EXHIBIT 4
AGREEMENT AND PLAN OF MERGER
dated as of
March 24, 1998
among
INSILCO CORPORATION,
INR HOLDING CO.
and
SILKWORM ACQUISITION CORPORATION
TABLE OF CONTENTS
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Page
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ARTICLE 1
The Merger
Section 1.01. The Reorganization Merger................................... 1
Section 1.02. The Merger.................................................. 3
Section 1.03. Surrender and Payment....................................... 5
Section 1.04. Dissenting Shares........................................... 7
Section 1.05. Stock Options............................................... 7
Section 1.06. Fractional Shares........................................... 8
ARTICLE 2
The Surviving Corporation
Section 2.01. Certificate of Incorporation................................ 8
Section 2.02. Bylaws...................................................... 9
Section 2.03. Directors and Officers...................................... 9
ARTICLE 3
Representations and Warranties of the Company
Section 3.01. Corporate Existence and Power............................... 9
Section 3.02. Corporate Authorization..................................... 9
Section 3.03. Governmental Authorization.................................. 10
Section 3.04. Non-Contravention........................................... 10
Section 3.05. Capitalization.............................................. 11
Section 3.06. Subsidiaries................................................ 11
Section 3.07. SEC Filings................................................. 12
Section 3.08. Financial Statements........................................ 13
Section 3.09. Disclosure Documents........................................ 13
Section 3.10. Absence of Certain Changes.................................. 14
Section 3.11. No Undisclosed Material Liabilities......................... 15
Section 3.12. Litigation.................................................. 15
Section 3.13. Taxes....................................................... 15
Section 3.14. ERISA....................................................... 16
Section 3.15. Labor Matters............................................... 19
Section 3.16. Compliance with Laws and Court Orders....................... 20
Section 3.17. Licenses and Permits........................................ 20
Section 3.18. Intellectual Property....................................... 20
Section 3.19. Finders' Fees............................................... 20
Section 3.20. Required Votes.............................................. 21
Section 3.21. Environmental Matters....................................... 21
Section 3.22. Disclaimer.................................................. 23
ARTICLE 4
Representations and Warranties of MergerSub
Section 4.01. Corporate Existence and Power............................... 23
Section 4.02. Corporate Authorization..................................... 23
Section 4.03. Governmental Authorization.................................. 23
Section 4.04. Non-Contravention........................................... 24
Section 4.05. Disclosure Documents........................................ 24
Section 4.06. Finders' Fees............................................... 24
Section 4.07. Financing................................................... 25
Section 4.08. Capitalization.............................................. 25
ARTICLE 5
Covenants of the Company
Section 5.01. Conduct of the Company...................................... 26
Section 5.02. Stockholder Meeting; Proxy Material......................... 28
Section 5.03. Access to Information....................................... 29
Section 5.04. Other Offers................................................ 29
Section 5.05. Resignation of Directors.................................... 32
Section 5.06. Solvency Opinion............................................ 32
Section 5.07. Transfers by Affiliates..................................... 32
ARTICLE 6
Covenants of MergerSub
Section 6.01. Voting of Shares............................................ 33
Section 6.02. Director and Officer Liability.............................. 33
Section 6.03. Employee Plans and Benefit Arrangements..................... 34
Section 6.04. Financing................................................... 35
Section 6.05. NASDAQ Listing.............................................. 35
ARTICLE 7
Covenants of MergerSub and the Company
Section 7.01. Reasonable Best Efforts..................................... 36
Section 7.02. Certain Filings............................................. 36
Section 7.03. Public Announcements........................................ 37
Section 7.04. Further Assurances.......................................... 37
Section 7.05. Reserved Shares.............................................. 38
Section 7.06. Notices of Certain Events................................... 38
ARTICLE 8
Conditions to the Merger
Section 8.01. Conditions to the Obligations of Each Party................. 39
Section 8.02. Conditions to the Obligations of MergerSub.................. 39
Section 8.03. Conditions to the Obligations of the Company and
ExistingSub................................................. 41
ARTICLE 9
Termination
Section 9.01. Termination................................................. 41
Section 9.02. Effect of Termination....................................... 43
ARTICLE 10
Miscellaneous
Section 10.01. Notices.................................................... 43
Section 10.02. Survival of Representations and Warranties................. 44
Section 10.03. Amendments; No Waivers..................................... 44
Section 10.04. Expenses................................................... 45
Section 10.05. Successors and Assigns..................................... 45
Section 10.06. Governing Law.............................................. 45
Section 10.07. Counterparts; Effectiveness................................ 45
Section 10.08. Third Party Beneficiaries.................................. 45
Section 10.09. Entire Agreement........................................... 45
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of March 24, 1998 among
Insilco Corporation, a Delaware corporation ("Insilco" or the "Company"), INR
Holding Co., a Delaware corporation ("ExistingSub"), and Silkworm Acquisition
Corporation, a Delaware corporation ("MergerSub").
W I T N E S S E T H:
WHEREAS, as of the date of execution of this Agreement, all of
the outstanding capital stock of, or other ownership interest in, MergerSub is
owned, in the aggregate, by DLJ Merchant Banking Partners II, L.P., and
certain of its affiliates;
WHEREAS, MergerSub is unwilling to enter into this Agreement
unless, contemporaneously with the execution and delivery of this Agreement,
Water Street Corporate Recovery Fund I, L.P., holder of 1,783,878 shares of
common stock of the Company, enters into a Voting Agreement (the "Voting
Agreement") providing for certain actions relating to such shares;
WHEREAS, the parties hereto desire to make certain
representations, warranties, covenants and agreements in connection with the
Mergers (as defined in Section 1.02) and also to prescribe certain conditions
to the Mergers; and
WHEREAS, it is intended that the Merger be recorded as a
recapitalization for financial reporting purposes.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE 1
The Merger
Section 1.01. The Reorganization Merger. (a) Prior to the Effective Time (as
defined in Section 1.02), Insilco shall cause (i) ExistingSub to form a
wholly-owned subsidiary ("ReorgSub") and (ii) ReorgSub to merge with and into
Insilco in the manner set forth in this Section 1.01 (the "Reorganization
Merger"), whereupon the separate existence of ReorgSub shall cease, and Insilco
shall be the surviving corporation, possessing all the rights, privileges,
powers and franchises and be subject to all of the restrictions, disabilities
and duties of Insilco and ReorgSub, all as provided under the General
Corporation Law of the State of Delaware ("Delaware Law"). The parties hereto
contemplate that the Reorganization Merger will precede the Merger (as defined
in Section 1.02), but that each will occur on the same date.
(b) The Reorganization Merger shall be effected pursuant to an
agreement and plan of merger (the "Holding Company Merger Agreement") in
accordance with Delaware Law and in a manner that complies with Section 251(a)
of Delaware Law. The certificate of incorporation of Insilco shall be the
certificate of incorporation of the corporation surviving the Reorganization
Merger.
(c) Insilco and ReorgSub will file the Holding Company Merger
Agreement (or a certificate of merger in lieu thereof) with the Secretary of
State of the State of Delaware and make all other filings or recordings
required by Delaware Law in connection with the Reorganization Merger which
shall become effective at such time (the "Reorganization Effective Time") as
the Holding Company Merger Agreement (or a certificate of merger in lieu
thereof) is duly filed with the Secretary of State of the State of Delaware or
at such later time as is specified therein, but in any event prior to the
Effective Time.
(d) At the Reorganization Effective Time:
(i) (A) each share of common stock of ReorgSub held by
ReorgSub as treasury stock immediately prior to the Reorganization
Effective Time shall be canceled, and no payment shall be made with
respect thereto; and (B) each share of common stock of ReorgSub
outstanding immediately prior to the Reorganization Effective Time
shall be converted into and become one share of common stock of the
corporation surviving the Reorganization Merger, with the same
rights, powers and privileges as the shares so converted;
(ii) (A) each share of common stock, par value $0.001
per share, of Insilco (the "Shares") held by Insilco as treasury
stock (including the Reserved Shares (as defined in Section 3.05)) or
owned by ReorgSub immediately prior to the Reorganization Effective
Time shall be canceled, and no payment shall be made with respect
thereto, and (B) each outstanding option (whether vested or
unvested) to acquire Shares granted to employees and directors will
be treated as set forth in Section 1.05(a); and
(iii) Except as otherwise provided in Section 1.04 with
respect to Shares as to which appraisal rights are exercised, each
Share outstanding immediately prior to the Reorganization Effective
Time shall be converted into the following (the "Reorganization
Merger Consideration"):
(A) one share of common stock, par value $0.001
per share, of ExistingSub (the "ExistingSub Shares") with
the same rights, powers and privileges as the Shares so
converted; and
(B) the right to receive in cash an amount
equal to $0.01.
(e) Except for those stockholders who have exercised appraisal
rights with respect to their Shares, the stockholders of record of Insilco
immediately prior to the Reorganization Effective Time shall be the
stockholders of record of ExistingSub immediately after the Reorganization
Effective Time without further action by such stockholders or ExistingSub.
After the Reorganization Effective Time, the certificates (the "Certificates")
representing the Shares will continue to represent the ExistingSub Shares.
(f) For the avoidance of doubt, after the Reorganization Merger,
"Insilco" or the "Company" shall mean the corporation surviving the
Reorganization Merger.
Section 1.02. The Merger. (a) Prior to the Reorganization
Effective Time, the Company, acting as sole stockholder of ExistingSub, shall
pursuant to Section 228 of the Delaware Law, act by written consent to approve
this Agreement and the Merger and ExistingSub shall, no more than 20 days prior
to the Reorganization Effective Time, give notice to the Company, as its sole
stockholder, of the Merger, as required by Section 262(d) of Delaware Law.
(b) At the Effective Time, MergerSub shall be merged (the "Merger"
and collectively with the Reorganization Merger, the "Mergers") with and into
ExistingSub in accordance with Delaware Law, and in accordance with the terms
and conditions hereof, whereupon the separate existence of MergerSub shall
cease, and ExistingSub shall be the surviving corporation, which will be named
"Insilco Holding Corporation" (the "Surviving Corporation").
(c) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, ExistingSub and
MergerSub will file a certificate of merger with the Secretary of State of the
State of Delaware and make all other filings or recordings required by
Delaware Law in connection with the Merger. The Merger shall become effective
at such time as the certificate of merger is duly filed with the Secretary of
State of the State of Delaware or at such later time as is specified in the
certificate of merger (the "Effective Time").
(d) The Company hereby represents that its Board of Directors (the
"Board of Directors"), at a meeting duly called and held and acting on the
unanimous recommendation of the Board of Directors has (i) unanimously
determined that this Agreement and the transactions contemplated hereby,
including the Mergers, are fair to and in the best interest of the Company's
stockholders, (ii) unanimously approved this Agreement and the Voting
Agreement and the transactions contemplated hereby, including the Mergers,
which approval satisfies in full the requirements of Section 203(a)(1) of
Delaware Law so as to make Section 203 of Delaware Law inapplicable to the
Mergers, and (iii) unanimously resolved to recommend adoption of this
Agreement and the Mergers to its stockholders. The Company further represents
that Lazard Freres & Co. LLC has delivered to the Board of Directors its oral
opinion (to be followed by its written opinion to the same effect) that the
Merger Consideration (as defined in Section 1.03) taken as a whole is fair to
the holders of the Shares (other than MergerSub and its affiliates) from a
financial point of view. The Company has been advised that all of its
directors and executive officers intend to vote all of their Shares in favor
of adoption of this Agreement and the Mergers.
(e) At the Effective Time:
(i) each ExistingSub Share held by ExistingSub as
treasury stock or owned by any direct or indirect wholly owned
subsidiary of ExistingSub (excluding the Company) or owned by MergerSub
immediately prior to the Effective Time shall be canceled, and no
payment shall be made with respect thereto;
(ii) each share of common stock, par value $0.001 per
share, of MergerSub ("MergerSub Common Stock") outstanding immediately
prior to the Effective Time shall be converted into and become one share
of common stock, par value $0.001 per share, of the Surviving
Corporation ("Surviving Corporation Shares") with the same rights,
powers and privileges as the MergerSub Common Stock so converted;
(iii) each outstanding warrant to purchase MergerSub
Common Stock ("MergerSub Warrants") shall be automatically amended to
constitute a warrant to acquire one Surviving Corporation Share on the
same terms and conditions as the warrants so converted; and
(iv) each ExistingSub Share outstanding immediately
prior to the Effective Time shall be converted into the following (the
"ExistingSub Merger Consideration"):
(A) the right to retain 0.03419 of a Surviving
Corporation Share, with the same rights, powers and privileges
as the ExistingSub Share so converted; and
(B) the right to receive in cash an amount equal
to $42.97.
Section 1.03. Surrender and Payment. (a) Prior to the mailing
of the Company Proxy Statement (as defined in Section 3.09), MergerSub shall
appoint an agent (the "Exchange Agent") for the purpose of exchanging the
Certificates for the cash portion of the Reorganization Merger Consideration
and the ExistingSub Merger Consideration (the cash portion of the
Reorganization Merger Consideration together with the ExistingSub Merger
Consideration shall be referred to herein as the "Merger Consideration"). The
Surviving Corporation will make available to the Exchange Agent, as needed,
the Merger Consideration to be paid in respect of the Shares and the
ExistingSub Shares. Promptly after the Effective Time, the Surviving
Corporation will send, or will cause the Exchange Agent to send, to each
holder of ExistingSub Shares at the Effective Time, a letter of transmittal for
use in such exchange (which shall specify that the delivery shall be effected,
and risk of loss and title shall pass, only upon proper delivery of the
Certificates to the Exchange Agent).
(b) Each holder of ExistingSub Shares at the Effective Time will,
upon surrender to the Exchange Agent of a Certificate or Certificates, together
with a properly completed letter of transmittal covering such ExistingSub
Shares, be entitled to receive the Merger Consideration payable in respect of
such ExistingSub Shares and in respect of the Shares which were converted into
such ExistingSub Shares. Payment of the cash portion of the Merger
Consideration shall, at the request of the holder of the relevant ExistingSub
Shares, be made by wire transfer of immediately available funds. Until so
surrendered, each such Certificate shall, after the Effective Time, represent
for all purposes only the right to receive such Merger Consideration and any
dividends payable pursuant to Section 1.03(g). No interest will be paid or will
accrue on any cash payable as Merger Consideration or any dividends payable
pursuant to Section 1.03(g).
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the ExistingSub Shares represented
by the Certificate or Certificates surrendered in exchange therefor, it shall
be a condition to such payment that the Certificate or Certificates so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer and that the Person requesting such payment shall pay to the Exchange
Agent any transfer or other taxes required as a result of such payment to a
Person other than the registered holder of such ExistingSub Shares or
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable. For purposes of this Agreement, "person" or "Person"
means a(n) individual, corporation, limited liability company, partnership,
association, trust or other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of ExistingSub Shares. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration provided for, and in
accordance with the procedures set forth, in this Article 1.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.03(a) that remains unclaimed by the
holders of ExistingSub Shares six months after the Effective Time shall be
returned to the Surviving Corporation, upon demand, and any such holder who
has not exchanged his ExistingSub Shares for the Merger Consideration in
accordance with this Section 1.03 prior to that time shall thereafter look only
to the Surviving Corporation for payment of the Merger Consideration in
respect of his ExistingSub Shares. Notwithstanding the foregoing, the
Surviving Corporation shall not be liable to any holder of ExistingSub Shares
for any amount paid to a public official pursuant to applicable abandoned
property laws. Any amounts remaining unclaimed by holders of ExistingSub
Shares two years after the Effective Time (or such earlier date immediately
prior to such time as such amounts would otherwise escheat to or become
property of any governmental entity) shall, to the extent permitted by
applicable law, become the property of the Surviving Corporation free and
clear of any claims or interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 1.03(a) to pay for ExistingSub Shares that
were not issued pursuant to Section 1.01(d)(iii) as a result of the appraisal
rights exception thereto shall be returned to the Surviving Corporation, upon
demand, after the appraisal rights have been perfected in respect of the
related Shares pursuant to Section 1.04 and Delaware Law.
(g) No dividends or other distributions with respect to Surviving
Corporation Shares with a record date after the Effective Time shall be paid to
the holder of any unsurrendered Certificate until the surrender of such
Certificate in accordance with this Article 1. Subject to the effect of
applicable laws, following surrender of any such Certificate, there shall be
paid to the holder of the certificate representing whole Surviving Corporation
Shares issued in exchange therefor, without interest, (i) the amount of
dividends or other distributions with a record date after the Effective Time
but on or prior to such surrender and a payment date on or prior to such
surrender, paid with respect to such whole Surviving Corporation Shares, and
(ii) at the appropriate payment date, the amount of dividends or other
distributions with a record date after the Effective Time but on or prior to
such surrender and a payment date subsequent to such surrender payable with
respect to such whole Surviving Corporation Shares.
Section 1.04. Dissenting Shares. Shares which are issued and
outstanding immediately prior to the Reorganization Effective Time and which
are held by a holder who has not voted such Shares in favor of the Mergers,
who shall have delivered a written demand for appraisal of such Shares in the
manner provided by Delaware Law and who, as of the Reorganization Effective
Time, shall not have effectively withdrawn or lost such right to appraisal
("Dissenting Shares") shall not be converted into a right to receive the
Reorganization Merger Consideration (or, if after the Effective Time, the
Merger Consideration). The holders thereof shall be entitled only to such
rights as are granted by Section 262 of Delaware Law. Each holder of
Dissenting Shares who becomes entitled to payment for such Dissenting Shares
pursuant to Section 262 of Delaware Law shall receive payment therefor from
the Surviving Corporation in accordance with Delaware Law; provided, however,
that (i) if any such holder of Dissenting Shares shall have failed to
establish his entitlement to appraisal rights as provided in Section 262 of
Delaware Law, (ii) if any such holder of Dissenting Shares shall have
effectively withdrawn his demand for appraisal of such Shares or lost his right
to appraisal and payment for his Shares under Section 262 of Delaware Law, or
(iii) if neither any holder of Dissenting Shares nor the Surviving Corporation
shall have filed a petition demanding a determination of the value of all
Dissenting Shares within the time provided in Section 262 of Delaware Law,
such holder shall forfeit the right to appraisal of such Dissenting Shares and
each such Dissenting Share shall be converted into a right to receive the
Reorganization Merger Consideration (or, if after the Effective Time, the
Merger Consideration) without interest thereon, from the Surviving Corporation
as provided in Section 1.03 hereof. The Company shall give MergerSub prompt
notice of any demands received by the Company for appraisal of Shares, and
MergerSub shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with
the prior written consent of MergerSub, make any payment with respect to, or
settle or offer to settle, any such demands.
Section 1.05. Stock Options. (a) Immediately prior to the
Reorganization Effective Time, each outstanding option (whether vested or
unvested) to acquire Shares granted to employees and directors (the "Options")
shall be canceled and, in lieu thereof, immediately prior to the
Reorganization Effective Time, the holders of such Options shall receive a
cash payment from the Company equal to the product of (i) the total number of
Shares previously subject to such Options and (ii) the excess of $44.50 over
the exercise price per Share subject to such Options, subject to any required
withholding of taxes.
(b) Prior to the Reorganization Effective Time, the Company shall
(i) use its reasonable best efforts to obtain any consents from holders of
options to purchase Shares granted under the Company's stock option or
compensation plans or arrangements and (ii) make any amendments to the terms
of such stock option or compensation plans or arrangements that are necessary
to give effect to the transactions contemplated by Sections 1.01 and 1.05(a).
Notwithstanding any other provision of this Section 1.05, payment may be
withheld in respect of any Option until any necessary or appropriate consents
are obtained.
Section 1.06. Fractional Shares. (a) No certificates or scrip
representing fractional Surviving Corporation Shares shall be issued upon the
surrender for exchange of Certificates, and such fractional share interests
will not entitle the owner thereof to vote or to any rights of a stockholder
of the Surviving Corporation; and
(b) Notwithstanding any other provision of this Agreement, each
beneficial owner of ExistingSub Shares exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction of a Surviving
Corporation Share (after taking into account all ExistingSub Shares delivered
by such beneficial owner) shall receive, in lieu thereof, a cash payment
(without interest) representing such same fraction of $44.49.
ARTICLE 2
The Surviving Corporation
Section 2.01. Certificate of Incorporation. The certificate of
incorporation of ExistingSub in effect immediately prior to the Effective Time
shall be amended in its entirety as of the Effective Time to read as set forth
in Exhibit A, and, as so amended, shall be the certificate of incorporation of
the Surviving Corporation until amended in accordance with applicable law.
Section 2.02. Bylaws. The bylaws of MergerSub in effect at the
Effective Time shall be the bylaws of the Surviving Corporation until amended
in accordance with applicable law.
Section 2.03. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified in
accordance with applicable law, (a) the directors of MergerSub at the Effective
Time shall be the directors of the Surviving Corporation, and (b) the officers
of the Company at the Effective Time shall be the officers of the Surviving
Corporation.
ARTICLE 3
Representations and Warranties of the Company
Except as set forth in the disclosure schedules annexed hereto
(the "Disclosure Schedule"), the Company represents and warrants to MergerSub
that:
Section 3.01. Corporate Existence and Power. The Company and
ExistingSub are corporations duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and have all corporate
powers required to carry on their businesses as now conducted. The Company
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect.
The Company has heretofore delivered to MergerSub true and complete copies of
the certificate of incorporation and bylaws of the Company and ExistingSub as
currently in effect. For purposes of this Agreement, "Material Adverse Effect"
means any material adverse effect on the financial condition, business,
assets, liabilities or results of operations of the Company and the
Subsidiaries (as defined in Section 3.06) taken as a whole, but excluding (i)
any liabilities or reserves that are reflected on, or reserved for in, the 1997
Financial Statements and (ii) any change resulting from general economic
conditions.
Section 3.02. Corporate Authorization. The execution, delivery
and performance by the Company and ExistingSub of this Agreement and the
consummation by the Company and ExistingSub of the transactions contemplated
hereby are within the Company's and ExistingSub's corporate powers and, except
for any required approval by the stockholders of the Company, ReorgSub and
ExistingSub by majority vote in connection with the consummation of the
Mergers, have been duly authorized by all necessary corporate and stockholder
action. This Agreement constitutes a valid and binding agreement of the
Company and ExistingSub.
Section 3.03. Governmental Authorization. The execution,
delivery and performance by the Company and ExistingSub of this Agreement and
the consummation of the Reorganization Merger by the Company and ExistingSub,
and the Merger by ExistingSub, require no action by or in respect of, or filing
with, any governmental body, agency, official or authority other than (a) the
filing of (i) a certificate of merger or the Holding Company Merger Agreement
in connection with the Reorganization Merger and (ii) a certificate of merger
in connection with the Merger; (b) compliance with any applicable requirements
of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976 and the rules and
regulations promulgated thereunder (the "HSR Act"); (c) compliance with any
applicable requirements of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder (the "Exchange Act"); (d)
compliance with the applicable requirements of the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder (the "Securities
Act"); (e) compliance with any applicable foreign or state securities or Blue
Sky laws; and (f) any actions or filings that if not taken or made would have
a Material Adverse Effect.
Section 3.04. Non-Contravention. The execution, delivery and
performance by the Company and ExistingSub of this Agreement and the
consummation by the Company and ExistingSub of the transactions contemplated
hereby do not and will not (a) contravene or conflict with the certificate of
incorporation or bylaws of the Company, ExistingSub or any Subsidiary, (b)
assuming compliance with the matters referred to in Section 3.03, contravene or
conflict with or constitute a violation of any provision of any law,
regulation, judgment, writ, injunction, order or decree of any court or
governmental authority binding upon or applicable to the Company, ExistingSub
or any Subsidiary or any of their properties or assets, (c) constitute a
default under or give rise to a right of termination, cancellation or
acceleration of any right or obligation of the Company, ExistingSub or any
Subsidiary or to a loss of any benefit to which the Company, ExistingSub or
any Subsidiary is entitled under any provision of any agreement, contract or
other instrument binding upon the Company, ExistingSub or any Subsidiary or
any license, franchise, Permit (as defined in Section 3.17) or other similar
authorization held by the Company, ExistingSub or any Subsidiary, or (d)
result in the creation or imposition of any Lien on any asset of the Company,
ExistingSub or any Subsidiary, except, in the case of clauses (b), (c) and (d),
for any such violation, failure to obtain any such consent or other action,
default, right, loss or Lien that would not, individually or in the aggregate,
have a Material Adverse Effect. For purposes of this Agreement, "Lien" means,
with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset.
Section 3.05. Capitalization. The authorized capital stock of
the Company consists of 15,000,000 Shares of which as of March 16, 1998, there
were outstanding 4,016,711 Shares and Options to purchase an aggregate of not
more than 747,667 Shares (of which Options to purchase an aggregate of 420,266
Shares were exercisable) and 467,680 Shares were held in treasury (and no such
treasury stock is issuable or reserved for issuance, other than 66,682 Shares
(the "Reserved Shares") which are issuable or reserved for issuance pursuant
to the order discharging the Company from the protection of the United States
Federal Bankruptcy Court in 1993 (the "Bankruptcy Order")). All outstanding
Shares have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth in this Section 3.05 and except for changes
since March 16, 1998 resulting from the exercise of Options outstanding on
such date, there are outstanding (a) no shares of capital stock or other
voting securities of the Company, (b) no securities of the Company convertible
into or exchangeable for shares of capital stock or voting securities of the
Company, and (c) no options or other rights to acquire from the Company, and
no obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (a), (b) and (c) being
referred to collectively as the "Company Securities"). There are no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any Company Securities.
Section 3.06. Subsidiaries. (a) Each Significant Subsidiary
(as defined in Regulation S-X under the Exchange Act) is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has all corporate powers to carry on its
business as now conducted and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the character
of the property owned or leased by it or the nature of its activities makes
such qualification necessary, except where failure to be existing in good
standing or so qualified would not, individually or in the aggregate, have a
Material Adverse Effect. For purposes of this Agreement, "Subsidiary" 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 directly or
indirectly owned by the Company and/or one or more Subsidiaries.
(b) Except for Liens, limitations and restrictions arising under
the Amended and Restated Credit Agreement dated as of July 3, 1997 among the
Company and Insilco Deutschland Gmbh, as borrowers, various lenders and
issuing banks, The First National Bank of Chicago and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit
Partners L.P., as syndication agents and Citicorp USA, Inc. as administrative
agent, and any related security arrangements, all of the outstanding capital
stock of, or other ownership interests in, each Subsidiary, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such capital stock or other ownership
interests), except any that arise under applicable securities laws or that are
permitted by such credit agreement. All such capital stock has been duly
authorized and validly issued and is fully paid and non-assessable. There are
no outstanding (i) securities of the Company or any Subsidiary convertible
into or exchangeable for shares of capital stock or other voting securities or
ownership interests in any Subsidiary, and (ii) options or other rights to
acquire from the Company or any Subsidiary, and no other obligation of the
Company or any Subsidiary to issue, any capital stock, voting securities or
other ownership interests in, or any securities convertible into or
exchangeable for any capital stock, voting securities or ownership interests
in, any Subsidiary (the items in clauses (i) and (ii) being referred to
collectively as the "Subsidiary Securities"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or
otherwise acquire any outstanding Subsidiary Securities.
(c) ExistingSub was incorporated in Delaware prior to January 1,
1997. To the Company's knowledge, until the Reorganization Merger Effective
Time, neither the ExistingSub Shares nor the assets of ExistingSub has a
material value.
Section 3.07. SEC Filings. (a) The Company has delivered to
MergerSub (i) the Company's annual report on Form 10-K for the year ended
December 31, 1996 (the "Company 10-K"), (ii) its quarterly reports on Form
10-Q for the fiscal quarters ended March 31, 1997, June 30, 1997 and September
30, 1997 (together with the Company 10-K, the "Current SEC Reports"), (iii)
its proxy or information statements relating to meetings of, or actions taken
without a meeting by, the stockholders of the Company held since January 1,
1996, and (iv) all of its other reports, statements, schedules and
registration statements filed with the Securities and Exchange Commission (the
"SEC") since January 1, 1996 (collectively, the "SEC Documents").
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or supplemented,
if applicable, filed pursuant to the Securities Act as of the date such
statement or amendment became effective did not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
Section 3.08. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements
of the Company included in the Current SEC Reports, and the draft unaudited
consolidated financial statements of the Company previously delivered to
MergerSub (the "1997 Financial Statements"), fairly present, in all material
respects and in conformity with generally accepted accounting principles
applied on a consistent basis (except as may be indicated in the notes
thereto), the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and their consolidated
results of operations and changes in financial position for the periods then
ended (subject to normal year-end adjustments in the case of any unaudited
interim financial statements). The final audited consolidated financial
statements of the Company for the year ended December 31, 1997 will be
substantially identical to the 1997 Financial Statements, other than any
disclosures necessary to reflect the execution of this Agreement by the
Company and ExistingSub and any transactions contemplated hereby. For
purposes of this Agreement, "Balance Sheet" means the consolidated balance
sheet of the Company and its subsidiaries as of December 31, 1997 set forth in
the 1997 Financial Statements, and "Balance Sheet Date" means December 31,
1997.
Section 3.09. Disclosure Documents. (a) Each document
required to be filed by the Company with the SEC in connection with the
Mergers (but excluding the Financing) (the "Company Disclosure Documents"),
including, without limitation, any Report on Form 8-K to be filed by the
Company in respect of this Agreement, and the proxy statement of the Company
containing information required by Regulation 14A under the Exchange Act to be
filed with the SEC in connection with the Mergers (the "Company Proxy
Statement"), and any amendments or supplements thereto will, when filed,
comply as to form in all material respects with the applicable requirements of
the Exchange Act. The representations and warranties contained in this
Section 3.09(a) will not apply to statements or omissions in the Company
Disclosure Documents based upon information furnished to the Company by
MergerSub for use therein.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company, and at the
time such stockholders vote on adoption of this Agreement and the Mergers, the
Company Proxy Statement, as supplemented or amended, if applicable, will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading. At the time of
the filing of any Company Disclosure Document, other than the Company Proxy
Statement, and at the time of any required distribution thereof, such Company
Disclosure Document will not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties contained in this Section
3.09(b) will not apply to statements or omissions in the Company Disclosure
Documents based upon information furnished to the Company by MergerSub for use
therein.
(c) The information with respect to the Company or any Subsidiary
that the Company furnishes to MergerSub for use in any document filed by
MergerSub with the SEC will not, at the time of the filing thereof and at the
time of any required distribution thereof, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
Section 3.10. Absence of Certain Changes. Since the Balance
Sheet Date, the Company and the Subsidiaries have conducted their business in
the ordinary course consistent with past practice and there has not been:
(a) any event, occurrence or development of a state of
circumstances or facts which has had or reasonably would be expected to have a
Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the Company,
or any repurchase, redemption or other acquisition by the Company of any
outstanding shares of capital stock or other securities of, or other ownership
interests in, the Company;
(c) except as disclosed in the SEC Documents, any amendment of any
material term of any outstanding security of the Company or any Subsidiary;
(d) except as disclosed in the SEC Documents, any incurrence,
assumption or guarantee by the Company or any Subsidiary of any indebtedness
for borrowed money other than in the ordinary course of business consistent
with past practices;
(e) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or any
Subsidiary which, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect;
(f) (i) any material change in any method of accounting, or
accounting practice by the Company or any Subsidiary or (ii) any revaluation
in any material respect of any of the material assets of the Company or any
Subsidiary, except for any such change or revaluation required by reason of a
concurrent change in generally accepted accounting principles; or
(g) except as disclosed in the SEC Documents, any (i) grant of any
severance or termination pay to any director or executive officer of the
Company or any Subsidiary, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such existing
agreement) with any director or executive officer of the Company or any
Subsidiary, or (iii) increase in compensation, bonus or other benefits
(including severance or other termination benefits) payable to directors,
officers or employees of the Company or any Subsidiary, other than in the
ordinary course of business consistent with past practice.
Section 3.11. No Undisclosed Material Liabilities. There are
no liabilities of the Company or any Subsidiary of any kind whatsoever, whether
accrued, contingent, absolute, determined, determinable or otherwise, which
individually or in the aggregate would be reasonably likely to have a Material
Adverse Effect, other than:
(a) liabilities disclosed or provided for in the Balance Sheet or
the balance sheets (and the notes thereto) included in the Company's reports on
Form 10-Q referred to in Section 3.07(a);
(b) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date; and
(c) liabilities under this Agreement.
Section 3.12. Litigation. Except as set forth in the SEC
Documents, there is no action, suit, investigation or proceeding (or any basis
therefor) pending against, or to the knowledge of the Company threatened
against or affecting, the Company or any Subsidiary or any of their respective
properties before any court or arbitrator or any governmental body, agency or
official which would reasonably be expected to have a Material Adverse Effect.
Section 3.13. Taxes. (a) All tax returns, statements, reports
and forms (including estimated tax returns and reports and information returns
and reports) required to be filed with any taxing authority by or on behalf of
the Company or any Subsidiary of the Company (collectively, the "Returns"),
were filed when due (including any applicable extension periods).
(b) The Company and its Subsidiaries have timely paid, or withheld
and remitted to the appropriate taxing authority, all taxes shown as due and
payable on the Returns that have been filed.
(c) The charges, accruals and reserves for taxes with respect to
the Company and any Subsidiary (including for any tax period for which no
Return has yet been filed) reflected on the books of the Company and its
Subsidiaries (excluding any provision for deferred income taxes) are adequate
to cover taxes for which the Company and any such Subsidiary are liable.
(d) There is no material claim (including under any
indemnification or tax-sharing agreement), audit, action, suit, proceeding, or
investigation now pending or threatened in writing against or in respect of
any tax or tax asset of the Company or any Subsidiary (other than any in
respect of which a reserve or allowance has been recorded in the 1997
Financial Statements). For purposes of this Section 3.13, the term "tax
asset" shall include any net operating loss, net capital loss, investment tax
credit, foreign tax credit or charitable deduction.
(e) There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any Returns of the Company or any
of its Subsidiaries.
(f) There are no Liens for taxes upon the assets of the Company or
its Subsidiaries except for Liens for current taxes not yet due, and except for
Liens that, individually or in the aggregate, would not have a Material
Adverse Effect.
Section 3.14. ERISA. (a) The Disclosure Schedule sets forth a
list identifying each material "employee pension benefit plan", as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"),
which (i) is subject to any provision of ERISA and (ii) is maintained,
administered or contributed to by the Company or any affiliate (as defined
below) and covers any employee or former employee of the Company or any
affiliate or under which the Company or any affiliate has any material
liability. Within five business days of the date hereof, the Company will make
available to MergerSub copies of such plans (and, if applicable, related trust
agreements) and all amendments thereto and written interpretations, together
with (A) the three most recent annual reports (Form 5500 including, if
applicable, Schedule B thereto) prepared in connection with any such plan and
(B) the most recent actuarial valuation report prepared in connection with any
such plan, in each case only to the extent not previously made available. Such
plans are referred to collectively herein as the "Employee Plans". For
purposes of this Section 3.14, "affiliate" of any Person means any other
Person which, together with such Person, would be treated as a single employer
under Section 414 of the Code. The only Employee Plans which individually or
collectively would constitute (x) an "employee pension benefit plan" as
defined in Section 3(2) of ERISA (the "Pension Plans") or (y) a "multiemployer
plan", as defined in Section 3(37) of ERISA (a "Multiemployer Plan") are
identified as such in the list referred to above.
(b) No Employee Plan is maintained in connection with any trust
described in Section 501(c)(9) of the Code. The only Employee Plans that are
subject to Title IV of ERISA (the "Retirement Plans") are identified in the
list of such Plans provided to MergerSub by the Company. As of the Balance
Sheet Date, the fair market value of the aggregate assets of the Retirement
Plans (excluding for these purposes any accrued but unpaid contributions)
exceeded the projected benefit obligations on an aggregate basis accrued under
such Retirement Plans as in effect on such date. No "accumulated funding
deficiency", as defined in Section 412 of the Code, has been incurred with
respect to any Retirement Plan, whether or not waived. The Company knows of no
"reportable event", within the meaning of Section 4043 of ERISA, and no event
described in Section 4041, 4042, 4062 or 4063 of ERISA has occurred in
connection with any Employee Plan, other than a "reportable event" or other
event that will not have a Material Adverse Effect. To the Company's
knowledge, no current condition exists and no event has occurred that (i)
would constitute grounds for termination of any Retirement Plan and neither
the Company nor any of its affiliates has incurred any liability under Title
IV of ERISA arising in connection with the termination of, or complete or
partial withdrawal from, any Retirement Plan covered or previously covered by
Title IV of ERISA that would have a Material Adverse Effect or (ii) presents a
material risk of complete or partial withdrawal from any Multiemployer Plan
which would result in the Company or any Subsidiary incurring a withdrawal
liability within the meaning of Section 4201 of ERISA that would have a
Material Adverse Effect. The assets of the Company and all of its
Subsidiaries are not now, nor, to the Company's knowledge, will they after the
passage of time be, subject to any lien imposed under Section 412(n) of the
Code by reason of a failure of any of the Company or any of its affiliates to
make timely installments or other payments required under Section 412 of the
Code. Nothing done or omitted to be done, and no transaction or holding of
any asset under or in connection with any Employee Plan, has made or will make
the Company or any Subsidiary, or any officer or director of the Company or
any Subsidiary, subject to any liability under Title I of ERISA or liable for
any tax pursuant to Section 4975 of the Code that could have a Material
Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and to the Company's knowledge has
been so qualified during the period from its adoption to date and each trust
forming a part thereof is exempt from tax pursuant to Section 501(a) of the
Code. The Company will furnish to MergerSub within five days of the date
hereof copies of the most recent Internal Revenue Service determination letters
with respect to each such Employee Plan's qualified status. Except as would
not have a Material Adverse Effect, each Employee Plan has been maintained in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including but not limited to ERISA
and the Code, which are applicable to such Employee Plan.
(d) There is no contract, agreement, plan or arrangement covering
any employee or former employee of the Company or any affiliate that,
individually or collectively, would give rise to the payment of any amount that
would not be deductible pursuant to the terms of Section 280G of the Code.
(e) "Benefit Arrangements" means each material, written plan or
arrangement providing for insurance coverage (including any self-insured
arrangements), severance, disability benefits, supplemental unemployment
benefits, vacation benefits, retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation or other forms of
incentive compensation or post-retirement insurance, compensation or benefits
which (i) is not an Employee Plan, (ii) is entered into, maintained or
contributed to, as the case may be, by the Company or any of its affiliates and
(iii) covers any U.S. employee or former employee of the Company or any of its
affiliates. Copies or descriptions of all such foregoing Benefit Arrangements
will be made available to MergerSub within five business days of the date
hereof to the extent not previously made available. Each Benefit Arrangement
has been maintained in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations that are
applicable to such Benefit Arrangement except where any noncompliance would
have a Material Adverse Effect.
(f) The present value of the projected liability in respect of
post-retirement health and medical benefits for retired employees of the
Company and its affiliates is set forth fairly, in all material respects, in
the 1997 Financial Statements. To the Company's knowledge, each "employee
welfare benefit plan" (within the meaning of Section 3(1) of ERISA) providing
health or medical benefits in respect of any active non-union employee of the
Company or any Subsidiary may by its terms be amended or terminated.
(g) There has been no amendment to, written interpretation or
written announcement by the Company or any of its affiliates relating to any
Employee Plan or Benefit Arrangement which would increase materially the
expense of maintaining such Employee Plan or Benefit Arrangement above the
level of the expense incurred in respect thereof for the fiscal year ended on
the Balance Sheet Date.
(h) The Company is not a party to or subject to any employment
contract with any executive officer or director of the Company.
(i) Except as would not have a Material Adverse Effect, each
material International Plan has been maintained in substantial compliance with
its terms and with the requirements prescribed by any and all applicable
statutes, orders, rules and regulations (including any special provisions
relating to qualified plans where such Plan was intended to so qualify) and
has been maintained in good standing with applicable regulatory authorities.
With respect to each material International Plan, there has been no amendment
to, written interpretation of or written announcement by the Company or any
Subsidiary relating to, or change in employee participation or coverage under,
any such material International Plan that would increase materially the expense
of maintaining such material International Plan above the level of expense
incurred in respect thereof for the most recent fiscal year ended prior to the
date hereof.
"International Plan" means any employment, severance or similar
contract or arrangement (whether or not written) or any plan, policy, fund,
program or arrangement or contract providing for severance, insurance coverage
(including any self-insured arrangements), workers' compensation, disability
benefits, supplemental unemployment benefits, vacation benefits, pension or
retirement benefits or for deferred compensation, profit-sharing, bonuses,
stock options, stock appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or benefits that (i) is
not an Employee Plan or a Benefit Arrangement, (ii) is entered into,
maintained, administered or contributed to by the Company or any Subsidiary
and (iii) covers any non U.S. employee of the Company or any Subsidiary.
Section 3.15. Labor Matters. The Company and its Subsidiaries
are in compliance with all currently applicable laws respecting employment
practices, terms and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice, the failure to comply with which or
engagement in which, as the case may be, would have a Material Adverse Effect.
There is no unfair labor practice complaint pending or, to the knowledge of
the Company, threatened against the Company or any Subsidiary before the
National Labor Relations Board or otherwise which if adversely resolved is
likely to have a Material Adverse Effect. There are no strikes, slowdowns,
union organizational campaigns or other protected concerted activity under the
National Labor Relations Act or, to the knowledge of the Company, threats
thereof, by or with respect to any employees of the Company or any Subsidiary
which would have a Material Adverse Effect.
Section 3.16. Compliance with Laws and Court Orders. Neither
the Company nor any Subsidiary is in violation of, or has since January 1, 1996
violated, and to the knowledge of the Company none is under investigation with
respect to or has been threatened to be charged with or given notice of any
violation of, any applicable law, rule, regulation, judgment, injunction,
order or decree, except for violations that would not, individually or in the
aggregate, have a Material Adverse Effect.
Section 3.17. Licenses and Permits. Except as would not,
individually or in the aggregate have a Material Adverse Effect, (i) each
license, franchise, permit, certificate, approval or other similar
authorization affecting, or relating in any way to, the assets or business of
the Company and its Subsidiaries (the "Permits") is valid and in full force
and effect and (ii) neither the Company nor any Subsidiary is in default
under, and no condition exists that with notice or lapse of time or both would
constitute a default under, the Permits.
Section 3.18. Intellectual Property. The Company and the
Subsidiaries own or possess adequate licenses or other rights to use all
Intellectual Property Rights necessary to conduct the business now operated by
them, except where the failure to own or possess such licenses or rights would
not be reasonably likely to have a Material Adverse Effect. To the knowledge
of the Company, the Intellectual Property Rights of the Company and the
Subsidiaries do not conflict with or infringe upon any Intellectual Property
Rights of others to the extent that, if sustained, such conflict or
infringement would be reasonably likely to have a Material Adverse Effect. For
purposes of this Agreement, "Intellectual Property Right" means any trademark,
service ▇▇▇▇, trade name, mask work, copyright, patent, software license,
other data base, invention, trade secret, know-how (including any
registrations or applications for registration of any of the foregoing) or any
other similar type of proprietary intellectual property right.
Section 3.19. Finders' Fees. With the exception of Lazard
Freres & Co. LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., copies of whose engagement agreements
have been provided to MergerSub, there is no investment banker, broker, finder
or other intermediary which has been retained by or is authorized to act on
behalf of the Company or any Subsidiary who might be entitled to any fee or
commission from the Company or any Subsidiary or any of its affiliates upon
consummation of the transactions contemplated by this Agreement. For purposes
of this Agreement (other than Section 3.14), "Affiliate" or "affiliate" means,
with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such other Person.
Section 3.20. Required Votes. The adoption of this Agreement
by the affirmative vote of the holders of Shares entitling such holders to
exercise at least a majority of the voting power of the Shares, the vote of
the Company as sole stockholder of ExistingSub and the vote of ExistingSub as
sole stockholder of ReorgSub are the only votes of holders of any class or
series of the capital stock of the Company, ExistingSub and ReorgSub required
to adopt this Agreement, or to approve the Mergers or any of the other
transactions contemplated hereby and no higher or additional vote is required
pursuant to the Company's or ExistingSub's certificate of incorporation or
otherwise.
Section 3.21. Environmental Matters. (a) (i) No action, suit,
investigation or proceeding is pending against, or, to the knowledge of the
Company, is threatened by any Person against, the Company or any Subsidiary
which has a reasonable likelihood of an adverse determination nor has any
material penalty been assessed against the Company or any Subsidiary with
respect to any (A) alleged violation of any Environmental Law or liability
thereunder, (B) alleged failure to have any permit, certificate, license,
approval, registration or authorization required under any Environmental Law,
(C) generation, treatment, storage, recycling, transportation or disposal of
any Hazardous Substance or (D) discharge, emission or release of any Hazardous
Substance, except for such actions, suits, investigations, proceedings and
penalties which, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect;
(ii) no Hazardous Substance has been discharged, emitted,
released or is present at any property now or previously owned, leased or
operated by the Company or any Subsidiary, which circumstance, individually or
in the aggregate, would reasonably be expected to result in a Material Adverse
Effect;
(iii) the estimated costs of environmental remediation set
forth in the Company 10-K represent a reasonable estimate of the Company's
potential exposure for Environmental Liabilities reasonably likely to be
incurred in the next ten years, including without limitation the costs of
remediation or similar obligations (based on an application of current
Environmental Laws and the use of a remedy reasonably likely to be required
under such Environmental Laws), provided that there will be no breach of this
representation unless the costs of such environmental remediation exceed such
estimate by $5,400,000; and
(iv) there are no Environmental Liabilities that would
reasonably be expected to have a Material Adverse Effect.
(b) There has been no environmental investigation, study, audit,
test, review or other analysis conducted since January 13, 1991 of which the
Company has knowledge in relation to the current or prior business of the
Company or any property or facility now or previously owned or leased by the
Company or any Subsidiary which has not been made available to MergerSub at
least five days prior to the date hereof, except for such investigations,
studies, audits, tests, reviews or analyses which report on conditions and
liabilities that, individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect.
(c) For purposes of this Section 3.22 the following terms shall
have the meanings set forth below:
(i) "Environmental Laws" means any and all federal, state,
local and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, codes and injunctions
relating to the effect of the environment on human health, the
environment or to emissions, discharges or releases of pollutants,
contaminants or other hazardous substances or wastes into the
environment, including without limitation ambient air, surface water,
ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants or other hazardous substances or
wastes or the clean-up or other remediation thereof;
(ii) "Environmental Liabilities" means any and all liabilities
of or relating to the Company and any Subsidiary (including any
liability which relates to a predecessor of the Company or any
Subsidiary), whether contingent or fixed, actual or potential, known or
unknown, which (i) arise under or relate to matters covered by
Environmental Laws and (ii) relate to actions occurring or conditions
existing on or prior to the Effective Time; and
(iii) "Hazardous Substances" means any toxic,
radioactive or otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance having
any constituent elements displaying any of the foregoing
characteristics, which in any event is regulated under Environmental
Laws.
Section 3.22. Disclaimer. Except as set forth in this Article 3 or in
Section 1.02(d), the Company has not made and shall not be deemed to have made
any representation or warranty, express or implied. Without limiting the
generality of the foregoing, and notwithstanding any otherwise express
representation or warranty made by the Company in Article 3 or Section 1.02(d),
the Company makes no representation or warranty with respect to any projections,
estimates or budgets heretofore delivered to or made available to MergerSub of
future revenues, expenses or expenditures or results of operations of the
Company or any Subsidiaries.
ARTICLE 4
Representations and Warranties of MergerSub
MergerSub represents and warrants to the Company that:
Section 4.01. Corporate Existence and Power. MergerSub is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. Since the date of its
incorporation, MergerSub has not engaged in any activities other than in
connection with or as contemplated by this Agreement and the Merger or in
connection with arranging any financing required to consummate the
transactions contemplated hereby. MergerSub has heretofore delivered to the
Company true and complete copies of MergerSub's certificate of incorporation
and bylaws as currently in effect.
Section 4.02. Corporate Authorization. The execution, delivery
and performance by MergerSub of this Agreement and the consummation by
MergerSub of the transactions contemplated hereby are within the corporate
powers of MergerSub and have been duly authorized by all necessary corporate
action. This Agreement constitutes a valid and binding agreement of MergerSub.
Section 4.03. Governmental Authorization. The execution,
delivery and performance by MergerSub of this Agreement and the consummation by
MergerSub of the transactions contemplated by this Agreement require no action
by or in respect of, or filing with, any governmental body, agency, official
or authority other than (a) the filing of a certificate of merger in
accordance with Delaware Law; (b) compliance with any applicable requirements
of the HSR Act; (c) compliance with any applicable requirements of the
Exchange Act; (d) compliance with the applicable requirements of the
Securities Act; (e) compliance with any applicable foreign or state securities
or Blue Sky laws; (f) any other authorizations required to be obtained
pursuant to applicable foreign statutes, rules or regulations and (g) any
actions or filings that if not taken or made would not have a material adverse
effect on MergerSub.
Section 4.04. Non-Contravention. The execution, delivery and
performance by MergerSub of this Agreement and the consummation by MergerSub
of the transactions contemplated hereby do not and will not (a) contravene or
conflict with the certificate of incorporation or bylaws of MergerSub, (b)
assuming compliance with the matters referred to in Section 4.03, contravene or
conflict with any provision of law, regulation, judgment, order or decree
binding upon MergerSub, or (c) constitute a default under or give rise to any
right of termination, cancellation or acceleration of any right or obligation
of MergerSub or to a loss of any benefit to which MergerSub is entitled under
any agreement, contract or other instrument binding upon MergerSub.
Section 4.05. Disclosure Documents. (a) The information that
MergerSub furnishes to the Company for use in any Company Disclosure Document
will not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading (i) in
the case of the Company Proxy Statement, at the time the Company Proxy
Statement or any amendment or supplement thereto is first mailed to
stockholders of the Company and at the time the stockholders vote on adoption
of this Agreement and the Mergers, and (ii) in the case of any Company
Disclosure Document other than the Company Proxy Statement, at the time of the
filing thereof and at the time of any required distribution thereof.
(b) Each document required to be filed by MergerSub with the SEC
in connection with the Mergers (including the Financing) will, when filed,
comply as to form in all material respects with the applicable requirements of
the Securities Act and the Exchange Act and will not at the time of the filing
thereof, or at the time of the distribution thereof, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading, provided, that this representation and
warranty will not apply to statements or omissions in such documents based upon
information furnished to MergerSub in writing by the Company specifically for
use therein.
Section 4.06. Finders' Fees. Except for ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation ("DLJSC"), whose fees will be paid by
MergerSub, there is no investment banker, broker, finder or other intermediary
who might be entitled to any fee or commission from MergerSub or any of its
affiliates upon consummation of the transactions contemplated by this
Agreement.
Section 4.07. Financing. The Company has received copies of
(a) a commitment letter dated March 20, 1998 from DLJ Merchant Banking
Partners II, L.P., and certain of its affiliates pursuant to which each of the
foregoing has committed, subject to the terms and conditions set forth therein,
to purchase securities of MergerSub for an aggregate amount equal to
$54,999,997.50, (b) a letter dated March 20, 1998 from DLJ Bridge Finance,
Inc. ("DLJ Bridge Fund") pursuant to which DLJ Bridge Fund has committed,
subject to the terms and conditions set forth therein, to purchase senior
pay-in-kind increasing rate notes of the Company in the amount of $110,000,000
and (c) a commitment letter dated March 20, 1998 from DLJ Capital Funding,
Inc. ("DLJ Senior Debt Fund") pursuant to which DLJ Senior Debt Fund has
committed, subject to the terms and conditions set forth therein, to enter
into one or more credit agreements providing for loans to the corporation
surviving the Reorganization Merger of up to $350,000,000. As used in this
Agreement, the aforementioned entities shall hereinafter be referred to as the
"Financing Entities". The aforementioned credit agreements and commitments to
purchase equity securities of MergerSub shall be referred to as the "Financing
Agreements" and the financing to be provided thereunder shall be referred to
as the "Financing." The aggregate proceeds of the Financing are in an amount
sufficient to pay the Merger Consideration, to repay the Company's and its
Subsidiaries' indebtedness (excluding for this purpose capital lease
obligations) together with any interest, premium or penalties payable in
connection therewith, to provide a reasonable amount of working capital
financing and to pay related fees and expenses (collectively, the "Required
Amounts"). As of the date hereof, none of the commitment letters relating to
the Financing Agreements referred to above has been withdrawn and MergerSub
does not know of any facts or circumstances that may reasonably be expected to
result in any of the conditions set forth in the commitment letters relating
to the Financing Agreements not being satisfied. MergerSub believes that the
Financing will not create any liability to the directors and stockholders of
the Company under any Federal or state fraudulent conveyance or transfer law.
MergerSub further believes that, upon the consummation of the transactions
contemplated hereby, including, without limitation, the Financing, the
Surviving Corporation (i) will not become insolvent, (ii) will not be left
with unreasonably small capital, (iii) will not have incurred debts beyond its
ability to pay such debts as they mature, and (iv) will not have its capital
impaired. MergerSub knows of no reason why the Merger will not be recorded as
a "recapitalization" for financial reporting purposes.
Section 4.08. Capitalization. All outstanding shares of
capital stock of MergerSub have been duly authorized and validly issued and
are fully paid and nonassessable. As of the moment immediately prior to the
Effective Time, 1,235,955 shares of MergerSub Common Stock and MergerSub
Warrants to acquire 111,347 shares of MergerSub Common Stock at an exercise
price of not less than $0.01 per share (which will have been purchased for
aggregate consideration of $54,999,997.50) will be outstanding. Except as set
forth in this Section 4.8, there are outstanding (a) no shares of capital
stock or other voting securities of MergerSub, (b) no securities of MergerSub
convertible into or exchangeable for shares of capital stock or voting
securities of MergerSub, and (c) no options or other rights to acquire from
MergerSub, and no obligation of MergerSub to issue, any capital stock, voting
securities or securities convertible into or exchangeable for capital stock or
voting securities of MergerSub (the items in clauses (a), (b) and (c),
together with the MergerSub Common Stock and the MergerSub Warrants, being
referred to collectively as the "MergerSub Securities"). There are no
outstanding obligations of MergerSub to repurchase, redeem or otherwise
acquire any MergerSub Securities.
ARTICLE 5
Covenants of the Company
The Company agrees that:
Section 5.01. Conduct of the Company. Except as otherwise
contemplated by, or provided for, in this Agreement or the Disclosure
Schedule, without the prior written consent of MergerSub (which shall not be
unreasonably withheld), from the date hereof to the Effective Time, the Board
of Directors shall not approve or authorize any action that would allow the
Company and its Subsidiaries to carry on their respective businesses other than
in the ordinary and usual course of business and consistent with past practices
or any action that would prevent the Company and its Subsidiaries from using
their reasonable best efforts to (i) preserve intact its present business
organization, (ii) maintain in effect all material federal, state and local
licenses, approvals and authorizations, including, without limitation, all
material Permits that are required for the Company or any of its Subsidiaries
to carry on their business, (iii) keep available the services of its key
officers and key employees, and (iv) maintain satisfactory relationships with
its material customers, lenders, suppliers and others having material business
relationships with it. Without limiting the generality of the foregoing, and
except as otherwise contemplated by, or provided for, in this Agreement or the
Disclosure Schedule, without the prior written consent of MergerSub (which
shall not be unreasonably withheld), prior to the Effective Time, the Board of
Directors shall not, nor shall it authorize or direct the Company or any
Subsidiary, directly or indirectly, to:
(a) adopt or propose any change in its certificate of
incorporation or bylaws;
(b) except pursuant to existing agreements or arrangements, (i)
acquire (by merger, consolidation, acquisition of stock or assets or
otherwise), directly or indirectly, any material corporation, partnership or
other business organization or division thereof, or sell, lease or otherwise
dispose of a material Subsidiary or a material amount of assets (excluding
sales of inventory) or securities; (ii) waive, release, grant, or transfer any
rights of material value, except in the ordinary course of business,
consistent with past practices; (iii) modify or change in any material respect
any existing material license, lease, contract, or other document, except in
the ordinary course of business, consistent with past practices; (iv) except
to refund or refinance commercial paper or with respect to borrowings in the
ordinary course of business consistent with past practices, incur, assume or
prepay an amount of long-term or short-term debt; (v) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person, except in
the ordinary course of business, consistent with past practices; (vi) make any
loans, advances or capital contributions to, or investments in, any other
person, except in the ordinary course of business, consistent with past
practices; or purchase any property or assets of any other individual or
entity, except in the ordinary course of business, consistent with past
practices; (vii) enter into any interest rate, currency or other swap or
derivative transaction, other than in the ordinary course of business,
consistent with past practices, and for bona fide hedging purposes; or (viii)
except for capital expenditures provided for in the Company's 1998 capital
budget, a copy of which has been previously provided to MergerSub, incur any
capital expenditure, individually or in the aggregate, in excess of
$3,000,000.
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
other than cash dividends and distributions by a directly or indirectly wholly
owned Subsidiary of the Company to the Company or a directly or indirectly
wholly owned Subsidiary, or, in the case of a joint venture vehicle pro rata
to all equity owners thereof, or redeem, repurchase or otherwise acquire or
offer to redeem, repurchase, or otherwise acquire any of its securities or any
securities of its Subsidiaries, except pursuant to the Reorganization Merger;
(d) adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or employee benefit plan, agreement, trust, plan,
fund or other arrangement for the benefit and welfare of any director, officer
or employee, or increase in any manner the compensation or fringe benefits of
any director, officer or employee or pay any benefit not required by any
existing plan or arrangement (including, without limitation, the granting of
stock options or stock appreciation rights or the removal of existing
restrictions in any benefit plans or agreements), except, in each case, for
normal actions in the ordinary course of business that are consistent with
past practices and that, in the aggregate, do not result in a material
increase in benefits or compensation expense to the Company;
(e) except as required by applicable law or generally accepted
accounting principles, revalue in any material respect any of its assets,
including, without limitation, writing down the value of inventory in any
material manner or write-off of notes or accounts receivable in any material
manner;
(f) pay, discharge or satisfy any material claims, liabilities or
obligations (whether absolute, accrued, asserted or unasserted, contingent or
otherwise) other than the payment, discharge or satisfaction in the ordinary
course of business, consistent with past practices, of liabilities reflected or
reserved against in the consolidated financial statements of the Company or
incurred in the ordinary course of business, consistent with past practices;
(g) make any tax election inconsistent with past practices, or
settle or compromise any material income tax liability;
(h) take any action other than in the ordinary course of business
and consistent with past practices with respect to accounting policies or
procedures; or
(i) agree or commit to do any of the foregoing.
Section 5.02. Stockholder Meeting; Proxy Material. (a) The
Company shall cause a meeting of its stockholders (the "Company Stockholder
Meeting") to be duly called and held as soon as reasonably practicable for the
purpose of voting on the approval and adoption of this Agreement and the
Mergers. The Board of Directors shall, subject to its fiduciary duties as
advised by counsel, recommend approval and adoption by the Company's
stockholders of this Agreement and the Mergers.
(b) In connection with the Company Stockholder Meeting, the
Company (i) will as promptly as practicable prepare and file with the SEC a
Registration Statement on Form S-4 (the "Registration Statement") (which
Registration Statement includes the Company Proxy Statement), will use its
reasonable best efforts to have the Registration Statement declared effective
by the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for such
meeting, (ii) will use its reasonable best efforts to obtain the necessary
approvals by its stockholders of this Agreement, the Mergers and the
transactions contemplated hereby and (iii) will otherwise comply with all
legal requirements applicable to such meeting.
Section 5.03. Access to Information. From the date hereof
until the Effective Time, the Company will give MergerSub, its counsel,
financial advisors, auditors and other authorized representatives full access
to the offices, properties, books and records of the Company and the
Subsidiaries (so long as such access does not unreasonably interfere with the
operations of the Company and the Subsidiaries), will furnish to MergerSub,
their counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as
such Persons may reasonably request and will instruct the Company's employees,
counsel and financial advisors to cooperate with MergerSub in its
investigation of the business of the Company and the Subsidiaries; provided
that no investigation pursuant to this Section 5.03 shall affect any
representation or warranty given by the Company to MergerSub hereunder; and
provided, further that (i) any information provided to MergerSub pursuant to
this Section 5.03 shall be subject to the Confidentiality Agreement dated as of
February 16, 1998 between the Company and DLJ Merchant Banking II, Inc. (the
"Confidentiality Agreement") and (ii) none of the Company or any other Persons
covered by this Section 5.03 shall be obligated to furnish any information
under this Section 5.03 if doing so would, on the basis of advice from the
Company's counsel, result in the loss of attorney-client privilege in favor of
the Company or a Subsidiary or violate the terms of any contract, so long as
the Company informs MergerSub of its decision to withhold such information and
furnishes a description of such information that is consistent with the
preservation of such privilege or compliance with such agreement, as
applicable.
Section 5.04. Other Offers. (a) Neither the Company nor any of
its Subsidiaries shall (whether directly or indirectly through advisors,
agents or other intermediaries), nor shall the Company or any of its
Subsidiaries authorize or permit any of its or their officers, directors,
agents, representatives, advisors or Subsidiaries to (A) solicit, initiate or
take any action knowingly to facilitate the submission of inquiries, proposals
or offers from any Third Party (as defined below) (other than MergerSub)
relating to (i) any acquisition or purchase of 20% or more of the consolidated
assets of the Company and its Subsidiaries or of over 20% of any class of
equity securities of the Company or any of its Subsidiaries whose assets,
individually or in the aggregate, constitute more than 20% of the consolidated
assets of the Company, (ii) any tender offer (including a self tender offer)
or exchange offer that if consummated would result in any Third Party
beneficially owning 20% or more of any class of equity securities of the
Company or any of its Subsidiaries whose assets, individually or in the
aggregate, constitute more than 20% of the consolidated assets of the Company,
(iii) any merger, consolidation, business combination, sale of substantially
all assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries whose assets, individually or
in the aggregate, constitute more than 20% of the consolidated assets of the
Company other than the transactions contemplated by this Agreement, or (iv)
any other transaction the consummation of which would or could reasonably be
expected to impede, interfere with, prevent or materially delay the Mergers
(collectively, "Acquisition Proposals"), or agree to or endorse any
Acquisition Proposal, (B) enter into or participate in any discussions or
negotiations regarding any of the foregoing, or furnish to any Third Party any
information with respect to its business, properties or assets in order to
facilitate or encourage any effort or attempt by any Third Party (other than
MergerSub) to do or seek any of the foregoing, or otherwise cooperate in any
way with, or knowingly assist or participate in, facilitate or encourage, any
effort or attempt by any Third Party (other than MergerSub) to do or seek any
of the foregoing, or (C) grant any waiver or release under any standstill or
similar agreement with respect to any class of equity securities of the
Company or any of its Subsidiaries; provided, however, that the foregoing
shall not prohibit the Company (either directly or indirectly through advisors,
agents or other intermediaries) from (i) furnishing information pursuant to an
appropriate confidentiality letter (which letter shall not be less favorable
to the Company in any material respect than the Confidentiality Agreement, and
a copy of which shall be provided for informational purposes only to MergerSub
with the name of the other party redacted) concerning the Company and its
businesses, properties or assets to a Third Party who has made a bona fide
Acquisition Proposal, (ii) engaging in discussions or negotiations with a Third
Party who has made a bona fide Acquisition Proposal, (iii) following receipt of
a bona fide Acquisition Proposal, taking and disclosing to its stockholders a
position contemplated by Rule 14e-2(a) or Rule 14d-9 under the Exchange Act
or otherwise making disclosure to its stockholders, (iv) following receipt of a
bona fide Acquisition Proposal, failing to make or withdrawing or modifying
its recommendation referred to in Section 5.2 and/or (v) taking any
non-appealable, final action ordered to be taken by the Company by any court of
competent jurisdiction, but in each case referred to in the foregoing clauses
(i) through (iv) only to the extent that the Board of Directors shall have
concluded in good faith on the basis of advice from outside counsel that the
failure to take such action would result in a breach of the fiduciary duties
of the Board of Directors to the stockholders of the Company under applicable
law; provided, further, that (A) the Board of Directors shall not take any of
the foregoing actions referred to in clauses (i) through (iv) until after
reasonable notice to MergerSub with respect to such action, and (B) if the
Board of Directors receives an Acquisition Proposal, to the extent it may do
so without breaching its fiduciary duties as advised by counsel and as
determined in good faith and without violating any of the conditions of such
Acquisition Proposal, then the Company shall promptly inform MergerSub of the
terms and conditions of such proposal and the identity of the person making
it. The Company will immediately cease and cause its advisors, agents and
other intermediaries to cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing, and shall use its reasonable best efforts to cause any such parties
in possession of confidential information about the Company that was furnished
by or on behalf of the Company to return or destroy all such information in
the possession of any such party or in the possession of any agent or advisor
of any such party. As used in this Agreement, the term "Third Party" means
any person, corporation, entity or "group," as defined in Section 13(d) of the
Exchange Act, other than MergerSub or any of its affiliates.
(b) If a Payment Event (as hereinafter defined) occurs, the Company
shall pay to MergerSub, within two business days following such Payment Event,
a fee of $6,000,000.
(c) "Payment Event" means (w) the termination of this Agreement
pursuant to Section 9.1(e); (x) the termination of this Agreement pursuant to
Section 9.1(f) in contemplation of a merger agreement or a tender or exchange
offer or any transaction of the type listed in clause (z) below, on terms more
favorable to the Company's stockholders from a financial point of view than
the Merger; (y) the termination of this Agreement by MergerSub pursuant to
Section 9.1(c) but only if the breach of covenant or warranty or
misrepresentation in question arises out of the bad faith or wilful misconduct
of the Company; or (z) the occurrence of any of the following events within
12 months of the termination of this Agreement pursuant to Section 9.1(g)
whereby stockholders of the Company receive, pursuant to such event, cash,
securities or other consideration having an aggregate value, when taken
together with the value of any securities of the Company or its Subsidiaries
otherwise held by the stockholders of the Company after such event, in excess
of $44.50 per Share: the Company is acquired by merger or otherwise by a
Third Party; a Third Party acquires more than 50% of the total assets of the
Company and its Subsidiaries, taken as a whole; a Third Party acquires more
than 50% of the outstanding Shares or the Company adopts and implements a plan
of liquidation, recapitalization or share repurchase relating to more than 50%
of the outstanding Shares or an extraordinary dividend relating to more than
50% of the outstanding Shares or 50% of the assets of the Company and its
Subsidiaries, taken as a whole.
(d) Upon (i) the occurrence of a Payment Event, or (ii) a
termination by MergerSub that follows a failure of the conditions set forth in
Sections 8.01(a) or 8.02(g) to be satisfied, the Company shall reimburse
MergerSub and its affiliates not later than two business days after submission
of reasonable documentation thereof for 100% of their out-of-pocket fees and
expenses (including the reasonable fees and expenses of their counsel and fees
payable to the financing entities and their respective counsel) up to
$5,000,000, in each case, actually incurred by any of them or on their behalf
in connection with this Agreement and the transactions contemplated hereby.
(e) The Company acknowledges that the agreements contained in this
Section 5.04 are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, MergerSub would not enter into
this Agreement; accordingly, if the Company fails to promptly pay any amount
due pursuant to this Section 5.04, and, in order to obtain such payment, the
other party commences a suit which results in a judgment against the Company
for the fee or fees and expenses set forth in this Section 5.04, the Company
shall also pay to MergerSub its costs and expenses incurred in connection with
such litigation.
(f) Section 5.04(b)-(e) shall survive any termination of this
Agreement, however caused.
Section 5.05. Resignation of Directors. Immediately prior to
the Effective Time, the Company and ExistingSub shall deliver to MergerSub
evidence satisfactory to MergerSub of the resignation of all directors of the
Company and ExistingSub (in each case other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) effective
at the Effective Time.
Section 5.06. Solvency Opinion. The Company shall request an
independent advisor to deliver the opinion contemplated by Section 8.3(b) as
promptly as practicable.
Section 5.07. Transfers by Affiliates. The Company shall use
its reasonable best efforts to obtain and provide to MergerSub prior to the
Effective Time undertakings in writing from each Person, if any, who according
to counsel for the Company might reasonably be considered "affiliates" of the
Company within the meaning of Rule 145(c) of the SEC pursuant to the
Securities Act (each, a "Rule 145 Affiliate"), in each case in form and
substance reasonably satisfactory to counsel for MergerSub providing (i) such
Rule 145 Affiliate will notify MergerSub in writing before offering for sale
or selling or otherwise disposing of any Shares or ExistingSub Shares owned by
such Rule 145 Affiliate and (ii) no such sale or other disposition shall be
made unless and until the Rule 145 Affiliate has supplied to MergerSub an
opinion of counsel for the Rule 145 Affiliate (which opinion shall be
reasonably satisfactory to MergerSub) to the effect that such transfer is not
in violation of the Securities Act.
ARTICLE 6
Covenants of MergerSub
MergerSub agrees that:
Section 6.01. Voting of Shares. MergerSub agrees to vote all
Shares beneficially owned by it in favor of adoption of this Agreement at the
Company Stockholder Meeting.
Section 6.02. Director and Officer Liability. The Surviving
Corporation shall cause the Company to do the following and the Company hereby
agrees to do the following:
(a) The Company shall indemnify and hold harmless the present and
former officers and directors of the Company or any of its Subsidiaries (each
an "Indemnified Person") in respect of acts or omissions or alleged acts or
omissions occurring at or prior to the Effective Time to the fullest extent
permitted from time to time by Delaware Law or any other applicable laws as
presently or hereafter in effect or provided under the Company's certificate of
incorporation and bylaws in effect on the date hereof.
(b) The Company shall pay on an as-incurred basis the reasonable
fees and expenses of such Indemnified Person (including fees and expenses of
counsel) in advance of the final disposition of any action, suit, proceeding or
investigation that is the subject of the right to indemnification, subject to
reimbursement in the event such Indemnified Person is not entitled to
indemnification.
(c) The certificate of incorporation and bylaws of the Company
shall contain the provisions providing for exculpation of director and officer
liability and indemnification on the same basis as set forth in the Company's
certificate of incorporation and bylaws in effect on the date hereof. For a
period of six years after the Effective Time, the Company shall maintain in
effect such provisions in the certificate of incorporation and bylaws of the
Company providing for exculpation of director and officer liability and
indemnification to the fullest extent permitted from time to time under
Delaware Law, which provisions shall not be amended except as required by
applicable law or except to make changes permitted by applicable law that
would enlarge the scope of the Indemnified Parties' indemnification rights
thereunder.
(d) The Company shall pay all expenses, including attorneys' fees,
that may be incurred by an Indemnified Person in enforcing the indemnity and
other obligations provided for in this Section 6.02. In the event of any
action, suit, investigation or proceeding, the Indemnified Party shall be
entitled to control the defense thereof with counsel of its own choosing
reasonably acceptable to the Company and the Company shall cooperate in the
defense thereof, provided however that the Company shall not be liable for the
fees of more than one counsel for all Indemnified Parties, other than local
counsel, unless a conflict of interest shall be caused thereby and provided
further that the Company shall not be liable for any settlement effected
without its written consent (which consent shall not be unreasonably
withheld).
(e) For a period of six years after the Effective Time, the Company
shall provide officers' and directors' liability insurance in respect of acts
or omissions occurring at or prior to the Effective Time covering each such
Person currently covered by the Company's officers' and directors' liability
insurance policy on terms with respect to coverage and amount no less
favorable than those of such policy in effect on the date hereof, provided that
in satisfying its obligation under this Section 6.02(e), the Company shall not
be obligated to pay premiums in excess of 150% of the amount per annum the
Company paid in its last full fiscal year, which amount has been disclosed to
MergerSub.
(f) The rights of each Indemnified Party hereunder shall be in
addition to any other rights such Indemnified Party may have under the
certificate of incorporation or bylaws of the Company or the Surviving
Corporation or any of its Subsidiaries, under Delaware Law or otherwise.
Notwithstanding anything to the contrary contained in this Agreement or
otherwise, the provisions of this Section 6.02 shall survive the consummation
of the Merger, and each Indemnified Person shall, for all purposes, be a third
party beneficiary of the covenants and agreements contained in this Section
6.02 and, accordingly, shall be treated as a party to this Agreement for
purposes of the rights and remedies relating to enforcement of such covenants
and agreements and shall be entitled to enforce any such rights and exercise
any such remedies directly against MergerSub, the Surviving Corporation and
the Company.
Section 6.03. Employee Plans and Benefit Arrangements. (a) From
and after the Effective Time, subject to applicable law, the Surviving
Corporation shall cause the Company and its Subsidiaries to, and the Company
and its Subsidiaries shall, honor the obligations of the Company and its
Subsidiaries incurred prior to the Effective Time under all existing Employee
Plans, Benefit Arrangements and International Plans.
(b) The Surviving Corporation agrees that, for at least one year
from the Effective Time, subject to applicable law, the Surviving Corporation
shall cause the Company and its Subsidiaries to, and the Company and its
Subsidiaries shall, provide benefits to their employees which will, in the
aggregate, be comparable to those currently provided by the Company and its
Subsidiaries to their employees. Notwithstanding the foregoing, nothing herein
shall obligate or require the Company or any of its Subsidiaries to provide its
employees with a plan or arrangement similar to the stock option or any other
equity-based compensation plans currently maintained by the Company and
nothing herein shall limit the Company's right to amend, modify or terminate
any particular Employee Plan or Benefit Arrangement.
(c) After the Effective Time, the Surviving Corporation shall cause
the Company to, and the Company shall, grant to all individuals who are, as
of the Effective Time, employees of the Company or any of its Subsidiaries
credit for all service with the Company, any of its present and former
Subsidiaries, any other affiliate of the Company and their respective
predecessors (collectively, the "Insilco Affiliated Group") prior to the
Effective Time for purposes of vesting, participation, eligibility for benefit
commencement and benefit accrual (but without any duplication of benefits in
any such case). Any Benefit Arrangements or International Plans which
provide medical, dental or life insurance benefits after the Effective Time to
any individual who is a current or former employee of the Insilco Affiliated
Group as of the Effective Time (an "Employee") or a dependent of an Employee
(a "Dependent") shall, with respect to such individuals, waive any waiting
periods and any pre-existing conditions and actively-at-work exclusions to the
extent so waived under present policy and shall provide that any expenses
incurred on or before the Effective Time by such individuals shall be taken
into account under such plans for purposes of satisfying applicable deductible
or coinsurance provisions to the extent taken into account under present
policy.
Section 6.04. Financing. MergerSub shall use its reasonable
best efforts to obtain the Financing (including satisfying the conditions
thereto). In the event that any portion of such Financing becomes
unavailable, regardless of the reason therefor, MergerSub will use its
reasonable best efforts to obtain alternative financing on substantially
comparable or more favorable terms from other sources.
Section 6.05. NASDAQ Listing. The Surviving Corporation will not
take any action, for at least three years after the Effective Time, to cause
the Surviving Corporation Shares to be de-listed from, or fail to meet any of
the listing standards of, the NASDAQ National Market ("NASDAQ"); provided,
however, that the Surviving Corporation may cause or permit the Surviving
Corporation Shares to be de-listed in connection with a transaction (other than
the Merger) which results in the termination of registration of such securities
under Section 12 of the Exchange Act, and provided, further, that nothing in
this Section 6.5 shall require the Surviving Corporation to take any
affirmative action to prevent the Surviving Corporation Shares from being
de-listed by NASDAQ if the Surviving Corporation Shares cease to meet the
applicable listing standards. For at least three years after the Effective
Time, the Surviving Corporation shall make available the information required
pursuant to Rule 144(c) of the Securities Act.
ARTICLE 7
Covenants of MergerSub and the Company
The parties hereto agree that:
Section 7.01. Reasonable Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement, including
delivering such documents relating to corporate existence and authority as the
other parties may reasonably request. Each party shall also refrain from
taking, directly or indirectly, any action contrary to or inconsistent with the
provisions of this Agreement, including action which would impair such party's
ability to consummate the Mergers and the other transactions contemplated
hereby. Without limiting the foregoing, the Company and the Board of
Directors shall use their reasonable best efforts to (a) take all action
necessary so that no state takeover statute or similar statute or regulation
is or becomes applicable to the Mergers or any of the other transactions
contemplated by this Agreement and (b) if any state takeover statute or similar
statute or regulation becomes applicable to any of the foregoing, take all
action necessary so that the Mergers and the other transactions contemplated
by this Agreement may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such
statute or regulation on the Mergers and the other transactions contemplated by
this Agreement.
Section 7.02. Certain Filings. (a) The Company and MergerSub
shall use their respective reasonable best efforts to take or cause to be
taken, (i) all actions necessary, proper or advisable by such party with
respect to the prompt preparation and filing with the SEC the Registration
Statement and the other Company Disclosure Documents, (ii) such actions as may
be required to have the Registration Statement declared effective under the
Securities Act and to have the Company Proxy Statement cleared by the SEC, in
each case as promptly as practicable, and (iii) such actions as may be
required to be taken under state securities or applicable Blue Sky laws in
connection with the issuance of the securities contemplated hereby.
(b) The Company agrees to provide, and will cause its Subsidiaries
and its and their respective officers, employees and advisors to provide, all
necessary cooperation in connection with the arrangement of any financing to
be consummated contemporaneous with or at or after the Effective Time in
respect of the transactions contemplated by this Agreement, including without
limitation, (x) participation in meetings, due diligence sessions and road
shows, (y) the preparation of offering memoranda, private placement memoranda,
prospectuses and similar documents, and (z) the execution and delivery of any
commitment letters, underwriting or placement agreements, pledge and security
documents, other definitive financing documents, or other requested
certificates or documents, including comfort letters of accountants and legal
opinions relating to the Company as may be reasonably requested by MergerSub
and as are customarily provided in similar transactions; provided that the
form and substance of any of the material documents referred to in clause (y),
and the terms and conditions of any of the material agreements and other
documents referred to in clause (z), shall be substantially consistent with
the terms and conditions set forth in the commitment letters referred to in
Section 4.07.
(c) The Company and MergerSub shall cooperate with one another (i)
in determining whether any action by or in respect of, or filing with, any
governmental body, agency or official, or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from
parties to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (ii) in seeking any such
actions, consents, approvals or waivers or making any such filings, furnishing
information required in connection therewith or with the Company Disclosure
Documents and seeking to obtain any such actions, consents, approvals or
waivers in a timely manner.
Section 7.03. Public Announcements. MergerSub and the Company
will consult with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby and, except for any press release or public statement as
may be required by applicable law or any listing agreement with any national
securities exchange or NASDAQ, will not issue any such press release or make
any such public statement prior to such consultation.
Section 7.04. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company or
MergerSub, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or MergerSub, any other actions
and things to vest, perfect or confirm of record or otherwise in the Surviving
Corporation any and all right, title and interest in, to and under any of the
rights, properties or assets of the Company acquired or to be acquired by the
Surviving Corporation as a result of, or in connection with, the Mergers.
Section 7.05. Reserved Shares. The Surviving Corporation shall
cause the Company to, and the Company shall, honor the provisions of the
Bankruptcy Order and all agreements made pursuant thereto with respect to the
issuance of the Reserved Shares, except that in lieu of issuing any Reserved
Shares, payment shall be made in cash in an amount equal to $44.50 multiplied
by the aggregate number of Reserved Shares which otherwise would become
issuable pursuant to the provisions of the Bankruptcy Order.
Section 7.06. Notices of Certain Events. Each of the parties
hereto shall promptly notify the other parties of:
(a) the receipt by such party of any material written notice or
other material communication from any Person alleging that the consent of such
Person is or may be required in connection with the transactions contemplated
by this Agreement;
(b) the receipt by such party of any material written notice or
other material communication from any governmental or regulatory agency or
authority in connection with the transactions contemplated by this Agreement;
(c) actual knowledge by such party of any actions, suits, claims,
investigations or proceedings commenced or, to the knowledge of such party
threatened against such party or any of its Affiliates which, if pending on the
date of this Agreement, would have been required to have been disclosed
pursuant to Section 3.12 or which relate to the consummation of the
transactions contemplated by this Agreement; and
(d) actual knowledge by such party of (i) the occurrence, or
failure to occur, of any event that has caused any of its representations or
warranties hereunder to be untrue or inaccurate in any material respect at any
time from the date hereof to the Effective Time and (ii) the failure by it to
comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement.
ARTICLE 8
Conditions to the Merger
Section 8.01. Conditions to the Obligations of Each Party. The
obligations of the Company and MergerSub to consummate the Mergers are subject
to the satisfaction of the following conditions:
(a) This Agreement and the Mergers shall have been adopted by a
majority of the outstanding Shares as of the record date of the Company
Stockholder Meeting.
(b) Any applicable waiting period under the HSR Act relating to the
Merger shall have expired or been terminated;
(c) No provision of any applicable law or regulation and no
judgment, order, decree or injunction shall prohibit or restrain the
consummation of the Merger; provided, however, that the Company and MergerSub
shall each use its reasonable best efforts to have any such judgment, order,
decree or injunction vacated;
(d) All consents, approvals and licenses of any governmental or
other regulatory body required in connection with the execution, delivery and
performance of this Agreement and for the Company and its Subsidiaries to
conduct their business in substantially the manner now conducted, shall have
been obtained, unless the failure to obtain such consents, authorizations,
orders or approvals would not have a Material Adverse Effect after giving
effect to the transactions contemplated by this Agreement (including the
Financing); and
(e) The Registration Statement shall have been declared effective
and no stop order suspending the effectiveness of the Registration Statement
shall be in effect and no proceedings for such purpose shall be pending before
or threatened by the SEC.
Section 8.02. Conditions to the Obligations of MergerSub. The
obligations of MergerSub to consummate the Merger are subject to the
satisfaction of the following further conditions:
(a) The Company shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained
in this Agreement shall be true in all material respects at and as of the
Effective Time (provided that representations made as of a specific date shall
be required to be true as of such date only) as if made at and as of such time
(except as contemplated by this Agreement) and MergerSub shall have received a
certificate signed by an executive officer of the Company to the foregoing
effect. The parties agree that the Reorganization Merger shall not be deemed
to have occurred for the purposes of determining the satisfaction of this
Section 8.02(a) as to the representations and warranties of the Company covered
by this Section 8.02(a) and following the Reorganization Merger, ExistingSub
will take no actions, incur no liabilities, enter into no agreements or
otherwise engage in any business except as necessary to consummate the Merger
and the Financing;
(b) There shall not be pending (x) any action or proceeding against
the Company or any Subsidiary by any government or governmental authority or
agency or (y) any action or proceeding against the Company or any Subsidiary
by any other person, in either case before any court or governmental authority
or agency that has a reasonable likelihood of success, challenging or seeking
to make illegal, to delay materially or otherwise directly or indirectly to
restrain or prohibit the consummation of the Merger or seeking to obtain
material damages or otherwise directly or indirectly relating to the
transactions contemplated by this Agreement, seeking to restrain or prohibit
MergerSub's (including its Subsidiaries and affiliates) ownership or operation
of all or any material portion of the business or assets of the Company and
its Subsidiaries, taken as a whole, or to compel MergerSub or any of its
Subsidiaries or affiliates to dispose of or hold separate all or any material
portion of the business or assets of the Company and its Subsidiaries, taken
as a whole, seeking to impose or confirm material limitations on the ability
of MergerSub or any of its Subsidiaries or affiliates to effectively control
the business or operations of the Company and its Subsidiaries, taken as a
whole, or effectively to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote any Shares acquired or owned
by MergerSub or any of its Subsidiaries or affiliates on all matters properly
presented to the Company's stockholders, or seeking to require divestiture by
MergerSub or any of its Subsidiaries or affiliates of any Shares, and no court,
arbitrator or governmental body, agency or official shall have issued any
judgment, order, decree or injunction, and there shall not be any statute, rule
or regulation, that, in the reasonable judgment of MergerSub is likely,
directly or indirectly, to result in any of the consequences referred to in
this paragraph (b);
(c) The Reorganization Merger shall have occurred as contemplated
by Section 1.01;
(d) The funds in an amount at least equal to the Required Amounts
shall have been made available to MergerSub and/or the Company as contemplated
in Section 4.07;
(e) The holders of not more than 6% of the outstanding Shares shall
have demanded appraisal of their Shares in accordance with Delaware Law;
(f) MergerSub shall be reasonably satisfied that the Merger will be
recorded as a "recapitalization" for financial reporting purposes; and
(g) Total indebtedness (long- and short-term) of the Company and
its Subsidiaries immediately preceding the Reorganization Effective Time shall
not exceed $290,000,000 (excluding capital leases).
Section 8.03. Conditions to the Obligations of the Company and
ExistingSub. The obligation of the Company to consummate the Reorganization
Merger and the obligation of ExistingSub to consummate the Merger are subject
to the satisfaction of the following further conditions:
(a) MergerSub shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of MergerSub contained in
this Agreement and in any certificate or other writing delivered by it pursuant
hereto shall be true in all material respects at and as of the Effective Time
(provided that representations made as of a specific date shall be required to
be true as of such date only) as if made at and as of such time and the Company
shall have received a certificate signed by an executive officer of MergerSub
to the foregoing effect.
(b) The Board of Directors shall have received an opinion,
addressed and reasonably satisfactory to it, from an independent advisor
confirming the belief of MergerSub set forth in the second to last sentence of
Section 4.07.
ARTICLE 9
Termination
Section 9.01. Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company):
(a) by mutual written consent of the Company on the one hand and
MergerSub on the other hand;
(b) by either the Company or MergerSub, if the Merger has not been
consummated by September 30, 1998, provided that the party seeking to exercise
such right is not then in breach in any material respect of any of its
obligations under this Agreement;
(c) by either the Company or MergerSub, if MergerSub (in the case
of termination by the Company), or the Company (in the case of termination by
MergerSub) shall have breached in any material respect any of its obligations
under this Agreement or any representation and warranty of MergerSub (in the
case of termination by the Company) or the Company (in the case of termination
by MergerSub) shall have been incorrect in any material respect when made or
at any time prior to the Effective Time (unless such breach or failure to be
correct shall be capable of correction and, in such case, the breaching party
shall promptly effect such correction);
(d) by either the Company or MergerSub, if there shall be any law
or regulation that makes consummation of the Merger illegal or otherwise
prohibited or if any judgment, injunction, order or decree enjoining MergerSub
or the Company from consummating the Merger is entered and such judgment,
injunction, order or decree shall become final and nonappealable;
(e) by MergerSub if the Board of Directors shall have withdrawn or
modified or amended, in a manner adverse to MergerSub, its approval or
recommendation of this Agreement and the Mergers or its recommendation that
stockholders of the Company adopt and approve this Agreement and the Mergers,
or approved, recommended or endorsed any proposal for a transaction other than
the Mergers (including a tender or exchange offer for Shares) or if the
Company has failed to call the Company Stockholders Meeting or failed as
promptly as practicable after the Registration Statement is declared effective
by the SEC to mail the Company Proxy Statement to its stockholders or failed
to include in such statement the recommendation referred to above;
(f) by the Company if prior to the Effective Time the Board of
Directors shall have withdrawn or modified or amended, in a manner adverse to
MergerSub, its approval or recommendation of this Agreement and the Mergers or
its recommendation that stockholders of the Company adopt and approve this
Agreement and the Mergers in order to permit the Company to execute a
definitive agreement providing for the acquisition of the Company or in order
to approve a tender or exchange offer for any or all of the Shares, in either
case, that is determined by the Board of Directors to be on terms more
favorable from a financial point of view to the Company's stockholders than
the Mergers, provided that the Company shall be in compliance with Section
5.04; and
(g) by either the Company or MergerSub if, at a duly held
stockholders meeting of the Company or any adjournment thereof at which this
Agreement and the Mergers are voted upon, the requisite stockholder adoption
and approval shall not have been obtained.
The party desiring to terminate this Agreement pursuant to
Sections 9.01(b)-(g) shall give written notice of such termination to the
other party in accordance with Section 10.01.
Section 9.02. Effect of Termination. If this Agreement is
terminated pursuant to Section 9.01, this Agreement shall become void and of no
effect with no liability on the part of any party hereto, except that the
agreements contained in clause (i) of Section 5.03, Sections 5.04(b)-(e) and
10.04 shall survive the termination hereof. Notwithstanding the foregoing,
nothing in this Section 9.02 shall relieve any party to this Agreement of
liability for a breach of any of its covenants or agreements contained in this
Agreement.
ARTICLE 10
Miscellaneous
Section 10.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to MergerSub, to:
▇▇▇▇▇▇▇▇ ▇▇▇▇
(C)/(O) DLJ Merchant Banking II, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company, to:
General Counsel
Insilco Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Fried, Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section 10.01 and the appropriate telecopy confirmation is received or (b) if
given by any other means, when delivered at the address specified in this
Section 10.01.
Section 10.02. Survival of Representations and Warranties. The
representations and warranties contained herein and in any certificate or other
writing delivered pursuant hereto shall not survive the Effective Time.
Section 10.03. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by Insilco, ExistingSub and MergerSub or in the case of a waiver,
by the party against whom the waiver is to be effective; provided that after
the adoption of this Agreement and the Mergers by the stockholders of the
Company, no such amendment or waiver shall, without the further approval of
such stockholders, alter or change the amount or kind of consideration to be
received in exchange for ExistingSub Shares, any term of the certificate of
incorporation of the Surviving Corporation or any of the terms or conditions of
this Agreement if such alteration or change would adversely affect the holders
of any ExistingSub Shares.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights
or remedies provided by law.
Section 10.04. Expenses. Except as provided in Section 5.04,
all costs and expenses incurred in connection with this Agreement shall be
paid by the party incurring such cost or expense. Notwithstanding anything
herein to the contrary, including without limitation, Sections 7.01 and 7.02,
prior to the Effective Time, neither the Company nor ExistingSub shall be
required to execute any document unless it would have no liability or
obligation thereunder or with respect thereto in the event the transactions
contemplated hereby are not consummated.
Section 10.05. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto, except that
MergerSub may make such an assignment to any wholly owned subsidiary without
such consent.
Section 10.06. Governing Law. This Agreement shall be
construed in accordance with and governed by the internal laws of the State of
Delaware.
Section 10.07. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Section 10.08. Third Party Beneficiaries. Except for Section
6.02, no provision of this Agreement is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder.
Section 10.09. Entire Agreement. Except for the Confidentiality
Agreement and the Voting Agreement, this Agreement and the exhibits and
schedules attached hereto and thereto constitute the entire agreement between
the parties with respect to the subject matter of this Agreement and supersede
all prior agreements and understandings, both oral and written, between the
parties with respect to the subject matter of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
INSILCO CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President, Chief Executive
Officer and Director
INR HOLDING CO.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and
General Counsel
SILKWORM ACQUISITION CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice Presidnet and Secretary
EXHIBIT A
FIRST: The name of the Corporation is Insilco Holding
Corporation.
SECOND: The address of its registered office in the State of
Delaware is ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The name of its
registered agent at such address is Corporation Service Company.
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 as the same exists or may
hereafter be amended ("Delaware Law").
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 15,000,000, consisting of
15,000,000 shares of Common Stock, par value $0.001 per share.
FIFTH: The Board of Directors shall have the power to adopt,
amend or repeal the bylaws of the Corporation.
SIXTH: Election of directors need not be by written ballot
unless the bylaws of the Corporation so provide.
SEVENTH: (1) A director of the Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director to the fullest extent permitted by Delaware Law.
(2) (a) Each person (and the heirs, executors or administrators of
such person) who was or is a party or is threatened to be made a party to, or
is involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person is or was a director or officer of the Corporation or is or
was serving at the request of the Corporation as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
shall be indemnified and held harmless by the Corporation to the fullest extent
permitted by Delaware Law. The right to indemnification conferred in this
ARTICLE SEVENTH shall also include the right to be paid by the Corporation the
expenses incurred in connection with any such proceeding in advance of its
final disposition to the fullest extent authorized by Delaware Law. The right
to indemnification conferred in this ARTICLE SEVENTH shall be a contract
right.
(b) The Corporation may, by action of its Board of Directors,
provide indemnification to such of the officers, employees and agents of the
Corporation to such extent and to such effect as the Board of Directors shall
determine to be appropriate and authorized by Delaware Law.
(3) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss incurred by such person in any such capacity or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under Delaware Law,
(4) The rights and authority conferred in this ARTICLE SEVENTH
shall not be exclusive of any other right which any person may otherwise have
or hereafter acquire.
(5) Neither the amendment nor repeal of this ARTICLE SEVENTH, nor
the adoption of any provision of this Certificate of Incorporation or bylaws
of the Corporation, nor, to the fullest extent permitted by Delaware Law, any
modification of law, shall eliminate or reduce the effect of this ARTICLE
SEVENTH in respect of any acts or omissions occurring prior to such amendment,
repeal, adoption or modification.
EIGHTH: The Corporation reserves the right to amend this
Certificate of Incorporation in any manner permitted by Delaware Law and, with
the sole exception of those rights and powers conferred under the above ARTICLE
SEVENTH, all rights and powers conferred herein on stockholders, directors and
officers, if any, are subject to this reserved power.