AMENDMENT NO. 1
TO
RECAPITALIZATION AGREEMENT
AMENDMENT dated as of September 29, 1999 (this "Amendment") to
Recapitalization Agreement dated as of the July 25, 1999 (the
"Recapitalization Agreement") by and among Bausch & Lomb Incorporated, a New
York corporation ("Seller Parent') and CRL Acquisition LLC, a Delaware limited
liability company ("Buyer"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the
Recapitalization Agreement.
W I T N E S S E T H
WHEREAS, Seller Parent, Buyer, Sellers, Parent Canada, Recap Co, Recap
Subco and Buyer Parent have entered into the Recapitalization Agreement; and
WHEREAS, the parties hereto desire to amend certain of the provisions
of the Recapitalization Agreement pursuant to Section 9.11 thereof as more
particularly described below.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
ARTICLE I.
AMENDMENTS TO RECAPITALIZATION AGREEMENT
1.1 The parties hereto acknowledge and agree that Section 2.1 of the
Recapitalization Agreement is hereby amended by deleting it in its entirety
and replacing it with the following:
"2.1 Reorganization and Stock Split. Upon the terms and subject to the
conditions of this Agreement, the parties agree that the following
transactions will take place immediately prior to the Closing in the order set
forth below (with the steps set forth in Section 2.1.2 through 2.1.5 being
hereinafter referred to as the "Stage 2 Reorganization"):
2.1.1 Recap Co shall redeem 29,000 shares of Recap Co Common Stock
owned by Recap Subco in exchange for $1.00.
2.1.2 Recap Subco shall form a wholly owned Canadian Corporation
("NewCanCo").
2.1.3 WPLP shall contribute all of its CRL Business Assets used in
the CRL Business to Recapo Subco and, in exchange therefor, Recap Subco shall
issue to WPLP the Recap Subco Preferred Stock pursuant to a contribution
agreement in substantially the form of the Contribution Agreements.
2.1.4 CRL shall purchase shares of Recap Subco Common Stock in
exchange for cash and Recap Subco shall purchase shares of NewCanCo common
stock in exchange for cash.
2.1.5 Parent Canada shall sell all of its CRL Business Assets used in
the CRL Business to NewCanCo in exchange for cash pursuant to an Asset
Purchase Agreement in substantially the form of the Contribution Agreements.
2.1.6 Each of CRL, SPAFAS, and International shall exchange all of
the Recap Subco Common Stock owned by it for the same number of shares of
Recap Co Common Stock and WPLP shall exchange all of the Recap Subco Preferred
Stock for the same number of shares of Recap Co Preferred Stock."
2.1.7 Recap Co shall redeem 1,000 shares of Recap Co Common Stock
owned by Recap Subco in exchange for $1.00.
2.1.8 Recap Co shall, by way of a stock dividend, effect a stock
split of the issued and outstanding shares of Recap Co Common Stock by
declaring and paying a stock dividend of 46.6190509259 shares of Recap Co
Common Stock in respect of each issued and outstanding share of Recap Co
Common Stock (the "Stock Split").
2.1.9 Buyer shall form a wholly owned Delaware corporation
("Acquisition Co") and contribute at least $90,000,000 thereto in exchange for
shares of common stock of Acquisition Co."
1.2 (a) The parties hereto acknowledge and agree that Section 2.3 of
the Recapitalization Agreement is hereby amended by deleting the caption
thereto in its entirety and replacing such caption with the following:
"Redemptions; Merger."
(b) The parties hereto acknowledge and agree that Section 2.3 of the
Recapitalization Agreement is hereby amended by deleting Section 2.3.4 thereof
in its entirety and replacing such Section 2.3.4 with the following:
"2.3.4 Recap Co shall redeem 5,227,167 shares of Recap Co Common
Stock owned by CRL for $50,000,000 in cash, payable by wire transfer of
immediately available funds to such account as is designated by CRL, and
$43,000,000 in principal amount of the Recap Co Sub Note, and CRL shall
deliver to Recap Co certificates, duly endorsed for transfer, representing
such shares of Recap Co Common Stock."
(c) The parties hereto acknowledge and agree that Section 2.3 of the
Recapitalization Agreement is hereby amended by adding a new Section 2.3.5
thereof to read in its entirety as follows:
"2.3.5 Buyer and Seller Parent shall cause Acquisition Co to merge
with and into Recap Co with Recap Co being the surviving entity (the
"Merger"). At the effective time of the Merger, (i) CRL shall receive, as the
sole shareholder of Recap Co, in exchange for each one share of the 5,058,548
shares of Recap Co Common Stock issued and outstanding immediately prior to
the effective time of the Merger, $17.7916666996 and .254166808341 shares of
Recap Co Common Stock as the surviving corporation in the Merger, and (ii)
Buyer shall receive 9,000,000 shares of Recap Co Common Stock in exchange for
all of the issued and outstanding shares of Acquisition Co common stock,
constituting 87.5% of the total number of shares of Recap Co Common Stock
issued and
outstanding following all of the Redemptions and the Merger,
including the number of shares so issued. The parties acknowledge that the
Merger will be treated for tax purposes as a qualified stock purchase within
the meaning of section 338(d)(3) of the Internal Revenue Code, section
1.338-1(c)(8) of the regulations thereunder and Rev. Rul. 90-95, 1990-2 C.B.
67."
(d) The parties hereto acknowledge and agree that Section 2.3 of the
Recapitalization Agreement is hereby amended by renumbering Section 2.3.5 as
Section 2.3.6.
1.3 The parties hereto acknowledge and agree that Section 5.5.5 of
the Recapitalization Agreement is hereby amended by deleting the phrase ", at
the Closing," in the third sentence of Section 5.5.5 and replacing such phrase
with the following:
",within sixty (60) calendar days after the Closing,"
1.4 The parties hereto acknowledge and agree that Section 8.3 of the
Recapitalization Agreement is hereby amended by deleting clause 8.3(d) thereof
in its entirety and replacing such clause with the following:
"(d) the conduct of the CRL Business after the Closing Date except to
the extent the Losses or Litigation Expense resulted from the conduct of the
CRL Business prior to the Closing Date. Any indemnity payable pursuant to
Section 8.3(a) or Section 8.3(b) (but only with respect to the covenants and
agreements, contained in Section 5.15), shall be increased by an amount equal
to the product of (i) such Loss and Litigation Expense and (ii) the Seller's
Equity Percentage at the time."
1.5 The parties hereto acknowledge and agree that Section 8.5 of the
Recapitalization Agreement is hereby amended by deleting the fifth sentence
thereof in its entirety and replacing such sentence with the following:
"The Indemnitor may not settle or compromise any Claim without the
prior written consent of Indemnitee except for settlement or compromise of a
Claim (i) which includes the unconditional release by the Person asserting the
Claim and any related claimants of Indemnitee from all liability with respect
to such Claim in form and substance reasonably satisfactory to Indemnitee,
(ii) which would not adversely affect the Indemnitee and its Affiliates to
own, hold use and operate their respective assets and businesses, and (iii)
for money damages only."
1.6 The parties hereto acknowledge and agree that Section 9.3 of the
Recapitalization Agreement is hereby amended by deleting the first sentence
thereof in its entirety and replacing such sentence with the following:
"All excise, sales, use, transfer, stamp, documentary, filing,
recording and other similar taxes or fees which may be imposed or assessed as
the result of the transactions contemplated hereby, including, without
limitation, the Merger and Redemptions ("Transfer Taxes"), together with any
interest or penalties with respect thereto, shall be shared by the Seller
Parent and Recap Co as follows: the first $100,000 shall be paid by Seller
Parent, the second $100,000 shall be paid by Recap Co, and all amounts in
excess of $200,000 shall be paid 50% by Recap Co and 50% by Seller Parent."
ARTICLE II.
MISCELLANEOUS
2.1 Invalidity, Etc. The provisions of this Amendment shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Amendment, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may
be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Amendment and the
application of such provision to other persons, entities or circumstances
shall not be affected by such invalidity or unenforceability.
2.2 Governing Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to the
conflicts of laws principles thereof.
2.3 Recitals. The section headings contained in this Amendment are
for reference purposes only and shall not affect the meaning or interpretation
of this Amendment.
2.4 Counterparts. This Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together
shall constitute one and the same instrument.
2.5 Ratification. The parties hereto hereby ratify and approve the
Recapitalization Agreement, as amended hereby, and the parties hereto
acknowledge that all of the terms and provisions of the Recapitalization
Agreement as amended hereby, are and remain in full force and
effect.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the date first above written.
BAUSCH & LOMB, INCORPORATED
By:
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Name: Xxxx X. Xxxxxxxxxx
Title: Vice President-Business
Development
CRL ACQUISITION LLC
By:
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Name: Xxxx Xxxxxx
Title: President
