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EXHIBIT (c)(1)
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of July
10, 1997, by and between Insilco Corporation, a Delaware corporation (the
"Company"), and Water Street Corporate Recovery Fund I, L.P., a Delaware
limited partnership ("Water Street").
WHEREAS, the Company desires to purchase up to 5,714,284
shares of Common Stock, par value $.001, of the Company (the "Shares"),
constituting 59.7% of the outstanding Shares;
WHEREAS, Water Street owns 5,802,494 Shares, constituting 60.6
% of the outstanding Shares;
WHEREAS, the Company intends, within one business day from the
date hereof, to commence a tender offer to purchase up to 2,857,142 Shares at a
purchase price of $38.50 per Share in cash in all material respects on the
terms of the draft Tender Offer Statement on Schedule 13E-4 delivered to Water
Street on the date hereof (the "Offer");
WHEREAS, the Company desires to purchase from Water Street and
Water Street desires to sell to the Company 2,805,194 Shares (the "Initial
Shares") at a purchase price of $38.50 per Share in cash pursuant to this
Agreement;
WHEREAS, on March 5, 1997, the Company sold its Rolodex office
products business (the "Rolodex Sale") for gross proceeds of $117 million;
WHEREAS, the Board of Directors of the Company adopted a plan
of partial liquidation with respect to a distribution of the proceeds of the
Rolodex Sale and filed a Form 966 with the Internal Revenue Service with
respect thereto; and
WHEREAS, immediately upon receipt of the proceeds of the
Rolodex Sale, the Company deposited $110 million of such proceeds (the "Rolodex
Proceeds") into a separate bank account, Link DDA Account, account no.
4072-3545, Citibank, New York (the "Link Account"), from which account the
Rolodex Proceeds were then deposited into CUSA FAO Insilco Corp. Cash
Collateral Custody Account, account no. 846-881, Citibank, Tampa (the "Rolodex
Proceeds Account").
WHEREAS, on the date hereof the Company has entered into an
agreement with Xxxxxx X. Xxxxxxx (the "Xxxxxxx Stock Purchase Agreement")
pursuant to which the Company is purchasing 51,948 Shares on substantially the
same terms and conditions as this Agreement.
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NOW, THEREFORE, in consideration of the foregoing and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE 1
PURCHASE AND SALE OF THE SHARES
Section 1.1. The Purchase. On the terms and subject to
the conditions of this Agreement, Water Street hereby sells, transfers and
conveys the Initial Shares to the Company, and the Company hereby purchases the
Initial Shares from Water Street, at a purchase price of $38.50 per Share for
an aggregate purchase price of $107,999,969 (the "Purchase Price"). Water
Street, concurrently with the execution hereof, is delivering to the Company
certificates representing the Initial Shares together with stock powers duly
executed in blank (the "Stock Powers").
Section 1.2. Payment. On the terms and subject to the
conditions of this Agreement, in consideration for the sale of the Initial
Shares, concurrently with the execution hereof the Company is paying the
Purchase Price to Water Street solely out of the Rolodex Proceeds by delivery
to Water Street of a cashiers check drawn on the Link Account payable to the
order of Water Street in the amount of $107,999,969.
ARTICLE 2
REPRESENTATIONS
Section 2.1. Representations of the Company. The Company
hereby represents and warrants to Water Street that:
(a) The Company has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby.
(b) The execution and delivery by the Company of this
Agreement, and the consummation by the Company of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action on the part
of the Company.
(c) This Agreement has been duly executed and delivered
by the Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
(d) At all times prior to the payment of the Purchase
Price referred to in Section 1.2, both the Rolodex Proceeds Account and the
Link Account contained only the Rolodex Proceeds and interest earned thereon
that had not yet been withdrawn by the Company. No distributions have been
made out of the Rolodex Proceeds Account other than to the Link Account, and no
distributions have been made out of the Link Account other than (i) pursuant to
this Agreement or the Xxxxxxx Stock Purchase
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Agreement, or (ii) to withdraw from time to time the interest earned on the
Rolodex Proceeds. The Purchase Price is being paid solely out of the Rolodex
Proceeds.
(e) The Company intends to commence the Offer on the
business day immediately following the date hereof.
Section 2.2. Representations of Water Street. Water
Street hereby represents and warrants to the Company that:
(a) Water Street has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby.
(b) The execution and delivery by Water Street of this
Agreement, and the consummation by Water Street of the transactions
contemplated hereby, have been duly authorized by all necessary partnership
action on the part of Water Street.
(c) This Agreement has been duly executed and delivered
by Water Street and constitutes a valid and binding obligation of Water Street
enforceable against Water Street in accordance with its terms.
(d) Water Street owns the Initial Shares, and is
conveying the Initial Shares to the Company, free and clear of any lien,
pledge, security interest or other encumbrance whatsoever (collectively,
"Liens").
(e) Water Street does not currently intend to sell,
transfer, assign, pledge, distribute or otherwise dispose of any of the Shares
beneficially owned by it on the date hereof, other than pursuant to this
Agreement or the Offer.
ARTICLE 3
COVENANTS
Section 3.1. Maintenance of Rolodex Proceeds. No later
than the next business day following the receipt thereof, Water Street shall
deposit the Purchase Price in a new account at Citibank, New York, account no.
00000000 (the "Water Street Account"), and shall maintain such funds, together
with all interest actually earned thereon, in the Water Street Account (and no
other money shall be deposited in such account) until the earlier of (x) the
first date on which the Company pays for Shares tendered in the Offer (the
"Payment Date") or (y) the date on which Water Street returns the Purchase
Price to the Company pursuant to Section 3.5(a).
Section 3.2. Offer; Agreement Not to Tender. (a) The
Offer shall be for not more than 2,857,142 Shares at a purchase price of $38.50
per Share and shall be in all material respects on the terms of the draft
Tender Offer Statement on Schedule 13E-4 delivered to Water Street on the date
hereof.
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(b) Water Street shall tender no more than 960,577 Shares
in the Offer.
(c) The Company shall not (i) accept for purchase or
purchase more than 2,857,142 Shares in the Offer (including in connection with
odd lot purchases), nor (ii) pay more than $38.50 per Share, nor (iii) extend
the Offer past 45 days from the date of its commencement, unless the Company
and Water Street shall first have entered into a written agreement amending
this Agreement with respect thereto.
Section 3.3. Interest Payment. If the Company purchases
Shares in the Offer, Water Street shall, on the Payment Date, pay to the
Company, by wire transfer of immediately available funds, all interest actually
earned on the Purchase Price from and including the date of its deposit in the
Water Street Account up to the Payment Date.
Section 3.4. Rescission. If the Offer expires or
terminates without any Shares having been purchased therein, the purchase and
sale of the Initial Shares pursuant to this Agreement shall automatically, and
without any further action by any party, be rescinded (the "Rescission"). The
Company shall promptly notify Water Street in writing of the Rescission.
Section 3.5. Effect of Rescission. If there is a
Rescission, then on the business day immediately following receipt by Water
Street of written notice of the Rescission:
(a) Water Street shall return to the Company the Purchase
Price, together with all interest actually earned thereon from and including
the date of its deposit in the Water Street Account up to the date of such
return, by wire transfer of immediately available funds from the Water Street
Account to the Link Account; and
(b) the Company shall return to Water Street the
certificates representing the Initial Shares, together with the Stock Powers,
free and clear of all Liens, other than Liens created by Water Street.
Section 3.6. Confirmation of Intent. Water Street will
confirm to the Company in writing immediately prior to the Company's acceptance
for payment of Shares in the Offer that it does not at that time have a current
intention to sell, transfer, assign, pledge, distribute or otherwise dispose of
any of the Shares beneficially owned by it on the date hereof (except for the
Initial Shares), other than pursuant to the Offer.
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ARTICLE 4
MISCELLANEOUS
Section 4.1. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State of New York
applicable to agreements made and to be performed wholly within such
jurisdiction.
Section 4.2. Severability. If any provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any adverse manner to
any party. Upon such determination that any provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner so that the transactions
contemplated hereby are fulfilled to the greatest extent possible.
Section 4.3. Counterparts; Facsimile Signatures. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute but one
and the same agreement. Delivery of a photocopy or transmission by telecopy of
a signed signature page of this Agreement shall constitute delivery of such
signed signature page.
Section 4.4. Notice. All notices and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been validly given, made or served on the date of
delivery, if delivered personally or by telecopier, or on the day after having
been sent by overnight courier, or seven days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, to the
other party to this Agreement at the following address or to such other address
as such party shall specify by notice to the other party:
(a) If to the Company, addressed to:
Insilco Corporation
000 Xxxxx Xxxxx X.
Xxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attention: Vice President and
General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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with a copy to
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(b) If to Water Street, addressed to:
Water Street Corporate Recovery Fund I, L.P.
c/o Goldman Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Section 4.5. Exclusive Agreement. This Agreement
constitutes the sole understanding of the parties with respect to the subject
matter hereof and any verbal or written communication between the parties prior
to the adoption of this Agreement shall be deemed merged herein and of no
further force or effect.
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IN WITNESS WHEREOF, the parties have executed this Agreement
and caused the same to be duly delivered on their behalf as of the day and year
first written above.
INSILCO CORPORATION
By: /s/ Xxxxxxx X. Xxxx
____________________________________
Name: Xxxxxxx X. Xxxx
Title: Vice President
WATER STREET RECOVERY FUND I, L.P.
By: XXXXXXX, XXXXX & CO., its General Partner
By: /s/ Xxxxxxx X. X'Xxxxx
____________________________________
Name: Xxxxxxx X. X'Xxxxx
Title: Managing Director
