-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MGT2Wi5X/LE6Po6F9kSqEJkF5V+5kXQbM49dW+IiieVl2WZm0iF3/7DMlXb/MiyZ O7pIbVGXGE4lI+g5BgpqGA== 0000950130-97-004537.txt : 19971021 0000950130-97-004537.hdr.sgml : 19971021 ACCESSION NUMBER: 0000950130-97-004537 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19971017 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971020 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DADE INTERNATIONAL INC CENTRAL INDEX KEY: 0000942307 STANDARD INDUSTRIAL CLASSIFICATION: IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES [2835] IRS NUMBER: 363949533 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 033-90462 FILM NUMBER: 97698269 BUSINESS ADDRESS: STREET 1: 1717 DEERFIELD RD CITY: DEERFIELD STATE: IL ZIP: 60115 BUSINESS PHONE: 7082675400 MAIL ADDRESS: STREET 1: 153 EAST 53RD ST CITY: NEWYORK STATE: NY ZIP: 600150778 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ----------------------------- Date of Report (Date of earliest event reported) October 20, 1997 DADE INTERNATIONAL INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 333-13523 36-3949533 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) - -------------------------------------------------------------------------------- 1717 Deerfield Road Deerfield, IL 60015-0778 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (847) 267-5300 Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Exhibit Index on page 5 Page 1 of 5 pages ITEM 2. TRANSFER AND RECEIPT OF STOCK. As of October 1, 1997, Diagnostics Holding, Inc. ("Holdings") -------- completed its acquisition (the "Acquisition") of the stock (the "Stock") of ----------- ----- various subsidiaries of Hoechst AG and certain of its affiliates ("Hoechst") ------- that operate the worldwide business of the research, development, manufacture, marketing, sale, distribution and service of human in vitro diagnostic equipment, reagents, consumable supplies and services (the "Business"). The -------- Stock was contributed down to Dade International Inc. and various of its subsidiaries. As consideration for the Acquisition, Holdings issued equity securities to Hoechst providing Hoechst with a 32.5% interest in Holdings and paid $100,000 to Hoechst at the closing of the Acquisition (the "Closing"), ------- which amounts are subject to adjustments based on changes in Net Assets (as defined in the Agreement and Plan of Contribution related to the Acquisition) of Holdings. As part of the Acquisition, Holdings has changed its name to Dade Behring Holdings, Inc. Pursuant to the Agreement and Plan of Contribution related to the Acquisition, Hoechst has agreed to indemnify Holdings for certain liabilities and obligations relating to the Business, including liabilities and obligations relating to pre-Closing accounts payable and accrued expenses, taxes, employee compensation and other benefits (including post-retirement medical and life insurance benefits), environmental matters and other matters as specified in such agreement and Holdings has agreed to indemnify Hoechst for similar liabilities and obligations related to the business of Holdings and its subsidiaries. In connection with the Acquisition, the Company amended its existing bank indebtedness by entering into an amendment to its Bank Credit Agreement to account for the Acquisition. FACILITIES AND EMPLOYEES. Following the Acquisition, the Company will operate these four additional manufacturing facilities: FLOOR AREA NO. OF LOCATION NO. OF SITES (SQ. FT.) OWNED/LEASED PERSONNEL(1) -------- ------------ ----------- ------------ ------------ Marburg, Germany............ 1 320,000 Owned/Leased 480 Scoppito, Italy............. 1 14,500 Owned 25 Westwood, Massachusetts..... 1 155,000 Leased 257 Cupertino, California....... 1 110,000 Leased 225 - ------- --- TOTAL 4 599,500 987 = ======= === __________ (1) Personnel numbers include temporary employees but do not include personnel associated with, but not housed at, the locations (e.g., sales representatives and technical support specialists). ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements of Business Acquired. i) Information needed to file the required historical financial information of the Business is currently unavailable. The Company intends to file the required historical financial information as soon as practical, but in any event, not later than December 15, 1997. Page 2 of 5 pages (b) Pro Forma Financial Information. i) Information needed to file the required pro forma financial information related to the Acquisition is currently unavailable. The Company intends to file the required pro forma financial information as soon as practicable but in any event, not later than December 15, 1997. (c) Exhibits. 2.1 Agreement and Plan of Combination by and between Diagnostic Holdings, Inc. and Hoechst AG dated as of June 24, 1997 as supplemented on July 2, 1997 and as further supplemented on September 29, 1997 and September 30, 1997. 10.1 First Amendment to the Credit Agreement dated as of September 11, 1997 among Diagnostics Holdings, Inc., various banks and Bankers Trust Company, as Agent. 10.7 Amended and Restated Stockholders Agreement dated as of October 1, 1997 by and among Dade International Inc. and the various other parties signatory thereto. 10.11 Second Amendment to Amended and Restated Exclusive Distribution Agreement made and entered into as of October 1, 1997 by and between Dade International Inc. and Allegiance Healthcare Corporation. 10.18 Cooperation and Collaboration Agreement executed as of October 1, 1997 by and between Dade Behring Holdings, Inc. and Hoechst AG. 99.1 Press Release related to the Acquisition. Page 3 of 5 pages SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dade International Inc. By: /s/ Scott T. Garrett ------------------------------------- Name: Scott T. Garrett Title: President and Chief Executive Officer Dated: October 20, 1997 Page 4 of 5 pages EXHIBIT INDEX Exhibit No. Document Page ------------- ------------------------------------------------------ ------ 2.1 Agreement and Plan of Combination by and between Diagnostic Holdings, Inc. and Hoechst AG dated as of June 24, 1997 as supplemented on July 2, 1997 and as further supplemented on September 29, 1997 and September 30, 1997. 10.1 First Amendment to the Credit Agreement dated as of September 11, 1997 among Diagnostics Holdings, Inc., various banks and Bankers Trust Company, as Agent. 10.7 Amended and Restated Stockholders Agreement dated as of October 1, 1997 by and among Dade International Inc. and the various other parties signatory thereto. 10.11 Second Amendment to Amended and Restated Exclusive Distribution Agreement made and entered into as of October 1, 1997 by and between Dade International Inc. and Allegiance Healthcare Corporation. 10.18 Cooperation and Collaboration Agreement executed as of October 1, 1997 by and between Dade Behring Holdings, Inc. and Hoechst AG. 99.1 Press Release related to the Acquisition. Page 5 of 5 pages EX-2.1 2 AGREEMENT AND PLAN OF COMBINATION EXHIBIT 2.1 EXECUTION COPY -------------- - -------------------------------------------------------------------------------- AGREEMENT AND PLAN OF COMBINATION by and between DIAGNOSTIC HOLDINGS, INC. and HOECHST AG Dated as of June 24, 1997 - -------------------------------------------------------------------------------- TABLE OF CONTENTS ----------------- Page ---- ARTICLE I TRANSFER OF BUSINESS ................................. 1 -------------------- 1.1 Transfer of Stock to Dade ............................ 1 ------------------------- 1.2 Consideration ........................................ 2 ------------- 1.3 Closing Transactions ................................. 2 -------------------- 1.4 Certain Post-Execution Agreements .................... 2 --------------------------------- 1.5 Net Asset Adjustment ................................. 3 -------------------- 1.6 Post-Closing Determination ........................... 4 -------------------------- 1.7 Certain Related Party Receivables .................... 5 --------------------------------- ARTICLE II CONDITIONS TO CLOSING ................................ 5 --------------------- 2.1 Conditions to Dade's Obligations ..................... 5 -------------------------------- 2.2 Conditions to Hoechst's Obligations .................. 9 ----------------------------------- ARTICLE III COVENANTS PRIOR TO CLOSING ........................... 12 -------------------------- 3.1 General .............................................. 12 ------- 3.2 Affirmative Covenants of Hoechst ..................... 12 -------------------------------- 3.3 Affirmative Covenants of Dade ........................ 14 ----------------------------- 3.4 Negative Covenants of Hoechst ........................ 15 ----------------------------- 3.5 Negative Covenants of Dade ........................... 15 -------------------------- 3.6 Exclusivity .......................................... 15 ----------- 3.7 Antitrust Regulatory Approvals ....................... 16 ------------------------------ 3.8 Public Announcements ................................. 16 -------------------- 3.9 Approval Procedure ................................... 16 ------------------ ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HOECHST ............ 17 ----------------------------------------- 4.1 Organization and Corporate Power ..................... 17 -------------------------------- 4.2 Subsidiaries and Affiliates .......................... 18 --------------------------- 4.3 Capital Stock of Hoechst Subsidiary .................. 18 ----------------------------------- 4.4 Authority of Hoechst ................................. 18 -------------------- 4.5 No Breach ............................................ 19 --------- 4.6 Financial Statements ................................. 19 -------------------- 4.7 Product and Service Warranty; Product Recall ......... 20 -------------------------------------------- 4.8 No Material Adverse Change ........................... 20 -------------------------- 4.9 Absence of Certain Developments ...................... 20 ------------------------------- 4.10 Real Property ........................................ 22 ------------- 4.11 Business Assets ...................................... 23 --------------- 4.12 Tax Matters .......................................... 24 ----------- 4.13 Absence of Undisclosed Liabilities ................... 25 ---------------------------------- -i- 4.14 Contracts and Commitments ............................ 25 ------------------------- 4.15 Proprietary Rights ................................... 27 ------------------ 4.16 Litigation ........................................... 29 ---------- 4.17 Brokerage ............................................ 29 --------- 4.18 Employees ............................................ 29 --------- 4.19 Intercompany Services ................................ 30 --------------------- 4.20 Employee Benefit Plans ............................... 30 ---------------------- 4.21 Insurance ............................................ 30 --------- 4.22 Compliance with Laws; Permits; Certain Operations .... 31 ------------------------------------------------- 4.23 Environmental and Safety Matters ..................... 31 -------------------------------- 4.24 Officers and Directors; Bank Accounts ................ 32 ------------------------------------- 4.25 Investment Representations of Hoechst ................ 33 ------------------------------------- 4.26 Restructuring Documents .............................. 33 ----------------------- 4.27 Closing Date ......................................... 33 ------------ ARTICLE V REPRESENTATIONS AND WARRANTIES OF DADE ............... 33 -------------------------------------- 5.1 Organization and Corporate Power ..................... 33 -------------------------------- 5.2 Subsidiaries and Affiliates .......................... 34 --------------------------- 5.3 Capital Stock of Dade Entities ....................... 34 ------------------------------ 5.4 Authority of Dade .................................... 34 ----------------- 5.5 No Breach ............................................ 34 --------- 5.6 Financial Statements ................................. 35 -------------------- 5.7 Product and Service Warranty; Product Recall ......... 35 -------------------------------------------- 5.8 No Material Adverse Change ........................... 35 -------------------------- 5.9 Absence of Certain Developments ...................... 36 ------------------------------- 5.10 Real Property ........................................ 37 ------------- 5.11 Business Assets ...................................... 39 --------------- 5.12 Tax Matters .......................................... 39 ----------- 5.13 Absence of Undisclosed Liabilities ................... 40 ---------------------------------- 5.14 Contracts and Commitments ............................ 40 ------------------------- 5.15 Proprietary Rights ................................... 42 ------------------ 5.16 Litigation ........................................... 43 ---------- 5.17 Brokerage ............................................ 44 --------- 5.18 Employees ............................................ 44 --------- 5.19 Employee Benefit Plans ............................... 44 ---------------------- 5.20 Insurance ............................................ 44 --------- 5.21 Compliance with Laws; Permits; Certain Operations .... 45 ------------------------------------------------- 5.22 Environmental and Safety Matters ..................... 45 -------------------------------- 5.23 Closing Date ......................................... 46 ------------ -ii- ARTICLE VI TERMINATION .......................................... 46 ----------- 6.1 Termination .......................................... 46 ----------- 6.2 Effect of Termination ................................ 47 --------------------- ARTICLE VII ADDITIONAL AGREEMENTS ................................ 48 --------------------- 7.1 Survival of Representations and Warranties ........... 48 ------------------------------------------ 7.2 General Indemnification .............................. 49 ----------------------- 7.3 Expenses ............................................. 54 -------- 7.4 Tax Matters .......................................... 55 ----------- 7.5 Confidentiality ...................................... 57 --------------- 7.6 Covenant Not to Compete .............................. 57 ----------------------- 7.7 Further Transfers; Further Assistance ................ 59 ------------------------------------- 7.8 Arbitration .......................................... 60 ----------- 7.9 Use of Current Supplies and the Hoechst Name ......... 61 -------------------------------------------- 7.10 Change of Structure .................................. 62 ------------------- 7.11 Transition Countries ................................. 62 -------------------- 7.12 U.S., Europe and Japan Restructuring Expenses ........ 64 --------------------------------------------- 7.13 Italy Manufacturing Facility Restructuring Expenses .. 64 --------------------------------------------------- 7.14 Break-Up Fee ......................................... 64 ------------ 7.15 SEP Liability ........................................ 64 ------------- 7.16 Proprietary Rights Filing Expenses ................... 64 ---------------------------------- 7.17 Assignment of Intercompany Accounts .................. 65 ----------------------------------- 7.18 Option Agreements .................................... 65 ----------------- 7.19 Holding Periods ...................................... 66 --------------- 7.20 Thai Business ........................................ 67 ------------- ARTICLE VIII EMPLOYEES AND EMPLOYEE BENEFITS ...................... 67 ------------------------------- 8.1 Employees ............................................ 67 --------- 8.2 Employee Compensation and Benefits ................... 67 ---------------------------------- 8.3 Pension Plans ........................................ 70 ------------- 8.4 Hoechst Savings Plan ................................. 71 -------------------- 8.5 COBRA ................................................ 71 ----- 8.6 U.S. and Canadian Retiree Medical Plan ............... 72 -------------------------------------- 8.7 Payment by Hoechst ................................... 72 ------------------ 8.8 InfraServ Employees .................................. 72 ------------------- ARTICLE IX MISCELLANEOUS ........................................ 72 ------------- 9.1 Amendment and Waiver ................................. 72 -------------------- 9.2 Financial Information ................................ 73 --------------------- 9.3 Notices .............................................. 73 ------- 9.4 Assignment ........................................... 75 ---------- 9.5 Severability ......................................... 76 ------------ -iii- 9.6 Captions ............................................. 76 -------- 9.7 Complete Agreement ................................... 76 ------------------ 9.8 Counterparts ......................................... 76 ------------ 9.9 GOVERNING LAW ........................................ 76 ------------- 9.10 No Strict Construction; Word Meanings ................ 77 ------------------------------------- 9.11 Specific Performance ................................. 77 -------------------- 9.12 No Third-Party Beneficiaries ......................... 77 ---------------------------- 9.13 Schedules ............................................ 77 --------- 9.14 Schedules and Exhibits ............................... 78 ---------------------- 9.15 Currency ............................................. 78 -------- 9.16 Inconsistencies ...................................... 78 --------------- 9.17 Delivery by Facsimile ................................ 78 --------------------- 9.18 Definition of Knowledge .............................. 78 ----------------------- 9.19 Definition of Affiliate .............................. 78 ----------------------- 9.20 Definition of Governmental Entity .................... 78 --------------------------------- 9.21 Definition of Person ................................. 79 -------------------- 9.22 Definition of Ordinary Course of Business ........... 79 ------------------------------------------ 9.23 Definition of Applicable Law ......................... 79 ---------------------------- 9.24 Definition of Business Day ........................... 79 -------------------------- 9.25 Definition of Indemnified Liability .................. 79 ----------------------------------- -iv- LIST OF EXHIBITS Exhibit A - Form of Warrant Exhibit B - Form of Deed Exhibit C - Restructuring Documents Exhibit D - 1996 Balance Sheet Exhibit E - INTENTIONALLY OMITTED Exhibit F - Registration Agreement Exhibit G - Stockholders Agreement Exhibit H - Cooperation Agreement Exhibit I - Hoechst Entities Exhibit J - Form of Opinion of Hoechst's Counsel Exhibits K1 and K2 - Amended Certificates of Incorporation Exhibit L - Form of Opinion of Dade's Counsel -v- LIST OF SCHEDULES Acquired Entities Capitalization Schedule Affiliated Employees Schedule Compliance Schedule Contracts Schedule Dade Capitalization Schedule Dade Compliance Schedule Dade Conflicts Schedule Dade Contracts Schedule Dade Developments Schedule Dade Employee Benefits Schedule Dade Encumbrances Schedule Dade Environmental and Safety Schedule Dade Insurance Schedule Dade Key Employee Schedule Dade Leased Real Property Schedule Dade Litigation Schedule Dade Owned Real Property Schedule Dade Product Recall Schedule Dade Proprietary Rights Schedule Dade Tax Schedule Dade Undisclosed Liabilities Schedule Dade Warranty Schedule Encumbrances Schedule Environmental and Safety Schedule Excluded Assets Schedule Expenditure Schedule Hoechst Conflicts Schedule Hoechst Developments Schedule Hoechst Employee Benefit Schedule Hoechst Insurance Schedule Hoechst Key Employee Schedule Indemnified Liabilities Schedule Intercompany Services Schedule Leased Real Property Schedule Litigation Schedule Officers, Directors and Bank Account Schedule Owned Real Property Schedule Pending Asset Sales Schedule Permits Schedule Product Recall Schedule -vi- Proprietary Rights Schedule SEP Schedule Tax Schedule U.S./Europe/Japan Restructuring Expenses Schedule Undisclosed Liabilities Schedule Warranty Schedule -vii- INDEX OF DEFINED TERMS Acquired Entities.......................... 18 Acquired Companies......................... 1 affiliate.................................. 78 Agreement.................................. 1 Ancillary Agreements....................... 10 Applicable Law............................. 79 Bain....................................... 11 Basic Percentage........................... 51 Business................................... 1 Business Assets............................ 23 Business Employees......................... 29 CERCLA..................................... 32 Class L Common............................. 2 Closing.................................... 2 closing agreement.......................... 25 Closing Date............................... 2 Code....................................... 24 Combination Documents...................... 10 Combined Entities.......................... 7 Commission................................. 8 Common Stock............................... 2 Confidentiality Agreement.................. 57 Consents................................... 19 Continued Employees........................ 67 Cooperation Agreement...................... 8 Credit Agreement........................... 8 Dade....................................... 1 Dade Entities............................. 33 Dade Behring Holdings, Inc................. 1 Dade Behring, Inc.......................... 1 Dade Business.............................. 14 Dade Employees............................. 44 Dade Financial Statements.................. 35 Dade Improvements.......................... 39 Dade Latest Balance Sheet.................. 35 Dade Leased Real Property.................. 38 Dade Leasehold Improvements................ 38 Dade Owned Real Property................... 37 Dade Parties............................... 49 Dade Permitted Liens....................... 39 -viii- Dade Proprietary Rights.................... 42 Dade Real Property......................... 38 Dade Real Property Leases.................. 38 Dade's Arbitrator.......................... 60 Defined Contribution Plans................. 71 Dispute.................................... 60 Draft Balance Sheet........................ 4 EC Merger Control.......................... 16 EC Merger Control Approval................. 9 EC Merger Control Decision................. 8 Employee List.............................. 30 Environmental and Safety Requirements...... 32 Environmental Permits...................... 31 ERISA...................................... 30 Excluded Stock............................. 1 FAS 87..................................... 70 Final Arbitration Determination............ 61 Financial Statements....................... 19 Firm....................................... 5 Firm Fees.................................. 5 GAAP....................................... 19 GmbH Company............................... 1 Goldman.................................... 11 Goodwill Termination Claims................ 13 Governmental Entity........................ 78 H-S-R...................................... 16 HDHC....................................... 1 Hoechst.................................... 1 Hoechst Entities.......................... 9,80 Hoechst Parties............................ 49 Hoechst Pension Plans...................... 70 Hoechst Percentage......................... 51 Hoechst Valuation.......................... 2 Hoechst's Arbitrator....................... 60 Improvements............................... 23 income Tax................................. 56 Indemnified Liability...................... 79 Indemnitee................................. 52 Indemnitor................................. 52 InfraServ.................................. 6 InfraServ Agreement........................ 6 Inventory.................................. 12 -ix- Italian Facility Shutdown.............. 64 Latest Balance Sheet................... 19 Leased Real Property................... 22 Leasehold Improvements................. 23 Liens.................................. 1 Losses................................. 49 Material Adverse Effect................ 6 Merger Regulation...................... 8 Messer................................. 6 Messer Supply Agreement................ 6 Net Assets............................. 3 Non-Competition Period................. 57 Notice of Arbitration.................. 60 Objection Notice....................... 4 ordinary course of business............ 79 Other Hoechst Entities................. 12 Owned Real Property.................... 22 PBO.................................... 70, 71 PBO Shortfall.......................... 71 Permits................................ 31 Permitted Liens........................ 23 Person................................. 79 Plans.................................. 30 Prime Rate............................. 3 Proprietary Rights..................... 27 Purchase Price......................... 2 Real Property.......................... 23 Real Property Leases................... 22 Registration Agreement................. 8 Reimbursement Calculation.............. 5 Restricted Persons..................... 58 Restrictive Covenants.................. 58 Restructuring Documents................ 2 SEP.................................... 64 Stock.................................. 1 Stockholders Agreement................. 8 Tax.................................... 24 Tax Returns............................ 24 Taxes.................................. 24 Termination Date....................... 47 Third Party Claim...................... 52 Third Party Distribution Agreements.... 8 -x- Transfer Taxes............................. 56 Transition Country......................... 62 Transition Employees....................... 63 Transition Period.......................... 62 Transition Services Agreement.............. 7 U.S. Company............................... 8 Valuation Drop Date........................ 2 Warrant.................................... 2 -xi- AGREEMENT AND PLAN OF COMBINATION --------------------------------- THIS AGREEMENT AND PLAN OF COMBINATION (this "Agreement"), is made and --------- entered into as of June 24, 1997, by and between Diagnostic Holdings, Inc., a Delaware corporation ("Dade"), and Hoechst AG, a German corporation ("Hoechst"). ---- ------- Each of Hoechst and Dade possess substantial expertise, know-how, skilled personnel, facilities and organization relating to the business of developing, manufacturing and marketing in vitro diagnostic equipment, reagents, consumable supplies and services worldwide. Hoechst and certain of its subsidiaries currently operate the worldwide business of the research, development, manufacture, marketing, sale, distribution and service of human in vitro diagnostic equipment, reagents, consumable supplies and services (the "Business"). -------- As of the Closing, substantially all of the assets, properties, rights and obligations of the Business will be owned, directly or indirectly, by Behring Diagnostics GmbH (the "GMBH Company"), Hoechst Diagnostics Holding ------------ Corporation ("HDHC") and certain affiliates of Hoechst identified on the ---- Acquired Entities Capitalization Schedule to be acquired directly by Dade - ----------------------------------------- hereunder (collectively, the "Acquired Companies"). The issued and outstanding ------------------ stock of the Acquired Companies (other than the stock identified on the Acquired -------- Entities Capitalization Schedule as "Excluded Stock") is hereinafter - -------------------------------- -------------- collectively referred to as the "Stock." ----- Subject to the terms and conditions set forth herein, Dade and Hoechst desire to effect a combination of the Business with the business of Dade and its subsidiaries by Hoechst transferring the Stock to Dade in exchange for an equity interest in Dade. Following consummation of the combination, Dade shall change its name to "Dade Behring Holdings, Inc." and shall cause its wholly owned --------------------------- subsidiary, Dade International Inc., to change its name to "Dade Behring, Inc." ------------------ NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE I TRANSFER OF BUSINESS -------------------- 1.1 Transfer of Stock to Dade. On the terms and subject to the ------------------------- conditions set forth in this Agreement, Dade shall acquire from Hoechst, and Hoechst shall sell, transfer and deliver (or cause to be sold, transferred and delivered) to Dade on the Closing Date, the Stock, free and clear of all liens, mortgages, charges, security interests, encumbrances, and other restrictions of whatever nature ("Liens"). ----- 1.2 Consideration for Transfer of Stock to Dade. In consideration for ------------------------------------------- the Stock (the "Purchase Price"), Dade shall: (a) sell, transfer and deliver, -------------- free and clear of all Liens, to Hoechst 5,198,323 shares of Common Stock of Dade, par value $.01 per share ("Common Stock"), and 519,451 shares of Class L ------------ Common Stock, Series B, of Dade, par value $.01 per share ("Class L Common, --------------- Series B"), (b) issue to Hoechst a warrant (the "Warrant") in form and in - -------- ------- substance as set forth in Exhibit A attached hereto, initially exercisable into --------- 1,279,587 shares of Common Stock and 127,865 shares of Class L Common, Series B, and (c) transfer and deliver to Hoechst $100,000 in immediately available funds. 1.3 Closing Transactions. The closing of the transactions contemplated by -------------------- this Agreement and the other Combination Documents (the "Closing") shall take ------- place in New York, New York, at 6:00 p.m. New York time on July 31, 1997 or, if the conditions to the Closing as set forth in Article II have not been satisfied on or prior to such date, within 10 days following satisfaction of such conditions on a date mutually selected by Dade and Hoechst. The date and time of the Closing are referred to herein as the "Closing Date"; provided that, for ------------ -------- all purposes of this Agreement, the Closing shall be deemed to be effective as of the opening of business on the Closing Date; provided further that the -------- ------- ---- transfer of title of the issued and outstanding capital stock of the GMBH Company shall occur in Basel, Switzerland in the presence of an authorized Swiss notary immediately after the Closing pursuant to a deed in form and substance as set forth in Exhibit B. --------- 1.4 Certain Post-Execution Agreements. --------------------------------- (a) Hoechst and Dade shall in good faith discuss and shall use reasonable best efforts to reach an agreement on (i) a valuation of the Purchase Price and (ii) an allocation of such value among the Acquired Entities. If on or before the date that is 20 Business Days following the date on which representatives of Dade first meet with the Chief Financial Officer of Hoechst to discuss a valuation, the parties cannot agree on a valuation of the Purchase Price or allocation of such valuation, Hoechst shall deliver its valuation and allocation to Dade (the "Hoechst Valuation"). Within Five Business Days after ----------------- receipt of such valuation and allocation from Hoechst (the "Valuation Drop -------------- Date"), Dade shall either accept such valuation and allocation or terminate this agreement pursuant to Section 6.1(d) hereof. If Dade does not terminate this Agreement pursuant to Section 6.1(d) hereof by the Valuation Drop Date, the Hoechst Valuation shall be deemed to be the valuation of the Purchase Price and the related allocation of the Purchase Price for purposes of this Agreement. Dade and Hoechst agree upon determination of the allocation of the Purchase Price to adhere (and to cause their respective affiliates to adhere) to such allocations for tax reporting and accounting purposes. All allocations made pursuant to this Section 1.4 shall be binding upon the parties, their affiliates and each of their respective successors and assigns, and the parties and their affiliates shall report the transactions contemplated by the restructuring documents listed on the attached Exhibit C (the "Restructuring Documents") and --------- ----------------------- the Combination Documents in accordance with such allocations. -2- (b) Hoechst and Dade shall in good faith negotiate a limit (the "Consent Indemnity Limit") to the amount of the Loss in respect of the - ------------------------ Indemnified Liability specified in Section 9.25(a)(vi) for which Hoechst shall indemnify Dade. If on or before the Termination Date Hoechst and Dade cannot agree upon the Consent Indemnity Limit, either Dade or Hoechst may terminate this Agreement pursuant to Section 6.1(h) hereof. (c) Hoechst and Dade shall in good faith negotiate additional agreements with respect to the level of capital expenditures for the Business since December 31, 1996 (the "Expenditure Agreement"). If by the Valuation Drop --------------------- Date Hoechst and Dade cannot agree upon the Expenditure Agreement, Dade may terminate this Agreement pursuant to Section 6.1(i) hereof on the Valuation Drop Date. (d) Hoechst and Dade shall in good faith negotiate an agreement as to which additional stockholders' rights under the Stockholders Agreement shall be "Designation Rights" for purposes of Section 7.6(a). If Hoechst and Dade cannot reach agreement, Dade may terminate this Agreement after the Valuation Drop Date pursuant to Section 6.1(j) hereof. 1.5 Net Asset Adjustment. Hoechst agrees that if Net Assets are less -------------------- than $229.7 million on the Closing Date, then Hoechst shall pay Dade, within five Business Days after the determination of Net Assets (as set forth in Section 1.6 below), the difference between such amounts. Dade agrees that if Net Assets are greater than $229.7 million on the Closing Date, then Dade shall pay Hoechst, within five Business Days after the determination of Net Assets (as set forth in Section 1.6 below), the difference between such amounts. Any payment made under this Section 1.5 shall be made, together with interest thereon from the Closing Date to the date of payment at the prime rate announced by Bankers Trust Company from time to time (the "Prime Rate"), in immediately ---------- available funds by wire transfer. Exhibit D attached hereto contains certain --------- balance sheet categories set forth on the Latest Balance Sheet (as defined in Section 4.6(a) hereto). As used herein, "Net Assets" means the excess of the ---------- assets of the Business appropriately included within the asset categories set forth under the "To JV" heading (and above the line entitled "Working Capital (for Net Asset Test)") on Exhibit D, less the liabilities of the Business --------- appropriately included within the liability categories set forth under such "To JV" heading (and above the line entitled "Working Capital (for Net Asset Test)") on Exhibit D (other than "Restructuring Costs" and "Income Taxes Payable"), less --------- any long-term liabilities of the Business, determined in each case as of the opening of business on the Closing Date, in United States Dollars at the conversion rates used to prepare the Latest Balance Sheet, on a consolidated basis in accordance with U.S. GAAP and on a basis consistent with the Latest Balance Sheet. Without limiting the generality of the foregoing, Hoechst and Dade agree that the audit procedures, scope of audit and materiality thresholds (with respect to both individual items and cumulative reporting) utilized in the preparation of the Latest Balance Sheet (and as disclosed to Dade's accountants) will be utilized in the determination of Net Assets. In calculating Net Assets, (A) the amount of any liability or other obligation (whether accrued, absolute or contingent, whether known or unknown or whether due or to become due) for which Hoechst is obligated to pay under this Agreement (or under any agreement contemplated by -3- Section 7.2(g)) shall be excluded from the calculation of Net Assets, (B) it shall be assumed that the options set forth in Sections 7.18(a) and 7.18(b) have been exercised (i.e., the pro forma effect of transfers under such options shall have been taken into account by including the historical recorded accounts in determining Net Assets) and the purchase prices therefor have been paid (i.e., Net Assets shall be reduced by the amount of such purchase price), (C) the purchase price for the transaction set forth in Section 7.20 shall be deducted from Net Assets (unless the amount of such purchase price shall have been previously paid by Hoechst to Dade in cash) and the related Thai assets and liabilities shall be excluded from Net Assets (except that any such liabilities (of the kind used in calculating Net Assets) in excess of current assets (of the kind used in calculating Net Assets) shall reduce Net Assets), and (D) with respect to 1997 target bonuses (aggregating approximately $6.1 million for fiscal 1997), the liability reflected in the determination of Net Assets shall be (x) 75% of such amount if the Closing occurs prior to October 1, 1997, or (y) a pro rata portion of such amount (based on days elapsed during 1997 on or prior to the Closing) if the Closing occurs on or after October 1, 1997; provided that, if the Closing occurs after December 31, 1997, the -------- liabilities reflected in the determination of Net Assets shall equal the aggregate 1997 target bonuses, plus a pro rata portion of such amount for the portion of 1998 on or prior to the Closing, less any payment of 1997 target bonuses made in 1998 but prior to the Closing. Notwithstanding the foregoing, the "$229.7 million" amount set forth in this Section shall be increased by the amount (if any, but in no event by more than $11.48 million in the aggregate) of any liability or liabilities included in the determination of such $229.7 million target and which would be an Indemnified Liability (or for which Hoechst would otherwise be obligated to pay hereunder (or under any agreement contemplated by Section 7.2(g)), including pursuant to Sections 7.12 and 7.13 hereunder) if such liability or liabilities existed on the Closing Date; provided that, in no event, shall the $229.7 million target exceed $241.18 - -------- million. 1.6 Post-Closing Determination. Within 90 days after the Closing Date, -------------------------- Hoechst and its auditors will prepare and deliver to Dade an audited calculation of Net Assets determined in accordance with Section 1.5 and from the audited consolidated balance sheet of the Business as of the Closing Date (the "Draft ----- Balance Sheet"). Dade and its auditors shall, during the preparation of the - ------------- Draft Balance Sheet by Hoechst and during the period for which an objection may be filed pursuant to the next sentence, have reasonable access to Hoechst, and Hoechst and its auditors shall make available to Dade and its auditors all records and work papers used in preparing the Draft Balance Sheet. If Dade disagrees with the computation of Net Assets reflected on the Draft Balance Sheet, Dade may, within 60 days after receipt of the Draft Balance Sheet, deliver a written notice (an "Objection Notice") to Hoechst setting forth Dade's ---------------- calculation of Net Assets; provided that the running of such period will be -------- suspended during any period that Hoechst or any of its subsidiaries fail to comply with its obligations set forth in the immediately preceding sentence. If an Objection Notice is not delivered within such time period, then the amount of Net Assets set forth in the Draft Balance Sheet shall be conclusive and binding upon Dade and Hoechst and their respective affiliates. Dade and Hoechst will use reasonable efforts to resolve any disagreements as to the computation of Net Assets, but if they do not obtain a final resolution within 30 days after Hoechst has received the Objection Notice, Dade and Hoechst will jointly retain an independent accounting firm (the -4- "Firm") to resolve any remaining disagreements. If Dade and Hoechst are ---- unable to agree on the choice of the Firm, the Firm shall be Deloitte & Touche LLP. Dade and Hoechst shall direct the Firm to render a determination within 30 days of its retention and Dade, Hoechst and their respective employees shall cooperate with the Firm during its engagement. The Firm shall consider only those items and amounts in the Draft Balance Sheet set forth in the Objection Notice that Dade and Hoechst are unable to resolve. The Firm's determination shall be based on the definition of Net Assets included herein. The determination of the Firm will be conclusive and binding upon Dade and Hoechst and their respective affiliates. The fees and expenses ("Firm Fees") of the --------- Firm shall be paid by Dade, subject to the reimbursement by Hoechst as set forth in the next sentence. If any of the items set forth in the Objection Notice and submitted to the Firm for determination are resolved in favor of Dade, Hoechst shall promptly reimburse Dade by wire transfer of immediately available funds in an amount equal to (the "Reimbursement Calculation") (if and only if a positive -------------------------- number) the Firm Fees multiplied by a factor equal to A minus B plus twice ----- ---- A multiplied by B; where "A" is the quotient obtained by dividing the amount ---------- of the items in the Objection Notice resolved by the Firm in favor of Dade by the total amount of such items, and "B" is the Hoechst Percentage. If the Reimbursement Calculation yields a negative number, Dade shall promptly pay Hoechst by wire transfer of immediately available funds in the absolute amount of such Reimbursement Calculation. 1.7 Certain Related Party Receivables. Immediately after the Closing --------------------------------- (and after taking into account the actions contemplated by Section 3.2(h) hereof), Dade and Hoechst acknowledge and agree that the Acquired Companies will own an aggregate of $26.9 million face amount of "accounts receivable from owner" and "accounts receivable from related parties" (as such terms are used in the Latest Balance Sheet referred to in Section 4.6 hereof). Within 30 days after the Closing, Hoechst shall pay (or cause to be paid) to HDHC or the U.S. Company the face amount of such receivable in immediately available funds by wire transfer. In no event shall such accounts receivable be taken into account in the calculations of Net Assets hereunder. ARTICLE II CONDITIONS TO CLOSING --------------------- 2.1 Conditions to Dade's Obligations. The obligation of Dade to -------------------------------- consummate the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions as of the Closing: (a) The representations and warranties set forth in Article IV hereof shall be true and correct at and as of the Closing Date as though then made and as though the Closing Date were substituted for the date of this Agreement throughout such representations and warranties (without taking into account any disclosures made by Hoechst to Dade pursuant to Section 3.2(j) below), other than such representations and warranties as are made as of a specific date, which shall be true -5- as of such date, except in each case as would not have a material adverse effect on the business, financial condition, operating results, assets or operations (a "Material Adverse Effect") of the Acquired Entities, taken as a whole; ----------------------- (b) Hoechst shall have performed (or caused to be performed) all of the covenants and agreements required to be performed (or caused to be performed) by it under this Agreement on or prior to the Closing Date, except in each case as would not have a Material Adverse Effect on the Acquired Entities, taken as a whole; provided that if Hoechst shall have failed to perform (or -------- cause to be performed) any such covenant or agreement intentionally or as a result of gross negligence (regardless of whether or not resulting in any Material Adverse Effect), such failure shall have been cured prior to Closing; (c) Dade, Hoechst and their respective affiliates shall have received or obtained all Consents of, to, with or from Governmental Entities that are necessary for the consummation of the transactions contemplated by the Restructuring Documents and the Combination Documents or the operation of the Business following the Closing, designated in each case with an asterisk on the attached Dade Conflicts Schedule or the attached Hoechst Conflicts Schedule; ----------------------- -------------------------- (d) (i) Hoechst shall have transferred, or caused to be transferred, a partnership interest in InfraServ GmbH & Co. Marburg KG ("InfraServ") to the --------- GMBH Company, (ii the GMBH Company shall have entered into an agreement with InfraServ (the "InfraServ Agreement"), whereby the Business will be provided ------------------- with, on terms reasonably satisfactory to Dade, site management, environmental management and infrastructural services under contract to the Marburg site, which agreement shall include (x) except for increases to be agreed upon based on increases in costs and expenses (including cost increases as a result of inflation and third-party pass-throughs), requisite services at fairly allocated costs not to exceed 1996 historical costs (provided that historical costs shall -------- be appropriately reduced by all costs and expenses attributable to or associated with any employees who have been transferred to the Acquired Entities from other Hoechst affiliates), (y) flexible and reasonable termination provisions for each service and (z) indemnification by Hoechst for liabilities arising out of Dade's limited partnership interest in InfraServ, (ii the InfraServ Agreement shall be in full force and effect as of the Closing Date and (iv Hoechst shall have, in good faith, considered any alternative structures to the InfraServ arrangement as proposed by Dade, provided that the negotiations shall include the consideration of services that may be required to be provided and taken as long as the GMBH Company remains on the Marburg site (e.g., fire protection and security) and provisions to prevent the cost of services from becoming unreasonable to either party; (e) The GMBH Company and the Messer Group ("Messer") shall have ------ entered into a long-term supply agreement ("Messer Supply Agreement"), on terms ----------------------- reasonably satisfactory to Dade, with respect to the instrument requirements of the Business, that will include (i) reasonable pricing not to exceed 1996 historical costs (except for increases to be agreed upon based on increases in costs and expenses (including cost increases as a result of inflation and third- party pass- -6- throughs), and provided that historical costs shall be appropriately reduced -------- by all costs and expenses attributable to or associated with employees who have been transferred to the Acquired Entities from other Hoechst affiliates), (ii a right of first offer to purchase the diagnostics instrument manufacturing operations of Messer at Schwalbach on terms to be negotiated, and (ii flexible and reasonable termination provisions; Hoechst shall have made a good faith effort to assist Dade in negotiating an option (in the Messer Supply Agreement) to purchase the instrument manufacturing operations upon termination of the Messer Supply Agreement; and the Messer Supply Agreement shall be in full force and effect as of the Closing Date, provided the negotiations shall include the consideration of provisions to prevent the pricing from becoming unreasonable to either party; (f) No suit, action or other proceeding, or injunction, order or judgment relating thereto, shall be, in the case of any suit, action or other proceeding, or injunction, order or judgment relating thereto, brought by a governmental authority, threatened or, in any case, pending before any court or other Governmental Entity in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with the transactions contemplated by the Restructuring Documents or the Combination Documents, and that would be reasonably likely to have a Material Adverse Effect on the Dade Entities and the Acquired Entities, taken as a whole after giving effect to the transactions contemplated hereby (the "Combined Entities"); provided that Dade shall use its ----------------- -------- reasonable best efforts to have such suit, action or proceeding dismissed, and to resist the entry of any injunction, order or judgment, or, if entered, to have such injunction, order or judgment vacated; (g) Dade and its affiliates shall have entered into one or more transition services agreements (the "Transition Services Agreement"), on terms ----------------------------- reasonably satisfactory to Dade, that shall provide for services that, if utilized by Dade, would enable the Business to operate on a stand-alone basis and shall contain, among other things, (x) pricing not to exceed 1996 historical costs (except for increases to be agreed upon based on increases in costs and expenses (including cost increases as a result of inflation and third-party pass-throughs), and provided that historical costs shall be appropriately -------- reduced by all costs and expenses attributable to or associated with any employees who have been transferred to the Acquired Entities from other Hoechst affiliates) and (y) flexible and reasonable termination provisions, with the expectation that Dade shall not require transition services such as MIS support, payroll and human resources support and other similar corporate services for longer than 24 months after the Closing; and the Transition Services Agreement shall be in full force and effect as of the Closing Date; (h) The GMBH Company and Behringwerke AG shall have entered into a trademark license agreement (the "Trademark License Agreement") on terms --------------------------- reasonably satisfactory to Dade, that shall provide for a royalty-free license to the GMBH Company for the use of the "Behring" name in the field of human in vitro diagnostics, and the Trademark License Agreement shall be in full force and effect as of the Closing Date; -7- (i) Hoechst shall have entered into an amended and restated registration rights agreement in form and in substance as set forth on Exhibit F --------- attached hereto (the "Registration Agreement") and the Registration Agreement ---------------------- shall be in full force and effect as of the Closing Date; (j) Hoechst shall have entered into an amended and restated stockholders agreement in form and in substance as set forth on Exhibit G --------- attached hereto (the "Stockholders Agreement") and the Stockholders Agreement ---------------------- shall be in full force and effect as of the Closing Date; (k) Hoechst shall have entered into a cooperation and collaboration agreement in form and in substance as set forth on Exhibit H attached hereto --------- (the "Cooperation Agreement") and the Cooperation Agreement shall be in full --------------------- force and effect as of the Closing Date; (l) That certain Credit Agreement, dated as of May 7, 1996 (the "Credit Agreement"), among Dade, Dade International, Inc., various lending - ----------------- institutions and Bankers Trust Company, as Agent, as amended prior to the date hereof, and related documents thereto shall have been amended in a manner reasonably satisfactory to Dade; (m) Subsequent to the date hereof, Hoechst shall not have received notice that 40 or more employees covered by the SEP (as defined in Section 7.15 hereof) whose positions are Band 32 or higher under the SEP (as identified in a list previously provided to Dade) have (i) voluntarily terminated their employment and (ii made a claim for benefits under the SEP; provided that -------- Hoechst shall not have proven in an arbitration proceeding pursuant to Section 7.8 that the departure of such employees would not be reasonably likely to have a Material Adverse Effect on the United States operations of the Business; (n) The Behring Diagnostics, Inc., a wholly owned subsidiary of HDHC (the "U.S. Company"), and/or the GMBH Company shall have entered into ------------ distribution agreements ("Third Party Distribution Agreements"), on terms and ----------------------------------- conditions reasonably satisfactory to Dade, for the distribution of the Business products in South Korea and South Africa, and the Third Party Distribution Agreements shall be in full force and effect as of the Closing Date; (o) The U.S. Company and Hoechst Corporation shall have entered into an amended Sublease Agreement (the "San Jose Sublease") whereby the U.S. Company ----------------- shall have all rights and obligations of Hoechst Corporation under a certain Lease Agreement, dated July 1, 1996 (the San Jose Lease"), by and between State -------------- of California Public Employees' Retirement System and Hoechst Corporation; (p) Without limiting the generality of Section 2.1(c) above, (i) the Commission of the European Communities (the "Commission") shall have issued a ---------- decision (the "EC Merger Control Decision") pursuant to (A) Article 6(1)(b) or -------------------------- Article 8(2) of Council Regulation (EEC) No. 4064/89 of December 23, 1989 on the control of concentrations between undertakings (the "Merger Regulation") ----------------- declaring the transaction contemplated hereunder compatible with the common market -8- without attaching any conditions or obligations to this decision or (B) Article 6(1)(a) of the Merger Regulation declaring that the transactions contemplated hereunder do not fall within the scope of the Merger Regulation or (ii no EC Merger Control Decision shall have been issued by the Commission pursuant to Article 6(1)(c) or Article 8(3) of the Merger Regulation and no EC Merger Control Decision shall be required to consummate the transactions contemplated hereunder pursuant to Article 10(b) of the Merger Regulation (subsections (i) and (ii) collectively referred to herein as the "EC Merger --------- Control Approval"); and - ---------------- (q) At the Closing, Hoechst shall have delivered to Dade all of the following: (i) a certificate signed by Hoechst, dated the date of the Closing, stating that the conditions specified in subsections 2.1(a), (b), (c), (d), (f) and (n) have been satisfied as of the Closing; (ii) certificates or other evidence of transfer reasonably satisfactory to Dade representing all of the Stock, duly endorsed in blank or accompanied by stock powers duly endorsed in blank in proper form for transfer, with appropriate transfer stamps, if any, affixed thereto; (iii) to the extent required to consummate the transaction contemplated by the Restructuring Documents and/or the Combination Documents, certified copies of resolutions by the boards of directors of each of Hoechst, the Acquired Entities and the other affiliates of Hoechst listed on Exhibit I attached hereto (collectively, the "Hoechst Entities") --------- ---------------- and by the stockholders of each Hoechst Entity authorizing and approving the Restructuring Documents and/or the Combination Documents to which such Hoechst Entity is a party and the transactions contemplated hereby or thereby; (iv) one or more opinions of counsel, containing the opinions set forth on Exhibit J attached hereto; and --------- (v) such other documents or instruments as are required to be delivered at the Closing pursuant to the terms hereof or that Dade reasonably requests prior to the Closing Date to effect the transactions contemplated hereby. 2.2 Conditions to Hoechst's Obligations. The obligation of Hoechst to ----------------------------------- consummate the transactions contemplated by this Agreement is subject to the satisfaction of the following conditions as of the Closing: (a) The representations and warranties set forth in Article V hereof shall be true and correct at and as of the Closing Date as though then made and as though the Closing Date were substituted for the date of this Agreement throughout such representations and warranties (without taking into account any disclosures made by Dade to Hoechst pursuant to Section 3.3(g) below), -9- other than such representations and warranties as are made as of a specific date, which shall be true and correct as of such date, except in each case as would not have a Material Adverse Effect on the Dade Entities, taken as a whole; (b) Dade shall have performed all of the covenants and agreements required to be performed by it under this Agreement on or prior to the Closing Date, except in each case as would not have a Material Adverse Effect on the Dade Entities, taken as a whole; provided that, if Dade shall have failed to -------- perform (or cause to be performed) any such covenant or agreement intentionally or as a result of gross negligence (regardless of whether or not resulting in any Material Adverse Effect), such failure shall have been cured prior to Closing; (c) Dade, Hoechst and their respective affiliates shall have received or obtained all Consents of, to, with or from Governmental Entities that are necessary for the consummation of the transactions contemplated by the Restructuring Documents and the Combination Documents or the operation of the Business following the Closing, designated in each case with an asterisk on the attached Dade Conflicts Schedule or the attached Hoechst Conflicts Schedule; ----------------------- -------------------------- (d) No suit, action or other proceeding, or injunction, order or judgment relating thereto, shall be, in the case of any suit, action or other proceeding, or injunction, order or judgment relating thereto, brought by a governmental authority, threatened or, in any case, pending before any court or other Governmental Entity in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with the transactions contemplated by the Combination Documents, and that would reasonably be likely to have a Material Adverse Effect on the Combined Entities; provided that Hoechst shall -------- use its reasonable best efforts to have such suit, action or proceeding dismissed, and to resist the entry of any injunction, order or judgment, or, if entered, to have such injunction, order or judgment vacated; (e) Dade and the other parties hereto (other than Hoechst) shall have entered into the Stockholders Agreement, the Cooperation Agreement, the Transition Services Agreement, the Registration Rights Agreement, the Trademark License Agreement, the InfraServ Agreement and the Messer Supply Agreement (collectively, the "Ancillary Agreements" and, together with this Agreement and -------------------- the other agreements contemplated hereby and thereby, other than the Restructuring Documents, the "Combination Documents"), and the Transition --------------------- Services Agreement, the InfraServ Agreement, the Messer Supply Agreement and the Trademark License Agreement shall have terms and conditions that are reasonably satisfactory to Hoechst, and the Ancillary Agreements shall be in full force and effect as of the Closing Date; (f) (i) Dade shall have amended its Certificate of Incorporation and shall have caused Dade International, Inc. to amend its Certificate of Incorporation in form and in substance as set forth in Exhibit K1 and Exhibit ---------- ------- K2, respectively, attached hereto in order to (A) authorize the issuance of additional capital stock by Dade in an amount sufficient to consummate the transactions contemplated hereby, assuming the Warrant was exercised immediately after the Closing Date, -10- (B) change the name of the Company to "Dade Behring Holdings, Inc." and (C) change the name of Dade International, Inc. to "Dade Behring, Inc." and (ii such Certificates of Incorporation, as amended thereby, shall be in full force and effect as of the Closing and shall not have been further modified in any respect; (g) The representations and warranties made by various entities controlled by Bain Capital, Inc. ("Bain") and Goldman, Sachs Co. ("Goldman") in ---- ------- the letter agreements delivered concurrently herewith shall be true and correct, and Bain and Goldman shall not have breached any obligation contained in such letter agreements; (h) The U.S. Company and Hoechst Corporation shall have entered into the San Jose Sublease whereby the U.S. Company shall have all rights and obligations of Hoechst Corporation under the San Jose Lease. (i) Without limiting the generality of Section 2.2 (c) above, the Commission shall have issued the EC Merger Control Approval; and (j) At the Closing, Dade shall have delivered to Hoechst all of the following: (i) a certificate signed by Dade, dated the date of the Closing, stating that the conditions specified in subsections 2.2(a), (b), (c) and (d) have been satisfied as of the Closing; (ii) certified copies of resolutions by the board of directors and stockholders of Dade authorizing and approving this Agreement and the transactions contemplated hereby on behalf of Dade; (iii) certificates representing all of the Common Stock and the Class L Common, Class B; (iv) the Warrant duly executed by Dade; (v) one or more opinions of Dade's counsel, containing the opinions set forth on Exhibit L attached hereto; and --------- (vi) such other documents or instruments as are required to be delivered at the Closing pursuant to the terms hereof or that Hoechst reasonably requests prior to the Closing Date to effect the transactions contemplated hereby. -11- ARTICLE III COVENANTS PRIOR TO CLOSING -------------------------- 3.1 General. Subject to the terms of this Agreement, each party shall use ------- its reasonable best efforts to cause the Closing to occur, including reasonable best efforts to cause each of the conditions of the other party hereto set forth in Article II to be satisfied. 3.2 Affirmative Covenants of Hoechst. Except as otherwise expressly -------------------------------- provided herein or as expressly consented to in writing by Dade, prior to the Closing, Hoechst shall and shall cause each of the other Hoechst Entities (the "Other Hoechst Entities") to: - ----------------------- (a) except for transactions contemplated by this Agreement, conduct the Business only in the ordinary course of business, including, without limitation, (i) maintenance and repair of the Business Assets, (ii) maintenance of the levels of supplies, spare parts and inventories, raw materials, packaging materials, work-in-process, goods consigned to third parties, finished goods (collectively, the "Inventory") at customary operating levels consistent with --------- past practices, (ii) maintenance of consistent credit and collection policies and procedures with respect to billing and collection of trade receivables, (iv) compliance with all material legal requirements and contractual obligations applicable to it with respect to the Business and (v) maintenance and protection of all Proprietary Rights so as not to affect adversely the validity or enforceability thereof; (b) use reasonable efforts to preserve intact its business organization and goodwill and keep available the services of its officers and employees and maintain satisfactory relationships with suppliers, customers and others having business relationships with it with respect to the Business; (c) make all reasonable efforts to afford, and cause its officers, directors, employees, attorneys, accountants and other agents to afford, to Dade and its accounting, legal and other representatives, as well as their respective officers, employees, affiliates, advisors, and other agents, reasonable access upon reasonable notice and at all reasonable times to its personnel and to business, financial, legal, tax, environmental, compensation and other data and information concerning the Business (other than such information as may be reasonably determined by Hoechst to be competitively sensitive information after consultation with Dade regarding the general nature thereof); (d) maintain its books, accounts and records with respect to the Business consistent with the custom and practice used in the preparation of the financial statements described in Section 4.6 below; (e) use reasonable best efforts to maintain in full force and effect the existence of all Proprietary Rights and Permits of the Business and obtain all necessary renewals thereof; -12- (f) make such transfers, and take such other actions, as are necessary so that the transactions contemplated by the Restructuring Documents are consummated pursuant to the terms thereof; (g) give all notices and use reasonable best efforts to obtain all Consents necessary for Hoechst and its affiliates to consummate the transactions contemplated by the Restructuring Documents and the Combination Documents or to permit the Business and the Business Assets to be operated by Dade and its affiliates after the Closing as the Business is currently being operated; provided that, notwithstanding the foregoing, Hoechst shall provide copies to - -------- Dade for its review of all documentation necessary to obtain all such Consents (other than Consents under H-S-R) prior to submitting such documentation to the appropriate Persons; (h) (i) assign all intercompany accounts between the Acquired Entities on the one hand, and Hoechst and its Subsidiaries (other than the Acquired Entities) on the other hand, to the GMBH Company and HDHC as contemplated by Section 7.17 hereunder and as provided in the Restructuring Documents, (ii terminate and eliminate all intercompany agreements and arrangements except for (A) those agreements and arrangements expressly contemplated in this Agreement, (B) those agreements and arrangements between and among the Acquired Entities and (C) $26.9 million of intercompany receivables as contemplated by Section 1.7 hereunder; and (ii forgive and forever waive any claim ("Goodwill Termination Claims") to any compensation or --------------------------- other amounts payable in respect of goodwill or otherwise to Hoechst (or its affiliates) in connection with the termination or elimination of such agreements and arrangements pursuant to Section 89(b) of the German Commercial Code (or application by analogy of the principles of such statute); (i) promptly inform Dade in writing if Hoechst obtains Knowledge of any variances from the representations and warranties contained in Article IV hereof or any breach of any covenant or agreement hereunder that, in each case, would cause a condition to Closing not to be satisfied; (j) prepare by July 31, 1997 a schedule of (i) the specific financial information with respect to the Business that Hoechst shall prepare and deliver (or cause to be prepared and delivered) to Dade pursuant to the Transition Services Agreement or other agreements and (ii the timing for delivery thereof; (k) use reasonable best efforts to follow the guidelines set forth on the attached SEP Schedule; and ------------ (l) except as otherwise agreed by the parties, discharge all liabilities and obligations of all Acquired Entities relating to indebtedness for borrowed money and all guarantees of any of the foregoing (whether for principal, interest, penalties, fees, expenses or otherwise). -13- 3.3 Affirmative Covenants of Dade. Except as otherwise expressly provided ----------------------------- herein or as expressly consented to in writing by Hoechst, prior to the Closing, Dade shall and cause its affiliates to: (a) except for the transactions contemplated by this Agreement, conduct the business of Dade and the Dade Entities (the "Dade Business") only in ------------- the ordinary course of business, including, without limitation, (i) maintenance and repair of the Dade Assets (as defined in Section 5.11 hereof); (ii maintenance of the levels of its Inventory, supplies and spare parts at customary operating levels consistent with past practice, (ii maintenance of consistent credit and collection policies and procedures with respect to billing and collection of trade receivables, (iv compliance with all material legal requirements and contractual obligations applicable to it and (v) maintenance and protection of all Dade Proprietary Rights so as not to affect adversely the validity or enforceability thereof; (b) use reasonable efforts to preserve intact its business organization and goodwill and keep available the services of its officers and employees and maintain satisfactory relationships with suppliers, customers and others having business relationships with it; (c) make all reasonable efforts to afford, and cause its officers, directors, employees, attorneys, accountants and other agents to afford, to Hoechst and its accounting, legal and other representatives, as well as their respective officers, employees, affiliates, advisors, and other agents, reasonable access upon reasonable notice and at all reasonable times to Hoechst's personnel and to business, financial, legal, tax, environmental, compensation and other data and information concerning the Dade Business (other than such information as may be reasonably determined by Dade to be competitively sensitive information after consultation with Hoechst regarding the general nature thereof); (d) maintain its books, accounts and records consistent with past custom and practice; (e) use reasonable best efforts to maintain in full force and effect the existence of all Dade Proprietary Rights and Permits and obtain all necessary renewals thereof; (f) give all notices and use reasonable best efforts to obtain all Consents necessary for Dade and its affiliates to consummate the transactions contemplated by the Combination Documents or to permit the Dade Business and the Dade Assets to be operated by Dade and its affiliates after the Closing as the Dade Business is currently being conducted; (g) promptly inform Hoechst in writing if Dade obtains Knowledge of any variances from the representations and warranties contained in Article V hereof or any breach of any covenant or agreement hereunder that, in each case, would cause a condition to Closing not to be satisfied; and -14- (h) prepare by July 15, 1997 a schedule of (i) the specific financial information with respect to the Business that Hoechst shall prepare and deliver (or cause to be prepared and delivered) to Dade pursuant to the Transition Services Agreement or other agreements and (ii) the timing for delivery thereof. 3.4 Negative Covenants of Hoechst. Except as otherwise expressly provided ----------------------------- herein or as expressly consented to in writing by Dade, prior to the Closing Date, Hoechst shall not and shall cause each Other Hoechst Entity not to: (a) except as expressly contemplated by this Agreement, take or omit to take any action that, individually or in the aggregate, could be reasonably anticipated to have a Material Adverse Effect upon the Business; or (b) take any action referred to in Section 4.9 (other than Sections 4.9(d) and 4.9(e)) or take any action or omit to take any action that would otherwise require disclosure pursuant to Section 3.2(i) hereof as if each representation and warranty were remade as of the time of such action or omission, except (i) as expressly authorized herein, or (ii upon prior or concurrent written approval of Dade. 3.5 Negative Covenants of Dade. Except as otherwise expressly provided -------------------------- herein or as expressly consented to in writing by Hoechst, prior to the Closing Date, Dade shall not and shall cause each other Dade Entity not to: (a) except as expressly contemplated by this Agreement, take or omit to take any action that, individually or in the aggregate, could be reasonably anticipated to have a Material Adverse Effect upon the Dade Business; (b) take any action referred to in Section 5.9 (other than Section 5.9(d) and 5.9(e)) or take any action or omit to take any action that would otherwise require disclosure pursuant to Section 3.3(g) hereof as if each representation and warranty were remade as of the time of such action or omission, except (i) as expressly authorized herein, or (ii upon prior or concurrent written approval of Hoechst; or (c) (i) pay any dividends or distribute or make any other payment of cash or other property with respect to its capital stock other than dividends on Dade's Preferred Stock, par value $.01 per share, in the ordinary course of business or (ii except for payments contemplated by Section 7.3(b) hereof, pay any amount to Bain or Goldman or their respective affiliates in excess of the amounts permitted in Section 8.08 of the Credit Agreement as in effect on May 7, 1996. 3.6 Exclusivity. Until the consummation of the transactions contemplated ----------- by the Combination Documents or termination of this Agreement in accordance with the terms hereof, each of Dade and Hoechst agrees that neither it nor any of its respective subsidiaries nor any of its or their -15- respective representatives, directors, officers or affiliates will (a) discuss or pursue a possible joint venture, sale or other disposition of any of the Business Assets or the Dade Assets (other than sales of assets in the ordinary course of business and the assets listed on the Pending Asset Sales Schedule) or ---------------------------- the Business or any interest therein with any other party or provide any information to any other party in connection therewith or (b) except (i) to the extent permitted or required by Section 3.8, (ii to any advisors to Dade or Hoechst or (ii to any of lenders of Dade or their respective advisors, disclose to any other party the contents of any of the Combination Documents. 3.7 Antitrust Regulatory Approvals. Dade and Hoechst shall each file or ------------------------------ cause to be filed with each Governmental Entity any notifications required to be filed under any Applicable Laws that are applicable to the transactions contemplated hereby. Hoechst shall promptly pay the filing fees of Dade and the Acquired Companies and their stockholders' respective filings. Dade and Hoechst shall use their best efforts to make such filings promptly (and in any event within 10 Business Days in the case of the initial filing under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended ("H-S-R"), and similar ----- applicable European Community merger control laws ("EC Merger Control")) ----------------- following the date hereof, to respond to any requests for additional information made by any applicable Governmental Entities and to cause the waiting periods under any such Applicable Laws to terminate or expire at the earliest possible date and to resist, at each of their respective cost and expense (including the institution or defense of legal proceedings), any assertion that the transactions contemplated hereby or thereby constitute a violation of applicable antitrust or competition laws, all to the end of expediting consummation of the transactions contemplated hereby and thereby. 3.8 Public Announcements. Except as the parties shall mutually agree, -------------------- Dade and Hoechst shall not issue any report, statement or press release or otherwise make any public statements with respect to this Agreement or the transactions contemplated hereby (other then the transactions under the Restructuring Documents), except as in the reasonable judgment of the party issuing or making such statements may be required by Applicable Law or in connection with the obligations of a publicly held, exchange-listed company (including any requirements of any stock exchange), in which case the party making such report, statement or press release shall (a) allow the other party at least five days to review and comment on such report, statement or press release prior to its issuance (except when such review is not practicable, and in such case, such review shall be as long as reasonably practicable) and (b) make reasonable efforts to accommodate the comments of the other party. 3.9 Approval Procedure. In the event that either party to this Agreement ------------------ desires to take any action that is otherwise prohibited by Section 3.2, 3.3, 3.4 or 3.5 hereunder, such party shall provide timely notice, which shall be no less than five Business Days prior to commencing such action, to the other party. Such notice shall be made by telecopier in accordance with the time requirements set forth in Section 9.3 (with receipt confirmed by telephone) to the persons set forth below. Consent to such action shall be deemed to have occurred if the requesting party shall not -16- have received a response within five Business Days after receipt of the notice described in this Section 3.9. If to Hoechst: -------------- Ken Forde Phone: (408) 239-4170 Telecopier: (408) 239-2112 -or- Richard Burnham Phone: (408) 239-2340 Telecopier: (408) 239-2568 If to Dade: ----------- Jim Reid-Anderson Phone: (847) 267-5320 Telecopier: (847) 267-1066 -or- John Connaughton Phone: (617) 572-2948 Telecopier: (617) 572-3274 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HOECHST ----------------------------------------- As an inducement to Dade to enter into this Agreement, Hoechst hereby represents and warrants to Dade that: 4.1 Organization and Corporate Power. Hoechst is a corporation duly -------------------------------- organized, validly existing and in good standing under the laws of Germany and has the corporate power to carry on its business as now being conducted. Each of the Other Hoechst Entities is a corporation or other entity, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation. The capitalization of each of the Acquired Entities (including place of organization and record and beneficial ownership), as of and immediately after the Closing, is listed on the attached -17- Acquired Entities Capitalization Schedule. The Acquired Companies and their - ----------------------------------------- subsidiaries (collectively, the "Acquired Entities") shall have, as of the Closing Date, all requisite power and ----------------- authority necessary to own and operate the Business and to conduct the Business as now conducted and are qualified to do business in every jurisdiction in which the failure so to qualify has had or would reasonably be expected to have a Material Adverse Effect upon the Acquired Entities, taken as a whole. The copies of each Acquired Entity's constituent documents have been made available to Dade prior to the date of this Agreement and reflect all modifications made thereto and are accurate and complete. 4.2 Subsidiaries and Affiliates. Except as set forth in the attached --------------------------- Acquired Entities Capitalization Schedule, the Acquired Entities do not own, - ----------------------------------------- directly or indirectly, any stock, partnership interest, joint venture interest or other security or other ownership interest or investment in any other Person. 4.3 Capital Stock of Hoechst Subsidiary. The authorized and outstanding ----------------------------------- capital stock of each of the Acquired Entities (and the shareholders of such stock) is set forth on the attached Acquired Entities Capitalization Schedule ----------------------------------------- (subject to capital increases contemplated by the Combination Documents and the Restructuring Documents), all of which is, or as of the Closing shall be, duly authorized, validly issued and outstanding, fully paid and nonassessable. Except for such capital stock, there are no shares of capital stock or other equity interests in the Acquired Entities issued or outstanding. None of such capital stock has been issued in violation of, and none of such capital stock is subject to, any preemptive or subscription rights. None of such capital stock is subject to any voting trust agreement or other agreement, contract, instrument, lease, commitment, license, guaranty, settlement or other business arrangement or understanding (a "Contract") including any of the foregoing -------- relating to the voting, dividend rights or disposition of any such capital stock. There are no issued or outstanding warrants, options, "phantom" stock rights, agreements, convertible or exchangeable securities or other commitments (other than this Agreement) pursuant to which any Person is or may become obligated to issue, sell, purchase, return or redeem any shares of capital stock or other securities of the Acquired Entities, and there are no equity securities of the Acquired Entities reserved for issuance for any purpose. Upon delivery to Dade at the Closing of certificates (or other evidence reasonably satisfactory to Dade) representing the Stock, duly endorsed by the appropriate Hoechst Entity for transfer to Dade, and upon Hoechst's receipt of the Purchase Price, good and valid title to the Stock shall pass to and vest in Dade, free and clear of any Liens. 4.4 Authority of Hoechst. Hoechst has full right, power and authority to -------------------- enter into this Agreement, and Hoechst and each Other Hoechst Entity has or will have full right, power and authority to enter into each of the other Combination Documents and the Restructuring Documents to which it is a party and to carry out the transactions contemplated hereby and thereby. The execution, delivery and performance by Hoechst of this Agreement and by Hoechst and the Other Hoechst Entities of each other Combination Document and the Restructuring Documents to which it is a party has been or will be duly authorized by all necessary corporate action and no other -18- corporate action on the part of such Hoechst Entity is required in connection therewith. Each of the Restructuring Documents and each of the Combination Documents to be executed and delivered by each Hoechst Entity a party thereto constitutes, or will when executed and delivered constitute, a valid and binding obligation of such Hoechst Entity, enforceable in accordance with its respective terms. 4.5 No Breach. Except as set forth on the attached Hoechst Conflicts --------- ----------------- Schedule, the execution, delivery and performance by each Hoechst Entity of the - -------- Restructuring Documents and the Combination Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby (including the operation by the Acquired Entities' of the Business following the Closing as such operations are conducted on the date of this Agreement) do not and shall not (a) conflict with or result in any breach of any of the provisions of, (b) constitute a default under, (c) result in a violation of, (d) give any third party the right to terminate or to accelerate any obligation under, (e) result in the creation of any Lien upon the Business or any of the Business Assets or (f) require any authorization, consent, approval, license, permit, exemption or other action by or notice to or filing with (collectively, "Consents") any court -------- or other Governmental Entity under the provisions of, Hoechst's or any of the Other Hoechst Entities' constituent documents or any Contract listed on the attached Hoechst Contracts Schedule, or any Applicable Law. Without limiting -------------------------- the generality of the foregoing, neither Hoechst nor any Other Hoechst Entity has entered into any agreement, or is bound by any obligation of any kind whatsoever, directly or indirectly to transfer or dispose of (whether by sale of stock or assets, assignment, merger, consolidation or otherwise) any portion of the Business Assets to any Person, other than in the ordinary course of business, or pursuant to this Agreement, the other Combination Documents, the Restructuring Documents or in contemplation of the transactions contemplated hereby or thereby. Except as set forth on the Hoechst Conflicts Schedule, none -------------------------- of the Acquired Entities is subject to any restrictions upon making loans or advances or paying dividends to, transferring property to, or repaying any indebtedness owed to any affiliate thereof. 4.6 Financial Statements. Each of the following financial statements -------------------- (including in all cases the notes thereto, if any) (collectively, the "Financial --------- Statements") is (or when delivered shall be) consistent with the books and - ---------- records of the Hoechst Entities and presents fairly in all material respects the combined financial condition, results of operations, and cash flows of the Business in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis as of the dates and for the ---- periods set forth therein: (a) the audited combined balance sheets of the Business as of December 31, 1995 and 1996, and the related statements of operations and cash flows for the twelve-month periods ended December 31, 1995 and 1996, respectively, with the "Latest Balance Sheet" being defined herein as the -------------------- audited combined balance sheet of the Business as of December 31, 1996; and (b) the unaudited combined balance sheets of the Business as of March 31, 1997 and as of any subsequent date for the balance sheets delivered pursuant to Section 9.2(a) hereunder -19- and the related statements of operations and cash flows for the relevant fiscal periods then ended, provided that such unaudited financial statements -------- shall only include footnotes customarily included in interim financial statements and shall be subject to normal and customary year-end adjustments. 4.7 Product and Service Warranty; Product Recall. The attached Warranty -------------------------------------------- -------- Schedule contains copies of the standard terms and conditions of sale for - -------- products delivered and services rendered to the extent relating to the Business. Except as set forth on the attached Product Recalls Schedule, during the past ------------------------ three years there have been no general product recalls, withdrawals, discontinuances or seizures with respect to any products manufactured or sold by any Hoechst Entity with respect to the Business. 4.8 No Material Adverse Change. Since the date of the Latest Balance -------------------------- Sheet, there has been no material adverse change in the business, financial condition, operating results, assets or operations of the Business (including as a consequence of the loss or pending or threatened loss, alone or in the aggregate, of any significant customer, supplier, source of referral, right pursuant to any Contract, or any Consent). 4.9 Absence of Certain Developments. Except for transactions contemplated ------------------------------- by this Agreement or as set forth on the attached Hoechst Developments Schedule, ----------------------------- since the date of the Latest Balance Sheet, none of the Hoechst Entities has (with respect to the Business): (a) mortgaged or pledged any of its properties or assets or subjected them to any Lien except Permitted Liens; (b) sold, assigned, licensed (as licensor), disposed or permitted any other Person to use any of its tangible assets (other than in the ordinary course of business) having a fair market value in excess of $500,000 in the aggregate, or canceled without fair consideration any debts or claims owing to or held by it; (c) sold, assigned, licensed (as licensor), disposed of or transferred any Permits, Proprietary Rights or other intangible assets having a fair market value in excess of $500,000 in the aggregate, or disclosed any proprietary confidential information to any Person except to Dade and its representatives herewith or in the ordinary course of business; (d) suffered any damage, destruction or casualty loss to its tangible assets of the Business in excess of $500,000, whether or not covered by insurance; (e) suffered any extraordinary losses or canceled or waived any rights having a value in excess of $500,000 in the aggregate; (f) made any loans or advances to, guarantees for the benefit of, or any investments in, any Persons in excess of $500,000 in the aggregate; -20- (g) instituted or settled any claim or lawsuit involving equitable or injunctive relief or more than $500,000 in the aggregate; (h) except (i) in the ordinary course of business or (ii as would otherwise be permitted in Section 4.9(k) below, entered into, amended, modified or supplemented any Contract with any of its officers, directors, equity holders, agents or its or their affiliates, or with any family member of any such individual, or with any entity in which any such person or individual owns a beneficial interest; (i) entered into any other Contracts involving liabilities or obligations in excess of $500,000; (j) accelerated, terminated, modified or canceled any Contracts involving more than $500,000; (k) entered into any employment contract (including with an independent contractor) involving more than $200,000 or collective bargaining agreement, written or oral (other than any oral contract for employment at the will of Hoechst), or modified in any material respect the terms of any existing such contract or agreement; (l) adopted, amended, modified or terminated any bonus, profit- sharing, incentive, benefit, welfare, severance or other plan, Contract or commitment for the benefit of any of its directors, officers and employees; (m) except (i) for ordinary course salary increases and bonuses paid consistent with past practice and as contemplated by the current business plan or (ii as required by pre-existing Contracts, made or granted any bonus or any wage or salary increase to any employee or group of employees, or made or granted any increase in any vacation or sick pay policy; (n) engaged in any promotional sales or discount or other similar activity with customers other than in the ordinary course of business; (o) instituted or permitted any change involving more than $500,000 in the conduct of the Business, or any significant change in its method of manufacturing, purchase, distribution, sale, lease, management, marketing, promotion or operation; (p) made any change in any method of accounting or accounting policies, other than those required by GAAP and which have been disclosed in writing to Dade; (q) entered into any transaction other than in the ordinary course of business involving more than $500,000; or -21- (r) agreed or committed to do any of the foregoing. 4.10 Real Property. ------------- (a) Owned Properties. For the purposes hereof, the term "Owned Real ---------------- ---------- Property" shall mean all land and all buildings, fixtures and other improvements - -------- located thereon, including all easements, rights of way, servitudes, tenements, hereditaments, appurtenances, privileges and other rights with respect thereto owned by the Hoechst Entities (with respect to the Business). The Owned Real ---------- Property Schedule attached hereto sets forth the address and a true, correct and - ----------------- complete legal description of the land for each Owned Real Property. Except as set forth in the Owned Real Property Schedule attached hereto, with respect to ---------------------------- each parcel of Owned Real Property, immediately after giving effect to the Closing: (i) the respective Acquired Entities shall have good and marketable fee simple title to all such parcels, free and clear of all Liens, except Permitted Liens; (ii there shall be no leases, subleases, licenses, concessions or other agreements (written or oral) granting to any person the right to use or occupy such parcel or any portion thereof; and (ii there shall be no outstanding options, rights of first offer, rights of first refusal or similar rights granted to third parties under local jurisdiction to purchase such parcel or any portion thereof or interest therein. (b) Leased Properties. For the purposes hereof, the term "Leased ----------------- ------ Real Property" shall mean all land, buildings, fixtures and other real property - ------------- used or occupied by the Business pursuant to any lease, sublease, license, concession or other similar real property interest held by any Hoechst Entity. The Leased Real Property Schedule attached hereto sets forth the address and a ----------------------------- list of all leases, subleases, licenses, concessions and other agreements (written or oral) involving annual payments in excess of $250,000 (collectively, the "Real Property Leases") for each Leased Real Property. Hoechst has made -------------------- available to Dade a true, correct and complete copy of each such written Real Property Lease (including all amendments, extensions, renewals, guaranties and other documents with respect thereto), and in the case of any such oral Real Property Leases a written summary of the basic terms thereof. Except as set forth in the Leased Real Property Schedule attached hereto, with respect to each ----------------------------- such Real Property Lease: (i) the Real Property Lease is (and immediately after giving effect to the Closing shall continue to be) legal, valid, binding, enforceable and in full force and effect; (ii neither the respective Hoechst Entities nor any other party to the Real Property Lease is (or after giving effect to the Closing shall be) in breach or default thereunder and no event has occurred or circumstance exists which, with the delivery of notice, passage of time or both, would constitute such a breach or default or permit the termination, modification or acceleration of rent thereunder; (ii no party to such Real Property Lease has repudiated (or, to Hoechst's Knowledge, after giving effect to the Closing shall repudiate) any provision thereof, and there are no (and, to Hoechst's Knowledge, after giving effect to the Closing there shall not be any) disputes, oral agreements or forbearance programs in effect with respect to the Real Property Lease; and (iv the respective Hoechst Entities have not assigned, subleased, mortgaged, deeded in trust or otherwise transferred or encumbered the Real Property Lease or any interest therein. -22- (c) Leasehold Improvements. For the purposes hereof, the term ---------------------- "Leasehold Improvements" shall mean all buildings, fixtures and other - ----------------------- improvements owned by the respective Hoechst Entities and included in each Leased Real Property, regardless of whether such improvements are subject to reversion to the landlord or other third party upon the expiration or termination of the lease, sublease or similar agreement for such Leased Real Property. Immediately after giving effect to the Closing, the respective Acquired Entities will (subject to such reversions, if any) have good and marketable title to the Leasehold Improvements, free and clear of all Liens, except Permitted Liens. (d) Condemnation and Litigation. There are no condemnation, --------------------------- expropriation or other eminent domain proceedings pending or, to Hoechst's Knowledge, threatened, affecting any Owned Real Property, Leased Real Property and Leasehold Improvements (collectively, the "Real Property") or any portion ------------- thereof. There is no writ, injunction, decree, order or judgment outstanding, nor any claims, litigation, administrative actions or similar proceedings pending or threatened relating to the ownership, lease, use, occupancy or operation of any Real Property or any portion thereof. (e) Condition of Improvements. All buildings, structures, fixtures ------------------------- and other improvements and all components thereof included within the Owned Real Property and Leased Real Property and all Leasehold Improvements (collectively, the "Improvements") are, in all material respects, in good condition and repair ------------ and sufficient for the continued operation of the Business. There are no structural deficiencies or latent defects affecting any of the Improvements and there are no facts or conditions affecting any of the Improvements which would, individually or in the aggregate, interfere in any material respect with the use or occupancy thereof in the continued operation of the Business. (f) Access. Each parcel of Real Property and the Improvements thereon ------ have access to a public street. 4.11 Business Assets. --------------- (a) Except as set forth on the Excluded Asset Schedule, on the Closing ----------------------- Date, the Acquired Entities shall own good and marketable title to all right, title and interest of the Hoechst Entities in, to and under all of the properties, assets and rights of every kind, whether tangible or intangible, real or personal, primarily related to, used in, or held in connection with, the conduct of the Business ("Business Assets"), free and clear of all Liens, except --------------- for (i) Liens described on the attached Encumbrances Schedule, (ii Liens for --------------------- current property taxes not yet due and payable, and (ii other imperfections of title or Liens, if any, which imperfections or Liens do not, or would not be reasonably foreseeable to, individually or in the aggregate, impair the continued use and operation of the Business Assets to which they relate and do not affect the marketability of the title to the Business Assets to which they relate (collectively, items (i), (ii) and (iii) above are referred to as the "Permitted Liens"). Except as set forth on the Excluded Asset Schedule, such - ---------------- ----------------------- properties, -23- assets and other rights, together with the rights of the Acquired Entities available under the Trademark License Agreement, Transition Services Agreement, the InfraServ Agreement, the Messer Supply Agreement and the Third Party Distribution Agreements are all of the properties, assets and other rights used by the Business in achieving, on a stand-alone basis, the historical financial performance of the Business as reflected in the Financial Statements, other than those properties, assets and other rights disposed of in the ordinary course of business or in transactions reflected in such Financial Statements. Either Hoechst, an Acquired Entity or an affiliate of Hoechst identified on the attached Exhibit I own all of the Business Assets. --------- (b) The level and category of services made available to Dade pursuant to the Combination Documents are sufficient to operate the Business as it is currently conducted. The price or cost of each service at December 31, 1996 identified on the Transition Services Schedule is fairly reflected in the ---------------------------- December 31, 1996 audited income statement of the Business. The cost and expenses (including wages, salaries and benefits) relating to the employment of the individuals of the Business employed by the Acquired Entities at December 31, 1996 are fairly reflected in the December 31, 1996 audited income statement of the Business. 4.12 Tax Matters. ----------- (a) Except as set forth on the attached Tax Schedule or events ------------ involving obligations or liabilities less than $250,000: (i) the Acquired Entities have timely filed all federal, state, local and non-United States income, information and other Tax returns (collectively "Tax Returns") which are ----------- required to be filed with respect to their activities, properties or employees; (ii all such returns are true, complete and accurate and such filings accurately reflect the Tax liabilities of the Hoechst Entities; (ii all Taxes, assessments and other governmental charges imposed upon the Hoechst Entities, or upon any of the assets, income or franchises of the Acquired Entities, have been timely paid or, if not yet payable, will be timely paid; and (iv there are no actual or proposed Tax deficiencies, assessments or adjustments with respect to the Business. "Tax" or "Taxes" means any (A) federal, state, local or non-United --- ----- States income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall, profits, environmental, customs, capital stock, franchise, employees, income withholding, foreign or domestic withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, value added, alternative or add-on minimum or other similar tax, governmental fee, governmental assessment or governmental charge of any kind whatsoever, including any interest, penalties or additions to Tax or additional amounts with respect to the foregoing; (B) liability for the payment of any amounts of the type described in clause (A) arising as a result of being (or ceasing to be) a member of an affiliated group (as defined in (S) 1504(a) of the I.R.C. of 1986, as amended (the "Code")) or any analogous ---- combined, consolidated or unitary group defined under state, local or foreign tax law; and (C) liability for the payment of any amounts of the type described in clause (A) as a result of any express or implied obligations to indemnify or otherwise assume or succeed to the liability of any other Person. -24- (b) The Acquired Entities are not liable for the Taxes of another Person (x) as a transferee or successor, (y) by contract or indemnity or (z) otherwise. (c) Except as set forth on the attached Tax Schedule, no Acquired ------------ Entity is or shall become obligated (under any contract entered into on or before the Closing Date) to make any payments that shall be nondeductible under Section 280G of the Code (or any corresponding provision of state, local or foreign Tax law). Except as set forth on the attached Tax Schedule, no Acquired ------------ Entity will be required as a result of a change in method of accounting, a "closing agreement" as described in Section 7121 of the Code (or any corresponding provision of state, local or foreign income Tax law), a deferred intercompany gain described in Treasury Regulation Sections 1.1502-13, or an excess loss account described in Treasury Regulation Sections 1.1502-19 (or any corresponding or similar provision or administrative rule of federal, state, local or foreign income tax law), to include any item of income in, or exclude any item of deduction from, taxable income for any taxable year or portion thereof beginning on or after the Closing Date. 4.13 Absence of Undisclosed Liabilities. As of the Closing, the Acquired ---------------------------------- Entities shall have no obligations or liabilities involving more than $250,000 relating to the Business or the Business Assets (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due and regardless of when or by whom asserted), except (a) obligations under Contracts described on the attached Contracts Schedule and the other Schedules attached ------------------ hereto or under Contracts and commitments entered into in the ordinary course of business which are not required to be disclosed thereon due to specified dollar thresholds (but not liabilities for breaches or alleged breaches thereof occurring on or prior to the Closing Date which have not been disclosed pursuant to the Schedules hereto), (b) liabilities reflected on the liability side of the Latest Balance Sheet, (c) liabilities and obligations which have arisen after the date of the Latest Balance Sheet in the ordinary course of business (none of which is a liability for breach or alleged breach of contract, tort, infringement, claim, lawsuit or breach of warranty which could cause or give rise to obligations or liabilities in excess of $250,000), (d) other liabilities and obligations expressly disclosed on the Undisclosed Liabilities Schedule -------------------------------- attached hereto and (e) liabilities specified on the Draft Balance Sheet following resolution of all disputes pursuant to Section 1.6. 4.14 Contracts and Commitments. ------------------------- (a) Except as set forth on the attached Hoechst Contracts Schedule -------------------------- (which Contracts Schedule indicates the parties thereto), with respect to the ------------------ Business, neither Hoechst nor any of the Other Hoechst Entities is a party to any oral or written: (i) plan or other Contract providing for bonuses, pensions, options, stock purchases, deferred compensation, retirement payments, profit sharing, collective bargaining or the like, or any Contract with any labor union involving in any such case in excess of $200,000; -25- (ii) management agreement or other Contract for the employment of any officer, partner, individual employee or other person on a full-time, part-time or consulting basis or providing for the payment of any cash or other compensation or benefits upon the sale of the Business or a change of control (whether upon the occurrence of any additional events or conditions or otherwise) involving in any such case in excess of $200,000 or otherwise prohibiting competition; (iii) Contract relating to the borrowing of money or to mortgaging, pledging or otherwise placing a Lien on any of the Business Assets, other than Permitted Liens; (iv) Contract with respect to the lending or investing of funds involving more than $250,000; (v) license or royalty agreement involving more than $250,000; (vi) guaranty, suretyship, letter of comfort or similar undertaking involving more than $250,000 of any obligation for borrowed money or that otherwise relates to the Business Assets, other than endorsements made for collection; (vii) Contract or group of related Contracts with the same party for the purchase or sale of commodities, supplies, products or other personal property or for the furnishing or receipt of services having a selling price in excess of $500,000; (viii) Contract that would impose any significant restrictions upon the ability of any Acquired Entity or Dade Entity from freely engaging in the Business anywhere in the world; (ix) Contract relating to the manufacturing, distribution, marketing, advertising or promotion of products or services (whether by the Business or for the Business) involving in any such case more than $500,000; (x) Contract relating to the acquisition or sale of a business (or any portion thereof) having a fair market value in excess of $250,000; (xi) other Contract or group of related Contracts with the same party involving a potential liability to any party thereto of more than $500,000; or (xii) other Contracts material to the Business, whether or not entered into in the ordinary course of business, the absence of which would reasonably be likely to have an adverse effect involving more than $500,000. -26- (b) Except as specifically disclosed in the attached Hoechst Contracts ----------------- Schedule or as would not reasonably involve liabilities or obligations in excess - -------- of $500,000, (i) no Contract required to be disclosed on the Hoechst Contracts ----------------- Schedule has been (or, by giving effect to the Closing, will be) breached in - -------- any respect or has been (or, to Hoechst's Knowledge, after giving effect to the Closing, will be) canceled by the other party thereto, and since the date of the Latest Balance Sheet, none of the significant customers, suppliers, outside service providers or sources of referral of the Business has notified Hoechst or any of the Other Hoechst Entities in writing that it will stop or decrease the rate of business done with or referred to the Business and (ii Hoechst and the Other Hoechst Entities have performed all of their obligations under the Contracts required to be listed on the Hoechst Contracts Schedule and, to -------------------------- Hoechst's Knowledge, there is no breach of or default by any other party under any Contract to which any of them is a party or any event which, upon giving of notice or lapse of time or both, or upon and after giving effect to the transactions contemplated by the Restructuring Documents and the Combination Documents, would constitute such a breach or default. (c) A true and correct copy of all Contracts which are referred to on the attached Hoechst Contracts Schedule, together with all amendments, exhibits, -------------------------- attachments, waivers or other changes thereto, have been made available to Dade (or, in the case of any oral Contract or Contract withheld due to confidentiality requirements, a summary of the material terms of such Contract has been supplied to Dade). 4.15 Proprietary Rights. ------------------ (a) The Proprietary Rights Schedule sets forth, with respect to the --------------------------- Business, a complete and correct list of all of the following that are owned by, used by, filed by or on behalf of, or entered into by, Hoechst or any Other Hoechst Entity: (i) patented or registered Proprietary Rights and pending patent applications or other applications for registrations of Proprietary Rights; (ii unregistered trademarks, unregistered service marks, trade names and corporate names; (ii computer software (other than software purchased or licensed for less than a total cost of $250,000); and (iv all licenses or similar agreements or arrangements covering Proprietary Rights to which either Hoechst or any Other Hoechst Entity is a party, either as licensee or licensor, involving more than $250,000; provided, however, that such list may be amended -------- ------- prior to the Closing as mutually agreed by Hoechst and Dade. "Proprietary ----------- Rights" shall mean all of the following assets, properties and rights which are - ------ related to, used in or necessary for the conduct of the Business: patents, patent applications, inventors certificates, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice), including any reissues, continuations, continuations-in-part, divisions, revisions, extensions or reexaminations thereof; trademarks, service marks, trade dress, trade names, corporate names, logos (and all translations, adaptations, derivations and combinations of the foregoing) and Internet domain names, together with all of the goodwill associated with each of the foregoing; copyrights, copyrightable works and mask works and registrations and applications for registration and renewals for any of the foregoing; computer software, data, data bases and documentation thereof; trade secrets and other confidential -27- information (including, without limitation, ideas, formulae, compositions, know- how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, improvements, proposals and technical data). (b) Except as otherwise set forth on the attached Proprietary Rights ------------------ Schedule: - -------- (i) Hoechst and the Other Hoechst Entities own and possess, and immediately after the Closing the Acquired Entities (on a consolidated basis) shall own and possess, all right, title and interest in and to, or have a valid and enforceable license from affiliated or unaffiliated third parties to use, free and clear of all Liens (including, but not limited to, any injunction, judgment, order, decree, ruling or agreement), all of the Proprietary Rights necessary for the operation of the Business as currently conducted; (ii) neither Hoechst nor any Other Hoechst Entity has infringed, misappropriated or otherwise conflicted with, and the operation of the Business as currently conducted will not infringe, misappropriate or otherwise conflict with, any valid proprietary rights of any third party, which infringement, misappropriation or other conflict could reasonably be expected to result in an adverse effect on the Business in excess of $250,000; and neither Hoechst nor any Other Hoechst Entity has received any written notices regarding any of the foregoing (including, without limitation, any demands or offers to license any proprietary rights from any third party); (iii) no claim by any third party contesting the validity, enforceability, use or ownership of any Proprietary Rights owned or used by Hoechst or any Other Hoechst Entity with respect to the Business has been made within the past six years and not resolved, is currently outstanding or is, to Hoechst's Knowledge, threatened; (iv) Hoechst and the Other Hoechst Entities have taken all necessary action to maintain and protect all Proprietary Rights owned by them the loss of which would be reasonably likely to have an adverse effect on the Business in excess of $250,000; (v) to Hoechst's Knowledge, the owners of any of the Proprietary Rights licensed to Hoechst or to any Other Hoechst Entity have taken all necessary action to maintain and protect the Proprietary Rights subject to such licenses; (vi) no loss of Proprietary Rights by Hoechst or any of the Other Hoechst Entities (other than by expiration in the ordinary course) is pending or, to Hoechst's Knowledge, threatened; and (vii) to Hoechst's Knowledge, none of the proprietary rights owned or used by any third party would reasonably be expected to supersede or make obsolete any product or process of Hoechst or any Other Hoechst Entity, or to limit the Business as currently conducted. -28- 4.16 Litigation. Except as set forth on the attached Litigation Schedule ---------- ------------------- or the attached Environmental and Safety Schedule, there are no actions, suits, --------------------------------- proceedings, orders or investigations pending or, to Hoechst's Knowledge, threatened against or adversely affecting any of the Acquired Entities, the Business Assets or the Business at law or in equity, or before or by any Governmental Entity involving in excess of $250,000. The Acquired Entities, the Business Assets and the Business are not subject to or bound by any outstanding orders, judgments, or decrees of any court or other Governmental Entity which could cause or give rise to obligations or liabilities in excess of $250,000, except as set forth on the attached Litigation Schedule or the attached ------------------- Environmental and Safety Schedule. - --------------------------------- 4.17 Brokerage. Except for fees payable to Lehman Brothers Inc. and Bear --------- Stearns & Co., Inc. as agreed to by the parties pursuant to Section 7.3(b) hereof, there are no claims for brokerage commissions, finder's fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of the Hoechst Entities. 4.18 Employees. --------- (a) To Hoechst's Knowledge, no key executive employee and no group of employees of any of the Hoechst Entities has any plans to terminate or modify his or her status as a Business Employee, including upon consummation of the transactions contemplated hereby (other than to become an employee of an Acquired Entity pursuant to the transactions contemplated by the Restructuring Documents or immediately after the Closing). Except as set forth on the attached Litigation Schedule, there are no claims, actions, proceedings or ------------------- investigations pending or threat ened against any of the Hoechst Entities with respect to or by any employee or former employee of the Business and there are no claims, actions, proceedings or investigations pending or threatened against any employee or former employee of the Business with respect to or concerning the Business that would involve liabilities in excess of $250,000. The Hoechst Entities have not experienced with respect to the Business, within the past three years, any strikes, grievances, claims of unfair labor practices (including violation of the German Shop Constitution Act) or other collective bargaining disputes. The Hoechst Entities have not engaged, with respect to the Business, in any unfair labor practices (including violation of the German Shop Constitution Act). There are no organizational efforts presently made or to Hoechst's Knowledge, threatened by or on behalf of any labor union with respect to the Business Employees. (b) Hoechst has provided or, to the extent not previously provided, shall provide within 10 Business Days after the date hereof, Dade with a true, complete and accurate list of each Person employed by the Hoechst Entities, as of the date of such list, in connection with the Business (the "Business -------- Employees"), dates of hire by Hoechst or the Other Hoechst Entities, position - --------- and title (if any), current rate of compensation (including bonuses, commissions and incentive compen sation, if any), whether such employee is hourly or salaried, whether such employee is exempt or -29- non-exempt (in the case of U.S. employees), whether such employee is absent from active employment and, if so, the date such employee became inactive, the reason for such inactive status and, if applicable, the anticipated date of return to active employment (the "Employee List"). Hoechst shall provide Dade with an -------------- updated Employee List at least two Business Days, but not more than 10 Business Days, prior to Closing (red-lined to show changes) and such list will be true, correct, accurate and complete as of the date such list is provided to Dade. Except as indicated on the attached Affiliated Employee Schedule, Hoechst or the ---------------------------- Other Hoechst Entities employs all of the employees who perform work for the Business. (c) The persons who are employees of the Acquired Entities on and after the Closing Date, together with the services available under the Transition Services Agreement, the InfraServ Agreement, the Messer Agreement and the Third Party Distribution Agreements, shall be of the type and number sufficient to conduct and operate the Business as currently conducted. 4.19 Intercompany Services. The attached Intercompany Services Schedule --------------------- ------------------------------ describes all intercompany services provided to or on behalf of the Business by Hoechst and its affiliates (including the costs and expenses charged to the Business in respect thereof for the last three years). 4.20 Employee Benefit Plans. Except as set forth on the Hoechst Employee ---------------------- ---------------- Benefit Schedule, none of the Acquired Entities maintains, or is required to - ---------------- contribute, on behalf of any Business Employee to any (a) employee pension benefit plan (including any plan defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), (b) employee ----- welfare benefit plan (including any plan defined in ERISA Section 3(1)), or (c) other deferred compensation, stock purchase, stock option, incentive, bonus, or other plan, program or arrangement that provides compensation or benefits in connection with employment that are not treated as either an employee pension benefit plan or an employee welfare benefit plan (such plans, arrangements, and programs as described in (a) through (b) are referred to herein as the "Plans"). ----- All Plans set forth on the Hoechst Employee Benefit Schedule, and their related --------------------------------- trusts, if any, comply in form and have been administered in accordance with all Applicable Laws of the countries in which such plans are maintained, including the applicable requirements of ERISA, and any necessary Consents of the Plans by Governmental Entities have been obtained. 4.21 Insurance. The attached Hoechst Insurance Schedule describes each --------- -------------------------- insurance policy maintained with respect to the Business. Each such policy is in full force and effect. Except as set forth on the attached Hoechst Insurance ----------------- Schedule, with respect to the Business, neither Hoechst nor any of the Other - -------- Hoechst Entities is in default with respect to its obligations under any insurance policy maintained by it. The insurance coverage with respect to the Business is customary for businesses of similar size engaged in similar lines of business. -30- 4.22 Compliance with Laws; Permits; Certain Operations. ------------------------------------------------- (a) Except as set forth on the attached Compliance Schedule: ------------------- (i) each of the Hoechst Entities has complied with all Applicable Laws relating to the operation of the Business, and no written notices have been received by, and no claims have been filed against, the Hoechst Entities alleging a violation of any such Applicable Laws; (ii) with respect to the Business, the Hoechst Entities have complied with all Applicable Laws relating to the employment of labor, including provisions thereof relating to wages, hours, equal opportunity, collective bargaining and the payment of social security and other Taxes; and (iii) except as set forth on the attached Permits Schedule, the ---------------- Hoechst Entities hold all permits, licenses, certificates, accreditations or other authorizations or Consents of Governmental Entities (collectively, "Permits") required for the conduct of the Business (including the ------- operation of the Real Property and the Business Assets) and hold ISO 9001 certification with respect to each manufacturing site (other than in Italy) related to the Business. (b) Except as set forth on the attached Permits Schedule, each Hoechst ---------------- Entity is in compliance with all terms and conditions of all of the Permits. Hoechst or any Other Hoechst Entity, as the case may be, is the exclusive holder of all such Permits, each of which is in full force and effect, and there is no (and, to Hoechst's Knowledge, no reasonable basis for any) action, proceeding or claim which affects the validity of any such Permit. Except as set forth on the Permits Schedule, there are no proposed Permits pending before any Governmental - ---------------- Entity. Except as set forth on the Permits Schedule, immediately after giving ---------------- effect to the Closing, all Permits will be held by the Acquired Entities. 4.23 Environmental and Safety Matters. Except as disclosed on the attached -------------------------------- Environmental and Safety Schedule or as would not be reasonably expected to give - --------------------------------- rise individually or in the aggregate to liabilities or obligations in excess of $250,000: (a) The Hoechst Entities have complied (with respect to the Business) and are in compliance with all Environmental and Safety Requirements, including all Permits that may be required thereunder (collectively, the "Environmental ------------- Permits"). - ------- (b) The Hoechst Entities have not (with respect to the Business) received any written notice or, to Hoechst's Knowledge, any other notice regarding any actual or potential liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any -31- investigatory, remedial or corrective obligations, arising under Environmental and Safety Requirements. (c) None of the following exists at any property or facility owned, occupied or operated by the Hoechst Entities (with respect to the Business): (i) underground storage tanks; (ii asbestos-containing material in friable or damaged condition; (ii landfills, surface impoundments, or disposal areas for regulated substances. (d) The Hoechst Entities have not treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, or released any substance, including any hazardous substance, or owned or operated any facility or property (and no such property is contaminated by any such substance), in a manner that has given or would give rise to liabilities, including any liability for response costs, corrective action costs, personal injury, property damage, natural resource damages or attorneys fees pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA") or any other Environmental and Safety Requirements. - -------- (e) The execution, delivery and performance of the Restructuring Documents and the Combination Documents shall not result in any obligations for site investigation or cleanup, or notification to or consent of government agencies or third parties, pursuant to any of the so-called "transaction- triggered" or "responsible property transfer" Environmental and Safety Requirements. (f) The Hoechst Entities (with respect to the Business) have not, either expressly or by operation of law, assumed or undertaken any liability, including any obligation for corrective or remedial action, of any other Person relating to Environmental and Safety Requirements. "Environmental and Safety Requirements" shall mean all federal, state, local ------------------------------------- United States and non-United States statutes, regulations, ordinances and similar provisions having the force or effect of law, all judicial and administrative orders and determinations and all common law concerning public health and safety, worker health and safety, and pollution or protection of the environment, including without limitation all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any hazardous materials, substances or wastes, dangerous wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation. 4.24 Officers and Directors; Bank Accounts. The attached Officers, ------------------------------------- --------- Directors, and Bank Account Schedule lists all officers and directors of each - ------------------------------------ Acquired Entity and all bank accounts of each Acquired Entity. -32- 4.25 Investment Representations of Hoechst. In connection with the ------------------------------------- issuance of the Common Stock, Class L Common, Series B, and the Warrant to Hoechst hereunder, Hoechst is acquiring the Common Stock, Class L Common, Series B, and the Warrant hereunder for its own account with the present intention of holding such securities for investment purposes and has no intention of selling such securities in a public distribution in violation of federal or state securities laws. 4.26 Restructuring Documents. The Combination Documents and the ----------------------- Restructuring Documents represent all Contracts pursuant to which the Business Assets were or are to be transferred to the Acquired Entities in connection with the transactions contemplated hereby. 4.27 Closing Date. All of the representations and warranties of Hoechst ------------ this Article IV and elsewhere in this Agreement and all information delivered in any Schedule or Exhibit attached hereto or in any certificate delivered to Dade are true and correct on the date of this Agreement and shall be true and correct as of the Closing, other than such representations and warranties as are made as of a specific date, which shall be true as of such date. ARTICLE V REPRESENTATIONS AND WARRANTIES OF DADE -------------------------------------- As an inducement to Hoechst to enter into this Agreement, Dade hereby represents and warrants to Hoechst that: 5.1 Organization and Corporate Power. Dade is a corporation duly -------------------------------- organized, validly existing and in good standing under the laws of the state of Delaware and has the corporate power to carry on its business as now being conducted. Each subsidiary of Dade is a corporation or other entity, duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation. The capitalization of Dade and each of its subsidiaries (including place of organization and record and beneficial ownership), as of and immediately after the Closing, is listed on the attached Dade Capitalization Schedule. Dade and its subsidiaries (collectively, the - ---------------------------- "Dade Entities") shall have, as of the Closing Date, all requisite power and - --------------- authority necessary to own and operate the Dade Business and to conduct the Dade Business as now conducted and as presently proposed to be conducted and are qualified to do business in every jurisdiction in which the failure so to qualify has had or would reasonably be expected to have a Material Adverse Effect upon the Dade Entities, taken as a whole. The copies of Dade's and each of the other Dade Entities' constituent documents have been made available to Hoechst prior to the date of this Agreement and reflect all modifications made thereto and are accurate and complete. -33- 5.2 Subsidiaries and Affiliates. Except as set forth in the attached Dade --------------------------- ---- Capitalization Schedule, Dade does not own, directly or indirectly, any stock, - ----------------------- partnership interest, joint venture interest or other security or other ownership interest or investment in any other Person. 5.3 Capital Stock of Dade Entities. The authorized and outstanding ------------------------------ capital stock of each of the Dade Entities (and the shareholders of such stock) is set forth on the attached Dade Capitalization Schedule, all of which is, or ---------------------------- as of the Closing shall be, duly authorized, validly issued and outstanding, fully paid and nonassessable. Except for such capital stock, there are no shares of capital stock or other equity interests in the Dade Entities issued or outstanding. None of such capital stock has been issued in violation of, and none of such capital stock is subject to, any preemptive or subscription rights. Except pursuant to the Stockholders Agreement, the Registration Agreement and this Agreement, none of such capital stock is subject to any voting trust agreement or other Contract including any of the foregoing relating to the voting, dividend rights or disposition of any such capital stock. Except as set forth on the attached Dade Capitalization Schedules, there are no issued or ----------------------------- outstanding warrants, options, "phantom" stock rights, agreements, convertible or exchangeable securities or other commitments (other than this Agreement) pursuant to which any Person is or may become obligated to issue, sell, purchase, return or redeem any shares of capital stock or other securities of the Dade Entities, and there are no equity securities of the Dade Entities reserved for issuance for any purpose. Upon delivery to Hoechst at the Closing of certificates representing the Common Stock and the Class L Common, Series B, and upon Dade's receipt of the Stock, good and valid title to the Common Stock and the Class L Common, Series B, shall pass to and vest in Hoechst, free and clear of all Liens. 5.4 Authority of Dade. Dade has full right, power and authority to enter ----------------- into this Agreement, and has or will have full right, power and authority to enter into each of the other Combination Documents to which it is a party and to carry out the transactions contemplated hereby and thereby. The execution, delivery and performance by Dade of this Agreement and by Dade of each other Combination Document to which it is a party has been or will be duly authorized by all necessary corporate action and no other corporate action on the part of Dade is required in connection therewith. Each of the Combination Documents to be executed and delivered by Dade constitutes, or will when executed and delivered constitute, a valid and binding obligation of Dade, enforceable in accordance with its respective terms. 5.5 No Breach. Except as set forth on the attached Dade Conflicts --------- -------------- Schedule, the execution, delivery and performance by Dade of the Combination - -------- Documents to which it is a party and the consummation of the transactions contemplated hereby and thereby do not and shall not (a) conflict with or result in any breach of any of the provisions of, (b) constitute a default under, (c) result in a violation of, (d) give any third party the right to terminate or to accelerate any obligation under, (e) result in the creation of any Lien upon Dade, the Dade Business or any of the Dade Assets or (f) require any Consents of any court or other Governmental Entity under the provisions of, Dade's or any of the other Dade Entities' constituent documents or any Contract listed on the attached Dade Contracts Schedule, or any Applicable Law. Without limiting the ----------------------- generality -34- of the foregoing, except as set forth on the Pending Asset Sale Schedule, --------------------------- neither Dade nor any other Dade Entity has entered into any agreement, or is bound by any obligation of any kind whatsoever, directly or indirectly to transfer or dispose of (whether by sale of stock or assets, assignment, merger, consolidation or otherwise) any portion of the Dade Assets to any Person, other than in the ordinary course of business, or pursuant to this Agreement, the other Combination Documents, the Restructuring Documents or in contemplation of the transactions contemplated hereby or thereby. Except as set forth on the Dade ---- Conflicts Schedule, none of the Dade Entities is subject to any restrictions - ------------------ upon making loans or advances or paying dividends to, transferring property to, or repaying any indebtedness owed to any affiliate thereof. 5.6 Financial Statements. Each of the following financial statements -------------------- (including in all cases the notes thereto, if any) (collectively, the "Dade ---- Financial Statements") is (or when delivered shall be) consistent with the books - -------------------- and records of the Dade Entities and presents fairly in all material respects the consolidated financial condition, results of operations and cash flows of Dade in accordance with United States GAAP applied on a consistent basis as of the dates and for the periods set forth therein: (a) the audited consolidated balance sheets of Dade as of December 31, 1995 and 1996, and the related statement of operations and cash flows for the twelve-month periods ended December 31, 1995 and 1996, respectively, with the "Dade Latest Balance Sheet" being defined herein as the audited consolidated ------------------------- balance sheet of Dade as of December 31, 1996; and (b) the unaudited consolidated balance sheet of Dade as of March 31, 1997 and as of any subsequent date for the balance sheets delivered pursuant to Section 9.2(b) hereunder, and the related statements of operations and cash flows for the relevant fiscal periods then ended; provided that such unaudited -------- financial statements shall only include footnotes customarily included in interim financial statements and shall be subject to normal and customary year- end adjustments. 5.7 Product and Service Warranty; Product Recall. The attached Dade -------------------------------------------- ---- Warranty Schedule contains copies of the standard terms and conditions of sale - ----------------- for products delivered and services rendered by Dade. Except as set forth on the attached Dade Product Recalls Schedule, during the past three years there ----------------------------- have been no general product recalls, withdrawals, discontinuances or seizures with respect to any products manufactured or sold by any Dade Entity. 5.8 No Material Adverse Change. Since the date of the Dade Latest -------------------------- Balance Sheet, there has been no material adverse change in the business, financial condition, operating results, assets or operations of the Dade Business (including as a consequence of the loss or pending or threatened loss, alone or in the aggregate, of any significant customer, supplier, source of referral, right pursuant to any Contract, or any Consent). -35- 5.9 Absence of Certain Developments. Except for transactions contemplated ------------------------------- by this Agreement or as set forth on the attached Dade Developments Schedule, -------------------------- since the date of the Dade Latest Balance Sheet, none of the Dade Entities has: (a) mortgaged or pledged any of its properties or assets or subjected them to any Lien except Dade Permitted Liens; (b) sold, assigned, licensed (as licensor), disposed or permitted any other Person to use any of its tangible assets (other than in the ordinary course of business) having a fair market value in excess of $1,034,000 in the aggregate, or canceled without fair consideration any debts or claims owing to or held by it; (c) sold, assigned, licensed (as licensor), disposed of or transferred any Permits, Dade Proprietary Rights or other intangible assets having a fair market value in excess of $1,034,000 in the aggregate, or disclosed any proprietary confidential information to any Person except to Hoechst and its representatives herewith or in the ordinary course of business; (d) suffered any damage, destruction or casualty loss to its tangible assets of the Dade Business in excess of $1,034,000, whether or not covered by insurance; (e) suffered any extraordinary losses or canceled or waived any rights having a value in excess of $1,034,000 in the aggregate; (f) made any loans or advances to, guarantees for the benefit of, or any investments in, any Persons in excess of $1,034,000 in the aggregate; (g) instituted or settled any claim or lawsuit involving equitable or injunctive relief or more than $1,034,000 in the aggregate; (h) except (i) in ordinary course of business or (ii) as would otherwise be permitted in 5.9(k) below, entered into, amended, modified or supplemented any Contract with any of its officers, directors, equity holders, agents or its or their affiliates, or with any family member of any such individual, or with any entity in which any such person or individual owns a beneficial interest; (i) entered into any other Contracts involving liabilities or obligations in excess of $1,034,000; (j) accelerated, terminated, modified or canceled any Contracts involving more than $1,034,000; -36- (k) entered into any employment contract (including with an independent contractor) involving more than $414,000 or collective bargaining agreement, written or oral (other than any oral contract for employment at the will of Dade), or modified in any material respect the terms of any existing such contract or agreement; (l) adopted, amended, modified or terminated any bonus, profit- sharing, incentive, benefit, welfare, severance or other plan, Contract or commitment for the benefit of any of its directors, officers and employees; (m) except (i) for the ordinary course salary increases and bonuses paid consistent with past practice and as contemplated by the current business plan or (ii) as required by pre-existing Contracts, made or granted any bonus or any wage or salary increase to any employee or group of employees, or made or granted any increase in any vacation or sick pay policy; (n) engaged in any promotional sales or discount or other similar activity with customers other than in the ordinary course of business; (o) instituted or permitted any change involving more than $1,034,000 in the conduct of the Dade Business, or any significant change in its method of manufacturing, purchase, distribution, sale, lease, management, marketing, promotion or operation; (p) made any change in any method of accounting or accounting policies, other than those required by GAAP and which have been disclosed in writing to Hoechst; (q) entered into any transaction other than in the ordinary course of business or any other transaction involving more than $1,034,000 (whether or not in the ordinary course of business); or (r) agreed or committed to do any of the foregoing. 5.10 Real Property. ------------- (a) Owned Properties. For the purposes hereof, the term "Dade Owned ---------------- ---------- Real Property" shall mean all land and all buildings, fixtures and other - ------------- improvements located thereon, including all easements, rights of way, servitudes, tenements, hereditaments, appurtenances, privileges and other rights with respect thereto owned by the Dade Entities. The Dade Owned Real Property ------------------------ Schedule attached hereto sets forth the address and a true, correct and complete - -------- legal description of the land for each Dade Owned Real Property. Except as set forth in the Dade Owned Real Property Schedule attached hereto, with respect to --------------------------------- each parcel of Dade Owned Real Property, immediately after giving effect to the Closing: (i) the respective Dade Entities shall have good and marketable fee simple title to all such parcels, free and clear of all Liens, except Dade Permitted Liens; (ii there shall be no leases, subleases, licenses, concessions or other agreements (written or -37- oral) granting to any person the right to use or occupy such parcel or any portion thereof; and (ii there shall be no outstanding options, rights of first offer, rights of first refusal or similar rights granted to third parties under local jurisdictions to purchase such parcel or any portion thereof or interest therein. (b) Leased Properties. For the purposes hereof, the term "Dade ----------------- ---- Leased Real Property" shall mean all land, buildings, fixtures and other real - -------------------- property used or occupied by the Dade Business pursuant to any lease, sublease, license, concession or other similar real property interest held by any Dade Entity. The Dade Leased Real Property Schedule attached hereto sets forth the ---------------------------------- address and a list of all leases, subleases, licenses, concessions and other agreements (written or oral) involving annual payments in excess of $517,000 (collectively, the "Dade Real Property Leases") for each Dade Leased Real ------------------------- Property. Dade has made available to Hoechst a true, correct and complete copy of each such written Dade Real Property Lease (including all amendments, extensions, renewals, guaranties and other documents with respect thereto), and in the case of any such oral Dade Real Property Leases a written summary of the basic terms thereof. Except as set forth in the Dade Leased Real Property ------------------------- Schedule attached hereto, with respect to each such Dade Real Property Lease: - -------- (i) the Dade Real Property Lease is (and immediately after giving effect to the Closing shall continue to be) legal, valid, binding, enforceable and in full force and effect; (ii neither the respective Dade Entities nor any other party to the Dade Real Property Lease is (or after giving effect to the Closing shall be) in breach or default thereunder and no event has occurred or circumstance exists which, with the delivery of notice, passage of time or both, would constitute such a breach or default or permit the termination, modification or acceleration of rent thereunder; (ii no party to such Dade Real Property Lease has repudiated (or, to Dade's Knowledge, after giving effect to the Closing shall repudiate) any provision thereof, and there are no (and, to Dade's Knowledge, after giving effect to the Closing there shall not be any) disputes, oral agreements or forbearance programs in effect with respect to the Dade Real Property Lease, and (iv the respective Dade Entities have not assigned, subleased, mortgaged, deeded in trust or otherwise transferred or encumbered the Dade Real Property Lease or any interest therein. (c) Leasehold Improvements. For the purposes hereof, the term "Dade ---------------------- ---- Leasehold Improvements" shall mean all buildings, fixtures and other - ---------------------- improvements owned by the respective Dade Entities and included in each Dade Leased Real Property, regardless of whether such improvements are subject to reversion to the landlord or other third party upon the expiration or termination of the lease, sublease or similar agreement for such Dade Leased Real Property. Immediately after giving effect to the Closing, the respective Dade Entities will (subject to such reversions, if any) have good and marketable title to the Dade Leasehold Improvements, free and clear of all Liens, except Dade Permitted Liens. (d) Condemnation and Litigation. There are no condemnation, --------------------------- expropriation or other eminent domain proceedings pending or, to Dade's Knowledge, threatened, affecting any Dade Owned Real Property, Dade Leased Real Property and Dade Leasehold Improvements (collectively, the "Dade Real --------- Property") or any portion thereof. There is no writ, injunction, decree, order or -38- judgment outstanding, nor any claims, litigation, administrative actions or similar proceedings pending or threatened relating to the ownership, lease, use, occupancy or operation of any Dade Real Property or any portion thereof. (e) Condition of Improvements. All buildings, structures, fixtures ------------------------- and other improvements and all components thereof included within the Dade Owned Real Property and Dade Leased Real Property and all Dade Leasehold Improvements (collectively, the "Dade Improvements") are, in all material respects, in good ----------------- condition and repair and sufficient for the continued operation of the Dade Business. There are no structural deficiencies or latent defects affecting any of the Dade Improvements and there are no facts or conditions affecting any of the Dade Improvements which would, individually or in the aggregate, interfere in any material respect with the use or occupancy thereof in the continued operation of the Dade Business. (f) Access. Each parcel of Dade Real Property and the Dade ------ Improvements thereon have access to a public street adjoining the Dade Real Property. 5.11 Business Assets. On the Closing Date, the Dade Entities shall own --------------- good and marketable title to all right, title and interest of the Dade Entities in, to and under all of the properties, assets and rights of every kind, whether tangible or intangible, real or personal, primarily related to, used in, or held in connection with, the conduct of the Dade Business (the "Dade Assets"), free ----------- and clear of all Liens, except for (a) Liens described on the attached Dade ---- Encumbrances Schedule, (b) Liens for current property taxes not yet due and - --------------------- payable, and (c) other imperfections of title or Liens, if any, which imperfections or Liens do not, or would not be reasonably foreseeable to, individually or in the aggregate, impair the continued use and operation of the Dade Assets to which they relate and do not affect the marketability of the title to the Dade Assets to which they relate (collectively, items (i), (ii) and (iii) above are referred to as the "Dade Permitted Liens"). -------------------- 5.12 Tax Matters. ----------- (a) Except as set forth on the attached Dade Tax Schedule or events ----------------- involving obligations or liabilities less than $517,000: (i) the Dade Entities have timely filed all Tax Returns which are required to be filed with respect to their activities, properties or employees; (ii) all such returns are true, complete and accurate and such filings accurately reflect the Tax liabilities of the Dade Entities; (iii) all Taxes, assessments and other governmental charges imposed upon the Dade Entities, or upon any of the assets, income or franchises of the Dade Entities, have been timely paid or, if not yet payable, will be timely paid; and (iv) there are no actual or proposed Tax deficiencies, assessments or adjustments. (b) The Dade Entities are not liable for the Taxes of another Person (x) as a transferee or successor, (y) by contract or indemnity or (z) otherwise. -39- (c) Except as set forth on the attached Dade Tax Schedule, no Dade ----------------- Entity is or shall become obligated (under any contract entered into on or before the Closing Date) to make any payments that shall be nondeductible under Section 280G of the Code (or any corresponding provision of state, local or foreign Tax law). Except as set forth on the attached Dade Tax Schedule, no ----------------- Dade Entity will be required as a result of a change in method of accounting, a "closing agreement" as described in Section 7121 of the Code (or any corresponding provision of state, local or foreign income Tax law), a deferred intercompany gain described in Treasury Regulation Sections 1.1502-13, or an excess loss account described in Treasury Regulation Sections 1.1502-19 (or any corresponding or similar provision or administrative rule of federal, state, local or foreign income tax law), to include any item of income in, or exclude any item of deduction from, taxable income for any taxable year or portion thereof beginning on or after the Closing Date. 5.13 Absence of Undisclosed Liabilities. As of the Closing, the Dade ---------------------------------- Entities shall have no obligations or liabilities involving more than $517,000 (whether accrued, absolute, contingent, unliquidated or otherwise, whether due or to become due and regardless of when or by whom asserted), except (a) obligations under Contracts described on the attached Dade Contracts Schedule ----------------------- and the other Schedules attached hereto or under Contracts and commitments entered into in the ordinary course of business which are not required to be disclosed thereon due to specified dollar thresholds (but not liabilities for breaches or alleged breaches thereof occurring on or prior to the Closing Date), (b) liabilities reflected on the liability side of the Dade Latest Balance Sheet, (c) liabilities and obligations which have arisen after the date of the Dade Latest Balance Sheet in the ordinary course of business (none of which is a liability for breach or alleged breach of contract, tort, infringement, claim, lawsuit or breach of warranty which could cause or give rise to obligations or liabilities in excess of $517,000), and (d) other liabilities and obligations expressly disclosed on the Dade Undisclosed Liabilities Schedule attached ------------------------------------- hereto. 5.14 Contracts and Commitments. ------------------------- (a) Except as set forth on the attached Dade Contracts Schedule ----------------------- (which Dade Contracts Schedule indicates the parties thereto), neither Dade nor ----------------------- any of the other Dade Entities is a party to any oral or written: (i) plan or other Contract providing for bonuses, pensions, options, stock purchases, deferred compensation, retirement payments, profit sharing, collective bargaining or the like, or any Contract with any labor union involving in any such case in excess of $414,000; (ii) management agreement or other Contract for the employment of any officer, partner, individual employee or other person on a full-time, part- time or consulting basis or providing for the payment of any cash or other compensation or benefits upon the sale of the Dade Business or a change of control (whether upon the occurrence of any additional events or conditions or otherwise) involving in any such case in excess of $414,000 or otherwise prohibiting competition; -40- (iii) Contract relating to the borrowing of money or to mortgaging, pledging or otherwise placing a Lien on any of the Dade Assets, other than Dade Permitted Liens; (iv) Contract with respect to the lending or investing of funds involving more than $517,000; (v) license or royalty agreement involving more than $517,000; (vi) guaranty, suretyship, letter of comfort or similar undertaking involving more than $517,000 of any obligation for borrowed money or that otherwise relates to the Dade Assets, other than endorsements made for collection; (vii) Contract or group of related Contracts with the same party for the purchase or sale of commodities, supplies, products or other personal property or for the furnishing or receipt of services having a selling price in excess of $1,034,000; (viii) Contract that would impose any significant restrictions upon the ability of any Dade Entity or Acquired Entity from freely engaging in the Dade Business anywhere in the world; (ix) Contract relating to the manufacturing, distribution, marketing, advertising or promotion of products or services (whether by the Dade Business or for the Dade Business) involving in any such case more than $1,034,000; (x) Contract relating to the acquisition or sale of a business (or any portion thereof) having a fair market value in excess of $517,000; (xi) other Contract or group of related Contracts with the same party involving a potential liability to any party thereto of more than $1,034,000; (xii) other Contracts material to the Dade Business, whether or not entered into in the ordinary course of business, the absence of which would reasonably be likely to have an adverse effect involving more than $1,034,000. (b) Except as specifically disclosed in the attached Dade ---- Contracts Schedule or as would not reasonably involve liabilities or obligations - ------------------ in excess of $1,034,000, (i) no Contract required to be disclosed on the Dade ---- Contracts Schedule has been (or, by giving effect to the Closing, will be) - ------------------ breached in any respect or has been (or, to Dade's Knowledge, after giving effect to the Closing, will be) canceled by the other party thereto, and since the date of the Dade Latest Balance Sheet, none of the significant customers, suppliers, outside service providers or sources of referral of the Dade Business has notified Dade or any of the other Dade Entities in writing that it will stop or decrease the rate of business done with or referred to the Dade Business, and (ii) Dade -41- and the other Dade Entities have performed all of their obligations under the Contracts required to be listed on the Dade Contracts Schedule and, to ----------------------- Dade's Knowledge, there is no breach of or default by any other party under any Contract to which any of them is a party or any event which, upon giving of notice or lapse of time or both, or upon and after giving effect to the transactions contemplated by the Combination Documents, would constitute such a breach or default. (c) A true and correct copy of all Contracts which are referred to on the attached Dade Contracts Schedule, together with all amendments, ----------------------- exhibits, attachments, waivers or other changes thereto, have been made available to Hoechst (or, in the case of any oral Contract or Contract withheld due to confidentiality requirements, a summary of the material terms of such Contract has been supplied to Hoechst). 5.12 Proprietary Rights. ------------------ (a) The Dade Proprietary Rights Schedule sets forth a complete and -------------------------------- correct list of all of the following that are owned by, used by, filed by or on behalf of, or entered into by, Dade or any other Dade Entity: (i) patented or registered Dade Proprietary Rights and pending patent applications or other applications for registrations of Dade Proprietary Rights; (ii) unregistered trademarks, unregistered service marks, trade names and corporate names; (iii) computer software (other than software purchased or licensed for less than a total cost of $517,000); and (iv) all licenses or similar agreements or arrangements covering Dade Proprietary Rights to which either Dade or any other Dade Entity is a party, either as licensee or licensor, involving more than $517,000; provided, however, that such list may be amended prior to the Closing as mutually agreed by Hoechst and Dade. "Dade Proprietary Rights" shall mean ----------------------- all of the following assets, properties and rights which are related to, used in or necessary for the conduct of the Dade Business: patents, patent applications, inventors certificates, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice), including any reissues, continuations, continuations-in-part, divisions, revisions, extensions or reexaminations thereof; trademarks, service marks, trade dress, trade names, corporate names, logos (and all translations, adaptations, derivations and combinations of the foregoing) and Internet domain names, together with all of the goodwill associated with each of the foregoing; copyrights, copyrightable works and mask works and registrations and applications for registration and renewals for any of the foregoing; computer software, data, data bases and documentation thereof; trade secrets and other confidential informa tion (including, without limitation, ideas, formulae, compositions, know-how, manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, improvements, proposals and technical data). (b) Except as otherwise set forth on the attached Dade Proprietary ---------------- Rights Schedule: - --------------- (i) Dade and the other Dade Entities own and possess, and immediately after the Closing the Dade Entities (on a consolidated basis) shall own and possess, all right, title -42- and interest in and to, or have a valid and enforceable license from affiliated or unaffiliated third parties to use, free and clear of all Liens (including, but not limited to, any injunction, judgment, order, decree, ruling or agreement), all of the Dade Proprietary Rights necessary for the operation of the Dade Business as currently conducted; (ii) neither Dade nor any other Dade Entity has infringed, misappropriated or otherwise conflicted with, and the operation of the Dade Business as currently conducted to be conducted will not infringe, misappropriate or otherwise conflict with, any valid proprietary rights of any third party, which infringement, misappropriation or other conflict could reasonably be expected to result in an adverse effect on the Dade Business in excess of $517,000; and neither Dade nor any other Dade Entity has received any written notices regarding any of the foregoing (including, without limitation, any demands or offers to license any proprietary rights from any third party); (iii) no claim by any third party contesting the validity, enforceability, use or ownership of any Dade Proprietary Rights owned or used by Dade or any other Dade Entity has been made within the past six years and not resolved, is currently outstanding or is, to Dade's Knowledge, threatened; (iv) Dade and the other Dade Entities have taken all necessary action to maintain and protect all Dade Proprietary Rights owned by them the loss of which would be reasonably likely to have an adverse effect on the Dade Business in excess of $517,000; (v) to Dade's Knowledge, the owners of any of the Dade Proprietary Rights licensed to Dade or to any other Dade Entity have taken all necessary action to maintain and protect the Dade Proprietary Rights subject to such licenses; (vi) no loss of Dade Proprietary Rights by Dade or any of the other Dade Entities (other than by expiration in the ordinary course) is pending or, to Dade's Knowledge, threatened; and (vii) to Dade's Knowledge, none of the proprietary rights owned or used by any third party would reasonably could be expected to supersede or make obsolete any product or process of Dade or any other Dade Entity, or to limit the Dade Business as currently conducted. 5.16 Litigation. Except as set forth on the attached Dade Litigation ---------- --------------- Schedule or the attached Dade Environmental and Safety Schedule, there are no - -------- -------------------------------------- actions, suits, proceedings, orders or investigations pending or, to Dade's Knowledge, threatened against or adversely affecting any of the Dade Entities, the Dade Assets or the Dade Business at law or in equity, or before or by any Governmental Entity involving in excess of $517,000. The Dade Entities, the Dade Assets and the Dade Business are not subject to or bound by any outstanding orders, judgments, or decrees of any court or other Governmental Entity which could cause or give rise to obligations or liabilities in -43- excess of $517,000, except as set forth on the attached Dade Litigation Schedule ------------------------ or the attached Dade Environmental and Safety Schedule. -------------------------------------- 5.17 Brokerage. There are no claims for brokerage commissions, finder's --------- fees or similar compensation in connection with the transactions contemplated by this Agreement based on any arrangement or agreement made by or on behalf of the Dade Entities. 5.18 Employees. To Dade's Knowledge, no key executive employee and no --------- group of employees of any of the Dade Entities has any plans to terminate or modify his or her status as a Dade Employee, including upon consummation of the transactions contemplated hereby. Except as set forth on the attached Dade ---- Litigation Schedule, there are no claims, actions, proceedings or investigations - ------------------- pending or threatened against any of the Dade Entities with respect to or by any employee or former employee of the Dade Business and there are no claims, actions, proceedings or investigations pending or threatened against any employee or former employee of the Dade Business with respect to or concerning the Dade Business that would involve liabilities in excess of $517,000. The Dade Entities have not experienced, within the past three years, any strikes, grievances, claims of unfair labor practices (including violation of the German Shop Constitution Act) or other collective bargaining disputes. The Dade Entities have not engaged in any unfair labor practices (including violation of the German Shop Constitution Act). There are no organizational efforts presently made or, to Dade's Knowledge, threatened by or on behalf of any labor union with respect to the Dade Employees. 5.19 Employee Benefit Plans. Except as set forth on the Dade Employee ---------------------- ------------- Benefit Schedule, none of the Dade Entities maintains, or is required to - ---------------- contribute, on behalf of any Person employed in connection with the Dade Business ("Dade Employees"), to any Plans. All Plans set forth on the Dade -------------- ----- Employee Benefit Schedule, and their related trusts, if any, comply in form and - ------------------------- have been administered in accordance with all Applicable Laws of the countries in which such plans are maintained, including the applicable requirements of ERISA, and any necessary Consents of the Plans by Governmental Entities have been obtained. 5.20 Insurance. The attached Dade Insurance Schedule describes each --------- ----------------------- insurance policy maintained with respect to the Dade Business. Each such policy is in full force and effect. Except as set forth on the attached Dade Insurance -------------- Schedule, neither Dade nor any of the other Dade Entities is in default with - -------- respect to its obligations under any insurance policy maintained by it. The insurance coverage with respect to the Dade Business is customary for businesses of similar size engaged in similar lines of business. -44- 5.21 Compliance with Laws; Permits; Certain Operations. ------------------------------------------------- (a) Except as set forth on the attached Dade Compliance Schedule: ------------------------ (i) each of the Dade Entities has complied with all Applicable Laws relating to the operation of the Dade Business, and no written notices have been received by, and no claims have been filed against, the Dade Entities alleging a violation of any such Applicable Laws; (ii) the Dade Entities have complied with all Applicable Laws relating to the employment of labor, including provisions thereof relating to wages, hours, equal opportunity, collective bargaining and the payment of social security and other Taxes; and (iii) except as set forth on the attached Dade Permits Schedule, --------------------- the Dade Entities hold all Permits required for the conduct of the business of Dade (including the operation of the Dade Real Property and the Dade Assets). (b) Except as set forth on the attached Dade Permits Schedule, each --------------------- Dade Entity is in compliance with all terms and conditions of all of the Permits. Dade or another Dade Entity, as the case may be, is the exclusive holder of all such Permits, each of which is in full force and effect, and there is no (and, to Dade's Knowledge, no reasonable basis for any) action, proceeding or claim which affects the validity of any such Permit. Except as set forth on the attached Dade Permits Schedule, there are no proposed Permits pending before --------------------- any Governmental Entity. 5.22 Environmental and Safety Matters. Except as disclosed on the attached -------------------------------- Dade Environmental and Safety Schedule or as would not reasonably be expected to - -------------------------------------- give rise individually or in the aggregate to liabilities or obligations in excess of $517,000: (a) The Dade Entities have complied and are in compliance with all Environmental and Safety Requirements, including all Environmental Permits. (b) The Dade Entities have not received any written notice, or to Dade's Knowledge, any other notice regarding any actual or potential liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial or corrective obligations, arising under Environmental and Safety Requirements. (c) None of the following exists at any property or facility owned, occupied or operated by the Dade Entities: underground storage tanks; asbestos-containing material in friable or damaged condition; landfills, surface impoundments, or disposal areas for regulated substances. (d) The Dade Entities have not treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, or released any substance, including any hazardous -45- substance, or owned or operated any facility or property (and no such property is contaminated by any such substance), in a manner that has given or would give rise to liabilities, including any liability for response costs, corrective action costs, personal injury, property damage, natural resource damages or attorneys fees pursuant to CERCLA or any other Environmental and Safety Requirements. (e) The execution, delivery and performance of the Combination Documents shall not result in any obligations for site investigation or cleanup, or notification to or consent of government agencies or third parties, pursuant to any of the so-called "transaction-triggered" or "responsible property transfer" Environmental and Safety Requirements. (f) The Dade Entities have not, either expressly or by operation of law, assumed or undertaken any liability, including any obligation for corrective or remedial action, of any other Person relating to Environmental and Safety Requirements. 5.23 Closing Date. All of the representations and warranties of Dade in ------------ this Article V and elsewhere in this Agreement and all information delivered in any Schedule or Exhibit attached hereto or in any certificate delivered to Hoechst are true and correct on the date of this Agreement and shall be true and correct as of the Closing, other than such representations and warranties as are made as of a specific date, which shall be true as of such date. ARTICLE VI TERMINATION ----------- 6.1 Termination. This Agreement may be terminated at any time prior to ----------- the Closing: (a) by the mutual written consent of Dade and Hoechst; (b) by Dade, if there has been a material breach by Hoechst of a representation or warranty or a covenant or agreement set forth in this Agreement, which has not been cured within 30 days after written notification thereof by Dade and would cause a condition to Closing to be unable to be satisfied by the dates set forth in Section 6.1(e) below; (c) by Hoechst, if there has been a material breach by Dade of a representation or warranty or a covenant or agreement set forth in this Agreement, which has not been cured within 30 days after written notification thereof by Hoechst and would cause a condition to Closing to be unable to be satisfied by the date set forth in Section 6.1(e) below; (d) by Dade, if Dade does not accept the Hoechst Valuation by the Valuation Drop Date pursuant to Section 1.4 hereunder; -46- (e) by either Dade or Hoechst, if the Closing has not occurred by December 31, 1997 (the "Termination Date"); provided that the party seeking ---------------- -------- termination pursuant to this clause (e) of Section 6.1 is not in material breach of any of its representations, warranties, covenants or agreements contained in this Agreement; provided further that, if Consents required under Sections -------- ------- 2.1(c) and 2.2(c) with respect to H-S-R and EC Merger Control have not been obtained by the Termination Date, the Termination Date shall be automatically extended to March 31, 1998 so long as neither Dade nor Hoechst determines in its reasonable judgment that either (i) such H-S-R and EC Merger Control Consents cannot be obtained on or prior to March 31, 1998 or (ii) the continuation of this Agreement would have a Material Adverse Effect on either the Business, taken as a whole, or the Dade Business, taken as a whole; (f) by Dade within five Business Days after receipt by Dade of the schedule described in Section 3.2(j) hereunder, if (i) Dade determines that it is not reasonably satisfied with (A) the financial information that Hoechst has indicated pursuant to such schedule that it will provide or (B) the timing for delivery thereof or (ii Dade is not reasonably satisfied that Hoechst will be able to provide such financial information within the time for delivery of such financial information as set forth on such schedule; (g) by Dade within five Business Days after receipt by Dade of the audited financial statements for the Business for the fiscal year ended December 31, 1995 as contemplated by Section 9.2(a) hereof, if such financial statements reflect a material adverse deviation from the revenues and results of operations set forth in the draft of such financial statements delivered to Dade on or prior to the date of this Agreement; (h) by either Dade or Hoechst, if Dade and Hoechst have not agreed upon the Consent Indemnity Limit prior to the Termination Date pursuant to Section 1.4(b); (i) by Dade on the Valuation Drop Date, if the parties have not agreed upon the Expenditure Agreement pursuant to Section 1.4(c); or (j) by Dade prior to the Termination Date, if Dade and Hoechst have not agreed upon, pursuant to Section 1.4(d), which rights under the Stockholders Agreement shall be Designation Rights. In the event of termination by Hoechst or Dade pursuant to this Section 6.1, written notice thereof (describing in reasonable detail the basis therefor) shall forthwith be delivered to the other party. 6.2 Effect of Termination. In the event of termination of this Agreement --------------------- by either Dade or Hoechst as provided above, this Agreement shall forthwith become void and of no further force and effect, except that the covenants and agreements set forth in Sections 3.8, 6.1, 6.2, 7.3, 7.5, 7.8 and 7.14 shall survive such termination indefinitely, and except that nothing in Section 6.1 or this Section 6.2 shall be deemed to release any party from any liability for any breach by such party of -47- the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by another party of its surviving obligations under this Agreement. ARTICLE VII ADDITIONAL AGREEMENTS --------------------- 7.1 Survival of Representations and Warranties. The representations and ------------------------------------------ warranties in this Agreement shall survive the Closing as follows: (a) the representations and warranties in Sections 4.1 (Organization and Corporate Power), 4.3 (Capital Stock of Hoechst Subsidiary), 4.4 (Authority of Hoechst), 4.17 (Brokerage), 4.25 (Investment Representations of Hoechst), 4.27 (Closing Date) (to the extent Section 4.27 relates back to any other Sections referred to in this Section 7.1(a)), 5.1 (Organization and Corporate Power), 5.3 (Capital Stock of Dade Entities), 5.4 (Authority of Dade), 5.17 (Brokerage) and 5.23 (Closing Date) (to the extent Section 5.23 relates back to any other Sections referred to in this Section 7.1(a)) shall survive indefinitely; (b) the representations and warranties in Sections 4.12 (Tax Matters), 4.27 (Closing Date) (to the extent Section 4.27 relates back to any other sections referred to in this Section 7.1(b)), 5.12 (Tax Matters) and 5.23 (Closing Date) (to the extent Section 5.23 relates back to any other sections referred to in this Section 7.1(b)) shall survive through and until the applicable statute of limitations expires; and (c) all other representations and warranties in this Agreement shall survive through and until, and terminate on, the third-year anniversary of the Closing Date; provided that any representation or warranty in respect of which indemnity may - -------- be sought under Section 7.2, and the indemnity with respect thereto, shall survive the time at which it would otherwise terminate pursuant to this Section 7.1 if written notice describing in reasonable detail the facts and circumstances of the inaccuracy or breach thereof giving rise to such right of indemnity shall have been received by the party against whom such indemnity may be sought prior to such time. The representations and warranties in this Agreement shall survive for the periods set forth in this Section 7.1 and shall in no event be affected by any investigation, inquiry or examination made for or on behalf of Dade or Hoechst, or the knowledge of any of the Dade Entities' or the Hoechst Entities' officers, directors, shareholders, employees, agents, or other representatives or the acceptance by Dade or Hoechst of any certificate or opinion hereunder. Without limiting the generality of the foregoing, breaches of representations and warranties falling within the exceptions to Sections 2.1(a) and 2.2(a) hereunder shall nonetheless survive for the periods set forth in this Section 7.1. -48- 7.2 General Indemnification. ----------------------- (a) Indemnification for Benefit of Dade. Subject to the provisions of ----------------------------------- Section 7.2(g), Hoechst shall indemnify Dade and its affiliates (including affiliates after the Closing), and its and their stockholders, officers, directors, employees, agents, representatives, successors and per mitted assigns (collectively, the "Dade Parties") and save and hold each of them ------------ harmless against and pay on behalf of or reimburse such Dade Parties as and when incurred for any loss, liability, demand, claim, action, cause of action, cost, damage, deficiency, tax, penalty, fine or expense, whether or not arising out of third party claims (including interest, penalties, reasonable attorneys' fees and expenses and all reasonable amounts paid in investigation, defense or settlement of any of the foregoing) (collectively, "Losses"), which any such ------ Dade Party may suffer, sustain or become subject to, as a result of, in connection with, relating or incidental to or by virtue of: (i) subject to Section 7.1, any breach of representation and warranty set forth Article IV of this Agreement without regard to any specified dollar limitations or thresholds set forth in such Article IV (other than such dollar limitations or thresholds set forth in Sections 4.9(f), (g), (i), (j), (k), (o) and (r), 4.14(a)(i), (ii), (iv), (v), (vi), (vii), (ix), (x) and (xi) and 4.15(a)); (ii) any nonfulfillment or breach of any covenant, agreement or other provision by Hoechst under this Agreement; or (iii) any liability or obligation which is an Indemnified Liability (as defined in Section 9.25 herein); provided that Hoechst shall not have any liability under clause (i) above with - -------- respect to any particular breach of representation and warranty (other than pursuant to Sections 4.1, 4.3 and 4.4 (and Section 4.27 to the extent related to the foregoing Sections)) unless the Loss for such item exceeds $250,000 and the aggregate of all Losses relating thereto for which Hoechst would, but for this proviso, be liable exceeds on a cumulative basis an amount equal to $10,000,000, and then only to the extent of any such excess; and provided further that the -------- ------- aggregate amount for which Hoechst shall be liable under clause (i) above shall in no event exceed $100,000,000. Dade shall take and shall cause its affiliates to make a good faith attempt to mitigate all such Losses upon and after Dade becomes aware of any circumstances which could reasonably be expected to give rise to such Losses. (b) Indemnification for Benefit of Hoechst. Dade shall indemnify -------------------------------------- Hoechst and its affiliates (including affiliates after the Closing), and its and their stockholders, officers, directors, employees, agents, representatives, successors and permitted assigns (collectively, the "Hoechst Parties") and save --------------- and hold each of them harmless against and pay on behalf of or reimburse such Hoechst Parties as and when incurred for any Losses that the Hoechst Parties may suffer, sustain or become subject to, as the result of, in connection with, relating or incidental to or by virtue of: -49- (i) subject to Section 7.1, any breach of representation and warranty set forth in Article V of this Agreement without regard to any specified dollar limitations or thresholds set forth in such Article V (other than such dollar limitations of thresholds set forth in Sections 5.9(f), (g), (i), (j), (k), (o) and (r), 5.14(a)(i), (ii), (iv), (v), (vi), (vii), (ix), (x) and (xi) and 5.15(a)); (ii) any nonfulfillment or breach of any covenant, agreement or other provision by Dade under this Agreement; or (iii) payments, liabilities or other obligations under or with respect to the San Jose Sublease. (iv) other than Indemnified Liabilities and other than as otherwise expressly provided in this Agreement, any liability or obligation paid or discharged by Hoechst or any of its affiliates (other than Dade and its subsidiaries) after the Closing (or any related Loss) that arises out of or relates to the ownership, use or operation of the Business or the Business Assets; or (v) except with respect to the $26.9 million face amount of receivables referred to in Section 1.7, any claims by Dade and its affiliates against Hoechst and its affiliates with respect to intercompany accounts referred to in Section 7.17 hereof; provided that the amount of Losses (I) with respect to clause (i) above (other - -------- than Losses relating to Section 5.3 (as it relates to the capital stock of Dade) or 5.4) or for breach of any covenant set forth in Section 3.3, 3.5 or 7.3(b) hereunder (but with respect to 7.3(b) hereunder, only for Losses due to payments made to any Person in excess of the amounts agreed upon by the parties hereto pursuant to Section 7.3(b) hereunder) shall be determined by multiplying, in order to acknowledge in certain cases that Hoechst's Loss may be suffered indirectly as a shareholder of Dade, the Hoechst Percentage times such Losses and (II) with respect to clause (i) above for Losses relating to Section 5.3 (as it relates to the capital stock of Dade) or 5.4 or for breach of any covenant set forth in Section 3.6, 3.7 or 7.19 shall be determined by adding to such Losses an amount equal to the Hoechst Percentage times such Losses; provided -------- further that, Dade shall not have any liability under clause (i) above with - ------- respect to any particular breach of representation and warranty (other than pursuant to Sections 5.1, 5.3 and 5.4 (and Section 5.23 to the extent related to the foregoing Sections)) unless the Loss for such item exceeds $517,000 (determined without applying the Hoechst Percentage to such Losses) and the aggregate of all Losses relating thereto for which Dade would, but for this proviso, be liable exceeds on a cumulative basis an amount equal to $20,769,000 (determined without applying the Hoechst Percentage to such Losses), and then only to the extent of any such excess; and provided further that the aggregate -------- ------- Losses for which Dade shall be liable under clause (i) above shall in no event exceed $207,690,000 (determined without applying the Hoechst Percentage to such Losses). Hoechst shall take and shall cause its affiliates to make a good faith attempt to mitigate all such Losses upon and after Hoechst becomes aware of any circumstances that -50- could reasonably be expected to give rise to such Losses. As used herein, "Hoechst Percentage" shall be determined, in the case of each claim for ------------------ indemnification hereunder, as of the date of written notice of such claim and shall equal the percentage (calculated to the fourth decimal point) obtained by dividing (A) the Basic Percentage, by (B) one minus the Basic Percentage. The "Basic Percentage" shall be determined as of the date of each such written ---------------- notice and shall equal the percentage (calculated to the fourth decimal point) obtained by dividing (x) the aggregate number of shares of Common Stock and Class L Common, Series B, owned by Hoechst at such time (but only to the extent that such Common Stock and Class L Common, Series B, were either acquired by Hoechst at the Closing hereunder or issued to Hoechst prior to the date of such claims upon the exercise of the Warrant), by (y) the total number of shares of Common Stock, Class L Common, Series B, and Class L Common Stock of Dade, par value $.01 per share ("Class L Common"), outstanding at such time plus all options to purchase shares of Common Stock, Class L Common and Class L Common, Series B, that were originally issued to employees of Dade and its affiliates and that are exercisable at such time. For example, if on the date of a written notice (i) Hoechst owned an aggregate of 450 shares of Common Stock and Class L Common, Series B, (80 acquired pursuant to the Warrant, 325 acquired pursuant to this Agreement and 45 acquired by other means) and (ii) an aggregate of 1,200 shares of Common Stock, Class L Common and Class L Common, Series B, were outstanding on a fully diluted basis (950 shares outstanding, vested employee options to purchase 200 shares and other options to purchase 50 shares), then the Basic Percentage would equal 35.2174% (405 / 1,150 = 0.352174) and the Hoechst Percentage would equal 53.8462% (0.35/(1.00 - 0.35) = 0.538462). (c) Manner of Payment. Any indemnification of the Dade Parties or the ----------------- Hoechst Parties pursuant to this Section 7.2 shall be effected by wire transfer of immediately available funds from Hoechst or Dade, as the case may be, to an account designated by Dade or Hoechst, as the case may be, within 15 days after the determination thereof. Any such indemnification payments shall include interest at the Prime Rate from the date any such Loss is suffered or sustained to the date of payment. Notwithstanding the foregoing, if in the good faith judgment of Dade's board of directors Dade's payment of any portion of such Losses in immediately available funds would impose a significant financial burden on Dade, Dade shall have the option to issue for such portion pay-in-kind preferred stock convertible into Common Stock at the Warrant Price (as defined in the Warrant, but calculated on a per share basis), with a cumulative annual dividend rate, determined by an Independent Investment Banker (as defined below), based upon market conditions and for companies with a comparable credit rating, in order to reflect the financial condition of Dade after such Losses so as to give the preferred stock a market value equal upon issuance to its face amount. Any indemnification payments made pursuant to this Agreement shall be deemed to be adjustments to the Purchase Price for tax purposes. The parties acknowledge and agree that a "significant financial burden" (as used in this Section 7.2(c)) would be imposed on Dade in order to pay Losses in cash if, for example, Dade's board of directors determined in its good faith judgment that Dade, after taking into account such payment, should obtain additional credit facilities (or expand existing credit facilities) in order to meet working capital and other business needs in the ordinary course of business and that obtaining such additional credit facilities (or expanding existing credit facilities) -51- would be burdensome to Dade. "Independent Investment Banker" means, for ----------------------------- the purposes of this Section 7.2(c), the remaining investment banking firm from the list of the five highest ranking New York-based investment banking firms (other than Goldman (or any successor or Affiliate)), rated by the gross dollar value of underwritten public offerings lead-managed during the preceding four -calendar - quarter period, after Hoechst and Dade shall each have alternately eliminated one such firm from such list until only one such firm remains. (d) Defense of Third Party Claims. The party which is entitled to be ----------------------------- indemnified under this Section 7.2 (an "Indemnitee") shall promptly give written ---------- notice hereunder to the party required to indemnify under this Section 7.2 (an "Indemnitor") after obtaining notice of any claim as to which recovery may be - ----------- sought against the Indemnitor because of the indemnity in this Section 7.2, describing the claim, the amount thereof (if known and quantifiable), and the basis thereof, in each case to the extent known by the Indemnitee; provided that -------- the failure to so notify an Indemnitor shall not relieve the Indemnitor of its obligations hereunder except to the extent that (and only to the extent that) such failure shall have caused the Losses for which the Indemnitor is obligated to be greater than such Losses would have been had the Indemnitee given the Indemnitor prompt notice hereunder, including any Loss sustained by the Indemnitee because of late notice of claims to its insurance carriers. Any Indemnitor shall be entitled to participate in the defense of any claim of a third party (a "Third Party Claim") giving rise to an Indemnitee's claim for ----------------- indemnification at such Indemnitor's expense, and at its option (subject to the limitations set forth below) shall be entitled to assume the defense thereof and in connection therewith appoint a nationally recognized and reputable counsel reasonably acceptable to the Indemnitee to be the lead counsel in connection with such defense; provided that: -------- (i) the Indemnitee shall be entitled to participate in the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided that the fees and expenses of such separate -------- counsel shall be borne by the Indemnitee (other than any fees and expenses of such separate counsel that are incurred prior to the date the Indemnitor effectively assumes control of such defense which, notwithstanding the foregoing, shall be borne by the Indemnitor); (ii) if the Indemnitor does not assume the defense of such Third Party Claim in accordance with this Section 7.2, the Indemnitee will not be liable for any legal expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, -------- ------- that if the Indemnitor fails to take reasonable steps necessary to defend diligently such Third Party Claim, the Indemnitee may assume its own defense, and the Indemnitor will be liable for all reasonable costs or expenses paid or incurred in connection therewith; and (iii) if the Indemnitor shall control the defense of any such Third Party Claim, the Indemnitor shall obtain the prior written consent of the Indemnitee (which shall not be unreasonably withheld) before ceasing to defend such Third Party Claim -52- or before entering into any settlement of such Third Party Claim if such settlement does not expressly and unconditionally release, with prejudice, the Indemnitee from all liabilities and obligations with respect to such Third Party Claim. (e) Determination of Losses, etc. The amount of any Losses for which ----------------------------- indemnification is provided under this Section 7.2 shall be (A) increased to take account of any actual net Tax cost incurred by the Indemnitee (or its affiliates) arising from the receipt of indemnity payments hereunder (grossed up for such increase) and (B) reduced to take account of any actual net Tax benefit realized by the Indemnitee (or its affiliates) arising from the incurrence or payment of any such Loss. In computing the amount of any such Tax cost or benefit, the Indemnitee (or its affiliates, if applicable) shall be deemed to recognize all other items of income, gain, loss, deduction or credit before recognizing any item arising from the receipt of any indemnity payment hereunder or the incurrence or payment of any indemnified Losses. Any indemnification payment hereunder shall initially be made without regard to this Section 7.2(e) and shall be reduced to reflect any such net Tax benefit or increased to reflect any such net Tax cost only after the Indemnitee (or its affiliates) has actually realized such benefit or cost. For purposes of this Agreement, an Indemnitee (or its affiliates) shall be deemed to have "actually realized" a net Tax ----------------- benefit or net Tax cost to the extent that, and at such time as, the amount of Taxes payable by such Indemnitee (or its affiliates) is reduced below or increased above, as applicable, the amount of Taxes that such Indemnitee (or its affiliates) would be required to pay but for the receipt of the indemnity payment or the incurrence or payment of such Loss, as the case may be. The amount of Losses for which indemnification is provided under this Section 7.2 shall not include any liabilities and obligations if and to the extent that any such liabilities or obligations have actually reduced Net Assets. (f) Sole Remedy. Except as otherwise expressly provided in this ----------- Agreement, Hoechst and Dade hereby acknowledge and agree that the sole and exclusive remedy of the Hoechst Parties and the Dade Parties with respect to any and all Losses relating to the subject matter of this Agreement shall be pursuant to the indemnification provisions set forth in this Article VII. In furtherance of the foregoing, Dade and Hoechst hereby waive, to the fullest extent permitted under Applicable Law, rights with respect to any and all other Losses they or the other Hoechst Parties or the other Dade Parties may incur relating to the subject matter of this Agreement. Except as set forth in this Agreement, neither Dade nor Hoechst is making any representation, warranty, covenant or agreement with respect to the matters contained herein. Anything herein to the contrary notwithstanding, no breach of any representation, warranty, covenant or agreement contained herein shall give rise to any right on the part of Hoechst or Dade, after the consummation of the purchase and sale of the Stock contemplated hereby, to rescind this Agreement or any of the transactions contemplated hereby. (g) Indemnification in Favor of the GMBH Company or HDHC. If Hoechst ---------------------------------------------------- enters into any agreement (including pursuant to the Restructuring Documents) with the GMBH Company or HDHC prior to the Closing, which agreement provides that Hoechst shall indemnify the GMBH Company or HDHC, as the case may be, for the indemnification obligations of Hoechst -53- with respect to Section 7.4, 7.12, 7.13 or 7.15 or any Indemnified Liability, Dade shall not be entitled to any indemnification from Hoechst under this Agreement if and to the extent that Hoechst shall have indemnified the GMBH Company or HDHC, as the case may be, for such indemnification obligations. It is hereby agreed that such agreements to indemnify the GMBH Company shall cover obligations related to the Acquired Entities located in Europe, other than in the United Kingdom, Switzerland and Turkey (the "European Acquired Entities"), -------------------------- and such agreements to indemnify HDHC shall cover obligations related to the Acquired Entities in any other country, including the United Kingdom, Switzerland and Turkey (the "Non-European Acquired Entities"). ------------------------------ 7.3 Expenses. -------- (a) Hoechst will pay all taxes, costs, expenses and other obligations incurred or payable (i) in connection with the transactions contemplated by the Restructuring Documents and which taxes, costs, expenses and other obligations are necessary to incur in connection with such transactions as described therein or (ii) in connection with other transactions necessary to otherwise separate the Business from Hoechst and its affiliated companies (including in connection with transfers in or out of the Acquired Entities, whether before or after Closing). In no event shall such taxes, costs, expenses and other obligations include any liabilities if and to the extent that any such liabilities reduced the amount of Net Assets. (b) Upon the consummation of the transactions contemplated herein (and, with respect to Hoechst (and its affiliates), only upon such consummation), Dade shall pay (or reimburse Hoechst (or its affiliates), as the case may be) for all third-party, out-of-pocket fees, costs and expenses of Hoechst's (or its affiliates') and Dade's advisors for services rendered in connection with the Combination Documents, including investment advisors, accountants, lawyers and consultants, if any, subject to any prior agreements of the parties hereto as to the amount of any particular fees, costs and expenses; provided that such payments shall be limited to activities directly related to - -------- the business combination contemplated hereby, such as due diligence and negotiations, but excluding, with respect to Hoechst and the Business, audits, other ordinary course activities and the transactions, agreements and arrangements referred to in Section 7.3(a) above. To the extent that on or prior to the Closing Hoechst has paid to any third-party any amount with respect to any such fees, costs or expenses for which Dade is obligated to pay pursuant to the foregoing, the amount of such payments by Hoechst shall be credited to the Net Assets as of the Closing subject to receipt by Dade of reasonable and appropriate documents for such fees, costs and expenses. (c) Hoechst (with respect to the Business) and Dade (with respect to Dade) will cooperate and use reasonable best efforts to obtain all requisite third party Consents with respect to Contracts necessary to consummate the transactions contemplated by the Combination Documents, but neither party will be required to pay more than $2 million (exclusive of attorney and other advisor fees) to third parties in connection therewith. -54- (d) In addition to all fees, costs and expenses contemplated by Sections 7.3(a) and 7.3(c) above and other than those contemplated by Section 7.3(b) above, Hoechst shall also pay all transfer taxes, filing fees and other costs and expenses in connection with the transfer of the Business to Dade; provided that such transfer taxes (other than German real estate transfer - -------- taxes), filing fees and other costs are not in excess of $750,000, with all amounts exceeding such limit to be paid by Dade; and provided further that -------- ------- expenditures made by Hoechst pursuant to this Section 7.3(d) which are not required in connection with the transfer of the Business shall not be utilized in computing such $750,000 limitation, unless Dade shall have approved such expenditure by Hoechst, which approval shall not be unreasonably withheld. Filing fees contemplated by Section 3.7 hereunder and the Transfer Taxes set forth in Section 7.4(e) hereunder, to the extent paid in connection with the transfer of the Business to Dade, are subject to the terms of this Section 7.3(d). 7.4 Tax Matters. ----------- (a) Taxable Periods Ending on or Before the Closing Date. Hoechst ---------------------------------------------------- shall prepare and file, or cause to be prepared and filed, at Hoechst's expense, all Tax Returns for the Acquired Entities for all taxable periods ending on or prior to the Closing Date which are filed after the Closing Date. Hoechst shall permit Dade to review and comment on each such Tax Return described in the preceding sentence prior to filing. Hoechst shall pay all income Taxes of the Acquired Entities with respect to taxable periods ending on or before the Closing Date. Hoechst shall be entitled to all income Tax refunds for Acquired Entities for all taxable periods ending on or prior to the Closing Date. Dade shall pay Hoechst any such refund amounts within 15 days of Dade, its affiliates', or Acquired Entities' receipt of the same. (b) Taxable Periods Beginning Before and Ending After the Closing ------------------------------------------------------------- Date. Dade shall prepare and file, or cause to be prepared and filed, any Tax Returns of the Acquired Entities for taxable periods which begin before the Closing Date and end after the Closing Date. Dade shall permit Hoechst to review and comment on each such Tax Return described in the preceding sentence prior to filing. Hoechst shall pay to Dade or the Acquired Companies within 15 days of the date on which income Taxes are paid with respect to such periods an amount equal to the portion of such income Taxes which relates to the portion of such taxable period ending on the Closing Date to the extent such income Taxes have not been paid on or before the Closing Date. For purposes of this Section 7.4(b), in the case of any income Taxes that are payable for a taxable period that includes (but does not end on) the Closing Date, the portion of such income Tax which relates to the portion of such taxable period ending on the Closing Date shall be deemed to be equal to the amount of income Taxes which would have been payable if the relevant taxable period ended on the Closing Date. Any income Tax refunds for taxable periods which begin before the Closing Date and end after the Closing Date shall be apportioned as described in this Section 7.4(b). Dade, its affiliates, and the Acquired Entities and Hoechst and its affiliates shall file for such refunds and fully cooperate to obtain the same. Dade shall pay Hoechst any refund amount due Hoechst under this Section 7.4(b) within 15 days of Dade's, its affiliates', or Acquired Entities' receipt of the same. Hoechst shall bear a portion of the costs of preparing and filing the Tax Returns governed by this -55- Section 7.4(b), such portion to be equal to the portion of the Tax shown on such Tax Return for which Hoechst is liable under this action. For purposes of Sections 7(a) and 7(b), an "income Tax" includes any Tax based on or measured in ---------- whole or in part by income. (c) Additional Tax Indemnification. In addition to the Taxes ------------------------------ allocated to Hoechst under Sections 7.4(a) and 7.4(b) above, Hoechst shall be liable for, and shall indemnify and hold Dade, its affiliates, and the Acquired Entities harmless against, without duplication, (i) any Taxes arising out of the transactions contemplated in the Restructuring Documents; and (ii) all liability (whether as a result of Treasury Regulation (S) 1.1502-6, or any similar provision of state, local, or foreign law, as a transferee, by contract, or otherwise) for Taxes of any Person based on an affiliation, contractual relationship or other relationship existing between such Person and any Acquired Entity at any time prior to the Closing. In no event shall such Taxes or liabilities include any liabilities if and to the extent that such liabilities reduced the amount of Net Assets. (d) Cooperation on Tax Matters. Dade and its affiliates and Hoechst -------------------------- and its affiliates shall cooperate fully, as and to the extent reasonably requested by the other party, in connection with the filing of Tax Returns pursuant to this Section 7.4, or any amended return, claim for refund, determining a liability for Taxes or a right to refund of Taxes, or any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other party's request) the provision of records and information which are reasonably relevant to any such return, analysis, audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Acquired Entities and Hoechst and its other affiliates agree (A) to retain all books and records with respect to tax matters pertinent to the Acquired Entities relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Dade or Hoechst, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other party so requests, the Acquired Entities or Hoechst and their affiliates, as the case may be, shall allow the other party to take possession of such books and records. (e) All sales and transfer taxes, recording charges and similar taxes, fees or charges imposed as a result of any of the transactions contemplated in the Restructuring Documents or this Agreement (collectively, the "Transfer -------- Taxes"), together with any interest, penalties or additions to such Transfer Taxes shall be paid by Hoechst. In no event shall such Transfer Taxes, interest, penalties or additions include any liabilities if and to the extent that any such liabilities reduced the amount of Net Assets. Hoechst and Dade shall cooperate in timely making or causing their affiliates to make all filings, returns, reports and forms as necessary or appropriate to comply with the provisions of all Applicable Laws in connection with the payment of such Transfer Taxes, and shall cooperate in good faith to minimize, to the fullest extent possible under such laws, the amount of any such Transfer Taxes payable in connection therewith. -56- 7.5 Confidentiality. Any information provided to Hoechst or its affiliates --------------- by or on behalf of Dade and to Dade or its affiliates by or on behalf of Hoechst pursuant to this Agreement shall be held by Hoechst, Dade and their respective affiliates in accordance with, and shall be subject to the terms of, certain Confidentiality Agreements, dated October 17, 1996 and February 25, 1997, each by and between Hoechst and Dade (the "Confidentiality Agreements"), which are -------------------------- hereby incorporated in this Agreement with the same effect as though fully set forth herein. 7.6 Covenant Not to Compete. ----------------------- (a) As an inducement for Dade to consummate the transactions contemplated by the Combination Documents, Hoechst agrees that for a period (the "Non-Competition Period") beginning on the Closing Date and ending on the later ---------------------- of (x) the third anniversary of the Closing Date and (y) the earlier of (A) the date on which Hoechst no longer has (or, if Dade so requests, Hoechst waives) all of its rights under paragraph 1 of the Stockholders Agreement and such other provisions of the Stockholders Agreement, if any, as agreed to pursuant to Section 1.4(d) (the "Designation Rights"), and (B) the date on which Dade ------------------ terminates the Cooperation Agreement, it shall not (other than in its capacity as a stockholder of Dade and for the benefit of Dade in connection with the Transition Services Agreement), and it shall not permit any of its affiliates after the Closing to, directly or indirectly, either for itself or through any other Person, engage in, participate in, or permit its name to be used by any enterprise engaging in or participating in, any aspect of the human in vitro diagnostics business in any part of the world; provided, however, that nothing -------- ------- herein shall prohibit Hoechst or its affiliates from (i) participating in any activity contemplated by the Cooperation Agreement, (ii participating in a joint venture with any Person provided that the joint venture is not in competition -------- with Dade in the human in vitro diagnostics business, and (ii acquiring any Person or entering into any business combination with any Person or entering into any joint venture in each case which is engaged in the human in vitro diagnostics business but in which the human in vitro diagnostics business is not the primary business of such Person or joint venture so long as Hoechst, in good faith, offers to sell such business to Dade and if, the parties cannot agree on a price, the price shall be the fair market value determined by an Independent Investment Banker. If Dade does not purchase such human in vitro diagnostics business, Hoechst shall enter into an agreement to sell such business to an independent third party within one year after Dade declines to purchase such human in vitro diagnostics business and shall consummate such sale within two years after Hoechst's acquisition of such human in vitro diagnostics business. For purposes of this Agreement, the term "participation" includes any direct or ------------- indirect interest in any enterprise, whether as a stockholder, partner, joint venturer, franchisor, franchisee or otherwise (other than by ownership of less than five percent (5%) of the stock of a publicly held corporation). Hoechst agrees that this covenant is reasonably designed to protect Dade's substantial investment in the Business and is reasonable with respect to its duration, geographical area and scope. The restrictions set forth in this Section 7.6(a) shall terminate upon the seventh anniversary of the Closing Date. -57- (b) Prior to the later of (i) two years after the Closing Date and (ii one year after the date as Hoechst shall no longer have the Designation Rights, neither Hoechst nor any of its affiliates will solicit the employment (in any capacity) of, or, to the extent not otherwise prohibited by Applicable Law, hire, any employee of Dade or any of its affiliates (other than any employee whose employment is terminated by Dade or such affiliate) without the prior written consent of Dade (which consent shall not be withheld capriciously or otherwise without a good business reason). Notwithstanding the foregoing, nothing herein shall prohibit Hoechst from hiring Uwe Bicker in any capacity not otherwise prohibited in any agreement between Uwe Bicker and Dade or any of its affiliates. (c) Prior to two years after the date of this Agreement, neither Dade nor its affiliates (including the Acquired Entities after Closing) will solicit the employment (in any capacity) of, or, to the extent not otherwise prohibited by Applicable Law, hire any employee of Hoechst or any of its affiliates (other than an employee of InfraServ or whose employment is terminated by Hoechst or such affiliate), with whom Dade or any of its affiliates has had contact or who became known to Dade or any of its affiliates in connection with the consideration and consummation of the transactions contemplated by this Agreement, without the prior written consent (which consent shall not be withheld capriciously or otherwise without a good business reason) of Hoechst. (d) Prior to one year after the date on which the Cooperation Agreement shall have been terminated, neither Dade nor its affiliates (including the Acquired Entities after Closing) will solicit the employment (in any capacity) of, or, to the extent not otherwise prohibited by Applicable Law, hire any employee of Hoechst or any of its affiliates (other than an employee of InfraServ or whose employment is terminated by Hoechst or such affiliate), with whom Dade or any of its affiliates will have had contact or who becomes known to Dade or its affiliates in connection with the transactions contemplated by the Cooperation Agreement, without the prior written consent (which consent shall not be withheld capriciously or otherwise without a good business reason) of Hoechst. (e) If, at the time of enforcement of any of the provisions of this Section 7.6, a court (or arbitrator or administrator) determines that the restrictions stated herein are unreasonable under the circumstances then existing, then the parties hereto agree that the maximum period, scope or geographical area reasonable under the circumstances shall be substituted for the stated period, scope or area. The parties further agree that such court (or arbitrator or administrator) shall be allowed to revise the restrictions contained herein to cover the maximum period, scope or geographical area permitted by law. In no event shall any such substituted or revised period, scope or geographical area exceed any restrictions set forth in Sections 7.6(a) and 7.6(b). (f) If Hoechst, Dade or any of their respective affiliates after the Closing (the "Restricted Persons") breaches, or threatens to commit a breach of, ------------------ any of the provisions of this Section 7.6 (the "Restrictive Covenants"), Dade or --------------------- Hoechst, as the case may be, shall have, -58- independent of any other rights and remedies under this Agreement, the right and remedy to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction without the need to post bond or other security, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the parties hereto and that money damages would not provide an adequate remedy to such party. 7.7 Further Transfers; Further Assistance. ------------------------------------- (a) Hoechst shall (whether prior to or after the Closing) execute and deliver such further instruments of conveyance and transfer and take such additional action as Dade may reasonably request to effect, consummate, confirm or evidence the transfer of the Stock to Dade, the transfer of the Business Assets to the Acquired Entities and the conduct of the Business by the Acquired Entities after the Closing (including with respect to obtaining and maintaining all Permits and other Consents necessary or desirable in connection therewith), and shall execute such documents as may be necessary to assist Dade in preserving or perfecting its rights in the Stock after giving effect to the Closing, and the Acquired Entities in preserving or perfecting their rights in the Business Assets or their ability to conduct the Business. Without limiting the foregoing, after the Closing, (i) Hoechst shall (and shall cause its affiliates to) promptly forward to Dade any and all proceeds from accounts receivable relating to the Business or the Business Assets that are received by Hoechst or its affiliates after the Closing but which are part of the Business Assets or which otherwise are for the account of Dade or its affiliates and (ii) Dade shall (and shall cause its affiliates to) promptly forward to Hoechst any and all proceeds from accounts relating to the business or assets (other than the Business or the Business Assets) that are received by Dade or its affiliates after the Closing but which are part of such business or assets or which otherwise are for the account of Hoechst or its affiliates. In connection with any transfer of Business Assets pursuant to this Section 7.7(a), no Hoechst Entity shall transfer any liabilities (of the kind used in calculating Net Assets), whether or not related to the Business, in excess of the amount of current assets (of the kind used in calculating Net Assets) transferred therewith. (b) Without limiting the foregoing, to the extent that the assignment by the Hoechst Entities to one of the Acquired Entities of any Contract pursuant to the Restructuring Documents is not permitted or is prohibited by any Governmental Entity or is not permitted without the consent of any other party to such Contract, neither the Restructuring Documents, this Agreement nor any other Combination Document shall be deemed to constitute an assignment of any such Contract if such consent is not given or if such assignment otherwise would constitute a breach of, or cause a loss of contractual benefits under, any such Contract, and Hoechst will take such provisions as to ensure that no Acquired Entity shall assume or be liable for any obligations or liabilities under any such Contract. Hoechst shall (and shall cause the Other Hoechst Entities to) use their reasonable efforts to advise Dade promptly in writing with respect to any such Contract which any Hoechst Entity knows or has reason to believe will or may not be subject to assignment to one of the Acquired Entities pursuant to the Restructuring Documents. If any Consent with respect to any Contract is not obtained or if such assignment is not permitted irrespective of consent -59- and the Closing hereunder is consummated, Hoechst shall (and shall cause the Other Hoechst Entities to) cooperate with Dade following the Closing Date in any reasonable arrangement designed to provide Dade with the rights and benefits (subject to the obligations) under any such Contract, including, at Hoechst's expense (but subject to the limit on payments to third parties as set forth in Section 7.3(c) herein), enforcement for the benefit of the Acquired Entities of any and all rights of the Hoechst Entities against any other party arising out of any breach or cancellation of any such Contract by such other party and, if requested by Dade, acting as an agent on behalf of the Acquired Entities or as Dade shall otherwise reasonably require. 7.8 Arbitration. ----------- (a) Procedure. At the election of Dade or Hoechst, by written --------- delivery to the other party, any dispute or controversy to which Dade and Hoechst are the principal parties arising out of or relating to the provisions of this Agreement or any of the other Combination Documents (a "Dispute") shall ------- be determined in accordance with the arbitration procedures set forth in this Section 7.8, except as otherwise provided herein (including Section 1.6 above). The parties hereby agree and acknowledge that, except as otherwise provided in this Section 7.8 or otherwise in the Combination Documents, the arbitration procedures and any Final Arbitration Determination (as defined below) hereunder shall be governed by, and shall be enforced pursuant to, the Commercial Arbitration Rules (as supplemented by its Supplementary Procedures for Large, Complex Disputes) of the American Arbitration Association as in effect from time to time. All arbitration proceedings shall be held in New York, New York. (b) Notice of Arbitration. In the event that Dade or Hoechst asserts --------------------- that there exists a Dispute, Dade or Hoechst, as the case may be, shall deliver a written notice to the other party specifying the nature of the asserted Dispute and requesting a meeting to attempt to resolve the same. If no such resolution is reached within 10 calendar days after delivery of such notice, Dade or Hoechst, as the case may be, may, within 45 Business Days after delivery of such notice, commence arbitration hereunder by delivering to the other party a notice of arbitration (a "Notice of Arbitration"). Such Notice of Arbitration --------------------- shall specify the matter(s) as to which arbitration is sought, the nature of any Dispute, the claim(s) of Dade or Hoechst, as the case may be, with respect to the arbitration and shall specify the amount and nature of any damages sought to be recovered as a result of the claim. (c) Selection of Arbitrators. Dade, on the one hand, and Hoechst, on ------------------------ the other hand, shall each select one independent arbitrator expert in the subject matter of the Dispute (the arbitrators so selected shall be referred to herein as "Dade's Arbitrator" and "Hoechst's Arbitrator," respectively). In the ----------------- -------------------- event that either Dade or Hoechst fails to select an independent arbitrator as set forth herein within 30 calendar days from delivery of a Notice of Arbitration, then the matter shall be resolved by the arbitrator selected by the other. Hoechst's Arbitrator and Dade's Arbitrator shall select a third independent arbitrator expert in the subject matter of the dispute, and the three arbitrators so selected shall resolve the matter according to the procedures set forth in this Section -60- 7.8. If Hoechst's Arbitrator and Dade's Arbitrator are unable to agree on a third arbitrator within 20 calendar days after their selection, Hoechst's Arbitrator and Dade's Arbitrator shall each prepare a list of three independent arbitrators expert in the subject matter of the Dispute. Hoechst's Arbitrator and Dade's Arbitrator shall each have the opportunity to designate as objectionable and eliminate one arbitrator from the other arbitrator's list within 7 calendar days after submission thereof, and the third arbitrator shall then be selected by lot from the arbitrators remaining on the lists submitted by Hoechst's Arbitrator and Dade's Arbitrator. (d) Costs. The cost of arbitration ("Arbitration Cost") shall be paid ----- ---------------- by Hoechst, subject to the reimbursement by Dade as set forth in the next sentence. If any of the items set forth in the Notice of Arbitration are resolved by the arbitrator in favor of Hoechst, Dade shall promptly reimburse Hoechst by wire transfer of immediately available funds in an amount equal to (the "Arbitration Reimbursement Calculation") (if and only if a positive number) ------------------------------------- the Arbitration Cost multiplied by a factor equal to A minus B plus twice A ----- ---- multiplied by B; where "A" is the quotient obtained by dividing the amount of - ---------- the items in the Notice of Arbitration resolved by the arbitrator in favor of Hoechst by the total amount of such items, and "B" is the Hoechst Percentage. (e) Entry of Award. The arbitrator(s) shall conduct the arbitration -------------- such that a final result, determination, finding, judgment and/or award (a "Final Arbitration Determination") is made or rendered as soon as practicable, - -------------------------------- but in no event later than 90 calendar days after the delivery of the Notice of Arbitration nor later than 10 calendar days following completion of the arbitration. The Final Arbitration Determination must be agreed upon and signed by the sole arbitrator or by at least two of the three arbitrators (as the case may be). The Final Arbitration Determination shall be final and binding on the parties and there shall be no appeal from or reexamination of the Final Arbitration Determination, except for fraud, perjury or misconduct by an arbitrator prejudicing the rights of any party, and to correct manifest clerical errors. (f) Enforcement. Dade and Hoechst may enforce any Final Arbitration ----------- Determination in any court of competent jurisdiction. If a party makes the Section 7.8(a) arbitration election after the other party has instituted a lawsuit (including a third-party suit) regarding the same Dispute, the other party shall terminate the lawsuit (except the portion, if any, seeking the relief permitted under Section 9.11) and the Dispute shall be resolved pursuant to this Section 7.8. (g) Other Remedies. Nothing in this Section 7.8 shall be construed to -------------- impair the right of either party to seek injunctive or other equitable relief pursuant to Section 9.11. 7.9 Use of Current Supplies and the Hoechst Name. Dade will have after -------------------------------------------- the Closing in Inventory a quantity of work-in-process, preprinted stationery invoices, receipts, forms, advertising and promotional materials, training and source literature, packaging material and other supplies (including all Inventory acquired by Dade) which bear Hoechst's or any Other Hoechst Entity's name and logo. To the extent legally permissible, Hoechst hereby grants, and shall cause the Other Hoechst Entities to grant, to Dade a paid-up license, to remain in effect until the exhaustion of such -61- Inventory in the ordinary course of business, to use any trademarks, trade names, trade dress, copyright or other proprietary rights of Hoechst associated with such Inventory. Dade agrees to use reasonable best efforts to exhaust such Inventory in the ordinary course of business as soon as is reasonably practicable after the Closing. Such license shall be in addition to other licenses granted hereunder or under the documents entered into in accordance with the terms of this Agreement and the Restructuring Documents. Except as provided in this Section 7.9 and as set forth in the Restructuring Documents, no interest in or right to use the name "Hoechst" or the name of any Other Hoechst Entity (other than the Acquired Entities) or any derivation thereof or any trademark, trade name or trade dress with respect thereto is being transferred to Dade pursuant hereto. Within 20 Business Days after the Closing, Dade shall change the name of each Acquired Entity whose name currently includes "Hoechst" so as to remove the "Hoechst" name therefrom. Notwithstanding anything in this Section 7.9 or the Restructuring Documents to the contrary, for a period of three (3) years after the Closing, Dade shall have the right to use the name "Hoechst" in connection with the renamed Acquired Entities located in Japan, Singapore, China and Korea by stating, in whatever form or medium, that each such Acquired Entity is a "Hoechst Joint Venture" or a "Hoechst Diagnostics Joint Venture." 7.10 Change of Structure. Notwithstanding anything to the contrary in this ------------------- Agreement, if Dade or Hoechst proposes an alternative structure for the transfer of the Business to Dade from that contemplated in this Agreement, and such alternative structure does not adversely affect the Tax or accounting consequences, allocation of liabilities, marketability of securities in the public markets, valuation of enterprise or any other economic considerations related to the transfer of the Business, Hoechst and Dade agree to negotiate in good faith to modify (or cause their affiliates to modify), to the extent legally permissible, the Restructuring Documents, this Agreement and the other Combination Documents in such ways as are necessary to implement such alternative structure. For purposes of this paragraph, alternative structures which may be considered include (i) the acquisition of Acquired Entities directly by Dade or its wholly owned subsidiaries, (ii) the acquisition of Business Assets directly by Dade or its subsidiaries, and (iii) making elections under Section 338 (or, if applicable, Section 338(h)(10)) of the Code (or any similar provision of state, local or foreign Tax law) with respect to any Acquired Company or Acquired Entity. 7.11 Transition Countries. Without limiting the provisions of Section 7.7 -------------------- and in furtherance thereof, if by the Closing Date, Dade and Hoechst or their respective affiliates have not received regulatory clearance in one or more countries to close the transactions contemplated by the Combination Documents (a "Transition Country"), it is agreed that Hoechst shall, directly or indirectly, ------------------ on and after the Closing Date, and during the period from the Closing Date until receipt of regulatory clearance in the country (the "Transition Phase"), carry ---------------- on that part of the Business as agent and trustee and for the account of Dade and its affiliates (after the Closing Date) in accordance with the following provisions: (a) Hoechst shall within 30 days after the end of each calendar month of the Transition Phase, and also within 30 days after the end of the Transition Phase, prepare, or cause to -62- be prepared, an account for the Business in each Transition Country, showing for each such calendar month or other period: (i) All receipts received by Hoechst and its affiliates; and (ii) All out-of-pocket expenses incurred by Hoechst and its affiliates directly relating to the Business, other than pursuant to arrangements otherwise contemplated by the Transition Services Agreement. The account shall show the net difference between (i) and (ii), and shall be accompanied by payment of the difference to Dade if (i) is greater than (ii), or an invoice to Dade for the difference if (ii) is greater than (i), which invoice Dade shall pay within ten (10) days after receipt. (b) Any comments or objections which Dade may have with respect to the accounts rendered for that Transition Country under Section 7.11(a) above shall be discussed promptly between Dade and Hoechst. If such comments or objections result in the matter under discussion being resolved, then any appropriate amendment shall be made to such account and Dade and Hoechst shall account to each other accordingly. If such comments or objections do not result in such resolution, then the matter in dispute shall be dealt with in the manner outlined in Section 7.8. (c) If any claim which is covered by insurance of Hoechst or any of its affiliates shall arise during the Transition Phase in respect of any of the Business Assets relating to a part of the Business carried on in a Transition Country, Hoechst shall promptly submit, or cause to be submitted, all relevant documents to the insurers to substantiate such claim in trust for Dade and turn over the proceeds to Dade. Hoechst shall promptly inform Dade of the circumstances giving rise to such insurance claim. (d) Except as otherwise provided in this Agreement, Dade shall have sole liability and responsibility for and in respect of all employees, if any, in each Transition Country (the "Transition Employees") on and after the -------------------- Closing, and Dade shall indemnify or, cause its affiliates (after the Closing) to indemnify, Hoechst and its affiliates (after the Closing), and keep them indemnified in respect thereof. To facilitate an orderly transition of the relevant part of the Business in each Transition Country, during the Transition Phase, Hoechst or its affiliates (after the Closing) shall continue to employ the Transition Employees, and, in consideration thereof, except as otherwise provided in this Agreement with respect to such employees, Dade or its affiliates (after the Closing) shall fully reimburse Hoechst and its affiliates (after the Closing) the cost of the salary, benefits, and all other payments payable to or liabilities in respect of the relevant Transition Employees incurred with respect to the Transition Phase. All such sums so payable shall be regarded as payment of expenses in respect of the Business within the meaning of Section 7.11(a)(ii) above, and shall be reflected in the account(s) rendered for the relevant Transition Country. Except as otherwise provided in this Agreement, no liabilities shall attach to Hoechst or its affiliates (after -63- the Closing) in respect of any of such Transition Employees, who shall be the sole responsibility of Dade and its affiliates (after the Closing), and over whom Dade and its affiliates (after the Closing) shall have full management and supervisory responsibility from and after the Closing. 7.12 U.S., Europe and Japan Restructuring Expenses. Hoechst will fund, as --------------------------------------------- incurred, all costs and expenses relating to the restructuring plans previously disclosed to Dade and its representatives for the categories of expenses set forth on the attached U.S./Europe/Japan Restructuring Expenses Schedule. To the ------------------------------------------------- extent the restructuring plans are not completed prior to Closing Date, Dade will complete, at Hoechst's expense, such plans in a manner consistent with such restructuring plans and will consult with Hoechst from time to time in implementing such restructuring plans. The parties agree that the amounts set forth on the U.S./Europe/Japan Restructuring Expenses Schedule are provided for informational purposes only and that the actual costs and expenses to be funded by Hoechst may be more or less than the amounts set forth thereon. 7.13 Italy Manufacturing Facility Restructuring Expenses. Hoechst shall --------------------------------------------------- complete, at its sole expense, the planned shutdown (the "Italian Facility ---------------- Shutdown") of the Italy manufacturing facility. Hoechst hereby agrees to pay - -------- for all costs, obligations and liabilities arising from or directly related to such Italian Facility Shutdown. 7.14 Break-Up Fee. If this Agreement is terminated because the condition ------------ set forth in Section 2.1(n) shall not have been satisfied, Dade will promptly, but in no event later than three Business Days after this Agreement has been terminated due to the failure of such condition, pay Hoechst $25 million in immediately available funds via wire transfer. Hoechst and Dade hereby agree that the payment of such fee is a material inducement to Hoechst to enter into this Agreement and is to compensate Hoechst for the opportunity costs and risks of entering into this Agreement. 7.15 SEP Liability. Certain employees and former employees of the Syva ------------- division of the Business are covered by the Special Employment Program ("SEP") --- which provides certain severance and termination payments in the event conditions set forth in the SEP are satisfied. Hoechst hereby agrees to indemnify HDHC from all Losses arising out of or in connection with SEP. Hoechst will have full responsibility for handling all claims or potential claims, including all decisions relating to payment thereof, and will reimburse HDHC for all out-of-pocket and other costs and expenses (including mutually agreeable charges for employee time, facilities, document production, legal fees, etc.). Prior to January 1, 1998, Dade agrees to comply with the agreements set forth on the attached SEP Schedule with a view to mitigating ------------ Hoechst's exposure with respect to SEP. Hoechst agrees to make available to Dade all available information, including reports generated with regard to SEP and those benefits sought by Continued Employees under SEP, and, at the reasonable request of Dade, will meet periodically with Dade to provide additional information. 7.16 Proprietary Rights Filing Expenses. Hoechst shall prepare and file (or ---------------------------------- shall cause to be prepared and filed) all documents necessary or desirable for, and shall bear all costs associated with, recording in the applicable patent, trademark and copyright offices the GMBH Company's -64- ownership interest in those patents, trademarks and copyrights included among the Proprietary Rights, including the recording of the assignments of patents and trademarks from Syva Co. and Syntex (USA) Inc. 7.17 Assignment of Intercompany Accounts. Hoechst shall assign immediately ----------------------------------- prior to Closing (a) to the GMBH Company the net balance of all intercompany receivables less intercompany payables of Hoechst and its consolidated affiliates on the one hand and the European Acquired entities on the other hand and (b) to HDHC the balance of all intercompany receivables and intercompany payables of Hoechst and its consolidated affiliates on the one hand and the Non- European Acquired Entities on the other hand, in accordance with following: (i) Hoechst shall cause to be assigned to Hoechst all intercompany receivables on the books of its fully consolidated subsidiaries (other than the Acquired Entities) as of the Closing against each of the Acquired Entities. (ii) Except as set forth in Section 1.7, Hoechst and each of the Acquired Entities shall then enter into off-set agreements, pursuant to which all claims then being held by Hoechst and all claims of such Acquired Entity against Hoechst or any of its fully consolidated subsidiaries (other than the Acquired Entities) shall be offset against each other. (iii) Hoechst shall then assign the balance of each off-set agreement with each European Acquired Entity to the GMBH Company and with each Non-European Entity to HDHC to be treated, in each case, as a capital contribution. Except as set forth in Section 1.7, if any such balance shows a claim of any European Acquired Entity or any Non-European Acquired Entity, then the GMBH Company and HDHC, respectively, shall assume such claim in favor of Hoechst or its fully consolidated subsidiary. 7.18 Option Agreements. ----------------- (a) Prior to the Closing, Hoechst and the GMBH Company shall enter into an option agreement, governed by German law and which shall expressly exclude any representations or warranties, rights to damages, indemnification or rescission or any other similar rights, pursuant to which (i) Hoechst shall grant to the GMBH Company the right, but not the obligation, to purchase, between January 1, 1999 and January 31, 1999 (the "Finber Call Option"), from ------------------ Hoechst shares in Finber S.p.a., an Italian corporation, representing 30% of Finber's outstanding stated capital (the "Finber Shares") free and clear of all ------------- Liens and (ii the GMBH Company shall grant to Hoechst the right, but not the obligation, to sell, between February 1, 1999 and February 28, 1999 (the "Finber ------ Put Option"), to the GMBH Company the Finber Shares free and clear of all Liens. - ---------- The exercise price for the Finber Call Option shall be $3,150,000 (converted into German Marks pursuant to the terms of the option agreement) and for the Finber Put Option shall be $3,500,000 (converted into German Marks pursuant to the terms of the option agreement). If Hoechst deposits -65- with the GMBH Company German Marks equal to the $3,150,000 exercise price under the Finber Call Option, any interest earned with respect to such deposited funds shall be payable to Hoechst. (b) At the Closing, Hoechst, Dade and Dade Netherlands B.V., a Dutch corporation ("Dade Netherlands"), shall enter into a duly notarized option ---------------- agreement, governed by German law and which shall expressly exclude any representations or warranties, rights to damages, indemnification or rescission or any other similar rights, pursuant to which (i) Hoechst shall grant to Dade the assignable right, but not the obligation, to purchase, within 90 days after the Closing (the "Real Estate Call Option"), from Hoechst certain real estate ----------------------- located at Marburg, Germany and described on the attached Owned Real Estate ----------------- Schedule (the "Guzhauser Real Estate") and (ii) Dade Netherlands or its assignee - -------- --------------------- shall grant to Hoechst the right, but not the obligation, to sell, between the date which 91 days after the Closing and the date which is 180 days after the Closing (the "Real Estate Put Option"), to Dade Netherlands or its assignee the ---------------------- Guzhauser Real Estate. Pending the exercise of the Real Estate Call Option or the Real Estate Put Option, Hoechst shall provide the GMBH Company with a rent- free lease for the Guzhauser Real Estate. The exercise price for the Real Estate Call Option shall be DM34,228,000 and for the Real Estate Put Option shall be DM36,000,000. If Hoechst deposits with Dade Netherlands German Marks equal to the DM34,228,000 exercise price under the Real Estate Call Option, any interest earned with respect to such deposited funds shall be payable to Hoechst. 7.19 Holding Periods. Dade agrees that, in order to prevent the incurrence --------------- of certain tax liabilities by Hoechst or its affiliates, it does not intend to (and does not intend to permit any of its affiliates to) sell, transfer or otherwise dispose of any shares of stock identified in this Section 7.19 as follows for the periods set forth in this Section 7.19 for such shares: (a) Shares constituting 84.16% of each class of capital stock of Behring Diagnostics Benelux B.V. shall be held by the GMBH Company until April 1, 1998; (b) Shares constituting 42.96% of each class of capital stock of Behring Diagnostics AG shall be held by Syva Diagnostics Netherlands B.V. until December 31, 2001; and (c) Shares constituting all of the capital stock of Behring Diagnostics Austria Ges.m.b.H. shall be held by the GMBH Company until December 31, 1998. Notwithstanding Dade's intentions, in the event that Dade, or an affiliate of Dade, elects not to observe the holding periods set forth in this Section 7.19 (or such other holding periods as may be mutually agreed upon), Dade shall promptly notify Hoechst of such event and shall indemnify Hoechst and its affiliates and save and hold each of them harmless from any Loss arising from tax liabilities payable as a result of the failure of Dade to observe such holding periods that Hoechst or such affiliate may suffer as a result of such election. -66- 7.20 Thai Business. On or before December 31, 1997 (or immediately ------------- following the Closing, if the Closing shall occur after December 31, 1997), Dade shall, or shall cause a newly formed subsidiary of Dade organized under the laws of Thailand ("Thai Sub") or another subsidiary of Dade to, purchase from Hoechst -------- Thai Ltd. ("Hoechst Thai") and Hoechst Thai shall sell to Thai Sub, all of the ------------ business assets and all liabilities and obligations relating to the Business conducted by Hoechst Thai upon reasonable and mutually satisfactory terms and conditions in order to achieve, to the extent practicable, identical economic results to Dade and Hoechst that would have ensued if Dade had otherwise acquired such Business Assets, liabilities and obligations at the Closing; provided, however, that Hoechst Thai shall not be obligated to transfer current - -------- ------- assets (of the kind used in calculating Net Assets) in excess of liabilities (of the kind used in calculating Net Assets). ARTICLE VII EMPLOYEES AND EMPLOYEE BENEFITS ------------------------------- 8.1 Employees. --------- (a) On or prior to the Closing Date, Hoechst shall cause the employment of each Business Employee that is not employed at an Acquired Entity as of the date hereof to be transferred to the appropriate Acquired Entity. All Business Employees who are employed by the Acquired Entities as of the Closing Date shall be referred to herein as the "Continued Employees." At least 10 days ------------------- prior to the Closing Date, Hoechst shall notify Dade of the Business Employees that have not been transferred to an Acquired Entity. Neither Dade nor the Acquired Entities shall have any obligation under this Agreement or otherwise to provide employment to any person who is not a Business Employee, and Hoechst shall be fully responsible for any liability or obligation with respect to such person. (b) On and after the Closing Date, except as otherwise provided in this Agreement, the Acquired Entities shall continue to be bound by the provisions of each prior offer of employment that pertains to the Continued Employees and by the applicable and relevant employment agreements, collective bargaining agreements, collective employee agreements, customary practices and other employment-related obligations, to the extent required by local law or the provisions of such agreements. Nothing, except as otherwise provided herein, shall prevent Dade or the Acquired Entities from modifying the Continued Employee's terms and conditions of employment or establishing new terms and conditions of employment to the extent such actions are permitted by local law and the provisions of such agreements. 8.2 Employee Compensation and Benefits. ---------------------------------- (a) Except as otherwise specifically provided herein or as may be agreed upon by Hoechst and Dade, the Acquired Entities shall no longer participate in, and the Continued -67- Employees shall no longer accrue benefits under, any employee benefit plan, arrangement, or program of Hoechst (or an affiliate thereof) after the Closing Date or, if applicable, the end of the Transition Period (as defined below). Dade or the Acquired Entities shall assume and be responsible for all obligations relating to wages, salaries, bonuses and other forms of compensation and related expenses and all employee benefits accrued or incurred under any and all plans, programs or arrangements of Hoechst (or any affiliate) on or before the Closing Date with respect to the Continued Employees to the extent such amounts are included within the calculation of Net Assets pursuant to Section 1.5 hereof or if appropriate amounts have been transferred from Hoechst funds or insurance contracts into corresponding Dade funds or insurance contracts. Except as otherwise provided herein, Hoechst shall be responsible for all obligations relating to compensation and related expenses and all employee benefits accrued or incurred under any and all plans, programs or arrangements of Hoechst (or any affiliate) on or before the Closing Date with respect to the Continued Employees to the extent they are not included in the calculation of Net Assets pursuant to Section 1.5 hereof and no appropriate amounts have been transferred from Hoechst funds or insurance contracts into corresponding Dade funds or insurance contracts. (b) With respect to any Business Employee or former Business Employee that is on short-term or long-term disability or workers compensation as of the Closing Date, Hoechst shall be responsible for all employee benefit obligations accrued or incurred by or payable to such person during the Disability Period as though such person had remained an employee of Hoechst, and such person shall remain a participant in such Hoechst plan during the Disability Period. The Disability Period shall be the period beginning on the Closing Date and ending on the date the person resumes active employment with Dade (or an affiliate) after recovery from such condition. At the conclusion of the Disability Period, Dade (or an affiliate) shall extend employment to such person in accordance with all legal requirements and its existing personnel policies (to the extent such policies are consistent with Applicable Law). Hoechst shall also be responsible for all obligations related to or arising from any person who is not employed by the Acquired Entities as of the Closing Date, including any person who has retired or terminated employment on or prior to the Closing Date, and Hoechst shall indemnify Dade and the Acquired Entities from and against any and all such obligations. (c) Each Continued Employee employed in the United States or Canada shall be fully vested as of the Closing Date in his or her benefit under each retirement or capital accumulation plan maintained by Hoechst (or an affiliate). (d) Except as may be otherwise provided herein, from the Closing Date and until at least December 31, 1997 (the "Transition Period"), Dade shall cause ----------------- to be provided to the Continued Employees of the U.S. Company (the "U.S. ---- Continued Employees") employee benefits which are identical to the benefits - ------------------- provided by Hoechst immediately prior to the Closing Date. In this regard, Dade shall cause such benefit to be provided to the U.S. Continued Employees by having such persons continue to participate in the Hoechst employee benefit plans during the Transition Period as follows: -68- (i) Pension. ------- (A) The U.S. Continued Employees shall continue to participate in the Hoechst Celanese Retirement Plan (the "HCC Pension ----------- Plan") until December 31, 1997, and service and compensation earned ---- with Dade (or an affiliate) shall be considered under the HCC Pension Plan as if it were earned with Hoechst. Hoechst shall retain all of the benefits accrued under the HCC Pension Plan as of December 31, 1997 with respect to each U.S. Continued Employee. In addition, Hoechst shall amend the HCC Pension Plan to provide that a U.S. Continued Employee's service with Dade (or an affiliate) after the Closing Date shall be recognized as service under the HCC Pension Plan for purposes of determining the U.S. Continued Employee's eligibility for benefits thereunder (but not for purposes of determining additional retirement benefit accruals beyond that accrued as of the Closing Date). (B) Dade shall pay Hoechst for the continued coverage of the U.S. Continued Employees in the HCC Pension Plan an amount that shall be based on the 1997 Service Cost determined with respect to each U.S. Continued Employee (in accordance with FAS 87) and the number of months in which such person participated in such plan during the Transition Period. (C) Dade shall not assume any obligation accrued under the HCC Pension Plan, and no assets shall be transferred from the HCC Pension Plan to Dade. Hoechst shall indemnify and save harmless Dade and the Acquired Entities from and against any and all obligations and liabilities, of whatever nature, arising from or related to the HCC Pension Plan and the continued participation in such plan after the Closing Date by the Continued Employees. (ii) 401(k) Plan. The U.S. Continued Employees shall continue to ----------- participate in the Hoechst Celanese 401(k) plan (the "HCC 401(k) Plan") --------------- during the Transition Period as though they were employees of Hoechst during such period. Dade shall reimburse Hoechst for the cost of the contributions owing during such period with respect to the U.S. Continued Employees. (iii) Welfare Benefits. The U.S. Continued Employees shall ---------------- continue to participate in the employee welfare benefit plans maintained by Hoechst until December 31, 1997. Dade shall reimburse Hoechst for the direct cost of such coverage. For this purpose, the direct cost shall mean the actual claims and expenses incurred by the U.S. Continued Employees during the Transition Period or, with respect to life insurance, survivorship coverage and disability coverage, a represented insured premium cost as mutually agreed to by Hoechst and Dade. -69- (e) Dade shall cause to be provided the following benefits (notwithstanding the fact that the actual payments would be made after December 31, 1997), provided, however, that Dade shall be reimbursed by Hoechst for any -------- ------- portion of such benefit payment that is attributable to the period prior to, or arising on account of an event occurring on or prior to, the Closing Date: (i) a bonus payment for 1997, payable early in 1998, to all eligible Continued Employees, which is determined in accordance with the appropriate U.S. Company bonus plan, provided that such payment -------- ---- shall be no less than the amount reflected in the calculation of Net Assets; (ii) Executive Perquisite Payments, payable early in 1998, for all Continued Employees who would have been eligible for such payments from the U.S. Company; (iii) all relocation benefits, including the appropriate cost of living adjustments, payable under the U.S. Company's Relocation Plan, for all relocations which took place on or prior to the Closing Date. (f) Transition Benefit Arrangements. On or prior to the Closing Date, ------------------------------- Dade and Hoechst shall agree upon the support services that Dade will need Hoechst to provide after the Closing Date in order to effectuate a smooth transition of the Continued Employees to Dade and the Hoechst employee benefit plans that the Continued Employees will continue to participate in during a transition period following the Closing Date. 8.3 Pension Plans. ------------- (a) Non-US Pension Plans. Effective as of the Closing Date (or the -------------------- end of any transition period), the Acquired Entities shall assume the pension obligations of the Continued Employees under each pension plan, other than the HCC Pension Plan, in which such employees participated as of the Closing Date (the "Hoechst Pension Plans"). As soon as practicable after the Closing Date, --------------------- or the end of the transition period, if applicable, to the extent permitted under local Applicable Law, and consistent with local actuarial principles, Hoechst shall transfer cash from the trust for each of the funded Hoechst Pension Plans or, to the extent applicable, the applicable portion of the insurance company contract maintained to fund such plan to the trust or other funding vehicle for the plan established by Dade or an Acquired Entity. (b) Non-U.S. PBO Shortfall Determination. As soon as practical after ------------------------------------ the Closing Date or, if applicable, at the end of the Transition Period, Hoechst shall cause to be made a calculation in accordance with Financial Accounting Standard 87 ("FAS 87") of the Projected Benefit Obligation ("PBO") under each ------ --- of the Hoechst Pension Plans using the actuarial assumptions and factors used by Hoechst in the Latest Balance Sheet (or, if no assumptions were used for any such plan, Hoechst and Dade shall agree upon appropriate assumptions prior to -70- Closing) (the "PBO Amount"). Hoechst shall deliver to Dade a schedule of the ---------- PBO calculations with respect to each Hoechst Pension Plan along with such other information which is necessary for Dade to verify such results. If the assets transferred to the Acquired Entities with respect to any Hoechst Pension Plan are less than the PBO Amount determined for such plan (the "PBO Shortfall"), ------------- Hoechst shall cause a cash payment to be made to Dade equal to the PBO Shortfall, if any, for such Hoechst Pension Plan; provided, however, that no -------- ------- payment shall be made hereunder unless the sum of the PBO Shortfalls for all Hoechst Pension Plans exceeds $26.9 million and then only to the extent that the sum of the PBO Shortfalls exceeds $26.9 million; provided further, however, that -------- ------- ------- if the PBO Shortfalls for all Hoechst Pension Plans exceed $28.9 million, Hoechst shall not be obligated to cause a cash payment to be made to Dade, but rather Hoechst and Dade shall agree on an alternative mechanism whereby the PBO Shortfalls with respect to the pension obligations under the Hoechst Pension Plans assumed by Dade shall not exceed $26.9 million (but shall not be less than $24.9 million). Interest shall be added to the PBO Shortfall amount at the Prime Rate from the Closing Date to the date the cash payment is made. In the event the sum of the PBO Shortfalls is less than $26.9 million, Dade shall cause a cash payment to be made to Hoechst equal to the difference between $26.9 million and the sum of the PBO Shortfalls. The payment shall be made by HDHC and shall occur on the fifth anniversary of the Closing Date and include interest from the Closing Date at the rate of 8% per annum. (c) U.S. Nonqualified Plans. Hoechst shall retain all obligations of ----------------------- the Continued Employee earned or accrued prior to January 1, 1998 under each nonqualified deferred compensation plan or excess benefit plan. (d) German Pension Plan. The Continued Employees in Germany and any ------------------- future new entrants of the GMBH Company shall be permitted to participate in the Hoechst group Pensionskasse, Hoechst group Sterbekasse (captive life insurance company) and Hoechst group Betriebskrankenkasse (health fund) on the terms and conditions applicable to all participating companies. Hoechst shall also continue to provide to Dade administrative support with respect to the direct benefit pledges under the Betriebliche Zusatzversorgung (BZV) and the self insured death and disability benefit plans. 8.4 Hoechst Savings Plan. On a date that is mutually agreeable to Hoechst -------------------- and Dade, which shall be no later than 90 days after the date Hoechst receives evidence that Dade maintains the plans contemplated by this Section, there shall be a transfer in cash from the defined contribution plans maintained by Hoechst ("Defined Contribution Plans") to the defined contribution plans maintained by -------------------------- Dade. The amount of the transfer shall be equal to the aggregate account balances (whether vested or not) under the Defined Contribution Plans of all Continued Employees as of the date of the transfer. As of the transfer date, Dade shall cause the plans of Dade referred to herein to assume benefits under the Defined Contribution Plans. 8.5 COBRA. Hoechst shall retain liability for all persons receiving ----- "continuation coverage", as of January 1, 1998, under any plan that is not maintained exclusively by an Acquired -71- Entity. With respect to "group health plans" established by Dade on or after January 1, 1998 for the benefit of the Continued Employees, Dade or its affiliates shall comply with all COBRA obligations applicable to those plans. 8.6 U.S. and Canadian Retiree Medical Plan. Hoechst shall indemnify and -------------------------------------- save Dade and the Acquired Entities harmless against any and all obligations and liabilities, of whatever nature, arising from or related to the Hoechst retiree medical plan and the commitments established thereunder. 8.7 Payment by Hoechst. ------------------ (a) If Dade shall change any pension plan for the U.S. Continued Employees, Dade shall cause the pension plan in which the U.S. Continued Employees shall participate on or after January 1, 1998 to recognize for vesting and eligibility purposes the service of such persons under the HCC Pension Plan. Within five Business Days after Hoechst receives notice that such Continued Employees have received such recognition, Hoechst shall pay to Dade $2.1 million, plus interest at the Prime Rate, from the Closing Date to the actual date of payment. (b) Prior to June 30, 1997, the U.S. Company shall establish a retention bonus program which shall provide retention bonuses to all or a select group of the Continued Employees upon satisfaction of the conditions set forth in the program. The U.S. Company's payment under this program shall not be less than $1.8 million, and no payment shall be made thereunder prior to nine months after the Closing Date. The total amount of the payments called for by any such program shall reduce Net Assets as of the Closing Date. 8.8 InfraServ Employees. In the event any person employed by InfraServ ------------------- becomes an employee of Dade (or an affiliate) after the Closing Date, the principles of this Article 8 shall apply to such person as of the date of employment with Dade (or the affiliate), and, to the extent Dade (or the affiliate) assumes any obligation or liability related to such person's employment with InfraServ, Hoechst shall cause Dade to be reimbursed for such amounts in a manner consistent with this Article. ARTICLE IX MISCELLANEOUS ------------- 9.1 Amendment and Waiver. This Agreement may be amended, or any provision -------------------- of this Agreement may be waived, so long as any such amendment or waiver is set forth in a writing executed by each party hereto. No course of dealing between or among the parties shall be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any party under or by reason of this Agreement. -72- 9.2 Financial Information. --------------------- (a) Hoechst shall furnish or shall cause Hoechst's independent accountants to furnish to Dade, at Hoechst's expense, audited financial statements for the Business for the fiscal year ended December 31, 1995 prepared in accordance with United States GAAP and in a form meeting the requirements of Regulation S-X of the Securities Act of 1933, as amended (the "Securities Act"), -------------- together with the consent of Hoechst's independent accountants to the use of their reports thereon (such consent to also be supplied with respect to the audited financial statements for the fiscal year ended December 31, 1996). Hoechst shall provide (or cause its independent accountants to provide) such audited financial statement on or prior to July 15, 1997; provided that Hoechst -------- shall use reasonable best efforts to promptly cause the delivery of such audited financial statement as soon as practicable after the execution of this Agreement. Hoechst shall cooperate with Dade and shall furnish to Dade unaudited interim financial statements for the Business as of and for the three- month period ended March 31, 1997 on or prior to August 31, 1997, the six-month period ending June 30, 1997, the nine-month period ending September 30, 1997 (if the Closing occurs after such date), and the period beginning January 1, 1997 and ending on the Closing Date on or prior to thirty days after the close of such period, and the three-, six- and nine-month periods ended March 31, 1996, June 30, 1996 and September 30, 1996 on or prior to August 31, 1997, each prepared in accordance with United States GAAP and in a form meeting the requirements of Regulation S-X of the Securities Act; provided that Hoechst -------- shall use reasonable efforts to cause the delivery of such unaudited financial statements as soon as practicable after the execution of the Agreement. (b) Dade shall cooperate with Hoechst and shall furnish to Hoechst unaudited interim financial statements for Dade and its subsidiaries as of and for the three-month period ended March 31, 1997, the six-month period ending June 30, 1997, the nine-month period ending September 30, 1997 (if the Closing occurs after such date), on or prior to thirty days after the close of such period, and the three-, six- and nine-month periods ended March 31, 1996, June 30, 1996 and September 30, 1996 on or prior to July 15, 1997, each prepared in accordance with United States GAAP and in a form meeting the requirements of Regulation S-X of the Securities Act; provided that Dade shall use reasonable -------- efforts to cause the delivery of such unaudited financial statements as soon as practicable after the execution of the Agreement. 9.3 Notices. All notices, demands and 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 personally delivered, sent by telecopy (with receipt confirmed) on a Business Day during regular business hours of the recipient (or, if not, on the next succeeding Business Day) or two Business Days after sent by reputable overnight express courier (charges prepaid). Unless another address is specified in writing, notices, demands and communications to Hoechst and Dade shall be sent to the addresses indicated below: -73- Notices to Hoechst: ------------------ Hoechst AG Bruningstrae 50 D-65929 Frankfurt a.M. Germany Attn: Chairman of the Management Board with a copy (which shall not constitute notice hereunder) to: ------------------------------------------------------------ Hoechst Celanese Corporation P.O. Box 4915 30 Independence Boulevard Warren, NJ 07060-4915 Attn: General Counsel and Shearman & Sterling 599 Lexington Avenue New York, New York 10022 U.S.A. Attn: Creighton O'M. Condon Notices to Dade: --------------- Dade International 1717 Deerfield Road P.O. Box 778 Deerfield, Illinois 60015 U.S.A. Attn: President with copies (which shall not constitute notice hereunder) to: -------------------------------------------------------------- Dade International 1717 Deerfield Road P.O. Box 778 Deerfield, Illinois 60015 U.S.A. Attn: General Counsel -74- Bain Capital, Inc. Two Copley Place Boston, Massachusetts 02116 U.S.A. Attn: Stephen G. Pagliuca John Connaughton Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 U.S.A. Attn: Joseph H. Gleberman Neal Moszkowski Kirkland & Ellis 200 East Randolph Drive Chicago, Illinois 60601 U.S.A. Attn: Jeffrey C. Hammes and Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, NY 10004 Attn: Lee Parks 9.4 Assignment. ---------- (a) This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated by either party hereto without the prior written consent of the other party. (b) Notwithstanding the provisions of Section 9.4(a) above, Dade may, in its sole discretion, but subject to the provisions of Section 7.10, assign (with guarantees reasonably satisfactory to Hoechst) in whole or in part, its rights and obligations pursuant to this Agreement (excluding the right to acquire all or a portion of the Stock) to one or more of its affiliates, and Dade may, in its sole discretion, direct Hoechst to convey the Stock, in whole or in part, to one or more of its wholly owned subsidiaries. Dade may assign all or any portion of this Agreement, including its rights to indemnification, to any of its or its subsidiaries' lenders as collateral security. After the Closing, Dade may assign (with guarantees reasonably satisfactory to Hoechst) this Agreement and -75- its rights and obligations hereunder to any purchaser of, or successor to, at least 80% of the assets of Dade and its subsidiaries. (c) Notwithstanding the provisions of Section 9.4(a), Hoechst may, in its sole discretion, but subject to the provisions of Section 7.10, assign (with guarantees reasonably satisfactory to Dade), in whole or in part, its rights and obligations pursuant to this Agreement (excluding the right to acquire all or a portion of the Common Stock and the Class L Common, Series B) to one or more of its wholly owned subsidiaries, and Hoechst may, in its sole discretion, direct Dade to convey the Common Stock and the Class L Common, Series B, in whole or in part, to one or more of its wholly owned subsidiaries. Hoechst may assign all or any portion of this Agreement, including the rights to indemnification, to any of its or its subsidiaries' lenders as collateral security. After the Closing, Hoechst may assign (with guarantees reasonably satisfactory to Dade) this Agreement and its rights and obligations hereunder to any purchaser of, or successor to, at least 80% of the assets of Hoechst and its subsidiaries. 9.5 Severability. Whenever possible, each provision of this Agreement ------------ shall be interpreted in such a 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 such provision or the remaining provisions of this Agreement. 9.6 Captions. The captions used in this Agreement are for convenience of -------- reference only, do not constitute a part of this Agreement and shall not be deemed to limit, characterize or in any way affect any provision of this Agreement, and all provisions of this Agreement shall be enforced and construed as if no caption had been used in this Agreement. 9.7 Complete Agreement. This Agreement and the agreements and documents ------------------ referred to herein contain the complete agreement between the parties and supersede any prior understand ings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way. 9.8 Counterparts. This Agreement may be executed in multiple counterparts ------------ all of which taken together shall constitute one and the same agreement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o Strict Construction; Word Meanings. The language used in this ------------------------------------- Agreement shall be deemed to be the language chosen by the parties hereto to express their collective mutual intent, and no rule of strict construction shall be applied against any person. The term "including" as used herein shall be by --------- way of example, and shall not be deemed to constitute a limitation of any term or provision contained herein. The use of the words "or," "either" and "any" -- ------ --- shall not be exclusive. 9.11 Specific Performance. Each of the parties acknowledges and agrees -------------------- that the other party would be damaged irreparably in the event any of the provisions of this Agreement is not performed in accordance with its specific terms or otherwise is breached. Accordingly, each of the parties agrees that, subject to the provisions of Section 7.8(f) hereunder, the other party 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 of the United States or any state thereof having jurisdiction over the parties and the matter, in addition to any other remedy to which they may be entitled, at law or in equity. 9.12 No Third-Party Beneficiaries. This Agreement is for the sole benefit ---------------------------- of the parties hereto and their permitted assigns, and nothing herein expressed or implied shall give or be construed to give any Person, other than the parties hereto and their permitted assigns, any legal or equitable rights hereunder. 9.13 Schedules. Nothing in any Schedule attached hereto shall be adequate --------- to disclose an exception to a representation or warranty made in this Agreement unless such Schedule expressly identifies the exception. Without limiting the generality of the foregoing, the mere listing (or inclusion of a copy) of a document or other item shall not be adequate to disclose an exception to a representation or warranty made in this Agreement, unless the representation or warranty has to do with the existence of the document or other item itself. No exceptions to any representations or warranties disclosed on one Schedule shall constitute an exception to any other representations or -77- warranties made in this Agreement unless such exception is disclosed as provided herein on each such other applicable Schedule. 9.14 Schedules and Exhibits. All Schedules and Exhibits attached hereto ---------------------- or, referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. 9.15 Currency. Unless otherwise stated, all dollar amounts set forth -------- herein are expressed in United States currency. 9.16 Inconsistencies. If there is any inconsistency between this Agreement --------------- and any other Combination Document or Restructuring Agreement, then the provisions of this Agreement will control. 9.17 Delivery by Facsimile. The Combination Documents and any signed --------------------- agreement or instrument entered into in connection therewith or contemplated thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation of a contract, and each such party forever waives any such defense. 9.18 Definition of Knowledge. For purposes of this Agreement, the ----------------------- capitalized term "Knowledge" when used (a) with respect to Hoechst, shall mean --------- the actual knowledge of the individuals listed on the attached Hoechst Key ----------- Employee Schedule and (b) with respect to Dade, shall mean the actual knowledge - ----------------- of the individuals listed on the attached Dade Key Employee Schedule. -------------------------- 9.19 Definition of Affiliate. For purposes of this Agreement, the ----------------------- uncapitalized term "affiliate" shall mean, with respect to any Person, any --------- other Person controlling, controlled by, or under common control with such Person; it being understood that Hoechst shall not, for purposes of this definition, be deemed to be in control of (a) Dade or its subsidiaries or (b) any Acquired Entity once such Acquired Entity has been acquired by Dade or one of its subsidiaries. 9.20 Definition of Governmental Entity. For purposes of this Agreement, --------------------------------- the capitalized term "Governmental Entity" will mean any foreign or domestic ------------------- government, agency, governmental department, commission, board, bureau, court, arbitration panel or instrumentality or any state or other political subdivision thereof (whether now or hereafter constituted and/or existing) and any -78- entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 9.21 Definition of Person. For purpose of this Agreement, the capitalized -------------------- term "Person" will mean any individual, partnership, joint venture, corporation, ------ limited liability company, trust, unincorporated organization, Governmental Entity or other entity. 9.22 Definition of Ordinary Course of Business. For purposes of this ------------------------------------------ Agreement, the uncapitalized term "ordinary course of business" will mean the --------------------------- ordinary course of business consistent with past practice. 9.23 Definition of Applicable Law. For purposes of this Agreement, ---------------------------- the capitalized term "Applicable Law" will mean any statute, ordinance, code, -------------- action, law, treaty, rule or regulation, determination or direction of an arbitrator or Governmental Entity. 9.24 Definition of Business Day. For purposes of this Agreement, the -------------------------- capitalized term "Business Day" shall mean any day that is not a Saturday, a ------------ Sunday or any other day on which banks are required or authorized by law to be closed in the State of New York, the City of New York or the Federal Republic of Germany. 9.25 Definition of Indemnified Liability. For purposes of this ----------------------------------- Agreement, the capitalized term "Indemnified Liability" will mean: --------------------- (a) the following liabilities or obligations of the Hoechst Entities (including the Acquired Entities) that arise out of or relate to the ownership, use or operation of the Business or Business Assets on or prior to Closing, whether accrued, absolute or contingent, whether known or unknown, whether due or to become due, and regardless of when or by whom asserted (but shall not include any liability or obligation if and to the extent that such liability or obligation reduced the amount of Net Assets): (i) subject to the provisions of Section 7.17, any intercompany payables or payables, obligations or liabilities to any Hoechst, any affiliate thereof or any related party; (ii) any liability or obligation relating to indebtedness for borrowed money or guarantees of any of the foregoing (whether for principal, interest, penalties, fees, expenses or otherwise); (iii) any liability or obligation in respect of any assets set forth on the attached Excluded Assets Schedule (including under any ------------------------ Contracts related thereto); -79- (iv) retention, bonus and other agreements with employees (A) made in contemplation of the transactions contemplated hereby or (B) otherwise entered into after December 31, 1996 (other than in the ordinary course of business), including any senior executive agreements entered into by any Hoechst Entity (including the Acquired Entities) prior to the Closing; (v) liabilities and obligations arising from or in connection with Goodwill Termination Claims as set forth in Section 3.2(h)(iii) hereunder; and (vi) any Loss arising from the failure to obtain the Consents identified with double asterisks on the Hoechst Conflicts Schedule, provided ------- --------- -------- that any such Losses shall be limited by the Consent Indemnity Limit, if any, agreed to prior to Closing pursuant to Section 1.4(b); (b) liabilities and obligations of the Hoechst Entities (including the Acquired Entities), whether accrued, absolute or contingent, whether known or unknown, whether due or to become due, and regardless of when or by whom asserted (but shall not include any liability or obligation if and to the extent that such liability or obligation reduced the amount of Net Assets) which are unrelated to the Business (including any obligations or liabilities related to discontinued or disposed operations and including any guarantees of any obligations unrelated to the Business) or relating to any facility or property (or operations conducted thereon) no longer utilized by the Business (including any offsite waste disposal or management locations unrelated to the Business); and (c) the costs of services provided under the Transition Services Agreement as incurred by Dade or its affiliates if and to the extent that pricing thereof exceeds the amount described in clause (x) of Section 2.1(g) for the period ending 24 months after the Closing Date. For purposes of this Section 9.25 and Section 7.2, "Hoechst Entities" shall be ---------------- deemed to include all affiliates of the Hoechst Entities and any predecessors to the Hoechst Entities and any Person with respect to which the Hoechst Entities is a successor-in-interest (including by operation of law, merger, liquidation, consolidation, assignment, assumption or otherwise). * * * * * -80- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. DIAGNOSTIC HOLDINGS, INC. By: /s/ Stephen G. Pagliuca Its: HOECHST AG By: /s/ K. Schnieder Its: By: /s/ Its: -81- The schedule and exhibits to this exhibit have been omitted in reliance on Item 601(b)(2) of Regulation S-K. The Company shall furnish supplementally a copy of any schedule or exhibit to the Commission upon request. July 2, 1997 Diagnostic Holdings, Inc. 1717 Deerfield Road Deerfield, IL 60015 Attention: Mr. Steve Pagliuca President Supplement to the Agreement and Plan of Combination --------------------------------- Dear Ladies and Gentlemen: Reference is hereby made to that Agreement and Plan of Combination, dated as of June 24, 1997 (the "Combination Agreement"), by and between --------------------- Diagnostic Holdings, Inc. ("Dade") and Hoechst AG. Unless otherwise defined ---- herein, terms defined in the Combination Agreement are used herein as therein defined. It is hereby agreed by you and the undersigned as follows: 1. The Behring Diagnostics GmbH and Subsidiaries Combined Financial Statements, dated June 20, 1997 and delivered the date hereof (the "Combined -------- Statements"), as of and for the periods ended December 31, 1995 and December 31, - ---------- 1996, are and shall be deemed to be the Financial Statements described in Section 4.6(a) of the Combination Agreement, as if delivered on the date of the Combination Agreement, and shall supersede any other Financial Statements in respect of such periods delivered prior to the date hereof. In addition, the Latest Balance Sheet, as such term is defined in the Combination Agreement, is and shall be deemed to be the audited combined balance sheet of the Business as of December 31, 1996 set forth in the Combined Statements. 2. The Excluded Asset Schedule shall be amended to include, "Hoechst shall retain certain accounts receivable of Behring Diagnostics Iberica ("Iberica") in an amount equal to $25.0 million, such amount being determined in ------- accordance with the valuation methodology used with respect to Iberica accounts receivable in preparation of the Latest Balance Sheet." In no event shall such accounts receivable, or any reserves associated therewith, be taken into account in the calculation of Net Assets hereunder. 3. Hoechst and Dade shall agree by July 15, 1997 upon a selection method in order to determine which accounts receivable of Iberica shall be retained by Hoechst (the "Selection Method"). In the event that no such ---------------- agreement is reached by July 15, 1997, Hoechst shall be entitled to deliver to Dade a schedule of those accounts receivable that will be retained by Hoechst (the "Retained Accounts Schedule"), which shall be determined pursuant to a -------------------------- Selection Method selected by Hoechst and is reasonably designed to result in the retention by Hoechst of accounts receivable with characteristics (e.g. aging and collectability) that are reasonably representative of the overall accounts receivable portfolio of Iberica; provided that, in no event shall the Selection Method result in Dade obtaining accounts receivable of Iberica which, as of the Closing Date, have been outstanding for more than one year. 4. Exhibit D attached hereto is and shall be deemed to be Exhibit D to the Combination Agreement, as if attached to, and delivered on the date of, the Combination Agreement. 5. (a) Hoechst hereby agrees that (x) the Financial Statements reflect and the Draft Balance Sheet will reflect all of the accounts receivable of the Business as of their respective dates, (y) that all such accounts receivable of the Business arising with respect to sales to third parties are reflected on such Financial Statements and will be reflected on the Draft Balance Sheet as "trade accounts receivable," and (z) no amounts included on the Draft Balance Sheet as "trade accounts receivable" will relate to accounts receivable for sales of the kind recorded as "accounts receivable to owner" or "accounts receivable to related party" on the Latest Balance Sheet. (b) In addition to any other right or remedy under the Combination Agreement, if the agreement set forth in paragraph 5(a) above is breached, Hoechst and Dade agree to negotiate in good faith an appropriate amendment to the Combination Agreement, as required or desirable to address the circumstances underlying any such breach. If prior to the Termination Date, Hoechst and Dade cannot reach agreement on such amendment and the breach is a material breach, then Dade may terminate the Combination Agreement. Any such termination would have the effects set forth in Section 6.2 of the Combination Agreement. (c) For purposes of paragraph 5(b) above, Hoechst and Dade agree that a material breach is any adjustment exceeding $10.0 million. 6. Section 1.4(c) of the Combination Agreement is hereby amended by inserting "and research and development expenditures" after the words "capital expenditures" therein This Letter Agreement shall become effective as of the date first above written when and if counterparts hereof shall have been executed and delivered by you to the undersigned. The Combination Agreement, as supplemented by this Letter Agreement, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. This Letter Agreement may be executed in counterparts which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Letter Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Letter Agreement. This Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. If you agree to the provisions of this Letter Agreement, please evidence such agreement by executing and returning the enclosed counterparts to Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022, Attention: Mr. Barry J. Benzing. HOECHST AG By: /s/ Uwe Bicker -------------------------------- Its: By: /s/ Andreas Pollman -------------------------------- Its: Acknowledged and agreed to as of the date first above written: DIAGNOSTIC HOLDINGS, INC. By: /s/ Stephen G. Pagliuca ----------------------------- Its: September 29, 1997 Diagnostics Holding, Inc. 1717 Deerfield Road Deerfield, IL 60015 Attention: Mr. John Connaughton Vice President Second Supplement to the Agreement and Plan of Combination --------------------------------- Dear Ladies and Gentlemen: Reference is hereby made to the Agreement and Plan of Combination, dated as of June 24, 1997 (as supplemented, the "Combination Agreement"), by and between --------------------- Diagnostics Holding, Inc. ("Dade") and Hoechst AG ("Hoechst"). Unless otherwise ---- ------- defined herein, terms defined in the Combination Agreement are used herein as therein defined. It is hereby agreed by you and the undersigned as follows: 1. Dade and Hoechst agree that the requirements of Section 1.4(b) of the Combination Agreement have been satisfied and that neither Dade nor Hoechst shall be permitted to terminate the Combination Agreement pursuant to Section 6.1(h) of the Combination Agreement. Dade and Hoechst also agree that Hoechst shall not be liable to Dade or any other Dade Party for any Loss or obligation arising from or in connection with the failure to obtain the Consents identified with double asterisks on the Hoechst Conflicts Schedule, provided that the foregoing shall not relieve Hoechst of any obligation after the date hereof under Sections 3.2(g) or 7.7 of the Combination Agreement. 2. Section 9.25(a)(vi) of the Combination Agreement is hereby deleted in its entirety and replaced with "(vi) [INTENTIONALLY OMITTED]." 3. Dade and Hoechst agree that the requirements of Section 1.4(c) of the Combination Agreement have been satisfied and that Dade shall not be permitted to terminate the Combination Agreement pursuant to Section 6.1(i) of the Combination Agreement. Dade acknowledges and agrees that the level of capital expenditures and the research and development expenditures of the Business reflected in the unaudited Financial Statements as of and for the period ending June 30, 1997 are at least consistent with the conduct of the Business in the ordinary course for such period. 4. Section 1.4(a) of the Combination Agreement is hereby deleted in its entirety and replaced with "(a) 'Restructuring Documents' shall mean the ----------------------- restructuring documents listed on the attached Exhibit C" and Dade --------- agrees that it shall not be permitted to terminate the Combination Agreement pursuant to Section 6.1(d) of the Combination Agreement. 5. On or prior to the Closing Date, Hoechst shall cause to be contributed in cash to HDHC the sum of U.S. $10 million. Such amount shall be on deposit in immediately available funds in an account owned and controlled by HDHC (which account will be identified in a written notice delivered by Hoechst to Dade at least three Business Days prior to Closing) on and immediately after the Closing and shall not be taken into account in the determination of Net Assets. 6. Pursuant to Section 1.4(d), the rights of Hoechst under paragraphs 1, 6(b), 10(b)(i) and 10(b)(iii) of the Stockholders Agreement are and shall be deemed to be "Designation Rights" for purpose of Section 7.6(a) of the Combination Agreement and Dade shall not be permitted to terminate the Combination Agreement pursuant to Section 6.1(j) of the Combination Agreement. 7. Section 7.6(a)(y)(A) of the Combination Agreement is hereby amended by deleting the words "(or if Dade so requests, Hoechst waives)" after the words "the date on which Hoechst no longer has" and replacing such deleted words with "(or Hoechst waives)." 8. The second sentence of Section 7.6(a) of the Combination Agreement is hereby amended by deleting the words "within two years after Hoechst's acquisition of such human in vitro diagnostics business" after the words "shall consummate such sale" and replacing such deleted words with "as soon as reasonably practicable after all necessary approvals are obtained and in any event within one year after entering into such agreement." This Letter Agreement shall become effective as of the date first above written when and if counterparts hereof shall have been executed and delivered by you to the undersigned. The Combination Agreement, as supplemented by this Letter Agreement, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. This Letter Agreement may be executed in counterparts which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Letter Agreement by telecopier shall have the same effect as delivery of a manually executed counterpart of this Letter Agreement. This Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. If you agree to the provisions of this Letter Agreement, please evidence such agreement by executing and returning the enclosed counterparts to Shearman & Sterling, Couvenstrae 8, D-40211 Dusseldorf, Germany, Attention: Dr. Alfred Kossmann. HOECHST AG By: /s/ Andreas Pollman ------------------------------- Its: ------------------------------- By: ------------------------------- Its: ------------------------------- Acknowledged and agreed to as of the date first above written: DIAGNOSTICS HOLDING, INC. By: /s/ John Connaughton ---------------------------- Its: Vice President September 30, 1997 Diagnostics Holding, Inc. 1717 Deerfield Road Deerfield, IL 60015 Attention: Mr. John Connaughton Vice President Third Supplement to the Agreement and Plan of Combination --------------------------------- Dear Ladies and Gentlemen: Reference is hereby made to the Agreement and Plan of Combination, dated as of June 24, 1997 (as supplemented, the "Combination Agreement"), by and --------------------- between Diagnostics Holding, Inc. ("Dade") and Hoechst AG ("Hoechst"). Unless ---- ------- otherwise defined herein, terms defined in the Combination Agreement are used herein as therein defined. It is hereby agreed by you and the undersigned as follows: 1. Section 1.2 of the Combination Agreement is hereby deleted in its entirety and shall be replaced by the following: "1.2 Consideration for Transfer of Stock to Dade. In consideration ------------------------------------------- for the Stock (the "Purchase Price"), Dade shall: sell, transfer and -------------- deliver, free and clear of all Liens, to Hoechst 5,198,323 shares of Common Stock of Dade, par value $.01 per share ("Common Stock"), and 504,060 ------------ shares of Class L Common Stock, Series B, of Dade, par value $.01 per share ("Class L Common, Series B"); issue to Hoechst a warrant (the "Warrant") ------------------------ ------- in form and in substance as set forth in Exhibit A attached hereto, --------- initially exercisable into 1,279,587 shares of Common Stock and 124,076 shares of Class L Common, Series B; and transfer and deliver to Hoechst $100,000 in immediately available funds."; 2. Dade hereby represents and warrants that as of September 30, 1997 the aggregate Unpaid Yield (as such term is defined in the Company's Second Amended and Restated Certificate of Incorporation) on the Class L Common (as defined in the Stockholders Agreement) is equal to $16,632,664; 3. Dade hereby agrees that in the event that Dade issues from the date hereof up to 31,965.77 shares of Class L Common or Class L Common, Series B, to Behring members of the management of the Business, Dade shall also issue and deliver for a nominal price per share to Hoechst such number of shares of Class L Common, Series B, and a Warrant exercisable into such number of shares of Class L Common, Series B, such that Hoechst shall own the same percentage of the outstanding shares of Class L Common, Series B, and Warrants exercisable into the same percentage of shares of Class L Common, Series B, respectively, after such issuance as it owned immediately prior to such issuance; 4. Hoechst hereby confirms to Dade that the appropriate personnel of the Business have been notified and instructed to permanently discontinue, as of the Closing, all sales and other related activities of the Business in or to Iran, North Korea and Cuba; 5. In determining the PBO Shortfall (as set forth in Section 8.3 of the Combination Agreement), the applicable exchange rate shall be the New York noon time exchange rate applicable to the relevant currencies on December 31, 1996 as published by The Wall Street Journal, or, if not published therein on such date, as published therein on the last date prior to December 31, 1996 on which such exchange rate was published; 6. Within six months after the Closing, Dade shall amend the Certificate of Incorporation of Dade International, Inc., a Delaware corporation and a wholly owned subsidiary of Dade ("Dade Operating"), whereby the name of -------------- Dade Operating shall be changed to "Dade Behring Inc."; 7. Without limiting and in connection with paragraph 6 above, Hoechst hereby waives the Closing condition set forth in Section 2.2(f)(i)(C) of the Combination Agreement; 8. Dade hereby acknowledges that nothing contained in the Transitional Services Agreement shall require Hoechst or any Service Entity (as such term is defined in the Transitional Services Agreement) to make any payment of money on behalf of Dade or any of the Acquired Entities, including but not limited to in connection with payroll services referred to in Section 9 below, unless Dade or such Acquired Entity shall have paid in advance the relevant funds (provided that, unless Dade or the relevant Acquired Entity has actual knowledge of the amount, Dade shall have received 3 Business Days prior notice of the amount of such funds) to Hoechst or the relevant Service Entity, and in the event Hoechst or a Service Entity makes a payment on behalf of Dade or any of the Acquired Entities without having received the full amount of such payment, Dade or the relevant Acquired Entity shall promptly reimburse Hoechst or the relevant Acquired Entity for such payment with interest from the date such amount was paid at the Prime Rate. Any excess amounts advanced by Dade or an Acquired Entity shall be promptly repaid with interest from the date paid at the Prime Rate; 9. In connection with payroll services provided to Dade or any Acquired Entity by Hoechst or any Service Entity pursuant to the Transitional Services Agreement, Dade shall indemnify and hold harmless Hoechst or any Service Entity for any liability to any employee of Dade or any Acquired Entity resulting from the failure by Dade or the relevant Acquired Entity to pay in advance (provided, unless Dade or the relevant Acquired Entity has actual knowledge of the Amount, Dade or such Acquired Entity shall have received 3 Business Days prior notice of the amount) the amount of any payment of money to be made by Hoechst or a Service Entity on behalf of Dade or any Acquired Entity; 10. Dade shall cause Dade Operating to guarantee the payment in full of all obligations for the payment of money of Behring Diagnostics, Inc. under the Transitional Services Agreement; 11. Hoechst hereby agrees to cause InfraServ to provide for a period of no less than twenty (20) years from the Closing Date access to and use of parking places at the Marburg site in Gorzhausen and Hinkelbachtal (the "Parking Service"), with (i) the amount and nature of the Parking Service being - ---------------- consistent with the amount and nature of such services provided to the GMBH Company during 1996 (taking into consideration the number of parking places on any real property owned by the GMBH Company at the Marburg site) and (ii) the price for such Parking Service being no higher than the price charged to any other resident at Gorzhausen; 12. (a) Hoechst hereby covenants and agrees that as soon as practicable after the Closing and for a period ending on the earlier of 180 days after Closing and the making of the Build Election, Hoechst shall cause Centeon Pharma GmbH ("Centeon") to offer to enter into a written sublease agreement (the ------- "Transition Sublease") with the GMBH Company for the premises currently owned ------------------- and occupied by the GMBH Company on the 5th floor of the M300 building at the Marburg site (the "M300 Premises"), on the following terms and conditions: ------------- Term: Minimum five (5) year initial term, with the right of the GMBH ---- Company to terminate upon one (1) year written notice. Hoechst shall use its reasonable efforts to obtain a longer initial term and additional option periods. Centeon Termination Right: ------------------------- In the event that Centeon will lose its FDA or similar manufacturing permits (a "Permit Loss") by reason of the GMBH Company's or its ----------- successors' occupancy of the M300 Premises, Centeon shall have the right to terminate (the "Centeon Termination Right") the sublease with ------------------------- such notice period as permitted by the relevant regulatory authority (which period Centeon will use its best efforts to have be as long as possible) and in no event less than 12 months. In the event Centeon exercises this right to terminate the sublease, Hoechst shall provide the GMBH Company a suitable alternative location in the Marburg area to the M300 Premises reasonably acceptable to the GMBH Company and shall reimburse the GMBH Company for all reasonable costs ("Moving ------ Costs") associated with establishing, moving to and occupying such ----- alternative location in excess of the costs of occupying the M300 Premises for the remainder of the initial five (5) year term and for the cost of replacing any fixed assets which could not be moved from the M300 Premises. If the GMBH Company can take certain actions with respect to its use of the M300 Premises which would prevent a Permit Loss, the GMBH Company can void the exercise of the Centeon Termination Right by taking such actions. The costs of such actions, but in no event more than the Moving Costs, shall be paid by Hoechst. In the event that as a result of the exercise of the Centeon Termination Right the GMBH Company moves the operations conducted at the M300 Premises out of the Marburg site, Hoechst shall cause InfraServ to negotiate in good faith appropriate adjustments to the terms of the InfraServ Agreement, including appropriate reductions of the minimum purchase requirements set forth therein. Rent: Historical 1996 rent paid to Centeon, plus DM 90,000 per year paid ---- to Hoechst. Other: All other terms and conditions as currently exist between Centeon ----- and the GMBH Company, and the other standard terms and conditions for such sublease agreements in Germany. (b) Hoechst shall use its reasonable efforts for a period no longer than five (5) years to cause Centeon to enter into, in substitution for the Transition Sublease, a written, long-term sublease agreement the ("Long-Term --------- Agreement") for the M300 Premises on the following terms and conditions: - --------- Term: Five (5) year initial term, with the GMBH Company's right to renew ---- for three (3) successive 5-year terms, with the right of the GMBH Company to terminate upon two (2) years written notice. Rent: For the first ten (10) years, historical 1996 rent paid to Centeon, ---- plus DM 90,000 per year paid to Hoechst; thereafter, fair market rent. Other: All other terms and conditions as mutually agreed upon by Centeon ----- and the GMBH Company. (c) In the event that within 179 days after the Closing Date the GMBH Company has not entered into the Long-Term Agreement or the Transition Sublease, the GMBH Company may elect to terminate the existing lease arrangements, effective no sooner than twelve (12) months after the date of such election, and to build at the Marburg site an alternative manufacturing facility for the operations conducted at the M300 Premises (a "Build Election"). The GMBH -------------- Company may also make a Build Election within twelve (12) months following exercise by Centeon of a Centeon Termination Right. Upon making a Build Election, the GMBH Company shall be entitled to lease from InfraServ, and Hoechst shall cause InfraServ to lease to the GMBH Company, a parcel of land (having sufficient size and characteristics necessary or reasonably desirable for the GMBH Company's full use and enjoyment of the proposed manufacturing facility) at Gorzhausen, such parcel to be the parcel available nearest to the GMBH Company's existing manufacturing facilities at Gorzhausen. The lease of such parcel shall be rent- free for an initial period of twenty (20) years and shall thereafter have a fair market rental which amount per square meter shall be no greater than the lowest land parcel rental charged to any other site resident for comparable parcels of land. (d) In connection with a Build Election, Hoechst shall reimburse the GMBH Company for the reasonable costs associated with establishing, moving to and occupying the newly built manufacturing facility and for the cost of replacing any fixed assets which could not be moved from the M300 Premises. (e) In no event shall the total liability of Hoechst under this Section 12 for reimbursement of costs in connection with a relocation from the M300 Premises or actions to void a Centeon Termination Right exceed U.S.$500,000.00. 13. Hoechst hereby covenants and agrees that as soon as practicable after the Closing, but in no event later than October 31, 1997, Hoechst will cause the current owner(s) and/or lessee(s) (the "Japan Landlord") to enter into -------------- a written lease agreement with Dade or a subsidiary of Dade for the manufacturing premises currently used and occupied by the Business in Japan (the "Japan Premises"), on the following terms and conditions: -------------- Term: Two (2) year initial term, with right of the GMBH Company to ---- terminate upon a notice to be agreed upon. Rent: Historical 1996 rent. ---- Other: All other terms and conditions as currently exist between the Japan ----- Landlord and the Business, and the other standard terms and conditions for such lease agreements in Japan. 14. Hoechst hereby covenants and agrees that as soon as practicable after the Closing, Hoechst will cause Hoechst Italia, S.p.A. ("Hoechst Italia") -------------- to take all actions, execute such deeds and agreements, and obtain all third party consents to: (i) convey to Istituto Behring S.p.A. ("Istituto Behring") a ---------------- fee simple interest in (A) its land located in Scoppito, L'Aquila, Italy (the "Scoppito Land") which is currently used and occupied by Istituto Behring and - -------------- (B) the related improvements to the Scoppito Land, for a nominal amount; (ii) terminate the lease agreement between Hoechst Italia and Istituto Behring; and (iii) cause the mortgage on the Scoppito Land (in addition to other land owned by Hoechst Italia) in favor of Istituto Mobiliare Italiano S.p.A. ("IMI") (with --- such mortgage securing a loan from IMI to Hoechst Italia for an aggregate amount (principal and interest) equal to 2,510,000,000 Italian lira) (the "Mortgage") -------- to be released from the Scoppito Land, including, without limitation, taking or causing to be taken such action as is necessary or useful in order to cause the above to occur, in compliance with the all formalities required under Italian law, and in form and substance reasonably satisfactory to the GMBH Company. In the event Hoechst Italia is not the sole owner of the Scoppito Land or the Scoppito Land is substantially larger than the parcel necessary for the full use and enjoyment of the building occupied by Istituto Behring (the "Behring Building") or other buildings and ---------------- improvements are located on the Scoppito Land, and in any of the foregoing cases the Scoppito Land cannot be appropriately subdivided, then Istituto Behring shall receive a long-term lease or other comparable property rights to that part of the Scoppito Land necessary for the full use and enjoyment of the Behring Building by Istituto Behring, which lease or other property rights shall be comparable to a mortgage free, fee simple ownership interest (e.g. a 999 year lease). Hoechst shall cause Hoechst Italia and Dade shall cause Istituto Behring to agree on reasonable rights of way, easements and similar mutual encumbrances to allow both Hoechst Italia and Istituto Behring to use and develop their adjoining land. This Letter Agreement shall become effective as of the date first above written when and if counterparts hereof shall have been executed and delivered by you to the undersigned. The Combination Agreement, as supplemented by this Letter Agreement, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. This Letter Agreement may be executed in counterparts which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Letter Agreement by telecopier shall have the same effect as delivery of a manually executed counterpart of this Letter Agreement. This Letter Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. * * * * If you agree to all of the terms and provisions this Letter Agreement, please evidence such agreement by executing and returning the attached copy of this Letter Agreement in the space indicated below and returning it to: Shearman & Sterling, Couvenstrasse 8, 40211 Dusseldorf, GERMANY, Attention: Dr. Alfred Kossmann. HOECHST AG By: /s/ Tina Preissler --------------------------------- Name: Tina Preissler --------------------------------- Title: Attorney-in-fact --------------------------------- By: --------------------------------- Name: --------------------------------- Title: --------------------------------- Agreed and accepted as of the date first written above: DIAGNOSTICS HOLDING, INC. By: /s/ John Connaughton --------------------------------- Name: John Connaughton --------------------------------- Title: Vice President --------------------------------- EX-10.1 3 FIRST AMENDMENT OF THE CREDIT AGREEMENT ================================================================================ FIRST AMENDMENT TO CREDIT AGREEMENT among DIAGNOSTICS HOLDINGS, INC., DADE INTERNATIONAL INC., VARIOUS BANKS and BANKERS TRUST COMPANY, as AGENT __________________________________ Dated as of September 11, 1997 __________________________________ ================================================================================ FIRST AMENDMENT TO CREDIT AGREEMENT ----------------------------------- FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of September 11, 1997, among DIAGNOSTICS HOLDING, INC. ("Holdings"), DADE INTERNATIONAL INC. (the "Borrower"), the financial institutions party to the Credit Agreement referred to below (the "Banks") and BANKERS TRUST COMPANY, as Agent (the "Agent") for the Banks. All capitalized terms used herein and not otherwise defined shall have the respective meanings provided such terms in the Credit Agreement. W I T N E S S E T H : ------------------- WHEREAS, Holdings, the Borrower, the Banks and the Agent are parties to a Credit Agreement, dated as of May 7, 1996 and amended and restated as of April 29, 1997 (as amended, modified, restated or supplemented to the date hereof, the "Credit Agreement"); and WHEREAS, the parties hereto wish to amend the Credit Agreement as herein provided; NOW, THEREFORE, it is agreed: I. Amendments to Credit Agreement. ------------------------------ 1. Section 4.02(A)(c) of the Credit Agreement is hereby amended by (i) deleting the amount "$5,000,000" appearing in the first proviso to said Section and inserting the amount "$8,000,000" in lieu thereof, (ii) inserting the text ", any Behring Real Property Sale" immediately following the text "Designated Real Property Sale" appearing in clause (w) of the first proviso to said Section, (iii) deleting the word "and" appearing at the end of clause (x) of the first proviso to said Section and inserting a comma in lieu thereof and (iv) inserting the following new clause (z) at the end of said Section: "and (z) notwithstanding anything to the contrary contained above, with respect to no more than the greater of (x) $20,000,000 and (y) 50% of the aggregate Net Proceeds resulting from all Asset Sales constituting Behring Real Property Sales, such Net Proceeds shall not be required to be applied on such date to the extent that no payment Default or Event of Default then exists and the Borrower delivers a certificate to the Agent on or prior to such date stating that such Net Proceeds shall be used to purchase assets used or to be used in the businesses referred to in Section 8.01(a) (including, without limitation, capital stock of a corporation engaged in any such business) within 360 days following the date of such Behring Real Property Sale (which certificate shall set forth the estimates of the proceeds to be so expended), provided that if all or any portion of such Net Proceeds not so -------- applied to the repayment of Term Loans are not so used within such 360 day period, such remaining portion (to the extent theretofore received by Holdings and/or any of its Subsidiaries in the form of cash) shall be applied on the last day of such period as a mandatory repayment of principal of outstanding Term Loans as provided in this Section 4.02(A)(c)." 2. Section 4.02(A)(d) of the Credit Agreement is hereby amended by inserting the text " or the Behring Transaction" immediately following the text "any Permitted Acquisition" appearing in said Section. 3. Section 6.10(a) of the Credit Agreement is hereby amended by (i) inserting the phrase "and the First Amendment Effective Date" immediately after the phrase "as of the Restatement Effective Date" appearing therein and (ii) inserting the text ", the Behring Transaction" immediately following the text "Original Transaction" appearing therein. 4. Section 6.10 is hereby amended by (i) redesignating clauses (d), (e) and (f) of said Section as clauses (e), (f), and (g), respectively, (ii) inserting the following new clause (d) immediately following clause (c) of said Section: "(d) the statement of net assets to be sold of the Behring Acquired Business at December 31, 1996 and the related statements of income and supplemental cash flow information of the Behring Acquired Business for the fiscal year ended as of said date, copies of which have heretofore been furnished to each Bank, present fairly in all material respects the net assets of the Behring Acquired Business at the dates of said statements and the results for the periods covered thereby. All such financial statements have been prepared in accordance with GAAP consistently applied except to the extent provided in the notes to said financial statements.", and (iii) deleting from clause (e) thereof (redesignated as clause (f) as provided above) the text "Section 6.10(b) and the Indebtedness . . . after giving effect to any Loans made on such date)" and inserting in lieu thereof the text "Sections 6.10(b), (c) and (d) or as delivered pursuant to Section 7.01 prior to the First Amendment Effective Date and the Indebtedness incurred under this Agreement and the Senior Subordinated Notes, -2- there were as of the Restatement Effective Date and as of the First Amendment Effective Date (in each case after giving effect to any Loans made on such date)". 5. Section 6.12 of the Credit Agreement is hereby amended by inserting the text "and as of the First Amendment Date" immediately after the text "Restatement Effective Date" appearing in said Section. 6. Section 6.13 of the Credit Agreement is hereby amended by inserting the text ", the Behring Transaction" immediately following the word "Transaction" in each place it appears in said Section. 7. Section 6.17 of the Credit Agreement is hereby amended by (i) deleting the text "Restatement Effective Date" in each place it appears in said Section and inserting the text "First Amendment Effective Date" in lieu thereof and (ii) inserting the text ", the Behring Transaction" immediately following the text "Original Transaction" in each place it appears in said Section. 8. Section 6.21 of the Credit Agreement is hereby amended by (i) deleting the text "Original Effective Date" appearing in said Section and inserting the text "First Amendment Effective Date" in lieu thereof and (ii) inserting the text ", the Behring Transaction and the Transaction" immediately after the text "Original Transaction" appearing in said Section. 9. Section 6.23 of the Credit Agreement is hereby amended to read in its entirety as follows: "6.23 Tax Returns and Payments. All Federal, material state and ------------------------ other material returns, statements, forms and reports for taxes (the "Returns") required to be filed by or with respect to the income, properties or operations of the Acquired Business, of the Behring Acquired Business and of Holdings and/or any of its Subsidiaries have been timely filed with the appropriate taxing authority. The Returns accurately reflect all liability for taxes of the Acquired Business, of the Behring Acquired Business and of Holdings and its Subsidiaries, as the case may be, for the periods covered thereby. The Acquired Business, the Behring Acquired Business and Holdings and each of its Subsidiaries have paid all taxes payable by them other than taxes which are not yet due and payable, and other than those contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP. Except as disclosed in the financial statements referred to in Section 6.10(b), (c) and (d), there is -3- no material action, suit, proceeding, investigation, audit, or claim now pending or, to the knowledge of Holdings and the Borrower, threatened by any authority regarding any taxes relating to the Acquired Business, to the Behring Acquired Business or to Holdings or any of its Subsidi aries. Except as set forth on Annex XV, as of the First Amendment Effective Date, neither the Acquired Business, the Behring Acquired Business nor Holdings or any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of taxes of the Acquired Business, the Behring Acquired Business, Holdings or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Acquired Business, the Behring Acquired Business or Holdings or any of its Subsidiaries not to be subject to the normally applicable statute of limitations. Neither the Acquired Business, the Behring Acquired Business nor Holdings or any of its Subsidiaries have provided, with respect to themselves or property held by them, any consent under Section 341 of the Code. Neither the Acquired Business, the Behring Acquired Business nor Holdings or any of its Subsidiaries has incurred, or will incur, any material tax liability in connection with the Original Transaction, the Transaction, the Behring Transaction and the other transactions contemplated hereby. Notwithstanding anything contained in this Section 6.23 to the contrary, neither Holdings nor the Borrower will be in breach of any of the representations or warranties set forth in this Section 6.23 to the extent that such Credit Parties have a right to be indemnified by (x) the Seller or any of its Affiliates under the Acquisition Agreement or (y) by Hoechst or any of its Affiliates under the Behring Merger Agreement, in each case in respect of such taxes or other liabilities and then only so long as such Credit Parties are proceeding diligently to enforce such indemnification and are so indemnified by the Seller or Hoechst, as the case may be, within 90 days after requesting or demanding same." 10. Section 6.24 of the Credit Agreement is hereby amended by (i) deleting the phrase "Original Effective Date" appearing in the first sentence of said Section and inserting in lieu thereof the phrase "First Amendment Effective Date" and (ii) deleting the text "and the incurrence of the Original Loans on such date . . . "Existing Indebtedness")" appearing in said Section and inserting in lieu thereof the text ", the Transaction and the Behring Transaction (excluding Indebtedness permitted under Section 8.04(a) and Sections 8.04(c)-(t), the "Existing Indebtedness")". -4- 11. Section 7.01(a) of the Credit Agreement is hereby amended by (i) deleting the word "Within" appearing at the beginning of said Section and inserting the text "Commencing with the fiscal month ended April 30, 1998, within" in lieu thereof, (ii) inserting the text "(or 45 days, in the case of any fiscal month ending on or prior to December 31, 1998)" immediately after the text "30 days" appearing in said Section, and (iii) deleting the date "June 30, 1997" appearing in said Section and inserting the text "December 31, 1998" in lieu thereof. 12. Section 7.01(c) of the Credit Agreement is hereby amended by deleting the date "1997" appearing in said Section and inserting the date "1999" in lieu thereof. 13. Section 7.01(d) of the Credit Agreement is hereby amended by inserting the text "(or 90 days, in the case of the fiscal year of the Borrower commencing January 1, 1998)" immediately after the word "Borrower" the first place such word appears in said Section and (ii) deleting the date "March 31, 1997" appearing in said Section and inserting in lieu thereof the text "March 31, 1998". 14. Section 7.03(a) of the Credit Agreement is hereby amended by deleting the phrase "Restatement Effective Date" appearing therein and inserting in lieu thereof the phrase "First Amendment Effective Date". 15. Section 8.02(p) of the Credit Agreement is hereby amended by deleting the amount "$5,000,000" appearing in said Section and inserting the amount "$8,000,000" in lieu thereof. 16. Section 8.02(u) of the Credit Agreement is hereby amended by (i) deleting the amount "$40,000,000" appearing in said Section and inserting the amount "$65,000,000" in lieu thereof, (ii) deleting the amount "$25,000,000" appearing in said Section and inserting the amount "$40,000,000" in lieu thereof and (iii) deleting the amount "$10,000,000" in each place such amount appears in said Section and inserting the amount "$16,000,000" in lieu thereof. 17. Section 8.02(dd) of the Credit Agreement is hereby amended by deleting the amount "$20,000,000" appearing in said Section and inserting the amount "$27,000,000" in lieu thereof. 18. Section 8.02 of the Credit Agreement is hereby further amended by (i) deleting the word "and" appearing at the end of clause (dd) of said Section, (ii) deleting the period at the end of clause (ee) of said Section and inserting a semi-colon -5- in lieu thereof and (iii) inserting the following new clauses (ff) and (gg) at the end of said Section: "(ff) the Borrower or any of its Subsidiaries may effect any Behring Real Property Sale, provided that (w) any such Behring Real Property Sale ---- is for at least 80% in cash at a fair market value (as determined in good faith by the Board of Directors or senior management of the Borrower), (x) the aggregate Net Proceeds from all such Behring Real Property Sales effected after the First Amendment Effective Date do not exceed $50,000,000, (y) the Net Proceeds therefrom are applied to repay Term Loans to the extent required by Section 4.02(A)(c), and (z) no payment Default or Event of Default then exists or would result therefrom; and (gg) the Behring Transaction may be effected on or about the First Amendment Effective Date so long as (i) same is effected in accordance with the terms of the Behring Merger Agreement, (ii) the aggregate consideration for such transaction (excluding fees and expenses) consists solely of Holdings Common Stock and warrants to purchase Holdings Common Stock, (iii) no Change of Control Event results from such transaction and (iv) no Default or Event of Default then exists or would result therefrom." 19. Section 8.03(d) of the Credit Agreement is hereby amended by deleting the text "Original Effective Date" appearing in said Section and inserting in lieu thereof the text "First Amendment Effective Date". 20. Section 8.03(s) of the Credit Agreement is hereby amended by deleting the amount $5,000,000" appearing in said Section and inserting the amount "$8,000,000" in lieu thereof. 21. Section 8.04(b) of the Credit Agreement is hereby amended by deleting the text "Original Effective Date" appearing in said Section and inserting the text "First Amendment Effective Date" in lieu thereof. 22. Section 8.04(f) of the Credit Agreement is hereby amended by (i) deleting the amount "$20,000,000" appearing in said Section and inserting the amount "$27,000,000" in lieu thereof and (ii) deleting the table appearing in said Section in its entirety and inserting in lieu thereof the table set forth below: Fiscal Year Ending Amount ------------------ ------ December 31, 1997 $18,100,000 -6- December 31, 1998 $26,700,000 December 31, 1999 $27,600,000 December 31, 2000 $28,500,000 December 31, 2001 $29,250,000 December 31, 2002 $30,100,000 December 31, 2003 $31,000,000 December 31, 2004 $32,000,000 23. Section 8.04(j) of the Credit Agreement is hereby amended by deleting the amount "$35,000,000" appearing in said Section and inserting the amount "$100,000,000" in lieu thereof. 24. Section 8.04(s) of the Credit Agreement is hereby amended by deleting the amount "$10,000,000" appearing in said Section and inserting the amount "$17,000,000" in lieu thereof. 25. Section 8.04(v) of the Credit Agreement is hereby amended by deleting the amount "$10,000,000" appearing in said Section and inserting the amount "$20,000,000" in lieu thereof. 26. Section 8.04(w) of the Credit Agreement is hereby amended by deleting the amount "$15,000,000" appearing in said Section and inserting the amount "$25,000,000" in lieu thereof. 27. Section 8.06(g) of the Credit Agreement is hereby amended by deleting the amount "$50,000,000" in each place it appears in said Section and inserting the amount "$100,000,000" in lieu thereof. 28. Section 8.06(l) of the Credit Agreement is hereby amended by deleting the text "Original Effective Date" in each place it appears in said Section and inserting the text "First Amendment Effective Date" in lieu thereof. 29. Section 8.06(m) of the Credit Agreement is hereby amended by deleting the amount "$50,000,000" in each place it appears in said Section and inserting the amount "$100,000,000" in lieu thereof. 30. Section 8.06(n) of the Credit Agreement is hereby amended by inserting the following text at the end of said Section: ", and the Behring Transaction shall be permitted in accordance with the provisions of Sections 6.13 and 8.02(gg)". -7- 31. Section 8.06(u) of the Credit Agreement is hereby amended by deleting the text "or (s)" appearing in said Section and inserting the text ", (s) or (ff)" in lieu thereof. 32. Section 8.06(y) of the Credit Agreement is hereby amended by deleting the amount "$7,500,000" in each place it appears in said Section and inserting the amount "$12,000,000" in lieu thereof. 33. Section 8.08 of the Credit Agreement is hereby amended by inserting the text ", the Behring Transaction" immediately after the text "Original Transaction" appearing in said Section. 34. Section 8.09(a)(i) of the Credit Agreement is hereby amended by (i) deleting the text "(i)" and the text ", subject to clause (ii) below," appearing in said Section and (ii) deleting the table appearing in said Section in its entirety and inserting in lieu thereof the new table set forth below: "Fiscal Year Ending Amount ------------------ ------ December 31, 1996 $ 74,000,000 December 31, 1997 $ 90,000,000 December 31, 1998 $130,000,000 December 31, 1999 $110,000,000 December 31, 2000 $110,000,000 December 31, 2001 $110,000,000 December 31, 2002 $110,000,000 December 31, 2003 $110,000,000 December 31, 2004 $110,000,000". 35. Section 8.09(a)(ii) of the Credit Agreement is hereby amended by deleting said Section in its entirety. 36. Section 8.09(b) of the Credit Agreement is hereby amended by deleting the text "and (ii) of such Section" appearing in the last parenthetical of the last sentence of said Section. 37. Section 8.09(f) of the Credit Agreement is hereby amended by deleting the amount "$20,000,000" appearing in said Section and inserting the amount "$27,000,000" in lieu thereof. -8- 38. Section 8.09(g) of the Credit Agreement is hereby amended by deleting the text "(a)(ii)," appearing in said Section. 39. Section 8.10 of the Credit Agreement is hereby amended by deleting the table appearing in said Section in its entirety and inserting in lieu thereof the new table set forth below: Minimum Consolidated Date EBITDA ---- ------ March 31, 1997 $111,300,000 June 30, 1997 $152,300,000 September 30, 1997 $154,100,000 December 31, 1997 to and including September 30, 2001 $215,000,000 December 31, 2001 $221,700,000 March 31, 2002 $223,900,000 June 30, 2002 $226,700,000 September 30, 2002 $229,600,000 December 31, 2002 $233,000,000 March 31, 2003 $235,400,000 June 30, 2003 $238,300,000 September 30, 2003 $241,300,000 December 31, 2003 $244,900,000 March 31, 2004 $247,400,000 June 30, 2004 $250,500,000 September 30, 2004 $253,700,000 40. Section 8.14 of the Credit Agreement is hereby amended by (i) deleting the word "and" at the end of clause (2) appearing in clause (vii) of said Section and inserting a comma in lieu thereof and (ii) inserting the following new clause (4) at the end of clause (vii) appearing in said Section: "and (4) the issuance of Holdings Common Stock as consideration for the Behring Acquisition pursuant to Section 8.02(gg)". 41. The definition of "Consolidated EBIT" appearing in Section 10 of the Credit Agreement is hereby amended by (i) deleting the word "and" appearing at the end of clause (vi) thereof and inserting a comma in lieu thereof and (ii) inserting the following text immediately following clause (vii) thereof: -9- "(viii) any non-recurring cash charges and non-cash provisions deducted in determining Consolidated Net Income for such period and related to the Borrower's integration plan during the 3-year period following the First Amendment Effective Date (it being understood and agreed that these charges and provisions are considered part of, and not additive to, the Behring Restructuring Reserves). Notwithstanding anything to the contrary contained above, for purposes of Section 8.10 there shall be included in determining Consolidated EBIT for any period the Behring Acquired EBIT during such period (including the portion thereof earned prior to the consummation of the Behring Acquisition)." 42. The definition of "Consolidated EBITDA" appearing in Section 10 of the Credit Agreement is hereby amended by inserting the following text at the end of said definition: ", it being understood and agreed that, for purposes of any determination of Consolidated EBITDA for any period pursuant to Section 8.10, there shall be included in any such determination Behring Acquired EBIT for such period adjusted by adding thereto the amount of all depreciation expense and amortization expense that were deducted in determining Behring Acquired EBIT for such period." 43. The definition of "Documents" appearing in Section 10 of the Credit Agreement is hereby amended by inserting the phrase ", the Behring Transaction Documents" immediately after the phrase "the Transaction Documents" appearing therein. 44. The definition of "Excess Cash Flow" appearing in Section 10 of the Credit Agreement is hereby amended by (i) inserting the text "and cash Behring Restructuring Expenditures" immediately after the text "Restructuring Expenditures" appearing in said definition and (ii) inserting the text "and Behring Restructuring Reserves" immediately following the text "Restructuring Reserves" appearing in said Section. 45. The definition of "Excess Cash Flow Period" appearing in Section 10 of the Credit Agreement is hereby amended by deleting the date "1997" appearing in said definition and inserting the date "1998" in lieu thereof. 46. The definition of "Excess Cash Payment Date" appearing in Section 10 of the Credit Agreement is hereby amended by deleting the date "1997" appearing in said definition and inserting the date "1998" in lieu thereof. -10- 47. The definition of "Excess Proceeds" appearing in Section 10 of the Credit Agreement is hereby amended by (i) deleting the word "and" appearing at the end of clause (iv) of said definition and inserting a common in lieu thereof and (ii) inserting the following new clause (vi) at the end of said definition: "and (vi) the portion of Net Proceeds received by the Borrower after the First Amendment Effective Date from any Behring Real Property Sale which is permitted to be retained by the Borrower pursuant to Section 4.02(A)(c), as and when received in the form of cash". 48. The definition of "Excess Proceeds Amount" appearing in Section 10 of the Credit Agreement is hereby amended by (i) deleting the word "and" at the end of clause (A)(iv) appearing in said definition and inserting a comma in lieu thereof and (ii) inserting the following new clause (vi) at the end of clause (A) of said definition: "and (vi) on each date of receipt by the Borrower or any of its Subsidiaries of the Net Proceeds from any Behring Real Property Sale so long as any repayment pursuant to Section 4.02(A)(c) has been made, by an amount equal to the portion of such Net Proceeds permitted to be retained by the Borrower pursuant to Section 4.02(A)(c) (to the extent in the form of cash, including cash received upon liquidation of or principal payment on any non-cash asset previously received)". 49. The definition of "Mortgages" appearing in Section 10 of the Credit Agreement is hereby amended by (i) inserting the text "and include (i) " immediately before the text "all Mortgages" appearing in said definition and (ii) inserting the text "and (ii) each Behring Mortgage" at the end of said definition. 50. Section 10 of the Credit Agreement is hereby further amended by deleting the following definition in its entirety: "Mortgaged Policies". 51. Section 10 of the Credit Agreement is hereby further amended by inserting in the appropriate alphabetical order the following new definitions: "Behring Acquired Business" shall mean the assets and stock acquired by the Borrower and its Subsidiaries pursuant to the Behring Acquisition Documents. "Behring Acquired EBIT" shall mean, for any period, the net income (or loss) of the Behring Acquired Business for such period taken as a single accounting period, before (i) total interest expense (inclusive of amortization of -11- deferred financing fees and any other original issue discount) and interest income of the Behring Acquired Business, (ii) the write-off of inventory step-up and in-process research and development costs in accordance with purchase accounting, (iii) restructuring provisions in accordance with GAAP, and (iv) provisions for taxes based on income and foreign withholding taxes to the extent otherwise deducted in determining net income (or loss) of the Behring Acquired Business, and determined without giving effect to any extraordinary gains or losses but giving effect to gains or losses from sales of assets sold in the ordinary course of business. "Behring Acquisition" shall mean the acquisition by Holdings of the Behring Acquired Business from Hoechst pursuant to, and in accordance with the terms of, the Behring Merger Agreement. "Behring Acquisition Documents" shall mean the Behring Merger Agreement and all other purchase and other agreements, instruments and documents entered into in connection with the Behring Acquisition. "Behring Merger Agreement" shall mean the Agreement and Plan of Combination, dated as of June 24, 1997, among Holdings and Hoechst, as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "Behring Mortgages" shall have the meaning provided in the First Amendment. "Behring Mortgage Policies" shall have the meaning provided in the First Amendment. "Behring Real Property Sale" shall mean a sale by the Borrower or any of its Subsidiaries of any Real Property owned by the Borrower or any of its Subsidiaries as of the First Amendment Effective Date (after giving effect to the consummation of the Behring Transaction on or about such date), which Real Property the Borrower has determined in its reasonable business judgment is unnecessary or uneconomic in the conduct its business in light of the Borrower's integration plan after the Behring Transaction. "Behring Restructuring Expenditures" shall mean nonrecurring charges arising out of the restructuring, consolidation, severance or discontinuance (by sale or shut-down) of any portion of the operations of any entities or businesses of Holdings and its Subsidiaries in connection with the Behring Acquisition. -12- "Behring Restructuring Reserves" shall mean the reserves maintained on the consolidated balance sheet of Holdings and its Subsidiaries with respect to Behring Restructuring Expenditures. "Behring Transaction" shall mean and include (i) the consummation of the Behring Acquisition and (ii) all other transactions contemplated by or consummated in connection therewith or with the First Amendment. "Behring Transaction Documents" shall mean, collectively, (i) the Behring Acquisition Documents and (ii) all other documents effectuating the Behring Transaction or executed in connection therewith. "First Amendment" shall mean the First Amendment to this Agreement, dated as of September 11, 1997. "First Amendment Effective Date" shall have the meaning provided in the First Amendment. "Hoechst" shall mean Hoechst AG, a German corporation. "Mortgage Policies" shall mean and include (i) the Mortgage Policies, under, and as defined in the Original Credit Agreement, and (ii) the Behring Mortgage Policies. 52. Annexes III, V, VI, VII, VIII, XI, XIII and XV to the Credit Agreement are hereby amended by deleting same in their entirety and inserting in lieu thereof the new Annex III, V, VI, VII, VIII, XI, XIII and XV, as the case may be, as it appears as attached hereto. 53. Annexes A, B and C to the Pledge Agreement are hereby amended by deleting same in their entirety and inserting in lieu thereof the new Annex A, B or C to the Pledge Agreement, as the case may be, as it appears as attached hereto. 54. Annexes A, B, C, D, E and F to the Security Agreement are hereby amended by deleting same in their entirety and inserting in lieu thereof the new Annex A, B, C, D, E or F to the Security Agreement, as the case may be, as it appears as attached hereto. 55. Exhibit D to the Credit Agreement is hereby amended by deleting such Exhibit D in its entirety and inserting in lieu thereof a new Exhibit D in the form of Exhibit D attached hereto. -13- 56. Notwithstanding anything to the contrary contained in Section 8.08 of the Credit Agreement, the Borrower may pay a one time advisory fee in connection with the Behring Transaction to each of (i) Bain Capital in an amount not to exceed $10,000,000, (ii) GS Capital in an amount not to exceed $3,000,000 and (iii) Hoechst in an amount not to exceed $3,000,000. 57. Notwithstanding anything to the contrary contained in Sections 7.11 and 8.16 of the Credit Agreement or in the Pledge Agreement, the Banks hereby agree that Holdings and its Subsidiaries shall not be required to pledge to the Pledgee under the Pledge Agreement the stock of any Foreign Subsidiary acquired pursuant to the Behring Acquisition and required to be pledged pursuant to the terms of the Pledge Agreement until 90 days following the First Amendment Effective Date. II. Miscellaneous Provisions. ------------------------ 1. In order to induce the Banks to enter into this Amendment, the Borrower hereby represents and warrants that: (a) no Default or Event of Default exists as of the First Amendment Effective Date, both before and after giving effect to this Amendment; and (b) all of the representations and warranties contained in the Credit Agreement or the other Credit Documents are true and correct in all material respects on and as of the First Amendment Effective Date, both before and after giving effect to this Amendment, with the same effect as though such representations and warranties had been made on and as of the First Amendment Effective Date (it being understood that any representation or warranty made as of a specific date shall be true and correct in all material respects as of such specific date). 2. On the First Amendment Effective Date, (I) each Domestic Subsidiary acquired pursuant to the Behring Acquisition (each, a "Behring Subsidiary") shall have duly authorized, executed and delivered to the Collateral Agent a counterpart of (x) the Security Agreement covering all of such Credit Party's present and future Security Agreement Collateral, (y) the Subsidiary Guaranty and (z) the Pledge Agreement, each of which counterparts shall be in full force and effect, and (II) each Behring Subsidiary, shall have delivered to the Collateral Agent: (i) proper Financing Statements (Form UCC-1 or the equivalent) fully executed for filing under the UCC or other appropriate filing offices of each jurisdiction as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests purported to be created by the Security Agreement; (ii) certified copies of Requests for Information or Copies (Form UCC-11), or equivalent reports, listing all effective financing statements that name the Behring Acquired Business, as debtor and that are filed in the jurisdictions re ferred to in clause (i) above, together with copies of such financing statements -14- (none of which shall cover the Collateral except to the extent evidencing Permitted Liens or in respect of which the Collateral Agent shall have received termination statements (Form UCC-3 or the equivalent) or such other termination statements as shall be required by local law); (iii) evidence of the completion of all other recordings and filings of, or with respect to, the Security Agreement as may be necessary or, in the opinion of the Collateral Agent, desirable to perfect the security interests intended to be created by the Security Agreement; (iv) subject to Part I, Section 57 of this Amendment, all the Pledged Securities referred to in the Pledge Agreement owned by such Behring Subsidiary, endorsed in blank in the case of promissory notes constituting Pledged Securities, and together with executed and undated irrevocable stock powers, in the case of capital stock constituting Pledged Securities; (v) updated information with respect to all Annexes to the Pledge Agreement and Security Agreement; and (vi) evidence that all other actions necessary or, in the opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the Security Agreement have been taken. 3. Holdings shall cause each Behring Subsidiary that owns Real Property to deliver to the Collateral Agent, within 60 days following the First Amendment Effective Date, (A) duly authorized, fully executed and acknowledged mortgages (as modified, supplemented or amended from time to time, the "Behring Mortgages") in form and substance reasonably satisfactory to the Agent, which Behring Mortgages shall cover all Real Property acquired pursuant to the Behring Transaction owned by a Behring Subsidiary and designated as the Behring Mortgaged Properties on Annex III (the "Behring Mortgaged Properties"), together with evidence that counterparts of the Behring Mortgages have been delivered to the title insurance company insuring the Liens of the Behring Mortgages for recording in all places to the extent necessary or, in the opinion of the Collateral Agent, desirable to effectively create valid and enforce able first priority Liens on the Behring Mortgaged Properties in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors; (B) ALTA Lender's extended coverage policies of mortgage title insurance covering the Behring Mortgaged Properties, together with all endorsements reasonably requested by the Collateral Agent relating thereto (or binding commitments to enter such policies), issued by such title insurers reasonably satisfactory to the Collateral Agent (the "Behring Mortgage Policies") in an amount satisfactory to the Agent and the Required Banks assuring the Collateral Agent that the Behring Mortgages on the Behring Mortgaged Properties are valid and enforceable first priority mortgage liens thereon, free and clear of all defects and encumbrances except Permitted Encumbrances, and the Behring Mortgage Policies shall otherwise be in form and sub stance reasonably satisfactory to the Agent and the Required Banks and (i) shall include, as appropriate, an endorsement for future advances under the Credit Agreement and the -15- Notes and for any other matter that the Collateral Agent in its discretion may reasonably request (to the extent available in the respective jurisdiction of each Behring Mortgaged Property), (ii) shall not include an exception for mechanics' liens, and (iii) shall provide for affirmative insurance and such reinsurance as the Collateral Agent in its discretion may reasonably request; 4. This Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the Credit Agreement or any other Credit Document. 5. This Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A complete set of counterparts shall be lodged with the Borrower and the Agent. 6. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. 7. This Amendment shall become effective on the date (the "First Amendment Effective Date") when the following conditions have been met to the satisfaction of the Agent and each of the Banks (determined immediately after the occurrence of the First Amendment Effective Date): (i) (v) there shall have been delivered to the Agent and the Banks true and correct copies of all Behring Transaction Documents, certified as such by an officer of the Borrower, and all terms and conditions of the Behring Transaction Documents shall be in form and substance reasonably satisfactory to the Agent, (w) all Behring Transaction Documents shall have been duly executed and deliv ered by the parties thereto and shall be in full force and effect, (x) the represen tations and warranties set forth in the Behring Transaction Documents shall be true and correct in all material respects as if made on and as of the First Amendment Effective Date, (y) each of the material conditions precedent to the Borrower's and its Subsidiaries' obligations to consummate the Behring Transaction as set forth in the Behring Transaction Documents shall have been satisfied to the reasonable satisfaction of the Agent and the Required Banks or waived with the consent of the Agent and the Required Banks, and (z) the Behring Transaction shall have been consummated in accordance with all applicable law, the Behring Transaction Documents (without giving effect to any amendment or modification thereof or waiver with respect thereto unless con- -16- sented to by the Agent and the Required Banks) and the relevant requirements of Sections 6.13 and 8.02(gg); (ii) the Agent shall have received from Kirkland & Ellis, special counsel to the Credit Parties, an opinion addressed to the Agent, the Collateral Agent and each of the Banks and dated the First Amendment Effective Date, which opinion shall be in form and substance reasonably satisfactory to the Agent and the Required Banks and shall cover the perfection of security interests granted pursuant to the Security Agreement and such other matters incident to the transactions contemplated herein as the Agent may reasonably request; (iii) the Agent shall have received a certificate, dated the First Amendment Effective Date, signed by the chairman, a vice chairman, the president or any vice president of Holdings, the Borrower and each Behring Subsidiary, substan tially in the form of Exhibit D to the Credit Agreement with appropriate inser tions, together with copies of the certificate of incorporation and by-laws or other organizational documents of such Credit Party and the resolutions of such Credit Party referred to in such certificate, and the foregoing (including each such certificate of incorporation and by-laws) shall be reasonably acceptable to the Agent; (iv) all corporate and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Amendment and the Behring Transaction Documents shall be reasonably satisfactory in form and substance to the Agent and the Required Banks, and the Agent shall have re ceived all information and copies of all certificates, documents and papers, including records of corporate proceedings, governmental approvals, good stand ing certificates and bring-down telegrams or facsimiles, if any, which the Agent may have reasonably requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities; (v) all necessary and material governmental (domestic and foreign) and third party approvals in connection with the Behring Transaction and the transactions contemplated by the Credit Documents and otherwise referred to therein, shall have been obtained and remain in effect (other than any such approvals with respect to the Behring Acquisition which the Borrower reasonably believes both individually and in the aggregate are not material to the -17- operations of Holdings and its Subsidiaries taken as a whole) and all applicable waiting periods shall have expired without any action being taken by any competent authority which restrains, prevents or imposes, in the judgment of the Agent, materially adverse conditions upon the consummation of the Behring Transaction and the transactions contemplated by this Amendment. Additionally, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the consummation of the Behring Transaction or the transactions contemplated by this Amendment; (vi) the Agent shall have received a certificate, dated the First Amendment Effective Date and signed on behalf of the Borrower by an appropriate officer of Holdings, stating all of the conditions in clauses (i), (iv) and (v) of this Part II, Section 7 and Section 5.02 of the Credit Agreement have been satisfied on such date; (vii) the Agent shall have received true and correct copies, certified as true and complete by an appropriate officer of Holdings of (x) each Plan, Collective Bargaining Agreement, Existing Indebtedness Agreement, Shareholders' Agreement, Management Agreement, Employment Agreement, Non-Compete Agreement, Tax-Allocation Agreement and Material Contract not heretofore delivered to the Agent pursuant to Section 5 of the Original Credit Agreement and/or the Credit Agreement and (y) any amendment to any such agreement or document heretofore delivered to the Agent pursuant to Section 5 of the Original Credit Agreement and/or the Credit Agreement, all of which agreements, documents and amendments shall be in form and substance reasonably satisfactory to the Agent and the Required Banks and shall be in full force and effect; (viii) the Agent shall have received analyses and evidence of insurance complying with the requirements of Section 7.03 of the Credit Agreement for the business and properties of the Behring Acquired Business, in scope, form and substance satisfactory to the Agent and the Required Banks and naming the Collateral Agent as an additional insured and/or loss payee, and stating that such insurance shall not be cancelled or revised without 30 days' prior written notice by the insurer to the Collateral Agent; (ix) all actions required by Part II, Section 2 of this Amendment shall have been taken to the reasonable satisfaction of the Agent; -18- (x) the Borrower shall have paid to the Agent and the Banks all fees, cost and expenses (including, without limitation, legal fees and expenses) payable to the Agent and the Banks to the extent then due; and (xi) each of Holdings, the Borrower and the Required Banks shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile transmission) the same to the Agent at its Notice Office. Unless the Agent has received actual notice from any Bank that the conditions contained above have not been met with satisfaction, upon the satisfaction of the condition described in clause (xi) of the immediately preceding sentence and upon the Agent's good faith determination that the other conditions described above have been met, the First Amendment Effective Date shall be deemed to have occurred, regardless of any subsequent determination that one or more of the conditions thereto had not been met (although the occurrence of the First Amendment Effective Date shall not release Holdings or the Borrower from any liability for failure to satisfy one or more of the applicable conditions specified above). The Agent will give the Borrower and each Bank prompt written notice of the occurrence of the First Amendment Effective Date. 8. From and after the First Amendment Effective Date, all references in the Credit Agreement and each of the other Credit Documents to the Credit Agreement shall be deemed to be references to the Credit Agreement as amended hereby. * * * -19- IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Amendment as of the date first above written. DIAGNOSTICS HOLDING, INC. By /s/ Nancy A. Krejsa -------------------------------------- Name: Nancy A. Krejsa Title: Vice President & Treasurer DADE INTERNATIONAL INC. By /s/ Nancy A. Krejsa ----------------------- Name: Nancy A. Krejsa Title: Vice President & Treasurer -20- BANKERS TRUST COMPANY, Individually, as Agent and as Collateral Agent By /s/ Mary Kay Coyle ----------------------- Name: Mary Kay Coyle Title: -21- THE BANK OF NOVA SCOTIA By /s/ F.C.H. Ashby --------------------------------- Name: F.C.H. Ashby Title: Senior Manager Loan Operations -22- BANK OF TOKYO-MITSUBISHI TRUST COMPANY By /s/ Paul P. Malecki -------------------------------- Name: Paul P. Malecki Title: Vice President -23- BANKBOSTON, N. A. By /s/ Kimberly F. Harris -------------------------------- Name: Kimberly F. Harris Title: Vice-President -24- GENERAL ELECTRIC CAPITAL CORPORATION By /s/ Holly Kaczmarczyk -------------------------------- Name: Holly Kaczmarczyk Title: Duly Authorized signatory -25- ROYALTON COMPANY, By Pacific Investment Management Company, as its Investment Advisor By /s/ Raymond Kennedy -------------------------------- Name: Raymond Kennedy Title: Vice President SANWA BUSINESS CREDIT By /s/ Stanley Kaminski -------------------------------- Name: Stanley Kaminski Title: Vice President KEYPORT LIFE INSURANCE COMPANY By Chancellor Lgt Senior Secured Management, Inc. By /s/ Christopher A. Bondy -------------------------------- Name: Christopher A. Bondy Title: Vice President PRIME INCOME TRUST By /s/ Rafael Scolari -------------------------------- Name: Rafael Scolari Title: V.P. Portfolio Manager THE FUJI BANK, LIMITED By /s/ Takeshi Takahashi -------------------------------- Name: Takeshi Takahashi Title: General Manager -26- ABN AMRO BANK N.V., Chicago Branch By /s/ Laurie D. Flom -------------------------------- Name: Laurie D. Flom Title: Vice President By /s/ Douglas R. Elliott -------------------------------- Name: Douglas R. Elliott Title: Vice President MERRILL LYNCH SENIOR FLOATING RATE FUND, INC. By /s/ R. Douglas Henderson -------------------------------- Name: R. Douglas Henderson Title: Authorized Signatory -27- SAKURA BANK LTD. By /s/ Shunji Sakurai -------------------------------- Name: Shunji Sakurai Title: Joint General Manager CAISSE NATIONALE DE CREDIT AGRICOLE By /s/ Katherine L. Abbott -------------------------------- Name: Katherine L. Abbott Title: First Vice President -28- OCTAGON CREDIT INVESTORS LOAN PORTFOLIO, a Unit of The Chase Manhattan Bank By /s/ James P. Ferguson -------------------------------- Name: James P. Ferguson Title: Managing Director IMPERIAL BANK By /s/ R. Vandella -------------------------------- Name: R. Vandella Title: -29- SOUTHERN PACIFIC THRIFT & LOAN ASSOCIATION By /s/ Chris Kelleher -------------------------------- Name: Chris Kelleher Title: Vice President CITIBANK, N.A. By /s/ Hans L. Christensen -------------------------------- Name: Hans L. Christensen Title: Vice President MERRILL LYNCH DEBT STRATEGIES PORTFOLIO By: Merrill Lynch Asset Management L.P., as Investment advisor By /s/ R. Douglas Henderson -------------------------------- Name: R. Douglas Henderson Title: Authorized Signatory -30- MERRILL LYNCH PRIME RATE PORTFOLIO By: Merrill Lynch Asset Management L.P., as Investment Advisor By /s/ R. Douglas Henderson -------------------------------- Name: R. Douglas Henderson Title: Authorized Signatory -31- SENIOR HIGH INCOME PORTFOLIO, INC. By /s/ R. Douglas Henderson -------------------------------- Name: R. Douglas Henderson Title: Authorized Signatory -32- CITY NATIONAL BANK By /s/ George Hayrapetian -------------------------------- Name: George Hayrapetian Title: Vice President -33- FIRST NATIONAL BANK OF CHICAGO By /s/ Christopher J. Cavaiani -------------------------------- Name: Christopher J. Cavaiani Title: Assistant Vice President -34- ML CBO IV (CAYMAN) LTD. By Protective Asset Management Company as Collateral Manager By /s/ James Dondero CFA, CPA -------------------------------- Name: James Dondero CFA, CPA Title: President Protective Asset Management Company -35- NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY By /s/ J. Thomas Christofferson ------------------------------- Name: J. Thomas Christofferson Title: Vice President -36- PILGRIM PRIME RATE FUND By /s/ Michael J. Bacevich -------------------------------- Name: Michael J. Bacevich Title: Vice President -37- SOCIETE GENERALE By /s/ John M. Stack -------------------------------- Name: John M. Stack Title: Director -38- VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST By /s/ Kathleen A. Zarn -------------------------------- Name: Kathleen A. Zarn Title: Vice President -39- EX-10.7 4 AMENDED AND RESTATED STOCKHOLDERS AGREEMENT EXHIBIT 10.7 EXECUTION COPY -------------- AMENDED AND RESTATED STOCKHOLDERS AGREEMENT ------------------------------------------- THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT is made as of October 1, 1997, 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 "Bain Group," and, together with the ---------- GS Group, the "Investors") (Hoechst, the GS Group, the Bain Group and each other --------- party from time to time a party thereto are collectively referred to herein as the "Stockholders," and each as a "Stockholder"). ------------ ----------- WHEREAS, Holdings, as of the date hereof, is authorized by its Certificate of Incorporation to issue capital stock consisting of 1,300,000 shares of its Class L Common Stock, par value $.01 per share (the "Class L ------- Common"), 700,000 shares of its Class L Common, Series B, par value $.01 per - ------ share (the "Class L Common, Series B"), 20,000,000 shares of its Common Stock, ------------------------- par value $.01 per share ("Common"), and 100,000 shares of its Preferred Stock, ------ par value $.01 per share (the "Preferred Stock"). The Class L Common, Class L --------------- Common, Series B, and the Common are collectively referred to herein as "Common ------ Stock". - ----- WHEREAS, the Bain Group, the GS Group and Holdings are parties to a Stockholders Agreement, dated December 20, 1994 (the "Old Agreement"). ------------- WHEREAS, pursuant to an Agreement and Plan of Combination, between Holdings and Hoechst, dated June 24, 1997 (the "Combination Agreement"), Hoechst --------------------- acquired from Holdings (i) the number of shares of Common and of Class L Common, Series B, set forth opposite its name on Schedule III attached hereto and (ii) a warrant to acquire the additional number of shares of Common and of Class L Common, Series B, set forth opposite its name on Schedule III attached hereto. WHEREAS, the GS Group and the Bain Group own the number of shares of Common Stock set forth opposite its name on Schedule III attached hereto. WHEREAS, the parties hereto desire to amend and restate the Old Agreement to establish the composition of Holdings' Board of Directors (the "Board"), to restrict the sale, assignment, transfer, encumbrance or other - ------ disposition of the Common Stock, to provide for certain additional covenants and to provide for certain rights and obligations in respect thereto as hereinafter provided. Unless otherwise provided in this Agreement, capitalized terms used herein shall have the meanings set forth in paragraph 16 hereof. 1 NOW, THEREFORE, the parties to this Agreement hereby agree as follows: 1. Voting Agreement. ---------------- (a) Until the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, each holder of Stockholder Shares shall vote all of such holder's Stockholder Shares and shall take all other 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, and including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings) and Holdings shall take all necessary and desirable actions within its control (including, without limitation, calling special board and stockholder meetings) so that: (i) except as otherwise provided in paragraph 1(a)(ii) below, the authorized number of directors on the Board shall be established at eleven; (ii) following completion of an Initial Public Offering, the authorized number of directors on the Board shall be expanded from eleven in order to add (A) at least one independent director and (B) such additional number of independent directors as determined from time to time by the Board; (iii) a number of persons designated by the holders of a majority of the Bain Shares ("Bain Holders") (so long as such shares (excluding any Deemed Bain Shares) constitute at least 5% of the outstanding Common Stock) shall be members of the Board (the "Bain Directors"), such number being equal to the smallest number as would constitute a percentage of the total number of members of the Board at least as great as the percentage of the outstanding Common Stock then owned by the Investors (and their Affiliates), provided that such number shall be six until and so long as the number of Initial Investor Shares owned by the Investors (and their Affiliates) is equal to or greater than the fewest number of Initial Hoechst Shares owned at any time after the date hereof by Hoechst (and its Affiliates), and provided further that the sum of such number and the number of GS Directors shall not be greater than the number of members of the Board designated by Hoechst (including the Executive Chairman) if the number of Initial Investor Shares owned by the Investors (and their Affiliates) is less than the fewest number of Initial Hoechst Shares owned at any time after the date hereof by Hoechst (and its Affiliates); (iv) two persons designated by Hoechst shall be members of the Board (the "Hoechst Directors"); ----------------- (v) Hoechst shall designate the Executive Chairman (the initial Executive Chairman shall be Uwe Bicker); (vi) the Executive Chairman shall be a member of the Board; 2 (vii) one person designated by the holders of a majority of the GS Shares (the "GS Holders") (so long as such shares constitute at least 5% ---------- of the outstanding Common Stock) shall be a member of the Board (the "GS -- Director"); -------- (viii) the holders of a majority of the Investor Shares (the "Investor Holders") shall designate the President and Chief Executive ----------------- Officer (the initial President and Chief Executive Officer shall be Scott Garrett), except that the Investor Holders shall not have the right to designate such person if the Investors (and their Affiliates) shall ever own less than 75% of the Initial Investors Shares owned by the Investors (and their Affiliates); (ix) the President and Chief Executive Officer shall be a member of the Board; (x) a Strategy Committee of the Board shall be established which shall have responsibility for reviewing strategic investments, strategic plans and technology development, including technology sharing and licensing with Hoechst's other life sciences businesses and with supervising the activities under the Cooperation Agreement; (xi) the Executive Chairman shall be Chairman of the Strategy Committee; (xii) an Executive Committee of the Board shall be established which shall have responsibility for reviewing Holdings' world-wide operations; (xiii) the President and Chief Executive Officer shall be Chairman of the Executive Committee; (xiv) management of Holdings shall prepare and present to the Executive Committee of the Board for approval an annual business plan and budget (a "Business Plan and Budget") setting forth the strategic, operating and financial objectives of Holdings and its subsidiaries for the upcoming fiscal year and the related budget for capital expenditures, investments and other discretionary payments expected to be made during such period. The Executive Committee has the authority to review, approve and, upon approval, present to the entire Board for approval a Business Plan and Budget within 120 days after the end of each fiscal year of Holdings. Approval of a Business Plan and Budget by the Executive Committee shall require the affirmative vote of a majority of its members; provided that such approval shall not be effective if a member of the -------- ---- Executive Committee who is a Hoechst Director shall have voted against approval; and (xv) as soon as reasonably practicable following approval and presentation by the Executive Committee, the Board shall meet to consider the Business Plan and Budget as presented by the Executive Committee. A Business Plan and Budget shall be deemed approved by the Board upon an affirmative vote of a majority of its members; 3 provided that such approval shall not be effective if a Hoechst Director shall - ------------- have voted against approval. (b) After the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, each holder of Stockholder Shares shall vote all of such holder's Stockholder Shares and 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, and including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings) and Holdings shall take all necessary and desirable actions within its control (including, without limitation, calling special board and stockholder meetings) so that: (i) the authorized number of directors on the Board shall be established by the Bain Holders, but shall not be less than five or greater than ten; (ii) a number of persons not greater than two designated by the GS Holders (so long as the GS Shares constitute at least 5% of the outstanding Common Stock) shall be GS Directors, such number being equal to the smallest number as would constitute a percentage of the total number of members of the Board at least as great as the percentage of the outstanding Common Stock then owned by the GS Group; (iii) a number of persons designated by Hoechst (so long as the shares of Common Stock then owned by Hoechst (and its Affiliate) constitute at least 5% of the outstanding Common Stock) shall be Hoechst Directors, such number being equal to the smallest number as would constitute a percentage of the total number of members of the Board at least as great as the percentage of the outstanding Common Stock then owned by Hoechst (and its Affiliates); and (iv) all other members of the Board shall be Bain Directors (so long as the Bain Shares (excluding any Deemed Bain Shares) constitute at least 5% of the outstanding Common Stock), provided that such number of directors shall not be greater than the number of members of the Board designated by Hoechst if the number of Initial Investor Shares owned by the Investors (and their Affiliates) is less than the fewest number of Initial Hoechst Shares owned at any time after the date hereof by Hoechst (and its Affiliates). (c) So long as the relevant Stockholder or Stockholders has the right to designate a director, each committee of the Board shall have as a member at least one Hoechst Director (if requested by Hoechst), one Bain Director (if requested by the Bain Holders) and one GS Director (if requested by the GS Holders). The removal from the Board, any committee of the Board or any position (in each case with or without cause) of any person designated under paragraph 1(a) or 1(b) by the GS Holders, the Bain Holders, the Investor Holders or Hoechst shall be at the written request of the person or group that at the time of such removal has the right pursuant to paragraph 1(a) or (1)(b) to designate such person and only upon such written request and under no other circumstances (except as otherwise required by law). 4 (d) In the event that any person designated under paragraph 1(a) or 1(b) by the GS Holders, the Bain Holders, the Investor Holders or Hoechst, as the case may be, for any reason ceases to serve as a member of the Board or any committee of the Board or in any position for which such representative was designated during such person's term of office, the resulting vacancy on the Board, the committee of the Board or position shall be filled by a person designated by the person or group that at the time of such vacancy has the right pursuant to paragraph 1(a) or 1(b) to designate such person. (e) Nothing contained in this paragraph 1 will require any such holder to violate any legal obligation such holder may have as a director of Holdings. (f) The parties hereto acknowledge that Uwe Bicker may serve as a member of the board of directors of Hoechst Marrion Roussel AG and, upon notice to and approval of the Board, other Hoechst-affiliated or joint venture entities in order to facilitate the activities contemplated by the Cooperation Agreement. (g) The senior management team responsible for Holdings' world-wide operations will include members of the management of Holdings and the Acquired Entities. The membership of the senior management team shall be jointly determined by the Executive Chairman and the President and Chief Executive Officer, and shall be subject to the approval of the Board. All members of senior management will be entitled to participate in management equity participation programs similar to those currently in effect at Holdings. The equity participation of senior management shall be reasonably balanced between members from the management of Holdings and the Acquired Entities. The President and Chief Executive Officer shall consult with a Hoechst Director to determine the equity participation of senior management, subject to the approval of the Board. 2. Restrictions on Transfer of All Stockholder Shares. -------------------------------------------------- (a) General. Until the first to occur of (i) July 31, 1998 and (ii) ------- the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, no holder of Stockholder Shares shall directly or indirectly sell, transfer, assign, pledge, encumber or otherwise dispose of (a "Transfer") -------- any interest in any Stockholder Shares (and no holder of Stockholder Shares shall or shall permit any of its Affiliates, officers, representatives, agents or employees to solicit any such Transfer or to directly or indirectly commence an active process or engage in serious negotiations with respect to any such Transfer) other than in compliance with paragraph 2(b) below. (b) Permitted Transfers. The restrictions contained in paragraph 2(a) ------------------- shall not apply to a Transfer (i) of Investor Shares by any holder thereof to its Affiliates or to any employee of Holdings or its Subsidiaries, (ii of Hoechst Shares by a holder thereof to its Affiliates or to any employee of Holdings or its Subsidiaries, (ii pursuant to a Public Sale, (iv in connection with a Purchase Option Closing, (v) of Stockholder Shares by any holder thereof pursuant to the laws of descent and distribution or among such holder's Family Group, (vi by Hoechst (or its Affiliates) with the prior written consent (which shall not be unreasonably withheld or delayed) of the holders 5 of a majority of the Investor Shares and (vi by any Investor (or its Affiliate) with the prior written consent (which shall not be unreasonably withheld or delayed) of Hoechst; provided that the restrictions contained in this Agreement will continue to be applicable to the Stockholder Shares after any Transfer pursuant to clauses (i), (ii), (v), (vi) and (vii) and the transferees of such Stockholder Shares shall agree, prior to any such Transfer, in writing to be bound by the provisions of this Agreement by executing and delivering to Holdings and the other Stockholders a counterpart of this Agreement; and provided further that any Transfer permitted pursuant to this paragraph 2(b) shall remain subject to the restrictions contained in this Agreement other than those set forth in paragraph 2(a). 3. Additional Restrictions on Transfer of Hoechst Shares. ----------------------------------------------------- (a) General. In addition to the restrictions set forth in paragraph ------- 2, no holder of Hoechst Shares may Transfer any interest in any Hoechst Shares other than in compliance with paragraphs 3(b) and 3(c) below. (b) Investor Participation Rights. ----------------------------- (i) At least 45 days prior to any Transfer (other than any Transfer permitted by paragraph 3(c)) of any Hoechst Shares by a holder thereof (a "Hoechst Stockholder"), the Hoechst Stockholder will deliver to ------------------- Holdings, the GS Designee and the Bain Designee a written notice (a "Sale ---- Notice") specifying in reasonable detail the identity of the prospective ------ transferee(s) and the terms and conditions of the contemplated Transfer. The holders of Investor Shares may elect to participate in the contemplated Transfer by delivering written notice to the Hoechst Stockholder within 45 days after delivery of the Sale Notice. If any holders of Investor Shares have elected to participate in such Transfer, the Hoechst Stockholder and such holders will be entitled to sell in the contemplated Transfer, at the same price and on the same terms, a number of shares of each class of Common Stock being Transferred equal to the product of (A) the quotient determined by dividing the number of shares of such class of Common Stock owned by such person by the aggregate number of shares of such class of Common Stock owned by the Hoechst Stockholder and such holders participating in such sale and (B) the number of shares of such class of Common Stock to be sold in the contemplated Transfer. Notwithstanding the foregoing, in the event that the Hoechst Stockholder intends to Transfer shares of more than one class of Common Stock, the holders of Investor Shares participating in such Transfer shall be required to sell in the contemplated Transfer a pro rata portion of shares of all such classes of Common Stock, which portion shall be determined in the manner set forth immediately above. (ii) The Hoechst Stockholder will use reasonable efforts to obtain the agreement of the prospective transferee(s) to the participation of the holders of Investor Shares in any contemplated Transfer, and the Hoechst Stockholder will not Transfer any of its shares of Common Stock to the prospective transferee(s) unless (A) simultaneously with such Transfer, the prospective transferee(s) purchases, at the same price and on the same 6 terms, from such holders the shares of Common Stock which they are entitled to sell to such prospective transferee pursuant to paragraph 3(b)(i) or (B) simultaneously with such Transfer, the Hoechst Stockholder purchases, at the same price and on the same terms, the number of shares of Common Stock from the holder of Investor Shares which such holder would have been entitled to sell pursuant to the last sentence of paragraph 3(b)(i) above. (iii) If the Transfer contemplated by a Sale Notice is not consummated within 90 days after the delivery thereof, such Sale Notice and all elections by the holders of Investor Shares (if any) shall be deemed to have been rescinded (and any subsequent Transfer will continue to be governed by this paragraph 3(b)); provided that such 90 day period shall be extended to 245 days solely to the extent that such Transfer is not consummated due to delay in the receipt of regulatory approvals. (c) Permitted Transfers. The restrictions contained in paragraph 3 ------------------- shall not apply to a Transfer (i) of Hoechst Shares by holder thereof to its Affiliates or to any employee of Holdings or its Subsidiaries, (ii pursuant to a Public Sale, (ii pursuant to an Approved Sale, (iv pursuant to the consummation of a Strategic Buyer Transaction and (v) of Stockholder Shares by any holder thereof pursuant to the laws of descent and distribution or among such holder's Family Group; provided that the restrictions contained in this Agreement will continue to be applicable to the Hoechst Shares after any Transfer pursuant to clauses (i) and (v) and the transferees of such Hoechst Shares shall agree, prior to such Transfer, in writing to be bound by the provisions of this Agreement by executing and delivering to Holdings and the other stockholders a counterpart of this Agreement. (d) Bain Purchase Right. In the event that after three consecutive ------------------- meetings of the Executive Committee of the Board a Hoechst Director shall continue to vote against approval of a Budget and Business Plan, Bain and Goldman (and/or any person designated by Bain or Goldman) (pro rata based on the number of shares of Common Stock then owned by each and each of their respective Affiliates) will have the right upon written notice to Hoechst to purchase any and all Hoechst Shares at a purchase price per share equal to X divided by Y, multiplied by Z, where "X" is the amount equal to 5 times the earnings before interest, taxes, depreciation and amortization for the most recent four-quarter period, less the amount of all indebtedness and other liabilities as of the end of the most recent fiscal quarter, of Holdings and its subsidiaries determined on a consolidated basis in accordance with United States generally accepted accounting principles, "Y" is the number of shares of Common Stock then outstanding on a fully-diluted basis and "Z" is 0.60, being the factor agreed by the parties as representing an appropriate discount for a minority equity interest in Holdings. The closing(s) of any such purchase(s) shall take place as soon as practicable. At such closing(s), the purchase price for the Hoechst Shares shall be paid, at the option of the purchaser, by wire transfer of immediately available funds or by delivery of each purchaser's ten-year promissory note bearing interest at a rate per annum of 10% payable quarterly (in cash or in kind), or any combination of the foregoing. 7 4. Additional Restrictions on Transfer of Investor Shares. ------------------------------------------------------ (a) General. In addition to the restrictions set forth in paragraph ------- 2, no holder of Investor Shares may Transfer any Investor Shares other than in compliance with paragraphs 4(b) and 4(c). (b) First Offer Right; Additional Restrictions on Investor Transfers. ---------------------------------------------------------------- (i) Until the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, no Investor shall or shall permit any of its Affiliates (other than Holdings to the extent Holdings is not acting as an agent for an Investor), officers, representatives, agents or employees to solicit directly or indirectly any Transfer of Investor Shares or to commence directly or indirectly an active process or engage in serious negotiations with respect to any such Transfer (it being understood that the foregoing restrictions are not intended to restrict an Investor (or its Affiliates) from consulting its financial, tax and legal advisors for advice with respect to a Transfer) or Transfer any such Investor Shares prior to delivery of the Pre IPO Offer Notice pursuant to subparagraph 4(b)(ii) below or the Post IPO Offer Notice pursuant to subparagraph 4(b)(iii) below, as the case may be. (ii) At any time prior to an Initial Public Offering and until the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, any holder of Investor Shares (the "Selling ------- Investor") who desires to effect a Transfer (other than a Transfer -------- permitted by paragraph 4(d)) of any Investor Shares (the "Subject Shares") -------------- shall promptly deliver to the holders of Bain Shares (the "Other ----- Investors") and to Hoechst a written notice (the "Pre IPO Offer Notice") -------------------- setting forth the terms (which must include the number of Subject Shares and a per share cash purchase price) of such desired Transfer. The 45-day period following the delivery of the Pre IPO Offer Notice shall be referred to herein as the "Pre IPO Offer Period". The Pre IPO Offer Notice shall -------------------- constitute an offer to sell the Subject Shares upon the terms specified to the Other Investors and Hoechst that is irrevocable until the expiration of the Pre IPO Offer Period. Upon receipt of the Pre IPO Offer Notice, the Other Investors may elect to purchase at the price and on the terms specified in the Pre IPO Offer Notice all or any portion of the Subject Shares (pro rata among such Other Investors according to the number of the relevant class of shares owned by each such Other Investor). Such election shall be made by delivering written notice of the number of Subject Shares desired to be purchased to the Selling Investor and Hoechst prior to expiration of the Pre IPO Offer Period. Hoechst may also elect to purchase all (but not less than all) of the Subject Shares at the price and on the terms specified in the Pre IPO Offer Notice. Such election shall be made by delivering written notice to the Selling Investor and the Other Investors prior to expiration of Pre IPO Offer Period. If both Other Investors and Hoechst elect to purchase Subject Shares, the Other Investors shall be entitled to purchase such portion of the number of Subject Shares that they each elected to purchase as would not exceed its respective Other Investor Percentage. The "Other Investor Percentage" of each Other Investor is equal to the quotient obtained by dividing the number 8 of shares of Common Stock then owned by such Other Investor by the total number of shares of Common Stock then owned by Hoechst (and its Affiliates) and all Other Investors. If Hoechst and/or the Other Investors do not elect to purchase all of the Subject Shares, the Selling Investor, subject to the provisions of subparagraph (c) below, shall have the right to consummate a sale of such Subject Shares on substantially equivalent terms and at no less than the per share equivalent value of the per share cash purchase price set forth in the Pre IPO Offer Notice (which shall be supported by the opinion of an Independent Investment Bank if the purchase price is not fully paid in cash and/or publicly-traded securities and if such opinion is requested by Hoechst within 5 Business Days following written notice from the Selling Investor that the purchase price is not being fully paid in cash and/or publicly-traded securities) within 210 days after the expiration of the Pre IPO Offer Period, provided that such 210 day period shall be extended to 365 days solely to the extent that the Transfer of the Subject Shares not purchased by Hoechst and/or the Other Investors is not consummated due to delay in the receipt of regulatory approvals. Any shares of Common Stock purchased by Hoechst (or an Affiliate) from a member of the GS Group pursuant to the foregoing which the Other Investors had elected to purchase shall thereafter be deemed to be an Initial Bain Share that is owned by Bain (a "Deemed Bain Share") until such time as the Bain Group shall no longer own shares of Common Stock (excluding any Deemed Bain Shares) constituting at least 5% of the outstanding Common Stock. (iii) At any time after an Initial Public Offering and until the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, any Selling Investor who desires to effect a Transfer (other than a Transfer permitted by paragraph 4(d)) of any Investor Shares (the "Post IPO Offer Shares") shall promptly deliver to the Other Investors --------------------- and Hoechst a written notice (the "Post IPO Offer Notice") setting forth --------------------- the terms (which must include the number of Post IPO Offer Shares and a per share cash purchase price) of such desired Transfer. The five Business Day period or, upon the election of such Selling Investor as specified in the Post IPO Offer Notice, the 33-day period (the "Expanded Period") following --------------- delivery of the Post IPO Offer Notice shall be referred to herein as the "Post IPO Offer Period". The Post IPO Offer Notice shall constitute an ---------------------- offer to sell the Post IPO Offer Shares upon the terms specified to the Other Investors and Hoechst that is irrevocable until the expiration of the Post IPO Offer Period. Upon receipt of the Post IPO Offer Notice, the Other Investors may elect to purchase at the price and on the terms specified in the Post IPO Offer Notice all or a portion of the Post IPO Offer Shares (pro rata among such Other Investors according to the number of the relevant class of shares owned by each such Other Investor). Such election shall be made by delivering written notice of the number of the Post IPO Offer Shares desired to be purchased to the Selling Investor and Hoechst prior to the expiration of the Post IPO Offer Period. Hoechst may also elect to purchase all (but not less than all) of the Post IPO Offer Shares at the price and on the terms specified in the Post IPO Offer Notice by delivering written notice to the Selling Investor and the Other Investors prior to expiration of the Post IPO Offer Period. If both Other Investors and Hoechst elect to purchase Subject Shares, the Other Investors shall be entitled to purchase such portion of the number of Subject Shares that they each elected to purchase as would not exceed its respective Other Investor Percentage. If Hoechst and/or the Other 9 Investors do not elect to purchase all of the Post IPO Offer Shares and the price set forth in the Post IPO Offer Notice is higher than the closing market price on the date of the Post IPO Offer Notice, the Selling Investor, subject to the provisions of subparagraph (c) below, shall have the right to consummate a sale of the Post IPO Offer Shares on substantially equivalent terms and at no less than the per share equivalent value of the per share cash purchase price set forth in the Post IPO Offer Notice (which shall be supported by the opinion of an Independent Investment Bank if the purchase price is not fully paid in cash and/or publicly-traded securities and if such opinion is requested by Hoechst within 5 Business Days following written notice from the Selling Investor that the purchase price is not being fully paid in cash and/or publicly- traded securities) within 180 days after expiration of the Post IPO Offer Period, provided that such 180 day period shall be extended to 365 days solely to the extent that the Transfer of the Post IPO Offer Shares is not consummated due to delay in the receipt of regulatory approvals; provided -------- further that if the Post IPO Offer Period is five Business Days, the ------- Selling Investor may only consummate such a sale of the Post IPO Offer Shares for cash and such sale, together with any other sales effected with a Post IPO Offer Period of only five Business Days in the past six months, must not include shares aggregating more than 5% of the outstanding Common Stock. If Hoechst and/or the Other Investors have not elected to purchase all of the Post IPO Offer Shares not purchased by the Other Investors and the per share price set forth in the Post IPO Offer Notice is less than or equal to the closing market price on the date of the Post IPO Offer Notice, the Selling Investor, subject to the provisions of subparagraph (c) below, shall have the right to consummate a sale of such Post IPO Offer Shares at any price within 180 days, provided that such 180 day period shall be extended to 365 days solely to the extent that the Transfer of the Post IPO Offer Shares is not consummated due to delay in the receipt of regulatory approvals; provided further that if the Post IPO Offer Period is five ---------------- Business Days, the Selling Investor may only consummate such a sale of the Post IPO Offer Shares for cash and such sale, together with any other sales effected with a Post IPO Offer Period of only five Business Days in the past six months, must not include shares aggregating more than 5% of the outstanding Common Stock. In the event that the management board of Hoechst holds a meeting 5 or more Business Days after the date of the Post IPO Offer Notice, the Expanded Period shall be reduced to a period that ends 4 Business Days after the date of the first such meeting, but in no event shall be shorter than 20 days or longer than 33 days, and such Expanded Period shall be the "Post IPO Offer Period" for purposes of the foregoing. Any shares of Common Stock purchased by Hoechst (or an Affiliate) from a member of the GS Group pursuant to the foregoing which the Other Investors had elected to purchase shall thereafter be deemed to be a Deemed Bain Share until such time as the Bain Group shall no longer own shares of Common Stock (excluding any Deemed Bain Shares) constituting at least 5% of the outstanding Common Stock. (iv) Until the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, no member of the Bain Group, on the one hand, nor member of the GS Group, on the other hand, without the consent of Bain and Goldman, shall Transfer any Initial Investor Shares if as a result of such Transfer the Bain Group or the GS Group, as the case may be, shall own a percentage amount of such Group's Initial Investor Shares 10 less than the Hoechst Percentage. "Hoechst Percentage" shall mean the percentage amount determined by dividing (A) the fewest number of Initial Hoechst Shares owned by Hoechst (and its Affiliates) at any time after the date hereof by (B) the number of Initial Investor Shares. (c) Participation Rights of Hoechst and the Investors. ------------------------------------------------- (i) At least 15 days prior to any Transfer (other than any Transfer permitted by paragraph 4(d) or a Transfer pursuant to a Public Sale or Approved Sale) of any Subject Shares or Post IPO Offer Shares not purchased by the Other Investors and Hoechst pursuant to paragraph 4(b), the Selling Investor will deliver to Hoechst and the other holders of Investor Shares (collectively, the "Other Stockholders") a Sale Notice. ------------------ The Other Stockholders may elect to participate in the contemplated Transfer by delivering written notice to the Selling Investor within 15 days after delivery of the Sale Notice. If any Other Stockholders have elected to participate in such Transfer, each of the Selling Investor and such Other Stockholders will be entitled to sell in the contemplated Transfer, at the same price and on the same terms, a number of shares of each class of Common Stock being transferred equal to the product of (A) the quotient determined by dividing the number of shares of such class of Common Stock owned by such person by the aggregate number of shares of such class of Common Stock owned by the Selling Investor and the Other Stockholders participating in such sale and (B) the number of shares of such class of Common Stock to be sold in the contemplated Transfer. Notwithstanding the foregoing, in the event that the Selling Investor intends to Transfer shares of more than one class of Common Stock, the Other Stockholders participating in such Transfer shall be required to sell in the contemplated Transfer a pro rata portion of shares of all such classes of Common Stock, which portion shall be determined in the manner set forth immediately above. (ii) The Selling Investor will use reasonable efforts to obtain the agreement of the prospective transferee(s) to the participation of the Other Stockholders in any contemplated Transfer, and the Selling Investor will not Transfer any of its shares of Common Stock to the prospective transferee(s) unless (A) simultaneously with such Transfer, the prospective transferee(s) purchases, at the same price and on the same terms, from the Other Stockholders the shares of Common Stock which they are entitled to sell to such prospective transferee pursuant to paragraph 4(c) or (B) simultaneously with such Transfer, the Selling Investor purchases, at the same price and on the same terms, the number of shares of such class of Common Stock from the Other Stockholders which the Other Stockholders would have been entitled to sell pursuant to the last sentence of paragraph 4(c)(i) above. (iii) If the Transfer contemplated by a Pre IPO Offer Notice or a Post IPO Offer Notice is not consummated within the time periods set forth in paragraph 4(b)(ii) or 4(b)(iii) (regardless of whether Hoechst had a right to purchase thereunder), as the case may be, such Sale Notice and all elections by Other Stockholders (if any) shall be deemed to have 11 been rescinded (and any subsequent Transfer by a Selling Investor will continue to be governed by this paragraph 4). (d) Permitted Transfers. The restrictions contained in this paragraph ------------------- 4 shall not apply to a Transfer (i) of Investor Shares by any holder thereof to its Affiliates or to any employee of Holdings or its Subsidiaries, (ii in connection with a Purchase Option Closing and (ii of Investor Shares by any holder thereof pursuant to the laws of descent and distribution or among such holder's Family Group; provided that the restrictions contained in this Agreement will continue to be applicable to Investor Shares after any Transfer pursuant to clauses (i) and (iii) and the transferees of such Investor Shares shall agree in writing to be bound by the provisions of this Agreement by executing and delivering to Holdings and the other stockholders a counterpart of this Agreement. 5. Approved Sale. ------------- (a) Subject to paragraphs 2, 4, 9 and 10(a) hereof, if the holders of a majority of the outstanding shares of Common Stock approve (or if, after the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, the Bain Holders approve), a sale of all or substantially all of Holdings' assets determined on a consolidated basis or a sale of all or substantially all (i.e., greater than 80%) of Holdings' outstanding capital stock (whether by merger, recapitalization, consolidation, reorganization, combination or otherwise) to any Independent Third Party or group of Independent Third Parties (collectively an "Approved Sale"), each holder of Stockholder ------------- Shares will consent to and raise no objections against such Approved Sale. If the Approved Sale is structured as (i) a merger or consolidation, each holder of Stockholder Shares will waive any dissenter's rights, appraisal rights or similar rights in connection with such merger or consolidation or (ii) sale of stock, each holder of Stockholder Shares will agree to sell all of its Stockholder Shares and rights to acquire Stockholder Shares on the terms and conditions approved by the holders of a majority of the outstanding shares of Common Stock (or, after the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, by the Bain Holders). Each holder of Stockholder Shares will take all reasonable actions in connection with the consummation of the Approved Sale as requested by Holdings. Each holder of GS Shares hereby agrees to vote all of its shares in connection with any potential Approved Sale transaction in the same manner as the Bain Holders. Nothing in this paragraph 5 shall preclude any party from making an offer to Holdings or Holdings from accepting such offer for the assets or stock of Holdings. (b) The obligations of the holders of Common Stock with respect to an Approved Sale are subject to the satisfaction of the following conditions: (i) upon the consummation of the Approved Sale, each holder of Common Stock will sell such Common Stock on the same terms and will receive the same form of consideration and the same portion of the aggregate consideration that such holders of Common Stock would have received if such aggregate consideration had been distributed by Holdings in complete liquidation pursuant to the rights and preferences set forth in Holdings' Certificate of Incorporation as in effect immediately prior to such Approved Sale; (ii) each holder of shares of a class of Common Stock 12 will be given the same consideration with respect to each share of such class, and if any holders of a class of Common Stock are given an option as to the form and amount of consideration to be received, each holder of such class of Common Stock will be given the same option with respect to each share of such class; and (iii) each holder of then currently exercisable rights to acquire shares of a class of Common Stock will be given an opportunity to exercise such rights prior to the consummation of the Approved Sale and participate in such sale as holders of such class of Common Stock. (c) If Holdings or the holders of Holdings' securities enter into any negotiation or transaction for which Rule 506 (or any similar rule then in effect) promulgated by the Securities and Exchange Commission may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), the holders of Stockholder Shares will, at the request of Holdings, appoint a purchaser representative (as such term is defined in Rule 501) reasonably acceptable to Holdings. If any holder of Stockholder Shares appoints a purchaser representative designated by Holdings, Holdings will pay the fees of such purchaser representative, but if any holder of Stockholder Shares declines to appoint the purchaser representative designated by Holdings such holder will appoint another purchaser representative, and such holder will be responsible for the fees of the purchaser representative so appointed. This paragraph (c) shall apply only to holders of Stockholder Shares that are required to appoint a purchaser representative under Regulation D (or any successor regulation then in effect) promulgated by the Securities and Exchange Commission. (d) Holders of Stockholder Shares will bear their pro-rata share (based upon the proceeds to be received by Holders of Stockholder Shares) of the costs of any sale of Stockholder Shares pursuant to an Approved Sale to the extent such costs are incurred for the benefit of all holders of Common Stock and are not otherwise paid by Holdings or the acquiring party. For purposes of this paragraph 5(d), costs incurred in exercising reasonable efforts to take all necessary actions for the consummation of an Approved Sale in accordance with paragraph 5(a) shall be deemed to be for the benefit of all holders of Common Stock. Costs incurred by holders of Stockholder Shares on their own behalf will not be considered costs of the transaction hereunder. 6. Initial Public Offering. ----------------------- (a) Subject to paragraph 10(a) of this Agreement, in the event that the Board approves an Initial Public Offering or an Initial Public Offering is consummated pursuant to the terms of the Registration Agreement, the holders of Stockholder Shares will use reasonable efforts to take all necessary actions in connection with the consummation of the Initial Public Offering. In the event that such Initial Public Offering is an underwritten offering and the managing underwriters advise Holdings in writing that in their opinion the Common Stock structure (other than the rights and obligations under this Agreement) will adversely affect the marketability of the offering, each holder of Stockholder Shares will consent to and vote for a recapitalization, reorganization and/or exchange of the Common Stock into securities that the managing underwriters, the Board and holders of a majority of the shares of Common Stock then outstanding find acceptable and will take all necessary or desirable actions in connection with the consummation of the recapitalization, reorganization and/or exchange; provided that as a result of such recapitalization, reorganization and/or exchange either (i) each share of Class L Common and Class L Common, Series B, is converted or exchanged into (A) one share of Common and (B) shares of nonparticipating preferred 13 stock with a liquidation value equal to the unreturned Original Cost plus Unpaid Yield (as such terms are defined in the Certificate of Incorporation) and a stated maturity of 5 years or less from date of issue and which, combined with the share of Common, otherwise has the same economic rights (including yield) and preferences as it possessed prior to such recapitalization, reorganization and/or exchange, or a cash payment in an amount equal to unreturned Original Cost plus Unpaid Yield in lieu thereof or (ii) each share of Class L Common and Class L Common, Series B, is converted or exchanged into one share of Common plus a number of shares of Common with a dollar value, based on the price to the public, equal to such share's Unreturned Original Cost plus the Unpaid Yield, as the case may be, thereon. The parties agree that the rights and obligations specified in this Agreement shall survive the consummation of the Initial Public Offering, except to the extent expressly provided herein. (b) Until the earlier of the date on which Hoechst (and its Affiliates) owns less than 75% of the Initial Hoechst Shares and the second anniversary of the effective date of the Initial Public Offering, no Stockholder will purchase or otherwise acquire directly or indirectly any shares of Common Stock in the open market without the prior written consent of each of Hoechst and the Investor Holders. 7. Preemptive Rights. ----------------- (a) Except for the issuance of Common Stock (and/or securities exercisable for or convertible into Common Stock) (i) to Holdings' or its Subsidiaries' directors or employees in their capacity as such, (ii in connection with an Approved Sale, (ii pursuant to a Strategic Buyer Transaction, (iv in connection with any merger, consolidation, acquisition of stock, acquisition of assets, business combination or similar transaction, (v) pursuant to the initial public offering of Holdings' Common Stock registered under the Securities Act with respect to a number of shares of Common Stock equal to up to 20% of the shares of Common Stock outstanding immediately prior to such initial public offering or (vi) upon the conversion or exercise of securities convertible into or containing options or rights to acquire Common Stock, Holdings shall first offer to sell to each holder of Bain Shares, each holder of GS Shares and, until Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, Hoechst a portion of such stock or securities equal to (x) the quotient determined by dividing (A) the number of shares of Common Stock held by such holder of Stockholder Shares (including any shares issuable upon exercise of the Warrant if then exercisable) by (B) the total number of shares of outstanding Common Stock (including any shares issuable upon exercise of the Warrant if then exercisable) plus (y) a pro rata share of such stock or securities not otherwise purchased by the other Stockholders, if any. Each such holder of Stockholder Shares shall be entitled to purchase such stock or securities at the most favorable price and on the most favorable terms as such stock or securities are to be offered to any other Person. The purchase price for all stock and securities offered to each such holder of Stockholder Shares shall be payable in cash by wire transfer of immediately available funds. (b) In order to exercise its purchase rights hereunder, each holder of Stockholder Shares must deliver a written notice to Holdings describing its election hereunder within 30 days 14 after receipt of written notice from Holdings describing in reasonable detail the stock or securities being offered, the purchase price thereof, the payment terms and such holder's percentage allotment. (c) Upon the expiration of the offering periods described above, Holdings shall be entitled to sell such stock or securities which the holders of Stockholder Shares have not elected to purchase during the 90 days following such expiration on terms and conditions no more favorable to the purchasers thereof than those offered to holders of Stockholder Shares. Any stock or securities offered or sold by Holdings to any Person after such 90 day period must be reoffered to the holders of Stockholder Shares pursuant to the terms of this paragraph. 8. Stockholder Negotiations with Other Parties. Until the date on ------------------------------------------- which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares, each Stockholder and Holdings agree that it will promptly notify the Board (including specifically the Hoechst Directors) as to the existence of any serious negotiations with any person relating to (i) a sale of Stockholder Shares (other than a sale that would be permitted under paragraph 4(d)), (ii) an issuance of Common Stock (and/or securities exercisable for or convertible into Common Stock) constituting more than 20% of the outstanding Common Stock (after giving effect to such issuance and on a fully-diluted basis) or (iii) a merger, consolidation, business combination or similar transaction pursuant to which the stockholders of Holdings immediately prior to consummation of such transaction would (after giving effect thereto) directly or indirectly (e.g., through the ---- percentage equity ownership of such stockholders in the surviving corporation in such transaction) own less than 80% of Holdings's consolidated assets or a sale of assets of Holdings or any subsidiary constituting more than 20% of Holdings's consolidated assets, and provide the Board (including specifically the Hoechst Directors) from time to time with the terms of any proposed offer relating to any such transaction. Until the earlier of the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares and October 15, 1999, each Stockholder and Holdings agree to provide the Board and Hoechst notice (which notice will specify the form of the transaction and summarily describe the assets or the amount of Common Stock (or securities convertible into or exchangeable for Common Stock) which are expected to be the subject of the transaction but need not specify either price terms or the identity of the parties thereto) no less than ten days prior to entering into any agreement or arrangement with respect to any such transaction, provided that no such notice shall be required if (A) no more than 90 days prior to the entering into of any such agreement or arrangement a Stockholder or Holdings shall have given Hoechst written notice (the "Section 8 Notice") of its interest in effecting such a transaction, and (B) Hoechst shall have not delivered to such Stockholder and Holdings within 10 days after receipt of the Section 8 Notice a written indication of interest in pursuing a transaction with Holdings or the Stockholders, as the case may be, executed by a member of the management board of Hoechst. 9. Proposed Transactions with Strategic Buyer. ------------------------------------------ (a) If on or prior to July 31, 1998, Holdings or any of its Subsidiaries proposes to enter into a merger, consolidation or other business combination or other similar transaction pursuant to which a Strategic Buyer (or an Affiliate thereof) will upon consummation thereof become a holder of more than 20% of the outstanding shares of Common Stock (or securities 15 exercisable for or convertible into Common Stock) (determined on a fully-diluted basis) or 20% of the outstanding equity securities of a subsidiary of Holdings (or securities exercisable for or convertible into any such equity securities) (determined in each case immediately after giving effect to the consummation of such transaction) (a "Strategic Buyer Transaction"), then Holdings shall give --------------------------- prior written notice to Hoechst. Within 10 Business Days following receipt of such notice, Hoechst shall have the right to require a determination of Holdings Common Equity Value by delivering written notice to Holdings and the Investors (the "Determination Notice"). Subject to the provisions set forth herein below, within 10 Business Days following determination of Holdings Common Equity Value, Hoechst shall have the right to elect to purchase all (but not less than all) of the outstanding Common Stock (determined on a fully-diluted basis) of the Investors for the amount of Holdings Common Equity Value (the "Purchase Option") --------------- of such stock by delivering written notice to Holdings and the Investors (the "Purchase Option Notice"). Notwithstanding the foregoing, Holdings may terminate ---------------------- the Purchase Option any time within ten days of receipt of the Purchase Option Notice by delivering to Hoechst written notice of its election not to pursue the Strategic Buyer Transaction. If Hoechst does not deliver the Determination Notice, or the Purchase Option Notice, in each case within the ten-day period specified, Holdings will have the right to consummate such proposed transaction at any price for 210 days after the expiration of the applicable ten-day period, provided that such 210 day period shall be extended to 365 days solely to the extent that consummation of such proposed transaction does not occur due to regulatory approval. Holdings and the Investors agree that until July 31, 1998, Holdings and the Investors will not and will not permit any of their Affiliates, officers, representatives, agents or employees to directly or indirectly solicit any Strategic Buyer Transaction. (b) Upon delivery of the Purchase Option Notice (and so long as Holdings has not terminated the Purchase Option), Holdings, Hoechst and the Investors shall as soon as reasonably practicable thereafter enter into customary transfer documentation, provided that such documentation shall not contain any ongoing representations, warranties or indemnities with respect to the sale of the outstanding equity securities other than as to due authority and ownership, and shall close the transaction as soon as reasonably practical (the "Purchase Option Closing"). ----------------------- (c) At the Purchase Option Closing, the Investors shall deliver to Holdings duly executed instruments transferring title to the Investor Shares to Hoechst against payment of the Investors' share of Holdings Common Equity Value, together with interest from the date of the Determination Notice to the date of the Purchase Option Closing at the rate per annum announced from time to time by Citibank N.A. as its "prime rate", by wire transfer of immediately available funds. At the Purchase Option Closing, Hoechst shall purchase any other shares of Common Stock outstanding and all Other Equity Claims at the same per share price (reduced in the case of Other Equity Claims by any amounts necessary to exercise any rights to acquire such Common Stock). (d) Certain Definitions. ------------------- "Holdings Common Equity Value" shall mean the fair market value of ---------------------------- Common Stock as of the date of the Determination Notice determined on a going concern basis. The calculation of fair market value shall take into account all relevant factors determinative of value 16 including, without limitation, any increase to such fair market value reasonably expected to result from the proposed Strategic Buyer Transaction. Market Value shall be determined in good faith by the Investor Holders and such holders shall submit to Holdings and Hoechst a statement setting forth such determination (the "Investors' Market Value"). The Investors' Market Value shall be final, ---------------------- conclusive and binding on the parties unless Hoechst delivers a notice (the "Objection Notice") to the Bain Designee and the GS Designee disputing such ---------------- determination within 30 days after delivery of the statement, stating therein its position with respect to such determination. If Hoechst delivers the Objection Notice, the parties shall seek to resolve the dispute and, if Hoechst and the Investor Holders are unable to resolve such dispute within 30 additional days (such 30 day period, the "Resolution Period"), such dispute shall be ----------------- determined by an Independent Investment Bank. The Independent Investment Bank's determination of Market Value shall be based on the definition of Market Value contained herein. The Independent Investment Bank shall choose as the Holdings Common Equity Value either the Investors' Market Value or the value determined by Hoechst and shall not be permitted to determine that the Holdings Common Equity Value is any other amount. Such Common Equity Value will be final, conclusive and binding on the parties hereto. Holdings will pay the fees and expenses of the Independent Investment Bank. "Other Equity Claims" shall mean all outstanding options, warrants or ------------------- other rights to purchase or acquire Common Stock other than the Investor Shares. 10. Restrictive Covenants. --------------------- (a) GS Group. Until the first of (i) the GS Group holding less than a -------- majority of the Initial GS Shares, (ii) the GS Group not having at least one designee on the Board, and (iii) December 20, 1999, Holdings shall not without the prior written consent of the GS Group: (i) authorize or enter into any agreement providing for a sale of the company to an Independent Third Party or group of Independent Third Parties pursuant to which such party or parties acquire (i) capital stock of Holdings possessing the voting power under normal circumstances to elect a majority of the Board (whether by merger, consolidation or sale or transfer of Holdings's capital stock) or (ii) all or substantially all (as such phrase is described in the Official Comment to (S) 12.01 of the Revised Model Business Corporation Act (1984, as amended as of the date hereof)) of Holdings's assets determined on a consolidated basis; (ii) sell its common equity securities, securities convertible or exchangeable for common equity securities, options or other rights to purchase common equity securities or other common equity equivalents pursuant to its Initial Public Offering; (iii) sell, lease or otherwise dispose of, or permit any Subsidiary to sell, lease or otherwise dispose of, all or substantially all (as such phrase is described in the Official Comment to (S) 12.01 of the Revised Model Business Corporation Act (1984, as amended as of the date hereof)) to an Independent Third Party or group of Independent Third 17 Parties of any of the product lines set forth on Exhibit A attached hereto in any transaction or series of related transactions at any price below those set forth on Exhibit A; or (iv) permit Holdings to engage or permit any of its subsidiaries to engage in any businesses which are not the same, similar or related to the businesses in which Holdings and its Subsidiaries are engaged on the date of this Agreement. (b) Hoechst. Until the date on which Hoechst (and its Affiliates) own ------- less than 75% of the Initial Hoechst Shares, the affirmative vote of a majority of the members of the Board of Directors, which shall include at least one Hoechst Director, will be required for the approval of any of the following: (i) the appointment of any independent director pursuant to paragraph 1; (ii) entering by Holdings or any of its subsidiaries into, amending any written agreement or engaging in any other transaction with Goldman, Bain Capital, Inc. or any of their respective Affiliates, other than on terms that are fair and reasonable and no less favorable to Holdings or such subsidiary than it would obtain in a comparable arm's length transaction with an Independent Third Party; (iii) the issuance of any shares of capital stock of Holdings to any third party who conducts a health care business having annual gross revenues in excess of US$50 million which competes with a health care business conducted by Hoechst (or an Affiliate) if such third party would, as a result thereof, own in excess of 20% of the outstanding shares of Common Stock (or securities convertible into or exercisable for Common Stock) (determined on a fully diluted basis) of Holdings or 20% of the outstanding equity securities of a subsidiary of Holdings (or securities convertible into or exercisable for any such securities) (determined in each case immediately after giving effect to the consummation of such issuance), if such shares are issued by Holdings to such third party (or an Affiliate thereof) in exchange for cash or consideration other than capital stock and/or assets of such third party (or an Affiliate thereof); (iv) changing the name or fundamental purpose or nature of the business of Holdings; (v) the liquidation, dissolution or winding up of Holdings; and (vi) any amendment to the Certificate of Incorporation or By- Laws of Holdings if such amendment would adversely affect the relative rights, privileges and preferences of the Hoechst Shares with respect to any other Shares or if such amendment would otherwise adversely affect Hoechst's rights, privileges and preferences in Holdings as set forth in the Transaction Documents. 18 11. Affirmative Covenants. --------------------- (a) Financial Information. Holdings covenants and agrees with each --------------------- Stockholder that as long as such Stockholder holds any Common Stock: (i) Quarterly Information. Except for any quarter at the end of which Holdings is a Public Company it shall deliver to each Stockholder as soon as practicable after the end of each of the first three quarterly fiscal periods in each fiscal year of Holdings, and in any event within 45 days thereafter, a copy of (i) an unaudited consolidated balance sheet of Holdings and its subsidiaries as at the end of such quarter, and (ii) unaudited consolidated statements of income, retained earnings and consolidated cash flows of Holdings and its subsidiaries for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter, subject to normal year end audit adjustments. Such statements shall be (i) prepared in accordance with generally accepted accounting principles in the United States of America as in effect from time to time ("GAAP"), consistently applied, (ii) in reasonable ---- detail and (iii) certified by the principal financial or accounting officer of Holdings. (ii) Annual Information. Except following any year at the end of ------------------ which Holdings is a Public Company, it shall deliver to each Stockholder as soon as practicable after the end of each fiscal year of Holdings, and in any event within 90 days thereafter, a copy of (i) an audited consolidated balance sheet of Holdings and its subsidiaries as at the end of such year, and (ii) audited consolidated statements of income, retained earnings and consolidated cash flows of Holdings and its subsidiaries for such year; setting forth in each case in comparative form the figures for the previous year. Such statements shall be (i) prepared in accordance with GAAP, consistently applied, (ii) in reasonable detail and (iii) certified by a firm of independent certified public accountants of recognized national standing selected by Holdings. (iii) Filings. Holdings shall deliver to each Stockholder, ------- promptly upon their becoming available, one copy of each report, notice or proxy statement sent by Holdings to its stockholders generally, and of each regular or periodic report (pursuant to the Securities Exchange Act) and any registration statement, prospectus or written communication (other than transmittal letters) pursuant to the Securities Act of 1933 filed by Holdings with (i) the Securities and Exchange Commission or (ii) any securities exchange on which shares of Common Stock of Holdings are listed. (iv) Additional Information. With reasonable promptness, ---------------------- Holdings shall deliver to (i) one Person designated from time to time by holders of a majority of the Bain Shares (the "Bain Designee") such additional ------------- information and data with respect to Holdings as is reasonably requested by the Bain Designee, (ii) one Person designated from time to time by holders of a majority of the GS Shares (the "GS Designee") such additional information and ----------- data with respect to Holdings as is reasonably requested by the GS Designee and (iii) Hoechst such additional information and data with respect to Holdings as is reasonably requested by Hoechst. 19 12. Investment Banking Services. --------------------------- (a) Rights of Goldman. If at any time prior to December 20, 1999, ----------------- Holdings determines to retain an investment banking firm to perform services in the areas of (i) public corporate offerings or sale of equity securities or (ii) mergers and acquisitions, Holdings agrees to (i) give Goldman a reasonable opportunity to submit a proposal to provide such services, (ii) consider any such proposal submitted by Goldman in good faith, and (iii) subject to paragraph 10(b), to retain Goldman to provide such services; provided that Holdings will have no obligation to retain Goldman pursuant to (iii) hereof if the Board determines in the reasonable exercise of its discretion that the retention of another investment banking firm to render such services would provide a material additional benefit to Holdings (based upon such other firms proposal to Holdings, the terms and conditions of the engagement, relevant experience and expertise, related services and support and all other relevant factors). (b) Rights of Hoechst. Until the date on which Hoechst (and its ----------------- Affiliates) own less than 75% of the Initial Hoechst Shares, Hoechst will have the right to select a Qualified Investment Bank to serve as a co-investment banker and co-manager to co-administer any underwritten public offering of Common Stock for the account of Holdings. A "Qualified Investment Bank" shall mean a nationally-recognized, New York-based investment banking firm with substantial expertise in offerings of the kind contemplated, which firm shall be subject to Holdings's approval, which shall not be unreasonably withheld. 13. Preferred Stock. In the event that the Bain Group purchases any --------------- Preferred Stock pursuant to Section 7 of Part B of Article IV of the Certificate of Incorporation or otherwise, the Bain Group will give written notice of the purchase to the GS Group. Within 30 days after receipt of such written notice, the GS Group may purchase its Pro Rata Portion of such Preferred Stock from B at the same price and on the same terms as B purchased such Preferred Stock. The GS Group's "Pro Rata Portion" shall mean the quotient defined by dividing (a) the number of Stockholder Shares held by the GS Group by (b) the total number of Stockholder Shares collectively held by the Bain Group and the GS Group. Any Preferred Stock acquired by the Bain Group will be deemed to be Bain Shares and any Preferred Stock acquired by the GS Group will be deemed to be GS Shares for purposes of this Agreement. The GS Group hereby agrees that neither it nor its Affiliates will acquire, or make an offer to acquire, any shares of Preferred Stock other than pursuant to this paragraph 13. The GS Group may assign its rights under this paragraph 13 to any of its Affiliates. 14. Termination. Notwithstanding any provisions to the contrary ----------- contained herein, this Agreement will terminate and be of no further force and effect upon consummation of an Approved Sale. 20 15. Legend. Each certificate evidencing Stockholder Shares and each ------ certificate issued in exchange for or upon the transfer of any Stockholder Shares (if such shares remain Stock holder Shares as defined herein after such Transfer) shall be stamped or otherwise imprinted with a legend in substantially the following form: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFERS AND VOTING RESTRICTIONS PURSUANT TO AN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT DATED AS OF OCTOBER 1, 1997, AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND CERTAIN OF THE COMPANY'S STOCKHOLDERS, AS MAY BE AMENDED FROM TIME TO TIME. A COPY OF SUCH STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST." Holdings shall imprint such legend on certificates evidencing Stockholder Shares outstanding prior to the date hereof. The legend set forth above shall be removed from the certificates evidencing any shares which cease to be Stockholder Shares in accordance with paragraph 16 hereof. 16. Definitions. ----------- "Affiliate" shall mean (i) with respect to a Stockholder, any other --------- person, entity or investment fund controlling, controlled by or under common control with the Stockholder and, in the case of a Stockholder which is a partnership, any partner of the Stockholder, (ii) with respect to a Strategic Buyer, any other Person controlling, controlled by, or under common control with such Strategic Buyer and (iii) with respect to Hoechst, a Wholly Owned Subsidiary of Hoechst. "Approved Sale" has the meaning set forth in paragraph 5 hereof. ------------- "Bain Designee" has the meaning set forth in paragraph 11(iv) hereof. ------------- "Bain Holders" has the meaning set forth in paragraph 1 of this ------------ agreement. "Bain Shares" means any Common Stock acquired by the Bain Group (or ----------- its Affiliates) pursuant to the Purchase Agreement or otherwise and any equity securities issued or issuable directly or indirectly with respect to such Common Stock by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares constituting Bain Shares, such shares will cease to be Bain Shares only when they have been (x) effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, or (y) sold to the public pursuant to Rule 144 (or by similar provision then in force) under the Securities Act. 21 "Business Day" means any day that is not a Saturday, a Sunday or any ------------ other day on which banks are required or authorized by law to be closed in the State of New York, the City of New York or the Federal Republic of Germany. "Certificate of Incorporation" means Holdings' certificate of ---------------------------- incorporation in effect at the time as of which any determination is being made. "Cooperation Agreement" has the meaning set forth in the Combination --------------------- Agreement. "Deemed Bain Share" has the meaning set forth in paragraph 4(b)(ii) ----------------- hereof. "Family Group" means a stockholder's spouse and descendants (whether ------------ or not adopted) and any trust solely for the benefit of the Stockholder and/or the Stockholder's spouse and/or descendants. "Goldman" means Goldman, Sachs & Co. ------- "GS Designee" has the meaning set forth in paragraph 11(iv) hereof. ----------- "GS Directors" has the meaning set forth in paragraph 1 hereof. ------------ "GS Holders" has the meaning set forth in paragraph 1 hereof. ---------- "GS Shares" means any Common Stock acquired by the GS Group (or its --------- Affiliates) pursuant to the Purchase Agreement or otherwise and any equity securities issued or issuable directly or indirectly with respect to such Common Stock by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares constituting GS Shares, such shares will cease to be GS Shares only when they have been (x) effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, or (y) sold to the public pursuant to Rule 144 (or by similar provision then in force) under the Securities Act. "Hoechst Directors" has the meaning set forth in paragraph 1 hereof. ----------------- "Hoechst Holder" means the holder of a majority of the Hoechst Shares. -------------- "Hoechst Shares" means any Common Stock acquired by Hoechst (or its -------------- Affiliates) pursuant to the Combination Agreement, upon the exercise of the Warrant or otherwise and any equity securities issued or issuable directly or indirectly with respect to such Common Stock by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular shares constituting Hoechst Shares, such shares will cease to be Hoechst Shares only when they have been (x) effectively registered under the Securities Act and disposed of in accordance with the registration statement 22 covering them or (y) sold to the public pursuant to Rule 144 (or by similar provision then in force) under the Securities Act. "Independent Investment Bank" means, for any transaction, the --------------------------- remaining investment banking firm from the list of the five highest ranking New York-based investment banking firms (other than Goldman (or any successor or Affiliate)), rated by the gross dollar value of underwritten public offerings lead-managed during the preceding four calendar quarter period, after Hoechst and the Investors shall each have alternately eliminated one such firm from such list until only one such firm remains. "Independent Third Party" means any Person who, immediately prior to ----------------------- the contemplated transaction, does not own in excess of 5% of Holdings' Common Stock on a fully-diluted basis (a "5% Owner"), who is not controlling, -------- controlled by or under common control with any such 5% Owner and who is not the spouse or descendent (by birth or adoption) of any such 5% Owner or a trust for the benefit of such 5% Owner and/or such other Persons. "Initial Bain Shares" means the aggregate number of shares of Common ------------------- Stock set forth opposite the Bain Group's names on Schedule III hereto (as adjusted for any subsequent stock splits, stock dividends, combinations of shares and similar recapitalizations). "Initial GS Shares" means the aggregate number of shares of Common ----------------- Stock set forth opposite the GS Group's names on Schedule III hereto (as adjusted for any subsequent stock splits, stock dividends, combinations of shares and similar recapitalizations). "Initial Hoechst Shares" means the aggregate number of shares of ---------------------- Common Stock issued to Hoechst (and its Affiliates) pursuant to the Combination Agreement (excluding any shares of Common acquired upon exercise of the Warrant) (as adjusted for any subsequent stock splits, stock dividends, combinations of shares and similar recapitalizations). "Initial Investor Shares" means the Initial Bain Shares and the ----------------------- Initial GS Shares. "Initial Public Offering" means a public offering and sale of ----------------------- Holdings' common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended, if immediately thereafter Holdings has publicly held common stock listed on a national securities exchange or the NASD automated quotation system. "Investor Holders" has the meaning set forth in paragraph 1(a)(viii) ---------------- hereof. "Investor Shares" means the Bain Shares and the GS Shares. --------------- "Investors" has the meaning set forth in the preamble hereto. --------- 23 "Person" means an individual, a partnership, a corporation, limited ------ liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. "Preferred Stock" has the meaning set forth in the recitals hereto. --------------- "Public Company" means a company (i) which is subject to the reporting -------------- requirements of Section 15(d) of the Securities Exchange Act or (ii) any of whose securities are registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act. "Public Sale" means any sale of Stockholder Shares to the public ----------- pursuant to an offering registered under the Securities Act or to the public pursuant to the provisions of Rule 144 adopted under the Securities Act. "Purchase Agreement" means the Stock Purchase Agreement, dated ------------------ December 20, 1994, by and among the Bain Group, the GS Group and Holdings. "Purchase Option Closing" has the meaning set forth in paragraph 9(b) ----------------------- hereof. "Registration Agreement" has the meaning set forth in the Combination ---------------------- Agreement. "Sale Notice" has the meaning set forth in paragraph 3(b) hereof. ----------- "Securities Act" means the Securities Act of 1933, as amended from -------------- time to time. "Stockholder Shares" means the Hoechst Shares, the Bain Shares and the ------------------ GS Shares. "Strategic Buyer" means any Person or group of Persons other than a --------------- Person or Group acquiring securities for investment purposes only. "Strategic Buyer Transaction" has the meaning set forth in paragraph --------------------------- 9(a) hereof. "Subsidiary" means with respect to any Person, any corporation, ---------- partnership, association or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, a majority of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a partnership, association or other business entity if such Person or Persons shall be allocated a majority of partnership, association or other business entity gains or losses or shall be or control the managing director or general partner of such partnership, association or other business entity. 24 "Transaction Documents" means this Agreement, the Combination --------------------- Agreement, the Registration Agreement and the Warrant. "Wholly Owned Subsidiary" means with respect to any Person, any ----------------------- corporation, partnership, association or other business entity of which (i) if a corporation, 100% of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a partnership, association or other business entity, 100% of the partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have 100% ownership interest in a partnership, association or other business entity if such Person or Persons shall be allocated 100% of partnership, association or other business entity gains or losses or shall be or control the managing director or general partner of such partnership, association or other business entity. "Warrant" has the meaning set forth in the Combination Agreement. ------- 17. Transfers in Violation of Agreement. Any Transfer or attempted ----------------------------------- Transfer of any Stockholder Shares in violation of any provision of this Agreement shall be void, and Holdings shall not record such Transfer on its books or treat any purported transferee of such Stockholder Shares as the owner of such shares for any purpose. 18. Amendment and Waiver. Except as otherwise provided herein, the -------------------- provisions of this Agreement may be amended or waived only upon the prior written consent of Holdings, the Bain Holders, the GS Holders and the Hoechst Holders. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. 19. 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 invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. 20. Entire Agreement. Except as otherwise expressly set forth ---------------- herein, this Agreement, the Combination Agreement and the Registration Agreement embody the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersede and preempt any prior understandings, agreements (including, without limitation, the Old Agreement and the Purchase Agreement) or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. 25 21. Successors and Assigns. Except as otherwise provided herein, ---------------------- this Agreement shall bind and inure to the benefit of and be enforceable by Holdings and its successors and permitted assigns and the Stockholders and any subsequent holders of Stockholder Shares and the respective successors and permitted assigns of each of them, so long as they hold Stockholder Shares. None of the rights specified in paragraph 1 of this Agreement may be assigned. 22. Counterparts. This Agreement may be executed in separate ------------ counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement. 23. Remedies. The parties hereto agree and acknowledge that money -------- damages may not be an adequate remedy for any breach of the provisions of this Agreement and that Holdings and any Stockholder shall have the right to injunctive relief, in addition to all of its rights and remedies at law or in equity, to enforce the provisions of this Agreement. Nothing contained in this Agreement shall be construed to confer upon any Person who is not a signatory hereto any rights or benefits, as a third party beneficiary or otherwise; provided that Goldman is a beneficiary of paragraph 12 of this Agreement with rights to enforce such provision. 24. Notices. All notices, demands and 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 personally delivered, sent by telecopy (with receipt confirmed) on a Business Day during regular business hours of the recipient (or, if not, on the next succeeding Business Day) or two Business Days after sent by reputable overnight express courier (charges prepaid); provided that any notice to a Stockholder who holds GS Shares shall be effective only if notice has been given to the GS Designee and notice to the GS Designee will not be deemed to have been given unless actually delivered in person or by telecopy, courier or mail. 25. Delivery by Facsimile. This Agreement and any signed agreement --------------------- or instrument entered into in connection thereto or contemplated thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine as a defense to the formation of a contract and each such party forever waives any such defense. 26 If to Holdings: Dade Behring Holdings, Inc. 1717 Deerfield Road P.O. Box 778 Deerfield, Illinois 60015-0778 Attention: Chief Executive Officer If to the Bain Group: Bain Capital, Inc. Two Copley Place Boston, Massachusetts 02116 U.S.A. Attention: John Connaughton With a copy to (which shall not constitute notice hereunder): Kirkland & Ellis 200 East Randolph Drive Chicago, Illinois 60601 U.S.A. Attention: Jeffrey C. Hammes If to the GS Group: Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 U.S.A. Attn: Joseph H. Gleberman Neal Moszkowski With a copy to (which shall not constitute notice hereunder): Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10014 U.S.A. Attention: Lee Parks 27 If to Hoechst: Hoechst AG Bruningstrasse 50 D-65929 Frankfurt a. M. Germany Attention: Chairman of the Management Board With a copy to (which shall not constitute notice hereunder): Shearman & Sterling 599 Lexington Avenue New York, New York 10022 U.S.A. Attention: Creighton O'M. Condon 26. Governing Law. THE CORPORATE LAW OF DELAWARE WILL GOVERN ALL ------------- ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS. ALL OTHER ISSUES CONCERNING THIS AGREEMENT 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 PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE COUNTY OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE CO-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY, OVER ANY LAWSUIT UNDER THIS AGREEMENT AND WAIVES ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN. EACH PARTY HERETO HEREBY WAIVES THE NECESSITY FOR PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL (RETURN RECEIPT REQUESTED), WITH A COPY ALSO BEING SENT BY FACSIMILE (WITH RECEIPT CONFIRMED), IN EACH CASE DIRECTED TO SUCH PARTY AT ITS ADDRESS SET FORTH IN, AND WITH COPIES SENT AS REQUIRED BY, PARAGRAPH 24 ABOVE, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED ON THE DATE OF ACTUAL RECEIPT. EACH PARTY HERETO HEREBY CONSENTS TO SERVICE OF PROCESS AS AFORESAID. NOTHING IN THIS PARAGRAPH 26 WILL PROHIBIT PERSONAL SERVICE IN LIEU OF THE SERVICE BY MAIL CONTEMPLATED HEREIN. 28 27. Descriptive Headings. The descriptive headings of this Agreement -------------------- are inserted for convenience only and do not constitute a part of this Agreement. * * * * * 29 IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement on the day and year first above written. DADE BEHRING HOLDINGS, INC. By: /s/ John Connaughton ________________________________ Its: Vice President ________________________________ HOECHST AG By: /s/ Andreas Pollman ________________________________ Its: ________________________________ BAIN CAPITAL FUND IV, L.P. By: Bain Capital Partners IV, L.P. Its: General Partner By: Bain Capital Investors, Inc. Its: General Partner By: /s/ Stephen Pagliuca ________________________________ A Managing Director BAIN CAPITAL FUND IV-B, L.P. By: Bain Capital Partners IV, L.P. Its: General Partner By: Bain Capital Investors, Inc. Its: General Partner By: /s/ Stephen Pagliuca ________________________________ A Managing Director 30 BCIP ASSOCIATES By: /s/ Stephen Pagliuca ________________________________ A General Partner BCIP TRUST ASSOCIATES, L.P. By: /s/ Stephen Pagliuca ________________________________ 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/ K.B. Enquist ________________________________ BRIDGE STREET FUND 1994, L.P. By: Stone Street Funding Corp. Its: Managing General Partner By: /s/ K.B. Enquist ________________________________ 31 STONE STREET FUND 1994, L.P. By: Stone Street Funding Corp. Its: General Partner By: /s/ K.B. Enquist ________________________________ RANDOLPH STREET PARTNERS By: /s/ Jeffrey Hammes ________________________________ A General Partner 32 EX-10.11 5 SECOND AMEND TO AMEND. EXCLUSIVE DISTR. AGRMT EXHIBIT 10.11 Second Amendment to Amended and Restated Exclusive Distribution Agreement This Agreement ("Agreement"), made and entered into as of October 1st, 1997, (to be effective in accordance with Section 13 hereof), by and between ---------- Dade International Inc., a Delaware corporation ("Dade" or "Supplier"), and Allegiance Healthcare Corporation, a Delaware corporation ("Allegiance" or "Distributor"), Witnesseth that: A. Whereas, Dade and Baxter Healthcare Corporation ("Baxter"), are parties to that certain Amended and Restated Exclusive Distribution Agreement dated as of September 15, 1995 (the "Distribution Agreement"), as amended by that certain Amendment to Amended and Restated Exclusive Distribution Agreement executed on and effective as of September 26, 1996 (the "First Amendment" and, together with the Distribution Agreement, the "Amended Distribution Agreement"); and, B. Whereas, Allegiance represents and warrants that it is the assignee of all of the rights, titles and interests of Baxter in, to and under the Amended Distribution Agreement and that it has assumed the liabilities and obligations of Baxter under the Amended Distribution Agreement; and C. Whereas, Dade and Allegiance desire to further amend the Amended Distribution Agreement (without having any effect on the rights and obligations of Baxter); Now, Therefore, in consideration of the premises, the mutual covenants contained herein, the representations of the parties, the benefits expected to be derived hereunder and other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, the parties, intending to be legally bound, agree, subject to the conditions, terms and provisions hereof and notwithstanding any contrary provisions in the Amended Distribution Agreement except as expressly provided herein, as follows: SECTION 1. EXCLUSIVITY. ----------- a. Every reference in the Distribution Agreement and the First Amendment to "Exclusive Territory" is hereby amended to refer to "Territory". b. The opening clause of Section 2(a) of the Distribution Agreement ------------ is hereby amended to read in its entirety as follows: Supplier hereby grants to Distributor the right to sell the Products throughout the Territory, subject to the following conditions and limitations: c. The first phrase of Section 2(a)(1) of the Distribution Agreement --------------- is hereby amended to read in its entirety, as follows: Except as otherwise specifically set forth herein, Supplier will distribute (i) MicroScan, Hemostasis, Paramax and Stratus classes of Products exclusively through Distributor during the Term of this Agreement; and (ii) Total Quality Control ("TQC" or "Dade Controls") class of Products exclusively through Distributor through December 31, 1998 or the date of release of new technology for TQC (such technology is defined as true liquid controls), whichever is earlier, and thereafter during the Term of this Agreement on a non-exclusive basis; Supplier will distribute the CVDI, Dade Lablink, Dade Immunohematology, and Other Dade classes of Products non-exclusively through Distributor during the Term of this Agreement; [Section 2(a)(1) then continues: "provided, however, that nothing in -------- ------- this Agreement shall prohibit Supplier from:..."] d. Section 1(a),(b) and (c) of the First Amendment are deleted. -2- SECTION 2. PRODUCTS AND GROSS PROFIT MARGIN. -------------------------------- a. The following definitions are hereby added to Section 1 of the --------- Distribution Agreement: "CVDI" means Cardiovascular Diagnostics, Inc. products. "Other Dade" means the following types of Products which are not included in the other classes of Products listed herein: SMI, Tek Pro, Immufuge, DAC, Dade stains and Dade Immu-sal. b. Paragraph I of Exhibit A of the Distribution Agreement is hereby --------- amended to read in its entirety as indicated on Exhibit A which is attached --------- hereto and incorporated herein by this reference. c. Section 3 of the First Amendment is hereby deleted in its --------- entirety. SECTION 3. BVP STATUS. ---------- a. The following paragraphs shall be added to the Distribution Agreement as Recitals 9 and 10: 9. Distributor has developed a strategic program called the "Best Value Program" which enhances Distributor's position as a cost management company. Distributor's intent is to work with customers to provide a broad product offering while helping its customers make the best possible product choices to maximize their supply budget dollars. This broad product offering will contain, among other products, "Best Value Products." Best Value Products are a select offering of products designated by Distributor from time to time which are distributed and/or manufactured by Distributor and which, in Distributor's determination, perform consistently, offer the best value for the price and provide good efficiencies throughout the supply chain. Distributor's intent is to encourage customer conversion to Distributor's portfolio of Best Value Products. The Best Value Program -3- includes the provision of sales incentives to Distributor's sales force. 10. Supplier desires to have certain of its Products (as identified in Section 5(l) included in the Best Value Program (or any ------------- substitute program) and Distributor will include such Products in the Best Value Program (or any substitute program) whether or not such Products qualify as Best Value Products or qualify under any such substitute program, subject to the terms and conditions of this Agreement. b. The following definitions are hereby added to Section 1 of the --------- Distribution Agreement: "Best Value Products" and "Best Value Program" shall have the respective meanings set forth in Recital 9 above. c. Section 5(l) of the Distribution Agreement is hereby amended to ------------ read in its entirety as follows: Distributor represents that its current and most favorable incentive compensation program is the Best Value Program. Regardless of whether or not Supplier or the Products meet the definition of Best Value Products, Distributor shall promote (i) the Hemostasis, MicroScan and TQC classes of Products as Best Value Products during the Term of this Agreement; (ii) the Paramax class of Products as Best Value Products through June 30, 1998; and (iii) the Stratus class of Products as Best Value Products through December 31, 1997. In the event Distributor creates a new promotion or incentive program in addition to or in substitution of its Best Value Program, such Products shall be granted the most favorable treatment under such new promotion or incentive program, regardless of whether Supplier or such Products meet the criteria for such treatment, for the time periods set forth above. In the event that Distributor generally discontinues its incentive compensation programs, Distributor agrees to offer an incentive compensation program -4- featuring such Products for the time periods set forth above. d. Section 5(e) of the Distribution Agreement is hereby superseded, ------------ to the extent that it requires Distributor (i) to advertise, promote or distribute any Products to any greater extent than called for under Distributor's generally applicable Best Value Program (or more favorable or substitute program), or (ii) to advertise, or promote any Products not included in the Best Value Program pursuant to Section 5(l) of the Distribution Agreement ------------ as if they were Best Value Products; provided, however, that Section 5(e)(1) through (6),(8),(9), and (14) continue to apply to all Products, Section 5(e)(11) and (13) continue to apply with respect to Products identified in Section 5(l) of the Distribution Agreement for the periods stated therein; Section 5(e)(10) is deleted; Section 5(e)(7) is amended to read as stated in Section 10 of this Agreement; and Section 5(e)(12) is amended to read as stated in Section 8 of this Agreement. Sections 4(a),(b),(c),(e),(f) and subsection (1) of Section 4(d) of the First Amendment are hereby deleted. Sections 4(d) (except for its subsection (1)) is deleted with respect to each of the Paramax and Stratus classes of Products as of the dates that such Paramax or Stratus class of Products, as the case may be, are no longer promoted as Best Value Products. SECTION 4. ALLEGIANCE NOT-TO-COMPETE. ------------------------- a. Section 2(b)(1)(i) of the Distribution Agreement is hereby ------------------ amended to read in its entirety as follows: (i) manufacture, sell, lease, solicit orders for or otherwise distribute in the Territory any product that is competitive with any Product in any of the MicroScan, Hemostasis (other than CVDI), or TQC classes of Products while Supplier is distributing any such Products exclusively through Distributor pursuant to Section 2(a)(1) of this --------------- Agreement; or b. Section 2(b)(1)(ii) of the Distribution Agreement is hereby ------------------- amended to read in its entirety as follows: -5- (ii) operate, manage, advise, or otherwise assist in any manner (in each case, either alone or in association with any other person) in the manufacture, leasing or sale within the Territory of products that are competitive with any Product in any of the MicroScan, Hemostasis (other than CVDI), or TQC classes of Products while Supplier is distributing any such Products exclusively through Distributor pursuant to Section 2(a)(1) of this Agreement. --------------- c. The last sentence of Section 2(b)(1) of the Distribution --------------- Agreement is hereby amended to read in its entirety as follows: For the purposes of this Agreement, the Valuelink program shall be understood to be the Valuelink(R) service and any similar program administered by Distributor under a separate service contract which provides a broad range of medical/surgical and laboratory products utilizing just-in-time deliveries in low-unit-of-measure quantities. d. The following is hereby added to the end of Section 2(b)(1) of --------------- the Distribution Agreement: Notwithstanding any other provision of this Agreement, with respect to the Products referred to in this Section 2(b)(1), Distributor may, upon at least thirty days prior written notice to Dade, sell, lease, solicit orders for or otherwise distribute other suppliers' competitive products to a customer which purchases Products in excess of $1,000,000 from Distributor on an annualized basis when that customer so requires such competitive product and that customer refuses to purchase the Product competing therewith. Subsequently, Distributor will use its reasonable efforts to convert such business to Supplier's comparable Best Value Products (or Supplier's comparable Products promoted under any substitute program). At Supplier's request from time to time, Distributor will advise Supplier of the name of any customer to which -6- it sells competitive products pursuant to this Section and will identify the class of Products with which such competitive products compete. e. Section 2(d)(iv) of the Distribution Agreement is hereby amended ---------------- to read in its entirety as follows: (iv) Distributor or its Affiliates from selling, leasing, soliciting orders for or otherwise distributing anywhere in the world products that are not competitive with any Products; or f. Section 2(d)(v) of the Distribution Agreement is hereby amended --------------- to read in its entirety as follows: (v) Distributor or its Affiliates from selling, leasing, soliciting orders for or otherwise distributing outside the Territory products that are competitive with the Products, except as may otherwise be provided in the Purchase Agreement. g. Sections 2(e) and 2(f) of the Distribution Agreement are hereby ---------------------- amended to read in their entirety, as follows: "This Section intentionally omitted." SECTION 5. PRODUCT DELETION. The second, third and fourth sentences of ---------------- Section 2(c) of the Distribution Agreement are hereby amended to read as - ------------ follows: Notwithstanding the foregoing, Supplier may, upon giving at least thirty (30) days written notice, generally discontinue the sale of any Product in the Territory; after the completion of the active promotion and sale of such Products, such Products shall be automatically deleted from Exhibit A and this Agreement. Supplier shall consult with Distributor in connection with the selection or development of a substitute for any Product which is to be generally discontinued. At Distributor's option, Supplier will purchase from Distributor and Distributor will sell to Supplier in -7- accordance with Section 9(c) Distributor's inventory of such discontinued Products which become slow moving, obsolete or expired solely because of such discontinuance by Supplier. Supplier may sell such discontinued Products as if they were not Products hereunder. Notwithstanding anything to the contrary in this Agreement, if at any time (and upon each such event, if any) Supplier discontinues selling any Products which accounted for more than thirty percent of Distributor's total revenue during the prior calendar year in such Products' class and if such class of Products is not or has not been supplemented with Products of substantially similar revenue generating capacity, Distributor may, following such discontinuance, (i) sell, lease or otherwise distribute products competitive with such class of Products and (ii) exclude such class of Products from its Best Value Program; provided, however, that within ninety (90) days after receipt -------- ------- of such written notice of discontinuance, Distributor shall provide Supplier with written notice of its intent to take any or all of the actions referred to in clauses (i) or (ii) above; and provided further, that Distributor will give Supplier at least ninety (90) days written notice prior to actually carrying out any or all of the actions referred to in clauses (i) or (ii) above. The two ninety (90) day notice periods in the preceding sentence may, but need not, overlap. Supplier may, at any time after receiving the second notice from Distributor referred to above that Distributor will distribute such competitive products, and after providing at least ninety days prior written notice to Distributor, directly sell to customers the Products in the class of Products from which the deleted Products were deleted. SECTION 6. ORDER ALIGNMENT. The following is hereby added as Section --------------- ------- 2(i) of the Distribution Agreement: - ---- -8- The ordering of Products under this Agreement will be aligned with customer demand and customer QAP and Single Lot reserve requirements. Supplier and Distributor will establish a working group to study opportunities to reduce inventories and implement agreed upon reduction, provided, however that nothing herein shall entitle -------- ------- Distributor to reduce customer service levels. Supplier and Distributor shall use their best efforts to increase intercompany planning in order to more closely align such ordering with customer demand and, subject to Section 8(d), will work together to reduce levels to reflect increased supply chain efficiencies while maintaining service levels. Distributor will use its reasonable efforts to support the achievement of Supplier's balance of year 1997 forecast. SECTION 7. QUARTERLY FEE. The quarterly $300,000 fee payable by ------------- Distributor to Supplier with regard to immunology/ serology/parasitology products will cease after the payment for the fourth quarter of 1997 which is payable on or prior to October 15, 1997 and, upon such payment, Section 5(s) of ------------ the Distribution Agreement regarding such payments is amended to read in its entirety, as follows: "This Section intentionally omitted." SECTION 8. LEASING. ------- a. Leasing will be provided by Distributor in accordance with Exhibit C hereto, the provisions of which are incorporated herein by this - --------- reference. Such provisions may not be amended or modified without the written consent of both parties. b. Section 5(e)(12) of the Amended Distribution Agreement is hereby amended to read in its entirety as follows: Distributor shall include the Instruments in the Lease Program described in Exhibit C to the Second Amendment to this Agreement (except as otherwise provided therein); provided that Distributor may assign any such customer leases to a third party leasing company. -9- c. The last sentence of Section 9(b) of the Distribution Agreement is amended to read in its entirety as follows: Supplier shall continue to sell Products to Distributor, pursuant to the Lease Program described in Exhibit C to the Second Amendment, the terms of this Agreement with respect to guaranteed margin, transportation charges and payment, and with respect to prices in accordance with the terms of this Agreement and agreements with customers, to enable Distributor to supply Products under all such agreements with customers which are not purchased by or assigned to Supplier, until such time as Distributor has collected its full receivables from such agreements, without adjustment under the immediately preceding sentence of this Section 9(b). SECTION 9. OTHER PRODUCTS. In the event of an acquisition by Supplier or -------------- any of its affiliates of all or any portion of a business that includes products which would otherwise be considered Products under the Amended Distribution Agreement ("Acquired Products"), such Acquired Products, together with line extensions and other subsequent products based upon technology held by the acquired business, shall not be considered to be Products under the Amended Distribution Agreement for any purpose at any time. The parties shall negotiate in good faith regarding the distribution by Allegiance of the former DuPont, Syva, Behring and other New Products if and as they become available to Dade. Unless and until otherwise agreed, these products are not Products. Section ------- 6(c) and Section 9 of the First Amendment are hereby deleted. - ---- --------- SECTION 10. SERVICE CONTRACTS. Section 5(e)(7) is amended to read in its ----------------- entirety as follows: Distributor shall be authorized to enter into service contracts for Instruments as agent for Supplier utilizing only the standard form of contract approved by Supplier and at no less than eighty percent (80%) of the list price established by Supplier therefor, unless another form or price is approved in advance and in writing by Supplier. Supplier shall assume the credit risk on all such contracts and shall -10- be responsible for any collection efforts on overdue accounts. SECTION 11. OTHER CHANGES. ------------- a. Section 4(b)(7) of the Distribution Agreement is hereby amended --------------- to read in its entirety as follows: (7) As long as MLA's price to Supplier for MLA disposables is higher than list price multiplied by .85, Distributor will continue to distribute MLA disposables and will receive from Supplier a guaranteed gross profit margin of 7.1 percent. b. Section 5(p) of the Distribution Agreement is hereby amended to ------------ read in its entirety, as follows: "This Section intentionally omitted." SECTION 12. INTENTIONALLY LEFT BLANK. SECTION 13. EFFECTIVE DATE. The provisions of this Second Amendment shall -------------- become effective on October 1, 1997 (the "Effective Date"). SECTION 14. TERM AND TERMINATION. -------------------- a. The first sentence of Section 3 of the Distribution Agreement --------- shall be amended to read in its entirety as follows: The term of this Agreement shall begin on the date of this Agreement and end on December 31, 2000, unless sooner terminated as provided herein, the First Amendment and/or the Second Amendment. b. Section 8(c) of the Distribution Agreement shall be amended to ------------ read in its entirety as follows: (c) Supplier may, from time to time with respect to any one or more classes of Products, terminate this Agreement upon at least six months prior written notice, if the -11- business or substantially all of the assets relating to such class or classes of Products are sold or in any manner divested or transferred in a bona fide transaction and the buyer elects not to distribute such class or classes of Products through Distributor. Notwithstanding the foregoing, Supplier shall not be permitted to terminate this Agreement as provided above in connection with a sale, transfer or divestiture the purpose of which is to avoid the continued application of this Agreement to the business or assets being sold, transferred or divested. Without limiting the generality of the immediately preceding sentence, the parties agree that any such sale of a business or assets to an entity the equity ownership of which is the same or substantially the same as the equity ownership of Purchaser at the time will be deemed to be for avoidance purposes. Notwithstanding anything to the contrary in this Agreement, in the event that the date of such sale, transfer or divestiture occurs prior to the expiration of such six (6) month notice period, Distributor agrees if requested by Supplier to waive its exclusive rights to distribute the classes of Products identified in Section 2(a)(1), provided that Supplier agrees in writing in a form reasonably satisfactory to Distributor to compensate Distributor for any shortfall in gross profit resulting from such waiver of exclusivity for the unexpired portion of such six (6) month notice period. Any such compensation shall be based on the profitability of the affected Products during the six (6) month period immediately preceding such sale, transfer or divestiture. Notwithstanding the waiver of exclusivity referred to above, Distributor shall continue to have the right to distribute such Products on a non-exclusive basis under the otherwise applicable terms and conditions of this Agreement for the unexpired term of the six (6) month notice period. Distributor agrees to cooperate in commercially reasonable ways with such a buyer during such six (6) month notice period to accommodate buyer's -12- distribution arrangements so that customers are not unduly affected. Any such terminated class of Products shall cease to be "Products" within the meaning of this Agreement. A buyer's other products are not Products hereunder. c. Section 8(d) of the Distribution Agreement is amended to read in ------------ its entirety as follows: (d) Supplier shall prepare an annual end user Sales Plan presenting data on a quarterly basis considering past trends and an analysis of upside and downside potentials. Such Sales Plan shall include significant actions/deliverables required of both Supplier and Distributor for purposes of this Section only. Such Sales Plan shall not include sales of OEM products by Supplier but will include all other Product sales (both through Distributor and directly by Supplier) in the Territory. Distributor and Supplier shall prepare an annual DIOH Plan presenting data on a quarterly basis considering the Sales Plan, and an analysis of past trends and planned process changes agreed upon by both parties. Exhibit B reflects guidelines for DIOH Plans. Annually, the parties shall meet to review and discuss the Sales and DIOH Plans (collectively "The Plan") for that year . The parties shall discuss the concerns that Distributor may have in connection with such Sales Plan. To the extent any such concerns are not resolved, Distributor shall advise Supplier in detail and in writing, and Distributor shall, without regard to such concerns, work with Supplier to achieve such Sales Plan. Thereafter the parties shall meet quarterly and annually to review performance under the Sales Plan. In reviewing performance, Supplier shall consider whether or not the Sales Plan was met for such period and if the -13- Sales Plan was not met, whether the failure to meet the Sales Plan resulted from Supplier's failure to perform with respect to actions or deliverables identified in such Sales Plan. In the event that the failure to meet the Sales Plan was in whole, or in part, a result of Suppliers failure to perform under such Sales Plan, then Supplier shall adjust the Sales Plan ("Adjusted Sales Plan") proportionately, crediting the sales amounts associated with Supplier's failure under such Sales Plan back to the Distributor. Either party may, from time to time after December 31, 1998, with respect to any one or more classes of Products, terminate this Agreement upon at least nine months prior written notice to the other party given only within forty-five (45) days after July 1, October 1, and January 1 of each year during the Term, if year-to-date end user sales of Products in any of the Hemostasis, MicroScan or TQC classes of Products are below comparable year-to-date figures in Supplier's Sales Plans or Adjusted Plan, if one exists, for such sales or if Distributor's actual DIOH for the end of the quarter for Products in such classes is below the DIOH Plan for such period. Additionally, to the extent Distributor's written concerns have not been withdrawn, and where actual sales performance under the Sales Plan is less than that planned, Supplier will assess Distributor's concerns raised by Distributor in writing and performance in achieving planned sales. If, in Supplier's sole opinion, Distributor's performance was not part of the reason for any failure to achieve planned sales, Supplier will not terminate the Distribution Agreement pursuant to this Section with respect to the class or classes or Products for which the Plan was not achieved. d. Section 8(e) of the Distribution Agreement is amended to read in ------------ its entirety as follows: -14- (e) Any notice given under this Section shall specifically identify the paragraph under which the termination right is being exercised, and, where applicable, the class or classes of Products that are subject to termination. e. The third sentence of Section 9(a) of the Distribution Agreement ------------ is amended to delete the phrase, "at the end of any non-exclusive period referred to in either Section 2(e) or Section 2(f)," and to substitute therefor, "at the effective date of any expiration or termination." f. Section 9(d) of the Distribution Agreement shall be amended to ------------ read in its entirety as follows: If any notice of termination is given pursuant to Section 8, then --------- during the period beginning on the date of the notice and ending on the date of termination (i) Distributor may take any action it deems appropriate in order to arrange to distribute (after such termination) products competitive with the Products affected by such termination; (ii) Supplier may take any action it deems appropriate in order to arrange an alternative distribution method for Products affected by such termination (also to be effective following such termination); (iii) Distributor may not enter into any supply agreement with customers for the sale of the Products affected by such termination to be delivered after the termination without the agreement of Supplier (provided, however, that, subject to Section 9(c), Distributor may --------- ------- ------------ sell Products after such termination to which it has taken title or which remain in its inventory on the date of termination); and (iv) Supplier shall not change Distributor's initial invoice prices or guaranteed gross profit margins for the Products affected by such termination, provided, that Distributor implements national management -------- of customer pricing during this period to ensure compliance with Distributor's pricing guidelines in effect -15- immediately prior to the date of the notice of termination. If, during the period beginning on the date of the notice and ending on the date of termination, Distributor does change customer pricing other than as permitted under its pricing guidelines and such change results in a lower net price from Supplier to Distributor by operation of the guaranteed gross profit margin, then, on a customer by customer basis, Distributor's guaranteed gross profit margin shall be reduced by the percentage necessary (up to the elimination of the guaranteed gross profit margin) to increase the net price from Supplier to Distributor to an amount equal to the net price Supplier would have received had Distributor followed its pricing guidelines, provided, -------- that at the request of Distributor, Supplier may in its sole discretion "except" Distributor's price changes to customers and extend the guaranteed gross profit margin to sales that do not follow the pricing guidelines. Alternatively, in the event that Distributor's customer pricing on a class of Products basis, measured by the average selling price of Products in any such class during the three month period immediately prior to the date of the notice of termination, declines by 2% or more for 2 consecutive months or by 3% or more for one month, Supplier, in its sole discretion and considering the effect on average selling prices of product mix, free goods and credits, may elect to eliminate the guaranteed gross profit margin methodology and invoice Distributor thereafter for the Products affected by the termination (including Products then held by Distributor in inventory but not sold) in an amount that reduces Distributor's guaranteed gross profit margin percentage necessary (up to the elimination of the guaranteed gross profit margin) to increase the net price from Supplier to Distributor to an amount equal to -16- the net price Supplier would have received had Distributor followed its pricing guidelines. Upon such election by Supplier, Distributor agrees to take no action on a national basis to significantly change its field sales representative incentive programs. In the event Supplier is permitted to and does make the election mentioned in the immediately preceding paragraph, Supplier shall settle up with Distributor for the amount, if any, ("One Time Inventory True-Up Amount") to adjust the initial invoice price (taking into account any advanced rebate allowance) from Supplier to Distributor to an amount equal to the net price Supplier would have received had Distributor followed its pricing guidelines. After the effective date of expiration or termination of this Agreement, nothing in this Agreement shall restrict Supplier's right to sell or otherwise dispose of the Products or Distributor's right to sell or otherwise dispose of competing products within the Territory. g. Sections 7 and 8(d) of the First Amendment are hereby deleted in ------------------- their entirety. h. The following provision is added immediately before the last sentence of Section 9(c) of the Distribution Agreement: ------------ At any time after the expiration of this Agreement in its entirety or after the effective date of termination with respect to any terminated Products, upon written request from Supplier, Distributor will sell to Supplier for cash Distributor's entire inventory of any class or classes of Products identified in Supplier's request and that is (i) not required to fulfill customer contracts referred to in Sections -------- 9(a) or 9(b) and (ii) in which Distributor has good and marketable ------------ title free of all liens and encumbrances. In determining Distributor's -17- entire inventory of any class or classes of Products for purposes of the preceding sentence, Products that are obsolete, have less than 90 days remaining self life, are not in good resalable condition, or are not in their original packaging shall be included. The purchase price of such inventory shall be equal to the net book value of the Products. i. Section 8(b) and the last sentence of Section 14 of the ------------ ---------- Distribution Agreement are deleted. SECTION 16. DEFINED TERMS. Terms not defined but used herein which are ------------- defined in the Amended Distribution Agreement have the meaning ascribed to such terms therein. SECTION 17. ENTIRE AGREEMENT. This Agreement together with the ---------------- Distribution Agreement, the First Amendment, the IT Agreement dated as of October 1, 1997, the Columbia/HCA September 25, 1996, letter agreement, the 1997 - Stratus 24-month lease letter and the December 6, 1996, side letter concerning Burdick and Jackson, Inc. constitute the entire agreement between the parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. Without limiting the generality of the foregoing, this Agreement supersedes any agreement that may exist between the parties with respect to the distribution of CVDI products. SECTION 18. BAXTER. Nothing in this Agreement shall imply that Baxter is ------ or is not relieved of its obligations under the Amended Distribution Agreement as a result of its assignment and assumption agreement with Allegiance or as a result of this Second Amendment. SECTION 19. GOVERNING LAW. This Agreement shall be governed by and ------------- construed and enforced in accordance with the laws of the State of Illinois applicable to contracts made and to be performed in that state and the federal laws of the United States of America applicable therein. Any lawsuit arising from or related to this Agreement shall be brought before the United States District Court for the -18- Northern District of Illinois or an Illinois state court sitting in Lake County, Illinois, or Cook County, Illinois. The parties hereby consent to the jurisdiction of such courts. SECTION 20. HEADINGS. The headings used in this Agreement have been -------- inserted for convenience of reference only and do not define or limit the provisions hereof. SECTION 21. COUNTERPARTS. For the convenience of the parties hereto, this ------------ Agreement may be executed in one or more counterparts, each of which shall be deemed an original for all purposes, but all of which together shall constitute one and the same instrument. SECTION 22. NOTICES. Notices to Distributor shall be addressed as ------- follows: Allegiance Healthcare Corporation 1430 Waukegan Road, Karl Bays Building McGaw Park, IL 60085 ATTN: William Feather Senior Vice President and General Counsel FAX: 847-578-4448 with a copy to: Marie Biskup Vice President, Marketing SP Laboratory Business Allegiance Healthcare Corporation 1450 Waukegan Road, Brien Laing Building McGaw Park, IL 60085 FAX: 847-689-5080 [This space intentionally left blank.] -19- SECTION 23. CONFIRMATION. Except as expressly provided herein, the ------------ provisions of the Amended Distribution Agreement remain in effect. In Witness Whereof, the parties have caused their respective duly authorized representatives to execute and deliver this Agreement as of the date first above written. Dade International Inc. By: /s/ Scott T. Garrett ------------------------------------- as its Authorized Representative Allegiance Healthcare Corporation By: /s/ Anthony K. Kesman ------------------------------------- as its Authorized Representative -20- EX-10.18 6 COOPERATION AND COLLABORATION AGREEMENT EXHIBIT 10.18 COOPERATION AND COLLABORATION AGREEMENT THIS COOPERATION AND COLLABORATION AGREEMENT is made and entered into by and between Dade Behring Holdings, Inc., a Delaware corporation, and Hoechst AG, a German corporation. WHEREAS, pursuant to the Combination Agreement (as defined below), Hoechst AG has transferred its diagnostics business to Diagnostic Holdings, Inc. in exchange for an equity interest in Diagnostic Holdings, Inc.; WHEREAS, following consummation of such combination, Diagnostic Holdings, Inc. has changed its name to Dade Behring Holdings, Inc.; WHEREAS, in connection with the combination of Hoechst AG's diagnostics business with and into the business of Dade Behring Holdings, Inc., Hoechst AG and Dade Behring Holdings, Inc. have agreed to set forth a set of basic principles to govern their future discussions concerning strategies and potential projects for cooperation and collaboration in the areas more fully described below; and WHEREAS, Dade Behring Holdings, Inc. and Hoechst AG acknowledge that any such close cooperation and collaboration is intended to ensure a smooth transition period for the combination of the two business units and to create synergy effects for the mutual benefit of the parties, which constitutes an essential element in particular for Hoechst AG to enter into said combination. NOW, THEREFORE, the parties hereby agree as follows: COOPERATION AGREEMENT 2 1 DEFINITIONS The following terms when used herein with initial capital letters shall have the respective meanings set forth below. 1.1 Areas of Collaboration. The term "Areas of Collaboration" shall mean ---------------------- access to existing technology, research and development of new technology, manufacturing and marketing of products, all with applicability to both the Life Science Field and the Diagnostic Field as further described in clause 2.1. 1.2 Combination Agreement. The term "Combination Agreement" shall refer to --------------------- the Agreement and Plan of Combination dated June 24, 1997 between Hoechst and DBI. 1.3 Confidential Information. The term "Confidential Information" shall ------------------------ mean any and all tangible and intangible information of either party, whether oral or in writing or in any other medium, relating to the management, operations, finances, products and technology of the disclosing party, including, without limitation, any and all trade secrets, inventions, know-how, designs, formulations, ingredients, samples, processes, machines, processing and control information, product performance dates, manuals, supplier lists, consumer lists, purchase and sales records, marketing information and computer programs in each case whether developed by the disclosing party or furnished to the disclosing party by other parties. 1.4 Cooperation Agreement. The term "Cooperation Agreement" shall refer to --------------------- this agreement. 1.5 Diagnostics Field. The term "Diagnostics Field" shall mean the ----------------- research, development, manufacture, marketing, sale, distribution and service of human in vitro diagnostic equipment, reagents, consumable supplies and services. COOPERATION AGREEMENT 3 1.6 DBI. The term "DBI" shall mean Dade Behring Holdings, Inc. (formerly --- known as Diagnostic Holdings, Inc.) and any subsidiaries of DBI in which it holds direct or indirect beneficial ownership of more than 50% of the voting stock. 1.7 Effective Date. The term "Effective Date" shall mean the date of the -------------- closing of the transactions contemplated by the Combination Agreement. 1.8 Hoechst. The term "Hoechst" shall mean Hoechst AG and any subsidiaries ------- of Hoechst in which it holds direct or indirect beneficial ownership of more than 50% of the voting stock. 1.9 Life Sciences Field. The term "Life Sciences Field" shall mean the ------------------- research, development, manufacture, marketing, sale, distribution and service of pharmaceuticals, agricultural products and veterinary medical products. 1.10 Specific Collaboration Agreement. The term "Specific Collaboration -------------------------------- Agreement" shall mean an agreement setting forth terms and conditions agreed to by the parties under which they shall pursue projects in the Areas of Collaboration that have been approved by the Steering Committee. 1.11 Steering Committee. The term "Steering Committee" shall mean a ------------------ committee composed of an equal number of representatives appointed by each of the parties that shall meet with a view to implement projects in the Areas of Collaboration. 2 SCOPE OF COLLABORATION 2.1 In General. The parties regard each other as principal collaborators ---------- such as that DBI shall be Hoechst's principal collaborator in the Diagnostic Field and Hoechst shall be DBI's principal collaborator in COOPERATION AGREEMENT 4 the Life Sciences Field. The parties shall cooperate in good faith to identify and discuss potential projects within the Areas of Collaboration whereby both parties may benefit from a collaborative effort. 2.2 Areas of Consideration. The parties are in agreement that the areas to ---------------------- be considered for collaboration include: 2.2.1 the development of new technology including but not limited to areas of: (i) specific diseases, such as cardiovascular diseases, oncology, osteoporosis, infections, rheumatics, allergies and Alzheimer's disease; (ii) bioinformatics (i.e., ---- information received through genome sequencing); and (iii) clinical trials (e.g., the development of tests for drug ---- monitoring and in the field of pharmacokinetics; acquisition of clinical utility information on DBI products with DBI bearing any associated incremental costs); 2.2.2 marketing collaboration including, but not limited to, the areas of: (i) disease management, e.g., in the areas of cardiovascular ---- diseases, rheumatoid arthritis and diseases of CNS; (ii) the production of brochures, information and advertising materials; (iii) the sponsoring of congresses and opinion leaders; (iv) the coordination of visits of clinics and presentation to the public; and 2.2.3 collaboration in the field of "managed care". 2.3 Existing Collaborations. To the extent there is not a formal ----------------------- collaboration agreement already in place, any collaboration efforts begun prior to the Effective Date between Hoechst and the diagnostics business of Hoechst (which has now been transferred to DBI pursuant to the Combination Agreement) shall be governed by the terms of Specific Collaboration Agreements which are to be negotiated in good COOPERATION AGREEMENT 5 faith between Hoechst and DBI as soon as practical after the Effective Date. Nothing in this Collaboration Agreement shall be construed such as that it will interfere with existing agreements or negotiations with any third party. 2.4 New Collaborations. This Cooperation Agreement shall not in any way ------------------ prohibit either party from collaborating or cooperating with any third party, or from undertaking projects on its own, in any area of endeavor, including but not limited to the Areas of Collaboration; provided, however, that each party shall treat the other as its -------- ------- principal collaborator as set forth in clause 2.1 and consistent therewith shall first offer the other party the opportunity to enter into any collaboration contemplated by such party in the Areas of Collaboration prior to entering into a comparable arrangement with any third party unless such party has a good faith business justification ------ for choosing not to collaborate with the other party on a particular project. In any event, the parties will use good faith efforts to inform each other prior to entering into detailed discussions with third parties about the intent to collaborate or cooperate within the Areas of Collaboration it being the intention that both parties should be free of outside constraints when evaluating the benefit of entering into a joint collaboration or cooperation. Notwithstanding anything in this Cooperation Agreement to the contrary, it is understood and agreed between the parties that nothing in this Cooperation Agreement shall prevent (i) DBI from entering into collaborations or other arrangements with third party pharmaceutical companies in connection with antimicrobial susceptibility testing associated with antimicrobial therapy or (ii) Hoechst from entering into collaborations or other arrangements with third party companies in connection with decentralized near-patient point of care testing and direct pharmaceutical therapy, provided that such third party companies COOPERATION AGREEMENT 6 are not in competition with the business of DBI as it exists as of the date hereof. 2.5 Steering Committee. ------------------ 2.5.1 The parties shall form a Steering Committee that will meet on a regular basis during the term of this Cooperation Agreement to present ideas, exchange information, identify potential collaboration projects and ultimately decide about joint projects subject to each party's formal approval. The Steering Committee shall agree upon the timing and location of its meetings. The Chairman of the Strategy Committee of DBI shall serve as the Chairman of the Steering Committee. On the Effective Date, the Chairman of the Steering Committee shall be Uwe Bicker. The Steering Committee members shall be executives of the respective parties that possess the technical knowledge and skill applicable to the Areas of Collaboration. 2.5.2 Should the Steering Committee unanimously agree to pursue a project within the Areas of Collaboration, it shall appoint the appropriate personnel to determine the specific structure, terms, conditions and other relevant details for a Specific Collaboration Agreement that shall govern such project. The Steering Committee shall oversee and coordinate the implementation of the projects. Any differences at the working level shall be discussed by the Steering Committee with the endeavor to amicably settle such difference. 2.6 Procedures. If at any time either DBI or Hoechst desires to pursue a ---------- collaboration project within the Area of Collaboration, then the relevant company shall deliver a written notice to the Chairman of the Steering Committee describing such proposed project or activity in reasonable detail. The Chairman of the Steering Committee will distribute such proposal to the other members of the Steering Committee and to the COOPERATION AGREEMENT 7 addressed company. The parties will discuss any such proposals within the next Steering Committee meeting or thereafter, if reasonable, and decide whether to pursue such proposal. 2.7 Specific Collaboration Agreements. To the extent appropriate Specific --------------------------------- Collaboration Agreements shall include terms that address the following: (a) project objectives and overview; (b) project approach and organization; (c) responsibilities and contributions of each of the parties; (d) scheduling, milestones and work plans; (e) protection and maintenance of jointly-developed intellectual and industrial property rights; (f) estimated fees and expenses; (g) responsibility for and documentation of costs, fees and expenses; (h) cross-licensing and sub-licensing arrangements; (i) confidentiality provisions; (j) termination rules (including survival after termination of this Cooperation Agreement); (k) any terms different from those set forth in this Collaboration Agreement that shall govern that project; and (l) any other relevant terms. COOPERATION AGREEMENT 8 2.8 Jointly-Developed Inventions. Hoechst shall grant to DBI in the ---------------------------- Diagnostics Field, and DBI shall grant to Hoechst in the Life Sciences Field, a license to practice inventions developed jointly by the parties pursuant to a collaboration. The terms and conditions of such licenses, as well as licenses of such jointly developed technology in areas outside the Diagnostics and Life Sciences Fields, including but not limited to royalty rates, territory and exclusivity, shall be negotiated in good faith between the parties and, if agreed to prior to the commencement of a collaboration, shall be set forth in the applicable Specific Collaboration Agreement. In recognition of the parties choosing each other as their principal collaborator, the terms of such licenses shall contain "most favored licensee" provisions such that in the event the licensing party subsequently grants a third party a license to the same technology on terms and conditions that, taken in their entirety, are more favorable than those granted to the other party hereto, the other party hereto shall receive the benefit of such more favorable terms, provided that such party also accepts all other terms and conditions included in the third party license agreement. 2.9 Ownership of Inventions. Nothing herein shall be construed to restrict ----------------------- either party's ownership of or ability to use and otherwise exploit inventions and intellectual property developed solely by that party. If such invention or intellectual property is developed pursuant to a Specific Collaboration Agreement, the exploitation of such invention or intellectual property is subject to the terms of such agreement. 2.10 Intellectual Property. Nothing in this Cooperation Agreement shall be --------------------- construed to grant or convey to either party any title or right to any intellectual or industrial property rights, including but not limited to any patents, copyrights, trade secrets or trademarks, of the other party. COOPERATION AGREEMENT 9 3 CONFIDENTIALITY 3.1 In General. Each of the parties acknowledges that it will likely be in ---------- both parties' interest to disclose or provide access to certain Confidential Information to the other party in order to realize any benefit from the collaborations contemplated by this Cooperation Agreement. The parties agree that any such disclosure or access shall be permitted only to the extent necessary to fulfill its obligation of cooperation pursuant to a Specific Collaboration Agreement or hereunder, and that such access shall be permitted only on the terms set forth in this Cooperation Agreement or, as applicable, the Specific Collaboration Agreement. 3.2 Limited Transfer of Confidential Information. To the extent that -------------------------------------------- either party elects to disclose certain Confidential Information to the other party, the receiving party agrees that: 3.2.1 it will not use any Confidential Information for any purpose other than in connection with a collaborative project undertaken pursuant to the terms herein and in the Specific Collaboration Agreement, as applicable; 3.2.2 it will not disclose, utilize, exploit or distribute the Confidential Information or the terms of this Cooperation Agreement or any Specific Collaboration Agreement, or cause the Confidential Information to be exploited or distributed to any third party, except with the prior written consent of the disclosing party; 3.2.3 it shall take all reasonable steps to protect the Confidential Information from disclosure and, in any event, employ means to protect the Confidential Information that are at least as stringent as those employed to protect its own Confidential Information; and COOPERATION AGREEMENT 10 3.2.4 it will not make or permit to be made, without the prior written consent of the disclosing party, any copies or other reproductions of the Confidential Information that the disclosing party may supply to the receiving party hereunder. 3.3 Exceptions. The limitations imposed by this Section shall not apply ---------- to: 3.3.1 information which at the time of disclosure is already possessed by the receiving party as demonstrated by written or other tangible evidence; 3.3.2 information that is or becomes part of the public domain through no fault of the receiving party; 3.3.3 information disclosed to the receiving party in good faith by a third party who has an independent right to such information; 3.3.4 information that is independently developed by an employee of the receiving party who has not received or otherwise been exposed to the information of the other party. 3.4 Injunctive Relief. Each party acknowledges and agrees that the ----------------- Confidential Information of the other party is valuable and confidential proprietary information of the other party, that the unauthorized disclosure of any part of the Confidential Information would cause the other party substantial and irreparable injury, and the other party will not have an adequate remedy at law in the event of such unauthorized disclosure. Therefore, each party acknowledges and agrees that the other party shall be entitled to obtain preliminary and permanent injunctive relief in any court of competent jurisdiction against acts of unauthorized disclosure of the Confidential Information, without the posting of bond or other security, in addition to whatever other remedies it may have at law or otherwise. COOPERATION AGREEMENT 11 3.5 Return of Materials. To the extent that either party no longer ------------------- requires Confidential Information it has received from the other party, or upon termination of this Cooperation Agreement for any reason, or upon the request of the disclosing party, each party shall promptly return to the disclosing party all documents and materials containing Confidential Information and shall either return or destroy all copies, extracts, summaries, analyses or reproductions containing any Confidential Information, as well as all documents, memoranda, notes and other writings prepared by the receiving party or its agents that are based in whole or in part on any Confidential Information. The receiving party shall provide the disclosing party with a written certification by an authorized officer that such destruction has taken place. 3.6 No Warranties. Each of the parties acknowledges that neither party ------------- makes any express or implied representation or warranty as to the accuracy, completeness, usefulness or reliability of the Confidential Information. Neither party nor any of its representatives shall have any liability to the other party, express or implied, relating to the use of its Confidential Information or for any errors therein or omissions therefrom. 4 TERM AND IMMEDIATE TERMINATION 4.1 Term. This Cooperation Agreement shall be in effect from the Effective ---- Date and shall continue for three (3) years. It shall automatically renew for another one-(1)-year period unless terminated by either party with a notice period of ninety (90) days before the start of any such one-(1)-year period. 4.2 Immediate Termination. This Cooperation Agreement shall, however, --------------------- terminate immediately on the date on which Hoechst (and its Affiliates) own less than 75% of the Initial Hoechst Shares. The terms "Affiliate" and "Initial Hoechst Shares" shall have the meanings set forth in that COOPERATION AGREEMENT 12 certain Stockholders Agreement dated the date hereof by and between Hoechst and certain stockholders of Diagnostic Holdings, Inc. (now Dade Behring Holdings, Inc.). 4.3 Termination for Breach. Either party may terminate this Cooperation ---------------------- Agreement upon ninety (90) days' prior written notice, in the event of the other party's breach which is not cured within such ninety (90) day period. 5 MISCELLANEOUS 5.1 Amendment and Waiver. This Cooperation Agreement may be amended, or any provision of this Cooperation Agreement may be waived, so long as any such amendment or waiver is set forth in a writing executed by each party hereto. No course of dealing between or among the parties shall be deemed effective to modify, amend or discharge any part of this Cooperation Agreement or any rights or obligations of any party under or by reason of this Cooperation Agreement. 5.2 Notices. All notices, demands and other communications to be given or ------- delivered under or by reason of the provisions of this Cooperation Agreement shall be in writing and shall be deemed to have been given when personally delivered, sent by telecopy (with receipt confirmed) or two days after sent by reputable overnight express courier (charges prepaid). Unless another address is specified in writing, notices, demands and communications to Hoechst and DBI shall be sent to the addresses indicated below: COOPERATION AGREEMENT 13 Notices to Hoechst: ------------------ Hoechst AG Bruningstrae 50 D-65929 Frankfurt a.M. Germany Attn: Horst Waesche, Member of the Management Board Notices to DBI: -------------- Dade Behring Holdings, Inc. 1717 Deerfield Road P.O. Box 778 Deerfield, Illinois 60015 U.S.A. Attn: President with copy (which shall not constitute notice hereunder) to: ---------------------------------------------------------- Bain Capital, Inc. Two Copley Place Boston, Massachusetts 02116 U.S.A. Attn: Stephen G. Pagliuca John Connaughton 5.3 Assignment. This Cooperation Agreement and all of the provisions ---------- hereof are personal to Hoechst and DBI and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, except that neither this Cooperation Agreement nor any of the rights, interests or obligations hereunder may be assigned, delegated or transferred, by operation or law, sale of stock, change of control or otherwise, voluntarily or involuntarily, without the prior written consent of the other party. Any such purported assignment, transfer or delegation shall be deemed ineffective. 5.4 Complete Agreement. The Combination Agreement and this Cooperation ------------------ Agreement contain the complete agreement between the parties with respect to the subject matter herein and supersede any prior COOPERATION AGREEMENT 14 understandings, agreements or representations by or between the parties, written or oral. 5.5 Governing Law. The validity, construction, and enforceability of this ------------- Cooperation Agreement shall be governed in all respects by the laws of the state of New York, without regard to its conflict of laws rules. 5.6 Venue. Courts in the federal districts of New York, shall have ----- exclusive venue. 5.7 No Third-Party Beneficiaries. This Cooperation Agreement is for the ---------------------------- sole benefit of the DBI and Hoechst and their permitted assigns and nothing herein expressed or implied shall give or be construed to give any person or entity, other than the parties hereto and their permitted assigns, any legal or equitable rights hereunder. 5.8 Order of Precedence. This Cooperation Agreement shall take precedence ------------------- over any Specific Collaboration Agreement, except that the parties may agree to waive or modify a term or terms herein by express reference in a Specific Collaboration Agreement. Any such reference in a Specific Collaboration Agreement shall waive or modify a term or terms of this Cooperation Agreement only with respect to the undertakings contemplated by that Specific Collaboration Agreement. 5.9 Survival. Sections 2.8, 2.9, 2.10 and 5.5, and Article 3 of this -------- Cooperation Agreement shall survive expiration or termination of this Cooperation Agreement. 5.10 Severability. If any of the provisions contained in this Cooperation ------------ Agreement are or become invalid or impracticable for any reason, including by virtue of the omission of any other provision, the validity of the remaining provisions shall remain unaffected. The invalid or impracticable provision shall be substituted or supplemented by COOPERATION AGREEMENT 15 provisions that ensure the economic purpose of the invalid or impracticable provision as far as possible. 5.11 Costs. Each of the parties shall bear its own costs and expenses in ----- connection with the negotiation and preparation of this Cooperation Agreement and any Specific Collaboration Agreement except as otherwise set forth herein or in any Specific Collaboration Agreement. 5.12 Relationship of the Parties. Neither party shall be considered the --------------------------- agent or representative of the other party. 5.13 Counterparts. This Cooperation Agreement may be executed in multiple ------------ counterparts all of which taken together shall constitute one and the same agreement. * * * * COOPERATION AGREEMENT 16 IN WITNESS WHEREOF, the parties have executed this Cooperation Agreement as of the Effective Date. DIAGNOSTICS HOLDINGS, INC. By: /s/ John Connaughton ------------------------------- Its: VICE PRESIDENT-JOHN CONNAUGHTON HOECHST AG By: /s/ Andreas Pollman --------------------------------- Its: By: --------------------------------- Its: COOPERATION AGREEMENT EX-99.1 7 PRESS RELEASE EXHIBIT 99.1 For Immediate Release Contact: Philip J. Smith for Dade Behring, +1 (847) 267-5418 Charlotte Dexter for Dade Behring/Europe, +44 (171) 384-3390 Richard Nicolazzo for Bain Capital, +1 617-951-0000 Heiner Harder for Hoechst AG, +49 (69) 305-4530 DADE INTERNATIONAL AND BEHRING DIAGNOSTICS COMPLETE THEIR MERGER, CREATING DADE BEHRING INC. New Company Offers Exceptional Breath in Products and Services for Clinical Laboratories DEERFIELD, Illinois (October 1, 1997) - Dade International and the Behring Diagnostics unit of Hoechst AG said today that they have completed their merger and are now operating as Dade Behring Inc., an independent and broadly capable company serving clinical laboratories around the world. The merger, announced in March 1997, creates a company with sales of approximately $1.5 billion and 8,700 employees. Dade Behring has research, manufacturing and marketing operations in 22 countries. It offers the broadest available line of products and services for laboratories in hospitals and elsewhere. The company's DADE BEHRING MERGER COMPLETED, PAGE 2 products are used in clinical chemistry, immunodiagnostics, automated microbiology, hemostasis/coagulation testing, plasma-protein testing, infectious-disease testing, therapeutic drug monitoring, laboratory quality control and testing for drugs of abuse. Many of the company's products hold market leadership positions. "Dade Behring's success is assured by the proven ability of our combined company to understand and meet a broad range of needs critical to clinical laboratories throughout the world. For example, we are highly skilled in the integration of advanced technology, using it to increase the value of clinical information and providing that information at the lowest possible cost," said Scott Garrett, the former chairman and chief executive officer of Dade International who will now serve as CEO of Dade Behring. "We're putting together almost 150 years of company history and experience in this field, combined with a broad range of state-of-the-art skills and technologies devoted to the laboratory." The new company invests approximately $100 million annually in R&D. "Increased global presence provides added strength," said Uwe Bicker, M.D., Ph.D., former Behring Diagnostics chairman and CEO, now executive chairman of Dade Behring. "Products and technologies from each former company can now be provided with increased vigor in markets around the world. Our focus worldwide is on the creation of diagnostic information that leads directly to better patient care." About half of Dade Behring's sales will be in the United States and half in other countries. The company also will focus on developing synergies between Hoechst's health-care businesses and the DADE BEHRING MERGER COMPLETED, PAGE 3 expanded Dade Behring diagnostics offering, according to Prof. Bicker, who is a board member of the Hoechst Marion Roussel global pharmaceutical business of Hoechst AG. As an independent company, Dade Behring will be 32.5 percent owned by Hoechst AG, of which Behring Diagnostics had been a subsidiary. The balance of Dade Behring will be owned by Dade International's former owners--Bain Capital, Goldman Sachs Capital Partners and management at Dade. Dade Behring's headquarters will be in Deerfield, Illinois, with a branch office in Frankfurt, Germany. "The diagnostics industry worldwide continues to consolidate, seeking the economies that can be created by larger, broader companies," said Stephen G. Pagliuca, managing director of Bain Capital and director of Dade Behring. "The investments we have made and continue to make in this company are designed to put it at the forefront of this trend, with uniquely broad-based capabilities to serve laboratories." Dade International became an independent company in December 1994; it had previously been owned by Baxter International. In 1995, Dade entered a global alliance in hemostasis with TOA Medical Electronics Co., Ltd., of Japan. In 1996, Dade acquired the clinical diagnostics product lines of DuPont Medical Products. Behring Diagnostics in 1995 acquired the former Syva Company and its product lines, used in testing for drugs of abuse and in therapeutic drug monitoring. Dade was founded in Miami in 1949; Behring began in Marburg, Germany, in 1904. ## -----END PRIVACY-ENHANCED MESSAGE-----