As filed with the Securities and Exchange Commission on January 28, 1999
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------
FISHER SCIENTIFIC INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 5049 02-0451017
(State or other jurisdiction (Primary standard industrial (I.R.S. employer identification number)
of incorporation or organization) classification code number)
</TABLE>
Liberty Lane
Hampton, NH 03842
(603) 926-5911
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Todd M. DuChene, Esq.
Fisher Scientific International Inc.
Liberty Lane
Hampton, NH 03842
(603) 926-5911
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Gregory A. Fernicola, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
(212) 735-3000
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
---------------
If the securities being registered on this form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ] -----------
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] -----------
---------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to Offering Price Aggegate Amount of
Securities to Be Registered Be Registered per Unit(1) Offering Price(1) Registration Fee
- --------------------------------------- --------------- ------------------ ------------------- -----------------
<S> <C> <C> <C> <C>
9% Senior Subordinated Notes due 2008 $200,000,000 100% $200,000,000 $55,600
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
---------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
<PAGE>
SUBJECT TO COMPLETION--DATED JANUARY 28, 1999.
PROSPECTUS
Offer to Exchange All 9% Senior Subordinated Notes due 2008
for 9% Senior Subordinated Notes due 2008, Which Have Been Registered
Under the Securities Act of 1933, As Amended, of
GRAPHIC LOGO
The Exchange Offer will expire at 5:00 P.M.,
New York City time, on , 1999, unless extended.
------------------
Terms of the Exchange Offer:
o We will exchange all outstanding Old Notes that are validly tendered and
not withdrawn prior to the expiration of the Exchange Offer.
o You may withdraw tenders of Old Notes at any time prior to the
expiration of the Exchange Offer.
o We believe that the exchange of Old Notes will not be a taxable exchange
for U.S. federal income tax purposes but you should see "Certain Federal
Income Tax Considerations" on page 83 for more information.
o We will not receive any proceeds from the Exchange Offer.
o The terms of the New Notes are substantially identical to the outstanding
Old Notes, except that the New Notes are registered under the Securities
Act and the transfer restrictions and registration rights relating to the
Old Notes do not apply to the New Notes.
------------------
A discussion of risks that should be considered by holders prior to
tendering their Old Notes is set forth under "Risk Factors" on page 13.
------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
------------------
The date of this prospectus is , 1999.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference into this
prospectus constitute "forward-looking statements" as that term is defined
under the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements, or industry
results, to be materially different from those contemplated or projected,
forecast, estimated or budgeted in or expressed or implied by such
forward-looking statements. Such factors include, among others, the risk and
other factors set forth under "Risk Factors" as well as the following:
o general economic and business conditions;
o industry trends;
o overseas expansion;
o the loss of major customers or suppliers;
o the timing of orders received from customers;
o cost and availability of raw materials;
o changes in business strategy or development plans;
o availability and quality of management;
o the availability, timing and terms of future acquisitions;
o the impact of the "Year 2000" issue;
o the impact of the conversion to the Euro by the European Economic and
Monetary Union; and
o availability, terms and deployment of capital.
You should pay special attention to such forward-looking statements
including, but not limited to, statements relating to (1) our ability to
execute our business strategy, (2) our ability to obtain sufficient resources
to finance our working capital and capital expenditure needs and provide for
our known obligations, (3) industry sales growth and our ability to make
acquisitions and (4) the impact of environmental regulation on our operations.
AVAILABLE INFORMATION
We have filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-4 (together with all
amendments and exhibits, the "Registration Statement") under the Securities
Act, with respect to our offering of the New Notes. This prospectus does not
contain all of the information in the Registration Statement. You will find
additional information about us and the New Notes in the Registration
Statement. Any statements made in this prospectus concerning the provisions of
legal documents are not necessarily complete and you should read the documents
that are filed as exhibits to the Registration Statement.
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and file periodic
reports, registration statements, proxy statements and other information with
the Commission. You may inspect and copy the Registration Statement, including
exhibits, and our periodic reports, registration statements, proxy statements
and other information we file with the Commission at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 or at its regional offices located
at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World
Trade Center, Suite 1300, New York, New York 10048. You can obtain copies of
such material from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
maintains an Internet "website" that contains our reports, registration proxy
and information statements and other information that we file electronically
with the Commission at http://www.sec.gov.
i
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
We incorporate by reference into this prospectus documents which we
previously filed with the Commission. You may request copies of any of these
documents, other than exhibits to such documents, except for exhibits
specifically incorporated by reference in such documents, without charge, upon
written or oral request, from Fisher Scientific International Inc., Liberty
Lane, Hampton, New Hampshire 03842, Attention: Todd M. DuChene, Esq., Vice
President, General Counsel and Secretary, telephone (603) 926-5911.
The following documents we previously filed (File No. 1-10920) with the
Commission are incorporated into this prospectus by reference:
o Annual Report on Form 10-K for the year ended December 31, 1997, as
amended by Form 10-K/A, dated April 17, 1998;
o Proxy Statement, dated April 17, 1998, which was mailed to our
stockholders in connection with the Annual Meeting of Stockholders
held on May 12, 1998;
o Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
o Quarterly Report on Form 10-Q for the quarter ended June 30, 1998;
o Quarterly Report on Form 10-Q for the quarter ended September 30, 1998;
and
o Current Reports on Form 8-K dated January 21, 1998 and December 4, 1998.
All reports and other documents we subsequently file pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act shall be deemed to be
incorporated by reference into this prospectus and to be part of this
prospectus from the date we subsequently file such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this prospectus are deemed to be modified or
superseded for purposes of this prospectus to the extent modified or superseded
by another statement contained in any subsequently filed document also
incorporated by reference in this prospectus. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute part of this prospectus.
ii
<PAGE>
SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. You should
read this summary along with the more detailed information and financial
statements, including the notes to such financial statements, appearing
elsewhere or incorporated by reference into this prospectus. Unless otherwise
indicated, the words "we," "our," "ours" and "us" refer to Fisher Scientific
International Inc., a Delaware corporation, and its subsidiaries. "Fisher"
refers to Fisher Scientific International Inc. All references to "fiscal 1997"
refer to the year ended December 31, 1997 and prior years are referred to in a
corresponding manner. Unless otherwise indicated, industry data contained in
this prospectus is derived from publicly available industry trade journals,
reports and other publicly available sources, which we have not independently
verified, or from estimates we have made which we believe are reasonable but
which we have not independently verified. FOR IMPORTANT FACTORS YOU SHOULD
CONSIDER, PLEASE REFER TO "RISK FACTORS" BEGINNING ON PAGE 13.
Fisher Scientific International Inc.
We are a world leader in serving science, providing more than 245,000
products and services to research, healthcare, industrial, educational and
government customers in 145 countries. We serve as a one-stop source for the
scientific and laboratory needs of our customers, supplying a broad product
offering of leading brands of instruments, research chemicals, clinical
consumables, diagnostics, laboratory workstations and other laboratory
supplies. For the nine months ended September 30, 1998, our total sales and
EBITDA (as defined below) were $1,716.6 million and $130.1 million,
respectively.
The mailing address of our principal executive offices is Liberty Lane,
Hampton, New Hampshire 03842, and our telephone number is (603) 926-5911.
Our Strengths
Market Leadership. We are a leading global provider of high-quality
scientific instruments, equipment, supplies, chemicals and services to the
scientific research, healthcare, industrial, educational and governmental
markets. Based on industry data, management believes that we are a leading
distributor of laboratory products to the U.S. scientific research market and
the number two distributor of clinical laboratory products to the U.S.
healthcare market.
Global Brand. For over 95 years we have been serving science and have
established Fisher Scientific as a global brand name. As a result of our
international presence and publication of The Fisher Catalog, our name and
family of products and services are well-known and respected in each of our
markets. Management believes that The Fisher Catalog is considered one of the
industry's most comprehensive sources for laboratory supplies and equipment. In
addition, we publish the CMS/Fisher Healthcare Catalog, the Fisher Chemical
Catalog, the Fisher Safety Catalog, the Fisher Science Education Catalog and
over a dozen international catalogs. More than one million copies of our
various catalogs are produced and distributed biannually, with supplements
tailored to specific market segments such as biotechnology, research chemicals,
educational materials and occupational health and safety. Our international
catalogs support our worldwide presence.
Diverse Customer Base. Our customer base includes some of the world's
leading pharmaceutical and scientific research companies, representing
approximately 4,200 national reference and independent laboratories, 8,650
hospitals and 146,000 physicians offices. In addition to serving customers in
the traditional scientific-related industries, we have developed relationships
with emerging biotechnology and entrepreneurial businesses. No one customer
accounted for more than 5% of total sales in fiscal 1997. Our top ten research
customers have on average been doing business with us for over 15 years. We
expect to benefit from this diverse and long-standing customer base as these
customers continue to consolidate the number of suppliers they utilize.
Extensive Sourcing and Manufacturing Capabilities. Management believes
that our global sourcing and manufacturing capabilities enhance our ability to
offer our customers the broadest product offering and the best price/quality
relationship. We have sourcing relationships with over 3,200 suppliers
worldwide as well as our own manufacturing plants in the United States and
Europe. Proprietary products, which consist of self-manufactured products and
products sold through exclusive distribution arrangements, represented 40% of
our
1
<PAGE>
total sales in fiscal 1997. Proprietary products provide us with increased
sourcing flexibility and our customers with a complete range of laboratory
supplies. We generated approximately 16% of our total sales in fiscal 1997
through the sale of self-manufactured products such as chemicals, laboratory
equipment and laboratory workstations.
Worldwide Logistics Network. We have developed highly automated and
efficient logistics capabilities, one of the critical links between supplier
and customer. Our U.S. logistics facilities, monitored and coordinated by a
command center in Pittsburgh, Pennsylvania, supply products throughout the U.S.
in an efficient and timely manner. Our 24 U.S. distribution facilities are
complemented by our international locations, including distribution centers in
Canada, Germany, France, England, Belgium, Switzerland, the Netherlands, the
Czech Republic, Japan, Singapore, Korea, Malaysia, Mexico and Australia. In
addition, we use affiliated dealers and distributors to supply products in more
remote international locations. Through our worldwide distribution network, we
distribute an average of 20,000 items every business day, with products
accounting for more than 90% of total sales in fiscal 1997 shipped to customers
within 24 hours of being ordered. Our management believes that this combination
of global logistics, distribution and sourcing capabilities distinguishes us
from other distributors serving the scientific community.
Growing, Recurring and Diversified Revenue Stream. Our management believes
that demand for our products and services is driven primarily by applicable
research and development expenditures. According to data published by the U.S.
National Science Foundation (the "National Science Foundation"), applicable
research and development expenditures have grown at a 4.4% compounded rate over
the last ten years. We benefit from the stable historical growth rates in our
core markets. We also benefit from revenue diversity across different end-user
markets with approximately 49% of total sales in fiscal 1997 derived from sales
to the U.S. research sector, approximately 26% to the U.S. healthcare sector
and approximately 21% to our international customers. Our revenue stream is
also diversified, with no stock keeping unit (SKU) representing more than 1.5%
of total sales in fiscal 1997. The sale of consumable laboratory supplies and
specialty chemicals, which represented approximately 75% of our total sales in
fiscal 1997, provides a stable base of recurring revenues.
Proven and Committed Senior Management Team. Paul M. Montrone, Chairman of
the Board and Chief Executive Officer of Fisher, and Paul M. Meister, Vice
Chairman of the Board, Executive Vice President and Chief Financial Officer of
Fisher, have a demonstrated track record of successfully developing significant
international businesses, including Wheelabrator-Frye Inc., AlliedSignal Inc.,
Henley Manufacturing Corporation, Wheelabrator Technologies Inc., The General
Chemical Group Inc. and Prestolite Wire Corporation. Currently certain members
of our management, including Messrs. Montrone and Meister, own approximately
12% of Fisher's outstanding common stock.
Successful Implementation of Profit Improvement Programs. We are
implementing profit improvement and restructuring programs. Since January 1998,
we have consolidated 8 warehouse facilities and 5 customer service centers.
Management believes that these and other management actions have contributed to
an improvement in EBITDA (as defined below) margins from 7.3% for the nine
months ended September 30, 1997 to 7.6% for the nine months ended September 30,
1998. Our management intends to continue profit improvement initiatives,
including consolidation of additional warehouse and customer service centers
over the next few years. While we have achieved certain improvements in
profitability as a result of these programs, we cannot guarantee that these
improvements will continue, or that we will be able to close additional
warehouses, or that the our current restructuring plan will continue to be
successful.
The Industry
Our market consists of five principal sectors:
(1) scientific research and development activities conducted by
biotechnology, pharmaceutical, chemical, environmental and other
entities;
(2) hospitals' and physicians' offices that perform diagnostic tests on
patients;
(3) commercial and national reference laboratories;
2
<PAGE>
(4) occupational health and safety products used in production and other
activities; and
(5) educational activities in research institutions, medical schools,
universities, colleges, elementary and secondary schools.
Our largest market is the scientific research supply market. According to
a recent study conducted by the Laboratory Products Association, sales to the
scientific research supply market were approximately $5 billion during 1997.
The scientific research market is primarily impacted by the level of spending
on applicable scientific and technology related research and development
("R&D") in the U.S. The National Science Foundation estimates that non-defense
related R&D expenditures increased from $44 billion in 1980 to over $130
billion in 1995, representing a compound annual growth rate of approximately
7.5%. In addition to this growth, non-defense-related R&D expenditures have not
experienced a year-over-year decline since 1960, the year when the National
Science Foundation began publishing such data.
Our second-largest market is the U.S. clinical laboratory testing market.
A recent study by MarketData Enterprises Inc. estimated that sales in the U.S.
clinical laboratory testing market totaled approximately $30 billion in 1997,
up from approximately $27 billion in 1993. Based on these figures, our
management estimates that sales in the clinical testing equipment and supply
market, in which we conduct our clinical business, totaled approximately $6
billion. We estimate that our third-largest market, safety supply, is
approximately $7 billion market.
The markets in which we compete are typically characterized by high
transaction volume (units) with relatively small average order prices. As a
result, customers in these markets incur relatively high average procurement
costs per order. We believe that as end users consolidate their vendor base
and/or outsource their procurement functions to reduce costs, manufacturer use
of distribution and demand for our distribution services, will increase. By
leveraging our distribution and technological capabilities as well as our
national sales force, manufacturers and end users can reduce the cost of
procurement for an expanding list of products.
Over the last few years, the trend toward fewer suppliers has resulted in
consolidation of the fragmented scientific and healthcare distribution markets.
Consolidation benefits larger distributors by presenting them with the
opportunity to leverage large distribution infrastructures over higher sales
volume and more customers. Our merger with Curtin Matheson Scientific ("CMS"),
the merger of VWR Scientific Products Corporation with Baxter Industrial, and
the proposed merger of Allegiance Healthcare Corporation with Cardinal Health,
Inc. are illustrative of this trend. These same trends exist in most
international markets. We are actively seeking acquisition opportunities both
in the U.S. and abroad. See "--Recent Developments."
Products and Services
We currently have over 245,000 products available for delivery from our
electronic and other order-entry systems and are continuously expanding and
refining our product offerings to provide our customers with a complete array
of laboratory and clinical testing supplies. In addition to supplying leading
brands of instruments, supplies and equipment, we manufacture and sell research
chemicals, clinical consumables, instruments, diagnostics, and laboratory
workstations.
Our Products. Our product portfolio is comprised of proprietary products
as well as sourced products. Proprietary offerings consist of self-manufactured
products and products sold through exclusive distribution agreements. Our
management estimates that proprietary products accounted for approximately 40%
of total sales in fiscal 1997. Consumable products, such as laboratory supplies
and specialty chemicals, represented approximately 75% of our total sales in
fiscal 1997.
Sales and Customer Service Professionals. In order to reduce the
complexity of today's scientific research and clinical testing product
offerings, we provide customer support through a worldwide sales and customer
service network. Our direct sales force consists of over 1,000 account
representatives and product/systems sales specialists worldwide. Most of the
members of the our direct sales force have scientific or medical backgrounds,
which enable them to provide technical assistance to the end users of our
products. In addition to performing traditional selling functions, these
representatives provide the basis for a market-driven development program for
new products and services by identifying customer needs and utilizing our
3
<PAGE>
accumulated technical expertise to translate those needs into new services or
products, which may be manufactured by either us or our suppliers. In addition,
our customer service organization includes over 1,000 representatives
worldwide. These customer service representatives, supported by a scientific
and technical staff, respond to end-user product or application questions and
assist our customers with efficient order entry and order expediting.
Fisher Catalog. We have published The Fisher Catalog for over 90 years and
it is a standard reference for the scientific community worldwide. In addition,
we publish the CMS/Fisher Healthcare Catalog, the Fisher Chemical Catalog, the
Fisher Safety Catalog, the Fisher Science Education catalog, as well as several
international catalogs in nine different languages. In 1995, we established an
Internet site (Fishersci.com), which currently features The Fisher Catalog, the
Fisher Chemical Catalog, the Fisher Safety Catalog, the Acros Organics Catalog
of Fine Chemicals and the CMS/Fisher Healthcare Catalog, as well as other
product, safety and general information, all in electronic form for quick and
easy access. Through Fishersci.com, one can browse more than 100,000 items and
over 25,000 images representing 6,000 catalog pages. We continuously add new
products, making our suite of catalogs a dynamic library, one of the most
complete and up-to-date sources of laboratory and safety products available.
Our customers have the ability to place their orders electronically through an
intuitive, integrated and easy-to-use process. We also continue to publish over
a dozen international catalogs to support our growing worldwide presence. We
produce more than one million copies of our various catalogs biannually, with
supplements tailored to specific market segments such as biotechnology,
research chemicals, educational materials and occupational health and safety.
Distribution
Our distribution network comprises 24 locations in the U.S., including a
national distribution center in Somerville, New Jersey, four regional centers
(New Jersey, California, Illinois and Georgia) and 19 local facilities
throughout the United States. We also have two distribution centers in Canada
and France and one each in Germany, England, Belgium, Switzerland, the
Netherlands, the Czech Republic, Japan, Singapore, Korea, Malaysia, Mexico and
Australia. Through our worldwide distribution networks, we distribute an
average of 20,000 items every business day, with products accounting for more
than 90% of total sales in fiscal 1997 shipped to customers within 24 hours of
being ordered.
Manufacturing
We operate principal manufacturing facilities in Fair Lawn, Somerville and
Swedesboro, New Jersey; Two Rivers, Wisconsin; Indiana and Pittsburgh,
Pennsylvania; Huntersville, North Carolina; Loughborough, United Kingdom; Geel,
Belgium; Rochester and Conklin, New York; and Mountain Home, Arkansas. Products
manufactured include research, bulk and organic chemical, laboratory equipment,
laboratory fumehoods, wood, plastic and metal laboratory workstations and
furniture, computer local area network "LAN" cabinets and command bridges,
scientific glassware and plastic labware, and diagnostic and educational
materials. More than one-half of these products are sold directly to end users,
other dealers and distributors, and the balance is sold through our
distribution network.
Our manufacturing customers range from small start-up operations to large
national corporations and government agencies. We are not dependent on any
single customer and are operated on a "stand alone" basis to complement our
distribution organization by providing our sales representatives with a full
range of value added service and product offerings and to position us as a
one-stop source for all of the customer's scientific research and laboratory
needs.
Suppliers
We distribute laboratory instruments, supplies and equipment obtained from
over 3,200 vendors. Vendors generally offer these products to distributors on
substantially similar terms. Although certain products are available from only
a limited number of vendors, we do not anticipate that we will be unable to
purchase any of the products it distributes. Our largest supplier represented
approximately 11% of total sales in fiscal 1997.
Competition
We operate in a highly competitive market. We compete primarily with a
wide range of suppliers and manufacturers that sell their own products directly
to end users. We also compete with other distributors, such as VWR Scientific
Products Corporation in the scientific research market and Allegiance
Healthcare
4
<PAGE>
Corporation in the clinical market. The principal means of competition in the
markets we serve are systems capabilities, breadth and exclusivity of product
offerings, price and service. We believe that we compete effectively in each of
these areas.
Trademarks and Patents
We own or license a number of patents and patent applications that are
important to our businesses. We have more than 200 registered and unregistered
service marks and trademarks for our products and services. Some of our more
significant marks include Accumet, Acros, Biochemical Sciences, Chemalert,
Chemguard, CMS, Curtin Matheson Scientific, Enviroware, Fisher, Fisherbiotech,
Fisherbrand, Fisher Diagnostics, Fisher Healthcare, Fisher Safety, Fisher
Scientific, Gastrak, Hamilton, Histoprep, Isotemp, Marathon, Microprobe,
Optima, Pacific Hemostasis, and Valutrak. Registered trademarks generally can
have perpetual life, provided they are renewed on a timely basis and continue
to be used properly as trademarks, subject to the rights of third parties to
seek cancellation of the marks.
Customers, Seasonality and Backlog
Our sales are not materially dependent upon any single customer or any few
customers. No single customer of ours represented more than 5% of 1997 sales.
Our customers range in size from start-up companies, hospital purchasing
consortiums, and government agencies to nationally and internationally
recognized scientific research, medical and educational institutions. Our sales
are generally related to applicable R&D spending and to clinical testing
practices and are therefore not seasonal to any significant extent. In
addition, no material portion of our business is subject to renegotiation of
profits or termination at the election of the United States Government. Because
our products are, in most cases, sold for immediate shipment, there are no
significant backlogs.
The Recapitalization
Pursuant to the Second Amended and Restated Agreement and Plan of Merger
dated November 17, 1997 (as amended, the "Merger Agreement") between Fisher and
FSI Merger Corp. ("FSI"), a Delaware corporation formed by Thomas H. Lee
Company ("THL Co."), which provided for the merger of FSI with and into Fisher
(the "Merger") and the recapitalization of Fisher (the Merger, the financing of
the Merger and the related transactions are collectively referred to as the
"Recapitalization"), on January 21, 1998, approximately 87% of the fully
diluted shares of Fisher's common stock were converted into the right to
receive $9.65 per share in cash, or approximately $955.0 million in the
aggregate, pursuant to an election process that provided stockholders the right
to elect for each share of Fisher's common stock held, subject to proration,
either $9.65 in cash or to retain one share of common stock, $0.01 par value, in
the recapitalized company.
In connection with the Recapitalization, Fisher entered into and, along
with certain material foreign subsidiaries, are the obligor pursuant to, a new
senior bank credit facility consisting of (1) a $294.2 million term loan
facility (the "Term Facility") and (2) a $175.0 million revolving credit
facility (the "Revolving Credit Facility" and, together with the Term Facility,
the "New Credit Facility"). We financed the Recapitalization with:
o $387.5 million from the issuance of $400.0 million aggregate principal
amount of Fisher's 9% Senior Subordinated Notes due 2008 (the "Existing
Notes");
o $294.2 million of term loan borrowings under the New Credit Facility;
o $150.0 million of proceeds pursuant to a securitization of accounts
receivable (the "Receivables Securitization Facility"); and
o $303.0 million from the sale of Fisher's common stock (the "Equity
Contribution") to THL Co. (through Thomas H. Lee Equity Fund III, L.P.
(the "THL Fund III") and other affiliates of THL Fund III (collectively,
"THL")), DLJ Merchant Banking Partners II, L.P. and affiliates ("DLJMB"),
Chase Equity Associates, L.P. ("Chase Equity") and Merrill Lynch & Co.
("Merrill Lynch" and, together with THL, DLJMB and Chase Equity, the
"Equity Investors"). The proceeds from such bank borrowings, the sale of
the Existing Notes, the Receivables Securitization Facility and the Equity
Contribution were used principally to finance the conversion into cash of
the shares of Fisher's common stock then outstanding which were not
retained by existing stockholders and eligible employees, to refinance
certain of our outstanding indebtedness and to pay related fees and
expenses of the Recapitalization.
5
<PAGE>
Recent Developments
Recent Acquisitions; Possible Transactions; Use of Proceeds
During 1998, we acquired 5 companies for a total cash consideration of
$203 million, including the acquisition in December 1998 of approximately 90%
of Bioblock Scientific S.A. ("Bioblock"), a leading distributor of scientific
and laboratory instrumentation in France, for $134 million (the "Bioblock
Acquisition"). In addition, we acquired additional Bioblock shares in January
1999 for cash consideration of $14 million, bringing our ownership position to
99.4% of the outstanding shares. We are currently in the process of acquiring
the remaining shares in accordance with French law. In January 1999, we also
acquired Columbia Diagnostics Inc., a Virginia-based provider of laboratory
products and supplies to the healthcare industry ("Columbia"), and Structured
Computer Systems, a Connecticut-based provider of procurement and materials
management solutions to businesses ("SCS"), for total cash consideration of
approximately $25 million. We are actively seeking additional strategic
acquisitions. Our acquisition strategy is focused on improving penetration in
select markets across the world in order to expand our global distribution
network. In addition, we seek to expand our proprietary product offering mix of
internally manufactured products to improve our operating margin. As a result,
we are, from time to time, actively involved in discussions with a number of
potential acquisition targets. We cannot guarantee that any potential
acquisition will be consummated or that, despite actively seeking additional
acquisitions, we will be successful or that we will be able to consummate any
acquisition or that it will be successfully integrated into Fisher.
On November 20, 1998, our subsidiary, Fisher Scientific Company, L.L.C.,
entered into a loan agreement (the "Loan Agreement") with LaSalle National Bank,
as lender, pursuant to which we borrowed $8.8 million, funded on the basis of
the Illinois State Treasurer's Economic Program. We will use the amounts
borrowed under the Loan Agreement to finance part of the consolidation of our
Midwestern distribution centers into a facility located in Hanover Park,
Illinois. The Loan Agreement provides for an interest rate of 2.25% plus (1)
until November 20, 2000, the rate for U.S. Treasury Bonds maturing over a two
year period and (2) the rate for U.S. Treasury Bonds maturing over a three year
period thereafter.
We are currently in the process of reviewing strategic alternatives for
our businesses relating to computer software development, electronic commerce,
materials procurement and military maintenance, repair and operations supply,
excluding the business of our Procurement Services Inc. subsidiary. Although it
is currently anticipated that the majority of these businesses will be spun-off
during the first or second quarter of 1999, and the remainder will be sold, we
cannot guarantee that such transactions will occur. None of these businesses
are material individually or in the aggregate to our business or operations.
We used the proceeds from the offering of our 9% Senior Subordinated Notes
due 2008 (the "Old Notes") which closed on November 20, 1998 (the "Offering")
to temporarily pay down debt outstanding under the Revolving Credit Facility
and to fund working capital needs which would have been historically funded
through the Receivables Securitization Facility. Should we reach an agreement
with respect to any of the acquisitions presently being discussed or any other
acquisitions, we intend to reborrow additional amounts under the Revolving
Credit Facility and to sell additional receivables under the Receivables
Securitization Facility to make such acquisitions and for working capital and
other general corporate purposes. If we were to consummate one or more such
acquisitions funded directly or indirectly by borrowings under the Revolving
Credit Facility and/or the Receivables Securitization Facility, our leverage
could substantially increase. At September 30, 1998, after giving effect to the
Offering and the application of the net proceeds therefrom, we would have had
approximately $309 million in aggregate availability under the Revolving Credit
Facility and the Receivables Securitization Facility.
6
<PAGE>
Summary of the Exchange Offer
Securities Offered...... We are offering up to $200,000,000 aggregate
principal amount of new 9% Senior Subordinated Notes
due 2008 which have been registered under the
Securities Act (the "New Notes"). The form and terms
of the New Notes are identical in all material
respects to those of the Old Notes. The New Notes,
however, will not contain certain transfer
restrictions, registration rights and liquidated
damages provisions relating to the Old Notes. The Old
Notes may be exchanged for New Notes under the
Exchange Offer described in this prospectus under the
headings "The Exchange Offer" and "Exchange Offer;
Registration Rights." If the Exchange Offer is not
completed by June 18, 1999, the interest rate on the
Old Notes will increase by $0.192 per week per $1,000
amount of the Old Notes until the Exchange Offer is
completed.
The Exchange Offer...... We are offering to exchange up to $200,000,000
aggregate principal amount of the New Notes for up to
$200,000,000 aggregate principal amount of Old Notes.
The Old Notes were not registered with the
Commission. We are offering to issue the New Notes to
satisfy our obligations contained in the registration
agreement entered into when the Old Notes were sold
in transactions pursuant to Rule 144A and Regulation
S under the Securities Act. Old Notes may be
exchanged only in integral multiples of $1,000. You
may tender your Old Notes by following the procedures
under the heading "The Exchange Offer."
Tenders; Expiration Date;
Withdrawal of Tender... The Exchange Offer will expire at 5:00 p.m., New
York City time, on , 1999, unless we extend
it. If you decide to exchange your Old Notes for New
Notes, you must acknowledge that you are not engaging
in, and do not intend to engage in, a distribution of
the New Notes. The tender of Old Notes pursuant to
the Exchange Offer may be withdrawn at any time prior
to , 1999. If we decide not to accept any
Old Notes for exchange, they will be returned without
expense to the tendering holder promptly after the
expiration or termination of the Exchange Offer. See
"The Exchange Offer--Terms of the Exchange Offer;
Period for Tendering Old Notes" and "The Exchange
Offer--Withdrawal Rights."
Certain Conditions to the
Exchange Offer......... The Exchange Offer is subject to customary
conditions, which we may waive. Please read the
section "The Exchange Offer--Certain Conditions to
the Exchange Offer" of this prospectus for more
information regarding conditions to the Exchange
Offer.
Certain Federal Tax
Considerations......... Your exchange of Old Notes for New Notes pursuant
to the Exchange Offer will not result in any gain or
loss to you for federal income tax purposes. See
"Certain Federal Income Tax Considerations" in this
prospectus.
Use of Proceeds......... We will receive no proceeds from the Exchange
Offer.
Exchange Agent.......... State Street Bank and Trust Company is the Exchange
Agent. The address and telephone number of the
Exchange Agent are set forth in "The Exchange
Offer--Exchange Agent" in this prospectus.
7
<PAGE>
Consequences of Not Exchanging Old Notes
If you do not exchange your Old Notes in the Exchange Offer, your Old
Notes will continue to be subject to the restrictions on transfer set forth in
the legend on the certificate for your Old Notes. In general, you may offer or
sell your Old Notes only if they are registered under, offered or sold pursuant
to an exemption from, or offered or sold in a transaction not subject to, the
Securities Act and applicable state securities laws. We do not currently intend
to register the Old Notes under the Securities Act. Under certain
circumstances, however, certain holders of Old Notes, including holders who are
not permitted to participate in the Exchange Offer or who may not freely resell
New Notes received in the Exchange Offer, may require us to file and cause to
become effective, a shelf registration statement which would cover resales of
Old Notes by such holders. See "The Exchange Offer--Consequences of Exchanging
or Failing to Exchange Old Notes" and "Exchange Offer; Registration Rights."
Summary Description of the New Notes
The terms of the New Notes and the Old Notes are identical in all material
respects, except that certain transfer restrictions and registration rights
relating to the Old Notes do not apply to the New Notes, and that if the
Exchange Offer is not completed by June 18, 1999, the interest rate on the Old
Notes will increase by $0.192 per week per $1,000 amount of the Old Notes until
the Exchange Offer is completed. Where we refer to "Notes" in this document, we
are referring to both Old Notes and New Notes.
Notes Offered........... We are offering up to $200,000,000 principal amount
of 9% Senior Subordinated Notes due 2008, which have
been registered under the Securities Act.
Maturity Date........... February 1, 2008.
Interest Payment Dates... February 1 and August 1 of each year, beginning
February 1, 1999.
Optional Redemption..... The Notes will be redeemable at our option, in
whole or in part, at any time on or after February 1,
2003 at the redemption prices set forth herein,
together with accrued and unpaid interest, if any, on
such Notes to the date of redemption. In addition, at
any time before February 1, 2001, we may redeem in
the aggregate up to 40% of the original principal
amount of the Notes at a redemption price equal to
109% of the principal amount of such Notes, plus
accrued and unpaid interest, if any, on such Notes to
the date of redemption, with the net cash proceeds of
one or more public equity offerings. However, at
least 60% of the aggregate principal amount of Notes
originally issued remain outstanding immediately
after giving effect to such redemption. See
"Description of the Notes--Redemption--Optional
Redemption."
Ranking................. The Old Notes are, and the New Notes will be,
unsecured senior subordinated obligations of ours and
will be subordinated in right of payment to all of
our existing and future Senior Indebtedness (as
defined in this prospectus) including borrowings
under the New Credit Facility and outstanding under
the 71/8% Notes due 2005. The Old Notes rank, and the
New Notes will rank, equally in right of payment with
all other existing and future senior subordinated
indebtedness of ours including the Existing Notes (as
defined in this prospectus). As of September 30,
1998, after giving pro forma effect to the Offering
and the application of the net proceeds from the
Offering, we would have had approximately $440.6
million of Senior Indebtedness outstanding. See
"Description of the Notes--Ranking of Notes."
Change of Control....... Upon the occurrence of a Change of Control
Triggering Event (as defined in this prospectus),
each holder of Notes will have the right to
8
<PAGE>
require us to purchase such holder's Notes at a
purchase price equal to 101% of their principal
amount, together with accrued and unpaid interest,
if any, on such Notes to the date of purchase. In
addition, at any time on or prior to February 1,
2003, upon the occurrence of a Change of Control, we
may redeem all but not less than all of the Notes,
at a redemption price equal to the sum of:
o 100% of the outstanding principal amount of
such Notes plus
o the Applicable Premium (as defined in this
prospectus) plus
o accrued and unpaid interest and Liquidated
Damages (as defined in this prospectus), if
any, on such New Notes to the date of
redemption. See "Description of the
Notes--Change of Control."
Covenants............... The Indenture contains certain covenants that,
among other things, limit our ability and the ability
of any of our Restricted Subsidiaries (as defined in
this prospectus) to:
o incur additional indebtedness;
o pay dividends or make other distributions in
respect of our capital stock;
o repurchase equity interests or subordinated
indebtedness;
o create certain liens;
o enter into certain transactions with affiliates;
o consummate certain asset sales; and
o merge or consolidate.
See "Description of the Notes--Certain Covenants."
Risk Factors
You should carefully consider all of the information set forth or
incorporated by reference into this prospectus and, in particular, the
information under "Risk Factors," beginning on page 13, before deciding to
tender your Old Notes in the Exchange Offer.
9
<PAGE>
Selected Historical and Pro Forma Financial Data
(Dollars in millions)
The selected financial data for each of the fiscal years in the five year
period ended December 31, 1997 have been derived from our audited financial
statements. Such information is contained in and should be read in conjunction
with the financial statements and accompanying notes included or incorporated
by reference in our Annual Reports on Form 10-K for such years. The selected
financial data for the nine months ended September 30, 1997 and 1998 have been
derived from our unaudited interim financial statements, which in the opinion
of our management include all adjustments, consisting only of normal recurring
adjustments, which we consider necessary for a fair presentation of our
financial position and results of operations for these periods. Operating
results for the nine months ended September 30, 1998 are not necessarily
indicative of the results that may be expected for the full year ended December
31, 1998. The nine month data should be read in conjunction with our Quarterly
Reports on Form 10-Q, as amended, for such periods. The selected unaudited pro
forma and as adjusted financial data give effect to the Offering and the
application of the net proceeds from the Offering.
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1993 1994 1995(a) 1996 1997
----------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Sales ....................... $ 978.4 $ 1,126.7 $ 1,435.8 $ 2,144.4 $ 2,175.3
Cost of sales ............... 685.7 807.8 1,048.9 1,565.9 1,583.6
--------- ----------- ----------- ----------- ----------
Gross profit ................ 292.7 318.9 386.9 578.5 591.7
Selling, general and
administrative expense 232.0 255.0 334.4 483.9 518.8
Restructuring charge(b) ..... -- -- 34.3 -- 51.8
Recapitalization-related
costs(c) ................... -- -- -- -- --
--------- ----------- ----------- ----------- ----------
Income from operations ...... 60.7 63.9 18.2 94.6 21.1
Interest expense ............ 7.9 9.0 15.0 27.1 23.0
Other (income) expense, net (5.0) (7.8) (1.1) (0.1) 3.2
--------- ----------- ----------- ----------- ----------
Income (loss) before
income taxes ............... 57.8 62.7 4.3 67.6 (5.1)
Provision (benefit) for
income taxes ............... 25.2 27.0 1.1 30.8 25.4
--------- ----------- ----------- ----------- ----------
Net income (loss) ........... $ 32.6 $ 35.7 $ 3.2 $ 36.8 $ (30.5)
========= =========== =========== =========== ==========
Other Financial Data:
Ratio of earnings (loss)
to fixed charges(e) ........ 6.3x 6.1x 1.2x 3.1x 0.8x
EBITDA, As Defined(f) ....... $ 85.7 $ 91.1 $ 98.4 $ 157.2 $ 137.2
Depreciation and
amortization(g) ............ 20.0 19.4 28.9 44.6 47.0
Capital expenditures ........ 12.9 17.7 24.6 40.7 59.2
Cash flows provided by
(used in)
Operating activities ....... 56.5 0.2 54.9 49.0 46.1
Investing activities ....... (83.5) (29.8) (332.8) (42.0) (50.7)
Financing activities ....... 79.2 (0.1) 304.7 (46.0) (1.9)
<CAPTION>
Twelve
Months
Nine Months Ended Ended
September 30, Dec. 31,
------------------------------------------------------- -------------
Historical Pro Forma(d) Pro Forma
--------------------------- --------------------------- -------------
1997 1998 1997 1998 1997
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Sales ....................... $ 1,624.1 $ 1,716.6 $ 1,624.1 $ 1,716.6 $ 2,175.3
Cost of sales ............... 1,176.3 1,240.2 1,176.3 1,240.2 1,583.6
----------- ---------- ----------- ---------- ----------
Gross profit ................ 447.8 476.4 447.8 476.4 591.7
Selling, general and
administrative expense 382.6 386.0 382.6 386.0 518.8
Restructuring charge(b) ..... -- -- -- -- 51.8
Recapitalization-related
costs(c) ................... -- 71.0 -- 71.0 --
----------- ---------- ----------- ---------- ----------
Income from operations ...... 65.2 19.4 65.2 19.4 21.1
Interest expense ............ 17.6 67.3 22.2 73.9 29.0
Other (income) expense, net 0.1 (3.0) 0.1 (3.0) 3.2
----------- ---------- ----------- ---------- ----------
Income (loss) before
income taxes ............... 47.5 (44.9) 42.9 (51.5) (11.1)
Provision (benefit) for
income taxes ............... 23.0 (12.1) 21.2 (14.7) 23.0
----------- ---------- ----------- ---------- ----------
Net income (loss) ........... $ 24.5 $ (32.8) $ 21.7 $ (36.8) $ (34.1)
=========== ========== =========== ========== ==========
Other Financial Data:
Ratio of earnings (loss)
to fixed charges(e) ........ 3.1 x 0.4 x 2.6 x 0.3 x 0.7 x
EBITDA, As Defined(f) ....... $ 118.9 $ 130.1 $ 118.9 $ 130.1 137.2
Depreciation and
amortization(g) ............ 34.2 36.7 34.2 36.7 47.0
Capital expenditures ........ 49.3 43.7 49.3 43.7 59.2
Cash flows provided by
(used in)
Operating activities ....... 40.2 89.0 40.4 88.0 50.0
Investing activities ....... (45.6) (110.8) (45.6) (110.8) (50.7)
Financing activities ....... 10.8 25.8 10.8 25.8 ( 1.9)
</TABLE>
<TABLE>
<CAPTION>
As of September 30, 1998
---------------------------
Historical As Adjusted
------------ ------------
Balance Sheet Data:
<S> <C> <C>
Working capital .................... $ 19.6 $ 19.6
Total assets ....................... 1,163.5 1,163.5
Total indebtedness(h) .............. 865.6 1,033.6
Stockholders' deficiency ........... (308.5) (308.5)
</TABLE>
(See footnotes on following page)
10
<PAGE>
(a) On October 17, 1995, we acquired CMS and Fisons Scientific
Equipment ("FSE") from Fisons. The operations of CMS and FSE have
been included in our consolidated financial statements from the
date of acquisition.
(b) During the third quarter of 1995, we recorded a $34.3 million
($20.3 million, net of tax) restructuring charge. The charge is
primarily related to the elimination and in some cases relocation
of certain administrative functions, a sales force reorganization,
and the global consolidation of certain domestic, Canadian and
international logistics and customer service facilities and
systems.
During the fourth quarter of 1997, we recorded $51.8 million ($47.0
million, net of tax) of restructuring and other charges. These
charges related to the closure of additional logistics and
customer-service centers and related asset write-offs in the United
States, personnel reductions in the United States and
internationally, and the write-off of goodwill related to certain
international operations.
(c) In connection with the Recapitalization, we recorded $71.0
million ($43.3 million after tax) of expenses consisting primarily
of non-cash compensation expenses relating to the conversion of
employee stock options, the implementation of certain executive
severance agreements and the grant of options to certain
executives in accordance with the terms of the Recapitalization.
(d) The pro forma financial data gives effect to the Offering and the
application of the net proceeds therefrom as if the Offering
occurred on January 1, 1997. Interest expense has been calculated
in accordance with the use of proceeds (see page 19) and the
associated income tax benefit reflects a 40% tax rate.
(e) For purposes of computing this ratio, earnings (loss) consist of
income (loss) before income taxes plus fixed charges. Fixed
charges consist of interest expense, and one-third of the rent
expense from operating leases, which our management believes is a
reasonable approximation of an interest factor.
(f) "EBITDA, As Defined" is defined in accordance with the Existing
Indenture as net income plus income taxes, interest expense,
depreciation and amortization and excludes unusual and
non-recurring items, as described below. EBITDA, As Defined is
used here because we believe it is an indicator of our ability to
service existing and future indebtedness. However, EBITDA, As
Defined should not be considered as an alternative to net income
as a measure of operating results or to cash flows as a measure of
liquidity in accordance with generally accepted accounting
principles. Our computation of EBITDA, As Defined may not be
comparable to similarly titled measures of other companies.
EBITDA, As Defined is calculated as follows (in millions):
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------
1993 1994 1995 1996 1997
---------- ---------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Net income (loss) ............................ $ 32.6 $ 35.7 $ 3.2 $ 36.8 $ (30.5)
Income tax provision (benefit) ............... 25.2 27.0 1.1 30.8 25.4
Interest expense ............................. 7.9 9.0 15.0 27.1 23.0
Depreciation and amortization ................ 20.0 19.4 28.9 44.6 47.0
------- ------- ------ ------- --------
Sub-total--EBITDA ........................... 85.7 91.1 48.2 139.3 64.9
Restructuring and other charges
(see note (b) above) ........................ -- -- 34.3 -- 51.8
Recapitalization-related
compensation charges(1) ..................... -- -- -- -- --
Nonrecurring charges in selling, general
and administrative expense(2) ............... -- -- 14.5 18.2 29.8
Nonrecurring charges in cost of sales(2) -- -- 1.2 1.2 6.7
Other items in other (income) expense(3) ..... -- -- 0.2 (1.5) 3.7
Adjustments to restructuring and
nonrecurring(4) ............................. -- -- -- -- (19.7)
Management compensation(5) ................... -- -- -- -- --
EBITDA, As Defined ........................... $ 85.7 $ 91.1 $ 98.4 $ 157.2 $ 137.2
======= ======= ====== ======= ========
<CAPTION>
Twelve
Months
Nine Months Ended Ended
September 30, Dec. 31,
--------------------------------------------- ----------
Historical Pro Forma Pro Forma
---------------------- ---------------------- ----------
1997 1998 1997 1998 1997
---------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Net income (loss) ............................ $ 24.5 $ (32.8) $ 21.7 $ (36.8) (34.1)
Income tax provision (benefit) ............... 23.0 (12.1) 21.2 (14.7) 23.0
Interest expense ............................. 17.6 67.3 22.2 73.9 29.0
Depreciation and amortization ................ 34.2 36.7 34.2 36.7 47.0
------- -------- ------- -------- ------
Sub-total--EBITDA ........................... 99.3 59.1 99.3 59.1 64.9
Restructuring and other charges
(see note (b) above) ........................ -- -- -- -- 51.8
Recapitalization-related
compensation charges(1) ..................... -- 71.0 -- 71.0 --
Nonrecurring charges in selling, general
and administrative expense(2) ............... 18.5 5.8 18.5 5.8 29.8
Nonrecurring charges in cost of sales(2) -- -- -- -- 6.7
Other items in other (income) expense(3) ..... 1.1 0.9 1.1 0.9 3.7
Adjustments to restructuring and
nonrecurring(4) ............................. -- (10.5) -- (10.5) (19.7)
Management compensation(5) ................... -- 3.8 -- 3.8 --
EBITDA, As Defined ........................... $ 118.9 $ 130.1 $ 118.9 $ 130.1 $ 137.2
======= ======== ======= ======== =======
</TABLE>
(See footnotes on following page)
11
<PAGE>
(1) One-time primarily non-cash compensation charges resulting from the
Recapitalization, including those arising from the conversion of
existing stock options.
(2) Selling, general and administrative expense and cost of sales include
nonrecurring and redundant costs associated with the implementation of
the 1995 and 1997 Restructuring Plans discussed in (b) above, our
integration with CMS and, in 1997, actions taken to improve operating
efficiencies, software write-offs and other information system-related
charges associated with our implementation of new global computer
systems and an increase in costs attributable to the UPS strike. In
addition, management believes that the strike had a material impact on
revenues which adversely impacted operating profits. See "Risk
Factors--Reliance on Third Party Package Delivery Services Could
Adversely Affect Us If There Is a Disruption in Service."
(3) Includes certain gains on the sale of property, plant and equipment
primarily related to the restructuring and integration plans recorded
in 1996 and 1998, gains and losses due to fluctuations in currency
values, certain costs incurred in 1997 related to the Board's review of
strategic alternatives, and certain gains recognized in 1997 related to
the sale of non-core assets.
(4) The Existing Notes Indenture (defined below) limits the amount of
nonrecurring and restructuring charges which can be excluded from
EBITDA, As Defined. This amount represents the excess of these charges
over the limit.
(5) The Existing Notes Indenture calls for the add-back of certain senior
management compensation paid in the first quarter of 1998.
(g) Excludes amortization of financing costs which is included in
interest expense.
(h) Consists of long-term debt and short-term debt and excludes amounts
outstanding under the Receivables Securitization Facility of approximately
$168 million at September 30, 1998 and approximately $5 million upon
completion of the Offering.
12
<PAGE>
RISK FACTORS
You should carefully consider the following factors before deciding to
tender your Old Notes in the Exchange Offer. The risk factors set forth below,
other than "--Consequences of Failure to Exchange Old Notes for New Notes and
Requirements for Transfer of New Notes," generally apply to the Old Notes as
well as the New Notes.
Consequences of Failure to Exchange Old Notes for New Notes and Requirements
for Transfer of New Notes
If you do not exchange your Old Notes for the New Notes pursuant to the
Exchange Offer, you will continue to be subject to the restrictions on transfer
of your Old Notes described in the legend on your Old Notes. The restrictions
on transfer of your Old Notes arise because we issued the Old Notes pursuant to
exemptions from, or in transactions not subject to, the registration
requirements of the Securities Act and applicable state securities laws. In
general, you may only offer or sell the Old Notes if they are registered under
the Securities Act and applicable state securities laws, or offered and sold
pursuant to an exemption from such requirements. We do not intend to register
the Old Notes under the Securities Act. In addition, if you exchange your Old
Notes in the Exchange Offer for the purpose of participating in a distribution
of the New Notes, you may be deemed to have received restricted securities and,
if so, will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
To the extent Old Notes are tendered and accepted in the Exchange Offer, the
trading market, if any, for the Old Notes would be adversely affected. See "The
Exchange Offer--Consequences of Exchanging or Failing to Exchange Old Notes."
Substantial Level of Indebtedness Could Adversely Affect Our Operations
We have a substantial amount of outstanding indebtedness. After giving pro
forma effect to the Offering and the application of the net proceeds therefrom,
as of September 30, 1998, our aggregate outstanding indebtedness would have
been $1,033.6 million and our stockholders' equity would have been a deficit of
$308.5 million. The New Credit Facility, the Receivables Securitization
Facility, the indenture governing the Existing Notes (the "Existing Notes
Indenture") and the Indenture permit us to incur or guarantee certain
additional indebtedness, subject to certain limitations. See "Description of
Other Indebtedness."
Our substantial indebtedness could have important consequences to you. For
example, it could:
o limit our ability to pay principal and interest on the New Notes and the
Old Notes and make payments on our other debt obligations;
o limit our ability to fund future working capital, capital expenditures,
acquisitions, and other general corporate purposes;
o require us to dedicate an substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow for other general corporate purposes,
including research and development and capital spending;
o place us at a competitive disadvantage if we are more leveraged than its
competitors;
o limit our flexibility in responding to changes in our business and the
industry in which we operate; and
o make us more vulnerable to a downturn in general economic conditions or
our business or changing market conditions and regulations.
Your Right to Receive Payments on These Notes Is Junior to All Our Senior
Indebtedness and Effectively Junior to All Indebtedness of Our Subsidiaries
The Notes are our unsecured, senior subordinated obligations, and as such,
will be subordinated in right of payment to all of our existing and future
Senior Indebtedness, including our indebtedness under the New Credit Facility,
if any, and our 71/8% Notes due 2005. The Notes rank equally with all of our
senior subordinated indebtedness, including the Existing Notes, and rank senior
to all of our subordinated indebtedness, if any. The Notes are also effectively
subordinated to all of our secured indebtedness to the
13
<PAGE>
extent of the value of the assets securing such indebtedness, and to all
existing and future obligations and liabilities of our subsidiaries. This
includes that portion of the New Credit Facility for which our material
subsidiaries are obligors.
Our obligations and those of our subsidiary borrowers under the New Credit
Facility are secured by
o substantially all of our assets and those of our material domestic
subsidiaries;
o a pledge of the stock of each such subsidiary; and
o a pledge of 65% of the stock of our material foreign subsidiaries which
are our direct subsidiaries or direct subsidiaries of one of our material
domestic subsidiaries. Obligations of a foreign subsidiary borrower are
secured by a pledge of 100% of the shares and assets of such borrower.
Our obligations and those of our subsidiary borrowers are further
guaranteed by us and each of our material domestic subsidiaries. As of
September 30, 1998, after giving pro forma effect to the Offering and the
application of the net proceeds therefrom, the aggregate amount of our
Senior Indebtedness would have been approximately $440.6 million.
In the event of our bankruptcy, liquidation, dissolution, reorganization
or any similar proceeding, or any default in payment or acceleration of any
related debt, our assets will be available to pay obligations on the Notes only
after our Senior Indebtedness has been paid in full. There may not be
sufficient assets remaining to pay amounts due on all or any of the Notes. See
"Description of the Notes--Ranking of Notes."
Restrictions and Covenants in Our Debt Agreements Limit Our Ability to Take
Certain Actions and Failure to Comply with Such Covenants Could Adversely
Affect Our Ability to Repay Our Debt
The New Credit Facility contains a number of covenants that significantly
restrict our operations. In addition, under the New Credit Facility and the
Receivables Securitization Facility, we are required to comply with specified
financial ratios and tests, including maximum leverage ratios and minimum
EBITDA to cash interest expense ratios, and certain of these ratios and tests
may be more restrictive in future years. We cannot guarantee that we will be
able to comply with such covenants or restrictions in the future. Our ability
to comply with such covenants and other restrictions may be affected by events
beyond our control, including prevailing economic, financial and industry
conditions. A breach of any such covenants or restrictions could result in a
default under the New Credit Facility or a termination event under the
Receivables Securitization Facility that would permit the lenders under such
facilities to declare all amounts outstanding under such facilities to be
immediately due and payable, together with accrued and unpaid interest, and
would permit the lenders to terminate their commitments to make further
extensions of credit. A default under the New Credit Facility could prohibit us
from making any payments on the Notes. The Existing Notes Indenture and the
Indenture also each contain a number of restrictive covenants. See "Description
of the Notes" and "Description of Other Indebtedness."
Indebtedness Under the New Notes Could Be Invalidated if It Is Determined Such
Indebtedness Is a Fraudulent Conveyance
Our incurrence of the indebtedness represented by the Notes may be subject
to review under relevant federal and state fraudulent conveyance statutes in a
bankruptcy, reorganization or rehabilitation case or similar proceeding or in a
lawsuit by or on behalf of our unpaid creditors. We used a portion of the net
proceeds of the Offering to repay all amounts outstanding under the Revolving
Credit Facility. We originally incurred amounts outstanding under the Revolving
Credit Facility to pay our stockholders the cash consideration in the Merger.
Under these fraudulent conveyance statutes, if a court were to find that, at
the time of the Recapitalization or at the time of issuance of the Notes, we:
o incurred the indebtedness and paid the cash consideration in the Merger
in order to hinder, delay or defraud current or future creditors or
o (a) received less than reasonably equivalent value or fair consideration
in connection with the Recapitalization and (b) (1) were insolvent or were
rendered insolvent because of the Recapitalization, including the
incurrence of the indebtedness related thereto, (2) were engaged in a
business or transaction for which our assets constituted unreasonably
small capital, (3) intended to incur, or believed that we would incur
obligations beyond our ability to pay as such obligations matured, as the
14
<PAGE>
above terms are defined in or interpreted under the fraudulent conveyance
statutes, or (4) were a defendant in an action for money damages, or had a
judgment for money damages docketed against us, if, in either case, after
final judgment the judgment is unsatisfied,
such court could determine to invalidate such indebtedness, in whole or in
part, as a fraudulent conveyance or subordinate such indebtedness to our
existing or future creditors.
Difficulty in Executing Business Strategy
Our business strategy is based on our current and historical operations
and the operations of other companies in the scientific services industries.
Our current business strategy is based, in part, on our ability to capitalize
on benefits expected to result from various acquisitions and investments we
have made over the last few fiscal years, including the acquisitions of CMS,
FSE and Columbia, and investments to expand our international operations,
including the Bioblock Acquisition. Although partially completed, we cannot
guarantee that we will be able to successfully complete the integration of CMS
or any other acquired company into our operations, or that such integration,
when complete, will generate expected efficiencies and cost savings. In
addition, certain of our consolidated international operations incurred net
losses in fiscal 1997 and certain of these are currently operating at a loss.
If we are unable to improve the sales and profitability of our international
business, our financial condition and results of operations may be materially
adversely affected. Our management may decide to alter or discontinue certain
parts of the business strategy described in this prospectus and may adopt
alternative or additional strategies. In addition, we cannot guarantee that
such a strategy, if implemented, will be successful or will improve operating
results. Moreover, we cannot guarantee that the successful implementation of
such a strategy will result in improved operating results. Further, other
conditions may exist, such as increased competition, or an economic downturn,
which may offset any improved operating results that are attributable to such a
strategy.
Dependence on Information Systems; Systems Conversion; Year 2000 Issue
Our business is dependent in large part on its information systems. These
systems play an integral role in:
o tracking product offerings (including pricing and availability);
o processing and shipping more than 20,000 items per day;
o warehouse operations;
o purchasing from more than 3,000 vendors;
o inventory management;
o financial reporting; and
o other operational functions.
Year 2000 issues exist when dates in computer systems are recorded using
two digits (rather than four) and are then used for arithmetic operations,
comparisons or sorting. A two-digit date recording may recognize a date using
"00" as 1900 rather than 2000, which could cause our computer systems to
perform inaccurate computations. Our Year 2000 issues relate not only to our
own systems but also to those of our customers and suppliers.
Based upon assessments of each of our business units and the information
systems supporting those operations, we have begun implementing a program
having the following major elements and a target completion date no later than
December 31, 1999.
o First, the applications and other software supporting each business unit
has been inventoried and analyzed and then planned for either: (1)
confirmation as Year 2000 compliant, (2) upgrade to a Year 2000 compliant
version, (3) remediation to become Year 2000 compliant or (4) replacement
by other software which provides Year 2000 compliance and other benefits.
o Second, we have initiated programs to assure Year 2000 compliance for the
equipment and software licenses that we currently market to customers and
to obtain and transmit to customers information about the equipment and
software licenses which customers may have purchased in the past.
o Third, we have (1) initiated programs to identify those suppliers whose
own systems could lead to delays or interruptions in supply, either
because of Year 2000 non-compliance or because of systems
15
<PAGE>
upgrades or replacements to avoid Year 2000 issues and (2) begun
developing contingency plans during the fourth quarter of 1998 and first
quarter of 1999, including adjustments in inventory levels and order lead
times for products provided by vendors who have not provided adequate
assurances, to ameliorate any resultant delays or interruptions and to
prevent or reduce any adverse effect on fill rates to our customers.
o Fourth, with particular regard to Electronic Data Interchange ("EDI"), we
have developed plans to work with trading partners, including both
suppliers and customers, to either work around the requirement for six
digit date fields in the prior EDI standards or to migrate, with the
trading partner, to ANSI version 4010, which employs eight digit date
fields. By mid-1999, we will be in a position to accept either six or
eight digit date fields in our EDI dealings with customers, suppliers and
other EDI trading partners.
o Fifth, we are implementing a project involving testing with available
test software personal computers and associated software at various
locations, followed by upgrade or replacement where appropriate, and are
implementing projects which include inventory, identification, assessment
(through vendor contacts, testing or both) planning, implementation
(replacement, repair or upgrade), and testing of manufacturing equipment,
environmental control equipment, elevators, security systems,
telecommunications software and equipment and similar purchased equipment,
software and systems. While this portion of the overall program is
targeted for completion by June 30, 1999, it is currently anticipated that
a limited amount of this activity would remain incomplete until later in
1999.
With regard to financial cost, implementation of the program has resulted
in and will continue to result in significant expenditure by our personnel and
outside software and equipment providers and expenditures for equipment and
software upgrades and replacements. Because many of these efforts have been
designed to achieve other functional or systems improvements, in addition to
Year 2000 compliance, and are being carried out by operational personnel within
each business unit, it is difficult to allocate particular funding levels
solely to the Year 2000 compliance activities. In general, however, we have
spent $2.2 million in operating expenses and $23.0 million in capital
expenditures on Year 2000 activities to date. We estimate that we would incur
an additional $4.5 million in operating expenses and $14.5 million in capital
expenditures to complete our Year 2000 programs.
Although we believe that our present remediation and replacement programs
will adequately address the Year 2000 issues with respect to our internal
systems, we cannot guarantee that our belief is correct or that our present
assessment is in fact accurate. We cannot guarantee that the remediation and
replacement programs will be completed prior to the Year 2000 or that if
completed prior to the Year 2000 that disruption will not occur. In addition,
we cannot guarantee that our vendors, suppliers and the myriad of other
financial, transportation, utility and other service providers will
successfully resolve their own Year 2000 issues in a manner which avoids
significant impact to us. We have received written assurances from many of our
suppliers and other providers acknowledging the Year 2000 issues and stating
their present intention to be compliant. We have not received assurances from
all of our suppliers and other providers and there is no guarantee that one or
more key suppliers and other providers will not fail to become compliant in
time to avoid a disruption to our business which, in spite of our contingency
plans, would have a significant adverse impact on us. Because of the complexity
of our systems, the number of transactions processed and the number of third
parties with whom we interact, certain failures by us or our suppliers, vendors
and other service providers to completely overcome the Year 2000 issue could
result in substantial and material impact on our business, operations and
financial results.
Our forecasted costs and timing for completion of its Year 2000 programs
are based on our best estimates, which in turn are based on numerous
assumptions of future events, including the continued availability and cost of
necessary personnel and other resources, third party modification plans, and
other factors. However, we cannot be certain that these estimates will be
achieved and actual results could differ materially from these estimates.
Our Results of Operations Are Dependent on the Level of Corporate Research and
Development Spending
Our customers include corporations active in scientific or technological
research, healthcare, industrial, safety and other markets, both in the U.S.
and internationally. The research and development budgets and activities of
these companies have a significant effect on the demand for products
manufactured and/or
16
<PAGE>
distributed by us. Such policies are based on a variety of factors, including
the need to develop new products, competition and availability of resources.
Although scientific and technology-related research and development spending in
the U.S. historically has not been subject to cyclical swings, no assurance can
be made that this trend will continue. In addition, as we continue to expand
our international operations, the research and development spending levels in
other global markets will become increasingly important. A decrease in research
and development spending by our customers could have a material adverse effect
on our results of operations.
Healthcare Reform and Cost Containment Initiatives in the Healthcare Industry
May Adversely Affect Our Results of Operations
Our sales to the U.S. clinical laboratory market have historically been
significant. The trend towards managed care, together with efforts to reform
the healthcare delivery system in the U.S., has resulted in increased pressure
on healthcare providers and other participants in the healthcare industry to
reduce costs. To the extent that our customers in the healthcare industry seek
to address the need to contain costs by limiting the number of clinical tests
being performed, our results of operations could be materially and adversely
affected.
A Few Equity Investors Have Significant Control Over Us
As a result of the Recapitalization, the Equity Investors own 78.3% of our
issued and outstanding common stock. THL owns 50.1% of such outstanding stock.
Accordingly, the Equity Investors have significant control over us and have the
power to (1) elect a majority of our directors, (2) appoint new management and
(3) approve any action requiring the approval of the holders of our
recapitalized common stock, including adopting amendments to our certificate of
incorporation and approving mergers or sales of substantially all of our
assets. In connection with the Recapitalization, the Equity Investors and
certain members of our management entered into an Investors' Agreement dated
January 21, 1998 (the "Investors' Agreement"). The Investors' Agreement
provides that our Board of Directors will comprise at least 10, but not more
than 11 directors, seven of whom will be appointed by THL, one of whom will be
appointed by DLJMB, one of whom will be Mr. Paul M. Montrone and one of whom
will be Mr. Paul M. Meister. Currently nine persons comprise our Board of
Directors, none of whom has been appointed by DLJMB. The directors elected
pursuant to the Investors' Agreement will have the authority to make decisions
affecting our capital structure, including the issuance of additional capital
stock, the implementation of stock repurchase programs and the declaration of
dividends. We cannot guarantee that the interests of the Equity Investors will
not conflict with the interests of the other shareholders.
We Operate in a Highly Competitive Market
We operate in a highly competitive market. We compete with a wide range of
distributors, suppliers and manufacturers that sell their own products directly
to end users. We also compete with other distributors, such as VWR Scientific
Products Corporation in the scientific research market and Allegiance
Healthcare Corporation in the clinical market. Some of these competitors are
larger and may have greater resources than us. There has been a recent trend
toward consolidation in the industry which could result in our competitors that
provide distribution services becoming larger. In addition, potential
competitors in the future could include suppliers and manufacturers that
currently rely on one or more third party distributors to distribute their
products. We cannot guarantee that competitive factors in our markets, both
international and domestic, will not have a material adverse effect on our
financial condition and results of operations.
Our Reliance on Third Party Package Delivery Services Could Adversely Affect Us
If There Is a Disruption in Service
Almost all of our products are shipped to customers by independent package
delivery companies. We do not own or maintain a fleet of transportation
vehicles dedicated to the delivery of our products. The principal independent
delivery service we use is UPS, which shipped products accounting for over
sixty percent of our U.S. shipments in fiscal 1997. Other carriers we use
include national and regional trucking firms, overnight courier services and
the United States Postal Service. In August 1997, UPS employees who were
members of the International Brotherhood of Teamsters went on strike for more
than two weeks, causing disruption to our shipments. The UPS strike
significantly reduced sales for the third and fourth quarters of 1997 and
increased operating costs. A future major work stoppage or other series of
events that would make such carriers unavailable to us could have a significant
adverse effect upon our ability to conduct our business.
17
<PAGE>
We Cannot Guarantee that Our Sales Will Continue to Grow at Historical Rates
Our ability to implement our business strategy will depend on numerous
factors, many of which are beyond our control. Much of our recent sales growth
prior to 1997 was the result of acquisitions, including the acquisitions of CMS
and FSE in October 1995. Future growth will be largely dependent on growth in
the overall market for instruments, supplies and equipment, and environmental
testing, life sciences, worker safety and emerging testing techniques and our
ability to make acquisitions. We cannot guarantee that such growth will occur
or that suitable acquisition candidates will be available or that any
acquisition will be successful.
Some of Our Operations are Subject to Environmental Regulation
Some of our operations involve and have involved the handling, manufacture
or use of many substances that are classified as toxic or hazardous substances
within the meaning of applicable environmental and other laws. Some risk of
environmental and other damage or hazard is inherent in particular operations
and products we manufacture, sell or distribute. We cannot guarantee that
damage, hazard or loss will not occur. To a large extent, such damage is
uninsured. We continually monitor and review our procedures and policies for
compliance with existing law and the cost of compliance with existing
environmental laws is not expected to have a material adverse effect on our
earnings, liquidity or competitive position. However, future events, including
changes in existing laws and regulations may give rise to additional costs
which are currently unintended and unforeseen and which could have a material
adverse effect on our financial condition.
Dependence on Key Personnel
We depend heavily on the services of our senior management, including Paul
M. Montrone, Chairman of the Board and Chief Executive Officer of Fisher, and
Paul M. Meister, Vice Chairman of the Board, Executive Vice President and Chief
Financial Officer of Fisher. The loss of any member of our senior management,
including Mr. Montrone or Mr. Meister, could have a material adverse effect on
us.
Political and Economic Risks Affecting Our International Operations
We conduct international operations through a variety of wholly owned
subsidiaries, majority-owned subsidiaries, joint ventures, equity interests and
agents located in North and South America, Europe, the Far East, the Middle
East and Africa. We are also exploring the possibility of expansion into other
international markets as well. We anticipate that our operations in Europe will
expand as a result of the Bioblock Acquisition. We cannot guarantee that we
will maintain significant operations internationally or that any such
operations will be successful. Any international operations we establish will
be subject to risks similar to those affecting its North American operations in
addition to a number of other risks, including (1) lack of complete operating
control, (2) lack of local business experience, (3) foreign currency
fluctuations, (4) difficulty in enforcing intellectual property rights, (5)
language and other cultural barriers and (6) political and economic
instability.
We conduct business in many of the countries which are participating in
Stage III of the European Economic and Monetary Union. These participating
countries adopted the Euro as their national currency on January 1, 1999. It is
currently anticipated that on and after January 1, 2002, the national
currencies of the participating countries will cease to exist and the sole
legal tender in such countries will be the Euro. We may also expand our
operations to other countries which are participating in the European Monetary
Union. Conversely, other countries where we do business currently may become
participants in the European Monetary Union. We are currently incorporating the
necessary changes which allow us to conduct business in Euros and the national
currencies of the participating countries during the transition period and
entirely in Euros thereafter. We cannot accurately estimate the costs relating
to conversion to the Euro and, although we do not currently anticipate that
such costs will be material, due to numerous uncertainties, we cannot estimate
the effects a common currency will have on pricing within the European Union
and the resulting impact on our financial condition or results of operations.
Effects of Exchange Rate Fluctuations on Our International Operations
The majority of our revenues and expenses are denominated in U.S. dollars,
although we own properties and conduct operations in non-U.S. facilities
including Canada, France, Mexico, Belgium, Germany, the Netherlands, Singapore,
Malaysia, Switzerland and the United Kingdom. We anticipate that our revenues
and expenses denominated in European currencies and Euros will increase as a
result of the Bioblock Acquisition. Accordingly, fluctuations in the exchange
rate between the U.S. dollar and the respective currencies of the
aforementioned countries or Euros could have an adverse effect on us.
18
<PAGE>
Change of Control
Upon the occurrence of a Change of Control Triggering Event (as defined in
the Indenture and the Existing Notes Indenture), we will be required to make an
offer to purchase all of the outstanding Notes and Existing Notes at a price
equal to 101% of the principal amount of such notes at the date of purchase
plus accrued and unpaid interest, if any, on such notes, to the date of
purchase. In addition, at any time on or prior to February 1, 2003, upon the
occurrence of a Change of Control (as defined in the Indenture and the Existing
Notes Indenture), we may redeem all but not less than all of the Notes and
Existing Notes, at a redemption price equal to the sum of (1) 100% of the
outstanding principal amount of such notes plus (2) the Applicable Premium (as
defined in the Indenture and the Existing Notes Indenture) plus (3) accrued and
unpaid interest and Liquidated Damages (as defined in the Indenture and the
Existing Notes Indenture), if any, on such notes, to the date of redemption.
The occurrence of certain of the events that would constitute a Change of
Control would constitute a default under the New Credit Facility and might
constitute a default under our other indebtedness. In addition, the New Credit
Facility prohibits the purchase of the Notes and Existing Notes by us in the
event of a Change of Control, unless and until such time as the indebtedness
under the New Credit Facility is repaid in full. Our failure to purchase the
Notes and Existing Notes in such instance would result in a default under each
of the Indenture, the Existing Notes Indenture and the New Credit Facility. The
inability to repay the indebtedness under the New Credit Facility, if
accelerated, could have material adverse consequences to us and to the holders
of the Notes. Our future indebtedness may also contain prohibitions of certain
events or transactions that could constitute a Change of Control or require
such indebtedness to be repurchased upon a Change of Control. In the event of a
Change of Control, we cannot guarantee that we would have sufficient assets to
satisfy all of our obligations under the New Credit Facility, the Existing
Notes and the Notes. See "Description of the Notes--Change of Control."
You Cannot Be Sure That an Active Trading Market Will Develop for the New Notes
The New Notes are being offered to the holders of the Old Notes. The Old
Notes were issued on November 20, 1998 to a small number of institutional
investors and overseas investors and are eligible for trading in the Private
Offering, Resale and Trading through Automated Linkages (PORTAL) Market, the
National Association of Securities Dealers' screenbased, automated market for
trading of securities eligible for resale under Rule 144A. To the extent that
Old Notes are tendered and accepted in the Exchange Offer, the trading market
for the remaining untendered Old Notes could be adversely affected. There is no
existing trading market for the New Notes. We do not intend to apply for
listing or quotation of the New Notes on any exchange. Therefore, we do not
know the extent to which investor interest will lead to the development of a
trading market or how liquid that market might be, nor can we make any
assurances regarding the ability of New Note holders to sell their New Notes or
the price at which the New Notes might be sold. Although the Initial Purchasers
have informed us that they currently intend to make a market in the New Notes,
they are not obligated to do so, and any such market-making may be discontinued
at any time without notice. As a result, the market price of the New Notes
could be adversely affected. Historically, the market for non-investment grade
debt, such as the New Notes, has been subject to disruptions that have caused
substantial volatility in the prices of such securities. Any such disruptions
may have an adverse effect on holders of the New Notes.
19
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the Exchange Offer. The net proceeds
from the Offering of $188 million were used to temporarily repay amounts
outstanding under the Revolving Credit Facility of approximately $30 million, to
fund working capital needs which would have been historically funded through the
Receivables Securitization Facility and to pay related fees and expenses. As
discussed above under "Summary-- Recent Developments," we also intend to
reborrow amounts under the Revolving Credit Facility and to sell receivables
under the Receivables Securitization Facility to finance one or more future
acquisitions or to fund additional working capital. At September 30, 1998,
borrowings under the Revolving Credit Facility bore interest at a weighted
average interest rate of 7.875% per annum and receivables sold under the
Receivables Securitization Facility bore interest at a weighted average interest
rate of 5.6% per annum. On a pro forma basis after giving effect to the Offering
and the application of the net proceeds therefrom, we would have had
approximately $309 million in aggregate availability under the Revolving Credit
Facility and the Receivables Securitization Facility.
20
<PAGE>
CAPITALIZATION
The following table shows our capitalization as of September 30, 1998 on a
historical basis, and on a pro forma basis, after giving effect to the Offering
and the application of the net proceeds from the Offering. This table should be
read in conjunction with "Use of Proceeds," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and our consolidated
financial statements and the notes to such financial statements incorporated by
reference in this prospectus.
<TABLE>
<CAPTION>
As of September 30, 1998
---------------------------
Historical As Adjusted
------------ ------------
(In millions)
<S> <C> <C>
Cash and cash equivalents ................. $ 22.2 $ 22.2
======== =========
Debt(a):
Revolving Credit Facility(b) ............. $ 25.0 $ --
Term Facility ............................ 254.7 254.7
71/8% Notes due 2005 ..................... 149.0 149.0
Existing Notes ........................... 400.0 400.0
Notes offered hereby(c) .................. -- 193.0
Other .................................... 36.9 36.9
-------- ---------
Total debt ............................ $ 865.6 $ 1,033.6
-------- ---------
Stockholders' equity (deficit):
Preferred Stock .......................... $ -- $ --
Common Stock ............................. 0.4 0.4
Capital in excess of par value ........... 313.3 313.3
Retained (deficit) ....................... (601.5) (601.5)
Other .................................... (20.7) (20.7)
-------- ---------
Total stockholders' (deficit) ......... (308.5) (308.5)
-------- ---------
Total capitalization .................. $ 557.1 $ 725.1
======== =========
</TABLE>
------------
(a) Excludes $168.2 million of funds received from the sale of accounts
receivable through the Receivables Securitization Facility which was
entered into concurrently with the Recapitalization and which was
reflected as a reduction in receivables. After giving effect to the
Offering, as of September 30, 1998, $5.2 million would have been
outstanding under the Receivables Securitization Facility. Upon completion
of the Offering, we have approximately $160 million available under the
Receivables Securitization Facility. We intend to sell receivables under
the Receivables Securitization Facility to fund working capital needs and
to fund potential acquisitions. See "Summary--Recent Developments."
(b) Upon completion of the Offering, we have approximately $149 million
available under the $175 million Revolving Credit Facility for working
capital and general corporate purposes, including potential acquisitions,
after taking into account approximately $26 million of letters of credit.
(c) Excludes $7.0 million of original issue discount which will be
amortized over the life of the Notes.
21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Fisher was formed in September 1991. Our operations are conducted by
wholly owned and majority-owned subsidiaries, joint ventures, equity interests
and agents, located in North and South America, Europe, the Far East, the
Middle East and Africa. Our activities relate principally to one business
segment--scientific and clinical products. This includes operations engaged in
the supply, marketing, service and manufacture of scientific, clinical,
educational and occupational health and safety products.
Pursuant to the Recapitalization, which was consummated on January 21,
1998, approximately 87% of the fully diluted common stock of Fisher was
converted into the right to receive $9.65 per share in cash (approximately
$955.0 million in the aggregate) pursuant to an election process that provided
stockholders the ability to elect for each share of Fisher common stock held,
subject to proration, either $9.65 in cash or to retain one share of stock in
the recapitalized company. Pursuant to the Merger Agreement, vesting of all
outstanding options accelerated. See Note 2 to the December 31, 1997 Financial
Statements incorporated by reference herein.
On October 17, 1995, Fisher acquired the principal businesses of the
laboratory supplies division of Fisons in a transaction accounted for as a
purchase. We purchased the outstanding stock of CMS, headquartered in Houston,
Texas, and substantially all of the net assets of FSE, a division of Fisons
with headquarters in Loughborough, United Kingdom. CMS is a supplier of
diagnostic test kits, equipment and laboratory supplies to integrated health
care organizations, managed care organizations, national and independent
reference laboratories, and physicians' office laboratories where human
specimens are tested for subsequent diagnosis, as well as a supplier to the
scientific research community. FSE is a leading supplier of laboratory products
in the United Kingdom and also serves markets throughout Europe, Africa, the
Middle East and the Far East. We intend to use these businesses to expand its
operations in the clinical laboratory market, enhance its position in the North
American scientific research laboratory market and complement its international
growth strategy. During 1998, 1997, 1996 and 1995, Fisher made certain smaller
acquisitions of laboratory products distributors and other businesses. All
acquisitions have been accounted for as purchases; operations of the companies
and businesses acquired have been included in Fisher's consolidated financial
statements from their respective dates of acquisition. See Notes to the
December 31, 1997 Financial Statements incorporated by reference in this
prospectus.
Results of Operations
September 30, 1998 as Compared to September 30, 1997
Sales
Sales for the three and nine months ended September 30, 1998 increased
6.8% and 5.7% to $592.8 million and $1,716.6 million, respectively, from $554.8
million and $1,624.1 million for the comparable periods in 1997, primarily due
to growth in domestic operations and lower sales in 1997 attributable to the
August 1997 UPS strike.
Gross Profit
Our gross profit for the three and nine month periods ended September 30,
1998 increased 9.3% and 6.4% to $167.2 million and $476.4 million,
respectively, from $153.0 million and $447.8 million for the comparable periods
in 1997, primarily as a result of increased volume. Gross profit as a percent
of sales increased to 28.2% for the three months ended September 30, 1998, from
27.6% for the same period in 1997 and increased by 0.2% to 27.8% for the nine
months ended September 30, 1998 as compared to the same period in the prior
year. The increase in gross profit for the three and nine month periods ended
September 30, 1998 largely reflects improvements in gross margins of our
domestic operations.
Selling, General and Administrative Expense
Selling, general and administrative expense for the three month period
ended September 30, 1998 decreased 2.6% to $130.2 million from $133.7 million
for the comparable period in 1997, a decrease in nonrecurring cost due to the
UPS strike in 1997 and system-related changes in 1997. Selling, general and
22
<PAGE>
administrative expense for the nine month period ended September 30, 1998
increased 0.9% to $386.0 million from $382.6 million for the comparable period
in 1997 primarily as a result of increased sales volume partially offset by the
aforementioned decrease in nonrecurring costs. Selling, general and
administrative expense in both periods includes nonrecurring costs associated
with the implementation of the restructuring plan that began in the third
quarter of 1995 as well as costs to integrate CMS, acquired in October 1995,
into our company. The periods ended September 30, 1997 also include information
system-related charges associated with our implementation of new global
computer systems and direct costs resulting from the UPS strike. Additionally,
the periods ended September 30, 1998 include nonrecurring costs associated with
the implementation of our 1997 restructuring plan (the "1997 Restructuring
Plan"). Certain costs resulting from the temporary duplication of operations,
relocation of inventories and employees, hiring and training new employees, and
other one-time and redundant costs, which will be eliminated as the
restructuring plans are completed, are recognized as incurred. For the three
and nine month periods ended September 30, 1998, $1.7 million and $5.8 million
of such costs were included in selling, general and administrative expense,
compared with $10.2 million and $18.5 million for the corresponding periods in
1997. Excluding such costs, selling, general and administrative expense as a
percentage of sales was 21.7% and 22.1% for the three and nine months ended
September 30, 1998 compared with 22.3% and 22.4% for the same periods in 1997.
Operations outside of the United States have higher selling, general and
administrative expense as a percentage of sales as compared with that of our
domestic operations. These higher costs are being incurred as part of a plan to
develop an integrated worldwide supply capability. As a result of increased
revenues and restructuring actions taken to date, selling, general and
administrative expense as a percent of sales for operations outside the United
States has improved.
Recapitalization-Related Costs
In connection with the Recapitalization, we recorded $71.0 million of
expenses consisting primarily of non-cash compensation expense relating to the
conversion of employee stock options, the implementation of certain executive
severance agreements and the grant of options to certain executives in
accordance with the terms of the Recapitalization.
Income From Operations
Income from operations for the three months ended September 30, 1998
increased to $37.0 million from $19.3 million for the corresponding period in
1997. Income from operations decreased to $19.4 million for the nine months
ended September 30, 1998, compared with $65.2 million for the corresponding
period in 1997. Income from operations, excluding Recapitalization-related
costs and the aforementioned nonrecurring costs, as a percent of sales was 5.6%
and 5.2% for the nine months ended September 30, 1998 and September 30, 1997,
respectively.
Interest Expense
Interest expense increased to $20.8 million and $67.3 million for the
three and nine month periods ended September 30, 1998 from $5.4 million and
$17.6 million for the comparable periods in 1997. The increase is the result of
additional indebtedness resulting from the Recapitalization as well as $6.9
million of charges, incurred during the first quarter of 1998, related to the
consummation of the Recapitalization, including one-time bank commitment fees,
the write-off of unamortized financing costs related to long-term debt
refinanced and the loss on the sale of accounts receivable (discussed below).
Other (Income) Expense, Net
Other (income) expense, net for the three and nine month periods ended
September 30, 1998 decreased to $0.2 million of expense and increased to $3.0
million of income, respectively, from $4.6 million and $0.1 million of expense
for the comparable periods in 1997. The decrease in expense for the quarter was
primarily due to $3.6 million of fees and expenses related to the Board of
Directors' review of strategic alternatives in 1997, which did not recur in
1998. The increase in income for the nine month period is due to increased
interest income resulting from the timing of cash received from the
Recapitalization.
Income Tax (Benefit) Provision
The income tax provision for the three months ended September 30, 1998 was
$9.3 million compared to $5.4 million for the corresponding period in 1997. The
effective tax rate for the nine months ended September 30, 1998 was a 26.9% tax
benefit compared with a 48.4% tax charge for the corresponding period in 1997.
23
<PAGE>
Excluding the $71.0 million of Recapitalization-related costs, the effective
income tax rate for the nine months ended September 30, 1998 was 59.6%. The
increase in the effective tax rate from the prior year is primarily related to
the reduction in domestic pretax income due to the additional interest expense
incurred as a result of the Recapitalization and foreign losses for which no
tax benefit is recorded.
Net Income (Loss)
Net income (loss) for the three and nine months ended September 30, 1998
increased to income of $6.7 million and decreased to a loss of $32.8 million,
respectively, from income of $3.9 million and $24.5 million for the comparable
periods in 1997, as a result of the factors discussed above
Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996
Sales
Sales for the year ended December 31, 1997 increased 1.4% to $2,175.3
million from $2,144.4 million for the comparable period in 1996. Sales growth
in our historical North American operations and the inclusion of sales of
operations acquired in the fourth quarter of 1996 (UniKix Technologies and a
laboratory products distributor in Mexico) were partially offset by a decrease
in sales to the U.S. clinical laboratory market and the impact of the strike by
employees of UPS who are members of the International Brotherhood of Teamsters
(the "UPS strike"), which occurred in August of 1997.
As a national distributor, we utilize the service of UPS for a significant
portion of its domestic shipments. We are one of UPS's largest customers in
terms of annual revenue to the shipper. The UPS strike significantly reduced
sales for the third and fourth quarters of 1997 and increased operating costs.
Gross Profit
Our gross profit for the year ended December 31, 1997 increased 2.3% to
$591.7 million from $578.5 million for the comparable period in 1996, primarily
as a result of volume. Gross profit as a percent of sales increased to 27.2%
for the year ended December 31, 1997 from 27.0% for the comparable period in
1996. Gross profit in 1997 was negatively affected by $6.7 million of costs
related to adjustments to certain inventory reserves due to changes in
estimates, direct costs resulting from the UPS strike and the integration of
CMS into our company. Gross profit in 1996 includes $1.2 million of costs
associated with the revaluation of CMS and FSE acquired inventory.
Selling, General and Administrative Expense
Selling, general and administrative expense for the year ended December
31, 1997 increased 7.2% to $518.8 million from $483.9 million for the
comparable period in 1996. Selling, general and administrative expense in both
periods includes nonrecurring and redundant costs associated with the
implementation of the 1995 Restructuring Plan (defined below), the integration
of CMS into our company, and, in 1997, software write-offs and other
information system-related charges associated with our implementation of new
global computer systems, direct costs resulting from the UPS strike, and
management retention payments related primarily to the Recapitalization.
Nonrecurring integration and restructuring-related costs include costs
resulting from the temporary duplication of operations, relocation of
inventories and employees, hiring and training new employees, and other
one-time and redundant costs, which will be eliminated as the integration and
restructuring plans are completed. These costs are recognized as incurred. For
the year ended December 31, 1997, approximately $29.8 million of such
nonrecurring costs were included in selling, general and administrative expense
compared with $18.2 million for the corresponding periods in 1996.
Excluding nonrecurring costs, selling, general and administrative expense
as a percentage of sales was 22.5% for 1997 compared with 21.7% for 1996. This
increase is primarily due to lower than expected sales volume without a
corresponding decrease in expense. We have taken and continue to take actions
to improve efficiencies and reduce this expense as a percent of sales.
Operations outside the United States continue to have significantly higher
selling, general and administrative expense as a percentage of sales as
compared with that of our domestic operations. These higher costs are being
incurred as part of a plan to develop an integrated worldwide supply
capability, the benefit of which has not been fully realized.
24
<PAGE>
Restructuring and Other Charges
Following the execution of the Merger Agreement, during the fourth quarter
of 1997 in conjunction with the annual business planning process, we evaluated
our business strategy for both our domestic and international operations and,
as a result, adopted the 1997 Restructuring Plan and recorded restructuring and
other charges of $51.8 million. The charges include costs associated with the
closure of additional logistics and customer-service centers and related asset
write-offs in the United States and internationally, the write-off of goodwill
related to certain international operations and the write-off of
systems-related assets. Implementation of the 1997 Restructuring Plan is
expected to be completed and the related accruals substantially expended by the
end of 1999.
Income from Operations
Income from operations for the year ended December 31, 1997 decreased to
$21.1 million from $94.6 million for the comparable period in 1996 primarily
due to the 1997 restructuring and other nonrecurring charges and the increased
selling, general and administrative expense discussed above. Income from
operations as a percent of sales decreased to 1.0% for the year ended December
31, 1997, compared with 4.4% for the same period in 1996.
Interest Expense
Interest expense for the year ended December 31, 1997 decreased to $23.0
million from $27.1 million for the comparable period in 1996. The decrease
principally reflects a reduction in interest expense as a result of the June
1996 conversion and redemption of the Fisher's $125 million step-up convertible
notes. See "Liquidity and Capital Resources" below.
Other (Income) Expense, net
Other (income) expense, net for the year ended December 31, 1997 decreased
to $3.2 million of expense from $0.1 million of income for the comparable
period in 1996. The increase in expense for the year was primarily due to
foreign exchange losses, $5.0 million of fees and expenses related to the Board
of Directors' review of strategic alternatives and a loss on the sale of a
non-strategic business, offset by $2.8 million of gains on sales of non-core
assets.
Income Tax Provision
The income tax provision was $25.4 million for the year ended December 31,
1997 compared with $30.8 million for the comparable period in 1996. The
effective income tax rate for 1997 increased significantly compared with 45.5%
for the corresponding period in 1996. The increased rate is a result of foreign
losses for which no tax benefits are currently being provided, write-off of
previously recognized foreign tax benefits and nondeductible fees and expenses
incurred in connection with the Board's review of strategic alternatives.
Net Income (Loss)
Net income (loss) for the year ended December 31, 1997 decreased to $30.5
million of loss from $36.8 million of income for the comparable period in 1996.
These changes are due to the factors discussed above.
Year Ended December 31, 1996 as Compared to Year Ended December 31, 1995
Sales
Sales for the year ended December 31, 1996 increased 49% to $2,144.4
million from $1,435.8 million for the comparable period in 1995. The sales
increase primarily reflects sales of CMS and FSE, acquired in October 1995, as
well as growth in North American distribution.
Gross Profit
Our gross profit for the year ended December 31, 1996 increased 50% to
$578.5 million from $386.9 million for the comparable period in 1995. The
increase in gross profit is attributable primarily to the aforementioned sales
growth.
Gross profit as a percent of sales was 27.0% for the year ended December
31, 1996 and remained consistent with that of the same period in 1995. Lower
gross margins associated with recently acquired
25
<PAGE>
businesses were offset by improvements in gross margins of our historical North
American operations. Both 1996 and 1995 include $1.2 million of costs
associated with the revaluation of CMS and FSE acquired inventory.
Selling, General and Administrative Expense
Selling, general and administrative expense for the year ended December
31, 1996 increased 45% to $483.9 million from $334.4 million for the comparable
period in 1995. The increase reflects the inclusion of selling, general and
administrative expenses of recently acquired businesses, growth in base North
American distribution operations, nonrecurring costs to integrate CMS into our
company and nonrecurring costs associated with the implementation of the 1995
Restructuring Plan that began in the third quarter of 1995. See
"--Restructuring Charge."
Operations outside of the United States continue to have significantly
higher selling, general and administrative expense as a percentage of sales as
compared with that of our domestic operations. These higher costs are being
incurred as part of a plan to develop an integrated worldwide supply
capability, the benefit of which has not been fully realized.
Restructuring Charge
In the third quarter of 1995, we recorded a pretax restructuring charge of
$34.3 million. The 1995 restructuring plan (the "1995 Restructuring Plan"),
which anticipated the integration of the former Fisons businesses, including
CMS, with our company, included the elimination and in some cases relocation of
certain administrative functions, reorganization of the research sales force,
and the consolidation and relocation of certain logistics and customer service
systems and locations throughout the world.
Certain costs resulting from the temporary duplication of operations,
relocation of inventories, relocation of employees, hiring and training new
employees, other start-up costs and redundant costs, which will be eliminated
as the 1995 Restructuring Plan is implemented, were not included in the
restructuring charge and are recognized as incurred. Approximately $18.2
million and $14.5 million of such charges have been recorded in 1996 and 1995,
respectively, and are included in selling, general and administrative expense.
Income from Operations
Income from operations for the year ended December 31, 1996 increased to
$94.6 million, compared with $18.2 million for the corresponding period in
1995. The increase reflects the effect of the restructuring charge of $34.3
million recorded in 1995 as well as the factors discussed above. Our operations
outside of North America were not profitable, primarily as a result of costs
associated with the continued development of our worldwide supply capability
and up-front infrastructure costs as discussed above in "Selling, General and
Administrative Expense."
Interest Expense
Interest expense of $27.1 million in 1996 increased by $12.1 million from
the 1995 level. The increase principally reflects interest related to
borrowings used to finance the acquisition of CMS and FSE in the fourth quarter
of 1995, partially offset by the June 1996 conversion and redemption of our
$125 million step-up convertible notes.
Net Income
Net income for the year ended December 31, 1996 increased to $36.8 million
from $3.2 million for the comparable period in 1995 as a result of the factors
discussed above.
Liquidity and Capital Resources
During the nine months ended September 30, 1998, our operations generated
$89.0 million of cash compared with $40.2 million for the same period in 1997.
This increase in cash provided by operating activities primarily reflects an
increase in cash flows from changes in working capital and other assets and
liabilities. The increase in cash flows from changes in working capital is due
primarily to an increase in cash provided by payables, accruals and other
current liabilities partially offset by a decrease in cash provided by
26
<PAGE>
receivables. The payables and accruals change is primarily due to the timing of
accounts payable payments, reduced payments of accrued compensation amounts and
increased accrued interest as a result of the Recapitalization. Other assets
and liabilities reduced operating cash flows by $6.4 million in 1998 compared
with $21.8 million in 1997 primarily due to an unusually high balance at
September 30, 1997, attributable to the increased effect of foreign currency
translation in 1997 and increased payments to software service vendors related
to the implementation of new global computer systems in 1997.
Our operating working capital, which is defined as receivables plus
inventories less accounts payable and accrued liabilities, decreased to ($19.7)
million at September 30, 1998 from $185.7 million at December 31, 1997. The
decrease is due principally to decreases in accounts receivable and inventories
and increases in accounts payable and accrued liabilities. The decrease in
accounts receivable is primarily the result of the sale of receivables under a
receivables securitization, as discussed below. Inventory decreased principally
due to the ongoing consolidation of logistical facilities. The increases in
accounts payable and accrued liabilities are principally attributable to the
timing of payments and accrued interest associated with the new debt resulting
from the Recapitalization.
Currently, we are evaluating a number of potential acquisitions in the
United States and Europe and implementing the planned consolidation and
relocation of our logistical facilities in North America. While there is no
guarantee that any of these potential acquisitions will be consummated or that
our consolidation and relocation activities will occur, one or more
acquisitions and implementation of our relocation activities could have a
material impact on our working capital requirements throughout the remainder of
1998. The net proceeds from the Offering were used to temporarily repay all
amounts presently outstanding under the Revolving Credit Facility of
approximately $30 million, and the remaining balance was used to fund working
capital needs which would have been historically funded through the Receivables
Securitization Facility. We intend to reborrow amounts under the Revolving
Credit Facility and to sell receivables under the Receivables Securitization
Facility to finance one or more future acquisitions, if they occur.
During the nine months ended September 30, 1998, we used $110.8 million of
cash for investing activities compared with $45.6 million for the same period
in 1997. The increase in cash used for investing activities is primarily due to
increases in acquisition spending offset by decreases in capital expenditures.
During the nine months ended September 30, 1998, we completed four acquisitions
for an aggregate purchase price of $68.7 million. Acquisitions were funded with
cash flow from operations and through borrowings of $25 million under our $175
million Revolving Credit Facility. For the nine months ended September 30, 1998
and 1997, we have capital expenditures of $43.7 million and $49.3 million,
respectively. This decrease in capital expenditures is primarily due to timing.
We anticipate our 1998 annual capital expenditures will exceed total 1997
expenditures as we continue our consolidation and relocation of logistics
facilities in North America and our project to upgrade global computer systems.
On November 20, 1998, we obtained $8.8 million of long term debt financing
relating to our new distribution facility in Hanover Park, Illinois.
During the nine months ended September 30, 1998, our financing activities
provided $25.8 million compared with $10.8 million for the same period in 1997.
This change is primarily due to an increase of $737.3 million in net long-term
debt proceeds, including proceeds from the Receivables Securitization Facility,
attributable to the Recapitalization. In connection with the Recapitalization,
we entered into the New Credit Facility, the Receivables Securitization
Facility and issued the Existing Notes. The full proceeds of the Existing
Notes, together with a portion of the proceeds of the New Credit Facility, were
used to finance the conversion into cash of the shares of Fisher common stock
then outstanding that were not retained by existing stockholders and employees,
to refinance $107.8 million of indebtedness of ours outstanding on the date of
the Recapitalization and to pay related fees and expenses of the
Recapitalization. In addition, the New Credit Facility will be used to provide
for our working capital requirements and future acquisitions, if any. The
interest rates and maturity dates of the New Credit Facility, the Receivables
Securitization Facility and the Existing Notes are described under "Description
of Other Indebtedness" and in Note 6 to our Financial Statements which are
incorporated by reference in this prospectus.
On January 21, 1998, we executed two interest rate swap agreements,
exchanging our floating-rate obligation on $120 million notional principal
amount for a fixed-rate payment obligation of 5.6425% per annum through January
23, 2001 and $250 million notional principal amount for a fixed-rate payment
obligation of 5.7375% per annum through January 23, 2003. The fair value of
these interest-rate swap agreements as of September 30, 1998, based upon quoted
market prices, was ($10.9) million.
27
<PAGE>
The New Credit Facility contains covenants by us and the subsidiary
borrowers, including, without limitation, restrictions on:
o indebtedness;
o the sale of assets;
o mergers, acquisitions and other business combinations;
o minority investments;
o the payment of cash dividends to shareholders; and
o various financial covenants.
The financial covenants include requirements to maintain certain levels of
interest coverage, debt to earnings before interest, taxes, depreciation and
amortization ("EBITDA") and minimum EBITDA and limitations on capital
expenditures. In addition to the mandatory repayment schedule discussed in Note
6 to Financial Statements incorporated by reference in this prospectus, loans
under the Term Facility are required to be prepaid with 50% of excess cash
flow, as defined in the New Credit Facility and subject to certain limits as
specified in such New Credit Facility, and certain of our equity issuances, and
100% of net-cash proceeds of certain asset sales, certain insurance and
condemnation proceeds and certain of our debt issuances. We obtained the
consent of the lenders under the New Credit Facility to consummate the
Offering.
The Receivables Securitization Facility relates to the sale, on a
revolving basis, of certain of the accounts receivables of Fisher Scientific
Company L.L.C., a Delaware limited liability corporation ("FSC"), to a
bankruptcy remote subsidiary of FSC that entered into an agreement to transfer,
on a revolving basis, an undivided percentage ownership interest in a
designated pool of accounts receivable, up to a maximum amount based on a
defined calculated percentage of the outstanding accounts receivable balance.
As of September 30, 1998, we had sold the maximum amount of eligible
receivables, or $168.2 million, under the Receivables Securitization Facility.
The Existing Notes will mature on February 1, 2008 with interest payable
semiannually in arrears on February 1 and August 1 of each year. The Existing
Notes are our unsecured senior subordinated obligations, subordinated in right
of payment to all existing and future senior indebtedness and rank equally in
right of payment with all of our other existing and future senior subordinated
indebtedness, including the Notes.
The Existing Notes are redeemable at our option at any time after February
1, 2003 at an initial redemption price of 104.5%, declining ratably to par on
or after February 1, 2006. In addition, on or prior to February 1, 2001, we may
redeem up to 40% of the original principal amount of the Existing Notes at a
redemption price of 109% of the principal amount, plus accrued and unpaid
interest, if any, to the date of redemption with the net cash proceeds of one
or more public equity offerings, provided that at least 60% of the aggregate
principal amount of the Existing Notes originally issued remains outstanding
immediately after the occurrence of such redemption. Upon a Change of Control
Triggering Event, as defined in the Existing Notes Indenture, we will be
required to make an offer to purchase all outstanding Existing Notes at 101% of
the principal amount, together with accrued and unpaid interest, if any, to the
date of purchase.
The Existing Notes Indenture contains covenants that restrict, among other
things, our ability to:
o incur additional indebtedness;
o pay dividends or make certain other restricted payments;
o merge or consolidate with any other person; and
o make minority investments.
The Existing Notes Indenture also contains other various covenants which
are customary for transactions of this type.
We expect that cash flows from operations, together with cash and cash
equivalents on hand and funds available under existing credit facilities, will
be sufficient to meet ongoing operating and capital expenditure requirements.
28
<PAGE>
European Economic and Monetary Union
We conduct business in many of the countries which are participating in
the European Economic and Monetary Union. These participating countries adopted
the Euro as their national currency on January 1, 1999. It is currently
anticipated that on and after January 1, 2002, the national currencies of the
participating countries will cease to exist and the sole legal tender in such
countries will be the Euro. Business enterprises have the option of switching
to the single currency at any time prior to January 1, 2002. In connection with
the upgrade of our management information systems, we are incorporating the
necessary changes which allow us to conduct business in Euros and the national
currencies during the transition period and entirely in Euros thereafter. We
are not able to accurately estimate or segregate the costs relating to the
conversion to the Euro, but management does not believe that such costs are
material. We do not anticipate that the conversion to the Euro will have a
material impact on our future results of operation.
Dependence on Information Systems; Systems Conversion; Year 2000 Issue
Our business is dependent in large part on our information systems. These
systems play an integral role in:
o tracking product offerings, including pricing and availability;
o processing and shipping more than 20,000 items per day;
o warehouse operations;
o purchasing from more than 3,000 vendors;
o inventory management;
o financial reporting; and
o other operational functions.
Year 2000 issues exist when dates in computer systems are recorded using
two digits (rather than four) and are then used for arithmetic operations,
comparisons or sorting. A two-digit date recording may recognize a date using
"00" as 1900 rather than 2000, which could cause our computer systems to
perform inaccurate computations. Our Year 2000 issues relate not only to our
computer systems but also to the systems of our customers and suppliers.
Based upon assessments of each of our business units and the information
systems supporting those operations, we have begun implementing a program
having the following major elements and a target completion date no later than
December 31, 1999.
o First, the applications and other software supporting each business unit
has been inventoried and analyzed and then planned for either: (1)
confirmation as Year 2000 compliant, (2) upgrade to a Year 2000 compliant
version, (3) remediation to become Year 2000 compliant or (4) replacement
by other software which provides Year 2000 compliance and other benefits.
For example, certain of the financial applications supporting the U.S.
distribution business have been (or by December 31, 1999 will be)
replaced by Oracle software; most of the remaining software supporting
the U.S. distribution businesses has been remediated.
The primary methods of assuring Year 2000 compliance for core business
systems are:
o remediation for the U.S., Canadian and U.K. distribution systems;
o replacement by new Year 2000 and Euro compliant software for the other
European businesses;
o upgrade to Year 2000 versions for certain manufacturing businesses; and
o replacement by new Year 2000 software for the remaining manufacturing
businesses and overseas distribution businesses.
29
<PAGE>
o Second, we have initiated programs to assure Year 2000 compliance for the
equipment and software licenses that we currently market to our customers
and to obtain and transmit to customers information about the equipment
and software licenses which customers may have purchased in the past.
Some of our various units are also assisting customers in developing
plans to replace or upgrade any non-compliant equipment or software,
especially in laboratories, whether or not the products were acquired
from us.
o Third, we have (1) initiated programs to identify those suppliers whose
own systems could lead to delays or interruptions in supply, either
because of Year 2000 non-compliance or because of systems upgrades or
replacements to avoid Year 2000 issues and (2) begun developing
contingency plans during the fourth quarter of 1998 and first quarter of
1999, including adjustments in inventory levels and order lead times for
products provided by vendors who have not provided adequate assurances,
to ameliorate any resultant delays or interruptions and to prevent or
reduce any adverse effect on fill rates to our customers.
o Fourth, with particular regard to Electronic Data Interchange ("EDI"), we
have developed plans to work with trading partners, including both
suppliers and customers, to either work around the requirement for six
digit date fields in the prior EDI standards or to migrate, with the
trading partner, to ANSI version 4010, which employs eight digit date
fields. By mid-1999, we will be in a position to accept either six or
eight digit date fields in its EDI dealings with customers, suppliers and
other EDI trading partners.
o Fifth, we are implementing a project involving testing with available
test software personal computers and associated software at our various
locations, followed by upgrade or replacement where appropriate. In
addition, we are implementing projects which include inventory,
identification, assessment (through vendor contacts, testing or both),
planning, implementation (replacement, repair or upgrade), and testing of
manufacturing equipment, environmental control equipment, elevators,
security systems, telecommunications software and equipment and similar
purchased equipment, software and systems. While this portion of the
overall program is targeted for completion by June 30, 1999, it is
currently anticipated that a limited amount of this activity would remain
incomplete until later in 1999.
With regard to financial cost, implementation of the program has resulted,
and will continue to result in, significant time expenditure by our personnel
and outside software and equipment providers and some expenditures for
equipment and software upgrades and replacements. Because many of these efforts
have been designed to achieve other functional or systems improvements, in
addition to Year 2000 compliance, and are being carried out by operational
personnel within each business unit, it is difficult to allocate particular
funding levels solely to the Year 2000 compliance activities. In general,
however, we have spent $2.2 million in operating expenses and $23.0 million in
capital expenditures on Year 2000 activities to date. We estimate we would
incur an additional $4.5 million in operating expenses and $14.5 million in
capital expenditures to complete our Year 2000 programs.
Although we believe that our present remediation and replacement programs
will adequately address the Year 2000 issues with respect to our internal
systems, there can be no assurance that our belief is correct or that our
present assessment is in fact accurate. There can be no assurance that the
remediation and replacement programs will be completed prior to the Year 2000
or that if completed prior to the Year 2000 that disruption will not occur. In
addition, there can be no assurance that our vendors, suppliers and the myriad
of other financial, transportation, utility and other service providers will
successfully resolve their own Year 2000 issues in a manner which avoids
significant impact to us. We have received written assurances from many of our
suppliers and other providers acknowledging the Year 2000 issues and stating
their present intention to be compliant. We have not received assurances from
all of our suppliers and other providers and
30
<PAGE>
there is no guarantee that one or more key suppliers and other providers will
not fail to become compliant in time to avoid a disruption to our business
which, in spite of our contingency plans, would have a significant adverse
impact on us. Because of the complexity of our systems, the number of
transactions processed and the number of third parties with whom we interact,
certain failures by us or our suppliers, vendors and other service providers to
completely overcome the Year 2000 issue could result in substantial and
material impact on our business, operations and financial results.
Our forecasted costs and timing for completion of our Year 2000 programs
are based on best estimates, which in turn are based on numerous assumptions of
future events, including the continued availability and cost of necessary
personnel and other resources, third party modification plans, and other
factors. However, we cannot be certain that these estimates will be achieved
and actual results could differ materially from these estimates.
Environmental Matters
Some of our operations involve and have involved the handling, manufacture
or use of substances that are classified as toxic or hazardous substances
within the meaning of applicable environmental laws. Consequently, some risk of
environmental and other damage is inherent in our particular operations and
products, as it is with other companies engaged in similar businesses. There
can be no assurance that material damage will not occur or be discovered to
have occurred or be determined to be material in the future. We are currently
involved in various stages of investigation and remediation relative to
environmental protection matters.
Our Fair Lawn and Somerville, New Jersey facilities are the subject of
administrative consent orders, issued pursuant to New Jersey's Environmental
Clean-Up and Responsibility Act ("ECRA")--now called the Industrial Site
Recovery Act ("ISRA")--in connection with prior transfers of a controlling
interest in our company, which require the undertaking of certain remediation
and other activities at these sites. The Fair Lawn facility is also part of a
site listed on the "Superfund" National Priority List under the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"). We have also been notified that we are among the
potentially responsible parties under CERCLA or similar state laws for the
costs of investigating and/or remediating contamination caused by hazardous
materials at certain other sites. Our non-Superfund liabilities for
environmental matters are principally related to compliance with ECRA/ISRA
administrative consent orders and other environmental regulatory requirements
such as the Clean Air Act, the Clean Water Act and other generally applicable
requirements.
The potential costs related to environmental matters and the possible
impact on future operations are difficult to predict given the uncertainties
regarding the
o extent of the required cleanup;
o complexity and interpretation of applicable laws and regulations;
o varying costs of alternative cleanup methods; and
o extent of our responsibility.
However, such costs could be material. Accruals for environmental
liabilities are recorded, based on current interpretations of environmental
laws and regulations, when it is probable that a liability has been incurred
and the amount of such liability can be reasonably estimated. Estimates are
established based upon reports prepared by environmental specialists,
management's knowledge to date and its experience with the foregoing
environmental matters. These estimates include potential costs for
investigation, remediation, operation and maintenance of cleanup sites and
related capital expenditures. Accrued liabilities for environmental matters
were $35.1 million and $37.6 million at December 31, 1997 and 1996,
respectively. Although these amounts do not include third-party recoveries,
certain sites may be subject to indemnification. We have accounted for
environmental liabilities in accordance with Accounting Standards Statement of
Position 96-1, "Environmental Remediation Liabilities," which addresses
accounting and reporting for environmental remediation liabilities. Management
believes this accrual is adequate for the environmental liabilities expected to
be incurred and, as a result, believes that the ultimate liability incurred
with respect to environmental matters will not have a material adverse effect
on our financial statements or results of operations. However, future events,
such as changes in existing laws and regulations, changes in agency
31
<PAGE>
direction or enforcement policies, or changes in the conduct of our operations,
may give rise to additional compliance costs which could have a material
adverse effect on our financial statements.
Financial Instruments
Our financial instruments consist primarily of cash in banks, investments
in marketable securities, accounts receivable and debt. In addition, we have
forward currency contracts that hedge certain firm commitments and
interest-rate swap agreements to hedge certain interest payments on debt. See
Notes 3 and 6 to the December 31, 1997 Financial Statements and Note 6 to the
September 30, 1998 financial statements, both incorporated by reference in this
prospectus for additional information.
Dividends
We paid a quarterly cash dividend of $.02 per share for the first three
quarterly periods of fiscal 1997 and each of the quarterly periods of 1996. On
January 21, 1998, in connection with the Recapitalization, we and certain of
our subsidiaries entered into a New Credit Facility, which restricts our
ability to pay future dividends. Accordingly, Fisher does not anticipate paying
cash dividends on its common stock at any time in the future.
32
<PAGE>
THE EXCHANGE OFFER
Terms of the Exchange Offer; Period for Tendering Old Notes
Upon the terms and subject to the conditions set forth in this prospectus
and in the accompanying Letter of Transmittal, which together constitute the
Exchange Offer, we will accept for exchange Old Notes which are properly
tendered on or prior to the Expiration Date and not withdrawn as permitted
below. As used in this prospectus, the term "Expiration Date" means 5:00 p.m.,
New York City time, on , 1999. However, if we, in our sole discretion,
have extended the period of time for which the Exchange Offer is open, the term
"Expiration Date" means the latest time and date to which we extend the
Exchange Offer.
As of the date of this prospectus, $200 million aggregate principal amount
of the Old Notes is outstanding. This prospectus, together with the Letter of
Transmittal, is first being sent on or about , 1999, to all holders of
Old Notes known to us. Our obligation to accept Old Notes for exchange pursuant
to the Exchange Offer is subject to certain conditions as set forth under
"--Certain Conditions to the Exchange Offer" below.
We expressly reserve the right, at any time or from time to time, to
extend the period of time during which the Exchange Offer is open, and thereby
delay acceptance for exchange of any Old Notes, by giving oral or written
notice of such extension to the holders of Old Notes as described below. During
any such extension, all Old Notes previously tendered will remain subject to
the Exchange Offer and may be accepted for exchange by us. Any Old Notes not
accepted for exchange for any reason will be returned without expense to the
tendering holder as promptly as practicable after the expiration or termination
of the Exchange Offer.
Old Notes tendered in the Exchange Offer must be in denominations of
principal amount of $1,000 and any integral multiple of $1,000.
We expressly reserve the right to amend or terminate the Exchange Offer,
and not to accept for exchange any Old Notes not previously accepted for
exchange, upon the occurrence of any of the conditions of the Exchange Offer
specified below under "--Certain Conditions to the Exchange Offer." We will
give oral or written notice of any (1) extension, (2) amendment, (3)
non-acceptance or (4) termination to the holders of the Old Notes as promptly
as practicable on the next business day after the previously scheduled
Expiration Date. Such notice in the case of any extension is to be issued by
means of a press release or other public announcement no later than 9:00 a.m.,
New York City time on such date.
Procedures for Tendering Old Notes
The tender to us of Old Notes by a holder of Old Notes as set forth below
and acceptance of such tender by us will constitute a binding agreement between
the tendering holder and us upon the terms and subject to the conditions set
forth in this prospectus and in the accompanying Letter of Transmittal. Except
as set forth below, a holder who wishes to tender Old Notes for exchange
pursuant to the Exchange Offer must transmit a properly completed and duly
executed Letter of Transmittal, including all other documents required by such
Letter of Transmittal, to State Street Bank and Trust Company (the "Exchange
Agent") at the address set forth below under "--Exchange Agent" on or prior to
the Expiration Date. In addition, the Exchange Agent must receive:
o certificates for such Old Notes along with the Letter of Transmittal;
or
o prior to the Expiration Date, a timely confirmation of book-entry
transfer (a "Book-Entry Confirmation") of such Old Notes, if such
procedure is available, into the Exchange Agent's account at The
Depository Trust Company (the "Book-Entry Transfer Facility"), pursuant
to the procedure for book-entry transfer described below; or
o the holder must comply with the guaranteed delivery procedures
described below.
The method of delivery of Old Notes, Letters of Transmittal and all other
required documents is at your election and risk. If such delivery is by mail,
we recommend that you use registered mail, properly insured, with return
receipt requested. In all cases, you should allow sufficient time to assure
timely delivery. You shoud not send Letters of Transmittal or Old Notes to us.
33
<PAGE>
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee, and who wishes
to tender, should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering such
owner's Old Notes, either (1) make appropriate arrangements to register
ownership of the Old Notes in such owner's name or (2) obtain a properly
completed bond power from the registered holder. The transfer of registered
ownership may take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed unless the Old Notes surrendered for exchange
are tendered:
o by a registered holder of the Old Notes who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the Letter of Transmittal or
o for the account of an Eligible Institution (as defined below).
In the event that signatures on a Letter of Transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, such guarantees
must be by a firm which is a financial institution--including most banks,
savings and loan associations and brokerage houses--that is a participant in
the Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchanges Medallion Program
(collectively, "Eligible Institutions"). If Old Notes are registered in the
name of a person other than a signer of the Letter of Transmittal, the Old
Notes surrendered for exchange must be endorsed by, or be accompanied by a
written instrument or instruments of transfer or exchange, in satisfactory form
as determined by us in our sole discretion, duly executed by the registered
holder with the signature on such Old Notes guaranteed by an Eligible
Institution.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Old Notes tendered for exchange will be determined
by us in our sole discretion. This determination shall be final and binding. We
reserve the absolute right to reject any and all tenders of any particular Old
Notes not properly tendered or to not accept any particular Old Note which
acceptance might, in our judgment or our counsel's judgment, be unlawful. We
also reserve the absolute right to waive any defects or irregularities or
conditions of the Exchange Offer as to any particular Old Notes either before
or after the Expiration Date, including the right to waive the ineligibility of
any holder who seeks to tender Old Notes in the Exchange Offer. The
interpretation of the terms and conditions of the Exchange Offer as to any
particular Old Notes either before or after the Expiration Date, including the
Letter of Transmittal and the instructions to such Letter of Transmittal, by us
shall be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of Old Notes for exchange must be
cured within such reasonable period of time as we shall determine. Neither we,
the Exchange Agent nor any other person shall be under any duty to give
notification of any defect or irregularity with respect to any tender of Old
Notes for exchange, nor shall any of them incur any liability for failure to
give such notification.
If the Letter of Transmittal is signed by a person or persons other than
the registered holder or holders of Old Notes, such Old Notes must be endorsed
or accompanied by appropriate powers of attorney. In either case, such Old
Notes must be signed exactly as the name or names of the registered holder or
holders appear on the Old Notes.
If the Letter of Transmittal or any Old Notes or powers of attorney are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and, unless waived by
us, proper evidence satisfactory to us of their authority to so act must be
submitted.
By tendering, each holder will represent to us that, among other things,
(1) the New Notes acquired pursuant to the Exchange Offer are being obtained in
the ordinary course of business of the person receiving such New Notes, (2)
whether or not such person is the holder, and (3) that neither the holder nor
such other person has any arrangement or understanding with any person to
participate in the distribution of the New Notes. In the case of a holder that
is not a broker-dealer, each such holder, by tendering, will also represent to
us that such holder is not engaged in and does not intend to engage in a
distribution of the New Notes. If any holder or any such other person is an
"affiliate," as defined under Rule 405 of the Securities Act, of ours, or is
34
<PAGE>
engaged in, or intends to engage in, or has an arrangement or understanding
with any person to participate in, a distribution of such New Notes to be
acquired pursuant to the Exchange Offer, such holder or any such other person
(1) could not rely on the applicable interpretations of the staff of the
Commission and (2) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes, where such Old Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus that meets the requirements of
the Securities Act in connection with any resale of such New Notes. The Letter
of Transmittal states that by so acknowledging and by delivering such a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. See "Plan of
Distribution."
Acceptance of Old Notes for Exchange; Delivery of New Notes
Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, we will accept, promptly after the Expiration Date, all Old Notes
properly tendered, and will issue the New Notes promptly after acceptance of
the Old Notes. See "--Certain Conditions to the Exchange Offer" below. For
purposes of the Exchange Offer, we shall be deemed to have accepted properly
tendered Old Notes for exchange when, as and if we have given oral or written
notice to the Exchange Agent, with written confirmation of any oral notice to
be given promptly after giving such notice.
For each Old Note accepted for exchange, the holder of such Old Note will
receive a New Note having a principal amount equal to that of the surrendered
Old Note. The New Notes will bear interest from the most recent date to which
interest has been paid on the Old Notes or, if no interest has been paid on the
Old Notes, from November 20, 1998. Accordingly, registered holders of New Notes
on the relevant record date for the first interest payment date following the
consummation of the Exchange Offer will receive interest accruing from the most
recent date to which interest has been paid or, if no interest has been paid,
from November 20, 1998. Old Notes accepted for exchange will cease to accrue
interest from and after the date of consummation of the Exchange Offer. Holders
of Old Notes whose Old Notes are accepted for exchange will not receive any
payment in respect of accrued interest on such Old Notes otherwise payable on
any interest payment date the record date for which occurs on or after
consummation of the Exchange Offer.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of (1) certificates for such Old Notes, or a timely
Book-Entry Confirmation of such Old Notes, into the Exchange Agent's account at
the Book-Entry Transfer Facility, (2) a properly completed and duly executed
Letter of Transmittal and (3) all other required documents.
If any tendered Old Notes are not accepted for any reason set forth in the
terms and conditions of the Exchange Offer, or if Old Notes are submitted for a
greater principal amount than the holder desires to exchange, such unaccepted
or non-exchanged Old Notes will be returned without expense to the tendering
holder of such Old Notes, or, in the case of Old Notes tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility
pursuant to the book-entry procedures described below, such non-exchanged Old
Notes will be credited to an account maintained with such Book-Entry Transfer
Facility, as promptly as practicable after the expiration or termination of the
Exchange Offer.
Book-Entry Transfer
The Exchange Agent will make a request to establish an account with
respect to the Old Notes at the Book-Entry Transfer Facility for purposes of
the Exchange Offer within two business days after the date of this prospectus.
Any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of Old Notes by causing the
Book-Entry Transfer Facility to transfer such Old Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility in accordance with such
Book-Entry Transfer Facility's procedures for transfer. However, although
delivery of Old Notes may be effected through book-entry transfer at the
Book-Entry Transfer Facility, the Letter of Transmittal or a facsimile of such
Letter of Transmittal, with any required signature guarantees and any other
required documents, must, in any case, be transmitted to, and received by, the
Exchange Agent at the address set forth below under "--Exchange Agent" on or
prior to the Expiration Date or there has been compliance with the guaranteed
delivery procedures described below.
35
<PAGE>
Guaranteed Delivery Procedures
If a registered holder of the Old Notes desires to tender such Old Notes
and (1) the Old Notes are not immediately available, or time will not permit
such holder's Old Notes, or (2) other required documents to reach the Exchange
Agent before the Expiration Date, or (3) the procedure for book-entry transfer
cannot be completed on a timely basis, a tender may be effected if:
o the tender is made through an Eligible Institution;
o prior to the Expiration Date, the Exchange Agent received from such
Eligible Institution a properly completed and duly executed Letter of
Transmittal, or a facsimile of such Letter of Transmittal, and Notice of
Guaranteed Delivery, substantially in the form provided by us, by
facsimile transmission, mail or hand delivery, (a) setting forth the name
and address of the holder of Old Notes and the amount of Old Notes
tendered, (b) stating that the tender is being made thereby, and (c)
guaranteeing that within three New York Stock Exchange ("NYSE") trading
days after the Expiration Date, the certificates for all physically
tendered Old Notes, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, and any other documents required by the
Letter of Transmittal will be deposited by the Eligible Institution with
the Exchange Agent; and
o the certificates for all physically tendered Old Notes, in proper form
for transfer, or a Book-Entry Confirmation, as the case may be, and all
other documents required by the Letter of Transmittal, are received by
the Exchange Agent within three NYSE trading days after the Expiration
Date.
Withdrawal Rights
Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New
York City time, on the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent at the address or, in the case of Eligible
Institutions, at the facsimile number, set forth below under "--Exchange Agent"
prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice
of withdrawal must:
o specify the name of the person having tendered the Old Notes to be
withdrawn (the "Depositor");
o identify the Notes to be withdrawn, including the certificate number or
numbers and principal amount of such Old Notes;
o contain a statement that such holder is withdrawing his election to have
such Old Notes exchanged;
o be signed by the holder in the same manner as the original signature on
the Letter of Transmittal by which such Old Notes were tendered,
including any required signature guarantees, or be accompanied by
documents of transfer to have the Trustee with respect to the Old Notes
register the transfer of such Old Notes in the name of the person
withdrawing the tender; and
o specify the name in which such Old Notes are registered, if different
from that of the Depositor.
If Old Notes have been tendered pursuant to the procedure for book-entry
transfer described above, any notice of withdrawal must specify the name and
number of the account at the Book-Entry Transfer Facility to be credited with
the withdrawn Old Notes and otherwise comply with the procedures of such
facility. All questions as to the validity, form and eligibility, including
time of receipt, of such notices will be determined by us, whose determination
shall be final and binding on all parties. Any Old Notes so withdrawn will be
deemed not to have been validly tendered for exchange for purposes of the
Exchange Offer. No New Notes will be issued with respect to the Exchange Offer
unless the Old Notes so withdrawn are validly retendered. Any Old Notes that
have been tendered for exchange, but which are not exchanged for any reason,
will be returned to the holder of such Old Notes without cost to such holder,
or, in the case of Old Notes tendered by book-entry transfer into the Exchange
Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry
transfer procedures described above, such Old Notes will be credited to an
account maintained with the Book-Entry Transfer Facility for the Old Notes, as
soon as practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be retendered by following
36
<PAGE>
the procedures described under "--Procedures for Tendering Old Notes" above at
any time on or prior to 5:00 p.m., New York City time, on the Expiration Date.
Certain Conditions to the Exchange Offer
Notwithstanding any other provision of the Exchange Offer, we shall not be
required to accept for exchange, or to issue New Notes in exchange for, any Old
Notes and may terminate or amend the Exchange Offer, if at any time before the
acceptance of such Old Notes for exchange or the exchange of the New Notes for
such Old Notes, any of the following events shall occur:
o there shall be threatened, instituted or pending any action or proceeding
before, or any injunction, order or decree shall have been issued by, any
court or governmental agency or other governmental regulatory or
administrative agency or commission (1) seeking to restrain or prohibit
the making or consummation of the Exchange Offer or any other transaction
contemplated by the Exchange Offer, or assessing or seeking any damages
as a result of such transaction, or (2) resulting in a material delay in
our ability to accept for exchange or exchange some or all of the Old
Notes pursuant to the Exchange Offer; or any statute, rule, regulation,
order or injunction shall be sought, proposed, introduced, enacted,
promulgated or deemed applicable to the Exchange Offer or any of the
transactions contemplated by the Exchange Offer by any government or
governmental authority, domestic or foreign, or any action shall have
been taken, proposed or threatened, by any government, governmental
authority, agency or court, domestic or foreign, that in our sole
judgment might directly or indirectly result in any of the consequences
referred to in clauses (1) or (2) above or, in our sole judgment, might
result in the holders of New Notes having obligations with respect to
resales and transfers of New Notes which are greater than those described
in the interpretation of the Commission referred to above, or would
otherwise make it inadvisable to proceed with the Exchange Offer; or
o there shall have occurred:
(1) any general suspension of or general limitation on prices for, or
trading in, securities on any national securities exchange or in the
over-the-counter market;
(2) any limitation by a governmental agency or authority which may
adversely affect our ability to complete the transactions
contemplated by the Exchange Offer;
(3) a declaration of a banking moratorium or any suspension of payments
in respect of banks in the United States or any limitation by any
governmental agency or authority which adversely affects the
extension of credit; or
(4) a commencement of a war, armed hostilities or other similar
international calamity directly or indirectly involving the United
States, or, in the case of any of the foregoing existing at the
time of the commencement of the Exchange Offer, a material
acceleration or worsening of such calamities; or
o any change, or any development involving a prospective change, shall have
occurred or be threatened in our business, properties, assets,
liabilities, financial condition, operations, results of operations or
prospects and those of our subsidiaries taken as a whole that, in our
sole judgment, is or may be adverse to us, or we shall have become aware
of facts that, in our sole judgment, have or may have adverse
significance with respect to the value of the Old Notes or the New Notes;
which in our sole judgment in any case, and regardless of the
circumstances, including any action by us, giving rise to any such
condition, makes it inadvisable to proceed with the Exchange Offer and/or
with such acceptance for exchange or with such exchange.
The foregoing conditions are for our sole benefit and may be asserted by
us regardless of the circumstances giving rise to any such condition, or may be
waived by us in whole or in part at any time and from time to time in its sole
discretion. Our failure at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to
time.
In addition, we will not accept for exchange any Old Notes tendered, and
no New Notes will be issued in exchange for any such Old Notes, if at such time
any stop order shall be threatened or in effect with respect
37
<PAGE>
to the Registration Statement of which this prospectus constitutes a part or
the qualification of the Indenture under the Trust Indenture Act of 1939.
Exchange Agent
State Street Bank and Trust Company has been appointed as the Exchange
Agent for the Exchange Offer. All executed Letters of Transmittal should be
directed to the Exchange Agent at the address set forth below. Questions and
requests for assistance, requests for additional copies of this prospectus or
of the Letter of Transmittal and requests for Notices of Guaranteed Delivery
should be directed to the Exchange Agent addressed as follows:
State Street Bank and Trust Company, Exchange Agent
<TABLE>
<S> <C>
By Mail: By Overnight Courier:
State Street Bank and Trust Company State Street Bank and Trust Company
P.O. Box 778 Two International Place
Boston, Massachusetts 02102 Boston, Massachusetts 02110
Attention: Corporate Trust Department Attention: Corporate Trust Department
Kellie Mullen Kellie Mullen
By Hand: in New York (as Drop Agent) By Hand: in Boston
State Street Bank and Trust Company, N.A. State Street Bank and Trust Company
61 Broadway, 15th Floor Two International Place
Corporate Trust Window Fourth Floor, Corporate Trust
New York, New York 10006 Boston, Massachusetts 02110
</TABLE>
For Information Call:
(617) 664-5587
By Facsimile Transmission
(for Eligible Institutions only):
(617) 664-5314
Attention: Corporate Trust Department
Confirm by Telephone:
(617) 664-5314
If you deliver the Letter of Transmittal to an address other than as set
forth above or transmission of instructions via facsimile other than as set
forth above, then such delivery or transmission does not constitute a valid
delivery of such Letter of Transmittal.
Fees and Expenses
We will not make any payment to brokers, dealers, or others soliciting
acceptances of the Exchange Offer. The estimated cash expenses to be incurred
in connection with the Exchange Offer will be paid by us. We estimate these
expenses in the aggregate to be approximately $500,000.
Transfer Taxes
Holders who tender their Old Notes for exchange will not be obligated to
pay any related transfer taxes, except that holders who instruct us to register
New Notes in the name of, or request that Old Notes not tendered or not
accepted in the Exchange Offer be returned to, a person other than the
registered tendering holder will be responsible for the payment of any
applicable transfer taxes.
Consequences of Exchanging or Failing to Exchange Old Notes
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Exchange Offer will continue to be subject to the provisions in
the Indenture regarding transfer and exchange of the Old Notes and the
restrictions on transfer of such Old Notes as set forth in the legend on such
Notes as a consequence of the issuance of the Old Notes pursuant to exemptions
from, or in transactions not subject to, the registration requirements of the
Securities Act and applicable state securities laws. In general, the Old Notes
may not be
38
<PAGE>
offered or sold, unless registered under the Securities Act, except pursuant to
an exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. As discussed below in "Exchange Offer;
Registration Rights," we do not currently anticipate that we will register Old
Notes under the Securities Act.
Based on interpretations by the staff of the Commission, as set forth in
no-action letters issued to third parties, we believe that New Notes issued
pursuant to the Exchange Offer in exchange for Old Notes may be offered for
resale, resold or otherwise transferred by holders of such Old Notes, other
than any such holder which is an "affiliate" of ours within the meaning of Rule
405 under the Securities Act, without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such holders' business and such
holders have no arrangement or understanding with any person to participate in
the distribution of such New Notes. However, the Commission has not considered
the Exchange Offer in the context of a no-action letter. There can be no
assurance that the staff of the Commission would make a similar determination
with respect to the Exchange Offer as in such other circumstances. Each holder,
other than a broker-dealer, must acknowledge that it is not engaged in, and
does not intend to engage in, a distribution of New Notes and has no
arrangement or understanding to participate in a distribution of New Notes. If
any holder is an affiliate of ours, is engaged in or intends to engage in or
has any arrangement or understanding with respect to the distribution of the
New Notes to be acquired pursuant to the Exchange Offer, such holder (1) could
not rely on the applicable interpretations of the staff of the Commission and
(2) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction. Each
broker-dealer that receives New Notes for its own account in exchange for Old
Notes must acknowledge that such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities and that it
will deliver a prospectus in connection with any resale of such New Notes. In
addition, to comply with the securities laws of certain jurisdictions, if
applicable, the New Notes may not be offered or sold unless they have been
registered or qualified for sale in such jurisdiction or an exemption from
registration or qualification, with which there has been compliance, is
available. See "Plan of Distribution."
39
<PAGE>
MANAGEMENT
Executive Officers and Directors
The following table provides information concerning Fisher's executive
officers and directors. All directors will hold office until the next annual
meeting of stockholders of Fisher and until their successors have been duly
elected and qualified. All officers will serve at the discretion of the Board
of Directors.
<TABLE>
<CAPTION>
Name Age Position
<S> <C>
Paul M. Montrone 57 Chairman of the Board, Chief Executive Officer and Director
of Fisher
Paul M. Meister 46 Vice Chairman of the Board, Executive Vice President, Chief
Financial Officer and Director of Fisher
David T. Della Penta 51 President and Chief Operating Officer of Fisher
Denis N. Maiorani 50 President of Fisher Scientific Worldwide Inc.
Kevin P. Clark 36 Vice President and Controller of Fisher
Todd M. DuChene 35 Vice President, General Counsel and Secretary of Fisher
Robert J. Gagalis 44 Vice President and Treasurer of Fisher
Mitchell J. Blutt 41 Director
Robert A. Day 55 Director
Michael D. Dingman 67 Director
Anthony J. DiNovi 36 Director
David V. Harkins 57 Director
Scott M. Sperling 41 Director
Kent R. Weldon 31 Director
</TABLE>
Paul M. Montrone has been Chairman of the Board of Fisher since March 1998
and a member of the Board of Directors since 1991. Mr. Montrone has been Chief
Executive Officer of Fisher since 1991 and was President from 1991 to 1998.
Prior to that time, he was President of The General Chemical Group Inc. (a
manufacturer of inorganic chemicals) ("General Chemical") from prior to 1992 to
1994 and has been Chairman of the Board of General Chemical since 1994. Mr.
Montrone served as Vice Chairman of the Board of Directors of Abex Inc.
("Abex") (aerospace products and services), from 1992 to 1995. Mr. Montrone is
a member of the Board of Directors of USA Waste Management, Inc.
Paul M. Meister has been Vice Chairman of the Board and Executive Vice
President of Fisher since March 1998 and Chief Financial Officer since 1991.
Mr. Meister was Senior Vice President of Fisher from 1991 to 1998. Prior to
that time, he was Senior Vice President of Abex from 1992 to 1995. Mr. Meister
is a member of the Board of Directors of M&F Worldwide Corp., General Chemical
(Vice Chairman) and Minerals Technologies, Inc.
40
<PAGE>
David T. Della Penta has been President and Chief Operating Officer of
Fisher since April 1998. From prior to 1992 until April 1998, Mr. Della Penta
served as President of the Nalge Nunc International subsidiary of Sybron
International Corporation (medical laboratory device manufacturer).
Denis N. Maiorani has been President of Fisher Scientific Worldwide Inc.,
a subsidiary of Fisher, since 1996. Mr. Maiorani was President of Fisher
Scientific Europe Limited from January 1996 to July 1996, and a consultant to
Fisher from 1995 to 1996. From prior to 1992 to January 1995, Mr. Maiorani was
President of Robertson-Ceco Corporation (building components manufacturing).
Kevin P. Clark has been Vice President and Controller of Fisher since
April 1998. Prior to that time, Mr. Clark served as Vice President and
Treasurer of Fisher from September 1997 to June 1998, and served as Assistant
Treasurer of Fisher from 1995 to 1997. Mr. Clark served as Treasurer of
Federal-Mogul Corporation (automotive components) from 1994 to 1995, and held
various financial executive positions at Chrysler Corporation from prior to
1992 to 1993, the most current being Manager of Corporate Finance of Chrysler
Financial Corp. (financial services).
Todd M. DuChene has been Vice President, General Counsel and Secretary of
Fisher since November 1996. Mr. DuChene served as Senior Vice President,
Secretary and General Counsel of OfficeMax, Inc. (retailer) from March 1995 to
November 1996 and Vice President, General Counsel and Assistant Secretary from
January 1994 to March 1995. He was an Associate with Baker & Hostetler (law
firm) from prior to 1992 to January 1994.
Robert J. Gagalis has been Vice President and Treasurer of Fisher since
May 1998. From 1997 to May 1998, he was Vice President, Chief Financial Officer
and Treasurer of Wheelabrator Technologies Inc. ("WTI") (environmental
services), and Vice President, Corporate Development of WTI from 1993 to 1996.
Mitchell J. Blutt, M.D. has been a director of Fisher since January 1998.
Dr. Blutt has been an Executive Partner of Chase Capital Partners since prior
to 1994, has been an Adjunct Assistant Professor of Medicine at the New York
Hospital/Cornell Medical Center since prior to 1994 and is a Board Certified
Internist. Dr. Blutt also serves as a director of Hanger Orthopedic Group and
Landec Corp.
Robert A. Day has been a director of Fisher since 1991. Mr. Day has been
Chairman of the Board and Chief Executive Officer of Trust Company of the West
(investments) since prior to 1993 and Chairman and President of W. M. Keck
Foundation since 1996. Mr. Day is also a director of Freeport-McMoran Inc.
Michael D. Dingman has been a director of Fisher since 1991. Mr. Dingman
was Chairman of the Board of Fisher from prior to 1994 until January 1998. He
has been President of Shipston Group Ltd. (international investments) since
1994. Mr. Dingman was Chairman of the Board and Chief Executive Officer of Abex
from prior to 1993 until June 1995. From prior to 1993 until August 1994, he
was Chairman of the Board and Chief Executive Officer of General Chemical. Mr.
Dingman is also a director of Ford Motor Company and Teekay Shipping Ltd.
Anthony J. DiNovi has been a director of Fisher since January 1998. Mr.
DiNovi has been employed by THL Co., a private equity investment firm, since
1988 and currently serves as a Managing Director. Mr. DiNovi is also Vice
President and Trustee of THL Equity Trust III, the general partner of the THL
Equity Advisors III Limited Partnership, which is the general partner of the
Thomas H. Lee Equity Fund III, L.P. and Vice President of Thomas H. Lee
Advisors I and T.H. Lee Mezzanine II, affiliates of ML-Lee Acquisition Fund,
L.P., ML-Lee Acquisition Fund II, L.P. and ML-Lee Acquisition Fund II
(Retirement Accounts), L.P., respectively. Mr. DiNovi also serves as a director
of Eye Care Centers of America, Inc., Safelite Glass Corp., The Learning
Company, Inc. and several private corporations.
David V. Harkins has been a director of Fisher since January 1998. Mr.
Harkins has been employed by THL Co. since 1986 and currently serves as a
Senior Managing Director. Mr. Harkins is also the President and Trustee of THL
Equity Trust III, the General Partner of THL Equity Advisers III Limited
Partnership, which is the General Partner of Thomas H. Lee Equity Fund III,
L.P. and Chairman of National Dentex Corporation since 1983. Mr. Harkins is a
director of Stanley Furniture Company, Inc., Syratech Corporation, Freedom
Securities Corp., Cott Corporation and several private corporations.
Scott M. Sperling has been a director of Fisher since January 1998. Since
July 1994, Mr. Sperling has served as a Managing Director of THL Co. Mr.
Sperling is also Vice President and Trustee of THL Equity
41
<PAGE>
Trust III, the general partner of Equity Advisors III Limited Partnership,
which is the general partner of Thomas H. Lee Equity Fund III L.P. Mr. Sperling
also serves as a director of The Learning Company, Livent, Inc., General
Chemical, Safelite Glass Corp. and several private corporations.
Kent R. Weldon has been a director of Fisher since January 1998. Mr.
Weldon worked at THL Co. from 1991 to 1993 and rejoined in 1995 and currently
serves as a Vice President of THL Co. From 1989 to 1991, Mr. Weldon worked in
the Mergers & Acquisitions Department of Morgan Stanley & Co., Incorporated.
From 1993 to 1995, Mr. Weldon attended the Harvard Graduate School of Business
Administration. Mr. Weldon is a Vice President of THL Equity Trust III, the
General Partner of THL Equity Advisers III Limited Partnership, which is the
General Partner of Thomas H. Lee Equity Fund III, L.P. Mr. Weldon also serves
as a director of Syratech Corporation and other private corporations.
42
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 25, 1999 certain information
concerning each person believed to be a beneficial owner of more than 5% of
common stock and beneficial ownership of common stock by each nominee,
director, named executive officer and all directors and executive officers as a
group.
<TABLE>
<CAPTION>
Shares of Percent of
Name of Beneficial Owner Common Stock Class (1)
- ----------------------------------------------------------- ------------------------ -----------
<S> <C> <C>
Thomas H. Lee Equity Fund III, L.P. .................... 21,749,345(2)(3)(4) 57.7%
DLJ Merchant Banking Partners II, L.P., et al. ......... 6,551,005(3)(5)(6) 17.9%
Chase Equity Associates, L.P. .......................... 4,367,335(7) 10.8%
Paul M. Montrone ....................................... 2,551,760(3)(8) 6.6%
Paul M. Meister ........................................ 1,453,807(3)(9) 3.9%
David V. Harkins ....................................... 108,210(3)(10) *
Denis N. Maiorani ...................................... 76,085(2)(3)(11) *
Scott M. Sperling ...................................... 54,105(3)(12) *
Anthony J. DiNovi ...................................... 54,105(3)(13) *
David T. Della Penta ................................... 50,000(14) *
Todd M. DuChene ........................................ 48,320(3)(15) *
Kent R. Weldon ......................................... 8,115(3)(16) *
Mitchell J. Blutt ...................................... 0(7) *
Michael D. Dingman ..................................... 0 *
Robert A. Day .......................................... 0 *
All directors and executive officers as a
group (14 individuals) ................................ 4,490,823(3)(17) 11.1%
</TABLE>
- ----------------
* less than 1%.
(1) Calculated after giving effect to the exercise of warrants to purchase
common stock described below.
(2) The address of Thomas H. Lee Equity Fund III, L.P. is c/o Thomas H Lee
Company, 75 State Street, Boston, Massachusetts. The information is based
on a Schedule 13D dated January 21, 1998 filed with the Commission by the
THL Entities, Thomas H. Lee Equity Advisors III Limited Partnership
("Advisors III"), THL Equity Trust III ("Trust III") and THL Investment
Management Corp. ("THL Investment"). Each of the THL Entities, Advisors
III, Trust III and THL Investment expressly disclaims beneficial ownership
of shares of common stock held by others.
(3) By virtue of the Investors' Agreement, the THL Entities, the ML Entities,
and DLJ Entities and the Management Investors may constitute a "group"
under the Securities Exchange Act of 1934, as amended. Each of the parties
to the Investors' Agreement expressly disclaims beneficial ownership of
shares of common stock held by others.
(4) Includes 12,047,625 outstanding shares and 991,340 shares issuable upon
the exercise of warrants to purchase shares owned by Equity Fund III;
6,052,935 outstanding shares and 498,070 shares issuable upon the exercise
of warrants to purchase shares owned by THL FSI; 745,470 outstanding
shares and 61,340 shares issuable upon the exercise of warrants owned by
Foreign Fund III; 741,960 outstanding shares and 61,045 shares issuable
upon the exercise of warrants to purchase shares owned by THL-CCI; 99,980
outstanding shares and 8,230 shares issuable upon exercise of warrants to
purchase shares owned by Mr. Harkins or a trust as to which Mr. Harkins'
wife is a trustee (see footnote 10); 49,990 outstanding shares and 4,115
shares issuable upon exercise of warrants to purchase shares owned by Mr.
Sperling or a limited partnership of which Mr. Sperling is a general
partner (see footnote 12); 49,990 outstanding shares and 4,115 shares
issuable upon exercise of warrants to purchase shares owned by Mr. DiNovi;
7,500 outstanding and 615 shares issuable upon exercise of warrants to
purchase shares owned by Mr. Weldon; and 300,310 outstanding shares and
24,715 shares issuable upon exercise of warrants to purchase shares
attributable to the Additional THL Persons.
(5) The address of DLJ Merchant Banking Partners II, L.P. is 277 Park Avenue,
New York, New York 10172. The information is based on a Schedule 13D dated
January 21, 1998 filed with the SEC by the
43
<PAGE>
DLJ Entities and DLJ Merchant Banking II, LLC, DLJ Merchant Banking II,
Inc., DLJ Diversified Associates, L.P., DLJ Diversified Partners, Inc.,
DLJ LBO Plans Management Corporation, DLJ Capital Investors, Inc., UK
Investment Plan 1997, Inc., Donaldson, Lufkin & Jenrette, Inc., The
Equitable Companies Incorporated, AXA-UAP, Finaxa, AXA Assurances I.A.R.D.
Mutuelle, AXA Assurances Vie Mutuelle, AXA Courtage Assurance Mutuelle,
Alpha Assurances Vie Mutuelle, and Claude Bebear, Patrice Garnier and
Henri de Clermont-Tonnerre, trustees pursuant to a Voting Trust dated as
of May 12, 1992, as amended (collectively, the "Additional DLJ Persons").
Each of the DLJ Entities and the Additional DLJ Persons expressly
disclaims beneficial ownership of shares held by others.
(6) Includes 3,812,895 outstanding shares and 313,745 shares issuable upon the
exercise of warrants to purchase shares owned by DLJ Partners II; 676,965
outstanding shares and 55,700 shares issuable upon the exercise of
warrants to purchase shares owned by DLJ Funding II; 719,015 outstanding
shares and 59,165 shares issuable upon the exercise of warrants to
purchase shares owned by DLJ ESC II; and 844,060 outstanding shares and
69,460 shares issuable upon the exercise of warrants to purchase shares
owned by the remaining DLJ Entities.
(7) The address of Chase Equity Associates, L.P. is 270 Park Avenue, New York,
New York 10172. CEA is the owner of 4,035,290 outstanding shares of
non-voting common stock of Fisher and warrants to purchase 332,045 shares
of non-voting common stock of Fisher, which stock is convertible on a one-
on-one basis into shares of Common Stock, as provided by the Company's
Amended and Restated Certificate of Incorporation, as amended. Mitchell J.
Blutt, M.D. serves as a director of the Company and is a general partner
of Chase Capital Partners, the sole general partner of CEA. Dr. Blutt
expressly disclaims beneficial ownership of shares held by CEA.
(8) Includes 707,875 shares issuable upon exercise of options, 275,000
outstanding shares owned directly by Mr. Montrone, 362,500 shares which
are held in the Fisher Scientific International Inc. Executive Retirement
and Savings Program Trust (the "Savings Trust") and 1,206,385 shares which
are held in a rabbi trust established under agreement dated January 21,
1998 (the "Rabbi Trust").
(9) Includes 270,767 shares issuable upon exercise of options, 175,000
outstanding shares owned directly by Mr. Meister, 271,500 shares which are
held in the Savings Trust and 736,540 shares which are held in the Rabbi
Trust.
(10) Includes 89,980 outstanding shares and warrants to purchase 7,405 shares
owned by Mr. Harkins directly, and 10,000 shares and warrants to purchase
825 shares owned by the 1995 Harkins Gift Trust as to which shares and
warrants Mr. Harkins expressly disclaims any beneficial interest.
(11) Includes 15,294 shares issuable upon exercise of options and 60,790
outstanding shares held in the Rabbi Trust for Mr. Maiorani.
(12) Includes 29,995 outstanding shares and warrants to purchase 2,470 shares
owned by Mr. Sperling directly, and 19,995 shares and warrants to purchase
1,645 shares owned by the Sperling Family Limited Partnership as to which
shares and warrants Mr. Sperling expressly disclaims beneficial interest.
(13) Includes 49,990 outstanding shares and warrants to purchase 4,115 shares
owned by Mr. DiNovi directly.
(14) Shares owned directly by Mr. Della Penta and subject to the Investors'
Agreement.
(15) Includes 12,320 shares issuable upon exercise of options, and 36,000
shares held in the Rabbi Trust for Mr. DuChene.
(16) Includes 7,500 outstanding shares and warrants to purchase 615 shares
owned by Mr. Weldon directly.
(17) Includes 1,071,256 shares issuable upon exercise of options, 677,465
outstanding shares held directly, 663,995 shares held indirectly, warrants
to purchase 17,075 and 2,039,715 shares deferred into the Rabbi Trust.
44
<PAGE>
DESCRIPTION OF OTHER INDEBTEDNESS
The New Credit Facility. The New Credit Facility consists of (1) the Term
Facility consisting of (a) a $125 million tranche A term loan ("Tranche A"),
(b) a $100 million tranche B term loan ("Tranche B") and (c) a $69.2 million
tranche C term loan ("Tranche C"); and (2) the $175.0 million Revolving Credit
Facility. Fisher has borrowed a portion of Tranche A in U.S. dollars. A
subsidiary of Fisher that is incorporated and domiciled in the United Kingdom
has borrowed another portion of Tranche A in pounds sterling. The remaining
portion of Tranche A has been borrowed in Canadian dollars by a subsidiary of
Fisher that is incorporated and domiciled in Canada. The Chase Manhattan Bank
is the administrative agent for the syndicate of lenders providing the New
Credit Facility, Merrill Lynch Capital Corporation is the syndication agent for
the New Credit Facility and DLJ Capital Funding, Inc. is the documentation
agent. The Revolving Credit Facility includes a sub-limit for the issuance of
letters of credit. The New Credit Facility permits foreign subsidiaries of
Fisher to borrow negotiated loans denominated in their local currencies from
individual lenders thereunder, which bear interest at negotiated rates. Such
negotiated loans will reduce the availability of the Revolving Credit Facility.
Borrowings made under the Revolving Credit Facility bear interest at a
rate equal to, at Fisher's option, LIBOR plus 225 basis points, or the Prime
Rate plus 125 basis points. The "Prime Rate" is a fluctuating interest rate
equal to the higher of (1) the rate of interest announced publicly by a
reference bank as its prime rate and (2) a rate equal to 1/2 of 1% per annum
above the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers.
Dollar borrowings under Tranche A of the Term Facility bear interest at a
rate equal to, at Fisher's option, LIBOR plus 225 basis points or the Prime
Rate plus 125 basis points. Pound sterling borrowings under Tranche A bear
interest at LIBOR for sterling deposits plus 225 basis points. Canadian dollar
borrowings under Tranche A bear interest at the borrower's option at the
Canadian prime rate plus 125 basis points or at a B/A rate determined in
accordance with the provisions of the New Credit Facility. Tranche B of the
Term Facility bears interest at a rate equal to, at Fisher's option, LIBOR plus
250 basis points or the Prime Rate plus 150 basis points. Tranche C of the Term
Facility bears interest at a rate equal to, at Fisher's option, LIBOR plus 275
basis points or the Prime Rate plus 175 basis points.
The LIBOR and Prime Rate margins are subject to reductions, based on
various tests of our financial performance. Prime Rate interest is payable
quarterly in arrears. LIBOR interest is payable in arrears at the earlier of
(1) the end of the applicable interest period and (2) quarterly LIBOR
borrowings are available in 1-, 2-, 3- or 6-month interest periods.
The Revolving Credit Facility expires on January 21, 2004. The Tranche A,
B and C facilities will amortize semi-annually and mature 6, 7 and 7.75 years,
respectively, after January 21, 1998, the closing date of the New Credit
Facility.
The obligations of Fisher and the subsidiary borrowers under the New
Credit Facility are secured by substantially all of our assets and those of our
material domestic subsidiaries, a pledge of the stock of all domestic
subsidiaries, and a pledge of 65% of the stock of material foreign subsidiaries
which are direct subsidiaries of Fisher or one of its material domestic
subsidiaries. Obligations of each foreign subsidiary borrower are secured by a
pledge of 100% of the shares and assets of such borrower. Fisher and each of
its material domestic subsidiaries further guarantee the obligations of Fisher
and the subsidiary borrowers.
The New Credit Facility agreement contains our customary covenants,
including, without limitation, restrictions on:
o indebtedness;
o the sale of assets;
o mergers, acquisitions and other business combinations;
o voluntary prepayment of certain debt of ours;
o transactions with affiliates;
o capital expenditures; and
45
<PAGE>
o loans and investments.
It also contains prohibitions on the payment of cash dividends to, or the
repurchase of redemption of stock from, shareholders, and various financial
covenants.
Pursuant to the terms of the New Credit Facility, and subject to
applicable grace periods, in certain circumstances, Fisher will be in default
upon the non-payment of principal or interest when due under such agreement or,
upon the non-fulfillment of the covenants described above, certain changes in
control of the ownership of Fisher or various other defaults described in the
New Credit Facility. If such a default occurs, the lenders under the New Credit
Facility will be entitled to take all actions permitted to be taken by a
secured creditor under the Uniform Commercial Code and to accelerate the
amounts due under the New Credit Facility and may require all such amounts to
be immediately paid in full. Loans under the Term Facility are required to be
prepaid with 50% of excess cash flow, as defined in the New Credit Facility and
subject to certain limits as specified in the New Credit Facility, and certain
equity issuances of Fisher, and 100% of net-cash proceeds of certain asset
sales, certain insurance and condemnation proceeds and certain debt issuances
of Fisher. We obtained the consent of the lenders under the New Credit Facility
to consummate the Offering.
7 1/8% Notes due 2005. Interest on the 7 1/8% Notes is payable semiannually
on June 15 and December 15. The 7 1/8% Notes mature on December 15, 2005. The
7 1/8% Notes are not entitled to any sinking fund and are redeemable, in whole
or in part, at the option of the Fisher at any time, at a redemption price
equal to the greater of (1) 100% of the principal amount of such notes and (2)
the sum of the present values as of the date of redemption of all remaining
scheduled payments of principal and interest on such notes due on or after the
date of redemption, discounted on a semiannual basis at the relevant Treasury
rate plus 25 basis points. The 7 1/8% Notes constitute Senior Indebtedness under
the Indenture. Upon consummation of the Recapitalization, the 7 1/8% Notes were
equally and ratably secured with certain other Senior Indebtedness with respect
to certain collateral.
Existing 9% Senior Subordinated Notes due 2008. As of the date of this
prospectus, we have outstanding $400,000,000 principal amount of Existing
Notes. The Existing Notes mature on February 1, 2008. Cash interest on the
Existing Notes is payable semiannually in arrears on February 1 and August 1 of
each year. The Existing Notes are our unsecured senior subordinated
obligations, subordinated in right of payment to all existing and future senior
indebtedness and rank equally in right of payment with all of our other
existing and future senior subordinated indebtedness, including the Notes.
The Existing Notes are redeemable at our option at any time after February
1, 2003 at an initial redemption price of 104.5%, declining ratably to par on
or after February 1, 2006. In addition, on or prior to February 1, 2001, we may
redeem up to 40% of the original principal amount of the Existing Notes at a
redemption price of 109% of the principal amount of the Existing Notes, plus
accrued and unpaid interest, if any, to the date of redemption with the net
cash proceeds of one or more public equity offerings; provided, that at least
60% of the aggregate principal amount of the Existing Notes originally issued
remains outstanding immediately after the occurrence of such redemption. Upon a
Change of Control Triggering Event, as defined in the Existing Notes Indenture,
we will be required to make an offer to purchase all outstanding Existing Notes
at 101% of the principal amount of the Existing Notes, together with accrued
and unpaid interest, if any, to the date of purchase.
The Existing Notes Indenture contains covenants that are essentially
identical to those contained in the Indenture governing the Notes offered by
this prospectus and that restrict, among other things, our ability to:
o incur additional indebtedness;
o pay dividends or make certain other restricted payments;
o merge or consolidate with any other person; and
o make minority investments.
The Existing Indenture also contains other various covenants that are
customary for transactions of this type. The Existing Notes Indenture also
provides for customary events of default which are identical to those relating
to the Notes.
This description is intended as a summary and is qualified in its entirety
by reference to the Existing Notes Indenture, a copy of which is available from
us upon request.
46
<PAGE>
Receivables Securitization Facility. In connection with the
Recapitalization, Fisher entered into a five year Receivables Securitization
Facility pursuant to which a subsidiary of Fisher sold approximately $220
million of accounts receivable to a newly formed wholly-owned bankruptcy remote
special purpose subsidiary which in turn initially transferred $150 million of
the receivables to PARCO, a special purpose corporation formed by The Chase
Manhattan Bank solely for the purpose of issuing commercial paper rated A-1/P-1
or higher. The Receivables Securitization Facility was increased to $170
million in March 1998. The Chase Manhattan Bank acts as funding agent and with
other commercial banks acceptable to PARCO provides liquidity funding to PARCO
for the purchase of the receivables from our receivables subsidiary. The
proceeds from the Receivables Securitization Facility were used to finance a
portion of the conversion into cash of shares of Fisher common stock and
related fees and expenses associated with the Recapitalization. The Receivables
Securitization Facility carries an effective interest rate of LIBOR plus 50
basis points. As of September 30, 1998, Fisher had sold $168.2 million of
accounts receivable to PARCO.
Loan Agreement. On November 20, 1998, our subsidiary Fisher Scientific
Company, L.L.C. entered into a Loan Agreement with LaSalle National Bank, as
lender, pursuant to which we borrowed $8.8 million. We will use the amounts
borrowed under the Loan Agreement to finance part of the consolidation of our
Midwestern distribution centers into a facility located in Hanover Park,
Illinois. The Loan Agreement provides for an interest rate of 2.25% plus (1)
until November 20, 2000, the rate for U.S. Treasury Bonds maturing over a two
year period and (2) the rate for U.S. Treasury Bonds maturing over a
three year period thereafter. However, if we do not comply with the
requirements of the State Treasurer's Economic Program, the amounts borrowed
will carry an interest rate equal to the corporate base or prime lending rate of
LaSalle National Bank.
47
<PAGE>
DESCRIPTION OF THE NOTES
The New Notes will be issued under an indenture (the "Indenture"), dated
as of November 20, 1998, by and among our company and State Street Bank and
Trust Company, as Trustee (the "Trustee"). References to the Notes include the
New Notes unless the context otherwise requires. Upon the issuance of the New
Notes, if any, or the effectiveness of a Shelf Registration Statement, the
Indenture will be subject to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The following summary of the material provisions of the
Indenture (a copy of which may be obtained upon request from us or the Initial
Purchasers and which is filed as an exhibit to the Registration Statement to
which this prospectus forms a part) does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the Trust
Indenture Act, and to all of the provisions of the Indenture, including the
definitions of certain terms therein and those terms made a part of the
Indenture by reference to the Trust Indenture Act, as in effect on the date of
the Indenture. The definitions of certain capitalized terms used in the
following summary are set forth below under "Certain Definitions." For purposes
of this section, references to "we," "us" and "our" include only Fisher
Scientific International Inc. and not its subsidiaries.
The New Notes will be our unsecured obligations, ranking subordinate in
right of payment to all our Senior Indebtedness to the extent set forth in the
Indenture.
The Trustee will authenticate and deliver New Notes for original issue
only in exchange for a like principal amount of Old Notes.
The New Notes will be issued in fully registered form only, without
coupons, in denominations of $1,000 and integral multiples of $1,000.
Initially, the Trustee will act as Paying Agent and Registrar for the New
Notes. The New Notes may be presented for registration of transfer and exchange
at the offices of the Registrar, which initially will be the Trustee's
corporate trust office. We may change any Paying Agent and Registrar without
notice to holders of the New Notes (the "holders"). We will pay principal (and
premium, if any) on the New Notes at the Trustee's corporate office in New
York, New York. At our option, interest may be paid at the Trustee's corporate
trust office or by check mailed to the registered address of holders.
No service charge will be made for any transfer, exchange or redemption of
New Notes, except in certain circumstances for any fax or other governmental
charge that may be imposed in connection therewith.
For each Old Note accepted for exchange, the holder of such Old Note will
receive a New Note having a principal amount equal to that of the surrendered
Notes.
Any Notes that remain outstanding after the completion of the Exchange
Offer, together with the Exchange Notes issued in connection with the Exchange
Offer, will be treated as a single class of securities under the Indenture.
Principal, Maturity and Interest
The New Notes are limited in aggregate principal amount to $200 million
and will mature on February 1, 2008. Interest on the New Notes will accrue at
the rate of 9% per annum and will be payable semiannually in cash on each
February 1 and August 1, commencing on February 1, 1999, to the Persons who are
registered holders at the close of business on the January 15 and July 15
immediately preceding the applicable interest payment date. Interest on the New
Notes will accrue from the most recent date to which interest has been paid or,
if no interest has been paid, from November 20, 1998. Old Notes accepted for
exchange will cease to accrue interest from and after the date of consummation
of the Exchange Offer. Holders of the Old Notes whose Old Notes are accepted
for exchange will not receive any payment in respect of interest on such Old
Notes otherwise payable on any interest payment date and record date which
occurs on or after the consummation of the Exchange Offer. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The Notes will not be entitled to the benefit of any mandatory sinking
fund.
48
<PAGE>
Redemption
Optional Redemption. The Notes will be redeemable, at our option, in whole
at any time or in part from time to time, on and after February 1, 2003, upon
not less than 30 nor more than 60 days' notice, at the following redemption
prices (expressed as percentages of the principal amount thereof) if redeemed
during the twelve-month period commencing on February 1 of the year set forth
below, plus, in each case, accrued interest to the date of redemption:
<TABLE>
<CAPTION>
Redemption
Year Price
- ---- -----------
<S> <C>
2003 ......................... 104.50%
2004 ......................... 103.00%
2005 ......................... 101.50%
2006 and thereafter .......... 100.00%
</TABLE>
Optional Redemption upon Equity Offerings. At any time, or from time to
time, on or prior to February 1, 2001, we may, at our option, use the net cash
proceeds of one or more Equity Offerings (as defined below) to redeem up to 40%
of the aggregate principal amount of Notes originally issued at a redemption
price equal to 109% of the principal amount thereof plus accrued interest to
the date of redemption; provided that at least 60% of the original principal
amount of Notes remains outstanding immediately after any such redemption
(excluding any Notes owned by us). In order to effect the foregoing redemption
with the proceeds of any Equity Offering, we must mail a notice of redemption
no later than 60 days after the related Equity Offering and must consummate
such redemption within 90 days of the closing of the Equity Offering. "Equity
Offering" means a sale of our Qualified Capital Stock.
Optional Redemption upon Change of Control. At any time on or prior to
February 1, 2003, upon the occurrence of a Change of Control, we may, at its
option, redeem all but not less than all of the Notes, at a redemption price
equal to the sum of:
o 100% of the outstanding principal amount thereof; plus
o the Applicable Premium; plus
o accrued and unpaid interest and Liquidated Damages, if any, to the date
of redemption.
Notice of redemption of the Notes pursuant to this paragraph shall be
mailed to holders of the Notes not more than 60 days and not less than 30 days
following the occurrence of a Change of Control.
Selection and Notice
In case of a partial redemption, selection of the Notes or portions
thereof for redemption shall be made by the Trustee by lot, ratably or in such
manner as it shall deem appropriate and fair and in such manner as complies
with any applicable legal requirements; provided, however, that if a partial
redemption is made with the proceeds of an Equity Offering, selection of the
Notes or portion thereof for redemption shall be made by the Trustee only on a
ratable basis, unless such method is otherwise prohibited. Notes may be
redeemed in part in multiples of $1,000 principal amount only. Notice of
redemption will be sent, by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to each holder
whose Notes are to be redeemed at the last address for such holder then shown
on the registry books. If any Note is to be redeemed in part only, the notice
of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed. A new Note in principal amount equal
to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Note. On and after any redemption
date, interest will cease to accrue on the Notes or part thereof called for
redemption as long as we have deposited with the Paying Agent funds in
satisfaction of the redemption price pursuant to the Indenture.
Ranking of Notes
The indebtedness evidenced by the Notes will be our unsecured Senior
Subordinated Indebtedness, will be subordinated in right of payment, as set
forth in the Indenture, to all our existing and future Senior Indebtedness,
will rank equal in right of payment with all our existing and future Senior
Subordinated Indebtedness, including the Existing Notes, and will be senior in
right of payment to all our existing and
49
<PAGE>
future Subordinated Obligations. The Notes will also be effectively
subordinated to any of our Secured Indebtedness to the extent of the value of
the assets securing such Indebtedness, and to all existing and future
obligations and liabilities of our Subsidiaries. See "Risk
Factors--Subordination of Notes; Asset Encumbrances." However, payment from the
money or the proceeds of U.S. government obligations held in any defeasance
trust described under "--Legal Defeasance and Covenant Defeasance" below is not
subordinated to any Senior Indebtedness or subject to the restrictions
described above if the deposit to such trust which is used to fund such payment
was permitted at the time of such deposit.
As of September 30 , 1998, on a pro forma basis, after giving effect to
the Offering and the application of the net proceeds therefrom, we would have
had approximately $440.6 million of Senior Indebtedness outstanding (excluding
unused commitments), all of which would have been Secured Indebtedness.
Although the Indenture contains limitations on the amount of additional
Indebtedness which we and our Restricted Subsidiaries may incur, under certain
circumstances the amount of such Indebtedness could be substantial and, in any
case, such Indebtedness may be Senior Indebtedness or Secured Indebtedness. See
"--Certain Covenants--Limitation on Incurrence of Additional Indebtedness"
below.
Only our Indebtedness that is Senior Indebtedness will rank senior in
right of payment to the Notes in accordance with the provisions of the
Indenture. We have agreed in the Indenture that we will not incur, directly or
indirectly, any Indebtedness which is expressly subordinate in right of payment
to Senior Indebtedness unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to Senior
Subordinated Indebtedness. Without limiting the foregoing, unsecured
Indebtedness is not deemed to be subordinate or junior to Secured Indebtedness
merely because it is unsecured.
We may not pay principal of, premium (if any) or interest on, or any other
amount in respect of, the Notes or make any deposit pursuant to the provisions
described under "--Legal Defeasance and Covenant Defeasance" below and may not
otherwise purchase, redeem or otherwise retire any Notes (collectively, "pay
the Notes") if any amount due in respect of any Senior Indebtedness (including,
without limitation, any amount due as a result of acceleration of the maturity
thereof by reason of default or otherwise) has not been paid in full in cash or
Cash Equivalents unless the default has been cured or waived and any such
acceleration has been rescinded or such Senior Indebtedness has been paid in
full in cash or Cash Equivalents. However, we may pay the Notes without regard
to the foregoing if we and the Trustee receive written notice approving such
payment from the Representative of the holders of the Designated Senior
Indebtedness with respect to which the events set forth in the immediately
preceding sentence have occurred and are continuing.
In addition, during the continuance of any default (other than a payment
default described in the first sentence of the immediately preceding paragraph)
with respect to any Designated Senior Indebtedness pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
such notice as may be required to effect such acceleration) or the expiration
of any applicable grace periods, we may not pay the Notes for a period (a
"Payment Blockage Period") commencing upon the receipt by the Trustee (with a
copy to us) of written notice (a "Blockage Notice") of such default from the
Representative of the holders of such Designated Senior Indebtedness specifying
an election to effect a Payment Blockage Period and ending 179 days thereafter
(or earlier if such Payment Blockage Period is terminated:
o by written notice to the Trustee and us from the Person or Persons who
gave such Blockage Notice;
o because the default giving rise to such Blockage Notice and all other
defaults with respect to such Designated Senior Indebtedness shall have
been cured or shall have ceased to exist; or
o because such Designated Senior Indebtedness has been repaid in full in
cash or Cash Equivalents).
Notwithstanding the provisions described in the immediately preceding
paragraph, unless any payment default described in the first sentence of the
second immediately preceding paragraph has occurred and is then continuing, we
may resume payments on the Notes after the end of such Payment Blockage Period,
including any missed payments. Not more than one Blockage Notice may be given
in any consecutive 360-day period, irrespective of the number of defaults with
respect to Designated Senior Indebtedness during such period. However, if any
Blockage Notice within such 360-day period is given by or on behalf of any
holders of Designated Senior Indebtedness other than the Bank Indebtedness, a
Representative of holders of Bank Indebtedness may give another Blockage Notice
within such period. In no event, however, may the total
50
<PAGE>
number of days during which any Payment Blockage Period or Periods is in effect
exceed 179 days in the aggregate during any 360 consecutive day period.
Upon any payment or distribution of our assets or securities to creditors
upon a total or partial liquidation or dissolution or reorganization or winding
up of or similar proceeding relating to us or our property or in a bankruptcy,
insolvency, receivership or similar proceeding relating to us or our property,
or in an assignment for the benefit of creditors or any marshalling of our
assets and liabilities, whether voluntary or involuntary, the holders of Senior
Indebtedness will be entitled to receive payment in full in cash or Cash
Equivalents of the Senior Indebtedness before the holders of the Notes are
entitled to receive any payment or distribution of any character and, until the
Senior Indebtedness is paid in full in cash or Cash Equivalents, any payment or
distribution to which holders of the Notes would be entitled but for the
subordination provisions of the Indenture will be made to holders of the Senior
Indebtedness as their interests may appear. If a payment or distribution is
made to holders of the Notes that due to the subordination provisions should
not have been made to them, such holders of the Notes are required to hold it
in trust for the holders of Senior Indebtedness and pay it over to them as
their interests may appear.
If we fail to make any payment on the Notes when due or within any
applicable grace period, whether or not on account of the payment blockage
provisions referred to above, such failure would constitute an Event of Default
under the Indenture and would enable the holders of the Notes to accelerate the
maturity thereof. See "--Events of Default" below.
If payment of the Notes is accelerated because of an Event of Default, we
or the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness or the Representative of such holders of the acceleration. We may
not pay the Notes until the earlier of five business days after such holders or
the Representative of the holders of Designated Senior Indebtedness receive
notice of such acceleration or the date of acceleration of such Designated
Senior Debt and, thereafter, may pay the Notes only if the subordination
provisions of the Indenture otherwise permit payment at that time.
By reason of such subordination provisions contained in the Indenture, in
the event of insolvency, our creditors who are holders of Senior Indebtedness
may recover more, ratably, than the holders of the Notes, and our creditors who
are not holders of Senior Indebtedness or of Senior Subordinated Indebtedness
(including the Notes) may recover less, ratably, than holders of Senior
Indebtedness and may recover more than the holders of Senior Subordinated
Indebtedness.
Change of Control
The Indenture will provide that upon the occurrence of a Change of Control
Triggering Event, each holder will have the right to require that we purchase
for cash all or a portion of such holder's Notes pursuant to the offer
described below (the "Change of Control Offer"), at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued interest to the date
of purchase.
The Indenture will provide that, prior to the mailing of the notice
referred to below, but in any event within 30 days following the date we obtain
actual knowledge of any Change of Control Triggering Event, we covenant to (1)
repay in full and terminate all commitments under the Bank Indebtedness or
offer to repay in full and terminate all commitments under all Bank
Indebtedness and to repay the Bank Indebtedness owed to each holder of Bank
Indebtedness which has accepted such offer or (2) obtain the requisite consents
under the New Credit Facility to permit the repurchase of the Notes as provided
below. We shall first comply with the covenant in the immediately preceding
sentence before we shall be required to repurchase Notes pursuant to the
provisions described below. Our failure to comply with this covenant shall
constitute an Event of Default described in clause (4) and not in clause (2)
under "--Events of Default" below.
Within 30 days following the date upon which we obtain actual knowledge
that a Change of Control Triggering Event has occurred, we must send, by first
class mail, a notice to each holder, with a copy to the Trustee, which notice
shall govern the terms of the Change of Control Offer. Such notice shall state,
among other things, the purchase date, which must be no earlier than 30 days
nor later than 45 days from the date such notice is mailed, other than as may
be required by law (the "Change of Control Payment Date"). Holders electing to
have a Note purchased pursuant to a Change of Control Offer will be required to
surrender the Note, with the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Note completed, to
51
<PAGE>
the Paying Agent at the address specified in the notice prior to the close of
business on the third business day prior to the Change of Control Payment Date.
If a Change of Control Offer is made, there can be no assurance that we
will have available funds sufficient to pay the Change of Control purchase
price for all the Notes that might be delivered by holders seeking to accept
the Change of Control Offer. In the event we are required to purchase
outstanding Notes pursuant to a Change of Control Offer, we expect that we
would seek third party financing to the extent we do not have available funds
to meet our purchase obligations. However, there can be no assurance that we
would be able to obtain such financing.
The definition of Change of Control includes a phrase relating to the
sale, lease, exchange or other transfer of "all or substantially all" of our
assets as such phrase is defined in the Revised Model Business Corporation Act.
Although there is a developing body of case law interpreting the phrase
"substantially all," there is no precise definition of the phrase under
applicable law. Accordingly, in certain circumstances there may be a degree of
uncertainty in ascertaining whether a particular transaction would involve a
disposition of "all or substantially all" of our assets, and therefore it may
be unclear as to whether a Change of Control has occurred and whether the
holders have the right to require us to repurchase such Notes.
Neither the Board of Directors of the Company nor the Trustee may waive
the covenant relating to a Holder's right to redemption upon a Change of
Control Triggering Event. Restrictions in the Indenture described herein on our
ability and the ability of our Restricted Subsidiaries to incur additional
Indebtedness, to grant Liens on their properties, to make Restricted Payments
and to make Asset Sales may also make more difficult or discourage a takeover
of our company, whether favored or opposed by our management. Consummation of
any such transaction in certain circumstances may require redemption or
repurchase of the Notes, and there can be no assurance that we or the acquiring
party will have sufficient financial resources to effect such redemption or
repurchase. Such restrictions and the restrictions on transactions with
Affiliates may, in certain circumstances, make more difficult or discourage any
leveraged buyout of our company or any of our Subsidiaries by our management.
While such restrictions cover a wide variety of arrangements which have
traditionally been used to effect highly leveraged transactions, the Indenture
may not afford the holders of Notes protection in all circumstances from the
adverse aspects of a highly leveraged transaction, reorganization,
restructuring, merger or similar transaction.
We will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of Notes
pursuant to a Change of Control Offer. To the extent that the provisions of any
securities laws or regulations conflict with the "Change of Control" provisions
of the Indenture, we shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under the
"Change of Control" provisions of the Indenture by virtue thereof.
Certain Covenants
The Indenture contains, among others, the following covenants:
Limitation on Restricted Payments. We will not, and will not cause or
permit any of our Restricted Subsidiaries to, directly or indirectly,
(a) declare or pay any dividend or make any distribution (other than
dividends or distributions payable in Qualified Capital Stock) on or in
respect of our shares of our Capital Stock to holders of such Capital
Stock,
(b) purchase, redeem or otherwise acquire or retire for value any of our
Capital Stock or any warrants, rights or options to purchase or acquire
shares of any class of such Capital Stock, other than the exchange of
such Capital Stock for Qualified Capital Stock, or
(c) make any Investment (other than Permitted Investments) in any other
Person (each of the foregoing actions set forth in clauses (a), (b) and
(c) (other than the exceptions thereto) being referred to as a
"Restricted Payment"), if at the time of such Restricted Payment or
immediately after giving effect thereto,
(i) a Default or an Event of Default shall have occurred and be
continuing,
52
<PAGE>
(ii) we are not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
the "Limitation on Incurrence of Additional Indebtedness" covenant or
(iii) the aggregate amount of Restricted Payments made subsequent to
the Issue Date shall exceed the sum of:
(w) 50% of our cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income shall be a loss, minus
100% of such loss) earned subsequent to January 1, 1998 and
on or prior to the date the Restricted Payment occurs (the
"Reference Date") (treating such period as a single
accounting period); plus
(x) 100% of the aggregate net cash proceeds received by us
from any Person (other than our Subsidiary) from the
issuance and sale subsequent to January 21, 1998 and on or
prior to the Reference Date of our Qualified Capital Stock
(including Capital Stock issued upon the conversion of
convertible Indebtedness or in exchange for outstanding
Indebtedness but excluding net cash proceeds from the sale
of Capital Stock to the extent used to repurchase or
acquire shares of our Capital Stock pursuant to clause
(2)(ii) of the next succeeding paragraph); plus
(y) without duplication of any amounts included in clause
(iii) (x) above, 100% of the aggregate net cash proceeds
of any equity contribution received by us from a holder of
our Capital Stock; plus
(z) to the extent that any Investment (other than a Permitted
Investment) that was made after January 21, 1998 is sold
for cash or otherwise liquidated or repaid for cash, the
lesser of (A) the cash received with respect to such sale,
liquidation or repayment of such Investment (less the cost
of such sale, liquidation or repayment, if any) and (B)
the initial amount of such Investment, but only to the
extent not included in the calculation of Consolidated Net
Income.
Any net cash proceeds included in the foregoing clauses (iii)(x) or
(iii)(y) shall not be included in clause (10)(i) or clause (10)(ii) of the
definition of "Permitted Investments" to the extent actually utilized to make a
Restricted Payment under this paragraph.
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do not prohibit:
(1) the payment of any dividend or the consummation of any irrevocable
redemption within 60 days after the date of declaration of such dividend
or notice of such redemption if the dividend or payment of the
redemption price, as the case may be, would have been permitted on the
date of declaration or notice;
(2) if no Event of Default shall have occurred and be continuing as a
consequence thereof, the acquisition of any of our shares of Capital
Stock, either
(i) solely in exchange for shares of our Qualified Capital Stock, or
(ii) through the application of net proceeds of a substantially
concurrent sale (other than to our Subsidiary) of shares of our
Qualified Capital Stock;
(3) payments for the purpose of and in an amount equal to the amount
required to permit us to redeem or repurchase shares of its Capital
Stock or options in respect thereof, in each case in connection with the
repurchase provisions under employee stock option or stock purchase
agreements or other agreements to compensate management employees;
provided that such redemptions or repurchases pursuant to this clause
(3) shall not exceed $15 million in the aggregate after January 21, 1998
(which amount shall be increased by the amount of any cash proceeds to
us from (x) sales of its Capital Stock to management employees
subsequent to January 21, 1998 and (y) any "key-man" life insurance
policies which are used to make such redemptions or repurchases);
53
<PAGE>
(4) the payment of fees and compensation as permitted under clause (i) of
paragraph (b) of the "Limitation on Transactions with Affiliates"
covenant;
(5) so long as no Default or Event of Default shall have occurred and be
continuing, payments not to exceed $100,000 in the aggregate, to enable
us to make payments to holders of our Capital Stock in lieu of issuance
of fractional shares of its Capital Stock;
(6) repurchases of Capital Stock deemed to occur upon the exercise of stock
options if such Capital Stock represents a portion of the exercise price
thereof;
(7) Restricted Payments made pursuant to the Merger Agreement;
(8) us or any Restricted Subsidiary from making payments in respect of any
redemption, repurchase, acquisition, cancellation or other retirement
for value of shares of our Capital Stock or options, stock appreciation
or similar securities, in each case held by then current or former
officers, directors or employees or any of our Subsidiaries (or their
estates or beneficiaries under their estates) or by an employee benefit
plan, upon death, disability, retirement or termination of employment,
not to exceed $10 million in the aggregate after January 21, 1998;
(9) repurchases of payment-in-kind preferred stock; provided that
(i) such repurchases do not exceed $15,000,000 in the aggregate
over the life of the Notes and
(ii) such preferred stock repurchased shall have been issued on or
prior to the Issue Date; and
(10) us or any of our Restricted Subsidiaries from purchasing all (but not
less then all), excluding directors' qualifying shares, of the Capital
Stock or other ownership interests in our Subsidiary which Capital Stock
or other ownership interests were not theretofore owned by us or our
Subsidiary, such that after giving effect to such purchase such
Subsidiary becomes our Restricted Subsidiary.
In determining the aggregate amount of Restricted Payments made subsequent to
the Issue Date in accordance with clause (iii) of the first paragraph of this
covenant, (a) amounts expended (to the extent such expenditure is in the form
of cash or other property other than Qualified Capital Stock) pursuant to
clauses (1), (3), (8) and (9) of this paragraph shall be included in such
calculation, provided that such expenditures pursuant to clause (3) shall not
be included to the extent of cash proceeds received by us from any "key man"
life insurance policies, and (b) amounts expended pursuant to clauses (2), (4),
(5), (6), (7) and (10) shall be excluded from such calculation.
Limitation on Incurrence of Additional Indebtedness. We will not, and will
not permit any of our Restricted Subsidiaries to, directly or indirectly,
create, incur, assume, guarantee, acquire, become liable, contingently or
otherwise, with respect to, or otherwise become responsible for payment of
(collectively, "incur") any Indebtedness (other than Permitted Indebtedness);
provided, however, that if no Default or Event of Default shall have occurred
and be continuing at the time or as a consequence of the incurrence of any such
Indebtedness, (i) we may incur Indebtedness if on the date of the incurrence of
such Indebtedness, after giving effect to the incurrence thereof, our
Consolidated Fixed Charge Coverage Ratio is greater than 2.0 to 1.0 and (ii)
any of our Restricted Subsidiaries may incur Indebtedness if on the date of the
incurrence of such Indebtedness, after giving effect to the incurrence thereof,
our Consolidated Fixed Charge Coverage Ratio is greater than 3.0 to 1.0.
Limitation on Transactions with Affiliates. (a) We will not, and will not
permit any of our Restricted Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with, or for the benefit of, any of
our Affiliates (an "Affiliate Transaction"), other than (x) Affiliate
Transactions permitted under paragraph (b) below and (y) Affiliate Transactions
entered into on terms that are fair and reasonable to, and in our best
interests or those of such Restricted Subsidiary, as the case may be, as
determined in good faith by our Board of Directors; provided, however, that for
a transaction or series of related transactions with an aggregate value of $5
million or more, at our option (i) such determination shall be made in good
faith by a majority of the disinterested members of our Board of the Directors
or (ii) our Board of Directors or that of any such Restricted Subsidiary party
to such Affiliate
54
<PAGE>
Transaction shall have received a favorable opinion from a nationally
recognized investment banking firm that such Affiliate Transaction is fair from
a financial point of view to us or such Restricted Subsidiary; provided,
further, that for a transaction or series of related transactions with an
aggregate value of $15 million or more, our Board of Directors shall have
received a favorable opinion from a nationally recognized investment banking
firm that such Affiliate Transaction is fair from a financial point of view to
us or to such Restricted Subsidiary.
(b) The foregoing restrictions shall not apply to:
(1) reasonable fees and compensation paid to, and indemnity provided on
behalf of, our officers, directors, employees or consultants or
those of our Subsidiaries as determined in good faith by our Board
of Directors;
(2) transactions exclusively between or among us and any of our
Restricted Subsidiaries or exclusively between or among such
Restricted Subsidiaries, provided such transactions are not
otherwise prohibited by the Indenture;
(3) transactions effected as part of a Qualified Receivables
Transaction;
(4) any agreement as in effect as of the Issue Date or any amendment
thereto or any transaction contemplated thereby (including pursuant
to any amendment thereto) in any replacement agreement thereto so
long as any such amendment or replacement agreement is not more
disadvantageous to the holders in any material respect than the
original agreement as in effect on the Issue Date;
(5) Restricted Payments permitted by the Indenture;
(6) any Permitted Investment;
(7) transactions permitted by, and complying with, the provisions of
the covenant described under "Merger, Consolidation and Sale of
Assets";
(8) any payment, issuance of securities or other payments, awards or
grants, in cash or otherwise, pursuant to, or the funding of,
employment arrangements and Plans approved by our Board of
Directors;
(9) the grant of stock options or similar rights to our employees and
directors and our Subsidiaries pursuant to Plans and employment
contracts approved by our Board of Directors;
(10) loans or advances to our officers, directors or employees or those
of our Restricted Subsidiaries not in excess of $5 million at any
one time outstanding;
(11) the granting or performance of registration rights under a written
registration rights agreement approved by our Board of Directors;
(12) transactions with Persons solely in their capacity as holders of our
Indebtedness or Capital Stock, or the Indebtness of our Restricted
Subsidiaries where such Persons are treated no more favorably than
holders of our Indebtedness or Capital Stock generally;
(13) any agreement to do any of the foregoing;
(14) the payment, on a quarterly basis, of management fees to THL Co.
and/or any Affiliate of THL Co. in accordance with the management
arrangements entered into in January 1998 between THL Co. and/or any
Affiliate of THL Co. and Fisher in an aggregate amount (for all such
Persons taken together) not to exceed $250,000 in any of our fiscal
quarters;
(15) reimbursement of THL Co. and/or any Affiliate of THL Co. for their
reasonable out-of-pocket expenses incurred by them in connection
with performing management services for us and our Subsidiaries; and
(16) the payment of one time fees to THL Co. and/or Affiliates of THL Co.
in connection with each acquisition of a company or a line of
business by us or our Subsidiaries, such fees to be payable at the
time of each such acquisition and not to exceed 1% of the aggregate
consideration paid by us and our Subsidiaries for any such
acquisition.
55
<PAGE>
Limitation on Liens. We will not, and will not permit any of our
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Liens
(other than Permitted Liens) of any kind against or upon any of our or their
respective property or assets, or any proceeds, income or profit therefrom
which secure Senior Subordinated Indebtedness or Subordinated Obligations,
unless
(i) in the case of Liens securing Subordinated Obligations, the
Notes are secured by a Lien on such property, assets,
proceeds, income or profit that is senior in priority to such
Liens and
(ii) in the case of Liens securing Senior Subordinated
Indebtedness, the Notes are equally and ratably secured by a
Lien on such property, assets, proceeds, income or profit.
Prohibition on Incurrence of Senior Subordinated Debt. Neither we nor any
Subsidiary Guarantor will incur or suffer to exist Indebtedness that is senior
in right of payment to the Notes or such Subsidiary Guarantor's Guarantee and
subordinate in right of payment to any other of our or such Subsidiary
Guarantor's Indebtedness, as the case may be.
Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries. We will not, and will not permit any of our Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to
(a) pay dividends or make any other distributions on or in respect
of our Capital Stock;
(b) make loans or advances or to pay any Indebtedness or other
obligation owed to us or any of our other Restricted
Subsidiaries; or
(c) transfer any of its property or assets to us or any of our
other Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of:
(1) applicable law;
(2) the Indenture;
(3) non-assignment provisions of any contract or any lease entered
into in the ordinary course of business;
(4) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to us or any of
our Restricted Subsidiaries, or the properties or assets of any
such Person, other than the Person or the properties or assets
of the Person so acquired; provided, however, that such
Acquired Indebtedness was not incurred in connection with, or
in anticipation or contemplation of an acquisition by us or any
of our Restricted Subsidiaries;
(5) agreements existing on the Issue Date (including, without
limitation, the New Credit Facility and the Merger Agreement);
(6) restrictions on the transfer of assets subject to any Lien
permitted under the Indenture imposed by the holder of such
Lien;
(7) restrictions imposed by any agreement to sell assets permitted
under the Indenture to any Person pending the closing of such
sale;
(8) any agreement or instrument governing Capital Stock of any
Person that is acquired after the Issue Date;
(9) Indebtedness or other contractual requirements of a Receivables
Entity in connection with a Qualified Receivables Transaction;
provided that such restrictions apply only to such Receivables
Entity and such Restricted Subsidiary is engaged in the
Qualified Receivables Transaction; or
(10) an agreement effecting a refinancing, replacement or
substitution of Indebtedness issued, assumed or incurred
pursuant to an agreement referred to in clause (2), (4) or (5)
above; provided, however, that the provisions relating to such
encumbrance or restriction contained in any such refinancing,
replacement or substitution agreement are no less favorable to
us or
56
<PAGE>
the holders in any material respect as determined by our Board of
Directors than the provisions relating to such encumbrance or
restriction contained in agreements referred to in such clause
(2), (4) or (5).
Limitation on Preferred Stock of Subsidiaries. We will not permit any of
our Restricted Subsidiaries to issue any Preferred Stock (other than to us or
to a Restricted Subsidiary) or permit any Person (other than us or a Restricted
Subsidiary) to own any Preferred Stock of any Restricted Subsidiaries.
Merger, Consolidation and Sale of Assets. We will not, in a single
transaction or a series of related transactions, consolidate with or merge with
or into, or sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of our assets to, another Person or Persons unless
(1) either
(i) we shall be the survivor of such merger or consolidation or
(ii) the surviving Person is a corporation existing under the laws
of the United States, any state thereof or the District of
Columbia and such surviving Person shall expressly assume all
of our obligations under the Notes and the Indenture;
(2) immediately after giving effect to such transaction (on a pro forma
basis, including any Indebtedness incurred or anticipated to be incurred
in connection with such transaction and the other adjustments referred
to in the definition of "Consolidated Fixed Charge Coverage Ratio"), we
are or the surviving Person is able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with the "Limitation on Incurrence of Additional
Indebtedness" covenant;
(3) immediately before and immediately after giving effect to such
transaction (including any Indebtedness incurred or anticipated to be
incurred in connection with the transaction), no Default or Event of
Default shall have occurred and be continuing; and
(4) we have delivered to the Trustee an officers' certificate and opinion
of counsel, each stating that such consolidation, merger or transfer
complies with the Indenture, that the surviving Person agrees to be
bound thereby and by the Notes and the Registration Rights Agreement,
and that all conditions precedent in the Indenture relating to such
transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties and assets of one or more of our
Subsidiaries, the Capital Stock of which constitutes all or substantially all
of our properties and assets, shall be deemed to be the transfer of all or
substantially all of our properties and assets. Notwithstanding the foregoing
clauses (2) and (3) of the preceding paragraph, (a) any of our Restricted
Subsidiaries may consolidate with, merge into or transfer all or part of its
properties and assets to us and (b) we may merge with an Affiliate that is (x)
a corporation that has no material assets or liabilities and which was
incorporated solely for the purpose of reincorporating us in another
jurisdiction or (y) our Restricted Subsidiary so long as all our assets and
those of our Restricted Subsidiaries immediately prior to such transaction are
owned by such Restricted Subsidiary and its Restricted Subsidiaries immediately
after the consummation thereof.
The Indenture will provide that upon any consolidation, combination or
merger or any transfer of all or substantially all of our assets in accordance
with the foregoing, the surviving entity shall succeed to, and be substituted
for, and may exercise every right and power of, our company under the Indenture
and the Notes with the same effect as if such surviving entity had been named
as such.
Limitation on Asset Sales. We will not, and will not permit any of our
Restricted Subsidiaries to, consummate an Asset Sale unless
(1) we or the applicable Restricted Subsidiary, as the case may be, receive
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets sold or otherwise disposed of (as determined
in good faith by our Board of Directors);
(2) at least 75% of the consideration received by us or such Restricted
Subsidiary, as the case may be, from such Asset Sale shall be cash or
Cash Equivalents and is received at the time of such disposition;
provided that the amount of (x) any of our or such Restricted
Subsidiary's liabilities (as
57
<PAGE>
shown on our or such Restricted Subsidiary's most recent balance sheet or
in the notes thereto) (other than liabilities that are by their terms
subordinated to the Notes) that are assumed by the transferee of any such
assets and from which we and a Restricted Subsidiary are unconditionally
released and (y) any notes or other obligations received by us or such
Restricted Subsidiary from such transferee that are promptly, but in no
event more than 60 days after receipt, converted by us or such Restricted
Subsidiary into cash or Cash Equivalents (to the extent of the cash or
Cash Equivalents received) shall be deemed to be cash for purposes of
this provision; and
(3) upon the consummation of an Asset Sale, we shall apply, or cause such
Restricted Subsidiary to apply, the Net Cash Proceeds relating to such
Asset Sale within 365 days of receipt thereof either
(i) to prepay Senior Indebtedness and, in the case of any Senior
Indebtedness under any revolving credit facility, effect a permanent
reduction in the availability under such revolving credit facility,
(ii) to reinvest in Productive Assets, or
(iii) a combination of prepayment and investment permitted by the
foregoing clauses (3)(i) and (3)(ii).
On the 366th day after an Asset Sale or such earlier date, if any, as our
or such restricted Subsidiary's Board of Directors determines not to apply the
Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(i),
(3)(ii) and (3)(iii) of the immediately preceding sentence (each, a "Net
Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which
have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (3)(i), (3)(ii) and (3)(iii) of the immediately preceding
sentence (each a "Net Proceeds Offer Amount") shall be applied by us or such
Restricted Subsidiary to make an offer to purchase for cash (the "Net Proceeds
Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor
more than 45 days following the applicable Net Proceeds Offer Trigger Date,
from all holders on a pro rata basis at least that amount of Notes equal to the
Note Offer Amount at a price in cash equal to 100% of the principal amount of
the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to
the date of purchase; provided, however, that if at any time any non-cash
consideration received by us or any of our Restricted Subsidiaries, as the case
may be, in connection with any Asset Sale is converted into or sold or
otherwise disposed of for cash (other than interest received with respect to
any such non-cash consideration), then such conversion or disposition shall be
deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof
shall be applied in accordance with this covenant. Any offer to purchase with
respect to Other Debt shall be made and consummated concurrently with any Net
Proceeds Offer.
"Other Debt" shall mean our other Indebtedness that ranks pari passu with
the Notes and requires that an offer to purchase such Other Debt be made upon
consummation of an Asset Sale.
"Note Offer Amount" means
(i) if an offer to purchase Other Debt is not being made, the amount
of the Net Proceeds Offer Amount and
(ii) if an offer to purchase Other Debt is being made, an amount equal
to the product of (x) the Net Proceeds Offer Amount and (y) a
fraction the numerator of which is the aggregate amount of Notes
tendered pursuant to such offer to purchase and the denominator
of which is the aggregate amount of Notes and Other Debt tendered
pursuant to such offer to purchase.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than
$10 million, the application of the Net Cash Proceeds constituting such Net
Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time
as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds
Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by us
and our Restricted Subsidiaries aggregates at least $10 million, at which time
we or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting
all Net Proceeds Offer Amounts that have been so deferred to make a Net
Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds
Offer Amounts is equal to $10 million or more shall be deemed to be a "Net
Proceeds Offer Trigger Date").
58
<PAGE>
Notwithstanding the immediately preceding paragraphs of this covenant, we
and our Restricted Subsidiaries will be permitted to consummate an Asset Sale
without complying with such paragraphs to the extent (i) at least 75% of the
consideration for such Asset Sale constitutes Productive Assets and (ii) such
Asset Sale is for at least fair market value (as determined in good faith by
our Board of Directors); provided that any consideration not constituting
Productive Assets received by us or any of our Restricted Subsidiaries in
connection with any Asset Sale permitted to be consummated under this paragraph
shall constitute Net Cash Proceeds and shall be subject to the provisions of
the two preceding paragraphs; provided, that at the time of entering into such
transaction or immediately after giving effect thereto, no Default or Event of
Default shall have occurred or be continuing or would occur as a consequence
thereof.
Each Net Proceeds Offer will be mailed to the record holders as shown on
the register of holders within 25 days following the Net Proceeds Offer Trigger
Date, with a copy to the Trustee, and shall comply with the procedures set
forth in the Indenture. Upon receiving notice of the Net Proceeds Offer,
holders may elect to tender their Notes in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent holders properly tender
Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of tendering
holders will be purchased on a pro rata basis (based on amounts tendered). A
Net Proceeds Offer shall remain open for a period of 20 business days or such
longer period as may be required by law. To the extent that the aggregate
amount of Notes tendered pursuant to a Net Proceeds Offer is less than the Net
Proceeds Offer Amount, we may use any remaining Net Proceeds Offer Amount for
general corporate purposes. Upon completion of any such Net Proceeds Offer, the
Net Proceeds Offer Amount shall be reset at zero.
We will comply with the requirements of Rule 14e-1 under the Exchange Act
and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of Notes
pursuant to a Net Proceeds Offer. To the extent that the provisions of any
securities laws or regulations conflict with the "Asset Sale" provisions of the
Indenture, we shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached its obligations under the "Asset Sale"
provisions of the Indenture by virtue thereof.
Limitation on Guarantees by Restricted Subsidiaries. We will not permit
any of our Restricted Subsidiaries, directly or indirectly, to guarantee the
payment of any of our Indebtedness, other than guarantees incurred pursuant to
clause (z) of the definition of "Permitted Indebtedness," unless we, such
Restricted Subsidiary, and the Trustee execute and deliver a supplemental
indenture evidencing such Restricted Subsidiary's guarantee of the Notes (a
"Guarantee"), such Guarantee to be a senior subordinated unsecured obligation
of such Restricted Subsidiary; provided that if any Subsidiary Guarantor is
released from its guarantee with respect to Indebtedness outstanding under the
New Credit Facility, such Subsidiary Guarantor shall automatically be released
from its obligations as a Subsidiary Guarantor. Neither we nor any such
Subsidiary Guarantor shall be required to make a notation on the Notes to
reflect any such Guarantee. Nothing in this covenant shall be construed to
permit any of our Restricted Subsidiaries to incur Indebtedness otherwise
prohibited by the "Limitation on Incurrence of Additional Indebtedness"
covenant.
Conduct of Business. We and our Restricted Subsidiaries will not engage in
any businesses which are not the same, similar, related or ancillary to the
businesses in which we and our Restricted Subsidiaries are engaged on the Issue
Date.
Events of Default
The following events are defined in the Indenture as "Events of Default":
(1) the failure to pay interest (including liquidated damages, if any,
under the Registration Rights Agreement) on any Notes when the same
becomes due and payable and the default continues for a period of 30
days (whether or not such payment shall be prohibited by the
subordination provisions of the Indenture);
(2) the failure to pay the principal on any Notes, when such principal
becomes due and payable, at maturity, upon redemption or otherwise
(including the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer) (whether
or not such payment shall be prohibited by the subordination provisions
of the Indenture);
(3) a default in the observance or performance of the covenant set forth
under "--Certain Covenants--Merger, Consolidation and Sale of Assets"
above;
59
<PAGE>
(4) a default in the observance or performance of any other covenant or
agreement contained in the Indenture which default continues for a
period of 30 days after we receive written notice specifying the default
(and demanding that such default be remedied) from the Trustee or the
holders of at least 25% of the outstanding principal amount of the
Notes;
(5) the failure to pay at final maturity (giving effect to any applicable
grace periods and any extensions thereof) the principal amount of any of
our or any of our Restricted Subsidiaries' Indebtedness (other than a
Receivables Entity), or the acceleration of the final stated maturity of
any such Indebtedness if the aggregate principal amount of such
Indebtedness, together with the principal amount of any other such
Indebtedness in default for failure to pay principal at final maturity
or which has been accelerated, aggregates $15 million or more at any
time;
(6) one or more judgments in an aggregate amount in excess of $15 million
shall have been rendered against us or any of our Significant
Subsidiaries and such judgments remain undischarged, unpaid and unstayed
for a period of 60 days after such judgment or judgments become final
and non-appealable, and in the event such judgment is covered by
insurance, an enforcement proceeding has been commenced by any creditor
upon such judgment, which is not promptly stayed; and
(7) certain events of bankruptcy affecting us or any of our Significant
Subsidiaries.
Upon the happening of any Event of Default specified in the Indenture, the
Trustee or the holders of at least 25% in principal amount of outstanding Notes
may declare the principal of and accrued interest on all the Notes to be due
and payable by notice in writing to us and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration," and the
same shall become immediately due and payable. If an Event of Default with
respect to our bankruptcy proceedings occurs and is continuing, then such
amount shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any holder of Notes.
The Indenture will provide that, at any time after a declaration of
acceleration with respect to the Notes as described in the preceding paragraph,
the holders of a majority in principal amount of the Notes may rescind and
cancel such declaration and its consequences (1) if the rescission would not
conflict with any judgment or decree, (2) if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration, (3) to the extent the payment of
such interest is lawful, interest on overdue installments of interest and
overdue principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (4) if we have paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances and (5) in the event of the cure or waiver of an Event of Default of
the type described in clause (6) or (7) of the description above of Events of
Default, the Trustee shall have received an officers' certificate and an
opinion of counsel that such Event of Default has been cured or waived. The
holders of a majority in principal amount of the Notes may waive any existing
Default or Event of Default under the Indenture, and its consequences, except a
default in the payment of the principal of or interest on any Notes.
No Personal Liability of Directors, Officers, Employees and Stockholders
None of our directors, officers, employees, incorporators or stockholders
shall have any liability for any of our obligations under the Notes or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of Notes by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
Legal Defeasance and Covenant Defeasance
We may, at our option and at any time, elect to have our obligations
discharged with respect to the outstanding Notes ("Legal Defeasance"). Such
Legal Defeasance means that we shall be deemed to have paid and discharged the
entire indebtedness represented by the outstanding Notes, except for:
(1) the rights of holders of the Notes to receive payments in respect of
the principal of, premium, if any, and interest on the Notes when such
payments are due;
60
<PAGE>
(2) our obligations with respect to the Notes concerning issuing temporary
Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes
and the maintenance of an office or agency for payments;
(3) the rights, powers, trust, duties and immunities of the Trustee and our
obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, we may, at our option and at any time, elect to have our
obligations released with respect to certain covenants that are described in
the Indenture ("Covenant Defeasance") and thereafter any omission to comply
with such obligations shall not constitute a Default or Event of Default with
respect to the Notes. In the event Covenant Defeasance occurs, certain events
(not including non-payment, bankruptcy, receivership, reorganization and
insolvency events) described under "Events of Default" will no longer
constitute an Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance,
(1) we must irrevocably deposit with the Trustee, in trust, for the benefit
of the holders of the Notes cash in U.S. dollars, non-callable U.S.
government obligations, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if
any, and interest on the Notes on the stated date for payment thereof or
on the applicable redemption date, as the case may be;
(2) in the case of Legal Defeasance, we shall have delivered to the Trustee
an opinion of counsel in the United States reasonably acceptable to the
Trustee confirming that (i) we have received from, or there has been
published by, the Internal Revenue Service a ruling or (ii) since the
date of the Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the holders of the Notes
will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case if such Legal Defeasance had not occurred;
(3) in the case of Covenant Defeasance, we shall have delivered to the
Trustee an opinion of counsel in the United States reasonably acceptable
to the Trustee confirming that the holders of the Notes will not
recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case it such Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default with
respect to the Indenture resulting from the incurrence of Indebtedness,
all or a portion of which will be used to defease the Notes concurrently
with such incurrence);
(5) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, the Indenture or
any other material agreement or instrument to which we or any of our
Subsidiaries are a party or by which we or any of our Subsidiaries are
bound;
(6) we shall have delivered to the Trustee an officers' certificate stating
that the deposit was not made by us with the intent of preferring the
holders of the Notes over any of our other creditors or with the intent
of defeating, hindering, delaying or defrauding any of our other
creditors or others;
(7) we shall have delivered to the Trustee an officers' certificate and an
opinion of counsel, each stating that all conditions precedent provided
for or relating to the Legal Defeasance or the Covenant Defeasance have
been complied with;
(8) we shall have delivered to the Trustee an opinion of counsel to the
effect that (i) the trust funds will not be subject to any rights of
holders of our Indebtedness other than the Notes and (ii) assuming we
have no intervening bankruptcy between the date of deposit and the 91st
day following the deposit and that no Holder of the Notes is our
insider, after the 91st day following the deposit, the trust
61
<PAGE>
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally; and
(9) certain other customary conditions precedent are satisfied.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect
(except as to surviving rights or registration of transfer or exchange of the
Notes, as expressly provided for in the Indenture) as to all outstanding Notes
when
o either (1) all the Notes theretofore authenticated and delivered (except
lost, stolen or destroyed Notes which have been replaced or paid and Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by us and thereafter repaid to us or
discharged from such trust) have been delivered to the Trustee for
cancellation or (2) all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable and we have irrevocably deposited
or caused to be deposited with the Trustee funds in an amount sufficient
to pay and discharge the entire Indebtedness on the Notes not theretofore
delivered to the Trustee for cancellation, for principal of, premium, if
any, and interest on the Notes to the date of deposit together with
irrevocable instructions from us directing the Trustee to apply such funds
to the payment thereof at maturity or redemption, as the case may be;
o we have paid all other sums payable under the Indenture by us; and
o we have delivered to the Trustee an officers' certificate and an opinion
of counsel stating that all conditions precedent under the Indenture
relating to the satisfaction and discharge of the Indenture have been
complied with.
Modification of the Indenture
From time to time, we and the Trustee, without the consent of the holders
of the Notes, may amend the Indenture for certain specified purposes, including
curing ambiguities, defects or inconsistencies, so long as such change does
not, in the opinion of the Trustee, adversely affect the rights of any of the
holders in any material respect. In formulating its opinion on such matters,
the Trustee will be entitled to rely on such evidence as it deems appropriate,
including, without limitation, solely on an opinion of counsel. Other
modifications and amendments of the Indenture may be made with the consent of
the holders of a majority in principal amount of the then outstanding Notes
issued under the Indenture, except that, without the consent of each holder of
the Notes affected thereby, no amendment may:
o reduce the amount of Notes whose holders must consent to an amendment;
o reduce the rate of or change or have the effect of changing the time for
payment of interest, including defaulted interest, on any Notes;
o reduce the principal of or change or have the effect of changing the
fixed maturity of any Notes, or change the date on which any Notes may be
subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;
o make any Notes payable in money other than that stated in the Notes;
o make any change in provisions of the Indenture protecting the right of
each holder of a Note to receive payment of principal of and interest on
such Note on or after the due date thereof or to bring suit to enforce
such payment, or permitting holders of a majority in principal amount of
the Notes to waive Defaults or Events of Default (other than Defaults or
Events of Default with respect to the payment of principal of or interest
on the Notes);
o amend, change or modify in any material respect our obligation to make
and consummate a Change of Control Offer or make and consummate a Net
Proceeds Offer with respect to any Asset Sale that has been consummated or
modify any of the provisions or definitions with respect thereto; or
o modify the subordination provisions (including the related definitions)
of the Indenture to adversely affect the holders of Notes in any material
respect. Any amendment or modification of the
62
<PAGE>
subordination provisions of the Indenture that is adverse to any Senior
Indebtedness outstanding at the time shall not be effective as to the
holders of such Senior Indebtedness without the written consent of such
holders.
Additional Information
The Indenture provides that we will deliver to the Trustee within 15 days
after the filing of the same with the Commission, copies of the quarterly and
annual reports and of the information, documents and other reports, if any,
which we are required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act. The Indenture further provides that, notwithstanding
that we may not be subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, we will file with the Commission, to the extent permitted,
and provide the Trustee and holders with such annual reports and such
information, documents and other reports specified in Sections 13 and 15(d) of
the Exchange Act. We will also comply with the other provisions of the Trust
Indenture Act [sec] 314(a).
Certain Definitions
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the definition of other terms
used herein for which no definition is provided.
"Acquired Indebtedness" means Indebtedness
(1) of a Person or any of its Subsidiaries existing at the time such Person
becomes our Restricted Subsidiary or
(2) assumed in connection with the acquisition of assets from such Person,
in each case whether or not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming our Restricted
Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to have
been incurred, with respect to clause (1) of the preceding sentence, on the
date such Person becomes our Restricted Subsidiary and, with respect to clause
(2) of the preceding sentence, on the date of consummation of such acquisition
of assets.
"Affiliate" means a Person who directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with,
us. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, no Person (other than the Company or
any Subsidiary of the Company) in whom a Receivables Entity makes an Investment
in connection with a Qualified Receivables Transaction shall be deemed to be
our or any of our Subsidiaries' Affiliate solely by reason of such Investment.
"all or substantially all" shall have the meaning given such phrase in the
Revised Model Business Corporation Act.
"Applicable Premium" means, with respect to a Note, the greater of (1)
1.0% of the then outstanding principal amount of such Note or (2) the excess of
(i) the present value of the required interest and principal payments due on
such Note, computed using a discount rate equal to the Treasury Rate plus 50
basis points, over (ii) the then outstanding principal amount of such Note;
provided that in no event will the Applicable Premium exceed the amount of the
applicable redemption price upon an optional redemption less 100%, at any time
on or after February 1, 2003.
"Asset Acquisition" means
(a) an Investment by us or any of our Restricted Subsidiaries in any other
Person pursuant to which such Person shall become our Restricted Subsidiary or
a Restricted Subsidiary of any of our Restricted Subsidiaries, or shall be
merged with or into our company or any of our Restricted Subsidiaries, or
(b) the acquisition by us or any of our Restricted Subsidiaries of the
assets of any Person which constitute all or substantially all of the assets of
such Person, any division or line of business of such Person or any other
properties or assets of such Person other than in the ordinary course of
business.
63
<PAGE>
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary
course of business), assignment or other transfer for value by us or any of our
Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any
Person other than us or our Restricted Subsidiary of
(a) any Capital Stock of any of our Restricted Subsidiaries; or
(b) any other property or assets of us or any of our Restricted
Subsidiaries other than in the ordinary course of business; provided, however,
that Asset Sales shall not include:
(1) any transaction or series of related transactions for which we
or our Restricted Subsidiaries receive aggregate consideration
of less than $5 million,
(2) the sale, lease, conveyance, disposition or other transfer of
all or substantially all of our assets as permitted under
"Merger, Consolidation and Sale of Assets,"
(3) the sale or discount, in each case without recourse, of
accounts receivable arising in the ordinary course of business,
but only in connection with the compromise or collection
thereof,
(4) the factoring of accounts receivable arising in the ordinary
course of business pursuant to arrangements customary in the
industry,
(5) the licensing of intellectual property,
(6) disposals or replacements of obsolete equipment in the ordinary
course of business,
(7) the sale, lease, conveyance, disposition or other transfer by
us or any Restricted Subsidiary of assets or property in
transactions constituting Investments that are not prohibited
under the "Limitation on Restricted Payments" covenant,
(8) sales of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables
Transaction" to a Receivables Entity,
(9) transfers of accounts receivable and related assets of the type
specified in the definition of "Qualified Receivables
Transaction" (or a fractional undivided interest therein) by a
Receivables Entity in a Qualified Receivables Transaction,
(10) leases or subleases to third persons not interfering in any
material respect with our business or the business of any of our
Restricted Subsidiaries and
(11) the sale, issuance or transfer of Capital Stock representing up
to 30% of the fully-diluted equity ownership of one or more of
(i) Fisher Technology Group, (ii) UniKix Technologies, (iii)
Electronic Commerce Division and (iv) SPS to one or more of
their respective officers, directors or employees in connection
with the compensation of such employees.
For the purposes of clause (8), Purchase Money Notes shall be deemed to be
cash.
"Bank Indebtedness" means any and all amounts, whether outstanding on the
Issue Date or thereafter incurred, payable under or in respect of the New
Credit Facility and any related notes, collateral documents, letters of credit
and guarantees, including principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to us or any of our Restricted Subsidiaries whether or
not a claim for post-filing interest is allowed in such proceedings), fees,
charges, expenses, indemnities, reimbursement obligations, guarantees and all
other amounts payable thereunder or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
64
<PAGE>
"Capital Stock" means
(1) with respect to any Person that is a corporation, any and all shares,
interests, participations or other equivalents (however designated) of
corporate stock, including each class of common stock and preferred
stock of such Person and
(2) with respect to any Person that is not a corporation, any and all
partnership or other equity interests of such Person.
"Cash Equivalents" means
(1) marketable direct obligations issued by, or unconditionally guaranteed
by, the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the
two highest ratings obtainable from either S&P or Moody's;
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances (or, with respect to
foreign banks, similar instruments) maturing within one year from the
date of acquisition thereof issued by any bank organized under the laws
of the United States of America or any state thereof or the District of
Columbia or any U.S. branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than $200
million;
(5) certificates of deposit or bankers' acceptances or similar instruments
maturing within one year from the date of acquisition thereof issued by
any foreign bank that is a lender under the New Credit Facility having
at the date of acquisition thereof combined capital and surplus of not
less than $500 million;
(6) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (1) above entered
into with any bank meeting the qualifications specified in clause (4) or
clause (5) above; and
(7) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (1) through (6)
above.
"Change of Control" means the occurrence of one or more of the following
events:
(1) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of our
assets to any Person or group of related Persons (other than one or more
Permitted Holders) for purposes of Section 13(d) of the Exchange Act (a
"Group"), together with any Affiliates thereof (whether or not otherwise
in compliance with the provisions of the Indenture);
(2) the approval by the holders of our Capital Stock of any plan or
proposal for the liquidation or dissolution of our company (whether or
not otherwise in compliance with the provisions of the Indenture);
(3) any Person or Group (other than one or more Permitted Holders) shall
become the owner, directly or indirectly, beneficially or of record, of
shares representing 50% or more of the aggregate ordinary voting power
represented by our issued and outstanding Capital Stock; or
(4) the first day on which a majority of the members of our Board of
Directors are not Continuing Directors.
"Change of Control Triggering Event" means the occurrence of a Change of
Control and the failure of the Notes to have a Minimum Rating on the 30th day
after the occurrence of such Change of Control.
65
<PAGE>
"Consolidated EBITDA" means, with respect to any Person, for any period,
the sum (without duplication) of
(1) Consolidated Net Income and
(2) to the extent Consolidated Net Income has been reduced thereby,
(i) all income taxes of such Person and its Restricted Subsidiaries paid
or accrued in accordance with GAAP for such period,
(ii) Consolidated Interest Expense,
(iii) Consolidated Non-cash Charges,
(iv) cash charges attributable to the exercise of employee options that
vested upon the consummation of the Recapitalization and
(v) for any four quarter period that includes one or more fiscal quarters
of fiscal 1997 or 1998, cash restructuring or nonrecurring charges,
in an aggregate amount not to exceed $20 million.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to
(1) the incurrence of any Indebtedness of such Person or any of its
Restricted Subsidiaries (and the application of the proceeds thereof)
giving rise to the need to make such calculation and any incurrence or
repayment of other Indebtedness (and the application of the proceeds
thereof) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to
the Transaction Date, as if such incurrence or repayment, as the case
may be (and the application of the proceeds thereof), occurred on the
first day of the Four Quarter Period,
(2) any Asset Sales or Asset Acquisitions (including, without limitation,
any Asset Acquisition giving rise to the need to make such calculation
as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of
the Asset Acquisition) incurring, assuming or otherwise being liable for
Acquired Indebtedness and also including any Consolidated EBITDA
(including pro forma adjustments for cost savings ("Cost Savings
Adjustments") that the Company reasonably believes in good faith could
have been achieved during the Four Quarter Period as a result of such
acquisition or disposition (provided that both (i) such cost savings
were identified and quantified in an Officers' Certificate delivered to
the Trustee at the time of the consummation of the acquisition or
disposition and (ii) with respect to each acquisition or disposition
completed prior to the 90th day preceding such date of determination,
actions were commenced or initiated by us within 90 days of such
acquisition or disposition to effect such cost savings identified in
such Officers' Certificate and with respect to any other acquisition or
disposition, such Officers' Certificate sets forth the specific steps to
be taken within the 90 days after such acquisition or disposition to
accomplish such cost savings) attributable to the assets which are the
subject of the Asset Acquisition or Asset Sale during the Four Quarter
Period) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to
the Transaction Date, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such
Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four Quarter Period,
(3) with respect to any such Four Quarter Period commencing prior to the
Recapitalization, the Recapitalization (including any Cost Savings
Adjustments), which shall be deemed to have taken place on the first day
of such Four Quarter Period, and
66
<PAGE>
(4) any Asset Sales or Asset Acquisitions (including any Consolidated
EBITDA (including any Cost Savings Adjustments) attributable to the
assets which are the subject of the Asset Acquisition or Asset Sale
during the Four Quarter Period) that have been made by any Person that
has become our Restricted Subsidiary or has been merged with or into our
company or any of our Restricted Subsidiaries during the Four Quarter
Period or at any time subsequent to the last day of the Four Quarter
Period and on or prior to the Transaction Date that would have
constituted Asset Sales or Asset Acquisitions had such transactions
occurred when such Person was our Restricted Subsidiary or subsequent to
such Person's merger into our company, as if such Asset Sale or Asset
Acquisition (including the incurrence, assumption or liability for any
Indebtedness or Acquired Indebtedness in connection therewith) occurred
on the first day of the Four Quarter Period;
provided that to the extent that clause (2) or (4) of this sentence requires
that pro forma effect be given to an Asset Sale or Asset Acquisition, such pro
forma calculation shall be based upon the four full fiscal quarters immediately
preceding the Transaction Date of the Person, or division or line of business
of the Person, that is acquired or disposed of for which financial information
is available. If such Person or any of its Restricted Subsidiaries directly or
indirectly guarantees Indebtedness of a third Person, the preceding sentence
shall give effect to the incurrence of such guaranteed Indebtedness as if such
Person or any Restricted Subsidiary of such Person had directly incurred or
otherwise assumed such guaranteed Indebtedness. Furthermore, in calculating
"Consolidated Fixed Charges" for purposes of determining the denominator (but
not the numerator) of this "Consolidated Fixed Charge Coverage Ratio," (A)
interest on outstanding Indebtedness determined on a fluctuating basis as of
the Transaction Date and which will continue to be so determined thereafter
shall be deemed to have accrued at a fixed rate per annum equal to the rate of
interest on such Indebtedness in effect on the Transaction Date; (B) if
interest on any Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate in effect on the Transaction Date will be deemed to have been in
effect during the Four Quarter Period; and (C) notwithstanding clause (A)
above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of
(1) Consolidated Interest Expense (excluding amortization or write-off of
debt issuance costs relating to the Recapitalization and the financing
therefor or relating to retired or existing Indebtedness and
amortization or write-off of customary debt issuance costs relating to
future Indebtedness incurred in the ordinary course of business) plus
(2) the product of
(x) the amount of all dividend payments on any series of Preferred
Stock of such Person (other than dividends paid in Qualified
Capital Stock) times
(y) a fraction, the numerator of which is one and the denominator
of which is one minus the then current effective consolidated
Federal, state and local tax rate of such Person expressed as
a decimal.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum of, without duplication,
(1) the aggregate of all cash and non-cash interest expense with respect to
all outstanding Indebtedness of such Person and its Restricted
Subsidiaries, including the net costs associated with Interest Swap
Obligations, for such period determined on a consolidated basis in
conformity with GAAP, and
(2) the interest component of Capitalized Lease Obligations paid, accrued
and/or scheduled to be paid or accrued by such Person and its Restricted
Subsidiaries during such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" of ours means, for any period, the aggregate net
income (or loss) of and our Restricted Subsidiaries for such period on a
consolidated basis, determined in accordance with GAAP; provided that there
shall be excluded therefrom:
67
<PAGE>
(a) gains and losses from Asset Sales (without regard to the $5
million limitation set forth in the definition thereof) or
abandonments or reserves relating thereto and the related tax
effects according to GAAP,
(b) gains and losses due solely to fluctuations in currency values
and the related tax effects according to GAAP,
(c) items classified as extraordinary, unusual or nonrecurring
gains and losses, and the related tax effects according to
GAAP,
(d) the net income (or loss) of any Person acquired in a pooling
of interests transaction accrued prior to the date it becomes
our Restricted Subsidiary or is merged or consolidated with us
or any of our Restricted Subsidiaries,
(e) the net income of any Restricted Subsidiary to the extent that
the declaration of dividends or similar distributions by that
Restricted Subsidiary of that income is restricted by
contract, operation of law or otherwise,
(f) the net loss of any Person other than our Restricted
Subsidiary,
(g) the net income of any Person, other than a Restricted
Subsidiary, except to the extent of cash dividends or
distributions paid to us or our Restricted Subsidiary by such
Person unless, in the case of any of our Restricted
Subsidiaries that receives such dividends or distributions,
such Restricted Subsidiary is subject to clause (e) above,
(h) one time non-cash compensation charges, including any arising
from existing stock options resulting from any merger or
recapitalization transaction, and
(i) bonus payments to be paid to our senior management following
the Recapitalization in an aggregate amount not to exceed $10
million.
"Consolidated Non-cash Charges" means, with respect to any Person for any
period, the aggregate depreciation, amortization and other non-cash expenses of
such Person and its Restricted Subsidiaries reducing Consolidated Net Income of
such Person and its Restricted Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges which
require an accrual of or a reserve for cash charges for any future period).
"Continuing Directors" means, as of any date of determination, any member
of our Board of Directors who
(1) was a member of such Board of Directors on the Issue Date,
(2) was nominated for election or elected to such Board of Directors with,
or whose election to such Board of Directors was approved by, the
affirmative vote of a majority of the Continuing Directors who were
members of such Board of Directors at the time of such nomination or
election or
(3) is any designee of a Permitted Holder or was nominated by a Permitted
Holder or any designees of a Permitted Holder on the Board of
Directors.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect us or
any of our Restricted Subsidiaries against fluctuations in currency values.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of
Default.
"Designated Senior Indebtedness" means
(1) the Bank Indebtedness and
(2) any other Senior Indebtedness which, at the date of determination, has
an aggregate principal amount outstanding of, or under which, at the
date of determination, the holders thereof, are committed to lend up to,
at least $25 million and is specifically designated by us in the
instrument evidencing or
68
<PAGE>
governing such Senior Indebtedness or another writing as "Designated
Senior Indebtedness" for purposes of the Indenture.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event (other than an event which would constitute a Change of Control
Triggering Event), matures (excluding any maturity as the result of an optional
redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the sole option of
the holder thereof (except, in each case, upon the occurrence of a Change of
Control Triggering Event) on or prior to the final maturity date of the Notes.
"Existing Notes" means our existing 9% Senior Subordinated Notes due 2008.
"fair market value" means, unless otherwise specified, with respect to any
asset or property, the price which could be negotiated in an arm's-length, free
market transaction, for cash, between a willing seller and a willing and able
buyer, neither of whom is under undue pressure or compulsion to complete the
transaction. Fair market value shall be determined by our Board of Directors
acting reasonably and in good faith and shall be evidenced by a resolution of
our Board of Directors delivered to the Trustee.
"fiscal 1998" means the year ended December 31, 1998.
"Foreign Subsidiary" means any of our Restricted Subsidiaries (1) that is
organized in a jurisdiction other than the United States of America or a state
thereof or the District of Columbia and (2) with respect to which at least 90%
of its sales (as determined in accordance with GAAP) are generated by
operations located in jurisdictions outside the United States of America.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect on the Issue Date, including, without limitation, those
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession.
"Indebtedness" means with respect to any Person, without duplication,
(1) all obligations of such Person for borrowed money,
(2) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments,
(3) all Capitalized Lease Obligations of such Person,
(4) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all
obligations under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business),
(5) all obligations for the reimbursement of any obligor on any letter of
credit, banker's acceptance or similar credit transaction,
(6) guarantees and other contingent obligations in respect of Indebtedness
referred to in clauses (1) through (5) above and clause (8) below,
(7) all obligations of any other Person of the type referred to in clauses
(1) through (6) which are secured by any lien on any property or asset
of such Person but which obligations are not assumed by such Person, the
amount of such obligation being deemed to be the lesser of the fair
market value of such property or asset or the amount of the obligation
so secured,
(8) all obligations under currency swap agreements and interest swap
agreements of such Person and
(9) all Disqualified Capital Stock issued by such Person with the amount of
Indebtedness represented by such Disqualified Capital Stock being equal
to the greater of its voluntary or involuntary liquidation preference
and its maximum fixed repurchase price, but excluding accrued dividends,
if any.
For purposes hereof, (x) the "maximum fixed repurchase price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall
be calculated in accordance with the terms of such Disqualified Capital
69
<PAGE>
Stock as if such Disqualified Capital Stock were purchased on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock, such fair market value shall be determined
reasonably and in good faith by the Board of Directors of the issuer of such
Disqualified Capital Stock and (y) any transfer of accounts receivable or other
assets which constitute a sale for purposes of GAAP shall not constitute
Indebtedness hereunder.
"Interest Swap Obligations" means the obligations of any Person, pursuant
to any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated
by applying a fixed or a floating rate of interest on the same notional amount.
"Investment" by any Person in any other Person means, with respect to any
Person, any direct or indirect loan or other extension of credit (including,
without limitation, a guarantee) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or acquisition by
such Person of any Capital Stock, bonds, notes, debentures or other securities
or evidences of Indebtedness issued by, such other Person. "Investment" shall
exclude extensions of trade credit by us and our Restricted Subsidiaries on
commercially reasonable terms in accordance with our normal trade practices or
those of such Restricted Subsidiary, as the case may be. For the purposes of
the "Limitation on Restricted Payments" covenant,
(1) we shall be deemed to have made an "Investment" equal to the fair
market value of the net assets of any Restricted Subsidiary at the time
that such Restricted Subsidiary is designated an Unrestricted Subsidiary
and the aggregate amount of Investments made on the Issue Date shall
exclude (to the extent the designation as an Unrestricted Subsidiary was
included as a Restricted Payment) the fair market value of the net
assets of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary, not to exceed the
amount of the Investment deemed made at the date of designation thereof
as an Unrestricted Subsidiary, and
(2) the amount of any Investment shall be the original cost of such
Investment plus the cost of all additional Investments by the Company or
any of its Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, writedowns or write-offs
with respect to such Investment, reduced by the payment of dividends or
distributions (including tax sharing payments) in connection with such
Investment or any other amounts received in respect of such Investment;
provided that no such payment of dividends or distributions or receipt
of any such other amounts shall reduce the amount of any Investment if
such payment of dividends or distributions or receipt of any such
amounts would be included in Consolidated Net Income. If we or any of
our Restricted Subsidiaries sells or otherwise disposes of any Common
Stock of any of our direct or indirect Restricted Subsidiaries such
that, after giving effect to any such sale or disposition, we no longer
own, directly or indirectly, 50% of the outstanding Common Stock of such
Restricted Subsidiary, we shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the fair market value
of the Common Stock of such Restricted Subsidiary not sold or disposed
of.
"Investors" means one or more of
(1) Merrill Lynch Kecalp L.P. 1997,
(2) Kecalp Inc.,
(3) ML IBK Positions, Inc.,
(4) Chase Equity Associates, L.P.,
(5) DLJ Merchant Banking Partners II, L.P., DLJ Offshore Partners II, C.V.,
DLJ Diversified Partners, L.P., DLJMB Funding II, Inc., DLJ Merchant
Banking Partners II-A, L.P., DLJ Diversified Partners-A, L.P., DLJ
Millennium Partners, L.P., DLJ Millennium Partners-A, L.P., UK Investment
Plan 1997 Partners, DLJ EAB Partners, L.P. and DLJ First ESC, LLC,
(6) members of our management and
70
<PAGE>
(7) any Affiliate of any of the foregoing.
"Issue Date" means November 20, 1998, the date of original issuance of the
Old Notes.
"Joint Venture" means a corporation, partnership or other business entity,
other than our Subsidiaries, engaged or proposed to be engaged in our line of
business or a similar line of business that we own, directly or indirectly, not
less than 30% of the total voting power of shares of Capital Stock or other
interests (including partnership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
and trustees thereof, with the balance of the ownership interests being held by
one or more investors.
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement, any lease in the nature thereof and any agreement to
give any security interest).
"Merger Agreement" means the Second Amended and Restated Plan of Merger
dated as of November 14, 1997 by and between FSI Merger Corp. and us.
"Minimum Rating" means
(i) a rating of at least BBB- (or equivalent successor rating) by S&P and
(ii) a rating of at least Baa3 (or equivalent successor rating) by Moody's.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents
(other than the portion of any such deferred payment constituting interest)
received by us or any of our Subsidiaries from such Asset Sale net of
(a) out-of-pocket expenses and fees relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees and
sales commissions),
(b) taxes paid or payable after taking into account any reduction in
consolidated tax liability due to available tax credits or deductions
and any tax sharing arrangements,
(c) repayment of Senior Indebtedness that is required to be repaid in
connection with such Asset Sale,
(d) any portion of cash proceeds which we determine in good faith should be
reserved for post-closing adjustments, it being understood and agreed
that on the day that all such post-closing adjustments have been
determined, the amount (if any) by which the reserved amount in respect
of such Asset Sale exceeds the actual post-closing adjustments payable
by us or any of our Subsidiaries shall constitute Net Cash Proceeds on
such date;
provided that, in the case of the sale by us of an asset constituting an
Investment made after the Issue Date (other than a Permitted Investment), the
"Net Cash Proceeds" in respect of such Asset Sale shall not include the lesser
of (x) the cash received with respect to such Asset Sale and (y) the initial
amount of such Investment, less, in the case of clause (y), all amounts (up to
an amount not to exceed the initial amount of such Investment) received by us
with respect to such Investment, whether by dividend, sale, liquidation or
repayment, in each case prior to the date of such Asset Sale.
"New Credit Facility" means the credit agreement dated as of January 21,
1998, among our company, the other borrowers thereto from time to time, if any,
the lenders party thereto from time to time and The Chase Manhattan Bank, as
administrative agent, Merrill Lynch Capital Corporation, as syndication agent
and DLJ Capital Funding, Inc. as documentation agent, together with the related
documents thereto (including, without limitation, any guarantee agreements,
promissory notes and collateral documents), in each case as such agreements may
be amended, supplemented or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid or extended from time to
time (whether with the original agents and lenders or other agents and lenders
or otherwise, and whether provided under the original New Credit Facility or
one or more other credit agreements or otherwise) including, without
limitation, to increase
71
<PAGE>
the amount of available borrowings thereunder or to add Restricted Subsidiaries
as additional borrowers or guarantors or otherwise.
"Permitted Holder" means and includes
(1) the Principal or any of its Affiliates,
(2) the Investors or any of their Affiliates,
(3) any corporation the outstanding voting power of the capital stock of
which is beneficially owned, directly or indirectly, by our stockholders
in substantially the same proportions as their ownership of the voting
power of our capital stock,
(4) any Plan,
(5) any underwriter during the period engaged in a firm commitment
underwriting on our behalf with respect to the shares of capital stock
being underwritten or
(6) us or any of our Subsidiaries.
"Permitted Indebtedness" means, without duplication,
(1) the Notes,
(2) the Existing Notes,
(3) Indebtedness incurred pursuant to the New Credit Facility in an
aggregate principal amount at any time outstanding not to exceed $469.2
million less (A) the amount of all mandatory principal payments actually
made by us in respect of term loans thereunder (excluding any such
payments to the extent refinanced at the time of payment under a New
Credit Facility) and (B) in the case of a revolving facility, reduced by
any required permanent repayments actually made (which are accompanied
by a corresponding permanent commitment reduction) thereunder (excluding
any such repayments and commitment reductions to the extent refinanced
and replaced at the time under a New Credit Facility),
(4) Indebtedness of Foreign Subsidiaries incurred solely for working
capital purposes of such Foreign Subsidiaries,
(5) our other Indebtedness and that of our Restricted Subsidiaries
outstanding on the Issue Date reduced by the amount of any scheduled
amortization payments or mandatory prepayments when actually paid or
permanent reductions thereon,
(6) our Interest Swap Obligations or that of any of our Restricted
Subsidiaries covering our Indebtedness or any of our Restricted
Subsidiaries; provided that any Indebtedness to which any such Interest
Swap Obligations correspond is otherwise permitted to be incurred under
the Indenture; provided, further, that such Interest Swap Obligations
are entered into, in our judgment, to protect us and our Restricted
Subsidiaries from fluctuation in interest rates on their respective
outstanding Indebtedness,
(7) our Indebtedness or any of our Restricted Subsidiaries under Currency
Agreements entered into, in our judgment, to protect us or such
Restricted Subsidiary from foreign currency exchange rates,
(8) intercompany Indebtedness owed by any of our Restricted Subsidiaries to
us or any of our Restricted Subsidiaries or by us to any Restricted
Subsidiary,
(9) our or any or our Restricted Subsidiaries' Acquired Indebtedness to the
extent we could have incurred such Indebtedness in accordance with the
"Limitation on Incurrence of Additional Indebtedness" covenant on the
date such Indebtedness became Acquired Indebtedness; provided that, in
the case of Acquired Indebtedness of our Restricted Subsidiary, such
Acquired Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Person becoming our Restricted
Subsidiary,
(10) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or other similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business;
provided that such Indebtedness is extinguished within five business
days of its incurrence,
72
<PAGE>
(11) any refinancing, modification, replacement, renewal, restatement,
refunding, deferral, extension, substitution, supplement, reissuance or
resale of existing or future Indebtedness, including any additional
Indebtedness incurred to pay interest or premiums required by the
instruments governing such existing or future Indebtedness as in effect
at the time of issuance thereof ("Required Premiums") and fees in
connection therewith; provided that any such event shall not (A) result
in an increase in the aggregate principal amount of our and our
Restricted Subsidiaries' Permitted Indebtedness (except to the extent
such increase is a result of a simultaneous incurrence of additional
Indebtedness (i) to pay Required Premiums and related fees or (ii)
otherwise permitted to be incurred under the Indenture) and (B) create
Indebtedness with a Weighted Average Life to Maturity at the time such
Indebtedness is incurred that is less than the Weighted Average Life to
Maturity at such time of the Indebtedness being refinanced, modified,
replaced, renewed, restated, refunded, deferred, extended, substituted,
supplemented, reissued or resold (except that this subclause (B) will
not apply in the event the Indebtedness being refinanced, modified,
replaced, renewed, restated, refunded, deferred, extended, substituted,
supplemented, reissued or resold was originally incurred in reliance
upon clause (8) or (17) of this definition); provided that none of our
Restricted Subsidiaries may refinance any Indebtedness pursuant to this
clause (11) other than its own Indebtedness,
(12) Indebtedness (including Capitalized Lease Obligations) incurred by us
or any Restricted Subsidiary to finance the purchase, lease or
improvement of property (real or personal) or equipment (whether through
the direct purchase of assets or the Capital Stock of any Person owning
such assets) in an aggregate principal amount outstanding not to exceed
$30 million at the time of any incurrence thereof (which amount shall be
deemed not to include any such Indebtedness incurred in whole or in part
under the New Credit Facility to the extent permitted by clause (3)
above),
(13) the incurrence by a Receivables Entity of Indebtedness in a Qualified
Receivables Transaction that is not recourse to us or any of our
Restricted Subsidiaries (except for Standard Securitization
Undertakings),
(14) Indebtedness incurred by us or any of our Restricted Subsidiaries
constituting reimbursement obligations with respect to letters of credit
issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims
or self-insurance, or other Indebtedness with respect to reimbursement
type obligations regarding workers' compensation claims,
(15) Indebtedness arising from our or a Restricted Subsidiary's agreements
providing for indemnification, adjustment of purchase price, earn out or
other similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or our
Restricted Subsidiary, other than guarantees of Indebtedness incurred by
any Person acquiring all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition,
provided that the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually
received by us and our Restricted Subsidiaries in connection with such
disposition,
(16) obligations in respect of performance and surety bonds and completion
guarantees provided by us or any of our Restricted Subsidiaries in the
ordinary course of business,
(17) Indebtedness consisting of guarantees (x) by us of Indebtedness,
leases and any other obligation or liability permitted to be incurred
under the Indenture by our Restricted Subsidiaries, and (y) subject to
"Limitation on Guarantees by Restricted Subsidiaries," by our Restricted
Subsidiaries of Indebtedness, leases and any other obligation or
liability permitted to be incurred under the Indenture by us or our
other Restricted Subsidiaries, and
(18) our or any Restricted Subsidiary's additional Indebtedness in an
aggregate principal amount not to exceed $20 million at any one time
outstanding (which amount should not be deemed to include any such
Indebtedness incurred in whole or in part under the New Credit Facility
to the extent permitted by clause (3) above).
"Permitted Investments" means
(1) Investments by us or any of our Restricted Subsidiaries in any of our
Restricted Subsidiaries (whether existing on the Issue Date or created
thereafter) and Investments in us by any of our Restricted Subsidiaries;
73
<PAGE>
(2) cash and Cash Equivalents;
(3) Investments existing on the Issue Date;
(4) loans and advances to our and our Restricted Subsidiaries' employees,
officers and directors not in excess of $1 million at any one time
outstanding;
(5) accounts receivable owing to us or any Restricted Subsidiary created or
acquired in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms; provided however, that such
trade terms may include such concessionary trade terms as we or such
Restricted Subsidiary deem reasonable under the circumstances;
(6) Currency Agreements and Interest Swap Obligations entered into by us or
any of our Restricted Subsidiaries for bona fide business reasons and
not for speculative purposes, and otherwise in compliance with the
Indenture;
(7) Investments in securities of trade creditors or customers received
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
(8) guarantees by us or any of our Restricted Subsidiaries of Indebtedness
otherwise permitted to be incurred by us or any of our Restricted
Subsidiaries under the Indenture;
(9) Investments by us or any of our Restricted Subsidiaries in a Person, if
as a result of such Investment
(i) such Person becomes our Restricted Subsidiary or
(ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys all or substantially all of its
assets to, or is liquidated into, our company or our
Restricted Subsidiary;
(10) additional Investments having an aggregate fair market value, taken
together with all other Investments made pursuant to this clause (10)
that are at the time outstanding, not exceeding $5 million at the time
of such Investment (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent
changes in value), plus an amount equal to (i) 100% of the aggregate net
cash proceeds received by us from any Person (other than our Subsidiary)
from the issuance and sale subsequent to the Issue Date of our Qualified
Capital Stock (including Qualified Capital Stock issued upon the
conversion of convertible Indebtedness or in exchange for outstanding
Indebtedness or as capital contributions to us (other than from a
Subsidiary) ) and (ii) without duplication of any amounts included in
clause (10) (i) above, 100% of the aggregate net cash proceeds of any
equity contribution received by us from a holder of our Capital Stock,
that in the case of amounts described in clause (10) (i) or (10) (ii)
are applied by us within 180 days after receipt, to make additional
Permitted Investments under this clause (10) (such additional Permitted
Investments being referred to collectively as "Stock Permitted
Investments");
(11) any Investment by us or our Restricted Subsidiary in a Receivables
Entity or any Investment by a Receivables Entity in any other Person in
connection with a Qualified Receivables Transaction, including
investments of funds held in accounts permitted or required by the
arrangements governing such Qualified Receivables Transaction or any
related Indebtedness; provided that any Investment in a Receivables
Entity is in the form of a Purchase Money Note, contribution of
additional Receivables or an equity interest;
(12) Investments received by us or our Restricted Subsidiaries as
consideration for asset sales, including Asset Sales; provided in the
case of an Asset Sale,
(i) such Investment does not exceed 25% of the consideration
received for such Asset Sale and
(ii) such Asset Sale is otherwise effected in compliance with the
"Limitation on Asset Sales" covenant;
(13) Investments by us or our Restricted Subsidiaries in Joint Ventures in
an aggregate amount not in excess of $25 million; and
74
<PAGE>
(14) that portion of any Investment where the consideration provided by us
is our Capital Stock (other than Disqualified Capital Stock). Any net
cash proceeds that are used by us or any of our Restricted Subsidiaries
to make Stock Permitted Investments pursuant to clause (10) of this
definition shall not be included in subclauses (x) and (y) of clause (3)
of the first paragraph of the "Limitation on Restricted Payments"
covenant.
"Permitted Liens" means the following types of Liens:
(1) Liens securing the Notes;
(2) Liens securing Acquired Indebtedness incurred in reliance on clause (8)
of the definition of Permitted Indebtedness; provided that such Liens do
not extend to or cover any of our or any of our Restricted Subsidiaries'
property or assets other than the property or assets that secured the
Acquired Indebtedness prior to the time such Indebtedness became our or
our Restricted Subsidiary's Acquired Indebtedness;
(3) Liens existing on the Issue Date, together with any Liens securing
Indebtedness incurred in reliance on clause (11) of the definition of
Permitted Indebtedness in order to refinance the Indebtedness secured by
Liens existing on the Issue Date; provided that the Liens securing the
refinancing Indebtedness shall not extend to property other than that
pledged under the Liens securing the Indebtedness being refinanced;
(4) Liens in favor of us on the property or assets, or any proceeds, income
or profit therefrom, of any Restricted Subsidiary; and
(5) other Liens securing Senior Subordinated Indebtedness, provided that
the maximum aggregate amount of outstanding obligations secured thereby
shall not at any time exceed $5 million.
"Person" means an individual, partnership, corporation, unincorporated
organization, trust or joint venture, or a governmental agency or political
subdivision thereof or any other entity.
"Plan" means any employee benefit plan, retirement plan, deferred
compensation plan, restricted stock plan, health, life, disability or other
insurance plan or program, employee stock purchase plan, employee stock
ownership plan, pension plan, stock option plan or similar plan or arrangement
of us or any of our Subsidiaries, or other successor plan thereof, and "Plans"
shall have a correlative meaning.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"Principal" means Thomas H. Lee Company and its Affiliates.
"Productive Assets" means assets (including Capital Stock of a Person that
directly or indirectly owns assets) of a kind used or usable in our and our
Restricted Subsidiaries' businesses as, or related to such business, conducted
on the date of the relevant Asset Sale.
"Purchase Money Note" means a promissory note of a Receivables Entity
evidencing a line of credit, which may be irrevocable, from us or any of our
Subsidiaries in connection with a Qualified Receivables Transaction to a
Receivables Entity, which note (a) shall be repaid from cash available to the
Receivables Entity, other than
(1) amounts required to be established as reserves pursuant to agreements,
(2) amounts paid to investors in respect of interest,
(3) principal and other amounts owing to such investors and amounts owing
to such investors and
(4) amounts paid in connection with the purchase of newly generated
receivables, and
(b) may be subordinated to the payments described in (a).
"Qualified Capital Stock" means any stock that is not Disqualified Capital
Stock.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by us or any of our Subsidiaries pursuant
to which we or any or our Subsidiaries may sell, convey or
75
<PAGE>
otherwise transfer to (a) a Receivables Entity (in the case of a transfer by us
or any of our Subsidiaries) and (b) any other Person (in the case of a transfer
by a Receivables Entity), or may grant a security interest in, any of our or
any of our Subsidiaries' accounts receivable (whether now existing or arising
in the future), and any assets related thereto including, without limitation,
all collateral securing such accounts receivable, all contracts and all
guarantees or other obligations in respect of such accounts receivable,
proceeds of such accounts receivable and other assets which are customarily
transferred or in respect of which security interests are customarily granted
in connection with asset securitization transactions involving accounts
receivable. The grant of a security interest in any of our or any of our
Restricted Subsidiaries' accounts receivable to secure Bank Indebtedness shall
not be deemed a Qualified Receivables Transaction.
"Recapitalization" means the transactions contemplated by the Merger
Agreement, together with the financings therefor.
"Receivables Entity" means any Wholly Owned Subsidiary (or another Person
in which we or any of our Subsidiaries make an Investment and to which we or
any of our Subsidiaries transfer accounts receivable and related assets) that
engages in no activities other than in connection with the financing of
accounts receivable, all proceeds thereof and all rights (contractual or
other), collateral and other assets relating thereto, and any business or
activities incidental or related to such business, and which is designated by
our Board of Directors (as provided below) as a Receivables Entity
(a) no portion of the Indebtedness or any other Obligations (contingent or
otherwise) of which
(i) is guaranteed by us or any of our Subsidiaries (excluding
guarantees of Obligations (other than the principal of, and
interest on, Indebtedness) pursuant to Standard Securitization
Undertakings),
(ii) is recourse to or obligates us or any of our Subsidiaries in
any way other than pursuant to Standard Securitization
Undertakings or
(iii) subjects any of our or any of our Subsidiaries' property or
asset, directly or indirectly, contingently or otherwise, to
the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings,
(b) with which neither we nor any of our Subsidiaries have any material
contract, agreement, arrangement or understanding other than on terms
which the Company reasonably believes to be no less favorable to us or
such Subsidiary than those that might be obtained at the time from
Persons that are not our Affiliates, other than fees payable in the
ordinary course of business in connection with servicing accounts
receivable, and
(c) to which neither we nor any of our Subsidiaries have any obligation to
maintain or preserve such entity's financial condition or cause such
entity to achieve certain levels of operating results other than through
the contribution of additional Receivables, related security and
collections thereto and proceeds of the foregoing.
Any such designation by our Board of Directors shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the resolution of our
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Indebtedness; provided that
if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times constitute the holders of a majority in outstanding
principal amount of such Designated Senior Indebtedness in respect of any
Designated Senior Indebtedness.
"Restricted Subsidiary" of any Person means any Subsidiary of such Person
which at the time of determination is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means any direct or indirect arrangement
with any Person or to which any such Person is a party, providing for the
leasing to us or a Restricted Subsidiary of any property, whether
76
<PAGE>
owned by us or any Restricted Subsidiary at the Issue Date or later acquired,
which has been or is to be sold or transferred by us or such Restricted
Subsidiary to such Person or to any other Person from whom funds have been or
are to be advanced by such Person on the security of such Property.
"Secured Indebtedness" means any of our Indebtedness secured by a Lien.
"Senior Indebtedness" means (i) the Bank Indebtedness and (ii) all of our
Indebtedness, including interest thereon (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating
to us or any of our Restricted Subsidiaries whether or not a claim for
post-filing interest is allowed in such proceedings), whether outstanding on
the Issue Date or thereafter incurred, unless in the instrument creating or
evidencing the same or pursuant to which the same is outstanding it is
expressly provided that such obligations are not superior in right of payment
to the Notes; provided, however, that Senior Indebtedness shall not include
(1) any of our obligations to any of our Subsidiaries,
(2) any liability for Federal, state, local or other taxes owed or owing by
us,
(3) any accounts payable or other liability to trade creditors arising in
the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities),
(4) any of our Indebtedness that is expressly subordinate in right of
payment to any other of our Indebtedness, including any Senior
Subordinated Indebtedness and any Subordinated Obligations,
(5) any obligations with respect to any Capital Stock or
(6) that portion of any Indebtedness incurred in violation of the Indenture
provisions set forth under "Limitation on Incurrence of Additional
Indebtedness" (but, as to any such obligation, no such violation shall
be deemed to exist for purposes of this clause (6) if the holder(s) of
such obligation or their representative and the Trustee shall have
received from us an Officers' Certificate to the effect that the
incurrence of such Indebtedness does not (or, in the case of revolving
credit Indebtedness, that the incurrence of the entire committed amount
thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of the Indenture).
"Senior Subordinated Indebtedness" means the Notes, the Existing Notes and
any of our other Indebtedness that specifically provides that such Indebtedness
is to rank pari passu with the Notes and is not by its express terms
subordinate in right of payment to any of our Indebtedness that is not Senior
Indebtedness.
"Significant Subsidiary" means, as of any date of determination, for any
Person, each Restricted Subsidiary of such Person which
(i) for the most recent fiscal year of such Person accounted for more than
10% of consolidated revenues or consolidated net income of such Person or
(ii) as at the end of such fiscal year, was the owner of more than 10% of
the consolidated assets of such Person.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by us or any of our Subsidiaries which
we reasonably believe to be customary in an accounts receivable transaction.
"Subordinated Obligation" means any of our Indebtedness (whether
outstanding on the Issue Date or thereafter incurred) that is expressly
subordinate in right of payment to the Notes pursuant to a written agreement.
"Subsidiary" means, with respect to any Person,
(i) any corporation of which the outstanding Capital Stock having at least
a majority of the votes entitled to be cast in the election of directors under
ordinary circumstances shall at the time be owned, directly or indirectly, by
such Person or
77
<PAGE>
(ii) any other Person of which at least a majority of the voting interest
under ordinary circumstances is at the time, directly or indirectly, owned by
such Person.
"Subsidiary Guarantor" means any Restricted Subsidiary that executes and
delivers a supplemental Indenture pursuant to the "Limitation on Guarantees by
Restricted Subsidiaries" covenant.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519)
which has become publicly available at least two business days prior to the
date fixed for prepayment (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the then remaining term to February 1, 2003; provided, however, that
if the then remaining term to February 1, 2003 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average
yields of United States Treasury securities for which such yields are given,
except that if the then remaining term to February 1, 2003 is less than one
year, the weekly average yield on actually traded United States Treasury
securities adjusted to a constant maturity of one year shall be sued.
"Unrestricted Subsidiary" of any Person means
(i) any Subsidiary of such Person that at the time of determination shall
be or continue to be designated an Unrestricted Subsidiary by the Board
of Directors of such Person in the manner provided below and
(ii) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary owns any of our Capital Stock, or owns or holds any Lien on any
of our property or the property of any of our other Subsidiaries that is not a
Subsidiary of the Subsidiary to be so designated; provided that (x) we certify
to the Trustee that such designation complies with the "Limitation on
Restricted Payments" covenant and (y) each Subsidiary to be so designated and
each of its Subsidiaries has not at the time of designation, and does not
thereafter, create, incur, issue, assume, guarantee or otherwise become
directly or indirectly liable with respect to any Indebtedness pursuant to
which the lender has recourse to any of our assets or assets of any of our
Restricted Subsidiaries. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary only if (x) immediately after giving
effect to such designation and treating all Indebtedness of such Unrestricted
Subsidiary as being incurred on such date, we are able to incur at least $1.00
of additional Indebtedness (other than Permitted Indebtedness) in compliance
with the "Limitation on Incurrence of Additional Indebtedness" covenant and (y)
immediately before and immediately after giving effect to such designation, no
Default or Event of Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution giving effect to such
designation and an officers' certificate certifying that such designation
complied with the foregoing provisions.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing
(a) the then outstanding aggregate principal amount of such Indebtedness
into
(b) the sum of the total of the products obtained by multiplying
(i) the amount of each then remaining installment, sinking fund, serial
maturity or other required payment of principal, including payment
at final maturity, in respect thereof, by
(ii) the number of years (calculated to the nearest one-twelfth) which
will elapse between such date and the making of such payment.
"Wholly Owned Subsidiary" means any of our Restricted Subsidiaries all the
outstanding voting securities of which (other than directors' qualifying shares
or an immaterial amount of shares required to be owned by other Persons
pursuant to applicable law) are owned, directly or indirectly, by us.
78
<PAGE>
BOOK-ENTRY; DELIVERY AND FORM
The certificates representing the New Notes will be issued in fully
registered form. Except as described below, the New Notes initially will be
represented by a single, global Note, in definitive, fully registered form
without interest coupons (the "Global Note") and will be deposited with the
Trustee as custodian for DTC and registered in the name of Cede & Co. or such
other nominee as DTC may designate.
DTC has advised the Company as follows.
o DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code and a
"clearing agency" registered pursuant to the provision of Section 17A of
the Exchange Act.
o DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants, thereby eliminating the need for physical movement of
certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and certain other organizations.
Indirect access to the DTC system is available to others such as banks,
brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly
("indirect participants").
o Upon the issuance of the Global Note, DTC or its custodian will credit,
on its internal system, the respective principal amounts of the New Notes
represented by such Global Note to the accounts of persons who have
accounts with DTC. Ownership of beneficial interests in the Global Note
will be limited to persons who have accounts with DTC ("participants") or
persons who hold interests through participants. Ownership of beneficial
interests in the Global Note will be shown on, and the transfer of that
ownership will be effected only through, records maintained by DTC or its
nominee, with respect to interests of participants, and the records of
participants, with respect to interests of persons other than
participants.
So long as DTC or its nominee is the registered owner or holder of the
Global Note, DTC or such nominee, as the case may be, will be considered the
sole record owner or holder of the New Notes represented by such Global Note
for all purposes under the Indenture and the New Notes. No beneficial owners of
an interest in the Global Note will be able to transfer that interest except in
accordance with DTC's applicable procedures, in addition to those provided for
under the Indenture. Owners of beneficial interests in the Global Note will not
(1) be entitled to have the New Notes represented by such Global Note
registered in their names, (2) receive or be entitled to receive physical
delivery of certificated Notes in definitive form and (3) be considered to be
the owners or holders of any New Notes under the Global Note. Accordingly, each
person owning a beneficial interest in the Global Note must rely on the
procedures of DTC and, if such person is not a participant, on the procedures
of the participant through which such person owns its interests, to exercise
any right of a holder of New Notes under the Global Note. We understand that
under existing industry practice, in the event an owner of a beneficial
interest in the Global Note desires to take any action that DTC, as the holder
of the Global Note, is entitled to take, DTC would authorize the participants
to take such action, and that the participants would authorize beneficial
owners owning through such participants to take such action or would otherwise
act upon the instructions of beneficial owners owning through them.
Payments of the principal of, premium, if any, and interest on the New
Notes represented by the Global Note will be made to DTC or its nominee, as the
case may be, as the registered owner of the Global Note. Neither we, the
Trustee, nor any paying agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Global Note or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of
principal of, premium, if any, or interest in respect of the Global Note will
credit participants' accounts with payments in amounts proportionate to their
respective beneficial ownership interests in the principal amount of such
Global Note, as shown on the records of DTC or its nominee. We also expect that
payments by participants to owners of beneficial interests in such Global Note
held through such participants will be governed by standing
79
<PAGE>
instructions and customary practices, as is now the case with securities held
for the accounts of customers registered in the names of nominees for such
customers. Such payments will be the responsibility of such participants.
Transfer between participants in DTC will be effected in the ordinary way
in accordance with DTC rules. If a holder requires physical delivery of Notes
in certificated form ("Certificated Notes") for any reason, including to sell
Notes to persons in states which require such delivery of such Notes or to
pledge such Notes, such holder must transfer its interest in the Global Note,
in accordance with the normal procedures of DTC and the procedures set forth in
the Indenture.
Unless and until they are exchanged in whole or in part for certificated
New Notes in definitive form, the Global Note may not be transferred except as
a whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC.
Beneficial owners of New Notes registered in the name of DTC or its
nominee will be entitled to be issued, upon request, New Notes in definitive
certificated form.
DTC has advised us that DTC will take any action permitted to be taken by
a holder of Notes--including the presentation of Notes for exchange as
described below--only at the direction of one or more participants to whose
account the DTC interests in the Global Note are credited, and only in respect
of such portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among participants of DTC, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither we nor the Trustee will have any
responsibility for the performance by DTC or its participants or indirect
participants of their respective obligations under the rules and procedures
governing their operations.
Subject to certain conditions, any person having a beneficial interest in
the Global Note may, upon request to the Trustee, exchange such beneficial
interest for New Notes in the form of Certificated Notes. Upon any such
issuance, the Trustee is required to register such Certificated Notes in the
name of, and cause the same to be delivered to, such person or persons, or the
nominee of any such persons. In addition, if DTC is at any time unwilling or
unable to continue as a depositary for the Global Note, and a successor
depositary is not appointed by us within 90 days, we will issue Certificated
Notes in exchange for the Global Note.
80
<PAGE>
EXCHANGE OFFER; REGISTRATION RIGHTS
We entered into a registration rights agreement with the Initial
Purchasers pursuant to which we agreed, for the benefit of the holders of the
Old Notes, at our cost, to use our best efforts:
o to file with the Commission the Exchange Offer Registration Statement
with respect to the Exchange Offer for the New Notes by February 18, 1999;
o to cause the Exchange Offer Registration Statement to be declared
effective under the Securities Act by May 19, 1999;
o to keep the Exchange Offer Registration Statement effective until the
closing of the Exchange Offer; and
o to cause the Exchange Offer to be consummated by June 18, 1999.
Promptly after the Exchange Offer Registration Statement has been declared
effective, we will offer the New Notes in exchange for surrender of the Old
Notes. We will keep the Exchange Offer open for not less than 30 days, or
longer if required by applicable law, after the date notice of the Exchange
Offer is mailed to the holders of the Old Notes. For each Old Note validly
tendered to us pursuant to the Exchange Offer and not withdrawn by the holder
of such Old Note, such holder will receive a New Note having a principal amount
equal to that of the tendered Old Note. Interest on each New Note will accrue
from the last interest payment date on which interest was paid on the tendered
Old Note in exchange for a New Note or, if no interest has been paid on such
Old Note, from the date of the original issue of the Old Note.
Based on an interpretation of the Securities Act by the staff of the
Commission set forth in several no-action letters to third parties, and subject
to the immediately following sentence, we believe that the New Notes issued
pursuant to the Exchange Offer may be offered for resale, resold and otherwise
transferred by holders of such New Notes without further compliance with the
registration and prospectus delivery provisions of the Securities Act. However,
any purchaser of Old Notes who is an "affiliate" of ours or who intends to
participate in the Exchange Offer for the purpose of distributing the New Notes
(1) will not be able to rely on the interpretation by the staff of the
Commission set forth in the above referenced no-action letters, (2) will not be
able to tender Old Notes in the Exchange Offer and (3) must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Notes, unless such sale or transfer
is made pursuant to an exemption from such requirements.
Each holder of the Old Notes who wishes to exchange Old Notes for New
Notes in the Exchange Offer will be required to make certain representations,
including that
o it is neither our affiliate nor a broker-dealer tendering Notes acquired
directly from us for its own account;
o any New Notes to be received by it were acquired in the ordinary course
of its business; and
o at the time of commencement of the Exchange Offer, it has no arrangement
with any person to participate in the distribution (within the meaning of
the Securities Act) of the New Notes.
In addition, in connection with any resales of New Notes, any
participating broker-dealer who acquired the New Notes for its own account as a
result of market-making activities or other trading activities must deliver a
prospectus meeting the requirements of the Securities Act. The Commission has
taken the position that participating broker-dealers may fulfill their
prospectus delivery requirements with respect to the New Notes, other than a
resale of an unsold allotment from the original sale of the Old Notes, with the
prospectus contained in the Exchange Offer Registration Statement. Under the
Registration Rights Agreement, we are required to allow participating
broker-dealers and other persons, if any, subject to similar prospectus
delivery requirements to use the prospectus contained in the Exchange Offer
Registration Statement in connection with the resale of such New Notes.
In the event that (1) any changes in law or the applicable interpretations
of the staff of the Commission do not permit us to effect the Exchange Offer,
or (2) if for any other reason the Exchange Offer registration statement is not
declared effective by May 19, 1999, or (3) the Exchange Offer is not
consummated by
81
<PAGE>
June 18, 1999, or (4) upon the request of any of the Initial Purchasers, or (5)
if a holder of the Old Notes is not permitted by applicable law to participate
in the Exchange Offer or elects to participate in the Exchange Offer but does
not receive fully tradable New Notes pursuant to the Exchange Offer, we will,
in lieu of effecting the registration of the New Notes pursuant to the Exchange
Offer Registration Statement and at our cost:
(a) as promptly as practicable, file with the Commission the Shelf
Registration Statement covering resales of the Transfer Restricted Notes (as
defined in this prospectus),
(b) use our best efforts to cause the Shelf Registration Statement to be
declared effective under the Securities Act by May 19, 1999, or within 30 days
of the request by any Initial Purchaser, and
(c) use our best efforts to keep effective the Shelf Registration
Statement for a period of two years after its effective date, or for such
shorter period that will terminate when all of the Notes covered by the Shelf
Registration Statement have been sold pursuant thereto or cease to be
outstanding.
We will, in the event of the filing of a Shelf Registration Statement, (1)
provide to each holder of the Notes copies of the prospectus which is a part of
the Shelf Registration Statement, (2) notify each such holder when the Shelf
Registration Statement for the Notes has become effective and (3) take certain
other actions as are required to permit unrestricted resales of the Notes. A
holder of Notes who sells such Notes pursuant to the Shelf Registration
Statement generally will be (1) required to be named as a selling
securityholder in the related prospectus, (2) required to deliver the
prospectus to purchasers, (3) subject to certain of the civil liability
provisions under the Securities Act in connection with such sales and (4) bound
by the provisions of the Registration Rights Agreement which are applicable to
such a holder, including certain indemnification obligations.
For purposes of the foregoing, "Transfer Restricted Notes" means each Old
Note until (1) the date on which such Note has been exchanged for a freely
transferable New Note in the Exchange Offer, (2) the date on which such Note
has been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (3) the date on which such
Note is distributed to the public pursuant to Rule 144 under the Securities Act
or is saleable pursuant to Rule 144(k).
In the event that (1) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to February 18, 1999, (2) the Exchange
Offer Registration Statement is not declared effective on or prior to May 19,
1999 or (3) the Exchange Offer is not consummated on or prior to June 18, 1999
or a Shelf Registration Statement is not declared effective on or prior to May
19, 1999 (or, if a Shelf Registration Statement is required to be filed because
of the request by any Initial Purchaser, 30 days following the request by any
such Initial Purchaser that we file the Shelf Registration Statement) (each
such event referred to in clauses (1) through (3) above, a "Registration
Default"), we will generally be obligated to pay liquidated damages to each
holder of Transfer Restricted Securities, during the period of such
Registration Default, in an amount equal to $0.192 per week per $1,000 amount
of the Old Notes constituting Transfer Restricted Securities held by such
holder until (a) the applicable registration statement is filed or declared
effective, (b) the Exchange Offer is consummated or (c) the Shelf Registration
Statement becomes effective, as the case may be. All accrued liquidated damages
shall be paid to holders in the same manner as interest payments on the Old
Notes on semi-annual payment dates which correspond to interest payment dates
for the Old Notes. Following the cure of all Registration Defaults, the accrual
of liquidated damages will cease.
Interest on each New Note will accrue from November 20, 1998 or from the
most recent interest payment date to which interest was paid on the Old Note
surrendered in exchange for the New Note or on the New Note, as the case may
be. The New Notes will bear interest at 9% per annum, except that, if any
interest accrues on the New Notes in respect of any period prior to their
issuance, such interest will accrue at the rate or rates borne by the Notes
from time to time during such period.
The summary in this prospectus of certain provisions of the Registration
Rights Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the
Registration Rights Agreement, which is filed as an exhibit to the Registration
Statement to which this prospectus forms a part.
82
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain United States federal
income tax consequences of the exchange of Old Notes for New Notes pursuant to
the Exchange Offer and the ownership and disposition of the New Notes. This
summary applies only to a beneficial owner of an Old Note who acquired such Old
Note at the initial offering for the original offering price thereof and who
acquires a New Note pursuant to the Exchange Offer. This discussion is based on
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
Treasury regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as in effect on the date hereof and all of which
are subject to change, possibly with retroactive effect. This discussion does
not address the tax consequences to subsequent purchasers of New Notes and is
limited to holders who will hold the New Notes as capital assets. Furthermore,
this discussion does not address all aspects of United States federal income
taxation that may be applicable to holders in light of their particular
circumstances, or to holders subject to special treatment under United States
federal income tax law (including, without limitation, certain financial
institutions, insurance companies, tax-exempt entities, dealers in securities,
persons who hold Old Notes or will hold New Notes as part of a straddle, hedge,
conversion transaction or other integrated investment or persons whose
functional currency is not the United States dollar).
Each holder should consult its tax advisor as to the particular tax
consequences to such holder of the exchange of Old Notes for New Notes pursuant
to the Exchange Offer and the ownership and disposition of the New Notes,
including the applicability of any federal, state, local or foreign tax laws,
any changes in applicable tax laws and any pending or proposed legislation or
regulations.
United States Taxation of United States Holders
As used herein, (A) the term "United States Holder" means, with respect to
an Old Note or a New Note, a beneficial owner of such Note that is, for United
States federal income tax purposes, (1) a citizen or resident of the United
States, (2) a corporation or partnership created or organized in or under the
laws of the United States or of any political subdivision thereof, (3) an
estate the income of which is subject to United States federal income taxation
regardless of its source and (4) a trust if a United States court is able to
exercise primary supervision over the administration of such trust and one or
more United States persons have the authority to control all substantial
decisions of such trust and (B) the term "Non-U.S. Holder" means a beneficial
owner of an Old Note or a New Note that is not a United States Holder.
Exchange Offer
The exchange of an Old Note for a New Note pursuant to the Exchange Offer
will not constitute a "significant modification" of the Old Note for United
States federal income tax purposes and, accordingly, the New Note received will
be treated as a continuation of the Old Note in the hands of such holder. As a
result, there will be no United States federal income tax consequences to a
United States Holder who exchanges an Old Note for a New Note pursuant to the
Exchange Offer and any such holder will have the same adjusted tax basis and
holding period in the New Note as it had in the Old Note immediately before the
exchange.
Payments of Interest
Stated interest payable on the New Notes generally will be included in the
gross income of a United States Holder as ordinary interest income at the time
accrued or received, in accordance with such United States Holder's method of
accounting for United States federal income tax purposes.
Original Issue Discount
For United States federal income tax purposes, the New Notes will be
issued with original issue discount. Accordingly, a United States Holder
(regardless of whether such holder is a cash or accrual basis taxpayer) will be
required to include original issue discount in gross income as it accrues, in
accordance with a constant yield method over the period the New Note is held
(in addition to the inclusion of stated interest, as discussed above).
The amount of original issue discount that will accrue in the aggregate
with respect to a New Note will be the excess of the stated redemption price at
maturity of such New Note over its issue price. The stated
83
<PAGE>
redemption price at maturity of a New Note generally will equal the sum of the
principal amount of such New Note and all payments required to be made
thereunder, other than payments of "qualified stated interest" (defined
generally as stated interest that is unconditionally payable at least annually
at a single fixed rate that appropriately takes into account the length of
intervals between payments). Stated interest payable on the New Notes will
constitute qualified stated interest. The issue price of a New Note generally
will equal $965 (per U.S. $1,000 principal amount).
A United States Holder's adjusted tax basis in a New Note will be
increased by the amount of any original issue discount included in such
holder's gross income.
Liquidated Damages
The Company intends to take the position that the payment of any
liquidated damages is an "incidental contingency" within the meaning of
Treasury regulations applicable to debt instruments that provide for one or
more contingent payments and, accordingly, a United States Holder generally
should include a payment of liquidated damages in income as ordinary income
when such payment is received. Such position is binding on a United States
Holder unless such holder discloses to the Internal Revenue Service (the "IRS")
that it is taking a contrary position.
Disposition of the New Notes
Upon the sale, exchange, retirement at maturity or other taxable
disposition of a New Note (collectively, a "disposition"), a United States
Holder generally will recognize capital gain or loss equal to the difference
between the amount realized by such holder (except to the extent such amount is
attributable to accrued interest, which will be treated as ordinary interest
income) and such holder's adjusted tax basis in the New Note. Such capital gain
or loss will be long-term capital gain or loss if such United States Holder's
holding period for the New Note exceeds one year at the time of the
disposition.
United States Taxation of Non-U.S. Holders
Payments of Interest
In general, payments of interest (including any original issue discount)
received or accrued by a Non-U.S. Holder will not be subject to United States
federal income or withholding tax, provided that (1)(a) the Non-U.S. Holder
does not actually or constructively own 10% or more of the total combined
voting power of all classes of stock of the Company entitled to vote, (b) the
Non-U.S. Holder is not a controlled foreign corporation that is related to the
Company actually or constructively through stock ownership, and (c) the
beneficial owner of the New Note, under penalty of perjury, either directly or
through a financial institution which holds the New Note on behalf of the
Non-U.S. Holder and holds customers' securities in the ordinary course of its
trade or business, provides the Company or its agent with the beneficial
owner's name and address and certifies, under penalty of perjury, that it is
not a United States Holder, (2) the interest received on the New Note is
effectively connected with the conduct by the Non-U.S. Holder of a trade or
business within the United States and the Non-U.S. Holder complies with certain
reporting requirements; or (3) the Non-U.S. Holder is entitled to the benefits
of an income tax treaty under which the interest is exempt from United States
withholding tax and the Non-U.S. Holder complies with certain reporting
requirements. Payments of interest not exempt from United States federal
withholding tax as described above will be subject to such withholding tax at
the rate of 30% (subject to reduction under an applicable income tax treaty).
Disposition of the New Notes
A Non-U.S. Holder generally will not be subject to United States federal
income tax (and generally no tax will be withheld) with respect to gain
realized on the disposition of a New Note, unless (1) the gain is effectively
connected with a United States trade or business conducted by the Non-U.S.
Holder or (2) the Non-U.S. Holder is an individual who is present in the United
States for 183 or more days during the taxable year of the disposition and
certain other requirements are satisfied. In addition, an exchange of an Old
Note for a New Note pursuant to the Exchange Offer will not constitute a
taxable exchange of the Old Note for Non-U.S. Holders. See "--United States
Taxation of United States Holders--Exchange Offer."
Effectively Connected Income
If interest and other payments received by a Non-U.S. Holder with respect
to the New Notes (including proceeds from the disposition of the New Notes) are
effectively connected with the conduct by the Non-U.S. Holder of a trade or
business within the United States (or the Non-U.S. Holder is otherwise subject
to United
84
<PAGE>
States federal income taxation on a net basis with respect to such holder's
ownership of the New Notes), such Non-U.S. Holder will generally be subject to
the rules described above under "United States Taxation of United States
Holders" (subject to any modification provided under an applicable income tax
treaty). Such Non-U.S. Holder may also be subject to the "branch profits tax"
if such holder is a corporation.
Backup Withholding and Information Reporting
Certain non-corporate United States Holders may be subject to backup
withholding at a rate of 31% on payments of principal, premium and interest on,
and the proceeds of the disposition of, the New Notes. In general, backup
withholding will be imposed only if the United States Holder (1) fails to
furnish its taxpayer identification number ("TIN"), which, for an individual,
would be his or her Social Security number, (2) furnishes an incorrect TIN, (3)
is notified by the IRS that it has failed to report payments of interest or
dividends or (4) under certain circumstances, fails to certify, under penalty
of perjury, that it has furnished a correct TIN and has been notified by the
IRS that it is subject to backup withholding tax for failure to report interest
or dividend payments. In addition, such payments of principal and interest to
United States Holders will generally be subject to information reporting.
United States Holders should consult their tax advisors regarding their
qualification for exemption from backup withholding and the procedure for
obtaining such an exemption, if applicable.
Backup withholding generally will not apply to payments made to a Non-U.S.
Holder of a New Note who provides the certification described under "United
States Taxation of Non-U.S. Holders--Payments of Interest" or otherwise
establishes an exemption from backup withholding. Payments by a United States
office of a broker of the proceeds of a disposition of the New Notes generally
will be subject to backup withholding at a rate of 31% unless the Non-U.S.
Holder certifies it is a Non-U.S. Holder under penalty of perjury or otherwise
establishes an exemption.
The amount of any backup withholding imposed on a payment to a holder of a
New Note will be allowed as a credit against such holder's United States
federal income tax liability and may entitle such holder to a refund, provided
that the required information is furnished to the IRS.
New Treasury Regulations
New final Treasury regulations governing information reporting and the
certification procedures regarding withholding and backup withholding on
certain amounts paid to Non-U.S. Holders after December 31, 1999, generally
would not alter the treatment of Non-U.S. Holders described above. The new
Treasury regulations would alter the procedures for claiming the benefits of an
income tax treaty and may change the certification procedures relating to the
receipt by intermediaries of payments on behalf of a beneficial owner of a New
Note. Holders should consult their tax advisors concerning the effect, if any,
of such new Treasury regulations on an investment in the New Notes.
85
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives New Notes for its own account pursuant to
the Exchange Offer must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. This prospectus, as it may be
amended or supplemented from time to time, may be used by a broker-dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. For a period of 180 days after the Expiration Date, we will
make this prospectus, as amended or supplemented, available to any
broker-dealer for use in connection with any such resale. In addition, until
, 1999--90 days from the date of this prospectus--all dealers effecting
transactions in the New Notes may be required to deliver a prospectus.
We will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions (1) in the over-the-counter market, (2) in negotiated
transactions, (3) through the writing of options on the New Notes or (4) a
combination of such methods of resale, (a) at market prices prevailing at the
time of resale, (b) at prices related to such prevailing market prices or (c)
negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer or the purchasers of any
such New Notes. Any broker-dealer that resells New Notes that were received by
it for its own account pursuant to the Exchange Offer, and any broker or dealer
that participates in a distribution of such New Notes, may be deemed to be an
"underwriter" within the meaning of the Securities Act. Any profit on any such
resale of New Notes and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, we will promptly send
additional copies of this prospectus and any amendment or supplement to this
prospectus to any broker-dealer that requests such documents in the Letter of
Transmittal. We have agreed to pay all expenses incident to the Exchange Offer,
including the expenses of one counsel for the holders of the Notes, other than
commissions or concessions of any brokers or dealers. We also will indemnify
the holders of the Notes, including any broker-dealers, against certain
liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the New Notes offered by this prospectus will be passed
upon for us by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New York.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from Fisher's Annual Report on Form 10-K for the year ended December
31, 1997 have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
86
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
We have not authorized any dealer, salesperson or other person to give any
information or represent anything not contained in this prospectus. You must
not rely on unauthorized information. This prospectus does not offer to sell or
buy any shares in any jurisdiction where it is unlawful. The information in
this prospectus is current as of , 1999. However, you should realize that
our affairs may have changed since the date of this prospectus.
------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Forward-Looking Statements ......................... i
Available Information .............................. i
Incorporation of Certain Documents by
Reference ....................................... ii
Summary ............................................ 1
Risk Factors ....................................... 13
Use of Proceeds .................................... 20
Capitalization ..................................... 21
Management's Discussion and Analysis of
Financial Condition and Results of
Operations ...................................... 22
The Exchange Offer ................................. 33
Management ......................................... 40
Security Ownership of Certain Beneficial
Owners and Management ........................... 43
Description of Other Indebtedness .................. 45
Description of the Notes ........................... 48
Book-Entry; Delivery and Form ...................... 79
Exchange Offer; Registration Rights ................ 81
Certain Federal Income Tax Considerations .......... 83
Plan of Distribution ............................... 86
Legal Matters ...................................... 86
Experts ............................................ 86
</TABLE>
$200,000,000
GRAPHIC LOGO
9% Senior Subordinated
Notes due 2008
-------------------------------------------------
PROSPECTUS
-------------------------------------------------
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law authorizes and
empowers the Registrant to indemnify the directors, officers, employees and
agents of the Registrant against liabilities incurred in connection with, and
related expenses resulting from, any claim, action or suit brought against any
such person as a result of his relationship with the Registrant, provided that
such persons acted in good faith and in a manner such person reasonably
believed to be in, and not opposed to, the best interests of the Registrant in
connection with the acts or events on which such claim, action or suit is
based. The finding of either civil or criminal liability on the part of such
persons in connection with such acts or events is not necessarily determinative
of the question of whether such persons have met the required standard of
conduct and are, accordingly, entitled to be indemnified. The foregoing
statements are subject to the detailed provisions of Section 145 of the General
Corporation Law of the State of Delaware.
The Registrant's Restated Certificate of Incorporation provides that each
person who at any time is or shall have been a director or officer of the
Registrant, or is or shall have been serving another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise in any capacity
at the request of the Registrant, and his heirs, executors and administrators,
shall be indemnified by the Company in accordance with and to the full extent
permitted by the General Corporation Law of the State of Delaware. Section 15
of the Registrant's Restated Certificate of Incorporation facilitates
enforcement of indemnification rights by establishing the indemnification right
as a contract right pursuant to which the person entitled thereto may bring
suit as if the indemnification provisions of the Restated Certificate of
Incorporation were set forth in a separate written contract between the
Registrant and the director or officer.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits. The following is a list of Exhibits to this Registration
Statement:
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- ------------
<S> <C>
3.1 -- Certificate of Designation of Series A Junior Participating Preferred Stock, dated
June 9, 1997. (1)
3.2 -- Restated Certificate of Incorporation of the Company. (2)
3.3 -- Bylaws of the Company. (3)
4.1 -- Indenture dated as of November 20, 1998 between Fisher Scientific International Inc. and State
Street Bank and Trust Company N.A.*
4.2 -- Senior Debt Securities Indenture dated as of December 18, 1995 between the Company and
Mellon Bank, N.A., as Trustee. (2)
4.3 -- Certificate of Designation of Series A Junior Participating Preferred Stock, dated June 9, 1997
(see Exhibit 3.1).
4.4 -- Rights Agreement dated as of June 9, 1997, between the Company and ChaseMellon
Shareholder Services L.L.P., as Rights Agent, which includes the form of Right Certificate as
Exhibit A and the Summary of Rights to Purchase Common Shares as Exhibit B. (4)
4.5 -- First Amendment to Rights Agreement, dated as of August 7, 1997, between the Company and
ChaseMellon Shareholder Services, L.L.C. (5)
4.6 -- Commitment Letters in connection with the Recapitalization. (6)
4.7 -- Specimen Certificate of Common Stock, $.01 par value per share, of the Company. (7)
5.1 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding legality of securities being
registered.*
10.1 -- Registration Rights Agreement dated as of November 20, 1998 among the Company and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation.*
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.2 -- Second Amended and Restated Agreement and Plan of Merger, dated as of November 14, 1997,
by and between the Company and FSI Merger Corp. (6)
10.3 -- Investors' Agreement dated January 21, 1998 among (i) Thomas H. Lee Equity Fund III, L.P.,
certain individuals associated with THL, THL-CCI Limited Partnership, THL Foreign Fund III,
L.P., and THL FSI Equity Investors, L.P. (collectively, the "THL Entities"), (ii) DLJ Merchant
Banking Partners II, L.P., DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P.,
DLJMB Funding II, Inc., DLJ Merchant Banking Partners II-A, L.P., DLJ Diversified Partners-
A, L.P., DLJ Millenium Partners, L.P., DLJ Millenium Partners, A, L.P., UK Investment Plan
1997 Partners DLJ EAB Partners, L.P., DLJESC II, L.P. and DLJ First ESC, L.P. (collectively,
the "DLJ Entities"), (iii) Chase Equity Associates, L.P. ("Chase Equity") and (iv) Merrill Lynch
KECALP L.P. 1997, KECALP Inc., and ML IBK Positions, Inc. (1)
10.4 -- Credit Agreement dated as of January 21, 1998 among the Company, certain subsidiaries of the
Company, various lending institutions, The Chase Manhattan Bank, as Administrative Agent,
The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Manhattan
International Limited, as U.K. Administrative Agent, Merrill Lynch Capital Corporation, as
Syndication Agent, and DLJ Capital Funding, Inc., as Documentation Agent. (8)
10.5 -- Amended and Restated Employment Agreement, dated January 21, 1998 between the Company and
Paul M. Meister. (9)
10.6 -- Amended and Restated Employment Agreement, dated January 21, 1998 between the Company and
Paul M. Montrone. (9)
10.7 -- Rights Agreement dated as of June 9, 1997, between the Company and ChaseMellon
Shareholder Services L.L.P., as Rights Agent, which includes the form of Right Certificate as
Exhibit A and the Summary of Rights to Purchase Common Shares as Exhibit B (see Exhibit 4.4).
10.8 -- First Amendment to Rights Agreement, dated as of August 7, 1997, between the Company and
ChaseMellon Shareholder Services, L.L.C. (see Exhibit 4.4).
10.9 -- Second Amended and Restated Agreement and Plan of Merger, dated as of November 14, 1997,
by and between the Company and FSI Merger Corp. (see Exhibit 10.1).
10.10 -- Commitment Letters in connection with the Transaction. (6)
10.11 -- Restated Environmental Matters Agreement, dated as of February 26, 1986, as amended and
restated as of July 28, 1989, among Allied-Signal Inc., The Henley Group, Inc., The
Wheelabrator Group Inc., New Hampshire Oak, Inc. and Fisher Scientific Group Inc. (7)
10.12 -- Amended and Restated Credit Agreement dated as of February 12, 1996, amending and
restating the Term Loan and Revolving Credit Agreement, dated as of October 16, 1995 among
Fisher Scientific International Inc., Certain Commercial Lending Institutions and Toronto
Dominion (Texas), Inc. (10)
10.13 -- Amendment No. 1 dated February 12, 1996 to the Term Loan Agreement, dated October 16,
1995 among Fisher Scientific International Inc., Fisher Scientific U.K. Limited, Certain
Commercial Lending Institutions and The Toronto Dominion Bank. (10)
10.14 -- 1991 Stock Plan for Executive Employees of Fisher Scientific International Inc. and its
Subsidiaries. (11)
10.15 -- Fisher Scientific International Inc. Retirement Plan. (3)
10.16 -- Fisher Scientific International Inc. Savings and Profit Sharing Plan. (3)
10.17 -- Fisher Scientific International Inc. Incentive Compensation Plan. (10)
10.18 -- Fisher Scientific International Inc. Deferred Compensation Plan for Non-Employee
Directors. (3)
10.19 -- Retirement Plan for Non-Employee Directors of Fisher Scientific International Inc. (3)
10.20 -- Fisher Scientific International Inc. Long-Term Incentive Plan. (11)
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
10.21 -- Fisher Scientific International Inc. 1998 Equity and Incentive Plan. (1)
10.22 -- Stock Purchase Agreement, dated November 9, 1998, among Fisher Scientific International Inc.,
Fisher Scientific Holdings France S.A., and Capiac, Sapaca 97, Sapcar 97, Sappi 97, Sappef 97,
Pierre Block, Anne-Catherine Block-Derriey, Pierre-Francois Block, Caroline Block and Marthe Block.*
10.23 -- Letter Agreement, dated December 2, 1998, between Fisher Scientific International Inc. and Pierre
Block, on behalf of the sellers and sellers' guarantors named in the Stock Purchase Agreement
listed above as Exhibit 10.22, amending the Stock Purchase Agreement.*
12.1 -- Statements re: Computation of Ratios.*
21.1 -- List of Subsidiaries of the Company. (12)
23.1 -- Consent of Deloitte & Touche LLP.*
23.2 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP.--(included in Exhibit 5.1).
24.1 -- Powers of attorney (included on signature page to registration statement).*
25.1 -- Statement of Eligibility under the Trust Indenture Act of 1939 of State Street Bank and Trust
Company on Form T-1.*
99.1 -- Form of Letter of Transmittal.*
99.2 -- Form of Notice of Guaranteed Delivery.*
99.3 -- Form of Letter to Clients.*
99.4 -- Form of Letter to Brokers, Dealers, Trust Companies and Other Nominees.*
</TABLE>
- ------------
* Filed herewith
(1) Included as an exhibit to the Company's Registration Statement on Form S-4
(Registration No. 333-42777) filed with the Securities and Exchange
Commission on December 19, 1997 and amended on February 2, 1998.
(2) Included as an exhibit to the Company's Registration Statement on Form S-3
(Registration No. 3-99884) filed with the Securities and Exchange
Commission on November 30, 1995 and incorporated herein by reference.
(3) Included in an exhibit to the Company's Form 10-K for the year ended
December 31, 1992, filed with the Securities and Exchange Commission on
March 24, 1993 and incorporated herein by reference.
(4) Included as an exhibit to the Company's Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on June 9, 1997 and
incorporated herein by reference.
(5) Included as an exhibit to the Company's Current Report on Form 8-K dated
August 7, 1997, filed with the Securities and Exchange Commission on
August 8, 1997 and incorporated herein by reference.
(6) Included as an Annex to the proxy statement/prospectus included in the
Company's Registration Statement on Form S-4 (Registration No. 333-42777)
filed with the Securities and Exchange Commission on December 19, 1997 and
amended on February 2, 1998.
(7) Included as an exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-43505) filed with the Securities and Exchange
Commission on October 23, 1991 and incorporated herein by reference.
(8) Included as an exhibit to the Company's Current Report on Form 8-K
(Registration No. 001-10920) filed with the Securities and Exchange
Commission on February 5, 1998.
(9) Included as an exhibit to the Company's Form 10-K/A for the year ended
December 31, 1997, filed with the Securities and Exchange Commission on
April 17, 1998 and incorporated herein by reference.
(10) Included in an exhibit to the Company's Form 10-K for the year ended
December 31, 1995, filed with the Securities and Exchange Commission on
March 21, 1996 and incorporated herein by reference.
(11) Included in an exhibit to the Company's Form 10-K for the year ended
December 31, 1994, filed with the Securities and Exchange Commission on
March 24, 1995 and incorporated herein by reference.
(12) Included as an exhibit to the Company's Form 10-K for the year ended
December 31, 1996, filed with the Securities and Exchange Commission on
March 27, 1997 and incorporated herein by reference.
II-3
<PAGE>
Item 22. Undertakings.
The undersigned Registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
(4) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions referred to in Item 20 of
this registration statement, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore, unen-
forceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(6) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means. This
includes information contained in documents filed subsequent to the effective
date of the registration statement through the date of responding to the
request.
(7) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement when it
became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Hampton,
State of New Hampshire on the 28th day of January, 1999.
Fisher Scientific International Inc.
By: /s/ Todd M. DuChene
-------------------------------------
Todd M. DuChene
Vice President, General Counsel
and Secretary
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Todd M.
DuChene, Robert J. Gagalis and Paul M. Meister, and each of them individually
without the others, as his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and
necessary fully to all intents and purposes as he might or could do in person
thereby ratifying and confirming all that said attorney-in-fact and agent, or
his substitute, may lawfully do or cause to be done by the virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed on its behalf by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------- ------------------------------------- -----------------
<S> <C> <C>
/s/ Paul M. Montrone Chairman of the Board, January 28, 1999
- ----------------------------- Chief Executive Officer and Director
Paul M. Montrone (principal executive officer)
/s/ Paul M. Meister Vice Chairman of the Board, January 28, 1999
- ----------------------------- Executive Vice President,
Paul M. Meister Chief Financial Officer
and Director (principal financial
and accounting officer)
/s/ Mitchell J. Blutt Director January 28, 1999
- -----------------------------
Mitchell J. Blutt
/s/ Robert A. Day Director January 28, 1999
- -----------------------------
Robert A. Day
/s/ Michael D. Dingman Director January 28, 1999
- -----------------------------
Michael D. Dingman
/s/ Anthony J. DiNovi Director January 28, 1999
- -----------------------------
Anthony J. DiNovi
/s/ David V. Harkins Director January 28, 1999
- -----------------------------
David V. Harkins
/s/ Scott M. Sperling Director January 28, 1999
- -----------------------------
Scott M. Sperling
/s/ Kent R. Weldon Director January 28, 1999
- -----------------------------
Kent R. Weldon
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- --------- -----------
<S> <C>
3.1 -- Certificate of Designation of Series A Junior Participating Preferred Stock, dated
June 9, 1997. (1)
3.2 -- Restated Certificate of Incorporation of the Company. (2)
3.3 -- Bylaws of the Company. (3)
4.1 -- Indenture dated as of November 20, 1998 between Fisher Scientific International Inc. and State
Street Bank and Trust Company N.A.*
4.2 -- Senior Debt Securities Indenture dated as of December 18, 1995 between the Company and
Mellon Bank, N.A., as Trustee. (2)
4.3 -- Certificate of Designation of Series A Junior Participating Preferred Stock, dated June 9, 1997
(see Exhibit 3.1).
4.4 -- Rights Agreement dated as of June 9, 1997, between the Company and ChaseMellon
Shareholder Services L.L.P., as Rights Agent, which includes the form of Right Certificate as
Exhibit A and the Summary of Rights to Purchase Common Shares as Exhibit B. (4)
4.5 -- First Amendment to Rights Agreement, dated as of August 7, 1997, between the Company and
ChaseMellon Shareholder Services, L.L.C. (5)
4.6 -- Commitment Letters in connection with the Recapitalization. (6)
4.7 -- Specimen Certificate of Common Stock, $.01 par value per share, of the Company. (7)
5.1 -- Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding legality of securities being
registered.*
10.1 -- Registration Rights Agreement dated as of November 20, 1998 among the Company and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc. and Donaldson,
Lufkin & Jenrette Securities Corporation.*
10.2 -- Second Amended and Restated Agreement and Plan of Merger, dated as of November 14, 1997,
by and between the Company and FSI Merger Corp. (6)
10.3 -- Investors' Agreement dated January 21, 1998 among (i) Thomas H. Lee Equity Fund III, L.P.,
certain individuals associated with THL, THL-CCI Limited Partnership, THL Foreign Fund III,
L.P., and THL FSI Equity Investors, L.P. (collectively, the "THL Entities"), (ii) DLJ Merchant
Banking Partners II, L.P., DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P.,
DLJMB Funding II, Inc., DLJ Merchant Banking Partners II-A, L.P., DLJ Diversified Partners-
A, L.P., DLJ Millenium Partners, L.P., DLJ Millenium Partners, A, L.P., UK Investment Plan
1997 Partners DLJ EAB Partners, L.P., DLJESC II, L.P. and DLJ First ESC, L.P. (collectively,
the "DLJ Entities"), (iii) Chase Equity Associates, L.P. ("Chase Equity") and (iv) Merrill Lynch
KECALP L.P. 1997, KECALP Inc., and ML IBK Positions, Inc. (1)
10.4 -- Credit Agreement dated as of January 21, 1998 among the Company, certain subsidiaries of the
Company, various lending institutions, The Chase Manhattan Bank, as Administrative Agent,
The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Manhattan
International Limited, as U.K. Administrative Agent, Merrill Lynch Capital Corporation, as
Syndication Agent, and DLJ Capital Funding, Inc., as Documentation Agent. (8)
10.5 -- Amended and Restated Employment Agreement, dated January 21, 1998 between the Company and
Paul M. Meister. (9)
10.6 -- Amended and Restated Employment Agreement, dated January 21, 1998 between the Company and
Paul M. Montrone. (9)
10.7 -- Rights Agreement dated as of June 9, 1997, between the Company and ChaseMellon
Shareholder Services L.L.P., as Rights Agent, which includes the form of Right Certificate as
Exhibit A and the Summary of Rights to Purchase Common Shares as Exhibit B (see Exhibit 4.4).
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
10.8 -- First Amendment to Rights Agreement, dated as of August 7, 1997, between the Company and
ChaseMellon Shareholder Services, L.L.C. (see Exhibit 4.4).
10.9 -- Second Amended and Restated Agreement and Plan of Merger, dated as of November 14, 1997,
by and between the Company and FSI Merger Corp. (see Exhibit 10.1).
10.10 -- Commitment Letters in connection with the Transaction. (6)
10.11 -- Restated Environmental Matters Agreement, dated as of February 26, 1986, as amended and
restated as of July 28, 1989, among Allied-Signal Inc., The Henley Group, Inc., The
Wheelabrator Group Inc., New Hampshire Oak, Inc. and Fisher Scientific Group Inc. (7)
10.12 -- Amended and Restated Credit Agreement dated as of February 12, 1996, amending and
restating the Term Loan and Revolving Credit Agreement, dated as of October 16, 1995 among
Fisher Scientific International Inc., Certain Commercial Lending Institutions and Toronto
Dominion (Texas), Inc. (10)
10.13 -- Amendment No. 1 dated February 12, 1996 to the Term Loan Agreement, dated October 16,
1995 among Fisher Scientific International Inc., Fisher Scientific U.K. Limited, Certain
Commercial Lending Institutions and The Toronto Dominion Bank. (10)
10.14 -- 1991 Stock Plan for Executive Employees of Fisher Scientific International Inc. and its
Subsidiaries. (11)
10.15 -- Fisher Scientific International Inc. Retirement Plan. (3)
10.16 -- Fisher Scientific International Inc. Savings and Profit Sharing Plan. (3)
10.17 -- Fisher Scientific International Inc. Incentive Compensation Plan. (10)
10.18 -- Fisher Scientific International Inc. Deferred Compensation Plan for Non-Employee
Directors. (3)
10.19 -- Retirement Plan for Non-Employee Directors of Fisher Scientific International Inc. (3)
10.20 -- Fisher Scientific International Inc. Long-Term Incentive Plan. (11)
10.21 -- Fisher Scientific International Inc. 1998 Equity and Incentive Plan. (1)
10.22 -- Stock Purchase Agreement, dated November 9, 1998, among Fisher Scientific International Inc.,
Fisher Scientific Holdings France S.A., and Capiac, Sapaca 97, Sapcar 97, Sappi 97, Sappef 97,
Pierre Block, Anne-Catherine Block-Derriey, Pierre-Francois Block, Caroline Block and Marthe Block.*
10.23 -- Letter Agreement, dated December 2, 1998, between Fisher Scientific International Inc. and Pierre
Block, on behalf of the sellers and sellers' guarantors named in the Stock Purchase Agreement listed
above as Exhibit 10.22, amending the Stock Purchase Agreement.*
12.1 -- Statements re: Computation of Ratios.*
21.1 -- List of Subsidiaries of the Company. (12)
23.1 -- Consent of Deloitte & Touche LLP.*
23.2 -- Consent of Skadden, Arps, Slate, Meagher & Flom LLP.--(included in Exhibit 5.1).
24.1 -- Powers of attorney (included on signature page to registration statement).*
25.1 -- Statement of Eligibility under the Trust Indenture Act of 1939 of State Street Bank and Trust
Company on Form T-1.*
99.1 -- Form of Letter of Transmittal.*
99.2 -- Form of Notice of Guaranteed Delivery.*
99.3 -- Form of Letter to Clients.*
99.4 -- Form of Letter to Brokers, Dealers, Trust Companies and Other Nominees.*
</TABLE>
- ------------
* Filed herewith
(1) Included as an exhibit to the Company's Registration Statement on Form S-4
(Registration No. 333-42777) filed with the Securities and Exchange
Commission on December 19, 1997 and amended on February 2, 1998.
(2) Included as an exhibit to the Company's Registration Statement on Form S-3
(Registration No. 3-99884) filed with the Securities and Exchange
Commission on November 30, 1995 and incorporated herein by reference.
(3) Included in an exhibit to the Company's Form 10-K for the year ended
December 31, 1992, filed with the Securities and Exchange Commission on
March 24, 1993 and incorporated herein by reference.
(4) Included as an exhibit to the Company's Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on June 9, 1997 and
incorporated herein by reference.
(5) Included as an exhibit to the Company's Current Report on Form 8-K dated
August 7, 1997, filed with the Securities and Exchange Commission on
August 8, 1997 and incorporated herein by reference.
II-7
<PAGE>
(6) Included as an Annex to the proxy statement/prospectus included in the
Company's Registration Statement on Form S-4 (Registration No. 333-42777)
filed with the Securities and Exchange Commission on December 19, 1997 and
amended on February 2, 1998.
(7) Included as an exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-43505) filed with the Securities and Exchange
Commission on October 23, 1991 and incorporated herein by reference.
(8) Included as an exhibit to the Company's Current Report on Form 8-K
(Registration No. 001-10920) filed with the Securities and Exchange
Commission on February 5, 1998.
(9) Included as an exhibit to the Company's Form 10-K/A for the year ended
December 31, 1997, filed with the Securities and Exchange Commission on
April 17, 1998 and incorporated herein by reference.
(10) Included in an exhibit to the Company's Form 10-K for the year ended
December 31, 1995, filed with the Securities and Exchange Commission on
March 21, 1996 and incorporated herein by reference.
(11) Included in an exhibit to the Company's Form 10-K for the year ended
December 31, 1994, filed with the Securities and Exchange Commission on
March 24, 1995 and incorporated herein by reference.
(12) Included as an exhibit to the Company's Form 10-K for the year ended
December 31, 1996, filed with the Securities and Exchange Commission on
March 27, 1997 and incorporated herein by reference.
II-8
================================================================================
FISHER SCIENTIFIC INTERNATIONAL INC., as Issuer
$200,000,000
9% Senior Subordinated Notes due 2008
---------------
INDENTURE
Dated as of November 20, 1998
---------------
STATE STREET BANK AND TRUST COMPANY, as Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
TIA Indenture
Section Section
- ------- -------
<S> <C>
310(a)(1)...................................................... 7.10
(a)(2)...................................................... 7.10
(a)(3)...................................................... N.A.
(a)(4)...................................................... N.A.
(b)......................................................... 7.8; 7.10
(c)......................................................... N.A.
311(a)......................................................... 7.11
(b)......................................................... 7.11
(c)......................................................... N.A.
312(a)......................................................... 2.5
(b)......................................................... N.A.
(c)......................................................... N.A.
313(a)......................................................... 7.6
(b)(1)...................................................... N.A.
(b)(2)...................................................... 7.6
(c)......................................................... 7.6
(d)......................................................... 7.6
314(a)......................................................... 4.18
4.19; 13.2
(b)......................................................... N.A.
(c)(1)...................................................... 13.4
(c)(2)...................................................... 13.4
(c)(3)...................................................... N.A.
(d)......................................................... N.A.
(e)......................................................... 13.5
(f)......................................................... 4.19
315(a)......................................................... 7.1
(b)......................................................... 7.5; 13.2
(c)......................................................... 7.1
(d)......................................................... 7.1
(e)......................................................... 6.11
316(a)(last sentence).......................................... 13.6
(a)(1)(A)................................................... 6.5
(a)(1)(B)................................................... 6.4
(a)(2)...................................................... N.A.
(b)......................................................... 6.7
317(a)(1)...................................................... 6.8
(a)(2)...................................................... 6.9
(b)......................................................... 2.4
318(a)......................................................... 13.1
</TABLE>
N.A. means Not Applicable
- ------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE................ 1
SECTION 1.1. Definitions................................................ 1
SECTION 1.2. Other Definitions.......................................... 27
SECTION 1.3. Incorporation by Reference of Trust
Indenture Act.............................................. 28
SECTION 1.4. Rules of Construction...................................... 28
ARTICLE II
THE SECURITIES............................. 29
SECTION 2.1. Form and Dating............................................ 29
SECTION 2.2. Execution and Authentication............................... 30
SECTION 2.3. Registrar and Paying Agent................................. 31
SECTION 2.4. Paying Agent to Hold Money in Trust........................ 32
SECTION 2.5. Securityholder Lists....................................... 32
SECTION 2.6. Transfer and Exchange...................................... 32
SECTION 2.7. Replacement Securities..................................... 39
SECTION 2.8. Outstanding Securities..................................... 39
SECTION 2.9. Temporary Securities....................................... 40
SECTION 2.10. Cancellation............................................... 40
SECTION 2.11. Defaulted Interest......................................... 40
SECTION 2.12. CUSIP Numbers.............................................. 41
ARTICLE III
REDEMPTION............................... 41
SECTION 3.1. Notices to Trustee......................................... 41
SECTION 3.2. Selection of Securities To be Redeemed..................... 41
SECTION 3.3. Notice of Redemption....................................... 42
SECTION 3.4. Effect of Notice of Redemption............................. 43
SECTION 3.5. Deposit Of Redemption Price................................ 43
ARTICLE IV
COVENANTS................................ 44
SECTION 4.1. Payment of Securities...................................... 44
SECTION 4.2. Limitation on Liens........................................ 44
SECTION 4.3. Limitation on Incurrence of Additional
Indebtedness............................................... 44
SECTION 4.4. Limitation on Restricted Payments.......................... 45
<PAGE>
SECTION 4.5. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries........................ 47
SECTION 4.6. Limitation on Asset Sales.................................. 48
SECTION 4.7. Limitation on Transactions with
Affiliates................................................. 51
SECTION 4.8. Change of Control.......................................... 53
SECTION 4.9. Prohibition on Incurrence of Senior
Subordinated Debt.......................................... 54
SECTION 4.10. Limitation on Preferred Stock of
Subsidiaries............................................... 54
SECTION 4.11. Limitation on Guarantees by Restricted
Subsidiaries............................................... 54
SECTION 4.12. Conduct of Business........................................ 54
SECTION 4.13. Maintenance of Office or Agency............................ 54
SECTION 4.14. Corporate Existence........................................ 55
SECTION 4.15. Payment of Taxes and Other Claims.......................... 55
SECTION 4.16. Maintenance of Properties and
Insurance.................................................. 55
SECTION 4.17. Compliance With Laws....................................... 56
SECTION 4.18. Additional Information..................................... 56
SECTION 4.19. Further Instruments and Acts............................... 56
ARTICLE V
SUCCESSOR COMPANY............................ 57
SECTION 5.1. When Company May Merge or Transfer
Assets..................................................... 57
ARTICLE VI
DEFAULTS AND REMEDIES.......................... 58
SECTION 6.1. Events of Default.......................................... 58
SECTION 6.2. Acceleration............................................... 60
SECTION 6.3. Other Remedies............................................. 61
SECTION 6.4. Waiver of Past Defaults.................................... 62
SECTION 6.5. Control by Majority........................................ 62
SECTION 6.6. Limitation on Suits........................................ 62
SECTION 6.7. Rights of Holders to Receive Payment....................... 63
SECTION 6.8. Collection Suit by Trustee................................. 63
SECTION 6.9. Trustee May File Proofs of Claim........................... 63
SECTION 6.10. Priorities................................................. 64
SECTION 6.11. Undertaking for Costs...................................... 64
ARTICLE VII
TRUSTEE................................. 65
SECTION 7.1. Duties of Trustee.......................................... 65
<PAGE>
SECTION 7.2. Rights of Trustee.............................................. 66
SECTION 7.3. Individual Rights of Trustee................................... 67
SECTION 7.4. Trustee's Disclaimer........................................... 67
SECTION 7.5. Notice of Defaults............................................. 67
SECTION 7.6. Reports by Trustee to Holders.................................. 67
SECTION 7.7. Compensation and Indemnity..................................... 68
SECTION 7.8. Replacement of Trustee......................................... 68
SECTION 7.9. Successor Trustee by Merger.................................... 70
SECTION 7.10. Eligibility; Disqualification.................................. 70
SECTION 7.11. Preferential Collection of Claims
Against Company...... ........................................ 70
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE.................... 70
SECTION 8.1. Discharge of Liability on Securities........................... 70
SECTION 8.2. Legal Defeasance and Covenant Defeasance....................... 72
SECTION 8.3. Conditions to Defeasance....................................... 73
SECTION 8.4. Application of Trust Money..................................... 75
SECTION 8.5. Repayment to Company........................................... 76
SECTION 8.6. Reinstatement.................................................. 76
ARTICLE IX
AMENDMENTS................................ 77
SECTION 9.1. Without Consent of Holders..................................... 77
SECTION 9.2. With Consent of Holders........................................ 78
SECTION 9.3. Compliance With Trust Indenture Act............................ 79
SECTION 9.4. Revocation and Effect of Consents and
Waivers..... ................................................. 79
SECTION 9.5. Notation on or Exchange of Securities.......................... 80
SECTION 9.6. Trustee to Sign Amendments..................................... 80
ARTICLE X
SUBORDINATION.............................. 81
SECTION 10.1. Agreement to Subordinate...................................... 81
SECTION 10.2. Liquidation, Dissolution, Bankruptcy.......................... 81
SECTION 10.3. Default on Senior Indebtedness................................ 82
SECTION 10.4. Acceleration of Payment of Securities......................... 83
SECTION 10.5. When Distribution Must Be Paid Over........................... 83
SECTION 10.6. Subrogation................................................... 83
SECTION 10.7. Relative Rights............................................... 83
SECTION 10.8. Subordination May Not Be Impaired by
Company..... ................................................ 84
SECTION 10.9. Rights of Trustee and Paying Agent............................ 84
<PAGE>
SECTION 10.10. Distribution or Notice to
Representative........................................... 84
SECTION 10.11. Article X Not To Prevent Events of
Default or Limit Right to Accelerate..................... 84
SECTION 10.12. Trust Moneys Not Subordinated. .......................... 85
SECTION 10.13. Trustee Entitled to Rely................................. 85
SECTION 10.14. Trustee to Effectuate Subordination. .................... 85
SECTION 10.15. Trustee Not Fiduciary for Holders of
Senior Indebtedness...................................... 86
SECTION 10.16. Reliance by Holders of Senior
Indebtedness on Subordination Provisions................. 86
ARTICLE XI
[RESERVED]................................ 86
ARTICLE XII
[RESERVED]................................ 86
ARTICLE XIII
MISCELLANEOUS.............................. 86
SECTION 13.1. Trust Indenture Act Controls............................. 86
SECTION 13.2. Notices.................................................. 86
SECTION 13.3. Communication by Holders With Other
Holders.................................................. 87
SECTION 13.4. Certificate and Opinion As To
Conditions Precedent..................................... 87
SECTION 13.5. Statements Required in Certificate or
Opinion.................................................. 88
SECTION 13.6. When Securities Disregarded.............................. 88
SECTION 13.7. Rules by Trustee, Paying Agent and
Registrar................................................ 88
SECTION 13.8. Legal Holidays........................................... 89
SECTION 13.9. Governing Law............................................ 89
SECTION 13.10. No Recourse Against Others............................... 89
SECTION 13.11. Successors............................................... 89
SECTION 13.12. Multiple Originals....................................... 89
SECTION 13.13. Variable Provisions...................................... 89
SECTION 13.14. Qualification Of Indenture............................... 89
SECTION 13.15. Table of Contents; Headings.............................. 90
EXHIBITS
- --------
EXHIBIT A FORM OF SECURITY
EXHIBIT B FORM OF EXCHANGE SECURITY
<PAGE>
INDENTURE dated as of November 20, 1998, between FISHER SCIENTIFIC
INTERNATIONAL INC., a Delaware corporation (as further defined below, the
"Company"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts chartered
trust company, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other parties
and for the equal and ratable benefit of the Holders of the Company's 9% Senior
Subordinated Notes due 2008 (the "Initial Securities") and, if and when issued
in exchange for Initial Securities as provided in the Registration Rights
Agreement (as hereinafter defined), the Company's 9% Senior Subordinated Notes
due 2008 (the "Exchange Securities" and, together with the Initial Securities,
the "Securities").
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
"Acquired Indebtedness" means Indebtedness (i) of a Person or any of
its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company, or (ii) assumed in connection with the acquisition of
assets from such Person, in each case whether or not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition. Acquired Indebtedness
shall be deemed to have been incurred, with respect to clause (i) of the
preceding sentence, on the date such Person becomes a Restricted Subsidiary of
the Company and, with respect to clause (ii) of the preceding sentence, on the
date of consummation of such acquisition of assets.
"Affiliate" means a Person who directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, the referent Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Notwithstanding the foregoing, no Person (other than the
Company or any Subsidiary of the Company) in whom a Receivables Entity makes an
Investment in connection with a Qualified Receivables Transaction shall be
deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
reason of such Investment.
"all or substantially all" shall have the meaning given such phrase
in the Revised Model Business Corporation Act.
<PAGE>
"Applicable Premium" means, with respect to a Security, the greater
of (i) 1.0% of the then outstanding principal amount of such Security or (ii)
the excess of (A) the present value of the required interest and principal
payments due on such Security, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the then outstanding principal
amount of such Security; provided that in no event will the Applicable Premium
exceed the amount of the applicable redemption price upon an optional redemption
less 100% at any time on or after February 1, 2003.
"Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Company or any Restricted
Subsidiary of the Company, or shall be merged with or into the Company or any
Restricted Subsidiary of the Company, or (b) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person which
constitute all or substantially all of the assets of such Person, any division
or line of business of such Person or any other properties or assets of such
Person other than in the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (including any Sale and Leaseback
Transaction) to any Person other than the Company or a Restricted Subsidiary of
the Company of (a) any Capital Stock of any Restricted Subsidiary of the
Company; or (b) any other property or assets of the Company or any Restricted
Subsidiary of the Company other than in the ordinary course of business;
provided, however, that Asset Sales shall not include (i) any transaction or
series of related transactions for which the Company or its Restricted
Subsidiaries receive aggregate consideration of less than $5 million, (ii) the
sale, lease, conveyance, disposition or other transfer of all or substantially
all of the assets of the Company as permitted under Article V, (iii) the sale or
discount, in each case without recourse, of accounts receivable arising in the
ordinary course of business, but only in connection with the compromise or
collection thereof, (iv) the factoring of accounts receivable arising in the
ordinary course of business pursuant to arrangements customary in the industry,
(v) the licensing of intellectual property, (vi) disposals or replacements of
obsolete equipment in the ordinary course of business, (vii) the sale, lease,
conveyance, disposition or other transfer by the Company or any Restricted
Subsidiary of assets or property in transactions constituting Investments that
are not prohibited
2
<PAGE>
under Section 4.4, (viii) sales of accounts receivable and related assets of the
type specified in the definition of "Qualified Receivables Transaction" to a
Receivables Entity, (ix) transfers of accounts receivable and related assets of
the type specified in the definition of "Qualified Receivables Transaction" (or
a fractional undivided interest therein) by a Receivables Entity in a Qualified
Receivables Transaction, (x) leases or subleases to third persons not
interfering in any material respect with the business of the Company or any of
its Restricted Subsidiaries and (xi) the sale, issuance or transfer of Capital
Stock representing up to 30% of the fully-diluted equity ownership of one or
more of (a) Fisher Technology Group Inc., (b) UniKix Technologies, (c)
Electronic Commerce Division and (d) Strategic Procurement Services to one or
more of their respective directors or employees in connection with the
compensation of such employees. For the purposes of clause (viii), Purchase
Money Notes shall be deemed to be cash.
"Bank Indebtedness" means any and all amounts, whether outstanding
on the Issue Date or thereafter incurred, payable under or in respect of the New
Credit Facility and any related notes, collateral documents, letters of credit
and guarantees, including principal, premium (if any), interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or any Restricted Subsidiary of the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, indemnities, reimbursement obligations,
guarantees and all other amounts payable thereunder or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"Business Day" means each day which is not a Legal Holiday.
"Capitalized Lease Obligation" means, as to any Person, the
obligations of such Person under a lease that are required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of corporate stock, including each class of common stock
and
3
<PAGE>
preferred stock of such Person and (ii) with respect to any Person that is not a
corporation, any and all partnership or other equity interests of such Person.
"Cash Equivalents" means (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either S&P or Moody's; (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's; (iv)
certificates of deposit or bankers' acceptances (or, with respect to foreign
banks, similar instruments) maturing within one year from the date of
acquisition thereof issued by any bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or any U.S.
branch of a foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $200 million; (v) certificates of deposit
or bankers' acceptances or similar instruments maturing within one year from the
date of acquisition thereof issued by any foreign bank that is a lender under
the New Credit Facility having at the date of acquisition thereof combined
capital and surplus of not less than $500 million; (vi) repurchase obligations
with a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) or clause (v) above; and (vii)
investments in money market funds which invest substantially all their assets in
securities of the types described in clauses (i) through (vi) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons (other than
one or more Permitted Holders) for purposes of Section 13(d) of the Exchange Act
(a "Group"), together with any Affiliates thereof (whether or not otherwise in
compliance with the provisions of this Indenture); (ii) the approval by the
holders of Capital Stock of the Company of any plan or proposal for the
liquidation or dissolution of the Company (whether or not otherwise in
compliance with the provisions of this Indenture); (iii) any Person or Group
(other than one or more Permitted Holders) shall
4
<PAGE>
become the owner, directly or indirectly, beneficially or of record, of shares
representing 50% or more of the aggregate ordinary voting power represented by
the issued and outstanding Capital Stock of the Company or (iv) the first day on
which a majority of the members of the Board of Directors of the Company are not
Continuing Directors.
"Change of Control Triggering Event" means the occurrence of a
Change of Control and the failure of the Securities to have a Minimum Rating on
the 30th day after the occurrence of such Change of Control.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Fisher Scientific International Inc., a Delaware
corporation, until a successor replaces it and, thereafter, means the successor
and, for purposes of any provision contained herein and required by the TIA,
each other obligor on the indenture securities.
"Consolidated EBITDA" means, with respect to any Person, for any
period, the sum (without duplication) of (i) Consolidated Net Income and (ii) to
the extent Consolidated Net Income has been reduced thereby, (A) all income
taxes of such Person and its Restricted Subsidiaries paid or accrued in
accordance with GAAP for such period, (B) Consolidated Interest Expense, (C)
Consolidated Non-cash Charges, (D) cash charges attributable to the exercise of
employee options that vested upon the consummation of the Recapitalization and
(E) for any four quarter period that includes one or more fiscal quarters of
fiscal 1997 or 1998, cash restructuring or nonrecurring charges, in an aggregate
amount not to exceed $20 million.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal quarters (the "Four Quarter Period") ending on or prior to the date of
the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date") to Consolidated Fixed Charges of
such Person for the Four Quarter Period. In addition to and without limitation
of the foregoing, for purposes of this definition, "Consolidated EBITDA" and
"Consolidated Fixed Charges" shall be calculated after giving effect on a pro
forma basis for the period of such calculation to (i) the incurrence of any
Indebtedness of such Person or any of its Restricted Subsidiaries (and the
application of the proceeds thereof) giving rise to the need to make such
calculation and any incurrence or repayment of other Indebtedness (and the
application of the
5
<PAGE>
proceeds thereof) occurring during the Four Quarter Period or at any time
subsequent to the last day of the Four Quarter Period and on or prior to the
Transaction Date, as if such incurrence or repayment, as the case may be (and
the application of the proceeds thereof), occurred on the first day of the Four
Quarter Period, (ii) any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Restricted Subsidiaries
(including any Person who becomes a Restricted Subsidiary as a result of the
Asset Acquisition) incurring, assuming or otherwise being liable for Acquired
Indebtedness and also including any Consolidated EBITDA (including pro forma
adjustments for cost savings ("Cost Savings Adjustments") that the Company
reasonably believes in good faith could have been achieved during the Four
Quarter Period as a result of such acquisition or disposition (provided that
both (A) such cost savings were identified and quantified in an Officers'
Certificate delivered to the Trustee at the time of the consummation of the
acquisition or disposition and (B) with respect to each acquisition or
disposition completed prior to the 90th day preceding such date of
determination, actions were commenced or initiated by the Company within 90 days
of such acquisition or disposition to effect such cost savings identified in
such Officers' Certificate and with respect to any other acquisition or
disposition, such Officers' Certificate sets forth the specific steps to be
taken within the 90 days after such acquisition or disposition to accomplish
such cost savings) attributable to the assets which are the subject of the Asset
Acquisition or Asset Sale during the Four Quarter Period) occurring during the
Four Quarter Period or at any time subsequent to the last day of the Four
Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or
Asset Acquisition (including the incurrence, assumption or liability for any
such Indebtedness or Acquired Indebtedness) occurred on the first day of the
Four Quarter Period, (iii) with respect to any such Four Quarter Period
commencing prior to the Recapitalization, the Recapitalization (including any
Cost Savings Adjustments), which shall be deemed to have taken place on the
first day of such Four Quarter Period, and (iv) any Asset Sales or Asset
Acquisitions (including any Consolidated EBITDA (including any Cost Savings
Adjustments) attributable to the assets which are the subject of the asset
acquisition or asset sale during the Four Quarter Period) that have been made by
any Person that has become a Restricted Subsidiary of the Company or has been
merged with or into the Company or any Restricted Subsidiary of the Company
during the Four Quarter Period or at any time subsequent to the last day of the
Four Quarter Period and on or prior to the Transaction Date that would have
constituted Asset Sales or Asset Acquisitions had such transactions occurred
when such Person was a Restricted Subsidiary of the Company or subsequent to
such Person's merger
6
<PAGE>
into the Company, as if such Asset Sale or Asset Acquisition (including the
incurrence, assumption or liability for any Indebtedness or Acquired
Indebtedness in connection therewith) occurred on the first day of the Four
Quarter Period; provided that to the extent that clause (ii) or (iv) of this
sentence requires that pro forma effect be given to an Asset Sale or Asset
Acquisition, such pro forma calculation shall be based upon the four full fiscal
quarters immediately preceding the Transaction Date of the Person, or division
or line of business of the Person, that is acquired or disposed for which
financial information is available. If such Person or any of its Restricted
Subsidiaries directly or indirectly guarantees Indebtedness of a third Person,
the preceding sentence shall give effect to the incurrence of such guaranteed
Indebtedness as if such Person or any Restricted Subsidiary of such Person had
directly incurred or otherwise assumed such guaranteed Indebtedness.
Furthermore, in calculating "Consolidated Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the Transaction Date and which will continue to be so
determined thereafter shall be deemed to have accrued at a fixed rate per annum
equal to the rate of interest on such Indebtedness in effect on the Transaction
Date; (2) if interest on any Indebtedness actually incurred on the Transaction
Date may optionally be determined at an interest rate based upon a factor of a
prime or similar rate, a eurocurrency interbank offered rate, or other rates,
then the interest rate in effect on the Transaction Date will be deemed to have
been in effect during the Four Quarter Period; and (3) notwithstanding clause
(1) above, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Swap
Obligations, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Consolidated Fixed Charges" means, with respect to any Person for
any period, the sum, without duplication, of (i) Consolidated Interest Expense
(excluding amortization or write-off of debt issuance costs relating to the
Recapitalization and the financing therefor or relating to retired or existing
Indebtedness and amortization or write-off of customary debt issuance costs
relating to future Indebtedness incurred in the ordinary course of business)
plus (ii) the product of (x) the amount of all dividend payments on any series
of Preferred Stock of such Person (other than dividends, paid in Qualified
Capital Stock) times (y) a fraction, the numerator of which is one and the
denominator of which is one minus the then current effective consolidated
Federal, state and local tax rate of such Person expressed as a decimal.
7
<PAGE>
"Consolidated Interest Expense" means, with respect to any Person
for any period, the sum of, without duplication, (i) the aggregate of all cash
and non-cash interest expense with respect to all outstanding Indebtedness of
such Person and its Restricted Subsidiaries, including the net costs associated
with Interest Swap Obligations, for such period determined on a consolidated
basis in conformity with GAAP, and (ii) the interest component of Capitalized
Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such
Person and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" of the Company means, for any period, the
aggregate net income (or loss) of the Company and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided that there shall be excluded therefrom (a) gains and losses from Asset
Sales (without regard to the $5 million limitation set forth in the definition
thereof) or abandonments or reserves relating thereto and the related tax
effects according to GAAP, (b) gains and losses due solely to fluctuations in
currency values and the related tax effects according to GAAP, (c) items
classified as extraordinary, unusual or nonrecurring gains and losses, and the
related tax effects according to GAAP, (d) the net income (or loss) of any
Person acquired in a pooling of interests transaction accrued prior to the date
it becomes a Restricted Subsidiary of the Company or is merged or consolidated
with the Company or any Restricted Subsidiary of the Company, (e) the net income
of any Restricted Subsidiary of the Company to the extent that the declaration
of dividends or similar distributions by that Restricted Subsidiary of the
Company of that income is restricted by contract, operation of law or otherwise,
(f) the net loss of any Person other than a Restricted Subsidiary of the
Company, (g) the net income of any Person, other than a Restricted Subsidiary of
the Company, except to the extent of cash dividends or distributions paid to the
Company or a Restricted Subsidiary of the Company by such Person unless, in the
case of a Restricted Subsidiary of the Company who receives such dividends or
distributions, such Restricted Subsidiary of the Company is subject to clause
(e) above, (h) one time non-cash compensation charges, including any arising
from existing stock options resulting from any merger or recapitalization
transaction and (i) bonus payments paid to senior management of the Company
following the Recapitalization in an aggregate amount not to exceed $10 million.
"Consolidated Non-cash Charges" means, with respect to any Person
for any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Restricted Subsidiaries reducing Consolidated
Net Income of such Person and its Restricted Subsidiaries of the Company for
such
8
<PAGE>
period, determined on a consolidated basis in accordance with GAAP (excluding
any such charges which require an accrual of or a reserve for cash charges for
any future period).
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Issue Date, (ii) was nominated for election or elected
to such Board of Directors with, or whose election to such Board of Directors
was approved by, the affirmative vote of a majority of the Continuing Directors
who were members of such Board of Directors at the time of such nomination or
election or (iii) is any designee of a Permitted Holder or was nominated by a
Permitted Holder or any designees of a Permitted Holder on the Board of
Directors.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means The Depository Trust Company, its nominees and
their respective successors and assigns, or such other depository institution
hereinafter appointed by the Company.
"Designated Senior Indebtedness" means (i) Bank Indebtedness and
(ii) any other Senior Indebtedness which, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at the date of
determination, the holders thereof, are committed to lend up to, at least $25
million and is specifically designated by the Company in the instrument
evidencing or governing such Senior Indebtedness or another writing as
"Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Capital Stock" means that portion of any Capital Stock
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any event
(other than an event which would constitute a Change of Control Triggering
Event), matures (excluding any maturity as the result of an optional redemption
by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise,
9
<PAGE>
or is redeemable at the sole option of the holder thereof (except, in each case,
upon the occurrence of a Change of Control Triggering Event) on or prior to the
final maturity date of the Securities.
"Equity Offering" means an offering of Qualified Capital Stock of
the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Notes" means the Company's outstanding $400.0 million 9%
Senior Subordinated Notes due 2008.
"fair market value" means, unless otherwise specified, with respect
to any asset or property, the price which could be negotiated in an
arm's-length, free market transaction, for cash, between a willing seller and a
willing and able buyer, neither of whom is under undue pressure or compulsion to
complete the transaction. Fair market value shall be determined by the Board of
Directors of the Company acting reasonably and in good faith and shall be
evidenced by a resolution of the Board of Directors of the Company delivered to
the Trustee.
"Fiscal 1998" means the year ended December 31, 1998.
"Foreign Subsidiary" means a Restricted Subsidiary of the Company
(i) that is organized in a jurisdiction other than the United States of America
or a state thereof or the District of Columbia and (ii) with respect to which at
least 90% of its sales (as determined in accordance with GAAP) are generated by
operations located in jurisdictions outside the United States of America.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the Issue Date, including, without limitation,
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well,
10
<PAGE>
to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered into for
purposes of assuring in any other manner the obligee of such Indebtedness of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Indebtedness" means with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all Capitalized Lease Obligations of such Person,
(iv) all obligations of such Person issued or assumed as the deferred purchase
price of property, all conditional sale obligations and all obligations under
any title retention agreement (but excluding trade accounts payable arising in
the ordinary course of business), (v) all obligations for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all obligations of any other Person of the type referred to in
clauses (i) through (vi) which are secured by any Lien on any property or asset
of such Person but which obligations are not assumed by such Person, the amount
of such obligation being deemed to be the lesser of the fair market value of
such property or asset or the amount of the obligation so secured, (viii) all
obligations under currency swap agreements and interest swap agreements of such
Person and (ix) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any. For
purposes hereof, (x) the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital Stock
and (y) any transfer of accounts receivable or other assets which
11
<PAGE>
constitute a sale for purposes of GAAP shall not constitute Indebtedness
hereunder.
"Indenture" means this Indenture as amended or supplemented from
time to time.
"Interest Swap Obligations" means the obligations of any Person,
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount.
"Investment" by any Person in any other Person means, with respect
to any Person, any direct or indirect loan or other extension of credit
(including, without limitation, a guarantee) or capital contribution to (by
means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition by such Person of any Capital Stock, bonds, notes, debentures or
other securities or evidences of Indebtedness issued by, such other Person.
"Investment" shall exclude extensions of trade credit by the Company and its
Restricted Subsidiaries on commercially reasonable terms in accordance with
normal trade practices of the Company or such Restricted Subsidiary, as the case
may be. For the purposes of Section 4.4, (i) the Company shall be deemed to have
made an "Investment" equal to the fair market value of the net assets of any
Restricted Subsidiary at the time that such Restricted Subsidiary is designated
an Unrestricted Subsidiary and the aggregate amount of Investments made since
the Issue Date shall exclude (to the extent the designation as an Unrestricted
Subsidiary was included as a Restricted Payment) the fair market value of the
net assets of any Unrestricted Subsidiary at the time that such Unrestricted
Subsidiary is designated a Restricted Subsidiary not to exceed the amount of the
Investment deemed made at the date of designation thereof as an Unrestricted
Subsidiary, and (ii) the amount of any Investment shall be the original cost of
such Investment plus the cost of all additional Investments by the Company or
any of its Restricted Subsidiaries, without any adjustments for increases or
decreases in value, or write-ups, writedowns or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions (including tax
sharing payments) in connection with such Investment or any other amounts
received in respect of such Investment; provided that no such payment of
dividends or distributions or receipt of any such other amounts shall reduce the
amount of any Investment if such payment of dividends or distributions or
receipt of any such amounts would be included in Consolidated Net Income. If the
12
<PAGE>
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Common Stock of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, the
Company no longer owns, directly or indirectly, 50% of the outstanding Common
Stock of such Restricted Subsidiary, the Company shall be deemed to have made an
Investment on the date of any such sale or disposition equal to the fair market
value of the Common Stock of such Restricted Subsidiary not sold or disposed of.
"Investors" means one or more of (i) Merrill Lynch Kecalp L.P. 1997,
(ii) Kecalp Inc., (iii) ML IBK Positions, Inc., (iv) Chase Equity Associates,
L.P., (v) DLJ Merchant Banking Partners II, L.P., DLJ Offshore Partners II,
C.V., DLJ Diversified Partners, L.P., DLJMB Funding II, Inc., DLJ Merchant
Banking Partners II-A, L.P., DLJ Diversified Partners-A, L.P., DLJ Millennium
Partners, L.P., DLJ Millennium Partners-A, L.P., UK Investment Plan 1997
Partners, DLJ EAB Partners, L.P. and DLJ First ESC, LLC, (vi) members of
management of the Company and (vii) any Affiliate of any of the foregoing.
"Issue Date" means the date of original issuance of the Securities.
"Joint Venture" means a corporation, partnership or other business
entity, other than a Subsidiary of the Company, engaged or proposed to be
engaged in the same or a similar line of business as the Company in which the
Company owns, directly or indirectly, not less than 30% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers and trustees thereof, with the
balance of the ownership interests being held by one or more investors.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Merger Agreement" means the Second Amended and Restated Plan of
Merger dated as of November 14, 1997 by and between FSI Merger Corp. and the
Company.
"Minimum Rating" means (i) a rating of at least BBB- (or equivalent
successor rating) by S&P and (ii) a rating of at least Baa3 (or equivalent
successor rating) by Moody's.
13
<PAGE>
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Restricted Subsidiaries from
such Asset Sale net of (a) out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking into
account any reduction in consolidated tax liability due to available tax credits
or deductions and any tax sharing arrangements, (c) repayment of Senior
Indebtedness that is required to be repaid in connection with such Asset Sale,
(d) any portion of cash proceeds which the Company determines in good faith
should be reserved for post-closing adjustments, it being understood and agreed
that on the day that all such post-closing adjustments have been determined, the
amount (if any) by which the reserved amount in respect of such Asset Sale
exceeds the actual post-closing adjustments payable by the Company or any of its
Subsidiaries shall constitute Net Cash Proceeds on such date; provided that, in
the case of the sale by the Company of an asset constituting an Investment made
after the Issue Date (other than a Permitted Investment), the "Net Cash
Proceeds" in respect of such Asset Sale shall not include the lesser of (x) the
cash received with respect to such Asset Sale and (y) the initial amount of such
Investment, less, in the case of clause (y), all amounts (up to an amount not to
exceed the initial amount of such Investment) received by the Company with
respect to such Investment, whether by dividend, sale, liquidation or repayment,
in each case prior to the date of such Asset Sale.
"New Credit Facility" means the credit agreement dated as of January
21, 1998, among the Company, the other borrowers thereto from time to time, if
any, the lenders party thereto from time to time and The Chase Manhattan Bank,
as administrative agent, Merrill Lynch Capital Corporation, as syndication
agent, and DLJ Capital Funding, Inc., as documentation agent, together with the
related documents thereto (including, without limitation, any guarantee
agreements, promissory notes and collateral documents), in each case as such
agreements may be amended, supplemented or otherwise modified from time to time,
or refunded, refinanced, restructured, replaced, renewed, repaid or extended
from time to time (whether with the original agents and lenders or other agents
and lenders or otherwise, and whether provided under the original New Credit
Facility or one or more other credit agreements or otherwise) to increase the
amount of
14
<PAGE>
available borrowings thereunder or to add Restricted Subsidiaries as additional
borrowers or guarantors or otherwise.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing any Indebtedness, without
duplication.
"Offering Memorandum" means the Offering Memorandum dated November
10, 1998 relating to the Initial Securities; provided that after the issuance of
Exchange Securities, all references herein to "Offering Memorandum" shall be
deemed references to the prospectus relating to the Exchange Securities.
"Officer" means the Chairman of the Board, the Vice Chairman of the
Board, the President, any Vice President, the Treasurer or the Secretary of the
Company, as applicable.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holder" means and includes (i) the Principal or any of
its Affiliates, (ii) the Investors or any of their Affiliates, (iii) any
corporation the outstanding voting power of the Capital Stock of which is
beneficially owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of the voting power of
the Capital Stock of the Company, (iii) any Plan, (iv) any underwriter during
the period engaged in a firm commitment underwriting on behalf of the Company
with respect to the shares of Capital Stock being underwritten or (v) the
Company or any Subsidiary of the Company.
"Permitted Indebtedness" means, without duplication, (i) the
Securities, (ii) the Existing Notes, (iii) Indebtedness incurred pursuant to the
New Credit Facility in an aggregate principal amount at any time outstanding not
to exceed $469.2 million less (A) the amount of all mandatory principal payments
actually made by the Company in respect of term loans thereunder (excluding any
such payments to the extent refinanced at the time of payment under a New Credit
Facility) and (B) in the case of a revolving facility, reduced by any required
permanent repayments actually made (which are accompanied by a corresponding
permanent commitment reduction) thereunder (excluding any such repayments and
commitment reductions to the extent refinanced and replaced
15
<PAGE>
at the time under a New Credit Facility), (iv) Indebtedness of Foreign
Subsidiaries incurred solely for working capital purposes of such Foreign
Subsidiaries, (v) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date reduced by the amount of any
scheduled amortization payments or mandatory prepayments when actually paid or
permanent reductions thereon, (vi) Interest Swap Obligations of the Company or
any of its Restricted Subsidiaries covering Indebtedness of the Company or any
of its Restricted Subsidiaries; provided that any Indebtedness to which any such
Interest Swap Obligations correspond is otherwise permitted to be incurred under
this Indenture; provided, further, that such Interest Swap Obligations are
entered into, in the judgment of the Company, to protect the Company and its
Restricted Subsidiaries from fluctuation in interest rates on their respective
outstanding Indebtedness, (vii) Indebtedness of the Company or any of its
Restricted Subsidiaries under Currency Agreements entered into, in the judgment
of the Company, to protect the Company or such Restricted Subsidiary of the
Company from foreign currency exchange rates, (viii) intercompany Indebtedness
owed by any Restricted Subsidiary of the Company to the Company or any
Restricted Subsidiary of the Company or by the Company to any Restricted
Subsidiary of the Company, (ix) Acquired Indebtedness of the Company or any
Restricted Subsidiary of the Company to the extent the Company could have
incurred such Indebtedness in accordance with Section 4.3 on the date such
Indebtedness became Acquired Indebtedness; provided that, in the case of
Acquired Indebtedness of a Restricted Subsidiary of the Company, such Acquired
Indebtedness was not incurred in connection with, or in anticipation or
contemplation of, such Person becoming a Restricted Subsidiary of the Company,
(x) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or other similar instrument inadvertently drawn
against insufficient funds in the ordinary course of business; provided that
such Indebtedness is extinguished within five Business Days of its incurrence,
(xi) any refinancing, modification, replacement, renewal, restatement,
refunding, deferral, extension, substitution, supplement, reissuance or resale
of existing or future Indebtedness, including any additional Indebtedness
incurred to pay interest or premiums required by the instruments governing such
existing or future Indebtedness as in effect at the time of issuance thereof
("Required Premiums") and fees in connection therewith; provided that any such
event shall not (1) result in an increase in the aggregate principal amount of
Permitted Indebtedness (except to the extent such increase is a result of a
simultaneous incurrence of additional Indebtedness (A) to pay Required Premiums
and related fees or (B) otherwise permitted to be incurred under this Indenture)
of the Company and its Restricted Subsidiaries and (2) create Indebtedness with
a Weighted Average Life to Maturity
16
<PAGE>
at the time such Indebtedness is incurred that is less than the Weighted Average
Life to Maturity at such time of the Indebtedness being refinanced, modified,
replaced, renewed, restated, refunded, deferred, extended, substituted,
supplemented, reissued or resold (except that this subclause (2) will not apply
in the event the Indebtedness being refinanced, modified, replaced, renewed,
restated, refunded, deferred, extended, substituted, supplemented, reissued or
resold was originally incurred in reliance upon clause (viii) or (xvii) of this
definition); provided that no Restricted Subsidiary of the Company may refinance
any Indebtedness pursuant to this clause (xi) other than its own Indebtedness,
(xii) Indebtedness (including Capitalized Lease Obligations) incurred by the
Company to finance the purchase, lease or improvement of property (real or
personal) or equipment (whether through the direct purchase of assets or the
Capital Stock of any Person owning such assets) in an aggregate principal amount
outstanding not to exceed $30 million at the time of any incurrence thereof
(which amount shall be deemed not to include any such Indebtedness incurred in
whole or in part under the New Credit Facility to the extent permitted by clause
(iii) above), (xiii) the incurrence by a Receivables Entity of Indebtedness in a
Qualified Receivables Transaction that is not recourse to the Company or any
Restricted Subsidiary of the Company (except for Standard Securitization
Undertakings), (xiv) Indebtedness incurred by the Company or any of its
Restricted Subsidiaries constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims, (xv) Indebtedness arising
from agreements of the Company or a Restricted Subsidiary of the Company
providing for indemnification, adjustment of purchase price, earn out or other
similar obligations, in each case, incurred or assumed in connection with the
disposition of any business, assets or a Restricted Subsidiary of the Company,
other than guarantees of Indebtedness incurred by any Person acquiring all or
any portion of such business, assets or Restricted Subsidiary of the Company for
the purpose of financing such acquisition, provided that the maximum assumable
liability in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and its Restricted Subsidiaries in
connection with such disposition, (xvi) obligations in respect of performance
and surety bonds and completion guarantees provided by the Company or any
Restricted Subsidiary of the Company in the ordinary course of business, (xvii)
Indebtedness consisting of guarantees (a) by the Company of Indebtedness, leases
and any other obligation or liability permitted to be incurred under this
Indenture by Restricted Subsidiaries of the Company, and (b) subject to Section
4.11, by
17
<PAGE>
Restricted Subsidiaries of the Company of Indebtedness, leases and any other
obligation or liability permitted to be incurred under this Indenture by the
Company or other Restricted Subsidiaries of the Company, and (xviii) additional
Indebtedness of the Company or any Restricted Subsidiary of the Company in an
aggregate principal amount not to exceed $20 million at any one time outstanding
(which amount should not be deemed to include any such Indebtedness incurred in
whole or in part under the New Credit Facility to the extent permitted by clause
(iii) above).
"Permitted Investments" means (i) Investments by the Company or any
Restricted Subsidiary of the Company in any Restricted Subsidiary of the Company
(whether existing on the Issue Date or created thereafter) and Investments in
the Company by any Restricted Subsidiary of the Company; (ii) cash and Cash
Equivalents; (iii) Investments existing on the Issue Date; (iv) loans and
advances to employees, officers and directors of the Company and its Restricted
Subsidiaries not in excess of $1 million at any one time outstanding; (v)
accounts receivable owing to the Company or any Restricted Subsidiary of the
Company created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however, that
such trade terms may include such concessionary trade terms as the Company or
such Restricted Subsidiary of the Company deems reasonable under the
circumstances; (vi) Currency Agreements and Interest Swap Obligations entered
into by the Company or any of its Restricted Subsidiaries for bona fide business
reasons and not for speculative purposes and otherwise in compliance with this
Indenture; (vii) Investments in securities of trade creditors or customers
received pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers; (viii) guarantees
by the Company or any of its Restricted Subsidiaries of Indebtedness otherwise
permitted to be incurred by the Company or any of its Restricted Subsidiaries
under this Indenture; (ix) Investments by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such Investment (A)
such Person becomes a Restricted Subsidiary of the Company or (B) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys all or
substantially all of its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company; (x) additional Investments having an
aggregate fair market value, taken together with all other Investments made
pursuant to this clause (x) that are at the time outstanding, not exceeding $5
million at the time of such Investment (with the fair market value of each
Investment being measured at the time made and without giving effect to
subsequent changes in value), plus an amount equal to (A) 100% of the aggregate
net cash proceeds received by the Company from any Person (other than a
Subsidiary of the Company) from the issuance and sale subsequent
18
<PAGE>
to the Issue Date of Qualified Capital Stock of the Company (including Qualified
Capital Stock issued upon the conversion of convertible Indebtedness or in
exchange for outstanding Indebtedness or as capital contributions to the Company
(other than from a Subsidiary)) and (B) without duplication of any amounts
included in clause (x)(A) above, 100% of the aggregate net cash proceeds of any
equity contribution received by the Company from a holder of the Company's
Capital Stock, that in the case of amounts described in clause (x)(A) or (x)(B)
are applied by the Company within 180 days after receipt, to make additional
Permitted Investments under this clause (x) (such additional Permitted
Investments being referred to collectively as "Stock Permitted Investments");
(xi) any Investment by the Company or a Restricted Subsidiary of the Company in
a Receivables Entity or any Investment by a Receivables Entity in any other
Person in connection with a Qualified Receivables Transaction, including
investments of funds held in accounts permitted or required by the arrangements
governing such Qualified Receivables Transaction or any related Indebtedness;
provided that any Investment in a Receivables Entity is in the form of a
Purchase Money Note, contribution of additional Receivables or an equity
interest; (xii) Investments received by the Company or its Restricted
Subsidiaries as consideration for asset sales, including Asset Sales; provided
in the case of an Asset Sale, (A) such Investment does not exceed 25% of the
consideration received for such Asset Sale and (B) such Asset Sale is otherwise
effected in compliance with Section 4.6; (xiii) Investments by the Company or
its Restricted Subsidiaries in Joint Ventures in an aggregate amount not in
excess of $25 million; and (xiv) that portion of any Investment where the
consideration provided by the Company is Capital Stock of the Company (other
than Disqualified Capital Stock). Any net cash proceeds that are used by the
Company or any of its Restricted Subsidiaries to make Stock Permitted
Investments pursuant to clause (x) of this definition shall not be included in
subclauses (x) and (y) of clause (iii) of Section 4.4(a).
"Permitted Liens" means the following types of Liens:
(i) Liens securing the Securities;
(ii) Liens securing Acquired Indebtedness incurred in reliance on
clause (ix) of the definition of Permitted Indebtedness; provided that
such Liens do not extend to or cover any property or assets of the Company
or of any of its Restricted Subsidiaries other than the property or assets
that secured the Acquired Indebtedness prior to the time such Indebtedness
became
19
<PAGE>
Acquired Indebtedness of the Company or a Restricted Subsidiary of the
Company;
(iii) Liens existing on the Issue Date, together with any Liens
securing Indebtedness incurred in reliance on clause (xii) of the
definition of Permitted Indebtedness in order to refinance the
Indebtedness secured by Liens existing on the Issue Date; provided that
the Liens securing the refinancing Indebtedness shall not extend to
property other than that pledged under the Liens securing the Indebtedness
being refinanced;
(iv) Liens in favor of the Company on the property or assets, or any
proceeds, income or profit therefrom, of any Restricted Subsidiary of the
Company; and
(v) other Liens securing Senior Subordinated Indebtedness, provided
that the maximum aggregate amount of outstanding obligations secured
thereby shall not at any time exceed $5 million.
"Person" means an individual, partnership, corporation,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof or any other entity.
"Plan" means any employee benefit plan, retirement plan, deferred
compensation plan, restricted stock plan, health, life, disability or other
insurance plan or program, employee stock purchase plan, employee stock
ownership plan, pension plan, stock option plan or similar plan or arrangement
of the Company or any Subsidiary of the Company, or other successor plan
thereof, and "Plans" shall have a correlative meaning.
"Preferred Stock" of any Person means any Capital Stock of such
Person that has preferential rights to any other Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.
"Principal" means Thomas H. Lee Company and its Affiliates.
"Productive Assets" means assets (including Capital Stock of a
Person that directly or indirectly owns assets) of a kind used or usable in the
businesses of the Company and its Restricted Subsidiaries as, or related to such
business, conducted on the date of the relevant Asset Sale.
20
<PAGE>
"Purchase Money Note" means a promissory note of a Receivables
Entity evidencing a line of credit, which may be irrevocable, from the Company
or any Subsidiary of the Company in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note (a) shall be repaid from cash
available to the Receivables Entity, other than (i) amounts required to be
established as reserves pursuant to agreements, (ii) amounts paid to investors
in respect of interest, (iii) principal and other amounts owing to such
investors and amounts owing to such investors and (iv) amounts paid in
connection with the purchase of newly generated receivables and (b) may be
subordinated to the payments described in (a).
"QIB" means any "qualified institutional buyer" (as defined under
the Securities Act).
"Qualified Capital Stock" means any stock that is not Disqualified
Capital Stock.
"Qualified Receivables Transaction" means any transaction or series
of transactions that may be entered into by the Company or any of its
Subsidiaries pursuant to which the Company or any or its Subsidiaries may sell,
convey or otherwise transfer to (a) a Receivables Entity (in the case of a
transfer by the Company or any of its Subsidiaries) and (b) any other Person (in
the case of a transfer by a Receivables Entity), or may grant a security
interest in, any accounts receivable (whether now existing or arising in the
future) of the Company or any of its Subsidiaries, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable. The grant of a security interest in any accounts
receivable of the Company or any of its Restricted Subsidiaries to secure Bank
Indebtedness shall not be deemed a Qualified Receivables Transaction.
"Recapitalization" means the transaction contemplated by the Merger
Agreement, together with the financings therefor.
"Receivables Entity" means a Wholly Owned Subsidiary of the Company
(or another Person in which the Company or any Subsidiary of the Company makes
an Investment and to which the Company or any Subsidiary of the Company
transfers accounts receivable and related assets) which engages in no activities
other than in connection with the financing of accounts receivable, all proceeds
thereof and all rights (contractual or
21
<PAGE>
other), collateral and other assets relating thereto, and any business or
activities incidental or related to such business, and which is designated by
the Board of Directors of the Company (as provided below) as a Receivables
Entity (a) no portion of the Indebtedness or any other Obligations (contingent
or otherwise) of which (i) is guaranteed by the Company or any Subsidiary of the
Company (excluding guarantees of Obligations (other than the principal of, and
interest on, Indebtedness) pursuant to Standard Securitization Undertakings),
(ii) is recourse to or obligates the Company or any Subsidiary of the Company in
any way other than pursuant to Standard Securitization Undertakings or (iii)
subjects any property or asset of the Company or any Subsidiary of the Company,
directly or indirectly, contingently or otherwise, to the satisfaction thereof,
other than pursuant to Standard Securitization Undertakings, (b) with which
neither the Company nor any Subsidiary of the Company has any material contract,
agreement, arrangement or understanding other than on terms which the Company
reasonably believes to be no less favorable to the Company or such Subsidiary
than those that might be obtained at the time from Persons that are not
Affiliates of the Company, other than fees payable in the ordinary course of
business in connection with servicing accounts receivable, and (c) to which
neither the Company nor any Subsidiary of the Company has any obligation to
maintain or preserve such entity's financial condition or cause such entity to
achieve certain levels of operating results other than through the contribution
of additional Receivables, related security and collections thereto and proceeds
of the foregoing. Any such designation by the Board of Directors of the Company
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the resolution of the Board of Directors of the Company giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions.
"Redemption Event" shall mean (i) an underwritten initial public
offering of the common stock of the Company or (ii) a Change of Control.
"Registered Exchange Offer" shall have the meaning set forth in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated November 20, 1998, among the Company, Chase Securities Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Donaldson, Lufkin &
Jenrette Securities Corporation.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Designated Senior Indebtedness; provided
that if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then
22
<PAGE>
the Representative for such Designated Senior Indebtedness shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Indebtedness in respect of any Designated Senior Indebtedness.
"Restricted Subsidiary" of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party, providing
for the leasing to the Company or a Restricted Subsidiary of any property,
whether owned by the Company or any Restricted Subsidiary at the Issue Date or
later acquired, which has been or is to be sold or transferred by the Company or
such Restricted Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of such Property.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Securityholder" or "Holder" means the Person in whose name a
Security is registered on the Registrar's books.
"Securities Custodian" means the trustee as custodian for the
Depository.
"Senior Indebtedness" means (i) Bank Indebtedness and (ii) all
Indebtedness of the Company including interest thereon (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company or any Restricted Subsidiary of the
Company whether or not a claim for post-filing interest is allowed in such
proceedings), whether outstanding on the Issue Date or thereafter incurred,
unless in the instrument creating or evidencing the same or pursuant to which
the same is outstanding it is expressly provided that such obligations are not
superior in right of payment to the Securities; provided, however, that Senior
Indebtedness shall not include (1) any obligation of the Company to any
Subsidiary of the Company, (2) any liability for Federal, state, local or other
taxes owed or owing by the Company, (3) any accounts payable or other liability
to trade creditors arising in
23
<PAGE>
the ordinary course of business (including guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of the Company which is
expressly subordinate in right of payment to any other Indebtedness of the
Company, including any Senior Subordinated Indebtedness and any Subordinated
Obligations, (5) any obligations with respect to any Capital Stock or (6) that
portion of any Indebtedness incurred in violation of Section 4.3 (but, as to any
such obligation, no such violation shall be deemed to exist for purposes of this
clause (6) if the holders(s) of such obligation or their representative and the
Trustee shall have received an Officers' Certificate of the Company to the
effect that the incurrence of such Indebtedness does not (or, in the case of
revolving credit Indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture).
"Senior Subordinated Indebtedness" means the Securities, the
Existing Notes and any other Indebtedness of the Company that specifically
provides that such Indebtedness is to rank pari passu with the Securities and is
not by its express terms subordinate in right of payment to any Indebtedness of
the Company which is not Senior Indebtedness.
"Shelf Registration Statement" has the meaning ascribed thereto in
the Registration Rights Agreement.
"Significant Subsidiary" means, as of any date of determination, for
any Person, each Restricted Subsidiary of such Person which (i) for the most
recent fiscal year of such Person accounted for more than 10% of consolidated
revenues or consolidated net income of such Person or (ii) as at the end of such
fiscal year, was the owner of more than 10% of the consolidated assets of such
Person.
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary of the Company which the Company reasonably believes to be customary
in an accounts receivable transaction.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision.
"Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter incurred) which is
expressly subordinate in right of payment to the Securities pursuant to a
written agreement.
24
<PAGE>
"Subsidiary" means, with respect to any Person, (i) any corporation
of which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly, by such Person or (ii) any
other Person of which at least a majority of the voting interest under ordinary
circumstances is at the time, directly or indirectly, owned by such Person.
"Subsidiary Guarantor" means a Restricted Subsidiary of the Company
that executes and delivers a supplemental indenture pursuant to Section 4.11.
"THL Co." means Thomas H. Lee Company, a financial investment firm.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb), as amended, as in effect on the date of this Indenture.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.6 hereof.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the date fixed for prepayment (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the then remaining term to February 1, 2003; provided, however, that if
the then remaining term to February 1, 2003 is not equal to the constant
maturity of a United States Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of United States Treasury securities for which such yields are given, except
that if the then remaining term to February 1, 2003 is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer this Indenture, or in the case of a successor trustee, an
officer assigned to the department, division or group performing the corporation
trust work of such successor and assigned to administer this Indenture.
25
<PAGE>
"Unrestricted Subsidiary" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided that (x) the
Company certifies to the Trustee that such designation complies with Section 4.4
and (y) each Subsidiary to be so designated and each of its Subsidiaries has not
at the time of designation, and does not thereafter, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect
to any Indebtedness pursuant to which the lender has recourse to any of the
assets of the Company or any of its Restricted Subsidiaries. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary of the Company only if (x) immediately after giving effect to such
designation and treating all Indebtedness of such Unrestricted Subsidiary as
being incurred on such date, the Company is able to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.3 and (y) immediately before and immediately after giving effect to
such designation, no Default or Event of Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution giving
effect to such designation and an Officers' Certificate certifying that such
designation complies with the foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the
26
<PAGE>
nearest one-twelfth) which will elapse between such date and the making of
such payment.
"Wholly Owned Subsidiary" means any Restricted Subsidiary of the
Company all the outstanding voting securities of which (other than directors,
qualifying shares or an immaterial amount of shares required to be owned by
other Persons pursuant to applicable law) are owned, directly or indirectly, by
the Company.
SECTION 1.2 Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- ----------
<S> <C>
"Affiliate Transaction"............................................... 4.7
"Agent Member"........................................................ 2.1
"Bankruptcy Law"...................................................... 6.1
"Blockage Notice"..................................................... 10.3
"Change of Control Offer"............................................. 4.8
"Change of Control Payment Date"...................................... 4.8(b)
"covenant defeasance option".......................................... 8.1(b)
"Custodian"........................................................... 6.1
"Definitive Securities"............................................... 2.1
"Event of Default".................................................... 6.1
"Exchange Securities"................................................. Preamble
"Global Security"..................................................... 2.1(b)
"incur"............................................................... 4.3
"Initial Securities".................................................. Preamble
"legal defeasance option"............................................. 8.1(b)
"Legal Holiday"....................................................... 13.8
"Net Proceeds Offer".................................................. 4.6
"Net Proceeds Offer Amount"........................................... 4.6
"Net Proceeds Offer Trigger Date"..................................... 4.6
"Non-Global Purchaser"................................................ 2.1
"Note Offer Amount"................................................... 4.6(a)
"Offer"............................................................... 4.6
"Other Debt".......................................................... 6.1
"pay the Securities".................................................. 10.3
"Paying Agent"........................................................ 2.3
"Payment Blockage Period"............................................. 10.3
"Reference Date"...................................................... 4.4(a)
"Registrar"........................................................... 2.3
"Restricted Payment".................................................. 4.4
</TABLE>
27
<PAGE>
"Rule 144A"........................................................... 2.1(b)
"Securities".......................................................... Preamble
"Successor Company"................................................... 5.1
"Trustee"............................................................. Preamble
SECTION 1.3 Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by the TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.4 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
28
<PAGE>
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any non interest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared
in accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation preference of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE II
THE SECURITIES
SECTION 2.1 Form and Dating. (a) The Initial Securities and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A, which is hereby incorporated in and expressly made a part of this
Indenture. The Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B, which is hereby
incorporated by reference and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage, in addition to those set forth on Exhibits A and B. The
Company and the Trustee shall approve the forms of the Securities and any
notation, endorsement or legend on them. Each Security shall be dated the date
of its authentication. The terms of the Securities set forth in Exhibit A and
Exhibit B are part of the terms of this Indenture and, to the extent applicable,
the Company, and the Trustee, by their execution and delivery of this Indenture,
expressly agree to be bound by such terms.
(b) GLOBAL SECURITIES. The Initial Securities are being offered and
sold by the Company pursuant to a Purchase Agreement, dated November 10, 1998,
among the Company, Chase Securities Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation (the
"Purchase Agreement").
Initial Securities offered and sold to a QIB in reliance on Rule
144A under the Securities Act ("Rule 144A") and outside the United States in
reliance on Registration S under the
29
<PAGE>
Securities Act ("Regulation S"), respectively, as provided in the Purchase
Agreement, shall in each case be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons with the Global Securities Legend and Restricted Securities
Legend set forth in Exhibit A hereto (each, a "Global Security"), which shall be
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Trustee, at its corporate trust office, as custodian for the
Depository, and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Global Securities
may from time to time be increased or decreased by endorsements made on such
Global Securities by the Trustee, the Securities Custodian or the Depository or
its nominee as hereinafter provided.
(c) BOOK-ENTRY PROVISIONS. This Section 2.1(c) shall apply only to
Global Securities.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or an agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of the Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(d) CERTIFICATED SECURITIES. Except as provided in Section 2.6,
owners of beneficial interests in Global Securities will not be entitled to
receive certificated Securities bearing the Restricted Securities Legend set
forth in Exhibit A hereto (the "Definitive Securities"). Definitive Securities
will bear the Restricted Securities Legend set forth on Exhibit A unless removed
in accordance with Section 2.6(d) hereof.
SECTION 2.2 Execution and Authentication. Two Officers shall sign
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.
30
<PAGE>
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
The Trustee shall authenticate and deliver: (1) Initial Securities
for original issue in an aggregate principal amount of $200 million and (2)
Exchange Securities for issue only in a Registered Exchange Offer pursuant to
the Registration Rights Agreement, and only in exchange for Initial Securities
of an equal principal amount, in each case upon a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Securities or Exchange Securities. The aggregate principal amount of Securities
outstanding at any time may not exceed $200 million except as provided in
Section 2.7.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent.
SECTION 2.3 Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the
31
<PAGE>
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.7. The Company or any of its domestically
incorporated Wholly Owned Restricted Subsidiaries may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4 Paying Agent to Hold Money in Trust. By at least 10:00
A.M. (New York City time) on the date on which any principal of or interest on
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
(other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money delivered to the Trustee. Upon any
bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.5 Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.6 Transfer and Exchange.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive
Securities are presented by a Holder to the Registrar or a co-registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
32
<PAGE>
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that:
(i) such Definitive Securities shall be duly endorsed or accompanied
by a written instrument of transfer in form reasonably satisfactory to the
Company and the Registrar or co-registrar, duly executed by such Holder or
his attorney duly authorized in writing; and
(ii) if such Definitive Securities are Transfer Restricted
Securities, such Definitive Securities shall also be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Securities are being delivered
to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in the form set forth on the reverse of the Security); or
(B) if such Transfer Restricted Securities are being
transferred (x) to the Company or to a QIB in accordance with Rule
144A under the Securities Act or (y) pursuant to an effective
registration statement under the Securities Act, a certification
from such Holder to that effect (in the form set forth on the
reverse of the Security); or
(C) if such Transfer Restricted Securities are being
transferred (w) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act;
(x) to an institutional "accredited investor" as defined in
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act (an "IAI"); or (y) in reliance on another exemption
from the registration requirements of the Securities Act: (i) a
certification to that effect from such Holder (in the form
33
<PAGE>
set forth on the reverse of the Security) and (ii) if the Company or
the Trustee so requests, an Opinion of Counsel reasonably acceptable
to the Company and to the Trustee to the effect that such transfer
is in compliance with the Securities Act.
(b) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depository, in accordance
with this Indenture (including applicable restrictions on transfer set
forth herein, if any) and the procedures of the Depository therefor.
(ii) A Global Security deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof only if such transfer
complies with this Section 2.6 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is
not appointed by the Company within 90 days of such notice and the Company
notifies the Trustee in writing of such circumstances, (ii) the Company,
at its option, notifies the Trustee in writing that it elects to cause the
issuance of Securities in definitive form or (iii) an Event of Default has
occurred and is continuing and the Registrar has received a request from
the Depository or the Trustee to issue Definitive Securities.
(iii) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee to be so transferred, in whole or from time to
time in part, without charge, and the Company shall sign and the Trustee
shall authenticate and deliver, upon such transfer of each portion of such
Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations. Each Definitive Security delivered
in exchange for any portion of a Global Security transferred pursuant to
this Section shall be executed, authenticated and delivered only in
denominations of $1,000 and any integral multiple thereof and shall be
registered in such names as the Depository shall direct. Any Definitive
Security delivered in exchange for an
34
<PAGE>
interest in the Global Security shall, except as otherwise provided in
Section 2.6(d), bear the Restricted Securities Legend set forth in Exhibit
A hereto.
(iv) The registered Holder of a Global Security may grant proxies
and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Securities.
(v) In the event of the occurrence of any of the events specified in
Section 2.6(b)(ii), the Company will promptly make available to the
Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without interest coupons.
(c) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (b) of this Section 2.6), a Global Security
may not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee by the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(d) Legend.
(i) Except as permitted by the following paragraph (ii) each
Security certificate evidencing Global Securities and Definitive
Securities (and all Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
WHICH IS TWO YEARS (OR SUCH SHORTER PERIOD THAT
35
<PAGE>
MAY HEREAFTER BE PROVIDED UNDER RULE 144(K) (OR ANY SUCCESSOR
PROVISION THEREOF) AS PERMITTING THE RESALE BY NON-AFFILIATES OF
RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR
ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION
DATE"), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED
IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" ("IAI") WITHIN THE MEANING OF
SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF SUCH AN IAI, IN EACH CASE, IN A TRANSACTION INVOLVING A
MINIMUM PURCHASE PRICE OF $250,000 FOR SUCH NOTES, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFERS OR SALE IN CONNECTION
WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND OTHERWISE IN COMPLIANCE WITH
OTHER APPLICABLE LAWS, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act or pursuant to an
effective registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof
to exchange such Transfer
36
<PAGE>
Restricted Security for a Definitive Security that does not bear the
legend set forth in paragraph (i) above and rescind any restriction
on the transfer of such Security; and
(B) in the case of any such Transfer Restricted Security
represented by a Global Security, such Transfer Restricted Security
shall not be required to bear the legend set forth in paragraph (i)
above, although it shall continue to be subject to the provisions of
Section 2.6(b) hereof.
(e) CANCELLATION OR ADJUSTMENT OF GLOBAL SECURITY. At such time as
all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or canceled, such Global Security
shall be retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, redeemed, repurchased or canceled, the principal amount
of Securities represented by such Global Security shall be reduced and an
endorsement shall be made on such Global Security by the Securities Custodian to
reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall, subject to the other terms and conditions of this Article II,
execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company, Registrar or
co-registrar may require payment of a sum sufficient to cover any transfer
tax, assessments, or similar governmental charge payable in connection
therewith (other than any such transfer taxes or similar governmental
charges payable upon exchange or transfer pursuant to Sections 4.6, 4.8 or
9.5 or pursuant to paragraph 5 of the Securities).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article III,
except the
37
<PAGE>
unredeemed portion of any Definitive Security being redeemed in part, or
(b) any Security for a period beginning (1) 15 Business Days before the
mailing of a notice of an offer to repurchase or redeem Securities and
ending at the close of business on the day of such mailing or (2) 15
Business Days before an interest payment date and ending on such interest
payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for
all other purposes whatsoever, whether or not such Security is overdue,
and none of the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(vi) NO OBLIGATION OF THE TRUSTEE. (i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security,
a member of, or a participant in, the Depository or other Person with
respect to the accuracy of the records of the Depository or its nominee or
of any participant or member thereof, with respect to any ownership
interest in the Securities or with respect to the delivery to any
participant, member, beneficial owner or other Person (other than the
Depository) of any notice (including any notice of redemption) or the
payment of any amount or delivery of any Securities (or other security or
property) under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to
Holders in respect of the Securities shall be given or made only to or
upon the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of beneficial
owners in any Global Security shall be exercised only through the
Depository subject to the applicable rules and procedures of the
Depository. The Trustee may rely and shall be fully protected in relying
upon information furnished the Depository with respect to its members,
participants and any beneficial owners.
38
<PAGE>
(vii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
SECTION 2.7 Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security. Every replacement Security is
an additional obligation of the Company.
SECTION 2.8 Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or
39
<PAGE>
portions thereof) cease to be outstanding and interest on them ceases to accrue.
SECTION 2.9 Temporary Securities. Until Definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and deliver in exchange therefor, one or more
Definitive Securities representing an equal principal amount of Securities.
Until so exchanged, the Holder of temporary Securities shall in all respects be
entitled to the same benefits under this Indenture as a holder of Definitive
Securities.
SECTION 2.10 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.
SECTION 2.11 Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed (or upon the Company's failure to do so the Trustee shall fix)
any such special record date and payment date to the reasonable satisfaction of
the Trustee which specified record date shall not be less than 10 days prior to
the payment date for such defaulted interest and shall promptly mail or cause to
be mailed to each Securityholder a notice that states the special record date,
the payment date and the amount of
40
<PAGE>
defaulted interest to be paid. The Company shall notify the Trustee in writing
of the amount of defaulted interest proposed to be paid on each Security and the
date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when so deposited to be held in trust for the benefit of the
Person entitled to such defaulted interest as provided in this Section.
SECTION 2.12 CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders,
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
ARTICLE III
REDEMPTION
SECTION 3.1 Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date and the principal amount of Securities
to be redeemed.
The Company shall give each notice to the Trustee provided for in
this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply with
the conditions herein. If fewer than all the Securities are to be redeemed, the
record date relating to such redemption shall be selected by the Company and set
forth in the related notice given to the Trustee, which record date shall be not
less than 15 days after the date of such notice.
SECTION 3.2 Selection of Securities To be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or
41
<PAGE>
by a method that complies with applicable legal and securities exchange
requirements, if any, and that the Trustee considers fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances; provided, however, that if a partial redemption is
made with the proceeds of an Equity Offering, selection of the Securities or
portion thereof for redemption shall be made by the Trustee only on a pro rata
basis, unless such method is otherwise prohibited. The Trustee shall make the
selection from outstanding Securities not previously called for redemption. The
Trustee may select for redemption portions of the principal of Securities that
have denominations larger than $1,000. Securities and portions of them the
Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000.
Provisions of this Indenture that apply to the entirety of Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
SECTION 3.3 Notice of Redemption. At least 30 days but not more than
60 days prior to the date fixed for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail, postage prepaid, to each Holder
of Securities to be redeemed at the last address for such Holder then shown on
the Registrar's books.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) the subparagraph of the Securities pursuant to which such
redemption is being made;
(6) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to
be redeemed;
(7) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture , interest on Securities (or
42
<PAGE>
portion thereof) called for redemption ceases to accrue on and after the
redemption date;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request at least seven days prior to the date on
which such notice is to be given, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.4 Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date;
provided that if the redemption date is after a regular record date and on or
prior to the interest payment date, the accrued interest shall be payable to the
Securityholder of the redeemed Securities registered on the relevant record
date. Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 3.5 Deposit Of Redemption Price. By at least 10:00 A.M. (New
York City time) on the date on which any principal of or interest on any
Security is due and payable, the Company shall deposit with the Paying Agent
(or, if the Company or a Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which are owned by the Company or a
Subsidiary and have been delivered by the Company or such Subsidiary to the
Trustee for cancellation.
If the Company complies with the preceding paragraph, then, unless
the Company defaults in the payment of such redemption price or the Paying Agent
is prohibited from making such payment, interest on the Securities to be
redeemed will cease to accrue on and after the applicable redemption date,
whether or not such Securities are presented for payment.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company
43
<PAGE>
shall execute and the Trustee shall authenticate for the Holder (at the
Company's expense) a new Security equal in a principal amount to the unredeemed
portion of the Security surrendered.
ARTICLE IV
COVENANTS
SECTION 4.1 Payment of Securities. The Company shall promptly pay
the principal of (and premium, if any) and interest on the Securities on the
dates and in the manner provided in the Securities and in this Indenture.
Principal (and premium, if any) and interest shall be considered paid on the
date due if on such date the Trustee or the Paying Agent holds in accordance
with this Indenture money sufficient to pay all principal (and premium, if any)
and interest then due and the Trustee or the Paying Agent, as the case may be,
is not prohibited from paying such money to the Securityholders on that date
pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this
Indenture, the Paying Agent may, to the extent it is required to do so by law,
deduct or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 4.2 Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, create, incur, assume or suffer to
exist any Liens (other than Permitted Liens) of any kind against or upon any of
their respective property or assets, or any proceeds, income or profit therefrom
which secure Senior Subordinated Indebtedness or Subordinated Obligations,
unless (i) in the case of Liens securing Subordinated Obligations, the
Securities are secured by a Lien on such property, assets, proceeds, income or
profit that is senior in priority to such Liens and (ii) in the case of Liens
securing Senior Subordinated Indebtedness, the Securities are equally and
ratably secured by a Lien on such property, assets, proceeds, income or profit.
SECTION 4.3 Limitation on Incurrence of Additional Indebtedness. The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume, guarantee, acquire, become
liable, contingently or
44
<PAGE>
otherwise, with respect to, or otherwise become responsible for payment of
(collectively, "incur") any Indebtedness (other than Permitted Indebtedness);
provided, however, that if no Default or Event of Default shall have occurred
and be continuing at the time or as a consequence of the incurrence of any such
Indebtedness, (i) the Company may incur Indebtedness if on the date of the
incurrence of such Indebtedness, after giving effect to the incurrence thereof,
the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0
to 1.0 and (ii) any Restricted Subsidiary of the Company may incur Indebtedness
if on the date of the incurrence of such Indebtedness, after giving effect to
the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the
Company is greater than 3.0 to 1.0.
SECTION 4.4 Limitation on Restricted Payments. (a) The Company will
not, and will not cause or permit any of its Restricted Subsidiaries to,
directly or indirectly, (a) declare or pay any dividend or make any distribution
(other than dividends or distributions payable in Qualified Capital Stock) on or
in respect of shares of Capital Stock of the Company to holders of such Capital
Stock, (b) purchase, redeem or otherwise acquire or retire for value any Capital
Stock of the Company or any warrants, rights or options to purchase or acquire
shares of any class of such Capital Stock, other than the exchange of such
Capital Stock for Qualified Capital Stock, or (c) make any Investment (other
than Permitted Investments) in any other Person (each of the foregoing actions
set forth in clauses (a), (b) and (c) (other than the exceptions thereto) being
referred to as a "Restricted Payment"), if at the time of such Restricted
Payment or immediately after giving effect thereto, (i) a Default or an Event of
Default shall have occurred and be continuing, (ii) the Company is not able to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.3 or (iii) the aggregate amount of
Restricted Payments made subsequent to the Issue Date shall exceed the sum of:
(w) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated
Net Income shall be a loss, minus 100% of such loss) of the Company earned
subsequent to January 1, 1998 and on or prior to the date the Restricted Payment
occurs (the "Reference Date") (treating such period as a single accounting
period); plus (x) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Subsidiary of the Company) from the
issuance and sale subsequent to January 21, 1998 and on or prior to the
Reference Date of Qualified Capital Stock of the Company (including Capital
Stock issued upon the conversion of convertible Indebtedness or in exchange for
outstanding Indebtedness but excluding net cash proceeds from the sale of
Capital Stock to the extent used to repurchase or acquire shares of Capital
Stock of the Company pursuant to clause (2)(ii) of the next succeeding
paragraph); plus (y) without duplication
45
<PAGE>
of any amounts included in clause (iii)(x) above, 100% of the aggregate net cash
proceeds of any equity contribution received by the Company subsequent to
January 21, 1998 from a holder of the Company's Capital Stock; plus (z) to the
extent that any Investment (other than a Permitted Investment) that was made
after January 21, 1998 is sold for cash or otherwise liquidated or repaid for
cash, the lesser of (A) the cash received with respect to such sale, liquidation
or repayment of such Investment (less the cost of such sale, liquidation or
repayment, if any) and (B) the initial amount of such Investment, but only to
the extent not included in the calculation of Consolidated Net Income. Any net
cash proceeds included in the foregoing clauses (iii)(x) or (iii)(y) shall not
be included in clause (x)(A) or clause (x)(B) of the definition of "Permitted
Investments" to the extent actually utilized to make a Restricted Payment under
this paragraph.
(b) Notwithstanding paragraph (a) above, the provisions set forth in
the immediately preceding paragraph do not prohibit: (1) the payment of
any dividend or the consummation of any irrevocable redemption within 60
days after the date of declaration of such dividend or notice of such
redemption if the dividend or payment of the redemption price, as the case
may be, would have been permitted on the date of declaration or notice;
(2) if no Event of Default shall have occurred and be continuing as a
consequence thereof, the acquisition of any shares of Capital Stock of the
Company, either (i) solely in exchange for shares of Qualified Capital
Stock of the Company, or (ii) through the application of net proceeds of a
substantially concurrent sale (other than to a Subsidiary of the Company)
of shares of Qualified Capital Stock of the Company; (3) payments for the
purpose of and in an amount equal to the amount required to permit the
Company to redeem or repurchase shares of its Capital Stock or options in
respect thereof, in each case in connection with the repurchase provisions
under employee stock option or stock purchase agreements or other
agreements to compensate management employees; provided that such
redemptions or repurchases pursuant to this clause (3) shall not exceed
$15 million in the aggregate after January 21, 1998 (which amount shall be
increased by the amount of any cash proceeds to the Company from (x) sales
of its Capital Stock to management employees subsequent to the Issue Date
and (y) any "key-man" life insurance policies which are used to make such
redemptions or repurchases); (4) the payment of fees and compensation as
permitted under clause (i) of Section 4.7(b); (5) so long as no Default or
Event of Default shall have occurred and be continuing, payments not to
exceed $100,000 in the aggregate, to enable the Company to make payments
to holders of its Capital Stock in lieu of issuance of fractional shares
of its Capital Stock; (6) repurchases of Capital Stock deemed to occur
upon the exercise of stock options if such Capital Stock represents a
46
<PAGE>
portion of the exercise price thereof; (7) Restricted Payments made pursuant to
the Merger Agreement; (8) the Company or any Restricted Subsidiary from making
payments in respect of any redemption, repurchase, acquisition, cancellation or
other retirement for value of shares of Capital Stock of the Company or options,
stock appreciation or similar securities, in each case held by then current or
former officers, directors or employees of the Company or any of its
Subsidiaries (or their estates or beneficiaries under their estates) or by an
employee benefit plan, upon death, disability, retirement or termination of
employment, not to exceed $10 million in the aggregate after January 21, 1998;
(9) repurchases of payment-in-kind preferred stock; provided that (i) such
repurchases do not exceed $15 million in the aggregate over the life of the
Securities and (ii) such preferred stock repurchased shall have been issued on
or prior to January 21, 1998; and (10) the Company or any Restricted Subsidiary
from purchasing all (but not less than all), excluding directors' qualifying
shares, of the Capital Stock or other ownership interests in a Subsidiary of the
Company which Capital Stock or other ownership interests were not theretofore
owned by the Company or a Subsidiary of the Company, such that after giving
effect to such purchase such Subsidiary becomes a Restricted Subsidiary of the
Company. In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date in accordance with clause (iii) of the immediately
preceding paragraph, (a) amounts expended (to the extent such expenditure is in
the form of cash or other property other than Qualified Capital Stock) pursuant
to clauses (1), (3), (8) and (9) of this Section 4.4(b) shall be included in
such calculation, provided that such expenditures pursuant to clause (3) shall
not be included to the extent of cash proceeds received by the Company from any
"key man" life insurance policies and (b) amounts expended pursuant to clauses
(2), (4), (5), (6), (7) and (10) shall be excluded from such calculation.
SECTION 4.5 Limitation on Dividend and Other Payment Restrictions
Affecting Subsidiaries. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit to exist or become effective any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock; (b) make loans or advances
or to pay any Indebtedness or other obligation owed to the Company or any other
Restricted Subsidiary of the Company; or (c) transfer any of its property or
assets to the Company or any other Restricted Subsidiary of the Company, except
for such encumbrances or restrictions existing under or by reason of: (1)
applicable law; (2) this Indenture; (3) non-assignment provisions of any
contract or any lease entered into in the ordinary course of business; (4) any
instrument governing
47
<PAGE>
Acquired Indebtedness, which encumbrance or restriction is not applicable to the
Company or any Restricted Subsidiary of the Company, or the properties or assets
of any such Person, other than the Person or the properties or assets of the
Person so acquired; provided, however, that such Acquired Indebtedness was not
incurred in connection with, or in anticipation or contemplation of an
acquisition by the Company or the Restricted Subsidiary; (5) agreements existing
on the Issue Date (including, without limitation, the New Credit Facility and
the Merger Agreement); (6) restrictions on the transfer of assets subject to any
Lien permitted under this Indenture imposed by the holder of such Lien; (7)
restrictions imposed by any agreement to sell assets permitted under this
Indenture to any Person pending the closing of such sale; (8) any agreement or
instrument governing Capital Stock of any Person that is acquired after the
Issue Date; (9) Indebtedness or other contractual requirements of a Receivables
Entity in connection with a Qualified Receivables Transaction; provided that
such restrictions apply only to such Receivables Entity and such Restricted
Subsidiary is engaged in the Qualified Receivables Transaction; or (10) an
agreement effecting a refinancing, replacement or substitution of Indebtedness
issued, assumed or incurred pursuant to an agreement referred to in clause (2),
(4) or (5) above; provided, however, that the provisions relating to such
encumbrance or restriction contained in any such refinancing, replacement or
substitution agreement are no less favorable to the Company or the Holders in
any material respect as determined by the Board of Directors of the Company than
the provisions relating to such encumbrance or restriction contained in
agreements referred to in such clause (2), (4) or (5).
SECTION 4.6 Limitation on Asset Sales. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless (i) the Company or the applicable Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of (as determined in
good faith by the Company's Board of Directors), (ii) at least 75% of the
consideration received by the Company or such Restricted Subsidiary, as the case
may be, from such Asset Sale shall be cash or Cash Equivalents and is received
at the time of such disposition; provided that the amount of (x) any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet or in the notes thereto) of the Company or such Restricted Subsidiary
(other than liabilities that are by their terms subordinated to the Securities)
that are assumed by the transferee of any such assets and from which the Company
and its Restricted Subsidiaries are unconditionally released and (y) any notes
or other obligations received by the Company or such Restricted Subsidiary from
such transferee that are promptly, but in no event more than 60 days
48
<PAGE>
after receipt, converted by the Company or such Restricted Subsidiary into cash
or Cash Equivalents (to the extent of the cash or Cash Equivalents received)
shall be deemed to be cash for purposes of this provision; and (iii) upon the
consummation of an Asset Sale, the Company shall apply, or cause such Restricted
Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within
365 days of receipt thereof either (A) to prepay Senior Indebtedness and, in the
case of any Senior Indebtedness under any revolving credit facility, effect a
permanent reduction in the availability under such revolving credit facility,
(B) to reinvest in Productive Assets, or (C) a combination of prepayment and
investment permitted by the foregoing clauses (iii)(A) and (iii)(B). On the
366th day after an Asset Sale or such earlier date, if any, as the Board of
Directors of the Company or of such Restricted Subsidiary determines not to
apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses
(iii)(A), (iii)(B) and (iii)(C) of the immediately preceding sentence (each, a
"Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds
which have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (iii)(A), (iii)(B) and (iii)(C) of the immediately
preceding sentence (each a "Net Proceeds Offer Amount") shall be applied by the
Company or such Restricted Subsidiary to make an offer to purchase for cash (the
"Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less
than 30 nor more than 45 days following the applicable Net Proceeds Offer
Trigger Date, from all Holders on a pro rata basis at least that amount of
Securities equal to the Note Offer Amount at a price in cash equal to 100% of
the principal amount of the Securities to be purchased, plus accrued and unpaid
interest thereon, if any, to the date of purchase; provided, however, that if at
any time any non-cash consideration received by the Company or any Restricted
Subsidiary of the Company, as the case may be, in connection with any Asset Sale
is converted into or sold or otherwise disposed of for cash (other than interest
received with respect to any such non-cash consideration), then such conversion
or disposition shall be deemed to constitute an Asset Sale hereunder and the Net
Cash Proceeds thereof shall be applied in accordance with this Section 4.6(a).
Any offer to purchase with respect to Other Debt shall be made and consummated
concurrently with any Net Proceeds Offer.
"Other Debt" shall mean other Indebtedness of the Company that ranks
pari passu with the Securities and requires that an offer to purchase such Other
Debt be made upon consummation of an Asset Sale.
"Note Offer Amount" means (i) if an offer to purchase Other Debt is
not being made, the amount of the Net Proceeds
49
<PAGE>
Offer Amount and (ii) if an offer to purchase Other Debt is being made, an
amount equal to the product of (x) the Net Proceeds Offer Amount and (y) a
fraction the numerator of which is the aggregate amount of Securities tendered
pursuant to such offer to purchase and the denominator of which is the aggregate
amount of Securities and Other Debt tendered pursuant to such offer to purchase.
Notwithstanding the foregoing, if a Net Proceeds Offer Amount is
less than $10 million, the application of the Net Cash Proceeds constituting
such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until
such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net
Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date
relating to such initial Net Proceeds Offer Amount from all Asset Sales by the
Company and its Restricted Subsidiaries aggregates at least $10 million, at
which time the Company or such Restricted Subsidiary shall apply all Net Cash
Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred
to make a Net Proceeds Offer (the first date the aggregate of all such deferred
Net Proceeds Offer Amounts is equal to $10 million or more shall be deemed to be
a "Net Proceeds Offer Trigger Date").
Notwithstanding the immediately preceding paragraphs of this Section
4.6(a), the Company and its Restricted Subsidiaries will be permitted to
consummate an Asset Sale without complying with such paragraphs to the extent
(i) at least 75% of the consideration for such Asset Sale constitutes Productive
Assets and (ii) such Asset Sale is for at least fair market value (as determined
in good faith by the Company's Board of Directors); provided that any
consideration not constituting Productive Assets received by the Company or any
of its Restricted Subsidiaries in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Cash Proceeds and shall be
subject to the provisions of the preceding paragraphs; provided, that at the
time of entering into such transaction or immediately after giving effect
thereto, no Default or Event of Default shall have occurred or be continuing or
would occur as a consequence thereof.
(b) Each Net Proceeds Offer will be mailed to the record Holders as
shown on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date, with a copy to the Trustee, and shall comply with the procedures
set forth in this Indenture. Upon receiving notice of the Net Proceeds Offer,
Holders may elect to tender their Securities in whole or in part in integral
multiples of $1,000 in exchange for cash. To the extent Holders properly tender
securities in an amount exceeding the Note Offer Amount, Securities of tendering
Holders will be purchased on a pro rata basis (based on amounts tendered). A Net
50
<PAGE>
Proceeds Offer shall remain open for a period of 20 Business Days or such longer
period as may be required by law. To the extent that the aggregate amount of
Securities tendered pursuant to a Net Proceeds Offer is less than the Net
Proceeds Offer Amount, the Company may use any remaining Net Proceeds Offer
Amount for general corporate purposes. Upon completion of any such Net Proceeds
Offer, the Net Proceeds Offer Amount shall be reset at zero.
(c) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Net Proceeds Offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.6, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.6 by virtue thereof.
SECTION 4.7 Limitation on Transactions with Affiliates. (a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction or series
of related transactions (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with, or for
the benefit of, any of its Affiliates (an "Affiliate Transaction"), other than
(x) Affiliate Transactions permitted under paragraph (b) below and (y) Affiliate
Transactions entered into on terms that are fair and reasonable to, and in the
best interests of, the Company or such Restricted Subsidiary, as the case may
be, as determined in good faith by the Company's Board of Directors; provided,
however, that for a transaction or series of related transactions with an
aggregate value of $5 million or more, at the Company's option (i) such
determination shall be made in good faith by a majority of the disinterested
members of the Board of the Directors of the Company or (ii) the Board of
Directors of the Company or any such Restricted Subsidiary party to such
Affiliate Transaction shall have received a favorable opinion from a nationally
recognized investment banking firm that such Affiliate Transaction is fair from
a financial point of view to the Company or such Restricted Subsidiary;
provided, further, that for a transaction or series of related transactions with
an aggregate value of $15 million or more, the Board of Directors of the Company
shall have received a favorable opinion from a nationally recognized investment
banking firm that such Affiliate Transaction is fair from a financial point of
view to the Company or such Restricted Subsidiary.
51
<PAGE>
(b) The foregoing restrictions shall not apply to (i) reasonable
fees and compensation paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Subsidiary of the
Company as determined in good faith by the Company's Board of Directors; (ii)
transactions exclusively between or among the Company and any of its Restricted
Subsidiaries or exclusively between or among such Restricted Subsidiaries,
provided such transactions are not otherwise prohibited by this Indenture; (iii)
transactions effected as part of a Qualified Receivables Transaction; (iv) any
agreement as in effect as of the Issue Date or any amendment thereto or any
transaction contemplated thereby (including pursuant to any amendment thereto)
in any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any material
respect than the original agreement as in effect on the Issue Date; (v)
Restricted Payments permitted by this Indenture; (vi) any Permitted Investment;
(vii) transactions permitted by, and complying with, the provisions of Section
5.1; (viii) any payment, issuance of securities or other payments, awards or
grants, in cash or otherwise, pursuant to, or the funding of, employment
arrangements and Plans approved by the Board of Directors of the Company; (ix)
the grant of stock options or similar rights to employees and directors of the
Company and its Subsidiaries pursuant to Plans and employment contracts approved
by the Board of Directors of the Company; (x) loans or advances to officers,
directors or employees of the Company or its Restricted Subsidiaries not in
excess of $5 million at any one time outstanding; (xi) the granting or
performance of registration rights under a written registration rights agreement
approved by the Board of Directors of the Company; (xii) transactions with
Persons solely in their capacity as holders of Indebtedness or Capital Stock of
the Company or any of its Restricted Subsidiaries, where such Persons are
treated no more favorably than holders of Indebtedness or Capital Stock of the
Company or such Restricted Subsidiary generally; (xiii) any agreement to do any
of the foregoing; (xiv) the payment, on a quarterly basis, of management fees to
THL Co. and/or any Affiliate of THL Co. in accordance with the management
arrangements entered into in January 1998 between THL Co. and/or any Affiliate
of THL Co. and the Company in an aggregate amount (for all such Persons taken
together) not to exceed $250,000 in any fiscal quarter of the Company; (xv)
reimbursement of THL Co. and/or any Affiliate of THL Co. for their reasonable
out-of-pocket expenses incurred by them in connection with performing management
services for the Company and its Subsidiaries; and (xvi) the payment of one time
fees to THL Co. and/or Affiliates of THL Co. in connection with each acquisition
of a company or a line of business by the Company or its Subsidiaries, such fees
to be payable at the time of each such acquisition and not to exceed
52
<PAGE>
1% of the aggregate consideration paid by the Company and its Subsidiaries for
any such acquisition.
SECTION 4.8 Change of Control. (a) Upon the occurrence of a Change
of Control Triggering Event, each Holder will have the right to require that the
Company purchase for cash all or a portion of such Holder's Securities pursuant
to the offer described below (the "Change of Control Offer"), at a purchase
price in cash equal to 101% of the principal amount thereof plus accrued
interest to the date of purchase. Prior to the mailing of the notice referred to
below, but in any event within 30 days following the date the Company obtains
actual knowledge of any Change of Control Triggering Event, the Company
covenants to (i) repay in full and terminate all commitments under the Bank
Indebtedness or offer to repay in full and terminate all commitments under all
Bank Indebtedness and to repay the Bank Indebtedness owed to each holder of Bank
Indebtedness which has accepted such offer or (ii) obtain the requisite consents
under the New Credit Facility to permit the repurchase of the Securities as
provided below. The Company shall first comply with the covenant in the
immediately preceding sentence before it shall be required to repurchase
Securities pursuant to the provisions described below. The Company's failure to
comply with this Section 4.8 shall constitute an Event of Default under Section
6.1(4) and not under 6.1(2).
(b) Within 30 days following the date the Company obtains actual
knowledge that a Change of Control Triggering Event has occurred, the Company
must send, by first class mail, a notice to each Holder, with a copy to the
Trustee, which notice shall govern the terms of the Change of Control Offer.
Such notice shall state, among other things, the purchase date, which must be no
earlier than 30 days nor later than 45 days from the date such notice is mailed,
other than as may be required by law (the "Change Of Control Payment Date").
Holders electing to have a Security purchased pursuant to a Change of Control
Offer will be required to surrender the Security, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Security completed, to the
Paying Agent at the address specified in the notice prior to the close of
business on the third business day prior to the Change of Control Payment Date.
(c) The Company will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with the
repurchase of Securities pursuant to a Change of Control Offer. To the extent
that the provisions of any securities laws or regulations conflict with this
Section 4.8, the Company shall comply with the applicable securities laws and
regulations and shall not be
53
<PAGE>
deemed to have breached its obligations under this Section 4.8 by virtue
thereof.
SECTION 4.9 Prohibition on Incurrence of Senior Subordinated Debt.
Neither the Company nor any Subsidiary Guarantor will incur or suffer to exist
Indebtedness that is senior in right of payment to the Securities or such
Subsidiary Guarantor's Guarantee and subordinate in right of payment to any
other Indebtedness of the Company or such Subsidiary Guarantor, as the case may
be.
SECTION 4.10 Limitation on Preferred Stock of Subsidiaries. The
Company will not permit any of its Restricted Subsidiaries to issue any
Preferred Stock (other than to the Company or to a Restricted Subsidiary of the
Company) or permit any Person (other than the Company or a Restricted Subsidiary
of the Company) to own any Preferred Stock of any Restricted Subsidiary of the
Company.
SECTION 4.11 Limitation on Guarantees by Restricted Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries, directly or
indirectly, to guarantee the payment of any Indebtedness of the Company, other
than guarantees incurred pursuant to clause (ii) of the definition of "Permitted
Indebtedness" unless such Restricted Subsidiary, the Company and the Trustee
execute and deliver a supplemental indenture evidencing such Restricted
Subsidiary's guarantee of the Securities (a "Guarantee"), such Guarantee to be a
senior subordinated unsecured obligation of such Restricted Subsidiary; provided
that if any Subsidiary Guarantor is released from its guarantee with respect to
Indebtedness outstanding under the New Credit Facility and all other
Indebtedness of the Company, such Subsidiary Guarantor shall automatically be
released from its obligations as a Subsidiary Guarantor. Neither the Company nor
any such Subsidiary Guarantor shall be required to make a notation on the
Securities to reflect any such Guarantee. Nothing in this Section 4.11 shall be
construed to permit any Restricted Subsidiary of the Company to incur
Indebtedness otherwise prohibited by Section 4.3.
SECTION 4.12 Conduct of Business. The Company and its Restricted
Subsidiaries will not engage in any businesses which are not the same, similar,
related or ancillary to the businesses in which the Company and its Restricted
Subsidiaries are engaged on the Issue Date.
SECTION 4.13 Maintenance of Office or Agency. The Company shall
maintain the office or agency required under Section 2.3. The Company shall give
prior written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time the Company shall fail to
54
<PAGE>
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 13.2.
SECTION 4.14 Corporate Existence. Except as otherwise permitted by
Article V, the Company shall do or cause to be done, at its own cost and
expense, all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate existence of each of its Restricted
Subsidiaries in accordance with the respective organizational documents of each
such Restricted Subsidiary and the material rights (charter and statutory) and
franchises of the Company and each such Restricted Subsidiary; provided,
however, that the Company shall not be required to preserve, with respect to
itself, any material right or franchise and, with respect to any of its
Restricted Subsidiaries, any such existence, material right or franchise, if the
Board of Directors of the Company shall determine in good faith that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and the Subsidiaries, taken as a whole.
SECTION 4.15 Payment of Taxes and Other Claims. The Company shall
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and additions to taxes)
levied or imposed upon it or any of its Restricted Subsidiaries or properties of
it or any of its Restricted Subsidiaries and (ii) any lawful claims for labor,
materials and supplies that, if unpaid, might by law become a Lien upon the
property of it or any of its Restricted Subsidiaries; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which adequate reserves, to the extent
required under GAAP, have been taken.
SECTION 4.16 Maintenance of Properties and Insurance. (a) The
Company shall, and shall cause each of its Restricted Subsidiaries to, maintain
its material properties in good working order and condition (subject to ordinary
wear and tear) and make all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto and actively conduct and carry
on its business; provided, however, that nothing in this Section 4.16 shall
prevent the Company or any of its Restricted Subsidiaries from discontinuing the
operation and maintenance of any of its properties, if such discontinuance is,
in the good faith judgment of the Board of Directors of the Company or the
55
<PAGE>
Restricted Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect to the
Holders.
(b) The Company shall provide or cause to be provided, for itself
and each of its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Board of Directors of the Company, are adequate and appropriate
for the conduct of the business of the Company and such Restricted Subsidiaries
of the Company in a prudent manner, with reputable insurers or with the
government of the United States of America or any agency or instrumentality
thereof, in such amounts, with such deductibles, and by such methods as shall be
customary, in the good faith judgment of the Board of Directors of the Company,
for companies similarly situated in the industry.
SECTION 4.17 Compliance With Laws. The Company shall comply, and
shall cause each of its Restricted Subsidiaries to comply, with all applicable
statutes, rules, regulations, orders and restrictions of the United States of
America, all states and municipalities thereof, and of any governmental
department, commission, board, regulatory authority, bureau, agency and
instrumentality of the foregoing, in respect of the conduct of their respective
businesses and the ownership of their respective properties, except for such
noncompliances as are not in the aggregate reasonably likely to have a material
adverse effect on the financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole.
SECTION 4.18. Additional Information. The Company will deliver to
the Trustee within 15 days after the filing of the same with the Commission,
copies of the quarterly and annual reports and of the information, documents and
other reports, if any, which the Company is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. Notwithstanding that the
Company may not be subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, the Company will file with the Commission, to the extent
permitted, and provide the Trustee and Holders with such annual reports and such
information, documents and other reports specified in Sections 13 and 15(d) of
the Exchange Act. The Company will also comply with the other provisions of TIA
Section 314(a).
SECTION 4.19. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
56
<PAGE>
ARTICLE V
SUCCESSOR COMPANY
SECTION 5.1. When Company May Merge or Transfer Assets. (a) The
Company will not, in a single transaction or a series of related transactions,
consolidate with or merge with or into, or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its assets to, another
Person or Persons unless:
(i) either (A) the Company shall be the survivor of such merger or
consolidation or (B) the surviving Person is a corporation existing under
the laws of the United States, any state thereof or the District of
Columbia and such surviving Person shall expressly assume all the
obligations of the Company under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (on a pro
forma basis, including any Indebtedness incurred or anticipated to be
incurred in connection with such transaction and the other adjustments
referred to in the definition of "Consolidated Fixed Charge Coverage
Ratio"), the Company or the surviving Person is able to incur at least
$1.00 of additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.3;
(iii) immediately before and immediately after giving effect to such
transaction (including any Indebtedness incurred or anticipated to be
incurred in connection with the transaction), no Default or Event of
Default shall have occurred and be continuing; and
(iv) the Company has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel, each stating that such consolidation,
merger or transfer complies with this Indenture, that the surviving Person
agrees to be bound thereby and by the Securities and the Registration
Rights Agreement, and that all conditions precedent in this Indenture
relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties and assets of one or more Subsidiaries of
the Company, the
57
<PAGE>
Capital Stock of which constitutes all or substantially all of the properties
and assets of the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company. Notwithstanding
the foregoing clauses (ii) and (iii) above, (a) any Restricted Subsidiary of the
Company may consolidate with, merge into or transfer all or part of its
properties and assets to the Company and (b) the Company may merge with an
Affiliate that is (x) a corporation that has no material assets or liabilities
and which was incorporated solely for the purpose of reincorporating the Company
in another jurisdiction or (y) a Restricted Subsidiary of the Company so long as
all assets of the Company and the Restricted Subsidiaries immediately prior to
such transaction are owned by such Restricted Subsidiary and its Restricted
Subsidiaries immediately after the consummation thereof.
(b) Upon any consolidation, combination or merger or any transfer of
all or substantially all of the assets of the Company in accordance with the
foregoing, the surviving entity shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture and the
Securities with the same effect as if such surviving entity had been named as
such.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest (including
liquidated damages, if any, under the Registration Rights Agreement) on
any Security when the same becomes due and payable, whether or not such
payment shall be prohibited by Article X, and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon redemption or otherwise (including the failure to make a payment to
purchase Securities tendered, pursuant to a Change of Control Offer or a
Net Proceeds Offer), whether or not such payment shall be prohibited by
Article X;
(3) the Company defaults in the observance or performance of the
covenant set forth in Section 5.1;
58
<PAGE>
(4) the Company defaults in the observance or performance of any
other covenant or agreement contained in this Indenture, which default
continues for a period of 30 days after the Company receives written
notice specifying the default (and demanding that such default be
remedied) from the Trustee or the Holders of at least 25% of the
outstanding principal amount of the Securities;
(5) the Company fails to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary (other
than a Receivables Entity) of the Company, or the acceleration of the
final stated maturity of any such Indebtedness if the aggregate principal
amount of such Indebtedness, together with the principal amount of any
other such Indebtedness in default or failure to pay principal at final
maturity or which has been accelerated, aggregates $15 million or more at
any time;
(6) one or more judgments in an aggregate amount in excess of $15
million shall have been rendered against the Company or any of its
Significant Subsidiaries and such judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become
final and non-appealable, and in the event such judgment is covered by
insurance, an enforcement proceeding has been commenced by any creditor
upon such judgment which is not promptly stayed;
(7) the Company or a Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of judgment, decree or order for
relief against it in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
59
<PAGE>
(E) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it;
(F) takes any corporate action to authorize or effect any of
the foregoing;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company
or any Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant any judgment, decree or order of any to
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Title 11, UNITED STATES CODE, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default.
SECTION 6.2. Acceleration. (a) If an Event of Default (other than an
Event of Default specified in 6.1(7) or
60
<PAGE>
(8) with respect to the Company) occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of outstanding Securities may
declare the principal of and accrued interest on all the Securities to be due
and payable by notice in writing to the Company and the Trustee specifying the
respective Event of Default and that it is a "notice of acceleration", and the
same shall become immediately due and payable.
(b) If an Event of Default specified in Sections 6.1(7) and (8) with
respect to the Company occurs and is continuing, then the principal of and
accrued interest on all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any holder of Securities.
(c) At any time after a declaration of acceleration with respect to the
Securities as described in Section 6.2(a) or (b) above, the Holders of a
majority in principal amount of the Securities may rescind and cancel such
declaration and its consequences (i) if the rescission would not conflict with
any judgment or decree, (ii) if all existing Events of Default have been cured
or waived except nonpayment of principal or interest that has become due solely
because of the acceleration, (iii) to the extent the payment of such interest is
lawful, interest on overdue installments of interest and overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, (iv) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its expenses, disbursements and advances and (v)
in the event of the cure or waiver of an Event of Default of the type described
in Section 6.1(6), (7) or (8), the Trustee shall have received an Officers'
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
61
<PAGE>
SECTION 6.4. Waiver of Past Defaults. Subject to Sections 6.7 and
9.2, the holders of a majority in principal amount of the Securities may waive
any existing Default or Event of Default under this Indenture, and its
consequences, except (i) a default in the payment of the principal of or
interest on any Securities or (ii) a Default or Event of Default in respect of a
provision that under Section 9.2 cannot be amended without the consent of each
Securityholder affected. When a Default or Event of Default is waived, it is
deemed cured, but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any consequent right. This paragraph of this
Section 6.4 shall be in lieu of ss. 316(a)(1)(B) of the TIA and such ss.
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, that the Trustee determines is unduly prejudicial to the
rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action. This Section 6.5 shall be in lieu of ss.
316(a)(1)(A) of the TIA, and such ss. 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
SECTION 6.6. Limitation on Suits. A Securityholder may not pursue
any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
62
<PAGE>
(2) the Holders of at least 25%; in outstanding principal amount of
the Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 45 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during
such 45-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the
63
<PAGE>
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness to the extent required by
Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities far principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company or any other obligors on the Securities as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more
than 10% in outstanding principal amount of the Securities.
64
<PAGE>
ARTICLE VII
TRUSTEE
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
65
<PAGE>
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good
66
<PAGE>
faith and in accordance with the advice or opinion of such counsel.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or Event of Default
occurs and is continuing the Trustee shall mail to each Securityholder notice of
the Default or Event of Default within 30 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of or interest on
any Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as its board of directors, the Executive Committee of its
board of directors or a committee of its Trust Officers in good faith determines
that withholding the notice is in the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA Section 313(a) if such a report is required by that section.
The Trustee also shall comply with TIA Section 313(b). The Trustee shall also
transmit by mail all reports required by TIA Section 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC if required by law and each stock exchange (if any)
on which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
67
<PAGE>
SECTION 7.7. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, costs of preparing and reviewing reports,
certificates and other documents, costs of preparation and mailing-of notices to
Securityholders and reasonable costs of counsel retained by the Trustee in
connection with the delivery of an Opinion of Counsel or otherwise, in addition
to the compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall indemnify the Trustee
against any and all loss, liability or expense (including reasonable attorneys'
fees) incurred by it in connection with the administration of this trust and the
performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) and of defending itself
against any claims (whether asserted by any Securityholder, the Company or
otherwise). The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own willful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or indebtedness of the Company.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the securities may remove the
68
<PAGE>
Trustee by so notifying the Trustee and may appoint a successor Trustee. The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee
or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
69
<PAGE>
SECTION 7.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion, consolidation or transfer to the Trustee shall succeed to the trusts
created by this Indenture, any of the Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, an successor to the Trustee may authenticate such Securities
either in the name of an predecessor hereunder or in the name of the successor
to the Trustee; and in all such cases such certificates shall have the full
force which it is anywhere in the Securities or in this Indenture provided that
the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA Section 310(a). The Trustee shall have
a combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding an creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed shal1
be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.1. Discharge of Liability on Securities. (a) The Company
may terminate its obligations under the Securities and this Indenture, except
those obligations referred to in Section 8.1(b), if all Securities previously
authenticated and delivered (other than destroyed, lost or stolen Securities
70
<PAGE>
which have been replaced or paid or Securities for whose payment money has
theretofore been deposited with the Trustee or the Paying Agent in trust or
segregated and held in trust by the Company and thereafter repaid to the
Company, as provided in Section 8.5) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable by it hereunder, or if:
(i) either (A) pursuant to Article III, the Company shall have given
notice to the Trustee and mailed a notice of redemption to each Holder of
the redemption of all of the Securities under arrangements satisfactory to
the Trustee for the giving of such notice or (B) all Securities have
otherwise become due and payable hereunder;
(ii) the Company shall have irrevocably deposited or caused to be
deposited with the Trustee or a trustee satisfactory to the Trustee, under
the terms of an irrevocable trust agreement in form and substance
satisfactory to the Trustee, as trust funds in trust solely for the
benefit of the Holders for that purpose, money in such amount as is
sufficient without consideration of reinvestment of such money, to pay
principal of, premium on, if any, and interest on the outstanding
Securities to maturity or redemption, as the case may be; provided that
the Trustee shall have been irrevocably instructed to apply such money to
the payment of said principal, premium, if any, and interest with respect
to the Securities and, provided, further, that from and after the time of
deposit, the money deposited shall not be subject to the rights of holders
of Senior Indebtedness pursuant to the provisions of Article X;
(iii) no Default or Event of Default with respect to this Indenture
or the Securities shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company is a party or by which it
is bound;
(iv) the Company shall have paid all other sums payable by it
hereunder; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent providing for the termination of the Company's
71
<PAGE>
obligations under the Securities and this Indenture have been satisfied.
Such Opinion of Counsel shall also state that such satisfaction and
discharge does not result in a default under the New Credit Facility (if
then in effect) or any other agreement or instrument then known to such
counsel that binds or affects the Company.
(b) Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.2, 2.5, 2.6, 2.7, 2.8, 4.1, 4.13, 4.14, 4.15, 4.17,
7.7, 8.4, 8.5, and 8.6 shall survive until the Securities are no longer
outstanding pursuant to the last paragraph of Section 2.8. After the Securities
are no longer outstanding, the Company's obligations in Sections 7.7, 8.4, 8.5,
and 8.6 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
SECTION 8.2. Legal Defeasance and Covenant Defeasance. (a) The
Company may, at its option by Board Resolution of the Board of Directors of the
Company, at any time, elect to have either paragraph (b) or (c) below be applied
to all outstanding Securities upon compliance with the conditions set forth in
Section 8.3.
(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.3, be deemed to have been
discharged from its obligations with respect to all outstanding Securities on
the date the conditions-set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Securities, which shall thereafter be deemed to be "outstanding"
only for the purposes of Section 8.4 hereof and the other Sections of this
Indenture referred to in (i) through (iv) below, and to have satisfied all its
other obligations under such Securities and this Indenture (and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging the same), and the following provisions shall survive until
otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Securities to receive solely from the trust fund described in
Sections 8.3 and 8.4 hereof, and as more fully set forth in such Sections,
payments in respect of the principal of (and premium, if any, on) and interest
on such Securities when such payments are due, (ii) the Company's obligations
with respect to such Securities under Article II and
72
<PAGE>
Section 4.13 hereof, (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's obligations in connection therewith and
(iv) this Article VIII. The Holders of the Securities and any amounts deposited
under Section 8.3 hereof shall cease to be subject to any obligations to, or the
rights of, any holder of Senior Indebtedness or Guarantor Senior Indebtedness
under Article X or otherwise. Subject to compliance with this Article VIII, the
Company may exercise its option under this paragraph (b) notwithstanding the
prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in section 8.3 hereof, be released from
its obligations under the covenants contained in Sections 4.2 through 4.12 and
Article V hereof with respect to the outstanding Securities on and after the
date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Securities shall thereafter be deemed not "outstanding"
for the purposes of any direction, waiver, consent or declaration or act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "outstanding" for all other purposes hereunder
(it being understood that such Securities shall not be deemed outstanding for
accounting purposes) and Holders of the Securities and any amounts deposited
under Sections 8.3 and 8.4 hereof shall cease to be subject to any obligations
to, or the rights of, any holder of Senior Indebtedness under Article X or
otherwise. For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or any reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.1(3) hereof, but, except as specified above, the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 8.3. Conditions to Defeasance. The Company may exercise its
Legal Defeasance option or its Covenant Defeasance option only if:
(1) the Company irrevocably deposits with the Trustee, in trust, for
the benefit of the holders of the Securities cash in U.S. dollars,
non-callable U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient, in the opinion of
73
<PAGE>
a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay the principal of, premium, if any, and interest on the
Securities on the stated date for payment thereof or on the applicable
redemption date, as the case may be;
provided that the Trustee shall have received an irrevocable written order from
the Company instructing the Trustee to apply such cash in U.S. dollars or the
proceeds of such U.S. Government Obligations to said payments with respect to
the Securities;
(2) in the case of a Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been
a change in the applicable Federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of a Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Securityholders
will not recognize income, gain or loss for Federal income tax purposes as
a result of such Covenant Defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such Covenant Defeasance had not occurred;
(4) no Default or Event of Default or event which with notice or
lapse of time or both would become a Default or an Event of Default with
respect to the Securities shall have occurred and be continuing on the
date of such deposit (other than a Default or Event of Default with
respect to this Indenture resulting from the incurrence of Indebtedness,
all or a portion of which will be used to defease the Securities
concurrently with such incurrence) or insofar as Sections 6.1(7) and
6.1(8) hereof are concerned, at any
74
<PAGE>
time in the period ending on the 91st day after the
date of such deposit;
(5) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(6) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company or others;
(7) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities and this Indenture as
contemplated by this Article VIII have been complied with;
(8) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that (A) the trust funds will not be subject to any
rights of holders of Indebtedness of the Company other than the Securities
and (B) assuming no intervening bankruptcy of the Company between the date
of deposit and the 91st day following the deposit and that no Holder is an
insider of the Company, after the 91st day following the deposit, the
trust funds will not be subject to the effect of an applicable bankruptcy
insolvency, reorganization or similar laws affecting creditors' rights
generally; and
(9) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article III.
SECTION 8.4. Application of Trust Money. The Trustee or Paying Agent
shall hold in trust U.S. Legal Tender or U.S.
75
<PAGE>
Government Obligations deposited with it pursuant to this Article VIII, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of principal of,
premium, if any, and interest on the Securities. The Trustee shall be under no
Obligation to invest said U.S. Legal Tender or U.S. Government obligations
except as it may agree with the Company.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.3 hereof or the
principal, premium, if any, and interest received in respect thereof other than
any such tax, fee or other charge which by law is for the account of the Holders
of the outstanding Securities.
Anything in this Article VIII to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any U.S. Legal Tender or U.S. Government Obligations held by it as
provided in Section 8.3 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION 8.5. Repayment to Company. Subject to Article VIII, the
Trustee and the Paying Agent shall promptly pay to the Company, upon request any
excess U.S. Legal Tender or U.S. Government Obligations held by them at any time
and thereupon shall be relieved from all liability with respect to such money.
The Trustee and the Paying Agent shall pay to the Company upon request any money
held by them for the payment of principal or interest that remains unclaimed for
two years; provided that the Trustee or such Paying Agent, before being required
to make any payment, may at the expense of the Company cause to be published
once in a newspaper of general circulation in the City of New York or mail to
each Holder entitled to such money notice that such money remains unclaimed and
that after a date specified therein which shall be at least 30 days from the
date of such publication or mailing any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any U.S. Legal Tender or U.S. Government Obligations in accordance with
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any
76
<PAGE>
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Article VIII until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender or U.S. Government Obligations in
accordance with Article VIII; provided that if the Company has made any payment
of interest on or principal of any Securities because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the U.S. Legal Tender or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
AMENDMENTS
SECTION 9.1. Without Consent of Holders. The Company and the Trustee
may amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
provided that such amendment does not in the opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
(2) to comply with Article V;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to make any change in Article X that would limit or terminate
the benefits available to any holder of Senior Indebtedness (or
Representatives therefor) under Article X;
(5) to add Guarantees with respect to the Securities or to secure
the Securities;
(6) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
77
<PAGE>
(7) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(8) to make any change that does not adversely affect the rights of
any Securityholder;
(9) to provide for the issuance of the Exchange Securities, which
will have terms substantially identical in all material respects to the
Initial Securities (except that the transfer restrictions contained in the
Initial Securities and provisions relating to an increase in interest
rates in the event the Securities are not registered under the Securities
Act will be modified or eliminated, as appropriate), and which will be
treated together with any outstanding Initial Securities, as a single
issue of securities; or
(10) to secure the Securities pursuant to the requirements of
Section 4.2 or otherwise;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.1.
SECTION 9.2. With Consent of Holders. Subject to Section 6.7, the
Company, when authorized by a resolution of its Board of Directors, and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to Section 6.7, the Holders of a majority in
principal amount of the outstanding Securities may waive compliance by the
Company with any provision of this Indenture or the Securities. However, without
the consent of the Holder of each Security affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.4, may not:
(1) reduce the amount of Securities whose Holders must consent to
an amendment;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including defaulted interest, on any
Security;
(3) reduce the principal of or change or have the effect of changing
the Stated Maturity of any Security, or change the date on which any
Securities may be subject to redemption or repurchase, or reduce the
redemption or repurchase price therefor;
78
<PAGE>
(4) make any Security payable in money other than that stated in the
Security;
(5) make an change in provisions of this Indenture protecting the
right of each Holder to receive payment of principal of, premium, if any,
and interest on such Security on or after the due date thereof or to bring
suit to enforce such payment or permitting holders of a majority in
principal amount of the Securities to waive Defaults or Events of Default
(other than Defaults or Events of Default with respect to the payment of
principal of, premium, if any, or interest on the Securities);
(6) amend, change or modify in any material respect the obligation
of the Company to make and consummate a Change of Control Offer or make
and consummate a Net Proceeds Offer with respect to any Asset Sale that
has been consummated or modify any of the provisions or definitions with
respect thereto; or
(7) modify Article X or the definitions used in Article X of this
Indenture to adversely affect the Holders in any material respect.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article X of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.3. Compliance With Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the Trust Indenture Act of
1939, as amended as then in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of
79
<PAGE>
that Security or portion of the Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent or waiver is not
made on the Security. However, any such Holder or subsequent Holder may revoke
the consent or waiver as to such Holder's Security or portion of the Security if
the Trustee receives the notice of revocation before the date the amendment or
waiver becomes effective. After an amendment or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (7) of Section 9.2, in which case, the amendment or waiver
shall bind only each Securityholder who has consented to it and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder; provided that any such waiver shall not impair or affect
the right of any Holder to receive payment of principal of, premium, if any, and
interest on a Security, on or after the respective due dates expressed in such
Security, or to bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall become
valid or effective more than 120 days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. Trustee to Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1)
80
<PAGE>
shall be fully protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized or permitted by
this Indenture.
ARTICLE X
SUBORDINATION
SECTION 10.1. Agreement to Subordinate. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article X, to the prior payment of all Senior
Indebtedness and that the subordination is for the benefit of and enforceable by
the holders of Senior Indebtedness. The Securities will also be effectively
subordinated to any Secured Indebtedness of the Company to the extent of the
value of the assets securing such Indebtedness, and to all existing and future
obligations of the Company's Subsidiaries. The Securities shall in all respects
rank pari passu with all other Senior Subordinated Indebtedness of the Company
and only Indebtedness of the Company which is Senior Indebtedness will rank
senior to the Securities in accordance with the provisions set forth herein. All
provisions of this Article X shall be subject to Section 10.12.
SECTION 10.2. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets or securities of the Company to creditors upon a
total or partial liquidation or dissolution or reorganization or similar
proceeding of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its properties, or
in an assignment for the benefit of creditors or any marshalling of the assets
and liabilities of the Company, whether voluntary or involuntary:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents of all Senior Indebtedness
before Securityholders shall be entitled to receive any payment of
principal of, premium, if any, or interest on or other amounts with
respect to the Securities; and
(2) until the Senior Indebtedness is paid in full in cash or Cash
Equivalents, any payment or distribution to which Securityholders would be
entitled but for this Article X shall be made to holders of Senior
Indebtedness as their interests may appear.
81
<PAGE>
SECTION 10.3. Default on Senior Indebtedness. The Company may not
pay principal of, premium (if any) or interest on, or any other amount in
respect of, the Securities or make any deposit pursuant to Article VIII and may
not otherwise purchase, redeem or otherwise retire any Securities (collectively,
"pay the Securities") if any amount due in respect of any Senior Indebtedness
(including, without limitation any amount due as a result of acceleration of the
maturity thereof by reason of default or otherwise) has not been paid in full in
cash or Cash Equivalents unless the default has been cured or waived and any
such acceleration has been rescinded or such Senior Indebtedness has been paid
in full in cash or Cash Equivalents. However, the Company may pay the Securities
without regard to the foregoing if the Company and the Trustee receive written
notice approving such payment from the Representative of the holders of the
Designated Senior Indebtedness with respect to which the events set forth in the
immediately preceding sentence have occurred and are continuing.
In addition, during the continuance of any default (other than a
payment default described in the first sentence of the immediately preceding
paragraph) with respect to any Designated Senior Indebtedness pursuant to which
the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay the
Securities for a period (a "Payment Blockage Period") commencing upon the
receipt by the Trustee (with a copy to the Company) of written notice (a
"Blockage Notice") of such default from the Representative of the holders of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice and all other defaults with
respect to such Designated Senior Indebtedness shall have been cured or shall
have ceased to exist or (iii) because such Designated Senior Indebtedness has
been repaid in full in cash or Cash Equivalents).
Notwithstanding the provisions described in the immediately
preceding paragraph, unless any payment default described in the first sentence
of the second immediately preceding paragraph has occurred and is then
continuing, the Company may resume payments on the Securities after the end of
such Payment Blockage Period, including any missed payments. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Designated Senior Indebtedness during
such period. However, if any Blockage Notice within such 360-day period is
82
<PAGE>
given by or on behalf of any holders of Designated Senior Indebtedness other
than the Bank Indebtedness, a Representative of holders of Bank Indebtedness may
give another Blockage Notice within such period. In no event, however, may the
total number of days during which any Payment Blockage Period or Periods is in
effect exceed 179 days in the aggregate during any 360 consecutive day period.
SECTION 10.4. Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default, the Company shall
promptly notify the holders of the Designated Senior Indebtedness or the
Representative of such holders of the acceleration and provide copies of such
notices to the Trustee.
If any Designated Senior Indebtedness is outstanding at the time of
such acceleration, the Company may not pay the Securities until the earlier of
five Business Days after the holder or Representative of such Designated Senior
Indebtedness receives notice of such acceleration or the date of acceleration of
such Designated Senior Indebtedness and, thereafter, may pay the Securities only
if this Article X otherwise permits payments at that time.
SECTION 10.5. When Distribution Must Be Paid Over. If a payment or
distribution is made to Securityholders that because of this Article X should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and promptly pay it
over to them as their respective interests may appear.
SECTION 10.6. Subrogation. After all Senior Indebtedness is paid in
full in cash and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article X to holders of Senior Indebtedness which otherwise would have been made
to Securityholders is not, as between the Company and Securityholders, a payment
by the Company of Senior Indebtedness.
SECTION 10.7. Relative Rights. This Article X defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
83
<PAGE>
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders of Senior Indebtedness to receive distributions
otherwise payable to Securityholders.
SECTION 10.8. Subordination May Not Be Impaired by Company. No right
of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by the failure of the Company to comply with this
Indenture.
SECTION 10.9. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it specifically stating that payments
may not be made under this Article X. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article X with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article VII shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article X shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. Article X Not To Prevent Events of Default or Limit
Right to Accelerate. The failure to make a payment in respect of the Securities
by reason of any provision in this Article X shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article X shall have an effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
84
<PAGE>
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Legal Tender or U.S. Government Obligations held in trust under Article
VIII by the Trustee for the payment of principal of and interest on the
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in this Article X, and
none of the Securityholders shall be obligated to pay over any such amount to
the Company, any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
SECTION 10.13. Trustee Entitled to Rely. Upon any payment or
distribution pursuant to this Article X, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article X. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article X, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article X, and, if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment. The provisions of Sections 7.1 and
7.2 shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article X.
SECTION 10.14. Trustee to Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
85
<PAGE>
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article X or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE XI
[RESERVED]
ARTICLE XII
[RESERVED]
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control.
SECTION 13.2. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
86
<PAGE>
if to the Company:
Fisher Scientific International Inc.
Liberty Lane
Hampton, NH 03842
Attention of General Counsel
if to the Trustee:
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, Connecticut 06103
Attention of Corporate Trust Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.3. Communication by Holders With Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 13.4. Certificate and Opinion As To Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company, upon request, shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all
87
<PAGE>
conditions precedent, if any, provided for in this Indenture relating to
the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 13.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 13.6. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 13.7. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
88
<PAGE>
SECTION 13.8. Legal Holidays. A "LEGAL HOLIDAY" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York or in the state in which the corporate trust office of the
Trustee is located. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 13.9. Governing Law. This Indenture and the Securities shall
be governed by, and construed in accordance with, the laws of the State of New
York but without giving effect to applicable principles of conflicts of law to
the extent that the application of the laws of another jurisdiction would be
required thereby.
SECTION 13.10. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have an liability for
any obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 13.11. Successors. All agreements of the Company and the
Subsidiary Guarantors in this Indenture and the Securities shall bind their
respective successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 13.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 13.13. Variable Provisions. The company initially appoints
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities.
SECTION 13.14. Qualification Of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees for the Company, the Trustee and the Holders)
incurred in connection therewith, including, but not limited to, costs and
expenses of qualification of this Indenture and the Securities and printing this
Indenture and the Securities. The Trustee shall be entitled to receive from the
89
<PAGE>
Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 13.15. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
[SIGNATURE PAGE FOLLOWS]
90
<PAGE>
[SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
FISHER SCIENTIFIC INTERNATIONAL
INC.
By: /s/ Todd M. DuChene
---------------------------
Name: Todd M. DuChene
Title: Vice President, General
Counsel and Secretary
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Philip G. Kane, Jr.
---------------------------
Name: Philip G. Kane, Jr.
Title: Vice President
<PAGE>
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO
YEARS (OR SUCH SHORTER PERIOD THAT MAY HEREAFTER BE PROVIDED UNDER RULE 144(K)
(OR ANY SUCCESSOR PROVISION THEREOF) AS PERMITTING THE RESALE BY NON-AFFILIATES
OF RESTRICTED SECURITIES WITHOUT RESTRICTION) AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY, ANY GUARANTOR OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
A-1
<PAGE>
THIS SECURITY) (THE "RESALE RESTRICTION TERMINATION DATE"), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" ("IAI") WITHIN THE
MEANING OF SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN IAI, IN EACH CASE, IN A TRANSACTION INVOLVING A MINIMUM PURCHASE PRICE OF
$250,000 FOR SUCH SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND OTHERWISE IN COMPLIANCE WITH
OTHER APPLICABLE LAWS, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-2
<PAGE>
THIS SECURITIY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES
OF SECTION 1271 et. seq. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $965. THE ISSUE DATE OF
THIS SECURITY IS NOVEMBER 20, 1998 AND THE YIELD TO MATURITY IS 9.577%.
FISHER SCIENTIFIC INTERNATIONAL INC.
No. Principal Amount $
CUSIP NO.
9% Senior Subordinated Note due 2008
Fisher Scientific International Inc., a Delaware corporation, promises to pay to
Cede & Co., or registered assigns, the principal sum of _______ on February 1,
2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other
side of this Security.
A-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto and imprinted hereon.
Dated: November 20, 1998
FISHER SCIENTIFIC INTERNATIONAL INC.
By:
------------------------------
Name:
Title
By:
------------------------------
Name:
Title
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
---------------------
Authorized Signatory
A-4
<PAGE>
(Reverse of Security)
9% Senior Subordinated Note due 2008
1. Interest
Fisher Scientific International Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on February 1 and August
1 of each year, commencing February 1, 1999. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from the date of issuance. The
Company shall pay interest on overdue principal or premium, if any, and interest
at the rate borne by the Securities to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 A.M. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the January 15 and July 15 immediately
preceding the interest payment date even if Securities are cancelled,
repurchased or redeemed after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
A-5
<PAGE>
3. Paying Agent and Registrar
Initially, State Street Bank and Trust Company, a Massachusetts
chartered trust company (the "Trustee"), will act as Paying Agent and Registrar.
The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Securityholder. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
November 20, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $200 million aggregate principal amount (subject to
Section 2.7 of the Indenture). This Security is one of the Initial Securities
referred to in the Indenture. The Securities include the Initial Securities and
any Exchange Securities issued in exchange for the Initial Securities pursuant
to the Indenture and the Registration Rights Agreement. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on the incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Company and its
Restricted Subsidiaries, the sale or transfer of assets and Capital Stock of
Restricted Subsidiaries, the investments of the Company, its Subsidiaries and
transactions with Affiliates, Liens, dividends and other payment restrictions
affecting Subsidiaries, incurrence of senior subordinated Indebtedness,
preferred stock of Subsidiaries and future guarantees. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
A-6
<PAGE>
5. Optional Redemption
Except as set forth in this paragraph 5, the Securities will not be
redeemable at the option of the Company prior to February 1, 2003. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as percentages of principal amount) if redeemed
during the twelve month period commencing on February 1 of the year set forth
below plus, in each case, accrued and unpaid interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date):
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2003........................................ 104.50%
2004........................................ 103.00%
2005........................................ 101.50%
2006 and thereafter......................... 100.00%
</TABLE>
Notwithstanding the foregoing, at any time, or from time to time, on
or prior to February 1, 2001, the Company may, at its option, use the net cash
proceeds of one or more Equity Offerings to redeem up to 40% of the aggregate
principal amount of Securities originally issued at a redemption price equal to
109% of the principal amount thereof plus accrued interest to the date of
redemption; provided that at least 60% of the original principal amount of
Securities remains outstanding immediately after any such redemption (excluding
any Securities owned by the Company). In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company must mail a
notice of redemption no later than 60 days after the related Equity Offering and
must consummate such redemption within 90 days of the closing of the Equity
Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. If fewer than all the Securities are to be
redeemed, the Trustee shall select the Securities to be redeemed pro rata or by
lot or by a method that complies with applicable legal and
A-7
<PAGE>
securities exchange requirements, if any, and that the Trustee considers fair
and appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances; provided, however, that if a
partial redemption is made with the proceeds of an Equity Offering, selection of
the Securities or portion thereof for redemption shall be made by the Trustee
only on a pro rata basis, unless such method is otherwise prohibited. Securities
in denominations of principal amount larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued and unpaid interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. Option of Holder to Elect Purchase
Upon a Change of Control Triggering Event, any Holder of Securities
will have the right to require that the Company purchase all or a portion of
such Holder's Securities pursuant to the Indenture at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued interest to the date
of repurchase as provided in, and subject to the terms of, the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company or a Restricted Subsidiary from an Asset Sale are not
used (a) to prepay any Senior Indebtedness and, in the case of any Senior
Indebtedness under any revolving credit facility, effect a permanent reduction
in the availability under such revolving credit facility, (b) to reinvest in
Productive Assets or (c) a combination of prepayment and investment permitted by
the foregoing clauses (a) and (b), then such aggregate amount of Net Cash
Proceeds which have not been applied on or before such Net Proceeds Offer
Trigger Date shall be applied by the Company or such Restricted Subsidiary to
make an offer to purchase on a date not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date from all Holders on a
pro rata basis that amount of Securities equal to the Note Offer Amount at a
price in cash equal to 100% of the principal amount of the Securities to be
purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase.
A-8
<PAGE>
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Security for a period beginning (i) 15 Business Days before
the mailing of a notice of an offer to repurchase or redeem Securities and
ending at the close of business on the day of such mailing or (b) 15 Business
Days before an interest payment date and ending on such interest payment date.
10. Persons Deemed Owners
The registered holder of this Security may be treated as the owner
of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
12. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal of, premium, if any,
A-9
<PAGE>
and interest on the Securities to redemption or maturity, as
the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, and the
Trustee may amend the Indenture or the Securities to, among other things set
forth in the Indenture, cure any ambiguity, omission, defect or inconsistency,
or to comply with Article V of the Indenture, or to make certain changes in
Article X of the Indenture or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company, or to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act, or to make any change that does not adversely affect the rights of any
Securityholder, or to provide for the issuance of Exchange Securities.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon required repurchase, upon declaration or otherwise;
(iii) failure by the Company to comply with other agreements in the Indenture or
the Securities, in certain cases subject to notice and lapse of time; (iv)
failure to pay at final maturity (giving effect to any applicable grace period
and any extensions thereof) the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary (other than a Receivables Entity) of the
Company, or the acceleration of the final maturity of any such Indebtedness, if
the aggregate principal amount of any such Indebtedness, together with the
principal amount of any such other Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $15.0
million or more at any time; (v) certain events of bankruptcy or insolvency with
A-10
<PAGE>
respect to the Company or any Significant Subsidiary; and (vi) certain final,
non-appealable judgments or decrees for the payment of money in excess of $15.0
million against the Company or any Significant Subsidiary. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
15. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on
A-11
<PAGE>
its behalf) manually signs the certificate of authentication on the other side
of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Registration Rights.
Pursuant to the Registration Rights Agreement by and among the
Company and the Initial Purchasers, the Company will be obligated to consummate
an exchange offer pursuant to which the Holder of this Security shall have,
subject to the conditions set forth in the Registration Rights Agreement, the
right to exchange this Security for another series of 9% Senior Subordinated
Notes due 2008 of the Company (herein called the "Exchange Securities"), which
have been registered under the Securities Act of 1933, as amended, in like
principal amount and having identical terms as the Securities (other than as set
forth in this paragraph). The Holders of Securities shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.
A-12
<PAGE>
21. Governing Law
This Security shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to: Fisher
Scientific International Inc., Liberty Lane, Hampton, New Hampshire 03842,
Attention: General Counsel.
A-13
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(Print or type assignee's name, address and zip code)
---------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
----------------- ------------------------------------------
Signature Guarantee:
------------------------------------------
(Signature must be guaranteed)
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
1 [_] acquired for the undersigned's own account, without transfer
(in satisfaction of Section 2.6(a)(ii)(A) or Section
2.6(d)(i)(A) of the Indenture); or
2 [_] transferred to the Company; or
A-14
<PAGE>
3 [_] transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
4 [_] transferred pursuant to an effective registration statement
under the Securities Act; or
5 [_] transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
6 [_] transferred to an institutional "accredited
investor" (as defined in Rule 501(a) (1), (2), (3) or (7) under
the Securities Act of 1933), that has furnished to the Trustee a
signed letter containing certain representations and agreements
(the form of which letter appears as Exhibit C to the
Indenture); or
7 [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (5), (6),
or (7) is checked, the Trustee or the Company may require, prior to registering
any such transfer of the Securities, in their sole discretion, such legal
opinions, certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
----------------------
Signature Guarantee Signature
------------------------------ ----------------------
(Signature must be guaranteed) Signature
A-15
<PAGE>
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
<TABLE>
<CAPTION>
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following officer of Trustee or
Exchange Global Security Global Security such decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
A-16
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.6 or 4.8 of the Indenture, check the box:
[-]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.6 or 4.8 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: Your Signature
------------ -----------------------------------------------
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:
-----------------------------------------
(Signature must be guaranteed)
A-18
<PAGE>
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
B-1
<PAGE>
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR PURPOSES OF
SECTION 1271 et. seq. OF THE INTERNAL REVENUE CODE. FOR EACH $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THIS SECURITY, THE ISSUE PRICE IS $965. THE ISSUE DATE OF
THIS SECURITY IS NOVEMBER 20, 1998 AND THE YIELD TO MATURITY IS 9.577%.
FISHER SCIENTIFIC INTERNATIONAL INC.
No. Principal Amount
----
CUSIP NO. 338032 AH 8
9% Senior Subordinated Note due 2008
Fisher Scientific International Inc., a Delaware corporation,
promises to pay to Cede & Co., or registered assigns, the principal sum
of_______________________Dollars on February 1, 2008.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Additional provisions of this Security are set forth on the other
side of this Security.
B-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Security to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto and imprinted hereon.
Dated: , 1998 FISHER SCIENTIFIC INTERNATIONAL
INC.
By:
------------------------------------
Name:
Title
By:
------------------------------------
Name:
Title
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
--------------------------------
Authorized Signatory
B-3
<PAGE>
(Reverse of Security)
9% Senior Subordinated Note due 2008
1. Interest
Fisher Scientific International Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on February 1 and August
1 of each year, commencing February 1, 1999. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from the earlier of the most recent
date on which interest was paid on the Initial Securities or, if no such
interest has been paid, from the date of issuance of the Initial Securities. The
Company shall pay interest on overdue principal or premium, if any, and interest
at the rate borne by the Securities to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 A.M. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the January 15 and July 15 immediately
preceding the interest payment date even if Securities are canceled, repurchased
or redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. However, the Company may pay principal and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
B-4
<PAGE>
3. Paying Agent and Registrar
Initially, State Street Bank and Trust Company, Massachusetts
chartered trust company (the "Trustee"), will act as Paying Agent and Registrar.
The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Securityholder. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
November 20, 1998 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), among the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior subordinated obligations
of the Company limited to $200 million aggregate principal amount (subject to
Section 2.7 of the Indenture). This Security is one of the Initial Securities
referred to in the Indenture. The Securities include the Initial Securities and
any Exchange Securities issued in exchange for the Initial Securities pursuant
to the Indenture and the Registration Rights Agreement. The Initial Securities
and the Exchange Securities are treated as a single class of securities under
the Indenture. The Indenture imposes certain limitations on the incurrence of
Indebtedness by the Company and its Restricted Subsidiaries, the payment of
dividends and other distributions on the Capital Stock of the Company and its
Restricted Subsidiaries, the sale or transfer of assets and Capital Stock of
Restricted Subsidiaries, the investments of the Company, its Subsidiaries and
transactions with Affiliates, Liens, dividends and other payment restrictions
affecting Subsidiaries, incurrence of senior subordinated Indebtedness,
preferred stock of Subsidiaries and future guarantees. In addition, the
Indenture limits the ability of the Company and its Restricted Subsidiaries to
restrict distributions and dividends from Restricted Subsidiaries.
B-5
<PAGE>
5. Optional Redemption
Except as set forth in this paragraph 5, the Securities will not be
redeemable at the option of the Company prior to February 1, 2003. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, upon not less than 30 nor more than 60 days' prior notice mailed by
first class mail to each Holder's registered address, at the following
redemption prices (expressed as percentages of principal amount) if redeemed
during the twelve month period commencing on February 1 of the year set forth
below plus, in each case, accrued and unpaid interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date):
<TABLE>
<CAPTION>
Year Redemption Price
- ---- ----------------
<S> <C>
2003................................................. 104.50%
2004................................................. 103.00%
2005................................................. 101.50%
2006 and thereafter.................................. 100.00%
</TABLE>
Notwithstanding the foregoing, at any time, or from time to time, on
or prior to February 1, 2001, the Company may, at its option, use the net cash
proceeds of one or more Equity Offerings to redeem up to 40% of the aggregate
principal amount of Securities originally issued at a redemption price equal to
109% of the principal amount thereof plus accrued interest to the date of
redemption; provided that at least 60% of the original principal amount of
Securities remains outstanding immediately after any such redemption (excluding
any Securities owned by the Company). In order to effect the foregoing
redemption with the proceeds of any Equity Offering, the Company must mail a
notice of redemption no later than 60 days after the related Equity Offering and
must consummate such redemption within 90 days of the closing of the Equity
Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. If fewer than all the Securities are to be
redeemed, the Trustee shall select the Securities to be redeemed pro rata or by
lot or by a method that complies with applicable legal and
B-6
<PAGE>
securities exchange requirements, if any, and that the Trustee considers fair
and appropriate and in accordance with methods generally used at the time of
selection by fiduciaries in similar circumstances; provided, however, that if a
partial redemption is made with the proceeds of an Equity Offering, selection of
the Securities or portion thereof for redemption shall be made by the Trustee
only on a pro rata basis, unless such method is otherwise prohibited. Securities
in denominations of principal amount larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000. If money sufficient to pay the redemption
price of and accrued and unpaid interest on all Securities (or portions thereof)
to be redeemed on the redemption date is deposited with the Paying Agent on or
before the redemption date and certain other conditions are satisfied, on and
after such date interest ceases to accrue on such Securities (or such portions
thereof) called for redemption.
7. Option of Holder to Elect Purchase
Upon a Change of Control Triggering Event, any Holder of Securities
will have the right to require that the Company purchase all or a portion of
such Holder's Securities pursuant to the Indenture at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued interest to the date
of repurchase as provided in, and subject to the terms of, the Indenture.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company or a Restricted Subsidiary from an Asset Sale are not
used (a) to prepay any Senior Indebtedness and, in the case of any Senior
Indebtedness under any revolving credit facility, effect a permanent reduction
in the availability under such revolving credit facility, (b) to reinvest in
Productive Assets or (c) a combination of prepayment and investment permitted by
the foregoing clauses (a) and (b), then such aggregate amount of Net Cash
Proceeds which have not been applied on or before such Net Proceeds Offer
Trigger Date shall be applied by the Company or such Restricted Subsidiary to
make an offer to purchase on a date not less than 30 nor more than 45 days
following the applicable Net Proceeds Offer Trigger Date from all Holders on a
pro rata basis that amount of Securities equal to the Note Offer Amount at a
price equal in cash to 100% of the principal amount of the Securities to be
purchased, plus accrued and unpaid interest thereon, if any, to the date of
purchase.
B-7
<PAGE>
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give them effect and
appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of principal amount of $1,000 and whole multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Indenture. The Registrar need not register the transfer of
or exchange of any Security for a period beginning (i) 15 Business Days before
the mailing of a notice of an offer to repurchase or redeem Securities and
ending at the close of business on the day of such mailing or (b) 15 Business
Days before an interest payment date and ending on such interest payment date.
10. Persons Deemed Owners
The registered holder of this Security may be treated as the owner
of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
B-8
<PAGE>
12. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal of, premium, if any,
and interest on the Securities to redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the outstanding Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount of the
outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company, and the
Trustee may amend the Indenture or the Securities to, among other things set
forth in the Indenture, cure any ambiguity, omission, defect or inconsistency,
or to comply with Article V of the Indenture, or to make certain changes in
Article X of the Indenture or to provide for uncertificated Securities in
addition to or in place of certificated Securities, or to add guarantees with
respect to the Securities or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company, or to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act, or to make any change that does not adversely affect the rights of any
Securityholder, or to provide for the issuance of Exchange Securities.
B-9
<PAGE>
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon required repurchase, upon declaration or otherwise;
(iii) failure by the Company to comply with other agreements in the Indenture or
the Securities, in certain cases subject to notice and lapse of time; (iv)
failure to pay at final maturity (giving effect to any applicable grace period
and any extensions thereof) the principal amount of any Indebtedness of the
Company or any Restricted Subsidiary (other than a Receivables Entity) of the
Company, or the acceleration of the final maturity of any such Indebtedness, if
the aggregate principal amount of any such Indebtedness, together with the
principal amount of any such other Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, aggregates $15.0
million or more at any time; (v) certain events of bankruptcy or insolvency with
respect to the Company or any Significant Subsidiary; and (vi) certain final,
non-appealable judgments or decrees for the payment of money in excess of $15.0
million against the Company or any Significant Subsidiary. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the Securities to be due and
payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives reasonable indemnity or security.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default or
Event of Default (except a Default or Event of Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
B-10
<PAGE>
15. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
B-11
<PAGE>
20. Governing Law
This Security shall be governed by, and construed in accordance
with, the laws of the State of New York but without giving effect to applicable
principles of conflicts of law to the extent that the application of the laws of
another jurisdiction would be required thereby.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to: Fisher
Scientific International Inc., Liberty Lane, Hampton, New Hampshire 03842,
Attention: General Counsel.
B-12
<PAGE>
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
(Print or type assignee's name, address and zip code)
---------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may
substitute another to act for him.
- --------------------------------------------------------------------------------
Date: Your Signature:
----------------- ------------------------------------------
Signature Guarantee:
------------------------------------------
(Signature must be guaranteed)
- --------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
B-13
<PAGE>
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have
been made:
<TABLE>
<CAPTION>
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following officer of Trustee or
Exchange Global Security Global Security such decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
B-14
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.6 or 4.8 of the Indenture, check the box:
[-]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.6 or 4.8 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: Your Signature
---------- -------------------------------------------
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee:
------------------------------------------------------------
(Signature must be guaranteed)
B-15
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
January 28, 1999
Fisher Scientific International Inc.
Liberty Lane
Hampton, NH 03842
Re: Fisher Scientific International Inc.
Registration Statement on Form S-4
Ladies and Gentlemen:
We have acted as special counsel to Fisher Scientific International
Inc., a Delaware corporation (the "Company"), in connection with the public
offering of $200,000,000 aggregate principal amount of the Company's 9% Senior
Subordinated Notes due 2008 (the "Notes"). The Notes are to be issued pursuant
to an exchange offer (the "Exchange Offer") in exchange for a like principal
amount of the issued and outstanding 9% Senior Subordinated Notes due 2008 of
the Company (the "Old Notes") under an Indenture dated as of November 20, 1998
(the "Indenture"), by and among the Company and State Street Bank and Trust
Company, as Trustee (the "Trustee"), as contemplated by the Registration Rights
Agreement dated as of November 20, 1998 (the "Registration Rights Agreement"),
by and among the Company, Chase Securities Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation.
This opinion is being furnished in accordance with the requirements
of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, we have examined originals or
copies, certified or otherwise identi-
<PAGE>
Fisher Scientific International Inc.
January 28, 1999
Page 2
fied to our satisfaction, of (i) the Registration Statement on Form S-4 to be
filed with the Securities and Exchange Commission (the "Commission") on the
date hereof under the Act (the "Registration Statement"); (ii) an executed copy
of the Registration Rights Agreement; (iii) an executed copy of the Indenture;
(iv) the Restated Certificate of Incorporation of the Company, as amended to
date; (v) the By-Laws of the Company, as amended to date; (vi) certain
resolutions adopted by the Board of Directors of the Company relating to the
Exchange Offer, the issuance of the Old Notes and the Notes, the Indenture and
related matters; (vii) the Form T-1 of the Trustee filed as an exhibit to the
Registration Statement; and (viii) the form of the Notes. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such records of the Company and such agreements, certificates of public
officials, certificates of officers or other representatives of the Company and
others, and such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. In making our
examination of executed documents or documents to be executed, we have assumed
that the parties thereto, other than the Company, had or will have the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and the
validity and binding effect on such parties. As to any facts material to the
opinions expressed herein which we have not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Members of our firm are admitted to the bar in the State of New
York, and we do not express any opinion
<PAGE>
Fisher Scientific International Inc.
January 28, 1999
Page 3
as to the laws of any other jurisdiction other than the Delaware General
Corporation Law.
Based upon and subject to the foregoing and the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that when the Notes (in the form examined by us) have been duly
executed and authenticated in accordance with the terms of the Indenture and
have been delivered upon consummation of the Exchange Offer against receipt of
Old Notes surrendered in exchange therefor in accordance with the terms of the
Exchange Offer, the Notes will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
to the extent that enforcement thereof may be limited by (1) bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws now or hereafter in effect relating to creditors' rights generally and (2)
general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).
In rendering the opinion set forth above, we have assumed that the
execution and delivery by the Company of the Indenture and the Notes and the
performance by the Company of its obligations thereunder do not and will not
violate, conflict with or constitute a default under (i) any agreement or
instrument to which the Company or its properties is subject (except that we do
not make the assumption set forth in this clause (i) with respect to the
Company's Restated Certificate of Incorporation, the Company's By-Laws, the
Indenture or the Registration Rights Agreement), (ii) any law, rule, or
regulation to which the Company is subject (except that we do not make the
assumption set forth in this clause (ii) with respect to the Delaware General
Corporation Law and those laws, rules and regulations of the State of New York
and of the United States of America, in each case, which, in our experience, are
normally applicable to transactions of the type contemplated by the Exchange
Offer, but without our having made any special investigation with respect to any
other laws, rules or regulations), (iii) any judicial or regulatory order or
decree of any governmental authority, or (iv) any consent, approval, license,
authorization or validation of,
<PAGE>
Fisher Scientific International Inc.
January 28, 1999
Page 4
or filing, recording or registration with, any governmental authority.
We hereby consent to the filing of this opinion with the Commission
as an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom LLP
-----------------------------
Registration Rights Agreement
Dated As of November 20, 1998
between
Fisher Scientific International Inc.
and
Chase Securities Inc.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
and
Donaldson, Lufkin & Jenrette Securities Corporation
-----------------------------
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and
entered into this 20th day of November 1998, among Fisher Scientific
International Inc., a Delaware corporation (the "Company"), and Chase Securities
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Donaldson, Lufkin &
Jenrette Securities Corporation (collectively, the "Initial Purchasers").
This Agreement is made pursuant to the Purchase Agreement, dated
November 10, 1998, between the Company and the Initial Purchasers (the "Purchase
Agreement"), which provides for, among other things, the sale by the Company to
the Initial Purchasers of an aggregate of $200 million principal amount of the
Company's 9% Senior Subordinated Notes due 2008 (the "Securities"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Company
has agreed to provide to the Initial Purchasers and their direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time.
"1934 Act" shall mean the Securities Exchange Act of l934, as
amended from time to time.
"Affiliated Market Maker" shall mean any Initial Purchaser who is
required to by applicable law to deliver a prospectus in connection with
sales or market making activities with respect to the Exchange Securities.
"Closing Date" shall mean the Closing Time as defined in the
Purchase Agreement.
"Company" see the preamble hereto and shall also include the
Company's successors.
1
<PAGE>
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Company, provided, however, that such
depositary must have an address in the Borough of Manhattan, in the City
of New York.
"Exchange Offer" shall mean the exchange offer by the Company of
Exchange Securities for Registrable Securities pursuant to Section 2.1
hereof.
"Exchange Offer Registration" shall mean a registration under the
1933 Act effected pursuant to Section 2.1 hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another
appropriate form), and all amendments and supplements to such registration
statement, including the Prospectus contained therein, all exhibits
thereto and all documents incorporated by reference therein.
"Exchange Period" see Section 2.1 hereof.
"Exchange Securities" shall mean the 9% Senior Subordinated Notes
due 2008 to be issued by the Company under the Indenture containing terms
identical to the Securities in all material respects (except that (i)
interest thereon shall accrue from the last date on which interest was
paid on the Securities or, if no such interest has been paid, from
November 20, 1998 and (ii) the transfer restrictions thereon shall be
eliminated), to be offered to Holders of Securities in exchange for
Registrable Securities pursuant to the Exchange Offer.
"Holder" shall mean an Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable
Securities under the Indenture and each Participating Broker-Dealer that
holds Exchange Securities for so long as such Participating Broker-Dealer
is required to deliver a prospectus meeting the requirements of the 1933
Act in connection with any resale of such Exchange Securities.
"Indenture" shall mean the Indenture relating to the Securities,
dated as of November 20, 1998, between the Company and State Street Bank
and Trust Company, as trustee, as the same may be amended, supplemented,
waived or otherwise modified from time to time in accordance with the
terms thereof.
"Initial Purchaser" or "Initial Purchasers" see the preamble hereto.
2
<PAGE>
"Majority Holders" shall mean the Holders of a majority of the
aggregate principal amount of Outstanding (as defined in the Indenture)
Registrable Securities; provided that whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, Registrable Securities held by the Company and other obligors
on the Securities or any Affiliate (as defined in the Indenture) of the
Company shall be disregarded in determining whether such consent or
approval was given by the Holders of such required percentage amount.
"Participating Broker-Dealer" shall mean Chase Securities Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Donaldson, Lufkin &
Jenrette Securities Corporation and any other broker-dealer that holds
Registrable Securities acquired for its own account as a result of market
making activities in the Securities and that will be the beneficial owner
(as defined in Rule 13d-3 under the 1934 Act) of Exchange Securities to be
received by such broker-dealer in the Exchange Offer.
"Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
"Private Exchange" see Section 2.1 hereof.
"Private Exchange Securities" see Section 2.1 hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus
as amended or supplemented by any prospectus supplement, including any
such prospectus supplement with respect to the terms of the offering of
any portion of the Registrable Securities covered by a Shelf Registration
Statement, and by all other amendments and supplements to a prospectus,
including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Purchase Agreement" see the preamble hereto.
"Registrable Securities" shall mean the Securities and, if issued,
the Private Exchange Securities; provided, however, the Securities and, if
issued, the Private Exchange Securities shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such
Securities or Private Exchange Securities for the exchange or resale
thereof, as the case may be, shall have been declared effective under the
1933 Act and such Securities or Private Exchange Securities, as the
3
<PAGE>
case may be, shall have been disposed of pursuant to such Registration
Statement, (ii) such Securities or Private Exchange Securities, as the
case may be, have been sold to the public pursuant to Rule l44 (or any
similar provision then in force, but not Rule 144A) under the 1933 Act,
(iii) such Securities or Private Exchange Securities, as the case may be,
shall have ceased to be Outstanding (as defined in the Indenture) or (iv)
with respect to the Securities, the Exchange Offer is consummated (except
in the case of Securities purchased from the Company and continued to be
held by the Initial Purchasers and except with respect to any Securities
as to which clause (iv) of Section 2.2 is applicable).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement,
including without limitation: (i) all SEC or National Association of
Securities Dealers, Inc. (the "NASD") registration and filing fees,
including, if applicable, the fees and expenses of any "qualified
independent underwriter" (and its counsel) that is required to be retained
by any holder of Registrable Securities in accordance with the rules and
regulations of the NASD, (ii) all fees and expenses incurred in connection
with compliance with state securities or blue sky laws and compliance with
the rules of the NASD (including reasonable fees and disbursements of
counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Exchange Securities or Registrable Securities
and any filings with the NASD), (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales
agreements and other documents relating to the performance of and
compliance with this Agreement, (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Securities
on any securities exchange or exchanges, (v) all rating agency fees, (vi)
the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company, including the expenses of
any special audits or "cold comfort" letters required by or incident to
such performance and compliance, (vii) the fees and expenses of the
Trustee, and any exchange agent or custodian, (viii) the reasonable fees
and expenses of the Initial Purchasers in connection with the Exchange
Offer, except for legal expenses which are separately provided for in
clause (ix) hereof, (ix) the reasonable fees, disbursements and expenses
of Cahill Gordon & Reindel (or such other counsel in lieu thereof
reasonably satisfactory to the Majority Holders and the Company) as
special counsel to the Initial Purchasers in the Exchange Offer and as
special counsel representing the Holders of Registrable Securities and (x)
any fees and disbursements of the underwriters customarily required to be
paid by issuers or sellers of securities and the reasonable fees and
expenses of any spe-
4
<PAGE>
cial experts retained by the Company in connection with any Registration
Statement, but excluding underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of Registrable
Securities by a Holder.
"Registration Statement" shall mean any registration statement of
the Company which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency or government body performing the functions currently
performed by the United States Securities and Exchange Commission.
"Securities" see the preamble hereto.
"Shelf Registration" shall mean a registration effected
pursuant to Section 2.2 hereof.
"Shelf Registration Event" see Section 2.2 hereof.
"Shelf Registration Event Date" see Section 2.2 hereof.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company pursuant to the provisions of
Section 2.2 of this Agreement which covers all of the Registrable
Securities or all of the Private Exchange Securities on an appropriate
form under Rule 415 under the 1933 Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"TIA" shall mean the Trust Indenture Act of 1939, as amended
from time to time.
"Trustee" shall mean the trustee with respect to the
Securities under the Indenture.
5
<PAGE>
2. Registration Under the 1933 Act.
2.1. Exchange Offer. To the extent not prohibited by any applicable
law or interpretation of the staff of the SEC, the Company shall, for the
benefit of the Holders, at the Company's cost, use its best efforts to (A)
prepare and, as soon as practicable but not later than 90 days following the
Closing Date, file with the SEC an Exchange Offer Registration Statement on an
appropriate form under the 1933 Act with respect to a proposed Exchange Offer
and the issuance and delivery to the Holders, in exchange for the Registrable
Securities, a like principal amount of Exchange Securities (other than Private
Exchange Securities), (B) cause the Exchange Offer Registration Statement to be
declared effective under the 1933 Act within 180 days of the Closing Date, (C)
keep the Exchange Offer Registration Statement effective until the closing of
the Exchange Offer and (D) cause the Exchange Offer to be consummated not later
than 210 days following the Closing Date. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company shall promptly commence the
Exchange Offer, it being the objective of such Exchange Offer to enable each
Holder eligible and electing to exchange Registrable Securities for Exchange
Securities (assuming that such Holder (a) is not an affiliate of the Company
within the meaning of Rule 405 under the 1933 Act, (b) is not a broker-dealer
tendering Registrable Securities acquired directly from the Company for its own
account, (c) acquired the Exchange Securities in the ordinary course of such
Holder's business and (d) has no arrangements or understandings with any person
to participate in the Exchange Offer for the purpose of distributing the
Exchange Securities) to transfer such Exchange Securities from and after their
receipt without any limitations or restrictions under the 1933 Act and under
state securities or blue sky laws.
In connection with the Exchange Offer, the Company shall:
(a) mail as promptly as practicable to each Holder a copy of the
Prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and related documents;
(b) keep the Exchange Offer open for acceptance for a period of not
less than 30 calendar days after the date notice thereof is mailed to the
Holders (or longer if required by applicable law) (such period referred
to herein as the "Exchange Period");
(c) utilize the services of the Depositary for the Exchange Offer;
(d) permit Holders to withdraw tendered Registrable Securities at
any time prior to 5:00 p.m. (New York City Time), on the last business day
of the Exchange
6
<PAGE>
Period, by sending to the institution specified in the notice, a telegram,
telex, facsimile transmission or letter setting forth the name of such
Holder, the principal amount of Registrable Securities delivered for
exchange, and a statement that such Holder is withdrawing his election to
have such Securities exchanged;
(e) notify each Holder that any Registrable Security not tendered
will remain outstanding and continue to accrue interest, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchasers and Participating Broker-Dealers as provided herein); and
(f) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If any Initial Purchaser determines upon the advice of its outside
counsel that it is not eligible to participate in the Exchange Offer with
respect to the exchange of Securities constituting any portion of an unsold
allotment in the initial distribution, as soon as practicable upon receipt by
the Company of a written request from such Initial Purchaser, the Company shall,
simultaneously with the delivery of the Exchange Securities in the Exchange
Offer, issue and deliver to such Initial Purchaser in exchange (the "Private
Exchange") for the Securities held by such Initial Purchaser, a like principal
amount of debt securities of the Company on a senior subordinated basis, that
are identical (except that such securities shall bear appropriate transfer
restrictions) to the Exchange Securities (the "Private Exchange Securities").
The Exchange Securities and the Private Exchange Securities shall be
issued under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture and which, in either case, has been qualified under
the Trust Indenture Act of 1939, as amended (the "TIA"), or is exempt from such
qualification and shall provide that the Exchange Securities shall not be
subject to the transfer restrictions set forth in the Indenture but that the
Private Exchange Securities shall be subject to such transfer restrictions. The
Indenture or such indenture shall provide that the Exchange Securities, the
Private Exchange Securities and the Securities shall vote and consent together
on all matters as one class and that none of the Exchange Securities, the
Private Exchange Securities or the Securities will have the right to vote or
consent as a separate class on any matter. The Private Exchange Securities
shall be of the same series as and the Company will seek to cause the CUSIP
Service Bureau to issue the same CUSIP numbers for the Private Exchange
Securities as for the Exchange Securities issued pursuant to the Exchange Offer.
7
<PAGE>
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(i) accept for exchange all Registrable Securities duly tendered and
not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities so accepted for exchange by the
Company; and
(iii) issue, and cause the Trustee promptly to authenticate and
deliver Exchange Securities or Private Exchange Securities, as the case
may be, to each Holder of Registrable Securities so accepted for exchange
in a principal amount equal to the principal amount of the Registrable
Securities of such Holder so accepted for exchange.
Interest on each Exchange Security and Private Exchange Security
will accrue from the last date on which interest was paid on the Registrable
Securities surrendered in exchange therefor or, if no interest has been paid on
the Registrable Securities, from the date of original issuance. The Exchange
Offer and the Private Exchange shall not be subject to any conditions, other
than (i) that the Exchange Offer or the Private Exchange, or the making of any
exchange by a Holder, does not violate applicable law or any applicable
interpretation of the staff of the SEC, (ii) the due tendering of Registrable
Securities in accordance with the Exchange Offer and the Private Exchange, (iii)
that each Holder of Registrable Securities exchanged in the Exchange Offer shall
have represented that it is not an affiliate of the Company within the meaning
of Rule 405 under the 1933 Act or, if it is an affiliate, that such holder will
comply with the registration and prospectus delivery requirements of the 1933
Act to the extent applicable, that all Exchange Securities to be received by it
shall be acquired in the ordinary course of its business and that at the time of
the consummation of the Exchange Offer it shall have no arrangement or
understanding with any person to participate in the distribution (within the
meaning of the 1933 Act) of the Exchange Securities and shall have made such
other representations as may be customary or reasonably necessary under
applicable SEC rules, regulations or interpretations to render the use of Form
S-4 or other appropriate form under the 1933 Act available and (iv) that no
action or proceeding shall have been instituted or threatened in any court or by
or before any governmental agency with respect to the Exchange Offer or the
Private Exchange which, in the Company's judgment, would reasonably be expected
to impair the ability of the Company to proceed with the Exchange Offer or the
Private Exchange. The Company shall inform the Initial Purchasers of the names
and addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right to contact such Holders and otherwise facilitate
the tender of
8
<PAGE>
Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this
Section 2.1, the provisions of this Agreement shall continue to apply, modified
as necessary, solely with respect to Registrable Securities that are Private
Exchange Securities, Registrable Securities of the type described in clause (iv)
of Section 2.2 and Exchange Securities held by Participating Broker-Dealers, and
the Company shall have no further obligation to register Registrable Securities
(other than Private Exchange Securities and Securities of the type described in
clause (iv) of Section 2.2) pursuant to Section 2.2 of this Agreement.
2.2. Shelf Registration. In the event that (i) because of any
changes in law, SEC rules or regulations or applicable interpretations thereof
by the staff of the SEC, the Company reasonably determines that it is not
permitted to effect the Exchange Offer as contemplated by Section 2.1 hereof,
(ii) the Exchange Offer Registration Statement is not declared effective within
180 days following the original issue of the Registrable Securities or the
Exchange Offer is not consummated within 210 days after the original issue of
the Registrable Securities, (iii) upon the request of any of the Initial
Purchasers with respect to any Registrable Securities which it acquired
directly from the Company and, with respect to other Registrable Securities held
by it, if such Initial Purchaser is not permitted, in the opinion of counsel to
such Initial Purchaser, pursuant to applicable law or applicable
interpretations of the staff of the SEC, to participate in the Exchange Offer
and thereby receive securities that are freely tradeable without restriction
under the 1933 Act and applicable blue sky or state securities laws or (iv) if a
Holder is not permitted by applicable law to participate in the Exchange Offer
based upon advice of counsel to the effect that such Holder may not be legally
able to participate in the Exchange Offer or does not receive fully tradeable
Exchange Securities pursuant to the Exchange Offer (any of the events specified
in (i)-(iv) being a "Shelf Registration Event" and the date of occurrence
thereof, the "Shelf Registration Event Date"), then the Company shall, at its
cost:
(a) Cause to be filed as promptly as practicable after the
occurrence of such Shelf Registration Event Date, and thereafter shall use
its best efforts to cause to be declared effective as promptly as
practicable but no later than 180 days after the original issue of the
Registrable Securities (or, in the case of a request by any Initial
Purchaser, within 30 days of such request, which shall be no earlier than
90 days after the Closing Date), a Shelf Registration Statement relating
to the offer and sale of the Registrable Securities by the Holders from
time to time in accordance with the methods of distribution elected by
the Majority Holders participating in the Shelf Registration and set
forth in such Shelf Registration Statement.
9
<PAGE>
(b) Use its best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming part
thereof to be usable by Holders for a period of two years (or one year in
the case of a request solely by an Initial Purchaser) from the date the
Shelf Registration Statement is declared effective by the SEC, or for
such shorter period that will terminate when all Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to the
Shelf Registration Statement or cease to be outstanding or otherwise to
be Registrable Securities (the "Effectiveness Period"); provided, however,
that the Effectiveness Period in respect of the Shelf Registration
Statement shall be extended to the extent required to permit dealers to
comply with the applicable prospectus delivery requirements of Rule 174
under the 1933 Act and as otherwise provided herein.
(c) Notwithstanding any other provisions hereof, use its best
efforts to ensure that (i) any Shelf Registration Statement and any
amendment thereto and any Prospectus forming part thereof and any
supplement thereto complies in all material respects with the 1933 Act
and the rules and regulations thereunder, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any supplement to such Prospectus (as amended
or supplemented from time to time), does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to
make the statements, in light of the circumstances under which they were
made, not misleading.
The Company shall not permit any securities other than Registrable
Securities to the included in the Shelf Registration Statement. The Company
further agrees, if necessary, to supplement or amend the Shelf Registration
Statement, as required by Section 3(b) below, and to furnish to the Holders of
Registrable Securities copies of any such supplement or amendment promptly after
its being used or filed with the SEC.
2.3. Expenses. The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2.1 or 2.2. Each Holder
shall pay all expenses of its counsel (other than to the extent a Registration
Expense), underwriting discounts and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement.
2.4. Effectiveness. (a) The Company will be deemed not to have used
its best efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration
10
<PAGE>
Statement, as the case may be, to become, or to remain, effective during the
requisite period if the Company voluntarily takes any affirmative action that
would, or omits to take any action which omission would, result in any such
Registration Statement not being declared effective or in the holders of
Registrable Securities covered thereby not being able to exchange or offer and
sell such Registrable Securities during that period as and to the extent
contemplated hereby, unless such action is required by applicable law.
(b) An Exchange Offer Registration Statement pursuant to Section 2.1
hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not
be deemed to have become effective unless it has been declared effective by the
SEC; provided, however, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to a Shelf Registration Statement
is interfered with by any stop order, injunction or other order or requirement
of the SEC or any other governmental agency or court, such Registration
Statement will be deemed not to have become effective during the period of such
interference, until the offering of Registrable Securities pursuant to such
Registration Statement may legally resume.
2.5. Liquidated Damages. In the event that (a) the Exchange Offer
Registration Statement is not filed with the Commission on or prior to the 90th
calendar day following the date of original issue of the Securities, (b) the
Exchange Offer Registration Statement has not been declared effective on or
prior to the 180th calendar day following the date of original issue of the
Securities or (c) the Exchange Offer is not consummated on or prior to the 210th
calendar day following the date of original issue of the Securities or a Shelf
Registration Statement is not declared effective on or prior to the 180th
calendar day following the date of original issue of the Securities (or, if a
Shelf Registration Statement is required to be filed because of the request of
any Initial Purchaser, 30 days following the request by any such Initial
Purchasers that the Company file the Shelf Registration Statement) (each such
event referred to in clauses (a) through (c) above, a "Registration Default"),
the Company will pay liquidated damages to each Holder of Registrable Securities
as to which such Registration Default applies, during the period of such
Registration Default, in an amount equal to $0.192 per week per $1,000 amount of
such Registrable Securities held by such Holder until the applicable
Registration Statement is filed or declared effective, the Exchange Offer is
consummated or the Shelf Registration Statement again becomes effective, as the
case may be. All accrued liquidated damages shall be paid to Holders in the same
manner as interest payments on the Securities on semi-annual payment dates
which correspond to interest payment dates for the Securities. Following the
cure of all Registration Defaults, the accrual of liquidated damages will
cease.
11
<PAGE>
3. Registration Procedures.
In connection with the obligations of the Company with respect to
Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Company
shall:
(a) prepare and file with the SEC a Registration Statement, within
the relevant time period specified in Section 2, on the appropriate form
under the 1933 Act, which form (i) shall be selected by the Company, (ii)
shall, in the case of a Shelf Registration, be available for the sale of
the Registrable Securities by the selling Holders named therein and by any
Affiliated Market Maker, (iii) shall comply as to form in all material
respects with the requirements of the applicable form and include or
incorporate by reference all financial statements required by the SEC to
be filed therewith or incorporated by reference therein, and (iv) shall
comply in all respects with the requirements of Regulation S-T under the
1933 Act, and use its best efforts to cause such Registration Statement to
become effective and remain effective in accordance with Section 2 hereof;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary under
applicable law to keep such Registration Statement effective for the
applicable period; and cause each Prospectus to be supplemented if so
determined by the Company or requested by the SEC, by any required
prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the 1933 Act and
comply with the provisions of the 1933 Act, the 1934 Act and the rules and
regulations thereunder applicable to them with respect to the disposition
of all securities covered by each Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the selling Holders thereof described in this Agreement
(including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities and each Affiliate Market Maker, at least five
business days prior to filing, that a Shelf Registration Statement with
respect to the Registrable Securities is being filed and advising such
Holders that the distribution of Registrable Securities will be made in
accordance with the method selected by the Majority Holders participating
in the Shelf Registration; (ii) furnish to each Holder of Registrable
Securities and each Affiliated Market Maker and to each underwriter of an
underwritten offering of Registrable Securities, if any, without charge,
as many copies of each Prospectus, including each preliminary Prospectus,
and any amendment or supplement thereto and such other documents as such
Holder or Affiliated Market Maker
12
<PAGE>
or underwriter may reasonably request, including financial statements and
schedules and, if so requested, all exhibits in order to facilitate the
public sale or other disposition of the Registrable Securities; and (iii)
hereby consent to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Registrable Securities in
connection with the offering and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto and by
each Affiliated Market Maker in connection with sales or market making
activities;
(d) in the case of a Shelf Registration, to register or qualify the
Registrable Securities under all applicable state securities or "blue sky"
laws of such jurisdictions as any Holder of Registrable Securities
covered by a Registration Statement and each underwriter of an
underwritten offering of Registrable Securities shall reasonably request
by the time the applicable Registration Statement is declared effective by
the SEC, and do any and all other acts and things which may be reasonably
necessary or advisable to enable each such Holder and underwriter to
consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder; provided, however, that the Company shall
not be required to (i) qualify as a foreign corporation or as a dealer in
securities in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), or (ii) take any action which would
subject it to general service of process or taxation in any such
jurisdiction where it is not then so subject;
(e) notify promptly each Holder of Registrable Securities under a
Shelf Registration, each Affiliated Market Maker and any Participating
Broker-Dealer who has notified the Company that it is utilizing the
Exchange Offer Registration Statement as provided in paragraph (f) below
and, if requested by such Holder or Affiliated Market Maker or
Participating Broker-Dealer, confirm such advice in writing promptly (i)
when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective, (ii)
of any request by the SEC or any state securities authority for
post-effective amendments and supplements to a Registration Statement and
Prospectus or for additional information after the Registration Statement
has become effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) in the case of a Shelf Registration, if, between the
effective date of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations and
warranties of the Company contained in any underwriting agreement,
securities sales agreement or other similar agreement, if any, relating to
the offering cease to be true and correct in all mate-
13
<PAGE>
rial respects, (v) of the happening of any event or the discovery of any
facts during the period a Shelf Registration Statement is effective which
makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which requires the making of
any changes in such Registration Statement or Prospectus in order to make
the statements therein not misleading, (vi) of the receipt by the Company
of any notification with respect to the suspension of the qualification of
the Registrable Securities or the Exchange Securities, as the case may be,
for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose and (vii) of any determination by the Company
that a post-effective amendment to such Registration Statement would be
appropriate;
(f) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled
Plan of Distribution" which section shall be reasonably acceptable to
Chase Securities Inc. on behalf of the Participating Broker-Dealers, and
which shall contain a summary statement of the positions taken or policies
made by the staff of the SEC with respect to the potential "underwriter"
status of any broker-dealer that holds Registrable Securities acquired for
its own account as a result of market-making activities or other trading
activities and that will be the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of Exchange Securities to be received by such
broker-dealer in the Exchange Offer, whether such positions or policies
have been publicly disseminated by the staff of the SEC or such positions
or policies, in the reasonable judgment of the Initial Purchasers and its
counsel, represent the prevailing views of the staff of the SEC, including
a statement that any such broker-dealer who receives Exchange Securities
for Registrable Securities pursuant to the Exchange Offer may be deemed a
statutory underwriter and must deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of such
Exchange Securities, (ii) furnish to each Participating Broker-Dealer who
has delivered to the Company the notice referred to in Section 3(e),
without charge, as many copies of each Prospectus included in the Exchange
Offer Registration Statement, including any preliminary prospectus, and
any amendment or supplement thereto, as such Participating Broker-Dealer
may reasonably request, (iii) hereby consent to the use of the Prospectus
forming part of the Exchange Offer Registration Statement or any amendment
or supplement thereto, by any person subject to the prospectus delivery
requirements of the SEC, including all Participating Broker-Dealers, in
connection with the sale or transfer of the Exchange Securities covered by
the Prospectus or any amendment or supplement thereto, for a period not to
exceed 180 days, and (iv) include in the transmittal letter or similar
documentation to be executed by an exchange offeree in order to
participate in the
14
<PAGE>
Exchange Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding Registrable Securities
acquired for its own account as a result of market-making activities or
other trading activities, it will deliver a prospectus meeting the
requirements of the 1933 Act in connection with any resale of Exchange
Securities received in respect of such Registrable Securities pursuant to
the Exchange Offer;" and
(y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer
will not be deemed to admit that it is an underwriter within the meaning
of the 1933 Act; and
(B) in the case of any Exchange Offer Registration Statement,
the Company agrees, if requested by the Initial Purchaser, to deliver to
the Initial Purchasers on behalf of the Participating Broker-Dealers upon
consummation of the Exchange Offer (i) an opinion of counsel or opinions
of counsel in form and substance reasonably satisfactory to the Initial
Purchasers covering the matters customarily covered in underwritten
offerings and such other matters as may be reasonably requested (it being
agreed that the matters to be covered by such opinion may be subject to
customary qualifications and exceptions), (ii) an officers' certificate
containing certifications substantially similar to those set forth in
Section 5(d) of the Purchase Agreement and such other certifications as
are customarily delivered in a public offering of debt securities and
(iii) as well as upon effectiveness of the Exchange Offer Registration
Statement, a comfort letter or comfort letters, in customary form if
permitted by Statement on Auditing Standards No. 72 of the American
Institute of Certified Public Accountants (or if such a comfort letter is
not permitted, an agreed upon procedures letter in customary form) from
the Company's independent certified public accountants (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements are, or are required to be, included in the
Registration Statement);
(g) (i) in the case of an Exchange Offer, furnish counsel for the
Initial Purchasers and (ii) in the case of a Shelf Registration, furnish
counsel for the Holders of Registrable Securities copies of any comment
letters received from the SEC or any other request by the SEC or any state
securities authority for amendments or supplements to a Registration
Statement and Prospectus or for additional information;
15
<PAGE>
(h) make every reasonable effort to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(i) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities and each Affiliated Market Maker included within
the coverage of such Shelf Registration Statement, and each underwriter,
if any, without charge, at least one conformed copy of each Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules (without documents incorporated therein by
reference and all exhibits thereto, unless requested);
(j) in the case of a Shelf Registration, cooperate with the selling
Holders of Registrable Securities to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold
and not bearing any restrictive legends; and enable such Registrable
Securities to be in such denominations (consistent with the provisions of
the Indenture) and registered in such names as the selling Holders or the
underwriters, if any, may reasonably request at least two business days
prior to the closing of any sale of Registrable Securities pursuant to
such Shelf Registration Statement;
(k) in the case of a Shelf Registration, upon the occurrence of any
circumstance contemplated by Sections 3(e)(v) and 3(e)(vi) hereof as
promptly as practicable after the occurrence of such event, use its best
efforts to prepare a supplement or post-effective amendment to the
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable
Securities or Participating Broker-Dealers or Affiliated Market Makers,
such Prospectus will not contain at the time of such delivery any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under which
they were made, not misleading or will remain so qualified. At such time
as such public disclosure is otherwise made or the Company determines
that such disclosure is not necessary, in each case, to correct any
misstatement of a material fact or to include any omitted material fact,
the Company agrees promptly to notify each Holder of such determination
and to furnish each Holder such number of copies of the Prospectus as
amended or supplemented, as such Holder may reasonably request;
(l) in the case of a Shelf Registration, a reasonable time prior to
the filing of any Registration Statement, any Prospectus, any amendment to
a Registration Statement or supplement to a Prospectus or any document
which is to be incorpo-
16
<PAGE>
rated by reference into a Registration Statement or Prospectus after
initial filing of a Registration Statement, provide copies of such
document to the Initial Purchasers on behalf of such Holders and to each
Affiliated Market Maker; and make representatives of the Company as shall
be reasonably requested by the Holders of Registrable Securities, or the
Initial Purchasers on behalf of such Holders, or Affiliated Market Makers
available for discussion of such document;
(m) obtain a CUSIP number for all Exchange Securities, Private
Exchange Securities or Registrable Securities, as the case may be, not
later than the effective date of a Registration Statement, and provide the
Trustee with printed certificates for the Exchange Securities, Private
Exchange Securities or Registrable Securities, as the case may be, in a
form eligible for deposit with the Depositary;
(n) (i) cause the Indenture or an indenture to be qualified under
the TIA in connection with the registration of the Exchange Securities or
Registrable Securities, as the case may be, (ii) cooperate with the
Trustee and the Holders to effect such changes to the Indenture as may be
required for the Indenture to be so qualified in accordance with the
terms of the TIA and (iii) execute, and use its best efforts to cause the
Trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the
SEC to enable the Indenture or an indenture to be so qualified in a timely
manner;
(o) in the case of a Shelf Registration, enter into agreements
(including underwriting agreements) and take all other customary and
appropriate actions as are reasonably requested in order to expedite or
facilitate the disposition of such Registrable Securities, and in such
connection whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, if
requested by (x) any Initial Purchaser, in the case where an Initial
Purchasers holds Securities acquired by it as part of its initial
distribution and (y) other Holders of Securities covered thereby:
(i) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, as are
customarily made by issuers to underwriters in similar underwritten
offerings;
(ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters, if
any, and the Holders of a majority in principal amount of the
Registrable Securities being sold) addressed to each selling Holder
and the underwriters, if any, covering
17
<PAGE>
the matters customarily covered in opinions requested in sales of
securities or underwritten offerings and such other matters as may
be reasonably requested by such Holders and underwriters (it being
agreed that the matters to be covered by such opinion may be subject
to customary qualifications and exceptions);
(iii) obtain "cold comfort" letters and updates thereof from
the Company's independent certified public accountants (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company
for which financial statements are, or are required to be, included
in the Registration Statement) addressed to the underwriters, with
copies to each of the selling Holders of Registrable Securities,
such letters to be in customary form and covering matters of the
type customarily covered in "cold comfort" letters to underwriters
in connection with similar underwritten offerings in accordance with
Statement on Auditing Standards No. 72 of the American Institute of
Certified Public Accounts;
(iv) enter into a securities sales agreement with the Holders
and an agent of the Holders providing for, among other things, the
appointment of such agent for the selling Holders for the purpose of
soliciting purchases of Registrable Securities, which agreement
shall be in form, substance and scope customary for similar
offerings;
(v) if an underwriting agreement is entered into, cause the
same to set forth indemnification provisions and procedures
substantially equivalent to the indemnification provisions and
procedures set forth in Section 4 hereof with respect to the
underwriters and all other parties to be indemnified pursuant to
said Section or, at the request of any underwriters, in the form
customarily provided to such underwriters in similar types of
transactions; and
(vi) deliver such documents and certificates as may be
reasonably requested and as are customarily delivered in similar
offerings to the Holders of a majority in principal amount of the
Registrable Securities being sold and the managing underwriters, if
any.
The above shall be done at each closing under any underwriting or similar
agreement or as and to the extent required thereunder.
18
<PAGE>
(p) in the case of a Shelf Registration or if a Prospectus is
required to be delivered by any Participating Broker-Dealer in the case of
an Exchange Offer, make reasonably available for inspection by
representatives of the Holders of the Registrable Securities, any
underwriters participating in any disposition pursuant to a Shelf
Registration Statement, any Participating Broker-Dealer and any counsel or
accountant retained by any of the foregoing (collectively, the
"Inspectors"), at the offices where normally kept, during reasonable
business hours, all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records")
reasonably necessary to enable such persons to exercise any applicable
due diligence responsibilities, and cause the respective officers,
directors, employees, and any other agents of the Company to supply all
information reasonably requested by any such representative, underwriter,
special counsel or accountant in connection with a Registration Statement,
and make such representatives of the Company available for discussion of
such documents as shall be reasonably requested by the Initial Purchasers;
provided, however, that the foregoing inspection and information
gathering shall be coordinated on behalf of the Initial Purchasers by
Chase Securities Inc. and on behalf of the other parties, by one counsel
designated by the holders of a Majority of the Registrable Securities.
Records which the Company determines, in good faith, to be confidential
and any records which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a material misstatement or
omission in such Registration Statement or is otherwise required by law,
(ii) the release of such Records is ordered pursuant to a subpoena or
other order from a court of competent jurisdiction or is necessary in
connection with any action, suit or proceeding or (iii) the information in
such Records has been made generally available to the public. Each selling
Holder of such Registrable Securities and each such Participating
Broker-Dealer will be required to agree in writing that information
obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company unless and until such is
made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to further agree in writing that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction,
give notice to the Company and allow the Company at its expense to
undertake appropriate action to prevent disclosure of the Records deemed
confidential;
(q) (i) in the case of an Exchange Offer Registration Statement a
reasonable time prior to the filing of any Exchange Offer Registration
Statement, any Prospectus forming a part thereof, any amendment to an
Exchange Offer Registra-
19
<PAGE>
tion Statement or amendment or supplement to such Prospectus, provide
copies of such document to the Initial Purchasers or counsel to the
Holders of Registrable Securities and make such changes in any such
document prior to the filing thereof as the Initial Purchasers to counsel
to the Holders of Registrable Securities and may reasonably request and,
except as otherwise required by applicable law, nor file any such document
in a form to which the Initial Purchasers on behalf of the Holders of
Registrable Securities and counsel to Holders of Registrable Securities
shall not have previously been advised and furnished a copy of or to which
the Initial Purchasers on behalf of the Holders of Registrable Securities
shall reasonably object and make the representatives of the Company
available for discussion of such documents as shall be reasonably
requested by the Initial Purchasers, and
(ii) in the case of a Shelf Registration, a reasonable time prior to
filing any Shelf Registration Statement, any Prospectus forming a part
thereof, any amendment to such Shelf Registration Statement or amendment
or supplement to such Prospectus, provide copies of such document to the
Holders of Registrable Securities, to the Initial Purchasers, to counsel
on behalf of the Holders and to the underwriter or underwriters of an
underwritten offering of Registrable Securities, if any, make such changes
in any such document prior to the filing thereof as the Initial
Purchasers, the counsel to the Holders or the underwriter or underwriters
reasonably request and not file any such document in a form to which the
Majority Holders, the Initial Purchasers on behalf of the Holders of the
Registrable Securities, counsel to the Holders of Registrable Securities
or any underwriter shall reasonably object, and make the representatives
of the Company available for discussion of such document as shall be
reasonably requested by the Holders of Registrable Securities, the Initial
Purchasers on behalf of such Holders, or any underwriter;
(r) in the case of a Shelf Registration, use its best efforts to
cause all Registrable Securities to be listed on any securities exchange
on which similar debt securities issued by the Company are then listed if
requested by the Majority Holders, or if requested by the underwriter or
underwriters of an underwritten offering of Registrable Securities, if
any;
(s) in the case of a Shelf Registration, use its best efforts to
cause the Registrable Securities to be rerated by the appropriate rating
agencies, if so requested by the Majority Holders, or if requested by the
underwriter or underwriters of an underwritten offering of Registrable
Securities, if any;
(t) comply with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make
available to its secu-
20
<PAGE>
rity holders an earning statement satisfying the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder (or any similar rule
promulgated under the 1933 Act) no later than the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is
a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or
best efforts underwritten offering and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal
quarter of the Company after the effective date of a Registration
Statement, which statement shall cover said 12-month periods;
(u) cooperate and assist in any filings required to be made with the
NASD and, in the case of a Shelf Registration, in the performance of any
due diligence investigation by any underwriter and its counsel (including
any "qualified independent underwriter" that is required to be retained
in accordance with the rules and regulations of the NASD); and
(v) upon consummation of an Exchange Offer or a Private Exchange, if
requested by the Trustee, obtain a customary opinion of counsel to the
Company addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer or Private
Exchange, and which includes an opinion that (i) the Company has duly
authorized, executed and delivered the Exchange Securities and/or Private
Exchange Securities, as applicable and the related indenture, and (ii)
each of the Exchange Securities and related indenture constitute a legal,
valid and binding obligation of the Company, enforceable against the
Company in accordance with its respective terms (in each case with
customary exceptions).
The Company may (as a condition to such Holder's participation in
the Shelf Registration) require each Holder of Registrable Securities to furnish
to the Company such information regarding the Holder and the proposed
distribution by such Holder of such Registrable Securities for inclusion in any
Shelf Registration Statement or Prospectus included therein as the Company may
from time to time reasonably request in writing. The Company shall have no
obligation to register under the 1933 Act the Registrable Securities of a seller
who so fails to furnish such information within a reasonable time after
receiving such request. Each Holder as to which any Shelf Registration is being
effected agrees to furnish to the Company all information with respect to such
Holder necessary to make the information previously furnished to the Company by
such Holder not materially misleading.
In the case of a Shelf Registration Statement, each Holder and each
Affili-
21
<PAGE>
ated Market Maker agrees that, upon receipt of any notice from the Company of
the occurrence of a circumstance contemplated by Sections 3(e)(v) and 3(e)(vi)
hereof, such Holder will forthwith discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Person's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
3(k) hereof, and, if so directed by the Company, such Holder will deliver to
the Company (at its expense) all copies in such Person's possession of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice.
If any of the Registrable Securities covered by any Shelf
Registration Statement are to be sold in an underwritten offering, the
underwriter or underwriters and manager or managers that will manage such
offering will be selected by the Majority Holders of such Registrable Securities
included in such offering and shall be acceptable to the Company. No Holder of
Registrable Securities may participate in any underwritten registration
hereunder unless such Holder (a) agrees to sell such Holder's Registrable
Securities on the basis provided in any underwriting arrangements approved by
the persons entitled hereunder to approve such arrangements and (b) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
4. Indemnification; Contribution.
(a) In connection with any Registration Statement, the Company
agrees to indemnify and hold harmless the Initial Purchasers, each Holder, each
Participating Broker-Dealer, each person who participates as an underwriter (any
such person being an "Underwriter") and each Person, if any, who controls any
Holder or Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Registration
Statement (or any amendment or supplement thereto) pursuant to which
Exchange Securities or Registrable Securities were registered under the
1933 Act, including all documents incorporated therein by reference, or
the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
22
<PAGE>
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
4(d) below) any such settlement is effected with the written consent of
the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by any indemnified party),
reasonably incurred ininvestigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Holder or Underwriter expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto)
provided, further, that the Company shall not be liable to any such Holder,
Participating Broker-Dealer or controlling person, with respect to any untrue
statement or alleged untrue statement or omission or alleged omission in any
preliminary Prospectus to the extent that any such loss, liability, claim,
damage or expense of any Holder, Participating Broker-Dealer or controlling
person results from the fact that such Holder or Participating Broker-Dealer
sold Securities to a person to whom there was not sent or given, at or prior to
the written confirmation of such sale, a copy of the final Prospectus as then
amended or supplemented if the Company had previously furnished copies thereof
to such Holder or Participating Broker-Dealer and the loss, liability, claim,
damage or expense of such Holder, Participating Broker-Dealer or controlling
person results from an untrue statement or omission of a material fact contained
in the preliminary Prospectus which was corrected in the final Prospectus. Any
amounts advanced by the Company to an indemnified party pursuant to this Section
4 as a result of such losses shall be returned to the Company if it shall be
finally determined by such a court in a judgment not subject to appeal or final
review that such indemnified party was not entitled to indemnification by the
Company.
(b) Each Holder severally, but not jointly, agrees to indemnify and
hold harmless the Company, the Initial Purchasers, each Underwriter and the
other selling
23
<PAGE>
Holders, and each of their respective directors and officers, and each Person,
if any, who controls the Company, the Initial Purchasers, each Underwriter or
any other selling Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 4(a) hereof, as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Shelf Registration Statement (or any
amendment thereto) or any Prospectus included therein (or any amendment or
supplement thereto) in reliance upon and in conformity with written information
with respect to such Holder furnished to the Company by such Holder expressly
for use in the Shelf Registration Statement (or any amendment thereto) or such
Prospectus (or any amendment or supplement thereto); provided, however, that no
such Holder shall be liable for any claims hereunder in excess of the amount of
net proceeds received by such Holder from the sale of Registrable Securities
pursuant to such Shelf Registration Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action or proceeding
commenced against it in respect of which indemnity may be sought hereunder, but
failure so to notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If an indemnifying party so elects within a reasonable time after
receipt of such notice, an indemnifying party, severally or jointly with any
other indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and reasonably acceptable to the indemnified
parties defendant (or target of) in such action, provided, however, that if (i)
representation of such indemnified party by the same counsel would present a
conflict of interest or (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying
party and any such indemnified party reasonably determines that there may be
legal defenses available to such indemnified party which are different from or
in addition to those available to such indemnifying party, then in the case of
clauses (i) or (ii) of this Section 4(c) such indemnifying party and counsel for
each indemnifying party or parties shall not be entitled to assume such defense.
If an indemnifying party is not entitled to assume the defense of such action as
a result of the proviso to the preceding sentence, counsel for each indemnified
party or parties shall be entitled to conduct the defense of such indemnified
party or parties. If an indemnifying party assumes the defense of such action,
in accordance with and as permitted by the provisions of this paragraph, such
indemnifying parties shall not be liable for any fees and expenses of counsel
for the indemnified parties incurred thereafter in connection with such action.
In no event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition
24
<PAGE>
to any local counsel) separate from their own counsel for all indemnified
parties in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii)
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 4(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses for counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 4(a)(ii)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party substantiating the unpaid balance as unreasonable, in each
case prior to the date of such settlement.
(e) If the indemnification provided for in this Section 4 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand, and the Holders
and the Initial Purchasers on the other hand, in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
25
<PAGE>
The relative fault of the Company on the one hand and the Holders
and the Initial Purchasers on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company, the Holders or the Initial Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Holders and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 4 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 4. The aggregate amount of losses, liabilities, claims, damages and
expenses incurred by an indemnified party and referred to above in this Section
4 shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 4, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Securities sold by it were offered exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 4, each Person, if any, who controls an
Initial Purchaser or Holder within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
Initial Purchaser or Holder, and each director of the Company and each Person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company.
5. Additional Agreements with Respect to Affiliated Market Makers.
5.1. From and after the effectiveness of any Registration Statement,
the Company shall, for so long as any Securities, Exchange Securities or Private
Exchange
26
<PAGE>
Securities are outstanding and any Affiliated Market Maker is required by
applicable law in the judgment of counsel to the Initial Purchasers, after
consultation with counsel to the Company to deliver a prospectus in connection
with sales or market making activities, periodically amend each Registration
Statement or amend each Prospectus covering Securities, Exchange Securities or
Private Exchange Securities to reflect the occurrence of any fact or information
becoming known to the Company that should be set forth in an amendment to any
such Registration Statement or in a supplement to any such Prospectus so that
each such Prospectus, when delivered by an Affiliated Market Maker to a
purchaser in connection with sales or market marking activities of such
Affiliated Market Maker, will comply with applicable law.
5.2. Prior to filing any amendment to any such Registration
Statement or any supplement to any such Prospectus, the Company shall furnish a
reasonable period of time prior to the proposed filing thereof to each
Affiliated Market Maker and their counsel copies of all such documents proposed
to be filed, which documents shall be subject to review. The Company shall
provide to each Affiliated Market Maker and such counsel such reasonable number
of copies of each filed amendment or supplement as shall be requested and
hereby consents to the use of such Prospectus or any amendment or supplement
thereto by each Affiliated Market Maker in connection with sales or market
making activities with respect to the Securities, Exchange Securities or Private
Exchange Securities.
5.3. In connection with any such sales or market making activities
as contemplated by this Section 5, the Company agrees to indemnify each
Affiliated Market Maker, and if applicable to contribute to such Affiliated
Market Maker and such Affiliated Market Maker agrees to indemnify the Company,
and if applicable to contribute to the Company, in each case in a manner
substantially identical to that specified in Section 4 hereof.
5.4. In the case of a Registration Statement, each Affiliated Market
Maker agrees that, upon receipt of any notice from the Company of the occurrence
of a circumstance contemplated by the following:
(i) the happening of any event or the discovery of any facts during
the period a Registration Statement is effective which makes any statement
made in such Registration Statement or the related Prospectus untrue in
any material respect or which requires the making of any changes in such
Registration Statement or Prospectus in order to make the statements
therein not misleading; or
27
<PAGE>
(ii) the receipt by the Company of any notification with respect to
the suspension of the qualification of the Exchange Securities, for sale
in any jurisdiction or the initiation or threatening of any proceeding
for such purpose, such Affiliated Market Maker will forthwith discontinue
disposition of such Exchange Securities, pursuant to a Registration
Statement until such Person's receipt of the copies of the supplemented or
amended Prospectus in accordance with the following:
that as promptly as practicable after the occurrence of an event
contemplated by (i) and (ii) of this Section 5.4, the Company shall use
its best efforts to prepare a supplement or post-effective amendment to
the Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Exchange
Securities, such Prospectus will not contain at the time of such delivery
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading or will remain so qualified.
Further, if so directed by the Company, such Affiliated Market Maker
will deliver to the Company (at its expense) all copies in such Person's
possession of the Prospectus covering such Exchange Securities current at the
time of receipt of such notice.
6. Miscellaneous.
6.1. Rule 144 and Rule 144A. For so long as the Company is subject
to the reporting requirements of Section 13 or 15 of the 1934 Act and any
Registrable Securities remain outstanding, the Company will file the reports
required to be filed by it under the 1933 Act and Section 13(a) or 15(d) of the
1934 Act and the rules and regulations adopted by the SEC thereunder. If the
Company ceases to be so required to file such reports, the Company covenants
that it will upon the request of any Holder of Registrable Securities (a) make
publicly available such information as is necessary to permit sales pursuant to
Rule 144 under the 1933 Act, (b) deliver such information to a prospective
purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933
Act and it will take such further action as any Holder of Registrable Securities
may reasonably request, and (c) take such further action that is reasonable in
the circumstances, in each case, to the extent required from time to time to
enable such Holder to sell its Registrable Securities without registration under
the 1933 Act within the limitation of the exemptions provided by (i) Rule 144
under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule
144A under the 1933 Act, as such Rule may be amended from time to time, or (iii)
any similar rules or regulations hereafter adopted by the SEC. Upon the request
of any Holder of Registrable Securities, the Company will deliver to such Holder
a
28
<PAGE>
written statement as to whether it has complied with such requirements.
6.2. No Inconsistent Agreements. The Company has not entered into
and the Company will not after the date of this Agreement enter into any
agreement which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in any way
conflict with the rights granted to the holders of the Company's other issued
and outstanding securities under any such agreements.
6.3. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure.
6.4. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery (a) if to a Holder, at the most current address given by such Holder to
the Company by means of a notice given in accordance with the provisions of
this Section 6.4, which address initially is the address set forth in the
Purchase Agreement with respect to the Initial Purchasers; and (b) if to the
Company, initially at the Company's address set forth in the Purchase Agreement,
and thereafter at such other address of which notice is given in accordance with
the provisions of this Section 6.4.
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; and
on the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall
be concurrently delivered by the person giving the same to the Trustee under
the Indenture, at the address specified in such Indenture.
6.5. Successor and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or
29
<PAGE>
other disposition of Registrable Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable Securities such
person shall be conclusively deemed to have agreed to be bound by and to perform
all of the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase Agreement,
and such person shall be entitled to receive the benefits hereof.
6.6. Third Party Beneficiaries. The Initial Purchasers (even if the
Initial Purchasers are not Holders of Registrable Securities) shall be third
party beneficiaries to the agreements made hereunder between the Company, on the
one hand, and the Holders, on the other hand, and shall have the right to
enforce such agreements directly to the extent they deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder. Each Holder of Registrable Securities shall be a third party
beneficiary to the agreements made hereunder between the Company, on the one
hand and the Initial Purchasers on the other hand, and shall have the right to
enforce such agreements directly to the extent it deems such enforcement
necessary or advisable to protect its rights hereunder.
6.7. Specific Enforcement. Without limiting the remedies available
to the Initial Purchasers and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section 2.1 through
2.4 hereof may result in material irreparable injury to the Initial Purchasers
or the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, the Initial Purchasers or any Holder may obtain such
relief as may be required to specifically enforce the Company's obligations
under Section 2.1 through 2.4 hereof.
6.8. Restriction on Resales. Until the expiration of two years after
the original issuance of the Securities, the Company will not, and will cause
their "affiliates" (as such term is defined in Rule 144(a)(1) under the 1993
Act) not to, resell any Securities which are "restricted securities" (as such
term is defined under Rule 144(a)(3) under the 1933 Act) that have been
reacquired by any of them and shall immediately upon any purchase of any such
Securities submit such Securities to the Trustee for cancellation.
6.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
30
<PAGE>
6.10. Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
6.11. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
6.12. Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
31
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
FISHER SCIENTIFIC INTERNATIONAL
INC.
By: /s/ Todd M. DuChene
----------------------------
Name: Todd M. DuChene
Title: Vice President, General
Counsel and Secretary
Confirmed and accepted as of the date first above written:
CHASE SECURITIES INC.
By: /s/ Daniel P. Tredwell
---------------------------------
Name: Daniel P. Tredwell
Title: Managing Director
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Lex Maultsby
---------------------------------
Name: Lex Maultsby
Title: Vice President
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: /s/ Ephraim Fields
---------------------------------
Name: Ephraim Fields
Title: Vice President
32
STOCK PURCHASE AGREEMENT
among
FISHER SCIENTIFIC INTERNATIONAL INC.,
as Porte-Fort and Guarantor
FISHER SCIENTIFIC HOLDINGS FRANCE S.A.
as Buyer
and
CAPIAC, SAPACA 97, SAPCAR 97, SAPPI 97, SAPPEF 97,
PIERRE BLOCK, ANNE-CATHERINE BLOCK-DERRIEY,
PIERRE-FRANCOIS BLOCK, CAROLINE BLOCK
and
MARTHE BLOCK
as Sellers and/or Seller's Guarantors
Dated November 9, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I Page
SALE AND PURCHASE OF THE SELLERS' SHARES............................. 4
Section 1.1 Sale and Purchase of the Sellers' Shares............... 4
Section 1.2 Closing; Conditions Precedent ......................... 5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS........................ 10
Section 2.1 Corporate and Governmental Authorizations.............. 11
Section 2.2 Corporate Existence and Authority; Capital Stock....... 11
Section 2.3 Subsidiaries........................................... 12
Section 2.4 Affiliate Companies and Transactions................... 12
Section 2.5 No Conflicts........................................... 13
Section 2.6 Financial Statements................................... 13
Section 2.7 Absence of Undisclosed Liabilities..................... 14
Section 2.8 Absence of Certain Events.............................. 14
Section 2.9 Assets................................................. 15
Section 2.10 Compliance with Laws and Other Instruments............. 16
Section 2.11 Litigation............................................. 16
Section 2.12 Real Property.......................................... 17
Section 2.13 Environmental Matters.................................. 18
Section 2.14 Employees; Labor Matters; etc.......................... 18
Section 2.15 Taxes and Social Charges............................... 19
Section 2.16 Intellectual Property.................................. 20
Section 2.17 Material Contracts..................................... 20
Section 2.18 Product Liability...................................... 21
Section 2.19 Bank Accounts.......................................... 22
Section 2.20 Brokers................................................ 22
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FISHER AND
THE BUYER............................................................ 22
<PAGE>
Section 3.1 Corporate Existence; Authorizations ................... 22
Section 3.2 No Conflicts........................................... 23
Section 3.3 Brokers................................................ 23
ARTICLE IV
COVENANTS............................................................. 24
Section 4.1 Conduct of the Business................................ 24
Section 4.2 Public Announcements and Confidentiality............... 25
Section 4.3 Non-Competition........................................ 26
Section 4.4 Due Diligence Investigations; Information.............. 26
Section 4.5 Further Actions and Assurances......................... 28
Section 4.6 Tender Offer; Other Stock Exchange Transactions........ 28
Section 4.7 Divestiture of Novodirect GmbH......................... 29
ARTICLE V
INDEMNIFICATION....................................................... 29
Section 5.1 Indemnification by Pierre Block........................ 29
Section 5.2 Indemnification by Fisher and the Buyer................ 29
Section 5.3 Survival of Representations and Warranties............. 30
Section 5.4 De Minimus; Limitations; Mitigation; Assignment;
Access to Information.................................. 30
Section 5.5 Calculation of Amount of Loss; Adjustments............. 31
Section 5.6 Indemnification Procedures............................. 32
ARTICLE VI
DEFINITIONS........................................................... 33
Section 6.1 Certain Defined Terms.................................. 33
Section 6.2 Other Defined Terms.................................... 36
ARTICLE VII
MISCELLANEOUS......................................................... 36
Section 7.1 Termination............................................ 37
Section 7.2 Governing Law.......................................... 37
Section 7.3 Arbitration............................................ 37
Section 7.4 Amendments; etc........................................ 38
<PAGE>
Section 7.5 Assignment.............................................. 38
Section 7.6 Notices................................................. 38
Section 7.7 Expenses................................................ 39
Section 7.8 Severability............................................ 39
Section 7.9 No Third Party Beneficiaries............................ 39
Section 7.10 Language................................................ 39
Section 7.11 Integration............................................. 40
Section 7.12 Section Headings........................................ 40
Section 7.13 Execution Copies........................................ 40
Section 7.14 Subsequent Ratification by Buyer........................ 40
<PAGE>
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated November 9, 1998 (this "Agreement"),
among :
FISHER SCIENTIFIC INTERNATIONAL INC. ("Fisher"), a corporation
organized and existing under the laws of Delaware and with its principal office
at Liberty Lane, Hampton, New Hampshire 03842, represented by Robert Gagalis,
its Vice President-Finance and Treasurer, duly authorized to execute this
agreement;
FISHER SCIENTIFIC HOLDINGS FRANCE S.A. (the "Buyer"), a societe
anonyme organized and existing under the laws of France and with its registered
office at 17 rue de la Baume, 75008 Paris, registered with the Commercial
Registry of Paris under number B 398 827 337, represented by Michael Harper,
Chairman of the Board of Directors, duly authorized to execute this agreement;
CAPIAC, a societe civile organized and existing under the laws of
France and with its registered office at 8 rue de la Cote d'Azur, 67100
Strasbourg, registered with the Commercial Registry of Strasbourg under number D
338 383 797 ("Capiac"), represented by Pierre Block, its Manager (Gerant), duly
authorized to execute this agreement;
SAPACA 97, a societe anonyme organized and existing under the laws
of France, and with its registered office at 23 rue de Paris, 91370 Verrieres le
Buisson, registered with the Commercial Registry of Evry under number B 414 657
981 ("Sapaca"), represented by Anne-Catherine Block-Derriey, Chairman of the
Board of Directors, duly authorized to execute this agreement;
SAPCAR 97, a societe anonyme organized and existing under the laws
of France, and with its registered office at 23 rue de Paris, 91370 Verrieres le
Buisson, registered with the Commercial Registry of Evry under number B 414 658
344 ("Sapcar"), represented by Caroline Block, Chairman of the Board of
Directors, duly authorized to execute this agreement;
SAPPI 97, a societe anonyme organized and existing under the laws of
France, and with its registered office at 23 rue de Paris, 91370 Verrieres le
Buisson, registered with the Commercial Registry of Evry under number B 414 658
1
<PAGE>
203 ("Sappi"), represented by Pierre Block, Chairman of the Board of Directors,
duly authorized to execute this agreement;
SAPPEF 97, a societe anonyme organized and existing under the laws
of France, and with its registered office at 23 rue de Paris, 91370 Verrieres le
Buisson, registered with the Commercial Registry of Evry under number B 414 658
138 ("Sappef"), represented by Pierre-Francois Block, Chairman of the Board of
Directors, duly authorized to execute this agreement;
Pierre Block, a French citizen residing at 8 rue de la Cote d'Azur,
Strasbourg Meinau, 67100 Strasbourg;
Anne-Catherine Block-Derriey, a French citizen residing at 8 rue de
la Cote d'Azur, 67100 Strasbourg;
Pierre-Francois Block, a French citizen residing at 8 rue Albert
Schweitzer, Blaesheim, 67113 Blaesheim;
Caroline Block, a French citizen residing at 8 rue de la Cote
d'Azur, 67100 Strasbourg, and
Marthe Suzanne Block, a French citizen residing at 8 rue de la Cote
d'Azur, 67100 Strasbourg , represented by Pierre Block, duly authorized to
execute this agreement by means of a power of attorney attached hereto as Annex
9.
(Capiac, Sapaca, Sapcar, Sappi, Sappef, Pierre Block and Marthe
Block, being hereinafter individually referred to as a "Seller" and collectively
referred to as the "Sellers" and Pierre Block, Anne-Catherine Block-Derriey,
Pierre-Francois Block and Caroline Block being hereinafter individually referred
to as a "Seller's Guarantor" and collectively referred to as the "Seller's
Guarantors".)
RECITALS
A. Bioblock Scientific (the "Company") is a societe anonyme organized
and existing under the laws of France, with its registered office at Parc
d'Innovation, Boulevard Sebastien Brant, 67400 Illkirch Graffenstaden, and
registered with the Commercial Registry of Strasbourg under number B 778 834
051. The Company has a registered capital of FF 20,475,000, represented by
2,047,500 shares, with a nominal value of FF 10 per share (the "Shares"). The
Company is listed on the
2
<PAGE>
Second Market (Le Second Marche) and the Shares are also traded on the Stuttgart
Stock Exchange.
B. The Sellers own, in the aggregate, as of this day, 1,469,132
Shares (the "Sellers' Shares"), representing 71.75% of the Shares; and the
Sellers hold, as of this day, in the aggregate, 2,683,893 voting rights in the
Company, representing approximately 82.06% of the total voting rights in the
Company. The remainder of the Shares and the voting rights in the Company are
held by third parties (the "Public Shares"). Set forth on Annex 1 is a list of
the number of Shares owned, and voting rights in the Company held, by each
Seller and by the other shareholders of the Company.
C. The Company owns all of the shares of the Subsidiaries (as such term
is defined in Article 6), except for a limited number of shares of Avantec Sarl
and Bioblock AG Suisse which are owned by the Sellers or by management employees
of those companies and one quota share (part) of SCI Inno 92 which is owned by
Maurice Kittel. Set forth on Annex 2 is a list of the number of shares owned by
the Company in each of the Subsidiaries as well as the name of any other
shareholder in each Subsidiary and the number of shares held by each such
shareholder.
D. Fisher and its various subsidiaries throughout the world are
engaged in businesses which are similar to the lines of business conducted by
the Company and its Subsidiaries, and Fisher and the Buyer therefore attribute
additional value to the Sellers' Shares because of the synergistic benefits
which Fisher and Buyer expect to achieve upon combining the businesses of the
Company and the Subsidiaries with the existing activities of Fisher and its
subsidiaries.
E. The Sellers desire to sell all of the Sellers' Shares to the Buyer,
and the Buyer desires to purchase all of the Sellers' Shares from the Sellers,
all upon the terms and conditions set forth in this Agreement. Fisher owns
substantially all of the shares of capital stock of the Buyer, and Fisher
desires for the Buyer to purchase all of the Sellers' Shares, all upon the terms
and conditions set forth in this Agreement. (All capitalized terms used herein
without definition have the respective meanings indicated in Article 6).
NOW, THEREFORE, in consideration of the mutual covenants,
representations and warranties contained herein, the parties hereto agree as
follows:
3
<PAGE>
ARTICLE I
SALE AND PURCHASE OF THE SELLERS' SHARES
Section 1.1 Sale and Purchase of the Sellers' Shares. (a) Upon the
terms and subject to the conditions set forth in this Agreement, each Seller
shall sell to the Buyer all the interest of such Seller in the Sellers' Shares,
as set forth on Annex 1, and the Buyer shall purchase from the Sellers all the
interest of such Seller in the Sellers' Shares, at the purchase price of FF 415
per Share, equal to an aggregate purchase price of FF 609,689,780 ("Share
Purchase Price"). On the Closing Date, the Buyer shall pay to each Seller the
following amounts in cash, as the payment of the Share Purchase Price for the
Sellers' Shares owned by such Seller:
<TABLE>
<CAPTION>
FF Amount
---------
<S> <C>
For the 492,750 Shares owned by Capiac 204,491,250
For Capiac's remainder interest
(detenues en nue-propriete) in 315,000 Shares 105,525,000
For the 436,216 Shares owned by Pierre Block 181,029,640
For Pierre Block's usufruct (life) interest in 315,000 Shares 25,200,000
For the 49,900 Shares owned by Sapaca 20,708,500
For the 49,900 Shares owned by Sapcar 20,708,500
For the 49,900 Shares owned by Sappef 20,708,500
For the 74,516 Shares owned by Sappi 30,924,140
For the 950 Shares owned by Marthe Block 394,250
-----------
Total for 1,469,132 Sellers' Shares 609,689,780
</TABLE>
(b) In the event the Net Excess Cash as of the Closing Date is less
than FF 136 million, the Share Purchase Price shall be reduced by the amount of
such shortfall and the amounts payable to each of the Sellers on the Closing
Date pursuant to Section 1.1(a) shall be reduced accordingly.
(c) Fisher hereby jointly and severally guarantees the payment by
the Buyer of the Share Purchase Price and the performance by Buyer of all of the
4
<PAGE>
other obligations of Buyer hereunder, in each case subject to the terms and
condi tions set forth in this Agreement.
(d) Each of the Seller's Guarantors hereby jointly and severally
guarantees the performance of all of the obligations of the Seller listed below
adjacent to the name of such Seller's Guarantor, in each case subject to the
terms and conditions set forth in this Agreement.
<TABLE>
<CAPTION>
Seller whose obligations
are guaranteed by such
Seller's Guarantor Seller's Guarantor
- ------------------ ------------------
<S> <C>
Anne-Catherine Block-Derriey Sapaca
Caroline Block Sapcar
Pierre Block Sappi
Pierre-Francois Block Sappef
</TABLE>
(e) Title to the Sellers' Shares purchased by the Buyer pursuant to
this Agreement shall transfer to the Buyer at the Closing, upon payment of the
Share Purchase Price and registration of the Buyer as the owner of the Sellers'
Shares in the shareholder accounts of the Company, all in accordance with
Section 1.2.
Section 1.2 Closing; Conditions Precedent. (a) The closing (the
"Closing") of the sale and purchase of all of the interests of the Sellers in
the Sellers' Shares shall take place at the offices of Debevoise & Plimpton, 21
avenue George V, 75008 Paris, on November 27, 1998 or at such other date or
place as the parties may agree, provided that the date of the Closing may be
extended beyond November 27, 1998 at the sole request of Fisher and the Buyer,
pursuant to the terms of Section 1.2(d) below. At or immediately prior to the
Closing:
(i) The Sellers shall transfer the Sellers' Shares to the Buyer,
free and clear of all Liens, in accordance with the applicable provisions
of French law and the articles of association (statuts) of the Company and
evidence shall be delivered to the Buyer of the registration of the Buyer
as the owner of all the Sellers' Shares in the Company's shareholder
accounts (certificat d'inscription en compte).
(ii) The Buyer shall pay to each Seller the amounts set forth in
Sections 1.1(a) in respect of such Seller (subject to adjustment as contem
plated in Section 1.1(b) above), by wire transfer to such bank accounts as
the
5
<PAGE>
Sellers shall have designated for this purpose by notice to Buyer at least
three (3) business days prior to the Closing Date.
(b) The obligation of the Sellers to consummate the transactions
contemplated by the Closing shall be subject to the fulfillment, or waiver by
the Sellers, on or prior to the Closing Date, of each of the following
conditions:
(i) All representations and warranties of Fisher and the Buyer
contained in this Agreement shall be true and correct in all material
respects at the time when made and also at and as of the Closing Date, as
if made at and as of the Closing Date;
(ii) Fisher and the Buyer shall have performed and complied in all
material respects with all agreements and covenants to be performed and
complied with by Fisher and the Buyer up to and including the Closing Date
pursuant to the terms of this Agreement; and
(iii) Fisher and the Buyer shall have executed and delivered to the
Sellers certificates in the form of Annexes 3A and 3B, dated the Closing
Date, which confirm the accuracy of the representations and warranties of
Fisher and the Buyer as of the Closing Date, and the performance or compli
ance by Fisher and Buyer with all such agreements and covenants to be
performed or complied with on or before the Closing Date.
(c) The obligations of Fisher and the Buyer to consummate the
transactions contemplated by the Closing shall be subject to the fulfillment, or
waiver by Fisher and the Buyer, on or prior to the Closing Date, of each of the
following conditions:
(i) All representations and warranties of Pierre Block contained in
this Agreement shall be true and correct in all material respects at the
time when made and also at and as of the Closing Date, as if made at and
as of the Closing Date;
(ii) The Sellers and Seller's Guarantors shall have performed and
complied in all material respects with all agreements and covenants to be
performed and complied with by the Sellers and Seller's Guarantors up to
and including the Closing Date pursuant to the terms of this Agreement;
6
<PAGE>
(iii) Pierre Block shall have executed and delivered to Fisher and
the Buyer a certificate in the form of Annex 3C, dated the Closing Date,
which confirms the accuracy of the representations and warranties of
Pierre Block as of the Closing Date, and the performance or compliance by
the Sellers and the Seller's Guarantors with all such agreements and
covenants to be performed or complied with on or before the Closing Date;
(iv) The audited consolidated net income (resultat net consolide de
l'exercice certifie par les Commissaires aux Comptes) of the Company and
its Subsidiaries for the fiscal year ending June 30, 1998, shall be equal
to or greater than FF 39.6 million and the auditor of Buyer (Deloitte &
Touche) shall have been given the opportunity to examine the financial
statements of the Company and its Subsidiaries for the fiscal year ending
June 30, 1998 and the opportunity to review those financial statements
with the auditors of the Company and shall not have indicated that, in the
view of Buyer's auditor, the consolidated net income of the Company and
its Subsidiaries for the fiscal year ending June 30, 1998 is less than FF
39.6 million;
(v) As of the Closing Date, the Company and its Subsidiaries shall
have Net Excess Cash in an amount equal to or greater than FF 136 million,
consisting in particular of the short term investment securities indicated
in Schedule 1.2(c)(v), and shall have the free unlimited right to use such
amount of Net Excess Cash; and the Company's auditors shall deliver to the
Buyer a certificate, attesting that, as of the Closing Date, the Company
and its Subsidiaries have Net Excess Cash of not less than such amount,
and that the Company and Subsidiaries have full availability of such
amount of Net Excess Cash;
(vi) The Sellers shall have made available to the Buyer, or Buyer's
legal, accounting and other advisors, for examination, the originals or
true and correct copies of all documents, and shall have provided the
Buyer, or Buyer's legal, accounting and other advisors, all other
information, relating to the business and affairs of the Company and its
Subsidiaries, which the Buyer and its legal, accounting and other advisors
have reasonably requested pursuant to Section 4.4, and no event shall have
occurred, and Fisher and the Buyer shall not have given notice to the
Sellers by no later than the date which is 8 days following the end of the
15 day due diligence period and at the latest by December 2, 1998, of its
discovery of information, which, individually or in the aggregate,
involves or is likely to result in or does result
7
<PAGE>
in (a) any diminution or reduction in the value of the consolidated assets
of the Company and its Subsidiaries as at June 30, 1998 and/or the Closing
Date, or any increase in the consolidated liabilities or obligations of
any nature, including contingent liabilities, of the Company and its
Subsidiaries as at June 30, 1998 and/or the Closing Date, in an amount of
more than FF 7,500,000, and/or (b) any reduction in the consolidated
operating profits or consolidated net after-tax profits of the Company and
its Subsidiaries as at June 30, 1998 and/or the Closing Date, in an amount
of more than FF 3,000,000, and/or (c) a material adverse effect on the
operations, business, condition or prospects of the Company and its
Subsidiaries, including without limitation, as a result of an impact on
their relations with their respective suppliers, customers and/or
employees;
(vii) All directors of the Company and its Subsidiaries, other than
Pierre Block, as well as the other officers named by the board of
directors or the shareholders of the Company and its Subsidiaries who are
named in Annex 4, shall submit or have submitted their resignations, or
shall be or have been duly removed from office, effective as of the
Closing Date;
(viii) The persons named in Annex 5 (or such other persons as the
Buyer shall have designated as replacements therefor) shall be or have
been elected or coopted as directors and/or named as officers of the
Company or its Subsidiaries, in each case as specified in Annex 5,
effective as of the Closing Date;
(ix) The Sellers shall have executed, or caused to be executed, the
following employment agreements: an employment agreement between Pierre
Block and Fisher in the form of Annex 6A; an employment agreement between
Anne-Catherine Block-Derriey and the Company in the form of Annex 6B; and
an employment agreement between Pierre-Francois Block and the Company in
the form of Annex 6C;
(x) Pierre Block and Anne-Catherine Block-Derriey shall have
executed the instruments set forth in Annex 7 in order to transfer to the
Buyer (or such other Person as Fisher shall have designated for this
purpose) all of the ownership interests of the Sellers and their
Affiliates in the trademarks and tradenames used in connection with the
operation of the businesses of the Company and the Subsidiaries, subject
to the right of Fisher and the Buyer not to purchase the Novodirect
trademark;
8
<PAGE>
(xi) Pierre Block shall have executed the instrument set forth in
Annex 8 in order to transfer to the Company (or such other Person as
Fisher shall have designated for this purpose), the quota shares (parts)
representing the 7.66% interest in Avantec Sarl heretofore owned by Pierre
Block;
(xii) Following the filing by Fisher and the Buyer on November 6,
1998, with the German Cartel Office, of the pre-notification with respect
to the indirect acquisition by Fisher of the Company and its Subsidiaries,
either the Cartel Office shall have confirmed that it has no opposition to
such acquisition or the relevant waiting period(s) shall have expired
without an opposition to the acquisition having been issued by the Cartel
Office, or Fisher, the Buyer and the Sellers shall have caused the Company
to implement Fisher's and the Buyer's right to have the shares of
Novodirect GmbH be purchased by a third party in order to permit the
Closing to occur without awaiting the approval (or deemed approval) of the
Cartel Office, pursuant to Section 4.7;
(xiii) The day before the Closing Date, the Sellers shall have
delivered to Fisher and the Buyer the account numbers (and other pertinent
information requested by Fisher and the Buyer) for all bank accounts and
other banking facilities of the Company and the Subsidiaries.
(d) In the event the decision of Fisher and the Buyer based on the
due diligence review results (referenced in Section 1.2(c)(vi)) and/or the
German Cartel Office approval process (referenced in Section 1.2(c)(xii)) have
not been finalized by November 26, 1998, Fisher and the Buyer may elect to
extend the Closing Date by giving written notice that reaches the Sellers on
November 26, 1998, at the latest, and specifying the reasons for this request
for a delay, which reasons must be limited to the response or lack of response
from the German Cartel Office and/or the occurrence of an event or the discovery
of information having or capable of having the effects mentioned above in
Article 1.2(c)(vi). If such notice is given, the Closing shall be organized as a
pre-Closing (the "Pre-Closing") and Closing, to be held on December 2 and 4
respectively.
(i) At the Pre-Closing on December 2, Fisher and the Buyer shall (x)
confirm in writing that all conditions precedent to Closing set forth in
Section 1.2(c) have been satisfied or have been waived in writing and (y)
deposit in escrow with Credit Industriel et Commercial de Paris the full
9
<PAGE>
amount of the Share Purchase Price, with the stipulation that such amount
be released to the Sellers at the Closing on December 4, 1998, provided
that the Sellers have voted against the dividend at the Annual
Shareholders Meeting of the Company to be held on December 3 (or that the
Sellers have obtained an adjournement of the Shareholders Meeting, it
being specified that in the event of an adjournment, the new Shareholders
Meeting must be held on a date sufficiently distant to permit the Buyer to
exercise the voting rights attached to the Shares that it shall have
acquired from the Sellers on December 4, pursuant to Section 1.2(d)(ii)),
and be returned to Fisher and the Buyer on December 4, 1998 if a decision
to distribute a dividend is approved at that Shareholders Meeting.
Following the Pre-Closing, and on this same date, the parties shall notify
the CMF of the transactions envisaged by this Agreement and shall file the
request for a suspension of trading with the CMF.
(ii) On December 4, 1998, the Closing shall occur as contemplated
by Section 1.1, automatically and on the sole condition that the divi dend
distribution has not been approved by the Annual Shareholders Meeting of
the Company called for December 3, 1998 (or that such Shareholders Meeting
has been adjourned as provided in Section 1.2(d)(i) above).
(e) If the Closing has not occurred on December 4, 1998 (the
"Termination Date") at the latest, this Agreement shall automatically terminate
and the parties shall have no further obligations hereunder (except for those
set forth in Article 5 and Sections 7.2, 7.3, 7.6, 7.7, 7.8 and 7.10 of this
Agreement, which shall remain in full force and effect) unless the parties
hereto have agreed in writing to extend the Termination Date beyond December 4,
1998.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Pierre Block on behalf of the Sellers hereby represents and warrants
to the Buyer as follows:
Section 2.1 Corporate and Governmental Authorizations. (a) Each
Seller which is not a physical person is a legal entity duly organized and
validly existing under the laws of France; and each of such Sellers has full
power and authority to carry on its business and operations as presently
conducted; and the
10
<PAGE>
names of the physical persons having the legal authority to act on behalf of
each of such Sellers are set forth on Schedule 2.1(a). Each Seller has full
power and authority to execute this Agreement and each of the other Transaction
Document(s) to which it is party. The sale of all the interests of each Seller
in the Sellers' Shares and the execution and performance of this Agreement have
been duly authorized by all requisite action of each Seller. The execution and
performance of each other Transaction Document to which any Seller is a party
have been duly authorized by all requisite action of such Seller. This Agreement
constitutes the legal, valid and binding obligation of each Seller and each
Seller's Guarantor, enforceable against each such Seller and each such Seller's
Guarantor in accordance with its terms. Each other Transaction Document, when
executed by each Seller and/or Seller's Guaran tor, party thereto, will
constitute the legal, valid and binding obligation of such Seller and/or such
Seller's Guarantor, enforceable against each such Seller and/or Seller's
Guarantor, in accordance with its terms.
(b) No consent or other authorization of, or filing with, any Person
is required by or on behalf of any Seller and/or Seller's Guarantor, the Company
or any Subsidiary in connection with the (i) valid execution or performance of
this Agreement or any other Transaction Document by any Seller and/or Seller's
Guarantor, the Company or any Subsidiary, or (ii) the consummation by the
Sellers, the Seller's Guarantors, the Company or any Subsidiary of the
transactions contemplated by this Agreement or any other Transaction Document
(except as provided in Section 1.2(c)(xii) above).
Section 2.2 Corporate Existence and Authority; Capital Stock. (a)
The Company is a societe anonyme duly organized and validly existing under the
laws of France. The Company has full power and authority to carry on its
businesses and operations, as presently conducted. The Company has full power
and authority to execute each Transaction Document to which it is party, and the
execution and performance of each such Transaction Document have been duly
authorized by all requisite action of the Company (except as provided in Section
1.2(c)(xii) above). Each Transaction Document to which the Company is a party,
when executed by the Company, will constitute the legal, valid, and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(b) The capitalization of the Company consists of 2,047,500 Shares,
with a nominal value of FF 10 per Share. All of the Shares have been duly
authorized and validly issued and are fully paid. Annex 1 sets forth a complete
and correct list of the interests of each Seller in the Sellers' Shares and the
voting rights in
11
<PAGE>
the Company held by each Seller. The Sellers own, and on the date of the Closing
will own, all the Sellers' Shares free and clear of all Liens. Except as set
forth on Schedule 2.2(b), there are no outstanding securities, warrants,
options, agreements or other instruments or rights of any kind that may result
in the sale or issuance by the Company or any Seller of any equity interest in
the Company, and no authorization therefor has been given.
Section 2.3 Subsidiaries. Set forth on Schedule 2.3 is a complete
and correct list of each Subsidiary, the capitalization of each Subsidiary, the
stockholders of each Subsidiary and the number of shares of capital stock (or
other equity securities) of each Subsidiary owned by such stockholders
(including the Company). Each Subsidiary is duly organized and validly existing
under the laws of the jurisdiction of its organization. Each Subsidiary has
full authority to carry on its business and its operations as presently
conducted. All of the shares of capital stock of each Subsidiary have been duly
authorized and validly issued and are fully paid. All of the shares of capital
stock of each Subsidiary set forth on Schedule 2.3 as owned by the Company are
so owned, free and clear of all Liens. Except as set forth on Schedule 2.3,
there are no outstanding securities, warrants, options, agreements or other
instruments or rights of any kind that may result in the sale or issuance by any
Seller, the Company or any Subsidiary of any equity interest in any Subsidiary,
and no authorization therefor has been given.
Section 2.4 Affiliate Companies and Transactions. (a) Set forth on
Schedule 2.4(a) is a complete and correct list of each corporation, partnership
or other legal entity that leases or has other interests in any assets or
properties of the Company or any Subsidiary, or has acquired any asset or
obtained any service from or disposed of any asset or furnished any service to,
or entered into any agreement, commitment or understanding with, the Company or
any Subsidiary since July 1, 1996 and in which any Seller or Affiliate of any
Seller owns, directly or indirectly, any shares or other equity interest
("Affiliate Company"). Also set forth on Schedule 2.4(a) is a complete and
correct description of the ownership by each Seller and each Affiliate of each
Seller in the shares or other equity interest of each Affiliate Company.
(b) Since June 30, 1998, neither the Company nor any Subsidiary has,
directly or indirectly, acquired any asset or obtained any services from, or
disposed of any asset or furnished any service to any Seller or any Affiliate of
any Seller other than the acquisitions and dispositions of assets and the
obtaining and
12
<PAGE>
furnishing of services which have been effected in the framework of the existing
relations set forth on Schedule 2.4(b).
(c) Except as set forth in Schedule 2.4(c), the Sellers and their
Affiliates own no interest in any assets which have been used by the Company or
the Subsidiaries in the conduct of their respective businesses at any time
during the period commencing July 1, 1996 other than assets which presently are
owned by the Company and the Subsidiaries or are to be transferred to the
Company (or such other Person as Fisher may designate) pursuant to this
Agreement and/or the other Transaction Documents.
(d) Except as set forth in Schedule 2.4(d), all dealings between the
Sellers and/or the Affiliate Companies, on the one hand, and the Company and the
Subsidiaries, on the other hand, during the period commencing July 1, 1996, have
been conducted on the basis of the existing relations set forth on Schedule
2.4(b).
Section 2.5 No Conflicts. (a) The execution and performance of this
Agreement and the other Transaction Documents by the Sellers and the Seller's
Guarantors and the Company and the consummation of the transactions contemplated
hereby and thereby will not violate or conflict with (i) any provision of
the articles of association (statuts) or organizational documents of the Company
or any Subsidiary or the decisions of their respective shareholders or
directors, (ii) any law or regulation applicable to the Company or any
Subsidiary, (iii) any decision or order of any court, tribunal or governmental
authority, or (iv) any agreement or instrument to which the Company or any
Subsidiary is a party.
(b) The execution and performance of this Agreement and the other
Transaction Documents by the Sellers and the Seller's Guarantors and the Company
will not result in the creation of any Lien upon any assets of the Company or
any Subsidiary. The actions contemplated by Section 1.2(c)(xii) above will not
be considered a Lien for purposes of the present Article.
Section 2.6 Financial Statements. (a) The audited financial
statements of the Company and of its Subsidiaries (including the consolidated
financial statements of the Company and its Subsidiaries) for the years ended
June 30, 1996, 1997 and 1998, including all annexes and notes thereto, which
have been delivered to the Buyer by the Sellers, are accurate and present fairly
the financial position and the results of operations of the Company and its
Subsidiaries, at the dates and for the periods to which they relate, have been
prepared in accordance with
13
<PAGE>
French GAAP (or German or Swiss GAAP, as the case may be), consistently applied
throughout the periods presented in such financial statements, and reflect all
liabilities and obligations of the Company and its Subsidiaries of any nature
whatsoever, whether accrued or not, required to be recorded thereon or in the
annexes or notes thereto at the respective dates thereof.
(b) Since June 30, 1998, (i) there has been no material change in
the financial situation, the operating results or the business of the Company
and its Subsidiaries compared to the audited financial statements of the Company
and its Subsidiaries as of June 30, 1998, which have been delivered to the Buyer
by the Sellers (the "Financial Statements"), (ii) the Company and its
Subsidiaries have not contracted or incurred any debt, certain or foreseeable,
whether immediately due or not, for which a provision has not been recorded in
the Financial Statements, except current debts which have been incurred in the
normal course of business, in accordance with prior practice, and (iii) the
Company and its Subsidiaries have not acquired, transferred or assigned, in any
manner whatsoever, any securities or other interests, business, real estate
assets or contracts.
Section 2.7 Absence of Undisclosed Liabilities. Neither the Company
nor any Subsidiary has any liability or obligation of any nature, whether
absolute, contingent, accrued or otherwise that could, individually or in the
aggregate, have a Material Adverse Effect, except (i) as set forth in Schedule
2.7, or (ii) as and to the extent reflected in the Financial Statements.
Section 2.8 Absence of Certain Events. (a) Since June 30, 1998, (i)
the Company and each Subsidiary have conducted their businesses and operations
only in the ordinary course and in a manner consistent with past practice, (ii)
to the knowledge of the Sellers and the Seller's Guarantors, no event or
condition has occurred or existed that could, individually or in the aggregate,
have a Material Adverse Effect, and (iii) to the knowledge of the Sellers and
the Seller's Guarantors, no event or condition would reasonably be expected to
occur or exist that could, individually and in the aggregate, have a Material
Adverse Effect.
(b) Since June 30, 1998, the Company and its Subsidiaries have (i)
not paid any dividend (or been the object of a shareholder decision authorizing
the payment of a dividend), advance on dividend, or other distribution on any
capital stock of the Company or any Subsidiary, or purchased or redeemed,
directly and indirectly, any shares of their capital stock (or other equity
interest), except for (x) the shareholders meeting of Avantec Sarl which has
decided to distribute a dividend
14
<PAGE>
of FF 2,550,000 for the year ending June 30, 1998, and (y) the purchase and sale
of Shares on the stock market by the brokerage firm du Bouzet S.A. pursuant to
the market-making agreement (contrat d'animation) between the Company and du
Bouzet S.A., (ii) not incurred or committed to incur any indebtedness for
borrowed money in excess of FF 500,000, nor made or committed to make any
capital investment in excess of FF 500,000 (excluding VAT), for any given
capital investment, either in a single expenditure or a series of related
expenditures, (iii) not incurred, assumed, guaranteed or otherwise become
directly or indirectly liable with respect to any liability or obligation of any
Seller or any Affiliate of any Seller, (iv) not forgiven, canceled, waived or
released any debt, claim or right against any Seller or any Affiliate of any
Seller, except for the termination of the Armenonville 10,(v) not modified,
amended or supplemented any agreement or understanding, or any provision or term
of any agreement or understanding, with any Seller or any Affiliate of any
Seller,(vi) not made any payment, in cash or other assets, to any Sellers or any
of their Affiliates, other than ordinary compensation in their capacity as
officers or employees of the Company and the Subsidiaries, in each case only in
accordance and consistent with past practice, and (vii) have continued to pay
their suppliers and receive payments from their clients in accordance with past
practices.
Section 2.9 Assets. The Company and its Subsidiaries have good
title to, or in the case of leased assets a valid leasehold interest in, all the
assets (real or personal, tangible or intangible, including intellectual
property rights) that are material to the conduct of their businesses and
operations, as presently conducted, including all such assets reflected in the
Financial Statements (other than those disposed of since then in the ordinary
course of business), in each case free and clear of all Liens, except for (a)
the two guarantees granted by the Company, the first to Credit Industriel
d'Alsace et de Lorraine and the second to Banque Populaire de la Region
Economique de Strasbourg , respectively on January 19 and 22, 1998, in
connection with the loans subscribed to on said dates by Inno 92 with said two
banking entities, and (b) the authorization given by the Company to the American
company Cole-Parmer Instrument Company to register the trademark POLYSTAT in the
U.S.A., and Liens that would not, individually and in the aggregate, materially
detract from the value of such assets or materially interfere with the use of
such assets in the conduct of the business and operations of the Company and its
Subsidiaries. The Company and the Subsidiaries have maintained all their
tangible assets in good and normal operating condition, and all such assets are
free and clear from defects in all material respects, ordinary wear and tear
expected.
15
<PAGE>
Section 2.10 Compliance with Laws and Other Instruments. (a) Except
for violations or defaults that could not, either individually or in the aggre-
gate, have a Material Adverse Effect, neither the Company nor any Subsidiary is
in violation of or default under (i) any provision of its articles of
association (statuts) or organizational documents or any decision of its
shareholders or directors, or any provision of any applicable law or regulation
or judicial determination or (ii) any agreement or instrument to which it is a
party.
(b) Except as set forth on Schedule 2.10(b), the Company and its
Subsidiaries have all permits, licenses and other authorizations of governmental
and self-regulatory authorities and have made all filings and notifications that
are required in connection with the conduct of their businesses and operations,
as presently conducted, including all permits, licenses or other authorizations
relating to health and safety matters, environmental protection, pollution
control, sale and distribution of products and employee matters. Except as set
forth on Schedule 2.10(b), the Company and its Subsidiaries are, and at all
times since June 30, 1996 have been, in compliance with the provisions of all
such permits, licenses and other authorizations and all such filings and
notifications, except for such non-compliance that could not, either
individually or in the aggregate, have a Material Adverse Effect.
Section 2.11 Litigation. Except as set forth in Schedule 2.11, there
is no claim, action, proceeding or investigation pending, or (to the knowledge
of the Sellers, the Seller's Guarantors, the Company or any Subsidiary)
threatened, against or involving the Company or any Subsidiary before any court,
arbitral or other tribunal or governmental authority (i) which may seek to
prohibit the consummation of the transactions contemplated by this Agreement or
any other Transaction Document, or (ii) which, if adversely determined, could,
individually or in the aggregate, have a Material Adverse Effect (without regard
to whether the matter in question is covered by insurance or any other
arrangement by or with any other Person). There are no outstanding orders,
judgments, decrees, awards or injunctions which have been issued by any court,
arbitral or other tribunal or governmental authority against the Company, any
Subsidiary or any of their respective assets and which might have an impact on
the activities of the Company or any Subsidiary.
Section 2.12 Real Property. (a) Set forth on Schedule 2.12(a) is a
complete and correct list and description of all real property (including land,
buildings and fixtures) owned by the Company or any Subsidiary. The Company and
its
16
<PAGE>
Subsidiaries have good, valid and marketable title to all such real property, in
each case free and clear of all Liens.
(b) Set forth on Schedule 2.12(b) is a complete and correct list of
all real property leases, subleases and occupancy agreements to which the
Company or any Subsidiary is a party (whether as lessee or lessor) or pursuant
to which the Company or a Subsidiary uses or occupies any real property in
connection with the business and operations of the Company and its Subsidiaries
(the "Leases"); and the Seller has delivered to the Buyer complete and correct
copies of all such Leases. Each Lease to which the Company or a Subsidiary is
party as tenant grants the Company or such Subsidiary, as the case may be, the
exclusive right to use and occupy the premises relating thereto; and the Company
and each Subsidiary enjoys peaceful and undisturbed possession of each of such
premises.
(c) There are no proceedings in eminent domain or other similar
proceedings pending or, to the knowledge of the Sellers and the Seller's
Guarantors, threatened with respect to any real property (or any portion
thereof) owned or leased by the Company or any Subsidiary.
(d) The use and operations of any real property owned or leased by
the Company or any Subsidiary (or any portion thereof) does not violate any
agreement, commitment or understanding (whether written or oral) affecting such
real property. There is no violation of any covenant, condition, restriction or
agreement, or order, judgment or award of any court, tribunal or governmental
authority, that affects the real property owned or leased by the Company or any
Subsidiary. No current use by the Company or a Subsidiary of its owned or leased
real property (or any portion thereof) is dependent on a nonconforming use or
other similar consent or authorization of, or filing with or notice to, a
governmental authority, the absence of which would limit the use of any property
or assets of the Company or any Subsidiary. No damage or destruction has
occurred with respect to any real property owned or leased by the Company or any
Subsidiary (or any portion thereof) that, individually or in the aggregate,
could have or result in a Material Adverse Effect (without regard to whether the
property in question is covered by insurance).
Section 2.13 Environmental Matters. Except as set forth on Schedule
2.13, no condition or circumstance has existed or exists, and neither the
Sellers, any Affiliate of the Sellers, the Company nor any Subsidiary has caused
or taken any action, that (i) to the knowledge of the Sellers and the Seller's
Guarantors,
17
<PAGE>
would result in any liability or obligation on the part of the Company or any of
its Subsidiaries relating to environmental conditions on any real property,
including the air, soil and groundwater conditions at any real property owned or
used by the Company or any of its Subsidiaries, whether currently or in the
past, or (ii) would result in any liability or obligation on the part of the
Company or any of its Subsidiaries relating to the past or present use,
handling, transport, storage or release of pollutants, chemicals or industrial,
toxic or hazardous substances or wastes, except for such liability or obligation
that could not, individually or in the aggregate, have a Material Adverse
Effect.
Section 2.14 Employees; Labor Matters; etc. (a) Except as set forth
on Schedule 2.14(a), during the period commencing June 30, 1995, the Company and
its Subsidiaries have not experienced any collective labor dispute, strike,
slowdown, picketing, work stoppage, concerted refusal to work overtime or
collective resignation, and there is no complaint pending or threatened against
the Company or its Subsidiaries by any of their respective past or present
employees, trade unions or other representative labor bodies, which could have
or result in a Material Adverse Effect.
(b) Schedule 2.14(b) sets forth a true and complete list of all
collective bargaining agreements and other company labor agreements applicable
to the Company and each of its Subsidiaries, respectively (all of such
agreements being hereinafter collectively referred to as the "Collective Labor
Agreements"). True and complete copies of all such Collective Labor Agreements
have been delivered to the Buyer. The Company and its Subsidiaries have
complied, in all respects, with all applicable laws and regulations pertaining
to the employment or termination of employment of their respective past or
present employees, including, without limitation, all such laws and regulations
relating to labor relations, prohibition of discrimination and safety and health
of employees (except as set forth in Schedule 2.14(b)), as well as with the
Collective Labor Agreements, except for any failure so to comply that, both
individually and in the aggregate, could not have or result in a Material
Adverse Effect. The Company and its Subsidiaries have, pursuant to applicable
laws and regulations, and the Collective Labor Agreements, paid in full all
wages, salaries, bonuses, vacation pay and other direct and indirect
compensation earned by, or otherwise due and payable to, all current and former
employees and managers of the Company and its Subsidiaries.
(c) The Company and the Subsidiaries have complied with all
requirements pursuant to applicable laws and regulations, and the Collective
Labor
18
<PAGE>
Agreements, with respect to employee representation, including those provisions
relating to the organization of elections for a workers' council (comite
d'entreprise) and the election of employee representatives (delegues du
personnel). To the extent that there is no workers' council and/or no employee
representative due to the absence of candidates, the Company and its
Subsidiaries have full documentation of such absence of candidates (constat de
carence) and these have been filed in compliance with applicable labor laws and
regulations.
(d) Except as set forth on Schedule 2.14(d), no employment agreement
in effect with the Company or a Subsidiary contains provisions regarding
employment compensation, advance notice of departure or departure payments in
excess of those required by the relevant laws and regulations and the Collective
Labor Agreements. Except the plans provided for by applicable laws and regula-
tions, or the Collective Labor Agreements, the Company and its Subsidiaries do
not maintain any other pension schemes or profit-sharing plans, or any other
employee benefit plans, and are not required to contribute to any such plans.
Except as set forth on Schedule 2.14(d), there exists, as of the date hereof, no
obligation with respect to current and former managers (mandataires sociaux) of
the Company and its Subsidiaries;
Section 2.15 Taxes and Social Charges. (a) Except as set forth on
Schedule 2.15, the Company and its Subsidiaries have duly and timely filed all
returns relating to Taxes and Social Charges required to be filed by the Company
and its Subsidiaries and all such returns were correct and complete in all
material respects. The Company and its Subsidiaries have duly and timely paid
all Taxes and Social Charges that are due and payable by the Company and its
Subsidiaries and have duly accrued all Taxes and Social Charges which are not
yet payable.
(b) The Company and its Subsidiaries have duly and timely withheld
all Taxes and Social Charges required to be withheld from employees in
connection with their businesses and operations; and such withheld Taxes and
Social Charges have been either duly and timely paid to the proper governmental
authorities or properly set aside in their accounts for such purpose.
(c) Set forth on Schedule 2.15(c) are (i) copies of any assessments
and other audit related documents resulting from each most recent Tax audit and
most recent Social Charges audit for the Company and each Subsidiary, and (ii)
copies of the documents which reflect the resolution of such assessments,
including
19
<PAGE>
the pleadings filed by the parties in any administrative or legal appeals
concerning such assessments.
Section 2.16 Intellectual Property. Set forth on Schedule 2.16 is a
list of all trademarks and tradenames used in connection with the conduct of the
businesses of the Company and each Subsidiary. Except as otherwise indicated on
Schedule 2.16, all of such trademarks and tradenames are owned by the Company or
by the Subsidiaries. Except as set forth in Schedule 2.16, the conduct of the
businesses of the Company and the Subsidiaries does not require the ownership
of, or usage rights for, any trademarks, tradenames, patents or copyrights
(including software rights) other than the trademarks, tradenames, patents and
copyrights (including software rights) which are owned by the Company and the
Subsidiaries or are being transferred to the Company and the Subsidiaries
pursuant to this Agreement and/or the Transaction Documents. To the knowledge
of the Sellers and the Seller's Guarantors, there has been no (i) notice, claim
or other indication that the rights of the Company or any Subsidiary in the
trademarks, tradenames and software (including software developed by the Company
or its Subsidiaries) used by the Company and the Subsidiaries in the conduct of
their businesses and operations are not valid or enforceable, (ii) notice, claim
or other indication that any other party would be entitled to any additional
fees or compensation in respect of such trademarks, tradenames or software as a
result of the consummation of the transactions contemplated by this Agreement or
upon the use by Affiliates of Fisher of such trademarks, tradenames or software
after the consummation of the transactions contemplated by this Agreement, or
(iii) infringement upon or conflict with any intellectual or industrial property
owned or used by any Person by the Company and the Subsidiaries. Neither the
Sellers, nor the Sellers' Guarantors are aware of any infringement by any Person
of any trademarks, tradenames or software (including software developed by the
Company or its Subsidiaries) used by the Company and the Subsidiaries.
Section 2.17 Material Contracts. (a) Set forth on Schedule 2.17 is a
complete and correct list or description of all written agreements, commitments
and understandings to which the Company or any Subsidiary is a party or to which
any of their assets are bound which constitute (i) contracts (other than
purchase or sales orders in the ordinary course of business, consistent with
past practice, of an annual amount of less than FF 2.5 million excluding VAT
during the calendar year 1997 and, for 1998, up to October 30 of that
year)relating to the purchase or sale of goods or services, involving the
payment of FF 1,000,000; (ii) any agreements in the nature of a joint venture
agreement or partnership agreement; (iii) any agreements involving
20
<PAGE>
a confidentiality or non-competition obligation on the part of the Company or
any of its Subsidiaries or providing for any exclusive rights granted to or by
the Company or any Subsidiary; (iv) any agreements involving indebtedness for
borrowed money, including bank overdrafts; (v) any financial or operating leases
of real property, and any financial or operating leases of personal property
involving payments over their term of FF 1 million or more; (vi) any guarantees,
comfort letters or similar obligations for the payment or performance by
another party of its obligations; and (vii) any other agreements not otherwise
disclosed in the Schedules to this Agreement which relate to transactions which
by their nature, by the amounts in question or by their duration, must be
considered as agreements entered into other than in the day to day management of
the Company or the Subsidiary which is party thereto, consistent with past
practice (collectively, the "Material Contracts"). All Material Contracts are in
full force and effect in all material respects and there does not exist any
material default or event or condition that, after notice or lapse of time or
both, would constitute a default thereunder by the Company or any Subsidiary or,
to the knowledge of the Sellers and the Seller's Guarantors, by any other party
thereto. True and complete copies of all Material Contracts have been delivered
to Fisher and the Buyer or will be made available to their advisors during the
15 day due diligence investigation period.
(b) To the knowledge of the Sellers and the Seller's Guarantors,
none of the rights of the Company or any Subsidiary under any Material Contract
will be subject to termination or modification as a result of the transactions
contemplated by this Agreement or any other Transaction Document, and no other
party to any Material Contract would be entitled to any additional fees or
payments as a result of the consummation of the transactions contemplated by
this Agreement or any other Transaction Document.
Section 2.18 Product Liability. To the knowledge of the Sellers and
the Seller's Guarantors, neither the Company nor any Subsidiary has any
obligation of any nature (whether based on strict liability, negligence, breach
of warranty, breach of contract or otherwise) in respect of any product sold,
packaged, repackaged or labeled by the Company or any Subsidiary that (i) is not
fully and adequately covered by insurance policies, except for any thresholds
(franchises) in such policies which do not exceed those customary in the
business, and (ii) is not otherwise fully and adequately reserved against in
accordance with French GAAP (or German or Swiss GAAP, as the case may be),
applied on a basis consistent with their most recent financial statements.
21
<PAGE>
Section 2.19 Bank Accounts. Set forth on Schedule 2.19 is a complete
and correct list of each bank or other financial institution in which a line of
credit, checking or other account or safe deposit box is maintained by or for
the Company or any Subsidiary, a description of the nature of the financial
services provided to the Company or a Subsidiary by such financial institutions
and the name of each Person authorized to draw upon the accounts or have access
to the safe deposit boxes at such financial institutions.
Section 2.20 Brokers. No investment banker, finder, broker or other
intermediary has been retained by or has acted for or on behalf of the Sellers,
any Affiliate of the Sellers, the Company or any of its Subsidiaries who might
be entitled to any fee or commission from the Company or any Subsidiary upon the
consummation of the transactions contemplated by this Agreement or any other
Transaction Document.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FISHER AND THE BUYER
Fisher and the Buyer, jointly and severally, represent and warrant
to the Sellers as follows:
Section 3.1 Corporate Existence; Authorizations. (a) Fisher is a
corporation duly organized and validly existing under the laws of Delaware.
Fisher has full power and authority to execute this Agreement and each other
Transaction Document to which it is party, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby. The execution and performance of this Agreement and each other
Transaction Document to which Fisher is party and the consummation by Fisher of
its obligations hereunder and thereunder have been duly authorized by all
requisite action of Fisher. This Agreement constitutes the legal, valid and
binding obligation of Fisher, enforceable against Fisher in accordance with its
terms. Each other Transaction Document to which Fisher is party, when executed
by Fisher, will constitute the legal, valid and binding obligation of Fisher,
enforceable against Fisher in accordance with its terms.
(b) The Buyer is a societe anonyme duly organized and validly
existing under the laws of France, and substantially all of the shares of its
capital stock are owned, directly or indirectly, by Fisher. The Buyer has full
power and authority to execute this Agreement and each other Transaction
Document to which
22
<PAGE>
it is party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The purchase of the
Sellers' Shares, the execution and performance of this Agreement and each other
Transaction Document to which the Buyer is party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action of the Buyer. This Agreement constitutes the legal, valid and
binding obligation of the Buyer, enforceable against the Buyer in accordance
with its terms. Each other Transaction Document to which the Buyer is party,
when executed by the Buyer, will constitute the legal, valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms.
(c) Except as set forth on Schedule 3.1(c), no consent or other
authorization of, or filing with, any Person is required by or on behalf of
Fisher or the Buyer in connection with (i) the valid execution or performance of
this Agreement or any other Transaction Document by Fisher and the Buyer or
(ii) the consummation by Fisher and the Buyer of the transactions contemplated
by this Agreement or any other Transaction Document.
Section 3.2 No Conflicts. Except as set forth on Schedule 3.2, the
execution and performance of this Agreement and the other Transaction Documents
by Fisher and the Buyer and the consummation by Fisher and the Buyer of the
transactions contemplated hereby and thereby will not violate or conflict with
(i) any provision of the certificate of incorporation, articles of association
(statuts), by-laws or other organizational documents of Fisher or the Buyer,
(ii) any law or regulation applicable to Fisher or the Buyer, (iii) any decision
of any court, tribunal or governmental authority, or (iv) any agreement or
instrument to which Fisher or the Buyer is a party.
Section 3.3 Brokers. No investment banker, finder, broker or other
intermediary has been retained by or has acted for or on behalf of Fisher or the
Buyer or any of their Affiliates who might be entitled to any fee or commission
from the Sellers or any of their Affiliates upon the consummation of the
transactions contemplated by this Agreement or any other Transaction Document.
23
<PAGE>
ARTICLE IV
COVENANTS
Section 4.1 Conduct of the Business. From the date hereof to the
Closing Date, the Sellers and the Seller's Guarantors shall cause the Company
and its Subsidiaries to conduct their business and operations only in the
ordinary course of business and in a manner consistent with past practice.
Without limiting the generality of the foregoing, from the date hereof to the
Closing Date, except as otherwise expressly consented to by Fisher or the Buyer,
the Sellers and the Seller's Guarantors shall cause the Company and its
Subsidiaries:
(a) not to pay (or be the object of a shareholder decision to pay)
any dividend, advance on dividend, or other distribution on any capital stock of
the Company or any Subsidiary, or purchase or redeem, directly and indirectly,
any shares of their capital stock (or other equity interest), except that (i)
the shareholders of Avantec Sarl may decide to distribute and Avantec Sarl may
distribute a dividend in a total amount of up to FF 2,550,000; (ii) the stock
brokerage firm Entreprise d'Investissements Du Bouzet S.A. may continue to
acquire or sell Shares for the account of the Company, as contemplated by the
market-making agreement (Contrat d'Animation) between such firm and the Company,
and (iii) the Company may distribute a dividend of up to FF 12 per share in the
circumstances contemplated by Section 1.2(e) above,
(b) not to incur or commit to incur any indebtedness for borrowed
money in excess of an aggregate amount of FF 500,000, and not to make or commit
to any capital investment in excess of FF 500,000 (excluding VAT), either in a
single transaction or a series of transactions relating to a given capital
investment,
(c) not to incur, assume, guaranty or otherwise become directly or
indirectly liable with respect to any liability or obligation of any Seller or
any Affiliate of any Seller,
(d) not to conclude any new agreement or understanding with any
Seller or any Affiliate of any Seller,
(e) not to forgive, cancel, waive or release any debt, claim or
right against any Seller or any Affiliate of any Seller,
24
<PAGE>
(f) not to modify, amend or supplement any agreement or
understanding, or any provision or term of any agreement or understanding, with
any Seller or any Affiliate of any Seller,
(g) not to make any payment, in cash or other assets, to any Sellers
or any of their Affiliates, other than ordinary compensation in their capacity
as officers or employees of the Company and the Subsidiaries, in each case only
in accordance and consistent with past practice,
(h) to continue to pay their suppliers and receive payments from
their clients in accordance with past practices,
(i) not to enter into any agreement which would constitute a
Material Contract.
The Sellers and Seller's Guarantors shall promptly advise Fisher and
the Buyer of any event, occurrence or condition that, individually or in the
aggregate, could have a Material Adverse Effect or that could result in a
failure to comply with any of the provisions of clauses (a) through (i) of this
Section 4.1.
Section 4.2 Public Announcements and Confidentiality. (a) The
Sellers and Seller's Guarantors and Fisher and the Buyer shall cooperate and
consult with each other before issuing any press release or otherwise making any
public statement with respect to this Agreement or the other Transaction
Documents or the transactions contemplated hereby or thereby. Without limiting
the foregoing sentence, without the prior consent of the other party, neither
the Sellers or the Seller's Guarantors nor Fisher or the Buyer shall, and the
Sellers and Seller's Guarantors shall cause the Company not to, issue any press
release or otherwise make any public statement with respect to the transactions
contemplated by this Agreement and the other Transaction Documents, or disclose
the existence of this Agreement or the other Transaction Documents or the
contents hereof or thereof, except as required by applicable laws and
regulations, in which case the party required to disclose shall promptly notify
the other party and the parties shall cooperate and consult with each other to
the maximum extent possible.
(b) The Sellers and Seller's Guarantors shall not, and shall cause
their Affiliates not to, use or disclose to any Person any proprietary or
confidential information relating to the Company or any Subsidiary, their
business and operations, or any of their assets, except with the prior consent
of Fisher or the Buyer or as
25
<PAGE>
required by applicable laws or regulations, in which case such Person shall
provide Fisher and the Buyer prompt notice of such requirement.
(c) It is understood and agreed that the parties hereto remain bound
by the Confidentiality Agreement dated as of September 10, 1996, provided,
however, that Fisher and the Buyer may disclose such information concerning the
transactions contemplated by this Agreement and the other Transaction Documents
as may be necessary or useful in connection with obtaining the financing for the
transactions contemplated hereby.
Section 4.3 Non-Competition. Prior to the third anniversary of the
Closing Date, none of the Sellers and none of the Seller's Guarantors shall,
directly or indirectly, own, manage, operate, join, control, participate or have
any interest in or be connected with, as a partner, shareholder, director,
officer, employee, advisor or consultant, any Person that is conducting an
activity of distribution, marketing or sale of laboratory supplies, chemicals or
instruments or any other categories of products presently marketed by the
Company or its Subsidiaries, or the after sales service of laboratory
instruments, anywhere in the territory consisting of France, Germany and
Switzerland; except that, with respect to Pierre-Francois Block and
Anne-Catherine Block-Derriey, the non-competition agreement of this Article 4.3
is limited solely to the French territory; provided that this Section 4.3 shall
not prohibit (i) the Sellers or the Seller's Guarantors from owning, solely as
an investment, securities of a publicly-traded company so long as no Sellers or
Seller's Guarantor individually owns or controls more than 2% of the voting
stock of such company and (ii) Pierre Block from carrying out the functions
listed on Schedule 4.3.
Section 4.4 Due Diligence Investigations; Information. From the date
hereof to the Closing Date, the Sellers and Seller's Guarantors shall (i) make
available to Fisher, the Buyer, and their legal, accounting and other advisors
which shall have signed in advance a confidentiality undertaking containing
reasonable terms and conditions, all the financial, legal, and operating data
and other documents and information with respect to (a) the business, operations
and properties of the Company and its Subsidiaries as well as (b) the business
relations existing between, on the one hand, the Company and each of the
Subsidiaries and, on the other hand, the Affiliate Companies, as Fisher, the
Buyer and their legal, accounting and other advisors shall from time to time
reasonably request in advance for the purpose of having full and accurate
knowledge of the business, legal and financial situation of the Company and its
Subsidiaries as well as the business relations existing between, on the one
hand, the Company and each of the Subsidiaries and, on the other hand,
26
<PAGE>
the Affiliate Companies, except that the documents and information that may be
requested with respect to the study of the business relations existing between,
on the one hand, the Company and each of the Subsidiaries and, on the other
hand, the Affiliate Companies, may not include the corporate books and financial
accounts of the Affiliate Companies, (ii) instruct the legal and accounting
advisors of the Company and its Subsidiaries and the Affiliate Companies
(including without limitation Maurice Kittel, the Chief Financial Officer of the
Company), to cooperate with Fisher, the Buyer and their legal, accounting and
other advisors, in connection with their investigations of the Company and its
Subsidiaries as well as the business relations existing between, on the one
hand, the Company and each of the Subsidiaries and, on the other hand, the
Affiliate Companies, and (iii) keep Fisher, the Buyer and their legal,
accounting and other advisors, generally informed as to the business and
operations of the Company and its Subsidiaries as well as the state of the
business relations existing between, on the one hand, the Company and each of
the Subsidiaries and, on the other hand, the Affiliate Companies. Any
investigation conducted by Fisher, the Buyer and their legal, accounting and
other advisors pursuant to this Section 4.4 shall be conducted in such manner as
not to interfere unreasonably with the conduct of the business and operations of
the Company and its Subsidiaries and the Affiliate Companies. In principle, all
such investigations shall be conducted outside the premises of the Company and
the Subsidiaries, provided that environmental and/or other consultants selected
by Fisher will be allowed to visit the premises of the Company and/or
Subsidiaries to the extent necessary to conduct their investigations, provided
that when they are within such premises they shall identify themselves as
consultants of the Company. The legal, financial, accounting and tax
investigations will be conducted at one or more off-site data rooms, it being
understood that the two individuals (other than Pierre Block) having the
greatest knowledge of the legal, tax, accounting and administrative aspects of
the Company and its Subsidiaries and the Affiliate Companies will be made
available to respond to the questions of the advisors of Fisher and the Buyer as
follows: (i) Mr. Kittel, the Chief Financial Office of the Company shall be
available for essentially all of his working time for a fifteen day period and
will have available a lap-top computer through which he will have remote access
to the information system of the Company, and will thus permit the advisors of
Fisher and the Buyer to have access to all the accounting and financial records
of the Company and the Subsidiaries as well as the business relations existing
between, on the one hand, the Company and each of the Subsidiaries and the
Affiliate Companies, on the other hand; and (ii) Mr. Monot, the statutory
auditor of the Company, will be available approximately half of his working time
during such fifteen day period. Pierre Block will make himself available for
meetings with executives of Fisher to discuss the business and prospects
27
<PAGE>
of the Company and its Subsidiaries and the Affiliate Companies, it being under-
stood that such meetings should in principle be limited to two and should not
occupy Mr. Block for the entire working day. No copies of documents will be
provided outside the due diligence review of the Company; and in the event the
Closing does not occur, all documents including the Schedules to this Agreement
which have been communicated to Fisher and the Buyer and their advisors shall be
destroyed.
Section 4.5 Further Actions and Assurances. (a) Each of the parties
shall use its best efforts and shall cooperate with each other to take or cause
to be taken all actions necessary or desirable to consummate the transactions
contemplated by this Agreement and the other Transaction Documents, including
the satisfaction by the Sellers and the Seller's Guarantors of all the
conditions contained in Section 1.2(c) and the satisfaction by Fisher and the
Buyer of all conditions contained in Section 1.2(b).
(b) From time to time after the Closing, the Sellers and the
Seller's Guarantors, and Fisher and the Buyer shall, each at its own expense,
execute and deliver, or cause to be executed and delivered, such additional
documents and instruments, or take such other actions, as may be reasonably
requested by the other party to render effective the consummation of the
transactions contemplated by this Agreement and the other Transaction Documents
or otherwise to carry out the intent and purposes of this Agreement and the
other Transaction Documents.
Section 4.6 Tender Offer; Other Stock Exchange Transactions. (a)
Following the Closing or Pre-Closing, as applicable, of the transaction
contemplated by this Agreement, the Buyer shall file with the CMF a request to
be authorized to carry out a tender offer (offre publique d'achat - "tender
offer") by implementing the procedure for maintaining an offer to purchase the
Public Shares at the same price as the price paid for Seller's Shares hereunder
(or such lower price as may has been agreed with the CMF) (garantie de cours),
pursuant to Section 5-3-5 of the Reglement General of the CBV (the "Tender
Offer").
(b) Pierre Block shall use his best efforts to assist Fisher and the
Buyer in their efforts to acquire more than 95% of the outstanding shares and
voting rights of the Company by way of the Tender Offer.
Section 4.7 Divestiture of Novodirect GmbH. If Fisher and the Buyer
believe that the Closing might need to be delayed as a result of the time needed
to obtain the approval (or deemed approval) of the German Cartel Office and
28
<PAGE>
wish to have the Company divest Novodirect GmbH so as to permit the Closing to
occur without such delay, Fisher and the Buyer may so notify the Sellers and
Seller's Guarantors, in which case the Sellers and Seller's Guarantors shall
cause the Company to sell, as soon as possible, all of the shares of Novodirect
GmbH to such party or parties as Fisher and the Buyer shall designate for this
purpose and to effect such sale for such price as shall have been approved by
the independent expert retained for the requirements of the Tender Offer.
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification by Pierre Block. Pierre Block shall
xindemnify and hold harmless the Buyer from and against any and all claims, in-
creases in liabilities (augmentations de passifs) reductions in assets
(diminutions d'actifs), losses, damages, costs and expenses (including interest,
penalties and reasonable attorneys' and accountants' fees and disbursements)
with respect to the Company or any of its Subsidiaries (or any of their
successor entities), whether or not resulting from third party claims (each of
the foregoing being referred to herein individually as a "Loss", and
collectively as "Losses"), arising out of or as a result of (i) any inaccuracy
of or omission in any representation or warranty made by Pierre Block in this
Agreement or any other Transaction Document, (ii) any breach by any of the
Sellers or their Affiliates of any covenant or obligation of the Sellers in this
Agreement or any other Transaction Document and/or (iii) Losses experienced by
the Company or its Subsidiaries as a result of claims asserted by any
shareholders of the Company other than the Sellers, arising out of or related to
an event which occurred or circumstances which existed on or before the Closing
Date.
Section 5.2 Indemnification by Fisher and the Buyer. Fisher and the
Buyer shall, jointly and severally, indemnify and hold harmless the Sellers from
and against any and all claims, increases in liabilities, reductions in assets,
losses, damages, costs and expenses (including interest, penalties and
reasonable attorneys' and accountants' fees and disbursements) arising out of or
as a result of (i) any inaccuracy of or omission in any representation or
warranty made by Fisher or the Buyer in this Agreement or any other Transaction
Document, or (ii) any breach by Fisher or the Buyer of any covenant or
obligation of Fisher or the Buyer in this Agreement or any other Transaction
Document.
29
<PAGE>
Section 5.3 Survival of Representations and Warranties. Any and all
claims for indemnification arising out of or as a result of any inaccuracy of
any representation or warranty contained in this Agreement may be made until
December 31, 2001, provided that claims relating to the obligations of the
Company and/or the Subsidiaries with respect to Taxes and Social Charges shall
only expire on March 31, 2002, provided that the period for making claims
relating to Taxes and Social Charges shall not expire on that date if the
Sellers or Sellers' Guarantors had knowledge of the possibility of such a claim
and omitted to notify Fisher and the Buyer of such fact.
Section 5.4 De Minimus; Limitations; Mitigation; Assignment; Access
to Information. (a) Pierre Block shall not be obligated to indemnify and hold
harmless the Buyer pursuant to Section 5.1 unless and until the aggregate amount
of all claims against Pierre Block under Section 5.1 exceeds FF 7,500,000, and
then only to the extent such aggregate amount exceeds FF 7,500,000.
(b) The aggregate amount which Pierre Block shall be obligated to
indemnify and hold harmless the Buyer pursuant to clause (i) of Section 5.1
shall not exceed thirty five percent (35%) of the aggregate of the Share
Purchase Price paid to all of the Sellers.
(c) The obligation of Pierre Block to indemnify and hold harmless
the Buyer pursuant to clause (i) of Section 5.1 with respect to any Loss will be
limited to 71.75% of such Loss.
(d) Any party entitled to indemnification under this Article 5 shall
use commercially reasonable efforts to mitigate any liability, loss, damage,
cost and expense for which indemnification is sought hereunder.
(e) All indemnification payments made by Pierre Block pursuant
hereto shall be treated by both parties, except as otherwise required by law, as
a reduction in the purchase price paid by the Buyer for the Sellers' Shares.
(f) The Buyer shall provide to Pierre Block and to the legal and
accounting advisors of Pierre Block (including Maurice Kittel and Claude Monot)
and the Seller's Guarantors access to the books and records of the Company and
its Subsidiaries, during normal business hours and so long as it does not
unreasonably interfere with the business and operations of the Company and its
Subsidiaries, in connection with the matters for which any payment is sought
under Section 5.1;
30
<PAGE>
provided that, Pierre Block and such advisors shall utilize the information so
obtained only for the purpose of evaluating the claim and, where applicable,
preparing the defense against a claim asserted by a third party and shall not
use any of such information for any other purpose or divulge any such
information to any other party without the prior written agreement of Fisher and
the Buyer.
Section 5.5 Calculation of Amount of Loss; Adjustments. (a) The
amount of any indemnity payment by Pierre Block under Section 5.1 shall be
limited to the amount of the actual Loss sustained by the Buyer, as adjusted
pursuant to this Section 5.5, and subject to the provisions of clause (c) of
Section 5.4.
(i) The amount of the Loss to be taken into account when deter-
mining the payment due by Pierre Block pursuant to Section 5.1 shall be
reduced (but not below zero) by an amount equal to the Tax benefits
(economies d'impots), if any, attributable to the Loss giving rise to such
payment, but only to the extent such Tax benefits (economies d'impots)
have actually been realized by the Company or the Subsidiary which
experienced such Loss (or the tax-consolidated group of which they form a
part) or are certain to be realized, taking into account the expected
positive after tax income of the relevant entity (or tax-consolidated
group of which it is a part) for the tax year in question and the
availability of such Loss as a tax deductible expense for such year. The
timing of any indemnity payment due from Pierre Block to the Buyer under
this Article 5 shall not be affected by the possible realization of any
Tax benefits; Pierre Block shall, within the timeframe provided in Section
5.6 below, pay indemnity payments pursuant to this Article 5, and if and
when the Company or a Subsidiary (or a consolidated tax group of which
they are part) subsequently realizes a Tax benefit (economie d'impots),
attributable to Losses in respect of which indemnity payments had been
made without a deduction for such Tax benefit, the Buyer shall pay to
Pierre Block the net amount of such Tax benefit (economie d'impots).
(ii) Pierre Block shall not be required to make any indemnity
payment to the Buyer under this Article 5 with respect to any loss which
is covered by any insurance policy of the Company or any Subsidiary or any
indemnification obligation of another Person to the Company or any Subsid-
iary until the Company or Subsidiary has made a claim for payment under
such insurance policy or indemnification obligation and (x) such claim has
been the object of a written refusal by the insurer (or other indemnifying
31
<PAGE>
party) which the Company or Subsidiary and Pierre Block, after receiving
sufficient advance notice thereof, have decided not to contest or (y) the
courts have determined that no recovery is available under such insurance
(or other indemnification obligation).
(b) The amount of any indemnity payment under Section 5.2 shall be
limited to the amount of the actual liability, loss, damage, costs and expenses
sustained by the Sellers.
Section 5.6 Indemnification Procedures. (a) For the purposes of this
Section 5.6, the party seeking indemnification shall be known as the "Indemni-
fied Party", and the party from whom indemnification is sought shall be known as
the "Indemnifying Party". If and when an Indemnified Party becomes aware of a
Loss for which he expects the Indemnifying Party to be liable under this Article
5, such Indemnified Party shall immediately give notice thereof (the
"Indemnification Notice") to the Indemnifying Party. The Indemnification Notice
shall state the reason for the indemnification claim and the amount or estimate
of the amount that may be due under this Article 5, and shall provide relevant
documentary evidence regarding such claim and the proposed indemnification
amount. The failure of any Indemnified Party to give such notice or a delay in
giving such notice shall not relieve the Indemnifying Party of its
indemnification obligations under this Article 5, except to the extent such
failure or delay results in a lack of actual notice to the Indemnifying Party
and the Indemnifying Party is prejudiced as a result of the failure to receive
such notice or the delay in receipt of such notice. Within 30 days of receipt of
an Indemnification Notice in accordance with this Section 5.6, the Indemnifying
Party shall pay the Indemnified Party the amount specified in such
Indemnification Notice, unless the Indemnifying Party delivers a notice of
disagreement with the relevant indemnification claim within 15 days of its
receipt of such Indemnification Notice.
(b) In the case of any claim asserted by a third party, the Indemni-
fied Party shall (i) promptly deliver the Indemnification Notice to the
Indemnifying Party, it being understood that Pierre Block shall be deemed to
have received promptly from Fisher and the Buyer an Indemnification Notice in
respect of any claim which is asserted by a third party at a time Pierre Block
holds the position of President Directeur General of the Company (and, to the
extent such third party claim is asserted against a Subsidiary, has management
responsibility for the supervision of such Subsidiary), and (ii) permit the
Indemnifying Party, at its option and expense, to take over and assume the
defense of any such claim by counsel
32
<PAGE>
satisfactory to the Indemnified Party (it being that the law firms Schmidt &
Bastien Reheis and Debevoise & Plimpton are considered satisfactory for these
purposes) and to settle or otherwise dispose of the same; provided that the
Indemnified Party may at its discretion at all times participate, at its own
expense, in such defense by counsel of its own choice. The Indemnifying Party
shall not, in defense of any such claim, except with the prior written consent
of the Indemnified Party, enter into any settlement that does not include, as an
unconditional term thereof, the giving by the claimant or plaintiff in question
to the Indemnified Party and its Affiliates a release of all liabilities in
respect of such claims.
(c) If the Indemnifying Party does not elect to assume the defense
of any claim within 30 days of delivery of the Indemnification Notice, the
Indemnified Party shall have the right to take over and assume the defense of
any such claim. If the Indemnifying Party thus omits to assume the defense of a
claim, the Indemnified Party shall be entitled to settle or agree to pay in
full any such claim; provided that (i) the Indemnified Party shall not settle
such claims without the prior written consent of the Indemnifying Party,
provided that such consent cannot be unreasonably withheld and (ii) the
Indemnified Party shall, at all times and to the maximum extent possible, keep
the Indemnifying Party informed of the status of such claim and the proceedings
related thereto.
ARTICLE VI
DEFINITIONS
Section 6.1 Certain Defined Terms. The following terms, as used in
this Agreement, have the following meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person. Control of any Person shall be deemed to exist upon the ownership
of securities entitling the holder thereof to exercise more than 50% of the
voting power in the election of directors of such Person (or other persons
performing similar functions). Prior to the Closing, each Seller shall
constitute an Affiliate of the Company (and of each Subsidiary) and the Company
shall constitute an Affiliate of each Seller (and of each Subsidiary). Each
Seller shall constitute an Affiliate of each other Seller, and in the event the
Sellers and their Affiliates jointly (but not individually) control a Person,
each Seller shall constitute an Affiliate of such Person.
33
<PAGE>
"CBV" means the Conseil des Bourses de Valeurs
"CMF" means the Conseil des Marches Financiers.
"Closing Date" means the date of the Closing in accordance with
Section 1.2.
"COB" means the Commission des Operations de Bourse.
"FF" means the lawful currency of France.
"French GAAP", "German GAAP" and "Swiss GAAP" means the accounting
principles and practices generally accepted from time to time in France, Germany
and Switzerland, respectively.
"Lien" means any mortgage, lien, pledge, charge, security interest,
encumbrance or other adverse claim.
"Material Adverse Effect" means any event or circumstance which,
individually or in the aggregate, involves or is likely to result in or does
result in (i) any diminution or reduction in the value of the consolidated
assets of the Company and its Subsidiaries as at June 30, 1998 and/or the
Closing Date, or any increase in the consolidated liabilities or obligations of
any nature, including contingent liabilities, of the Company and its
Subsidiaries as at June 30, 1998 and/or the Closing Date, in an amount of more
than FF 7,500,000, and/or (ii) any reduction in the consolidated operating
profits or consolidated net after-tax profits of the Company and its
Subsidiaries as at June 30, 1998 and/or the Closing Date, in an amount of more
than FF 3,000,000.
"Net Excess Cash" means, on a consolidated basis among the Company
and its Subsidiaries, the (a) aggregate amount of (i) cash (disponibilites) (ii)
short term investment securities (valeurs mobilieres de placement), excluding
any shares of the Company which are owned by the Company, which short term
investment securities shall be valued for these purposes at their market value
as of the Closing Date, and (iii) the shares of the Company which are owned by
the Company, but only to the extent the total number of outstanding shares of
the Company (including the shares owned by the Company) do not exceed a total of
2,047,500 shares, which shares of the Company shall be valued for these purposes
at the historical cost price thereof as paid by the Company, less (b) the
aggregate amount of
34
<PAGE>
(i) convertible bond debentures and other loan debentures (emprunts obligataires
convertibles et autres emprunts obligataires), (ii) bank borrowings (emprunts et
dettes aupres des etablissements de credit), including short-term borrowings
(concours bancaires courants et soldes crediteurs de banque) and (iii) other
long-term liabilities (emprunts et dettes financieres diverses).
"Person" means an individual, corporation, trust or other entity,
including a governmental or political subdivision or an agency or
instrumentality thereof.
"SBF" means the Societe des Bourses Francaises.
"Social Charges" means any social security, unemployment, old age
pension, pension scheme, family allocation and other social charges or
contributions, to the extent any of the foregoing are required by applicable
laws, regulations or collective bargaining agreements.
"Subsidiary" means any corporation, partnership or other Person in
which the Company owns or controls, directly or indirectly, capital stock or
other equity interests representing more than 50% of the outstanding voting
securities or other equity interests.
"Taxes" means any income, profits, receipts, sales, value added,
transfer, registration, business, franchise, capital, withholding, payroll,
employment, property or customs tax, duty, governmental fee or other like
assessment or charge, together with any interest or penalty, imposed by any
governmental authority, or liability for the payment of any of the foregoing
(including as a result of any obligation to indemnify any other Person with
respect to any such taxes, duties, fees, assessments or charges).
"Transaction Documents" means this Agreement, the employment
agreement between Pierre Block and Fisher in the form of Annex 6A, the employ-
ment agreement between Anne-Catherine Block-Derriey and the Company in the form
of Annex 6B, the employment agreement between Pierre-Francois Block and the
Company in the form of Annex 6C, the trademark and tradename transfer
instruments between Pierre Block and Anne-Catherine Block-Derriey and the
Company (or such other Person as Fisher shall have designated) in the form of
Annex 7, the quota share (parts) transfer instrument relating to the 7.66%
interest in Avantec Sarl between Pierre Block and the Company (or such other
Person as Fisher
35
<PAGE>
shall have designated) in the form of Annex 8; and "Transaction Document" means
any of the foregoing.
Section 6.2 Other Defined Terms. Each of the following terms is
defined in the section set forth below opposite such term:
Affiliate Company....................................................Section 2.4
Agreement...........................................................Introduction
Buyer...............................................................Introduction
Closing..............................................................Section 1.2
Collective Labor Agreements......................................Section 2.14(b)
Company................................................................Recital A
Financial Statements..............................................Section 2.6(b)
Fisher..............................................................Introduction
ICC Rules.........................................................Section 7.3(a)
Indemnification Notice...............................................Section 5.6
Indemnified Party....................................................Section 5.6
Indemnifying Party...................................................Section 5.6
Leases...........................................................Section 2.12(b)
Loss(es).............................................................Section 5.1
Material Contract(s)................................................Section 2.17
Principal Minority Shareholders...................................Section 4.6(c)
Public Shares..........................................................Recital B
Sellers.............................................................Introduction
Seller's Guarantors.................................................Introduction
Sellers' Shares........................................................Recital B
Shares.................................................................Recital A
Share Purchase Price..............................................Section 1.1(a)
Tender Offer......................................................Section 4.6(a)
ARTICLE VII
MISCELLANEOUS
Section 7.1 Termination. (a) This Agreement may be terminated at any
time prior to Closing:
36
<PAGE>
(i) By the written agreement of Pierre Block, Fisher and the Buyer;
and
(ii) If Fisher and/or the Buyer, on the one hand, or the Sellers, on
the other hand, commit a material breach of any provision of this
Agreement or any other Transaction Document and such breach or default is
not cured within ten days of delivery of notice thereof by the opposite
party, upon notice by such opposite party to the breaching party.
(b) Notwithstanding any termination of this Agreement by one of the
parties pursuant to Section 7.1(a)(ii), Article 5 and Sections 7.2, 7.3, 7.6,
7.7, 7.8 and 7.10 shall remain in full force and effect.
Section 7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with French law.
Section 7.3 Arbitration. (a) In the event the parties are not able
to settle amicably any dispute arising in connection with this Agreement, such
dispute shall be finally settled under the Rules of Conciliation and Arbitration
of the International Chamber of Commerce (the "ICC Rules") in effect on the
date hereof, except as modified herein.
(b) The arbitration shall be conducted by three arbitrators
appointed in accordance with such ICC Rules. Each of the arbitrators shall be
fluent in English and French and shall have a working knowledge of French law.
For purposes of appointing arbitrators hereunder, Fisher and the Buyer shall be
considered one party and the Sellers shall jointly be considered one party. The
arbitration shall be held in Paris. Arbitration proceedings shall be conducted
in English and French, and the parties may submit testimony or documentary
evidence in English or French.
(c) Any award rendered by the arbitrators shall be in writing and
shall be final and binding upon the parties. Judgment upon the arbitration award
rendered or any order for enforcement may be entered in any court having
jurisdiction. The costs of the arbitration and the enforcement of the award
shall be borne by the party against whom the arbitration award was rendered (as
such issue is determined by the arbitration panel).
Section 7.4 Amendments; etc. This Agreement, or any term hereof, may
be amended only by a written instrument signed by all the parties hereto.
37
<PAGE>
Notwithstanding anything to the contrary in the foregoing, each of Sellers other
than Pierre Block hereby irrevocably appoint Pierre Block to take any and all
actions on their behalf in connection with this Agreement and the Transaction
Documents; and Fisher and the Buyer may act and rely upon any statement,
agreement or action given, made or taken by Pierre Block on behalf of any Seller
with respect to this Agreement and the other Transaction Documents and the
transactions contemplated hereby and thereby, and any such statement, agreement
or action by Pierre Block shall be binding upon each Seller.
Section 7.5 Assignment. Given that the Sellers have only agreed to
the transactions contemplated by this Agreement based upon the specific identity
of Fisher, this Agreement may not be assigned or otherwise transferred by any
party hereto without the prior written consent of the other parties, provided
that Fisher and the Buyer have the right to designate another subsidiary of
Fisher established in France to acquire the Sellers' Shares pursuant to the
terms of this Agreement and in the event they exercise this right, such other
subsidiary of Fisher shall thereby assume all of the rights and obligations of
the Buyer hereunder and Fisher shall thereby become the joint and several
guarantor of the due performance of such obligations by such other subsidiary
pursuant to the terms of Section 1.1(c) above.
Section 7.6 Notices. All notices, consents, requests and other
communications provided for in this Agreement shall be in writing and shall be
deemed validly given upon personal delivery or one day after being sent by
telecopy (so long as for notices sent by telecopy, a copy is also sent on the
same day by registered mail, acknowledgment of receipt requested), at the
following address or telecopy number, or at such other address or telecopy
number as a party may designate by written notice to the other party:
(a) If to any Seller, at:
c/o Mr. Pierre Block
8 rue de la Cote d'Azur
67100 Strasbourg
(France)
Telecopy: (33) 3-88-79-38-41
38
<PAGE>
(b) If to Fisher or the Buyer, at:
Fisher Scientific International Inc.
Liberty Lane
Hampton, New Hampshire 03842
(U.S.A.)
Telecopy: (1-603) 929-2363
Attention: General Counsel
Section 7.7 Expenses. The Sellers, on the one hand, and Fisher and
the Buyer, on the other hand, shall bear and pay all their own respective costs
and expenses in connection with the consummation of the transactions
contemplated by this Agreement and the other Transaction Documents, including
the fees and expenses of any legal counsel, accountant, broker, financial or
other advisor engaged by such parties. The Sellers agree that in no event shall
the Company or any Subsidiaries pay for or incur any costs or expenses as a
result of the transactions contemplated by this Agreement or any other
Transaction Document, other than remuneration due pursuant to the employment
agreements with the Company.
Section 7.8 Severability. If any provision of this Agreement is
held to be invalid or unenforceable for any reason, it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the parties to this
Agreement to the maximum extent possible. In any event, the invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction.
Section 7.9 No Third Party Beneficiaries. Nothing in this Agreement
shall be construed as giving any Person, other than the parties hereto and their
successors and permitted assignees, any right, remedy or claim under or in
respect of this Agreement or any provision hereof.
Section 7.10 Language. Fisher and the Buyer have relied upon the
English language version of this Agreement in the course of their negotiations
with the Sellers, whereas the Sellers have relied upon the French language
version of this Agreement in the course of such negotiations. As a negotiated
concession, Fisher and the Buyer have agreed that the French language version
shall be given predominant weight when interpreting the intentions of the
parties as expressed in this Agreement. Nonetheless, the Sellers and Seller's
Guarantors have agreed to initial
39
<PAGE>
the English language version of this Agreement and have further agreed that
Fisher and the Buyer shall have the right to introduce into evidence the
initialed English language version of this Agreement in order to document their
own understanding of the provisions of this Agreement.
Section 7.11 Integration. This Agreement and the other Transaction
Documents (including the annexes, schedules and exhibits hereto and thereto),
the Confidentiality Agreement executed among the parties as of September 10,
1996 and the other documents delivered pursuant hereto and thereto constitute
the full and entire understanding and agreement of the parties and supersede any
and all prior agreements, arrangements and understandings relating to the
subject matters hereof and thereof.
Section 7.12 Section Headings. The section headings of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
Section 7.13 Execution Copies. This Agreement shall be executed in
two original copies, each of which shall be an original, the first of which
shall be retained by Fisher and the Buyer and the second of which by the Sellers
and the Sellers' Guarantors. The parties to this Agreement expressly authorize
their respective counsel, to wit Francoise Bastien, counsel to Sellers and
Sellers Guarantors, and James C. Swank, counsel to Fisher and the Buyer, to
initial on their behalf the Annexes and Schedules to this Agreement.
Section 7.14 Subsequent Ratification by Buyer. On the signature date
of this Agreement, Fisher shall sign on its own behalf and as porte fort and
joint and several guarantor of Buyer, even though Buyer shall sign and thereby
ratify this Agreement only at a later date. Fisher undertakes as porte fort to
cause the Buyer to ratify and sign this Agreement, and in any event this
Agreement shall come into full force and effect upon the signature of this
Agreement by Fisher, on the one part, and all of the Sellers and Seller's
Guarantors, on the other part.
40
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement at the date first above written.
FISHER SCIENTIFIC INTERNATIONAL INC.
By: /s/ Robert Gagalis
--------------------------------------
Robert Gagalis
Vice President-Finance and Treasurer
FISHER SCIENTIFIC HOLDINGS FRANCE S.A.
By: /s/ Michael Harper
--------------------------------------
Michael Harper
Chairman of the Board of Directors
CAPIAC
By: /s/ Pierre Block
--------------------------------------
Pierre Block
Manager (Gerant)
SAPACA 97
By: /s/ Anne-Catherine Block-Derriey
--------------------------------------
Anne-Catherine Block-Derriey
Chairman of the Board of Directors
SAPCAR 97
By: /s/ Caroline Block
--------------------------------------
Caroline Block
Chairman of the Board of Directors
41
<PAGE>
SAPPI 97
By: /s/ Pierre Block
--------------------------------------
Pierre Block
Chairman of the Board of Directors
SAPPEF 97
By: /s/ Pierre Francois Block
--------------------------------------
Pierre-Francois Block
Chairman of the Board of Directors
Pierre BLOCK
/s/ Pierre Block
--------------------------------------
Anne-Catherine BLOCK-DERRIEY
/s/ Anne-Catherine Block-Derriey
--------------------------------------
Pierre-Francois BLOCK
/s/ Pierre Francois Block
--------------------------------------
42
<PAGE>
Caroline BLOCK
/s/ Caroline Block
--------------------------------------
Marthe Suzanne BLOCK
/s/ Marthe Suzanne Block
--------------------------------------
represented by Pierre BLOCK
43
December 2, 1998
Personal and Confidential
- -------------------------
Mr. Pierre Block
8, rue de la Cote d'Azur
67100 Strasbourg
Dear Pierre:
Further to our discussions, we are writing the present letter
to confirm the amendments and/or clarifications which we agreed with you to
make to the Stock Purchase Agreement (the "Stock Purchase Agreement"), dated
November 9, 1998, among Fisher Scientific International Inc. ("Fisher"), Fisher
Scientific Holdings France S.A. (the "Buyer"), you, other members of your family
and various holding companies as "Sellers" and "Sellers' Guarantors", concerning
our purchase of your family's interest in Bioblock Scientific S.A. ("Bioblock")
and its subsidiaries (the "Subsidiaries"). We therefore hereby request that you
countersign and return the enclosed copy of this letter to confirm, on behalf of
the Sellers and Sellers' Guarantors, your agreement on the matters set forth
below. Except as otherwise indicated, defined terms are used in this amendment
letter agreement with the same meaning as in the Stock Purchase Agreement.
1. In accordance with the Sellers' wish, and in particular with your own, Fisher
and the Buyer undertake to offer to the minority shareholders a price per share
of FrF 415, which is the price per share which will be paid to the Sellers
pursuant to the Stock Purchase Agreement. Thus, Fisher and the Buyer renounce to
the possibility to offer, during the garantie de cours procedure which will be
implemented after the Closing, any lower price which could have been agreed in
the meantime with the CMF.
2. To better reflect the pre-existing business relationships, Novodirect Sarl
("Novodirect") will become a direct subsidiary of Bioblock, rather than a
subsidiary of the Buyer, as contemplated by the form of Promise of Purchase and
Sale of Quota Shares which is set forth in Annex 2 of Annex 7C of the Stock
Purchase Agreement. Furthermore, the acquisition of the Novodirect quota shares
held by your family will occur on December 2, 1998, at the time of the
Pre-Realization, at the same time as the Buyer places in escrow the Share
Purchase Price as contemplated by Section 1.2(d) of the Stock Purchase
Agreement. By mutual agreement, the form of the agreement to be used to document
the transfer of the Novodirect quota shares held by your family has been
modified to reflect these changes, and is attached as Annex 1 to this amendment
letter agreement. In addition, you and we agreed to base the purchase price of
these Novodirect quota shares on the net book value of Novodirect as of November
30, 1998 (rather than as of the actual date of transfer of the Novodirect quota
shares).
<PAGE>
3. It has also been agreed that the following actions will also occur at the
time of the Pre-Closing: (a) the purchase by Bioblock from yourself of the quota
shares representing 7.66% of the capital of Avantec Sarl ("Avantec"), (b) the
purchase by Avantec from yourself of the Avantec trademarks pursuant to the
Contract for the Transfer of Trademarks in the form set forth as Annex 7A to the
Stock Purchase Agreement; (c) the purchase by Bioblock from yourself of the
Novodirect trademarks and of twelve other trademarks, pursuant to the Contracts
for the Transfer of Trademarks in the form set forth as Annexes 7C and 7B,
respectively, to the Stock Purchase Agreement and (d) the purchase by Bioblock
from Anne-Catherine Block-Derriey of four trademarks and one trademark
registration application, pursuant to the Contract for the Transfer of
Trademarks in the form set forth as Annex 7D to the Stock Purchase Agreement.
(It is understood that the forms of the Contracts for the Transfer of Trademarks
set forth in Annexes 7B and 7D shall be modified to reflect accurately the
persons who are the registered owners of the trademarks in question.)
4. It is understood and agreed that, when determining the amount of Net Excess
Cash for purposes of Section 1.1(b) and 1.2(c)(v) of the Stock Purchase
Agreement, (a) the amounts paid by Bioblock and by Avantec to purchase the quota
shares of Novodirect and Avantec as well as the trademarks and trademark
registration requests, as contemplated by Sections 1 and 2 above, shall be
considered as cash still in the possession of Bioblock and Avantec on the
Closing Date; and (b) the cash and short-term investment securities held by
Novodirect shall remain excluded from the calculation on a consolidated basis of
the cash and short-term investment securities of Bioblock and its Subsidiaries.
5. To permit these transactions to occur at the Closing, it has been agreed that
you will arrange for (a) the owners of the quota shares of Novodirect to agree
to the purchase by Bioblock of the quota shares of Novodirect and to approve
Bioblock as a new quotaholder; and (b) the approval by the Board of Directors of
Bioblock, pursuant to the requirements of Section 101 of the Law 66-537 of July
24, 1966 on Commercial Companies, of Bioblock's acquisition of the quota shares
of Novodirect, of the quota shares representing 7.66% of the capital of Avantec
Sarl and of the trademarks and trademark registration requests, as described
above. You will also arrange for the amounts to be paid by Bioblock for these
quota shares, trademarks and trademark registration requests to be reviewed and
approved by an independent expert, and which shall be deemed acceptable by the
Board of Directors of Bioblock.
6. We have not yet had the opportunity to review the services provided to
Bioblock, its Subsidiaries and Novodirect by Fina 3 S.A. ("Fina 3"), but it is
possible that all or part of these services may no longer be needed by those
companies once the transition period has been completed and those companies are
fully integrated in the Fisher Scientific group. We have thus agreed with you
that, immediately upon your receipt of a request to this effect from Fisher, you
shall take all steps necessary to terminate all or the relevant portions of the
service agreements between those companies and Fina 3, with no termination
indemnities or other amounts being due by Bioblock, its Subsidiaries and
Novodirect as a result of such termination.
7. Except as otherwise expressly stated in this letter agreement, the terms and
conditions set forth in the Stock Purchase Agreement shall remain in full force
and effect.
2
<PAGE>
8. This letter agreement hereby incorporates by reference Sections 7.2
(Governing Law), 7.3 (Arbitration), 7.4 (Amendments), 7.5 (Assignment), 7.6
(Notices), 7.7 (Expenses), 7.8 (Severability) and 7.10 (Languages) of the Stock
Purchase Agreement, as if such Sections had been incorporated herein and made a
part hereof.
Kindly countersign and return to us the enclosed copy of this letter
agreement, whereupon it shall come into effect as an amendment to the Stock
Purchase Agreement.
Sincerely yours,
FISHER SCIENTIFIC INTERNATIONAL, INC.
By: /s/ Richard A. Lukianuk
----------------------------------------
Name:Richard A. Lukianuk
Duly authorized pursuant to the attached
power of attorney from Mr. Todd. M.
DuChene
Agreed on behalf of
the Sellers and
Sellers' Guarantors:
/s/ Pierre Block
- ----------------------------
Pierre Block
3
Ratio of Earnings to Fixed Charges
Fisher Scientific International Inc.
Computation of Ratio of Earnings to Fixed Charges
(dollars in millions)
<TABLE>
<CAPTION>
Pro Forma Years Ended December 31,
----------------------------- ----------------------------------------
Nine Months Year Nine Months
Ended Ended Ended
September 30, December 31, September 30,
-------------- ----------- --------------
1998 1997 1997 1998 1997 1997 1996 1995 1994 1993
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income (Loss)Before Income Taxes ($51.5) $42.9 ($11.1) ($44.9) $47.5 ($5.1) $ 67.6 $ 4.3 $62.7 $57.8
Interest Expense 70.3 21.7 28.3 63.7 17.1 22.3 26.3 12.5 8.7 7.6
Amortization of Debt Issue Costs 3.6 0.5 0.7 3.6 0.5 0.7 0.8 2.5 0.3 0.3
Interest Portion of Rental Expense 5.4 4.6 6.2 5.4 4.6 6.2 5.6 3.5 3.2 3.0
----- ----- ----- ----- ----- ----- ------ ----- ----- -----
Total Earnings 27.8 69.7 24.1 27.8 69.7 24.1 100.3 22.8 74.9 68.7
Restructuring & Other Charges 51.8 51.8 34.3
Transaction - related costs 71.0 71.0
Total Earnings Before
Restructuring & Other Charges/
Transaction Related Costs $98.8 $69.7 $75.9 $98.8 $69.7 $75.9 $100.3 $57.1 $74.9 $68.7
===== ===== ===== ===== ===== ===== ====== ===== ===== =====
Fixed Charges:
Interest Expense 71.1 22.2 29.0 64.5 17.6 23.0 26.3 12.5 8.7 7.6
Amortization of Debt Issue Costs 3.6 0.5 0.7 3.6 0.5 0.7 0.8 2.5 0.3 0.3
Interest Portion of Rental Expense 5.4 4.6 6.2 5.4 4.6 6.2 5.6 3.5 3.2 3.0
===== ===== ===== ===== ===== ===== ====== ===== ===== =====
Total Fixed Charges $80.1 $27.3 $35.9 $73.5 $22.7 $29.9 $ 32.7 $18.5 $12.2 $10.9
===== ===== ===== ===== ===== ===== ====== ===== ===== =====
Ratio of Earnings to Fixed Charges 0.3(a) 2.6 0.7(a) 0.4(a) 3.1 0.8(a) 3.1 1.2 6.1 6.3
Ratio of Earnings to Fixed Charges
Before Restructuring & Other Charges 1.2 2.6 2.1 1.3 3.1 2.5 3.1 3.1 6.1 6.3
</TABLE>
(a) Earnings are inadequate to cover fixed charges by $52.3 million, $11.8
million, $45.7 million and $5.8 million, respectively, for the Pro Forma
and historical periods ending September 30, 1998 and December 31, 1997.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Fisher Scientific International Inc. on Form S-4 of our report dated
February 18, 1998 (March 9, 1998 as to Note 2), appearing in the Annual Report
on Form 10-K of Fisher Scientific International Inc. for the year ended
December 31, 1997 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
January 27, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
---------
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility
of a Trustee Pursuant to Section 305(b)(2)
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
Maureen Scannell Bateman, Esq. Executive Vice President and General Counsel
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
(Fisher Scientific International Inc.)
(Exact name of obligor as specified in its charter)
Delaware 02-0451017
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
(Liberty Lane
Hampton, NH 03842)
(Address of principal executive offices) (Zip Code)
(9% Senior Subordinated Notes Due 2008)
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations with Obligor.
If the Obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its
parent, State Street Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee
to commence business was necessary or issued is on file with
the Securities and Exchange Commission as Exhibit 2 to
Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference
thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4
to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Eastern
Edison Company (File No. 33-37823) and is incorporated herein
by reference thereto.
1
<PAGE>
5. A copy of each indenture referred to in Item 4. if the obligor is in
default.
Not applicable.
6. The consents of United States institutional trustees required by
Section 321(b) of the Act.
The consent of the trustee required by Section 321(b) of the
Act is annexed hereto as Exhibit 6 and made a part hereof.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed hereto as
Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the {December 21, 1998}.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Philip Kane
NAME: Philip Kane
TITLE: Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by {Fisher
Scientific International Inc.}. of its {9% Senior Subordinated Notes due 2008},
we hereby consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Philip Kane
NAME: Philip Kane
TITLE: Vice President
Dated: December 21, 1998
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company,
Massachusetts and foreign and domestic subsidiaries, a state banking institution
organized and operating under the banking laws of this commonwealth and a member
of the Federal Reserve System, at the close of business March 31, 1998,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act and in accordance
with a call made by the Commissioner of Banks under General Laws, Chapter 172,
Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin................ 1,144,309
Interest-bearing balances ........................................ 9,914,704
Securities................................................................. 10,062,052
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary............................... 8,073,970
Loans and lease financing receivables:
Loans and leases, net of unearned income 6,433,627
Allowance for loan and lease losses..... 88,820
Allocated transfer risk reserve......... 0
Loans and leases, net of unearned income and allowances........... 6,344,807
Assets held in trading accounts............................................ 1, 117,547
Premises and fixed assets.................................................. 453,576
Other real estate owned.................................................... 100
Investments in unconsolidated subsidiaries................................. 44,985
Customers' liability to this bank on acceptances outstanding............... 66,149
Intangible assets.......................................................... 263,249
Other assets............................................................... 1,066,572
---------
Total assets............................................................... 38,552,020
==========
LIABILITIES
Deposits:
In domestic offices............................................... 9,266,492
Noninterest-bearing............ 6,824,432
Interest-bearing............... 2,442,060
In foreign offices and Edge subsidiary............................ 14,385,048
Noninterest-bearing............ 75,909
Interest-bearing............... 14,309,139
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary............................... 9,949,994
Demand notes issued to the U.S. Treasury and Trading Liabilities........... 171,783
Trading liabilities........................................................ 1,078,189
Other borrowed money....................................................... 406,583
Subordinated notes and debentures.......................................... 0
Bank's liability on acceptances executed and outstanding................... 66,149
Other liabilities.......................................................... 878,947
Total liabilities.......................................................... 36,203,185
----------
EQUITY CAPITAL
Perpetual preferred stock and related surplus.............................. 0
Common stock............................................................... 29,931
Surplus .................................................................. 450,003
Undivided profits and capital reserves/Net unrealized
holding gains (losses) .................................................. 1,857,021
Net unrealized holding gains (losses) on
available-for-sale securities............................................ 18,136
Cumulative foreign currency translation adjustments........................ (6,256)
-
Total equity capital....................................................... 2,348,835
---------
Total liabilities and equity capital....................................... 38,552,020
----------
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Truman S. Casner
5
LETTER OF TRANSMITTAL
FISHER SCIENTIFIC INTERNATIONAL INC.
Offer for all Outstanding
9% Senior Subordinated Notes due 2008
in Exchange for
9% Senior Subordinated Notes due 2008
Which Have Been Registered Under
the Securities Act of 1933, as Amended,
Pursuant to the Prospectus, dated January , 1999
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M. NEW YORK CITY TIME, ON
__, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS MAY BE
WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
- --------------------------------------------------------------------------------
Delivery To: State Street Bank and Trust Company, Exchange Agent
By Mail: By Overnight Courier:
State Street Bank and Trust Company State Street Bank and Trust Company
P.O. Box 778 Two International Place
Boston, Massachusetts 02102 Boston, Massachusetts 02110
Attention: Corporate Trust Department Attention: Corporate Trust Department
Kellie Mullen Kellie Mullen
By Hand: in New York (as Drop Agent) By Hand: in Boston
State Street Bank and Trust Company, N.A. State Street Bank and Trust Company
61 Broadway, 15th Floor Two International Place
Corporate Trust Window Fourth Floor, Corporate Trust
New York, New York 10006 Boston, Massachusetts 02110
For Information Call:
(617) 664-5587
By Facsimile Transmission
(for Eligible Institutions only):
(617) 664-5314
Attention: Corporate Trust Department
Confirm by Telephone:
(617) 664-5314
Delivery of this instrument to an address other than as set forth above,
or transmission of instructions via facsimile other than as set forth above,
will not constitute a valid delivery.
The undersigned acknowledges that he or she has received and reviewed the
Prospectus, dated January , 1999 (the "Prospectus"), of Fisher Scientific
International Inc., a Delaware corporation (the "Company"), and this Letter of
Transmittal (the "Letter"), which together constitute the Company's offer (the
"Exchange Offer") to exchange an aggregate principal amount of up to
$200,000,000 of the Company's 9% Senior Subordinated Notes due 2008 (the "New
Notes") which have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), for a like principal amount of the Company's issued and
outstanding 9% Senior Subordinated Notes due 2008 (the "Old Notes") from the
registered holders thereof (the "Holders").
For each Old Note accepted for exchange, the Holder of such Old Note will
receive a New Note having a principal amount equal to that of the surrendered
Old Note. The New Notes will bear interest from the most recent date to which
interest has been paid on the Old Notes or, if no interest has been paid on the
Old Notes, from November 20, 1998. Accordingly, registered Holders of New Notes
on the relevant record date for the first interest payment date following the
consummation of the Exchange Offer will receive interest accruing from the most
recent date to which interest has been paid or, if no interest has been paid,
from November 20, 1998. Old Notes accepted for exchange will cease to accrue
interest from and after the date of consummation of the Exchange Offer. Holders
of Old Notes whose Old Notes are accepted for exchange will not
<PAGE>
receive any payment in respect of accrued interest on such Old Notes otherwise
payable on any interest payment date the record date for which occurs on or
after consummation of the Exchange Offer.
This Letter is to be completed by a holder of Old Notes either if
certificates are to be forwarded herewith or if a tender of certificates for Old
Notes, if available, is to be made by book-entry transfer to the account
maintained by the Exchange Agent at The Depository Trust Company (the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in "The
Exchange Offer--Book-Entry Transfer" section of the Prospectus. Holders of Old
Notes whose certificates are not immediately available, or who are unable to
deliver their certificates or confirmation of the book-entry tender of their Old
Notes into the Exchange Agent's account at the Book-Entry Transfer Facility (a
"Book-Entry Confirmation") and all other documents required by this Letter to
the Exchange Agent on or prior to the Expiration Date, must tender their Old
Notes according to the guaranteed delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus. See
Instruction 1. Delivery of documents to the Book-Entry Transfer Facility does
not constitute delivery to the Exchange Agent.
The undersigned has completed the appropriate boxes below and signed this
Letter to indicate the action the undersigned desires to take with respect to
the Exchange Offer.
List below the Old Notes to which this Letter relates. If the space
provided below is inadequate, the certificate numbers and principal amount of
Old Notes should be listed on a separate signed schedule affixed hereto.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES 1 2 3
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate
Principal Principal
Name(s) and Address(es) of Registered Holder(s) Certificate Amount of Amount
(Please fill in, if blank) Number(s)* Old Note(s) Tendered**
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Total
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed if Old Notes are being tendered by book-entry
transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have
tendered ALL of the Old Notes represented by the Old Notes indicated in
column 2. See Instruction 2. Old Notes tendered hereby must be in
denominations of principal amount of $1,000 and any integral multiple
thereof. See Instruction 1.
- --------------------------------------------------------------------------------
[_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
---------------------------------------------
Account Number Transaction Code Number
------------------------- -----------
[_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s)
-------------------------------------------
Window Ticket Number (if any)
---------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
------------------------
Name of Institution Which Guaranteed Delivery
-----------------------------
If Delivered by Book-Entry Transfer, Complete the Following:
Account Number Transaction Code Number
------------------ ------------------
[_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
---------------------------------------------------------------------------
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
2
<PAGE>
If the undersigned is not a broker-dealer, the undersigned represents that
it is not engaged in, and does not intend to engage in, a distribution of New
Notes. If the undersigned is a broker-dealer that will receive New Notes for its
own account in exchange for Old Notes that were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such New Notes; however, by so acknowledging and
by delivering such a prospectus, the undersigned will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act. If the
undersigned is a broker-dealer that will receive New Notes, it represents that
the Old Notes to be exchanged for the New Notes were acquired as a result of
market-making activities or other trading activities.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the Exchange Offer, the
undersigned hereby tenders to the Company the aggregate principal amount of Old
Notes indicated above. Subject to, and effective upon, the acceptance for
exchange of the Old Notes tendered hereby, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Company all right, title and
interest in and to such Old Notes as are being tendered hereby.
The undersigned hereby irrevocably constitutes and appoints the Exchange
Agent as the undersigned's true and lawful agent and attorney-in-fact with
respect to such tendered Old Notes, with full power of substitution, among other
things, to cause the Old Notes to be assigned, transferred and exchanged. The
undersigned hereby represents and warrants that the undersigned has full power
and authority to tender, sell, assign and transfer the Old Notes, and to acquire
New Notes issuable upon the exchange of such tendered Old Notes, and that, when
the same are accepted for exchange, the Company will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim when the same are accepted
by the Company. The undersigned hereby further represents that any New Notes
acquired in exchange for Old Notes tendered hereby will have been acquired in
the ordinary course of business of the person receiving such New Notes, whether
or not such person is the undersigned, that neither the Holder of such Old Notes
nor any such other person is participating in, intends to participate in or has
an arrangement or understanding with any person to participate in the
distribution of such New Notes and that neither the Holder of such Old Notes nor
any such other person is an "affiliate," as defined in Rule 405 under the
Securities Act, of the Company.
The undersigned acknowledges that this Exchange Offer is being made in
reliance on interpretations by the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in no-action letters issued to third
parties, that the New Notes issued pursuant to the Exchange Offer in exchange
for the Old Notes may be offered for resale, resold and otherwise transferred by
Holders thereof (other than any such Holder that is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act), without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that such New Notes are acquired in the ordinary course
of such Holders' business and such Holders have no arrangement with any person
to participate in the distribution of such New Notes. However, the SEC has not
considered the Exchange Offer in the context of a no-action letter and there can
be no assurance that the staff of the SEC would make a similar determination
with respect to the Exchange Offer as in other circumstances. If the undersigned
is not a broker-dealer, the undersigned represents that it is not engaged in,
and does not intend to engage in, a distribution of New Notes and has no
arrangement or understanding to participate in a distribution of New Notes. If
any Holder is an affiliate of the Company, is engaged in or intends to engage in
or has any arrangement or understanding with respect to the distribution of the
New Notes to be acquired pursuant to the Exchange Offer, such Holder (i) could
not rely on the applicable interpretations of the staff of the SEC and (ii) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with any resale transaction. If the undersigned is
a broker-dealer that will receive New Notes for its own account in exchange for
Old Notes, it represents that the Old Notes to be exchanged for the New Notes
were acquired by it as a result of market-making activities or other trading
activities and acknowledges that it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any resale of such New
Notes; however, by so acknowledging and by delivering a prospectus meeting the
requirements of the Securities Act, the undersigned will not be deemed to admit
that it is an "underwriter" within the meaning of the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
sale, assignment and transfer of the Old Notes tendered hereby. All authority
conferred or agreed to be conferred in this Letter and every obligation of the
undersigned hereunder shall be binding upon the successors, assigns, heirs,
executors, administrators, trustees in bankruptcy and legal representatives of
the undersigned and shall not be affected
3
<PAGE>
by, and shall survive, the death or incapacity of the undersigned. This tender
may be withdrawn only in accordance with the procedures set forth in "The
Exchange Offer--Withdrawal Rights" section of the Prospectus.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, please deliver the New Notes (and, if applicable,
substitute certificates representing Old Notes for any Old Notes not exchanged)
in the name of the undersigned or, in the case of a book-entry delivery of Old
Notes, please credit the account indicated above maintained at the Book-Entry
Transfer Facility. Similarly, unless otherwise indicated under the box entitled
"Special Delivery Instructions" below, please send the New Notes (and, if
applicable, substitute certificates representing Old Notes for any Old Notes not
exchanged) to the undersigned at the address shown above in the box entitled
"Description of Old Notes."
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD NOTES"
ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD NOTES AS
SET FORTH IN SUCH BOX ABOVE.
SPECIAL ISSUANCE INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Old Notes not exchanged
and/or New Notes are to be issued in the name of and sent to someone
other than the person or persons whose signature(s) appear(s) on this
Letter above, or if Old Notes delivered by book-entry transfer which are
not accepted for exchange are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account
indicated above.
Issue New Notes and/or Old Notes to:
Name(s) ........................................................................
(Please Type or Print)
................................................................................
(Please Type or Print)
Address ........................................................................
................................................................................
(Zip Code)
(Complete Substitute Form W-9)
[_] Credit unexchanged Old Notes delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below.
------------------------------------------------------------
(Book-Entry Transfer Facility
Account Number, if applicable)
- --------------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 3 and 4)
To be completed ONLY if certificates for Old Notes not ex changed and/or
New Notes are to be sent to someone other than the person or persons whose
signature(s) appear(s) on this Letter above or to such person or persons at an
address other than shown in the box entitled "Description of Old Notes" on this
Letter above.
Mail New Notes and/or Old Notes to:
Name(s) ........................................................................
(Please Type or Print)
................................................................................
(Please Type or Print)
Address ........................................................................
................................................................................
(Zip Code)
IMPORTANT: THIS LETTER OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATES FOR
OLD NOTES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE
NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
4
<PAGE>
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(Complete Accompanying Substitute Form W-9 below)
x ................................................. ......................, 1998
x ................................................. ......................, 1998
(Signature(s) of Owner) (Date)
Area Code and Telephone Number......................................
If a holder is tendering any Old Notes, this Letter must be signed by the
registered holder(s) as the name(s) appear(s) on the certificate(s) for the Old
Notes or by any person(s) authorized to become registered holder(s) by
endorsements and documents transmitted herewith. If signature is by a trustee,
executor, administrator, guardian, officer or other person acting in a fiduciary
or representative capacity, please set forth full title. See Instruction 3.
Name(s):........................................................................
................................................................................
(Please Type or Print)
Capacity:.......................................................................
Address:........................................................................
................................................................................
(Including Zip Code)
SIGNATURE GUARANTEE
(If required by Instruction 3)
Signature(s) Guaranteed by
an Eligible Institution: .......................................................
(Authorized Signature)
................................................................................
(Title)
................................................................................
(Name and Firm)
Dated: ..................................................................., 1998
5
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer for the
9% Senior Subordinated Notes due 2008 of Fisher Scientific International Inc.
in Exchange for the
9% Senior Subordinated Notes due 2008 of Fisher Scientific International Inc.,
Which Have Been Registered Under the
Securities Act of 1933, as Amended
1. Delivery of this Letter and Notes; Guaranteed Delivery Procedures.
This Letter is to be completed by holders of Old Notes either if
certificates are to be forwarded herewith or if tenders are to be made pursuant
to the procedures for delivery by book-entry transfer set forth in "The Exchange
Offer--Book-Entry Transfer" section of the Prospectus. Certificates for all
physically tendered Old Notes, or Book-Entry Confirmation, as the case may be,
as well as a properly completed and duly executed Letter (or manually signed
facsimile hereof) and any other documents required by this Letter, must be
received by the Exchange Agent at the address set forth herein on or prior to
the Expiration Date, or the tendering holder must comply with the guaranteed
delivery procedures set forth below. Old Notes tendered hereby must be in
denominations of principal amount of $1,000 and any integral multiple thereof.
Holders whose certificates for Old Notes are not immediately available or
who cannot deliver their certificates and all other required documents to the
Exchange Agent on or prior to the Expiration Date, or who cannot complete the
procedure for book-entry transfer on a timely basis, may tender their Old Notes
pursuant to the guaranteed delivery procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus. Pursuant to
such procedures, (i) such tender must be made through an Eligible Institution,
(ii) prior to 5:00 P.M., New York City time, on the Expiration Date, the
Exchange Agent must receive from such Eligible Institution a properly completed
and duly executed Letter (or a facsimile thereof) and Notice of Guaranteed
Delivery, substantially in the form provided by the Company (by facsimile
transmission, mail or hand delivery), setting forth the name and address of the
holder of Old Notes and the amount of Old Notes tendered, stating that the
tender is being made thereby and guaranteeing that within three New York Stock
Exchange ("NYSE") trading days after the Expiration Date, the certificates for
all physically tendered Old Notes, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, and any other documents required by this
Letter will be deposited by the Eligible Institution with the Exchange Agent,
and (iii) the certificates for all physically tendered Old Notes, in proper form
for transfer, or a Book-Entry Confirmation, as the case may be, and all other
documents required by this Letter, must be received by the Exchange Agent within
three NYSE trading days after the Expiration Date.
The method of delivery of this Letter, the Old Notes and all other required
documents is at the election and risk of the tendering holders, but the delivery
will be deemed made only when actually received or confirmed by the Exchange
Agent. If Old Notes are sent by mail, it is suggested that the mailing be
registered mail, properly insured, with return receipt requested, made
sufficiently in advance of the Expiration Date to permit delivery to the
Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date.
See "The Exchange Offer" section of the Prospectus.
2. Partial Tenders (not applicable to noteholders who tender by book-entry
transfer).
If less than all of the Old Notes evidenced by a submitted certificate are
to be tendered, the tendering holder(s) should fill in the aggregate principal
amount of Old Notes to be tendered in the box above entitled "Description of Old
Notes--Principal Amount Tendered." A reissued certificate representing the
balance of nontendered Old Notes will be sent to such tendering holder, unless
otherwise provided in the appropriate box on this Letter, promptly after the
Expiration Date. All of the Old Notes delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated.
3. Signatures on this Letter; Bond Powers and Endorsements; Guarantee of
Signatures.
If this Letter is signed by the registered holder of the Old Notes tendered
hereby, the signature must correspond exactly with the name as written on the
face of the certificates without any change whatsoever.
If any tendered Old Notes are owned of record by two or more joint owners,
all of such owners must sign this Letter.
6
<PAGE>
If any tendered Old Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter as there are different registrations of certificates.
When this Letter is signed by the registered holder or holders of the Old
Notes specified herein and tendered hereby, no endorsements of certificates or
separate bond powers are required. If, however, the New Notes are to be issued,
or any untendered Old Notes are to be reissued, to a person other than the
registered holder, then endorsements of any certificates transmitted hereby or
separate bond powers are required. Signatures on such certificate(s) must be
guaranteed by an Eligible Institution.
If this Letter is signed by a person other than the registered holder or
holders of any certificate(s) specified herein, such certificate(s) must be
endorsed or accompanied by appropriate bond powers, in either case signed
exactly as the name or names of the registered holder or holders appear(s) on
the certificate(s) and signatures on such certificate(s) must be guaranteed by
an Eligible Institution.
If this Letter or any certificates or bond powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and, unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted.
Endorsements on certificates for Old Notes or signatures on bond powers
required by this Instruction 3 must be guaranteed by a firm which is a financial
institution (including most banks, savings and loan associations and brokerage
houses) that is a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchanges Medallion Program (each an "Eligible Institution").
Signatures on this Letter need not be guaranteed by an Eligible
Institution, provided the Old Notes are tendered: (i) by a registered holder of
Old Notes (which term, for purposes of the Exchange Offer, includes any
participant in the Book-Entry Transfer Facility system whose name appears on a
security position listing as the holder of such Old Notes) who has not completed
the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on this Letter, or (ii) for the account of an Eligible
Institution.
4. Special Issuance and Delivery Instructions.
Tendering holders of Old Notes should indicate in the applicable box the
name and address to which New Notes issued pursuant to the Exchange Offer and or
substitute certificates evidencing Old Notes not exchanged are to be issued or
sent, if different from the name or address of the person signing this Letter.
In the case of issuance in a different name, the employer identification or
social security number of the person named must also be indicated. Noteholders
tendering Old Notes by book-entry transfer may request that Old Notes not
exchanged be credited to such account maintained at the Book-Entry Transfer
Facility as such noteholder may designate hereon. If no such instructions are
given, such Old Notes not exchanged will be returned to the name and address of
the person signing this Letter.
5. Taxpayer Identification Number.
Federal income tax law generally requires that a tendering holder whose Old
Notes are accepted for exchange must provide the Company (as payor) with such
holder's correct Taxpayer Identification Number ("TIN") on Substitute Form W-9
below, which in the case of a tendering holder who is an individual, is his or
her social security number. If the Company is not provided with the current TIN
or an adequate basis for an exemption from backup withholding, such tendering
holder may be subject to a $50 penalty imposed by the Internal Revenue Service.
In addition, the Exchange Agent may be required to withhold 31% of the amount of
any reportable payments made after the exchange to such tendering holder of New
Notes. If withholding results in an overpayment of taxes, a refund may be
obtained.
Exempt holders of Old Notes (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. See the enclosed Guidelines of Certification of Taxpayer
Identification Number on Substitute Form W-9 (the "W-9 Guidelines") for
additional instructions.
To prevent backup withholding, each tendering holder of Old Notes must
provide its correct TIN by completing the Substitute Form W-9 set forth below,
certifying, under penalties of perjury, that the TIN provided is correct (or
that such holder is awaiting a TIN) and that (i) the holder is exempt from
backup withholding, or (ii) the holder has not been notified
7
<PAGE>
by the Internal Revenue Service that such holder is subject to backup
withholding as a result of a failure to report all interest or dividends or
(iii) the Internal Revenue Service has notified the holder that such holder is
no longer subject to backup withholding. If the tendering holder of Old Notes is
a nonresident alien or foreign entity not subject to backup withholding, such
holder must give the Exchange Agent a completed Form W-8, Certificate of Foreign
Status. These forms may be obtained from the Exchange Agent. If the Old Notes
are in more than one name or are not in the name of the actual owner, such
holder should consult the W-9 Guidelines for information on which TIN to report.
If such holder does not have a TIN, such holder should consult the W-9
Guidelines for instructions on applying for a TIN, check the box in Part 2 of
the Substitute Form W-9 and write "applied for" in lieu of its TIN. Note:
Checking this box and writing "applied for" on the form means that such holder
has already applied for a TIN or that such holder intends to apply for one in
the near future. If the box in Part 2 of the Substitute Form W-9 is checked, the
Exchange Agent will retain 31% of reportable payments made to a holder during
the sixty (60) day period following the date of the Substitute Form W-9. If the
holder furnishes the Exchange Agent with his or her TIN within sixty (60) days
of the Substitute Form W-9, the Exchange Agent will remit such amounts retained
during such sixty (60) day period to such holder and no further amounts will be
retained or withheld from payments made to the holder thereafter. If, however,
such holder does not provide its TIN to the Exchange Agent within such sixty
(60) day period, the Exchange Agent will remit such previously withheld amounts
to the Internal Revenue Service as backup withholding and will withhold 31% of
all reportable payments to the holder thereafter until such holder furnishes its
TIN to the Exchange Agent.
6. Transfer Taxes.
The Company will pay all transfer taxes, if any, applicable to the transfer
of Old Notes to it or its order pursuant to the Exchange Offer. If, however, New
Notes and/or substitute Old Notes not exchanged are to be delivered to, or are
to be registered or issued in the name of, any person other than the registered
holder of the Old Notes tendered hereby, or if tendered Old Notes are registered
in the name of any person other than the person signing this Letter, or if a
transfer tax is imposed for any reason other than the transfer of Old Notes to
the Company or its order pursuant to the Exchange Offer, the amount of any such
transfer taxes (whether imposed on the registered holder or any other persons)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted herewith, the amount of such
transfer taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Old Notes specified in this Letter.
7. Waiver of Conditions.
The Company reserves the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
8. No Conditional Tenders.
No alternative, conditional, irregular or contingent tenders will be
accepted. All tendering holders of Old Notes, by execution of this Letter, shall
waive any right to receive notice of the acceptance of their Old Notes for
exchange.
Neither the Company, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of Old
Notes nor shall any of them incur any liability for failure to give any such
notice.
9. Mutilated, Lost, Stolen or Destroyed Old Notes.
Any holder whose Old Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated above for further
instructions.
10. Withdrawal Rights.
Tenders of Old Notes may be withdrawn at any time prior to 5:00 P.M., New
York City time, on the Expiration Date.
For a withdrawal of a tender of Old Notes to be effective, a written notice
of withdrawal must be received by the Exchange Agent at the address set forth
above prior to 5:00 P.M., New York City time, on the Expiration Date. Any such
notice of withdrawal must (i) specify the name of the person having tendered the
Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be
withdrawn (including certificate number or numbers and the principal amount of
such Old Notes), (iii) contain a statement that such holder is withdrawing his
election to have such Old Notes exchanged, (iv) be signed by the
8
<PAGE>
holder in the same manner as the original signature on the Letter by which such
Old Notes were tendered (including any required signature guarantees) or be
accompanied by documents of transfer to have the Trustee with respect to the Old
Notes register the transfer of such Old Notes in the name of the person
withdrawing the tender and (v) specify the name in which such Old Notes are
registered, if different from that of the Depositor. If Old Notes have been
tendered pursuant to the procedure for book-entry transfer set forth in "The
Exchange Offer-Book-Entry Transfer" section of the Prospectus, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Old Notes and otherwise
comply with the procedures of such facility. All questions as to the validity,
form and eligibility (including time of receipt) of such notices will be
determined by the Company, whose determination shall be final and binding on all
parties. Any Old Notes so withdrawn will be deemed not to have been validly
tendered for exchange for purposes of the Exchange Offer and no New Notes will
be issued with respect thereto unless the Old Notes so withdrawn are validly
retendered. Any Old Notes that have been tendered for exchange but which are not
exchanged for any reason will be returned to the Holder thereof without cost to
such Holder (or, in the case of Old Notes tendered by book-entry transfer into
the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures set forth in "The Exchange Offer--Book-Entry
Transfer" section of the Prospectus, such Old Notes will be credited to an
account maintained with the Book-Entry Transfer Facility for the Old Notes) as
soon as practicable after withdrawal, rejection of tender or termination of the
Exchange Offer. Properly withdrawn Old Notes may be retendered by following the
procedures described above at any time on or prior to 5:00 P.M., New York City
time, on the Expiration Date.
11. Requests for Assistance or Additional Copies.
Questions relating to the procedure for tendering, as well as requests for
additional copies of the Prospectus and this Letter, and requests for Notices of
Guaranteed Delivery and other related documents may be directed to the Exchange
Agent, at the address and telephone number indicated above.
9
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(See Instruction 5)
PAYOR'S NAME: STATE STREET BANK AND TRUST COMPANY
<TABLE>
<CAPTION>
<S> <C> <C>
Part 1--PLEASE PROVIDE YOUR TIN TIN: ______________________________
IN THE BOX AT RIGHT AND CERTIFY Social Security Number or
BY SIGNING AND DATING BELOW. Employer Identification Number
SUBSTITUTE
Form W-9 Part 2--TIN Applied For |_|
Department of the Treasury CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
Internal Revenue Service
(1) the number shown on this form is my correct TIN (or I am waiting for a number to be
Payor's Request for issued to me).
Taxpayer (2) I am not subject to backup withholding either because: (a) I am exempt from backup
Identification Number withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS")
("TIN") and that I am subject to backup withholding as a result of a failure to report all interest or
Certification dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding, and
(3) any other information provided on this form is true and correct.
SIGNATURE ...........................................DATE ..........................
</TABLE>
You must cross out item (2) of the above certification if you have been notified
by the IRS that you are subject to backup withholding because of underreporting
of interest or dividends on your tax return and you have not been notified by
the IRS that you are no longer subject to backup withholding.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (a) I have mailed or delivered an application
to receive a taxpayer identification number to the appropriate Internal Revenue
Service Center or Social Security Administration Office or (b) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number by the time of the exchange, 31 percent
of all reportable payments made to me thereafter will be withheld until I
provide a number.
- ----------------------------------------------- -------------------------------
Signature Date
10
NOTICE OF GUARANTEED DELIVERY
FOR
FISHER SCIENTIFIC INTERNATIONAL INC.
This form or one substantially equivalent hereto must be used to accept the
Exchange Offer of Fisher Scientific International Inc. (the "Company") made
pursuant to the Prospectus, dated January , 1999 (the "Prospectus"), if
certificates for the outstanding 9% Senior Subordinated Notes due 2008 of the
Company (the "Old Notes") are not immediately available or if the procedure for
book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach State Street Bank and Trust Company, as
exchange agent (the "Exchange Agent") prior to 5:00 P.M., New York City time, on
the Expiration Date of the Exchange Offer. Such form may be delivered or
transmitted by facsimile transmission, mail or hand delivery to the Exchange
Agent as set forth below. In addition, in order to utilize the guaranteed
delivery procedure to tender Old Notes pursuant to the Exchange Offer, a
completed, signed and dated Letter of Transmittal (or facsimile thereof) must
also be received by the Exchange Agent prior to 5:00 P.M., New York City time,
on the Expiration Date. Capitalized terms not defined herein are defined in the
Prospectus.
Delivery To: State Street Bank and Trust Company, Exchange Agent
By Mail: By Overnight Courier:
State Street Bank and Trust Company State Street Bank and Trust Company
P.O. Box 778 Two International Place
Boston, Massachusetts 02102 Boston, Massachusetts 02110
Attention: Corporate Trust Department Attention: Corporate Trust Department
Kellie Mullen Kellie Mullen
By Hand: in New York (as Drop Agent) By Hand: in Boston
State Street Bank and Trust Company, N.A. State Street Bank and Trust Company
61 Broadway, 15th Floor Two International Place
Corporate Trust Window Fourth Floor, Corporate Trust
New York, New York 10006 Boston, Massachusetts 02110
For Information Call:
(617) 664-5587
By Facsimile Transmission
(for Eligible Institutions only):
(617) 664-5314
Attention: Corporate Trust Department
Confirm by Telephone:
(617) 664-5314
Delivery of this instrument to an address other than as set forth above,
or transmission of instructions via facsimile other than as set forth above,
will not constitute a valid delivery.
<PAGE>
Ladies and Gentlemen:
Upon the terms and conditions set forth in the Prospectus and the
accompanying Letter of Transmittal, the undersigned hereby tenders to the
Company the principal amount of Old Notes set forth below pursuant to the
guaranteed delivery procedure described in "The Exchange Offer--Guaranteed
Delivery Procedures" section of the Prospectus.
Principal Amount of Old Notes Tendered:*
$
--------------------------------------- If Old Notes will be delivered
Certificate Nos. (if available): by book-entry transfer to
The Depository Trust Company,
- ---------------------------------------- provide account number.
Total Principal Amount Represented by
Old Notes Certificate(s):
$ Account Number
--------------------------------------- --------------------
- -------------------------------------------------------------------------------
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned and every obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives, successors
and assigns of the undersigned.
- -------------------------------------------------------------------------------
PLEASE SIGN HERE
X
---------------------------------------- ------------------
X
---------------------------------------- ------------------
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number:
------------------------------
Must be signed by the holder(s) of Old Notes as their name(s) appear(s) on
certificates for Old Notes or on a security position listing, or by person(s)
authorized to become registered holder(s) by endorsement and documents
transmitted with this Notice of Guaranteed Delivery. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer or other
person acting in a fiduciary or representative capacity, such person must set
forth his or her full title below.
Please print name(s) and address(es)
Name(s): ----------------------------------------------------------------
----------------------------------------------------------------
Capacity:
Address(es): ----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
- --------
* Must be in denominations of principal amount of $1,000 and any integral
multiple thereof.
<PAGE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a financial institution (including most banks, savings
and loan associations and brokerage houses) that is a participant in the
Securities Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchanges Medallion Program, hereby
guarantees that the certificates representing the principal amount of Old Notes
tendered hereby in proper form for transfer, or timely confirmation of the
book-entry transfer of such Old Notes into the Exchange Agent's account at The
Depository Trust Company pursuant to the procedures set forth in "The Exchange
Offer--Guaranteed Delivery Procedures" section of the Prospectus, together with
any required signature guarantee and any other documents required by the Letter
of Transmittal, will be received by the Exchange Agent at the address set forth
above, no later than three New York Stock Exchange trading days after the
Expiration Date.
- -------------------------------------- ----------------------------------------
Name of Firm Authorized Signature
- -------------------------------------- ----------------------------------------
Address Title
Name:
- -------------------------------------- -----------------------------------
Zip Code (Please Type or Print)
Area Code and Tel. No. Dated:
---------------- ----------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM. CERTIFICATES FOR
OLD NOTES SHOULD BE SENT ONLY WITH A COPY OF YOUR PREVIOUSLY EXECUTED
LETTER OF TRANSMITTAL.
FISHER SCIENTIFIC INTERNATIONAL INC.
Offer for all Outstanding
9% Senior Subordinated Notes due 2008
in Exchange for
9% Senior Subordinated Notes due 2008,
Which Have Been Registered Under
the Securities Act of 1933,
as Amended
To Our Clients:
Enclosed for your consideration is a Prospectus, dated January , 1999 (the
"Prospectus"), and the related Letter of Transmittal (the "Letter of
Transmittal"), relating to the offer (the "Exchange Offer") of Fisher Scientific
International Inc. (the "Company") to exchange its 9% Senior Subordinated Notes
due 2008, which have been registered under the Securities Act of 1933, as
amended (the "New Notes"), for its outstanding 9% Senior Subordinated Notes due
2008 (the "Old Notes"), upon the terms and subject to the conditions described
in the Prospectus and the Letter of Transmittal. The Exchange Offer is being
made in order to satisfy certain obligations of the Company contained in the
Registration Rights Agreement dated November 20, 1998, by and among the Company
and the initial purchasers referred to therein.
This material is being forwarded to you as the beneficial owner of the Old
Notes held by us for your account but not registered in your name. A tender of
such Old Notes may only be made by us as the holder of record and pursuant to
your instructions.
Accordingly, we request instructions as to whether you wish us to tender
on your behalf the Old Notes held by us for your account, pursuant to the terms
and conditions set forth in the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as possible in
order to permit us to tender the Old Notes on your behalf in accordance with the
provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 P.M.,
New York City time, on , 1999, unless extended by the Company. Any Old Notes
tendered pursuant to the Exchange Offer may be withdrawn at any time before the
Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Old Notes.
2. The Exchange Offer is subject to certain conditions set forth in the
Prospectus in the section captioned "The Exchange Offer--Certain Conditions to
the Exchange Offer."
3. Any transfer taxes incident to the transfer of Old Notes from the
holder to the Company will be paid by the Company, except as otherwise provided
in the Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 P.M., New York City time,
on_____________ ____, 1999, unless extended by the Company.
If you wish to have us tender your Old Notes, please so instruct us by
completing, executing and returning to us the instruction form on the back of
this letter. The Letter of Transmittal is furnished to you for information only
and may not be used directly by you to tender Old Notes.
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Exchange Offer made by Fisher
Scientific International Inc. with respect to its Old Notes.
This will instruct you to tender the Old Notes held by you for the account
of the undersigned, upon and subject to the terms and conditions set forth in
the Prospectus and the related Letter of Transmittal.
Please tender the Old Notes held by you for my account as indicated below:
9% Senior Subordinated Notes due 2008
$_________________________________________ (Aggregate Principal
Amount of Old Notes)
[_] Please do not tender any Old Notes held by you for my
account.
Dated: _____________, 1999
Signature(s):
-------------------------------------------------------------------
Print Name(s) here:
-------------------------------------------------------------
(Print Address(es)):
------------------------------------------------------------
(Area Code and Telephone Number(s)):
--------------------------------------------
(Tax Identification or Social Security Number(s)):
------------------------------
None of the Old Notes held by us for your account will be tendered unless
we receive written instructions from you to do so. Unless a specific contrary
instruction is given in the space provided, your signature(s) hereon shall
constitute an instruction to us to tender all the Old Notes held by us for your
account.
FISHER SCIENTIFIC INTERNATIONAL INC.
Offer for all Outstanding
9% Senior Subordinated Notes due 2008
in Exchange for
9% Senior Subordinated Notes due 2008,
Which Have Been Registered Under
the Securities Act of 1933,
as Amended
To: Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Fisher Scientific International Inc. (the "Company") is offering, upon and
subject to the terms and conditions set forth in the Prospectus, dated
____________ __, 1999 (the "Prospectus"), and the enclosed Letter of Transmittal
(the "Letter of Transmittal"), to exchange (the "Exchange Offer") its 9% Senior
Subordinated Notes due 2008, which have been registered under the Securities Act
of 1933, as amended, for its outstanding 9% Senior Subordinated Notes due 2008
(the "Old Notes"). The Exchange Offer is being made in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement dated
November 20, 1998, by and among the Company and the initial purchasers referred
to therein.
We are requesting that you contact your clients for whom you hold Old
Notes regarding the Exchange Offer. For your information and for forwarding to
your clients for whom you hold Old Notes registered in your name or in the name
of your nominee, or who hold Old Notes registered in their own names, we are
enclosing the following documents:
1. Prospectus dated January _, 1999;
2. The Letter of Transmittal for your use and for the information of your
clients;
3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if certificates for Old Notes are not immediately available or time will not
permit all required documents to reach the Exchange Agent prior to the
Expiration Date (as defined below) or if the procedure for book-entry transfer
cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients for whose account
you hold Old Notes registered in your name or the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Exchange Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelopes addressed to State Street Bank and Trust Company, the
Exchange Agent for the Exchange Offer.
<PAGE>
Your prompt action is requested. The Exchange Offer will expire at 5:00
P.M., New York City time, on _______________ ___, 1999, unless extended by the
Company (the "Expiration Date"). Old Notes tendered pursuant to the Exchange
Offer may be withdrawn at any time before the Expiration Date.
To participate in the Exchange Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Exchange Agent and certificates representing the Old Notes should be delivered
to the Exchange Agent, all in accordance with the instructions set forth in the
Letter of Transmittal and the Prospectus.
If a registered holder of Old Notes desires to tender, but such Old Notes
are not immediately available, or time will not permit such holder's Old Notes
or other required documents to reach the Exchange Agent before the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
described in the Prospectus under the caption "The Exchange Offer-Guaranteed
Delivery Procedures.
The Company will, upon request, reimburse brokers, dealers, commercial
banks and trust companies for reasonable and necessary costs and expenses
incurred by them in forwarding the Prospectus and the related documents to the
beneficial owners of Old Notes held by them as nominee or in a fiduciary
capacity. The Company will pay or cause to be paid all stock transfer taxes
applicable to the exchange of Old Notes pursuant to the Exchange Offer, except
as set forth in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange Offer, or requests
for additional copies of the enclosed materials, should be directed State Street
Bank and Trust Company, the Exchange Agent for the Exchange Offer, at its
address and telephone number set forth on the front of the Letter of
Transmittal.
Very truly yours,
FISHER SCIENTIFIC INTERNATIONAL INC.
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF
THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN
THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.
