<PAGE>
Page 1 of 274
Exhibit Index
Appears on Page 23
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): September 15, 1995
VWR SCIENTIFIC PRODUCTS CORPORATION
--------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Pennsylvania 0-14139 91-1319190
- ------------------------------ ----------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
</TABLE>
1310 Goshen Parkway
West Chester, PA 19380
- ------------------------------------ ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (610) 431-1700
--------------
VWR CORPORATION
-------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
-------------------------------------
Acquisition of the "Industrial Distribution Business"
-----------------------------------------------------
On September 15, 1995, VWR Corporation (the "Registrant" or the
"Corporation") completed the acquisition (the "Acquisition") of the
industrial distribution business of the Industrial and Life Sciences
Division of Baxter Healthcare Corporation, a Delaware Corporation
("Baxter") and the industrial distribution business conducted by certain
Baxter affiliates (collectively, the "Industrial Distribution
Business"). In the Acquisition, the Registrant purchased certain
designated assets of the Industrial Distribution Business, including,
but not limited to, all of the domestic trade accounts receivable,
certain tangible personal property, rights and benefits under certain
contracts and certain rights in specified trademarks. The cash purchase
price paid by the Registrant at closing was $400,062,000. In addition
to the cash paid at closing, the Registrant is required to pay to Baxter
and its affiliates the sum of approximately $28,600,000 by November 30,
1995 for accounts receivable in the same amount. The Registrant has
also assumed certain liabilities of the Industrial Distribution Business
for accrued vacation pay, post-closing liabilities and obligations under
the acquired contracts, certain liabilities and obligations to Baxter
employees working solely in the Industrial Distribution Business and all
liabilities for warranty claims for products sold by the Industrial
Distribution Business. The cash purchase price paid by the Registrant
is subject to a post-closing adjustment on or before December 15, 1995
on a dollar-for-dollar basis to the extent that the amount obtained by
subtracting the accrued vacation pay liabilities assumed by the
Registrant, from the sum of trade accounts receivable plus tangible
personal property purchased by the Registrant, exceeds or is less than
$72,375,958.
The consideration paid by the Registrant for the Industrial Distribution
Business was determined by negotiations between the Registrant and
Baxter, was approved by the Board of Directors of the Registrant and has
been financed by the proceeds received by the Registrant from: (i) the
sale of 6,832,797 common shares (the "Purchase Shares"), par value $1.00
per share (the "Common Shares") of the Registrant at a price of $12.44
per share to EM Laboratories, Incorporated, a New York corporation
("EML"); (ii) the sale of a $135,000,000 subordinated debenture of the
Registrant to EML; (iii) the exercise by EML of a warrant to purchase
967,015 Common Shares of the Registrant for approximately $10,600,000
and (iv) borrowings under the Registrant's $285,000,000 credit agreement
entered into by the Registrant on September 15, 1995. See Item 5.
The financial statements of the Industrial Distribution Business
included as an Exhibit and incorporated by reference in Item 7 of this
Form 8-K and all historical financial data concerning the Industrial
Distribution Business included in the Unaudited Pro Form Financial
Information included pursuant to Item 7 of this Form 8-K have been
provided to the Registrant by Baxter.
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<PAGE>
ITEM 5. OTHER EVENTS.
-------------
Private Placement of Equity and Debt Securities; Exercise of Warrant.
--------------------------------------------------------------------
On September 15, 1995, pursuant to an agreement with EM Industries,
Incorporated, EML's direct parent corporation ("EMI"), the Corporation
issued and sold to EML the Purchase Shares at a purchase price of $12.44
per share and a subordinated debenture (the "Debenture") in the
principal amount of $135,000,000. In addition, on September 15, 1995
EML exercised its warrant (the "Warrant") to purchase 967,015 Common
Shares at an exercise price of $11.00 per share. The proceeds from the
issuance and sale of the Purchase Shares and Debenture (approximately
$220,000,000) and the exercise of the Warrant (approximately
$10,600,000) were used to fund, in part, the cash paid by the Registrant
at the closing of the Acquisition.
The Debenture matures in a single installment on September 15, 2005.
The indebtedness evidenced by the Debenture is subordinated to the
Registrant's obligations to its primary bank lending institutions.
Interest is payable on the unpaid principal of the Debenture quarterly
at 13% per annum, but until such time as EML and its affiliates own
49.89% of the aggregate number of issued and outstanding Common Shares,
interest shall be payable solely in Common Shares at a price of $12.44
per share. Thereafter and until September 15, 1997, the payment of any
cash interest otherwise accruing will be deferred until maturity of the
Debenture.
On April 13, 1995, EML purchased from the Registrant the Warrant and
1,818,181 Common Shares. In connection with the agreement to purchase
such securities, EMI entered into a Standstill Agreement with the
Registrant, dated February 27, 1995 (the "Standstill Agreement"),
pursuant to which EMI agreed that it and its affiliates would not,
subject to certain specified exceptions, for a period of four years,
increase its beneficial ownership of the Registrant's Common Shares
above 20.1% without the prior consent of the Registrant. (EML directly
assumed such restrictions on April 13, 1995 when it purchased its
securities from the Registrant.) On September 15, 1995, EMI, EML and
the Registrant entered into Amendment Number One to the Standstill
Agreement which, among other things, increased the 20.1% percentage
limitation to 49.89%. As a result of the issuance of the Purchase
Shares and exercise of the Warrant, EML presently owns approximately
46.0% of the issued and outstanding Common Shares. On September 15,
1995, pursuant to the Standstill Agreement, as amended, four additional
persons nominated by EML were elected to Registrant's Board of
Directors, giving EML six representatives on the fifteen-member Board of
Directors.
Senior Bank Credit Agreement.
----------------------------
On September 14, 1995, the Registrant and certain of its subsidiaries
(collectively, the "Borrowers") entered into a Credit Agreement (the
"Credit Agreement") with a 23-member bank group (the "Banks"), led by
Bank of America National Trust and Savings Association, PNC Bank N.A.
and CoreStates Bank, N.A. which acted as agents. Pursuant to the Credit
Agreement, the Banks have extended the Borrowers a five-year amortizing
term loan in the original principal amount of $135,000,000 (the "Term
Loan") and established for the Borrowers from September 15, 1995
until September 13, 2000 a revolving line of credit in an amount not to
exceed $150,000,000 (the "Revolver"). The Term Loan and Revolver are
secured by liens in favor of the Banks on substantially
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<PAGE>
all of the Borrowers' tangible and intangible personal property. In
addition, the Registrant has agreed not to create any liens on its real
property and has agreed to grant liens on its real property to secure
the Term Loan and Revolver in the event the Banks should later request
it to do so. The proceeds of the Term Loan and the initial advance
under the Revolver were used by the Borrowers principally as follows:
(i) approximately $74,000,000 was used by the Registrant to repay
indebtedness outstanding under the Company's former credit facility led
by CoreStates Bank, N.A., as agent, and (ii) approximately $170,000,000
was used to fund the balance of the cash portion of the purchase price
paid by the Registrant at the closing of the Acquisition.
Both the Term Loan and the Revolver bear interest rates based, in such
relative principal amounts as the Corporation shall elect, on the London
Interbank Offered Rate ("LIBOR") or the prime rate announced from time
to time by CoreStates Bank, N.A. ("Prime"). The Corporation is
obligated to pay amounts in excess of such floating rates (between .75%
and 2.5% in the case of LIBOR elections and 0% and 1% in the case of
Prime elections), which such amounts will vary depending upon the
relationship between the Corporation's earnings before interest, taxes,
depreciation and amortization ("EBITDA") and the then aggregate amount
outstanding under the Credit Agreement. The Corporation is also
required to pay commitment fees on the unused portion of the Revolver
of between .25% and .5% also varying depending on the relationship
between the Corporation's EBITDA and aggregate borrowings under the
Credit Agreement.
The terms of the Revolver provide that the Corporation must have at
least $20,000,000 undrawn on the Revolver for at least thirty
consecutive days in the first twelve months following the closing and at
least $30,000,000 undrawn for at least thirty consecutive days during
each twelve month period thereafter. Borrowings under the Revolver are
limited to 85% of eligible accounts receivable and 50% of eligible
inventory.
The Credit Agreement includes various financial covenants of the
Corporation, including covenants with respect to minimum EBITDA, maximum
senior leverage ratio, minimum interest coverage, minimum net worth, and
minimum fixed coverage ratio.
The Credit Agreement prohibits the Corporation from paying dividends and
making other distributions (except for the issuance of Debenture Shares
as required by the Debenture) and prohibits "changes of control" of the
Corporation, including through mergers and acquisitions, changes in the
composition of the current majority of the Corporation's board of
directors, acquisitions by persons other than EMI and its subsidiaries
of more than 20% of the Corporation's voting stock, and acquisitions by
EMI and its subsidiaries of more than 50% of the Corporation's voting
stock.
Corporate Name Change
---------------------
On September 15, 1995, the Registrant changed its name from "VWR
Corporation" to "VWR Scientific Products Corporation."
Material Agreements.
-------------------
Services Agreement. On September 15, 1995, the Registrant entered
into a Services Agreement with Baxter that governs the provision by
Baxter of certain services to the Registrant to enable the
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<PAGE>
uninterrupted continuation of the Industrial Distribution Business after
the Closing of the Acquisition described under Item 2 above, as well as
an orderly transfer of the Industrial Distribution Business to the
Registrant. Under the Services Agreement, Baxter is required to
continue to provide the same type of services to the customers of the
Industrial Distribution Business as it had provided prior to the
completion of the Acquisition. Such services include order entry,
shipping, invoicing, credit and collection, and inventory stocking and
replenishment. While the term of the Services Agreement is for two
years, upon prior notice, the Registrant may direct Baxter to
discontinue the provision of services in any particular region. No
service fees are payable for services under the Services Agreement
during the first three months of the term of such Agreement. The
Registrant is required to make monthly payments during the remaining
term of the Services Agreement to Baxter at the rate of 5.5% of the
total sales of certain products sold to customers of the Industrial
Distribution Business which are serviced by Baxter; provided, however,
the Registrant is obligated to pay a minimum of $18,645,000 to Baxter
during the first fifteen months of such Agreement. Upon the cessation of
services by Baxter at a particular facility, the Registrant is required
to purchase from Baxter the inventory of laboratory supplies and
equipment held by Baxter at such facility for sale to customers of the
Industrial Distribution Business.
Distribution Agreement. On September 15, 1995, the Registrant entered
into a Distribution Agreement with Baxter pursuant to which Baxter has
granted to the Registrant the right to sell and distribute for non-
patient use (anywhere except in Canada and Japan) certain products and
accessories manufactured by Baxter and its affiliates. The Distribution
Agreement, which has a term ending on September 30, 2000, provides,
among other things, that the Registrant is obligated during each year to
either purchase a minimum dollar amount of products for sale in each of
the United States and internationally, or, if such minimum requirements
have not been met during such year, purchase products or pay to Baxter
an amount, in each case, equal to any such deficiency. The minimum
aggregate domestic and international requirements for each of the five
years of the Baxter Distribution Agreement are as follows: Year 1 -
$63,000,000; Year 2 - $74,000,000; Year 3 - $82,000,000; Year 4 -
$89,000,000; and Year 5 - $96,000,000.
Supply Agreement. On September 15, 1995, the Registrant entered into
a Supply Agreement with Baxter pursuant to which the Registrant is
obligated to supply Baxter and its affiliates with certain equipment and
supplies manufactured by third parties. The Supply Agreement has a term
ending on September 30, 2000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
-------------------------------------------------------------------
(a) Financial Statements of Businesses Acquired.
-------------------------------------------
Financial statements of the Industrial Distribution Business for the six
months ended June 30, 1995 and 1994.
Financial statements of the Industrial Distribution Business for the
years ended December 31, 1992, 1993 and 1994; incorporated by
reference to Registrant's definitive proxy statement filed with the
Commission on August 11, 1995.
(b) Unaudited Pro Forma Financial Information.
------------------------------------------
Pro-forma financial information of the Registrant.
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<PAGE>
(c) Exhibits.
--------
<TABLE>
<CAPTION>
Exhibit Number
(Referenced to
Item 601 of
Regulation S-K) Description of Exhibit
--------------- ----------------------
<S> <C>
1 Amendment to Articles of Incorporation dated September 15,
1995
2(a) Asset Purchase Agreement dated as of May 24, 1995 by
and among VWR Corporation, Baxter Healthcare
Corporation and EM Laboratories, Incorporated;
incorporated by reference to Exhibit VI of
Registrant's definitive proxy statement filed with
the Commission on August 11, 1995.
2(b) Amendment to Asset Purchase Agreement dated as of
September 15, 1995 by and among VWR Corporation,
Baxter Healthcare Corporation and EM Laboratories,
Incorporated.
4(a) Standstill Agreement between VWR Corporation and EM
Industries, Incorporated dated February 27, 1995;
incorporated by reference to Exhibit 4(a) of
Registrant's Form 8-K dated April 13, 1995.
4(b) Amendment Number One to the Standstill Agreement dated
September 15, 1995 by and among VWR Corporation, EM
Industries, Incorporated and EM Laboratories,
Incorporated.
4(c) Subordinated Debenture dated as of September 14, 1995
in the principal amount of $135,000,000 payable to
the order of EM Laboratories, Incorporated.
4(d) Credit Agreement dated as of September 14, 1995 by and
among the Registrant, Bank of America National Trust
and Savings Association, PNC Bank, N.A.,
CoreStates Bank, N.A., et. al.
4(e) Term Note dated September 15, 1995 in the principal sum
of $135,000,000.
4(f) Revolving Credit Note dated September 15, 1995 in the
principal sum of $150,000,000.
10(a) Common Share and Debenture Purchase Agreement dated
as of May 24, 1995 between VWR Corporation and EM
Industries, Incorporated; incorporated by
reference to Exhibit II of Registrant's definitive
proxy statement filed with the Commission on August
11, 1995.
10(b) Distribution Agreement between VWR Corporation and
Baxter Healthcare Corporation dated as of September
15, 1995.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
10(c) Services Agreement between VWR Corporation and Baxter
Healthcare Corporation dated as of September 15,
1995.
10(d) Supply Agreement between VWR Corporation and Baxter
Healthcare Corporation dated as of September 15,
1995.
10(e) Employment Agreement between Jerrold B. Harris and
VWR Corporation dated as of September 15, 1995
</TABLE>
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VWR SCIENTIFIC PRODUCTS CORPORATION
Date: September 29, 1995 By: /s/ JERROLD B. HARRIS
-----------------------------
JERROLD B. HARRIS
PRESIDENT
-8-
<PAGE>
BAXTER HEALTHCARE CORPORATION
INDUSTRIAL DISTRIBUTION BUSINESS
COMBINED STATEMENTS OF INCOME
(in millions)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1995 1994
---- ----
(unaudited)
-----------
<S> <C> <C>
Net Sales $248.4 $229.0
Cost and Expenses:
Cost of goods sold 188.0 172.3
Marketing and administrative expenses 38.0 37.3
Goodwill amortization .6 .6
Other (.2) 0
------ ------
Total costs and expenses 226.4 210.2
------ ------
Income Before Income Taxes 22.0 18.8
Income Tax Expense 9.1 7.8
------ ------
Net Income $ 12.9 $ 11.0
====== ======
</TABLE>
See accompanying notes to unaudited combined financial statements.
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<PAGE>
BAXTER HEALTHCARE CORPORATION
INDUSTRIAL DISTRIBUTION BUSINESS
COMBINED BALANCE SHEETS
(in millions)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
---- ----
(unaudited)
-----------
<S> <C> <C>
Current Assets:
Accounts receivable, net of allowance for
doubtful accounts of $4.7 in 1995 and $3.8 in 1994 $ 76.2 $ 62.5
Inventories 43.7 40.8
Prepaid expenses 3.2 2.5
------ ------
Total current assets 123.1 105.8
------ ------
Machinery and Equipment:
At cost 1.3 1.0
Accumulated depreciation .8 .6
------ ------
Net machinery and equipment .5 .4
------ ------
Other Assets:
Goodwill 40.0 40.6
Other .4 .4
------ ------
Total other assets 40.4 41.0
------ ------
Total Assets $164.0 $147.2
====== ======
Current Liabilities:
Accounts payable, principally trade $ 37.0 $ 36.2
Accounts payable - Baxter 5.9 5.4
Accrued liabilities 4.9 5.7
------ ------
Total current liabilities 47.8 47.3
------ ------
Non-current Liabilities 2.2 2.1
------ ------
Total Liabilities 50.0 49.4
Equity:
Investments by and advances from Baxter 114.0 97.8
------ ------
Total Liabilities and Equity $164.0 $147.2
====== ======
</TABLE>
See accompanying notes to unaudited combined financial statements.
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<PAGE>
BAXTER HEALTHCARE CORPORATION
INDUSTRIAL DISTRIBUTION BUSINESS
COMBINED STATEMENTS OF CASH FLOWS
(in millions)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1995 1994
---- ----
(unaudited)
-----------
<S> <C> <C>
Cash flow Provided by Operations:
Income from operations $ 12.9 $ 11.0
Adjustments:
Depreciation and amortization .8 .8
Changes in balance sheet items:
Accounts receivable, net (13.7) (10.4)
Inventories (2.9) 4.0
Accounts payable and other accrued liabilities .5 1.8
Other (.6) (.4)
------ ------
Cash flow (used in) provided by operations (3.0) 6.8
------ ------
Investment Transactions:
Capital expenditures, net (.3) (.1)
------ ------
Financing Transactions:
Advances from (payments to) Baxter, net 3.3 (6.7)
------ ------
Net Cash Flow $ 0.0 $ 0.0
====== ======
</TABLE>
See accompanying notes to unaudited combined financial statements.
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<PAGE>
BAXTER HEALTHCARE CORPORATION
INDUSTRIAL DISTRIBUTION BUSINESS
NOTES TO UNAUDITED COMBINED FINANCIAL STATEMENTS
1. ORGANIZATION AND BUSINESS
- -----------------------------
The "Industrial Distribution Business" is comprised of the industrial
distribution business of the Industrial and Life Sciences Division of Baxter
Healthcare Corporation and certain foreign operations of Baxter World Trade
Corporation, both wholly owned subsidiaries of Baxter International Inc.
("Baxter"). A significant portion of the Industrial Distribution Business was
acquired through Baxter's 1985 acquisition of American Hospital Supply
Corporation. Goodwill related to this acquisition has been allocated to the
Industrial Distribution Business. The Industrial Distribution Business is a
distributor of third party and Baxter-manufactured laboratory and cleanroom
products to customers for use in laboratories, production plants and other
facilities not involved in the care of human patients. On September 15, 1995,
Baxter completed the sale of the Industrial Distribution Business to VWR. (See
Note 3)
2. INTERIM FINANCIAL INFORMATION
- ---------------------------------
The accompanying unaudited combined financial statements as of June 30, 1995
and for the six month periods ended June 30, 1995 and 1994, reflect adjustments
consisting of normal and recurring adjustments necessary for a fair presentation
of such financial information. These unaudited interim combined financial
statements should be read in conjunction with the audited financial statements
included in the Proxy Statement of VWR dated August 11, 1995, which financial
statements are incorporated by reference in VWR's Form 8-K dated September 29,
1995.
3. SALE OF THE INDUSTRIAL DISTRIBUTION BUSINESS
- ------------------------------------------------
On September 15, 1995, Baxter completed the sale of certain assets and
liabilities of the Industrial Distribution Business to VWR for approximately
$429 million in cash. Terms of the Asset Purchase Agreement and the related
distribution agreement and other ancillary service agreements are summarized in
the following paragraphs.
Asset Purchase Agreement
- ------------------------
VWR acquired certain assets of the Industrial Distribution Business which
included, but were not limited to, selected domestic accounts receivable and
related reserves, certain tangible personal property, rights and benefits under
certain contracts and rights in specified trademarks. Inventory of the
Industrial Distribution Business will remain the property of Baxter until used
by VWR to fulfill orders. Once transition from Baxter in a particular region is
complete under the Services Agreement described below, VWR will purchase certain
inventories maintained in such region by Baxter at cost. VWR also assumed
certain liabilities which principally included accrued vacation pay and all
liabilities for product warranty claims. In general, Baxter retained all other
liabilities. For additional information related to the acquisition by VWR of the
Industrial Distribution Business, see "Item 2 -- Acquisition or Disposition of
Assets -- Acquisition of the Industrial Distribution Business" of VWR's Form 8-K
dated September 29, 1995 and the "Unaudited Pro forma Balance Sheet" included as
an Exhibit to Item 7 of such Form 8-K.
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<PAGE>
Baxter Distribution Agreement
- -----------------------------
On September 15, 1995, Baxter and VWR entered a Distribution Agreement which
expires on September 30, 2000. Each contract year under such Agreement begins on
October 1 and ends on September 30 except for the first contract year which
began on September 15, 1995, and ends on September 30, 1996. In connection with
the agreement, Baxter grants to VWR the right to sell and distribute
Baxter-manufactured products only to Industrial Distribution Business customers
for use in laboratories, production plants and other facilities not involved in
the care of human patients. VWR may distribute products through sub-distributors
provided the dollar volume of all products sold does not exceed 15% of the
dollar volume of all products sold by VWR during the contract year in the United
States.
Minimum purchase requirements, which increase annually, exist for VWR during
first five years of the contract. If such purchase requirements are not met, VWR
is required to pay Baxter the difference between the minimum purchase
requirements and the actual purchase amounts.
Beginning on October 1, 1995, Baxter will pay a rebate to VWR of 5.9% of the net
purchase price for purchases in excess of $12 million in each of the first three
quarters of any contract year providing that total purchases are in excess of
$48 million for the full contract year.
Services Agreement
- ------------------
On September 15, 1995, Baxter and VWR entered into a Services Agreement pursuant
to which Baxter will provide, among other things, certain transition services
such as order fulfillment, management information systems, credit, collections,
cash applications, shipping, replenishment and warehousing to VWR in connection
with VWR's sales of products to its industrial customers. This Services
Agreement will continue for a period of up to two years. The agreement
stipulates that no payment for services is required in the first three months.
Subsequent to the first three months of the agreement, VWR is required to make
monthly payments to Baxter in an amount equal to 5.5% of the total sales of the
products to its industrial customers. The minimum amount payable to Baxter
related to performance of services outlined under the agreement is $18.6 million
in the first 15 months.
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<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma combined balance sheet as of June 30, 1995 set forth
below gives effect to the: (i) issuance of 7,799,812 common shares of VWR
Corporation ("VWR") to EM Laboratories, Incorporated ("EML") resulting in net
proceeds of $95.1 million and borrowings of $135 million from EML pursuant to
the sale of a Subordinated Debenture (the "Debenture") of VWR in the original
principal amount of $135 million (collectively referred to as the "EML
Investment"); (ii) execution of VWR's new $285 million credit agreement (the
"Senior Facility") with a 23-member bank group (the "Refinancing"); and (iii)
the acquisition (the "Acquisition") by VWR of the industrial distribution
business of the Industrial and Life Sciences Division of Baxter Healthcare
Corporation ("Baxter") and the industrial distribution business conducted by
certain Baxter affiliates (collectively, the "Industrial Distribution Business")
pursuant to an Asset Purchase Agreement dated as of May 24, 1995, as amended on
September 15, 1995, between VWR, Baxter and EML (the "Asset Purchase
Agreement"), as if such transactions had occurred on June 30, 1995. The
Acquisition is to be accounted for under the purchase method of accounting.
Pursuant to the Asset Purchase Agreement, VWR did not acquire inventories nor
did it assume accounts payable and certain liabilities. However, these working
capital items relate to operations of the acquired business and, accordingly,
the pro forma balance sheet includes $43.7 million of inventories and $42.9
million of accounts payable, and $5.2 million of accounts receivable at June 30,
1995 in excess of the accounts receivable at closing. VWR and Baxter negotiated
a two-year services agreement ("Services Agreement") whereby, among other
things, Baxter will continue to own and warehouse the inventory related to the
Industrial Distribution Business and VWR will pay Baxter for the inventory upon
shipment to customers. At various stages during the Services Agreement period,
VWR will transfer certain inventories related to the Industrial Distribution
Business into VWR's warehouses. Upon each transfer, VWR is committed to purchase
all of the transferred Baxter inventory at cost as provided in the Services
Agreement and VWR expects to fund such purchases from cash generated from
operations and available borrowings under its then-current credit facility.
The unaudited pro forma combined statements of operations for the year ended
December 31, 1994 and the six months ended June 30, 1995 set forth below give
effect to the EML Investment, Refinancing and Acquisition, as if such
transactions had occurred as of January 1, 1994. The financial statements of the
Industrial Distribution Business reflect the "carve-out" financial position and
results of operations of the Industrial Distribution Business. Certain general
and administrative expenses of Baxter have been allocated to the Industrial
Distribution Business on various bases which, in the opinion of Baxter's
management, are reasonable. However, such expenses are not necessarily
indicative of, and it is not practicable for management to estimate, the nature
and level of expenses which might have been incurred had the Industrial
Distribution Business been operating as a separate independent company.
Potential cost savings from combining the operations are not reflected in the
pro forma combined statement of operations because the Industrial Distribution
Business and VWR's business are not expected to be fully integrated until after
the first anniversary date of the closing under the Asset Purchase Agreement. In
addition, pursuant to the Services Agreement, VWR is required to make payments
to Baxter during the Services Agreement period equal to 5.5% of sales processed
by Baxter. The service fee is intended to compensate Baxter for direct and
indirect costs (including corporate allocations) it will incur during the
service period.
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<PAGE>
The unaudited pro forma adjustments are based upon available information and
upon certain assumptions that VWR believes are reasonable. All information and
financial data concerning the Industrial Distribution Business included in
"Unaudited Pro Forma Financial Information" has been provided to VWR by Baxter.
The unaudited pro forma financial information is provided for informational
purposes only and does not purport to be indicative of VWR's results of
operations that would actually have been achieved had the EML Investment,
Refinancing and Acquisition been completed as of or for the periods presented,
or that may be obtained in the future. The pro forma financial information
should be read in conjunction with the audited and unaudited historical
financial statements of VWR and related notes thereto previously reported on
Forms 10-K and 10-Q, and of the Industrial Distribution Business and related
notes thereto included herein and incorporated by reference in VWR's Form 8-K
dated September 29, 1995 from VWR's proxy statement dated August 11, 1995.
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<PAGE>
Unaudited Pro Forma Balance Sheet
June 30, 1995
(in thousands)
<TABLE>
<CAPTION>
Pro Forma
Adjustments for As Adjusted for
Industrial EML the EML
Distribution Investment, Investment,
VWR Business Refinancing and Refinancing and
Historical Historical Acquisition (a) Acquisition
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Current assets:
Receivables--
Trade receivables $ 78,708 $ 76,200 $ -- $ 154,908 (i)
Other 3,140 3,140
Inventories 50,676 43,700 94,376 (i)
Other 6,932 3,200 10,132
-------------------------------------------------------------------------
Total current assets 139,456 123,100 262,556
Property and equipment-net 37,832 500 38,332
Goodwill 6,961 40,000 321,145 (b) 368,106
Other assets 10,063 400 4,575 (c) 15,038
-------------------------------------------------------------------------
$ 194,312 $ 164,000 $ 325,720 $ 684,032
=========================================================================
Liabilities and shareholders'
equity
Current liabilities:
Bank checks outstanding, less
cash in bank $ 5,795 $ -- $ -- $ 5,795
Accounts payable 42,744 42,900 85,644 (i)
Accrued liabilities 5,377 4,900 (1,500) (d) 8,777
Current portion of long-term
debt 2,722 12,278 (e) 15,000
-------------------------------------------------------------------------
Total current liabilities 56,638 47,800 10,778 115,216
Long-term debt
Credit facility:
Revolver 67,527 74,967 (e)
6,038 (f) 148,532
Term note 120,000 (e) 120,000
Subordinated note payable 135,000 (g) 135,000
Deferred income taxes and other 9,135 2,200 (2,200) 9,135
Shareholders' equity:
Common stock 12,898 7,800 (h) 20,698
Additional paid-in capital 45,331 87,337 (h) 132,668
Retained earnings 5,704 5,704
Unamortized restricted stock
and ESOP contribution,
and other (2,921) (2,921)
Net assets of the Industrial
Distribution Business 114,000 (114,000)
-------------------------------------------------------------------------
Total stockholders' equity/net
assets 61,012 114,000 (18,863) 156,149
-------------------------------------------------------------------------
Total liabilities and stockholders'
equity $ 194,312 $ 164,000 $ 325,720 $ 684,032
=========================================================================
</TABLE>
-16-
<PAGE>
Notes to Unaudited Pro Forma Balance Sheet
(a) VWR has entered into the Asset Purchase Agreement to acquire the Industrial
Distribution Business for approximately $428.7 million in cash. The
Acquisition will be accounted for under the purchase method of accounting
and will be funded as follows (in thousands):
<TABLE>
<S> <C>
Use of Funds
Purchase price of Acquisition $ 428,662
Pay off existing credit facility 70,249
Acquisition closing costs 4,145
Debt issuance cost 4,575
Stock issuance cost 500
-----------
Total use of funds $ 508,131
===========
Source of Funds
Exercise of April Warrant $ 10,637
Issuance of Purchase Shares to EML 85,000
Subordinated note payable to EML 135,000
Borrowings under the Senior Facility 277,494*
-----------
Total source of funds $ 508,131
===========
* Includes $28,600 of purchase price to be paid to Baxter by November 30,
1995 from the collection of the acquired accounts receivable
</TABLE>
Schedule A on page ____ sets forth the details of the individual pro forma
balance sheet adjustments.
(b) Represents: (i) the $361 million excess of purchase price (including
estimated acquisition costs of $4.1 million and acquisition liabilities of
$2.0 million) over net assets acquired, less; (ii) Industrial Distribution
Business's historical goodwill of $40.0 million related to the Industrial
Distribution Business. The purchase price allocation is tentative and
subject to change.
(c) Represents debt issuance cost which will be amortized over the related debt
instrument period using the straight-line method or effective interest rate
method, as applicable.
(d) Represents an adjustment of $3.5 million to exclude certain accrued
liabilities of Baxter not acquired pursuant to the Asset Purchase Agreement
plus $2 million of estimated acquisition liabilities.
-17-
<PAGE>
Notes to Unaudited Pro Forma Balance Sheet (continued)
(e) Represents borrowings under the committed $285 million Senior Facility that
will be used to fund a portion of the purchase price and estimated fees
related to the Acquisition and debt issuance costs. The Senior Facility
includes a $150 million revolving facility which is payable on the fifth
anniversary date and a $135 million term note with annual principal
reductions beginning in the first year. The Senior Facility bears a
fluctuating interest rate based on the prime rate or LIBOR at VWR's option
plus an applicable margin between .75% and 2.5% in the case of the LIBOR
election and 0% and 1% in the case of the prime rate election. VWR is
required to enter into interest-rate protection arrangements for at least
25% of the facility.
(f) Represents assumed additional borrowings related to the Industrial
Distribution Business working capital which will not be incurred at
closing. See note (i) below.
(g) Represents borrowings under the $135 million Debenture payable to EML used
to fund a portion of the purchase price of the Acquisition. Borrowings under
the Debenture are payable on the tenth anniversary date and bear interest at
13% per year payable quarterly as follows: by issuance of Common Shares in
the first year in an amount that will enable EML to obtain an ownership
percentage of 49.89% based on a fixed price of $12.44 per share; deferred in
year two which will be paid with accumulated interest thereon at maturity of
the Debenture and; in cash thereafter beginning in year three.
(h) Represents the (i) exercise of the April Warrant to purchase 967,015 Common
Shares at a price of $11.00 per share resulting in proceeds of $10.6
million; and (ii) issuance of 6,832,797 Common Shares to EML for an
aggregate of $85 million in connection with the Acquisition; less (iii)
estimated common stock issuance cost of $.5 million.
(i) Includes certain assets not acquired ($43.7 million of inventory and $5.2
million of accounts receivable at June 30, 1995 in excess of the accounts
receivable at closing) and liabilities not assumed ($42.9 million of
accounts payable) pursuant to the Asset Purchase Agreement. These assets and
liabilities are related to the historical operations of the Industrial
Distribution Business and accordingly such amounts are included in the pro
forma balance sheet. Inventories and accounts payable of the Industrial
Distribution Business are commingled with Baxter's US Distribution Division
("USD") and are allocated in the Industrial Distribution Business's
financial statements based on the Company's percentage of total cost of
goods sold of USD. Pursuant to the Services Agreement entered into between
VWR and Baxter, Baxter will continue to own and warehouse the inventory
related to the Industrial Distribution Business for a period of up to two
years. At various stages during the Services Agreement period, VWR will
transfer certain of the inventories related to the operations of Industrial
Distribution Business into its warehouses. Upon each such transfer, VWR is
committed to purchase such inventories at cost as provided in the Services
Agreement. VWR expects to fund such purchases from cash generated from
operations and available borrowings under its then current-credit facility.
-18-
<PAGE>
Notes to Unaudited Pro Forma Balance Sheet (continued)
Schedule A--Details of the Pro Forma Balance Sheet Adjustments (in thousands)
<TABLE>
<CAPTION>
Current
Portion of Revolving
Other Accrued Long-Term Credit
Cash Goodwill Assets Liabilities Debt Facility
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of 6,832,797
Common Shares to EML $ 85,000 $ -- $ -- $ -- $ -- $ --
Exercise of the April Warrant to
purchase 967,015
Common Shares 10,637
Issuance of Debentures payable to
EML 135,000
Borrowings under the new Senior
Facility 277,494 (15,000) (142,494)
---------------------------------------------------------------------------------------
Total source of funds 508,131 -- -- -- (15,000) (142,494)
Pay off existing credit facility (70,249) 2,722 67,527
Purchase price of Acquisition
including closing cost of
$4,145 (432,807) 359,145
Accrued acquisition liabilities 2,000 (2,000)
Eliminate assets and liabilities
not acquired (40,000) 3,500
Working capital assets and
liabilities not acquired but
included on pro forma balance
sheet (6,038)
Debt issuance cost (4,575) 4,575
Stock issuance cost (500)
---------------------------------------------------------------------------------------
Total use of funds (508,131) 321,145 4,575 1,500 2,722 61,489
Net pro forma adjustment and ---------------------------------------------------------------------------------------
footnote reference $ -- $ 321,145(b) $ 4,575(c) $1,500(d) $(12,278)(e) $(81,005)(e)(f)
=======================================================================================
</TABLE>
<TABLE>
<CAPTION>
Deferred Net Assets
Subordinated Income Additional of Industrial
Term Note Taxes and Common Paid-in Distribution
Note Payable Other Stock Capital Business
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of 6,832,797
Common Shares to EML $ -- $ -- $ -- $(6,833) $(78,167) $ --
Exercise of the April Warrant to
purchase 967,015
Common Shares (967) (9,670)
Issuance of Debentures payable to
EML (135,000)
Borrowings under the new Senior
Facility (120,000)
---------------------------------------------------------------------------------
Total source of funds (120,000) (135,000) -- (7,800) (87,837) --
Pay off existing credit facility
Purchase price of Acquisition
including closing cost of
$4,145 73,662
Accrued acquisition liabilities
Eliminate assets and liabilities
not acquired 2,200 34,300
Working capital assets and
liabilities not acquired but
included on pro forma balance
sheet 6,038
Debt issuance cost
Stock issuance cost 500
---------------------------------------------------------------------------------
Total use of funds -- -- 2,200 -- 500 114,000
---------------------------------------------------------------------------------
Net pro forma adjustment and
footnote reference $ (120,000)(c) $ (135,000)(g) $ 2,200 $ (7,800)(h) $(87,337)(h) $ 114,000
=================================================================================
</TABLE>
-19-
<PAGE>
Unaudited Pro Forma Statement of Operations
Six months ended June 30, 1995
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
Adjustments for As Adjusted
Industrial EML for the EML
Distribution Investment, Investment,
VWR Business Refinancing and Refinancing and
Historical Historical Acquisition Acquisition
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $ 291,186 $ 248,400 $ (2,116) (a) $ 537,470
Cost of sales 228,204 188,000 (f) 416,204
-------------------------------------------------------------------------
Gross margin 62,982 60,400 (2,116) 121,266
Operating expenses 58,064 38,400 1,764 (b) 98,228
-------------------------------------------------------------------------
Operating income 4,918 22,000 (3,880) 23,038
Interest expense and other 2,821 17,717 (c) 20,538
-------------------------------------------------------------------------
Income before income taxes 2,097 22,000 (21,597) 2,500
Income taxes 818 9,100 (8,639) (d) 1,279
-------------------------------------------------------------------------
Net income $ 1,279 $ 12,900 $ (12,958) $ 1,221
=========================================================================
Net income per share $ 0.11 $ 0.06
================= ====================
Weighted average number of
common shares outstanding (e) 11,916 9,211 21,127
</TABLE>
Unaudited Pro Forma Statement of Operations
Year ended December 31, 1994
(in thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
Adjustments for As Adjusted
Industrial EML for the EML
Distribution Investment, Investment,
VWR Business Refinancing and Refinancing and
Historical Historical Acquisition Acquisition
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales $ 535,179 $ 471,300 $ (4,977) (a) $ 1,001,502
Cost of sales 421,981 357,900 (f) 779,881
-------------------------------------------------------------------------
Gross margin 113,198 113,400 (4,977) 221,621
Operating expenses 104,124 73,000 2,783 (b) 179,907
Canlab transition expenses 916 916
-------------------------------------------------------------------------
Operating income 8,158 40,400 (7,760) 40,798
Interest expense and other 5,137 31,238 (c) 36,375
-------------------------------------------------------------------------
Income before income taxes 3,021 40,400 (38,998) 4,423
Income taxes 968 16,800 (15,599) (d) 2,169
-------------------------------------------------------------------------
Net income $ 2,053 $ 23,600 $ (23,399) $ 2,254
=========================================================================
Net income per share $ 0.18 $ 0.11
================== ===================
Weighted average number of common
shares outstanding (e) 11,128 10,266 21,394
</TABLE>
-20-
<PAGE>
Notes to Unaudited Pro Forma Statement of Operations
(a) Represents an adjustment to reclassify Industrial Distribution Business's
freight-out expense (less amounts charged to customers) from operating
expenses to net sales to conform to VWR's presentation.
(b) Represents the following adjustment to operating expenses (in thousands):
<TABLE>
<CAPTION>
Six months Year ended
ended December 31,
June 30, 1995 1994
--------------------------------------
<S> <C> <C>
Eliminate the Industrial Distribution Business's goodwill
amortization expense $ (660) $ (1,318)
Record amortization expense for the excess purchase price
related to the Acquisition over net assets acquired which is
being amortized over 40 years on a straight-line basis 4,540 9,078
Reclassification of the Industrial Distribution Business's net
freight-out express discussed in note (a) above (2,116) (4,977)
--------------------------------------
$ 1,764 $ 2,783
======================================
</TABLE>
(c) Represents an adjustment to interest expense as follows (in thousands):
<TABLE>
<CAPTION>
Six months Year ended
ended June 30, December 31,
1995 1994
--------------------------------------
<S> <C> <C>
Eliminate interest on the existing credit facility with weighted
average borrowings of $68.2 million and $71.7 million for the
year ended December 31, 1994 and the six months ended
June 30, 1995, respectively, and weighted average interest
rates of 5.3% and 7.5%, respectively $ (2,677) $ (3,608)
Record interest expense on the Senior Facility assuming
borrowings of $256.8 million and $285.6 million in 1994 and
1995, respectively, to fund the Acquisition purchase price and
assuming weighted average interest rates of 6.3% in 1994 and
7.8% in 1995 (representative of historical interest rates using
the Senior Facility margins) 11,069 16,214
Record interest expense on the $135 million Debenture at 13%
per year 8,775 17,550
Record amortization of debt issuance costs related to the Senior
Facility ($4.3 million using the effective interest rate method
related to the term portion and the straight-line method related
to the revolving portion) and the Debenture ($300,000 using
the effective interest rate method) 550 1,082
--------------------------------------
$ 17,717 $ 31,238
======================================
</TABLE>
-21-
<PAGE>
Notes to Unaudited Pro Forma Statement of Operations (continued)
The new credit facility bears a fluctuating interest rate based on the prime
rate or LIBOR at the Company's option. A 1/8 of 1% increase in the pro forma
weighted average interest rate would result in a $.3 million and $.2 million
increase in pro forma interest expense in 1994 and the six months ended June
30, 1995, respectively.
(d) Represents income tax effect of the pro forma adjustments.
(e) The adjusted weighted average number of outstanding shares include Common
Shares of VWR issued or to be issued to EML as follows: (i) 967,015 Common
Shares issued upon the exercise of the April Warrant; (ii) issuance of
6,832,797 Common Shares and; (iii) 1,410,722 Common Shares expected to be
issued to satisfy interest expense in year one on the Debenture payable to
EML which are included in the calculation based on the accrual of interest
during the first year.
(f) The Industrial Distribution Business's inventory is valued at the lower of
cost (determined on a "first-in, first-out" basis) or market. Cost of sales
has not been adjusted to give the pro forma effect to adopt VWR's accounting
policy to value inventory on the "last-in, first-out" (LIFO") method because
it is not practical to calculate the pro forma adjustment. Upon transfer of
the inventory to VWR, the acquired inventory will be valued using the LIFO
method of accounting.
-22-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Title Page No.
- ----------- ----- --------
<S> <C> <C>
1 Amendment to Articles of Incorporation dated September 15, 1995 24
2(a) Asset Purchase Agreement dated as of May 24, 1995 by and among VWR
Corporation, Baxter Healthcare Corporation and EM Laboratories,
Incorporated; incorporated by reference to Exhibit VI of
Registrant's definitive proxy statement filed with the Commission
on August 11, 1995.
2(b) Amendment to Asset Purchase Agreement dated as of September 15, 26
1995 by and among VWR Corporation, Baxter Healthcare Corporation
and EM Laboratories, Incorporated.
4(a) Standstill Agreement between VWR Corporation and EM Industries,
Incorporated dated February 27, 1995; incorporated by reference
to Exhibit 4(a) of Registrant's Form 8-K dated April 13, 1995.
4(b) Amendment Number One to the Standstill Agreement dated September 42
15, 1995 by and among VWR Corporation, EM Industries, Incorporated
and EM Laboratories, Incorporated.
4(c) Subordinated Debenture dated as of September 15, 1995 in the 49
principal amount of $135,000,000 payable to the order of EM
Laboratories, Incorporated.
4(d) Credit Agreement dated as of September 14, 1995 by and among the 63
Registrant, Bank of America National Trust and Savings Association,
PNC Bank, N.A., CoreStates Bank, N.A., et.al.
4(e) Term Note dated September 15, 1995 in the principal sum of 194
$135,000,000.
4(f) Revolving Credit Note dated September 15, 1995 in the principal sum 199
of $150,000,000.
10(a) Common Share and Debenture Purchase Agreement dated as of May 24,
1995 between VWR Corporation and EM Industries, Incorporated;
incorporated by reference to Exhibit II of Registrant's definitive
proxy statement filed with the Commission on August 11, 1995.
10(b) Distribution Agreement between VWR Corporation and Baxter 203
Healthcare Corporation dated as of September 15, 1995.
10(c) Services Agreement between VWR Corporation and Baxter Healthcare 230
Corporation dated as of September 15, 1995.
10(d) Supply Agreement between VWR Corporation and Baxter Healthcare 253
Corporation dated as of September 15, 1995.
10(e) Employment Agreement between Jerrold B. Harris and VWR Corporation 266
dated as of September 15, 1995
</TABLE>
-23-
<PAGE>
EXHIBIT 1
Microfilm Number Filed with the Department of State on SEP 15 1995
---------- -----------
Entity Number
-------------
/s/ [SIGNATURE APPEARS HERE]
-----------------------------------
Secretary of the Commonwealth
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DSCB: 15-1915 (Rev 90)
In compliance with the requirements of Pa.C.S. (S) 1915 (relating to
articles of amendment), the undersigned business corporation, desiring to amend
its Articles, hereby states that:
1. The name of the corporation is: VWR CORPORATION
---------------------------------------------
- --------------------------------------------------------------------------------
2. The (a) address of this corporation's current registered office in this
Commonwealth or (b) name or its commercial registered office provider and
the county of venue is (the Department is hereby authorized to correct the
following information to conform to the records of the Department):
(a) 1310 Goshen Parkway, West Chester, Pennsylvania 19380 Chester
-------------------------------------------------------------------------
Number and Street City State Zip County
(b) c/o:
--------------------------------------------------------------------
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider,
the county in (b) shall be deemed the county in which the corporation is
located for venue and official publication purposes.
3. The statute by or under which it was incorporated is: PaBCL of 1988, as
------------------------
amended
--------------------------------
4. The date of its incorporation is: February 10, 1994
-------------------------------------------
5. (Check, and if appropriate complete, one of the following):
X The amendment shall be effective upon filing these Articles of Amendment
--- in the Department of State.
The amendment shall be effective on: at
--- --------------- ----------------
Date Hour
6. (Check one of the following):
The amendment was adopted by the shareholders (or members) pursuant to
--- 15 Pa.C.S. (S) 1914(a) and (b).
X The amendment was adopted by the board of directors pursuant to
--- 15 Pa.C.S. (S) 1914(c)
7. (Check, and if appropriate complete, one of the following):
The amendment adopted by the corporation, set forth in full, is as
--- follows:
THIS IS A TRUE COPY OF
THE ORIGINAL SIGNED
DOCUMENT FILED WITH
THE DEPARTMENT OF STATE.
X The amendment adopted by the corporation is set forth in full in
--- Exhibit A attached hereto and made a part hereof.
<PAGE>
8. (Check if the amendment restates the Articles):
The restated Articles of Incorporation supersede the original Articles
--- and all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer thereof this
15 day of September 1995.
VWR Scientific Products Corporation
--------------------------------------
(Name of Corporation)
BY: [SIGNATURE APPEARS HERE]
----------------------------------
(Signature)
TITLE: Vice President--Finance
-------------------------------
DSCB: 15-1915 (Rev 90)-3
<PAGE>
Exhibit 2(b)
EXECUTION COPY
AMENDMENT TO ASSET PURCHASE AGREEMENT
-------------------------------------
This shall serve as an amendment (the "Amendment"), dated as of
September 15, 1995, to the Asset Purchase Agreement by and among VWR
Corporation, a Pennsylvania corporation ("Buyer"), and Baxter Healthcare
Corporation, a Delaware corporation ("Seller"), and solely with respect to
paragraphs 5.5, 5.8 and 5.9, EM Laboratories, Incorporated, a New York
corporation, dated as of May 24, 1995 (the "Purchase Agreement"). The parties
hereto hereby agree as follows:
1. Effect of Amendment. The Purchase Agreement and the terms,
-------------------
provisions and definitions therein shall continue in full force and effect and
are hereby incorporated herein in their entirety by this reference thereto
except to the extent that the Purchase Agreement is modified by this Amendment.
The parties shall modify and amend the Purchase Agreement as set forth herein.
To the extent that any provision of this Amendment is inconsistent with the
Purchase Agreement, the terms of this Amendment shall control. The parties
acknowledge that the materials contained as Annexes to this Amendment replace
corresponding Schedules contained in the Disclosure Statement and that the
Disclosure Statement, as originally referred to in the Agreement, contained all
of the Schedules referenced in the Agreement.
2. Amendment to Section 1 Heading. The following shall replace the
------------------------------
Section 1 heading of the Purchase Agreement:
"SECTION 1
PURCHASE AND SALE OF SUBJECT ASSETS
AND FOREIGN ASSETS"
3. Amendment to Section 1. The following shall be added as paragraph
----------------------
1.12 of the Purchase Agreement:
"1.12 Purchase and Sale of Foreign Assets
(a) Subject to the provisions of this Agreement, Seller shall cause
each of the Foreign Subsidiaries to sell, assign, transfer, convey and deliver
to Buyer, and Buyer shall purchase and acquire from the Foreign Subsidiaries,
all of their right, title and interest in and to the following properties and
assets of each of the Foreign Subsidiaries used or held in connection with the
operation of the Foreign Industrial Distribution Business as the same shall
exist on the date requested by Buyer in accordance with paragraph 1.6(b) hereto
(collectively, the "Foreign Assets"):
<PAGE>
(i) subject to paragraph 1.8 hereof, all rights and benefits of
the Foreign Subsidiaries in, to and under all licenses, contracts,
customer pricing agreements and other written understandings,
agreements, commitments and purchase orders with all of the Industrial
Customers relating exclusively to the Foreign Industrial Distribution
Business or by which any of the Foreign Assets are specifically bound,
except those relating exclusively to Ireland (collectively, the
"Foreign Contracts");
(ii) all of the inventories of Distributed Products, including
laboratory instruments, supplies, equipment, samples, demonstration
equipment, evaluation units and accessories, wherever located, of the
Foreign Subsidiaries, except those relating exclusively to Ireland
(the "Foreign Inventory") held by each Foreign Subsidiary exclusively
for sale to Industrial Customers;
(iii) a portion of each Foreign Subsidiary's Foreign Inventory not
held by each Foreign Subsidiary exclusively for sale to Industrial
Customers determined as follows: The number of units in each product
category contained in such Foreign Inventory as of the Closing Date to
be sold to Buyer by each Foreign Subsidiary shall be equal to the
total number of units of each product category held in inventory by
such Foreign Subsidiary multiplied by a fraction the numerator of
which shall be the unit sales by such Foreign Subsidiary of such
product category to Industrial Customers during the 90-day period
prior to the Closing Date, and the denominator of such fraction shall
be the total unit sales by such Foreign Subsidiary of such product
category during the 90-day period prior to the Closing Date;
(iv) all of the sales and business records relating exclusively to
Industrial Customers of the Foreign Industrial Distribution Business
(other than any income tax records of Seller or any Foreign
Subsidiary) wherever located including, without limitation, all files
invoices, correspondence, maintenance, operating records, advertising
materials, customer lists, cost and pricing information and credit
record of customers;
2
<PAGE>
(v) all permits, approvals, licenses, franchises, authorizations or
other rights granted by any federal, state, local or foreign
governmental authority held or applied for by Seller or any Foreign
Subsidiary and which are exclusively used, or intended to be
exclusively used, in the Foreign Industrial Distribution Business or
which relate exclusively to the Foreign Assets, and all other
consents, grants, and other rights that are used exclusively, required
or necessary for the lawful ownership of the Foreign Assets and the
operation of the Foreign Industrial Distribution Business, all only to
the extent legally transferable;
(vi) all rights and benefits of Seller or any Foreign Subsidiary in
and to all manufacturers' warranties or guaranties related
exclusively to the Foreign Inventory, all indemnification rights
against third parties related exclusively to the Foreign Assets or
related exclusively to any Foreign Assumed Liabilities and any and all
manufacturers' or third party service and replacement programs related
exclusively to the Foreign Inventory; and
(vii) all brochures, sales literature, promotional materials,
advertising materials and artwork, if any, relating exclusively to
products of the Foreign Industrial Distribution Business, customer
lists to the extent relating exclusively to the Foreign Industrial
Distribution Business, and all other selling materials of Seller or
any Foreign Subsidiary used exclusively by Seller or any Foreign
Subsidiary in the operation of the Foreign Industrial Distribution
Business or which relate exclusively to the Foreign Industrial
Distribution Business and the Foreign Assets.
(b) Notwithstanding anything contained in this Agreement to the
contrary, the Foreign Assets shall not be deemed to include, and there shall be
excluded from the purchase and sale hereunder, the Foreign Excluded Assets."
4. Amendment to Section 1. The following shall be added as paragraph
1.13 of the Purchase Agreement:
3
<PAGE>
"1.13 Foreign Assumption of Liabilities
Subject to the conditions of paragraph 7.1 of this Agreement and
paragraph 1.3 above, upon the sale and purchase of the Foreign Assets, Buyer
shall assume and agree to pay, perform, or discharge when due in accordance with
their respective terms the following liabilities and obligations of the Foreign
Subsidiaries (collectively, the "Foreign Assumed Liabilities"):
(a) all liabilities and obligations of the Foreign Subsidiaries to be
performed after the Closing under the Foreign Contracts, except to the extent
that such liabilities and obligations relate to a breach of a Foreign Contract
by any of the Foreign Subsidiaries prior to the Closing; and
(b) all liabilities and obligations arising from or in connection with
product warranty claims relating to recalls, refunds or returns of any products
of the Foreign Industrial Distribution Business sold or distributed by the
Foreign Subsidiaries prior to the Closing Date."
5. Amendment to Section 1.1(a). Section 1.1(a) of the Purchase
---------------------------
Agreement is hereby amended by adding the following subparagraph after
subparagraph 1.1(a)(xi) thereof:
"(xii) all samples, wherever located, of Seller relating exclusively to
the Industrial Distribution Business or, if any, the Foreign Industrial
Distribution Business."
6. Amendment to Schedule 1.1(a)(iii). Schedule 1.1(a)(iii) to the
---------------------------------
Disclosure Statement is hereby deleted and replaced in its entirety with Annex I
attached hereto.
7. Amendment to Section 1.1(a)(iv) and Schedule 1.1(a)(iv). The
-------------------------------------------------------
following shall replace Section 1.1(a)(iv) of the Purchase Agreement:
(iv) subject to paragraph 1.8 hereof, all rights and benefits of
Seller in, to and under all licenses, contracts, customer pricing
agreements and other written understandings, agreements, commitments
and purchase orders with all of the Industrial Customers and others
relating exclusively to the operation of the Industrial Distribution
Business or by which any of the Subject Assets are specifically bound,
including, without limitation, all leases for the use of personal
property relating exclusively to the operation of the Industrial
Distribution Business and to which Seller is a party or by which any
of the Subject Assets are specifically bound, but excluding contracts
and other arrangements with suppliers to the Industrial Distribution
Business (collectively, the "Contracts");
4
<PAGE>
Schedule 1.1(a)(iv) to the Disclosure Statement is hereby deleted.
8. Amendment to Schedule 1.1(a)(vii). Schedule 1.1(a)(vii) to the
---------------------------------
Disclosure Statement is hereby deleted and replaced in its entirety with Annex
II attached hereto.
9. Amendment to Section 1.1(a)(viii). The following shall replace
---------------------------------
Section 1.1(a)(viii) of the Purchase Agreement:
"(viii) all domestic trade accounts receivable of Seller arising
exclusively from the sale by the Industrial Distribution Business of
general laboratory equipment and supplies prior to the Closing Date (the
"Industrial Accounts Receivable");"
10. Amendment to Section 1.1(b)(x). The following shall replace
------------------------------
Section 1.1(b)(x) of the Purchase Agreement:
"(x) Except for software specifically listed on Schedule 1.1(a)
hereto, any of Seller's rights in any computerized records or other
computer software, including Source 2000 and other CD-ROM technology,
utilized by Seller in connection with the Industrial Distribution
Business."
11. Amendment to Section 1.1(b)(xvii). The following shall replace
---------------------------------
Section 1.1(b)(xvii) of the Purchase Agreement:
"(xvii) all the inventories of Seller, regardless of whether such
inventories relate to the Industrial Distribution Business, except the
Foreign Inventory."
12. Amendment to Section 1.3. The following shall replace Section
------------------------
1.3 of the Purchase Agreement:
"1.3 Excluded Liabilities
Notwithstanding anything to the contrary contained herein but except
to the extent specifically set forth in paragraphs 1.2 and 1.13 hereof, Buyer
shall not have any responsibility and shall not assume or in any way be liable
or responsible to Seller, the Foreign Subsidiaries or any other person for, and
Seller and the Foreign Subsidiaries shall retain the liability in respect of,
all liabilities, obligations and debts of Seller and the Foreign Subsidiaries
which relate to the Industrial Distribution Business or the Foreign Industrial
Distribution Business or the Subject Assets arising from the conduct of the
Industrial Distribution Business or the Foreign Assets arising from the conduct
of the Foreign Industrial Distribution Business prior to the Closing, whenever
arising and whether primary or secondary, direct or indirect, absolute or
contingent, known or unknown, contractual, tortious or otherwise, except for the
Assumed Liabilities and the Foreign Assumed
5
<PAGE>
Liabilities (collectively, the "Excluded Liabilities"). Without limiting the
foregoing, the Excluded Liabilities shall include without limitation: (i) tax
liabilities or obligations of Seller or any Foreign Subsidiary with respect to
any period prior to the Closing, (ii) liabilities or obligations of Seller or
any Foreign Subsidiary for withholding, unemployment, social security or payroll
taxes with respect to any period prior to the Closing, (iii) liabilities or
obligations of Seller or any Foreign Subsidiary for salary, wages, pension and
profit sharing expenses accrued with respect to any period prior to the Closing,
(iv) liabilities or obligations relating in any way to any violation by Seller
of (or non-compliance by Seller with) the bulk sales act of any state, (v)
liabilities of Seller or any Foreign Subsidiary for all claims for health care
and other welfare benefits (it being understood that this clause shall not be
deemed to affect Section 8 hereof), (vi) liabilities resulting from the failure
of Seller or any Foreign Subsidiary to provide health continuation coverage as
required by the Internal Revenue Code of 1986, as amended, and ERISA (as defined
in paragraph 2.16 hereof), (it being understood that this clause shall not be
deemed to affect Section 8 hereof), (vii) liabilities of Seller arising out of a
violation by Seller or any Foreign Subsidiary of any Law (as defined in
paragraph 13.1 hereof), including without limitation Laws relating to health and
safety, (viii) liabilities of Seller or any Foreign Subsidiary incurred for the
costs and expenses of negotiating and consummating the transactions contemplated
by this Agreement, (ix) tort liabilities of Seller or any Foreign Subsidiary
arising in connection with products sold or actions taken by Seller or any
Foreign Subsidiary prior to the Closing, (x) claims arising under any Contract
not included in the Subject Assets or Foreign Assets, (xi) claims based upon
Seller's or any Foreign Subsidiary's performance prior to the Closing or
Seller's or any Foreign Subsidiary's failure to perform any obligation required
to be performed prior to the Closing, (xii) all liabilities and obligations of
Seller or any Foreign Subsidiary in respect of trade payables arising from the
purchase of products and/or inventory used in or sold by the Industrial
Distribution Business and (xiii) all liabilities and obligations of Seller or
any Foreign Subsidiary for customer rebates with respect to any period prior to
the Closing regardless of when actually payable. The assumption of the Assumed
Liabilities and the Foreign Assumed Liabilities by Buyer hereunder shall not
enlarge any rights of third parties under contracts or arrangements with Buyer,
Seller or any Foreign Subsidiary and nothing herein shall prevent any party from
contesting in good faith with any third party any of said Assumed Liabilities or
said Foreign Assumed Liabilities."
13. Amendment to Section 1.4. The following shall replace Section
------------------------
1.4 of the Purchase Agreement:
"1.4 Purchase Price and Payment
(a) Amount Payable. In consideration of the sale by Seller to Buyer
--------------
of the Subject Assets and the sale by the Foreign
6
<PAGE>
Subsidiaries to Buyer of the Foreign Assets and the satisfaction of all of the
conditions contained herein, Buyer shall at the Closing deliver to Seller
$399,561,900 by wire transfer of immediately available funds (such amount being
herein referred to as the "Base Purchase Price"). In addition to the Base
Purchase Price, Buyer shall pay to Seller the sum of $27,313,958 (the
"Installment Payment") in equal daily installments over the 52 days immediately
following the Closing Date. The Base Purchase Price and the Installment Payment
are herein referred to together as the "Purchase Price." The Purchase Price
shall be subject to adjustment as provided for herein.
(b) Closing Statement of Assets and Liabilities.
-------------------------------------------
(i) As soon as practicable, but in any event within 90 days after
the Closing, Seller will cause to be prepared and delivered to Buyer a
statement of assets and liabilities of the Industrial Distribution
Business and the Foreign Industrial Distribution Business (the
"Closing Statement of Assets and Liabilities") reflecting the Subject
Assets, the Foreign Assets, the Assumed Liabilities and the Foreign
Assumed Liabilities as of the Closing Date.
(ii) The Closing Statement of Assets and Liabilities shall be
prepared from the books and records of Seller relating to the
Industrial Distribution Business and the Foreign Industrial
Distribution Business in a manner consistent with that of the
statement of assets and liabilities of the Industrial Distribution
Business as of March 31, 1995 attached as Schedule 1.4(b)(ii) (the
"Pre-Closing Statement of Assets and Liabilities"). Buyer shall
cooperate with Seller in the preparation of the Closing Statement of
Assets and Liabilities to the extent reasonably requested by Seller.
The items reflected on such Closing Statement of Assets and
Liabilities shall be calculated in accordance with generally accepted
accounting principles ("GAAP"), including an allowance for
uncollectible Industrial Accounts Receivable, as applied in a manner
consistent with the Pre-Closing Statement of Assets and Liabilities,
except that the calculation of Industrial Accounts Receivable shall
exclude any reserves for price adjustments, billing errors and
returns, and except further that all Foreign Inventory shall be valued
in accordance with the method described in Section 2.19 hereof. Buyer
and Seller acknowledge that no value shall be given on such statement
to any goodwill. Buyer and Seller shall have full access to the
accounting records from which the Closing Statement of Assets and
Liabilities will be
7
<PAGE>
derived and may, at the option of either of them and at their own
expense, have representatives present to observe any part of the
preparation of the Closing Statement of Assets and Liabilities or any
other matter relating thereto.
(iii) Subject to subparagraph 1.4(b)(iv), the Closing
Statement of Assets and Liabilities delivered by Seller to Buyer shall
be final, binding and conclusive on the parties hereto for all
purposes of this Agreement and shall provide the basis for determining
(1) the liabilities and obligations of Seller to be assumed pursuant
to paragraph 1.2, (2) the liabilities and obligations of the Foreign
Subsidiaries to be assumed pursuant to paragraph 1.13 and (3) the
adjustments (if any) specified in subparagraph 1.4(c).
(iv) (A) Buyer, at its own expense, may conduct an audit, review
or other report of the Closing Statement of Assets and Liabilities,
including causing any nationally recognized firm of independent public
accountants designated by Buyer and reasonably acceptable to Seller
which, for purposes hereof, shall include Ernst & Young L.L.P
("Buyer's Accountants") to perform such audit, review or other report.
Buyer may dispute the Closing Statement of Assets and Liabilities, but
only on the basis that the items on the Closing Statement of Assets
and Liabilities were not calculated in accordance with GAAP as applied
in a manner consistent with the Pre-Closing Statement of Assets and
Liabilities. Any such dispute shall be initiated by written notice
delivered to Seller within 30 days of Buyer's receipt of the initial
Closing Statement of Assets and Liabilities specifying each disputed
item, the amount thereof and the basis on which such dispute is made.
(B) In the event of such a dispute, Seller and Buyer shall
attempt to reconcile their differences and any written resolution
by them as to any disputed amounts shall be final, binding and
conclusive on the parties, and Seller shall revise the Closing
Statement of Assets and Liabilities in accordance with such
written resolution.
(C) If Seller and Buyer are unable to reach a written
resolution of all disputed items within 20 days after Buyer's
written notice of dispute, Seller and Buyer shall submit the
items remaining in dispute for resolution to a firm of
independent public
8
<PAGE>
accountants having national standing in the United States which
is not then retained by Seller, Buyer or their respective
Affiliates, as mutually selected by Buyer and Seller (the
"Neutral Accounting Firm"). In the event that Seller and Buyer
are unable to agree on the Neutral Accounting Firm, then a
nationally recognized "Big Six" accounting firm will be selected
by lot after eliminating one such firm selected by Seller and one
such firm selected by Buyer. The Neutral Accounting Firm shall,
within 30 days after submission to it of the disputed items,
determine and report in writing to the parties upon such
remaining disputed items in accordance with the provisions
hereof; and such report shall be final, binding and conclusive on
the parties hereto. The fees and disbursements of the Neutral
Accounting Firm shall be allocated between Seller and Buyer in
the same proportion that the aggregate amount of such remaining
disputed items so submitted to the Neutral Accounting Firm that
is unsuccessfully disputed by each (as finally determined by the
Neutral Accounting Firm) bears to the total amount of such
remaining disputed items so submitted. The Neutral Accounting
Firm shall make such determination in its sole discretion,
subject to the terms and conditions of this Agreement; provided,
however, that the amount determined by the Neutral Accounting
Firm in respect of any such remaining disputed item shall not
exceed the highest amount claimed by either of the parties
disputing such item, or be less than the lowest amount claimed by
either of the parties disputing such item. The Closing Statement
of Assets and Liabilities as finally determined in accordance
with subparagraph (b)(iii) or (iv) shall constitute the Closing
Statement of Assets and Liabilities for all purposes of this
Agreement.
(c) Purchase Price Adjustment. In the event that the final
-------------------------
determination of the Closing Statement of Assets and Liabilities indicates that
the amount obtained (the "Closing Date Net Asset Amount") by subtracting (i) the
Assumed Liabilities and the Foreign Assumed Liabilities reflected on the Closing
Statement of Assets and Liabilities from (ii) the Subject Assets and the Foreign
Assets reflected on the Closing Statement of Assets and Liabilities is less than
$72,375,958, the amount of the difference shall be an adjustment in favor of
Buyer to be refunded to Buyer, as a reduction of the Purchase Price, within 10
days of the final determination of such adjustment. In the
9
<PAGE>
event that the final determination of the Closing Statement of Assets and
Liabilities indicates that the Closing Date Net Asset Amount is greater than
$72,375,958, the aggregate amount of the difference shall be an adjustment in
favor of Seller to be paid to Seller, as an increase of the Purchase Price,
within 10 days of the final determination of such adjustment."
14. Amendment to Section 1.6. The following shall replace Section
------------------------
1.6 of the Purchase Agreement:
"1.6 Transfer of Subject Assets and Foreign Assets
(a) At the Closing, Seller shall deliver to Buyer a bill of sale and
assignment, in substantially the form of Exhibit 1.6(a) together with such
additional documents and instruments as may be reasonably requested by Buyer,
transferring to Buyer all of Seller's right, title and interest in, to and under
the Subject Assets. At the Closing, Buyer shall deliver to Seller an assumption
agreement, in substantially the form of Exhibit 1.6(b) and Buyer shall deliver
to Seller appropriate assumption agreements, each in substantially the form of
Exhibit 1.6(d), together with such additional documents and instruments as may
be reasonably requested by Seller, evidencing Buyer's agreement to pay, perform
and discharge the Assumed Liabilities.
(b) On such date or dates as Buyer shall specify by five days' written
notice to Seller, but in no event more than 60 days following the Closing,
Seller shall cause to be delivered to Buyer by the Foreign Subsidiary or each of
Foreign Subsidiaries requested by Buyer in such notice or notices, a bill of
sale and assignment, in substantially the form of Exhibit 1.6(c) together with
such additional documents and instruments as may be reasonably requested by
Buyer, transferring to Buyer all of such Foreign Subsidiary's right, title and
interest in, to and under the Foreign Assets. Simultaneously on such date or
dates, Buyer shall deliver to Seller an assumption agreement, in substantially
the form of Exhibit 1.6(d), together with such additional documents and
instruments as may be reasonably requested by Seller, for each of the Foreign
Subsidiaries requested by Buyer in such notice or notices, evidencing Buyer's
agreement to pay, perform and discharge the Foreign Assumed Liabilities."
15. Amendment to Section 1.7. The following shall replace Section
------------------------
1.7 of the Purchase Agreement:
"1.7 Delivery of Records and Contracts
At the Closing, or at such later time as Buyer may direct, subject to
Paragraph 1.9, Seller shall deliver or cause to be delivered to Buyer all of the
Contracts and Foreign Contracts except contracts or other arrangements with
suppliers to the Industrial Distribution Business and the Foreign Industrial
Distribution Business; Seller shall also deliver to Buyer at the Closing, or at
such later time as Buyer may direct, all of Seller's business records, books and
other data relating
10
<PAGE>
exclusively to the Industrial Distribution Business or the Foreign Industrial
Distribution Business and forming part of the Subject Assets or the Foreign
Assets, and Seller shall take all requisite steps to put Buyer in actual
possession and operating control of the Subject Assets and the Industrial
Distribution Business and the Foreign Assets and the Foreign Industrial
Distribution Agreement. After the Closing, (i) Buyer shall afford to Seller,
and its Affiliates and their accountants and attorneys, for all reasonable
business purposes after the Closing, reasonable access to the books and records
of Seller delivered to Buyer under this Section and shall permit Seller, at
Seller's expense, to make extracts and copies therefrom and (ii) Seller shall
afford to Buyer, and its Affiliates and their accountants and attorneys, for all
reasonable business purposes related to the operation of the Industrial
Distribution Business and the Foreign Industrial Distribution Business after the
Closing Date, reasonable access to the books and records of Seller relating to
the Industrial Distribution Business and the Foreign Industrial Distribution
Business which are retained by Seller and the Foreign Subsidiaries pursuant to
paragraph 1.1(b) or paragraph 1.12(b) and shall permit Buyer, at Buyer's
expense, to make copies and extracts therefrom. The parties each covenant to
take such care in keeping and storing all such books and records retained by
such party as would a prudent owner thereof. Such books and records shall be
retained for a period of six years after the Closing Date or, in the case of
books and records required to support tax returns and tax audits, ten years
after the Closing Date, and thereafter, as the case may be, shall only be
destroyed after first giving written notice to the other party of such intention
to destroy and providing a reasonable opportunity, at such other party's
expense, to segregate and remove such books and records, if any, as such other
party may select."
16. Amendment to Section 1.8. The following shall replace Section
------------------------
1.8 of the Purchase Agreement:
"1.8 Non-Assignable Contracts
(a) Non-Assignability. Nothing in this Agreement will constitute a
-----------------
transfer or an attempted transfer of any Contract or Foreign Contract which is
not capable of being transferred without the consent, approval, waiver or
novation of a third person or entity, or with respect to which such transfer or
attempted transfer would constitute a breach thereof or a violation of any Law,
other than those for which such consents, approvals, waivers or novations have
been obtained by Seller or the Foreign Subsidiaries prior to the Closing Date
(such nontransferable Contracts, Foreign Contracts and permits being
collectively referred to herein as "Unassigned Contracts").
(b) Consents, Approvals, etc. Notwithstanding anything contained in
------------------------
this Agreement to the contrary, Seller and the Foreign Subsidiaries shall not be
obligated to transfer to Buyer any of its rights and obligations in and to any
Unassigned
11
<PAGE>
Contract without first having obtained all consents, approvals, waivers and
novations necessary for such transfer under the terms of such Unassigned
Contract or applicable law, at which time such Unassigned Contract will, without
further action, be deemed to be transferred to Buyer.
(c) If Consents, Approvals, etc. Are Not Obtained. Prior to the
---------------------------------------------
Closing Date, Seller and the Foreign Subsidiaries shall use their commercially
reasonable efforts to obtain the consents, approvals, waivers and novations
referred to in subparagraph 1.8(a), provided that the only consents required
prior to Closing are the consents, if any, referred to in subparagraph 7.1(f).
To the extent that the consents, approvals, waivers and novations referred to in
subparagraph 1.8(a) are not obtained by Seller and the Foreign Subsidiaries,
Seller and the Foreign Subsidiaries will, as to each Unassigned Contract, use
their commercially reasonable efforts after the Closing Date to provide to Buyer
the full benefits of such Unassigned Contracts, cooperate in any lawful
arrangement designed to provide such benefits to Buyer without incurring any
obligation to any third party, and enforce, at the request of Buyer, at the cost
of and for the account of Buyer, any rights of Seller and the Foreign
Subsidiaries arising from any such Unassigned Contract (including, without
limitation, the right to elect to terminate in accordance with the terms thereof
upon the request of Buyer)."
17. Amendment to Section 1.9. The following shall replace Section
------------------------
1.9 of the Purchase Agreement:
"1.9 Further Assurances
Seller and the Foreign Subsidiaries from time to time after the
Closing at the request of Buyer and without further consideration shall execute
and deliver such further instruments of transfer and assignment and take such
other action as Buyer may reasonably require to more effectively transfer and
assign to, and vest in, Buyer good title, subject to Permitted Encumbrances (as
defined in paragraph 13.1 hereof), to each of the Subject Assets and the Foreign
Assets."
18. Amendment to Section 1.10. The following shall replace Section
-------------------------
1.10 of the Purchase Agreement:
"1.10 Allocation of Purchase Price
The Purchase Price shall be allocated among the Subject Assets and the
Foreign Assets as set forth on Schedule 1.10 hereto (the "Allocation"). The
Allocation shall be adjusted downward or upward, as the case may be, as
appropriate to reflect any adjustments in the Purchase Price pursuant to
paragraph 1.4(c). Seller and Buyer agree that they shall file Internal Revenue
Service Form 8594, and all income tax returns and other documents that they may
be required to file on a basis that is consistent with the Allocation. Buyer
and Seller each agree to provide the other promptly with any other information
required to
12
<PAGE>
complete Form 8594. Buyer and Seller shall give prompt notice to each other of
the commencement of any tax audit or the assertion of any proposed deficiency or
adjustment by any taxing authority which challenges the Allocation."
19. Amendment to Schedule 1.10. Schedule 1.10 to the Disclosure
--------------------------
Statement is hereby deleted and replaced in its entirety with Annex III attached
hereto.
20. Amendment to Section 1.11. The following shall replace Section
-------------------------
1.11 of the Purchase Agreement:
"1.11 Sales and Transfer Taxes
Buyer shall be liable for and shall pay at the time of Closing all
federal, foreign and state sales taxes and all other sales taxes, duties,
documentary stamps, transfer taxes, registration fees and charges or other like
charges (the "Sales and Transfer Taxes") properly payable upon and in connection
with the assignment and transfer of the Subject Assets by Seller and the Foreign
Assets by the Foreign Subsidiaries to Buyer hereunder. If any Sales and
Transfer Taxes become payable subsequent to Closing, Buyer shall be liable and
shall pay immediately upon the imposition of such Sales and Transfer Taxes."
21. Amendment to Schedule 2.6. Schedule 2.6 to the Disclosure
-------------------------
Statement is hereby deleted in its entirety and replaced with Annex X hereto.
22. Amendment to Section 2.7. The following shall replace Section
------------------------
2.7 of the Purchase Agreement:
"2.7 Contracts
The Disclosure Statement sets forth (i) the Contracts with the top
four Industrial Customers by dollar volume for the first six months of 1994 and
(ii) any Contracts with the top 20 suppliers to the Industrial Distribution
Business by dollar volume for the year ended December 31, 1994 which obligate
Seller to purchase specified levels of products on a "take or pay,"
"requirements" or similar basis. None of the Foreign Contracts would constitute
(i) a Contract with one of the top four Industrial Customers of Baxter
Healthcare Corporation and its Affiliates by dollar volume for the first six
months of 1994 or (ii) a Contract with the top 20 suppliers to the Industrial
Distribution Business of Baxter Healthcare Corporation or its Affiliates by
dollar volume for the year ended December 31, 1994. Except as set forth in the
Disclosure Statement, each of the Contracts listed or described in said Schedule
is in full force and effect and constitutes a valid and binding obligation of
Seller and, to Seller's knowledge, the other party or parties thereto. Neither
Seller nor, to Seller's knowledge, any other party to any such Contract has
breached or improperly terminated any such Contract, or is in default under any
such Contract, and,
13
<PAGE>
to the knowledge of Seller, there exists no condition or event which, after
notice or lapse of time or both, would constitute any such breach, termination
or default."
23. Amendment to Section 2.19. The following shall be added as
-------------------------
Section 2.19 of the Purchase Agreement:
"2.19 Inventory
All inventory (including, without limitation, all packaging) of the
Foreign Subsidiaries to be included on the Closing Statement of Assets and
Liabilities will be valued at the respective Foreign Subsidiary's then current
merchandise file costs and will be in new or saleable condition. The book value
of any excess and/or no-move Foreign Inventory shall be calculated in a manner
consistent with Seller's standard policies, including any associated reserves
for inventory write-downs."
24. Amendment to Section 5.6. The following shall replace Section
------------------------
5.6 of the Purchase Agreement.
"5.6 Release of Guaranties
Buyer agrees to be substituted in all respects for Seller or any of
its Affiliates, effective as soon as practicable after the Closing, in respect
of all obligations of Seller or any of its Affiliates under each of the
guaranties and letters of credit set forth in the Disclosure Statement
(collectively, the "Guaranties"). Buyer shall indemnify and hold harmless
Seller and its Affiliates against any and all liabilities under or with respect
to each of the Guaranties with respect to which substitution is not effected."
25. Amendment to Schedule 5.6. Schedule 5.6 to the Disclosure
-------------------------
Statement is hereby deleted and replaced in its entirety with Annex IV attached
hereto.
26. Amendment to Exhibit 7.1(j). Exhibit 7.1(j) of the Purchase
---------------------------
Agreement is hereby deleted in its entirety and replaced with Annex VIII.
27. Amendment to Exhibit 7.1(k). Exhibit 7.1(k) of the Purchase
---------------------------
Agreement is hereby deleted in its entirety and replaced with Annex IX hereto.
28. Amendment to Section 13.1. The following definitions shall be
-------------------------
added in the appropriate alphabetical order:
"Distributed Products" shall have the meaning set forth in Section
1.3.2 of the Services Agreement.
"Foreign Excluded Assets" shall mean any assets, properties or
interests in assets or properties of the nature described in: (1) clauses (i)
through (xvii) of Section 1.1(b)
14
<PAGE>
of this Agreement regardless of whether such assets, properties or interests are
owned or held by Seller, the Foreign Subsidiaries or any of their affiliates; or
(2) clauses (i) through (iii) of Section 1.12 of this Agreement for those
assets, properties or interests relating exclusively to Ireland."
"Foreign Industrial Distribution Business" shall mean the business of
the Foreign Subsidiaries in distributing to Industrial Customers general
laboratory equipment and supplies, it being understood that the Industrial
Distribution Business shall not be deemed to include the biomedical group of
Baxter Healthcare Corporation's Hospital Supply/Scientific Products U.S.
Distribution Division, any business, products or assets that historically have
not been included within the financial statements of Baxter Healthcare
Corporation's Industrial and Life Sciences Division, or any business products or
assets constituting Foreign Excluded Assets."
"Foreign Subsidiaries" shall mean Baxter Healthcare Limited, a United
Kingdom corporation; Baxter Export Corporation, a Nevada corporation; Baxter
Healthcare Pty. Ltd., an Australia corporation; Baxter, S.A., a Belgium
corporation; Baxter S.A., a France corporation; Baxter Deutschland GmbH, a
Germany corporation; Baxter S.p.A., an Italy corporation; Baxter Healthcare Far
East Pte Ltd., a Singapore corporation; Baxter A.G., a Switzerland corporation;
Laboratorios Baxter S.A., a Delaware corporation; Baxter S.A., a Spain
corporation; and Baxter Healthcare Ltd. Taiwan, a Taiwan corporation.
"Ireland" shall mean the Republic of Ireland and Northern Ireland.
29. Amendment to Section 13.2. The following cross-references shall
-------------------------
be added in the appropriate alphabetical order:
<TABLE>
<CAPTION>
"Term Reference
---- ---------
<S> <C>
Distributed Products 13.1
Foreign Assets 1.12
Foreign Assumed Liabilities 1.13
Foreign Contracts 1.12
Foreign Excluded Assets 13.1
Foreign Industrial Distribution Business 13.1
Foreign Inventory 1.12
Foreign Purchase Price 1.4(d)
Foreign Subsidiaries 13.1"
</TABLE>
30. Amendment to Exhibit 1.6(b). Exhibit 1.6(b) of the Purchase
---------------------------
Agreement is hereby deleted in its entirety and replaced with Annex VII hereto.
31. Addition of Exhibit 1.6(c). Annex V hereto shall be added as
--------------------------
Exhibit 1.6(c) of the Purchase Agreement.
15
<PAGE>
32. Addition of Exhibit 1.6(d). Annex VI hereto shall be added as
--------------------------
Exhibit 1.6(d) of the Purchase Agreement.
33. Corporate Authority. Each of Seller and Buyer hereto represents
-------------------
and warrants to the other that (a) it has the requisite corporate power and
authority to execute, deliver and perform this Amendment, (b) its execution,
delivery and performance of this Amendment has been duly authorized by all
necessary corporate action on the part of such party, (c) it has duly executed
and delivered this Amendment and (d) assuming the due authorization, execution
and delivery of this Amendment by the other party hereto, this Amendment
constitutes its valid and binding obligation, enforceable against such party in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or similar laws from time to time in effect that affect
creditors' rights generally and by legal and equitable limitations on the
availability of specific remedies (whether at law or in equity).
34. Governing Law. This Amendment shall be governed by and construed
-------------
in accordance with the internal laws of the State of Illinois, without giving
effect to the principles of conflicts of laws thereof.
35. Execution in Counterparts. This Amendment may be executed in
-------------------------
counterparts, each of which shall be considered an original instrument, but both
of which shall be considered one and the same agreement, and shall become
binding when one counterpart has been signed by each of the parties hereto and
delivered to the other party hereto (including by means of facsimile
transmission of signature pages).
* * * * * * *
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed as of the day and year first above written.
VWR CORPORATION
By /s/ Jerrold B. Harris
------------------------------
Jerrold B. Harris
President and CEO
BAXTER HEALTHCARE CORPORATION
By /s/ David N. Jonas
------------------------------
David N. Jonas
Vice President
Strategic Initiatives
EM LABORATORIES, INCORPORATED
By /s/ Stephen J. Kunst
------------------------------
Stephen J. Kunst
Vice President and General
Counsel
17
<PAGE>
Exhibit 4(b)
_________________________________________________________________
AMENDMENT NUMBER ONE TO THE STANDSTILL AGREEMENT
_________________________________________________________________
by and among
VWR CORPORATION,
EM INDUSTRIES, INCORPORATED
and
EM LABORATORIES, INCORPORATED
September 15, 1995
<PAGE>
AMENDMENT NUMBER ONE TO THE STANDSTILL AGREEMENT
This Amendment Number One to the Standstill Agreement (the
"Amendment") made this 15th day of September, 1995 by and among VWR Corporation
("VWR"), a Pennsylvania corporation, EM Industries, Incorporated ("EMI"), a New
York corporation, and EM Laboratories, Incorporated ("EM Laboratories"), a New
York corporation,
W I T N E S S E T H:
WHEREAS, EMI and VWR entered into a Standstill Agreement dated
February 27, 1995 (the "Standstill Agreement");
WHEREAS, pursuant to an Assignment and Assumption Agreement dated
April 13, 1995, and in conformity with Section 10.4 of the Standstill Agreement,
EMI assigned its rights and delegated its duties and obligations under the
Standstill Agreement to EM Laboratories and EM Laboratories accepted such
assignment and delegation; and WHEREAS, accordingly, all references to EMI in
the Standstill Agreement refer to EM Laboratories as assignee as well as to EMI,
and EMI and EM Laboratories are jointly and severally liable for the performance
of the obligations of EM Laboratories under the Standstill Agreement;
WHEREAS, Section 10.5 of the Standstill Agreement provides that the
Standstill Agreement may be amended by a written agreement signed by VWR and
EMI; and
WHEREAS, VWR, EMI and EM Laboratories have agreed to amend the
Standstill Agreement as provided herein,
NOW THEREFORE, in consideration of the mutual agreements and
covenants set forth herein, and for other good and valuable consideration, the
parties agree that the Standstill Agreement shall be amended as of the date
hereof as follows:
SECTION. I. To the Recitals there shall be added Recital D, which shall read in
its entirety as follows:
"D. Company and EMI have entered into a Common Share and Debenture
Purchase Agreement dated May 24, 1995, pursuant to which, among other
things, Company shall issue and sell to EMI additional Common Stock (as
defined below) of Company and a subordinated debenture (the
'Debenture')."
SECTION II. To Article 1 there shall be added the following sentence, which
shall be set forth immediately after the caption "DEFINITIONS":
"Capitalized terms used but not defined herein shall have the meaning set
forth, as the case may be, in the Common Share and Warrant Purchase
Agreement (as
<PAGE>
defined below) or the Common Share and Debenture Purchase Agreement (as
defined below)."
SECTION III. To Article 1 there shall be added the following definitions, the
other sections of Article 1 being renumbered accordingly, which new definitions
shall read in their entirety as follows:
"1.3. Agreement. 'Agreement' means this Standstill Agreement, as it may
---------
be from time to time modified, amended, altered or supplemented by written
agreement of the parties as provided in Section 10.5."
"1.10. Common Share and Debenture Purchase Agreement. 'Common Share and
---------------------------------------------
Debenture Purchase Agreement' means the Common Share and Debenture Purchase
Agreement, dated May 24, 1995, between Company and EMI."
"1.31. Second Closing Date. 'Second Closing Date' means the date the
-------------------
acquisition of the Common Stock and Debenture by Purchaser is consummated
pursuant to the terms of the Common Share and Debenture Purchase
Agreement."
SECTION IV. Section 1.10 of the Agreement shall be renumbered Section 1.12
shall be amended to read, in its entirety, as follows:
"1.12. Common Stock Equivalents. 'Common Stock Equivalents' means the sum
------------------------
of the following, determined at any time during the term of this Agreement:
(a) the total number of shares of issued and outstanding Common Stock, plus
(b) the number of votes which may be cast for the election of directors
(whether directly or by formula) as a result of ownership of any Voting
Securities other than Common Stock; provided, however, that the votes
described in (b) above shall not be included in Common Stock Equivalents
until the Voting Securities other than Common Stock are able to be voted
for the election of directors."
SECTION V. The second sentence of Section 2.2 shall be amended to read in its
entirety as follows:
"The 'Percentage Limitation' shall be 49.89% of the Common Stock
Equivalents."
SECTION VI. Section 2.7(e) shall be amended to read in its entirety as
follows:
"(e) If Company does not elect to purchase shares from Purchaser, or
elects to purchase only a portion of the shares under Section 2.7(b),
Purchaser shall be entitled to retain the shares over the Percentage
Limitation but the Percentage Limitation shall remain 49.89%."
2
<PAGE>
SECTION VII. Section 2.10 shall be amended to read in its entirety as follows:
"2.10 Requirements for Tender Offers. Whenever Purchaser shall make a
------------------------------
tender offer for shares of Common Stock under Section 2.9:
"(a) Purchaser shall not commence any such tender offer unless acceptance
of Purchaser's offer shall have been recommended to the shareholders by a
majority vote of the Unaffiliated Directors; and
"(b) Purchaser may not close the acquisition of the tendered shares
unless all of the following requirements have been satisfied:
"(i) Purchaser's offer shall have been made to all holders of
Common Stock;
"(ii) Purchaser shall offer to purchase for cash all shares
tendered; and
"(iii) Purchaser's offer shall have been accepted by shareholders
owning not less than a majority of the outstanding Common Stock.
"(c) With respect to calculating whether Purchaser's offer has been
accepted by shareholders owning a majority of the outstanding Common Stock,
Common Shares beneficially owned by Purchaser shall be excluded from the
outstanding Common Stock."
SECTION VIII. Section 4.1(a) shall be amended so that the legend set forth
therein shall read in its entirety as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES
LAW AND ARE SUBJECT TO THE RESTRICTIONS ON DISPOSITION SET FORTH IN AND TO
THE OTHER PROVISIONS OF A COMMON SHARE AND WARRANTY PURCHASE AGREEMENT,
DATED FEBRUARY 27, 1995, BETWEEN VWR CORPORATION AND EM INDUSTRIES,
INCORPORATED, AND A COMMON SHARE AND DEBENTURE PURCHASE AGREEMENT, DATED
MAY 24, 1995, BETWEEN VWR CORPORATION AND EM INDUSTRIES, INCORPORATED, AND
A STANDSTILL AGREEMENT, DATED FEBRUARY 27, 1995, BETWEEN VWR CORPORATION
AND EM INDUSTRIES, INCORPORATED, AS AMENDED ON SEPTEMBER 15, 1995. COPIES
OF SUCH AGREEMENTS ARE ON FILE AT THE RESPECTIVE OFFICES OF VWR CORPORATION
AND EM INDUSTRIES INCORPORATED."
SECTION IX. Section 6.1 shall be amended to read in its entirety as follows:
3
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"6.1. Size of Board; Proportionate Representation. A. On or before the
-------------------------------------------
Second Closing Date, the Company shall take all requisite action, including
without limitation increasing or decreasing the number of seats on the
Board, to grant EMI the right, at EMI's option, to nominate such number of
directors to the Board as shall ensure that EMI shall have the right to
maintain Board representation at all times commensurate with the aggregate
proportion of Common Shares owned by EMI and its Affiliates.
"B. At any time when EMI shall exercise its option to appoint directors,
as described in paragraph (a) above, the Company shall take all requisite
action to cause the election, effective immediately, of the individuals
designated by EMI to fill the number of seats on the Board that shall be
proportionate to the aggregate Common Share ownership of EMI and its
Affiliates."
SECTION X. Section 6.2 shall be amended to read in its entirety as follows:
"6.2 Terms. EMI shall advise Company as necessary, from time to time,
-----
which of the Affiliated Directors shall have a term expiring at the second
annual meeting of shareholders of Company next following the Second Closing
Date, and which shall have a term expiring at the third such annual
meeting. After the term of any Affiliated Director expires, his or her
successor shall serve a term of three (3) years as provided in the Restated
Articles of Incorporation of Company."
SECTION XI. Section 8.1(a) shall be amended to read in its entirety as
follows:
"(a) Purchaser's completion of a tender offer in accordance with Section
2.10, provided, that Purchaser's offer shall have been recommended to the
shareholders by a majority vote of the Unaffiliated Directors and shall
have been accepted by shareholders owning not less than a majority of the
outstanding Common Stock, as provided in such Section; or".
SECTION XII. The proviso set forth in the second sentence of Section 10.4
shall be amended to read in its entirety as follows:
". . . provided, however, that EMI may assign its rights and delegate its
duties and obligations under this Agreement without such consent to an
Affiliate of EMI, which Affiliate (referred to herein as the "Assignee")
may, following duly authorized execution and delivery of an agreement
assuming the obligations of EMI hereunder reasonably satisfactory to
Company, accept title to the Shares and/or Warrant Shares."
4
<PAGE>
SECTION XIII. This Amendment shall be exclusively governed by, construed in
accordance with, and interpreted according to the substantive law of the
Commonwealth of Pennsylvania without giving effect to the principles of conflict
of laws.
SECTION XIV. This Amendment may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, VWR, EMI and EM Laboratories have caused this
Amendment to be executed on the date first above written.
VWR CORPORATION
By:/s/ Jerrold B. Harris
-------------------------------------
Name:
Title:
EM INDUSTRIES, INCORPORATED
By:/s/ Walter Zywottek
-------------------------------------
Name:
Title:
EM LABORATORIES, INCORPORATED
By:/s/ Walter Zywottek
-------------------------------------
Name:
Title:
6
<PAGE>
Exhibit 4(c)
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREUNDER. THIS DEBENTURE IS NOT TRANSFERABLE EXCEPT TO AN
AFFILIATE OF EM INDUSTRIES, INCORPORATED. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A COMMON SHARE AND
DEBENTURE PURCHASE AGREEMENT DATED MAY 24, 1995 AND A STANDSTILL
AGREEMENT DATED FEBRUARY 27, 1995, AS AMENDED SEPTEMBER 15, 1995
(COPIES OF WHICH AGREEMENTS ARE ON FILE WITH THE SECRETARY OF THE
COMPANY) WHICH PROVIDE, AMONG OTHER THINGS, FOR CERTAIN
RESTRICTIONS ON TRANSFER THEREOF. ANY SALE OR OTHER TRANSFER NOT
IN COMPLIANCE WITH SUCH AGREEMENTS SHALL BE VOID.
VWR CORPORATION
SUBORDINATED DEBENTURE
DUE SEPTEMBER 15, 2005
September 15, 1995 $135,000,000.00
No. 1
VWR CORPORATION, a Pennsylvania corporation (hereinafter called the
"Company"), for value received, hereby promises, subject to Article 3 hereof, to
pay to the Holder (as defined below) on September 15, 2005 the principal amount
of One Hundred Thirty-five Million and 00/100's Dollars ($135,000,000.00), in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for public and private debts, at the principal office of
the Company, and, subject to Article 3 hereof, to pay interest on the unpaid
portion of said principal amount on each Interest Payment Date (as defined
below) commencing on December 1, 1995, at said office, pursuant to the terms and
conditions of, and in the manner described in, Section 2.1 hereof.
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. The terms defined in this Article whenever used
-----------
in this Debenture shall have the respective meanings hereinafter specified.
(a) "Administrative Agent" shall have the meaning set forth in the Bank
Credit Agreement.
(b) "Affiliate" shall have the meaning set forth in the Purchase
Agreement.
(c) "Bank Credit Agreement" shall mean that certain Credit Agreement,
dated as of September 14, 1995, by and among the Company, VWR Scientific of
Canada Ltd., Scientific Holdings Corp. and VWR Scientific International
Corporation, as Borrowers; the several lenders from time to time
<PAGE>
parties thereto; CoreStates Bank, N.A., as Administrative Agent and Collateral
Agent; Bank of America National Trust and Savings Association, as Syndication
Agent; PNC Bank, National Association as Documentation Agent, BA Securities,
Inc., as Arranger; and Seattle-First National Bank, as Lead Manager, as the same
may be amended, supplemented or otherwise modified from time to time.
(d) "Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, 11
U.S.C. et seq., or any successor statute thereto.
(e) "Commitment" shall have the meaning set forth in the Bank Credit
Agreement.
(f) "Common Shares" shall mean the common shares, par value $1.00, of the
Company.
(g) "Company" shall mean VWR Corporation, a Pennsylvania corporation, and
any successor corporation by merger, consolidation, sale or exchange of all or
substantially all of the Company's assets, or otherwise.
(h) "Debenture" shall mean this Subordinated Debenture or such other
Subordinated Debenture or Debentures exchanged therefor as provided in Section
2.2 herein.
(i) "Debenture Shares" shall have the meaning set forth in Section 2.1(b)
herein.
(j) "Deferred Interest" shall have the meaning set forth in Section 2.1(c)
herein.
(k) "Event of Default" shall have the meaning set forth in Section 7.1
herein.
(l) "Final Debenture Share Delivery Date" shall have the meaning set forth
in Section 2.1(c) herein.
(m) "Holder" shall mean EM Industries, Incorporated or any Affiliate of EM
Industries, Incorporated to which this Debenture is issued or subsequently
transferred in accordance with the terms provided herein.
(n) "Indebtedness" of any Person shall mean, without duplication:
(1) all indebtedness of such Person for borrowed money;
(2) all obligations of such Person for the deferred purchase price of
property or services (other than trade payables incurred in the ordinary
course of such Person's business);
(3) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments;
(4) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property);
(5) all obligations of such Person as lessee under leases that have
been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases;
2
<PAGE>
(6) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities;
(7) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any capital stock of or
other ownership or profit interest in such Person or any other Person or
any warrants, rights or options to acquire such capital stock;
(8) all Indebtedness of others referred to in clauses (1) through (7)
above guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Indebtedness or to advance or supply
funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment
of such Indebtedness or to assure the holder of such Indebtedness against
loss, (iii) to supply funds to or in any manner invest in the debtor
(including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (iv)
otherwise to assure a creditor against loss; and
(9) all Indebtedness referred to in clauses (1) through (7) above
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
(o) "Insolvency Event" shall have the meaning set forth in Section 3.4.
(p) "Interest Deferral Period" shall have the meaning set forth in Section
2.1(c).
(q) "Interest Payment Date" shall have the meaning set forth in Section
2.1(a).
(r) "Obligor" shall have the meaning set forth in Section 3.1.
(s) "Payment Blockage Notice" shall have the meaning set forth in Section
3.5.
(t) "Payment Blockage Period" shall have the meaning set forth in Section
3.5.
(u) "Person" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
(v) "Purchase Agreement" means the Common Share and Debenture Purchase
Agreement, dated May 24, 1995, between the Company and EM Industries,
Incorporated, as assigned by EM Industries, Incorporated to its wholly owned
subsidiary and Affiliate, EM Laboratories, Incorporated pursuant to an
Assignment and Assumption Agreement dated June 13, 1995.
(w) "Redemption Price" shall have the meaning set forth in Section 2.4.
(x) "Representative" shall mean (i) with respect to obligations under the
Bank Credit Agreement, the Administrative Agent and (ii) with respect to any
other Senior Debt the holder of such Senior Debt or any agent appointed for such
Senior Debt under the instrument under which such Senior Debt arose.
3
<PAGE>
(y) "Restricted Security" shall have the meaning set forth in Section 5.2.
(z) "SEC" shall mean the United States Securities and Exchange Commission.
(aa) "Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as in effect at the
time.
(ab) "Senior Debt" shall mean:
(i) all obligations and liabilities of the Company (whether for or on
account of principal, reimbursement obligations, accrued and unpaid
interest (including without limitation all interest accruing on and after
an Insolvency Event, whether or not such interest is allowed as a claim in
any proceeding or case involving the Company), fees, expenses, indemnities
and other amounts payable under or in connection with the Bank Credit
Agreement and all documents or instruments executed in connection
therewith, whether outstanding on the date of issuance of this Debenture or
hereafter created, assumed or incurred, and shall include all renewals,
extensions, refinancings and refundings thereof from time to time; provided
that, Senior Debt under this clause (i) shall not include any obligations
of the Company for principal or reimbursement obligations to the extent
(but only to the extent) such amounts exceed $300,000,000 in principal
amount in the aggregate (i.e., not including interest, fees, expenses,
indemnities and the like); or
(ii) all obligations and liabilities of the Company under any and all
interest rate protection agreements to the extent such obligations and
liabilities are secured by the collateral documents that secure the
Company's obligations under the Bank Credit Agreement (or any renewal,
extension, refinancing or refunding of the Bank Credit Agreement) and shall
include all renewals, extensions, refinancings and refundings thereof from
time to time.
(ac) "Standstill Agreement" shall mean that certain Standstill Agreement,
dated February 27, 1995, between the Company and EM Industries, Incorporated, as
assigned by EM Industries, Incorporated to its wholly owned subsidiary and
Affiliate, EM Laboratories, Incorporated pursuant to an Assignment and
Assumption Agreement dated April 13, 1995, as such Standstill Agreement was
amended on September 15, 1995.
(ad) "Subsidiary" shall mean any entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are owned
directly or indirectly by the Company.
ARTICLE 2
INTEREST; EXCHANGES AND TRANSFER; REDEMPTION
SECTION 2.1. Payment of Interest.
-------------------
(a) The Company shall pay to the Holder interest, subject to Article 3
hereof, in the form and manner described in this Section (computed on the basis
of a year of 365 or 366 days, as the case may be), on the unpaid principal
amount hereof at the rate of 13% per annum on March 1, June 1, September 1 and
December 1 of each year (subject to paragraphs (b) and (c) below) during the
term of this Debenture (each, an "Interest Payment Date"), commencing on
December 1, 1995.
4
<PAGE>
(b) Beginning on the first Interest Payment Date and on each subsequent
Interest Payment Date occurring on or before the Final Debenture Share Delivery
Date (as defined below), subject to clauses (1) and (2) of this paragraph (b),
the Company shall pay interest to the Holder in the form of the aggregate number
of Common Shares equivalent to the dollar value of the interest due and payable
on such Interest Payment Date (collectively, the "Debenture Shares"), at an
issue price deemed to be $12.44 per share (the "Debenture Share Issue Price"),
until such time (the "Final Debenture Share Delivery Date") as the Company shall
have issued and the Holder shall have received the aggregate number of Debenture
Shares needed to increase the total number of Common Shares held by the Holder
and its Affiliates, taking into account the Holder's receipt of such Debenture
Shares on such date, to 49.89% of the total issued and outstanding Common Shares
on such date.
(1) If, however, the total amount of accrued interest due and payable
on such final Interest Payment Date occurring on or before the Final
Debenture Share Delivery Date exceeds the dollar amount equal to the
product of the total number of Debenture Shares received by the Holder on
such Interest Payment Date times the Debenture Share Issue Price, then such
excess dollar amount of accrued interest shall be deferred and added to the
amount of Deferred Interest (as defined below) and shall become due and
payable and shall be paid by the Company as provided in paragraph (e)
below.
(2) No fractional Common Shares will be issued as Debenture Shares in
connection with the interest payments provided for in this paragraph (b),
but in lieu of such fractional shares, if any, on each Interest Payment
Date occurring before the Final Debenture Share Delivery Date an amount of
interest equal to the product of the applicable fraction multiplied by the
Debenture Share Issue Price shall be deferred and added to the amount of
Deferred Interest (as defined below) and shall become due and payable and
shall be paid by the Company as provided in paragraph (e) below.
(c) On each Interest Payment Date occurring during the time period
subsequent to the Final Debenture Share Delivery Date but prior to the second
anniversary of the issuance of this Debenture (the "Interest Deferral Period"),
the interest due and payable on this Debenture, plus such amounts of deferred
interest, if any, described in clauses (1) and (2) of paragraph (b) above, shall
accrue but shall be deferred (the "Deferred Interest"), and such Deferred
Interest shall become due and payable on September 15, 2005, as described in
paragraph (e) below.
(d) On each Interest Payment Date occurring subsequent to the completion
of the Interest Deferral Period, the Company shall pay to the Holder interest on
the unpaid portion of the principal amount of this Debenture at the interest
rate set forth above in paragraph (a) above at the Company's principal office in
the coin or currency of the United States of America as at the time of payment
shall be legal tender for public and private debts. On September 15, 2005,
subject to paragraph (e) below, all interest that shall have accrued on the
unpaid principal balance of this Debenture subsequent to the final Interest
Payment Date shall become due and payable, and the Company shall pay such
accrued interest to the Holder at the Company's principal office in the coin or
currency of the United States of America as at the time of payment shall be
legal tender for public and private debts.
(e) On September 15, 2005, in addition to the accrued interest described
in the second sentence of paragraph (d) above, all Deferred Interest shall
become due and payable and the Company will pay the Holder the total amount of
Deferred Interest, plus interest thereon at the interest rate set forth above in
paragraph (a) above, at the Company's principal office in the coin or currency
of the United States of America as at the time of payment shall be legal tender
for public and private debts.
5
<PAGE>
(f) If any amount of the principal of, or interest on, this Debenture
shall not be paid for a period of 30 days after the date when due, the Company
shall pay the Holder interest on such overdue amount at a rate equal to the sum
of the interest rate set forth above in paragraph (a) above plus 5% per annum on
the amount thereof from the date when due until such amount shall have been paid
in full.
SECTION 2.2. Exchange and Registration of Transfer of Debentures. The
---------------------------------------------------
Holder may, at its option, surrender this Debenture at the office of the Company
and receive in exchange therefor a Debenture or Debentures, each in the
denomination of $1,000,000.00 or an integral multiple of $1,000,000.00 in excess
thereof, dated as of the date of this Debenture, and payable to such transferee,
or order, as may be designated by such Holder. The aggregate principal amount
of such Debenture or Debentures exchanged in accordance with this Section shall
equal the aggregate unpaid principal amount of this Debenture as of the date of
such surrender; provided, however, that upon such exchange there shall be filed
with the Company the name and address for all purposes hereof of the Holder or
Holders of the Debenture or Debentures delivered in such transfer. This
Debenture, when presented for registration of transfer or for exchange or
payment, shall (if so required by the Company) be duly endorsed by, or be
accompanied by a written instrument of transfer in form reasonably satisfactory
to the Company duly executed by, the Holder or its attorney duly authorized in
writing.
SECTION 2.3. Loss, Theft, Destruction of Debenture. Upon receipt of
-------------------------------------
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Debenture and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Debenture, the Company will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Debenture, a new Debenture of like
tenor and unpaid principal amount dated as of the date hereof. This Debenture
shall be held and owned upon the express condition that the provisions of this
Section are exclusive with respect to the replacement of a mutilated, destroyed,
lost or stolen Debenture and shall preclude any and all other rights and
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement of negotiable instruments or other
securities without their surrender.
SECTION 2.4. Optional Redemption by the Company. The Company at its
----------------------------------
election, upon notice given as provided in Section 2.5, may redeem this
Debenture in whole or in part at any time if it remains outstanding on or after
September 15, 2000 at the aggregate principal amount outstanding so to be
redeemed, together with accrued interest thereon to the date fixed for such
redemption (the "Redemption Price"); provided, however, that the source of funds
for such redemption shall be the Company's cash flow and shall not consist in
whole or in part of any Indebtedness of the Company incurred for the purpose of
funding such redemption. Partial redemptions shall be in an aggregate principal
amount of $1,000,000.00 or an integral multiple of $1,000,000.00 in excess
thereof. The amount to be redeemed shall be calculated according to the
respective unredeemed principal amount hereof.
SECTION 2.5. Notice of Redemptions. In the case of any redemption of this
---------------------
Debenture, notice thereof shall be given in writing to the Holder not fewer than
30 nor more than 60 days prior to the date fixed for such redemption, which
notice shall specify the date fixed for such redemption and make reference to
this Section 2.5 pursuant to which such redemption is to be made. Such notice
of redemption and all other notices to be given to the Holder shall be given by
registered mail at its designated address.
Upon notice of any redemption being given as provided in this Section, the
Redemption Price shall become due and payable to the Holder, at the office of
the Company on the date specified in such
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<PAGE>
notice and from and after such date (unless the Company shall default in the
payment of the Redemption Price) interest shall cease to accrue on this
Debenture or portion hereof subject to such notice of redemption.
SECTION 2.6. Surrender of Debentures; Notation Thereon. Upon any
-----------------------------------------
redemption of a portion of the principal amount of this Debenture pursuant to
Section 2.4, the Holder at its option may require the Company to make and
deliver, at the expense of the Company (other than for transfer taxes, if any),
upon surrender of this Debenture, a new Debenture payable to the Holder, or to
such Person or Persons, or order, as may be designated by the Holder, for the
principal amount of this Debenture then remaining unredeemed, dated as of the
date to which interest has been paid on the unredeemed principal amount of this
Debenture (or, if no interest has been paid hereon, then dated as of the date of
this Debenture), or may present this Debenture to the Company for notation
hereon of the payment of the portion of the principal amount so redeemed. The
Company may, as a condition of payment of all or any of the principal of or
interest on this Debenture, require the Holder to present this Debenture for
notation of such payment and, if this Debenture be paid in full, require the
surrender hereof.
SECTION 2.7. Who Deemed Absolute Owner. The Company may deem the Person
-------------------------
in whose name this Debenture shall be registered upon the registry books of the
Company to be, and may treat it as, the absolute owner of this Debenture
(whether or not this Debenture shall be overdue) for the purpose of receiving
payment of or on account of the principal of this Debenture and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
All such payments shall be valid and effectual to satisfy and discharge the
liability upon this Debenture to the extent of the sum or sums so paid.
ARTICLE 3
SUBORDINATION
The payment of this Debenture shall be subject to the following
restrictions:
SECTION 3.1. Agreement to Subordinate. Anything in this Debenture or the
------------------------
Purchase Agreement to the contrary notwithstanding, the Company agrees, and by
accepting this Debenture the Holder agrees, that the indebtedness evidenced by
this Debenture is subordinate and subject in right of payment, to the extent and
in the manner provided in this Article 3, to the prior payment in full in cash
of all Senior Debt and that the subordination is for the benefit of and
enforceable by the holders of Senior Debt. This Debenture shall in all respects
rank pari passu with all other present and future unsecured and unsubordinated
obligations of the Company, and only Senior Debt shall rank senior to this
Debenture. The subordination provided herein is absolute, unconditional and
irrevocable irrespective of:
(a) any failure of, or delay by, a holder of Senior Debt:
(i) to assert any claim or demand or to enforce any right, power or
remedy against the Company or any other Person primarily or secondarily
liable with respect to the Senior Debt (an "Obligor"); or
(ii) to exercise any right, power or remedy against the Company or any
Obligor or any collateral securing any Senior Debt;
(b) any change in the time, manner, or place of payment of, or in any
other term of, all or any Senior Debt;
7
<PAGE>
(c) any reduction, limitation, impairment, or termination of any Senior
Debt for any reason, including any claim of waiver, release, surrender,
alteration or compromise;
(d) any amendment to, rescission, waiver, or other modification of, or any
consent to departure from, any of the terms of the Bank Credit Agreement or any
other document under which Senior Debt is incurred;
(e) any addition, exchange, release, surrender or nonperfection of any
collateral securing any Senior Debt; or
(f) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, or otherwise prejudicially
affect the subordination herein provided.
SECTION 3.2. Reinstatement, etc. The subordination provisions of this
-------------------
Article 3 shall continue to be effective or be reinstated, as the case may be,
if at any time any payment (in whole or in part) of any Senior Debt is rescinded
or must otherwise be restored by the holder of such Senior Debt upon any
Insolvency Event (as herein defined) or otherwise, all as though such payment
had not been made.
SECTION 3.3. Certain Waivers. The Holder hereby waives promptness,
---------------
diligence, notice of acceptance, and any other notice with respect to any of the
Senior Debt and any requirement that any holder of the Senior Debt (or any agent
therefor) protect, secure, perfect, or insure any lien, security interest or
similar encumbrance or any property subject thereto, or exhaust any right or
take any action against the Company, any Obligor or any other Person or any
collateral securing any Senior Debt; provided, that the Company shall send, or
cause the Administrative Agent to send, to the Holder, at the following address
(or such other address as the Holder shall notify the Company and the
Administrative Agent in writing): c/o EM Industries, Incorporated, 5 Skyline
Drive, Hawthorne, New York 10532, a copy of any Payment Blockage Notice or
notice of acceleration of the principal amount owed under the Bank Credit
Agreement promptly after the same is sent by the Administrative Agent to the
Company; provided, that the failure of the Company or the Administrative Agent
to send to the Holder a copy of such notice shall not affect or impair in any
respect the rights of any holder of Senior Debt hereunder or the extent or scope
of the subordination provisions herein.
SECTION 3.4. Insolvency, Bankruptcy, Dissolution of Company. Upon any
----------------------------------------------
payment or distribution (whether in cash, securities or other property) to
creditors of the Company in the event of (i) any winding-up, insolvency,
bankruptcy, liquidation or reorganization of the Company, whether voluntary or
involuntary, (ii) any proceeding or case for reorganization, liquidation,
bankruptcy, dissolution or other winding-up of the Company or its assets,
whether or not involving insolvency or bankruptcy, (iii) any assignment by the
Company for the benefit of creditors or (iv) any receivership or other similar
proceeding or any marshalling of assets of the Company (each, an "Insolvency
Event"):
(a) all Senior Debt shall first be paid in full in cash (including without
limitation the cash collateralizing at 105% of the face amount of any
obligations under outstanding letters of credit) before the Holder shall be
entitled to receive any payment or other distribution on or in respect of this
Debenture; and
(b) until all Senior Debt is paid in full in cash (including without
limitation the cash collateralizing at 105% of the face amount of any
obligations under outstanding letters of credit), any payment or distribution to
which the Holder would be entitled but for this Article 3 (whether in cash,
property, securities or whatever) shall be made to holders of Senior Debt as
their interests may appear,
8
<PAGE>
except that the Holder may receive shares of the Company as reorganized or
readjusted or securities of the Company or any other corporation if (i) in the
case of securities, the payment of such securities is subordinate to Senior Debt
to at least the same extent as this Debenture is subordinate to Senior Debt and
(ii) in the case of stock or securities, such stock or securities are issued
pursuant to a plan of reorganization which does not alter, amend or impair (as
defined in Section 1124 of the Bankruptcy Code) the rights of any holder of
Senior Debt.
SECTION 3.5. Default on Senior Debt
----------------------
(a) The Company may not pay the principal of, premium, if any, or interest
on, this Debenture or make any deposit in respect of this Debenture and may not
repurchase, redeem or otherwise retire this Debenture (collectively, "pay this
Debenture") if:
(i) any Senior Debt is not paid when due,
(ii) there shall be a default under the Bank Credit Agreement with
respect to the following financial covenants, which covenants are currently
set forth in Sections 9.1 (a) through (e) therein: (v) Maintenance of
Consolidated Net Worth, (w) Minimum Consolidated EBITDA, (x) Interest
Coverage Ratio, (y) Senior Leverage Ratio or (z) Fixed Charge Coverage
Ratio, or
(iii) any other default on Senior Debt occurs and the maturity of
such Senior Debt is accelerated in accordance with its terms unless, in
each case, the default has been cured or waived and any such acceleration
has been rescinded or such Senior Debt has been paid in full in cash
(including without limitation the cash collateralizing at 105% of the face
amount of any obligations under outstanding letters of credit) and any
commitment in connection with such Senior Debt to extend further loans or
credit to the Company or any Affiliate thereof shall have been terminated
(including without limitation, with respect to obligations under the Bank
Credit Agreement, the termination of the Commitment).
During the continuation of any default (other than a default described in
clauses (i), (ii) or (iii) above) with respect to any Senior Debt, pursuant to
which the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay this
Debenture for a period (a "Payment Blockage Period") commencing upon the receipt
by the Company of written notice of such default from a Representative of such
Senior Debt specifying an election to effect a Payment Blockage Period (a
"Payment Blockage Notice") and ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the Company from
the Representative which gave such Payment Blockage Notice, (ii) by repayment in
full in cash of such Senior Debt (including without limitation the cash
collateralizing at 105% of the face amount of any obligations under outstanding
letters of credit) and the termination of any commitment in connection with such
Senior Debt to extend further loans or credit to the Company or any Affiliate
thereof (including without limitation, with respect to obligations under the
Bank Credit Agreement, the termination of the Commitment) or (iii) because the
default specified in such Payment Blockage Notice is no longer continuing, as
verified in writing by the Representative that sent such Payment Blockage
Notice). Notwithstanding the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section), unless the holders
of such Senior Debt or the Representative of such holders shall have accelerated
the maturity of such Senior Debt, the Company shall resume payments (including
any missed payments) on this Debenture after the end of such Payment Blockage
Period unless such payment is otherwise prohibited under this Article 3.
Multiple Payment Blockage Periods may be imposed so long as (x) the cumulative
period covered by all such
9
<PAGE>
Payment Blockage Periods does not exceed 179 days in any 365 consecutive-day
period and (y) no more than one Payment Blockage Period may result from the same
default.
(b) The failure to make a payment or distribution on this Debenture by
reason of this Article 3 shall not be construed or deemed to prevent the
occurrence of an Event of Default hereunder; provided that any acceleration of
payment of this Debenture resulting therefrom shall be rescinded if and when the
following conditions shall be simultaneously satisfied: (i) each payment or
distribution which gave rise to such event of default shall be made, and (ii) no
other such event of default shall have occurred.
SECTION 3.6. Subordinated Acceleration; Standstill.
-------------------------------------
(a) Holder agrees to give the Administrative Agent under the Bank Credit
Agreement not less than 5 days' prior notice of its intention to accelerate the
maturity of this Debenture pursuant to Section 6.2 hereof.
(b) Holder will not for a period of 90 days following an acceleration of
this Debenture (other than such acceleration resulting from the acceleration of
a majority in principal amount of the then outstanding amount of Senior Debt)
pursue or exercise any other right, power or remedy under this Debenture, the
Purchase Agreement or applicable law.
SECTION 3.7. Turnover. If Holder receives any payment or other
--------
distribution on this Debenture (whether in cash, property, securities or
whatever) at a time when such payment or distribution should not have been made
to Holder by reason of this Article 3, such payment or distribution shall be
deemed to have been received and held in trust for the benefit of the holders of
the Senior Debt, and shall be segregated from other property of Holder and be
paid and delivered as promptly as practicable to the holders of the Senior Debt,
as their interests may appear, for application to, or collateral for, the
payment or prepayment of the Senior Debt.
SECTION 3.8. Subrogation. If all Senior Debt has been paid in full in
-----------
cash (including without limitation the cash collateralizing at 105% of the face
amount of any obligations under outstanding letters of credit) and any
commitment in connection with such Senior Debt to extend further loans or credit
to the Company or any Affiliate thereof shall have been terminated (including
without limitation, with respect to obligations under the Bank Credit Agreement,
the termination of the Commitment), then until this Debenture is paid in full,
Holder shall be subrogated to all rights of holders of Senior Debt, including
the right to receive payments or distributions in respect thereof. A payment or
distribution made to holders of Senior Debt pursuant to this Article 3 which
otherwise would have been made to Holder shall not be construed or deemed, as
between the Company and Holder, a payment or distribution in respect of Senior
Debt.
SECTION 3.9. Relative Rights. This Article 3 defines the relative rights
---------------
of Holder and the holders of Senior Debt. Nothing herein shall:
(a) impair, as between the Company and Holder, the obligation of the
Company, which is absolute and unconditional, to pay principal of, premium, if
any, and interest on this Debenture in accordance with its terms; or
(b) except as otherwise expressly provided herein, prevent Holder from
exercising its available remedies upon a default, subject to the rights of
holders of Senior Debt to receive distributions otherwise payable to Holder.
10
<PAGE>
SECTION 3.10. Subordination May Not be Impaired No right of any holder
---------------------------------
of Senior Debt to enforce the subordination of the indebtedness evidenced by
this Debenture shall at any time in any way be prejudiced or impaired by an act
or omission in good faith by a holder of Senior Debt (or any agent therefor), or
by any act or failure to act by the Company or by the Company's failure to
comply with this Debenture.
SECTION 3.11. Reliance by Holders of Senior Debt on Subordination
---------------------------------------------------
Provisions. Holder by accepting this Debenture acknowledges and agrees that the
- ----------
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt, whether such Senior Debt
was created or acquired before or after the issuance of this Debenture, to
acquire and continue to hold, or to continue to hold, such Senior Debt and such
holder of Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.
ARTICLE 4
RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS
SECTION 4.1. Restrictive Legend. Unless and until otherwise permitted by
------------------
this Section, any certificate for Debenture Shares initially issued pursuant to
this Debenture and any certificate for Common Shares issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO A COMMON SHARE AND DEBENTURE PURCHASE AGREEMENT DATED
MAY 24, 1995 AND A STANDSTILL AGREEMENT DATED FEBRUARY 27, 1995,
AS AMENDED SEPTEMBER 15, 1995 (COPIES OF WHICH AGREEMENTS ARE ON
FILE WITH THE SECRETARY OF THE COMPANY) WHICH PROVIDE, AMONG
OTHER THINGS, FOR CERTAIN RESTRICTIONS ON TRANSFER THEREOF. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SUCH AGREEMENTS
SHALL BE VOID.
SECTION 4.2. Restrictions on Transfer; Notice of Proposed Transfers;
-------------------------------------------------------
Opinion of Counsel.
- ------------------
(a) This Debenture is not transferable to any Person who is not
an Affiliate of EM Industries, Incorporated.
(b) Prior to any transfer or attempted transfer of this Debenture
or any Debenture Shares held by a Holder before such Debenture or Debenture
Shares have been registered under the Securities Act in accordance with the
terms of this Debenture, the Holder shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner and circumstances of the proposed transfer. Any sale or other transfer
not in compliance herewith shall be void.
11
<PAGE>
(c) For so long as the transfer restrictions set forth in the
Purchase Agreement, Standstill Agreement or this Debenture are in effect, any
certificate evidencing Debenture Shares issued upon transfer (each, a
"Restricted Security") shall bear the restrictive legend set forth in Section
4.1, provided, however, that in the event counsel for the Company shall opine
that the removal of any legend (or part thereof) required to appear on any
certificate pursuant to the Purchase Agreement from the certificates
representing the Common Shares is permissible, the Company shall remove from
such certificates all legends no longer required and shall rescind any stop-
transfer instructions previously communicated to its transfer agent relating to
such certificates.
SECTION 4.3. Registration Rights. The Company shall have no obligation to
-------------------
the Holder of any Restricted Security to cause or consent to the registration of
any such security under the Securities Act, except to the extent set forth in
the Standstill Agreement.
ARTICLE 5
COVENANTS
The Company covenants and agrees that so long as this Debenture shall be
outstanding:
SECTION 5.1. Payment of Debenture; Source of Funds. The Company will
-------------------------------------
punctually pay or cause to be paid the principal of, or interest on, this
Debenture according to the terms hereof. The source of funds for all such
payments of principal and interest shall be the Company's cash flow and shall
not consist in whole or in part of any Indebtedness of the Company.
SECTION 5.2. Notice of Default. If any one or more events occur which
-----------------
constitute or which, with the giving of notice or the lapse of time or both,
would constitute an Event of Default or if the Holder shall demand payment or
take any other action permitted upon the occurrence of any such Event of
Default, the Company will forthwith give notice to the Holder, specifying the
nature and status of the Event of Default or other event or of such demand or
action, as the case may be.
SECTION 5.3. Sufficient Number of Authorized Common Shares. The Company
---------------------------------------------
will at all times have authorized and reserved for issuance a sufficient number
of Common Shares to provide for the issuance of the Debenture Shares as provided
herein.
SECTION 5.4. Insurance. The Company will carry and maintain in full force
---------
and effect at all times with insurers the Company reasonably believes to be
financially sound and reputable such insurance in such amounts as is customary
in the respective industries of the Company and such subsidiaries.
ARTICLE 6
REMEDIES
SECTION 6.1. Events of Default. "Event of Default" wherever used herein
-----------------
means any one of the following events:
(a) default in the due and punctual payment of the principal of,
interest on, or any other amount owing in respect of, this Debenture when and as
the same shall become due and payable, and continuance of such default for a
period of thirty (30) calendar days; or
12
<PAGE>
(b) default in the performance or observance of any covenant or
agreement of the Company in this Debenture (other than a covenant or agreement a
default in the performance of which is specifically provided for elsewhere in
this Section), and the continuance of such default for a period of thirty (30)
calendar days after there has been given to the Company by a Holder a written
notice specifying such default and requiring it to be remedied; or
(c) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company or any Subsidiary a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under the Bankruptcy
Code or any other applicable Federal or state law, or appointing a receiver,
liquidator, assignee, trustee or sequestrator (or other similar official) of the
Company or of any substantial part of its property, or ordering the winding-up
or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 90 calendar days; or
(d) the institution by the Company or any Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Code or any other applicable Federal or state law,
or the consent by it to the filing of any such petition or to the appointment of
a receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such action;
or
(e) any principal with respect to other Indebtedness (other than
Senior Debt) of the Company or any Subsidiary exceeding $1,000,000 is not repaid
within any applicable grace period after its final maturity date or becomes due
and payable by reason of default before its final maturity date.
SECTION 6.2. Acceleration of Maturity. If an Event of Default occurs and
------------------------
is continuing, then and in every such case the Holder may, subject to the
restrictions contained in Article 3, declare the principal of this Debenture to
be due and payable immediately, by a notice in writing to the Company, and upon
any such declaration the principal of this Debenture shall become immediately
due and payable.
SECTION 6.3. Remedies Not Waived. No course of dealing between the
-------------------
Company and the Holder or any delay in exercising any rights hereunder shall
operate as a waiver by the Holder.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Register. The Company shall keep at its principal office a
--------
register in which the Company shall provide for the registration of this
Debenture.
SECTION 7.2. Governing Law. This Debenture shall be exclusively governed
-------------
by and construed in accordance with the laws of the Commonwealth of Pennsylvania
without reference to the conflicts of laws principles thereof.
SECTION 7.3. Headings. The headings of the Articles and Sections of this
--------
Debenture are inserted for convenience only and do not constitute a part of this
Debenture.
13
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
by its duly authorized officer under its corporate seal, attested by its duly
authorized officer, on the date of this Debenture.
VWR CORPORATION
By:/s/Jerrold B. Harris
---------------------------
Name:
Title:
Attest
By:/s/Walter S. Sobon
------------------------
Name:
Title:
[Corporate Seal]
14
<PAGE>
CREDIT AGREEMENT
AMONG
VWR CORPORATION,
VWR SCIENTIFIC OF CANADA LTD.,
SCIENTIFIC HOLDINGS CORP.,
AND
VWR SCIENTIFIC INTERNATIONAL CORPORATION
AS BORROWERS,
THE SEVERAL LENDERS FROM TIME TO TIME
PARTIES HERETO
AND
CORESTATES BANK, N.A.,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS SYNDICATION AGENT
PNC BANK, NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT
BA SECURITIES, INC.,
AS ARRANGER
SEATTLE-FIRST NATIONAL BANK,
AS LEAD MANAGER
DATED AS OF SEPTEMBER 14, 1995
$285,000,000 CREDIT FACILITIES
<PAGE>
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS.................................................... 1
1.1 Defined Terms.................................................... 1
1.2 Other Definitional Provisions.................................... 30
SECTION 2. REVOLVING CREDIT LOANS; LETTERS OF CREDIT; SWING LINE LOANS.... 31
2.1 Revolving Credit Commitments..................................... 31
2.2 Revolving Credit Notes........................................... 32
2.3 Procedure for Revolving Credit Loans............................. 32
2.4 L/C Commitment................................................... 34
2.5 Procedure for Issuance of Letters of Credit...................... 35
2.6 Fees, Commissions and Other Charges.............................. 35
2.7 L/C Participations............................................... 36
2.8 Reimbursement Obligation of the U.S. Dollar Borrowers............ 37
2.9 Obligations Absolute............................................. 37
2.10 Letter of Credit Payments....................................... 38
2.11 Application..................................................... 38
2.12 Existing Letters of Credit...................................... 39
2.13 Swing Line Commitment........................................... 39
2.14 Swing Line Note................................................. 39
2.15 Procedure For Swing Line Loans.................................. 40
2.16 Allocating Swing Line Loans; Swing Line Loan Participations..... 40
2.17 Bridge Loans.................................................... 41
2.18 Bridge Notes.................................................... 42
2.19 Procedure For Bridge Loans...................................... 42
2.20 Allocating Bridge Loans; Bridge Loan Participations............. 45
2.21 Gap Period...................................................... 45
SECTION 3. TERM LOANS..................................................... 45
3.1 Term Loans....................................................... 45
3.2 Term Notes....................................................... 45
3.3 Procedure for Term Loans......................................... 46
3.4 Repayment of Term Loans.......................................... 46
SECTION 4. CANADIAN DOLLAR LOANS.......................................... 47
4.1 Canadian Dollar Commitments...................................... 47
4.2 Canadian Dollar Note............................................. 47
4.3 Procedure for Canadian Dollar Loans.............................. 48
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS......................... 49
5.1 Fees............................................................. 49
5.2 Interest Rates and Payment Dates................................. 50
5.3 Default Interest................................................. 51
5.4 Inability to Determine Interest Rate............................. 52
5.5 Termination and Reduction of Commitments......................... 52
5.6 Optional Prepayment of Loans..................................... 53
5.7 Mandatory Prepayments............................................ 55
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5.8 Illegality....................................................... 57
5.9 Requirements of Law.............................................. 58
5.10 Taxes........................................................... 59
5.11 Indemnity....................................................... 62
5.12 Pro Rata Treatment of Loans, L/C's and Payments; Commitment
Fees............................................................. 62
5.13 Payments........................................................ 63
5.14 Conversion and Continuation Options............................. 64
5.15 Minimum Amounts of Tranches; Maximum Number of Tranches......... 66
5.16 Use of Proceeds................................................. 66
5.17 Limitation on Obligations of VWR Canada......................... 66
SECTION 6. REPRESENTATIONS AND WARRANTIES................................. 67
6.1 Financial Condition.............................................. 67
6.2 No Change........................................................ 67
6.3 Corporate Existence; Compliance with Law......................... 67
6.4 Corporate Power; Authorization; Enforceable Obligations.......... 68
6.5 No Legal Bar..................................................... 68
6.6 No Material Litigation........................................... 68
6.7 No Default....................................................... 69
6.8 Taxes............................................................ 69
6.9 Federal Regulations.............................................. 69
6.10 ERISA........................................................... 69
6.11 Investment Company Act.......................................... 70
6.12 Purpose of Loans................................................ 70
6.13 Environmental Matters........................................... 70
6.14 No Material Misstatements....................................... 72
6.15 Ownership of Properties; Liens.................................. 72
6.16 Intellectual Property........................................... 72
6.17 No Burdensome Restrictions...................................... 73
6.18 Security Interests.............................................. 73
6.19 Baxter Acquisition.............................................. 73
6.20 Senior Debt Status.............................................. 74
6.21 Solvency........................................................ 74
6.22 Public Utility Holding Company Act.............................. 74
SECTION 7. CONDITIONS PRECEDENT........................................... 75
7.1 Conditions to Initial Extension of Credit........................ 75
7.2 Conditions to Each Extension of Credit........................... 78
SECTION 8. AFFIRMATIVE COVENANTS.......................................... 79
8.1 Financial Statements............................................. 79
8.2 Certificates; Other Information.................................. 80
8.3 Payment of Obligations........................................... 81
8.4 Conduct of Business and Maintenance of Existence................. 82
8.5 Maintenance of Property; Insurance............................... 82
8.6 Inspection of Property; Books and Records; Discussions........... 82
8.7 Notices.......................................................... 83
8.8 Environmental Laws............................................... 83
8.9 Pledge of Real Property.......................................... 84
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8.10 Management Changes.............................................. 85
8.11 Interest Rate Protection........................................ 85
SECTION 9. NEGATIVE COVENANTS............................................. 85
9.1 Financial Condition Covenants.................................... 85
9.2 Limitation on Liens.............................................. 87
9.3 Limitation of Indebtedness....................................... 89
9.4 Limitations on Fundamental Changes............................... 90
9.5 Limitation on Sale of Assets..................................... 91
9.6 Limitation on Distributions...................................... 92
9.7 Transactions with Affiliates..................................... 92
9.8 Sale and Leaseback............................................... 92
9.9 Landlord Waivers................................................. 92
9.10 Limitation on Contingent Obligations............................ 93
9.11 Limitation on Investments, Loans and Advances................... 93
9.12 Limitation on Optional Payments and Modifications of Debt
Instruments...................................................... 94
9.13 Limitation on Negative Pledge Clauses........................... 94
9.14 Fiscal Year..................................................... 94
9.15 Limitation on Conduct of Business............................... 94
SECTION 10. EVENTS OF DEFAULT............................................. 94
10.1 Events of Default............................................... 94
10.2 Priority of Application of Proceeds............................. 99
10.3 Turnover of Proceeds............................................ 101
SECTION 11. THE AGENTS.................................................... 102
11.1 Appointment..................................................... 102
11.2 Delegation of Duties............................................ 102
11.3 Exculpatory Provisions.......................................... 102
11.4 Reliance by Agents.............................................. 103
11.5 Notice of Default............................................... 103
11.6 Non-Reliance on Agent and Other Banks........................... 103
11.7 Indemnification................................................. 104
11.8 Agents in Their Individual Capacities........................... 105
11.9 Successor Administrative Agent.................................. 105
11.10 Beneficiaries.................................................. 105
11.11 Co-Agents, Arranger and Lead Manager........................... 105
SECTION 12. MISCELLANEOUS................................................. 106
12.1 Amendments and Waivers.......................................... 106
12.2 Notices......................................................... 106
12.3 No Waiver; Cumulative Remedies.................................. 108
12.4 Survival of Representations and Warranties...................... 108
12.5 Payment of Expenses and Taxes................................... 108
12.6 Successors and Assigns.......................................... 110
12.7 Disclosure of Information....................................... 115
12.8 Adjustments; Set-off............................................ 115
12.9 Counterparts.................................................... 116
12.10 Severability................................................... 116
12.11 Power of Attorney.............................................. 117
12.12 Judgment....................................................... 117
12.13 Integration.................................................... 118
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12.14 GOVERNING LAW.................................................. 118
12.15 Submission To Jurisdiction; Waivers............................ 118
12.16 Acknowledgements............................................... 119
12.17 Name Change.................................................... 119
12.18 No Right of Contribution....................................... 119
12.19 WAIVERS OF JURY TRIAL.......................................... 119
SCHEDULES
SCHEDULE I Bank and Commitment Information
SCHEDULE II List of Subsidiaries
SCHEDULE III List of Existing Letters of Credit
SCHEDULE IV List of Permitted Exceptions
SCHEDULE V Exiting Indebtedness
SCHEDULE VI List of Filing Locations
SCHEDULE VII Existing Contingent Obligations
SCHEDULE VIII Existing Litigation
EXHIBITS
EXHIBIT A-1 Form of Revolving Credit Note
EXHIBIT A-2 Form of Term Note
EXHIBIT A-3 Form of Canadian Dollar Note
EXHIBIT A-4 Form of Swing Line Note
EXHIBIT A-5 Form of Bridge Note
EXHIBIT B Form of Assignment and Assumption Agreement
EXHIBIT C Form of Guaranty from U.S. Dollar Borrowers
EXHIBIT D-1 Form of Pledge Agreement by VWR
EXHIBIT D-2 Form of Pledge Agreement by Scientific Holdings
EXHIBIT E Form of Security Agreement
EXHIBIT F-1 Form of Notice of Borrowing For Revolving Credit Loans and Swing
Line Loans
EXHIBIT F-2 Form of Notice of Borrowing For Canadian Dollar Loans
EXHIBIT G-1 Matters to be Covered in Legal Opinion of Drinker, Biddle &
Reath
EXHIBIT G-2 Matters to be Covered in Legal Opinion of Special Canadian Counsel
EXHIBIT G-3 Matters to be Covered in Legal Opinion of Special Barbados Counsel
EXHIBIT H Form of Subordinated Debenture
EXHIBIT I Form of Canadian Assignment of Book Debts
EXHIBIT J Form of Subordination Agreement from VWR Canada
EXHIBIT K Form of Canadian Security Agreement
EXHIBIT L Form of Quebec Hypothecation Agreement
</TABLE>
-iv-
<PAGE>
CREDIT AGREEMENT
AGREEMENT, dated as of September 14, 1995, among VWR CORPORATION, a
Pennsylvania corporation ("VWR"), VWR SCIENTIFIC OF CANADA LTD., an Ontario
---
corporation ("VWR Canada"), SCIENTIFIC HOLDINGS CORP., a Delaware corporation
----------
("Scientific Holdings"), VWR SCIENTIFIC INTERNATIONAL CORPORATION, a Barbados
-------------------
corporation ("VWR International") (VWR, VWR Canada, Scientific Holdings and VWR
-----------------
International each individually a "Borrower"; collectively, the "Borrowers");
-------- ---------
the several banks and other financial institutions from time to time parties
hereto (the "Banks"); CORESTATES BANK, N.A., as Administrative Agent and
-----
Collateral Agent (in such capacities, the "Administrative Agent") for the Banks
--------------------
hereunder; BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Syndication Agent (in such capacity, the "Syndication Agent"); PNC BANK,
-----------------
NATIONAL ASSOCIATION, as Documentation Agent (in such capacity, the
"Documentation Agent"); BA SECURITIES, INC., as Arranger (in such capacity, the
-------------------
"Arranger"); and SEATTLE-FIRST NATIONAL BANK, as Lead Manager (in such capacity,
--------
the "Lead Manager").
------------
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the promises and the agreements hereinafter set
forth, and intending to be legally bound hereby, the parties hereto hereby agree
as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings:
"Affiliate": as to any Person, any other Person which, directly or
---------
indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with, such Person and any member, director,
officer or employee of any such Person. For purposes of this definition,
"control" shall mean the power, directly or indirectly, either to (a) vote
10% or more of the securities having ordinary voting power for the election
of directors of such Person or (b) direct or in effect cause the direction
of the management and policies of such Person whether by contract or
otherwise.
<PAGE>
"Agents": the collective reference to the Administrative Agent, the
------
Syndication Agent, the Arranger, and the Documentation Agent.
"Agreement": this Credit Agreement, as amended, supplemented or
---------
otherwise modified from time to time.
"Applicable Margin": on any date, for a Base Rate Loan, Eurodollar
-----------------
Loan, Canadian Base Rate Loan or Canadian COF Rate Loan, the percentage per
annum set forth below in the column entitled Base Rate, Eurodollar Rate,
Canadian Base Rate or Canadian COF Rate, as appropriate, opposite the
Senior Debt/EBITDA Ratio shown on the last Senior Debt/EBITDA Certificate
delivered by the Borrowers to the Administrative Agent pursuant to
subsection 8.2(c) prior to such date:
<TABLE>
<CAPTION>
Senior Debt/EBITDA Eurodollar Canadian Canadian
Ratio Base Rate Rate Base Rate COF RATE
------------------ --------- ---------- --------- --------
<S> <C> <C> <C> <C>
Less than 1.50 to 1 0 .75% 0 .75%
Less than 2.00 to 1
but greater than or
equal to 1.50 to 1 0 1.00% 0 1.00%
Less than 2.50 to 1
but greater than or
equal to 2.00 to 1 0 1.25% 0 1.25%
Less than 3.00 to 1
but greater than or
equal to 2.50 to 1 0 1.50% 0 1.50%
Less than 3.50 to 1
but greater than or
equal to 3.00 to 1 .25 1.75% .25 1.75%
Equal to or greater
than 3.50 to 1 1.00 2.50% 1.00 2.50%
</TABLE>
; provided, however, that (a) in the event that no Senior Debt/EBITDA Ratio
-------- ------- ----
Certificate has been delivered for a fiscal quarter prior to the last date
on which it can be delivered without violation of subsection 8.2(c), the
Applicable Margin from such date until such Senior Debt/EBITDA Ratio
Certificate is actually delivered shall be that applicable when the Senior
Debt/EBITDA Ratio is equal to or greater than 3.50 to 1, (b) in the event
that the actual Senior Debt/EBITDA Ratio for any fiscal quarter is
subsequently determined to be greater than that set forth in the Senior
Debt/EBITDA Ratio Certificate for such fiscal quarter, the Applicable
Margin shall be recalculated for the applicable period based upon such
actual Senior Debt/EBITDA
2
<PAGE>
Ratio and (c) anything in this definition to the contrary notwithstanding,
until receipt by the Administrative Agent of the Senior Debt/EBITDA Ratio
Certificate for the fiscal quarter ended September 30, 1996, the Applicable
Margin shall be that applicable when the Senior Debt/EBITDA Ratio is less
than 3.50 to 1 but greater than or equal to 3.00 to 1. Any additional
interest on the Revolving Credit Loans and the Term Loans resulting from
the operation of clause (b) above shall be payable by the U.S. Dollar
Borrowers jointly and severally to the U.S. Dollar Banks within five (5)
days after receipt of a written demand therefor from the Administrative
Agent. Any additional interest on the Swing Line Loans resulting from the
operation of clause (b) above shall be payable by the U.S. Dollar Borrowers
jointly and severally to CoreStates within five (5) days after receipt of a
written demand therefor from the Administrative Agent. Any additional
interest on the Canadian Dollar Loans resulting from the operation of
clause (b) above shall be payable by VWR Canada to the Canadian Funding
Banks within five (5) days after receipt of a written demand therefor from
the Administrative Agent.
"Application": in respect of each Letter of Credit issued by the
-----------
Issuing Bank, an application, in such form as the Issuing Bank may specify
from time to time, requesting issuance of such Letter of Credit.
"Asset Sale": means any sale, lease, transfer or other disposition of
----------
assets (each referred to for the purposes of this definition as a
"disposition") by VWR or any Subsidiary (other than a disposition by a
-----------
Borrower to a different Borrower), other than (a) dispositions of inventory
in the ordinary course of business, (b) dispositions of surplus or obsolete
inventory or equipment, waste or by-product material in the ordinary course
of business and (c) dispositions of Permitted Investments.
"Assignment and Acceptance": an assignment and acceptance entered
-------------------------
into by a Bank and a Purchasing Bank, and accepted by the Administrative
Agent, in the form of Exhibit B, or such other form as shall be approved by
the Administrative Agent.
"Available Canadian Dollar Commitments": at any particular time, an
-------------------------------------
amount equal to the excess, if any, of the U.S. Dollar Equivalent of (a)
the Canadian Dollar Commitments at such time over (b) the aggregate unpaid
principal amount of the Canadian Dollar Loans at such time.
"Available Commitments": at any particular time, an amount equal to
---------------------
the excess, if any, of the U.S. Dollar
3
<PAGE>
Equivalent of the Revolving Credit Commitments and the Canadian Dollar
Commitments at such time over the sum of the U.S. Dollar Equivalent of (a)
the aggregate unpaid principal amount of the Revolving Credit Loans, Swing
Line Loans, Bridge Loans and Canadian Dollar Loans outstanding at such time
and (b) the L/C Obligations outstanding at such time.
"Available Revolving Credit Commitment": at any particular time, an
-------------------------------------
amount equal to the excess, if any, of the Revolving Credit Commitments at
such time over the sum of (a) the aggregate unpaid principal amount of the
Revolving Credit Loans and Bridge Loans at such time, (b) the aggregate
unpaid principal amount of the Swing Line Loans at such time and (c) the
L/C Obligations outstanding at such time; provided that, for purposes of
-------- ----
calculating Commitment Fees payable by the U.S. Dollar Borrowers pursuant
to subsection 5.1(a), the amount referred to in clause (b) of this
definition shall be zero.
"Bank of America": Bank of America National Trust and Savings
---------------
Association.
"Base Rate": for any day, a rate per annum (rounded upwards, if
---------
necessary, to the next 1/16th of 1%) equal to the greater of (a) the Prime
Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. If for any reason the Administrative
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective
Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
definition of such term, the Base Rate shall be determined without regard
to clause (b) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in
the Prime Rate or the Federal Funds Effective Rate, as the case may be.
"Base Rate Loans": Loans bearing interest at a rate determined by
---------------
reference to the Base Rate.
"Baxter Acquisition": means the acquisition of certain assets of
------------------
Baxter Healthcare Corporation constituting what is sometimes referred to as
the "Industrial Distribution Business" pursuant to the Baxter Acquisition
Agreements.
"Baxter Acquisition Agreements": means that certain Asset Purchase
-----------------------------
Agreement, dated as of May 24, 1995, as
4
<PAGE>
amended (with the consent of the Agents) on or about September 15, 1995,
among VWR, Baxter Healthcare Corporation and, with respect to certain
provisions, EM Laboratories Incorporated, and the other documents and
agreements entered into with Baxter Healthcare Corporation or its
Affiliates in connection therewith.
"BOA Canada": means Bank of America Canada, a Canadian chartered
----------
bank.
"Borrowing": a group of Loans of a single Type made by the U.S.
---------
Dollar Banks, CoreStates (with respect to Swing Line Loans), the Bridge
Banks (with respect to Bridge Loans) or the Canadian Funding Banks, as the
case may be, on a single date and as to which a single Interest Period is
in effect.
"Borrowing Date": any Business Day on which a Loan is to be made at
--------------
the request of a Borrower under this Agreement.
"Bridge Banks": the collective reference to CoreStates, PNC Bank,
------------
National Association and Bank of America National Trust and Savings
Association.
"Bridge Loan Participation Amount": as defined in subsection 2.20(b).
--------------------------------
"Bridge Loan Percentage": as to any U.S. Dollar Bank, a percentage
----------------------
equal to (a) the amount set forth opposite the name of such Bank on
Schedule I hereto under the caption "Total Commitment" (exclusive of the
amount listed therein because of such U.S. Dollar Bank's Canadian Dollar
Commitment) divided by (b) $268,000,000.
"Bridge Loans": as defined in subsection 2.17(a).
------------
"Bridge Note": as defined in subsection 2.18.
-----------
"Business Day": a day other than a Saturday, Sunday or other day on
------------
which commercial banks in Philadelphia, Pennsylvania are authorized or
required by law to close; provided, however, that, when used in connection
-------- -------
with a Eurodollar Loan, the term "Business Day" shall also exclude any day
on which banks are not open for dealings in dollar deposits in the London
Interbank Market; provided, further, however, that when used in connection
-------- ------- -------
with a Canadian Dollar Loan, the term "Business Day" shall exclude any day
on which banks in Toronto and Vancouver, Canada are authorized or required
by law to close.
5
<PAGE>
"Canadian Assignment of Book Debts": the Canadian Assignment of Book
---------------------------------
Debts in the form of Exhibit I attached hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"Canadian Base Rate": for any day, a rate per annum equal to the
------------------
Canadian Prime Rate in effect on such day. Any change in the Canadian Base
Rate due to a change in the Canadian Prime Rate shall be effective on the
effective date of such change in the Canadian Prime Rate.
"Canadian Base Rate Loans": Loans bearing interest at a rate
------------------------
determined by reference to the Canadian Base Rate.
"Canadian COF Rate": the cost at which BOA Canada can obtain Canadian
-----------------
Dollar funds in the interbank market for a period comparable in duration to
the Interest Period requested by VWR Canada in connection with a Canadian
COF Rate Loan, as such cost is determined by BOA Canada.
"Canadian COF Rate Loans": Loans bearing interest at a rate
-----------------------
determined by reference to the Canadian COF Rate.
"Canadian Dollar Borrowing Base": means, as of any date of
------------------------------
determination, the sum of the U.S. Dollar Equivalent of (a) eighty-five
percent (85%) of the aggregate face amount of all Canadian Eligible
Receivables at such date, and (b) fifty percent (50%) of the book value of
all Canadian Eligible Inventory at such date.
"Canadian Dollar Borrowing Base Certificate": as defined in
------------------------------------------
subsection 8.2(f)(ii).
"Canadian Dollar Commitments": as to any Canadian Funding Bank, the
---------------------------
obligation of such Bank to make Canadian Dollar Loans in an aggregate
principal amount at any one time outstanding not to exceed the amount set
forth opposite such Bank's name on Schedule I hereto under the caption
"Canadian Dollar Commitments," as such amount may be changed from time to
time in accordance with the provisions of this Agreement.
"Canadian Dollar Commitment Percentage": as to any Canadian Funding
-------------------------------------
Bank at any time, the percentage which such Bank's Canadian Dollar
Commitment then constitutes of the aggregate Canadian Dollar Commitments at
such time (or, at any time after the Canadian Dollar Commitments shall have
expired or terminated, the percentage which the amount of such Canadian
Funding Bank's Canadian Dollar Exposure constitutes of the aggregate amount
of the Canadian Dollar Exposure of all Canadian Funding Banks at such
time).
6
<PAGE>
"Canadian Dollar Exposure": at any date, an amount equal to the U.S.
------------------------
Dollar Equivalent of the aggregate principal amount of Canadian Dollar
Loans made by the Canadian Funding Banks then outstanding.
"Canadian Dollar Loans": as defined in subsection 4.1.
---------------------
"Canadian Dollar Note": as defined in subsection 4.2, as the same may
--------------------
be amended, supplemented or otherwise modified from time to time.
"Canadian Dollars", "CAN Dollars" or "CAN $": dollars in lawful
---------------- ----------- -----
currency of Canada.
"Canadian Eligible Inventory": means, as of any date of
---------------------------
determination, all Eligible Inventory of VWR Canada at such date.
"Canadian Eligible Receivables": means, as of any date of
-----------------------------
determination, all Eligible Receivables of VWR Canada at such date.
"Canadian Funding Bank": at any time, the Bank or Banks which at that
---------------------
time are obligated, subject to the terms of this Agreement, to make
Canadian Dollar Loans under the Canadian Dollar Commitments or, after the
Canadian Dollar Commitments are terminated, have any Canadian Dollar Loans
then outstanding.
"Canadian Prime Rate": the rate of interest per annum publicly
-------------------
announced from time to time by BOA Canada as its prime rate, in effect at
its principal office; each change in the Canadian Prime Rate shall be
effective on the date such change is publicly announced as effective.
"Canadian Security Agreement": the Canadian Security Agreement in the
---------------------------
form of Exhibit K attached hereto, as the same may be amended, supplemented
or otherwise modified from time to time.
"Canadian Security Documents": the collective reference to the
---------------------------
Canadian Security Agreement, the Quebec Hypothecation Agreement and the
Canadian Assignment of Book Debts.
"Capital Lease": at any time, a lease with respect to which the
-------------
lessee is required to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
7
<PAGE>
"Capital Lease Obligation": of any Person as of the date of
------------------------
determination, the obligations of such Person to pay rent and other amounts
under any lease of (or other arrangement conveying the right to use) real
or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance
sheet of such Person under GAAP.
"Capital Stock": any and all shares, interests, participations or
-------------
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Change of Control": an event or series of events by which (i) any
-----------------
"person" or "group" (as such terms are defined in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder), other than EM Industries Incorporated
and any Subsidiary thereof, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under such Exchange Act, except that a
Person shall be deemed to have "beneficial ownership" of all shares that
any such Person has the right to acquire without condition, other than
passage of time, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of more than 20% of the
total voting power of the then outstanding Voting Stock of VWR, (ii) EM
Industries Incorporated and its Subsidiaries are or become the "beneficial
owner" (as defined above), directly or indirectly, of more than 50% of the
total voting power of the then outstanding Voting Stock of VWR, (iii) (A)
VWR consolidates with or merges into another corporation or conveys,
transfers or leases all or substantially all of its properties and assets
(determined on a consolidated basis for VWR and its Subsidiaries taken as a
whole) to any Person, or (B) any corporation consolidates with or merges
into VWR or a Subsidiary of VWR in a transaction in which the outstanding
Voting Stock of VWR is changed into or exchanged for cash, securities or
other property, other than a transaction solely between VWR and a
Subsidiary of VWR or (iv) from and after the date hereof, individuals who
on the date hereof constitute the Board of Directors of VWR (together with
any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of VWR was approved by a vote
of 66-2/3% of the directors then still in office who were either directors
on the date hereof or whose election or nomination for election was
previously so approved) cease for any reason to
8
<PAGE>
constitute a majority of the Board of Directors of VWR then in office.
"Closing Date": the date on which the Banks make their initial Loans.
------------
"Co-Agents": the collective reference to all of the Agents other than
---------
the Administrative Agent.
"Code": the Internal Revenue Code of 1986, as amended from time to
----
time.
"Collateral": all property and interests in property and proceeds
----------
thereof now owned or hereafter acquired by any Borrower in or upon which a
lien shall be created or purported to be created under any of the Security
Documents.
"Commercial Letter of Credit": as defined in subsection 2.4(b)(i)(B).
---------------------------
"Commitment Fees": those certain fees payable to the Banks on the
---------------
unused Commitments as described in subsection 5.1(a).
"Commitment Fee Rate": on each day during each fiscal quarter of the
-------------------
Borrowers, the percentage per annum set forth below opposite the Senior
Debt/EBITDA Ratio shown on the Senior Debt/EBITDA Ratio Certificate
required pursuant to subsection 8.2(c) to be delivered for the immediately
preceding fiscal quarter:
<TABLE>
<CAPTION>
Senior Debt/EBITDA Ratio Commitment Fee Rate
------------------------ -------------------
<S> <C>
Less than 1.50 to 1.0 .20%
Less than 2.00 to 1.0 but
greater than or equal to
1.50 to 1.0 .25%
Less than 2.50 to 1.0 but
greater than or equal to
2.00 to 1 .30%
Less than 3.00 to 1 but
greater than or equal to
2.50 to 1 .375%
Less than 3.50 to 1.0 but
greater than or equal to
3.00 to 1.0 .375%
</TABLE>
9
<PAGE>
<TABLE>
<S> <C>
Equal to or greater than
3.50 to 1.0 .50%
</TABLE>
; provided, however, that, (a) in the event that no Senior Debt/EBITDA
-------- ------- ----
Ratio Certificate has been delivered for a fiscal quarter prior to the last
day of the next succeeding fiscal quarter, the Commitment Fee Rate during
such fiscal quarter shall be that applicable when the Senior Debt/EBITDA
Ratio is equal to or greater than 3.50 to 1.0, (b) in the event that the
actual Senior Debt/EBITDA Ratio for any fiscal quarter is subsequently
determined to be greater than that set forth in the Senior Debt/EBITDA
Ratio Certificate for such fiscal quarter, the Commitment Fee Rate shall be
recalculated for the applicable period based upon such actual Senior
Debt/EBITDA Ratio and (c) anything in this definition to the contrary
notwithstanding, until receipt by the Administrative Agent of the Senior
Debt/EBITDA Ratio Certificate for the fiscal quarter ended September 30,
1996, the Commitment Fee Rate shall be that applicable when the Senior
Debt/EBITDA Ratio is less than 3.50 to 1 but greater than or equal to 3.00
to 1. Any additional Commitment Fee that is due to the Banks resulting from
the operation of clause (b) above shall be payable (a) with respect to the
Revolving Credit Commitments, by the U.S. Dollar Borrowers jointly and
severally, and (b) with respect to the Canadian Dollar Commitments, by VWR
Canada, in each case within five (5) days after receipt of a written demand
therefor from the Administrative Agent.
"Commitment Period": with respect to the Revolving Credit Commitment
-----------------
or the Canadian Dollar Commitment, the period from and including the date
hereof to but not including the Termination Date, or such earlier date on
which such Commitment shall terminate as provided herein.
"Commitments": the Revolving Credit Commitments, the Swing Line
-----------
Commitment and the Canadian Dollar Commitments.
"Commonly Controlled Entity": an entity, whether or not incorporated,
--------------------------
which is under common control with VWR within the meaning of Section 4001
of ERISA or is part of a group which includes VWR and which is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.
"Consolidated Capital Expenditures": for any period, the gross amount
---------------------------------
of additions during such period to the fixed assets, property, plant and
equipment of VWR and its Subsidiaries, all as such additions would be
reflected on a consolidated balance sheet of VWR and its Subsidiaries
prepared in accordance with GAAP less the Net Proceeds in
10
<PAGE>
such period from any Asset Sale permitted under subsection 9.5(e).
"Consolidated EBITDA": for any period, Consolidated Net Income for
-------------------
such period, plus the amount of income taxes, interest expense,
----
depreciation and amortization deducted from earnings in determining such
Consolidated Net Income; provided that, there shall be excluded therefrom
-------- ----
(a) any addition for non-operating gains (including, without limitation,
extraordinary or unusual gains, gains from discontinuance of operations or
gains arising from the sale of capital assets) and (b) any subtraction for
non-operating losses during such period (including, without limitation,
extraordinary or unusual losses, losses from the discontinuance of
operations or losses arising from the sale of capital assets).
"Consolidated Fixed Charges": for any period the sum of (a)
--------------------------
Consolidated Interest Expense for such period; (b) required amortization of
Indebtedness (other than Indebtedness hereunder, under the other Loan
Documents or permitted under subsection 9.3(i)), determined on a
consolidated basis in accordance with GAAP, for the period involved; (c)
required amortization of the Loans pursuant to subsection 3.4 and clause
(y) of the last sentence of subsections 2.2 and 4.2; (d) Consolidated
Capital Expenditures for such period; and (e) consolidated income tax
expense for such period exclusive of any deferred portion thereof.
"Consolidated Interest Expense": for any period, the amount of cash
-----------------------------
interest expense deducted from earnings of VWR and its Subsidiaries in
determining Consolidated Net Income for such period in accordance with
GAAP.
"Consolidated Net Income": for any fiscal period, the net income (or
-----------------------
loss) after income taxes of VWR and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Worth": as of the date of determination, all items
----------------------
which in conformity with GAAP would be included under shareholders' equity
on a consolidated balance sheet of VWR and its Subsidiaries at such date.
"Consolidated Total Debt": at any date, without duplication, the
-----------------------
aggregate of all Indebtedness (including the current portion thereof but
excluding Indebtedness permitted under subsection 9.3(i)) of VWR and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
11
<PAGE>
"Contingent Obligation": as to any Person any guarantee of payment or
---------------------
performance by such Person or any Indebtedness or other obligation of any
other Person, or any agreement to provide financial assurance with respect
to the financial condition, or the payment of the obligations of, such
other Person (including, without limitation, purchase or repurchase
agreements, reimbursement agreements with respect to letters of credit or
acceptances, indemnity arrangements, grants of security interests to
support the obligations of another Person, keepwell agreements and take-or-
pay or through-put arrangements) which has the effect of assuring or
holding harmless any third Person against loss with respect to one or more
obligations of such third Person; provided, however, the term Contingent
-------- -------
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation of any Person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made and (b) the maximum
amount for which such contingently liable Person may be liable pursuant to
the terms of the instrument embodying such Contingent Obligation, unless
such primary obligation and the maximum amount for which such contingently
liable Person may be liable are not stated or determinable, in which case
the amount of such Contingent Obligation shall be such contingently liable
Person's maximum reasonably anticipated liability in respect thereof as
determined by VWR in good faith.
"Contractual Obligation": as to any Person, any provision of any
----------------------
security issued by such Person or any provision of any agreement,
instrument or other undertaking to which such Person is a party or by which
it or any of its property is bound.
"CoreStates": CoreStates Bank, N.A.
----------
"Default": any of the events specified in Section 10, whether or not
-------
any requirement for the giving of notice, the lapse of time, or both, or
any other condition precedent therein set forth, has been satisfied.
"Distribution": in respect of any corporation, (a) dividends or other
------------
distributions on capital stock of the corporation (except distributions in
common stock of such corporation); (b) the redemption or acquisition of
such stock or of warrants, rights or other options to purchase such stock
(except when solely in exchange for common stock of such corporation); and
(c) any payment on account of, or the setting apart of any assets for a
sinking or other
12
<PAGE>
analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of any share of any class of Capital Stock of such
corporation or any warrants or options to purchase any such stock.
"Dollars" and "$": dollars in lawful currency of the United States of
------- -
America, except when preceded by the word "Canadian" or the abbreviation
"CAN".
"Eligible Inventory": means as of any date of determination thereof,
------------------
all inventory of the Borrowers at the lower of cost or market value, on a
first-in first-out basis in accordance with GAAP, excluding any mark-up
paid by a Borrower in connection with inventory purchased from another
Borrower (or any Subsidiary thereof), less the following (determined
without duplication): (a) all inventory in which the Banks do not have a
valid and enforceable first priority security interest, subject to no other
Liens (other than for taxes not yet due and payable); (b) inventory on
consignment to any Person and (c) inventory classified by a Borrower as
"slow-moving" or "obsolete".
"Eligible Receivables": means, as of any date of determination
--------------------
thereof, the aggregate of all trade receivables of the Borrowers, less the
following (determined without duplication):
(a) any receivables not payable in United States or Canadian
Dollars;
(b) any receivable which, at the date of issuance of the invoice
therefor, was by its terms payable more than thirty (30) days after
shipment of the related inventory;
(c) any receivable due from VWR or any of its Subsidiaries;
(d) any receivable with respect to all or part of which a check,
promissory note, draft, trade acceptance or other instrument for the
payment of money has been presented for payment and returned
uncollected for any reason;
(e) any receivable as to which the applicable owner knows that
any one or more of the following events has occurred with respect to
the account debtor: death or judicial declaration of incompetency; the
filing by or against such account debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts,
adjudication of
13
<PAGE>
bankruptcy, or other relief under the bankruptcy, insolvency, or
similar laws of the United States, any state or territory thereof, or
any foreign jurisdiction, now or hereafter in effect; the making of
any general assignment by such account debtor for the benefit of
creditors; the appointment of a receiver or trustee for such account
debtor or for any of the assets of such account debtor, including,
without limitation, the appointment of or taking possession by a
"custodian," as defined in the Bankruptcy Code; the institution by or
against such account debtor of any other type of insolvency proceeding
(under the bankruptcy laws of the United States or elsewhere) or of
any formal or informal proceeding for the dissolution or liquidation
of, settlement of claims against, or winding up of affairs of, such
account debtor; the sale, assignment, or transfer of all or
substantially all of the assets of such account debtor; the inability
to pay or the nonpayment by such account debtor of its debts generally
as they become due; the cessation of the business of such account
debtor as a going concern; or, in the Administrative Agent's sole
reasonable judgment, unsatisfactory general financial performance or
credit standing or likelihood of unsatisfactory general financial
performance or credit standing in the near future;
(f) any receivable due from an account debtor incorporated under
the laws of any jurisdiction other than the United States of America,
a political subdivision thereof, Canada or a political subdivision
thereof, or whose principal place of business is or substantially all
of whose assets are located outside of the United States of America or
Canada;
(g) any receivable which is not paid within ninety (90) days of
the invoice date;
(h) any receivable to the extent there is any unresolved dispute,
defense, offset or counterclaim with or by the account debtor;
(i) any receivable as to which either (i) the perfection,
enforceability or validity of the Banks' security interest in such
receivable, or (ii) the Banks' rights or ability to obtain direct
payment to the Banks of the proceeds of such receivable, is governed
by any federal or state statutory requirements other than those of the
Uniform Commercial Code in the United States or applicable personal
property legislation in Canada;
14
<PAGE>
(j) any receivable (i) as to which the Banks do not have a valid
and enforceable first priority security interest, subject to no other
Liens (other than for taxes not yet due and payable) or (ii) as to
which the Banks do not have a right of direct payment upon an Event of
Default;
(k) any receivable that has not been created in the ordinary
course of business; and
(l) any receivable representing an obligation for goods placed on
consignment and not yet sold by the consignee, or for goods on
approval or on a sale-or-return basis or subject to any other
repurchase or return arrangement, other than normal return policies
for breach of warranty or for defective products.
"Environmental Laws": any and all foreign, Federal, state, local or
------------------
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or binding requirements of any Governmental Authority, or binding
Requirement of Law regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment, as now or
may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
---------------------------------
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"Eurodollar Base Rate": with respect to any Eurodollar Loan for any
--------------------
Interest Period, an interest rate per annum equal to the average (rounded
upwards, if necessary, to the next 1/16 of 1%, if such average is not such
a multiple) of the rate per annum at which deposits in U.S. Dollars are
offered by the principal office of the Administrative Agent in London,
England, to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest
Period in an amount
15
<PAGE>
approximately equal in principal amount to the Administrative Agent's
portion of such Eurodollar Loan.
"Eurodollar Loan": any Loan bearing interest at a rate determined by
---------------
reference to the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 10,
----------------
provided that any requirement for the giving of notice, the lapse of time,
--------
or both, or any other condition, has been satisfied.
"Excess Cash Flow": for any period, the amount equal to (a)
----------------
Consolidated EBITDA for such period less (b) the sum of, without
duplication, (i) Consolidated Fixed Charges for such period and (ii) any
optional payments of principal on the Loans (except those prepayments of
Revolving Credit Loans, Swing Line Loans or Canadian Dollar Loans that are
not made simultaneously with a reduction of the Revolving Credit
Commitments, the Swing Line Commitment or the Canadian Dollar Commitments,
as the case may be, by an amount equal to the amount of such prepayments)
made during such period.
"Existing Credit Agreement": means the Amended and Restated Credit
-------------------------
Agreement among the Borrowers, the banks parties thereto and CoreStates, as
agent, dated October 27, 1994, as heretofore amended, supplemented or
otherwise modified.
"Existing Letters of Credit": each of the unexpired letters of credit
--------------------------
issued on behalf of a U.S. Dollar Borrower by the Issuing Bank outstanding
on the Closing Date, as set forth in Schedule III hereto.
"Exposure": as to any Bank at any date, an amount equal to the
--------
aggregate U.S. Dollar Equivalent of the sum of (a) the aggregate principal
amount of all Loans made by such Bank then outstanding and (b) with respect
to U.S. Dollar Banks, such Bank's share of the L/C Obligations then
outstanding.
16
<PAGE>
"Extensions of Credit": the collective reference to Loans made and
--------------------
Letters of Credit issued under this Agreement.
"Federal Funds Effective Rate": for any day, the weighted average of
----------------------------
the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by
the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter Agreement": the letter agreement between VWR and the
--------------------
Agents dated May 23, 1995 in which VWR agrees, among other things, to pay
such parties the fees provided in such letter, as the same may be amended,
supplemented or otherwise modified from time to time.
"GAAP": at any time with respect to the determination of the
----
character or amount of any asset or liability or item of income or expense,
or any consolidation or other accounting computation, generally accepted
accounting principles as in effect on the date of, or at the end of the
period covered by, the financial statements from which such asset,
liability, item of income, or item of expense, is derived, or, in the case
of any such computation, as in effect on the date when such computation is
required to be determined.
"Governmental Authority": any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Indebtedness": of any Person at any date:
------------
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices),
(b) any other indebtedness which is evidenced by a note, bond,
debenture or similar instrument,
(c) all Capital Lease Obligations of such Person,
17
<PAGE>
(d) all obligations of such Person in respect of outstanding
letters of credit, acceptances and similar obligations created for the
account of such Person,
(e) all liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise
become liable for the payment thereof, and
(f) net liabilities of such Person under interest rate cap
agreements, interest rate swap agreements, foreign currency exchange
agreements, netting agreements and other hedging agreements or
arrangements (calculated on a basis satisfactory to the Administrative
Agent and in accordance with accepted practice).
The Indebtedness of any Person shall include any Indebtedness of any
partnership in which such Person is the general partner.
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvency Event of Default": as defined in subsection 2.16(a).
---------------------------
"Insolvent": pertaining to a condition of Insolvency.
---------
"Intellectual Property": has the meaning ascribed thereto in
---------------------
subsection 6.16.
"Interest Coverage Ratio": for any period, the ratio of (a)
-----------------------
Consolidated EBITDA for such period to (b) Consolidated Interest Expense
for such period.
"Interest Payment Date": (a) as to any Base Rate Loan or Canadian
---------------------
Base Rate Loan, the last day of each March, June, September and December
while such Loan is outstanding, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest
Period, (c) as to any Eurodollar Loan having an Interest Period longer than
three months, the day which is (i) three months after the first day of such
Interest Period and (ii) the last day of such Interest Period, (d) as to
any Canadian COF Rate Loan having an Interest Period of ninety (90) days or
less, the last day of such Interest Period and (e) as to any Canadian COF
Rate Loan having an Interest Period longer than ninety (90) days, the day
which is (i) ninety days after the
18
<PAGE>
first day of such Interest Period and (ii) the last day of such Interest
Period.
"Interest Period": (a) with respect to any Eurodollar Loan:
---------------
(i) initially the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the U.S. Dollar Borrowers in their notice of borrowing or notice of
conversion, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
U.S. Dollar Borrowers by irrevocable notice to the Administrative
Agent not less than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
(b) with respect to any Canadian COF Rate Loan:
(i) initially the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Canadian COF
Rate Loan and ending thirty, sixty, ninety or one hundred and eighty
days thereafter, as selected by VWR Canada in its notice of borrowing
or notice of conversion, given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Canadian COF Rate
Loan and ending thirty, sixty, ninety or one hundred and eighty days
thereafter, as selected by VWR Canada by irrevocable notice to the
Canadian Funding Banks and the Administrative Agent not less than one
Business Day prior to the last day of the then current Interest Period
with respect thereto;
provided that, the foregoing provisions relating to Interest Periods are
-------- ----
subject to the following:
(i) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would
fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
19
<PAGE>
(ii) with respect to Eurodollar Loans, any Interest Period that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month;
(iii) an Interest Period that otherwise would extend beyond the
Termination Date shall end on the Termination Date; and
(iv) the Borrowers shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan or Canadian COF
Rate Loan during an Interest Period for such Loan.
"Interest Rate Protection Agreements": as defined in subsection 8.11.
-----------------------------------
"Issuing Bank": CoreStates, or such other Bank as designated by VWR
------------
and approved by the Required Banks.
"L/C Coverage Requirement": with respect to each Letter of Credit at
------------------------
any time, 100% of the maximum amount available to be drawn thereunder at
such time (determined without regard to whether any conditions to drawing
could be met at such time).
"L/C Obligations": at any time, an amount equal to the sum of (a)
---------------
100% of the maximum amount available to be drawn under all Letters of
Credit outstanding at such time (determined without regard to whether any
conditions to drawing could be met at such time) and (b) the aggregate
amount of drawings under Letters of Credit which have not then been
reimbursed pursuant to subsection 2.8(a).
"L/C Participant": in respect of each Letter of Credit, each U.S.
---------------
Dollar Bank (other than the Issuing Bank) in its capacity as the holder of
a participating interest in such Letter of Credit.
"Letter of Credit": as defined in subsection 2.4(a).
----------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Capital Lease having
20
<PAGE>
substantially the same economic effect as any of the foregoing).
"Loan Documents": this Agreement, the Notes, the Applications, the
--------------
Security Agreement, the Pledge Agreements, the VWR Canada Subordination
Agreement, the U.S. Dollar Borrowers Guarantee and the Canadian Security
Documents.
"Loans": the collective reference to the Revolving Credit Loans, the
-----
Swing Line Loans, the Bridge Loans, the Canadian Dollar Loans and the Term
Loans.
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
business, operations, property or condition (financial or otherwise) of VWR
and the other U.S. Dollar Borrowers taken as a whole, (b) the ability of
VWR and the other U.S. Dollar Borrowers to perform their obligations under
this Agreement, the Notes or any other Loan Document or (c) the validity or
enforceability of this Agreement, the Notes or any of the other Loan
Documents or the rights or remedies of the Administrative Agent or the
Banks hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphynels, and ureaformaldehyde insulation.
"Moody's": Moody's Investors Services, Inc.
-------
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Proceeds": (a) with respect to any Asset Sale, the amount equal
------------
to (i) the sum of (A) the aggregate amount received in cash (including any
cash received by way of deferred payment pursuant to a note receivable,
other non-cash consideration or otherwise, but only as and when such cash
is so received) in connection with such sale or other disposition and (B)
the aggregate amount of any tax refunds received or any reduction in tax
liability realized by VWR or any of its Subsidiaries as a result of any tax
loss realized by VWR or a Subsidiary in connection with such Asset Sale
minus (ii) the sum of (A) the principal amount of any Indebtedness which is
-----
secured by the asset that is the subject of such Asset Sale (other than
Indebtedness assumed by the purchaser of such asset) and which is required
to be, and is, repaid in connection with such Asset Sale or other
21
<PAGE>
disposition thereof (other than Indebtedness hereunder) and (B) the
reasonable fees, commissions, income taxes and other out-of-pocket expenses
incurred by VWR or such Subsidiary in connection with such Asset Sale other
than to VWR or any Affiliate thereof;
(b) with respect to the sale or issuance of any Capital Stock by
VWR or any of its Subsidiaries after the Closing Date, the net amount equal
to (i) the aggregate amount received in cash in connection with such sale
or issuance minus (ii) the reasonable fees, commissions and other out-of-
-----
pocket expenses incurred by VWR or such Subsidiary in connection with such
sale or issuance other than to VWR or any Affiliate thereof; and
(c) with respect to the incurrence of any Indebtedness by VWR or
any of its Subsidiaries (other than under this Agreement or the
Subordinated Debt), the net amount equal to (i) the aggregate amount
received in cash from the incurrence of such Indebtedness minus (ii) the
-----
sum of (A) the principal amount of any Indebtedness which is immediately
repaid in connection with such incurrence (i.e., a refinancing) and (B) the
----
reasonable fees, commissions and other out-of-pocket expenses incurred by
VWR or such Subsidiary payable to Persons in connection with such
incurrence other than to VWR or an Affiliate thereof.
"Notes": the collective reference to the Revolving Credit Notes, the
-----
Swing Line Note, the Bridge Notes, the Term Notes and the Canadian Dollar
Notes.
"Notice of Borrowing": with respect to a Loan of any Type, a notice
-------------------
from the applicable Borrower(s) in respect of such Loan, containing the
information in respect of such Loan and delivered to the Person, in the
manner and by the time specified for a Notice of Borrowing in respect of
such Type of Loan pursuant to the terms hereof. A form of the Notice of
Borrowing for Revolving Credit Loans and Swing Line Loans is attached
hereto as Exhibit F-1; a form of the Notice of Borrowing for Canadian
Dollar Loans is attached hereto as Exhibit F-2.
"Notice of Bridge Loan Refinancing": as defined in subsection
---------------------------------
2.20(a).
"Notice of Swing Line Refunding": as defined in subsection 2.16(a).
------------------------------
"OECD": the Organization for Economic Cooperation and Development.
----
22
<PAGE>
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA.
"Permitted Investments":
---------------------
(a) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by any agency
thereof and backed by the full faith and credit of the United States
of America, in each case maturing within six months from the date of
acquisition thereof;
(b) marketable general obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within six months
from the date of acquisition, having one of the two highest ratings
generally obtainable from either S&P or Moody's;
(c) without limiting the provisions of paragraph (d) of this
definition, commercial paper maturing no more than six months from the
date of acquisition thereof and, at the time of acquisition, having a
rating of A-1 (or the equivalent) or higher from S&P and P-1 (or the
equivalent) or higher from Moody's;
(d) commercial paper maturing no more than six months from the
date of acquisition thereof and issued by (i) the holding company of
any bank that has (A) combined capital, surplus and undivided profits
(less any undivided losses) of not less than $250 million, (B) a Keefe
Bank Watch Rating of C or better and (C) commercial paper having a
rating of A-2 (or the equivalent) from S&P's or P-2 (or the
equivalent) of higher from Moody's;
(e) domestic and Eurodollar certificates of deposit, time or
demand deposits or bankers' acceptances maturing within six months
from the date of acquisition issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by:
(i) any Bank,
(ii) any other commercial bank organized under the laws of
the United States of America or any state thereof or the District
of Columbia having combined capital, surplus and undivided
profits (less any undivided losses) of not less than $500
million,
23
<PAGE>
(iii) any branch located in the United States of America of a
commercial bank organized under the laws of the United Kingdom,
Canada, France, Germany or Japan having combined capital, surplus
and undivided profits (less any undivided losses) of not less
than $500 million, or
(iv) any domestic commercial bank the deposits of which are
guaranteed by the Federal Deposit Insurance Corporation, provided
--------
that (A) the full amount of the deposits of the Person making
----
such Permitted Investment are so guaranteed and (B) the aggregate
amount of all Permitted Investments under this clause (iv) does
not exceed $500,000; and
(f) fully collateralized repurchase agreements with a term of not
more than 30 days for underlying securities of the type described in
paragraphs (a) and (b) of this definition, entered into with any
institution meeting the qualifications specified in clause (d) or
subclauses (i) through (iii) of clause (e) of this definition;
provided, that, in each case, such obligations are payable in U.S. Dollars
-------- ----
or Canadian Dollars.
"Person": an individual, partnership, corporation, limited liability
------
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Plan": at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which VWR or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
"Pledge Agreement": the collective reference to (a) the Pledge
----------------
Agreement by VWR in the form of Exhibit D-1 attached hereto and (b) the
Pledge Agreement by Scientific Holdings in the form of Exhibit D-2, in each
case as the same may be amended, supplemented or otherwise modified from
time to time.
"Prime Rate": the rate of interest per annum publicly announced from
----------
time to time by CoreStates as its prime rate in effect at its principal
office in Philadelphia, Pennsylvania; each change in the Prime Rate shall
be
24
<PAGE>
effective on the date such change is publicly announced as effective.
"Properties": the collective reference to the facilities and
----------
properties owned, leased or operated by VWR or any of its Subsidiaries.
"Proxy Statement": as defined in subsection 6.14.
---------------
"Purchasing Bank": as defined in subsection 12.6(b).
---------------
"Quebec Hypothecation Agreement": the Quebec Hypothecation Agreement
------------------------------
in the form of Exhibit L attached hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"Refunding Date": as defined in subsection 2.16(b).
--------------
"Register": as defined in subsection 12.6(d).
--------
"Regulation U": Regulation U of the Board of Governors of the Federal
------------
Reserve System as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board of Governors of the Federal
------------
Reserve System as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Reimbursement Obligation": in respect of each Letter of Credit, the
------------------------
obligation of the U.S. Dollar Borrowers to reimburse the Issuing Bank for
all drawings made thereunder in accordance with subsection 2.8(a) and the
Application related to such Letter of Credit for amounts drawn under such
Letter of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section
----------------
4043(c)(1), (2), (4), (5), (6), (10) and (13) of ERISA.
"Required Banks": at any time, (a) so long as the Revolving Credit
--------------
Commitments, the Swing Line Commitment or the Canadian Dollar Commitments
are in effect, Banks the Total Commitment Percentages of which at such time
aggregate at least 51% or (b) at any time after the Commitments shall have
expired or been terminated, Banks the Exposures of
25
<PAGE>
which constitute at least 51% of the aggregate Exposures at such time;
provided that, for purposes of this definition, (i) included in the
-------- ----
Exposure of each U.S. Dollar Bank other than CoreStates shall be such
Bank's Swing Line Participation Amount and (ii) the Exposure of CoreStates
shall exclude the aggregate amount of the Swing Line Participation Amounts
of the other U.S. Dollar Banks.
"Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case binding
upon such Person or any of its property or to which such Person or any of
its property is subject.
"Responsible Officer": with respect to any Borrower, the chief
-------------------
executive officer, president, chief financial officer, treasurer, assistant
treasurer or vice president for financial or legal affairs of such Borrower
and, with respect to VWR Canada, the assistant secretary. Unless otherwise
qualified, all references to a "Responsible Officer" in this Agreement
shall refer to a Responsible Officer of VWR.
"Revolving Credit and Canadian Dollar Exposure": at any date, an
---------------------------------------------
amount equal to the sum of (a) the aggregate Revolving Credit Exposure at
such time and (b) the aggregate Canadian Dollar Exposure at such time.
"Revolving Credit Commitment": as to any U.S. Dollar Bank, the
---------------------------
obligation of such Bank to make Revolving Credit Loans and to issue and/or
acquire participating interests in Letters of Credit hereunder in an
aggregate principal and/or face amount at any one time outstanding not to
exceed the amount set forth opposite such Bank's name on Schedule I hereto
under the caption "Revolving Credit Commitment," as such amount may be
changed from time to time in accordance with the provisions of this
Agreement.
"Revolving Credit Commitment Percentage": as to any U.S. Dollar Bank
--------------------------------------
at any time, the percentage which such Bank's Revolving Credit Commitment
then constitutes of the aggregate Revolving Credit Commitments at such time
(or, at any time after the Revolving Credit Commitments shall have expired
or terminated, the percentage which the amount of such U.S. Dollar Bank's
Revolving Credit Exposure constitutes of the aggregate amount of the
Revolving Credit Exposure of all U.S. Dollar Banks at such time).
26
<PAGE>
"Revolving Credit Exposure": at any date, an amount equal to the sum
-------------------------
of (a) the aggregate principal amount of Revolving Credit Loans made by the
U.S. Dollar Banks then outstanding and (b) the L/C Obligations then
outstanding.
"Revolving Credit Loans": the meaning ascribed thereto in subsection
----------------------
2.1.
"Revolving Credit Note": as defined in subsection 2.2, as the same
---------------------
may be amended, supplemented or otherwise modified from time to time.
"S&P": Standard & Poor's Rating Group, a division of McGraw-Hill
---
Corporation.
"Security": "security" as defined in Section 2(1) of the Securities
--------
Act of 1933, as amended.
"Security Agreement": the Security Agreement in the form of Exhibit E
------------------
attached hereto, as the same may be amended, supplemented or otherwise
modified from time to time.
"Security Documents": the Security Agreement, the Pledge Agreements,
------------------
and the Canadian Security Documents.
"Senior Debt": at any date, Consolidated Total Debt exclusive of
-----------
Subordinated Debt then outstanding.
"Senior Debt/EBITDA Ratio": on any date, the ratio of Senior Debt to
------------------------
Consolidated EBITDA for the four consecutive fiscal quarters of VWR most
recently ended prior to such date.
"Senior Debt/EBITDA Ratio Certificate": as defined in subsection
------------------------------------
8.2(c).
"Single Employer Plan": any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
"Standby Letter of Credit": as defined in subsection 2.4(b)(i)(A).
------------------------
"Subordinated Debt": Indebtedness of VWR under that certain Common
-----------------
Share and Debenture Agreement dated May 24, 1995, as amended (with the
consent of the Agents) on or about September 15, 1995, between VWR and EM
Industries, Incorporated (as assigned by EM Industries, Incorporated to its
Affiliate EM Laboratories, Incorporated under an Assignment and Assumption
Agreement dated June 13, 1995) and the accompanying Subordinated Debenture
dated September 15,
27
<PAGE>
1995 due September 14, 2005 and any other Subordinated Debenture issued in
accordance with the terms of said Common Share and Debenture Agreement, as
the same may be amended, supplemented or otherwise modified from time to
time.
"Subsidiary": as to any Person, a corporation, partnership or other
----------
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only be reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of VWR.
"Swing Line Commitment": CoreStates' obligation to make Swing Line
---------------------
Loans pursuant to subsection 2.13.
"Swing Line Loans": as defined in subsection 2.13(a).
----------------
"Swing Line Note": as defined in subsection 2.13(b).
---------------
"Swing Line Participation Amount": as defined in subsection 2.16(b).
-------------------------------
"Taxes": as defined in subsection 5.10.
-----
"Term Loan Commitment": as to any U.S. Dollar Bank, the obligation of
--------------------
such Bank to make a Term Loan to the U.S. Dollar Borrowers in an aggregate
amount not to exceed the amount set forth opposite such Bank's name on
Schedule I hereto under the caption "Term Loan Commitment," as such amount
may be changed from time to time in accordance with the provisions of this
Agreement.
"Term Loan Percentages" as to any U.S. Dollar Bank at any time, the
---------------------
percentage which such Bank's outstanding Term Loan then constitutes of the
aggregate outstanding Term Loans of the U.S. Dollar Banks at such time.
"Term Loans": as defined in subsection 3.1.
----------
"Term Note": as defined in subsection 3.2.
---------
"Termination Date": September 13, 2000.
----------------
28
<PAGE>
"Total Commitment Percentage": as to any Bank at any time, the
---------------------------
percentage which the sum of such Bank's Revolving Credit Commitment and the
U.S. Dollar Equivalent of its Canadian Dollar Commitment then constitutes
of the aggregate U.S. Dollar Equivalent of the Revolving Credit Commitments
and the Canadian Dollar Commitments at such time (or at any time after the
Commitments have expired or terminated, the percentage which the amount of
such Bank's Exposure constitutes of the aggregate amount of the Exposure of
all the Banks at such time; provided that, for purposes of this definition
-------- ----
(a) included in the Exposure of each U.S. Dollar Bank other than CoreStates
shall be such Bank's Swing Line Participation Amount and (b) the Exposure
of CoreStates shall exclude the aggregate amount of the Swing Line
Participation Amounts of the U.S. Dollar Banks).
"Tranche": the collective reference to (a) Eurodollar Loans whose
-------
Interest Periods begin on the same date and end on the same later date
(whether or not such Loans originally were made on the same day) and (b)
Canadian COF Rate Loans whose Interest Periods begin on the same date and
end on the same later date (whether or not such Loans originally were made
on the same day).
"Type": when used in respect of any Loan, shall refer to the Rate by
----
reference to which interest on such Loan is determined. For purposes
hereof, "Rate" shall include the Eurodollar Rate, the Base Rate, the
Canadian Base Rate and the Canadian COF Rate.
"U.S. Dollar Banks": the Banks other than the Canadian Funding Banks;
-----------------
provided that, a Canadian Funding Bank that has also made Revolving Credit
-------- ----
Loans or Term Loans shall be considered both a Canadian Funding Bank and a
U.S. Dollar Bank.
"U.S. Dollar Borrowers": the Borrowers other than VWR Canada.
---------------------
"U.S. Dollar Borrowers Guarantee": the Guaranty from the U.S. Dollar
-------------------------------
Borrowers in the form of Exhibit C hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"U.S. Dollar Borrowing Base": means, as of any date of determination,
--------------------------
the sum of (a) eighty-five percent (85%) of the aggregate face amount of
all U.S. Eligible Receivables at such date and (b) fifty percent (50%) of
the book value of all U.S. Eligible Inventory at such date.
29
<PAGE>
"U.S. Dollar Borrowing Base Certificate": as defined in subsection
--------------------------------------
8.2(f)(i).
"U.S. Dollar Equivalent": as of any date of determination with
----------------------
respect to an amount stated in Canadian Dollars, the amount of Dollars that
would be required to purchase such amount of Canadian Dollars, determined
based on the spot selling rate of U.S. Dollars into Canadian Dollars for
the trading day prior to such date of determination as reported in the Wall
Street Journal "Exchange Rates" section on such date of determination, or
if not so reported in the Wall Street Journal on such date, then as
reasonably determined by the Administrative Agent.
"U.S. Eligible Inventory": means, as of any date of determination,
-----------------------
all Eligible Inventory of the U.S. Dollar Borrowers at such time.
"U.S. Eligible Receivables": means, as of any date of determination,
-------------------------
all Eligible Receivables of the U.S. Dollar Borrowers at such time.
"Uniform Customs": the Uniform Customs and Practice for Documentary
---------------
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, as the same may be amended, supplemented or otherwise modified from
time to time.
"Voting Stock": capital stock of any class or classes of a
------------
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the directors (or Persons
performing similar functions).
"VWR Canada Subordination Agreement": the Subordination Agreement
----------------------------------
from VWR Canada in the form of Exhibit J hereto, as the same may be
amended, supplemented or otherwise modified from time to time.
"Wholly-Owned Subsidiary": at any time, any Subsidiary one hundred
-----------------------
percent (100%) of all of the equity Securities (except directors'
qualifying shares) and voting Securities of which are owned by any one or
more of VWR and its other Wholly-Owned Subsidiaries at such time.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
30
<PAGE>
(b) As used herein and in the Notes and the other Loan Documents,
and any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms relating to VWR and its Subsidiaries not defined in
subsection 1.1 and accounting terms partly defined in subsection 1.1, to the
extent not defined, shall have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined in this Agreement shall
be equally applicable to both the singular and plural forms of such terms.
SECTION 2. REVOLVING CREDIT LOANS; LETTERS OF CREDIT;
SWING LINE LOANS; AND BRIDGE LOANS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
----------------------------
conditions hereof, each U.S. Dollar Bank severally agrees to make revolving
credit loans in U.S. Dollars (the "Revolving Credit Loans") to the U.S. Dollar
----------------------
Borrowers on a joint and several basis from time to time during the Commitment
Period in an aggregate principal amount at any one time outstanding which, when
added to such Bank's Revolving Credit Commitment Percentage of the then
outstanding L/C Obligations and such Bank's Swing Loan Participation Amount,
does not exceed the amount of such Bank's Revolving Credit Commitment; provided
--------
that, no Revolving Credit Loan shall be made if, after giving effect to the
- ----
making of such Loan and the simultaneous application of the proceeds thereof,
the sum of (i) the aggregate amount of the Revolving Credit Exposure at such
time and (ii) the aggregate principal amount of the Swing Line Loans outstanding
at such time would exceed either (x) the U.S. Dollar Borrowing Base as of the
date of the most recent U.S. Dollar Borrowing Base Certificate furnished to the
Administrative Agent or (y) the aggregate amount of the Revolving Credit
Commitments at such time. The Revolving Credit Commitments may be terminated or
reduced from time to time pursuant to subsection 5.5. Within the foregoing
limits, the U.S. Dollar Borrowers may during the Commitment Period borrow, repay
and reborrow under the Revolving Credit Commitments, subject to and in
accordance with the terms and limitations hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans or (iii) a
31
<PAGE>
combination thereof, as determined by the U.S. Dollar Borrowers and notified to
the Administrative Agent in accordance with subsections 2.3 and 5.14; provided
--------
that, no Revolving Credit Loan shall be made as a Eurodollar Loan after the date
- ----
that is one month prior to the Termination Date.
(c) The failure of any U.S. Dollar Bank to make any Revolving
Credit Loan shall not in itself relieve any other U.S. Dollar Bank of its
obligation to lend hereunder (it being understood, however, that no Bank shall
be responsible for the failure of any other Bank to make any Loan required to be
made by such other Bank). Each Revolving Credit Loan shall be made in accordance
with the procedures set forth in subsection 2.3.
2.2 Revolving Credit Notes. The Revolving Credit Loans made by each
----------------------
U.S. Dollar Bank shall be evidenced by a promissory note of the U.S. Dollar
Borrowers, substantially in the form of Exhibit A-1, with appropriate insertions
as to payee, date and principal amount (a "Revolving Credit Note"), payable to
---------------------
the order of such U.S. Dollar Bank and in a principal amount equal to the amount
of the initial Revolving Credit Commitment of such U.S. Dollar Bank. Each U.S.
Dollar Bank is hereby authorized to record the date, Type and amount of each
Revolving Credit Loan made by such Bank, each continuation thereof, each
conversion of all or a portion thereof to another Type, the date and amount of
each payment or prepayment of principal thereof and, in the case of Eurodollar
Loans, the length of each Interest Period with respect thereto, on the schedule
annexed to and constituting a part of its Revolving Credit Note, and any such
recordation shall constitute prima facie evidence of the accuracy of the
----- -----
information so recorded, provided that the failure of any U.S. Dollar Bank to
-------- ----
make such recordation (or any error in such recordation) shall not affect the
obligations of the U.S. Dollar Borrowers hereunder or under such Note. Each
Revolving Credit Note shall (a) be dated the Closing Date, (b) be stated to
mature on the Termination Date and (c) provide for the payment of interest in
accordance with subsections 5.2 and 5.3.
2.3 Procedure for Revolving Credit Loans. (a) The U.S. Dollar
------------------------------------
Borrowers may borrow under the Revolving Credit Commitments during the
Commitment Period on any Business Day. The U.S. Dollar Borrowers shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., Philadelphia time, three Business Days
prior to the requested Borrowing Date, if all or any part of the requested
Revolving Credit Loans are to be initially Eurodollar Loans, or prior to 12:00
noon, Philadelphia time, one Business Day prior to the requested Borrowing Date
if all of the requested Revolving Credit Loans are to be initially Base Rate
Loans), specifying in the Notice of Borrowing (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii)
32
<PAGE>
whether the borrowing is to be of Eurodollar Loans, Base Rate Loans or a
combination thereof and (iv) if the borrowing is to be entirely or partly of
Eurodollar Loans, the amount of such Loan(s) and the length of the initial
Interest Period(s) therefor. Each borrowing under the Revolving Credit
Commitments of Eurodollar Loans shall be in an amount equal to $5,000,000 or
increments of $1,000,000 thereafter (or, if the aggregate Available Revolving
Credit Commitments at such time are less than $5,000,000, such lesser amount).
Each borrowing under the Revolving Credit Commitments of Base Rate Loans shall
be in an amount equal to $500,000 or increments of $100,000 thereafter (or, if
the aggregate Available Revolving Credit Commitments at such time are less than
$500,000, such lesser amount).
Upon receipt of a Notice of Borrowing from the U.S. Dollar Borrowers,
the Administrative Agent shall promptly notify each U.S. Dollar Bank thereof.
Each U.S. Dollar Bank will make the amount of its pro rata share of each
--- ----
borrowing (based on its Revolving Credit Commitment Percentage at that time)
available to the Administrative Agent for the account of the U.S. Dollar
Borrowers at the office of the Administrative Agent specified in subsection 12.2
prior to 10:00 A.M., Philadelphia time, on the Borrowing Date requested by the
U.S. Dollar Borrowers in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the U.S. Dollar Borrowers
by the Administrative Agent crediting the account of VWR on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Banks and in like funds as received by the Administrative Agent.
Unless the Administrative Agent shall have received notice from a U.S.
Dollar Bank prior to the date of any borrowing of Revolving Credit Loans that
such Bank will not make available to the Administrative Agent such Bank's pro
---
rata portion of such borrowing, the Administrative Agent may assume that such
- ----
Bank has made such portion available to the Administrative Agent on the date of
such borrowing in accordance with this subsection and the Administrative Agent
may, in reliance upon such assumption, make available to the U.S. Dollar
Borrowers on such date a corresponding amount. If and to the extent that such
Bank shall not have made such portion available to the Administrative Agent,
such Bank and the U.S. Dollar Borrowers (without prejudice to the U.S. Dollar
Borrowers' rights against such Bank) severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the U.S. Dollar Borrowers until the date such amount is repaid to the
Administrative Agent at (i) in the case of the U.S. Dollar Borrowers, the
interest rate applicable at the time to the Revolving Credit Loans comprising
such borrowing and (ii) in the case of such Bank, the Federal Funds Effective
Rate, provided,
--------
33
<PAGE>
that, if such Bank shall not pay such amount within three Business Days of such
- ----
Borrowing Date, the interest rate on such overdue amount shall, at the
expiration of such three-Business Day period, be the rate per annum applicable
to Base Rate Loans. If such Bank shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Bank's Revolving Credit
Loan as part of such borrowing for purposes of this Agreement.
(b) If in a Notice of Borrowing no election as to the Type of
Revolving Credit Loan is specified in any such notice, then the requested
Revolving Credit Loan shall be a Base Rate Loan. If a Eurodollar Loan is
requested but no Interest Period with respect to such Loan is specified in any
such notice, then the U.S. Dollar Borrowers shall be deemed to have selected an
Interest Period of one month's duration.
2.4 L/C Commitment. (a) Subject to the terms and conditions hereof,
--------------
the Issuing Bank, in reliance on the agreements of the other U.S. Dollar Banks
set forth in subsection 2.7(a), agrees to issue letters of credit ("Letters of
----------
Credit") for the account of the U.S. Dollar Borrowers on any Business Day during
- ------
the Commitment Period in such form as may be approved from time to time by the
Issuing Bank; provided, that no Letter of Credit shall be issued if, after
--------
giving effect thereto (i) the sum of (x) the aggregate amount of the Revolving
Credit Exposure at such time and (y) the aggregate principal amount of the Swing
Line Loans outstanding at such time would exceed either (A) the aggregate amount
of the Revolving Credit Commitments at such time or (B) the U.S. Dollar
Borrowing Base as of the date of the most recent U.S. Dollar Borrowing Base
Certificate furnished to the Administrative Agent, or (ii) the aggregate amount
of the L/C Obligations at such time would exceed $15,000,000.
(b) Each Letter of Credit shall;
(i) be denominated in Dollars and shall be (A) a standby
letter of credit (a "Standby Letter of Credit"), or (B) a commercial letter
---------------------------
of credit issued in respect of the purchase of goods or services (a
"Commercial Letter of Credit") by a Borrower in the ordinary course of
----------------------------
business; and
(ii) expire no later than the earlier of (A) 360 days (in the
case of Standby Letters of Credit) or 180 days (in the case of Commercial
Letters of Credit) after its date of issuance and (B) 5 Business Days prior
to the Termination Date.
34
<PAGE>
(c) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the Commonwealth of
Pennsylvania.
(d) The Issuing Bank shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Bank or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
2.5 Procedure for Issuance of Letters of Credit. The U.S. Dollar
-------------------------------------------
Borrowers may from time to time request that the Issuing Bank issue a Letter of
Credit by delivering to the Issuing Bank at its office for notices specified
herein an Application therefor, completed to the satisfaction of the Issuing
Bank, and such other certificates, documents and other papers and information as
the Issuing Bank may reasonably request. Upon receipt by the Issuing Bank of any
Application, the Issuing Bank will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Bank be required to issue any Letter of Credit earlier than (a) with
respect to Standby Letters of Credit, three (3) Business Days, and (b) with
respect to Commercial Letters of Credit, one Business Day, after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Bank and the U.S. Dollar Borrowers. The Issuing Bank shall promptly
after issuing a Standby Letter of Credit furnish copies thereof to each Bank. In
addition, the Issuing Bank shall within ten days after the end of each month,
send to each Bank and VWR a schedule of outstanding Letters of Credit as of the
end of the prior month detailing for each such outstanding Letter of Credit (a)
the face amount outstanding, (b) its issuance date and (c) its maturity date.
2.6 Fees, Commissions and Other Charges. (a) The U.S. Dollar
-----------------------------------
Borrowers shall pay to the Administrative Agent, for the account of the U.S.
Dollar Banks (including the Issuing Bank) pro rata according to their respective
--- ----
Revolving Credit Commitment Percentages, a letter of credit commission with
respect to each Letter of Credit, computed at a rate equal to the then
Applicable Margin for Eurodollar Loans on the daily average undrawn face amount
of such Letter of Credit (computed on the basis of the actual number of days
such Letter of Credit is outstanding in a year of 360 days). Such commissions
shall be payable in arrears on the last Business Day of each March, June,
September and December to occur after the date of issuance of
35
<PAGE>
each Letter of Credit, and on the Termination Date or such earlier date as
the Revolving Credit Commitments are terminated, and shall be nonrefundable. The
U.S. Dollar Borrowers shall also pay to the Administrative Agent, for the
account of the Issuing Bank, in respect of each Letter of Credit issued by the
Issuing Bank a fronting fee for the period from and including the date of
issuance of such Letter of Credit to and including the date of termination of
such Letter of Credit computed at the rate of .15% per annum on the daily
average undrawn face amount of such Letter of Credit (computed on the basis of
the actual number of days such Letter of Credit is outstanding in a year of 360
days). The fees described in the preceding sentence shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December of each year and on the Termination Date or such earlier date as the
Revolving Credit Commitments are terminated and shall be nonrefundable.
(b) In addition to the foregoing fees and commissions, the U.S.
Dollar Borrowers shall pay or reimburse the Issuing Bank for such normal and
customary costs and expenses as are incurred or charged by the Issuing Bank in
issuing, effecting payment under, amending or otherwise administering any Letter
of Credit.
(c) The Administrative Agent shall, promptly following its
receipt thereof, distribute to the Issuing Bank and the U.S. Dollar Banks all
fees and commissions received by the Administrative Agent for their respective
accounts pursuant to this subsection.
2.7 L/C Participations. (a) The Issuing Bank irrevocably agrees to
------------------
grant and hereby grants to each L/C Participant, and, to induce the Issuing Bank
to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Bank, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk, an undivided interest equal to such L/C Participant's
Revolving Credit Commitment Percentage in the Issuing Bank's obligations and
rights under each Letter of Credit issued by the Issuing Bank hereunder and the
amount of each draft paid by the Issuing Bank thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Bank that, if a draft is
paid under any Letter of Credit issued by the Issuing Bank for which the Issuing
Bank is not reimbursed in full by the U.S. Dollar Borrowers in accordance with
the terms of this Agreement, such L/C Participant shall pay to the Issuing Bank
upon demand at the Issuing Bank's address for notices specified herein an amount
equal to such L/C Participant's Revolving Credit Commitment Percentage of the
amount of such draft or any part thereof, which is not so reimbursed. Any action
taken or omitted by the Issuing Bank
36
<PAGE>
under or in connection with a Letter of Credit, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not create for the
Issuing Bank any resulting liability to any Bank.
(b) If any amount required to be paid by any L/C Participant to
the Issuing Bank pursuant to subsection 2.7(a) in respect of any unreimbursed
portion of any payment made by the Issuing Bank under any Letter of Credit is
not paid to the Issuing Bank on the date such payment is due from such L/C
Participant, such L/C Participant shall pay to the Issuing Bank on demand an
amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate, as quoted by the Issuing Bank, during the period
from and including the date such payment is required to the date on which such
payment is immediately available to the Issuing Bank, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Bank submitted to any
L/C Participant with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its pro
---
rata share of such payment in accordance with subsection 2.7(a), the Issuing
- ----
Bank receives any payment related to such Letter of Credit (whether directly
from the U.S. Dollar Borrowers or otherwise, including by way of set-off or
proceeds of collateral applied thereto by the Issuing Bank), or any payment of
interest on account thereof, the Issuing Bank will distribute to such L/C
Participant its pro rata share thereof; provided, however, that in the event
--- ---- -------- -------
that any such payment received by the Issuing Bank shall be required to be
returned by the Issuing Bank, such L/C Participant shall return to the Issuing
Bank the portion thereof previously distributed by the Issuing Bank to it.
2.8 Reimbursement Obligation of the U.S. Dollar Borrowers. (a) Each
-----------------------------------------------------
U.S. Dollar Borrower jointly and severally agrees to reimburse the Issuing Bank
in respect of a Letter of Credit on each date on which the Issuing Bank notifies
VWR of the date and amount of a draft presented under such Letter of Credit and
paid by the Issuing Bank for the amount of (i) such draft so paid and (ii) any
taxes, fees, charges or other costs or expenses incurred by the Issuing Bank in
connection with such payment. Each such payment shall be made to the Issuing
Bank at its office listed in subsection 12.2 in U.S. Dollars and in immediately
available funds.
(b) Interest shall be payable on any and all amounts remaining
unpaid by the U.S. Dollar Borrowers under this
37
<PAGE>
subsection from the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the per annum
rate of the Base Rate plus 4.0% and shall be payable on demand by the Issuing
Bank.
2.9 Obligations Absolute. (a) The obligations of the U.S. Dollar
--------------------
Borrowers under subsections 2.4 through 2.11 shall be joint and several and
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which any U.S.
Dollar Borrower may have or have had against the Issuing Bank or any beneficiary
of a Letter of Credit or any other Person.
(b) The U.S. Dollar Borrowers also jointly and severally agree
with the Issuing Bank that the Issuing Bank shall not be responsible for, and
the U.S. Dollar Borrowers' Reimbursement Obligations under subsection 2.8(a)
shall not be affected by, among other things, (i) the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, provided, that reliance upon
--------
such documents by the Issuing Bank shall not have constituted gross negligence
or willful misconduct of the Issuing Bank or (ii) any dispute between or among
any U.S. Dollar Borrower and any beneficiary of any Letter of Credit or any
other party to which such Letter of Credit may be transferred or (iii) any
claims whatsoever of any U.S. Dollar Borrower against any beneficiary of such
Letter of Credit or any such transferee.
(c) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) Each U.S. Dollar Borrower jointly and severally agrees that
any action taken or omitted by the Issuing Bank under or in connection with any
Letter of Credit or the related drafts or documents, if done in the absence of
gross negligence or willful misconduct, shall be binding on such U.S. Dollar
Borrower and shall not result in any liability of the Issuing Bank to such U.S.
Dollar Borrower.
2.10 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment to the Issuing Bank under any Letter of Credit, the Issuing Bank shall
promptly notify VWR of the date and amount thereof. The responsibility of the
Issuing Bank to the U.S. Dollar Borrowers in connection with any draft presented
for payment under any Letter of Credit shall, in addition to any payment
obligation expressly provided for in such Letter of
38
<PAGE>
Credit and any other obligation expressly imposed by the Uniform Customs, be
limited to determining that the documents (including each draft) delivered under
such Letter of Credit in connection with such presentment are in conformity with
such Letter of Credit.
2.11 Application. To the extent that any provision of any
-----------
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement, the provisions of this Agreement shall apply.
2.12 Existing Letters of Credit. The Issuing Bank and each of the
--------------------------
other parties hereto agree that, effective on the Closing Date, each Existing
Letter of Credit outstanding on such date, and each extension, renewal or
replacement thereof, shall be deemed to have been issued pursuant to, and
governed by, the terms of this Agreement.
2.13 Swing Line Commitment. (a) Subject to the terms and conditions
---------------------
hereof, CoreStates may in its discretion make swing line loans (the "Swing Line
----------
Loans") to the U.S. Dollar Borrowers on a joint and several basis from time to
- -----
time during the Commitment Period in an aggregate principal amount at any one
time outstanding not to exceed $5,000,000; provided, that, no Swing Line Loan
-------- ----
shall be made if, after giving effect to the making of such Loan and the
simultaneous application of the proceeds thereof, the sum of (i) the aggregate
amount of the Revolving Credit Exposure at such time and (ii) the aggregate
principal amount of the Swing Line Loans outstanding at such time would exceed
either (x) the U.S. Dollar Borrowing Base as of the date of the most recent U.S.
Dollar Borrowing Base Certificate furnished to the Administrative Agent or (y)
the aggregate amount of the Revolving Credit Commitments at such time. The
Swing Line Commitment may be terminated or reduced from time to time pursuant to
subsection 5.5. Within the foregoing limits, the U.S. Dollar Borrowers may
during the Commitment Period borrow, repay and reborrow under the Swing Line
Commitment, subject to and in accordance with the terms and limitations hereof.
(b) All Swing Line Loans shall be made as Base Rate Loans and
shall not be entitled to be converted into Eurodollar Loans.
2.14 Swing Line Note. The Swing Line Loans shall be evidenced by a
---------------
promissory note of the U.S. Dollar Borrowers, substantially in the form of
Exhibit A-4 with appropriate insertion as to date (the "Swing Line Note"),
payable to the order of CoreStates. CoreStates is hereby authorized to record
the date and amount of each Swing Line Loan and the date and amount of each
payment or prepayment of principal thereof on the schedule annexed to and
constituting a part of the Swing Line
39
<PAGE>
Note, and any such recordation shall constitute prima facie evidence of the
----- -----
accuracy of the information so recorded, provided, that, the failure of
-------- ----
CoreStates to make such recordation (or any error in such recordation) shall not
affect the obligations of the U.S. Dollar Borrowers hereunder or under such
Note. The Swing Line Note shall (a) be dated the Closing Date, (b) be stated to
mature on the Termination Date and (c) provide for the payment of interest in
accordance with subsections 5.2 and 5.3.
2.15 Procedure For Swing Line Loans. The U.S. Dollar Borrowers may
------------------------------
borrow under the Swing Line Commitment during the Commitment Period on any
Business Day. The U.S. Dollar Borrowers shall give CoreStates irrevocable
notice, which notice must be received by CoreStates prior to 1:00 P.M.,
Philadelphia time, on the requested Borrowing Date, specifying in the Notice of
Borrowing (a) the amount requested to be borrowed and (b) the requested
Borrowing Date. The proceeds of each Swing Line Loan will be made available by
CoreStates to the U.S. Dollar Borrowers by CoreStates crediting the account of
VWR on the books of its office specified in subsection 12.2 with such proceeds.
2.16 Allocating Swing Line Loans; Swing Line Loan Participations.
-----------------------------------------------------------
(a) If an Event of Default shall occur and be continuing, CoreStates may, in
its sole and absolute discretion, direct that all Swing Line Loans owing to it
be refunded by delivering a notice (a "Notice of Swing Line Refunding") to each
------------------------------
U.S. Dollar Bank and, unless an Event of Default described in subsection 10.1(f)
(an "Insolvency Event of Default") in respect of a U.S. Dollar Borrower has
---------------------------
occurred, to VWR. Each such Notice of Swing Line Refunding shall be deemed to
constitute delivery by the U.S. Dollar Borrowers of a Notice of Borrowing of
Base Rate Loans in an amount equal to the amount of the Swing Line Loans of
CoreStates outstanding on such date. Unless an Insolvency Event of Default
shall have occurred (in which case the procedures of paragraph (b) of this
subsection 2.16 shall apply), each U.S. Dollar Bank (including CoreStates in its
capacity as a U.S. Dollar Bank) shall (i) make a Revolving Credit Loan to the
U.S. Dollar Borrowers pursuant to subsection 2.3 in an amount equal to such
Bank's Revolving Credit Commitment Percentage of the aggregate principal amount
of the Swing Line Loans of CoreStates outstanding on the date of delivery of the
applicable Notice of Swing Line Refunding and (ii) make the proceeds of its
Revolving Credit Loan available to CoreStates for the account of CoreStates at
the office of CoreStates specified in subsection 12.2 prior to 12:00 Noon,
Philadelphia time, in funds immediately available to CoreStates on the Business
Day next succeeding the date such notice is given. The proceeds of such
Revolving Credit Loans shall be immediately applied to repay the outstanding
Swing Line Loans of CoreStates.
40
<PAGE>
(b) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to subsection 2.16(a) an Insolvency Event of
Default shall have occurred in respect of a U.S. Dollar Borrower, each U.S.
Dollar Bank (other than CoreStates) shall, on the date such Revolving Credit
Loan would have been made pursuant to the applicable Notice of Swing Line
Refunding (the "Refunding Date"), purchase an undivided participating interest
in the outstanding Swing Line Loans in an amount equal to (i) such Bank's
Revolving Credit Commitment Percentage times (ii) the aggregate principal amount
-----
of the Swing Line Loans then outstanding which were to have been repaid with
Revolving Credit Loans (the "Swing Line Participation Amount"). On the Refunding
-------------------------------
Date, each U.S. Dollar Bank shall transfer to CoreStates, in immediately
available funds, such Bank's Swing Line Participation Amount, and upon receipt
thereof, CoreStates shall, if requested by a U.S. Dollar Bank, deliver to such
Bank a participation certificate dated the date of CoreStates' receipt of such
funds and evidencing such Bank's ownership of its Swing Line Participation
Amount.
(c) Whenever, at any time after CoreStates has received from any
U.S. Dollar Bank such Bank's Swing Line Participation Amount, CoreStates
receives any payment on account thereof, CoreStates will distribute to such Bank
its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Bank's
participating interest was outstanding and funded) in like funds as received;
provided, however, that in the event that such payment received by CoreStates is
- -------- -------
required to be returned, such Bank will return to CoreStates any portion thereof
previously distributed by CoreStates to it in like funds as such payment is
required to be returned by CoreStates.
(d) Each U.S. Dollar Bank's obligation to make Revolving Credit
Loans pursuant to subsection 2.16(a) and to purchase participating interests
pursuant to subsection 2.16(b) shall be absolute and unconditional and shall not
be affected by any circumstance including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Bank may have
against any other Bank or any U.S. Dollar Borrower, or any U.S. Dollar Borrower
may have against any Bank or any other Person, as the case may be, for any
reason whatsoever; (ii) the occurrence or continuance of a Default or Event of
Default; (iii) any adverse change in the condition (financial or otherwise) of
the U.S. Dollar Borrowers taken as a whole; (iv) any breach of this Agreement by
any party hereto; (v) the failure to satisfy any condition to the making of any
Loan hereunder; or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that, no U.S. Dollar
Bank shall have any obligation to make Revolving Credit Loans pursuant to
subsection 2.16(a) or purchase participating
41
<PAGE>
interests pursuant to subsection 2.16(b) to the extent that the aggregate
outstanding principal amount of the Swing Line Loans made by CoreStates exceeds
$5,000,000.
2.17 Bridge Loans. (a) Subject to the terms and conditions hereof,
------------
each Bridge Bank severally agrees to make a bridge loan in U.S. Dollars (a
"Bridge Loan") to the U.S. Dollar Borrowers on a joint and several basis on the
- ------------
Closing Date, in a principal amount not to exceed one-third (1/3) of the
difference between Two Hundred Forty Million Dollars ($240,000,000) and the
face amount of the Existing Letters of Credit; provided that no Bridge Loan
-------- ----
shall be made if, after giving effect to the making of such Loan, the aggregate
principal amount of the Bridge Loans outstanding at such time less an amount
equal to $135,000,000 would exceed the U.S. Dollar Borrowing Base set forth on
the U.S. Dollar Borrowing Base Certificate furnished to the Administrative Agent
pursuant to subsection 7.1(e).
(b) All Bridge Loans shall be made as Base Rate Loans and shall
not be entitled to be converted into Eurodollar Loans.
2.18 Bridge Notes. The Bridge Loan made by each Bridge Bank shall be
------------
evidenced by a promissory note of the U.S. Dollar Borrowers, substantially in
the form of Exhibit A-5 (a "Bridge Note"), with appropriate insertions, payable
-----------
to the order of such Bridge Bank and in a principal amount equal to the
principal amount of the Bridge Loan made by such Bridge Bank on the Closing
Date. Each Bridge Bank is hereby authorized to record the date and the amount
of the Bridge Loan made by such Bank and the date and amount of each payment or
prepayment of principal thereof, on the schedule annexed to and constituting a
part of its Bridge Note and any such recordation shall constitute prima facie
----- -----
evidence of the accuracy of the information so recorded, provided that the
-------- ----
failure of any Bridge Bank to make such recordation (or any error in such
recordation) shall not affect the obligations of the U.S. Dollar Borrowers
hereunder or under such Bridge Note. Each Bridge Note shall (a) be dated the
Closing Date, (b) be stated to mature on the second Business Day after the
Closing Date and (c) provide for the payment of interest in accordance with
subsections 5.2 and 5.3.
2.19 Procedure For Bridge Loans. (a) On or prior to the first
--------------------------
Business Day prior to the Closing Date, the U.S. Dollar Borrowers shall deliver
to the Administrative Agent a Notice of Borrowing of Bridge Loans. The
Administrative Agent shall promptly send a copy of such Notice to each Bridge
Bank. Each Bridge Bank will make the amount of its Bridge Loan available to the
Administrative Agent at the office of the Administrative Agent specified in
subsection 12.2 prior to 10:00 A.M., Philadelphia time on the Closing Date in
funds immediately
42
<PAGE>
available to the Administrative Agent. Such borrowing will then be made
available to the U.S. Dollar Borrowers by the Administrative Agent crediting the
account of VWR on the books of such office with the aggregate of the amount made
available to the Administrative Agent by the Bridge Banks and in like funds as
received by the Administrative Agent.
(b) The Administrative Agent may assume that each Bridge Bank has
made its portion of the Bridge Loans available to the Administrative Agent on
the Closing Date in accordance with this subsection and the Administrative Agent
may, in reliance upon such assumption, make available to the U.S. Dollar
Borrowers on such date a corresponding amount. If and to the extent that such
Bridge Bank shall not have made such portion available to the Administrative
Agent, such Bridge Bank agrees to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the U.S. Dollar Borrowers until
the date such amount is repaid to the Administrative Agent at the Federal Funds
Effective Rate. If such Bank shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Bank's Bridge Loan as
part of such borrowing for purposes of this Agreement.
2.20 Allocating Bridge Loans; Bridge Loan Participations. (a) On or
---------------------------------------------------
prior to the first Business Day prior to the Closing Date, the Administrative
Agent shall deliver to each U.S. Dollar Bank a Notice of Borrowing (the "Notice
------
of Bridge Loan Refunding") for the refunding of the Bridge Loans. Unless an
- ------------------------
Insolvency Event of Default shall have occurred (in which case the procedures of
paragraph (b) of this subsection 2.20 shall apply) each U.S. Dollar Bank
(including the Bridge Banks in their capacities as U.S. Dollar Banks) shall (i)
make a Revolving Credit Loan to the U.S. Dollar Borrowers pursuant to subsection
2.3 in an amount equal to such U.S. Dollar Bank's Revolving Credit Commitment
Percentage of the aggregate amount of Revolving Credit Loans set forth in the
Notice of Bridge Loan Refunding, (ii) make a Term Loan to the U.S. Dollar
Borrowers pursuant to subsection 3.3 in an amount equal to such U.S. Dollar
Bank's Term Loan Commitment Percentage of the aggregate amount of Term Loans set
forth in the Notice of Bridge Loan Refunding and (iii) make the proceeds of its
Revolving Credit Loan and Term Loan available to the Administrative Agent for
the account of the Bridge Banks pro rata at the office of the Administrative
--- ----
Agent specified in subsection 12.2 prior to 12:00 Noon, Philadelphia time, in
funds immediately available to the Administrative Agent on the second Business
Day after the Closing Date. Such proceeds shall then be promptly distributed by
the Administrative Agent pro rata to the Bridge Banks (i.e., one-third to each)
--- ---- ----
in immediately available funds. Such proceeds shall be immediately
43
<PAGE>
applied by each Bridge Bank to repay the outstanding Bridge Loans of such Bridge
Bank.
(b) If prior to the time a Revolving Credit Loan or Term Loan
would have otherwise been made pursuant to subsection 2.20(a) an Insolvency
Event of Default shall have occurred in respect of a U.S. Dollar Borrower, each
U.S. Dollar Bank shall, on the second Business Day after the Closing Date,
purchase an undivided participating interest in the outstanding Bridge Loan of
each Bridge Bank in an amount equal to the product of (i) the aggregate
principal amount of the outstanding Bridge Loans of such Bridge Bank which were
to have been repaid with Revolving Credit Loans and Term Loans times (ii) such
U.S. Dollar Bank's Bridge Loan Percentage (such product, the "Bridge Loan
-----------
Participation Amount"); provided that, no Bridge Bank shall purchase a
- -------------------- -------- ----
participating interest in the Bridge Loans of such Bridge Bank. On the second
Business Day after the Closing Date, each U.S. Dollar Bank shall transfer to the
Administrative Agent, in immediately available funds, such Bank's Bridge Loan
Participation Amount, and upon receipt thereof, each Bridge Bank shall, if
requested by a U.S. Dollar Bank, deliver to such Bank a participation
certificate dated the date of such Bridge Bank's receipt of such funds and
evidencing such Bank's ownership of its Bridge Loan Participation Amount. The
Administrative Agent shall promptly distribute pro rata to the Bridge Banks
--- ----
(i.e., one-third to each) in immediately available funds the amount made
---
available to it pursuant to the preceding sentence.
(c) Whenever, at any time after a Bridge Bank has received from
any U.S. Dollar Bank such Bank's Bridge Loan Participation Amount, such Bridge
Bank receives any payment on account thereof, such Bridge Bank will distribute
to such U.S. Dollar Bank its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Bank's participating interest was outstanding and
funded) in like funds as received; provided, however, that in the event that
-------- -------
such payment received by such Bridge Bank is required to be returned, such U.S.
Dollar Bank will return to such Bridge Bank any portion thereof previously
distributed by such Bridge Bank to it in like funds as such payment is required
to be returned by such Bridge Bank.
(d) Each U.S. Dollar Bank's obligation to make Revolving Credit
Loans and Term Loans pursuant to subsection 2.20(a) and to purchase
participating interests pursuant to subsection 2.20(b) shall be absolute and
unconditional and shall not be affected by any circumstance including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against any other Bank or any U.S. Dollar Borrower, or
any U.S. Dollar Borrower may have against any Bank or any other Person, as the
case may be, for any
44
<PAGE>
reason whatsoever; (ii) the occurrence or continuance of a Default or Event of
Default; (iii) any adverse change in the condition (financial or otherwise) of
the U.S. Dollar Borrowers taken as a whole; (iv) any breach of this Agreement by
any party hereto; (v) the failure to satisfy any condition to the making of any
Loan hereunder; or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that, the obligation of
-------- ----
such U.S. Dollar Bank to make Revolving Credit Loans and Term Loans pursuant to
subsection 2.20(a) or purchase participating interests pursuant to subsection
2.20(b) shall not exceed the amount set forth opposite the name of such Bank
under the caption "Total Commitment" on Schedule I hereto exclusive of the
amount listed therein because of such U.S. Dollar Bank's Canadian Dollar
Commitment.
(e) To the extent that any U.S. Dollar Bank shall not pay to the
Administrative Agent for the account of the Bridge Banks the amount required
pursuant to clause (a) of this subsection 2.20, each Bridge Bank shall be deemed
to have made a Term Loan and/or Revolving Credit Loan to the U.S. Dollar
Borrowers in an aggregate principal amount equal to one-third of the amount that
should have been, but was not, paid by such U.S. Dollar Bank to the
Administrative Agent pursuant to subsection 2.20(a) (the allocation of such
Loans between Revolving Credit Loans and Term Loans to be determined by the
Agents and to be consistent with the Notice of Bridge Loan Refunding sent to
such defaulting U.S. Dollar Bank). The proceeds of such Revolving Credit Loans
and Term Loan made by the Bridge Banks shall immediately be applied by the
Bridge Banks to repay outstanding Bridge Loans. The making of such Loans to the
U.S. Dollar Borrowers by the Bridge Banks shall not relieve the liability of a
U.S. Dollar Bank to the Bridge Banks pursuant to subsection 2.20(a).
2.21 Gap Period. Notwithstanding anything to the contrary contained
----------
herein, except as contemplated by subsection 2.17 and 2.20, the U.S. Dollar
Borrowers shall not request, and the U.S. Dollar Banks and the Issuing Bank
shall not be required to make or issue, any Revolving Credit Loans, Term Loans
or Letters of Credit during the period from the Closing Date to the close of
business on the second Business Day after the Closing Date.
SECTION 3. TERM LOANS
3.1 Term Loans. Subject to the terms and conditions of subsection
----------
2.20, each U.S. Dollar Bank severally agrees to make a term loan in U.S. Dollars
(a "Term Loan") to the U.S. Dollar Borrowers on a joint and several basis on the
---------
second Business Day after the Closing Date, in a principal amount not to
45
<PAGE>
exceed such Bank's Term Loan Commitment. Any portion of the Term Loan Commitment
not borrowed on such date shall be terminated.
3.2 Term Notes. The Term Loan made by each U.S. Dollar Bank shall be
----------
evidenced by a promissory note of the U.S. Dollar Borrowers, substantially in
the form of Exhibit A-2 (a "Term Note"), with appropriate insertions, payable to
---------
the order of such U.S. Dollar Bank and in a principal amount equal to the amount
of the Term Loan Commitment of such U.S. Dollar Bank. Each U.S. Dollar Bank is
hereby authorized to record the date, Type and amount of the Term Loan made by
such Bank, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurodollar Loans, the length of each
Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its Term Note and any such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded, provided
- ----- ----- --------
that the failure of any Bank to make such recordation (or any error in such
recordation) shall not affect the obligations of the U.S. Dollar Borrowers
hereunder or under such Note. Each Term Note shall (a) be dated the Closing
Date, (b) be stated to mature on the Termination Date and (c) provide for the
payment of interest in accordance with subsections 5.2 and 5.3.
3.3 Procedure for Term Loans. As provided in subsection 2.20(a),
------------------------
unless an Insolvency Event of Default shall have occurred, each U.S. Dollar
Bank will make the amount of its pro rata share of the Term Loans (based
--- ----
on the percentage which its Term Loan Commitment constitutes of the aggregate
Term Loan Commitments) available to the Administrative Agent for the account of
the U.S. Dollar Borrowers at the office of the Administrative Agent specified in
subsection 12.2 prior to 10:00 A.M., Philadelphia time on the second Business
Day after the Closing Date in funds immediately available to the Administrative
Agent.
3.4 Repayment of Term Loans. (a) The U.S. Dollar Borrowers shall
-----------------------
repay the Term Loans in 20 consecutive quarterly installments on the dates and
in the aggregate amounts set forth below:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
December 31, 1995 $ 3,750,000
March 31, 1996 3,750,000
June 30, 1996 3,750,000
September 30, 1996 3,750,000
December 31, 1996 5,000,000
March 31, 1997 5,000,000
June 30, 1997 5,000,000
</TABLE>
46
<PAGE>
<TABLE>
<S> <C>
September 30, 1997 5,000,000
December 31, 1997 7,500,000
March 31, 1998 7,500,000
June 30, 1998 7,500,000
September 30, 1998 7,500,000
December 31, 1998 7,500,000
March 31, 1999 7,500,000
June 30, 1999 7,500,000
September 30, 1999 7,500,000
December 31, 1999 10,000,000
March 31, 2000 10,000,000
June 30, 2000 10,000,000
Termination Date 10,000,000
</TABLE>
(b) The Term Notes shall also be subject to mandatory and
optional prepayment as provided in subsections 5.7 and 5.8. Any payments on the
Term Loans (whether optional or mandatory) may not be reborrowed.
SECTION 4. CANADIAN DOLLAR LOANS
4.1 Canadian Dollar Commitments. (a) Subject to the terms and
---------------------------
conditions hereof, each Canadian Funding Bank severally agrees to make
revolving credit loans in Canadian Dollars (the "Canadian Dollar Loans") to VWR
---------------------
Canada from time to time during the Commitment Period in an aggregate principal
amount at any one time outstanding not to exceed the U.S. Dollar Equivalent of
the Canadian Dollar Commitment of such Bank; provided that, no Canadian Dollar
-------- ----
Loan shall be made if, after giving effect to the making of such Loan and the
simultaneous application of the proceeds thereof, the aggregate amount of the
Canadian Dollar Exposure at such time would exceed the Canadian Dollar Borrowing
Base as of the date of the most recent Canadian Dollar Borrowing Base
Certificate furnished to the Administrative Agent. The Canadian Dollar
Commitments may be terminated or reduced from time to time pursuant to
subsection 5.5. Within the foregoing limits, VWR Canada may during the
Commitment Period borrow, repay and reborrow under the Canadian Dollar
Commitments, subject to and in accordance with the terms and limitations hereof.
(b) The Canadian Dollar Loans may from time to time be (i)
Canadian Base Rate Loans, (ii) Canadian COF Rate Loans or (iii) a combination
thereof, as determined by VWR Canada and notified to the Canadian Funding Banks
and the Administrative Agent in accordance with subsections 4.3 and 5.14;
provided that, no Canadian Dollar Loan shall be made as a Canadian COF Rate Loan
- -------- ----
after the date that is one month prior to the Termination Date.
47
<PAGE>
(c) The failure of any Canadian Funding Bank to make any Canadian
Dollar Loan shall not in itself relieve any other Canadian Funding Bank of its
obligation to lend hereunder (it being understood, however, that no Bank shall
be responsible for the failure of any other Bank to make any Loan required to be
made by such other Bank). Each Canadian Dollar Loan shall be made in accordance
with the procedures set forth in subsection 4.3.
4.2 Canadian Dollar Note. The Canadian Dollar Loans made by each
--------------------
Canadian Funding Bank shall be evidenced by a promissory note of VWR Canada,
substantially in the form of Exhibit A-3, with appropriate insertions as to
payee, date and principal amount (a "Canadian Dollar Note"), payable to the
--------------------
order of such Canadian Funding Bank. Each Canadian Funding Bank is hereby
authorized to record the date, Type and amount of each Canadian Dollar Loan made
by such Bank, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Canadian COF Rate Loans, the length of
each Interest Period with respect thereto, on the schedule annexed to and
constituting a part of its Canadian Dollar Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded,
----- -----
provided that the failure of any Canadian Funding Bank to make such recordation
- -------- ----
(or any error in such recordation) shall not affect the obligations of VWR
Canada hereunder or under such Canadian Dollar Note. Each Canadian Dollar Note
shall (a) be dated the Closing Date, (b) be stated to mature on the Termination
Date and (c) provide for the payment of interest in accordance with subsections
5.2 and 5.3.
4.3 Procedure for Canadian Dollar Loans. (a) VWR Canada may borrow
-----------------------------------
under the Canadian Dollar Commitments during the Commitment Period on any
Business Day. VWR Canada shall give each Canadian Funding Bank and the
Administrative Agent irrevocable notice (which notice must be received by both
such parties prior to twelve o'clock (12:00) noon, Philadelphia time, one
Business Day prior to the requested Borrowing Date), specifying in the Notice of
Borrowing (i) the amount to be borrowed, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to be of Canadian COF Rate Loans, Canadian Base
Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely
or partly of Canadian COF Rate Loans, the amount of such Loan(s) and the length
of the initial Interest Period(s) therefor. Each borrowing under the Canadian
Dollar Commitments shall be in an amount equal to CAN $250,000 or increments of
CAN $100,000 thereafter (or, if the then Available Canadian Dollar Commitments
are less than CAN $250,000, such lesser amount).
48
<PAGE>
Upon receipt of a Notice of Borrowing from VWR Canada in respect of a
Canadian Dollar Loan, the Administrative Agent shall promptly notify each
Canadian Funding Bank in writing of (i) the aggregate amount of the Revolving
Credit Loans, Swing Line Loans and L/C Obligations then outstanding, (ii) the
U.S. Dollar Equivalent of the aggregate amount of the Canadian Dollar Loans then
outstanding (exclusive of the amount so requested to be borrowed), (iii) the
U.S. Dollar Equivalent of the Canadian Dollar Loans so requested to be borrowed,
(iv) the Applicable Margin for Canadian Dollar Loans then in effect and (v) the
Canadian Dollar Borrowing Base as of the date of the most recent Canadian Dollar
Borrowing Base Certificate furnished to the Administrative Agent. Each Canadian
Funding Bank will make the amount of its pro rata share of each borrowing (based
--- ----
on its Canadian Dollar Commitment Percentage at the time) available to VWR
Canada by crediting such amount in Canadian Dollars to VWR Canada's deposit
account with such Canadian Funding Bank not later than 2:00 p.m. Philadelphia
time on the day of the requested Canadian Dollar Loan or as otherwise directed
by VWR Canada and acceptable to the Canadian Funding Banks. The Administrative
Agent shall within ten days after the end of each month send to each Bank and
VWR a schedule of the U.S. Dollar Equivalent of the Canadian Dollar Loans
outstanding as of the end of the prior month.
(b) If in a Notice of Borrowing no election as to the Type of
Canadian Dollar Loan is specified in any such notice, then the requested
Canadian Dollar Loan shall be a Canadian Base Rate Loan. If a Canadian COF Rate
Loan is requested but no Interest Period with respect to such Loan is specified
in any such notice, then VWR Canada shall be deemed to have selected an Interest
Period of thirty (30) days' duration.
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS
5.1 Fees. (a) The U.S. Dollar Borrowers jointly and severally agree
----
to pay to the Administrative Agent for the account of each U.S. Dollar Bank, on
each March 31, June 30, September 30 and December 31 during the Commitment
Period and on the date on which the Revolving Credit Commitments shall be
terminated as provided herein, a commitment fee at a rate per annum equal to the
Commitment Fee Rate in effect from time to time on the average daily amount of
the Available Revolving Credit Commitments during the preceding quarter (or
shorter period commencing with the date hereof or ending with the Termination
Date or the date on which the Revolving Credit Commitments shall be terminated);
provided that, for purposes of the commitment fee for the period between the
- -------- ----
Closing Date and the date of refunding of the Bridge Loans, it shall be assumed
that such refunding of the Bridge Loans occurred on and as of the
49
<PAGE>
Closing Date. As provided in the definition of Available Revolving Credit
Commitments, any Swing Line Loans by CoreStates outstanding during any quarter
shall not reduce the commitment fees payable to CoreStates in such quarter. VWR
Canada agrees to pay to the Administrative Agent for the account of each
Canadian Funding Bank, on each March 31, June 30, September 30, and December 31
during the Commitment Period and on the date on which the Canadian Dollar
Commitments shall be terminated as provided herein, a commitment fee at a rate
per annum equal to the Commitment Fee Rate in effect from time to time on the
average daily amount of the U.S. Dollar Equivalent of the Available Canadian
Dollar Commitments during the preceding quarter (or shorter period commencing
with the date hereof or ending with the Termination Date or the date on which
the Canadian Dollar Commitments shall be terminated). All Commitment Fees shall
be computed on the basis of the actual number of days elapsed in a year of 360
days and shall be paid in U.S. Dollars. The Commitment Fee due to each Bank
shall commence to accrue on the date hereof, and shall cease to accrue on the
earlier of the Termination Date and the termination of the Commitment of such
Bank as provided herein. The Administrative Agent shall distribute (a) the
Commitment Fees on the Revolving Credit Loans among the U.S. Dollar Banks pro
---
rata in accordance with their respective Revolving Credit Commitment Percentages
- ----
and (b) the Commitment Fees on the Canadian Dollar Loans among the Canadian
Funding Banks pro rata in accordance with their respective Canadian Dollar
--- ----
Commitment Percentages.
(b) The U.S. Dollar Borrowers jointly and severally agree to pay
the Administrative Agent, for its own account, administrative and other fees at
the times and in the amounts set forth in the Fee Letter Agreement.
(c) The foregoing fees shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, if
and as appropriate, among the Banks. Once paid, none of the foregoing fees shall
be refundable under any circumstances.
5.2 Interest Rates and Payment Dates. (a) Subject to the provisions
--------------------------------
of subsection 5.3, each Base Rate Loan shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be) at a rate per annum equal to the Base Rate plus the Applicable
Margin.
(b) Subject to the provisions of subsection 5.3, each Eurodollar
Loan shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum equal to the Eurodollar
Rate for the Interest Period in effect for such Eurodollar Loan plus the
Applicable Margin.
50
<PAGE>
(c) Subject to the provisions of subsection 5.3, each Canadian
Base Rate Loan shall bear interest (computed on the actual number of days
elapsed over a year of 365 or 366 days, as the case may be) at a rate per annum
equal to the Canadian Base Rate plus the Applicable Margin.
(d) Subject to the provisions of subsection 5.3, each Canadian
COF Rate Loan shall bear interest (computed on the actual number of days elapsed
over a year of 365 or 366 days, as the case may be) at a rate per annum equal to
the Canadian COF Rate for the Interest Period in effect for such Canadian COF
Rate Loan plus the Applicable Margin.
(e) Interest on each Loan shall be payable in arrears on each
Interest Payment Date applicable to such Loan; provided that, interest accruing
-------- ----
on overdue amounts pursuant to subsection 5.3 shall be payable on demand as
provided in such subsection.
(f) As soon as practicable the Administrative Agent shall notify
VWR and the Banks of (i) each determination of a Eurodollar Rate and (ii) the
effective date and the amount of each change in the interest rate on a
Eurodollar Loan or Base Rate Loan. As soon as practicable, BOA Canada shall
notify VWR, the Administrative Agent and the Canadian Funding Banks of (i) each
determination by BOA Canada of a Canadian COF Rate and (ii) the effective date
and the amount of each change in the interest rate on a Canadian COF Rate Loan
or Canadian Base Rate Loan. Each determination of an interest rate by the
Administrative Agent or BOA Canada, as the case may be, pursuant to any
provision of this Agreement (including subsections 5.2 and 5.3) shall be
conclusive and binding on the Borrowers and the Banks in the absence of clearly
demonstrable error. At the request of the Borrowers, the Administrative Agent or
BOA Canada, as the case may be, shall deliver to VWR a statement showing the
quotations used by it in determining any interest rate pursuant to subsections
5.2(a) through 5.2(d).
(g) For the purposes of the Interest Act (Canada), in order to
---------------------
effectuate the agreed rates of interest provided herein with respect to Canadian
Dollar Loans, (i) the principle of deemed reinvestment of interest shall not
apply to any interest calculation under this Agreement or the Canadian Dollar
Note, (ii) the rates of interest stipulated under this Agreement and the
Canadian Dollar Note are intended to be nominal rates and not effective rates or
yields, and (iii) each rate of interest determined pursuant to such calculation
expressed as an annual rate is equivalent to such rate as so determined
multiplied by the actual number of days in the calendar year in which the same
is to be ascertained and divided by 365 days (or 366 days in a leap-year).
51
<PAGE>
5.3 Default Interest. If the U.S. Dollar Borrowers or VWR Canada
----------------
shall default in the payment of the principal of or interest on any Loan or any
other amount becoming due hereunder, the U.S. Dollar Borrowers or VWR Canada, as
the case may be, shall on demand from time to time pay interest on any overdue
payment of principal (in lieu of the interest otherwise payable on such
principal under Section 5.2) and, to the extent permitted by law, on overdue
payments of interest and other amounts due hereunder up to the date of actual
payment (after as well as before judgment):
(a) in the case of overdue principal of a Base Rate Loan or a
Eurodollar Loan, at a rate determined by the Administrative Agent to be 2% per
annum above the rate which would otherwise be payable on such Loans in
accordance with the provisions hereof;
(b) in the case of overdue principal of a Canadian Base Rate Loan
or a Canadian COF Rate Loan, at a rate determined by BOA Canada to be the lower
of (i) 2% per annum above the rate which would otherwise be payable on such
Loans in accordance with the provisions hereof and (ii) the maximum rate
permitted under applicable law; and
(c) in the case of any other amount payable hereunder (whether
for interest, fees or otherwise), at a rate equal to 4% per annum above the Base
Rate.
5.4 Inability to Determine Interest Rate. In the event, and on each
------------------------------------
occasion, that prior to the first day of the commencement of any Interest Period
for a Eurodollar Loan, the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the U.S. Dollar Borrowers)
that dollar deposits in the principal amount of such Eurodollar Loan are not
generally available in the London Interbank Market, or that the rate at which
such dollar deposits are being offered will not adequately and fairly reflect
the cost to the U.S. Dollar Banks of making or maintaining the principal amount
of such Eurodollar Loan during such Interest Period, or that reasonable means do
not exist for ascertaining the Eurodollar Rate, the Administrative Agent shall,
as soon as practicable thereafter, give written, telegraphic or telephonic
notice of such determination to VWR and the Banks. After such notice shall have
been given and until the circumstances giving rise to such notice no longer
exist, each request for a Eurodollar Loan or for conversion to or maintenance of
a Eurodollar Loan pursuant to the terms of this Agreement shall be deemed to be
a request for a Base Rate Loan. Each determination by the Administrative Agent
hereunder shall be conclusive absent error in calculation.
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<PAGE>
5.5 Termination and Reduction of Commitments. (a) The Commitments
----------------------------------------
shall be automatically terminated on the Termination Date.
(b) Upon at least five Business Days' prior irrevocable written
(including telecopy) notice to the Administrative Agent, the Borrowers may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, the Revolving Credit Commitments, the Swing Line Commitment
and/or the Canadian Dollar Commitments; provided, however, that (i) each partial
-------- -------
reduction of any Commitment shall be in a minimum principal amount of $5,000,000
or in whole multiples of $1,000,000 in excess thereof, (ii) the Revolving Credit
Commitments may not be reduced or terminated such that after such reduction or
termination, the Revolving Credit Commitments are less than either the Canadian
Dollar Commitments or the Swing Line Commitment and (iii) the Commitments may
not be reduced or terminated if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans, the Swing Line Loans and/or the
Canadian Dollar Loans made on the effective date thereof (A) the sum of (X) the
aggregate amount of the Revolving Credit Exposure at such time and (Y) the
aggregate principal amount of the Swing Line Loans outstanding at such time
would exceed the aggregate amount of the Revolving Credit Commitments at such
time or (B) the aggregate amount of the Canadian Dollar Exposure at such time
would exceed the aggregate amount of the Canadian Dollar Commitments at such
time.
(c) Each reduction in the Revolving Credit Commitment hereunder
shall be made ratably among the U.S. Dollar Banks in accordance with their
respective Revolving Credit Commitment Percentages. The U.S. Dollar Borrowers
shall pay to the Administrative Agent for the account of the U.S. Dollar Banks
on the date of each termination or reduction of the Revolving Credit Commitment,
the Commitment Fees on the amount of the Revolving Credit Commitment so
terminated or reduced accrued to the date of such termination or reduction.
(d) Each reduction in the Canadian Dollar Commitments hereunder
shall be made ratably among the Canadian Funding Banks in accordance with their
respective Canadian Dollar Commitment Percentages. VWR Canada shall pay to the
Administrative Agent for the account of the Canadian Funding Banks on the date
of each termination or reduction of the Canadian Dollar Commitments, the
Commitment Fees on the amount of the Canadian Dollar Commitments so terminated
or reduced accrued to the date of such termination or reduction.
5.6 Optional Prepayment of Loans. (a) The Borrowers shall have the
----------------------------
right at any time and from time to time to prepay any Loan, in whole or in part,
without premium or penalty (but in
53
<PAGE>
any event subject to subsection 5.11), upon prior written, telecopy or
telephonic notice to the Administrative Agent and, in the case of Canadian
Dollar Loans, each Canadian Funding Bank given, in the case of Base Rate Loans,
no later than 10:30 a.m., Philadelphia time, one Business Day before any
proposed prepayment, in the case of Eurodollar Loans, no later than 10:30 a.m.,
Philadelphia time, three Business Days before any such proposed prepayment and,
in the case of Canadian Dollar Loans, no later than twelve o'clock (12:00) noon,
Philadelphia time, one Business Day before any proposed prepayment. In each case
the notice shall specify the date and amount of each such prepayment, whether
the prepayment is of (i) Revolving Credit Loans, Swing Line Loans, Canadian
Dollar Loans, Term Loans or a combination thereof, and, if a combination
thereof, the amount allocable to each and (ii) Eurodollar Loans, Base Rate
Loans, Canadian Base Rate Loans, Canadian COF Rate Loans or a combination
thereof, and, if a combination thereof, the amount allocable to each; provided,
--------
however, (x) that each such partial prepayment shall be in the principal amount
- -------
of at least (A) with respect to prepayments of Term Loans or Revolving Credit
Loans bearing interest at a Eurodollar Rate, $5,000,000 or in whole multiples of
$1,000,000 in excess thereof, (B) with respect to prepayments of Revolving
Credit Loans or Term Loans bearing interest at the Base Rate, $500,000 or in
whole multiples of $100,000 in excess thereof and (C) with respect to
prepayments of Canadian Dollar Loans, CAN $250,000 or in whole multiples of CAN
$100,000 in excess thereof and (y) application of any such prepayments shall be
subject to the provisions of subsection 10.2. There shall be no minimum
principal amount with respect to any prepayments of Swing Line Loans.
(b) On the date of any termination or reduction of the
Commitments pursuant to subsection 5.5, the applicable Borrower(s) shall pay or
prepay so much of the Loans as shall be necessary in order that (i) the sum of
the aggregate amount of the Revolving Credit Exposure at such time and the
aggregate principal amount of the Swing Line Loans outstanding at such time
would not exceed the aggregate amount of the Revolving Credit Commitments at
such time and (ii) the aggregate amount of the Canadian Dollar Exposure at such
time would not exceed the aggregate amount of the Canadian Dollar Commitments at
such time. With respect to any payments or prepayments pursuant to clause (i)
above, the Borrowers shall specify in writing to the Administrative Agent if the
prepayment is of Revolving Credit Loans, Swing Line Loans or a combination
thereof, and, if a combination thereof, the amount allocable to each.
(c) Each notice of prepayment shall be irrevocable and shall
commit the applicable Borrower(s) to prepay the amount specified in such notice.
All prepayments on Term
54
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Loans under this Section shall be accompanied by accrued interest on the
principal amount being prepaid to the date of prepayment.
(d) Upon receipt of any notice of prepayment (other than in
respect of Swing Line Loans), the Administrative Agent shall promptly notify
each Bank thereof.
(e) Partial prepayments of the Term Loans shall be applied to
reduce pro rata, all scheduled installments of principal under the Term Loans.
--- ----
(f) Amounts prepaid on account of Term Loans may not be
reborrowed. Amounts prepaid pursuant to subsection 5.6(a) on account of the
Revolving Credit Loans, the Swing Line Loans or the Canadian Dollar Loans may be
reborrowed, subject to the terms and conditions hereof.
5.7 Mandatory Prepayments. (a) In the event that at the end of any
---------------------
fiscal year of VWR (commencing with the 1996 fiscal year) there shall exist
Excess Cash Flow with respect to such fiscal year, then, on the date which is
five Business Days after the earlier to occur of (i) the date upon which the
audited consolidated financial statements of VWR and its Subsidiaries with
respect to such fiscal year are delivered to the Administrative Agent and (ii)
the 90th day after the end of such fiscal year, the U.S. Dollar Borrowers shall
prepay the Term Loans and/or the Revolving Credit Loans by paying to the
Administrative Agent on behalf of the U.S. Dollar Banks, in U.S. Dollars an
amount equal to (A) until the principal amount of the Term Loans are permanently
reduced to 50% of the principal amount of such Loans on the Closing Date, 75% of
such Excess Cash Flow and (B) thereafter, 50% of such Excess Cash Flow; provided
--------
that, after the Term Loans are paid in full and the Revolving Credit Commitments
- ----
have been reduced to $100,000,000, the U.S. Dollar Borrowers shall no longer be
obligated to make a mandatory prepayment of Excess Cash Flow.
(b) Promptly upon receipt by VWR or any of its Subsidiaries of
any Net Proceeds (whether from an Asset Sale, the sale or issuance of Capital
Stock or the incurrence of Indebtedness by VWR or any of its Subsidiaries), the
Borrowers shall apply 100% of such Net Proceeds to the prepayment of the Loans
by paying such amounts to the Administrative Agent, on behalf of the Banks. The
Borrowers shall give the Administrative Agent at least one Business Day's prior
written notice of each prepayment pursuant to this subsection 5.7(b) setting
forth the date and amount thereof.
(c) If any U.S. Dollar Borrowing Base Certificate shows that the
sum of the aggregate amount of the Revolving Credit Exposure on the date of such
Certificate and the aggregate
55
<PAGE>
principal amount of the Swing Line Loans outstanding on the date of such
Certificate exceeds the U.S. Dollar Borrowing Base on such date, the U.S. Dollar
Borrowers shall prepay the Revolving Credit Loans and/or the Swing Line Loans on
the date such Certificate is delivered to the Administrative Agent in an
aggregate amount equal to the amount of such excess. At the time of any such
prepayment, the U.S. Dollar Borrowers shall specify in writing to the
Administrative Agent whether such prepayment is of Revolving Credit Loans or
Swing Line Loans or, if a combination thereof, the amount of each being prepaid.
If any Canadian Dollar Borrowing Base Certificate shows that the aggregate
amount of the Canadian Dollar Exposure on the date of such Certificate exceeds
the Canadian Dollar Borrowing Base on such date, VWR Canada shall prepay the
Canadian Dollar Loans on the date such certificate is delivered to the
Administrative Agent in an aggregate amount equal to the amount of such excess.
(d) The applicable Borrower(s) shall prepay the Revolving Credit
Loans, the Swing Line Loans and/or the Canadian Dollar Loans to the extent
required so that there shall be a period of at least 30 consecutive days (i) in
the first twelve-month period after the Closing Date, during which the Available
Commitments are at least $20,000,000 and (ii) in each twelve month period
thereafter, during which the Available Commitments are at least $30,000,000. At
the time of any such prepayment, the Borrowers shall specify in writing to the
Administrative Agent whether such prepayment is of Revolving Credit Loans, Swing
Line Loans, Canadian Dollars Loans or, if a combination thereof, the amount of
each being prepaid.
(e) If at any time the sum of the aggregate amount of the
Revolving Credit Exposure at such time and the aggregate principal amount of the
Swing Line Loans outstanding at such time shall exceed the aggregate amount of
the Revolving Credit Commitments at such time, the U.S. Dollar Borrowers shall
prepay the Revolving Credit Loans and/or the Swing Line Loans in an aggregate
amount equal to such excess. At the time of any such prepayment, the Borrowers
shall specify in writing to the Administrative Agent whether such prepayment is
of Revolving Credit Loans or Swing Line Loans or, if a combination thereof, the
amount of each being prepaid.
(f) If at any time the aggregate amount of the Canadian Dollar
Exposure at such time shall exceed the Canadian Dollar Commitments at such time,
VWR Canada shall prepay the Canadian Dollar Loans by paying to the Canadian
Funding Banks for their own account an amount equal to such excess.
(g) Subject to subsection 10.2 hereof, any prepayment of the
Loans pursuant to subsection 5.7(a) and (b) shall be applied as follows: first,
-----
to the Term Loans, with such
56
<PAGE>
payments being applied to reduce the installments of principal in the inverse
order of maturity, second, to the Revolving Credit Loans whereupon the Revolving
------
Credit Commitments shall automatically be reduced by an amount equal to the
amount of such prepayment, third, to the Swing Line Loans, whereupon the Swing
-----
Line Commitment shall automatically be reduced by an amount equal to the amount
of such prepayment, fourth, to the Canadian Dollar Loans whereupon the Canadian
------
Dollar Commitments shall automatically be reduced by an amount equal to the
amount of such prepayment, and fifth, to cash collateralize any outstanding
-----
Letters of Credit whereupon the Revolving Credit Commitments shall automatically
be reduced by an amount equal to the amount of such cash collateral; provided
--------
that, notwithstanding the foregoing, at the request of VWR Canada or the
- ----
Canadian Funding Banks, any Net Proceeds paid pursuant to subsection 5.7(b) from
an Asset Sale by VWR Canada of assets of VWR Canada shall be applied only to the
Canadian Dollar Loans, whereupon the Canadian Dollar Commitments shall
automatically be reduced by an amount equal to the amount of such prepayment and
any Net Proceeds remaining after payment in full of the Canadian Dollar Loans
shall be retained by VWR Canada.
(h) Subject to subsection 10.2 hereof, any prepayment of the
Revolving Credit Loans, the Swing Line Loans, the Term Loans and/or the Canadian
Dollar Loans pursuant to subsection 5.7 (a), (b), (c), (d), (e) and (f) shall be
subject to the following provisions: (i) payments in respect of the Revolving
Credit Loans or the Term Loans shall be in U.S. Dollars paid to the
Administrative Agent on behalf of the U.S. Dollar Banks, (ii) payments in
respect of the Swing Line Loans shall be in U.S. Dollars paid to CoreStates for
its own account and (iii) payments in respect of the Canadian Dollar Loans shall
be in Canadian Dollars paid to the Canadian Funding Banks for their own account
pro rata based on their respective Canadian Dollar Commitment Percentages.
- --- ----
(i) Any prepayment of the Revolving Credit Loans, the Swing Line
Loans and/or the Canadian Dollar Loans pursuant to subsection 5.7(c), (d), (e)
and (f) may, subject to the terms and conditions relating to borrowings
hereunder, be reborrowed by the applicable Borrower(s).
(j) All prepayments under this subsection 5.7 shall, to the
extent possible and consistent with the application of such prepayment to the
Term Loans, Revolving Credit Loans, Swing Line Loans or Canadian Dollar Loans,
as the case may be, be applied first (x) with respect to prepayments of the Term
Loans, Revolving Credit Loans or Swing Line Loans, to any Base Rate Loans then
outstanding and the balance, if any, to Eurodollar Loans outstanding, with
payments applied to Eurodollar Loans being applied in order of next maturing
Interest Periods and (y)
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<PAGE>
with respect to prepayments of the Canadian Dollar Loans, to any Canadian Base
Rate Loans then outstanding and the balance, if any, to Canadian COF Rate Loans
outstanding, with payments applied to Canadian COF Rate Loans being applied in
order of next maturing Interest Periods. Any prepayment of Eurodollar Loans or
Canadian COF Rate Loans shall be subject to subsection 5.11.
5.8 Illegality. Notwithstanding any other provision herein, if any
----------
change in any Requirement of Law or in the interpretation or application thereof
shall make it unlawful for any U.S. Dollar Bank to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Bank
hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
refinance Base Rate Loans to Eurodollar Loans shall forthwith be cancelled and
(b) such Bank's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the U.S. Dollar Borrowers shall pay to such Bank such amounts, if any,
as may be required pursuant to subsection 5.11.
5.9 Requirements of Law. (a) In the event that any change in any
-------------------
Requirement of Law or in the interpretation, or application thereof or
compliance by any Bank with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind whatsoever with
respect to this Agreement, any Note, any Letter of Credit, any Application,
any Eurodollar Loan or any Canadian COF Rate Loan made by it, or change the
basis of taxation of payments to such Bank in respect thereof (except for
taxes covered by subsection 5.10 and changes in the rate of tax (including,
with respect to Canadian Funding Banks, surtax) on the net income or, with
respect to Canadian Funding Banks, capital of such Bank);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Bank which is not otherwise included in the determination of
the interest rate on such Eurodollar Loan or Canadian COF Rate Loan, as the
case may be, hereunder; or
58
<PAGE>
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or Canadian COF Rate Loans or issuing
or participating in Letters of Credit or maintaining any Commitment hereunder or
to reduce any amount receivable hereunder in respect thereof then, in any such
case, the Borrowers shall as promptly as practicable pay such Bank, upon its
demand, any additional amounts necessary to compensate such Bank for such
increased cost or reduced amount receivable. If any Bank becomes entitled to
claim any additional amounts pursuant to this subsection, it shall as promptly
as practicable notify VWR, through the Administrative Agent, of the event by
reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this subsection submitted by such Bank, through the
Administrative Agent, to VWR shall be conclusive in the absence of clearly
demonstrable error. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) In the event that any Bank shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Bank or such corporation could have achieved but for
such change or compliance (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, the Borrowers shall as
promptly as practicable pay such Bank, upon its demand, such additional amount
or amounts as will compensate such Bank for such reduction. If any Bank becomes
entitled to claim any additional amounts pursuant to this subsection, it shall
as promptly as practicable notify VWR, through the Administrative Agent, of the
event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this subsection submitted by such Bank,
through the Administrative Agent, to VWR shall be conclusive in the absence of
clearly demonstrable error. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
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(c) Each Bank agrees that it will use reasonable efforts in order
to avoid or to minimize, as the case may be, the payment by the Borrowers of any
additional amount under subsections 5.9(a) or (b); provided, however, that no
-------- -------
Bank shall be obligated to incur any expense, cost or other amount in connection
with utilizing such reasonable efforts.
5.10 Taxes. (a) All payments made by the Borrowers under this
-----
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (excluding, in the case of the Administrative Agent and
each Bank, net income taxes and franchise or gross receipts taxes imposed on the
Administrative Agent or such Bank, as the case may be, as a result of a present
or former connection between the jurisdiction of the government or taxing
authority imposing such tax and the Administrative Agent or such Bank (excluding
a connection arising solely from the Administrative Agent or such Bank having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or the Notes)) (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and withholdings being hereinafter
called "Taxes"). If any Taxes are required to be withheld from any amounts
-----
payable to the Administrative Agent or any Bank hereunder or under the Notes,
the amounts so payable to the Administrative Agent or such Bank shall be
increased to the extent necessary to yield to the Administrative Agent or such
Bank (after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes. Whenever any Taxes are payable by the Borrowers, as promptly as possible
thereafter the Borrowers shall send to the Administrative Agent for its own
account or for the account of such Bank, as the case may be, a certified copy of
an original official receipt received by the Borrowers showing payment thereof.
If the Borrowers fail to pay any Taxes when due to the appropriate taxing
authority or fail to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrowers shall indemnify the
Administrative Agent and the Banks for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Bank as a
result of any such failure. The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.
(b) Each U.S. Dollar Bank that is not incorporated under the laws
of the United States of America or a state thereof agrees that it will deliver
to VWR and the
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Administrative Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable
form. Each such Bank also agrees to deliver to VWR and the Administrative Agent
two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms or other manner of certification, as the case may be,
on or before the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to VWR, and such extensions or renewals thereof as
may reasonably be requested by VWR or the Administrative Agent, unless in any
such case an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank so advises VWR and the Administrative Agent. Each such Bank
shall certify (i) in the case of a Form 1001 or 4224, that it is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes and (ii) in the case of a Form W-8 or W-9,
that it is entitled to an exemption from United States backup withholding tax.
(c) Each Canadian Funding Bank agrees that, on the Closing Date,
it will deliver to VWR Canada and the Administrative Agent an instrument in
writing certifying that such Canadian Funding Bank is not a non-resident of
Canada for the purposes of Part XIII of the Income Tax Act (Canada) and either
(i) that it is the sole beneficial owner of payments of principal of and
interest on its Canadian Dollar Loans, or (ii) that attached are the names of
the beneficial owners of payments of principal of and interest on its Canadian
Dollar Loans together with certificates of such beneficial owners stating that
they are not non-residents of Canada for the purposes of Part XIII of the Income
Tax Act (Canada). Each Canadian Funding Bank agrees to advise VWR Canada and the
Administrative Agent of any changes in respect of the foregoing.
(d) Notwithstanding the foregoing subsections 5.10(a) or 5.10(b),
the Borrowers shall not be required to pay any additional amounts to any Bank in
respect of United States withholding tax pursuant to such subsections if (i) the
obligation to pay such additional amounts would not have arisen but for a
failure by such Bank to comply with the requirements of subsection 5.10(b) or
(ii) such Bank shall not have furnished VWR with such forms listed in subsection
5.10(b) and shall not have taken such other steps as reasonably may be available
to it under applicable tax laws and any applicable tax treaty or convention
61
<PAGE>
to obtain an exemption from, or reduction (to the lowest applicable rate) of,
such United States withholding tax.
(e) Notwithstanding the foregoing subsections 5.10(a) or 5.10(c),
VWR Canada shall not be required to pay any additional amounts to any Canadian
Funding Bank in respect of Canadian withholding tax pursuant to such subsections
if (i) the obligation to pay such additional amounts would not have arisen but
for the status of such Canadian Funding Bank or any Person having a
participation or other interest in the Canadian Dollar Loans of such Canadian
Funding Bank as a non-resident of Canada for the purposes of Part XIII of the
Income Tax Act (Canada), or (ii) such Canadian Funding Bank shall not have taken
such steps as reasonably may be available to it under applicable tax laws and
any applicable tax treaty or convention to obtain an exemption from, or
reduction (to the lowest applicable rate) of, such Canadian withholding tax.
5.11 Indemnity. (a) The Borrowers jointly and severally agree to
---------
indemnify each Bank and to hold each Bank harmless from any loss or expense
which such Bank may sustain or incur as a consequence of (i) default by a
Borrower in payment when due of the principal amount of or interest on any
Eurodollar Loan or Canadian COF Rate Loan, (ii) default by a Borrower in making
a borrowing of, conversion into or continuation of Eurodollar Loans or Canadian
COF Rate Loans after the Borrowers have given a notice requesting the same in
accordance with the provisions of this Agreement, (iii) default by a Borrower in
making any prepayment after the Borrowers have given a notice thereof in
accordance with the provisions of this Agreement or (iv) the making of a
prepayment (whether voluntary, mandatory, as a result of acceleration or
otherwise) of Eurodollar Loans or Canadian COF Rate Loans on a day which is not
the last day of an Interest Period with respect thereto, including, without
limitation, in each case, any such loss or expense arising from the reemployment
of funds obtained by it or from fees payable to terminate the deposits from
which such funds were obtained. A certificate as to any amounts that a Bank is
entitled to receive under this subsection 5.11 submitted by such Bank, through
the Administrative Agent, to VWR shall be conclusive in the absence of clearly
demonstrable error and all such amounts shall be paid by the Borrowers promptly
upon demand by such Bank. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) For the purpose of calculation of all amounts payable to a
Bank under this subsection, each Bank shall be deemed to have actually funded
its relevant Eurodollar Loan or Canadian COF Rate Loan through the purchase of a
deposit bearing interest at the Eurodollar Rate or the Canadian COF Rate, as the
case may be, in an amount equal to the amount of that Eurodollar
62
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Loan or Canadian COF Rate Loan, as the case may be, and having a maturity
comparable to the relevant Interest Period; provided, however, that each Bank
-------- -------
may fund each of its Eurodollar Loans or Canadian COF Rate Loans in any manner
it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
5.12 Pro Rata Treatment of Loans, L/C's and Payments; Commitment
-----------------------------------------------------------
Fees. (a) Except as required under subsection 5.8, each borrowing of Revolving
Credit Loans, each payment or prepayment of principal of any Revolving Credit
Loans, each payment of interest on the Revolving Credit Loans, each payment of
Commitment Fees with respect to the Revolving Credit Commitments, each payment
of a Reimbursement Obligation, and each reduction of the Revolving Credit
Commitments, shall be made pro rata among the U.S. Dollar Banks in accordance
--- ----
with their respective Revolving Credit Commitment Percentages.
(b) Except as required under subsection 5.8, each payment or
prepayment of principal of the Term Loans and each payment of interest on the
Term Loans shall be made pro rata among the U.S. Dollar Banks in accordance with
--- ----
their respective Term Loan Percentages.
(c) Each borrowing of Canadian Dollar Loans, each payment or
prepayment of principal of any Canadian Dollar Loans, each payment of interest
on the Canadian Dollar Loans, each payment of Commitment Fees with respect to
the Canadian Dollar Commitments and each reduction of the Canadian Dollar
Commitments, shall be made pro rata among the Canadian Funding Banks in
--- ----
accordance with their respective Canadian Dollar Commitment Percentages.
(d) Except as provided in subsection 2.16, each borrowing of a
Swing Line Loan, each payment or prepayment of principal of a Swing Line Loan,
each payment of interest on the Swing Line Loans and each reduction of the Swing
Line Commitment shall be for the sole account of CoreStates.
(e) Except as provided in subsection 2.16, each borrowing of a
Bridge Loan, each payment or prepayment of principal of a Bridge Loan and each
payment of interest on the Bridge Loans shall be made pro rata (i.e., one-third
--- ---- ----
each) among the Bridge Banks.
(f) Each Bank agrees that in computing such Bank's portion of any
borrowing to be made hereunder, the Administrative Agent (or, with respect to
Canadian Dollar Loans, the Canadian Funding Banks) may, in its (or their)
discretion,
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<PAGE>
round each Bank's percentage of such borrowing to the next higher or lower whole
dollar amount.
5.13 Payments. (a) Except with respect to payments in connection
--------
with the Canadian Dollar Loans (other than Commitment Fees in respect of the
Canadian Dollar Commitments) or the Swing Line Loans or the Bridge Loans, the
Borrowers shall make each payment (including principal of or interest on any
borrowing or any fees or other amounts including Reimbursement Obligations)
hereunder not later than 12:00 (noon), Philadelphia time, on the date when due
in Dollars to the Administrative Agent at its offices set forth in subsection
12.2, in immediately available funds. Such payments shall be made without set
off or counterclaim of any kind. The Administrative Agent shall distribute to
the Banks any payments received by the Administrative Agent promptly upon
receipt in like funds as received.
(b) Any payments with respect to the Swing Line Loans (including
principal of, or interest on, any borrowing or other amounts) shall be made to
CoreStates. Any such payments shall be made not later that 12:00 (noon),
Philadelphia time, on the date when due in Dollars at the office of CoreStates
set forth in subsection 12.2 in immediately available funds. Such payment shall
be made without setoff or counterclaim of any kind.
(c) Any payments with respect to the Canadian Dollar Loans
(including principal of or interest on any borrowing or any fees or other
amounts) (other than Commitment Fees in respect of the Canadian Dollar
Commitments) shall be made directly to the Canadian Funding Banks at their
respective offices set forth in section 12.2 in Canadian Dollars in immediately
available funds not later than 12:00 (noon) Philadelphia time. Such payments
shall be made without set off or counterclaim of any kind. As provided in
subsection 5.1, any payments of Commitment Fees by VWR Canada to the Canadian
Funding Banks shall be made to the Administrative Agent, for the account of the
Canadian Funding Banks, at its offices set forth in subsection 12.2 on the date
when due in Dollars and in immediately available funds. Such payments shall be
made without set off or counterclaim of any kind.
(d) Whenever any payment (including principal of or interest on
any borrowing or any fees or other amounts) hereunder (other than payments on
Eurodollar Loans or Canadian COF Rate Loans) shall become due, or otherwise
would occur, on a day that is not a Business Day, such payment may be made on
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of interest or fees, if applicable.
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5.14 Conversion and Continuation Options. The Borrowers shall have
-----------------------------------
the right at any time upon prior irrevocable notice to the Administrative Agent
and, with respect to Canadian Dollar Loans, each Canadian Funding Bank (i) not
later than 12:00 noon, Philadelphia time, one Business Day prior to conversion,
to convert any Eurodollar Loan to a Base Rate Loan, (ii) not later than 10:00
a.m., Philadelphia time, three Business Days prior to conversion or
continuation, to convert any Base Rate Loan into a Eurodollar Loan or to
continue any Eurodollar Loan as a Eurodollar Loan for any additional Interest
Period, (iii) not later than 10:00 a.m., Philadelphia time, three Business Days
prior to conversion, to convert the Interest Period with respect to any
Eurodollar Loan to another permissible Interest Period, and (iv) not later than
12:00 noon, Philadelphia time, one Business Day prior to conversion, to convert
any Canadian Base Rate Loan to a Canadian COF Rate Loan, to convert any Canadian
COF Rate Loan to a Canadian Base Rate Loan or to convert the Interest Period
with respect to any Canadian COF Rate Loan to another permissible Interest
Period, subject in each case to the following:
-------
(a) a Eurodollar Loan or Canadian COF Rate Loan may not be
converted at a time other than the last day of the Interest Period applicable
thereto;
(b) any portion of a Loan maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar Loan
or Canadian COF Rate Loan;
(c) no Eurodollar Loan may be continued as such and no Base Rate
Loan may be converted to a Eurodollar Loan when any Default has occurred and is
continuing and the Administrative Agent or the Required Banks have determined
that such a continuation is not appropriate;
(d) any portion of a Eurodollar Loan that cannot be converted
into or continued as a Eurodollar Loan by reason of paragraph 5.14(b) or 5.14(c)
automatically shall be converted at the end of the Interest Period in effect for
such Loan to a Base Rate Loan;
(e) on the last day of any Interest Period for Eurodollar Loans,
if the U.S. Dollar Borrowers have failed to give notice of conversion or
continuation as described in this subsection or if such conversion or
continuation is not permitted pursuant to subsection 5.14(d), such Loans shall
be converted to Base Rate Loans on the last day of such then expiring Interest
Period;
(f) no Canadian COF Rate Loan may be continued as such and no
Canadian Base Rate Loan may be converted to a
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Canadian COF Rate Loan when any Default has occurred and is continuing and BOA
Canada has determined that such a continuation is not appropriate;
(g) any portion of a Canadian COF Rate Loan that cannot be
converted into or continued as a Canadian COF Rate Loan by reason of paragraph
5.14(b) or 5.14(f) automatically shall be converted at the end of the Interest
Period in effect for such Loan to a Canadian Base Rate Loan;
(h) on the last day of any Interest Period for Canadian COF Rate
Loans, if VWR Canada has failed to give notice of conversion or continuation as
described in this subsection or if such conversion or continuation is not
permitted pursuant to subsection 5.14(g), such Loans shall be converted to
Canadian Base Rate Loans on the last day of such then expiring Interest Period;
(i) as provided in subsection 2.13(a) and (b), all Swing Line
Loans shall be Base Rate Loans and may not be converted to Eurodollar Loans; and
(j) Each request by a Borrower to convert or continue a Loan
shall constitute a representation and warranty that no Default shall have
occurred and be continuing.
Accrued interest on a Loan (or portion thereof) being converted shall be paid by
the applicable Borrower(s) at the time of conversion.
5.15 Minimum Amounts of Tranches; Maximum Number of Tranches. (a)
-------------------------------------------------------
All borrowings, conversions and continuation of Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections that, after giving effect thereto, the aggregate
principal amount of the Loans comprising each (i) Eurodollar Tranche shall be
equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (ii)
Canadian COF Rate Tranches shall be equal to CAN $250,000 or a whole multiple of
CAN $100,000 in excess thereof.
(b) The Borrowers shall not have outstanding at any one time more
than in the aggregate eight Eurodollar Tranches and/or Canadian COF Rate
Tranches.
5.16 Use of Proceeds. (a) Revolving Credit and Canadian Dollar
--------------- ------------------------------------
Loans. The proceeds of the Revolving Credit Loans, the Bridge Loans and
- -----
Canadian Dollar Loans shall be used by the Borrowers (i) for working capital and
general corporate purposes in the ordinary course of business (including
repaying Reimbursement Obligations, Swing Line Loans and Bridge Loans), and (ii)
with respect to the Revolving Credit Loans and the
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Bridge Loans, to repay Indebtedness under the Existing Credit Agreement and to
pay a portion of the purchase price for the Baxter Acquisition.
(b) Term Loans. The proceeds of the Term Loans shall be used
----------
solely for the purpose of paying a portion of the purchase price for the Baxter
Acquisition and repaying Bridge Loans.
(c) Swing Line Loans. The proceeds of the Swing Line Loans shall
----------------
be used for working capital and general corporate purposes in the ordinary
course of business (including repaying Reimbursement Obligations).
5.17 Limitation on Obligations of VWR Canada. Notwithstanding
---------------------------------------
anything to the contrary contained in subsections 5.9, 5.10 and 5.11, VWR Canada
shall have no obligation to the U.S. Dollar Banks under such subsections.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Banks to enter into this Agreement and to
make the Loans and to issue or participate in the Letters of Credit, each of the
Borrowers hereby represents and warrants to the Agents and each Bank that:
6.1 Financial Condition. The consolidated balance sheet of VWR and
-------------------
its consolidated Subsidiaries as at December 31, 1994 and the related
consolidated statements of income and of cash flows for the fiscal year ended on
such date, copies of which have heretofore been furnished to each Bank, present
fairly the consolidated financial condition of VWR and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of VWR and its consolidated Subsidiaries as at June
30, 1995 and the related unaudited consolidated statements of income and of cash
flows for the three-month period ended on such date, certified by a Responsible
Officer of VWR, copies of which have heretofore been furnished to each Bank,
present fairly the consolidated financial condition of VWR and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the three-month period then ended (subject
to normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved. Neither VWR nor any
of its consolidated Subsidiaries had, at the date of the most recent balance
sheet referred to above, any material Contingent Obligation, liability for
taxes, or any long-term lease or
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unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction, which is
required by GAAP to be but is not reflected in the foregoing statements or in
the notes thereto.
6.2 No Change. Since December 31, 1994 there has been no development
---------
or event nor any prospective development or event which has had or could
reasonably be expected to have a Material Adverse Effect.
6.3 Corporate Existence; Compliance with Law. Each of the Borrowers
----------------------------------------
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect and (d) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
6.4 Corporate Power; Authorization; Enforceable Obligations. Each of
-------------------------------------------------------
the Borrowers has the corporate power, authority, and legal right, to make,
deliver and perform this Agreement and each other Loan Document to which it is a
party and to borrow hereunder (including through the issuance of Letters of
Credit) and has taken all necessary corporate action to authorize the borrowings
(including the Letters of Credit) on the terms and conditions of this Agreement
and each other Loan Document to which it is a party and to authorize the
execution, delivery and performance of this Agreement and each other Loan
Document to which it is a party. No consent or authorization of, filing with or
other act by or in respect of, any Governmental Authority or any other Person
(including stockholders and creditors of the Borrowers) is required in
connection with the borrowings hereunder (including the issuance of Letters of
Credit) or with the execution, delivery, performance, validity or enforceability
of this Agreement, the Notes or any other Loan Document. This Agreement has
been and each other Loan Document to which it is a party will be, duly executed
and delivered on behalf of such Borrower. This Agreement constitutes and each
other Loan Document when executed and delivered will constitute, a legal, valid
and binding obligation of the Borrowers parties thereto enforceable against such
Borrowers in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy,
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insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 No Legal Bar. The execution, delivery and performance of this
------------
Agreement, the Notes and the other Loan Documents by the Borrowers, the
borrowings hereunder (including the issuance of Letters of Credit) and the use
of the proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of any Borrower or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any properties or revenues of
any Borrower pursuant to any such Requirement of Law or Contractual Obligation.
6.6 No Material Litigation. No litigation, investigation or
----------------------
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrowers, threatened against any Borrower or any of
their respective Subsidiaries or against any of its or their respective
properties or revenues (a) with respect to this Agreement, the Notes, the other
Loan Documents or any of the transactions contemplated hereby, except as set
forth in Schedule VIII, or (b) as to which there is a reasonable likelihood of
an adverse determination and which, if adversely determined, could have a
Material Adverse Effect.
6.7 No Default. Neither VWR, any other Borrower nor any of its or
----------
their Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
6.8 Taxes. Each of the Borrowers has filed or caused to be filed all
-----
tax returns which, to its knowledge, are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves, if any, in
conformity with GAAP have been provided on the books of VWR or its Subsidiaries,
as the case may be); no tax Lien has been filed against any of the Borrowers or
any of their Subsidiaries, and, to the knowledge of each of the Borrowers, no
claim is being asserted, with respect to any such tax, fee or other charges.
6.9 Federal Regulations. No part of the proceeds of any Loans will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms
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under Regulation U or for any purpose which violates the provisions of
Regulation U or any other Regulations of the Board of Governors of the Federal
Reserve System. If requested by any Bank or the Administrative Agent, the
Borrowers will furnish to the Administrative Agent and each Bank a statement to
the foregoing effect in conformity with the requirements of FR Form U-l referred
to in said Regulation U. No part of the proceeds of the Loans hereunder will be
used for any purpose which violates, or which is inconsistent with, the
provisions of Regulation X.
6.10 ERISA. Each Plan (such representations in respect of any
-----
Multiemployer Plan being made to the best knowledge of each Borrower) has
complied in all material respects with the applicable provisions of ERISA and
the Code. No prohibited transaction or accumulated funding deficiency (each as
defined in subsection 10.1(k)) or, Reportable Event has occurred with respect to
any Single Employer Plan. The present value of all accrued benefits under each
Single Employer Plan of which any Borrower or a Commonly Controlled Entity is a
sponsor (based on those assumptions used to fund the Plans), as calculated by
such Borrower's actuaries, did not, as of the last annual valuation date, which
in the case of any Plan was not earlier than January 1, 1995, exceed the value
of the assets of the Plans allocable to such benefits. Neither any Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan and neither any Borrower nor any Commonly Controlled Entity
would become subject under ERISA to any liability if any Borrower or any such
Commonly Controlled Entity were to withdraw completely from any Multiemployer
Plan as of the valuation date most closely preceding the date this
representation is made or deemed made. Such Multiemployer Plans are neither in
Reorganization as defined in Section 4241 of ERISA nor Insolvent as defined in
Section 4245 of ERISA. The present value (determined using actuarial and other
assumptions which are reasonable in respect of the benefits provided and the
employees participating) of the liability of the Borrowers and each Commonly
Controlled Entity for post-retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount in excess of $2,000,000.
Neither any Borrower nor any Commonly Controlled Entity has any or has received
notice of any liability under the Coal Industry Retiree Health Benefit Act of
1992. Neither a Reportable Event nor an "accumulated funding deficiency" within
the meaning of Section 412 of the Code or Section 302 of ERISA has occurred
during the five-year period to the date on which this representation is made or
deemed made on the date of a Loan or issuance of a Letter of Credit with respect
to any Single Employer Plan or Multiemployer Plan. No termination of a Single
Employer Plan has occurred, and no Lien
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on assets of any of the Borrowers or any Commonly Controlled Entity in favor of
the PBGC or a Plan has arisen during such five-year period.
6.11 Investment Company Act. None of Borrowers is an "investment
----------------------
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
6.12 Purpose of Loans. The proceeds of the Loans shall be used by
----------------
the Borrowers to repay all amounts payable under the Existing Credit Agreement,
to help finance the Baxter Acquisition, and proceeds remaining and Letters of
Credit issued thereafter shall be used for working capital and general corporate
purposes in the ordinary course of business.
6.13 Environmental Matters. Except to the extent that all of the
---------------------
following could not reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of each of the Borrowers after
reasonable inquiry, the Properties do not contain, and have not previously
contained, in, on, or under, including, without limitation, the soil and
groundwater thereunder, any Materials of Environmental Concern in amounts or
concentrations that constitute or constituted a violation of, or reasonably
could give rise to liability under Environmental Laws.
(b) To the best knowledge of each of the Borrowers after
reasonable inquiry, the Properties and all operations and facilities at the
Properties are in compliance, and have in the last five years been in compliance
with all Environmental Laws, and there is no contamination at, under or about
the Properties or violation of any Environmental Law with respect to the
Properties or the business operated by any Borrower or any Subsidiary thereof
which could interfere with the continued operation of any of the Properties or
impair the fair saleable value of any thereof. None of the Borrowers or any of
their respective Subsidiaries have assumed any liability of any Person under
Environmental Laws.
(c) Neither VWR, any other Borrower, nor any of their
Subsidiaries has received or is aware of any claim, notice of violation, alleged
violation, non-compliance, investigation or advisory action or potential
liability regarding environmental matters or compliance of Environmental Law
with regard to the Properties which has not been satisfactorily resolved by VWR,
such other Borrower, or such Subsidiary, nor is VWR nor any other Borrower aware
or have reason to believe that any such action is being contemplated, considered
or threatened.
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(d) To the best knowledge of each Borrower after diligent
inquiry, Materials of Environmental Concern have not been generated, treated,
stored, transported, disposed of, at, on, from or under any of the Properties,
nor have any Materials of Environmental Concern been transferred from the
Properties to any other location except in either case in the ordinary course of
business of the Borrowers or any of their respective Subsidiaries, in compliance
with all Environmental Laws and such that it could not reasonably be expected to
give rise to liability under any applicable Environmental Law.
(e) There are no governmental, administrative actions or judicial
proceedings pending or, to the best knowledge of each Borrower after reasonable
inquiry, contemplated or threatened under any Environmental Laws to which VWR,
any other Borrower or any of their respective Subsidiaries is or will be named
as a party with respect to the Properties, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to any of the Properties.
(f) To the best knowledge of the Borrowers after reasonable
inquiry, there has been no release or threat of release of Matters of
Environmental Concern at or from the Properties, or arising from or related to
the operation of VWR or any Subsidiary in connection with the Properties or
otherwise in connection with the business operated by VWR or any Subsidiary in
violation of or in amounts or in a manner that could reasonably be expected to
give rise to liability under any Environmental Law.
(g) To the best knowledge of the Borrowers after reasonable
inquiry, each of the representations and warranties set forth in paragraphs
6.13(a) through 6.13(f) is true and correct with respect to each Property.
6.14 No Material Misstatements. No financial statement, exhibit or
-------------------------
schedule furnished by or on behalf of any Borrower to any Agent or any Bank in
connection with the negotiation of this Agreement, any Note or any other Loan
Document contains any misstatement of fact, or omitted or omits to state any
fact necessary to make the statements therein not misleading under the
circumstances under which they were made or given, where such misstatement or
omission would be material to the interests of the Banks with respect to the
performance of each Borrower of its obligations hereunder or thereunder. Prior
to the date hereof, the Borrowers have disclosed to the Banks in writing
(including as set forth on pages 20-21 under the caption "Risks to VWR
Associated with the Acquisition" in that certain Proxy Statement (the "Proxy
Statement") dated August 11, 1995 for
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Special Meeting of Shareholders to be held September 13, 1995) any and all facts
which materially and adversely affect (to the extent the Borrowers can as of the
date hereof reasonably foresee), the business, operations or financial condition
of VWR and its Subsidiaries taken as a whole, and the ability of the Borrowers
to perform their obligations under this Agreement, the Notes and the other Loan
Documents.
6.15 Ownership of Properties; Liens. Each of the Borrowers and its
------------------------------
Subsidiaries has good and marketable title to, or valid leasehold interests in,
all its material real property, except for minor defects in title that do not
interfere in any material respect with its ability to conduct its business as
presently conducted. All such material properties are free and clear of all
Liens, other than Liens permitted by subsection 9.2.
6.16 Intellectual Property. Each of the Borrowers and each of their
---------------------
respective Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted (the "Intellectual Property") except for those
---------------------
as to which the failure to own or license could not reasonably be expected to
have a Material Adverse Effect. No claim has been asserted and is pending by
any Person challenging or questioning the use of any such Intellectual Property,
nor does such Borrower know of any valid basis for any such claim. The use of
such Intellectual Property by the Borrowers and their Subsidiaries does not
infringe the rights of any Person, except for such claims and infringements
that, in the aggregate, do not have such a Material Adverse Effect.
6.17 No Burdensome Restrictions. No Requirement of Law or
--------------------------
Contractual Obligation of any of the Borrowers or any of their Subsidiaries
could reasonably be expected to have a Material Adverse Effect. All of the
Subsidiaries of such Borrower at the date hereof are listed on Schedule II of
this Agreement under its name.
6.18 Security Interests. (a) At all times after execution and
------------------
delivery of the Pledge Agreements by the Borrower(s) party thereto and
satisfaction of the conditions specified in subsection 7.1(b), the security
interests created for the benefit of the Administrative Agent and the Banks
under the Pledge Agreements will constitute valid, perfected security interests
in the stock pledged thereunder, subject to no other Liens.
(b) At all times after execution and delivery of the Security
Documents (other than the Pledge Agreements) by the Borrower(s) party thereto
and completion of the filing and recordings listed on Schedule VI, the security
interests created
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for the benefit of the Administrative Agent and the Banks pursuant to the
Security Documents (other than the Pledge Agreements) will constitute valid,
perfected security interests in the collateral subject thereto, subject to no
other Liens whatsoever, except as provided in Schedule IV attached hereto or as
permitted by subsection 9.2.
6.19 Baxter Acquisition.
------------------
(a) Delivery. Complete and correct copies of the Baxter
--------
Acquisition Agreements have been provided to the Administrative Agent.
(b) Validity. VWR has the power and authority under the laws of
--------
its jurisdiction of incorporation and under its articles of incorporation and
by-laws to enter into and perform the Baxter Acquisition Agreements; all actions
(corporate or otherwise) necessary or appropriate for the execution and
performance of the Baxter Acquisition Agreements by VWR has been taken; and the
Baxter Acquisition Agreements constitute the valid and binding obligation of
each party thereto, enforceable in accordance with their respective terms.
(c) No Violations. The making and performance of the Baxter
-------------
Acquisition Agreements will not violate any provision of any law or regulation,
federal, state or local, including precedents of the jurisdiction of
incorporation of VWR, and will not violate any provisions of the articles of
incorporation and by-laws of VWR, or constitute a default under any agreement by
which VWR or its property may be bound.
(d) Immediately after the consummation of the Baxter Acquisition,
the representations and warranties set forth in this Article VI shall be true
and correct in all material respects.
6.20 Senior Debt Status. The obligations of the Borrowers under this
------------------
Agreement and the Notes rank senior in priority of payment to the Subordinated
Debt.
6.21 Solvency. Each of the Borrowers is, and after receipt and
--------
application of the first loan hereunder will be, solvent such that: (a) the
fair value of its assets (including without limitation the fair salable value of
the goodwill and other intangible property of such Borrower) is greater than the
total amount of its liabilities, including without limitation, Contingent
Obligations, (b) the present fair salable value of its assets (including without
limitation the fair salable value of the goodwill and other intangible property
of such Borrower) is not less than the amount that will be required to pay the
probable liability on its debts as they become absolute and
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matured, and (c) it is able to realize upon its assets and pay its debts and
other liabilities and commitments (including Contingent Obligations) as they
mature in the normal course of business. Each Borrower (a) does not intend to,
and does not believe that it will, incur debts or liabilities beyond its ability
to pay as such debts and liabilities mature, and (b) is not engaged in a
business or transaction, or about to engage in a business or transaction, for
which its property would constitute unreasonably small capital after giving due
consideration to the prevailing practice and industry in which it is engaged.
6.22 Public Utility Holding Company Act. No Borrower is subject to
----------------------------------
regulation as a "holding company", subject to regulation as an "affiliate" of a
"holding company", or subject to regulation as a "subsidiary company" of a
"holding company", in each case under the Public Utility Holding Company Act of
1935, as amended.
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Initial Extension of Credit. The agreement of each
-----------------------------------------
Bank (including the Bridge Banks) to make the initial Extension of Credit
requested to be made by it is subject to the satisfaction, immediately prior to
or concurrently with the making of such Loan on the Closing Date, of the
following conditions precedent:
(a) Credit Agreement and Notes. The Administrative Agent shall
--------------------------
have received (i) this Agreement, (A) executed and delivered by a duly
authorized officer of each Borrower, with a counterpart for each Bank, and (B)
executed and delivered by a duly authorized officer of each Bank, (ii) for the
account of each U.S. Dollar Bank, a Revolving Credit Note and a Term Note
conforming to the requirements hereof and executed by a duly authorized officer
of the U.S. Dollar Borrowers, (iii) for the account of CoreStates, a Swing Line
Note conforming to the requirements hereof and executed by a duly authorized
officer of the U.S. Dollar Borrowers, (iv) for the account of each Bridge Bank,
a Bridge Loan Note conforming to the requirements hereof and executed by a duly
authorized officer of the U.S. Dollar Borrower and (v) for the account of each
Canadian Funding Bank, a Canadian Dollar Note conforming to the requirements
hereof and executed by a duly authorized officer of VWR Canada.
(b) Other Loan Documents. (i) The Administrative Agent shall
have the following agreements executed and delivered by a duly authorized
officer of the Borrower(s) party thereto: (A) the Pledge Agreements, together
with share certificates evidencing all of the stock pledged thereunder and stock
powers or other appropriate instruments of transfer, executed in blank,
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(B) the Security Agreement, (C) each of the other Security Documents, (D) the
U.S. Dollar Borrowers Guarantee and (E) the VWR Canada Subordination Agreement.
(ii) Any document (including without limitation financing
statements) required to be filed, registered or recorded in order to create, for
the benefit of the Administrative Agent and the Banks, a perfected, first
priority Lien, subject only to those Liens described on Schedule IV, shall have
been properly prepared for filing, registration or recording in each office in
each jurisdiction in which such filings, registration and recordation are
required to perfect such first priority security interests created by the
Security Documents, and the Administrative Agent shall be satisfied that all
such recordings and filings will be completed promptly following the Closing
Date and that all necessary filing, recording and other fees and all taxes and
expenses related to such filings, registrations and recordings will be paid in
full by the Borrowers.
(c) Corporate Proceedings. The Administrative Agent shall have
---------------------
received, with a counterpart for each Bank, a certificate of the Secretary or an
Assistant Secretary of each Borrower dated as of the Closing Date certifying (A)
that attached thereto is a true and complete copy of the resolutions, in form
and substance satisfactory to the Administrative Agent, of the Board of
Directors of such Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Notes and the other Loan Documents to which
it is a party, and (ii) the borrowings contemplated hereunder and that such
resolutions attached thereto have not been amended, modified, revoked or
rescinded and (B) as to the incumbency and specimen signature of each officer
executing any Loan Document on behalf of a Borrower; and such certificate and
the regulations attached thereto shall be in form and substance satisfactory to
the Administrative Agent.
(d) Corporate Documents. The Administrative Agent shall have
-------------------
received, with a counterpart for each Bank, true and complete copies of the
certificate of incorporation and by-laws of each Borrower, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of such Borrower.
(e) Borrowing Base Certificates. The Administrative Agent shall
---------------------------
have received from the Borrowers, with a counterpart for each Bank, a U.S.
Dollar Borrowing Base Certificate and a Canadian Dollar Borrowing Base
Certificate, in each case dated the Closing Date, with appropriate insertions
and attachments satisfactory in form and substance to the Administrative Agent,
executed by a Responsible Officer of the
76
<PAGE>
appropriate Borrower(s). The foregoing Certificates shall be prepared based on
reasonable assumptions and the good faith estimates of the Borrowers, as the
Banks acknowledge that the Baxter Acquisition will have just been consummated.
(f) Fees. The Administrative Agent shall have received for the
----
account of the Agents the fees to be received on the Closing Date referred to in
the Fee Letter.
(g) Legal Opinions. The Administrative Agent shall have
--------------
received, with a counterpart for each Bank, the following legal opinions, each
dated the Closing Date:
(i) the executed legal opinion of Drinker Biddle & Reath,
counsel to the Borrowers, covering the matters set forth in Exhibit G-1;
(ii) the executed legal opinion of Blake, Cassels & Graydon,
special Canadian counsel, covering the matters set forth in Exhibit G-2; and
(iii) the executed legal opinion of Mary J. Mahabir, special
Barbados counsel, covering the matters set forth in Exhibit G-3.
Each such opinion shall be addressed to the Banks and the Agents and cover such
other matters incident to the transactions contemplated by this Agreement as the
Administrative Agent may reasonably require.
(h) UCC Filing and Other Searches. The Administrative Agent
-----------------------------
shall have received the results of (i) Uniform Commercial Code Filings and/or
similar searches made with respect to the Borrowers in the states or provinces
in which their chief executive offices are located and all other states or
provinces in which filings are required to be made pursuant to subsection
7.1(b)(ii), together with copies of financing statements disclosed by such
searches and (ii) such tax and judgment lien searches as the Administrative
Agent shall reasonably request, and each of the foregoing searches shall
disclose no Liens on any assets encumbered by any Security Document, except for
Liens permitted under subsection 9.2 or, if unpermitted Liens are disclosed, the
Administrative Agent shall have received satisfactory evidence of the release of
such Liens.
(i) Collateral Audit. The Agents shall have completed a
----------------
collateral audit, which shall be delivered to the Banks and shall be in form and
substance satisfactory to the Agents.
77
<PAGE>
(j) Existing Credit Agreement. The Existing Credit Agreement
-------------------------
shall be terminated, all Indebtedness thereunder shall have been repaid in full
and there shall be no letters of credit outstanding issued for the account of a
Borrower, other than the Existing Letters of Credit which, pursuant to
subsection 2.12, are deemed to be issued hereunder.
(k) Baxter Acquisition. The Baxter Acquisition shall be
------------------
consummated substantially on the terms set forth in the Baxter Acquisition
Agreement. The total cost to VWR and its Subsidiaries to consummate such
transaction shall not exceed $401,000,000 plus the cost of acquiring certain
----
accounts receivable at closing in an amount not to exceed an additional
$30,000,000 in the aggregate, plus the cost of acquiring certain inventory as
----
contemplated by Section 7 of the Services Agreement, a copy of which agreement
is attached as Exhibit VII to the Proxy Statement, plus certain fees for
----
services rendered in connection with the acquisition, all as contemplated in the
Baxter Acquisition Agreements, and the Agents shall be satisfied with all
material aspects of the Baxter Acquisition.
(l) Subordinated Debt. VWR shall have received the proceeds of
-----------------
the Subordinated Debt in the amount of at least $135,000,000 and the terms of
the debenture evidencing such Subordinated Debt shall be substantially in the
form of Exhibit H hereto.
(m) Additional Equity Investment. VWR shall have received at
----------------------------
some time after December 31, 1994 at least $115,000,000 of additional equity
capital from E. Merck, Incorporated or an Affiliate thereof, such capital
contribution to be on terms previously approved by the Agents.
(n) Insurance. The Administrative Agent shall have received
---------
Certificates of Insurance with respect to each Borrower's fire, casualty,
liability and other insurance covering its respective property and business,
including loss payee endorsements in favor of the Administrative Agent (for the
benefit of the Banks) as to all material collateral under the Security
Documents.
(o) Good Standing. The Administrative Agent shall have received
-------------
certificates of good standing, subsistence and/or status dated a recent date
from the Secretary of State or appropriate taxing or other authorities in the
state or province of incorporation of each Borrower.
7.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Bank to make any Extension of Credit requested to be made by it on any date
(including, without limitation, its
78
<PAGE>
initial Extension of Credit) is subject to the satisfaction of the following
conditions precedent:
(a) Representations and Warranties. Each of the representations
------------------------------
and warranties made by each Borrower herein or which are contained in any
certificate, document or financial or other statement furnished at any time
under or in connection herewith or therewith, shall be true and correct in all
material respects on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
----------
occurred and be continuing on such date or after giving effect to the Extension
of Credit requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings,
------------------
and all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Agents, and the Agents shall have
received such other documents and legal opinions in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
Each request by the Borrowers for an Extension of Credit hereunder shall
constitute a representation and warranty by the Borrowers as of the date of such
Extension of Credit that the conditions contained in this subsection 7.2 have
been satisfied.
SECTION 8. AFFIRMATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and unpaid, any Letter of Credit
remains outstanding or any other amount is owing to any Bank or any Agent
hereunder, such Borrower shall and (except in the case of delivery of financial
information, reports and notices) shall cause each of its Subsidiaries to:
8.1 Financial Statements. Furnish to the Administrative Agent copies
--------------------
(in such quantities as the Administrative Agent shall request) of each of the
following so that the Administrative Agent may (and the Administrative Agent
hereby agrees to within five (5) Business Days after receipt thereof) deliver to
each Bank:
(a) as soon as available, but in any event not later than 90 days
after the close of each fiscal year of VWR, a copy of the annual audit report
for such year for VWR and its
79
<PAGE>
consolidated Subsidiaries, including therein a consolidated balance sheet of VWR
and its consolidated Subsidiaries as at the end of such fiscal year, and related
consolidated statements of income and retained earnings and changes in cash
flows of VWR and its consolidated Subsidiaries for such fiscal year, all in
reasonable detail, prepared in accordance with GAAP applied on a basis
consistently maintained throughout the period involved and with the prior year
with such changes thereon as shall be approved by VWR's independent certified
public accountants, such financial statements to be certified by Ernst & Young
or other independent certified public accountants selected by VWR and reasonably
acceptable to the Banks, without a "going concern" or like qualification or
exception or qualification arising out of the scope of the audit; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal year
of VWR, unaudited cash flows of VWR and its consolidated Subsidiaries, including
therein (i) a consolidated balance sheet of VWR and its consolidated
Subsidiaries as at the end of such fiscal quarter, (ii) the related consolidated
statements of income and retained earnings of VWR and its consolidated
Subsidiaries, and (iii) the related consolidated statement of changes in
financial position of VWR and its consolidated Subsidiaries all for the period
from the beginning of such fiscal quarter to the end of such fiscal quarter and
the portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the like period of
the preceding fiscal year; all in reasonable detail, prepared in accordance with
GAAP applied on a basis consistently maintained throughout the period involved
and with prior periods and accompanied by a certificate of a Responsible Officer
of VWR stating that the financial statements fairly present the financial
condition of VWR and its consolidated Subsidiaries as of the date and for the
periods covered thereby (subject to normal year-end audit adjustments).
8.2 Certificates; Other Information. Furnish to the Administrative
-------------------------------
Agent copies (in such quantities as the Administrative Agent may request) of
each of the following so that the Administrative Agent may (and the
Administrative Agent hereby agrees to within five (5) Business Days after
receipt thereof) deliver to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a certificate of VWR's independent certified
public accountants reporting on such financial statements stating that in making
the examination necessary for certifying such financial statements no knowledge
was obtained of any Default or Event of Default, except as specifically
indicated;
80
<PAGE>
(b) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a certificate of the chief financial officer
or Treasurer or Assistant Treasurer of VWR showing in detail the calculations
demonstrating compliance with the financial covenants set forth in subsection
9.1; and concurrently with the delivery of the financial statements referred to
in subsections 8.1(a) and 8.1(b), a certificate of the chief financial officer
or Treasurer or Assistant Treasurer of VWR stating that, to the best of his or
her knowledge, each of the Borrowers during such period has kept, observed,
performed and fulfilled each and every covenant and condition contained in this
Agreement and in the Notes and the other Loan Documents to which it is a party
and that such officer has obtained no knowledge of any Default or Event of
Default except as specifically indicated; if the certificate above shall
indicate that such officer has obtained knowledge of a Default or Event of
Default, such certificate shall state what efforts the Borrowers are making to
cure such Default or Event of Default;
(c) within 45 days after the end of the first three fiscal
quarters in each fiscal year of VWR, and within 90 days after the end of each
fiscal year of VWR, a certificate of the chief financial officer or Treasurer or
Assistant Treasurer of VWR showing in detail the computations necessary to
calculate the Applicable Margin and Commitment Fee Rate (a "Senior Debt/EBITDA
------------------
Ratio Certificate");
- -----------------
(d) on or prior to thirty days prior to the commencement of each
fiscal year of VWR and in any event, not later than ten Business Days following
approval by the Board of Directors of VWR, a copy of VWR's final Planned Profit
and Loss Statement for the next fiscal year as approved by such Board of
Directors;
(e) within five days after the same are sent, copies of all
financial statements and reports which VWR sent to its stockholders and within
five days after the same are filed, copies of all financial statements and
reports which any Borrower may make to, or file with, the Securities and
Exchange Commission or any successor of analogous Governmental Authority;
(f) (i) within 15 days after the last day of each month, a fully
completed certificate (each a "U.S. Dollar Borrowing Base Certificate") signed
--------------------------------------
by a Responsible Officer of VWR, in a form acceptable to the Administrative
Agent, with respect to U.S. Eligible Receivables and U.S. Eligible Inventory as
of such last day of such month and (ii) within 15 days after the last day of
each month, a fully completed Certificate (each a "Canadian Dollar Borrowing
-------------------------
Base Certificate") signed by a Responsible Officer of VWR Canada, in a form
- ----------------
acceptable to the Administrative Agent, with respect to Canadian Eligible
81
<PAGE>
Receivables and Canadian Eligible Inventory as of such last day of such month;
and
(g) promptly, such additional financial and other information as
the Administrative Agent or any Bank may from time to time reasonably request,
including without limitation additional U.S. Dollar Borrowing Base Certificates
and/or Canadian Dollar Borrowing Base Certificates if the Administrative Agent
believes that it needs an updated Certificate prior to the time it would
otherwise be due under paragraph (f)(i) and (ii) of this subsection 8.2.
8.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
VWR or its Subsidiaries, as the case may be.
8.4 Conduct of Business and Maintenance of Existence. Except as
------------------------------------------------
otherwise permitted in subsection 9.5, continue to engage in business of the
same general type as now conducted by it and, preserve, renew and keep in full
force and effect its corporate existence and take all reasonable action to
maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, have a Material Adverse Effect.
8.5 Maintenance of Property; Insurance. Keep all property useful and
----------------------------------
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business, with the Administrative Agent (for the benefit of
the Banks) being named as loss payee as to all material collateral under the
Security Documents; and furnish to each Bank, upon written request, full
information as to the insurance carried, including evidence that the
Administrative Agent (for the benefit of the Banks) is named as loss payee as to
all material collateral under the Security Documents.
8.6 Inspection of Property; Books and Records; Discussions. (a)
------------------------------------------------------
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and
82
<PAGE>
all Requirements of Law shall be made of all dealings and transactions in
relation to its business and activities; and upon reasonable notice permit
representatives of any Bank to visit and inspect any of its properties and
examine and make abstracts from any of its books and records during normal
business hours and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of VWR and
its Subsidiaries with officers and employees of VWR and its Subsidiaries and
with its independent certified public accountants.
(b) (i) Permit a collateral audit by the Administrative Agent or
a representative thereof of the collateral securing the Notes as may be
requested by the Administrative Agent and (ii) pay the cost of any such
collateral audit; provided that, the Borrowers shall only be responsible to pay
-------- ----
the cost of one such collateral audit in any calendar year unless a Default
shall exist and be continuing, in which event the Borrowers shall be obligated
to pay for all such collateral audits requested by the Administrative Agent.
8.7 Notices. Promptly give notice to the Administrative Agent and
-------
each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of VWR or any of its Subsidiaries or (ii) litigation, investigation
or proceeding which may exist at any time between VWR or any of its Subsidiaries
and any Governmental Authority, which in either case, if not cured or if
adversely determined, as the case may be, could have a Material Adverse Effect;
(c) any litigation or proceeding affecting VWR or any of its
Subsidiaries in which the amount involved is $5,000,000 or more and not covered
by insurance as reasonably determined by VWR's corporate counsel or in which
injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after VWR knows or has reason to know thereof: (i) the occurrence
or expected occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, any Lien in favor of PBGC
or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or any Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the
83
<PAGE>
terminating, Reorganization or Insolvency of, any Plan or (iii) assessment of
liability under the Coal Industry Retiree Health Benefit Act of 1992; and
(e) an event which has had or could reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrowers propose to take with respect thereto.
8.8 Environmental Laws. (a) Comply with, and require compliance by
------------------
all tenants and all subtenants, if any, with, all Environmental Laws and obtain
and comply with and maintain, and require that all tenants and subtenants obtain
and comply with and maintain, any and all licenses, approvals, registrations or
permits required by Environmental Laws, except to the extent that failure to so
comply or obtain or maintain such documents could not reasonably be expected to
have a Material Adverse Effect;
(b) Comply with all lawful and binding orders and directives of
all Governmental Authorities respecting Environmental Laws; and
(c) Defend, indemnify and hold harmless the Agents and the Banks,
and their respective employees, agents, officers, directors, successors and
assigns from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to any
violation of or noncompliance with or liability under any Environmental Laws, or
any orders, requirements or demands of Governmental Authorities related thereto
which in each case relate to or arise in connection with any Borrower, any
Property or any activities relating to any other property or business of a
Borrower or the enforcement of any rights provided herein or in the other Loan
Documents, including, without limitation, attorneys' and consultants' fees,
response costs, investigation and laboratory fees, court costs and litigation
expenses, except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of any of the foregoing enumerated parties.
This indemnity shall continue in full force and effect regardless of the
termination of this Agreement and the payment of the Notes.
8.9 Pledge of Real Property. At any time and from time to time at
-----------------------
the written request of the Administrative Agent indicating that such request is
being made at the direction of the Required Banks, each Borrower shall execute,
deliver and, if requested, record such mortgage, deed of trust and related
84
<PAGE>
documents as the Administrative Agent shall reasonably request, and take such
further action as the Administrative Agent shall reasonably request, in each
case, in order to grant to the Administrative Agent (or other Person selected by
the Administrative Agent) for the benefit of the Banks a first priority Lien
(subject to customary permitted exceptions) in all real property or leasehold
interests owned by such Borrower as additional collateral for the obligations of
the Borrowers to the Banks under this Agreement and the Notes; provided that,
-------- ----
notwithstanding the foregoing, any Lien on property of VWR Canada shall only be
in favor of the Canadian Funding Banks. The Borrowers shall be responsible for
the reasonable costs and expenses (including attorneys' fees and expenses) of
the Administrative Agent in connection with the preparation, registration,
execution and recording (including mortgage recording tax) of the foregoing
documents.
8.10 Management Changes. Notify the Administrative Agent in writing
------------------
within thirty (30) days after any change of its executive officers.
8.11 Interest Rate Protection. Within ninety (90) days after the
------------------------
Closing Date, enter into, with one or more Banks, the unsecured long-term debt
obligations of which are rated "A3" or higher by Moody's or "A-" or higher by
S&P, and issued by a Bank having capital, surplus and undivided profits
aggregating at least $250,000,000, such interest rate protection contracts
(collectively, the "Interest Rate Protection Agreements") as are necessary to
-----------------------------------
cause an amount not less than 25% of the Borrowers' then outstanding Loans
hereunder to bear interest at a fixed rate. Such contracts shall conform to
ISDA standards, shall be subject to such intercreditor and subordination
provisions as may be required by the Agents and shall otherwise be acceptable to
the Agents as to structure, notional amount (subject to the 25% standard set
forth herein) and term (except that no such contract shall be required to extend
beyond the Termination Date).
SECTION 9. NEGATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and unpaid, any Letter of Credit
remains outstanding or any other amount is owing to any Bank or Agent hereunder,
such Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly:
85
<PAGE>
9.1 Financial Condition Covenants.
-----------------------------
(a) Maintenance of Consolidated Net Worth. Permit Consolidated
-------------------------------------
Net Worth on the last day of any fiscal quarter to be less than (i) for the 4th
Quarter 1995, $145,000,000 and (ii) for any fiscal quarter thereafter, the sum
of (x) $145,000,000 plus (y) seventy-five percent (75%) of Consolidated Net
Income for each fiscal quarter commencing with the first fiscal quarter of 1996
and ending with the fiscal quarter for which such calculation is being made,
exclusive of any fiscal quarters in which Consolidated Net Income is a negative.
(b) Minimum Consolidated EBITDA. At the last day of any period
---------------------------
set forth below, permit Consolidated EBITDA for the period of the four
consecutive fiscal quarters ending on such date (except for the calculations as
at the end of each of the first three fiscal quarters after the Closing Date,
for which the amount shall be calculated for the less than four-quarter periods
set forth below and then annualized, i.e., (i) for the 4th Quarter 1995,
----
multiplied by 4, (ii) for the 4th Quarter 1995 -1st Quarter 1996, multiplied by
2 and (iii) for the 4th Quarter 1995 - 2nd Quarter 1996, multiplied by 4/3) to
be less than the amount set forth opposite such period below:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
4th Quarter 1995 $40,000,000
4th Quarter 1995 - 1st Quarter 1996 52,000,000
4th Quarter 1995 - 2nd Quarter 1996 56,000,000
3rd Quarter 1996 58,000,000
4th Quarter 1996 64,000,000
1st Quarter 1997 70,000,000
2nd Quarter 1997 75,000,000
3rd Quarter 1997 82,000,000
4th Quarter 1997 85,000,000
1st Quarter 1998 and each Quarter 95,000,000
thereafter
</TABLE>
(c) Interest Coverage Ratio. At the last day of any period set
-----------------------
forth below, permit the Interest Coverage Ratio for the period of the four
consecutive fiscal quarters ending on such date (except for the calculations as
at the end of each of the first three fiscal quarters after the Closing Date,
for which the ratio shall be calculated for the less than four-quarter periods
set forth below) to be less than the ratio set forth opposite such period
below :
86
<PAGE>
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
4th Quarter 1995 1.75
4th Quarter 1995 - 1st Quarter 1996 2.25
4th Quarter 1995 - 2nd Quarter 1996 2.50
3rd Quarter 1996 2.50
4th Quarter 1996 2.75
1st Quarter 1997 3.00
2nd Quarter 1997 3.00
3rd Quarter 1997 3.00
4th Quarter 1997 3.00
1st Quarter 1998 and each Quarter 3.25
thereafter
</TABLE>
(d) Senior Leverage Ratio. At the last day of any period set
---------------------
forth below, permit the ratio of Senior Debt to Consolidated EBITDA for the
period of the four consecutive fiscal quarters ending on such day (except for
the calculations as at the end of each of the first three fiscal quarters after
the Closing Date, for which (i) the ratio shall be calculated for the less than
four-quarter periods set forth below and (ii) in calculating such ratio, the
Consolidated EBITDA figure that appears in the numerator of such ratio shall be
annualized in the manner set forth in subsection 9.1(b)) to be greater than the
ratio set forth opposite such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
4th Quarter 1995 7.00
4th Quarter 1995 - 1st Quarter 1996 5.50
4th Quarter 1995 - 2nd Quarter 1996 4.75
3rd Quarter 1996 4.40
4th Quarter 1996 4.00
1st Quarter 1997 3.75
2nd Quarter 1997 3.50
3rd Quarter 1997 3.25
4th Quarter 1997 3.00
1st Quarter 1998 and each Quarter 3.00
thereafter
</TABLE>
(e) Fixed Charge Coverage Ratio. Permit the ratio for any
---------------------------
period of four consecutive fiscal quarters ending during any period set forth
below (except for the calculations as at the end of each of the first three
fiscal quarters after the Closing Date, for which the ratio shall be calculated
for the less than four-quarter periods set forth below) of (i) Consolidated
EBITDA for such period to (ii) Consolidated Fixed Charges for such period to be
less than the ratio set forth opposite such period below:
87
<PAGE>
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
4th Quarter 1995 1.00
4th Quarter 1995 - 1st Quarter 1996 1.00
4th Quarter 1995 - 2nd Quarter 1996 1.00
3rd Quarter 1996 1.00
4th Quarter 1996 1.00
1st Quarter 1997 1.05
2nd Quarter 1997 1.05
3rd Quarter 1997 1.05
4th Quarter 1997 1.10
1st Quarter 1998 and each Quarter 1.10
thereafter
</TABLE>
9.2 Limitation on Liens. Create, incur, assume or suffer to
-------------------
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens created pursuant to the Security Documents;
(b) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves with
--------
respect thereto are maintained on the books of such Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being contested
in good faith by appropriate proceedings;
(d) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of VWR and its Subsidiaries taken as a whole;
88
<PAGE>
(g) Liens listed on Schedule IV hereto, securing Indebtedness
permitted by subsection 9.3(d), provided that no such Lien is amended after
--------
the date of this Agreement to cover any additional property or to secure
additional Indebtedness;
(h) Liens securing Indebtedness of the Borrower and their
Subsidiaries permitted by subsection 9.3(c) incurred to finance the acquisition
(including through Capital Leases) of fixed or capital assets, provided that
--------
(i) such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital assets or such Liens shall have existed on
such assets prior to their acquisition by a Borrower or a Subsidiary thereof and
were not created in anticipation of the acquisition, (ii) such Liens do not at
any time encumber any property other than the property financed by such
Indebtedness, (iii) the Liens are not modified to secure other Indebtedness and
the amount of Indebtedness secured thereby is not increased and (iv) the
principal amount of Indebtedness secured by any such Lien shall not at any time
exceed 100% of the original purchase price of such property;
(i) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness permitted by
subsection 9.3(e), provided that (i) such Liens existed at the time such
corporation became a subsidiary and were not created in anticipation of the
acquisition, (ii) any such Lien does not by its terms cover any property or
assets after the time such corporation becomes a Subsidiary which were not
covered immediately prior thereto and (iii) any such Lien does not by its terms
secure any Indebtedness other than Indebtedness existing immediately prior to
the time such corporation becomes a Subsidiary; and
(j) Liens not otherwise permitted hereunder which secure
Indebtedness permitted under subsection 9.3(h) not exceeding, as to the
Borrowers and all Subsidiaries thereof taken together, $1,000,000 in aggregate
amount at any one time outstanding; provided, however, such Liens shall not
-------- -------
attach to (A) inventory (including Eligible Inventory) of any Borrower, (B)
accounts receivable (including Eligible Receivables) of any Borrower, and (C)
the books and records of any Borrower.
9.3 Limitation of Indebtedness. Create, incur, assume or suffer to
-------------------------
exist any Indebtedness except:
(a) Indebtedness in respect of the Loans, the Notes, the Letters
of Credit and other obligations of the Borrowers under this Agreement;
89
<PAGE>
(b) Indebtedness of a Borrower to another Borrower to the extent
that the incurrence of such Indebtedness does not violate subsection 9.11(f);
(c) Indebtedness of VWR and any of its Subsidiaries incurred
solely in order to finance the acquisition (including through Capital Leases) of
fixed or capital assets in an aggregate principal amount not exceeding, as to
the Borrowers and their Subsidiaries taken together, $6,000,000 at any one time
outstanding;
(d) Indebtedness listed on Schedule V (including those letters of
credit in an aggregate drawable amount not in excess of $2,000,000 assumed by
one or more of the Borrowers pursuant to the Baxter Acquisition), and renewals,
extensions and modifications thereof which do not increase the principal amount
thereof;
(e) Indebtedness of a corporation which becomes a Subsidiary
after the date hereof, provided that, (i) such Indebtedness existed at the time
-------- ----
such corporation became a Subsidiary and was not created in anticipation of the
acquisition and (ii) immediately after giving effect to the acquisition of such
corporation by a Borrower, no Default or Event of Default shall have occurred
and be continuing; and, renewals, extensions and modifications thereof which do
not increase the principal amount thereof;
(f) the Subordinated Debt, and renewals, extensions and
modifications thereof which do not increase the principal amount thereof;
(g) Indebtedness under the Interest Rate Protection Agreements;
(h) Indebtedness secured by any Lien permitted by subsection
9.2(j), and renewals, extensions and modification thereof which do not increase
the principal amount thereof;
(i) Indebtedness in the nature of accounts payable owed to Baxter
Healthcare Corporation and its Affiliates in an amount not to exceed in the
aggregate $30,000,000 incurred under the Baxter Acquisition Agreements to
finance accounts receivable being acquired after the closing of the Baxter
Acquisition; provided that, no such Indebtedness shall be refinanced, extended,
-------- ----
renewed or continued beyond the initial due date therefor; and
(j) additional Indebtedness not exceeding $4,000,000 in aggregate
principal amount at any time outstanding.
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9.4 Limitations on Fundamental Changes. Enter into any merger,
----------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except that:
(a) any Subsidiary of VWR may be merged or consolidated with or
into VWR (provided that VWR shall be the continuing or surviving corporation) or
with or into any other U.S. Dollar Borrower (provided that if any such
--------
transaction shall be between a Subsidiary which is not a U.S. Dollar Borrower
and a Subsidiary which is a U.S. Dollar Borrower, such U.S. Dollar Borrower
shall be the continuing or surviving corporation); and
(b) any Subsidiary of VWR may sell, lease, transfer or otherwise
dispose of any or all of its assets (upon voluntary liquidation or otherwise) to
a U.S. Dollar Borrower; provided that, immediately after any such transaction
-------- ----
referred to in paragraphs (a) and (b) above and after giving effect thereto,
each of the Borrowers is in compliance with this Agreement and no Default or
Event of Default shall have occurred and be continuing or result from such
transaction.
9.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
(c) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection in the ordinary course of business of such accounts receivable;
(d) as permitted by Section 9.4;
(e) the sale or conveyance of VWR's ten percent (10%) minority
interest in the joint venture with EM Industries Incorporated known as Bender
and Hobein and the sale or conveyance by VWR of that certain building located at
911 Commerce Court, Buffalo Grove, Illinois 60089 and operated as part of the
Sargent-Welch Division of VWR; provided that (i) such sale or conveyance is for
-------- ----
cash consideration which the officers or Board of Directors of VWR deems to be
fair and reasonable and
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(ii) the Net Proceeds are applied to the Loans as provided in subsection 5.7(b);
(f) so long as no Default shall exist or be continuing, the
transfer by VWR to E. Merck, Darmstadt, Germany or one of its Affiliates of a
portion of the assets acquired by VWR in the Baxter Acquisition, which assets
constitute the international business of what is sometimes referred to as the
"Industrial Distribution Business" of Baxter Healthcare Corporation, other than
any such assets relating to business conducted in Canada or Puerto Rico;
provided that (i) the total sales volume attributed to the assets so
- -------- ----
transferred does not exceed $7,000,000 in the aggregate and (ii) such transfer
is in accordance with applicable law; and
(g) in addition to the above subsections 9.5(a) through 9.5(f)
inclusive, any such conveyances, sales, leases, assignments, transfers or other
disposals, the aggregate amount of which for VWR and its Subsidiaries for any
fiscal year of VWR does not exceed $2,000,000; provided that (i) such
-------- ----
conveyance, sale, lease, assignment, transfer or other disposition is for cash
consideration which the officers or Board of Directors of VWR or its Subsidiary,
as the case may be, deems to be fair and reasonable and (ii) the Net Proceeds
are applied to the Loans as provided in subsection 5.7(b).
9.6 Limitation on Distributions. Declare or pay any Distribution
---------------------------
(whether in cash or property or obligations of a Borrower or any Subsidiary
thereof) in respect of any Borrower or any Subsidiary thereof, except (a) any
Wholly-Owned Subsidiary may declare and pay dividends to a Borrower; provided
--------
that, if a Default shall exist and be continuing, no U.S. Dollar Borrower may
- ----
declare or pay any dividends to VWR Canada and (b) VWR may issue common stock or
Subordinated Debt of VWR pursuant to the terms of the instruments evidencing the
Subordinated Debt.
9.7 Transactions with Affiliates. Except as expressly permitted in
----------------------------
this Agreement, directly or indirectly enter into any transaction or arrangement
whatsoever (including without limitations any purchase, sale, lease or exchange
of property or the rendering of any service) or make any payment to or otherwise
deal with any Affiliate, except, (a) as to all of the foregoing in the ordinary
course of and pursuant to the reasonable requirements of such Borrower's and its
Subsidiaries' business and upon fair and reasonable terms no less favorable to
such Borrower or such Subsidiary, as the case may be, than would be obtained in
a comparable arm's length transaction with a Person not an Affiliate and (b) VWR
may transfer assets to E. Merck, Darmstadt, Germany or one of its Affiliates to
the extent permitted by subsection 9.5(f). Notwithstanding anything to the
contrary contained herein or otherwise limiting the provisions
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hereof, it is understood and agreed that so long as a Default shall exist and be
continuing, no U.S. Dollar Borrower may transfer any inventory or other assets
to VWR Canada except in the ordinary course of business and for cash
consideration.
9.8 Sale and Leaseback. Enter into any arrangement with any Person
------------------
providing for the leasing by such Borrower or any Subsidiary thereof of real or
personal property which has been or is to be sold or transferred by such
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations thereof.
9.9 Landlord Waivers. Permit more than 10% in U.S. Dollar Equivalent
----------------
amount of all of Borrowers' Eligible Inventory to be maintained at locations
which (a) are not owned free and clear of any mortgage or other Lien, except any
Lien in favor of the Administrative Agent for the benefit of the Banks; or (b)
are leased by a Borrower from the owner of such facility unless such owner has
executed a landlord waiver and consent in form and substance satisfactory to the
Administrative Agent.
9.10 Limitation on Contingent Obligations. Create, incur, assume or
------------------------------------
suffer to exist any Contingent Obligation except:
(a) guarantees made in the ordinary course of its business by any
of the Borrowers or its Subsidiaries of obligations of any of their
Subsidiaries, provided those obligations are otherwise permitted under this
--------
Agreement;
(b) Contingent Obligations described on Schedule VII, including
those letters of credit in an aggregate drawable amount not in excess of
$2,000,000 assumed by one or more of the Borrowers pursuant to the Baxter
Acquisition;
(c) Contingent Obligations incurred after the date hereof in an
aggregate amount not to exceed $3,000,000 at any one time outstanding;
(d) the Letters of Credit; and
(e) the U.S. Dollar Borrowers Guarantee.
9.11 Limitation on Investments, Loans and Advances. Purchase, hold
---------------------------------------------
or acquire beneficially any stock, other securities or evidences of indebtedness
of, make or permit to exist any loans or advances to, or make or permit to exist
any investment or acquire any interest whatsoever in, any other Person, except:
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(a) extensions of trade credit to customers in the ordinary
course of business;
(b) Permitted Investments;
(c) loans to officers of the Borrowers in an aggregate principal
amount outstanding at any time not to exceed $500,000;
(d) loans and advances to employees of the Borrowers or their
Subsidiaries for travel, entertainment and relocation expenses in the ordinary
course of business in an aggregate amount for the Borrowers and their
Subsidiaries not to exceed $5,000,000 at any one time outstanding;
(e) Capital Stock of any Subsidiary; provided that such Capital
-------- ----
Stock is pledged to the Administrative Agent for the benefit of the Banks
pursuant to a Pledge Agreement (other than Capital Stock of a foreign
Subsidiary, in respect of which only 65% of such Stock need be pledged to the
Administrative Agent); and
(f) loans and advances by a Borrower to another Borrower;
provided that, if a Default shall exist and be continuing, no U.S. Dollar
- -------- ----
Borrower may make any loan or advance to VWR Canada.
9.12 Limitation on Optional Payments and Modifications of Debt
---------------------------------------------------------
Instruments. Make any optional payment or prepayment on or redemption,
- -----------
defeasance or purchase of any Indebtedness (other than Indebtedness under this
Agreement), including, without limitation, the Subordinated Debt, or amend,
modify or change, or consent or agree to any amendment, modification or change
to any of the terms (a) of the Subordinated Debt or (b) relating to the payment
or prepayment of principal of or interest on, any Indebtedness (other than
Indebtedness under this Agreement), other than any amendment, modification or
change which would extend the maturity or reduce the amount of any payment of
principal thereof or which would reduce the rate or extend the date for payment
of interest thereon.
9.13 Limitation on Negative Pledge Clauses. Enter into any agreement
-------------------------------------
with any Person other than the Banks which prohibits or limits the ability of
any Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its properties, assets or revenues, whether now owned
or hereafter acquired; provided that a Borrower may enter into such an agreement
--------
in connection with any Lien permitted by subsection 9.2(h) of this Agreement,
when such prohibition or limitation is by its terms effective only against the
assets subject to such Lien.
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9.14 Fiscal Year. Permit the fiscal year of a Borrower to end on a
-----------
day other than December 31.
9.15 Limitation on Conduct of Business. Enter into any business
---------------------------------
either directly or through any Subsidiary except for businesses in which the
Borrowers and their Subsidiaries are engaged on the date of this Agreement and
any business directly related to such existing businesses.
SECTION 10. EVENTS OF DEFAULT
10.1 Events of Default. If any of the following events shall occur
-----------------
and be continuing:
(a) A Borrower shall fail to pay any principal of any Note or any
Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or a Borrower shall fail to pay any interest on any Note, or any other
amount payable hereunder or thereunder (including without limitation any fees),
within three days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by a
Borrower herein or in any other Loan Document or which is contained in any
certificate or financial statement furnished at any time under or in connection
with this Agreement shall prove to have been incorrect or misleading in any
material respect on or as of the date made or deemed made; or
(c) A Borrower shall default in the observance or performance of
any agreement contained in Section 9 of this Agreement; or
(d) A Borrower shall default in the observance or performance of
any other agreement contained in this Agreement (other than as provided in
subsection (a) through (c) above) or any other Loan Documents, and such default
shall continue unremedied for a period of 30 days; or
(e) A Borrower or any Subsidiary thereof shall (i) default in the
payment of any principal of or interest on or any other amount payable on any
Indebtedness (other than the Notes) or in the payment of any Contingent
Obligation, beyond the period of grace (not to exceed 30 days), if any, provided
in the instrument or agreement under which such Indebtedness or Contingent
Obligation was created and the aggregate amount of such Indebtedness and/or
Contingent Obligations in respect of which such default or defaults shall have
occurred is at least $3,000,000; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
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Indebtedness or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Contingent Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become due
and payable prior to its stated maturity or such Contingent Obligation to become
payable; or
(f) (i) A Borrower or any Subsidiary thereof shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or a Borrower or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against a Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against a
Borrower or any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged,
satisfied, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) a Borrower or any of its Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) a Borrower
or any of its Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they generally become due;
or
(g) One or more judgments or decrees shall be entered against a
Borrower or any of its Subsidiaries involving in the aggregate a liability
(excluding any such judgments or orders which are fully covered by insurance,
subject to any customary deductible, and under which the applicable insurance
carrier has acknowledged such full coverage in writing) of $1,000,000 or more
and all such judgments or decrees shall not have been vacated, discharged,
settled, satisfied or paid, or
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<PAGE>
stayed or bonded pending appeal, within 60 days from the entry thereof; or
(h) Any Change in Control shall occur, or
(i) Either (i) in the first twelve month period after the
Closing Date, there shall not be a period of at least 30 consecutive days in
which the Available Commitments of the Banks is at least $20,000,000 or (ii) in
each twelve-month period thereafter, there shall not be a period of at least 30
consecutive days in which the Available Commitments of the Banks is at least
$30,000,000; or
(j) A Borrower or any Subsidiary thereof shall fail to (i) comply
with or require compliance by all tenants and, to the extent possible, all
subtenants, if any, with all Environmental Laws or obtain and comply with and
maintain, or require that all tenants and, to the extent possible, all
subtenants, obtain and comply with and maintain, any and all licenses,
approvals, registrations or permits required by Environmental Laws except to the
extent that failure to so comply or obtain or maintain such documents could not
reasonably be expected to have a Material Adverse Effect; or (ii) comply with
all lawful and binding orders and directives of all Governmental Authorities
respecting Environmental Laws except to the extent that failure to so comply
could not reasonably be expected to have a Material Adverse Effect; or
(k) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of VWR or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or institution of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Banks, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) VWR or any
Commonly Controlled Entity shall, or in the reasonable opinion of the Required
Banks is likely to, incur any liability in connection with a withdrawal from, or
the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other
event or condition shall occur or exist in regard to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other
such events or conditions, if
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any, could reasonably be expected to have a Material Adverse Effect; or
(l) VWR shall cease to own, directly or indirectly, one-hundred
percent (100%) of the legal and beneficial ownership of VWR Canada, Scientific
Holdings or VWR International; or
(m) Any Security Document shall, at any time, cease to be in full
force and effect (unless released by the Administrative Agent) or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by any Borrower or the Administrative Agent shall not have or shall
cease to have valid, perfected security interests in the collateral subject
thereto, subject to no other liens whatsoever, except as provided in Schedule IV
attached hereto or as permitted by subsection 9.2; or
(n) Any other event shall have occurred which could reasonably be
expected to have a Material Adverse Effect;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to a Borrower
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and the Notes shall automatically and immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Banks, the Administrative Agent may, or upon the written request of
the Required Banks, the Administrative Agent shall, by notice to VWR declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Banks, the
Administrative Agent may, or upon the written request of the Required Banks, the
Administrative Agent shall, by notice of default to VWR, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) and the Notes to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
subsection 10.1, the Borrowers shall at such time deposit in a cash collateral
account opened by the Administrative Agent an amount equal to the L/C
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Coverage Requirement for each such Letter of Credit. The Borrowers hereby grant
to the Administrative Agent, for the benefit of the Issuing Bank and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of the Borrowers under this Agreement and the other Loan Documents.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrowers hereunder and under the Notes. After all such
Letters of Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrowers
hereunder and under the Notes shall have been paid in full, the balance, if any,
in such cash collateral account shall be returned to VWR or as otherwise
directed by a court of competent jurisdiction. The Borrowers shall execute and
deliver to the Administrative Agent, for the account of the Issuing Bank and the
L/C Participants, such further documents and instruments as the Administrative
Agent may request to evidence the creation and perfection of the within security
interest in such cash collateral account. Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
10.2 Priority of Application of Proceeds.
-----------------------------------
(a) All Collateral shall be held or administered by the
Administrative Agent for the ratable benefit of the Banks; provided that, any
-------- ----
Collateral under the Canadian Security Documents shall be held or administered
for the sole benefit of the Canadian Funding Banks.
(b) Notwithstanding any provision herein to the contrary or in
the other Loan Documents, any proceeds received by the Administrative Agent from
any payment made by VWR Canada under this Agreement or the other Loan Documents
after an Event of Default has occurred and during the continuance thereof or
received by the Administrative Agent from the foreclosure, sale, lease,
collection upon, realization of or other disposition of any Collateral under the
Canadian Security Documents after an Event of Default has occurred and during
the continuance thereof (including without limitation insurance proceeds) shall
be applied by the Administrative Agent as follows, unless otherwise agreed by
all the Banks:
(i) FIRST, to the payment of all costs and expenses of the
Administrative Agent incurred in connection with the collection of such proceeds
or the protection or
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administration of the rights and interests of the Canadian Funding Banks
therein, until such amounts are paid in full;
(ii) SECOND, to accrued and unpaid interest on the Canadian
Dollar Loans (ratably according to the respective amounts outstanding);
(iii) THIRD, to fees payable under this Agreement and the
other Loan Documents with respect to the Canadian Dollar Loans (ratably
according to the respective amounts then outstanding);
(iv) FOURTH, to the principal amount of the Canadian Dollar
Loans then outstanding (ratably according to the respective amounts then
outstanding);
(v) FIFTH, to the ratable payment of any other obligations
owed by VWR Canada to the Agents or the Banks until such amounts are paid in
full (ratably according to the respective amounts then outstanding); and
(vi) SIXTH, the balance, if any, shall be paid to VWR Canada
or as a court of competent jurisdiction may direct.
(c) Notwithstanding any provision herein to the contrary (other
than paragraphs (b) and (d) of this subsection 10.2) or in the other Loan
Documents, any proceeds received by the Administrative Agent from any payment
made by the U.S. Dollar Borrowers or any of them under this Agreement or the
other Loan Documents after an Event of Default has occurred and during the
continuance thereof or received by the Administrative Agent from the
foreclosure, sale, lease, collection upon, realization of or other disposition
of any Collateral after an Event of Default has occurred and during the
continuance thereof (including without limitation insurance proceeds), except in
each case to the extent such amounts are to be applied pursuant to the
provisions of clause (b) above, shall be applied by the Administrative Agent as
follows, unless otherwise agreed by all the Banks:
(i) FIRST, to the payment of all costs and expenses of the
Administrative Agent incurred in connection with the collection of such proceeds
or the protection or administration of the rights and interests of the Banks
therein, until such amounts are paid in full;
(ii) SECOND, to accrued and unpaid interest on the Loans, the
Reimbursement Obligations and the obligations of the Borrower(s) under the
Interest Rate Protection Agreements (ratably according to the respective amounts
then outstanding);
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(iii) THIRD, to fees payable under this Agreement, the other
Loan Documents and the Interest Rate Protection Agreements (ratably according to
the respective amounts then outstanding);
(iv) FOURTH, (i) to the principal amount of the Loans then
outstanding, (ii) to the Reimbursement Obligations then outstanding, (iii) to
the principal or similar amount then due under the Interest Rate Protection
Agreements and (iv) by deposit in a cash collateral account maintained by the
Issuing Bank, to satisfy the L/C Coverage Requirement with respect to all
outstanding Letters of Credit (ratably according to the respective amounts then
outstanding);
(v) FIFTH, to the ratable payment of any other obligations
owed to the Agents and the Banks until such amounts are paid in full (ratably
according to the respective amounts then outstanding); and
(vi) SIXTH, the balance, if any, shall be paid to VWR or as a
court of competent jurisdiction may direct.
(d) Notwithstanding anything to the contrary contained in this
subsection 10.2 (i) if any payments are to be made under paragraphs (b) and (c)
at the same time, the payments under clause (b) shall be made first and (ii) any
payments that are to be made to the Canadian Funding Banks pursuant to
subsection 10.2(c) shall be held in escrow by the Administrative Agent in an
interest bearing account for a period of one year from the date of receipt and
shall not be credited against the Canadian Dollar Loans until actually
distributed to the Canadian Funding Banks pursuant to the next sentence hereof,
and then only to the extent so distributed to the Canadian Funding Banks. Any
amounts held in escrow by the Administrative Agent pursuant to the preceding
sentence shall, at the end of such one year period, be distributed among the
Canadian Funding Banks and the U.S. Dollar Banks in such amounts so that from
and after the occurrence of the Event of Default that triggered the application
of this subsection 10.2 through the date of and after giving effect to such
distribution and all other distributions theretofore made to the Banks pursuant
to subsections 10.2(b) and (c), each Bank shall have received the same
percentage payment on the principal of and accrued and unpaid interest on its
Loans outstanding on the date of such Event of Default. Any amounts that (i) are
distributed to the Canadian Funding Banks pursuant to this clause (d) shall be
applied by the Canadian Funding Banks in the order set forth in clauses (ii)
through (v) of subsection 10.2(b) and (ii) are distributed to the U.S. Dollar
Banks pursuant to this clause (d) shall be applied by the U.S. Dollar Banks in
the order set forth in clauses (ii) through (v) of subsection 10.2(c).
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(e) If the Banks shall be exercising their remedies under the
Security Documents, the Canadian Funding Banks shall use diligent efforts to
exercise their remedies under the Canadian Security Documents, unless the
Required Banks otherwise consent.
10.3 Turnover of Proceeds. Each Bank agrees that (a) if at any time
--------------------
it shall receive the proceeds of any collateral or any proceeds thereof pursuant
to the terms of the Security Documents or (b) if after an Event of Default shall
have occurred and be continuing it shall receive any payment on account of the
Loans, the L/C Obligations or any other amounts owing hereunder, under the other
Loan Documents or the Interest Rate Protection Agreements (other than through
application by the Administrative Agent in accordance with subsection 10.2), it
shall promptly turn the same over to the Administrative Agent for application in
accordance with the terms of subsection 10.2.
SECTION 11. THE AGENTS
11.1 Appointment. Each Bank hereby irrevocably designates and
-----------
appoints CoreStates as the Administrative Agent of such Bank under this
Agreement and the other Loan Documents, and each such Bank irrevocably
authorizes CoreStates, as the Administrative Agent for such Bank, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement and the other Loan Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
therein, or any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement and the other Loan Documents or otherwise exist against the
Administrative Agent. CoreStates agrees to act as the Administrative Agent on
behalf of the Banks to the extent provided in this Agreement and the other Loan
Documents.
11.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to engage and pay for the
advice and services of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible to the Banks for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
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11.3 Exculpatory Provisions. Neither any of the Agents nor any of
----------------------
their officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (a) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or the other Loan
Documents (except for its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by a Borrower or any
officer thereof contained in this Agreement, the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by such Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the Notes or the other Loan Documents or for any failure of the
Borrowers (or any of them) to perform their obligations hereunder or thereunder.
The Agents shall not be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or the other Loan Documents, or to inspect
the properties, books or records of the Borrowers (or any of them).
11.4 Reliance by Agents. Each of the Agents shall be entitled to
------------------
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to one or
more of the Borrowers), independent accountants and other experts selected by
such Agent. The Administrative Agent may deem and treat the payee of any Note
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or the other Loan Documents unless it
shall first receive such advice or concurrence of the Required Banks as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement, the Notes or the other Loan Documents in accordance with a
request of the Required Banks, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks and all future
holders of the Notes.
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11.5 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Bank or a Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give notice thereof
to the Banks. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Banks; provided that unless and until the Administrative Agent shall have
--------
received such directions, it may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the Banks.
11.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
-------------------------------------
acknowledges that neither any Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by any Agent hereinafter
taken, including any review of the affairs of the Borrowers, shall be deemed to
constitute any representation or warranty by any Agent to any Bank. Each Bank
represents to the Agents that it has, independently and without reliance upon
the Agents or any other Bank, and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers and made its own decision to make its Loans
hereunder and enter into this Agreement and each other Loan Document to which it
is a party. Each Bank also represents that it will, independently and without
reliance upon any Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrowers. Except for
notices, reports and other documents expressly required to be furnished to the
Banks by an Agent hereunder, the Agents shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrowers which may come into
the possession of such Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
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11.7 Indemnification. The Banks agree to indemnify each of the
---------------
Agents in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation, if any, of the Borrowers to do so) in U.S.
Dollars, ratably according to their respective Total Commitment Percentages,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes) be imposed on, incurred by or asserted
against such Agent in any way relating to or arising out of this Agreement, the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Bank shall be liable for the payment of any portion of such
- --------
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from such Agent's gross
negligence or willful misconduct. The agreements in this Section 11.7 shall
survive the payment of the Notes and all other amounts payable hereunder.
11.8 Agents in Their Individual Capacities. Each Agent and its
-------------------------------------
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrowers (or any of them) as though such Agent were
not an Agent hereunder. With respect to its Loans made or renewed by it and any
Note issued to it and with respect to any Letter of Credit issued or
participated in by it, such Agent shall have the same rights and powers under
this Agreement and the other Loan Documents as any Bank and may exercise the
same as though it were not an Agent, and the terms "Bank" and "Banks" shall
include the Agent in its individual capacity.
11.9 Successor Administrative Agent. The Administrative Agent (a)
------------------------------
may resign as Administrative Agent hereunder and under the other Loan Documents
upon 30 days' notice to the Banks and VWR and (b) shall promptly resign upon the
written request of the Required Banks. If the Administrative Agent shall
resign, then the Required Banks shall appoint from among the Banks a successor
Administrative Agent for the Banks, which appointment shall be subject to the
approval of VWR (which approval shall not be unreasonably withheld), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent and the term "Administrative Agent" shall mean such
successor agent effective upon its appointment and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or the other Loan
Documents or any holders of the Notes. After any retiring
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Administrative Agent's resignation, the provisions of this Subsection 11.9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement.
11.10 Beneficiaries. Except as expressly provided herein, the
-------------
provisions of this Section 11 are solely for the benefit of the Agents and the
Banks, and the Borrowers shall not have any rights to rely on or enforce any of
the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, the Administrative Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for the
Borrowers.
11.11 Co-Agents, Arranger and Lead Manager. The Co-Agents, the
------------------------------------
Arranger and the Lead Manager, in such respective capacities, shall have no
duties or responsibilities under this Agreement or the other Loan Documents, but
shall nevertheless be entitled to all of the indemnities and other protections
afforded to the Administrative Agent under this Section 11.
SECTION 12. MISCELLANEOUS
12.1 Amendments and Waivers. Neither this Agreement, any Note any
----------------------
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. With the written consent of the Required Banks, the Administrative
Agent and the Borrowers may, from time to time, enter into written amendments
(including letter amendments), supplements or modifications hereto and to the
Notes and the other Loan Documents for the purpose of adding any provisions to
this Agreement, the Notes or any other Loan Document or changing in any manner
the rights of the Banks or of the Borrowers hereunder or thereunder or waiving,
on such terms and conditions as the Administrative Agent may specify in such
instrument, any of the requirements of this Agreement, the Notes or any other
Loan Document or any Default or Event of Default and its consequences; provided,
--------
however, that no such waiver and no such amendment, supplement or modification
- -------
shall directly or indirectly (a) reduce the amount or extend the maturity of any
Note or any installment thereof, or reduce the rate of interest or extend the
time of payment of interest thereon, or reduce any fee payable to any Bank
hereunder or extend the period for payment thereof, or change the duration or
the amount of any Bank's Commitment, or amend, modify or waive any provision of
this subsection or reduce the percentage specified in the definition of Required
Banks, or consent to the assignment or transfer by the Borrowers of any of their
rights and obligations under this Agreement, the Notes and the other Loan
Documents, or
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release all or substantially all of the collateral subject to any Security
Documents in each case without the written consent of all the Banks, or (b)
amend, modify or waive any provision of Section 11 without the written consent
of the then Agents. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Banks and shall be binding upon
the Borrowers, the Banks, the Agents and all future holders of the Notes. In the
case of any waiver, the Borrowers, the Banks and the Agents shall be restored to
their former position and rights hereunder and under the outstanding Notes, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
12.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex confirmed in writing), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or three days after being deposited in the mail, postage
prepaid, or the next Business Day if sent by reputable overnight courier,
postage prepaid, for delivery on the next Business Day, or, in the case of
telecopy notice, when received during normal business hours, or, in the case of
telegraphic notice, when delivered to the telegraph company, or, in the case of
telex notice, when sent, answerback received, addressed as follows in the case
of the Borrowers, the Administrative Agent or BOA Canada, and as set forth in
Schedule I in the case of the other parties hereto, or to such other address as
may be hereafter notified by the respective parties hereto and any future
holders of the Notes:
The Borrowers c/o VWR Corporation
or any of them: 1310 Goshen Parkway
West Chester, PA 19380
Attention: Walter S. Sobon,
Vice President of Finance
and Chief Financial Officer
Telecopy: (610) 436-1760
with a copy to: Drinker Biddle & Reath
1000 Westlakes Drive
Suite 300
Berwyn, PA 19312
Attention: Thomas E. Wood, Esquire
Telecopy: 610-993-8585
(provided that failure to send a copy of any notice to
said counsel shall in no way affect, limit or
invalidate any notice sent to the Borrowers or the
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exercise of any of the Administrative Agent's or the
Banks' rights or remedies pursuant to a notice sent to
the Borrowers.)
The Administrative CoreStates Bank, N.A.
Agent: 1345 Chestnut Street
Philadelphia, Pennsylvania 19101-7618
FC 1-8-3-10
Attention: Carol Williams
Senior Vice President
Telecopy: (215) 973-6745
with a copy to:
CoreStates Bank, N.A.
1345 Chestnut Street
Philadelphia, Pennsylvania 19101-7618
FC 1-8-12-1
Attention: Stacy Shegda
Administrative Officer
Telecopy: (215) 973-1887
BOA Canada: Bank of America Canada
1055 Dunsmuir Street
Suite 574, Four Bentall Centre
P.O. Box 49295
Vancouver, British Columbia V7X 1L3
Canada
Attention: Mark D. Ehlinger
Vice President
Telecopier: (604) 683-1940;
provided that (a) any notice, request or demand to or upon the Administrative
- --------
Agent or the Banks pursuant to subsections 2.3, 2.5, 2.15, 2.19, 3.3, 4.3, 5.6,
5.7 and 5.14 shall not be effective until received and (b) any notice of a
Default or Event of Default hereunder shall be sent by telecopy or reputable
overnight courier.
12.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or any Bank, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
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12.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Notes and the other Loan Documents.
12.5 Payment of Expenses and Taxes. Each of the Borrowers jointly
-----------------------------
and severally agrees (a) to pay or reimburse each of the Agents for all its out-
of-pocket costs and expenses incurred in connection with the Baxter Acquisition
(including negotiations of the terms of the Subordinated Debt issued in
connection therewith) or in developing, preparing, negotiating and executing the
Term Sheet agreed to by the Agents and VWR on or about May 23, 1995 (the "Term
----
Sheet"), including without limitation the reasonable fees and disbursements of
- -----
counsel, (b) to pay or reimburse each of the Agents for all its out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and the syndication of, this Agreement, the Notes, the other Loan
Documents and any other documents executed and delivered in connection herewith,
and the consummation of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of counsel
to any Agent or any consultant retained by any Agent; provided that, the maximum
-------- ----
amount that the Borrowers shall be responsible for under clauses (a) and (b)
shall be $300,000 in the aggregate, (c) to pay or reimburse the Agents for all
their out-of-pocket costs and expenses incurred in connection with any
amendment, supplement or modification to this Agreement, the Notes and the other
Loan Documents and any other documents executed and delivered in connection
therewith, including without limitation, the reasonable fees and disbursements
of counsel, (d) pay or reimburse each Bank and each Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes, the other Loan Documents and any such
other documents, including, without limitation, reasonable fees and
disbursements of counsel to an Agent and to the several Banks, (e) to pay,
indemnify, and hold each Bank and the Agents harmless from, any and all
recording and filing fees (except those recording and filings specifically
referred to in subsection 7.1, which are included in clauses (a) and (b) above
for purposes of the $300,000 cap referred to above) and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any (other than Taxes expressly excluded from the definition of Taxes
in subsection 5.10) which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes, the
other Loan Documents and any such other documents, and (f) to pay, indemnify,
and hold each Bank
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and each Agent harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the Notes, the other Loan Documents and any such other documents (all
the foregoing, collectively, the "indemnified liabilities"), provided, that the
----------------------- --------
Borrowers shall have no obligation hereunder to any Agent or any Bank with
respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of such person or (ii) legal proceedings commenced against
such person by any other Bank; provided that, it is understood and agreed that
-------- ----
the term "indemnified liabilities" shall not include the out-of-pocket costs and
expenses incurred by the Agents in developing, preparing, negotiating and
executing the Term Sheet or this Agreement and the other Loan Documents. The
agreements in this subsection shall survive repayment of the Notes and all other
amounts payable hereunder. All references in this subsection to attorneys fees
shall include the allocable costs of in-house legal services of any Agent.
12.6 Successors and Assigns. (a) Whenever in this Agreement any of
----------------------
the parties hereto is referred to, such reference shall be deemed to include the
successors and permitted assigns of such party; and all covenants, promises and
agreements by or on behalf of a Borrower, the Administrative Agent, the Co-
Agents or the Banks that are contained in this Agreement shall bind and inure to
the benefit of their respective successors and assigns. The Borrowers may not
assign or transfer any of their rights or obligations under this Agreement or
the other Loan Documents without the prior written consent of each Bank.
(b) Each Bank may, in accordance with applicable law, sell to any
Bank or Affiliate thereof and, with the consent of VWR (which consent shall not
be unreasonably withheld) and the Administrative Agent, to one or more banks or
other financial institutions (each, a "Purchasing Bank") all or any part of its
---------------
interests, rights and obligations under this Agreement, the Notes and the other
Loan Documents (including all or a portion of its Commitment and the Loans at
the time owing to it and the Notes held by it); provided, however, that (i) so
-------- -------
long as the Commitments are then in effect, such assignment shall be in an
amount not less than $10,000,000 (or such lesser amount as VWR and the
Administrative Agent shall agree in their sole discretion), (ii) the parties to
each such assignment shall execute and deliver to the Administrative Agent and
VWR for its acceptance and recording in the Register an Assignment and
Acceptance, together with the Note or Notes subject to such assignment and a
processing and recordation fee of $3,000 and (iii) CoreStates may not assign in
whole or in part its Swing Line Commitment without the prior written consent of
VWR. Upon
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acceptance and recording pursuant to paragraph (e) of this subsection 12.6, from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution thereof,
(A) such Purchasing Bank shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Bank under this Agreement and (B) the assigning Bank thereunder
shall, to the extent of the interest assigned by such Assignment and Acceptance,
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Bank's rights and obligations under this Agreement and the other Loan Documents,
such Bank shall cease to be a party hereto but shall continue to be entitled to
the benefits of subsections 5.9, 5.10 and 5.11 (to the extent that such Bank's
entitlement to such benefits arose out of such Bank's position as a Bank prior
to the applicable assignment), as well as to any Commitment Fees accrued for its
account and not yet paid). Such Assignment and Acceptance shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect
the addition of such Purchasing Bank and the resulting amounts and percentages
held by the Banks arising from the purchase by such Purchasing Bank of all or a
portion of the rights and obligations of such assigning Bank under this
Agreement, the Notes and the other Loan Documents. Notwithstanding any provision
of this subsection 12.6, the consent of VWR shall not be required for any
assignment which occurs at any time when any of the events described in
subsection 10(f) shall have occurred and be continuing.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the Purchasing Bank thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby, free and clear of any adverse claim and
that its Commitment, and the outstanding balances of its Loans and L/C
Obligations, in each case without giving effect to assignments thereof which
have not become effective, are as set forth in such Assignment and Acceptance,
(ii) except as set forth in (i) above, such assigning Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, the other
Loan Documents or any other
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instrument or document furnished pursuant hereto or thereto, or the financial
condition of the Borrowers or any Subsidiary thereof or the performance or
observance by the Borrowers or any Subsidiary thereof of any of its obligations
under this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such Purchasing Bank confirms that it has received a copy of
this Agreement, together with copies of the most recent financial statements
delivered pursuant to subsection 8.1 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such Purchasing Bank will independently
and without reliance upon the Administrative Agent, such assigning Bank or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (vi) such
Purchasing Bank appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Administrative Agent by the
terms hereof or thereof, together with such powers as are reasonably incidental
thereto; and (vii) such Purchasing Bank agrees that it will perform in
accordance with their terms all the obligations which by the terms of this
Agreement and the other Loan Documents are required to be performed by it as a
Bank including, (A) if it is becoming a U.S. Dollar Bank and is organized under
the laws of a jurisdiction outside the United States, its obligation pursuant to
subsection 5.10 to deliver the forms prescribed by the Internal Revenue Service
of the United States certifying as to the Purchasing Bank's exemption from
United States withholding taxes with respect to all payments to be made to the
Purchasing Bank under this Agreement, and (B) if it is becoming a Canadian
Funding Bank, its obligations under subsection 5.10(c) to provide information
regarding its status for Canadian withholding tax purposes.
(d) The Administrative Agent shall maintain at its offices in
Philadelphia, Pennsylvania a copy of each Assignment and Acceptance and the
names and addresses of the Banks, and the Commitment of, and principal amount of
the Loans and L/C Obligations owing to, each Bank pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
--------
conclusive in the absence of manifest error and the Borrowers, the
Administrative Agent and the Banks may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers and any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Bank and a Purchasing Bank (and in the case
of a Purchasing Bank that is not
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then a Bank or an Affiliate thereof, by VWR and the Administrative Agent)
together with the Note or Notes subject to such assignment and the processing
and recordation fee referred to in paragraph (b) above, the Administrative Agent
shall promptly (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give notice thereof to
the Banks. Within five Business Days after receipt of notice, the Borrowers, at
their own expense, shall execute and deliver to the Administrative Agent, in
exchange for the surrender of the original Note(s) (A) (x) with respect to an
assignment of the Term Loan of any U.S. Dollar Bank, a new Term Note to the
order of the Purchasing Bank in an amount equal to the Term Loan purchased, (y)
with respect to an assignee of Revolving Credit Loans, a new Revolving Credit
Note to the order of such Purchasing Bank in an amount equal to the Revolving
Credit Commitment assumed and (z) with respect to the assignee of Canadian
Dollar Loans, a new Canadian Dollar Note to the order of such Purchasing Bank in
an amount equal to the Canadian Dollar Commitment assumed by such Purchasing
Bank and (B) if the assigning Bank has retained a Commitment or a portion of the
Term Loans, a new Term Note, Revolving Credit Note and/or Canadian Dollar Note
to the order of such assignor in the respective amount equal to the Term Loan
retained by it, the Revolving Credit Commitment retained by it and/or the
Canadian Dollar Commitment retained by it, as the case may be. Such new Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note(s); such new Notes shall be dated the date of
the surrendered Notes which they replace and shall otherwise be in substantially
the form of Exhibit A-1, A-2 or A-3 hereto, as appropriate. Canceled Notes shall
be returned to VWR.
(f) Each Bank may without the consent of VWR or the
Administrative Agent (except to the extent provided below) sell participations
to one or more banks or other entities (each a "Participant") in any Loan owing
to such Bank, any Note held by such Bank, any Commitment of such Bank or any
other interest of such Bank hereunder and under the other Loan Documents,
provided, however, that (i) such Bank's obligations under this Agreement to the
- -------- -------
other parties to this Agreement shall remain unchanged, (ii) such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Bank shall remain the holder of any such Note for
all purposes under this Agreement and the other Loan Documents, (iv) the
Borrowers, the Banks and the Administrative Agent shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement and the other Loan Documents, (v) in any
proceeding under the Bankruptcy Code the Bank shall be, to the extent permitted
by law, the sole representative with respect to the obligations held in the name
of such Bank, whether for its own account or for the account of
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any Participant, (vi) such Bank shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any
provision of this Agreement or the Note or Notes held by such Bank or any other
Loan Document, other than any such amendment, modification or waiver with
respect to any Loan or Commitment in which such Participant has an interest that
forgives principal, interest or fees or reduces the interest rate or fees
payable with respect to any such Loan or Commitment, postpones any date fixed
for any regularly scheduled payment of principal of, or interest or fees on, any
such Loan, releases any guarantor of such Loan or releases all or substantially
all of collateral, if any, securing any such Loan.
(g) If amounts outstanding under this Agreement and the Notes
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of set-off in respect of its participating interest in
amounts owing under this Agreement and any Note to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement or any Note, provided that in purchasing such participation such
--------
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in subsection 12.8. The Borrowers also agree that
each Participant shall be entitled to the benefits of subsections 5,9, 5.10,
5.11 and 12.5 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided, that no Participant shall be entitled
--------
to receive any greater amount pursuant to such subsections than the assigning
Bank would have been entitled to receive in respect of the amount of the
participation transferred by such assigning Bank to such Participant had no such
transfer occurred.
(h) If any Participant of a U.S. Dollar Bank is organized under
the laws of any jurisdiction other than the United States or any state thereof,
the assigning Bank, concurrently with the sale of a participating interest to
such Participant, shall cause such Participant (i) to represent to the assigning
Bank (for the benefit of the assigning Bank, the other Banks, the Administrative
Agent and the Borrowers) that under applicable law and treaties no taxes will be
required to be withheld by the Administrative Agent, the Borrowers or the
assigning Bank with respect to any payments to be made to such Participant in
respect of its participation in the Loans and (ii) to agree (for the benefit of
the assigning Bank, the other Banks, the Administrative Agent and the Borrowers)
that it will deliver the tax forms and other documents required to be delivered
pursuant to paragraph 5.10(b) and comply from time to time with all applicable
U.S. laws and regulations with respect to withholding tax exemptions. In the
case of an assigning Bank which is a Canadian Funding Bank, the assigning Bank,
114
<PAGE>
concurrently with the sale of a participating interest to such Participant,
shall cause such Participant (i) to represent to the assigning Bank (for the
benefit of the assigning Bank, the Administrative Agent and VWR Canada) that it
is not a non-resident of Canada for the purposes of Part XIII of the Income Tax
Act (Canada) and that under applicable law and treaties no taxes will be
required to be withheld by the Administrative Agent, the assigning Bank or VWR
Canada with respect to any payments to be made to such Participant in respect of
its participation in the Loans and (ii) to agree (for the benefit of the
assigning Bank, the Administrative Agent and VWR Canada) that it will comply
with subsection 5.10(c) and comply from time to time with all applicable
Canadian laws and legislation and the administrative practice of Revenue Canada
with respect to Canadian withholding taxes.
(i) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Notes issued to it to a Federal Reserve
Bank; provided that no such assignment shall release a Bank from any of its
--------
obligations hereunder.
12.7 Disclosure of Information. The Borrowers authorize each Bank to
-------------------------
disclose to any Participant or Purchasing Bank and any prospective Participant
or Purchasing Bank any and all information relating to the Borrowers and their
Affiliates which has been furnished to such Bank by or on behalf of the
Borrowers; provided that, each Bank agrees to cause each of its Participants or
-------- ----
potential Participants to agree in favor of VWR and such Bank to take normal and
reasonable precautions and exercise due care to maintain the confidentiality of
all information provided to it by such Bank in connection with this Agreement;
provided however, that any such agreement may allow such Participant or
- -------- -------
potential Participant to disclose such information (a) at the request of any
bank regulatory authority or in connection with an examination of such
Participant or potential Participant by any such bank regulatory authority, (b)
pursuant to subpoena or other court process, (c) when required to do so in
accordance with the provisions of any applicable law, (d) at the direction of
any other agency of any State of the United States or of any other jurisdiction
in which such Bank conducts its business, or (e) to such Participant's or
potential Participant's independent auditors and other professional advisors;
provided, further, that no Bank shall be required to take any actions to enforce
- -------- -------
or monitor any such agreements with its Participants or potential Participants
or be responsible for any breaches thereof.
12.8 Adjustments; Set-off. (a) Subject to subsection 10.2, if any
--------------------
Bank (a "benefitted Bank") shall at any time receive any payment of all or part
---------------
of its Loans or the Reimbursement Obligation owing to it, or interest thereon,
or receive any
115
<PAGE>
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in subsection 10(f),
or otherwise), in a greater proportion than any such payment to or collateral
received by any other Bank, if any, in respect of such other Bank's Loans or the
Reimbursement Obligation owing to it, or interest thereon, such benefitted Bank
shall purchase for cash from the other Banks such portion of each such other
Bank's Loan or the Reimbursement Obligation owing to it, or shall provide such
other Banks with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Bank to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment or benefits
- -------- -------
is thereafter recovered from such benefitted Bank, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. Each of the Borrowers, jointly and severally
agrees that each Bank so purchasing a portion of another Bank's Loan or
Reimbursement Obligation may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Bank were the direct holder of such portion.
(b) Notwithstanding anything to the contrary contained herein, it
is understood and agreed that (i) no U.S. Dollar Bank shall be required to buy
any participation or purchase any interest in any Canadian Dollar Loans and (ii)
no Canadian Dollar Bank shall be required to buy any participation or purchase
any interest in any Revolving Credit Loans, Term Loans or Swing Line Loans or
any Reimbursement Obligation; except to the extent, in each case, that a U.S.
Dollar Bank is also a Canadian Dollar Bank or a Canadian Dollar Bank is also a
U.S. Dollar Bank.
(c) In addition to any rights and remedies of the Banks provided
by law, upon the occurrence and during the continuance of an Event of Default,
each Bank shall have the right, without prior notice to the Borrowers (or any of
them), any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrowers hereunder or under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Bank to or for the
credit or the account of one or more Borrowers. Each Bank agrees promptly to
notify VWR and the Administrative Agent after any such set-off and application
made
116
<PAGE>
by such Bank, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
12.9 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with VWR, on behalf of the Borrowers, and each of the Banks.
12.10 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12.11 Power of Attorney. Each Borrower other than VWR hereby grants
-----------------
to VWR an irrevocable power of attorney to act as its attorney-in-fact with
regard to all matters relating to this Agreement, the Applications and each
other Loan Document, including, without limitation, execution and delivery of
any Notice of Borrowing, and amendments, supplements, waivers or other
modifications hereto or thereto, receipt of any notices hereunder or thereunder
and receipt of service of process in connection herewith or therewith and making
all elections as to interest rates and interest payment dates. Each such
Borrower hereby explicitly acknowledges that the Administrative Agent and each
Bank has executed and delivered this Agreement and each other Loan document to
which it is a party, and has performed its obligations under this Agreement and
each other Loan Document to which it is a party, in reliance upon the
irrevocable grant of such power of attorney pursuant to this subsection 12.11.
12.12 Judgment. (a) If for the purpose of obtaining judgment in any
--------
court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the first currency with such other currency on the Business Day
preceding the day on which final judgment is given.
(b) The obligation of the Borrowers in respect of any sum due to
any Bank or the Administrative Agent hereunder shall, notwithstanding any
judgment in a currency (the "Judgment Currency") other than that in which such
-----------------
sum is denominated in accordance with the applicable provisions of this
Agreement (the
117
<PAGE>
"Agreement Currency"), be discharged only to the extent that on the Business
------------------
Day following receipt by such Bank or the Administrative Agent (as the case may
be) of any sum adjudged to be so due in the Judgment Currency such Bank or the
Administrative Agent (as the case may be) may in accordance with normal banking
procedures purchase the Agreement Currency with the Judgment Currency; if the
amount of the Agreement Currency so purchased is less than the sum originally
due to such Bank or the Administrative Agent (as the case may be) in the
Agreement Currency, each Borrower jointly and severally agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Bank or the
Administrative Agent (as the case may be) against such loss, and if the amount
of the Agreement Currency so purchased exceeds the sum originally due to any
Bank or the Administrative Agent (as the case may be), such Bank or the
Administrative Agent (as the case may be) agrees to remit to such Borrower (as
the case may be) such excess.
12.13 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the parties hereto with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent or any other Agent or any Bank relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.
12.14 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
COMMONWEALTH OF PENNSYLVANIA.
12.15 Submission To Jurisdiction; Waivers. Each of the Borrowers
-----------------------------------
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or the Notes, or for recognition and
enforcement of any judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the Commonwealth of Pennsylvania, the courts of
the United States of America for the Eastern District of Pennsylvania, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
118
<PAGE>
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to VWR at its
address set forth in Section 12.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential damages.
12.16 Acknowledgements. Each of Borrowers hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement, the Notes and the other Loan Documents;
(b) neither the Administrative Agent nor any Bank has any
fiduciary relationship to the Borrowers (or any of them) and the relationship
hereunder between the Agents and Banks, on the one hand, and the Borrowers, on
the other hand, is solely that of debtor and creditor; and
(c) no joint venture exists among the Banks or among the
Borrowers (or any of them) and the Banks.
12.17 Name Change. Each of the Banks and the Agents hereby
-----------
acknowledges that VWR has informed it that immediately after the consummation of
the Baxter Acquisition, VWR will change its name to "VWR Scientific Products
Corporation" and each reference hereunder to VWR, after such consummation, will
be deemed to be a reference to VWR Scientific Products Corporation. Each of the
Banks and the Agents hereby consents to such name change.
12.18 No Right of Contribution. On and after the occurrence of an
------------------------
Event of Default hereunder, no U.S. Dollar Borrower shall seek or be entitled to
any reimbursement from any other U.S. Dollar Borrower, or be subrogated to any
rights of the Banks against the U.S. Dollar Borrowers, in respect of any
payments made pursuant to the Loan Documents, until all amounts owing to the
U.S. Dollar Banks hereunder and under the Notes and the Letters of Credit are
paid in full.
119
<PAGE>
12.19 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE
---------------------
ADMINISTRATIVE AGENT, THE CO-AGENTS, THE ARRANGER, THE LEAD MANAGER AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT AND FOR ANY MANDATORY COUNTERCLAIM THEREIN.
120
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
ATTEST: VWR CORPORATION
By: __________________________ By: _________________________
Name: Deborah A. Corr Name: Walter S. Sobon
Title: Assistant Treasurer Title: Vice President-Finance
[CORPORATE SEAL]
ATTEST: VWR SCIENTIFIC OF CANADA LTD.
By: ______________________ By: _________________________
Name: Deborah A. Corr Name: Walter S. Sobon
Title: Assistant Secretary Title: Vice President-Finance
[CORPORATE SEAL]
SCIENTIFIC HOLDINGS CORP.
By: _________________________
Name: Deborah A. Corr
Title: Corporate Secretary
ATTEST: VWR SCIENTIFIC INTERNATIONAL
CORPORATION
By: ________________________ By: _________________________
Name: Deborah A. Corr Name: Walter S. Sobon
Title: Assistant Secretary Title: Vice President
[CORPORATE SEAL]
S-1
<PAGE>
CORESTATES BANK, N.A. as
a Bank and as Administrative
Agent and Collateral Agent
By: _________________________
Name:
Title:
SEATTLE-FIRST NATIONAL BANK
as a Bank and as Lead Manager
By: _________________________
Name:
Title:
BANK OF AMERICA CANADA
By: _________________________
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
as a Bank and as Documentation
Agent
By: _________________________
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION as a
Bank and as Syndication Agent
By: _________________________
Name:
Title:
BA SECURITIES, INC. as Arranger
By: _________________________
Name:
Title:
S-2
<PAGE>
THE FIRST NATIONAL BANK OF BOSTON
By: _________________________
Name:
Title:
BAYERISCHE LANDESBANK GIROZENTRALE, Cayman
Islands Branch
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
COMMERZBANK, A.G.
By: _________________________
Name:
Title:
DEUTSCHE BANK AG, New York Branch and/or
Cayman Islands Branch
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
DG BANK
DEUTSHE GENOSSENSCHAFTSBANK
By: _________________________
Name:
Title:
S-3
<PAGE>
DRESDNER BANK AG, New York Branch and Grand
Cayman Branch
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
THE FUJI BANK, LIMITED
By: _________________________
Name:
Title:
LTCB TRUST COMPANY
By: _________________________
Name:
Title:
THE NIPPON CREDIT BANK, LTD.
By: _________________________
Name:
Title:
THE BANK OF NEW YORK
By: _________________________
Name:
Title:
S-4
<PAGE>
THE BANK OF NOVA SCOTIA
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
BANQUE FRANCAISE DU COMMERCE
EXTERIEUR
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
CREDIT LYONNAIS
CAYMAN ISLAND BRANCH
By: _________________________
Name:
Title:
MELLON BANK, N.A.
By: _________________________
Name:
Title:
NATIONAL BANK OF CANADA
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
S-5
<PAGE>
NATIONAL CITY BANK
By: _________________________
Name:
Title:
THE ROYAL BANK OF SCOTLAND plc
By: __________________________
Name:
Title:
SOCIETE GENERALE
By: __________________________
Name:
Title:
S-6
<PAGE>
Exhibit 4(e)
EXHIBIT A-2
FORM OF TERM NOTE
$__________________ Philadelphia, Pennsylvania
_______________, 1995
FOR VALUE RECEIVED, VWR CORPORATION, a Pennsylvania corporation
("VWR"), SCIENTIFIC HOLDINGS CORP., a Delaware corporation ("Scientific
Holdings"), and VWR SCIENTIFIC INTERNATIONAL CORPORATION, a Barbados corporation
("VWR International") (VWR, Scientific Holdings and VWR International each
individually a "Borrower"; collectively, the "Borrowers") hereby jointly and
severally unconditionally promise to pay to the order of
__________________________________ (the "Bank") at the office of CoreStates
Bank, N.A. (the "Administrative Agent") located at 1345 Chestnut Street,
Philadelphia, Pennsylvania 19101-7618, in lawful money of the United States of
America and in immediately available funds, the principal sum of
_____________________ DOLLARS ($_______________), in such quarterly installments
of principal in such amounts, and payable at such times, as are specified in the
Credit Agreement referred to below. The Borrowers further agree to pay interest
accrued on the unpaid principal amount outstanding hereunder from time to time
from the date hereof in like money at such office at the rates and on the dates
specified in the Credit Agreement.
The holder of this Note is authorized to endorse on Schedule 1 annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the respective date(s), Type and amount
of each Term Loan made by the Bank to the Borrowers, each continuation thereof,
each conversion of all or a portion thereof to another Type, the date and amount
of each payment or prepayment of principal thereof and, in the case of
Eurodollar Loans, the length of each Interest Period with respect thereto, which
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed; provided, however, that the failure to make any such
endorsement (or any error in such recordation) shall not affect the obligations
of the Borrowers to make payments of principal and interest in accordance with
the terms of this Note and the Credit Agreement.
This Note is one of the Term Notes referred to in, evidences
indebtedness incurred under, and is entitled to the benefits of, the Credit
Agreement dated as of September __, 1995 (said Agreement, as it may hereafter be
amended, supplemented or otherwise modified from time to time, being referred to
as the
<PAGE>
"Credit Agreement") among the Borrowers, VWR Scientific of Canada, Ltd., the
other banks and financial institutions parties thereto, CoreStates Bank, N.A.,
as administrative agent and collateral agent, Bank of America National Trust and
Savings Association, as syndication agent, PNC Bank, National Association, as
documentation agent, BA Securities, Inc., as arranger, and Seattle-First
National Bank, as lead manager. The Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof upon the
happening of certain events, for optional prepayment of the principal hereof
prior to the maturity thereof, for a higher rate of interest hereunder upon the
happening of an Event of Default, for the amendment or waiver of certain
provisions of the Credit Agreement and for certain security interests granted by
the Borrowers. Reference is made to the Credit Agreement and the other Loan
Documents for a statement of the terms and conditions under which the Loans
evidenced hereby have been secured.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided therein.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and notice of any kind. No failure to exercise,
and no delay in exercising, any rights hereunder on the part of the holder
hereof shall operate as a waiver of such rights.
Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Credit Agreement. This Note shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Pennsylvania.
[CORPORATE SEAL] VWR CORPORATION
Attest:_______________________ By:___________________________
Title:________________________ Title:________________________
SCIENTIFIC HOLDINGS CORP.
[CORPORATE SEAL]
Attest:_______________________ By:___________________________
Title:________________________ Title:________________________
2
<PAGE>
[Signatures Continued on Next Page]
3
<PAGE>
VWR SCIENTIFIC INTERNATIONAL
CORPORATION
[CORPORATE SEAL]
Attest:_______________________ By:___________________________
Title:________________________ Title:________________________
4
<PAGE>
SCHEDULE 1
LOANS, CONVERSIONS AND PAYMENTS
<TABLE>
<CAPTION>
======================================================================================================
AMOUNT OF AMOUNT OF
BASE RATE EURODOLLAR
LOANS LOANS UNPAID
TYPE OF LOAN AMOUNT OF CONVERTED CONVERTED TO PRINCIPAL
(EURODOLLAR OR AMOUNT OF PRINCIPAL TO EURODOLLAR BASE RATE BALANCE OF NOTATION
DATE BASE RATE) LOANS REPAID LOANS LOANS LOANS MADE BY
<S> <C> <C> <C> <C> <C> <C> <C>
======================================================================================================
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
______________________________________________________________________________________________________
======================================================================================================
</TABLE>
5
<PAGE>
EXHIBIT 4 (f)
EXHIBIT A-1
FORM OF REVOLVING CREDIT NOTE
$__________________ Philadelphia, Pennsylvania
_______________, 1995
FOR VALUE RECEIVED, VWR CORPORATION, a Pennsylvania corporation
("VWR"), SCIENTIFIC HOLDINGS CORP., a Delaware corporation ("Scientific
Holdings"), and VWR SCIENTIFIC INTERNATIONAL CORPORATION, a Barbados corporation
("VWR International") (VWR, Scientific Holdings and VWR International each
individually a "Borrower"; collectively, the "Borrowers") hereby jointly and
severally unconditionally promise to pay to the order of
__________________________________ (the "Bank") at the office of CoreStates
Bank, N.A. (the "Administrative Agent") located at 1345 Chestnut Street,
Philadelphia, Pennsylvania 19101-7618, on the Termination Date (as such term is
defined in the Credit Agreement hereinafter referred to) in lawful money of the
United States of America and in immediately available funds, the principal sum
of (a) _____________________ DOLLARS ($_______________), or, if less, (b) the
aggregate unpaid principal amount of all Revolving Credit Loans made by the Bank
to the Borrowers pursuant to the Credit Agreement. The Borrowers further agree
to pay interest accrued on the unpaid principal amount outstanding hereunder
from time to time from the date hereof in like money at such office at the rates
and on the dates specified in the Credit Agreement together with all other
costs, fees and expenses as provided in the Credit Agreement.
The holder of this Note is authorized to endorse on Schedule 1 annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the respective date(s), Type and amount
of each Revolving Credit Loan made by the Bank to the Borrowers, each
continuation thereof, each conversion of all or a portion thereof to another
Type, the date and amount of each payment or prepayment of principal thereof
and, in the case of Eurodollar Loans, the length of each Interest Period with
respect thereto, which endorsement shall constitute prima facie evidence of the
accuracy of the information endorsed; provided, however, that the failure to
make any such endorsement (or any error in such recordation) shall not affect
the obligations of the Borrowers to make payments of principal, interest and
other amounts outstanding in accordance with the terms of this Note and the
Credit Agreement.
<PAGE>
This Note is one of the Revolving Credit Notes referred to in,
evidences indebtedness incurred under, and is entitled to the benefits of, the
Credit Agreement dated as of September __, 1995 (said Agreement, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being referred to as the "Credit Agreement") among the Borrowers, VWR Scientific
of Canada Ltd., the other banks and financial institutions parties thereto,
CoreStates Bank, N.A., as administrative agent and collateral agent, Bank of
America National Trust and Savings Association, as syndication agent, PNC Bank,
National Association, as documentation agent, BA Securities, Inc., as arranger,
and Seattle-First National Bank, as lead manager. The Credit Agreement, among
other things, contains provisions for the acceleration of the maturity hereof
upon the happening of certain events, for optional prepayment of the principal
hereof prior to the maturity thereof, for a higher rate of interest hereunder
upon the happening of an Event of Default, for the amendment or waiver of
certain provisions of the Credit Agreement and for certain security interests
granted by the Borrowers. Reference is made to the Credit Agreement and the
other Loan Documents for a statement of the terms and conditions under which the
Loans evidenced hereby have been secured.
Upon the occurrence of any one or more of the Events of Default
specified in the Credit Agreement, all amounts then remaining unpaid on this
Note shall become, or may be declared to be, immediately due and payable, all as
provided therein.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and notice of any kind. No failure to exercise, and
no delay in exercising, any rights hereunder on the part of the holder hereof
shall operate as a waiver of such rights.
Capitalized terms not otherwise defined herein shall have the meanings
set forth in the Credit Agreement. This Note shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Pennsylvania.
[CORPORATE SEAL] VWR CORPORATION
Attest:_______________________ By:___________________________
Title:________________________ Title:________________________
[Signatures Continued on Next Page]
2
<PAGE>
SCIENTIFIC HOLDINGS CORP.
[CORPORATE SEAL]
Attest:_______________________ By:___________________________
Title:________________________ Title:________________________
VWR SCIENTIFIC INTERNATIONAL
CORPORATION
[CORPORATE SEAL]
Attest:_______________________ By:___________________________
Title:________________________ Title:________________________
3
<PAGE>
SCHEDULE 1
LOANS, CONVERSIONS AND PAYMENTS
<TABLE>
<CAPTION>
===================================================================================================
AMOUNT OF AMOUNT OF
BASE RATE EURODOLLAR
LOANS LOANS UNPAID
TYPE OF LOAN AMOUNT OF CONVERTED CONVERTED TO PRINCIPAL
(EURODOLLAR OR AMOUNT OF PRINCIPAL TO EURODOLLAR BASE RATE BALANCE OF NOTATION
DATE BASE RATE) LOANS REPAID LOANS LOANS LOANS MADE BY
<S> <C> <C> <C> <C> <C> <C> <C>
===================================================================================================
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
___________________________________________________________________________________________________
===================================================================================================
</TABLE>
4
<PAGE>
Exhibit 10(b)
EXECUTION COPY
DISTRIBUTION AGREEMENT
by and among
BAXTER HEALTHCARE CORPORATION
as Supplier
and
VWR CORPORATION
as Distributor
September 15, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. Definitions......................................................... 1
2. Distribution Rights................................................. 3
3. Term................................................................ 5
4. Minimum Purchase Requirements....................................... 5
5. Prices.............................................................. 7
6. Distributor's Duties................................................ 9
7. Supplier's Duties................................................... 12
8. Trademarks.......................................................... 16
9. Termination......................................................... 17
10. Procedures on Expiration or Termination............................. 18
11. Force Majeure....................................................... 19
12. Confidentiality..................................................... 19
13. Third Party Claims.................................................. 20
14. Miscellaneous Provisions............................................ 22
15. Assignment.......................................................... 24
16. Counterparts........................................................ 25
</TABLE>
LIST OF EXHIBITS
Exhibit A Products and Prices
Exhibit B Distributor's Minimum Purchase Requirements for U.S. Sales
Exhibit C Distributor's Minimum Purchase Requirements for International
Incremental Sales
Exhibit D VWR's Purchase Goals
i
<PAGE>
DISTRIBUTION AGREEMENT
----------------------
This DISTRIBUTION AGREEMENT ("Agreement"), dated as of September 15,
1995, by and among BAXTER HEALTHCARE CORPORATION, a Delaware corporation with
its principal offices at One Baxter Parkway, Deerfield, Illinois 60015
(hereinafter called the "Supplier") and VWR CORPORATION, a Pennsylvania
corporation with its principal office at 1310 Goshen Parkway, West Chester,
Pennsylvania 19380 (hereinafter called "Distributor").
RECITALS
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1. Distributor, Supplier, and EM Laboratories, Incorporated, a New
York corporation ("EM"), have entered into an Asset Purchase Agreement dated as
of May 24, 1995, as amended on September 15, 1995, pursuant to which Supplier
has sold to Distributor, and Distributor has purchased from Supplier, certain of
the assets and business of Supplier's "Industrial Distribution Business," as
defined in the Asset Purchase Agreement.
2. This Agreement is a condition to the consummation of the
transactions contemplated by the Asset Purchase Agreement.
AGREEMENT
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In consideration of the Asset Purchase Agreement and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Supplier and
Distributor agree as follows:
1. Definitions.
1.1 "Affiliate" shall mean any person, firm or corporation controlling,
controlled by or under direct or indirect common control with a party hereto.
For the purpose of this definition, the term "control" means the power to direct
the management or policies of a party, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
1.2 "Contract Year" shall mean the period commencing on October 1 and
ending on September 30 in each year during the Term, provided that there shall
be a "Stub Period" beginning on the date hereof and ending on September 30,
1995.
1.3 "Industrial Customers" shall mean customers who purchase the Products
for use in laboratories, production plants, and other facilities in all cases
not involved in the care of
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human patients or the diagnosis of disease or defect for the purpose of care of
human patients, including, without limitation, analytical, research and
development laboratories, educational institutions, environmental testing
laboratories, clean room facilities, biotechnology and pharmaceutical research
and production facilities, medical device manufacturers, electronic and
semiconductor manufacturers, and government research facilities.
1.4 "Minimum Purchase Requirement" shall mean the aggregate minimum dollar
volume of the Products purchased by Distributor during each Contract Year
determined in accordance with Section 4 herein, including any orders placed but
not filled at least 30 days prior to the end of any such Contract Year.
1.5 "Person" shall mean an individual, corporation, partnership,
unincorporated syndicate, unincorporated organization, trust, trustee, executor,
administrator or other legal representative, governmental authority or agency,
or any group or combination thereof.
1.6 "Products" shall mean the products and accessories listed in Exhibit A
hereto together with the parts and components necessary for the repair and
replacement thereof, provided that Supplier may, upon 30 days written notice to
Distributor: (a) add the Products to Exhibit A which have uses or applications
similar to any Products set forth in Exhibit A; or (b) delete from Exhibit A and
this Agreement any Product, the manufacture and sale of which has been generally
discontinued by Supplier. Exhibit A shall be deemed to be amended to reflect any
such Product additions or deletions without any further act by any party hereto.
Exhibit A, as amended and supplemented from time to time, is incorporated by
reference herein and forms part of this Agreement.
1.7 "Term" shall mean the period of time specified in Section 3 hereof,
including any and all renewals thereof.
1.8 "Territory" shall mean the world (excluding Canada and Japan).
1.9 "United States" shall mean the United States, excepting Puerto Rico
and other territories and possessions of the United States.
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2. Distribution Rights.
2.1 During the Term, as defined herein, Supplier hereby grants to
Distributor, and Distributor accepts the right to sell and distribute the
Products only to Industrial Customers in the Territory for non-patient use
subject to the terms and conditions stated herein. Distributor may grant to EM
or its Affiliates the rights to distribute the Products outside the United
States, provided that with respect to such distribution, EM shall be subject to
all of Distributor's duties and obligations hereunder (except for the Minimum
Purchase Requirements) and Distributor shall remain fully liable for EM's
performance of such duties and obligations. During the Term, except as
otherwise provided in Section 2.3, Supplier and its Affiliates shall distribute
the Products to Industrial Customers in the United States only through
Distributor pursuant to this Agreement. This Agreement shall in no way limit
the right of Supplier and its Affiliates to distribute Products to Industrial
Customers outside the United States, provided that any sales by Supplier or its
Affiliates to Industrial Customers within the Territory but outside the United
States shall be credited against the Minimum Purchase Requirements for
incremental international sales for the applicable Contract Year or Stub Period.
2.2 Distributor hereby accepts such grant of distribution rights.
Distributor represents and warrants that it shall not sell or distribute the
Products other than as provided for herein. Distributor hereby agrees that
during the Term:
2.2.1 none of Distributor or its respective Affiliates, or any
other Person on its or their behalf, shall sell, solicit
orders for or otherwise distribute any Product, directly or
indirectly through distributors, agents or otherwise, to or
from any customer or any Affiliate of any customer: (a)
located outside of the Territory; (b) that is not an
Industrial Customer; or (c) for any use other than non-
patient use;
2.2.2 Distributor may distribute Products in the Territory through
sub-distributors provided that the dollar volume of Products
sold to sub-distributors in the United States in any
Contract Year does not exceed 15% of the dollar volume of
all Products sold by Distributor during such Contract Year
in the United States;
2.2.3 Distributor may distribute Products in the Territory through
EM acting as a sub-
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distributor provided that the dollar volume of Products sold
to EM in the United States shall not be counted as sales to a
sub-distributor for purposes of the calculation described in
Section 2.2.2 regarding the percentage dollar volume of
Products sold to sub-distributors in the United States in a
given Contract Year; and
2.2.4 Supplier shall not be responsible to the extent Distributor
grants any warranty, service contract or similar right with
respect to the Products that is different from or additional
to the warranty set forth in Section 7.7 herein without the
prior written consent of Supplier, which consent may be
withheld by Supplier in its sole discretion. To the extent
that Distributor or any of its Affiliates grants, or is
deemed to have granted, any such warranty or right,
Distributor shall be solely responsible therefor, it being
understood that the purpose of this sentence is to allocate
responsibility between Distributor and Supplier and not with
respect to any other party.
2.3 Distributor acknowledges and agrees that:
2.3.1 this Agreement shall not prohibit Supplier or its Affiliates
from distributing the Products to Industrial Customers within
the United States otherwise than through Distributor to the
extent that Distributor shall be unable to so distribute the
Products by reason of any matter referred to in Section 11 or
if Distributor is otherwise prohibited from selling, or
unable to sell, the Products to any customer or class of
customers, provided that such sales shall be credited against
the Minimum Purchase Requirements for the applicable Contract
Year or Stub Period;
2.3.2 Supplier may continue to distribute the Products in the
United States to Industrial Customers during the Term: (a) by
any means by which Supplier distributed the Products, other
than through the Industrial Distribution Business, prior to
the date of this Agreement; or (b) through sub-distributors
used by Supplier prior to the date of this Agreement; and
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2.3.3 Supplier may: (a) continue to sell and distribute the
Products in the United States via any means to customers
other than Industrial Customers; (b) sell and distribute the
Products to any customer in the United States for non-patient
use if such customer conditions any sale or distribution of
the Products by Supplier for patient treatment on the sale or
distribution of the Products for non-patient use, provided
that any such sales shall be credited against the Minimum
Purchase Requirements for the applicable Contract Year or
Stub Period; (c) sell and distribute the Products to its
Affiliates provided that such sale and distribution is for
internal use only and not for resale, and Distributor shall
assist Supplier in connection with such sales and
distribution; (d) continue to sell and distribute the
Products to third parties who will include such Products as
components of kits used to perform any test or procedure; and
(e) continue to sell and distribute any Product to any
Industrial Customer in the United States to the extent
necessitated by Supplier's inability to assign to Distributor
any contract or agreement with an Industrial Customer
pursuant to the Asset Purchase Agreement, provided that such
sales shall be credited against Distributor's Minimum
Purchase Requirements in the applicable Contract Year or Stub
Period.
3. Term.
The initial term ("Term") of this Agreement shall begin on the date
of this Agreement and end on September 30, 2000; provided that the Term shall be
automatically renewed for additional and successive periods of one year each,
unless and until such initial or additional Term is terminated as provided in
Section 9 of this Agreement.
4. Minimum Purchase Requirements.
4.1 Supplier and Distributor acknowledge and agree that the Minimum
Purchase Requirements for Products for the Stub Period and the first five
Contract Years are set forth in Exhibits B and C. The total Minimum Purchase
Requirement for Distributor's U.S. sales for each Contract Year and the Stub
Period shall be the sum of the Base amount plus the Incremental amount listed on
Exhibit B for each such Contract Year or Stub Period. The total Minimum
Purchase Requirement for Distributor's
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international sales for each Contract Year and the Stub Period is the
incremental amount listed on Exhibit C.
4.2 The Minimum Purchase Requirements for each Contract Year after the
fifth Contract Year, if any, shall be reviewed and established by Distributor
and Supplier on an annual basis through good faith negotiations which shall
begin six months prior to the beginning of each such Contract Year and be
completed at least 60 days prior to the beginning of the applicable Contract
Year, provided that in no event shall any Minimum Purchase Requirement for any
Contract Year be less than such Minimum Purchase Requirement for the previous
Contract Year.
4.3 In the event that the actual dollar amount of the Products purchased
by Distributor in any Contract Year or the Stub Period (the "Actual Purchase
Amount") is less than any Minimum Purchase Requirement for such Contract Year or
Stub Period, Distributor shall, within 30 days after the end of such Contract
Year or Stub Period, either: (a) pay to Supplier as liquidated damages the
difference between the Minimum Purchase Requirement and the Actual Purchase
Amount (the "Purchase Shortfall"); or (b) order and pay for Products in a dollar
amount equal to such Purchase Shortfall.
4.4 Notwithstanding anything to the contrary contained herein, the
parties agree that if, at the end of the third Contract Year, Supplier
determines, in its sole and absolute discretion, that there has been a
significant change in manufacturing processes in clean room environments since
the date of this Agreement, Supplier shall propose revised Minimum Purchase
Requirements for the fourth and fifth Contract Years to address such change.
4.5 If with respect to Distributor's international sales: (a)
Distributor's actual sales during any Contract Year are greater than or less
than (b) the Minimum Purchase Requirement for such Contract Year as set forth in
Exhibit C, the Minimum Purchase Requirement for the following Contract Year
shall be adjusted upward (in the event such sales are greater) or downward (in
the event such sales are less) by the percentage of such shortfall or overage.
4.6 During the first Contract Year and the Stub Period, the mix of
Distributor's purchases of Products shall be of similar proportion to the mix of
such Products sold by the Industrial Distribution Business in 1994. After the
first Contract Year, the mix of Distributor's purchases of Products shall be of
similar proportion to the mix of such Products purchased by Distributor during
the immediately preceding Contract Year. Twice during each Contract Year, the
parties shall meet to determine whether the mix of Distributor's
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purchases of Products varies by more than 10% of the mix from the period against
which such Contract Year is measured. If Supplier's margin is adversely
affected by such mix, Supplier shall have the right to revise and adjust margins
in order to eliminate any detrimental effect from such mix on future sales.
4.7 During the Stub Period and the first Contract Year, Distributor
shall use good faith efforts to achieve the purchase goals specified in Exhibit
D, provided, however, that Distributor shall incur no liability for its failure
to achieve any such purchase goals in excess of any Minimum Purchase
Requirements.
4.8 Within 30 days after the Stub Period and on or prior to the end of
each Contract Year, Supplier shall provide to Distributor a report containing
any credits which should reduce Distributor's Minimum Purchase Requirements
hereunder arising from sales by Supplier or any of its Affiliates to Industrial
Customers during such Stub Period or the first eleven months of the Contract
Year and an estimate of the credits for the twelfth month of such year. Within
30 days after the end of each Contract Year, Supplier shall provide to
Distributor a final report covering the Contract Year and appropriate
adjustments shall be made.
5. Prices.
5.1 The prices for each Product sold by Supplier to Distributor under
this Agreement shall be the price set forth opposite such Product in Exhibit A.
Supplier may increase or decrease the price of any Product upon not less than 60
days written notice to Distributor effective on the first day of any calendar
year, provided that such price increase shall be based upon the constant volume
"standard to standard" cost change for Supplier's manufacturing units producing
the Pharmaseal and Convertors Products. Any such notice shall contain the
specific price change for each Product affected by the notice. Upon the first
day of the calendar year immediately following the expiration of such 60 day
period, Exhibit A shall be deemed to be amended to reflect the price increases
and/or decreases contained in such notice without any further act by any party
hereto. Supplier shall honor Distributor's purchase orders received by Supplier
prior to Distributor's receipt of any such notice at the prices in effect when
such orders were received. Distributor agrees that the dollar volume of its
Product purchases during the 60 days prior to the effective date of a price
change shall not exceed 20% of the dollar volume of Distributor's Product
purchases during the preceding 10 months, except that such 20% limit shall not
apply to purchases made by Distributor for the sole purpose of achieving any
Minimum Purchase Requirement.
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5.1.1 If Distributor exceeds the Minimum Purchase Requirement for
the Stub Period listed on Exhibit B, Supplier shall pay
Distributor a rebate of 5.9% times the net purchase price of
all Products purchased during such Stub Period in excess of
such Minimum Purchase Requirement.
5.1.2 Beginning on October 1, 1995, if at any time during any of
the first three calendar quarters of any Contract Year,
Distributor purchases from Supplier more than $12,000,000 of
Products, Supplier shall pay Distributor a rebate of 5.9%
times the net purchase price of all Products purchased during
such quarter in excess of $12,000,000 subject to Section
5.1.3.
5.1.3 After the end of each Contract Year Supplier shall calculate
Distributor's total net purchases of Products and Distributor
shall be entitled to a rebate of 5.9% times the net purchase
price of all Products purchased during such Contract Year in
excess of $48,000,000. If the rebates due Distributor for
such Contract Year exceed the rebates paid to Distributor
during the Contract Year, pursuant to Section 5.1.2 Supplier
shall pay Distributor such remaining rebate due Distributor.
To the extent rebates paid for the Contract Year pursuant to
Section 5.1.2 exceed the total due to Distributor for such
Contract Year, Distributor shall repay to Supplier the rebate
overpayment. If Distributor's total net purchases of
Products during such Contract Year totalled less than
$48,000,000, Distributor shall repay all rebates paid by
Supplier for the Contract Year pursuant to Section 5.1.2.
5.1.4 All rebates due Distributor shall be paid within fifteen (15)
days after the end of the applicable quarter. All rebate
repayments due to Supplier shall be paid within fifteen (15)
days after the date of Supplier's invoice for any repayments
due.
5.2 Distributor shall have the exclusive right to establish and control
prices on the Products sold to its customers.
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5.3 The prices for the Products sold by Supplier to Distributor shall
not include any transportation expenses, customs duties, sales tax, goods and
services tax or any other sales, use, inventory, delivery, value added or like
taxes of any federal, state or local government in the Territory or anywhere
else, however imposed. Distributor shall be responsible for all such expenses,
duties and taxes and shall pay Supplier any and all taxes which Supplier is
required to collect or pay with respect to the sale to Distributor, of the
Products pursuant to this Agreement.
6. Distributor's Duties.
During the Term, Distributor shall maintain the facilities and personnel
necessary to distribute the Products as provided for hereunder, including
without limitation the facilities and personnel necessary to:
6.1 continue to supply the Products to existing customers of the
Industrial Distribution Business in the Territory pursuant to all contracts,
commitments, and other arrangements between Supplier and Industrial Customers in
effect as of the date of execution of this Agreement.
6.2 submit its orders for the Products on its standard purchase order
form, provided that notwithstanding any terms or provisions of such purchase
order, the terms and conditions of this Agreement shall apply to each such
purchase order;
6.3 pay for such orders on Supplier's terms of payment net 30 days from
the date of invoice;
6.4 actively advertise, promote and distribute the Products by methods
which in Distributor's reasonable judgment are best suited for the sale of such
Products, including, without limitation, the following:
6.4.1 promptly respond to customer requests for Product
information and samples and promptly deliver demonstration
equipment to customers' facilities and redeliver such
equipment to Supplier in accordance with Supplier's
reasonable instructions;
6.4.2 provide instruction to customers in the use and routine
handling of the Products;
6.4.3 promptly replace any Products whose expiration date has
expired, in each case at Distributor's cost and expense
unless the replacement was necessary because of a breach
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by Supplier of any of Supplier's duties hereunder;
6.4.4 promptly and courteously resolve billing disputes;
6.4.5 highlight the Products in Distributor's catalogues and other
promotional materials;
6.4.6 display the Products at trade shows and at Distributor's
national and regional sales meetings;
6.4.7 promptly share with Supplier all information in Distributor's
possession about the Products and their ability to compete
and customer's needs; and
6.4.8 provide sales, marketing and promotional support with respect
to the Products that is no less extensive than the support
provided by Distributor with respect to any other similar
product line.
6.5 use trademarks and trade names connoting Supplier only in connection
with the Products sold in the Territory and subject to all terms of this
Agreement, including but not limited to Section 8 hereof;
6.6 provide appropriate training with respect to the Products for
Distributor's sales representatives;
6.7 after the expiration of the Services Agreement between the parties
dated as of the date hereof with respect to any Region, as defined therein,
stock inventories of the Products in quantities which are sufficient to achieve
a fulfillment rate acceptable to customers in the Territory;
6.8 deliver Products that have an expiration date to customers with a
minimum shelf life acceptable to customers;
6.9 store Products only in a manner consistent with applicable
manufacturer's specifications in order to prevent damage to or deterioration of
the Products;
6.10 give Supplier 30 days written notice of any and all proposed returns of
Products and Distributor shall not return any Products without Supplier's prior
written approval, provided that during any Contract Year, Distributor may
exchange with Supplier up to $100,000 of Products (provided that if any such
Product has an expiration date such return shall be made at least 60 days
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prior to such expiration date) for $100,000 of alternate Products;
6.11 offer to its sales representatives incentives with respect to the
Products that are no less favorable to such personnel than the incentives
offered to such personnel with respect to any other similar product line;
6.12 obtain and maintain during the Term and for one year after the
expiration or termination of this Agreement product liability insurance
(containing either a vendor's endorsement or contractual liability coverage
referencing the indemnification provisions contained in Section 6.15 hereof) on
all Products with insurers reasonably satisfactory to Supplier with minimum
limits of $1,000,000/$3,000,000 for bodily injury and $300,000 for property
damage and immediately furnish to Supplier a certificate of insurance issued by
the insurance carrier evidencing the foregoing endorsements, coverages and
limits and that such insurance shall not be cancellable without at least 30 days
prior written notice to Supplier;
6.13 comply (or cause compliance) with all existing and future federal,
state and other laws and regulations in the Territory applicable to the conduct
of Distributor's business or the possession, use and sale to its customers of
Products pursuant to this Agreement, including, without limitation, the
following:
6.13.1 give prompt written notice to Supplier if Distributor should
become aware of any defect or condition (actual or alleged)
which may alter the quality of the Products in any material
respect or may render any of the Products in violation of any
applicable law or regulation of the Territory, including,
without limitation, any violation which could require any
alteration of the specifications of any Product, affect the
sale of any Product, cause revocation of any regulatory
approval with respect to any Product or its sale hereunder,
or give rise to a claim against Supplier by any person, and
Distributor shall promptly notify Supplier upon becoming
aware of any changes in any laws or regulations in the
Territory applicable to the manufacture, sale, packaging,
labelling, possession or use of the Products;
6.13.2 keep appropriate records of all lot coded and serial numbered
Products sold to customers,
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including without limitation particle testing data and
sterility information;
6.13.3 make prompt return of any and all Products affected by
holds or recalls, if so requested by Supplier;
6.13.4 not alter, remove or otherwise modify the packaging,
labelling or product insert sheets furnished by Supplier
for the Products; and
6.13.5 grant to Supplier the right to audit Distributor's
customer sales information to verify that Products have
not been sold to any customers other than Industrial
Customers;
6.14 not repackage or relabel any Products;
6.15 shall indemnify and hold harmless Supplier, its Affiliates and: (a)
their respective directors, officers, employees, agents and counsel; and (b) the
successors, assigns, heirs and personal representatives of any of the foregoing
(all of the foregoing being collectively referred to in Section 13 as
"Indemnified Persons") with respect to all claims, liabilities, damages, and
expenses, including reasonable attorneys' fees and expenses, arising out of
claims by third parties caused by any wrongful or negligent act or omission by
Distributor (or its employees or other agents) in its performance of the terms
of this Agreement; provided that Section 13 shall apply to any claim,
arbitration proceeding or suit made or brought by any third party as to which
any Indemnified Person intends to claim indemnification under this Section 6.15;
and
6.16 provide Supplier with a rolling six month forecast of Distributor's
planned purchases of Products, provided that the forecast for the first four
months of the forecast period shall constitute firm orders for the Products
forecasted for purchase in such months.
7. Supplier's Duties.
Supplier:
7.1 shall ship all Products from sources determined by Supplier in its
sole discretion on the following basis:
7.1.1 all Products shipped to Distributor by Supplier shall be
shipped F.O.B. Origin Baxter Replenishment Center, Prepaid
and Add, to Distributor's facility in the Territory as
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designated pursuant to the relevant Purchase Order; and
7.1.2 in cases of emergency or at Distributor's request, Products
may be shipped directly to Distributor's customers ("drop
shipments"), in which event such Products shall be shipped
F.O.B. Destination, Prepaid and Add, with Supplier adding the
actual freight charges incurred for such shipments to the
relevant invoices to Distributor.
Title and risk of loss of all Products shall pass to Distributor, or, in
emergency situations or at Distributor's request as indicated above, to its
customers, as the case may be, upon Supplier's delivery of such Products to the
carrier;
7.2 shall adequately package and deliver the Products to the carrier;
7.3 shall, subject to Section 2.3, promptly refer all Product inquiries
from Industrial Customers in the Territory to Distributor;
7.4 shall obtain and maintain during the Term and for one year after the
expiration or termination of this Agreement product liability insurance
(containing either a vendor's endorsement or contractual liability coverage
referencing the indemnification provisions contained in Section 7.8 hereof) on
all Products with insurers reasonably satisfactory to Distributor with minimum
limits of $1,000,000/$3,000,000 for bodily injury and $300,000 for property
damage and immediately furnish to Distributor a certificate of insurance issued
by the insurance carrier evidencing the foregoing endorsements, coverages and
limits and that such insurance shall not be cancellable without at least 30 days
prior written notice to Distributor; provided, however, that Supplier may
satisfy its obligations under this Section 7.4 through its self-insurance
program;
7.5 7.5.1 shall furnish Distributor, at no cost to Distributor,
reasonable quantities of the following materials that Supplier has prepared for
the Products and considers appropriate for release to Distributor and its
customers (as determined by Supplier in its sole discretion): sales literature,
product insert sheets and customer instruction manuals for each Product or
versions or summaries thereof and, upon Distributor's written request,
photographs or copies thereof and camera-ready artwork included in such
materials;
7.6 shall comply (or cause compliance) with all existing and future laws
and regulations in the Territory applicable to
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the conduct of Supplier's business or the manufacture, packaging, labelling and
sale to Distributor of Products pursuant to this Agreement, including, without
limitation, the following:
7.6.1 give prompt written notice to Distributor if Supplier should
become aware of any defect or condition (actual or alleged)
which may alter the quality of the Products in any material
respect or may render any of the Products in violation of any
applicable law or regulation of the Territory, including,
without limitation, any violation which could require any
alteration of the specifications of any Product, affect the
sale of any Product, cause revocation of any federal, state
or other regulatory approval with respect to any Product or
its sale hereunder or give rise to a claim against
Distributor by any person; and
7.6.2 give prompt written notice to Distributor of any and all
Products affected by holds or recalls and, if Supplier
requests Distributor to return any of such Products to
Supplier, promptly reimburse Distributor for the price of
such returned Products paid by Distributor under this
Agreement and the direct cost of returning such Products to
Supplier;
7.7 warrants to Distributor that: (a) all Products sold to Distributor or
its customers pursuant to this Agreement shall not be adulterated or misbranded
and the packaging or labelling thereof shall not be misleading within the
meaning of applicable legislation relating thereto in the Territory; (b) each of
such Products shall conform to the descriptions and uses set forth in the
labelling and product insert sheets for such Product approved by Supplier; and
(c) Supplier shall have good and marketable title to all such Products free and
clear of all liens or encumbrances (other than any created by Distributor or its
customers). The foregoing warranty shall commence on the date of delivery of
each Product to Distributor or a customer, as the case may be, and expire 6
months thereafter (the "Warranty Period"), except that the Warranty Period for
each Product the use of which is subject to an expiration date shall expire on
the applicable expiration date. The foregoing warranty does not apply to any
Product which has been modified, improved or refurbished other than by Supplier
and does not cover any defect, malfunction or damage due to: (i) accident,
neglect or willful mistreatment of any Product; (ii) failure to properly store
or handle any Product; (iii) failure to use, operate, service or maintain any
Product in accordance with Supplier's applicable operating and service manuals;
or (iv) failure to use or apply
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proper reagents or chemicals in or to any Product. Any Product which proves not
to be in conformity with the foregoing warranty during the applicable Warranty
Period shall be repaired or replaced at the option and expense of Supplier. At
Supplier's option, Supplier shall pay the transportation and other costs
incurred by Distributor with respect to any Products returned to Supplier for
repair or replacement under these warranties, or reimburse Distributor for any
such costs.
7.7.1 THE FOREGOING WARRANTY CONTAINS THE SOLE REMEDY FOR ANY
DEFECT IN THE PRODUCTS. THE FOREGOING WARRANTY IS EXCLUSIVE
AND IN LIEU OF ALL OTHER WARRANTIES OF ANY KIND, WHETHER
STATUTORY, WRITTEN, ORAL, EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND
MERCHANTABILITY. IN NO EVENT, WHETHER AS A RESULT OF BREACH
OF CONTRACT, TORT LIABILITY (INCLUDING NEGLIGENCE) OR
OTHERWISE, SHALL SUPPLIER BE LIABLE TO DISTRIBUTOR FOR ANY
SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES; and
7.7.2 ANY LIABILITY OF SUPPLIER TO DISTRIBUTOR UNDER THE WARRANTY
CONTAINED IN SECTION 7.7 SHALL BE LIMITED TO THE TOTAL PRICE
PAID BY DISTRIBUTOR FOR THE PRODUCTS WHICH ARE THE SUBJECT OF
SUCH LIABILITY PLUS ALL COSTS FOR TRANSPORTATION AND OTHER
DIRECT EXPENSES INCURRED BY DISTRIBUTOR WITH RESPECT TO SUCH
PRODUCTS.
7.8 shall indemnify and hold harmless Distributor, its Affiliates and: (a)
their respective directors, officers, employees, agents and counsel; and (b) the
successors, assigns, heirs and personal representatives of any of the foregoing
(all of the foregoing being collectively referred to in Section 13 as
"Indemnified Persons") with respect to all claims, liabilities, damages, and
expenses, including reasonable attorney's fees and expenses, arising out of
claims by third parties caused by:
7.8.1 any actual or alleged patent, copyright or trademark
infringement, or violation of any other proprietary right,
arising out of the purchase, sale or use of the Products
pursuant to this Agreement;
7.8.2 any actual breach of Section 7.7 (subject to the limitations
in Section 7.7); and
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7.8.3 any wrongful or negligent act or omission by Supplier (or its
employees or agents) in its performance of the terms of this
Agreement;
provided that Section 13 shall apply to any claim, arbitration proceeding or
suit made or brought by any third party as to which any Indemnified Person
intends to claim indemnification under this Section 7.8; and
7.9 represents to Distributor that: (a) for the first calendar quarter of
1995 domestic net sales of the Products to unaffiliated third parties by the
Industrial Distribution Business were at least $12,000,000; and (b) for the
first calendar quarter of 1995 International net sales (excluding sales in the
United States and Japan) of Products to unaffiliated third parties by the
Industrial Distribution Business were at least $2,000,000.
8. Trademarks.
8.1 Supplier acknowledges that Distributor is the owner or licensee of the
trademarks and trade names connoting Distributor which Supplier may elect to use
in the promotion and sale of the Products and that Supplier has no right or
interest in such trademarks and trade names. Before commencing any use of the
trademarks or trade names connoting Distributor in connection with any catalog,
promotional, packaging, or other material, which use has not been previously
approved in writing by Distributor, Supplier agrees to provide Distributor with
proposed specimens of use of such trademarks or trade names and to obtain
Distributor's written approval of such proposed use.
8.2 Distributor acknowledges that Supplier is the owner or licensee of the
trademarks and trade names connoting Supplier which Distributor may elect to use
in the promotion and sale of the Products hereunder, and the Distributor has no
right or interest in such trademarks or trade names. Before commencing any use
of the trademarks or trade names connoting Supplier in connection with any
catalog, promotional, packaging, or other materials, which use has not been
previously approved in writing by Supplier, Distributor agrees to provide
Supplier with proposed specimens of use of such trademarks or trade names and to
obtain Supplier's written approval of such proposed use.
8.3 Supplier and Distributor shall each notify the other party promptly of
any and all infringements or improper use by any third party of the trademarks
and trade names connoting such other party, should such Supplier or Distributor
discover reasonable cause for believing that such infringement or improper use
is taking place, and provide to such other party all information which Supplier
or Distributor has available thereon.
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<PAGE>
Supplier and Distributor shall each have sole discretion and control with regard
to any proceedings relating to infringement or improper use of its trademarks
and trade names. Either party may choose to be represented by its own counsel
in any such proceedings but such representation shall be at such other party's
sole expense.
8.4 Supplier and Distributor each acknowledge that the other party would
not have any adequate remedy at law for the breach by the other party of any one
or more of the covenants contained in this Section 8 and agrees that, in the
event of such breach, the other party may, in addition to the other remedies
which may be available to it, file a suit in equity to enjoin the breaching
party from any further breach of any of the terms of this Section 8.
9. Termination.
9.1 Supplier and Distributor shall each have the right to terminate this
Agreement effective upon delivery of written notice to the other party if the
other party: (a) makes an assignment for the benefit of creditors, or becomes
bankrupt or insolvent, or is petitioned into bankruptcy, or takes advantage of
any state, federal or foreign bankruptcy or insolvency act, or if a receiver or
receiver/manager is appointed for all or any substantial part of its property
and business and such receiver or receiver/manager remains undischarged for a
period of 30 days, or if the corporate existence of the other party is
terminated by voluntary or involuntary dissolution; or (b) defaults in the
performance of any of its covenants or obligations contained in this Agreement
and such default is not remedied to the non-defaulting party's reasonable
satisfaction within 30 days after written notice to the defaulting party of such
default, or if such default is not capable of rectification within 30 days, if
the defaulting party has not promptly commenced to rectify the default within
such 30 day period, and thereafter proceeds diligently to rectify same.
Notwithstanding the foregoing provisions of this Section 9, Supplier may suspend
its performance under this Agreement if Distributor has not made any uncontested
payment due under Section 6.3 within 30 days following the date on which such
payment is due until such payments have been received by Supplier and any such
failure to pay within such 30 day period shall be considered a default under
this Agreement.
9.2 In the event that Distributor fails to achieve the Minimum Purchase
Requirements for any two successive Contract Years, Supplier shall have the
option, upon written notice to Distributor, to terminate this Agreement 90 days
after the end of the second such Contract Year.
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9.3 In the event that Distributor does not pay any Purchase Shortfall in
accordance with Section 4.3, Supplier shall have the option to either: (a)
terminate this Agreement in its entirety within 90 days after the end of the
Contract Year for which such Purchase Shortfall was due; or (b) continue to
perform pursuant to the terms of this Agreement provided that notwithstanding
anything to the contrary contained herein, Supplier may, directly or indirectly,
distribute the Products in the Territory to any Industrial Customers without
limitation beginning on the day after the Purchase Shortfall is due to Supplier.
Notwithstanding the foregoing, Distributor shall remain liable to Supplier for
any Purchase Shortfall.
9.4 In the event that after good faith negotiations pursuant to Section
4.2, the parties cannot agree on any Minimum Purchase Requirement for any
Contract Year after the fifth Contract Year, this Agreement shall automatically
terminate at the end of the fifth Contract Year.
9.5 In the event that this Agreement is terminated pursuant to this
Section 9, Supplier and Distributor shall comply fully with this Agreement and
use their best efforts to adequately service existing customers of the Products
until such termination becomes effective.
10. Procedures on Expiration or Termination.
10.1 On the expiration or termination of this Agreement for any reason: (a)
Supplier shall continue to honor Distributor's orders for Products placed up to
the effective date of termination and for a period of 60 days thereafter and
Distributor shall pay for such Products on the terms and conditions set forth in
this Agreement; and (b) if a pro rata amount of the Minimum Purchase
Requirements for the Contract Year during which such expiration or termination
occurs has not been purchased at the time such expiration or termination occurs,
Distributor shall pay to Supplier a pro rata amount of the Purchase Shortfall
that would have been due at the end of such Contract Year pursuant to the terms
of Section 4.3.
10.2 Within 30 days after termination of this Agreement by Supplier, upon
written request from Distributor, Supplier shall have the option to repurchase
for cash Distributor's inventory of the Products for which Distributor has good
and marketable title free of all liens and encumbrances and that are in good,
resalable condition in their original packaging and are not obsolete. The
purchase price of such inventory shall be equal to the purchase price thereof
paid by Distributor to Supplier, less any reserves for over-stocked or slow-
moving inventory maintained by Distributor in the ordinary course of business
and a restocking fee equal to 10% of Distributor's purchase price
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<PAGE>
thereof, provided that Supplier may deduct from any amount owed by Supplier for
inventory repurchase any amount owed by Distributor to Supplier for any Volume
Difference. Notwithstanding the foregoing provisions of this Section 10.2, if,
on the date of expiration or termination of this Agreement, Distributor shall be
in default in the performance of any of its covenants or obligations contained
in this Agreement, or if this Agreement shall be terminated by Supplier in
accordance with Section 9 hereof, Supplier shall have no obligation to purchase
any of Distributor's inventory of Products under this Section 10.2, but Supplier
shall have the option, exercisable by written request to Distributor, to
repurchase such inventory on the terms and conditions specified herein.
10.3 Notwithstanding any provision of this Agreement or any other
agreement between Supplier, Distributor and/or their respective Affiliates,
Supplier and its Affiliates and successors shall have the unrestricted right to
sell or otherwise dispose of the Products within the Territory from and after
the effective date of the expiration or termination of this Agreement.
11. Force Majeure.
The obligations of either party to perform under this Agreement
shall be excused during each period of delay caused by matters (not including
lack of funds or other financial causes) such as strikes, supplier delays,
shortages of raw materials, government orders or acts of God, which are
reasonably beyond the control of the party obligated to perform. Any delay
occasioned thereby shall not constitute a default under this Agreement, and the
obligations of the parties shall be suspended during the period of delay so
occasioned.
12. Confidentiality.
12.1 Supplier agrees that, pursuant to this Agreement, valuable marketing
information of a confidential nature pertaining to the marketplace in the
Territory may be disclosed by Distributor to Supplier; that such information
shall be retained by Supplier in confidence; and that Supplier shall not, either
during the term of this Agreement or thereafter, publish or disclose or cause
anyone else to publish or disclose any marketing information supplied to
Supplier by Distributor. Notwithstanding the foregoing provisions of this
Section 12, the above restrictions on disclosure and use shall not apply to any
information which Supplier can show by written evidence was known to it at the
time of receipt thereof from Distributor or which may subsequently be obtained
from sources other than Distributor who are not bound by a confidentiality
agreement with Distributor.
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<PAGE>
12.2 Distributor agrees that, pursuant to this Agreement, valuable
marketing, sales or technical information of a confidential nature may be
disclosed by Supplier to Distributor; that such information shall be retained by
Distributor and its respective Affiliates in confidence; that the transmittal of
such technical information by Supplier to Distributor is upon the express
condition that it is to be used solely for the purpose of effectuating this
Agreement; and that Distributor and its respective Affiliates shall not, either
during the term of this Agreement or thereafter, publish or disclose or cause
anyone else to publish or disclose any marketing or sales information supplied
to Distributor by Supplier, or publish, disclose or use or cause anyone else to
publish, disclose or use, any technical information supplied to Distributor by
Supplier. Notwithstanding the foregoing provisions of this Section 12.2, the
above restrictions on disclosure and use shall not apply to any information
which Distributor can show by written evidence was known to it at the time of
receipt thereof from Supplier or which may subsequently be obtained from sources
other than Supplier who are not bound by a confidentiality agreement with
Supplier.
12.3 Each party acknowledges that the other party would not have any
adequate remedy at law for the breach by either party of any one or more of the
covenants contained in this Section 12 and agrees that, in the event of such
breach, the other party may, in addition to the other remedies which may be
available to it, file a suit in equity to enjoin the breaching party from any
further breach of any of the terms of this Section 12.
13. Third Party Claims.
If any third party shall make any claim or commence any arbitration
proceeding or suit against any one or more of the Indemnified Persons with
respect to which an Indemnified Person intends to make any claim for
indemnification against Distributor under Section 6.15 or against Supplier under
Section 7.8, such Indemnified Persons shall promptly give written notice to
Distributor or Supplier, as the case may be, of such third party claim,
arbitration proceeding or suit and the following provisions shall apply;
13.1 Subject to Section 13.2, such Indemnified Persons shall have the
right to conduct and control, through counsel of their choosing, the defense of
any third party claim, arbitration proceeding or suit, and such Indemnified
Persons may settle the same; provided that such Indemnified Persons shall give
the indemnifying party advance notice of any proposed settlement. Such
Indemnified Persons shall permit the indemnifying party to participate in the
defense of any such action or suit through counsel chosen by it, provided that
the fees and expenses of such counsel shall be borne by the indemnifying party.
Any settlement
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with respect to a claim for money damages effected by such Indemnified Persons
after the indemnifying party has notified such Indemnified Persons in writing of
the indemnifying party's disapproval of such settlement, shall discharge the
indemnifying party from liability with respect to the subject matter thereof
under this Agreement, and no claim for indemnification therefor shall be claimed
by such Indemnified Persons under Section 6.15 or Section 7.8, as the case may
be.
13.2 Notwithstanding Section 13.1, if the remedy sought in any claim,
arbitration proceeding or suit referred to in this Section 13 is solely money
damages, the indemnifying party shall have 15 business days after receipt of the
notice referred to above in this Section 13 to notify such Indemnified Persons
that it elects to conduct and control the defense of such claim, proceeding or
suit. If the indemnifying party does not give the foregoing notice, such
Indemnified Persons shall have the right to defend or settle such claim,
proceeding or suit in the exercise of their exclusive discretion, and the
indemnifying party shall, upon request from any of such Indemnified Persons,
promptly pay to them in accordance with Section 6.15 or Section 7.8, as the case
may be, the amount of any liabilities, damages, losses and expenses, including
reasonable attorney's fees, resulting from such claim, proceeding or suit. If
the indemnifying party gives the foregoing notice, the indemnifying party shall
have the right to undertake, conduct and control, through counsel of its own
choosing and at the sole expense of the indemnifying party, the conduct and
control of the defense and any settlement of such claim, proceeding or suit, and
such Indemnified Persons shall cooperate with the indemnifying party in
connection therewith; provided that: (a) the indemnifying party shall not
thereby permit to exist any lien, encumbrance or other adverse charge upon any
asset of any of such Indemnified Persons; (b) the indemnifying party shall
permit such Indemnified Persons to participate in such defense or settlement
through counsel chosen by such Indemnified Persons, but the fees and expenses of
such counsel shall be borne by such Indemnified Persons except as provided in
clause (c) below; and (c) the indemnifying party shall agree to reimburse
promptly under Section 6.15 or Section 7.8, as the case may be, such Indemnified
Persons for the full amount of any liabilities, damages, losses and expenses,
including reasonable attorneys' fees, resulting from such claim, proceeding or
suit, except in each case for any fees and expenses of counsel for such
Indemnified Persons incurred after the assumption of the conduct and control of
such claim, proceeding or suit by the indemnifying party. So long as the
indemnifying party is contesting any such claim, proceeding or suit in good
faith, such Indemnified Persons shall not pay or settle any such claim,
proceeding or suit; provided, however, that such Indemnified Persons shall have
the right to pay or settle any such claim, proceeding or suit; provided,
further,
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that in such event such Indemnified Persons shall be deemed to have waived any
right to indemnity therefor by the indemnifying party under Section 6.15 or
Section 7.8, as the case may be.
14. Miscellaneous Provisions.
14.1 All notices and other communications required under this Agreement
shall be in writing and shall be deemed to have been given if delivered by hand,
or sent by courier or facsimile transmission (provided that in the case of
facsimile transmission, a confirmation copy of the notice shall be delivered by
hand or sent by courier within 2 days of transmission), addressed:
if to Supplier to:
Baxter Healthcare Corporation
One Baxter Parkway
Deerfield, Illinois 60015
Attention: General Counsel
(facsimile number: (708) 689-4266)
with copies to:
William L. Feather, Esq.
Assistant General Counsel
MPN-02
U.S. Healthcare/Law
Baxter Healthcare Corporation
1450 Waukegan Road
McGaw Park, Illinois 60085
(facsimile number: (708) 689-6452)
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: John M. O'Hare
(facsimile number: (312) 853-7036)
if to Distributor to:
VWR Corporation
1310 Goshen Parkway
West Chester, Pennsylvania 19380
Attention: President
(facsimile number: (610) 436-1760)
with a copy to:
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<PAGE>
Drinker Biddle & Reath
1000 Westlakes, Suite 300
Berwyn, Pennsylvania 19312-2409
Attn: Thomas E. Wood
(facsimile number: (610) 993-8585)
until notice of a change is given as provided in this Section 14.1. All notices
given in accordance with this Section 14.1 shall be effective, if delivered by
hand or by courier, at the time of delivery, and, if communicated by facsimile
transmission, at the time of transmission.
14.2 This Agreement is the entire agreement between the parties hereto with
respect to the subject matter hereof, there being no prior written or oral
promises or representations not incorporated herein or therein.
14.3 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Illinois 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 Northern District of Illinois or the Eastern District of
Pennsylvania or an Illinois state court sitting in Lake County, Illinois, or any
Commonwealth Court sitting in Chester County, Pennsylvania. The parties hereby
consent to the jurisdiction of such courts.
14.4 No amendment or modification of the terms of this Agreement shall be
binding on either party unless reduced to writing and signed by an authorized
officer of the party to be bound. The waiver by either party of any particular
default by the other party shall not affect or impair the rights of the party so
waiving with respect to any subsequent default of the same or a different kind;
nor shall any delay or omission by either party to exercise any right arising
from any default by the other affect or impair any rights which the non-
defaulting party may have with respect to the same or any future default.
14.5 Each party represents and warrants that the terms of this Agreement do
not violate any existing obligations or contracts of, or any law, rule,
regulation, judgment or order binding on, such party. Each party shall
indemnify and hold harmless the other party from and against any and all
liabilities, damages, losses and expenses (including reasonable attorney's fees)
resulting from any third party claim, arbitration proceeding or suit which is
hereafter made or brought against the other party and which alleges any such
violation, all as provided in Section 13 herein with respect to the
indemnification provided in Section 6.15 and Section 7.8.
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14.6 Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall be ineffective to the extent of such prohibition or
unenforceability without affecting, impairing or invalidating the remaining
provisions or the enforceability of this Agreement.
14.7 By virtue of this Agreement, neither party constitutes the other as
its agent, partner, joint venturer, or legal representative and neither party
has express or implied authority to bind the other in any manner whatsoever.
15. Assignment.
15.1 This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and assigns, provided, however,
that neither party shall have the right to transfer or assign its interest in
this Agreement without the prior written consent of the other party, which
consent shall not be unreasonably withheld.
15.2 Notwithstanding the foregoing provisions of this Section 15,
Supplier may assign its rights and obligations under this Agreement to any
corporation or other entity that shall acquire all or substantially all of
Supplier's business and assets and who shall assume in writing all of Supplier's
obligations hereunder and deliver a signed copy of such assumption instrument to
Distributor; provided, further, that upon Distributor's receipt of such
assumption instrument, Supplier shall be fully released and discharged from its
obligations under this Agreement.
15.3 Notwithstanding the foregoing provisions of this Section 15, to the
extent that any corporation or other entity shall acquire all or substantially
all of Supplier's business and assets relating to any of the Products, Supplier
may assign a corresponding portion of its rights hereunder to such corporation
or entity, provided that any such corporation or entity shall assume in writing
all of Supplier's obligations hereunder which correspond to the portion of
rights assigned, and shall deliver a signed copy of such assumption instrument
to Distributor; provided further that upon Distributor's receipt of such
assumption instrument, Supplier shall be fully released and discharged from all
of the obligations under this Agreement that are assumed by such a corporation
or entity. Notwithstanding anything to the contrary set forth in this Section
15.3, if any such assignee of Supplier does not, in any material respect,
produce Products of the same quality as produced by Supplier, Distributor shall
have the right, upon 60 days prior notice, to unilaterally terminate its
obligations under Section 4 of this Agreement.
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16. Counterparts.
For 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.
* * * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties have by their duly authorized officers
executed this Agreement as of the date first above written.
SUPPLIER: DISTRIBUTOR:
- -------- -----------
BAXTER HEALTHCARE CORPORATION VWR CORPORATION
By:/s/ David N. Jonas By:/s/ Jerrold B. Harris
-------------------------- ----------------------------
Name: David N. Jonas Name: Jerrold B. Harris
Title: Vice President Title: President and Chief
Strategic Initiatives Executive Officer
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<PAGE>
Exhibit 10(c)
EXECUTION COPY
SERVICES AGREEMENT
by and among
BAXTER HEALTHCARE CORPORATION
and
VWR CORPORATION
September 15, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. Definitions 1
2. Services 3
3. Term 6
4. Consideration 7
5. Performance of Services 9
6. Remittances and Settlement 10
7. Termination of Services 11
8. Indemnity 14
9. Third Party Claims 15
10. Confidentiality 16
11. Suspension/Termination 17
12. Non-Exclusivity 18
13. Notices 18
14. Miscellaneous 19
</TABLE>
LIST OF EXHIBITS
Exhibit A Baxter Operational Regions and Annual Sales
Exhibit B Services
i
<PAGE>
SERVICES AGREEMENT
------------------
THIS SERVICES AGREEMENT ("Agreement") dated as of September 15, 1995
by and between BAXTER HEALTHCARE CORPORATION, a Delaware corporation with its
principal offices at One Baxter Parkway, Deerfield, Illinois 60015 (hereinafter
"Baxter"), and VWR CORPORATION, a Pennsylvania corporation with its principal
offices at 1310 Goshen Parkway, West Chester, Pennsylvania 19380 (hereinafter
"VWR").
RECITALS
--------
I. Baxter, VWR, and EM Laboratories, Incorporated, a New York corporation,
have entered into an Asset Purchase Agreement dated as of May 24, 1995, as
amended on September 15, 1995, pursuant to which Baxter has sold to VWR, and VWR
has purchased from Baxter, certain of the assets and business of Baxter's
"Industrial Distribution Business," as defined in the Asset Purchase Agreement.
II. Baxter and VWR recognize that it is advisable for Baxter and its Affiliates
to continue providing certain administrative and other services to VWR for a
transitional period.
III. This Agreement is a condition to the consummation of the transactions
contemplated by the Asset Purchase Agreement.
AGREEMENT
---------
In consideration of the mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Definitions.
1.1 "Affiliate" shall mean any person, firm or corporation controlling,
controlled by or under direct or indirect common control with a party hereto.
For the purpose of this definition, the term "control" means the power to direct
the management or policies of a party, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
1.2 "Industrial Customers" shall mean customers who purchase the Products
for use in laboratories, production plants, and other facilities in all cases
not involved in the care of human patients or the diagnosis of disease or defect
for the purpose of care of human patients, including, without limitation,
<PAGE>
analytical, research and development laboratories, educational institutions,
environmental testing laboratories, clean room facilities, biotechnology and
pharmaceutical research and production facilities, medical device manufacturers,
electronic and semiconductor manufacturers, and government research facilities.
1.3 "Products" shall mean the products distributed by the Industrial
Distribution Business immediately prior to the date of this Agreement, including
the following types of products:
1.3.1 "Baxter Products" shall mean Products that are manufactured by
Baxter or any of its Affiliates and sold to VWR for resale by VWR to Industrial
Customers pursuant to the VWR Distribution Agreement entered into by the parties
on the date hereof. The inventories of the Baxter Products shall remain the
property of Baxter until such time as a Baxter Product is used to fulfill an
order from an Industrial Customer pursuant to this Agreement. Baxter shall
retain title in such Baxter Product until the time of shipment from Baxter's
shipping point (or the manufacturer's shipping point in the case of a drop
shipment) to the Industrial Customer, at which time such Baxter Product shall be
sold by Baxter to VWR; and
1.3.2 "Distributed Products" shall mean Products manufactured by
third parties that are not Affiliates of Baxter (including, without limitation,
Products manufactured for Baxter or any of its Affiliates which bear the
trademark "BAXTER" or any other trademark of Baxter or any of its Affiliates)
and normally distributed by Baxter or any of its Affiliates to Industrial
Customers. Except as otherwise provided herein, the inventories of such
Distributed Products shall remain the property of Baxter until such time as a
Distributed Product is used to fulfill an order from an Industrial Customer.
Baxter shall retain title in such Distributed Product until the time of shipment
from Baxter's shipping point (or the manufacturer's shipping point in the case
of a drop shipment) to the Industrial Customer at which time such Distributed
Product shall be sold by Baxter to VWR.
1.4 "Region" shall mean any one of the Baxter operational or sales regions
listed on Exhibit A of this Agreement.
1.5 "Territory" shall mean the United States, excluding Puerto Rico and
its other territories and possessions.
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2. Services.
2.1 During the Term, as defined in Section 3 herein, Baxter shall or
shall cause one of more of its Affiliates, to render in the Territory services
to VWR as are described in Exhibit B hereto (the "Services") in connection with
VWR's sales of Products to its Industrial Customers. In addition to the
Services listed on Exhibit B, Baxter shall provide additional services that are
requested by VWR and agreed to in writing by Baxter ("Additional Services").
2.2 Except as otherwise provided for in the Asset Purchase Agreement, VWR
shall not acquire any right, title or interest in any software, systems or other
materials used in the provision of the Services. VWR shall pay the license fees
and other third party charges necessary to enable Baxter to use any software
that Baxter uses during the Term for the benefit of VWR but only to the extent
such fees and charges are attributable to the provision of Services or
Additional Services.
2.3 Notwithstanding anything to the contrary contained herein, including,
without limitation, Exhibit B, Baxter shall not provide legal services, research
and development services or facilities, or insurance or risk management services
anywhere in the Territory. In addition Baxter shall have no responsibility to
arrange for VWR to be added as a named insured on any Baxter insurance policies
or otherwise provide insurance coverage to VWR. Baxter shall not provide
treasury services (including, without limitation, cash management), audit
services (including, without limitation, internal audit), human resources
services (including, without limitation, BEBC administration services), tax
services, personal transportation services (including, without limitation,
access to Baxter's airplanes, cars or trucks), or use of Baxter facilities, in
each case, except to the extent identified in Exhibit B hereto.
2.4 For Industrial Customers that place orders for Products pursuant to
Section 2.6.1. and 2.6.2, Baxter shall make all credit determinations according
to Baxter's then-current standard credit procedures (a copy of the current
procedures have been provided to VWR and updates of such procedures shall be
provided to VWR within a reasonable time of the implementation of the same),
unless otherwise directed by VWR. Notwithstanding anything to the contrary
contained herein, VWR shall bear all risks in connection with all accounts
receivable, and Baxter shall have no responsibility or liability with respect to
the same, except for any non-VWR approved credit extensions in violation of such
standard credit procedures.
2.5 VWR shall: (i) be fully responsible for soliciting orders from
Industrial Customers for the sale of the Products and
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<PAGE>
the determination of resale prices and terms of payment, other than with respect
to credit determinations as provided for in Section 2.4 herein; (ii) be fully
responsible (subject to Baxter's required standard of care set forth in Section
5.1) for any Distributed Products returned or rejected by Industrial Customers
for any reason; and (iii) give Baxter access to and use of all assets acquired
by VWR pursuant to the Asset Purchase Agreement to the extent required to enable
Baxter to provide the Services.
2.6 The following procedures shall be implemented by Baxter and VWR in
connection with the Services:
2.6.1 Baxter shall receive orders from Industrial Customers via EDI
transmission and Baxter's ASAP computer ordering system.
2.6.2 VWR customer service representatives ("CSR's") and telesales
representatives located in Baxter facilities pursuant to this Agreement shall
receive telephone and facsimile orders from Industrial Customers and enter such
orders into Baxter's system in the same manner as placed prior to the date of
this Agreement.
2.6.3 Baxter shall fulfill the orders with the required Products in
the same manner used by Baxter to fulfill similar orders to similar Industrial
Customers prior to the date of this Agreement, including shipments out of stock
of various Baxter facilities and/or direct shipment from third party
manufacturers.
2.6.4 Baxter shall provide invoices to Industrial Customers, using a
Baxter invoice generated by Baxter's billing system, but bearing a reference to
VWR except in the case of certain governmental accounts.
2.6.5 Beginning on the fifth business day after the date hereof, on a
daily basis after performing cash application, Baxter shall remit to VWR by wire
transfer or automated clearing house all payments received from Industrial
Customers (including any sales taxes and freight charges collected by Baxter as
agent for VWR) on account of accounts receivable assigned by Baxter to VWR on
the date hereof and all VWR's accounts receivable based upon sales of Products
made to Industrial Customers under this Agreement after the date hereof. For
the first four business days from the date hereof and the first four days of
each succeeding month, Baxter shall remit to VWR by wire transfer an amount
equal to an estimate of such receipts based on a percentage of the historic
average daily cash collected of accounts receivable from Industrial Customers
assigned by Baxter to VWR on the date hereof. At the end of each month of the
Term,
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<PAGE>
the parties shall calculate the difference between: (a) estimated payments made
by Baxter to VWR during such four day period; and (b) the actual collections
received on account of the accounts receivable specified in the first sentence
of this Section 2.6.5 during such four day period. If such actual collections
are greater than such estimated payments, Baxter shall pay to VWR such
difference within ten days. If such actual collections are less than such
estimated payments, VWR shall pay to Baxter such difference within ten days.
2.6.6 Baxter shall perform cash application services, matching
payments received from Industrial Customers with the appropriate invoices.
2.6.7 Baxter shall base invoices to Industrial Customers on prices
for Products determined by VWR and communicated to Baxter, provided that VWR
shall provide Baxter with at least 30 days notice in writing of any change in
such prices or any new contracts with Industrial Customers. Baxter shall
continue to provide invoices to Industrial Customers having a contract or price
agreement with Baxter (which may be in writing or may only be reflected in
Baxter computer system) prior to the date of this Agreement, at the price
contained in such contract or price agreement, until notified by VWR to change
such price.
2.6.8 On the first working day following the Closing, Baxter shall
provide VWR with a list of Industrial Customers as of August 31, 1995,
classified on an exempt and non-exempt basis with respect to sales taxes.
Within 30 days following the Closing, Baxter shall provide VWR with a list of
Industrial Customers added between September 1, 1995 and the Closing. Baxter
shall continue to make such information available to VWR from time to time upon
VWR's request. Within 90 days after VWR's receipt of the list provided by
Baxter, VWR shall be responsible for obtaining valid exemption or resale
certificates from these Industrial Customers on the basis of such list. VWR
shall also obtain valid exemption or resale certificates for new Industrial
Customers who are added after the Closing Date.
2.6.9 VWR shall provide Baxter with sale for resale certificates with
respect to the sale of Baxter Products and Distributed Products by Baxter to VWR
under Section 1.3.1 and 1.3.2.
2.6.10 Baxter shall provide VWR with a summary of monthly sales by
state and local taxing jurisdiction which shall be classified on an exempt and
non-exempt basis within seven days of month end. VWR shall be responsible for
filing sales tax returns with the appropriate taxing authorities and remitting
to them the taxes remitted by Baxter to VWR pursuant to Section 2.6.5.
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2.6.11 If VWR becomes aware of a change in the exempt or non-exempt
status of an Industrial Customer, VWR shall amend the exemption or resale
certificate to reflect the change. VWR shall notify Baxter, and Baxter shall
reflect the change in its invoicing and reporting systems.
2.6.12 Baxter shall from time to time make available to VWR upon its
request detailed sales journals (which it shall maintain by state and local
taxing jurisdiction) and all copies of all invoices which it has delivered to
Industrial Customers. All invoices issued by Baxter for Industrial Customers
shall, after the expiration or termination of this Agreement, be retained by
Baxter, but shall be stored for audit purposes by Baxter for seven years and,
from time to time, made available to VWR upon its request.
2.6.13 Baxter shall be solely responsible for sales tax deficiencies,
interest, and penalties with respect to sales of Products to Industrial
Customers for the 60-day period following the Closing Date, other than
deficiencies, interest and penalties attributable to VWR's failure properly to
file sales tax returns and remit the sales taxes remitted by Baxter to VWR.
Baxter shall have the right to participate in VWR's sales tax audits and to
cause VWR to file appeals thereof to the extent of Baxter's liability to VWR
hereunder. Beginning after the 60th day following the Closing Date, VWR shall
be solely responsible for sales tax deficiencies, interest and penalties with
respect to sales of Products to Industrial Customers.
2.7 During the first six months of the Term, Baxter shall provide to VWR,
at no charge, Facilities Services consisting of access to certain Baxter
facilities for VWR's sales representatives, customer service representatives and
general office personnel ("VWR Representatives") to the same extent that the
persons employed by Baxter in similar capacities had access to such facilities
immediately prior to the date of this Agreement, and voice mail for the VWR
Representatives using such facilities, the number of such VWR Representatives
not to exceed 580 in the aggregate. If requested by VWR and agreed to by Baxter,
Baxter shall provide to VWR Facilities Services after the first six months of
the Term subject to Section 4.8 herein.
3. Term.
Baxter shall render the Services and the Additional Services during
the term of this Agreement ("Term") which shall commence on the date of this
Agreement and terminate no later than two years thereafter. This Agreement
shall terminate with respect to all of the Services or Additional Services on a
Region by Region basis pursuant to the termination schedule which shall be
provided by VWR within 30 days after the date of this
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Agreement. With respect to any Region except Hayward, VWR must give Baxter 120
days notice in the termination schedule prior to the date of termination of the
Services or Additional Services. It is understood that all Services or
Additional Services in the Hayward Region will terminate in January 1996. VWR
may shorten the period during which Services or Additional Services are provided
by Baxter in any Region by giving Baxter 120 days written notice prior to the
effective date of termination of such Services or Additional Services. VWR may
extend the period during which Services or Additional Services are provided to
any Region beyond the applicable termination date in the termination schedule
provided by VWR by giving Baxter 120 days written notice prior to the date of
termination of the Services or Additional Services, provided that such notice
sets forth the time period of such extension, which in no case shall extend
beyond the Term, unless extended by mutual agreement, and the Services or
Additional Services to be provided.
4. Consideration.
4.1 In consideration of Baxter providing Services to VWR, VWR shall make
monthly payments to Baxter for such Services ("Services Payments") as set forth
herein, provided that VWR shall not be required to make any Services Payments
during the first three months of this Agreement.
4.2 The Services Payments for the 12 month period from the beginning of
the fourth month through the end of the fifteenth month of the Term shall equal
5.5% of the total sales of the Products to Industrial Customers which are
serviced by Baxter pursuant to the terms of this Agreement ("IC Sales") during
such 12 month period, provided that in no event shall such Services Payments be
less than $18,645,000 in the aggregate during such 12 month period (such
$18,645,000 figure is based on $452,000,000 multiplied by 5.5% multiplied by
9/12). Payments due during such 12 month period shall be due and payable within
15 days following the end of each such month. If during any quarter during such
12 month period the difference between: (a) $4,661,250, less (b) the actual IC
Sales made during such quarter multiplied by 5.5% is greater than zero, then,
within 15 days after the end of each such quarter, VWR shall pay to Baxter an
amount equal to such difference.
4.3 If VWR has made payments to Baxter totalling at least $18,645,000
pursuant to Section 4.2 and the difference between: (a) the actual Services
Payments made by VWR during such 12-month period (including any end-of-quarter
payments) pursuant to Section 4.2 exceeds (b) 5.5% multiplied by IC Sales during
such 12-month period, then VWR shall be entitled to a credit ("Credit") equal to
such excess, which Credit shall be applied against Services Payments for
Services provided during each month
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during the three month period from the beginning of the sixteenth month through
the end of the eighteenth month of the Term.
4.4 The Services Payments for each month during the period from the
beginning of the sixteenth month through the end of the eighteenth month of the
Term shall be actual IC Sales multiplied by 5.5%, provided that any Credit shall
be applied against such Services Payments until such Credit is depleted. Such
Services Payment shall be paid within 15 days of the end of each month during
such period.
4.5 The Services Payments for each month during the period from the
beginning of the nineteenth month through the end of the twenty-fourth month of
the Term shall be 5.5% of actual IC Sales during each such month. Such Services
Payments shall be paid within 15 days of the end of each month during such
period.
4.6 Except as expressly provided herein, no other consideration or
reimbursement shall be payable to Baxter for the Services unless the parties
otherwise agree in writing.
4.7 If Baxter renders any Additional Services to VWR pursuant to the
terms of Section 2.1, VWR shall pay to Baxter in addition to the Services
Payments an amount equal to that set forth in any written agreement providing
for such Additional Services (which the parties acknowledge shall be based upon
the variable cost incurred by Baxter in rendering such Additional Services).
Any such payment for Additional Services shall be paid within 15 days of the end
of each month in which such Additional Services have been rendered.
4.8 If Baxter renders any Facilities Services to VWR after the first
six months of the Term pursuant to the terms of Section 2.7, VWR shall, for each
VWR Representative located at a Baxter facility, pay to Baxter in addition to
the Services Payments $192 per each such VWR Representative per month based on
full-time employment. Baxter shall invoice VWR for such Facilities Services and
specify the number of VWR Representatives and their locations broken out by
full-time and part time employees. Any such payment for Facilities Services
shall be paid within 15 days of the end of each month during which such
Facilities Services have been rendered.
4.9 If any payments due hereunder have not been received by Baxter within
15 days after the date on which such payments are due, such overdue amounts
shall bear interest from the applicable due date until the date paid at the
prime rate published by the Wall Street Journal as of such applicable due date.
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4.10 Notwithstanding anything to the contrary contained herein, if,
during any year during the Term, IC Sales in any Region exceed 125% of the 1994
annual sales level for such Region specified in Exhibit A, Baxter shall not be
obligated to provide any Services to any such Region in connection with any IC
Sales in excess of such 125% amount if the provision of such excess Services
would require Baxter to make any capital expansions.
5. Performance of Services.
5.1 Subject to the other provisions of this Section 5, Baxter shall use
reasonable efforts in providing the Services hereunder and shall perform the
Services in a manner consistent with past practice and with the same degree of
care, skill and prudence customarily exercised by Baxter in providing services
similar to the Services to its own operating divisions prior to the date of this
Agreement. Baxter shall stock inventories of the Products at service levels
consistent with those service levels provided by Baxter to the Industrial
Distribution Business prior to the date hereof. Notwithstanding the foregoing
and upon written request to Baxter from VWR specifying VWR's desired inventory
service level for a given Distributed Product in a given Region, during the 120
day period prior to the date upon which Baxter's performance of Services shall
cease for the applicable Region, Baxter shall use reasonable efforts (subject to
Baxter's reasonable business judgment regarding Baxter's continuing business
needs for such Distributed Product) to cooperate with VWR in managing the
inventories to achieve such service levels.
5.2 Baxter shall prepare and deliver monthly sales, cost of goods sold,
accounts receivable and other reports as such reports were prepared by Baxter
for the Industrial Distribution Business immediately prior to the date hereof
(collectively, the "Reports"). Baxter shall from time to time upon advance
notice provide VWR and/or its independent public accountants or principal
financial institutions with full access to all accounting and other records
which were used to produce, or in any way support, the Reports in connection
with VWR's business.
5.3 Baxter and VWR shall cooperate in planning the scope and timing of the
Additional Services in order to minimize or eliminate interference with the
conduct of Baxter's business activities.
5.4 In providing the Services, neither Baxter nor its Affiliates shall be
responsible for the accuracy, completeness or timeliness of any advice or
Service or any return, report, filing or other document which it provides,
prepares or assists in preparing, except to the extent that any inaccuracy,
incompleteness or untimeliness arises from the gross negligence
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or willful misconduct of Baxter or its Affiliates; provided that in no event,
whether as a result of a breach of this Agreement, tort liability or otherwise,
shall Baxter be liable to VWR for any special, indirect, incidental or
consequential damages. Baxter and its Affiliates shall provide Services with
respect to such returns, reports, filings and other documents with the same
timeliness and accuracy as it prepared such returns, reports, filings and other
documents for the Industrial Distribution Business immediately prior to the date
hereof, provided that Baxter acknowledges that the timeliness of the Reports are
essential to VWR's ability to meet its financial reporting requirements
(including those imposed by the federal securities laws).
6. Remittances and Settlement.
6.1 Baxter shall invoice VWR on a daily basis as follows:
6.1.1 2.6% times net IC Sales for the applicable day to cover freight
from Baxter's shipping point(s) (or manufacturer's facility in the case of a
drop shipment) to Industrial Customers in the United States; provided, however,
that Baxter shall credit VWR for any freight collected from Industrial
Customers.
6.1.2 for Baxter Products delivered by Baxter to fulfill Industrial
Customers' orders and invoiced on the applicable day. Such Baxter Products
shall be deemed to have been sold to VWR at the point of shipment to the
Industrial Customer. Baxter shall invoice VWR for such Baxter Products at the
prices then in effect under the terms of the VWR Distribution Agreement.
6.1.3 for Distributed Products delivered by Baxter to fulfill VWR's
Industrial Customer orders and invoiced on the applicable day. Such Distributed
Products shall have been sold to VWR at the time of shipment to Industrial
Customers. Baxter shall invoice VWR for such Distributed Products at
then-current merchandise file costs contained on Baxter's computer system (which
shall include a factor for inbound freight and duty costs) net of applicable
vendor rebates.
6.1.4 VWR shall pay such invoices by wire transfer or via automated
clearing house within 15 days after the date of each such invoice.
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7. Termination of Services.
7.1 Prior to the date upon which Baxter's performance of Services shall
cease for any Region, Baxter and VWR shall formulate a mutually acceptable
transition plan, including, without limitation, VWR's purchase of Distributed
Products from Baxter as provided for herein. As part of such transition plan,
VWR shall purchase from the Baxter facility or facilities that have been
servicing customers in that Region, an inventory of Distributed Products at
Baxter's then-current merchandise file costs (which shall include a factor for
inbound freight and duty costs) which shall include associated excess and/or
no-move Distributed Products (at Baxter's book value), all F.O.B. the Baxter
facility. The book value of any excess and/or no-move Distributed Products shall
be calculated in accordance with generally accepted accounting principles,
including any associated reserves for inventory write-downs, in a manner
consistent with Baxter's standard policies.
VWR shall purchase all of Baxter's inventory of each Distributed
Product that is held by Baxter exclusively for sale to Industrial Customers.
For all other Distributed Products (i.e., those Distributed Products not held
----
exclusively for sale to Industrial Customers), the portion of Baxter's inventory
of each Distributed Product that VWR shall purchase from a given Baxter facility
shall be a fraction ("Fractional Share") of Baxter's total inventory of such
Distributed Product at such Baxter facility as of 120 days prior to the date
upon which Baxter's performance of Services shall cease for the applicable
Region. The Fractional Share shall be calculated as follows: the numerator
shall be the unit sales of such Distributed Product to Industrial Customers in
the applicable Region during the 90 day period beginning 210 days and ending 120
days prior to the date upon which Baxter's performance of Services shall cease
for the applicable Region, and the denominator shall be the total unit sales of
such Distributed Product to all customers in the applicable Region during the 90
day period beginning 210 days and ending 120 days prior to the date upon which
Baxter's performance of Services shall cease for the applicable Region. For
example if the total inventory of a given Product consists of 100 units and the
sales of such Product during the applicable period consisted of 100 units sold
to Industrial Customers and 100 units sold to customers other than Industrial
Customers, the Fractional Share would be 1/2 and the purchased inventory would
be 50 units. The portion of Baxter's inventory of each Distributed Product that
VWR shall be obligated to purchase from a given Baxter facility shall be subject
to any reductions in such inventories pursuant to the terms of Section 5.1 of
this Agreement, and in no event shall such portion exceed the Fractional Share
of the inventory of any given Distributed Product as of 120 days prior to the
date upon which Baxter's performance of Services shall
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cease for the applicable Region. VWR shall pay Baxter the costs for such
Distributed Products within 15 days after the date of termination of Services in
the applicable Region. VWR shall be liable for and shall pay at the time of the
purchase of such Distributed Products all federal, foreign and state sales taxes
and all other sales taxes, duties, documentary stamps, transfer taxes,
registration fees and charges or other like charges properly payable upon and in
connection with the assignment and transfer of such Distributed Products by
Baxter to VWR hereunder. Baxter shall prepare such Distributed Products for
shipment to a VWR location specified by VWR. Pursuant to the implementation of
such transition plan, Baxter shall transfer such Distributed Products as
follows:
7.1.1. Baxter shall provide VWR with a magnetic tape containing the
catalog numbers of such Distributed Products to be purchased;
7.1.2 Baxter shall conduct a physical count of such Distributed
Products to be shipped;
7.1.3 Baxter shall prepare such Distributed Products for shipment to
a specified VWR location pursuant to such transition plan, provided that VWR
shall be solely responsible for all costs associated with such shipment; and
7.1.4 Baxter shall deliver to VWR a detailed invoice (each a "Baxter
Invoice") for such Distributed Products based upon its physical count which
contains prices for each such Distributed Product, which invoice, subject to
Section 7.2. below, shall be final, binding and conclusive on the parties
hereto.
Any adjustments resulting from the physical count (i.e., "ADKS") shall be
provided to VWR within two business days of the reconciliation. VWR shall be
entitled to have its representatives (including its independent auditors)
present during any such physical inventory count.
7.2 VWR, at its own expense, may conduct an audit or review of the
amount set forth on any Baxter invoice, including causing any nationally
recognized firm of independent public accountants designated by VWR to perform
such audit, review or other report. VWR may dispute any Baxter Invoice from
Baxter, but only on the basis that VWR has been invoiced for Distributed
Products at costs other than Baxter's then-current merchandise file costs (or
book value for excess, no-move) or that such Distributed Products are not in new
or saleable condition (except for such no-move). Any such dispute shall be
initiated by written notice delivered to Baxter within 30 days of VWR's receipt
of any such Products. Such notice shall specify each
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disputed item, the amount thereof and the basis on which such dispute is made.
If Baxter and VWR are unable to reach a written resolution of all disputed items
within 20 days after VWR's written notice of dispute, Baxter and VWR shall
submit the items remaining in dispute for resolution to a firm of independent
public accountants having national standing in the United States which is not
then retained by Baxter, VWR or their respective Affiliates, as mutually
selected by VWR and Baxter (the "Neutral Accounting Firm"). In the event that
Baxter and VWR are unable to agree on the Neutral Accounting Firm, then a
nationally recognized "Big Six" accounting firm shall be selected by lot after
eliminating one such firm selected by Baxter and one such firm selected by VWR.
The Neutral Accounting Firm shall, within 30 days after submission to it of the
disputed items, determine and report in writing to the parties upon such
remaining disputed items in accordance with the provisions hereof; and such
report shall be final, binding and conclusive on the parties hereto. The fees
and disbursements of the Neutral Accounting Firm shall be allocated between
Baxter and VWR in the same proportion that the aggregate amount of such
remaining disputed items so submitted to the Neutral Accounting Firm that is
unsuccessfully disputed by each (as finally determined by the Neutral Accounting
Firm) bears to the total amount of such remaining disputed items so submitted.
The Neutral Accounting Firm shall make such determination in its sole
discretion, subject to the terms and conditions of this Agreement; provided,
however, that the amount determined by the Neutral Accounting Firm in respect of
any such remaining disputed item shall not exceed the highest amount claimed by
either of the parties disputing such item, or be less than the lowest amount
claimed by either of the parties disputing such item.
7.3 VWR shall pay each Baxter Invoice, less any disputed amounts
subject to Section 7.2, by wire transfer within 15 days after the date of such
Baxter Invoice.
7.4 Each mutually acceptable transition plan discussed in Section 7.1
shall contain understandings regarding the delivery of all of Baxter's records,
books, and other data relating exclusively to the Products previously serviced
by Baxter at such Region, including all accounts receivable data.
7.5 Upon the expiration or termination of this Agreement, Baxter
shall assign, transfer, convey and deliver to VWR, and VWR shall acquire from
Baxter, all of Baxter's right, title and interest in and to any supplier
agreements pursuant to which, during the calendar year 1994, 80% or more of the
total products purchased by Baxter was sold by Baxter to Industrial Customers as
VWR shall request, plus the agreements with Mallincrodt Chemical, Sartorius
Corporation, Texwipe Company, J.T. Baker Inc. and Berkshire (collectively, the
"Supplier Agreements"). Upon the
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transfer and acquisition of the Supplier Agreements, VWR shall assume and agree
to pay, perform or discharge when due in accordance with their respective terms
all liabilities and obligations of Baxter under the Supplier Agreements to be
performed after the date of expiration or termination of this Agreement, except
to the extent that such liabilities and obligations relate to a breach of a
Supplier Agreement by Baxter prior to the termination or expiration of this
Agreement. During the Term, Baxter shall (a) conduct its business in connection
with the Supplier Agreements only in the ordinary course substantially
consistent with past practice, (b) use reasonable efforts to preserve the
goodwill of the suppliers related to the Supplier Agreements, and (c) administer
the Supplier Agreements in good faith. Baxter shall provide notice to and/or
consult with VWR regarding any material changes or proposed material changes to
the Supplier Agreements.
8. Indemnity.
8.1 VWR agrees to indemnify and hold Baxter and the Baxter Indemnified
Parties (as hereinafter defined) harmless from and against, and in respect of,
any and all damages, claims, losses, demands, suits, losses, fines, penalties
and liabilities ("Losses") asserted against or incurred by, and all expenses
(including all reasonable fees and expenses of counsel, travel costs and other
out-of-pocket costs) incurred in connection with pending or threatened
litigation or other proceedings ("Expenses") by, Baxter or any of the Baxter
Indemnified Parties and which arise out of or relate to the provision of
Services hereunder by Baxter or any of the Baxter Indemnified Parties which
arise out of or relate to any claim, action or proceeding asserted by a third
party to the extent arising specifically out of any matter or thing specifically
constituting a breach by VWR hereunder or any wrongful or negligent act or
omission by VWR (or its employees or agents) in its performance of the terms of
this Agreement. The Baxter Indemnified Parties shall mean and include: (x)
Baxter's Affiliates; and (y) the respective directors, officers, agents and
employees of Baxter and its Affiliates. Expenses shall be reimbursed or advanced
when and as incurred promptly upon submission by Baxter or any Baxter
Indemnified Party of statements to VWR.
8.2 Baxter agrees to indemnify and hold VWR and the VWR Indemnified
Parties (as hereinafter defined) harmless from and against, and in respect of,
any and all damages, claims, losses, demands, suits, losses, fines, penalties
and liabilities ("Losses") asserted against or incurred by, and all expenses
(including all reasonable fees and expenses of counsel, travel costs and other
out-of-pocket costs) incurred in connection with pending or threatened
litigation or other proceedings ("Expenses") by, VWR or any of the VWR
Indemnified Parties and
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which arise out of or relate to the provision of Services hereunder to VWR or
any of the VWR Indemnified Parties which arise out of or relate to any claim,
action or proceeding asserted by a third party to the extent arising
specifically out of any matter or thing specifically constituting a breach by
Baxter hereunder or any wrongful or negligent act or omission by Baxter (or its
employees or agents) in its performance of the terms of this Agreement. The VWR
Indemnified Parties shall mean and include: (x) VWR's Affiliates; and (y) the
respective directors, officers, agents and employees of VWR and its Affiliates.
Expenses shall be reimbursed or advanced when and as incurred promptly upon
submission by VWR or any VWR Indemnified Party of statements to Baxter.
9. Third Party Claims.
If any third party shall make any claim or commence any arbitration
proceeding or suit against any one or more of the Indemnified Persons with
respect to which an Indemnified Person intends to make any claim for
indemnification against VWR under Section 8.1 or against Baxter under Section
8.2, such Indemnified Persons shall promptly give written notice to VWR or
Baxter, as the case may be, of such third party claim, arbitration proceeding or
suit and the following provisions shall apply:
9.1 Subject to Section 9.2, such Indemnified Persons shall have the right
to conduct and control, through counsel of their choosing, the defense of any
third party claim, arbitration proceeding or suit, and such Indemnified Persons
may settle the same; provided that such Indemnified Persons shall give the
indemnifying party advance notice of any proposed settlement. Such Indemnified
Persons shall permit the indemnifying party to participate in the defense of any
such action or suit through counsel chosen by it, provided that the fees and
expenses of such counsel shall be borne by the indemnifying party. Any
settlement with respect to a claim for money damages effected by such
Indemnified Persons after the indemnifying party has notified such Indemnified
Persons in writing of the indemnifying party's disapproval of such settlement,
shall discharge the indemnifying party from liability with respect to the
subject matter thereof under this Agreement, and no claim for indemnification
therefor shall be claimed by such Indemnified Persons under Section 8.1 or
Section 8.2, as the case may be.
9.2 Notwithstanding Section 9.1, if the remedy sought in any claim,
arbitration proceeding or suit referred to in this Section 9 is solely money
damages, the indemnifying party shall have 15 business days after receipt of the
notice referred to above in this Section 9 to notify such Indemnified Persons
that it elects to conduct and control the defense of such claim, proceeding or
suit. If the indemnifying party does not give the
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foregoing notice, such Indemnified Persons shall have the right to defend or
settle such claim, proceeding or suit in the exercise of their exclusive
discretion, and the indemnifying party shall, upon request from any of such
Indemnified Persons, promptly pay to them in accordance with Section 8.1 or
Section 8.2, as the case may be, the amount of any liabilities, damages, losses
and expenses, including reasonable attorney's fees, resulting from such claim,
proceeding or suit. If the indemnifying party gives the foregoing notice, the
indemnifying party shall have the right to undertake, conduct and control,
through counsel of its own choosing and at the sole expense of the indemnifying
party, the conduct and control of the defense and any settlement of such claim,
proceeding or suit, and such Indemnified Persons shall cooperate with the
indemnifying party in connection therewith; provided that: (a) the indemnifying
party shall not thereby permit to exist any lien, encumbrance or other adverse
charge upon any asset of any of such Indemnified Persons; (b) the indemnifying
party shall permit such Indemnified Persons to participate in such defense or
settlement through counsel chosen by such Indemnified Persons, but the fees and
expenses of such counsel shall be borne by such Indemnified Persons except as
provided in clause (c) below; and (c) the indemnifying party shall agree to
reimburse promptly under Section 8.1 or Section 8.2, as the case may be, such
Indemnified Persons for the full amount of any liabilities, damages, losses and
expenses, including reasonable attorneys' fees, resulting from such claim,
proceeding or suit, except in each case for any fees and expenses of counsel for
such Indemnified Persons incurred after the assumption of the conduct and
control of such claim, proceeding or suit by the indemnifying party. So long as
the indemnifying party is contesting any such claim, proceeding or suit in good
faith, such Indemnified Persons shall not pay or settle any such claim,
proceeding or suit; provided, however, that such Indemnified Persons shall have
the right to pay or settle any such claim, proceeding or suit; provided,
further, that in such event such Indemnified Persons shall be deemed to have
waived any right to indemnity therefor by the indemnifying party under Section
8.1 or Section 8.2, as the case may be.
10. Confidentiality.
10.1 Each of Baxter and VWR undertakes to the other, on behalf of itself
and its employees, officers, directors, agents and Affiliates, that it shall
keep confidential and shall not, without the prior written consent of the party
to whom the information relates, disclose to any person, nor use or exploit
commercially for its own purposes, any information obtained relating to the
subject matter or performance of this Agreement; provided, however, that each of
Baxter and VWR may disclose such information: (a) to its Affiliates for any
purposes reasonably incidental to the purposes of this Agreement; (b) to its
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respective advisors for use in connection with rendering advice with respect to
the performance of this Agreement; and (c) as is required to be disclosed by
operation of law, legal process or any stock exchange regulations or any binding
judgment or order, or by any requirement or any competent, federal, provincial,
state, local or foreign court, administrative agency or governmental or
regulatory authority or body. In performing its obligations under this Section
10.1, each of Baxter and VWR shall use all reasonable efforts to ensure that its
employees, officers, directors and agents and Affiliates observe the foregoing
confidentiality obligations.
10.2 Section 10.1 shall not apply to information:
10.2.1 acquired from a third party with the right to divulge the same;
10.2.2 which, prior to or after the date of this Agreement, Baxter
and VWR jointly decided to disclose; or
10.2.3 which is or becomes within the public domain (otherwise than
through the fault of the recipient party).
11. Suspension/Termination.
Baxter may suspend the provision of any Services, Additional Services
or Facilities Services for which payment has not been received within 30 days
following the date on which such payment is due until such payments have been
received by Baxter and any such failure to pay within such 30-day period shall
be considered a material default hereunder, provided that the foregoing shall
not apply to any portion of any invoice that is disputed in good faith by VWR.
Either party shall have the right to terminate this Agreement effective upon
delivery of written notice to the other party if the other party: (a) makes an
assignment for the benefit of creditors, or becomes bankrupt or insolvent, or is
petitioned into bankruptcy, or takes advantage of any federal, provincial or
foreign bankruptcy or insolvency act, or if a receiver or receiver/manager is
appointed for all or any substantial part of its property and business and such
receiver or receiver/manager remains undischarged for a period of 30 days, or if
the corporate existence of the other party is terminated by voluntary or
involuntary dissolution; or (b) materially defaults in the performance of any of
its covenants or obligations contained in this Agreement and such default is not
remedied to the non-defaulting party's reasonable satisfaction within 30 days
after written notice to the defaulting party of such default, or if such default
is not capable of rectification within 30 days, if the defaulting party has not
promptly commenced to rectify the default within such 30 day period, and
thereafter proceeds diligently to rectify same, provided that
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such right of rectification shall not extend the Term as provided in Section 3.
12. Non-Exclusivity.
Nothing in this Agreement shall preclude VWR from obtaining the
Services, in whole or in part, from its own employees or from providers other
than Baxter at any time; provided that VWR shall be responsible for paying to
Baxter Services Payments as provided for herein. Subject to the terms and
conditions of Section 4.11 of the Asset Purchase Agreement, nothing shall
preclude Baxter or any of its Affiliates from providing services comparable to
the Services to any other person or entity at any time.
13. Notices.
Any notice, request, demand or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been given
if delivered or sent by facsimile transmission, upon receipt, or if sent by
registered or certified mail, upon the sooner of the date on which receipt is
acknowledged or the expiration of 3 days after deposit in United States post
office facilities properly addressed with postage prepaid. All notices to a
party shall be sent to the address set forth below or to such other address or
person as such party may designate by notice to each other party hereunder:
To VWR: c/o VWR Corporation
Goshen Corporate Park West
1310 Goshen Parkway
West Chester, Pennsylvania 19380
Facsimile: (610) 436-1760
Attn: President
With a copy to: Drinker Biddle & Reath
1000 Westlakes Drive
Suite 300
Berwyn, Pennsylvania 19312-2409
Facsimile: (610) 993-8585
Attn: Thomas E. Wood
To Baxter: Baxter Healthcare Corporation
One Baxter Parkway
Deerfield, Illinois 60015-4633
Facsimile: (708) 948-4266
Attention: General Counsel
With a copy to: Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
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<PAGE>
Facsimile: (312) 853-7036
Attention: John M. O'Hare
Any notice given hereunder may be given on behalf of any party by its counsel or
other authorized representatives.
14. Miscellaneous.
14.1 This Agreement shall constitute the entire agreement between
Baxter and VWR with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments and writings with respect to such subject
matter.
14.2 This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Illinois 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 Northern District of Illinois or the Eastern District of
Pennsylvania or an Illinois state court sitting in Lake County, Illinois, or any
Commonwealth Court sitting in Chester County, Pennsylvania. The parties hereby
consent to the jurisdiction of such courts.
14.3 This Agreement may not be amended or modified, nor may compliance
with any condition or covenant set forth herein be waived, except by a writing
duly and validly executed by each party hereto, or in the case of a waiver, the
party waiving compliance.
14.4 This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their respective successors and assigns, provided,
however, that neither party shall have the right to transfer or assign its
interest in this Agreement without the prior written consent of the other party,
which consent shall not be unreasonably withheld.
14.4.1 Notwithstanding the foregoing, either party may assign its
rights and obligations, in whole or in part, to any Affiliate
provided that the assigning party guarantees performance by
such Affiliate.
14.4.2 Notwithstanding the foregoing provisions of this Section
14.4, Baxter may assign its rights and obligations under this
Agreement to any corporation or other entity that shall
acquire all or substantially all of Baxter's business and
assets and who shall assume in writing all of Baxter's
obligations hereunder
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<PAGE>
and deliver a signed copy of such assumption instrument to
VWR; provided, further, that upon VWR's receipt of such
assumption instrument, Baxter shall be fully released and
discharged from its obligations under this Agreement.
14.4.3 Notwithstanding the foregoing provisions of this
Section 14.4, to the extent that any corporation or other
entity shall acquire all or substantially all of Baxter's
business and assets relating to any of the Products, Baxter
may assign a corresponding portion of its rights hereunder to
such corporation or entity, provided that any such
corporation or entity shall assume in writing all of Baxter's
obligations hereunder which correspond to the portion of
rights assigned, and shall deliver a signed copy of such
assumption instrument to VWR.
14.5 The terms and provisions of this Agreement are intended solely for
the benefit of Baxter and VWR and their respective Affiliates, successors or
permitted assigns, and it is not the intention of the parties to confer third
party beneficiary rights upon any other person.
14.6 Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall be ineffective to the extent of such prohibition or
unenforceability without affecting, impairing or invalidating the remaining
provisions or the enforceability of this Agreement.
14.7 The failure at any time of either party to require performance by the
other party of any responsibility provided for in this Agreement shall in no way
affect the right to require full performance of any such responsibility at any
time thereafter, nor shall the waiver by either party of a breach of any
provision of this Agreement by the other party constitute a waiver of any
succeeding breach of the same or any other provision nor shall it constitute a
waiver of the responsibility itself.
14.8 Baxter is acting as an independent contractor in connection with
providing the Services and neither party constitutes the other as its agent,
partner, joint venturer, or legal representative or has express or implied
authority to bind the other in any manner whatsoever. All employees and
representatives of Baxter providing the Services to VWR shall be deemed for
purposes of all compensation and employee benefits to be employees of
representatives of Baxter and not employees or
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<PAGE>
representatives of VWR. In performing the Services, such employees and
representatives shall be under the direction, control and supervision of Baxter
(and not of VWR) and Baxter shall have the sole right to exercise all authority
with respect to the employment (including termination of employment), assignment
and compensation of such employees and representatives.
14.9 The obligations of either party to perform under this Agreement shall
be excused during each period of delay caused by matters (not including lack of
funds or other financial causes) such as strikes, supplier delays, shortages of
raw materials, government orders or acts of God, which are reasonably beyond the
control of the party obligated to perform. Any delay occasioned thereby shall
not constitute a default under this Agreement, and the obligations of the
parties shall be suspended during the period of delay so occasioned.
* * * * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties have by their duly authorized officers
executed this Agreement as of the date first above written.
BAXTER HEALTHCARE CORPORATION
By: /s/ David N. Jonas
------------------------------
Name: David N. Jonas
Title: Vice President
Strategic Initiatives
VWR CORPORATION
By: /s/ Jerrold B. Harris
------------------------------
Name: Jerrold B. Harris
Title: President and
Chief Executive Officer
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<PAGE>
Exhibit 10(d)
EXECUTION COPY
SUPPLY AGREEMENT
by and among
BAXTER HEALTHCARE CORPORATION
and
VWR CORPORATION
September 15, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. Definitions 1
2. VWR's Supply Obligation 2
3. Term 2
4. Prices 2
5. Baxter's Duties 4
6. VWR's Duties 4
7. Termination 5
8. Procedures on Expiration or Termination 6
9. Force Majeure 6
10. Third Party Claims 6
11. Miscellaneous Provisions 8
12. Assignment 10
13. Counterparts 11
</TABLE>
LIST OF EXHIBITS
Exhibit 4.1 Variable Overhead Calculation
i
<PAGE>
SUPPLY AGREEMENT
----------------
This SUPPLY AGREEMENT ("Agreement"), dated as of September 15, 1995,
by and among BAXTER HEALTHCARE CORPORATION, a Delaware corporation with its
principal offices at One Baxter Parkway, Deerfield, Illinois 60015 (hereinafter
called "Baxter") and VWR CORPORATION, a Pennsylvania corporation with its
principal office at 1310 Goshen Parkway, West Chester, Pennsylvania 19380
(hereinafter called "VWR").
RECITALS
--------
1. Baxter, VWR, and EM Laboratories, Incorporated, a New York
corporation ("EM"), have entered into an Asset Purchase Agreement dated as of
May 24, 1995, as amended on September 15, 1995, pursuant to which Baxter has
sold to VWR, and VWR has purchased from Baxter, certain of the assets and
business of Baxter's "Industrial Distribution Business," as defined in the Asset
Purchase Agreement.
2. Pursuant to Section 6.5 of the Asset Purchase Agreement, Baxter
and VWR have agreed that VWR will supply to Baxter and its Affiliates certain
equipment and supplies manufactured by third parties and have agreed to execute
this Agreement.
AGREEMENT
---------
In consideration of the Asset Purchase Agreement and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Baxter and VWR agree as
follows:
1. Definitions.
1.1 "Affiliate" shall mean any person, firm or corporation
controlling, controlled by or under direct or indirect common control with a
party hereto. For the purpose of this definition, the term "control" means the
power to direct the management or policies of a party, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
<PAGE>
1.2 "Facilities" shall mean any or all of Baxter's and its
Affiliates' facilities as specified in writing which such initial list shall be
provided within two (2) days after the date hereof.
1.3 "Person" shall mean an individual, corporation, partnership,
limited liability company, unincorporated syndicate, unincorporated
organization, trust, trustee, executor, administrator or other legal
representative, governmental authority or agency, or any group or combination
thereof.
1.4 "Products" shall mean (a) the products and accessories listed in
VWR's catalog from time to time, and (b) any other products and accessories
provided by VWR to Baxter (upon Baxter's request) related to Baxter's research
and development or quality control functions.
1.5 "Term" shall mean the period of time specified in Section 3
hereof, including any and all renewals thereof.
2. VWR's Supply Obligation.
During the Term, as defined herein, VWR shall supply Products to
Facilities for Baxter's and its Affiliates' internal use only and not for
resale. VWR shall supply such Products in amounts and as requested by Baxter
and its Affiliates from time to time at a cost as provided below.
3. Term.
The initial term ("Term") of this Agreement shall begin on the date of
this Agreement and end on September 30, 2000; provided that the Term shall be
automatically renewed for additional and successive periods of one year each,
unless and until such initial or additional Term is terminated as provided in
Section 7 of this Agreement.
4. Prices.
4.1 The price to Baxter and its Affiliates for each Product shall
be the sum of (a) subject to the restrictions contained in the following
sentence, the lesser of file cost or special vendor cost (taking into account
rebates, discounts, allowances, and other adjustments related solely to Baxter's
order for such Product) to VWR (or in the case of EM or EM's affiliates in the
event this Agreement has been assigned pursuant to Section 12.4, local
distributor cost) for such Product; plus (b) subject to adjustment as provided
below, 6.6% of such file cost, special vendor cost or local distributor cost;
plus (c) inbound, outbound, and/or Baxter-related freight costs incurred by VWR
in providing the Product to Baxter or its Affiliates,
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<PAGE>
provided that such direct costs shall not include any of VWR's overhead costs.
VWR shall provide to Baxter at least six months prior written notice of any
increase or decrease of file cost or special vendor cost with respect to any
Product, and such file costs and special vendor costs may not be changed for the
purposes of this agreement on less than such six months notice. The 6.6% charge
in subsection (b) above represents VWR's variable direct overhead costs and is
based upon the calculation set forth in Exhibit 4.1 which is attached hereto and
made a part hereof. Such direct overhead charge shall be subject to review and
adjustment by the parties every six months during the Term based upon changes in
VWR's overhead costs (including, without limitation, cost savings through the
use of electronic data interchange "EDI"). In the event that Baxter shall
utilize EDI for any orders placed hereunder the then applicable direct overhead
charge otherwise payable by Baxter with respect to such order shall be reduced
by 3.2 percentage points. VWR shall rebate to Baxter within 30 days of the end
of each quarter any amounts due Baxter as a result of the utilization of EDI
with respect to orders placed during such quarter.
At least once every six months during the Term, VWR shall provide to
Baxter vendor verification of VWR's price for each of the 250 Products that
Baxter purchases in the highest dollar volume from VWR.
4.2 The prices for the Products sold by VWR to Baxter shall not
include any transportation expenses, customs duties, sales tax, goods and
services tax or any other sales, use, inventory, delivery, value added or like
taxes of any federal, state or local government, however imposed. Baxter shall
be responsible for all such expenses, duties and taxes and shall pay VWR any and
all taxes which VWR is required to collect or pay with respect to the sale to
Baxter, of the Products pursuant to this Agreement.
4.3 VWR shall maintain and keep records of the costs incurred by
VWR in connection with its provision of Products to Baxter and its Affiliates
pursuant to this Agreement. Such records shall be maintained in sufficient
detail to enable such costs to be verified. Upon no less than 5 business days
advance written notice to VWR, VWR's records shall be made available for
inspection by Baxter or any of its Affiliates or any firm of certified public
accountants selected by Baxter or any of its Affiliates, for the purpose of
verifying such costs.
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<PAGE>
5. Baxter's Duties.
During the Term, Baxter shall:
5.1 submit its orders for the Products on its standard purchase
order form, provided that notwithstanding any terms or provisions of such
purchase order, the terms and conditions of this Agreement shall apply to each
such purchase order;
5.2 pay for such orders net 30 days from the date of invoice; and
5.3 shall indemnify and hold harmless VWR, its Affiliates and:
(a) their respective directors, officers, employees, agents and counsel; and (b)
the successors, assigns, heirs and personal representatives of any of the
foregoing (all of the foregoing being collectively referred to in Section 10 as
"Indemnified Persons") with respect to all claims, liabilities, damages, and
expenses, including reasonable attorneys' fees and expenses, arising out of
claims by third parties caused by the breach by Baxter or its Affiliates (or
their employees or other agents) of the terms of this Agreement; provided that
Section 10 shall apply to any claim, arbitration proceeding or suit made or
brought by any third party as to which any Indemnified Person intends to claim
indemnification under this Section 5.3.
6. VWR's Duties.
6.1 VWR shall ship all Products to Baxter and its Affiliates
F.O.B. Origin VWR, Prepaid and Add, to the relevant Facility and by the carrier
designated pursuant to the relevant Purchase Order. Title and risk of loss of
all Products shall pass to Baxter upon VWR's delivery of such Products to the
carrier.
6.2 VWR shall deliver to Baxter Products that have an expiration
date with a minimum shelf life acceptable to Baxter;
6.3 VWR shall adequately package and deliver the Products to the
carrier;
6.4 VWR shall comply (or cause compliance) with all existing and
future laws and regulations applicable to the sale to Baxter of Products
pursuant to this Agreement, including, without limitation, the following:
6.5 give prompt written notice to Baxter if VWR should become
aware of any defect or condition (actual or alleged) which may alter the quality
of the Products in any
-4-
<PAGE>
material respect or may render any of the Products in violation of any
applicable law or regulation, including, without limitation, any violation which
could require any alteration of the specifications of any Product, affect the
sale of any Product, cause revocation of any federal, state or other regulatory
approval with respect to any Product or its sale hereunder or give rise to a
claim against Baxter by any person; and
6.6 Give prompt written notice to Baxter of any and all Products
affected by holds or recalls and, if VWR requests Baxter to return any of such
Products to VWR, promptly reimburse Baxter for the price of such returned
Products paid by Baxter under this Agreement and the variable overhead, freight
and any other direct cost incurred by Baxter in returning such Products to VWR;
6.7 VWR shall assign to Baxter and its Affiliates the benefits of
all third party manufacturers' warranties relating to the Products.
6.8 VWR shall indemnify and hold harmless Baxter, its Affiliates
and: (a) their respective directors, officers, employees, agents and counsel;
and (b) the successors, assigns, heirs and personal representatives of any of
the foregoing (all of the foregoing being collectively referred to in Section 10
as "Indemnified Persons") with respect to all claims, liabilities, damages, and
expenses, including reasonable attorney's fees and expenses, arising out of
claims by third parties caused by the breach by VWR (or its employees or agents)
of the terms of this Agreement; provided that Section 10 shall apply to any
claim, arbitration proceeding or suit made or brought by any third party as to
which any Indemnified Person intends to claim indemnification under this Section
6.6.
7. Termination.
7.1 VWR and Baxter shall each have the right to terminate this
Agreement effective upon delivery of written notice to the other party if the
other party: (a) makes an assignment for the benefit of creditors, or becomes
bankrupt or insolvent, or is petitioned into bankruptcy, or takes advantage of
any state, federal or foreign bankruptcy or insolvency act, or if a receiver or
receiver/manager is appointed for all or any substantial part of its property
and business and such receiver or receiver/manager remains undischarged for a
period of 30 days, or if the corporate existence of the other party is
terminated by voluntary or involuntary dissolution; or (b) defaults in the
performance of any of its covenants or obligations contained in this Agreement
and such default (x) is not remedied to the non-defaulting party's reasonable
satisfaction within 30 days after
-5-
<PAGE>
written notice to the defaulting party of such default, or (y) is not capable of
rectification within 30 days and the defaulting party has not promptly commenced
to rectify the default within such 30 day period and thereafter proceeded
diligently to rectify same. Notwithstanding the foregoing provisions of this
Section 7, VWR may suspend its performance under this Agreement if Baxter has
not made any uncontested payment due under Section 5.2 within 30 days following
the date on which such payment is due until such payments have been received by
VWR, and any such failure to pay within such 30 day period shall be considered a
default under this Agreement.
7.2 In the event that this Agreement is terminated pursuant to
this Section 7, VWR and Baxter shall comply fully with this Agreement until such
termination becomes effective.
8. Procedures on Expiration or Termination.
On the expiration or termination of this Agreement for any reason, VWR
shall continue to honor Baxter's orders for Products placed up to the effective
date of termination and for a period of 60 days thereafter and Baxter shall pay
for such Products on the terms and conditions set forth in this Agreement.
9. Force Majeure.
The obligations of either party to perform under this Agreement shall
be excused during each period of delay caused by matters (not including lack of
funds or other financial causes) such as strikes, supplier delays, shortages of
raw materials, government orders or acts of God, which are reasonably beyond the
control of the party obligated to perform. Any delay occasioned thereby shall
not constitute a default under this Agreement, and the obligations of the
parties shall be suspended during the period of delay so occasioned.
10. Third Party Claims.
If any third party shall make any claim or commence any arbitration
proceeding or suit against any one or more of the Indemnified Persons with
respect to which an Indemnified Person intends to make any claim for
indemnification against Baxter under Section 5.3 or against VWR under Section
6.6, such Indemnified Persons shall promptly give written notice to Baxter or
VWR, as the case may be, of such third party claim, arbitration proceeding or
suit and the following provisions shall apply:
10.1 Subject to Section 10.2, such Indemnified Persons shall have
the right to conduct and control, through counsel of their choosing, the defense
of any third party claim,
-6-
<PAGE>
arbitration proceeding or suit, and such Indemnified Persons may settle the
same; provided that such Indemnified Persons shall give the indemnifying party
advance notice of any proposed settlement. Such Indemnified Persons shall permit
the indemnifying party to participate in the defense of any such action or suit
through counsel chosen by it, provided that the fees and expenses of such
counsel shall be borne by the indemnifying party. Any settlement with respect
to a claim for money damages effected by such Indemnified Persons after the
indemnifying party has notified such Indemnified Persons in writing of the
indemnifying party's disapproval of such settlement, shall discharge the
indemnifying party from liability with respect to the subject matter thereof
under this Agreement, and no claim for indemnification therefor shall be claimed
by such Indemnified Persons under Section 5.3 or Section 6.6, as the case may
be.
10.2 Notwithstanding Section 10.1, if the remedy sought in any
claim, arbitration proceeding or suit referred to in this Section 10 is solely
money damages, the indemnifying party shall have 15 business days after receipt
of the notice referred to above in this Section 10 to notify such Indemnified
Persons that it elects to conduct and control the defense of such claim,
proceeding or suit. If the indemnifying party does not give the foregoing
notice, such Indemnified Persons shall have the right to defend or settle such
claim, proceeding or suit in the exercise of their exclusive discretion, and the
indemnifying party shall, upon request from any of such Indemnified Persons,
promptly pay to them in accordance with Section 5.3 or Section 6.6, as the case
may be, the amount of any liabilities, damages, losses and expenses, including
reasonable attorney's fees, resulting from such claim, proceeding or suit. If
the indemnifying party gives the foregoing notice, the indemnifying party shall
have the right to undertake, conduct and control, through counsel of its own
choosing and at the sole expense of the indemnifying party, the conduct and
control of the defense and any settlement of such claim, proceeding or suit, and
such Indemnified Persons shall cooperate with the indemnifying party in
connection therewith; provided that: (a) the indemnifying party shall not
thereby permit to exist any lien, encumbrance or other adverse charge upon any
asset of any of such Indemnified Persons; (b) the indemnifying party shall
permit such Indemnified Persons to participate in such defense or settlement
through counsel chosen by such Indemnified Persons, but the fees and expenses of
such counsel shall be borne by such Indemnified Persons except as provided in
clause (c) below; and (c) the indemnifying party shall agree to reimburse
promptly under Section 5.3 or Section 6.6, as the case may be, such Indemnified
Persons for the full amount of any liabilities, damages, losses and expenses,
including reasonable attorneys' fees, resulting from such claim, proceeding or
suit, except in each case for any
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<PAGE>
fees and expenses of counsel for such Indemnified Persons incurred after the
assumption of the conduct and control of such claim, proceeding or suit by the
indemnifying party. So long as the indemnifying party is contesting any such
claim, proceeding or suit in good faith, such Indemnified Persons shall not pay
or settle any such claim, proceeding or suit; provided, however, that such
Indemnified Persons shall have the right to pay or settle any such claim,
proceeding or suit; provided, further, that in such event such Indemnified
Persons shall be deemed to have waived any right to indemnity therefor by the
indemnifying party under Section 5.3 or Section 6.6, as the case may be.
11. Miscellaneous Provisions.
11.1 All notices and other communications required under this
Agreement shall be in writing and shall be deemed to have been given if
delivered by hand, or sent by courier or facsimile transmission (provided that
in the case of facsimile transmission, a confirmation copy of the notice shall
be delivered by hand or sent by courier within 2 days of transmission),
addressed:
if to Baxter to:
Baxter Healthcare Corporation
One Baxter Parkway
Deerfield, Illinois 60015
Attention: General Counsel
(facsimile number: (708) 689-4266)
with copies to:
William L. Feather, Esq.
Assistant General Counsel
MPN-02
U.S. Healthcare/Law
Baxter Healthcare Corporation
1450 Waukegan Road
McGaw Park, Illinois 60085
(facsimile number: (708) 689-6452)
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: John M. O'Hare
(facsimile number: (312) 853-7036)
-8-
<PAGE>
if to VWR to:
VWR Corporation
1310 Goshen Parkway
West Chester, Pennsylvania 19380
Attention: President
(facsimile number: (610) 436-1760)
with a copy to:
Drinker Biddle & Reath
1000 Westlakes Drive, Suite 300
Berwyn, Pennsylvania 19312-2409
Attn: Thomas E. Wood
(facsimile number: (610) 993-8585)
until notice of a change is given as provided in this Section 11.1. All notices
given in accordance with this Section 11.1 shall be effective, if delivered by
hand or by courier, at the time of delivery, and, if communicated by facsimile
transmission, at the time of transmission.
11.2 This Agreement is the entire agreement between the parties
hereto with respect to the subject matter hereof, there being no prior written
or oral promises or representations not incorporated herein or therein.
11.3 This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Illinois 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 Northern District of Illinois or the Eastern District of
Pennsylvania or an Illinois state court sitting in Lake County, Illinois, or any
Commonwealth Court sitting in Chester County, Pennsylvania. The parties hereby
consent to the jurisdiction of such courts.
11.4 No amendment or modification of the terms of this
Agreement shall be binding on either party unless reduced to writing and signed
by an authorized officer of the party to be bound. The waiver by either party
of any particular default by the other party shall not affect or impair the
rights of the party so waiving with respect to any subsequent default of the
same or a different kind; nor shall any delay or omission by either party to
exercise any right arising from any default by the other affect or impair any
rights which the non-defaulting party may have with respect to the same or any
future default.
11.5 Each party represents and warrants that the terms of this
Agreement do not violate any existing obligations
-9-
<PAGE>
or contracts of, or any law, rule, regulation, judgment or order binding on,
such party. Each party shall indemnify and hold harmless the other party from
and against any and all liabilities, damages, losses and expenses (including
reasonable attorney's fees) resulting from any third party claim, arbitration
proceeding or suit which is hereafter made or brought against the other party
and which alleges any such violation, all as provided in Section 10 herein with
respect to the indemnification provided in Section 5.3 and Section 6.6.
11.6 Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without affecting, impairing or invalidating the
remaining provisions or the enforceability of this Agreement.
11.7 By virtue of this Agreement, neither party constitutes the
other as its agent, partner, joint venturer, or legal representative and neither
party has express or implied authority to bind the other in any manner
whatsoever.
12. Assignment.
12.1 This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided, however, that neither party shall have the right to transfer or assign
its interest in this Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld.
12.2 Notwithstanding the foregoing provisions of this Section 12,
Baxter may assign its rights and obligations under this Agreement to any
corporation or other entity that shall acquire all or substantially all of
Baxter's business and assets and who shall assume in writing all of Baxter's
obligations hereunder and deliver a signed copy of such assumption instrument to
VWR; provided, further, that upon VWR's receipt of such assumption instrument,
Baxter shall be fully released and discharged from its obligations under this
Agreement.
12.3 Notwithstanding the foregoing provisions of this Section
12, to the extent that any Person shall acquire all or substantially all of
Baxter's business and assets relating to any Facility, Baxter may assign a
corresponding portion of its rights hereunder to such corporation or entity,
provided that any such Person shall assume in writing all of Baxter's
obligations hereunder which correspond to the portion of rights assigned, and
shall deliver a signed copy of such assumption instrument to VWR; provided
further that upon VWR's receipt of such assumption instrument, Baxter shall be
fully released and discharged from
-10-
<PAGE>
all of the obligations under this Agreement that are assumed by such a
corporation or entity.
12.4 Notwithstanding the provisions of Section 12.1, VWR may
assign a portion of its rights and obligations under this Agreement to EM or
EM's Affiliates who shall assume in writing corresponding obligations of VWR
hereunder and deliver a signed copy of such assumption instrument to Baxter;
provided, that (a) VWR shall continue to be liable to Baxter for all of the
obligations of VWR hereunder notwithstanding any such assignment; and (b) the
price to Baxter and its Affiliates for the Products shall be based upon VWR's
costs in accordance with Section 4.
13. Counterparts.
For 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.
* * * * * * *
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<PAGE>
IN WITNESS WHEREOF, the parties have by their duly authorized officers
executed this Agreement as of the date first above written.
BAXTER HEALTHCARE CORPORATION VWR CORPORATION
By:/s/ David N. Jonas By: /s/Jerrold B. Harris
-------------------------- ---------------------------
Name: David N. Jonas Name: Jerrold B. Harris
Title: Vice President Title: President and Chief
Strategic Initiatives Executive Officer
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<PAGE>
EXHIBIT 10(e)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of September 15, 1995, between VWR
Corporation, a Pennsylvania corporation (the "Company") and Jerrold B. Harris
("Mr. Harris").
BACKGROUND
Pursuant to a Common Share and Debenture Purchase Agreement (the
"Securities Purchase Agreement") dated as of May 24, 1995, as amended, between
the Company and EMI Industries, Inc., a New York corporation ("EMI"), EMI has
agreed to purchase additional equity securities of the Company. EMI has
subsequently assigned certain of its rights and obligations under the Securities
Purchase Agreement to its wholly-owned subsidiary, EM Laboratories,
Incorporated, a New York corporation ("EML"). (EMI and EML are collectively
referred to herein as the "Investor.") It is a condition precedent to the
closing of the transactions contemplated by the Securities Purchase Agreement
that the Company and Mr. Harris enter into this Agreement pro viding for the
continued employment of Mr. Harris by the Company and certain other matters, as
provided herein.
Pursuant to the foregoing, the Company desires to continue to employ Mr.
Harris as its Chief Executive Officer, and Mr. Harris desires to continue in the
employment of the Company, on the terms and conditions contained in this
Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and intending, to be legally bound hereby, the
parties hereto agree as follows:
SECTION 1. CAPACITY AND DUTIES
1.1 EMPLOYMENT; ACCEPTANCE OF EMPLOYMENT. The Company hereby employs Mr.
------------------------------------
Harris, and Mr. Harris hereby accepts employment by the Company, for the period
and upon the terms and conditions hereinafter set forth.
1.2 CAPACITY AND DUTIES.
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(a) Mr. Harris shall be employed by the Company generally as its Chief
Executive Officer subject to the supervision of the Board of Directors of the
Company ("the Board"), shall perform such duties and shall have such authority
<PAGE>
consistent with his position as may from time to time be specified by the Board.
Mr. Harris shall report directly to the Board and shall perform his duties for
the Company principally from the Company's executive offices located in West
Chester, Pennsylvania, except for travel incident to the performance of Mr.
Harris's duties hereunder.
(b) Mr. Harris shall devote his full working time, energy, skill and
best efforts to the performance of his duties hereunder, in a manner which will
faithfully and dili gently further the business and interests of the Company,
and shall not be employed by or participate or engage in or be a part of in any
manner the management or operation of any business enterprise other than the
Company without the prior written consent of the Board, which consent may be
withheld in its sole discretion.
SECTION 2. TERM OF EMPLOYMENT
2.1 TERM. The term of Mr. Harris's employment hereunder shall be five
----
years and shall commence on the date hereof.
SECTION 3. COMPENSATION
3.1 BASIC COMPENSATION.
------------------
As compensation for the performance of Mr. Harris's services
hereunder, the Company shall pay to Mr. Harris such annual salary and bonus as
the Compensation Committee of the Board shall determine from time to time at its
own discretion, payable in accordance with the Company's regular payroll
practices.
3.2 INCENTIVE COMPENSATION.
----------------------
In addition to the compensation provided for in Section 3.1, as incentive
for Mr. Harris' performance hereunder, simultaneously with the execution and
delivery of this Agreement, the Company has issued and granted to Mr. Harris
42,566 of the Company's common shares, par value $1.00 per share (the "Grant
Shares") under and pursuant to the terms of the VWR Corporation 1986 Long-Term
Incentive Stock Plan, as amended. The Grant Shares shall be subject to the
following vesting schedule:
(a) 15% of the aggregate number of Grant Shares shall vest on each of
the succeeding anniversary dates of this
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<PAGE>
Agreement through and including the fourth anniversary date of this Agreement;
and
(b) all remaining unvested Grant Shares shall fully vest on the fifth
anniversary date of this Agreement.
3.3 EMPLOYEE BENEFITS. In addition to the compensa tion provided for in
-----------------
Sections 3.1 and 3.2, Mr. Harris shall be entitled during the term of his
employment to participate in such employee benefit plans and benefit programs as
may from time to time be provided by the Company for its other executive
officers.
3.4 VACATION. Mr. Harris shall be entitled to a vacation of up to five
--------
weeks during each calendar year during the term of his employment, during which
time his compensation shall be paid in full.
3.5 EXPENSE REIMBURSEMENT. During the term of his employment, the Company
---------------------
shall reimburse Mr. Harris for all rea sonable expenses incurred by him in
connection with the performance of his duties hereunder in accordance with its
regular reimbursement policies as in effect from time to time and upon receipt
of itemized vouchers therefor or such other supporting information as the
Company may reasonably require.
3.6 AUTOMOBILE. During the term of his employment, the Company shall
----------
provide Mr. Harris with an automobile allowance consistent in nature and amount
with past practice, subject to normal inflationary adjustments.
3.7 OTHER PERQUISITES. During the term of his employment, the Company
-----------------
shall provide Mr. Harris with such other perquisites consistent in nature and
amount with those previously provided to Mr. Harris and such other perquisites
as may from time to time generally be provided to its other executive officers
or approved by the Board in its sole discretion.
SECTION 4. TERMINATION OF EMPLOYMENT
4.1 DEATH OF MR. HARRIS. Mr. Harris's employment hereunder shall
-------------------
immediately terminate upon his death, upon which the Company shall not
thereafter be obligated to make any further payments under Section 3.1 hereof
other than salary and bonus earned through the date of Mr. Harris's death.
4.2 DISABILITY OF MR. HARRIS. If Mr. Harris, in the reasonable opinion of
------------------------
the Board, is or has been unable, for any reason due to his physical, mental or
emotional illness or condition to perform his duties hereunder for a period of
26 consecutive weeks, the Company shall have the right to terminate
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<PAGE>
Mr. Harris's employment upon 90 days' prior written notice to Mr. Harris at any
time during the continuation of such inability, in which event the Company shall
not thereafter be obligated to make any further payments under Section 3.1
hereof other than salary and bonus earned through the date of termination of Mr.
Harris's employment.
4.3 TERMINATION FOR CAUSE. Mr. Harris's employment hereunder shall
---------------------
terminate immediately upon notice that the Company is terminating Mr. Harris for
"cause" (as defined herein), in which event the Company shall not thereafter be
obligated to make any further payments under Section 3.1 hereof other than
amounts (including salary, bonus, expense reimbursements, etc.) accrued as of
the date of termination of Mr. Harris's employment. As used herein, "cause"
shall exclusively mean the following:
(i) fraud, theft or misappropriation or embezzlement of the
Company's funds;
(ii) conviction of any crime involving fraud or
misrepresentation, or of any other crime the effect of which will materially
adversely affect the Company;
(iii) material breach of Mr. Harris's obligations under
this Agreement;
(iv) repeated and consistent failure of Mr. Harris to an
excessive degree as determined by the Board to be present at work during normal
business hours, other than absence due to employee's vacation, or an absence due
to one or more of the disabilities specified in Section 4.2; or
(v) willful violation of any express lawful direction or
any lawful rule or regulation established by the Board.
4.4 TERMINATION WITHOUT CAUSE. The Company in its sole discretion may
-------------------------
terminate Mr. Harris's employment hereunder at any time without cause. In such
event, the Company shall, for the period beginning on the date of such
termination and ending on the fifth Anniversary Date, make monthly payments to
Mr. Harris at an annual rate equal to the greater of (i) the sum of Mr. Harris'
most recent annual salary plus most recent annual bonus or (ii) the average
salary and bonus earned by Mr. Harris during the term of this Agreement. In
addition, effective upon any such termination, Mr. Harris shall become fully
vested in all Grant Shares which were unvested immediately prior to such
termination. Upon making such payments and according such immediate vesting,
the Company shall have no further obligation to Mr. Harris hereunder.
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<PAGE>
SECTION 5. RESTRICTIVE COVENANTS
5.1 CONFIDENTIALITY. (a) Mr. Harris shall not, either during or after
---------------
his employment with the Company, directly or indirectly use, publish or
otherwise disclose or divulge to any third party any trade secret, confidential
or proprietary information of the Company other than as required by law or in
the ordinary course of the Company's business (including, without limitation,
any such information concerning customers, vendors, services, products,
processes, software service codes, pricing policies, business plans or records,
any technical or financial information or data, or any information relating to
the history or prospects of the Company or any of its stockholders).
"Confidential" information includes, without limitation, all unpublished
information and all information and data which is not generally known by the
industry.
(b) Mr. Harris shall not, either during or after his employment with the
Company, directly or indirectly copy, reproduce or remove from the Company's
premises, except in the ordinary course of the Company business, trade secrets,
confidential or proprietary information of the Company (in any medium) or any
the Company documents, files or records (including without limitation any
invoices, customer correspondence, orders, computer records or software, or
mailing, telephone or customer lists). All such documents, files and records,
and all other memoranda, notes, files, records, lists and other documents made,
compiled or otherwise acquired by Mr. Harris in the course of his employment
with the Company are and shall remain the sole property of the Company and all
originals and copies thereof shall be delivered to the Company upon termination
of employment for whatever reason.
5.2 NONCOMPETITION. During the term of Mr. Harris's employment hereunder
--------------
and (a) for a period beginning on the date of termination of Mr. Harris's
employment hereunder for any reason (other than a termination by the Company
pursuant to Section 4.4 hereof) and ending on the later of two (2) years after
the date of this Agreement or two (2) years after any such termination of
employment, or (b) for a period beginning on the date of any termination of Mr.
Harris's employment hereunder pursuant to Section 4.4 hereof and ending two (2)
years after the date of the last monthly payments made to Mr. Harris pursuant to
Section 4.4, Mr. Harris shall not, with the organizations identified or
otherwise described in the last sentence of this Section 5.2, directly or
indirectly: (i) engage anywhere in the distribution or supply of laboratory
equipment, chemicals or supplies to the scientific marketplace in competition
with any product which at any time during the term of such employment has been
sold or distributed by the Company; (ii) be or become a
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<PAGE>
stockholder, partner, owner, officer, director or employee or agent of, or a
consultant to or provide financial or other assistance to, any such
organization; (iii) seek in competition with the business of the Company to
procure orders from or do business with any customer of the Company; (iv)
solicit, or contact with a view to the engagement or employment by, any person
or entity of any person who is an employee of the Company; (v) seek to contract
with or engage (in such a way as to adversely affect or interfere with the
business of the Company) any person or entity who has been contracted with or
engaged to supply or deliver products, goods, materials or services to the
Company; or (vi) engage in or participate in any effort or act to induce any of
the customers, associates, consultants, partners, or employees of the Company or
any of its affiliates to take any action which might be disadvantageous to the
Company or any of its affiliates; provided, however, that nothing herein shall
prohibit the Mr. Harris from owning, as a passive investor, in the aggregate not
more than 2% of the outstanding publicly traded stock of any corporation so
engaged. The duration of the Mr. Harris's covenants set forth in this Section
shall be extended by a period of time equal to the number of days, if any,
during which the Mr. Harris is in violation of the provisions hereof. This
Section 5.3 shall not be applicable in the event the Company terminates Mr.
Harris' employment for any reason other than for Cause, in which event Mr.
Harris shall in no way be restricted from competing with the Company. For
purposes hereof, Mr. Harris shall be deemed to be acting in competition with the
Company if he engages in the activities identified in the first sentence of this
section with Fisher Scientific International Inc., Fisons plc, Sigma-Aldrich
Corporation, Mallinckrodt Chemical Co. or any other distributor or supplier of
laboratory equipment, chemicals or supplies to the scientific marketplace having
annual sales in excess of $50,000,000.
5.3 INJUNCTIVE AND OTHER RELIEF.
---------------------------
(a) Mr. Harris acknowledges and agrees that the covenants contained
herein are fair and reasonable in light of the consideration paid hereunder and
in order to protect the Investor's investment in the Company, and that damages
alone shall not be an adequate remedy for any breach by Mr. Harris of his
covenants contained herein and accordingly expressly agrees that, in addition to
any other remedies which the Company may have, the Company shall be entitled to
injunctive relief in any court of competent jurisdiction for any breach or
threatened breach of any such covenants by Mr. Harris. Nothing contained herein
or in the Securities Purchase Agreement shall prevent or delay the Company from
seeking, in any court of competent jurisdiction, specific performance or other
equitable remedies in the event of any breach or intended breach by Mr. Harris
of any of its obligations hereunder.
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<PAGE>
(b) If any provision hereof is determined to be invalid or
unenforceable by a court of competent jurisdiction by reason of the scope
(duration, geographical or otherwise) of the covenants contained therein, such
scope shall be considered to be reduced to the extent necessary to cure such
invalidity.
SECTION 6. MISCELLANEOUS
6.1 TERMINATION OF AGREEMENT. Upon the execution and delivery of this
------------------------
Agreement, the prior Agreement dated as of March 1, 1986, between the Company
and Mr. Harris attached as Exhibit A hereto shall be terminated and cease to
have any legal effect.
6.2 PRIOR EMPLOYMENT. Mr. Harris represents and warrants that he is not a
----------------
party to any other employment, non-competition or other agreement or restriction
which could interfere with his employment with the Company or his or the
Company's rights and obligations hereunder; and that his acceptance of
employment with the Company and the performance of his duties hereunder will not
breach the provisions of any contract, agreement, or understanding to which he
is party or any duty owed by him to any other person.
6.3 SEVERABILITY. The invalidity or unenforceability of any particular
------------
provision or part of any provision of this Agreement shall not affect the other
provisions or parts hereof.
6.4 ASSIGNMENT. This Agreement shall not be assignable by Mr. Harris, and
----------
shall be assignable by the Company only to any person or entity which may become
a successor in interest (by purchase of assets or stock, or by merger, or
otherwise) to the Company in the business or a portion of the business presently
operated by it. Subject to the foregoing, this Agreement and the rights and
obligations set forth herein shall inure to the benefit of, and be binding upon,
the parties hereto and each of their respective permitted successors, assigns,
heirs, executors and administrators.
6.5 NOTICES. All notices hereunder shall be in writing and shall be
-------
sufficiently given if hand-delivered, sent by documented overnight delivery
service or registered or certi fied mail, postage prepaid, return receipt
requested or by tele gram or telecopy (confirmed by U.S. mail), receipt
acknowledged, addressed as set forth below or to such other person and/or at
such other address as may be furnished in writing by any party hereto to the
other. Any such notice shall be deemed to have been given as of the date
received, in the case of personal delivery, or on the date shown on the receipt
or confirmation therefor, in all other cases. Any and all service of process
and any other notice in any such action, suit or proceeding shall be
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<PAGE>
effective against any party if given as provided in this Agreement; provided
that nothing herein shall be deemed to affect the right of any party to serve
process in any other manner permitted by law.
(a) If to Company:
VWR Corporation
1310 West Goshen Parkway
West Chester, PA 19380
Telephone: (610) 429-2700
Facsimile: (610) 436-1760
With copies to:
DRINKER BIDDLE & REATH
Suite 300
1000 Westlakes Drive
Berwyn, PA 19312
Tel: (610) 993-2211
Fax: (610) 993-8585
Attn: Thomas E. Wood, Esq.
(b) If to Mr. Harris:
706 Haldane Drive
Kennett Square, PA 19348
Telephone: (610) 388-0458
6.6 ENTIRE AGREEMENT AND MODIFICATION. This Agreement constitutes the
---------------------------------
entire agreement between the parties hereto with respect to the matters
contemplated herein and supersedes all prior agreements and understandings with
respect thereto. Any amendment, modification, or waiver of this Agreement shall
not be effective unless in writing. Neither the failure nor any delay on the
part of any party to exercise any right, remedy, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege preclude any other or further exercise of
the same or of any other right, remedy, power, or privilege with respect to any
occurrence be construed as a waiver of any right, remedy, power, or privilege
with respect to any other occurrence.
6.7 GOVERNING LAW. This Agreement is made pursuant to, and shall be
-------------
construed and enforced in accordance with, the internal laws of the Commonwealth
of Pennsylvania (and United States federal law, to the extent applicable),
without giving effect to otherwise applicable principles of conflicts of law.
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<PAGE>
6.8 HEADINGS; COUNTERPARTS. The headings of paragraphs in this Agreement
----------------------
are for convenience only and shall not affect its interpretation. This Agreement
may be executed in two or more counterparts, each of which shall be deemed to be
an original and all of which, when taken together, shall be deemed to constitute
but one and the same Agreement.
6.9 FURTHER ASSURANCES. Each of the parties hereto shall execute such
------------------
further instruments and take such other actions as any other party shall
reasonably request in order to effectuate the purposes of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
VWR CORPORATION
By: /s/ Walter S. Sobon
------------------------------
By: /s/ Jerrold B. Harris
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Jerrold B. Harris
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