provides retirement benefits for salaried employees,
including officers. The Company compensates employees for the loss of benefits
which otherwise would result because of the limitations the Internal Revenue
Code places on pensions that may be paid under tax-qualified retirement plans
such as the Retirement Plan. The unfunded supplemental retirement payments are
accounted for as operating expenses when earned.
The following table shows the estimated annual retirement
allowances payable after retirement at normal retirement age to persons in the
following specified remuneration and years-of-service classifications (before
any deductions for joint or survivorship payments) without regard to any
statutory limitations imposed by the Internal Revenue Code. Normal retirement
allowances, beginning at age 65, equal (i) 50% of final average compensation
(ii) 50% of the retiree's primary social security benefit, pro-rated if total
service is less than 25 years or, in certain cases, is less than 35 years.
Five years of service is required for vesting.
Years of Service
Final
Average
Earnings(1) 15 20 25 30 35
- ----------- ------- -------- -------- -------- --------
$150,000 $33,385 $44,514 $55,642 $55,642 $55,642
150,000 40,885 54,514 68,142 68,142 68,142
175,000 48,385 64,514 80,642 80,642 80,642
200,000 55,885 74,514 93,142 93,142 93,142
250,000 70,885 94,514 118,142 118,142 118,142
300,000 85,885 114,514 143,142 143,142 143,142
350,000 100,885 134,514 168,142 168,142 168,142
400,000 115,885 154,514 193,142 193,142 193,142
450,000 130,885 174,514 218,142 218,142 218,142
500,000 145,885 194,514 243,142 243,142 243,142
550,000 160,885 214,514 268,142 268,142 268,142
600,000 175,885 234,514 293,142 293,142 293,142
650,000 190,885 254,514 318,142 318,142 318,142
- ---------
(1) The higher of (i) average annual compensation for any five consecutive
calendar years during the final 10 years of employment or (ii) the average
annual compensation for the last 60 months of employment. Compensation
consists of salary (including voluntary salary deferrals) and bonus.
Supplemental payments are based on average earnings in excess of
$160,000.
At December 31, 1998, Messrs. Smialek, Koch, Kauer, Jacobs and Elia were
credited under the Retirement Plan and various supplemental arrangements, with
approximately 4.7, 4.2, 4.3, 7.9 and 9.7 years of service, respectively, for
purposes of determining their pensions.
Employee and Severance Benefit Agreements
The following is a description of the current employment
agreements with certain of Insilco's executive officers:
We employ Mr. Smialek under an agreement providing that Mr.
Smialek will serve indefinitely as our President and Chief Executive Officer.
Under the agreement, Mr. Smialek receives an annual base salary of $550,000.
Mr. Smialek will be eligible to receive annual bonuses and salary increases in
such amounts as may be reasonably determined by the board of directors (or a
compensation committee thereof). Mr. Smialek received an annual bonus for 1997
in the amount of $300,000 and no bonus for 1998. Mr. Smialek also is entitled
to participate in all incentive,
53
<PAGE>
savings, retirement and welfare benefit plans and arrangements in which certain
other senior executive officers are eligible to participate, other than any
restricted stock or option plans in which his participation will be at our
discretion.
If Mr. Smialek's employment is terminated by us without "Cause"
or by Mr. Smialek for "Good Reason" (as the quoted terms are used in the
agreement), he will be entitled to a lump sum amount equal to his accrued
salary, annual bonus and vacation pay and any compensation previously deferred
by him (collectively, the "Accrued Obligations") as well as a severance
payment equal to his annual salary plus the greater of $150,000 or his most
currently determined annual bonus, together with the continuation of certain
benefits for a one-year period.
In 1993, Mr. Smialek purchased from Insilco 33,333 restricted
shares of common stock issued under the Plan at a cash purchase price per
share of $15, whereupon 66,667 restricted shares were awarded to him under the
Plan for a nominal price (all of such restricted shares are referred to
collectively herein as the "Restricted Shares"). Restrictions on the
Restricted Shares expired March 31, 1996, and Mr. Smialek has all the rights
of a holder of common stock with respect to such shares. Mr. Smialek has the
option to settle the tax withholding obligations of Insilco resulting from
expiration of the restrictions with shares of common stock.
In December 1996, we entered into a Value Appreciation
Agreement (as amended, the "Value Appreciation Agreement") with Messrs. Kauer,
Koch, Jacobs and certain other officers. The Value Appreciation Agreement
provided that the executives would be entitled to receive a commission from us
in certain circumstances following a transaction giving rise to a change in
control. Upon consummation of the Mergers, a commission on the sale of $2.6
million was paid and the Value Appreciation Agreement was terminated.
Holders of Options and persons entitled to payments under the
Value Appreciation Agreement invested an aggregate of approximately $4.5
million to receive (i) phantom equity awards in lieu of the cash amounts
otherwise payable in respect of such Options or the Value Appreciation
Agreement or with the proceeds of a loan extended by Insilco and (ii) shares
of common stock of Holdings purchased for cash (the "Management Rollover").
Holdings filed a registration statement on Form S-8 with respect to the
securities issued in the Management Rollover. The shares of Holdings Common
Stock were sold to such persons at a purchase price of $45 per share. Holders
of such common stock are not permitted to transfer it until (i) sixty days
after they are terminated from Insilco or (ii) a Significant Event (as
defined) occurs. Upon the occurrence of any Significant Event prior to August
17, 2008, or the person's termination, Holdings has a right to purchase from
such person, and the holder has a right to sell to Holdings, the Holdings
Common Stock at a price equal to the common stock's Fair Market Value (as
defined) thereof or, if such holder was terminated for Cause (as defined), at
the lesser of $45 and the Fair Market Value. The phantom equity awards, which
are not transferable, were granted pursuant to an Equity Unit Plan that is
governed by a committee of the board of directors of Holdings. Holders of the
equity units purchased them for a price equal to their Fair Market Value
(which could have been paid for in cash, the termination of options or the
agreement to forego future salary and bonus payments). Such equity units are
cancelled upon the occurrence of a Significant Event or the holder's
termination from Insilco, at which time the holder will receive a payment
equal to the Fair Market Value of the equity units or, if such holder was
terminated for Cause (as defined), a payment equal to the lesser of $45 and
the Fair Market Value (which amount may be paid, at the committee's
discretion, either in cash or shares of Holdings Common Stock).
In December 1996, we entered into Income Protection Agreements
with Messrs. Kauer, Koch, Jacobs and certain other officers. The Income
Protection Agreements provide that in the event of termination of an
executive's employment by Insilco without cause, or, in certain circumstances,
by the executive, the executive will be entitled to receive certain severance
benefits. The benefits payable to the executive in the event of a termination
of employment covered by the Income Protection Agreement are as follows: (i)
one year's base salary; (ii) a bonus equal to the bonus paid to executive in
1996 or the target bonus for the year in which employment is terminated, as
well as a pro rated bonus for the year in which the termination occurs; (iii)
continued participation in Insilco's benefit plans for the duration of the
severance period; (iv) accelerated vesting of all stock options and stock
appreciation rights; (v) continuation of any rights to indemnification from
Insilco; and (vi) certain outplacement services. The Income
Protection Agreements have three year terms and automatically renew for
subsequent one year terms, unless terminated by either party.
Director Compensation. During fiscal 1998 no director received
compensation for director services except for reimbursement of reasonable and
customary travel expenses.
54
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
We are a wholly-owned subsidiary of Holdings. The following
table sets forth certain information with respect to the beneficial ownership
of Holdings Common Stock as of March 26, 1999 by (i) any person or group who
beneficially owns more than five percent of Holdings Common Stock, (ii) each
of our directors and executive officers (and each director or officer of
Holdings who is not an officer or director of Insilco) and (iii) all directors
and officers as a group.
Shares
Beneficially Percentage of
Owned After the Outstanding
Name and Address of Beneficial Owner: Mergers Common Stock(3)
- ------------------------------------ --------------- ---------------
DLJ Merchant Banking Partners II, L.P.
and related investors(1)(2)............... 1,043,584 70.8%
399 Venture Partners, Inc.(4)............... 266,666 19.3
Thompson Dean(5)............................ -- --
William F. Dawson, Jr.(5)................... -- --
Keith Palumbo(5)............................ -- --
David Y. Howe(6)............................ -- --
Randall E. Curran........................... -- --
John F. Fort III............................ -- --
Robert L. Smialek........................... 21,354 1.5%
Kenneth H. Koch............................. 300 *
David A. Kauer.............................. 27 *
Leslie G. Jacobs............................ 13 *
Michael R. Elia............................. -- --
All directors and officers as a group
(11 persons)(5)(6)........................ 21,694 1.5%
- ---------
* less than 1%.
(1) Includes 65,603 shares of Holdings Common Stock issued following exercise
on March 12, 1999 of the DLJMB Warrants issued in connection with the PIK
Preferred Stock. Also includes 22,425 shares of Holdings Common Stock
issued following exercise on March 12, 1999 of warrants, which were issued
as part of the Holdings Units purchased by the DLJ Mezzanine Investors (as
defined herein). See "The Merger and the Merger Financing."
(2) Consists of shares held directly by the following investors related to
DLJMB: DLJ Offshore Partners II, C.V. ("Offshore"), a Netherlands Antilles
limited partnership, DLJ Diversified Partners, L.P. ("Diversified"), a
Delaware limited partnership, DLJMB Funding II, Inc. ("Funding"), a
Delaware corporation, DLJ Merchant Banking Partners II-A, L.P.
("DLJMBPIIA"), a Delaware limited partnership, DLJ Diversified Partners-A
L.P. ("Diversified A"), a Delaware limited partnership, DLJ Millennium
Partners, L.P. ("Millennium"), a Delaware limited partnership, DLJ
Millennium Partners-A, L.P. ("Millennium A"), a Delaware limited
partnership, DLJ EAB Partners, L.P. ("EAB"), UK Investment Plan 1997
Partners ("UK Partners"), a Delaware partnership, DLJ First ESC L.P., a
Delaware limited partnership ("DLJ First ESC"), and DLJ ESC II, L.P., a
Delaware limited partnership ("DLJ ESC II"). See "Certain Relationships
and Related Transactions" and "Plan of Distribution." The address of each
of DLJMB, Diversified, Funding, DLJMBPIIA, Diversified A, Millennium,
Millennium A, DLJ First ESC, DLJ ESC II and EAB is 277 Park Avenue, New
York, New York 10172. The address of Offshore is John B. Gorsiraweg 14,
Willemstad, Curacao, Netherlands Antilles. The address of UK Partners is
2121 Avenue of the Stars, Fox Plaza, Suite 3000, Los Angeles, California
90067.
(3) Does not give effect to the issuance of the Warrants issued together with
the notes.
(4) The address of 399 Venture Partners, Inc. is 399 Park Avenue, New York,
New York, 10022-4614.
(5) Messrs. Dean, Dawson and Palumbo are officers of DLJMB Inc., an affiliate
of DLJMB and the Initial Purchaser. The business address of Messrs. Dean,
Dawson and Palumbo is DLJMB Inc., 277 Park Avenue, New York, New
55
<PAGE>
York 10172. Share data shown for such individuals excludes shares shown as
held by the DLJMB Funds, as to which such individuals disclaim beneficial
ownership.
(6) Mr. Howe is an officer of Citicorp Venture Capital, Ltd., an affiliate of
399 Venture Partners, Inc. The business address of Mr. Howe is 399 Park
Avenue, New York, NY 10022-4614. Share data shown for Mr. Howe excludes
shares shown as held by 399 Venture Partners, Inc., as to which Mr. Howe
disclaims beneficial ownership.
56
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The DLJMB Funds own approximately 69.0% of the outstanding
shares of the Holdings Common Stock (67.0% on a fully diluted basis after
giving effect to the issuance of the Warrants). Messrs. Dean and Dawson are
officers of DLJMB and directors of Insilco and Holdings. Neither Holdings nor
Insilco is aware of any transaction or of any currently proposed transaction,
in which DLJ has any material direct or indirect interest as a result of its
ownership position in a party to the transaction other than Insilco, except as
follows:
Donaldson Lufkin & Jenrette Securities Corporation ("DLJSC")
received customary fees in connection with the distribution of the units of
which the Old Notes were part, received customary fees in connection with the
arranging of the syndication of the new credit facility, received customary
fees in connection with the distribution of the Holdings Units and received an
advisory fee in connection with the Mergers. In connection with the sale of
the Holdings Units, Holdings granted registration rights to DLJSC in
connection with its market-making activities and agreed to indemnify DLJSC
against certain liabilities, including liabilities under the Securities Act.
In addition, DLJ Capital Funding is an agent and lender under the new credit
facility. DLJ Capital Funding and DLJSC have and will receive customary fees
in connection with the provision of the new credit facility. Further, DLJ
Capital Funding, Inc., an affiliate of DLJSC, acted as syndication agent in
connection with the new credit facility for which it received certain
customary fees and expenses and DLJ Bridge Finance Inc., an affiliate of
DLJSC, purchased the Bridge Notes, for which it received customary fees and
expenses. DLJSC has, from time to time, provided investment banking and other
financial advisory services to Insilco in the past for which it has received
customary compensation, and will provide such services and financial advisory
services to Insilco in the future. DLJSC acted as purchaser in connection with
the initial sale of the Old Notes and received an underwriting discount of
approximately $3.6 million in connection therewith. In addition, DLJSC
received a merger advisory fee of $3.5 million in cash from Holdings after the
consummation of the Merger. The aggregate fees to be received by DLJ entities
for its various services in 1998 were approximately $15.6 million.
DLJ Investment Partners, L.P., DLJ ESC II, L.P. and DLJ
Investment Funding, Inc. (the "DLJ Mezzanine Investors"), each of which is an
affiliate of DLJMB, purchased an aggregate of approximately 50% of the Holdings
Units and are entitled to certain registration rights in connection therewith.
In connection with the Mergers, DLJMB and Holdings entered into
an agreement with respect to registration and certain other rights. See
"Description of Capital Stock--Other Stockholder Arrangements."
Prior to the Mergers, Water Street Corporate Recovery Fund I,
L.P. ("Water Street"), an affiliate of Goldman, Sachs & Co. ("Goldman Sachs"),
beneficially owned approximately 45% (62% prior to the Share Repurchase) of
Insilco's common stock. Neither Holdings nor Insilco is aware of any
transaction or of any currently proposed transaction in which Goldman Sachs
has any material direct or indirect interest as a result of its ownership
position in a party to the transaction other than Holdings, except as follows:
Goldman Sachs advised Insilco in connection with the Mergers
and received a fee of $2.0 million payable on the consummation of the Mergers.
In the Mergers, Water Street received approximately $81.0 million and retained
62,962 shares of Holdings. Holdings entered into a Registration Rights
Agreement with Water Street in which Water Street has certain registration
rights with respect to such 62,962 shares.
During 1997, Insilco paid Goldman Sachs $3.1 million in
underwriting fees related to the 10(1)/(4)% notes, $2 million in investment
banking fees in connection with the refinancing and the issuance of the
10(1)/(4)% notes, and $204,000 for services rendered in connection with the
Share Repurchase. Water Street received an aggregate of approximately $154.7
million in the Share Repurchase. Also during 1997, Insilco paid Goldman Sachs
$2 million in investment banking fees and expenses related to the sale of the
Rolodex Business.
In 1996, Goldman Sachs advised Insilco in connection with the
purchase of the Lingemann Business and received an investment banking fee of
$1.0 million and reimbursement of expenses.
57
<PAGE>
An affiliate of Goldman Sachs was a lender under Insilco's
credit agreement that preceded the Existing Credit Facility and in 1995 and
1996 received $459,409 and $372,000, respectively, in fees and interest under
such agreement. Goldman Sachs Credit Partners L.P. is a member of the bank
group under the Existing Credit Facility and received $583,000 from the agent
bank for its portion of the arrangement fee paid by Insilco in 1997.
In 1995, Insilco loaned $210,000 to James J. Gaffney, a former
director of Insilco, in two separate loan transactions. Each loan bore
interest at a variable rate equal to the applicable federal rate at the date
of the loan, adjusted semi-annually in accordance with changes in the
applicable federal rate. The loan was repaid in full on February 19, 1997.
In 1995, Insilco loaned $128,000 to James D. Miller, a former
executive officer of Insilco. The loan bore interest at a variable rate equal
to the applicable federal rate at the date of the loan, adjusted semi-annually
in accordance with changes in the applicable federal rate. Mr. Miller
terminated his employment with Insilco on April 18, 1997 and the loan was
repaid in full.
Insilco believes that the terms of all the transactions and
existing arrangements set forth above are no less favorable to Insilco than
similar transactions and arrangements which might have been entered into with
unrelated parties.
58
<PAGE>
DESCRIPTION OF CERTAIN INDEBTEDNESS
New Credit Facility
On November 24, 1998 a new credit facility was provided by a
syndicate of banks and other financial institutions led by Donaldson, Lufkin &
Jenrette Securities Corporation, as arranger, DLJ Capital Funding, as
syndication agent, and The First National Bank of Chicago, as administrative
agent. The new credit facility includes a $125 million term loan facility and
a $175 million revolving credit facility (subject to adjustment as provided
below), which provides for revolving loans and up to $50 million of letters of
credit. The term loan facility has a maturity of seven years. The revolving
credit facility will terminate on July 8, 2003.
Borrowings under the new credit facility generally bear
interest, at Insilco's option, at the Administrative Agent's alternate base
rate or at the reserve-adjusted London Interbank Offered Rate ("LIBOR") plus,
in each case, applicable margins of
(1) in the case of alternate base rate loans,
(x) 1.75% for revolving and
(y) 2.50% for term loans and
(2) in the case of LIBOR loans,
(x) 3.00% for revolving and
(y) 3.75% for term loans.
Insilco pays a commitment fee calculated at a rate of 0.625%
per annum on the daily average unused commitment under the revolving credit
facility. Such fee will be payable monthly in arrears and upon termination of
the revolving credit facility.
Beginning May of 1999, the applicable margins for the revolving
credit facility, as well as the commitment fee and letter of credit fee, will
be subject to possible reductions based on the ratio of consolidated Debt to
EBITDA (each as defined in the new credit facility).
Insilco will pay a letter of credit fee on all outstanding
letters of credit, at a rate per annum equal to the then applicable margin for
LIBOR loans under the revolving credit facility. Such fees will be payable
monthly in arrears. In addition, Insilco will pay customary transaction
charges in connection with any letters of credit.
Availability under the revolving credit facility will decrease:
(1) on the six month anniversary of the new credit facility
closing date by an amount equal to $46.0 million less the aggregate
consideration paid in connection with acquisitions or committed to be
paid pursuant to a signed definitive acquisition agreement entered
into prior to such date, and
(2) by $20.0 million on each of July 10, 2000, July 10, 2001 and
July 10, 2002. The term loan facility will be subject to the
following amortization schedule:
59
<PAGE>
Year Percentage Reduction
- ---- --------------------
1........................... 1.0%
2........................... 1.0%
3........................... 1.0%
4........................... 1.0%
5........................... 1.0%
6........................... 1.0%
7........................... 94.0%
100.0%
The term loan facility is subject to mandatory prepayment:
(1) with 100% of the net cash proceeds from the issuance of
debt, subject to certain exceptions;
(2) with 100% of the net cash proceeds of asset sales and
casualty events, subject to certain exceptions;
(3) with 50% of Insilco's Excess Cash Flow (as defined in the
new credit facility) to the extent that the Leverage Ratio (as
defined in the new credit facility) exceeds 3.5 to 1.0; and
(4) with 50% of the net cash proceeds from the issuance of
equity to the extent that the Leverage Ratio exceeds 3.5 to 1.0.
Insilco's obligations under the new credit facility are secured
by a first-priority perfected lien on:
(1) substantially all domestic property and assets, tangible and
intangible (other than accounts receivable sold or to be sold into
the accounts receivable program and short term real estate leases),
of Insilco and its domestic subsidiaries;
(2) the capital stock of:
(a) Insilco held by Holdings; and
(b) substantially all subsidiaries of Insilco (provided that
no more than 65% of the equity interest in non-U.S. subsidiaries held
by Insilco and its domestic subsidiaries and no equity interests in
subsidiaries held by foreign subsidiaries are required to be pledged);
and
(3) all intercompany indebtedness.
Holdings has guaranteed the obligations of Insilco under the
new credit facility. In addition, obligations under the new credit facility
are guaranteed by substantially all domestic subsidiaries.
The new credit facility contains customary covenants and
restrictions on Insilco's ability to engage in certain activities, including,
but not limited to:
(1) limitations on the incurrence of liens and indebtedness;
(2) restrictions on sale lease-back transactions,
consolidations, mergers, sale of assets, capital expenditures,
transactions with affiliates and investments; and
(3) strict restrictions on dividends, and other similar
distributions.
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The new credit facility also contains financial covenants
requiring Insilco to maintain a minimum Interest Coverage Ratio (as defined in
the new credit facility); a minimum Fixed Charge Coverage Ratio (as defined in
the new credit facility); and a maximum Leverage Ratio.
Holdings Senior Discount Notes
As part of the Merger Financing, Holdings issued and sold the
Holdings Units consisting of Holdings Senior Discount Notes and warrants to
purchase Holdings Common Stock. The Holdings Senior Discount Notes accrete at a
rate of 14% compounded semiannually to an aggregate principal amount of
$138,000,000 in August 2003. Interest is payable in cash thereafter on each
February 15 and August 15, commencing February 15, 2004. The Holdings Senior
Discount Notes are subject to redemption at Holdings' option:
(1) in whole or in part, on or after August 15, 2003;
(2) in whole or in part, prior to August 15, 2001, with the
proceeds of one or more Public Equity Offerings (as defined); and
(3) in whole but not in part, upon the occurrence of a Change of
Control (as defined) prior to August 15, 2003, in each case at the
redemption prices set forth therein.
Holders have the option of requiring Holdings to purchase their
Holdings Senior Discount Notes:
(1) in the event that Holdings completes one or more Public
Common Stock Offerings (as defined) prior to August 15, 2001; or
(2) in the event of a Change of Control.
The Holdings Indenture contains covenants that, among other
things, and subject to exceptions:
(1) limit the ability of Holdings and its Restricted
Subsidiaries (as defined) to incur additional indebtedness,
contingent obligations and Disqualified Stock (as defined);
(2) limit the ability of Holdings to grant liens on debt which
is pari passu with or subordinate to the Holdings Senior Discount
Notes;
(3) limit the ability of Holdings and its Restricted
Subsidiaries to pay dividends or make other distributions;
(4) limit the issuance of preferred stock by Holdings'
Restricted Subsidiaries;
(5) limit the ability of Holdings and its Restricted
Subsidiaries to engage in transactions with Holdings' affiliates;
(6) limit the ability of Holdings to merge, consolidate or sell
all or substantially all its assets; and
(7) limit the ability of Holdings and Holdings' Restricted
Subsidiaries from making certain asset sales and in connection with
permitted asset sales require that the proceeds thereof be used to
make an offer to repurchase the Holdings Senior Discount Notes at
100% of their principal amount unless such proceeds have been
reinvested in the business of Holdings or used to repay indebtedness.
In addition, in the event of a Change of Control, Holdings is required to make
an offer to purchase all outstanding Holdings Senior Discount Notes at a
purchase price equal to 101% of their aggregate principal amount, plus accrued
interest to the date of purchase.
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The Holdings Indenture contains certain events of defaults
which include the failure to pay interest and principal on the Holdings Senior
Discount Notes, the failure to comply with covenants in the Holdings Senior
Discount Notes or the Holdings Indenture, a principal payment default at
maturity under, or acceleration of, certain other indebtedness of Holdings and
Holdings' Restricted Subsidiaries, the failure to pay certain final judgments
and certain events occurring under bankruptcy laws.
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DESCRIPTION OF NOTES
General
We issued the notes under an Indenture between Insilco and Star
Bank, N.A., as trustee (the "Trustee"). The terms of the notes include those
stated in the indenture and those made part of the indenture by reference to
the Trust Indenture Act of 1939 (the "Trust Indenture Act").
Because this is a summary it does not contain all the
information that may be important to you. You should read the entire
indenture, including the definitions therein of certain terms used below. We
have filed a copy of the indenture as an exhibit to the registration statement
which includes this prospectus. For definitions of certain terms used in this
description see "--Certain Definitions." As used in this "Description of
Notes", the word "Insilco" refers only to Insilco Corporation and not to any
of its subsidiaries.
The terms of the New Notes are identical in all material
respects to the terms of the Old Notes, except for certain transfer
restrictions and registration rights relating to the Old Notes and except
that, if the registration statement relating to this exchange offer is not
declared effective by the Commission by April 8, 1999, Holders that have
complied with their obligations under the Registration Rights Agreement will
be entitled, subject to certain exceptions, to liquidated damaged in an amount
equal to $0.05 per week per $1,000 principal amount of notes held by such
Holder until July 2, 1999 and increasing every 90 days thereafter up to a
maximum amount equal to $0.25 per week per $1,000 principal amount of notes
until the registration statement is declared effective.
The notes
o will be general unsecured obligations of Insilco
o will be subordinated in right of payment to all existing and
future Senior Indebtedness of Insilco (including borrowings
under the Credit Facility)
o will rank senior in right of payment to all future
Subordinated Indebtedness of Insilco
o will be effectively subordinated to all liabilities of
Insilco's subsidiaries, except that with respect to
subsidiaries which are guarantors, the notes will be
subordinated only to Senior Indebtedness of such
subsidiaries.
On December 31 1998, we and the guarantors would have had
outstanding approximately $191.1 million of Senior Indebtedness. The indenture
permits Insilco and its Subsidiaries to incur additional Debt, including
Senior Indebtedness, in the future. See "Risk Factors--Subordination of the
Notes; Dependence on Subsidiaries" and "--Certain Covenants--Limitation on
Consolidated Debt."
As of the date of the indenture, all of Insilco's Subsidiaries
were Restricted Subsidiaries. However, under certain circumstances, we will be
permitted to designate current or future Subsidiaries as Unrestricted
Subsidiaries. Unrestricted Subsidiaries are not be subject to the restrictive
covenants set forth in the indenture.
Principal, Maturity and Interest
The notes are limited to $150 million aggregate principal
amount (including any Additional Notes, as defined below) and will mature on
August 15, 2007. The notes will bear interest at the rate per annum shown on
the front cover of this prospectus from the date of original issuance or from
the most recent Interest Payment Date to which interest has been paid or
provided for, payable semi-annually on February 15 and August 15 of each year,
commencing February 15, 1999, to the Person in whose name the note (or any
predecessor note) is registered (a "Holder") at the
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close of business on the preceding February 1 or August 1, as the case may be.
The notes will bear interest on overdue principal and premium (if any) and, to
the extent permitted by law, overdue interest at the rate per annum shown on
the front cover of this prospectus plus 2%. Interest on the notes will be
computed on the basis of a 360-day year of twelve 30-day months.
The principal of (and premium, if any) and interest and
Liquidated Damages (as defined herein), if any, on the notes will be payable,
and the transfer of notes will be registrable, at the office or agency of
Insilco maintained for that purpose in the Borough of Manhattan, The City of
New York. In addition, payment of interest and Liquidated Damages, if any,
may, at the option of Insilco, be made by check mailed to the address of the
Person entitled thereto as it appears in the Security Register; provided,
however, that all payments of the principal (and premium, if any) and interest
on notes the Holders of which have given wire transfer instructions to Insilco
or its agent at least 10 Business Days prior to the applicable payment date
will be required to be made by wire transfer of immediately available funds to
the accounts specified by such Holders in such instructions.
Subject to the covenants described below, we may issue
additional notes of up to an aggregate principal amount of $30 million (the
"Additional Notes") under the indenture having the same terms in all respects
as the notes (or in all respects except for the payment of interest on the
notes
(1) scheduled and paid prior to the date of issuance of such
Additional Notes or
(2) payable on the first interest payment date following such
date of issuance). The notes offered hereby and any such Additional
Notes would be treated as a single class for all purposes under the
indenture.
Optional Redemption
The notes will be subject to redemption, at our option, in
whole or in part, at any time on or after August 15, 2002 and prior to
maturity, upon not less than 30 nor more than 60 days' notice mailed to each
Holder of notes to be redeemed at such Holder's address appearing in the
Security Register, in amounts of $1,000 or an integral multiple of $1,000, at
the following Redemption Prices (expressed as percentages of the principal
amount redeemed), plus accrued interest to but excluding the Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date), if redeemed during the twelve-month period beginning on
August 15 of each of the years indicated below:
Year Redemption Price
- ---- ----------------
2002................................. 106.000%
2003................................. 104.000%
2004................................. 102.000%
2005 and thereafter.................. 100.000%
If less than all the notes are to be redeemed, the particular
notes to be redeemed will be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the outstanding notes not previously
called for redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $1,000 or any integral multiple thereof) of the principal amount of
notes of a denomination larger than $1,000.
Mandatory Redemption
Except as described above under "Special Redemption" and below
under "Repurchase at the Option of Holders--Asset Dispositions" and "--Change
of Control," the notes will not have the benefit of any mandatory redemption or
sinking fund obligations of Insilco.
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Repurchase at the Option of Holders
Asset Dispositions
Insilco may not make, and may not permit any Restricted
Subsidiary to make, any Asset Disposition (other than an Asset Disposition
permitted under the indenture as described in "Covenants--Mergers,
Consolidations and Certain Sales of Assets" below) in one transaction (or
series of related transactions) unless:
(1) Insilco (or such Restricted Subsidiary, as the case may be)
receives consideration at the time of such disposition at least equal
to the fair market value of the shares or other assets disposed of
(as determined in good faith by the Board of Directors and evidenced
by their resolution) for any transaction (or series of related
transactions) involving in excess of $2 million;
(2) at least 80% of the consideration received by Insilco (or
such Restricted Subsidiary) consists of:
(u) cash, readily marketable cash equivalents, readily
marketable fixed-income securities or equity securities traded
on a national securities exchange or NASDAQ (valued, in the case
of securities, at the market value thereof when received by
Insilco or such Restricted Subsidiary),
(v) the assumption of Debt or other liabilities reflected
on the consolidated balance sheet of Insilco and its Restricted
Subsidiaries in accordance with generally accepted accounting
principles (excluding Debt or any other liabilities subordinate
in right of payment to the notes) and release from all liability
on such Debt or other liabilities assumed,
(w) assets used by, or stock or other ownership interests
in, a Person that upon the consummation of such Asset
Disposition becomes a Restricted Subsidiary and will be
principally engaged in the business of Insilco or any of its
Wholly Owned Restricted Subsidiaries substantially as such
business was conducted prior to such Asset Disposition (as
determined by the Board of Directors in good faith) or
(x) any combination thereof and
(3) 100% of the Net Available Proceeds from such Asset
Disposition (including from the sale of any marketable cash
equivalents, fixed-income or equity securities received therein),
less any amounts ("Reinvested Amounts") invested, within one year
from the later of the date of such Asset Disposition or the receipt
of such Net Available Proceeds, in assets that will be used in the
same or a substantially similar or related business of Insilco or any
of its Wholly Owned Restricted Subsidiaries as conducted prior to
such Asset Disposition (as determined by the Board of Directors in
good faith), are applied by Insilco or a Restricted Subsidiary
(a) first, within one year from the later of the date of
such Asset Disposition or the receipt of such Net Available
Proceeds, to repayment of Senior Indebtedness of Insilco or Debt
of its Restricted Subsidiaries then outstanding under any
agreements or instruments which would require such application
or which would prohibit payments pursuant to the following
clause (b);
(b) second, to the extent Net Available Proceeds are not
required to be applied to Senior Indebtedness of Insilco or Debt
of Restricted Subsidiaries as specified in clause (a), to
purchases of outstanding notes pursuant to an Offer to Purchase
at a purchase price equal to 100% of their principal amount,
plus accrued interest to the date of purchase (subject to the
rights of Holders of record on the relevant Regular Record Date
to receive interest due on an Interest Payment Date that is on
or prior to the purchase date), and, to the extent required by
the terms thereof, to purchases (on a pro rata basis with the
notes) of any other Debt of Insilco or its Restricted
Subsidiaries that is pari passu with the notes at a price no
greater than 100% of the principal amount thereof, plus accrued
interest to the date of purchase, in each case to the extent
such purchases are
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not prohibited by the terms of any Senior Indebtedness of
Insilco or of any Debt of Restricted Subsidiaries then
outstanding;
(c) third, to the extent of any remaining Net Available
Proceeds following purchases pursuant to the foregoing clause
(b), to the repayment of other Debt of Insilco or Debt of a
Restricted Subsidiary, to the extent permitted under the terms
thereof and
(d) fourth, to the extent of any remaining Net Available
Proceeds, to any other use as determined by Insilco which is not
otherwise prohibited by the indenture.
The foregoing obligations will not continue after a discharge of Insilco or
defeasance from its obligations with respect to the notes. See "Defeasance"
below.
Notwithstanding the foregoing, Insilco will not be required to
comply with the requirements described in clause (2) or clause (3) of the
preceding paragraph for any Asset Disposition that is an Excepted Disposition,
and Insilco will not be required to comply with the requirements described in
clause (3) of the preceding paragraph except at any time and from time to time
that the aggregate amount of Net Available Proceeds, less Reinvested Amounts,
required to be applied pursuant to clause (3) (and not theretofore so applied)
exceeds $10 million; provided, however, with respect to such clause (3), that
if any Restricted Subsidiary in which a Reinvested Amount is invested becomes
an Unrestricted Subsidiary thereafter, such change in status, except under
certain circumstances, will be deemed an Asset Disposition with Net Available
Proceeds of cash in an amount equal to such Reinvested Amount (less any
portion of such Reinvested Amount theretofore distributed to Insilco or any
Restricted Subsidiary), and such amount of cash will be applied pursuant to
clause (3) above (subject to this proviso).
Any Offer to Purchase required by the provisions described
above will be effected by the sending of the written terms and conditions
thereof (the "Offer Document"), by first class mail, to Holders of the notes
within 30 days after the date which is one year after the later of the date of
such Asset Disposition or the receipt of the related Net Available Proceeds.
The form of the Offer to Purchase and the requirements that a Holder must
satisfy to tender any New Note pursuant to such Offer to Purchase are
substantially the same as those described below under "--Change of Control."
Change of Control
Within 30 days following the consummation of a transaction that
results in a Change of Control (as defined below), Insilco will commence an
Offer to Purchase all outstanding notes, at a purchase price equal to 101% of
their aggregate principal amount, plus accrued interest to the date of
purchase (subject to the rights of Holders of record on the relevant Regular
Record Date to receive interest due on an Interest Payment Date that is on or
prior to the date of purchase). Such obligation will not continue after a
discharge of Insilco or defeasance from its obligations with respect to the
notes. See "Defeasance."
Insilco will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to
the extent such laws and regulations are applicable in connection with the
repurchase of the notes resulting from a Change of Control.
Under the terms of the Credit Facility, a Change of Control
could constitute an event of default thereunder and prohibit the redemption of
the notes. If an event of default under the Credit Facility has occurred and
is continuing, payments owing on the notes could be blocked pursuant to the
subordination provisions of the notes. See "--Subordination" below. To repay
the notes, it may be necessary for Insilco first to recapitalize or refinance
the Credit Facility and some or all of its outstanding indebtedness (if any).
There can be no assurance that such recapitalization or refinancing, if
required, would be accomplished on favorable terms, in a timely manner or at
all.
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Prior to the mailing of an Offer Document, Insilco will in good
faith seek to obtain any required consents of holders of Senior Indebtedness
or repay the outstanding obligations thereunder. The right of holders to
require Insilco to purchase notes pursuant to an Offer to Purchase will be
subject to obtaining the requisite consents or making such repayment.
Within 30 days following a Change of Control, an Offer Document
will be sent, by first class mail, to Holders of the notes, accompanied by
such information regarding Insilco and its Subsidiaries as Insilco in good
faith believes will enable the holders to make an informed decision with
respect to the Offer to Purchase, which at a minimum will include
(1) the most recent annual and quarterly financial statements
and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained in the documents required to be
filed with the Trustee pursuant to the provisions described under
"Covenants--Provision of Financial Information" below (which
requirements may be satisfied by delivery of such documents together
with the Offer to Purchase),
(2) a description of material developments in Insilco's business
subsequent to the date of the latest of such financial statements
referred to in clause (1) (including a description of the events
requiring Insilco to make the Offer to Purchase),
(3) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring Insilco to
make the Offer to Purchase and
(4) any other information required by applicable law to be
included therein. The Offer Document will contain all instructions
and materials necessary to enable holders of the notes to tender
notes pursuant to the Offer to Purchase.
The Offer Document will also state
(1) that a Change of Control has occurred (or, if the Offer to
Purchase is delivered in connection with an Asset Disposition, that
an Asset Disposition has occurred) and that Insilco will offer to
purchase the holder's notes,
(2) the Expiration Date of the Offer to Purchase, which will be,
subject to any contrary requirements of applicable law, not less than
30 days or more than 60 days after the date of such Offer Document,
(3) the Purchase Date for the purchase of notes which will be
within five Business Days after the Expiration Date,
(4) the aggregate principal amount of notes to be purchased
(including, if less than 100%, the manner by which such purchase has
been determined pursuant to the indenture) and the purchase price and
(5) a description of the procedure which a holder must follow to
tender all or any portion of the notes.
To tender any note, a holder must surrender such note at the
place or places specified in the Offer Document prior to the close of business
on the Expiration Date (such note being duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to Insilco and the Trustee
duly executed by, the holder thereof or its attorney duly authorized in
writing). A holder will be entitled to withdraw all or any portion of notes
tendered if Insilco (or its Paying Agent) receives, not later than the close
of business on the Expiration Date, a telegram, facsimile transmission or
letter setting forth the name of the holder, the principal amount of the note
the holder tendered, the certificate number of the note the holder tendered
and a statement that such holder is withdrawing all or a portion of his
tender. Any portion of a note tendered must be tendered in an integral
multiple of $1,000 principal amount.
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Subordination
The payment of the principal of (and premium, if any) and
interest on the notes and all other Obligations in respect of the notes or on
account of any Claim (collectively, the "Subordinated Obligations") will, in
certain circumstances as set forth in the indenture, be subordinated in right
of payment to the prior payment in full of all Senior Indebtedness of Insilco.
Upon any payment or distribution of assets of Insilco to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the
benefit of creditors, marshaling of assets and liabilities or any bankruptcy,
insolvency or similar proceedings ("Insolvency Proceedings") of Insilco, the
holders of Senior Indebtedness of Insilco will be entitled to receive payment
in full of the principal of (and premium, if any), interest on and all other
Obligations in respect of such Senior Indebtedness, including all amounts due
or to become due on all such Senior Indebtedness, or provision will be made
for payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of such Senior Indebtedness, before the Holders of notes are
entitled to receive any Securities Payment. "Securities Payment" means any
payment or distribution of any kind, whether in cash, property or securities
(including any payment or distribution deliverable by reason of the payment of
any other Debt subordinated to the notes) on account of the Subordinated
Obligations or on account of the purchase, redemption or other acquisition of
notes by Insilco or any Subsidiary of Insilco. If notwithstanding the
foregoing the Trustee or the Holder of any note receives during the pendency
of any Insolvency Proceeding any Securities Payment before all Senior
Indebtedness of Insilco is paid in full or payment thereof is provided for in
cash or cash equivalents or otherwise in a manner satisfactory to the holders
of such Senior Indebtedness, then in such event such Securities Payment will
be required to be paid over or delivered forthwith to the holders of Senior
Indebtedness for application to the payment of all Senior Indebtedness of
Insilco remaining unpaid, to the extent necessary to pay such Senior
Indebtedness in full. Notwithstanding the foregoing, Holders of the notes may
receive Subordinated Securities.
Insilco may not make any Securities Payment (other than
pursuant to the Special Redemption and except for Subordinated Securities) if
there has occurred and is continuing a default in the payment of the principal
of (or premium, if any) or interest on or any other payment Obligation owing
in respect of any Designated Senior Indebtedness or if there has occurred and
is continuing any event of default with respect to any Designated Senior
Indebtedness that has resulted in such Designated Senior Indebtedness becoming
or being declared due and payable prior to the date on which it would
otherwise have become due and payable (a "Senior Payment Default"). In
addition, if any default (other than a Senior Payment Default) with respect to
any Designated Senior Indebtedness permitting after notice or lapse of time
(or both) the holders thereof (or a trustee on behalf thereof) to accelerate
the maturity thereof (a "Senior Nonmonetary Default") has occurred and is
continuing and Insilco and the Trustee have received written notice thereof
from the administrative agent under the Credit Facility or the trustee or
other authorized representative of the holders of any Designated Senior
Indebtedness (in any case, a "Senior Representative"), then Insilco may not
make any Securities Payment (other than pursuant to the Special Redemption and
except for Subordinated Securities) for a period (a "Blockage Period")
commencing on the date Insilco and the Trustee receive such written notice and
ending on the earliest of
(1) 179 days after such date;
(2) the date, if any, on which the Designated Senior
Indebtedness to which such default relates is paid in full or such
default is waived or otherwise cured; and
(3) the date on which Insilco and the Trustee receive written
notice from such Senior Representative terminating the Blockage Period.
If notwithstanding the foregoing the Trustee or the Holder of
any note receives during the pendency of any Blockage Period any Securities
Payment before such Designated Senior Indebtedness is paid in full or payment
thereof is provided for in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of such Designated Senior Indebtedness, then in
such event such Securities Payment will be required to be paid over or
delivered forthwith to the holders of such Designated Senior Indebtedness for
application to the payment thereof, to the extent necessary
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to pay such Designated Senior Indebtedness in full. Notwithstanding the
foregoing, Holders of the notes may receive Subordinated Securities.
During any 360-day period, the aggregate of all Blockage
Periods shall not exceed 179 days and there shall be a period of at least 181
consecutive days in each consecutive 360-day period when no Blockage Period is
in effect. When no Blockage Period is in effect, Insilco may make all required
payments (including any such payments not made during any Blockage Period) in
respect of the notes not prohibited by the terms of these subordination
provisions. No Senior Nonmonetary Default that existed or was continuing on
the date of commencement of any Blockage Period will be, or can be, made the
basis for the commencement of a subsequent Blockage Period, unless such
default has been cured or waived for a period of not less than 90 consecutive
days.
By reason of the subordination of the notes described above, in
the event of insolvency, creditors of Insilco that are not holders of Senior
Indebtedness of Insilco or of the notes may recover less, ratably, than
holders of such Senior Indebtedness and may recover more, ratably, than the
Holders of the notes, and Insilco may be unable to fully satisfy its
obligations in connection with the notes.
The subordination provisions described above will cease to be
applicable to the notes upon any defeasance or covenant defeasance of the
notes as described below under "Defeasance."
Note Guarantees
Insilco's wholly-owned Domestic Restricted Subsidiaries jointly
and severally guarantee the notes. The indenture provides that if any future
wholly-owned Domestic Restricted Subsidiary guarantees any Indebtedness under
the Credit Facility, then such Domestic Restricted Subsidiary shall become a
guarantor under the indenture and execute a Supplemental Indenture and deliver
an Opinion of Counsel, in accordance with the terms of the indenture. The
guarantee of each guarantor is subordinated to the prior payment in full in
cash or cash equivalents of all existing and future Senior Indebtedness of
such guarantor (including such guarantor's guarantee of the Credit Facility)
to the same extent that the notes are subordinated to Senior Indebtedness of
Insilco. The obligations of each guarantor under its guarantee are limited so
as not to constitute a fraudulent conveyance under applicable law.
The indenture provides that, in the event of a sale or other
disposition of all or substantially all of the assets of any guarantor, by way
of merger, consolidation or otherwise, or a sale or other disposition of all
or substantially all of the capital stock of any guarantor held by Insilco or
any Restricted Subsidiary, such guarantor (in the event of a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all or
substantially all of the capital stock of such guarantor) or the Person
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such guarantor) will be released and
relieved of any obligations under its guarantee.
Certain Covenants
Limitation on Consolidated Debt
Insilco may not, and may not permit any Restricted Subsidiary
to, Incur any Debt unless, immediately after giving pro forma effect to the
Incurrence of such Debt and the receipt and application of the proceeds
thereof, the Consolidated EBITDA Coverage Ratio of Insilco and its Restricted
Subsidiaries for the four full fiscal quarters next preceding the Incurrence
of such Debt for which financial information is available, calculated on a pro
forma basis as if such Debt had been Incurred and the proceeds thereof had
been received and so applied at the beginning of the four fiscal quarters,
would be greater than (x) 1.9 to 1 for Debt Incurred on or prior to November
9, 1999 and (y) 2.0 to 1 for Debt Incurred thereafter.
Notwithstanding the foregoing limitation, the following Debt
may be Incurred:
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(1) Debt Incurred by Insilco or any Restricted Subsidiary under
the Credit Facility in an aggregate principal amount at any time
outstanding not to exceed $200 million, less (A) $20 million at each
of the third, fourth and fifth anniversaries of the Credit Facility's
effective date, plus (B) increased revolving credit commitments
thereunder in an aggregate amount not exceeding in the aggregate the
amount of Debt that is permitted to be Incurred, but has not been
Incurred, under clauses (4) and (8) of this paragraph, and plus (C)
the amount of Debt Incurred under the Credit Facility on a term loan
basis that is Incurred pursuant to the immediately preceding
paragraph, and, with respect to all of the foregoing, any renewal,
extension, refinancing or refunding (a "refinancing") of such Debt in
an amount that does not exceed the sum of the amount of the revolving
credit commitments and the amount of the outstanding term Debt under
the Credit Facility immediately prior to such renewal, extension,
refinancing or refunding; provided that no Debt Incurred on a term
loan basis may be refinanced on a revolving credit basis;
(2) the original issuance by Insilco of the Debt evidenced by
the notes and the issuance by Insilco's subsidiaries of the guarantees;
(3) Debt (other than Debt described in another clause of this
paragraph) of Insilco outstanding on the date of the indenture after
giving effect to the application of the proceeds of the notes;
(4) Debt in respect of Capital Lease Obligations, mortgage
financings or other purchase money obligations, in an aggregate
principal amount at any time outstanding not to exceed $15 million
(including Debt refinanced pursuant to clause (7) of this paragraph
and without duplication at such time of any portion of any revolving
credit commitment then in effect that represents an increase made
under the immediately preceding clause (1)(B) in reliance on this
clause (4)), Incurred by Insilco or any Restricted Subsidiary for the
purpose of financing all or any part of the acquisition or improvement
of any property used in the business of Insilco or such Restricted
Subsidiary;
(5) Debt owed by Insilco to any Wholly Owned Restricted
Subsidiary or Debt owed by any Restricted Subsidiary to Insilco or a
Wholly Owned Restricted Subsidiary; provided, however, that
(a) any such Debt (not pledged as security for any Senior
Indebtedness) owing by Insilco to a Wholly Owned Restricted
Subsidiary shall be Subordinated Indebtedness evidenced by an
intercompany promissory note and
(b) upon either
(1) the transfer or other disposition (excluding
any pledge thereof as security for any Senior
Indebtedness) by such Wholly Owned Restricted Subsidiary
or Insilco of any Debt so permitted to a Person other
than Insilco or another Wholly Owned Restricted
Subsidiary or
(2) the issuance (other than directors' qualifying
shares), sale, lease, transfer or other disposition
(including by consolidation or merger) of shares of
Capital Stock (other than any pledge thereof as security
for any Senior Indebtedness) of such Wholly Owned
Restricted Subsidiary to a Person other than Insilco or
another such Wholly Owned Restricted Subsidiary, the
provisions of this clause (5) shall no longer be
applicable to such Debt and such Debt shall be deemed to
have been Incurred at the time of such issuance, sale,
lease, transfer or other disposition, as the case may
be;
(6) Debt Incurred by Insilco or any Restricted Subsidiary
consisting of Permitted Interest Rate, Currency or Commodity Price
Agreements;
(7) Debt which is exchanged for or the proceeds of which are
used to refinance or refund, or any extension or renewal of,
outstanding Debt Incurred pursuant to the preceding paragraph or
clauses (2), (3) or (4) of this
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paragraph (each of the foregoing, a "refinancing") in an aggregate
principal amount not to exceed the principal amount of the Debt so
refinanced, plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Debt so
refinanced or the amount of any premium reasonably determined by Insilco
as necessary to accomplish such refinancing by means of a tender offer or
privately negotiated repurchase and plus the expenses of Insilco or the
Restricted Subsidiary, as the case may be, Incurred in connection with
such refinancing; provided, however, that
(a) Debt the proceeds of which are used to refinance the
notes or Debt that is pari passu with or subordinate in right of
payment to the notes shall only be permitted if
(1) in the case of any refinancing of the notes or
Debt that is pari passu with the notes, the refinancing
Debt is Incurred by Insilco and made pari passu with the
notes or subordinated in right of payment to the notes,
and
(2) in the case of any refinancing of Debt that is
subordinate in right of payment to the notes, the
refinancing Debt is Incurred by Insilco and constitutes
Subordinated Indebtedness;
(b) the refinancing Debt by its terms, or by the terms of
any agreement or instrument pursuant to which such Debt is
issued,
(1) does not provide for payments of principal of
such Debt at the stated maturity thereof or by way of a
sinking fund applicable thereto or by way of any
mandatory redemption, defeasance, retirement or
repurchase thereof (including any redemption,
defeasance, retirement or repurchase which is contingent
upon events or circumstances, but excluding any
retirement required by virtue of acceleration of such
Debt upon any event of default thereunder), in each case
prior to the final stated maturity of the Debt being
refinanced and
(2) except as provided for by the terms of the
Debt being refinanced, does not permit redemption or
other retirement (including pursuant to an offer to
purchase) of such Debt at the option of the holder
thereof prior to the final stated maturity of the Debt
being refinanced other than a redemption or other
retirement at the option of the holder of such Debt
(including pursuant to an offer to purchase) which is
conditioned upon provisions substantially similar to
those described above under "Repurchase at the Option of
Holders--Asset Dispositions" and "--Change of Control";
(c) in the case of any refinancing of Debt Incurred by
Insilco, the refinancing Debt may be Incurred only by Insilco
and, in the case of any refinancing of Debt Incurred by a
Restricted Subsidiary, the refinancing Debt may be Incurred only
by Insilco or such Restricted Subsidiary; provided, further, that
Debt Incurred pursuant to this clause (7) may not be Incurred
more than 90 days prior to the application of the proceeds to
repay the Debt to be refinanced; and
(8) Debt not otherwise permitted to be Incurred by Insilco or
any Restricted Subsidiary pursuant to clauses (1) through (7) above,
which, together with any other outstanding Debt Incurred pursuant to
this clause (8), has an aggregate principal amount at any time
outstanding not in excess of $15 million (without duplication at such
time of any portion of any revolving credit commitment then in effect
that represents an increase made under the immediately preceding
clause (1)(B) in reliance on this clause (8)).
Limitation on Debt and Preferred Stock of Subsidiaries
Insilco may not cause, and may not permit, any Restricted
Subsidiary to Incur any Debt or issue any Preferred Stock except:
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(1) Debt Incurred by any Restricted Subsidiary that is expressly
permitted in the preceding paragraph;
(2) Debt or Preferred Stock outstanding on the date of the
indenture after giving effect to the application of the proceeds of
the notes;
(3) Debt or Preferred Stock issued to and held by Insilco or a
Wholly Owned Restricted Subsidiary (provided that such Debt or
Preferred Stock is at all times held by Insilco or a Wholly Owned
Restricted Subsidiary);
(4) Debt or Preferred Stock Incurred or issued by a Person prior
to the time
(A) such Person became a Restricted Subsidiary,
(B) such Person merges into or consolidates with a
Restricted Subsidiary or
(C) another Restricted Subsidiary merges into or
consolidates with such Person (in a transaction in which
such Person becomes a Restricted Subsidiary), which Debt or
Preferred Stock was not Incurred or issued in anticipation
of such transaction and was outstanding prior to such
transaction; or
(5) any guarantee incurred by any guarantor; provided, in the
case of this clause (5), that if the obligation guaranteed is
(x) subordinated to the notes, then such guarantee shall
be subordinated to the guarantee under the indenture to
substantially the same extent or
(y) pari passu with the notes, then such guarantee shall
be pari passu with the guarantee under the indenture to
substantially the same extent.
Limitation on Layered Debt
Insilco may not Incur any Debt which by its terms is both
(1) subordinated in right of payment to any Senior
Indebtedness and
(2) senior in right of payment to the notes.
Limitation on Issuance of Guarantees of Subordinated Indebtedness
Insilco may not permit any Restricted Subsidiary, directly or
indirectly, to assume, guarantee or in any other manner become liable with
respect to any Debt of Insilco that by its terms is pari passu with or junior
in right of payment to the notes unless such Restricted Subsidiary has issued
a guarantee under the indenture.
Limitation on Restricted Payments
Insilco may not, and may not permit any Restricted Subsidiary
to, directly or indirectly,
(1) declare or pay any dividend, or make any distribution, of
any kind or character (whether in cash, property or securities) in
respect of the Capital Stock of Insilco or any Restricted Subsidiary
or to the holders thereof in their capacity as such (excluding
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(u) dividends or distributions to the extent payable in
shares of the Capital Stock of Insilco (other than
Redeemable Interests) or in options, warrants or other
rights to acquire the Capital Stock of Insilco (other than
Redeemable Interests),
(v) dividends or distributions by a Restricted Subsidiary
to Insilco or another Restricted Subsidiary and
(w) the payment of pro rata dividends by a Restricted
Subsidiary to holders of both minority and majority
interests in such Restricted Subsidiary),
(2) other than pursuant to the Special Redemption, purchase,
redeem or otherwise acquire or retire for value
(a) any Capital Stock of Insilco or any Capital Stock of
or other ownership interests in any Subsidiary or any Affiliate
or Related Person of Insilco or
(b) any options, warrants or rights to purchase or
acquire shares of Capital Stock of Insilco or any Capital Stock
of or other ownership interests in any Subsidiary or any
Affiliate or Related Person of Insilco (excluding, in each case
of (a) and (b), the purchase, redemption, acquisition or
retirement by any Restricted Subsidiary of any of its Capital
Stock, other ownership interests or options, warrants or rights
to purchase such Capital Stock or other ownership interests
(x) owned by Insilco or any Restricted Subsidiary,
(y) owned by any other Person if effected on
a pro rata basis with respect to holders of both minority
and majority interests in such Restricted Subsidiary or
(z) owned by any officer, director or employee of
Insilco, but solely for the purpose of enabling such Person
(or Insilco on his or her behalf) to satisfy tax obligations
in respect of his or her exercise of options, warrants or
rights to purchase Capital Stock of Insilco),
(3) make any Investment that is not a Permitted Investment or
(4) redeem, defease, repurchase, retire or otherwise acquire or
retire for value, prior to any scheduled maturity, repayment or
sinking fund payment, Debt of Insilco that is subordinate in right of
payment to the notes (each of the transactions described in clauses
(1) through (4) being a "Restricted Payment"), if:
(1) an Event of Default, or an event that with the
lapse of time or the giving of notice, or both, would constitute
an Event of Default, shall have occurred and be continuing;
(2) Insilco would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the most
recently ended four full fiscal quarter period for which annual
or quarterly financial statements are publicly available
immediately preceding the date of such Restricted Payment, not
have been permitted to Incur at least $1.00 of additional Debt
pursuant to the Consolidated EBITDA Coverage Ratio test described
in the first paragraph under "--Limitation on Consolidated Debt"
above; or
(3) upon giving effect to such Restricted Payment, the
aggregate of all Restricted Payments (excluding Restricted
Payments permitted by clauses (2), (3) and (4) of the next
succeeding paragraph) from the date of the indenture (the amount
so expended, if other than in cash, determined in good faith by
the Board of Directors) exceeds the sum, without duplication, of:
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(a) 50% of the aggregate Consolidated Net Income
(or, in case Consolidated Net Income shall be negative, less
100% of such deficit) for the period (taken as one
accounting period) from June 30, 1997 through the end of
Insilco's most recently ended fiscal quarter for which
annual or quarterly financial statements are publicly
available at the time of such Restricted Payment;
(b) 100% of the aggregate net cash proceeds from
the issuance and sale (other than to a Restricted
Subsidiary) of Capital Stock (other than Redeemable
Interests) of Insilco and options, warrants or other rights
to acquire Capital Stock (other than Redeemable Interests
and Debt convertible into Capital Stock) of Insilco and the
principal amount of Debt and Redeemable Interests of Insilco
that has been converted into or exchanged for Capital Stock
(other than Redeemable Interests) of Insilco after June 30,
1997, provided that any such net proceeds received by
Insilco from an employee stock ownership plan financed by
loans from Insilco or a Subsidiary of Insilco shall be
included only to the extent such loans have been repaid with
cash on or prior to the date of determination;
(c) the amount by which the total consideration
paid by Insilco in the Tender Offer was less than $110
million; and
(d) $5 million.
The foregoing covenant will not be violated by reason of:
(1) the payment of any dividend within 60 days after
declaration thereof if at the declaration date such payment would
have complied with the foregoing covenant;
(2) any payment made by Insilco in connection with the
consummation of the Transactions;
(3) any refinancing or refunding of Debt permitted pursuant
to clause (1) or (7) of the second paragraph under "Limitation on
Consolidated Debt" above; and
(4) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of Insilco or any
options, warrants or rights to purchase or acquire shares of
Capital Stock of Insilco in exchange for, or out of the net cash
proceeds of, the substantially concurrent issuance or sale (other
than to a Restricted Subsidiary) of Capital Stock (other than
Redeemable Interests) of Insilco; provided that the amount of any
such net cash proceeds that are utilized for any such purchase,
redemption or other acquisition or retirement for value shall be
excluded from clause (3)(b) in the foregoing paragraph.
Upon the designation of any Restricted Subsidiary as an
Unrestricted Subsidiary, an amount equal to the greater of the book value and
the fair market value of all assets of such Restricted Subsidiary at the end
of Insilco's most recently ended fiscal quarter for which annual or quarterly
financial statements are publicly available prior to such designation will be
deemed to be a Restricted Payment at the time of such designation for purposes
of calculating the aggregate amount of Restricted Payments (including the
Restricted Payment resulting from such designation) permitted under provisions
described in the second preceding paragraph.
Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries
Insilco may not, and may not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary
(1) to pay dividends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock or other ownership
interests or pay any Debt or other obligation owed to Insilco or any
other Restricted Subsidiary;
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(2) to make loans or advances to Insilco or any other Restricted
Subsidiary; or
(3) to sell, lease or transfer any of its property or assets to
Insilco or any Restricted Subsidiary. Notwithstanding the foregoing,
Insilco may, and may permit any Restricted Subsidiary to, suffer to
exist any such encumbrance or restriction:
(a) pursuant to any agreement in effect on the date of
the indenture (including the Credit Facility, the indenture and
the notes);
(b) pursuant to an agreement relating to any Debt
Incurred by such Restricted Subsidiary prior to the date on which
such Restricted Subsidiary was acquired by Insilco and
outstanding on such date and not Incurred in anticipation of
becoming a Restricted Subsidiary;
(c) pursuant to mortgages and other purchase money
obligations in connection with property acquired or improved in
the ordinary course of business or liens in connection therewith
permitted to be Incurred under the indenture as described in "--
Limitation on Liens" below that impose restrictions of the nature
described in clause (3) above on the property so acquired or
improved;
(d) pursuant to an agreement effecting a renewal,
refunding, refinancing or extension of Debt Incurred pursuant to
an agreement referred to in clause (a), (b) or (c) above,
provided, however, that the provisions contained in such renewal,
refunding, refinancing or extension agreement relating to such
encumbrance or restriction are no more restrictive in any
material respect than the provisions contained in the agreement
the subject thereof (as determined in good faith by the Board of
Directors);
(e) pursuant to customary non-assignment provisions
entered into in the ordinary course of business consistent with
past practices in leases, licenses or contracts to the extent
such provisions restrict the transfer, subletting or other
disposition of any such lease, license or contract;
(f) pursuant to an agreement which has been entered into
for the sale or other disposition of all or substantially all of
the Capital Stock or assets of such Restricted Subsidiary,
provided that consummation of such transaction would not result
in an Event of Default or an event that, with the passing of time
or the giving of notice or both, would constitute an Event of
Default, that such restriction terminates if such transaction is
closed or abandoned and that the closing or abandonment of such
transaction occurs within one year of the date such agreement was
entered into; or
(g) arising under any applicable law, rule, regulation or
order.
Limitation on Liens
Insilco may not, and may not permit any Restricted Subsidiary
to, Incur or suffer to exist any Lien on or with respect to any property or
assets now owned or hereafter acquired to secure any Debt of Insilco that is
expressly by its terms subordinate or junior in right of payment to any other
Debt of Insilco (other than related to any secured deposit of funds for the
repayment of the 10(1)/(4)% notes; provided that the excess of such secured
deposit over the principal amount of the 10(1)/(4)% notes to be repaid shall
be deemed to be a Restricted Payment) without making, or causing such
Restricted Subsidiary to make, effective provision for securing the notes
(1) equally and ratably with such Debt as to such property or
assets for so long as such Debt will be so secured or
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(2) in the event such Debt is subordinate in right of payment
to the notes, prior to such Debt as to such property or assets for so
long as such Debt will be secured.
Limitation on Ownership of Capital Stock of Subsidiaries
Insilco may not, and may not permit any Restricted Subsidiary
to, issue, transfer, convey, lease or otherwise dispose of any shares of
Capital Stock (other than directors' qualifying shares and shares pledged as
security for any Senior Indebtedness) of a Restricted Subsidiary or securities
convertible or exchangeable into, or options, warrants, rights or any other
interest with respect to, Capital Stock of a Restricted Subsidiary to any
Person other than Insilco or a Wholly Owned Restricted Subsidiary except in a
transaction consisting of a sale (including a public offering) of all or part
of the Capital Stock of such Restricted Subsidiary owned by Insilco and any
Restricted Subsidiary and that complies with the provisions described under
"Repurchase at the Option of Holders--Asset Dispositions" above to the
extent such provisions apply; provided that after any sale of less than all
of the Capital Stock of any Restricted Subsidiary, Insilco directly or
indirectly maintains voting power to elect a majority of the board of
directors of such Restricted Subsidiary.
Transactions with Affiliates and Related Persons
Insilco may not, and may not permit any Restricted Subsidiary
to, after the date of the indenture, enter into any transaction (or series of
related transactions) with an Affiliate or Related Person of Insilco (other
than Insilco or any Restricted Subsidiary), including any Investment, either
directly or indirectly, that involves total consideration or asset transfers
in excess of $1,000,000
(1) unless such transaction is on terms no less favorable to
Insilco or such Restricted Subsidiary than those that could be
obtained in a comparable arm's-length transaction with an entity that
is not an Affiliate or Related Person and is in the best interests of
Insilco or such Restricted Subsidiary and
(2) except for the Transactions. For any transaction that
involves in excess of $1,000,000 but less than or equal to $5,000,000,
the Chief Executive Officer of Insilco shall determine that the
transaction satisfies the above criteria and shall evidence such a
determination by a certificate filed with the Trustee. For any
transaction that involves in excess of $5,000,000, a majority of the
disinterested members of the Board of Directors shall determine that
the transaction satisfies the above criteria and shall evidence such a
determination by a Board Resolution filed with the Trustee. For any
transaction that involves in excess of $10,000,000, Insilco shall also
obtain an opinion from a nationally recognized expert with experience
in appraising the terms and conditions of the type of transaction (or
series of related transactions) for which the opinion is required
stating that such transaction (or series of related transactions) is
on terms no less favorable to Insilco or such Restricted Subsidiary
than those that could be obtained in a comparable arm's-length
transaction with an entity that is not an Affiliate or Related Person
of Insilco, which opinion shall be filed with the Trustee; provided,
however, that the foregoing restrictions will not apply to:
(a) reasonable employment, compensation, bonus or benefit
arrangements entered into in the ordinary course of business
(including the granting of stock acquisition rights and other
incentives other than Redeemable Interests); the payment of
reasonable fees, expense reimbursements and customary
indemnification, advances and other similar arrangements with
respect to officers and directors; and reasonable loans and
advances to employees in the ordinary course of business;
(b) required payments with respect to any Debt permitted by
the indenture as described in "Covenants--Limitation on
Consolidated Debt" above;
(c) transactions permitted by the indenture as described in
"Covenants--Limitation on Restricted Payments" above;
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(d) any payments or other transactions pursuant to any tax
sharing agreement with any Person with which Insilco or such
Restricted Subsidiary is required or permitted to file a
consolidated tax return or with which Insilco or such Restricted
Subsidiary is or could be part of a consolidated group for tax
purposes; and
(e) any transaction with the Principals, their Related
Parties or any of their Affiliates to the extent that such
transaction is or was approved by a majority of the disinterested
members of the Board of Directors in good faith.
Provision of Financial Information
Whether or not Insilco is required to be subject to Section
13(a) or15(d) of the Exchange Act, or any successor provision thereto, Insilco
shall file with the Commission the annual reports, quarterly reports and other
documents that Insilco would have been required to file with the Commission
pursuant to such Section 13(a) or 15(d) or any successor provision thereto if
Insilco were so required, such documents to be filed with the Commission on or
prior to the respective dates (the "Required Filing Dates") by which Insilco
would have been required so to file such documents if Insilco were so
required. Insilco shall also in any event within 15 days after each Required
Filing Date
(1) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, without cost to such
Holders, and
(2) file with the Trustee,
copies of the annual reports, quarterly reports and other documents that
Insilco files with the Commission pursuant to such Section 13(a) or 15(d) or
any successor provision thereto or would have been required to file with the
Commission pursuant to such Section 13(a) or 15(d) or any successor provision
thereto if Insilco were so required. If filing such documents by Insilco with
the Commission is not permitted under the Exchange Act, Insilco will upon
written request promptly provide copies of such documents to any prospective
holder of the notes.
Unrestricted Subsidiaries
Insilco at any time may designate any Person that is a
Subsidiary, or after the date of the indenture becomes a Subsidiary, of
Insilco as an "Unrestricted Subsidiary," whereupon (and until such Person
ceases to be an Unrestricted Subsidiary) such Person and each other Person
that is then or thereafter becomes a Subsidiary of such Person will be deemed
to be an Unrestricted Subsidiary. In addition, Insilco may at any time
terminate the status of any Unrestricted Subsidiary as an Unrestricted
Subsidiary, whereupon such Subsidiary and each other Subsidiary of Insilco (if
any) of which such Subsidiary is a Subsidiary will be a Restricted Subsidiary.
Notwithstanding the foregoing, no change in the status of a
Subsidiary of Insilco from a Restricted Subsidiary to an Unrestricted
Subsidiary or from an Unrestricted Subsidiary to a Restricted Subsidiary will
be effective, and no Person may otherwise become a Restricted Subsidiary, if:
(1) the Consolidated EBITDA Coverage Ratio of Insilco and its
Restricted Subsidiaries for the four full fiscal quarters of Insilco
next preceding the effective date of such purported change or other
event, calculated on a pro forma basis as if such change or other
event had been effective at the beginning of such period, would not
exceed
(a) on or prior to November 9, 1999, 1.9 to 1.0 and
(b) thereafter, 2.0 to 1.0;
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(2) in the case of any change in status of a Restricted
Subsidiary to an Unrestricted Subsidiary, the Restricted Payment
resulting from such change would violate the provisions of the
indenture described under clause (3) of the first paragraph under
"Covenants--Limitation on Restricted Payments" above; or
(3) such change or other event would otherwise result (after
the giving of notice or the lapse of time, or both) in an Event of
Default.
In addition and notwithstanding the foregoing, no Restricted
Subsidiary may become an Unrestricted Subsidiary, and the status of any
Unrestricted Subsidiary as an Unrestricted Subsidiary will be deemed to have
been immediately terminated (whereupon such Subsidiary and each other
Subsidiary of Insilco (if any) of which such Subsidiary is a Subsidiary will
be a Restricted Subsidiary) at any time when:
(1) such Subsidiary
(A) has outstanding Debt that is Unpermitted Debt or
(B) owns or holds any Capital Stock of or other ownership
interests in, or a Lien on any property or other assets of,
Insilco or any of its Restricted Subsidiaries; or
(2) Insilco or any other Restricted Subsidiary
(A) provides credit support for, or a guarantee of, any
Debt of such Subsidiary (including any undertaking, agreement
or instrument evidencing such Debt) or
(B) is directly or indirectly liable for any Debt of such
Subsidiary.
Any termination of the status of an Unrestricted Subsidiary as
an Unrestricted Subsidiary pursuant to the preceding sentence will be deemed
to result in a breach of this covenant in any circumstance in which Insilco
would not be permitted to change the status of such Unrestricted Subsidiary to
the status of a Restricted Subsidiary pursuant to the provision of the
indenture described under the preceding paragraph; provided, however, that
(a) so long as the aggregate principal amount outstanding of
Unpermitted Debt does not exceed $5 million, no such breach will be deemed to
have occurred with respect to any Unpermitted Debt until 15 days after Insilco
has become aware of such Unpermitted Debt and such Unpermitted Debt remains
outstanding or Unpermitted Debt, and
(b) any change of status of an Unrestricted Subsidiary to a
Restricted Subsidiary as aforesaid followed within one year by a change of
status of such Restricted Subsidiary to an Unrestricted Subsidiary will not be
deemed an Asset Disposition or cause any Reinvested Amount invested therein to
be deemed Net Available Proceeds or the book value or fair market value of the
assets thereof to be deemed a Restricted Payment. "Unpermitted Debt" means any
Debt of a Subsidiary of Insilco if
(x) a default thereunder (or under any instrument or agreement
pursuant to or by which such Debt is issued, secured or evidenced), or
any right that the holders thereof may have to take enforcement action
against such Subsidiary or its property or other assets, would permit
(whether or not after the giving of notice or the lapse time or both) the
holders of any Debt of Insilco or any other Restricted Subsidiary to
declare the same due and payable prior to the date on which it otherwise
would have become due and payable or otherwise to take any enforcement
action against Insilco or such other Restricted Subsidiary or
(y) such Debt is secured by a Lien on any property or other
assets of Insilco and any of its other Restricted Subsidiaries.
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Each Person that is or becomes a Subsidiary of Insilco will be
deemed to be a Restricted Subsidiary at all times when it is a Subsidiary of
Insilco that is not an Unrestricted Subsidiary. Each Person that is or becomes
a Wholly Owned Subsidiary of Insilco shall be deemed to be a Wholly Owned
Restricted Subsidiary at all times when it is a Wholly Owned Subsidiary of
Insilco that is not an Unrestricted Subsidiary.
Mergers, Consolidations and Certain Sales of Assets
Insilco
(1) may not, and may not permit any Restricted Subsidiary to,
consolidate with or merge into any Person, provided that this clause
(1) will not prohibit any such consolidation or merger by a Restricted
Subsidiary if
(x) such Restricted Subsidiary ceases to be a Restricted
Subsidiary in such consolidation or merger or
(y) such consolidation or merger is with or into Insilco or
another Restricted Subsidiary;
(2) may not permit any Person other than a Restricted Subsidiary
to consolidate with or merge into Insilco or any Restricted Subsidiary,
provided that this clause (2) will not prohibit any such consolidation or
merger with or into a Restricted Subsidiary if such Restricted Subsidiary
ceases to be a Restricted Subsidiary in such consolidation or merger; and
(3) may not, directly or indirectly (in one transaction or a
series of related transactions), transfer, convey, sell, lease or otherwise
dispose of all or substantially all of the properties and assets of Insilco
and its Subsidiaries on a consolidated basis unless, in each case (1), (2) and
(3) above:
(1) immediately before and after giving effect to such
transaction (or series of related transactions) and treating any Debt
Incurred by Insilco or a Subsidiary of Insilco as a result thereof as
having been Incurred by Insilco or such Subsidiary at the time of such
transaction (or series of related transactions), no Event of Default,
or event that with the passing of time or the giving of notice, or
both, will constitute an Event of Default, shall have occurred and be
continuing;
(2) in a transaction (or series of related transactions) in
which Insilco does not survive or in which Insilco transfers, conveys,
sells, leases or otherwise disposes of all or substantially all of its
properties and assets, the successor entity is a corporation,
partnership, limited liability company or trust and is organized and
validly existing under the laws of the United States of America, any
state thereof or the District of Columbia and expressly assumes, by a
Supplemental Indenture executed and delivered to the Trustee in form
satisfactory to the Trustee, all Insilco's obligations under the
indenture;
(3) Insilco or its successor entity would, at the time of such
transaction (or series of related transactions) and after giving pro
forma effect thereto as if such transaction (or series of related
transactions) had occurred at the beginning of the most recently ended
four full fiscal quarter period for which annual or quarterly
financial statements are publicly available immediately preceding the
date of such transaction (or series of related transactions), have
been permitted to Incur at least $1.00 of additional Debt pursuant to
the Consolidated EBITDA Coverage Ratio test described in the first
paragraph under "Covenants--Limitation on Consolidated Debt" above;
(4) if, as a result of any such transaction, property or assets
of Insilco would become subject to a Lien prohibited by the covenant
described above under "Covenants--Limitation on Liens," Insilco or its
successor entity will have secured the notes as required by such
covenant; and
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(5) Insilco has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel as specified in the indenture.
Events of Default
The following constitute Events of Default under the indenture:
(1) failure to pay any interest on any note when due, continuing
for 30 days;
(2) failure to pay principal of (or premium, if any, on) any note
when due;
(3) failure to perform or comply with the provisions described
under "Covenants--Mergers, Consolidations and Certain Sales of Assets"
or the provisions described under "Repurchase at the Option of
Holders--Asset Dispositions" and "--Change of Control";
(4) failure to perform any other covenant or warranty of Insilco
in the indenture or the notes, continuing for 60 days after written
notice to Insilco and the Trustee from Holders of at least 25% in
principal amount of the outstanding notes as provided in the
indenture;
(5) a default or defaults under any bonds, debentures, notes or
other evidences of, or obligations constituting, Debt by Insilco or any
Restricted Subsidiary or under any mortgages, indentures, instruments or
agreements under which there may be issued or existing or by which
there may be secured or evidenced any Debt of Insilco or any
Restricted Subsidiary, in each case with a principal or similar amount
then outstanding, individually or in the aggregate, in excess of $15
million, whether such Debt now exists or is hereafter created, which
default or defaults constitute a failure to pay any portion of the
principal or similar amount of such Debt when due and payable after
the expiration of any applicable grace period with respect thereto or
will have resulted in such Debt becoming or being declared due and
payable prior to the date on which it would otherwise have become due
and payable;
(6) the rendering of a final judgment or judgments (not subject
to appeal) against Insilco or any of its Restricted Subsidiaries in an
aggregate amount in excess of $15 million (in excess of applicable
insurance coverage) which remains unstayed, undischarged or unbonded
for a period of 60 days thereafter; and
(7) certain events of bankruptcy, insolvency or reorganization
affecting Insilco or any Restricted Subsidiary of Insilco.
Subject to the provisions of the indenture relating to the
duties of the Trustee in case an Event of Default occurs and is continuing,
the Trustee is under no obligation to exercise any of its rights or powers
under the indenture at the request or direction of any of the Holders, unless
such Holders have offered to the Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Trustee and certain other conditions
provided in the indenture, the Holders of a majority in aggregate principal
amount of the outstanding notes will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
or exercising any trust or power conferred on the Trustee.
If an Event of Default (other than an Event of Default of the
type described in clause (7) above) occurs and is continuing, either the
Trustee or the Holders of at least 25% in aggregate principal amount of the
outstanding notes may accelerate the maturity of all notes. If an Event of
Default of the type described in clause (7) above occurs, the principal amount
of and any accrued interest on the notes then outstanding will become
immediately due and payable; provided, however, that after such acceleration,
but before a judgment or decree based on acceleration, the Holders of a
majority in aggregate principal amount of outstanding notes may, under certain
circumstances, rescind and annul such
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acceleration if all Events of Default, other than the non-payment of
accelerated principal amount have been cured or waived as provided in the
indenture. For information as to waiver of defaults, see "Modification and
Waiver" below.
No Holder of any note has any right to institute any proceeding
with respect to the indenture or for any remedy thereunder, unless such Holder
shall have previously given to the Trustee written notice of a continuing
Event of Default and unless the Holders of at least 25% in aggregate principal
amount of the outstanding notes shall have made written request, and offered
reasonable indemnity, to the Trustee to institute such proceeding as trustee,
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the outstanding notes a direction inconsistent
with such request and shall have failed to institute such proceeding within 60
days. However, such limitations do not apply to a suit instituted by a Holder
of a note for enforcement of payment of the principal of and premium, if any,
or interest on such note on or after the respective due dates expressed in
such note.
In the case any Event of Default occurs by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of Insilco
with the intention of avoiding payment of the premium that Insilco would have
had to pay if Insilco then had elected to redeem the notes pursuant to the
provisions described above under "Repurchase at the Option of Holders," an
equivalent premium will become and be immediately due and payable upon the
acceleration of the notes.
Insilco is required to furnish to the Trustee annually a
statement as to the performance by Insilco of certain of its obligations under
the indenture and as to any default in such performance. Insilco will be
required to deliver to the Trustee, as soon as possible and in any event
within 30 days after Insilco becomes aware of the occurrence of an Event of
Default or an event which, with notice or the lapse of time or both, would
constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default, and the action which Insilco
proposes to take with respect thereto.
Defeasance
The indenture provides that, at the option of Insilco, (a) if
applicable, Insilco and the guarantors will be discharged from any and all
obligations in respect of the outstanding notes and guarantees or (b) if
applicable, Insilco may omit to comply with certain restrictive covenants, and
that such omission shall not be deemed to be an Event of Default under the
indenture and the notes, in either case (a) or (b) upon irrevocable deposit
with the Trustee, in trust, of money and/or U.S. Government Obligations that
will provide money in an amount sufficient in the opinion of a nationally
recognized firm of independent certified public accountants to pay the
principal of and premium, if any, and each installment of interest, if any, on
the outstanding notes. With respect to clause (b), the obligations under the
indenture other than with respect to such covenants and the Events of Default
other than the Events of Default relating to such covenants above shall remain
in full force and effect.
Such trust may only be established if, among other things
(1) with respect to clause (a), Insilco has received from, or
there has been published by, the Internal Revenue Service a ruling or
there has been a change in law, which in the Opinion of Counsel
provides that Holders of the notes will not recognize gain or loss for
Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred;
or, with respect to clause (b), Insilco has delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of the notes will
not recognize gain or loss for Federal income tax purposes as a result
of such deposit and defeasance and will be subject to Federal income
tax on the same amount, in the same manner and at the same times as
would have been the case if such deposit and defeasance had not
occurred;
(2) no Event of Default or event that with the passing of time
of the giving of notice, or both, shall constitute an Event of Default
shall have occurred or be continuing;
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(3) Insilco has delivered to the Trustee an Opinion of Counsel
to the effect that such deposit shall not cause the Trustee or the
trust so created to be subject to the Investment Company Act of 1940;
and
(4) certain other customary conditions precedent are satisfied.
In the event Insilco omits to comply with its remaining
obligations under the indenture and the notes after a defeasance of the
indenture with respect to the notes as described under clause (b) above and
the notes are declared due and payable because of the occurrence of any Event
of Default, the amount of money and U.S. Government Obligations on deposit
with the Trustee may be insufficient to pay amounts due on the notes at the
time of the acceleration resulting from such Event of Default. However,
Insilco will remain liable in respect of such payments.
Modification and Waiver
Modifications and amendments of the indenture may be made by
Insilco and the Trustee with the consent of the Holders of two-thirds in
aggregate principal amount of the outstanding notes; provided, however, that
no such modification or amendment may, without the consent of the Holder of
each outstanding note affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any note,
(2) reduce the principal amount of, (or the premium) or interest
on, any note,
(3) change the place or currency of payment of principal of (or
premium), or interest on, any note,
(4) impair the right to institute suit for the enforcement of
any payment on or with respect to any note,
(5) reduce the above-stated percentage of outstanding notes
necessary to modify or amend the indenture,
(6) reduce the percentage of aggregate principal amount of
outstanding notes necessary for waiver of compliance with certain
provisions of the indenture or for waiver of certain defaults,
(7) modify any provisions of the indenture relating to the
modification and amendment of the indenture or the waiver of past
defaults or covenants, except as otherwise specified,
(8) modify any of the provisions of the indenture relating to
the subordination of the notes in a manner adverse to the Holders or
(9) modify the provisions described under "Repurchase at the
Option of Holders--Asset Dispositions" and under "--Change of Control"
in a manner adverse to the Holders in any material respect.
The Holders of two-thirds in aggregate principal amount of the
outstanding notes, on behalf of all Holders of notes, may waive compliance by
Insilco with certain restrictive provisions of the indenture. The Holders of
two-thirds in aggregate principal amount of the outstanding notes, on behalf
of all Holders of notes, may waive any past default under the indenture,
except a default in the payment of principal, premium or interest.
No amendment, waiver or modification of any subordination
provision adverse to the holders of Senior Indebtedness will be effective
against any holder of Senior Indebtedness unless expressly consented to in
writing by or on behalf of such holder (or by any specified percentage of
holders of a class of Senior Indebtedness required to consent thereto)
pursuant to the terms of the agreement or instrument creating, evidencing or
governing such Senior Indebtedness.
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Notices
Notices to Holders will be given by mail to the addresses of
such Holders as they may appear in the Security Register.
Governing Law
The indenture, the notes and the guarantees are governed by,
and construed in accordance with, the laws of the State of New York, without
regard to its conflict of law principles.
The Trustee
The indenture provides that, except during the continuance of
an Event of Default, the Trustee will perform only such duties as are
specifically set forth in the indenture. During the existence of an Event of
Default, the Trustee will exercise such rights and powers vested in it under
the indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise under the circumstances in the conduct of such
person's own affairs.
The indenture and provisions of the TIA incorporated by
reference therein contain limitations on the rights of the Trustee, should it
become a creditor of Insilco, to obtain payment of claims in certain cases or
to realize on certain property received by it in respect of any such claim as
security or otherwise. The Trustee is permitted to engage in other
transactions with Insilco or any Affiliate, provided, however, that if it
acquires any conflicting interest (as defined in the indenture or in the TIA),
it must eliminate such conflict or resign. Star Bank, N.A., the Trustee under
the indenture, is the trustee under the Holdings Indenture, may become a
lender under the Credit Facility and may engage in other transactions with
Insilco or its subsidiaries in connection with which Star Bank, N.A. may be or
become a creditor of Insilco.
Book-Entry; Delivery and Form
The certificates representing the New Notes will be issued in
fully registered form, without coupons. Except as described below, the New
Notes will be deposited with, or on behalf of, the Depository Trust Company,
New York, New York ("DTC"), and registered in the name of Cede & Co. ("Cede")
as DTC's nominee, in the form of a global note (the "Global Registered Note").
The Global Registered Note. Insilco expects that pursuant to
procedures established by DTC (a) upon deposit of the Global Registered Note,
DTC or its custodian will credit on its internal system interests in the
Global Registered Notes to the accounts of persons who have accounts with DTC
("Participants") and (b) ownership of the Global Registered Note will be shown
on, and the transfer of ownership thereof will be effected only through,
records maintained by DTC or its nominee (with respect to interests of
Participants) and the records of Participants (with respect to interests of
persons other than Participants). Ownership of beneficial interests in the
Global Registered Note will be limited to Participants or persons who hold
interests through Participants.
So long as DTC or its nominee is the registered owner or holder
of the New Notes, DTC or such nominee will be considered the sole owner or
holder of the New Notes represented by the Global Registered Note for all
purposes under the indenture. No beneficial owner of an interest in the
Global Registered Note will be able to transfer such interest except in
accordance with DTC's procedures, in addition to those provided for under the
indenture with respect to the New Notes.
Payments of the principal of or premium and interest on the
Global Registered Note will be made to DTC or its nominee, as the case may be,
as the registered owner thereof. None of Insilco, the Trustee or any paying
agent under the indenture will have any responsibility or liability for any
aspect of the records relating to or payments made on
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account of beneficial ownership interests in the Global Registered Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest.
We expect that DTC or its nominee, upon receipt of any payment
of the principal of or premium and interest on the Global Registered Note,
will credit Participants' accounts with payments in amounts proportionate to
their respective beneficial interests in the principal amount of such Global
Registered Note as shown on the records of DTC or its nominee. We also expect
that payments by Participants to owners of beneficial interests in the Global
Registered Note held through such Participants will be governed by standing
instructions and customary practice as is now the case with securities held
for the accounts of customers registered in the names of nominees for such
customers. Such payments will be the responsibility of such Participants.
Transfers between Participants in DTC will be effected in
accordance with DTC rules and will be settled in immediately available funds.
If a holder requires physical delivery of a Certificated exchange note for any
reason, including to sell New Notes to persons in states which require
physical delivery of the New Notes or to pledge such securities, such holder
must transfer its interest in the Global Registered Note in accordance with
the normal procedures of DTC and with the procedures set forth in the
indenture.
DTC has advised us that DTC will take any action permitted to
be taken by a holder of New Notes (including the presentation of New Notes for
exchange as described below) only at the direction of one or more Participants
to whose account at DTC interests in the Global Registered Note are credited
and only in respect of such portion of the aggregate principal amount of New
Notes as to which such Participant or Participants has or have given such
direction. However, if there is an Event of Default under the indenture, DTC
will exchange the Global Registered Note for Certificated New Notes, which it
will distribute to its Participants.
DTC has advised us as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and certain
other organizations. Indirect access to the DTC system is available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants").
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interest in the Global Registered Notes among
Participants, it is under no obligation to perform such procedures, and such
procedures may be discontinued at any time. Neither Holdings nor the Trustee
will have any responsibility for the performance by DTC or its Participants or
Indirect Participants of their respective obligations under the rules and
procedures governing their operations.
Certificated Notes. Interests in the Global Registered Notes
will be exchangeable or transferable, as the case may be, for certificated
notes if
(1) DTC notifies us that it is unwilling or unable to continue
as depositary for such Global Registered Notes, or DTC ceases to be a
"clearing agency" registered under the Exchange Act, and a successor
depositary is not appointed by Holdings within 90 days, or
(2) an Event of Default has occurred and is continuing with
respect to such New Notes. Upon the occurrence of any of the events
described in the preceding sentence, Insilco will cause the
appropriate certificated notes to be delivered.
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Certain Definitions
Set forth below is a summary of certain of the defined terms
used in the indenture. Reference is made to the indenture for the full
definition of all such terms, as well as any other terms used herein for which
no definition is provided.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Asset Disposition" means, with respect to Insilco or any
Restricted Subsidiary, any transfer, conveyance, sale, lease or other
disposition by Insilco or such Restricted Subsidiary (including a
consolidation or merger or other sale of such Restricted Subsidiary with, into
or to another Person in a transaction in which such Restricted Subsidiary
ceases to be a Restricted Subsidiary) of
(1) shares of Capital Stock (other than directors' qualifying
shares) or other ownership interests of any Restricted Subsidiary,
(2) substantially all of the assets of Insilco or such
Restricted Subsidiary representing a division or line of business or
(3) other assets or rights of Insilco or any Restricted
Subsidiary outside of the ordinary course of business, but excluding,
in each case of clauses (1), (2) and (3),
(a) any disposition in the ordinary course of business of
obsolete equipment or other property used in the business of
Insilco or any Restricted Subsidiary that is no longer used or
useful in such business,
(b) any disposition by Insilco or any Restricted Subsidiary to
Insilco or any Wholly Owned Restricted Subsidiary,
(c) required payments with respect to any Debt permitted by the
indenture as described in "Covenants--Limitation on Consolidated
Debt" above,
(d) any disposition that is permitted under the indenture as
described in "Covenants--Limitation on Restricted Payments"
above, and
(e) the disposition of all or substantially all of the assets
of Insilco permitted under the indenture as described in
"Covenants--Mergers, Consolidations and Certain Sales of Assets"
above.
"Capital Lease Obligation" of any Person means the obligation
to pay rent or other payment amounts under a lease of (or other Debt
arrangements conveying the right to use) real or personal property of such
Person that is required to be classified and accounted for as a capital lease
or a liability on the face of balance sheet of such Person in accordance with
generally accepted accounting principles. The stated maturity of such
obligation shall be the date of the last payment of rent or any other amount
due under such lease prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty. The principal amount of
such obligation shall be the capitalized amount thereof that would appear on
the face of a balance sheet of such Person in accordance with generally
accepted accounting principles.
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"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock or other equity participations, including partnership
interests, whether general or limited, of such Person.
"Change of Control" will be deemed to have occurred in the
event that, after the date of the indenture, the following occurs:
(1) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of
Insilco and its Subsidiaries, taken as a whole, to any "person" or
"group" (as such terms are used in Section 13(d) of the Exchange Act),
other than the Principals and their Related Parties;
(2) the adoption of a plan for the liquidation or dissolution
of Insilco;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" or "group" (as such terms are used in Section 13(d) of the
Exchange Act), other than the Principals and their Related Parties,
becomes the "beneficial owner" (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly through
one or more intermediaries, of 50% or more of the voting power of the
outstanding voting stock of Insilco; or
(4) the first day on which a majority of the members of the
Board of Directors of Insilco are not Continuing Directors.
The definition of Change of Control includes a phrase relating
to the sale, lease, transfer, conveyance or other disposition of "all or
substantially all" of the assets of Insilco and its Subsidiaries taken as a
whole. Although there is a developing body of case law interpreting the phrase
"substantially all," there is no precise established definition of the phrase
under applicable law. Accordingly, the ability of a Holder of notes to require
Insilco to repurchase such notes as a result of a sale, lease, transfer,
conveyance or other disposition of less than all of the assets of Insilco and
its Subsidiaries taken as a whole to another Person or group may be uncertain.
"Claim" means any and all rights to payment under or in respect
of any of the notes or the indenture, all rights, remedies, demands, causes of
action and claims of every type and description at any time held or asserted
by, or arising in favor of, any holder of a note against Insilco or any of its
Subsidiaries or Affiliates or any of their assets, in each case on account of
any breach of any promise, obligation, agreement, indemnity, representation,
warranty or covenant in a note or the indenture or the performance or
nonperformance or payment or nonpayment thereof.
"Common Stock" of any Person means Capital Stock of such Person
that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Consolidated EBITDA" of any Person means for any period, on a
consolidated basis for such Person and its Consolidated Subsidiaries, the sum
of the amounts for such period of
(1) Consolidated Net Income,
(2) Consolidated Interest Expense (but excluding any interest
capitalized in accordance with generally accepted accounting principles),
(3) Consolidated Income Tax Expense,
(4) depreciation and amortization expense,
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(5) other non-cash charges and
(6) other non-operating expenses that have been deducted in the
determination of Consolidated Net Income; provided, however, that for
each such Consolidated Subsidiary the items (1) through (6) shall be
included in such sum only
(x) to the extent and in the same proportion that the
Consolidated Net Income of such Consolidated Subsidiary was
included in calculating the Consolidated Net Income of such
Person and
(y) only to the extent that the amount specified in clause (x)
is not restricted from the payment of dividends or the making of
distributions to such Person during such period.
"Consolidated EBITDA Coverage Ratio" of any Person means for
any period the ratio of
(1) Consolidated EBITDA of such Person for such period to
(2) the sum of
(A) Consolidated Interest Expense of such Person for such
period, plus
(B) the annual interest expense (including the amortization
of debt discount but excluding the fees and expenses incurred in
connection with the amortization of the Old Credit Facility) with
respect to any Debt Incurred or proposed to be Incurred by such
Person or its Consolidated Subsidiaries since the beginning of
such period to the extent not included within clause (2)(A),
minus
(C) Consolidated Interest Expense of such Person with
respect to any Debt that is no longer outstanding or that will no
longer be outstanding as a result of the transaction with respect
to which the Consolidated EBITDA Coverage Ratio is being
calculated, to the extent included within clause (2)(A);
provided, however, that in making such computation, the
Consolidated Interest Expense of such Person attributable to
interest on any Debt bearing a floating interest rate shall be
computed on a pro forma basis as if the rate in effect on the
date of computation had been the applicable rate for the entire
period; and provided, further, that, in the event such Person or
any of its Consolidated Subsidiaries has made acquisitions or
dispositions of assets not in the ordinary course of business
(including by merger, consolidation or purchase of Capital Stock)
during or after such period, the computation of the Consolidation
EBITDA Coverage Ratio (and for the purpose of such computation,
the calculation of Consolidated Net Income, Consolidated Interest
Expense, Consolidated Income Tax Expense and Consolidated EBITDA)
shall be made on a pro forma basis as if the acquisitions or
dispositions had taken place on the first day of such period.
"Consolidated Income Tax Expense" of any Person means for any
period the consolidated provision for income taxes of such Person and its
Consolidated Subsidiaries for such period determined in accordance with
generally accepted accounting principles.
"Consolidated Interest Expense" of any Person means for any
period, on a consolidated basis for such Person and its Consolidated
Subsidiaries, all of the following determined in accordance with generally
accepted accounting principles:
(1) the consolidated interest expense included in a
consolidated income statement (net of interest income),
(2) the portion of any rental obligation in respect of any
Capital Lease Obligation allocable to interest expense in accordance with
generally accepted accounting principles;
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(3) the amortization of Debt discounts (but excluding the
amortization of fees and expenses incurred in connection with the
amortization of the Old Credit Facility and the amount of financing
costs and expenses that are capitalized and amortized);
(4) to the extent not included in total interest expense, any
net payments made or received during such period under interest rate
or currency swaps, hedges or exchanges or similar derivative
agreements, including any amortized portion of such payments and
(5) any interest capitalized in accordance with generally
accepted accounting principles.
"Consolidated Net Income" of any Person means for any period
the consolidated net income (or loss) of such Person and its Consolidated
Subsidiaries for such period determined in accordance with generally accepted
accounting principles; provided that there shall be excluded therefrom
(1) the net income (or loss) of any Person acquired by such
Person or a Subsidiary of such Person in a pooling-of-interests
transaction for any period prior to the date of such transaction
(subject to the final proviso of the definition of Consolidated EBITDA
Coverage Ratio when Consolidated Net Income is being computed for
purposes of calculating the Consolidated EBITDA Coverage Ratio),
(2) the net income (but not net loss) of any Consolidated
Subsidiary of such Person to the extent restricted from the payment of
dividends or the making of distributions to such Person during such
period,
(3) the net income (or loss) of any Person that is not a
Consolidated Subsidiary of such Person except to the extent of the
amount of dividends or other distributions actually paid to such
Person by such other Person during such period,
(4) extraordinary gains and losses (and any unusual gains and
losses arising outside the ordinary course of business not included in
extraordinary gains and losses),
(5) net gains and losses in respect of dispositions of assets
other than in the ordinary course of business and
(6) the tax effect of any of the items described in clauses (1)
through (5) above.
"Consolidated Net Worth" of any Person at any date means the
consolidated stockholders' equity of such Person and its Consolidated
Subsidiaries at such date, as determined on a consolidated basis in accordance
with generally accepted accounting principles, less amounts attributable to
Redeemable Interests of such Person; provided, however, that, with respect to
Insilco and its Restricted Subsidiaries, adjustments following the date of the
indenture to the accounting books and records of Insilco and its Restricted
Subsidiaries in accordance with Accounting Principles Board Opinions Nos. 16
and 17 (or successor opinions thereto) or otherwise resulting from the
acquisition of control of Insilco by another Person shall not be given effect
to.
"Consolidated Subsidiaries" of any Person means all other
Persons that would be accounted for as consolidated Persons in such Person's
financial statements in accordance with generally accepted accounting
principles; provided, however, that, for any particular period during which
any Subsidiary of Insilco was an Unrestricted Subsidiary, "Consolidated
Subsidiaries" will exclude such Subsidiary for such period (or portion
thereof) during which it was an Unrestricted Subsidiary.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of Insilco who (a) was a member of such
Board of Directors on the date of the indenture or (b) was nominated for
election or
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elected to such Board of Directors with the approval of, or whose election
to the Board of Directors was ratified by, at least a majority of the
Continuing Directors who were members of such Board of Directors at the
time of such nomination or election.
"Credit Facility" means, collectively, the Credit Agreement
dated as of July 3, 1997 among Insilco, certain of its Subsidiaries, the
financial institutions from time to time party thereto as Lenders and Issuing
Banks, The First National Bank of Chicago and Goldman Sachs Credit Partners
L.P., as syndication agents, and Citicorp USA, Inc., in its separate capacity
as collateral and administrative agent for the Lenders and Issuing Banks, and
the Loan Documents (as defined therein) (or other analogous documents entered
into in connection with any refinancing thereof), in each case as the same may
from time to time be amended, renewed, supplemented or otherwise modified at
the option of the parties thereto; and any other agreement pursuant to which
any of the Debt, commitments, Obligations, costs, expenses, fees,
reimbursements and other indemnities payable or owing under the Credit
Facility may be refinanced, restructured, renewed, extended, refunded or
increased, as any such other agreement may from time to time at the option of
the parties thereto be amended, supplemented, renewed or otherwise modified.
"CVC" means 399 Venture Partners, Inc. and its Affiliates.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person,
(1) every obligation of such Person for money borrowed,
(2) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including payment
obligations Incurred in connection with the acquisition of property,
assets or businesses,
(3) every reimbursement obligation of such Person with respect
to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person,
(4) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade
accounts payable or accrued liabilities arising in the ordinary course
of business),
(5) every Capital Lease Obligation of such Person,
(6) the maximum fixed redemption or repurchase price of
Redeemable Interests of such Person at the time of determination,
(7) the market value of any indebtedness, obligation or other
liability of such Person in respect of any interest rate or currency
swap, hedge or exchange or similar derivative agreement with any
counterparty thereto, net of indebtedness, obligations or other
liabilities owed to such Person by such counterparty and
(8) every obligation of the type referred to in clauses (1)
through (7) of another Person and all dividends of another Person the
payment of which, in either case, such Person has guaranteed or for
which such Person is responsible or liable, directly or indirectly,
jointly or severally, as obligor, guarantor or otherwise, but
excluding from Debt
(a) any indebtedness, obligations or other liabilities subject
to the Plan of Reorganization and
(b) any indebtedness or other liabilities incurred in
connection with obligations incurred to pay premiums for
corporate owned life insurance policies purchased by Insilco in
an aggregate amount not to exceed the aggregate cash value of
such policies.
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"Designated Senior Indebtedness" means
(1) all Obligations in respect of the Credit Facility and
(2) all Obligations in respect of any other Senior
Indebtedness of Insilco in each case in an outstanding principal
amount not less than $10 million.
"DLJMB" means DLJ Merchant Banking Partners II, L.P. and its
Affiliates.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary
that is organized under the laws of the United States or any state, district
or territory thereof.
"Excepted Disposition" means a transfer, conveyance, sale,
lease or other disposition by Insilco or any Restricted Subsidiary of
(1) the Capital Stock or any or all of the assets of Taylor
Publishing Company,
(2) certain assets of a Restricted Subsidiary that may be
required to be divested, in an amount not to exceed $8 million, in
connection with an action by the Federal Trade Commission relating to
the acquisition by Insilco of certain assets of Helima-Helvetion
International, Inc. or
(3) any other asset of Insilco or any Restricted Subsidiary for
which Insilco or any Restricted Subsidiary receives a mortgage or a
purchase money security interest the principal amount of which at any
time outstanding does not exceed $8 million or, taken together with
all other mortgages and purchase money security interests in respect
of any other such assets, the aggregate principal amount of which at
any time outstanding does not exceed $15 million.
"guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt, or dividends or distributions
on any equity security, of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person,
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or to purchase (or to advance or supply
funds for the purchase of) any security for the payment of such Debt,
(2) to purchase property, securities or services for the purpose
of assuring the holder of such Debt of the payment of such Debt, or
(3) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Debt (and "guaranteed,"
"guaranteeing" and "guarantor" shall have meanings correlative to the
foregoing); provided, however, that the guarantee by any Person shall
not include endorsements by such Person for collection or deposit, in
either case, in the ordinary course of business.
"Incur" means, with respect to any Debt or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Debt or other
obligation or the recording, as required pursuant to generally accepted
accounting principles or otherwise, of any such Debt or other obligation on
the balance sheet of such Person (and "Incurrence", "Incurred", "Incurrable"
and "Incurring" shall have meanings correlative to the foregoing); provided,
however, that a change in generally accepted accounting principles that
results in an obligation of such Person that exists at such time becoming Debt
shall not be deemed an Incurrence of such Debt.
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"Interest Rate, Currency or Commodity Price Agreement" of any
Person means any forward contract, futures contract, swap, option or other
financial agreement or arrangement (including, without limitation, caps,
floors, collars and similar agreements) relating to, or the value of which is
dependent upon, interest rates, currency exchange rates or commodity prices or
indices (excluding contracts for the purchase or sale of goods in the ordinary
course of business).
"Investment" by any Person in any other Person means
(1) any direct or indirect loan, advance or other extension of
credit or capital contribution to or for the account of such other
Person (by means of any transfer of cash or other property to any
Person or any payment for property or services for the account or use
of any Person, or otherwise),
(2) any direct or indirect purchase or other acquisition of any
Capital Stock, bond, note, debenture or other debt or equity security or
evidence of Debt, or any other ownership interest, issued by such other
Person, whether or not such acquisition is from such or any other Person,
(3) any direct or indirect payment by such Person on a guarantee
of any obligation of or for the account of such other Person or
(4) any other investment of cash or other property by such
Person in or for the account of such other Person.
"Lien" means, with respect to any property or assets, any
mortgage or deed of trust, pledge, hypothecation, assignment, Receivables
Sale, deposit arrangement, security interest, lien, charge, easement (other
than any easement not materially impairing usefulness or marketability),
encumbrance, preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever on or with respect to such
property or assets (including, without limitation, any conditional sale or
other title retention agreement having substantially the same economic effect
as any of the foregoing).
"Net Available Proceeds" means cash, readily marketable cash
equivalents, readily marketable fixed-income securities and equity securities
traded on a national securities exchange or NASDAQ (valued, in the case of
securities, at the market value thereof when received by Insilco or such
Restricted Subsidiary) received (including by way of sale or discounting of a
note, installment receivable or other receivable, but excluding any other
consideration received in the form of an assumption by any transferee of Debt
or other obligations relating to the properties or assets transferred, or
otherwise received in any non-cash form) from an Asset Disposition by Insilco
or any Restricted Subsidiary, net of
(1) all legal, title and recording tax expenses, commissions
and other fees and expenses Incurred and all federal, state,
provincial, foreign and local taxes required to be accrued as a
liability as a consequence of such Asset Disposition,
(2) all payments made by Insilco or any Restricted
Subsidiary on any Debt which is secured by assets disposed of in such
Asset Disposition in accordance with the terms of any Lien upon or
with respect to such assets or which must by the terms of such Lien,
or in order to obtain a necessary consent to such Asset Disposition or
by applicable law, be repaid out of the proceeds from such Asset
Disposition,
(3) amounts provided as a reserve by Insilco or any
Restricted Subsidiary, in accordance with generally accepted
accounting principles, against liabilities under any indemnification
obligations to the buyer in such Asset Disposition (except to the
extent and at the time any such amounts are released from any such
reserve, such amounts shall constitute Net Available Proceeds) and
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(4) all distributions and other payments made to minority
interest holders in Restricted Subsidiaries or joint ventures as a
result of such Asset Disposition.
"Obligations" mean any principal, interest, penalties,
expenses, fees, indemnities, reimbursements, damages and other liabilities
payable under the documentation governing any Debt.
"Old Credit Facility" means the revolving credit and term loan
facility to which Insilco and certain of its Subsidiaries were parties that
was replaced by, and repaid in full by advances under, the Credit Facility.
"payment in full," together with any correlative term such as
"paid in full" and "pay in full," means with respect to any Obligation payment
in full thereof in cash.
"Permitted Interest Rate, Currency or Commodity Price
Agreement" of any Person means any Interest Rate, Currency or Commodity Price
Agreement entered into with one or more financial institutions that is
designed to protect such Person against fluctuations in interest rates or
currency exchange rates with respect to Debt Incurred or, in the case of
currency or commodity protection agreements, against currency exchange rate or
commodity price fluctuations relating to then existing financial obligations
or then existing or sold production and, in any case, not for purposes of
speculation.
"Permitted Investment" means
(1) Investments in Insilco or any Person that is, or as a
consequence of such Investment becomes, a Restricted Subsidiary,
(2) securities either issued directly or fully guaranteed or
insured by the government of the United States of America or any agency or
instrumentality thereof having maturities of not more than one year,
(3) time deposits and certificates of deposit, demand deposits
and banker's acceptances having maturities of not more than one year
from the date of deposit, of any domestic commercial bank having
capital and surplus in excess of $500 million and having a peer group
rating of B or better (or the equivalent thereof) by Thompson
BankWatch, Inc. or outstanding long-term debt rated BBB or better (or
the equivalent thereof) by Standard & Poor's Ratings Group or Baa2 or
better (or the equivalent thereof) by Moody's Investors Service, Inc.,
(4) demand deposits made in the ordinary course of business and
consistent with Insilco's customary cash management policy in any
domestic office of any commercial bank organized under the laws of the
United States of America or any state thereof,
(5) insured deposits issued by commercial banks of the type
described in clause (4) above,
(6) mutual funds whose investment guidelines restrict such
funds' investments primarily to those satisfying the provisions of any
of clauses (2), (3), (7) and (8) of this definition,
(7) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (2)
and (3) above entered into with any bank meeting the qualifications
specified in clause (3) above,
(8) commercial paper (other than commercial paper issued by
an Affiliate or Related Person) rated A-1 or the equivalent thereof by
Standard & Poor's Ratings Group or P-1 or the equivalent thereof by
Moody's Investors Service, Inc., and in each case maturing within 360
days,
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(9) receivables owing to Insilco or a Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms,
(10) any Investment consisting of loans and advances to employees
of Insilco or any Restricted Subsidiary for travel, entertainment,
relocation, employee incentive plans or other expenses in the ordinary
course of business,
(11) any Investment consisting of a Permitted Interest Rate,
Currency or Commodity Price Agreement,
(12) any Investment acquired by Insilco or any of its Restricted
Subsidiaries
(A) in exchange for any other Investment or accounts
receivable held by Insilco or any such Restricted Subsidiary in
connection with or as a result of a bankruptcy, workout,
reorganization or recapitalization of the issuer of such other
Investment or the obligor with respect to such accounts
receivable or
(B) as a result of a foreclosure by Insilco or any of its
Restricted Subsidiaries with respect to any secured Investment or
other transfer of title with respect to any secured Investment in
default,
(13) any Investment that constitutes part of the consideration
from an Asset Disposition made pursuant to, and in compliance with, the
covenant described above under "Repurchase at the Option of Holders--
Asset Dispositions,"
(14) Investments the payment for which consists exclusively of
Capital Stock (exclusive of Redeemable Interests) of Insilco and
(15) Investments existing as of the date of the indenture of
Insilco or any Subsidiary of Insilco.
"Post-Petition Interest" means all interest accrued or accruing
after the commencement of any Insolvency Proceeding (and interest that would
accrue but for the commencement of any Insolvency Proceeding) in accordance
with and at the contract rate (including, without limitation, any rate
applicable upon default) specified in the agreement or instrument creating,
evidencing or governing any Senior Indebtedness, whether or not, pursuant to
applicable law or otherwise, the claim for such interest is allowed as a claim
in such Insolvency Proceeding.
"Preferred Stock" of any Person means Capital Stock of such
Person of any class or classes (however designated) that ranks prior, as to
the payment of dividends or as to the distribution of assets upon any
voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"Principals" means DLJMB and/or CVC.
"Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of
money.
"Receivables Sale" of any Person means any sale of Receivables
of such Person (pursuant to a purchase facility or otherwise), other than in
connection with a disposition of the business operations of such Person
relating thereto or a disposition of defaulted Receivables for purpose of
collection and not as a financing arrangement.
"Redeemable Interest" of any Person means any equity security
of or other ownership interest in such Person that by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable) or otherwise (including upon the occurrence of an event) matures
or is required to be redeemed (pursuant to any sinking fund obligation or
otherwise) or is convertible into or exchangeable for Debt or is redeemable at
the option of the holder thereof, in whole or in part, at any time prior to
the final Stated Maturity of the Notes.
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"Related Party" means, with respect to any Principal,
(1) any controlling stockholder or partner of such Principal on
the date of the indenture, or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding (directly or through one or more Subsidiaries) a 51% or more
controlling interest of which consist of the Principals and/or such
other Persons referred to in the immediately preceding clauses (1) or
(2).
"Related Person" of any Person means any other Person directly
or indirectly owning
(1) 5% or more of the outstanding Common Stock of such Person
(or, in the case of a Person that is not a corporation, 5% or more of the
equity interest in such Person) or
(2) 5% or more of the combined voting power of the Voting Stock
of such Person.
"Restricted Subsidiary" means
(1) at any date, a Subsidiary of Insilco that is not an
Unrestricted Subsidiary as of such date and
(2) for any period, a Subsidiary of Insilco that for any
portion of such period is not an Unrestricted Subsidiary, provided
that such term shall mean such Subsidiary only for such portion of
such period.
"Senior Indebtedness" means with respect to any Person
(1) all Debt and other Obligations owing in respect of the
Credit Facility (including, without limitation, all loans, letters of
credit and other extensions of credit thereunder and all expenses,
fees, reimbursements, indemnities and other amounts owing pursuant
thereto),
(2) all Debt referred to in clauses (1), (2), (3), (5), (7) or
(8) of the definition of Debt, whether Incurred on or prior to the
date of the indenture or thereafter Incurred, and
(3) amendments, modifications, renewals, extensions,
refinancings and refundings of any such Debt; provided, however, the
following shall not constitute Senior Indebtedness:
(a) any Debt owed to a Person when such Person is a
Subsidiary of Insilco,
(b) any Debt which by the terms of the instrument creating
or evidencing the same is pari passu with or subordinate in right of
payment to the notes,
(c) any Debt Incurred in violation of the indenture or
(d) any Debt which is subordinate in right of payment in
any respect to any other Debt of such Person. For purposes of this
definition, "Debt" includes any obligation to pay principal, premium
(if any), interest, penalties, reimbursement or indemnity amounts,
fees and expenses (including Post-Petition Interest). To the extent
any payment of Senior Indebtedness (whether by or on behalf of
Insilco, as proceeds of security or enforcement or any right of
setoff or otherwise) is declared to be fraudulent or preferential,
set aside or required to be paid to a trustee, receiver or other
similar party under any bankruptcy, insolvency, receivership or
similar law, then if such payment is recovered by, or paid over to,
such trustee, receiver or other similar party, the Senior
Indebtedness or part thereof originally intended to be satisfied
shall be deemed to be reinstated and outstanding as if such payment
had
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not occurred. All Senior Indebtedness shall be and remain Senior
Indebtedness for all purposes of the indenture, whether or not
subordinated in any Insolvency Proceeding.
"Subordinated Indebtedness" means Debt of Insilco as to which
the payment of principal of (and premium, if any) and interest and other
payment obligations in respect of such Debt shall be subordinate to the prior
payment in full of the notes to at least the following extent:
(1) no payments of principal of (or premium, if any) or
interest on or otherwise due in respect of such Debt may be permitted
for so long as any default in the payment of principal (or premium, if
any) or interest on the notes exists;
(2) in the event that any other default exists with respect to
the notes that with the passing of time or the giving of notice, or
both, would constitute an event of default, upon notice by Holders of
25% or more in principal amount of the notes to the Trustee, the
Trustee shall have the right to give notice to Insilco and the holders
of such Debt (or trustees or agents therefor) of a payment blockage,
and thereafter no payments of principal of (or premium, if any) or
interest on or otherwise due in respect of such Debt may be made for a
period of 179 days from the date of such notice; and
(3) such Debt may not
(x) provide for payments of principal of such Debt at
the stated maturity thereof or by way of a sinking fund
applicable thereto or by way of any mandatory redemption,
defeasance, retirement or repurchase thereof by Insilco
(including any redemption, retirement or repurchase which is
contingent upon events or circumstances, but excluding any
retirement required by virtue of acceleration of such Debt upon
an event of default thereunder), in each case prior to the final
Stated Maturity of the notes or
(y) permit redemption or other retirement (including
pursuant to an offer to purchase made by Insilco) of such other
Debt at the option of the holder thereof prior to the final
Stated Maturity of the notes, other than a redemption or other
retirement at the option of the holder of such Debt (including
pursuant to an offer to purchase made by Insilco) which is
conditioned upon a change of control of Insilco pursuant to
provisions substantially similar to those described under "Change
of Control" (and which shall provide that such Debt will not be
repurchased pursuant to such provisions prior to Insilco's
repurchase of the notes required to be repurchased by Insilco
pursuant to the provisions described under "Change of Control").
"Subordinated Securities" mean securities distributed to the
holders of the notes
(1) in an Insolvency Proceeding, pursuant to a plan of
reorganization consented to by each class of Senior Indebtedness or
(2) outside an Insolvency Proceeding, but only if, in each
case, all of the terms and conditions of such securities (including,
without limitation, term, tenor, interest, amortization,
subordination, covenants and defaults) are in all material respects at
least as favorable (and provide the same relative benefits) to the
holders of Senior Indebtedness and, in the case of an Insolvency
Proceeding, to the holders of any security distributed in such
Insolvency Proceeding on account of Senior Indebtedness as the terms
and conditions of the notes and the indenture are and provide to the
holders of Senior Indebtedness.
"Subsidiary" of any Person means
(1) a corporation more than 50% of the combined voting power of
the outstanding Voting Stock of which is owned, directly or
indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or
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(2) any other Person (other than a corporation) in which such
Person or one or more other Subsidiaries of such Person or such Person
and one or more other Subsidiaries thereof, directly or indirectly,
has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"Tender Offer" means Insilco's offer to purchase, commenced
July 11, 1997 up to 2,857,142 Shares at a price of $38.50 per share.
"Transactions" means
(1) the Tender Offer,
(2) the repurchase by Insilco of Shares from Robert L. Smialek
at $38.50 per Share pursuant to a negotiated share purchase agreement
entered into in July 1997,
(3) the repurchase by Insilco of Shares from Water Street at
$38.50 per Share pursuant to a negotiated share purchase agreement
entered into in July 1997,
(4) the entering into by Insilco of the Credit Facility and
(5) the offering of the 10(1)/(4)% notes.
"Unrestricted Subsidiary" means
(1) at any date, a Subsidiary of Insilco that is an
Unrestricted Subsidiary in accordance with the provisions of the
indenture described under the caption "Certain Covenants--Unrestricted
Subsidiaries" and
(2) for any period, a Subsidiary of Insilco that for any
portion of such period is an Unrestricted Subsidiary in accordance
with the provisions of the indenture as described under the caption
"Certain Covenants--Unrestricted Subsidiaries," provided that such
term shall mean such Subsidiary only for such portion of such period.
"Voting Stock" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly Owned Restricted Subsidiary" means a Restricted
Subsidiary all of the outstanding Capital Stock or other ownership interests
of which (other than directors' qualifying shares) shall at the time be owned
by Insilco or by one or more Wholly Owned Restricted Subsidiaries or by
Insilco and one or more Wholly Owned Restricted Subsidiaries.
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THE EXCHANGE OFFER
Pursuant to a Registration Rights Agreement between Insilco and
the Initial Purchaser (the "Registration Rights Agreement"), we agreed
(1) to file a registration statement (the "Exchange Offer
Registration Statement") on or prior to 120 days after the closing of
the offering of the Old Notes (the "Closing") with respect to an offer
to exchange (the "Exchange Offer") the Old Notes for a new issue of
debt securities of Insilco (the "New Notes") registered under the
Securities Act, with terms substantially identical to those of the Old
Notes and
(2) to use our reasonable best efforts to cause the Exchange
Offer Registration Statement to be declared effective by the
Securities and Exchange Commission (the "SEC") on or prior to 150 days
after the Closing. In certain circumstances, we will be required to
provide a shelf registration statement (the "Shelf Registration
Statement") to cover resales of the Old Notes by the holders thereof.
The Old Notes provide that, in the event we fail to satisfy our
registration obligations under the Registration Rights Agreement, we
will be required to pay Liquidated Damages to the holders of the Old
Notes under certain circumstances. Upon consummation of the Exchange
Offer or the effectiveness of such Shelf Registration Statement, the
provision for Liquidated Damages on the Old Notes shall cease.
The Exchange Offer is not being made to, nor will we accept
tenders for exchange from, holders of Old Notes in any jurisdiction in which
the Exchange Offer or the acceptance thereof would not be in compliance with
the securities or blue sky laws of such jurisdiction.
Terms of the Exchange Offer; Period for Tendering Old Notes
Upon the terms and subject to the conditions set forth in this
prospectus and in the accompanying Letter of Transmittal (which together
constitute the Exchange Offer), Insilco will accept for exchange Old Notes
which are properly tendered on or prior to the Expiration Date and not
withdrawn as permitted below. For each $1,000 principal amount of Old Notes
surrendered to Holdings pursuant to the Exchange Offer, the holder of such Old
Note will receive an exchange note having a principal amount equal to that of
the surrendered old note. Holdings will keep the Exchange Offer open for not
less than 20 business days (or longer if required by applicable law) after the
date notice of the Exchange Offer is mailed to the holders of the Old Notes.
As used herein, the term "Expiration Date" means 5:00 p.m., New York City
time, on [ ], 1999; provided, however, that if we, in our sole
discretion, has extended the period of time for which the Exchange Offer is
open, the term "Expiration Date" means the latest time and date to which the
Exchange Offer is extended.
As of the date of this prospectus, $120,000,000 in aggregate
principal amount of the Old Notes were outstanding. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Notes being tendered. This
prospectus, together with the Letter of Transmittal, is first being sent on or
about the date set forth on the cover page to all Holders of Old Notes at the
addresses set forth in the security register with respect to Old Notes
maintained by the Trustee. Our obligations to accept Old Notes for exchange
pursuant to the Exchange Offer is subject to certain conditions as set forth
under "Certain Conditions to the Exchange Offer" below.
We expressly reserve the right, at any time or from time to
time, to extend the period of time during which the Exchange Offer is open,
and thereby delay acceptance of any Old Notes, by giving oral or written
notice of such extension to the Exchange Agent and notice of such extension to
the Holders as described below. During any such extension, all Old Notes
previously tendered will remain subject to the Exchange Offer and may be
accepted for exchange by us. Any Old Notes not accepted for exchange for any
reason will be returned without expense to the tendering Holder thereof as
promptly as practicable after the expiration or termination of the Exchange
Offer.
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We expressly reserve the right to amend or terminate the
Exchange Offer, and not to accept for exchange any Old Notes not theretofore
accepted for exchange, upon the occurrence of any of the conditions of the
Exchange Offer specified below under "Certain Conditions to the Exchange
Offer." We will give oral or written notice of any extension, amendment,
non-acceptance or termination to the Holders of the Old Notes as promptly as
practicable, such notice in the case of any extension to be issued by means of
a press release or other public announcement no later than 9:00 a.m., New York
City Time, on the next business day after the previously scheduled Expiration
Date. Without limiting the manner in which we may choose to make any public
announcement and subject to applicable law, Holdings shall have no obligation
to publish, advertise or otherwise communicate any such public announcement
other than by issuing a release to the Dow Jones News Service.
Holders of Old Notes do not have any appraisal or dissenters'
rights in connection with the Exchange Offer. Old Notes which are not
tendered for exchange or are tendered but not accepted in connection with the
Exchange Offer will remain outstanding and be entitled to the benefits of the
indenture, but will not be entitled to any further registration rights under
the Registration Rights Agreement. We intend to conduct the Exchange Offer in
accordance with the applicable requirements of the Exchange Act and the rules
and regulations of the SEC thereunder.
Procedures for Tendering Old Notes
The tender to us of Old Notes by a Holder thereof as set forth
below and the acceptance thereof by us will constitute a binding agreement
between the tendering Holder and us upon the terms and subject to the
conditions set forth in this prospectus and in the accompanying Letter of
Transmittal. Except as set forth below, a Holder who wishes to tender Old
Notes for exchange pursuant to the Exchange Offer must transmit a properly
completed and duly executed Letter of Transmittal, including all other
documents required by such Letter of Transmittal, to Star Bank, N.A. (the
"Exchange Agent") at the address set forth below under "Exchange Agent" on or
prior to the Expiration Date. In addition,
(1) certificates for such Old Notes must be received by the
Exchange Agent along with the Letter of Transmittal,
(2) a timely confirmation of a book-entry transfer (a "Book-
Entry Confirmation") of such Old Notes, if such procedure is
available, into the Exchange Agent's account at DTC pursuant to the
procedure for book-entry transfer described below, must be received by
(3) the Holder must comply with the guaranteed delivery
procedures described below.
The method of delivery of Old Notes, letters of transmittal and
all other required documents is at the election and risk of the holders. If
such delivery is by mail, it is recommended that registered mail, properly
insured, with return receipt requested, be used. In all cases, sufficient
time should be allowed to assure timely delivery. No letters of transmittal
or Old Notes should be sent to Insilco.
Signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, must be guaranteed unless the Old Notes
surrendered for exchange pursuant thereto are tendered
(1) by a registered Holder of the Old Notes who has not
completed the box entitled "Special Issuance Instructions" or "Special
Delivery Instructions" on the Letter of Transmittal or
(2) for the account of an Eligible Institution (as defined
below).
In the event that signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, such guarantees
must be by a firm which is a member of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.
or by a commercial bank or trust company having an
98
<PAGE>
office or correspondent in the United States (collectively, "Eligible
Institutions"). If Old Notes are registered in the name of a person other
than the person signing the Letter of Transmittal, the Old Notes
surrendered for exchange must be endorsed by, or be accompanied by a
written instrument or instruments of transfer or exchange, in satisfactory
form as determined by us in our sole discretion, duly executed by the
registered Holder with the signature thereon guaranteed by an Eligible
Institution.
All questions as to the validity, form, eligibility (including
time of receipt) and acceptance of Old Notes tendered for exchange will be
determined by Insilco in its sole discretion, which determination shall be
final and binding. We reserve the absolute right to reject any and all
tenders of any particular Old Notes not properly tendered or to not accept any
particular Old Notes which acceptance might, in our judgment or the judgment
of our counsel, be unlawful. We also reserve the absolute right to waive any
defects or irregularities or conditions of the Exchange Offer as to any
particular Old Notes either before or after the Expiration Date (including the
right to waive the ineligibility of any Holder who seeks to tender Old Notes
in the Exchange Offer). Our interpretation of the terms and conditions of the
Exchange Offer as to any particular Old Notes either before or after the
Expiration Date (including the Letter of Transmittal and the instructions
thereto) shall be final and binding on all parties. Unless waived, any
defects or irregularities in connection with the tender of Old Notes for
exchange must be cured within such reasonable period of time as we shall
determine. Neither Insilco, the Exchange Agent nor any other person shall be
under any duty to give notification of any defect or irregularity with respect
to any tender of Old Notes for exchange, nor shall any of them incur any
liability for failure to give such notification.
If the Letter of Transmittal is signed by a person or persons
other than the registered Holder or Holders of Old Notes, such Old Notes must
be endorsed or accompanied by appropriate powers of attorney, in either case
signed exactly as the name or names of the registered Holder or Holders that
appear on the Old Notes.
If the Letter of Transmittal or any Old Notes or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers or corporations or others acting in a fiduciary or
representative capacity, such person should so indicate when signing and,
unless waived by Holdings, proper evidence satisfactory to Holdings of its
authority to so act must be submitted.
By executing, or otherwise becoming bound by, the Letter of
Transmittal, each holder of the Old Notes (other than certain specified
holders) will represent that
(1) it is not our affiliate,
(2) any New Notes to be received by it were acquired in the
ordinary course of its business and
(3) it has no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of the New Notes.
If the tendering Holder is a broker-dealer that will receive New Notes for its
owns account in exchange for Old Notes that were acquired as a result of
market-making activities or other trading activities, it will be required to
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. See "--Resales of the New Notes."
Acceptance of Old Notes for Exchange; Delivery of New Notes
Upon satisfaction or waiver of all of the conditions to the
Exchange Offer, we will accept, promptly after the Expiration Date, all Old
Notes properly tendered and will issue the New Notes promptly after acceptance
of the Old Notes. See "Certain Conditions to the Exchange Offer" below. For
purposes of the Exchange Offer, we shall be deemed to have accepted properly
tendered Old Notes for exchange when, as and if we have given oral or written
notice thereof to the Exchange Agent.
99
<PAGE>
In all cases, issuance of New Notes for Old Notes that are
accepted for exchange pursuant to the Exchange Offer will be made only after
timely receipt by the Exchange Agent of certificates for such Old Notes or a
timely Book-Entry Confirmation of such Old Notes into the Exchange Agent's
account at DTC pursuant to the book-entry transfer procedures described below,
a properly completed and duly executed Letter of Transmittal and all other
required documents. If any tendered Old Notes are not accepted for any reason
set forth in the terms and conditions of the Exchange Offer or if certificates
representing Old Notes are submitted for a greater principal amount than the
Holder desires to exchange, such unaccepted or non-exchanged Old Notes will be
returned without expense to the tendering Holder thereof (or, in the case of
Old Notes tendered by book-entry transfer into the Exchange Agent's account at
DTC pursuant to the book-entry transfer procedures described below, such
non-exchanged Old Notes will be credited to an account maintained with DTC) as
promptly as practicable after the expiration or termination of the Exchange
Offer.
Book-Entry Transfer
The Exchange Agent will make a request to establish an account
with respect to the Old Notes at DTC for purposes of the Exchange Offer
promptly after the date of this prospectus. Any financial institution that is
a participant in DTC's systems may make book-entry delivery of Old Notes by
causing DTC to transfer such Old Notes into the Exchange Agent's account in
accordance with DTC's Automated Tender Offer Program ("ATOP") procedures for
transfer. However, the exchange for the Old Notes so tendered will only be
made after timely confirmation of such book-entry transfer of Old Notes into
the Exchange Agent's account, and timely receipt by the Exchange Agent of an
Agent's Message (as such term is defined in the next sentence) and any other
documents required by the Letter of Transmittal. The term "Agent's Message"
means a message, transmitted by DTC and received by the Exchange Agent and
forming a part of a Book-Entry Confirmation, which states that DTC has
received an express acknowledgment from a Participant tendering Old Notes that
are the subject of such Book-Entry Confirmation that such Participant has
received and agrees to be bound by the terms of the Letter of Transmittal, and
that we may enforce such agreement against such Participant. Although
delivery of Old Notes may be effected through book-entry transfer into the
Exchange Agent's account at DTC, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees and any other required documents, must in any case be delivered to
and received by the Exchange Agent at its address set forth under "--Exchange
Agent" on or prior to the Expiration Date, or the guaranteed delivery
procedure set forth below must be complied with.
Delivery of documents to DTC in accordance with its procedures
does not constitute delivery to the Exchange Agent.
Guaranteed Delivery Procedures
If a registered Holder of the Old Notes desires to tender such
Old Notes and the Old Notes are not immediately available, or time will not
permit such Holder's Old Notes or other required documents to reach the
Exchange Agent before the Expiration Date, or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if
(1) the tender is made through an Eligible Institution,
(2) prior to the Expiration Date, the Exchange Agent receives
from such Eligible Institution a properly completed and duly executed
Letter of Transmittal (or a facsimile thereof) and Notice of
Guaranteed Delivery, substantially in the form provided by us (by
telegram, telex, facsimile transmission, mail or hand delivery),
setting forth the name and address of the Holder of Old Notes and the
amount of Old Notes tendered, stating that the tender is being made
thereby and guaranteeing that within five New York Stock Exchange
("NYSE") trading days after the date of execution of the Notice of
Guaranteed Delivery, the certificates of all physically tendered Old
Notes, in proper form for transfer, or a Book-Entry Confirmation, as
the case may be, and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution with the
Exchange Agent, and
100
<PAGE>
(3) the certificates for all physically tendered Old
Notes, in proper form for transfer, or a Book-Entry Confirmation, as
the case may be, and all other documents required by the Letter of
Transmittal, are received by the Exchange Agent within five NYSE
trading days after the date of execution of the Notice of Guaranteed
Delivery.
Withdrawal Rights
Tenders of Old Notes may be withdrawn at any time prior to the
Expiration Date.
For a withdrawal to be effective, a written notice of
withdrawal must be received by the Exchange Agent at one of the addresses set
forth below under "Exchange Agent." Any such notice of withdrawal must
specify the name of the person having tendered the Old Notes to be withdrawn,
identify the Old Notes to be withdrawn (including the principal amount of such
Old Notes), and (where certificates for Old Notes have been transmitted)
specify the name in which such Old Notes are registered, if different from
that of the withdrawing Holder. If certificates for Old Notes have been
delivered or otherwise identified to the Exchange Agent, then, prior to the
release of such certificates, the withdrawing Holder must also submit the
serial numbers of the particular certificates to be withdrawn and a signed
notice of withdrawal with signatures guaranteed by an Eligible Institution
unless such Holder is an Eligible Institution. If Old Notes have been tendered
pursuant to the procedure for book-entry transfer described above, any note of
withdrawal must specify the name and number of the account at DTC to be
credited with the withdrawn Old Notes and otherwise comply with the procedures
of such facility. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by us, and our
determination shall be final and binding on all parties. Any Old Notes so
withdrawn will be deemed not to have been validly tendered for exchange for
purposes of the Exchange Offer. Any Old Notes which have been tendered for
exchange but which are not exchanged for any reason will be returned to the
Holder thereof without cost to such Holder (or, in the case of Old Notes
tendered by book-entry transfer into the Exchange Agent's account at DTC
pursuant to the book-entry transfer procedures described above, such Old Notes
will be credited to an account maintained with DTC for the Old Notes) as soon
as practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be re-entered by following
one of the procedures described under "Procedures for Tendering Old Notes"
above at any time on or prior to the Expiration Date.
Certain Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, we
shall not be required to accept for exchange, or to issue New Notes in
exchange for, any Old Notes and may terminate or amend the Exchange Offer, if
at any time before the acceptance of such Old Notes for exchange or the
exchange of the New Notes for such Old Notes, such acceptance or issuance
would violate applicable law or any interpretation of the staff of the SEC.
The foregoing condition is for our sole benefit and may be
asserted by us regardless of the circumstances giving rise to such condition.
Our failure at any time to exercise the foregoing rights shall not be deemed a
waiver of any such right and each such right shall be deemed an ongoing right
which may be asserted at any time and from time to time.
In addition, we will not accept for exchange any Old Notes
tendered, and no New Notes will be issued in exchange for any such Old Notes,
if at such time any stop order shall be threatened or in effect with respect
to the Registration Statement of which this prospectus constitutes a part or
the qualification of the indenture under the Trust Indenture Act.
Exchange Agent
Star Bank, N.A. has been appointed as the Exchange Agent for
the Exchange Offer. All executed Letters of Transmittal should be directed to
the Exchange Agent at one of the addresses set forth below. Questions and
requests for assistance, requests for additional copies of this prospectus or
of the Letter of Transmittal and requests for Notices of Guaranteed Delivery
should be directed to the Exchange Agent, addressed as follows:
101
<PAGE>
Deliver To:
Star Bank, N.A., Exchange Agent
By Mail or By Hand:
Attn: Corporate Finance Trust Services
425 Walnut Street
6th Floor
Cincinnati, Ohio 45201-1118
Attention: William Sicking
By Facsimile:
(513) 632-5511
Confirm by Telephone:
(513) 632-4278
Delivery to an address other than as set forth above or
transmission of instructions via facsimile other than as set forth above does
not constitute a valid delivery.
Fees and Expenses
The principal solicitation is being made by mail; however,
additional solicitation may be made by telegraph, telephone or in person by
our officers, regular employees and affiliates. We will not pay any
additional compensation to any such officers and employees who engage in
soliciting tenders. We will not make any payment to brokers, dealers, or
others soliciting acceptances of the Exchange Offer. However, we will pay the
Exchange Agent reasonable and customary fees for its services and will
reimburse it for its reasonable out-of-pocket expenses in connection therewith.
The estimated cash expenses to be incurred in connection with
the Exchange Offer will be paid by us and are estimated in the aggregate to be
$ .
Transfer Taxes
Holders who tender their Old Notes for exchange will not be
obligated to pay any transfer taxes in connection therewith, except that
Holders who instruct us to register New Notes in the name of, or request that
Old Notes not tendered or not accepted in the Exchange Offer to be returned
to, a person other than the registered tendering Holder will be responsible
for the payment of any applicable transfer tax thereon.
Resale of the New Notes
Under existing interpretations of the staff of the SEC
contained in several no-action letters to third parties, the New Notes would
in general be freely transferable after the Exchange Offer without further
registration under the Securities Act. However, any purchaser of Old Notes who
is an "affiliate" of Insilco or who intends to participate in the Exchange
Offer for the purpose of distributing the New Notes
(1) will not be able to rely on the interpretation of the staff
of the SEC,
(2) will not be able to tender its Old Notes in the Exchange
Offer and
102
<PAGE>
(3) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any sale or
transfer of the notes unless such sale or transfer is made pursuant to
an exemption from such requirements.
By executing, or otherwise becoming bound by, the Letter of
Transmittal each holder of the Old Notes (other than certain specified
holders) will represent that:
(1) it is not our "affiliate";
(2) any New Notes to be received by it were acquired in the
ordinary course of its business; and
(3) it has no arrangement with any person to participate in the
distribution (within the meaning of the Securities Act) of the New Notes.
In addition, in connection with any resales of New Notes, any Participating
Broker-Dealer who acquired notes for its own account as a result of market-
making or other trading activities must deliver a prospectus meeting the
requirements of the Securities Act. The SEC has taken the position that
Participating Broker-Dealers may fulfill their prospectus delivery
requirements with respect to the New Notes (other than a resale of an
unsold allotment from the original sale of the Old Notes) with the
prospectus contained in the Exchange Offer Registration Statement. Under
the Registration Rights Agreement, we are required to allow Participating
Broker-Dealers and other persons, if any, subject to similar prospectus
delivery requirements to use this prospectus as it may be amended or
supplemented from time to time, in connection with the resale of such New
Notes.
103
<PAGE>
CERTAIN UNITED STATES TAX CONSEQUENCES OF THE EXCHANGE OFFER
The exchange of Old Notes for New Notes pursuant to the
Exchange Offer will not result in any United States federal income tax
consequences to holders. When a holder exchanges an Old Note for an exchange
note pursuant to the Exchange Offer, the holder will have the same adjusted
basis and holding period in the exchange note as in the old note immediately
before the Exchange.
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer pursuant to the Exchange Offer
must acknowledge that it will deliver a prospectus in connection with any
resale of such New Notes. This prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer
in connection with resales of New Notes received in exchange for Old Notes
where such Old Notes were acquired as a result of market-making activities or
other trading activities. We have agreed that we will make this prospectus,
as amended or supplemented, available to any Participating Broker-Dealer for
use in connection with any such resale and Participating Broker-Dealers shall
be authorized to deliver this prospectus for a period not exceeding 90 days
after the Expiration Date.
We will not receive any proceeds from any sales of the New
Notes by Participating Broker-Dealers. New Notes received by Participating
Brokers-Dealers for their own account pursuant to the Exchange Offer may be
sold from time to time, in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the New
Notes or a combination of such methods of resale, at market prices prevailing
at the time of resale, at prices related to such prevailing market prices or
at negotiated prices. Any such resale may be made directly to purchasers or
to or through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such Participating Broker-Dealer that
resells the New Notes that were received by it for its own account pursuant to
the Exchange Offer. Any broker or dealer that participates in a distribution
of such New Notes may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of New Notes and any
omissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a Participating Broker-Dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
We will promptly send additional copies of this prospectus and
any amendment or supplement to this prospectus to any Participating
Broker-Dealer that requests such documents in the Letter of Transmittal. See
"The Exchange Offer."
LEGAL MATTERS
The validity of the notes offered hereby will be passed upon
for Insilco by Davis Polk & Wardwell, New York, New York and the validity of
the guarantees will be passed upon for the guarantors by Kenneth H. Koch, Vice
President, General Counsel and Secretary of Insilco.
EXPERTS
The financial statements of Insilco as of December 31, 1998 and
1997, and for each of the years in the three-year period ended December 31,
1998, have been included herein and in the registration statement in reliance
upon the report of KPMG LLP, independent certified public accountants,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.
104
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Index to Consolidated Financial Statements
<TABLE>
<S> <C>
Page
----
Independent Auditors' Report........................................... F-2
Consolidated Balance Sheets for the Years Ended December 31, 1998 and
December 31, 1997 ..................................................... F-3
Consolidated Statements of Operations for the Years Ended Years Ended
December 31, 1998, December 31, 1997 and December 31, 1996 ............ F-4
Consolidated Statement of Stockholder's Equity (Deficit) for the Years
Ended December 31, 1998, December 31, 1997 and December 31, 1996....... F-5
Consolidated Statements of Cash Flows for the Years Ended December
31, 1998, December 31, 1997 and December 31, 1996...................... F-6
Notes to Consolidated Financial Statements............................. F-7
</TABLE>
F-1
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholder
Insilco Corporation:
We have audited the consolidated financial statements of
Insilco Corporation and subsidiaries as listed in the accompanying index.
These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and the financial statement schedule based
on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of
Insilco Corporation and subsidiaries as of December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1998, in conformity with generally
accepted accounting principles.
KPMG LLP
Columbus, Ohio
February 10, 1999, except as
to the first paragraph
of Note 7, which is as
of March 26, 1999
F-2
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997
(In thousands, except share data)
<TABLE>
1998 1997
---------- ----------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents.......................................................... $ 7,430 $ 10,651
Trade receivables, net............................................................. 74,969 67,209
Other receivables.................................................................. 4,337 3,477
Receivables from related party..................................................... 4,882 --
Inventories, net................................................................... 64,565 60,718
Deferred taxes..................................................................... 6,143 277
Prepaid expenses and other current assets.......................................... 4,387 2,716
---------- ----------
Total current assets............................................................. 166,713 145,048
Property, plant and equipment, net................................................... 114,756 113,971
Deferred taxes....................................................................... 1,517 1,054
Other assets and deferred charges.................................................... 40,040 42,600
---------- ----------
Total assets..................................................................... $ 323,026 $ 302,673
========== ==========
Liabilities and Stockholder's Equity (Deficit)
Current liabilities:
Current portion of long-term debt.................................................. $ 1,265 $ 1,684
Accounts payable................................................................... 34,513 39,757
Customer deposits.................................................................. 24,981 20,346
Accrued expenses and other......................................................... 38,712 43,753
---------- ----------
Total current liabilities........................................................ 99,471 105,540
Long-term debt, excluding current portion............................................ 311,144 256,059
Other long-term obligations, excluding current portion............................... 46,329 43,402
Loan due Insilco Holding Co.......................................................... 2,991 --
---------- ----------
Total liabilities................................................................ 459,935 405,001
---------- ----------
Stockholder's equity (deficit):
Common stock, $.001 par value; 1,000 shares authorized; 100 shares issued
and outstanding, 15,000,000 shares authorized in 1997, 4,548,373 shares
issued and 4,080,693 shares outstanding.......................................... -- 5
Treasury stock, at cost............................................................ -- (16,268)
Additional paid-in capital......................................................... 3,925 --
Accumulated deficit................................................................ (135,736) (82,756)
Accumulated other comprehensive income............................................. (5,098) (3,309)
---------- ----------
Total stockholder's equity (deficit)............................................. (136,909) (102,328)
---------- ----------
Commitments and contingencies (7See Notes 10, 13 and 17)
Total liabilities and stockholder's equity (deficit)............................. $ 323,026 $ 302,673
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
Years Ended December 31, 1998, 1997 and 1996
(In thousands)
<TABLE>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Sales............................................................ $ 535,629 $ 528,233 $ 492,405
Cost of products sold............................................ 383,269 370,845 344,912
Depreciation and amortization.................................... 20,159 18,377 15,357
Selling, general and administrative expenses..................... 91,488 87,909 82,203
Merger expenses.................................................. 20,890 -- --
Severance and write-downs........................................ 2,542 -- 1,500
---------- ---------- ----------
Operating income............................................. 17,281 51,102 48,433
---------- ---------- ----------
Other income (expense):
Interest expense............................................... (29,198) (20,562) (18,378)
Interest income................................................ 979 2,837 724
Equity in net income of Thermalex.............................. 2,850 2,647 2,922
Other income, net.............................................. 3,027 794 4,784
---------- ---------- ----------
Total other expense.......................................... (22,342) (14,284) (9,948)
---------- ---------- ----------
Income (loss) from continuing operations before income
taxes and extraordinary item............................... (5,061) 36,818 38,485
Income tax benefit (expense)..................................... 868 (13,404) (13,272)
---------- ---------- ----------
Income (loss) from continuing operations before
extraordinary item......................................... (4,193) 23,414 25,213
Discontinued operations, net of tax:
Income from operations......................................... -- 1,170 8,741
Gain on disposal............................................... -- 57,788 5,099
---------- ---------- ----------
Income from discontinued operations.......................... -- 58,958 13,840
---------- ---------- ----------
Income (loss) before extraordinary item...................... (4,193) 82,372 39,053
Extraordinary items, net of tax.................................. (5,888) (728) --
---------- ---------- ----------
Net income (loss)............................................ $ (10,081) $ 81,644 $ 39,053
========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Consolidated Statement of Stockholder's Equity (Deficit)
For the Years Ended December 31, 1998, 1997 and 1996
(In thousands)
<TABLE>
Accumulated
Common Additional Other Total
Stock Par Treasury Paid-in Accumulated Comprehensive Stockholder's
Value $.001 Stock Capital Deficit Income Equity (Deficit)
----------- ---------- ----------- ------------ ------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1995.................. $ 10 $ (6,813) $ 67,192 $ (76,168) -- $ (15,779)
Comprehensive income:
Net income................................ -- -- -- 39,053 -- 39,053
Other comprehensive income:
Foreign currency translation
adjustment............................ -- -- -- -- (244) (244)
Total comprehensive income.................. -- -- -- -- -- 38,809
Tax benefit from reduction of valuation
allowance for deferred tax assets......... -- -- 10,237 -- -- 10,237
Purchase of treasury stock.................. -- (3,932) -- -- (3,932)
Restricted stock............................ -- -- 3,300 -- -- 3,300
Issuance of shares upon exercise of stock
options................................... -- -- 1,071 -- -- 1,071
Reserved shares............................. -- -- (706) -- -- (706)
Tax benefit from exercise of stock options -- -- 402 -- -- 402
---------- ---------- ---------- ---------- ---------- -----------
Balance at December 31, 1996.................. 10 (10,745) 81,496 (37,115) (244) 33,402
Comprehensive income:
Net income................................ -- -- -- 81,644 -- 81,644
Other comprehensive income:
Foreign currency translation
adjustment.............................. -- -- -- -- (3,065) (3,065)
Total comprehensive income.................. -- -- -- -- -- 78,579
Repurchase of shares........................ (5) -- (92,710) (127,285) -- (220,000)
Costs of Tender Offer....................... -- -- (889) -- -- (889)
Purchase of treasury stock.................. -- (5,523) -- -- -- (5,523)
Restricted stock............................ -- -- 571 -- -- 571
Issuance of shares upon exercise of stock
options................................... -- -- 8,255 -- -- 8,255
Tax benefit from exercise of stock options -- -- 3,277 -- -- 3,277
---------- ---------- ---------- ---------- ---------- -----------
Balance at December 31, 1997.................. 5 (16,268) -- (82,756) (3,309) (102,328)
Comprehensive income:
Net loss.................................. -- -- -- (10,081) -- (10,081)
Other Comprehensive income:
Foreign currency translation
adjustment............................ -- -- -- -- 16 16
Minimum pension liability
adjustment, net of tax of $1,130...... -- -- -- -- (1,805) (1,805)
Total comprehensive income.................. (11,870)
Merger Eliminations (Note 1)................ (5) 16,268 (4,220) (12,043) -- --
Dividend to Insilco Holding Co. (Note 1) -- -- -- (30,856) -- (30,856)
Equity investment by Insilco Holding Co.
(Note 1).................................. -- -- 3,668 -- -- 3,668
Issuance of shares upon exercise of stock
options................................... -- -- 3,281 -- -- 3,281
Issuance of warrants........................ -- -- 257 -- -- 257
Tax benefit from exercise of stock options -- -- 939 -- -- 939
---------- ---------- ---------- ---------- ---------- -----------
Balance at December 31, 1998.................. -- -- $ 3,925 $ (135,736) $ (5,098) $ (136,909)
========== ========== ========== ========== ========== ===========
</TABLE>
F-5
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 1998, 1997 and 1996
(In thousands)
<TABLE>
1998 1997 1996
----------- ----------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (10,081) $ 81,644 $ 39,053
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 20,159 18,377 15,357
Deferred tax expense (benefit) (5,388) 11,679 11,667
Other noncash charges and credits 5,172 (127) (4,904)
Changes in operating assets and liabilities:
Receivables (7,224) (1,297) (3,370)
Inventories (2,360) (3,304) 791
Payables and othe 4,027 10,171 (1,371)
Discontinued operations -- (71,632) (1,800)
---------- ---------- ----------
Net cash provided by operating activities 4,305 45,511 55,423
---------- ---------- ----------
Cash flows from investing activities:
Capital expenditures (20,155) (23,583) (20,009)
Acquisitions of businesses, net of cash acquired (2,308) -- (37,726)
Other investing activities (903) 6,190 8,704
Proceeds from divestitures, net -- 112,610 21,818
Discontinued operations -- -- (2,570)
---------- ---------- ----------
Net cash provided by (used in) investing activities (23,366) 95,217 (29,783)
---------- ---------- ----------
Cash flows from financing activities:
Sale (retirement) of 10 1/4% Notes (148,474) 150,000 --
Borrowings (repayments) of Revolving Facility (41,498) 64,759 --
Dividend to Insilco Holding Co. (30,856) -- --
Debt issuance and tender costs (12,415) (10,689) --
Payment of prepetition liabilities (2,735) (2,811) (2,862)
Funds deposited in excess of retired 10 1/4% Notes (2,032) -- --
Borrowing (retirement) of Term Facility 123,825 (117,246) (26,330)
Proceeds from 12% Notes and warrants 120,000 -- --
Equity investment by Insilco Holding Co. 3,668 -- --
Proceeds from stock option exercise 3,281 4,618 1,071
Loan from Insilco Holding Co. 2,991 -- --
Repurchase of shares -- (220,000) --
Purchase of treasury stock -- (1,887) (3,932)
---------- ---------- ----------
Net cash provided by (used in) financing activities 15,755 (133,256) (32,053)
---------- ---------- ----------
Effect of exchange rate changes on cash 85 (302) --
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents (3,221) 7,170 (6,413)
Cash and cash equivalents at beginning of period 10,651 3,481 9,894
---------- ---------- ----------
Cash and cash equivalents at end of period $ 7,430 $ 10,651 $ 3,481
========== ========== ==========
Supplemental information - cash paid for:
Interest, net of capitalized amount $ 31,744 $ 13,305 $ 17,820
========== ========== ==========
Income taxes paid (refunded) $ (4,908) $ 7,062 $ 2,081
========== ========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1998, 1997 and 1996
(1) History of the Company
Insilco Corporation (the "Company"), a Delaware corporation, is a
diversified producer of automotive, telecommunications and electronics
components and is a specialty publisher of student yearbooks. On August
17, 1998, through a series of transactions, the Company became a wholly
owned subsidiary of Insilco Holding Co. ("Holdings") and is included in
Holdings' consolidated financial statements and consolidated group for
tax purposes. The Company is however required to report separate
consolidated financial information under the Securities Exchange Act of
1934 because the Company's 10 1/4% Senior Subordinated Notes (the "10
1/4% Notes") are registered debt securities under the Securities Act of
1933 and the 12% Senior Subordinated Notes (the "12% Notes"), which were
offered and sold only to qualified institutional buyers as defined in
Rule 144A under the Securities Act, are expected to be declared effective
by the Securities and Exchange Commission in the near term.
The transactions completed on August 17, 1998 included, among other
things, the formation by Insilco Holding Co. (then a wholly owned
subsidiary of the Company) of a wholly owned subsidiary ("ReorgSub"),
followed by the merger of ReorgSub with and into the Company (the
"Reorganization Merger"), pursuant to which each stockholder of the
Company had his or her shares of the Company converted into the same
number of shares of Holdings and the right to receive $0.01 per share in
cash, and Holdings became the parent of the Company.
Promptly following the Reorganization Merger, a second merger took place
pursuant to which Silkworm Acquisition Corporation ("Silkworm"), an
affiliate of Donaldson, Lufkin & Jenrette Merchant Banking Partners, II,
L.P. ("DLJMB"), merged with and into Holdings (the "Merger," and together
with the Reorganization Merger, the "Mergers") and each share of Holdings
Common Stock was converted into the right to receive $43.47 in cash and
0.03378 of a share of Holdings Common Stock. Thus, as a result of the
Mergers, each stockholder of the Company, in respect of each of his or
her shares, received $43.48 in cash and retained 0.03378 of a share of
Holdings Common Stock.
Following the Mergers, (i) the Company's existing stockholders retained,
in the aggregate, approximately 10.1% (9.4% on a fully diluted basis) of
the outstanding shares of Holdings Common Stock; (ii) the DLJMB Funds
held approximately 69.0% (69.8% on a fully diluted basis) of the
outstanding shares of Holdings Common Stock; (iii) 399 Venture Partners
Inc., an affiliate of Citibank, N.A. ("CVC"), purchased shares of
Silkworm which in the Merger were converted into approximately 19.3%
(17.8% on a fully diluted basis) of the outstanding shares of Holdings
Common Stock; and (iv) management of the Company purchased approximately
1.7% (1.5% on a fully diluted basis) of the outstanding shares of
Holdings Common Stock.
Immediately prior to the effectiveness of the Reorganization Merger, each
outstanding option to acquire shares of the common stock of the Company
granted to employees and directors, whether or not vested (the "Options")
was canceled and in lieu thereof, each holder of an Option received a
cash payment in an amount equal to (x) the excess, if any, of $45.00 over
the exercise price of the Option multiplied by (y) the number of shares
subject to the Option, less applicable withholding taxes (the "Option
Cash Payments"). Certain holders of such Options elected to utilize
amounts otherwise receivable by them to purchase $1,009,000 of equity and
$2,657,000 of equity units of Holdings.
The total amount of cash required to consummate the foregoing
transactions was approximately $204.4 million. This amount was financed
with (i) gross proceeds of approximately $70.2 million from the issuance
by Silkworm of units (which were converted into units of Holdings (the
"Holdings Units") in the Merger), each unit consisting of $1,000
principal amount at maturity of 14% Senior Discount notes due 2008 (the
"Holdings Senior Discount Notes") and one warrant to purchase 0.325 of a
share of Holdings Common Stock at an exercise price of $0.01 per share,
(ii) the issuance by Silkworm to the DLJMB Funds, CVC and certain members
of management of the Company, for an aggregate consideration of
F-7
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
approximately $56.1 million, of 1,245,138 shares of Silkworm common stock
(which was converted into Holdings Common Stock in the Merger), (iii) the
issuance by Holdings to the DLJMB Funds, for an aggregate consideration
of $35.0 million, of 1,400,000 shares of the Holding's 15% Senior
Exchangeable Preferred Stock due 2012 ("PIK Preferred Stock") and the
DLJMB Warrants to purchase 65,603 shares of Holdings Common Stock at an
exercise price of $0.001 per share, and (iv) approximately $43.1 million
of new borrowings under the Company's existing credit facility (the "1997
Credit Facility"). In addition, the Company paid a cash dividend to
Holdings of $30.9 million following the Mergers.
The Company incurred $20,890,000 of costs related to the Merger in 1998.
Discontinued Operations
On March 5, 1997, the Company completed the sale of its Office Products
Business, a significant line of business within the Company's Office
Products/Specialty Publishing Group, with the divestiture of its
traditional office products business (the "Rolodex Business") for
$112,610,000, net of transaction costs, which resulted in a net gain of
$57,788,000, net of taxes of $37,213,000. The divestiture of the Rolodex
Business was preceded in 1996 by the divestiture of the Rolodex
electronics product line ("Rolodex Electronics") and the Company's
computer accessories business, Curtis Manufacturing Co., Inc. ("Curtis").
The proceeds from these sales aggregated $21,818,000.
The accompanying consolidated statements of operations and cash flows are
reclassified to account for the sale of the Office Products Business as a
discontinued operation. Revenues associated with the discontinued Office
Products Business for the years 1997 and 1996 were $10,797,000 and
$80,069,000, respectively. At December 31, 1996, the current and
non-current net assets of the Office Products Business were $6,531,000 and
$8,934,000, respectively.
Acquisitions
In 1996, the Company acquired Great Lake, Inc. ("Great Lake"), which
serves the automotive, heavy truck and industrial manufacturing radiator
replacement market and the automotive aluminum tube business of Helmut
Lingemann GmbH & Co. (the "Lingemann Business") for approximately
$37,726,000 in the aggregate including transaction fees and expenses. The
Lingemann transactions include the purchase of stock of Lingemann's German
subsidiary, ARUP Alu-Rohr und-Profil GmbH, and the automotive aluminum
tube business assets of its Duncan, South Carolina based Helima-Helvetion
International, Inc. This cash transaction was financed principally from
borrowings under the Company's prior bank credit agreement (See Note 7).
These acquisitions have been accounted for as purchases and, accordingly,
the purchase prices have been allocated to the assets and liabilities
acquired based on their fair values at the acquisition dates. The
operating results of the businesses acquired have been included for the
period subsequent to their acquisition dates. (See Note 20 for pro forma
results). The fair value of the assets acquired totaled $47,478,000 and
the liabilities assumed totaled $9,752,000.
(2) Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the financial statements of
the Company and its wholly owned subsidiaries. The Company's investments
in companies for which the Company does not have operational control are
accounted for under the equity method. All significant intercompany
balances and transactions have been eliminated.
F-8
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Pro Forma Results of Operations
In 1998 the Company completed the Mergers (see Note 1). In addition,
during 1997, the Company completed a Share Repurchase of approximately
59% of its outstanding shares partially with the proceeds from the
divestiture of its traditional office products business (see Note 1) and
partially through the issuance of subordinated notes and refinancing of
its bank credit agreement (see Note 7). These transactions affect the
comparability of the Company's financial position, results of operations
and cash flows for 1998 compared to prior periods. As a result of these
transactions, the Company has presented pro forma results of operations
for 1998 and 1997 as if all of these transactions except the divestiture
of the Office Products Business (which is being accounted for as a
discontinued operation) occurred at the beginning of the respective
periods in Note 20.
Cash Equivalents
Cash equivalents include time deposits and highly liquid investments with
original maturities of three months or less.
Trade Receivables
Trade receivables are presented net of allowances for doubtful accounts
and sales returns of $2,780,000 and $2,132,000 at December 31, 1998 and
1997, respectively.
Inventories
Inventories are valued at the lower of cost or market. Cost is generally
determined using the first-in, first-out cost method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation of plant
and equipment is calculated on the straight-line method over the assets'
estimated useful lives, which is 25 years for new buildings and ranges
from 3 to 9 years for machinery and equipment.
Deferred Financing Costs
Deferred financing costs are being amortized using the effective interest
method over the life of the related debt.
Goodwill
Goodwill represents the excess of cost of net assets acquired in business
combinations over their fair values. It is amortized on a straight-line
basis over estimated periods to be benefited (not exceeding 40 years).
The recovery of the carrying value of goodwill is periodically evaluated
in relation to the operating performance and future undiscounted net cash
flows of the related businesses acquired.
Interest Rate Hedges
The Company periodically uses interest rate hedges to limit its exposure
to the interest rate risk associated with its floating rate long-term
bank debt. Unamortized premium related to purchased interest rate caps
is included in other assets in the balance sheet and is amortized using
the interest method over the life of the related agreements. Amounts
received under cap agreements and net amounts received (or paid) under
swap agreements are recorded
F-9
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
as a reduction (addition) to interest expense. As of December 31, 1998,
the Company had no interest rate derivative instruments to manage exposure
to interest changes.
Environmental Remediation and Compliance
Environmental remediation and compliance expenditures are expensed or
capitalized in accordance with generally accepted accounting principles.
Liabilities are recorded when it is probable the obligations have been
incurred and the amounts can be reasonably estimated.
Fair Value of Financial Instruments
Fair value of cash, accounts receivable, accounts payable and accrued
liabilities approximate book value at December 31, 1998. Fair value of
debt is based upon market value, if traded, or discounted at the
estimated rate the Company would incur currently on similar debt (See
Note 8).
Income Taxes
Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are determined based upon differences
between the financial reporting and tax basis of assets and liabilities
and are measured by applying enacted tax rates and laws to taxable years
in which such differences are expected to reverse.
Estimates
In conformity with generally accepted accounting principles, the
preparation of our financial statements requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and therefore actual results may ultimately differ
from those estimates.
Reclassifications
Certain 1997 and 1996 amounts have been reclassified to conform with 1998
presentation.
Impact of Recently Issued Accounting Standards
In January 1998, the Company adopted Statement No. 130 ("SFAS 130")
"Reporting Comprehensive Income". SFAS 130 establishes standards for
reporting and display of comprehensive income in the financial
statements. Comprehensive income is the total of net income and most
other non-owner changes in equity. In addition, in January 1998, the
Company adopted Statement No. 132 ("SFAS 132"), "Employers' Disclosures
About Pensions and Other Post-retirement Benefits", which revises
employer disclosure about pension plans and other post-retirement
benefits. SFAS 132 does not change the method of accounting for such
plans. Prior year amounts in the notes to the consolidated financial
statements have been reclassified to conform to the requirements of SFAS
132.
On January 1, 1998, the Company adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"). SFAS 131 superseded FASB Statement No. 14, "Financial
Reporting for Segments of a Business Enterprise". SFAS 131 establishes
standards for reporting information about operating segments in annual
financial statements and interim financial reports issued to
shareholders. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. The
adoption of SFAS 131
F-10
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
did not affect results of operations or financial position, but did affect
the disclosure of segment information (See Note 18).
In June 1998, the FASB issued Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities", which is required to be
adopted in years beginning after June 15, 1999. The Statement permits
early adoption as of the beginning of any fiscal quarter after its
issuance. The Company expects to adopt the new Statement effective
January 1, 2000. The Statement will require companies to recognize all
derivatives on the balance sheet at fair value. Derivatives that are not
hedges must be adjusted to fair value through income. If a derivative is
a hedge, depending on the nature of the hedge, changes in the fair value
of the derivative will either be offset against the change in fair value
of the hedged asset, liability, or firm commitment through earnings, or
recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change
in fair value will be immediately recognized in earnings. The Company
does not anticipate that the adoption of this Statement will have a
significant effect on its results of operations or financial position.
(3) Inventories
A summary of inventories at December 31 follows (in thousands):
1998 1997
----------- -----------
Raw materials and supplies................... $ 27,238 $ 25,396
Work in process.............................. 23,559 23,427
Finished goods............................... 13,768 11,895
--------- ---------
$ 64,565 $ 60,718
========= =========
(4) Property, Plant and Equipment
A summary of property, plant and equipment at December 31 follows (in
thousands):
1998 1997
----------- -----------
Land......................................... $ 6,285 $ 6,267
Buildings.................................... 37,311 33,718
Machinery and equipment...................... 151,714 137,310
195,310 177,295
Less accumulated depreciation............. (80,554) (63,324)
--------- ---------
$ 114,756 $ 113,971
========= =========
(5) Other Assets
A summary of other assets at December 31 follows (in thousands):
1998 1997
----------- -----------
Goodwill, net................................ $ 13,566 $ 13,408
Equity investment in Thermalex............... 8,412 9,736
Deferred financing costs..................... 10,196 9,246
Cash surrender value of life insurance....... 1,758 4,636
Other........................................ 6,108 5,574
--------- ---------
$ 40,040 $ 42,600
========= =========
F-11
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Thermalex, Inc. ("Thermalex") is a joint venture, formed in 1985 between
a subsidiary of the Company and Mitsubishi Aluminum, Ltd., which sells
aluminum extruded products to the automobile industry. The Company
received $1,324,000 and $1,461,000 of dividend distributions from
Thermalex in 1998 and 1997, respectively.
Sales for Thermalex for the years ended December 31, 1998, 1997 and 1996
were $49,547,000, $47,152,000 and $48,057,000, respectively. Net income
for the years ended December 31, 1998, 1997 and 1996 was $5,699,000,
$5,294,000 and $5,844,000, respectively. Total assets were $35,717,000
and $36,348,000 at December 31, 1998 and 1997, respectively.
Stockholders' equity was $16,828,000 and $19,475,000 at December 31,
1998 and 1997, respectively.
(6) Accrued Expenses and Other
A summary of accrued expenses and other at December 31 follows (in
thousands):
1998 1997
----------- -----------
Salaries and wages payable.................... $ 7,977 $ 9,445
Pension....................................... 8,837 5,523
Accrued interest payable...................... 4,227 8,038
Current portion of the long term obligations.. 1,945 5,393
Accrued taxes payable......................... 1,623 1,112
Other accrued expenses........................ 14,103 14,242
--------- ---------
$ 38,712 $ 43,753
========= =========
(7) Long-term Debt and Warrants
A summary of long-term debt at December 31 follows (in thousands):
1998 1997
----------- -----------
Term Facility................................. $ 125,000 --
12% Senior Subordinated Notes................. 119,747 --
Revolving Facility............................ 44,922 $ 87,500
Alternative currency borrowings............... 21,000 18,348
10 1/4% Senior Subordinated Notes............. 1,526 150,000
Miscellaneous................................. 214 1,895
--------- ---------
312,409 257,743
Less current portion....................... (1,265) (1,684)
--------- ---------
$ 311,144 $ 256,059
========= =========
As a result of the Merger (see Note 1), the Company was required to make
an Offer to Purchase, as defined in the indenture relating to the 10 1/4%
Notes (the "10 1/4% Note Indenture"), for the entire $150 million of
outstanding 10 1/4% Notes, which were issued on August 12, 1997, at 101%
of their aggregate principal amount, plus accrued interest. Through
March 26, 1999, the Company repurchased $149,974,000 of the 10 1/4%
Notes.
On November 9, 1998, the Company completed the sale of $120 million of
12% Senior Subordinated Notes due 2007 (the "12% Notes") with 120,000
warrants to purchase 62,400 of Holdings common stock shares at $45 per
share. The net proceeds of $116.4 million, after payment of $3.6
million in underwriting fees to Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJSC") and other expenses, was used (along with borrowings
from the credit facilities) to fund the repurchase of the 10 1/4% Notes.
As of December 31, 1998, all of the 120,000
F-12
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
warrants to purchase 62,400 shares of Holdings' Common Stock at a purchase
price of $45.00 per share remained outstanding and expire on August 1,
2010.
On November 24, 1998, the Company amended and restated its Bank Credit
Agreement ("Bank Credit Agreement"). The Bank Credit Agreement provides
for two credit facilities (the "Credit Facilities"): a $175 million, 4.8
year senior secured revolving loan ("Revolving Facility") and a $125
million, 7 year senior secured amortizing term loan ("Term Facility").
In 1998, the Company recorded an extraordinary charge of $5,888,000, (net
of a tax benefit of $3,958,000) related to the write-off of deferred
financing costs associated with its 1997 Bank Credit Agreement and 10
1/4% Notes.
The Revolving Facility provides for a $50 million sublimit for issuance
of letters of credit and a $40 million sublimit for alternative currency
borrowings. The Revolving Facility is permanently reduced by $17.5
million per year in July 2001 and July 2002.
The Term Facility is subject to mandatory quarterly prepayments of
$312,500 for the first six years and quarterly payments of approximately
$29.4 million in the seventh year.
Interest accrues under the Credit Facilities at floating rates calculated
with respect to either the London Interbank Offered Rate ("LIBOR") or The
First National Bank of Chicago's Base Rate, plus an applicable margin.
The margin, in turn, fluctuates based on the leverage ratio (as defined
in the Bank Credit Agreement). The Company also pays an unused
commitment fee, which also fluctuates based upon the leverage ratio of
the Company and is based upon availability under the Revolving Facility.
At December 31, 1998, the applicable margin for the Term Facility and the
Revolving Facility were LIBOR plus 3.75% and LIBOR plus 3.00%,
respectively. The unused commitment fee at December 31, 1998 was 0.625%.
The applicable margins and unused commitment fee are fixed through May
1999 and thereafter are determined by the Company's leverage ratio.
Both the Term Facility and Revolving Facility are subject to mandatory
prepayments due to, but not limited to, 100% of the net cash proceeds
from assets sales and issuance of debt and 50% of the net cash proceeds
from the issuance of equity.
The Credit Facilities are guaranteed by the Company and by all of the
Company's present and future domestic subsidiaries. The obligations
thereunder are secured by (i) all of the common stock of the Company;
(ii) all or a substantial portion of the common stock or other interests
in the Company's present and future subsidiaries; (iii) the present and
future property and assets, including all accounts receivable, inventory,
equipment, fixtures, patents, trademarks and specified real property of
the Company and its present and future domestic subsidiaries (subject to
certain qualifications and exceptions); and, (iv) a collateral assignment
of intercompany notes and junior security agreements securing all
obligations of the domestic subsidiaries to the Company.
The Credit Facilities contain certain consolidated financial covenants
including, but not limited to, covenants related to maximum leverage
ratio, minimum fixed charge coverage ratio, minimum interest coverage
ratio, and a limit on annual capital expenditures. The Credit Facilities
also contain certain negative covenants typical of credit agreements of
this type including, but not limited to a prohibition on the ability of
the Company and its domestic subsidiaries to incur additional
indebtedness in excess of certain agreed upon amounts, the ability to
make investments other than permitted investments, and restricts the
Company and its subsidiaries from paying any dividends, redeem or
repurchase or acquire any of the Company or Holdings shares or pay any
principal, premium or interest (in excess of certain agreed upon amounts)
on any subordinated obligations.
The Company was in compliance with the covenants of its Credit Facilities
as of December 31, 1998.
F-13
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
As of December 31, 1998, under the sublimit for alternative currency
borrowings, the Company had borrowed $21.0 million (35.0 million German
Deutsche Marks). The Company's alternative currency borrowing is
designed to hedge the Company's net investment in its German operations.
The change, if any, to the net investment as a result of foreign currency
fluctuations is included in stockholders' equity as a foreign currency
translation adjustment. The alternative currency borrowing is
denominated in German Deutsche Marks and bears interest based on one to
six month German LIBOR rates plus an applicable margin based on the
Company's leverage ratio (such LIBOR rates approximated 3.22% to 3.25% at
December 31, 1998).
In 1997, the Company refinanced its then existing debt under a six year
$200 million amended and restated credit agreement (the "1997 Bank Credit
Agreement") which provided for the 1997 Credit Facility.
In 1997, proceeds from the 1997 Bank Credit Agreement were used to prepay
amounts outstanding under the prior bank credit agreement. As a result of
the prepayment, the Company recorded an extraordinary charge of $728,000
(net of a tax benefit of $465,000) due to expensing the related
unamortized debt financing costs.
(8) Fair Value of Financial Instruments
The estimated fair value at December 31 of financial instruments, other
than current assets and liabilities, follow (in thousands):
<TABLE>
1998 1997
---------------------------- ----------------------------
Estimated Estimated
Book Value Fair Value Book Value Fair Value
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Debt:
12% Senior Subordinated Notes.......... $ 119,747 $ 123,600 -- --
10 1/4% Senior Subordinated Notes...... 1,526 1,541 $ 150,000 $ 154,500
Bank revolving credit facility......... 65,922 65,922 105,848 105,848
Bank term loan......................... 125,000 125,000 -- --
Miscellaneous.......................... 214 214 1,895 1,895
----------- ----------- ----------- -----------
$ 312,409 $ 316,277 $ 257,743 $ 262,243
=========== =========== =========== ===========
Hedges:
Interest rate.......................... -- -- -- $ 423
=========== =========== =========== ===========
</TABLE>
The Company is exposed to market risk for changes in interest rates, but
has no off-balance sheet risk of accounting loss. The Company manages
counterparty credit risk by only entering into derivative transactions
with high quality financial institutions that, because of their credit
profile, are expected to perform under the terms associated with such
transactions.
(9) Guarantor Subsidiaries
In connection with the November 1998 sale of $120 million of 12% Notes,
the Company permitted its wholly-owned domestic subsidiaries
("Guarantors") to unconditionally guarantee the 12% Notes on a senior
subordinated basis.
The guarantees are general unsecured obligations of the Guarantors, are
subordinated in right of payment to all existing and future senior
indebtedness of the guarantors (including indebtedness of the Credit
Facilities) and will rank senior in right of payment to any future
subordinated indebtedness of the Guarantors. The following condensed
consolidating financial information of the Company includes the accounts
of the Guarantors, the combined accounts of the non-guarantors and the
Company for the periods indicated. Separate financial
F-14
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
statements of each of the Guarantors are not presented because management
has determined that such information is not material in assessing the
Guarantors.
Condensed Consolidating Balance Sheet
December 31, 1998
(In thousands)
<TABLE>
Non
Insilco Guarantors Guarantors Consolidated
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents.............................. $ 6,472 $ 23 $ 935 $ 7,430
Accounts receivable.................................... 2,131 76,899 5,158 84,188
Inventories............................................ -- 61,178 3,387 64,565
Deferred taxes......................................... 6,143 -- -- 6,143
Prepaid expenses and other............................. 838 3,506 43 4,387
---------- ---------- ---------- ----------
Total current assets................................... 15,584 141,606 9,523 166,713
Property, plant and equipment, net ........................ 208 103,061 11,487 114,756
Deferred taxes............................................. 1,517 -- -- 1,517
Other assets and deferred charges.......................... 14,035 22,463 3,542 40,040
---------- ---------- ---------- ----------
Total assets........................................... $ 31,344 $ 267,130 $ 24,552 $ 323,026
========== ========== ========== ==========
Liabilities and Stockholder's Equity (Deficit)
Current liabilities:
Current portion of long-term debt..................... $ 1,250 $ 15 -- $ 1,265
Accounts payable....................................... -- 31,097 3,416 34,513
Customer deposits...................................... -- 24,981 -- 24,981
Accrued expenses and other............................. 12,411 5,360 20,941 38,712
---------- ---------- ---------- ----------
Total current liabilities.............................. 13,661 61,453 24,357 99,471
Long-term debt, less current portion ...................... 310,945 199 -- 311,144
Other long-term obligations, excluding current portion.... 13,243 32,938 148 46,329
Intercompany payable....................................... (79,887) 82,878 -- 2,991
---------- ---------- ---------- ----------
Total liabilities...................................... 257,962 177,468 24,505 459,935
Stockholder's equity (deficit)............................. (226,618) 89,662 47 (136,909)
---------- ---------- ---------- ----------
Total liabilities and stockholder's equity (deficit)... $ 31,344 $ 267,130 $ 24,552 $ 323,026
========== ========== ========== ==========
</TABLE>
F-15
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Condensed Consolidating Balance Sheet
December 31, 1997
(In thousands)
<TABLE>
Non
Insilco Guarantors Guarantors Consolidated
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents............................. $ 9,809 $ (185) $ 1,027 $ 10,651
Accounts receivable................................... 190 65,879 4,617 70,686
Inventories........................................... -- 56,940 3,778 60,718
Deferred taxes........................................ 277 -- -- 277
Prepaid expenses and other............................ 767 1,872 77 2,716
---------- ---------- ---------- ----------
Total current assets.................................. 11,043 124,506 9,499 145,048
Property, plant and equipment, net ....................... 228 103,147 10,596 113,971
Deferred taxes............................................ 1,054 -- -- 1,054
Other assets and deferred charges......................... 15,608 23,531 3,461 42,600
---------- ---------- ---------- ----------
Total assets.......................................... $ 27,933 $ 251,184 $ 23,556 $ 302,673
========== ========== ========== ==========
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current portion of long-term debt..................... $ 520 $ 1,164 -- $ 1,684
Accounts payable...................................... -- 37,087 2,670 39,757
Customer deposits..................................... -- 19,234 1,112 20,346
Accrued expenses and other............................ 19,134 2,915 21,704 43,753
---------- ---------- ---------- ----------
Total current liabilities............................. 19,654 60,400 25,486 105,540
Long-term debt, less current portion ..................... 255,848 211 -- 256,059
Other long-term obligations, excluding current portion.... 5,957 37,040 405 43,402
Intercompany payable...................................... (58,541) 58,541 -- --
---------- ---------- ---------- ----------
Total liabilities..................................... 222,918 156,192 25,891 405,001
Stockholders' equity (deficit)............................ (194,985) 94,992 (2,335) (102,328)
---------- ---------- ---------- ----------
Total liabilities and stockholders' equity (deficit).. $ 27,933 $ 251,184 $ 23,556 $ 302,673
========== ========== ========== ==========
</TABLE>
F-16
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statement of Operations
Year Ended December 31, 1998
(In Thousands)
<TABLE>
Non
Insilco Guarantors Guarantors Consolidated
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Sales.................................................... -- $ 503,471 $ 32,158 $ 535,629
Cost of products sold.................................... -- 357,893 25,376 383,269
Depreciation and amortization............................ 72 18,265 1,822 20,159
Selling, general and administrative expenses............. 10,287 79,686 2,850 92,823
Merger fees and restructuring charges.................... 20,890 1,207 -- 22,097
---------- ---------- ---------- ----------
Operating income (loss).............................. (31,249) 46,420 2,110 17,281
Other income expense:
Interest expense..................................... (28,652) (513) (33) (29,198)
Interest income...................................... 895 34 50 979
Other income, net.................................... 3,136 2,366 375 5,877
---------- ---------- ---------- ----------
Income (loss) before income taxes and extraordinary
item.............................................. (55,870) 48,307 2,502 (5,061)
Income tax benefit (expense)............................. 15,811 (15,272) 329 868
---------- ---------- ---------- ----------
Income (loss) before extraordinary item.............. (40,059) 33,035 2,831 (4,193)
Extraordinary item, net of tax........................... (5,888) -- -- (5,888)
---------- ---------- ---------- ----------
Net income (loss).................................... $ (45,947) $ 33,035 $ 2,831 $ (10,081)
========== ========== ========== ==========
</TABLE>
F-17
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Condensed Consolidating Statement of Operations
Year Ended December 31, 1997
(In Thousands)
<TABLE>
Non
Insilco Guarantors Guarantors Consolidated
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Sales -- $ 502,475 $ 25,758 $ 528,233
Cost of products sold.................................... -- 351,178 19,667 370,845
Depreciation and amortization............................ 89 16,267 2,021 18,377
Selling, general and administrative expenses............. 9,249 75,677 2,983 87,909
---------- ---------- ---------- ----------
Operating income (loss).............................. (9,338) 59,353 1,087 51,102
Other income expense:
Interest expense..................................... (19,969) (501) (92) (20,562)
Interest income...................................... 2,747 26 64 2,837
Other income, net.................................... 548 2,699 194 3,441
---------- ---------- ---------- ----------
Income (loss) from continuing operations before
income taxes and extraordinary item............... (26,012) 61,577 1,253 36,818
Income tax benefit (expense)............................. 6,849 (20,252) (1) (13,404)
---------- ---------- ---------- ----------
Income (loss) from continuing operations before
extraordinary item................................ (19,163) 41,325 1,252 23,414
Discontinued operations.................................. 57,788 1,170 -- 58,958
---------- ---------- ---------- ----------
Income before extraordinary item..................... 38,625 42,495 1,252 82,372
Extraordinary item, net of tax........................... (728) -- -- (728)
---------- ---------- ---------- ----------
Net income........................................... $ 37,897 $ 42,495 $ 1,252 $ 81,644
========== ========== ========== ==========
</TABLE>
F-18
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(9) Guarantor Subsidiaries (continued)
Condensed Consolidating Statement of Operations
Year Ended December 31, 1996
(In Thousands)
<TABLE>
Insilco Guarantors Non-Guarantors Consolidated
------- ---------- -------------- ------------
<S> <C> <C> <C> <C>
Sales................................................... -- $ 481,289 $ 11,116 $ 492,405
Cost of products sold................................... -- 336,342 8,570 344,912
Depreciation and amortization........................... 84 14,455 818 15,357
Selling, general and administrative expenses............ 9,620 73,159 924 83,703
------------ ------------ ------------ --------------
Operating income (loss)......................... (9,704) 57,333 804 48,433
Other income expense:
Interest expense.................................... (17,912) (419) (47) (18,378)
Interest income..................................... 611 93 20 724
Other income, net................................... 7,812 (172) 66 7,706
------------ ------------ ------------ --------------
Income (loss) from continuing operations before
income taxes................................. (19,193) 56,835 843 38,485
Income tax benefit (expense)............................ 1,292 (14,564) -- (13,272)
------------ ------------ ------------ --------------
Income (loss) from continuing operations........ (17,901) 42,271 843 25,213
Discontinued operations ................................ 13,840 -- -- 13,840
------------ ------------ ------------ --------------
Net income (loss)............................... $ (4,061) $ 42,271 $ 843 $ 39,053
============ ============ ============ ==============
</TABLE>
F-19
<PAGE>
Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 1998
(In thousands)
<TABLE>
Non
Insilco Guarantors Guarantors Consolidated
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net cash provided by (used in) operating activities...... $ (50,773) $ 53,382 $ 1,696 $ 4,305
---------- ---------- ---------- ----------
Cash flows used in investing activities:
Capital expenditures, net............................ (50) (19,358) (747) (20,155)
Acquisitions, net of cash............................ (2,308) -- -- (2,308)
Other investing activities........................... (903) -- -- (903)
---------- ---------- ---------- ----------
Net cash used in investing activities................ (3,261) (19,358) (747) (23,366)
---------- ---------- ---------- ----------
Cash flows provided by (used in) financing activities:
Retirement of 10 1/4% Notes.......................... (148,474) (148,474)
Repayment of revolving credit facility............... (41,498) -- -- (41,498)
Dividend to Insilco Holding Co....................... (30,856) -- -- (30,856)
Debt issuance costs.................................. (12,415) -- -- (12,415)
Payment of prepetition liabilities................... (2,735) -- -- (2,735)
Funds deposited in excess of retired 10 1/4% Notes... (2,032) -- -- (2,032)
Intercompany transfer of funds....................... 33,767 (33,767) -- --
Borrowing (repayment) of long term debt.............. 125,000 (49) (1,126) 123,825
Proceeds from 12% Notes and warrants................. 120,000 -- -- 120,000
Issuance of common stock............................. 3,668 -- -- 3,668
Proceeds from stock option exercise.................. 3,281 -- -- 3,281
Loan from Insilco Holding Co......................... 2,991 -- -- 2,991
---------- ---------- ---------- ----------
Net cash provided by (used in)
financing activities............................. 50,697 (33,816) (1,126) 15,755
---------- ---------- ---------- ----------
Effect of exchange rate changes on cash.................. -- -- 85 85
---------- ---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents..................................... (3,337) 208 (92) (3,221)
Cash and cash equivalents at beginning of period......... 9,809 (185) 1,027 10,651
---------- ---------- ---------- ----------
Cash and cash equivalents at end of period............... $ 6,472 $ 23 $ 935 $ 7,430
========== ========== ========== ==========
</TABLE>
F-20
<PAGE>
Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 1997
(In thousands)
<TABLE>
Non
Insilco Guarantors Guarantors Consolidated
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net cash provided by (used in) operating activities..... $ (27,771) $ 73,067 $ 215 $ 45,511
---------- ---------- ---------- ----------
Cash flows used in investing activities:
Capital expenditures, net........................... (62) (22,182) (1,339) (23,583)
Other investing activities.......................... 6,190 -- -- 6,190
Proceeds from divestiture, net...................... 112,610 -- -- 112,610
---------- ---------- ---------- ----------
Net cash provided by (used in) investing activities...... 118,738 (22,182) (1,339) 95,217
---------- ---------- ---------- ----------
Cash flows provided by (used in) financing activities:
Repurchase of shares................................ (220,000) -- -- (220,000)
Repayment of long-term debt......................... (116,677) (569) -- (117,246)
Debt issuance and tender costs...................... (10,689) -- -- (10,689)
Payment of prepetition liabilities.................. (2,811) -- -- (2,811)
Purchase of treasury stock.......................... (1,887) -- -- (1,887)
Intercompany transfer of funds...................... 49,507 (49,507) -- --
Proceeds from 10 1/4% Notes......................... 150,000 -- -- 150,000
Proceeds from revolving credit facility............. 64,759 -- -- 64,759
Proceeds from stock option exercise................. 4,618 -- -- 4,618
---------- ---------- ---------- ----------
Net cash used in financing activities............. (83,180) (50,076) -- (133,256)
---------- ---------- ---------- ----------
Effect of exchange rate changes on cash -- -- (302) (302)
---------- ---------- ---------- ----------
Net increase (decrease) in cash and cash
equivalents 7,787 809 (1,426) 7,170
Cash and cash equivalents at beginning of period 2,022 (994) 2,453 3,481
---------- ---------- ---------- ----------
Cash and cash equivalents at end of period $ 9,809 $ (185) $ 1,027 $ 10,651
========== ========== ========== ==========
</TABLE>
F-21
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(9) Guarantor Subsidiaries (continued)
Condensed Consolidating Statement of Cash Flows
Year Ended December 31, 1996
(In thousands)
<TABLE>
Insilco Guarantors Non Guarantors Consolidated
------------ ------------ -------------- ------------
<S> <C> <C> <C> <C>
Net cash provided by (used in) operating activities............ $ (5,435) $ 58,010 $ 2,848 $ 55,423
------------ ------------ ------------- ---------
Cash flows used in investing activities:
Acquisitions, net of cash acquired.......................... (37,726) -- -- (37,726)
Discontinued operations..................................... (2,570) -- -- (2,570)
Capital expenditures, net................................... (126) (18,577) (1,306) (20,009)
Other investing activities.................................. 8,704 -- -- 8,704
Proceeds from divestiture, net.............................. 21,818 -- -- 21,818
------------ ------------ ------------- ---------
Net cash used in investing activities........................... (9,900) (18,577) (29,783)
------------ ------------ ------------- ---------
Cash flows provided by (used in) financing activities:
Repayment of long-term debt................................. (26,330) -- -- (26,330)
Payment of prepetition liabilities.......................... (2,862) -- -- (2,862)
Purchase of treasury stock.................................. (3,932) -- -- (3,932)
Intercompany transfer of funds.............................. 39,851 (39,851) -- --
Proceeds from stock option exercise......................... 1,071 -- -- 1,071
------------ ------------ ------------- ---------
Net cash provided by (used in) financing activities.... 7,798 (39,851) (32,053)
------------ ------------ ------------- ---------
Net increase (decrease) in cash and cash equivalents... (7,537) (418) 1,542 (6,413)
Cash and cash equivalents at beginning of period 911
9,559 (576) 9,894
------------ ------------ ------------- ---------
Cash and cash equivalents at end of period $ 2,022 $ (994) $ 2,453 $ 3,481
============ ============= ============ ==========
</TABLE>
(10) Other Long-Term Liabilities
A summary of other long-term liabilities at December 31 follows (in
thousands):
<TABLE>
1998 1997
---------- ---------
<S> <C> <C>
Post-retirement benefits, other than pensions (Note 11)..... $ 22,263 $ 22,191
Prepetition and other tax liabilities....................... 16,165 15,762
Environmental liabilities................................... 7,351 8,625
Deferred compensation and other............................. 2,495 2,217
---------- ---------
48,274 48,795
Less current portion.................................... (1,945) (5,393)
---------- ---------
$ 46,329 $ 43,402
========== ==========
</TABLE>
F-22
<PAGE>
(10) Other Long-Term Liabilities
A summary of other long-term liabilities at December 31 follows (in
thousands):
1998 1997
-------- --------
Post-retirement benefits, other than pensions (Note 11). $ 22,263 $ 22,191
Prepetition and other tax liabilities................... 16,165 15,762
Environmental liabilities............................... 7,351 8,625
Deferred compensation and other......................... 2,495 2,217
-------- --------
48,274 48,795
Less current portion................................ (1,945) (5,393)
-------- --------
$ 46,329 $ 43,402
======== ========
Prepetition and other tax liabilities
On April 1, 1993, the Company and certain of its subsidiaries emerged from
Chapter 11 of the United States Bankruptcy Code (the "Chapter 11 Cases")
pursuant to a plan of reorganization. The Chapter 11 Cases were commenced
on January 13, 1991. The Company entered into an agreement with the
Internal Revenue Service ("IRS") settling Federal income tax claims filed
in the Chapter 11 Cases for open taxable years through 1990. In addition
to this agreement, the tax liabilities include prepetition state tax claim
settlements, negotiated payment terms on certain foreign prepetition tax
liabilities, and an estimate of the Company's obligation for curative
action required by the IRS to cure certain operational defects in one of
the Company's defined contribution plans.
Environmental liabilities
The Company's operations are subject to extensive Federal, state and local
laws and regulations relating to the generation, storage, handling,
emission, transportation and discharge of materials into the environment.
The Company has a program for monitoring its compliance with applicable
environmental regulations, the interpretation of which often is
subjective. This program includes, but is not limited to, regular reviews
of the Company operations' obligations to comply with environmental laws
and regulations in order to determine the adequacy of the recorded
liability for remediation activities.
The environmental liabilities included in other long-term obligations
represent the estimate of cash obligations that will be required in future
years for these environmental remediation activities. The Company has
estimated the exposure and accrued liability to be approximately
$7,351,000 relating to these environmental matters at December 31, 1998.
These liabilities are undiscounted and do not assume any possible
recoveries from insurance coverage or claims which the Company may have
against third parties. The estimate is based upon in-house engineering
expertise and the professional services of outside consulting and
engineering firms. Because of uncertainty associated with the estimation
of these liabilities and potential regulatory changes, it is reasonably
possible that these estimated liabilities could change in the near term
but it is not expected that the effect of any such change would be
material to the consolidated financial statements in the near term.
(11) Pension Plans and Post-retirement Benefits
Pension Plans
The Company has defined benefit pension plans covering certain of its
employees. The benefits under these plans are based primarily on
employees' years of service and compensation near retirement. The
Company's funding policy is consistent with the funding requirements of
Federal laws and regulations. Plan assets consist principally of equity
F-23
<PAGE>
investments, government and corporate debt securities and real estate
investments. The Company also contributes to various multi-employer plans
sponsored by bargaining units for its union employees.
A summary of the plans' funded status reconciled with amounts recognized
in the consolidated balance sheet at December 31 follows (in thousands):
<TABLE>
1998 1997
----------------------------- ----------------------------
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Change in benefit obligation:
Benefit obligation at beginning of year.................... $67,312 $23,564 $66,824 $12,979
Service cost............................................... 2,241 808 1,967 352
Interest cost.............................................. 4,562 1,655 4,743 895
Amendments................................................. -- -- -- 475
Actuarial (gain) loss...................................... (658) 1,904 10,412 1,563
Benefits paid.............................................. (7,141) (1,362) (8,464) (870)
------- ------- ------- -------
Benefit obligation at end of year...................... $66,316 $26,569 $75,482 $15,394
------- ------- ------- -------
Change in plan assets:
Fair value of plan assets at beginning of year............. 78,440 19,535 82,046 9,718
Actual return on assets.................................... 3,274 786 13,091 1,597
Employer contribution...................................... 77 781 215 641
Benefits paid.............................................. (7,141) (1,362) (8,464) (870)
------- ------- ------- -------
Fair value of plan assets at end of year............... 74,650 19,740 86,888 11,086
------- ------- ------- -------
Funded status.............................................. 8,334 (6,829) 11,406 (4,308)
Unrecognized net actuarial (gain) loss..................... (10,299) 2,131 (13,073) (414)
Unrecognized prior service cost............................ (1,136) 1,738 (1,188) 2,054
------- ------- ------- -------
Accrued benefit cost................................... $(3,101) $(2,960) $(2,855) $(2,668)
======= ======= ======= =======
Amounts recognized in the statement of financial position
consist of:
Accrued benefit liability.................................. $(3,101) $(5,736) $(2,855) $(3,674)
Intangible asset........................................... -- 971 -- 1,006
Accumulated other comprehensive income..................... -- 1,805 -- --
------- ------- ------- -------
Net amount recognized.................................. $(3,101) $(2,960) $(2,855) $(2,668)
======= ======= ======= =======
</TABLE>
The components of pension cost follow (in thousands):
1998 1997 1996
------ ------- -------
Service cost............................ $3,049 $2,320 $2,162
Interest cost........................... 6,217 5,639 5,745
Actual return on assets................. (8,135) (6,826) (6,564)
Net amortization and deferral........... 263 86 97
Recognized net actuarial loss (gain).... 2 (208) (142)
------ ------ ------
Net pension cost.................... $1,396 $1,011 $1,298
====== ====== ======
F-24
<PAGE>
In addition, the Company recognized pension costs of $740,000 in 1998,
$597,000 in 1997 and $880,000 in 1996 related to contributions to
multi-employer plans.
The assumptions used in accounting for the pension plans as of December 31
follow:
1998 1997
------ ------
Discount rates................................. 7.00% 7.25%
Rates of increase in compensation levels....... 4.50% 4.50%
Expected long-term rate of return on assets.... 9.00% 9.00%
In addition to the defined benefit plans described above, the Company
sponsors a qualified defined contribution 401(k) plan, which covers
substantially all non-union employees of the Company and its subsidiaries,
and which covers union employees at one of the Company's subsidiaries. The
Company matches 50% of non-union participants' voluntary contributions up
to a maximum of 3% of the participant's compensation. The Company's expense
was approximately $821,000 in 1998, $819,000 in 1997 and $738,000 in 1996.
Post-retirement benefits, other than pensions
The Company maintains nine post-retirement health care and life insurance
benefit plans, four of which cover approximately 500 present retirees (the
"Retiree Plans") and five of which cover certain retirees and current
employees of four operating units (the "Open Plans"). The Company pays
benefits under the plans when due and does not fund its plan obligations as
they accrue. The Company's accrued post-retirement benefit cost is
attributable to the Retiree Plans and one of the Open Plans, in which
approximately 100 retirees and 300 current employees were participants. It
has been assumed that plan participant contributions, if any, under these
five plans will increase as a result of increases in medical costs. The
other Open Plans have been, and are assumed will continue to be, fully
self-funded by their participants.
The components of net periodic post-retirement benefit cost follow (in
thousands):
1998 1997 1996
------ ------ ------
Service cost......................... $ 384 $ 400 $ 492
Interest cost........................ 1,104 1,099 1,154
Amortization of prior service cost... (352) (352) (274)
Recognized net actuarial gain........ (45) (85) (91)
------ ------ ------
$1,091 $1,062 $1,281
====== ====== ======
F-25
<PAGE>
A summary of the plans' status reconciled with amounts recognized in the
consolidated balance sheet at December 31 follows (in thousands):
1998 1997
-------- --------
Change in benefit obligation:
Benefit obligation at beginning of year..... $ 16,848 $ 14,570
Service cost................................ 384 400
Interest cost............................... 1,104 1,099
Actuarial gain (loss)....................... (620) 1,762
Benefits paid............................... (1,019) (983)
-------- --------
Benefit obligation at end of year........ 16,697 16,848
-------- --------
Funded status............................... (16,697) (16,848)
Unrecognized net actuarial gain............. (1,493) (918)
Unrecognized prior service cost............. (4,073) (4,425)
-------- --------
Accrued benefit cost..................... $(22,263) $(22,191)
======== ========
At December 31, 1998 and 1997, the weighted-average discount rates used in
determining the accumulated post-retirement benefit obligation were
7.00% and 7.25%, respectively. The recorded healthcare cost trend rate
assumed in measuring the accumulated post-retirement benefit obligation
was 7.5% in 1999, declining to an ultimate rate of 4.5% in 2011 and
thereafter. Assumed healthcare cost trend rates have a significant
effect on the amounts reported for the healthcare plan. A one-
percentage point change in assumed healthcare cost trend rates in 1998
would have the following effects:
1-Percentage 1-Percentage
Point Point
Increase Decrease
------------ ------------
Effect on total of service and
interest cost components............... $ 255 $ (250)
Effect on post-retirement
benefit obligation..................... 3,264 (2,025)
(12) Stock-Based Compensation Plans
In connection with the Mergers, the Company adopted on August 17, 1998,
the following plans: the Equity Unit Plan, Direct Investment Program,
and the Stock Option Plan. Following is a description of each
respective plan.
Equity Unit Plan
The Equity Unit Plan allowed members of management of the Company to
purchase Equity Units, which are considered share equivalents of Holdings
stock. The purchase price per unit was $45.00. Participants were allowed
to use either deferred compensation or the deferral of future compensation
to satisfy the purchase price of the units. The value of the units is
determined under an Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA") formula or by market-related value if the actual
common shares of Holdings are listed or quoted for trading on a national
exchange or NASDAQ and the aggregate market value held by non-affiliates
is $25,0000,000 or greater. The total number of units available for
purchase under this plan is 88,194. As of December 31, 1998 the number of
units actually purchased was 77,457. Upon the occurrence of a Significant
Event (as defined in the Equity Unit Plan), the Company is obligated to pay
the participant, at the Company's discretion, in cash, common shares, or a
combination of both, the value of any units purchased less any purchase
price that has not been paid. If the value of the units is less than the
amount of remaining purchase price the participant is obligated to satisfy
the difference or the Company has the right to offset any amounts owed the
participant against the remaining purchase price.
F-26
<PAGE>
Direct Investment Program
The Direct Investment Program allowed members of management of the Company
to purchase actual Holdings shares of common stock at a price of $45.00 per
share. There are certain restrictions on the sale or transfer of these
shares upon the occurrence of a Significant Event such as termination,
future recapitalization or other defined situations. The total number of
shares available for purchase by management was 22,916 shares, with 22,361
shares actually purchased and outstanding as of December 31, 1998.
Stock Options
The Insilco Holding Co. Stock Option Plan provides for the issuance of no
more than 200,000 shares of Holdings common stock to eligible employees of
the Company. As of December 31, 1998, the Company has 200,000 shares
available for future awards under the plan.
Prior to the Mergers, the Company had the 1993 Long-term Incentive Plan, as
amended, and the 1993 Nonemployee Director Stock Incentive Plan which
provided for the issuance of no more than 2,000,000 and 360,000,
respectively, shares of common stock to eligible employees and nonemployee
directors. In connection with the Mergers, each of the 607,751 outstanding
options whether or not vested was canceled and in lieu thereof, each holder
of an option received a cash payment in an amount equal to the excess, if
any, of $45.00 over the exercise price of the option multiplied the number
of shares subject to the option, less applicable withholding taxes.
Under Statement of Financial Accounting Standards No. 123 ("SFAS 123"),
"Accounting for Stock-Based Compensation", companies can either record
expense based on the fair value of stock-based compensation upon issuance
or elect to remain under the "APB Opinion No. 25" method whereby no
compensation cost is recognized upon grant if certain conditions are met.
The Company is continuing to account for its stock-based compensation under
APB Opinion No. 25. Had the Company determined compensation cost based on
the fair value at the grant date for its stock options granted in 1998,
1997 and 1996 under SFAS 123, the Company's net income and earnings per
share would have approximated the pro forma amounts below:
1998 1997 1996
-------- ------- -------
Net income (loss)..... As reported.. $(10,081) $81,644 $39,053
Pro forma.... (10,124) 81,069 38,748
The effects of applying SFAS 123 in this pro forma disclosure are not
indicative of future amounts. SFAS 123 does not apply to grants prior to
1995, and additional awards in the future are anticipated.
F-27
<PAGE>
A summary of the options granted follows:
Weighted
Number of Average
Shares Price
---------- ---------
Options outstanding December 31, 1995..... 1,064,003 22.07
Granted................................ 102,900 34.82
Forfeited.............................. (36,670) 26.69
Exercised.............................. (59,668) 17.95
---------
Options outstanding December 31, 1996..... 1,070,565 23.36
Granted................................ 151,500 36.87
Forfeited.............................. (30,938) 24.79
Exercised.............................. (450,860) 18.27
---------
Options outstanding December 31, 1997..... 740,267 29.17
Granted................................ 15,500 33.02
Forfeited.............................. (39,067) 35.17
Exercised.............................. (108,949) 24.07
Cancelled at Merger Date............... (607,751) 30.04
---------
Options outstanding December 31, 1998..... --
=========
Options exercisable at December 31:
1996................................... 682,681 21.45
1997................................... 421,033 27.18
1998................................... -- --
The per share weighted-average fair value of stock options granted during
1998, 1997 and 1996 was $12.84, $13.87 and $19.20, respectively, on the
date of grant using the Black Scholes option-pricing model with the
following weighted-average assumptions: 1998 - expected dividend yield
0.0%, risk-free interest rate of 5.18%, and an expected life of 4.0 years.
F-28
<PAGE>
(13) Income Tax Expense
The components of total income tax expense (benefit) follow (in thousands):
1998 1997 1996
-------- -------- --------
Total income taxes:
From continuing operations before
extraordinary item:
Current:
Federal........................... $ 206 $ 588 $ 563
State and local................... 20 515 745
Foreign........................... 336 622 297
------- ------- -------
562 1,725 1,605
------- ------- -------
Deferred:
Federal........................... (1,220) 10,203 10,033
State and local................... (430) 988 882
Foreign........................... 220 488 752
------- ------- -------
(1,430) 11,679 11,667
------- ------- -------
Total from continuing operations
before extraordinary item....... (868) 13,404 13,272
Discontinued operations........... -- 38,250 (462)
Extraordinary item................ (3,958) (465) --
Stockholders' equity.............. (941) (3,277) (402)
------- ------- -------
Total income taxes................ $(5,767) $47,912 $12,408
======= ======= =======
The significant components of deferred income tax expense (benefit)
attributable to income from continuing operations follow (in thousands):
1998 1997 1996
-------- -------- --------
Deferred tax expense (benefit)
exclusive of the effects of other
components....................... $ (408) $11,679 $12,093
Changes in the valuation allowance
for deferred tax assets allocated
to income tax expense............ (1,022) -- (426)
------- ------- -------
$(1,430) $11,679 $11,667
======= ======= =======
Pretax income (loss) from continuing operations by domestic and foreign
sources follows (in thousands):
1998 1997 1996
-------- -------- --------
Domestic............................ $(9,261) $33,577 $34,606
Foreign............................. 4,200 3,241 3,879
------- ------- -------
$(5,061) $36,818 $38,485
======= ======= =======
F-29
<PAGE>
Income tax expense (benefit) attributable to income from continuing
operations differs from the amount computed by applying the Federal
statutory rate to pretax income due to the following (in thousands):
1998 1997 1996
-------- -------- --------
Computed statutory tax expense..... $(1,771) $12,886 $13,470
State and local taxes.............. (410) 1,323 1,422
Equity in earnings of affiliates... (798) (733) (818)
Merger fees........................ 2,555 -- --
Foreign tax rate differential...... 535 (373) (296)
Other, net......................... 43 301 (80)
Valuation allowance................ (1,022) -- (426)
------- ------- -------
Income tax expense (benefit)... $ (868) $13,404 $13,272
======= ======= =======
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31 follow (in thousands):
1998 1997
-------- --------
Deferred tax assets:
Net operating loss carryforwards............ $ 24,322 $ 9,526
Accrued liabilities......................... 12,163 13,882
Pension and other post-retirement benefits.. 11,426 11,026
Tax credits................................. 9,639 8,877
Other....................................... 650 215
-------- --------
Total gross deferred tax assets........... 58,200 43,526
Less valuation allowance.................. (35,457) (29,870)
-------- --------
22,743 13,656
Deferred tax liabilities:
Plant and equipment......................... (14,364) (11,472)
Other....................................... (719) (853)
-------- --------
Total gross deferred tax liabilities........ (15,083) (12,325)
-------- --------
Net deferred tax asset...................... $ 7,660 $ 1,331
======== ========
The net reduction in the valuation allowance for deferred tax assets for
the year ended December 31, 1997 was $4,246,000. Recognition, if any, of
tax benefits subsequent to December 31, 1998 relating to unrecognized
deferred tax assets are expected to be allocated to the consolidated
statements of operations and additional paid-in capital in the amounts of
$19,882,000 and $15,575,000, respectively. At December 31, 1998, the
Company had Federal net operating loss carryforwards of approximately
$51,692,000 which begin to expire in 2007.
In order to fully realize the net deferred tax assets recognized, the
Company will need to generate future taxable income. Combined cumulative
taxable income, before utilization of net operating loss carryforwards for
1996 and 1997 approximated $45 million. Based upon an evaluation of
historical and projected future taxable income, the Company believes it is
more likely than not that it will generate sufficient future taxable income
to realize its net deferred tax asset of $7,660,000 at December 31, 1998.
The amount of deferred tax assets considered realizable, however, could be
reduced if estimates of future taxable income are reduced.
F-30
<PAGE>
The Company is included in the consolidated Federal income tax return of
Insilco Holding Co., but has computed its provision for income taxes on a
separate return basis in accordance with Statement of Financial Accounting
Standards No. 109. The IRS is presently examining the consolidated Federal
income tax returns for tax years 1991 through 1996. Management believes
that the ultimate outcome of this examination will not have a material
adverse effect on the financial condition, results of operations or
liquidity of the Company.
(14) Severance and Write-downs
In 1998, the Company incurred charges for severance expenses totaling
$2,342,000 related to workforce reductions and write-downs of $200,000
related to lease cancellations.
(15) Other Income
Other income for 1996 included a favorable adjustment of $2,200,000 related
to the Company's environmental liabilities following completion of a site
clean-up for an amount less than previously estimated.
(16) Related Party Transactions
As of December 31, 1998, the Company had an intercompany payable of
$2,991,000 to Holdings, the parent of the Company (see Note 1). The
intercompany payable consisted of a $3,500,000 advance to the Company from
Holdings, net of $509,000 of expenses paid by the Company on behalf of
Holdings. Also as of December 31, 1998, the Company had a dividend
receivable of $2,850,000 from its Thermalex Joint Venture and a receivable
from DLJSC totaling $2,032,000 for funds deposited in excess of the retired
10 1/4% Notes, which are included in Receivables from Related Parties.
In connection with the sale of the 12% Notes, the Company paid $3,600,000
in underwriting fees to DLJSC. In addition the company paid DLJSC fees of
approximately $3,181,000 for services as Lead Arranger and Syndication
Agent in connection with the Company's amended and restated Bank Credit
Agreement. In connection with the Mergers, Donaldson Lufkin & Jenrettte
Capital Funding received $1,750,000 in fees from the Company to provide a
backstop credit facility and the company reimbursed DLJSC approximately
$184,000 for expenses.
Prior to the Mergers in 1998, Water Street Corporate Recovery Fund I, L.P.
("Water Street"), an affiliate of Goldman, Sachs & Co. ("Goldman Sachs"),
beneficially owned approximately 45% (62% prior to the Share Repurchase) of
the Company's common stock. Neither Holdings nor the Company is aware of
any transaction or of any currently proposed transaction in which Goldman
Sachs has any material direct or indirect interest as a result of its
ownership position in the Company except as follows:
Goldman Sachs advised the Company in connection with the Mergers and
received a fee of $2.0 million upon the consummation of the Mergers. In
the Mergers, Water Street received approximately $81.0 million and retained
62,962 shares of Holdings. Holdings entered into a Registration Rights
Agreement with Water Street in which Water Street has certain registration
rights with respect to such 62,962 shares.
During 1997, the Company paid Goldman Sachs $1,996,000 in investment
banking fees and expenses related to the sale of the Rolodex Business,
$2,042,000 of fees in connection with the refinancing and issuance of the
Notes and $204,000 for services rendered in connection with the Share
Repurchase. During 1997, the Company paid Goldman Sachs $3,094,000 in
underwriting fees related to the issuance of the 10 1/4% Notes.
F-31
<PAGE>
As discussed in Note 8, the Company entered into the 1997 Bank Credit
Agreement and Goldman Sachs Credit Partners L.P., an affiliate of Goldman
Sachs, had an initial participating interest of $66,667,000. Goldman Sachs
Credit Partners L.P. received $583,000 from the agent bank for its portion
of the arrangement fee paid by the Company in 1997.
During 1996, the Company paid Goldman Sachs $1,000,000 in transaction fees
in connection with the purchase of Lingemann (See Note 1). In connection
with such services, the Company provided for the indemnification of Goldman
Sachs against various liabilities, including liabilities under the Federal
securities laws.
(17) Commitments and Contingencies
Rental expense for operating leases totaled $4,625,000, $4,283,000 and
$3,291,000 for the years ended December 31, 1998, 1997 and 1996,
respectively. These leases primarily relate to production facilities.
Rental income received for subleases for operating leases totaled, $260,000
in 1998, $248,000 in 1997 and none in 1996.
Future minimum lease payments under contractually noncancellable operating
leases (with initial lease terms in excess of one year) for years
subsequent to December 31, 1998 are as follows: 1999, $4,409,000; 2000,
$3,785,000; 2001, $2,746,000; 2002, $1,920,000; 2003, $1,319,000; and
thereafter, $1,675,000. Future minimum rental income to be received under
noncancellable subleases for years subsequent to December 31, 1998 are as
follows: 1999, $260,000; 2000, $260,000; 2001, $260,000; 2002, $22,000;
and thereafter, none.
The Company is implicated in various claims and legal actions arising in
the ordinary course of business. Those claims or liabilities not subject
to Bankruptcy Court litigation will be addressed in the ordinary course of
business and be paid in cash as expenses are incurred.
In the opinion of management, the ultimate disposition of the matters
discussed above will not have a material adverse effect on the Company's
consolidated financial position, results of operations or liquidity.
(18) Segment Data
Description of Segments
The Company provides a broad spectrum of products through three business
segments: automotive components, technologies related components, and
specialty publishing.
The Company's Automotive Components segment provides products and services
to automotive OEMs and suppliers. These products include heat-transfer
products and related tubing, clutch plates for automatic transmissions,
suspension parts for vibration-reducing assemblies and engine mounts used
by automotive manufacturers and suppliers, railroad locomotive and other
heavy industrial equipment manufacturers and suppliers. Revenues from one
of the "Big 3" domestic automobile manufacturers accounted for
approximately 23%, 28%, and 29% of the Company's Automotive Component
segment revenues for 1998, 1997, and 1996, respectively.
Through its Technologies segment, the Company provides a broad range of
telecommunication and electrical component products and services to the
computer networking, telephone digital switching, main frame computer,
automotive and medical equipment markets. The products include high-speed
data connectors and systems, off-the-shelf and custom power
transformers, precision stampings and wire-formed parts, and custom
cable and wire assemblies used by computer networking,
telecommunications, computer, automotive and medical equipment OEMs and
suppliers. Two telecommunications OEMs directly or indirectly
accounted for approximately 24%, 26%, and 24% of the Company's
Technologies segment revenues for 1998, 1997, and 1996, respectively.
F-32
<PAGE>
The Specialty Publishing segment provides student yearbooks and other
specialty publishing services through the Company's wholly owned
subsidiary, Taylor Publishing Company ("Taylor"). Taylor is primarily
engaged in the contract design and printing of student yearbooks, which
accounted for approximately 88% of its annual revenues. Taylor markets its
yearbook services through commissioned independent sales representatives.
The Company has included in its Other segment two operating units that fall
below the quantitative reporting thresholds and do not meet all the
criteria for aggregation with the Company's reportable segments. These
operations are a manufacturer of high speed welded tube-mills and other
machinery and equipment for automotive suppliers and OEMs and a welded
stainless steel tubing manufacturer that provides tubing and tubing
products to distributors, recreational marine and transportation markets.
Measurement of Segment Profit or Loss and Segment Assets
The Company evaluates performance and allocates resources to its operating
segments based on profit or loss from operations before certain severance
costs and write-downs, other income or expense, interest and income taxes.
The accounting policies of the reportable segments are the same as those
described in Note 2, "Significant Accounting Policies." The Company has
intra-segment sales and transfers, which are recorded at cost or, if
agreed upon, a price comparable to unaffiliated customer sales. These
intra-segment sales and related profits are eliminated in consolidation
and are not presented in the segment disclosure. Identifiable assets
are those used by each segment in its operations. Corporate assets
consist primarily of cash, deferred financing fees and deferred tax
assets.
Factors Used to Identify the Enterprise's Reportable Segments
The Company's reportable segments are business units that offer different
products. The reportable segments are each managed separately because they
manufacture and distribute distinct products with different production
processes. Reportable segments were determined by using a management
approach and are consistent with the basis and manner in which the
Company's management internally disaggregates financial information for the
purposes of assisting in making internal operating decisions.
Operations within segments have been aggregated on the basis of similar
economic characteristics, products or services, purposes or end uses,
production processes, geographic marketing areas and methods, distribution
methods, and regulatory environments. Due to the diverse nature of the
Company's products, consideration has been given to ensure that the
aggregation of the Company's operations helps users better understand the
Company's performance and assess its future cash flows.
F-33
<PAGE>
(18) Segment Data (continued)
Summary financial information by business segment is as follows (in
thousands):
Year Ended December 31,
--------------------------------------
1998 1997 1996
-------- -------- --------
Net Sales:
Automotive Components........ $213,365 $193,839 $169,280
Technologies................. 189,781 198,941 183,663
Specialty Publishing......... 101,325 98,222 99,020
Other........................ 31,158 37,231 40,442
-------- -------- --------
$535,629 $528,233 $492,405
-------- -------- --------
Operating income:
Automotive Components........ $ 23,015 $ 21,859 $ 21,722
Technologies................. 21,169 26,734 27,604
Specialty Publishing......... 4,945 7,299 5,136
Other........................ 1,290 4,748 5,175
Unallocated amounts:
Corporate expenses......... (7,752) (9,138) (9,704)
Significant legal expenses. (1,954) (400) --
Severance and write-downs.. (2,542) -- (1,500)
Merger fees................ (20,890) -- --
-------- -------- --------
Total operating income... 17,281 51,102 48,433
Interest expense............. (29,198) (20,562) (18,378)
Interest income.............. 979 2,837 724
Equity in net income of
Thermalex.................. 2,850 2,647 2,922
Other income, net............ 3,027 794 4,784
-------- -------- --------
Income (loss) from continuing
operations before income
taxes and extraordinary
item..................... $ (5,061) $ 36,818 $ 38,485
-------- -------- --------
Depreciation and amortization
expense:
Automotive Components........ $ 8,508 $ 8,104 $ 5,883
Technologies................. 7,216 6,159 5,531
Specialty Publishing......... 3,319 2,930 2,786
Other........................ 1,044 1,095 1,073
Corporate.................... 72 89 84
-------- -------- --------
Total........................ $ 20,159 $ 18,377 $ 15,357
-------- -------- --------
Capital expenditures:
Automotive Components........ $ 9,132 $10,531 $6,747
Technologies................. 7,926 8,166 9,597
Specialty Publishing......... 2,197 3,161 2,876
Other........................ 850 1,663 700
Corporate.................... 50 62 89
-------- -------- --------
Total........................ $ 20,155 $ 23,583 $ 20,009
-------- -------- --------
F-34
<PAGE>
(18) Segment Data (continued)
A summary of identifiable assets by segment at December 31 follows (in
thousands):
1998 1997
-------- --------
Automotive Components.................... $135,525 $117,602
Technologies............................. 96,742 87,252
Specialty Publishing..................... 42,073 42,767
Other.................................... 17,342 27,245
Corporate................................ 31,344 27,807
-------- --------
Total................................. $323,026 $302,673
======== ========
A summary of long-lived assets by geographic region is as follows (in
thousands):
1998 1997
-------- --------
United States....................... $113,293 $113,322
Germany............................. 15,029 14,057
-------- --------
Total............................. $128,322 $127,379
======== ========
Summary of export sales by geographic region is as follows (in thousands):
1998 1997 1996
------- ------- -------
Europe.................... $22,838 $21,193 $20,584
Asia...................... 8,829 14,007 16,708
Canada.................... 7,692 9,758 7,752
Mexico.................... 3,005 4,292 6,660
Other..................... 4,335 6,155 6,449
------- ------- -------
Total $46,699 $55,405 $58,153
======== ======= =======
Net sales are attributed to countries based on the location of customers.
Major Customers
Revenues from one of the "Big 3" domestic automobile manufacturers
accounted for approximately 9%, 10%, and 10% of the Company's consolidated
revenues for 1998, 1997, and 1996, respectively.
(19) Quarterly Financial Information (unaudited)
A summary of quarterly financial information follows (in thousands):
1998 Dec. 31(1) Sept. 30(2) June 30(3) March 31
- ---- ---------- ----------- ---------- ---------
Sales...................... $113,241 $135,065 $170,018 $117,305
Gross profit............... 25,252 32,873 49,644 28,318
Income (loss) before
extraordinary item....... 650 (12,057) 4,433 2,781
Extraordinary item......... (5,888) -- -- --
-------- -------- -------- --------
Net income (loss).......... $ (5,238) $(12,057) $ 4,433 $ 2,781
======== ======== ======== ========
F-35
<PAGE>
(19) Quarterly Financial Information (unaudited) (continued)
1997 Dec. 31 Sept. 30(4) June 30 March 31(5)
- ---- -------- ----------- -------- -----------
Sales $120,624 $131,394 $169,671 $106,544
Gross profit 29,508 34,269 52,170 26,011
Income from continuing
operations before
extraordinary item 3,531 4,315 11,207 4,361
Discontinued operations -- -- -- 58,958
Extraordinary item -- (728) -- --
-------- -------- -------- --------
Net income $ 3,531 $ 3,587 $ 11,207 $ 63,319
======== ======== ======== ========
- ---------------
(1) Includes a pretax extraordinary loss of $ 9,846,000 related to the
extinguishment of debt.
(2) Includes $19,549,000 of expenses related to the Mergers (See Note 1).
(3) Includes $1,341,000 of expenses related to the Mergers (See Note 1).
(4) Includes a pretax extraordinary loss of $1,193,000 related to the
extinguishment of debt (See Note 7).
(5) Includes a pretax gain on the sale of the Rolodex Business totaling
$95,001,000.
(20) Pro Forma Results of Operations (unaudited)
Set forth below is certain unaudited pro forma condensed consolidated
financial information of the Company based upon historical consolidated
financial statements of the Company that has been adjusted to give effect
to the Refinancing (as defined below), the Mergers, including the Merger
Financing and application of the proceeds thereof (see Note 1). In
addition, the operating results for 1997 have been adjusted to give effect
to the 1997 Transactions. A summary of these adjustments follows.
The Refinancing includes the following transactions: (i) the issuance of
the 12% Notes which generated gross proceeds to the Company of
approximately $120.0 million; (ii) the repurchase of the 10 1/4% Notes at a
purchase price of 101% of principal amount plus accrued and unpaid
interest; (iii) the execution and delivery of the New Credit Facility and
borrowings thereunder to refinance the 1997 Credit Facility and to purchase
the 10 1/4% Notes at a purchase price of 101% of principal amount plus
accrued and unpaid interest; (iv) payment of fees and expenses in
connection with the offering of the Notes, the New Credit Facilities and
the purchase of the 10 1/4% Notes.
The Reorganization Merger was accounted for as a reorganization of entities
under common control, and had no impact on the historical basis of the
assets or liabilities of the Company. The Merger was accounted for as a
recapitalization and had no impact on the historical basis of the assets or
liabilities of the Company.
The Mergers included the following transactions: (i) the issuance of the
Holdings Senior Discount Notes which generated gross proceeds of
approximately $70.2 million, and new borrowings under the Company's 1997
Credit Facility of approximately $43.1 million, of which $26.8 million was
paid as a dividend from the Company to Holdings to fund a portion of the
Merger Consideration; (ii) the initial capitalization of Silkworm through
the issuance of 1,245,138 shares of Silkworm common stock for $56.1 million
and the issuance of 1,400,000 shares of PIK Preferred Stock and warrants to
purchase 65,603 shares of Holdings Common Stock for aggregate consideration
of $35.0 million; (iii) payment of the Merger Consideration for each share
of the Company's common stock outstanding immediately prior to the Mergers
(4,145,372 shares) consisting of $43.48 in cash and 0.03378 of a share of
Holdings; (iv) payment of fees and expenses associated with the issuance of
F-36
<PAGE>
the Holdings Senior Discount Notes, the waiver of certain Events of Default
under the Existing Credit Facility, and the Mergers; and (v) vesting of all
outstanding options and payment of the Option Cash Proceeds (and applicable
withholding taxes) and payments pursuant to employment related agreements.
The 1997 Transactions consisted of the following: (i) the Company entered
into the 1997 Credit Facility on July 3, 1997; (ii) on August 12, 1997, the
Company issued $150 million aggregate principal amount of the 10 1/4%
Notes; (iii) on July 10, 1997, the Company, using the proceeds of its sale
of the Rolodex Business, purchased an aggregate of 2,857,142 shares for
$110 million; and (iv) on August 12, 1997, the Company completed a tender
offer pursuant to which it purchased an additional 2,857,142 shares of
common stock for $110 million. The purchase of shares of common stock of
the Company in the tender offer was paid for with proceeds received
through the issuance by the Company of the 10 1/4% Notes.
The unaudited pro forma condensed consolidated income statements have been
prepared as if the Refinancing, the Mergers and the 1997 Transactions all
occurred on January 1 of the relevant period; however, the expenses
directly related to the aforementioned transactions (other than interest
expense) are excluded from the unaudited pro forma condensed consolidated
income statements. The Unaudited Pro Forma Condensed Consolidated
Financial Data are based on certain assumptions and estimates, and
therefore do not purport to be indicative of the results that would have
been obtained had the transactions been completed as of such dates or
indicative of future results of operations and financial position.
Unaudited Pro Forma Condensed Consolidated Statement of Income
Year Ended December 31, 1998
(In thousands, except per share data)
<TABLE>
Merger Refinancing
Historical Adjustments Adjustments Pro Forma
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Net sales.................................... $535,629 $535,629
Cost of goods sold........................... 383,269 383,269
Depreciation and amortization................ 20,159 20,159
Selling, general and administrative expenses. 114,920 $(20,890)(1) 94,030
-------- -------- --------- --------
Operating income......................... 17,281 20,890 -- 38,171
Interest expense............................. (29,198) (1,955)(2) $ (4,167)(3) (35,320)
Interest income.............................. 979 979
Equity in net income of Thermalex............ 2,850 2,850
Other income, net............................ 3,027 3,027
-------- -------- --------- --------
Income (loss) from continuing operations
before income taxes and extraordinary
item.................................... (5,061) 18,935 (4,167) 9,707
Income tax benefit (expense)................. 868 (6,311)(1)
753 (4) 1,604 (3,086)
-------- -------- --------- --------
Income (loss) from continuing operations
before extraordinary item............... $ (4,193) $ 13,377 $ (2,563) $ 6,621
======== ======== ========= ========
</TABLE>
F-37
<PAGE>
(20) Pro Forma Results of Operations (unaudited) (continued)
Unaudited Pro Forma Condensed Consolidated Statement of Income
Year Ended December 31, 1997
(In thousands, except per share data)
<TABLE>
1997 Merger Refinancing
Historical Transactions Adjustments Adjustments Pro Forma
---------- ------------ ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net sales..................... $528,233 $528,233
Cost of goods sold............ 370,845 370,845
Depreciation and amortization. 18,377 18,377
Selling, general and
administrative expenses....... 87,909 87,909
-------- --------- --------- --------- --------
Operating income.......... 51,102 -- -- 51,102
Interest expense.............. (20,562) $ (8,879)(5) $ (3,128)(2) $ (4,683)(3) (37,252)
Interest income............... 2,837 (2,091)(5) 746
Equity in net income of
Thermalex.................. 2,647 2,647
Other income, net............. 794 794
-------- --------- --------- --------- --------
Income (loss) from
continuing operations
before income taxes..... 36,818 (10,970) (3,128) (4,683) 18,037
Income tax expense............ (13,404) 4,223 (5) 1,204 (4) 1,803 (4) (6,174)
-------- --------- --------- --------- --------
Income (loss) from
continuing operations... $ 23,414 $ (6,747) $ (1,924) $ (2,880) $ 11,863
======== ========= ========= ========= ========
</TABLE>
- ----------
The Notes to the Unaudited Pro Forma Condensed Consolidated Statements of
Income follow:
(1) To exclude nonrecurring Merger expenses and the related income tax
effect recorded in the year ended December 31, 1998.
(2) To record the incremental interest expense of $3.1 million and $2.0
million for the years ended December 31, 1997 and 1998, respectively,
associated with the Company's $43.1 million of additional borrowings
under the 1997 Credit Facility.
(3) To record the net increase in interest expense for the years ended
December 31, 1997 and 1998 as follows: (i) $1.8 million and $1.8
million, respectively, increase in interest expense associated with the
increase in LIBOR spreads from 125 basis points ("bps") under the 1997
Credit Facility to a spread of 375 bps for the Term Loan Facility under
the New Credit Facility and to a spread of 300 bps for the Revolving
Credit Facility and based on an assumed LIBOR rate of 4.98% thereunder
(ii) $3.3 million and $2.9 million increase in interest expense related
to the additional borrowings under the 1997 Revolving Credit Facility,
incurred in connection with the Refinancing, and (iii) $14.4 million
and $12.6 million increase in interest expense relating to the issuance
of the 12% Notes offset by a $15.4 million and $13.6 million reduction
in interest expense relating to the repayment of the 10 1/4% Notes and
the amortization expense relating to the issuance of the 12% Notes and
the New Credit Facility partially offset by a reduction in amortization
expense relating to the repurchase of the 10 1/4% Notes and the 1997
Credit Facility.
(4) To record the tax benefit of the transaction at the statutory rate of
38.5% (35.0% federal rate and an estimated 3.5% average state rate.
(5) To record the effect on interest expense and the related income tax
effect of (i) the purchase on July 10, 1997 of 2,857,142 shares at
$38.50 per share in cash for an aggregate purchase price of $110.0
million, (ii) the entering into of the 1997 Credit Facility on July 3,
1997 and the issuance and sale of $150.0 million aggregate principal
F-38
<PAGE>
amount of the 10 1/4% Notes on August 12, 1997, and (iii) the purchase
on August 12, 1997 of 2,857,142 shares at $38.50 per share in cash for
an aggregate purchase price of $110.0 million, as if the aforementioned
transactions had occurred as of the beginning of the periods presented.
Statutory tax rates used to calculate the income tax effect was 38.5%
(35.0% federal rate and an estimated 3.5% average state rate).
(21) Subsequent Event
On January 25, 1999, the Company purchased the stock of Eyelets for
Industries, Inc. and EFI Metal Forming, Inc., collectively referred to as
EFI, a precision stamping manufacturer for the battery, electrical,
electronic and automotive markets. EFI has operations in Connecticut and
Texas.
The initial purchase price of $23,600,000, including estimated costs
incurred directly related to the transaction, has not yet been allocated
and is pending appraisals of property, plant and equipment, actuarial
valuations of retiree medical benefits, and estimated costs of plans to
exit certain EFI activities. The Company expects to have these items
quantified within one year of the date of acquisition. The acquisition
will be accounted for as a purchase and the Company is currently
determining the appropriate period for amortizing any resulting goodwill
from this transaction. The acquisition did not result in a significant
business combination within the definition provided by the Securities and
Exchange Commission and therefore, pro forma financial information has not
been presented.
F-39
<PAGE>
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA
The Unaudited Pro Forma Condensed Consolidated Financial Data
are based upon historical consolidated financial statements of Insilco as
adjusted to give effect to the Refinancing, the Mergers, including the Merger
Financing and application of the proceeds thereof. In addition, the operating
results for the full year 1997 have been adjusted to give effect to the 1997
Transactions. A summary of these adjustments follows.
The Refinancing includes the following transactions:
o The issuance of the Units which will generate gross proceeds to
Insilco of approximately $120.0 million.
o The repurchase of the 10 1/4% notes at a purchase price of 101% of
principal amount plus accrued and unpaid interest, assuming that all
of the 10 1/4% notes are purchased.
o The execution and delivery of the new credit facility and borrowings
thereunder (i) to refinance the existing credit facility and (ii) to
purchase 10 1/4% notes. See "Risk Factors -- Potential Default under
Existing Credit Facility; Potential Lack of Financing."
o Payment of fees and expenses in connection with the offering of the
notes, the New Credit Facility and the purchase of the 10(1)/(4)%
notes.
The Reorganization Merger was accounted for as a reorganization
of entities under common control, and had no impact on the historical basis of
the assets or liabilities of Holdings or Insilco. The Merger was accounted for
as a recapitalization and had no impact on the historical basis of the assets
or liabilities of Holdings or Insilco.
The Mergers included the following transactions:
o The issuance of units by Silkworm which generated gross proceeds to
Silkworm of approximately $70.2 million, and new borrowings under
Insilco's Existing Credit Facility of approximately $43.1 million, of
which $26.8 million was paid as a dividend from Insilco to
Holdings to fund a portion of the Merger Consideration.
o The initial capitalization of Silkworm through the issuance of
1,245,138 shares of Silkworm common stock for $56.1 million and
the issuance of 1,400,000 shares of PIK Preferred Stock and
warrants to purchase 65,603 shares of Holdings Common Stock for
aggregate consideration of $35.0 million.
o Payment of the Merger Consideration for each share of common stock of
Insilco outstanding immediately prior to the Mergers (4,145,372
shares based on the number of shares outstanding as of June 15,
1998 and assuming no stockholders validly perfect appraisal
rights) consisting of $43.48 in cash and 0.03378 of a share of
Holdings.
o Payment of fees and expenses associated with the issuance of the
Holdings Senior Discount Notes, the waiver of certain Events of
Default under the Existing Credit Facility, and the Mergers.
o Vesting of all outstanding Options and payment of the Option Cash
Proceeds (and applicable withholding taxes) and payments pursuant to
employment related agreements.
The 1997 Transactions consisted of the following:
o Insilco entered into the Existing Credit Facility on July 3, 1997
that, among other things, provided for (i) a $200 million
revolving credit facility, (ii) a $50 million sublimit for
commercial and standby letters of credit and (iii) a $50 million
sublimit for advances in selected foreign currencies.
P-1
<PAGE>
o The issuance of the 10(1)/(4)% notes -- On August 12, 1997,
Insilco issued $150 million aggregate principal amount of the
10 1/4% notes.
o Share Repurchase -- On July 10, 1997, Insilco, using the proceeds
of its sale of the Rolodex Business, purchased an aggregate of
2,857,142 shares for $110 million. On August 12, 1997, Insilco
completed a tender offer pursuant to which it purchased an
additional 2,857,142 shares of common stock of Insilco for $110
million. The purchase of shares of common stock of Insilco in the
tender offer was paid for with proceeds received through the
issuance by Insilco of the 10(1)/(4)% notes.
The unaudited pro forma condensed consolidated income statements have
been prepared as if the Refinancing, the Mergers and the 1997 Transactions
all occurred on January 1 of the relevant period; however, the expenses
directly related to the aforementioned transactions (other than interest
expense) are excluded from the unaudited pro forma condensed consolidated
income statements. The Unaudited Pro Forma Condensed Consolidated
Financial Data are based on certain assumptions and estimates, and
therefore do not purport to be indicative of the results that would have
been obtained had the transactions been completed as of such dates or
indicative of future results of operations and financial position.
P-2
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
Year Ended December 31, 1998
(In thousands, except per share data)
<TABLE>
The Company
-------------------------------------------------------------
Merger Refinancing
Historical Adjustments Adjustments Pro Forma
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Net sales.................................................. $535,629 $535,629
Cost of goods sold......................................... 383,269 383,269
Depreciation and amortization.............................. 20,159 20,159
Selling, general and administrative........................ 114,920 $(20,890)(1) 94,030
-------- -------- -------- --------
Operating income.......................................... 17,281 20,890 -- 38,171
Interest expense:
Currently payable......................................... (27,782) (1,955)(3) $(3,826)(4) (33,563)
Accretion................................................. (147) (147)
Amortization of debt issuance............................. (1,269) (341)(4) (1,610)
Interest income............................................ 979 979
Equity in net income of Thermalex.......................... 2,850 2,850
Other income, net.......................................... 3,027 3,027
-------- -------- -------- --------
Income (loss) before income taxes and extraordinary item.. (5,061) 18,935 (4,167) 9,707
Income tax expense......................................... 868
(6,311)(1)
753 (5) 1,604 (5) (3,086)
-------- -------- -------- --------
Net income (loss) before extraordinary item............... $ (4,193) $ 13,377 $ (2,563) $ $6,621
======== ======== ======== ========
Earnings per common share:
Basic..................................................... NA NA
Basic shares.............................................. NA NA
Diluted................................................... NA NA
Diluted shares............................................ NA NA
</TABLE>
P-3
<PAGE>
INSILCO CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
Year Ended December 31, 1997
(in thousands, except per share data)
<TABLE>
The Company
--------------------------------------------------------------------------------
1997 Merger Refinancing
Historical Transactions Adjustments Adjustments Pro Forma
---------- ----------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net sales...................................... $528,233 $528,233
Cost of goods sold............................. 370,845 370,845
Depreciation and amortization.................. 18,377 18,377
Selling, general and administrative............ 87,909 87,909
-------- -------- -------- -------- --------
Operating income............................... 51,102 -- -- -- 51,102
Interest expense:
Currently payable........................ (19,326) $ (8,634)(2) $ (3,128)(3) $ (4,105)(4) (35,193)
Accretion................................ (204) (204)
Amortization of debt issuance............ (1,032) (245)(2) (578)(4) (1,855)
Interest income................................ 2,837 (2,091)(2) 746
Equity in net income of Thermalex.............. 2,647 2,647
Other income, net.............................. 794 794
-------- -------- -------- -------- --------
Income from continuing operations before
income taxes and extraordinary item.... 36,818 (10,970) (3,128) (4,683) 18,037
Income tax expense............................. (13,404) 4,223 (2) 1,204 (5) 1,803 (5) (6,174)
-------- -------- -------- -------- --------
Income from continuing operations before
extraordinary item..................... $ 23,414 $ (6,747) $ (1,924) $ (2,880) $ 11,863
======== ======== ======== ======== ========
Earnings (loss) from continuing operations per
common share before extraordinary item:
Basic.................................... $ 3.25 NA
Basic shares............................. 7,200 NA
Diluted.................................. $ 3.19 NA
Diluted shares........................... 7,345 NA
</TABLE>
- ---------------
The notes to the Unaudited Pro Forma Condensed Consolidated Income Statements
for the years ended December 31, 1997 and 1998 follow:
(1) To exclude non-recurring Merger expenses and the related income tax effect
recorded for the year ended December 31, 1998.
(2) To record the effect on interest expense and the related income tax effect
of (i) the purchase on July 10, 1997 of 2,857,142 shares at $38.50 per
share in cash for an aggregate purchase price of $110.0 million, (ii) the
entering into of the Existing Credit Facility on July 3, 1997 and the
issuance and sale of $150.0 million aggregate principal amount of the
10(1)/(4)% Notes on August 12, 1997, and (iii) the purchase on August 12,
1997 of 2,857,142 shares at $38.50 per share in cash for an aggregate
purchase price of $110.0 million, as if the aforementioned transactions had
occurred as of the beginning of the periods presented. Statutory tax rates
used to calculate the income tax effect was 38.5% (35.0% federal rate and
an estimated 3.5% average state rate).
(3) To record the incremental interest expense for the years ended December
31, 1997 and 1998 of $3.1 million and $2.0 million, respectively,
associated with the Company's $43.1 million of additional borrowings under
the Credit Facility.
(4) To record the net increase in interest expense for the years ended
December 31, 1997 and 1998 as follows: (i) $1.8 million and $1.8 million
increase in interest expense associated with the increase in LIBOR spreads
from 125 bps under the Existing Credit Facility to a spread of 375 bps for
the Term Loan Facility under the new credit facility and to a spread of 300
bps for the Revolving Credit Facility and based on an assumed LIBOR rate of
4.98% thereunder, (ii) $3.3 million and $2.9 million increase in interest
expense related to the additional borrowings under the existing Revolving
Credit Facility, incurred in connection with the Refinancing, (iii) $14.4
P-4
<PAGE>
million and $12.6 million increase in interest expense relating to the
issuance of the Notes at a rate of 12.0%, offset by a $15.4 million and
$13.6 million reduction in interest expense relating to the repayment of
the 10(1)/(4)% Notes and the amortization expense relating to the issuance
of the Notes and the new credit facility partially offset by a reduction
in amortization expense relating to the repurchase of the 10(1)/(4)% Notes
and the Existing Credit Facility. A one-quarter of one percent change in
interest rates would impact interest expense for borrowings under the new
credit facility for both years ended December 31, 1997 and 1998 in the
amount of approximately $0.5 million. A one-eighth of one percent change
in interest rates would impact interest expense for indebtedness relating
to the Notes for both years ended December 31, 1997 and 1998 in the amount
of approximately $0.2 million.
(5) To record the tax benefit of the transaction at the statutory rate of
38.5% (35.0% federal rate and an estimated 3.5% average state rate).
P-5
<PAGE>
<TABLE>
<S> <C>
================================================================ ===============================================================
You should rely only on the information
contained in this document or that we have referred
you to. We have not authorized anyone to provide you
with information that is different. We are not making
an offer of these securities in any state where the offer $120,000,000
is not permitted. You should not assume that the
information in this prospectus or any prospectus
supplement is accurate as of any date other than the Insilco Corporation
date on the front of those documents.
12% Series B Senior Subordinated Notes due
2007
TABLE OF CONTENTS
Page
----
Prospectus Summary............................... 1 ---------------
Risk Factors..................................... 14 Prospectus
Use of Proceeds.................................. 23 ---------------
Capitalization................................... 24
Selected Historical Financial Information....... 25
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ...................................... 26
Business......................................... 36
Management....................................... 50
Executive Compensation........................... 51
Security Ownership of Certain Beneficial
Owners and Management............................ 55
Certain Relationships and Related Party
Transactions..................................... 57
Description of Certain Indebtedness.............. 59
The Exchange Offer............................... 63
Description of Notes............................. 97
United States Federal Income Tax
Consequences of the Exchange Offer............... 104
Plan of Distribution............................. 104
Legal Matters.................................... 104
Independent Public Accountants................... 104
Available Information............................ 104
Index to Unaudited Pro Forma , 1999
Consolidated Financial Data...................... P-1
Index to Financial Statements.................... F-1
================================================================ ===============================================================
</TABLE>
<PAGE>
The information contained in this prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
[ALTERNATE FRONT COVER FOR MARKET-MAKING PROSPECTUS]
SUBJECT TO COMPLETION, DATED APRIL 7, 1999
PROSPECTUS
INSILCO CORPORATION
12% Series B Senior Subordinated Notes due 2007
-----------------------
The Company
o We produce automotive, telecommunications and electronics components and
are a leading specialty publisher of high school yearbooks.
The Original Offering:
o We issued the notes in a private offering on November 9, 1998.
o We used the proceeds from the notes to repurchase a portion of our existing
debt. DLJ Merchant Banking Partners II, L.P. and related funds and entities
acquired a controlling stake in our company in August, and a portion of our
existing debt required us to offer to repurchase such debt in the event of
such a change of control.
The Notes:
o Maturity: August 15, 2007
o Interest Payment: semi-annually on February 15 and August 15, commencing on
February 15, 1999.
o Optional Redemption: The notes will be redeemable on or after August 15,
2002 at the prices state herein.
o Mandatory Redemption: We also have the right to redeem, and you have the
right to require us to purchase, the notes upon the occurrence of certain
change of control events, at the prices set forth herein.
o Ranking of Notes: The notes are general unsecured obligations, subordinated
to all of our senior obligations, including any borrowings under our bank
credit facility. The notes rank senior to all subordinated indebtedness.
The notes will effectively rank junior to all liabilities of our
subsidiaries that are not guarantors.
o Subsidiary Guarantees: All of our wholly owned domestic subsidiaries have
fully and unconditionally guaranteed the notes. The guarantees are general
unsecured obligations of the guarantors, subordinated to all senior
obligations and senior to all subordinated obligations.
o On December 31, 1998, Insilco and the guarantors had outstanding
approximately $191.9 million of senior indebtedness, and our subsidiaries
that are not guarantors had approximately $24.5 million of outstanding
liabilities, including trade payables.
This investment involves risks. See "Risk Factors" beginning on page 14.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
This prospectus will be used by Donaldson, Lufkin & Jenrette Securities
Corporation in connection with offers and sales in market-making transactions at
negotiated prices related to prevailing market prices. There is currently no
public market for the notes. We do not intend to list the notes on any
securities exchange. Donaldson, Lufkin & Jenrette Securities Corporation has
advised us that it is currently making a market in the notes; however, it is not
obligated to do so and may stop at any time. Donaldson, Lufkin & Jenrette
Securities Corporation may act as principal or agent in any such transaction. We
will not receive the proceeds of the sale of the notes but will bear the
expenses of registration.
- --------------------------------------------------------------------------------
Donaldson, Lufkin & Jenrette
The date of this Prospectus is , 1999.
<PAGE>
[ALTERNATE SECTIONS FOR MARKET-MAKING PROSPECTUS]
Trading Market for the Notes
There is no existing trading market for the notes, and we cannot assure you
about the future development of a market for the notes or your ability to sell
their New Notes or the price at which you may be able to sell your notes. If
such market were to develop, the notes could trade at prices that may be higher
or lower than their initial offering price depending on many factors, including
prevailing interest rates, our operating results and the market for similar
securities. Although it is not obligated to do so, DLJSC intends to make a
market in the notes. Any such market-making activity may be discontinued at any
time, for any reason, without notice at the sole discretion of DLJSC. No
assurance can be given as to the liquidity of or the trading market for the
notes.
DLJSC may be deemed to be our "affiliate" (as defined the Securities Act)
and, as such, may be required to deliver a prospectus in connection with its
market-making activities in the notes. Pursuant to the registration rights
agreement that we signed with DLJSC in connection with the initial sale of the
notes, we have agreed to use our best efforts to file and maintain a
registration statement that would allow DLJSC to engage in market-making
transactions in the notes for up to 90 days from the date on which we consummate
the offer to exchange the notes for the Old Notes. We have agreed to bear
substantially all the costs and expenses related to registration.
USE OF PROCEEDS
This prospectus is delivered in connection with the sale of the notes by
DLJSC in market-making transactions. We will not receive any of the proceeds
from such transactions.
PLAN OF DISTRIBUTION
This prospectus is to be used by DLJSC in connection with offers and sales
of the New Notes in market-making transactions effected from time to time. DLJSC
may act as a principal or agent in such transactions, including as agent for the
counterparty when acting as principal or as agent for both counterparties, and
may receive compensation in the form of discounts and commissions, including
from both counterparties when it acts as agent for both. Such sales will be made
at prevailing market prices at the time of sale, at prices related thereto or at
negotiated prices.
DLJMB, an affiliate of DLJSC, and certain of its affiliates beneficially
own approximately 69.0% of the common stock of Holdings. Thompson Dean and
William F. Dawson, Jr. each of whom is a principal of DLJMB, are members of the
board of directors of Holdings and Insilco. Further, DLJ Capital Funding, Inc.,
an affiliate of DLJSC, acted as syndication agent in connection with the new
credit facility for which it received certain customary fees and expenses and
DLJ Bridge Finance Inc., an affiliate of DLJSC, purchased the Bridge Notes, for
which it received customary fees and expenses. DLJSC has, from time to time,
provided investment banking and other financial advisory services to Insilco in
the past for which it has received customary compensation, and will provide such
services and financial advisory services to Insilco in the future. DLJSC acted
as purchaser in connection with the initial sale of the Old Notes and received
an underwriting discount of approximately $3.6 million in connection therewith.
In addition, DLJSC received a merger advisory fee of $3.5 million in cash from
Holdings after the consummation of the Merger. See "Certain Relationships and
Related Transactions."
DLJSC has informed Insilco that it does not intend to confirm sales of the
New Notes to any accounts over which it exercises discretionary authority
without the prior specific written approval of such transactions by the
customer.
<PAGE>
Insilco has been advised by DLJSC that, subject to applicable laws and
regulations, DLJSC currently intends to make a market in the New Notes following
completion of the Exchange Offer. However, DLJSC is not obligated to do so and
any such market-making may be interrupted or discontinued at any time without
notice. In addition, such market-making activity will be subject to the limits
imposed by the Securities Act and the Exchange Act. There can be no assurance
that an active trading market will develop or be sustained. See "Risk
Factors--Trading Market for the New Notes."
DLJSC and Insilco have entered into the Registration Rights Agreement with
respect to the use by DLJSC of this prospectus. Pursuant to such agreement,
Insilco agreed to bear all registration expenses incurred under such agreement,
and Insilco agreed to indemnify DLJSC against certain liabilities, including
liabilities under the Securities Act.
<PAGE>
[BACK COVER FOR MARKET-MAKING PROSPECTUS]
You should rely only on the information contained in this document or that
we have referred you to. We have not authorized anyone to provide you with
information that is different. We are not making an offer of these securities in
any state where the offer is not permitted. You should not assume that the
information in this prospectus or any prospectus supplement is accurate as of
any date other than the date on the front of those documents.
----------------------
TABLE OF CONTENTS
Page
-----
Prospectus Summary..................................1
Risk Factors.......................................14
Use of Proceeds....................................23
Capitalization.....................................24
Selected Consolidated Financial Data...............25
Management's Discussion and Analysis of
Financial Condition and Results of
Operations .....................................26
Business...........................................36
Management.........................................50
Executive Compensation.............................51
Security Ownership of Certain Beneficial Owners
and Management..................................55
Certain Relationships and Related Party
Transactions....................................57
Description of Certain Indebtedness................59
Description of Notes...............................63
Plan of Distribution..............................104
Legal Matters.....................................104
Independent Public Accountants....................104
Index to Consolidated Financial Statements........F-1
Index to Unaudited Pro Forma Condensed
Consolidated Financial Data...................P-1
================================================================================
$120,000,000
Insilco Corporation
12% Series B Senior Subordinated
Notes due 2007
------------------------------------
Prospectus
------------------------------------
Donaldson, Lufkin & Jenrette
, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all estimated expenses incurred or
expected to be incurred by the Registrant in connection with the issuance and
distribution of the securities being registered hereby, other than underwriting
discounts and commissions.
Item Amount
- ---- ------
SEC Registration Fee $ 33,360
Printing and Engraving Costs 20,000
Trustee Fees 3,500
Legal Fees and Expenses 25,000
Accounting Fees and Expenses 50,000
--------
Total $131,860
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify any of its directors or officers who was or is a party, or is
threatened to be made a party to any third party proceeding by reason of the
fact that such person is or was a director or officer of the corporation,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding, if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reason to believe that such person's conduct was unlawful. In
a derivative action, i.e., one by or in the right of the corporation, the
corporation is permitted to indemnify directors and officers against expenses
(including attorneys' fees) actually and reasonably incurred by them in
connection with the defense or settlement of an action or suit if they acted in
good faith and in a manner the person reasonably believed to be in or not
opposed to the best interests of the corporation and except that no
indemnification shall be made if such person shall have been adjudged liable to
the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
directors or officers are fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability. Article Seventh of Insilco's
Certificate of Incorporation provides for full indemnification of its officers,
directors, employees and agents to the extent permitted by Section 145.
Insilco provides insurance from commercial carriers against certain
liabilities incurred by the directors and officers of Insilco.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
On November 9, 1998, the Registrant sold 120,000 units (the "Units"), each
consisting of $1,000 principal amount of its 12% Senior Subordinated Notes due
2007 (the "Old Notes") and one warrant to purchase 0.52 of a Share of Holdings
Common Stock, par value $0.01 per share, at an initial exercise price of $45.00
per share (the "warrants"), to Donaldson, Lufkin & Jenrette Securities
Corporation (the "Initial Purchaser") in a private placement in reliance on
Section 4(2) under the Securities Act, at a price equal to $970.00 per unit. The
Old Notes and warrants were immediately resold by the Initial Purchaser in
transactions not involving a public offering.
II-1
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
Exhibit
Number
- -----------
1.1 Registration Rights Agreement dated as of November 9,
1998 between Insilco and Donaldson, Lufkin & Jenrette
Securities Corporation, as Initial Purchaser
(incorporated by reference to Exhibit 4(b) to Form 10-Q
filed by Insilco on 16th November, 1998).
2.1 Agreement and Plan of Merger, dated as of March 24,
1998, among Insilco, INR Holding Co., and Silkworm
Acquisition Corporation (incorporated by reference to
Exhibit 10(n) to the Registration Statement on Form S-4
(Reg. No. 333-51145) of Insilco).
2.2 Amendment No. 1 to the Agreement and Plan of Merger,
dated June 8, 1998, among Insilco, INR Holding Co. and
Silkworm Acquisition Corporation (incorporated by
reference Exhibit 10(r) to the Registration Statement
on Form S-4 (Reg. No. 333-51145) of Insilco).
3.1.1 Certificate of Incorporation (incorporated by reference
to Exhibit 3.1 to the Current Report on Form 8-K filed
by Insilco on August 18, 1998).
3.1.2 By laws (incorporated by reference to Exhibit 3.2 to
the Current Report on Form 8-K filed by Insilco on
August 18, 1998).
3.2.1* Charter -- Guarantors
3.2.2* Bylaws -- Guarantors
4.1 Investors' Agreement, dated as of August 17, 1998,
among Insilco Holding Co. and the investors named
therein (incorporated by reference to Exhibit 4.5 to
the Registration Statement on Form S-1 (Reg. No.
333-65039) of Insilco Holding Co.)
4.2 Indenture, dated as of November 9, 1998 between Insilco
and the Trustee (incorporated by reference to Exhibit
4(a) to the Form 10-Q filed by Insilco on 16th
November, 1998).
4.3** First Supplemental Indenture, dated as of December 21,
1998 between Insilco and the Trustee.
4.4* Second Supplemental Indenture dated as of January 25,
1999 between Insilco and the Trustee
5.1** Opinion of Davis Polk & Wardwell with respect to the
new notes.
5.2* Opinion of Kenneth H. Koch with respect to the
guarantees.
Insilco Holding Co. Direct Investment Program
10.1 (incorporated by reference to Exhibit 4(c) to the
Registration Statement on Form S-8 (File No.
333-61809)).
10.2 Insilco Holding Co. Stock Option Plan (incorporated by
reference to Exhibit 4(d) to the Registration Statement
on Form S-8 (File No. 333-61809)).
10.3 Insilco Holding Co. and Insilco Corporation Equity Unit
Plan (incorporated by reference to Exhibit 4(c) to the
Registration Statement on Form S-8 (File No.
333-61811)).
10.4* Credit Agreement among Insilco and a syndicate of banks
and other financial institutions led by Donaldson,
Lufkin & Jenrette Securities Corporation, DLJ Capital
Funding and The First National Bank of Chicago.
10.5 Purchase Agreement between Insilco Corporation, Insilco
Holding Co. and Donaldson, Lufkin & Jenrette Securities
Corporation, as Initial Purchaser (incorporated by
reference to Exhibit 10(a) to Form 10-Q filed by
Insilco on 16th November, 1998)
12.1* Computation of Ratio of Earnings to Fixed Charges
21.1** Subsidiaries of Insilco
23.1** Consent of Davis Polk & Wardwell (contained in their opinion
filed as Exhibit 5.1).
23.2* Consent of KPMG LLP.
24.1** Power of Attorney
25.1** Statement of Eligibility of Star Bank, N.A. on Form T-1.
99.1* Form of Letter of Transmittal
99.2* Form of Notice of Guaranteed Delivery
99.3* Form of Letter to Clients
99.4* Form of Letter to Nominees
99.5* Form of Instructions to Registered Holder and/or Book-Entry
Transfer Participant from Owner
- -------------------
* Filed herewith
** Previously filed.
(b) Financial Statement Schedules.
Schedule II--Valuation and Qualifying Accounts.
II-2
<PAGE>
Schedules not listed above have been omitted because the
information required to be set forth therein is not applicable or
is shown on the financial statements or notes thereto.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective
date of the Registration Statement (or
the most recent post-effective amendment
thereof) which, individually or in the
aggregate, represent a fundamental
change in the information set forth in
the Registration Statement.
Notwithstanding the foregoing, any
increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not
exceed that which was registered) and
any deviation from the low or high end
of the estimated maximum offering range
may be reflected in the form of
prospectus filed with the SEC pursuant
to Rule 424(b) under the Securities Act
of 1933 if, in the aggregate, the
changes in volume and price represent no
more than a 20% change in the maximum
aggregate offering price set forth in
the "Calculation of Registration Fee"
table in the effective registration
statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona
fide offering thereof.
(b) (1) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(2) The undersigned registrant hereby undertakes as follows:
that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of
the applicable form.
(c) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-3
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Insilco pursuant to the provisions described in Item 15, or otherwise, Insilco
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by Insilco of expenses incurred or paid
by a director, officer or controlling person of Insilco in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered,
Insilco will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dublin, State of Ohio, on the 6th day
of April, 1999.
INSILCO CORPORATION
By: *
---------------------------------
Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Chairman and Chief Executive Officer April 6, 1999
- ------------------------------------ (Principal Executive Officer)
Robert L. Smialek
* Vice President and Chief Financial Officer April 6, 1999
- ------------------------------------ (Principal Financial Officer)
David A. Kauer
* Vice President and Controller April 6, 1999
- ------------------------------------ (Principal Accounting Officer)
Michael R. Elia
*
- ------------------------------------ Director April 6, 1999
William F. Dawson
*
- ------------------------------------ Director April 6, 1999
Thompson Dean
</TABLE>
*By: /s/ Kenneth H. Koch
------------------------------------
Kenneth H. Koch, Attorney-in-fact,
pursuant to powers of attorney
previously filed as part of this
registration statement.
II-5
Vol. 1129 1549
SCHEDULE I TO THE
CERTIFICATE AMENDING AND RESTATING
THE
CERTIFICATE OF INCORPORATION
OF
EYELETS FOR INDUSTRY, INC.
FIRST: The name of the Corporation is Eyelets for Industry, Inc.
SECOND: The nature of the business to be transacted, and the purposes to
be promoted or carried out by the Corporation are as follows:
To engage in any lawful acts or activities for which corporations may
be formed under Chapter 599 (Stock Corporations) of the Connecticut
General Statutes, Revision of 1958, as amended and as it may be
amended, including but not limited to the manufacture of metal
eyelets.
THIRD: The designation of each class of shares, the authorized number of
shares of each such class, and the par value of each share thereof, are as
follows:
5,000 shares of no par common stock (the "Common Stock").
450 shares of nonvoting, convertible preferred stock, $1000 par value
per share (the "Nonvoting, Convertible Preferred Stock, Series A").
Vol. 1129 1550
FOURTH: The terms, limitations and relative rights and preferences of each
class of shares and series thereof (if any), or an express grant of authority
to the board of directors pursuant to Section 33-341, 1959 Supp. Conn. G.S.,
are as follows:
1. Common Stock
(a) Voting. The voting power of the Corporation shall be vested in the
Common Stock of the Corporation. Each share of Common Stock shall have one
vote. The holders of record of shares of Common Stock shall be entitled to vote
with respect to all matters to be voted on by the stockholders of the
Corporation.
(b) Dividends. Subject to the rights of the Nonvoting, Convertible
Preferred Stock, Series A, and except as otherwise provided by the laws of the
State of Connecticut, the holders of record of shares of Common Stock shall
share ratably inter se in all dividends and other distributions declared or
made with respect to the Common Stock, whether in respect of a liquidation or
dissolution
[Seal]
1
<PAGE>
(voluntary or involuntary) or otherwise. The holders of shares of Common Stock
shall be entitled to receive, but only when and as declared by the Board of
Directors out of funds legally available for the declaration and payment of
dividends, such dividends as may be declared with respect to Common Stock from
time to time by the Board of Directors.
(c) Liquidation. In the event of any liquidation, dissolution, or winding
up of the affairs of the Corporation, whether voluntary or involuntary after
payment or provision for payment of the debts and other liabilities of the
Corporation and the preferential amounts to which the holders of the Nonvoting,
Convertible Preferred Stock, Series A, shall be entitled upon liquidation, the
holders of shares of Common Stock shall be entitled to receive, but only when
and as declared by the Board of Directors out of funds legally available for
the payment of liquidation proceeds, such amount of liquidation proceeds as may
be declared with respect to Common Stock from time to time by the Board of
Directors, subject to the rights of the Nonvoting, Convertible Preferred Stock,
Series A. The holders of record of shares of Common Stock shall share ratably
inter se in all liquidation proceeds declared and other distributions declared
or made with respect to Common Stock, whether in respect of a liquidation or
dissolution (voluntary or involuntary) or otherwise.
2. Nonvoting, Convertible Preferred Stock, Series A
(a) Voting. Except as otherwise required by the laws of the State of
Connecticut, the holders of shares of Nonvoting, Convertible Preferred Stock
Series A, shall have no right to vote with respect to any matters to be voted
on by the stockholders of the Corporation, nor to take any action in meetings
with respect to any such matters.
(b) Dividends. The holders of record of shares of the Nonvoting,
Convertible Preferred Stock, Series A, shall be entitled to receive cash
dividends at the annual rate of eight (8) percent of the par value per share of
Nonvoting, Convertible Preferred Stock, Series A, from and after the first day
following the end of the fifth anniversary from the date of issuance of the
Nonvoting, Convertible Preferred Stock, Series A, of the Corporation. When
dividends become payable, the Board of Directors of the Corporation shall
declare such dividends and cause them to be paid, to the full extent of any
funds legally available therefor, on a quarterly basis not later than the
fifteenth day of the second month in each fiscal quarter, or at the option of
the Board of Directors, the Corporation may elect to accrue dividends when due
and any dividends not so declared and paid (whether or not funds are then
legally available for payment thereof) shall accrue. If payment of dividends is
not made quarterly, the Corporation shall notify the Nonvoting, Convertible
Preferred Stock, Series A,
[Seal]
2
<PAGE>
holders of nonpayment. So long as any shares of the Nonvoting, Convertible
Preferred Stock, Series A, are outstanding, the Corporation shall not declare,
pay or set apart any dividend on the Common Stock or declare, make or set apart
any distribution on the Common Stock unless concurrently therewith all accrued
dividends or distributions on the Nonvoting, Convertible Preferred Stock,
Series A, through the date of such declaration, payment, making or setting
apart of any dividend or distribution on the Common Stock, are declared, paid,
made or set apart, as the case may be. All accrued dividends shall be due and
payable in full on redemption or conversion as hereinafter provided in
subsections (c) and (d) hereof. All dividends on the called Nonvoting,
Convertible Preferred Stock, Series A, shall cease to accrue from and after the
redemption date.
(c) Redemption. (i) The shares of Nonvoting, Convertible Preferred Stock,
Series A, are redeemable by the Corporation, as hereinafter provided, upon
payment of the $1000 par value per share of the Nonvoting, Convertible
Preferred Stock, Series A, to be redeemed. (ii) If the Board of Directors of
the Corporation declares a redemption of all (but not less than all) of the
issued Nonvoting, Convertible Preferred Stock, Series A, anytime after issuance
of the Nonvoting, Convertible Preferred Stock, Series A, by the Corporation,
all holders of such stock, upon written notice or notices by the Corporation to
such shareholder(s), which notices shall be at least 30 but not more than 60
days prior to redemption, shall be required to immediately sell and the
Corporation shall redeem for cash all of the shares of Nonvoting, Convertible
Preferred Stock, Series A, held by such shareholder(s) at par value plus the
amount of any accrued and unpaid dividends. (iii) If the Board of Directors
fails to redeem the Nonvoting, Convertible Preferred Stock, Series A, prior to
the tenth anniversary from the date of the issuance of such stock, then and
only then, the holders of 66-2/3% of all of such stock may require the
Corporation to redeem the Nonvoting, Convertible Preferred Stock, Series A, in
which event the Corporation shall redeem the entire class of the Nonvoting,
Convertible Preferred Stock, Series A, at par value and pay all accrued
dividends. (iv) Shares of Nonvoting, Convertible Preferred Stock, Series A,
which are redeemed shall be canceled or retired and no shares shall be issued
in place thereof. The redemption price provided for herein shall be equitably
adjusted to reflect any stock dividend, combination or split-up with respect to
the Nonvoting, Convertible Preferred Stock, Series A. (v) On the redemption
date, each holder of shares of the Nonvoting, Convertible Preferred Stock,
Series A, shall deliver to the Corporation during regular business hours, at
the principal office of the Corporation or at such other place as may be
designated by the Corporation, the certificate or certificates for the shares
redeemed, duly endorsed or assigned in blank or to the Corporation (if
requested by it), accompanied by written notice stating the name or names (with
address or addresses) in which the payment for the Nonvoting, Convertible
Preferred Stock, Series A, are to be issued. As promptly as practicable
thereafter the Corporation,
[Seal]
3
<PAGE>
at its expense, shall issue and deliver to or upon the written order of such
holder, at such office or other place designated by the Corporation, a check in
payment for the number of Nonvoting, Convertible Preferred Stock, Series A, in
an amount to which such holder is entitled.
(d) Convertibility.
(i) Not less than all of issued and outstanding shares of Nonvoting,
Convertible Preferred Stock, Series A, shall be convertible, at any time, by
the holders of all of the Nonvoting, Convertible Preferred Stock, Series A,
into Common Stock for that number of fully paid and nonassessable shares of
Common Stock as shall equal ten (10) percent of the issued and outstanding
Common Stock after conversion. As a further explanation of the conversion
rights, the Nonvoting, Convertible Preferred Stock, Series A, stockholders
shall be entitled to be issued the number of shares of Common Stock resulting
from the use of the following formula, where y equals the number of shares of
Common Stock issued and outstanding prior to conversion and x equals the number
of shares to be issued on conversion:
x = .10y
.9
(ii) The shares of Nonvoting, Convertible Preferred Stock, Series A, shall
be convertible on a voluntary basis upon the receipt by the Corporation of a
written request or requests of the holders of record of all of the shares of
Nonvoting, Convertible Preferred Stock, Series A, then outstanding. All shares
of Nonvoting, Convertible Preferred Stock, Series A, then outstanding shall be
converted. Conversion shall be deemed to have been effected on the date of
receipt by the Corporation of such request or requests (the "Conversion Date").
On or following the Conversion Date, each holder of shares of the
Nonvoting, Convertible Preferred Stock, Series A, shall deliver to the
Corporation during regular business hours, at the principal office of the
Corporation or at such other place as may be designated by the Corporation, the
certificate or certificates for the shares converted, duly endorsed or assigned
in blank or to the Corporation (if required by it), accompanied by written
notice stating the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock are to be issued. As
promptly as practicable thereafter the Corporation, at its expense, shall issue
and deliver to or upon the written order of such holder, at such office or
other place designated by the Corporation, a certificate or certificates for
the number of whole shares of Common Stock to which such holder is entitled and
a check or cash in respect of any fractional interest in any share of Common
Stock. The person in whose name the certificate or certificates
[Seal]
4
<PAGE>
for shares of Common Stock are to be issued shall be deemed to have become a
stockholder of record on the Conversion Date, unless the transfer books of the
Corporation are closed on that date, in which event we shall be deemed to have
become a stockholder of record on the next succeeding date on which the
transfer books are open, but the conversion price shall be that in effect on
the Conversion Date. The Corporation shall make payment on account of any
accrued and unpaid dividends, including dividends for the then current quarter,
through the Conversion Date, on the shares of all Nonvoting, Convertible
Preferred Stock, Series A, surrendered for conversion and all such dividends
shall constitute a debt of the Corporation payable to the converting
shareholder, and no dividend or other distribution shall be declared, paid
upon, set apart or made in respect of the Common Stock until such debt shall be
fully paid or sufficient funds set apart for the payment thereof. Upon
conversion of the Nonvoting, Convertible Preferred Stock, Series A, no
allowance shall be made for dividends on such stock converted, and all rights
to dividends, if any, shall cease upon conversion, except those granted to
holders of Common Stock.
(e) Liquidation. Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Nonvoting,
Convertible Preferred Stock, Series A, shall be entitled, before any
distribution or payment is made upon any shares of Common Stock, to be paid an
amount equal to $1000 per share, plus an amount equal to all accrued and unpaid
accumulated dividends due thereon, if any, through the date of such payment to
the holders of the Nonvoting, Convertible Preferred Stock, Series A, and the
holders of the Nonvoting, Convertible Preferred Stock, Series A, shall not be
entitled to any further distribution of assets. Upon any such liquidation,
dissolution or winding up, after the holders of the Nonvoting, Convertible
Preferred Stock, Series A, shall have been paid in full the amount to which
they shall be entitled hereunder, the remaining net assets of the Corporation
may be distributed to the holders of the Common Stock. If upon any dissolution,
liquidation or winding up of the Corporation the net assets available for
distribution to the Corporation's stockholders shall be insufficient to permit
payment to the holders of the Nonvoting, Convertible Preferred Stock, Series A,
of the amount distributable as aforesaid, the entire assets of the Corporation
to be so distributed shall be distributed ratably among the holders of the
Nonvoting, Convertible Preferred Stock, Series A. Written notice of such
liquidation, dissolution or winding up, setting a payment date, the amount of
the payment to holders of the Nonvoting, Convertible Preferred Stock, Series A,
and the place where said amount shall be payable shall be given not less than
thirty (30) days prior to the payment date stated therein, to each holder of
record of the Nonvoting, Convertible Preferred Stock, Series A. A
consolidation, merger, sale of assets or the reduction of capital stock of the
Corporation shall not be deemed to be a liquidation, dissolution or winding up
of the Corporation within the meaning of this paragraph. The
[Seal]
5
<PAGE>
liquidation preference provided for herein with respect to the Nonvoting,
Convertible Preferred Stock, Series A, shall be equitably adjusted to reflect
any stock dividend, combination or split-up with respect to the Nonvoting,
Convertible Preferred Stock, Series A.
FIFTH: The minimum amount of stated capital with which the Corporation
shall commence business is One Thousand Dollars ($1,000).
SIXTH: Other Provisions:
1. Indemnification. The Corporation, to the full extent permitted by
Sections 33-320(a) and 33-321 of the General Corporation Laws of the State of
Connecticut, shall indemnify all persons whom it may indemnify under those
Sections. Such indemnification shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors, or otherwise.
2. Amendment, Alteration, Change or Repeal of this Certificate. The
Corporation reserves the right by majority action of its Board of Directors to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
3. No Preemptive Rights. No shares of any type or class of convertible
securities, warrants, rights, or options to acquire shares shall be subject to
preemptive rights, it being the intent hereby to deny preemptive rights for all
shares and securities which the Corporation may from time to time issue.
SEVENTH: That the duration of the Corporation is unlimited.
Dated at Hartford, Connecticut, this 13th day of December, 1988.
I hereby declare, under the penalties of false statement, that the
statements in the foregoing certificate are true.
/s/ Paula G. Pressman
----------------------------------------
Paula Gelbard Pressman
Incorporator
6
<PAGE>
STATE OF CONNECTICUT )
) SS: HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand, and affixed the Seal of said
State, at Hartford, this 2nd day of March A.D. 1999
--- ----- --
/s/ Susan Bysiewicz
- -------------------------------
SECRETARY OF THE STATE
<PAGE>
3057
Vol. 1259
SCHEDULE A
CERTIFICATE OF AMENDMENT OF THE
CERTIFICATE OF INCORPORATION OF
EYELETS FOR INDUSTRY, INC.
Eyelets For Industry, Inc., a corporation organized and existing under
the laws of the State of Connecticut (the "Corporation"), hereby certifies as
follows:
1. That Article THIRD of the Certificate of Incorporation of the
Corporation be amended to read in its entirety as follows:
"THIRD: The designation of each class of shares, the authorized number of
shares of each such class, and the par value (if any) of each share thereof is
as follows:
40,000 shares consisting of 20,000 shares of Class A Common Stock,
$.01 par value per share ("Class A Common Stock") and
20,000 shares of Class B Common Stock, $.01 par value per share
("Class B Common Stock")
The Class A Common Stock and Class B Common Stock are sometimes
collectively referred to herein as "Common Stock"."
2. That Article FOURTH of the Certificate of Incorporation of the
Corporation be amended to read in its entirety as follows:
"FOURTH: The terms, limitations and relative rights and preferences of
each class of shares and series thereof (if any), or an express grant of
authority to the board of directors pursuant to Section 33-341, 1959 Supp. Conn.
G.S., are as follows:
(a) Voting Rights. (1) The holders of Class A Common Stock shall be
entitled to vote on each matter on which the stockholders of the Corporation
shall be entitled to vote, and each holder of Class A Common Stock shall be
entitled to one vote for each share of such stock held by such holder.
(2) The holders of Class B Common Stock shall not have any voting rights,
except as otherwise required by applicable law, in which case holders of Class
B Common Stock shall vote (at the rate of one vote per share of Class B Common
Stock held) with holders of Class B Common Stock as a single class on such
matter unless otherwise required by law.
[Seal]
SSMWB/3795
<PAGE>
3058
Vol. 1259
The number of authorized shares of Class B Common Stock may be increased
or decreased (but not below the number of shares thereof then outstanding plus
the number of shares of Class B Common Stock issuable or exercisable pursuant
to any security of the Corporation providing for the issuance or delivery of
Class B Common Stock) by the affirmative vote of the holders of a majority of
the outstanding shares of Class A Common Stock and without any vote or consent
of the holders of shares of Class B Common Stock.
(b) Dividends. The Board of Directors of the Corporation may cause
dividends to be paid to the holders of shares of Common Stock out of funds
legally available for the payment of dividends by declaring an amount per share
as a dividend. When and as dividends or other distributions (including without
limitations any grant or distribution of rights to subscribe for or purchase
shares of capital stock or securities or indebtedness convertible into capital
stock of the Corporation) are declared, whether payable in cash, in property or
in shares of stock of the Corporation, other than in shares of Class A Common
Stock or Class B Common Stock, the holders of Class A Common Stock and Class B
Common Stock shall be entitled to share equally, share for share, in such
dividends or other distributions as if all such shares were of a single class.
No dividends or other distributions shall be declared or paid in shares of
Class A Common Stock or Class B Common Stock or options, warrants or rights to
acquire such stock or securities convertible into or exchangeable for shares of
such stock, except dividends or other distributions payable to all of the
holders of Common Stock ratably according to the number of shares of Common
Stock held by them, in shares of Class A Common Stock to holders of that class
of stock and Class B Common Stock to holders of that class of stock.
(c) Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation
holders of Common Stock shall be entitled to share ratably according to the
number of shares of Common Stock held by them, in all assets of the Corporation
available for distribution to its stockholders.
(d) Conversion. Each share of Class B Common Stock shall be convertible
into one share of Class A Common Stock, at any time and from time to time, upon
delivery to the Corporation of a certificate, signed by or on behalf of the
holder or holders seeking such conversion, to the effect that such conversion
and the holding of such Class A Common Stock by such holder are permitted under
the then current applicable law, in form and substance reasonably acceptable to
the Corporation. Any conversion of shares of Class B Common Stock into shares
of Class A Common Stock pursuant to this Clause (d) (1) shall be effected by
the delivery to the Corporation at the principal executive office of the
certificates representing shares to be converted, duly endorsed, together with
[Seal]
SSMWB/3795
2
<PAGE>
3059
Vol. 1259
written instructions that the shares are to be converted, and accompanied by
the required certificate described herein.
(2) Each share of Class A Common Stock shall be convertible into one share
of Class B Common Stock, at any time and from time to time, at the option of
the holder thereof. Any conversion of shares of Class A Common Stock into
shares of Class B Common Stock pursuant to this Clause (d)(2) shall be effected
by the delivery to the Corporation at its principal executive office of the
certificates representing shares to be converted, duly endorsed, together with
written instructions that the shares are to be converted.
(e) Subdivisions and Combinations. If shares of either class of Common
Stock are subdivided or combined, then shares of both classes of Common Stock
shall be so subdivided or combined.
3
[Seal
<PAGE>
STATE OF CONNECTICUT )
) SS: HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand, and affixed the Seal of said
State, at Hartford, this 2nd day of March A.D. 1999
--- ----- --
/s/ Susan Bysiewicz
- -------------------------------
SECRETARY OF THE STATE
<PAGE>
289584A004 09/30/94R#37010 50.00
Vol 1259 3052
CERTIFICATE AMENDING OR RESTATING 289584A004 09/30/94R#37100 25.00
CERTIFICATE OF INCORPORATION
61-38 Rev. 4/89
Stock Corporation
STATE OF CONNECTICUT
SECRETARY OF THE STATE
30 TRINITY STREET
HARTFORD, CT 06106
- -------------------------------------------------------------------------------
1. Name of Corporation
Eyelets for Industry, Inc.
- -------------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check One)
[XX] A. Amended only, pursuant to Conn. Gen. Stat. Section 33-360.
To cancel the 450 shares of the corporation's authorized
preferred convertible stock, pursuant to CGS Section 33-352.
[ ] B. Amended and restated, pursuant to Conn. Gen. Stat. Section
33-362(c).
[ ] C. Restated only, pursuant to Conn. Gen. Stat. Section 33-362(a).
(Set forth here the resolution of amendment and/or restatement.
Use a 8 1/2 x 11 attached sheet if more space is needed).
SEE SCHEDULE A ATTACHED HERETO.
[ ] D. Restated and superseded pursuant to Conn. Stat. Section
33-362(d).
(Set forth here the resolution of amendment and/or statement.
Use a 8 1/2 x 11 attached sheet if more space is needed).
(If 2A is checked, go to 5 to complete this certificate. If 2B or 2C is
checked, complete 3A or 3B. If 2D is checked, complete 4)
3. (Check one)
[ ] A. This certificate purports merely to restate but not to change the
provisions of the original Certificate of Incorporation as
supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented and amended to date, and the
provisions of this Restated Certificate of Incorporation. (If
3A is checked, go to 5 to complete this certificate).
[ ] B. This Restated Certificate of Incorporation shall give effect to
the amendment(s) and purports to restate all those provisions now
in effect not being amended by such new amendment(s). (If 3B is
checked, check 4, if true, and go to complete this Certificate).
4. (Check, if true)
[ ] This restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
[Seal]
<PAGE>
3053
5. The manner of adopting the resolution was as follows: (Check one A, or B,
or C).
[X] A. By the board of directors and shareholders, pursuant to Conn.
Gen. Stat. Section 33-360. Vote of Shareholders: (Check (i) or
(ii) and check (iii) if applicable).
(i) [ ] No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption Vote Favoring Adoption
----- -----
(ii) [X] There are shares of more than one class entitled to
vote as a class. The designation of each class
required for adoption of the resolution and the vote
of each class in favor of adoption were as follows:
(Use an 8 1/2 x 11 attached sheet if more space is
needed).
Class of Stock Vote Required for Adoption Vote Favoring Adoption
-------------- -------------------------- ----------------------
Common Preferred 1300 1950
300 450
(iii) [ ] Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat.
Section 33-311a(a).
[ ] B. By the board of directors acting alone, pursuant to Conn. Gen.
Stat. Section 33-360(b)(2).
The number of affirmative votes required to adopt such
resolution is:
---------------------------------------
The number of directors' votes in favor of the
resolution was:
---------------------------------------
<TABLE>
<CAPTION>
(Print or Type) Signature (Print or Type) Signature
- -------------------------------------------------------------------------------
Names of Pres. Name of Sec.
<S> <C> <C> <C>
Bernard Rosselli, Jr. /s/ Bernard Rosselli, Jr. Daniel D. Stokes /s/ Daniel D. Stokes
- -------------------------------------------------------------------------------
</TABLE>
[ ] C. The corporation does not have any shareholders. The resolution
was adopted by vote of at least two-thirds of the incorporators
before the organization meeting of the corporation, and approved
in writing by all subscribers (if any) for shares of the
corporation.
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
- -------------------------------------------------------------------------------
Signed Signed Signed
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Signed Signed Signed
- -------------------------------------------------------------------------------
Dated at Thomaston, CT this 29th day of September , 19 94
---------------- ---------- ------------------- -----------
APPROVED by all subscribers, if none, so state:
(Use an 8 1/2 x 11 attached sheet if more space is needed)
[Seal] Rec. CC, GS: (Type or Print)
---------------------------------------
FILED Lori Dander
STATE OF CONNECTICUT ---------------------------------------
Sorokin, Sorokin et al
SEP 30 1994 ---------------------------------------
One Corporate Center
Secretary of the State ---------------------------------------
/s/ W.B. Date 3:00 A.M. Hartford, CT 06108-3291
- -------- ------P.M. ---------------------------------------
Please provide filer's name and
complete address for mailing receipt
<PAGE>
VOL 1259 3054
Certificate of Amendment of the
Certificate of Incorporation
of
Eyelets for Industry, Inc.
Article Third of the Certificate of Incorporation be amended such that the
450 shares of the corporation's authorized preferred convertible stock be
hereby cancelled.
[Seal]
<PAGE>
STATE OF CONNECTICUT )
) SS: HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand, and affixed the Seal of said
State, at Hartford, this 2nd day of March A.D. 1999
--- ----- --
/s/ Susan Bysiewicz
- -------------------------------
SECRETARY OF THE STATE
<PAGE>
198298A002 09/26/94R#37010 50.
Vol 1259 3055 289583A004 09/30/94R#37100 25.0
CERTIFICATE AMENDING OR RESTATING 198298A002 09/26/94r#00300 195.5
CERTIFICATE OF INCORPORATION
61-38 Rev. 4/89
Stock Corporation
STATE OF CONNECTICUT 198298A002 09/26/94R#37100
SECRETARY OF THE STATE
30 TRINITY STREET 199670A003 10/03/94R#00300
HARTFORD, CT 06106
- -------------------------------------------------------------------------------
1. Name of Corporation
Eyelets for Industry, Inc.
- -------------------------------------------------------------------------------
2. The Certificate of Incorporation is: (Check One)
[XX] A. Amended only, pursuant to Conn. Gen. Stat. Section 33-360.
[ ] B. Amended and restated, pursuant to Conn. Gen. Stat. Section
33-362(c).
[ ] C. Restated only, pursuant to Conn. Gen. Stat. Section 33-362(a).
(Set forth here the resolution of amendment and/or restatement.
Use a 8 1/2 x 11 attached sheet if more space is needed).
See Schedule A attached hereto.
[ ] D. Restated and superseded pursuant to Conn. Stat. Section
33-362(d).
(Set forth here the resolution of amendment and/or statement.
Use a 8 1/2 x 11 attached sheet if more space is needed).
(If 2A is checked, go to 5 to complete this certificate. If 2B or 2C is
checked, complete 3A or 3B. If 2D is checked, complete 4)
3. (Check one)
[ ] A. This certificate purports merely to restate but not to change the
provisions of the original Certificate of Incorporation as
supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of
Incorporation as supplemented and amended to date, and the
provisions of this Restated Certificate of Incorporation. (If
3A is checked, go to 5 to complete this certificate).
[ ] B. This Restated Certificate of Incorporation shall give effect to
the amendment(s) and purports to restate all those provisions now
in effect not being amended by such new amendment(s). (If 3B is
checked, check 4, if true, and go to complete this Certificate).
4. (Check, if true)
[ ] This restated Certificate of Incorporation was adopted by the
greatest vote which would have been required to amend any provision
of the Certificate of Incorporation as in effect before such vote and
supersedes such Certificate of Incorporation.
[Seal]
<PAGE>
3056
5. The manner of adopting the resolution was as follows: (Check one A, or B,
or C).
[X] A. By the board of directors and shareholders, pursuant to Conn.
Gen. Stat. Section 33-360. Vote of Shareholders: (Check (i) or
(ii) and check (iii) if applicable).
(i) [ ] No shares are required to be voted as a class; the
shareholder's vote was as follows:
Vote Required for Adoption Vote Favoring Adoption
----- -----
(ii) [X] There are shares of more than one class entitled to
vote as a class. The designation of each class
required for adoption of the resolution and the vote
of each class in favor of adoption were as follows:
(Use an 8 1/2 x 11 attached sheet if more space is
needed).
Class of Stock Vote Required for Adoption Vote Favoring Adoption
-------------- -------------------------- ----------------------
Common Preferred 1300 1950
300 450
(iii) [ ] Check here if the corporation has 100 or more
recordholders, as defined in Conn. Gen. Stat.
Section 33-311a(a).
[ ] B. By the board of directors acting alone, pursuant to Conn. Gen.
Stat. Section 33-360(b)(2).
The number of affirmative votes required to adopt such
resolution is:
---------------------------------------
The number of directors' votes in favor of the
resolution was:
---------------------------------------
We hereby declare, under the penalties of false statement, that the statements
made in the foregoing certificate are true:
<TABLE>
<CAPTION>
(Print or Type) Signature (Print or Type) Signature
- -------------------------------------------------------------------------------
Names of Pres. Name of Sec.
<S> <C> <C> <C>
Bernard Rosselli, Jr. /s/ Bernard Rosselli, Jr. Daniel D. Stokes /s/ Daniel D. Stokes
- -------------------------------------------------------------------------------
</TABLE>
[ ] C. The corporation does not have any shareholders. The resolution
was adopted by vote of at least two-thirds of the incorporators
before the organization meeting of the corporation, and approved
in writing by all subscribers (if any) for shares of the
corporation.
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement, that the statements made in the foregoing
certificate are true.
- -------------------------------------------------------------------------------
Signed Signed Signed
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Signed Signed Signed
- -------------------------------------------------------------------------------
Dated at New York, NY this 20th day of September , 19 94
---------------- ---------- ------------------- -----------
APPROVED by all subscribers, if none, so state: ________
(Use an 8 1/2 x 11 attached sheet if more space is needed)
[Seal] Rec. CC, GS: (Type or Print)
---------------------------------------
FILED Lori Dander
STATE OF CONNECTICUT ---------------------------------------
Sorokin, Sorokin et al
SEP 30 1994 ---------------------------------------
One Corporate Center
Secretary of the State ---------------------------------------
/s/ Hartford, CT 06108-3291
- ---------------------- ---------------------------------------
Please provide filer's name and
complete address for mailing receipt
<PAGE>
0293 021912A032 11/23/88R#00300 50.00
VOL 1128 021912A032 11/23/88R#37100 20.00
------------------------
For office use only
CERTIFICATE OF INCORPORATION
STOCK CORPORATION ACCOUNT NO.
STATE OF CONNECTICUT
SECRETARY OF THE STATE INITIALS
------------------------
The undersigned incorporator(s) hereby form(s) a corporation under the Stock
Corporation Act of the State of Connecticut:
1. The name of the corporation is Eyelets For Industry, Inc.
--------------------------------------------
2. The nature of the business to be transacted, or the purposes to be
promoted or carried out by the corporation, are as follows:
To engage in any lawful acts or activities for which corporations may be
formed under Chapter 599 (Stock Corporations) of the Connecticut General
Statutes, Revision of 1958, as amended and as it may be amended, including
but not limited to the manufacture of metal eyelets.
[Seal]
<PAGE>
0294 (Continued)
3. The designation of each class of shares, the authorized number of shares
of each such class, and the par value (if any) of each share thereof are
as follows:
5,000 shares of no par common stock.
4. The terms, limitations and relative rights and preferences of each class
of shares and series thereof (if any), or an express grant of authority to
the board of directors pursuant to Section 33-341 1959 Supp. Conn. G.S.
are as follows:
There is only one class of stock; 5,000 shares of no par common stock.
5. The minimum amount of stated capital with which the corporation shall
commence business is
One Thousand and no/100 ($1,000.00)-----------------------dollars.
---------------------------------------------------------------
(Not less than one thousand dollars)
6. (7) - Other provisions
See Schedule 1 attached hereto.
Dated at Hartford, CT this 17th day of November , 19 88
---------------- ------ ------------- ------
We hereby declare, upon the penalties of false statement, that the statements
made in the foregoing certificate are true.
This certificate of incorporation must be signed by one or more incorporators.
- -------------------------------------------------------------------------------
NAME OF INCORPORATOR NAME OF INCORPORATOR NAME OF INCORPORATOR
(Print or Type) (Print or Type) (Print or Type)
Paula G. Pressman, Esq. 2. 3.
- -------------------------------------------------------------------------------
SIGNED (Incorporator) SIGNED (Incorporator) SIGNED (Incorporator)
/s/ Paula G. Pressman 2. 3.
- -------------------------------------------------------------------------------
NAME OF INCORPORATOR NAME OF INCORPORATOR NAME OF INCORPORATOR
(Print or Type) (Print or Type) (Print or Type)
5. 6.
- -------------------------------------------------------------------------------
SIGNED (Incorporator) SIGNED (Incorporator) SIGNED (Incorporator)
5. 6.
- -------------------------------------------------------------------------------
[Seal] FRANCHISE FEE FILING FEE CERTIFICATION TOTAL FEE
FEE
FILED $50.00 exp $30 $ $100
------------------------------------------------------
STATE OF CONNECTICUT P/U 3:00 PMB 11/23/88
SIGNED (For Secretary of the State)
NOV 22 3:00 PM '88 rec: Paula Pressman
------------------------------------------------------
CERTIFIED COPY SENT ON (Date) INITIALS
c/o Sorokin & Sorokin P.C.
------------------------------------------------------
TO
One Corporate Center
------------------------------------------------------
CARD LIST PROOF
------------------------------------------------------
[Seal]
<PAGE>
VOL 1128 0295
SCHEDULE 1
TO CERTIFICATE OF INCORPORATION
OF EYELETS FOR INDUSTRY, INC.
6. Other Provisions:
A. Indemnification. The Corporation, to the full extent permitted by
Sections 320(a) and 33-321 of the General Corporation Law of the State of
Connecticut, shall indemnify all persons whom it may indemnify under those
Sections. Such indemnification shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any By-law, agreement,
vote of stockholders or disinterested directors, or otherwise.
B. Amendment, Alteration, Change or Repeal of this Certificate. The
Corporation reserves the right by majority action of its Board of Directors to
amend, alter, change or repeal any provision contained in this Certificate of
Incorporation in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
C. No Preemptive Rights. No shares of any type or class of convertible
securities, warrants, rights, or options to acquire shares shall be subject to
preemptive rights, it being the intent hereby to deny preemptive rights for all
shares and securities which the corporation may from time to time issue.
[Seal]
<PAGE>
VOL 1128 0296
------------------------------
APPOINTMENT OF STATUTORY AGENT FOR SERVICE For office use only
DOMESTIC CORPORATION ------------------------------
61-6 REV. 6-66 ACCOUNT NO.
------------------------------
INITIALS
------------------------------
TO: The Secretary of the State of Connecticut
===============================================================================
NAME OF CORPORATION
Eyelets For Industry, Inc.
- -------------------------------------------------------------------------------
APPOINTMENT
- -------------------------------------------------------------------------------
The above corporation appoints as its statutory agent for service, one of the
following:
- -------------------------------------------------------------------------------
NAME OF NATURAL PERSON BUSINESS ADDRESS ZIP CODE
WHO IS RESIDENT OF CONNECTICUT
-----------------------------------------------
RESIDENCE ADDRESS ZIP CODE
- -------------------------------------------------------------------------------
NAME OF CONNECTICUT CORPORATION ADDRESS OF PRINCIPAL OFFICE IN CONN. (If
none, enter address of appointee's
statutory agent for service)
Sorokin & Sorokin, P.C. One Corporate Center,
Hartford, CT 06103,
Attn: P. Pressman
- -------------------------------------------------------------------------------
NAME OF CORPORATION not Organized ADDRESS OF PRINCIPAL OFFICE IN CONN. (If
Under the Laws of Conn.* none, enter "Secretary of the State of
Connecticut".)
- -------------------------------------------------------------------------------
*Which has procured a Certificate of Authority to transact business or conduct
affairs in this state.
===============================================================================
AUTHORIZATION
- -------------------------------------------------------------------------------
ORIGINAL NAME OF INCORPORATOR SIGNED (Incorporator) DATE
APPOINTMENT (Print or Type)
Paula G. Pressman /s/ Paula G. Pressman 11/17/88
(Must be signed ---------------------------------------------------
by a majority of NAME OF INCORPORATOR SIGNED (Incorporator)
incorporators.) (Print or Type)
-------------------------------------------------------------
SUBSEQUENT NAME OF PRESIDENT, SIGNED (President, or DATE
APPOINTMENT VICE PRESIDENT, OR Vice President, or
SEC. Secretary)
===============================================================================
ACCEPTANCE
- -------------------------------------------------------------------------------
NAME OF STATUTORY AGENT FOR SIGNED (Statutory Agent
ACCEPTED: SERVICE (Print or Type) for service)
Sorokin & Sorokin, P.C. By: /s/ Sanford R. Rosenberg
Sanford R. Rosenberg
Its Vice President
- -------------------------------------------------------------------------------
For office use only
[Seal] FILING FEE CERTIFICATION FEE TOTAL FEES
FILED $ $ $
STATE OF CONNECTICUT
-----------------------------------------
Nov 22 3:00 PM '88 SIGNED (For Secretary of the State)
-----------------------------------------
CERTIFIED COPY SENT ON (Date) INITIALS
-----------------------------------------
TO
-----------------------------------------
CARD LIST PROOF
===============================================================================
<PAGE>
STATE OF CONNECTICUT )
) SS: HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand, and affixed the Seal of said
State, at Hartford, this 2nd day of March A.D. 1999
--- ----- --
/s/ Susan Bysiewicz
- -------------------------------
SECRETARY OF THE STATE
<PAGE>
024682A032 12/14/88R#37100 20.01
033259A002 12/14/88R#37010 30.01
CERTIFICATE
AMENDING OR RESTATING CERTIFICATE BOARD OF
OF INCORPORATION BY ACTION OF [X] INCORPORATION [ ] DIRECTORS
61-38
BOARD OF DIRECTORS BOARD OF DIRECTORS
[ ] AND SHAREHOLDERS [ ] AND MEMBERS
(Stock Corporation) (Nonstock Corporation]
033259A002 00300 4.5
033259A002 12/14/88R#37010 15.5
-----------------------------
VOL 1129 154 For office use only
STATE OF CONNECTICUT -----------------------------
SECRETARY OF STATE ACCOUNT NO.
-----------------------------
INITIALS
-----------------------------
===============================================================================
1. NAME OF CORPORATION DATE
Eyelets for Industry, Inc. December 13, 1988
- -------------------------------------------------------------------------------
2. The Certificate of incorporation is [ ] A. AMENDED ONLY
[ ] B. AMENDED AND RESTATED
[ ] C. RESTATED ONLY by the following
resolution
RESOLVED, that the Certificate of Incorporation of the Corporation shall
be amended and restated as reflected in Schedule 1 attached
3. (Omit if 2.A is checked.)
(a) The above resolution merely restates and does not change the
provisions of the original Certificate of Incorporation as
supplemented and amended to date, except as follows: (Indicate
amendments made, if any; if none, so indicate.)
Paragraph THIRD of the Certificate of Incorporation is hereby amended to
provide for the authorization of up to 450 shares of Nonvoting, Convertible
Preferred Stock, Series A, par value $1000 per share and to restate the
authority for the issuance of up to 5000 shares of Common Stock no par value.
Paragraph FOURTH is amended to provide for two classes of stock: the Common
Stock; and the Nonvoting, Convertible Preferred Stock, Series A; with the
relative rights and preferences, including rights as to voting, dividends,
redemption, convertibility and liquidation as reflected in Schedule 1 attached
hereto. Paragraph SEVENTH is hereby added to provide for the unlimited
duration of the Corporation.
(b) Other than as indicated in Par. 3(a), there is no discrepancy between
the provisions of the original Certificate of Incorporation as
supplemented to date, and the provisions of this Certificate
Restating the Certificate of Incorporation.
===============================================================================
BY ACTION OF INCORPORATION
[XX] 4. The above resolution was adopted by vote of at least two-thirds of
the incorporators before the organization meet of the corporation,
and approved in writing by all subscribers (if any) for shares of the
corporation, (or if nonstock corporation, by all applicants for
membership entitled to vote, if any.)
There are no shareholders, subscribers, members or applicants for
membership.
We (at least two-thirds of the incorporators) hereby declare, under the
penalties of false statement that the statements made in the foregoing
certificate are true.
- -------------------------------------------------------------------------------
SIGNED SIGNED SIGNED
/s/ Paul G. Pressman
- -------------------------------------------------------------------------------
APPROVED
(All subscribers, or, if nonstock corporation, all applicants
for membership entitled to vote, if none, so indicate)
- -------------------------------------------------------------------------------
SIGNED SIGNED SIGNED
===============================================================================
<PAGE>
1548 (Continued)
===============================================================================
BY ACTION OF BOARD OF DIRECTORS
[ ] 4. (Omit if 2.C is checked.) The above resolution was adopted by the
board of directors acting alone,
[ ] there being no shareholders or subscribers
[ ] the board of directors being so authorized pursuant to Section
33-341, Conn. G.S. as amended
[ ] the corporation being a nonstock corporation and having no
members and no applicants for membership entitled to vote on
such resolution.
- -------------------------------------------------------------------------------
5. The number of affirmative votes 6. The number of directors' votes
required to adopt such resolution is: in favor of the resolution was:
- -------------------------------------------------------------------------------
We hereby declare, under the penalties of false statement that the statements
made in the foregoing certificate are true.
- -------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT NAME OF SECRETARY OR ASSISTANT SECRETARY
(Print or Type) (Print or Type)
- -------------------------------------------------------------------------------
SIGNED (President or Vice President) SIGNED (Secretary of Assistant Secretary)
===============================================================================
BY ACTION OF BOARD OF DIRECTORS AND SHAREHOLDERS
[ ] 4. The above resolution was adopted by the board of directors and by
shareholders.
5. Vote of shareholders:
(a) (Use if no shares are required to be voted as a class)
- -------------------------------------------------------------------------------
NUMBER OF SHARES TOTAL VOTING VOTE REQUIRED FOR VOTE FAVORING
ENTITLED TO VOTE POWER ADOPTION ADOPTION
- -------------------------------------------------------------------------------
(b) (If the shares of any class are entitled to vote as a class, indicate
the designation and number of outstanding shares of each such class,
the voting power thereof, and the vote of each such class for the
amendment resolution.)
We hereby declare, under the penalties of false statement that the statements
made in the foregoing certificate are true.
- -------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT NAME OF SECRETARY OR ASSISTANT SECRETARY
(Print or Type) (Print or Type)
- -------------------------------------------------------------------------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant Secretary)
===============================================================================
BY ACTION OF BOARD OF DIRECTORS AND MEMBERS
[ ] 4. The above resolution was adopted by the board of directors and by
members.
5. Vote of members:
(a) (Use if no members are required to vote as a class.)
- -------------------------------------------------------------------------------
NUMBER OF MEMBERS TOTAL VOTING VOTE REQUIRED FOR VOTE FAVORING
ENTITLED TO VOTE POWER ADOPTION ADOPTION
- ------------------------------------------------------------------------------
(b) (If the members of any class are entitled to vote as a class,
indicate the designation and number of members of each such class,
the voting power thereof, and the vote of each such class for the
amendment resolution.)
We hereby declare, under the penalties of false statement that the statements
made in the foregoing certificate are true.
- -------------------------------------------------------------------------------
NAME OF PRESIDENT OR VICE PRESIDENT NAME OF SECRETARY OR ASSISTANT SECRETARY
(Print or Type) (Print or Type)
- -------------------------------------------------------------------------------
SIGNED (President or Vice President) SIGNED (Secretary or Assistant Secretary)
Exp 20
==============================================================================
<PAGE>
For office use only
[Seal] FILING FEE CERTIFICATION FEE TOTAL FEES
FILED Dec. 1 3:00PM '88 $30 FT4.50 $ (O/A 15.50) $70
-----------------------------------------
SECRETARY OF STATE
/s/ AG
- ----------------------- SIGNED (For Secretary of the State)
rec: Andrew Glassman - rec 12/15/88 AG
-----------------------------------------
CERTIFIED COPY SENT ON (Date) INITIALS
Sorokin & Sorokin, PC
-----------------------------------------
TO
One Corporate Center
-----------------------------------------
CARD LIST PROOF
Hartford, CT 06103
==============================================================================
expedited filing fee waived upon
submission 3-990-10(b)
<PAGE>
FILING #0001581829 PG 01 OF 06
VOL B 00043
FILED 01/11/1996 03:02 PM PAGE 02451
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
CERTIFICATE OF MERGER
OF
EFI METAL FORMING, INC.
AND
U.S. METAL FORMING, INCORPORATED
To the Secretary of State
State of Connecticut
Pursuant to the provisions of the Stock Corporation Act of the State of
Connecticut governing the merger of one or more domestic corporations with and
into another domestic corporation, it is hereby certified that:
1. The names of the merging corporations are U.S. Metal Forming,
Incorporated which is a business corporation organized under the laws of the
State of Connecticut, and which is to be the terminating corporation and EFI
Metal Forming, Inc. which is a business corporation organized under the laws of
the State of Connecticut, and which is to be the surviving corporation.
2. Annexed hereto and made a part hereof is the Agreement and Plan of
Merger for merging U.S. Metal Forming, Incorporated with and into EFI Metal
Forming, Inc. as approved by resolution of the Board of Directors of each of
said merging corporations.
3. The shareholder vote required to approve and adopt the Agreement and
Plan of Merger on behalf of U.S. Metal Forming, Incorporated is 89 votes.
4. The shareholder vote for the approval and the adoption of the Agreement
and Plan of Merger on behalf of U.S. Metal Forming, Incorporated is 132 votes.
5. The shareholder vote required to approve and adopt the Agreement and
Plan of Merger on behalf of EFI Metal Forming, Inc. is 67 votes.
6. The shareholder vote for the approval and the adoption of the Agreement
and Plan of Merger on behalf of EFI Metal Forming, Inc. is 100 votes.
7. The Agreement and Plan of Merger provides that EFI Metal Forming, Inc.
will continue its existence as the surviving corporation under its present name
pursuant to the provisions of the laws of the State of Connecticut.
[Seal]
<PAGE>
FILING #0001581829 PG 02 OF 06
VOL B 00043
FILED 01/11/1996 03:02 PM PAGE 02452
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
8. The Agreement and Plan of Merger herein certified provides that the
merger shall become effective in the State of Connecticut upon the filing of
the Certificate of Merger with the Secretary of the State of Connecticut.
The undersigned officers of EFI Metal Forming, Inc. hereby state under the
penalties of false statement that the statements pertaining to EFI Metal
Forming, Inc. contained in the foregoing Certificate of Merger are true.
Dated at Hartford, Connecticut, on January 10, 1996.
EFI METAL FORMING, INC.
By: /s/ Gary Dayon
----------------------------------
President
By: /s/ Daniel D. Stokes
----------------------------------
Secretary
The undersigned officers of U.S. Metal Forming, Incorporated hereby state
under the penalties of false statement that the statements pertaining to U.S.
Metal Forming, Incorporated contained in the foregoing Certificate of Merger
are true.
Dated at Hartford, Connecticut, on January 10, 1996.
U.S. Metal Forming, Incorporated
By: /s/ Gary Dayon
----------------------------------
President
By: /s/ Elizabeth M. Dayon
----------------------------------
Secretary
[Seal]
2
<PAGE>
FILING #0001581829 PG 03 OF 06
VOL B 00043
FILED 01/11/1996 03:02 PM PAGE 02453
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (hereinafter referred to as the "Plan of
Merger") dated January 10, 1996, by and between EYELETS FOR INDUSTRY, INC.
("EFI"), a corporation organized and existing under the laws of the State of
Connecticut, EFI METAL FORMING, INC. ("EFIMF"), a corporation organized and
existing under the laws of the State of Connecticut, and U.S. METAL FORMING,
INCORPORATED ("U.S. Metal"), a corporation organized and existing under the
laws of the State of Connecticut.
W I T N E S S E T H:
WHEREAS:
A. U.S. Metal and EFIMF have agreed to merge pursuant to a certain
Agreement and Plan of Reorganization dated as of the date hereof (the
"Agreement and Plan of Reorganization"); and
B. The respective Boards of Directors of EFI, U.S. Metal and EFIMF
(hereinafter sometimes referred to as the "Constituent Corporations") deem it
advisable for the general welfare and advantage of the Constituent Corporations
and the stockholders of EFIMF and U.S. Metal that U.S. Metal merge into EFIMF
pursuant to the business corporate laws of the State of Connecticut and this
Plan of Merger and the Agreement and Plan of Reorganization.
NOW THEREFORE, in consideration of the premises, the parties do hereby
agree as follows:
ARTICLE I -- MERGER
U.S. Metal shall be and become merged with and into EFIMF on or at the
Merger Date, as defined in Article II of this Plan of Merger. (The resulting
merger is sometimes hereinafter referred to as the "Merger"). EFIMF shall be
the surviving corporation and continue its corporate existence under the laws
of the State of Connecticut.
ARTICLE II -- MERGER DATE
The Merger shall become effective when all of the following shall have
been completed:
[Seal]
1
<PAGE>
FILING #0001581829 PG 04 OF 06
VOL B 00043
FILED 01/11/1996 03:02 PM PAGE 02454
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
(a) Approval by the respective stockholders of U.S. Metal and EFIMF shall
have been duly obtained;
(b) Approval by the respective Boards of Directors of EFI, U.S. Metals and
EFIMF shall have been duly obtained; and
(c) The Certificate of Merger required by Section 33-367 of the
Connecticut Stock Corporation Act shall have been duly executed and filed with
the Secretary of State of Connecticut in accordance with Section 33-285 of the
Connecticut Stock Corporation Act.
The date and time thereon when the Merger becomes effective as provided
above shall be referred to herein as the "Merger Date".
ARTICLE III -- CERTIFICATE OF INCORPORATION
The Certificate of Incorporation of EFIMF as it presently exists shall be
the Certificate of Incorporation of EFIMF, as the surviving corporation, from
and after the Merger Date, subject to the right of EFIMF to amend its
Certificate of Incorporation in accordance with Connecticut law.
ARTICLE IV -- BYLAWS
The bylaws of EFIMF, as in effect on the date hereof, shall be the bylaws
of EFIMF, as surviving corporation, from and after the Merger Date, subject
always to the right of EFIMF to amend its bylaws in accordance with Connecticut
law.
ARTICLE V -- DIRECTORS AND OFFICERS
(a) Directors: The names of the persons who shall constitute the Board of
Directors of EFIMF, as the surviving corporation, from and after the Merger
Date, are as follows:
Gary Dayon
Daniel D. Stokes
Bernard Rosselli, Jr.
The persons named above shall serve as directors until the next annual
meeting of the stockholders of EFIMF and until other shall be elected
in their stead.
(b) Officers: The names of the persons who shall be the officers of EFIMF,
as surviving Corporation, are as follows:
[Seal]
2
<PAGE>
FILING #0001581829 PG 06 OF 06
VOL B 00043
FILED 01/11/1996 03:02 PM PAGE 02455
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
Gary Dayon - President
Daniel D. Stokes - Vice President, Secretary and Treasurer
Bernard Rosselli, Jr. - Vice President
The persons named above shall serve as directors until the next annual
meeting of the stockholders of EFIMF and until others shall be elected
in their stead.
ARTICLE VI
TERMS AND CONDITIONS AND MODE OF EFFECTING MERGER
The mode of carrying the Merger into effect and the manner and basis of
converting shares of U.S. Metal into shares of EFI upon the Merger Date shall
be as follows:
The 132 shares of U.S. Metal's Common Stock issued and outstanding on the
Merger Date, by virtue of the Merger, shall be converted into 190 shares of EFI
Class A Common Stock.
At the Closing of the Merger, Gary Dayon, as the sole holder of the Common
Stock of U.S. Metal, shall surrender his certificates evidencing the 132 shares
of U.S. Metal Common Stock held by him and shall receive a certificate
evidencing 190 shares of the Class A Common Stock of EFI with such legends
restricting transfer as shall be required under applicable state and federal
securities law and also to reflect any restrictions on transfer required under
the form of any Stock Redemption or Stock Restriction Agreement entered into by
Gary Dayon with respect to such shares.
ARTICLE VII -- TERMINATION
This Plan of Merger shall be terminated and abandoned, notwithstanding any
prior approval of the Merger by the shareholders of either or both U.S. Metal
and EFIMF, if the Agreement and Plan of Reorganization is terminated.
ARTICLE VIII -- AMENDMENT
This Plan of Merger may be amended or revised by action of the respective
Board of Directors of the Constituent Corporations at any time prior to the
Merger Date, notwithstanding any prior approval of the Merger by the respective
stockholders of such corporations, as may be required to comply with the law of
the State of Connecticut, and as may be otherwise necessary, desirable or
expedient with respect to matters of form; provided, however, that no amendment
or revision shall be made hereto unless such amendment or revision is permitted
by law.
[Seal]
3
<PAGE>
FILING #0001581829 PG 06 OF 06
VOL B 00043
FILED 01/11/1996 03:02 PM PAGE 02456
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
ARTICLE IX -- MISCELLANEOUS
(a) The parties will execute, at the time and from time to time, either
before or after the Merger Date, such additional instruments and will take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred by virtue of the Merger or otherwise to carry
out the intent and purposes of the Agreement and Plan of Reorganization and
this Plan of Merger.
(b) This Plan of Merger may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto have caused this Plan of
Merger to be executed by the officer whose signature appears below, hereunto
duly authorized, and its corporate seal to be hereunder duly affixed, all on or
as of the day and year first above written.
EYELETS FOR INDUSTRY, INC.
By: /s/ Bernard Rosselli, Jr.
---------------------------------
Bernard Rosselli, Jr.
Its President
hereunto duly authorized
EFI METAL FORMING, INC.
By: /s/ Daniel D. Stokes
---------------------------------
Daniel D. Stokes
Its Vice President
hereunto duly authorized
U.S. METAL FORMING, INCORPORATED
By: /s/ Gary Dayon
---------------------------------
Gary Dayon
Its President
hereunto duly authorized
[Seal]
4
<PAGE>
STATE OF CONNECTICUT )
) SS: HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand, and affixed the Seal of said
State, at Hartford, this 2nd day of March A.D. 1999
--- ----- --
/s/ Susan Bysiewicz
- -------------------------------
SECRETARY OF THE STATE
<PAGE>
FILING #0001576614 PG 01 OF 03
VOL. B-00040
FILED 12/08/1995 10:42 AM
PAGE 02367
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
CERTIFICATE OF INCORPORATION
STOCK CORPORATION
51-5 REV. 6-72 -------------------
INITIALS
-------------------
STATE OF CONNECTICUT
SECRETARY OF THE STATE
The undersigned incorporator(s) hereby form(s) a corporation under the Stock
Corporation Act of the State of Connecticut:
1. The name of the corporation is EFI Metal Forming, Inc.
--------------------------------------------
2. The nature of the business to be transacted, or the purposes to be
promoted or carried out by the corporation, are as follows:
To engage in any lawful act or business activity for which
corporations may be formed under said Stock Corporation Act.
[Seal]
<PAGE>
FILING #0001576614 PG 02 OF 03
VOL. B-00040
FILED 12/08/1995 10:42 AM
PAGE 02367
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
(Continued)
3. The designation of each class of shares, the authorized number of shares
of each such class, and the par value (if any) of each share thereof are
as follows:
20,000 shares of common stock, no par value
4. The terms, limitations and relative rights and preferences of each class
of shares and series thereof (if any), or an express grant or authority to
the board of directors pursuant to Section 33-341 1959 Supp. Conn. G.S.,
are as follows:
NONE
5. The minimum amount of stated capital with which the corporation shall
commence business is
One Thousand ($1,000.00)-----------------------dollars.
---------------------------------------------------
(Not less than one thousand dollars)
6. (7) - Other provisions
Pre-emptive rights are hereby waived.
Dated at Hartford, CT this 7th day of December , 19 95
---------------- ------ ------------- ------
We hereby declare, upon the penalties of false statement, that the statements
made in the foregoing certificate are true.
This certificate of incorporation must be signed by one or more incorporators.
- -------------------------------------------------------------------------------
NAME OF INCORPORATOR NAME OF INCORPORATOR NAME OF INCORPORATOR
(Print or Type) (Print or Type) (Print or Type)
Morris W. Banks 2. 3.
- -------------------------------------------------------------------------------
SIGNED (Incorporator) SIGNED (Incorporator) SIGNED (Incorporator)
2. 3.
- -------------------------------------------------------------------------------
NAME OF INCORPORATOR NAME OF INCORPORATOR NAME OF INCORPORATOR
(Print or Type) (Print or Type) (Print or Type)
5. 6.
- -------------------------------------------------------------------------------
SIGNED (Incorporator) SIGNED (Incorporator) SIGNED (Incorporator)
5. 6.
- -------------------------------------------------------------------------------
FRANCHISE FEE FILING FEE CERTIFICATION TOTAL FEES
FEE
$ $ $ $
------------------------------------------------------
SIGNED (For Secretary of the State)
------------------------------------------------------
CERTIFIED COPY SENT ON (Date) INITIALS
------------------------------------------------------
TO
------------------------------------------------------
CARD LIST PROOF
------------------------------------------------------
[Seal]
<PAGE>
FILING #0001576614 PG 03 OF 03
VOL. B-00040
FILED 12/08/1995 10:42 AM
PAGE 02369
SECRETARY OF THE STATE
CONNECTICUT SECRETARY OF THE STATE
APPOINTMENT OF STATUTORY AGENT FOR SERVICE
DOMESTIC CORPORATION
61-6 Rev. 6/88
Secretary of the State
30 Trinity Street
Hartford, CT 06106
Name of Corporation: EFI Metal Forming, Inc. Complete All Blanks
- -------------------------------------------------------------------------------
The above corporation appoints as its statutory agent for service, one of the
following:
- -------------------------------------------------------------------------------
Name of Natural Person Who Business Address Zip Code
is Resident of Connecticut One Corporate Center,
Hartford, CT 06103
Morris W. Banks Residence Address Zip Code
1592 Asylum Avenue,
West Hartford, CT 06117
- -------------------------------------------------------------------------------
Name of Connecticut Corporation Address of Principal Office
in Conn.
(If none, enter address of appointee's
statutory agent for service)
- -------------------------------------------------------------------------------
Name of Connecticut Corporation Address of Principal Office
(Not organized under the Laws of in Conn.
Conn.*) (If none, enter "Secretary
of the State of Conn.")
- -------------------------------------------------------------------------------
*Which has procured a Certificate of Authority to transact business or conduct
affairs in this state.
- -------------------------------------------------------------------------------
AUTHORIZATION
- -------------------------------------------------------------------------------
Original Appointment Name of Incorporator Signed (Incorporator) Date
(Must be Signed by a (Print or Type)
majority of
Incorporators) Morris W. Banks 12/7/95
--------------------------------------------------------
Name of Incorporator Signed (Incorporator)
(Print or Type)
--------------------------------------------------------
Name of Incorporator Signed (Incorporator)
(Print or Type)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Subsequent Appointment Name of President, Vice President Date
or Secretary
--------------------------------------------------------
Signed (President, or Vice President
or Secretary)
--------------------------------------------------------
- -------------------------------------------------------------------------------
Acceptance: Name of Statutory Agent for Service Signed (Statutory Agent
(Print or Type) for Service)
Morris W. Banks
- -------------------------------------------------------------------------------
For Official Use Only Rec; CC:
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
Please provide filer's name and complete address
for mailing receipt
[Seal]
<PAGE>
STATE OF CONNECTICUT )
) SS: HARTFORD
OFFICE OF THE SECRETARY OF THE STATE )
I hereby certify that this is a true copy of record in this Office
In Testimony whereof, I have hereunto set my hand, and affixed the Seal of Said
State, at Hartford, this 2nd day of March A.D. 1999
--- ----- --
/s/ Susan Bysiewicz
- -------------------------------
SECRETARY OF THE STATE
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 11:15 AM 01/26/1996
960024928 - 2586195
CERTIFICATE OF INCORPORATION
OF
GREAT LAKE ACQUISITION CORP.
(a Delaware corporation)
******************
FIRST: The name of the Corporation is Great Lake Acquisition Corp.
SECOND: The address of its registered office in the State of Delaware is No.
1209 Orange Street, in the City of Wilmington, County of New Castle. The name
of its registered agent at such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or promoted is:
To engage in any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law.
FOURTH: The total number of shares of stock which the Corporation shall have
authority to issue is one thousand (1,000), all of which shares shall be Common
Stock of One Cent ($.01) par value.
The number of authorized shares may be increased or decreased by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote.
FIFTH: The name and mailing address of the sole incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Jeffrey T. Haynes 41 S. High Street, Columbus, Ohio 43215
The powers of the incorporator shall terminate upon the election of the initial
directors and the adoption of the By-laws.
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter or
repeal the By-Laws of the Corporation.
EIGHTH: Elections of directors need not be by written ballot unless the By-
Laws of the Corporation shall so provide.
Meetings of stockholders may be held within or without the State of Delaware,
as the By-Laws may provide. The books of the Corporation may be kept (subject
to any provision contained in the Delaware General Corporation Law) outside the
State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the By-Laws of the Corporation.
NINTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
TENTH: No director of the Corporation shall be personally liable to the
Corporation or to its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that such provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or to its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for the payment of a dividend or the payment
for the purchase or redemption of the Corporation's stock in violation of
Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this certificate, hereby declaring that this
is my act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand this 25th day of January, 1996.
/s/Jeffrey T. Haynes
------------------------------------
Jeffrey T. Haynes, Incorporator
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:00 PM 01/31/1996
960030679 - 2586195
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
GREAT LAKE, INC.
INTO
GREAT LAKE ACQUISITION CORP.
* * * * *
Great Lake Acquisition Corp., a corporation organized and existing under
the laws of Delaware (this "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That this Corporation was incorporated on January 26, 1996,
pursuant to the General Corporation Law of the State of Delaware.
SECOND: That this Corporation owns all of the outstanding shares of the
capital stock of Great Lake, Inc., a corporation incorporated on November 30,
1984, pursuant to the Business Corporation Act of the State of Michigan
("GLI").
THIRD: That this Corporation, by the following resolutions of its Board
of Directors, duly adopted by the unanimous written consent of its members,
filed with the minutes of the Board on January 26, 1996, determined to and did
merge into itself GLI:
RESOLVED, that this Corporation shall merge, and it hereby does
merge into itself Great Lake, Inc., a Michigan corporation ("GLI"), and
assumes all of its obligations;
FURTHER RESOLVED, that such merger shall be effective on February
1, 1996;
FURTHER RESOLVED, that the proper officers of this Corporation be,
and they hereby are, authorized and directed, for and on behalf of the
Corporation, to make and execute a Certificate of Ownership and
Merger setting forth a copy of the resolutions to merge with GLI
and to assume its liabilities and obligations, and the date of
adoption thereof, and to cause the same to be filed with the
Secretary of State of Delaware and a certified copy thereof to be
recorded in the Office of the Recorder of Deeds of New Castle
County, Delaware, and to do all acts and things whatsoever,
whether within or without the State of Delaware, which may be in
anyway necessary or proper to effect said merger; and
FURTHER RESOLVED, that in said merger, this Corporation shall
change its name by changing Article FIRST and the Certificate of
Incorporation of this Corporation to read as follows:
FIRST: The name of the corporation is Great Lake, Inc.
IN WITNESS WHEREOF, said Great Lake Acquisition Corp. has caused this
Certificate to be signed by John Marshall, its President, and attested by
Kenneth H. Koch, its Secretary, this thirty-first day of January, 1996.
ATTEST: GREAT LAKE ACQUISITION CORP.
/s/ Kenneth H. Koch By: /s/ John Marshall
- ---------------------------- ----------------------------------
Kenneth H. Koch, Secretary John Marshall, President
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:01 PM 01/31/1996
960030688 - 2586195
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
KAR TOOL CO., INC.
INTO
GREAT LAKE INC. CORP.
* * * * *
Great Lake, Inc., a corporation organized and existing under the laws
of Delaware (this "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That this Corporation was incorporated on January 26, 1996,
pursuant to the General Corporation Law of the State of Delaware.
SECOND: That this Corporation owns all of the outstanding shares of the
capital stock of Kar Tool Co., Inc., a corporation incorporated on December
17, 1969, pursuant to the Business Corporation Act of the State of Michigan
("KTC").
THIRD: That this Corporation, by the following resolutions of its Board
of Directors, duly adopted by the unanimous written consent of its members,
filed with the minutes of the Board on January 26, 1996, determined to and did
merge into itself KTC:
RESOLVED, that this Corporation shall merge, and it hereby does
merge into itself Kar Tool Co., Inc., a Michigan corporation ("KTC"),
and assumes all of its obligations;
FURTHER RESOLVED, that such merger shall be effective on February 1,
1996;
FURTHER RESOLVED, that the proper officers of this Corporation be,
and they hereby are, authorized and directed, for and on behalf of
the Corporation, to make and execute a Certificate of Ownership and
Merger setting forth a copy of the resolutions to merge with KTC and
to assume its liabilities and obligations, and the date of adoption
thereof, and to cause the same to be filed with the Secretary of
State of Delaware and a certified copy thereof to be recorded in the
Office of the Recorder of Deeds of New Castle County, Delaware, and
to do all acts and things whatsoever, whether within or without the
State of Delaware, which may be in anyway necessary or proper to
effect said merger; and
IN WITNESS WHEREOF, said Great Lake, Inc. has caused this Certificate
to be signed by John Marshall, its President, and attested by Kenneth H. Koch,
its Secretary, this thirty-first day of January, 1996.
ATTEST: GREAT LAKE INC.
/s/ Kenneth H. Koch By: /s/ John Marshall
- ----------------------------- --------------------------------
Kenneth H. Koch, Secretary John Marshall, President
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 04/20/1998
981149430 - 2586195
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED
OFFICE AND REGISTERED AGENT
OF
GREAT LAKE, INC.
_______________________________
The Board of Directors of:
GREAT LAKE, INC.
a corporation of the State of Delaware, on this 9th day of April, A.D. 1998,
does hereby resolve and order that the location of the Registered Office of
this Corporation within this State be, and the same hereby is:
1013 Centre Road, in the City of Wilmington, in the County of New Castle,
Delaware, 19805.
The name of the Registered Agent therein and in charge thereof upon whom
process against the Corporation may be served, is:
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
GREAT LAKE, INC.
a corporation of the State of Delaware, does hereby certify that the foregoing
is a true copy of a resolution adopted by the Board of Directors at a meeting
held as herein stated.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by Fred L. Steward this 9th day of April A.D. 1998.
/s/ Fred L. Stewart
--------------------------
Authorized Officer
<PAGE>
CERTIFICATE OF INCORPORATION
OF
INSILCO ASIA CORPORATION
(a Delaware corporation)
* * * * * * * * * * * * * * * * * * *
FIRST: The name of the Corporation is Insilco Asia Corporation.
SECOND: The address of its registered office in the State of Delaware is No.
1209 Orange Street, in the City of Wilmington, County of New Castle. The name
of its registered agent at such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or promoted is:
To engage in any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law.
FOURTH: The total number of shares of stock which the Corporation shall have
authority to issue is one thousand (1,000), all of which shares shall be
Common Stock of One Cent ($.01) par value.
The number of authorized shares may be increased or decreased by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote.
FIFTH: The name and mailing address of the sole incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Jeffrey T. Hayes 41 S. High Street, Columbus, Ohio 43215
The powers of the incorporator shall terminate upon the election of the initial
directors and the adoption of the By-laws.
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: In furtherance and not in limitation of the powers conferred by the
statute, the Board of Directors is expressly authorized to make, alter or
repeal the By-Laws of the Corporation.
EIGHTH: Elections of directors need not be by written ballot unless the By-
Laws of the Corporation shall so provide.
Meetings of stockholders may be held within or without the State of Delaware,
as the By-Laws may provide. The books of the Corporation may be kept (subject
to any provision contained in the Delaware General Corporation Law) outside the
State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the By-Laws of the Corporation.
NINTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the matter
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
TENTH: No director of the Corporation shall be personally liable to the
Corporation or to its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that such provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or to its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for the payment of a dividend or the payment
for the purchase or redemption of the Corporation's stock in violation of
Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this certificate, hereby declaring that this
is my act and deed and the facts herein stated are true, and accordingly, have
hereunto set my hand this 4th day of March, 1996.
/s/ Jeffrey T. Hayes
------------------------------------
Jeffrey T. Hayes, Incorporator
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED
OFFICE AND REGISTERED AGENT
OF
INSILCO ASIA CORPORATION
The Board of Directors of:
INSILCO ASIA CORPORATION
a Corporation of the State of Delaware, on this 9th day of April, A.D. 1998,
does hereby resolve and order that the location of the Registered Office of
this Corporation within this State be, and the same hereby is 1013 Centre
Road, in the City of Wilmington, in the County of New Castle, Delaware, 19805.
The name of the Registered Agent therein and in charge thereof upon whom
process against the Corporation may be served, is:
THE PRENTICE-HALL CORPORATION SYSTEM, INC.
INSILCO ASIA CORPORATION
a Corporation of the State of Delaware, does hereby certify that the foregoing
is a true copy of a resolution adopted by the Board of Directors at a meeting
held as herein stated.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by Fred L. Stewart, this 9th day of April A.D. 1998.
/s/ Fred Stewart
---------------------------
Authorized Officer
<PAGE>
CERTIFICATE OF INCORPORATION
OF
JEFFERSON SHELL, INCORPORATED
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware (particularly Chapter 1,
Title 8 of the Delaware Code and the acts amendatory thereof and supplemental
thereto, and known, identified and referred to as the "General Corporation Law
of the State of Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is
JEFFERSON SHELL, INCORPORATED
SECOND: The address, including street, number, city, and
county, of the registered office of the corporation in the State of Delaware
is 229 South State Street, City of Dover, County of Kent; and the name of the
registered agent of the corporation in the State of Delaware at such address
is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is One Thousand (1,000). The par
value of each of such shares is One Dollar ($1.00). All such shares are of
one class and are shares of Common Stock.
No holder of any of the shares of the stock of the corporation,
whether now or hereafter authorized and issued, shall be entitled as of right
to purchase or subscribe for (1) any unissued stock of any class, or (2) any
additional shares of any class to be issued by reason of any increase of the
authorized capital stock of the corporation of any class, or (3) bonds,
certificates of indebtedness, debentures or other securities convertible into
stock of the corporation, or carrying any right to purchase stock of any
class, but any such unissued stock or such additional authorized issue of any
stock or of other securities convertible into stock, or carrying any right to
purchase stock, may be issued and disposed of pursuant to resolution of the
Board of Directors to such persons, firms, corporations or associations and
upon such terms as may be deemed advisable by the Board of Directors in the
exercise of its discretion.
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
R.G. Dickerson 299 South State Street, Dover, Delaware
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of this corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for this corporation
under the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and
to any reorganization of this corporation as consequence of such compromise
or arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may
be, and also on this corporation.
EIGHTH: For the management of the business and for the conduct
of the affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of
Directors. The number of directors which shall constitute the
whole Board of Directors shall be fixed by, or in the manner
provided in, the By-Laws. The phrase "whole Board" and the phrase
"total number of directors" shall be deemed to have the same
meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No election of
directors need be by written ballot.
2. After the original or other By-Laws of the corporation
have been adopted, amended, or repealed, as the case may be, in
accordance with the provisions of Section 109 of the General
Corporation Law of the State of Delaware, and, after the
corporation has received any payment for any of its stock, the
power to adopt, amend, or repeal the By-Laws of the corporation
may be exercised by the Board of Directors of the corporation;
provided, however, that any provision for the classification of
directors of the corporation for staggered terms pursuant to the
provisions of subsection (d) of Section141 of the General
Corporation Law of the State of Delaware shall be set forth in an
initial By-Law or in a By-Law adopted by the stockholders entitled
to vote of the corporation unless provisions for such
classification shall be set forth in this certificate of
incorporation.
3. Whenever the corporation shall be authorized to issue
only one class of stock, each outstanding share shall entitle the
holder thereof to notice of, and the right to vote at, any meeting
of stockholders. Whenever the corporation shall be authorized to
issue more than one class of stock, no outstanding share of any
class of stock which is denied voting power under the provisions
of the certificate of incorporation shall entitle the holder
thereof to the right to vote at any meeting of stockholders except
as the provisions of paragraph (b)(2) of section 242 of the
General Corporation Law of the State of Delaware shall otherwise
require; provided, that no share of any such class which is
otherwise denied voting power shall entitle the holder thereof to
vote upon the increase or decrease in the number of authorized
shares of said class.
NINTH: The corporation shall, to the fullest extent permitted
by Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all
of the expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
TENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in
force may be added or inserted in the manner and at the time prescribed by
said laws, and all rights at any time conferred upon the stockholders of the
corporation by this certificate of incorporation are granted subject to the
provisions of this Article TENTH.
Signed on September 17, 1985.
/s/ R.G. Dickerson
----------------------------
R.G. Dickerson
Incorporated
CERTIFICATE OF AMENDMENT
OF CERTIFICATE OF INCORPORATION
JEFFERSON SHELL, INCORPORATED
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"Corporation") is Jefferson Shell, Incorporated.
2. The certificate of incorporation of the Corporation is hereby
amended by striking out Article FIRST thereof and by substituting in lieu of
said Article the following new Article:
FIRST: The name of the corporation (hereinafter called the
"corporation") is Signal Transformer Co., Inc.
3. The amendment of the certificate of incorporation herein
certified has been duly adopted in accordance with the provisions of Section
242 of the General Corporation Law of the State of Delaware.
4. The effective date of the amendment herein certified shall
be the filing date.
Signed and attested to on May 24, 1989.
/s/ Sherwood S. Willard
--------------------------
Sherwood S. Willard
Vice President
Attest:
/s/ J. Randal Greaves
- -------------------------
J. Randal Greaves
Assistant Secretary
STATE OF CONNECTICUT )
) ss: Meriden
COUNTY OF NEW HAVEN )
BE IT REMEMBERED that, on May 24, 1989, before me, a Notary
Public duly authorized by law to take acknowledgment of deeds, personally came
Sherwood S. Willard, Vice President of Jefferson Shell, Incorporated, who duly
signed the foregoing instrument before me and acknowledged that such signing
is his act and deed, that such instrument as executed is the act and deed of
said corporation, and that the facts stated therein are true.
GIVEN under my hand on May 24, 1989.
_____________________
Notary Public
My commission expires
March 31, 1993
(Seal)
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION OF
SIGNAL TRANSFORMER CO., INC.
Pursuant to Section 242 and 303 of the
General Corporation Law of the State of Delaware
Signal Transformer Co., Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), does hereby certify
that:
1. Insilco Corporation, a Delaware corporation
("Insilco"), along with thirteen of its subsidiaries, including
the Company, filed a voluntary petition for reorganization
pursuant to chapter 11 of the United States Bankruptcy Code on
January 13, 1991, commencing jointly administered cases styled In
re Insilco Corporation, Case No. 91-70021-RBK (Bankr. W.D. Tex.).
2. The Amended and Restated Plan or Reorganization (the
"Plan of Reorganization") Jointly Proposed by the Debtors and the
Official Joint Committee of Unsecured Creditors, including Insilco
and twelve of its debtor subsidiaries, including the Company, was
confirmed by the United States Bankruptcy Court for the Western
District of Texas, Midland-Odessa Division by order entered on
November 24, 1992, and became effective on the date hereof.
3. The Plan of Reorganization, as confirmed, contemplated
that, on the effective date of the Plan of Reorganization or as
soon thereafter as practicable, a Certificate of Amendment to
Certificate of Incorporation of the Company was to be filed by the
appropriate officers of the Company.
4. Article FOURTH of the existing Certificate of
Incorporation of the Company is amended by this Certificate of
Amendment to Certificate of Incorporation by the insertion after
the third sentence thereof of the following:
"The corporation does not have the power to issue any
non-voting stock."
5. Pursuant to Section 12.9 of the Plan of Reorganization
and Section 303 of the General Corporation Law of the State of
Delaware (the "Corporation Law"), the Board of Directors of the
Company, as reorganized effective as of the date hereof, has
designated the undersigned officers of the Company, among others,
to carry out and effect the Plan of Reorganization, including
amending the Company's Certificate of Incorporation substantially
in the form contemplated therein, with such changes therein as
shall be approved by such officers, without further action by the
Company's directors or stockholders and with like effect as if
exercised and taken by unanimous action of the directors and
stockholders of the Company.
6. The amendment made by this Certificate of Amendment
to Certificate of Incorporation has been effected by conformity
with the provisions of the Plan of Reorganization and Sections 242
and 303 of the Corporation Law, and such amendment was made,
executed and acknowledged in accordance with Section 303(c) of the
Corporation Law by the designated officers of the Company as of
the date hereof.
IN WITNESS WHEREOF, this Certificate of Amendment to Certificate
of Incorporation has been executed as of April 1, 1993.
SIGNAL TRANSFORMER CO., INC.
By: /s/ J. Randal Greaves
-------------------------------
J. Randal Greaves
Vice President, Treasurer and
Assistant Secretary
ATTEST:
/s/ Karen L. Wolf
- ----------------------------
Karen L. Wolf
Vice President and Secretary
<PAGE>
CERTIFICATE OF INCORPORATION
OF
TRANMIN, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware (particularly Chapter 1,
Title 8 of the Delaware Code and the acts amendatory thereof and supplemental
thereto, and known, identified and referred to as the "General Corporation Law
of the State of Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is
TRANMIN, INC.
SECOND: The address, including street, number, city and
county, of the registered office of the corporation in the State of Delaware
is 229 South State Street, City of Dover, County of Kent; and the name of the
registered agent of the corporation in the State of Delaware at such address
is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is One Thousand (1,000). The par
value of each of such shares is One Dollar ($1.00). All such shares are of
one class and are shares of Common Stock.
No holder of any of the shares of the stock of the corporation,
whether now or hereafter authorized and issued, shall be entitled as of right
to purchase or subscribe for (1) any unissued stock of any class, or (2) any
additional shares of any class to be issued by reason of any increase of the
authorized capital stock of the corporation of any class, or (3) bonds,
certificates of indebtedness, debentures or other securities convertible into
stock of the corporation, or carrying any right to purchase stock of any
class, but any such unissued stock or such additional authorized issue of any
stock or of other securities convertible into stock, or carrying any right to
purchase stock, may be issued and disposed of pursuant to resolution of the
Board of Directors to such persons, firms, corporations or associations and
upon such terms as may be deemed advisable by the Board of Directors in the
exercise of its discretion.
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
---- ---------------
R. G. Dickerson 229 South State Street, Dover Delaware
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of this corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for this corporation
under the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors
or class of creditors, and/or of the stockholders or class of stockholders
of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of
such compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
corporation, as the case may be, and also on this corporation.
EIGHTH: For the management of the business and for the conduct
of the affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
no share of any such class which is otherwise denied voting
power shall entitle the holder thereof to vote upon the
increase or decrease in the number of authorized shares of
said class.
NINTH: The corporation shall, to the fullest extent permitted
by Section 345 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all
of the expenses, liabilities or other matters referred to in or covered by
said section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and, as to action in
another capacity while holding such office and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
TENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in
force may be added or inserted in the manner and at the time prescribed by
said laws, and all rights at any time conferred upon the stockholders or the
corporation by this certificate of incorporation are granted subject to the
provisions of this Article TENTH.
Signed on April 8, 1983.
/s/ R. G. Dickerson
----------------------------
R. G. Dickerson
Incorporator
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TRANMIN, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"corporation") is Tranmin, Inc.
2. The certificate of incorporation of the corporation is hereby
amended by deleting in its entirety the first sentence of the first article
thereof and by substituting in lieu of said sentence the following new
sentence:
"FIRST: The name of the corporation (hereinafter called
the "corporation") is
Minitran, Inc."
3. The amendment of the certificate of incorporation herein
certified has been duly adopted in accordance with the provisions of Sections
228 and 242 of the General Corporation Law of the State of Delaware.
Signed and attested to on June 22, 1983.
/s/ Sherwood S. Willard
------------------------------
Vice President
Attest:
/s/ JoAnn J. Dahlquist
- ------------------------------
Secretary
STATE OF CONNECTICUT)
) ss: Meriden
COUNTY OF NEW HAVEN )
BE IT REMEMBERED that, on June 22, 1983, before me, a Notary
Public duly authorized by law to take acknowledgment of deeds, personally came
Sherwood S. Willard, Vice President of Tranmin, Inc., who duly signed the
foregoing instrument before me and acknowledged that such signing is his act
and deed, that such instrument as executed is the act and deed of said
corporation, and that the facts stated therein are true.
Given under my hand on June 22, 1983.
/s/ Ellen J. DeLucia
------------------------------
Notary Public
My commission expires 3/31/83
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
MINITRAN, INC.
It is hereby certified that:
1. The name of the corporation is Minitran, Inc.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article First thereof and by substituting in lieu of
said Article the following new Article:
"FIRST: The name of the corporation (hereinafter called
the "corporation") is
Signal Transformer de Puerto Rico, Inc."
3. The amendment of the certificate of incorporation herein
certified has been duly adopted in accordance with the provisions of Sections
228 and 242 of the General Corporation Law of the State of Delaware.
4. The effective date of the amendment herein certified shall
be the filing date.
Signed and attested to on December 6, 1985.
/s/ Sherwood S. Willard
------------------------------
Vice President
Attest:
/s/ JoAnn J. Dahlquist
- ------------------------------
Secretary
STATE OF CONNECTICUT)
) ss: Meriden
COUNTY OF NEW HAVEN )
BE IT REMEMBERED that, on December 6, 1985, before me, a Notary
Public duly authorized by law to take acknowledgment of deeds, personally came
Sherwood S. Willard, Vice President of Minitran, Inc., who duly signed the
foregoing instrument before me and acknowledged that such signing is his act
and deed, that such instrument as executed is the act and deed of said
corporation, and that the facts stated therein are true.
Given under my hand on December 6, 1985.
/s/ Jeanne Campbell
------------------------------------
Notary Public
My commission expires March 31, 1990
(Seal)
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
SIGNAL TRANSFORMER DE PUERTO RICO, INC.
It is hereby certified that:
1. The name of the corporation is Signal Transformer de Puerto
Rico, Inc.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article First thereof and by substituting in lieu of
said Article the following new Article:
"FIRST: The name of the corporation (hereinafter called
the "corporation") is
Signal Caribe, Inc."
3. The amendment of the certificate of incorporation herein
certified has been duly adopted in accordance with the provisions of Sections
228 and 242 of the General Corporation Law of the State of Delaware.
4. The effective date of the amendment herein certified shall
be the filing date.
Signed and attested to on February 26, 1986.
/s/ Sherwood S. Willard
------------------------------
Vice President
Attest:
/s/ JoAnn J. Dahlquist
- ------------------------------
Secretary
STATE OF CONNECTICUT)
) ss: Meriden
COUNTY OF NEW HAVEN )
BE IT REMEMBERED THAT, on February 26, 1986, before me, a
Notary Public duly authorized by law to take acknowledgment of deeds,
personally came Sherwood S. Willard, Vice President of Signal Transformer de
Puerto Rico, Inc., who duly signed the foregoing instrument before me and
acknowledged that such signing is his act and deed, that such instrument as
executed is the act and deed of said corporation, and that the facts stated
therein are true.
Given under my hand on February 26, 1986.
/s/ Jeanne Campbell
------------------------------------
Notary Public
My commission expires March 31, 1990
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION OF
SIGNAL CARIBE, INC.
Pursuant to Section 242 and 303 of the
General Corporation Law of the State of Delaware
Signal Caribe, Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Company"), does hereby certify that:
1. Insilco Corporation, a Delaware corporation ("Insilco"),
along with thirteen of its subsidiaries, including the Company, filed a
voluntary petition for reorganization pursuant to chapter 11 of the United
States Bankruptcy Code on January 13, 1991, commencing jointly administered
cases styled In re Insilco Corporation, Case No. 91-70021-RBK (Bankr. W.D.
Tex.).
2. The Amended and Restated Plan of Reorganization (the "Plan of
Reorganization") Jointly Proposed by the Debtors and the Official Joint
Committee of Unsecured Creditors, including Insilco and twelve of its debtor
subsidiaries, including the Company, was confirmed by the United States
Bankruptcy Court for the Western District of Texas, Midland-Odessa Division by
order entered on November 24, 1992, and became effective on the date hereof.
3. The Plan of Reorganization, as confirmed, contemplated that,
on the effective date of the Plan of Reorganization or as soon hereafter as
practicable, a Certificate of Amendment to Certificate of Incorporation of the
Company was to be filed by the appropriate officers of the Company.
4. Article FOURTH of the existing Certificate of Incorporation
of the Company is amended by this Certificate of Amendment to Certificate of
Incorporation by the insertion after the first sentence thereof of the
following:
"The corporation does not have the power to issue any
non-voting stock."
5. Pursuant to Section 12.9 of the Plan of Reorganization and
Section 303 of the General Corporation Law of the State of Delaware (the
"Corporation Law"), the Board of Directors of the Company, as reorganized
effective as of the date hereof, has designated the undersigned officers of
the Company, among others, to carry out and effect the Plan of Reorganization,
including amending the Company's Certificate of Incorporation substantially in
the form contemplated therein, with such changes therein as shall be approved
by such officers, without further action by the Company's directors or
stockholders and with like effect as if exercised and taken by unanimous
action of the directors and stockholders of the Company.
6. The amendment made by this Certificate of Amendment to
Certificate of Incorporation has been effected in conformity with the
provisions of the Plan of Reorganization and Sections 242 and 303 of the
Corporation Law, and such amendment was made, executed and acknowledged in
accordance with Section 303(c) of the Corporation Law by the designated
officers of the Company as of the date hereof.
IN WITNESS WHEREOF, this Certificate of Amendment to
Certificate of Incorporation has been executed as of April 1, 1993.
SIGNAL CARIBE, INC.
By: /s/ J. Randal Greaves
------------------------------
J. Randal Greaves
Vice President, Treasurer and
Assistant Secretary
ATTEST:
/s/ Karen L. Wolf
- ------------------------------
Karen L. Wolf
Secretary
<PAGE>
CERTIFICATE OF INCORPORATION
OF
STEELCO, INC.
-------------
We, the undersigned, for the purposes of associating to establish a
corporation for the transaction of the business and the promotion and conduct
of the objects and purposes hereinafter stated, under the provisions and
subject to the requirements of the laws of the State of Delaware (particularly
Chapter 1, Title 8 of the Delaware Code and the acts amendatory thereof and
supplemental thereto, and known as the "General Corporation Law of the State
of Delaware"), do make and file this Certificate of Incorporation in writing
and do hereby certify as follows, to wit:
FIRST: The name of the corporation (hereafter called the corporation)
is
STEELCO, INC.
SECOND: The respective names of the County and of the City within the
County in which the principal office of the corporation is to be located in
the State of Delaware are the County of Kent and the City of Dover. The name
of the resident agent of the corporation is The Prentice-Hall Corporation
System, Inc. The street and number of said principal office and the address by
street and number of said resident agent is 229 South State Street, Dover,
Delaware.
THIRD: The nature of the business of the corporation and the objects or
purposes to be transacted, promoted or carried on by it are as follows:
To devise, design, develop, create, manufacture, fabricate,
assemble, construct, finish, refinish, plate, re-plate, stamp, mold,
extrude, produce, improve, import, export, buy, sell, install,
maintain, exchange, job, lease, hire, let, contract in relation to,
invest in, mortgage, trade and generally deal in and with, at
wholesale and retail, as principal, agent, factor, broker, commission
merchant or otherwise, original equipment parts for the automotive
industry as well as any and all kinds of metals and products,
devises, machines, accessories, parts and appliances fabricated in
whole or in part from metals, compounds and alloys, and to be
manufacturing, contracting and merchandising of any and every kind
and nature, and to deal in and with goods, wares,
<PAGE>
merchandise and property of every kind, class, nature and
description.
To carry on a general machine shop and metal working business; to
manufacture from any kind of material any and all kinds of metal
products; to engage in and carry on the business of metallurgists,
machinists, metal workers, iron and steel converters, smiths,
fitters, cutters, boiler and plate makers and manufacturers of
automotive parts and hardware of all kinds.
To engage in the general business of molding, shaping, forming,
rolling, pressing, stamping, extruding, welding, joining, assembling,
finishing, plating, polishing, processing and fabricating any and all
kinds of metals and metal products, and by-products and products made
wholly or in part from any metal, mineral, chemical, biological,
natural or synthetic elements or objects, or the components or
by-products thereof, and to do everything necessary, convenient or
useful in the furtherance of the foregoing.
To acquire by purchase or otherwise own, hold, lease, mortgage,
sell, or otherwise dispose of, erect, construct, make, alter,
enlarge, improve, and to aid or subscribe toward the construction,
acquisition or improvement of any factories, laboratories, shops,
storehouses, warehouses, buildings and commercial and retail
establishments of every character, including all equipment, fixtures,
machinery, implements and supplies necessary, or incidental to, or
connected with, any of the purposes or business of the corporation;
and generally to perform any and all acts connected therewith or
arising therefrom or incidental thereto, and all sets proper or
necessary for the purpose of the business.
To do a general brokerage, commission merchants' and selling
agents' business; to make and enter into all manner and kinds of
contracts, agreements and obligations by or with any person or
persons, corporation or corporations, for the purchasing, requiring,
selling, financing, manufacturing and dealing in any articles of
personal property of any kind or nature whatsoever, and generally
with full power to perform any and all sets connected therewith or
arising therefrom or incidental thereto, and all acts proper or
necessary for the purpose of the business.
2
<PAGE>
To acquire by purchase, exchange, concession, easement, contract,
lease or otherwise, to hold, own, use, control, manage, improve,
maintain and develop, to mortgage, pledge, grant, sell, convey,
exchange, assign, divide, lease, sublease, or otherwise encumber and
dispose of, and to deal and trade in, real estate improved or
unimproved, lands, leaseholds, options, concessions, easements,
tenements, hereditaments and interests in real, mixed, and personal
property, of every kind and description wheresoever situated, and any
and all rights therein.
To apply for, register, obtain, purchase, lease, take licenses in
respect of or otherwise acquire, and to hold, own, use, operate,
develop, enjoy, turn to account, grant licenses and immunities in
respect of, manufacture under and to introduce, sell, assign,
mortgage, pledge or otherwise dispose of, and, in any manner deal
with and contrast with reference to:
(a) inventions, devices, formulae,processes and any
improvements and modifications thereof;
(b) letters patent, patent rights, patented processes,
copyrights, designs, and similar rights, trade-marks, trade
symbols and other indications of origin and ownership granted by
or recognized under the laws of the United States of America or
of any state or subdivision thereof, or of any foreign country or
subdivision thereof and all rights connected therewith or
appertaining thereunto;
(c) franchises, licenses, grants and concessions.
To purchase or otherwise acquire, and to hold, mortgage, pledge,
sell, exchange or otherwise dispose of, securities (which term, for
the purpose of this Article THIRD, includes, without limitation of
the generality thereof, any shares of stock, bonds, debentures,
notes, mortgages, or other obligations, and any certificates,
receipts or other instruments representing rights to receive,
purchase or subscribe for the same, or representing any other rights
or interests therein or in any property or assets) created or issued
by any persons, firms, associations, corporations, or governments or
subdivisions thereof; to make payment therefor in
3
<PAGE>
any lawful manner; and to exercise, as owner or holder of any
securities, any and all rights, powers and privileges in respect
thereof.
To make, enter into, perform and carry out contracts of every
kind and description with any person, firm, association, corporation
or government or subdivision thereof; to enter into general
partnerships, limited partnerships (whether the corporation be a
limited or general partner), joint ventures, syndicates, pools,
associations and other arrangements for carrying on of one or more of
the purposes set forth in this Certificate of Incorporation, jointly
or in common with others.
To acquire by purchase, exchange or otherwise, all, or any part
of, or any interest in, the properties, assets, business and good
will of any one or more persons, firms, associations or corporations
heretofore or hereafter engaged in any business for which a
corporation may now or hereafter be organized under the laws of the
State of Delaware; to pay for the same in cash, property or its own
or other securities; to hold, operate, reorganize, liquidate, sell or
in any manner dispose of the whole or any part thereof; and in
connection therewith, to assume or guarantee performance of any
liabilities, obligations or contracts of such persons, firms,
associations or corporations, and to conduct the whole or any part of
any business thus acquired.
To lend its uninvested funds from time to time to such extent, to
such persons, firms, associations, corporations, governments or
subdivisions thereof, and on such terms and on such security, if any,
as the Board of Directors of the corporation may determine.
To endorse or guarantee the payment of principal, interest or
dividends upon, and to guarantee the performance of sinking fund or
other obligations of, any securities, and to guarantee in any way
permitted by law the performance of any of the contracts or other
undertakings in which the corporation may otherwise be or become
interested, of any person, firm, association, corporation, government
or subdivision thereof or of any other combination, organization or
entity whatsoever.
To borrow money for any of the purposes of the
corporation, from time to time, and without limit as to amount;
4
<PAGE>
from time to time to issue and sell its own securities in such
amounts, on such terms and conditions, for such purposes and for such
prices, now or hereafter permitted by the laws of the State of
Delaware and by this Certificate of Incorporation, as the Board of
Directors of the corporation may determine; and to secure such
securities by mortgage upon, or the pledge of, or the conveyance or
assignment in trust of, the whole or any part of the properties,
assets, business and good will of the corporation, then owned or
thereafter acquired.
To draw, make, accept, endorse, discount, execute, and issue
promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable instruments and
evidences of indebtedness whether secured by mortgage or otherwise,
as well as to secure the same by mortgage or otherwise, so far as may
be permitted by the laws of the State of Delaware.
To purchase, hold, cancel, reissue, sell, exchange, transfer or
otherwise deal in its own securities from time to time to such an
extent and in such manner and upon such terms as the Board of
Directors of the corporation shall determine; provided that the
corporation shall not use its funds or property for the purchase of
its own shares of capital stock when such use would cause any
impairment of its capital, except to the extent permitted by law; and
provided further that shares of its own capital stock belonging to
the corporation shall not be voted upon directly or indirectly.
To organize or cause to be organized under the laws of the State
of Delaware, or of any other State of the United States of America,
or of the District of Columbia, or of any territory, dependency,
colony or possession of the United States of America, or of any
foreign country, a corporation or corporations for the purpose of
transacting, promoting or carrying on any or all of the objects or
purposes for which corporations may be organized, and to dissolve,
wind up, liquidate, merge or consolidate any such corporation or
corporations or to cause the same to be dissolved, wound up,
liquidated, merged or consolidated.
To conduct its business in any and all of its branches and
maintain offices both within and without the State of Delaware, in
any and all States of the United States of America, in the District
of Columbia, in any or all territories, dependencies, colonies or
5
<PAGE>
possessions of the United States of America, and in foreign
countries.
To carry out all or any part of the foregoing objects and
purposes in any and all parts of the world and to conduct business in
all or any of its branches as principal, factor, agent, contractor or
otherwise, either alone or through or in conjunction with any
corporations, associations, partnerships, firms, trustees,
syndicates, individuals, organizations and other entities located in
or organized under the laws of any part of the world, either directly
or indirectly as a member of any partnership, general or limited,
and, in carrying out, conducting or performing its business and
attaining or furthering any of its objects and purposes, to maintain
offices, branches and agencies in any part of the world, to make and
perform any contracts and to do any acts and things, and to carry on
any business, and to exercise any powers suitable, convenient or
proper for the accomplishment of any of the objects and purposes
herein specified or which at any time may appear conducive to or
expedient for the accomplishment of any of such objects and purposes
and which might be engaged in or carried on by a corporation formed
under the General Corporation Law and to have and exercise all of the
powers conferred by the laws of the State of Delaware upon
corporations formed under the General Corporation Law.
The foregoing provisions of this Article THIRD shall be construed
both as purposes and powers and each as an independent purpose and power. The
foregoing enumeration of specific purposes and powers shall not be held to
limit or restrict in any manner the purposes and powers of the corporation,
and the purposes and powers herein specified shall, except when otherwise
provided in this Article THIRD, be in no wise limited or restricted by
reference to, or inference from, the terms of any provision of this or any
other Article of this Certificate of Incorporation; provided, that the
corporation shall not carry on any business or exercise any power in the State
of Delaware or in any state, territory, or country which under the laws
thereof the corporation may not lawfully carry on or exercise.
FOURTH: The total number of shares of capital stock which the
corporation shall have authority to issue is One Thousand (1,000) shares of
Common Stock of the par value of One Dollar ($1.00) per share.
6
<PAGE>
Each share of Common Stock shall entitle the holder thereof to have
one (1) vote for the election of directors and upon any other matter presented
to the stockholders at any meeting.
Each share of stock, issued by the corporation for which the full
consideration has been paid or delivered, shall be deemed fully-paid stock and
non-assessable.
No holder of any stock of the corporation shall be entitled as of
right to purchase or subscribe for or otherwise acquire any shares of stock of
any class, whether now or hereafter authorized, or any securities or
obligations convertible into, or exchangeable for, or any right, warrant or
option to purchase, any shares of stock or any class which the corporation may
at any time hereafter issue or sell, whether now or hereafter authorized, but
any and all such stock, securities, obligations, rights, warrants and options
may, without any action by the stockholders, be issued and disposed of by the
Board of Directors to such persons, firms, corporations or associations upon
such terms and for such consideration as the Board of Directors in its
discretion may from time to time determine, without first offering any thereof
to any class of stockholders.
The corporation shall be entitled to trust the person in whose name
any share, right or option is registered as the owner thereof, for all
purposes, and shall not be bound to recognize any equitable or other claim to
or interest in such shares, right or option on the part of any other person,
whether or not the corporation shall have notice thereof, save as may be
expressly provided by the laws of the State of Delaware.
FIFTH: The minimum amount of capital with which the corporation will
commence business is One Thousand Dollars.
SIXTH: The names and places of residence of each of the incorporators
are as follows:
NAME PLACE OF RESIDENCE
R.G. Dickerson Dover, Delaware
J.A. Kent Dover, Delaware
Z.A. Pool, III Dover, Delaware
SEVENTH: The corporation is to have perpetual existence.
EIGHTH: The private property of the stockholders of the corporation
shall not be subject to the payment of corporate debts to any extent whatever.
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<PAGE>
NINTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and
stockholders, it is further provided:
1. The number of directors of the corporation shall be as
specified in the By-Laws of the corporation but such number may from
time to time be increased or decreased in such manner as may be
prescribed by the By-Laws. In no event shall the number of directors
be less than the minimum number prescribed by law. The election of
directors need not be by ballot. Directors need not be stockholders.
2. In furtherance and not in limitation of the powers conferred
by the laws of the State of Delaware, the Board of Directors is
expressly authorized and empowered:
(a) To make, alter, amend, and repeal By-Laws, subject to
the power of the stockholders to alter or repeal the By-Laws
made by the Board of Directors.
(b) Subject to the applicable provisions of the By-Laws then
in effect, to determine, from time to time, whether and to what
extent and at what times and places and under what conditions
and regulations the accounts and books of the corporation, or
any of them, shall be open to the inspection of the
stockholders, and no stockholder shall have any right to
inspect any account or book or document of the corporation,
except as conferred by the laws of the State of Delaware,
unless and until authorized so to do by resolution of the Board
of Directors or of the stockholders of the corporation.
(c) Without the assent or vote of the stockholders, to
authorize and issue obligations of the corporation, secured or
unsecured, to include therein such provisions as to
redeemability, convertibility or otherwise, as the Board of
Directors, in its sole discretion, may determine, and to
authorize the mortgaging or pledging, as security
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<PAGE>
therefor, of any property of the corporation, real or personal,
including after-acquired property.
(d) To establish bonus, profit sharing or other types
of incentive or compensation plans for the employees (including
officers and directors) of the corporation and to fix the
amount of profits to be distributed or shared and to determine
the persons to participate in any such plans and the amounts of
their respective participations.
In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon it, the Board of Directors may
exercise all such powers and do all such acts and things as may be
exercised or done by the corporation, subject, nevertheless, to the
provisions of the laws of the State of Delaware, of the Certificate
of Incorporation and of the By-Laws of the corporation.
3. Any director or any officer elected or appointed by the
stockholders or by the Board of Directors may be removed at any time
in such manner as shall be provided in the By-Laws of the
corporation.
4. In the absence of fraud, no contract or other transaction
between the corporation and any other corporation, and no set of the
corporation, shall in any way be affected or invalidated by the fact
that any of the directors of the corporation are pecuniarily or
otherwise interested in, or are directors or officers of, such other
corporation; and, in the absence of fraud, any director,
individually, or any firm of which any director may be a member, may
be a party to, or may be pecuniarily or otherwise interested in, any
contract or transaction of the corporation; provided, in any case,
that the fact that he or such firm is so interested shall be
disclosed or shall have been known to the Board of Directors or a
majority thereof; and any director of the corporation who is also a
director or officer of any such other corporation, or who is also
interested, may be counted in determining the existence of a quorum
at any meeting of the Board of Directors of the corporation which
shall authorize any such contract, act or transaction and may vote
thereat to authorize any such contract, act or transaction, with like
force and effect as if he were not such director or officer of such
other corporation, or not so interested.
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<PAGE>
5. Any contract, set or transaction of the corporation or of the
directors may be ratified by a vote of a majority of the shares
having voting powers at any meeting of stockholders, or at any
special meeting called for such purpose, and such ratification shall,
so far as permitted by law and by this Certificate of Incorporation,
be as valid and as binding as though ratified by every stockholder of
the corporation.
TENTH: From time to time any of the provisions of this Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the corporation by
this Certificate of Incorporation are granted subject to the provisions of
this Article TENTH.
IN WITNESS WHEREOF, we, the undersigned, being all of the incorporators
hereinabove named, do hereby further certify that the facts hereinabove stated
are truly set forth and accordingly have hereunto set our respective hands and
seals.
Dated at Dover, Delaware
September 2, 1964
____________________________(L.S.)
____________________________(L.S.)
____________________________(L.S.)
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STATE OF DELAWARE)
) SS.:
COUNTY OF KENT )
BE IT REMEMBERED that personally appeared before me, F. K. Tuller, a
Notary Public in and for the County and State aforesaid, R. G. Dickerson, J.
A. Kent, and Z. A. Pool, III, all the incorporators who signed the foregoing
Certificate of Incorporation, known to me personally to be such, and I having
made known to them and each of them the contents of said Certificate of
Incorporation, they did severally acknowledge the same to be the act and deed
of the signers, respectively, and that the facts therein stated are truly set
forth.
GIVEN under my hand and seal of office this 2nd day of September, A. D.
1964.
----------------------------
F. Kenneth Tuller
Notary Public
<PAGE>
AGREEMENT OF MERGER
BETWEEN
STEEL PARTS CORPORATION
AND
PEERLESS WIRE GOODS COMPANY, INC.
THIS AGREEMENT CONSISTS OF pp. 1-9, 9A, 9B, 10-17, 17A, 18-22, 22A,
23, 24, 24A, 25-30.
<PAGE>
AGREEMENT OF MERGER
THIS AGREEMENT OF MERGER, dated as of November 20, 1969, Pursuant to
Sections 25-231 and 25-314a of the Indiana General Corporation Act and Section
252 of the Delaware General Corporation Law, by and between STEEL PARTS
CORPORATION ("Steel Parts"), a wholly-owned subsidiary of INSILCO CORPORATION
("Insilco"), and PEERLESS WIRE GOODS COMPANY, INC. ("Peerless"), Steel Parts
and Peerless being herein sometimes collectively called the "Constituent
Corporations";
W I T N E S S E T H:
WHEREAS Peerless is a corporation organized and existing under the
laws of the State of Indiana and Steel Parts is a corporation organized and
existing under the laws of the State of Delaware; and
WHEREAS the laws of the States of Indiana and Delaware permit and
authorize the merger of said corporations; and
WHEREAS the respective Boards of Directors of Peerless and Steel
Parts deem it desirable and in the best interests of their respective
corporations and their respective shareholders that Peerless be merged with
and into Steel Parts pursuant to the provisions of the Indiana General
Corporation Act and the Delaware General Corporation Law upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and warranties herein contained, it is hereby
agreed by and between the parties hereto that Steel Parts and Peerless shall
be merged as of the Effective Date (as defined in Section 3.2 hereof) into a
single surviving corporation (herein sometimes called the "Surviving
Corporation"), which shall be Steel Parts, one of the Constituent
Corporations, which shall continue its corporate existence and shall remain a
Delaware corporation governed by the laws of that State, all on the terms and
conditions herein set forth.
I. NAME CERTIFICATE OF INCORPORATION AND BY-LAWS
The name of the Surviving Corporation shall be "Steel Parts
Corporation." The Certificate of Incorporation and the By-Laws of Steel Parts
as in effect on the Effective Date shall from and after the Effective Date be
the Certificate of Incorporation and By-Laws of the Surviving Corporation
until changed as provided therein or by Delaware law.
<PAGE>
II. STATUS AND CONVERSION OF SECURITIES
2.1. Peerless Common Stock. The shares of Peerless Common Stock
outstanding on the Effective Date (except any shares of Peerless Common Stock
owned on the Effective Date by Peerless, which shall be cancelled) shall be
converted into and exchanged for shares of Insilco Common Stock at the rate of
1,767 shares or Insilco Common Stock for each share of Peerless Common Stock
(the "Common Conversion Rate"). The parties to this Agreement understand that
the Common Conversion Rate gives effect to the 5% stock dividend payable
December 1, 1969 to holders of Insilco Common Stock of record November 14,
1969, and no further adjustment shall be made in the Common Conversion Rate by
virtue of said dividend. After the Effective Date, each holder of an
outstanding certificate or certificates theretofore representing shares of
Peerless Common Stock shall be instructed to surrender such certificate or
certificates to Continental Illinois National Bank and Trust Company of
Chicago, co-transfer agent for Insilco's Common Stock (the "Exchange Agent"),
and shall receive in exchange therefor a certificate or certificates
representing the number of whole shares of Insilco Common Stock into and for
which the shares of Peerless Common Stock theretofore represented by such
surrendered certificate or certificates have been converted. In lieu of the
issuance of fractional Common Stock, the Exchange Agent shall pay to each
holder of an outstanding certificate or certificates theretofore representing
shares of Peerless Common Stock upon the surrender thereof as aforesaid an
amount in cash equal to the fair market value of any fractional interest in a
share of Insilco Common Stock represented by such certificate or certificates,
such value to be determined on the basis of the closing price of Insilco
Common Stock on the New York Stock Exchange on the last day prior to the date
of such surrender. Until surrendered and exchanged, each outstanding
certificate theretofore representing shares of Peerless Common Stock shall be
deemed for all purposes, other than the payment of dividends or other
distributions, if any, to stockholders of Insilco, to represent the number of
whole shares of Insilco Common Stock into and for which the shares of Peerless
Common Stock theretofore represented thereby shall have been converted. No
dividend or other distribution, if any, payable to holders of record of shares
of Insilco Common Stock shall be paid to tile holders of such outstanding
certificates theretofore representing shares of Peerless Common Stock;
provided, however, that upon surrender and exchange of such certificates,
there shall be paid to the record holders of the certificate or certificates
issued in exchange therefore, the amount the without interest thereon, of
dividends and other distributions, if any, which theretofore have been
declared and become payable with respect to the number of whole shares of
Insilco Stock represented thereby.
2
<PAGE>
2.2. Peerless Preferred Stock. The shares of Peerless 6% Cumulative
Preferred Stock (the "Peerless Preferred Stock") outstanding on the Effective
Date (except any shares of Peerless Preferred Stock owned on the effective
date by Peerless, which shall be cancelled) shall be converted into and
exchanged for shares of Insilco Common Stock at the rate of four shares of
Insilco Common Stock for each share of Peerless Preferred Stock (the
"Preferred Conversion Rate"). The parties to this Agreement understand that
the Preferred Conversion Rate gives effect to the 5% stock dividend payable
December 1, 1969 to holders of Insilco Common Stock of record November 14,
1969, and no adjustment shall be made in the Preferred Conversion Rate by
virtue of said dividend. After the Effective Date, each holder of an
outstanding certificate or certificates theretofore representing shares of
Peerless Preferred Stock shall be instructed to surrender such certificate or
certificates to the Exchange Agent, and shall receive in exchange therefor a
certificate or certificates representing the number of shares of Insilco
Common Stock into and for which the shares of Peerless Preferred Stock
theretofore represented by such surrendered certificate or certificates have
been converted. As of the Effective Date, dividends shall cease to accrue on
the Peerless Preferred Stock, and upon surrender and exchange, of any
certificate or certificates for shares or Peerless Preferred Stock, all
dividends accrued on said shares to the Effective Date shall be paid to the
holders of record of such Peerless Preferred Stock at the rate provided for in
the Articles of Incorporation of Peerless, without interest thereon. Until
surrendered and exchanged, each outstanding certificate theretofore
representing shares of Peerless Preferred Stock shall be deemed for all
purposes, other than the payment of dividends or other distributions, if any,
to stockholders of Insilco to represent the number of whole shares of Insilco
Common Stock into and for which the shares of Peerless Preferred Stock
theretofore represented thereby shall have been converted. No dividend or
other distribution if any, payable to holders of record of shares of Insilco
Common Stock shall be paid to the holders of such outstanding certificates
theretofore representing shares of Peerless Preferred Stock; provided,
however, that upon surrender and exchange of such certificates, there shall be
paid to the record holders of the certificate or certificates issued in
exchange therefor, the amount, without interest thereon, of dividends and
other distributions, if any, which theretofore have been declared and become
payable with respect to the number of whole shares of Insilco Common Stock
represented thereby.
2.3. Peerless Capital Stock Owned by Peerless. No cash or securities
or other property shall be issued in respect of shares of Peerless capital
stock owned on the Effective Date by Peerless and on the Effective Date all
such shares of Peerless capital stock owned by Peerless and the certificates
representing the same shall be cancelled and all rights in respect thereof
shall cease to exist.
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<PAGE>
2.4. Steel Parts Common Stock. All authorized shares of Common Stock
of Steel Parts, whether issued or unissued, outstanding or reacquired, shall
continue unchanged as shares of Common Stock of the Surviving Corporation.
III. STOCKHOLDER APPROVALS; FILING; EFFECTIVE DATE
3.1. Stockholder Approvals. (a) Promptly after the execution and
delivery of this Agreement, (i) this Agreement shall be submitted to Insilco
as the sole stockholder of Steel Parts for adoption and approval by written
consent in accordance with the Delaware General Corporation Law, and (ii) a
meeting of the stockholders of Peerless shall be called on at least ten days
prior written notice, to be held in accordance with the General Corporation
Act of the State of Indiana on or before December 5, 1969 to consider and vote
upon the adoption and approval of this Agreement.
(b) If this Agreement is approved and adopted by the written consent
or Insilco in accordance with General Corporation Law of the State of
Delaware, and if it is approved at the aforesaid meeting by the holders of at
least a majority of the outstanding shares of capital stock of each class of
Peerless entitled to vote thereon as a class, and at least a majority of the
total shares entitled to vote thereon, in accordance with the General
Corporation Act of the State of Indiana, such facts shall be certified upon
executed copies of this Agreement by the Secretary or an Assistant Secretary
of Steel Parts and of Peerless under their respective corporate seals. Upon
the expiration of the 30-day waiting period required by Section 25-231(f) of
the Indiana General Corporation Act, this Agreement shall be submitted to the
Boards of Directors of Steel Parts and Peerless, and if approved as provided
in said Section 25-231(f), such facts shall be certified upon this Agreement
in the same manner as provided in the preceding sentence. Thereafter, this
Agreement, so adopted, approved and certified, shall be signed, sealed and
acknowledged by and on behalf of Steel Parts and Peerless; and if the merger
is not thereafter abandoned as permitted by the provisions of this Agreement,
this Agreement so adopted, approved, certified, signed, sealed and
acknowledged shall be presented to the Secretary of the State of Indiana in
the manner provided for by Sections 25-231(f) -- 25-231(h) of the Indiana
General Corporation Act. After the Secretary of State of Indiana has issued a
certificate of merger, this Agreement shall be submitted for filing and
recording in accordance with the General Corporation Law of the State of
Delaware.
3.2. Filing Effective Date. This Agreement shall become effective on
the later of (a) the date when this Agreement duly certified, signed, sealed
and acknowledged has been filed in the office of the Secretary of State of the
State of Delaware, or (b) the close of business on January 10, 1970 (the
"Effective Date"). It shall then be promptly recorded in the office of the
Recorder of Deeds, County
4
<PAGE>
of Kent, State of Delaware. Steel Parts and Peerless shall agree upon the date
and the time on which this Agreement shall be submitted for filing to the
Secretaries of State of the States of Indiana and Delaware; provided, however
that such submission for filing shall be made as promptly as practicable and
in any event on or before January 23, 1970, unless a later date shall have
been approved by the Boards of Directors of Steel Parts and Peerless.
IV. CERTAIN EFFECTS OF MERGER
When the merger becomes effective, the separate existence or Peerless
shall be merged into Steel Parts and the Surviving Corporation, without
further action, shall succeed to and shall possess and enjoy all the rights,
privileges, powers, and franchises as well of a public as of a private nature,
and be subject to all the restrictions, disabilities, and duties of Peerless,
and all and singular, the rights, privileges, powers and franchises of
Peerless and all property, real, personal, and mixed, and all debts due to
Peerless on whatever account, including stock subscriptions and all other
things in action and every other interest, of or belonging to or due to
Peerless shall be taken and transferred to and vested in the Surviving
Corporation as effectually as they were vested in Peerless; and all property,
rights privileges, powers, and franchises, and all and every other interest
shall be thereafter as effectually the property of the Surviving Corporation
as they were of Peerless; and the title to any real estate or any interest
therein and to any other property, whether vested by deed or otherwise, under
the laws of the State of Indiana or of any other jurisdiction, vested in
Peerless, shall not revert or be in any way impaired by reason of the merger;
provided, however, that all rights of creditors and all liens upon the
property of Peerless shall be preserved unimpaired, and all debts,
liabilities, and duties of Peerless shall thenceforth attach to the Surviving
Corporation, and may be enforced against it to the same extent as they had
been incurred or contracted by it and the Surviving Corporation shall
thenceforth be responsible and liable for all the liabilities, obligations and
penalties of Peerless, including but not limited to liabilities, obligations
and penalties of Peerless under existing leases and guarantees of leases. Any
claim existing or action or proceeding, civil or criminal, pending by or
against either Peerless or Steel Parts may be prosecuted as if the merger had
not taken place, or the Surviving Corporation may be substituted in its place;
and any judgment rendered against either Peerless or Steel Parts may be
enforced against the Surviving Corporation. At any time, or from time to time,
after the Effective Date, the last acting officers of Peerless, or the
corresponding officers of the Surviving Corporation, may, in the name of
Peerless, execute and deliver all such proper deeds, assignments and other
instruments and take or cause to be taken all such further or other action as
the Surviving Corporation may deem necessary or desirable in order to vest,
perfect or confirm in the Surviving Corporation title to
5
<PAGE>
and possession of all of Peerless's property, rights, privileges, immunities,
powers and franchises, and otherwise to carry out the purposes of this
Agreement.
V. COVENANTS
5.1. Covenants. Peerless agrees that, unless Steel Parts shall have
otherwise consented, prior to the Effective Date;
(a) Peerless will operate its business only in the usual, regular and
ordinary manner and will use its best efforts to (i) preserve its present
business organization intact, (ii) keep available the services of the present
officers and employees, and (iii) preserve the present relationships of
Peerless with persons having business dealings with it.
(b) No amendment will be made in the Articles of Incorporation or
By-Laws of Peerless, and Peerless will not merge or consolidate with any other
corporation.
(c) No change will be made in the number of shares of Peerless Common
Stock or Peerless Preferred Stock issued and outstanding; no option, warrant
or any other right to purchase or to convert any obligation onto shares of
Peerless Common Stock or Preferred Stock will be granted or made by Peerless.
(d) No dividend or other distribution or payment will be declared,
paid or made by Peerless in respect of the outstanding shares of its Common
Stock or Preferred Stock other than (i) regular cash dividends to holders of
its 6% Cumulative Preferred Stock, (ii) a cash dividend in the amount of 35
cents per share payable December 1, 1969 to holders of Peerless Common Stock
of record November 15, 1969, and (iii) a cash dividend not exceeding 20 cents
per share payable to holders of Peerless Common Stock of record immediately
prior to the close of business on January 10, 1970. No purchase, redemption or
other acquisition will be made by Peerless of shares of Peerless Preferred
Stock or Common Stock.
(e) Peerless will not encumber or mortgage any of its property or
assets or enter into any transaction or make or enter into any contract or
commitment which by reason of its size or otherwise is not in the ordinary
course of business, and Peerless will not, other than in the ordinary course
of business, incur any obligation (contingent or otherwise), or transfer or
covey (except as permitted by Section 5.1(d)) or acquire any material assets
or property or enter into or amend or modify any arrangement, agreement, or
undertaking (including, without limitation, employment agreements with
executives not terminable on 60 days' or less notice without cost or
liability), or pay or promise to pay any bonus
6
<PAGE>
or special compensation to employees other than in accordance with prior
practices.
(f) At the earliest practicable date, and in any event by December
20, 1969, Peerless will furnish to Steel Parts the Balance Sheet of Peerless
as of November 30, 1969, and the related Statement of Profit and Loss and
Earned Surplus of Peerless for the eleven month period then ended. Such
financial statements will have been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with that of the
immediately preceding year, and will present fairly the financial position of
Peerless at said date and the results of the operations of Peerless for the
eleven month period then ended.
(g) Peerless shall permit Steel Parts to audit its books, and to that
end shall afford to Steel Parts and its auditors and agents full and complete
access during normal business hours, to any and all books and records
pertaining to the business and operations of Peerless and Peerless' financial
statements for the period referred to in Section 5.1(f) hereof. Steel Parts
and Insilco agree to keep all such specific information confidential until the
Effective Date or until such information otherwise becomes public knowledge.
5.2. Covenant of Steel Parts. Steel Parts agrees that Insilco shall
prepare and file with the New York Stock Exchange an application for the
listing thereon of such number of shares of Insilco Common Stock as, when
added to all treasury shares of Insilco Common Stock held by it on the
Effective Date, will equal the number of shares issuable pursuant to this
agreement.
VI. PRESENTATIONS AND WARRANTIES
6.1. Representations and Warranties of Peerless. Peerless represents
and warrants to Steel as follows:
(a) Due Incorporation, Good Standing, Qualification. Peerless is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Indiana with all requisite corporate power and authority
to own, operate and lease its properties and to carry on its business as now
being conducted. The copies of the Articles of Incorporation of Peerless and
all amendments thereto and the By-Laws of Peerless, as amended to date, which
have been delivered to Steel Parts, are complete and correct. Peerless has
delivered to Steel Parts a list, certified by an officer of Peerless to be
correct and complete, setting forth as of the date of this Agreement the
jurisdictions in which Peerless is qualified to transact business as a foreign
corporation.
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<PAGE>
(b) Authorized Capitalization. The authorized capital stock of
Peerless consists of 200,000 shares of Peerless Common Stock, par value $5 per
share, and 750 shares of 6% Cumulative Preferred Stock, par value $100 per
share, of which 165,666 2/3 shares of Common Stock and 625 shares of Preferred
Stock are outstanding as of the date hereof. All of such outstanding shares
have been validly issued and are fully paid and nonassessable with no personal
liability attaching to the ownership thereof, and insofar as known to Peerless
there are no agreements or understandings among the stockholders of Peerless
with respect to the voting of shares of its Common Stock or Preferred Stock on
any matter other than agreements with Steel Parts relating to the merger
provided for herein.
(c) Options, Warrants, Rights, etc. Peerless does not have
outstanding any option, warrant, or other right to purchase or convert any
obligation into any shares of its Common Stock or Preferred Stock.
(d) Affiliates. Peerless has delivered to Steel Parts, or will
deliver to Steel Parts not later than the 10th day preceding the Effective
Date, a list, certified by an officer of Peerless, setting forth the
beneficial ownership, based upon information furnished by the persons
concerned, of Peerless Common Stock and Preferred Stock by each officer and
director of Peerless, by "associates" of such officers and directors (as the
term "associates" is defined by the Rules and Regulations of the Securities
and Exchange Commission), and by each other person, who, to the knowledge of
Peerless, owns beneficially 5% or more of the issued and outstanding shares of
Peerless, Common Stock or Preferred Stock. There is no other person who, to
the knowledge of Peerless, directly or indirectly controls or is controlled by
Peerless or is under director indirect common control with Peerless.
(e) Financial Statements. The Balance Sheets of Peerless as of
December 31 of each year from 1965 through 1968, and the related Statements of
Profit and Loss and Earned Surplus of Peerless for the fiscal years then
ended, including in each case the related schedules and notes, all certified
by Wolf and Company, independent certified accountants, have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with that of the immediately preceding year, are correct and
complete and fairly present the financial position and results of operations
of Peerless as of said dates and for the years then ended. Said Balance Sheets
make full and adequate provision (in accordance with generally accepted
accounting principles) for all obligations, liabilities and commitments (fixed
and contingent) of Peerless as of the respective dates thereof, and as of said
dates Peerless had no obligations, liabilities or commitments (fixed or
contingent) not disclosed or reserved against (in accordance with generally
accepted accounting principles) on said Balance Sheets or in the notes
thereto. The unaudited Balance Sheet of Peerless as of September
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<PAGE>
30, 1969 and the related Statement of Profit and Loss and Earned Surplus of
Peerless for the nine months ended September 30, 1969, including the related
schedules and notes, certified by the Treasurer of Peerless, fairly present
the financial position and results of operations of Peerless as of said date
and for the nine months period then ended, except that such financial
statements may be subject to normal year-end adjustments.
(f) No Material Adverse Change. Since September 30, 1969, there has
not been (i) any material adverse change in the financial condition, business,
properties or assets of Peerless; (ii) any material loss or damage to any of
the properties or assets of Peerless (whether or not covered by insurance)
which materially affects or impairs the ability of Peerless to conduct its
business or any labor trouble or any other even or condition of any character
which has materially and adversely affected the business of Peerless; (iii)
any mortgage or pledge of any of the properties or assets of Peerless, or any
indebtedness incurred by Peerless; other than indebtedness, not material in
the aggregate, incurred in the ordinary course of business; (iv) any dividend
declared by Peerless or any payment or distribution made by Peerless to its
stockholders or any purchase or redemption by Peerless of any shares of
Peerless Common Stock or Preferred Stock, except as provided for in Section
5.1(d) hereof; (v) any purchase, redemption, or other acquisition by Peerless
of any shares of its Common Stock or Preferred Stock; or (vi) any issuance,
sale or other disposition of any shares of Peerless Common Stock or Preferred
Stock or of any evidence of indebtedness or other securities of Peerless.
(g) Title of Properties. Peerless has good and marketable title to
all of its assets, including without limitation all assets reflected in its
Balance Sheet as of September 30, 1969 referred to in Section 6.1(e) hereof,
and all assets acquired subsequent to September 30, 1969 (except personal
property disposed of subsequent to said date in the ordinary course of
business), free and clear of any mortgage, lien, pledge, charge, claim or
encumbrance, except (i) as shown on said unaudited Balance Sheet as of
September 30, 1969 or in the notes thereto; (ii) the lien of taxes not yet due
or payable; and (iii) such imperfection of title and encumbrances, if any, as
do not materially detract from the value, or interfere with the present use,
of the assets subject thereto or affected thereby, or otherwise materially
impair business operations. All leases pursuant to which Peerless leases any
substantial amount of real or personal property are valid and effective in
accordance with their respective terms, and there is not, to the knowledge of
Peerless, under any of such leases, any existing default, event of default or
event which with notice or lapse of time or both would constitute a default on
the part of any other party to any such lease.
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(h) List of Documents. Except as waived in writing by Steel Parts,
Peerless has delivered to Steel Parts a list of the items set forth in (1),
(2), (3), and (4) below, and Peerless will deliver to Steel Parts, not later
than the 10th day preceding the Effective Date, a list of the items in (5),
(6) and (7) below, in each case certified by an officer of Peerless to be
correct and complete:
(1) all material contracts, agreements, leases and licenses of a
kind which would be required to be field (or incorporated by
reference) by Peerless as exhibits if Peerless were filing on the
date on which such list is delivered a Registration Statement on
Form S1 under the Securities Act of 1933, as amended;
(2) all collective bargaining agreements, employment and
consulting agreements with executives, executive compensation plans,
deferred compensation agreements, employee pension plans or
retirement plans, employee profit-sharing plans and employee stock
purchase and stock option plans of Peerless;
(3) all leases of real property to which Peerless is a party
other than leases of warehousing space involving the payment by or
to Peerless of a monthly rental of $500 or less for each location;
and a brief description of the principal buildings and structures
located thereon;
(4) all other contracts, agreements, leases, licenses and
commitments to which Peerless is a party, except (i) contracts or
commitments involving the payment by or to Peerless of less than
$25,000 with respect to any one contract or commitment (but not
excepting any group of similar contracts involving the payment by
Peerless of more than a total of $100,000) and (ii) contracts and
commitments made in the ordinary course of business;
(5) the names and current annual rates of compensation from
Peerless of all the present directors of Peerless and the names and
current rates of compensation from Peerless of all its respective
officers and employees whose current annual salary rate (exclusive
of sales commissions) is $25,000 or more;
(6) the names of any pensioned employees of Peerless whose
pensions are unfunded and are not paid pursuant to any formalized
pension arrangements of Peerless, their ages and their current
annual unfunded pension rates; and
10
<PAGE>
(7) the name of each bank in which Peerless has an account of
safe deposit box.
True and complete copies of the documents referred to in such list
are or will be made available for inspection in Peerless' office or have been
delivered to Steel Parts and neither Peerless nor, to its knowledge, any other
party, is in default in any material respect under the terms of any contract,
commitment, agreement, lease, license or understanding set forth in the list
referred to in clauses (1), (2), (3) and (4) above.
(i) Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of Peerless, threatened against or affecting Peerless, at
law or in equity, or before or by any Federal, state, municipal or other
governmental or non-governmental department, commission, board, bureau,
agency, or instrumentality, that can be reasonable expected to result in any
materially adverse change in the business, properties, operations, prospects,
or assets or in the condition, financial or otherwise, of Peerless.
(j) Tax Returns. Peerless has filed all tax returns and reports
required to be filed including, but without limitation, returns of Federal and
State income taxes, and has paid in full or made adequate provision for the
payment of all taxes shown to be due on such tax returns and reports or
otherwise due and payable. The Federal income tax returns of Peerless for all
taxable years through and including the fiscal year ended December 31, 1964,
have been examined by the Federal tax authorities and no proposed (but
unassessed) additional taxes, interest, or penalties have been asserted with
respect to the years examined or with respect to any subsequent year. Peerless
is not a party to any action or proceeding by any governmental authority for
assessment or collection of taxes nor has any claim for assessment or
collection of taxes been asserted or threatened against Peerless.
(k) No Federal, state or local governmental authority has threatened
or initiated proceedings for violation of any laws or regulations relating to
the employment of labor, including the provisions thereof relating to wages,
hours, collective bargaining and the payment of Social Security taxes. There
are no pending or threatened strikes, work stoppages or slow-downs by any
group of Peerless employees.
(l) No violation. Consummation of the merger will not violate or
result in a breach of or constitute a default under (i) any provision or
restriction of any charter, by-law, loan, indenture or mortgage of Peerless,
or (ii) any provision or restriction of any lien, lease, agreement, contract,
instrument, order, judgment, award, decree, ordinance or regulation or any
other restriction of any kind or character to which any property of Peerless
is subject or by which Peerless is
11
<PAGE>
bound, except the loan agreement dated December 6, 1996 under which, as of
October 15, 1969, Peerless was indebted in the principal amount of
$302,220.71.
(m) Business Relationships. Except as disclosed in the letter dated
November ___, 1969 from Ernest W. Schilling, President of Peerless, to Harold
Rose, Vice President of Steel Parts, there has been no material interruption
of business relationships with any supplier, customer or other party with whom
Peerless had any agreement or other arrangement during the nine months ended
September 30, 1969. No one of Peerless' customers accounted for more than 35%
of Peerless sales during the nine month period ended September 30, 1969, and
except as disclosed in the aforesaid letter, Peerless has no knowledge or
notice that any one of its major customers contemplates any substantial
reduction in its level of purchases from Peerless, or from Steel Parts as the
successor to the business of Peerless.
(n) Orders. Since December 31, 1963, Peerless has not placed orders
for materials, merchandise or supplies in quantities which are exceptional or
unusual based upon past operating practices of Peerless nor accepted any order
from any customer under conditions relating to price, terms of payment, time
of delivery or like matters materially different from the conditions regularly
and usually specified for acceptance of orders for similar merchandise from
customers similarly situated.
(o) New Developments. Peerless has no knowledge or notice of any new
invention, procedure or method of manufacturing developed by any of its
competitors, customers or any other manufacturer which could reasonably be
expected to supersede or make obsolete any invention, procedure or method of
manufacturing used by Peerless.
(p) Patents, etc. The ownership by Peerless of patents, patent
applications, processes, designs, patterns, blueprints, trademarks, service
marks trade names, franchises, licenses and rights in respect thereof is not
necessary for the continued conduct of the business of Peerless as presently
conducted.
6.2. Representations and Warranties of Steel Parts. Steel Parts
represents and warrants to Peerless as follows:
(a) Steel Parts is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, and duly qualified
as a foreign corporation and in good standing in the State of Indiana.
(b) Steel Parts has the corporate power to execute this Agreement,
and, subject to the terms and conditions hereof, to consummate the
transactions
12
<PAGE>
provided for herein. The execution of this Agreement has been, and prior to
the Effective Date the completion of the merger provided for herein will be
duly authorized by all necessary action of Steel Parts' Board of Directors and
its sole stockholder.
(c) Insilco is a corporation duly organized, validly existing and in
good standing under the laws of the State of Connecticut. Insilco and its
subsidiaries have the corporate power to own their property and to carry on
their business as now being conducted. Insilco is duly qualified to do
business and is in good standing in each jurisdiction in which it owns real
property or operates a plant. Insilco has corporate power to execute and
deliver the undertaking by it endorsed on this Agreement and such undertaking
has been duly authorized by all necessary action of Insilco's Board of
Directors.
(d) As of October 14, 1969, Insilco had an authorized capital stock
consisting of (i) 15,000,000 shares of Common Stock, without par value, of
which, as of said date, 7,609,231 shares were issued and outstanding, 68,847
shares were issued and held as treasury shares by Insilco, and 2,773,539
shares were reserved for issuance under employee stock option plans, or upon
conversion of Insilco's outstanding convertible preferred stock and
debentures; (ii) 2,000,000 shares of preferred stock issuable in series, of
which, as of said date, 800,182 shares were issued and outstanding as
Convertible Second Preferred Stock Series A; (iii) 38,430 shares of 8%
Convertible Preferred Stock, of which, as of said date, 37,820 shares were
issued and outstanding, and 610 shares were held as Treasury shares by
Insilco. Except as aforesaid, at October 14, 1969 Insilco had no obligation to
issue additional shares of its capital stock. All of the issued and
outstanding shares of capital stock of Insilco are validly issued, fully paid
and nonassessable.
(e) Except as provided for in subparagraph (d) above, at October 14,
1969 Insilco had outstanding no securities convertible or which may become
convertible into its capital stock, and no options, warrants, rights,
agreements, or other instruments pursuant to which any person has or may have
the right to acquire any shares of its capital stock.
(f) The capitalization of Insilco as heretofore set forth in
subparagraph (d) above will not vary prior to the Effective Date except as
affected by (i) the exercise of stock options, (ii) the purchase of shares of
stock by Insilco for its treasury, (iii) the issuance of shares of Insilco's
Common Stock, or of any other securities convertible into shares of Insilco's
Common Stock, or of any combination thereof, in connection with any mergers or
acquisitions (including those described in item (i) of subparagraph (d)
above), (iv) the conversion of any outstanding convertible debentures or
convertible preferred stock, and (v) the
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<PAGE>
payment of a 5% Common Stock dividend on December 1, 1969 to holders of Common
Stock of record on November 14, 1969.
(g) Insilco's audited Consolidated Balance Sheet as of December 31,
1968, and the related consolidated statements of earnings and retained
earnings for the year then ended fairly present the consolidated financial
position of Insilco and its consolidated subsidiaries as of the date thereof
and the results of their operations for the period then ended, and were
prepared in conformity with generally accepted accounting principles applied
on a basis consistent with that of preceding years.
(h) The Common Stock of Insilco is listed on he New York Stock
Exchange.
(i) The shares of Common Stock of Insilco into which the shares of
Peerless Common Stock and Peerless Preferred Stock will be converted pursuant
to this Agreement, will be validly issued, fully paid and nonassessable.
VII. ABANDONMENT AND TERMINATION
7.1. Right of Steel Parts to Abandon. Steel Parts shall have the
right to abandon the merger in the event that any of the following shall not
be true or shall not have occurred, as the case may be, as of the specified
date or dates.
(a) Accuracy of Representations and Warranties. The representations
and warranties of Peerless herein contained shall have been true in all
material respects when made, and, in addition, shall be true in all material
respects on and as of the Effective Date with the same force and effect as
through made on and as of the Effective Date, except as affected by
transactions contemplated hereby and except to the extent that any such
representations and warranties are made as of a specified date and as to such
representations and warranties the same shall have been true as of the
specified date.
(b) Performance of Agreements. Peerless shall have in all material
respects performed all obligations and agreements and compiled with all
covenants and conditions contained in this Agreement to be performed and
complied with by it at or prior to the Effective Date.
(c) Report of Accountant's Examination and Net Worth and Earnings
Tests. If the audit or examination permitted by Section 5.1(g) hereof has been
made, Steel Parts shall have received a report by Price Waterhouse & Co. based
on said audit or examination that (i) in their opinion the consolidated
financial statements examined by them present fairly the consolidated
financial position of
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<PAGE>
Peerless and the results of its operations at the date and for the period
covered thereby, in conformity with generally accepted accounting principles
applied on a basis consistent with that of the immediately preceding year,
(ii) the consolidated net worth of Peerless at the close of business on
November 30, 1969, computed in accordance with generally accepted accounting
principles consistently applied, was at least $2,900,000, and (iii) the
consolidated income after related income taxes and before extraordinary items
of Peerless for the eleven months ended November 30, 1969, computed as
aforesaid, was at least $600,000. Steel Parts shall cause Price Waterhouse &
Co. to deliver a copy of the aforesaid report to Peerless at the time of its
delivery to Steel Parts. If a report by Price Waterhouse & Co. on the
financial statements referred to in Section 5.1(f) of this Agreement is not
delivered to Peerless on or before the twentieth business day after the day
Peerless furnishes said financial statements to Steel Parts, then the
consolidated net worth and the consolidated income of Peerless shall be deemed
to be as reflected in such financial statements for the purposes of this
subsection 7.3(c).
(d) Consent of Other Persons. To the extent that any significant
lease, contract or agreement (including this Agreement, but not including the
loan agreement referred to in Section 6.1(l) of this Agreement) to which
Peerless is a party shall require the consent of any other person to the
merger and any other transaction provided for herein, Peerless shall have
obtained such consent, except where waived in writing by Steel Parts.
(e) Opinion of Counsel for Peerless. Steel Parts shall have received
an opinion of Messrs, Stuart, Branigin, Ricks & Schilling, counsel for
Peerless, dated the Effective Date, in form and substance satisfactory to
Steel Parts and its counsel, to the effect that:
(1) Peerless is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and
has all requisite power to own, lease and operate its properties, to
carry on its business as then being conducted and to consummate the
merger contemplated hereby;
(2) the authorized and the outstanding capitalization of Peerless
is as set forth in Section 6.1(b) hereof and all outstanding shares
of Peerless Common Stock are validly issued, fully paid and
non-assessable;
(3) all necessary corporate proceedings of the Board of Directors
and the stockholders of Peerless, to the extent required by law, the
Certificate of Incorporation of Peerless, the By-laws of Peerless,
or otherwise, to authorize the execution and delivery of
15
<PAGE>
this Agreement and to consummate the merger contemplated hereby have
been duly and validly taken;
(4) Peerless has corporate power to execute and deliver this
Agreement and this Agreement has been duly authorized, executed and
delivered by Peerless and constitutes the legal, valid and binding
obligation of Peerless;
(5) such counsel knows of no actions, suits or proceedings
pending or threatened against or affecting Peerless, at law or in
equity, or before any state, federal, municipal or other
governmental department, commission, board, bureau, agency, or
instrumentality that can reasonably be expected to result in any
materially adverse change in the business, properties, operations,
prospects, or assets or in the condition, financial or otherwise, of
Peerless;
(6) except as waived in writing by Steel Parts, consummation of
the merger will not violate or result in a breach of or constitute a
default under (a) any provisions of any charter or by-law of
Peerless or any of its subsidiaries, or (b) any provision of any
indenture, mortgage, lien, lease, agreement, contract, instrument,
order, judgment, decree, award, ordinance, regulation or any other
restriction of any kind of character known to such counsel, to which
Peerless is a party or by which any property of Peerless is bound,
other than (i) the loan agreement referred to in Section 6.1(l) of
this Agreement, and (ii) breaches or defaults which, considered in
the aggregate, will not materially adversely affect the business of
Peerless;
(7) such counsel are of the opinion that the representations
contained in the first sentence of Section 6.1(g) of this Agreement
are true and accurate insofar as they relate to real property owned
by Peerless, and that on the Effective Date Steel Parts will require
the same title now held by Peerless with respect to such real
property;
(8) the merger contemplated hereby will constitute a merger,
within the morning of section 1 (m) of the Gross Income Tax Act of
1933, as amended [Burns Indiana Statutes Annotated S64-2601 (m)] and
Instructions 8-7, 8-8, and 8-9 promulgated by the Indianan
Department of Revenue thereunder; therefore, neither
16
<PAGE>
Steel Parts nor Peerless nor Insilco Corporation will receive income
taxable under the Act.
With respect to thee full payment for the issued and outstanding shares of
Peerless capital stock, such opinion may be based upon a certificate or
certificates of an officer or officers of Peerless. Insofar as such opinion
involves matters of the laws of any jurisdiction other than the State of
Indiana, such opinion may be given in reliance upon an opinion or opinions of
local counsel satisfactory to Steel Parts and its counsel, copies of which
shall be delivered to Steel Parts.
7.2. Peerless Right to Abandon. Peerless shall have the right to
abandon the merger in the event that any of the following shall not be true or
shall not have occurred, as the case may be, as of the specified date or
dates:
(a) Accuracy of Representations and Warranties. The representations
and warranties of Steel Parts herein shall have been true when made and, in
addition, shall be true on and as of the Effective Date with the same force
and effect as though made on and as of the Effective Date, except as affected
by transactions contemplated hereby and except to the extent that any such
representations and warranties are made as of a specified date and as to such
representations and warranties the same shall be true as of the specified
date.
(b) Performance of Agreements. Steel Parts and Insilco shall have
performed all obligations and agreements and complied with all covenants
contained in this Agreement to be performed and compiled with by them or
either of them at or prior to the Effective Date.
(c) Delivery of Securities of Insilco to Steel Parts. On or before
the Effective Date, Steel Parts shall have received from Insilco the requisite
number of shares of Insilco Common Stock to give effect to the conversion and
exchange of the Peerless Common Stock and the Peerless Preferred Stock into
and for shares of Insilco Common Stock upon the merger contemplated hereby.
(d) Opinion of the Counsel. Peerless shall have received an opinion
of Messrs. Simpson Thacher & Bartlett, counsel for Insilco and Steel Parts,
dated the Effective Date, satisfactory in form and substance to Peerless and
its counsel, to the effect that:
(1) Insilco is a corporation duly organized, validly existing and
in good standing under the laws of the State of Connecticut, and has
all requisite corporate power to own, lease and operate its properties
and to carry on its business as then being conducted;
17
<PAGE>
(2) the authorized capitalization of Insilco is as set forth in
Section 6.2(d) of this Agreement; as of October 14, 1969 the
outstanding capitalization of Insilco was as set forth in said
Section 6.2(d); and since October 14, 1969, the outstanding
capitalization of Insilco has not changed except as contemplated in
Section 6.2(f) of this Agreement;
(3) Steel Parts is duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has all
requisite corporate power to own, lease and operate the properties
and to carry on the business now owned, leased, operated and carried
on by Steel Parts and to consummate the merger contemplated by this
Agreement; and all of the outstanding capital stock of Steel Parts is
owned by Insilco;
(4) all necessary corporate proceedings of the Boards of Directors
and the stockholders of Insilco and Steel Parts, to the extent
required by law, the respective Certificates of Incorporation and
By-laws of said corporations or otherwise, to authorize the execution
and delivery of this Agreement by Steel Parts and the consummation of
the merger contemplated by this Agreement, have been duly and validly
taken;
(5) Steel Parts has corporate power to execute and deliver this
Agreement and this Agreement has been duly authorized, executed and
delivered by its and constitutes its legal, valid and binding
obligation;
(6) the shares of Insilco Common Stock to be delivered upon the
effectiveness of the merger to the stockholders of Peerless have been
duly authorized and have been or will be, upon the effectiveness of
the merger, validly issued, fully paid and nonassessable;
(7) the shares of Insilco Common Stock to be delivered upon the
effectiveness of the merger to the stockholders of Peerless, have
been duly listed on the New York Stock Exchange;
(8) consummation of the merger will not violate or result in a
breach of or constitute a default under (a) any provision of the
Certificate of Incorporation of By-laws of Insilco or Steel Parts; or
(b) based upon certificates of officers of Insilco and Steel Parts,
any provision of any indenture, mortgage, lien, lease,
18
<PAGE>
agreement, contract, instrument, order, judgment, decree, award,
ordinance, regulations or any other restriction of any kind of
character, know to such counsel, to which Insilco or Steel Parts is a
party or by which any property of Insilco or Steel Parts is bound,
other than breaches or defaults which, considered in the aggregate,
are not materially adverse to the business of Insilco and its
subsidiaries, taken as a whole; and
(9) Insilco has corporate power to execute and deliver the
undertaking by it endorsed on this Agreement and such undertaking has
been duly authorized and executed by it and constitutes its legal,
valid and binding obligation in accordance with its terms. Insofar as
such opinion involves matters of the laws of any jurisdiction other
than the State of New York, such opinion may be given in reliance
upon an opinion or opinions of local counsel satisfactory to Peerless
and its counsel, copies of which shall be delivered to Peerless.
VIII. ADDITIONAL TERMS OF ABANDONMENT
8.1. Mandatory Abandonment. The merger shall be abandoned or
terminated if the Effective Date does not occur as provided for in Section 3.2
of this Agreement, or if on or before the Effective Date:
(a) the holders of at least a majority of the outstanding shares of
capital stock of each class of Peerless entitled to vote at the meeting of
stockholders of Peerless referred to in Section 3.1(a) of this Agreement shall
not have voted in favor of the adoption and approval of this Agreement and the
merger contemplated hereby; or
(b) the New York Stock Exchange shall have failed to approve any
listing application required to be filed by Insilco with said Exchange
pursuant to Section 5.2 of this Agreement.
8.2. Optional Abandonment. In addition to the provisions of Article
VII hereof, notwithstanding any approval of this Agreement by the stockholders
of the parties hereto, the merger may be abandoned or terminated on or before
the Effective Date:
(a) by mutual agreement of the Board of Directors of Steel Parts and
Peerless; or
19
<PAGE>
(b) at the option of Steel Parts if the holders of any of the
outstanding shares of Peerless Preferred Stock, or of 5% or more of the
outstanding shares of Peerless Common Stock, shall not have voted in favor of
the merger contemplated by this Agreement and shall have filed written
objections thereto in writing with Peerless and shall have demanded payment of
the value of their shares before the expiration of thirty days after the
adoption of this Agreement by the holders of the capital stock of Peerless.
8.3. Effect of Abandonment. In the event the merger is abandoned or
terminated as provided for in this Article VIII, (a) this agreement shall
forthwith become wholly void and of no effect, (b) there shall be no liability
on the part of Steel Parts or Peerless or any of them or their respective
directors, officers or stockholders, and (c) Steel Parts and Peerless shall
each pay its own fees and expenses incident to the negotiation, preparation
and execution of this Agreement and their respective stockholders' meetings
including fees and expenses of its counsel, accountants, investment bankers
and other experts.
IX. GENERAL
9.1. Brokerage. Steel Parts represents to Peerless that neither
Insilco nor Steel Parts has incurred or will incur any liability for brokerage
or finders' fees or agents' commissions in connection with this Agreement and
the merger contemplated hereby except for a finders' fee of $140,000 which
will be owed by Steel Parts to City Securities Corporation if the merger is
completed. Peerless represents to Steel Parts that Peerless has not incurred
and will not incur any liability for brokerage or finders' fees or agents'
commissions in connection with this Agreement and the merger contemplated
hereby.
9.2. Certification of Stockholder Votes and Dissenters. Prior to the
Effective Date, Peerless shall deliver to Steel Parts a certificate of its
Secretary setting forth (a) the number of shares of its capital stock
outstanding and entitled to vote, the number of shares voted in favor of and
the number of shares voted against adoption and approval of this Agreement,
and (b) the names of all of its stockholders not voting in favor of this
Agreement who, as of the date of such certificate, have filed written
objection with Peerless before the expiration of thirty days after the
adoption of this Agreement by the holders of the capital stock of Peerless.
9.3. Cooperation. From time to time prior to the Effective Date, each
Constituent Corporation will permit the other to make, and will cooperate and
assist such other corporation in making, such investigations as may be
appropriate to enable such corporation to determine compliance with the terms
of this Agreement.
20
<PAGE>
9.4. Execution in Counterparts. For the convenience of the parties
and to facilitate filing, this Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one an the same document.
9.5. Notices. All notices which are required or may be given pursuant
to the terms of this Agreement shall be in writing and shall be sufficient in
all respects if given in writing and shall be sufficient in all respects if
given in writing and delivered or mailed by registered or certified mail,
postage prepaid, as follows:
If to Peerless, to: Copy to:
Peerless Wire Goods Company, Inc. Roger D. Branigin, Sr., Esq.,
2702 Ferry Street Stuart, Branigin, Ricks & Schilling
Lafayette, Indiana The Life Building
Attention: Ernest W. Schilling, Lafayette, Indiana 47902
President
If to Steel Parts, to: Copy to:
Steel Parts Corporation William G. Dillon and
Berryman Pike W. Sydnor Settle, Esqs.,
Tipton, Indiana 46072 Simpson Thacher & Bartlett,
Attention: Edmund C. Walsh, III 120 Broadway,
President New York, New York 10022
9.6. Waivers. Any failure of either of the Constituent Corporations
to comply with any of its obligations, agreements or conditions as set forth
herein may be expressly waived in writing by the other Constituent
Corporation.
9.7. Amendments, Supplements, etc. At any time before or after
approval and adoption by the respective shareholders of the Constituent
Corporations, this Agreement (other than Sections 2.1 and 2.2) may be amended,
or supplemented, to the extent permitted by Indiana and Delaware law, by
additional agreements, articles or certificates, as may be determined in the
judgment of the Boards of Directors (or Executive Committees) of the
Constituent Corporations to be necessary, desirable or expedient to further
the purposes of this Agreement or to clarify the intention of the parties
hereto, or to add to or modify the covenants, terms and conditions hereof or
to effect or facilitate any governmental approval or acceptance of the merger
or of this Agreement or to effect or facilitate the filing or recording of
this Agreement or the consummation of any of the transactions contemplated
hereby.
21
<PAGE>
IN WITNESS WHEREOF, this Agreement has been approved by resolution
duly adopted by the Board of Directors of each of the Constituent Corporations
and has been signed by duly authorized officers of each of the Constituent
Corporations, and each of the Constituent Corporations has caused its
corporate seal to be hereunto affixed and attested by the signature of its
Secretary or an Assistant Secretary, all as of the date first above written.
STEEL PARTS CORPORATION
By /s/ Edmund I. Walsh
------------------------------------
President
Attest:
/s/ illegible signature
- -------------------------------
Secretary
PEERLESS WIRE GOODS COMPANY, INC.
By /s/ illegible signature
------------------------------------
President
Attest:
/s/ illegible signature
- -------------------------------
Secretary
<PAGE>
Certificate of Secretary
of
STEEL PARTS CORPORATION
------------------------------------
(A Delaware Corporation)
The undersigned, being the Secretary of STEEL PARTS CORPORATION does
hereby certify under the seal of said corporation that the holder of all of
the outstanding stock of STEEL PARTS CORPORATION dispensed with a meeting and
vote of stockholders, and the stockholder consented in writing, pursuant to
the provisions of Section 228 of the General Corporation Law of the State of
Delaware, for the adoption of the foregoing Agreement of Merger.
Signed on January 15, 1970.
/s/ illegible signature
----------------------------
Secretary of
STEEL PARTS CORPORATION
[Corporate Seal]
<PAGE>
Certificate of Secretary
of
PEERLESS WIRE GOODS COMPANY, INC.
------------------------------------
(An Indiana Corporation)
The undersigned, being the Secretary of PEERLESS WIRE GOODS COMPANY,
INC., does hereby certify under the seal of said corporation that the
foregoing Agreement of Merger was submitted to the stockholders entitled to
vote of PEERLESS WIRE GOODS COMPANY, INC., at a special meeting thereof for
the purpose of acting on the Agreement of Merger. Due notice of the time,
place and purpose of said meeting was mailed to each stockholder of said
corporation at least ten days prior to the date of the meeting. At said
meeting, the Agreement of Merger was considered by the stockholders entitled
to vote of the corporation, and, a vote having been taken for the adoption or
rejection by them of the Agreement of Merger, all of the outstanding stock
entitled to vote of the corporation was voted for the adoption of the
Agreement of Merger.
Signed on January 15, 1970.
/s/ illegible signature
----------------------------------------
Secretary of
PEERLESS WIRE GOODS COMPANY, INC.
[Corporate Seal]
<PAGE>
The foregoing Agreement of Merger of Steel Parts Corporation and of
Peerless Wire Goods Company, Inc., as executed on behalf of or by the parties
thereto, and as certified by the Secretary of Steel Parts Corporation in
hereby signed by the President and attested by the Secretary of Steel Parts
Corporation.
Executed at Tipton, Indiana, on January 15, 1970.
/s/ Edmund I. Walsh
----------------------------
President of
Steel Parts Corporation
[Corporate Seal]
Attest:
/s/ illegible signature
- -------------------------------------
Secretary of
Steel Parts Corporation
STATE OF INDIANA )
: ss.: Tipton
COUNTY OF TIPTON )
BE IT REMEMBERED that, on January 15, 1970, before me, a Notary
Public duly authorized by law to take acknowledgment of deeds, personally came
Edmund C. Walsh, III, President of Steel Parts Corporation, who duly signed
before me the foregoing Agreement of Merger, as theretofore executed, adopted
and certified, and acknowledged that such signing is his act and deed, that
such instrument is the act and deed of said corporation, and that the facts
stated therein are true.
GIVEN under my hand on January 15, 1970.
/s/ illegible signature
----------------------------
Notary Public
Charles Smith
<PAGE>
IN WITNESS WHEREOF, the undersigned officers execute this Agreement
of Merger and certify to the truth of the facts herein stated, this 15th day
of January, 1970.
/s/ E. W. Schilling
-----------------------------------------
E.W. Schilling, President of
Peerless Wire Goods Company, Inc.
/s/ Harold H. Clegg
-----------------------------------------
Harold H. Clegg, Secretary of
Peerless Wire Goods Company, Inc.
STATE OF INDIANA )
: ss.:
COUNTY OF )
I, the undersigned, a Notary Public duly commissioned to take
acknowledgments and administer oaths in the State of Indiana, and the County
of ________________________, certify that E.W. Schilling, the President, and
Harold H. Clegg, the Secretary, of Peerless Wire Goods Company, Inc., the
officers executing the foregoing Agreement of Merger, personally appeared
before me; acknowledged the execution thereof; and swore to the truth of the
facts therein stated.
WITNESS my hand and Notarial Seal this 15th day of January, 1970.
/s/ Roger D. Branigin, Jr.
---------------------------------------
Notary Public
Roger D. Branigin, Jr.
Notary Public
Tippecanoe County, Indiana
My Commission Expires April 15, 1970
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
STEELCO, INC.
We, the undersigned, CRAIG D. MUNSON, and DURAND B. BLATZ, respectively
President and Secretary of STEELCO, INC., a corporation organized and existing
under the laws of the State of Delaware (hereinafter referred to as the
corporation), DO HEREBY CERTIFY that the following amendments of the
Certificate of Incorporation of the Corporation have been duly adopted in
accordance with the provisions of Section 242 of Title 6, Chapter 1, of the
Delaware Code of 1953, as amended:
1. The Certificate of Incorporation is amended by deleting therefrom
in its entirety Article FIRST as presently in effect and by substituting in
lieu thereof a new Article FIRST to be and read as follows:
"FIRST: The name of the corporation (hereinafter called
the corporation) is
STEEL PARTS CORPORATION"
2. The Certificate of Incorporation of the Corporation is amended by
deleting from the first paragraph following the first colon of Article THIRD
presently in effect the words "original equipment".
IN WITNESS WHEREOF, we have hereunto set our hands and the seal of
STEELCO, INC., this 26th day of October, 1964.
/s/ illegible signature
----------------------------------
President
/s/ illegible signature
----------------------------------
Secretary
<PAGE>
STATE OF CONNECTICUT)
:
COUNTY OF NEW HAVEN )
BE IT REMEMBERED that on this 26th day of October 1964, personally came
before me, the undersigned, a Notary Public in and for the County and State
aforesaid, CRAIG D. MUNSON, President of STEELCO, INC., a corporation of the
State of Delaware, the corporation described in and which executed the
foregoing certificate, known to me personally to be such, and as such
President he duly executed such certificate before me and acknowledged the
said certificate to be his act and deed and the act and deed of said
Corporation, that the signatures are the signatures of the said President and
Secretary of the Corporation respectively, and that the seal affixed to said
certificate is the common or corporate seal of said Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the
day and year aforesaid.
/s/ illegible signature
----------------------------------
Notary Public
My commission expires April 1, 1965
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 01:05 PM 04/01/1993
930915353 - 615104
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION OF
STEEL PARTS CORPORATION
Pursuant to Section 242 and 303 of the
General Corporation Law of the State of Delaware
Steel Parts Corporation, a corporation organized and existing under the
laws of the State of Delaware (the "Company"), does hereby certify that:
1. Insilco Corporation, a Delaware corporation ("Insilco"), along
with thirteen of its subsidiaries, including the Company, filed a
voluntary petition for reorganization pursuant to chapter 11 of the
United States Bankruptcy Code on January 13, 1991, commencing jointly
administered cases styled In re Insilco Corporation, Case No.
91-70021-RBK (Bankr. W.D. Tex.).
2. The Amended and Restated Plan of Reorganization (the "Plan of
Reorganization") Jointly Proposed by the Debtors and the Official
Joint Committee of Unsecured Creditors, including Insilco and twelve
of its debtor subsidiaries, including the Company, was confirmed by
the United States Bankruptcy Court for the Western District of Texas,
Midland-Odessa Division by order entered on November 24, 1992, and
became effective on the date hereof.
3. The Plan of Reorganization, as confirmed, contemplated that, on
the effective date of the Plan of Reorganization or as soon
thereafter as practicable, a Certificate of Amendment to Certificate
of Incorporation of the Company was to be filed by the appropriate
officers of the Company.
4. Article FOURTH of the existing Certificate of Incorporation of
the Company is amended by this Certificate of Amendment to
Certificate of Incorporation by the insertion after the third
sentence thereof of the following:
<PAGE>
"The corporation does not have the power to issue
any non-voting stock."
5. Pursuant to Section 12.9 of the Plan of Reorganization and
Section 303 of the General Corporation Law of the State of Delaware
(the "Corporation Law"), the Board of Directors of the Company, as
reorganized effective as of the date hereof, has designated the
undersigned officers of the Company, among others, to carry out and
effect the Plan of Reorganization, including amending the Company's
Certificate of Incorporation substantially in the form contemplated
therein, with such changes therein as shall be approved by such
officers, without further action by the Company's directors or
stockholders and with like effect as if exercised and taken by
unanimous action of the directors and stockholders of the Company.
6. The amendment made by this Certificate of Amendment to
Certificate of Incorporation has been effected in conformity with the
provisions of the Plan of Reorganization and Sections 242 and 303 of
the Corporation Law, and such amendment was made, executed and
acknowledged in accordance with Section 303(c) of the Corporation Law
by the designated officers of the Company as of the date hereof.
IN WITNESS WHEREOF, this Certificate of Amendment to Certificate of
Incorporation has been executed as of April 1, 1993.
STEEL PARTS CORPORATION
By: /s/ J. Randal Greaves
-------------------------------
J. Randal Greaves
Vice President, Treasurer
and Assistant Secretary
ATTEST:
/s/ Karen L. Wolf
- -----------------------------
Karen L. Wolf
Vice President and Secretary
<PAGE>
CERTIFICATE OF INCORPORATION
OF
STEWART CONNECTOR SYSTEMS, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware (particularly Chapter 1,
Title 8 of the Delaware Code and the acts amendatory thereof and supplemental
thereto, and known, identified and referred to as the "General Corporation Law
of the State of Delaware"), hereby certifies that:
FIRST: The name of the corporation hereinafter called the
"corporation") is
STEWART CONNECTOR SYSTEMS, INC.
SECOND: The address, including street, number, city, and county,
of the registered office of the corporation in the State of Delaware is 229
South State Street, City of Dover, County of Kent; and the name of the
registered agent of the corporation in the State of Delaware at such address
is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is One Thousand (1.000). The par
value of each of such shares is One Dollar ($1.00). All such shares are of
one class and are shares of Common Stock.
No holder of any of the shares of the stock of the corporation,
whether now or hereafter authorized and issued, shall be entitled as of right
to purchase or subscribe for (1) any unissued stock of any class, or (2) any
additional shares of any class to be issued by reason of any increase of the
unauthorized capital stock of the corporation of any class, or (3) bonds,
certificates of indebtedness, debentures or other securities convertible into
stock of the corporation, or carrying any right to purchase stock of any
class, but any such unissued stock or such additional authorized issue of any
stock or of other securities convertible into stock, or carrying any right to
purchase stock, may be issued and disposed of pursuant to resolution of the
Board of Directors to such persons, firms, corporations or associations and
upon such terms as may be deemed advisable by the Board of Directors in the
exercise of its discretion.
FIFTH: The name and the mailing address of the incorporator are
as follows:
NAME MAILING ADDRESS
---- ---------------
N.S. Traux 229 South State Street, Dover, Delaware 19901
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of this corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for this corporation
under the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors
or class of creditors, and/or of the stockholders or class of stockholders
of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of
such compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors and/or on all the stockholders or class of stockholders, of this
corporation, as the case may be, and also on this corporation.
EIGHTH: For the management of the business and for the conduct
of the affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of
the corporation shall be vested in its Board of Directors. The number
of directors which shall constitute the whole Board of Directors
shall be fixed by, or in the manner provided in, the By-Laws. The
phrase "whole Board" and the phrase "total number of directors"
shall be deemed to have the same meaning, to wit, the total number
of directors which the corporation would have if there were no
vacancies. No election of directors need be by written ballot.
2. After the original or other By-Laws of the corporation have been
adopted, amended, or repealed, as the case may be, in accordance
with the provisions of Section 109 of the General Corporation Law
of the State of Delaware, and, after the corporation has received
any payment for any of its stock, the power to adopt, amend, or
repeal the By-Laws of the corporation may be exercised by the
Board of Directors of the corporation; provided, however, that any
provision for the classification of directors of the corporation
for staggered terms pursuant to the provisions of subsection (d)
of Section 141 of the General Corporation Law of the State of
Delaware shall be set forth in an initial By-Law or in a By-Law
adopted by the stockholders entitled to vote of the corporation
unless provisions for such classification shall be set forth in
this certificate of incorporation.
3. Whenever the corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder thereof
to notice of, and the right to vote at, any meeting of
stockholders. Whenever the corporation shall be authorized to
issue more than one class of stock, no outstanding share of any
class of stock which is denied voting power under the provisions of
the certificate of incorporation shall entitle the holder thereof
to the right to vote any meeting of stockholders except as the
provisions of paragraph (2) of subsection (b) of Section 242 of
the General Corporation Law of the State of Delaware shall
otherwise require; provided, that no share of any such class which
is otherwise denied voting power shall entitle the holder thereof
to vote upon the increase or decrease in the number of authorized
shares of said class.
NINTH: The personal liability of the directors of the
corporation is hereby eliminated to the fullest extent permitted by paragraph
(7) of subsection (b) of Section 102 of the General Corporation Law of the
State of Delaware, as the same may be amended and supplemented.
TENTH: The corporation shall, to the fullest extent permitted by
Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all
of the expenses, liabilities or other matters referred to in or covered by
said section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the corporation
by this certificate of incorporation are granted subject to the provisions of
this Article ELEVENTH.
Signed on June 26, 1987.
-------------------------
N.S. Truax
Incorporator
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
STEWART CONNECTOR SYSTEMS, INC.
It is hereby certified that:
1. The name of the corporation is Stewart Connector Systems,
Inc.
2. The certificate of incorporation of the corporation is hereby
amended by striking out Article First thereof and by substituting in lieu of
said Article the following new Article:
"FIRST: The name of the corporation (hereinafter called the
"corporation"), is Van Buren Shell, Incorporated."
3. The amendment of the certificate of incorporation herein
certified has been duly adopted in accordance with the provisions of Sections
228 and 242 of the General Corporation Law of the State of Delaware.
4. The effective date of the amendment herein certified shall
be the filing date.
Signed and attested to on August 13, 1987.
/s/ Sherwood S. Willard
------------------------------
Sherwood S. Willard
Vice President
Attest:
/s/ Vincent Nitido, Jr.
- ------------------------------
Vincent Nitido, Jr.
Assistant Secretary
STATE OF CONNECTICUT)
) ss. Meriden
COUNTY OF NEW HAVEN )
BE IT REMEMBERED THAT, on August 13, 1987, before me, a Notary
Public duly authorized by law to take acknowledgment of deeds, personally came
Sherwood S. Willard, Vice President of Stewart Connector Systems, Inc., who
duly signed the foregoing instrument before me and acknowledged that such
signing is his act and deed, that such instrument as executed is the act and
deed of said corporation, and that the facts stated therein are true.
GIVEN under my hand on August 13, 1987.
/s/ J. Ann J. Dahlquist
------------------------------------
J. Ann J. Dahlquist
(Seal) My commission expires 3/31/88
CERTIFICATE OF OWNERSHIP AND MERGER
OF
VAN BUREN SHELL, INCORPORATED
(a Delaware corporation)
INTO
ADAMS SHELL, INCORPORATED
(a Delaware corporation)
It is hereby certified that:
1. Adams Shell, Incorporated [hereinafter sometimes referred to
as the "Corporation"] is a business corporation of the State of Delaware.
2. The Corporation is the owner of all of the outstanding
shares of the stock of Van Buren Shell, Incorporated, which is also a business
corporation of the State of Delaware.
3. On November 1, 1990, the Board of Directors of the
Corporation adopted the following resolutions to merge Van Buren Shell,
Incorporated into the Corporation:
RESOLVED that Van Buren Shell, Incorporated be merged into
Adams Shell, Incorporated, and that all of the estate,
property, rights, privileges, powers and franchises of Van
Buren Shell, Incorporated be vested in and held and enjoyed
by Adams Shell, Incorporated as fully and entirely and
without change or diminution as the same were before held
and enjoyed by Van Buren Shell, Incorporated in its name;
and further
RESOLVED that Adams Shell, Incorporated assume all of the
obligations of Van Buren Shell, Incorporated; and further
RESOLVED that Adams Shell, Incorporated shall cause to be
executed and filed and/or recorded the documents prescribed
by the laws of the State of Delaware and by the laws of any
other appropriate jurisdiction and will cause to be
performed all necessary acts within the State of Delaware
and within any other appropriate jurisdiction; and further
RESOLVED that the effective time of the Certificate of
Ownership and Merger setting forth a copy of these
resolutions, and the time when the merger therein provided
for, shall become effective shall be November 30, 1990.
Executed on Nov. 7, 1990.
Adams Shell, Incorporated
By: /s/ Illegible Signature
------------------------------
Its Vice President
Attest:
/s/ Illegible Signature
- ------------------------------
Its Assistant Secretary
2
<PAGE>
<TABLE>
<S> <C> <C>
APPLICANT'S ACC'T NO. 3-1-76:36 773 [Filed this 23rd day of _______ ]
-------------------------- [August, 1976 ]
(Line for numbering) [Commonwealth of Pennsylvania ]
637909 [Department of State ]
[ ]
DSCB:BCL--204 (Rev. 8-72) [ ]
[ ]
Filing Fee: $75 COMMONWEALTH OF PENNSYLVANIA [/s/C. De Lores Tucker ]
AIB-7 DEPARTMENT OF STATE [ ]
CORPORATION BUREAU [Secretary of the Commonwealth ]
Articles of [ gb ]
Incorporation--
Domestic Business Corporation
- -------------------------------------------------------------------------------------------------------
(Box for Certification)
</TABLE>
In compliance with the requirements of section 204 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364)(15 P.S. ss.1204) the
undersigned, desiring to be incorporated as a business corporation, hereby
certifies (certify) that:
1. The name of the corporation is:
Hersey Industries, Inc.
- -------------------------------------------------------------------------------
2. The location and post office address of the initial registered office of
the corporation in this Commonwealth is:
116 Mill Street
- -------------------------------------------------------------------------------
(NUMBER) (STREET)
Stewartstown Pennyslvania 17363
- -------------------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The corporation is incorporated under the Business Corporation Law of the
Commonwealth of Pennsylvania for the following purpose or purposes:
To design, build, manufacture, buy, sell, distribute and generally deal in
machinery, tools, dies, molds, jigs, fixtures, plastics and plastic products of
all types and kinds and to have unlimited powers to engage in and to do any or
all lawful business for which corporations may be incorporated under the
Pennsylvania Business Corporation Law, approved May 5, 1933, P.L. 364, the
amendments and supplements thereto.
4. The term for which the corporation is to exist is: perpetual
------------------------
5. The aggregate number of shares which the corporation shall have authority
to issues is:
5,000 shares of common stock of the par value of $20.00 per share. There
are no classes of shares, all shares being common stock as aforesaid.
M. BURR REIM COMPANY, PHILADELPHIA
<PAGE>
DSCB:BCL--204 (Rev. 8-72)-2 3-1-76:36 774
6. The name(s) and post office address(es) of each incorporation(s) and the
number and class of shares subscribed by such incorporation(s) is (are):
NAME ADDRESS NUMBER AND CLASS OF SHARES
118 Mill Street
Donald E. Hersey Stewartstown, Pa. 17363 50 - common
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
IN TESTIMONY WHEREOF, the incorporation(s) has (have) signed and sealed
these Articles of Incorporation this 18th day of August , 19 76 .
------ -------- ----
(SEAL) /s/ Donald E. Hersey (SEAL)
- --------------------------------- ----------------------------
(SEAL)
----------------------------
INSTRUCTIONS FOR COMPLETION OF FORM:
A. For general instructions relating to the incorporation of business
corporation see 19 Pa. Code Ch. 35 (relating to business corporation
generally). These instructions relate to such matters as corporate
name, stated purposes, term of existence, authorized share structure
and related authority of the board of directors, inclusion of names of
first directors in the Articles of Incorporation, optional provisions
on cumulative voting for election of directors, etc.
B. One or more corporation or natural persons of full age may be
incorporate a business corporation.
C. Optional provisions required or authorized by law may be added as
Paragraphs 7, 8, 9 . . . etc.
D. The following shall accompany this form:
(1) Three copies of Form DSCB:BCL--206 (Registry Statement Domestic
or Foreign Business Corporation).
(2) Any necessary copies of Form DSCB:17.2 (Consent to Appropriation
of Name) or Form DSCB:17.3 (Consent to Use of Similar Name).
(3) Any necessary governmental approvals.
E. BCL ss.205 (15 Pa. S. ss.1205) requires that the incorporation shall
advertise their intention to file or the corporation shall advertise
the filing of articles of incorporation. Proofs of publication of such
advertising should not be delivered to the Department, but should be
filed with the minutes of the corporation.
2
<PAGE>
<TABLE>
<S> <C> <C>
APPLICANT'S ACC'T NO. 8701 496 [Filed this 12th day of _______ ]
---------------------------------------- [December, 1986 ]
(Line for numbering) [Commonwealth of Pennsylvania ]
637909 [Department of State ]
[ ]
DSCB:BCL--307 (Rev. 8-72) [ ]
[ ]
Filing Fee: $40 COMMONWEALTH OF PENNSYLVANIA [/s/ illegible signature ]
AIB-2 DEPARTMENT OF STATE [ ]
CORPORATION BUREAU [Secretary of the Commonwealth ]
Statement of Change of [ ]
Registered Office--
Domestic Business Corporation
- ---------------------------------------------------------------------------------------------------------------------
(Box for Certification)
</TABLE>
In compliance with the requirements of section 307 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364)(15 P.S. ss.1307) the
undersigned corporation, desiring to effect a change in registered office, does
hereby certify that:
1. The name of the corporation is:
Hersey Industries, Inc.
- -------------------------------------------------------------------------------
2. The address of its present registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement
to conform to the records of the Department):
116 Mill Street
- -------------------------------------------------------------------------------
(NUMBER) (STREET)
Stewartstown Pennyslvania 17363
- -------------------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The address to which the registered office in this Commonwealth is to be
changed is:
21 South Hill Street, P.O. Box 153
- -------------------------------------------------------------------------------
(NUMBER) (STREET)
Shrewsbury Pennsylvania 17361
- -------------------------------------------------------------------------------
(CITY) (ZIP CODE)
4. Such change was authorized by resolution duly adopted by at least a
majority of the members of the board of directors of the corporation.
IN TESTIMONY WHEREOF, the undersigned corporation has caused this
statement to be signed by a duly authorized officer, and its corporate seal,
duly attested by another such officer, to be hereunto affixed, this 1st day of
December, 1986.
HERSEY INDUSTRIES, INC.
----------------------------------------
(NAME OF CORPORATION)
By /s/ D.E. Hersey
--------------------------------------
President
----------------------------------------
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
/s/ illegible signature
- --------------------------------------------
(SIGNATURE)
Secretary
- --------------------------------------------
(TITLE: SECRETARY, ASSISTANT SECRETARY, ETC.)
3
<PAGE>
<TABLE>
<S> <C> <C>
APPLICANT'S ACC'T NO. 8712 39 [Filed this 26th day of _______ ]
---------------------------------------- [January, 1987 ]
(Line for numbering) [Commonwealth of Pennsylvania ]
637909 [Department of State ]
[ ]
DSCB:BCL--307 (Rev. 8-72) [ ]
[ ]
Filing Fee: $40 COMMONWEALTH OF PENNSYLVANIA [/s/ illegible signature ]
AIB-2 DEPARTMENT OF STATE [ ]
CORPORATION BUREAU [Secretary of the Commonwealth ]
Statement of Changes of [ ]
Registered Office--
Domestic Business Corporation
- ---------------------------------------------------------------------------------------------------------------------
(Box for Certification)
</TABLE>
In compliance with the requirements of section 307 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364)(15 P.S. ss.1307) the
undersigned, desiring to effect a change in registered office, does hereby
certifies (certify) that:
1. The name of the corporation is:
Hersey Industries, Inc.
- -------------------------------------------------------------------------------
2. The address of its present registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement
to conform to the records of the Department):
21 South Hill Street
- -------------------------------------------------------------------------------
(NUMBER) (STREET)
Shrewsburg Pennyslvania 17363
- -------------------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The address to which the registered office in this Commonwealth is to
be changed is: c/o The Prentice-Hall Corporation System, Inc.
100 Pine
- -------------------------------------------------------------------------------
(NUMBER) (STREET)
Harrisburg Pennyslvania 17108
- -------------------------------------------------------------------------------
(CITY) (ZIP CODE)
4. Such change was authorized by resolution duly adopted by at least a
majority of the members of the board of directors of the corporation.
IN TESTIMONY WHEREOF, the undersigned corporation has caused this
statement to be signed by a duly authorized officer, and its corporate seal,
duly attested by another such officer, to be hereunto affixed, this 16th day of
January, 1986.
HERSEY INDUSTRIES, INC.
----------------------------------------
(NAME OF CORPORATION)
By /s/ illegible signature
--------------------------------------
Vice President
----------------------------------------
(TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
Attest:
/s/ illegible signature
- --------------------------------------------
(SIGNATURE)
Secretary
- --------------------------------------------
(TITLE: SECRETARY, ASSISTANT SECRETARY, ETC.)
4
<PAGE>
<TABLE>
<S> <C> <C>
APPLICANT'S ACC'T NO. 87691753 [Filed this 30th day of _______ ]
---------------------------------------- [October, 1987 ]
(Line for numbering) [Commonwealth of Pennsylvania ]
637909 [Department of State ]
[ ]
DSCB:BCL--307 (Rev. 8-72) [ ]
[ ]
Filing Fee: $40 COMMONWEALTH OF PENNSYLVANIA [/s/ illegible signature ]
AIB-2 DEPARTMENT OF STATE [ ]
CORPORATION BUREAU [Secretary of the Commonwealth ]
Articles of [ ]
Amendment--
Domestic Business Corporation
- ---------------------------------------------------------------------------------------------------------------------
(Box for Certification)
</TABLE>
In compliance with the requirements of section 806 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364)(15 P.S. ss.1806) the
undersigned corporation, desiring to amend its Articles, does hereby (certify)
that:
1. The name of the corporation is:
Hersey Industries, Inc.
- -------------------------------------------------------------------------------
2. The location of its present registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following statement
to conform to the records of the Department):
c/o The Prentice-Hall Corporation System, Inc., 100 Pine Street
- -------------------------------------------------------------------------------
(NUMBER) (STREET)
Harrisburg Pennyslvania 17108
- -------------------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The statute by or under which it was incorporated is:
Business Corporation Law, May 5, 1993 as amended, P.L. 364
- -------------------------------------------------------------------------------
4. The date of its incorporation is: August 23, 1976
-----------------------------------------
5. (Check, and if appropriate, complete one of the following):
[ ] The meeting of the shareholders of the corporation at which the
amendment was adopted was held at the time and place and pursuant to the kind
and period of notice herein stated.
Time: The_________________________ day of __________________, 19__.
Place:________________________________________________________________
Kind and period of notice_____________________________________________
_______________________________________________________________________________
[X] The amendment was adopted by a consent in writing, setting forth the
action so taken, signed by all of the shareholders entitled to vote thereon and
filed with the Secretary of the corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was:
351
- -------------------------------------------------------------------------------
(b) The number of shares entitled to vote was:
351
- -------------------------------------------------------------------------------
M. BURR REIM COMPANY, PHILADELPHIA
5
<PAGE>
DSCB:BCL--806 (Rev. 8-72)-2 87691754
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was:
351
- -------------------------------------------------------------------------------
(b) The number of shares voted against the amendment was:
None
- -------------------------------------------------------------------------------
8. The amendment adopted by the shareholders, set forth in full, is as
follows:
RESOLVED that the first article of the Articles of Incorporation of
Hersey Industries, Inc. be deleted in its entirety and the following be
substituted therefor:
"1. The name of the corporation is :
Stewart Connector Systems, Inc."
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer and its
corporate seal, duly attested by another such officer, to be hereunto affixed
this 25th day of August , 19 87 .
------ -------- ----
HERSEY INDUSTRIES, INC.
-------------------------------------------
(NAME OF CORPORATION)
Attest: /s/ illegible signature By /s/ illegible signature
- ---------------------------------- -----------------------------------------
(SIGNATURE) (SIGNATURE)
Assistant Secretary President
- ---------------------------------- -------------------------------------------
(TITLE: SECRETARY, ASSISTANT (TITLE: PRESIDENT, VICE PRESIDENT, ETC.)
SECRETARY, ETC.)
(CORPORATE SEAL)
INSTRUCTIONS FOR COMPLETION OF FORM
A. Any necessary copies of Form DSCB:17.2 (Consent to Appropriation of
Name) or Form DSCB: 17.3 (Consent to Use of Similar Name) shall
accompany Articles of Amendment effecting a change of name.
B. Any necessary governmental approvals shall accompany this form.
C. Where action is taken by partial written consent pursuant to the
Articles, the second alternate of Paragraph 5 should be modified
accordingly.
D. If the shares of any class were entitled to vote as a class, the number
of shares of each class so entitled and the number of shares of all
other classes entitled to vote should be set forth in Paragraph 6(b).
E. If the shares of any class were entitled to vote as a class, the number
of shares of such class and the number of shares of all other classes
voted for and against such amendment respectively should be set forth
in Paragraphs 7(a) and 7(b).
F. BCL ss.807 (15 P. S. ss.1807) requires that the corporation shall
advertise its intention to file or the filing of Articles of Amendment.
Proofs of publication of such advertising should not be delivered to
the Department, but should be filed with the minutes of the
corporation.
6
<PAGE>
Microfilm Number Filed with Dept. of State on MAY 10 1995
--------- --------------------------
Entity Number 637909 /s/ illegible signature
----------- ------------------------------------------------------
Secretary of the Commonwealth
STATEMENT OF CHANGE OF REGISTERED OFFICE BY AGENT
In compliance with the requirements of 15 Pa.C.S. ss 108 (relating to
change in location or status of registered office provided by agent), the
undersigned person who maintains the registered office of an association and
who desires to change the following with respect to such agency hereby states
that:
1. The name of the association represented by the undersigned person is:
STEWART CONNECTOR SYSTEMS, INC.
2. The address of the present registered office in this Commonwealth of
the above-named association is: c/o The Prentice-Hall Corporation
System, Inc. 100 Pine Street, Harrisburg, PA 17108 Dauphin County
3. (If the registered office address is to be changed, complete the
following):
The address in the same county to which the registered office in this
Commonwealth of the above-named association is to be changed is:
The Prentice-Hall Corporation Dauphin County
System, Inc.
4. The name of the person in care of the foregoing office is:
---------------------------------------------------------------------
5. (Check one ore more of the following, as appropriate):
____ This statemment reflects a change in name of agent.
XX The change in the registered office set forth
---- in this statement reflects the removal of the place of
business of the agent to a new location within the county.
____ The status of the agent as the provider of the registered office
of the above-named association has been terminated.
IN TESTIMONY WHEREOF, the undersigned person has caused this Statement of
Change of Registered Office by Agent to be signed this 10th day of May , 1995.
------ -----
STEWART CONNECTOR SYSTEMS, INC.
-----------------------------------
(Name)
BY:/s/ Paula M. Washburn
--------------------------------
(Signature)
TITLE: AGENT
-----------------------------
MAY 10 95
PA Dept. of State
7
<PAGE>
CERTIFICATE OF INCORPORATION
OF
STEWART STAMPING CORPORATION
________________
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware (particularly Chapter 1,
Title 8 of the Delaware Code and the acts mandatory thereof and supplemental
thereto, and known, identified and referred to as the "General Corporation Law
of the State of Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is
STEWART STAMPING CORPORATION
SECOND: The address, including street, number, city, and
county, of the registered office of the corporation in the State of Delaware
is 229 South State Street, City of Dover, County of Kent; and the name of the
registered agent of the corporation in the State of Delaware at such address
is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is One Thousand (1,000). The par
value of each of such shares is One Dollar ($1.00). All such shares are of
one class and are shares of Common Stock.
No holder of any of the shares of the stock of the corporation,
whether now or hereafter authorized and issued, shall be entitled as of right
to purchase or subscribe for (1) any unissued stock of any class, or (2) any
additional shares of any class to be issued by reason of any increase of the
authorized capital stock of the corporation of any class, or (3) bonds,
certificates of indebtedness, debentures or other securities convertible into
stock of the corporation, or carrying any right to purchase stock of any
class, but any such unissued stock or such additional authorized issue of any
stock or of other securities convertible into stock, or carrying any right to
purchase stock, may be issued and disposed of pursuant to resolution of the
Board of Directors to such persons, firms, corporations or associations and
upon such terms as may be deemed advisable by the Board of Directors in the
exercise of its discretion.
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
---- ---------------
R. G. Dickerson 229 South State Street
Dover, Delaware
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of this corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for this corporation
under the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors
or class of creditors, and/or of the stockholders or class of stockholders
of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of
such compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if mentioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of this
corporation, as the case may be, and also on this corporation.
EIGHTH: For the management of the business and for the conduct
of the affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of
Directors. The number of directors which shall constitute the
whole Board of Directors shall be fixed by, or in the manner
provided in, the By-Laws. The phrase "whole Board" and the
phrase "total number of directors" shall be deemed to have the
same meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No election
of directors need be by written ballot.
2. After the original or other By-Laws of the corporation
have been adopted, amended, or repealed, as the case may be, in
accordance with the provisions of Section 109 of the General
Corporation Law of the State of Delaware, and, after the
corporation has received any payment for any of its stock, the
power to adopt, amend, or repeal the By-Laws of the corporation
may be exercised by the Board of Directors of the corporation;
provided, however, that any provision for the classification of
directors of the corporation for staggered terms pursuant to
the provisions of subsection (d) of Section 141 of the General
Corporation Law of the State of Delaware shall be set forth in
an initial By-Law or in a By-Law adopted by the stockholders
entitled to vote of the corporation unless provisions for such
classification shall be set forth in this certificate of
incorporation.
3. Whenever the corporation shall be authorized to issue
only one class of stock, each outstanding share shall entitle
the holder thereof to notice of, and the right to vote at, any
meeting of stockholders. Whenever the corporation shall be
authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting
power under the provisions of the certificate of incorporation
shall entitle the holder thereof to the right to vote, at any
meeting of stockholders except as the provisions of paragraph
(e)(2) of Section 242 of the General Corporation Law of the
State of Delaware shall otherwise require; provided, that no
share of any such class which is otherwise denied voting power
shall entitle the holder thereof to vote upon the increase or
decrease in the number of authorized shares of said class.
NINTH: The corporation shall, to the fullest extent permitted
by Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all
of the expenses, liabilities or other matters referred to in or covered by
said section, and the indemnification provided for herein shall not be deemed
conclusive of any other rights to which those indemnified may be entitled
under any By-Law, agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
TENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in
force may be added or inserted in the manner and at the time prescribed by
said laws, and all rights at any time conferred upon the stockholders of the
corporation by this certificate of incorporation are granted subject to the
provisions of this Article TENTH.
Signed on January 5, 1977.
/s/ R. G. Dickerson
___________________________
R. G. Dickerson
Incorporator
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION OF
STEWART STAMPING CORPORATION
Pursuant to Section 242 and 303 of the
General Corporation Law of the State of Delaware
------------------------------------------------
Stewart Stamping Corporation, a corporation organized and
existing under the laws of the State of Delaware (the "Company"), does hereby
certify that:
1. Insilco Corporation, a Delaware corporation ("Insilco"),
along with thirteen of its subsidiaries, including the
Company, filed a voluntary petition for reorganization
pursuant to chapter 11 of the United States Bankruptcy Code
on January 13, 1991, commencing jointly administered cases
styled In re Insilco Corporation, Case No. 91-70021-RBK
(Bankr. W.D. Tex.).
2. The Amended and Restated Plan of Reorganization (the
"Plan of Reorganization") Jointly Proposed by the Debtors
and the Official Joint Committee of Unsecured Creditors,
including Insilco and twelve of its debtor subsidiaries,
including the Company, was confirmed by the United States
Bankruptcy Court for the Western District of Texas, Midland-
Odessa Division by order entered on November 24, 1992, and
became effective on the date hereof.
3. The Plan of Reorganization, as confirmed, contemplated
that, on the effective date of the Plan of Reorganization or
as soon thereafter as practicable, a Certificate of
Amendment to Certificate of Incorporation of the Company was
to be filed by the appropriate officers of the Company.
4. Article FOURTH of the existing Certificate of
Incorporation of the Company is amended by this Certificate of
Amendment to Certificate of Incorporation by the insertion
after the third sentence thereof of the following:
"The corporation does not have the power to issue any
non-voting stock."
5. Pursuant to Section 12.9 of the Plan of Reorganization
and Section 303 of the General Corporation Law of the State of
Delaware (the "Corporation Law"), the Board of Directors of
the Company, as reorganized effective as of the date hereof,
has designated the undersigned officers of the Company,
among others, to carry out and effect the Plan of
Reorganization, including amending the Company's Certificate
of Incorporation substantially in the form contemplated
therein, with such changes therein as shall be approved by
such officers, without further action by the Company's
directors or stockholders and with like effect as if
exercised and taken by unanimous action of the directors and
stockholders of the Company.
6. The amendment made by this Certificate of Amendment to
Certificate of Incorporation has been effected in conformity
with the provisions of the Plan of Reorganization and
Sections 242 and 303 of the Corporation Law, and such
amendment was made, executed and acknowledged in accordance
with Section 303(c) of the Corporation Law by the designated
officers of the Company as of the date hereof.
IN WITNESS WHEREOF, this Certificate of Amendment to Certificate
of Incorporation has been executed as of April 1, 1993.
STEWART STAMPING CORPORATION
By: /s/ J. Randal Greaves
--------------------------------
J. Randal Greaves
Vice President, Treasurer and
Assistant Secretary
ATTEST:
/s/ Karen L. Wolf
- -----------------------------
Karen L. Wolf
Vice President and Secretary
<PAGE>
CERTIFICATE OF INCORPORATION
OF
TAYLOR PUBLISHING COMPANY OF DELAWARE
We, the undersigned, for the purpose of associating to establish a
corporation for the transaction of the business and the promotion and conduct
of the objects and purposes hereinafter stated, under the provisions and
subject to the requirements of the laws of the State of Delaware (particularly
Chapter 1, Title 8 of the Delaware Code and the acts amendatory thereof and
supplemental thereto, and known as the "General Corporation Law of the State
of Delaware"), do make and file this Certificate of Incorporation in writing
and do hereby certify as follows, to wit:
FIRST: The name of the Corporation (hereinafter called the Corporation)
is
TAYLOR PUBLISHING COMPANY OF DELAWARE
SECOND: The respective names of the County and of the City within the
County in which the principal office of the corporation is to be located in
the State of Delaware are the County of Kent and the City of Dover. The name
of the resident agent of the corporation is The Prentice-Hall Corporation
System, Inc. The street and number of said principal office and the address by
street and number of said resident agent is 229 South State Street, Dover,
Delaware.
THIRD: The nature of the business of the Corporation and the objects or
purposes to be transacted, promoted or carried on by it are as follows:
(a) To carry on a general printing, engraving, lithographing,
electrotyping, binding and publishing business in all the branches
thereof;
(b) To carry on and transact business as general merchants,
traders, merchandisers, shippers, carriers by air, land, or
sea, investors, managers, consultants, advisers, agents,
brokers, factors, licensors, licensees, lessors, lessees,
buyers, sellers, importers, exporters, dealers, manufacturers,
processors, or in any other lawful capacity, of tangible and
intangible, real, personal and mixed property and of
enterprises of every class and description; to obtain, receive,
grant, assign, enter into and negotiate contracts in respect
of, and generally deal in and with, in any capacity, any and
all options, franchises, privileges, interests, royalties and
rights in respect thereof; and to do everything necessary,
useful, proper, and convenient, to the extent permitted by law,
in furtherance of the purposes, business and activities of the
Corporation;
(c) To manufacture, purchase, or otherwise acquire, hold, own,
sell, assign, transfer, lease, exchange, invest in, mortgage,
pledge or otherwise encumber or dispose of and generally deal
and trade in and with, in any part of the world, goods, wares,
merchandise and property of every kind, nature and description.
(d) To apply for, register, acquire, hold, use, sell, exchange,
assign, grant, lease or otherwise dispose of letters patent,
patent rights, copyrights, licenses and privileges, inventions,
improvements, processes, formulae, trademarks and trade names
relating to or useful in connection with any business of the
Corporation.
(e) To borrow money and to make and issue promissory notes,
bills of exchange, bonds, debentures and other obligations and
evidences of indebtedness of all kinds, whether secured by
mortgage, pledge or otherwise or unsecured, for money borrowed,
or in payment for property purchased or acquired, or for any
other lawful object, without limit as to amount, but only as
permitted by law; to confer upon the holders of any bonds,
debentures, notes or other obligations of the Corporation,
secured or unsecured, the right to convert the same into
classes of stock of any series of the Corporation, now are
hereafter to be issued, upon such terms as shall be fixed by
the Board of Directors subject to the provisions hereof.
(f) To have one or more offices, stations, studios, factories,
plants, warehouses, shops and other like facilities in the
State of Delaware, other states, the District of Columbia, the
territories and possessions of the United States and in foreign
countries at which to carry on all or any of its operations and
business.
(g) To purchase, hold, own, lease, mortgage, pledge, sell,
convey or otherwise acquire or dispose of real and personal
property, rights, interests and franchises of every class, kind
and description, including any or all forms of securities,
including shares of stock, bonds, debentures, notes, scrip or
other obligations or evidences of indebtedness, created by
corporations, domestic or foreign, associations, firms,
trustees, syndicates, individuals, governments, provinces,
colonies, states, districts, territories, municipalities or
other political divisions, of any government or governments,
and to loan money and to take notes, open accounts and other
similar evidences of debt or security therefor.
(h) To acquire in whole or in part the good will, rights,
property and assets of all kinds of, and any interest in, any
person, firm, association or corporation, and to pay for the
same in cash, stock, securities, bonds, debentures or other
evidences of indebtedness of the Corporation or otherwise.
(i) To purchase, hold, sell and transfer shares of (and
options to purchase shares of) its own capital stock and its bonds,
debentures, notes, scrip or other securities or evidences of
indebtedness, and to cancel or to hold, transfer or reissue the
same to such persons, firms, corporations or associations and upon
such terms and conditions as the Board of Directors may in its
discretion determine, without offering any thereof on the same
terms or on any terms to the stockholders then of record or to any
class of stockholders.
(j) To become surety for and to guarantee the carrying out or
performance of contracts of every kind and character and to aid in
any manner permitted by law any corporation, association or trust
estate, domestic or foreign, or any firm or individual, in which
or in the welfare of which the Corporation shall have any direct
or indirect interest, and to do any acts designed to protect,
preserve, improve or enhance the value of any property at any time
held or controlled by the Corporation, or in which it may be at
any time directly or indirectly interested, and to promote or
facilitate the organization and financing of subsidiary companies.
(k) To enter into all proper arrangements and agreements with
any government or authority, supreme, municipal, local or
otherwise, both foreign and domestic, that may be necessary or
suitable for the business of the Corporation; to obtain from
any government or authority, rights, privileges, franchises or
concessions suitable for the nature of the business and the
objects or purposes hereinabove stated which the Corporation
may think desirable to obtain, and to carry out, exercise and
comply with any such arrangements, agreements, rights,
privileges, franchises or concessions.
(l) To execute and deliver general or special powers of
attorney to individuals, corporations, companies, associations,
trusts, partnerships or other organizations, as the Board of
Directors shall determine.
(m) To carry out and do all or any of the above objects or
purposes in any part of the world as principal, agent,
contractor, commission merchant, consignee, factor or
otherwise, and by or through agents, trustees, contractors,
factors or otherwise, and to do all such other things and to
carry on any such lawful business as are incidental to or
convenient for the nature of the business and the objects or
purposes for which the Corporation is formed, whether such
business is similar in nature to the objects and powers
hereinabove set forth, or otherwise.
(n) To do any and all things of the kind stated herein and to
exercise any and all powers which may now or hereafter be
lawful for the Corporation to exercise under the laws of the
State of Delaware or any other laws that may now or hereafter
be applicable to the Corporation.
The foregoing provisions of this Article THIRD shall be construed as
objects, purposes and powers, and each as an independent object, purpose and
power. The foregoing enumeration of specific objects, purposes and powers shall
not be held to limit or restrict in any manner the objects, purposes and
powers of the Corporation, provided, however, that the Corporation shall not
carry on any business or exercise any power in any state, territory or country
which under the laws thereof the Corporation may not lawfully carry on or
exercise.
FOURTH: The total number of shares of capital stock which the
corporation shall have authority to issue is One Thousand (1,000) shares of
Common Stock of the par value of One Dollar ($1.00) per share.
Each share of Common Stock shall entitle the holder thereof to have one
(1) vote for the election of directors and upon any other matter presented to
the stockholders at any meeting.
Each share of stock, issued by the corporation for which the full
consideration has been paid or delivered, shall be deemed fully-paid stock and
non-assessable.
No holder of any stock of the corporation shall be entitled as of right
to purchase or subscribe for or otherwise acquire any shares of stock of any
class, whether now or hereafter authorized, or any securities or obligations
convertible into, or exchangeable for, or any right, warrant or option to
purchase, any shares of stock of any class which the corporation may at any
time hereafter issue or sell, whether now or hereafter authorized, but any and
all such stock, securities, obligations, rights, warrants and options may,
without any action by the stockholders, be issued and disposed of by the Board
of Directors to such persons, firms, corporations or associations upon such
terms and for such consideration as the Board of Directors in its discretion
may from time to time determine, without first offering any thereof to any
class of stockholders.
The corporation shall be entitled to treat the person in whose name any
share, right or option is registered as the owner thereof, for all purposes,
and shall not be bound to recognize any equitable or other claim to or
interest in such shares, rights or options on the part of any other person,
whether or not the corporation shall have notice thereof, save as may be
expressly provided by the laws of the State of Delaware.
FIFTH: The minimum amount of capital with which the corporation will
commence business is One Thousand Dollars.
SIXTH: the names and places of residence of each of the incorporators
are as follows:
Name Place of Residence
---- ------------------
Lawrence D. Lavers 171 East 83rd Street,
Apt. 3-F
New York, N.Y.
Sam S. Miller 37 East 83rd Street,
New York, N.Y.
Donald P. Wefer 72 Shadyside Avenue,
Port Washington, N.Y.
SEVENTH: The corporation is to have perpetual existence.
EIGHTH: The private property of the stockholders of the corporation
shall not be subject to the payment of corporate debts to any extent whatever.
NINTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation and
regulation of the powers of the corporation and of its directors and
stockholders, it is further provided:
1. The number of directors of the corporation shall be as
specified in the By-Laws of the corporation but such number may from
time to time be increased or decreased in such manner as may be
prescribed by the By-Laws. In no event shall the number of directors
be less than the minimum number prescribed by law. The election of
directors need not be by ballot. Directors need not be stockholders.
2. In furtherance and not in limitation of the powers conferred
by the laws of the State of Delaware, the Board of Directors is
expressly authorized and empowered:
(a) To make, alter, amend and repeal By-Laws, subject to
the power of the stockholders to alter or repeal the By-Laws
made by the Board of Directors.
(b) Subject to the applicable provisions of the By-Laws
then in effect, to determine, from time to time, whether and to
what extent and at what times and places and under what
conditions and regulations the accounts and books of the
corporation, or any of them, shall be open to the inspection of
the stockholders; and no stockholder shall have any right to
inspect any account or book or document of the corporation,
except as conferred by the laws of the State of Delaware,
unless and until authorized so to do by resolution of the Board
of Directors or of the stockholders of the corporation.
(c) Without the assent or vote of the stockholders, to
authorize and issue obligations of the corporation, secured or
unsecured, to include therein such provisions as to
redeemability, convertibility or otherwise, as the Board of
Directors, in its sole discretion, may determine, and to
authorize the mortgaging or pledging, as security therefor, of
any property of the corporation, real or personal, including
after-acquired property.
(d) To establish bonus, profit-sharing or other types of
incentive or compensation plans for the employees (including
officers and directors) of the corporation and to fix the
amount of profits to be distributed or shared and to determine
the persons to participate in any such plans and the amounts of
their respective participations.
In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon it, the Board of Directors may exercise
all such powers and do all such acts and things as may be
exercised or done by the corporation, subject, nevertheless, to
the provisions of the laws of the State of Delaware, of the
Certificate of Incorporation and of the By-Laws of the corporation.
3. Any director or any officer elected or appointed by the
stockholders or by the Board of Directors may be removed at any time in
such manner as shall be provided in the By-Laws of the corporation.
4. In the absence of fraud, no contract or other transaction
between the corporation and any other corporation, and no act of the
corporation, shall in any way be affected or invalidated by the
fact that any of the directors of the corporation are pecuniarily
or otherwise interested in, or are directors or officers of, such
other corporation; and, in the absence of fraud, any director,
individually, or any firm of which any director may be a member,
may be a party to, or may be pecuniarily or otherwise interested
in, any contract or transaction of the corporation; provided, in
any case, that the fact that he or such firm is so interested
shall be disclosed or shall have been known to the Board of
Directors or a majority thereof; and any director of the
corporation who is also a director or officer of any such other
corporation, or who is also interested, may be counted in
determining the existence of a quorum at any meeting of the Board
of Directors of the corporation which shall authorize any such
contract, act or transaction and may vote thereat to authorize any
such contract, act or transaction, with like force and effect as
if he were not such director or officer of such other corporation,
or not so interested.
5. Any contract, act or transaction of the corporation or of the
directors may be ratified by a vote of a majority of the shares
having voting powers at any meeting of stockholders, or at any
special meeting called for such purpose, and such ratification
shall, so far as permitted by law and by this Certificate of
Incorporation, be as valid and as binding as though ratified by
every stockholder of the corporation.
TENTH: From time to time any of the provisions of this Certificate of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the corporation by
this Certificate of Incorporation are granted subject to the provisions of
this Article TENTH.
IN WITNESS WHEREOF, we, the undersigned, being all of the incorporators,
do hereby further certify that the facts hereinabove stated are truly set
forth and accordingly have hereunto set our respective hands and seals.
Dated: New York, N.Y.
July 10, 1967
/s/ Lawrence D. Lavers (L.S.
------------------------------------
/s/ Sam S. Miller (L.S.
------------------------------------
/s/ Donald P. Wefer (L.S.
------------------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED that personally appeared before me John V. Monckton, a
Notary Public in and for the County and State aforesaid, Lawrence D. Lavers,
Sam S. Miller and Donald P. Wefer, all the incorporators who signed the
foregoing Certificate of Incorporation, known to me personally to be such, and
I having made known to them and each of them the contents of said Certificate
of Incorporation, they did severally acknowledge the same to be the act and
deed of the signers, respectively, and that the facts therein stated are truly
set forth.
GIVEN under my hand and seal of office this 10th day of July, 1967.
/s/ John V. Monckton
------------------------------------
Notary Public
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
TAYLOR PUBLISHING COMPANY OF DELAWARE
(Pursuant to Section 242 of Title 8, Chapter 1
of the Delaware Code)
--------------------
TAYLOR PUBLISHING COMPANY OF DELAWARE, (hereinafter called the
"Corporation") a corporation organized and existing under and by virtue of
Title 8, Chapter I of the Delaware Code, does hereby certify as follows:
FIRST: That, upon the unanimous written consent of the holders of all of
the outstanding shares of stock entitled to vote of the above Corporation,
which consent was given pursuant to the provisions of Section 228 of Title 8,
Chapter 1, of the Delaware Code, the following amendment of the Certificate of
Incorporation of the Corporation has been duly adopted in accordance with the
provisions of Section 242 of Title 8, Chapter 1 of the Delaware Code:
By striking out Article FIRST thereof in its entirety, and by
substituting in lieu thereof a new Article FIRST to read as follows:
"FIRST: The name of the Corporation (hereinafter called the
'Corporation') is TAYLOR PUBLISHING COMPANY."
IN WITNESS WHEREOF, the said TAYLOR PUBLISHING COMPANY OF DELAWARE has
caused this Certificate to be executed by Durand B. Blatz, its President and
Herbert F. Kahler, its Secretary and caused the corporate seal of the
Corporation to be affixed this 14th day of September, 1967.
/s/ Durand B. Blatz
------------------------------------
President
/s/ Herbert F. Kahler
------------------------------------
Secretary
STATE OF CONNECTICUT )
) ss.:
COUNTY OF NEW HAVEN )
BE IT REMEMBERED that on the 14th day of September, 1967, personally
came before me, the undersigned, a Notary Public, duly authorized to take
acknowledgment of deeds by the laws of the place where the foregoing
certificate was executed, DURAND B. BLATZ and HERBERT F. KAHLER, President and
Secretary respectively of Taylor Publishing Company of Delaware, a corporation
of the State of Delaware, the corporation described in the foregoing
certificate, known to me personally to be such, and they duly executed said
certificate before me and acknowledged the said certificate to be their act and
deed and made on behalf of said corporation, and that the facts stated therein
are true.
GIVEN under my hand and seal of office the day and year aforesaid.
/s/ Kathleen A. Custy
------------------------------------
Notary Public
My Commission Expires Mar. 31, 1970
<PAGE>
CERTIFICATE OF INCORPORATION
OF
HHI ACQUISITION CORP.
(a Delaware corporation)
* * * * * * * * * * * * * * * * * * * * *
FIRST: The name of the Corporation is HHI Acquisition Corp.
SECOND: The address of its registered office in the State of Delaware is No.
1209 Orange Street, in the City of Wilmington, County of New Castle. The name
of its registered agent at such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law.
FOURTH: The total number of shares of stock which the Corporation shall have
authority to issue is one thousand (1,000), all of which shares shall be Common
Stock of One Cent ($.01) par value. The number of authorized shares may be
increased or decreased by the affirmative vote of the holders of a majority of
the stock of the Corporation entitled to vote.
FIFTH: The name and mailing address of the sole incorporator is as follows:
NAME MAILING ADDRESS
---- ---------------
Jeffrey T. Hayes 41 S. High Street, Columbus, Ohio 43215
The powers of the incorporator shall terminate upon the election of the
initial directors and the adoption of the By-laws.
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter or
repeal the By-Laws of the Corporation.
EIGHTH: Elections of directors need not be by written ballot unless the
By-Laws of the Corporation shall so provide. Meetings of stockholders may be
held within or without the State of Delaware, as the By-Laws may provide. The
books of the Corporation may be kept (subject to any provision contained in
the Delaware General Corporation Law) outside the State of Delaware at such
place or places as may be designated from time to time by the Board of
Directors or in the By-Laws of the Corporation.
NINTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
TENTH: No director of the Corporation shall be personally liable to the
Corporation or to its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that such provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or to its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for the payment of a dividend or the payment
for the purchase or redemption of the Corporation's stock in violation of
Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this certificate, hereby declaring that this
is my act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand this 24th day of June, 1996.
/s/ Jeffrey T. Hayes
-----------------------------
Jeffrey T. Hayes, Incorporator
HHI ACQUISITION CORP.
CERTIFICATE OF AMENDMENT
TO CERTIFICATE OF INCORPORATION
The undersigned, being the Executive Vice President and Secretary,
respectively, of HHI ACQUISITION CORP., a Delaware corporation (the
"Corporation"), hereby certify that the amendment to the Certificate of
Incorporation of the Corporation set forth below, having been duly proposed by
the Board of Directors of the Corporation and adopted by the sole stockholder
of the Corporation by written consent given in accordance with the provisions
of Section 228 of the Delaware General Corporation Law, has been duly adopted
in accordance with the provisions of Section 242 of the Delaware General
Corporation Law:
The Certificate of Incorporation of the Corporation shall be
amended by deleting Article FIRST thereof in its entirety and
substituting the following in lieu thereof:
FIRST: The name of the corporation is Thermal Components
Division, Inc.
IN WITNESS WHEREOF, the undersigned, for and on behalf of the
Corporation, have subscribed their names this Twenty-second day of July, 1996.
/s/ Robert F. Heffron
-------------------------------------------
Robert F. Heffron, Executive Vice President
ATTEST: /s/ Kenneth H. Koch
--------------------------
Kenneth H. Koch, Secretary
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED
OFFICE AND REGISTERED AGENT
OF
THERMAL COMPONENTS DIVISION, INC.
--------------------------------------
The Board of Directors of: THERMAL COMPONENTS DIVISION, INC., a
Corporation of the State of Delaware, on this 5th day of June , A.D.
1998, does hereby resolve and order that the location of the Registered Office
of this Corporation within this State be, and the same hereby is: 1013 Centre
Road, in the City of Wilmington, in the County of New Castle, Delaware, 19805.
The name of the Registered Agent therein and in charge thereof
upon whom process against the Corporation may be served, is: The Prentice-Hall
Corporation System, Inc.
THERMAL COMPONENTS DIVISION, INC.
a Corporation of the State of Delaware, does hereby certify that the foregoing
is a true copy of resolution adopted by the Board of Directors at a meeting
held as herein stated.
IN WITNESS WHEREOF, said corporation has caused this
Certificate to be signed by:
Kenneth H. Koch, this 5th day of June A. D., 1998.
/s/Kenneth H. Koch
----------------------------
Authorized Officer
<PAGE>
CERTIFICATE OF INCORPORATION
OF
THERMAL COMPONENT, INC.
1. The name of the corporation is THERMAL COMPONENT, INC.
2. The address of its registered office in the State of
Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of
New Castle. The name of its registered agent at such address is The
corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
To manufacture, distribute and sell, heat transfer equipment,
to engage in research and development in the design and manufacture of heat
transfer equipment, to acquire by assignment, to apply for and hold letters
patent and to grant licenses for the manufacture of heat transfer equipment.
To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade,
deal in and deal with goods, wares and merchandise and personal property of
every class and description.
To acquire, and pay for in cash, stock or bonds of this
corporation or otherwise, the good will, rights, assets and property, and to
undertake or assume the whole or any part of the obligations or liabilities of
any person, firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage or otherwise dispose of letters patent of the United
States or any foreign country, patent rights, licenses and privileges,
inventions, improvements and processes, copyrights, trademarks and trade
names, relating to or useful in connection with any business of this
corporation.
To acquire by purchase, subscription or otherwise, and to
receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage,
pledge or otherwise dispose of or deal in and with any of the shares of the
capital stock, or any voting trust certificates in respect of the shares of
capital stock, scrip, warrants, rights, bonds, debentures, notes, trust
receipts, and other securities, obligations, choses in action and evidences of
indebtedness or interest issued or created by any corporations, joint stock
companies, syndicates, associations, firms, trusts or persons, public or
private, or by the government of the United States of America, or by any
foreign government, or by any state, territory, province, municipality or other
political subdivision or by a any governmental agency, and as owner thereof to
possess and exercise all the rights, powers and privileges of ownership,
including the right to execute consents and vote thereon, and to do any and
all acts and things necessary or advisable for the preservation, protection,
improvement and enhancement in value thereof.
To borrow or raise moneys for any of the purposes of the
corporation, and from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to secure the payment of any
thereof and of the interest thereon by mortgage upon or pledge, conveyance or
assignment in trust of the whole or any part of the property of the
corporation, whether at the time owned or thereafter acquired, and to sell,
pledge or otherwise dispose of such bonds or other obligations of the
corporation for its corporate purposes.
To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and
otherwise deal in and with real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage or pledge, all or any of the corporation's property
and assets, or any interest therein, wherever situated.
In general, to possess and exercise all the powers and
privileges granted by the General Corporation Law of Delaware of by any other
law of Delaware or by this Certificate of Incorporation together with any
powers incidental thereto, so far as such powers and privileges are necessary
or convenient to the conduct, promotion or attainment of the business or
purposes of the corporation.
The business and purposes specified in the foregoing clauses
shall, except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in this
certificate of incorporation, but the business and purposes specified in each
of the foregoing clauses of this article shall be regarded as independent
business and purposes.
4. The total number of shares of stock which the corporation
shall have authority to issue is one hundred and forty-five thousand (145,000)
and the par value of each of such shares is One Dollar ($1.00) amounting in
the aggregate to One Hundred and Forty-Five Thousand Dollars ($145,000.00).
At all elections of directors of the corporation, each
stockholder shall be entitled to as many votes as shall equal the number of
votes which (except for such provision as to cumulative voting) he would be
entitled to cast for the election of directors with respect to his shares of
stock multiplied by the number of directors to be elected, and he may cast all
of such votes for a single director or may distribute them among the number to
be voted for, or for any two or more of them as he may see fit.
5. The name and mailing address of each incorporator is as
follows:
Name Mailing Address
---------------- --------------------------
B.J. Consono 100 West Tenth Street
Wilmington, Delaware 19899
F. J. Obara, Jr. 100 West Tenth Street
Wilmington, Delaware 19899
J. L. Rivera 100 West Tenth Street
Wilmington, Delaware 19899
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized;
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon
the real and personal property of the corporation.
To set apart out of any of the funds of the corporation
available for dividends a reserve or reserves for any proper purpose and to
abolish any such reserve in the manner in which it was created.
By a majority of the whole board, to designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as alternate
member of any committee, who may replace any absent or disqualified member at
any a meeting of the committee. The by-laws may provide that in the absence
or disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the board
of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the by-laws of the corporation,
shall have any may exercise all the powers and authority of the board of
directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers
which may require it; but no such committee shall have the power or authority
in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the corporation's
property and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the by-laws of the
corporation; and, unless the resolution or by-laws, expressly so provide, no
such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock.
When and as authorized by the stockholders in accordance with
statute, to sell, lease or exchange all or substantially all of the property
and assets of the incorporation, including its good will and its corporate
franchises, upon such terms and conditions and for such consideration, which
may consist in whole or in part of money or property including shares of stock
in, and/or other securities of, any other corporation or corporations, as its
board of directors shall deem expedient and for the best interests of the
corporation.
8. Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of
this corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or
on all the stockholders or class of stockholders, of this corporation, as the
case may be, and also on this corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the by-laws may provide. The books of the corporation
may be kept (subject to any provision contained in the statutes) outside the
State of Delaware at such place or places as may be designated from time to
time by the board of directors or in the by-laws of the corporation.
Elections of directors need not be by written ballot unless the by-laws of the
corporation shall so provide.
10. The corporation reserves the right to amend, alter, change
or repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
WE, THE UNDERSIGNED, being each of the incorporators
hereinbefore named, for the purpose of forming a corporation pursuant to the
General Corporation Law of the State of Delaware, do make this certificate,
hereby declaring and certifying that this is our act and deed and the facts
herein stated are true, and accordingly have hereunto set our hands this 6th
day of July 1971.
/s/ B.J. Consono
---------------------------------------
/s/ F. J. Obara, Jr.
---------------------------------------
/s/ J.L. Rivera
---------------------------------------
STATE OF DELAWARE )
) ss:
COUNTY OF NEW CASTLE )
BE IT REMEMBERED that on this 6th day of July A.D. 1971,
personally came before me, a Notary Public for the State of Delaware, B.J.
Consono, F.J. Obara, jr. and J.L. Rivera, all of the parties to the foregoing
certificate of incorporation, known to me personally to be such, and severally
acknowledged the said certificate to be the act and deed of the signers
respectively and that the facts stated therein are true.
GIVEN UNDER my hand and seal of office the day and year
aforesaid.
/s/ Johanna M. Mille
---------------------------------------
Notary Public
CERTIFICATE OF CORRECTION FILED TO CORRECT
A CERTAIN ERROR IN THE CERTIFICATE OF _________
INCORPORATION OF THERMAL COMPONENT, INC.
FILED IN THE OFFICE OF THE SECRETARY OF STATE OF
DELAWARE ON JULY 6, 1971, AND
RECORDED IN THE OFFICE OF THE RECORDER
OF DEEDS FOR NEW CASTLE COUNTRY, DELAWARE
ON JULY 6, 1971
THERMAL COMPONENT, INC., a corporation organized and existing
under and by virtue of the General corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
1. The name of the corporation is Thermal Component, Inc.
2. That a certificate of Incorporation was filed by the
Secretary of State of Delaware on July 6, 1971, and recorded in the office of
the Recorder of Deeds of New Castle County on July 6, 1971 and that said
certificate requires correction as permitted by subsection (F) of section 103
of The General Corporation law of the State of Delaware.
3. The inaccuracy or defect of said certificate to be
corrected is as follows: The correct corporate name should have been Thermal
Components, Inc.
4. Section 1 of the certificate is corrected to read as
follows:
"1. The name of the corporation is
THERMAL COMPONENTS, INC."
IN WITNESS WHEREOF, said Thermal Component, Inc., has caused
its corporate seal to be hereunto affixed and this certificate to be signed by
John C. Dijt, its President and attested by George M. Wood, Jr., its
Secretary, this ____ day of July, 1971.
THERMAL COMPONENT, INC.
By /s/ J.C. Dijt
---------------------------------
President
By /s/ George M. Wood, Jr.
-----------------------
Secretary
STATE OF ALABAMA )
) ss:
COUNTY OF MONTGOMERY )
BE IT REMEMBERED that on this 9 day of July, 1971, personally
came before me, a Notary Public in and for the County and State aforesaid John
C. Dijt President of Thermal Component, Inc., a corporation of the State of
Delaware, and he duly executed said certificate before me and acknowledged the
said certificate to be his act and deed and the act and deed of said
corporation and the facts stated therein are true; and that the seal affixed to
said certificate and attested by the Secretary of said corporation is the
common or corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of
office the day and year aforesaid.
/s/ illegible signature
_________________________
Notary Public
Certificate of Correction filed to correct a certain error in the Certificate
of Incorporation of the "THERMAL COMPONENT, INC.", filed in this office on
July 6, 1971, as received and filed in this office on twelfth day of July,
A.D. 1971, at 10 o'clock A.M.
CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCORPORATION
OF
THERMAL COMPONENTS, INC.
The undersigned Chairman of the Board of Directors and
President of Thermal Components, Inc. hereby certifies that the following
amendment to the Certificate of Incorporation of Thermal Components, Inc.
(incorporated under the laws of the State of Delaware on July 6, 1971, and
certificate of incorporation corrected July 12, 1971) was duly adopted in
accordance with the provisions of Section 242 of the Delaware Corporation Law:
"The first paragraph of Section 4 of the Certificate of
Incorporation of Thermal Components, Inc. is hereby amended to read as follows:
'The total number of shares of stock which the corporation
shall have authority to issue is two hundred ninety thousand (290,000) and the
par value of each share is $.50 per share, amounting in the aggregate to One
Hundred Forty-Five Thousand Dollars ($145,000).'
The Board of Directors of Thermal Components, Inc. at a meeting
duly called and held on March 30, 1973, adopted a resolution setting forth the
above as a proposed amendment, declaring its advisability, and calling a
special meeting of the stockholders entitled to vote in respect thereof, for
the consideration of such amendment. Such special meeting was called and held
at the Governor's House Motel in the City of Montgomery, Alabama, at 10:00
o'clock A.M. on the 10th day of May, 1973, upon waiver of notice in accordance
with Section 229 of the Delaware Corporation Law. A waiver of notice of said
meeting was signed by each stockholder of the corporation.
At the aforesaid special meeting on May 10, 1973, a vote of the
stockholders entitled to vote thereon was taken for and against the proposed
amendment to the Certificate of Incorporation and all the stock represented in
person or by proxy at the said meeting, to-wit, 90,000 shares of common stock,
was voted in favor of the amendment. No shares were voted against the
amendment. Said 90,000 shares voted in favor of the amendment was a majority
of the outstanding common stock of the corporation, and the only authorized
stock of the corporation is common stock.
IN WITNESS WHEREOF, I have hereunto set my hand as Chairman of
the Board of Directors and President of Thermal Components, Inc. and the
corporate seal of Thermal Components, Inc. has been affixed hereto and
attested by its Secretary on this 9th day of November, 1973.
/s/ John C. Dijt
--------------------------------------
Chairman of the Board of Directors and
President of Thermal Components, Inc.
CORPORATE SEAL
Attest: /s/ Richard F. Bishop
---------------------
Secretary
STATE OF ALABAMA )
) ss.
COUNTY OF MONTGOMERY )
Be it remembered that on this 9th day of November, 1973, personally came
before me, a notary public in and for the County and State aforesaid, John C.
Dijt, Chairman of the Board of Directors and President of Thermal Components,
Inc., a corporation of the State of Delaware, and he duly executed said
certificate before me and acknowledged the said certificate to be his act and
deed and the act and deed of said corporation; that the facts stated therein
are true; and that the seal affixed to said certificate and attested by the
Secretary of the corporation is the common or corporate seal of said
corporation.
IN WITNESS WHEREOF, I hereunto set my hand and seal of office, the day
and year aforesaid.
/s/ Clifford Livingstreth
---------------------------------
Notary Public
NOTARIAL SEAL
My commission expires: 3-14-76
--------
CERTIFICATE OF AMENDMENT TO CERTIFICATE OF INCORPORATION
OF
THERMAL COMPONENTS, INC.
The undersigned Chairman of the Board of Directors and
President of Thermal Components, Inc. hereby certifies that the following
amendment to the Certificate of Incorporation of Thermal Components, Inc.
(incorporated under the laws of the State of Delaware on July 6, 1971, and
certificate of incorporation corrected July 12, 1971) was duly adopted in
accordance with the provisions of Section 242 of the Delaware Corporation Law:
"The first paragraph of Section 4 of the Certificate of
Incorporation of Thermal Components, Inc. is hereby amended to read as follows:
'The total number of shares of stock which the corporation
shall have authority to issue is five hundred eighty thousand (580,000) and
the par value of each share is $.25 per share, amounting in the aggregate to
One Hundred Forty-Five Thousand Dollars ($145,000).'
The Board of Directors of Thermal Components, Inc., by
unanimous consent of all directors, adopted a resolution setting forth the
above as a proposed amendment, declaring its advisability, and calling a
special meeting of the stockholders entitled to vote in respect thereof, for
the consideration of such amendment. Such special meeting was called and held
at the office of the corporation at 2760 Gunter Park Drive West in the City of
Montgomery, Alabama, at 9:00 o'clock A.M. on the 16th day of October, 1973,
upon notice in accordance with Section 222 of the Delaware Corporation Law.
The notice of said meeting was given to each stockholder of the corporation at
least ten days and not more than fifty days prior to the date of said special
meeting by depositing a copy of such notice in the United States mail, postage
prepaid, directed to such stockholder at his address as it appears on the
records of the corporation. The notice so given to each stockholder stated
the place, date and hour of the special meeting and as the purpose thereof the
consideration of the aforesaid proposed amendment which was therein set forth
in full, in accordance with the foresaid resolution of the Board of Directors.
At the aforesaid special meeting on October 16, 1973, a vote of
the stockholders entitled to the vote thereon was taken for and against the
proposed amendment to the Certificate of Incorporation and all the stock
represented in person or by proxy at the said meeting, to-wit, 154,992 shares
of common stock, was voted in favor of the amendment. No shares were voted
against the amendment. Said 154,992 shares voted in favor of the amendment
was a majority of the outstanding common stock of the corporation, and the only
authorized stock of the corporation is common stock.
IN WITNESS WHEREOF, I have hereunto set my hand as Chairman of
the Board of Directors and President of Thermal Components, Inc. and the
corporate seal of Thermal Components, Inc. has been affixed hereto and
attested by its Secretary on this 12th day of November, 1973.
/s/ John C. Dijt
------------------------------------------------
Chairman of the Board of Directors and President
of Thermal Component, Inc.
CORPORATE SEAL
Attest: /s/ Richard F. Bishop
---------------------
STATE OF ALABAMA )
)SS:
COUNTY OF MONTGOMERY )
Be it remembered that on this 12th day of November, 1973,
personally came before me, a notary public in and for the County and State
aforesaid, John C. Dijt, Chairman of the Board of Directors and President of
Thermal Components, Inc., a corporation of the State of Delaware, and he duly
executed said certificate before me and acknowledged the said certificate to
be his act and deed and the act and deed of said corporation; that the facts
stated therein are true; and that the seal affixed to said certificate and
attested by the Secretary of the corporation is the common or corporate seal
of said corporation.
IN WITNESS WHEREOF, I hereunto set my hand and seal of office, the
day and year aforesaid.
/s/ Clifford Livingstreth
-----------------------------------
Notary Public
NOTARY SEAL
My commission expires: 3-14-76
-------
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF INCORPORATION
OF
THERMAL COMPONENTS, INC.
The undersigned Chairman of the Board of Directors and
President of Thermal Components, Inc., hereby certifies that the following
amendment to the Certificate of Incorporation of Thermal Components, Inc.
(incorporated under the laws of the State of Delaware on July 6, 1971, and
Certificate of Incorporation corrected July 12, 1971), as heretofore amended
effective November 27, 1973, was duly adopted in accordance with the
provisions of Section 242 of the Delaware Corporation Law:
The first paragraph of Section 4 of the Certificate of
Incorporation of Thermal Components, Inc. is hereby amended to read as
follows:
'The total number of shares of stock which the corporation
shall have authority to issue is Three Million (3,000,000) and the
par value of each of such shares is Twenty-five Cents ($0.25),
amounting in the aggregate to Seven Hundred and Fifty Thousand
Dollars ($750,000.00).'
The Board of Directors of Thermal Components, Inc. by unanimous
written consent in lieu of a meeting effective Mary 7, 1973, adopted a
resolution setting forth the above as a proposed amendment, declaring its
advisability, and calling a special meeting of the stockholders entitled to
vote in respect thereof, for, inter alia, consideration of such amendment.
Such special meeting was called and held at the office of the Company in
Montgomery, Alabama at 5:00 o'clock P.M. on the 19th day of March, 1974 upon
proper notice given in accordance with Delaware corporation law.
At the aforesaid special meeting on March 19, 1974 a vote of
the stockholders entitled to vote thereon was taken for and against the
proposed amendment to the Certificate of Incorporation and all of the stock
represented in person or by proxy at the said meeting, to-wit, 494,848 shares
of common stock was voted in favor of the amendment. No shares were voted
against the amendment. Said shares voted in favor of the amendment was a
majority of the outstanding common stock of the corporation, and the only
authorized stock of the corporation is common stock.
IN WITNESS WHEREOF, I have set my hand as Chairman of the Board
of the Board of Directors and President of Thermal Components, Inc. and the
corporate seal of Thermal Components, Inc. has been affixed hereto and
attested by the Secretary on this 19th day of March, 1974.
/s/ John C. Dijt
-----------------------------------
Chairman of the Board of
Directors and President
of Thermal Components, Inc.
CORPORATE SEAL
ATTEST:
/s/ Richard F. Bishop
- -----------------------------------
Secretary
STATE OF ALABAMA )
COUNTY OF MONTGOMERY )
Be it remembered on this 19th day of March, 1974, personally came before
me, a Notary Public in and for the County and State aforesaid, John C. Dijt,
Chairman of the Board of Directors and President of Thermal Components, Inc.,
a corporation of the State of Delaware, and he duly executed said certificate
before me and acknowledged that said certificate to be his act and deed and
the act and deed of said corporation; that the facts stated therein are true;
and that the seal affixed to said certificate and attested by the Secretary of
the corporation is the common or corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the
day and year aforesaid.
/s/ Clifford Livingstreth
-----------------------------------
Notary Public
NOTARIAL SEAL
[My commission expires March 14, 1976]
CERTIFICATE OF AMENDMENT
TO CERTIFICATE OF INCORPORATION OF
THERMAL COMPONENTS, INC.
The undersigned Chairman of the Board of Directors and
President of Thermal Components, Inc., hereby certify that the following
amendment to the Certificate of Incorporation of Thermal Components, Inc.
(incorporated under the laws of the State of Delaware on July 6, 1971, and
Certificate of Incorporation corrected on July 12, 1971), as heretofore
amended effective November 27, 1973 and March 19, 1974, was duly adopted in
accordance with the provisions of Section 242 of the Delaware Corporation Law:
The first paragraph of Section 4 of the Certificate of
Incorporation of Thermal Components, Inc., as amended, is further
amended to read as follows:
"The total number of shares of stock which the corporation
shall have authority to issue is ONE MILLION ONE HUNDRED
THOUSAND (1,100,000), and the par value of each of such
shares is TWENTY-FIVE CENTS ($0.25), amounting in the
aggregate to TWO HUNDRED SEVENTY-FIVE THOUSAND ($275,000.00)
DOLLARS."
The Board of Directors of Thermal Components, Inc. by unanimous
approval of the Board recommended a proposed amendment to reduce the total
number of shares as set forth above to the Certificate of Incorporation, said
proposed amendment to be submitted to the annual meeting of stockholders on
April 27, 1978. The proposed amendment was duly submitted to the stockholders
at said annual meeting and was adopted unanimously on said date. Said shares
voting in favor of amendment constituting a majority of the outstanding stock
in said corporation. Proper notice of said meeting and of a proposed change
in the number of authorized shares having been duly given to the stockholders
in accordance with Delaware Corporation Law.
IN WITNESS WHEREOF, we have set our hands as Chairman of the
Board of Directors and President of Thermal Components, Inc. and the corporate
seal of Thermal Components, Inc. has been affixed hereto and attested by the
Secretary on this 27th day of July, 1978.
/s/ Walter G. Johnson /s/ C.T. Fitzpatrick
- -------------------------- ------------------------------------------
President of Thermal Chairman of the Board of Directors
Components, Inc. of Thermal Components, Inc.
THERMAL COMPONENTS, INC.
CORPORATE SEAL
DELAWARE
ATTEST:
/s/ George P. Bledsoe
- --------------------------
Secretary
STATE OF ALABAMA
COUNTY OF MONTGOMERY
Be it remembered on this 27th day of July, 1978, personally came before
me, a Notary Public in and for the County and State aforesaid, Walter G.
Johnson, President of Thermal Components, Inc., a corporation of the State of
Delaware, and C.T. Fitzpatrick, Chairman of the Board of Directors of said
corporation, and they duly executed said certificate before me and
acknowledged the said certificate to be their act and deed and the act and
deed of said corporation; that the facts stated therein are true; and that the
seal affixed to said certificate and attested by the Secretary of the
corporation is the common or corporate seal of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the
day and year aforesaid.
/s/ Tom Ben Duke III
-----------------------------------
NOTARY PUBLIC
MY COMMISSION EXPIRES 5/25/81
-------
CERTIFICATE OF INCORPORATION
OF
THERMAL COMPONENTS, INC.
1. The name of the corporation is THERMAL COMPONENT, INC.
2. The address of its registered office in the State of
Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of
New Castle. The name of its registered agent at such address is The
corporation Trust Company.
3. The nature of the business or purposes to be conducted or
promoted is:
The manufacture, distribute and sell, heat transfer equipment,
to engage in research and development in the design and manufacture of heat
transfer equipment, to acquire by assignment, to apply for and hold letters
patent and to grant licenses for the manufacture of heat transfer equipment.
To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
To manufacture, purchase or otherwise acquire, invest in, own,
mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade,
deal in and deal with goods, wares and merchandise and personal property of
every class and description.
To acquire, and pay for in cash, stock or bonds of this
corporation or otherwise, the good will, rights, assets and property, and to
undertake or assume the whole or any part of the obligations or liabilities of
any person, firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage or otherwise dispose of letters patent of the United
States or any foreign country, patent rights, licenses and privileges,
inventions, improvements and processes, copyrights, trademarks and trade
names, relating to or useful in connection with any business of this
corporation.
To acquire by purchase, subscription or otherwise, and to
receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage,
pledge or otherwise dispose of or deal in and with any of the shares of the
capital stock, or any voting trust certificates in respect of the shares of
capital stock, scrip, warrants, rights, bonds, debentures, notes, trust
receipts, and other securities, obligations, choses in action and evidences of
indebtedness or interest issued or created by any corporations, joint stock
companies, syndicates, associations, firms, trusts or persons, public or
private, or by the government of the United States of America, or by any
foreign government, or by any state, territory, province, municipality or other
political subdivision or by any government agency, and as owner thereof to
possess and exercise all the rights, powers and privileges of ownership,
including the right to execute consents and vote thereon, and to do any and
all acts and things necessary or advisable for the preservation, protection,
improvement and enhancement in value thereof.
To borrow or raise moneys for any of the purposes of the
corporation, and from time to time without limit as to amount, to draw, make,
accept, endorse, execute and issue promissory notes, drafts, bills of
exchange, warrants, bonds, debentures and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to secure the payment of any
thereof and of the interest thereon by mortgage upon or pledge, conveyance or
assignment in trust of the whole or any part of the property of the
corporation, whether at the time owned or thereafter acquired, and to sell,
pledge or otherwise dispose of such bonds or other obligations of the
corporation for its corporate purposes.
To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ, use and
otherwise deal in and with real or personal property, or any interest therein,
wherever situated, and to sell, convey, lease, exchange, transfer or otherwise
dispose of, or mortgage of pledge, all or any of the corporation's property
and assets, or any interest therein, whenever situated.
In general, to possess and exercise all the powers and
privileges granted by the General Corporation Law of Delaware of by any other
law of Delaware or by this Certificate of Incorporation together with any
powers incidental thereto, so far as such powers and privileges are necessary
or convenient to the conduct, promotion or attainment of the business or
purposes of the corporation.
The business and purposes specified in the foregoing clauses
shall, except where otherwise expressed, be in nowise limited or restricted by
reference to, or inference from, the terms of any other clause in the
certificate of incorporation, but the business and purposes specified in each
of the foregoing clauses of this article shall be regarded as independent
business and purposes.
4. The total number of shares of stock which the corporation
shall have authority to issue is one hundred and forty-five thousand (145,000)
and the par value of each of such shares is One Dollar ($1.00) amounting in
the aggregate to One Hundred and Forty-Five Thousand Dollars ($145,000.00).
At all elections of directors of the corporation, each
stockholder shall be entitled to as many votes as shall equal the number of
votes which (except for such provision as to cumulative voting) he would be
entitled to cast for the election of directors with respect to his shares of
stock multiplied by the number of directors to be elected, and he may cast all
of such votes for a single director or may distribute them among the number to
be voted for, or for any two or more of them as he may see fit.
5. The name and mailing address of each incorporator is as
follows:
Name Mailing Address
- ---------------- --------------------------
B. J. Consono 100 West Tenth Street
Wilmington, Delaware 19899
F. J. Obara, Jr. 100 West Tenth Street
Wilmington, Delaware 19899
J. L. Rivera 100 West Tenth Street
Wilmington, Delaware 19899
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon
the real and personal property of the corporation.
To set apart out of any of the funds of the corporation
available for dividends a reserve of reserves for any proper purpose and to
abolish any such reserve in the manner in which it was created.
By a majority of the whole board, to designate one or more
committes, each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as alternative
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. The by-laws may provide that in the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the board
of directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the board of directors, or in the by-laws of the corporation,
shall have and may exercise all the powers and authority of the board of
directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers
which may require it; but no such committee shall have the power of authority
in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the corporation's
property and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the by-laws of the
corporation; and, unless the resolution or by-laws, expressly so provide, no
such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock.
When and as authorized by the stockholders in accordance with
the statute, to sell, lease or exchange all or substantially all of the
property and assets of the corporation, including its good will and its
corporate franchises, upon such terms and conditions and for such
consideration, which may consist in whole or in part of money or property
including shares of stock in, and/or other securities of, any other
corporation or corporations, as its board of directors shall deem expedient
and for the best interest of the corporation.
8. Whenever a compromise or arrangement is proposed between
this corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as
the case may be, to be summoned in such manner as the said court directs. If
a majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of
this corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or
on all the stockholders or class of stockholders, of this corporation, as the
case may be, and also on this corporation.
9. Meetings of stockholders may be held within or without the
State of Delaware, as the by-laws may provide. The books of the corporation
may be kept (subject to any provision contained in the statutes) outside the
State of Delaware at such place or places as may be designated from time to
time by the board of directors or in the by-laws of the corporation.
Elections of directors need not be by written ballot unless the by-laws of the
corporation shall so provide.
10. The corporation reserves the right to amend, alter, change
or repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subjected to this reservation.
WE, THE UNDERSIGNED, being each of the incorporations
hereinbefore named, for the purpose of forming a corporation pursuant to the
General corporation Law of the State of Delaware, do make this certificate,
hereby declaring and certifying that this is our act and deed and the facts
herein stated are true, and accordingly have hereunto set our hands this 6th
day of July 1971.
/s/ B.J. Consono
----------------------------------
/s/ F.J. Obara, Jr.
----------------------------------
/s/ J.L. Rivera
----------------------------------
STATE OF DELAWARE )
)SS:
COUNTY OF NEW CASTLE )
BE IT REMEMBERED that on this 6th day of July A.D. 1971, personally came
before me, a Notary Public for the State of Delaware, B.J. Consono, F. J.
Obara, Jr. and J. L. Rivera, all of the parties to the foregoing certificate
of incorporation, known to me personally to be such, and severally
acknowledged the said certificate to be the act and deed of the signers
respectively and that the facts stated therein are true.
GIVEN UNDER my hand and seal of office the day and year aforesaid.
/s/ Johanna M. Mille
----------------------------------
Notary Public
CERTIFICATE OF CHANGE OF LOCATION OF REGISTERED OFFICE
AND OF REGISTERED AGENT
It is hereby certified that:
1. The name of the corporation (hereinafter called the
"corporation") is Thermal Components, Inc.
2. The registered office of the corporation within the State of
Delaware is hereby changed to 229 South State Street, City of Dover 19901,
County of Kent.
3. The registered agent of the corporation within the State of
Delaware is hereby changed to the Prentice-Hall Corporation System, Inc., the
business office of which is identical with the registration office of the
corporation as hereby changed.
4. The corporation has authorized the changes hereinbefore set
forth by resolution of its Board of Directors.
Signed on March 30, 1984.
/s/ G.E. Peterson, Jr.
----------------------------------
Vice-President
Attest:
/s/ [Illegible] S. Todt
- ----------------------------------
Assistant Secretary
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
THERMAL COMPONENTS, Inc.
- ------------------------------------------------------------------------------
a corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Thermal Components, Inc.
------------------------
- ------------------------------------------------------------------------------
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporate of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is
as follows:
RESOLVED, that the Certificate of Incorporation be amended by changing
the Article thereof numbered "4" so that, as amended said Article shall
---
be and read as follows:
(see attached sheets)
"-----------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
_____________________________________________________________________________"
SECOND: That thereafter, pursuant to resolution of its Board of Directors, a
special meeting of the stockholders of said corporation was duly called and
held, upon notice in accordance with Section 222 of the General Corporation
law of the state of Delaware at which meeting the necessary number of shares
as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said corporation shall not be reduced under or by
reason of said amendment.
IN WITNESS WHEREOF, said Thermal Components, Inc.
------------------------
has caused this certificated to be signed by
Vice
Sherwood S. Willard its/President, Assistant
- -----------------------------------------------------
and JoAnn J. Dahlquist
--------------------------------------------------, its/Secretary.
this 2nd day of December , 1986
--- --------
BY: /s/ Sherwood S. Williard
-----------------------------------
ATTEST: /s/ JoAnn J. Dahlquist
-----------------------------------
RESOLVED that the first paragraph of Section 4 of the Certificate
of Incorporation of Thermal Components, Inc., as amended, is
further amended to read as follows:
"The total number of shares of stock which the corporation shall
have authority to issue is FORTY SEVEN THOUSAND SIX HUNDRED
(47,600) and the par value of each of such shares is TWENTY FIVE
CENTS ($0.25), amounting in the aggregate to ELEVEN THOUSAND NINE
HUNDRED ($11,900) DOLLARS."
CERTIFICATE FOR RENEWAL AND REVIVAL OF CHARTER
Thermal Components, Inc., a corporation organized under the laws of
Delaware, the certificate of incorporation of which was filed in the office of
the Secretary of State on July 6, 1971, the charter of which was voided for
non-payment of taxes, now desires to procure a restoration, renewal and
revival of its charter, and hereby certifies as follows:
1. The name of this Corporation is Thermal Components, Inc.
2. Its registered office in the State of Delaware is located at
229 South State Street, City of Dover, County of Kent and the name of its
registered agent is The Prentice-Hall Corporation System, Inc., 229 South
State Street, Dover, Delaware 19901.
3. The date when the restoration, renewal, and revival of the
charter of this company is to commence is the 29th day of February, 1998,
which date is prior to the date of the expiration of the charter. This
renewal and revival of the charter of this corporation is to be perpetual.
4. This corporation was duly organized and carried on the business
authorized by its charter until March 1, 1988, at which time its charter
became inoperative and void for non-payment of taxes and this certificate for
renewal and revival is filed by the authority of the person who was the sole
member of the board of directors of the corporation at the time the
certificate of incorporation expired, in accordance with the laws of the State
of Delaware.
IN TESTIMONY WHEREOF, and in compliance with the provisions of
Section 312 of the General Corporation Law of the State of Delaware, as
amended, providing for the renewal, extension and restoration of charters, the
undersigned have hereunto set their hands to this Certificate this 5th day of
October, 1988.
THERMAL COMPONENTS, INC.
By: /s/ Sherwood S. Willard
-----------------------------------
Sherwood S. Willard
Vice President
Attest: /s/ J. Randal Greaves
-----------------------------------
J. Randal Greaves
Assistant Secretary
BYLAWS
OF
EYELETS FOR INDUSTRY, INC.
ARTICLE 1
Name and Location
1. The name of the corporation shall be Eyelets For Industry,
Inc.
2. Its principal office shall be at 45 Old Waterbury Road,
Thomaston, Connecticut 06787.
3. The Board of Directors may from time to time designate such
other place or places for the transaction of corporation business as it may
determine.
ARTICLE 2
Capital Stock
1. All certificates of stock shall be signed by the president
and by the secretary of the corporation and sealed with the corporate seal or a
facsimile thereof.
2. Transfers of stock shall be made only on the books of the
corporation and the old certificate properly endorsed shall be surrendered and
cancelled before a new certificate is issued.
3. The stock books of the corporation shall be closed against
transfers of stock for a period of five (5) days before the day of payment of a
dividend and before each annual meeting of the shareholders.
ARTICLE 3
Shareholder Meeting
1. The annual meeting of the shareholders shall be held at ten
o'clock in the forenoon on the third Monday of November in each year, at the
principal office of the corporation. At such meetings, the shareholders shall
elect the directors and transact such other business as may be properly brought
before the meeting. Meetings of shareholders for any other purpose may be held
at such time and place within or without the State of Connecticut as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
2. A special meeting of the shareholders of the corporation may
be called by the President, or by a majority of the directors, and shall be
held at any time upon call by the President or the Secretary when either the
President or the Secretary is requested in writing to call such meeting by a
majority of the directors or one or more shareholders holding not less than
one tenth of the voting power of all shares entitled to vote at the meeting.
Any such notice shall specify therein the object and purpose of such meeting.
3. Notice of the time and place of all annual and special
meetings shall be mailed or handed by the secretary to each shareholder
entitled to vote at such meeting not less than seven nor more than fifty days
before the date thereof, but this requirement as to notice may be waived at
any time by the shareholders in writing.
4. The President shall preside at all such meetings.
5. At every such meeting, each shareholder shall be entitled to
cast one vote for each outstanding share of stock, regardless of class, held
in his name, which vote may be cast in person or by proxy, on each matter
submitted to a vote at such meeting of shareholders unless, and except to the
extent that voting rights of shares of any class are increased, limited or
denied by the certificate of incorporation. All votes of the said corporation
shall, if requested by the presiding officer or by any shareholders, be by
ballot, and the name of each shareholder voting shall be written thereon with
the number of shares held by him. Any shareholder may constitute an agent to
vote in the meetings of this corporation, by a writing signed by him for that
purpose, and such proxy shall entitle the person thus authorized to vote at
all meetings of the shareholders held during the eleven months next succeeding
the date of such instrument, and no longer unless a longer term be expressly
provided therein.
6. The holders of a majority of shares entitled to vote on the
subject matter, present in person or by proxy at any meeting of shareholders,
shall constitute a quorum for such meeting except as may otherwise be provided
in these bylaws, or in the certificate of incorporation, or in the Connecticut
Stock Corporation Act. If, however, such quorum shall not be present or
represented at any meeting of the shareholders, the shareholders present in
person or represented by proxy shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
7. Except as may otherwise be specifically provided in these
bylaws or in the certificate of incorporation, the affirmative vote, at a
meeting of shareholders duly held and at which a quorum is present, of a
majority of the voting power of the shares represented at such meeting which
are entitled to vote on the subject matter shall be the act of the
shareholders.
8. Any action which may be taken at a meeting of the
shareholders may be taken without a meeting if consent in writing, setting
forth the actions so taken or to be taken, is signed by all of the persons
entitled to vote with respect to the subject matter thereof (or their duly
authorized attorneys), and said consent shall be filed with the regular
minutes.
ARTICLE 4
Directors
1. The stock, business, property and affairs of this corporation
shall be under the care and management of its board of directors. Directors
need not be shareholders and need not be residents of Connecticut. The
corporation shall have the number of directors elected by the shareholders
from time to time, but if there are less than three shareholders, the number of
directorships may be less than three but not less than the number of
shareholders.
2. A majority of the number of directors at the time shall
constitute a quorum for the transaction of business; and the act of a majority
of the directors present at a meeting at which a quorum is present at the time
of the act shall be the act of the Board of Directors, unless the presence of
or act of a greater number is specifically required by these bylaws, the
certificate of incorporation, or the Connecticut Stock Corporation Act. If a
quorum shall not be present at any meeting of directors, the directors present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.
3. Any action taken or to be taken at a meeting of the directors
may be taken without a meeting if a consent in writing, setting forth the
action so taken or to be taken, shall be signed by all of the directors
entitled to vote with respect to the subject matter thereof. Such consent must
be filed with the minutes of the directors' meetings.
4. The directors, other than the first Board of Directors,
shall be elected annually at the annual meeting of the corporation for a term
extending until the next annual meeting of the corporation; and each director
shall hold office for the term for which he is elected and until his successor
has been elected and qualified. A director may be removed from office at any
time with or without cause by action of the shareholders. Any vacancy or
vacancies occurring on the Board of the corporation may be filled for the
unexpired term by action of the sole remaining director in office or by the
concurring vote of a majority of the remaining directors in office, though
such remaining directors are less than a quorum, though the number of
directors at the meeting are less than a quorum and though such majority is
less than a quorum. In the event that a vacancy or the vacancies are not
filled by the directors, they shall be filled by election at an annual or
special meeting of shareholders entitled to vote thereon called for that
purpose. A director elected to fill a vacancy shall be elected for the
unexpired portion of the term of his predecessor in office.
Any directorship to be filled by reason of an increase in the
number of directors shall be filled by election at an annual meeting or at a
special meeting of shareholders called for that purpose. A director elected to
fill a newly created directorship shall serve until the next succeeding annual
meeting of shareholders and until his successor shall have been elected and
qualified.
5. Annual meetings of the directors of said corporation shall be
held immediately after the annual meeting of the shareholders of said
corporation; and regular and special meetings of the directors may be held at
such times and places, either within or without Connecticut, as in the opinion
of the President or a majority of the directors the interests of said
corporation shall require, reasonable notice having been given thereof. The
directors may choose from among their number a chairman to preside over
meetings of the directors.
6. The directors shall appoint officers of the corporation. The
officers need not be shareholders, and need not be residents of Connecticut.
Officers shall be appointed annually at the directors' meeting following each
annual shareholders' meeting, for a term extending until the next annual
directors' meeting. Each officer shall hold office for the term for which he is
appointed and until his successor has been appointed and qualified. Officers
may be removed from office at any time, with or without cause by action by the
board of directors. Any vacancy or vacancies occurring in any office of the
corporation may be filled for the unexpired term by action of the sole
remaining director in office or by the concurring vote of a majority of the
remaining directors in office, though such remaining directors are less than a
quorum, though the number of directors at the meeting are less than a quorum
and though such majority is less than a quorum.
7. The Board of Directors shall, from time to time, designate
the bank or other depository in which the funds of the corporation shall be
kept, and such funds shall be drawn, in the name of the corporation, by check
signed by such officer, officers or other agents as shall be expressly
authorized for that purpose by vote or resolution of the Board of Directors.
Notes given by and in the name of the corporation shall be executed by such
officer or officers as shall be expressly authorized for that purpose by the
Board of Directors.
ARTICLE 5
Officers
1. The officers of the corporation shall consist of a president,
secretary and treasurer, and the directors may, at any time, in addition to the
foregoing officers, appoint one or more vice presidents, one or more assistant
treasurers, and one or more assistant secretaries.
2. It shall be the duty of the president to preside at all
meetings of the shareholders of the corporation, and in his absence a vice
president, or if there be no vice president, a president pro tem, shall be
appointed for such duty. He shall also perform all other duties assigned to,
or specifically required of, him to be performed by the Board of Directors and
by the act under which the corporation is organized.
3. It shall be the duty of the vice president, in the absence
of the president, to perform the president's duties, and such officer shall
also perform all other duties assigned to, or specifically required of, him to
be performed by the Board of Directors and by the act under which the
corporation is organized.
4. It shall be the duty of the secretary to make and keep
records of the votes, doings and proceedings of all meetings of the
shareholders and directors of the corporation, which records shall, at all
reasonable times, be open to the inspection of the shareholders. He shall also
perform all other duties assigned to, or specifically required of, him to be
performed by the Board of Directors and by the act under which the corporation
is organized. He shall also transmit to the shareholders and directors the
notices required by these bylaws.
5. It shall be the duty of the assistant secretary, in the
absence of the secretary, to perform the secretary's duties, and such officer
shall also perform such other duties assigned to, or specifically required of,
him to be performed by the Board of Directors.
6. It shall be the duty of the treasurer to receive and keep
the cash, funds and notes belonging to the corporation, and enter regularly in
books kept for that purpose all monies received and disbursed on account of the
corporation, which books shall at all times be open to the inspection of the
shareholders of the corporation. He shall also perform all other duties
assigned to, or specifically required of, him to be performed by the Board of
Directors and by the act under which the corporation is organized.
7. It shall be the duty of the assistant treasurer, in the
absence of the treasurer, to perform the treasurer's duties, and such officer
shall also perform such other duties assigned to, or specifically required of,
him to be performed by the Board of Directors.
8. Such officers and agents of the corporation as shall be
designated by the Board of Directors so to do shall give such bond in such sum
as the Board of Directors may from time to time fix, for the faithful
discharge of their respective duties.
ARTICLE 6
Seal
The seal of the corporation shall be in the form imprinted hereon.
ARTICLE 7
Amendment of Bylaws
Bylaws of the corporation may be adopted, repealed, or amended by
either shareholders or directors as follows:
1. Adoption, repeal, or amendment of bylaws by shareholders
shall require the affirmative vote of the holders of a majority of the voting
power of shares entitled to vote thereon or the affirmative vote of a majority
of the directors then in office.
2. No bylaws shall be adopted, and no existing bylaws shall be
amended or repealed, unless written notice of such proposed action shall have
been given in the call for the meeting of shareholders or directors at which
such adoption, amendment or repeal is to be acted upon.
ARTICLE 8
Issuance of Stock by Board of Directors
The Board of Directors may issue at one time all, or from time to
time, a portion of the unissued shares of the authorized capital stock of the
corporation, as in their opinion and discretion may be deemed for the
corporation's best interests, and may accept in payment of such additional
shares as may be issued, such considerations as from time to time shall be
determined by the Board of Directors and as may be permitted by law.
ARTICLE 9
Definitions
All definitions contained in the "General Provisions" of the
Connecticut Stock Corporation Act, unless the context otherwise requires,
shall be applicable to such words and phrases as appear herein and which are
defined in the section on "Definitions" in said "General Provisions" of said
Connecticut Stock Corporation Act.
Dated: December 19, 1988
/s/ Paula G. Pressman
_________________________________
Paula G. Pressman, Incorporator
AMENDMENT OF BYLAWS
DATED DECEMBER 19, 1988
1. The bylaws are amended to change the date on which the annual
meeting is required to be held, by deleting the first sentence of Article III,
Section 1 in its entirety and inserting in lieu thereof the following:
The annual meeting of the Shareholders shall be held within 120
days of the close of the Company's fiscal year at a time and date
as is determined by the Company's Chairman of the Board of
Directors.
2. The bylaws are amended to add the new offices of Chief
Operating Officer and Chief Executive Officer by amending Article V Section
1 by adding the following at the end thereof:
"and one Chief Operating Officer and one Chief Executive Officer".
3. The bylaws are amended to require the Chairman of the Board
to preside over shareholders' meetings by deleting Article V, Section 2 in its
entirety and inserting in lieu thereof the following:
It shall be the duty of the Chairman of the Board to preside at all
meetings of the shareholders of the corporation, and in his
absence the president, and in the president's absence a vice
president, or if there be no vice president, a president pro tem,
shall be appointed for such duty. The president shall also perform
the duties assigned to, or specifically required of, him to be
performed by the Board of Directors and by the act under which the
corporation is organized.
AMENDMENT OF BYLAWS
DATED MARCH 12, 1993
The bylaws are amended to add the new office of Chief Financial
Officer by amending Article V Section 1 by adding the following at the end
thereof:
"and one Chief Financial Officer".
<PAGE>
BYLAWS
OF
EFI METAL FORMING, INC.
ARTICLE 1
General
These Bylaws are intended to supplement and implement applicable
provisions of law and of the Certificate of Incorporation of this Corporation
with respect to the regulation of the affairs of this Corporation.
ARTICLE 2
Meetings of Shareholders
Section 2.01. Place of Meeting. Shareholders' meetings shall be
held at the principal offices of this Corporation or at such other place,
either within or without the State of Connecticut, as shall be designated in
the notice of meeting.
Section 2.02. Annual Meeting. The Annual Meeting of the
Shareholders shall be held at the principal office of the Corporation on such
date in the month of APRIL, or at such other place or on such other date, and
at such time, as shall be stated in the notice of the meeting. At such
meeting, the shareholders shall elect the Board of Directors for the ensuing
year and shall transact such other business as shall properly come before them.
Section 2.03. Special Meeting. Special meetings may be called
at any time by the President or Board of Directors and shall be called by the
President upon written request of the holders of not less than one-tenth of
the voting power of all shares entitled to vote at the meeting.
Section 2.04. Notice of Meeting. Written notice of the date,
time and place of each Annual and Special Meeting (a notice of a Special
Meeting shall also contain the general purpose or purposes for such
meeting) shall be mailed or delivered, at least seven (7) days prior to the
date of such meeting, to each shareholder entitled to vote at such meeting
at his residence or usual place of business as shown on the records of this
Corporation, provided that any one or more of such shareholders, as to
himself or themselves, may waive such notice in writing or by attendance
without protest at such meeting.
Section 2.05. Quorum. The holders of a majority of the shares
of the issued and outstanding stock entitled to vote at a meeting, present
either in person or by proxy, shall constitute a quorum for the transaction of
business at such meeting of the shareholders. Except as otherwise provided by
law or these Bylaws, all questions shall be decided by a vote of the holders
of a majority of the shares present at any meeting of shareholders at which a
quorum is present. If a quorum be not present at such meeting, the
shareholders present in person or by proxy may adjourn to such future time as
shall be agreed upon by them and notice of such adjournment shall be given to
the shareholders not present or represented at the meeting.
Section 2.06. Shareholders' Action Without Meeting. Any action
which, under any provision of the Connecticut Stock Corporation Act, may be
taken at a meeting of shareholders, may be taken without such a meeting if
consent in writing, setting forth the action so taken or to be taken, is
signed severally or collectively by all of the persons who would be entitled
to vote upon such action at a meeting, or by their duly authorized attorneys.
The Secretary of the Corporation shall file such consent or consents with the
minutes of the meetings of the shareholders.
ARTICLE 3
Shares
Section 3.01. Share Certificates. Share certificates shall be
in a form adopted by the Board of Directors and shall be signed by the
President and by the Secretary. Such certificates shall bear the seal of the
Corporation, the name of the person to whom issued, and the number of such
shares which such certificate represents. The consideration for which the
shares were issued and the date of issue shall be entered on the Corporation's
books.
Section 3.02. Transfer of Shares. Shares shall be transferred
only on the books of the Corporation by the holder thereof in person or by his
attorney.
ARTICLE 4
Directors
Section 4.01. Number, Election and Term of Office. A Board of
not less than one nor more than ten Directors shall be elected at the
organization meeting of the Corporation and thereafter shall be elected by
the shareholders entitled to vote at Annual or Special Meetings of
Shareholders; except that, as long as all of the issued and outstanding
shares are owned beneficially and of record by less than three
shareholders, the number of Directors may be less than three but not less
than the number of shareholders. The number of positions on the Board of
Directors for purposes of incorporation shall be the number fixed by
resolution of the incorporator(s). Thereafter, the number of positions on
the Board of Directors shall be the number fixed by resolution of the
shareholders or Board of Directors, or, in the absence of such resolution,
shall be the number of Directors elected at the preceding Annual Meeting of
Shareholders. The number of positions on the Board of Directors for any
year, as fixed in accordance with the foregoing (hereinafter referred to as
the "number of directorships") may be increased or decreased at any time as
provided by law.
Section 4.02. Removal of Directors. Any Director may be removed
from office at any time, with or without cause, by concurrent vote of the
holders of not less than two-thirds of the issued and outstanding shares
entitled to vote, at any meeting of shareholders called for that purpose.
Section 4.03. Vacancies. Vacancies created by an increase in the
number of directorships shall be filled for the unexpired term by action of
shareholders. Vacancies occurring by reason other than by increase in the
number of directorships shall be filled for the unexpired term by the
concurring vote of a majority of the Directors remaining in office, even
though such remaining Directors may be less than a majority of the number of
directorships (as fixed for the current year in accordance with Article IV,
Section 1). If such remaining Directors fail to fill a vacancy, then such
vacancy shall be filled by action of shareholders.
Section 4.04. Powers. The property, business and affairs of the
Corporation shall be managed by the Directors who may exercise all power and
do all the things which may be exercised or done by the Corporation subject to
provisions of law, the statutes of the State of Connecticut, the Certificate of
Incorporation, these Bylaws, and any vote of the shareholders.
ARTICLE 5
Meetings of Directors
Section 5.01. Annual Meetings. A regular meeting of the Board of
Directors shall be held without notice immediately after the Annual Meeting of
Shareholders, or as soon thereafter as convenient. At such meeting the Board of
Directors shall choose and appoint the officers of the Corporation who shall
hold their offices, subject to prior removal by the Board of Directors, until
the next annual meeting or until their successors are chosen and qualify.
Section 5.02. Regular Meetings. All other regular meetings of
the Board of Directors may be held without notice at such date, time and
place as the Board of Directors may determine and fix by resolution.
Section 5.03. Special Meetings. Special meetings of the Board
of Directors may be held upon call of the President, or upon call of any
one or more Directors.
Section 5.04. Notice. Written or oral notice of the date, time
and place of all special meetings of the Board of Directors shall be given to
each Director personally or mailed to his residence or usual place of business
at least two (2) days prior to the date of the meeting, provided that any one
or more Directors, as to himself or themselves, may waive such notice in
writing or by attendance without protest at such meeting.
Section 5.05. Quorum. Directors holding a majority of the number
of directorships shall constitute a quorum. Except as otherwise provided by
law or these Bylaws, all questions shall be decided by a vote of a majority of
the Directors present at any meeting of the Board of Directors at which a
quorum is present.
Section 5.06. Director Participation in Meetings by Telephone.
A Director may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment enabling all Directors
participating in the meeting to hear one another, and participation in a
meeting pursuant to this section shall constitute presence in person at such
meeting.
Section 5.07. Directors' Action Without Meeting. If all the
Directors severally or collectively consent in writing to any action taken or
to be taken by the Corporation, such action shall be valid as though it had
been authorized at a meeting of the Board of Directors. The Secretary of the
Corporation shall file such consent or consents with the minutes of the
meetings of the Board of Directors.
ARTICLE 6
Officers
Section 6.01. Titles, Election and Duties. The Directors shall
appoint a President, Secretary, Treasurer and such other officers as the
Directors from time to time deem appropriate. The duties of the officers of
the Corporation shall be such as are specified below and such as usually
pertain to such officers, as well as such as may be prescribed from time to
time by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.
Section 6.02. President. The President, or in his absence a
Director or other officer of the Corporation appointed by the Board of
Directors, shall preside at all meetings of the Board of Directors and
shareholders. The President shall have general charge and direction of the
business of the Corporation and shall perform such other duties as are
properly required of him by the Board of Directors.
Section 6.03. Secretary. The Secretary shall keep the minutes of
the meetings of shareholders and the Board of Directors and shall give notice
of all such meetings as required by these Bylaws. He shall have custody of such
minutes, the seal of the Corporation and the stock certificate records of the
Corporation, except to the extent some other person is authorized to have
custody and possession thereof by a resolution of the Board of Directors.
Section 6.04. Treasurer. The Treasurer shall keep the fiscal
accounts of the Corporation, including an account of all monies received or
disbursed.
ARTICLE 7
Seal
The corporate seal shall consist of a circular disc with the
name of the Corporation and the words "Connecticut" and "Seal" thereon.
ARTICLE 8
Committees
Section 8.01. The Board of Directors. The Board of Directors by
resolution adopted by the affirmative vote of Directors holding a majority of
the number of directorships may, at a meeting at which a quorum is present,
designate two or more Directors to constitute an executive committee or other
committees, which committees shall have and may exercise all such authority of
the Board of Directors as shall be provided in such resolution.
Section 8.02. Majorities. A majority of any committee shall have
the power to act. Committees shall keep full records of their proceedings and
shall report the same to the Board of Directors.
ARTICLE 9
Amendments
These Bylaws may be altered, amended, added to, or repealed by
the affirmative vote of the holders of a majority of the voting power of
shares entitled to vote thereon or by an affirmative vote of Directors holding
a majority of the number of directorships. Any notice of a meeting of
shareholders or of the Board of Directors at which these Bylaws are proposed
to be altered, amended, added to, or repealed shall include notice of such
proposed action.
<PAGE>
U.S. METAL FORMING, INCORPORATED
Restated Bylaws
The Bylaws of U.S. Metal Forming, Incorporated, were originally
adopted on March 1 1974; however, a copy of the original Bylaws cannot be
located. Therefore, the Corporation wishes to restate the Bylaws as follows:
ARTICLE 1
Meeting of Stockholders
Section 1.1. Place of Meetings. Stockholders' meetings shall
be held at the principal office or place of business of this Corporation in
the State of Connecticut, or at such other place, either within or outside
Connecticut, as shall be designated in the notice of meeting.
Section 1.2. Annual Meetings. The Annual Meeting of
Stockholders of this Corporation shall be held during the month of March of
each year, provided that if, any year, the Annual Meeting of Stockholders is
not or cannot be held during such month, then said Annual Meeting may be
called at any time before or after such month in the manner hereinafter
provided with respect to Special Meetings of Stockholders. At each Annual
Meeting of Stockholders, the Stockholders shall elect the Board of Directors
for the ensuing year and shall transact such other business as may properly
come before the meeting.
Section 1.3. Special Meetings. Special Meetings of the
Stockholders may be called at any time by the Board of Directors or the
President and shall be called by the President upon written request of one or
more Stockholders holding at least one-tenth (1/10) of the issued and
outstanding shares of stock of the Corporation. If the President shall not
call the Meeting within fifteen (15) days after receipt of such Stockholders'
request, such meeting may be called by the Stockholders making such request.
At such meetings, the Stockholders may transact such business as may properly
come before them.
Section 1.4. Adjournment of Stockholders' Meetings. If a
quorum be not present at any Annual or Special Meeting of Stockholders, the
Stockholders present, in person or by proxy, may by the affirmative vote of a
majority of the voting power of the shares represented at such Meeting and
entitled to vote thereat, adjourn to such future time as shall be agreed upon
by them, and notice of such adjournment shall be given to the Stockholders not
present or represented at the meeting, but if a quorum be present, they may so
adjourn from day to day as they see fit and no notice of such adjournment need
be given.
Section 1.5. Notice of Meeting. Notice, in writing, of the
time and place of each meeting of Stockholders and the purpose thereof shall
be given to each Stockholder of record entitled to vote at such meeting, not
less than seven (7) days nor more than fifty (50) days before such meeting.
Such notice shall be given by, or at the direction of, the President or
Secretary or other person or persons calling such meeting, but leaving such
notice with the Stockholder or at his residence or his usual place of business
or by mailing a copy thereof to him at his last known post office address as
last shown on the records of the Corporation. No such notice need be given to
any Stockholder who attends such meeting in person without protesting prior to
or at the commencement of such meeting or who waives such notice in a writing
executed and filed with the Secretary of the Corporation either before or after
the meeting. The Secretary shall cause any such waiver to be filed with or
entered upon the records of the meeting.
Section 1.6. Quorum. To constitute a quorum for the
transaction of business at any meeting of Stockholders, there must be present
in person or by proxy Stockholders of record holding at least a majority of
the issued and outstanding shares of the stock of the Corporation entitled to
vote at such meeting.
Section 1.7. Voting Rights and Requirements. Each holder of
record of shares of Common Stock of the Corporation shall be entitled to one
vote for each share of such stock held. Subject to Article 1, Section 4 hereof,
Stockholder action on any matter whatsoever shall require the affirmative vote
of at least a majority of the shares of the Common Stock of the Corporation
issued and outstanding at the time of such vote; and for those matters for
which the vote of a greater proportion of such shares may be specified by
statute, the Certificate of Incorporation of the Corporation or these Bylaws,
the affirmative vote of the proportion of such shares so specified shall be
required.
Section 1.8. Proxies. All proxies shall be in writing and
shall be filed with the Secretary of the corporation before being voted. A
proxy shall not be valid after eleven (11) months from its date of execution
unless it specifies a greater length of time for which it is to continue in
force. The attendance at any meeting by a Stockholder who shall have
previously given a proxy applicable thereto shall not, as such, have the
effect of revoking the proxy. The Corporation may treat any duly executed
proxy as not revoked and in full force and effect until it receives a duly
executed instrument revoking it, or a duly executed proxy bearing a later date.
Section 1.9. Transaction of Business Without Meetings. Any
action which may be authorized at a regularly constituted meeting of the
Stockholders may be authorized without such a meeting provided, that, either
prior to, or subsequent to, the time such action is taken, written consent
thereto is signed by all of the persons who would be entitled to vote upon
such action at such a meeting, or by their duly authorized attorneys, and such
consent is filed with the Secretary of the Corporation as part of the
corporate records.
ARTICLE 2
Stock
Section 2.1. Certificate of Stock. Certificates of Stock
shall be in a form adopted by the Board of Directors and shall be signed by
the President or a Vice President and by the Secretary, or an Assistant
Secretary, or the Treasurer, or an Assistant Treasurer, and shall be attested
by the corporate seal. Each certificate shall set forth upon the face thereof
(1) the name of the Corporation, (2) a statement that the Corporation is
organized under the laws of the State of Connecticut, (3) the name of the
person to whom issued, (4) the number, class and designation of series, if
any, of shares which such certificate represents, and (5) the par value of
each share represented by such certificate or a statement that such shares are
without par value. All certificates shall be consecutively numbered and the
name of the person owning the shares represented thereby and the number of
such shares and the date of issue shall be entered upon the Corporation's
books.
Section 2.2. Transfer of Stock. Shares of stock shall be
transferred on the books of the Corporation and a new certificate shall be
issued to the purchaser or assignee upon surrender of the original certificate
of stock properly endorsed by the holder thereof in person or by his attorney.
ARTICLE 3
Directors
Section 3.1. Powers. The property, business and affairs of the
Corporation shall be managed by or under the direction of the Directors, who
may exercise all the powers and do all things which may be exercised by or
done by the Corporation subject to the provisions of the law, the Statutes of
the State of Connecticut, the Certificate of Incorporation, these Bylaws and
any vote by the Stockholders to the contrary.
Section 3.2. Number, Election and Term of Office. The Board of
Directors shall consist of not less than three (3) nor more than seven (7)
Directorships; provided, however, that if all of the issued and outstanding
stock of the Corporation shall be owned beneficially and of record by less than
three (3) Stockholders, then the minimum number of Directorships may be less
than three (3) but shall be at least equal to the number of Stockholders. The
number of Directorships at any time within such maximum and minimum shall be
either the number fixed by resolution of the Stockholders or, in the absence
of such a resolution, the number of Directors elected at the preceding Annual
Meeting of Stockholders; provided, however, that such number may be increased
or decreased at any time by vote of the Stockholders. Reduction of the number
of Directorships shall not, as such, cause the removal from office of any
person then serving as a Director of the Corporation or shorten the term of
office of any such person. Directors shall hold office for the time for which
they are elected and/or until their successors are duly elected and qualified.
Any or all of the Directors may be removed by the Stockholders at any time at
any Annual or Special Stockholders' Meeting with or without cause and with or
without notice of hearing.
Section 3.3. Vacancies. Vacant Directorships shall be filled
for the unexpired portion of the term by vote of the Stockholders.
Section 3.4. Regular Meetings. Regular meetings of the Board
of Directors shall be held at such time and place as may be specified from
time to time by resolution of the Board of Directors and notice thereof need
not be given. If no such resolution shall be in effect, regular meetings of
the Board of Directors shall be called in the manner hereinafter provided with
respect to Special Meetings of the Board of Directors.
Section 3.5. Special Meetings. Special meetings of the Board
of Directors may be called by the President and shall be called by the
President upon written request of any two (2) Directors. If the President
shall not call such meetings within fifteen (15) days after receipt of such
written request, the Directors making such request may call the meeting. At
least two (2) days' oral or written notice of each special meeting stating the
time and place of the meeting shall be given to each Director. No notice of a
Directors' meeting need be given to any Director who attends such meeting in
person without protesting prior to or at the commencement of such meeting, or
who waives such notice in writing executed and filed with the Secretary of the
Corporation, either before or after the meeting. The Secretary shall cause any
such waiver to be filed with or entered upon the records of the meeting.
Section 3.6. Quorum and Vote. A majority of the Directorships
shall constitute a quorum. The affirmative vote of the Directors holding a
majority of the Directorships shall be required for action by the Board of
Directors on any matter whatsoever. A director may participate in a meeting of
the Board of Directors by means of conference telephone or similar
communications equipment enabling all Directors participating in the meeting
to hear one another, and participation in a meeting by such means shall
constitute presence in person at such meeting.
Section 3.7. Committees. The Board of Directors may designate
two (2) or more Directors to constitute an Executive Committee or other
committee. Each such committee shall have and may exercise all such authority
of the Board of Directors as shall be provided in the resolution establishing
such committee. Each such committee shall serve at the pleasure of the Board
of Directors and shall keep minutes of its proceedings which shall be reported
to the Board of Directors.
Section 3.8. Transaction of Business Without Meeting. Any
corporate action which can be authorized at a regularly constituted meeting of
the Board of Directors or a committee thereof may be authorized without such a
meeting, provided that all of the Directors or all of the members of a
committee thereof, as the case may be, consent in writing to such action
before or after the time such action is taken and the number of such Directors
or members constitutes a quorum for such action. The Secretary of the
Corporation shall file such consents with the Minutes of the Meeting of the
Board of Directors.
Section 3.9. Indemnification and Reimbursement. The
Corporation shall be bound by and comply with the provisions of Section
33-320a of the Stock Corporation Act.
ARTICLE 4
Officers
Section 4.1. Titles, Election and Duties. The Directors shall
choose from among their number a President and shall appoint a Secretary and
may, from time to time, appoint one or more Vice Presidents, an Assistant
Treasurer, an Assistant Secretary and such other officers as they, the
Directors, deem expedient. Any two or more offices may be held by the same
person, except the offices of President and Vice President and the offices of
President and Secretary. The duties of the Officers of the Corporation shall be
such as are imposed by these Bylaws and from time to time prescribed by the
Directors.
Section 4.2. President. The President shall preside at all
meetings of the Directors. He shall have general charge and direction of the
business of the Corporation subject to the control of the Board of Directors.
Section 4.3. Vice President. The Vice President, if any or if
there shall be more than one, the Vice presidents in the order of their
seniority or in such other order as the Board of Directors may determine,
shall assist the President in the performance of his duties and in the event
of the absence or disability of the President shall perform the duties and
exercise the powers of his office.
Section 4.4. Treasurer. The Treasurer shall be in charge of
the financial affairs of the Corporation. He shall keep the fiscal accounts of
the Corporation, including an account of all moneys received or disbursed. At
intervals of not more than twelve (12) months, he shall prepare or have
prepared for the Corporation a balance sheet showing the financial condition of
the Corporation as of a date not more than four (4) months prior thereto, and a
profit and loss statement respecting its operation for the twelve (12) months
preceding such date. The balance sheet and the profit and loss statement shall
be deposited at the principal office of the Corporation and shall be kept by
the Corporation for at least ten (10) years from such date. In addition, within
thirty (30) days after the preparation of each such balance sheet and profit
and loss statements, the Corporation shall mail a copy thereof to each
Stockholder of record. He may endorse for and on behalf of the Corporation
checks, notes and other obligations and shall deposit the same and all moneys
and valuables in the name of and to the credit of the Corporation in such
banks and depositories as the Board of Directors shall designate. The
Treasurer shall have custody of and shall have the power to endorse for
transfer on behalf of the Corporation, stock, securities or other investment
instrument owned by the Corporation.
Section 4.5. Assistant Treasurer. An Assistant Treasurer, if
any, shall assist the Treasurer in the performance of his duties and shall
carry out the duties of the Treasurer whenever the Treasurer is unable to
perform such duties.
Section 4.6. Secretary. The Secretary shall keep the Minutes
of the Meetings of Stockholders and Directors and shall give notice of all such
meetings as required in these Bylaws. He shall have custody of the seal of the
Corporation and all books, records and papers of the Corporation, except those
in the custody of the Treasurer or some other person authorized to have
custody and possession thereof by a resolution of the Board of Directors.
Section 4.7. Assistant Secretary. The Assistant Secretary, if
any, shall assist the Secretary in the performance of his duties and shall
carry out the duties of the Secretary whenever the Secretary is unable to
perform such duties.
Section 4.8. Compensation. The salaries of all Officers shall
be fixed by the Board of Directors. The Directors shall not receive any stated
salary for their services as Directors but by vote of the Board of Directors
they may be allowed such compensation for expenses and attendance at meetings
of the Board and committees as may be determined by such vote; provided that
nothing herein contained shall be construed to preclude any Director from
serving the Corporation in any other capacity outside of his duties as a
Director and receiving compensation therefor.
Section 4.9. Terms of Office. Each of such Officers shall
serve for the term for which he is elected and/or until his successor is duly
appointed and qualified, but any Officer may be removed by the Board of
Directors at any time with or without cause and with or without notice or
hearing. Vacancies among the Officers by reason of death, resignation or other
causes shall be filled by the Board of Directors.
ARTICLE 5
Seal
Section 5.1. Design. The corporate seal of this Corporation
shall be a circular seal, as follows:
(Affix corporate seal here)
ARTICLE 6
Amendments
Section 6.1. By Stockholder. New Bylaws may be adopted and any
Bylaws may be amended or repealed by the Stockholders by the affirmative vote
of the holders of a majority of the voting power of the shares entitled to
vote thereon; provided that the notice of any meetings of Stockholders at
which Bylaws are to be adopted, amended or repealed shall include notice of
such proposed action.
Section 6.2. Record of Changes. Whenever a Bylaw is amended or
repealed or a new Bylaw is adopted, such action and the date on which it was
taken shall be noted on the original Bylaws in the appropriate place or a new
set of Bylaws shall be prepared incorporating such changes.
Section 6.3. Inconsistencies with Certificate of
Incorporation. If any provisions of these Bylaws shall be found to be
inconsistent with any provisions of the Certificate of Incorporation, as
presently existing, or as from time to time amended, the latter shall
constitute the controlling authority.
Section 6.4. Statutory Reference. The term Stock Corporation
Act as used herein shall mean Title 33 Chapter 599 of the General Statutes of
Connecticut as amended from time to time.
Certified by the Secretary of U.S. Metal Forming, Inc., this
10th day of January, 1996, as the Bylaws adopted by the Corporation on
March 1, 1974.
-------------------------------
Elizabeth M. Dayon, Secretary
<PAGE>
BY-LAWS
OF
GREAT LAKE ACQUISITION CORP.
(a Delaware corporation)
Adopted January 25, 1996
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall be
held at such place either within or without the State of Delaware as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting.
Section 2. Annual Meetings. Annual meetings of stockholders shall be
held at such date and time as shall be designated from time to time by the board
of directors and stated in the notice of the meeting, at which they shall elect
a board of directors, and transact such other business as may properly be
brought before the meeting.
Section 3. Notice of Annual Meetings. Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting.
Section 4. List of Stockholders Entitled to Vote. The officer who has
charge of the stock ledger of the corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the
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address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose genuine to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the corporation's principal
office. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.
Section 5. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president and shall be called
by the president or secretary at the request in writing of a majority of the
board of directors or of the holders of 25 percent of all stock issued and
outstanding and entitled to vote on the date such request was received by the
corporation. Such request shall state the purpose or purposes of the proposed
meeting.
Section 6. Notice of Special Meetings. Written notice of a special
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less than ten nor
more than sixty days before the date of the meeting, to each stockholder
entitled to vote at such meeting.
Section 7. Business Transacted at Special Meetings. Business transacted
at any special meeting of stockholders shall be limited to the purposes stated
in the notice.
Section 8. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. Votes Required. When a quorum is present at any meeting, the
vote of the holders of a majority of the stock having voting power present in
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person or represented by proxy shall decide any question brought before such
meeting, unless the vote is for the election of directors in which case the
candidates receiving the greatest number of votes shall be elected, or the
question is one upon which by express provision of the statutes or of the
certificate of incorporation or by-laws a different vote is required in which
case such express provision shall govern and control the decision of such
question.
Section 10. Voting in Person or by Proxty. Unless otherwise provided in
the certificate of incorporation each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such stockholder, but no proxy shall
be voted on after eleven months from its date, unless the proxy provides for a
longer period.
Section 11. Consent in Writing. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by all of the
holders of outstanding stock who would be entitled to notice of such meeting.
ARTICLE III
DIRECTORS
Section 1. Number, Election and Tenn of Office. Initially there shall
be one (1) director and thereafter the number of directors shall be as provided
from time to time in the by-laws, provided that no amendment to the by-laws
decreasing the number of directors shall have the effect of shortening the term
of any incumbent director, and provided further that no action shall be taken by
the directors (whether through amendment of the by-laws or otherwise) to
increase the number of directors as provided in the by-laws from time to time
unless at least two-thirds (66 2/3%) of the directors then in office shall
concur in said action. The directors shall be elected at the annual meeting of
the stockholders, except as provided in Section 2 of this Article, and each
director shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and Newly-created Directorships. Vacancies and
newly-created directorships resulting from any increase in the authorized number
of directors may be filled by a majority of the directors then in office, or by
a sole remaining director, and the directors so chosen shall hold office until
the next election of directors and until their successors are duly elected and
shall qualify, unless sooner displaced. If there are no directors in office,
then an election of directors may be held in the manner provided by statute.
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Section 3. Authority. The business of the corporation shall be managed
by or under the direction of its board of directors which may exercise all such
powers of the corporation and do all lawful acts and things as are not by
statute or by the certificate of incorporation or by these by-laws directed or
required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. Place of Meetings. The board of directors of the corporation
may hold meetings, both regular and special, either within or without the State
of Delaware.
Section 5. Organizational Meeting. The first meeting of each newly
elected board of directors shall be held immediately after the annual meeting of
stockholders at the same place as such annual meeting is held and no notice of
such meeting shall be necessary to the newly elected directors in order legally
to constitute the meeting, provided a quorum shall be present. In the event such
meeting is not held at the time and place provided herein, the meeting may be
held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the board of directors, or as shall
be specified in a written waiver signed by all of the directors.
Section 6. Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and at such place as shall from time to
time be determined by the board.
Section 7. Special Meetings. Special meetings of the board of directors
may be called by the chairman of the board or the president on three days'
notice to each director, either personally or by mail or by telegram; special
meetings shall be called by the chairman of the board or the president or the
secretary in like manner and on like notice on the written request of a majority
of the directors.
Section 8. Quorum. At all meetings of the board of directors a majority
of the directors shall constitute a quorum for the transaction of business and
the act of a majority of the directors present at any meeting at which there is
a quorum shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Consent in Writing. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
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may be taken without a meeting, if all members of the board of directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the board of directors or
committee.
Section 10. Participation in Meetings by Telephone. Unless otherwise
restricted by the certificate of incorporation or these by-laws, members of the
board of directors, or any committee designated by the board of directors, may
participate in a meeting of the board of directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. Designations, Powers. The board of directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, each committee to consist of not less than three directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee.
In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in the place of
any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution; and, unless the resolution or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors.
Section 12. Minutes. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when required.
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COMPENSATION OF DIRECTORS
Section 13. Compensation. Unless otherwise restricted by the
certificate of incorporation or these by-laws, the board of directors shall have
the authority to fix the compensation of directors. The directors may be paid
their expenses, if any, of attendance at each meeting of the board of directors
and may be paid a fixed sum for attendance at each meeting of the board of
directors or a stated salary as director. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
REMOVAL OF DIRECTORS
Section 14. Notwithstanding any other provisions of the certificate of
incorporation or the by-laws of the corporation (and notwithstanding the fact
that some lesser percentage may be specified by law, the certificate of
incorporation or the by-laws of the corporation), any director or the entire
board of directors of the corporation may be removed from office at any time,
with or without cause, but only by the affirmative vote of the holders of at
least two-thirds (66-2/3%) of all of the outstanding shares of capital stock of
the corporation entitled to vote on the election of directors at a meeting of
stockholders called for that purpose, except that if the board of directors, by
an affirmative vote of at least a majority of the entire board of directors,
recommends removal of a director to the stockholders, such removal may be
effected by the affirmative vote of the holders of at least a majority of the
outstanding shares of capital stock of the corporation entitled to vote on the
election of directors at a meeting of stockholders for that purpose.
ARTICLE IV
NOTICES
Section 1. Methods. Whenever, under the provisions of the statutes or
of the certificate of incorporation or of these by-laws, notice is required to
be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed to
such director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Waiver. Whenever any notice is required to be given under
the provisions of the statutes or of the certificate of incorporation or of
these by-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
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ARTICLE V
OFFICERS
Section 1. Designation. The officers of the corporation shall be chosen
by the board of directors and shall be a president, a secretary and a treasurer.
The board of directors may also choose a chairman of the board, vice-presidents
(including senior, executive or assistant vice-presidents), and one or more
assistant secretaries and assistant treasurers. Any number of offices may be
held by the same person, unless the certificate of incorporation or these
by-laws otherwise provides.
Section 2. Election. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a chairman, a president, one or
more vice-presidents, a secretary and a treasurer.
Section 3. Others. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. Salaries. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. Term of Office. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the board of directors. Any vacancy occurring
in any office of the corporation shall be filled by the board of directors.
CHAIRMAN OF THE BOARD
Section 6. Powers. If chosen by the Board of Directors, the chairman of
the board of directors shall be the chief executive officer of the corporation
and shall have general control and management of the business affairs and
policies of the corporation. He shall be generally responsible for the proper
conduct of the business of the corporation. During the absence or disability of
the president, he shall exercise all the powers and discharge all the duties of
the president. He shall preside at all meetings of the stockholders and of the
board of directors at which he is present; and, in his absence, the president
shall preside at such meetings. He shall have such other powers and perform such
other duties as from time to time may be conferred or imposed upon him by the
board of directors.
Section 7. Execution of Contracts. He shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the corporation, except
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where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the board of directors to some other officer or agent of the corporation.
THE PRESIDENT
Section 8. Powers. The president of the corporation shall be the
principal operating and administrative officer of the corporation. If there is
no chairman of the board or during the absence or disability of the chairman of
the board, he shall exercise all of the powers and discharge all of the duties
of the chairman of the board and chief executive officer. He shall, in the
absence of the chairman of the board, possess power to sign all certificates,
contracts and other instruments of the corporation. He shall, in the absence of
the chairman of the board, preside at all meetings of the stockholders and of
the board of directors. He shall perform all such other duties as are incident
to his office or are properly required of him by the board of directors.
THE VICE-PRESIDENTS
Section 9. Powers. In the absence of the president or in the event of
his inability or refusal to act, the vice-president (or in the event there be
more than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 10. Secretary. The secretary shall attend all meetings of the
board of directors and all meetings of the stockholders and record all the
proceedings of the meetings of the corporation and of the board of directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors or chief executive officer, under whose supervision he shall be. He
shall have custody of the corporate seal of the corporation and he, or an
assistant secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.
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Section 11. Assistant Secretary. The assistant secretary, or if there
be more than one, the assistant secretaries in the order determined by the board
of directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. Duties. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
Section 13. Disbursements. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the chief executive officer and the
board of directors, at its regular meetings, or when the board of directors so
requires, an account of all his transactions as treasurer and of the financial
condition of the corporation.
Section 14. Bond. If required by the board of directors, he shall give
the corporation a bond (which shall be renewed each year) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 15. Assistant Treasurer. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors (or if there be no such determination, then in the order of
their election) shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
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ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Certificate. Every holder of stock in the corporation shall
be entitled to have a certificate, signed by, or in the name of the corporation
by, the chairman of the board of directors, or the president or a vice-president
and the treasurer or an assistant treasurer, or the secretary or an assistant
secretary of the corporation, certifying the number of shares owned by him in
the corporation.
Section 2. Signatures. Any of or all the signatures on the certificate
may be facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
Section 3. Lost Certificates. The board of directors (through the
corporation's duly authorized officers) may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors (through the
corporation's duly authorized officers) may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
Section 4. Transfer of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 5. Record Date. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the
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board of directors may fix, in advance, a record date, which shall not be more
than sixty nor less than ten days before the date of such meeting, nor more than
sixty days prior to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of directors may
fix a new record date for the adjourned meeting.
Section 6. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation.
Section 2. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, deem
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall deem conducive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 3. Annual Statement. The board of directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
Section 4. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
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Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
Section 6. Seal. The corporate seal shall have inscribed thereon the
name of the corporation and the word "Seal." The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 7. Indemnification. The corporation shall indemnify its
officers, directors, employees and agents to the fullest extent permitted by the
General Corporation Law of Delaware.
ARTICLE VIII
AMENDMENTS
Section 1. Procedure, Vote Required. These by laws may be amended or
repealed by affirmative vote of the holders of record of shares entitling them
to exercise a majority of the voting power on such proposal or by a majority
vote of the board of directors when such power is conferred upon the board of
directors by the certificate of incorporation.
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BY-LAWS
OF
INSILCO ASIA CORPORATION
(a Delaware corporation)
Adopted March 4, 1995
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall be
held at such place either within or without the State of Delaware as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting.
Section 2. Annual Meetings. Annual meetings of stockholders, commencing
with the year ____, shall be held on the ____ in ____ if not a legal holiday,
and if a legal holiday, then on the next secular day following, at _____, or at
such other date and time as shall be designated from time to time by the board
of directors and stated in the notice of the meeting, at which they shall elect
a board of directors, and transact such other business as may properly be
brought before the meeting.
Section 3. Notice of Annual Meetings. Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting.
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Section 4. List of Stockholders Entitled to Vote. The officer who has
charge of the stock ledger of the corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the
corporations principal office. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
Section 5. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president and shall be called
by the president or secretary at the request in writing of a majority of the
board of directors or of the holders of 25 percent of all stock issued and
outstanding and entitled to vote on the date such request was received by the
corporation. Such request shall state the purpose or purposes of the proposed
meeting.
Section 6. Notice of Special Meetings. Written notice of a special
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less than ten nor
more than sixty days before the date of the meeting, to each stockholder
entitled to vote at such meeting.
Section 7. Business Transacted at Special Meetings. Business transacted
at any special meeting of stockholders shall be limited to the purposes stated
in the notice.
Section 8. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record
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date is fixed for the adjourned meeting, a notice of the adjourned meeting
date is fixed for the adjourned meeting, a notice of the adjourned meeting
shall be given to each stockholder of record entitled to vote at the
meeting.
Section 9. Votes Required. When a quorum is present at any meeting, the
vote of the holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought before such
meeting, unless the vote is for the election of directors in which case the
candidates receiving the greatest number of votes shall be elected, or the
question is one upon which by express provision of the statutes or of the
certificate of incorporation or by-laws a different vote is required in which
case such express provision shall govern and control the decision of such
question.
Section 10. Voting in Person or by Proxy. Unless otherwise provided in
the certificate of incorporation each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such stockholder, but no proxy shall
be voted on after eleven months from its date, unless the proxy provides for a
longer period.
Section 11. Consent in Writing. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by all of the
holders of outstanding stock who would be entitled to notice of such meeting.
ARTICLE III
DIRECTORS
Section 1. Number, Election and Term of Office. The number of directors
of the corporation shall be not less than five (5) nor more than eighteen (18).
Initially there shall be twelve (12) directors and thereafter the number of
directors shall be as provided from time to time in the by-laws, provided that
no amendment to the by-laws decreasing the number of directors shall have the
effect of shortening the term of any incumbent director, and provided further
that no action shall be taken by the directors (whether through amendment of the
by-laws or otherwise) to increase the number of directors as provided in the
by-laws from time to time unless at least two-thirds (66 2/3%) of the directors
then in office shall concur in said action. The directors shall be elected at
the annual meeting of the stockholders, except as provided in Section 2 of this
Article, and each director shall hold office until his successor is elected and
qualified. Directors need not be stockholders.
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Section 2. Vacancies and Newly-created Directorships. Vacancies and
newly-created directorships resulting from any increase in the authorized number
of directors may be filled by a majority of the directors then in office, or by
a sole remaining director, and the directors so chosen shall hold office until
the next election of directors and until their successors are duly elected and
shall qualify, unless sooner displaced. If there are no directors in office,
then an election of directors may be held in the manner provided by statute.
Section 3. Authority. The business of the corporation shall be managed
by or under the direction of its board of directors which may exercise all such
powers of the corporation and do all such lawful acts and things as are not by
statute or by the certificate of incorporation or by these by-laws directed or
required to be exercised or done by the stockholders.
Meetings of the Board of Directors
Section 4. Place of Meetings. The board of directors of the corporation
may hold meetings, both regular and special, either within or without the State
of Delaware.
Section 5. Organizational Meeting. The first meeting of each newly
elected board of directors shall be held immediately after the annual meeting of
stockholders at the same place as such annual meeting is held and no notice of
such meeting shall be necessary to the newly elected directors in order legally
to constitute the meeting, provided a quorum shall be present. In the event such
meeting is not held at the time and place provided herein, the meeting may be
held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the board of directors, or as shall
be specified in a written waiver signed by all of the directors.
Section 6. Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and at such place as shall from time to
time be determined by the board.
Section 7. Special Meetings. Special meetings of the board of directors
may be called by the chairman of the board or the president on three days
notice to each director, either personally or by mail or by telegram; special
meetings shall be called by the chairman of the board or the president or the
secretary in like manner and on like notice on the written request of a majority
of the directors.
Section 8. Quorum. At all meetings of the board of directors a majority
of the directors shall constitute a quorum for the transaction of business and
the act of a majority of the directors present at any meeting at which there is
a quorum
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shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Consent in Writing. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if all members of the board of directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the board of directors or
committee.
Section 10. Participation in Meetings by Telephone. Unless otherwise
restricted by the certificate of incorporation or these by-laws, members of the
board of directors, or any committee designated by the board of directors, may
participate in a meeting of the board of directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
Committees of Directors
Section 11. Destination; Powers. The board of directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, each committee to consist of not less than three directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee.
In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in the place of
any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporations property and
assets, recommending to the
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stockholders a dissolution of the corporation or a revocation of a
dissolution; and, unless the resolution or the certificate of incorporation
expressly so provide, no such committee shall have the power or authority to
declare a dividend or to authorize the issuance of stock. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the board of directors.
Section 12. Minutes. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when required.
Compensation of Directors
Section 13. Compensation. Unless otherwise restricted by the
certificate of incorporation or these by-laws, the board of directors shall have
the authority to fix the compensation of directors. The directors may be paid
their expenses, if any, of attendance at each meeting of the board of directors
and may be paid a fixed sum for attendance at each meeting of the board of
directors or a stated salary as director. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
Removal of Directors
Section 14. Notwithstanding any other provisions of the certificate of
incorporation or the by-laws of the corporation (and notwithstanding the fact
that some lesser percentage may be specified by law, the certificate of
incorporation or the by-laws of the corporation), any director or the entire
board of directors of the corporation may be removed from office at any time,
with or without cause, but only by the affirmative vote of the holders of at
least two-thirds (66-2/3%) of all of the outstanding shares of capital stock of
the corporation entitled to vote on the election of directors at a meeting of
stockholders called for that purpose, except that if the board of directors, by
an affirmative vote of at least a majority of the entire board of directors,
recommends removal of a director to the stockholders, such removal may be
effected by the affirmative vote of the holders of at least a majority of the
outstanding shares of capital stock of the corporation entitled to vote on the
election of directors at a meeting of stockholders for that purpose.
ARTICLE IV
NOTICES
Section 1. Methods. Whenever, under the provisions of the statutes or
of the certificate of incorporation or of these by-laws, notice is required to
be given
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to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Waiver. Whenever any notice is required to be given under
the provisions of the statutes or of the certificate of incorporation or of
these by-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. Designation. The officers of the corporation shall be chosen
by the board of directors and shall be a president, a secretary and a treasurer.
The board of directors may also choose a chairman of the board, vice-presidents
(including senior, executive or assistant vice-presidents), and one or more
assistant secretaries and assistant treasurers. Any number of offices may be
held by the same person, unless the certificate of incorporation or these
by-laws otherwise provides.
Section 2. Election. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a chairman, a president, one or
more vice-presidents, a secretary and a treasurer.
Section 3. Others. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. Salaries. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. Term of Office. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the board of directors. Any vacancy occurring
in any office of the corporation shall be filled by the board of directors.
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Chairman of the Board
Section 6. Powers. If chosen by the Board of Directors, the chairman of
the board of directors shall be the chief executive officer of the corporation
and shall have general control and management of the business affairs and
policies of the corporation. He shall be generally responsible for the proper
conduct of the business of the corporation. During the absence or disability of
the president, he shall exercise all the powers and discharge all the duties of
the president. He shall preside at all meetings of the stockholders and of the
board of directors at which he is present; and, in his absence, the president
shall preside at such meetings. He shall have such other powers and perform such
other duties as from time to time may be conferred or imposed upon him by the
board of directors.
Section 7. Execution of Contracts. He shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the board of directors to some other officer or agent of the corporation.
The President
Section 8. Powers. The president of the corporation shall be the
principal operating and administrative officer of the corporation. If there is
no chairman of the board or during the absence or disability of the chairman of
the board, he shall exercise all of the powers and discharge all of the duties
of the chairman of the board and chief executive officer. He shall, in the
absence of the chairman of the board, possess power to sign all certificates,
contracts and other instruments of the corporation. He shall, in the absence of
the chairman of the board, preside at all meetings of the stockholders and of
the board of directors. He shall perform all such other duties as are incident
to his office or are properly required of him by the board of directors.
The Vice-Presidents
Section 9. Powers. In the absence of the president or in the event of
his inability or refusal to act, the vice-president (or in the event there be
more than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.
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The Secretary and Assistant Secretary
Section 10. Secretary. The secretary shall attend all meetings of the
board of directors and all meetings of the stockholders and record all the
proceedings of the meetings of the corporation and of the board of directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors or chief executive officer, under whose supervision he shall be. He
shall have custody of the corporate seal of the corporation and he, or an
assistant secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.
Section 11. Assistant Secretary. The assistant secretary, or if there
be more than one, the assistant secretaries in the order determined by the board
of directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
The Treasurer and Assistant Treasurers
Section 12. Duties. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
Section 13. Disbursements. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the chief executive officer and the
board of directors, at its regular meetings, or when the board of directors so
requires, an account of all his transactions as treasurer and of the financial
condition of the corporation.
Section 14. Bond. If required by the board of directors, he shall give
the corporation a bond (which shall be renewed each year) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation,
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in case of his death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation.
Section 15. Assistant Treasurer. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors (or if there be no such determination, then in the order of
their election) shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Certificate. Every holder of stock in the corporation shall
be entitled to have a certificate, signed by, or in the name of the corporation
by, the chairman of the board of directors, or the president or a vice-president
and the treasurer or an assistant treasurer, or the secretary or an assistant
secretary of the corporation, certifying the number of shares owned by him in
the corporation.
Section 2. Signatures. Any of or all the signatures on the certificate
may be facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
Section 3. Lost Certificates. The board of directors (through the
corporations duly authorized officers) may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors (through the
corporations duly authorized officers) may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
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Section 4. Transfer of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 5. Record Date. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
Section 6. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation.
Section 2. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, deem
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall deem conducive to the interest of
the corporation, and the
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directors may modify or abolish any such reserve in the manner in which it was
created.
Section 3. Annual Statement. The board of directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
Section 4. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
Section 6. Seal. The corporate seal shall have inscribed thereon the
name of the corporation and the word Seal. The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 7. Indemnification. The corporation shall indemnify its
officers, directors, employees and agents to the fullest extent permitted by the
General Corporation Law of Delaware.
ARTICLE VIII
AMENDMENTS
Section 1. Procedure; Vote Required. These by-laws may be amended or
repealed by affirmative vote of the holders of record of shares entitling them
to exercise a majority of the voting power on such proposal or by a majority
vote of the board of directors when such power is conferred upon the board of
directors by the certificate of incorporation.
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BYLAWS
OF
SIGNAL TRANSFORMER CO., INC.
Adopted and Effective
September 15, 1990
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES...........................................................1
Section 1. Registered Office.................................................1
Section 2. Other Offices.....................................................1
ARTICLE II MEETINGS OF STOCKHOLDERS..........................................1
Section 1. Place of Meetings.................................................1
Section 2. Annual Meetings...................................................1
Section 3. Special Meetings..................................................1
Section 4. Quorum............................................................2
Section 5. Voting............................................................2
Section 6. List of Stockholders Entitled to Vote.............................2
ARTICLE III DIRECTORS.........................................................3
Section 1. Number and Election of Directors..................................3
Section 2. Vacancies.........................................................3
Section 3. Duties and Powers.................................................3
Section 4. Meetings..........................................................3
Section 5. Quorum............................................................4
Section 6. Actions by Written Consent........................................4
Section 7. Meetings by Conference Telephone..................................4
Section 8. Committees........................................................5
Section 9. Compensation......................................................5
Section 10. Interested Directors..............................................5
ARTICLE IV OFFICERS..........................................................6
Section 1. General...........................................................6
Section 2. Election..........................................................6
Section 3. President.........................................................6
Section 4. Executive Vice Presidents and Vice Presidents.....................7
Section 5. Secretary.........................................................7
Section 6. Treasurer.........................................................7
Section 7. Assistant Secretaries.............................................8
Section 8. Assistant Treasurers..............................................8
Section 9. Other Officers....................................................8
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ARTICLE V STOCK.............................................................9
Section 1. Form of Certificates..............................................9
Section 2. Signatures........................................................9
Section 3. Lost Certificates.................................................9
Section 4. Transfers.........................................................9
ARTICLE VI NOTICES...........................................................9
Section 1. Notices..........................................................10
Section 2. Waivers of Notice................................................10
ARTICLE VII INDEMNIFICATION..................................................10
Section 1. General..........................................................10
Section 2. Non-Exclusivity..................................................10
ARTICLE VIII GENERAL PROVISIONS...............................................11
Section 1. Dividends........................................................11
Section 2. Disbursements....................................................11
Section 3. Fiscal Year......................................................11
Section 4. Corporate Seal...................................................11
Section 5. Amendments.......................................................11
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BYLAWS
OF
SIGNAL TRANSFORMER CO., INC.
(hereinafter the Corporation)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be located at 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as may be designated from
time to time by the Board of Directors and stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of stockholders shall be
held on such date and at such time as may be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meeting the
stockholders shall elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting. Written
notice of the annual meeting stating the place, date and hour of the meeting
shall be given to each stockholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Corporations Certificate of Incorporation as may be amended and restated
from time to time (the Certificate of Incorporation), special meetings of
stockholders,
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for any purpose or purposes, may be called by either (a) the Chairman of the
Board of Directors, if there be one or (b) the President, and shall be called by
any officer of the Corporation at the instruction of a majority of the Board of
Directors. Written notice of a special meeting stating the place, date and hour
of the meeting and the purpose or purposes for which the meeting is called shall
be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these bylaws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
voting power of the stock represented and entitled to vote thereat. Such votes
may be cast in person or by proxy but no proxy shall be voted or acted upon
after three years from its date, unless such proxy provides for a longer period.
The Board of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his or her discretion, may require
that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be
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held. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof and may be inspected by any stockholder of
the Corporation who is present. The stock ledger of the Corporation shall be the
only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by this Section 6 of this Article II or the books of
the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The business and affairs
of the Corporation shall be managed by a Board of Directors initially consisting
of one director. The number of directors of the Corporation may be increased or
decreased from time to time by resolution adopted by the Board of Directors, but
no decrease by the Board of Directors shall have the effect of shortening the
term of any incumbent director. Except as provided in Section 2 of this Article
III, directors shall be elected by a plurality of the votes cast at annual
meetings of stockholders and each director so elected shall hold office until
the next annual meeting and until his or her successor is duly elected and
qualified or until his or her earlier resignation or removal. Any director may
resign at any time upon notice to the Corporation. A director need not be a
stockholder, a citizen of the United States or a resident of the State of
Delaware.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and
qualified or until their earlier resignation or removal. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these bylaws
directed or required to be exercised or done by the stockholders.
Section 4. Meetings. Meetings shall be held at such time as the Board
of Directors shall fix, except that the first meeting of a newly elected Board
of Directors shall be held as soon after its election as the directors may
conveniently assemble. Meetings shall be held at such place within or without
the State of Delaware as may be fixed by the Board of Directors. No call shall
be required for
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regular meetings for which the time and place have been fixed. Special meetings
may be called by or at the direction of the Chairman of the Board, if
any, the President or a majority of the directors then in office. No notice
shall be required for regular meetings for which the time and place have been
fixed. Written, oral or any other mode of notice of the time and place shall be
given for special meetings in sufficient time for the convenient assembly of the
directors thereat. Notice need not be given to any director or to any member of
a committee of directors who submits a written waiver of notice signed by him or
her before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he or
she attends a meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the directors need be specified in
any written waiver of notice.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these bylaws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall constitute
a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors. If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 6. Actions by Written Consent. Unless otherwise provided by the
Certificate of Incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, in one document or in
counterparts, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 7. Meetings by Conference Telephone. Unless otherwise provided
by the Certificate of Incorporation or these bylaws, members of the Board of
Directors or any committee designated by the Board of Directors may participate
in a meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 7 shall constitute presence in person at such
meeting.
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Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such Committee. In the absence or disqualification
of a member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in place of any
absent or disqualified member. Any committee, to the extent allowed by law and
provided in the resolution establishing such committee, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation. Without limitation to
the foregoing, any committee shall have the power and authority to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the Delaware General Corporation
Law. Each committee shall keep regular minutes and report to the Board of
Directors when required.
Section 9. Compensation. Directors as such shall not receive any stated
salary for their services, but by resolution of the Board of Directors a fixed
sum and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board of Directors or any committee thereof;
provided that nothing contained herein shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his, her or their
votes are counted for such purpose if (a) the material facts as to his, her or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum, (b) the material facts as to
his, her or their relationship or interest and as to the contract or transaction
are disclosed or are known to the stockholders
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entitled to vote thereon and the contract or transaction is specifically
approved in good faith by vote of the stockholders or (c) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified by the Board of Directors, a committee thereof or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee that
authorizes the contract or transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President and a Secretary. The Board of
Directors, in its discretion, may also choose a Treasurer and one or more
Executive Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant
Treasurers and other officers. Any number of offices may be held by the same
person, unless otherwise prohibited by law, the Certificate of Incorporation or
these bylaws. The officers of the Corporation need not be stockholders of the
Corporation or directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each annual meeting of stockholders shall elect the officers of the
Corporation, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified or until their earlier resignation or
removal. Any officer elected by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors and may be altered from time to time except as otherwise
provided by contract.
Section 3. President. The President shall, subject to the control of
the Board of Directors, have general supervision of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He or she shall be the Chief Executive
Officer of the Corporation and shall execute all bonds, mortgages, contracts and
other instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these bylaws, the Board of Directors or
the President. In the absence or disability of the Chairman of the Board of
Directors, or if there be none, the President shall preside at all meetings of
the stockholders and the Board
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of Directors. The President shall also perform such other duties and may
exercise such other powers as from time to time may be assigned to him or her by
these bylaws or by the Board of Directors.
Section 4. Executive Vice Presidents and Vice Presidents. At the request
of the President or in his or her absence or in the event of his or her
inability or refusal to act the Executive Vice President or the Executive Vice
Presidents if there be more than one, and the Vice President or the Vice
Presidents, if there be more than one (in the order designated by the Board of
Directors), shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Each Executive Vice President and each Vice President shall perform
such other duties and have such other powers as the Board of Directors from time
to time may prescribe. If there be no Executive Vice President or Vice
President, the Board of Directors shall designate the officer of the Corporation
who, in the absence of the President or in the event of the inability or refusal
of the President to act, shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President.
Section 5. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he or she shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the President may
choose another officer to cause such notice to be given. The Secretary shall
have custody of the seal of the Corporation and the Secretary or an Assistant
Secretary, if there be one, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by the signature
of the Secretary or by the signature of any such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix the seal
of the Corporation and to attest the affixing by his or her signature. The
Secretary shall see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 6. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys
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and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. The Treasurer
shall disburse the funds of the Corporation as may be ordered by the Board
of Directors, taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at its regular meeting,
or when the Board of Directors so requires, an account of all his or her
transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his or her office and for the restoration to
the Corporation, in case of his or her death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other
property of whatever kind in his or her possession or under his or her
control belonging to the Corporation.
Section 7. Assistant Secretaries. Except as may be otherwise provided
in these bylaws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Executive Vice President, if there be
one, any Vice President, if there be one, or the Secretary, and in the absence
of the Secretary or in the event of his or her disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
Section 8. Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Executive Vice
President, if there be one, any Vice President, if there be one, or the
Treasurer, and in the absence of the Treasurer or in the event of his or her
disability or refusal to act, shall perform the duties of the Treasurer, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors, an
Assistant Treasurer shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of his or her office and for the restoration
to the Corporation, in case of his or her death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession or under his or her control belonging to
the Corporation.
Section 9. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
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ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation (a) by the President, an Executive Vice President or a Vice
President and (b) by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by such holder.
Section 2. Signatures. Where a certificate is countersigned by (a) a
transfer agent other than the Corporation or its designated employees or (b) a
registrar other than the Corporation or its designated employees, any other
signature on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his or her attorney lawfully constituted in writing and upon the surrender
of the certificate therefor, which shall be cancelled before a new certificate
shall be issued.
ARTICLE VI
NOTICES
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Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these bylaws to be given to any director, member
of a committee or stockholder, such notice may be given by mail, addressed to
such director, member of a committee or stockholder, at his or her address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by facsimile transmission, telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these bylaws to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE VII
INDEMNIFICATION
Section 1. General. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director,
officer, employee, agent or fiduciary of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorneys fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding (and advance
expenses to such person in connection with such action, suit or proceeding) to
the fullest extent permitted under the laws of the state of Delaware now or
hereafter in existence, including Section 145 of the Delaware General
Corporation Law as currently in existence or as subsequently amended, modified,
supplemented or replaced (but, in case of any such amendment, modification,
supplementation or replacement, only to the extent that such amendment,
modification, supplementation or replacement broadens such persons rights to
indemnification thereunder).
Section 2. Non-Exclusivity. The rights to receive indemnification and
advancement of expenses provided in Article VII of these Bylaws shall not be
deemed exclusive of any other rights to which any person may at any time be
entitled under applicable law, the Certificate of Incorporation, these Bylaws,
any agreement, a vote of stockholders, a resolution of the Board of Directors or
otherwise. No amendment, alteration or repeal of this Article VII or any
provision
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hereof shall be effective as to any person in respect of any act, event or
circumstance that occurred or existed, in whole or in part, before such
amendment, alteration or repeal.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property or in shares of the capital stock.
Before payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, deems proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose, and the
Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year, unless otherwise fixed by resolution of the Board of
Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
Corporate Seal, Delaware. The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced.
Section 5. Amendments. These bylaws may be altered, amended or
repealed, in whole or in part, or new bylaws may be adopted by the stockholders
or by the Board of Directors of the Corporation.
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BYLAWS
OF
STEEL PARTS CORPORATION
Adopted and Effective
September 15, 1990
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES.........................................................1
Section 1. Registered Office...............................................1
Section 2. Other Offices...................................................1
ARTICLE II MEETINGS OF STOCKHOLDERS........................................1
Section 1. Place of Meetings................................................1
Section 2. Annual Meetings..................................................1
Section 3. Special Meetings.................................................1
Section 4. Quorum...........................................................2
Section 5. Voting...........................................................2
Section 6. List of Stockholders Entitled to Vote............................2
ARTICLE III DIRECTORS........................................................3
Section 1. Number and Election of Directors.................................3
Section 2. Vacancies........................................................3
Section 3. Duties and Powers................................................3
Section 4. Meetings.........................................................3
Section 5. Quorum...........................................................4
Section 6. Actions by Written Consent.......................................4
Section 7. Meetings by Conference Telephone.................................4
Section 8. Committees.......................................................4
Section 9. Compensation.....................................................5
Section 10. Interested Directors.............................................5
ARTICLE IV OFFICERS.........................................................6
Section 1. General..........................................................6
Section 2. Election.........................................................6
Section 3. President........................................................6
Section 4. Executive Vice Presidents and Vice Presidents....................7
Section 5. Secretary........................................................7
Section 6. Treasurer........................................................7
Section 7. Assistant Secretaries............................................8
Section 8. Assistant Treasurers.............................................8
Section 9. Other Officers...................................................8
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ARTICLE V STOCK............................................................9
Section 1. Form of Certificates.............................................9
Section 2. Signatures.......................................................9
Section 3. Lost Certificates................................................9
Section 4. Transfers........................................................9
ARTICLE VI NOTICES..........................................................9
Section 1. Notices..........................................................9
Section 2. Waivers of Notice...............................................10
ARTICLE VII INDEMNIFICATION.................................................10
Section 1. General.........................................................10
Section 2. Non-Exclusivity.................................................10
ARTICLE VIII GENERAL PROVISIONS..............................................11
Section 1. Dividends.......................................................11
Section 2. Disbursements...................................................11
Section 3. Fiscal Year.....................................................11
Section 4. Corporate Seal..................................................11
Section 5. Amendments......................................................11
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BYLAWS
OF
STEEL PARTS CORPORATION
(hereinafter the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be located at 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as may be designated from
time to time by the Board of Directors and stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of stockholders shall be
held on such date and at such time as may be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meeting the
stockholders shall elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting. Written
notice of the annual meeting stating the place, date and hour of the meeting
shall be given to each stockholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Corporation's Certificate of Incorporation as may be amended and restated
from time to time (the "Certificate of Incorporation"), special meetings of
stockholders, for any purpose or purposes, may be called by either (a) the
Chairman of the
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Board of Directors, if there be one or (b) the President, and shall be called by
any officer of the Corporation at the instruction of a majority of the Board of
Directors. Written notice of a special meeting stating the place, date and hour
of the meeting and the purpose or purposes for which the meeting is called shall
be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these bylaws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
voting power of the stock represented and entitled to vote thereat. Such votes
may be cast in person or by proxy but no proxy shall be voted or acted upon
after three years from its date, unless such proxy provides for a longer period.
The Board of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his or her discretion, may require
that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting
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during the whole time thereof and may be inspected by any stockholder of the
Corporation who is present. The stock ledger of the Corporation shall be the
only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by this Section 6 of this Article II or the books of
the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The business and affairs
of the Corporation shall be managed by a Board of Directors initially consisting
of one director. The number of directors of the Corporation may be increased or
decreased from time to time by resolution adopted by the Board of Directors, but
no decrease by the Board of Directors shall have the effect of shortening the
term of any incumbent director. Except as provided in Section 2 of this Article
III, directors shall be elected by a plurality of the votes cast at annual
meetings of stockholders and each director so elected shall hold office until
the next annual meeting and until his or her successor is duly elected and
qualified or until his or her earlier resignation or removal. Any director may
resign at any time upon notice to the Corporation. A director need not be a
stockholder, a citizen of the United States or a resident of the State of
Delaware.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and
qualified or until their earlier resignation or removal. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these bylaws
directed or required to be exercised or done by the stockholders.
Section 4. Meetings. Meetings shall be held at such time as the Board
of Directors shall fix, except that the first meeting of a newly elected Board
of Directors shall be held as soon after its election as the directors may
conveniently assemble. Meetings shall be held at such place within or without
the State of Delaware as may be fixed by the Board of Directors. No call shall
be required for regular meetings for which the time and place have been fixed.
Special meetings
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may be called by or at the direction of the Chairman of the Board, if any, the
President or a majority of the directors then in office. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral or any other mode of notice of the time and place shall be given
for special meetings in sufficient time for the convenient assembly of the
directors thereat. Notice need not be given to any director or to any member of
a committee of directors who submits a written waiver of notice signed by him or
her before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he or
she attends a meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the directors need be specified in
any written waiver of notice.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these bylaws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall constitute
a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors. If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 6. Actions by Written Consent. Unless otherwise provided by the
Certificate of Incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, in one document or in
counterparts, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 7. Meetings by Conference Telephone. Unless otherwise provided
by the Certificate of Incorporation or these bylaws, members of the Board of
Directors or any committee designated by the Board of Directors may participate
in a meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 7 shall constitute presence in person at such
meeting.
Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees,
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each committee to consist of one or more of the directors of the Corporation.
The Board of Directors may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of any such committee. In the absence or disqualification of a member of
a committee, and in the absence of a designation by the Board of Directors of an
alternate member to replace the absent or disqualified member, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in place of any absent or
disqualified member. Any committee, to the extent allowed by law and provided in
the resolution establishing such committee, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation. Without limitation to the foregoing, any
committee shall have the power and authority to declare a dividend, to authorize
the issuance of stock or to adopt a certificate of ownership and merger pursuant
to Section 253 of the Delaware General Corporation Law. Each committee shall
keep regular minutes and report to the Board of Directors when required.
Section 9. Compensation. Directors as such shall not receive any stated
salary for their services, but by resolution of the Board of Directors a fixed
sum and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board of Directors or any committee thereof;
provided that nothing contained herein shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his, her or their
votes are counted for such purpose if (a) the material facts as to his, her or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum, (b) the material facts as to
his, her or their relationship or interest and as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote thereon and the
contract or transaction is specifically approved in good faith by vote of the
stockholders or (c) the contract or transaction is fair as to
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the Corporation as of the time it is authorized, approved or ratified by the
Board of Directors, a committee thereof or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or a committee that authorizes the contract or
transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President and a Secretary. The Board of
Directors, in its discretion, may also choose a Treasurer and one or more
Executive Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant
Treasurers and other officers. Any number of offices may be held by the same
person, unless otherwise prohibited by law, the Certificate of Incorporation or
these bylaws. The officers of the Corporation need not be stockholders of the
Corporation or directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each annual meeting of stockholders shall elect the officers of the
Corporation, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified or until their earlier resignation or
removal. Any officer elected by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors and may be altered from time to time except as otherwise
provided by contract.
Section 3. President. The President shall, subject to the control of
the Board of Directors, have general supervision of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He or she shall be the Chief Executive
Officer of the Corporation and shall execute all bonds, mortgages, contracts and
other instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these bylaws, the Board of Directors or
the President. In the absence or disability of the Chairman of the Board of
Directors, or if there be none, the President shall preside at all meetings of
the stockholders and the Board of Directors. The President shall also perform
such other duties and may exercise
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such other powers as from time to time may be assigned to him or her by these
bylaws or by the Board of Directors.
Section 4. Executive Vice Presidents and Vice Presidents. At the
request of the President or in his or her absence or in the event of his or her
inability or refusal to act the Executive Vice President or the Executive Vice
Presidents if there be more than one, and the Vice President or the Vice
Presidents, if there be more than one (in the order designated by the Board of
Directors), shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Each Executive Vice President and each Vice President shall perform
such other duties and have such other powers as the Board of Directors from time
to time may prescribe. If there be no Executive Vice President or Vice
President, the Board of Directors shall designate the officer of the Corporation
who, in the absence of the President or in the event of the inability or refusal
of the President to act, shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President.
Section 5. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he or she shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the President may
choose another officer to cause such notice to be given. The Secretary shall
have custody of the seal of the Corporation and the Secretary or an Assistant
Secretary, if there be one, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by the signature
of the Secretary or by the signature of any such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix the seal
of the Corporation and to attest the affixing by his or her signature. The
Secretary shall see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 6. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such
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depositories as may be designated by the Board of Directors. The Treasurer shall
disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the President and the Board of Directors, at its regular meeting, or when the
Board of Directors so requires, an account of all his or her transactions as
Treasurer and of the financial condition of the Corporation. If required by the
Board of Directors, the Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his or her office and
for the restoration to the Corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his or her possession or under his
or her control belonging to the Corporation.
Section 7. Assistant Secretaries. Except as may be otherwise provided
in these bylaws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Executive Vice President, if there be
one, any Vice President, if there be one, or the Secretary, and in the absence
of the Secretary or in the event of his or her disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
Section 8. Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Executive Vice
President, if there be one, any Vice President, if there be one, or the
Treasurer, and in the absence of the Treasurer or in the event of his or her
disability or refusal to act, shall perform the duties of the Treasurer, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors, an
Assistant Treasurer shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of his or her office and for the restoration
to the Corporation, in case of his or her death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession or under his or her control belonging to
the Corporation.
Section 9. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
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ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation (a) by the President, an Executive Vice President or a Vice
President and (b) by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by such holder.
Section 2. Signatures. Where a certificate is countersigned by (a) a
transfer agent other than the Corporation or its designated employees or (b) a
registrar other than the Corporation or its designated employees, any other
signature on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his or her attorney lawfully constituted in writing and upon the surrender
of the certificate therefor, which shall be cancelled before a new certificate
shall be issued.
ARTICLE VI
NOTICES
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Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these bylaws to be given to any director, member
of a committee or stockholder, such notice may be given by mail, addressed to
such director, member of a committee or stockholder, at his or her address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by facsimile transmission, telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these bylaws to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE VII
INDEMNIFICATION
Section 1. General. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director,
officer, employee, agent or fiduciary of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding (and advance
expenses to such person in connection with such action, suit or proceeding) to
the fullest extent permitted under the laws of the state of Delaware now or
hereafter in existence, including Section 145 of the Delaware General
Corporation Law as currently in existence or as subsequently amended, modified,
supplemented or replaced (but, in case of any such amendment, modification,
supplementation or replacement, only to the extent that such amendment,
modification, supplementation or replacement broadens such person's rights to
indemnification thereunder).
Section 2. Non-Exclusivity. The rights to receive indemnification and
advancement of expenses provided in Article VII of these Bylaws shall not be
deemed exclusive of any other rights to which any person may at any time be
entitled under applicable law, the Certificate of Incorporation, these Bylaws,
any agreement, a vote of stockholders, a resolution of the Board of Directors or
otherwise. No amendment, alteration or repeal of this Article VII or any
provision
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hereof shall be effective as to any person in respect of any act, event or
circumstance that occurred or existed, in whole or in part, before such
amendment, alteration or repeal.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property or in shares of the capital stock.
Before payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, deems proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose, and the
Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year, unless otherwise fixed by resolution of the Board of
Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced.
Section 5. Amendments. These bylaws may be altered, amended or
repealed, in whole or in part, or new bylaws may be adopted by the stockholders
or by the Board of Directors of the Corporation.
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10425/001/S1/EDGAR/STWRTCON.ED
BYLAWS
OF
STEWART CONNECTOR SYSTEMS, INC.
Adopted and Effective
as of September 15, 1990
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES...........................................................1
Section 1. Registered Office.................................................1
Section 2. Other Offices.....................................................1
ARTICLE II MEETINGS OF SHAREHOLDERS..........................................1
Section 1. Place of Meetings.................................................1
Section 2. Annual Meetings...................................................1
Section 3. Special Meetings..................................................2
Section 4. Adjournments of Special Meetings..................................2
Section 5. Quorum............................................................2
Section 6. Voting............................................................3
Section 7. Consent of Shareholders in Lieu of Meeting........................3
Section 8. List of Shareholders Entitled to Vote.............................3
ARTICLE III DIRECTORS.........................................................4
Section 1. Number and Election of Directors..................................4
Section 2. Vacancies.........................................................4
Section 3. Duties and Powers.................................................4
Section 4. Meetings..........................................................5
Section 5. Quorum............................................................5
Section 6. Actions by Written Consent........................................5
Section 7. Meetings by Conference Telephone..................................5
Section 8. Committees........................................................6
Section 9. Compensation......................................................6
Section 10. Interested Directors..............................................6
ARTICLE IV OFFICERS..........................................................7
Section 1. General...........................................................7
Section 2. Election, Vacancies and Removal...................................7
Section 3. Chairman of the Board of Directors................................7
Section 4. President.........................................................8
Section 5. Executive Vice Presidents and Vice Presidents.....................8
Section 6. Secretary.........................................................8
Section 7. Treasurer.........................................................9
Section 8. Assistant Secretaries.............................................9
Section 9. Assistant Treasurers..............................................9
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Section 10. Other Officers...................................................10
ARTICLE V STOCK............................................................10
Section 1. Form of Certificates.............................................10
Section 2. Signatures and Corporate Seal....................................10
Section 3. Lost Certificates................................................11
Section 4. Transfers........................................................11
ARTICLE VI NOTICES..........................................................11
Section 1. Notices..........................................................11
Section 2. Waivers of Notice................................................11
ARTICLE VII INDEMNIFICATION..................................................12
Section 1. General..........................................................12
Section 2. Non-Exclusivity..................................................12
ARTICLE VIII GENERAL PROVISIONS...............................................12
Section 1. Dividends........................................................12
Section 2. Disbursements....................................................13
Section 3. Fiscal Year......................................................13
Section 4. Corporate Seal...................................................13
Section 5. Amendments.......................................................13
ii
<PAGE>
BYLAWS
OF
STEWART CONNECTOR SYSTEMS, INC.
(hereinafter the Corporation)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be located at 116 Mill Street, Stewartstown, Pennsylvania 17363.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the Commonwealth of Pennsylvania as the
Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Place of Meetings. Meetings of the shareholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the Commonwealth of Pennsylvania, as may be
designated from time to time by the Board of Directors and stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of shareholders shall be
held on such date and at such time as may be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meeting the
shareholders shall elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting. Written
notice of the annual meeting stating the place, date and hour of the meeting
shall be given to each shareholder entitled to vote at such meeting at least
five days prior to the date of the meeting. The President and the Board of
Directors shall present at each annual meeting of shareholders a full and
complete statement of the business and affairs of the Corporation for the
preceding year. Such statement shall be prepared
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and presented in whatever manner the Board of Directors shall deem advisable and
need not be verified by a certified public accountant.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Corporation's Articles of Incorporation, as the same may be amended and
restated from time to time (the Articles of Incorporation), special meetings of
shareholders, for any purpose or purposes, may be called by either (a) the
Chairman of the Board of Directors, if there be one, or (b) the President. At
any time, upon written request of any person or persons who have duly called a
special meeting, it shall be the duty of the Secretary to fix the date of the
meeting, to be held not more than sixty days after the receipt of the request.
Written notice of a special meeting stating the place, date and hour of the
meeting shall be given by the Secretary at least five days before the date of
the meeting to each shareholder entitled to vote at such meeting.
Section 4. Adjournments of Special Meetings. Adjournment or
adjournments of any annual or special meeting may be taken, but any meeting at
which directors are to be elected shall be adjourned only from day to day or for
such longer periods, not exceeding fifteen days each, as may be directed by
shareholders who are present in person or by proxy and who are entitled to cast
at least a majority of the votes which all such shareholders would be entitled
to cast at an election of directors until such directors have been elected.
Section 5. Quorum. A shareholders' meeting duly called shall not be
organized for the transaction of business unless a quorum is present. Unless
otherwise provided in the Articles of Incorporation,
(a) the presence, in person or by proxy, of shareholders
entitled to cast at least a majority of the votes which all
shareholders are entitled to cast on the particular matter shall
constitute a quorum for the purpose of considering such matter, and,
unless otherwise provided by law the acts, at a duly organized meeting,
of the shareholders present, in person or by proxy, entitled to cast at
least a majority of the votes which all shareholders present are
entitled to cast shall be acts of the shareholders,
(b) the shareholders present at a duly organized meeting can
continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum, and
(c) if a meeting cannot be organized because a quorum has not
attended, those present may, except as otherwise provided by law,
adjourn the meeting to such time and place as they may determine, but
in the case of any meeting called for the election of directors, those
who attend the
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second of such adjourned meetings, although less than a quorum as fixed
in this section or in the Articles of Incorporation, shall nevertheless
constitute a quorum for the purpose of electing directors.
Section 6. Voting. Unless otherwise required by law, the Articles of
Incorporation or these bylaws, any question brought before any meeting of
shareholders shall be decided by the vote of the holders of a majority of the
voting power of the shares represented and entitled to vote thereat. Every
shareholder entitled to vote at a meeting of shareholders to express consent or
dissent to corporate action in writing without a meeting may authorize another
person or persons to act for him by proxy. Every proxy shall be executed in
writing by the shareholder, or by his duly authorized attorney in fact, and
filed with the Secretary of the Corporation. A proxy, unless coupled with an
interest, shall be revocable at will, notwithstanding any other agreement or any
provision in the proxy to the contrary, but the revocation of a proxy shall not
be effective until notice thereof has been given to the Secretary of the
Corporation.
No unrevoked proxy shall be valid after eleven months from the date of its
execution, unless a longer time is expressly provided therein, but in no event
shall a proxy, unless coupled with an interest, be voted on after three years
from the date of its execution. A proxy shall not be revoked by the death or
incapacity of the maker unless before the vote is counted or the authority is
exercised, written notice of such death or incapacity is given to the Secretary
of the Corporation. A shareholder shall not sell his vote or execute a proxy to
any person for any sum of money or anything of value. A proxy coupled with an
interest shall include an unrevoked proxy in favor of a creditor of a
shareholder and such a proxy shall be valid so long as the debt owed by him to
the creditor remains unpaid.
Section 7. Consent of Shareholders in Lieu of Meeting. Unless otherwise
provided in the Articles of Incorporation, any action required or permitted to
be taken at a meeting of the shareholders may be taken without a meeting, if a
consent or counterpart consents in writing, setting forth the action so taken,
shall be signed by all of the shareholders who would be entitled to vote at a
meeting for such purpose and shall be filed with the Secretary of the
Corporation.
Section 8. List of Shareholders Entitled to Vote. The officer or agent
having charge of the transfer books for the shares of the Corporation shall
prepare and make, at least five days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, with the address of and number of shares held by each. The
list shall be kept on file at the registered office of the Corporation, and
shall be subject to inspection by any shareholder at any time during usual
business hours and shall also be produced and kept open at the time and place of
the meeting, and shall be subject
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to the inspection of any shareholder during the whole time of the meeting. The
original share ledger or transfer book, or a duplicate thereof kept in the
Commonwealth of Pennsylvania, shall be prima facie evidence as to who are the
shareholders entitled to examine such list or share ledger or transfer book, or
to vote, in person or by proxy, at any meeting of shareholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The number of directors of
the Corporation may be increased or decreased from time to time by resolution
adopted by the Board of Directors, but no decrease in the number of members of
the Board of Directors shall have the effect of shortening the term of any
incumbent director. Except as provided in Section 2 of this Article III,
directors shall be elected by a plurality of the votes cast at annual meetings
of shareholders, and each director so elected shall hold office until the next
annual meeting and until his or her successor is duly elected and qualified or
until his or her earlier resignation or removal. Notwithstanding any provision
of these bylaws to the contrary, the Board of Directors shall consist of at
least three directors, except that in cases where all the shares of the
Corporation are owned beneficially and of record by either one or two
shareholders, the number of directors may be less than three but not less than
the number of shareholders. Any director may resign at any time upon notice to
the Corporation. A director need not be a shareholder, a citizen of the United
States or a resident of the Commonwealth of Pennsylvania.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by the affirmative vote of a majority of the directors then in office, though
less than a quorum, or by a sole remaining director, and the directors so chosen
shall hold office until the next annual election and until their successors are
duly elected and qualified or until their earlier resignation or removal. If
there are no directors in office, then an election of directors may be held in
the manner provided by statute.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Articles of Incorporation or by these bylaws directed
or required to be exercised or done by the shareholders.
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Section 4. Meetings. Meetings shall be held at such time as the Board
of Directors shall fix, except that the first meeting of a newly elected Board
of Directors shall be held as soon after its election as the directors may
conveniently assemble. Meetings shall be held at such place within or without
the Commonwealth of Pennsylvania as may be fixed by the Board of Directors. No
call shall be required for regular meetings for which the time and place have
been fixed. Special meetings may be called by or at the direction of the
Chairman of the Board of Directors, if any, the President or a majority of the
directors then in office. No notice shall be required for regular meetings for
which the time and place have been fixed. Written, oral or any other mode of
notice of the time and place shall be given for special meetings in sufficient
time for the convenient assembly of the directors thereat. Notice need not be
given to any director or to any member of a committee of directors who submits a
written waiver of notice signed by him or her before or after the time stated
therein. Attendance of any such person at a meeting shall constitute a waiver of
notice of such meeting, except when he or she attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the directors need be specified in any written waiver of notice.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Articles of Incorporation or these bylaws, at all meetings of the Board
of Directors, a majority of the entire Board of Directors shall constitute a
quorum for the transaction of business, and the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors. If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 6. Actions by Written Consent. Unless otherwise provided by the
Articles of Incorporation or these bylaws, any action required or permitted to
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, in one document or in
counterparts, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 7. Meetings by Conference Telephone. Unless otherwise provided
by the Articles of Incorporation or these bylaws, members of the Board of
Directors or any committee designated by the Board of Directors may participate
in a meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means of which
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all persons participating in the meeting can hear each other, and participation
in a meeting pursuant to this Section 7 shall constitute presence in person at
such meeting.
Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of two or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. Any such committee to the extent
allowed by law and provided in the resolution establishing such committee, shall
have and exercise the authority of the Board of Directors in the management of
the business and affairs of the Corporation. In the absence or disqualification
of any member of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he, she or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any absent or disqualified member.
Each committee shall keep regular minutes and report to the Board of Directors
when required.
Section 9. Compensation. Directors as such shall not receive any stated
salary for their services, but by resolution of the Board of Directors a fixed
sum and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board of Directors or any committee thereof,
provided, that nothing contained herein shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his, her or their
votes are counted for such purpose if (a) the material facts as to his, her or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the Board
of Directors or committee authorizes, approves or ratifies the contract or
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum, (b)
the material facts as to his, her or their relationship or interest and as to
the contract or transaction are disclosed or are known to the shareholders
entitled to vote thereon, and such shareholders authorize, approve or
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ratify the contract or transaction or (c) the contract or transaction is fair as
to the Corporation. Interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee that
authorizes the contract or transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a Treasurer.
The Board of Directors, in its discretion, may also choose a Chairman of the
Board of Directors (who must be a director), one or more Executive Vice
Presidents, Vice Presidents, Assistant Secretaries, Assistant Treasurers and
other officers. Any number of offices may be held by the same person, unless
otherwise prohibited by law, the Articles of Incorporation or these bylaws. The
officers of the Corporation need not be shareholders of the Corporation or,
except in the case of the Chairman of the Board of Directors, directors of the
Corporation.
Section 2. Election, Vacancies and Removal. The Board of Directors at
its first meeting held after each annual meeting of shareholders shall elect the
officers of the Corporation, who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified or until their
earlier resignation or removal. Any officer elected by the Board of Directors
may be removed at any time by the affirmative vote of a majority of the Board of
Directors. Any vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors and may be altered by the
Board of Directors from time to time except as otherwise provided by contract.
Section 3. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if there be one, shall preside at all meetings of the
shareholders and of the Board of Directors. Except where by law the signature of
the President is required, the Chairman of the Board of Directors shall possess
the same power as the President to sign all contracts, certificates and other
instruments of the Corporation that may be authorized by the Board of Directors.
During the absence or disability of the President, the Chairman of the Board of
Directors shall exercise all the powers and discharge all the duties of the
President. The Chairman of the Board of Directors shall also perform such other
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duties and may exercise such other powers as from time to time may be assigned
to him or her by these bylaws or by the Board of Directors.
Section 4. President. The President shall, subject to the control of
the Board of Directors and, if there be one, the Chairman of the Board of
Directors, have general supervision of the business of the Corporation and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. He or she shall be the Chief Executive Officer of the Corporation and
shall execute all bonds, mortgages, contracts and other instruments of the
Corporation requiring a seal, under the seal of the Corporation, except where
required or permitted by law to be otherwise signed and executed and except that
the other officers of the Corporation may sign and execute documents when so
authorized by these bylaws, the Board of Directors or the President. In the
absence or disability of the Chairman of the Board of Directors, or if there be
none, the President shall preside at all meetings of the shareholders and (if
the President is a director) the Board of Directors. The President shall also
perform such other duties and may exercise such other powers as from time to
time may be assigned to him or her by these bylaws or by the Board of Directors.
Section 5. Executive Vice Presidents and Vice Presidents. At the
request of the President or in his or her absence or in the event of his or her
inability or refusal to act (and if there be no Chairman of the Board of
Directors), the Executive Vice President or the Executive Vice Presidents, if
there be more than one, and the Vice President or the Vice Presidents, if there
be more than one (in the order designated by the Board of Directors), shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. Each
Executive Vice President and each Vice President shall perform such other duties
and have such other powers as the Board of Directors from time to time may
prescribe. If there be no Chairman of the Board of Directors and no Vice
President, the Board of Directors shall designate the officer of the Corporation
who, in the absence of the President or in the event of the inability or refusal
of the President to act, shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President.
Section 6. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of shareholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the shareholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he or she shall be. If the Secretary shall be
unable or shall refuse to
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cause to be given notice of all meetings of the shareholders and special
meetings of the Board of Directors, and if there be no Assistant Secretary, then
either the Board of Directors or the President may choose another officer to
cause such notice to be given. The Secretary shall have custody of the seal of
the Corporation, if there be one, and the Secretary or an Assistant Secretary,
if there be one, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by the signature of the
Secretary or by the signature of any such Assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
the Corporation and to attest the affixing by his or her signature. The
Secretary shall see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 7. Treasurer. The Treasurer shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the Corporation in
such depositories as may be designated by the Board of Directors. The Treasurer
shall disburse the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall render to
the President and the Board of Directors, at its regular meeting, or when the
Board of Directors so requires, an account of all his or her transactions as
Treasurer and of the financial condition of the Corporation. If required by the
Board of Directors, the Treasurer shall give the Corporation a bond in such sum
and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his or her office and
for the restoration to the Corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his or her possession or under his
or her control belonging to the Corporation.
Section 8. Assistant Secretaries. Except as may be otherwise provided
in these bylaws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Executive Vice President, if there be
one, any Vice President, if there be one, or the Secretary, and in the absence
of the Secretary or in the event of his or her disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
Section 9. Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Executive Vice
President, if there be one, any Vice President, if there be one, or the
Treasurer,
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and in the absence of the Treasurer or in the event of his or her disability or
refusal to act, shall perform the duties of the Treasurer, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
Treasurer. If required by the Board of Directors, an Assistant Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his or her office and for the restoration to the Corporation, in
case of his or her death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his or her
possession or under his or her control belonging to the Corporation.
Section 10. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every shareholder of record shall be
entitled to have a share certificate signed in the name of the Corporation (a)
by the President, an Executive Vice President or a Vice President and (b) by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation, certifying the number of shares owned by such shareholder,
but a share certificate shall not be issued to any shareholder until the shares
represented thereby have been fully paid for. Share certificates shall state:
(a) that the Corporation is organized under the laws of Pennsylvania, (b) the
name of the registered holder of the shares represented thereby, (c) the number
and class of shares and the designation of the series, if any, which the
certificate represents and (d) the par value of each share represented, or a
statement that the shares are without par value.
Section 2. Signatures and Corporate Seal. Every share certificate shall
be sealed with the corporate seal, which may be a facsimile, engraved or
printed. Where such certificate is signed by a transfer agent or a registrar,
the signature of any corporate officer upon such certificate may be a facsimile,
engraved or printed. In case any officer who has signed or whose facsimile
signature has been placed upon any share certificate shall have ceased to such
officer because of death, resignation, or otherwise, before the certificate is
issued, it may be issued
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by the Corporation with the same effect as if the officer had not ceased to be
such at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his or her attorney lawfully constituted in writing and upon the surrender
of the certificate therefor, which shall be cancelled before a new certificate
shall be issued.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Articles of Incorporation or these bylaws to be given to any director, member of
a committee or shareholder, such notice may be given by mail, addressed to such
director, member of a committee or shareholder, at his or her address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by facsimile transmission, telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Articles of Incorporation or these bylaws to be given to any director,
member of a committee or shareholder, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
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ARTICLE VII
INDEMNIFICATION
Section 1. General. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director,
officer, employee, agent or fiduciary of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding (and advance
expenses to such person in connection with such action, suit or proceeding) to
the fullest extent permitted under the laws of the Commonwealth of Pennsylvania
now or hereafter in existence, including Section 410A of the Pennsylvania
Business Corporation Law as currently in existence or as subsequently amended,
modified, supplemented or replaced (but, in case of any such amendment,
modification, supplementation or replacement, only to the extent that such
amendment, modification, supplementation or replacement broadens such person's
rights to indemnification thereunder).
Section 2. Non-Exclusivity. The rights to receive indemnification and
advancement of expenses provided in Article VII of these Bylaws shall not be
deemed exclusive of any other rights to which any person may at any time be
entitled under applicable law, the Articles of Incorporation, these Bylaws, any
agreement, a vote of stockholders, a resolution of the Board of Directors or
otherwise. No amendment, alteration or repeal of this Article VII or any
provision hereof shall be effective as to any person in respect of any act,
event or circumstance that occurred or existed, in whole or in part, before such
amendment, alteration or repeal.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors may declare and pay
dividends in cash or property other than shares of the Corporation's stock, upon
the outstanding shares of the Corporation, subject to terms and conditions
provided by statute and the Articles of Incorporation. Before payment of any
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dividend, there may be set aside out of net profits of the Corporation such sum
or sums as the Board of Directors from time to time, in its absolute discretion,
deems proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for any proper purpose, and the Board of Directors may modify or abolish any
such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each calendar year unless otherwise fixed by resolution of the
Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its incorporation and the words
Corporate Seal, Pennsylvania. The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced.
Section 5. Amendments. These bylaws may be altered, amended or
repealed, in whole or in part, or new bylaws may be adopted by the shareholders
or by the Board of Directors of the Corporation; provided, however, that notice
of such alteration, amendment, repeal or adoption of new bylaws be contained in
the notice of such meeting of shareholders or Board of Directors, as the case
may be. All such amendments must be approved by either the holders of a majority
of the voting power of outstanding capital stock entitled to vote thereon or by
a majority of the Board of Directors then in office.
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BYLAWS
OF
STEWART STAMPING CORPORATION
Adopted and Effective
September 15, 1990
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES...........................................................1
Section 1. Registered Office.................................................1
Section 2. Other Offices.....................................................1
ARTICLE II MEETINGS OF SHAREHOLDERS..........................................1
Section 1. Place of Meetings.................................................1
Section 2. Annual Meetings...................................................1
Section 3. Special Meetings..................................................2
Section 4. Quorum............................................................2
Section 5. Voting............................................................2
Section 6. List of Stockholders Entitled to Vote.............................2
ARTICLE III DIRECTORS.........................................................3
Section 1. Number and Election of Directors..................................3
Section 2. Vacancies.........................................................3
Section 3. Duties and Powers.................................................3
Section 4. Meetings..........................................................4
Section 5. Quorum............................................................4
Section 6. Actions by Written Consent........................................4
Section 7. Meetings by Conference Telephone..................................4
Section 8. Committees........................................................5
Section 9. Compensation......................................................5
Section 10. Interested Directors..............................................5
ARTICLE IV OFFICERS..........................................................6
Section 1. General...........................................................6
Section 2. Election..........................................................6
Section 3. President.........................................................6
Section 4. Executive Vice Presidents and Vice Presidents.....................7
Section 5. Secretary.........................................................7
Section 6. Treasurer.........................................................8
Section 7. Assistant Secretaries.............................................8
Section 8. Assistant Treasurers..............................................8
Section 9. Other Officers....................................................9
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ARTICLE V STOCK.............................................................9
Section 1. Form of Certificates..............................................9
Section 2. Signatures........................................................9
Section 3. Lost Certificates.................................................9
Section 4. Transfers........................................................10
ARTICLE VI NOTICES..........................................................10
Section 1. Notices..........................................................10
Section 2. Waivers of Notice................................................10
ARTICLE VII INDEMNIFICATION..................................................10
Section 1. General..........................................................10
Section 2. Non-Exclusivity..................................................11
ARTICLE VIII GENERAL PROVISIONS...............................................11
Section 1. Dividends........................................................11
Section 2. Disbursements....................................................11
Section 3. Fiscal Year......................................................11
Section 4. Corporate Seal...................................................12
Section 5. Amendments.......................................................12
ii
<PAGE>
BYLAWS
OF
STEWART STAMPING CORPORATION
(hereinafter the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be located at 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as may be designated from
time to time by the Board of Directors and stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of stockholders shall be
held on such date and at such time as may be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meeting the
stockholders shall elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting. Written
notice of the annual meeting stating the place, date and hour of the meeting
shall be given to each stockholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
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Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Corporation's Certificate of Incorporation as may be amended and restated
from time to time (the "Certificate of Incorporation"), special meetings of
stockholders, for any purpose or purposes, may be called by either (a) the
Chairman of the Board of Directors, if there be one or (b) the President, and
shall be called by any officer of the Corporation at the instruction of a
majority of the Board of Directors. Written notice of a special meeting stating
the place, date and hour of the meeting and the purpose or purposes for which
the meeting is called shall be given not less than ten nor more than sixty days
before the date of the meeting to each stockholder entitled to vote at such
meeting.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these bylaws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
voting power of the stock represented and entitled to vote thereat. Such votes
may be cast in person or by proxy but no proxy shall be voted or acted upon
after three years from its date, unless such proxy provides for a longer period.
The Board of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his or her discretion, may require
that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business
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hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof and may be inspected by any
stockholder of the Corporation who is present. The stock ledger of the
Corporation shall be the only evidence as to who are the stockholders entitled
to examine the stock ledger, the list required by this Section 6 of this Article
II or the books of the Corporation, or to vote in person or by proxy at any
meeting of stockholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The business and affairs
of the Corporation shall be managed by a Board of Directors initially consisting
of one director. The number of directors of the Corporation may be increased or
decreased from time to time by resolution adopted by the Board of Directors, but
no decrease by the Board of Directors shall have the effect of shortening the
term of any incumbent director. Except as provided in Section 2 of this Article
III, directors shall be elected by a plurality of the votes cast at annual
meetings of stockholders and each director so elected shall hold office until
the next annual meeting and until his or her successor is duly elected and
qualified or until his or her earlier resignation or removal. Any director may
resign at any time upon notice to the Corporation. A director need not be a
stockholder, a citizen of the United States or a resident of the State of
Delaware.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and
qualified or until their earlier resignation or removal. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these bylaws
directed or required to be exercised or done by the stockholders.
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Section 4. Meetings. Meetings shall be held at such time as the Board
of Directors shall fix, except that the first meeting of a newly elected Board
of Directors shall be held as soon after its election as the directors may
conveniently assemble. Meetings shall be held at such place within or without
the State of Delaware as may be fixed by the Board of Directors. No call shall
be required for regular meetings for which the time and place have been fixed.
Special meetings may be called by or at the direction of the Chairman of the
Board, if any, the President or a majority of the directors then in office. No
notice shall be required for regular meetings for which the time and place have
been fixed. Written, oral or any other mode of notice of the time and place
shall be given for special meetings in sufficient time for the convenient
assembly of the directors thereat. Notice need not be given to any director or
to any member of a committee of directors who submits a written waiver of notice
signed by him or her before or after the time stated therein. Attendance of any
such person at a meeting shall constitute a waiver of notice of such meeting,
except when he or she attends a meeting for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
directors need be specified in any written waiver of notice.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these bylaws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall constitute
a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors. If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 6. Actions by Written Consent. Unless otherwise provided by the
Certificate of Incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, in one document or in
counterparts, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 7. Meetings by Conference Telephone. Unless otherwise provided
by the Certificate of Incorporation or these bylaws, members of the Board of
Directors or any committee designated by the Board of Directors may participate
in a meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means of which
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all persons participating in the meeting can bear each other, and participation
in a meeting pursuant to this Section 7 shall constitute presence in person at
such meeting.
Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or disqualification
of a member of a committee, and in the absence of a designation by the Board of
Directors of an alternate member to replace the absent or disqualified member,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in place of any
absent or disqualified member. Any committee, to the extent allowed by law and
provided in the resolution establishing such committee, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation. Without limitation to
the foregoing, any committee shall have the power and authority to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the Delaware General Corporation
Law. Each committee shall keep regular minutes and report to the Board of
Directors when required.
Section 9. Compensation. Directors as such shall not receive any stated
salary for their services, but by resolution of the Board of Directors a fixed
sum and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board of Directors or any committee thereof;
provided that nothing contained herein shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his, her or their
votes are counted for such purpose if (a) the material facts as to his, her or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or committee, and the Board of
Directors or committee in good faith
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authorizes the contract or transaction by the affirmative vote of a majority of
the disinterested directors, even though the disinterested directors be less
than a quorum, (b) the material facts as to his, her or their relationship or
interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon and the contract or transaction is
specifically approved in good faith by vote of the stockholders or (c) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified by the Board of Directors, a committee thereof
or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or a
committee that authorizes the contract or transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President and a Secretary. The Board of
Directors, in its discretion, may also choose a Treasurer and one or more
Executive Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant
Treasurers and other officers. Any number of offices may be held by the same
person, unless otherwise prohibited by law, the Certificate of Incorporation or
these bylaws. The officers of the Corporation need not be stockholders of the
Corporation or directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each annual meeting of stockholders shall elect the officers of the
Corporation, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified or until their earlier resignation or
removal. Any officer elected by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors and may be altered from time to time except as otherwise
provided by contract.
Section 3. President. The President shall, subject to the control of
the Board of Directors, have general supervision of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He or she shall be the Chief Executive
Officer of the Corporation and shall execute all bonds, mortgages, contracts and
other instruments of the
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Corporation requiring a seal, under the seal of the Corporation, except where
required or permitted by law to be otherwise signed and executed and except that
the other officers of the Corporation may sign and execute documents when so
authorized by these bylaws, the Board of Directors or the President. In the
absence or disability of the Chairman of the Board of Directors, or if there be
none, the President shall preside at all meetings of the stockholders and the
Board of Directors. The President shall also perform such other duties and may
exercise such other powers as from time to time may be assigned to him or her by
these bylaws or by the Board of Directors.
Section 4. Executive Vice Presidents and Vice Presidents. At the
request of the President or in his or her absence or in the event of his or her
inability or refusal to act the Executive Vice President or the Executive Vice
Presidents if there be more than one, and the Vice President or the Vice
Presidents, if there be more than one (in the order designated by the Board of
Directors), shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Each Executive Vice President and each Vice President shall perform
such other duties and have such other powers as the Board of Directors from time
to time may prescribe. If there be no Executive Vice President or Vice
President, the Board of Directors shall designate the officer of the Corporation
who, in the absence of the President or in the event of the inability or refusal
of the President to act, shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President.
Section 5. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he or she shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the President may
choose another officer to cause such notice to be given. The Secretary shall
have custody of the seal of the Corporation and the Secretary or an Assistant
Secretary, if there be one, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by the signature
of the Secretary or by the signature of any such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix the seal
of the Corporation and to attest the affixing by his or her signature. The
Secretary shall see that all books, reports, statements, certificates
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and other documents and records required by law to be kept or filed are properly
kept or filed, as the case may be.
Section 6. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meeting, or when the Board of Directors so requires, an account of
all his or her transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his or her office and for the restoration to the Corporation, in case
of his or her death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his or her
possession or under his or her control belonging to the Corporation.
Section 7. Assistant Secretaries. Except as may be otherwise provided
in these bylaws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Executive Vice President, if there be
one, any Vice President, if there be one, or the Secretary, and in the absence
of the Secretary or in the event of his or her disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
Section 8. Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Executive Vice
President, if there be one, any Vice President, if there be one, or the
Treasurer, and in the absence of the Treasurer or in the event of his or her
disability or refusal to act, shall perform the duties of the Treasurer, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors, an
Assistant Treasurer shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of his or her office and for the restoration
to the Corporation, in case of his or her death, resignation, retirement or
removal from office, of all books, papers,
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vouchers, money and other property of whatever kind in his or her possession or
under his or her control belonging to the Corporation.
Section 9. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation (a) by the President, an Executive Vice President or a Vice
President and (b) by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by such holder.
Section 2. Signatures. Where a certificate is countersigned by (a) a
transfer agent other than the Corporation or its designated employees or (b) a
registrar other than the Corporation or its designated employees, any other
signature on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
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Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his or her attorney lawfully constituted in writing and upon the surrender
of the certificate therefor, which shall be cancelled before a new certificate
shall be issued.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these bylaws to be given to any director, member
of a committee or stockholder, such notice may be given by mail, addressed to
such director, member of a committee or stockholder, at his or her address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by facsimile transmission, telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these bylaws to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent to notice.
ARTICLE VII
INDEMNIFICATION
Section 1. General. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director,
officer, employee, agent or fiduciary of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in
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connection with such action, suit or proceeding (and advance expenses to such
person in connection with such action, suit or proceeding) to the fullest extent
permitted under the laws of the state of Delaware now or hereafter in existence,
including Section 145 of the Delaware General Corporation Law as currently in
existence or as subsequently amended, modified, supplemented or replaced (but,
in case of any such amendment, modification, supplementation or replacement,
only to the extent that such amendment, modification, supplementation or
replacement broadens such person's rights to indemnification thereunder).
Section 2. Non-Exclusivity. The rights to receive indemnification and
advancement of expenses provided in Article VII of these Bylaws shall not be
deemed exclusive of any other rights to which any person may at any time be
entitled under applicable law, the Certificate of Incorporation, these Bylaws,
any agreement, a vote of stockholders, a resolution of the Board of Directors or
otherwise. No amendment, alteration or repeal of this Article VII or any
provision hereof shall be effective as to any person in respect of any act,
event or circumstance that occurred or existed, in whole or in part, before such
amendment, alteration or repeal.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property or in shares of the capital stock.
Before payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, deems proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose, and the
Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year, unless otherwise fixed by resolution of the Board of
Directors.
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Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced.
Section 5. Amendments. These bylaws may be altered, amended or
repealed, in whole or in part, or new bylaws may be adopted by the stockholders
or by the Board of Directors of the Corporation.
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BYLAWS
OF
TAYLOR PUBLISHING COMPANY
Adopted and Effective
September 15, 1990
<PAGE>
TABLE OF CONTENTS
ARTICLE I OFFICES...........................................................1
Section 1. Registered Office.................................................1
Section 2. Other Offices.....................................................1
ARTICLE II MEETINGS OF STOCKHOLDERS..........................................1
Section 1. Place of Meetings.................................................1
Section 2. Annual Meetings...................................................1
Section 3. Special Meetings..................................................1
Section 4. Quorum............................................................2
Section 5. Voting............................................................2
Section 6. List of Stockholders Entitled to Vote.............................2
ARTICLE III DIRECTORS.........................................................3
Section 1. Number and Election of Directors..................................3
Section 2. Vacancies.........................................................3
Section 3. Duties and Powers.................................................3
Section 4. Meetings..........................................................3
Section 5. Quorum............................................................4
Section 6. Actions by Written Consent........................................4
Section 7. Meetings by Conference Telephone..................................4
Section 8. Committees........................................................4
Section 9. Compensation......................................................4
Section 10. Interested Directors..............................................5
ARTICLE IV OFFICERS..........................................................5
Section 1. General...........................................................5
Section 2. Election..........................................................5
Section 3. President.........................................................6
Section 4. Executive Vice Presidents and Vice Presidents.....................6
Section 5. Secretary.........................................................6
Section 6. Treasurer.........................................................7
Section 7. Assistant Secretaries.............................................7
Section 8. Assistant Treasurers..............................................7
Section 9. Other Officers....................................................7
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ARTICLE V STOCK.............................................................8
Section 1. Form of Certificates..............................................8
Section 2. Signatures........................................................8
Section 3. Lost Certificates.................................................8
Section 4. Transfers.........................................................8
ARTICLE VI NOTICES...........................................................8
Section 1. Notices...........................................................8
Section 2. Waivers of Notice.................................................9
ARTICLE VII INDEMNIFICATION...................................................9
Section 1. General...........................................................9
Section 2. Non-Exclusivity...................................................9
ARTICLE VIII GENERAL PROVISIONS................................................9
Section 1. Dividends.........................................................9
Section 2. Disbursements....................................................10
Section 3. Fiscal Year......................................................10
Section 4. Corporate Seal...................................................10
Section 5. Amendments.......................................................10
ii
<PAGE>
BYLAWS
OF
TAYLOR PUBLISHING COMPANY
(hereinafter the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be located at 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as may be designated from
time to time by the Board of Directors and stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of stockholders shall be
held on such date and at such time as may be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meeting the
stockholders shall elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting. Written
notice of the annual meeting stating the place, date and hour of the meeting
shall be given to each stockholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Corporation's Certificate of Incorporation as may be amended and restated
from time to time (the "Certificate of Incorporation"), special meetings of
stockholders, for any purpose or purposes, may be called by either (a) the
Chairman of the Board of Directors, if there be one or (b) the President, and
shall be called by any
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officer of the Corporation at the instruction of a majority of the Board of
Directors. Written notice of a special meeting stating the place, date and hour
of the meeting and the purpose or purposes for which the meeting is called shall
be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these bylaws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
voting power of the stock represented and entitled to vote thereat. Such votes
may be cast in person or by proxy but no proxy shall be voted or acted upon
after three years from its date, unless such proxy provides for a longer period.
The Board of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his or her discretion, may require
that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder of the
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Corporation who is present. The stock ledger of the Corporation shall be the
only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by this Section 6 of this Article II or the books of
the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The business and affairs
of the Corporation shall be managed by a Board of Directors initially consisting
of one director. The number of directors of the Corporation may be increased or
decreased from time to time by resolution adopted by the Board of Directors, but
no decrease by the Board of Directors shall have the effect of shortening the
term of any incumbent director. Except as provided in Section 2 of this Article
III, directors shall be elected by a plurality of the votes cast at annual
meetings of stockholders and each director so elected shall hold office until
the next annual meeting and until his or her successor is duly elected and
qualified or until his or her earlier resignation or removal. Any director may
resign at any time upon notice to the Corporation. A director need not be a
stockholder, a citizen of the United States or a resident of the State of
Delaware.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and
qualified or until their earlier resignation or removal. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these bylaws
directed or required to be exercised or done by the stockholders.
Section 4. Meetings. Meetings shall be held at such time as the Board
of Directors shall fix, except that the first meeting of a newly elected Board
of Directors shall be held as soon after its election as the directors may
conveniently assemble. Meetings shall be held at such place within or without
the State of Delaware as may be fixed by the Board of Directors. No call shall
be required for regular meetings for which the time and place have been fixed.
Special meetings may be called by or at the direction of the Chairman of the
Board, if any, the
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President or a majority of the directors then in office. No notice shall be
required for regular meetings for which the time and place have been fixed.
Written, oral or any other mode of notice of the time and place shall be given
for special meetings in sufficient time for the convenient assembly of the
directors thereat. Notice need not be given to any director or to any member of
a committee of directors who submits a written waiver of notice signed by him or
her before or after the time stated therein. Attendance of any such person at a
meeting shall constitute a waiver of notice of such meeting, except when he or
she attends a meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the directors need be specified in
any written waiver of notice.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these bylaws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall constitute
a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors. If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 6. Actions by Written Consent. Unless otherwise provided by the
Certificate of Incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, in one document or in
counterparts, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 7. Meetings by Conference Telephone. Unless otherwise provided
by the Certificate of Incorporation or these bylaws, members of the Board of
Directors or any committee designated by the Board of Directors may participate
in a meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 7 shall constitute presence in person at such
meeting.
Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The
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Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of any such committee. In the absence or disqualification of a member of a
committee, and in the absence of a designation by the Board of Directors of an
alternate member to replace the absent or disqualified member, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in place of any absent or
disqualified member. Any committee, to the extent allowed by law and provided in
the resolution establishing such committee, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation. Without limitation to the foregoing, any
committee shall have the power and authority to declare a dividend, to authorize
the issuance of stock or to adopt a certificate of ownership and merger pursuant
to Section 253 of the Delaware General Corporation Law. Each committee shall
keep regular minutes and report to the Board of Directors when required.
Section 9. Compensation. Directors as such shall not receive any stated
salary for their services, but by resolution of the Board of Directors a fixed
sum and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board of Directors or any committee thereof;
provided that nothing contained herein shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his, her or their
votes are counted for such purpose if (a) the material facts as to his, her or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum, (b) the material facts as to
his, her or their relationship or interest and as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote thereon and the
contract or transaction is specifically approved in good faith by vote of the
stockholders or (c) the contract or transaction is fair as to the Corporation as
of the time it is authorized, approved or ratified by the Board
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of Directors, a committee thereof or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or a committee that authorizes the contract or
transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President and a Secretary. The Board of
Directors, in its discretion, may also choose a Treasurer and one or more
Executive Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant
Treasurers and other officers. Any number of offices may be held by the same
person, unless otherwise prohibited by law, the Certificate of Incorporation or
these bylaws. The officers of the Corporation need not be stockholders of the
Corporation or directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each annual meeting of stockholders shall elect the officers of the
Corporation, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified or until their earlier resignation or
removal. Any officer elected by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors and may be altered from time to time except as otherwise
provided by contract.
Section 3. President. The President shall, subject to the control of
the Board of Directors, have general supervision of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He or she shall be the Chief Executive
Officer of the Corporation and shall execute all bonds, mortgages, contracts and
other instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these bylaws, the Board of Directors or
the President. In the absence or disability of the Chairman of the Board of
Directors, or if there be none, the President shall preside at all meetings of
the stockholders and the Board of Directors. The President shall also perform
such other duties and may exercise such other powers as from time to time may be
assigned to him or her by these bylaws or by the Board of Directors.
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Section 4. Executive Vice Presidents and Vice Presidents. At the
request of the President or in his or her absence or in the event of his or her
inability or refusal to act the Executive Vice President or the Executive Vice
Presidents if there be more than one, and the Vice President or the Vice
Presidents, if there be more than one (in the order designated by the Board of
Directors), shall perform the duties of the President, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
President. Each Executive Vice President and each Vice President shall perform
such other duties and have such other powers as the Board of Directors from time
to time may prescribe. If there be no Executive Vice President or Vice
President, the Board of Directors shall designate the officer of the Corporation
who, in the absence of the President or in the event of the inability or refusal
of the President to act, shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the restrictions upon
the President.
Section 5. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he or she shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the President may
choose another officer to cause such notice to be given. The Secretary shall
have custody of the seal of the Corporation and the Secretary or an Assistant
Secretary, if there be one, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by the signature
of the Secretary or by the signature of any such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix the seal
of the Corporation and to attest the affixing by his or her signature. The
Secretary shall see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 6. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the
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President and the Board of Directors, at its regular meeting, or when the Board
of Directors so requires, an account of all his or her transactions as Treasurer
and of the financial condition of the Corporation. If required by the Board of
Directors, the Treasurer shall give the Corporation a bond in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his or her office and for the
restoration to the Corporation, in case of his or her death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his or her possession or under his or her
control belonging to the Corporation.
Section 7. Assistant Secretaries. Except as may be otherwise provided
in these bylaws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Executive Vice President, if there be
one, any Vice President, if there be one, or the Secretary, and in the absence
of the Secretary or in the event of his or her disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
Section 8. Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Executive Vice
President, if there be one, any Vice President, if there be one, or the
Treasurer, and in the absence of the Treasurer or in the event of his or her
disability or refusal to act, shall perform the duties of the Treasurer, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors, an
Assistant Treasurer shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of his or her office and for the restoration
to the Corporation, in case of his or her death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession or under his or her control belonging to
the Corporation.
Section 9. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
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Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation (a) by the President, an Executive Vice President or a Vice
President and (b) by the Treasurer or an Assistant Treasurer, or the Secretary
or an Assistant Secretary of the Corporation, certifying the number of shares
owned by such holder.
Section 2. Signatures. Where a certificate is countersigned by (a) a
transfer agent other than the Corporation or its designated employees or (b) a
registrar other than the Corporation or its designated employees, any other
signature on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his or her attorney lawfully constituted in writing and upon the surrender
of the certificate therefor, which shall be cancelled before a new certificate
shall be issued.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these bylaws to be given to any director, member
of a committee or stockholder, such notice may be given by mail, addressed to
such director, member of a committee or stockholder, at his or her address as it
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appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by facsimile transmission, telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these bylaws to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE VII
INDEMNIFICATION
Section 1. General. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director,
officer, employee, agent or fiduciary of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding (and advance
expenses to such person in connection with such action, suit or proceeding) to
the fullest extent permitted under the laws of the state of Delaware now or
hereafter in existence, including Section 145 of the Delaware General
Corporation Law as currently in existence or as subsequently amended, modified,
supplemented or replaced (but, in case of any such amendment, modification,
supplementation or replacement, only to the extent that such amendment,
modification, supplementation or replacement broadens such person's rights to
indemnification thereunder).
Section 2. Non-Exclusivity. The rights to receive indemnification and
advancement of expenses provided in Article VII of these Bylaws shall not be
deemed exclusive of any other rights to which any person may at any time be
entitled under applicable law, the Certificate of Incorporation, these Bylaws,
any agreement, a vote of stockholders, a resolution of the Board of Directors or
otherwise. No amendment, alteration or repeal of this Article VII or any
provision hereof shall be effective as to any person in respect of any act,
event or circumstance that occurred or existed, in whole or in part, before such
amendment, alteration or repeal.
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ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property or in shares of the capital stock.
Before payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, deems proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose, and the
Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year, unless otherwise fixed by resolution of the Board of
Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced.
Section 5. Amendments. These bylaws may be altered, amended or
repealed, in whole or in part, or new bylaws may be adopted by the stockholders
or by the Board of Directors of the Corporation.
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BYLAWS
OF
THERMAL COMPONENTS, INC.
Adopted and Effective
September 15, 1990
<PAGE>
ARTICLE I
Offices
Section 1. Registered Office..................................................4
Section 2. Other Offices......................................................4
ARTICLE II
Meetings of Stockholders
Section 1. Place of Meetings..................................................4
Section 2. Annual Meetings....................................................4
Section 3. Special Meetings...................................................4
Section 4. Quorum.............................................................5
Section 5. Voting.............................................................5
Section 6. List of Stockholders Entitled to Vote..............................5
ARTICLE III
Directors
Section 1. Number and Election of Directors...................................6
Section 2. Vacancies..........................................................6
Section 3. Duties and Powers..................................................6
Section 4. Meetings...........................................................6
Section 5. Quorum.............................................................7
Section 6. Actions by Written Consent.........................................7
Section 7. Meetings by Conference Telephone...................................7
Section 8. Committees.........................................................7
Section 9. Compensation.......................................................8
Section 10. Interested Directors...............................................8
ARTICLE IV
Officers
Section 1. General............................................................9
Section 2. Election...........................................................9
Section 3. President..........................................................9
Section 4. Executive Vice Presidents and Vice Presidents......................9
Section 5. Secretary.........................................................10
Section 6. Treasurer.........................................................10
Section 7. Assistant Secretaries.............................................11
Section 8. Assistant Treasurers..............................................11
Section 9. Other Officers....................................................11
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ARTICLE V
Stock
Section 1. Form of Certificates..............................................11
Section 2. Signatures........................................................12
Section 3. Lost Certificates.................................................12
Section 4. Transfers.........................................................12
ARTICLE VI
Notices
Section 1. Notices...........................................................12
Section 2. Waivers of Notice.................................................13
ARTICLE VII
Indemnification
Section 1. General...........................................................13
Section 2. Non-Exclusivity...................................................13
ARTICLE VIII
General Provisions
Section 1. Dividends.........................................................13
Section 2. Disbursements.....................................................14
Section 3. Fiscal Year.......................................................14
Section 4. Corporate Seal....................................................14
Section 5. Amendments........................................................14
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BYLAWS
OF
THERMAL COMPONENTS, INC.
(hereinafter the Corporation)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be located at 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware, as may be designated from
time to time by the Board of Directors and stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meeting of stockholders shall be
held on such date and at such time as may be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meeting the
stockholders shall elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting. Written
notice of the annual meeting stating the place, date and hour of the meeting
shall be given to each stockholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law or by
the Corporations Certificate of Incorporation as may be amended and restated
from time to time (the Certificate of Incorporation), special meetings of
stockholders, for any purpose or purposes, may be called by either (a) the
Chairman of the Board of Directors, if there be one or (b) the President, and
shall be called by any officer of the Corporation at the instruction of a
majority of the Board of Directors. Written notice of a special meeting stating
the place, date and hour of the meeting and the purpose or purposes for which
the meeting is called
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shall be given not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the capital stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall not
be present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted that might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder entitled to vote at
the meeting.
Section 5. Voting. Unless otherwise required by law, the Certificate of
Incorporation or these bylaws, any question brought before any meeting of
stockholders shall be decided by the vote of the holders of a majority of the
voting power of the stock represented and entitled to vote thereat. Such votes
may be cast in person or by proxy but no proxy shall be voted or acted upon
after three years from its date, unless such proxy provides for a longer period.
The Board of Directors, in its discretion, or the officer of the Corporation
presiding at a meeting of stockholders, in his or her discretion, may require
that any votes cast at such meeting shall be cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder of the Corporation who is
present. The stock ledger of the Corporation shall be the only evidence as to
who are the stockholders entitled to examine the stock ledger, the
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list required by this Section 6 of this Article 2 or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The business and affairs
of the Corporation shall be managed by a Board of Directors initially consisting
of one director. The number of directors of the Corporation may be increased or
decreased from time to time by resolution adopted by the Board of Directors, but
no decrease by the Board of Directors shall have the effect of shortening the
term of any incumbent director. Except as provided in Section 2 of this Article
3, directors shall be elected by a plurality of the votes cast at annual
meetings of stockholders and each director so elected shall hold office until
the next annual meeting and until his or her successor is duly elected and
qualified or until his or her earlier resignation or removal. Any director may
resign at any time upon notice to the Corporation. A director need not be a
stockholder, a citizen of the United States or a resident of the State of
Delaware.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and
qualified or until their earlier resignation or removal. If there are no
directors in office, then an election of directors may be held in the manner
provided by statute.
Section 3. Duties and Powers. The business of the Corporation shall be
managed by or under the direction of the Board of Directors, which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these bylaws
directed or required to be exercised or done by the stockholders.
Section 4. Meetings. Meetings shall be held at such time as the Board
of Directors shall fix, except that the first meeting of a newly elected Board
of Directors shall be held as soon after its election as the directors may
conveniently assemble. Meetings shall be held at such place within or without
the State of Delaware as may be fixed by the Board of Directors. No call shall
be required for regular meetings for which the time and place have been fixed.
Special meetings may be called by or at the direction of the Chairman of the
Board, if any, the President or a majority of the directors then in office. No
notice shall be required for regular meetings for which the time and place have
been fixed. Written, oral or any other mode of notice of the time and place
shall be given for special meetings
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in sufficient time for the convenient assembly of the directors thereat. Notice
need not be given to any director or to any member of a committee of directors
who submits a written waiver of notice signed by him or her before or after the
time stated therein. Attendance of any such person at a meeting shall constitute
a waiver of notice of such meeting, except when he or she attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the directors need be specified in any written
waiver of notice.
Section 5. Quorum. Except as may be otherwise specifically provided by
law, the Certificate of Incorporation or these bylaws, at all meetings of the
Board of Directors, a majority of the entire Board of Directors shall constitute
a quorum for the transaction of business and the act of a majority of the
directors present at any meeting at which a quorum is present shall be the act
of the Board of Directors. If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 6. Actions by Written Consent. Unless otherwise provided by the
Certificate of Incorporation or these bylaws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all the members of the Board of Directors or
committee, as the case may be, consent thereto in writing, in one document or in
counterparts, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 7. Meetings by Conference Telephone. Unless otherwise provided
by the Certificate of Incorporation or these bylaws, members of the Board of
Directors or any committee designated by the Board of Directors may participate
in a meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 7 shall constitute presence in person at such
meeting.
Section 8. Committees. The Board of Directors may, by resolution passed
by a majority of the entire Board of Directors, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or disqualification
of a member of
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a committee, and in the absence of a designation by the Board of Directors of an
alternate member to replace the absent or disqualified member, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in place of any absent or
disqualified member. Any committee, to the extent allowed by law and provided in
the resolution establishing such committee, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation. Without limitation to the foregoing, any
committee shall have the power and authority to declare a dividend, to authorize
the issuance of stock or to adopt a certificate of ownership and merger pursuant
to Section 253 of the Delaware General Corporation Law. Each committee shall
keep regular minutes and report to the Board of Directors when required.
Section 9. Compensation. Directors as such shall not receive any stated
salary for their services, but by resolution of the Board of Directors a fixed
sum and expenses of attendance, if any, may be allowed for attendance at each
regular or special meeting of the Board of Directors or any committee thereof;
provided that nothing contained herein shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his, her or their
votes are counted for such purpose if (a) the material facts as to his, her or
their relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum, (b) the material facts as to
his, her or their relationship or interest and as to the contract or transaction
are disclosed or are known to the stockholders entitled to vote thereon and the
contract or transaction is specifically approved in good faith by vote of the
stockholders or (c) the contract or transaction is fair as to the Corporation as
of the time it is authorized, approved or ratified by the Board of Directors, a
committee thereof or the stockholders. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or a committee that authorizes the contract or transaction.
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ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President and a Secretary. The Board of
Directors, in its discretion, may also choose a Treasurer and one or more
Executive Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant
Treasurers and other officers. Any number of offices may be held by the same
person, unless otherwise prohibited by law, the Certificate of Incorporation or
these bylaws. The officers of the Corporation need not be stockholders of the
Corporation or directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting held
after each annual meeting of stockholders shall elect the officers of the
Corporation, who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified or until their earlier resignation or
removal. Any officer elected by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the Corporation shall be filled by the Board
of Directors. The salaries of all officers of the Corporation shall be fixed by
the Board of Directors and may be altered from time to time except as otherwise
provided by contract.
Section 3. President. The President shall, subject to the control of
the Board of Directors, have general supervision of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. He or she shall be the Chief Executive
Officer of the Corporation and shall execute all bonds, mortgages, contracts and
other instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign and
execute documents when so authorized by these bylaws, the Board of Directors or
the President. In the absence or disability of the Chairman of the Board of
Directors, or if there be none, the President shall preside at all meetings of
the stockholders and the Board of Directors. The President shall also perform
such other duties and may exercise such other powers as from time to time may be
assigned to him or her by these bylaws or by the Board of Directors.
Section 4. Executive Vice Presidents and Vice Presidents. At the
request of the President or in his or her absence or in the event of his or her
inability or refusal to act the Executive Vice President or the Executive Vice
Presidents if there be more than one, and the Vice President or the Vice
Presidents, if there be
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more than one (in the order designated by the Board of Directors), shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. Each Executive Vice
President and each Vice President shall perform such other duties and have such
other powers as the Board of Directors from time to time may prescribe. If there
be no Executive Vice President or Vice President, the Board of Directors shall
designate the officer of the Corporation who, in the absence of the President or
in the event of the inability or refusal of the President to act, shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President.
Section 5. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
President, under whose supervision he or she shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the President may
choose another officer to cause such notice to be given. The Secretary shall
have custody of the seal of the Corporation and the Secretary or an Assistant
Secretary, if there be one, shall have authority to affix the same to any
instrument requiring it and when so affixed, it may be attested by the signature
of the Secretary or by the signature of any such Assistant Secretary. The Board
of Directors may give general authority to any other officer to affix the seal
of the Corporation and to attest the affixing by his or her signature. The
Secretary shall see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 6. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meeting, or when the Board of Directors so requires, an account of
all his or her transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give the
Corporation a bond in such sum
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and with such surety or sureties as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his or her office and
for the restoration to the Corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his or her possession or under his
or her control belonging to the Corporation.
Section 7. Assistant Secretaries. Except as may be otherwise provided
in these bylaws, Assistant Secretaries, if there be any, shall perform such
duties and have such powers as from time to time may be assigned to them by the
Board of Directors, the President, any Executive Vice President, if there be
one, any Vice President, if there be one, or the Secretary, and in the absence
of the Secretary or in the event of his or her disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
Section 8. Assistant Treasurers. Assistant Treasurers, if there be any,
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Executive Vice
President, if there be one, any Vice President, if there be one, or the
Treasurer, and in the absence of the Treasurer or in the event of his or her
disability or refusal to act, shall perform the duties of the Treasurer, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the Treasurer. If required by the Board of Directors, an
Assistant Treasurer shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of his or her office and for the restoration
to the Corporation, in case of his or her death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his or her possession or under his or her control belonging to
the Corporation.
Section 9. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from time
to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed in the name of the
Corporation (a) by the President, an Executive Vice President or a Vice
President and (b) by the
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Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation, certifying the number of shares owned by such holder.
Section 2. Signatures. Where a certificate is countersigned by (a) a
transfer agent other than the Corporation or its designated employees or (b) a
registrar other than the Corporation or its designated employees, any other
signature on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate, or his or her legal representative, to advertise the same in such
manner as the Board of Directors shall require and/or to give the Corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be transferable in
the manner prescribed by law and in these bylaws. Transfers of stock shall be
made on the books of the Corporation only by the person named in the certificate
or by his or her attorney lawfully constituted in writing and upon the surrender
of the certificate therefor, which shall be cancelled before a new certificate
shall be issued.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these bylaws to be given to any director, member
of a committee or stockholder, such notice may be given by mail, addressed to
such director, member of a committee or stockholder, at his or her address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Written notice may also be given personally
or by facsimile transmission, telegram, telex or cable.
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Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these bylaws to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent to notice.
ARTICLE VII
INDEMNIFICATION
Section 1. General. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he or she is or was a director,
officer, employee, agent or fiduciary of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against expenses (including attorneys fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding (and advance
expenses to such person in connection with such action, suit or proceeding) to
the fullest extent permitted under the laws of the state of Delaware now or
hereafter in existence, including Section 145 of the Delaware General
Corporation Law as currently in existence or as subsequently amended, modified,
supplemented or replaced (but, in case of any such amendment, modification,
supplementation or replacement, only to the extent that such amendment,
modification, supplementation or replacement broadens such persons rights to
indemnification thereunder).
Section 2. Non-Exclusivity. The rights to receive indemnification and
advancement of expenses provided in Article 7 of these Bylaws shall not be
deemed exclusive of any other rights to which any person may at any time be
entitled under applicable law, the Certificate of Incorporation, these Bylaws,
any agreement, a vote of stockholders, a resolution of the Board of Directors or
otherwise. No amendment, alteration or repeal of this Article 7 or any provision
hereof shall be effective as to any person in respect of any act, event or
circumstance that occurred or existed, in whole or in part, before such
amendment, alteration or repeal.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, and
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may be paid in cash, in property or in shares of the capital stock. Before
payment of any dividend, there may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, deems proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose, and the
Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year, unless otherwise fixed by resolution of the Board of
Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
Corporate Seal, Delaware. The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced.
Section 5. Amendments. These bylaws may be altered, amended or
repealed, in whole or in part, or new bylaws may be adopted by the stockholders
or by the Board of Directors of the Corporation.
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/dpw/cw/075/10425/001/S1/EDGAR/HHIACQ.ED
BY-LAWS
OF
HHI ACQUISITION CORP.
(a Delaware corporation)
Adopted June 26, 1996
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall be
held at such place either within or without the State of Delaware as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting.
Section 2. Annual Meetings. Annual meetings of stockholders, commencing
with the year 1996, shall be held at such date and time as shall be designated
from time to time by the board of directors and stated in the notice of the
meeting, at which they shall elect a board of directors, and transact such other
business as may properly be brought before the meeting.
Section 3. Notice of Annual Meetings. Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting.
Section 4. List of Stockholders Entitled to Vote. The officer who has
charge of the stock ledger of the corporation shall prepare and make, at least
ten
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days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the corporation's principal
office. The list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by any stockholder
who is present.
Section 5. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
certificate of incorporation, may be called by the president and shall be called
by the president or secretary at the request in writing of a majority of the
board of directors or of the holders of 25 percent of all stock issued and
outstanding and entitled to vote on the date such request was received by the
corporation. Such request shall state the purpose or purposes of the proposed
meeting.
Section 6. Notice of Special Meetings. Written notice of a special
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less than ten nor
more than sixty days before the date of the meeting, to each stockholder
entitled to vote at such meeting.
Section 7. Business Transacted at Special Meetings. Business transacted
at any special meeting of stockholders, shall be limited to the purposes stated
in the notice.
Section 8. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
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Section 9. Votes Required. When a quorum is present at any meeting, the
vote of the holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought before such
meeting, unless the vote is for the election of directors in which case the
candidates receiving the greatest number of votes shall be elected, or the
question is one upon which by express provision of the statutes or of the
certificate of incorporation or by-laws a different vote is required in which
case such express provision shall govern and control the decision of such
question.
Section 10. Voting in Person or by Proxy. Unless otherwise provided in
the certificate of incorporation each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such stockholder, but no proxy shall
be voted on after eleven months from its date, unless the proxy provides for a
longer period.
Section 11. Consent in Writing. Unless otherwise provided in the
certificate of incorporation, any action required to be taken at any annual or
special meeting of stockholders of the corporation, or any action which may be
taken at any annual or special meeting of such stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by all of the
holders of outstanding stock who would be entitled to notice of such meeting.
ARTICLE III
DIRECTORS
Section 1. Number, Election and Term of Office. The number of directors
of the corporation shall be not more than eighteen (18). Initially there shall
be one (1) director and thereafter the number of directors shall be as provided
from time to time in the by-laws, provided that no amendment to the by-laws
decreasing the number of directors shall have the effect of shortening the term
of any incumbent director, and provided further that no action shall be taken by
the directors (whether through amendment of the by-laws or otherwise) to
increase the number of directors as provided in the by-laws from time to time
unless at least two-thirds (662/3)%) of the directors then in office shall
concur in said action. The directors shall be elected at the annual meeting of
the stockholders, except as provided in Section 2 of this Article, and each
director shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and Newly created Directorships. Vacancies and
newly created directorships resulting from any increase in the authorized number
of directors may be filled by a majority of the directors then in office, or by
a sole
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remaining director, and the directors so chosen shall hold office until the next
election of directors and until their successors are duly elected and shall
qualify, unless sooner displaced. If there are no directors in office, then an
election of directors may be held in the manner provided by statute.
Section 3. Authority. The business of the corporation shall be managed
by or under the direction of its board of directors which may exercise all such
powers of the corporation and do all such lawful acts and things as are not by
statute or by the certificate of incorporation or by these by-laws directed or
required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. Place of Meetings. The board of directors of the corporation
may hold meetings, both regular and special, either within or without the State
of Delaware.
Section 5. Organizational Meeting. The first meeting of each newly
elected board of directors shall be held immediately after the annual meeting of
stockholders at the same place as such annual meeting is held and no notice of
such meeting shall be necessary to the newly elected directors in order legally
to constitute the meeting, provided a quorum shall be present. In the event such
meeting is not held at the time and place provided herein, the meeting may be
held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the board of directors, or as shall
be specified in a written waiver signed by all of the directors.
Section 6. Regular Meetings. Regular meetings of the board of directors
may be held without notice at such time and at such place as shall from time to
time be determined by the board.
Section 7. Special Meetings. Special meetings of the board of directors
may be called by the chairman of the board or the president on three days'
notice to each director, either personally or by mail or by telegram; special
meetings shall be called by the chairman of the board or the president or the
secretary in like manner and on like notice on the written request of a majority
of the directors.
Section 8. Quorum. At all meetings of the board of directors a majority
of the directors shall constitute a quorum for the transaction of business and
the act of a majority of the directors present at any meeting at which there is
a quorum shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may
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adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Section 9. Consent in Writing. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the board of directors or of any committee thereof
may be taken without a meeting, if all members of the board of directors or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the board of directors or
committee.
Section 10. Participation in Meetings by Telephone. Unless otherwise
restricted by the certificate of incorporation or these by-laws, members of the
board of directors, or any committee designated by the board of directors, may
participate in a meeting of the board of directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. Designation; Powers. The board of directors may, by
resolution passed by a majority of the whole board, designate one or more
committees, each committee to consist of not less than three directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee.
In the absence or disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in the place of
any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution; and, unless the resolution or the certificate of
incorporation expressly so provide, no such committee shall have the power or
authority to declare a dividend or to
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authorize the issuance of stock. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the board of directors.
Section 12. Minutes. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 13. Compensation. Unless otherwise restricted by the
certificate of incorporation or these by-laws, the board of directors shall have
the authority to fix the compensation of directors. The directors may be paid
their expenses, if any, of attendance at each meeting of the board of directors
and may be paid a fixed sum for attendance at each meeting of the board of
directors or a stated salary as director. No such payment shall preclude any
director from serving the corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
REMOVAL OF DIRECTORS
Section 14. Notwithstanding any other provisions of the certificate of
incorporation or the by-laws of the corporation (and notwithstanding the fact
that some lesser percentage may be specified by law, the certificate of
incorporation or the by-laws of the corporation), any director or the entire
board of directors of the corporation may be removed from office at any time,
with or without cause, but only by the affirmative vote of the holders of at
least two-thirds (662/3%) of all of the outstanding shares of capital stock of
the corporation entitled to vote on the election of directors at a meeting of
stockholders called for that purpose, except that if the board of directors, by
an affirmative vote of at least a majority of the entire board of directors,
recommends removal of a director to the stockholders, such removal may be
effected by the affirmative vote of the holders of at least a majority of the
outstanding shares of capital stock of the corporation entitled to vote on the
election of directors at a meeting of stockholders for that purpose.
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ARTICLE IV
NOTICES
Section 1. Methods. Whenever, under the provisions of the statutes or
of the certificate of incorporation or of these by-laws, notice is required to
be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed to
such director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Waiver. Whenever any notice is required to be given under
the provisions of the statutes or of the certificate of incorporation or of
these by-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. Designation. The officers of the corporation shall be chosen
by the board of directors and shall be a president, a secretary and a treasurer.
The board of directors may also choose a chairman of the board, vice-presidents
(including senior, executive or assistant vice-presidents), and one or more
assistant secretaries and assistant treasurers. Any number of offices may be
held by the same person, unless the certificate of incorporation or these
by-laws otherwise provides.
Section 2. Election. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a chairman, a president, one or
more vice-presidents, a secretary and a treasurer.
Section 3. Others. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. Salaries. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. Term of Office. The officers of the corporation shall hold
office until their successors are chosen and qualify. Any officer elected or
appointed by
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the board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
CHAIRMAN OF THE BOARD
Section 6. Powers. If chosen by the Board of Directors, the chairman of
the board of directors shall be the chief executive officer of the corporation
and shall have general control and management of the business affairs and
policies of the corporation. He shall be generally responsible for the proper
conduct of the business of the corporation. During the absence or disability of
the president, he shall exercise all the powers and discharge all the duties of
the president. He shall preside at all meetings of the stockholders and of the
board of directors at which he is present; and, in his absence, the president
shall preside at such meetings. He shall have such other powers and perform such
other duties as from time to time may be conferred or imposed upon him by the
board of directors.
Section 7. Execution of Contracts. He shall execute bonds, mortgages
and other contracts requiring a seal, under the seal of the corporation, except
where required or permitted by law to be otherwise signed and executed and
except where the signing and execution thereof shall be expressly delegated by
the board of directors to some other officer or agent of the corporation.
THE PRESIDENT
Section 8. Powers. The president of the corporation shall be the
principal operating and administrative officer of the corporation. If there is
no chairman of the board or during the absence or disability of the chairman of
the board, he shall exercise all of the powers and discharge all of the duties
of the chairman of the board and chief executive officer. He shall, in the
absence of the chairman of the board, possess power to sign all certificates,
contracts and other instruments of the corporation. He shall, in the absence of
the chairman of the board, preside at all meetings of the stockholders and of
the board of directors. He shall perform all such other duties as are incident
to his office or are properly required of him by the board of directors.
THE VICE-PRESIDENTS
Section 9. Powers. In the absence of the president or in the event of
his inability or refusal to act, the vice-president (or in the event there be
more than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform
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such other duties and have such other powers as the board of directors may from
time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARY
Section 10. Secretary. The secretary shall attend all meetings of the
board of directors and all meetings of the stockholders and record all the
proceedings of the meetings of the corporation and of the board of directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors or chief executive officer, under whose supervision he shall be. He
shall have custody of the corporate seal of the corporation and he, or an
assistant secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.
Section 11. Assistant Secretary. The assistant secretary, or if there
be more than one, the assistant secretaries in the order determined by the board
of directors (or if there be no such determination, then in the order of their
election) shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. Duties. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
Section 13. Disbursements. He shall disburse the funds of the
corporation as may be ordered by the board of directors, taking proper vouchers
for such disbursements, and shall render to the chief executive officer and the
board of directors, at its regular meetings, or when the board of directors so
requires, an account of all his transactions as treasurer and of the financial
condition of the corporation.
Section 14. Bond. If required by the board of directors, he shall give
the corporation a bond (which shall be renewed each year) in such sum and with
such
9
<PAGE>
surety or sureties as shall be satisfactory to the board of directors for the
faithful performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 15. Assistant Treasurer. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by the
board of directors (or if there be no such determination, then in the order of
their election) shall, in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. Certificate. Every holder of stock in the corporation shall
be entitled to have a certificate, signed by, or in the name of the corporation
by, the chairman of the board of directors, or the president or a vice-president
and the treasurer or an assistant treasurer, or the secretary or an assistant
secretary of the corporation, certifying the number of shares owned by him in
the corporation.
Section 2. Signatures. Any of or all the signatures on the certificate
may be facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
Section 3. Lost Certificates. The board of directors (through the
corporation's duly authorized officers) may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors (through the
corporation's duly authorized officers) may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to give the
corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the corporation with respect to the certificate alleged
to have been lost, stolen or destroyed.
10
<PAGE>
Section 4. Transfer of Stock. Upon surrender to the corporation or the
transfer agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 5. Record Date. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
Section 6. Registered Stockholders. The corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation.
Section 2. Reserves. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, deem
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall deem conducive to the interest of
the corporation, and the
11
<PAGE>
directors may modify or abolish any such reserve in the manner in which it was
created.
Section 3. Annual Statement. The board of directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
Section 4. Checks. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
Section 6. Seal. The corporate seal shall have inscribed thereon the
name of the corporation and the word "Seal." The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 7. Indemnification. The corporation shall indemnify its
officers, directors, employees and agents to the fullest extent permitted by the
General Corporation Law of Delaware.
ARTICLE VIII
AMENDMENTS
Section 1. Procedure: Vote Required. These by-laws may be amended or
repealed by affirmative vote of the holders of record of shares entitling them
to exercise a majority of the voting power on such proposal or by a majority
vote of the board of directors when such power is conferred upon the board of
directors by the certificate of incorporation.
12
SECOND SUPPLEMENTAL INDENTURE
dated as of January 25, 1999
among
INSILCO CORPORATION,
And its Subsidiaries
EYELETS FOR INDUSTRY, INC.
and
EFI METAL FORMING, INC.
the GUARANTORS party hereto
and
STAR BANK, N.A.,
as Trustee
with respect to
Insilco Corporation's 12% Senior Subordinated Notes due 2007
<PAGE>
THIS SECOND SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
entered into as of January 25, 1999, among Insilco Corporation, a Delaware
corporation (the "Company"), Eyelets For Industry, Inc., a Connecticut
corporation and EFI Metal Forming, Inc., a Connecticut corporation (each an
"Undersigned") and Star Bank, N.A., as trustee (the "Trustee").
RECITALS
WHEREAS, the Company and the Trustee entered into the Indenture,
dated as of November 9, 1998 (the "Indenture"), relating to the Company's 12%
Senior Subordinated Notes due 2007 (the "Notes";
WHEREAS, as a condition to the Trustee entering into the Indenture
and the Holders purchase of the Notes, the Company agreed pursuant to Section
10.21 of the Indenture to cause its Domestic Subsidiaries which are
Wholly-Owned Restricted Subsidiaries to provide the Note Guarantee in certain
circumstances.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained and intending to be legally bound, the parties hereto hereby
agree as follows:
SECTION 1. Definitions. Capitalized terms used herein and not
otherwise defined herein are used as defined in the Indenture.
SECTION 2. Guarantee. Pursuant to Section 9.01 of the Indenture, each
Undersigned, by its execution of this Supplemental Indenture, agrees to be
bound by the terms of the Indenture, including but not limited to Article 14
thereof with respect to the Note Guarantees, and hereby, jointly and
severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and
assigns, irrespective of the validity and enforceability of the Indenture, the
Notes or the obligations thereunder, that (a) the principal of and interest on
the Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal
of and interest on the Notes, if any, if lawful, and all other obligations of
the Company to the Holders or the Trustee thereunder will be promptly paid in
full or performed, all in accordance with the terms thereof; and (b) in case
of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise. Failing payment when due of any
amount so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same
immediately. The Guarantor agrees that this is a guarantee of payment
<PAGE>
and not a guarantee of collection.
SECTION 3. Governing Law. This Supplemental Indenture shall be
governed by and construed in accordance with the internal laws of the State of
New York.
SECTION 4. Counterparts. This Supplemental Indenture may be signed
in various counterparts which together shall constitute one and the same
instrument.
SECTION 5. Supplement to the Indenture. This Supplemental Indenture
is an amendment supplemental to the Indenture and said Indenture and this
Supplemental Indenture shall henceforth be read together.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Supplemental Indenture or have caused this Supplemental Indenture to be duly
executed on their respective behalf by their respective officers thereunto
duly authorized, as of the day and year first above written.
INSILCO CORPORATION
By:___________________________
Name: Kenneth H. Koch
Title: Vice President, General Counsel
and Secretary
EYELETS FOR INDUSTRY, INC.
By:__________________________
Name: Kenneth H. Koch
Title: Vice President, General Counsel
and Secretary
EFI METAL FORMING, INC.
By:__________________________
Name: Kenneth H. Koch
Title: Vice President, General Counsel
and Secretary
STAR BANK, N.A.
as Trustee
By: _____________________
Name:
Title:
EXHIBIT 5.2
LETTERHEAD OF KENNETH H. KOCH
April 5, 1999
Insilco Corporation
425 Metro Place North, Fifth Floor
Dublin, Ohio 43017
Ladies and Gentlemen:
I have acted as special counsel to Insilco Corporation, a Delaware
corporation (the "Company"), in connection with the Company's offer (the
"Exchange Offer") to exchange its 12% Series B Senior Subordinated Notes due
2007 (the "New Notes") for any and all of its outstanding 12% Series A Senior
Subordinated Notes due 2007 (the "Old Notes") which are guaranteed by certain
of the Company's subsidiaries.
I have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as I have deemed
necessary or advisable for the purpose of rendering this opinion.
Upon the basis of the foregoing and assuming the due execution and
delivery of the New Notes and the Guarantees, I am of the opinion that the
Guarantees, when the New Notes and the Guarantees are executed, authenticated
and delivered in accordance with the Exchange Offer, will be valid and binding
obligations of the Guarantor Subsidiaries enforceable in accordance with their
terms, except (x) as such enforcement may be limited by bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors' rights
generally, (y) as such enforcement may be limited by general principles of
equity, regardless of whether enforcement is sought in a proceeding at law or
in equity and (z) to the extent that a waiver of rights under any usury or
state law may be unenforceable.
<PAGE>
2
I am a member of the Bar of the State of Ohio and the foregoing
opinion is limited to the laws of the State of Ohio, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Exchange Offer. I also consent to the
reference to me under the caption "Legal Matters" in the Prospectus contained
in such Registration Statement.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without my prior written
consent except that Star Bank, N.A., as Exchange Agent for the Exchange Offer,
may rely upon this opinion as if it were addressed directly to it.
Very truly yours,
/s/ Kenneth H. Koch
-----------------------------------
Kenneth H. Koch
EXHIBIT 10.4
EXECUTION COPY
==============================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 24, 1998
among
INSILCO CORPORATION
and
INSILCO DEUTSCHLAND GMBH
as Borrowers
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS LENDERS
THE INSTITUTIONS FROM TIME TO TIME
PARTY HERETO AS ISSUING BANKS
and
DLJ CAPITAL FUNDING, INC.
as Syndication Agent
THE FIRST NATIONAL BANK OF CHICAGO
as Administrative Agent
ABN AMRO BANK N.V., Pittsburgh Branch
as Documentation Agent
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
as Lead Arranger
==============================================================================
CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of
November 24, 1998 (as amended, supplemented or otherwise modified from time to
time, this "Agreement"), entered into among Insilco Corporation, a Delaware
corporation (with its successors and permitted assigns, the "Company"),
Insilco Deutschland GmbH, a corporation organized under the laws of the
Federal Republic of Germany and wholly owned Subsidiary of the Company
("Insilco GmbH"), certain other foreign subsidiaries of the Company designated
herein as Foreign Borrowers (together with Insilco GmbH, the "Foreign
Borrowers"; and together with the Company, the "Borrowers"), the institutions
from time to time party hereto as Lenders, whether by execution of this
Agreement or an Assignment and Acceptance, the institutions from time to time
party hereto as Issuing Banks, whether by execution of this Agreement or an
Assignment and Acceptance, DLJ Capital Funding, Inc. ("DLJ"), in its capacity
as syndication agent for the Lenders and the Issuing Banks (the "Syndication
Agent"), ABN AMRO Bank N.V., Pittsburgh Branch ("ABN AMRO"), in its separate
capacity as documentation agent for the Lenders and the Issuing Banks (the
"Documentation Agent"; and, together with the Syndication Agent, the
"CoAgents"), and The First National Bank of Chicago ("First Chicago"), in its
separate capacity as administrative and collateral agent for the Lenders and
Issuing Banks (with its successors in such capacity, the "Administrative
Agent"; and, together with the CoAgents, the "Agents"), amends and restates in
its entirety that certain Credit Agreement, dated as of July 3, 1997, as
amended through the date hereof (the "Existing Credit Agreement"), among the
Company, the Lenders party thereto (the "Existing Lenders"), and the Issuing
Banks party thereto (the "Existing Issuing Banks"), DLJ, as Syndication Agent,
First Chicago, as Documentation Agent, and Citicorp USA, Inc., as
administrative and collateral agent for the Existing Lenders and the Existing
Issuing Banks (the "Existing Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Company has requested the Administrative Agent and
the Lenders to amend certain terms of the Existing Credit Agreement, among
other things, to provide for Term Loans to be made by the Term Loan Lenders in
an aggregate principal amount of $125,000,000;
WHEREAS, the Company has received gross proceeds in an amount
equal to $120,000,000 from the offering of the 1998 Subordinated Notes, the
net proceeds of which shall be used, together with proceeds of Loans, to
repurchase or defease Subordinated Notes, including those that were tendered
to the Company in connection with the Change of Control (as defined in the
Subordinated Note Indenture) caused by the consummation of the Recapitalization
Transactions;
WHEREAS, the Company, the Lenders, the CoAgents and the
Administrative Agent have agreed to amend and restate the Existing Credit
Agreement to provide for such amendments on the terms set forth in this
Agreement, which Agreement shall become effective upon satisfaction of certain
conditions precedent set forth herein;
WHEREAS, effective immediately prior to the Effective Date
referred to below, the Existing Administrative Agent resigned as collateral
and administrative agent for the Existing Lenders and the Existing Issuing
Banks and assigned to the Administrative Agent all of its rights and
obligations under the Existing Credit Agreement and the Loan Documents in its
capacity as administrative and collateral agent;
WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities
existing under the Existing Credit Agreement or evidence payment of all or any
of such obligations and liabilities, that this Agreement amend and restate in
its entirety the Existing Credit Agreement, and that from and after the
Effective Date the Existing Credit Agreement be of no further force or effect
except as to evidence the incurrence of the "Obligations" thereunder and the
representations and warranties made thereunder;
NOW, THEREFORE, in consideration of the above premises, the
Borrowers, the Lenders, the Issuing Banks, the CoAgents and the Administrative
Agent agree as follows:
ARTICLE
DEFINITIONS
1.0. Certain Defined Terms. In addition to the terms defined
above, the following terms used herein shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined:
"ABN AMRO" is defined in the preamble.
"Accommodation Obligation" means (without duplication) any
Contractual Obligation, contingent or otherwise, of one Person with respect to
any Indebtedness, obligation or liability of another, if the primary purpose
or intent thereof by the Person incurring the Accommodation Obligation is to
provide assurance to the obligee of such Indebtedness, obligation or liability
of another that such Indebtedness, obligation or liability shall be paid or
discharged, or that any agreements relating thereto shall be complied with, or
that the holders thereof shall be protected (in whole or in part) against loss
in respect thereof including, without limitation, direct and indirect
guarantees, endorsements (except for collection or deposit in the ordinary
course of business), notes co-made, recourse agreements, take-or-pay
agreements, keepwell agreements, agreements to purchase security therefor
(other than such agreements to purchase in the ordinary course of business) or
to provide funds for the payment or discharge thereof, agreements to maintain
solvency, assets, level of income, or other financial condition, and
agreements to make payment other than for value received.
"Administrative Agent" is defined in the preamble and shall
include any successor Administrative Agent appointed pursuant to Section 12.07.
"Affiliate" of any specified Person means any other Person
(i) which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, such specified Person,
(ii) which beneficially owns or holds 5% or more of any class of the Voting
Stock or other equity interest of such specified Person or (iii) of which 5% or
more of the Voting Stock or other equity interest is beneficially owned or
held by such specified Person or a Subsidiary of such specified Person, or, in
the case of any Lender which is an investment fund, the investment advisor
thereof and any investment fund having the same investment advisor. For the
purposes of this definition, (i) "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person directly or indirectly, whether through the ownership of Voting Stock,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing and (ii) Affiliates of the Company and
Subsidiaries of the Company shall not include the Company and Subsidiaries of
the Company.
"Agents" is defined in the preamble.
"Aggregate Pro Rata Share" means, with respect to any Lender,
the percentage obtained by dividing (i) the sum of (x) such Lender's Revolving
Credit Commitment at such time (as reduced from time to time in accordance
with the provisions of this Agreement) and (y) such Lender's Term Loan
Commitment (or, after the Effective Date, Term Loans) at such time by (ii) the
sum of (x) the aggregate amount of all Revolving Credit Commitments at such
time (as reduced from time to time in accordance with the provisions of this
Agreement) and (y) the aggregate amount of all Term Loan Commitments (or,
after the Effective Date, Term Loans) at such time; provided, however, if all
of the Commitments are terminated pursuant to the terms hereof, then
"Aggregate Pro Rata Share" means the percentage obtained by dividing (x) such
Lender's Term Loans and Revolving Credit Obligations by (y) the aggregate
amount of all Term Loans and Revolving Credit Obligations.
"Alternative Currency" means, subject to Section 3.06, (i) the
lawful currency of the United Kingdom, Japan, France or the Federal Republic
of Germany, (ii) after the commencement of the third stage of EMU (as defined
in Section 3.06), the euro and (iii) any additional currency approved by the
Administrative Agent (subject to the Administrative Agent's confirmation that
funding in such currency is generally provided by the Lenders); provided that
in the case of any such currency, such currency is freely transferable and
convertible into Dollars.
"Applicable Base Rate Margin" means at all times during the
applicable periods set forth below, (i) with respect to outstanding Term Loans
maintained as Base Rate Loans, 2.50% per annum and (ii) with respect to
outstanding Revolving Loans maintained as Base Rate Loans, the applicable rate
per annum set forth below under the heading "Applicable Base Rate Margin for
Revolving Loans";
Applicable Base Rate
Leverage Ratio Margin for Revolving Loans
-------------- --------------------------
greater than or equal to 1.75%
5.00 to 1
Greater than or equal to
4.00 to 1 1.25%
less than 5.00 to 1
Greater than or equal to
3.00 to 1 0.75%
less than 4.00 to 1
less than 3.00 to 1 0.25%
The Leverage Ratio used to compute the Applicable Base Rate Margin for
Revolving Loans following the Effective Date shall be the Leverage Ratio set
forth in the Compliance Certificate most recently delivered by the Company to
the Administrative Agent pursuant to Section 7.01(d); changes in the
Applicable Base Rate Margin for Revolving Loans resulting from a change in the
Leverage Ratio shall become effective as to all Revolving Loans maintained as
Base Rate Loans upon delivery by the Company to the Administrative Agent of a
new Compliance Certificate pursuant to Section 7.01(d) and notice by the
Company to the Administrative Agent that a rate change is required.
Notwithstanding anything to the contrary set forth in this Agreement
(including the then effective Leverage Ratio), the Applicable Base Rate Margin
shall be 1.75% for Revolving Loans for the period commencing on the Effective
Date and ending on the delivery of a separate Compliance Certificate in
respect of the Company's fiscal month ending May 31, 1999. If the Company
shall fail to deliver a Compliance Certificate within 50 days after the end of
any fiscal month or quarter (or within 95 days, in the case of the last fiscal
quarter of any Fiscal Year) pursuant to Section 7.01(d), the Applicable Base
Rate Margin for Revolving Loans from and including the 51st (or 96th, as the
case may be) day after the end of such fiscal quarter to but not including the
date the Company delivers to the Administrative Agent a Compliance Certificate
shall conclusively equal the highest Applicable Base Rate Margin for Revolving
Loans set forth above.
"Applicable Eurocurrency Rate Margin" means at all times during
the applicable periods set forth below, (i) with respect to outstanding Term
Loans maintained as Eurocurrency Rate Loans, 3.75% per annum and (ii) with
respect to outstanding Revolving Loans maintained as Eurocurrency Rate Loans,
the applicable rate per annum set forth below under the heading "Applicable
Eurocurrency Rate Margin for Revolving Loans";
Applicable Base Rate
Leverage Ratio Margin for Revolving Loans
-------------- --------------------------
greater than or equal to 5.00 to 1 3.00%
greater than or equal to 4.00 to 1
less than 5.00 to 1 2.50%
greater than or equal to 3.00 to 1
less than 4.00 to 1 2.00%
less than 3.00 to 1 1.50%
The Leverage Ratio used to compute the Applicable Eurocurrency Rate Margin for
Revolving Loans following the Effective Date shall be the Leverage Ratio set
forth in the Compliance Certificate most recently delivered by the Company to
the Administrative Agent pursuant to Section 7.01(d); changes in the
Applicable Eurocurrency Margin for Revolving Loans resulting from a change in
the Leverage Ratio shall become effective as to all Revolving Loans maintained
as Eurocurrency Rate Loans upon delivery by the Company to the Administrative
Agent of a new Compliance Certificate pursuant to Section 7.01(d) and notice
by the Company to the Administrative Agent that a rate change is required.
Notwithstanding anything to the contrary set forth in this Agreement
(including the then effective Leverage Ratio), the Applicable Eurodollar Rate
Margin shall be 3.00% for Revolving Loans for the period commencing on the
Effective Date and ending on the delivery of a separate Compliance Certificate
in respect of the Company's fiscal month ending May 31, 1999. If the Company
shall fail to deliver a Compliance Certificate within 50 days after the end of
any fiscal quarter (or within 95 days, in the case of the last fiscal quarter
of any Fiscal Year) as required pursuant to Section 7.01(d), the Applicable
Eurocurrency Rate Margin for Revolving Loans from and including the 51st (or
96th, as the case may be) day after the end of such fiscal month or quarter to
but not including the date the Company delivers to the Administrative Agent a
Compliance Certificate shall conclusively equal the highest Applicable
Eurocurrency Rate Margin for Revolving Loans set forth above.
"Applicable Lending Office" means, with respect to a particular
Lender, its Eurocurrency Lending Office in respect of provisions relating to
Eurocurrency Rate Loans and its Domestic Lending Office in respect of
provisions relating to Base Rate Loans.
"Applicable Payment Office" means, with respect to Obligations
payable in Dollars, the principal office of First Chicago in Chicago,
Illinois, and, with respect to Obligations payable in any Alternative
Currency, the principal office of First Chicago London in London, England or
such other office or offices as determined by the Administrative Agent from
time to time of which notice is given to the Borrowers, the Lenders and the
Issuing Banks in accordance with the provisions of Section 13.08.
"ARUP" means ARUP Alu-Rohr und -Profil GmbH, a corporation
formed under the laws of the Federal Republic of Germany.
"Assignment and Acceptance" means an Assignment and Acceptance
in substantially the form of Exhibit A attached hereto and made a part hereof
(with blanks appropriately completed) delivered to the Administrative Agent in
connection with an assignment of a Lender's interest hereunder in accordance
with the provisions of Section 13.01.
"Associated Costs Rate" is defined in Schedule 1.01.5.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C. Section Section 101 et seq.), as amended from time to time, and any
successor statute.
"Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the corporate base rate of interest announced by
First Chicago from time to time, changing when and as said corporate base rate
changes and (ii) the sum of the Federal Funds Rate for such day plus 0.5% per
annum.
"Base Rate Loans" means all Loans denominated in Dollars which
bear interest at a rate determined by reference to the Base Rate as provided
in Section 4.01(a).
"Benefit Plan" means a defined benefit plan as defined in
Section 3(35) of ERISA subject to Title IV of ERISA or Section 412 of the
Internal Revenue Code (other than a Multiemployer Plan) in respect of which
the Company or any ERISA Affiliate is, or within the immediately preceding
three (3) years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrowers" is defined in the preamble.
"Borrowing" means a borrowing consisting of Loans of the same
Type and in the same currency made, continued or converted on the same day
and, in the case of Eurocurrency Rate Loans, for the same Eurocurrency
Interest Period.
"Business Day" means a day, in the applicable local time, which
is not a Saturday or Sunday or a legal holiday and on which banks are not
required or permitted by law or other governmental action to close (i) in
Chicago, Illinois and New York, New York, (ii) in the case of Eurocurrency
Rate Loans, in London, England and in the country of issue of the currency of
such Eurocurrency Rate Loans, and (iii) in the case of Letter of Credit
transactions for a particular Issuing Bank, in the place where its office for
issuance or administration of the pertinent Letter of Credit is located.
"Capital Expenditures" means, for any period with respect to
any Person, the aggregate of all expenditures (net of any insurance proceeds
or condemnation awards used to replace fixed assets, plant and equipment
following a casualty event or event of condemnation or taking with respect
thereto) by such Person to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements, but excluding
repairs and maintenance, and any amount credited to, or received by, such
Person in connection with a substantially contemporaneous trade in or sale of
the Property being replaced) during such period computed in accordance with
GAAP; provided, however, Capital Expenditures shall include, whether or not
such a designation would be in conformity with GAAP, that portion of Capital
Leases which is incurred and capitalized during such period on the
consolidated balance sheet of such Person and provided, further, Capital
Expenditures shall exclude, whether or not such a designation would be in
conformity with GAAP, Permitted Acquisitions to the extent such expenditures
are permitted under the terms of this Agreement.
"Capital Lease", as applied to any Person, means any lease of
any Property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"Capital Stock", with respect to any Person, means any capital
stock of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls
or claims of any character with respect thereto.
"Cash Collateral" means cash or Cash Equivalents held by the
Administrative Agent, either CoAgent, any of the Issuing Banks or any of the
Lenders as security for the Obligations.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States government and
backed by the full faith and credit of the United States government;
(ii) domestic and eurodollar certificates of deposit and time deposits,
bankers' acceptances and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or
agencies (fully protected against currency fluctuations), which, at the time
of acquisition, are rated A1 (or better) by Standard & Poor's Corporation (or
its successors) or P1 (or better) by Moody's Investors Service, Inc. (or its
successors); (iii) commercial paper of United States and foreign banks and
bank holding companies and their subsidiaries and United States and foreign
finance, commercial industrial or utility companies which, at the time of
acquisition, are rated A1 (or better) by Standard & Poor's Corporation (or its
successors) or P1 (or better) by Moody's Investors Service, Inc. (or its
successors); (iv) marketable direct obligations of any state of the United
States or any political subdivision of any such state given on the date of
such investment the highest credit rating by Moody's Investor Service, Inc.
(or its successors) and Standard & Poor's Corporation (or its successors);
(v) money market funds organized under the laws of the United States or any
state thereof that invests in any of the Investments identified under clauses
(i), (ii), (iii) and (iv) of this definition; and (vi) reverse purchase
agreements covering obligations of the type specified in clause (i) of this
definition; provided, that the maturities of any such Cash Equivalents
referred to in clauses (i) through (vi) shall not exceed one hundred eighty
(180) days.
"Cash Flow Period" means, as separate periods, each Fiscal Year
of the Borrower beginning with Fiscal Year 1999.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section Section 9601 et
seq., as amended, and any regulations promulgated thereunder.
"CERCLIS" is defined in Section 6.01(o).
"Change of Control" means (i) the failure of Holdco at any time
to own, directly or indirectly, free and clear of all Liens (except Liens in
favor of the Administrative Agent), all right, title and interest in 100% of
the Capital Stock of the Company; (ii) the failure of the Investors to own at
least 51% (on a fully diluted basis) of the economic and voting interest in the
Voting Stock of Holdco; (iii) the failure of the Investors at any time to have
the right to designate or nominate at least 51% of the Board of Directors of
Holdco or (iv) the occurrence of a "Change of Control" as defined in the
Holdco Discount Note Indenture or any other agreement or certificate of
designation evidencing or governing the terms of the Holdco Securities.
"Claim" means any claim or demand, by any Person, of whatsoever
kind or nature for any alleged Liabilities and Costs, whether based in
contract, tort, implied or express warranty, strict liability, criminal or
civil statute, Permit, ordinance or regulation, common law or otherwise.
"CoAgents" is defined in the preamble.
"Collateral" means all Property and interests in Property now
owned or hereafter acquired by Holdco, the Company or any of the Subsidiary
Guarantors upon which a Lien is granted under any of the Loan Documents.
"Commercial Letter of Credit" means any documentary letter of
credit issued by an Issuing Bank pursuant to Section 2.04 for the account of
the Company or a Subsidiary of the Company, which is drawable upon
presentation of documents evidencing the sale or shipment of goods purchased
by the Company or such Subsidiary in the ordinary course of its business.
"Commitment" means, with respect to any Lender, such Lender's
Revolving Credit Commitment and Term Loan Commitment.
"Common Stock" means the Company's common stock, $0.001 par
value.
"Company" is defined in the preamble.
"Company Guaranty" means the Amended and Restated Company
Guaranty, dated as of the Effective Date, duly executed and delivered to the
Administrative Agent by the Company, which Guaranty amends and restates the
Company's obligations as a guarantor under the Borrower Guaranty, dated as of
July 3, 1997, as amended, to which it is a party, as the same may be amended,
supplemented or otherwise modified from time to time.
"Company Pledge Agreement" means the Amended and Restated
Company Pledge Agreement, dated as of the Effective Date, duly executed and
delivered to the Administrative Agent by the Company, which Pledge Agreement
amends and restates the Company's obligations as a pledgor under the Borrower
Pledge Agreement, dated as of November 21, 1994, as amended, to which it is a
party, as the same may be amended, supplemented or otherwise modified from
time to time.
"Company Security Agreement" means the Amended and Restated
Company Security Agreement, dated as of the Effective Date, duly executed and
delivered to the Administrative Agent by the Company, which Security Agreement
amends and restates the Company's obligations as a grantor under the Borrower
Security Agreement, dated as of November 21, 1994, as amended, to which it is
a party, as the same may be amended, supplemented or otherwise modified from
time to time.
"Company's Projections" means the consolidated financial
projections dated November 3, 1998 prepared by the Company with respect to the
Company and its Subsidiaries on an annual basis for Fiscal Years 1999 through
2008, and supporting materials delivered in connection therewith delivered by
the Company to the Lenders on or prior to the Effective Date.
"Compliance Certificate" is defined in Section 7.01(d).
"Consolidated Cash Interest Expense" means, for any period on a
consolidated basis for any Person and its Subsidiaries, all of the following
as determined in conformity with GAAP, (i) total interest expense (including
the interest component of Capital Lease obligations for such period),
including, without limitation, bank fees, commissions, discounts and other fees
and charges owed with respect to letters of credit (including, without
limitation, the Letter of Credit Fee but excluding customary fees and charges
with respect to the issuance, administration, amendment and payment or
cancellation of letters of credit), interest expense capitalized during such
period and net interest costs under Interest Rate Contracts, minus (ii) to the
extent included in the determination of total interest expense, the sum of
(A) the amount of financing costs and expenses which are capitalized and
amortized, (B) amortization of debt discount, (C) interest paid in Property
other than cash, (D) any other interest expense not payable in cash and
(E) cash payments made to purchase interest rate caps, collars or similar
derivatives for any period and the amortized portion of such payments, minus
(iii) the sum of (A) any interest income received in respect of its
Investments in cash and Cash Equivalents and (B) to the extent not deducted
from total interest expense, any net payments received during such period
under Interest Rate Contracts.
"Consolidated Current Assets" means, at any time, the current
assets of the Company and its Subsidiaries on a consolidated basis, determined
in conformity with GAAP.
"Consolidated Current Liabilities" means, at any time, the
current liabilities of the Company and its Subsidiaries on a consolidated
basis, determined in conformity with GAAP.
"Consolidated Fixed Charges" means, for any period on a
consolidated basis for any Person and its Subsidiaries, the sum of the amounts
for such period of (i) Consolidated Cash Interest Expense of such Person and
its Subsidiaries and (ii) scheduled payments of principal on Funded Debt of
such Person and its Subsidiaries (including, without limitation, the principal
component of Capital Lease obligations and, in the case of the Company, the
Term Loans and excluding any scheduled reductions of the Revolving Credit
Commitments pursuant to Section 3.01(c)).
"Consolidated Net Income" means, for any period on a
consolidated basis for any Person and its Subsidiaries, the net income (or
loss) after taxes for such period taken as a single accounting period,
determined in conformity with GAAP.
"Consolidated Net Worth" means, with respect to any Person, at
any time, (i) consolidated stockholders' equity of such Person and its
consolidated Subsidiaries plus (or minus) (ii) any negative (or positive)
cumulative foreign currency translation adjustments applicable to such Person
in accordance with GAAP minus (iii) to the extent included in stockholders'
equity, minority interests in such Person's Subsidiaries held by Persons other
than such Person.
"Constituent Document" means, with respect to any entity,
(i) the articles/certificate of incorporation (or the equivalent
organizational documents) of such entity, (ii) the bylaws (or the equivalent
governing documents) of such entity and (iii) any document setting forth the
designation, amount and/or relative rights, limitations and preferences of any
class or series of such entity's Capital Stock.
"Contaminant" means any pollutant, hazardous substance,
radioactive substance, toxic substance, hazardous waste, radioactive waste,
special waste, petroleum or petroleum-derived substance or waste, asbestos,
polychlorinated biphenyls (PCBs), or any hazardous or toxic constituent
thereof, as these terms are defined under Environmental, Health or Safety
Requirements of Law.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument to which that Person is a party or by
which it or any of its Properties is bound, or to which it or any of its
Properties is subject.
"Contribution Agreement" means the Amended and Restated
Contribution Agreement, dated as of the Effective Date, duly executed and
delivered to the Administrative Agent by each of the Subsidiary Guarantors,
which Contribution Agreement amends and restates each Subsidiary Guarantor's
obligations under the Amended and Restated Contribution Agreement, dated as of
July 10, 1997, as amended, to which each is a party, as the same may be
amended, supplemented or otherwise modified from time to time.
"Cure Loans" is defined in Section 3.02(b)(v)(C).
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement.
"Customary Permitted Liens" means Liens on the Property of any
Person (other than Environmental Liens and Liens in favor of the PBGC)
(i) with respect to the payment of taxes, assessments or
governmental charges or levies in all cases which are not yet due or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained
in accordance with GAAP;
(ii) of landlords arising by statute and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen, banker's liens and
other Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with GAAP;
(iii) incurred or pledges and deposits made in the ordinary
course of business in connection with worker's compensation, unemployment
insurance, pensions or other types of social security benefits, or to secure
the performance of statutory obligations or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money),
surety, warranty, advance payment, appeal, customs, performance bonds and
similar obligations;
(iv) arising with respect to zoning restrictions, licenses,
covenants, building restrictions and other similar charges or encumbrances on
the use of Real Property of such Person which do not materially interfere with
the ordinary conduct of such Person's business;
(v) any interest or title of a lessor under any lease permitted
hereunder;
(vi) any interest or title of any lessee under any leases or
subleases of Real Property of such Person, provided that all such Liens do not
in the aggregate materially detract from the value of such Person's Property
or materially impair the use thereof in the operation of the businesses;
(vii) constituting the filing of notice financing statements of
a lessor's rights in and to personal Property leased to such Person in the
ordinary course of such Person's business;
(viii) attachment, prejudgment or judgment Liens in existence
less than 60 days after the entry thereof or with respect to which execution
has been stayed or with respect to which payment in full above any applicable
deductible is covered by insurance or a bond or, with respect to any
prejudgment Lien, the underlying claim for which is being contested in good
faith and for which reserves or other appropriate provisions, if any, as
required by GAAP have been made;
(ix) Liens incurred to secure any surety bonds, appeal bonds,
supersedeas bonds or other instruments serving a similar purpose in connection
with the appeal of any judgment or defense of any claim relating to a
prejudgment Lien; and
(x) defects and irregularities in titles, survey exceptions,
encumbrances, easements or reservations of others for rights-of-way, roads,
pipelines, railroad crossings, services, utilities or other similar purposes;
outstanding mineral rights or reservations (including rights with respect to
the removal of material resource) which do not materially diminish the value
of the surface estate, assuming usage of such surface estate similar to that
being carried on by the Company or its Subsidiaries as of the Effective Date.
"Decision Period" is defined in Section 8.07.
"Decision Reserve" is defined in Section 8.07.
"Default" means an event which, with the giving of notice or
the lapse of time, or both, would constitute an Event of Default.
"Default Notice", with respect to any Collection Account, has
the meaning specified in the Collection Account Agreement governing such
Collection Account.
"Disbursement Account" means account number 5555930 of the
Company at First Chicago, or such other bank account as shall subsequently be
designated as the Disbursement Account of the Company by notice to the
Administrative Agent.
"DLJ" is defined in the preamble.
"DLJ Commitment Letter" means the Commitment Letters and
accompanying Fee Letter, each dated as of March 20, 1998, as amended by letter
agreement dated as of August 17, 1998, issued by (i) DLJ Capital Funding, Inc.
and Donaldson, Lufkin & Jenrette Securities Corporation in favor of DLJ
Merchant Banking II, Inc., (ii) various Investors in favor of MergerSub, and
(iii) DLJ Bridge Finance, Inc. in favor of DLJ Merchant Banking II, Inc.
"DLJMB Entities" means DLJ Merchant Banking Partners II, L.P.,
DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P., DLJ
Diversified PartnersA, L.P., DLJ ESC II, L.P., DLJ First ESC L.P., DLJ
Millennium Partners, L.P., DLJ Millennium PartnersA, L.P. and DLJ Merchant
Banking Partners IIA, L.P.
"Documentation Agent" is defined in the preamble to this
Agreement.
"DOL" means the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" mean the lawful money of the United States.
"Dollar Equivalent" means, with respect to any Alternative
Currency at the time of determination thereof, the equivalent of such currency
in Dollars determined at the rate of exchange quoted by (i) the Administrative
Agent in Chicago, Illinois at 11:00 a.m. (Chicago time) on the date of
determination, to prime banks in New York City for the spot purchase in the
New York foreign exchange market of such amount of Dollars with such
Alternative Currency or, (ii) solely for purposes of any determination made by
First Chicago London pursuant to the last sentence of Section 2.02(a), First
Chicago London, in London, England at 12:00 noon (London time) on the date of
determination, to prime banks in London for the spot purchase in the London
foreign exchange market of such amount of Dollars with such Alternative
Currency.
"Domestic Lending Office" means, with respect to any Lender,
such Lender's office, located in the United States, specified as the "Domestic
Lending Office" under its name on Schedule 1.01 or on the Assignment and
Acceptance by which it became a Lender or such other United States office of
such Lender as it may from time to time specify by written notice to the
Company and the Administrative Agent.
"Domestic Subsidiary" means a Subsidiary of the Company which
is organized and existing under the laws of the United States of America, any
State thereof, the District of Columbia, Puerto Rico or the United States
Virgin Islands.
"EBITDA" means, for any applicable period, subject to
Section 1.03, the sum (without duplication) for the Company and its
Subsidiaries on a consolidated basis of
(a) Consolidated Net Income (less equity income from
unconsolidated Affiliates to the extent included in the determination of
Consolidated Net Income), plus
(b) the amount deducted in determining Consolidated Net Income
representing (i) net non-cash periodic post-retirement benefits and
(ii) non-cash charges or expenses, including depreciation, amortization
expense and non-cash expenses related to employee stock options and stock
incentive plans, plus
(c) the amount deducted in determining Consolidated Net Income
representing income taxes (whether paid or deferred), plus
(d) the amount deducted in determining Consolidated Net Income
representing (i) total interest expense and (ii) fees, expenses and management
bonuses and financing costs incurred in connection with the Recapitalization
Transactions and the transactions contemplated in the 1998 Subordinated Notes
and this Agreement, plus
(e) the amount deducted in determining Consolidated Net Income
representing any net loss realized in connection with any sale, lease,
conveyance or other disposition of any asset (other than in the ordinary
course of business from the Company or any of its Subsidiaries to the Company
or any of its Subsidiaries) or any extraordinary or non-recurring loss, plus
(f) the amount of cash dividends received by the Company or
any Subsidiary Guarantor from unconsolidated Affiliates of the Company (in
excess of the amount of any cash capital contributions made by the Company or
any Subsidiary Guarantor to such Affiliates), minus
(g) Restricted Junior Payments of the type referred to in
clause (viii) of Section 9.06 made during such period, minus
(h) the amount added in determining Consolidated Net Income
representing (i) any net gain in excess of $5,000,000 in any Fiscal Year
realized in connection with any sale, lease, conveyance or other disposition
of any asset (other than in the ordinary course of business from the Company
or any of its Subsidiaries to the Company or any of its Subsidiaries) or any
extraordinary or non-recurring gain and (ii) any non-cash items increasing
Consolidated Net Income.
"Effective Date" is defined in Section 5.01.
"Eligible Assignee" means (i) a Lender or any Affiliate
thereof; (ii) a commercial bank having total assets in excess of
$1,000,000,000; (iii) a finance company, insurance company, other financial
institution or fund, reasonably acceptable to the Administrative Agent and
approved by the Company (which approval shall not be unreasonably withheld),
which is regularly engaged in making or purchasing loans; (iv) a savings and
loan association or savings bank organized under the laws of the United States
or any state thereof having total assets in excess of $500,000,000; or (v) a
finance company, insurance company, bank, other financial institution or fund
reasonably acceptable to the Administrative Agent and approved by the Company,
which approval shall not be unreasonably withheld. In addition to the
foregoing, an Eligible Assignee must be an "accredited investor" or "qualified
institutional buyer" (as defined in Regulation D and Rule 144A, respectively,
under the Securities Act) to the extent it is not a bank or other financial
institution regularly engaged in making commercial loans.
"Environmental, Health or Safety Requirements of Law" means
all Requirements of Law relating to or addressing the environment, health or
safety, including but not limited to any law, regulation, or order relating to
the use, handling, or disposal of any Contaminant, any law, regulation, or
order relating to Remedial Action and any law, regulation, or order relating to
workplace or worker safety and health, each as from time to time hereafter in
effect.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for any (i) liabilities arising under any Environmental, Health or
Safety Requirements of Law, or (ii) damages arising from, or costs incurred by
such Governmental Authority in response to, a Release or threatened Release of
a Contaminant into the environment.
"Environmental Property Transfer Acts" means any applicable
Requirement of Law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the closure of any Property or the
transfer, mortgage, sale or lease of any Property or deed or title for any
Property for environmental reasons, including, but not limited to, any
so-called "Environmental Cleanup Responsibility Acts" or "Responsible Transfer
Acts".
"Equipment" means, with respect to any Person, all of such
Person's present and future (i) equipment, including, without limitation,
machinery, manufacturing, distribution, selling, data processing and office
equipment, assembly systems, tools, molds, dies, fixtures, appliances,
furniture, furnishings, vehicles, vessels, aircraft, aircraft engines, and
trade fixtures, (ii) other tangible personal Property (other than such
Person's Inventory), and (iii) any and all accessions, parts and appurtenances
attached to any of the foregoing or used in connection therewith, and any
substitutions therefor and replacements, products and proceeds thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means any (i) corporation which is a member
of the same controlled group of corporations (within the meaning of Section
414(b) of the Internal Revenue Code) as the Company, (ii) partnership or other
trade or business (whether or not incorporated) under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with the Company,
and (iii) member of the same affiliated service group (within the meaning of
section 414(m) of the Internal Revenue Code) as the Company, any corporation
described in clause (i) above or any partnership or trade or business
described in clause (ii) above.
"Eurocurrency Affiliate" means, with respect to each Lender,
the Affiliate of such Lender (if any) set forth below such Lender's name under
the heading "Eurocurrency Affiliate" on the signature pages hereof or on the
Assignment and Acceptance by which it became a Lender or such Affiliate of a
Lender as it may from time to time specify by written notice to the Company
and the Administrative Agent.
"Eurocurrency Interest Payment Date" means (i) with respect to
any Eurocurrency Rate Loan, the last day of each Eurocurrency Interest Period
applicable to such Loan and (ii) with respect to any Eurocurrency Rate Loan
having a Eurocurrency Interest Period in excess of three (3) calendar months,
the last day of each three (3) calendar month interval during such
Eurocurrency Interest Period.
"Eurocurrency Interest Period" is defined in Section 4.02(b).
"Eurocurrency Interest Rate Determination Date" is defined in
Section 4.02(c).
"Eurocurrency Lending Office" means, with respect to any
Lender, the office or offices of such Lender (if any) set forth below such
Lender's name under the heading "Eurocurrency Lending Office" on Schedule 1.01
or on the Assignment and Acceptance by which it became a Lender or such office
or offices of such Lender as it may from time to time specify by written
notice to the Company and the Administrative Agent.
"Eurocurrency Rate" shall mean, with respect to any
Eurocurrency Interest Period applicable to a Borrowing of Eurocurrency Rate
Loans, an interest rate per annum determined by dividing (A) the interest rate
per annum obtained by the Administrative Agent by reference to "Telerate page
3750" or "Telerate page 3740", as appropriate (or if such page on such service
ceases to display such information, such other page as may replace it on that
service for the purpose of display of such information) to be the rate per
annum at which deposits in Dollars or in the applicable Alternative Currency
are offered to leading banks in the London interbank market at approximately
11:00 a.m. (London time) on the Eurocurrency Interest Rate Determination Date
for a period equal to such Eurocurrency Interest Period (rounded upward to the
nearest whole multiple of one-hundredth of one percent (0.01%)) by (B) a
percentage equal to 100% minus the Eurocurrency Reserve Percentage; provided,
however, that if Telerate page 3750 or 3740, as the case may be, is not
available for any reason, the applicable Eurocurrency Rate shall be an
interest rate per annum obtained by dividing (A) the interest rate per annum
obtained by the Administrative Agent by reference to Reuters Screen FRBD to be
the rate per annum at which deposits in Dollars or in the applicable
Alternative Currency are offered to leading banks in the London interbank
market at approximately 11:00 a.m. (London time) on the Eurocurrency Interest
Rate Determination Date for a period equal to such Eurocurrency Interest
Period (rounded upward to the nearest whole multiple of one-hundredth of one
percent (0.01%)) by (B) a percentage equal to 100% minus the Eurocurrency
Reserve Percentage. The Eurocurrency Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve
Percentage. For purposes of this definition, "Telerate page 3750" means the
display designated as "Page 3750", and "Telerate page 3740" means the display
designated as "Page 3740", in each case on the Telerate Service (or such other
page as may replace Page 3750 or Page 3740 on the service as may be nominated
by the British Bankers' Association as the information vendor for the purpose
of displaying British Bankers' Association Interest Settlement Rates for
deposits in the currency concerned).
"Eurocurrency Rate Loans" means those Loans denominated in
Dollars or in an Alternative Currency which bear interest at a rate determined
by reference to the Eurocurrency Rate and the Applicable Eurocurrency Rate
Margin as provided in Section 4.01(a).
"Eurocurrency Reserve Percentage" means, for any day, (i) that
percentage which is in effect on such day, as prescribed by the Federal
Reserve Board for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in Chicago,
Illinois with deposits exceeding one billion Dollars in respect of
"Certificate of Deposit Liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurocurrency Rate Loans is determined or any category of extensions of credit
or other assets which includes loans by a nonUnited States office of any bank
to United States residents) and (ii) solely in respect of Loans denominated in
pounds sterling, the Associated Costs Rate.
"Event of Default" means any of the occurrences set forth in
Section 11.01 after the expiration of any applicable grace period and the
giving of any applicable notice, in each case as expressly provided in Section
11.01.
"Excess Cash Flow" means for any Cash Flow Period (without
duplication), an amount (not less than zero) equal to
(a) EBITDA for such Cash Flow Period; minus
(b) the sum, without duplication (for such Cash Flow Period) of
() Consolidated Cash Interest Expense for such Cash Flow
Period; plus
() scheduled payments, and optional and mandatory
prepayments to the extent actually made or required to be
made, of the principal amount of the Term Loans and any
other Funded Debt and mandatory prepayments of the
principal amount of Revolving Loans pursuant to Section
3.01(b) in connection with a permanent reduction of the
Revolving Credit Commitments, in each case to the extent
actually made and for such applicable period; plus
() all federal, state and foreign income taxes paid or
payable in cash by the Company and its Subsidiaries in such
Cash Flow Period; plus
() Capital Expenditures actually made during such Cash
Flow Period (excluding that portion of Capital Expenditures
financed by Capitalized Leases or purchase money
Indebtedness pursuant to Section 9.01(vi); plus
() the amount of the net increase (if any) of
Consolidated Current Assets, other than Investments in cash
and Cash Equivalents, over Consolidated Current Liabilities
of the Company and its Subsidiaries for such Cash Flow
Period; plus
() Investments permitted and actually made in cash
pursuant to clauses (iv)(A), (v)(A), (vi), (ix), and (x) of
Section 9.04 during such Cash Flow Period; plus
() gains on sales of assets (other than sales permitted
under clause (i) of Section 9.02); plus
() Restricted Junior Payments of the type described in
clause (viii) of Section 9.06 made during such Cash Flow
Period; plus
() amounts paid in cash in respect of periodic post-
retirement benefits (whether or not previously accrued)
during such Cash Flow Period; plus
() amounts paid in cash in respect of fees, expenses
and management bonuses and financing costs during such Cash
Flow Period in connection with the Recapitalization
Transactions and the transactions contemplated in the 1998
Subordinated Notes and this Agreement; plus
() amounts paid in cash in respect of any net loss
realized in connection with any sale, lease, conveyance or
other disposition of any asset (other than in the ordinary
course of business from the Company or any of its
Subsidiaries to the Company or any of its Subsidiaries) or
any extraordinary or non-recurring loss; plus
() long-term liabilities (other than the Obligations
and other Funded Debt) actually paid in cash by the Company
and its Subsidiaries during such Cash Flow Period.
"Existing Administrative Agent" is defined in the preamble.
"Existing Credit Agreement" is defined in the preamble.
"Existing Issuing Banks" is defined in the preamble.
"Existing Lender" is defined in the preamble.
"Fair Market Value" means, (i) with respect to any Property
(other than Property covered in clauses (ii), (iii) and (iv) below) of any
Person, the value of the consideration obtainable in a sale or other
disposition of such Property in the open market, assuming a sale by a willing
seller to a willing purchaser dealing at arm's length and arranged in an
orderly manner over a reasonable period of time, each having reasonable
knowledge of the nature and characteristics of such Property, neither being
under any compulsion to act and such transaction has been approved by the
board of directors of such Person, (ii) with respect to Property, the value of
the consideration obtainable in a sale or other disposition of such Property
as determined (A) in good faith by the board of directors of such Person or
(B) by an appraisal of such Property, provided that such appraisal was
performed relatively contemporaneously with such determination of the fair
market value by an independent third party appraiser and the basic assumptions
underlying such appraisal have not materially changed since the date thereof,
(iii) with respect to any Property for which the consideration for such sale
or other disposition is less than $500,000, as reflected on the bill of sale
or invoice or in the relevant contract for the same or (iv) with respect to
any marketable security at any date, the market price of such security at the
time of sale, or in a private transaction, the closing price of such security
on the business day (on which any national securities exchange is open for the
normal transaction of business) next preceding such date, as appearing in any
published list of any national securities exchange or in the National Market
List of the National Association of Securities Dealers, Inc. or, if there is
no such closing price of such security, the final price for the purchase of
such security at face value quoted on such business day by a financial
institution of recognized standing which regularly deals in securities of such
type.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published for
such day (or, if such day is not a Business Day in Chicago, Illinois, for the
next preceding Business Day) in Chicago, Illinois by the Federal Reserve Bank
of Chicago, or if such rate is not so published for any day which is a
Business Day in Chicago, Illinois, the average of the quotations for such day
on such transactions received by from three federal funds brokers of
recognized standing selected by the Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any Governmental Authority succeeding to its
functions.
"First Chicago" is defined in the preamble.
"First Chicago London" means The First National Bank of
Chicago, London Branch.
"Fiscal Year" means the fiscal year of the Company, which
shall be the 12month period ending on December 31 of each calendar year.
"Fixed Charge Coverage Ratio" means, with respect to any
period, the ratio of (i) EBITDA of the Company and its Subsidiaries for such
period, minus Capital Expenditures of the Company and its Subsidiaries during
such period (excluding Capital Expenditures financed by Capital Leases or
purchase money Indebtedness pursuant to Section 9.01(vi)), to
(ii) Consolidated Fixed Charges of the Company and its Subsidiaries for such
period. For purposes of determining the Fixed Charge Coverage Ratio on an
historical pro forma basis in connection with clause (i) of the definition of
Permitted Acquisition, only Capital Expenditures of the acquired operations
that are made for maintenance purposes shall be subtracted from EBITDA
pursuant to clause (i) of this definition.
"Foreign Borrower" is defined in the preamble and included any
Wholly Owned Foreign Subsidiary designated by the Company and approved by the
Requisite Lenders pursuant to Section 2.07.
"Foreign Borrower Sublimit" means (i) with respect to Insilco
GmbH, $15,000,000 and (ii) with respect to any other Foreign Borrower, the
amount designated by the Company as such Borrower's "Foreign Borrower
Sublimit" and approved by the Requisite Lenders pursuant to Section 2.07.
"Foreign Employee Benefit Plan" means any employee benefit
plan as defined in Section 3(3) of ERISA which is maintained or contributed to
for the benefit of the employees of the Company, any of its Subsidiaries or
any of its ERISA Affiliates, but which is not covered by ERISA pursuant to
ERISA Section 4(b)(4).
"Foreign Pension Plan" means any Foreign Employee Benefit Plan
which, under applicable local law, is required to be funded through a trust or
other funding vehicle.
"Foreign Subsidiary" means any Subsidiary of the Company other
than a Domestic Subsidiary.
"Funded Debt" means, to the extent the following would be
reflected on a consolidated balance sheet of the Company and its Subsidiaries
prepared in accordance with GAAP, the principal amount of all Indebtedness of
the Company and its Subsidiaries in respect of borrowed money, evidenced by
debt securities, debentures, acceptances, notes or other similar instruments,
in respect of Capital Lease Obligations, in respect of Reimbursement
Obligations or in respect of the deferred purchase price of Property or
services, except (i) accounts payable and accrued expenses arising in the
ordinary course of business and (ii) payment obligations owing to Governmental
Authorities or other Persons (excluding the principal portion owing to trade
creditors) subject to the Plan of Reorganization.
"Funding Date" means, with respect to any Loan, the date of
the funding of such Loan.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board,
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board or in such other statements by such other entity as
may be in general use by significant segments of the accounting profession as
in effect from time to time (unless otherwise specified pursuant to Section
13.04).
"General Intangibles" means, with respect to any Person, all
of such Person's present and future choses in action, causes of action, and
all other intangible personal Property of every kind and nature (other than
Receivables), including, without limitation, corporate, partnership and other
business records, inventions, designs, patents, patent applications,
trademarks, trademark applications, trade names, trade secrets, goodwill,
registrations, copyrights, licenses, franchises, customer lists, tax refunds,
tax refund claims, rights and claims against carriers, shippers, franchisees,
lessors, and lessees, and rights to indemnification.
"Governmental Authority" means any federal, state or local
government or other political subdivision and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to such government or political subdivision.
"Guarantor" means Holdco, the Company and each Subsidiary
Guarantor.
"Holdco" means Insilco Holding Co., a Delaware corporation.
"Holdco Discount Notes" means the Senior Discount Notes due
2008 of Holdco, with respect to which no cash interest shall be payable during
the first five years after the issuance thereof, issued by Holdco and governed
by the terms of the Holdco Discount Note Indenture.
"Holdco Discount Note Indenture" means the Indenture dated as
of August 17, 1998 entered into between Holdco and the trustee thereunder, as
the same may be amended, supplemented or otherwise modified from time to time.
"Holdco Guaranty" means the Amended and Restated Guaranty
dated as of the Effective Date duly executed and delivered to the
Administrative Agent by Holdco, which Guaranty amends and restates Holdco's
obligations as a guarantor under the Amended and Restated Guaranty, dated as
of August 17, 1998, to which it is a party, as the same may be amended,
supplemented or otherwise modified from time to time.
"Holdco Loan" means a loan made by Holdco to the Company from
proceeds of the dividend made by the Company to Holdco pursuant to clause (vi)
of the definition of Recapitalization Transactions, which loan is subordinated
to the Obligations pursuant to the Holdco Guaranty and shall payable on
demand, subject to such subordination and to the restrictions on the payment
of principal and interest thereon contained in Section 9.06(viii).
"Holdco Pledge Agreement" means the Amended and Restated Pledge
Agreement, dated as of the Effective Date, between Holdco and the
Administrative Agent, which Pledge Agreement amends and restates Holdco's
obligations as a pledgor under the Pledge Agreement, dated as of August 17,
1998, as amended, to which it is a party, as the same may be amended,
supplemented or otherwise modified from time to time.
"Holdco Securities" means (i) the Holdco Discount Notes and
(ii) the preferred stock issued pursuant to the Certificate of Designations,
Preferences and Rights of 15% Senior Exchangeable Preferred Stock Due 2010,
dated August 17, 1998 or any Securities issued in exchange for such preferred
stock, in each case, with respect to which no cash interest or cash dividends
shall be payable during the first five years after August 17, 1998.
"Holdco Security Agreement" means the Amended and Restated
Security Agreement, dated as of the Effective Date, between Holdco and the
Administrative Agent, which Security Agreement amends and restates Holdco's
obligations as a grantor under the Amended and Restated Security Agreement,
dated as of August 17, 1998, as amended, to which it is a party, as the same
may be amended, supplemented or otherwise modified from time to time.
"Holder" means any Person entitled to the benefits of the
Collateral as security for any of the Obligations, including, without
limitation, the Administrative Agent, the CoAgents, each Lender and each
Issuing Bank.
"Indebtedness", as applied to any Person, means, at any time
(without duplication), (a) all indebtedness, obligations or other liabilities
of such Person (i) for borrowed money or evidenced by debt securities,
debentures, acceptances, notes or other similar instruments, and any accrued
interest, fees and charges relating thereto, (ii) under profit payment
agreements or in respect of obligations to redeem, repurchase or exchange any
Securities of such Person or to pay dividends in respect of any Capital Stock,
(iii) with respect to letters of credit issued for such Person's account,
(iv) to pay the deferred purchase price of Property or services, except
accounts payable and accrued expenses arising in the ordinary course of
business, (v) in respect of Capital Leases or (vi) for payment of obligations
owing to Governmental Authorities or other Persons (other than for obligations
to trade creditors that arose prior to the effective date of the Plan of
Reorganization in the ordinary course of business) subject to the Plan of
Reorganization; (b) all indebtedness, obligations or other liabilities of such
Person or others secured by a Lien on any Property of such Person, whether or
not such indebtedness, obligations or liabilities are assumed by such Person,
all as of such time; (c) all indebtedness, obligations or other liabilities of
such Person in respect of Interest Rate Contracts and Currency Agreements, net
of liabilities owed to such Person by the counterparties thereon; and (d) the
guarantee (other than by endorsement of negotiable instruments for collection
in the ordinary course of business), direct or indirect, of all or any part of
the indebtedness, obligations or liabilities referred to in clauses (a)
through (c) above.
"Indemnitee" is defined in Section 13.03.
"Indemnified Matter" is defined in Section 13.03.
"Insilco GmbH" is defined in the preamble.
"Interbank Rate" means, for any period, (i) in respect of
Revolving Loans denominated in Dollars, the Federal Funds Rate, and (ii) in
respect of Multicurrency Loans, First Chicago London's costs of funds for such
period.
"Interest Coverage Ratio" means, with respect to any period,
the ratio of (i) EBITDA of the Company and its Subsidiaries for such period to
(ii) Consolidated Cash Interest Expense of the Company and its Subsidiaries
for such period.
"Interest Rate Contracts" means interest rate exchange, swap,
collar or cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, any
successor statute and any regulations or guidance promulgated thereunder.
"Inventory" means, with respect to any Person, all of such
Person's present and future (i) inventory (including unbilled accounts
receivable), (ii) goods, merchandise and other personal Property of such
Person furnished or to be furnished under any contract of service or intended
for sale or lease, and all goods consigned by such Person and all other items
which have previously constituted Equipment but are then currently being held
for sale or lease in the ordinary course of such Person's business, (iii) raw
materials, work-in-process and finished goods, (iv) materials and supplies of
any kind, nature or description used or consumed in such Person's business or
in connection with the manufacture, production, packing, shipping,
advertising, finishing or sale of any of the Property of such Person described
in clauses (i) through (iii) above, (v) goods in which such Person has a joint
or other interest to the extent of such Person's interest therein or right of
any kind (including, without limitation, goods in which such Person has an
interest or right as consignee), and (vi) goods which are returned to or
repossessed by such Person; in each case whether in the possession of such
Person, a bailee, a consignee, or any other Person for sale, storage, transit,
processing, use or otherwise, and any and all documents for or relating to any
of the foregoing.
"Investment" means, with respect to any Person, (i) any
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities issued by or other equity ownership interest in any
other Person, (ii) any purchase by that Person of all or a significant part of
the Property of a business conducted by another Person, and (iii) any loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable and similar items
made or incurred in the ordinary course of business as presently conducted),
or capital contribution by that Person to any other Person, including all
Indebtedness to such Person arising from a sale of Property by such Person
other than in the ordinary course of its business.
"Investors" means the DLJMB Entities and their respective
Affiliates and 399 Venture Partners, Inc., a wholly-owned Subsidiary of
Citicorp.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to the functions thereof.
"Issue" means, with respect to any Letter of Credit, either to
issue, or to extend the expiry of, or to renew, or to increase the amount of,
such Letter of Credit, and the terms "Issued" and "Issuance" shall have
corresponding meanings.
"Issuing Banks" means First Chicago and each other Lender (or
Affiliate of a Lender) selected by the Company and reasonably acceptable to
the Administrative Agent who has agreed to become an Issuing Bank for the
purpose of issuing Letters of Credit pursuant to Section 2.04 and, solely with
respect to Letters of Credit issued by Star Bank, N.A. prior to the Effective
Date, Star Bank, N.A. (it being understood and agreed that Star Bank, N.A.
shall cease to be a party to this Agreement after all of such Letters of
Credit have either terminated or expired).
"Lazard Agreement" means that certain engagement letter dated
as of March 12, 1998 between the Company and Lazard Freres & Co. LLC, as the
same may be amended, supplemented or otherwise modified from time to time.
"Leases" means those leases, tenancies or occupancies of Real
Property entered into by the Company or one of its Subsidiaries, as tenant,
sublessor or sublessee either directly or as the successor in interest to the
Company or any of the Domestic Subsidiaries.
"Lender" means, as of the Effective Date, each institution
which is a signatory hereto and identified as such and, at any other given
time, each institution which is a party hereto as a Lender, whether as a
signatory hereto or pursuant to an Assignment and Acceptance.
"Letter Agreement" means, collectively, (i) the fee letter
dated November 10, 1998 from First Chicago and accepted and agreed to by the
Company on November 10, 1998 and (ii) the fee letter dated October 30, 1998
from the Syndication Agent and the Arranger and accepted and agreed to by the
Company on October 30, 1998.
"Letter of Credit" means any Commercial Letter of Credit or
Standby Letter of Credit.
"Letter of Credit Availability" means, at any particular time,
the amount by which the Letter of Credit Sublimit exceeds the Letter of Credit
Obligations outstanding at such time.
"Letter of Credit Fee" is defined in Section 4.03(a).
"Letter of Credit Obligations" means, at any particular time,
the sum of (i) all outstanding Reimbursement Obligations, plus (ii) the
aggregate undrawn face amount of all outstanding Letters of Credit, plus
(iii) the aggregate face amount of all Letters of Credit requested by the
Borrowers but not yet issued (unless the request for an unissued Letter of
Credit has been denied pursuant to Section 2.04(c)(i)). For purposes of
determining the amount of Letter of Credit Obligations (or any component
thereof) in respect of any Letter of Credit that is denominated in an
Alternative Currency, such amount shall equal the Dollar Equivalent of the
amount of such Alternative Currency at the time of determination thereof.
"Letter of Credit Reimbursement Agreement" means, with respect
to a Letter of Credit, such form of application therefor and form of
reimbursement agreement therefor (whether in a single or several documents,
taken together) as the Issuing Bank from which the Letter of Credit is
requested may employ in the ordinary course of business for its own account,
with such modifications thereto as may be agreed upon by the Issuing Bank and
the Borrower requesting such Letter of Credit and as are not materially
adverse (in the judgment of the Issuing Bank) to the interests of the Lenders;
provided, however, in the event of any conflict between the terms hereof and
of any Letter of Credit Reimbursement Agreement, the terms hereof shall
control.
"Letter of Credit Sublimit" means Fifty Million Dollars
($50,000,000).
"Leverage Ratio" means, for any period, the ratio of Funded
Debt of the Company and its Subsidiaries on a consolidated basis as of the end
of such period to EBITDA of the Company and its Subsidiaries for such period.
"Liabilities and Costs" means all liabilities, obligations,
responsibilities, losses and damages with respect to or arising out of any of
the following: personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton injury,
damage or threat to the environment or public health or welfare, costs and
expenses (including, without limitation, attorney, expert and consulting fees
and costs of investigation, feasibility or Remedial Action studies), fines,
penalties and monetary sanctions, voluntary disclosures made to, or
settlements with, the United States Government, direct or indirect, known or
unknown, absolute or contingent, past, present or future, including interest,
if any, thereon.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale agreement, security interest,
encumbrance, lien (statutory or other), priority or other security agreement
(including, without limitation, any negative pledge arrangement outside of the
ordinary course of business and any agreement to provide equal and ratable
security) of any kind or nature whatsoever in respect of any Property of a
Person intended to assure payment of any Indebtedness, obligation or other
liability, whether granted voluntarily or imposed by law, and includes the
interest of a lessor under a Capital Lease or under any financing lease having
substantially the same economic effect as any of the foregoing and the filing
of any financing statement or similar notice (other than a financing statement
filed by a "true" lessor pursuant to Section 9408 of the Uniform Commercial
Code), naming the lessee of such property as debtor, under the Uniform
Commercial Code or other comparable law of any jurisdiction.
"Loan Account" is defined in Section 2.05(b).
"Loan Documents" means this Agreement, the Notes, the Letter
Agreement, the Letter of Credit Reimbursement Agreements, the Holdco Security
Agreement, the Holdco Pledge Agreement, the Holdco Guaranty, the Company
Guaranty, the Company Pledge Agreement, the Company Security Agreement, the
Subsidiary Guaranty, each Subsidiary Security Agreement, the Signal Pledge
Agreement, the Contribution Agreement, the Patent Security Agreements, the
Trademark Security Agreements, the Mortgages, the documents executed or
delivered pursuant to Section 5.01(a) of the Existing Credit Agreement and the
Credit Agreement amended thereby and Section 5.01(a) of this Agreement by
Holdco, the Borrowers, any Subsidiary Guarantor or any other Subsidiary of the
Company, any Interest Rate Contracts or Currency Agreements to which any
Lender or any Affiliate of a Lender is a party, and all other instruments,
agreements and written Contractual Obligations between Holdco, the Company or
any Subsidiary of the Company, on the one hand, and any of the Administrative
Agent, either CoAgent, the Lenders or the Issuing Banks, on the other hand, in
each case delivered to either the Administrative Agent, a CoAgent, such Lender
or such Issuing Bank pursuant to or in connection with this Agreement or the
Revolving Credit Commitments (it being understood that Loan Documents do not
include agreements relating to the opening and maintenance of bank accounts
with financial institutions that are also Lenders hereunder entered into by
the Company or any of the Company's Subsidiaries in the ordinary course of
business).
"Loans" means all the Term Loans, the Revolving Loans, the
Swing Loans and all Base Rate Loans and Eurocurrency Rate Loans.
"Margin Stock" means "margin stock" as such term is defined in
Regulation U.
"Material Adverse Effect" means a material adverse effect upon
(i) the business, condition (financial or otherwise), operations, performance,
Property or prospects of the Company and its Subsidiaries taken as a whole,
(ii) the ability of Holdco, the Borrowers and the Subsidiary Guarantors to
perform their obligations under the Loan Documents or (iii) the rights and
remedies of the Lenders, the Issuing Banks or the Administrative Agent under
the Loan Documents.
"Maximum Revolving Credit Amount" means, at any particular
time, an amount equal to the Revolving Credit Commitments, less the amount of
the Non-Facility Letter of Credit Reserve in effect at such time and less the
amount of the Decision Reserve in effect at such time.
"Maximum NonGuarantor Subsidiary Investment Amount" means, at
any time (without duplication) an amount equal to (i) the sum of (A) the
amount of all cash Investments of the Company or any Subsidiary Guarantor, or
which the Company or any Subsidiary Guarantor is under a Contractual
Obligation to make, since the Effective Date in, (B) the aggregate outstanding
amount of all Accommodation Obligations (including, without limitation,
Letters of Credit and Non-Facility Letters of Credit but excluding Permitted
Existing Accommodation Obligations) of the Company or any Subsidiary Guarantor
at such time in respect of obligations of, and (C) the Fair Market Value of
all Property (other than cash) of the Company or any Subsidiary Guarantor
contributed, sold or otherwise transferred since the Effective Date (other
than the sale of Inventory made in the ordinary course of business on
commercially reasonable terms (but in no event greater than 60 day terms) and
on an arms length basis) to, any Non-Guarantor Domestic Subsidiary, Permitted
Joint Venture or Foreign Subsidiary minus (ii) the sum of (A) any cash
dividends, other cash distributions or cash repayments of Indebtedness owing
to the Company or any Subsidiary Guarantor (but not intercompany loans to the
Company or any Subsidiary Guarantor) received by the Company or any Subsidiary
Guarantor since the Effective Date (x) from any Non-Guarantor Domestic
Subsidiary, Permitted Joint Venture or Foreign Subsidiary or (y) in respect of
any Permitted Existing Investment (other than the Company's Investment in the
Subsidiary Guarantors), and (B) cash proceeds of asset sales received by the
Company in respect of the Capital Stock of or Property (other than cash)
transferred to any such Non-Guarantor Domestic Subsidiary, Permitted Joint
Venture or Foreign Subsidiary since the Effective Date.
"Merger Agreement" means the MergerSub Merger Agreement.
"Merger Documents" means the Merger Agreement, each
certificate of merger executed in connection with the Merger Agreement, the
Holdco Discount Note Indenture, the Holdco Discount Notes, the agreements or
certificates of designation evidencing or governing the terms of the Holdco
Securities (other than the Holdco Discount Notes) issued on August 17, 1998
(or exchangeable for Holdco Securities issued on August 17, 1998), the
Subscription Agreement, certain warrants for the purchase of MergerSub common
stock to acquire Holdco common stock issued in connection with the issuance by
Holdco of the Holdco Securities on August 17, 1998, the Warrant Registration
Rights Agreement, dated as of August 17, 1998, between Holdco and National
City Bank, as warrant agent, the Voting Agreement, the Lazard Agreement, the
DLJ Commitment Letters, the Registration Rights Agreement, the amendment or
other agreements entered into in respect of the Company's Value Appreciation
Agreement, amendments to management incentive plans or employee compensation
plans, and all other documents entered into or filed by Holdco, the Company
and any of the Company's Subsidiaries in connection with the transactions
contemplated in the Merger Agreement.
"Mergers" means, collectively, the Reorganization Merger and
the MergerSub Merger.
"MergerSub" means Silkworm Acquisition Corporation, a Delaware
corporation, the outstanding Capital Stock of which is held by the Investors.
"MergerSub Merger" means the merger of MergerSub with and into
Holdco, with Holdco being the surviving corporation, pursuant to the terms of
the Merger Agreement.
"MergerSub Merger Agreement" means the Agreement and Plan of
Merger dated as of March 24, 1998 among the Company, Holdco and MergerSub, as
amended by Amendment No. 1 dated as of June 8, 1998 and Amendment No. 2 dated
as of August 12, 1998, as the same may be further amended, supplemented or
otherwise modified from time to time.
"Mortgages" means the mortgages, deeds of trust, leasehold
mortgages or other such documents executed by the Company and certain
Subsidiary Guarantors in favor of the Administrative Agent relating to such
Person's Real Property, as amended on the Effective Date, and as the same may
be further amended, supplemented or otherwise modified from time to time.
"Multicurrency Lender" means each Revolving Credit Lender that
is not a Non-Participating Multicurrency Lender.
"Multicurrency Loan" means a Revolving Loan made in an
Alternative Currency.
"Multicurrency Pro Rata Share" is defined in Section
2.02(c)(iv).
"Multicurrency Sublimit" means, with respect to Revolving
Credit Obligations denominated in an Alternative Currency, a maximum aggregate
outstanding amount of such Revolving Credit Obligations, the Dollar Equivalent
of which shall not exceed $40,000,000.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA which is, or within the immediately preceding
six (6) years was, contributed to by either the Company or any ERISA Affiliate.
"NAIC" means the National Association of Insurance
Commissioners.
"Net Cash Proceeds" means (i) proceeds received by Holdco, any
Borrower or any of the Company's Subsidiaries in cash or Cash Equivalents from
the sale (including, without limitation, any Sale and Leaseback Transaction),
assignment or other disposition of any Property of Holdco, such Borrower or
any such Subsidiary, other than sales, assignments and other dispositions
permitted under clauses (i), (iii), (iv), (v) and (vi) of Section 9.02, net of
(A) the cash costs and expenses of sale, assignment or other disposition and
(B) taxes paid or payable as a result thereof; provided that, at the request
of the Administrative Agent, evidence of each of (A) and (B) are provided to
the Administrative Agent; (ii) proceeds of insurance on account of the loss of
or damage to any such Property, and payments of compensation for any such
Property taken by condemnation or eminent domain, to the extent such proceeds
or payments are required pursuant to Section 8.07 to be applied to prepay the
Loans, and (iii) proceeds received after August 17, 1998 by Holdco, any
Borrower or any of the Company's Subsidiaries in cash or Cash Equivalents from
(A) the issuance of any Capital Stock by Holdco, such Borrower or any such
Subsidiary (other than (1) any such issuance occurring in the ordinary course
of business to any past or present member of the management or board of
directors of Holdco, such Borrower or such Subsidiary in connection with such
Person's employment or service with Holdco, such Borrower or such Subsidiary,
(2) any such issuance occurring in connection with an Investment made by the
Company or any such Subsidiary in any Subsidiary of the Company, (3) any such
issuance described in Section 9.06(ii) or made in connection with the
Recapitalization Transactions, (4) any such issuance made to the Investors
(other than pursuant to a public offering) or (5) any such issuance (other
than pursuant to a public offering) made to existing shareholders of Holdco
(other than the Investors), but only to the extent such proceeds arising
therefrom do not exceed $5,000,000 in the aggregate since the Effective Date),
or any other additions to the equity of Holdco or the Company (other than
retained earnings) or any contributions to capital of Holdco or the Company
(other than any such additions to equity or contributions to capital made by
the Investors (other than pursuant to a public offering)) or (B) issuance of
any Indebtedness by Holdco, such Borrower or any Domestic Subsidiary (except
for Indebtedness of Holdco in respect of the Holdco Securities, such
Indebtedness or Accommodation Obligations permitted under Sections 9.01 and
9.05 and any such Indebtedness incurred in connection with Currency Agreements
or Interest Rate Contracts to the extent such Borrower is permitted to enter
into such contracts pursuant to the terms hereof), in each case net of
reasonable costs incurred in connection with such transaction; provided that,
upon the request of the Administrative Agent, evidence of such costs is
provided to the Administrative Agent; provided, however, Net Cash Proceeds
received by any Foreign Subsidiary shall be reduced by (i) that portion of
such proceeds which such Foreign Subsidiary is not permitted to dividend or
lend to a Borrower (for the purpose of making any mandatory prepayment
pursuant to Section 3.01(b)) pursuant to any applicable Requirement of Law of
the jurisdiction in which such Foreign Subsidiary is organized and (ii) an
amount determined in good faith by the Company which would otherwise result in
a loss of greater than 20% of such Net Cash Proceeds as a result of
unfavorable tax or foreign exchange treatment applicable to such Subsidiary,
provided that, in either case, no such reduction shall apply to any Foreign
Borrower to the extent it has Loans outstanding that can be repaid directly
with such Net Cash Proceeds.
"1998 Subordinated Notes" means the 12% Senior Subordinated
Notes Due 2007 in an aggregate outstanding principal amount not to exceed
$120,000,000 issued by the Company and governed by the terms of the 1998
Subordinated Note Indenture.
"1998 Subordinated Note Indenture" means the Indenture, dated
as of November 9, 1998, entered into between the Company and Star Bank, N.A.,
as trustee, as the same may be amended, supplemented or otherwise modified
from time to time.
"NonFacility Letter of Credit" means any letter of credit
issued on an unsecured basis from a financial institution other than any
Issuing Bank for the account of a Borrower.
"NonFacility Letter of Credit Reserve" means a reserve
established by notice of the Company pursuant to Section 9.01(iii) against
Revolving Credit Availability in an amount equal to the aggregate face amount
of all outstanding NonFacility Letters of Credit issued in excess of those
NonFacility Letters of Credit permitted pursuant to Section 9.01(xiii).
"NonGuarantor Domestic Subsidiary" means any Domestic
Subsidiary (other than any Subsidiary Guarantor).
"NonParticipating Multicurrency Lender" means the Lenders
party to this Agreement on the Effective Date identified on Schedule 1.01 as
"Non-Participating Multicurrency Lenders" or any other Lender becoming a party
to this Agreement after the Effective Date whose request for such designation
is consented to by the Company and the Administrative Agent.
"Non Pro Rata Loan" is defined in Section 3.02(b)(v).
"Note" is defined in Section 2.05(a).
"Notice of Borrowing" means a notice substantially in the form
of Exhibit B.
"Notice of Continuation/Conversion" means a notice
substantially in the form of Exhibit C.
"NPL" is defined in Section 6.01(o).
"Obligations" means, in each instance arising hereunder, under
the Notes or under any other Loan Document, all Loans, advances, debts,
liabilities, obligations, covenants and duties owing by any Borrower to the
Administrative Agent, either CoAgent, any Lender, any Issuing Bank, any
Affiliate of the Administrative Agent, either CoAgent, any Lender or any
Issuing Bank, or any Person entitled to indemnification pursuant to Section
13.03, of any kind or nature, present or future, whether or not evidenced by
any note, guaranty or other instrument, whether or not for the payment of
money, whether arising under or in connection with an Interest Rate Contract
with any Lender or any Affiliate of a Lender (to the extent otherwise permitted
hereunder), or by reason of an extension of credit, opening or amendment of a
Letter of Credit or payment of any draft drawn thereunder, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising and however acquired. The term includes,
without limitation, all interest, charges, expenses, fees, reasonable
attorneys' fees and disbursements and any other sum chargeable to any Borrower
hereunder or under any other Loan Document.
"Officer's Certificate" means, as to a corporation, a
certificate executed on behalf of such corporation by an officer or director
of such corporation.
"Operating Lease" means, as applied to any Person, any lease
of any Property (whether real, personal or mixed) by that Person as lessee
which is not a Capital Lease.
"Patent Security Agreements" means the Patent Security
Agreements, duly executed and delivered to the Administrative Agent by the
Company and each of Taylor Publishing Company, Signal, Signal Caribe, Inc.,
Stewart Connector Systems, Inc., Stewart Stamping Corporation, Steel Parts
Corporation and Great Lake, Inc., each dated as of November 21, 1994 (or, in
the case of Great Lake, Inc., July 10, 1997), as amended through the Effective
Date and as the same may be further amended, supplemented or otherwise modified
from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Permits" means any permit, approval, authorization license,
variance, or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Acquisition" means any acquisition of all or
substantially all of the Capital Stock of any Person or of all or
substantially all of the assets or operations of any Person (or division or
operating unit of any Person) by the Company or any Subsidiary, provided that:
() such acquisition is made at a time when, after giving
effect to such acquisition and the related financing thereof, (a) no
Default or Event of Default exists or would occur based upon a pro
forma historical calculation (as certified in an Officer's Certificate
delivered pursuant to Section 8.17) for the most recent twelve (12)
month period of the covenants set forth in Sections 10.02 (Minimum
Fixed Charge Coverage Ratio), 10.03 (Minimum Interest Coverage Ratio)
and 10.04 (Maximum Leverage Ratio) performed in accordance with GAAP
giving effect to the EBITDA of the acquired operations and any higher
levels of Indebtedness associated with the acquired operations,
together with interest thereon as though accrued for such twelve (12)
month period, and (b) after giving effect to such acquisition, the
Borrower or such Subsidiary Guarantor would remain Solvent;
() the acquired Person or post-merger Person, if the
acquisition is of Capital Stock, (a) to the extent required under
Sections 8.12 and 8.13 hereof, provides to the Administrative Agent a
Lien upon all of the Property of such acquired Person (except for Real
Property with respect to which no notice is given pursuant to Section
8.12) and otherwise complies with the requirements of Sections 8.12
and 8.13 and (b) executes and delivers such documentation as the
Administrative Agent deems appropriate with respect to intercompany
borrowings from the Company;
() if the acquisition is of Capital Stock, to the extent
required under Section 8.13 hereof, the Company or Subsidiary
Guarantor acquiring such Capital Stock provides the Administrative
Agent a Lien upon such Capital Stock pursuant to a pledge agreement in
form and substance satisfactory to the Administrative Agent;
() to the extent required under Section 8.12 and Section 8.13
hereof, the acquired assets are subject to Liens in favor of the
Administrative Agent for the benefit of the Administrative Agent, the
CoAgents, the Issuing Banks and the Lenders and are free and clear of
all other Liens except as permitted under Section 9.03;
() the Company delivers written notice to the Administrative
Agent and the Lenders of its or its Subsidiary's intention to make
such acquisition no less than five (5) Business Days prior to the
proposed closing date for such acquisition that sets forth, among
other things, information regarding liabilities and obligations with
respect to environmental matters to be incurred by the Company or any
Subsidiary of the Company (including, without limitation, the acquired
Person in the event of an acquisition of Capital Stock) as a result of
such acquisition, any indemnities afforded under the terms of such
acquisition and the scope and results of any environmental review
undertaken by the Company in connection therewith;
() the sum for any Permitted Acquisition of (a) the cash
purchase price thereof, including any deferred purchase price, plus
(b) the reasonably estimated transaction costs associated with such
acquisition, plus (c) the amount of Indebtedness for borrowed money
assumed (directly or indirectly) as a result thereof, plus the Fair
Market Value of that portion of the purchase price payable in common
equity of Holdco shall not exceed $50,000,000 for any single Permitted
Acquisition and shall not exceed $100,000,000 in the aggregate for all
Permitted Acquisitions consummated after the Effective Date;
() on the date of the closing of the Permitted Acquisition and
after giving effect thereto and to any Revolving Loans made to finance
such Permitted Acquisition, (i) no Default or Event of Default shall
have occurred and be continuing and (ii) all representations and
warranties under the Loan Documents shall be true and correct in all
material respects as though made on and as of such date, except to the
extent that any such representation or warranty expressly relates to
an earlier date;
() the consideration for the Permitted Acquisition shall
have been paid only (i) in cash, (ii) in common equity of Holdco or
(iii) in deferred installment payments provided that any indebtedness
incurred in connection therewith is permitted pursuant to Section
9.01(xv); and
() after giving effect to the acquisition, such acquired
Person shall either (i) become a Subsidiary of the Company or of any
Subsidiary Guarantor or (ii) be merged with and into the Company or
any Subsidiary Guarantor; provided that if such acquired Person is a
non-U.S. entity, such acquired Person may become a Foreign Subsidiary.
"Permitted Existing Accommodation Obligations" means those
Accommodation Obligations of the Company and its Subsidiaries identified as
such on Schedule 1.01.1 and shall exclude Accommodation Obligations otherwise
permitted by Section 9.05 of this Agreement.
"Permitted Existing Indebtedness" means the Indebtedness of
the Company and its Subsidiaries identified as such on Schedule 1.01.2 and
shall exclude Indebtedness otherwise permitted by Section 9.01 of this
Agreement.
"Permitted Existing Investments" means those Investments of
the Company and the Domestic Subsidiaries on the Effective Date identified as
such on Schedule 1.01.3 and shall exclude Investments otherwise permitted by
Section 9.04 of this Agreement.
"Permitted Existing Liens" means the Liens on Property of the
Company or any of its Subsidiaries identified as such on Schedule 1.01.4 and
shall exclude Liens otherwise permitted by Section 9.03 of this Agreement.
"Permitted Joint Venture" means (i) Thermalex and (ii) any
other joint venture entered into by the Company or any Subsidiary Guarantor
with any other Person in the same or similar line of the Company's or such
Subsidiary Guarantor's business, which joint venture may be in the form of a
minority Investment in a partnership or corporation, a NonGuarantor Domestic
Subsidiary or an Foreign Subsidiary; provided, however, that the Company or
such Subsidiary Guarantor shall not, pursuant to such joint venture, be under
a Contractual Obligation to make cash contributions or incur Accommodation
Obligations after the initial formation thereof other than in fixed Dollar
amounts.
"Person" means any natural person, corporation, limited
partnership, limited liability company, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity,
and any Governmental Authority.
"Plan" means an employee pension benefit plan defined in
Section 3(2) of ERISA in respect of which the Company or any ERISA Affiliate
is, or within the immediately preceding three (3) years was, an "employer" as
defined in Section 3(5) of ERISA.
"Plan of Reorganization" means the Second Amended Plan of
Reorganization Jointly Proposed by the Company and certain of its Subsidiaries
and the Official Joint Committee of Unsecured Creditors as confirmed pursuant
to an order entered on November 24, 1992 by the bankruptcy court having
jurisdiction over the Company.
"Pledge and Assignment Agreement" means the Pledge and
Assignment Agreement dated as of March 3, 1997 between the Company and the
Administrative Agent, as the same may be amended, supplemented or otherwise
modified from time to time.
"Process Agent" is defined in Section 13.17.
"Property" means, with respect to any Person, any Real
Property or personal property, plant, building, facility, structure,
underground storage tank or unit, Equipment, Inventory, General Intangible,
Receivable, or other asset owned, leased or operated by such Person (including
any surface water thereon or adjacent thereto, and soil and groundwater
thereunder).
"Proposed Acquisitions" means the two proposed acquisitions
identified on page 8 of the Confidential Information Memorandum, dated
October 1998, distributed to the Lenders.
"Pro Rata Share" means, with respect to any Lender, (a) with
respect to Revolving Loans and Letters of Credit, the percentage obtained by
dividing (i) such Lender's Revolving Credit Commitment at such time by
(ii) the aggregate amount of all Revolving Credit Commitments at such time;
provided, however, if all of the Revolving Credit Commitments are terminated
pursuant to the terms hereof, then "Pro Rata Share" means, with respect to
Revolving Loans and Letters of Credit, the percentage obtained by dividing
(x) the sum of the aggregate amount of such Lender's Revolving Credit
Obligations by (y) the aggregate amount of all Revolving Credit Obligations,
and (b) with respect to Term Loans, the percentage obtained by dividing
(i) such Lender's Term Loan Commitment (or after the Effective Date, Term
Loans) by (ii) the aggregate amount of all Term Loan Commitments (or after the
Effective Date, Term Loans).
"Protective Advance" is defined in Section 12.09.
"Qualifying Lender" means, in respect of any Lender which is
or is entitled to receive payments under this Agreement from any Foreign
Borrower, any of the following:
(i) any institution which is a bank within the meaning given
by Section 840A of the Income and Corporation Taxes Act 1988,
which is beneficially entitled to interest payable under this
Agreement and subject to United Kingdom corporation tax in
respect of that interest;
(ii) any Lender which is an assignee of a Lender falling
within clause (i) above and is beneficially entitled to the
interest payable hereunder and subject to United Kingdom
corporation tax thereon; and
(iii) any Lender which, pursuant to the terms of a double tax
treaty as in force at the time that Lender becomes party to this
Agreement, is entitled to exemption from taxation in the United
Kingdom, or in the jurisdiction of its Applicable Lending Office
if other than the United Kingdom, in respect of the interest
payable hereunder and which at the time of the relevant interest
payment has made all appropriate filings and declarations in
order to obtain the benefit of those terms.
"Real Property" means, with respect to any Person, all of such
Person's present and future right, title and interest (including, without
limitation, any leasehold estate) in (i) any plots, pieces or parcels of land,
(ii) any improvements, buildings, structures and fixtures now or hereafter
located or erected thereon or attached thereto of every nature whatsoever (the
rights and interests described in clauses (i) and (ii) above being the
"Premises"), (iii) all easements, rights of way, gores of land or any lands
occupied by streets, ways, alleys, passages, sewer rights, water courses,
water rights and powers, and public places adjoining such land, and any other
interests in Property constituting appurtenances to the Premises, or which
hereafter shall in any way belong, relate or be appurtenant thereto, (iv) all
hereditaments, gas, oil, minerals (with the right to extract, sever and remove
such gas, oil and minerals), and easements, of every nature whatsoever,
located in or on the Premises and (v) all other rights and privileges thereunto
belonging or appertaining and all extensions, additions, improvements,
betterments, renewals, substitutions and replacements to or of any of the
rights and interests described in clauses (iii) and (iv) above.
"Recapitalization Transactions" means the transactions
contemplated in the Merger Documents and the Second Amendment to the Existing
Credit Agreement dated as of August 17, 1998.
"Receivables" means, with respect to any Person, all of such
Person's present and future (i) accounts, (ii) accounts receivable,
(iii) rights to payment for goods sold or leased or for services rendered
(except those evidenced by instruments or chattel paper), whether or not
earned by performance, (iv) all rights in any merchandise or goods which any
of the same may represent, and (v) all rights, title, security and guaranties
with respect to each of the foregoing, including, without limitation, any
right of stoppage in transit.
"Register" is defined in Section 13.01(c).
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of August 17, 1998 among Holdco, Donaldson, Lufkin &
Jenrette Securities Corporation and the other parties named therein.
"Regulation A" means Regulation A of the Federal Reserve Board
as in effect from time to time.
"Regulation D" means Regulation D of the Federal Reserve Board
as in effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.
"Reimbursement Date" is defined in Section 2.04(d)(i)(A).
"Reimbursement Obligations" means, as to any Borrower, the
aggregate non-contingent reimbursement or repayment obligations of such
Borrower with respect to amounts drawn under Letters of Credit Issued for the
account of such Borrower.
"Related Obligations" is defined in Section 12.09(f).
"Release" means release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment or into or out of any Property, including
the movement of Contaminants through or in the air, soil, surface water,
groundwater or Property.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way respond to Contaminants in the indoor or
outdoor environment; (ii) prevent the Release or threat of Release or minimize
the further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed and to design such a response and post-remedial
investigation, monitoring, operation and maintenance and care.
"Reorganization Merger" means the merger of ReorgSub with and
into the Company, with the Company being the surviving corporation, pursuant
to the terms of the Merger Agreement.
"ReorgSub" means Insilco ReorgSub Company, a Delaware
corporation and wholly-owned Subsidiary of Holdco.
"Reportable Event" means any of the events described in
Section 4043 of ERISA other than the events described in Regulation Sections
2615.13, 2615.14, 2615.18 and 2615.19 promulgated by the PBGC.
"Requirements of Law" means, as to any Person, the charter and
by-laws or other organizational or governing documents of such Person, and any
law, rule or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its Property or to which such Person or any of its Property is
subject including, without limitation, the Securities Act, the Securities
Exchange Act, Regulations U and X, ERISA, the Fair Labor Standards Act and any
certificate of occupancy, zoning ordinance, building, or land use requirement
or Permit or labor or employment rule or regulation.
"Requisite Lenders" means, at any time, Lenders holding, in
the aggregate, at least fifty-one percent (51%) of the sum of (i) the then
aggregate principal amount of the Term Loans outstanding at such time and
(ii) the then aggregate amount of the Revolving Credit Commitments in effect
at such time; provided, however, that, in the event any Revolving Credit
Lender shall have failed to fund its Pro Rata Share of any Revolving Loan
requested by a Borrower which such Lender is obligated to fund under the terms
hereof and any such failure has not been cured, then for so long as such
failure continues, "Requisite Lenders" means Lenders (excluding Revolving
Credit Lenders whose failure to fund their respective Pro Rata Share of such
Loans have not been so cured) whose Aggregate Pro Rata Shares represent at
least fifty-one percent (51%) of the Aggregate Pro Rata Shares of such
Lenders; provided, further, however, that, in the event that the Commitments
have been terminated pursuant to the terms hereof, "Requisite Lenders" means
Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose Aggregate Pro Rata Shares are at least fifty-one
percent (51%).
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of the Company or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in shares of that class of stock
or in any junior class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of
Capital Stock of the Company or any of its Subsidiaries now or hereafter
outstanding, (iii) any payment made to redeem, purchase, repurchase or retire,
or to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of the Company or any
of its Subsidiaries now or hereafter outstanding and (iv) any payment or
prepayment of principal of, premium, if any, or interest, fees or other
charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim to rescission with
respect to, any Indebtedness expressly subordinated in writing to the
Obligations.
"Revolving Credit Availability" means, at any particular time,
the amount by which the Maximum Revolving Credit Amount exceeds the Revolving
Credit Obligations outstanding at such time.
"Revolving Credit Commitment" means, with respect to any
Lender, the obligation of such Lender to make Revolving Loans and to
participate in Letters of Credit and Swing Loans pursuant to the terms and
conditions hereof, which obligation shall not exceed the principal amount set
forth opposite the heading "Revolving Credit Commitment" on Schedule 1.01 or
the signature page of the Assignment and Acceptance by which it became a
Lender, as modified from time to time pursuant to the terms hereof or to give
effect to any applicable Assignment and Acceptance, and "Revolving Credit
Commitments" means the aggregate principal amount of the Revolving Credit
Commitments of all the Lenders, the maximum aggregate principal amount of
which shall not exceed $175,000,000, as reduced from time to time pursuant to
the terms hereof.
"Revolving Credit Lender" is defined in Section 2.02(a).
"Revolving Credit Notes" means notes evidencing each
Borrower's Obligation to repay the Revolving Loans made to it.
"Revolving Credit Obligations" means, at any particular time,
the sum of (i) the outstanding principal amount of the Swing Loans at such
time, plus (ii) the outstanding principal amount of the Revolving Loans at
such time, plus (iii) the Letter of Credit Obligations outstanding at such
time plus (iv) the aggregate principal amount of Protective Advances
outstanding at such time. For purposes of determining the amount of Revolving
Credit Obligations (or any component thereof) in respect of any Revolving Loan
that is denominated in an Alternative Currency, such amount shall equal the
Dollar Equivalent of the amount of such Alternative Currency at the time of
determination thereof.
"Revolving Credit Termination Date" means the earlier to occur
of (i) the date of termination of the Revolving Credit Commitments pursuant to
the terms hereof and (ii) July 8, 2003.
"Revolving Loan" is defined in Section 2.02(a).
"Sale and Leaseback Transaction" means, with respect to any
Person, any direct or indirect arrangement pursuant to which Property of such
Person is sold or transferred by such Person or a Subsidiary of such Person
and is thereafter leased back from the purchaser thereof by such Person or one
of its Subsidiaries.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or any
certificates of interest, shares, or participation in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence
of the Obligations.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
"Signal" means Signal Transformer Co., Inc., a Delaware
corporation and subsidiary of the Company.
"Signal Pledge Agreement" means the Amended and Restated
Signal Pledge Agreement, dated as of the Effective Date, duly executed and
delivered to the Administrative Agent by Signal, which Pledge Agreement amends
and restates Signal's obligations as a pledgor under the Signal Pledge
Agreement, dated as of November 21, 1994, as amended, to which it is a party,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Solvent", when used with respect to any Person, means that at
the time of determination:
(i) the sum of its Properties at a fair valuation is greater
than the sum of its liabilities (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its Properties is
greater than its probable liability on its existing debts as such debts
become absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other
commitments) as they mature in the ordinary course of business; and
(iv) it is not engaged in a business or transaction and is not
about to engage in a business or transaction, for which its
Properties, including contractual lines of credit, and, with respect
to the Borrowers and the Subsidiary Guarantors, the ability of any
Borrower or any Subsidiary Guarantor to borrow money from the Company
or any Subsidiary of the Company, would constitute an unreasonably
small capital after giving due consideration to the prevailing
practice in the business in which it is engaged or about to engage.
The determination of whether a Person is Solvent shall take
into account all such Person's Properties and liabilities regardless of
whether, or the amount at which, any such Property or liability is included on
a balance sheet of such Person prepared in accordance with GAAP, including
Properties such as contingent contribution or subrogation rights, business
prospects, distribution channels and goodwill. The determination of the sum
of a Person's Properties at a fair valuation or the present fair saleable
value of a Person's Properties shall be made on a going concern basis unless,
at the time of such determination, the liquidation of the business in which
such Properties are used or useful is in process or is demonstrably imminent.
In computing the amount of contingent or unrealized Properties or contingent
or unliquidated liabilities at any time, such Properties and liabilities will
be computed at the amounts which, in light of all the facts and circumstances
existing at such time, represent the amount that reasonably can be expected to
become realized Properties or matured liabilities, as the case may be. In
computing the amount that would be required to pay a Person's probable
liability on its existing debts as they become absolute and matured,
reasonable valuation techniques, including a present value analysis, shall be
applied using such rates over such periods as are appropriate under the
circumstances, and it is understood that, in appropriate circumstances, the
present value of contingent liabilities may be zero.
"Standby Letter of Credit" means any letter of credit issued by
an Issuing Bank pursuant to Section 2.04 for the account of a Borrower, which
is not a Commercial Letter of Credit.
"Subordinated Notes" means the 10.25% Subordinated Notes due
2007 in an aggregate outstanding principal amount of $150,000,000 (less the
principal amount of such notes repurchased, repaid or defeased by the Company
pursuant to Section 9.06(v)) issued by the Company and governed by the terms
of the Subordinated Note Indenture.
"Subordinated Note Indenture" means the Indenture dated as of
August 12, 1997 entered into between the Company and The Bank of New York, as
trustee, as the same may be amended, supplemented or otherwise modified from
time to time.
"Subscription Agreement" means the Subscription Agreement dated
as of August 17, 1998 between Holdco and the investors party thereto, as the
same may be amended, supplemented or otherwise modified from time to time.
"Subsidiary" of a Person means any corporation or other entity
of which securities or other ownership interests having ordinary voting power
to elect a majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned or controlled
by such Person, one or more of the other subsidiaries of such Person or any
combination thereof; provided, however, for purposes of this definition the
term "Subsidiary" shall not include Thermalex.
"Subsidiary Guarantor" means each Domestic Subsidiary of the
Company party to the Subsidiary Guaranty (which shall include any Domestic
Subsidiary of the Company (other than Thermal Components, Inc.) with net
assets with an aggregate book value in excess of $5,000,000).
"Subsidiary Guaranty" means the Amended and Restated Subsidiary
Guaranty, dated as of the Effective Date, duly executed and delivered to the
Administrative Agent by each Subsidiary Guarantor, which Guaranty amends and
restates each Subsidiary Guarantor's obligations as a guarantor under the
Subsidiary Guaranty, dated as of November 21, 1994, as amended, to which each
is a party, as the same may be amended, supplemented or otherwise modified
from time to time.
"Subsidiary Security Agreements" means each Amended and
Restated Subsidiary Security Agreement, dated as of the Effective Date, duly
executed and delivered to the Administrative Agent by each Subsidiary
Guarantor, each of which Security Agreements amends and restates each
Subsidiary Guarantor's obligations as a grantor under its respective Subsidiary
Security Agreement, dated as of November 21, 1994 (or, in the case of Great
Lake, Inc., January 31, 1996, and, in the case of Thermal Components Division,
Inc., July 8, 1996), as amended, to which such Subsidiary Guarantor is a
party, as the same may be amended, supplemented or otherwise modified from
time to time.
"Survey" means a survey of the Real Property owned by the
Company or a Subsidiary Guarantor, dated no earlier than ninety (90) days
prior to the date of the delivery of mortgage or deed of trust on such
property in favor of the Administrative Agent pursuant to the terms hereof and
reasonably acceptable to the Administrative Agent.
"Swing Loan" is defined in Section 2.03(a).
"Swing Loan Bank" means First Chicago, in its individual
capacity or, in the event First Chicago is not the Administrative Agent, the
Administrative Agent (or any Affiliate of the Administrative Agent designated
by the Administrative Agent), in its individual capacity.
"Swing Loan Note" means one or more notes evidencing the
Company's Obligation to repay the Swing Loans.
"Syndication Agent" is defined in the preamble to this
Agreement.
"Taxes" is defined in Section 3.03(a).
"Termination Event" means (i) a Reportable Event with respect
to any Benefit Plan; (ii) the withdrawal of the Company or any ERISA Affiliate
from a Benefit Plan during a plan year in which the Company or such ERISA
Affiliate was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA or the cessation of operations which results in the termination of
employment of 20% of Benefit Plan participants who are employees of the
Company or any ERISA Affiliate; (iii) the imposition of an obligation on the
Company or any ERISA Affiliate under Section 4041 of ERISA to provide affected
parties written notice of intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the institution by the
PBGC or any similar foreign Governmental Authority of proceedings to terminate
a Benefit Plan or a Foreign Pension Plan; (v) any event or condition which
could reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Benefit Plan; (vi) a foreign Governmental Authority shall appoint or institute
proceedings to appoint a trustee to administer any Foreign Pension Plan; or
(vii) the partial or complete withdrawal of the Company or any ERISA Affiliate
from a Multiemployer Plan or a Foreign Pension Plan.
"Term Loans" is defined in Section 2.01(a).
"Term Loan Commitment" means, with respect to any Lender, the
obligation of such Lender to make Term Loans pursuant to the terms and
conditions hereof, and which shall not exceed the principal amount set forth
opposite such Lender's name under the heading "Term Loan Commitment" on
Schedule 1.01 or the signature page of the Assignment and Acceptance by which
it became a Lender, as modified from time to time pursuant to the terms hereof
or to give effect to any applicable Assignment and Acceptance, and "Term Loan
Commitments" means the aggregate principal amount of the Term Loan Commitments
of all the Lenders, the maximum aggregate principal amount of which shall not
exceed $125,000,000, as reduced from time to time pursuant to the terms hereof.
"Term Loan Lender" is defined in Section 2.01(a).
"Term Loan Maturity Date" means the seventh anniversary of the
Effective Date.
"Term Loan Notes" means notes evidencing the Company's
obligation to repay the Term Loans.
"Thermalex" means Thermalex, Inc., an Alabama corporation.
"Title Company" means Commonwealth Land Title Insurance Company.
"Title Policy" means an ALTA Mortgagee Policy (or equivalent)
of title insurance with extended coverage over the standard or general
exceptions and such endorsements reasonably required by the Administrative
Agent issued by the Title Company covering each parcel of Real Property of the
Company or any Subsidiary Guarantor included in the Collateral or required to
be so included pursuant to Section 8.12, showing title vested in either the
Company or such Subsidiary Guarantor subject only to the Liens set forth in
Section 9.03 herein, which Title Policy shall show the Administrative Agent as
the insured and an insurance amount equal to the lesser of the Commitments or
the book value of the Real Property covered by such Title Policy.
"Trademark Security Agreements" means the Trademark Security
Agreements, duly executed and delivered to the Administrative Agent by the
Company and each of Taylor Publishing Company, Signal, Signal Caribe, Inc.,
Stewart Connector Systems, Inc., Stewart Stamping Corporation, Steel Parts
Corporation and Great Lake, Inc., each dated as of November 21, 1994 (or, in
the case of Great Lake, Inc., July 10, 1997), as amended through the Effective
Date and as the same may be amended, supplemented or otherwise modified from
time to time.
"Type" means, with respect to any Loan, its nature as a
Eurocurrency Rate Loan or a Base Rate Loan.
"Uniform Commercial Code" means the Uniform Commercial Code as
enacted in the State of New York, as it may be amended from time to time.
"Unused Commitment Fee" is defined in Section 4.03(b).
"Unused Commitment Fee Rate" means at all times during the
applicable periods set forth below, the applicable rate per annum set forth
below under the heading "Unused Commitment Fee Rate":
Unused
Leverage Ratio Commitment Fee
-------------- --------------
greater than or equal to 5.00 to 1 0.625%
greater than or equal to 4.00 to 1
0.500%
less than 5.00 to 1
greater than or equal to 3.00 to 1
0.375%
less than 4.00 to 1
less than 3.00 to 1 0.250%
The Leverage Ratio used to compute the Unused Commitment Fee Rate following
the Effective Date shall be the Leverage Ratio set forth in the Compliance
Certificate most recently delivered by the Company to the Administrative Agent
pursuant to Section 7.01(d); changes in the Unused Commitment Fee Rate
resulting from a change in the Leverage Ratio shall become effective upon
delivery by the Company to the Administrative Agent of a new Compliance
Certificate pursuant to Section 7.01(d) and notice by the Company to the
Administrative Agent that a rate change is required. Notwithstanding anything
to the contrary set forth in this Agreement (including the then effective
Leverage Ratio), the Unused Commitment Fee Rate shall be 0.625% for the period
commencing on the Effective Date and ending on the delivery of a separate
Compliance Certificate in respect of the Company's fiscal month ending May 31,
1999. If the Company shall fail to deliver a Compliance Certificate within 50
days after the end of any fiscal month or quarter (or within 95 days, in the
case of the last fiscal quarter of any Fiscal Year) pursuant to Section
7.01(d), the Unused Commitment Fee Rate from and including the 51st (or 96th,
as the case may be) day after the end of such fiscal quarter to but not
including the date the Company delivers to the Administrative Agent a
Compliance Certificate shall conclusively equal the highest Unused Commitment
Fee Rate set forth above.
"Voting Agreement" means the Voting Agreement, dated as of
March 24, 1998, among MergerSub, the Company and Water Street Corporate
Recovery Fund I, L.P., as amended pursuant to an amendment dated as of June 8,
1998.
"Voting Stock" means, with respect to any Person, securities
with respect to any class or classes of Capital Stock of such Person entitling
the holders thereof ordinarily (and apart from rights arising under special
circumstances) to vote in the election of members of the board of directors of
such Person.
"Wholly Owned" means, with respect to a Subsidiary of a Person,
a Subsidiary of such Person, all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall
at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person.
"Y2K Compliance" means the ability of a computer program to
(i) record, store, process, calculate, present and, where appropriate, insert
accurate dates and calculations for calendar dates falling on or after (and,
if applicable, spans of time including) January 1, 2000, (ii) record, store,
process, calculate and present any information and/or data dependent on or
relating to such dates with the same functionality, data integrity and
performance, as the software records, stores, processes, calculates and
presents calendar dates on or before December 31, 1999 and in such fashion as
to respond to two-digit date input in a way that eliminates all ambiguities as
to the century of concern, and treats the year 2000 as a leap-year and
correctly and accurately regards and processes data and information with
respect thereto, and (iii) lose no functionality with respect to the
introduction of records, including but not limited to back-up and archived
information and/or data, containing dates falling on or after January 1, 2000
and "Y2K Compliant" has the correlative meaning.
1.0. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding". Periods of days referred to in this
Agreement shall be counted in calendar days unless Business Days are expressly
prescribed. Any period determined hereunder by reference to a month or months
or year or years shall end on the day in the relevant calendar month in the
relevant year, if applicable, immediately preceding the date numerically
corresponding to the first day of such period, provided that if such period
commences on the last day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month during which such period
is to end), such period shall, unless otherwise expressly required by the
other provisions of this Agreement, end on the last day of the calendar month.
1.0. Accounting Terms. Subject to Section 13.04, for purposes
of this Agreement, all accounting terms not otherwise defined herein shall
have the meanings assigned to them in conformity with GAAP. For purposes of
computing the Fixed Charge Coverage Ratio, Interest Coverage Ratio and
Leverage Ratio (and any financial calculations required to be made or included
within such ratios) as of the end of any fiscal quarter of any Fiscal Year, all
components of such ratios (other than Capital Expenditures) for the
twelve-month period ending at the end of such fiscal quarter shall include,
without duplication, such components of such ratios attributable to any
business or assets that have been acquired or disposed of by the Company or
any of its Subsidiaries (including through Permitted Acquisitions) after the
first day of such twelve-month period and prior to the end of such period, as
determined in good faith by the Company on a pro forma basis for such period
as if such acquisition or disposition had occurred on such first day of such
period (including, whether or not such inclusion would be permitted under GAAP
or Regulation S-X of the Securities and Exchange Commission, cost savings that
would have been realized had such acquisition or disposition occurred on such
day).
1.0. Other Definitional Provisions. References to the
"preamble", "Articles", "Sections", "subsections", "Schedules" and "Exhibits"
shall be to the preamble, Articles, Sections, subsections, Schedules and
Exhibits, respectively, of this Agreement unless otherwise specifically
provided. The words "hereby", "hereof", "herein", and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
1.0. Other Terms. All other terms contained herein shall,
unless the context indicates otherwise, have the meanings assigned to such
terms by the Uniform Commercial Code to the extent the same are defined
therein.
ARTICLE
AMOUNTS AND TERMS OF LOANS
2.0. The Term Loans. () Amount of Term Loans. Subject to
the terms and conditions set forth herein, each Lender with a Term Loan
Commitment ("Term Loan Lender") hereby severally and not jointly agrees to
make on the Effective Date, a Term Loan, in Dollars (and not in any
Alternative Currency), to the Company in an amount equal to such Lender's Term
Loan Commitment (each individually, a "Term Loan" and, collectively, the "Term
Loans"). All Term Loans shall be made by the Term Loan Lenders on the
Effective Date simultaneously and proportionately to their respective Pro Rata
Shares thereof.
() Notice of Borrowing in respect of Term Loans. The Company
shall deliver to the Administrative Agent a Notice of Borrowing, signed by it,
one Business Day prior to the Effective Date. Such Notice of Borrowing shall
specify (i) the aggregate amount of the Term Loans and (ii) instructions for
the disbursement of the proceeds of the Term Loans. The Term Loans shall
initially be Base Rate Loans and thereafter may be continued as Base Rate
Loans or converted into Eurocurrency Rate Loans in the manner provided in
Section 4.01(c) and subject to the conditions and limitations therein set
forth and set forth in Section 4.02. Any Notice of Borrowing given pursuant
to this Section 2.01(b) shall be irrevocable.
() Making of Term Loans. Promptly after receipt of the Notice
of Borrowing under Section 2.01(b) in respect of the Term Loans to be made on
the Effective Date, the Administrative Agent shall notify each Term Loan
Lender by telex or telecopy, or other similar form of transmission, of the
proposed Borrowing. Each Term Loan Lender shall deposit an amount equal to
its Pro Rata Share of the Term Loans with the Administrative Agent at its
office in Chicago, Illinois, in immediately available funds, on the Effective
Date specified in the Notice of Borrowing. Subject to the fulfillment of the
conditions precedent set forth in Section 5.01, the Administrative Agent shall
make the proceeds of such amounts received by it available to the Company at
the Administrative Agent's office in Chicago, Illinois on the Effective Date
and shall disburse such proceeds in accordance with the Company's disbursement
instructions set forth in such Notice of Borrowing. The failure of any Term
Loan Lender to deposit the amount described above with the Administrative
Agent on the Effective Date shall not relieve any other Lender of its
obligations hereunder to make its Term Loan on the Effective Date. No Term
Loan Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Term Loan hereunder nor shall the Term Loan
Commitment of any Term Loan Lender be increased or decreased as a result of
any such failure.
() Repayment of the Term Loans. Subject to the immediately
succeeding sentence, the Term Loans shall be repayable in twenty-eight (28)
consecutive quarterly installments due on the last day of each calendar
quarter beginning on March 31, 1999 with a final payment on the Term Loan
Maturity Date. Each of the first twenty-four installments of Term Loans shall
be in an amount equal to $312,500 and each of the last four installments of the
Term Loans shall be in an amount equal to $29,375,000; provided, however, the
last such installment due on the Term Loan Maturity Date shall be in an amount
equal to the then outstanding principal amount of the Term Loans.
In addition to the scheduled payments on the Term Loans, the
Company may make the voluntary prepayments described in Section 3.01(a)(i) and
shall make the mandatory prepayments prescribed in Section 3.01(b), for credit
against such scheduled payments on the Term Loans pursuant to Section
3.01(a)(i) or Section 3.01 (b)(vi), as applicable. Any amount paid in respect
of the Term Loans may not be reborrowed.
() Use of Proceeds of Term Loans. The proceeds of the Term
Loans shall be used (i) on the Effective Date to repay Revolving Loans then
outstanding under the Existing Credit Agreement, and (ii) from and after the
Effective Date, (A) to repurchase, redeem or defease Subordinated Notes to the
extent the purchase thereof is permitted under Section 9.06(v), (B) to pay the
purchase price of approximately $46,000,000 in connection with the Proposed
Acquisitions anticipated to be consummated within a short period of time after
the Effective Date (but only to the extent such acquisitions constitute
Permitted Acquisitions, transaction costs related thereto and transaction
costs under this Agreement), and (C) to fund working capital in the ordinary
course of business of the Company and its Subsidiaries and for other lawful
general corporate purposes not prohibited hereunder.
2.0. Revolving Credit Facility. () Subject to the terms and
conditions set forth herein, each Lender with a Revolving Credit Commitment
("Revolving Credit Lender") hereby severally and not jointly agrees to make
revolving loans, in Dollars or an Alternative Currency (each individually, a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrowers
from time to time during the period from the Effective Date to the Business
Day next preceding the Revolving Credit Termination Date, in an amount not to
exceed at any time outstanding such Lender's Revolving Credit Commitment at
such time; provided, that (i) the aggregate amount of the Revolving Loans made
to the Borrowers by each Revolving Credit Lender on a Funding Date shall not
exceed the Dollar amount of such Lender's Pro Rata Share of the Revolving
Credit Availability on such Funding Date, (ii) the aggregate outstanding amount
of Multicurrency Loans shall not exceed at any time the Multicurrency Sublimit
less the outstanding amount of Letter of Credit Obligations denominated in
Alternative Currencies and (iii) the aggregate outstanding amount of Revolving
Credit Obligations owing by any Foreign Borrower shall not exceed at any time
such Foreign Borrower's Foreign Borrower Sublimit in effect at such time. All
Revolving Loans comprising the same Borrowing hereunder shall be made by such
Revolving Credit Lenders simultaneously and proportionately to their then
respective Revolving Credit Commitments. Subject to the provisions hereof
(including, without limitation, Sections 3.01(a) and 5.02), any Borrower may
repay any outstanding Revolving Loan on any day which is a Business Day and
any amounts so repaid may be reborrowed, up to the amount available under this
Section 2.02(a) at the time of such Borrowing, until the Business Day next
preceding the Revolving Credit Termination Date. Borrowings of Revolving Loans
denominated in Dollars shall be in an aggregate minimum amount of $5,000,000
and integral multiples of $1,000,000 in excess of that amount. Borrowings of
Multicurrency Loans shall be Eurocurrency Loans denominated in a single
Alternative Currency in an aggregate minimum amount equal to an integral
multiple of 100,000 units in such Alternative Currency and (converted to the
Dollar Equivalent thereof) equal to or greater than $1,000,000. For the
purposes of determining compliance with this Section 2.02(a), the Dollar
Equivalent of a Multicurrency Loan in an Alternative Currency shall be
determined by First Chicago London upon receipt from the Company of the Notice
of Borrowing requesting such Multicurrency Loan, and such Dollar Equivalent
shall be recalculated on each date that it shall be necessary to determine the
unused portion of each Lender's Revolving Credit Commitment or any or all of
the Loans outstanding on such date. On the Effective Date (i) all Revolving
Loans outstanding on such date shall be repaid in full from proceeds of Term
Loans and/or new Revolving Loans made on such date, (ii) the Revolving Credit
Commitments shall be reduced from $200,000,000 to $175,000,000, (iii) that
portion of the Revolving Credit Commitments of the Existing Lenders that are
not a party to this Agreement in excess of $25,000,000 shall be deemed to be
assigned to the Revolving Credit Lenders party to this Agreement, and each
such Existing Lender shall cease to be a party to this Agreement, (iv) the
Revolving Credit Commitment of each Revolving Credit Lender party to the
Existing Credit Agreement that is a party to this Agreement shall be adjusted
from such Lender's Pro Rata Share (as defined in the Existing Credit
Agreement) of $200,000,000 to the amount set forth opposite such Lender's name
under the heading "Revolving Credit Commitment" on Schedule 1.01, and (v) each
Revolving Credit Lender becoming a party to this Agreement on the Effective
Date shall be deemed to have assumed from the Revolving Credit Lenders party
to the Existing Credit Agreement a Revolving Credit Commitment equal to the
amount set forth opposite such Lender's name under the heading "Revolving
Credit Commitment" on Schedule 1.01.
() Notice of Borrowing. When any Borrower desires to borrow
under this Section 2.02, the Company shall deliver to the Administrative Agent
(with a copy to First Chicago London, in the case of a Borrowing of
Multicurrency Loans) an irrevocable Notice of Borrowing, signed by it, (x) on
the Effective Date, in the case of a Borrowing of Revolving Loans on the
Effective Date and (y) no later than 11:00 a.m. (Chicago time) (or 2:00 p.m.
(London time) in the case of a Borrowing of Multicurrency Loans) (I) on the
Business Day immediately preceding the proposed Funding Date, in the case of a
Borrowing of Base Rate Loans after the Effective Date and (II) at least three
(3) Business Days in advance of the proposed Funding Date, in the case of a
Borrowing of Eurocurrency Rate Loans after the Effective Date. Such Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a
Business Day), (ii) the amount and currency of the proposed Borrowing,
(iii) the Revolving Credit Availability as of the date of such Notice of
Borrowing, (iv) whether the proposed Borrowing will be of Base Rate Loans or
Eurocurrency Rate Loans (it being understood and agreed that no Multicurrency
Loans may be made as Base Rate Loans), (v) in the case of Eurocurrency Rate
Loans, the requested Eurocurrency Interest Period, (vi) the Borrower making
such Borrowing, (vii) instructions for the disbursement of the proceeds of the
proposed Borrowing and (viii) whether the proposed Borrowing will be used for
the purpose of consummating a Permitted Acquisition. In lieu of delivering
such a Notice of Borrowing (except with respect to a Borrowing on the
Effective Date), the Company shall give the Administrative Agent (and First
Chicago London, in the case of a Borrowing of Multicurrency Loans) irrevocable
telephonic notice of any proposed Borrowing by the time required under this
Section 2.02(b), and shall confirm such notice by delivery of the Notice of
Borrowing by telecopy to the Administrative Agent (with a copy to First
Chicago London, in the case of a Borrowing of Multicurrency Loans) promptly,
but in no event later than 4:00 p.m. (Chicago time) on the same day. Any
Notice of Borrowing delivered in connection with a Permitted Acquisition shall
be accompanied by the Officer's Certificate required pursuant to Section
8.17(b).
() Making of Revolving Loans. () Promptly after receipt of a
Notice of Borrowing under Section 2.02(b) (or telephonic notice in lieu
thereof), the Administrative Agent shall notify each Revolving Credit Lender
by telex or telecopy, or other similar form of transmission, of the proposed
Borrowing. Each Revolving Credit Lender shall deposit an amount equal to its
Pro Rata Share of the amount requested by the Company to be made as Revolving
Loans, (A) in the case of a Borrowing in Dollars, with the Administrative
Agent at its office in Chicago, Illinois, in immediately available funds, and
(B) in the case of a Borrowing in an Alternative Currency, with First Chicago
London at its office in London, England in immediately available funds, in
either instance (1) on the Effective Date specified in the initial Notice of
Borrowing and (2) not later than 2:00 p.m. (Chicago or London time, as
applicable) on any other Funding Date applicable thereto. Subject to the
fulfillment of the conditions precedent set forth in Section 5.01 or Section
5.02, as applicable, the Administrative Agent or First Chicago London, as
applicable, shall make the proceeds of such amounts received by it available
to the applicable Borrower at the respective office of the Administrative
Agent or First Chicago London on such Funding Date (or on the date received if
later than such Funding Date) and shall disburse such proceeds to the
Disbursement Account or otherwise in accordance with the Company's
disbursement instructions set forth in the applicable Notice of Borrowing. The
failure of any Revolving Credit Lender to deposit the amount described above
with the Administrative Agent or First Chicago London on the applicable
Funding Date shall not relieve any other Revolving Credit Lender of its
obligations hereunder to make its Revolving Loan on such Funding Date. No
Revolving Credit Lender shall be responsible for any failure by any other
Revolving Credit Lender to perform its obligation to make a Revolving Loan
hereunder nor shall the Revolving Credit Commitment of any Revolving Credit
Lender be increased or decreased as a result of any such failure.
() Anything hereinabove to the contrary notwithstanding, if any
Revolving Credit Lender shall, not later than 10:00 a.m. (London time) two
Business Days before the date of any requested Borrowing of Multicurrency
Loans, notify the Administrative Agent that such Lender is not satisfied that
deposits in the relevant Alternative Currency will be freely available to it
in the relevant amount and for the relevant Eurocurrency Interest Period, the
right of the Borrowers to request Multicurrency Loans in such Alternative
Currency from such Lender as part of such Borrowing or any subsequent
Borrowing of Multicurrency Loans shall be suspended until such Lender shall
notify the Administrative Agent that the circumstances causing such suspension
no longer exist, and, at the option of the Borrowers, either (i) the
applicable Notice of Borrowing may be withdrawn and such Borrowing shall not
be made, or (ii) the Multicurrency Loan to be made by such Lender as part of
such Borrowing (and the Multicurrency Loan to be made by such Lender as part
of any subsequent Borrowing of Multicurrency Loans in respect of which such
Alternative Currency shall have been requested during such period of
suspension) shall be a Eurocurrency Rate Loan denominated in Dollars and
having an Eurocurrency Interest Period coextensive with the Eurocurrency
Interest Period in effect in respect of all other Multicurrency Loans
comprising a part of such Borrowing. If any Borrower elects to withdraw its
Notice of Borrowing, such Borrower shall be liable to each other Revolving
Credit Lender for any damages suffered on account thereof of a nature
described in Section 4.02(f). The Administrative Agent shall, upon receiving
notice from such Lender that the circumstances causing any such suspension no
longer apply, promptly so notify the Borrowers; provided, that the failure of
the Administrative Agent to so notify the Borrowers shall not impair the
rights of the Revolving Credit Lenders under this Section 2.02(c)(ii) or
expose the Administrative Agent to any liability.
() Unless the Administrative Agent shall have been notified by
any Revolving Credit Lender on the Business Day immediately preceding the
applicable Funding Date in respect of any Borrowing of Revolving Loans that
such Lender does not intend to fund its Revolving Loan requested to be made on
such Funding Date, the Administrative Agent may assume that such Lender has
funded its Revolving Loan and is depositing the proceeds thereof with the
Administrative Agent or First Chicago London, as applicable, on the Funding
Date, and the Administrative Agent or First Chicago London, as applicable, in
its sole discretion may, but shall not be obligated to, disburse a
corresponding amount to the applicable Borrower on the Funding Date. If the
Revolving Loan proceeds corresponding to that amount are advanced to the
applicable Borrower by the Administrative Agent or First Chicago London, as
applicable, but are not in fact deposited with the Administrative Agent or
First Chicago London, as applicable, by such Lender on or prior to the
applicable Funding Date, such Lender agrees to pay, and in addition the
applicable Borrower agrees to repay, to the Administrative Agent or First
Chicago London, as applicable, forthwith on demand such corresponding amount,
together with (x) interest thereon, for each day from the date such amount is
disbursed to or for the benefit of such Borrower until the date such amount is
paid or repaid to the Administrative Agent or First Chicago London, as
applicable, (A) in the case of such Borrower, at the interest rate applicable
to such Borrowing and (B) in the case of such Lender, at the Interbank Rate
for the first Business Day, and thereafter at the interest rate applicable to
such Borrowing and (y), in the case of a Borrowing in an Alternative Currency,
any other cost or loss suffered or incurred by First Chicago London in
connection therewith. If such Lender shall pay to the Administrative Agent
or First Chicago London, as applicable, the corresponding amount, the amount
so paid shall constitute such Lender's Revolving Loan, and if both such Lender
and such Borrower shall pay and repay such corresponding amount, the
Administrative Agent shall promptly pay to such Borrower such corresponding
amount. This Section 2.02(c)(ii) does not relieve any Revolving Credit Lender
of its obligation to make its Revolving Loan on any Funding Date.
(iv) Notwithstanding anything in this Section 2.02 to the
contrary, in the event a Borrower requests a Borrowing of Revolving Loans in
an Alternative Currency, those Revolving Credit Lenders that are
NonParticipating Multicurrency Lenders shall not be required to fund their Pro
Rata Shares of such Borrowing. Subject to the fulfillment of the conditions
precedent set forth in Section 5.01 or Section 5.02, as applicable, each
Multicurrency Lender agrees to fund an amount in such Alternative Currency
equal to its Multicurrency Pro Rata Share of such Borrowing; provided that in
no event shall such Lender's Multicurrency Pro Rata Share of the Dollar
Equivalent of all Multicurrency Loans (including such Borrowing) and Letter of
Credit Obligations denominated in an Alternative Currency, together with its
Pro Rata Share of all other outstanding Revolving Credit Obligations, exceed
such Lender's Revolving Credit Commitment in effect at such time or such
Lender's Pro Rata Share of the Maximum Revolving Credit Amount at such time.
For purposes of this clause (iv), "Multicurrency Pro Rata Share" means, with
respect to any Multicurrency Lender, the percentage obtained by dividing
(i) such Lender's Revolving Credit Commitment at such time by (ii) the
aggregate amount of all Revolving Credit Commitments of the Multicurrency
Lenders at such time.
() Use of Proceeds of Revolving Loans. The proceeds of the
Revolving Loans may be used (i) on the Effective Date to repay Revolving Loans
then outstanding under the Existing Credit Agreement, and (ii) from and after
the Effective Date (A) to pay the purchase price of any Permitted Acquisition
and other related transaction costs and expenses and to fund any refinancing
of Indebtedness in connection with a Permitted Acquisition as set forth and
certified in the Notice of Borrowing pertaining thereto, (B) to fund working
capital in the ordinary course of the business of the Company and its
Subsidiaries and (C) for other lawful general corporate purposes not
prohibited hereunder.
() Revolving Credit Termination Date. The Revolving Credit
Commitments shall terminate, and all outstanding Revolving Credit Obligations
shall be paid in full (or, in the case of unmatured Letter of Credit
Obligations, provision for payment of Cash Collateral shall be made to the
satisfaction of the Issuing Banks and the Administrative Agent), on the
Revolving Credit Termination Date. Each Lender's obligation to make Revolving
Loans shall terminate at the close of business in Chicago on the Business Day
next preceding the Revolving Credit Termination Date.
2.0. Swing Loans. () Availability. Subject to the terms and
conditions set forth herein, the Swing Loan Bank may, in its sole discretion,
make loans (the "Swing Loans") to the Company, from time to time during the
period from the Effective Date and at any time up to the Business Day next
preceding the Revolving Credit Termination Date, up to an aggregate principal
amount at any one time outstanding which shall not exceed an amount equal to
the lesser of (i) $10,000,000 and (ii) the Revolving Credit Availability at
such time. The Swing Loan Bank shall have no duty to make or to continue to
make Swing Loans. All Swing Loans shall be payable on demand with accrued
interest thereon and shall be secured as part of the Obligations by the
Collateral and shall otherwise be subject to all the terms and conditions
applicable to Revolving Loans, except that (x) Swing Loans shall not have a
minimum amount requirement, (y) all interest on the Swing Loans made by the
Swing Loan Bank shall be payable to the Swing Loan Bank solely for its own
account and (z) all Swing Loans shall be denominated in Dollars.
() Notice of Borrowing. When the Company desires to borrow
under this Section 2.03, it shall deliver to the Administrative Agent an
irrevocable Notice of Borrowing, signed by it, no later than 11:00 a.m.
(Chicago time) on the day of the proposed Borrowing of a Swing Loan. Such
Notice of Borrowing shall specify (i) the date of the proposed Borrowing
(which shall be a Business Day), (ii) the amount of the proposed Borrowing and
(iii) instructions for the disbursement of the proceeds of the proposed
Borrowing. Any Notice of Borrowing delivered pursuant to this Section 2.03(b)
shall be deemed to constitute a Notice of Borrowing under Section 2.02(b) in
the event the Administrative Agent determines in its sole discretion that a
Borrowing of Swing Loans is not possible or feasible. In lieu of delivering
such a Notice of Borrowing, the Company shall give the Administrative Agent
irrevocable telephonic notice of any proposed Borrowing by 12:00 noon on the
day of the proposed Borrowing, and shall confirm such notice by delivery of
the Notice of Borrowing by telecopy to the Administrative Agent promptly, but
in no event later than 2:00 p.m. (Chicago time) on the same day. All Swing
Loans shall be Base Rate Loans.
() Making of Swing Loans. The Swing Loan Bank shall deposit
the amount it intends to fund, if any, in respect of the Swing Loans requested
by the Company with the Administrative Agent at its office in Chicago,
Illinois not later than 1:00 p.m. (Chicago time) in immediately available
funds on the date of the proposed Borrowing applicable thereto. The Swing
Loan Bank shall not make any Swing Loan in the period commencing on the first
Business Day after it receives written notice from any Revolving Credit Lender
that one or more of the conditions precedent contained in Section 5.02 shall
not on such date be satisfied, and ending when such conditions are satisfied
or waived pursuant to Section 13.07 hereof, and the Swing Loan Bank shall not
otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Section 5.02 hereof have been satisfied in
connection with the making of any Swing Loan. Subject to the preceding
sentence, the Administrative Agent shall make such proceeds available to the
Company at the Administrative Agent's office in Chicago, Illinois on the date
of the proposed Borrowing and shall disburse such proceeds to the Disbursement
Account.
() Repayment of Swing Loans. The Company shall repay the
outstanding Swing Loans owing to the Swing Loan Bank (i) upon demand by the
Swing Loan Bank or, if no such demand is made, within seven (7) Business Days
after the Borrowing thereof and (ii) in any event, on the Revolving Credit
Termination Date. In the event that the Company fails to repay any Swing
Loans, together with interest thereon, as set forth in the first sentence of
this paragraph, then, upon the request of the Swing Loan Bank, each Revolving
Credit Lender shall make Revolving Loans to the Company (irrespective of the
satisfaction of the conditions in Section 5.02 or the requirement to deliver a
Notice of Borrowing in Section 2.02(b), which conditions and requirement such
Lenders irrevocably waive) in an amount equal to such Lender's Pro Rata Share
of the aggregate amount of the Swing Loans then outstanding (net of that
portion of such Swing Loan, if any, owing to such Lender in its capacity as a
Swing Loan Bank) after giving effect to any prepayments and repayments made by
the Company, and the Company hereby authorizes the Administrative Agent to
apply the proceeds of such Revolving Loans to the repayment of such Swing
Loans. To the extent the Administrative Agent receives any amounts in
prepayment or repayment of outstanding Revolving Loans prior to such request,
the Administrative Agent shall apply such amounts when received to the
repayment of the Swing Loans then outstanding. The failure of any Revolving
Credit Lender to make available to the Administrative Agent its Pro Rata Share
of such Revolving Loans shall not relieve any other Revolving Credit Lender of
its obligation hereunder to make available to the Administrative Agent such
other Lender's Pro Rata Share of such Revolving Loans on the date of such
request. No Revolving Credit Lender shall be responsible for any failure by
any other Revolving Credit Lender to perform its obligations to make such
Revolving Loans hereunder nor shall the Revolving Credit Commitment of any
Revolving Credit Lender be increased or decreased as a result of such failure.
() Use of Proceeds of Swing Loans. The proceeds of the Swing
Loans may be used for working capital in the ordinary course of the Company's
business and for lawful general corporate purposes of the Company not
prohibited hereunder.
2.0. Letters of Credit. Subject to the terms and conditions
set forth herein, each Issuing Bank hereby severally agrees to Issue for the
account of the Borrowers one or more Letters of Credit, up to an aggregate
face amount at any one time outstanding equal to the Letter of Credit
Availability, subject to the following provisions:
() Types and Amounts. An Issuing Bank shall not have any
obligation to Issue, and shall not Issue any Letter of Credit at any time:
() if the aggregate Letter of Credit Obligations with respect
to such Issuing Bank, after giving effect to the Issuance of the Letter of
Credit requested hereunder, shall exceed any limit imposed by law or
regulation upon such Issuing Bank;
() if the Issuing Bank receives written notice (A) from the
Administrative Agent at or before 10:00 a.m. (Chicago time) on the date of the
proposed Issuance of such Letter of Credit that immediately after giving
effect to the Issuance of such Letter of Credit, (1) the Revolving Credit
Obligations at such time would exceed the Maximum Revolving Credit Amount at
such time, (2) the undrawn face amount of the Letter of Credit Obligations
denominated in Alternative Currencies, when aggregated with all other
Revolving Credit Obligations denominated in Alternative Currencies, would
exceed the Multicurrency Sublimit, or (3) in the case such Letter of Credit is
being issued for the account of a Foreign Borrower, the Revolving Credit
Obligations owing by such Foreign Borrower at such time would exceed such
Foreign Borrower's Foreign Borrower Sublimit or (B) from any of the Revolving
Credit Lenders at or before 10:00 a.m. (Chicago time) on the date of the
proposed Issuance of such Letter of Credit that one or more of the conditions
precedent contained in Sections 5.01 or 5.02, as applicable, would not on such
date be satisfied (or waived pursuant to Section 13.07), unless such
conditions are thereafter satisfied or waived and written notice of such
satisfaction or waiver is given to the Issuing Bank by the Administrative
Agent (and an Issuing Bank shall not otherwise be required to determine that,
or take notice whether, the conditions precedent set forth in Sections 5.01 or
5.02, as applicable, have been satisfied or waived); or
() which has an expiration date later than the earlier of
(A) the date one (1) year after the date of issuance (without regard to any
renewal provisions thereof) or (B) the Revolving Credit Termination Date; or
() which is in a currency other than Dollars or an Alternative
Currency in which such Issuing Bank is then issuing letters of credit.
() Conditions. In addition to being subject to the
satisfaction of the conditions precedent contained in Sections 5.01 and 5.02,
as applicable, the obligation of an Issuing Bank to Issue any Letter of Credit
for the account of a Borrower is subject to the satisfaction in full of the
following conditions:
() if the Issuing Bank so requests, such Borrower shall have
executed and delivered to such Issuing Bank and the Administrative Agent a
Letter of Credit Reimbursement Agreement and such other documents and
materials as may be required pursuant to the terms thereof; and
() the terms of the proposed Letter of Credit shall be
satisfactory to the Issuing Bank in its sole discretion consistent with
commercial practices.
() Issuance of Letters of Credit. () The Company shall give
an Issuing Bank and the Administrative Agent written notice that it has
selected such Issuing Bank to Issue a Letter of Credit (A) not later than
10:00 a.m. (Chicago time) on the requested date (which shall be a Business
Day) for Issuance of any Letter of Credit denominated in Dollars and (B) not
later than 2:00 p.m. (London time) on the fourth Business Day preceding the
requested date (which shall be a Business Day) for Issuance of any Letter of
Credit denominated in an Alternative Currency. Such notice shall be
irrevocable unless and until such request is denied by the applicable Issuing
Bank and shall specify (A) that the requested Letter of Credit is either a
Commercial Letter of Credit or a Standby Letter of Credit, (B) the stated
amount and currency of the Letter of Credit requested, (C) the effective date
(which shall be a Business Day) of Issuance of such Letter of Credit, (D) the
date on which such Letter of Credit is to expire, (E) the Person for whose
benefit such Letter of Credit is to be Issued, (F) the Borrower for whose
account the requested Letter of Credit is to be Issued, (G) other relevant
terms of such Letter of Credit and (H) the amount of the then outstanding
Letter of Credit Obligations. Such Issuing Bank shall notify the
Administrative Agent immediately upon receipt of a written notice from the
Company requesting that a Letter of Credit be Issued and, upon the
Administrative Agent's request therefor, send a copy of such notice to the
Administrative Agent.
() The Issuing Bank shall give the Administrative Agent written
notice, or telephonic notice confirmed promptly thereafter in writing, of the
Issuance of a Letter of Credit (which notice the Administrative Agent shall
promptly transmit by telegram, telex, telecopy, telephone or similar
transmission to each Lender).
() Reimbursement Obligations; Duties of Issuing Banks.
() Notwithstanding any provisions to the contrary in any Letter of Credit
Reimbursement Agreement:
() the Borrower for whose account a Letter of Credit has been
Issued shall reimburse the Issuing Bank for amounts drawn under such
Letter of Credit pursuant to subsection (e)(ii) below, in the currency
in which such Letter of Credit is denominated, no later than the date
(the "Reimbursement Date") which is one (1) Business Day after such
Borrower receives written notice from the Issuing Bank that payment
has been made under such Letter of Credit by the Issuing Bank; and
() all Reimbursement Obligations with respect to any Letter of
Credit shall bear interest at the rate applicable to Base Rate Loans
(if such Letter of Credit is denominated in Dollars) or Eurocurrency
Rate Loans with Eurocurrency Interest Periods determined by the
Administrative Agent (if such Letter of Credit is denominated in an
Alternative Currency), in each case in accordance with Section 4.01(a)
from the date of the relevant drawing under such Letter of Credit
until the Reimbursement Date and thereafter at the rate applicable in
accordance with Section 4.01(d).
() The applicable Issuing Bank shall give the Administrative
Agent written notice, or telephonic notice confirmed promptly thereafter in
writing, of all drawings under a Letter of Credit and the payment (or the
failure to pay when due) by the applicable Borrower on account of a
Reimbursement Obligation (which notice the Administrative Agent shall promptly
transmit by telegram, telex, telecopy or similar transmission to each
Revolving Credit Lender).
() No action taken or omitted in good faith by an Issuing Bank
under or in connection with any Letter of Credit shall put such Issuing Bank
under any resulting liability to any Lender or, so long as such Letter of
Credit is not Issued in violation of Section 2.04(a), relieve any Revolving
Credit Lender of its obligations hereunder to such Issuing Bank. Solely as
between the Issuing Banks and such Lenders, in determining whether to pay
under any Letter of Credit, the respective Issuing Bank shall have no
obligation to the Revolving Credit Lenders other than to confirm that any
documents required to be delivered under a respective Letter of Credit appear
to have been delivered and that they appear on their face to comply with the
requirements of such Letter of Credit.
() Participations. () Immediately upon Issuance by an Issuing
Bank of any Letter of Credit in accordance with the procedures set forth in
this Section 2.04, each Revolving Credit Lender shall be deemed to have
irrevocably and unconditionally purchased and received from that Issuing Bank,
without recourse or warranty, an undivided interest and participation in such
Letter of Credit to the extent of such Lender's Pro Rata Share, including,
without limitation, all obligations of applicable Borrower with respect
thereto (other than amounts owing to the Issuing Bank under Section 2.04(g))
and any security therefor and guaranty pertaining thereto.
() If any Issuing Bank makes any payment under any Letter of
Credit and the applicable Borrower does not repay such amount to the Issuing
Bank on the Reimbursement Date, the Issuing Bank shall promptly notify the
Administrative Agent, which shall promptly notify each Revolving Credit
Lender, and each such Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of such Issuing Bank, in immediately
available funds, the amount of such Lender's Pro Rata Share (or Multicurrency
Pro Rata Share, in the case of any such payment denominated in an Alternative
Currency) of such payment (net of that portion of such payment, if any, made
by such Lender in its capacity as an Issuing Bank), and the Administrative
Agent shall promptly pay to the Issuing Bank such amounts received by it, and
any other amounts received by the Administrative Agent for the Issuing Bank's
account, pursuant to this Section 2.04(e). All such payments shall constitute
Revolving Loans made to the applicable Borrower pursuant to Section 2.02
(irrespective of the satisfaction of the conditions in Section 5.02 or the
requirement in Section 2.02(b) to deliver a Notice of Borrowing which
conditions and requirement, for the purpose of refunding any Reimbursement
Obligation owing to any Issuing Bank, the Revolving Credit Lenders irrevocably
waive) and shall thereupon cease to be unpaid Reimbursement Obligations. Such
Revolving Loans shall be Base Rate Loans (if such Letter of Credit is
denominated in Dollars) or Eurocurrency Rate Loans with Eurocurrency Interest
Periods determined by the Administrative Agent (if such Letter of Credit is
denominated in an Alternative Currency). If a Revolving Credit Lender does
not make its Pro Rata Share (or Multicurrency Pro Rata Share, in the case of
any such payment denominated in a Alternative Currency) of the amount of such
payment available to the Administrative Agent, such Lender agrees to pay to
the Administrative Agent for the account of the Issuing Bank, forthwith on
demand, such amount together with interest thereon, for the first Business Day
after the date such payment was first due at the Interbank Rate, and
thereafter at the interest rate then applicable to Base Rate Loans (in the
case of Revolving Loans denominated in Dollars) and Eurocurrency Loans with a
Eurocurrency Interest Period of one week (in the case of Multicurrency Loans),
in each case in accordance with Section 4.01(a). The failure of any such
Lender to make available to the Administrative Agent for the account of an
Issuing Bank its Pro Rata Share (or Multicurrency Pro Rata Share, in the case
of any such payment denominated in an Alternative Currency) of any such
payment shall neither relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent for the account of such Issuing
Bank such other Lender's Pro Rata Share of any payment on the date such
payment is to be made nor increase the obligation of any other Lender to make
such payment to the Administrative Agent. This Section does not relieve any
Revolving Credit Lender of its obligation to purchase Pro Rata Share
participations in Letters of Credit; nor does this Section relieve the
applicable Borrower of its obligation to pay or repay any Issuing Bank funding
its Pro Rata Share of such payment pursuant to this Section interest on the
amount of such payment from such date such payment is to be made until the
date on which payment is repaid in full. Notwithstanding the foregoing, no
Non-Participating Multicurrency Lender shall be obligated under this Section
2.04(e)(ii) to make any Multicurrency Loan for the purpose of funding the
payment to any Issuing Bank in respect of a Reimbursement Obligation owing to
such Issuing Bank denominated in an Alternative Currency.
() Whenever an Issuing Bank receives a payment on account of a
Reimbursement Obligation, including any interest thereon, as to which any
Revolving Credit Lender has made a Revolving Loan pursuant to clause (ii) of
this Section, such Issuing Bank shall promptly pay to the Administrative Agent
such payment in accordance with Section 3.02. Each such payment shall be made
by such Issuing Bank or the Administrative Agent, as the case may be, on the
Business Day on which such Person receives the funds paid to such Person
pursuant to the preceding sentence, if received prior to 10:00 a.m. (Chicago
time) on such Business Day, and otherwise on the next succeeding Business Day.
() Upon the request of any Revolving Credit Lender to the
Administrative Agent, an Issuing Bank shall furnish such Lender copies of any
Letter of Credit or Letter of Credit Reimbursement Agreement to which such
Issuing Bank is party and such other documentation as reasonably may be
requested by such Lender.
() The obligations of a Revolving Credit Lender to make
payments to the Administrative Agent for the account of any Issuing Bank with
respect to a Letter of Credit issued for the account of any Borrower, shall be
irrevocable, shall not be subject to any qualification or exception whatsoever
except willful misconduct or gross negligence of such Issuing Bank as
determined in a final, non-appealable judgment by a court of competent
jurisdiction, and shall be honored in accordance with this Article II
(irrespective of the satisfaction of the conditions described in Sections 5.01
and 5.02, as applicable which conditions, for the purposes of the repayment of
Letters of Credit to the Issuing Bank, such Lenders irrevocably waive) under
all circumstances, including, without limitation, any of the following
circumstances:
() any lack of validity or enforceability hereof or of any of
the other Loan Documents;
() the existence of any claim, setoff, defense or other right
which such Borrower may have at any time against a beneficiary named
in a Letter of Credit or any transferee of a beneficiary named in a
Letter of Credit (or any Person for whom any such transferee may be
acting), the Administrative Agent, any CoAgent, any Issuing Bank, any
Lender, or any other Person, whether in connection herewith, with any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions between
the account party and beneficiary named in any Letter of Credit);
() any draft, certificate or any other document presented under
the Letter of Credit having been determined to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
() the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
() any failure by such Issuing Bank to make any reports
required pursuant to Section 2.04(h) or the inaccuracy of any such
report; or
() the occurrence of any Event of Default or Default.
() Payment of Reimbursement Obligations. Subject to the terms
hereof, () the Borrower for whose account a Letter of Credit is Issued
unconditionally agrees to pay to each Issuing Bank, in Dollars or the
applicable Alternative Currency, the amount of all Reimbursement Obligations,
interest and other amounts payable to such Issuing Bank under or in connection
with such Letter of Credit when such amounts are due and payable, irrespective
of any claim, setoff, defense or other right which such Borrower may have at
any time against any Issuing Bank or any other Person.
() In the event any payment by a Borrower received by an
Issuing Bank with respect to a Letter of Credit and distributed by the
Administrative Agent to the Revolving Credit Lenders on account of their
participation is thereafter set aside, avoided or recovered from such Issuing
Bank in connection with any receivership, liquidation or bankruptcy
proceeding, each such Lender which received such distribution shall, upon
demand by such Issuing Bank, contribute such Lender's Pro Rata Share of the
amount set aside, avoided or recovered together with interest at the rate
required to be paid by such Issuing Bank upon the amount required to be repaid
by it.
() Issuing Bank Charges. Each Borrower shall pay to each
Issuing Bank, solely for its own account, the standard charges assessed by
such Issuing Bank in connection with the issuance, administration, amendment
and payment or cancellation of Letters of Credit and such compensation in
respect of such Letters of Credit for such Borrower's account as may be agreed
upon by such Borrower and such Issuing Bank from time to time.
() Issuing Bank Reporting Requirements. Each Issuing Bank
shall, no later than the tenth (10th) Business Day following the last day of
each calendar month, provide to the Administrative Agent and the Company
separate schedules for Commercial Letters of Credit and Standby Letters of
Credit issued by the Borrowers, in form and substance reasonably satisfactory
to the Administrative Agent and the Company, setting forth the aggregate
Letter of Credit Obligations outstanding to the Borrowers at the end of each
month and any information requested by the Administrative Agent or the Company
relating to the date of issue, account party, amount, expiration date and
reference number of each Letter of Credit issued by the Borrowers.
() Indemnification; Exoneration. () In addition to all other
amounts payable to an Issuing Bank, each Borrower hereby agrees to defend,
indemnify, and save the Administrative Agent, each CoAgent, each Issuing Bank
and each Lender harmless from and against any and all claims, demands,
liabilities, penalties, damages, losses (other than loss of profits), costs,
charges and expenses (including reasonable attorneys' fees but excluding taxes)
which the Administrative Agent, such CoAgent, such Issuing Bank or such Lender
may incur or be subject to as a consequence, direct or indirect, of (i) the
Issuance of any Letter of Credit other than as a result of the gross
negligence or willful misconduct of the Issuing Bank, as determined in a
final, non-appealable judgment by a court of competent jurisdiction, or
(ii) the failure of the Issuing Bank issuing a Letter of Credit to honor a
drawing under such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or Governmental Authority.
() As between a Borrower on the one hand and the Administrative
Agent, the CoAgents, the Lenders and the Issuing Banks on the other hand, such
Borrower assumes all risks of the acts and omissions of, or misuse of Letters
of Credit by, the respective beneficiaries of the Letters of Credit. In
furtherance and not in limitation of the foregoing, subject to the provisions
of the Letter of Credit Reimbursement Agreements, the Administrative Agent,
the CoAgents, the Issuing Banks and the Lenders shall not be responsible for:
(i) the form, validity, legality, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and Issuance of the Letters of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity, legality or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason;
(iii) failure of the beneficiary of a Letter of Credit to comply duly with
conditions required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any loss
or delay in the transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of a Letter of Credit of the
proceeds of any drawing under such Letter of Credit; (viii) any litigation,
proceeding or charges with respect to such Letter of Credit; and (ix) any
consequences arising from causes beyond the control of the Administrative
Agent, the CoAgents, the Issuing Banks or the Lenders, except in the cases of
clauses (i), (iii), (iv), (v), (vi), (viii) and (ix) above, in each instance
for the gross negligence or willful misconduct of the Issuing Bank, as
determined in a final, non-appealable judgment by a court of competent
jurisdiction.
() Obligations Several. The obligations of each Issuing Bank
and each Revolving Credit Lender under this Section 2.04 are several and not
joint, and no Issuing Bank or Lender shall be responsible for the obligation
to issue Letters of Credit or the participation obligation hereunder,
respectively, of any other Issuing Bank or Lender.
2.0. Promise to Repay; Evidence of Indebtedness.
() Promise to Repay. Each Borrower hereby agrees to pay when
due the principal amount of each Loan which is made to it, and further agrees
to pay when due all unpaid interest accrued thereon, in accordance with the
terms hereof and of the Notes. Each Borrower shall execute and deliver to
each Lender, as applicable, (i) on the Effective Date, (A) Term Loan Notes
substantially in the form of Exhibit D, evidencing the Term Loans,
(B) Revolving Credit Notes substantially in the form of Exhibit E and
(C) Swing Loan Notes substantially in the form of Exhibit F, and
(ii) thereafter shall execute and deliver such other promissory notes as are
necessary to evidence the Loans owing to the Lenders after giving effect to
any assignment thereof pursuant to Section 13.01, all in form and substance
acceptable to the Administrative Agent and the parties to such assignment (all
such Term Loan Notes, Revolving Credit Notes and Swing Loan Notes and all
amendments thereto, replacements thereof and substitutions therefor being
collectively referred to as the "Notes"; and "Note" means any one of the
Notes).
() Loan Account. Each Lender shall maintain in accordance with
its usual practice an account or accounts (a "Loan Account") evidencing the
Indebtedness of each Borrower to such Lender resulting from each Loan owing to
such Lender from time to time, including the amount of principal and interest
payable and paid to such Lender from time to time hereunder and under each of
the Notes.
2.0. Authorized Officers and Agents. On the Effective Date
and from time to time thereafter, the Company shall deliver to the
Administrative Agent an Officers' Certificate setting forth the names of the
officers, employees and agents of the Borrowers authorized to request
Revolving Loans, Swing Loans and Letters of Credit and containing a specimen
signature of each such officer, employee or agent. The officers, employees
and agents so authorized shall also be authorized to act for the Borrowers in
respect of all other matters relating to the Loan Documents. The
Administrative Agent shall be entitled to rely conclusively on such officer's
or employee's authority to request such Loan or Letter of Credit until the
Administrative Agent receives written notice to the contrary. In addition,
the Administrative Agent shall be entitled to rely conclusively on any written
notice sent to it by telecopy. The Administrative Agent shall have no duty to
verify the authenticity of the signature appearing on, or any telecopy or
facsimile of, any written Notice of Borrowing or any other document, and, with
respect to an oral request for such a Loan or Letter of Credit, the
Administrative Agent shall have no duty to verify the identity of any person
representing himself or herself as one of the officers, employees or agents
authorized to make such request or otherwise to act on behalf of the
Borrowers. None of the Administrative Agent, either CoAgent, any Lender or
any Issuing Bank shall incur any liability to the Borrowers or any other
Person in acting upon any telecopy or facsimile or telephonic notice referred
to above which the Administrative Agent reasonably believes to have been given
by a duly authorized officer, employee or agent set forth in the most recent
Officers' Certificate delivered by the Company to the Administrative Agent.
2.0. Designation of Foreign Borrowers. () The Company shall
have the right to designate one or more Wholly Owned Foreign Subsidiaries
(other than Insilco GmbH) to become "Foreign Borrowers" for all purposes under
this Agreement by giving the Administrative Agent at least 30 days written
notice of its intention to designate a Foreign Borrower. The Company shall
also specify in such written notice the Foreign Borrower Sublimit for such
designated Foreign Borrower. No Foreign Borrower (including Insilco GmbH)
shall be entitled to request Revolving Loans or Letters of Credit hereunder
unless the following conditions precedent are satisfied (it being understood
and agreed that Insilco GmbH, by being a party to this Agreement, has already
satisfied the condition in clause (i)(A) below):
() The Administrative Agent (on behalf of itself and the
Lenders) shall have received on or before the initial funding of any
Revolving Loan to, or the date of issuance of any Letter of Credit for
the account of, such Foreign Borrower, all of the following in form
and substance satisfactory to the Administrative Agent:
() A Foreign Borrower Assumption Agreement substantially in
the form of Exhibit G, duly executed by such Foreign Borrower, the
Company, the Administrative Agent and Lenders constituting the
Requisite Lenders, pursuant to which, among other things,
(I) such Foreign Borrower agrees to be bound by the terms of this
Agreement applicable to Foreign Borrowers, (II) the Requisite
Lenders approve of the designation of such Foreign Borrower and
(III) the Requisite Lenders approve of the Foreign Borrower
Sublimit of such Foreign Borrower;
() A pledge of 65% of the Capital Stock of such Foreign
Borrower as security for the Obligations;
() A Revolving Credit Note payable to each Lender in a
principal amount equal to such Lender's Pro Rata Share of such
Foreign Borrower's Foreign Borrower Sublimit; and
() Such corporation documentation, opinions of counsel
and other documentation as the Administrative Agent may
reasonably request.
() No Event of Default or Default shall have occurred and be
continuing or would result from the making of any Loans to such Foreign
Borrower.
() All of the representations and warranties contained in
Section 6.01 and in any of the other Loan Documents shall be true and correct
in all material respects on and as of the effective date of the designation of
such Foreign Borrower (other than representations and warranties which
expressly speak as of a different date).
() Such Foreign Borrower shall have received all consents and
authorizations required pursuant to any material Contractual Obligation with
any other Person and shall have obtained all consents and authorizations of,
and effected all notices to and filings with, any Governmental Authority as
may be necessary to allow such Foreign Borrower lawfully to execute, deliver
and perform, in all material respects, its obligations hereunder, under the
other Loan Documents to which it is, or shall be, a party and each other
agreement or instrument to be executed and delivered by it pursuant thereto or
in connection therewith.
() No Requirement of Law of the jurisdiction in which such
Foreign Borrower is located or organized shall prohibit any Multicurrency
Lender from making Revolving Loans to such Foreign Borrower or shall impose
any material adverse condition upon such Multicurrency Lender in connection
with the making of any Revolving Loan.
() Any Foreign Borrower may cease to be a Foreign Borrower for
all purposes hereunder upon (i) at least 30 days written notice from the
Company to the Administrative Agent specifying such Foreign Borrower and
(ii) the payment in full by such Foreign Borrower of all its Revolving Loans
and other Obligations (other than Obligations in respect of indemnities not
yet due).
ARTICLE
PAYMENTS AND PREPAYMENTS
3.0. Prepayments; Reductions in Revolving Credit Commitments.
() Voluntary Repayments/Reductions. () Voluntary Repayments
of Loans. Upon at least three (3) Business Days' prior notice to the
Administrative Agent (which the Administrative Agent shall promptly transmit
to each Lender), the Borrower may repay any Base Rate Loan, in whole or in
part. Eurocurrency Rate Loans may be repaid (A) in whole or in part on the
expiration date of the then applicable Eurocurrency Interest Period, as the
case may be, and (B) upon payment of the amounts described in Section 4.02(f)
on any other Business Day upon at least three (3) Business Days' prior written
notice to the Administrative Agent (which the Administrative Agent shall
promptly transmit to each Lender). Unless the aggregate outstanding principal
balance of the Term Loans is to be prepaid in full, voluntary prepayments of
the Term Loans shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount. Each voluntary
prepayment of the Term Loans shall be applied to the remaining installments of
the Term Loans in inverse order of maturity. Voluntary repayments of
Revolving Loans denominated in Dollars shall be in an aggregate minimum amount
of $500,000 and integral multiples of $100,000. Voluntary repayments of
Multicurrency Loans shall be in an aggregate amount equal to an integral
multiple of 100,000 units in such Alternative Currency and (converted to the
Dollar Equivalent thereof) equal to or greater than $500,000. Any notice of
repayment given to the Administrative Agent under this Section 3.01(a)(i)
shall specify, in accordance with the terms hereof, the date (which shall be a
Business Day) of repayment, the aggregate principal amount and currency of the
repayment, any allocation of such amount among Loans outstanding to the
Company and the Foreign Borrowers, and any allocation of such amount among
Base Rate Loans and Eurocurrency Rate Loans. When notice of repayment is
delivered as provided herein, the principal amount of the Loans specified in
the notice shall become due and payable on the repayment date specified in
such notice, subject to the right to reborrow the same in accordance with
Section 2.02. The Company may repay Swing Loans, without prior written notice
to the Administrative Agent or the Swing Loan Bank, at any time and from time
to time.
() Voluntary Revolving Credit Commitment Reductions. The
Company, upon at least three (3) Business Days' prior written notice to the
Administrative Agent (which the Administrative Agent shall promptly transmit
to each Lender), shall have the right, from time to time, to terminate in
whole or permanently reduce in part the Revolving Credit Commitments, provided
that the Borrowers shall have made whatever payment may be required to reduce
the Revolving Credit Obligations to an amount less than or equal to the
Maximum Revolving Credit Amount after giving effect to such reduction or
termination of the Revolving Credit Commitments. Any partial reduction of the
Revolving Credit Commitments shall be in an aggregate minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess of that amount, and
shall reduce the Revolving Credit Commitment of each Lender proportionately in
accordance with its Pro Rata Share. Any notice of termination or reduction
given to the Administrative Agent under this Section 3.01(a)(ii) shall specify
the date (which shall be a Business Day) of such termination or reduction and,
with respect to a partial reduction, the aggregate principal amount thereof.
When notice of termination or reduction is delivered as provided herein, the
principal amount of the Revolving Loans specified in the notice shall become
due and payable on the date specified in such notice.
() No Prepayment Fee. The repayments and payments in respect of
reductions and terminations described in clauses (i) and (ii) of this Section
3.01(a) may be made without premium or penalty (except as provided in Section
4.02(f)).
() Mandatory Prepayments of Loans and Revolving Credit
Commitment Reductions.
() Immediately after Holdco's, the Borrowers' or any of the
Borrowers' Subsidiaries' receipt of any Net Cash Proceeds on account of
(A) the sale, assignment or other disposition of, or (B) subject to Section
8.07, the loss of or damage to, or taking by condemnation or eminent domain
of, all or any portion of the Property of Holdco, the Borrowers or any of the
Subsidiaries (other than pursuant to a Sale and Leaseback Transaction permitted
pursuant to Section 9.10), the Borrowers shall make or cause to be made a
mandatory prepayment of the Loans in an amount equal to 100% of such Net Cash
Proceeds; provided, however, Holdco, the Borrowers and the Subsidiaries taken
as a whole may retain Net Cash Proceeds of the type referred to in clause (A)
or (B) above in an aggregate amount not in excess of the first $5,000,000 in
the aggregate received by them in any Fiscal Year arising from any sale,
assignment or other disposition (or series of related sales, assignments or
other dispositions), or loss, damage or condemnation. In the event the
distribution of any Net Cash Proceeds received by a Foreign Subsidiary to the
Company on account of the sale, assignment or other disposition of all or any
portion of such Subsidiary's Property (X) would result in a current material
adverse tax consequence to such Foreign Subsidiary or (Y) would not be legally
permissible under any Requirement of Law applicable to such Foreign
Subsidiary, then no such mandatory prepayment shall be required if such Net
Cash Proceeds are reinvested by such Foreign Subsidiary in any Investment or
Capital Expenditure in the business of such Foreign Subsidiary (to the extent
otherwise permitted hereunder) within 360 days after the receipt thereof;
provided, however, if such Net Cash Proceeds are not so reinvested, then the
Borrowers shall make or cause to be made a mandatory prepayment of the Loans
in an amount equal to that portion of such Net Cash Proceeds that were not so
reinvested on the last day of such 360-day period.
() Immediately after Holdco's, the Borrowers' or any of the
Company's Subsidiaries' receipt of any Net Cash Proceeds identified in clause
(iii)(A) (issuance of Capital Stock) of the definition of "Net Cash Proceeds",
the Borrowers shall make or cause to be made a mandatory prepayment of the
Loans in an amount equal to fifty percent (50%) of such Net Cash Proceeds;
provided, however, a portion of such prepayment may be retained by the
Borrowers to the extent that the amount of Funded Debt as permanently reduced
by giving effect to the application of such Net Cash Proceeds would result (on
a pro forma basis) in a Leverage Ratio of 3.50 to 1 or less for the
twelve-month period ending on the last day of the immediately preceding fiscal
quarter of the Company.
() Immediately after Holdco's, the Company's or any of the
Domestic Subsidiaries' receipt of any Net Cash Proceeds from the issuance of
Indebtedness, the Borrowers shall make or cause to be made a mandatory
prepayment of the Loans in an amount equal to 100% of such Net Cash Proceeds.
() Within 105 days after the end of each Cash Flow Period,
(A) the Company shall calculate the Excess Cash Flow for such Cash Flow Period
and (B) the Company shall make a mandatory prepayment of the Obligations in an
amount equal to fifty percent (50%) of such Excess Cash Flow; provided,
however, a portion of such prepayment may be retained by the Borrowers to the
extent that the amount of Funded Debt as permanently reduced by giving effect
to the application of such Excess Cash Flow prepayment would result (on a pro
forma basis) in a Leverage Ratio of 3.50 to 1 or less for the twelve-month
period ending on the last day of the immediately preceding fiscal quarter of
the Company.
() Immediately after the Company's or any of its Domestic
Subsidiaries' receipt of any Net Cash Proceeds from any Sale and Leaseback
Transaction, the Company shall make or cause to be made a mandatory prepayment
in the amount equal to 100% of such Net Cash Proceeds; provided, however, the
Borrower and the Domestic Subsidiaries taken as a whole may retain Net Cash
Proceeds not in excess of $10,000,000 in the aggregate since the Effective
Date arising from any Sale and Leaseback Transaction.
() Nothing in this Section 3.01(b) shall be construed to
constitute the Lenders' consent to any transaction which is not permitted by
Article IX.
() On the date any mandatory prepayment is received by the
Administrative Agent pursuant to clause (i), (ii), (iii), (iv) or (v) above
(each such payment being a "Designated Prepayment"), such Designated
Prepayment shall be allocated and applied as follows: First, the Term Loan
Percentage (as defined below) of such Designated Prepayment shall be applied
to the repayment of the Term Loans (in inverse order of maturity of
installments thereof), with the remaining amount of such Designated Prepayment
being allocated and applied to the repayment of the Revolving Credit
Obligations in accordance with Section 3.02(b) (with, only in the case of a
Designated Prepayment pursuant to clauses (i), (iii) and (v) above, a
corresponding permanent reduction in the Revolving Credit Commitments equal to
the remaining amount of such Designated Prepayment); provided, however, that
upon written notice to the Administrative Agent as provided below any Term
Loan Lender, pursuant to the last three sentences of this clause (vii), may
refuse (a "Prepayment Refusal") to accept its Pro Rata Share of such
Designated Prepayment (the "Refused Prepayment Amount"); upon the occurrence
of a Prepayment Refusal, such Refused Prepayment Amount shall be allocated and
applied to the Revolving Credit Obligations in accordance with Section 3.02(b)
(with, only in the case of a Designated Prepayment pursuant to clauses (i),
(iii) and (v) above, a corresponding permanent reduction in the Revolving
Credit Commitments equal to 50% of the amount of such Refused Prepayment
Amount); provided further, however, in the event at the time of any
application of a Designated Prepayment pursuant to clauses (i) or (v) above
(and after giving effect to the application of such prepayment), the Leverage
Ratio of the Company for the twelve-month period ending on the last day of the
immediately preceding fiscal quarter of the Company is less than 3.00 to 1,
then such prepayment shall not result in a permanent reduction of the Revolving
Credit Commitments. As used in this Section 3.01(b)(vii), the term "Term Loan
Percentage" means the percentage obtained by dividing (A) the outstanding
principal amount of the Term Loans by (B) the outstanding principal amount of
the Term Loans plus the Revolving Credit Commitments in effect at such time.
Any such prepayments shall be applied first to Base Rate Loans (if in Dollars)
and then to any Eurocurrency Rate Loans with those Loans which have earlier
expiring Eurocurrency Interest Periods being repaid prior to those which have
later expiring Eurocurrency Interest Periods. The Administrative Agent shall
provide each Term Loan Lender with written notice of each Term Loan Lender's
Pro Rata Share of the Term Loan Percentage of any Designated Prepayment. Each
Term Loan Lender may make a Prepayment Refusal by delivering to the
Administrative Agent, within three Business Days of receipt of such notice
from the Administrative Agent, a written notice duly executed by such Term
Loan Lender stating such Term Loan Lender's determination to make a Prepayment
Refusal. The Administrative Agent may deem the failure of any Term Loan
Lender to deliver such notice within such time period as such Term Loan
Lender's agreement to accept such portion of any Designated Prepayment.
() Immediately, (A) if at any time the Revolving Credit
Obligations are greater than the Maximum Revolving Credit Amount, the
Borrowers shall make a mandatory repayment of the Revolving Credit Obligations
in an amount equal to such excess, such amount to be applied in accordance
with Section 3.02(b); (B) to the extent the Maximum Revolving Credit Amount is
at any time less than the amount of contingent Letter of Credit Obligations
outstanding at such time, the Borrowers shall deposit Cash Collateral with the
Administrative Agent in an amount equal to the amount by which such Letter of
Credit Obligations exceed such Maximum Revolving Credit Amount; (C) if at any
time the Dollar Equivalent of the aggregate outstanding amount of Revolving
Credit Obligations denominated in Alternative Currencies exceeds the
Multicurrency Sublimit for a period of 30 days, the Borrowers shall make a
mandatory repayment of the Multicurrency Loans in the amount of such excess on
the last day of such period and (D) if at any time the Dollar Equivalent of
aggregate outstanding amount of Revolving Credit Obligations owing by any
Foreign Borrower exceeds the Foreign Borrower Sublimit applicable to such
Borrower for a period of 30 days, such Borrower shall make a mandatory
repayment of Revolving Loans in the amount of such excess on the last day of
such period.
() Scheduled Revolving Credit Commitment Reductions. In
addition to any mandatory reductions in the Revolving Credit Commitments made
pursuant to Section 3.01(b)(vi), (i) the Revolving Credit Commitments shall be
permanently reduced by an additional $17,500,000 on each of July 10, 2001 and
July 10, 2002; provided, however, in the event on such date the Leverage Ratio
of the Company for the twelve-month period ending on the last day of the
immediately preceding fiscal quarter of the Company is less than 3.00 to 1,
then if not already permanently reduced pursuant to this Section 3.01, the
Revolving Credit Commitments shall be permanently reduced to (A) $160,000,000
on July 10, 2001 and (B) $140,000,000 on July 10, 2002; and (ii) the Revolving
Credit Commitments shall be permanently reduced on the sixth-month anniversary
of the Effective Date by an amount (not less than zero) equal to $45,000,000
less the amount of consideration and transaction costs paid in respect of the
consummation of any Proposed Acquisition or to be paid in respect of any
Proposed Acquisition for which definitive purchase documentation has been
executed and delivered during the period beginning on the Effective Date and
ending on such sixth-month anniversary.
3.0. Payments. () Manner and Time of Payment. All payments
of principal of and interest on the Loans and Reimbursement Obligations and
other Obligations (including, without limitation, fees and expenses) which are
payable to the Administrative Agent, the CoAgent, the Lenders or any Issuing
Bank shall be made without condition or reservation of right, in immediately
available funds in the applicable currency, delivered to the Administrative
Agent (or, in the case of Reimbursement Obligations, to the pertinent Issuing
Bank) not later than 12:00 noon (in the location of the Applicable Payment
Office) on the date and at the place due, to such account of the
Administrative Agent (or such Issuing Bank) as it may designate, for the
account of the Administrative Agent, the Lenders or such Issuing Bank.
Thereafter, payments in respect of any Swing Loans received by the
Administrative Agent shall be distributed to the Swing Loan Bank, payments in
respect of any Revolving Loan or Term Loan, as the case may be, received by
the Administrative Agent shall be distributed to each Lender in accordance
with its Pro Rata Share in accordance with the provisions of Section 3.02(b),
in each case on the date received, if received prior to 12:00 noon (in the
location of the Applicable Payment Office), and (except in the case of
repayment of Swing Loans) on the next succeeding Business Day, if received
thereafter, by the Administrative Agent.
() Apportionment of Payments. () Subject to the provisions of
Section 3.02(b)(ii) and (v), except as otherwise provided herein (A) all
payments of principal and interest (I) in respect of outstanding Term Loans
shall be allocated among such of the Term Loan Lenders as are entitled
thereto, in proportion to their respective Pro Rata Shares thereof and (II) in
respect of outstanding Revolving Loans, and all payments in respect of
Reimbursement Obligations, shall be allocated among such of the Revolving
Credit Lenders and Issuing Banks as are entitled thereto, in proportion to
their respective Pro Rata Shares thereof and (B) all payments of fees and all
other payments in respect of any other Obligations shall be allocated among
such of the Lenders and Issuing Banks as are entitled thereto, in proportion
to their respective applicable Pro Rata Shares. All such payments and any
other amounts received by the Administrative Agent from or for the benefit of
the Borrowers shall be applied first, to pay principal of and interest on any
portion of the Loans which the Administrative Agent may have advanced pursuant
to the express provisions of this Agreement on behalf of any Lender other than
the Lender then acting as Administrative Agent, for which the Administrative
Agent has not then been reimbursed by such Lender or the Borrowers, second, to
pay principal of and interest on any Protective Advance for which the
Administrative Agent has not then been paid by the Borrowers or reimbursed by
the Lenders, third, to pay all other Obligations then due and payable and
fourth, as the Company so designates. Except as set forth in Sections
3.01(a), (b) and (c) and unless otherwise designated by the Company, all
principal payments in respect of outstanding Swing Loans, Revolving Loans or
Term Loans, as the case may be, shall be applied first, to the outstanding
Swing Loans, second, to the outstanding Revolving Loans and third to the
outstanding Term Loans, in each case, first, to repay outstanding Base Rate
Loans, and then to repay outstanding Eurocurrency Rate Loans with those Loans
which have earlier expiring Eurocurrency Interest Periods being repaid prior
to those which have later expiring Eurocurrency Interest Periods.
Notwithstanding the foregoing provisions of Section 3.02(a) and this Section
3.02(b)(i), payments in any Alternative Currency received in respect of any
Multicurrency Loan denominated in such currency shall be distributed to each
Multicurrency Lender in accordance with its Multicurrency Pro Rata Share.
() After the occurrence and during the continuance of an Event
of Default, the Administrative Agent may, and shall upon the acceleration of
the Obligations pursuant to Section 11.02(a), apply all payments in respect of
any Obligations and all proceeds of Collateral in the following order;
provided that payments made by a Foreign Borrower shall be applied first to
the Obligations of such Foreign Borrower and payments made in any Alternative
Currency shall be applied first to obligations denominated in such Alternative
Currency:
() first, to pay interest on and then principal of any portion
of the Revolving Loans which the Administrative Agent may have
advanced on behalf of any Lender for which the Administrative Agent
has not then been reimbursed by such Lender or the Borrowers;
() second, to pay interest on and then principal of first any
outstanding Protective Advance and then any Swing Loan;
() third, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the Administrative Agent;
() fourth, to pay Obligations in respect of any expense
reimbursements or indemnities then due to the CoAgents, the Lenders
and the Issuing Banks;
() fifth, to pay Obligations in respect of any fees then due to
the Administrative Agent, the CoAgents, the Lenders and the Issuing
Banks;
() sixth, to pay interest due in respect of the Loans and
Reimbursement Obligations;
() seventh, to pay or prepay (or, to the extent such
Obligations are contingent, provide Cash Collateral pursuant to
Section 11.02(b) in respect of) principal outstanding on Loans and all
outstanding Letter of Credit Obligations;
() eighth, to the ratable payment of Interest Rate Contracts
and Currency Agreements to which any of the Lenders or any Affiliate
of the Lenders is a party; and
() ninth, to the ratable payment of all other Obligations;
provided, however, if sufficient funds are not available to fund the payments
to be made in respect of any of the Obligations described in any of the
foregoing clauses (A) through (I), the available funds being applied with
respect to any such Obligations referred to in any one such clause (unless
otherwise specified in such clause) shall be allocated in accordance with the
order of priority established by such clause to the payment of such
Obligations ratably, based on the proportion of the Administrative Agent's and
each CoAgent's, Lender's or Issuing Bank's interest in the aggregate
outstanding Obligations described in such clause; and provided further,
however, in the event of any Non-Participating Multicurrency Lender's Pro Rata
Share of the Obligations allocable to the Revolving Credit Obligations
referred to in clause (F) or (G) above is less than its interest in the
aggregate outstanding Revolving Credit Obligations described in such clauses,
then the Administrative Agent shall apply the available funds with respect to
any such Revolving Credit Obligations first to the Multicurrency Lenders in
accordance with their respective Multicurrency Pro Rata Shares until each
Revolving Credit Lender's remaining interest in such Revolving Credit
Obligations is equal to such Revolving Credit Lender's Pro Rata Share of such
Revolving Credit Obligations (it being understood and agreed that such
reallocation of amounts shall not affect in any way the amount of available
funds that are applied to the Obligations owing to the Term Loan Lenders in
respect of the Term Loans). Notwithstanding the foregoing proviso, in the
event any Non-Participating Multicurrency Lender's Pro Rata Share of the
Revolving Credit Obligations is less than its interest in the aggregate
outstanding Revolving Credit Obligations, the Administrative Agent may, and
shall at the request of the Multicurrency Lenders whose Multicurrency Pro Rata
Shares exceed 51%, require each Non-Participating Multicurrency Lender (and
each Non-Participating Multicurrency hereby agrees) to purchase, without
recourse or warranty, an undivided interest and participation in the
outstanding Dollar-denominated Revolving Loans owing to the Multicurrency
Lenders so that, after giving effect to such purchases, each Revolving Credit
Lender's interest in the Revolving Credit Obligations is equal to such
Revolving Credit Lender's Pro Rata Share of such Obligations at the time of
such purchase.
The order of priority set forth in this Section 3.02(b)(ii) and the related
provisions hereof are set forth solely to determine the rights and priorities
of the Administrative Agent, the CoAgents, the Lenders, the Issuing Banks and
other Holders as among themselves. The order of priority set forth in clauses
(A) through (I) of this Section 3.02(b)(ii) may at any time and from time to
time be changed by the agreement of the Requisite Lenders without necessity of
notice to or consent of or approval by the Borrower, any Holder which is not a
Lender or Issuing Bank, or any other Person; provided, however, the order of
priority set forth in clauses (A) through (E) of this Section 3.02(b)(ii) may
not be changed without the prior written consent of the Administrative Agent.
() All payments of principal on the Swing Loans, Protective
Advances, Reimbursement Obligations, interest, fees and other sums payable in
respect of the Revolving Loans may, at the option of the Administrative Agent,
be paid from the proceeds of the Revolving Loans. The Borrower hereby
authorizes the Swing Loan Bank to make pursuant to Section 2.03(a) and the
Lenders to make pursuant to Section 2.02(a) in Dollars, from time to time in
the Swing Loan Bank's or the Administrative Agent's discretion, Revolving
Loans which are in the amounts of any and all principal on the Swing Loans,
interest, fees and other sums payable in respect of the Revolving Loans (or
the Dollar Equivalent thereof if not denominated in Dollars), and further
authorizes the Administrative Agent (A) to give the Lenders notice of any
Borrowing with respect to such Revolving Loans and (B) to distribute the
proceeds of such Revolving Loans to pay such amounts. The Administrative
Agent agrees to give the Borrower notice of any such Borrowing, but the
failure to give such notice shall in no way limit the rights of the
Administrative Agent in the preceding sentence. The Borrower agrees that all
such Revolving Loans so made shall be deemed to have been requested by it and
directs that all proceeds thereof shall be used to pay such amounts. All such
Revolving Loans shall be Base Rate Loans.
() The Administrative Agent shall promptly distribute to each
Lender and Issuing Bank at its primary address set forth on the appropriate
signature page hereof or the signature page to the Assignment and Acceptance
by which it became a Lender or Issuing Bank, or to each Lender, Issuing Bank
or other Holder at such other address as such Lender, Issuing Bank or other
Holder may request in writing, such funds as such Person may be entitled to
receive, subject to the provisions of Article XII; provided that, as between
the Holders and the Administrative Agent, the Administrative Agent shall under
no circumstances be bound to inquire into or determine the validity, scope or
priority of any interest or entitlement of any Holder and may suspend all
payments or seek appropriate relief (including, without limitation,
instructions from the Requisite Lenders or an action in the nature of
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby.
() If any Lender fails to fund its Pro Rata Share of any
Revolving Loan Borrowing requested by a Borrower which such Lender is
obligated to fund under the terms hereof (the funded portion of such Revolving
Loan Borrowing being hereinafter referred to as a "Non Pro Rata Loan"),
excluding any such Lender who has delivered to the Administrative Agent
written notice that one or more of the conditions precedent contained in
Section 5.02 shall not on the date of such request be satisfied and until such
conditions are satisfied, then until the earlier of such Lender's cure of such
failure and the termination of the Revolving Credit Commitments, the proceeds
of all amounts thereafter repaid to the Administrative Agent by such Borrower
and otherwise required to be applied to such Lender's share of all other
Obligations pursuant to the terms hereof shall be deemed to have been advanced
to such Borrower by the Administrative Agent on behalf of such Lender to cure,
in full or in part, such failure by such Lender, but shall nevertheless be
deemed to have been paid to such Lender in satisfaction of such other
Obligations. Notwithstanding anything contained herein to the contrary:
() the foregoing provisions of this Section 3.02(b)(v) shall
apply only with respect to the proceeds of payments of Obligations;
() a Lender shall be deemed to have cured its failure to fund
its Pro Rata Share of any Revolving Loan at such time as an amount
equal to such Lender's original Pro Rata Share of the requested
principal portion of such Revolving Loan is fully funded to such
Borrower, whether made by such Lender itself or by operation of the
terms of this Section 3.02(b)(v), and whether or not the Non Pro Rata
Loan with respect thereto has been repaid;
() amounts advanced to such Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Revolving Loan Borrowing ("Cure Loans") shall bear interest at the
rate applicable to the other Revolving Loans comprising such Borrowing
and shall be treated as Revolving Loans comprising such Borrowing for
all purposes herein;
() regardless of whether or not an Event of Default has
occurred or is continuing, and notwithstanding the instructions of
such Borrower as to its desired application, all repayments of
principal which, in accordance with the other terms of this Section
3.02, would be applied to the outstanding Revolving Loans shall be
applied first, ratably to all Revolving Loans constituting Non Pro
Rata Loans, second, ratably to Revolving Loans other than those
constituting Non Pro Rata Loans or Cure Loans and, third, ratably to
Revolving Loans constituting Cure Loans; and
() No Lender shall be relieved of any obligation such Lender
may have to the Borrowers under the terms of this Agreement as a
result of the provisions of this Section 3.02(b)(v).
() Payments on Non-Business Days. Whenever any payment to be
made by the Borrowers hereunder or under the Notes is stated to be due on a
day which is not a Business Day, the payment shall instead be due on the next
succeeding Business Day (or, as set forth in Section 4.02(b)(iv), the next
preceding Business Day), and any such extension of time shall be included in
the computation of the payment of interest and fees hereunder.
() Payment Currency. Except as expressly set forth herein to
the contrary, all payments made by any Borrower in respect of principal and
interest on the Loans and Reimbursement Obligations shall be made (i) with
respect to Loans and Reimbursement Obligations denominated in Dollars, in
Dollars, and (ii) with respect to Multicurrency Loans or Reimbursement
Obligations denominated in an Alternative Currency, in the Alternative
Currency in which such Loan or the Letter of Credit giving rise to such
Reimbursement Obligation was made.
3.0. Taxes.
() Payment of Taxes. Any and all payments by any Borrower
hereunder or under any Note or other document evidencing any Obligations shall
be made free and clear of and without reduction for any and all taxes, levies,
imposts, deductions, charges, withholdings, and all stamp or documentary
taxes, excise taxes, ad valorem taxes, and other taxes imposed on the value of
the Property of the Company and its Subsidiaries, charges or levies which
arise from the execution, delivery or registration, or from payment or
performance under, or otherwise with respect to, any of the Loan Documents or
the Revolving Credit Commitments and all other liabilities with respect
thereto excluding, in the case of each Lender, each Issuing Bank, each CoAgent
and the Administrative Agent, taxes imposed on its income, capital, profits or
gains and franchise taxes imposed on it by (i) the United States, except
certain withholding taxes contemplated pursuant to Section 3.03(d)(ii)(C),
(ii) the Governmental Authority of the jurisdiction in which such Lender's
Applicable Lending Office is located or any political subdivision thereof or
(iii) the Governmental Authority of the jurisdiction in which such Person is
organized, managed and controlled or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If any Borrower
shall be required by law to withhold or deduct any Taxes from or in respect of
any sum payable hereunder or under any such Note or document to any Lender,
any Issuing Bank, any CoAgent or the Administrative Agent, (x) the sum payable
to such Lender, such Issuing Bank, such CoAgent or the Administrative Agent
shall be increased as may be necessary so that, after making all required
withholding or deductions of Taxes (including withholding or deductions of
Taxes applicable to additional sums payable under this Section 3.03(a)), such
Lender, such Issuing Bank, such CoAgent or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such withholding or deductions of Taxes been made, (y) such Borrower shall
make such withholding or deductions, and (z) such Borrower shall pay the full
amount withheld or deducted to the relevant taxation authority or other
authority in accordance with applicable law.
() Indemnification. Each Borrower will indemnify each Lender,
each Issuing Bank, each CoAgent and the Administrative Agent against, and
reimburse each on demand for, the full amount of all Taxes (including, without
limitation, any Taxes imposed by any Governmental Authority on amounts payable
under this Section 3.03(b) and any additional income or franchise taxes
resulting therefrom) incurred or paid by such Lender, such Issuing Bank, such
CoAgent or the Administrative Agent (as the case may be) or any of their
respective Affiliates and any liability (including penalties, interest, and
reasonable out-of-pocket expenses paid to third parties) arising therefrom or
with respect thereto, whether or not such Taxes were lawfully payable. A
certificate as to any additional amount payable to any Person under this
Section 3.03(b) submitted by it to such Borrower shall, absent manifest error,
be final, conclusive and binding upon all parties hereto. In determining such
additional amount, such Person shall take into account and reduce the amount
otherwise payable by such Borrower pursuant to this Section 3.03(b) by an
amount equal to the tax credits and other tax benefits actually utilized (as
determined by such Person in its reasonable judgment). Each Lender, each
CoAgent, the Administrative Agent and each Issuing Bank agrees, within a
reasonable time after receiving a written request from a Borrower, to provide
such Borrower and the Administrative Agent with such certificates as are
reasonably required, and to take such other actions as are reasonably
necessary to claim such exemptions as such Lender, such CoAgent, the
Administrative Agent, such Issuing Bank or Affiliate may be entitled to claim
in respect of all or a portion of any Taxes which are otherwise required to be
paid or deducted or withheld pursuant to this Section 3.03 in respect of any
payments under this Agreement or under the Notes.
() Receipts. Within thirty (30) days after the date of any
payment of Taxes by any Borrower, the Company will furnish to the
Administrative Agent, at its address referred to in Section 13.08, the
original or a copy of a receipt, if any, or other documentation reasonably
satisfactory to the Administrative Agent, evidencing payment thereof. The
Company shall furnish to the Administrative Agent upon the request of the
Administrative Agent from time to time an Officer's Certificate stating that
all Taxes of which it has knowledge are due have been paid.
() Foreign Bank Certifications. () Each Lender or Issuing
Bank that is not created or organized under the laws of the United States or a
political subdivision thereof has delivered to the Company and the
Administrative Agent on the date on which such Lender became a Lender or such
Issuing Bank became an Issuing Bank or shall deliver to the Company on the
date such Lender becomes a Lender or such Issuing Bank becomes an Issuing
Bank, if such date is after the Effective Date, (A) a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender
or Issuing Bank to the effect that such Lender or Issuing Bank is eligible to
receive payments hereunder and under the Notes without deduction or
withholding (or with reduced deduction or withholding) of United States
federal income tax (I) under the provisions of an applicable tax treaty
concluded by the United States (in which case the certificate shall be
accompanied by two duly completed copies of IRS Form 1001 (or any successor or
substitute form or forms)) or (II) under Section 1441(c)(1) as modified for
purposes of Section 1442(a) of the Internal Revenue Code (in which case the
certificate shall be accompanied by two duly completed copies of IRS Form 4224
(or any successor or substitute form or forms)) or (B) in the case of a Lender
or Issuing Bank claiming exemption from United States withholding tax under
Section 871(h) or 881(c) of the Internal Revenue Code with respect to payments
of "portfolio interest", (I) a certificate representing that such Lender is
not a "bank" acquiring the Note in connection with "an extension of credit
made pursuant to a loan agreement entered into in the ordinary course of its
trade or business" (within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code), is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of the Company, and is not a
controlled foreign corporation related to the Company (within the meaning of
Section 864(d)(4) of the Internal Revenue Code) and (II) two duly completed
copies of IRS Form W8 (or any successor or substitute form or forms);
() Each Lender and each Issuing Bank further agrees to deliver
to the Company and the Administrative Agent, a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender or such
Issuing Bank before or promptly upon the occurrence of any event requiring a
change in the most recent certificate previously delivered by it to the
Company and the Administrative Agent pursuant to this Section 3.03(d)
(including, but not limited to, a change in such Lender's or such Issuing
Bank's lending office). Each certificate required to be delivered pursuant to
this Section 3.03(d)(ii) shall certify as to one of the following:
() that such Lender or such Issuing Bank can continue to
receive payments hereunder and under the Notes without deduction or
withholding of United States federal income tax;
() that such Lender or such Issuing Bank cannot continue to
receive payments hereunder and under the Notes without deduction or
withholding of United States federal income tax as specified therein
but does not require additional payments pursuant to Section 3.03(a)
because it is entitled to recover the full amount of any such
deduction or withholding from a source other than the Borrowers;
() that such Lender or Issuing Bank is no longer capable of
receiving payments hereunder and under the Notes without deduction or
withholding (or with reduced deduction or withholding) of United
States federal income tax as specified therein by reason of a change
in law (including, without limitation, the Internal Revenue Code,
applicable tax treaty, regulation or official interpretation thereof)
after the later of the Effective Date or the date on which such Lender
became a Lender or such Issuing Bank became an Issuing Bank and that
it is not capable of recovering the full amount of the same from a
source other than the Borrowers; or
() that such Lender or such Issuing Bank is no longer capable
of receiving payments hereunder without deduction or withholding (or
with reduced deduction or withholding) of United States federal income
tax as specified therein other than by reason of a change in law
(including the Internal Revenue Code, applicable tax treaty,
regulation, or official interpretation thereof) after the later of the
Effective Date or the date on which such Lender became a Lender or
such Issuing Bank became an Issuing Bank.
Each Lender and each Issuing Bank agrees to deliver to the Company and the
Administrative Agent further duly completed copies of the abovementioned IRS
forms on or before the earlier of (x) the date that any such form expires or
becomes obsolete or otherwise is required to be resubmitted as a condition to
obtaining an exemption from withholding from United States federal income tax
and (y) fifteen (15) days after the occurrence of any event requiring a change
in the most recent form previously delivered by such Lender or such Issuing
Bank to the Company and the Administrative Agent, unless any change in law or
event has occurred prior to the date on which any such delivery would
otherwise be required and the Lender or the Issuing Bank promptly advises the
Company that it is not capable of receiving payments hereunder or under the
Notes without any deduction or withholding of United States federal income tax.
() Qualifying Lenders. In connection with the Revolving Loans
made by each Lender to the Foreign Borrowers, each Lender represents to the
Administrative Agent and First Chicago London that it (or its Eurocurrency
Affiliate through which it is making such Revolving Loans) is a Qualifying
Lender.
3.0. Increased Capital. If after the date hereof any Lender
or Issuing Bank determines that (i) the adoption or implementation of or any
change in or in the interpretation or administration of any law or regulation
or any guideline or request from any central bank, the NAIC or other
Governmental Authority or quasi-governmental authority exercising jurisdiction,
power or control over any Lender, Issuing Bank or banks or financial
institutions generally (whether or not having the force of law), compliance
with which affects or would affect the amount of capital required or expected
to be maintained by such Lender or Issuing Bank or any corporation controlling
such Lender or Issuing Bank and (ii) the amount of such capital is increased
by or based upon (A) the making or maintenance by any Lender of its Loans, any
Lender's participation in or obligation to participate in the Loans, Letters
of Credit or other advances made hereunder or the existence of any Lender's
obligation to make Loans or (B) the issuance or maintenance by any Issuing
Bank of, or the existence of any Issuing Bank's obligation to issue, Letters
of Credit, then, in any such case, upon written demand by such Lender or
Issuing Bank (with a copy of such demand to the Administrative Agent), the
Company shall immediately pay to the Administrative Agent for the account of
such Lender or Issuing Bank, from time to time as specified by such Lender or
Issuing Bank, additional amounts sufficient to compensate such Lender or
Issuing Bank or such corporation therefor. Such demand shall be accompanied
by a statement as to the amount of such compensation and include a detailed
summary of the basis for such demand with detailed calculations. Such
statement shall be conclusive and binding for all purposes, absent manifest
error.
3.0. Right to Remove Affected Lender. In the event that
(i) the Company receives certification of the type described in Section
3.03(d)(ii)(C) or notice under Section 5.02(c) from any Lender or any Issuing
Bank, (ii) any Lender gives notice to the Administrative Agent pursuant to
Section 2.02(c)(ii) (and the circumstances specified in such notice are not
generally applicable to the Lenders) or (iii) any Lender makes a demand for
compensation from any Borrower pursuant to Section 3.04 (if such increase in
capital requirements is not generally applicable to the Lenders) or Section
4.01(f), the Company, at its option and in its sole discretion, shall have the
right to designate an Eligible Assignee which is not an Affiliate of the
Company and which is reasonably acceptable to the Administrative Agent, to
purchase for cash, pursuant to an Assignment and Acceptance, the outstanding
Loans and Reimbursement Obligations (if any) of such Lender or Issuing Bank
and to assume all of such Lender's or Issuing Bank's other rights and
obligations (including, without limitation, such Lender's obligation to
participate in all outstanding Letters of Credit pursuant to Section 2.04(e))
hereunder without recourse to or warranty by, or expense to, such Lender or
Issuing Bank, for a purchase price equal to the principal amount of all of
such Lender's outstanding Loans or such Issuing Bank's Reimbursement
Obligations plus any accrued but unpaid interest thereon and the accrued but
unpaid Unused Commitment Fees and Letter of Credit Fees in respect of that
Lender's Revolving Credit Commitment hereunder or any accrued but unpaid
Letter of Credit Fees in respect of that Issuing Bank's outstanding Letters of
Credit and any other amounts that may be owing to such Lender or Issuing Bank
hereunder. The Company agrees to pay to such Lender any breakage costs
incurred by such Lender pursuant to Section 4.02(f).
3.0. European Economic and Monetary Union. () Definitions.
In this Section 3.06 and in each other provision of this Agreement and any
other Loan Document to which reference is made in this Section 3.06 expressly
or impliedly, the following terms have the meanings given to them in this
Section 3.06:
"commencement of the third stage of EMU" means the date of
commencement of the third stage of EMU (expected to be January 1,
1999) or the date on which circumstances arise which (in the opinion
of the Administrative Agent) have substantially the same effect and
result in substantially the same consequences as commencement of the
third stage of EMU as contemplated by the Treaty on European Union;
"EMU" means economic and monetary union as contemplated in the
Treaty on European Union;
"EMU legislation" means legislative measures of the European
Council for the introduction of, changeover to or operation of a
single or unified European currency (whether known as the euro or
otherwise), being in part the implementation of the third stage of
EMU;
"euro" means the single currency of participating member
states of the European Union;
"euro unit" means the currency unit of the euro;
"national currency unit" means the unit of currency (other
than a euro unit) of a participating member state;
"participating member state" means each state so described
in any EMU legislation; and
"Treaty on European Union" means the Treaty of Rome of
March 25, 1957, as amended by the Single European Act 1986 and the
Maastricht Treaty (which was signed at Maastricht on February 7, 1992,
and came into force on November 1, 1993), as amended from time to
time.
() Effectiveness of Provisions. The provisions of subsections
(c) to (j) below (inclusive) shall be effective at and from the commencement
of the third stage of EMU; provided, however, that if and to the extent that
any such provision relates to any state (or the currency of such state) that
is not a participating member state on the commencement of the third stage of
EMU, such provision shall become effective in relation to such state (and the
currency of such state) at and from the date on which such state becomes a
participating member state.
() Redenomination and Alternative Currencies. Each obligation
(including each Obligation and Liability under this Agreement or any other
Loan Document of a party to this Agreement or any other Loan Document which
has been denominated in the national currency unit of a participating member
state) shall be redenominated into the euro unit in accordance with EMU
legislation; provided, however, that if and to the extent that any EMU
legislation provides that following the commencement of the third stage of EMU
an amount denominated either in euro or in the national currency unit of
participating member state and payable within that participating member state
by crediting an account of the creditor can be paid by the debtor either in
the euro unit or in that national currency unit, each party to this Agreement
and each other Loan Document shall be entitled to pay or repay any such amount
either in the euro unit or in such national currency unit.
() Loans. Any Loan in the currency of a participating member
state shall be made in the euro unit.
() Business Days. With respect to any amount denominated or to
be denominated in the euro or a national currency unit, any reference to a
"Business Day" shall be construed as a reference to a day (other than a
Saturday or Sunday) on which banks are generally open for business in London,
Chicago, New York City and Frankfurt am Main, Germany (or such principal
financial center or centers in such participating member state or states as the
Administrative Agent may from time to time nominate for this purpose);
provided, however, that the Administrative Agent may by notice to the Loan
Parties and the Lenders specify changes to the definition of Business Day as
applicable to the euro or one or more other currencies which it reasonably
determines are necessary to reflect changes in market practices and/or
operational requirements in connection therewith.
() Payments to the Administrative Agent. Amounts payable by a
Borrower or Guarantor under any Loan Document shall be construed so that, in
relation to the payment of any amount of euro units or national currency
units, such amount shall be made available to the Administrative Agent in
immediately available, freely transferable, cleared funds to such account with
such bank in Frankfurt am Main, Germany (or such other principal financial
center in such participating member state as the Administrative Agent may from
time to time nominate for this purpose) as the Administrative Agent shall from
time to time nominate for this purpose.
() Payments by the Administrative Agent to the Lenders. Except
as otherwise contemplated by subsection (c) above, any amount payable by the
Administrative Agent to the Lenders under this Agreement in the currency of a
participating member state shall be paid in the euro unit.
() Payments by the Administrative Agent Generally. With
respect to the payment of any amount denominated in the euro or in a national
currency unit, the Administrative Agent shall not be liable to any of the
Borrowers, Guarantors or any of the Lenders in any way whatsoever for any
delay, or the consequences of any delay, in the crediting to any account of
any amount required by any Loan Document to be paid by the Administrative
Agent if the Administrative Agent shall have taken all relevant steps to
achieve, on the date required by such Loan Document, the payment of such
amount in immediately available, freely transferrable, cleared funds (in the
euro unit or, as the case may be, in a national currency unit) to the account
with the bank in the principal financial center in the participating member
state which the relevant Borrower, Guarantor or Lender, as the case may be,
shall have specified for such purpose. In this subsection (h), `all relevant
steps' means all such steps as may be prescribed from time to time by the
regulations or operating procedures of such clearing or settlement system as
the Administrative Agent may from time to time determine for the purpose of
clearing or settling payments of the euro.
() Basis of Accrual. If the basis of accrual of interest or
fees expressed in this Agreement or any other Loan Document with respect to
the currency of any state that becomes a participating state shall be
inconsistent with any convention or practice in the London Interbank Market
for the basis of accrual of interest or fees in respect of the euro, such
convention or practice shall replace such expressed basis effective as of and
from the date on which such state becomes a participating member state;
provided, however, that if any Loan in the currency of such state is
outstanding immediately prior to such date, such replacement shall take
effect, with respect to such Loan, at the end of the then current Eurocurrency
Interest Period.
() Rounding and Other Consequential Changes. Without prejudice
and in addition to any method of conversion or rounding prescribed by any EMU
legislation and without prejudice to the respective liabilities for
indebtedness of any Borrower or Guarantor to any Lender and any Lender to any
Borrower or Guarantor under or pursuant to any Loan Document:
() each reference in each Loan Document to a minimum amount (or
an integral multiple thereof) in a national currency unit to be paid
to or by the Administrative Agent shall be replaced by a reference to
such reasonably comparable and convenient amount (or an integral
multiple thereof) in the euro unit as the Administrative Agent may
from time to time specify; and
() except as expressly provided in this Section 3.06, each
provision of each Loan Document shall be subject to such reasonable
changes of construction as the Administrative Agent may from time to
time specify to be necessary or appropriate to reflect the
introduction of or changeover to the euro in participating member
states.
ARTICLE
INTEREST AND FEES
4.0. Interest on the Loans and Other Obligations. () Rate of
Interest. All Loans and the outstanding principal balance of all other
Obligations shall bear interest on the unpaid principal amount thereof from
the date such Loans are made and such other Obligations are due and payable
until paid in full, except as otherwise provided in Section 4.01(d), as
follows:
() If a Base Rate Loan or such other Obligation, at a rate per
annum equal to the sum of (A) the Base Rate as in effect from time to
time as interest accrues and (B) the Applicable Base Rate Margin in
effect from time to time; and
() If a Eurocurrency Rate Loan, at a rate per annum equal to
the sum of (A) the Eurocurrency Rate determined for the applicable
Eurocurrency Interest Period, plus (B) the Applicable Eurocurrency
Rate Margin in effect from time to time during such Eurocurrency
Interest Period.
The applicable basis for determining the rate of interest on the Loans shall
be selected by the Company at the time a Notice of Borrowing or a Notice of
Conversion/Continuation is delivered by the Company to the Administrative
Agent; provided, however, the Company may not select the Eurocurrency Rate as
the applicable basis for determining the rate of interest on such a Loan if
(x) such Loan is to be made on the Effective Date or (y) at the time of such
selection an Event of Default has occurred and is continuing. If on any day
any Loan is outstanding with respect to which notice has not been timely
delivered to the Administrative Agent in accordance with the terms hereof
specifying the basis for determining the rate of interest on that day, then
for that day interest on that Loan shall be determined by reference to the
Base Rate (if denominated in Dollars) or the Eurocurrency Rate with a
Eurocurrency Interest Period of one month (if denominated in an Alternative
Currency).
() Interest Payments. () Interest accrued on each Base Rate
Loan shall be payable in arrears (A) on the first day of each calendar month
for the preceding calendar month, commencing on the first such day following
the making of such Base Rate Loan and (B) if not theretofore paid in full, at
maturity (whether by acceleration or otherwise) of such Base Rate Loan.
() Interest accrued on each Eurocurrency Rate Loan shall be
payable in arrears (A) on each Eurocurrency Interest Payment Date applicable
to such Loan and (B) if not theretofore paid in full, at maturity (whether by
acceleration or otherwise) of such Eurocurrency Rate Loan.
() Interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on the first day of each month,
commencing on the first such day following the incurrence of such Obligation
and (B) if not theretofore paid in full, at the time such other Obligation
becomes due and payable (whether by acceleration or otherwise).
() Conversion or Continuation. () The applicable Borrower
shall have the option (A) to convert at any time all or any part of
outstanding Base Rate Loans (other than Swing Loans) to Eurocurrency Rate
Loans; (B) to convert all or any part of outstanding Eurocurrency Rate Loans
denominated in Dollars having Eurocurrency Interest Periods which expire on
the same date to Base Rate Loans on such expiration date; and (C) to continue
all or any part of outstanding Eurocurrency Rate Loans having Eurocurrency
Interest Periods which expire on the same date as Eurocurrency Rate Loans, and
the succeeding Eurocurrency Interest Period of such continued Loans shall
commence on such expiration date; provided, however, no such outstanding Loan
may be continued as, or be converted into, a Eurocurrency Rate Loan (i) if the
continuation of, or the conversion into, would violate any of the provisions
of Section 4.02 or (ii) if an Event of Default has occurred and is continuing;
provided, further, however, during the continuance of an Event of Default,
Eurocurrency Rate Loans denominated in Alternative Currencies shall be
continued as Eurocurrency Rate Loans with Eurocurrency Interest Periods
determined by the Administrative Agent. Any conversion into or continuation of
Eurocurrency Rate Loans under this Section 4.01(c) shall, in the case of such
Loans denominated in Dollars, be in a minimum amount of $5,000,000 and in
integral multiples of $1,000,000 in excess of that amount and, in the case of
such Loans denominated in Alternative Currencies, in an aggregate minimum
amount equal to an integral multiple of 100,000 units of such currency and
(converted to the Dollar Equivalent thereof) equal to or greater than
$1,000,000. Notwithstanding anything in this Agreement to the contrary,
nothing in the Agreement shall permit (i) the conversion or redenomination of
any Base Rate Loan denominated in Dollars into a Eurocurrency Rate Loan
denominated in any currency other than Dollars and (ii) the conversion or
redenomination of any Eurocurrency Rate Loan denominated in any currency into
a Eurocurrency Rate Loan denominated into any other currency.
() To convert or continue a Loan under Section 4.01(c)(i), the
Company shall deliver a Notice of Conversion/Continuation to the
Administrative Agent (with a copy to First Chicago London, in the case of a
conversion or continuation of a Multicurrency Loan) no later than 11:00 a.m.
(Chicago time) (or 2:00 p.m. London time, as applicable) at least three (3)
Business Days in advance of the proposed conversion/continuation date. A
Notice of Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the
principal amount and currency of the Loan to be converted/continued,
(C) whether such Loan shall be converted and/or continued and (D) in the case
of a conversion to, or continuation of, a Eurocurrency Rate Loan, the requested
Eurocurrency Interest Period. In lieu of delivering a Notice of
Conversion/Continuation, the Company may give the Administrative Agent (and
First Chicago London, in the case of a conversion or continuation of a
Multicurrency Loan) telephonic notice of any proposed conversion/continuation
by the time required under this Section 4.01(c)(ii), and such notice shall be
confirmed in writing delivered to the Administrative Agent promptly (but in no
event later than 4:00 p.m. (Chicago time) on the same day). Promptly after
receipt of a Notice of Conversion/Continuation under this Section 4.01(c)(ii)
(or telephonic notice in lieu thereof), the Administrative Agent shall notify
each Lender by telex or telecopy, or other similar form of transmission, of
the proposed conversion/continuation. Any Notice of Conversion/Continuation
for conversion to, or continuation of, a Loan (or telephonic notice in lieu
thereof) shall be irrevocable, and the Borrowers shall be bound to convert or
continue in accordance therewith.
() Default Interest. Notwithstanding the rates of interest
specified in Section 4.01(a) or elsewhere herein, effective immediately upon
the occurrence of any Event of Default and for as long thereafter as such
Event of Default shall be continuing, the principal balance of all Loans and,
to the extent permitted by law, interest accrued but unpaid thereon shall bear
interest at a rate which is two percent (2.0%) per annum in excess of the rate
of interest applicable to such Loans from time to time (unless waived in
writing by the Requisite Lenders).
() Computation of Interest. Interest on (i) Base Rate Loans
and all other Obligations shall be computed on the basis of the actual number
of days elapsed in the period during which interest accrues and a 365/366 day
year and (ii) Eurocurrency Rate Loans shall be computed on the basis of the
actual number of days elapsed in the period during which interest accrues and
a year of 360 days or, in the case of any Alternative Currency, as market
practice may differ for such currency, but in no event less than a year of 360
days. In computing interest on any Loan, the date of the making of the Loan
shall be included and the date of payment shall be excluded.
() Changes; Legal Restrictions. If after the date hereof any
Lender or Issuing Bank determines that the adoption or implementation of or
any change in or in the interpretation or administration of any law or
regulation or any guideline or request from any central bank or other
Governmental Authority or quasi-governmental authority exercising
jurisdiction, power or control over any Lender, Issuing Bank or over banks or
financial institutions generally (whether or not having the force of law),
compliance with which, in each case after the date hereof:
() subjects a Lender or an Issuing Bank (or its Applicable
Lending Office) to charges (other than Taxes) of any kind which is
applicable to the Commitments of the Lenders and/or the Issuing Banks
to make Eurocurrency Rate Loans (including, without limitation, any
conversion of any Loan denominated in an Alternative Currency (other
than the euro) into a Loan denominated in euros) or to issue and/or
participate in Letters of Credit or changes the basis of taxation of
payments to that Lender or Issuing Bank of principal, fees, interest,
or any other amount payable hereunder with respect to Eurocurrency
Rate Loans or Letters of Credit; or
() imposes, modifies, or holds applicable, any reserve
(other than reserves taken into account in calculating the
Eurocurrency Rate), special deposit, compulsory loan, FDIC insurance
or similar requirement against assets held by, or deposits or other
liabilities (including those pertaining to Letters of Credit) in or
for the account of, advances or loans by, commitments made, or other
credit extended by, or any other acquisition of funds by, a Lender or
an Issuing Bank or any Applicable Lending Office or Eurocurrency
Affiliate of that Lender or Issuing Bank;
and the result of any of the foregoing is to increase the cost to that Lender
or Issuing Bank of making, renewing or maintaining the Loans (including,
without limitation, any conversion of any Loan denominated in an Alternative
Currency (other than the euro) into a Loan denominated in euro) or its
Commitments or issuing or participating in the Letters of Credit or to reduce
any amount receivable thereunder; then, in any such case, upon written demand
by such Lender or Issuing Bank (with a copy of such demand to the
Administrative Agent), the Company shall immediately pay to the Administrative
Agent for the account of such Lender or Issuing Bank, from time to time as
specified by such Lender or Issuing Bank, such amount or amounts as may be
necessary to compensate such Lender or Issuing Bank or its Eurocurrency
Affiliate for any such additional cost incurred or reduced amount received.
Such demand shall be accompanied by a statement as to the amount of such
compensation and include a detailed summary of the basis for such demand.
Such statement shall be conclusive and binding for all purposes, absent
manifest error.
() Confirmation of Eurocurrency Rate. Upon the reasonable
request of the Company from time to time, the Administrative Agent shall
promptly provide to the Company such information with respect to the
applicable Eurocurrency Rate as may be so requested.
4.0. Special Provisions Governing Eurocurrency Rate Loans.
With respect to Eurocurrency Rate Loans:
() Amount of Advance. Each Eurocurrency Rate Loan shall be in
the minimum amount specified in Section 2.02(a).
() Determination of Eurocurrency Interest Period. By giving
notice as set forth in Section 2.02(b) (with respect to a Borrowing of a
Eurocurrency Rate Loan) or Section 4.01(c) (with respect to a conversion into
or continuation of a Eurocurrency Rate Loan), the Company shall have the
option, subject to the other provisions of this Section 4.02, to select an
interest period (each a "Eurocurrency Interest Period") to apply to the Loans
described in such notice, subject to the following provisions:
() Except as otherwise agreed pursuant to Section 4.01(a), the
Company may only select, as to a particular Borrowing of Eurocurrency
Rate Loans, a Eurocurrency Interest Period of either one, two, three
or six months in duration; provided, however, that the Company may
request a Eurocurrency Interest Period of less than one month with
respect to Multicurrency Loans only if (A) such request is approved by
the Administrative Agent and (B) such Eurocurrency Interest Period is
reasonably available to the Multicurrency Lenders;
() In the case of immediately successive Eurocurrency Interest
Periods applicable to a Borrowing of Eurocurrency Rate Loans, each
successive Eurocurrency Interest Period shall commence on the day on which
the next preceding Eurocurrency Interest Period expires;
() If any Eurocurrency Interest Period would otherwise expire
on a day which is not a Business Day, such Eurocurrency Interest
Period shall be extended to expire on the next succeeding Business Day
if the next succeeding Business Day occurs in the same calendar month,
and if there shall be no succeeding Business Day in such calendar
month, such Eurocurrency Interest Period shall expire on the
immediately preceding Business Day;
() The Company may not select a Eurocurrency Interest Period as
to any Loan if such Eurocurrency Interest Period terminates later than
the Revolving Credit Termination Date or the Term Loan Maturity Date,
as the case may be;
() The Company may not select a Eurocurrency Interest Period
with respect to any portion of principal of a Term Loan which extends
beyond a date on which the Company is required to make a scheduled
payment of such portion of principal; and
() There shall be no more than fifteen (15) Eurocurrency
Interest Periods in effect at any one time.
() Determination of Interest Rate. As soon as practicable on
the second Business Day prior to the first day of each Eurocurrency Interest
Period (the "Eurocurrency Interest Rate Determination Date"), the
Administrative Agent shall determine (pursuant to the procedures set forth in
the definition of "Eurocurrency Rate") the interest rate which shall apply to
Eurocurrency Rate Loans, for which an interest rate is then being determined
for the applicable Eurocurrency Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to the Borrower and
to each Lender. The Administrative Agent's determination shall be presumed to
be correct, absent manifest error, and shall be binding upon the Borrowers.
() Interest Rate Unascertainable, Inadequate or Unfair. In the
event that at least one (1) Business Day before the Eurocurrency Interest Rate
Determination Date:
() the Administrative Agent determines that adequate and fair
means do not exist for ascertaining the applicable interest rates by
reference to which the Eurocurrency Rate then being determined is to
be fixed;
() the Requisite Lenders advise the Administrative Agent that
deposits in Dollars or in the applicable Alternative Currency in the
principal amounts of the Eurocurrency Rate Loans comprising such
Borrowing are not generally available in the London interbank market
for a period equal to such Eurocurrency Interest Period; or
() the Requisite Lenders advise the Administrative Agent that
the Eurocurrency Rate, as the case may be, as determined by the
Administrative Agent, after taking into account the adjustments for
reserves and increased costs provided for in Section 4.01(f), will not
adequately and fairly reflect the cost to such Lenders of funding
Loans of such Type and in the currency in which such Loans are
denominated;
then the Administrative Agent shall forthwith give notice thereof to the
Borrower, whereupon (until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist) the right of
the Borrower to elect to have Loans bear interest based upon the Eurocurrency
Rate shall be suspended and each outstanding Eurocurrency Rate Loan shall be
converted into a Base Rate Loan in Dollars (regardless of the currency of such
Loan) on the last day of the then current Eurocurrency Interest Period
therefor, and any Notice of Borrowing for which Revolving Loans have not then
been made that requests a Loan of a Type that has been suspended shall be
deemed to be a request for Base Rate Loans in Dollars, notwithstanding any
prior election by the Borrower to the contrary.
() Illegality. () If at any time any Lender determines (which
determination shall, absent manifest error, be final and conclusive and
binding upon all parties) that the making or continuation of any Eurocurrency
Rate Loan has become unlawful or impermissible by compliance by that Lender
with any law, governmental rule, regulation or order of any Governmental
Authority (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful or would result in costs or penalties),
then, and in any such event, such Lender may give notice of that
determination, in writing, to the Company and the Administrative Agent, and
the Administrative Agent shall promptly transmit the notice to each other
Lender.
() When notice is given by a Lender under Section 4.02(e)(i),
(A) the Borrowers' right to request from such Lender and such Lender's
obligation, if any, to make Eurocurrency Rate Loans shall be immediately
suspended, and such Lender shall make a Base Rate Loan in Dollars as part of
any requested Borrowing of Eurocurrency Rate Loans and (B) if the affected
Eurocurrency Loans are then outstanding, the Borrower shall immediately, or if
permitted by applicable law, no later than the date permitted thereby, upon at
least one (1) Business Day's prior written notice to the Administrative Agent
and the affected Lender, convert each such Loan into a Base Rate Loan in
Dollars (regardless of the currency of such Loan).
() If at any time after a Lender gives notice under Section
4.02(e)(i) in respect of a Eurocurrency Rate Loan such Lender determines that
it may lawfully make Loans of such Type, such Lender shall promptly give
notice of that determination, in writing, to the Company and the
Administrative Agent, and the Administrative Agent shall promptly transmit the
notice to each other Lender. The Borrowers' right to request, and such
Lender's obligation, if any, to make Loans of such Type shall thereupon be
restored.
() Compensation. In addition to all amounts required to be
paid by the Borrowers pursuant to Section 4.01, the Borrowers shall compensate
each Lender, upon demand, for all losses, expenses and liabilities (including,
without limitation, any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurocurrency Rate Loans to the Borrowers but excluding
any loss of the Applicable Eurocurrency Rate Margin on the relevant Loans)
which that Lender may sustain (i) if for any reason (other than the gross
negligence or willful misconduct of a Lender or the Administrative Agent) a
Borrowing, conversion into or continuation of Eurocurrency Rate Loans does not
occur on a date specified therefor in a Notice of Borrowing or a Notice of
Conversion/Continuation given by the Company or in a telephonic request by it
for borrowing or conversion/continuation or a successive Eurocurrency Interest
Period does not commence after notice therefor is given pursuant to Section
4.01(c), (ii) if for any reason any Eurocurrency Rate Loan is prepaid
(including, without limitation, mandatorily pursuant to Section 3.01) on a
date which is not the last day of the applicable Eurocurrency Interest Period,
(iii) as a consequence of a required conversion of a Eurocurrency Rate Loan to
a Base Rate Loan as a result of any of the events indicated in Section 4.02(e)
or (iv) as a consequence of any failure by any Borrower to repay Eurocurrency
Rate Loans when required by the terms hereof. The Lender making demand for
such compensation shall deliver to the Company concurrently with such demand a
written statement in reasonable detail as to such losses, expenses and
liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.
() Currency Exchanges. At any time Eurocurrency Rate Loans
denominated in an Alternative Currency are required to be converted to Base
Rate Loans pursuant to Sections 4.01(d) and (e) or otherwise, the Borrowers
shall indemnify the Lenders against any loss or liability arising out of or as
a result of the conversion of such Alternative Currency into Dollars and
exchange costs and taxes payable in connection with such conversion and the
Borrower to which such Loan was made shall forthwith on written demand
therefor pay to the Agent, for the benefit of the applicable Lenders, the
amount of such loss, liability, costs and taxes.
() Booking of Eurocurrency Rate Loans. Any Lender may make,
carry or transfer Eurocurrency Rate Loans at, to, or for the account of, its
Eurocurrency Lending Office or Eurocurrency Affiliate or its other offices or
Affiliates. No Lender shall be entitled, however, to receive any greater
amount under Sections 3.03, 3.04, 4.01(f) or 4.02(f) as a result of the
transfer of any such Eurocurrency Rate Loan to any office (other than such
Eurocurrency Lending Office) or any Affiliate (other than such Eurocurrency
Affiliate) than such Lender would have been entitled to receive immediately
prior thereto, unless (i) the transfer occurred at a time when circumstances
giving rise to the claim for such greater amount did not exist and (ii) such
claim would have arisen even if such transfer had not occurred.
() Affiliates Not Obligated. No Eurocurrency Affiliate or other
Affiliate of any Lender shall be deemed a party hereto or shall have any
liability or obligation hereunder.
4.0. Fees. () Letter of Credit Fee. In addition to any
charges paid pursuant to Section 2.04(g), the Company shall pay to the
Administrative Agent, for the account of the Lenders and the Issuing Banks as
provided in the following sentence, with respect to any Letter of Credit
issued by any Issuing Bank, a fee per annum (the "Letter of Credit Fee") equal
to the Applicable Eurocurrency Rate Margin as of the date of each such payment
on the undrawn face amount of such Letter of Credit, payable in arrears on the
first day of each calendar month for the preceding calendar month. The
Administrative Agent shall pay to the Issuing Bank for its own account from
the Letter of Credit Fee in respect of any Letter of Credit issued by it in an
amount equal to one-eighth percent (0.125%) per annum on the undrawn face
amount of such Letter of Credit, and that the Administrative Agent shall pay
the remainder of each such Letters of Credit Fee to the Lenders in accordance
with their respective Pro Rata Shares.
() Unused Commitment Fee. The Company shall pay to the
Administrative Agent, for the account of the Lenders in accordance with their
respective Pro Rata Shares, a fee (the "Unused Commitment Fee"), accruing from
the period beginning on the Effective Date and ending on but not including the
Revolving Credit Termination Date at the Unused Commitment Fee Rate in effect
from time to time on the average amount by which the Revolving Credit
Commitments exceed the Revolving Credit Obligations for such period, the
accrued portion of such fee being payable (A) quarterly, in arrears,
commencing on the last day of the quarter in which the Effective Date occurs
and (B) on the Revolving Credit Termination Date. Notwithstanding the
foregoing, in the event that any Lender fails to fund its Pro Rata Share of
any Loan requested by any Borrower which such Lender is obligated to fund
under the terms hereof, such Lender shall not be entitled to any Unused
Commitment Fees with respect to its Revolving Credit Commitment until such
failure has been cured in accordance with Section 3.02(b)(v)(B) and the
Company shall not be required to pay any Unused Commitment Fees to such Lender
or to the Administrative Agent for the account of such Lender for such period.
() Other Fees. The Company shall pay such other fees as the
Company is obligated to pay pursuant to the Letter Agreement.
() Calculation and Payment of Fees. All of the above fees
shall be calculated on the basis of the actual number of days elapsed in a
365/366-day year. All such fees shall be payable in addition to, and not in
lieu of, interest, expense reimbursements, indemnification and other
Obligations. Fees shall be payable to the Administrative Agent at its
Applicable Payment Office in accordance with Section 3.02. All fees shall be
fully earned and nonrefundable when paid. All fees specified or referred to
herein due to the Administrative Agent, either CoAgent, any Issuing Bank or
any Lender, including, without limitation, those referred to in this Section
4.03, shall bear interest, if not paid when due, at the interest rate for
Loans in accordance with Section 4.01(d), shall constitute Obligations and
shall be secured by the Collateral.
ARTICLE
CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.0. Conditions Precedent to the Effectiveness of this
Agreement. This Agreement shall become effective on the date (the "Effective
Date") when the following conditions precedent have been satisfied:
() Documents. The Administrative Agent (on behalf of itself
and the Lenders) shall have received on or before the Effective Date all of
the following:
() this Agreement, the Notes and all other agreements,
documents and instruments described in the List of Closing Documents
attached hereto and made a part hereof as Exhibit H, each duly
executed where appropriate and in form and substance satisfactory to
the Lenders and in sufficient copies for each of the Lenders; without
limiting the foregoing, the Company hereby directs its counsel,
Porter, Wright, Morris & Arthur, to prepare and deliver to the
Administrative Agent, the CoAgents, the Lenders and the Issuing Banks,
the opinion referred to in such List of Closing Documents with respect
to such counsel;
() a pro forma estimated balance sheet of the Borrower and its
Subsidiaries as of the Effective Date, as referred to in Section
6.01(h) giving effect to the transactions contemplated in the Loan
Documents; and
() such additional documentation as the Administrative Agent or
either CoAgent may reasonably request.
() Perfection of Liens. All certificates representing Capital
Stock included in the Collateral shall have been delivered to the
Administrative Agent (with duly executed stock powers, as appropriate) and all
instruments included in the Collateral shall have been delivered to the
Administrative Agent (duly endorsed to the Administrative Agent, as
appropriate). If not previously filed in connection with the Existing Credit
Agreement, the Administrative Agent shall have received UCC-1 Financing
Statements duly executed that shall, when filed in the appropriate
jurisdictions, be sufficient to perfect Liens on all of the Collateral, to the
extent that such Liens may be perfected by the filing of UCC-1 Financing
Statements. All UCC-1 Financing Statements executed in favor of the Existing
Administrative Agent as secured party shall have been assigned to the
Administrative Agent. The Existing Administrative Agent shall have assigned
the Mortgages, the Trademark Security Agreements and the Patent Security
Agreements to the Administrative Agent and the Company shall have executed such
modifications to the Mortgages encumbering the Real Property set forth on
Schedule 6.01-V and obtained appropriate endorsements to the applicable Title
Policies from the Title Company as the Administrative Agent may deem necessary
in order to maintain the perfection and priority of the Liens.
() No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and the Administrative Agent
shall not have received any notice that any action, suit, investigation,
litigation or proceeding is pending or threatened in any court or before any
arbitrator or Governmental Authority which purports to (i) enjoin, prohibit,
restrain or otherwise affect (A) the making of the Loans on the Effective Date
or (B) the consummation of the transactions contemplated pursuant to the Loan
Documents or (ii) would be reasonably expected to have a Material Adverse
Effect.
() No Change in Condition. No change in the condition
(financial or otherwise), business, performance, Properties, operations or
prospects of the Borrower and its Subsidiaries taken as whole shall have
occurred since December 31, 1997, which change has had or is reasonably likely
to have a Material Adverse Effect (other than any such change resulting from
the consummation of the Recapitalization Transactions).
() No Default. No Event of Default or Default shall have
occurred and be continuing or would result from the making of the Loans.
() Representations and Warranties. All of the representations
and warranties contained in Section 6.01 and in any of the other Loan
Documents shall be true and correct in all material respects on and as of the
Effective Date (other than representations and warranties which expressly
speak as of a different date), in each case both before and after giving
effect to the funding of the Loans.
() Fees and Expenses Paid. On the Effective Date there shall
have been paid to the Administrative Agent, for the account of the Lenders,
the Co-Agents and the Administrative Agent, for their respective individual
accounts, all fees (including, without limitation, the reasonable legal fees
of counsel to the Existing Administrative Agent, the Syndication Agent and
local counsel to the Administrative Agent and the Syndication Agent for the
benefit of the Lenders) due and payable on or before the Effective Date
(including, without limitation, all such fees described in the Letter
Agreement), and all expenses (including, without limitation, legal expenses)
due and payable on or before the Effective Date, in each case for which
invoices (containing, where appropriate, a description of all such fees and
expenses) have been provided to the Company.
() Effective Date. The Effective Date shall have occurred on
or before November 24, 1998.
() Consents, Etc. Except as set forth on Schedule 6.01E, each
of the Borrowers and the Company's Subsidiaries shall have received all
consents and authorizations required pursuant to any material Contractual
Obligation with any other Person and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority as may be necessary to allow each of the Borrowers and
the Company's Subsidiaries lawfully (A) to execute, deliver and perform, in
all material respects, their respective obligations hereunder, under the other
Loan Documents to which each of them is, or shall be, a party and each other
agreement or instrument to be executed and delivered by each of them pursuant
thereto or in connection therewith and (B) to create and perfect the Liens on
the Collateral to be owned by each of them in the manner and for the purpose
contemplated by the Loan Documents, except for Liens that cannot be created or
perfected by filings with or notices to a Governmental Authority. No such
consent or authorization shall impose any conditions upon the Company or any
of its Subsidiaries that are not reasonably acceptable to the Lenders.
() Payment of Obligations under the Existing Credit Agreement.
On the Effective Date the Company shall have paid all interest, fees and
expenses (for which the Company shall have received invoices) accrued under
the Existing Credit Agreement through the Effective Date whether or not due
and payable on the Effective Date.
() 1998 Subordinated Notes. The Company shall have received
gross proceeds of at least $120,000,000 from the issuance of the 1998
Subordinated Notes.
5.0. Conditions Precedent to All Subsequent Revolving Loans,
Swing Loans and Letters of Credit. The obligation of each Lender to make any
Revolving Loan and of the Swing Loan Bank to make any Swing Loan, requested to
be made by it on any date after the Effective Date, and the agreement of each
Issuing Bank to Issue any Letter of Credit on any date after the Effective
Date is subject to the following conditions precedent as of each such date:
() Representations and Warranties. As of such date, both
before and after giving effect to the Loans to be made or the Letter of Credit
to be Issued on such date, all of the representations and warranties of
Holdco, the Company and the Company's Subsidiaries contained in Section 6.01
and in any other Loan Document (other than representations and warranties
which expressly speak as of a different date) shall be true and correct in all
material respects.
() No Default. No Event of Default or Default shall have
occurred and be continuing or would result from the making of the requested
Loan or the issuance of the requested Letter of Credit.
() No Legal Impediments. No law, regulation, order, judgment
or decree of any Governmental Authority shall, and the Administrative Agent
shall not have received from any Lender, the Swing Loan Bank or Issuing Bank,
as the case may be, notice that, in the reasonable judgment of such Person,
any action, suit, investigation, litigation or proceeding is pending or
threatened in any court or before any arbitrator or Governmental Authority
which is likely to enjoin, prohibit or restrain, or impose or result in the
imposition of any material adverse condition upon, (i) such Lender's making of
the requested Loan or participation in the requested Letter of Credit,
(ii) the Swing Loan Bank's making of the requested Swing Loan or (iii) such
Issuing Bank's issuance of the requested Letter of Credit.
() No Material Adverse Change. No change shall have occurred
in the condition (financial or otherwise), business, performance, Properties,
operations or prospects of the Borrower and its Subsidiaries taken as a whole
since December 31, 1997 which has had or is reasonably likely to have a
Material Adverse Effect (other than any such change resulting from the
consummation of the Recapitalization Transactions).
Each submission by the Company to the Administrative Agent of a Notice of
Borrowing with respect to a Revolving Loan or Swing Loan, each acceptance by
the applicable Borrower of the proceeds of each such Loan so made, each
submission by the Company to an Issuing Bank of a request for issuance of a
Letter of Credit and the issuance of such Letter of Credit, shall constitute a
representation and warranty by the Company as of the Funding Date in respect of
such Revolving Loan, as of the Swing Loan Funding Date in respect of such
Swing Loan, and as of the date of issuance of such Letter of Credit, that all
the conditions contained in this Section 5.02(a), (b) and (d) have been
satisfied or waived in accordance with Section 13.07.
ARTICLE
REPRESENTATIONS AND WARRANTIES
6.0. Representations and Warranties of the Borrowers. In
order to induce the Lenders and the Issuing Banks to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrowers
and to issue the Letters of Credit described herein, each Borrower represents
and warrants (only with respect to those representations and warranties set
forth below applicable to itself and its Subsidiaries) to each Lender, each
Issuing Bank, each CoAgent and the Administrative Agent as of the Effective
Date and thereafter on each date as required by Section 5.02(a) that the
following statements are true and correct:
() Organization; Corporate Powers. Each of the Company and the
Company's Subsidiaries (i) is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization,
(ii) is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which failure to be so
qualified and in good standing has or is reasonably likely to have a Material
Adverse Effect and (iii) has all requisite corporate power and authority to
own, operate and encumber its Property and to conduct its business as
presently conducted.
() Authority. () Each of the Company and the Company's
Subsidiaries has the requisite corporate power and authority to execute,
deliver and perform each of the Loan Documents to which it is a party.
() The execution, delivery and performance, as the case may be,
of each of the Loan Documents which have been executed and to which any of the
Company or the Company's Subsidiaries is a party and the consummation of the
transactions contemplated thereby, have been duly approved by each of the
boards of directors and (to the extent required by law) the shareholders of
the Company and the Company's Subsidiaries, respectively, and such approvals
have not been rescinded, revoked or modified in any manner. No other corporate
action or proceedings on the part of the Company or the Company's Subsidiaries
is necessary to consummate such transactions.
() Each of the Loan Documents to which the Company or the
Company's Subsidiaries is a party has been duly executed, or delivered on
behalf of the Company or the Company's Subsidiaries, as the case may be, and
constitutes its legal, valid and binding obligation, enforceable against such
Person in accordance with its terms (except as enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting the enforcement of creditors' rights and
remedies generally and general principles of equity), is in full force and
effect and no Default or Event of Default has occurred and is continuing.
() Subsidiaries; Ownership of Capital Stock. Schedule 6.01C
(i) contains a diagram indicating the corporate structure of Holdco, the
Company, the Company's Subsidiaries and any other Person in which Holdco, the
Company or any of the Company's Subsidiaries holds an equity interest as of
the Effective Date; and (ii) accurately sets forth as of the Effective Date,
(A) the correct legal name, the jurisdiction of incorporation, and Employer
Identification Number of each of Holdco, the Company and the Company's
Subsidiaries, and the jurisdictions in which each of Holdco, the Company and
the Company's Subsidiaries is qualified to transact business as a foreign
corporation, (B) the authorized, issued and outstanding shares of each class
of Capital Stock of Holdco, the Company and each of the Company's Subsidiaries
and, with respect to the Company and the Company's Subsidiaries, the owners of
such shares and (C) a summary of the direct and indirect partnership, joint
venture, or other equity interests, if any, of Holdco, the Company and each
Subsidiary of the Company in any Person that is not a corporation. Except as
set forth in Schedule 6.01C, none of the issued and outstanding Capital Stock
of Holdco, the Company or the Company's Subsidiaries is subject to any vesting,
redemption, or repurchase agreement, and there are no warrants or options
outstanding with respect to such Capital Stock. The outstanding Capital Stock
of Holdco, the Company and each of its Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable and the outstanding Capital Stock
of the Company and the Company's Subsidiaries is not Margin Stock.
() No Conflict. The execution, delivery and performance of
each of the Loan Documents to which the Company or any of the Company's
Subsidiaries is a party do not and shall not (i) conflict with the Constituent
Documents of the Company or any such Subsidiary, (ii) except as set forth on
Schedule 6.01D, conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any material
Requirement of Law or any material Contractual Obligation of the Company or
any such Subsidiary, or require the termination of any material Contractual
Obligation, (iii) result in or require the creation or imposition of any Lien
whatsoever upon any of the Property of the Company or any such Subsidiary,
other than Liens contemplated by the Loan Documents, or (iv) require any
approval of the Company's or any such Subsidiary's shareholders that has not
been obtained.
() Governmental Consents, etc. Except as set forth on
Schedule 6.01E, the execution, delivery and performance of each of the Loan
Documents to which the Company or any of the Company's Subsidiaries is a party
do not and shall not require any registration with, consent or approval of, or
notice to, or other action to, with or by any Governmental Authority, except
(i) filings, consents or notices which have been made, obtained or given, or,
in a timely manner, shall be made, obtained, or given and (ii) filings
necessary to perfect security interests in the Collateral to the extent that
such security interests may be perfected by filings. None of the Company or
any of the Company's Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, or the Investment Company Act of 1940, or any other federal or
state statute or regulation which limits its ability to incur the Obligations
or its ability to consummate the transactions contemplated in the Loan
Documents.
() Accommodation Obligations; Contingencies. Except as set
forth on Schedule 1.01.1, none of the Company or any of the Company's
Subsidiaries has any Accommodation Obligation, contingent liability or
liability for any Taxes, long-term lease or commitment, not reflected in its
financial statements dated December 31, 1997 delivered to the Administrative
Agent or otherwise disclosed to the Administrative Agent, the CoAgents and the
Lenders in the other Schedules hereto, which has or is reasonably likely to
have a Material Adverse Effect, except as permitted pursuant to Section 9.01
or 9.05 hereof.
() Restricted Junior Payments. None of the Company or any of
the Company's Subsidiaries has directly or indirectly declared, ordered, paid
or made or set apart any sum or Property of the Company or such Subsidiary for
any Restricted Junior Payment or agreed to do so, except as permitted pursuant
to Section 9.06 hereof, except in connection with the Recapitalization
Transactions.
() Financial Position. () The Company's pro forma estimated
balance sheet and the notes thereto referred to in Section 5.01(a)(ii) was
prepared in good faith and fairly presents on a pro forma basis (after giving
effect to the transactions contemplated herein) as of the Effective Date the
Company's consolidated financial condition, based on the information available
to the Company at the time so furnished.
() The Company's Projections were prepared in good faith and
are based upon facts and assumptions that were reasonable in light of the then
current and foreseeable business conditions of the Company and represented
management's reasonable best estimate of the projected financial performance
of the Company and its Subsidiaries based on the information available to the
Company at the time so furnished.
() Litigation; Adverse Effects. Except as set forth in
Schedule 6.01I or as disclosed on Schedule 6.01O, (A) there is no action,
suit, audit, proceeding, investigation or arbitration (or series of related
actions, suits, proceedings, investigations or arbitrations) before or by any
Governmental Authority or private arbitrator pending or, to the knowledge of
the Borrowers, threatened against the Company or any of the Company's
Subsidiaries or any Property of any of them (i) challenging the validity or
the enforceability of any of the Loan Documents or (ii) which has had or is
reasonably likely to have a Material Adverse Effect and (B) none of the
Company or any of the Company's Subsidiaries is (i) in violation of any
applicable Requirements of Law which violation has had or is reasonably likely
to have a Material Adverse Effect, or (ii) subject to or in default with
respect to any final judgment, writ, injunction, restraining order or order of
any nature, decree, rule or regulation of any court or Governmental Authority,
in each case which has had or is reasonably likely to have a Material Adverse
Effect.
() No Material Adverse Change. Since December 31, 1997, there
has occurred no event which has had or is reasonably likely to have a Material
Adverse Effect (other than any such change resulting from the consummation of
the Recapitalization Transactions).
() Payment of Taxes. Except as set forth in Schedule 6.01K,
all tax returns and reports of each of the Company and the Company's
Subsidiaries required to be filed have been timely filed, and all such tax
returns and reports are true and correct in all material aspects. All taxes,
assessments, fees and other governmental charges of every kind and nature
imposed upon their respective Property, business, income and franchises which
are due and payable have been paid, other than such taxes, assessments, fees
and other governmental charges (i) which are being contested in good faith by
the Company or such Subsidiary, as the case may be, by appropriate proceedings
diligently instituted and conducted and without danger of any material risk to
the Collateral and (ii) with respect to which a reserve or other appropriate
provision, if any, as is required in conformity with GAAP shall have been
made. The Company has no knowledge of any proposed tax assessment against the
Company or any of the Company's Subsidiaries that would have or is reasonably
likely to have a Material Adverse Effect.
() Performance. None of the Company or any of the Company's
Subsidiaries has received notice or has actual knowledge that (i) it is in
default in the performance, observance or fulfillment of any Contractual
Obligation applicable to it or (ii) any condition exists which, with the
giving of notice or the lapse of time or both, would constitute a default with
respect to any such Contractual Obligation; in each case, except where such
default or defaults, if any, would not have or are not reasonably likely to
have a Material Adverse Effect.
() Disclosure. The representations and warranties of each of
Holdco, the Company and the Company's Subsidiaries contained in the Loan
Documents, and all schedules, certificates and documents delivered to the
Administrative Agent, the CoAgents and the Lenders pursuant to the terms
hereof and the other Loan Documents do not contain any statement of a material
fact untrue when made or omit to state a material fact necessary in order to
make the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading when made.
() Requirements of Law. Each of the Company and the Company's
Subsidiaries is in compliance with all Requirements of Law applicable to it
and its business, in each case where the failure to so comply individually or
in the aggregate would have or is reasonably likely to have a Material Adverse
Effect.
() Environmental Matters. Except as set forth in Schedule
6.01-O and except for matters, conditions, operations and noncompliance which
would not have or be reasonably likely to have a Material Adverse Effect:
() the operations of the Company and the Company's Subsidiaries
comply in all material respects with all applicable Environmental, Health or
Safety Requirements of Law;
() the Company and each of the Company's Subsidiaries have
obtained or have taken appropriate steps, as required by Environmental, Health
or Safety Requirements of Law, to obtain all environmental, health and safety
Permits necessary for their respective operations, and all such Permits are in
good standing and each of the Company and each of the Company's Subsidiaries
are currently in compliance in all material respects with all terms and
conditions of such Permits;
() none of the Company or the Company's Subsidiaries or any of
their respective operations or present Property or, to the knowledge of the
Company or any of the Company's Subsidiaries, their past Property, are subject
to any judicial or administrative proceeding, order, judgment, decree, or
other agreement, or to the knowledge of the Company or any of the Company's
Subsidiaries, any investigation, alleging or addressing (i) a material
violation of any Environmental, Health or Safety Requirement of Law; (ii) any
Remedial Action; or (iii) any material Claims or Liabilities and Costs arising
from the Release or threatened Release of a Contaminant into the environment
nor has the Company or the Company's Subsidiaries received any notice of the
foregoing;
() none of the Company or the Company's Subsidiaries is the
owner or operator of any Property which has any of the following:
(i) any past or present on-site generation, treatment,
recycling, storage or disposal of any hazardous waste, as that
term is defined under 40 C.F.R. Part 261 or any state
equivalent;
(ii) any present or known past landfill, waste-pile,
underground storage tank or surface impoundment;
(iii) any asbestos-containing material; or
(iv) any polychlorinated biphenyls (PCBs) used by the Company
or the Company's Subsidiaries in hydraulic oils, electrical
transformers or other Equipment of the Company or the Company's
Subsidiaries;
() no Environmental Lien has attached to any Property of the
Company or any of the Company's Subsidiaries;
() there have been no Releases of any Contaminants into the
environment in reportable quantities by the Company or the Company's
Subsidiaries;
() the Company and the Company's Subsidiaries have no material
contingent liability in connection with any Release or threatened Release of
any Contaminants into the environment;
() to the knowledge of the Company, the Company and the
Company's Subsidiaries have not sent or directly arranged for the transport of
any waste to any site listed or proposed for listing on the National
Priorities List ("NPL") pursuant to CERCLA or on the Comprehensive
Environmental Response Compensation Liability Information System List
("CERCLIS"), or any similar state list;
() to the knowledge of the Company, none of the Company's or the
Company's Subsidiaries' present or past Property is listed or proposed for
listing on the NPL pursuant to CERCLA or on the CERCLIS or any similar state
list of sites that requires Remedial Action, and the Company and the Company's
Subsidiaries are presently unaware of any conditions on such Property which
would qualify such Property for inclusion on any such list.
() none of the Company or the Company's Subsidiaries is subject
to any Environmental Property Transfer Act as a result of the transactions
contemplated by the Loan Documents or to the extent such acts are applicable
to any such Property upon which a Lien will be or has been granted in
connection with the transactions contemplated by the Loan Documents, the
Company has fully complied with the requirements of such acts.
() ERISA Matters. Neither the Company nor any ERISA Affiliate
maintains or contributes to any Plan and its related trust, if applicable,
other than those listed on Schedule 6.01P hereto. Each Plan and its related
trust, if applicable, which is intended to be qualified under Sections 401(a)
and 501(a) of the Internal Revenue Code as currently in effect received a
favorable determination letter from the IRS as to its qualified status, or
such a letter will be applied for with the IRS for the Plan and its related
trust on or before December 31, 1994. Except as disclosed in Schedule 6.01P,
neither Company nor any ERISA Affiliate knows of any reason why such Plans or
trusts are no longer qualified or exempt following such determination by the
IRS. Except as disclosed in Schedule 6.01P, neither the Company nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan
within the meaning of Section 3(l) of ERISA which provides benefits to
employees after termination of employment other than as required by Section
601 of ERISA. Except as disclosed in Schedule 6.01P the Company and all of
its ERISA Affiliates are in compliance with the responsibilities, obligations
or duties imposed on them by ERISA, the Internal Revenue Code and regulations
promulgated thereunder with respect to all Plans, except where the failure to
so comply individually or in the aggregate would have or is reasonably likely
to have a Material Adverse Effect. No Benefit Plan has incurred any
accumulated funding deficiency (as defined in Sections 302(a)(2) of ERISA and
412(a) of the Internal Revenue Code) whether or not waived. Except as
disclosed in Schedule 6.01P, neither the Company nor any ERISA Affiliate nor
any fiduciary of any Plan which is not a Multiemployer Plan (i) has engaged in
a nonexempt prohibited transaction described in Sections 406 of ERISA or 4975
of the Internal Revenue Code, which prohibited transaction has had or is
reasonably likely to have a Material Adverse Effect or (ii) has taken or
failed to take any action which would constitute or result in a Termination
Event. Neither the Company nor any ERISA Affiliate has any liability under
Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA with respect to a Benefit
Plan. Neither the Company nor any ERISA Affiliate has incurred any liability
to the PBGC which remains outstanding other than the payment of premiums, and
there are no premium payments which have become due which are unpaid.
Schedule B to the most recent annual report filed with the IRS with respect to
each Benefit Plan and furnished to the Administrative Agent is complete and
accurate in all material respects. Since the date of each such Schedule B,
there has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither the
Company nor any ERISA Affiliate has (i) failed to make a required contribution
or payment to a Multiemployer Plan or (ii) made a complete or partial
withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer Plan.
Neither the Company nor any ERISA Affiliate has failed to make a required
installment or any other required payment under Section 412 of the Internal
Revenue Code on or before the due date for such installment or other payment.
Neither the Company nor any ERISA Affiliate is required to provide security to
a Benefit Plan under Section 401(a)(29) of the Internal Revenue Code due to a
Plan amendment that results in an increase in current liability for the plan
year. The Company has made available to the Administrative Agent copies of
all of the following: each Benefit Plan and related trust agreement
(including all amendments to such Plan and trust) in existence, or for which
the Company or any ERISA Affiliate has taken any corporate action to authorize
the adoption thereof, as of the Effective Date and in respect of which the
Company or any ERISA Affiliate is currently an "employer" as defined in
section 3(5) of ERISA, and the most recent summary plan description, actuarial
report, determination letter issued by the IRS and Form 5500 filed in respect
of each such Benefit Plan in existence; a listing of all of the Multiemployer
Plans currently contributed to by the Company or any ERISA Affiliate with the
aggregate amount of the most recent annual contributions required to be made
by the Company and all ERISA Affiliates to each such Multiemployer Plan, any
information which has been provided to the Company or an ERISA Affiliate
regarding withdrawal liability under any Multiemployer Plan and the collective
bargaining agreement pursuant to which such contribution is required to be
made; each employee welfare benefit plan within the meaning of Section 3(l) of
ERISA which provides benefits to employees of the Company or any of its
Subsidiaries after termination of employment other than as required by Section
601 of ERISA, the most recent summary plan description for such plan and the
aggregate amount of the most recent annual payments made to terminated
employees under each such plan.
() Foreign Employee Benefit Matters. Each Foreign Employee
Benefit Plan is in compliance with all Requirements of Laws applicable thereto
and the respective requirements of the governing documents for such Plan,
except where the failure to so comply individually or in the aggregate would
not have or be reasonably likely to have a Material Adverse Effect. With
respect to any Foreign Employee Benefit Plan maintained by the Company, any of
its subsidiaries or any ERISA Affiliate, reasonable reserves have been
established in accordance with prudent business practice or where required by
ordinary accounting practices in the jurisdiction in which such Plan is
maintained. No such plan has aggregate unfunded liabilities, after giving
effect to any reserves for such liabilities, which have or are reasonably
likely to have a Material Adverse Effect. There are no actions, suits or claims
pending or, to the knowledge of the Borrowers or any of the Subsidiary
Guarantors, threatened against the Company, any of its Subsidiaries or any
ERISA Affiliate with respect to any Foreign Employee Benefit Plan which have
had or are reasonably likely to have a Material Adverse Effect.
() Labor Matters. Except as set forth in Schedule 6.01R, as of
the Effective Date there is no collective bargaining agreement covering any of
the employees of the Company or any Subsidiary of the Company.
() Securities Activities. None of the Company or any of the
Company's Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.
() Solvency. After giving effect to the transactions
contemplated in the Loan Documents (including, without limitation, the
issuance of the Subordinated Notes and the consummation of the Stock
Repurchase) and the Loans to be made on the Effective Date or such other date
as Loans requested hereunder are made and the disbursement of the proceeds of
such Loans pursuant to the Company's instructions, each of the Borrowers and
the Subsidiary Guarantors is Solvent.
() Patents, Trademarks, Permits, Etc.; Government Approvals.
() The Company and each of the Company's Subsidiaries own, are licensed or
otherwise have the lawful right to use, or have all permits and other
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the conduct of
their businesses as currently conducted except where the failure to do so
would not have or be reasonably likely to have a Material Adverse Effect.
Except as set forth on Schedule 6.01U, no claims are pending or, to the best
of Company's knowledge, threatened in writing that the Company or any of its
Subsidiaries is infringing upon the rights of any Person with respect to such
permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes, except for such claims which
would not have or are not reasonably likely to have a Material Adverse Effect.
() Except for Liens granted to the Administrative Agent for the
benefit of the Administrative Agent, the CoAgents, the Issuing Banks and the
Lenders, the transactions contemplated by the Loan Documents shall not impair
the ownership of or rights under (or the license or other right to use, as the
case may be) any permits and governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how or processes by the Company or
any of the Company's Subsidiaries in any manner which would have or is
reasonably likely to have a Material Adverse Effect.
() Properties. Each of the Company and the Company's
Subsidiaries has good, and in the case of Real Property, indefeasible title to
all of its Property (tangible and intangible) owned by it or a valid leasehold
interest in all of its leased Property (except insofar as indefeasibility may
be limited by any laws or regulations of any Governmental Authority affecting
such Property), and all such Property is free and clear of all Liens, except
Liens securing the Obligations and Liens permitted under Section 9.03.
Schedule 6.01V contains a true and complete list of all of the Real Property
owned in fee simple by each of the Company and the Company's Domestic
Subsidiaries as of the Effective Date with a book value in excess of $500,000,
and a true and complete list of all Leases in effect on the Effective Date
which, pursuant to the terms thereof, have annual rental payments in excess of
$750,000. Substantially all of the assets and Property owned by or leased to
the Company and each such Subsidiary and being used by the Company or each
such Subsidiary are in adequate operating condition and repair, reasonable and
ordinary wear and tear excepted, and are free and clear of any known defects
except such defects that do not substantially interfere with the continued use
thereof in the conduct of normal operations of the Company or such
Subsidiaries. Except for Liens granted to the Administrative Agent neither
this Agreement nor any other Loan Document, nor any transaction contemplated
herein or therein, shall affect any right, title or interest of the Company
or any such Subsidiary in and to any of such Properties in a manner that has
or is reasonably likely to have a Material Adverse Effect.
() Insurance. Schedule 6.01W accurately sets forth as of the
date of such schedule all insurance policies and programs (including
self-insurance programs) currently in effect with respect to the respective
Properties and business of the Company and its Subsidiaries, specifying for
each such policy and program, (i) the amount thereof, (ii) the risks insured
against thereby, (iii) the name of the insurer, if any, and each insured party
thereunder, (iv) the policy or other identification number thereof, (v) the
expiration date thereof and (vi) the annual premium, if any, with respect
thereto. Such insurance policies and programs are, except as disclosed on
Schedule 6.01W, in amounts sufficient to cover the replacement value of the
respective Properties of the Company and its Subsidiaries in excess of
deductible amounts.
() Pledge of Collateral. The grant and perfection of the
security interests in the Capital Stock of each of the Company's Subsidiaries
constituting a portion of the Collateral for the benefit of the Administrative
Agent, the CoAgents, the Issuing Banks, the Lenders and the other Holders, as
contemplated by the terms of the Loan Documents, are not made in violation of
the registration provisions of the Securities Act, any applicable provisions
of other federal securities laws, state securities or "Blue Sky" law, foreign
securities law, or applicable general corporation law or in violation of any
other Requirement of Law.
() Transactions with Affiliates. Schedule 6.01Y lists as of
the Effective Date each existing material agreement and arrangement that is in
effect on the Effective Date that any of the Company or the Company's
Subsidiaries has entered into with any of their respective Affiliates. The
Administrative Agent shall have the right to request a true, accurate and
complete copy of each existing written agreement or arrangement set forth on
Schedule 6.01Y and a true, accurate and complete description of each existing
or proposed agreement or arrangement set forth in Schedule 6.01Y that is not
in writing.
(z) Subordinated Notes. The Subordinated Note Indenture has
been duly executed and delivered on behalf of the Company and constitutes its
legal, valid and binding obligation, enforceable against the Company in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, moratorium and other law affecting
creditors' rights generally, and to general principles of equity, is in full
force and effect. No material term or condition in the Subordinated Note
Indenture has been amended, modified or waived from the form of such indenture
approved in writing by the Lenders, except as permitted under Section 9.16.
The Company has performed and complied in all material respects with all the
terms, provisions, agreements and conditions set forth in the Subordinated Note
Indenture and required to be performed or complied with by the Company and no
default, event of default or breach of any covenant by any such party exists
thereunder. The Subordinated Notes have been duly issued in accordance with
the terms of the Subordinated Note Indenture and are subordinated to the
Obligations.
(aa) Merger Documents. Each of the Merger Documents to which
the Company or any of the Company's Subsidiaries is a party has been duly
executed and delivered on behalf of the Company or such Subsidiary, as the
case may be, and constitutes its legal, valid and binding obligation,
enforceable against such Person in accordance with its terms, subject, as to
enforceability, to applicable bankruptcy, insolvency, reorganization,
moratorium and other law affecting creditors' rights generally, and to general
principles of equity, and is in full force and effect. No material term or
condition in the Merger Documents affecting the Company or any of the
Company's Subsidiaries has been amended, modified or waived from the terms and
conditions contained in the Merger Documents delivered to the Administrative
Agent and the Lenders pursuant to this Agreement, except as permitted under
Section 9.16. Each of the Company and the Company's Subsidiaries that is a
party to the Merger Documents and, to the best of the Company's knowledge, all
other parties thereto have performed and complied in all material respects
with all the terms, provisions, agreements and conditions set forth therein and
required to be performed or complied with by such parties on or before
August 17, 1998, and no default, event of default or breach of any covenant by
any such party exists thereunder that has or could reasonably be expected to
have a Material Adverse Effect. The execution, delivery and performance of
the Merger Documents do not and shall not (i) conflict with the Constituent
Documents of the Company or any of its Subsidiaries, (ii) require any approval
of the Company's equity holders that has not been obtained; (iii) violate any
material provision of, or require any filing, registration, consent or
approval that has not been obtained under, any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award having
applicability to the Company or any of its Subsidiaries, or (iv) result in a
breach of or constitute a default or require any consent under material
contract, agreement, lease or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries or
any of their respective properties may be bound or affected. As of August 17,
1998, the representations and warranties of the Company and to the best of the
Company's knowledge, Holdco, contained in the Merger Documents do not contain
any statement of a material fact untrue when made or omit to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances under which they were made, not misleading when
made.
(bb) 1998 Subordinated Notes. The 1998 Subordinated Note
Indenture has been duly executed and delivered on behalf of the Company and
constitutes its legal, valid and binding obligation, enforceable against the
Company in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, moratorium and other law
affecting creditors' rights generally, and to general principles of equity,
and is in full force and effect. No material term or condition in the 1998
Subordinated Note Indenture has been amended, modified or waived from the form
of such indenture approved in writing by the Lenders, except as permitted
under Section 9.16. The Company has performed and complied in all material
respects with all the terms, provisions, agreements and conditions set forth
in the 1998 Subordinated Note Indenture and required to be performed or
complied with by the Company and no default, event of default or breach of any
covenant by any such party exists thereunder. The 1998 Subordinated Notes,
when issued, have been duly issued in accordance with the terms of the 1998
Subordinated Note Indenture and are subordinated to the Obligations.
(cc) Y2K Compliance. Except as disclosed on Schedule 6.01CC,
the Company:
(i) has reviewed, or has caused its Subsidiaries to review, the
computer systems necessary for its operations and the operations of its
Subsidiaries taken as a whole to determine whether such are Y2K
Compliant;
(ii) has arranged or will arrange for the replacement, repair
or upgrade of such computer systems that are not Y2K Compliant, and
for any necessary testing of such computer systems, in order to assure
that computer systems necessary to the business of the Company and its
Subsidiaries taken as a whole are Y2K Compliant or will be Y2K
Compliant prior to September 30, 1999, except for such noncompliance
that would not have a Material Adverse Effect;
(iii) has identified those of its customers, suppliers and
others whose failure to be Y2K Compliant would have a Material Adverse
Effect and has inquired of them whether their computer systems
necessary for their business relationship with the Company and its
Subsidiaries are Y2K Compliant, and upon request of the Administrative
Agent will provide to the Administrative Agent a summary of the
results of such inquiries;
(iv) will develop and implement a contingency plan for action
to be taken by the Company and its Subsidiaries in the event that any
of the computer systems of the Company and the Subsidiaries referred
to in clause (ii) above or the computer systems of others referred to
in clause (iii) above necessary for their business relationship with
the Company and its Subsidiaries are not Y2K Compliant; and
(v) has no reason to believe, and does not believe, that it
will be unable to repair, replace or upgrade its computer systems
described in clause (ii) above or perform any necessary testing on its
computer systems or implement any contingency plan referred to in
clause (iv) above, except for any inability that would not have a
Material Adverse Effect.
ARTICLE
REPORTING COVENANTS
The Company covenants and agrees that so long as any Revolving
Credit Commitment is outstanding and thereafter until payment in full of all
of the Obligations, unless the Requisite Lenders shall otherwise give prior
written consent thereto or shall have waived compliance:
7.0. Financial Statements. The Company shall maintain, and
shall cause each of the Company's Subsidiaries to maintain, a system of
accounting established and administered in accordance with sound business
practices to permit preparation of consolidated and consolidating financial
statements on a business unit basis and proper books of records and account
and each of the financial statements described below shall be prepared from
such system and records. The Company shall deliver or cause to be delivered
to the Administrative Agent, with sufficient copies for the Lenders, each of
the following within the time periods set forth below (which upon the written
consent of the Administrative Agent may be extended for up to fifteen (15)
additional days):
() [Intentionally omitted].
() Quarterly Reports. Within fifty (50) days after the end of
each of the first three fiscal quarters of each Fiscal Year, the consolidated
and consolidating balance sheets of the Company and its Subsidiaries and
divisions by business unit as at the end of such period and the related
consolidated and consolidating statements of income and cash flow of the
Company and its Subsidiaries and divisions by business unit (in respect of the
consolidating cash flow statements, in the format customarily prepared by the
Company for internal reporting purposes) for such fiscal quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
fiscal quarter, and for the corresponding period during the previous Fiscal
Year, all certified by the chief financial officer, treasurer or controller of
the Company as fairly (subject to normal year end adjustments) presenting in
all material respects the consolidated and consolidating financial position of
the Company and its Subsidiaries and divisions by business unit as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP.
() Annual Reports. Within ninety-five (95) days after the end
of each Fiscal Year, (i) audited consolidated financial statements of the
Company and its Subsidiaries certified by KPMG Peat Marwick or other
independent certified public accountants of recognized national standing
reasonably acceptable to the CoAgents, which report shall be certified without
qualification or modification as to scope of audit and as to the Company being
a going concern and shall state that such financial statements fairly present
in all material respects the consolidated financial position of the Company
and its Subsidiaries at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except for changes with which
such independent certified public accountants shall concur and which shall
have been disclosed in the notes to the financial statements) and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards and (ii) annual consolidating financial statements of the Company
and its Subsidiaries and divisions, by business unit, prepared by the Company.
() Officer's Certificate. Together with each delivery of any
financial statement pursuant to paragraphs (b) and (c) of this Section 7.01,
an Officer's Certificate of the Company substantially in the form of Exhibit I
(the "Compliance Certificate"), signed by the Company's chief financial
officer, treasurer or controller and setting forth calculations for the period
then ended, if applicable, for the Leverage Ratio (for purposes of determining
the Applicable Base Rate Margin, the Applicable Eurocurrency Rate Margin and
the Unused Commitment Fee Rate), Section 3.01(b) (including, without
limitation, calculations of Net Cash Proceeds and mandatory prepayments and
commitment reductions), the negative covenants of Article IX and the financial
covenants of Article X (including, without limitation, calculations made to
reflect changes in GAAP from GAAP in effect on the Effective Date). In
addition, within 50 days after the end of May 31, 1999, the Company shall
deliver a Compliance Certificate signed by the Company's chief financial
officer, treasurer or controller and setting forth calculations for the
twelve-month period then ended for the Leverage Ratio (for purposes of
determining the Applicable Base Rate Margin, the Applicable Eurocurrency Rate
Margin and the Unused Commitment Fee Rate).
() Business Plans; Financial Projections. Within (x) 10
Business Days prior to the end of each Fiscal Year, a preliminary draft of
each of the following, and (y) 55 days after the end of each Fiscal year, each
of the following:
() a consolidated annual budget (in the format customarily
utilized by the Company for making financial projections) of the
Company and its Subsidiaries for the succeeding Fiscal Year,
displaying on a quarterly basis anticipated balance sheets, and on a
monthly and quarterly basis forecasted revenues, operating income and
cash flow, all for each business unit of the Company and its
Subsidiaries and
() a forecast (in the format customarily utilized by the
Company for making financial projections) of balance sheets, income
statements and cash flow statements of the Company and its
Subsidiaries on a consolidated basis for each fiscal month in such
Fiscal Year and on an annual basis and for each business unit of the
Company and its Subsidiaries for each of the next succeeding Fiscal
Years up to and including the Fiscal Year during which it is
anticipated that the Obligations will be paid in full;
() Accountant's Statement. Together with each delivery of the
financial statements referred to in Section 7.01(c), a written statement of
KPMG Peat Marwick or another firm of independent certified public accountants
of recognized national standing acceptable to the CoAgents giving the report
stating (i) that their audit examination has included a review of the terms
hereof as it relates to accounting matters and (ii) whether, in connection
with their audit examination, any condition or event which constitutes an
Event of Default or Default has come to their attention, and if such condition
or event has come to their attention, specifying the nature and period of
existence thereof. The statement referred to above shall be accompanied by a
copy of the management letter or any similar report delivered to the Company
or to any officer or employee thereof by such accountants in connection with
such financial statements. Upon prior notice to the Company and, at the
Company's option, in the Company's presence, the Company shall authorize
Administrative Agent, each CoAgent and each Lender to communicate directly
with such accountants.
7.0. Notice of Events of Default. Within five (5) Business
Days after any of the chief executive officer, chief operating officer, chief
financial officer, treasurer or controller of the Company (i) obtains
knowledge of any condition or event which constitutes an Event of Default or
Default, or receives notice from any Lender, any Issuing Bank, either CoAgent
or the Administrative Agent with respect to a claimed Event of Default or
Default, (ii) obtains knowledge that any Person has given any written notice
to the Company or any Domestic Subsidiary or taken any other action with
respect to a claimed default or event or condition of the Type referred to in
Section 11.01(e) or (iii) obtains knowledge of any condition or event which
has or is reasonably likely to have a Material Adverse Effect, the Company
shall deliver to the Administrative Agent an Officer's Certificate specifying
(A) the nature and period of existence of any such claimed default, Event of
Default, Default, condition or event, (B) the notice given or action taken by
such Person in connection therewith, and (C) the remedial action the Company
has taken, is taking or proposes to take with respect thereto.
7.0. Lawsuits. (i) Within twenty (20) Business Days after the
Company obtains knowledge of the institution of, or written threat of, any
action, suit, proceeding, governmental investigation or arbitration against or
affecting the Company or any of the Company's Subsidiaries or any Property of
the Company or any of the Company's Subsidiaries not previously disclosed
pursuant to Section 6.01(i), which action, suit, proceeding, governmental
investigation or arbitration exposes, or in the case of multiple actions,
suits, proceedings, governmental investigations or arbitrations arising out of
the same general allegations or circumstances which expose, in the Company's
reasonable judgment, the Company or any of the Company's Subsidiaries to
liability in an amount aggregating $10,000,000 or more, the Company shall give
written notice thereof to the Administrative Agent and provide such other
information as may be reasonably available to enable the Administrative Agent
and its counsel to evaluate such matters; and (ii) in addition to the
requirements set forth in clause (i) of this Section 7.03, the Company upon
request of the Administrative Agent shall as soon as practicable give to the
Administrative Agent written notice of the status of any action, suit,
proceeding, governmental investigation or arbitration covered by a report
delivered pursuant to clause (i) above and provide such other information as
may be reasonably available to it to enable the Administrative Agent and its
counsel to evaluate such matters.
7.0. Insurance. Within ninety (90) days (or, upon the written
consent of the Administrative Agent, up to an additional fifteen (15) days)
after the end of each Fiscal Year ending after the Effective Date, the Company
shall deliver to the Administrative Agent (i) a report in form and substance
satisfactory to the Administrative Agent, the CoAgents and the Lenders
outlining all material insurance coverage (including any self-insurance
provided by the Company) maintained as of the date of such report by the
Company and its Subsidiaries and the duration of such coverage and (ii) to the
extent such insurance coverage is not provided by the Company, an insurance
broker's statement that all premiums then due and payable with respect to such
coverage have been paid.
7.0. ERISA Notices. The Company shall deliver or cause to be
delivered to the Administrative Agent, at the Company's expense, the
following information and notices within twenty (20) Business Days after:
() the Company or any ERISA Affiliate knows or has reason to
know after diligent inquiry that a Termination Event has occurred, a
written statement of the chief financial officer of the Company
describing such Termination Event and the action, if any, which the
Company or any ERISA Affiliate has taken, is taking or proposes to
take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;
() the Company or any ERISA Affiliate knows or has reason to
know after diligent inquiry that a prohibited transaction (defined in
Sections 406 of ERISA and 4975 of the Internal Revenue Code) has
occurred, a statement of the chief financial officer of the Company
describing such transaction and the action which the Company or any
ERISA Affiliate has taken, is taking or proposes to take with respect
thereto;
() the filing thereof with the DOL, IRS or PBGC, copies of each
annual report (form 5500 series), including Schedule B thereto, filed with
respect to each Benefit Plan;
() receipt by the Company or any ERISA Affiliate of each
actuarial report for any Benefit Plan or Multiemployer Plan and each annual
report for any Multiemployer Plan, copies of each such report;
() the filing thereof with the IRS, a copy of each funding
waiver request filed with respect to any Benefit Plan and all communications
received by the Company or any ERISA Affiliate with respect to such request;
() the occurrence thereof, notification of any material
increase in the benefits of any existing Plan or the establishment of any new
Plan (excluding supplemental employee retirement plans which are not material)
or the commencement of contributions to any Plan (excluding supplemental
employee retirement plans which are not material) to which the Company or any
ERISA Affiliate was not previously contributing;
() receipt by the Company or any ERISA Affiliate of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed to
administer a Benefit Plan, copies of each such notice;
() receipt by the Company or any ERISA Affiliate of any
unfavorable determination letter from the IRS regarding the qualification of a
Plan under Section 401(a) of the Internal Revenue Code, copies of each such
letter;
() receipt by the Company or any ERISA Affiliate of a notice
from a Multiemployer Plan regarding the imposition of withdrawal liability,
copies of each such notice;
() the Company or any ERISA Affiliate fails to make a required
installment or any other required payment under Section 412 of the Internal
Revenue Code on or before the due date for such installment or payment, a
notification of such failure;
() the Company or any ERISA Affiliate knows or has reason to
know after diligent inquiry (a) a Multiemployer Plan has been terminated,
(b) the administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or (c) the PBGC has instituted or will
institute proceedings under Section 4042 of ERISA to terminate a Multiemployer
Plan; and
() receipt by the Company of a written notice from the
Administrative Agent, copies of any Foreign Employee Benefit Plan and related
documents, reports and correspondence as requested by the Administrative Agent
in such notice.
For purposes of clause (i) of this Section 7.05, the Company and any ERISA
Affiliate shall be deemed to know all facts known by the administrator of any
Plan of which the Company or any ERISA Affiliate is the plan sponsor.
7.0. Environmental Notices. () The Company shall notify the
Administrative Agent in writing, within twenty (20) Business Days after the
Company learns thereof, of any of the following:
() written notice or claim by a Governmental Authority or any
third party to the effect that the Company or any of the Company's
Subsidiaries is or may be liable to any Person, or is subject to an
investigation by a Governmental Authority, relating to a material
Release or threatened material Release of any Contaminant into the
environment;
() written notice that any Property of the Company or any of
the Company's Subsidiaries is subject to an Environmental Lien;
() commencement or written threat of any judicial or
administrative proceeding alleging a material violation by the Company
or any of the Company's Subsidiaries of any Environmental, Health or
Safety Requirement of Law;
() new and material changes to any existing Environmental,
Health or Safety Requirement of Law that would reasonably be expected
to have a Material Adverse Effect; or
() any intent to execute an agreement, letter of intent or
commitment to acquire stock, Property, or to lease Real Property, or
to take any other action by the Company or any of its Subsidiaries
that would subject the Company or any of the Company's Subsidiaries to
environmental, health or safety Liabilities and Costs that would
reasonably be expected to have a Material Adverse Effect.
() The Company shall notify the Administrative Agent, in
writing, within 20 Business Days after any filing or report made by the
Company or any of its Subsidiaries with any Governmental Authority with
respect to (i) the material violation of any Environmental, Health or Safety
Requirement of Law, (ii) any material unpermitted Release or threatened
Release of a Contaminant or (iii) any material unsafe or unhealthful condition
at any Property of the Company or its Subsidiaries;
7.0. Labor Matters. The Company shall notify the
Administrative Agent in writing, promptly after the Company knows of, of
(i) any material labor dispute to which the Company or any of its Subsidiaries
is or is reasonably likely to become a party, including, without limitation,
any strikes, lockouts or other disputes relating to such Persons' plants and
other facilities and (ii) any material liability related to Worker Adjustment
and Retraining Notification Act or related liability incurred with respect to
the closing of any plant or other facility of such Persons.
7.0. Public Filings and Reports. Promptly upon the filing
thereof with the Securities and Exchange Commission or the mailing thereof to
the public shareholders or debtholders of the Company generally, the Company
shall deliver to the Administrative Agent, with copies sufficient for each of
the Lenders, copies of all filings or reports made in connection with
outstanding Indebtedness and Capital Stock of the Company other than
amendments to this Agreement and any amendments to management contracts,
compensatory plans or other plans in which directors or officers of the
Company or its Subsidiaries participate, which filings shall be delivered to
the Administrative Agent, with copies sufficient for each of the Lenders,
promptly upon the request of the Administrative Agent.
7.0. Ongoing Y2K Reports. The Company, at the request of the
Administrative Agent, which request shall be made no more frequently than
semi-annually, will certify to the Administrative Agent that the
representation and warranty contained in Section 6.01(cc) remains true and
correct and, if exceptions were set forth on Schedule 6.01CC, the progress
made since the prior report with respect to the elimination thereof on or
prior to September 30, 1999.
7.. Other Information. As soon as reasonably practical after
receipt of a request therefor from the Administrative Agent, the Company shall
prepare and deliver to the Administrative Agent such other information with
respect to the Company, any of the Company's Subsidiaries or the Collateral
including, without limitation, schedules identifying and describing the
Collateral and any dispositions thereof, as from time to time may be
reasonably requested by the Administrative Agent.
ARTICLE
AFFIRMATIVE COVENANTS
Each of the Borrowers covenants and agrees (with respect to
those covenants set forth below applicable to itself and its Subsidiaries)
that so long as any Revolving Credit Commitment is outstanding and thereafter
until payment in full of all of the Obligations, unless the Requisite Lenders
shall otherwise give prior written consent or shall have waived compliance:
8.0. Corporate Existence, Etc. () The Company shall, and
shall cause each Subsidiary Guarantor to, at all times maintain its corporate
existence and preserve and keep, or cause to be preserved and kept, in full
force and effect its rights and franchises material to their respective
businesses;
() The Company shall cause each Non-Guarantor Domestic
Subsidiary at all times to maintain its respective corporate existence and
preserve and keep, or cause to be preserved and kept, in full force and effect
its rights and franchises material to its respective business, except where
the Board of Directors of such Non-Guarantor Domestic Subsidiary determines
that the maintenance or preservation of its business is not in the best
interest of the Company or such Non-Guarantor Domestic Subsidiary;
() Each Foreign Borrower shall, and the Company shall cause
each Foreign Subsidiary at all times to, maintain its respective corporate
existence and preserve and keep, or cause to be preserved and kept, in full
force and effect its respective rights and franchises material to its business;
except in each instance described in clauses (a) through (c) above, where the
failure to so maintain or preserve would not have or be reasonably likely to
have a Material Adverse Effect.
8.0. Corporate Powers; Conduct of Business, Etc. The Company
shall, and shall cause each of its Subsidiaries to, qualify and remain
qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified except where the failure to be so
qualified would not have or be reasonably likely to have a Material Adverse
Effect.
8.0. Compliance with Laws, Etc. The Company shall, and shall
cause each of its respective Subsidiaries to, (a) comply with all Requirements
of Law and all restrictive covenants affecting such Person or the business,
Property, assets or operations of such Person, and (b) obtain as needed all
Permits necessary for such Person's operations and maintain such Permits in
good standing, except, in the case of (a) and (b) above, where the failure to
do so would not have or be reasonably likely to have a Material Adverse Effect.
8.0. Payment of Taxes and Claims; Tax Consolidation. The
Company shall, and shall cause each of its Subsidiaries to, pay (a) all taxes,
assessments and other governmental charges imposed upon it or on any of its
Property or assets or in respect of any of its franchises, business, income or
Property before any penalty or interest for late payment (except as such
penalty or interest relates to underpayment of estimated tax payments) accrues
thereon, and (b) all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums which have become due and payable
and which by law have or may become a Lien (other than a Lien permitted by
Section 9.03) upon any of the Company's or such Subsidiary's Property, prior
to the time when any penalty or fine shall be incurred with respect thereto;
provided, however, that no such taxes, assessments and governmental charges
referred to in clause (a) above or claims referred to in clause (b) above are
required to be paid if being contested in good faith by the Company or such
Subsidiary, as the case may be, by appropriate proceedings diligently
instituted and conducted and without danger of any material risk to the
Collateral and if such reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP shall have been made therefor. The
Company shall not and shall not permit any Subsidiary of the Company to, file
or consent to the filing of any combined, unitary, or consolidated income tax
return with any Person (other than the Company and its Subsidiaries).
8.0. Insurance. The Company shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain, in full
force and effect the insurance policies and programs listed on Schedule 6.01-W
or substantially similar policies and programs or other policies and programs
as are acceptable to the Administrative Agent. Each certificate and policy
relating to Property damage and boiler and machinery insurance shall contain
an endorsement, in form and substance acceptable to the Administrative Agent,
showing loss payable to the Administrative Agent, for the benefit of the
Administrative Agent, the CoAgents, the Issuing Banks and the Lenders and
naming the Administrative Agent as an additional insured under such policy and
providing that no act, whether willful or negligent, or default of the
Company, any of its Subsidiaries or any other Person shall affect the right of
the Administrative Agent to recover under such policy or policies of insurance
in case of loss or damage. Each certificate and policy relating to coverages
other than the foregoing shall contain an endorsement naming the
Administrative Agent as an additional insured under such policy. Such
endorsement or an independent instrument furnished to the Administrative Agent
shall provide that the insurance companies shall give the Administrative Agent
at least thirty (30) days' written notice before any such policy or policies
of insurance shall be canceled or altered adversely to the interests of the
Administrative Agent, the CoAgents, the Issuing Banks and the Lenders. In the
event that the Company or any of its Subsidiaries, at any time or times
hereafter, shall fail to obtain or maintain any of the policies or insurance
required herein or to pay any premium in whole or in part relating thereto,
then the Administrative Agent, without waiving or releasing any obligations or
resulting Event of Default hereunder, may at any time or times thereafter (but
shall be under no obligation to do so) obtain and maintain such policies of
insurance and pay such premiums and take any other action with respect thereto
which the Administrative Agent deems advisable. All sums so disbursed by the
Administrative Agent shall constitute Protective Advances and be part of the
Obligations, payable as provided herein.
8.0. Inspection of Property; Books and Records; Discussions.
The Company shall permit, and shall cause each of its Subsidiaries to permit,
any authorized representative(s) designated by the Administrative Agent or any
Lender to visit and inspect any of the Properties of such Person, to examine,
audit, check and make copies of their respective financial and accounting
records, books, journals, orders, receipts and any correspondence and other
data relating to their respective businesses or the transactions contemplated
hereby and by the Loan Documents (including, in connection with environmental
compliance, hazard or liability) (in each case, except such documents and data
required to be maintained as confidential or such documents as contain
privileged or legally protected communications), and to discuss their affairs,
finances and accounts with their officers and, in the presence of the Company
or such Subsidiary, their independent certified public accountants, all of the
foregoing upon reasonable notice and at such times during normal business
hours, as often as may be reasonably requested. All reasonable costs and
expenses incurred by the Administrative Agent or, after the occurrence and
during the continuance of any Event of Default, any Lender, in each case as a
result of such inspection, audit or examination conducted pursuant to this
Section 8.06 shall be paid by the Company.
8.0. Insurance and Condemnation Proceeds. The Company hereby
directs (and, if applicable, shall cause its Domestic Subsidiaries to direct)
all insurers under policies of Property damage and boiler and machinery
insurance and payors of any condemnation claim or award relating to the
Property of the Company and its Domestic Subsidiaries to pay all proceeds
payable under such policies or with respect to such claim or award for any
loss directly to the Administrative Agent, for the benefit of the
Administrative Agent, the CoAgents, the Issuing Banks, the Lenders and the
other Holders, except to the extent such proceeds, claims or awards are
required to be paid to alternate loss payees pursuant to the terms of any
purchase money Indebtedness or Capital Lease permitted under Section 9.01(vi)
or any Operating Lease permitted hereunder, in each case solely with respect
to the Property covered by such Indebtedness, Capital Lease or Operating
Lease; and in no case to the Company or one or more of its Subsidiaries. The
Administrative Agent shall, upon receipt of such proceeds and at the Company's
direction, either apply the same to the principal amount of the Revolving
Loans outstanding at the time of such receipt and create a corresponding
reserve against Revolving Credit Availability in an amount equal to such
application (the "Decision Reserve") or hold such proceeds as Cash Collateral
for the Obligations; provided, however, claims and awards not in excess of
$5,000,000 per occurrence or (series of related occurrences) shall be remitted
to the Company within a reasonable time following the Administrative Agent's
receipt thereof. For up to 180 days after the date of any loss (the "Decision
Period"), the Company may notify the Administrative Agent that it intends to
restore, rebuild or replace the Property subject to the receipt of any
insurance payment or condemnation award and shall, as soon as practicable
thereafter, provide the Administrative Agent detailed information, including a
construction schedule and cost estimates. Should the Company notify the
Administrative Agent that it has decided not to rebuild or replace such
Property during the Decision Period, or should the Company fail to notify the
Administrative Agent of the Company's decision during the Decision Period,
then the amounts held as Cash Collateral or as the Decision Reserve shall
automatically be applied as a mandatory prepayment of the Loans pursuant to
Section 3.01(b)(i). In the event the Company notifies the Administrative
Agent that it intends to rebuild or replace such Property during the Decision
Period, proceeds held as Cash Collateral or constituting the Decision Reserve
shall be disbursed as necessary; provided, however, should a Default or an
Event of Default occur after the Company has notified the Administrative Agent
that it intends to rebuild or replace such Property, the Decision Reserve or
Cash Collateral may, at the Administrative Agent's discretion, or shall, upon
the direction of Requisite Lenders, be applied as a mandatory prepayment of the
Loans pursuant to Section 3.01(b)(i). In the event the Decision Reserve is to
be used to rebuild or replace such Property or applied as a mandatory
prepayment of the Loans, the Company shall be deemed to have requested
Revolving Loans in an amount equal to the Decision Reserve, and, in the case
of a mandatory prepayment of the Loans, such Revolving Loans shall be made
regardless of any failure of the Company to meet the conditions set forth in
Section 5.02. Upon completion of the restoration, rebuilding or replacement
of such Property, the unused proceeds held as Cash Collateral shall constitute
Net Cash Proceeds and shall be applied as a mandatory prepayment of the Loans
pursuant to Section 3.01(b)(i).
8.0. ERISA Compliance. The Company shall, and shall cause
each of its Subsidiaries and ERISA Affiliates to, establish, maintain and
operate all Plans to comply with the provisions of ERISA, the Internal Revenue
Code, all other applicable laws, and the regulations and interpretations
thereunder and the respective requirements of the governing documents for such
Plans except where the failure to do so would not have or be reasonably likely
to have a Material Adverse Effect.
8.0. Foreign Employee Benefit Plan Compliance. The Company
shall, and shall cause each of its Subsidiaries and ERISA Affiliates to
establish, maintain and operate all Foreign Employee Benefit Plans to comply
with all laws, regulations and rules applicable thereto and the respective
requirements of the governing documents for such Plans except where the
failure to do so would not have or be reasonably likely to have a Material
Adverse Effect.
8.. Maintenance of Property. The Company shall cause all
Property used or useful in the conduct of its business or the business of any
Subsidiary of the Company to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof; provided,
however, that nothing in this Section shall prevent the Company or such
Subsidiary from discontinuing the operation or maintenance of any of such
Property if such discontinuance is, in the judgment of the Company or such
Subsidiary, necessary or appropriate in the conduct of its business or the
business of such Subsidiary.
8.. Condemnation. Promptly upon learning of the institution
of any proceeding for the condemnation or other taking of any of the (a) owned
Real Property of the Company or any of its Domestic Subsidiaries with a book
value in excess of $500,000 or (b) leased Real Property of the Company or any
of its Domestic Subsidiaries for which the annual rental payments of the
applicable Lease exceed $750,000, the Company shall notify the Administrative
Agent of the pendency of such proceeding, and permit the Administrative Agent
to participate in any such proceeding, and from time to time shall deliver to
the Administrative Agent all instruments reasonably requested by the
Administrative Agent to permit such participation.
8.. Future Liens on Real Property. After the Effective Date,
with respect to Real Property located in the United States, at least fifteen
(15) Business Days prior to the entering into of any Lease by the Company or
any of the Subsidiary Guarantors with respect to which the annual rental
payments are anticipated to equal or exceed $750,000, or the acquisition of any
Real Property acquired by the Company or any of the Subsidiary Guarantors
after the date hereof and located in the United States with a book value in
excess of $2,000,000, the Company shall, and shall cause each of the
Subsidiary Guarantors to, provide the Administrative Agent written notice
thereof and with respect to any such Lease, the Company or such Subsidiary
Guarantor agrees to use its best efforts in negotiating such Lease to obtain
the consent of the landlord or owner of such Real Property, as the case may
be, to the granting of a Lien on such Lease in favor of the Administrative
Agent. Upon written request of the Administrative Agent, and, in the case of
any Lease, provided that the landlord or owner, as the case may be, of the
Real Property to which such Lease relates, has provided its written consent to
the granting of a Lien on such Lease, the Company shall, and shall cause each
of the Subsidiary Guarantors to, execute and deliver to the Administrative
Agent, for the benefit of the Administrative Agent, the CoAgents, the Issuing
Banks and the Lenders, immediately upon the acquisition or lease of such Real
Property (other than Real Property acquired with the proceeds of Indebtedness
permitted by Section 9.01(vi) and subject to a Lien permitted by Section
9.03(iv)) a mortgage, deed of trust, assignment or other appropriate
instrument evidencing a Lien upon any such Real Property, together with such
Title Policies, certified Surveys, and local counsel opinions with respect
thereto and such other agreements, documents and instruments which the
Administrative Agent deems necessary or desirable, the same to be in form and
substance substantially the same as the mortgages and other Loan Documents
relating to Real Property of the Company and the Subsidiary Guarantors
executed and delivered in connection with this Agreement, and to be subject
only to (i) Liens permitted under Section 9.03 and (ii) such other Liens as the
Administrative Agent may reasonably approve, it being understood that the
granting of such additional security for the Obligations pursuant to this
Section 8.12 is a material inducement to the execution and delivery of this
Agreement by each Lender.
8.. Future Liens on Personal Property. (a) The Company shall,
and shall cause each of the Subsidiary Guarantors to, provide to the
Administrative Agent, for the benefit of the Administrative Agent, the
CoAgents, the Issuing Banks and the Lenders (i) a Lien upon the personal
Property located in the United States of each Subsidiary Guarantor becoming
party to the Subsidiary Guaranty after the Effective Date, pursuant to a
Security Agreement substantially in the form of the Subsidiary Security
Agreement dated as of November 21, 1994, as amended, delivered in connection
with the Existing Credit Agreement or its predecessor, together with such
other agreements, documents and instruments which the Administrative Agent
deems necessary or desirable, the same to be in form and substance
substantially the same as the Loan Documents relating to personal Property of
the other Subsidiary Guarantors executed and delivered in connection with this
Agreement, and to be subject only to Liens permitted by Section 9.03 and such
other Liens as the Administrative Agent may reasonably approve and (ii) a
pledge of (A) 100% of the Capital Stock of any Non-Guarantor Domestic
Subsidiary or domestic Permitted Joint Venture (other than Thermalex or
Thermal Components, Inc.) held by the Company or any Subsidiary Guarantor and
(B) all of the Capital Stock of (I) any Foreign Borrower held by the Company
or any Subsidiary Guarantor and (II) any other Foreign Subsidiary or foreign
Permitted Joint Venture held by the Company or any Subsidiary Guarantor with
net assets with an aggregate book value in excess of $10,000,000 (but in
either case no greater than 65% of the outstanding Capital Stock of such
Subsidiary or joint venture shall be pledged as security for the Obligations),
pursuant to a pledge agreement in form and substance satisfactory to the
Administrative Agent, together with such other agreements, documents and
instruments which the Administrative Agent deems necessary or desirable, and
(b) the Company shall cause any Wholly Owned Domestic Subsidiary (other than
Thermal Components, Inc.) with net assets with an aggregate book value in
excess of $5,000,000 to become a Subsidiary Guarantor pursuant to the terms of
the Subsidiary Guaranty, it being understood that the granting of the
additional security for the Obligations pursuant to this Section 8.13 is a
material inducement to the execution and delivery of this Agreement by each
Lender.
8.. Landlord Waivers. In connection with the Existing Credit
Agreement (or any predecessor thereof), on or prior to the Effective Date, the
Company has obtained and delivered to the Administrative Agent landlord
waivers (with copies of the relevant leases attached) in form and substance
reasonably satisfactory to the Administrative Agent relating to the Company's
Leases, except for landlord waivers that the Company, despite its best efforts
as of the Effective Date, was unable to obtain. The Company shall use its
best efforts to obtain and deliver to the Administrative Agent landlord
waivers (with copies of the relevant Lease attached) with respect to any Lease
entered into after the Effective Date which relates to a location in which
there is, or is reasonably expected to be, Collateral with a book value of
$3,000,000 or more.
8.. Environmental Compliance. The Company and the Company's
Subsidiaries shall comply with all Environmental, Health or Safety
Requirements of Law, except where the failure to so comply would not have or
be reasonably likely to have a Material Adverse Effect.
8.. PostClosing Matters. To the extent not delivered prior to
or on the Effective Date, the Company shall deliver to the Administrative
Agent, in form and substance satisfactory to the Administrative Agent, each of
the agreements, instruments, opinions and other documents listed under the
heading "Postclosing Matters" on the List of Closing Documents attached hereto
as Exhibit H within the time periods set forth on such List of Closing
Documents.
8.. Permitted Acquisitions. () In addition to any other
limitation set forth in this Agreement, neither the Company nor any of its
Domestic Subsidiaries shall, in connection with any Permitted Acquisition,
enter into any acquisition or purchase agreement providing for a Permitted
Acquisition which does not allow for the assignment of the Company's or such
Subsidiary's rights thereunder to the Administrative Agent as security for the
Obligations.
() On the Funding Date for any Borrowing of Revolving Loans for
the purpose of consummating a Permitted Acquisition (or, if no Revolving Loans
are being used for such purpose, then on the date of the consummation of such
Permitted Acquisition), the purchase price of which is in excess of $5,000,000
(i) the Administrative Agent shall have received an Officer's Certificate
certifying that (a) the acquisition meets the requirements of the definition of
Permitted Acquisition (setting forth detailed calculations of all financial
covenants), (b) such acquisition complies with the requirements of Sections
9.12 and 9.17 and (c) the liabilities of the type referred to in Sections 9.12
and 9.17 with respect to such Permitted Acquisition and any other liabilities
assumed in connection with such Permitted Acquisition do not or are not
reasonably likely to have a Material Adverse Effect, (ii) the Company shall
have delivered to the Administrative Agent copies of (or to the extent
unavailable, forms of) all material documentation evidencing the Permitted
Acquisition, including, without limitation, the relevant acquisition or
purchase agreement, corporate resolutions approving such Permitted Acquisition
and opinions of counsel delivered in connection therewith (and the Company
will use reasonable efforts to enable the Administrative Agent and the Lenders
to be entitled to rely thereon) each certified by the Secretary or Assistant
Secretary of the Company to be either (A) true and correct copies of such
documents in full force and effect or (B) substantially in the form of the
final documentation evidencing such Permitted Acquisition (provided that any
such final documentation not delivered to the Administrative Agent on the
Funding Date shall be delivered to the Administrative Agent no later than
twenty (20) Business Days after the Funding Date for any domestic acquisition
and within three Business Days of the receipt of the same for any foreign
acquisition) and (iii) the Company shall have delivered to the Administrative
Agent copies of all material business and financial information (with
appropriate supporting detail) relating to the business purchased in the
Permitted Acquisition as the Administrative Agent may reasonably request.
ARTICLE
NEGATIVE COVENANTS
Each of the Borrowers covenants and agrees (with respect to
those covenants set forth below applicable to itself and its Subsidiaries)
that it shall comply with the following covenants so long as any Revolving
Credit Commitment is outstanding and thereafter until payment in full of all
of the Obligations, unless (except as otherwise provided below) the Requisite
Lenders shall otherwise give prior written consent thereto or shall have waived
compliance:
9.0. Indebtedness. None of the Company or any of its
Subsidiaries shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to any
Indebtedness, except:
() the Obligations;
() Permitted Existing Indebtedness, and any extensions,
renewals, refundings or replacements of Permitted Existing
Indebtedness; provided that any such extension, renewal, refunding or
replacement is in an aggregate principal amount not greater than the
principal amount of, and is on terms no less favorable to the Company
or such Subsidiary than the terms of, the Permitted Existing
Indebtedness so extended, renewed, refunded or replaced;
() Non-Facility Letters of Credit for which a Non-Facility
Letter of Credit Reserve has been established by the Administrative
Agent following receipt of a written notice from the Company
instructing the Administrative Agent to establish such reserve;
provided, however, the aggregate amount available for drawing under
all Letters of Credit and Non-Facility Letters of Credit shall not
exceed the sum of (A) $50,000,000 and (B) the aggregate amount
available for drawing under any Non-Facility Letter of Credit incurred
pursuant to clause (xiii) of this Section 9.01;
() Indebtedness in respect of taxes, assessments, governmental
charges and claims for labor, materials or supplies, to the extent
that payment thereof is not required pursuant to Section 8.04;
() Indebtedness constituting Accommodation Obligations to the
extent permitted by Section 9.05(i) through (viii);
() subject to the proviso in clause (xiii) of this Section
9.01, to the extent permitted by Article X and in any event in an
aggregate outstanding principal amount not to exceed $15,000,000 at
any time, Capital Leases and purchase money Indebtedness incurred by
the Company and/or any Domestic Subsidiary (or by the Person whose
Capital Stock or assets were purchased by the Company or any Domestic
Subsidiary in connection with a Permitted Acquisition) to finance the
acquisition of fixed assets, and Indebtedness incurred by the Company
and/or any such Domestic Subsidiary to refinance, extend, renew,
refund or replace such Capital Leases and purchase money Indebtedness;
() Indebtedness (other than Funded Debt) incurred in connection
with Customary Permitted Liens;
() Indebtedness arising from intercompany loans (A) from the
Company to any Subsidiary Guarantor or from any Subsidiary Guarantor
to any Subsidiary of such Subsidiary Guarantor that is also a
Guarantor; (B) from the Company or any Subsidiary Guarantor to any
Non-Guarantor Domestic Subsidiary, Permitted Joint Venture or any
Foreign Subsidiary which Indebtedness shall not cause the Maximum Non-
Guarantor Subsidiary Investment Amount to exceed $30,000,000 in the
aggregate at any time; (C) from any Subsidiary of any Subsidiary
Guarantor to such Guarantor; or (D) from any Subsidiary of the Company
to the Company; provided that the loans referred to in clause (A)
shall be evidenced by an intercompany promissory notes substantially
in the form of Exhibit J, payable to the Company or the applicable
Subsidiary Guarantor, as the case may be, which promissory notes shall
be delivered and pledged to the Administrative Agent as part of
Collateral;
() Indebtedness of (A) the Company arising pursuant to Interest
Rate Contracts entered into with any Lender for the purpose of hedging
the Company's interest rate exposure and not for speculative purposes,
(B) the Company or any Subsidiary of the Company arising pursuant to
Currency Agreements entered into in the ordinary course of the
Company's or such Subsidiary's business and (C) the Company arising
pursuant to Currency Agreements entered into for the purpose of
hedging the Company's foreign exchange exposure in respect of
Revolving Loans made for the purpose of financing the acquisition of
ARUP and providing for its working capital needs in a notional
principal amount not to exceed $30,000,000;
() Indebtedness incurred by any Foreign Subsidiary (other than
Indebtedness owing to the Company or any Domestic Subsidiary) not in
excess of an aggregate outstanding principal amount of $10,000,000 at
any time (plus the aggregate outstanding principal amount of any
Indebtedness in support of which the Company or any Subsidiary
Guarantor has entered into an Accommodation Obligation pursuant to
Section 9.05(iv));
() Indebtedness in respect of the Subordinated Notes;
() Indebtedness in respect of metals futures contracts entered
into by the Company and its Subsidiaries in the ordinary course of
business and not for speculative purposes;
() In addition to Indebtedness permitted by clauses (i) through
(xi) above, Indebtedness of the Company or any Subsidiary incurred
after the date hereof (in respect of Non-Facility Letters of Credit or
otherwise) in an amount not to exceed an aggregate outstanding
principal amount of $30,000,000 (less the amount of Indebtedness
incurred pursuant to clause (vi) of this Section 9.01) at any time,
provided, however, in the event any Indebtedness incurred pursuant to
this clause (xiii) or clauses (vi) and (xv) of this Section 9.01 is in
excess of a principal amount of $10,000,000, then the lender or group
of lenders providing such Indebtedness shall have entered into an
intercreditor agreement with the Administrative Agent on terms
acceptable to the Administrative Agent (or, if the Administrative
Agent is such lender or one of the group of such lenders, the
Requisite Lenders), pursuant to which such lender or group of lenders
would agree not to exercise any blockage rights it may have under the
Subordinated Note Indenture or the 1998 Subordinated Note Indenture
upon the occurrence of a non-payment default without first obtaining
the consent of the Administrative Agent (or, if the Administrative
Agent is such lender or one of the group of such lenders, the
Requisite Lenders);
() Indebtedness in connection with borrowings against the cash
surrender value of life insurance maintained by the Company or any of
its Subsidiaries; provided, however, that unless such Indebtedness is
otherwise permitted to be incurred pursuant to clause (xiii) above,
the proceeds of such borrowings shall be used solely to pay the
premiums with respect to such insurance policies and any accrued and
unpaid interest on, and any premiums or penalties relating to, any
such borrowings, and any extensions, renewals, refundings or
replacements of such Indebtedness; provided that any such extension,
renewal, refunding or replacement is in an aggregate principal amount
not greater than the principal amount of, and is on terms no less
favorable to the Company or such Subsidiary than the terms of, the
Indebtedness so extended, renewed, refunded or replaced;
() subject to the proviso in clause (xiii) of this Section
9.01, Indebtedness incurred (other than the Obligations) or assumed in
connection with or as a result of a Permitted Acquisition in an
aggregate amount not to exceed $15,000,000 at any time outstanding;
and
() Indebtedness in respect of the 1998 Subordinated Notes in an
aggregate principal amount not to exceed $120,000,000 (less any amount
thereof required to be redeemed as a Special Redemption (as defined in
the 1998 Subordinated Note Indenture)); provided that the net proceeds
of the issuance of such notes shall have been used solely for the
purpose of repurchasing, repaying or defeasing Subordinated Notes.
9.0. Sales of Assets. None of the Company or any of the
Domestic Subsidiaries shall sell, assign, transfer, lease, convey or otherwise
dispose of any Property, whether now owned or hereafter acquired, or any
income or profits therefrom, or enter into any agreement to do so, except:
() sales, leases, assignments, transfers, conveyances or other
dispositions of Inventory in the ordinary course of business;
provided, however, that any such sale, transfer or other disposition
of Inventory to any Non-Guarantor Domestic Subsidiary, Permitted Joint
Venture or Foreign Subsidiary shall not cause the Maximum Non-
Guarantor Subsidiary Investment Amount to exceed $30,000,000 in the
aggregate at any time;
() sales, assignments, transfers, conveyances or other
dispositions (other than Leases or subleases of Leases) of Properties
outside of the ordinary course of business not to exceed in the
aggregate more than $5,000,000 in any Fiscal Year (exclusive of any
sales or other dispositions permitted in clause (vii) below);
provided, however, that any such sale, transfer or other disposition
of such Properties to any Non-Guarantor Domestic Subsidiary, Permitted
Joint Venture or Foreign Subsidiary shall not cause the Maximum Non-
Guarantor Subsidiary Investment Amount to exceed $30,000,000 in the
aggregate at any time;
() in addition to dispositions permitted under clauses (i) and
(ii) of this Section 9.02, the disposition of Equipment of the Company
or any of the Domestic Subsidiaries if such Equipment is obsolete or
no longer useful in the ordinary course of the Company's or such
Domestic Subsidiary's business or otherwise is not required to be
maintained by the Company or such Domestic Subsidiary pursuant to
Section 8.10;
() assignments and licenses of intellectual Property of the
Company or any of its Subsidiaries in the ordinary course of business;
() the sale or transfer of Property of the Company or any
Domestic Subsidiary to any Subsidiary Guarantor or the Company;
() (A) subleases of Leases or Leases, to the extent at any
point in time such subleases or Leases have anticipated annual rental
payments of not more than $2,000,000 in the aggregate since the
Effective Date and (B) subleases of Leases or Leases of any Real
Property listed on Schedule 9.02;
() the Company may from time to time sell, assign, transfer,
convey or otherwise dispose of any or all of the Properties specified
in Schedule 9.02; provided that the Net Cash Proceeds of such
dispositions are applied to the Obligations to the extent required
under Section 3.01(b);
() Sale and Leaseback Transactions to the extent permitted by
Section 9.10; and
() the sale, transfer, conveyance or other disposition of any
or all of the Properties of the Company or any Subsidiary of the
Company in connection with the planned divestiture or divestitures of
a certain operating unit of the Company disclosed to the Syndication
Agent on or prior to August 17, 1998, provided that (A) the aggregate
amount of Net Cash Proceeds of such divestiture or divestitures does
not exceed the aggregate sum of $10,000,000 after August 17, 1998 and
(B) such Net Cash Proceeds are applied to the Obligations to the
extent required under Section 3.01(b).
9.0. Liens. None of the Company or any of the Domestic
Subsidiaries shall directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any of their respective Property except:
() Liens created by the Loan Documents;
() Permitted Existing Liens;
() Customary Permitted Liens;
() purchase money Liens granted by the Company or any Domestic
Subsidiary (including the interest of a lessor under a Capital Lease)
and Liens to which any Property is subject at the time of the
Company's or any Domestic Subsidiary's acquisition thereof) securing
Indebtedness permitted under Section 9.01(vi) and limited in each case
to the Property purchased or subject to such lease;
() to the extent Indebtedness secured thereby is permitted
to be extended, renewed, refunded or refinanced pursuant to clauses
(ii), (vi) or (xiv) of Section 9.01, a future Lien on any Property
which is subject to a Lien described in clause (ii), (iv) or (vii) of
this Section 9.03, if such future Lien attaches only to the same
Property and secures only such permitted extensions, renewals,
replacements or refinancings;
() Liens securing reimbursement obligations with respect to
commercial letters of credit which constitute Non-Facility Letters of
Credit; provided that such Liens only attach to the Property being
acquired with the proceeds of such Non-Facility Letters of Credit;
() other Liens securing not more than $5,000,000 of any
Indebtedness or Accommodation Obligation permitted hereunder; and
() Liens securing Indebtedness assumed in connection with, or
continuing to exist after but not incurred in connection with, a
Permitted Acquisition as permitted by Section 9.01(xv), which Liens
were in effect prior to the consummation of the Permitted Acquisition.
9.0. Investments. None of the Company or any of the Domestic
Subsidiaries shall directly or indirectly make or own any Investment except:
() Investments in cash and Cash Equivalents;
() Permitted Existing Investments;
() Investments received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
() Investments (A) by the Company or any Subsidiary Guarantor
in any Non-Guarantor Domestic Subsidiary, Permitted Joint Venture or
Foreign Subsidiary which Investments shall not cause the Maximum Non-
Guarantor Subsidiary Investment Amount to exceed $30,000,000 in the
aggregate at any time or (B) by the Company or any Guarantor in any
Subsidiary Guarantor to the extent a loan or loans made by the Company
or such Guarantor are permitted pursuant to Section 9.01(viii)(A) or
Section 9.01(viii)(C);
() (A)loans or advances to employees of the Company or any of
its Subsidiaries, which loans and advances shall not in the aggregate
(but excluding advances referred to in clause (B) hereof) exceed
$4,000,000 outstanding at any time and (B)advances to sales
representatives of the Company or any of its Subsidiaries in the
ordinary course of business and consistent with past practices;
() additional Investments not otherwise permitted in this
Section 9.04 not to exceed $10,000,000 in the aggregate at any one time
outstanding;
() Investments received by the Company or any Domestic
Subsidiary as consideration for the sale or other disposition of
Property permitted by Section 9.02;
() Investments made pursuant to Permitted Acquisitions;
provided, however, no Investment made in any Non-Guarantor Domestic
Subsidiary, Permitted Joint Venture or Foreign Subsidiary (whether
existing before, or after giving effect to, such Permitted
Acquisition) pursuant to such Permitted Acquisition shall cause the
Maximum Non-Guarantor Subsidiary Investment Amount to exceed
$30,000,000 in the aggregate at any time;
() in addition to Investments in Permitted Acquisitions
permitted pursuant to clause (viii) above, Investments made by the
Company in Insilco GmbH and its Subsidiaries of up to $5,000,000 in
the aggregate since the Effective Date;
() Investments in Interest Rate Contracts permitted pursuant to
Section 9.01(ix)(A) and metals future contracts permitted pursuant to
Section 9.01(xii); and
() the purchase of shares of Capital Stock of Holdco in
connection with the Company's deferred compensation plans or
management incentive plans in an amount not to exceed the sum of
$5,000,000 in the aggregate in any Fiscal Year.
9.0. Accommodation Obligations. None of the Company or any of
the Subsidiaries shall directly or indirectly create or become or be liable
with respect to any Accommodation Obligation, except:
() Permitted Existing Accommodation Obligations;
() Accommodation Obligations arising under the Loan Documents;
() obligations, warranties and indemnities, not with respect to
Indebtedness of any Person, which have been or are undertaken or made
in the ordinary course of business;
() Accommodation Obligations of the Company or any Subsidiary
Guarantor in respect of any Non-Guarantor Domestic Subsidiary,
Permitted Joint Venture or Foreign Subsidiary, which Accommodation
Obligations shall not cause the Maximum Non-Guarantor Subsidiary
Investment Amount to exceed $30,000,000 at any time;
() Accommodation Obligations of any Subsidiary Guarantor in
respect of obligations of the Company or of any Subsidiary of such
Subsidiary Guarantor that is also a Guarantor;
() reimbursement obligations under Non-Facility Letters of
Credit;
() Accommodation Obligations with respect to Customary
Permitted Liens, other obligations, warranties and indemnities (other
than with respect to Indebtedness) in the ordinary course of business
and with respect to customary representations, warranties and
indemnities entered into in connection with the sale or other
disposition of Property or in connection with any Permitted
Acquisition;
() Accommodation Obligations of the Company in respect of any
Subsidiary Guarantor; and
() Accommodation Obligations constituting Indebtedness to the
extent permitted under Section 9.01.
9.0. Restricted Junior Payments. Subject to Section 9.16,
none of the Company or any of the Domestic Subsidiaries shall declare or make
any Restricted Junior Payment except:
() dividends or other distributions made to the Company or any
of the Domestic Subsidiaries by any Subsidiary of the Company;
() the purchase or redemption of Capital Stock in connection
with a simultaneous sale of an equivalent amount of Capital Stock for
the same purchase or redemption price;
() purchase of shares of Capital Stock in connection with
claims made in bankruptcy proceedings pursuant to the Plan of
Reorganization not to exceed $2,000,000 in the aggregate in any Fiscal
Year;
() payments with respect to employee or director stock options,
equity unit plans, stock incentive plans or restricted stock plans of
the Company; provided, the aggregate amount of such payments does not
exceed $6,000,000 in any Fiscal Year or $12,000,000 in the aggregate
since August 17, 1998;
() repurchases, repayments and defeasances of the Subordinated
Notes with proceeds from the issuance and sale of the 1998
Subordinated Notes and, to the extent such proceeds have been fully
utilized for such purpose, proceeds of Loans;
() regularly scheduled payments of interest in respect of
(A) the Subordinated Notes, (B) the 1998 Subordinated Notes and
(C) Indebtedness of the Company or any Domestic Subsidiary that is
expressly subordinated in writing to the Obligations and permitted
pursuant to Section 9.01(xiii) (but not including the Holdco Loan or
any other loan made by Holdco to the Company or any of the Company's
Subsidiaries), but only if, in each case, such payment is permitted to
be made pursuant to the terms of the Subordinated Note Indenture, the
1998 Subordinated Note Indenture or such subordinated Indebtedness, as
the case may be;
() distributions, loans and advances or other payments to
Holdco for the purpose of allowing Holdco to make the payments
contemplated in Section 9.04(v)(A) (provided that Holdco agrees to
repay such amount when the loans referred to in such section are
repaid to Holdco), Section 9.06(iii) and Section 9.06(iv), but only to
the extent such payments would be permitted to be made by the Company
pursuant to such sections;
() so long as no Event of Default has occurred and is
continuing or would result therefrom, distributions, loans and
advances or other payments, including the payment of principal and
interest on the Holdco Loan, to Holdco not in excess of $750,000 in
any Fiscal Year, for the purpose of allowing Holdco to pay ordinary
operating and overhead expenses; provided, however, the Company shall
be permitted to pay principal and interest in respect of the Holdco
Loan for the purpose of allowing Holdco to pay transaction costs
related to the transactions contemplated in the Merger Agreements to
the extent such costs become due and payable after August 17, 1998;
and
() so long as no Event of Default has occurred and is
continuing or would result therefrom, distributions, loans, advances
or other payments to Holdco solely for the purpose of allowing Holdco
to pay cash interest on the Holdco Discount Notes; provided, however,
no such distribution or other payment made pursuant to this Section
9.06(x) shall be permitted (A) prior to February 15, 2004 and
(B) unless the chief financial officer or treasurer has delivered an
Officer's Certificate to the Administrative Agent certifying that the
Leverage Ratio (calculated on a pro forma basis after giving effect to
such payment or distribution) for the twelve-month period ending on
the last day of the most recent month with respect to which such
financial information is available to the Company (but in no event
more recent than the month immediately prior to the most recently
ended month) is not greater than 2.50 to 1.
9.0. Conduct of Business. None of the Company or any of its
Subsidiaries shall engage in any business (pursuant to a Permitted Joint
Venture, Permitted Acquisition or otherwise) other than the businesses engaged
in by the Company or such Subsidiaries on the date hereof and any business or
activities which are substantially similar, related or incidental thereto,
except to the extent otherwise permitted hereunder. The Company agrees to
cause Insilco GmbH not to engage in any business or activity other than acting
as a holding company for each of its Subsidiaries and engaging in the
transactions contemplated in any agreement for the acquisition of any such
Subsidiary.
9.0. Transactions with Affiliates. The Company shall not, and
shall not permit any of its Subsidiaries, except as otherwise expressly
permitted herein, to do any of the following: (i) make any Investment in an
Affiliate of the Company or any of the Company's Subsidiaries; (ii) transfer,
sell, lease, assign or otherwise dispose of any Property to any Affiliate of
the Company or any of the Company's Subsidiaries; (iii) merge into or
consolidate with or purchase or acquire assets from any Affiliate of the
Company or any of the Company's Subsidiaries; (iv) repay any Indebtedness to
any Affiliate of the Company or any of the Company's Subsidiaries; (v) pay any
royalties to any Affiliate of the Company or any of the Company's
Subsidiaries; (vi) pay any management fees to any Affiliate of the Company or
any of the Company's Subsidiaries; or (vii) enter into any other transaction
directly or indirectly with or for the benefit of any Affiliate of the Company
or any of the Company's Subsidiaries (including, without limitation,
guaranties and assumptions of obligations of any such Affiliate) except in
each case for transactions (A) in the ordinary course of business and
(B) either on a basis no less favorable to the Company or such Subsidiary as
would be obtained in a comparable arm's length transaction with a Person not
an Affiliate, or in the case of compensation payable to any officer or
director of the Company or such Subsidiary, in an amount approved by the Board
of Directors of the Company or such Subsidiary.
9.0. Restriction on Fundamental Changes. () Except in
connection with a Permitted Joint Venture or a Permitted Acquisition, none of
the Company or any of the Domestic Subsidiaries or Foreign Borrowers shall
(i) enter into any merger or consolidation, or liquidate, wind-up or dissolve
(or suffer any liquidation or dissolution), except for a merger or
consolidation of (A) any Non-Guarantor Domestic Subsidiary into another
Non-Guarantor Domestic Subsidiary or (B) any Wholly Owned Non-Guarantor
Domestic Subsidiary into the Company or a Subsidiary Guarantor (with the
Company or such Subsidiary Guarantor as the surviving corporation); provided
that, after giving effect to any such merger or consolidation, no Default or
Event of Default shall have occurred or be continuing, (ii) enter into any
partnership or joint venture, or (iii) enter into or permit any transaction or
series of transactions in which the Company and/or any of the Domestic
Subsidiaries acquire all or any significant portion of the Capital Stock
and/or assets of another Person.
() The Company shall not permit any Subsidiary Guarantor or
Foreign Borrower to cease to be a direct or indirect Wholly Owned Subsidiary
of the Company.
9.. Sales and Leasebacks. Except for and excluding the real
property located at 190 West Marquette Avenue, in Oak Creek, Wisconsin, which
the Company will lease back on a temporary basis after the sale thereof, none
of the Company or any of the Domestic Subsidiaries shall enter into any Sale
and Leaseback Transaction other than a Sale and Leaseback Transaction on terms
and conditions satisfactory to the Administrative Agent relating to the sale
and lease of owned Property where, after giving effect to all such Sale and
Leaseback Transactions, the aggregate Fair Market Value of all such Property
sold does not exceed $20,000,000 since the Effective Date.
9.. Margin Regulations; Securities Laws. None of the Company
or any of the Company's Subsidiaries, shall use all or any portion of the
proceeds of any credit extended hereunder to purchase or carry Margin Stock in
violation of Regulation U.
9.. ERISA. The Company shall not, to the extent the following
actions, individually or in the aggregate, would have, or are reasonably
likely to have, a Material Adverse Effect:
() engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Internal Revenue Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained from the
DOL;
() permit to exist any accumulated funding deficiency (as
defined in sections 302 of ERISA and 412 of the Internal Revenue
Code), with respect to any Benefit Plan, whether or not waived;
() terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan which would result in any material liability of Company
or any ERISA Affiliate under Title IV of ERISA;
() fail to make any contribution or payment to any
Multiemployer Plan which Company or any ERISA Affiliate may be
required to make under any agreement relating to such Multiemployer
Plan, or any law pertaining thereto;
() fail, or permit any ERISA Affiliate to fail, to pay any
required installment or any other payment required under Section 412
of the Internal Revenue Code on or before the due date for such
installment or other payment;
() amend, or permit any ERISA Affiliate to amend, a Plan
resulting in an increase in current liability for the plan year such
that the Company or any ERISA Affiliate is required to provide
security to such Plan under Section 401(a)(29) of the Internal Revenue
Code;
() permit any unfunded liabilities with respect to any Foreign
Pension Plan; or
() fail, or permit any Subsidiary or ERISA Affiliate to fail,
to pay any required contributions or payments to a Foreign Pension
Plan on or before the due date for such required installment or
payment.
9.. Issuance or Sale of Capital Stock. Neither the Company
nor any of its Subsidiaries shall (i) grant any rights (either preemptive or
others) to subscribe for or to purchase, or any option for the purchase of,
its Capital Stock or (ii) create calls, commitments, claims of any character
relating to any of its Capital Stock, other than, in the case of Capital Stock
of the Company's Subsidiaries, as permitted pursuant to Section 9.07 or
Section 9.09. Other than as permitted pursuant to Section 9.09(a) or 9.02,
the Company shall not sell or otherwise dispose of, or permit the sale or
disposition of, any shares of the Capital Stock of any Subsidiary Guarantor or
Foreign Borrower.
9.. Constituent Documents. None of the Company or any of the
Company's Subsidiaries shall materially amend, modify or otherwise change any
of the terms or provisions in any of their respective Constituent Documents as
in effect on the Effective Date (except for amendments, modifications or other
changes to such Constituent Documents that, in the judgment of the
Administrative Agent, do not materially affect the rights and privileges of the
Company or any of its Subsidiaries under the Loan Documents, or the interests
of the Administrative Agent, the CoAgents, the Lenders or the Issuing Banks
under the Loan Documents or in the Collateral).
9.. Fiscal Year. None of the Company or any of the Company's
consolidated Subsidiaries shall change its Fiscal Year for accounting or tax
purposes from a period consisting of the 12-month period ending on December 31
of each calendar year.
9.. Cancellation of Debt; Prepayment; Certain Amendments.
Neither the Company nor any of the Domestic Subsidiaries shall (i) cancel any
material claim or debt or amend or modify the terms thereof, except in the
ordinary course of its business, in connection with the reasonable
modification to payment terms, in connection with the Plan of Reorganization,
in connection with those notes set forth in Section 3 of Schedule 1.01.3 or
otherwise in connection with the compromise and settlement of disputes and
except for Indebtedness (whether or not evidenced by a promissory note pledged
to the Administrative Agent) incurred prior to the Effective Date arising from
intercompany loans not in excess of the amounts of such Indebtedness set forth
on Schedule 9.16, (ii) voluntarily prepay, redeem, purchase, repurchase,
defease or retire the Subordinated Notes, the 1998 Subordinated Notes or any
other long-term Indebtedness (other than the Obligations) (except as permitted
by Section 9.06), (iii) amend, supplement or otherwise modify the terms of the
Subordinated Notes, the Subordinated Note Indenture, the 1998 Subordinated
Notes, the 1998 Subordinated Note Indenture or the warrants for the purchase
of Holdco common stock issued in connection with the 1998 Subordinated Notes
(except amendments, supplements or other modifications to such terms that, in
the reasonable judgment of the Administrative Agent, do not materially
adversely affect the rights and privileges of the Company under the
Subordinated Notes or the Subordinated Note Indenture or the interests of the
Administrative Agent, the Lenders or the Issuing Banks under the Loan
Documents or in the Collateral and any amendment that would permit the
Subsidiary Guarantors to guarantee the obligations of the Company under the
Subordinated Note Indenture and the 1998 Subordinated Note Indenture), or
(iv) amend, supplement or otherwise modify the terms of any of the Merger
Documents (except amendments, supplements or other modifications to such terms
that, in the reasonable judgment of the Administrative Agent, do not
materially adversely affect the rights and privileges of the Company under
such documents or the interests of the Administrative Agent, the Lenders or the
Issuing Banks under the Loan Documents or in the Collateral).
9.. Environmental Matters. None of the Company nor any of
Company's Subsidiaries shall become subject to any Liabilities and Costs which
would have a Material Adverse Effect arising out of or related to (a) the
Release or threatened Release at any location of any Contaminant into the
environment, or any Remedial Action in response thereto, or (b) any violation
of any Environmental, Health and Safety Requirements of Law.
9.. Foreign Subsidiary. No Foreign Subsidiary shall enter
into any Accommodation Obligation with respect to any Indebtedness of the
Company or any Domestic Subsidiary (other than the Obligations) or grant or
permit to exist any Lien on its Property to secure any such Indebtedness
(other than those Accommodation Obligations and Liens set forth on Schedule
9.18 hereto).
9.. No New Restrictions on Subsidiary Dividends. Except as
may be required by any applicable Requirements of Law or pursuant to the Loan
Documents, the Company will not agree, or permit any of the Domestic
Subsidiaries to agree, to create or otherwise become effective any consensual
encumbrance or restriction of any kind on the ability of any Domestic
Subsidiary to (i) pay, directly or indirectly, dividends or make any other
distributions in respect of its Capital Stock, (ii) make any other
distribution or transfer of funds or assets or (iii) make loans or advances to
or other Investments in, or pay any Indebtedness or other obligation owing to,
the Company.
9.. Accounting Changes. The Company shall not make, nor
permit any of its Subsidiaries to make, any material (as defined in GAAP)
change in accounting treatment and reporting practices or tax reporting
treatment, except as required or permitted by GAAP or law and concurred with,
if applicable, by the Company's independent accountants and disclosed to the
Administrative Agent or as otherwise permitted by the Loan Documents.
ARTICLE
FINANCIAL COVENANTS
Each of the Borrowers covenants and agrees that so long as any
Revolving Credit Commitment is outstanding and thereafter until payment in
full of all of the Obligations, unless the Requisite Lenders shall otherwise
give prior written consent thereto:
10.0. [Intentionally omitted].
10.0. Minimum Fixed Charge Coverage Ratio. The Fixed Charge
Coverage Ratio of the Company and its Subsidiaries on a consolidated basis, as
determined as of the last day of each fiscal quarter of the Company set forth
below for the twelve month period ending on such date, shall not be less than
the minimum ratio set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Second fiscal quarter of 1998 1.10 to 1
Third fiscal quarter of 1998 1.10 to 1
Fourth fiscal quarter of 1998 1.10 to 1
First fiscal quarter of 1999 1.10 to 1
Second fiscal quarter of 1999 1.10 to 1
Third fiscal quarter of 1999 1.10 to 1
Fourth fiscal quarter of 1999 1.10 to 1
First fiscal quarter of 2000 1.10 to 1
Second fiscal quarter of 2000 1.20 to 1
Third fiscal quarter of 2000 1.20 to 1
Fourth fiscal quarter of 2000 1.20 to 1
First fiscal quarter of 2001 1.20 to 1
Second fiscal quarter of 2001 1.30 to 1
Third fiscal quarter of 2001 1.30 to 1
Fourth fiscal quarter of 2001 1.30 to 1
First fiscal quarter of 2002 1.40 to 1
Second fiscal quarter of 2002 1.50 to 1
Third fiscal quarter of 2002 1.60 to 1
Fourth fiscal quarter of 2002 1.70 to 1
First fiscal quarter of 2003 1.80 to 1
Second fiscal quarter of 2003 and thereafter 2.00 to 1
10.0. Minimum Interest Coverage Ratio. The Interest Coverage
Ratio of the Company and its Subsidiaries on a consolidated basis, as
determined as of the last day of each fiscal quarter of the Company set forth
below for the twelve month period ending on such date, shall not be less than
the minimum ratio set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Second fiscal quarter of 1998 2.00 to 1
Third fiscal quarter of 1998 1.90 to 1
Fourth fiscal quarter of 1998 1.90 to 1
First fiscal quarter of 1999 1.90 to 1
Second fiscal quarter of 1999 1.90 to 1
Third fiscal quarter of 1999 1.90 to 1
Fourth fiscal quarter of 1999 1.90 to 1
First fiscal quarter of 2000 1.90 to 1
Second fiscal quarter of 2000 2.00 to 1
Third fiscal quarter of 2000 2.00 to 1
Fourth fiscal quarter of 2000 2.00 to 1
First fiscal quarter of 2001 2.00 to 1
Second fiscal quarter of 2001 2.15 to 1
Third fiscal quarter of 2001 2.15 to 1
Fourth fiscal quarter of 2001 2.15 to 1
First fiscal quarter of 2002 2.25 to 1
Second fiscal quarter of 2002 2.30 to 1
Third fiscal quarter of 2002 2.40 to 1
Fourth fiscal quarter of 2002 2.50 to 1
First fiscal quarter of 2003 2.80 to 1
Second fiscal quarter of 2003 and thereafter 3.25 to 1
10.0. Maximum Leverage Ratio. The Leverage Ratio of the
Company and its Subsidiaries on a consolidated basis, as determined as of the
last day of each fiscal quarter of the Company set forth below for the twelve
month period ending on such date, shall not be greater than the maximum amount
set forth opposite such fiscal quarter:
Fiscal Quarter Minimum Ratio
-------------- -------------
Second fiscal quarter of 1998 5.00 to 1
Third fiscal quarter of 1998 5.50 to 1
Fourth fiscal quarter of 1998 5.50 to 1
First fiscal quarter of 1999 5.50 to 1
Second fiscal quarter of 1999 5.25 to 1
Third fiscal quarter of 1999 5.25 to 1
Fourth fiscal quarter of 1999 5.00 to 1
First fiscal quarter of 2000 5.00 to 1
Second fiscal quarter of 2000 4.75 to 1
Third fiscal quarter of 2000 4.75 to 1
Fourth fiscal quarter of 2000 4.50 to 1
First fiscal quarter of 2001 4.50 to 1
Second fiscal quarter of 2001 4.25 to 1
Third fiscal quarter of 2001 4.25 to 1
Fourth fiscal quarter of 2001 4.00 to 1
First fiscal quarter of 2002 4.00 to 1
Second fiscal quarter of 2002 3.75 to 1
Third fiscal quarter of 2002 3.75 to 1
Fourth fiscal quarter of 2002 3.50 to 1
First fiscal quarter of 2003 3.25 to 1
Second fiscal quarter of 2003 and thereafter 3.00 to 1
10.0. Maximum Capital Expenditures. Capital Expenditures made
or incurred by the Company and its Subsidiaries on a consolidated basis during
each Fiscal Year set forth below shall not exceed in the aggregate the amount
set forth opposite such Fiscal Year:
Fiscal Quarter Minimum Ratio
-------------- -------------
Fiscal Year 1998 $30,000,000
Fiscal Year 1999 $30,000,000
Fiscal Year 2000 $30,000,000
Fiscal Year 2001 $32,000,000
Fiscal Year 2002 $34,000,000
Fiscal Year 2003 $36,000,000
Fiscal Year 2004 $38,000,000;
provided, however, if the maximum amount set forth above opposite any Fiscal
Year exceeds the amount of Capital Expenditures made or incurred by the
Company and its Subsidiaries on a consolidated basis for such Fiscal Year,
then Capital Expenditures made or incurred by the Company and its Subsidiaries
on a consolidated basis for the succeeding Fiscal Year may exceed the maximum
amount set forth above opposite such succeeding Fiscal Year by the lesser of
(i) 25% of the maximum amount for the preceding Fiscal Year and (ii) the
amount of such excess from the immediately preceding Fiscal Year (such excess
amount being available only for use in such succeeding Fiscal Year but being
treated as the first amount spent in such succeeding Fiscal Year).
ARTICLE
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.0. Events of Default. Each of the following occurrences
shall constitute an Event of Default hereunder:
() Failure to Make Payments When Due. Any Borrower shall fail
to pay (i) when due any principal or interest on the Loans (including the
Reimbursement Obligations) or (ii) any other Obligation, and (x) if such
non-payment relates to interest on the Loans (including the Reimbursement
Obligations), such non-payment continues for a period of three (3) Business
Days after the due date thereof and (y) if such non-payment relates to
Obligations other than interest or principal, such non-payment continues for a
period of five (5) Business Days after the due date thereof.
() Breach of Certain Covenants. Any Borrower or any Subsidiary
Guarantor shall fail to perform or observe duly and punctually any agreement,
covenant or obligation binding on such Person under (i) Sections 7.02, 7.03,
8.01, 8.02 or 8.06; or (ii) Article IX (other than Sections 9.08, 9.12,
9.16(i) , 9.19 and, solely with respect to Environmental Liens, Section 9.03)
or Article X.
() Breach of Representation or Warranty. Any written
representation or warranty made or deemed made by Holdco, any Borrower, any
Subsidiary Guarantor or any other Subsidiary of the Borrower to the
Administrative Agent, the CoAgents, any Lender or any Issuing Bank herein or
in any other Loan Document or in any written statement or certificate at any
time given by any such Person pursuant to any Loan Document shall be false or
misleading in any material respect on the date made (or deemed made).
() Other Defaults. Any Borrower shall default in the
performance of or compliance with any term contained herein (other than as
covered by paragraphs (a), (b) or (c) of this Section 11.01), or Holdco, any
Borrower or any of its Subsidiaries shall default in the performance of or
compliance with any term contained in any other Loan Document, and such
default shall continue for (i) fifteen (15) Business Days after the occurrence
thereof with respect to any term contained in Sections 7.01, 7.05, 7.06, 8.07
or 9.08; and (ii) thirty (30) days after the occurrence thereof with respect
to any other term.
() Default as to Other Indebtedness; Operating Leases. Holdco,
any Borrower or any of the Domestic Subsidiaries shall fail to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) with respect to any Indebtedness (other
than an Obligation) in excess of a principal amount of $10,000,000; or any
breach, default or event of default shall occur, or any other condition shall
exist under any instrument, agreement or indenture pertaining to any such
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption or other required repurchase of such Indebtedness, or permit the
holder(s) of such Indebtedness to accelerate the maturity of such Indebtedness
or require the redemption or other repurchase of such Indebtedness; or any
such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by Holdco, such Borrower or any of the Domestic Subsidiaries
(other than by a regularly scheduled required prepayment, mandatory redemption
or required repurchase) prior to the stated maturity thereof; or any material
breach, default or event of default remaining uncured for a period of thirty
(30) days after notice from the applicable landlord or owner on the part of
Holdco, such Borrower or any of the Domestic Subsidiaries shall occur under
any Operating Lease to which Holdco, such Borrower or any of the Domestic
Subsidiaries is a party pursuant to which the annual rental payments of such
Operating Lease equal or exceed $1,000,000, unless such default under any such
Operating Lease is being contested in good faith by Holdco, such Borrower or
such Domestic Subsidiary, as the case may be, by appropriate proceedings
diligently instituted and conducted and with respect to which appropriate
reserves have been set aside therefor in conformity with GAAP.
() Involuntary Bankruptcy; Appointment of Receiver, Etc.
() An involuntary case shall be commenced against Holdco, the
Company or any of its Subsidiaries and the petition shall not be dismissed,
stayed, bonded or discharged within sixty (60) days after commencement of the
case; or a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Holdco, the Company or any of its Subsidiaries
in an involuntary case, under any applicable bankruptcy, insolvency or other
similar law now or hereinafter in effect; or any other similar relief shall be
granted under any applicable federal, state, local or foreign law.
() A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Holdco, the Company or
any of its Subsidiaries or over all or a substantial part of the Property of
Holdco, the Company or any of its Subsidiaries shall be entered; or an interim
receiver, trustee or other custodian of Holdco, the Company or any of its
Subsidiaries or of all or a substantial part of the Property of Holdco, the
Company or any of its Subsidiaries shall be appointed or a warrant of
attachment, execution or similar process against any substantial part of the
Property of Holdco, the Company or any of its Subsidiaries shall be issued and
any such event shall not be stayed, dismissed, bonded or discharged within
sixty (60) days after entry, appointment or issuance.
() Voluntary Bankruptcy; Appointment of Receiver, Etc. Holdco,
the Company or any of its Subsidiaries shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under
any such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
Property; or Holdco, the Company or any of its Subsidiaries shall make any
assignment for the benefit of creditors.
() Judgments. Any judgment, writ, order or warrant of
attachment, or other similar process shall be rendered against Holdco, any
Borrower or any of the Domestic Subsidiaries or any of their respective
Properties involving in any single case or in the aggregate an amount
exceeding $10,000,000 in excess of applicable insurance coverage is (are)
entered and remains undischarged, unvacated and unstayed for a period of sixty
(60) days.
() Dissolution. Any order, judgment or decree shall be entered
against Holdco, the Company or any of its Subsidiaries, decreeing its
involuntary dissolution or other similar proceeding, and such order shall
remain undischarged and unstayed for a period in excess of sixty (60) days; or
Holdco, any Borrower or any of the Domestic Subsidiaries shall otherwise
dissolve or cease to exist except as specifically permitted hereby.
() Loan Documents; Failure of Security. At any time, for any
reason (i) any Loan Document ceases to be in full force and effect or Holdco,
the Company or any of its Subsidiaries party thereto seeks to repudiate its
obligations thereunder and the Liens intended to be created thereby are, or
Holdco, the Company or any such Subsidiary seeks to render such Liens, invalid
or unperfected, or (ii) Liens in favor of the Administrative Agent, the
CoAgents, the Issuing Banks and/or the Lenders contemplated by the Loan
Documents shall, at any time, for any reason, be invalidated or otherwise
cease to be in full force and effect, or such Liens shall be subordinated or
shall not have the priority contemplated hereby or by the other Loan Documents.
() Termination Event. Any Termination Event occurs which the
Administrative Agent believes has or is reasonably likely to have a Material
Adverse Effect.
() Waiver of Minimum Funding Standard. If the plan
administrator of any Plan applies under Section 412(d) of the Internal Revenue
Code for a waiver of the minimum funding standards of Section 412(a) of the
Internal Revenue Code and the Administrative Agent believes the substantial
business hardship upon which the application for the waiver is based has or is
reasonably likely to have a Material Adverse Effect.
() Change of Control. A Change of Control shall occur.
A Default or an Event of Default shall be deemed "continuing" until cured or
until waived in accordance with Section 13.07; provided, however, a Default
under Sections 7.01, 7.04 or 7.06(c) arising from the failure of the Company
to deliver to the Administrative Agent any item required to be delivered
pursuant to such sections within the appropriate time period specified for
such item shall not be deemed "continuing" if the Administrative Agent has
extended the time period for the delivery of such item pursuant to the terms
of such sections and such time period has not expired.
11.0. Rights and Remedies.
() Acceleration and Termination. Upon the occurrence of any
Event of Default described in Sections 11.01(f) or 11.01(g) other than with
respect to a Subsidiary that is a Non-Guarantor Domestic Subsidiary or an
Foreign Subsidiary, the Revolving Credit Commitments shall automatically and
immediately terminate and the unpaid principal amount of, and any and all
accrued interest on, the Obligations and all accrued fees shall automatically
become immediately due and payable, without presentment, demand, or protest or
other requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by the
Borrowers; and upon the occurrence and during the continuance of any other
Event of Default (including, without limitation, an Event of Default described
in Sections 11.01(f) or 11.01(g) with respect to a Subsidiary that is a
Non-Guarantor Domestic Subsidiary or an Foreign Subsidiary), the
Administrative Agent shall at the request, or may with the consent, of the
Requisite Lenders, by written notice to the Company, (i) declare that all or
any portion of the Revolving Credit Commitments are terminated, whereupon the
Revolving Credit Commitments and the obligation of each Lender to make any
Loan hereunder and of each Lender or Issuing Bank to issue or participate in
any Letter of Credit not then issued shall immediately terminate, and/or
(ii) declare the unpaid principal amount of and any and all accrued and unpaid
interest on the Obligations to be, and the same shall thereupon be,
immediately due and payable, without presentment, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by the
Borrowers.
() Deposit for Letters of Credit. In addition, after the
occurrence and during the continuance of an Event of Default, the Borrowers
shall, promptly upon demand by the Administrative Agent (given upon the
written instructions of the Requisite Lenders or, in the absence of such
instructions, in its sole discretion), deliver to the Administrative Agent,
Cash Collateral in such form and currency as requested by the Administrative
Agent, together with such endorsements, and execution and delivery of such
documents and instruments as the Administrative Agent may request in order to
perfect or protect the Administrative Agent's Lien with respect thereto, in an
aggregate principal amount equal to the then outstanding Letter of Credit
Obligations.
() Rescission. If at any time after termination of the
Revolving Credit Commitments and/or acceleration of the maturity of the Loans,
the Borrowers shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations which shall have become
due otherwise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified herein)
and all Events of Default and Defaults (other than nonpayment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 13.07, then upon
the written consent of the Requisite Lenders and written notice to the
Company, the termination of the Revolving Credit Commitments and/or the
acceleration and the consequences of such termination and/or acceleration may
be rescinded and annulled; but such action shall not affect any subsequent
Event of Default or Default or impair any right or remedy consequent thereon.
The provisions of the preceding sentence are intended merely to bind the
Lenders and the Issuing Banks to a decision which may be made at the election
of the Requisite Lenders; they are not intended to benefit the Borrowers and
do not give the Borrowers the right to require the Lenders to rescind or annul
any acceleration hereunder, even if the conditions set forth herein are met.
() Enforcement. Each of the Borrowers acknowledges that in the
event such Borrower or any of its Subsidiaries fails to perform, observe or
discharge any of its respective obligations or liabilities hereunder or under
any other Loan Document, any remedy of law may prove to be inadequate relief
to the Administrative Agent, the CoAgents, the Issuing Banks and the Lenders;
therefore, such Borrower agrees that the Administrative Agent, the CoAgents,
the Issuing Banks and the Lenders shall be entitled after the occurrence and
during the continuance of an Event of Default to seek temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
ARTICLE
THE AGENTS
12.0. Appointment. () Each Lender and each Issuing Bank
hereby designates and appoints (i) First Chicago as the Administrative Agent,
(ii) DLJ as the Syndication Agent and (iii) ABN AMRO as the Documentation
Agent, and each Lender and each Issuing Bank hereby irrevocably authorizes the
Administrative Agent to execute such documents (including, without limitation,
the Loan Documents to which the Administrative Agent is a party) and
irrevocably authorizes the Agents to take such other action on such Person's
behalf under the provisions hereof and of the Loan Documents and to exercise
such powers as are set forth herein or therein together with such other powers
as are reasonably incidental thereto. As to any matters not expressly
provided for hereby (including, without limitation, enforcement or collection
of the Notes or any amount payable under any provision of Article III when
due) or the other Loan Documents, none of the Agents shall be required to
exercise any discretion or take any action. Notwithstanding the foregoing,
the Administrative Agent shall be required to act or refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Requisite Lenders (unless the instructions or consent of
all of the Lenders is required hereunder or thereunder) and such instructions
shall be binding upon all Lenders, Issuing Banks and Holders; provided,
however, the Administrative Agent shall not be required to take any action
which (i) the Administrative Agent reasonably believes shall expose it to
personal liability unless the Administrative Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action or (ii) is
contrary hereto, to the other Loan Documents or applicable law. The Agents
agree to act as such on the express conditions contained in this Article XII.
() The provisions of this Article XII are solely for the
benefit of the Agents, the Lenders and Issuing Banks, and none of the
Borrowers or any Subsidiary of the Company shall have any rights to rely on or
enforce any of the provisions hereof (other than as expressly set forth in
Sections 12.07 and 12.09). In performing their respective functions and duties
hereunder, each of the Agents shall act solely as agent of the Lenders and the
Issuing Banks and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency, trustee or fiduciary with or for the
Borrowers or any Subsidiary of the Company. The Agents may perform any of
their respective duties hereunder, or under the Loan Documents, by or through
its agents or employees.
12.0. Nature of Duties. None of the Agents shall have any
duties or responsibilities except those expressly set forth herein or in the
Loan Documents. The duties of the Agents shall be mechanical and
administrative in nature. None of the Agents shall have by reason hereof a
fiduciary relationship in respect of any Holder. Nothing herein or in any of
the Loan Documents, expressed or implied, is intended to or shall be construed
to impose upon any Agent any obligations in respect hereof or any of the Loan
Documents except as expressly set forth herein or therein. Each Lender and
each Issuing Bank shall make its own independent investigation of the
financial condition and affairs of the Borrowers and their Subsidiaries in
connection with the making and the continuance of the Loans hereunder and with
the issuance of the Letters of Credit and shall make its own appraisal of the
creditworthiness of the Borrowers and their Subsidiaries initially and on a
continuing basis, and none of the Agents shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any
Holder with any credit or other information with respect thereto (except for
reports required to be delivered by any Agent under the terms hereof). If any
Agent seeks the consent or approval of any of the Lenders to the taking or
refraining from taking of any action hereunder, such Agent shall send notice
thereof to each Lender. The Administrative Agent shall promptly notify each
Lender at any time that the Lenders so required hereunder have instructed any
Agent to act or refrain from acting pursuant hereto.
12.0. Rights, Exculpation, Etc. () Liabilities;
Responsibilities. None of the Agents or any Affiliate of any of the Agents,
nor any of their respective officers, directors, trustees, employees or agents
shall be liable to any Holder for any action taken or omitted by them
hereunder or under any of the Loan Documents, or in connection therewith,
except that no Person shall be relieved of any liability imposed by law for
gross negligence or willful misconduct. None of the Agents shall be liable
for any apportionment or distribution of payments made by it in good faith
pursuant to Section 3.02(b), and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Holder to whom payment was due, but not made, shall be to recover from other
Holders any payment in excess of the amount to which they are determined to
have been entitled. None of the Agents shall be responsible to any Holder for
any recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, legality, enforceability,
collectibility, or sufficiency hereof or of any of the other Loan Documents or
the transactions contemplated thereby, or for the financial condition of the
Borrowers or any of their Subsidiaries. None of the Agents shall be required
to make any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions hereof or of any of the Loan Documents or
the financial condition of the Borrowers or any of their Subsidiaries, or the
existence or possible existence of any Default or Event of Default.
() Right to Request Instructions. Any Agent may at any time
request instructions from the Lenders with respect to any actions or approvals
which by the terms of any of the Loan Documents such Agent is permitted or
required to take or to grant, and such Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from those Lenders from whom such Agent is required
to obtain such instructions for the pertinent matter in accordance with the
Loan Documents. Without limiting the generality of the foregoing, no Holder
shall have any right of action whatsoever against any Agent as a result of
such Agent acting or refraining from acting under the Loan Documents in
accordance with the instructions of the Requisite Lenders or, where required
by the express terms hereof, a greater proportion of the Lenders.
12.0. Reliance. The Agents shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and
to have been signed, sent or made by the proper Person, and with respect to
all matters pertaining hereto or to any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for
the Borrowers), independent public accountants and other experts selected by
it.
12.0. Indemnification. To the extent that any Agent is not
reimbursed and indemnified by the Borrowers, the Lenders shall reimburse and
indemnify such Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against such Agent in any way relating to or arising
out of the Loan Documents or any action taken or omitted by such Agent under
the Loan Documents, in proportion to each Lender's Pro Rata Share; provided,
however, the Lenders shall have no obligation to such Agent with respect to
the matters indemnified pursuant to this Section resulting from the willful
misconduct or gross negligence of such Agent, as determined in a final,
non-appealable judgment by a court of competent jurisdiction. The obligations
of the Lenders under this Section 12.05 shall survive the payment in full of
the Loans, the Reimbursement Obligations and all other Obligations and the
termination hereof.
12.0. First Chicago, DLJ and ABN AMRO Individually. With
respect to their respective Pro Rata Shares of the Revolving Credit
Commitments hereunder, if any, and the Loans made by each of them, if any,
First Chicago, DLJ and ABN AMRO shall each have and may exercise the same
rights and powers hereunder and are each subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The
terms "Lenders" or "Requisite Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include First Chicago, DLJ and ABN AMRO
in their respective individual capacities as a Lender or as one of the
Requisite Lenders. First Chicago, DLJ, ABN AMRO and their respective
Affiliates may accept deposits from, lend money to, and generally engage in
any kind of banking, trust or other business with the Borrowers or any of
their Subsidiaries as if First Chicago were not acting as Administrative Agent
pursuant hereto or DLJ or ABN AMRO were not acting as CoAgent pursuant hereto.
12.0. Successor Administrative Agent; Resignation of
Administrative Agent and CoAgents. () Resignation. Any of the CoAgents or
the Administrative Agent may resign from the performance of its respective
functions and duties hereunder at any time by giving at least thirty (30)
Business Days' prior written notice to the Company and the Lenders. The
resignation of such CoAgent shall take effect upon the expiration of such
thirty-day period. The resignation of the Administrative Agent shall take
effect upon the acceptance by a successor Administrative Agent of appointment
pursuant to this Section 12.07.
() Appointment by Requisite Lenders. Upon any such notice of
resignation by the Administrative Agent, the Requisite Lenders shall have the
right to appoint a successor Administrative Agent selected from among the
Lenders which appointment shall be subject to the prior written approval of
the Company (which may not be unreasonably withheld, and shall not be required
upon the occurrence and during the continuance of an Event of Default). Upon
any such notice of resignation by either CoAgent, no successor CoAgent shall
be appointed.
() Appointment by Retiring Administrative Agent. If a successor
Administrative Agent shall not have been appointed within the thirty (30)
Business Day period provided in paragraph (a) of this Section 12.07, the
retiring Administrative Agent, with the consent of the Company (which may not
be unreasonably withheld, and shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent until such time,
if any, as the Requisite Lenders appoint a successor Administrative Agent as
provided above. In connection with the resignation of the Existing
Administrative Agent, the Lenders and Issuing Banks hereby authorize the
Administrative Agent to execute such resignation and assignment documentation
on their behalf in order to effect the appointment of First Chicago as
Administrative Agent and to assign to the Administrative Agent all of the
Existing Collateral Agent's rights, title and interest under all of the Loan
Documents.
() Rights of the Successor and Retiring Administrative Agents.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder thereafter to be performed. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Article XII shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was the Administrative Agent hereunder.
12.0. Relations Among Lenders. Each Lender and each Issuing
Bank agrees that it shall not take any legal action, nor institute any actions
or proceedings, against the Borrowers or any other obligor hereunder or with
respect to any Collateral without the prior written consent of the Requisite
Lenders. Without limiting the generality of the foregoing, no Lender may
accelerate or otherwise enforce its portion of the Obligations, or terminate
its Revolving Credit Commitments except in accordance with Section 11.02(a) or
a setoff permitted under Section 13.05.
12.0. Concerning the Collateral and the Loan Documents.
() Protective Advances. The Administrative Agent may from time to time,
after the occurrence and during the continuance of an Event of Default, make
such disbursements and advances in Dollars pursuant to the Loan Documents
which the Administrative Agent, in its sole discretion, deems necessary or
desirable to preserve or protect the Collateral or any portion thereof or to
enhance the likelihood or maximize the amount of repayment of the Loans and
other Obligations up to an amount not in excess of the lesser of the Revolving
Credit Availability at such time and $5,000,000 ("Protective Advances"). The
Administrative Agent shall notify the Company and each Lender in writing of
each such Protective Advance, which notice shall include a description of the
purpose of such Protective Advance. The Company agrees to pay the
Administrative Agent, upon demand, the principal amount of all outstanding
Protective Advances, together with interest thereon at the Base Rate
applicable to the Loans from the date of such Protective Advance until the
outstanding principal balance thereof is paid in full. If the Company fails to
make payment in respect of any Protective Advance within one (1) Business Day
after the date the Company receives written demand therefor from the
Administrative Agent, the Administrative Agent shall promptly notify each
Lender and each Lender agrees that it shall thereupon make available to the
Administrative Agent, in Dollars in immediately available funds, the amount
equal to such Lender's Pro Rata Share of such Protective Advance. If such
funds are not made available to the Administrative Agent by such Lender within
one (1) Business Day after the Administrative Agent's demand therefor, the
Administrative Agent shall be entitled to recover any such amount from such
Lender together with interest thereon at the Federal Funds Rate for each day
during the period commencing on the date of such demand and ending on the date
such amount is received. The failure of any Lender to make available to the
Administrative Agent its Pro Rata Share of any such Protective Advance shall
neither relieve any other Lender of its obligation hereunder to make available
to the Agent such other Lender's Pro Rata Share of such Protective Advance on
the date such payment is to be made nor increase the obligation of any other
Lender to make such payment to the Administrative Agent. All outstanding
principal of, and interest on, Protective Advances shall constitute Obligations
secured by the Collateral until paid in full by the Company.
() Authority. Each Lender and each Issuing Bank authorizes and
directs the Administrative Agent to enter into the Loan Documents relating to
the Collateral for the benefit of the Lenders and the Issuing Banks. Each
Lender and each Issuing Bank agrees that any action taken by the
Administrative Agent or the Requisite Lenders (or, where required by the
express terms hereof, a different proportion of the Lenders) in accordance
with the provisions hereof or of the other Loan Documents, and the exercise by
the Administrative Agent or the Requisite Lenders (or, where so required, such
different proportion) of the powers set forth herein or therein, together with
such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all of the Lenders and Issuing Banks. Without limiting the
generality of the foregoing, the Administrative Agent shall have the sole and
exclusive right and authority to (i) act as the disbursing and collecting
agent for the Lenders and the Issuing Banks with respect to all payments and
collections arising in connection herewith and with the Loan Documents
relating to the Collateral; (ii) execute and deliver each Loan Document
relating to the Collateral and accept delivery of each such agreement
delivered by the Borrowers or any of their Subsidiaries; (iii) act as
collateral agent for the Lenders and the Issuing Banks for purposes of the
perfection of all security interests and Liens created by such agreements and
all other purposes stated therein, provided, however, the Administrative Agent
hereby appoints, authorizes and directs each Lender and each Issuing Bank to
act as collateral sub-agent for the Administrative Agent, the CoAgents, the
Lenders and the Issuing Banks for purposes of the perfection of all security
interests and Liens with respect to the Company's and its Subsidiaries'
respective deposit accounts maintained with, and cash and Cash Equivalents
held by, such Lender or such Issuing Bank; (iv) manage, supervise and
otherwise deal with the Collateral; (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests
and liens created or purported to be created by the Loan Documents; and (vi)
except as may be otherwise specifically restricted by the terms hereof or of
any other Loan Document, exercise all remedies given to the Administrative
Agent, the CoAgents, the Lenders or the Issuing Banks with respect to the
Collateral under the Loan Documents relating thereto, applicable law or
otherwise.
() Release of Collateral. () Each of the CoAgents, the
Lenders, the Issuing Banks and the Holders hereby directs the Administrative
Agent to release any Lien held by the Administrative Agent for the benefit of
the Administrative Agent, the CoAgents, the Lenders, the Issuing Banks and the
other Holders:
(A) against all of the Collateral, upon final payment in full
of the Obligations and termination hereof;
(B) against any part of the Collateral sold or disposed of by
the Borrowers or any of their Subsidiaries, if such sale or
disposition is permitted by Section 9.02 (or permitted pursuant to a
waiver or consent of a transaction otherwise prohibited by such
Section) or, if not pursuant to such sale or disposition, against any
other substantial part of the Collateral if such release is consented
to by Lenders whose Pro Rata Shares, in the aggregate, are equal to
100%;
(C) against any of the Real Property listed on Schedule 9.02 at
the request of the Company at any time on or after the Effective Date;
and
(D) against any Collateral securing any promissory note pledged
to the Administrative Agent evidencing Indebtedness owing from any
Domestic Subsidiary to the Company or any other Domestic Subsidiary.
() Each of the Lenders and the Issuing Banks hereby directs the
Administrative Agent to execute and deliver or file such termination and
partial release statements and do such other things as are necessary to
release Liens to be released pursuant to this Section 12.09(c) promptly upon
the effectiveness of any such release.
() Confirmation by Lenders. Without in any manner limiting the
Administrative Agent's authority to act without any specific or further
authorization or consent by the Lenders (as set forth in subsection (c)
above), each Lender agrees to confirm in writing, upon request by the Company,
the authority to release Collateral conferred upon the Administrative Agent
under clauses (A) and (B) of subsection (c) above. So long as no Event of
Default is then continuing, upon receipt by the Administrative Agent of any
such written confirmation from the Lenders of the Administrative Agent's
authority to release any particular items or types of Collateral, and in any
event upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Agreement, and upon at least five (5) Business
Days' prior written request by the Company, the Administrative Agent shall
(and is hereby irrevocably authorized by the Lenders to) execute such
documents as may be necessary to evidence the release of the Liens upon such
Collateral granted to the Administrative Agent for the benefit of
Administrative Agent, the CoAgents, the Lenders, the Issuing Banks and the
other Holders; provided, however, that (i) the Administrative Agent shall not
be required to execute any such document on terms which, in the Administrative
Agent's opinion, would expose the Administrative Agent to liability or create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations
of the Borrowers or any of their Subsidiaries in respect of) all interests
retained by the Borrowers and/or any of their Subsidiaries, including (without
limitation) the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
() No Obligation. The Administrative Agent shall not have any
obligation whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by the Borrowers or any of their Subsidiaries or
is cared for, protected or insured or has been encumbered or that the Liens
granted to the Administrative Agent herein or pursuant to the Loan Documents
have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or
in any particular manner or under any duty of care, disclosure or fidelity, or
to continue exercising, any of the rights, authorities and powers granted or
available to the Administrative Agent in this Section 12.09 or in any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Administrative
Agent may act in any manner it may deem appropriate, in its sole discretion,
given the Administrative Agent's own interests in the Collateral as one of the
Lenders and that the Administrative Agent shall not have any duty or liability
whatsoever to any Lender.
() Collateral Matters Relating to Related Obligations. The
benefit of the Loan Documents and of the provisions of this Agreement relating
to the Collateral shall extend to and be available in respect of any
Obligations ("Related Obligations") which arise under any Interest Rate
Contracts or which are otherwise owed to Persons other than the Administrative
Agent, the CoAgents, the Lenders and the Issuing Banks, solely on the
condition and understanding, as among the Administrative Agent and all
Holders, that (i) the Related Obligations shall be entitled to the benefit of
the Collateral to the extent expressly set forth in this Agreement and the
Loan Documents, and to such extent the Administrative Agent shall hold, and
have the right and power to act with respect to, the Collateral on behalf of
and as agent for the Holders of the Related Obligations; but the
Administrative Agent is otherwise acting solely as agent for the Lenders and
the Issuing Banks and shall have no fiduciary duty, duty of loyalty, duty of
care, duty of disclosure or other obligations whatsoever to any Holder of
Related Obligations; and (ii) all matters, acts and omissions relating in any
manner to the Collateral, or the omission, creation, perfection, priority,
abandonment or release of any Lien, shall be governed solely by the provisions
of this Agreement and the Loan Documents and no separate Lien, right, power or
remedy shall arise or exist in favor of any Holder under any separate
instrument or agreement or in respect of any Related Obligations; and
(iii) each Holder shall be bound by all actions taken or omitted, in
accordance with the provisions of this Agreement and the Loan Documents, by
the Administrative Agent and the Requisite Lenders, each of whom shall be
entitled to act at its sole discretion and exclusively in its own interest
given its own Revolving Credit Commitments and its own interest in the Loans,
Letter of Credit Obligations and other Obligations to it arising under this
Agreement or the other Loan Documents, without any duty or liability to any
other Holder or as to any Related Obligations and without regard to whether
any Related Obligations remain outstanding or are deprived of the benefit of
the Collateral or become unsecured or are otherwise affected or put in
jeopardy thereby; and (iv) no holder of Related Obligations and no other
Holder (except the Administrative Agent, the CoAgents and the Lenders, to the
extent set forth in this Agreement) shall have any right to be notified of, or
to direct, require or be heard with respect to, any action taken or omitted in
respect of the Collateral or under this Agreement or the Loan Documents; and
(v) no holder of any Related Obligations shall exercise any right of setoff,
banker's lien or similar right except as expressly provided in Section 13.05.
ARTICLE
MISCELLANEOUS
13.0. Assignments. () Assignments. No assignments or
participations of any Lender's rights or obligations hereunder shall be made
except in accordance with this Section 13.01. Subject to compliance with all
Requirements of Law, each Lender may assign to one or more Eligible Assignees
all or a portion of its rights and obligations hereunder (including all of its
rights and obligations with respect to the Term Loans, the Revolving Loans and
the Letters of Credit) in accordance with the provisions of this Section 13.01.
() Limitations on Assignments. Each assignment by a Lender
shall be subject to the following conditions: (i) each assignment (other than
to a Lender or an Affiliate of any Lender) shall be approved by the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Company, which approval shall not be unreasonably withheld or
delayed; provided, however, that the Syndication Agent shall have the right to
make an assignment hereunder without the approval of the Borrowers; (ii) each
such assignment shall be to an Eligible Assignee; (iii) each such assignment
shall be in an amount at least equal to $5,000,000, in the case of Revolving
Loans and Revolving Credit Commitments, and $1,000,000, in the case of Term
Loans, except if the Eligible Assignee is a Lender or an Affiliate of any
Lender or if such assignment shall constitute all the assigning Lender's
interest hereunder; (iv) if any such assignment shall be of the assigning
Lender's Revolving Loans and Revolving Credit Commitments, such assignment
(other than any such assignment to an Affiliate of the Assigning Lender) shall
consist of the simultaneous assignment of corresponding pro rata portions of
the assigning Lender's Revolving Credit Commitment and Revolving Loans, and
(v) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance. Upon such execution, delivery, acceptance and
recording in the Register, from and after the effective date specified in each
Assignment and Acceptance and agreed to by the Administrative Agent, (x) the
assignee thereunder shall, in addition to any rights and obligations hereunder
held by it immediately prior to such effective date, if any, have the rights
and obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and shall, to the fullest extent permitted by law,
have the same rights and benefits hereunder as if it were an original Lender
hereunder and (y) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
hereunder and, in the case of an Assignment and Acceptance covering all or the
remaining portion of such assigning Lender's rights and obligations hereunder,
the assigning Lender shall cease to be a party hereto, except in each case,
to the extent provided in Section 13.09.
() The Register. The Administrative Agent shall maintain at
its address referred to in Section 13.08 a copy of each Assignment and
Acceptance delivered to and accepted by it and a register (the "Register") for
the recordation of the names and addresses of the Lenders and the Revolving
Credit Commitment under each Loan of, and principal amount of the Loans under
each facility owing to, each Lender from time to time and whether such Lender
is an original Lender or the assignee of another Lender pursuant to an
Assignment and Acceptance. The Register shall include a control account, and
a subsidiary account for each Lender, in which accounts (taken together) shall
be recorded (i) the date and amount of each Borrowing made hereunder, (ii) the
effective date and amount of each Assignment and Acceptance delivered to and
accepted by it and the parties thereto, (iii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to
each Lender hereunder or under the Notes, and (iv) the amount of any sum
received by the Administrative Agent from the Borrowers or any Subsidiary
Guarantor hereunder and each Lender's share thereof. The Administrative Agent
shall deliver a statement of such account to the Company whenever an
Assignment and Acceptance is accepted by it and the parties hereto; provided,
however, the Administrative Agent shall not be obligated to deliver such
statement more frequently than once a month. Each such statement shall be
deemed final, binding and conclusive upon the Borrowers in all respects as to
all matters reflected therein (absent manifest error) unless the Company,
within thirty (30) days after the date such statement is delivered to the
Company, delivers to the Administrative Agent written notice of any objections
which the Company may have to any such statement. In that event, only those
items expressly objected to in such notice shall be deemed to be disputed by
the Company. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Company and each of its
Subsidiaries, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes
hereof. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
Notwithstanding anything to the contrary contained in the
previous paragraph of this Section 13.01(c), the Loans (including the Notes
evidencing such Loans) are registered obligations and the right, title, and
interest of the Lenders and their assignees in and to such Loans shall be
transferrable only upon notation of such transfer in the Register. A Note
shall only evidence the Lender's or an assignee's right, title and interest in
and to the related Loan, and in no event is any such Note to be considered a
bearer instrument or obligation. This Section 13.01(c) shall be construed so
that the Loans are at all times maintained in "registered form" within the
meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Internal Revenue
Code and any related regulations (or any successor provisions of the Internal
Revenue Code or such regulations). Solely for purposes of this Section
13.01(e) and for tax purposes only, the Administrative Agent shall act as the
Company's agent for purposes of maintaining such notations of transfer in the
Register. No transfer by a Lender or an assignee of any of the Loans shall be
permitted or effective unless and until recorded in the Register. The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers and each of their Subsidiaries, the Agents,
and the Lenders may treat each Person whose name is recorded in the Register
as a Lender hereunder for all purposes hereof. The Register shall be
available for inspection by the Borrowers or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
() Fee. Upon its receipt of an Assignment and Acceptance
executed by the assigning Lender and an Eligible Assignee and a processing and
recordation fee of $3,500 (payable by the assigning Lender or the assignee, as
shall be agreed between them), the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in compliance herewith and
in substantially the form of Exhibit A hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company and the other Lenders.
() Information Regarding the Borrowers. Any Lender may, in
connection with any assignment or proposed assignment pursuant to this Section
13.01, disclose to the assignee or proposed assignee any information relating
to the Borrowers or their Subsidiaries furnished to such Lender by the
Administrative Agent or by or on behalf of the Borrowers; provided that, prior
to any such disclosure, such assignee or proposed assignee shall agree (for
the Borrowers' benefit) to preserve in accordance with Section 13.20 the
confidentiality of any information described therein.
() Lenders' Creation of Security Interests. Notwithstanding
any other provision set forth herein, (i) any Lender may at any time create a
security interest in all or any portion of its rights hereunder (including,
without limitation, Obligations owing to it and Notes held by it) in favor of
any Federal Reserve bank in accordance with Regulation A; and (ii) any Lender
shall be permitted to pledge all or any part of its right, title and interest
in, to and under the Loans and Notes held by it to any trustee for the benefit
of the holders of such trust's securities.
() Assignments by an Issuing Bank. If any Issuing Bank ceases
to be a Lender hereunder by virtue of any assignment made pursuant to this
Section 13.01, then, as of the effective date of such cessation, such Issuing
Bank's obligations to issue Letters of Credit pursuant to Section 2.04 shall
terminate and such Issuing Bank shall be an Issuing Bank hereunder only with
respect to outstanding Letters of Credit issued prior to such date.
() Participations. Subject to compliance with all Requirements
of Law, each Lender may sell participations to one or more other financial
institutions in or to all or a portion of its rights and obligations under and
in respect of any and all facilities hereunder (including, without limitation,
all or a portion of any or all of its Revolving Credit Commitments hereunder
and the Loans owing to it and its undivided interest in the Letters of
Credit); provided, however, that (i) such Lender's obligations hereunder
(including, without limitation, its Revolving Credit Commitments hereunder)
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii) the
Borrowers, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations hereunder and (iv) such participant's rights to agree
or to restrict such Lender's ability to agree to the modification, waiver or
release of any of the terms of the Loan Documents or to the release of any
Collateral covered by the Loan Documents, to consent to any action or failure
to act by any party to any of the Loan Documents or any of their respective
Subsidiaries or Affiliates, or to exercise or refrain from exercising any
powers or rights which any Lender may have under or in respect of the Loan
Documents or any Collateral, shall be limited to the right to consent to (A)
reduction of the principal of, or rate or amount of interest on the Loans(s)
subject to such participation (other than by the payment or prepayment thereof
and excluding any waiver of default interest pursuant to Section 4.01(d)), (B)
postponement of any scheduled date for any payment of principal of, or
interest on, the Loan(s) subject to such participation (except with respect to
any modifications of the application provisions relating to the prepayments of
Loans and other Obligations and any rescission of acceleration pursuant to
Section 11.02(c)) and (C) release of any Guarantor or all or any portion of
the Collateral, except as provided in Section 12.09(c) or in connection with
the sale of all or substantially all of the Capital Stock or Property of any
Subsidiary Guarantor or a merger of a Subsidiary Guarantor into another
Subsidiary Guarantor or into the Company, in each case approved by the
Requisite Lenders. No holder of a participation in all or any part of the
Loans shall be a "Lender" or a "Holder" for any purposes hereunder by reason
of such participation; provided, however, that each holder of a participation
shall have the rights and obligations of a Lender (including any right to
receive payment) under Sections 3.03, 3.04, 4.01(f), 4.02(f), 12.05 and 13.02;
provided, however, that all requests for any such payments shall be made by a
participant through the Lender granting such participation. The right of each
holder of a participation to receive payment under Sections 3.03, 3.04,
4.01(f), 4.02(f) and 13.02 shall be limited to the lesser of (i) the amounts
actually incurred by such holder for which payment is provided under said
Sections and (ii) the amounts that would have been payable under said Sections
by the applicable Borrower to the Lender granting the participation in respect
of the participated interest to such holder had such participation not been
granted.
() Payment to Participants. Anything herein to the contrary
notwithstanding, in the case of any participation, all amounts payable by the
Borrowers under the Loan Documents shall be calculated and made in the manner
and to the parties required hereby as if no such participation had been sold.
() No Registration. Notwithstanding any other provisions of
this Section 13.01, no transfer or assignment of interests or obligations of
any Lender hereunder or any grant of participations therein shall be permitted
if such transfer, assignment or grant would require the Company or any
Subsidiary Guarantor to file a registration statement under the Securities Act
with the Securities and Exchange Commission or to qualify the Loans or the
Notes under the state securities or "Blue Sky" laws of any state. The
approval of any proposed assignee by the Company required by this Agreement
shall not be deemed to be unreasonably withheld if the approval of such Person
would require any Loan or Note to be registered or qualified under any
applicable securities law.
() Investment Representation. Each Lender party to this
Agreement on the Effective Date hereby represents, and each Person that
becomes a Lender pursuant to an assignment permitted by this Section 13.01
will represent, and shall be deemed to have represented, upon becoming a party
to this Agreement, to the Borrowers and each Subsidiary Guarantor and the
other parties to this Agreement that it is a commercial lender, other financial
institution regularly engaged in making commercial loans or an "accredited
investor" or "qualified institutional investor" (as defined in Regulation D
and Rule 144A, respectively, of the Securities Act) and that it will make or
acquire Loans hereunder for its own account in the ordinary course of its
business.
() Notes Not Securities. Notwithstanding the foregoing
provisions of this Section 13.01, no provision of this Agreement shall be
construed to mean or imply that any Loan, any Note, the Revolving Credit
Commitments or any assignment thereof or grant of a participation therein is a
"security" under any applicable securities law.
13.0. Expenses.
() Generally. The Company agrees upon demand to pay, or
reimburse the Syndication Agent and the Administrative Agent for, all of the
Syndication Agent's and the Administrative Agent's reasonable internal and
external audit, legal, appraisal, valuation, filing, document duplication and
reproduction and investigation expenses and for all other out-of-pocket costs
and expenses of every type and nature (including, without limitation, the
reasonable fees, expenses and disbursements of counsel to each of the
Syndication Agent and the Administrative Agent, local legal counsel, auditors,
accountants, appraisers, printers, insurance and environmental advisers, and
other consultants and agents retained by the Syndication Agent and the
Administrative Agent, it being understood that the Syndication Agent and the
Administrative Agent will discuss with the Company the proposed use of a
consultant or agent prior to seeking reimbursement for such consultant's
expense) incurred by either the Syndication Agent or the Administrative Agent
in connection with (A) the Syndication Agent's and the Administrative Agent's
audit and investigation of the Company and the Company's Subsidiaries in
connection with the preparation, negotiation, and execution of the Loan
Documents and the Syndication Agent's and the Administrative Agent's periodic
audits of the Company or the Company's Subsidiaries; (B) the preparation,
negotiation, execution and interpretation hereof (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article V or in any amendment to this Agreement), the other Loan
Documents and any proposal letter or commitment letter issued in connection
therewith and the making of the Loans hereunder; (C) the creation, perfection
or protection of the Liens under the Loan Documents (including, without
limitation, any reasonable fees and expenses for local counsel in various
jurisdictions); (D) the ongoing administration hereof and of the Loans,
including consultation with attorneys in connection therewith and with respect
to the Syndication Agent's and Administrative Agent's rights and
responsibilities hereunder and under the other Loan Documents; (E) the
protection, collection or enforcement of any of the Obligations or the
enforcement of any of the Loan Documents; (F) the commencement, defense or
intervention in any court proceeding relating in any way to the Obligations,
the Property of Holdco, the Borrowers or any of the Domestic Subsidiaries, the
Borrowers, Holdco, any of the Company's Subsidiaries, this Agreement or any of
the other Loan Documents; (G) the response to, and preparation for, any
subpoena or request for document production with which the Syndication or the
Administrative Agent is served or deposition or other proceeding in which the
Syndication Agent or the Administrative Agent is called to testify, in each
case, relating in any way to the Obligations, the Property of Holdco, the
Borrowers or any of the Domestic Subsidiaries, the Borrowers, Holdco, any of
the Company's Subsidiaries, this Agreement or any of the other Loan Documents;
and (H) any amendments, consents, waivers, assignments, restatements, or
supplements to any of the Loan Documents and the preparation, negotiation, and
execution of the same.
() After Default. The Company further agrees to pay or
reimburse the Administrative Agent, the CoAgents, the Issuing Banks and the
Lenders upon demand for all out-of-pocket costs and expenses, including,
without limitation, reasonable attorneys' fees (including allocated costs of
internal counsel and costs of settlement), incurred by the Administrative
Agent, the CoAgents, any Issuing Bank or any Lender after the occurrence of an
Event of Default (i) in enforcing any Loan Document or Obligation or any
security therefor or exercising or enforcing any other right or remedy
available by reason of any Event of Default; (ii) in connection with any
refinancing or restructuring of the credit arrangements provided hereunder in
the nature of a "work-out" or in any insolvency or bankruptcy proceeding;
(iii) in commencing, defending or intervening in any litigation or in filing a
petition, complaint, answer, motion or other pleadings in any legal proceeding
relating to the Obligations, the Property, the Borrowers or any of the
Company's Subsidiaries and related to or arising out of the transactions
contemplated hereby or by any of the other Loan Documents; and (iv) in taking
any other action in or with respect to any suit or proceeding (bankruptcy or
otherwise) described in clauses (i) through (iii) above.
13.0. Indemnities. () Each Borrower agrees to indemnify and
hold harmless the Administrative Agent, each CoAgent, each Lender and each
Issuing Bank and their respective Affiliates (but excluding any Lender or
Affiliate of a Lender solely in such Lender's or Affiliate's capacity as an
underwriter of the Subordinated Notes), and the directors, trustees, officers,
employees, agents, partners, attorneys, consultants and advisors of or to any
of the foregoing (including, without limitation, those retained in connection
with the satisfaction or attempted satisfaction of any of the conditions set
forth in Article III) (each of the foregoing being and "Indemnitee") from and
against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind or nature (including, without limitation, reasonable fees and
disbursements of counsel to any such Indemnitee) which may be imposed on,
incurred by or asserted against any such Indemnitee in connection with or
arising out of any claim, investigation, litigation or proceeding, whether or
not any such Indemnitee is a party thereto, whether direct, indirect, or
consequential and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of this Agreement, the Existing Credit Agreement
(or any predecessor thereof), the Loan Documents, any Obligation, any Letter
of Credit, the issuance of the Subordinated Notes or any act, event or
transaction related or attendant to any thereof, including, without
limitation, (i) all Liabilities and Costs arising from or connected with the
past, present or future operations of such Borrower or any or its Subsidiaries
involving any Property subject to a Loan Document, or damage to real or
personal Property or natural resources or harm or injury alleged to have
resulted from any Release of Contaminants on, upon or into such Property or any
other affected real estate; (ii) any Liabilities or Costs incurred as a result
of any Remedial Action concerning such Borrower or any of its Subsidiaries;
(iii) any Liabilities or Costs incurred as a result of any Environmental Lien;
(iv) any Liabilities or Costs incurred pursuant to Environmental, Health and
Safety Requirements of Law, including, without limitation, CERCLA and
applicable state property transfer laws, whether, with respect to any of the
foregoing, such Indemnitee is a mortgagee pursuant to any leasehold mortgage,
a mortgagee in possession, the successor in interest to such Borrower or any
of its Subsidiaries, or the owner, lessee or operator of any Property of such
Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to any of the foregoing referred to in clauses (i), (ii), (iii) and
(iv), to the extent incurred following (x) foreclosure by the Administrative
Agent, any CoAgent any Lender or any Issuing Bank, or (y) the Administrative
Agent, any CoAgent any Lender or any Issuing Bank having become the successor
in interest to such Borrower or any of its Subsidiaries, attributable with
respect to clauses (x) and (y) solely to acts of the Administrative Agent,
such CoAgent, such Lender or such Issuing Bank or any agent on behalf of the
Administrative Agent, such CoAgent, such Lender or such or such Issuing Bank;
(v) the use or intended use of the proceeds of the Revolving Loans or Letters
of Credit (collectively, "Indemnified Matter"); or (vi) any action taken or
omitted by any Indemnitee in reliance on any notice or other written
communication in the form of a telecopy or facsimile received hereunder by
such Indemnitee; provided that such Borrower shall not have any obligation
under this Section 13.03 to an Indemnitee with respect to any Indemnified
Matter caused by or resulting from the gross negligence or willful misconduct
of that Indemnitee, as determined by a court of competent jurisdiction in a
final non-appealable judgment or order.
() Each Borrower shall indemnify the Administrative Agent, the
CoAgents, the Lenders and the Issuing Banks for, and hold the Administrative
Agent, the CoAgents, the Lenders and the Issuing Banks harmless from and
against, any and all claims for brokerage commissions, fees and other
compensation made against the Administrative Agent, the CoAgents, the Lenders
and the Issuing Banks for any broker, finder or consultant with respect to any
agreement, arrangement or understanding made by or on behalf of such Borrower
or its Subsidiaries in connection with the transactions contemplated by this
Agreement.
() The Administrative Agent, each CoAgent, each Lender and each
Issuing Bank agree that in the event that any such investigation, litigation
or proceeding set forth in subparagraph (a) above is asserted or threatened in
writing or instituted against it or any other Indemnitee, or any Remedial
Action is requested of it or any of its officers, directors, trustees, agents
and employees, for which any Indemnitee may desire indemnity or defense
hereunder, such Indemnitee shall promptly notify the Company in writing.
() Each Borrower, at the request of any Indemnitee, shall have
the obligation to defend against such investigation, litigation or proceeding
or requested Remedial Action, and such Borrower, in any event, may participate
in the defense thereof with legal counsel of the Company's choice. In the
event that such Indemnitee requests such Borrower to defend against such
investigation, litigation or proceeding or requested Remedial Action, such
Borrower shall promptly do so and such Indemnitee shall have the right to have
legal counsel chosen by such Indemnitee participate in such defense. No
action taken by legal counsel chosen by such Indemnitee in defending against
any such investigation, litigation or proceeding or requested Remedial Action
shall vitiate or in any way impair such Borrower's obligation and duty
hereunder to indemnify and hold harmless such Indemnitee.
() Each Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 13.03) or any other Loan Document
shall also inure to the benefit of any Person who was at any time an
Indemnitee under this Agreement or any other Loan Document.
13.0. Change in Accounting Principles. If any change in the
accounting principles used in the preparation of the most recent financial
statements referred to in Section 7.01 is after the Effective Date required or
permitted by the rules, regulations, pronouncements and opinions of the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar functions)
and are adopted by the Company with the agreement of its independent certified
public accountants and such change results in a change in the method of
calculation of any of the covenants, standards or terms found in Article IX
and Article X, the parties hereto agree to enter into negotiations in order to
amend such provisions so as to equitably reflect such change with the desired
result that the criteria for evaluating compliance with such covenants,
standards and terms by the Company shall be the same after such change as if
such change had not been made; provided, however, no change in accounting
principles that would affect the method of calculation of any of the covenants,
standards or terms shall be given effect in such calculations until such
provisions are amended, in a manner satisfactory to the Requisite Lenders and
the Company, to so reflect such change in accounting principles and all
references to GAAP in the defined terms used in Article IX and Article X shall
refer to GAAP as in effect on the Effective Date or, if such provisions are
amended, on the date such provisions are amended.
13.0. Setoff. In addition to any Liens granted under the Loan
Documents and any rights now or hereafter granted under applicable law, upon
the occurrence and during the continuance of any Event of Default, and with
the prior written consent of the Requisite Lenders, each Lender, each Issuing
Bank and any Affiliate of any Lender or Issuing Bank is hereby authorized by
the Company at any time or from time to time, without notice to any Person (any
such notice being hereby expressly waived) to set off and to appropriate and
to apply any and all deposits (general or, to the extent permitted by law,
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured (but not including trust accounts))
and any other Indebtedness at any time held or owing by such Lender, Issuing
Bank or any of their Affiliates to or for the credit or the account of any
Borrower against and on account of the Obligations of such Borrower to such
Lender, Issuing Bank or any of their Affiliates, including, but not limited
to, all Loans and Letters of Credit and all claims of any nature or
description arising out of or in connection herewith, irrespective of whether
or not (i) such Lender or Issuing Bank shall have made any demand hereunder or
(ii) the Administrative Agent, at the request or with the consent of the
Requisite Lenders, shall have declared the principal of and interest on the
Loans and other amounts due hereunder to be due and payable as permitted by
Article XI and even though such Obligations may be contingent or unmatured.
13.0. Ratable Sharing. The Lenders and the Issuing Banks
agree among themselves that, except as otherwise expressly provided in any
Loan Document, (i) with respect to all amounts received by them which are
applicable to the payment of the Obligations (excluding (x) the fees described
in Sections 2.04(g), 3.03, 3.04, 4.01(f) and 4.02 and (y) any amounts to
received in respect of Currency Agreements and/or Interest Rate Contracts)
equitable adjustment shall be made so that, in effect, all such amounts shall
be shared among them ratably in accordance with their Pro Rata Shares, whether
received by voluntary payment, by the exercise of the right of setoff or
banker's lien, by counterclaim or cross-action or by the enforcement of any or
all of such Obligations (excluding the payments described in Sections 2.04(g),
3.03, 3.04, 4.01(f) and 4.02) or the Collateral, (ii) if any of them shall by
voluntary payment or by the exercise of any right of counterclaim, setoff,
banker's lien or otherwise, receive payment of a proportion of the aggregate
amount of such Obligations held by it which is greater than the amount which
such Lender is entitled to receive hereunder, the Lender receiving such excess
payment shall purchase, without recourse or warranty, an undivided interest and
participation (which it shall be deemed to have done simultaneously upon the
receipt of such payment) in such Obligations owed to the others so that all
such recoveries with respect to such Obligations shall be applied ratably in
accordance with their Pro Rata Shares; provided, however, that if all or part
of such excess payment received by the purchasing party is thereafter recovered
from it, those purchases shall be rescinded and the purchase prices paid for
such participation shall be returned to such party to the extent necessary to
adjust for such recovery, but without interest except to the extent the
purchasing party is required to pay interest in connection with such recovery.
Each Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 13.06 may, to the fullest extent permitted by
law, exercise all its rights of payment (including, subject to Section 13.05,
the right of setoff) with respect to such participation as fully as if such
Lender were the direct creditor of such Borrower in the amount of such
participation.
13.0. Amendments and Waivers. () General Provisions. Unless
otherwise provided herein, no amendment or modification of any provision
hereof shall be effective without the written agreement of the Requisite
Lenders (or such other required number of Lenders as herein provided) and the
Borrowers, and no termination or waiver of any provision hereof, or consent to
any departure by the Borrowers therefrom, shall be effective without the
written concurrence of the Requisite Lenders, which the Requisite Lenders
shall have the right to grant or withhold in their sole discretion.
() Amendments, Consents and Waivers by Affected Lenders. Any
amendment, modification, termination, waiver or consent with respect to any of
the following provisions hereof shall be effective only by a written
agreement, signed by each Term Loan Lender affected thereby, in the case of
clauses (i), (iii) and (iv) below, each Term Loan Lender increasing its Term
Loan Commitment, the Requisite Lenders and Term Loan Lenders holding in the
aggregate more than 66 2/3% of the then aggregate amount of the Term Loans, in
the case of clause (ii) below, and Term Loan Lenders holding in the aggregate
more than 51% of the then aggregate principal amount of the Term Loans, in the
case of clause (v) below, in each case in respect of any of the following in
respect of the Term Loans; and by each Revolving Credit Lender affected
thereby, in the case of clauses (i), (iii) and (iv) below, each Revolving
Credit Lender increasing its Revolving Credit Commitment and the Requisite
Lenders, in the case of clause (ii) below, and Revolving Credit Lenders
holding in the aggregate more than 51% of the then aggregate amount of the
Revolving Credit Commitments in effect at such time, in the case of clause (v)
below, in respect of any of the following in respect of Revolving Loans or
Reimbursement Obligations:
() waiver of any of the conditions with respect to the making
or the extension of the maturities of Term Loans or Revolving Loans
specified in Section 5.01 or 5.02 (except with respect to a condition
based upon another provision hereof, the waiver of which requires only
the concurrence of the Requisite Lenders),
() increase in the amount of the Term Loan Commitment or the
Revolving Credit Commitment of such Lender,
() reduction of the principal of, rate or amount of interest on
the Term Loans, the Revolving Loans or Reimbursement Obligations or
any fees or other amounts payable to such Lender, as the case may be
(excluding amounts so payable pursuant to Sections 3.01(b) and any
waiver of default interest pursuant to Section 4.01(d)),
() extension of the Revolving Credit Termination Date, any
postponement or waiver of any scheduled reduction of the Revolving
Credit Commitments pursuant to Section 3.01(c) or the postponement of
any date on which any scheduled payment of principal of, or interest
on, the Term Loans, the Revolving Loans or Reimbursement Obligations
or any fees or other amounts payable to such Lender (excluding amounts
so payable pursuant to Section 3.01(b)) would otherwise be due, and
() postponement of any date fixed for, reduction of the
amount of or change in order of application of, any mandatory
prepayment or repayment made pursuant to Section 3.01(b).
() Amendments, Consents and Waivers by all Lenders.
Notwithstanding the foregoing but subject to Section 11.02(c), any amendment,
modification, termination, waiver or consent with respect to any of the
following provisions hereof shall be effective only by a written agreement,
signed by the Borrowers and each Lender:
() release of any Guarantor (except in connection with the sale
of all or substantially all of the Capital Stock or Property of any
Subsidiary Guarantor or a merger of a Subsidiary Guarantor into
another Subsidiary Guarantor or into the Company, in each case
approved by the Requisite Lenders or otherwise permitted under Section
9.02 or otherwise permitted hereunder) or all or a substantial portion
of the Collateral (except as provided in Section 12.09(c)),
() change in the aggregate Pro Rata Shares of the Lenders which
shall be required for the Lenders or any of them to take action
hereunder,
() change in the definition of Requisite Lenders, or
() amendment of Sections 12.09(c) or 13.06 or this Section
13.07.
The Administrative Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of that Lender. The Syndication Agent shall coordinate
all amendments, modifications, waivers and consents with the Administrative
Agent and the Borrowers. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrowers in any case shall entitle the Borrowers
to any other or further notice or demand in similar or other circumstances.
Notwithstanding anything to the contrary contained in this Section 13.07, no
amendment, modification, waiver or consent shall affect the rights or duties
of any of the Agents hereunder or under the other Loan Documents, including
this Article XIII, unless made in writing and signed by the Agent so affected
in addition to the Lenders required above to take such action.
Notwithstanding anything herein to the contrary, in the event that any
Borrower shall have requested, in writing, that any Lender agree to an
amendment, modification, waiver or consent with respect to any particular
provision or provisions hereof, and such Lender shall have failed to state, in
writing, that it either agrees or disagrees (in full or in part) with all such
requests (it being understood that any such statement of agreement may be
subject to satisfactory documentation and other conditions specified in such
statement) within thirty (30) days of such request, then such Lender hereby
irrevocably authorizes the Administrative Agent to agree or disagree, in full
or in part, and in the Administrative Agent's sole discretion, to such
requests on behalf of such Lender as such Lender's attorney-in-fact and to
execute and deliver any writing approved by the Administrative Agent which
evidences such agreement as such Lender's duly authorized agent for such
purposes.
13.0. Notices. Unless otherwise specifically provided herein,
any notice, consent or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied, or sent by
courier service and shall be deemed to have been given when delivered in
person or by courier service, or upon receipt of a telecopy. Notices to the
Administrative Agent pursuant to Articles II or III shall not be effective
until received by the Administrative Agent. For the purposes hereof, the
addresses of the parties hereto (until notice of a change thereof is delivered
as provided in this Section 13.08) shall be as set forth below each party's
name on the signature pages hereof, in the case of the Borrowers, on Schedule
1.01, in the case of the Lenders and Issuing Banks, or the signature page of
any applicable Assignment and Acceptance, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties hereto.
13.0. Survival of Warranties and Agreements. All
representations and warranties made herein and all obligations of the
Borrowers in respect of taxes, indemnification and expense reimbursement shall
survive the execution and delivery hereof and of the other Loan Documents, the
making and repayment of the Loans, the issuance and discharge of Letters of
Credit hereunder and the termination hereof and shall not be limited in any
way by the passage of time or occurrence of any event and shall expressly
cover time periods when the Administrative Agent, either CoAgent, any of the
Issuing Banks or any of the Lenders may have come into possession or control
of any of the Borrowers' or their Subsidiaries' Property; provided, however,
all representations and warranties made herein or in any other Loan Document
by the Borrowers or any of their Subsidiaries shall terminate when all
Obligations (other than indemnities not then due) have been paid in full and
this Agreement has been terminated.
13.. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent, either CoAgent
any Lender or any Issuing Bank in the exercise of any power, right or
privilege under any of the Loan Documents shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right,
power or privilege. All rights and remedies existing under the Loan Documents
are cumulative to and not exclusive of any rights or remedies otherwise
available.
13.. Marshalling; Payments Set Aside. None of the
Administrative Agent, either CoAgent, any Lender or any Issuing Bank shall be
under any obligation to marshall any Property in favor of the Borrowers or any
other party or against or in payment of any or all of the Obligations. To the
extent that any Borrower makes a payment or payments to the Administrative
Agent, the CoAgents, the Lenders or the Issuing Banks or any of such Persons
receives payment from the proceeds of the Collateral or exercise their rights
of setoff, and such payment or payments or the proceeds of such enforcement or
setoff or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party, then to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens,
right and remedies therefor, shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.
13.. Severability. In case any provision in or obligation
hereunder or under the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired
thereby.
13.. Headings. Section headings herein are included herein
for convenience of reference only and shall not constitute a part hereof or be
given any substantive effect.
13.. Governing Law. THIS AGREEMENT SHALL BE INTERPRETED, AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
13.. Limitation of Liability. No claim may be made by any
Borrower, any of the their Subsidiaries, any Lender, any Issuing Bank, any
CoAgent, the Administrative Agent or any other Person against such Borrower,
any of the their Subsidiaries, the Administrative Agent, any CoAgent, any
other Issuing Bank or any other Lender or the Affiliates, directors, trustees,
officers, employees, attorneys or agents of any of them for any special,
consequential or punitive damages in respect of any claim for breach of
contract or any other theory of liability arising out of or related to the
transactions contemplated hereby, or any act, omission or event occurring in
connection therewith; and the Borrowers, each of the Borrowers' Subsidiaries,
each Lender, each Issuing Bank, each CoAgent and the Administrative Agent
hereby waives, releases and agrees not to sue upon any such claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
13.. Successors and Assigns. This Agreement and the other
Loan Documents shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of the Lenders and the Issuing
Banks. The rights hereunder and the interest herein of the Borrowers may not
be assigned without the written consent of all Lenders, except as otherwise
permitted hereunder. Any attempted assignment without such written consent
shall be void.
13.. Certain Consents and Waivers.
() Personal Jurisdiction. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, () EACH OF THE ADMINISTRATIVE AGENT, THE COAGENTS, THE
LENDERS, THE ISSUING BANKS AND THE BORROWERS IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK, AND ANY
COURT HAVING JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY
ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL
TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT,
WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE COURT OR IN SUCH FEDERAL
COURT. EACH BORROWER IRREVOCABLY DESIGNATES AND APPOINTS PRENTICE HALL
CORPORATION AT 15 COLUMBUS CIRCLE, NEW YORK, NEW YORK 10023, AS ITS RESPECTIVE
PROCESS AGENT (THE "PROCESS AGENT") FOR SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED TO BE
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. EACH OF THE ADMINISTRATIVE
AGENT, THE COAGENTS, THE LENDERS, THE ISSUING BANKS AND THE BORROWERS AGREES
THAT A FINAL NONAPPEALABLE JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH OF THE ADMINISTRATIVE AGENT, THE
COAGENTS, THE LENDERS, THE ISSUING BANKS AND THE BORROWERS WAIVES IN ALL
DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE IN ANY SUCH ACTION OR PROCEEDING IN SUCH STATE COURT
OR IN SUCH FEDERAL COURT.
() EACH BORROWER AGREES THAT THE ADMINISTRATIVE AGENT SHALL
HAVE THE RIGHT TO PROCEED AGAINST THE SUBSIDIARY GUARANTORS, THE BORROWERS OR
THEIR RESPECTIVE PROPERTY IN A COURT HAVING JURISDICTION IN ANY LOCATION TO
ENABLE THE ADMINISTRATIVE AGENT, THE COAGENTS, THE ISSUING BANKS AND THE
LENDERS TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF
THE ADMINISTRATIVE AGENT, ANY COAGENT, ANY ISSUING BANK OR ANY LENDER. EACH
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN
WHICH THE ADMINISTRATIVE AGENT, ANY COAGENT ANY ISSUING BANK OR ANY LENDER MAY
COMMENCE A PROCEEDING DESCRIBED IN THIS SECTION.
() Service of Process. TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW: EACH BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE PROCESS AGENT OR SUCH BORROWER'S NOTICE ADDRESS SPECIFIED
PURSUANT TO SECTION 13.08, SUCH SERVICE TO BECOME EFFECTIVE FIVE (5) DAYS AFTER
SUCH MAILING. EACH OF THE ADMINISTRATIVE AGENT, COAGENTS, LENDERS, ISSUING
BANKS AND THE BORROWERS IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE ADMINISTRATIVE AGENT TO BRING PROCEEDINGS AGAINST THE BORROWERS
IN THE COURTS OF ANY OTHER JURISDICTION.
() Waiver of Jury Trial. EACH OF THE ADMINISTRATIVE AGENT,
COAGENTS, THE ISSUING BANKS, THE LENDERS AND THE BORROWERS IRREVOCABLY WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT.
13.. Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents, or supplements hereto may be
executed in counterparts, each of which when so executed and delivered shall
be deemed an original, but all such counterparts together shall constitute but
one and the same instrument. This Agreement and each of the other Loan
Documents shall be construed to the extent reasonable to be consistent one
with the other, but to the extent that the terms and conditions hereof are
actually inconsistent with the terms and conditions of any other Loan
Document, this Agreement shall govern. On the Effective Date, the Existing
Credit Agreement shall be amended and restated in its entirety by this
Agreement and the Existing Credit Agreement shall thereafter be of no further
force and effect; provided that if the Effective Date shall not have occurred
on or prior to November 24, 1998, this Agreement will terminate and will be of
no further force and effect. The terms and conditions of this Agreement and
the Administrative Agent's and the Lenders' rights and remedies under this
Agreement, shall apply to all of the Obligations incurred under the Existing
Credit Agreement. It is expressly understood and agreed by the parties hereto
that this Agreement is in no way intended to constitute a novation of the
obligations and liabilities existing under the Existing Credit Agreement or
evidence payment of all or any of such obligations and liabilities. The
Company reaffirms the Liens granted to the Administrative Agent for the
benefit of the Lenders pursuant to each of the Loan Documents executed by the
Company, which Liens shall continue in full force and effect during the term
of this Agreement and any renewals thereof and shall continue to secure the
Obligations identified in such Loan Documents. All references to the Existing
Credit Agreement in the Loan Documents shall be deemed to refer to this
Agreement. This Agreement and each of the other Loan Documents shall be
construed to the extent reasonable to be consistent one with the other, but to
the extent that the terms and conditions of this Agreement are actually
inconsistent with the terms and conditions of any other Loan Document, this
Agreement shall govern.
13.. Limitation on Agreements. All agreements between the
Borrowers, the Administrative Agent, each CoAgent, each Lender and each
Issuing Bank in the Loan Documents are hereby expressly limited so that in no
event shall any of the Loans or other amounts payable by the Borrowers under
any of the Loan Documents be directly or indirectly secured (within the
meaning of Regulation U) by Margin Stock.
13.. Confidentiality. Subject to Section 13.01(e), the
Administrative Agent, the CoAgents, the Lenders and the Issuing Banks shall
hold all nonpublic information obtained pursuant to the requirements hereof in
accordance with such Person's customary procedures for handling confidential
information of this nature and in accordance with customary business practices
and in any event may make disclosure reasonably required by a bona fide
offeree or assignee (or participant) in connection with the contemplated
transfer (or participation), or as required or requested by any Governmental
Authority (including, without limitation, the NAIC) or representative thereof,
or pursuant to legal process, or to its accountants, lawyers and other
advisors, and shall require any such offeree or assignee (or participant) to
agree (and require any of its offerees, assignees or participants to agree) to
comply with this Section 13.20. In no event shall the Administrative Agent,
any CoAgent, any Lender or any Issuing Bank be obligated or required to return
any materials furnished by the Borrowers; provided, however, each offeree
shall be required to agree that if it does not become a assignee (or
participant) it shall return all materials furnished to it by the Borrowers in
connection herewith.
13.. Entire Agreement. This Agreement, taken together with
all of the other Loan Documents, embodies the entire agreement and
understanding among the parties hereto and supersedes the commitment letter
dated October 30, 1998 from DLJ and Donaldson, Lufkin & Jenrette Securities
Corporation and accepted and agreed to by the Company on October 30, 1998 and
all prior agreements and understandings, written and oral (other than the
Letter Agreement which constitutes a Loan Document), relating to the subject
matter hereof.
13.. Judgment Currency. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from any Borrower
hereunder in the currency expressed to be payable herein (the "specified
currency") into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall
be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the specified currency with such other
currency at the Administrative Agent's main Chicago office on the Business Day
preceding that on which final, non-appealable judgment is given. The
obligations of such Borrower in respect of any sum due to any Lender or the
Administrative Agent hereunder shall, notwithstanding any judgment in a
currency other than the specified currency, be discharged only to the extent
that on the Business Day following receipt by such Lender or the
Administrative Agent (as the case may be) of any sum adjudged to be so due in
such other currency such Lender or the Administrative Agent (as the case may
be) may in accordance with normal, reasonable banking procedures purchase the
specified currency with such other currency. If the amount of the specified
currency so purchased is less than the sum originally due to such Lender or
the Administrative Agent, as the case may be, in the specified currency, each
Borrower agrees, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Administrative Agent, as the case may be, against such loss, and
if the amount of the specified currency so purchased exceeds (a) the sum
originally due to any Lender or the Administrative Agent, as the case may be,
in the specified currency and (b) any amounts shared with other Lenders as a
result of allocations of such excess as a disproportionate payment to such
Lender under Section 13.05, such Lender or the Administrative Agent, as the
case may be, agrees to remit such excess to the Borrowers.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS
1.01. Certain Defined Terms
1.02. Computation of Time Periods
1.03. Accounting Terms
1.04. Other Definitional Provisions
1.05. Other Terms
ARTICLE II AMOUNTS AND TERMS OF LOANS
2.01. The Term Loans
2.02. Revolving Credit Facility
2.03. Swing Loans
2.04. Letters of Credit
2.05. Promise to Repay; Evidence of Indebtedness
2.06. Authorized Officers and Agents
2.07. Designation of Foreign Borrowers
ARTICLE III PAYMENTS AND PREPAYMENTS
3.01. Prepayments; Reductions in Revolving Credit Commitments
3.02. Payments
3.03. Taxes
3.04. Increased Capital
3.05. Right to Remove Affected Lender
3.06. European Economic and Monetary Union
ARTICLE IV INTEREST AND FEES
4.01. Interest on the Loans and Other Obligations
4.02. Special Provisions Governing Eurocurrency Rate Loans
4.03. Fees
ARTICLE V CONDITIONS TO LOANS AND LETTERS OF CREDIT
5.01. Conditions Precedent to the Effectiveness of this
Agreement
5.02. Conditions Precedent to All Subsequent Revolving Loans,
Swing Loans and Letters of Credit
ARTICLE VI REPRESENTATIONS AND WARRANTIES
6.01. Representations and Warranties of the Borrowers
ARTICLE VII REPORTING COVENANTS
7.01. Financial Statements
7.02. Notice of Events of Default
7.03. Lawsuits
7.04. Insurance
7.05. ERISA Notices
7.07. Labor Matters
7.08. Public Filings and Reports
7.09. Ongoing Y2K Reports
7.10. Other Information
ARTICLE VIII AFFIRMATIVE COVENANTS
8.01. Corporate Existence, Etc.
8.02. Corporate Powers; Conduct of Business, Etc.
8.03. Compliance with Laws, Etc.
8.04. Payment of Taxes and Claims; Tax Consolidation
8.05. Insurance
8.06. Inspection of Property; Books and Records; Discussions
8.07. Insurance and Condemnation Proceeds
8.08. ERISA Compliance
8.09. Foreign Employee Benefit Plan Compliance
8.10. Maintenance of Property
8.11. Condemnation
8.12. Future Liens on Real Property
8.13. Future Liens on Personal Property
8.14. Landlord Waivers
8.15. Environmental Compliance
8.16. PostClosing Matters
8.17. Permitted Acquisitions
ARTICLE IX NEGATIVE COVENANTS
9.01. Indebtedness
9.02. Sales of Assets
9.03. Liens
9.04. Investments
9.05. Accommodation Obligations
9.06. Restricted Junior Payments
110
9.07. Conduct of Business
9.08. Transactions with Affiliates
9.09. Restriction on Fundamental Changes
9.10. Sales and Leasebacks
9.11. Margin Regulations; Securities Laws
9.12. ERISA
9.13. Issuance or Sale of Capital Stock
9.14. Constituent Documents
9.15. Fiscal Year
9.16. Cancellation of Debt; Prepayment; Certain Amendments
9.17. Environmental Matters
9.18. Foreign Subsidiary
9.19. No New Restrictions on Subsidiary Dividends
9.20. Accounting Changes
ARTICLE X FINANCIAL COVENANTS
10.01. [Intentionally omitted]
10.02. Minimum Fixed Charge Coverage Ratio
10.03. Minimum Interest Coverage Ratio
10.04. Maximum Leverage Ratio
10.05. Maximum Capital Expenditures
ARTICLE XI EVENTS OF DEFAULT; RIGHTS AND REMEDIES
11.01. Events of Default
11.02. Rights and Remedies
ARTICLE XII THE AGENTS
12.01. Appointment
12.02. Nature of Duties
12.03. Rights, Exculpation, Etc.
12.04. Reliance
12.05. Indemnification
12.06. First Chicago, DLJ and ABN AMRO Individually
12.07. Successor Administrative Agent; Resignation of
Administrative Agent and CoAgents
12.08. Relations Among Lenders
12.09. Concerning the Collateral and the Loan Documents
ARTICLE XIII MISCELLANEOUS
13.01. Assignments
13.02. Expenses
13.03. Indemnities
13.04. Change in Accounting Principles
13.05. Setoff
13.06. Ratable Sharing
13.07. Amendments and Waivers
13.08. Notices
13.09. Survival of Warranties and Agreements
13.10. Failure or Indulgence Not Waiver; Remedies Cumulative
13.11. Marshalling; Payments Set Aside
13.12. Severability
13.13. Headings
13.14. Governing Law
13.15. Limitation of Liability
13.16. Successors and Assigns
13.17. Certain Consents and Waivers
13.18. Counterparts; Effectiveness; Inconsistencies
13.19. Limitation on Agreements
13.20. Confidentiality
13.21. Entire Agreement
13.22. Judgment Currency
EXHIBITS
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Notice of Borrowing
Exhibit C -- Form of Notice of Continuation/Conversion
Exhibit D -- Form of Term Loan Note
Exhibit E -- Form of Revolving Credit Note
Exhibit F -- Form of Swing Loan Note
Exhibit G -- Form of Foreign Borrower Assumption Agreement
Exhibit H -- List of Closing Documents
Exhibit I -- Form of Officer's Certificate to Accompany Reports
SCHEDULES
Schedule 1.01 -- Commitments; Notice Addresses; Applicable
Lending Offices
Schedule 1.01.1 -- Permitted Existing Accommodation Obligations
Schedule 1.01.2 -- Permitted Existing Indebtedness
Schedule 1.01.3 -- Permitted Existing Investments
Schedule 1.01.4 -- Permitted Existing Liens
Schedule 1.01.5 -- Associated Costs Rate
Schedule 6.01C -- Corporate Structure
Schedule 6.01-D -- Conflicts with Contractual Obligations
Schedule 6.01-E -- Governmental Consents
Schedule 6.01I -- Litigation
Schedule 6.01K -- Taxes
Schedule 6.01O -- Environmental Matters
Schedule 6.01P -- ERISA Matters
Schedule 6.01R -- Collective Bargaining Agreements
Schedule 6.01U -- Intellectual Property Infringement Claims
Schedule 6.01-V -- Real Property
Schedule 6.01W -- Insurance Policies and Programs
Schedule 6.01-Y -- Transactions with Affiliates
Schedule 6.01-CC -- Y2K Compliance
Schedule 9.02 -- Properties to be Sold
Schedule 9.16 -- Intercompany Indebtedness
Schedule 9.18 -- Permitted Accommodation Obligations and Liens
of Foreign Subsidiaries
EXHIBIT 12.1
INSILCO CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In thousands, except ratio data)
<TABLE>
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income from continuing operations
before income taxes per statement of
operations $(14,577) 34,700 38,485 36,818 (5,061)
Add:
Portion of rents representative
of the interest factor 748 864 1,143 1,479 1,597
Interest on indebtedness 28,427 18,557 17,538 19,530 27,930
Amortization of debt expense 686 989 848 1,032 1,268
-------- ------ ------ ------ ------
Income as adjusted $ 15,284 55,110 58,014 58,859 25,734
======== ====== ====== ====== ======
Fixed charges:
Interest on indebtedness: (1) 28,957 18,955 17,747 19,596 28,201
-------- ------ ------ ------ ------
Amortization of debt expense (2) 686 989 848 1,032 1,268
-------- ------ ------ ------ ------
Capitalized interest (3) 20 173 202 220 6
-------- ------ ------ ------ ------
Rents 2,243 2,593 3,429 4,436 4,791
Portion of rents representative
of the interest factor (4) 748 864 1,143 1,479 1,597
-------- ------ ------ ------ ------
Fixed charges (1)+(2)+(3)+(4) $ 30,411 20,981 19,940 22,327 31,072
======== ====== ====== ====== ======
Ratio of earnings to fixed charges 0.50x 2.63x 2.91x 2.64x 0.83x
======== ====== ====== ====== ======
</TABLE>
Consent of Independent Auditors'
The Board of Directors
Insilco Corporation:
The audits referred to in our report dated February 1, 1999, except as to the
first paragraph of Note 7, which is as of March 26, 1999, included the related
financial statement schedules as of December 31, 1998, and for each of the years
in the three-year period ended December 31, 1998, included in the registration
statement. These financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statement schedules based on our audits. In our opinion, such
financial statement schedules, when considered in relation to the basic
consolidated financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
We consent to the use of our audit report included herein and to the reference
to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
------------
Columbus, Ohio
April 6, 1999
EXHIBIT 99.1
LETTER OF TRANSMITTAL
INSILCO CORPORATION
Offer to Exchange Its
12% Series B Senior Subordinated Notes due 2007
(Registered Under The Securities Act of 1933)
For Any and All of Its Outstanding
12% Series A Senior Subordinated Notes due 2007
Pursuant to the Prospectus
Dated April _, 1999
- ------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT __:__ P.M., NEW
YORK CITY TIME, ON ____________ __, 1999, UNLESS THE OFFER IS EXTENDED.
- ------------------------------------------------------------------------------
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
STAR BANK, N.A.
By Registered or Certified Mail: By Overnight Delivery or Hand:
Star Bank, N.A. Star Bank, N.A.
425 Walnut Street 425 Walnut Street
6th Floor 6th Floor
Cincinnati, Ohio 45201-1118 Cincinnati, Ohio 45201-1118
Attn: William Sicking Attn: William Sicking
To Confirm by Telephone Facsimile Transmissions:
or for Information: (513) 632-5511
(513) 632-4278
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF THIS LETTER OF TRANSMITTAL VIA FACSIMILE TO A
NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS
LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the same meaning
given them in the Prospectus (as defined below).
This Letter of Transmittal is to be completed by holders of Old Notes (as
defined below) if Old Notes are to be forwarded herewith. If tenders of Old
Notes are to be made by book-entry transfer to an account maintained by Star
Bank, N.A. (the "Exchange Agent") at The Depository Trust Company ("DTC")
pursuant to the procedures set forth in "The Exchange Offer--Book-Entry
Transfer" in the Prospectus and in accordance with the Automated Tender Offer
Program ("ATOP") established by DTC, a tendering holder will become bound by
the terms and conditions hereof in accordance with the procedures established
under ATOP.
<PAGE>
Holders of Old Notes whose certificates (the "Certificates") for such Old
Notes are not immediately available or who cannot deliver their Certificates
and all other required documents to the Exchange Agent on or prior to the
Expiration Date (as defined in the Prospectus) or who cannot complete the
procedures for book-entry transfer on a timely basis, must tender their Old
Notes according to the guaranteed delivery procedures set forth in "The
Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus. SEE
INSTRUCTION 1. DELIVERY OF DOCUMENTS TO DTC IN ACCORDANCE WITH ITS PROCEDURES
DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
ALL TENDERING HOLDERS COMPLETE THIS BOX:
<TABLE>
- --------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- --------------------------------------------------------------------------------------------------------------------
Name(s) and address(es) of Registered Holder(s) Old Notes Tendered
(Please fill in, if blank) (attach additional list if necessary)
- --------------------------------------------------------------------------------------------------------------------
Principal Amount of
Certificate Principal Amount Old Notes Tendered
Number(s)* of Old Notes* (if less than all)**
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Total Amount
Tendered
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by book-entry holders.
** Old Notes may be tendered in whole or in part in denominations of $1,000
and integral multiples thereof. All Old Notes held shall be deemed
tendered unless a lesser number is specified in this column.
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFE MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND
COMPLET THE FOLLOWING:
Name of Tendering Institution___________________________________________
DTC Account Number______________________________________________________
Transaction Code Number_________________________________________________
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY
IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name of Registered Holder(s)____________________________________________
Window Ticket Number (if any)___________________________________________
Date of Execution of Notice of Guaranteed Delivery______________________
Name of Institution which Guaranteed____________________________________
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution___________________________________________
DTC Account Number______________________________________________________
Transaction Code Number_________________________________________________
[ ] CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED OLD
NOTES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH
ABOVE.
3
<PAGE>
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS
OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A
"PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES
OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:___________________________________________________________________
Address:_______________________________________________________________
________________________________________________________________
4
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Insilco Corporation, a Delaware
corporation (the "Company"), $120,000,000 aggregate principal amount of the
Company's 12% Senior Subordinated Notes due 2007 (the "Old Notes") in exchange
for a like aggregate principal amount of the Company's 12% Senior Subordinated
Notes due 2007 (the "New Notes"), upon the terms and subject to the conditions
set forth in the Prospectus dated April _, 1999 (as the same may be amended or
supplemented from time to time, the "Prospectus"), receipt of which is
acknowledged, and in this Letter of Transmittal (which, together with the
Prospectus, constitute the "Exchange Offer"). The Exchange Offer has been
registered under the Securities Act of 1933, as amended (the "Securities
Act").
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old Notes tendered herewith in accordance with the terms and
conditions of the Exchange Offer (including, if the Exchange Offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of the
Company all right, title and interest in and to such Old Notes as are being
tendered herewith. The undersigned hereby irrevocably constitutes and appoints
the Exchange Agent as its agent and attorney-in-fact (with full knowledge that
the Exchange Agent is also acting as agent of the Company in connection with
the Exchange Offer) with respect to the tendered Old Notes, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), subject only to the right of withdrawal described
in the Prospectus, to (i) deliver Certificates for Old Notes to the Company
together with all accompanying evidences of transfer and authenticity to, or
upon the order of, the Company, upon receipt by the Exchange Agent, as the
undersigned's agent, of the New Notes to be issued in exchange for such Old
Notes, (ii) present Certificates for such Old Notes for transfer, and to
transfer the Old Notes on the books of the Company, and (iii) receive for the
account of the Company all benefits and otherwise exercise all rights of
beneficial ownership of such Old Notes, all in accordance with the terms and
conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE UNDERSIGNED HAS
FULL POWER AND AUTHORITY TO TENDER, EXCHANGE, SELL, ASSIGN AND TRANSFER THE
OLD NOTES TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR EXCHANGE,
THE COMPANY WILL ACQUIRE GOOD, MARKETABLE AND UNENCUMBERED TITLE THERETO, FREE
AND CLEAR OF ALL LIENS, RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE
OLD NOTES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE CLAIMS OR PROXIES.
THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE AND DELIVER ANY ADDITIONAL
DOCUMENTS DEEMED BY THE COMPANY OR THE EXCHANGE AGENT TO BE NECESSARY OR
DESIRABLE TO COMPLETE THE EXCHANGE, ASSIGNMENT AND TRANSFER OF THE OLD NOTES
TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY WITH ITS OBLIGATIONS UNDER
THE REGISTRATION RIGHTS AGREEMENT. THE UNDERSIGNED HAS READ AND AGREES TO ALL
OF THE TERMS OF THE EXCHANGE OFFER.
The name(s) and address(es) of the registered holder(s) of the Old Notes
tendered hereby should be printed above, if they are not already set forth
above, as they appear on the Certificates representing such Old Notes. The
Certificate number(s) and the Old Notes that the undersigned wishes to tender
should be indicated in the appropriate boxes above.
If any tendered Old Notes are not exchanged pursuant to the Exchange
Offer for any reason, or if Certificates are submitted for more Old Notes than
are tendered or accepted for exchange, Certificates for such unaccepted or
nonexchanged Old Notes will be returned (or, in the case of Old Notes tendered
by book-entry transfer, such Old Notes will be credited to an account
maintained at DTC), without expense to the tendering holder, promptly
following the expiration or termination of the Exchange Offer.
The undersigned understands that tenders of Old Notes pursuant to any one
of the procedures described in "The Exchange Offer--Procedures for Tendering
Old Notes" in the Prospectus and in the instructions hereto will, upon the
Company's acceptance for exchange of such tendered Old Notes, constitute a
binding agreement between the undersigned and the Company upon the terms and
subject to the conditions of the Exchange Offer. In all cases in which a
Participant elects to accept the Exchange Offer by transmitting an express
acknowledgment in accordance with the established ATOP procedures, such
Participant shall be bound by all of the terms and conditions of this Letter
of Transmittal. The undersigned recognizes that, under certain circumstances
set forth in the Prospectus, the Company may not be required to accept for
exchange any of the Old Notes tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New Notes be
issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Old Notes, that such New Notes be credited to the account
indicated above maintained at DTC. If applicable, substitute Certificates
representing Old Notes not exchanged or not accepted for exchange will be
issued to the undersigned or, in the case of a book-entry transfer of Old
Notes, will be credited to the account indicated above maintained at DTC.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please deliver New Notes to the undersigned at the address shown below the
undersigned's signature.
5
<PAGE>
BY TENDERING OLD NOTES AND EXECUTING, OR OTHERWISE BECOMING BOUND BY,
THIS LETTER OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND AGREES THAT
(I) THE UNDERSIGNED IS NOT AN "AFFILIATE" OF THE COMPANY, (II) ANY NEW NOTES
TO BE RECEIVED BY THE UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF
ITS BUSINESS AND (III) THE UNDERSIGNED HAS NO ARRANGEMENT OR UNDERSTANDING
WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION (WITHIN THE MEANING OF THE
SECURITIES ACT) OF SUCH NEW NOTES. BY TENDERING OLD NOTES PURSUANT TO THE
EXCHANGE OFFER AND EXECUTING, OR OTHERWISE BECOMING BOUND BY, THIS LETTER OF
TRANSMITTAL, A HOLDER OF OLD NOTES WHICH IS A BROKER-DEALER REPRESENTS AND
AGREES, CONSISTENT WITH CERTAIN INTERPRETIVE LETTERS ISSUED BY THE STAFF OF
THE DIVISION OF CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION
TO THIRD PARTIES, THAT (A) SUCH OLD NOTES HELD BY THE BROKER-DEALER ARE HELD
ONLY AS A NOMINEE, OR (B) SUCH OLD NOTES WERE ACQUIRED BY SUCH BROKER-DEALER
FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING
ACTIVITIES AND IT WILL DELIVER THE PROSPECTUS (AS AMENDED OR SUPPLEMENTED FROM
TIME TO TIME) MEETING THE REQUIREMENTS OF THE SECURITIES ACT IN CONNECTION
WITH ANY RESALE OF SUCH NEW NOTES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY
DELIVERING A PROSPECTUS, SUCH BROKER-DEALER WILL NOT BE DEEMED TO ADMIT THAT
IT IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE COMPANY HAS AGREED THAT, SUBJECT TO THE PROVISIONS OF THE
REGISTRATION RIGHTS AGREEMENT, THE PROSPECTUS, AS IT MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME, MAY BE USED BY A PARTICIPATING BROKER-DEALER
(AS DEFINED BELOW) IN CONNECTION WITH RESALES OF NEW NOTES RECEIVED IN
EXCHANGE FOR OLD NOTES, WHERE SUCH OLD NOTES WERE ACQUIRED BY SUCH
PARTICIPATING BROKER-DEALER FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING
ACTIVITIES OR OTHER TRADING ACTIVITIES, FOR A PERIOD ENDING 90 DAYS AFTER THE
EXPIRATION DATE (SUBJECT TO EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES
DESCRIBED IN THE PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH NEW NOTES HAVE BEEN
DISPOSED OF BY SUCH PARTICIPATING BROKER-DEALER. IN THAT REGARD, EACH BROKER
DEALER WHO ACQUIRED OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING
OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER"), BY TENDERING
SUCH OLD NOTES AND EXECUTING, OR OTHERWISE BECOMING BOUND BY, THIS LETTER OF
TRANSMITTAL, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE COMPANY OF THE
OCCURRENCE OF ANY EVENT OR THE DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT
CONTAINED OR INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY
MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE A MATERIAL
FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS CONTAINED OR INCORPORATED BY
REFERENCE THEREIN, IN LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY WERE MADE,
NOT MISLEADING OR OF THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER WILL SUSPEND
THE SALE OF NEW NOTES PURSUANT TO THE PROSPECTUS UNTIL THE COMPANY HAS AMENDED
OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH MISSTATEMENT OR OMISSION AND
HAS FURNISHED COPIES OF THE AMENDED OR SUPPLEMENTED PROSPECTUS TO THE
PARTICIPATING BROKER-DEALER OR THE COMPANY HAS GIVEN NOTICE THAT THE SALE OF
THE NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE. IF THE COMPANY GIVES SUCH
NOTICE TO SUSPEND THE SALE OF THE NEW NOTES, IT SHALL EXTEND THE 90-DAY PERIOD
REFERRED TO ABOVE DURING WHICH PARTICIPATING BROKER-DEALERS ARE ENTITLED TO
USE THE PROSPECTUS IN CONNECTION WITH THE RESALE OF NEW NOTES BY THE NUMBER OF
DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE OF THE GIVING OF SUCH
NOTICE TO AND INCLUDING THE DATE WHEN PARTICIPATING BROKER-DEALERS SHALL HAVE
RECEIVED COPIES OF THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT
RESALES OF THE NEW NOTES OR TO AND INCLUDING THE DATE ON WHICH THE COMPANY HAS
GIVEN NOTICE THAT THE SALE OF NEW NOTES MAY BE RESUMED, AS THE CASE MAY BE.
All authority herein conferred or agreed to be conferred in this Letter
of Transmittal shall survive the death or incapacity of the undersigned and
any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
6
<PAGE>
HOLDER(S) SIGN HERE
(See Instructions 2, 5 and 6)
(Note: Signature(s) Must be Guaranteed if Required by Instruction 2)
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old Notes hereby tendered or on a security position
listing, or by any person(s) authorized to become the registered holder(s) by
endorsements and documents transmitted herewith. If signature is by an
attorney-in-fact, executor, administrator, trustee, guardian, officer of a
corporation or another acting in a fiduciary or representative capacity,
please set forth the signer's full title. See Instruction 5.
______________________________________________________________________________
(Signature(s) of Holder(s))
Date___________________________________________________________________, 1998
Name(s)_______________________________________________________________________
______________________________________________________________________________
(Please Print)
Capacity:_____________________________________________________________________
(Include Full Title)
Address_______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number________________________________________________
______________________________________________________________________________
(Tax Identification or Social Security Number(s))
GUARANTEE OF SIGNATURE(S)
(See Instructions 2 and 5)
Authorized Signature__________________________________________________________
Name__________________________________________________________________________
______________________________________________________________________________
(Please Print)
Date____________________________________________________________________, 1998
Capacity or Title_____________________________________________________________
Name of Firm__________________________________________________________________
Address_______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number________________________________________________
7
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5 and 6) (See Instructions 1, 5 and 6)
To be completed ONLY if the New To be completed ONLY if New
Notes are to be be issued in the sent to someone other than the
name of someone other than the registered holder of the Old Notes
registered holder of the Old Notes whose name(s) appear(s) above, or
whose name(s) appear(s) above. to such registered holder(s) at an
address other than that shown
above.
Issue New Notes to: Mail New Notes To:
Name_______________________________ Name___________________________________
(Please Print) (Please Print)
___________________________________ _______________________________________
Address____________________________ Address________________________________
___________________________________ _______________________________________
___________________________________ _______________________________________
(Include Zip Code) (Include Zip Code)
___________________________________ _______________________________________
(Taxpayer Identification or Taxpayer Identification or
Social Security Number) Social Security Number)
8
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer
1. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed if Certificates are
to be forwarded herewith. If tenders are to be made pursuant to the procedures
for tender by book-entry transfer set forth in "The Exchange Offer--Book-
Entry Transfer" in the Prospectus and in accordance with ATOP established by
DTC, a tendering holder will become bound by the terms and conditions hereof
in accordance with the procedures established under ATOP. Certificates, or
timely confirmation of a book-entry transfer of such Old Notes into the
Exchange Agent's account at DTC, as well as this Letter of Transmittal (or
facsimile thereof), if required, properly completed and duly executed, with
any required signature guarantees, and any other documents required by this
Letter of Transmittal, must be received by the Exchange Agent at one of its
addresses set forth herein on or prior to the Expiration Date. Old Notes may
be tendered in whole or in part in the principal amount of $1,000 and integral
multiples of $1,000.
Holders who wish to tender their Old Notes and (i) whose Old Notes are
not immediately available or (ii) who cannot deliver their Old Notes, this
Letter of Transmittal and all other required documents to the Exchange Agent
on or prior to the Expiration Date or (iii) who cannot complete the procedures
for delivery by book-entry transfer on a timely basis, may tender their Old
Notes by properly completing and duly executing a Notice of Guaranteed
Delivery pursuant to the guaranteed delivery procedures set forth in "The
Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus. Pursuant to
such procedures: (i) such tender must be made by or through an Eligible
Institution (as defined below); (ii) a properly completed and duly executed
Letter of Transmittal (or facsimile) thereof and Notice of Guaranteed
Delivery, substantially in the form made available by the Company, must be
received by the Exchange Agent on or prior to the Expiration Date; and (iii)
the Certificates (or a book-entry confirmation (as defined in the Prospectus))
representing all tendered Old Notes, in proper form for transfer, together
with any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent within five New York Stock Exchange trading
days after the date of execution of such Notice of Guaranteed Delivery, all as
provided in "The Exchange Offer--Guaranteed Delivery Procedures" in the
Prospectus.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, telex, facsimile or mail to the Exchange Agent, and must include
a guarantee by an Eligible Institution in the form set forth in such Notice.
For Old Notes to be properly tendered pursuant to the guaranteed delivery
procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on
or prior to the Expiration Date. As used herein and in the Prospectus,
"Eligible Institution" means a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States.
THE METHOD OF DELIVERY OF OLD NOTES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDER.
IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, BE USED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY. NO LETTERS OF TRANSMITTAL OR
OLD NOTES SHOULD BE SENT TO THE COMPANY.
The Company will not accept any alternative, conditional or contingent
tenders. Each tendering holder, by execution of a Letter of Transmittal (or
facsimile thereof), or any Agent's Message in lieu thereof, waives any right
to receive any notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required if:
(i) this Letter of Transmittal is signed by the registered holder (which
term, for purposes of this document, shall include any participant in DTC
whose name appears on a security position listing as the owner of the Old
Notes) of Old Notes tendered herewith, unless such holder(s) has
completed either the box entitled "Special Issuance Instructions" or the
box entitled "Special Delivery Instructions" above, or
9
<PAGE>
(ii) such Old Notes are tendered for the account of a firm that is an
Eligible Institution.
In all other cases, an Eligible Institution must guarantee the
signature(s) on this Letter of Transmittal. See Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box captioned
"Description of Old Notes" is inadequate, the Certificate number(s) and/or the
principal amount of Old Notes and any other required information should be
listed on a separate signed schedule which is attached to this Letter of
Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Old Notes will be
accepted only in the principal amount of $1,000 and integral multiples
thereof. If less than all the Old Notes evidenced by any Certificate submitted
are to be tendered, fill in the principal amount of Old Notes which are to be
tendered in the box entitled "Principal Amount of Old Notes Tendered (if less
than all)." In such case, new Certificate(s) for the remainder of the Old
Notes that were evidenced by your old Certificate(s) will only be sent to the
holder of the Old Note, promptly after the Expiration Date. All Old Notes
represented by Certificates delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old Notes may be
withdrawn at any time on or prior to the Expiration Date. In order for a
withdrawal to be effective on or prior to that time, a written notice of
withdrawal must be timely received by the Exchange Agent at one of its
addresses set forth above or in the Prospectus on or prior to the Expiration
Date. Any such notice of withdrawal must specify the name of the person who
tendered the Old Notes to be withdrawn, identify the Old Notes to be withdrawn
(including the principal amount of such Old Notes) and (where Certificates for
Old Notes have been transmitted) specify the name in which such Old Notes are
registered, if different from that of the withdrawing holder. If Certificates
for the Old Notes have been delivered or otherwise identified to the Exchange
Agent, then prior to the release of such Certificates, the withdrawing holder
must submit the serial numbers of the particular certificates for the Old
Notes to be withdrawn and a signed notice of withdrawal with signatures
guaranteed by an Eligible Institution, unless such holder is an Eligible
Institution. If Old Notes have been tendered pursuant to the procedures for
book-entry transfer set forth in the Prospectus under "The Exchange
Offer--Book-Entry Transfer," any notice of withdrawal must specify the name
and number of the account at DTC to be credited with the withdrawal of Old
Notes and otherwise comply with the procedures of such facility. Old Notes
properly withdrawn will not be deemed validly tendered for purposes of the
Exchange Offer, but may be retendered at any time on or prior to the
Expiration Date by following one of the procedures described in the Prospectus
under "The Exchange Offer--Procedures for Tendering Old Notes."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Company, whose
determination shall be final and binding on all parties. Any Old Notes which
have been tendered for exchange but which are not exchanged for any reason
will be returned to the holder thereof without cost to such holder (or, in the
case of Old Notes tendered by book-entry transfer into the Exchange Agent's
account at DTC pursuant to the book-entry procedures described in the
Prospectus under "The Exchange Offer--Book-Entry Transfer" such Old Notes will
be credited to an account maintained with DTC for the Old Notes) as soon as
practicable after withdrawal, rejection of tender or termination of the
Exchange Offer.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder(s) of the Old
Notes tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Certificate(s) without alteration,
enlargement or any change whatsoever.
If any of the Old Notes tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Old Notes are registered in different names on several
Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Certificates.
10
<PAGE>
If this Letter of Transmittal or any Certificates or powers of attorney
are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing and,
unless waived by the Company, proper evidence satisfactory to the Company of
such persons' authority to so act must be submitted.
When this Letter of Transmittal is signed by the registered holder(s) of
the Old Notes listed and transmitted hereby, no endorsement(s) of
Certificate(s) or written instrument or instruments of transfer or exchange
are required unless New Notes are to be issued in the name of a person other
than the registered holder(s). Signature(s) on such Certificate(s) or written
instrument or instruments of transfer or exchange must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Old Notes listed, the Certificates must be
endorsed or accompanied by a written instrument or instruments of transfer or
exchange, in satisfactory form as determined by the Company in its sole
discretion and executed by the registered holder(s), in either case signed
exactly as the name or names of the registered holder(s) appear(s) on the
Certificates. Signatures on such Certificates or written instrument or
instruments of transfer or exchange must be guaranteed by an Eligible
Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If New Notes are to be
issued in the name of a person other than the signer of this Letter of
Transmittal, or if New Notes are to be sent to someone other than the signer
of this Letter of Transmittal or to an address other than that shown above,
the appropriate boxes on this Letter of Transmittal should be completed.
Certificates for Old Notes not exchanged will be returned by mail or, if
tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC. See Instruction 4.
7. IRREGULARITIES. The Company will determine, in its sole discretion,
all questions as to the form, validity, eligibility (including time of
receipt) and acceptance for exchange of any tender of Old Notes, which
determination shall be final and binding. The Company reserves the absolute
right to reject any and all tenders of any particular Old Notes not properly
tendered or to not accept any particular Old Notes which acceptance might, in
the judgment of the Company or its counsel, be unlawful. The Company also
reserves the absolute right, in its sole discretion, to waive any defects or
irregularities or conditions of the Exchange Offer as to any particular Old
Notes either before or after the Expiration Date (including the right to waive
the ineligibility of any holder who seeks to tender Old Notes in the Exchange
Offer). The interpretation of the terms and conditions of the Exchange Offer
as to any particular Old Notes either before or after the Expiration Date
(including the Letter of Transmittal and the instructions thereto) by the
Company shall be final and binding on all parties. Unless waived, any defects
or irregularities in connection with the tender of Old Notes for exchange must
be cured within such reasonable period of time as the Company shall determine.
Neither the Company, the Exchange Agent nor any other person shall be under
any duty to give notification of any defect or irregularity with respect to
any tender of Old Notes for exchange, nor shall any of them incur any
liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Exchange Agent at its
address and telephone number set forth on the front of this Letter of
Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed
Delivery and the Letter of Transmittal may be obtained from the Exchange Agent
or from your broker, dealer, commercial bank, trust company or other nominee.
9. LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s)
representing Old Notes have been lost, destroyed or stolen, the holder should
promptly notify the Exchange Agent. The holder will then be instructed as to
the steps that must be taken in order to replace the Certificate(s). This
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost, destroyed or stolen Certificate(s) have been
followed.
10. SECURITY TRANSFER TAXES. Holders who tender their Old Notes for
exchange will not be obligated to pay any transfer taxes in connection
therewith, except that holders who instruct the Company to register New Notes
in the name of or request that Old Notes not tendered or not accepted in the
Exchange Offer to be returned to, a person other than the registered tendering
holder will be responsible for the payment of any applicable transfer tax
thereon.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF),
11
<PAGE>
OR AN AGENT'S MESSAGE IN LIEU THEREOF, AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT
ON OR PRIOR TO THE EXPIRATION DATE.
12
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
For Tender Of
12% Series A Senior Subordinated Notes due 2007
of
INSILCO Corporation
This Notice of Guaranteed Delivery or one substantially equivalent
hereto must be used to accept the Exchange Offer (as defined below) if (i)
certificates for the Company's (as defined below) 12% Series A Senior
Subordinated Notes due 2007 (the "Old Notes") are not immediately available,
(ii) Old Notes and any other documents required by the Letter of Transmittal
cannot be delivered to Star Bank, N.A. (the "Exchange Agent") on or prior to
the Expiration Date (as defined in the Prospectus referred to below) or (iii)
the procedures for book-entry transfer cannot be completed on a timely basis.
This Notice of Guaranteed Delivery may be delivered by hand or sent by
facsimile transmission, overnight courier, telex, telegram or mail to the
Exchange Agent. See "The Exchange Offer - Guaranteed Delivery Procedures" in
the Prospectus dated April _, 1999 (which, together with the related Letter of
Transmittal, constitutes the "Exchange Offer") of Insilco Corporation, a
Delaware corporation (the "Company").
The Exchange Agent for the Exchange Offer is:
STAR BANK, N.A.
<TABLE>
<S> <C> <C>
By Hand or Overnight Delivery: Facsimile Transmissions: By Registered Or Certified Mail:
(Eligible Institutions Only)
Star Bank, N.A. Star Bank, N.A.
425 Walnut Street (513) 632-5511 425 Walnut Street
6th Floor 6th Floor
Cincinnati, Ohio 45201-1118 To Confirm by Telephone Cincinnati, Ohio 45201-1118
Attention: William Sicking or for Information Call: Attention: William Sicking
(513) 632-4278
</TABLE>
<PAGE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY
VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED ON THE LETTER
OF TRANSMITTAL.
2
<PAGE>
THE FOLLOWING GUARANTEE MUST BE COMPLETED
GUARANTEE OF DELIVERY
(Not to be used for Signature Guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States, hereby guarantees to deliver to the
Exchange Agent, at one of its addresses set forth above, either the
certificates for all physically tendered Old Notes, in proper form for
transfer, or confirmation of the book-entry transfer of such Old Notes to the
Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to
the procedures for book-entry transfer set forth in the Prospectus, in either
case together with any other documents required by the Letter of Transmittal,
within five New York Stock Exchange trading days after the date of execution
of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the Old Notes
tendered hereby to the Exchange Agent within the time period set forth above
and that failure to do so could result in a financial loss to the undersigned.
Name of Firm:__________________________ ___________________________________
(Authorized Signature)
Address:_______________________________ Title:_____________________________
_______________________________________ Name:______________________________
(Zip Code) (Please type or print)
Area Code and Telephone Number: Date:______________________________
_______________________________________
NOTE: DO NOT SEND OLD NOTES WITH THIS NOTICE OF GUARANTEED DELIVERY. ACTUAL
SURRENDER OF OLD NOTES MUST BE MADE PURSUANT TO, AND BE ACCOMPANIED BY, A
PROPERLY COMPLETED AND FULLY EXECUTED LETTER OF TRANSMITTAL AND ANY OTHER
REQUIRED DOCUMENTS.
3
EXHIBIT 99.3
Offer to Exchange
12% Series B Senior Subordinated Notes due 2007
(Registered Under The Securities Act of 1933)
for Any and All Outstanding
12% Series A Senior Subordinated Notes due 2007
of
INSILCO CORPORATION
To Our Clients:
We are enclosing herewith a Prospectus, dated April _, 1999, of
Insilco Corporation., a Delaware corporation (the "Company"), and a related
Letter of Transmittal (which together constitute the "Exchange Offer")
relating to the offer by the Company to exchange its 12% Series B Senior
Subordinated Notes due 2007 (the "New Notes"), pursuant to an offering
registered under the Securities Act of 1933, as amended (the "Securities
Act"), for a like principal amount of its issued and outstanding 12% Series A
Senior Subordinated Notes due 2007 (the "Old Notes") upon the terms and
subject to the conditions set forth in the Exchange Offer.
Please note that the Exchange Offer will expire at _:__ p.m., New
York City time, on ________ __, 1999, unless extended.
The Exchange Offer is not conditioned upon any minimum number of Old
Notes being tendered.
We are the holder of record and/or participant in the book-entry
transfer facility of Old Notes held by us for your account. A tender of such
Old Notes can be made only by us as the record holder and/or participant in
the book-entry transfer facility and pursuant to your instructions. The Letter
of Transmittal is furnished to you for your information only and cannot be
used by you to tender Old Notes held by us for your account.
We request instructions as to whether you wish to tender any or all
of the Old Notes held by us for your account pursuant to the terms and
conditions of the Exchange Offer. We also request that you confirm that we may
on your behalf make the representations contained in the Letter of
Transmittal.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that (i) the holder is not an "affiliate" of the
Company, (ii) any New Notes to be received by the holder are being acquired in
the ordinary course of its business and (iii) the holder has no arrangement or
understanding
<PAGE>
with any person to participate in a distribution (within the meaning of the
Securities Act) of such New Notes. If the tendering holder is a broker-dealer
that will receive New Notes for its own account in exchange for Old Notes, we
will represent on behalf of such broker-dealer that the Old Notes to be
exchanged for the New Notes were acquired by it as a result of market-making
activities or other trading activities, and acknowledge on behalf of such
broker-dealer that it will deliver a prospectus meeting the requirements of
the Securities Act in connection with any resale of such New Notes. By
acknowledging that it will deliver and by delivering a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Notes, such broker-dealer is not deemed to admit that it is an "underwriter"
within the meaning of the Securities Act.
Very truly yours,
2
EXHIBIT 99.4
Offer to Exchange
12% Series B Senior Subordinated Notes due 2007
(Registered under the Securities Act of 1933)
for Any and All Outstanding
12% Series A Senior Subordinated Notes due 2007
of
INSILCO CORPORATION
To Registered Holders and The Depository
Trust Company Participants:
We are enclosing herewith the material listed below relating to the
offer by Insilco Corporation, a Delaware corporation (the "Company"), to
exchange its 12% Series B Senior Subordinated Notes due 2007 (the "New
Notes"), pursuant to an offering registered under the Securities Act of 1933,
as amended (the "Securities Act"), for a like principal amount of its issued
and outstanding 12% Series A Senior Subordinated Notes due 2007 (the "Old
Notes") upon the terms and subject to the conditions set forth in the
Company's Prospectus, dated April _, 1999, and the related Letter of
Transmittal (which together constitute the "Exchange Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated April _, 1999;
2. Letter of Transmittal;
3. Notice of Guaranteed Delivery;
4. Instruction to Registered Holder and/or Book-Entry Transfer
Participant from Owner; and
5. Letter which may be sent to your clients for whose account you
hold Old Notes in your name or in the name of your nominee, to
accompany the instruction form referred to above, for obtaining
such client's instruction with regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the
Exchange Offer will expire at __:__ p.m., New York City time, on __________
__, 1999 unless extended.
(
<PAGE>
The Exchange Offer is not conditioned upon any minimum number of Old
Notes being tendered.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that (i) the holder is not an "affiliate" of the
Company, (ii) any New Notes to be received by it are being acquired in the
ordinary course of its business and (iii) the holder has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such New Notes. If the tendering holder is a
broker-dealer that will receive New Notes for its own account in exchange for
Old Notes, you will represent on behalf of such broker-dealer that the Old
Notes to be exchanged for the New Notes were acquired by it as a result of
market-making activities or other trading activities, and acknowledge on
behalf of such broker-dealer that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Notes. By acknowledging that it will deliver and by delivering a prospectus
meeting the requirements of the Securities Act in connection with any resale
of such New Notes, such broker-dealer is not deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
The enclosed Instruction to Registered Holder and/or Book-Entry
Transfer Participant from Owner contains an authorization by the beneficial
owners of the Old Notes for you to make the foregoing representations.
The Company will not pay any fee or commission to any broker or
dealer or to any other persons (other than the Exchange Agent) in connection
with the solicitation of tenders of Old Notes pursuant to the Exchange Offer.
The Company will pay or cause to be paid any transfer taxes payable on the
transfer of Old Notes to it, except as otherwise provided in Instruction 10 of
the enclosed Letter of Transmittal.
Additional copies of the enclosed material may be obtained from the
undersigned.
Very truly yours,
STAR BANK, N.A.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE
AGENT OF INSILCO CORPORATION OR STAR BANK, N.A. OR AUTHORIZE YOU TO USE ANY
DOCUMENT OR MAKE ANY STATEMENT ON THEIR BEHALF IN CONNECTION WITH THE EXCHANGE
OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED
THEREIN.
2
EXHIBIT 99.5
INSTRUCTION TO REGISTERED HOLDER AND/OR
BOOK-ENTRY TRANSFER FACILITY PARTICIPANT FROM OWNER
OF
INSILCO CORPORATION
12% Series A Senior Subordinated Notes due 2007
To Registered Holder and/or Participant of the Book-Entry Transfer
Facility:
The undersigned hereby acknowledges receipt of the Prospectus dated
April _, 1999 (the "Prospectus") of Insilco Corporation., a Delaware
corporation (the "Company"), and the accompanying Letter of Transmittal (the
"Letter of Transmittal"), that together constitute the Company's offer (the
"Exchange Offer"). Capitalized terms used but not defined herein have the
meaning as ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry
transfer facility participant, as to the action to be taken by you relating to
the Exchange Offer with respect to the Old Notes held by you for the account
of the undersigned.
The aggregate face amount of the Old Notes held by you for the
account of the undersigned is (fill in amount):
$___________ of the 12% Senior Subordinated Notes due 2007
With respect to the Exchange Offer, the undersigned hereby instructs
you (check appropriate box):
|_| To TENDER the following Old Notes held by you for the account of
the undersigned (insert principal amount of Old Notes to be tendered, if any):
$___________ of the 12% Senior Subordinated Notes due 2007
|_| NOT to TENDER any Old Notes held by you for the account of the
undersigned.
<PAGE>
If the undersigned instructs you to tender the Old Notes held by you
for the account of the undersigned, it is understood that you are authorized
to make, on behalf of the undersigned (and the undersigned, by its signature
below, hereby makes to you), the representations and warranties contained in
the Letter of Transmittal that are to be made with respect to the undersigned
as a beneficial owner, including but not limited to the representations, that
(i) the holder is not an "affiliate" of the Company, (ii) any New Notes to be
received by the holder are being acquired in the ordinary course of its
business and (iii) the holder has no arrangement or understanding with any
person to participate in a distribution (within the meaning of the Securities
Act) of such New Notes. If the undersigned is a broker-dealer that will
receive New Notes for its own account in exchange for Old Notes, it represents
that such Old Notes were acquired as a result of market-making activities or
other trading activities, and it acknowledges that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with
any resale of such New Notes. By acknowledging that it will deliver and by
delivering a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Notes, such broker-dealer is not deemed
to admit that it is an "underwriter" within the meaning of the Securities Act
of 1933, as amended.
2
<PAGE>
SIGN HERE
Name of beneficial owner(s):___________________________________________________
Signature(s):__________________________________________________________________
Name(s) (please print):________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________________
Telephone Number:______________________________________________________________
Taxpayer Identification or Social Security Number:_____________________________
_______________________________________________________________________________
Date:__________________________________________________________________________
3
