SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 7, 1997
FISHER SCIENTIFIC INTERNATIONAL INC.
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction
of incorporation)
1-10920 02-0451017
(Commission File No.) (IRS employer
identification no.)
Liberty Lane, Hampton, New Hampshire 03842
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (603) 926-5911<PAGE>
ITEM 5. OTHER EVENTS.
On August 7, 1997, Fisher Scientific International
Inc. (the "Registrant") entered into an agreement and Plan of
Merger (the "Merger Agreement") with FSI Merger Corp., a
Delaware corporation ("FSI"). The Merger Agreement
contemplates, among other things, the merger (the "Merger") of
FSI with and into the Registrant. The Merger is conditioned
upon, among other things, approval of the shareholders of the
Registrant, receipt of financing and upon certain regulatory
approvals. A copy of the Merger Agreement is attached as
Exhibit 1 hereto and is incorporated herein by reference in its
entirety.
A copy of the press release issued by the Registrant
announcing the execution of the Merger Agreement is attached as
Exhibit 2 hereto and is incorporated herein by reference in its
entirety.
Effective August 7, 1997, the Registrant amended its
Rights Agreement, dated as of June 9, 1997 (the "Rights
Agreement"). The amendment provides, among other things, that
FSI and its Affiliates will not be deemed an Acquiring Person
(as such term is defined in the Rights Agreement"). The
amendment will cease to be of any effect if the Merger
Agreement is terminated in accordance with its terms. The text
of the amendment is attached hereto as Exhibit 3 and is
incorporated herein by reference in its entirety.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits
1. Agreement and Plan of Merger, dated as of August
7, 1997, by and between the Registrant and FSI
Merger Corp.
2. Press Release dated August 7, 1997.
3. First Amendment to Rights Agreement, dated as of
August 7, 1997, between the Registrant and
ChaseMellon Shareholder Services, L.L.C.<PAGE>
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
FISHER SCIENTIFIC
INTERNATIONAL INC.
By: /s/ Paul M. Meister
Name: Paul M. Meister
Title: Senior Vice
President and Chief
Financial Officer
Dated: August 8, 1997
-2-<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
1. Agreement and Plan of Merger, dated as of August 7,
1997, by and between the Registrant and FSI Merger
Corp.
2. Press Release dated August 7, 1997.
3. First Amendment to Rights Agreement, dated as of
August 7, 1997, between the Registrant and
ChaseMellon Shareholder Services, L.L.C.
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"),
dated as of August 7, 1997, by and between FSI Merger Corp.,
a Delaware corporation ("FSI"), and Fisher Scientific Inter-
national Inc., a Delaware corporation (the "Company").
WHEREAS, the Merger and this Agreement require the
vote of a majority of the issued and outstanding shares of
the Common Shares (as hereinafter defined) for the approval
thereof (the "Company Stockholder Approval");
WHEREAS, the respective Boards of Directors of FSI
and the Company have approved the merger of FSI with and into
the Company, as set forth below (the "Merger"), in accordance
with the General Corporation Law of the State of Delaware
(the "DGCL") and upon the terms and subject to the conditions
set forth in this Agreement, holders of shares of common
stock, par value $.01 per share (the "Common Shares") (in-
cluding the associated preferred shares purchase rights (the
"Rights") issued pursuant to the Rights Agreement, dated as
of June 9, 1997, between the Company and ChaseMellon Share-
holder Services, LLC, as Rights Agent (the "Rights Agree-
ment"), which Rights, together with the Common Shares, are
hereinafter referred to as the "Shares") issued and outstand-
ing immediately prior to the Effective Time (as defined
below) will be entitled, subject to the terms hereof and
other than as set forth herein, the right either (A) to
retain a portion of their Common Shares or (B) to receive
cash in this Agreement;
WHEREAS, the Board of Directors of the Company (the
"Company Board") has, in light of and subject to the terms
and conditions set forth herein, (i) determined that (A) the
consideration to be paid for each Share in the Merger (as
hereinafter defined) is fair to the stockholders of the Com-
pany, and (B) the Merger is otherwise in the best interests
of the Company and its stockholders, and (ii) resolved to
approve and adopt this Agreement and the transactions contem-
plated hereby and to recommend approval and adoption by the
stockholders of the Company of this Agreement;
WHEREAS, FSI and the Company desire to make certain
representations, warranties, covenants and agreements in con-
nection with the Merger, and also to prescribe various condi-
tions to the Merger; and
WHEREAS, it is intended that the Merger be recorded
as a recapitalization for financial reporting purposes.<PAGE>
NOW, THEREFORE, in consideration of the foregoing
and the respective representations, warranties, covenants and
agreements set forth herein, FSI and the Company agree as
follows:
ARTICLE I
THE MERGER
SECTION 1.01 The Merger. Upon the terms and sub-
ject to the satisfaction or waiver of the conditions hereof,
and in accordance with the applicable provisions of this
Agreement and the DGCL, at the Effective Time FSI shall be
merged with and into the Company. Following the Merger, the
separate corporate existence of FSI shall cease and the Com-
pany shall continue as the surviving corporation (the "Sur-
viving Corporation").
SECTION 1.02 Effective Time. As soon as practi-
cable after the satisfaction or waiver of the conditions set
forth in Article VI, the Company shall execute, in the manner
required by the DGCL, and deliver to the Secretary of State
of the State of Delaware a duly executed and verified cer-
tificate of merger, and the parties shall take such other and
further actions as may be required by law to make the Merger
effective. The time the Merger becomes effective in accor-
dance with applicable law is referred to herein as the
"Effective Time."
SECTION 1.03 Effects of the Merger. The Merger
shall have the effects set forth in the DGCL. Without limit-
ing the generality of the foregoing, and subject thereto, at
the Effective Time, all the properties, rights, privileges,
powers and franchises of the Company and FSI shall vest in
the Surviving Corporation, and all debts, liabilities and
duties of the Company and FSI shall become the debts, li-
abilities and duties of the Surviving Corporation.
SECTION 1.04 Certificate of Incorporation and By-
Laws of the Surviving Corporation.
(a) The Restated Certificate of Incorporation of
the Company, as in effect immediately prior to the Effective
Time, shall be the Certificate of Incorporation of the Sur-
viving Corporation until thereafter amended in accordance
with the provisions thereof and hereof and applicable law.
-2-<PAGE>
(b) The By-Laws of the Company in effect at the
Effective Time shall be the By-Laws of the Surviving Cor-
poration until amended, subject to the provisions of Section
5.06 of this Agreement, in accordance with the provisions
thereof and applicable law.
SECTION 1.05 Directors. Subject to applicable
law, the directors of FSI immediately prior to the Effective
Time shall be the initial directors of the Surviving Corpora-
tion and shall hold office until their respective successors
are duly elected and qualified, or their earlier death, res-
ignation or removal.
SECTION 1.06 Officers. The officers of the Com-
pany immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation and shall hold
office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
2.01 Effect on Capital Stock. As of the Effective
Time, by virtue of the Merger and without any action on the
part of the holder of any Common Shares or any shares of
capital stock of FSI:
(a) Common Stock of FSI. All of the shares of
Common Stock of FSI issued and outstanding immediately prior
to the Effective Time shall be converted into a number of
Common Shares following the Merger equal to 6,217,822 Common
Shares less the Election Eligible Shares (as defined in Sec-
tion 2.01(c)).
(b) Cancellation of Treasury Stock. Each Common
Share that is owned by the Company or by any wholly owned
subsidiary of the Company shall automatically be canceled and
retired and shall cease to exist, and no cash or other con-
sideration shall be delivered or deliverable in exchange
therefor.
(c) Retention of Common Shares. Except as other-
wise provided herein and subject to Sections 2.02 and 2.03,
each Common Share issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger, be treated
as follows:
-3-<PAGE>
(i) for each Standard Common Share (as defined
in 2.02(a)) with respect to which an election to retain
such Common Share has been effectively made and not re-
voked in accordance with Section 2.02 (the "Potential
Election Standard Shares") and which is to be retained in
accordance with Section 2.03(b)(ii) or Section 2.03(c),
the right to retain such fully paid and nonassessable Com-
mon Share (an "Election Standard Share");
(ii) for each Standard Common Share which was
not a Potential Election Standard Share, but which is to
be retained in accordance with Section 2.03(c)(ii), the
right to retain such fully paid and non-assessable Common
Share (a "Non-Election Standard Share");
(iii) for each Eligible Common Share (as defined
in Section 2.02(a)) which is to be retained in accordance
with Section 2.03(d)(i) or 2.03(d)(ii)(B), the right to
retain such fully paid and nonassessable Common Share
("Election Eligible Shares" and, together with the Elec-
tion Standard Shares and the Non-Election Standard Shares,
the "Retained Shares");
(iv) for each Common Share (other than Dissent-
ing Shares (as defined in Section 2.01(d)) and Retained
Shares) the right to receive in cash from the Company fol-
lowing the Merger an amount equal to $51.00 (the "Cash
Price" and, with the Retained Shares, the "Merger Consid-
eration") and each such Common Share shall no longer be
outstanding, shall automatically be canceled and retired
and shall cease to exist, and each holder of a Certificate
representing any such Common Shares shall, to the extent
such Certificate represents such shares, cease to have any
rights with respect thereto, except the right to receive
the Cash Price applicable thereto, upon surrender of such
Certificate in accordance with Section 2.05.
(d) Dissenting Shares. Notwithstanding Section
2.01(c), Common Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor
of the Merger or consented thereto in writing and who has
demanded appraisal for such Common Shares in accordance with
the DGCL prior to the Effective Time ("Dissenting Shares")
shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws
or otherwise loses such holder's right to appraisal. If after
the Effective Time such holder fails to perfect or withdraws or
loses such holder's right to appraisal, such Common Shares
shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger
-4-<PAGE>
Consideration. The Company shall give FSI prompt notice of any
demands received by the Company for appraisal of Common Shares,
and FSI shall have the right to participate in all negotiations
and proceedings with respect to such demands. The Company
shall not, except with the prior written consent of FSI, make
any payment with respect to, or settle or offer to settle, any
such demands.
SECTION 2.02 Common Share Elections. (a) Each
person who, on or prior to the Election Date (as defined in
Section 2.02(b) below), is a record holder of Standard Common
Shares will be entitled to make an unconditional election on or
prior to such Election Date to express a desire to retain such
shares, on the basis hereinafter set forth and subject to Sec-
tion 2.03 hereof. In addition, each person who, on or prior to
the Election Date, is a record holder of Eligible Common Shares
will be entitled to make an unconditional election on or prior
to such Election Date to express a desire to retain such
shares, on the basis hereinafter set forth and subject to Sec-
tion 2.03 hereof.
(i) "Standard Common Shares" are Common Shares
other than "Eligible Option Shares".
(ii) "Eligible Option Shares" are Common Shares
which are issued to employees listed on a schedule to be
agreed upon by FSI and the Company (an "Eligible
Employee") upon exercise of Options (as defined in Section
2.04) following the execution of this Agreement and which
continue to be held by such Eligible Employees on the
Election Date.
(iii) "Eligible Common Shares" are Eligible Option
Shares and Common Shares which were held by Eligible Em-
ployees upon the execution of this Agreement and which
continue to be held by such Eligible Employees on the
Election Date.
(b) Subject to any required clearance by the Securi-
ties and Exchange Commission (the "SEC"), the Company shall
prepare and mail a form of election (the "Form of Election"),
which form shall be subject to the reasonable approval of FSI,
with the Proxy Statement to the record holders of Common Shares
as of the record date for the Special Meeting (as hereinafter
defined), which Form of Election shall be used by each record
holder of Common Shares who elects to express a desire to re-
tain Standard Common Shares or Eligible Common Shares held by
such holder. To the extent an Eligible Employee holds a Common
Share which is both a Standard Common Share and an Eligible
Common Share, such Eligible Employee may elect to retain such
-5-<PAGE>
Common Share first as a Standard Common Share and, to the ex-
tent not so retained, second as an Eligible Common Share. The
Company will use its best efforts to make the Form of Election
available to all persons who become holders of Common Shares
during the period between such record date and the Election
Date, with a copy of the Proxy Statement. Any such holder's
election shall have been properly made only if the Exchange
Agent shall have received at its designated office, by 5:00
p.m., New York City time on the second business day prior to
the date of the Special Meeting (the "Election Date"), a Form
of Election properly completed and signed and accompanied by
Certificates for the Common Shares to which such Form of Elec-
tion relates, duly endorsed in blank or otherwise in a form
acceptable for transfer on the books of the Company (or by an
appropriate guarantee of delivery of such certificates as set
forth in such Form of Election from a firm which is a member of
a registered national securities exchange or of the National
Association of Securities Dealers, Inc. or a commercial bank or
trust company having an office or correspondent in the United
States, provided such certificates are in fact delivered to the
Exchange Agent within three NYSE trading days after the date of
execution of such guarantee of delivery).
(c) Any Form of Election may be revoked by the
holder submitting it to the Exchange Agent only by written no-
tice received by the Exchange Agent (i) prior to 5:00 p.m., New
York City time on the Election Date or (ii) after the Election
Date, if (and to the extent that) the Exchange Agent is legally
required to permit revocations and the Effective Time shall not
have occurred prior to such date. In addition, all Forms of
Election shall automatically be revoked if the Exchange Agent
is notified in writing by FSI and the Company that the Merger
has been abandoned. If a Form of Election is revoked, the Cer-
tificate or Certificates (or guarantees of delivery, as appro-
priate) for the Common Shares to which such Form of Election
relates shall be promptly returned to the stockholder submit-
ting the same to the Exchange Agent.
(d) The determination of the Exchange Agent shall be
binding with respect to whether or not elections have been
properly made or revoked pursuant to this Section 2.02 and when
elections and revocations were received by it. If the Exchange
Agent determines that any election to retain Common Shares was
not properly made, such shares shall be treated by the Exchange
Agent as shares for which no election was received, and such
shares shall be retained or converted in accordance with Sec-
tions 2.01 and 2.03. The Exchange Agent shall also make all
-6-<PAGE>
computations as to the allocation and the proration contem-
plated by Section 2.03, and any such computation shall be con-
clusive and binding on the holders of Common Shares. The Ex-
change Agent may, with the mutual agreement of FSI and the Com-
pany, make such rules as are consistent with this Section 2.02
for the implementation of the elections provided for herein as
shall be necessary or desirable fully to effect such elections.
SECTION 2.03 Proration.
(a) Notwithstanding anything in this Agreement to
the contrary, the "Standard Retained Share Number" shall equal
712,871 Common Shares.
(b) If the number of Potential Election Standard
Shares is greater than the Standard Retained Share Number, then
each Potential Election Standard Share shall be retained as an
Election Standard Share in accordance with the terms of Section
2.01(c)(i) or receive cash in accordance with the terms of Sec-
tion 2.01(c)(iv) in the following manner:
(i) A proration factor (the "Non-Cash Proration
Factor") shall be determined by dividing the Standard Re-
tained Share Number by the total number of Potential Elec-
tion Standard Shares.
(ii) The number of Potential Election Standard
Shares covered by each election to be retained as Election
Standard Shares shall be determined by multiplying the
Non-Cash Proration Factor by the total number of Potential
Election Standard Shares covered by such election, rounded
down to the nearest whole number.
(iii) All Potential Election Standard Shares,
other than those shares which are retained in accordance
with Section 2.03(b)(ii), shall be converted into cash in
accordance with the terms of Section 2.01(c)(iv).
(c) If the number of Potential Election Standard
Shares is less than or equal to the Standard Retained Share
Number, then each Potential Election Standard Share shall be
retained as an Election Standard Share in accordance with the
terms of Section 2.01(c)(i) and each Standard Common Share
other than a Potential Election Standard Share or a Dissenting
Share (a "Potential Cash Share") shall be retained as a Non-
Election Standard Share in accordance with Section 2.01(c)(ii)
or converted into cash in accordance with the terms of Section
2.01(c)(iv) in the following manner:
-7-<PAGE>
(i) A proration factor (the "Cash Proration
Factor") shall be determined by dividing (x) the differ-
ence between the Standard Retained Share Number and the
number of Potential Election Standard Shares, by (y) the
number of Potential Cash Shares.
(ii) The number of Potential Cash Shares held by
each stockholder to be retained as Non-Election Standard
Shares in accordance with Section 2.01(c)(ii) shall be
determined by multiplying the Cash Proration Factor by the
total number of Potential Cash Shares held by such stock-
holder, rounded down to the nearest whole number.
(iii) All Potential Cash Shares, other than those
shares retained as Non-Election Standard Shares, shall be
converted to cash in accordance with Section 2.01(c)(iv).
(d) Eligible Common Shares shall be treated as fol-
lows:
(i) To the extent the number of Eligible Common
Shares with respect to which an election to retain Common
Shares has been effectively made and not revoked in ac-
cordance with Section 2.02 (the "Potential Election Eli-
gible Shares") is less than or equal to 297,029 Common
Shares (the "Eligible Retained Share Number"), such Po-
tential Election Eligible Shares shall be retained in ac-
cordance with Section 2.01(c)(iii).
(ii) To the extent the number of Potential Elec-
tion Eligible Shares is greater than the Eligible Retained
Share Number, the following shall apply:
(A) A proration factor (the "Eligible Pro-
ration Factor") shall be determined by dividing the
Eligible Retained Share Number by the number of Po-
tential Election Eligible Shares.
(B) The number of Potential Election Eli-
gible Shares to be retained by a holder in accordance
with Section 2.01(c)(iii) shall be determined by mul-
tiplying the Eligible Proration Factor by the total
number of Potential Election Eligible Shares held by
such holder, rounded down to the nearest whole num-
ber.
(C) All Potential Election Eligible
Shares, other than those shares retained pursuant to
Section 2.03(d)(ii)(B), shall be converted into cash
in accordance with Section 2.01(c)(iv).
-8-<PAGE>
SECTION 2.04 Options; Stock Plans.
(a) Immediately prior to the Effective Time, each
holder of a then-outstanding employee stock option, whether or
not fully exercisable, to purchase Common Shares (an "Option")
granted under any stock option or similar plan of the Company
(together with the Restricted Unit Plan and the Equity Option
Program) (as such terms are hereinafter defined), the "Stock
Plans") will be entitled to receive in settlement of such
Option a cash payment from the Company equal to the product of
(i) the total number of Common Shares previously subject to
such Option and (ii) the excess of the Cash Price over the
exercise price per Common Share subject to such Option, subject
to any required withholding of taxes. If necessary or appro-
priate, the Company will, upon the request of FSI, use reason-
able efforts to obtain the written acknowledgment of each
employee holding an Option that the payment of the amount of
cash referred to above will satisfy in full the Company's obli-
gation to such employee pursuant to such Option and take such
other action as is necessary to effect the provisions of this
Section 2.04.
(b) FSI agrees that each holder of Restricted Units
(as such term is defined in the Restricted Unit Plan for Non-
Employee Directors of Fisher Scientific International Inc. (the
"Restricted Unit Plan"), shall be entitled to receive at the
Effective Time, and shall pay or cause to be paid to each such
holder promptly following the Effective Time, (i) an amount in
cash equal to the product of (x) the total number of Restricted
Units in such holder's Restricted Unit account (regardless of
whether such Restricted Units have vested in accordance with
the Restricted Unit Plan) and (y) the Cash Price, and (ii) an
amount in cash equal to the Cash Dividend Equivalents (as such
term is defined in the Restricted Unit Plan) (and amounts
equivalent to interest thereon) in such holder's Restricted
Unit account. If necessary or appropriate, the Company will,
upon the request of FSI, use reasonable efforts to obtain the
written acknowledgment of each director holding Restricted
Units that the payment of the amounts referred to above will
satisfy in full the Company's obligation to such director
pursuant to the Restricted Unit Plan and take such other action
as is necessary to effect the provisions of this Section 2.04.
SECTION 2.05 Payment for Common Shares.
(a) From and after the Effective Time, such bank or
trust company as shall be mutually acceptable to FSI and the
Company shall act as exchange agent (the "Exchange Agent"). At
or prior to the Effective Time, FSI shall deposit, or FSI shall
otherwise take all steps necessary to cause to be deposited,
-9-<PAGE>
with the Exchange Agent in an account (the "Exchange Fund") the
aggregate Merger Consideration to which holders of Common
Shares shall be entitled at the Effective Time pursuant to
Section 2.01(c).
(b) Promptly after the Effective Time, FSI shall
cause the Exchange Agent to mail to each record holder of
certificates (the "Certificates") that immediately prior to the
Effective Time represented Common Shares a form of letter of
transmittal which shall specify that delivery shall be ef-
fected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates to the Ex-
change Agent and instructions for use in surrendering such
Certificates and receiving the Merger Consideration in respect
thereof.
(c) In effecting the payment of the Cash Price in
respect of Common Shares represented by Certificates entitled
to payment of the Cash Price pursuant to Section 2.01(c)(iv)
(the "Cashed Shares"), upon the surrender of each such Certifi-
cate, the Exchange Agent shall pay the holder of such Certifi-
cate the Cash Price multiplied by the number of Cashed Shares,
in consideration therefor. Upon such payment (and the
exchange, if any, of Certificates formerly representing Common
Shares for certificates representing Retained Shares) such
Certificate shall forthwith be cancelled.
(d) In effecting the exchange of Retained Shares in
respect of Common Shares represented by Certificates which, at
the Effective Time, shall become Retained Shares, upon sur-
render of each such Certificate, the Exchange Agent shall de-
liver to the holder of such Certificate a certificate repre-
senting that number of whole Retained Shares which such holder
has the right to receive pursuant to the provisions of Section
2.01(c), and cash in lieu of fractional Retained Shares. Upon
such exchange (and any payment of the Cash Price for Cashed
Shares), such Certificate so surrendered shall forthwith be
canceled.
(e) Until surrendered in accordance with paragraphs
(c) or (d) above, each such Certificate (other than
Certificates representing Common Shares held by FSI or any of
its affiliates, in the treasury of the Company or by any wholly
owned subsidiary of the Company or Dissenting Shares) shall
represent solely the right to receive the aggregate Merger Con-
sideration relating thereto. No interest or dividends shall be
paid or accrued on the Merger Consideration. If the Merger
Consideration (or any portion thereof) is to be delivered to
any person other than the person in whose name the Certificate
formerly representing Common Shares surrendered therefor is
-10-<PAGE>
registered, it shall be a condition to such right to receive
such Merger Consideration that the Certificate so surrendered
shall be properly endorsed or otherwise be in proper form for
transfer and that the person surrendering such Common Shares
shall pay to the Exchange Agent any transfer or other taxes re-
quired by reason of the payment of the Merger Consideration to
a person other than the registered holder of the Certificate
surrendered, or shall establish to the satisfaction of the
Exchange Agent that such tax has been paid or is not
applicable.
(f) Distributions with Respect to Unexchanged
Shares. No dividends or other distributions with respect to
Common Shares with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Certificate with
respect to the Common Shares represented thereby, and no cash
payment in lieu of fractional shares shall be paid to any such
holder pursuant to Section 2.05(g) until the surrender of such
Certificates in accordance with this Section 2.05. Subject to
the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certifi-
cate representing whole Common Shares issued in exchange there-
for, without interest, at the time of such surrender, the
amount of any cash payable in lieu of a fractional Common Share
to which such holder is entitled pursuant to Section 2.5(g).
(g) No Fractional Shares. (i) No certificates or
scrip representing factional Retained Shares shall be issued
upon the surrender for exchange of Certificates, and such frac-
tional share interests shall not entitle the owner thereof to
vote or to any rights of a stockholder of the Surviving Corpo-
ration.
(ii) As promptly as practicable following
the Effective Time, the Exchange Agent shall determine the
excess of (x) the number of Retained Shares delivered to the
Exchange Agent by FSI pursuant to Section 2.05(a) over (y) the
aggregate number of whole Retained Shares to be distributed to
holders of the Certificates (such excess being herein called
the "Excess Shares"). As soon as practicable after the
Effective Time, the Exchange Agent, as agent for the holders of
the Certificates, shall sell the Excess Shares at then pre-
vailing prices on the New York Stock Exchange, Inc. (the
"NYSE"), all in the manner provided in paragraph (iii) of this
Section 2.05(g).
(iii) The sale of the Excess Shares by the
Exchange Agent shall be executed on the NYSE through one or
more member firms of the NYSE and shall be executed in round
lots to the extent practicable. FSI shall bear the cost of all
-11-<PAGE>
related changes and fees of the Exchange Agent, commissions,
transfer taxes and other out-of-pocket transaction costs.
Until the proceeds of such sale or sales have been distributed
to the holders of the Certificates, the Exchange Agent shall
hold such proceeds in trust for the holders of the Certificates
(the "Common Shares Trust"). The Exchange Agent shall
determine the portion of the Common Shares Trust to which each
holder of a certificate shall be entitled, if any, by
multiplying the amount of the aggregate proceeds comprising the
Common Shares Trust by a fraction, the numerator of which is
the amount of the fractional share interests to which such
holder of a Certificate is entitled and the denominator of
which is the aggregate amount of fractional share interests to
which all holders of the Certificates are entitled.
(iv) As soon as practicable after the
determination of the amount of cash to be paid to holders of
Certificates in lieu of any fractional share interests, the Ex-
change Agent shall make available such amounts, without
interest, to such holders of Certificates who have surrendered
their Certificates in accordance with this Section 2.05.
(h) Promptly following the date which is 180 days
after the Effective Time, the Exchange Agent shall deliver to
the Surviving Corporation all cash, Certificates and other
documents in its possession relating to the transactions de-
scribed in this Agreement, and the Exchange Agent's duties
shall terminate. Thereafter, each holder of a Certificate
formerly representing a Common Share may surrender such Cer-
tificate to the Surviving Corporation and (subject to appli-
cable abandoned property, escheat and similar laws) receive in
consideration therefor the aggregate Merger Consideration
relating thereto, without any interest or dividends thereon.
(i) After the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving Corpora-
tion of any Common Shares which were outstanding immediately
prior to the Effective Time. If, after the Effective Time,
Certificates formerly representing Common Shares are presented
to the Surviving Corporation or the Exchange Agent, they shall
be surrendered and cancelled in return for the payment of the
aggregate Merger Consideration relating thereto, as provided in
this Article II.
(j) No Liability. None of FSI, the Company or
Exchange Agent shall be liable to any person in respect of any
Retained Shares (or dividends or distributions with respect
thereto) or cash from the Exchange Fund or the Common Shares
Trust delivered to a public official pursuant to any applicable
-12-<PAGE>
abandoned property, escheat or similar law. If any Certifi-
cates shall not have been surrendered prior to seven years
after the Effective Time (or immediately prior to such earlier
date on which any Retained Shares, any cash in lieu of frac-
tional Retained Shares or any dividends or distributions with
respect to Common Shares in respect of such Certificate would
otherwise escheat to or become the property of any Governmental
Entity) any such shares, cash, dividends or distributions in
respect of such Certificate shall, to the extent permitted by
applicable law, become the property of the Surviving Corpora-
tion, free and clear of all claims or interest of any person
previously entitled thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and FSI
as follows:
SECTION 3.01 Organization and Qualification; Sub-
sidiaries. The Company and each of its Significant Subsid-
iaries (as hereinafter defined) is a corporation duly orga-
nized, validly existing and in good standing under the laws of
its state or jurisdiction of incorporation and has all
requisite corporate power and corporate authority to own, lease
and operate its properties and to carry on its business as now
being conducted and is in good standing as a foreign
corporation in each jurisdiction where the properties owned,
leased or operated, or the business conducted, by it require
such qualification and where failure to be in good standing or
to so qualify would have a Material Adverse Effect on the
Company. The term "Material Adverse Effect on the Company," as
used in this Agreement, means any change in or effect on the
business, financial condition, results of operations or
reasonably foreseeable prospects of the Company or any of its
subsidiaries that would be materially adverse to the Company
and its subsidiaries taken as a whole. The Company has hereto-
fore made available to FSI a complete and correct copy of its
Restated Certificate of Incorporation and By-Laws. A "Signifi-
cant Subsidiary" of any person means any subsidiary or person
that constitutes a significant subsidiary of such person within
the meaning of Rule 1-02(v) of Regulation S-X.
SECTION 3.02 Capitalization; Subsidiaries. The
authorized capital stock of the Company consists of 50,000,000
Common Shares and 15,000,000 shares of preferred stock, par
value $.01 per share ("Preferred Stock"), of which 500,000
shares are designated Series A Junior Participating
-13-<PAGE>
Preferred Stock, par value $.01 per share ("Junior Preferred
Stock"). As of the close of business on August 6, 1997,
20,325,546 Common Shares were issued and outstanding, all of
which are entitled to vote on this Agreement, and no Common
Shares were held in treasury. The Company has no shares of
Preferred Stock issued and outstanding. As of August 6, 1997,
except for (i) 3,632,195 Common Shares reserved for issuance
pursuant to outstanding Options and rights granted under the
Stock Plans, (ii) 500,000 shares of Junior Preferred Stock re-
served for issuance upon exercise of the Rights and (iii) up to
192,270 Options issuable pursuant to the Company's Equity
Option Program (the "Equity Option Program"), there are not
now, and at the Effective Time there will not be, any existing
options, warrants, calls, subscriptions, or other rights, or
other agreements or commitments, obligating the Company to
issue, transfer or sell any shares of capital stock of the
Company or any of its subsidiaries. All issued and outstanding
Common Shares are validly issued, fully paid, nonassessable and
free of preemptive rights. All of the outstanding shares of
capital stock of each of the Company's Significant Subsidiaries
have been validly issued and are fully paid and non-assessable
and, except as set forth on Section 3.02 of the disclosure
schedule delivered to FSI by the Company on the date hereof
(the "Company Disclosure Schedule"), are owned by either the
Company or another of its Significant Subsidiaries free and
clear of all liens, charges, claims or encumbrances. There are
no outstanding options, warrants, calls, subscriptions, or
other rights, or other agreements or commitments, obligating
any Significant Subsidiary of the Company to issue, transfer or
sell any shares of its capital stock.
SECTION 3.03 Authority Relative to this Agreement.
(a) The Company has the requisite corporate power
and authority to execute and deliver this Agreement and, except
for the approval of this Agreement by the shareholders of the
Company, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly and validly authorized by the Company Board and no other
corporate proceedings on the part of the Company are necessary
to authorize this Agreement or to consummate the transactions
so contemplated (other than the approval of this Agreement by
the shareholders of the Company, to the extent required by
applicable law). This Agreement has been duly and validly
executed and delivered by the Company, and, assuming this
Agreement constitutes a valid and binding obligation of FSI,
this Agreement constitutes a valid and
-14-<PAGE>
binding agreement of the Company, enforceable against the
Company in accordance with its terms.
(b) Except as set forth in Section 3.03 of the
Company Disclosure Schedule, the execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated by this Agreement and compliance with the
provisions of this Agreement will not, conflict with, or result
in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of
consent, termination, purchase, cancellation or acceleration of
any obligation or to loss of any property, rights or benefits
under, or result in the imposition of any additional obligation
under, or result in the creation of any Lien upon any of the
properties or assets of the Company or any of its subsidiaries
under, (i) the organizational documents of the Company or any
of its subsidiaries, (ii) any contract, instrument, permit,
concession, franchise, license, loan or credit agreement, note,
bond, mortgage, indenture, lease or other property agreement,
partnership or joint venture agreement or other legally binding
agreement, whether oral or written (a "Contract"), applicable
to the Company or any of its subsidiaries or their respective
properties or assets or (iii) subject to the governmental
filings and other matters referred to in the following
paragraph, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or any
of its subsidiaries or their respective properties or assets,
other than, in the case of clauses (ii) and (iii), any such
conflicts, violations, defaults, rights or Liens that
individually or in the aggregate would not have a Material
Adverse Effect.
(c) Other than in connection with, or in compliance
with, the provisions of the DGCL with respect to the trans-
actions contemplated hereby, the Exchange Act, the securities
laws of the various states and the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), no
authorization, consent or approval of, or filing with, any
Governmental Entity (as hereinafter defined) is necessary for
the consummation by the Company of the transactions
contemplated by this Agreement other than authorizations,
consents and approvals the failure to obtain, or filings the
failure to make, which would not, in the aggregate, have a
Material Adverse Effect on the Company. As used in this
Agreement, the term "Governmental Entity" means any government
or subdivision thereof, domestic, foreign or supranational or
any administrative, governmental or regulatory authority,
agency, commission, tribunal or body, domestic, foreign or
supranational.
-15-<PAGE>
SECTION 3.04 No Violation. Neither the execution or
delivery of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby will (i)
constitute a breach or violation of any provision of the
Restated Certificate of Incorporation or By-Laws of the Company
or (ii) except as set forth on Section 3.04 of the Company
Disclosure Schedule, constitute a breach, violation or default
(or any event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination
of, or accelerate the performance required by, or result in the
creation of any lien or encumbrance upon any of the properties
or assets of the Company or any of its subsidiaries under, any
note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument to which the Company or any of
its subsidiaries is a party or by which they or any of their
respective properties or assets are bound, other than breaches,
violations, defaults, terminations, accelerations or creation
of liens and encumbrances which, in the aggregate, would not
have a Material Adverse Effect on the Company.
SECTION 3.05 SEC Reports and Financial Statements.
Since January 1, 1995, the Company has filed all forms, reports
and documents ("SEC Reports") with the SEC required to be filed
by it pursuant to the federal securities laws and the SEC rules
and regulations thereunder. Copies of all such SEC Reports
have been made available to FSI by the Company. None of such
SEC Reports (as of their respective filing dates) contained any
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
audited and unaudited consolidated financial statements of the
Company included in the SEC Reports have been prepared in
accordance with generally accepted accounting principles
applied on a consistent basis (except as otherwise stated in
such financial statements, including the related notes) and
fairly present the financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the
results of their operations and changes in financial position
for the periods then ended, subject, in the case of the
unaudited financial statements, to year-end audit adjustments.
Except as set forth in the SEC Reports and except as disclosed
in Section 3.05 of the Company Disclosure Schedule, at the date
of the most recent audited financial statements of the Company
included in the SEC Reports, neither the Company nor any of its
subsidiaries had, and since such date neither the Company nor
any of such subsidiaries has incurred, any liabilities or obli-
gations of any nature (whether accrued, absolute, contingent or
otherwise)
-16-<PAGE>
which, individually or in the aggregate, would be required to
be disclosed in a balance sheet prepared in accordance with
generally accepted accounted principles and would reasonably be
expected to have a Material Adverse Effect with respect to the
Company except liabilities incurred in the ordinary and usual
course of business and consistent with past practice and
liabilities incurred in connection with the transactions
contemplated by this Agreement.
SECTION 3.06 Compliance with Applicable Laws. Ex-
cept as set forth on Section 3.06 of the Company Disclosure
Schedule and except for matters relating to Environmental Laws
(which matters are covered in Section 3.13), (i) the Company
and its subsidiaries hold all material permits, licenses and
approvals of all Governmental Entities and (ii) the business
operations of the Company have been conducted in compliance
with all laws, ordinances and regulations of any Governmental
Entity, except for possible violations which would not, indi-
vidually or in the aggregate, have a Material Adverse Effect on
the Company.
SECTION 3.07 Change of Control. Except as set forth
on Section 3.07 of the Company Disclosure Schedule or as
provided in Section 2.04, the transactions contemplated by this
Agreement will not constitute a "change of control" under,
require the consent from or the giving of notice to a third
party pursuant to, permit a third party to terminate or
accelerate vesting or repurchase rights, or create any other
detriment under the terms, conditions or provisions of any
note, bond, mortgage, indenture, license, lease, contract,
agreement or other instrument or obligation to which the Com-
pany or any of its subsidiaries is a party or by which any of
them or any of their properties or assets may be bound, except
where the adverse consequences resulting from such change of
control or where the failure to obtain such consents or provide
such notices would not, individually or in the aggregate, have
a Material Adverse Effect on the Company.
SECTION 3.08 Litigation. Except as set forth on
Section 3.08 of the Company Disclosure Schedule, there is no
suit, claim, action, proceeding or investigation pending or, to
the knowledge of the Company, threatened, against the Company
or any of its subsidiaries, individually or in the aggregate,
which would have a Material Adverse Effect on the Company and
its subsidiaries or could prevent or materially delay the
consummation of the transactions contemplated by this
Agreement. Except as disclosed in the SEC Reports filed prior
to the date of this Agreement, neither the Company nor any of
its subsidiaries is subject to any outstanding order,
-17-<PAGE>
writ, injunction or decree which, individually or in the ag-
gregate, would have a Material Adverse Effect on the Company or
could prevent or materially delay the consummation of the
transactions contemplated hereby.
SECTION 3.09 Information. None of the information
supplied by the Company in writing (other than projections of
future financial performance) specifically for inclusion or
incorporation by reference in (i) Form S-4 or (ii) any other
document to be filed with the SEC or any other Governmental
Entity in connection with the transactions contemplated by this
Agreement (the "Other Filings") will, at the respective times
filed with the SEC or other Governmental Entity and, in
addition, in the case of the Proxy Statement, at the date it or
any amendment or supplement is mailed to stockholders, at the
time of the Special Meeting and at the Effective Time, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
Notwithstanding the foregoing, no representation is made by the
Company with respect to (i) any forward-looking information
which may have been supplied by the Company, whether or not
included by FSI in the Form S-4 or (ii) statements made in any
of the foregoing documents based upon information supplied by
FSI.
SECTION 3.10 Certain Approvals. The Company Board
has taken any and all necessary and appropriate action to
render inapplicable to the Merger and the transactions con-
templated by this Agreement the provisions of Section 203 of
the DGCL.
SECTION 3.11 Employee Benefit Plans.
(a) Section 3.11(a) of the Company Disclosure
Schedule includes a complete list of all material employee
benefit plans and programs providing benefits to any employee
or former employee of the Company and its subsidiaries spon-
sored or maintained by the Company or any of its subsidiaries
or to which the Company or any of its subsidiaries contributes
or is obligated to contribute ("Plans"). Without limiting the
generality of the foregoing, the term "Plans" includes all
employee welfare benefit plans within the meaning of Section
3(1) of the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder ("ERISA"), and all
employee pension benefit plans within the meaning of Section
3(2) of ERISA.
-18-<PAGE>
(b) With respect to each Plan, the Company has made
available to FSI a true, correct and complete copy of: (i) all
plan documents, benefit schedules, trust agreements, and
insurance contracts and other funding vehicles; (ii) the most
recent Annual Report (Form 5500 Series) and accompanying
schedule, if any; (iii) the current summary plan description,
if any; (iv) the most recent annual financial report, if any;
(v) the most recent actuarial report, if any; and (vi) the most
recent determination letter from the United States Internal
Revenue Service (the "IRS"), if any.
(c) The Company and each of its subsidiaries has
complied, and is now in compliance, in all material respects
with all provisions of ERISA, the Internal Revenue Code of
1986, as amended, including the Treasury Regulations thereunder
(the "Code") and all laws and regulations applicable to the
Plans. With respect to each Plan that is intended to be a
"qualified plan" within the meaning of Section 401(a) of the
Code ("Qualified Plans"), the IRS has issued a favorable
determination letter.
(d) All contributions required to be made to any
Plan by applicable law or regulation or by any plan document or
other contractual undertaking, and all premiums due or payable
with respect to insurance policies funding any Plan, for any
period through the date hereof have been timely made or paid in
full or, to the extent not required to be made or paid on or
before the date hereof, have been fully reflected in the
financial statements of the Company included in the SEC Reports
to the extent required under generally accepted accounting
principles.
(e) Except as set forth on Section 3.11(e) of the
Company Disclosure Schedule, no Plan is subject to Title IV or
Section 302 of ERISA or Section 412 or 4971 of the Code.
Without limiting the generality of the foregoing, no Plan is a
"multiemployer plan" within the meaning of Section 4001(a)(3)
of ERISA (a "Multiemployer Plan") or a plan that has two or
more contributing sponsors at least two of whom are not under
common control, within the meaning of Section 4063 of ERISA and
which is subject to Title IV of ERISA (a "Multiple Employer
Plan").
(f) There does not now exist, nor do any cir-
cumstances exist that could result in, any liability under (i)
Title IV of ERISA, (ii) section 302 of ERISA, (iii) sections
412 and 4971 of the Code, (iv) the continuation coverage
requirements of section 601 et seq. of ERISA and section 4980B
of the Code, or (v) corresponding or similar provisions of
foreign laws or regulations, other than a liability that
-19-<PAGE>
arises solely out of, or relates solely to, the Plans, that
would be a liability of the Company or any of its subsidiaries
following the Effective Time. Without limiting the generality
of the foregoing, none of the Company, its subsidiaries nor any
ERISA Affiliate of the Company or any of its subsidiaries has
engaged in any transaction described in Section 4069 or Section
4204 or 4212 of ERISA. An "ERISA Affiliate" means any entity,
trade or business that is a member of a group described in Sec-
tion 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1)
of ERISA that includes the Company or any of its subsidiaries,
or that is a member of the same "controlled group" as the Com-
pany or any of its subsidiaries, pursuant to Section
4001(a)(14) of ERISA.
SECTION 3.12 Taxes.
(a) The Company, and each of its subsidiaries and
each affiliated, combined, consolidated, unitary or aggregate
group of which the Company or any of its subsidiaries is a
member (a "Company Affiliated Group") has timely filed all
federal, state, local and foreign income Tax Returns (as
hereinafter defined) required to be filed by it, and all other
material Tax Returns required to be filed by it, and has paid
or caused to be paid all Taxes (as hereinafter defined)
required to be paid in respect of the periods covered by such
returns and has made adequate provision in the Company's
financial statements for payment of all Taxes that have not
been paid, whether or not shown as due and payable on any Tax
Return in respect of all taxable periods or portions thereof
ending on or before the date hereof, except where the failure
to so file or pay or make adequate provision would not,
individually or in the aggregate, have a Material Adverse
Effect on the Company. There are no outstanding agreements,
waivers or requests for waivers extending the statutory period
of limitation applicable to any Tax Return of the Company, any
of its subsidiaries or any Company Affiliated Group. Except as
set forth on Section 3.12 of the Company Disclosure Schedule,
neither the Company nor any of its subsidiaries (i) has been a
member of a group filing consolidated returns for federal
income tax purposes (except for the group of which the Company
is the common parent), or (ii) is a party to or has any
liability pursuant to a Tax sharing or Tax indemnity agreement
or any other agreement of a similar nature that remains in
effect.
(b) Except to the extent of amounts for which
indemnification has been provided to the Company pursuant to
Article X of the Purchase Agreement among the Company and
Fisons plc and Fisons U.S. Inc. and Fisons Corporation and
Fisons U.S. Investment Holdings, Inc., dated August 29, 1995,
-20-<PAGE>
the Company, each of its subsidiaries and each Company
Affiliated Group have complied in all material respects with
all rules and regulations relating to the withholding of Taxes
except to the extent any such failure to comply would not,
individually or in the aggregate, have a Material Adverse
Effect on the Company.
(c) For purposes of this Agreement, the term "Taxes"
means all taxes, charges, fees, levies or other assessments,
including, without limitation, income, gross receipts, excise,
property, sales, transfer, license, payroll, withholding,
capital stock and franchise taxes, imposed by the United States
or any state, local or foreign government or subdivision or
agency thereof, including any interest, penalties or additions
thereto. For purposes of this Agreement, the term "Tax Return"
means any report, return or other information or document
required to be supplied to a taxing authority in connection
with Taxes.
SECTION 3.13 Environmental Matters.
(a) Except as set forth on Section 3.13 of the
Company Disclosure Schedule, the Company and its subsidiaries
have been and are in compliance with all applicable
Environmental Laws as in effect on the date hereof, except for
such violations and defaults as would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
(b) Except as set forth on Section 3.13 of the
Company Disclosure Schedule, the Company and its subsidiaries
possess all Environmental Permits required for the operation of
the Business pursuant to Environmental Laws as in effect on the
date hereof, all such Environmental Permits are in effect,
there are no pending or to the best knowledge of the Company
threatened proceedings to revoke such Environmental Permits and
the Company and its subsidiaries are, to the best knowledge of
the Company, in compliance with all terms and conditions
thereof, except for such failures to possess or comply with
Environmental Permits as would not, individually or in the
aggregate, have a Material Adverse Effect on the Company.
(c) Except as set forth on Section 3.13 of the
Company Disclosure Schedule, and except for matters which would
not, individually or in the aggregate, have a Material Adverse
Effect on the Company, neither the Company nor any subsidiary
has received any written notification that the Company or any
subsidiary as a result of any of the current or past operations
of the Business, or any property currently
-21-<PAGE>
or formerly owned or leased in connection with the Business, is
or may be the subject of any proceeding, investigation, claim,
lawsuit or order by any Governmental Entity or other person as
to whether (i) any Remedial Action is or may be needed to
respond to a Release or threat of Release into the environment
of Hazardous Substances as defined under Environmental Laws as
in effect on or prior to the date hereof; (ii) any
Environmental Liabilities and Costs imposed by, under or
pursuant to Environmental Laws as in effect on or prior to the
date hereof shall be sought, or proceeding commenced, related
to or arising from the current or past operations of the
Business; or (iii) the Company or any subsidiary is or may be a
"potentially responsible party" for a Remedial Action, pursuant
to any Environmental Law as in effect on or prior to the date
hereof, for the costs of investigating or remediating Releases
or threatened Releases into the environment of Hazardous
Substances, whether or not such Release or threatened Release
has occurred or is occurring at properties currently or
formerly owned or operated by the Company and its subsidiaries;
(d) Except as set forth on Section 3.13 of the
Company Disclosure Schedule, and except for the ACO's and
Environmental Permits, none of the Company and its subsidiaries
has entered into any written agreement with any Governmental
Entity by which the Company or any subsidiary has assumed
responsibility, either directly or as a guarantor or surety,
for the remediation of any condition arising from or relating
to a Release of Hazardous Substances as defined under
Environmental Laws as in effect on or prior to the date hereof
into the environment in connection with the Business, including
for cost recovery with respect to such Releases or threatened
Releases;
(e) Except as set forth on Section 3.13 of the
Company Disclosure Schedule, and except for the matters covered
by the ACO's, there is not now and has not been at any time in
the past, a Release in connection with the current or former
conduct of the Business of substances that would constitute
Hazardous Substances as regulated under Environmental Laws as
in effect on or prior to the date hereof for which the Company
or any subsidiary is required or is reasonably likely to be
required to perform a Remedial Action pursuant to Environmental
Laws as currently in effect, or will incur Environmental
Liabilities and costs that would, individually or in the
aggregate, have a Material Adverse Effect on the Company.
-22-<PAGE>
(f) For purposes of this Section:
(i) "ACO" means either of the Administrative
Consent orders relating to the Fair Lawn, New Jersey or
the Bridgewater, New Jersey properties executed by the New
Jersey Department of Environmental Protection ("NJDEP") on
August 29, 1985; such ACOs were entered into by the NJDEP
and the Fisher Scientific division of Allied-Signal Inc.
and titled In the Matter of Fisher Scientific Division and
the Administrative Consent order executive by the NJDEP on
July 31, 1986 and entered into by the NJDEP and Allied-
Signal Inc. titled In the Matter of Allied-Signal Inc.,
ECRA Case #'s 85820, 85821, 85822, 85823, 85824, 85825,
85826, 86049, 86103.
(ii) "Business" means the current and former
businesses of the Company and its subsidiaries including,
but not limited to, businesses or subsidiaries that have
been previously sold by the Company, its subsidiaries or
any predecessors thereto.
(iii) "Environmental Laws" means all Laws relat-
ing to the protection of the environment, or to any emis-
sion, discharge, generation, processing, storage, holding,
abatement, existence, Release, threatened Release or
transportation of any Hazardous Substances, including, but
not limited to, (i) CERCLA, the Resource Conservation and
Recovery Act, the Clean Water Act, the Clean Air Act, the
Toxic Substances Control Act, as amended (the "TSCA"),
property transfer statutes or requirements and (ii) all
other requirements pertaining to reporting, licensing,
permitting, investigation or remediation of emissions,
discharges, Releases or threatened Releases of Hazardous
Substances into the air, surface water, groundwater or
land, or relating to the manufacture, processing, distri-
bution, use, sale, treatment, receipt, storage, disposal,
transport or handling of Hazardous Substances.
(iv) "Environmental Liabilities and Costs" means
all damages, natural resource damages, claims, losses,
expenses, costs, obligations, and liabilities (collec-
tively, "Losses"), whether direct or indirect, known or
unknown, current or potential, past, present or future,
imposed by, under or pursuant to Environmental Laws, in-
cluding, but not limited to, all Losses related to Reme-
dial Actions, and all fees, capital costs, disbursements,
penalties, fines and expenses of counsel, experts, con-
tractors, personnel and consultants based on, arising out
of or otherwise in respect of (i) the Company, any subsid-
iary (including predecessors and former subsidiaries) or
-23-<PAGE>
property owned, used or leased by the Company or any sub-
sidiary in respect of the Business at any time; (ii) con-
ditions existing on, under, around or above any such prop-
erty; and (iii) expenditures necessary to cause any such
property or the Company or any subsidiary to be in compli-
ance with requirements of Environmental Laws.
(v) "Environmental Permits" means any federal,
state, provincial or local permit, license, registration,
consent, order, administrative consent order, certificate,
approval or other authorization necessary for the conduct
of the Business as currently conducted under any Environ-
mental Law.
(vi) "Hazardous Substances" means any substance
that (a) is defined, listed or identified or otherwise
regulated as a "hazardous waste," "hazardous material" or
"hazardous substance" "toxic substance," "hazardous air
pollution," "polluted," or "contaminated" or words of sim-
ilar meaning and regulatory effect under CERCLA, TSCA or
the Resource Conservation and Recovery Act or any other
Environmental Law or analogous state law (including, with-
out limitation, radioactive substances, polycholorinated-
biphenyls, petroleum and petroleum derivatives and prod-
ucts) or (b) requires investigation, removal or remedia-
tion under applicable Environmental Law.
(vii) "ISRA" means the Industrial Site Recovery
Act of New Jersey, N.J.S.A. 13:1K-6 et seq.
(viii) "Laws" means all (A) constitutions, trea-
ties, statutes, laws (including, but not limited to, the
common law), rules, regulations, ordinances or codes of
any Governmental Entity, (B) Environmental Permits, and
(C) orders, decisions, injunctions, judgments, awards and
decrees of any Governmental Entity.
(ix) "Release" means as defined in CERCLA or the
Resource Conservation and Recovery Act, without limiting
its application to violations or alleged violations of
those statutes, but not including any discharge, spill or
emission that is the subject of, and in compliance with an
Environmental Permit.
(xi) "Remedial Action" means all actions re-
quired by Governmental Entity pursuant to Environmental
Law or otherwise taken as necessary to comply with Envi-
ronmental Law to (i) clean up, remove, treat or in any
other way remediate any Hazardous Substances; (ii) prevent
-24-<PAGE>
the release of Hazardous Substances so that they do not
migrate or endanger or threaten to endanger public health
or welfare or the environment; or (iii) perform studies,
investigations or monitoring in respect of any such mat-
ter.
SECTION 3.14 Absence of Certain Changes. Except
as disclosed in the SEC Reports filed prior to the date of
this Agreement or as disclosed in announcements attached in
Section 3.14 of the Company Disclosure Schedule, concerning
future performance of the Company, since March 31, 1996, (i)
the Company has conducted its business only in the ordinary
course consistent with past practice and (ii) there has not
been any Material Adverse Effect on the Company.
SECTION 3.15 Rights Agreement. The Company and
the Company Board have authorized all necessary action to
amend the Rights Agreement (without redeeming the Rights) so
that none of the execution or delivery of this Agreement, the
making of the Offer, the acquisition of Shares pursuant to
the Offer or the consummation of the Merger will (i) cause
any Rights issued pursuant to the Rights Agreement to become
exercisable or to separate from the stock certificates to
which they are attached, (ii) cause FSI or any of their Af-
filiates to be an Acquiring Person (as each such term is de-
fined in the Rights Agreement) or (iii) trigger other pro-
visions of the Rights Agreement, including giving rise to a
Distribution Date (as such term is defined in the Rights
Agreement), and such amendment shall be in full force and ef-
fect from and after the date hereof.
SECTION 3.16 Brokers. Except for the engagement
of the Investment Bankers (as defined in Section 3.17), none
of the Company, any of its subsidiaries, or any of their
respective officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage
fees, commissions or finder's fees in connection with the
transactions contemplated by this Agreement.
SECTION 3.17 Opinion of Investment Bankers. The
Company has received the written opinion of each of Lazard
Freres & Co. LLC and Salomon Brothers Inc (the "Investment
Bankers") to the effect that, as of August 7, 1997, the
consideration to be received by the holders of Common Shares
pursuant to the Merger is fair to the Company's stockholders
from a financial point of view.
-25-<PAGE>
SECTION 3.18 Material Contracts. The Company has
provided or made available to FSI (i) true and complete cop-
ies of all written material contracts and agreements ("Mate-
rial Contracts"), or (ii) with respect to such Material Con-
tracts that have not been reduced to writing, a written de-
scription thereof, each of which is listed on Section 3.18 of
the Company Disclosure Schedule. Neither the Company nor any
of its subsidiaries is, or has received any notice or has any
knowledge that any other party is, in default in any respect
under any such Material Contract, except for those defaults
which would not reasonably be likely, either individually or
in the aggregate, to have a Material Adverse Effect with re-
spect to the Company; and there has not occurred any event
that, with the lapse of time or the giving of notice or both,
would constitute such a material default.
SECTION 3.19 Board Recommendation. The Company
Board, at a meeting duly called and held, has (a) determined
that this Agreement and the transactions contemplated hereby,
taken together, are advisable and in the best interests of
the Company and its stockholders, and (b) subject to the
other provisions hereof, resolved to recommend that the hold-
ers of the Common Shares approve this Agreement and the
transactions contemplated herby, including the Merger.
SECTION 3.20 Required Company Vote. The Company
Stockholder Approval, being the affirmative vote of a major-
ity of the Common Shares, is the only vote of the holders of
any class or series of the Company's securities necessary to
approve this Agreement, the Merger and the other transactions
contemplated hereby.
SECTION 3.21 Intellectual Property.
The Company and its subsidiaries own or have the
valid right to use all material Intellectual Property used in
or necessary to the business, free and clear of all liens,
claims, and encumbrances and, except for the License Agree-
ments set forth on Section 3.21(a) of the Company Disclosure
Schedule, free and clear of all material licenses to third
parties. As employed herein, the term "Intellectual Prop-
erty" shall mean: (i) registered and unregistered trade-
marks, service marks, slogans, trade names, logos and trade
dress (collectively, and together with the good will associ-
ated with each, "Trademarks"); (ii) patents, patent applica-
tions and invention disclosures (collectively, "Patents");
(iii) registered and unregistered copyrights, including, but
not limited to, copyrights in software and databases (col-
lectively, "Copyrights"); (iv) software programs and data-
bases (together, "Software"); (v) unpatented or unpatentable
-26-<PAGE>
methods, devices, technology, trade secrets, proprietary
information and know-how (collectively, "Technology"); and
(vi) agreements pursuant to which the Company or a subsidiary
has obtained or granted the right to use any of the foregoing
(collectively, or other agreements to which the Company or
any subsidiary is a party relating to the development, ac-
quisition, use, sale or licensure of Intellectual Property
"License Agreements").
SECTION 3.22 Related Party Transactions. Except
as set forth in Section 3.23 of the Disclosure Schedule here-
to, no director, officer, partner, "affiliate" or "associate"
(as such terms are defined in Rule 12b-2 under the Exchange
Act) of the Company or any of its subsidiaries (or, with
respect to clause (i) of this sentence, to the knowledge of
the Company, its employees) (i) has borrowed any monies from
or has outstanding any indebtedness or other similar
obligations to the Company or any of its subsidiaries; (ii)
owns any direct or indirect interest of any kind in, or is a
director, officer, employee, partner, affiliate or associate
of, or consultant or lender to, or borrower from, or has the
right to participate in the management, operations or profits
of, any person or entity which is (1) a competitor, supplier,
customer, distributor, lessor, tenant, creditor or debtor of
the Company or any of its subsidiaries, (2) engaged in a
business related to the business of the Company or any of its
subsidiaries, (3) participating in any transaction to which
the Company or any of its subsidiaries is a party or (iii) is
otherwise a party to any contract, arrangement or
understanding with the Company or any of its subsidiaries.
SECTION 3.23 State Takeover Statutes. The Company
Board has taken such action so that no statute, takeover
statute or similar statute or regulation of the State of
Delaware (and, to the knowledge of the Company after due in-
quiry, of any other state or jurisdiction) applies to this
Agreement, the Merger, or any of the other transactions con-
templated hereby. Except for the Rights Agreement and except
as set forth in Section 3.23 of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries has
any rights plan, preferred stock or similar arrangement which
have any of the aforementioned consequences in respect of the
transactions contemplated hereby.
SECTION 3.24 Labor Relations and Employment.
(a) Except as set forth on Section 3.24(a) of the
Company Disclosure Schedule and except for matters which
would not (other than in the case of clause (iii) or (iv) of
this sentence) result in a Material Adverse Effect, (i) there
-27-<PAGE>
is no labor strike, dispute, slowdown, stoppage or lockout
actually pending, or, to the best knowledge of the Company,
threatened against the Company or any of its subsidiaries,
and during the past three years there has not been any such
action; (ii) to the best knowledge of the Company, no union
claims to represent the employees of the Company or any of
its subsidiaries; (iii) neither the Company nor any of its
subsidiaries is a party to or bound by any collective bargaining
or similar agreement with any labor organization, or work rules
or practices agreed to with any labor organization or employee
association applicable to employees of the Company or any of
its subsidiaries; (iv) none of the employees of the Company
or any of its subsidiaries is represented by any labor
organization and the Company does not have any knowledge of
any current union organizing activities among the employees
of the Company or any of its subsidiaries, nor does any ques-
tion concerning representation exist concerning such
employees; (v) the Company and its subsidiaries are, and have
at all times been, in material compliance with all applicable
laws respecting employment and employment practices, terms
and conditions of employment, wages, hours of work and
occupational safety and health, and are not engaged in any
unfair labor practices as defined in the National Labor Rela-
tions Act or other applicable law, ordinance or regulation;
(vi) there is no unfair labor practice charge or complaint
against the Company or any of its subsidiaries pending or, to
the knowledge of the Company, threatened before the National
Labor Relations Board or any similar state or foreign agency;
(vii) there is no grievance arising out of any collective
bargaining agreement or other grievance procedure; (viii) no
charges with respect to or relating to the Company or any of
its subsidiaries are pending before the Equal Employment Op-
portunity Commission or any other agency responsible for the
prevention of unlawful employment practices; (ix) neither the
Company nor any of its subsidiaries has received notice of
the intent of any federal, state, local or foreign agency
responsible for the enforcement of labor or employment laws
to conduct an investigation with respect to or relating to
the Company or any of its subsidiaries and no such
investigation is in progress; and (x) there are no com-
plaints, lawsuits or other proceedings pending or to the best
knowledge of the Company threatened in any forum by or on be-
half of any present or former employee of the Company or any
of its subsidiaries alleging breach of any express or implied
contract of employment, any law or regulation governing
employment or the termination thereof or other
discriminatory, wrongful or tortious conduct in connection
with the employment relationship.
-28-<PAGE>
(b) To the best knowledge of the Company, since
the enactment of the Worker Adjustment and Retraining Notifi-
cation ("WARN") Act, there has not been (i) a "plant closing"
(as defined in the WARN Act) affecting any site of employment
or one or more facilities or operating units within any site
of employment or facility of the Company or any of its sub-
sidiaries; or (ii) a "mass layoff" (as defined in the WARN
Act) affecting any site of employment or facility of the Com-
pany or any of its subsidiaries; nor has the Company or any
of its subsidiaries been affected by any transaction or
engaged in layoffs or employment terminations sufficient in
number to trigger application of any similar state or local
law. Except as set forth in Section 3.24(b) of the Company
Disclosure Schedule, to the best knowledge of the Company,
none of the employees of the Company or any of its subsidi-
aries has suffered an "employment loss" (as defined in the
WARN Act) since three months prior to the date of this Agree-
ment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF FSI
FSI represents and warrants to the Company as fol-
lows:
SECTION 4.01 Organization and Qualification. FSI
is a corporation duly organized, validly existing and in good
standing under the laws of its state or jurisdiction of
incorporation and is in good standing as a foreign corpora-
tion in each other jurisdiction where the properties owned,
leased or operated, or the business conducted, by it require
such qualification and where failure to be in good standing
or to so qualify would have a Material Adverse Effect on FSI.
The term "Material Adverse Effect on FSI", as used in this
Agreement, means any change in or effect on the business, fi-
nancial condition, results of operations or reasonably for-
seeable prospects of FSI or any of its subsidiaries that
would be materially adverse to FSI.
SECTION 4.02 Authority Relative to this Agree-
ment.
(a) FSI has full corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by
-29-<PAGE>
the Board of Directors of FSI and no other corporate pro-
ceedings on the part of FSI are necessary to authorize this
Agreement or to consummate the transactions so contemplated.
This Agreement has been duly and validly executed and
delivered by FSI and, assuming this Agreement constitutes a
valid and binding obligation of the Company, this Agreement
constitutes a valid and binding agreement of FSI, enforceable
against FSI in accordance with its terms.
(b) Other than in connection with, or in com-
pliance with, the provisions of the DGCL with respect to the
transactions contemplated hereby, the Exchange Act, the secu-
rities laws of the various states and the HSR Act, no autho-
rization, consent or approval of, or filing with, any Govern-
mental Entity is necessary for the consummation by the Compa-
ny of the transactions contemplated by this Agreement other
than authorizations, consents and approvals the failure to
obtain, or filings the failure to make, which would not, in
the aggregate, have a Material Adverse Effect on FSI.
SECTION 4.03 No Violation. Neither the execution
or delivery of this Agreement by FSI nor the consummation by
FSI of the transactions contemplated hereby will (i) consti-
tute a breach or violation of any provision of the Certifi-
cate of Incorporation or By-Laws of FSI or (ii) constitute a
breach, violation or default (or any event which, with notice
or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the perfor-
mance required by, or result in the creation of any lien or
encumbrance upon any of the properties or assets of FSI
under, any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument to which FSI is
a party or by which it or any of its properties or assets are
bound, other than breaches, violations, defaults, termina-
tions, accelerations or creation of liens and encumbrances
which, in the aggregate would not have a Material Adverse
Effect on FSI.
SECTION 4.04 Information. None of the information
supplied by FSI in writing (other than projections of future
financial performance) specifically for inclusion or incorpo-
ration by reference in (i) the Form S-4 or (ii) the Other
Filings will, at the respective times filed with the SEC or
other Governmental Entity and, in addition, in the case of
the Proxy Statement, at the date it or any amendment or sup-
plement is mailed to stockholders, at the time of the Special
Meeting and at the Effective Time, contain any untrue state-
ment of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make
the statements made therein, in light of the circumstances
-30-<PAGE>
under which they were made, not misleading. Notwithstanding
the foregoing, no representation is made by FSI with respect
to statements made in any of the foregoing documents based
upon information supplied by the Company.
SECTION 4.05 Financing. Schedule 6.02(e) of the
disclosure schedule delivered by FSI and attached hereto (the
"FSI Disclosure Schedule") sets forth true and complete cop-
ies of written documentation from third parties which pro-
vides for financing in amounts sufficient to consummate the
transactions contemplated hereby as contemplated by Section
6.02(e).
SECTION 4.06 Delaware Law. FSI was not immedi-
ately prior to the execution of this Agreement, an "inter-
ested stockholder" within the meaning of Section 203 of the
DGCL.
SECTION 4.07 Information. FSI represents and
warrants that, as of the date hereof, neither FSI, its
representatives nor affiliates has formed an actual belief
that any of the representations or warranties of the Company
are untrue or incorrect in any material respect.
ARTICLE V
COVENANTS
SECTION 5.01 Conduct of Business of the Company.
Except as contemplated by this Agreement or as expressly
agreed to in writing by FSI, during the period from the date
of this Agreement to the Effective Time, the Company will,
and will cause each of its subsidiaries to, conduct its op-
erations according to its ordinary and usual course of busi-
ness and consistent with past practice and use its and their
respective reasonable best efforts to preserve intact their
current business organizations, keep available the services
of their current officers and employees and preserve their
relationships with customers, suppliers, licensors, licens-
ees, advertisers, distributors and others having business
dealings with them and to preserve goodwill. Without limit-
ing the generality of the foregoing, and except as (x) other-
wise expressly provided in this Agreement, (y) required by
law, or (z) set forth on Section 5.01 of the Company Disclo-
sure Schedule, prior to the Effective Time, the Company will
not, and will cause its subsidiaries not to, without the con-
sent of FSI (which consent shall not be unreasonably with-
held):
-31-<PAGE>
(i) except with respect to annual bonuses made
in the ordinary course of business consistent with past
practice, adopt or amend in any material respect any
bonus, profit sharing, compensation, severance, termina-
tion, stock option, stock appreciation right, pension,
retirement, employment or other employee benefit agree-
ment, trust, plan or other arrangement for the benefit or
welfare of any director, officer or employee of the Com-
pany or any of its subsidiaries or increase in any manner
the compensation or fringe benefits of any director,
officer or employee of the Company or any of its subsid-
iaries or pay any benefit not required by any existing
agreement or place any assets in any trust for the benefit
of any director, officer or employee of the Company or any
of its subsidiaries (in each case, except with respect to
employees and directors in the ordinary course of business
consistent with past practice);
(ii) incur any indebtedness for borrowed money
in excess of $1,000,000, other than indebtedness under
existing lines of credit drawn to fund working capital
(defined as accounts receivable plus inventory minus
accounts payable) up to $25 million;
(iii) expend funds for capital expenditures in
excess of $1,000,000;
(iv) sell, lease, license, mortgage or otherwise
encumber or subject to any lien or otherwise dispose of
any of its properties or assets other than immaterial
properties or assets (or immaterial portions of properties
or assets), except in the ordinary course of business con-
sistent with past practice;
(v) (x) declare, set aside or pay any dividends
on, or make any other distributions in respect of, any of
its capital stock (except (A) as contemplated by the
Rights Agreement or the Restricted Unit Plan and (B) for
dividends paid by subsidiaries to the Company with respect
to capital stock and (C) for regular quarterly dividends
in an amount not to exceed the lesser of $0.02 per share
per quarter and the amount paid per share in the immedi-
ately preceding quarter, (y) split, combine or reclassify
any of its capital stock or issue or authorize the issu-
ance of any other securities in respect of, in lieu of or
in substitution for shares of its capital stock or (z)
purchase, redeem or otherwise acquire any shares of capi-
tal stock of the Company or any of its subsidiaries or any
other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
-32-<PAGE>
(vi) authorize for issuance, issue, deliver,
sell or agree or commit to issue, sell or deliver (whether
through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or other-
wise), pledge or otherwise encumber any shares of its cap-
ital stock or the capital stock of any of its subsid-
iaries, any other voting securities or any securities con-
vertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible
securities or any other securities or equity equivalents
(including without limitation stock appreciation rights)
(other than issuances upon exercise of Options or pursuant
to the Stock Plans or the Rights Agreement);
(vii) amend its Restated Certificate of Incorpo-
ration, By-Laws or equivalent organizational documents or
alter through merger, liquidation, reorganization, re-
structuring or in any other fashion the corporate struc-
ture or ownership of any material subsidiary of the Com-
pany;
(viii) make or agree to make any acquisition of
assets which is material to the Company and its subsidiar-
ies, taken as a whole, except for (x) purchases of inven-
tory in the ordinary course of business or (y) pursuant to
purchase orders entered into in the ordinary course of
business which do not call for payments in excess of
$10,000,000 per annum; or
(ix) settle or compromise any shareholder de-
rivative suits arising out of the transactions contem-
plated hereby or any other litigation (whether or not com-
menced prior to the date of this Agreement) or settle, pay
or compromise any claims not required to be paid, indivi-
dually in an amount in excess of $1,000,000, other than in
consultation and cooperation with FSI, and, with respect
to any such settlement, with the prior written consent of
FSI.
SECTION 5.02 Access to Information. From the date
of this Agreement until the Effective Time, the Company will,
and will cause its subsidiaries, and each of their respective
officers, directors, employees, counsel, advisors and repre-
sentatives (collectively, the "Company Representatives") to,
give FSI and their respective officers, employees, counsel,
advisors, representatives (collectively, the "FSI Representa-
tives") and representatives of financing sources identified
by FSI reasonable access, upon reasonable notice and during
normal business hours, to the offices and other facilities
-33-<PAGE>
and to the books and records of the Company and its subsid-
iaries and will cause the Company Representatives and the
Company's subsidiaries to furnish FSI and the FSI Representa-
tives and representatives of financing sources identified by
FSI with such financial and operating data and such other
information with respect to the business and operations of
the Company and its subsidiaries as FSI and representatives
of financing sources identified by FSI may from time to time
reasonably request. FSI agrees that any information fur-
nished pursuant to this Section 5.02 will be subject to the
provisions of the letter agreement dated June 23, 1997
between Thomas H. Lee Company ("THL") and the Company (the
"Confidentiality Agreement").
SECTION 5.03 Efforts.
(a) Each of the Company and FSI shall, and the
Company shall cause each of its subsidiaries to, make all
necessary filings with Governmental Entities as promptly as
practicable in order to facilitate prompt consummation of the
transactions contemplated by this Agreement. In addition,
each of FSI and the Company will use its reasonable best
efforts (including, without limitation, payment of any
required fees) and will cooperate fully with each other to
(i) comply as promptly as practicable with all governmental
requirements applicable to the transactions contemplated by
this Agreement, including the making of all filings necessary
or proper under applicable laws and regulations to consummate
and make effective the transactions contemplated by this
Agreement, including, but not limited to, cooperation in the
preparation and filing of the Form S-4 and any actions or
filings related thereto, the Proxy Statement or other foreign
filings and any amendments to any thereof and (ii) obtain
promptly all consents, waivers, approvals, authorizations or
permits of, or registrations or filings with or notifications
to (any of the foregoing being a "Consent"), any Governmental
Entity necessary for the consummation of the transactions
contemplated by this Agreement (except for such Consents the
failure of which to obtain would not prevent or materially
delay the consummation of the Merger). Subject to the Confi-
dentiality Agreement, FSI and the Company shall furnish to
one and other such necessary information and reasonable as-
sistance as FSI or the Company may reasonably request in con-
nection with the foregoing.
(b) Without limiting Section 5.03(a), FSI and the
Company shall each (i) promptly make or cause to be made the
filings required of such party under the HSR Act with respect
to the Merger; (ii) use its best efforts to avoid the entry
of, or to have vacated or terminated, any decree, order, or
-34-<PAGE>
judgment that would restrain, prevent or delay the
consummation of the Merger, including without limitation
defending through litigation on the merits any claim asserted
in any court by any party; and (iii) take any and all steps
which, in such party's judgment, are commercially reasonable
to avoid or eliminate each and every impediment under any
antitrust, competition, or trade regulation law that may be
asserted by any Governmental Entity with respect to the
Merger so as to enable consummation thereof to occur as soon
as reasonably possible. Each party hereto shall promptly
notify the other parties of any communication to that party
from any Governmental Entity and permit the other parties to
review in advance any proposed communication to any Govern-
mental Entity. FSI and the Company shall not (and shall
cause their respective affiliates and representatives not to)
agree to participate in any meeting with any Governmental
Entity in respect of any filings, investigation or other
inquiry unless it consults with the other party in advance
and, to the extent permitted by such Governmental Entity,
gives the other party the opportunity to attend and partici-
pate thereat. Subject to the Confidentiality Agreement, each
of the parties hereto will coordinate and cooperate fully
with the other parties hereto in exchanging such information
and providing such assistance as such other parties may rea-
sonably request in connection with the foregoing and in seek-
ing early termination of any applicable waiting periods under
the HSR Act or in connection with other Consents. Each of
the Company and FSI agrees to respond promptly to and comply
fully with any request for additional information or docu-
ments under the HSR Act. Subject to the Confidentiality
Agreement, the Company will provide FSI, and FSI will provide
the Company, with copies of all correspondence, filings or
communications (or memoranda setting forth the substance
thereof) between such party or any of its representatives, on
the one hand, and any Governmental Entity or members of its
staff, on the other hand, with respect to this Agreement and
the transactions contemplated hereby.
(c) FSI shall use commercially reasonable efforts
to cause the financing necessary for satisfaction of the
condition in Section 6.02(e) to be obtained on the terms set
forth in the commitment letters attached to Schedule 6.02(e)
of the FSI Disclosure Schedule; provided, however, that FSI
shall be entitled to (i) enter into commitments for equity
and debt financing with other nationally recognized financial
institutions, which commitments will have substantially the
same terms as those set forth in the commitment letters and
which commitments may be substituted for such commitment
letters and (ii) modify the capital structure set forth in
such commitment letters so long as the total committed common
-35-<PAGE>
equity equals at least $350 million (including Common Shares
to be retained), the aggregate Cash Price paid to all
stockholders of the Company is no less than otherwise would
have been paid in accordance with this Agreement and such
modified financing is no less certain than that set forth in
such commitment letter.
SECTION 5.04 Public Announcements. The Company,
on the one hand, and FSI, on the other hand, agree to consult
promptly with each other prior to issuing any press release
or otherwise making any public statement with respect to the
Merger and the other transactions contemplated hereby, agree
to provide to the other party for review a copy of any such
press release or statement, and shall not issue any such
press release or make any such public statement prior to such
consultation and review, unless required by applicable law or
any listing agreement with a securities exchange.
SECTION 5.05 Employee Benefit Arrangements.
(a) FSI agrees that the Company will honor, and,
from and after the Effective Time, Parent will cause the
Surviving Corporation to honor, in accordance with their
respective terms as in effect on the date hereof, the employ-
ment, severance and bonus agreements and arrangements to
which the Company is a party which are set forth on Sections
3.07 and 5.05 of the Company Disclosure Schedule.
(b) FSI agrees that for a period of two years
following the Effective Time, the Surviving Corporation shall
continue the (i) compensation (including bonus and incentive
awards) programs and plans and (ii) employee benefit and wel-
fare plans, programs, contracts, agreements and policies
(including insurance and pension plans), fringe benefits and
vacation policies which are currently provided by the Com-
pany; provided that notwithstanding anything in this Agree-
ment to the contrary the Surviving Corporation shall not be
required to maintain any individual plan or program so long
as the benefit plan and agreements maintained by the Surviv-
ing Corporation are, in the aggregate, not materially less
favorable than those provided by the Company immediately
prior to the date of this Agreement.
SECTION 5.06 Indemnification; Directors' and
Officers' Insurance.
(a) From and after the Effective Time, FSI shall,
and shall cause the Surviving Corporation to, indemnify,
defend and hold harmless the present and former officers,
-36-<PAGE>
directors, employees and agents of the Company and its sub-
sidiaries (the "Indemnified Parties") against all losses,
claims, damages, expenses or liabilities arising out of or
related to actions or omissions or alleged actions or omis-
sions occurring at or prior to the Effective Time (i) to the
full extent permitted by Delaware law or, if the protections
afforded thereby to an Indemnified Person are greater, (ii)
to the same extent and on the same terms and conditions
(including with respect to advancement of expenses) provided
for in the Company's Restated Certificate of Incorporation
and By-Laws and agreements in effect at the date hereof (to
the extent consistent with applicable law), which provisions
will survive the Merger and continue in full force and effect
after the Effective Time. Without limiting the foregoing,
(i) FSI shall, and shall cause the Surviving Corporation to,
periodically advance expenses (including attorney's fees) as
incurred by an Indemnified Person with respect to the forego-
ing to the full extent permitted under applicable law, and
(ii) any determination required to be made with respect to
whether an Indemnified Party shall be entitled to indemnifi-
cation shall, if requested by such Indemnified Party, be made
by independent legal counsel selected by the Surviving Corpo-
ration and reasonably satisfactory to such Indemnified Party.
(b) FSI agrees that the Company, and, from and
after the Effective Time, the Surviving Corporation, shall
cause to be maintained in effect for not less than six years
from the Effective Time the current policies of the direc-
tors' and officers' liability insurance maintained by the
Company; provided that the Surviving Corporation may substi-
tute therefor other policies of at least the same coverage
amounts and which contain terms and conditions not less ad-
vantageous to the beneficiaries of the current policies and
provided that such substitution shall not result in any gaps
or lapses in coverage with respect to matters occurring prior
to the Effective Time; and provided, further, that the Sur-
viving Corporation shall not be required to pay an annual
premium in excess of 250% of the last annual premium paid by
the Company prior to the date hereof and if the Surviving
Corporation is unable to obtain the insurance required by
this Section 5.06(c) it shall obtain as much comparable in-
surance as possible for an annual premium equal to such maxi-
mum amount.
(c) This Section 5.06 shall survive the con-
summation of the Merger at the Effective Time, is intended to
benefit the Company, the Surviving Corporation and the Indem-
nified Parties, shall be binding on all successors and as-
signs of FSI and the Surviving Corporation, and shall be
enforceable by the Indemnified Parties.
-37-<PAGE>
SECTION 5.07 Notification of Certain Matters. FSI
and the Company shall promptly notify each other of (i) the
occurrence or non-occurrence of any fact or event which would
be reasonably likely (A) to cause any representation or war-
ranty contained in this Agreement to be untrue or inaccurate
in any material respect at any time from the date hereof to
the Effective Time or (B) to cause any covenant, condition or
agreement under this Agreement not to be complied with or
satisfied and (ii) any failure of the Company, or FSI, as the
case may be, to comply with or satisfy any covenant, condi-
tion or agreement to be complied with or satisfied by it
hereunder; provided, however, that no such notification shall
affect the representations or warranties of any party or the
conditions to the obligations of any party hereunder. Each
of the Company and FSI shall give prompt notice to the other
parties hereof of any notice or other communication from any
third party alleging that the consent of such third party is
or may be required in connection with the transactions con-
templated by this Agreement.
SECTION 5.08 Rights Agreement. Subject to the
provisions of Section 5.15, the Company covenants and agrees
that it will not (i) redeem the Rights, (ii) amend the Rights
Agreement or (iii) take any action which would allow any Per-
son (as defined in the Rights Agreement) other than FSI to
acquire beneficial ownership of 15% or more of the Common
Shares without causing a Distribution Date (as such term is
defined in the Rights Agreement) to occur. Notwithstanding
the foregoing, the Company may take any of the actions de-
scribed in the preceding sentence, if the Company Board
determines in good faith, after consultation with counsel,
that failing to take such action could reasonably be expected
to result in a breach of fiduciary duties of the Company
Board.
SECTION 5.09 State Takeover Laws. The Company
shall, upon the request of FSI, take all reasonable steps to
assist in any challenge by FSI to the validity or applicabil-
ity to the transactions contemplated by this Agreement,
including the Merger, of any state takeover law.
SECTION 5.10 No Solicitation.
(a) From and after the date hereof until the
termination of this Agreement, the Company and its affiliates
shall not, and shall instruct their respective officers,
directors, employees, agents or other representatives (in-
cluding, without limitation, any investment banker, attorney
or accountant retained by the Company or its subsidiaries)
(the "Representatives") not to,
-38-<PAGE>
(i) directly or indirectly solicit, ini-
tiate, or encourage (including by way of furnishing non-
public information or assistance), or take any other
action to facilitate, any inquiries or proposals from any
person that constitute, or may reasonably be expected to
lead to, an acquisition, purchase, merger, consolidation,
share exchange, recapitalization, business combination or
other similar transaction involving 20% or more of the
assets or any securities of, any merger consolidation or
business combination with, or any public announcement of a
proposal, plan, or intention to do any of the foregoing
by, the Company or any of its subsidiaries (such transac-
tions being referred to herein as "Acquisition Propos-
als"),
(ii) enter into, maintain, or continue dis-
cussions or negotiations with any person in furtherance of
such inquiries or to obtain an Acquisition Proposal,
(iii) agree to or endorse any Acquisition
Proposal, or
(iv) authorize or permit the Company's or
any of its affiliates' Representatives to take any such
action;
provided, however, that nothing in this Agreement shall pro-
hibit the Company Board from
(A) furnishing information to, and engaging in
discussions or negotiations with, any person or entity
that makes an unsolicited written, bona fide proposal to
acquire the Company and/or its subsidiaries pursuant to a
merger, consolidation, share exchange, tender offer or
other similar transaction, but only to the extent that
independent legal counsel (who may be the Company's regu-
larly engaged outside legal counsel) advises the Company
Board in good faith that failure to furnish such informa-
tion or engage in such discussions or negotiations with
such person or entity would be a breach of the fiduciary
duties of the Company Board, provided, that prior to tak-
ing such action, the Company Board notifies FSI of its
intentions and obtains an executed confidentiality agree-
ment from the appropriate parties substantially similar to
the Confidentiality Agreement,
(B) failing to make or withdrawing or modifying
its recommendation referred to in Section 5.14 if the Com-
pany Board, after consultation with and based upon the
-39-<PAGE>
advice of independent legal counsel (who may be the Com-
pany's regularly engaged outside legal counsel), deter-
mines in good faith that such action is necessary for the
Company board to comply with its fiduciary duties to
stockholders under applicable law, and
(C) disclosing to the Company's shareholders a
position contemplated by Rules 14d-9 and 14e-2 promulgated
under the Exchange Act with respect to any tender offer,
or taking any other legally required action (including,
without limitation, the making of public disclosure as may
be necessary or advisable under applicable securities
laws);
and provided further, that the Company's or the Board of Direc-
tors' exercise of its rights under clause (A), (B) or (C) above
shall not constitute a breach by the Company of this Agreement.
(b) The Company will promptly notify FSI of the
receipt of any Acquisition Proposal, the terms and conditions
of such proposal and the identity of the person making it. The
Company also will promptly notify FSI of any change to or modi-
fication of such Acquisition Proposal and the terms and condi-
tions thereof.
(c) Subject to the provisions of subsection (b), the
Company shall immediately cease and cause its affiliates and
its and their Representatives to cease any and all existing
activities, discussions or negotiations with any parties (other
than FSI) conducted heretofore with respect to any of the fore-
going, and shall use its reasonable best efforts to cause any
such parties in possession of confidential information about
the Company that was furnished by or on behalf of the Company
to return or destroy all such information in the possession of
any such party (other than FSI) or in the possession of any
Representative of any such party.
SECTION 5.11 Affiliate Letters. Prior to the Clos-
ing Date, the Company shall deliver to FSI a letter identifying
all persons who are, at the time this Agreement is submitted
for approval to the stockholders of the Company, "affiliates"
of the Company for purposes of Rule 145 under the Securities
Act. The Company shall use its reasonable best efforts to
cause each such person to deliver to FSI on or prior to the
Closing Date a written agreement in a form reasonably
satisfactory to FSI and the Company.
SECTION 5.12 ISRA Requirements. Prior to the Clos-
ing Date, the Company shall be responsible for compliance with
-40-<PAGE>
the requirements of ISRA applicable to this transaction relat-
ing to obtaining the necessary approvals for each property sub-
ject to ISRA that will allow this transaction to be completed.
The Company shall consult with FSI with respect to its ISRA
filings and strategy, including allowing FSI to comment on such
filing where time permits, and shall provide copies of all cor-
respondence to and from the DEP with respect to ISRA compli-
ance.
SECTION 5.13 Reports. The Company shall provide FSI
with monthly financial statements, broken out by business seg-
ment, no later than the fifth business day following the end of
each calendar month following the date of this Agreement.
SECTION 5.14 Stockholders' Meeting.
(a) The Company, acting through the Company Board,
shall, in accordance with applicable law:
(i) duly call, give notice of, convene
and hold a special meeting of its stockholders (the
"Special Meeting") as soon as practicable following the
execution of this Agreement for the purpose of consider-
ing and taking action upon this Agreement;
(ii) prepare and file with the SEC a pre-
liminary proxy statement relating to this Agreement, and
use its reasonable efforts (A) to obtain and furnish the
information required to be included by the SEC in a
definitive proxy statement (the "Proxy Statement") and
Form S-4 in which the Proxy Statement will be included
(collectively with the Proxy Statement, the "Form S-4")
and, after consultation with Parent, to respond promptly
to any comments made by the SEC with respect to the pre-
liminary proxy statement and cause the Proxy Statement
to be mailed to its stockholders and (B) to obtain the
necessary approvals of the Merger and this Agreement by
its stockholders; and
(iii) subject to the fiduciary duties of
the Company Board as provided in Section 5.10, include
in the Proxy Statement the recommendation of the Company
Board that stockholders of the Company vote in favor of
the approval of this Agreement.
(b) The Company represents that the Form S-4 will
comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed
with the SEC and on the date first published, sent or given
to the Company's stockholders, shall not contain any untrue
-41-<PAGE>
statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to
make the statements made therein, in light of the circum-
stances under which they were made, not misleading, except
that no representation is made by the Company with respect to
information supplied by FSI in writing for inclusion in the
Form S-4. Each of the Company, on the one hand, and FSI, on
the other hand, agree promptly to correct any information
provided by either of them for use in the Form S-4 if and to
the extent that it shall have become false or misleading, and
the Company further agrees to take all steps necessary to
cause the Form S-4 as so corrected to be filed with the SEC
and to be disseminated to the holders of Shares, in each
case, as and to the extent required by applicable federal se-
curities laws.
ARTICLE VI
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 6.01 Conditions. The respective obliga-
tions of FSI and the Company to consummate the Merger are
subject to the satisfaction, at or before the Effective Time,
of each of the following conditions:
(a) Stockholder Approval. The stockholders of the
Company shall have duly approved the transactions con-
templated by this Agreement (the "Stockholder Approval"), if
required by applicable law.
(b) Form S-4. The Form S-4 shall have become
effective under the Securities Act and shall not be the sub-
ject of any stop order or proceedings seeking a stop order,
and any material "blue sky" and other state securities laws
applicable to the registration and qualification of Common
Shares to be retained in the Merger shall have been complied
with.
(c) Solvency Letters. Each of the Board of
Directors of the Company and FSI shall have received a
solvency letter, in form and substance and from an indepen-
dent evaluation firm reasonably satisfactory to it, as to the
solvency of the Company and its subsidiaries on a consoli-
dated basis after giving effect to the transactions contem-
plated by this Agreement, including all financings contem-
plated hereby.
(d) Orders and Injunctions. An order shall have
been entered in any action or proceeding before any United
-42-<PAGE>
States federal or state court or governmental agency or other
United States regulatory or administrative agency or
commission (an "Order"), or a preliminary or permanent
injunction by a United States court of competent jurisdiction
shall have been issued and remain in effect (an
"Injunction"), which, in either case, would have the effect
of (i) preventing consummation of the Offer or Merger, or
(ii) imposing material limitations on the ability of FSI
effectively to acquire or hold the business of the Company
and its subsidiaries taken as a whole or to exercise full
rights of ownership of the Shares acquired by it; provided,
however, that in order to invoke this condition, FSI shall
have used in its judgment, its commercially reasonable best
efforts to prevent such Order or Injunction or ameliorate the
effects thereof.
(e) Illegality. There shall have been any United
States federal or state statute, rule or regulation enacted
or promulgated after the date of this Agreement that could in
the reasonable judgment of FSI result in any of the material
adverse consequences referred to in paragraph (c) above.
(f) HSR Act. Any waiting period (and any ex-
tension thereof) under the HSR Act applicable to the Merger
shall have expired or terminated.
SECTION 6.02 Conditions to Obligations of FSI.
The obligations of FSI to effect the Merger are further sub-
ject to the following conditions:
(a) Representations and Warranties. The repre-
sentations and warranties of the Company set forth in this
Agreement shall be true and correct in all respects in each
case as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date; provided,
however, that, with respect to representations and warranties
other than Sections 3.02 and 3.03(a) and representations and
warranties otherwise qualified by Material Adverse Effect,
for purposes of this Section 6.02(a), such representations
and warranties and statements shall be deemed to be true and
correct in all respects unless the failure or failures of
such representations and warranties and statements to be so
true and correct, individually or in the aggregate, would
result in a Material Adverse Effect with respect to the Com-
pany. FSI shall have received a certificate signed on behalf
of the Company by the chief executive officer and the chief
financial officer of the Company to the effect set forth in
this paragraph.
-43-<PAGE>
(b) Performance of Obligations of the Company.
The Company shall have performed the obligations required to
be performed by it under this Agreement at or prior to the
Closing Date, including but not limited to its obligations
pursuant to Section 6.06 hereof, except for such failures to
perform as have not had or would not, individually or in the
aggregate, have a Material Adverse Effect with respect to the
Company or materially adversely affect the ability of the
Company to consummate the transactions contemplated hereby.
(c) Consents, etc. FSI shall have received evi-
dence, in form and substance reasonably satisfactory to it,
that all licenses, permits, consents, approvals, authoriza-
tions, qualifications and orders of governmental authorities
and other third parties set forth in Section 3.03 of the Com-
pany Disclosure Schedule shall have been obtained.
(d) No Litigation. There shall not be pending by
any Governmental Entity any suit, action or proceeding (or by
any other person any suit, action or proceeding which has a
reasonable likelihood of success), (i) challenging or seeking
to restrain or prohibit the consummation of the Merger or any
of the other transactions contemplated by this Agreement or
seeking to obtain from FSI or any of their affiliates any
damages that are material to any such party (ii) seeing to
prohibit or limit the ownership or operation by the Company
or any of its subsidiaries of any material portion of the
business or assets of the Company or any of its subsidiaries,
to dispose of or hold separate any material portion of the
business or assets of the Company or any of its subsidiaries,
as a result of the Merger or any of the other transactions
contemplated by this Agreement or (iii) seeking to impose
limitations on the ability of FSI (or any designee of FSI),
to acquire or hold, or exercise full rights of ownership of,
any Common Shares, including, without limitation, the right
to vote Common Shares on all matters properly presented to
the stockholders of the Company.
(e) Financing. The Company shall have received
the proceeds of financing pursuant to the commitment letters
set forth on Section 6.02(e) of the FSI Disclosure Schedule
on terms and conditions set forth therein (or (as modified in
accordance with Section 5.03(c)) on such other terms and
conditions, or involving such other financing sources, as FSI
and the Company shall reasonably agree and are not materially
more onerous) in amounts sufficient to consummate the
transactions contemplated by this Agreement, including,
without limitation (i) to pay, with respect to all Common
Shares in the Merger, the cash portion of the Merger
Consideration pursuant to Section 2.01(c)(iv), (ii) to
-44-<PAGE>
refinance the outstanding indebtedness of the Company, (iii)
to pay any fees and expenses in connection with the
transactions contemplated by this Agreement or the financing
thereof and (iv) to provide for the working capital needs of
the Company following the Merger, including, without
limitation, if applicable, letters of credit.
SECTION 6.03 Conditions to Obligation of the Com-
pany. The obligation of the Company to effect the Merger is
further subject to the following conditions:
(a) Representations and Warranties. The repre-
sentations and warranties of FSI set forth in this Agreement
shall be true and correct in all respects, in each case as of
the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, provided, that,
for purposes of this Section 6.03(a), with respect to repre-
sentations and warranties other than Section 3.02(a) and the
representations and warranties otherwise qualified by Mate-
rial Adverse Effect, such representations and warranties
shall be deemed to be true and correct in all respects unless
the failure or failures of such representations and warran-
ties to be so true and correct, individually or in the ag-
gregate, would result in a Material Adverse Effect of FSI.
The Company shall have received certificates signed on behalf
of FSI, respectively, by an authorized officer of FSI, re-
spectively, to the effect set forth in this paragraph.
(b) Performance of Obligations of FSI. FSI shall
have performed the obligations required to be performed by it
under this Agreement at or prior to the Closing Date (except
for such failures to perform as have not had or could not
reasonably be expected, either individually or in the ag-
gregate, to have a Material Adverse Effect with respect to
FSI or adversely affect the ability of FSI to consummate the
transactions herein contemplated or perform its obligations
hereunder).
ARTICLE VII
TERMINATION; AMENDMENTS; WAIVER
SECTION 7.01 Termination. This Agreement may be
terminated and the Merger contemplated hereby may be aban-
doned at any time prior to the Effective Time, notwithstand-
ing approval thereof by the stockholders of the Company:
-45-<PAGE>
(a) by the mutual written consent of Parent and
the Company, by action of their respective Boards of Di-
rectors;
(b) by FSI or the Company if the Merger shall not
have been consummated on or before March 31, 1998; provided,
however, that neither FSI nor the Company may terminate this
Agreement pursuant to this Section 7.01(b) if such party
shall have materially breached this Agreement;
(c) by FSI or the Company if any court of compe-
tent jurisdiction in the United States or other United States
Governmental Entity has issued an order, decree or ruling or
taken any other action restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or
other action shall have become final and nonappealable;
provided, however, that the party seeking to terminate this
Agreement shall have used its reasonable best efforts to
remove or lift such order, decree, ruling or other action;
(d) by the Company if, prior to the Effective
Time, any person has made a bona fide proposal relating to an
Acquisition Transaction, or has commenced a tender or ex-
change offer for the Common Shares, and the Company Board
determines in good faith (i) after consultation with its fi-
nancial advisors, that such transaction constitutes a Higher
Offer and (ii) after consultation with counsel, that failure
to approve such proposal and terminate this Agreement could
reasonably be expected to result in a breach of fiduciary
duties of the Company Board; provided, however, that, not-
withstanding anything in this Agreement to the contrary, the
termination of this Agreement by the Company in compliance
with this Section 7.01(d) shall not be deemed to violate any
other obligations of the Company under this Agreement;
(e) by FSI if the Company breaches its covenant in
Section 5.08 or takes an action pursuant to the second
sentence of Section 5.08;
(f) by FSI, if the Company Board shall have (i)
failed to recommend to the stockholders of the Company that
they give the Stockholder Approval, (ii) withdrawn or modi-
fied in a manner adverse to FSI its approval or recommenda-
tion of this Agreement or the Merger, (iii) shall have ap-
proved or recommended an Acquisition Transaction, (iv) shall
have resolved to effect any of the foregoing or (v) shall
have otherwise taken steps to impede the Stockholder
Approval; or
-46-<PAGE>
(g) by either FSI or the Company, if the
Stockholder Approval shall not have been obtained by reason
of the failure to obtain the required vote upon a vote held
at a duly held meeting of stockholders or at any adjournment
thereof.
SECTION 7.02 Effect of Termination. In the event
of the termination of this Agreement pursuant to Section
7.01, this Agreement shall forthwith become void and have no
effect, without any liability on the part of any party or its
directors, officers or stockholders, other than the provi-
sions of the last sentence of Section 5.02 and the provisions
of this Section 7.02 and Section 7.03, which shall survive
any such termination. Nothing contained in this Section 7.02
shall relieve any party from liability for any breach of this
Agreement.
SECTION 7.03 Fees and Expenses.
(a) In addition to any other amounts which may be
payable or become payable pursuant to any other paragraph of
this Section 7.03, in the event that this Agreement is termi-
nated for any reason other than a material breach by FSI, the
Company shall promptly reimburse the THL or FSI, as the case
may be, for all out-of-pocket expenses and fees (including,
without limitation, fees payable to all banks, investment
banking firms and other financial institutions, and their
respective agents and counsel, and all fees of counsel,
accountants, financial printers, experts and consultants to
THL and its affiliates), whether incurred prior to, on or
after the date hereof, in connection with the Merger and the
consummation of all transactions contemplated by this
Agreement, and the financing thereof up to $12 million.
Except as otherwise specifically provided for herein, whether
or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by
the party incurring such expenses.
(b) In the event that (i) this Agreement is ter-
minated pursuant to Section 7.01(d) or (f), or (ii) any
Person (other than THL or any of its affiliates) shall have
made, or proposed, communicated or disclosed in a manner
which is or otherwise becomes public an Acquisition Proposal
prior to the Special Meeting, the Stockholder Approval has
not been obtained and, thereafter, this Agreement is termi-
nated then the Company shall promptly pay FSI a termination
fee of $30 million (the "Termination Fee"), provided that in
no event shall more than one Termination Fee be payable by
the Company.
-47-<PAGE>
(c) The prevailing party in any legal action
undertaken to enforce this Agreement or any provision hereof
shall be entitled to recover from the other party the costs
and expenses (including attorneys' and expert witness fees)
incurred in connection with such action.
SECTION 7.04 Amendment. This Agreement may be
amended by the Company and FSI at any time before or after
any approval of this Agreement by the stockholders of the
Company but, after any such approval, no amendment shall be
made which decreases the Merger Consideration or which ad-
versely affects the rights of the Company's stockholders
hereunder without the approval of such stockholders. This
Agreement may not be amended except by an instrument in writ-
ing signed on behalf of all the parties.
SECTION 7.05 Extension; Waiver. At any time prior
to the Effective Time, FSI, on the one hand, and the Company,
on the other hand, may (i) extend the time for the perfor-
mance of any of the obligations or other acts of the other,
(ii) waive any inaccuracies in the representations and war-
ranties contained herein of the other or in any document,
certificate or writing delivered pursuant hereto by the other
or (iii) waive compliance by the other with any of the agree-
ments or conditions. Any agreement on the part of any party
to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of such
party.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 Non-Survival of Representations and
Warranties. The representations and warranties made in this
Agreement shall not survive beyond the Effective Time. Not-
withstanding the foregoing, the agreements set forth in Sec-
tion 2.04, Section 2.05, the last sentence of Section
5.03(a), Section 5.05 and Section 5.06 shall survive the
Effective Time indefinitely (except to the extent a shorter
period of time is explicitly specified therein).
SECTION 8.02 Entire Agreement; Assignment.
(a) This Agreement (including the documents and
the instruments referred to herein) and the Confidentiality
Agreement constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral,
-48-<PAGE>
among the parties with respect to the subject matter hereof
and thereof.
(b) Neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned by any of
the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other party (except
that FSI may assign its rights, interest and obligations to
any affiliate or direct or indirect subsidiary of FSI without
the consent of the Company provided that no such assignment
shall relieve FSI of any liability for any breach by such
assignee). Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforce-
able by the parties and their respective successors and as-
signs.
SECTION 8.03 Validity. The invalidity or unen-
forceability of any provision of this Agreement shall not af-
fect the validity or enforceability of any other provision of
this Agreement, each of which shall remain in full force and
effect.
SECTION 8.04 Notices. All notices, requests,
claims, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given when
delivered in person, by overnight courier or telecopier to
the respective parties as follows:
If to FSI:
Thomas H. Lee Company
75 State Street, Ste. 2600
Boston, Massachusetts 02109
Attention: Scott M. Sperling
Anthony J. Di Novi
Telecopier Number: (617) 227-3514
with a copy to:
Skadden, Arps, Slate, Meager & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Eric L. Cochran, Esq.
Telecopier Number: (212) 735-2000
-49-<PAGE>
If to the Company:
Fisher Scientific International Inc.
Liberty Lane
Hampton, New Hampshire 03842
Attention: General Counsel
Telecopier Number: (603) 929-2703
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Barry A. Bryer, Esq.
Telecopier Number: (212) 403-2000
or to such other address as the person to whom
notice is given may have previously furnished to
the other in writing in the manner set forth above;
provided that notice of any change of address shall
be effective only upon receipt thereof.
SECTION 8.05 Governing Law. This
Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws
thereof.
SECTION 8.06 Descriptive Headings. The
descriptive headings herein are inserted for
convenience of reference only and are not intended
to be part of or to affect the meaning or
interpretation of this Agreement.
SECTION 8.07 Counterparts. This
Agreement may be executed in two or more
counterparts, each of which shall be deemed to be
an original, but all of which shall constitute one
and the same agreement.
SECTION 8.08 Parties in Interest.
Except with respect to Sections 2.04, 5.05 and 5.06
(which are intended to be for the benefit of the
persons identified therein, and may be enforced by
such persons), this Agreement shall be binding upon
and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or
implied, is intended to confer upon any other
person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
-50-<PAGE>
SECTION 8.09 Certain Definitions. As
used in this Agreement:
(a) the term "affiliate", as applied to
any person, shall mean any other person directly or
indirectly controlling, controlled by, or under
common control with, that person. For the purposes
of this definition, "control" (including, with
correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"),
as applied to any person, means the possession,
directly or indirectly, of the power to direct or
cause the direction of the management and policies
of that person, whether through the ownership of
voting securities, by contract or otherwise;
(b) the term "Person" or "person" shall
include individuals, corporations, partnerships,
trusts, other entities and groups (which term shall
include a "group" as such term is defined in
Section 13(d)(3) of the Exchange Act); and
(c) the term "Subsidiary" or
"subsidiaries" means, with respect to Parent, the
Company or any other person, any corporation,
partnership, joint venture or other legal entity of
which Parent, the Company or such other person, as
the case may be (either alone or through or
together with any other subsidiary), owns, directly
or indirectly, stock or other equity interests the
holders of which are generally entitled to more
than 50% of the vote for the election of the board
of directors or other governing body of such
corporation or other legal entity.
SECTION 8.10 Specific Performance. The
parties hereto agree that irreparable damage would
occur in the event that any of the provisions of
this Agreement were not performed in accordance
with their specific terms or were otherwise
breached. It is accordingly agreed that the
parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and
provisions hereof in any court of the United States
or any state having jurisdiction, this being in
addition to any other remedy to which they are
entitled at law or in equity.
-51-<PAGE>
IN WITNESS WHEREOF, each of the parties
has caused this Agreement to be executed on its
behalf by its respective officer thereunto duly
authorized, all as of the day and year first above
written.
FISHER SCIENTIFIC INTERNATIONAL INC.
By: /s/ Paul M. Meister
Name: Paul M. Meister
Title: Senior Vice President and
Chief Financial Officer
FSI MERGER CORP.
By: /s/ Scott M. Sperling
Name: Scott M. Sperling
Title: Chairman of the Board
-52-
FOR IMMEDIATE RELEASE August 7, 1997
FISHER SCIENTIFIC REACHES AGREEMENT WITH THOMAS H. LEE COMPANY
PROVIDING FOR $1.4 BILLION RECAPITALIZATION OF THE COMPANY
-- STOCKHOLDERS TO RECEIVE $51.00 PER SHARE IN CASH FOR
97% OF FULLY DILUTED SHARES
-- EXISTING STOCKHOLDERS TO RETAIN APPROXIMATELY 10.3%
COMMON STOCK OWNERSHIP IN THE RECAPITALIZED COMPANY
FISHER REPORTS 14% INCREASE IN NET INCOME FOR SECOND QUARTER
Hampton, NH and Boston, MA -- Fisher Scientific International
Inc. (NYSE:FSH) ("Fisher" or the "Company") and Thomas H. Lee
Company ("THL Co.") announced today that they have reached a
definitive agreement regarding an approximately $1.4 billion
recapitalization of Fisher, pursuant to which FSI Merger Corp.
("FSI"), an entity formed by THL Co., will be merged with and
into the Company. Other investors in FSI include DLJ Merchant
Banking Partners and Chase Capital Partners.
Under the terms of the agreement, approximately 97% of the
fully diluted shares of Fisher common stock will be converted
into the right to receive $51.00 per share in cash (ap-
proximately $1.06 billion in the aggregate). Pursuant to an
election process, the remaining shares will be retained by ex-
isting stockholders and will represent approximately 10.3% com-
mon stock ownership in the recapitalized company. Consummation
of the merger is subject, among other things, to Company
stockholder approval at a special stockholder meeting to be
held in late November or early December 1997, receipt of the<PAGE>
necessary financing and customary conditions including the
absence of a material adverse change to the Company. The fi-
nancing necessary for the transaction has been fully committed
by The Chase Manhattan Bank and Merrill Lynch & Co.
"We are delighted and look forward to having Thomas H. Lee
Company as a new investor in Fisher. Our Board conducted an
extensive process for the purpose of developing a favorable fi-
nancial alternative for the Fisher stockholders. This trans-
action allows stockholders to receive cash for most of their
shares at a very attractive price," said Paul M. Montrone, the
president and chief executive officer of Fisher. "We believe
that the agreement we are announcing today demonstrates Thomas
H. Lee Company's confidence in the future of Fisher."
"We are excited to have the opportunity to invest in the world-
wide leader in the distribution of scientific products and ser-
vices," said Anthony J. DiNovi and Scott M. Sperling, Managing
Directors of Thomas H. Lee Company. "This is a company with
outstanding management, a superb record of growth and is well
positioned to expand its global leadership in serving the needs
of tens of thousands of customers in over 140 countries."
The Fisher Board has unanimously approved the adoption of the
agreement. Lazard Freres & Co. LLC and Salomon Brothers Inc
- 2 -<PAGE>
have each provided fairness opinions to the Company's Board in
connection with the transaction. Wachtell, Lipton, Rosen &
Katz is acting as the Company's counsel. Chase Securities Inc.
and Merrill Lynch & Co. acted as financial advisors and Skad-
den, Arps, Slate, Meagher & Flom LLP acted as legal advisor to
Thomas H. Lee Company.
Fisher also announced today the results for the three and six
months ended June 30, 1997. Net income for the period
increased 14% to $9.6 million, or 46 cents per fully diluted
share, from $8.4 million, or 46 cents per fully diluted share,
for the second quarter of last year. Excluding $3.8 million
($6.4 million pretax) of nonrecurring charges, net income would
have been $13.4 million, or 64 cents per fully diluted share.
Excluding $3.2 million ($5.3 million pretax) of similar costs,
net income would have been $11.6 million or 62 cents per fully
diluted share in the second quarter of 1996.
Sales in the second quarter reached a new high of $542.6 mil-
lion compared with sales of $532.2 million in the second quar-
ter of 1996. Continued growth in Fisher's research, safety,
international and manufacturing businesses during the period
was partially offset by lower sales to the U.S. clinical labo-
ratory market and the adverse impact of the strong U.S. dollar
on international sales.
- 3 -<PAGE>
For the first six months of 1997, net income increased 60% to
$20.6 million, or 99 cents per fully diluted share, from $12.9
million, or 74 cents per fully diluted share, for the first
half of last year. Excluding $5.0 million ($8.3 million pre-
tax) of nonrecurring costs, net income would have been $25.6
million or $1.22 per fully diluted share, for the first six
months of this year. Excluding $6.5 million ($10.8 million
pretax) of nonrecurring costs, net income would have been $19.4
million or $1.05 per fully diluted share, for the first half of
1996. Sales were $1.07 billion for the first half of 1997 com-
pared with $1.05 billion for the corresponding period last
year.
Similar to other national distributors, Fisher utilizes the
services of United Parcel Services for a significant portion of
its domestic shipments. Although the Company has implemented a
logistics plan to minimize the impact of the current strike, a
prolonged work stoppage at UPS could have an adverse impact on
future results of the Company.
Fisher Scientific is the world leader in serving science, pro-
viding more than 245,000 products and services to research,
healthcare, industrial, educational and government customers in
145 countries.
- 4 -<PAGE>
Thomas H. Lee Company is a Boston-based private equity firm
focused on identifying and acquiring substantial ownership po-
sitions in growth companies. Founded in 1974, THL Co. cur-
rently manages approximately $3 billion of committed capital.
Recent transactions include Experian (formerly TRW) Information
Systems, Homeside Lending, Rayovac, Safelite Glass and
Syratech.
- 5 -<PAGE>
<TABLE>
FISHER SCIENTIFIC INTERNATIONAL INC.
FINANCIAL HIGHLIGHTS
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ -----------------
1997 1996 1997 1996
------ ------ ------ ------
<S> <C> <C> <C> <C>
Sales $ 542.6 $ 532.2 $ 1,069.3 $ 1,048.2
Cost of sales 394.1 389.3 774.5 769.7
Selling, general and administrative expense 127.4 119.0 248.9 237.4
------ ------ ------ ------
Income from operations 21.1 23.9 45.9 41.1
Interest and other expense, net 3.2 8.4 7.7 17.5
------ ------ ------ ------
Income before income taxes 17.9 15.5 38.2 23.6
Income tax expense 8.3 7.1 17.6 10.7
------ ------ ------ ------
Net income $ 9.6 $ 8.4 $ 20.6 $ 12.9
======== ======== ========= =========
Earnings per common share
Primary $ 0.47 $ 0.49 $ 1.00 $ 0.76
========= ========= ======== =========
Fully diluted (1) $ 0.46 $ 0.46 $ 0.99 $ 0.74
========= ========= ======== =========
Weighted average common shares outstanding
Primary $ 20.7 $ 17.1 $ 20.7 $ 16.9
========= ========= ======== =========
Fully diluted (1) $ 20.9 $ 20.5 $ 20.9 $ 20.4
========= ========= ======== =========
Note: Amounts may not calculate due to rounding.
<FN>
<F1>
(1) Fully diluted earnings per common share reflect the
dilutive effect of stock options and assume the conversion
of convertible subordinated notes and related earnings
adjustments (prior to the actual June 1996 conversion).
</FN>
</TABLE>
- 6 -<PAGE>
<TABLE>
FISHER SCIENTIFIC INTERNATIONAL INC.
BALANCE SHEETS
(IN MILLIONS)
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
-------- ------------
(UNAUDITED)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 16.3 $ 24.7
Receivables, net 316.6 316.6
Inventories 245.9 256.0
Other current assets 70.1 55.5
------- -------
Total current assets 648.9 652.8
Property, plant and equipment, net 212.8 209.5
Goodwill 295.1 292.7
Other assets 103.0 107.7
------- -------
Total assets $1,259.8 $1,262.7
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term debt 19.6 14.6
Accounts payable 218.5 234.5
Accrued and other current liabilities 126.0 143.9
------- -------
Total current liabilities 364.1 393.0
Long-term debt 295.5 281.5
Other liabilities 194.1 202.0
------- -------
Total liabilities 853.7 876.5
Total stockholders' equity 406.1 386.2
------- -------
Total liabilities and stockholders' equity $ 1,259.8 $ 1,262.7
========== ========
</TABLE>
- 7 -
FIRST AMENDMENT TO RIGHTS AGREEMENT
This First Amendment (the "Amendment"), dated as of
this 7th day of August, 1997, amends the Rights Agreement (the
"Rights Agreement"), dated as of June 9, 1997, between Fisher
Scientific International Inc., a Delaware corporation (the
"Company"), and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent (the "Rights Agent"). All terms not otherwise
defined herein shall have the meaning given such terms in the
Rights Agreement.
WHEREAS, the Board of Directors of the Company has
approved and adopted an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of August 7, 1997, by and between
FSI Merger Corp., a Delaware corporation, and the Company;
WHEREAS, the Merger Agreement contemplates certain
amendments to the Rights Agreement; and
WHEREAS, pursuant to Section 27 of the Rights Agree-
ment, the Company may, subject to certain limitations, amend
the Rights Agreement without the approval of any holders of
Right Certificates.
NOW, THEREFORE, in consideration of the foregoing and
the mutual agreements set forth herein, the Company and the
Rights Agent hereby agree as follows:
1. Amendment.
(a) Section 1(a) of the Rights Agreement is hereby
amended by adding the following at the end of the first sen-
tence thereof:
", or FSI Merger Corp. a Delaware corporation
("FSI"), or any Affiliate of FSI, provided,
however, that for purposes of this Agreement,
Associates of FSI or its Affiliates shall not
be deemed to beneficially own any shares of
Common Stock which are beneficially owned by
FSI or its Affiliates".
(b) Clause (ii) of Section 3(a) of the
Rights Agreement is hereby amended by adding the fol-
lowing to the end of each of the second and third par-
enthetical clauses therein:
", or FSI or any Affiliate or Associate of
FSI".<PAGE>
(c) Clause (i) of Section 7(a) of the Rights Agree-
ment is hereby amended to read in its entirety as follows:
"(i) the earlier of the Close of Business on June 8,
2007 and immediately prior to the Effective Time (as
defined in the Agreement and Plan of Merger, dated as
of August 7, 1997, by and between FSI and the Company
(the "Merger Agreement")) (the "Final Expiration
Date"),".
(d) Clause (iv) of Section 25(a) of the Rights
Agreement is hereby amended by adding the following at the end
thereof:
"other than pursuant to the Merger Agreement,".
2. Miscellaneous.
(a) Choice of Law. This Amendment shall be deemed
to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed and construed in ac-
cordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
(b) Counterparts. This Amendment may be executed in
one or more counterparts, each of which shall be deemed to be
an original, but all of which together shall constitute one and
the same instrument.
(c) Severability. If any term or provision of this
Amendment is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder
of the terms and provisions of this Amendment shall in no way
be affected, impaired or invalidated.
(d) Existing Terms. The existing terms and condi-
tions of the Rights Agreement shall remain in full force and
effect except as such terms and conditions are specifically
amended or conflict with the terms of this Amendment.
(e) Effective Date. This Amendment shall be effec-
tive on the date hereof, provided, however, that if the Merger
Agreement is terminated in accordance with its terms, then this
Amendment shall immediately and without any further action by
the Company, the Rights Agent or any other Person, be rescinded
in full and the Rights Agreement shall immediately, and without
any further action by the Company, the Rights Agent or any
other Person, be reinstated to its terms and conditions as in
effect prior to the execution hereof by the Company and the
Rights Agent.
- 2 -<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has
caused this Amendment to be executed and delivered by its duly
authorized officer on the day and year first above written.
FISHER SCIENTIFIC
Attest: INTERNATIONAL INC.
By /s/ Todd DuChene By /s/ Paul M. Meister
Name: Todd DuChene Name: Paul M. Meister
Title: Secretary Title: Senior Vice
President and Chief
Financial Officer
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By /s/ Kathryn M. Gallagher By /s/ Marilyn Spisak
Name: Kathryn M. Gallagher Name: Marilyn Spisak
Title: Assistant Vice Title: Vice President
President
- 3 -
