-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UZovAUreERv+Nu85EvKc093krHZwQRQuKcMeePavUtK/rJ8hVA8l4y5z5TD2S2y3 5avv2u2FxIvUi533hnWyMw== 0000898822-97-000653.txt : 19970717 0000898822-97-000653.hdr.sgml : 19970717 ACCESSION NUMBER: 0000898822-97-000653 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970716 SROS: NONE GROUP MEMBERS: GOLDMAN SACHS GROUP LP GROUP MEMBERS: GOLDMAN, SACHS & CO. GROUP MEMBERS: WATER STREET CORPORATE RECOVERY FUND I, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INSILCO CORP/DE/ CENTRAL INDEX KEY: 0000863204 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 060635844 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44625 FILM NUMBER: 97641626 BUSINESS ADDRESS: STREET 1: 425 METRO PL N STE 500 CITY: DUBLIN STATE: OH ZIP: 43017 BUSINESS PHONE: 6147920468 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP LP CENTRAL INDEX KEY: 0000904571 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133501777 STATE OF INCORPORATION: NY FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD STREET CITY: NEW YORK STATE: NY ZIP: 10004 SC 13D/A 1 SCHEDULE 13D AMENDMENT NO. 5 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 5) Insilco Corporation (Name of Issuer) Common Stock (Par Value $.001 Per Share) (Title of Class of Securities) 457659704 (CUSIP Number) David J. Greenwald, Esq. Goldman, Sachs & Co. 85 Broad Street New York, NY 10004 (212) 902-1000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) July 10, 1997 (Date of Event Which Requires Filing of This Statement) If the filing person has previously filed a statement on Sched- ule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d- 1(b)(3) or (4), check the following box: / / ___________________ CUSIP NO. 457659704 ___________________ 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Water Street Corporate Recovery Fund I, L.P. 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / / 3. SEC USE ONLY 4. SOURCE OF FUNDS OO; WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) / / 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware Number of 7. SOLE VOTING POWER Shares -0- Beneficially Owned By 8. SHARED VOTING POWER Each 3,061,300 Reporting Person With 9. SOLE DISPOSITIVE POWER -0- 10. SHARED DISPOSITIVE POWER 3,061,300 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,061,300 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 45.2% 14. TYPE OF REPORTING PERSON PN PAGE 2 OF 15 PAGES ___________________ CUSIP NO. 457659704 ___________________ 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Goldman Sachs Group, L.P. 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / / 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) / / 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware Number of 7. SOLE VOTING POWER Shares 334 Beneficially Owned By 8. SHARED VOTING POWER Each 3,061,300 Reporting Person With 9. SOLE DISPOSITIVE POWER 334 10. SHARED DISPOSITIVE POWER 3,061,300 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,061,634 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 45.2% 14. TYPE OF REPORTING PERSON HC; PN PAGE 3 OF 15 PAGES ___________________ CUSIP NO. 457659704 ___________________ 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Goldman, Sachs & Co. 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / / (b) / / 3. SEC USE ONLY 4. SOURCE OF FUNDS WC 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) /x/ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware Number of 7. SOLE VOTING POWER Shares -0- Beneficially Owned By 8. SHARED VOTING POWER Each 3,061,300 Reporting Person With 9. SOLE DISPOSITIVE POWER -0- 10. SHARED DISPOSITIVE POWER 3,061,300 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,061,300 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / / 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 45.2% 14. TYPE OF REPORTING PERSON BD; PN; IA PAGE 4 OF 15 PAGES AMENDMENT NO. 5 TO SCHEDULE 13D RELATING TO THE COMMON STOCK OF INSILCO CORPORATION Water Street Corporate Recovery Fund I, L.P. ("Water Street"), Goldman, Sachs & Co. ("Goldman Sachs") and The Goldman Sachs Group, L.P. ("GS Group" and, collectively with Water Street and Goldman Sachs, the "Reporting Persons")* here- by file this Amendment No. 5 (this "Amendment No. 5") to the statement on Schedule 13D filed with respect to the Common Stock, par value $.001 per share (the "Common Stock"), of Insilco Corporation, a Delaware corporation (the "Company"), as most recently amended by Amendment No. 4 thereto dated August 12, 1996 (as amended, the "Schedule 13D"). Unless otherwise indicated, all capitalized terms not otherwise defined herein shall have the same meanings as those set forth in the Schedule 13D. This Amendment No. 5 is being filed to report a decrease in the number and the percentage of the outstanding shares of Common Stock beneficially owned by the Reporting Per- sons, which change resulted from the sale of 2,805,194 shares of Common Stock by Water Street to the Company pursuant to a Stock Purchase Agreement, dated as of July 10, 1997 (the "Water Street Purchase Agreement"), and has otherwise been affected by the vesting of 16,000 options issued pursuant to the Company's nonemployee director stock incentive plan and certain stock issuances by the Company. ITEM 2. IDENTITY AND BACKGROUND. Item 2 is hereby amended and restated as follows: Water Street, a Delaware limited partnership, is engaged in the business of buying and selling securities of entities that (i) are in bankruptcy (or other forms of legal _____________________ * Neither the present filing nor anything contained herein shall be construed as an admission that Water Street, Goldman Sachs or GS Group constitute a "person" for any purpose other than Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or that Water Street, Goldman Sachs and GS Group constitute a "group" for any purpose. PAGE 5 OF 15 PAGES reorganization) or have defaulted in the payment of any indebt- edness for borrowed money or (ii) have outstanding debt securi- ties meeting certain yield requirements. Goldman Sachs is the sole general partner of Water Street. Pursuant to the terms of its partnership agreement, Water Street's partnership term end- ed on June 15, 1997 and, therefore, Water Street is in the pro- cess of winding up. Water Street's partnership agreement pro- vides that, upon the expiration of its term, Goldman Sachs, as Water Street's sole general partner, will dispose of or dis- tribute all partnership assets, or the proceeds from the dispo- sition thereof, within one year, or June 15, 1998, although such one-year period may be extended with the consent of the holders of a majority of the partnership interests in Water Street. Goldman Sachs, a New York limited partnership, is an investment banking firm and a member of the New York Stock Exchange and other national exchanges. GS Group, one of the general partners of Goldman Sachs, owns a 99% interest in Goldman Sachs. GS Group is a Delaware limited partnership and a holding partnership that (directly or indirectly through sub- sidiaries or affiliated companies or both) is a leading invest- ment banking organization. The other general partner of Goldman Sachs is The Goldman, Sachs & Co. L.L.C., a Delaware limited liability company ("GS L.L.C."), which is a wholly owned subsidiary of GS Group and The Goldman Sachs Corporation, a Delaware corporation ("GS Corp."). GS Corp. is the sole gen- eral partner of GS Group. The principal business address of each of Goldman Sachs, GS Group, GS Corp., GS L.L.C. and Water Street is 85 Broad Street, New York, NY 10004. The name, business address, present principal occupa- tion or employment and citizenship of each director of GS Corp. and GS L.L.C. and of each member of the executive committees of GS Corp., GS L.L.C., GS Group and Goldman Sachs are set forth on Schedule I hereto and are incorporated herein by reference. During the last five years, none of the Reporting Persons, or to the knowledge of such Reporting Persons, any of the persons listed on Schedule I hereto, (i) has been convicted in a criminal proceeding (excluding traffic violations or simi- lar misdemeanors) or (ii) except as set forth on Schedule II hereto, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws. PAGE 6 OF 15 PAGES ITEM 4. PURPOSE OF TRANSACTION. Item 4 is hereby amended and restated as follows: The Company has announced that it has determined to (i) refinance its existing indebtedness, (ii) seek to issue up to $150 million of additional debt and (iii) effect a repur- chase of Common Stock in the amount of approximately $220 mil- lion (collectively, the "Transactions"). Pursuant to the Transactions, on July 10, 1997, the Company and Water Street entered into the Water Street Purchase Agreement, whereby the Company has acquired 2,805,194 shares of Common Stock from Water Street at $38.50 per share in cash for an aggregate pur- chase price of $107,999,969 (the "Purchase Price"). On July 11, 1997, the Company commenced a self-tender offer for up to 2,857,142 shares of Common Stock at a purchase price of $38.50 per share net in cash to selling stockholders (the "Offer"), pursuant to, and in accordance with the terms provided in, an Issuer Tender Offer Statement on Schedule 13E-4, including the Offer to Purchase, dated and filed with the Commission on July 11, 1997 (including all exhibits thereto, the "Tender Offer Statement"). Pursuant to the Water Street Purchase Agreement, Water Street has agreed to maintain the proceeds received by it from the sale, together with all interest actually earned thereon, in a segregated account and, upon consummation of the Offer by the Company, to pay to the Company the interest actu- ally earned thereon. In addition, Water Street and the Company have agreed in the Water Street Purchase Agreement that if the Offer expires or terminates without any shares having been purchased thereunder, the purchase of the 2,805,194 shares of Common Stock by the Company from Water Street pursuant to the Water Street Pur- chase Agreement will be rescinded (the "Rescission"). In the event of a Rescission, the purchase price (together with inter- est actually earned thereon) will be repaid to the Company and the Company will return to Water Street the 2,805,194 shares of Common Stock. In addition, pursuant to the Water Street Purchase Agreement, (x) Water Street has agreed, among other things, that it will not tender more than 960,577 shares of Common Stock in the Offer and (y) the Company has agreed, among other things, that it will not (i) accept for purchase or purchase more than 2,857,142 shares of Common Stock in the Offer, (ii) pay more than $38.50 per share or (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 agree- ment amending the Water Street Purchase Agreement. It is the PAGE 7 OF 15 PAGES current intention of Water Street to tender 960,577 shares of Common Stock in the Offer. Additionally, in the Water Street Purchase Agreement, Water Street represented, among other things, that, as of the date thereof, it did not currently intend to sell or otherwise dispose of any shares of Common Stock beneficially owned by it on the date thereof other than pursuant to the Water Street Purchase Agreement or the Offer, which intention Water Street has agreed to confirm to the Company immediately prior to the Company's acceptance for payment of the shares of Common Stock tendered pursuant to the Offer. The foregoing summary of the Water Street Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the text of the Water Street Purchase Agreement, which is filed as Exhibit 8 hereto. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. Item 5 is hereby amended and restated as follows: (a) As of the date hereof, Water Street beneficially owns an aggregate of 3,061,300 shares of Common Stock, includ- ing 64,000 shares of Common Stock issuable upon the exercise of options (32,000 shares at an exercise price of $17 per share and 32,000 shares at an exercise price of $30 per share). Such options were issued pursuant to the Company's nonemployee director stock incentive plan. Based upon the foregoing, Water Street beneficially owns approximately 45.2% of the Common Stock reported by the Company to be outstanding as of July 3, 1997 (as disclosed in the Company's Tender Offer Statement), less the shares of Common Stock repurchased by the Company pur- suant to the Water Street Purchase Agreement and the number of shares of Common Stock which, according to the Company's Tender Offer Statement, the Company repurchased from Robert L. Smialek, Chairman of the Board and President of the Company (the "Smialek Purchase"). As of the date hereof, GS Group owns an aggregate of 334 shares of Common Stock and, in addition, each of GS Group and Goldman Sachs may be deemed to be the beneficial owner of the 3,061,300 shares of Common Stock, including the 64,000 shares of Common Stock issuable upon the exercise of options, owned by Water Street, representing in the aggregate approxi- mately 45.2% of the outstanding Common Stock. Each of GS Group and Goldman Sachs disclaims beneficial ownership of the shares of Common Stock held by Water Street to the extent the partner- ship interests in Water Street are held by persons other than GS Group, Goldman Sachs or their affiliates. To the knowledge of the Reporting Persons, each of the persons listed on Sched- ule I owns 167 shares of Common Stock. Each of the Reporting Persons disclaims beneficial ownership with respect to such shares. As described in Item 4, pursuant to the Water Street Purchase Agreement, the Company has certain rights of rescis- sion under certain circumstances. The information set forth in Item 4 is incorporated in this Item 5(a) by reference. PAGE 8 OF 15 PAGES (b) Each Reporting Person shares the power to vote or direct the vote and dispose or direct the disposition of shares of Common Stock beneficially owned by such Reporting Person as indicated in the second through fourth pages of this filing. To the knowledge of the Reporting Persons, each of the persons listed on Schedule I owns 167 shares of Common Stock. Each of the Reporting Persons disclaims beneficial ownership with respect to such shares. (c) As described in Item 4 above, on July 10, 1997, Water Street and the Company entered into the Water Street Pur- chase Agreement, pursuant to which the Company purchased from Water Street 2,805,194 shares of Common Stock at the Purchase Price. Pursuant to the Water Street Purchase Agreement, Water Street has agreed to maintain the proceeds received by it from the sale in a segregated account and, upon consummation of the Offer by the Company, to pay to the Company the interest actu- ally earned thereon. In addition, Water Street and the Company have agreed that, in the event of a Rescission, the purchase price (together with interest actually earned thereon) will be repaid to the Company and the 2,805,194 shares of Common Stock will be returned to Water Street. In connection with the Offer, it is the current intention of Water Street to tender 960,577 shares of Common Stock in the Offer. (d) No other Person is known by Water Street, Goldman Sachs or GS Group to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock beneficially owned by Water Street, Goldman Sachs or GS Group, or by any of the persons listed on Schedule I and Schedule II hereto. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATION- SHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is amended as follows: As discussed Item 4, on July 10, 1997, Water Street entered into the Water Street Purchase Agreement, pursuant to which the Company agreed to purchase from Water Street 2,805,194 shares of Common Stock for the Purchase Price. Pur- suant to the Water Street Purchase Agreement, Water Street has agreed to maintain the proceeds received by it from the sale in a segregated account and, upon consummation of the Offer by the Company, to pay to the Company the interest actually earned thereon. PAGE 9 OF 15 PAGES In addition, the Water Street Purchase Agreement pro- vides, among other things, that, in the event of a Rescission, the purchase price (together with interest actually earned thereon) will be repaid to the Company and the 2,805,194 shares of Common Stock will be returned to Water Street, and that the Company will not (i) accept for purchase or purchase more than 2,857,142 shares of Common Stock in the Offer, (ii) pay more than $38.50 per share or (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 amend- ing the Water Street Purchase Agreement. On July 11, 1997, the Company commenced the Offer pursuant to, and in accordance with the terms provided in the Tender Offer Statement. Pursuant to the Water Street Purchase Agreement, Water Street has agreed that it will not tender in the Offer more than 960,577 shares of Common Stock. It is Water Street's current intention to tender 960,577 shares of Stock in the Offer. Additionally, in the Water Street Purchase Agreement, Water Street represented, among other things, that, as of the date thereof, it did not currently intend to sell or otherwise dispose of any shares of Common Stock beneficially owned by it on the date thereof other than pursuant to the Water Street Purchase Agreement or the Offer, which intention Water Street has agreed to confirm to the Company immediately prior to the Company's acceptance for payment of the shares of Common Stock tendered pursuant to the Offer. Goldman Sachs is acting as financial advisor to the Company in connection with the Transactions. Pursuant to such engagement, the Company has agreed to pay to Goldman Sachs a fee of $2 million for advice in connection with the Transac- tions (other than the approximately $220 million of share repurchases (the "Share Repurchase") by the Company pursuant to the Offer, the Water Street Purchase Agreement and the Smialek Purchase, respectively) and a fee of $200,000 for advice in connection with the Share Repurchase. The Company has also agreed to reimburse Goldman Sachs for certain of its out-of-pocket expenses and to indemnify Goldman Sachs against certain liabilities, including certain liabilities under the federal securities laws, in connection with the Transactions. In addition, Goldman Sachs has acted as a co-syndication agent of the Company's new senior debt arrangements and will assist the Company in its new subordinated debt offering, for which Goldman Sachs has received or will receive customary fees and indemnification. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS. Item 7 is hereby amended by adding thereto the fol- lowing: The following is to be filed herewith as an Exhibit to this Amendment No. 5: PAGE 10 OF 15 PAGES (8) Stock Purchase Agreement, dated as of July 10, 1997, by and between Insilco Corporation and Water Street Corporate Recovery Fund I, L.P. PAGE 11 OF 15 PAGES SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this state- ment is true, complete and correct. WATER STREET CORPORATE RECOVERY FUND I, L.P. By: Goldman, Sachs & Co., its General Partner By: /s/ Terence M. O'Toole _________________________ Name: Terence M. O'Toole Title: Managing Director GOLDMAN, SACHS & CO. By: /s/ Terence M. O'Toole _________________________ Name: Terence M. O'Toole Title: Managing Director THE GOLDMAN SACHS GROUP, L.P. By: The Goldman Sachs Corporation, its general partner By: /s/ Terence M. O'Toole _________________________ Name: Terence M. O'Toole Title: Executive Vice President Dated: July 16, 1997 PAGE 12 OF 15 PAGES SCHEDULE I The name of each director of The Goldman Sachs Corporation and The Goldman, Sachs & Co. L.L.C. and of each member of the executive committees of The Goldman Sachs Corporation, The Goldman, Sachs & Co. L.L.C., The Goldman Sachs Group, L.P. and Goldman, Sachs & Co. is set forth below. The business address of each natural person listed below except John A. Thain and John L. Thornton is 85 Broad Street, New York, NY 10004. The business address of John A. Thain and John L. Thornton is 133 Fleet Street, London EC4A 2BB, England. Each per- son is a citizen of the United States of America. The present principal occupation or employment of each of the listed persons is a managing director of Goldman, Sachs & Co. or another of Goldman, Sachs & Co. operating entity and a member of the executive committee. Jon Z. Corzine Henry M. Paulson, Jr. Roy J. Zuckerberg Robert J. Hurst John A. Thain John L. Thornton PAGE 13 OF 15 PAGES SCHEDULE II In settlement of Securities and Exchange Commission Administrative Proceeding File No. 3-7646 In the Matter of the Dis- tribution of Securities Issued by Certain Government Sponsored Enterprises, Goldman, Sachs & Co. (the "Firm"), along with numerous other securities firms, without admitting or denying any of the findings of the Securities and Exchange Commission (the "SEC") con- sented to the entry of an Order, dated January 16, 1992. The SEC found that the Firm, in connection with its participation in the primary distributions of certain unsecured debt securities issued by Government Sponsored Enterprises ("GSEs"), made and kept certain records that did not accurately reflect the Firm's customers' orders for GSEs' securities and/or offers, purchases or sales by the Firm of the GSEs' securities effected by the Firm in violation of Section 17(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and 17 C.F.R. Sections 240.17a-3 and 240.17a- 4. The Firm was ordered to cease and desist from committing or causing future violations of the aforementioned sections of the Exchange Act in connection with any primary distributions of unse- cured debt securities issued by the GSEs, pay a civil money penalty to the United States Treasury in the amount of $100,000 and main- tain policies and procedures reasonably designed to ensure the Firm's future compliance with the aforementioned sections of the Exchange Act in connection with any primary distributions of unse- cured debt securities issued by the GSEs. In Securities and Exchange Commission Administrative Pro- ceeding File No. 3-8282 In the Matter of Goldman, Sachs & Co., the Firm, without admitting or denying any of the SEC's allegations, settled administrative proceedings involving alleged books and records and supervisory violations relating to eleven trades of U.S. Treasury securities in the secondary markets in 1985 and 1986. The SEC alleged that the Firm had failed to maintain certain records required pursuant to Section 17(a) of the Exchange Act and had also failed to supervise activities relating to the aforemen- tioned trades in violation of Section 15(b)(4)(E) of the Exchange Act. The Firm was ordered to cease and desist from committing or causing any violation of the aforementioned sections of the Exchange Act, pay a civil money penalty to the SEC in the amount of $250,000 and establish policies and procedures reasonably designed to assure compliance with Section 17(a) of the Exchange Act and Rules 17a-3 and 17a-4 thereunder. PAGE 14 OF 15 PAGES INDEX TO EXHIBITS Exhibit No. Exhibit Page (8) Stock Purchase Agreement, dated as of July 10, 1997, by and between Insilco Corporation and Water Street Corporate Recovery Fund I, L.P. PAGE 15 OF 15 PAGES EX-99 2 EXHIBIT 8 - STOCK PURCHASE AGREEMENT Exhibit 8 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 Robert L. Smialek (the "Smialek Stock Purchase Agreement") pursuant to which the Company is purchasing 51,948 Shares on substantially the same terms and conditions as this Agreement. 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 Smialek Stock Purchase 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. 40734201 (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. (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. 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 425 Metro Place N. Fifth Floor Dublin, Ohio 43017 Attention: Vice President and General Counsel Telephone: (614) 791-3110 Telecopier: (614) 791-3195 with a copy to Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Aviva Diamant Telephone: (212) 859-8185 Telecopier: (212) 859-4000 (b) If to Water Street, addressed to: Water Street Corporate Recovery Fund I, L.P. c/o Goldman Sachs & Co. 85 Broad Street New York, New York 10004 Attention: David J. Greenwald Telephone: (212) 902-1000 Telecopier: (212) 902-3000 with a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 Attention: Mitchell S. Presser Telephone: (212) 403-1000 Telecopier: (212) 403-2000 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. 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/ Kenneth H. Koch _______________________________ Name: Kenneth H. Koch Title: Vice President WATER STREET RECOVERY FUND I, L.P. By: GOLDMAN, SACHS & CO., its General Partner By: /s/ Terence M. O'Toole _______________________________ Name: /s/ Terence M. O'Toole Title: Managing Director -----END PRIVACY-ENHANCED MESSAGE-----