Exhibit 1.1
EXECUTION COPY
-------------------------------------------------------------------------------
WARRANT
REGISTRATION RIGHTS AGREEMENT
INSILCO HOLDING CO.
--------------------------------------------------------------
Warrants to Purchase 62,400 Shares of Common Stock
--------------------------------------------------------------
Dated as of November 9, 1998
--------------------------------------------------------------
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
------------------------------------------------------------------------------
This Warrant Registration Rights Agreement (this "Agreement") is made
and entered into as of November 9, 1998, by and among Insilco Holding Co., a
Delaware corporation (the "Issuer"), and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation (the "Initial Purchaser"), which has agreed to purchase the Warrants
of the Issuer issued pursuant to the Warrant Agreement (the "Warrant Agreement")
between the Issuer and National City Bank, as warrant agent (the "Warrant
Agent").
The Warrants are being issued and sold in connection with the offering
by Insilco Corporation, a wholly owned subsidiary of the Issuer ("Insilco") of
120,000 Units each consisting of (i) $1,000 principal amount at maturity of 12%
Senior Subordinated Notes due 2007 (the "Notes") of Insilco and (ii) one
Warrant.
This Agreement is made pursuant to the Purchase Agreement, dated
November 2, 1998 (the "Purchase Agreement"), by and between the Issuer, Insilco
and the Initial Purchaser. In order to induce the Initial Purchaser to purchase
the Warrants, the Issuer has agreed to provide the registration rights set forth
in this Agreement. The execution and delivery of this Agreement is a condition
to the obligations of the Initial Purchaser set forth in Section 9 of the
Purchase Agreement. Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to them in the Warrant Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144.
Black Out Notice: As defined in Section 4(b) hereof.
Black Out Period: As defined in Section 3(a) hereof.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expiration Date: 5:00 p.m. New York City time on August 15, 2007.
Holders: As defined in Section 2 hereof.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments thereto,
including post-effective amendments, and all
2
material incorporated by reference into such Prospectus.
Registration Statement: Any registration statement of the Issuer
relating to the registration for resale of Transfer Restricted Securities that
is filed pursuant to the provisions of this Agreement and including the
Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by
reference therein.
Rule 144: Rule 144 promulgated under the Act.
Transfer Restricted Securities: (a) Each Warrant and Warrant Share held
by an Affiliate of the Issuer and (b) each other Warrant and Warrant Share until
the earlier to occur of (i) the date on which such Warrant or Warrant Share has
been disposed of in accordance with a Registration Statement or the date on
which such Warrant Share is issued upon exercise of a Warrant in accordance with
a registration statement filed under the Act and (ii) the date on which such
Warrant or Warrant Share is distributed to the public pursuant to Rule 144 under
the Act.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person is (i) the holder of record of any
definitive certificated security which are Transfer Restricted Securities or
(ii) a beneficial holder of any global security which are Transfer Restricted
Securities.
SECTION 3. SHELF REGISTRATION
(a) Shelf Registration. The Issuer shall prepare and cause to be filed
with the Commission on or before 120 days from the Closing Date pursuant to Rule
415 under the Securities Act a Registration Statement on the appropriate form
relating to resales of Transfer Restricted Securities by the Holders thereof.
The Company shall use its reasonable best efforts to cause the Registration
Statement to be declared effective by the Commission on or before 150 days after
the Closing Date.
To the extent necessary to ensure that the Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 3(a), the Issuer shall use its
reasonable best efforts to keep any Registration Statement required by this
Section 3(a) continuously effective, supplemented, amended and current as
required by and subject to the provisions of Section 4(a) hereof and in
conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, until
the earlier of (i) two years following the first date as of which no Warrants
remain outstanding and (ii) if all of the Warrants expire unexercised, the
expiration of the Warrants; provided that such obligation shall expire before
such date if the Issuer delivers to the Warrant Agent a written opinion of
counsel to the Issuer (which opinion of counsel shall be satisfactory to the
Issuer) that all Holders (other than Affiliates of the Issuer) of Warrants and
Warrant Shares may resell the Warrants and the Warrant Shares without
registration under the Act and without restriction as to the manner, timing or
volume of any such sale and instruct the Warrant Agent to remove the Private
Placement Legend from all Warrants and Warrant shares; and provided, further,
that notwithstanding the foregoing, any Affiliate of the Issuer may, with notice
to the Issuer, require the Issuer to keep the Registration Statement
continuously effective for resales by such Affiliate for so long as such
Affiliate holds
3
Warrants or Warrant Shares, including as a result of any market-making
activities or other trading activities of such Affiliate. Notwithstanding the
foregoing, the Issuer shall not be required to amend or supplement the
Registration Statement, any related prospectus or any document incorporated
therein by reference, for a period (a "Black Out Period") not to exceed, for so
long as this Agreement is in effect, an aggregate of 60 days in any calendar
year, in the event that (i) an event occurs and is continuing as a result of
which the Registration Statement, any related prospectus or any document
incorporated therein by reference as then amended or supplemented would, in the
Issuer's good faith judgment, contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and (ii)(A) the Issuer determines in its good faith judgment that the disclosure
of such event at such time would have a material adverse effect on the business,
operations or prospects of the Issuer or (B) the disclosure otherwise relates to
a material business transaction which has not yet been publicly disclosed;
provided that such Black Out Period shall be extended for any period, not to
exceed an aggregate of 30 days in any calendar year, during which the Commission
is reviewing any proposed amendment or supplement to the Registration Statement,
any related prospectus or any document incorporated therein by reference which
has been filed by the Issuer; and provided, further, that no Black Out Period
may be in effect during the three months prior to the Expiration Date.
(b) Provision by Holders of Certain Information in Connection with the
Registration Statement. No Holder of Transfer Restricted Securities may include
any of its Transfer Restricted Securities in any Registration Statement pursuant
to this Agreement unless and until such Holder furnishes to the Issuer in
writing, within 20 days after receipt of a request therefor, the information
specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for
use in connection with any Registration Statement or Prospectus or preliminary
Prospectus included therein. Each selling Holder agrees to promptly furnish
additional information required to be disclosed in order to make the information
previously furnished to the Issuer by such Holder not materially misleading.
SECTION 4. REGISTRATION PROCEDURES
(a) In connection with the Registration Statement and any related
Prospectus required by this Agreement, the Issuer shall:
(i) use its reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities
being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the
Issuer pursuant to Section 3(b) hereof), and pursuant thereto the
Issuer will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under
the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods
of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof;
(ii) use its reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 of this Agreement.
Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue
statement of material fact or omit to state any material fact necessary
to make the statements therein, in the light
4
of the circumstances under which they were made, not misleading or (B)
not to be effective and usable for resale of Transfer Restricted
Securities during the period required by this Agreement, the Issuer
shall, subject to Section 3(a), file promptly an appropriate amendment
to such Registration Statement or a supplement to the Prospectus, as
applicable, curing such defect, and, in the case of an amendment, use
its reasonable best efforts to cause such amendment to be declared
effective as soon as practicable;
(iii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule<-1- 95>424 under the Act, and
to comply fully with Rules 424, 430A and 462, as applicable, under the
Act in a timely manner; and comply with the provisions of the Act with
respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iv) advise the Initial Purchaser promptly and, if requested
by the Initial Purchaser, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any applicable Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, and (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Issuer shall use its
reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(v) subject to Section 4(a)(ii), if any fact or event
contemplated by Section 4(a)(iv)(D) hereof shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the
5
statements therein, in the light of the circumstances under which they
were made, not misleading;
(vi) furnish to the Initial Purchaser, before filing with the
Commission, copies of any Registration Statement or any Prospectus
included therein or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment
of such Persons, if any, for a period of at least five Business Days,
and the Issuer will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (including all such documents incorporated by
reference) to which the Initial Purchaser shall reasonably object
within five Business Days after the receipt thereof. The Initial
Purchaser shall be deemed to have reasonably objected to such filing if
such Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading or fails to comply with the applicable
requirements of the Act;
(vii) promptly prior to the filing of any document that is to
be incorporated by reference into a Registration Statement or
Prospectus, provide copies of such document to the Initial Purchaser,
make the Issuer's representatives available for discussion of such
document and other customary due diligence matters, and include such
information in such document prior to the filing thereof as the Initial
Purchaser may reasonably request;
(viii) make available, at reasonable times, for inspection by
the Initial Purchaser and any attorney or accountant retained by the
Initial Purchaser, all financial and other records, pertinent corporate
documents of the Issuer and cause the Issuer's officers, directors and
employees to supply all information reasonably requested by the Initial
Purchaser, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the
filing thereof and prior to its effectiveness;
(ix) if requested by the Initial Purchaser, promptly include
in any Registration Statement or Prospectus, pursuant to a supplement
or post-effective amendment if necessary, such information as the
Initial Purchaser may reasonably request to have included therein,
including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities and the use of the
Registration Statement or Prospectus for market-making activities; and
make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Issuer is
notified of the matters to be included in such Prospectus supplement or
post-effective amendment;
(x) furnish to the Initial Purchaser and each Holder upon
request, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and
all exhibits (including exhibits incorporated therein by reference);
(xi) deliver to the Initial Purchaser and each Holder, without
charge, as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement
6
thereto as the Initial Purchaser or such Holder reasonably may request;
the Issuer hereby consents to the use (in accordance with law and
subject to Section 4(d) hereof) of the Prospectus and any amendment or
supplement thereto by each selling Person in connection with the
offering and the sale of the Transfer Restricted Securities covered by
the Prospectus or any amendment or supplement thereto and all
market-making activities of the Initial Purchaser, as the case may be;
(xii) upon the request of the Initial Purchaser, enter into
such agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be
reasonably requested by the Initial Purchaser in connection with any
sale or resale pursuant to any applicable Registration Statement. In
such connection, the Issuer shall:
(A) upon request of the Initial Purchaser, furnish
(or in the case of paragraphs (2) and (3), use its reasonable
best efforts to cause to be furnished) to the Initial
Purchaser, upon the effectiveness of the Registration
Statement:
(1) a certificate, dated such date, signed
on behalf of the Issuer by (x) the President or any
Vice President and (y) a principal financial or
accounting officer of the Issuer, confirming, as of
the date thereof, the matters set forth in Sections
6(cc), 9(a) and 9(b) of the Purchase Agreement and
such other similar matters as such Person may
reasonably request;
(2) an opinion, dated the date of
effectiveness of the Registration Statement, of
counsel for the Issuer covering matters similar to
those set forth in Sections 9(e) and (f) of the
Purchase Agreement and such other matters as the
Initial Purchaser may reasonably request, and in any
event including a statement to the effect that such
counsel has participated in conferences with officers
and other representatives of the Issuer,
representatives of the independent public accountants
for the Issuer and have considered the matters
required to be stated therein and the statements
contained therein, although such counsel has not
independently verified the accuracy, completeness or
fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying
as to materiality to the extent such counsel deems
appropriate upon the statements of officers and other
representatives of the Issuer) and without
independent check or verification), no facts came to
such counsel's attention that caused such counsel to
believe that the applicable Registration Statement,
at the time such Registration Statement or any
post-effective amendment thereto became effective
contained an untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary to make the statements
therein not misleading, or that the Prospectus
contained in such Registration Statement as of its
date contained an untrue statement of a material fact
or omitted to state a material fact necessary in
order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading. Without
7
limiting the foregoing, such counsel may state
further that such counsel assumes no responsibility
for, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial
data included in any Registration Statement
contemplated by this Agreement or the related
Prospectus; and
(3) a customary comfort letter, dated the
date of effectiveness of the Registration Statement,
from the Issuer's independent accountants, in the
customary form and covering matters of the type
customarily covered in comfort letters to
underwriters in connection with underwritten
offerings, and affirming the matters set forth in the
comfort letters delivered pursuant to Section 9(h) of
the Purchase Agreement; and
(B) deliver such other documents and certificates as
may be reasonably requested by the Initial Purchaser to
evidence compliance with the matters covered in clause (A)
above and with any customary conditions contained in any
agreement entered into by the Issuer pursuant to this clause;
(xiii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may request and do any and all
other acts or things necessary or advisable to enable the disposition
in such jurisdictions of the Transfer Restricted Securities covered by
the applicable Registration Statement; provided that the Issuer shall
not be required to register or qualify as a foreign corporation where
it is not now so qualified or to take any action that would subject it
to the service of process in suits or to taxation, other than as to
matters and transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xiv) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends; and to register such Transfer Restricted Securities in such
denominations and such names as the selling Holders may request at
least two Business Days prior to such sale of Transfer Restricted
Securities;
(xv) use its reasonable best efforts to cause the disposition
of the Transfer Restricted Securities covered by the Registration
Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Transfer
Restricted Securities, subject to the proviso contained in clause
(xiii) above;
8
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Warrant Agent with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with The Depository
Trust Company;
(xvii) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in Rule 158(c) under the Act); and
(xviii) provide promptly to the Initial Purchaser, upon
request, each document filed with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange Act.
(b) Restrictions on Holders. Each Holder agrees by acquisition of a
Transfer Restricted Security and the Initial Purchaser agrees that, upon receipt
of the notice from the Issuer of the commencement of a Black Out Period (in each
case, a "Black Out Notice"), such Person will forthwith discontinue disposition
of Transfer Restricted Securities pursuant to the applicable Registration
Statement until such Person is advised in writing by the Issuer of the
termination of the Black Out Period. Each Person receiving a Black Out Notice
hereby agrees that it will either (i) destroy any Prospectuses, other than
permanent file copies, then in such Person's possession which have been replaced
by the Issuer with more recently dated Prospectuses or (ii) deliver to the
Issuer (at the Issuer's expense) all copies, other than permanent file copies,
then in such Person's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the Black Out
Notice.
SECTION 5. REGISTRATION EXPENSES
All expenses incident to the Issuer's performance of or compliance with
this Agreement will be borne by the Issuer, regardless of whether a Registration
Statement becomes effective, including, without limitation: (i) all registration
and filing fees and expenses; (ii) all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including printing Prospectuses (whether for sales, market-making or
otherwise), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Issuer; (v) all application and filing fees in
connection with listing the Warrant Shares on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the Issuer
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Issuer will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Issuer.
9
SECTION 6. INDEMNIFICATION
(a) The Issuer agrees to indemnify and hold harmless each Holder, its
directors, officers and each Person, if any, who controls such Holder (within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from
and against any and all losses, claims, damages, liabilities, judgments,
(including, without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Issuer to any Holder or
any prospective purchaser of Transfer Restricted Securities, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by an untrue statement or omission or alleged untrue statement or
omission that is based upon information relating to a Holder furnished in
writing to the Issuer by such Holder.
(b) Each Holder of Transfer Restricted Securities agrees, severally and
not jointly, to indemnify and hold harmless the Issuer, its directors and
officers, and each person, if any, who controls (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act) the Issuer, to the same extent
as the foregoing indemnity from the Issuer set forth in Section 6(a) hereof, but
only with reference to information relating to such Holder furnished in writing
to the Issuer by such Holder expressly for use in any Registration Statement. In
no event shall any Holder, its directors, officers or any Person who controls
such Holder be liable or responsible for any amount in excess of the amount by
which the total amount received by such Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
Person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 6(a) or 6(b) (the
"indemnified party"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "indemnifying party") in writing,
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that,
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 6(a) and 6(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 6(c), but may employ separate
counsel and participate in the defense thereof, but the fees and expenses of
such counsel, except as provided below, shall be at the expense of the Holder).
Any indemnified party shall have the right to employ separate counsel in any
such action and participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of the indemnified party, unless (i) the
employment of such counsel shall have been specifically authorized in writing by
the indemnifying party, (ii) the indemnifying party shall have failed to assume
the defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more
10
legal defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by a majority of the Holders, in the case of
the parties indemnified pursuant to Section 6(a), and by the Issuer, in the case
of parties indemnified pursuant to Section 6(b). The indemnifying party shall
indemnify and hold harmless the indemnified party from and against any and all
losses, claims, damages, liabilities and judgments by reason of any settlement
of any action effected with its written consent. Notwithstanding the foregoing,
in the case of Section 6(a) hereof, any such settlement may be effected by the
Initial Purchaser without the Issuer's written consent if the settlement is
entered into more than twenty Business Days after the Issuer shall have received
a request from the Initial Purchaser for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
Issuer) and, prior to the date of such settlement, the Issuer shall have failed
to comply with such reimbursement request. In the case of Section 6(a) hereof,
the Issuer shall not, without the prior written consent of the Initial
Purchaser, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party. Notwithstanding the foregoing, in
the case of Section 6(b) hereof, any such settlement may be effected by the
indemnified party without the indemnifying party's written consent if the
settlement is entered into more than twenty Business Days after the indemnifying
party shall have received a request from the indemnified party for reimbursement
for the fees and expenses of counsel (in any case where such fees and expenses
are at the expense of the Indemnified party) and, prior to the date of such
settlement, the indemnifying party shall have failed to comply with such
reimbursement request. In the case of Section 6(b) hereof, the indemnifying
party shall not, without the prior written consent of the indemnified party,
effect any settlement or compromise of, or consent to the entry of judgment with
respect to, any pending or threatened action in respect of which the indemnified
party is or could have been a party and indemnity or contribution may be or
could have been sought hereunder by the indemnified party, unless such
settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability on claims that are or could have been the
subject matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in this Section
6 is unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuer, on the one
hand, and the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 6(d)(i) is not permitted
11
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause 6(d)(i) hereof but also the relative
fault of the Issuer, on the one hand, and of the Holder, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Issuer, on the one hand, and
of the Holder, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Issuer, on the one hand, or by the Holder, on the
other hand, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 6(a),
any legal or other fees or expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages, liabilities
or judgments.
The Issuer and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 6, no Holder, its directors, its
officers or any Person, if any, who controls such Holder shall be required to
contribute, in the aggregate, any amount in excess of the amount by which the
total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by
such Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Holders' obligations to contribute
pursuant to this Section 6(d) are several in proportion to the respective
principal amount of Transfer Restricted Securities held by each Holder hereunder
and not joint.
(e) The Issuer agrees that the indemnity and contribution provisions of
this Section 6 shall apply to the Initial Purchaser to the same extent, on the
same conditions, as it applies to Holders.
SECTION 7. RULE 144
The Issuer agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the
Issuer is subject to Section 13 or 15(d) of the Exchange Act, to make all
filings required thereby in a timely manner in order to permit resales of such
Transfer Restricted Securities pursuant to Rule 144.
SECTION 8. MISCELLANEOUS
(a) Remedies. The Issuer acknowledges and agrees that any failure by
the Issuer to comply with its obligations under Section 3 hereof may result in
material irreparable injury to the Initial Purchaser or the Holders for which
there is no adequate remedy at law, that it will not be possible
12
to measure damages for such injuries precisely and that, in the event of any
such failure, the Initial Purchaser or any Holder may obtain such relief as may
be required to specifically enforce the Issuer's obligations under Section 3
hereof. The Issuer further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Issuer will not, on or after the
date of this Agreement, enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuer's securities under any agreement
in effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless (i) in the case of this Section
8(c)(i), the Issuer has obtained the written consent of Holders of all
outstanding Transfer Restricted Securities, and (ii) in the case of all other
provisions hereof, the Issuer has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer Restricted Securities
(excluding Transfer Restricted Securities held by the Issuer or its Affiliates);
provided that this Agreement may be amended without the consent of any Holder
pursuant to Section 11(l) of the Warrant Agreement.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements granting rights to Holders made hereunder
between the Issuer, on the one hand, and the Initial Purchaser, on the other
hand, and shall have the right to enforce such agreements directly to the extent
they may deem such enforcement necessary or advisable to protect its rights or
the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Warrant Agent, with a copy to the Warrant Agent; and
(ii) if to the Issuer:
Insilco Holding Co.
000 Xxxxx Xxxxx X.
Xxx 0000
Xxxxxx, Xxxx 00000
Attention: Xxxxxxx Xxxx, Esq.
With a copy to:
00
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next Business Day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Warrant Agent at the
address specified in Warrant Agreement.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including, without limitation, and without the need for an express assignment,
subsequent Holders; provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Transfer Restricted Securities in
violation of the terms hereof or of the Purchase Agreement or the Warrant
Agreement. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such
Transfer Restricted Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Transfer Restricted Securities such
Person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such Person shall be entitled to receive the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted with respect to the Transfer
Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
INSILCO HOLDING CO.
By:______________________________________
Name:
Title:
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
By:______________________________________
Name:
Title:
