[EXECUTION COPY]
RECAPITALIZATION AGREEMENT
This RECAPITALIZATION AGREEMENT (this "Agreement") is made
as of April 14, 1999, by and among Dade Behring Holdings, Inc., a
Delaware corporation ("Holdings"), Hoechst AG, a German corporation
("Hoechst"), each of the Persons listed on Schedule I attached hereto
(the "GS Group") and each of the Persons listed on Schedule II
attached hereto (the "Xxxx Group," and, together with the GS Group,
the "Investors") (Hoechst, the GS Group, the Xxxx Group and each
other party from time to time a party thereto are collectively
referred to herein as the "Stockholders" and individually as a
"Stockholder").
WHEREAS, Holdings, as of the date hereof, Hoechst, the GS
Group, the Xxxx Group and certain members of Holdings' management own
the number of shares of Holdings' Class L Common Stock, par value
$.01 per share (the "Class L Common"), the number of shares of
Holdings' Class L Common, Series B, par value $.01 per share (the
"Class L Common, Series B"), and the number of shares of Holdings'
Common Stock, par value $.01 per share (the "Common"), as set forth
opposite its name on the Pre-Recap Capitalization Schedule attached
hereto. The Class L Common, Class L Common, Series B, and the Common
are collectively referred to herein as "Common Stock."
WHEREAS, Holdings desires to reconstitute its capital
structure through the redemption of a certain number of shares of its
Common Stock and the incurrence of new debt obligations, all on the
terms and subject to the conditions set forth herein.
WHEREAS, on the date hereof, Hoechst, the Investors and
Holdings have entered into that certain Amended and Restated
Stockholders Agreement (the "Stockholders Agreement"). Capitalized
terms not otherwise defined herein shall have the meanings ascribed
to such terms in the Stockholders Agreement.
WHEREAS, the Investors desire to have certain of their
Common Stock redeemed on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual representations, warranties, and covenants which are to be
made and performed by the respective parties, it is hereby agreed as
follows:
ARTICLE 1.
THE RECAPITALIZATION
1.1. Recapitalization Overview. Holdings and the
Stockholders hereby agree that (i) Holdings shall redeem a portion of
the Common Stock held by the Investors (as set forth below), (ii)
Holdings shall redeem a portion of the Common Stock held or the
Common Stock obtainable upon exercise of options held by members of
management of Holdings and its subsidiaries or enter into other
arrangements with respect thereto (as set forth below) and (iii)
Holdings shall fund the repurchases of Common Stock through
replacement credit facilities (as set forth below).
1.2. Financing Arrangements. The Stockholders and Holdings
hereby agree that Holdings shall arrange for the financing or
refinancing necessary for the transactions contemplated hereby.
Holdings shall take such actions as are reasonably necessary to
obtain the credit facilities and consummate the transactions
contemplated hereby (including, the payment of commitment fees,
financing fees and other fees and expenses). The terms of the
financing shall be subject to approval by the Board.
1.3. Recapitalization Transactions. On a Closing Date, the
following transactions shall occur:
(a) Holdings shall redeem from the Investors the number of
shares of Class L Common and Common that may be redeemed taking into
account (x) the amount of available funds under the replacement
credit facilities and (y) the payments to be made to members of
management, as set forth in Section 1.3(b) below (it being understood
that the aggregate number of shares to be redeemed shall be as
determined by the Investors in their sole discretion, subject to an
aggregate amount being redeemed hereunder from the Investors equal to
the Maximum Amount (as defined on Schedule III attached hereto, i.e.,
$450 million). The number of shares of Class L Common and Common to
be repurchased shall be in the ratio of 1:9. The per share
redemption price for each share of Class L Common shall be the Per
Share Price (as defined on Schedule III attached hereto) plus the
Unpaid Yield and Unreturned Original Cost on such share (as
determined as of a Closing Date pursuant to Holdings' Amended and
Restated Certificate of Incorporation, as in effect on the date
hereof (the "Certificate of Incorporation")). The per share
redemption price for each share of Common shall be the Per Share
Price (as defined on Schedule III attached hereto). The redemption
shall be made pro rata among all Investors and the redemption price
shall be paid at Closing to the Investors in cash by wire transfer of
immediately available funds.
(b) Holdings shall redeem from members of management of
Holdings and its subsidiaries shares of Class L Common and Common,
with the Persons to participate, and the extent of such Persons'
participation, to be determined by the Board. Consistent with any
rights that the members of management may have, the Board shall
determine the manner and extent of participation by members of
management holding options to acquire Common. In its discretion, the
Board may substitute bonus payments (or other arrangements). For the
purposes of this Agreement, "Person" means an individual, a
partnership, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization, or a
governmental entity (or any department, agency, or political
subdivision thereof).
1.4. Closing Transactions.
(a) As and when Holdings obtains financing arrangements
pursuant to Section 1.2 hereof and the Investors approve the number
of their shares which are to be redeemed, then there shall be a
closing of the transactions contemplated hereby (a "Closing"). Any
date on which a Closing shall occur is referred to herein as a
"Closing Date," and a Closing shall be effective as of the opening of
business on a Closing Date.
(b) Promptly following a Closing Date, Holdings and the
Investors shall take all actions necessary so that upon the Investors
surrendering their Common and Class L Common stock certificates to
Holdings in exchange for cash by wire transfer of immediately
available funds to the accounts previously designated by each
Investor, Holdings shall issue and deliver to each Investor new
Common and Class L Common stock certificates representing the number
of Common and Class L Common shares not redeemed.
1.5. Continuation of Voting Rights. As a result of the
recapitalization transactions contemplated by this Agreement, the
relative voting power of the Investors would be reduced. Holdings
and the Stockholders have agreed that until such time as the shares
of Common Stock held by the Bain Holders no longer constitute at
least 5% of the outstanding Common Stock, the Investors shall be
entitled to maintain the same relative voting power that they possess
on the date of this Agreement. Holdings and the Stockholders agree
to take all necessary or desirable actions within such holder's
control (whether in such holder's capacity as a stockholder, director
or officer of Holdings or otherwise) as requested by the Investors so
that in connection with a Closing the Investors shall retain (until
such time as the shares of Common Stock held by the Bain Holders no
longer constitute at least 5% of the outstanding Common Stock) voting
rights equivalent to the voting rights represented by the shares of
Common Stock being redeemed hereunder. Such actions may include,
without limitation, (x) issuing voting proxies in favor of the
Investors, (y) permitting the Investors to exchange shares of Common
Stock for replacement shares of capital stock with additional voting
rights (but with no greater economic participation rights), and (z)
amending the Transaction Documents in such a manner as may be
required to ensure that any replacement shares are afforded
consistent treatment thereunder.
1.6. Investment Banking Fees. Holdings and the
Stockholders acknowledge and agree that in consideration of the
investment banking services provided by Xxxx Capital, Inc. and
Xxxxxxx Xxxxx & Co. in connection with the transaction process which
has culminated in the parties entering into this Agreement, Holdings
shall pay each of Xxxx Capital, Inc. and Xxxxxxx Xxxxx & Co. an
investment banking fee. The aggregate amount of the investment
banking fees shall be the IB Fee Amount (as defined on Schedule III
attached hereto), 50% of which shall be payable on the date of this
Agreement and 50% of which shall be payable upon the first date that
may be deemed a Closing Date.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
As a material inducement to the parties hereto to enter
into this Agreement, each Stockholder hereby represents and warrants
that:
2.1. Organizational Power. Such Stockholder is a
corporation or limited partnership duly organized, validly existing,
and in good standing under the laws of its state of organization.
Such Stockholder has full power and authority to enter into this
Agreement and the other agreements contemplated hereby to which such
Stockholder is a party and perform its obligations hereunder and
thereunder.
2.2. Authorization of Transaction. The execution,
delivery, and performance of this Agreement and the other agreements
contemplated hereby to which such Stockholder is a party have been
duly and validly authorized by all requisite action on the part of
such Stockholder, and no other proceedings on its part is necessary
to authorize the execution, delivery, or performance of this
Agreement. This Agreement constitutes, and each of the other
agreements contemplated hereby to such Stockholder is a party shall
when executed constitute, a valid and binding obligation of such
Stockholder, enforceable in accordance with their terms.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
As a material inducement to the Stockholders to enter into
this Agreement, Holdings hereby represents and warrants that:
3.1. Organizational Power. Holdings has been duly
organized and is validly existing under the laws of Delaware and has
full power and authority to execute and deliver, and to perform its
obligations under, this Agreement and the consummation by it of the
transactions contemplated hereby has been duly authorized by all
necessary action on its part.
3.2. Authorization of Transaction. This Agreement has been
duly and validly executed and delivered by Holdings and constitutes
the valid and binding obligation of Holdings, enforceable against
Holdings in accordance with its terms.
3.3. Noncontravention. The execution, delivery and
performance of this Agreement and the consummation thereby of the
transactions contemplated hereby by Holdings will not with or without
the giving of notice or the lapse of time or both (a) violate any
provision of a material law, statute, rule or regulation to which
Holdings is subject, (b) violate any order, judgment or decree
applicable to it or (c) conflict with or result in a breach or
default under any term or condition of its applicable governing
instruments or any material agreement or other material instrument to
which it is a party or by which it is bound.
3.4. Capitalization. The capitalization of Holdings prior
to giving effect to the transactions contemplated by Article 1 above
(including a list of all authorized, issued and outstanding shares of
Common Stock, and the identity of the holders thereof) is set forth
on the Pre-Recap Capitalization Schedule attached hereto. All of the
issued and outstanding shares of Common Stock have been duly
authorized, are validly issued, fully paid, and nonassessable.
Except as set forth on the Pre-Recap Capitalization Schedule and
pursuant to this Agreement, there are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, or other contracts or commitments that could
require Holdings to issue, sell, or otherwise cause to become
outstanding any of its capital stock.
ARTICLE 4.
OTHER AGREEMENTS
4.1. Press Release and Announcements. Unless required by
law (in which case each party agrees to use reasonable efforts to
consult with the other parties prior to any such disclosure as to the
form and content of such disclosure), no press releases,
announcements to the employees, customers or suppliers of Holdings or
other releases of information related to this Agreement or the
transactions contemplated hereby will be issued or released without
the consent of the holders of at least a majority of the Common Stock
retained by the Investors and the holders of at least a majority of
the Common Stock held by Hoechst hereunder.
4.2. Specific Performance. Each party acknowledges and
agrees that the other parties would be damaged irreparably in the
event any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached.
Accordingly, each party agrees that the other parties shall be
entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in any action
instituted in any court in the United States of America or in any
state having jurisdiction over the parties and the matter in addition
to any other remedy to which they may be entitled pursuant hereto.
ARTICLE 5.
MISCELLANEOUS
5.1. Cooperation. In case at any time prior to or after a
Closing any further action is reasonably necessary or desirable to
carry out the purposes of this Agreement, each of the parties hereto
will take such further reasonable action (including the execution and
delivery of such further instruments and documents) as any other
party may request.
5.2. Remedies. Each Stockholder shall have all rights and
remedies set forth in this Agreement and all rights and remedies
which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have
under any law. Any Person having any rights under any provision of
this Agreement shall be entitled to enforce such rights specifically
(without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to
exercise all other rights granted by law.
5.3. Consent to Amendments. Except as otherwise expressly
provided herein, the provisions of this Agreement may be amended and
Holdings may take any action herein prohibited, or omit to perform
any act herein required to be performed by it, only if Holdings has
obtained the written consent of the holders of at least a majority of
the Common Stock retained by the Investors hereunder and the holders
of at least a majority of the Common Stock held by the Hoechst
hereunder.
5.4. Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the
parties hereto whether so expressed or not.
5.5. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of this
Agreement.
5.6. Counterparts. This Agreement may be executed
simultaneously in counterparts (including by means of telecopied
signature pages), any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall
constitute one and the same Agreement.
5.7. Descriptive Headings; Interpretation. The descriptive
headings of this Agreement are inserted for convenience only and do
not constitute a substantive part of this Agreement. The use of the
word "including" in this Agreement shall be by way of example rather
than by limitation.
5.8. Governing Law. All issues and questions concerning
the construction, validity, enforcement and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by,
and construed in accordance with, the laws of the State of New York,
without giving effect to any choice of law or conflict of law rules
or provisions (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.
5.9. Notices. All notices, demands or other communications
to be given or delivered under or by reason of the provisions of this
Agreement shall be in writing and shall be deemed to have been given
when delivered personally to the recipient two days after being sent
to the recipient by reputable overnight courier service (charges
prepaid) to the addresses indicated below or to such other address or
to the attention of such other person as the recipient party has
specified by prior written notice to the sending party:
If to Holdings:
Dade Behring Holdings, Inc.
0000 Xxxxxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Chief Executive Officer
If to the Xxxx Group:
Xxxx Capital, Inc.
Two Xxxxxx Place
Boston, Massachusetts 02116
U.S.A.
Attention: Xxxx Xxxxxxxxxxx
With a copy to (which shall not constitute notice
hereunder):
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
U.S.A.
Attention: Xxxxxxx X. Xxxxxxxxx
If to the GS Group:
Xxxxxxx, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Attn: Xxxxxx X. Xxxxxxxxx
With a copy to (which shall not constitute notice
hereunder):
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Attention: Xxx Xxxxx
If to Hoechst:
Xxxxxxx XX
Xxxxxxxxxxxxxx 00
X-00000 Xxxxxxxxx a. M.
Germany
Attention: Chairman of the Management Board
With a copy to (which shall not constitute notice
hereunder):
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Attention: Xxxxxxxxx O'X. Xxxxxx
5.10. No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if
drafted jointly by the parties hereto, and no presumption or burden
of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any of the provisions of this Agreement.
* * * * *
IN WITNESS WHEREOF, the parties have executed this
Recapitalization Agreement as of the date first written above.
DADE BEHRING HOLDINGS, INC.
By: /s/
Its: CEO and President
HOECHST AG
By: /s/ Xxxxx Xxxxxxx
By: /s/
Its: Board Members
XXXX CAPITAL FUND IV, L.P.
By: Xxxx Capital Partners IV, L.P.
Its: General Partner
By: Xxxx Capital Investors, Inc.
Its: General Partner
By: /s/
A Managing Director
XXXX CAPITAL FUND IV-B, L.P.
By: Xxxx Capital Partners IV, L.P.
Its: General Partner
By: Xxxx Capital Investors, Inc.
Its: General Partner
By: /s/
A Managing Director
BCIP ASSOCIATES
By: /s/
A General Partner
BCIP TRUST ASSOCIATES, L.P.
By: /s/
A General Partner
GS CAPITAL PARTNERS, L.P.
By: GS Advisors, L.P.
Its: General Partner
By: GS Advisors, Inc.
Its: General Partner
By: /s/
BRIDGE STREET FUND 1994, L.P.
By: Stone Street Funding Corp.
Its: Managing General Partner
By: /s/
STONE STREET FUND 1994, L.P.
By: Stone Street Funding Corp.
Its: General Partner
By: /s/
XXXXXXXX STREET PARTNERS
By: /s/
A General Partner
