UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(x) Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (fee required).
For the fiscal year ended December 31, 1994
-----------------
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (fee required).
For the transition period from
--------------- -----------
Commission file Number 0-14139
-------
VWR Corporation
------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 91-1319190
------------ ----------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1310 Goshen Parkway, West Chester, PA 19380
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (610) 431-1700
--------------
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
Registered
None N/A
------------------- ----------------------------------
Securities registered pursuant to Section 12(g) of the Act:
Common Stock $1.00 Par Value
-------------------------------------------------------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (12) months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES XX NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K ( 229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
As of February 28, 1995 the aggregate market value of the voting stock held by
non-affiliates was approximately $85 million. In calculating this value
registrant has treated as voting stock held by affiliates only the voting
stock held by all of its directors. This is not an admission by the Company
that any or all of its directors are in fact affiliates.
As of February 28, 1995, there were 11,059,468 shares of common stock issued
and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the Company's definitive
Proxy Statement to be filed on or about
March 31, 1995 are incorporated by reference
into Part III, Item 10 (Directors Only),
Item 11, Item 12 and Item 13 of this Form 10-K
PART I.
ITEM I. - BUSINESS
------ --------
VWR Corporation ("VWR," "the Corporation," or "the Company") is one of the
nation's largest suppliers of laboratory equipment, chemicals, and supplies
to the scientific marketplace with sales of $535 million, $509 million, and
$490 million in 1994, 1993 and 1992, respectively. VWR was incorporated in
Delaware on January 3, 1986, in order to complete the Distribution Plan of
Univar Corporation. In 1994 the Company changed its State of Incorporation to
Pennsylvania.
In October 1994, the Company expanded its Canadian operations through the
acquisition of certain assets related to the laboratory supply business of
Canlab, a division of Baxter International for approximately $13.9 million.
In January 1994, the Company formed a joint venture with E. Merck of Germany
and acquired an interest in Bender & Hobein GmbH, a distributor of laboratory
supplies and equipment in Germany.
Principal Customers
-------------------
VWR Corporation and its subsidiaries are not dependent on a single customer
or a few customers, the loss of any one or more of which would have a material
adverse effect on its operations.
Competition
-----------
The Company competes in the industrial, governmental, biomedical, and
educational market for laboratory equipment, chemicals, and supplies with
numerous national and regional distributors. In addition, there are numerous
distributors of specialty lines and manufacturers who sell their product lines
direct. In the opinion of management, the Corporation is the nation's second
largest distributor of laboratory equipment and supplies.
In all of VWR's markets, a combination of quality, price, and service are the
major determining competitive factors. All activities are considered highly
competitive.
Environmental Regulation
------------------------
VWR has been designated by the EPA as a potentially-responsible party in
connection with several sites. Management believes that the Company's alleged
contribution to each of these sites is de minimis and that the potential
financial impact of these matters is not material to the Company's
consolidated financial statements.
Employees
---------
Approximately 1,320 persons were employed by VWR Corporation as of February
28, 1995. Approximately 13% of the Company's employees are represented by
unions. The Company believes its relations with employees are excellent.
Methods of Distribution
-----------------------
Approximately 23% of the Company's employees are full-time outside and inside
sales personnel who provide product information and technical support to our
customers. With continuous reference to the "VWR Catalogue," customers also
place individual orders by telephone with an inside sales representative,
directly with an outside sales representative or by computer. Orders are
shipped from local or central warehouses, depending on the nature of the
product ordered.
Foreign Operations and Export Sales
-----------------------------------
The Company has operations in Canada which serve the country's industrial,
educational, governmental and biomedical markets. See "Foreign and Domestic
Operations" in the Notes to Consolidated Financial Statements in item 8 below.
The Company also exports scientific equipment to 54 countries worldwide, with
primary markets in the Middle East, Central and South America, and the Pacific
Rim.
Raw Materials
-------------
The Company does not manufacture any of its products. Numerous sources of
supply generally exist for all products essential to the business of the
Company.
Patents, Trademarks, and Trade names
-----------------------------------
VWR Corporation and its subsidiaries own several trademarks and trade names,
none of which is considered material to the business as a whole. Some of the
registered and unregistered trademarks and trade names include VWR Scientific,
VWRbrand, VWR IBS, Sargent-Welch and VWR Canlab.
Seasonality
-----------
No material portion of the business of VWR Corporation and its subsidiaries is
regarded as seasonal. However, approximately 50% of sales of the Sargent-
Welch science education business occur in the third quarter of the calendar
year.
Backlog
-------
Backlog is not meaningful because most orders received are for merchandise
held in inventory and available for immediate shipment.
Research and Development
------------------------
VWR Corporation and its subsidiaries do not manage or conduct significant
research activities relating to the development of new products, although the
Company periodically works with customers or suppliers to improve or develop
new uses for existing products. In addition, VWR develops proprietary
computer systems for internal use.
EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------
NAME AGE BUSINESS EXPERIENCE POSITION HELD
LAST FIVE YEARS SINCE
----------------- --- ------------------- -------------
Jerrold B. Harris 52 President and Chief March, 1990
Executive Officer to Present
Executive Vice President 1988 - 1990
and Chief Operating Officer
of Registrant
Walter S. Sobon 46 Vice President Finance and March, 1990
Corporate Secretary to Present
Vice President Finance, 1989 - 1990
VWR Scientific Inc.
Richard H. Serafin* 48 Vice President Information January 1991 to
Systems January 1995
Director of Business 1989 - 1991
Systems Consulting, Arthur
Andersen & Company
Joseph A. Panozzo 57 Senior Vice President November, 1992
to Present
Regional Vice President of 1988 - 1992
Southern Region
Paul J. Nowak 40 Senior Vice President November, 1992
to Present
Vice President and General 1989 - 1992
Manager of Sargent-Welch
Philip B. Hunsucker 56 Senior Vice President Sept., 1994
to Present
Regional Vice President January, 1994
to Aug., 1994
Vice President of Business 1991-1993
Development, Suprex Corporation
Vice President of Business April,1990 to
Development, Pelouze January, 1991
Corporation
Vice President of Corporate January, 1990
Accounts, Fisher Scientific to April, 1990
Richard W. Amstutz 52 Vice President of Operations February 1993
and Logistics to Present
Vice President of Operations,1988 to Jan.,
VWR Scientific Inc. 1993
* Resigned as corporate officer effective January 1995
ITEM 2 - PROPERTIES
-------------------
VWR Corporation owns and leases office and warehouse space throughout the
United States and Canada for wholesale distribution of scientific equipment
and supplies as follows:
Batavia, Illinois Owned
Bridgeport, New Jersey Owned
Buffalo Grove, Illinois Owned
Cerritos, California Leased
San Francisco, California Leased
Houston, Texas Leased
Marietta, Georgia Leased
Morrisville, North Carolina Leased
Catano, Puerto Rico Leased
Mississauga, Ontario, Canada Leased
Edmonton, Alberta, Canada Leased
The Company leases office space in West Chester, Pennsylvania, for executive,
financial, information systems, marketing, and other administrative
activities.
The Company also leases twenty-two smaller facilities throughout the United
States and one smaller facility in Canada which support the sales and
warehouse functions. All facilities have been designed to serve the Company's
purpose (generic office and warehouse functions) and are sufficient for its
current operations.
ITEM 3. - LEGAL PROCEEDINGS
------ -----------------
The Corporation is involved in various environmental, contractual, warranty,
and public liability cases and claims, which are considered normal to the
Corporation's business.
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
------ ---------------------------------------------------
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 1994.
PART II.
--------
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
------------------------------------------------------------------------
VWR Corporation Common Shares, $1.00 par value, are traded on the NASDAQ
National Market System under the VWRX symbol. On February 28, 1995, there
were approximately 6,000 shareholders represented by 1,754 holders of record.
The market prices of the Corporation's common shares during the years ended
December 31, 1994, and 1993 are set forth below. The prices reflect bid
prices as reported by NASDAQ for the Company.
Year Ended Year Ended
VWR Corporation Common Stock December 31, 1994 December 31, 1993
---------------------------- ----------------- -----------------
Quarter High Low High Low
------- ---- --- ---- ---
First $12.13 $ 9.75 $17.00 $13.25
Second 12.25 9.63 16.00 11.75
Third 11.75 6.50 12.75 11.25
Fourth 12.00 7.00 13.75 12.00
The Corporation declared quarterly dividends of $0.10 per share in April,
August, and October and $.04 per share in December for the year ended December
31, 1994. A quarterly dividend of $.10 per share was declared for each
quarter during the fiscal year ended December 31, 1993. The Corporation's
long-term debt agreements provide, among other terms, minimum limitations on
working capital, tangible net worth, the current ratio, and the debt-to-equity
ratio which may restrict the Corporation's ability to declare or pay
dividends. Approximately $1.8 million of retained earnings was available to
pay dividends at December 31, 1994.
ITEM 6. - SELECTED FINANCIAL DATA
------ -----------------------
The following table of selected financial data should be read in conjunction
with the consolidated financial statements and notes thereto included
elsewhere herein.
For the Years Ended December 31
-----------------------------------------------
1994 1993* 1992 1991 1990
---- ---- ---- ---- ----
Operations
(Thousand of dollars)
Sales $535,179 $509,235 $490,168 $440,983 $428,568
Gross margin 113,198 116,274 114,431 104,924 102,823
Income from
continuing operations
before cumulative effect
of accounting change 2,053 3,890 9,430 7,743 6,970
Loss from
companies distributed (269)
Cumulative effect of
accounting change (1,400)
Net income $ 2,053 $ 2,490 $ 9,430 $ 7,743 $ 6,701
-----------------------------------------------------------------------------
Per share Data**
Dividends $0.34 $0.40 $0.40 $0.40 $0.40
Book value for
continuing operations 3.62 3.68 3.80 3.34 3.02
Income from
continuing operations
before cumulative effect
of accounting change .18 .35 0.85 0.71 0.66
Loss from
companies distributed (0.03)
Cumulative effect
of accounting change (.13)
-----------------------------------------------------
Net income per share $0.18 $0.22 $0.85 $0.71 $0.63
For the Years Ended December 31
-----------------------------------------------
1994 1993* 1992 1991 1990
---- ---- ---- ---- ----
Financial Position
(Continuing operations only,
thousands of dollars)
Working capital $ 75,120 $ 65,197 $ 57,881 $ 52,928 $ 58,991
Property and Equipment-net 38,259 41,562 33,608 32,662 33,320
Total assets 173,375 148,777 136,093 126,896 132,876
Short-term debt 2,250 150 218 272 944
Long-term debt 79,170 61,757 47,553 46,747 57,333
Shareholders' equity 40,168 41,057 42,257 36,832 32,847
Total invested capital 121,588 102,964 90,028 83,851 91,124
------------------------------------------------------------------------------
Operating & Financial Statistics
(Continuing Operations Only)
Gross margin to sales 21.2% 22.8% 23.35% 23.79% 23.99%
Income from Continuing
Operations to sales .38% .76% 1.92% 1.76% 1.63%
Current ratio 2.67 2.80 2.46 2.42 2.60
Return on Average
Shareholders' Equity 5.06% 5.98% 23.85% 22.22% 22.21%
------------------------------------------------------------------------------
* Results include restructuring and other charges of $3.3 million pre-tax
($1.9 million net of tax).
** All share and per share data reflect a two-for-one stock split effective
May 9, 1992.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
-----------------------------------------------------------------------
Results of Operations
---------------------
Sales
-----
1994 Increase 1993 Increase 1992
----------------------------------------------------------------------
$535.2 5.1% $509.2 3.9% $490.2
The sales increase in 1994 was due to growth in all areas of our business.
The acquisition of Canlab, the Toronto-based distribution division of Baxter
International, in the fourth quarter of 1994 accounted for approximately 20%
of the sales growth for the year. During the second half of 1994 our Canadian
operations showed strong sales growth, improving margins and operating
results.
In 1993 sales increased primarily due to strong growth rates in our inter-
national export, high school science education (Sargent-Welch division)
businesses and the effects of the acquisition of Johns Scientific and the
distribution agreement with BDH Ltd. in Canada. Growth in Canada was less
than expected. Combining the operations and systems of the three companies
proved to be a more complex task than anticipated and we experienced higher
costs. In addition, sales of our principal U.S. operating unit (VWR
Scientific) lagged behind the market and we missed our internal target.
Gross Margin
------------
1994 Decrease 1993 Increase 1992
--------------------------------------------------------------------
Margin $113.2 (2.7%) $116.3 1.7% $114.4
Percent
of Sales 21.2% 22.8% 23.3%
Over the three-year period, gross margin as a percent of sales declined
primarily as a result of continued competitive price pressures and customer
mix.
Operating Expenses before Restructuring and Other Charges in 1993
----------------------------------------------------------------------
1994 Increase 1993 Increase 1992
----------------------------------------------------------------------
Expenses $105.0 3.2% $101.7 6.7% $95.3
Percent
of Sales 19.6% 20.0% 19.4%
In 1994 operating expenses grew at a rate lower than sales growth.
Approximately 28% of the increase in operating expenses is the result of the
acquisition of Canlab in the fourth quarter of 1994.
In 1993 the increase in operating expenses before restructuring and other
charges is primarily due to higher personnel costs and transition costs
associated with the acquisition of Johns Scientific and the distribution
agreement with BDH, Ltd., and our investment in a new direct marketing effort.
Excluding the impact from Canadian acquisitions and direct marketing,
operating expenses grew approximately 1.4%.
Restructuring and Other Charges
-------------------------------
In December 1994, the Company made the decision to consolidate certain sales
offices and functions. As a result, the Company will incur approximately $2
million in charges which are primarily for severance and other personnel-
related costs. It is expected that the consolidation will be completed by the
end of 1995 and will result in annualized cost savings of approximately
$3 million. The cost of the consolidation effort will be accounted for in
accordance with the new guidance set forth in FASB EITF Issue 94-3 "Accounting
for Restructuring Charges." Under EITF 94-3, the costs will be recognized
primarily when they are incurred throughout 1995.
In the fourth quarter of 1993, the Company made the decision to refocus
certain information systems efforts into customer service systems and to take
actions that would reduce operating expenses. As a result of this effort, the
Company recorded a $3.3 million charge which included non-cash charges of $1.3
million (primarily for software development costs that did not have continuing
value) and $2 million related to the consolidation of functions and facilities
which consisted primarily of severance and other personnel-related costs. In
1994 the Company completed the consolidation of certain administrative
functions which was provided for in the fourth quarter of 1993 and has
expended the $2 million of cost accrued at December 31, 1993, which was
reflected in current liabilities.
At December 31, 1993 it was anticipated that the impact of the consolidation
of certain functions and the reduction of expenses would result in annualized
cost savings of approximately $2 million, beginning in the first-half of 1994.
Actual cost savings for fiscal 1994 were approximately $1.2 million. Planned
investments in sales and marketing have offset those savings in 1994.
Interest Expense and Other
--------------------------
1994 Increase 1993 Increase 1992
---------------------------------------------------------------------
Interest and Other $5.1 8.5% $4.7 17.5% $4.0
Percent
of Sales 1.0% .9% .8%
In 1994 interest expense and other increased primarily due to increased
borrowings for the acquisition of Canlab, partially offset by replacing
expired interest rate collars with fixed rate interest swaps. Foreign currency
transaction losses accounted for approximately $.2 million of the increase.
In 1993 interest expense and other increased due to increased borrowing levels
which occurred primarily for the purchase of a new warehouse facility for the
Sargent-Welch division, system enhancements, and the 1992 acquisition of Johns
Scientific.
Income Taxes
------------
1994 Decrease 1993 Decrease 1992
--------------------------------------------------------------------
Taxes $1.0 (63.0%) $2.7 (52.6)% $5.7
Percent
of Sales .2 .5% 1.2%
Effective
tax rate 32.0% 40.6% 37.5%
The income taxes footnote to the financial statements describes the difference
between the statutory and effective income tax rates. The lower effective tax
rate in 1994 reflects the recognition of the benefits of a portion of the
Canadian net operating loss carrforwards and lower state taxes. Management
expects that the realization of the deferred tax assets related to the
Canadian net operating losses will result from improved margins and
elimination of duplicate personnel and facility cost, coupled with the
acquisition of Canlab in late 1994. The higher effective tax rate in 1993
reflects the carryforward to future years of Canadian tax benefits not
recognized in 1993.
Income Before Cumulative Effect of Accounting Change and Per Share Data
-----------------------------------------------------------------------
1994 Decrease 1993 Decrease 1992
--------------------------------------------------------------------
Income $2.1 (46.2)% $3.9 (58.5)% $9.4
Percent
of Sales .4% .8% 1.9%
Per Share $ .18 $ .35 $ .85
In 1994, the decrease in income before cumulative effect of accounting change
is primarily due to lower margins.
In 1993, in addition to the impact of the restructuring and other charges,
which were $3.3 million pre-tax ($1.9 million net of tax or $.18 per share),
income before cumulative effect of accounting change decreased primarily due
to decreased operating income from lower sales and margins, and higher
operating expenses along with higher interest costs.
Financial Condition and Liquidity
---------------------------------
The ratio of debt to equity over the past four years is as follows:
1994 1993 1992 1991
--------------------------------------------------------------
2.0 1.5 1.1 1.3
The ratio of operating income, plus depreciation and amortization, to interest
expense over the past four years is as follows:
1994 1993 1992 1991
--------------------------------------------------------------
3.8 4.5 7.1 5.8
VWR continues to maintain a liquid financial position. VWR's current ratio
was 2.7 at December 31, 1994 and accounts receivable and inventory accounted
for 66% of total assets. The increase in accounts receivable is due to
transition issues related to the consolidation of the Company's credit
department and higher sales growth in the fourth quarter of 1994 compared to
the fourth quarter of 1993. The increase in inventory and accounts payable is
primarily due to various marketing programs, and to supporting new supplier
partnerships with several customers. For the year ended December 31, 1994
cash flow from operations of $5.1 million and debt borrowings of $19.5 million
were used to finance investments in property and equipment of $2.9 million,
the Canlab acquisition of $13.9 million, the joint venture investment of $2.9
million and to pay dividends of $4.4 million. Sufficient credit availability
existed at December 31, 1994 to provide for the amounts of bank checks
outstanding less cash in bank of $1.4 million. Cash requirements reach a low
toward the end of each calendar year due to the natural business cycle.
On October 27, 1994 the Company replaced its previously unsecured revolving
credit facility with a dual-currency secured revolving credit and term loan
agreement, expiring in 1997, with four banks which provides for committed
facilities of $80 million subject to the maintenance of certain levels of
accounts receivable and inventory, and a $20 million five-year loan due in
varying installments beginning December 31, 1994. The facility provides for
the ability to borrow Canadian dollars in an amount up to $16 million in U.S.
dollars. Canadian borrowings were used to finance the acquisition of Canlab.
Interest on borrowings is at variable short-term interest rates.
To reduce the impact of changes in interest rates on floating rate long-term
debt, the Company uses a combination of interest rate swaps, and collars. The
notional amounts of the interest rate collars and swaps are based upon
expected actual debt levels during a five-year period. The Company provides
protection to meet actual exposures and does not speculate in derivatives.
The Company's interest rate collar effectively establishes a minimum and
maximum rate on up to $30 million of credit, and expires in 1996. The Company
also has interest rate swap agreements which change interest rate exposure on
$10 million of floating rate debt to a fixed rate of 4.86% through February
1996, and on $30 million at a fixed rate of 6.38% from February 1996 to
February 1999. The Company is exposed to credit loss in the event of
nonperformance by the other parties to the interest rate swap agreements.
However, the Company does not anticipate nonperformance by the counterparties.
Due to the increase in debt levels from the Canadian acquisition, the board of
directors made a decision to reduce the company's quarterly dividend, declared
on December 16, 1994 to $.04 per share from the previous $ .10 per share.
On February 27, 1995, the Company and EM Industries, Incorporated ("EM") (an
affiliate of E. Merck, Darmstadt, Germany) entered into an agreement that
calls for EM to invest $20 million in the Company for common shares
(calculated at a price per share of $11) and a three-year warrant to purchase
an additional $10 million of common shares at $11 per share, subject to
regulatory approvals and other customary conditions. Assuming exercise of the
warrant, EM would own approximately 20% of the common stock of the Company.
EM has also agreed to a four-year "standstill" agreement, which limits its
ability to increase its equity interest in the Company during the four years.
After the four-year period, without prior approval of the Board of Directors
of the Company, EM would be permitted to acquire additional equity in the
Company only by offering to acquire all of the outstanding shares of the
Company. The standstill agreement also grants EM certain registration rights.
The Company has also agreed to elect two representatives of EM to its Board of
Directors. In addition, the Companies have agreed to enter into new
distribution agreements encompassing the U.S. and Canadian markets.
The agreements have been unanimously approved by the Company's Board of
Directors and do not require shareholder approval. The expected proceeds of
approximately $20 million from the issuance of the shares under the share
purchase agreement are expected to be used to repay debt.
VWR has been designated by the EPA as a potentially responsible party for
various sites. Management believes that any required expenditures would be
immaterial to the Company's consolidated financial statements.
As of December 31, 1994 the estimated cost for capital improvement projects is
expected to range between $4 and $5 million in 1995 related primarily to
continued investments in new computer systems and equipment and warehouse
equipment.
Operating Income Return on Average Invested Capital
-----------------------------------------------------
1994 1993 1992 1991
---------------------------------------------------------------------
7.3% 11.7% 22.0% 19.0%
1993 before
restructuring
charges 15.1%
Operating Income to Sales
-------------------------
1994 1993 1992 1991
---------------------------------------------------------------------
1.5% 2.2% 3.9% 3.8%
1993 before
restructuring
charges 2.9%
Average Invested Capital to Sales
---------------------------------
1994 1993 1992 1991
---------------------------------------------------------------------
21.0% 18.9% 17.7% 19.8%
Days Sales in Accounts Receivable
---------------------------------
1994* 1993 1992 1991
---------------------------------------------------------------------
45.7 42.6 41.5 42.1
Inventory Turnover (Before LIFO)
--------------------------------
1994* 1993 1992 1991
---------------------------------------------------------------------
6.7 6.9 6.4 6.0
*Excludes the effect of the Canlab acquisition
ITEM 8. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------ -------------------------------------------
VWR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended December 31,
1994 1993 1992
-------------------------------------------------------------------------------
(Thousands of dollars, except per share data)
Sales $535,179 $509,235 $490,168
Cost of sales 421,981 392,961 375,737
------- ------- -------
Gross margin 113,198 116,274 114,431
Operating expenses 104,124 101,713 95,322
Canlab transition expenses 916
Restructuring and other
charges 3,300
------- ------- -------
Operating income 8,158 11,261 19,109
Interest expense and other 5,137 4,708 4,021
------- ------- -------
Income before income taxes
and cumulative effect of
accounting change 3,021 6,553 15,088
Income taxes 968 2,663 5,658
------- ------- -------
Income before cumulative effect
of accounting change 2,053 3,890 9,430
Cumulative effect of change in
accounting for postretirement
benefits, net of income tax
benefit of $860 (1,400)
------- ------- -------
Net Income $ 2,053 $ 2,490 $ 9,430
======= ======= =======
Earnings (Loss) Per Share:
Income before cumulative effect
of accounting change $ 0.18 $ 0.35 $ 0.85
Cumulative effect of accounting
change (0.13)
------- ------- -------
Net Income $ 0.18 $ 0.22 $ 0.85
======= ======= =======
Weighted average number of common
shares outstanding (thousands) 11,128 11,153 11,128
See Notes to Consolidated Financial Statements.
VWR CORPORATION
CONSOLIDATED BALANCE SHEETS
(Thousands of dollars,
except share data)
December 31,
ASSETS 1994 1993
-------------------------------------------------------------------------------
Current Assets:
Receivables--
Trade receivables,
less reserves of $619 and $259 $70,777 $60,272
Other receivables 2,753 2,489
Inventories 40,091 30,243
Other 6,378 8,484
------- --------
Total Current Assets 119,999 101,488
Property and Equipment--net 38,259 41,562
Other Assets 15,117 5,727
------- --------
$173,375 $148,777
======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
-------------------------------------------------------------------------------
Current Liabilities:
Bank checks outstanding, less cash in bank $ 1,398 $ 1,062
Accounts payable 35,783 26,743
Accrued liabilities 5,448 8,336
Current portion of long-term debt 2,250 150
------- -------
Total Current Liabilities 44,879 36,291
Long-Term Debt 79,170 61,757
Deferred Income Taxes and Other 9,158 9,672
Shareholders' Equity:
Preferred stock, $1 par value, 1,000,000
shares authorized, none issued
Common stock, $1 par value, 30,000,000
shares authorized, 11,316,592 issued 11,316 11,316
(Thousands of dollars, December 31,
except share data) 1994 1993
---- ----
Additional paid-in capital $ 29,269 $ 29,137
Retained earnings 4,941 6,651
Treasury shares at cost, 250,225
and 293,613 shares (2,463) (2,882)
Unamortized ESOP contribution (1,786) (2,057)
Unamortized restricted stock awards (485) (541)
Cumulative translation adjustment (624) (567)
-------- --------
Total Shareholders' Equity 40,168 41,057
-------- --------
$173,375 $148,777
======== ========
See Notes to Consolidated Financial Statements.
VWR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
1994 1993 1992
-------------------------------------------------------------------------------
(Thousands of dollars)
OPERATING ACTIVITIES
Net Income $ 2,053 $ 2,490 $ 9,430
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and amortization 9,791 9,203 8,432
Cumulative effect of
accounting change 1,400
Change in assets and
liabilities, net of effect
of businesses acquired:
Receivables, net (7,359) (4,123) (3,217)
Inventories (4,459) 2,782 926
Other current assets (1,625) (5,914) (1,462)
Accounts payable 9,040 (750) 4,834
Accrued liabilities (2,013) 835 197
Deferred income taxes
and other (330) 495 (36)
------- ------- -------
Cash Provided by
Operating Activities 5,098 6,418 19,104
------- ------- -------
INVESTING ACTIVITIES
Additions to property and
equipment, net (2,922) (13,402) (5,184)
Acquisition of businesses
net of $1,600 note
payable in 1992 (13,939) (5,837)
Investment in joint venture (2,881)
Net additions to other assets (909) (1,854) (931)
-------- -------- --------
Cash Used by
Investing Activities $(20,651) $(15,256) $(11,952)
-------- -------- --------
Year Ended December 31,
1994 1993 1992
-------------------------------------------------------------------------------
(Thousands of dollars)
FINANCING ACTIVITIES
Proceeds from long-term debt $169,243 $228,983 $136,493
Repayment of long-term debt (149,730) (214,847) (137,341)
Net change in bank checks
outstanding 336 (741) (1,618)
Cash dividends (4,419) (4,395) (4,383)
Purchase of treasury shares (286)
Proceeds from exercise of
stock options 135 88 249
Other (12) (250) (266)
------- ------- -------
Cash Provided (Used) by
Financing Activities 15,553 8,838 (7,152)
------- ------- -------
Net Change in Cash 0 0 0
Cash at beginning of year 0 0 0
------- ------- -------
Cash at end of year $ 0 $ 0 $ 0
======= ======= =======
Supplemental disclosures of
cash flow information:
Cash paid (received) during the
year for:
Interest (net of
capitalized interest) $ 4,568 $ 4,128 $ 3,493
Income taxes (254) 4,568 4,350
See Notes to Consolidated Financial Statements.
VWR CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Thousands of dollars, Unamortized
except per share data) Restricted
Stock,
Common Unamortized
Stock Additional ESOP
$1 Par Paid-in Retained Treasury Contribution,
Value Capital Earnings Shares and Other
----------------------------------------------------------------------------
Balance
December 31, 1991 $5,658 $34,451 $3,697 $(3,882) $(3,092)
Net income 9,430
Two-for-one stock split 5,658 (5,658)
Cash dividends
($.40 per share) (4,383)
Allocation of shares to
ESOP participants 235
Restricted stock awards -
7,580 shares 23 74 (97)
Forfeiture of restricted
stock - 2,173 shares (26) 26
Amortization of restricted
stock 279
Grant of treasury shares -
14,482 shares 44 141
Acquisition of treasury
stock - 21,756 shares (305)
Exercise of stock options (66) (183) 507
Foreign currency translation
adjustment (274)
Balance ------ ------ ----- ----- ------
December 31, 1992 $11,316 $28,794 $8,561 $(3,491) $(2,923)
------ ------ ----- ----- ------
(Thousands of dollars, Unamortized
except per share data) Restricted
Stock,
Common Unamortized
Stock Additional ESOP
$1 Par Paid-in Retained Treasury Contribution,
Value Capital Earnings Shares and Other
-------------------------------------------------------------------------------
Net income $2,490
Cash dividends
($.40 per share) (4,400)
Allocation of shares to
ESOP participants $ 417
Restricted stock awards
45,219 shares $ 222 $ 439 (661)
Amortization of restricted
stock 290
Grant of treasury shares-
4,478 shares 28 43
Acquisition of treasury
stock - 1,783 shares (22)
Exercise of stock options (61) 149
Tax benefit on ESOP divi-
dends and restricted stock 154
Foreign currency transla-
tion adjustment (288)
Balance ------- ------- ------ ------- -------
December 31, 1993 $11,316 $29,137 $6,651 $(2,882) $(3,165)
------- ------- ------ ------- -------
(Thousands of dollars, Unamortized
except per share data) Restricted
Stock,
Common Unamortized
Stock Additional ESOP
$1 Par Paid-in Retained Treasury Contribution,
Value Capital Earnings Shares and Other
-------------------------------------------------------------------------------
Net income $2,053
Cash dividends
($.34 per share) (3,763)
Allocation of shares to
ESOP participants $271
Restricted stock awards
21,816 shares $28 $211 (239)
Amortization of restricted
stock 295
Exercise of stock options (79) 208
Tax benefit on ESOP divi-
dends and restricted stock 183
Foreign currency transla-
tion adjustment (57)
Balance ------- ------- ------ -------- --------
December 31, 1994 $11,316 $29,269 $4,941 $(2,463) $(2,895)
======= ======= ====== ======== ========
See Notes to Consolidated Financial Statements.
VWR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Principles of Consolidation
--------------------
The accompanying consolidated financial statements include the accounts of VWR
Corporation and all of its subsidiaries (the Company). All significant
intercompany accounts and transactions have been eliminated.
Capitalization, Depreciation and Amortization
---------------------------------------
Land, buildings, and equipment are recorded at cost. Depreciation is com-
puted using the straight-line method for financial reporting purposes and,
generally, accelerated methods for income tax purposes. Acquisition and
development costs for significant business systems and related software for
internal use are capitalized and amortized over their estimated useful lives
of seven years. The Company capitalizes the costs of developing and producing
catalogs, which are used by customers for ordering products. Such costs are
amortized over the period of use, generally two years. Goodwill is amortized
over periods of 15 and 40 years.
Income Taxes
------------
In 1993, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 109 "Accounting for Income Taxes," which supersedes SFAS No. 96
previously followed by the Company. The adoption of SFAS 109 did not have a
material effect on the Company's financial position or results of operations.
Postretirement Benefits
-----------------------
In 1993, the Company adopted SFAS No. 106 "Accounting for Postretirement
Benefits Other Than Pensions." This Statement requires the Company to accrue
the cost of retiree medical expenses over the period earned by the
participants, which is a change from the Company's prior practice of recording
these costs when incurred.
Earnings Per Share and 1992 Stock Split
---------------------------------------
Earnings per share are based on the weighted average number of shares and
dilutive common share equivalents outstanding during the period.
On April 20, 1992, the Company's Board of Directors declared a two-for-one
stock split in the form of a stock dividend payable to shareholders of record
as of May 9, 1992. The aggregate par value, which did not change on a per-
share basis, of $5.6 million for the additional shares was transferred from
additional paid-in capital to common stock. All share and per-share data in
these financial statements have been restated to give effect to the stock
split.
Segment and Customer Information
--------------------------------
The Company is engaged in one line of business, industrial distribution. No
single customer accounts for more than 10% of sales. The majority of the
Company's business activity pertains to, and accounts receivable result from,
sales of laboratory equipment and supplies to businesses across a wide
geographical area in various industries, mainly industrial, governmental,
biomedical, and educational. At December 31, 1994, the Company had no
significant concentrations of credit risk.
Reclassifications
-----------------
Certain prior years' amounts have been reclassified to conform to the current
year's presentation.
INVENTORIES
-----------
Inventories consist primarily of purchased goods for sale and are valued at
the lower of cost or market. Inventory valued using the last-in, first-out
(LIFO) method comprised 88% and 95% of inventory at December 31, 1994 and
1993, respectively. Cost of the remaining inventories is determined using the
first-in, first-out (FIFO) method.
LIFO cost at December 31, 1994, and 1993, was approximately $27.7 million and
$26.8 million, respectively, less than current cost. The effect of LIFO layer
liquidations decreased the cost of sales by $.6 million in 1993, and $.4
million in 1992.
FIXED ASSETS
------------
Net property and equipment at December 31, 1994, and 1993, is:
-----------------------------------------------------------------------------
(Thousands of dollars) 1994 1993
-----------------------------------------------------------------------------
Land $ 2,130 $ 2,130
Buildings 10,249 10,249
Equipment and computer software 53,029 50,339
Construction in progress 408 280
------- -------
65,816 62,998
Less accumulated depreciation (27,557) (21,436)
------- -------
Net property and equipment $38,259 $41,562
======= =======
Depreciation expense for the years ended December 31, 1994, 1993 and 1992, was
$6.3 million, $5.4 million and $4.3 million, respectively.
ACCRUED LIABILITIES
-------------------
Included in accrued liabilities at December 31, 1994, and 1993, is accrued
compensation of approximately $3.3 million and $4.2 million, respectively.
FOREIGN CURRENCY TRANSACTIONS
------------------------------
The Company supplies product to its Canadian subsidiary for sale to the
subsidiary's Canadian customers. The Company has entered into forward
exchange contracts to fix the rate of exchange on the Canadian dollar payments
made to the Company upon settlement of the intercompany accounts related to
those shipments to its subsidiary. As of December 31, 1994, the Company had
approximately $1.1 million of forward exchange contracts outstanding. Net
transaction gains and losses are not material and are included in interest
expense.
LONG-TERM DEBT AND REVOLVING CREDIT AGREEMENTS
----------------------------------------------
The long-term debt of the Company at December 31, 1994, and 1993, is:
-----------------------------------------------------------------------------
(Thousands of dollars) 1994 1993
-----------------------------------------------------------------------------
Revolving Credit Agreements $61,920 $60,107
Term Note 19,500 1,800
Less current portion (2,250) (150)
------- -------
Net long-term debt $79,170 $61,757
======= =======
On October 27, 1994, the Company replaced its previously unsecured revolving
credit facility with a dual-currency secured revolving credit and term loan
agreement, expiring in 1997, with four banks which provides for committed
facilities of $80 million subject to the maintenance of certain levels of
accounts receivable and inventory, and a $20 million five-year term note due
quarterly in varying installments beginning December 31, 1994. The facility
provides for the ability to borrow Canadian dollars up to $16 million in U.S.
dollars. Canadian borrowings were used to finance the acquisition of Canlab
as noted under "Acquisitions." Interest on borrowings is at short-term
interest rates. The agreement is secured by the Company's accounts receivable
and inventory. The Company expects to have sufficient accounts receivable and
inventory to provide adequate availability under these facilities. Principal
amounts due on long-term debt, before the impact of the equity transaction
(see "Subsequent Event" note), in each of the five years beginning January 1,
1995, are $2.3 million, $3.3 million, $66.6 million, $5.3 million and $4.5
million, respectively.
For the year ended December 31, 1994, the approximate weighted average
interest rate on borrowings made under the outstanding loan facilities was
7.0%, which approximates the year-end rate. Interest expense for the years
ended December 31, 1994, 1993, and 1992, was $4.8 million, $4.5 million, and
$3.9 million, respectively.
The Company has an interest rate collar on $30 million which expires on March
1, 1996. The collar is based on the three-month London Interbank Offered Rate
("LIBOR") and has a floor of 6.75% and a ceiling of 9.5%. The cost of the
collar is treated as a reduction of the revolving credit debt and is being
amortized as revolving credit interest expense over the term of the collar.
The Company has entered into interest rate swap agreements with a financial
institution which effectively change the Company's interest rate exposure on
$10 million of floating rate debt to a fixed rate of 4.86% from March 28, 1994
through February 29, 1996, and on $30 million to a fixed rate of 6.38% from
February 29, 1996 through February 28, 1999. Net receipts or payments under
the agreements are recognized as an adjustment to interest expense. The fair
market value of the swap agreements is based on the present value of the
future cash flows determined by the interest rate difference between the
contracts' fixed rate and the then current replacement rate. At December 31,
1994 the fair market value of the swap agreements, which is not recorded in
the consolidated financial statements, is approximately $1.4 million. The
Company is exposed to credit loss in the event of nonperformance by the other
parties to the interest rate swap agreements. However, the Company does not
anticipate nonperformance by the counterparties.
The Company's long-term debt agreement provides for, among other terms,
restrictive covenants with respect to working capital, tangible net worth, the
current ratio, and the debt-to-equity ratio, which may restrict the Company's
ability to declare or pay dividends. Under the most restrictive of these
terms, approximately $1.8 million of retained earnings at December 31, 1994 is
available to pay dividends.
INCOME TAXES
------------
During 1993, the Company adopted SFAS No. 109 "Accounting for Income Taxes."
The cumulative effect of the accounting change was not material.
The income (loss) before income taxes and cumulative effect of accounting
change is as follows:
-------------------------------------------------------------------------------
(Thousands of dollars)
1994 1993 1992
-------------------------------------------------------------------------------
Domestic $3,470 $7,447 $15,280
Foreign (449) (894) (192)
------ ------ -------
$3,021 $6,553 $15,088
====== ====== =======
The provision for income taxes on income before cumulative effect of accounting
change consists of:
---------------------------------------------------------------------------
(Thousands of dollars)
1994 1993 1992
---------------------------------------------------------------------------
Current:
Federal $1,652 $2,320 $4,410
State 170 200 772
------ ------ ------
1,822 2,520 5,182
------ ------ ------
Deferred:
Federal (276) 286 351
State (213) 7 125
Foreign (365) (150)
------ ----- ------
(854) 143 476
------ ------ ------
Total tax provision $ 968 $2,663 $5,658
====== ====== ======
The reconciliation of tax computed at the federal statutory tax rates of 35%
(1994 and 1993) and 34% (1992) of income before income taxes and cumulative
effect of accounting change to the actual income tax provision is as follows:
-------------------------------------------------------------------------------
(Thousands of dollars)
1994 1993 1992
-------------------------------------------------------------------------------
Statutory tax $1,058 $2,293 $5,130
State income taxes net
of federal tax benefit (29) 137 592
Increase in statutory rate
on deferred tax items 164
Increase (Decrease) in
valuation allowance for
foreign net operating loss (165) 250
Other-net 104 (181) (64)
------ ------ ------
Total tax provision $ 968 $2,663 $5,658
====== ====== ======
Deferred tax liabilities (assets) as of December 31, 1994 and 1993 are
comprised of the following:
-----------------------------------------------------------------------------
(Thousands of dollars) 1994 1993
-----------------------------------------------------------------------------
Depreciation $5,942 $6,400
Pension 1,730 1,918
----- -----
Deferred tax liabilities 7,672 8,318
----- -----
Postretirement benefits (800) (809)
Other benefits (525) (584)
Restructuring charges (720)
Net operating loss carryforwards
from foreign operations net of
valuation allowances of $160 in
1994 and $350 in 1993 (586) (150)
Other-net (714) (213)
----- -----
Deferred tax assets (2,625) (2,476)
----- -----
Net deferred tax liability $5,047 $5,842
====== ======
Included in other current assets at December 31, 1994 and 1993 are refundable
income taxes of approximately $.4 million and $2.1 million, respectively, and
net current deferred tax assets of $.8 million and $.6 million, respectively.
The Company has Canadian tax loss carryforwards of approximately $1.0 million
which expire at various dates through 2001. Management expects that the
realization of the deferred tax assets related to the Canadian net operating
losses will result from improved margins, elimination of duplicate personnel
and facility cost, coupled with the acquisition of Canlab in late 1994.
SHAREHOLDER RIGHTS AGREEMENT
----------------------------
On May 20, 1988, the Company established a Shareholder Rights Agreement. The
Agreement is designed to deter coercive or unfair takeover tactics that could
deprive shareholders of an opportunity to realize the full value of their
shares. On February 23, 1995, the Company amended the Agreement to change the
definition of "Acquiring Person," and to provide that the Agreement be
governed by the laws of the Commonwealth of Pennsylvania instead of the laws
of the State of Delaware.
Under the Agreement, the Company has distributed a dividend of one Right for
each outstanding share of the Company's stock. When exercisable, each Right
will entitle its holder to buy two shares of the Company's common stock at
$45.00 per share. The Rights will become exercisable if an Acquiring Person
acquires or makes an offer to acquire 20 percent of the Company's common
stock. In the event that a purchaser acquires 20 percent of the common stock,
each Right shall entitle the holder, other than the acquirer, to purchase, at
the Right's then-current full exercise price, shares of the Company's common
stock having a market value of twice the then-current full exercise price of
the Right. In the event that, under certain circumstances, the Company is
acquired in a merger or transfers 50 percent or more of its assets or earnings
to any one entity,each Right entitles the holder to purchase common stock of
the surviving or purchasing company having a market value of twice the full
exercise price of the Right. The Rights, which expire on May 31, 1998, may be
redeemed by the Company at a price of $.005 per Right.
STOCK AND INCENTIVE PROGRAMS
----------------------------
Under the stock option and restricted stock plans, in addition to outstanding
options, 241,440 shares were reserved for issuance at December 31, 1994.
Restricted Stock Awards
-----------------------
The Company's restricted stock award plan provides for grants of common stock
to certain directors, officers, and managers. The vesting periods range from
one to eight years. The fair market value of the stock at the date of grant
establishes the compensation amount, which is amortized to operations over the
vesting period. During the years ended December 31, 1994, 1993 and 1992, the
Company granted 21,816, 45,219 and 7,580 shares, respectively, at fair market
values of approximately $.2 million, $.7 million and $.1 million,
respectively.
Stock Options
-------------
Under the stock option plan, options, which vest over 3 to 10 years, have been
granted to certain officers and managers to purchase common stock of the
Company at its fair market value at date of grant. Changes in options
outstanding were:
-------------------------------------------------------------------------------
Shares Average Price
------------------------------------------------------------------------------
Outstanding at December 31, 1991 429,310 $7.41
Exercised (44,301) 5.62
Canceled (12,196) 7.82
------
Outstanding at December 31, 1992 372,813 7.61
Exercised (14,469) 6.07
Granted 59,921 13.88
Canceled (12,446) 6.90
--------
Outstanding at December 31, 1993 405,819 8.61
Exercised (22,007) 6.14
Granted 5,000 10.00
Canceled (32,845) 7.75
-------
Outstanding at December 31, 1994 355,967 $8.86
=======
At December 31, 1994, there were 135,870 options exercisable at an average
price of $7.79.
Savings Investment Plan
-----------------------
The Company has a savings investment plan whereby it matches 50% of the
employee's contribution up to 3% of the employee's pay. For employee
contributions between 3% and 7.5% of their pay, the Company will match 50% of
the contribution within prescribed limits based on the Company's profitability
for the year. All Company contributions are used to buy shares of the
Company's stock. Expenses under this plan for the years ended December 31,
1994, 1993, and 1992, were $.6 million, $.5 million and $.6 million,
respectively. At December 31, 1994, there were 407,513 shares available for
issuance under this Plan.
Employee Stock Ownership Plan
-----------------------------
In September, 1990, the Company established an employee stock ownership plan
(ESOP) by, in effect, contributing 400,000 shares of treasury stock ($2.9
million fair value) to the ESOP of which 153,568 shares are allocated to
participants at December 31, 1994. All full-time and part-time employees,
except certain union employees, are eligible to participate in the plan.
The ESOP shares will be allocated equally to individual participants' accounts
over a period up to ten years. Vesting occurs equally over an employment
period of five years at which time the employee is 100% vested in the plan.
The total number of shares to be allocated in a year is the higher of an
amount based on the Company's profitability or the minimum allocation required
per the ESOP agreement. Expenses are recognized based on shares to be
allocated in the subsequent year and are reduced for dividends paid on
unallocated shares.
POSTRETIREMENT BENEFITS
------------------------
Pension Plans
The Company has two defined benefit pension plans covering substantially all
of its domestic employees, except for employees covered by independently
operated collective bargaining plans. Pension benefits are based on years of
credited service and the highest five consecutive years' average compensation.
Contributions to the Company plans are based on funding standards established
by the Employee Retirement Income Security Act of 1974 (ERISA).
The total VWR Corporation plans' funding status and the amounts recognized in
the Company's Consolidated Balance Sheets at December 31, 1994, and 1993, are:
------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993
------------------------------------------------------------------------------
Actuarial present value of plan benefit obligations
Vested benefit obligation $30,166 $31,240
Nonvested benefit obligation 1,254 1,116
------- -------
Accumulated benefit obligation $31,420 $32,356
======= =======
Projected benefit obligation $35,972 $37,848
Plan assets at fair value (33,313) (33,610)
------- -------
Projected benefit obligation in
excess of plan assets 2,659 4,238
Prior service costs not yet recognized
in net periodic pension cost 699 336
Unrecognized net transition obligation (333) (391)
Unrecognized actuarial loss (6,901) (8,222)
------- ------
Prepaid pension expense included in
consolidated balance sheets $(3,876) $(4,039)
======= =======
The assets of the Company plans consist predominantly of undivided interests
in several funds structured to duplicate the performance of various stock and
bond indexes.
Net pension expense under the Company plans includes the following components:
------------------------------------------------------------------------------
(Thousands of dollars) 1994 1993 1992
------------------------------------------------------------------------------
Service Cost (benefits earned
during the year) $1,516 $1,252 $1,184
Interest cost on projected
benefit obligation 2,922 2,758 2,503
Actual return on plan assets (116) (3,412) (1,366)
Net amortization and deferral (2,714) 682 (1,370)
------ ------ ------
Net pension expense $1,608 $1,280 $ 951
====== ====== ======
The assumptions used were:
Discount rate 8.75% 7.75% 9%
Rate of increase in
compensation levels 4% 4% 5%
Expected long-term rate of
return on plan assets 10% 10% 10%
The Company maintains a supplemental pension plan for certain senior officers.
Expenses incurred under this plan in 1994 and 1993 were approximately $.2
million and $.3 million, respectively. There were no expenses incurred under
this plan in 1992.
Certain employees are covered under union-sponsored, collectively bargained
plans. Expenses under these plans for each of the years ended December 31,
1994, 1993 and 1992, were $.2 million, as determined in accordance with
negotiated labor contracts.
Retiree Medical Benefits Program
--------------------------------
The Company provides certain medical benefits for retired employees. In 1993,
the Company adopted SFAS No. 106 "Accounting for Postretirement Benefits Other
Than Pensions." The Company elected to immediately recognize the calculated
liability resulting in a one-time non-cash charge to income of approximately
$1.4 million, net of a deferred tax benefit of approximately $.9 million.
Employees retired as of December 31, 1992 and active employees who reached age
55 by December 31, 1992 are eligible to participate in the Company's retiree
health plan (the "plan"). There are also certain provisions for participation
by spouses. The plan is contributory, with retiree contributions based on
years of service and includes other co-payment and co-insurance provisions.
The Company does not fund the plan. The liability of the plan at December 31,
1994 and 1993 is as follows:
(Thousands of dollars)
1994 1993
Accumulated postretirement benefit obligation: ---- ----
Retirees $1,486 $1,604
Eligible active participants 184 183
Other active participants 22 21
Unrecognized net gain 307 266
------ ------
Accrued postretirement benefit obligation $1,999 $2,074
====== ======
The net periodic postretirement benefit cost includes the following
components:
1994 1993
---- ----
Service cost $ 6 $ 7
Interest cost 139 174
Net amortization and deferral (3)
----- -----
$ 142 $ 181
===== =====
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation is 10% through 1996 declining 1% per year to
a level of 5.4% in 2001 and thereafter. The effect of a 1% annual increase in
the assumed cost trend rate would increase the accumulated postretirement
benefit obligation by approximately 9%; the annual service and interest cost
components in the aggregate would not be materially affected. An 8.75%
discount rate was used in determining the accumulated postretirement benefit
obligation at December 31, 1994 and 7.75% was used at December 31, 1993.
Before the adoption of SFAS No. 106, the retiree health care expense was
recorded as claims were incurred. The expense for 1992 was approximately $.2
million.
LEASES
------
The Company leases office and warehouse space, computer equipment, and
automobiles under operating leases with terms ranging up to 15 years, subject
to renewal options.
Rental expense for continuing operations was approximately $5.2 million for
the years ended December 31, 1994, and 1993, and $4.8 million in 1992
Future minimum lease payments as of December 31, 1994, under noncancelable
operating leases, having initial lease terms of more than one year are:
------------------------------------------------------------------------------
Years Ending December 31
(Thousands of dollars)
------------------------------------------------------------------------------
1995 $ 4,436
1996 3,514
1997 3,008
1998 2,000
1999 1,710
Thereafter 3,681
------
Total minimum payments $18,349
======
CONTINGENCIES AND COMMITMENTS
------------------------------
The Company is involved in various environmental, contractual, warranty, and
public liability cases and claims, which are considered routine to the
Company's business. In the opinion of management, the potential financial
impact of these matters is not material to the consolidated financial
statements.
ACQUISITIONS
------------
Effective October 31, 1994, the Company, through its wholly-owned Canadian
subsidiary, acquired certain assets related to the laboratory supply business
of Canlab, a division of Baxter International for approximately $13.9 million.
The acquisition was accounted for under the purchase method of accounting and
was funded through the Company's secured term loan. The unamortized balance
of the excess purchase price over net assets acquired is $5.1 million at
December 31, 1994 which is included in other long-term assets. In the fourth
quarter of 1994, as a result of the acquisition, VWR terminated certain of its
employees and closed certain facilities. The total cost of these actions,
which was expensed in 1994, was $.9 million.
Canlab's results of operations have been included in the consolidated results
of operations since the date of acquisition. The following unaudited pro
forma combined results of operations for the years ended December 31, 1994 and
1993 have been prepared assuming that the acquisition had occurred as of the
beginning of each period. It is based on historical information and does not
necessarily reflect the actual results that would have occurred nor is it
necessarily indicative of future results of operations of the combined
enterprise:
(Thousands of dollars) 1994 1993
---- ----
Sales $570,170 $553,467
1994 1993
---- ----
Income before cumulative
effect of accounting change 3,254 5,766
Net income 3,254 4,366
Earnings per share:
Before cumulative effect
of accounting change $ .29 $.52
Net income .29 .39
The pro forma results of operations include, among other items, certain
adjustments for increased interest on acquisition debt, amortization of
goodwill, plus expense savings from discontinued fucntions, and related income
tax effects.
Effective October 5, 1992, the Company, through its wholly owned Canadian
subsidiary, acquired certain assets related to the laboratory supply business
of Johns Scientific, Inc. of Toronto, Canada for approximately $7.4 million.
This acquisition was accounted for under the purchase method of accounting and
was funded through the Company's revolving credit line, and a $1.6 million, 8%
note payable which was refinanced through the revolving line of credit. The
acquisition is not material in relation to the Company's consolidated
financial statements. The unamortized balance of the excess purchase price
over net assets acquired is $2.1 million at December 31, 1994 and $2.5 million
at December 31, 1993 which is included in other long-term assets.
JOINT VENTURE
-------------
On January 1, 1994 the Company formed a joint venture with E. Merck of Germany
to acquire an interest in Bender & Hobein GmbH, a distributor of laboratory
supplies and equipment in Germany. The $2.9 million investment, included in
other long-term assets, is accounted for using the cost method of accounting
and was funded through the Company's revolving credit line.
The initial term of this agreement is for a period of three years. During the
initial term, VWR has the right to "put" its investment to E. Merck and
receive the original DM cost of the investment. Subsequent to the initial
term, if either party terminates the agreement, E. Merck will have to re-
acquire the shares from VWR at fair value.
RESTRUCTURING AND OTHER CHARGES
-------------------------------
In December 1994, the Company made the decision to consolidate certain sales
offices and functions. As a result, the Company will incur approximately $2
million in charges which are primarily for severance and other personnel-
related costs. The cost of the consolidation effort will be accounted for in
accordance the new guidance set forth in FASB EITF Issue 94-3 "Accounting for
Restructuring Charges." Under EITF 94-3 costs will be recognized primarily
when they are incurred throughout 1995.
In the fourth quarter of 1993, the Company made the decision to refocus
certain information systems efforts into customer service systems and to take
actions that would reduce operating expenses. As a result of this effort, the
Company recorded a $3.3 million charge which included non-cash charges of $1.3
million (primarily for software development costs that did not have continuing
value) and $2 million related to the consolidation of functions and facilities
which consisted primarily of severance and other personnel-related costs. All
of the Company's contemplated actions were completed during 1994, and all of
the cash expenditures related to the $2 million accrued at December 31, 1993
have been made.
SUBSEQUENT EVENT
----------------
On February 27, 1995, the Company and EM Industries, Incorporated ("EM") (an
affiliate of E. Merck, Darmstadt, Germany) entered into an agreement that
calls for EM to invest $20 million in the Company for common shares
(calculated at a price per share of $11) and a three-year warrant to purchase
an additional $10 million of common shares at $11 per share, subject to
regulatory approvals and other customary conditions. Assuming exercise of the
warrant, EM would own approximately 20% of the common stock of the Company.
EM has also agreed to a four-year "standstill" agreement, which limits its
ability to increase its equity interest in the Company during the four years.
After the four-year period, without prior approval of the Board of Directors
of the Company, EM would be permitted to acquire additional equity in the
Company only by offering to acquire all of the outstanding shares of the
Company. The standstill agreement also grants EM certain registration rights.
The Company has also agreed to elect two representatives of EM to its Board of
Directors. In addition, the Companies have agreed to enter into new
distribution agreements encompassing the U.S. and Canadian markets.
The agreements have been unanimously approved by the Company's Board of
Directors and do not require shareholder approval. The expected proceeds of
approximately $20 million from the issuance of the shares under the share
purchase agreement are expected to be used to repay debt.
FOREIGN AND DOMESTIC OPERATIONS
-------------------------------
At December 31, 1994, identifiable assets of the Company's Canadian operations
were $28 million. Approximately half of the assets are attributable to the
Canlab acquisition on October 31, 1994. Because Canlab's operations are
reflected in the consolidated totals for only two months in 1994, net sales
and operating income (loss) of the Canadian operations are proportionately
smaller - - in each case less than 10 percent of the consolidated total for
such amounts. For the years ended December 31, 1993 and 1992 sales and
identifiable assets attributable to these Canadian operations were less than
10% of the Company's totals in each category.
QUARTERLY FINANCIAL DATA (Unaudited)
-------------------------------------------------------------------------------
(Thousands of dollars, Gross Operating Net Earnings
except per share data) Sales Margin Income* Income (Loss) Per
(Loss)** Share**
-------------------------------------------------------------------------------
Year Ended - December 31, 1994
First Quarter $122,044 $ 26,506 $ 1,418 $ 183 $ .02
Second Quarter 130,896 26,916 1,937 516 .05
Third Quarter 145,562 30,861 4,218 2,128 .19
Fourth Quarter 136,677 28,915 1,501 (774) (.07)
-------- -------- ------- ------ ------
Total $535,179 $113,198 $ 9,074 $2,053 $ .18
======== ======== ======= ====== ======
Year Ended - December 31, 1993
First Quarter $125,485 $ 28,554 $ 3,146 $ (95) $ (.01)
Second Quarter 127,101 28,624 3,496 1,420 .13
Third Quarter 135,746 31,862 6,236 2,920 .26
Fourth Quarter 120,903 27,234 1,683 (1,755) (.16)
-------- -------- ------- ------ ------
Total $509,235 $116,274 $14,561 $2,490 $ .22
======== ======== ======= ====== ======
*Fourth quarter 1994 amounts are before Canlab transition expenses. Fourth
quarter 1993 amounts are before Restructuring and other charges.
**1993 amounts are after the cumulative effect of a first quarter accounting
change for postretirement benefits. Fourth quarter 1993 amounts have been
reduced by the effects of restructuring and other charges. Fourth quarter
1994 amounts have been reduced by the effects of Canlab transition expenses.
REPORT OF INDEPENDENT AUDITORS
------------------------------
To The Shareholders of VWR Corporation:
We have audited the consolidated balance sheets of VWR Corporation as of
December 31, 1994 and 1993, and the related consolidated statements of
operations, shareholders' equity, and cash flows for each of the three years
in the period ended December 31, 1994. Our audits also include the financial
statement schedule listed in the index at Item 14(a). These financial
statements and schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of VWR Corporation at December 31, 1994 and 1993, and the consolidated results
of its operations and its cash flows for each of the three years in the period
ended December 31, 1994, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
As discussed in the notes to the consolidated financial statements
(postretirement benefits), in 1993 the Company changed its method of
accounting for postretirement benefits other than pensions.
BY (SIGNATURE)
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
February 7, 1995, except for
the subsequent event note as
to which the date is
February 27, 1995.
ITEM 9. - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
------ --------------------------------------------------------------
None
PART III.
--------
ITEM 10. - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
-------- ---------------------------------------------------
The information required by this item is incorporated by reference from the
section captioned "Election of Directors" and the last paragraph of the
section captioned "Ownership of VWR Corporation Stock" contained in the
Company's definitive Proxy Statement, which the Company will have filed with
the Commission pursuant to Regulation 14A within 120 days after the close of
the fiscal year.
Information regarding executive officers of the Company is included in Part I
of this Form 10-K.
ITEM 11. - EXECUTIVE COMPENSATION
------- ----------------------
The information required by this item is incorporated by reference from the
Sections "Fees to Directors and Committees of the Board" and "Executive
Compensation" contained in the Company's definitive Proxy Statement which the
Company will have filed with the Commission pursuant to regulation 14A within
120 days after the close of the fiscal year.
ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
---------- ----------------------------------------------------------
The information required by this item is incorporated by reference from the
section captioned "Ownership of VWR Corporation Stock" contained in the
Company's definitive Proxy Statement, which the Company will have filed with
the Commission pursuant to Regulation 14A within 120 days after the close of
the fiscal year.
ITEM 13. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
------- ----------------------------------------------
None
PART IV.
-------
ITEM 14. - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
-------- ------------------------------------------------------------
(a)(1) Financial Statements
The following financial statements have been included as part of this report:
Form 10-K
Page
---------
Consolidated Statements of Operations 18
Consolidated Balance Sheets 19
Consolidated Statements of Cash Flows 21
Consolidated Statements of Shareholders' Equity 23
Notes to Consolidated Financial Statements 26
Report of Independent Auditors 42
(2) Financial Statement Schedules
(a) The following financial statement schedule is submitted herewith:
-Schedule II - Valuation and Qualifying Accounts
All other schedules for which provision is made in the
applicable accounting regulation of the Securities and
Exchange Commission are not required under the related
instructions or are inapplicable, and have therefore been
omitted.
(3) Exhibits
Exhibit Number and Description
------------------------------
2 Agreement and Plan of Merger between VWR Corporation and
VWR New Corporation
Agreement and Plan of Distribution between VWR Corporation
and Momentum Distribution, Inc. (1)
3 Amended and Restated Articles of Incorporation
3.1 Amended and Restated Bylaws
4 Amended and Restated Credit Agreement by and among VWR
Corporation and its Subsidiaries and CoreStates Bank, N.A.
for itself and as agent, Seattle-First National Bank,
Bank of America Canada, and PNC Bank, National Association
dated October 27, 1994.
Rights Agreement dated as of May 20, 1988 between VWR Corporation
and The First Jersey National Bank (filed as an exhibit to the
Company's registration statement in Form 8-A dated May 23, 1988,
and incorporated herein by reference).
10 Change of Control agreements between VWR Corporation and
Philip Hunsucker (3)
Change of Control agreements between VWR Corporation and
Jerrold B. Harris, Walter S. Sobon, and Richard H. Serafin (1) (3)
Change of Control agreements between VWR Corporation and
Joseph A. Panozzo, Paul J. Nowak, and Richard W. Amstutz (2) (3)
VWR Corporation Executive Bonus Plan dated January 1, 1990.(3)
VWR Corporation Supplemental Benefits Plan dated November 1,
1990. (3)
11 Computation of Per Share Earnings
21 Parent and Subsidiaries of the Company
23 Consent of Independent Auditors
24 Power of Attorney
27 Article 5 FDS for year ended December 31, 1994 (4)
(1) Filed as an Exhibit to the Company's Form 10-K Report for the year
ended December 31, 1991, and incorporated herein by reference.
(2) Filed as an Exhibit to the Company's Form 10-K Report for the year ended
December 31, 1992 and incorporated herein by reference.
(3) May be deemed a management contract or compensatory plan or arrangement.
(4) Submitted for the benefit of the SEC.
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 CORPORATION
Date March 27, 1995 BY (SIGNATURE)
Jerrold B. Harris,
President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on the behalf of the
registrant in the capacities and on the dates indicated.
Date March 27, 1995 BY (SIGNATURE)
Walter S. Sobon,
Vice President Finance
(Principal Financial and
Accounting Officer)
DIRECTORS
James W. Bernard
Richard E. Engebrecht
Jerrold B. Harris
Curtis P. Lindley BY (SIGNATURE)
Edward A. McGrath, Jr.
Donald P. Nielsen
N. Stewart Rogers Jerrold B. Harris
Robert S. Rogers Attorney-in-fact
James H. Wiborg Power of Attorney
dated February 28, 1995
Date: March 27, 1995
VWR CORPORATION
--------------------------------
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
-----------------------------------------------
(Thousands of dollars)
Balance at Charged to Balance
Beginning Costs and at End
Description of Year Expenses Deductions (1) Other of Year
----------- --------- ---------- -------------- ----- ---------
Allowances for losses
(deducted from trade
receivables) for:
Year Ended
December 31, 1994 $259 $656 $554 $258(2) $619
=== === === === ===
Year Ended
December 31, 1993 $222 $377 $340 $259
=== === === ===
Year Ended
December 31, 1992 $182 $482 $442 $222
=== === === ===
(1) Uncollectible accounts written off, net of recoveries.
(2) Reserves established in connection with the Canlab acquisition.
Exhibit Index
-------------
Exhibit Number and Description
------------------------------
2 Agreement and Plan of Merger between VWR Corporation and
VWR New Corporation
Agreement and Plan of Distribution between VWR Corporation
and Momentum Distribution, Inc.*
3 Amended and Restated Articles of Incorporation
3.1 Amended and Restated Bylaws
4 Amended and Restated Credit Agreement by and among VWR
Corporation and its Subsidiaries and CoreStates Bank, N.A.
for itself and as agent, Seattle-First National Bank,
Bank of America Canada, and PNC Bank, National Association
dated October 27, 1994.
Rights Agreement dated as of May 20, 1988 between VWR Corporation
and The First Jersey National Bank (filed as an exhibit to the
Company's registration statement in Form 8-A dated May 23, 1988,
and incorporated herein by reference).
10 Change of Control agreements between VWR Corporation and
Philip Hunsucker
Change of Control agreements between VWR Corporation and
Jerrold B. Harris, Walter S. Sobon, and Richard H. Serafin*
Change of Control agreements between VWR Corporation and
Joseph A. Panozzo, Paul J. Nowak, and Richard W. Amstutz**
VWR Corporation Executive Bonus Plan dated January 1, 1990*
VWR Corporation Supplemental Benefits Plan dated November 1,
1990*
11 Computation of Per Share Earnings
21 Parent and Subsidiaries of the Company
23 Consent of Independent Auditors
24 Power of Attorney
27 Article 5 FDS for year ended December 31, 1994
* Filed as an Exhibit to the Company's Form 10-K Report for the year ended
December 31, 1991, and incorporated herein by reference
** Filed as an Exhibit to the Company's Form 10-K Report for the year ended
December 31, 1992.
EXHIBIT 2
---------
AGREEMENT AND PLAN OF MERGER
BETWEEN
VWR CORPORATION
(a Delaware corporation)
AND
VWR NEW CORP.
(a Pennsylvania corporation)
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of March 28, 1994, made
by and between VWR CORPORATION, a Delaware corporation ("VWR"), and VWR NEW
CORP., a Pennsylvania corporation and wholly owned subsidiary of VWR
("Newco"), (which corporations are sometimes hereinafter collectively called
the "Constituent Corporations").
WITNESSETH:
WHEREAS, VWR has authority to issue 31,000,000 shares of capital stock,
consisting of 30,000,000 shares of Common Stock, par value $1.00 per share,
and 1,000,000 shares of Preferred Stock, par value $1.00 per share
(collectively, the "VWR Capital Stock"); and
WHEREAS, Newco on the Effective Date (as hereinafter defined) will have the
authority to issue 31,000,000 shares of capital stock, consisting of
30,000,000 shares of Common Stock, par value $1.00 per share, and 1,000,000
shares of Preferred Stock, par value $1.00 per share (collectively, the "Newco
Capital Stock"); and
WHEREAS, the Board of Directors of each of the Constituent Corporations deems
it advisable and in the best interests of each of the Constituent Corporations
and its shareholder or stockholders that VWR be merged with and into Newco as
permitted by the General Corporation Law of the State of Delaware ("GCL") and
the Business Corporation Law of 1988 of the Commonwealth of Pennsylvania
("BCL") under and pursuant to the terms and conditions hereinafter set forth;
and
WHEREAS, the Board of Directors of each of the Constituent Corporations has
approved this agreement and directed that this Agreement be submitted to its
stockholders or shareholder
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants herein contained and in accordance with the
applicable provisions of the GCL and the BCL, the parties hereto have agreed
and covenanted, and do hereby agree and covenant, as follows:
ARTICLE I
THE MERGER, THE SURVIVING CORPORATION
AND THE EFFECTIVE DATE
-------------------------------------
1. As soon as practicable following the fulfillment (or waiver, to the
extent permitted therein) of the conditions specified in Article IV hereof,
taking into consideration the closing of accounting periods, VWR shall be
merged with and into Newco (the "Merger") and Newco shall survive the Merger.
2. The date on which the Merger occurs and becomes effective is hereinafter
called the Effective Date. The Merger shall occur and be effective on the
hour and on the date set forth as the effective date in Articles of Merger
incorporating this Agreement filed in the Department of State of the
Commonwealth of Pennsylvania as provided in Subchapter 19C (relating to
merger, consolidation, share exchanges and sale of assets) of the BCL, if
prior thereto a duly certified, executed and acknowledged copy of this
Agreement or certificate of merger with respect thereto has been filed with
the Secretary of State of Delaware as provided in Sections 103 and 252 of the
GCL.
3. Newco, as the surviving corporation (the "Surviving Corporation"), shall
continue its corporate existence under the laws of the Commonwealth of
Pennsylvania. On the Effective Date, the separate existence and corporate
organization of VWR, except insofar as it may be continued by operation of
law, shall be terminated and cease.
ARTICLE II
ARTICLES OF INCORPORATION, BYLAWS, DIRECTORS
AND OFFICERS OF THE SURVIVING CORPORATION
--------------------------------------------
1. The Articles of Incorporation of Newco on the Effective Date, in the
form set forth in Attachment I hereto, shall be the Articles of Incorporation
of the Surviving Corporation, until amended or repealed in accordance with the
provisions thereof and of applicable law. Following the Merger, the Surviving
Corporation shall operate under the name "VWR Corporation."
2. The Bylaws of Newco on the Effective Date, in the form set forth in
Attachment II hereto, shall on the Effective Date become and be the Bylaws of
the Surviving Corporation, until amended or repealed in accordance with the
provisions thereof, of the Articles of Incorporation and of applicable law
3. The directors and officers of VWR on the Effective Date will be the
directors and officers, respectively, of Newco on and after the Effective Date
until expiration of their current terms and until their successors are elected
and qualify, or their prior resignation, removal or death, subject to the
Articles of Incorporation and Bylaws of Newco.
ARTICLE III
TREATMENT OF SHARES OF EACH OF
THE CONSTITUENT CORPORATIONS
------------------------------
1. On the Effective Date:
(a) each share of Common Stock of VWR, par value $1.00 per share,
outstanding immediately prior to the Merger shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
become one share of Newco Common Stock, par value $1.00 per share;
(b) each share of Newco Capital Stock outstanding immediately prior to
the Merger shall cease to exist and be cancelled;
(c) each share of VWR Capital Stock issued and held in the treasury of
VWR on the Effective Date shall be cancelled, and no shares of stock or other
securities of Newco shall be issuable with respect thereto;
(d) each option outstanding under the VWR 1986 Long Term Incentive
Stock Plan immediately prior to the Merger shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
become an option to purchase the same number of shares of Newco Common Stock
at the same price and otherwise upon the same terms and conditions; and
(e) Each right to purchase a share of Common Stock of VWR, par value
$1.00 per share, shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into and become a right to purchase a
share of Newco Common Stock, par value $1.00 per share, at the same price and
otherwise under the same terms and conditions as contained in the Rights
Agreement dated as of May 20, 1988 between VWR and First Interstate Bank of
Washington, N.A.
2. Certificates representing shares of Newco Capital Stock outstanding
immediately prior to the Merger shall be cancelled. No certificates for shares
of Newco Capital Stock will be issued to holders of any of the shares of VWR
Capital Stock upon the Merger. Certificates representing shares of VWR
Capital Stock (other than certificates representing shares which are cancelled
pursuant to Section 1(c) of this Article III) shall upon the Merger be deemed
for all purposes to represent an equal number of shares of the same class and
series of Newco Capital Stock. After the Effective Date, whenever certificates
which formerly represented shares of VWR Capital Stock are presented for
exchange or registration of transfer, Newco will cause to be issued in respect
thereof certificates representing an equal number of shares of Newco Capital
Stock of the same class and series.
ARTICLE IV
CONDITIONS, DEFERRAL, TERMINATION AND AMENDMENT
-----------------------------------------------
1. The obligation of VWR and Newco to effect the transactions contemplated
hereby is subject to satisfaction of the following conditions (any or all of
which may be waived by VWR and Newco in their sole discretion to the extent
permitted by law):
(a) VWR as sole shareholder of Newco shall have approved this
Agreement in accordance with the BCL;
(b) the stockholders of VWR entitled to vote thereon shall have
adopted this Agreement at a meeting thereof duly held in accordance with GCL;
(c) the Newco Common Stock to be issued in the Merger or reserved for
issuance shall have been approved for quotation on NASDAQ National Market
System, subject to official notice of issuance;
(d) VWR shall have received an opinion of its tax counsel,
satisfactory to VWR and substantially to the effect that, for federal income
tax purposes (i) no gain or loss will be recognized by VWR, Newco or the
stockholders of VWR by reason of the consummation of the Merger, (ii) each VWR
stockholder's tax basis in Newco Capital Stock into which his or her VWR
Capital Stock is converted will be the same as the tax basis of the VWR
Capital Stock held by such stockholder immediately prior to consummation of
the Merger and (iii) a VWR stockholder who holds VWR Capital Stock as a
capital asset will include in his holding period for the Newco Capital Stock
the period during which he held the VWR Capital Stock converted into such
Newco Capital Stock; and
(e) a duly certified, executed and acknowledged copy to this Agreement
or certificate of merger with respect thereto shall have been filed with the
Secretary of State of Delaware in accordance with Sections 103 and 252 of the
GCL.
2. Consummation of the Merger may be deferred by the Board of Directors of
VWR for a reasonable period of time, not later than December 31, 1994, if the
Board determines that deferral would be in the best interests of VWR and its
stockholders.
3. (a) This Agreement may be terminated by the Board of Directors of VWR
or Newco at any time before or after the adoption and approval thereof by the
shareholder of Newco or the stockholders of VWR or both, but not later than
the Effective Date. In the event of a termination after Articles of Merger
have been filed in the Department of State of the Commonwealth of Pennsylvania
and before the Effective Date, a timely statement of termination may be filed
in the Department of State by the terminating corporation.
(b) In the event of termination of this Agreement as above provided,
this Agreement shall become wholly void and of no effect, and there
shall be no liability on the part of either Constituent Corporation or its
Board of Directors or its stockholders or shareholder except as provided in
Section 4 of this Article IV.
4. If the Merger becomes effective, the Surviving Corporation shall assume
and pay all expenses in connection therewith not theretofore paid by the
respective parties. If for any reason the Merger shall not become effective,
VWR shall pay all expenses incurred in connection with all the proceedings
taken in respect of this Agreement or relating thereto.
5. The parties hereto, by mutual consent of their respective Boards of
Directors, may amend, modify or supplement this Agreement in such manner as
may be agreed upon by them in writing at any time before or after adoption and
approval of this Agreement by the shareholder of Newco and stockholders of
VWR, but not later than the Effective Date, except that no such amendment,
modification or supplement not adopted and approved by the shareholder of
Newco and the stockholders of VWR shall affect the rights of such shareholder
or stockholders in a manner which is materially adverse to them, in the sole
judgment of the Board of Directors of VWR.
ARTICLE V
TRANSFER OF ASSETS AND LIABILITIES
----------------------------------
1. On the Effective Date, the rights, privileges, powers and franchises,
both of a public as well as of a private nature, of each of the Constituent
Corporations shall be vested in and possessed by the Surviving Corporation,
subject to all the disabilities, duties and restrictions of or upon each of
the Constituent Corporations; and all the rights, privileges, powers and
franchises of each of the Constituent Corporations, and all property, real,
personal and mixed, and all debts due to each of the Constituent Corporations
on whatever account, as well for stock subscriptions and all things in action
or belonging to each of the Constituent Corporations shall be transferred to
and vested in the Surviving Corporation; and all property, rights, privileges,
powers and franchises, and all and every other interest, shall be thereafter
as effectually the property of the Surviving Corporation as they were of the
Constituent Corporations, and the title to any real estate vested by deed or
otherwise in either of the Constituent Corporations shall not revert or be in
any way impaired by reason of the Merger; but all rights of creditors and all
liens upon any property of either of the Constituent Corporations shall be
preserved unimpaired, and all debts, liabilities and duties of each of the
Constituent Corporations shall attach to the Surviving Corporation, and may be
enforced against it to the same extent as if such debts, liabilities and
duties had been incurred or contracted by it.
2. The parties hereto agree that from time to time and as and when
requested by the Surviving Corporation, or by its successors or assigns, to
the extent permitted by law, the officers and directors of VWR and of the
Surviving Corporation are fully authorized in the name or VWR or otherwise to
execute and deliver all such deeds, assignments, confirmations, assurances and
other instruments and to take or cause to be taken all such further action as
the Surviving Corporation may deem necessary or desirable in order to vest,
perfect, confirm in or assure the Surviving Corporation title to and
possession of all of said property, rights, privileges, powers and franchises
and otherwise to carry out the intent and purposes of this Agreement.
ARTICLE VI
MISCELLANEOUS
-------------
For the convenience of the parties and to facilitate any filing and recording
of this Agreement, any number of counterparts hereof may be executed, each of
which shall be deemed to be an original of this Agreement but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties to this Agreement, pursuant to the
approval and authority duly given by resolutions adopted by its Board of
Directors, has caused these presents to be executed by its President or a Vice
President and its corporate seal affixed and attested to by its Secretary or
an Assistant Secretary, all as of the day and year first above written.
VWR NEW CORP.
(a Pennsylvania corporation)
(Corporate Seal)
By: (Signature)
-----------------------------
Jerrold B. Harris
President
ATTEST:
By: (Signature)
---------------------------
Walter S. Sobon
Secretary
VWR CORPORATION
(a Delaware corporation)
(Corporate Seal)
By: (Signature)
---------------------------
Jerrold B. Harris
President
ATTEST:
By: (Signature)
-------------------------------
Walter S. Sobon
Secretar
SECRETARY'S CERTIFICATE
The undersigned, Walter S. Sobon, Secretary of VWR Corporation, a
Delaware corporation (the "Company"), does hereby certify that the foregoing
Agreement has been adopted, at a meeting duly called and held, by at least a
majority of the outstanding stock of the Company entitled to vote thereon.
By: (Signature)
--------------------------------------
Walter S. Sobon, Secretary
SECRETARY'S CERTIFICATE
The undersigned, Walter S. Sobon, Secretary of VWR New Corp., a
Pennsylvania corporation (the "Pennsylvania Company"), does hereby certify
that the foregoing Agreement has been adopted by the written consent of all of
the holders of the outstanding stock of the Pennsylvania Company.
By: (Signature)
---------------------------------------
Walter S. Sobon, Secretary
CALHOUPT:[000000.VWR]MERGER.AGM
-8-
EXHIBIT 3
---------
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
VWR NEW CORP.
VWR NEW CORP. (the "Corporation"), a corporation organized and existing under
the laws of the Commonwealth of Pennsylvania, hereby certifies as follows:
A. The name of the Corporation is VWR New Corp. The address of the
registered office of the Corporation in the Commonwealth of Pennsylvania is
1310 Goshen Parkway, West Chester, Chester County, Pennsylvania 19380.
B. The Corporation was incorporated under the Pennsylvania Business
Corporation Law of 1988 on February 10, 1994.
C. These Amended and Restated Articles of Incorporation were duly
adopted by unanimous written consent of the Corporation's Board of Directors
and written consent of its sole shareholder in accordance with Sections
1727(b) and 1766(a) of the Pennsylvania Business Corporation Law of 1988.
D. Pursuant to Section 1915 of the Pennsylvania Business Corporation
Law of 1988, the provisions of the Corporation's original Articles of
Incorporation are hereby amended, restated and superseded in their entirety as
follows:
ARTICLE I
---------
The name of the Corporation is VWR Corporation
ARTICLE II
----------
The address of the registered office of the Corporation in the Commonwealth of
Pennsylvania is 1310 Goshen Parkway, West Chester, Chester County,
Pennsylvania 19380.
ARTICLE III
-----------
The purpose of the Corporation is to create the maximum continuing rate of
value growth through long-term profit on invested capital and the growth of
that capital.
To accomplish this purpose, the Board of Directors, management and employees
of the Corporation will strive to:
Properly select business opportunities versus risk;
Develop and maintain strategic direction for all business segments;
Develop and maintain superior management and organizational structures;
Encourage employee involvement in the business process;
Provide all employees the opportunity of a value growth environment of
good employment, training, advancement and recognition of their
achievements;
Create market understanding of the intrinsic values so created;
Conduct its business legally and ethically within the free enterprise
system as a responsible corporate citizen.
In carrying out this purpose, the Corporation is authorized to engage in any
lawful act or activity for which corporations may be organized under the
Pennsylvania Business Corporation Law of 1988.
ARTICLE IV
----------
The total number of shares of all classes of stock which this Corporation
shall have authority to issue is 31,000,000 shares to be divided into two
classes consisting of 30,000,000 common shares, par value $1.00 per share
(hereinafter designated "Common Shares") and 1,000,000 preferred shares, par
value $1.00 per share (hereinafter designated "Preferred Shares"). The Common
Shares shall have one vote for each share. The Preferred Shares shall have
such full or limited or no voting rights as shall be stated and expressed in
the resolution or resolutions of the Board of Directors of this Corporation
providing for the issuance of such shares pursuant to authority vested in it
by the provisions of its Articles of Incorporation.
The Preferred Shares may be issued in one or more classes or series within a
class and each such class or series may have such full or limited or no voting
rights, and such designations, preferences, and relative participating,
optional, or other special rights and qualifications, limitations, or
restrictions thereof as shall be stated and expressed in a resolution or
resolutions providing for the issuance of such Preferred Shares adopted by the
Board of Directors pursuant to the authority hereby granted.
The Preferred Shares may have voting rights, designations, preferences, and
relative participating, optional, or other special rights and qualifications,
limitations or restrictions which negate or supersede the provisions of
Article VIII hereof (so long as the resolution or resolutions which provided
for the issuance of the same are approved by the unanimous vote of the Board
of Directors).
ARTICLE V
---------
Except as otherwise provided in Section 3 of Article IX, shareholders shall
not have cumulative voting rights in the election of directors.
ARTICLE VI
----------
The provisions of Section 2538(a) and of Subchapters E, F, G and H of Chapter
25 of the Pennsylvania Business Corporation Law of 1988 (15 Pa. C.S.), as
amended, and any corresponding provisions of succeeding law, shall not be
applicable to the Corporation.
ARTICLE VII
-----------
1. For purposes of these Articles, the following defined terms shall have
the meanings set forth below. All references in these Articles to statutes,
rules or regulations shall include a reference to said statutes, rules or
regulations as currently in effect or hereafter amended.
(a) The terms "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated and issued under the
Securities Exchange Act of 1934.
(b) The terms "Beneficial Owner" and correlative terms shall have the
meanings ascribed to them in Rule 13d-3 and related interpretive releases
promulgated and issued under the Securities Exchange Act of 1934. Without
limitation, a Person shall be a "Beneficial Owner" of any Voting Stock:
(1) which such Person or any of its Affiliates or Associates
Beneficially Owns, directly or indirectly; or
(2) which such Person or any of its Affiliates or Associates has
(a) the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(3) which are Beneficially Owned, directly or indirectly, by any
other Person with which such Person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of Voting Stock.
(c) The terms "Board of Directors" and the "Board" mean the group of
individuals elected by the shareholders as directors of the Corporation or
appointed by the directors to fill a vacancy on the Board.
(d) The term "Common Shares" shall mean the common shares of the
Corporation as authorized pursuant to Article IV.
(e) The term "Disinterested Director" means any member of the Board of
Directors who is not an Affiliate of any 5%, 20% or 40% Shareholder, and was a
member of the Board prior to the time that any 5%, 20% or 40% Shareholder
achieved such status, and any successor of a Disinterested Director who is not
an Affiliate of any 5%, 20% or 40% Shareholder and is recommended to succeed a
Disinterested Director by a majority of Disinterested Directors then on the
Board.
(f) The term "Fair Market Value" means: (1) in the case of shares,
the Market Price, and (2) in the case of property other than cash or shares,
the fair market value of such property on the date in question as determined
by the Board in good faith.
(g) The term "5% Shareholder" shall mean any Person (other than the
Corporation or any Subsidiary) who or which:
(1) is the Beneficial Owner, directly or indirectly, of 5% or
more of the Voting Power of the outstanding Voting Shares; or
(2) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the
Beneficial Owner, directly or indirectly, of 5% or more of the Voting Power of
the then outstanding Voting Shares; or
(3) is an assignee of or has otherwise succeeded to any Voting
Shares which were, at any time within the two-year period immediately prior to
the date in question, Beneficially Owned by any 5% Shareholder, if such
assignment or succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the meaning of
the Securities Act of 1933;
provided, however, any Person who has Beneficially Owned all his, her or its
Voting Shares for two years or more shall not be deemed a 5% Shareholder.
(h) The term "40% Shareholder" shall mean any Person (other than the
Corporation or any Subsidiary) who or which:
(1) is the Beneficial Owner, directly or indirectly, of 40% or
more of the Voting Power of the outstanding Voting Shares; or
(2) is an Affiliate of the Corporation and at any time within
the two-year period immediately prior to the date in question was the
Beneficial Owner, directly or indirectly, of 40% or more of the Voting Power
of the then outstanding Voting Shares; or
(3) is an assignee of or has otherwise succeeded to any Voting
Shares which were at any time within the two-year period immediately prior to
the date in question Beneficially Owned by any 40% Shareholder, if such
assignment or succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the meaning of
the Securities Act of 1933.
(i) The term "Major Transaction" shall mean (1) any merger or
consolidation of this Corporation or a Subsidiary with or into a 20%
Shareholder, (2) any sale, lease, exchange, transfer or other disposition,
including without limitation, a mortgage or any other security device, of all
or any Substantial Part of the assets of this Corporation (including without
limitation any securities of a Subsidiary) or of a Subsidiary, to a 20%
Shareholder, (3) any merger or consolidation of a 20% Shareholder with or into
this Corporation or a Subsidiary, (4) any sale, lease, exchange, transfer or
other disposition of all or any Substantial Part of the assets of a 20%
Shareholder to the Corporation or a Subsidiary, (5) the issuance of any
securities of this Corporation or a Subsidiary to a 20% Shareholder, (6) the
acquisition by this Corporation or a Subsidiary of any securities of a 20%
Shareholder, (7) any reclassification of Voting Shares of this Corporation, or
any recapitalization involving Voting Shares of this Corporation, proposed by
a 20% Shareholder within five years after such 20% Shareholder became a 20%
Shareholder, (8) any loan or other extension of credit by the Corporation or a
Subsidiary to a 20% Shareholder or any guarantees by the Corporation or a
Subsidiary of any loan or other extension of credit by any Person to a 20%
Shareholder, and (9) any agreement, contract or other arrangement providing
for any of the transactions described in this definition of Major Transaction.
(j) The term "Market Price" means: the last closing sale price
immediately preceding the time in question of one of the shares in question on
the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such
shares are not quoted on the Composite Tape, on the New York Stock Exchange,
or, if such shares are not listed on such Exchange, on the principal United
States securities exchange registered under the Securities Exchange Act of
1934, on which such shares are listed, or, if such shares are not listed on
any such exchange, the last closing bid quotation with respect to one of such
shares immediately preceding the time in question of the National Association
of Securities Dealer, Inc. Automated Quotation System or any system then in
use (or any other system of reporting or ascertaining quotations then
available), or if such shares are not so quoted, the fair market value at the
time in question of one of such shares as determined by the Board in good
faith.
(k) The term "other consideration to be received" shall, for the
purposes of subparagraph 1(b) of Article VIII, include, without limitation,
Voting Shares of the Corporation retained by its existing public shareholders
in the event of a Major Transaction which is a merger or consolidation in
which the Corporation is the surviving corporation.
(l) The term "Person" shall mean and include any individual,
corporation, partnership or other person or entity and each member of any
"Person" as such term is defined in Section 13(d)(3) of the Securities
Exchange Act of 1934.
(m) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definitions of 5%, 20% or 40%
Shareholder, the term "Subsidiary" shall mean only a corporation of which a
majority of the Voting Power of its capital stock entitled to vote generally
in the election of directors is owned, directly or indirectly, by the
Corporation.
(n) The term "20% Shareholder" shall mean any Person (other then the
Corporation or any Subsidiary) who or which is the Beneficial Owner, directly
or indirectly, of 20% or more of the Voting Power of the outstanding Voting
Shares.
(o) The term "Substantial Part" shall mean more than ten percent of
the total assets of the Person or entity in question, as of the end of its
most recent fiscal year ending prior to the time the determination is being
made.
(p) The term "Voting Power" shall mean, with respect to a share of
capital stock, the number of votes that such share is entitled to cast
(disregarding the effect of cumulative voting, if applicable) at the time in
question and, in the case of a convertible security, computing such voting
power by reference to the greatest number of votes such security is entitled
to in the converted or unconverted status.
(q) The term "Voting Shares" shall mean all Common Shares and any
other shares entitled to vote for the election of Directors of the
Corporation.
2. For the purposes of determining whether a person is a 5%, 20% or 40%
Shareholder pursuant to these Articles, the number of Voting Shares deemed to
be outstanding shall include shares deemed owned through application of
subparagraph 1(b) of this Article VII but shall not include any other Voting
Shares which may be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or options, or
otherwise.
3. A majority of the Disinterested Directors of the Corporation shall have
the power and duty to determine for the purposes of these Articles, on the
basis of information known to them after reasonable inquiry, (a) whether a
Person is a 5%, 20% or 40% Shareholder, (b) the number of Voting Shares
Beneficially Owned by any Person, (c) whether a Person is an Affiliate or an
Associate of another Person, and (d) whether a transaction or a series of
transactions constitutes a Major Transaction or one of the transactions
specified in Section 2 of Article IX hereof. The good faith determination of a
majority of the Disinterested Directors shall be conclusive and binding for
all purposes of these Articles.
4. Nothing contained in these Articles shall be construed to relieve any
5%, 20% or 40% Shareholder from any fiduciary obligation imposed by law.
5. It shall be the duty of any 5%, 20% or 40% Shareholder:
(a) to give or cause to be given written notice to the Corporation,
immediately upon becoming a 5%, 20% or 40% Shareholder, of such Person's
status as a 5%, 20% or 40% Shareholder and of such other information as the
Corporation may reasonably require with respect to identifying all owners and
amount of ownership of the outstanding Voting Shares of which such 5%, 20% or
40% Shareholder is a Beneficial Owner, and
(b) to notify the Corporation promptly in writing of any change in the
information provided in subparagraph (a) of this Section 5; provided, however,
that the failure of a 5%, 20% or 40% Shareholder to comply with the provisions
of this Section 5 shall not in any way be construed to prevent the Corporation
from enforcing other provisions of these Articles.
ARTICLE VIII
------------
1. Subject to the provisions of any series of Preferred Shares which may at
the time be outstanding, any Major Transaction shall require the affirmative
vote of the holders of not less than 80% of the Voting Power of the
outstanding Voting Shares of the Corporation, which shall include the
affirmative vote of at least 50% of the Voting Power of the outstanding Voting
Shares held by shareholders other than the 20% Shareholder involved in such
Major Transaction, provided however that such voting requirement shall not be
applicable if:
(a) The Major Transaction was approved by the Board either (i) prior
to the 20% Shareholder involved in the Major Transaction having become a 20%
Shareholder, or (ii) after such 20% Shareholder became such but only if the
20% Shareholder has sought and obtained the unanimous approval by the Board of
such 20% Shareholder's acquisition of 20% or more of the outstanding Voting
Shares prior to such acquisition being consummated; or
(b) The Major Transaction involves solely the Corporation and a
Subsidiary none of whose stock is Beneficially Owned by a 20% Shareholder
(other than Beneficial Ownership arising solely because of control of the
Corporation); provided that each shareholder of the Corporation receives the
same type of consideration in such transaction in proportion to his
shareholdings; or
(c) Prior to becoming a 20% Shareholder, such 20% Shareholder made a
tender offer for Voting Shares which: (i) conformed in all respects to
federal laws and regulations governing such a transaction whether or not the
Corporation or such shares were then regulated by or registered under said
laws, (ii) committed such 20% Shareholder to take all shares tendered if it
took any shares, and (iii) resulted in such 20% Shareholder acquiring at least
75% of the Voting Power of the outstanding Voting Shares held by Persons other
than such 20% Shareholder.
ARTICLE IX
----------
1. Any purchase by the Corporation of Voting Shares from a 5% Shareholder,
other than pursuant to an offer to the holders of all of the outstanding
Voting Shares of the same class as those so purchased, at a per share price in
excess of the Market Price at the time of such purchase of the shares so
purchased, shall require the affirmative vote of the holders of that amount of
the Voting Power of the Voting Shares equal to the sum of (i) the Voting Power
of the Voting Shares of which the 5% Shareholder is the Beneficial Owner and
(ii) a majority of the Voting Power of the remaining outstanding Voting
Shares, voting together as a single class.
2. In addition to any affirmative vote required by law or these Articles of
Incorporation:
(a) any merger or consolidation of the Corporation or any Subsidiary
with (1) any 5% Shareholder or (2) any other corporation (whether or not
itself a 5% Shareholder) which is, or after such merger or consolidation would
be, an Affiliate of a 5% Shareholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any 5%
Shareholder or any Affiliate of any 5% Shareholder of any assets of the
Corporation or any Subsidiary having an aggregate Fair Market Value of
$2,000,000 or more; or
(c) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary having an aggregate Fair Market Value of
$2,000,000 or more to any 5% Shareholder or any Affiliate of any 5%
Shareholder in exchange for cash, securities or other property (or a
combination thereof); or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of a 5% Shareholder or
any Affiliate of any 5% Shareholder; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving a 5% Shareholder) which
has the effect, directly or indirectly, of increasing the proportionate share
of the outstanding shares of any class of equity or convertible securities of
the Corporation or any Subsidiary which is directly or indirectly owned by any
5% Shareholder or any Affiliate of any 5% Shareholder;
shall require either (a) the approval of a majority of the Disinterested
Directors or (b) the affirmative vote of the holders of that amount of Voting
Power of the Voting Shares equal to the sum of (1) the Voting Power of the
Voting Shares of which the 5% Shareholder is the Beneficial Owner and (2) a
majority of the Voting Power of the remaining outstanding Voting Shares,
voting together as a single class; provided, however, that no such vote shall
be required for (i) the purchase by the Corporation of Voting Shares from a 5%
Shareholder unless such vote is required by Section 1 of this Article IX, or
(ii) any transaction with a 5% Shareholder who is also a 20% Shareholder as
defined in Article VII and to which the provisions of Article VIII apply and
are complied with.
3. At any election of directors of the Corporation on or after the date on
which any Person becomes a 40% Shareholder, and until such time as there is no
longer any 40% Shareholder, there shall be cumulative voting for the election
of directors so that any holder of shares of Voting Stock entitled to vote in
such election shall be entitled to as many votes as shall equal the number of
directors to be elected multiplied by the number of votes to which such
shareholder's shares would be entitled except for the provisions of this
Section 3, and such shareholder may cast all of such votes for a single
director, or distribute such votes among as many candidates as such
shareholder sees fit. In any such election of directors, one or more
candidates for the Board may be nominated by a majority of the Disinterested
Directors or by any Person who is the Beneficial Owner of Voting Shares having
a Market Price of $250,000 or more. With respect to any candidates nominated
by a majority of the Disinterested Directors or by any Person who is the
Beneficial Owner of Voting Shares having a Market Price of $250,000 or more,
there shall be included in any proxy statement or other communication with
respect to such election to be sent to holders of Voting Shares by the
Corporation during the period in which there is a 40% Shareholder, at the
expense of the Corporation, descriptions and other statements of or with
respect to such candidates submitted by them or on their behalf, which shall
receive equal space, coverage and treatment as is received by candidates
nominated by the Board or management of the Corporation provided that such
information is received on a timely basis and complies with applicable federal
and state securities laws.
ARTICLE X
---------
1. The number of Directors of the Corporation shall be specified in the
Bylaws, and such number may from time to time be increased or decreased in
such manner as may be prescribed in the Bylaws, provided the number of
Directors of the Corporation shall not be less than three (3) so long as the
Corporation has only one shareholder and not less than seven (7) otherwise.
2. On or before the date on which the Corporation first has more than one
shareholder, Directors shall be classified with respect to the time for which
they shall severally hold office by dividing them into three classes, as
nearly equal in number as possible. One class shall serve for a term of
office to expire at the 1995 Annual Meeting of Shareholders. A second class
shall serve for a term of office to expire at the 1996 Annual Meeting of
Shareholders. A third class shall serve for a term of office to expire at the
1997 Annual Meeting of Shareholders. At each Annual Meeting of Shareholders
beginning with the 1995 Annual Meeting, the class of Directors then being
elected shall be elected to hold office for a term of office to expire at the
third succeeding Annual Meeting of Shareholders after their election. Each
Director shall hold office for the term for which elected and until his
successor shall have been elected and qualified.
3. Any Director, any class of Directors, or the entire Board of Directors
may be removed from office as a Director at any time (a) for cause, at a duly
called meeting of shareholders, by the affirmative vote of shareholders owning
shares representing at least eighty percent (80%) of the votes which all
shareholders would be entitled to cast at an Annual Election of Directors or
(b) without cause, at a duly called meeting of shareholders, by the
affirmative vote which satisfies the requirements of Article XII applicable to
an amendment, modification, or repeal of certain of these Articles.
4. Vacancies in the Board of Directors, including vacancies resulting from
an increase in the number of Directors, shall be filled only by a majority of
the Disinterested Directors then in office, though less than a quorum, or by
the sole Disinterested Director. All Directors elected to fill vacancies
shall hold office for a term expiring at the annual meeting of shareholders at
which the term of the class to which they have been elected expires. No
decrease in the number of Directors constituting the Board of Directors shall
shorten the term of any incumbent Director.
ARTICLE XI
----------
Any action by shareholders of the Corporation shall only be taken at a meeting
of shareholders and no action may be taken by written consent of shareholders
entitled to vote upon such action.
ARTICLE XII
-----------
The provisions set forth in this Article XII and in Articles III, VII, VIII,
IX, X and XI herein may not be repealed or amended in any respect, unless such
action is approved by the affirmative vote of the holders of not less than 80%
of the outstanding Voting Shares of the Corporation, subject to the provisions
of any class or series of Preferred Shares which may at the time be
outstanding, provided, however, that if there is a shareholder of the
Corporation which is a 20% Shareholder, such 80% vote must include the
affirmative vote of at least 50% of the outstanding Voting Shares held by
shareholders other than the 20% Shareholder.
ARTICLE XIII
------------
All corporate powers shall be exercised by the Board of Directors except as
otherwise provided by law or these Articles of Incorporation. The directors
shall have the full authority conferred by law upon the shareholders of the
Corporation to make and to alter or amend the Bylaws, including in
circumstances otherwise reserved by statute exclusively to the shareholders,
except that no alteration or amendment to the Bylaws or replacement thereof
shall be made except upon the majority vote of Directors, including the
affirmative vote of at least one director from each class specified in Article
X.
ARTICLE XIV
-----------
To the fullest extent permitted by law, a director of this Corporation shall
not be personally liable, as such, for monetary damages for any action taken
or for any failure to take any action.
IN WITNESS WHEREOF, the Corporation has caused these Amended and
Restated Articles of Incorporation to be executed and attested to this _____
day of June, 1994.
VWR NEW CORP.
By: (Signature)
---------------------------------
Jerrold B. Harris, President
ATTEST:
(Signature)
--------------------------------
Walter S. Sobon
Secretary
EXHIBIT 3.1
-----------
AMENDED AND RESTATED BYLAWS
OF
VWR CORPORATION
(a Pennsylvania corporation)
ARTICLE I
CAPITAL SHARES
--------------
1.1 Share Certificates
------------------
Share certificates of the Corporation shall be in such form as the Board of
Directors may from time to time prescribe. Every share certificate shall be
signed by officers designated by the Board of Directors and sealed with the
corporate seal. All certificates shall be countersigned by a transfer agent
and a registrar of the Corporation. Any and all signatures on any such
certificate and the corporate seal upon any such certificate may be facsimile.
In case any officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent, or registrar before such certificate is issued,
it may be issued by the Corporation with the same effect as if he were such
officer, transfer agent, or registrar at the date of issue.
1.2 Transfer of Shares
------------------
The shares of the Corporation shall be transferable on its books, or other
appropriate records, kept for such purpose by the holder thereof in person, or
by his duly authorized attorney, upon surrender and cancellation of his
certificates, properly endorsed, accompanied by authority to transfer. Upon
surrender, as above provided, of a share certificate, a new share certificate
for such aggregate number of shares as equals the aggregate number of shares
represented by the surrendered share certificate shall be issued to the
parties entitled thereto.
1.3 Holders of Shares of Record
---------------------------
The Corporation shall be entitled to treat the holder of record of any share
or shares of the Corporation as the holder in fact thereof and shall not be
bound to recognize any claim to, or interest in, such shares on the part of
any other person, whether or not the Corporation shall have expressed or given
other notice thereof.
1.4 Rules and Regulations Concerning the Issue, Transfer, and Registration
of Share Certificates
------------------------------------------------------------------------
The Board of Directors of the Corporation shall have powers and authority to
make all such rules and regulations as the Board may deem proper or expedient
concerning the issue, transfer and registration of share certificates for
shares of the Corporation. The Board of Directors shall have powers and
authority to appoint from time to time one (1), or more than one, transfer
agent and one (1), or more than one, registrar of shares of the Corporation to
be properly countersigned, and/or otherwise properly authenticated, by such
transfer agent or registrar.
ARTICLE II
MEETINGS OF SHAREHOLDERS
------------------------
2.1 Place of Meetings of Shareholders
---------------------------------
The annual meetings of shareholders of the Corporation shall be held at such
place as the Board of Directors may from time to time designate. The time and
place of the meeting shall be stated in the Notice to Shareholders.
2.2 Annual Meetings of Shareholders - Time - Business
-------------------------------------------------
The annual meeting of the shareholders of the Corporation for the election of
directors and for the transaction of any such other business as properly may
be submitted to such annual meeting shall be held at the hour and on the date
designated by the Board of Directors or the Executive Committee of the Board
of Directors; such date to be within 180 days of the end of the fiscal year.
Any and all business pertaining to the affairs of the Corporation may be
transacted at any such annual meeting of its shareholders, or at any
adjournment thereof, except only to the extent otherwise expressly prescribed
by the laws of the Commonwealth of Pennsylvania
2.3 Special Meetings of Shareholders
--------------------------------
Special meetings of the shareholders of the Corporation may be called at any
time by the Board of Directors.
2.4 Quorum at Shareholders' Meetings
--------------------------------
The holders of record of a majority of the issued and outstanding shares of
the Corporation present in person or represented by proxy at the shareholders
meeting and entitled to vote thereat shall constitute a quorum for the
transaction of business at any such meeting, except as may otherwise be
provided by law; but if there be less than a quorum present at any such
meeting, the holders of a majority of the shares so present or represented at
such meeting may adjourn the meeting from time to time.
2.5 Notice of Annual or Special Meetings of Shareholders
----------------------------------------------------
Either the Secretary, or an Assistant Secretary, of the Corporation shall give
written notice of the time and place of any annual or special meeting of the
shareholders of the Corporation to all shareholders entitled to vote at such
meeting, which notice shall be mailed to each shareholder at his address of
record at least ten (10) days prior to the date on which the meeting is to be
held. Notice of any special meeting shall state in general terms the purpose
for which the meeting is to be held.
2.6 Voting List of Shareholders and Fixing of Record Date for
Voting and Other Purposes
---------------------------------------------------------
The Secretary of the Corporation shall prepare and make, at least ten (10)
days before every meeting of shareholders, a complete list of the shareholders
entitled to vote at such meeting arranged in alphabetical order and showing
the address of each shareholder and the number of shares registered in the
name of each shareholder. Such list shall be open, for said period of ten
(10) days at the office of the Corporation, to the examination of any
shareholder for any purpose germane to the meeting and shall be produced and
kept at the time and place of such meeting during the whole time thereof, and
subject to the inspection of any shareholder who may be present. The share
ledger shall be the only evidence as to who are shareholders entitled to
examine such list or the books of the Corporation, or to vote in person or by
proxy at such meeting.
The Board of Directors shall fix a record date for the determination of those
entitled to notice of, and to vote at, any shareholders' meeting. The Board
of Directors is authorized to fix a record date for determination of the
shareholders entitled to receive payment of any dividend, or any allotment of
rights, or to exercise any such rights in respect of any change, conversion,
or exchange of capital shares, or the obtaining of the consent of shareholders
for any purpose. Only such shareholders as shall be shareholders of record on
a date so fixed shall be entitled to notice of, and to vote at, such
shareholders' meeting, or to receive payment of any such dividend, or to
receive such allotment of rights, or to exercise such rights, or to give such
consent, notwithstanding any transfer of any shares on the books of the
Corporation after any such record date fixed as aforesaid.
2.7 Officers of Meetings of Shareholders
------------------------------------
The officer designated by the Board of Directors as Chief Executive Officer
(or in his absence, the officer designated by the Board of Directors as Chief
Operating Officer) may call any meeting of shareholders to order and shall be
the Chairman thereof. If the Chairman of the Board of Directors and the
President are absent from any such meeting, then the Vice Chairman of the
Board of Directors shall be the Chairman thereof and shall preside at such
meeting. The Secretary of the Corporation, if present at any meeting of its
shareholders, shall act as the Secretary of such meeting. If the Secretary is
absent from any such meeting, the Chairman of such meeting may appoint a
Secretary for the meeting.
2.8 Proper Business for Shareholders' Meetings
------------------------------------------
At any annual or special meeting of the shareholders of the Corporation, only
business or other proposals properly brought before the meeting may be
transacted. To be properly brought before an annual or special meeting,
business or other proposals must be (i) specified in the notice of the meeting
(or any supplement thereto) given by or at the direction of the Board of
Directors, (ii) otherwise properly brought before the meeting by a
shareholder. For business to be properly brought before an annual meeting by
a shareholder, written notice thereof must have been received by the Secretary
of the Corporation from such shareholder not less than 120 days prior to the
date corresponding to the date on which the Corporation mailed its proxy
statement in connection with its previous year's annual meeting of
shareholders. For business to be properly brought before a special meeting by
a shareholder, or in the event the date of the annual meeting has been changed
by more than 30 calendar days from the date contemplated at the time of the
previous year's proxy statement, notice by the shareholder to be timely must
be received by the Secretary of the Corporation not later than the close of
business on the 10th day following the earlier of the day on which notice of
the date of the scheduled meeting was mailed or the day on which public
disclosure of such date was made.
Any such notice by a shareholder shall set forth as to each matter the
shareholder proposes to bring before the meeting (i) a brief description of
the business desired to be brought before the meeting, the reasons for
conducting such business at the meeting, and the language of the proposal,
(ii) the name and address of the shareholder proposing such business, (iii) a
representation that the shareholder is a holder of record of shares of the
Corporation entitled to vote at such meeting, and (iv) any material interest
of the shareholder in such business. Any such notice to the Corporation shall
also comply with all applicable provisions of Regulation 14A under the
Securities Exchange Act of 1934. No business shall be conducted at any
meeting of shareholders except in accordance with this paragraph, and the
Chairman of any meeting of shareholders and the Board of Directors may refuse
to permit any business to be brought before the meeting without compliance
with the foregoing procedures.
ARTICLE III
DIRECTORS
-----------
3.1 Number of Directors
-------------------
The authorized number of directors of the Corporation shall be not less than
seven nor more than fifteen (15). The Board of Directors, by resolution,
shall fix the number of directors to constitute the whole Board of Directors
of the Corporation, within the above limits, which number shall prevail until
a resolution is adopted by the Board of Directors prescribing a different
number of directors to be the authorized number of directors of the
Corporation.
3.2 Qualifications of Directors
---------------------------
No director of the Corporation need be a shareholder therein. Each director
of the Corporation shall be eligible to serve as follows:
3.2.1 Any director who has served as President or Chairman of the Board of
Directors of the Corporation shall be eligible to serve as director until the
regular meeting of the Board of Directors immediately following his 75th
birthday.
3.2.2 Any director who is, at the time of either of the events mentioned
herein, a full-time employee of the Corporation or one of its subsidiaries
shall not be eligible to serve after his 65th birthday or his retirement,
whichever event is earlier, except as provided in (.1) of this Section 3.2.
3.2.3 Any director other than one of the classes referred to in (.1) and (.2)
of this Section 3.2 shall be eligible to serve until the regular meeting of
the Board of Directors immediately following his 75th birthday.
3.3 Election of Directors - Terms of Office
---------------------------------------
3.3.1 The shareholders shall, at their annual meeting held each year, elect
the class of directors of the Corporation as set forth in the Corporation's
Articles of Incorporation.
3.3.2 Contemporaneously with a director's election or appointment to the
Board, the director shall execute and deliver to the Secretary of the
Corporation a letter of resignation which shall provide that it shall
automatically become effective only (1) on or after the first meeting of the
Board of Directors following such director's 72nd birthday and (2) upon
recommendation by the Nominating Committee of the Board of Directors to the
entire Board, and the approval of such recommendation by a majority of the
Disinterested Directors (as such term is defined in the Corporation's Articles
of Incorporation) that such director is no longer capable of serving as a
member of the Board of Directors because of the director's health,
availability to serve, or such other factors deemed relevant by the Nominating
Committee to a determination of such director's qualifications to be director
of the Corporation.
3.4 Failure to Elect Directors at Annual Meeting of the Shareholders
------------------------------------------------------------------
If the class of directors of the Corporation up for election at the annual
meeting shall not be elected as herein provided at the annual meeting in any
year of the shareholders of the Corporation, or at any adjournment of such
annual meeting, then, in such event, this Corporation shall not for that
reason be dissolved, but its directors at the time shall be deemed lawful
directors of the Corporation for all purposes and shall continue to hold
office as directors until their successors, respectively, are duly elected and
qualified.
3.5 Authority of the Board of Directors
-----------------------------------
The business of the Corporation shall be managed by its Board of Directors,
and such Board shall have and exercise full powers and authority in the
management, control, regulation, and conduct of the property, interests,
business transactions, and affairs of the Corporation; provided, however, that
the Executive Committee of the Board of Directors of the Corporation may
exercise the powers and authority of such Board pursuant, but subject to
(a) the limitations in Section 1731 of the Pennsylvania Business Corporation
Law of 1988 and (b) such restrictions imposed by the Board of Directors
pursuant to Section 4.1 hereof. The Board of Directors, at the first meeting
of the Board held after the Annual Meeting of Shareholders, shall elect a
Chairman, and may elect a Vice Chairman, of the Board of Directors.
3.6 Action by the Board of Directors or Any of Its Committees
without a Meeting or by Telephone
---------------------------------------------------------
Any action required or permitted to be taken at any meeting of the Board of
Directors, or of any committee of said Board, may be taken without a meeting
if a written consent thereto is signed by all members of the Board or of such
committee, as the case may be, and such written consent is filed with the
minutes of said Board or of said committee. Members of the Board of
Directors, or of any committee of said Board, may participate in a meeting of
such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.
3.7 Regular Meetings of the Board of Directors
------------------------------------------
Meetings of the Board of Directors of the Corporation may be held at its
corporate offices or at such other place or places as may be authorized by
such Board. Such Board shall also fix the time or times of such regular
meetings. No notice of any regularly scheduled meeting need be given. The
Chairman of the Board or the President may change the time and place of any
regular meeting by giving reasonable notice thereof, in writing or by
telephone, not later than twenty-four (24) hours before the time originally
fixed for such meeting. The Chairman of the Board shall act as Chairman of
the meetings; but in his absence, the President shall act as Chairman. The
Secretary of the Corporation shall act as Secretary of the meetings; but in
his absence, the Chairman of the meeting shall appoint a Secretary of the
meeting.
3.8 Special Meetings of the Board of Directors
------------------------------------------
Meetings of the Board of Directors of the Corporation may be held from time to
time on written call thereof by the Chairman of the Board of Directors or the
President made at any time at his own instance and discretion or on call
thereof made by such number of its directors as equals a majority of this
whole Board of Directors at the time. Any special meeting of the Board of
Directors may be held at such time or at such place designated in said call.
The time, place, and purpose of any special meeting of the Board of Directors
to be held pursuant to call and notice shall be stated both in the call and
the notice thereof, and no business other than that stated in such notice
shall be transacted, or acted upon, at such special meeting. Reasonable
notice of a special meeting shall be given, in writing or by telephone, by the
person or persons calling the meeting not later than seventy-two (72) hours
prior to the time set for the meeting; provided that the minimum notice period
shall be twenty-four (24) hours in the event of a tender or exchange offer to
purchase securities of the Corporation. Any special meeting of the Board of
Directors may be held at any time without previous call, or previous notice
thereof, if all directors of the Corporation either attend such meeting, or
consent in writing thereto, or if each director not present at such meeting
waives notice thereof. Any and all business and matters pertaining to the
affairs of the Corporation may be considered, transacted, and acted on at any
special meeting so held without previous call or previous notice.
3.9 Quorum of Directors
-------------------
A majority of the members of the Board of Directors as constituted for the
time being shall constitute a quorum for the transaction of business, but less
than a quorum may adjourn any meeting from time to time until a quorum is
present and without further notice being given.
3.10 Waiver of Notice of Meetings of the Board of Directors
------------------------------------------------------
Any director of the Corporation may waive in writing, at any time, any notice
of any meeting of the Board of Directors, or of any committee of said Board,
as may be provided by the laws of the Commonwealth of Pennsylvania or by the
Bylaws of the Corporation; and a written waiver thereof signed by any director
entitled to such notice, whether before or after the time stated therein,
shall be deemed equivalent to such notice legally given to such director.
3.11 Fees to the Directors for Attending Meetings of the Board of Directors
----------------------------------------------------------------------
The directors of the Corporation shall be entitled, as directors, to receive
an annual fee for service as directors and an attendance fee for meetings of
the Board of Directors and for meetings of committees of the Board of
Directors. Said fees shall be payable in the amounts and under provisions
prescribed from time to time by resolution of the Board of Directors, and the
Corporation is hereby authorized to pay such fees to each of its directors;
provided, however, that no director of the Corporation shall be entitled to
said fees if at the time he is otherwise employed by the Corporation at a
regular monthly or annual salary as a full-time employee.
3.12 Director Nominations
--------------------
Nominations of candidates for election as directors at any meeting of
shareholders may be made (i) by a majority of the Board of Directors, (ii) by
a majority of a duly authorized committee of the Board, (iii) if the
shareholders are, at the time, entitled to cumulate their votes in the
election of directors in accordance with Article IX of the Articles of
Incorporation of the Corporation by a majority of the "Disinterested
Directors," or (iv) by any "Person" who is the "Beneficial Owner" of "Voting
Shares" having a "Market Value" of $250,000 or more (as said terms are defined
in the Articles of Incorporation). Only persons nominated in accordance with
the procedures set forth in this Section 3.12 shall be eligible for election
as directors at a shareholders' meeting.
Nominations, other than those made by the Board of Directors, the
Disinterested Directors, or a duly authorized committee of the Board, shall be
made pursuant to timely notice in writing to the Secretary of the Corporation
as set forth in this Section 3.12. To be timely, a shareholder's notice shall
be received by the Secretary of the Corporation not less than 120 days prior
to the date corresponding to the date on which the Corporation mailed its
proxy statement in connection with the previous year's annual meeting of
shareholders; PROVIDED, HOWEVER, that if the date of the annual meeting has
been changed by more than 30 calendar days from the date contemplated at the
time of the previous year's proxy statement, notice by the shareholder to be
timely must be received by the Secretary of the Corporation not later than the
close of business on the 10th day following the earlier of the day on which
notice of the date of the scheduled meeting was mailed or the day on which
public disclosure of (such date) was made.
Such shareholder's notice shall set forth as to each person whom the
shareholder proposes to nominate for election or re-election as a director,
and as to the shareholder giving the notice (i) the name, age, business
address, and residence address of such person, (ii) the principal occupation
or employment of such person, (iii) the class and number of shares of the
Corporation which are beneficially owned by such person on the date of such
shareholder notice, and (iv) any other information relating to such person
that is required to be disclosed in solicitations of proxies with respect to
nominees for election as directors, pursuant to Regulation 14A under the
Securities Exchange Act of 1934 as amended.
No person shall be elected as a director of the Corporation unless nominated
in accordance with the procedures set forth in this Section 3.12. Ballots
bearing the names of all the persons who have been nominated for election as
directors at a shareholders' meeting in accordance with the procedures set
forth in this Section 3.12 shall be provided for use at the shareholders'
meeting.
The Board of Directors may reject any nomination by a shareholder not timely
made in accordance with the requirements of this Section 3.12. If the Board
of Directors, or a designated committee thereof, determines that the
information provided in a shareholder's notice does not satisfy the
informational requirements of this Section in any material respect, the
Secretary of the Corporation shall promptly notify such shareholder of the
deficiency in the notice. The shareholder shall have an opportunity to cure
the deficiency by providing additional information to the Secretary within
such period of time not to exceed five (5) days from the date such deficiency
notice is given to the shareholder as the Board of Directors or such committee
shall reasonably determine. If the deficiency is not cured within such
period, or if the Board of Directors or such committee reasonably determines
that the additional information provided by the shareholder, together with
information previously provided, does not satisfy the requirements of this
Section in any material respect, then the Board of Directors may reject such
shareholder's nomination. The Secretary of the Corporation shall notify a
shareholder in writing whether his nomination has been made in accordance with
the time and information requirements of this Section.
Notwithstanding the procedure set forth in this paragraph, if neither the
Board of Directors nor such committee makes a determination as to the validity
of any nominations by a shareholder, the presiding officer of the meeting
shall determine and declare at the meeting whether a nomination was made in
accordance with the terms of this Section. If the presiding officer
determines that a nomination was made in accordance with the terms of this
Section, he shall so declare at the meeting and ballots shall be provided for
use at the meeting with respect to such nominee. If the presiding officer
determines that a nomination was not made in accordance with the terms of this
Section, he shall so declare at the meeting and the defective nominations
shall be disregarded.
3.13 Rights Agreement
----------------
Notwithstanding any of the foregoing, any action stated in the Rights
Agreement between this Corporation and the First Jersey National Bank, dated
as of May 20, 1988, as such agreement may be amended from time to time (the
"Rights Agreement") to be taken by the Board of Directors after a Person has
become an Acquiring Person shall require the presence in office of Continuing
Directors and the concurrence of a majority of the Continuing Directors.
Capitalized terms in this Section shall have the meanings indicated in the
Rights Agreement.
ARTICLE IV
EXECUTIVE COMMITTEE AND OTHER
COMMITTEES OF THE BOARD OF DIRECTORS
------------------------------------
4.1 Executive Committee - Authority
-------------------------------
The Board of Directors shall each year, by resolution passed by the majority
of the whole Board of Directors, designate two (2) or more of its number to
constitute an Executive Committee which, to the extent provided in such
resolution, shall have and exercise the powers and authority of said Board in
the management of the business of the Corporation.
4.2 Other Committees
----------------
The Board of Directors may, by resolution passed by a majority of the whole
Board, appoint one (1) or more other committees to consist of one or more
directors. Any such committee shall have such powers as is given to it by the
resolution creating it.
4.3 Appointment of Chairmen of Committees
-------------------------------------
The Board of Directors shall appoint the Chairman of each committee of the
Board of Directors.
4.4 Quorum
------
At all meetings of any committee of the Board, a majority of the members of
such committee shall constitute a quorum for the transaction of business;
provided, however, that two (2) directors shall constitute a quorum for any
committee comprised of four (4) members. The act of the majority of the
directors present at any meeting of any committee at which there is a quorum
present shall be the act of such committee, except as may be otherwise
specifically provided by statute or by the Corporation's Articles of
Incorporation.
4.5 Notices
-------
Notice of the time and place of any meeting of any committee of the Board
shall be given in writing or by telephone by the person or persons calling the
meeting not less than twenty-four (24) hours prior to the time set for the
meeting.
ARTICLE V
OFFICERS AND THEIR POWERS AND DUTIES
------------------------------------
5.1 Authorized Officers
-------------------
The officers of the Corporation shall consist of a Chairman, a President, one
(1) or more Vice Presidents (who may be designated as Vice Presidents, Senior
Vice Presidents, or Executive Vice Presidents), a Secretary, and a Treasurer.
The Corporation may have such additional officers (hereinafter in the Bylaws
of the Corporation sometimes referred to as "additional officers") as its
Board of Directors may deem necessary for its business and may appoint from
time to time. The Board of Directors may designate one (1) of the officers as
the Chief Financial Officer of the Corporation.
The Board of Directors at any meeting of the Board may fill a vacancy in any
office.
The officers of the Corporation shall be elected at the first director's
meeting held after the annual election of directors, and they shall serve
until the next annual election of officers, subject to the right of the Board
of Directors to remove any officer at any time
The Board of Directors, by resolution duly adopted at any meeting thereof duly
held, may authorize and direct that any office of the Corporation, except the
offices of Chairman, President, Treasurer and Secretary, may be left unfilled
for any such period of time as the Board may fix in such resolution.
5.2 Qualifications of Officers
--------------------------
No officer of the Corporation need be a shareholder therein. No officer of the
Corporation, except the President, need be a director.
5.3 Powers and Duties of Officers
-----------------------------
The respective officers of the Corporation, subject, always, to control by its
Board of Directors, shall have such powers and authority and perform such
duties in the management and conduct of its property, business, and affairs as
from time to time may be prescribed with respect to such officers
respectively, by and under any Section of its Bylaws, by resolution of the
Board of Directors or by the Chief Executive Officer.
The Board of Directors may, by appointment, designate either the Chairman or
the President as the Chief Executive Officer of the Corporation and either of
said officers as the Chief Operating Officer of the Corporation.
5.4 Powers and Duties of the Chief Executive Officer and the
Chief Operating Officer
--------------------------------------------------------
The Chief Executive Officer of the Corporation shall have general charge and
supervision of the business of the Corporation and shall see that all orders
and resolutions of the Board of Directors and of the Executive Committee are
carried out. The Chief Executive Officer shall designate the duties of all
officers of the Corporation, which designations shall be subject to review by
the Board of Directors; provided, however, that the specific duties assigned
to the Chief Executive Officer, the Chief Operating Officer and the Secretary
shall not be changed except by amendment to these Bylaws and/or by resolution
of the Board of Directors, as appropriate.
The Chief Operating Officer of the Corporation shall have general supervisory
authority and responsibility for the day-to-day operations of the Corporation.
In the event of the death of either of the Chief Executive Officer or the
Chief Operating Officer or the permanent disability preventing such officer
from performing his duties, all officers normally reporting to such deceased
or disabled officer shall report to the Executive Committee. The Chairman of
the Board, President, Chairman of the Executive Committee, or Vice Chairman of
the Board shall call a meeting of the Board to be held within twenty (20) days
of the date of such death or disability for the purpose of electing a new
Chief Executive Officer or Chief Operating Officer, as the case may be.
Either the Chief Executive Officer or the Chief Operating Officer may sign in
the name of the Corporation all instruments required to be signed by the
Corporation in the ordinary course of its business. Each such officer shall
perform such other duties as may be assigned to him by the Board of Directors
or by these Bylaws.
5.5 Compensation to Officers
------------------------
The Board of Directors shall have the authority (a) to fix the compensation,
whether in the form of salary or otherwise, of all officers and employees of
the Corporation, either specifically or by formula applicable to particular
classes of officers or employees and (b) to authorize officers of the
Corporation to fix the compensation of subordinate employees. The Board of
Directors shall have authority to appoint a Compensation Committee and may
delegate to such committee authority to review the compensation of all
employees of the Corporation and its subsidiaries. The Compensation Committee
may also be authorized to make recommendations to the Board with respect to
compensation of the Corporate Officers. The Board of Directors may adopt the
recommendations of the Compensation Committee, which recommendations shall be
attached to the original minutes of the meeting of the Board at which such
recommendations are adopted.
ARTICLE VI
INDEMNITY OF DIRECTORS, OFFICERS, AND OTHER PERSONS
---------------------------------------------------
6.1 Right to Indemnification
------------------------
Each person who was or is made a party or is threatened to be made a party to
or is involved (including, without limitation, as a witness) in any
threatened, pending, or completed action, suit, or proceeding, whether civil,
derivative, criminal, administrative, or investigative (a "proceeding"), by
reason of the fact that he or she is or was a director or officer of the
Corporation or, being or having been such a director or officer, he or she or
a person of whom he or she is a legal representative, is or was serving at the
request of the Corporation as a director, officer, partner, trustee, employee,
or agent of another corporation or of a partnership, joint venture, trust, or
other enterprise, including service with respect to employee benefit plans,
whether the basis of such proceeding is alleged action or inaction in an
official capacity as a director, officer, partner, trustee, employee, or agent
or in any other capacity while serving as a director, officer, partner,
trustee, employee, or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent not prohibited by the Pennsylvania Business
Corporation Law of 1988, public policy, or other applicable law (including
binding regulations and orders of, and undertakings or other commitments with,
any governmental entity or agency) as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such amendment),
against all expense, liability, and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes, or penalties and amounts paid or to be
paid in settlement) actually and reasonably incurred or suffered by such
person in connection therewith. The right to indemnification granted in this
Section 6.1 shall be a contract right and shall include the right to be paid
by the Corporation the expenses incurred in defending any proceeding in
advance of its final disposition; provided, however, that the payment of such
expenses in advance of the final disposition of a proceeding shall be made
only upon delivery to the Corporation of an undertaking, by or on behalf of
such director or officer, to repay all amounts so advanced if it shall
ultimately be determined (including the final resolution of any suit brought
pursuant to Section 6.2) that such director or officer is not entitled to be
indemnified under this Section 6.1 or otherwise. The indemnification granted
in this Section 6.1 shall continue as to a person who has ceased to be a
director, officer, partner, trustee, employee, or agent, and shall inure to
the benefit of his or her heirs, executors, and administrators; provided,
however, that except as provided in Section 6.2 of this Article with respect
to proceedings seeking to enforce rights to indemnification, the Corporation
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors of the Corporation.
6.2 Right of Claimant to Bring Suit
-------------------------------
If a claim under Section 6.1 of this Article is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, except in the case of a claim for expenses incurred in
defending a proceeding in advance of its final disposition, in which case the
applicable period shall be twenty (20) days, the claimant may at any time
thereafter bring an action against the Corporation to recover the unpaid
amount of the claim and, to the extent successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting such
claim. The claimant shall be presumed to be entitled to indemnification under
this Article upon submission of a written claim (and, in an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance
of its final disposition, upon tender of any required undertaking) and
thereafter the Corporation shall have the burden of proof to overcome the
presumption that the claimant is so entitled. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or
its shareholders) to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper in the
circumstances nor an actual determination by the Corporation (including its
Board of Directors, independent legal counsel, or its shareholders) that the
claimant is not entitled to indemnification shall be a defense to the action
or create a presumption that the claimant is not so entitled. If an action is
brought pursuant to this Section, a final non-appealable order in such action
shall constitute the ultimate determination of the claimant's right to
indemnification.
6.3 Non-exclusivity of Rights
-------------------------
The right to indemnification and the payment of expenses incurred in defending
a proceeding in advance of its final disposition granted in this Article shall
not be exclusive of any other right which any person may have or hereafter
acquire under any statute, provision of the Articles of Incorporation, or
these Bylaws, agreement, vote of shareholders, or disinterested directors, or
otherwise. The Corporation shall have the express right to grant additional
indemnity without seeking further approval by the shareholders. All
applicable indemnity provisions and any applicable law shall be interpreted
and applied so as to provide a claimant with the broadest but non-duplicative
indemnity to which he or she is entitled.
6.4 Insurance, Contracts and Funding
--------------------------------
The Corporation may maintain insurance, at its expense, to protect itself and
any director, officer, partner, trustee, employee, or agent of the Corporation
or another corporation, partnership, joint venture, trust, or other enterprise
against any expense, liability, or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability, or
loss under the Pennsylvania Business Corporation Law of 1988. The Corporation
may enter into contracts granting indemnity to any director or officer of the
Corporation and may create a trust fund, grant a security interest, or use
other means (including, without limitation, a letter of credit) to secure or
ensure the payment of such amounts as may be necessary to effect
indemnification.
6.5 Indemnification of Employees and Agents of the Corporation
----------------------------------------------------------
The Corporation may, by action of its Board of Directors from time to time,
provide indemnification and pay expenses in advance of the final disposition
of a proceeding to employees and agents of the Corporation with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation or pursuant to rights granted pursuant to, or provided by, the
Pennsylvania Business Corporation Law of 1988 or otherwise.
6.6 Partial Indemnification
-----------------------
If a claimant is entitled to indemnification by the Corporation for some or a
portion of expenses, liabilities, or losses actually and reasonably incurred
by claimant in an investigation, defense, appeal, or settlement but not,
however, for the total amount thereof, the Corporation shall nevertheless
indemnify claimant for the portion of such expenses, liabilities, or losses to
which claimant is entitled.
6.7 Successors and Assigns
----------------------
All obligations of the Corporation to indemnify any director or officer shall
be (i) binding upon all successors and assigns of the Corporation (including
any transferee of all or substantially all of its assets and any successor by
merger or otherwise by operation of law) and (ii) binding on and inure to the
benefit of the spouse, heirs, personal representatives and estate of the
director or officer. The Corporation shall not effect any sale of
substantially all of its assets, merger, consolidation, or other
reorganization unless the surviving entity agrees in writing to assume all
such obligations of the Corporation.
ARTICLE VII
MISCELLANEOUS
-------------
7.1 Corporate Seal
--------------
The corporate seal of the Corporation shall be a seal consisting of two (2)
concentric circles, in the outer of which circles shall appear and be
inscribed the following words, to wit: "VWR CORPORATION PENNSYLVANIA," and in
the inner of which circles shall appear and be inscribed the following words
and figures, to wit: "CORPORATE SEAL 1994;" and such seal, as impressed on the
margin thereof, shall be the corporate seal of the Corporation until altered
or replaced pursuant to the following proviso to this Section 7.1; provided,
however, that at any time, and from time to time, such seal may be altered or
a new corporate seal for the Corporation may be authorized and adopted, at the
pleasure of its Board of Directors, by resolution duly adopted by such Board
at any meeting thereof duly held.
7.2 Fiscal Year
-----------
The fiscal year of the Corporation shall begin on January 1 and end December
31 of each year.
7.3 Amendments
----------
The Bylaws of the Corporation may be amended, altered, or repealed, in whole
or in part, or new Bylaws may be made for the Corporation from time to time by
the affirmative vote of the majority of its whole Board of Directors,
including the affirmative vote of at least one (1) director of each class, at
any meeting of such Board duly held, subject to the right and power of the
shareholders of the Corporation to change or repeal such Bylaws.
7.4 Severability
------------
In the event that any provision of these Bylaws is determined by a court to
require the Corporation to do or to fail to do an act which is in violation of
applicable law, such provision shall be limited or modified in its application
to the minimum extent necessary to avoid a violation of law and, as so limited
or modified, such provision and the balance of these Bylaws shall remain in
full force and effect.
(Signature)
--------------------------------
Walter S. Sobon, Secretary
CALHOUPT:[000000.VWR]VWR.BL
-18-
EXHIBIT 4
AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
VWR CORPORATION,
VWR SCIENTIFIC OF CANADA LTD.,
SCIENTIFIC HOLDINGS CORP.,
and
VWR SCIENTIFIC INTERNATIONAL CORPORATION
("Borrowers")
AND
CORESTATES BANK, N.A.,
for itself and as Agent,
SEATTLE-FIRST NATIONAL BANK,
BANK OF AMERICA CANADA,
and
PNC BANK, NATIONAL ASSOCIATION
("Banks")
October 27, 1994
AMENDED AND RESTATED
CREDIT AGREEMENT
----------------
THIS AMENDED AND RESTATED CREDIT AGREEMENT is made this 27th day
of October, 1994 by and among VWR CORPORATION, a Pennsylvania corporation with
offices at 1310 Goshen Parkway, West Chester, PA 19380 ("VWR"), VWR
SCIENTIFIC OF CANADA LTD., an Ontario corporation with offices at 175 Hanson
Street, Toronto, Ontario M4C 1A7, Canada ("VWR Canada"), SCIENTIFIC HOLDINGS
CORP., a Delaware corporation with offices at 300 Delaware Avenue, Suite 519,
Wilmington, DE 19801 ("Scientific Holdings") and VWR SCIENTIFIC INTERNATIONAL
CORPORATION, a Barbados corporation with offices at Ernst & Young Building,
Bay Street, St. Michael, Barbados ("VWR International") (VWR, VWR Canada,
Scientific Holdings, and VWR International each individually a "Borrower," and
individually and collectively, "Borrowers"); CORESTATES BANK, N.A., a
national banking association with offices at Broad and Chestnut Streets,
Philadelphia, PA 19101-7618 ("CoreStates"), SEATTLE-FIRST NATIONAL BANK, a
national banking association with offices at 701 Fifth Ave., 12th Floor,
Seattle, WA 98104 ("Seafirst"), BANK OF AMERICA CANADA, a Canadian chartered
bank with offices at 1055 Dunsmuir Street, Suite 574, Four Bentall Centre,
P.O. Box 49295, Vancouver, British Columbia V7X 1L3, Canada ("BOA Canada") and
PNC BANK, NATIONAL ASSOCIATION, a national banking association with offices at
Broad and Chestnut Streets, Philadelphia, PA 19110 ("PNC") (CoreStates,
Seafirst and PNC each individually a "U.S. Bank," and individually and
collectively, "U.S. Banks"; U.S. Banks and BOA Canada each individually a
"Bank" and individually and collectively, "Banks"); and CoreStates as Agent
for the Banks ("Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrowers and U.S. Banks are parties to that certain
Credit Agreement dated December 20, 1993, as amended (as amended, the
"Existing Credit Agreement") pursuant to which U.S. Banks agreed to lend to
Borrowers an aggregate amount not to exceed Eighty-Five Million Dollars
($85,000,000) outstanding at any time on a revolving credit basis, reducing to
Seventy-Five Million Dollars ($75,000,000) as of December 1, 1994; and
WHEREAS, the Existing Credit Agreement is being amended and
restated and replaced in its entirety by this Agreement, pursuant to which (A)
U.S. Banks agree on a several basis, subject to the terms and conditions
hereof, to lend to Borrowers on a joint and several basis a term loan in the
amount of Twenty Million Dollars ($20,000,000) and a revolving credit facility
of up to Eighty Million Dollars ($80,000,000) outstanding at any time reduced
by the amount of any Canadian Dollar Advances as provided in (B) below, and
(B) BOA Canada agrees, subject to the terms and conditions hereof, to lend to
Borrowers a revolving credit facility in Canadian Dollars in an aggregate
principal amount not to exceed Sixteen Million Dollars ($16,000,000) U.S.
Dollar Equivalent (as defined herein), to finance the Canlab Acquisition (as
defined below) and for working capital and general corporate purposes; and
WHEREAS, this Agreement amends and restates in its entirety the
Existing Credit Agreement, provided, that this Agreement shall not constitute
a novation and shall not be deemed to have extinguished or discharged the
indebtedness and obligations of the Borrowers under the Existing Credit
Agreement, or any collateral security therefor, all of which shall continue
under and be governed by this Agreement, the Collateral Security Documents (as
defined herein) and the other documents and agreements executed in connection
herewith; and
WHEREAS, CoreStates has extended certain letters of credit and
U.S. Banks may in the future extend additional letters of credit for the
benefit of Borrowers, and Borrowers and Banks have agreed that the liabilities
of Borrowers under such letters of credit shall be secured under the
Collateral Security Documents pari passu with the indebtedness hereunder, as
set forth herein and in the Collateral Security Documents.
NOW, THEREFORE, 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. Definitions. When used in this Agreement, the following
terms shall have the respective meanings set forth below. Certain terms
relating to interest rates are defined in Paragraph 2.6 and shall have the
respective meanings set forth therein.
"Advance" means a borrowing under the Revolving Credit Commitment
or the Canadian Commitment.
"Advance Request Form" means the certificate in the form attached
hereto as Exhibit A to be delivered by Borrowers to Agent as a condition of
each Advance.
"Affiliate" of any Person means: (i) any Person who directly or
indirectly owns, controls or holds five percent (5%) or more of the
outstanding beneficial interest in such Person; (ii) any entity of which five
percent (5%) or more of the outstanding beneficial interest is directly or
indirectly owned, controlled, or held by such Person; (iii) any entity which
directly or indirectly is under common control with such Person; or (iv) any
officer, director, partner or employee of such Person or of any entity that is
an Affiliate of such Person.
"Agent" means CoreStates in its capacity as agent for the Banks
hereunder, and its successors and assigns in such capacity.
"Agreement" means this Amended and Restated Credit Agreement and
all exhibits and schedules hereto, as each may be amended, modified or
supplemented from time to time.
"Bank" means individually, and "Banks" means individually and
collectively, CoreStates, Seafirst, BOA Canada and PNC, and their respective
successors and assigns.
"BOA Canada" means Bank of America Canada, a Canadian chartered
bank.
"Borrower" means individually, and "Borrowers" means individually
and collectively, VWR, VWR Canada, Scientific Holdings and VWR International,
together with such additional entities as may become parties hereto pursuant
to Paragraph 6.5(iv) hereof.
"Borrowing Base" means, as of any date of calculation, (i) the sum
of (A) eighty-five percent (85%) of Eligible Receivables of VWR and its
Consolidated Subsidiaries, plus (B) fifty percent (50%) of Eligible Inventory
of VWR and its Consolidated Subsidiaries less (ii) the aggregate amount
available to be drawn under all outstanding Permitted L/Cs and all
unreimbursed draws on account of any Permitted L/Cs.
"Business Day" means any day not a Saturday, Sunday or public
holiday under the laws of the Commonwealth of Pennsylvania.
"Canada Business Day" means any Business Day on which banks in
Toronto and Vancouver, Canada are open for business.
"Canadian Dollar Advance" means an Advance made by BOA Canada in
Canadian Dollars (CAN$) under the Canadian Dollar Commitment.
"Canadian Dollar Commitment" means the maximum principal amount
which BOA Canada has agreed to advance under Paragraph 2.1(b) hereof, being on
the date hereof Sixteen Million Dollars ($16,000,000) U.S. Dollar Equivalent,
as may be reduced from time to time pursuant to Paragraph 2.8 hereof.
"Canadian Dollar Loan" means the aggregate principal balance of
indebtedness advanced under the Canadian Dollar Commitment, together with all
interest accrued thereon and all fees, premiums and expenses in connection
therewith. The amount of the Canadian Dollar Loan for purposes of any
covenant, condition or obligation hereunder shall be deemed to be the U.S.
Dollar Equivalent thereof, except where the context expressly otherwise
requires.
"Canadian Dollar Note" means the Canadian Dollar Note in the form
of Exhibit C attached hereto evidencing Borrowers' indebtedness to BOA Canada
under the Canadian Dollar Loan, as may be amended, modified, extended or
restated from time to time.
"Canlab Acquisition" means the acquisition of the assets
constituting the Canlab division of Baxter International Inc. pursuant to the
Canlab Acquisition Agreements.
"Canlab Acquisition Agreements" means that certain Asset Purchase
Agreement dated September 6, 1994 among VWR, VWR Canada, Baxter Corporation
and Baxter World Trade Corporation, and the other documents and agreements
entered into in connection therewith.
"Capital Leases" means capital leases and subleases, as defined in
Statement 13 of the Financial Accounting Standards Board dated November 1976,
as amended and updated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and all rules and regulations in effect from time to time
thereunder.
"Collateral Security Documents" means the security agreement,
hypothecation agreement, assignments of book debts and other documents
required to be executed and delivered by Borrowers in favor of Agent pursuant
to Paragraph 4.1(b) hereof, as the same may be amended, modified or restated
from time to time.
"Commitments" means, individually and collectively, the Revolving
Credit Commitment and the Canadian Dollar Commitment.
"Consolidated Cash Flow Ratio" means for VWR and its Consolidated
Subsidiaries, as of the date of determination, with respect to the four most
recently-ended fiscal quarters, the ratio of: (a) earnings before interest
and taxes plus depreciation and amortization, to (b) interest expense, in each
case as defined in accordance with GAAP.
"Consolidated Current Ratio" means for VWR and its Consolidated
Subsidiaries, as of the date of determination, the ratio of Current Assets to
Current Liabilities.
"Consolidated Fixed Charge Coverage Ratio" means for VWR and its
Consolidated Subsidiaries, as of the date of determination, for any period,
the ratio of: (a) the sum of earnings before interest expense and taxes plus
depreciation and amortization, less capital expenditures, dividends and tax
expense for such period, to (b) the current portion of long term debt plus
interest expense, in each case as defined in accordance with GAAP.
"Consolidated Subsidiary" means individually and "Consolidated
Subsidiaries" means individually and collectively, all Subsidiaries whether
now existing or hereafter created or acquired whose financial results or
position are consolidated with VWR in its regular financial statements or for
federal income tax purposes.
"Consolidated Tangible Net Worth" means, as of the date of
determination, Tangible Net Worth of VWR and its Consolidated Subsidiaries.
"Consolidated Total Liabilities" means, as of the date of
determination, Total Liabilities for VWR and its Consolidated Subsidiaries.
"Consolidated Total Liabilities to Tangible Net Worth Ratio" means
for VWR and its Consolidated Subsidiaries, as of the date of determination,
the ratio of Consolidated Total Liabilities to Consolidated Tangible Net
Worth.
"Consolidated Working Capital" means, as of the date of
determination, Current Assets minus Current Liabilities.
"CoreStates" means CoreStates Bank, N.A., a national banking
association.
"Current Assets" means all assets of VWR and its Consolidated
Subsidiaries which should be properly classified as current assets in
accordance with GAAP; provided, that short term investments shall be valued at
cost or market, whichever is lower.
"Current Liabilities" means all indebtedness of VWR and its
Consolidated Subsidiaries maturing on demand or within a period of one (1)
year from the date of determination and which should be properly classified as
current liabilities in accordance with GAAP.
"Default" means an event, condition or circumstance the occurrence
of which, with the giving of notice or the passage of time or both, would
constitute an Event of Default.
"Dollars" and "$" mean United States dollars, except when preceded
by the word "Canadian" or the abbreviation "CAN."
"Eligible Inventory" means as of any date of determination
thereof, all inventory of VWR and its Consolidated Subsidiaries 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, less the following (determined without
duplication): (a) all inventory in which 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
party, and (c) inventory classified by Borrowers as "slow-moving" or
"obsolete."
"Eligible Receivables" means, as of any date of determination
thereof, the aggregate of all trade receivables of VWR and its Consolidated
Subsidiaries, less the following (determined without duplication):
(a) any receivable 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 any Borrower;
(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 as a bankrupt,
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 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 and Canada;
(g) any receivable which is not paid within ninety (90)
days of the invoice date;
(h) any receivable as to which 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;
(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.
"EPA" means the United States Environmental Protection Agency or
any successor thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and all rules and regulations in effect from
time to time thereunder.
"ERISA Affiliate" means any person that is a member of any group
or organization within the meaning of Code Sections 414(b), (c), (m) or (o) of
which a Borrower is a member.
"ESOP" means an employee stock ownership plan of VWR which
satisfies Section 4975(e)(7) of the Code, or any subsequent provision(s) of the
Code amendatory thereof, supplemental thereto, or substituted therefor.
"Event of Default" means an event described in Paragraph 8.1
hereof.
"Existing Credit Agreement" means the existing Credit Agreement
among Borrowers, Bank and Agent dated December 20, 1993, as amended.
"Funded Debt" means, as of the date of determination, the
aggregate principal amount of all indebtedness for: (i) borrowed money (other
than trade indebtedness incurred in the normal and ordinary course of business
for value received) having a final maturity of one year or more from the date
of determination; (ii) installment purchases of real or personal property;
(iii) Capital Leases; (iv) guaranties of Funded Debt of others, without
duplication and (v) letters of credit and letter of credit reimbursement
obligations, other than Permitted L/Cs.
"FX Calculation Date" means (a) each date of delivery to Agent and
BOA Canada of a monthly report as required by Paragraph 5.4 hereof, (b) each
date of delivery of an Advance Request Form in accordance with Paragraph 2.7
hereof, and (c) each other date on which Agent or BOA Canada shall, in its
discretion, calculate the U.S. Dollar Equivalent of the outstanding Canadian
Dollar Loan. Agent shall have no obligation to calculate the U.S. Dollar
Equivalent of the outstanding Canadian Dollar Loan other than on an FX
Calculation Date as set forth in clauses (a) and (b).
"GAAP" means generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board and/or in such other statements by
such other entity as Agent may reasonably approve, which are applicable in the
circumstances as of the date in question; and the requisite that such
principles be applied on a consistent basis shall mean that the accounting
principles observed in a current period are comparable in all material
respects to those applied in a preceding period.
"Loans" means, collectively, the Revolving Credit Loan, the
Canadian Dollar Loan and the Term Loan, together with all fees, premiums and
expenses hereunder.
"Material Adverse Effect" means either singly or in the aggregate,
a material adverse effect on the business, financial condition or prospects of
VWR and its Consolidated Subsidiaries taken as a whole as a result of any
condition, circumstance or contingency.
"Maximum Principal Amount" means the maximum principal amount of
the Revolving Credit Commitment which each Bank has agreed to lend as set
forth in Paragraph 2.3 hereof, provided that such Maximum Principal Amount
shall be reduced proportionately in the event of any reduction of the
Revolving Credit Commitment.
"Note" means individually, and "Notes" means individually and
collectively, the Revolving Credit Notes, the Canadian Dollar Notes and the
Term Notes, as each such Note may be amended, modified, extended or restated
from time to time.
"Participation Percentage" means, with respect to the Revolving
Credit Loan:
(a) for amounts up to and including the U.S. Dollar
Equivalent of the outstanding principal balance of the Canadian Dollar Loan,
(i) zero percent (0%) as to Seafirst, and (ii) as to each of CoreStates and
PNC, the ratio which such Bank's Maximum Principal Amount bears to the sum of
the Maximum Principal Amounts of CoreStates and PNC; and
(b) for amounts in excess of the U.S. Dollar Equivalent of
the outstanding principal balance of the Canadian Dollar Loan, as to each U.S.
Bank, the ratio which such Bank's Maximum Principal Amount bears to the sum of
the Maximum Principal Amounts of all Banks.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any successor thereto.
"Permitted L/Cs" means standby and documentary letters of credit
issued from time to time by a U.S. Bank for the account of Borrowers or any of
them, and any extensions, modifications, renewals or replacements thereof, to
the extent permitted by Paragraph 2.1(f) hereof.
"Permitted Overadvance" means, during each month set forth in the
left hand column below, the amount set forth in the right hand column below,
being the amount by which the aggregate outstanding principal amount of the
Loans may exceed the Borrowing Base during such month:
Month Permitted Overadvance
----- ---------------------
October 1994 $6,800,000
November 1994 $9,200,000
December 1994 $9,000,000
January 1995 $7,900,000
February 1995 $5,200,000
March 1995 $3,200,000
June 1995 $1,500,000
July 1995 $2,100,00
"Person" means any individual, corporation, partnership or other
entity.
"PNC" means PNC Bank, National Association, a national banking
association.
"Pro Rata Share" means, as to any Bank for any Loan or for the
aggregate Loans, the ratio which the outstanding principal balance of its
portion of such Loan(s) bears to the aggregate outstanding principal balance
of such Loan(s).
"Prohibited Transaction" means any prohibited transaction as
defined in Section 4975 of the Code or Section 406 of ERISA for which neither
an individual nor a class exemption has been issued by the United States
Department of Labor.
"Quarterly Net Worth Covenant Adjustment" means, for each fiscal
quarter, an amount equal to fifty (50%) of net profit after taxes for such
fiscal quarter (as determined in accordance with GAAP) with no reduction for
losses accrued during any such fiscal quarter.
"Reportable Event" means a reportable event described in Section
4043 of ERISA.
"Required Banks" means (i) Banks having Pro Rata Shares in the
aggregate Loans equal to sixty-five percent (65%) of the aggregate outstanding
principal balance of the Loans, or (ii) in the event that there is no
principal indebtedness outstanding under the Loans, Banks having Maximum
Principal Amounts equal to sixty-five percent (65%) of the aggregate Revolving
Credit Commitment.
"Revolving Credit Commitment" means the maximum aggregate
principal amount which U.S. Banks have severally agreed to advance to
Borrowers under Paragraph 2.1(a) hereof, being on the date hereof Eighty
Million Dollars ($80,000,000), as may be reduced from time to time pursuant to
Paragraph 2.8 hereof.
"Revolving Credit Loan" means the aggregate principal balance of
indebtedness advanced under the Revolving Credit Commitment, together with all
interest accrued thereon and all fees, premiums and expenses in connection
therewith.
"Revolving Credit Note" means individually, and "Revolving Credit
Notes" means individually and collectively, the Amended and Restated Revolving
Credit Notes in the form of Exhibit B attached hereto evidencing Borrowers'
indebtedness to U.S. Banks under the Revolving Credit Loan, as may be amended,
modified, extended or restated from time to time.
"Scientific Holdings" means Scientific Holdings Corp., a Delaware
corporation.
"Seafirst" means Seattle-First National Bank, a national banking
association.
"Subsidiary" means any corporation of which any of the Borrowers,
directly or indirectly, owns more than fifty percent (50%) of any class or
classes of securities.
"Tangible Net Worth" means, as of the date of determination, the
excess of (A) total assets but excluding from the determination of total
assets all assets which should be properly classified as intangible assets
under GAAP over (B) the sum of total liabilities and deferred items.
"Term Loan" means the outstanding principal balance of
indebtedness advanced to Borrowers pursuant to Paragraph 2.1(b) hereof,
together with all interest accrued thereon and all fees, premiums and expenses
in connection therewith.
"Term Loan Funding Date" means the date on which all of the
conditions to the advance of the Term Loan set forth in Paragraph 4.2 hereof
have been satisfied; provided, however, that if all such conditions are not
satisfied on or prior to December 31, 1994 then Banks shall have no
obligations hereunder to advance the Term Loan.
"Term Note" means individually, and "Term Notes" means
individually and collectively the Term Notes in the form of Exhibit D attached
hereto evidencing Borrowers' indebtedness to Banks under the Term Loan, as may
be amended, modified, extended or restated from time to time.
"Termination Date" means with respect to the Revolving Credit
Commitment or the Canadian Dollar Commitment the earlier of (i) October 30,
1997 (or such later date to which Banks shall have agreed to extend the
Commitments or either of them in writing pursuant to Paragraph 2.5(a)(ii)
hereof) or (ii) the date on which the Revolving Credit Commitment or the
Canadian Dollar Commitment is terminated pursuant to Paragraph 2.8 hereof.
"Total Liabilities" means, at any time, all liabilities and
deferred items which should be properly classified as liabilities in
accordance with GAAP.
"U.S. Banks" means CoreStates, SeaFirst and PNC, and their
respective successors and assigns.
"U.S. Dollar Advance" means an Advance made by U.S. Banks in
United States Dollars under the Revolving Credit Commitment.
"U.S. Dollar Equivalent" means, 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 the FX Calculation Date as reported in the Wall Street
Journal "Exchange Rates" section on such FX Calculation Date, or if not so
reported in the Wall Street Journal on such FX Calculation Date, then as
reasonably determined by Agent.
"VWR" means VWR Corporation, a Pennsylvania corporation.
"VWR Canada" means VWR Scientific of Canada Ltd., an Ontario
corporation.
"VWR International" means VWR Scientific International
Corporation, a Barbados company.
1.2. Accounting Terms. Except as otherwise provided herein,
financial and accounting terms used in the foregoing definitions or elsewhere
in this Agreement shall be defined in accordance with GAAP; provided, however,
that changes to GAAP after the date hereof which do not have any actual cash
effect on Borrowers' financial condition or results of operations or
Borrowers' ability to repay the Loans shall be excluded. Without limiting the
foregoing, in the event that any future change in GAAP, without more,
materially affects the Borrowers' compliance with any financial covenant
herein, Borrowers and Banks shall use their best efforts to modify such
covenant in order to account for such change and to secure for Banks the
intended benefits of such covenant.
SECTION 2
REVOLVING CREDIT AND TERM LOAN
------------------------------
2.1. The Facilities.
--------------
(a) Revolving Credit Commitment. From time to time prior
to the Termination Date, subject to the provisions hereof, each U.S. Bank on a
several basis up to its respective Maximum Principal Amount will make U.S.
Dollar Advances to Borrowers on a joint and several basis, which Borrowers may
repay and reborrow on a revolving basis, up to an aggregate outstanding
principal amount not to exceed at any time the amount of the Revolving Credit
Commitment as from time to time in effect minus the U.S. Dollar Equivalent of
the aggregate outstanding principal amount of the Canadian Dollar Loan;
provided, however, that (i) the maximum principal amount which may be advanced
to VWR International shall not exceed One Million Dollars ($1,000,000)
outstanding at any time and (ii) no Advance shall be made under the Revolving
Credit Commitment in violation of Paragraph 2.1(d) hereof
(b) Canadian Dollar Commitment. From time to time prior
to the Termination Date, subject to the provisions hereof, BOA Canada will
make Canadian Dollar Advances to Borrowers on a joint and several basis, which
Borrowers may repay and reborrow on a revolving basis, up to an aggregate
outstanding principal amount not to exceed at any time the Canadian Dollar
Commitment as from time to time in effect; provided, however, that (i) the
U.S. Dollar Equivalent of the outstanding principal balance of the Canadian
Dollar Loan shall not at any time exceed (A) the unborrowed portion of the
Revolving Credit Commitment or (B) fifty percent (50%) of the aggregate
outstanding principal balance of the Revolving Credit Loan, and (ii) no
Advance of the Canadian Dollar Loan will be made in violation of Paragraph
2.1(d) hereof.
(c) Term Loan. On the Term Loan Funding Date, subject to
the terms and conditions hereof including the conditions set forth in
Paragraph 4.2 hereof, U.S. Banks agree on a several basis to advance to
Borrowers on a joint and several basis a term loan in the aggregate principal
amount of Twenty Million Dollars ($20,000,000).
(d) Borrowing Base. The aggregate outstanding principal
amount of the Loans may not at any time exceed the Borrowing Base, provided,
however, that during the applicability of any Permitted Overadvance, so long
as no other Funded Debt is at that time outstanding, the aggregate outstanding
principal amount of the Loans may exceed the Borrowing Base by the Permitted
Overadvance. No Advance shall be made under the Revolving Credit Commitment
or Canadian Dollar Commitment if following such Advance the foregoing
limitations would be violated.
(e) Joint and Several Obligation. The obligations of
Borrowers hereunder are and shall be joint and several.
(f) Letters of Credit. Borrowers and Banks acknowledge
and agree that:
(i) U.S. Banks may from time to time, in the absence
of an Event of Default or Default hereunder, issue Permitted L/Cs and extend,
modify, renew or replace Permitted L/Cs previously issued, provided, however,
that the aggregate amount available to be drawn under all Permitted L/Cs, plus
unreimbursed draws thereunder, shall not exceed Five Million Dollars
($5,000,000);
(ii) Each U.S. Bank shall communicate with Agent
prior to issuing any Permitted L/C and prior to extending, modifying, renewing
or replacing any Permitted L/C to confirm that such issuance, extension,
modification, renewal or replacement will not violate the restrictions on
Permitted L/Cs under Paragraph 2.1(f)(i) hereof; and shall keep Agent promptly
informed of the status of any Permitted L/Cs issued by such U.S. Bank,
including without limitation the amount available to be drawn thereunder, the
amount of any unreimbursed draws thereunder, and the existence of any default
by Borrowers in connection therewith; and
(iii) All indebtedness and obligations of Borrowers
under Permitted L/Cs shall be secured under the Collateral Security Documents
pari passu with the indebtedness and obligations of Borrowers under this
Agreement.
(g) Authority of VWR. Each of the Borrowers hereby
irrevocably authorizes and requests that VWR execute all Advance Request
Forms, make all elections as to interest rates and take any other actions
required or permitted of Borrowers hereunder, on its respective behalf, in
each case with the same force and effect as if such entity had executed such
Advance Request Form, made such election or taken such other action itself.
(h) Amendment and Restatement. This Agreement amends and
restates the Existing Credit Agreement, and all amounts outstanding under the
Existing Credit Agreement shall be deemed to be outstanding under the
Revolving Credit Commitment pursuant to the terms hereof without interruption.
The execution and delivery of this Agreement and the documents and agreements
required in connection herewith shall not constitute a novation and shall not
in any circumstances be deemed to have extinguished or discharged the
indebtedness and obligations of Borrowers under the Existing Credit Agreement,
or any collateral security therefor, all of which shall continue under and be
governed by this Agreement, the Collateral Security Documents and the other
documents and agreements executed in connection herewith.
2.2. Promissory Notes.
----------------
(a) Revolving Credit Notes. The indebtedness of Borrowers
to each U.S. Bank under the Revolving Credit Loan will be evidenced by a
Revolving Credit Note executed by Borrowers in favor of such Bank, in the form
of Exhibit B. The original principal amount of each U.S. Bank's Revolving
Credit Note will be the amount identified in Paragraph 2.3 hereof as its
respective Maximum Principal Amount; provided, however, that notwithstanding
the face amount of each such Revolving Credit Note, Borrowers' liability under
each such Revolving Credit Note shall be limited at all times to the actual
indebtedness, principal, interest and fees, then outstanding thereunder. The
Revolving Credit Notes amend and restate the Revolving Credit Notes dated
December 20, 1993 executed and delivered by Borrowers to U.S. Banks in
connection with the Existing Credit Agreement (the "Prior Notes"), provided,
however, that the Revolving Credit Notes shall not constitute a novation and
shall not be deemed to have extinguished or discharged the indebtedness under
the Prior Notes, or any collateral security therefor, all of which shall
continue under and be governed by the Revolving Credit Notes and this
Agreement, the Collateral Security Documents and the other documents and
agreements executed in connection herewith. Promptly following the
effectiveness of this Agreement in accordance with Paragraph 4.1 hereof, each
U.S. Bank shall return to Borrowers the Prior Notes marked "superseded."
(b) Canadian Dollar Note. The indebtedness of Borrowers
under the Canadian Dollar Loan will be evidenced by a Canadian Dollar Note in
favor of BOA Canada in the form of Exhibit C hereto. The original principal
amount of the Canadian Dollar Note will be that amount of Canadian Dollars
from time to time having a U.S. Dollar Equivalent of Sixteen Million Dollars
($16,000,000); provided, however, that notwithstanding the face amount of such
Canadian Dollar Note, Borrowers' liability under each such Canadian Dollar
Note shall be limited at all times to the actual indebtedness, principal,
interest and fees, then outstanding thereunder.
(c) Term Notes. The indebtedness of Borrowers to each U.S.
Bank under the Term Loan will be evidenced by a Term Note executed by
Borrowers in favor of such U.S. Bank, in the form of Exhibit D hereto. The
original principal amount of each U.S. Bank's Term Note will be in the amount
of such U.S. Bank's participation therein, as set forth in Paragraph 2.3
hereof.
2.3. Banks' Participations.
---------------------
(a) U.S. Banks shall participate in making advances of the
Revolving Credit Loan and the Term Loan up to the amounts set forth in the
schedule below:
Revolving Credit
Loan Maximum
Bank Principal Amount Term Loan
---- ---------------- ---------
CoreStates $26,666,672 $ 6,666,668
Seafirst $26,666,664 $ 6,666,666
PNC $26,666,664 $ 6,666,666
=========== ===========
TOTAL: $80,000,000 $20,000,000
(b) BOA Canada shall make all Advances under the Canadian
Dollar Loan.
(c) As of each FX Calculation Date, Seafirst shall
purchase from CoreStates and PNC, or CoreStates and PNC shall purchase from
Seafirst, that portion of the outstanding principal balance of the Revolving
Credit Loan such that after such purchase each Bank participates in the
Revolving Credit Loan according to their respective Participation Percentages.
On each FX Calculation Date, Agent shall distribute prior to twelve o'clock
(12:00) noon Philadelphia time a statement of any required adjustments
pursuant to the provisions hereof, and the required adjustments shall be made
by delivery of immediately available funds not later than two o'clock (2:00)
p.m. Philadelphia time on such date. In the event that such funds are not
delivered at the required time, the amounts owing shall accrue interest at a
rate per annum equal to the effective rate for overnight federal funds in New
York as reported by the Federal Reserve Bank of New York for such day, or if
such day is not a Business Day, for the next preceding Business Day. A Bank
required to purchase a portion of the Revolving Credit Loan hereunder shall
receive interest on the portion of the Revolving Credit Loan required to be
purchased hereunder from the date on which funds are delivered by such Bank
hereunder prior to two o'clock (2:00) p.m. Philadelphia time.
2.4. Use of Proceeds. Funds advanced under the Loans shall be
used solely to finance the Canlab Acquisition, and for Borrowers' working
capital and general corporate purposes; provided, however, that the maximum
principal amount which may be advanced to VWR International shall not exceed
One Million Dollars ($1,000,000) outstanding at any time.
2.5. Repayment.
---------
(a) Revolving Credit Loan and Canadian
Dollar Loan.
----------------------------------
(i) The aggregate outstanding principal balance
under the Revolving Credit Loan and the Canadian Dollar Loan shall be due and
payable on the Termination Date with respect to such Loan.
(ii) The Termination Date as to either or both of the
Commitments may be extended not more than twice, each time for an additional
one (1) year period, if (A) between August 1 and September 1 of each of 1995
and 1996, Borrowers submit to Agent a written request for such extension,
which request Agent shall promptly forward to the Banks, and (B) all of the
Banks agree in writing to such requested extension not later than October 1 of
1995 or 1996, as applicable. Each Bank's decision to approve or decline an
extension request shall be in its sole discretion, without any obligation,
express or implied, to grant such extension, and may be based, without
limitation, upon (A) such Bank's full credit assessment of Borrowers at the
time of the request and (B) the ability of each Bank to propose to Agent,
which will negotiate with Borrowers on behalf of Banks, revised terms of and
conditions to this Agreement. If all of the Banks have not agreed in writing
to extend the Termination Date on or before October 1 of 1995 or 1996 as
applicable, then the Termination Date shall not be extended and the
Termination Date then in effect shall continue to apply as to all Banks.
(b) Term Loan. The aggregate outstanding principal
balance under the Term Loan shall be payable in twenty (20) consecutive
quarterly installments on the last day of each fiscal quarter as follows:
Payment due on last day
of each fiscal quarter
Fiscal quarter ending: during the period:
---------------------- -----------------------
12/31/94 - 9/30/95 $ 500,000
12/31/95 - 9/30/96 $ 750,000
12/31/96 - 9/30/97 $1,000,000
12/31/97 - 9/30/98 $1,250,000
12/31/98 - 9/30/99 $1,500,000
Notwithstanding the foregoing, the entire outstanding balance of the Term Loan
shall be due and payable on the earlier to occur of (A) September 30, 1999, or
(B) acceleration of the Term Loan in accordance with Paragraph 8.2 hereof.
2.6. Interest. Portions of the Loans shall bear interest on the
outstanding principal amount thereof in accordance with the following
provisions:
(a) Definitions. When used in this Agreement, the
following words and terms shall have the respective meanings set forth below:
"Adjusted CD Rate" means, for any Interest Period, as applied to a
Portion, the rate per annum (rounded upwards, if necessary, to the next 1/100
of 1%) determined pursuant to the following formula:
Adjusted CD Rate = Certificate of Deposit Rate + AR
---------------------------------
1 - RP
where RP = Reserve Percentage
AR = Assessment Rate
For purposes hereof, "Certificate of Deposit Rate" means, as applied to a
Portion, the arithmetic average of the prevailing rates per annum (rounded
upwards, if necessary, to the next 1/100 of 1%) bid on or about 9:00 a.m.
Philadelphia time or as soon thereafter as practicable on the first day of
such Interest Period by two (2) or more New York certificate of deposit
dealers of recognized standing for the purchase at face value of negotiable
certificates of deposit of Agent in amounts substantially equal to the Portion
as to which Borrowers may elect the Adjusted CD Rate to be applicable and with
a maturity of comparable duration to the Interest Period selected by Borrowers
for such Portion. The Adjusted CD Rate shall be adjusted on and as of the
effective day of any change in the Reserve Percentage or the Assessment Rate.
"Adjusted Libor Rate" means, for any Interest Period, as applied
to a Portion, the rate per annum (rounded upwards, if necessary to the next
1/16 of 1%) determined pursuant to the following formula:
Libor Rate
----------------------
1 - Reserve Percentage
For purposes hereof, "Libor Rate" shall mean, as applied to a Portion, the
arithmetic average of the rates of interest per annum (rounded upwards, if
necessary to the next 1/16 of 1%) at which Agent is offered deposits of United
States Dollars in the London interbank market on or about nine o'clock (9:00)
a.m. Philadelphia time two (2) Business Days prior to the commencement of such
Interest Period in amounts substantially equal to the Portion as to which
Borrowers may elect the Adjusted Libor Rate to be applicable and with a
maturity of comparable duration to the Interest Period selected by Borrowers
for such Portion. The Adjusted Libor Rate shall be adjusted on and as of the
effective date of any change in the Reserve Percentage.
"Applicable Canadian Dollar Margin" means (A) prior to March 31,
1995, one percent (1%) per annum, and (B) from and after March 31, 1995 the
percentage per annum set forth in the right hand column below that corresponds
to Borrowers' Consolidated Total Liabilities to Tangible Net Worth Ratio and
Consolidated Cash Flow Ratio (the Applicable Canadian Dollar Margin being the
lowest applicable percentage per annum as to which both ratio requirements
have been attained):
Consolidated Total Consolidated
Liabilities to Tangible Cash Flow Applicable
Net Worth Ratio Ratio Margin
----------------------- ------------ ----------
less than or equal greater than or 7/8%
to A (as defined below) equal to 5.0 to 1
less than or equal greater than or 1%
to B (as defined below) equal to 4.0 to 1
but less than 5.0
to 1
greater than B less than 4.0 to 1 1-1/8%
For each quarter ending as follows in any fiscal year:
March 31 June 30 September 30 December 31
-------- ------- ------------ --------
A = 3.2 to 1 3.4 to 1 3.5 to 1 3.2 to 1
B = 4.4 to 1 4.6 to 1 4.6 to 1 3.7 to 1
The Applicable Canadian Dollar Margin shall adjust automatically, as
appropriate, on the fifteenth (15th) day following delivery of a quarterly
compliance certificate in accordance with Paragraph 5.2 hereof.
"Applicable Margin" means (i) the Applicable Revolving Credit
Margin with respect to Portions of the Revolving Credit Loan, (ii) the
Applicable Canadian Dollar Margin with respect to Portions of the Canadian
Dollar Loan, and (ii) the Applicable Term Loan Margin with respect to Portions
of the Term Loan.
"Applicable Revolving Credit Margin" means (A) prior to March 31,
1995 (i) zero percent (0%) per annum with respect to Base Rate Portions,
(ii) one percent (1%) per annum with respect to Libor Portions, and (iii) one
percent (1%) per annum with respect to CD Portions, and (B) from and after
March 31, 1995 the percentage per annum set forth in the appropriate column
below that corresponds to Borrowers' Consolidated Total Liabilities to
Tangible Net Worth Ratio and Consolidated Cash Flow Ratio (the Applicable
Revolving Credit Margin being the lowest applicable percentage per annum as to
which both ratio requirements have been attained):
Consolidated Total Consolidated
Liabilities to Tangible Cash Flow Base Rate Libor CD
Net Worth Ratio Portions Ratio Portions Portions
------------------------ ------------ --------- --------
less than or equal greater than or 0% 7/8%
7/8%
to A (as defined below) equal to 5.0 to 1
less than or equal greater than or 0% 1%
1%
to B (as defined below) equal to 4.0 to 1
but less than 5.0
to 1
greater than B less than 4.0 to 1 0% 1-1/8%
1-1/8%
For each quarter ending as follows in any fiscal year:
March 31 June 30 September 30 December 31
-------- -------- ------------ -----------
A = 3.2 to 1 3.4 to 1 3.5 to 1 3.2 to 1
B = 4.4 to 1 4.6 to 1 4.6 to 1 3.7 to 1
The Applicable Revolving Credit Margin shall adjust automatically, as
appropriate, on the fifteenth (15th) day following delivery of a quarterly
compliance certificate in accordance with Paragraph 5.2 hereof.
"Applicable Term Loan Margin" means (A) prior to March 31, 1995
(i) one-quarter of one percent (1/4%) per annum with respect to Base Rate
Portions, (ii) one and one-quarter percent (1-1/4%) per annum with respect to
Libor Portions, and (iii) one and one-quarter percent (1-1/4%) per annum with
respect to CD Portions, and (B) from and after March 31, 1995, the percentage
per annum set forth in the appropriate column below that corresponds to
Borrowers' Consolidated Total Liabilities to Tangible New Worth Ratio and
Consolidated Cash Flow Ratio (the Applicable Term Loan Margin being the lowest
applicable percentage per annum as to which both ratio requirements have been
attained):
Consolidated Total Consolidated
Liabilities to Tangible Cash Flow Base Rate Libor CD
Net Worth Ratio Portions Ratio Portions Portions
------------------------ -------------- --------- --------
less than or equal greater than or 1/4% 1-1/8%
1-1/8%
to A (as defined below) equal to 5.0 to 1
less than or equal greater than or 1/4% 1-1/4%
1-1/4%
to B (as defined below) equal to 4.0 to 1
but less than 5.0
to
greater than B less than 4.0 to 1 1/4% 1-3/8%
1-3/8%
For each quarter ending as follows in any fiscal year:
March 31 June 30 September 30 December 31
-------- -------- ------------ -----------
A = 3.2 to 1 3.4 to 1 3.5 to 1 3.2 to 1
B = 4.4 to 1 4.6 to 1 4.6 to 1 3.7 to 1
The Applicable Term Loan Margin shall adjust automatically, as appropriate, on
the fifteenth (15th) day following delivery of a quarterly compliance
certificate in accordance with Paragraph 5.2 hereof.
"Assessment Rate" means, for any Interest Period, the annual
assessment rate (rounded upwards, if necessary, to the next higher 1/100 of
1%) incurred by a Bank to the Federal Deposit Insurance Corporation (or any
successor) for such Corporation's (or such successor's) insuring time deposits
made in United States dollars at offices of such Bank in the United States
during the most recent annual period for which such rate has been determined
prior to the commencement of any Interest Period during which the Adjusted CD
Rate is applicable.
"Base Rate" means the higher of (a) the Federal Funds Rate plus
one half of one percent (1/2%) per annum or (b) the Prime Rate.
"Base Rate Portion" means a Portion of the Loans as to which
Borrowers have elected (or are deemed to have elected), the interest rate
based on the Base Rate to be applicable.
"BOA Canada Cost of Funds" means 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 Borrowers, as determined by
BOA Canada.
"Canadian Dollar Portion" means a Portion of the Canadian Dollar
Loan.
"CD Portion" means a Portion of the Loans as to which Borrowers
have elected the interest rate based on the Adjusted CD Rate to be applicable.
"Eurocurrency" means deposits of United States Dollars offered in
the London Interbank Market.
"Federal Funds Rate" means, for any day, the effective rate of
interest for such day, as announced from time to time by the Board of
Governors of the Federal Reserve System as shown in publication H.15 as the
"Federal Funds Rate."
"Interest Period" means (i) with respect to CD Portions and
Canadian Dollar Portions, a period of thirty (30), sixty (60), ninety (90) or
one hundred eighty (180) days' duration, as Borrowers may elect, and (ii) with
respect to Libor Portions, a period of one (1), two (2), three (3) or six (6)
months' duration, as Borrowers may elect; provided, however, that (a) if any
Interest Period would otherwise end on a day which is not a Business Day, or
London Business Day in the case of (ii) above, such Interest Period shall be
extended to the next succeeding Business Day or London Business Day in the
case of (ii) above, subject to clauses (c) and (d) below; (b) interest shall
accrue from and including the first day of each Interest Period to, but
excluding, the day on which any Interest Period expires; (c) with respect to
any Interest Period for a Libor Portion, any Interest Period which would
otherwise end on a day which is not a London Business Day shall be extended to
the next succeeding London Business Day unless such London Business Day falls
in another calendar month, in which case such Interest Period shall end on the
next preceding London Business Day; and (d) with respect to any Interest
Period for a Libor Portion which begins on the last London 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) such interest
period shall end on the last London Business Day of a calendar month.
"Libor Portion" means a portion of the Loans as to which Borrowers
have elected the interest rate based on the Adjusted Libor Rate to be
applicable.
"London Business Day" means any Business Day on which banks in
London, England are open for business.
"Portion" means a portion of the Loans as to which Borrowers have
elected a specific interest rate and, except with respect to a Base Rate
Portion, an Interest Period.
"Prime Rate" means the rate of interest announced by Agent from
time to time as its prime rate.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, comprising Part 204 of Title 12, Code of Federal
Regulations, as amended and as may be amended from time to time, and any
successor thereto.
"Reserve" means, for any day, that reserve (expressed as a
decimal) which is in effect (whether or not actually incurred) with respect to
a Bank on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor or any other banking authority to which a
Bank is subject including any board or governmental or administrative agency
of the United States or any other jurisdiction to which a Bank is subject),
for determining the maximum reserve requirement (including without limitation
any basic, supplemental, marginal or emergency reserves) for (i) with respect
to any CD Portion, non-personal time deposits having a maturity comparable to
the related Interest Period and in an amount of $100,000 or more, (ii) with
respect to any Libor Portion, Eurocurrency liabilities as defined in
Regulation D or deposits in any non-United States or an international office
of such Bank in an amount and with maturities of comparable duration to the
Interest Period elected by Borrowers or (iii) with respect to any Canadian
Dollar Portion, Canadian Dollar funds obtained in the interbank market.
"Reserve Percentage" means, for Agent on any day, that percentage
(expressed as a decimal) prescribed by the Board of Governors of the Federal
Reserve System (or any successor or any other banking authority to which Agent
is subject, including any board or governmental or administrative agency of
the United States or any other jurisdiction to which Agent is subject), for
determining the reserve requirement (including without limitation any basic,
supplemental, marginal or emergency reserves) for (i) for purposes of
calculating the Adjusted CD Rate, non-personal time deposits having a maturity
comparable to the related Interest Period and in an amount of $100,000 or
more, and (ii) for purposes of calculating the Adjusted Libor Rate,
Eurocurrency liabilities as defined in Regulation D or deposits in any non-
United States or an international office of Agent in an amount and with
maturities of comparable duration to the Interest Period elected by Borrowers.
(b) Interest on Loans.
-----------------
(i) Revolving Credit Loan. At Borrowers' election
in accordance with the provisions of Paragraph 2.6(c) below, in the absence of
an Event of Default or Default hereunder, any Portion of the Revolving Credit
Loan shall bear interest at any one of the following rates:
(A) Base Rate. The Base Rate plus the
Applicable Revolving Credit Margin, such rate to change when and as the Prime
Rate or Federal Funds Rate, as applicable, changes.
(B) Adjusted Libor Rate. The Adjusted Libor
Rate plus the Applicable Revolving Credit Margin.
(C) Adjusted CD Rate. The Adjusted CD Rate
plus the Applicable Revolving Credit Margin.
(ii) Canadian Dollar Loan. In the absence of an
Event of Default or Default hereunder, the outstanding balance of the Canadian
Dollar Loan shall bear interest at a rate per annum equal to the BOA Canada
Cost of Funds plus the Applicable Canadian Dollar Margin.
(iii) Term Loan. At Borrowers' election in accordance
with the provisions of Paragraph 2.6(c) below, in the absence of an Event of
Default or Default hereunder, any Portion of the Term Loan shall bear interest
at any one of the following rates:
(A) Base Rate. The Base Rate plus the
Applicable Term Loan Margin, such rate to change when and as the Prime Rate or
the Federal Funds Rate, as applicable, changes.
(B) Adjusted Libor Rate. The Adjusted Libor
Rate plus the Applicable Term Loan Margin.
(C) Adjusted CD Rate. The Adjusted CD Rate
plus the Applicable Term Loan Margin.
(iv) Default Rate. Notwithstanding the foregoing,
upon the occurrence and during the continuance of an Event of Default or
Default hereunder, Borrowers hereby agree to pay to Banks interest on the
outstanding principal balance of the Loans at the rate of two percent (2%) per
annum in excess of the rates then available to and elected by Borrowers for
each Portion then outstanding through the end of the applicable Interest
Periods and, thereafter, at the rate of two percent (2%) per annum in excess
of the Base Rate plus the Applicable Margin.
(c) Procedure for Determining Rates of Interest.
(i) Revolving Credit Loan or Term Loan. If
Borrowers elect the Base Rate to be applicable to a Portion of the Revolving
Credit Loan or Term Loan, Borrowers must notify Agent of such election prior
to twelve o'clock (12:00) noon Philadelphia time on the date of the proposed
application of such Rate. If Borrowers elect the Adjusted Libor Rate to be
applicable to a Portion of the Revolving Credit Loan or Term Loan, Borrowers
must notify Agent of such election prior to twelve o'clock (12:00) noon
Philadelphia time at least two (2) London Business Days prior to the
commencement of the proposed Interest Period. If Borrowers elect the Adjusted
CD Rate to be applicable to a Portion of the Revolving Credit Loan or Term
Loan, Borrowers must notify Agent of such election prior to twelve o'clock
(12:00) noon at least one Business Day prior to the commencement of the
proposed Interest Period. Agent shall send notice by telecopy to Banks by
twelve thirty (12:30) p.m. on the Business Day of such request. If Borrowers
do not provide the applicable notice for the Adjusted Libor Rate or Adjusted
CD Rate, then Borrowers shall be deemed to have requested that the Base Rate
shall apply to any Portion which was subject to the rate of interest
applicable during an expiring Interest Period and to any new advance of the
Revolving Credit Loan until Borrowers shall have given proper notice of a
change in or determination of the rate of interest in accordance with this
Paragraph 2.6(c).
(ii) Canadian Dollar Loans. Borrowers shall notify
BOA Canada, with a copy to Agent (which Agent shall deliver to Banks within
one Business Day of receipt), of its selected Interest Period with respect to
any Canadian Dollar Portion outstanding or to be advanced, prior to twelve
o'clock (12:00) noon Philadelphia time at least one Canadian Business Day
prior to the commencement of the proposed Interest Period. If Borrowers fail
to provide the required notice of a selected Interest Period, the Borrowers
shall be deemed to have requested an Interest Period of thirty (30) days to be
applicable to any outstanding Portion with an expiring Interest Period and for
any new Advance of the Canadian Dollar Loan.
(iii) Number of Portions. Borrowers shall not elect
more than eight (8) different Portions (other than Base Rate Portions) to be
applicable to the Loans at one time.
(d) Payment and Calculation of Interest. Interest on Libor
Portions, CD Portions and Canadian Dollar Portions shall be due and payable on
the last day of the Interest Period for each such Portion; provided, however,
that with respect to CD Portions or Canadian Dollar Portions having an
Interest Period in excess of ninety (90) days, and Libor Portions having an
Interest Period in excess of three (3) months, interest shall be payable on
the ninetieth (90th) day and on the last day of such Interest Period.
Interest with respect to Base Rate Portions shall be due and payable on the
last day of each month. Interest shall be calculated in accordance with the
provisions of Paragraph 2.6(b) hereof; interest based on the Prime Rate or the
BOA Canada Cost of Funds shall be calculated on the basis of the actual number
of days elapsed over a year of three hundred sixty-five (365) days or three
hundred sixty-six (366) days, as the case may be, and interest based on the
Federal Funds Rate, the Adjusted CD Rate, or the Adjusted Libor Rate shall be
calculated in accordance with the provisions of Paragraph 2.6(b) on the basis
of the actual number of days elapsed over a year of three hundred sixty (360)
days. For the purposes of the Interest Act (Canada), in order to effectuate
the agreed rates of interest provided herein, (i) the principle of deemed
reinvestment of interest shall not apply to any interest calculation under
this Agreement or the Notes, (ii) the rates of interest stipulated under this
Agreement and the Notes 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 (for interest based on
the Prime Rate or the BOA Canada Cost of Funds) or 360 (in the case of
interest based on the Federal Funds Rate, the Adjusted CD Rate or the Adjusted
LIBOR Rate).
(e) Reserves. If at any time a Libor Portion, CD Portion
or Canadian Dollar Portion is outstanding and a Bank is subject to and incurs
a Reserve, Borrowers hereby agree to pay within five (5) Business Days of
written demand thereof from time to time, as billed by Agent on behalf of
itself or a Bank, such additional amount as is necessary to reimburse such
Bank for its costs in maintaining such Reserve. Such amount shall be computed
by taking into account the cost incurred by the Bank in maintaining such
Reserve in an amount equal to such Bank's ratable share of the Portion on
which such Reserve is incurred. The determination by Agent or a Bank of such
costs incurred and the allocation, if any, of such costs among Borrowers and
other customers which have similar arrangements with such Bank shall be prima
facie evidence of the correctness of the fact and the amount of such
additional costs.
(f) Special Provisions Applicable to Adjusted CD Rate.
(i) Change of CD Rates. The Adjusted CD Rate may be
automatically adjusted by Agent on a prospective basis to take into account
additional or increased costs incurred by Banks due to changes in applicable
law occurring subsequent to the commencement of the then applicable Interest
Period, including but not limited to changes in tax laws (except changes of
general applicability in corporate income tax laws) and changes in the reserve
requirements imposed by the Board of Governors of the Federal Reserve System
(or any successor), including the Reserve Percentage, and assessments imposed
by the Federal Deposit Insurance Corporation (or any successor), (including
the Assessment Rate as provided in the definition of "Assessment Rate" above),
that increase the cost to Banks of funding the Loans or a Portion thereof
bearing interest at the Adjusted CD Rate. Agent shall give Borrowers notice
of such determination and adjustment, and Borrowers may, by notice to Agent,
require Agent to furnish to Borrowers a statement setting forth the basis for
adjusting such Adjusted CD Rate and the method for determining the amount of
such adjustment. Thereafter, Borrowers shall either pay interest on the
affected Portion(s) at the increased rate or repay the Portion with respect to
which such adjustment is made in accordance with Paragraphs 2.9 and 2.10
hereof.
(ii) Unavailability of Adjusted CD Rate. In the
event that Borrowers shall have requested a quotation of the Adjusted CD Rate
in accordance with Paragraph 2.6(c) hereof and Agent shall have reasonably
determined that the Adjusted CD Rate will not adequately and fairly reflect
the cost of making or maintaining the principal amount of the Loans or a
Portion thereof specified by Borrowers during the Interest Period selected
because of the inability of Agent to obtain bids in the amount of a requested
Advance in accordance with the terms of the definition of Certificate of
Deposit Rate set forth above, Agent shall promptly give notice of such
determination to Borrowers. A determination by such Bank or Agent hereunder
shall be prima facie evidence of the correctness of the fact. Upon such a
determination, (i) the Banks' obligation to advance or maintain CD Portions
shall be suspended until Agent shall have notified Borrowers and Banks that
such conditions shall have ceased to exist, and (ii) Borrowers shall elect the
Adjusted Libor Rate or Base Rate to be applicable to Portions.
(g) Special Provisions Applicable to Adjusted Libor Rate.
The following special provisions shall apply to the Adjusted Libor Rate:
(i) Change of Adjusted Libor Rate. The Adjusted
Libor Rate may be automatically adjusted by Agent on a prospective basis to
take into account the additional or increased cost of maintaining any
necessary reserves for Eurocurrency deposits or increased costs due to changes
in applicable law occurring subsequent to the commencement of the then
applicable Interest Period, including but not limited to changes in tax laws
(except changes of general applicability in corporate income tax laws) and
changes in the reserve requirements imposed by the Board of Governors of the
Federal Reserve System (or any successor), including the Reserve Percentage,
that increase the cost to Banks of funding the Loans or a Portion thereof
bearing interest at the Adjusted Libor Rate. Agent shall give Borrowers
notice of such a determination and adjustment, and Borrowers may, by notice to
Agent require Agent to furnish to Borrowers a statement setting forth the
basis for adjusting such Adjusted Libor Rate and the method for determining
the amount of such adjustment. Thereafter, Borrowers shall either pay
interest on the affected Portion(s) of the increased rate or repay the Portion
with respect to which such adjustment is made in accordance with
Paragraphs 2.9 and 2.10 hereof.
(ii) Unavailability of Eurocurrency Funds. In the
event that Borrowers shall have requested a quotation of the Adjusted Libor
Rate in accordance with Paragraph 2.6(c) hereof and any Bank shall have
reasonably determined that Eurocurrency deposits equal to the amount of the
principal of the Portion and for the Interest Period specified are
unavailable, or that the Adjusted Libor Rate will not adequately and fairly
reflect the cost of making or maintaining the principal amount of the Portion
specified by Borrowers during the Interest Period specified or that by reason
of circumstances affecting Eurocurrency markets, adequate and reasonable means
do not exist for ascertaining the Adjusted Libor Rate applicable to the
specified Interest Period, Agent shall promptly give notice of such
determination to Borrowers that the Adjusted Libor Rate is not available. A
determination by any Bank hereunder shall be prima facie evidence of the
correctness of the fact. Upon such a determination, (i) the Banks' obligation
to advance or maintain Portions at the Adjusted Libor Rate shall be suspended
until Agent shall have notified Borrowers and Banks that such conditions shall
have ceased to exist, and (ii) Borrowers shall elect the Adjusted CD Rate or
Base Rate to be applicable to Portions.
(iii) Illegality. In the event that it becomes
unlawful for a Bank to maintain Eurocurrency liabilities sufficient to fund
such Bank's share of any Portion subject to the Adjusted Libor Rate, then such
Bank shall immediately notify Borrowers thereof (with a copy to Agent) and
such Bank's obligations hereunder to make or maintain Advances at the Adjusted
Libor Rate shall be suspended until such time as such Bank may again cause the
Adjusted Libor Rate to be applicable to its share of any Portion of the
outstanding principal balance of the Loans and such Bank's share of any
Portion shall then be subject to the Base Rate or the Adjusted CD Rate, as
Borrowers may elect in accordance with the provisions of this Paragraph 2.6.
2.7. Advances.
--------
(a) Borrowers shall give Agent written notice of each
requested Advance under the Revolving Credit Commitment, specifying the date
and amount thereof, prior to twelve o'clock (12:00) noon Philadelphia time at
least two (2) London Business Days prior to Advances to bear interest based on
the Adjusted Libor Rate, at least one Business Day prior to Advances to bear
interest based on the Adjusted CD Rate, and on the date of each requested
Advance to bear interest based on the Base Rate. Borrowers shall give BOA
Canada written notice of each requested Advance under the Canadian Dollar
Commitment, specifying the date and amount thereof, prior to twelve o'clock
(12:00) noon Philadelphia time at least one Canada Business Day prior to the
date of the requested Advance. Copies of such notices delivered to Agent in
connection with Advances under the Revolving Credit Commitment shall be sent
by Borrowers to BOA Canada, and copies of such notices delivered to BOA Canada
in connection with Advances under the Canadian Dollar Commitment shall be sent
by Borrowers to Agent (which Agent shall deliver to Banks within one Business
Day of receipt). Such notice shall be made by delivery of the Advance Request
Form and shall contain a statement certified by the chief financial officer or
other authorized officer of VWR, for itself and on behalf of Borrowers,
containing the following information and representations, which shall be
deemed affirmed and true and correct as of the date of the Advance Request
Form and the date of the requested Advance:
(i) the aggregate amount of the requested Advance,
which shall be in multiples of $250,000 but not less than the lesser of
$1,000,000 or the unborrowed balance of the Revolving Credit Commitment, or,
in the case of Canadian Dollar Advances, in multiples of CAN$250,000 but not
less than CAN$1,000,000, or the unborrowed balance of the Canadian Dollar
Commitment.
(ii) confirmation of the interest rate(s) Borrowers
have elected to apply to the Advance and, if more than one Portion has been
elected, the amount of the Portion as to which each interest rate shall apply,
together with the Interest Period applicable thereto;
(iii) confirmation of Borrowers' compliance with
Paragraphs 5.12 through 5.18 and 6.1 through 6.5 hereof prior to and following
such Advance, and calculation of the Borrowing Base as of the most recent
month end to Funded Debt taking into account the requested Advance and any
payments to the date of such Advance; and
(iv) statements that the representations and
warranties set forth in Section 3 hereof are true and correct as of the
applicable dates; that no Event of Default or Default hereunder has occurred
and is then continuing; and that there has been no Material Adverse Effect
since the date of this Agreement.
(b) The following procedures shall be applicable to any
Advance other than a Canadian Dollar Advance, which shall be governed by
subparagraph (c) below:
(i) Upon receiving a request for an Advance under
the Revolving Credit Commitment in accordance with subparagraph (a) above,
Agent shall send a copy of the Advance Request Form by telecopy to Banks by
twelve thirty (12:30) p.m. Philadelphia time on such day requesting that each
Bank advance funds to Agent so that each Bank participates in the requested
Advance in the same percentage as it participates in the Revolving Credit
Commitment. Each Bank shall advance its Participation Percentage of the
requested Advance to Agent by delivering immediately available funds in United
States Dollars at Agent's offices prior to two o'clock (2:00) p.m.
Philadelphia time on the date of the Advance. Subject to the satisfaction of
the terms and conditions hereof, Agent shall make the requested Advance
available to Borrowers by crediting such amount in United States Dollars to
VWR's deposit account with Agent not later than three o'clock (3:00) p.m.
Philadelphia time on the day of the requested Advance; provided, however, that
in the event Agent does not receive a Bank's share of the requested Advance by
such time as provided above, Agent shall not be obligated to advance such
Bank's share.
(ii) Unless Agent shall have been notified by a Bank
prior to the date such Bank's share of any such Advance is to be made by such
Bank that such Bank does not intend to make its share of such requested
Advance available to Agent, Agent may assume that such Bank has made such
proceeds available to Agent on such date, and Agent may, in reliance upon such
assumption (but shall not be obligated to), make available to Borrowers a
corresponding amount. If such corresponding amount is not in fact made
available to Agent by such Bank on the date the Advance is made, Agent shall
be entitled to recover such amount, on demand from such Bank, together with
interest thereon in respect of each day during the period commencing on the
date such amount was made available to Borrowers and ending on (but excluding)
the date Agent recovers such amount, from such Bank, at a rate per annum equal
to the effective rate for overnight federal funds in New York as reported by
the Federal Reserve Bank of New York for such day or, if such day is not a
Business Day, for the next preceding Business Day); or, if such Bank fails to
pay such amount forthwith upon such demand, from Borrowers together with
interest at the Base Rate plus the Applicable Revolving Credit Margin.
(iii) Each Bank shall receive interest on its share of
any Advance from the date on which the amount of its share of such Advance is
received by Agent and not from the date on which Agent makes such Advance (if
it elects to do so as permitted in clause (ii) of subparagraph 2.7(b)) unless
such dates are the same.
(c) Upon receiving a request for a Canadian Dollar Advance
in accordance with subparagraph (a) above, subject to satisfaction of the
terms and conditions hereof, BOA Canada shall make the requested Advance
available to Borrowers by crediting such amount in Canadian Dollars to VWR
Canada's deposit account with BOA Canada not later than two o'clock (2:00)
p.m. Philadelphia time on the day of the requested Advance or as otherwise
directed by Borrowers and agreed to by BOA Canada.
(d) Each request for an Advance pursuant to this Paragraph
2.7 shall be irrevocable and binding on Borrowers. In the case of any
Canadian Dollar Advance and any Advance which is to be based upon the Adjusted
CD Rate or Adjusted Libor Rate, Borrowers shall indemnify each Bank against
any loss, cost or expense incurred by such Bank as a result of any failure to
fulfill on or before the date specified in such request for an Advance the
applicable conditions set forth in Section 4, including, without limitation,
any loss (including loss of margin), cost or expense incurred by reason of the
liquidation or redeployment of deposits or other funds acquired by such Bank
to fund the Advance to be made by such Bank when such Advance, as a result of
such failure, is not made on such date, as calculated by BOA Canada (with
respect to Canadian Dollar Advances) or Agent (in all other cases) in
accordance with Exhibit E attached hereto.
2.8. Reduction and Termination of Commitment.
---------------------------------------
(a) Borrowers. Borrowers shall have the right at any time
and from time to time, upon three (3) Business Days' prior written notice to
Agent, to reduce the Commitments or either of them in whole or in part without
penalty or premium, provided that: (i) any such reduction shall be in an
aggregate amount not less than Five Million Dollars ($5,000,000) in the case
of either the Revolving Credit Commitment or the Canadian Dollar Commitment;
(ii) on the effective date of such reduction Borrowers shall make a prepayment
of the Revolving Credit Loan and the Canadian Dollar Loan, as applicable, in
an amount, if any, by which the aggregate outstanding principal balance of the
Revolving Credit Loan and the Canadian Dollar Loan, exceed the amount of the
Revolving Credit Commitment and Canadian Dollar Commitment, respectively, as
then so reduced, together with accrued interest on the amount so prepaid; and
(iii) if a Portion is paid prior to the last day of an Interest Period,
Borrowers shall pay any funding costs and loss of earnings and anticipated
profits which may arise in connection with such prepayment or repayment, as
calculated by Agent in accordance with Exhibit E attached hereto.
(b) Banks. Pursuant to Paragraph 8.2 hereof, Required
Banks shall have the right to terminate the Revolving Credit Commitment and
Canadian Dollar Commitment at any time, in their discretion and upon notice to
Borrowers (except in the case of an Event of Default pursuant to Paragraph
8.1(i), in which case the Commitments shall terminate without notice), upon
the occurrence of any Event of Default hereunder. Any payment following the
occurrence of an Event of Default, acceleration and demand for payment shall
include the payment of any amounts due pursuant to Paragraph 2.10 hereof.
(c) Restoration Only With Consent. Any termination or
reduction of the Commitments pursuant to subparagraphs 2.8(a) or (b) shall be
permanent, and the Commitments cannot thereafter be restored or increased
without the written consent of all U.S. Banks, in the case of the Revolving
Credit Commitment, or all Banks, in the case of the Canadian Dollar
Commitment.
2.9. Prepayment; Repayment.
---------------------
(a) Upon one (1) Business Day's prior written notice by
Borrowers to Agent (and to BOA Canada, in the case of the Canadian Dollar
Loan), Borrowers may prepay the outstanding principal balance of the Revolving
Credit Loan, the Canadian Dollar Loan or the Term Loan as specified by
Borrowers at any time without premium or penalty, except as provided in
Paragraph 2.10 below, provided that repayments of the Revolving Credit Loan or
the Canadian Dollar Loan prior to the Termination Date shall not reduce the
applicable Commitment and may be reborrowed and partial prepayments of the
Term Loan will be applied first to accrued interest and then to the
outstanding principal balance of the Term Loan in the inverse order of the
maturity of the installments thereof. Any prepayment shall be in an amount
equal to or in excess of $250,000 (or CAN$250,000, in the case of repayment of
the Canadian Dollar Loan).
(b) In the event that the aggregate U.S. Dollar Equivalent
of the outstanding principal amount of the Canadian Dollar Loan shall at any
time exceed (i) the unborrowed balance of the Revolving Credit Commitment,
(ii) fifty percent (50%) of the aggregate outstanding principal amount of the
Revolving Credit Loan or (iii) Sixteen Million Dollars ($16,000,000), the
Agent shall promptly give notice of such fact to Borrowers and the Banks, and
Borrowers shall be required to make a payment pursuant to Paragraph 2.9(a)
hereof such that the aggregate U.S. Dollar Equivalent of the principal amount
of the Canadian Dollar is less than or equal to the limits set forth in
clauses (i), (ii) and (iii) above. Such payment shall be made within five
Business Days following the date of such notice by Agent.
2.10. Funding Costs; Loss of Earnings. In connection with any
prepayment or repayment of any Canadian Dollar Portion or any Portion bearing
interest based on the Adjusted Libor Rate or Adjusted CD Rate made on other
than the last day of the applicable Interest Period, whether such prepayment
or repayment is voluntary, mandatory, by demand, acceleration or otherwise,
Borrowers shall pay to Banks all funding costs and loss of margin which may
arise in connection with such prepayment or repayment, as calculated by Agent
or the applicable Bank in accordance with Exhibit E attached hereto.
2.11. Payments.
--------
(a) Except as provided in Paragraph 2.11(b) below, all
payments of principal, interest, fees and other amounts due hereunder,
including any prepayments thereof, shall be made by Borrowers to Agent in
immediately available funds before twelve o'clock (12:00) noon Philadelphia
time on any Business Day at the principal office of Agent set forth at the
beginning of this Agreement, in U.S. Dollars.
(b) All payments on account of the Canadian Dollar Loan
shall be paid in Canadian Dollars to BOA Canada before twelve o'clock (12:00)
noon Philadelphia time on a Canadian Business Day at the office of BOA Canada
at 4 King Street West, Toronto, Ontario M5H 1B6 Canada, Attention: Loans
Department, 17th Floor.
(c) All payments shall be applied first to accrued or
unpaid interest, fees, premiums and expenses hereunder and then to outstanding
principal of the applicable Loan, in the inverse order of maturity of
installments, if any.
(d) Borrowers hereby authorize Agent and each Bank to
charge any Borrower's account with Agent or such Bank for all payments of
principal, interest and fees not paid when due hereunder.
2.12. Commitment Fee. Borrowers shall pay to Agent for the
account of U.S. Banks a non-refundable commitment fee at the rate of (i) one-
eighth of one percent (1/8%) per annum on the unborrowed portion of each
Bank's Maximum Principal Amount up to Five Million Dollars ($5,000,000), plus
(ii) three-eighths of one percent (3/8%) per annum on the unborrowed portion
of each Bank's Maximum Principal Amount in excess of Five Million Dollars
($5,000,000) (including in calculating the borrowed portion of Seafirst's
Maximum Principal Amount the U.S. Dollar Equivalent of the outstanding
Canadian Dollar Loan). Such commitment fee shall be payable at the offices of
Agent quarterly in arrears on the first Business Day of each January, April,
July and October, as billed by Agent. The commitment fee shall be calculated
on the daily unborrowed portions of each Bank's Maximum Principal Amount as
set forth above and on the basis of the actual number of days elapsed over a
year of three hundred sixty (360) days.
2.13. Facility Fee. On or before the date of this Agreement,
Borrowers shall have paid to Agent (for the ratable benefit of U.S. Banks) a
facility fee in the amount of One Hundred Twenty-Five Thousand Dollars
($125,000).
2.14. Agent Fee. Borrowers will pay to Agent an agent fee in
accordance with a letter agreement between Borrowers and Agent.
2.15. Regulatory Changes in Capital Requirements. If any Bank
shall have determined that the adoption after the date hereof of any law,
rule, regulation or guideline regarding capital adequacy, or any change in any
of the foregoing or in the interpretation or administration of any of the
foregoing by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
such Bank (or any lending office of such Bank) or such Bank's holding company
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Bank's capital or on the capital of such Bank's holding company if any, as a
consequence of this Agreement or the Advances made by such Bank pursuant
hereto to a level below that which such Bank or its holding company could have
achieved but for such adoption, change or compliance (taking into
consideration such Bank's policies and the policies of such Bank's holding
company with respect to capital adequacy) by an amount deemed by such Bank to
be material, then from time to time Borrowers shall pay to such Bank on demand
such additional amount or amounts as will compensate such Bank or its holding
company for any such reduction suffered together with interest on each such
amount from the date demanded until payment in full thereof at the rate
provided in Paragraph 2.6(b)(iii) hereof with respect to amounts not paid when
due. Such Bank will notify Borrowers of any event occurring after the date of
this Agreement that will entitle such Bank to compensation pursuant to this
Paragraph 2.15 as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation.
A certificate of such Bank setting forth such amount or amounts as
shall be necessary to compensate such Bank or its holding company as specified
above shall be delivered to Borrowers and shall be conclusive absent manifest
error. Borrowers shall pay such Bank the amount shown as due on any such
certificate delivered by such Bank within five (5) days after its receipt of
the same.
Failure on the part of any Bank to demand compensation for
increased costs or reduction in amounts received or receivable or reductions
in return on capital with respect to any period shall not constitute a waiver
of such Bank's right to demand compensation with respect to such period or any
other period.
SECTION 3
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Borrower represents and warrants to Banks as follows:
3.1. Organization and Good Standing. Each Borrower is duly
organized and existing and in good standing, under the laws of the
jurisdiction of its incorporation, has the power and authority to carry on its
business as now conducted, and is qualified to do business in all other
jurisdictions in which the nature of its activities or the character of its
properties requires such qualification.
3.2. Power and Authority; Validity of Agreement. Each Borrower
has the power and authority under the law of the jurisdiction of its
incorporation, and under its articles of incorporation and by-laws, to enter
into and perform this Agreement, the Notes, and all other agreements,
documents and actions required hereunder; and all actions (corporate or
otherwise) necessary or appropriate for Borrowers' execution and performance
of this Agreement, the Notes, and all other agreements, documents and actions
required hereunder have been taken, and, upon their execution, the same will
constitute the valid and binding obligations of Borrowers to the extent they
are a party thereto, enforceable in accordance with their respective terms.
3.3. No Violation of Laws or Agreements. The making and
performance of this Agreement, the Notes, and the other documents, agreements
and actions required of Borrowers hereunder will not violate any provisions of
any law or regulation, federal state or local, foreign or domestic, or the
articles of incorporation or by-laws of any Borrower or result in any breach
or violation of, or constitute a default under, any agreement or instrument by
which any Borrower or its or their property may be bound.
3.4. Material Contracts. There exists no material default under
any contracts or agreements material to any Borrower or its or their
respective businesses.
3.5. Compliance. Each Borrower is in compliance in all material
respects with all applicable laws and regulations, federal, state and local,
foreign and domestic, material to the conduct of its business and operations;
each Borrower possesses all the franchises, permits, licenses and grants of
authority necessary or required in the conduct of its business, except for
those franchises, permits, licenses and grants of authority the failure of
which to obtain would not have a material adverse effect on the financial
condition of the applicable Borrower and/or the conduct of its business; and
the same are valid, binding and enforceable and are not subject to any
proceedings or claims opposing the issuance, development or use thereof or
contesting the validity thereof; and no approvals, waivers or consents,
governmental (federal, state or local), or non-governmental under the terms of
contracts or otherwise, are required by reason of or in connection with its
execution and performance of this Agreement, the Notes, and all other
agreements, documents and actions required hereunder.
3.6. Litigation. Except as set forth on Exhibit F attached
hereto, there are no actions, suits, proceedings or claims which are pending
or, to the best of its knowledge or information, threatened against a Borrower
which, if adversely resolved, would substantially or materially affect its
financial condition or business.
3.7. Title to Assets. Each Borrower has good and marketable
title to all of its properties and assets free and clear of any liens and
encumbrances, except the liens and encumbrances in favor of Banks hereunder
and those permitted pursuant to Paragraph 6.3 hereof, and all such assets are
in good order and repair and fully covered by the insurance required under
Paragraph 5.6 hereof.
3.8. Capital Stock. The shares of the capital stock of each
Borrower are validly issued, fully paid and non-assessable, and the issuance
and sale thereof was in compliance with all applicable federal and state
securities and other applicable laws and other contractual restrictions.
3.9. Accuracy of Information. All information furnished to Banks
concerning the financial condition of Borrowers, including the annual
financial statement for VWR and its Consolidated Subsidiaries for the period
ending December 31, 1993, copies of which have been furnished to Banks, have
been prepared in accordance with GAAP and fairly present the financial
condition of VWR and its Consolidated Subsidiaries as of the dates and for the
periods covered and disclose all liabilities required to be disclosed by GAAP
of VWR and its Consolidated Subsidiaries and there have been no material
adverse changes in the financial condition or business(es) of VWR and its
Consolidated Subsidiaries from the date of such statements to the date hereof.
3.10. Taxes and Assessments. Each Borrower has filed all
required tax returns or has filed for extensions of time for the filing
thereof, and has paid all applicable federal, state and local taxes, other
than (i) taxes not yet due or which may be paid hereafter without penalty, or
(ii) taxes which are being contested by applicable proceedings and for which
reserves are being maintained in accordance with GAAP, and no Borrower has any
knowledge of any deficiency or additional assessment in connection therewith
not provided for in the financial statements required hereunder.
3.11. Indebtedness. Borrowers have no presently outstanding
indebtedness or obligations, including contingent obligations and obligations
under leases of property from others, except the indebtedness and obligations
described in Exhibit F hereto and in the financial statements which have been
furnished to Banks.
3.12. Investments. Borrowers have no: (i) Subsidiaries or
Affiliates, except that VWR owns Scientific Holdings and VWR International,
and Scientific Holdings owns VWR Canada, and (ii) investments in or loans to
any other individuals or business entities, except as described in Exhibit F
hereto.
3.13. ERISA. Each Borrower is in compliance in all material
respects with all applicable provisions of ERISA; and,
(a) Neither a Borrower, any Subsidiary nor any ERISA
Affiliate maintains or contributes to any multiemployer plan (as defined in
Section 4001 of ERISA) under which a Borrower, any Subsidiary or any ERISA
Affiliate has any unfunded obligation to contribute or has incurred any other
unfunded liability or would have any withdrawal liability if they fully
withdrew as of the date the representation is being made.
(b) Neither a Borrower, nor any Subsidiary nor any ERISA
Affiliate, sponsors or maintains any defined benefit pension plan under which
there is an accumulated funding deficiency within the meaning of Section 412
of the Code, whether or not waived.
(c) The liability for accrued benefits under each defined
benefit pension plan that will be sponsored or maintained by each Borrower,
any Subsidiary or any ERISA Affiliate (determined on the basis of the
actuarial assumptions utilized by the actuary for the plan in preparing the
most recent Annual Report) does not exceed the aggregate fair market value of
the assets under each such defined benefit pension plan.
(d) The aggregate liability of Borrowers and any Subsidiary and any
ERISA Affiliate arising out of or relating to a failure of any employee
pension benefit plan within the meaning of Section 3(2) of ERISA
multiemployer pension plan to which a Borrower, any Subsidiary or any ERISA
Affiliate is or has been required to contribute, to comply with the provisions
of ERISA or the Code, will not have a material adverse effect upon the
business, operations or financial condition of the Borrowers or any
Subsidiary.
(e) There does not exist any unfunded liability
(determined on the basis of actuarial assumptions utilized by the actuary for
the plan in preparing the most recent Annual Report) of a Borrower, any
Subsidiary or ERISA Affiliate under any plan, program or arrangement providing
post-retirement life or health benefits, except for the unfunded liability for
retiree health benefits reflected in the financial statements of Borrowers as
a result of the implementation of Standard 106 of the Financial Accounting
Standards Board.
(f) There has been no Prohibited Transaction with respect
to any employee benefit plan which could result in any material adverse effect
upon the business, operations or financial condition of Borrowers or any
Subsidiary.
(g) Neither a Borrower, any Subsidiary nor any other ERISA
Affiliate has instituted or intends to institute proceedings to terminate any
employee pension benefit plan and no multiemployer pension plan is in
reorganization (as defined in Section 4241(a) of ERISA).
3.14. Fees and Commissions. No Borrower owes any fees or
commissions of any kind, and knows of no claim for any fees or commissions, in
connection with Borrowers' obtaining the Loans from Banks, except those
provided herein.
3.15. No Extension of Credit for Securities. No Borrower is now,
nor at any time has it been engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing
or carrying any securities. The proceeds of the Loans shall be used by
Borrowers as set forth in Paragraph 2.4 hereof and none of the proceeds of the
Loans will be used, directly or indirectly, to purchase or carry margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System.
3.16. Perfection of Security Interest. Upon the filing of the
financing statements and registrations covering all the security interests
created by the Collateral Security Documents, in all places as, in the opinion
of counsel for Borrowers, are necessary to perfect said security interests, no
further action, including any filing or recording of any document, is
necessary in order to establish, perfect and maintain a first priority
security interests in the assets covered by the Collateral Security Documents,
except for the liens permitted by Paragraph 6.3 hereof and except for the
periodic filing of continuation statements with respect to financing
statements and registrations filed under the Uniform Commercial Code or
comparable provisions of the applicable jurisdiction(s).
3.17. Purchase Documents.
------------------
(a) Delivery. Complete and correct copies of the Canlab
Acquisition Agreements have been provided to Banks.
(b) Validity. VWR and VWR Canada each has the power and
authority under the laws of its respective jurisdiction of incorporation and
under its respective articles of incorporation and by-laws to enter into and
perform the Canlab Acquisition Agreements; all actions (corporate or
otherwise) necessary or appropriate for the execution and performance of the
Canlab Acquisition Agreements by VWR and VWR Canada have been taken; and the
Canlab 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
Canlab Acquisition Agreements will not violate any provision of any law or
regulation, federal, state or local, including without limitation all state
corporate laws and judicial precedents of the jurisdiction of incorporation of
VWR and VWR Canada, respectively, and will not violate any provisions of the
articles of incorporation and by-laws of VWR or VWR Canada, or constitute a
default under any agreement by which VWR or VWR Canada or their property may
be bound.
3.18. Hazardous Wastes, Substances and Petroleum Products.
---------------------------------------------------
(a) Each Borrower: (i) has received all permits, licenses,
authorizations and approvals and filed all notifications and reports necessary
to carry on its businesses; and (ii) is in compliance with all material
federal, state or local, foreign or domestic, laws and regulations governing
the control, removal, spill, release or discharge of hazardous or toxic
wastes, substances and petroleum products, including without limitation as
provided in the provisions of and the regulations under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendment and Reauthorization Act of 1986, the Solid Waste
Disposal Act, the Clean Water Act and the Clean Air Act, and any regulations
thereunder, the Resource Conservation and Recovery Act of 1976, the Federal
Water Pollution Control Act Amendments of 1972, and the Hazardous Materials
Transportation Act (all of the foregoing enumerated and non-enumerated
statutes, including without limitation any applicable state or local statutes,
as amended, collectively the "Environmental Control Statutes").
(b) Except as set forth on Exhibit F attached hereto, no
Borrower has given any written or oral notice to the Environmental Protection
Agency ("EPA") or any state or local or foreign agency or governmental body
with regard to any actual or imminently threatened removal, spill, release or
discharge of hazardous or toxic wastes, substances or petroleum products on
properties owned or leased by such Borrowers or in connection with the conduct
of its business and operations and, to the best of Borrowers' knowledge, there
are no circumstances, processes, facilities, operations, equipment or any
other activities at, on or under any such properties that constitute a
material breach of or material non-compliance with any of the Environmental
Control Statutes.
(c) Except as set forth on Exhibit F attached hereto, no
Borrower has received notice that it is potentially responsible for costs of
clean-up of any actual or imminently threatened spill, release or discharge of
hazardous or toxic wastes or substances or petroleum products pursuant to any
Environmental Control Statute. Exhibit F attached hereto does not include
notice with respect to matters that are no longer pending.
3.19. Solvency. To the best of VWR's knowledge, VWR is, and
after receipt and application of the first advance will be, solvent such that:
(i) the fair value of its assets (including without limitation the fair
salable value of the goodwill and other intangible property of VWR) is greater
than the total amount of its liabilities, including without limitation,
contingent liabilities, (ii) the present fair salable value of its assets
(including without limitation the fair salable value of the goodwill and other
intangible property of VWR) is not less than the amount that will be required
to pay the probable liability on its debts as they become absolute and
matured, and (iii) it is able to realize upon its assets and pay its debts and
other liabilities, contingent obligations and other commitments as they mature
in the normal course of business. VWR (i) 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 (ii) 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.
For purposes of this Paragraph 3.19, in computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be computed
at the amount which, in light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual mature liability.
3.20. Senior Debt Status. The obligations of Borrowers under
this Agreement and the Notes do rank and will rank senior in priority of
payment and lien to all other indebtedness of Borrowers except for any
indebtedness of Borrowers under the Permitted L/Cs, which shall rank pari
passu with the indebtedness of Borrowers under this Agreement and the Notes,
and except for indebtedness of Borrowers to the extent secured by liens
permitted pursuant to Paragraph 6.3 hereof.
3.21. No Burdensome Agreements. No Borrower is a party to or
bound by any agreement, contract, instrument, understanding or commitment of
any kind or subject to any corporate or other restriction the performance or
observance of which now has or, as far as Borrowers can reasonably foresee,
would have a Material Adverse Effect.
3.22. Full Disclosure. As of the date hereof, neither this
Agreement, nor any certificate, statement, agreement or other documents
furnished to Banks in connection herewith or therewith, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading. There is no fact
pertaining specifically to Borrowers known to Borrowers which could have a
Material Adverse Effect, which has not been set forth in this Agreement or in
the certificates, statements, agreements or other documents furnished in
writing to Banks prior to or at the date hereof in connection with the
transactions contemplated hereby or in the Borrowers' filings with the
Securities and Exchange Commission.
SECTION 4
CONDITIONS
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4.1. Effectiveness of Agreement. The effectiveness of this
Agreement and the obligation of Banks or any one of them to make the first
Advance under the Revolving Credit Commitment and the Canadian Dollar
Commitment shall be subject to Banks' receipt of the following documents and
satisfaction of the following conditions, each in form and substance
satisfactory to Banks:
(a) Notes. The Revolving Credit Notes duly executed by
Borrowers in favor of each Bank and the Canadian Dollar Note duly executed by
Borrowers in favor of BOA Canada.
(b) Collateral Security Documents.
-----------------------------
(i) A security agreement executed by Borrowers in
favor of Agent granting a first lien security interest in all of Borrowers'
accounts receivable and inventory, as security for the Loans and the Permitted
L/Cs, together with financing statements, landlord waivers, mortgagee consents
and waivers and evidence of any other recordations required by applicable law
or by Agent to perfect such security interests in the United States and
Canada;
(ii) A hypothecation agreement executed by Borrowers
in favor of Agent granting a first lien security interest in all of Borrowers'
accounts receivable and inventory under the laws of Quebec, Canada, registered
in the Central Registry, together with all other documents, agreements,
filings and registrations as Quebec counsel to Borrowers shall determine are
necessary or appropriate to create or perfect such security interests;
(iii) A general assignment of book debts executed by
Borrowers in favor of Agent granting a first lien security interest in all of
Borrowers' book debts under the laws of New Brunswick, Nova Scotia, Prince
Edward Island and Newfoundland, Canada, and all required affidavits,
registered in the appropriate filing offices of such Provinces, together with
all other documents, agreements, filings and registrations as Canadian counsel
to Borrowers shall determine are necessary or appropriate to create or perfect
such security interests; and
(iv) All other documents, agreements, filings,
recordings, and registrations as Agent shall reasonably require to create and
perfect security interests in all of Borrowers' inventory and accounts
receivables, or otherwise to effectuate the foregoing.
(c) Authorization Documents. Certified copies of the
articles of incorporation, bylaws and resolutions of the Board of Directors of
each Borrower authorizing each such Borrower's execution and full performance
of this Agreement, the Notes and all other documents and actions required
hereunder, and, with respect to VWR, those officers authorized to request
Advances hereunder, and an incumbency certificate setting forth the authorized
officers of Borrowers.
(d) Opinion of Counsel. Opinion letters from United
States, Canada and Barbados counsel for Borrowers, in the form of Exhibits G-
1, G-2 and G-3 attached hereto.
(e) Insurance. 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 Agent (for the benefit of Banks) as to all collateral under the Collateral
Security Documents.
(f) Good Standing Certificates. Certificates of good
standing or subsistence dated a recent date from the Secretary of State or
appropriate taxing authority in the state of incorporation and each state of
qualification with respect to each Borrower.
(g) Lien Searches. Uniform Commercial Code, tax, judgment
lien searches against Borrowers in such jurisdictions as Agent shall
reasonably request.
(h) Collateral Audit. Agent shall have completed a
collateral audit, which shall have been delivered to Banks and shall be in
form and substance satisfactory to Banks.
(i) Collateral Certifications. Certificates by each
Borrower regarding the location of their offices and inventory, in form and
substance satisfactory to Agent.
(j) Other Documents. Such additional documents as Banks
reasonably may request.
4.2. Term Loan. The obligations of the Banks to advance the Term
Loan shall be subject to the satisfaction of each of the conditions set forth
in Paragraph 4.1 hereof, and the receipt by Banks of the following documents
and satisfaction of the following conditions, each in form and substance
reasonably satisfactory to Banks:
(a) Term Notes. The Term Notes executed by Borrowers in
favor of each Bank.
(b) Canlab Acquisition. The Canlab Acquisition shall be
consummated substantially on the terms set forth in the Canlab Acquisition
Agreements.
(c) Bringdown Certificate. A certificate executed by the
chief financial officer and the chief executive officer of VWR dated the date
of the advance of the Term Loan certifying that (i) the representations and
warranties set forth herein are true and correct as if made on the date of
such certificate, (ii) no Event of Default or Default has occurred and is
continuing on the date of such certificate or will be caused by such advance
of the Term Loan, and (iii) there has been no material adverse change in any
Borrower's financial condition or business since the date hereof.
(d) Other Documents. Such additional documents as Banks
reasonably may request.
4.3. Each Advance. The obligation of any Bank to make any
Advance under the Revolving Credit Commitment and the Canadian Dollar
Commitment shall be subject to receipt of a completed Advance Request Form as
required by Paragraph 2.7(a) hereof, and any other documents or information
reasonably required by Banks in connection therewith.
4.4. Additional Condition to Banks' Obligations. It shall be a
condition to any Bank's obligation hereunder to make any Advance under the
Commitments or any advance of the Term Loan that the representations and
warranties set forth herein shall be true and correct as if made on the date
of such advance, that no Event of Default or Default shall have occurred and
be continuing on the date of such advance or be caused by such advance, and
that there shall have been no material adverse change in any Borrower's
financial condition or business since the date hereof.
SECTION 5
AFFIRMATIVE COVENANTS
---------------------
Each Borrower covenants and agrees that so long as the Revolving
Credit Commitment or Canadian Dollar Commitment, or any indebtedness of
Borrowers to Banks, is outstanding hereunder, it will
5.1. Existence and Good Standing. Preserve and maintain its
existence as a corporation and its good standing in all states and other
jurisdictions in which it conducts business and the validity of all its
franchises, licenses, permits, certificates of compliance or grants of
authority required in the conduct of its business.
5.2. Quarterly Financial Statements. Furnish Agent (which shall
deliver to Banks within seven (7) Business Days of its receipt) as soon as
practicable but in no event later than forty-five (45) days after the end of
each of the first three quarterly fiscal periods hereafter with unaudited,
quarterly consolidated and consolidating financial statements, in form and
substance as required by Required Banks, including a balance sheet, an income
statement and a statement of cash flows, prepared for VWR and its Consolidated
Subsidiaries and the information required to apply the criteria prescribed in
Paragraphs 5.12 through 5.18 and 6.1 through 6.5 hereof, prepared in
accordance with GAAP, together with a certificate executed by the chief
financial 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 and that as of the date of such certificate
there has not been any violation of any provision of this Agreement or the
happening of any Event of Default or Default hereunder.
5.3. Annual Financial Statements. Furnish Agent (which shall
deliver to Banks within seven (7) Business Days of its receipt) as soon as
practicable but in no event later than ninety (90) days after the close of
each fiscal year commencing with fiscal 1993 (or the date of filing VWR's 10-K
report with the Securities and Exchange Commission if VWR has obtained an
extension for such filing, but in no event more than one hundred twenty (120)
days after the close of VWR's fiscal year) with audited consolidated and
consolidating annual financial statements, including the financial statements
and information required under Paragraph 5.2 hereof, which financial
statements shall be prepared in accordance with GAAP and shall be certified
without qualification by an independent certified public accounting firm
satisfactory to Banks (it being acknowledged and agreed that Ernst and Young
is satisfactory to Banks); and cause Banks to be furnished, at the time of the
completion of the annual audit, with a certificate signed by such accountants
to the effect that to the best of their knowledge there have been no
violations of any provisions of this Agreement or the happening of any Event
of Default or Default hereunder.
5.4. Monthly Report. No later than ten o'clock (10:00) a.m.
Philadelphia time fifteen (15) Business Days after the last day of each month,
Borrowers shall deliver to Agent (which shall deliver to Banks within seven
(7) Business Days of its receipt) a report showing (a) the calculation of the
Funded Debt to Borrowing Base ratio as of such month end and identifying the
location of inventory as of such month end in a manner sufficient to
demonstrate compliance with the requirements of Paragraph 5.19 hereof and (b)
the aggregate outstanding amount of all funds which have been advanced to VWR
International
5.5. Books and Records. Keep and maintain satisfactory and
adequate books and records of account in accordance with GAAP and make or
cause the same to be made available to Banks or their agents or nominees at
any reasonable time upon reasonable notice for inspection and to make extracts
thereof.
5.6. Insurance. Keep and maintain all of its property and assets
in good order and repair and fully covered by insurance with reputable and
financially sound insurance companies against such hazards and in such amounts
as is customary in the industry, and upon any Bank's request, furnish to Banks
evidence of such insurance.
5.7. Litigation; Event of Default. Notify Agent in writing
immediately of: (a) the institution of any litigation, the commencement of any
administrative proceedings, the happening of any event or the assertion or
threat of any claim which could materially adversely affect its business,
operations or financial condition, and (b) the occurrence of any Event of
Default or Default hereunder and immediately upon the occurrence of any Event
of Default, deliver a certificate of the chief financial officer of Borrowers
setting forth the details thereof and the action which the applicable Borrower
is taking or proposes to take with respect thereto.
5.8. Taxes. Pay and discharge all taxes, assessments or other
governmental charges or levies imposed on it or any of its property or assets
prior to the date on which any penalty for non-payment or late payment is
incurred, unless the same are currently being contested in good faith by
appropriate proceedings.
5.9. Costs and Expenses. Pay or reimburse Agent for all
reasonable out-of-pocket costs and expenses (including but not limited to
attorneys' fees and disbursements) Agent may pay or incur in connection with
the preparation, review and negotiation of this Agreement and all waivers,
consents and amendments in connection with this Agreement and all other
documentation related thereto, and pay or reimburse Banks for all costs and
expenses (including without limitation attorney's fees and disbursements) in
connection with the collection or enforcement of this Agreement, the Notes or
the Loans, including without limitation any fees and disbursements incurred in
defense of or to retain amounts of principal, interest or fees paid. All
obligations provided for in this Paragraph 5.9 shall survive any termination
of this Agreement or the Revolving Credit Commitment and the repayment of the
Loans.
5.10. Compliance.
----------
(a) Comply in all respects with all local, state and
federal, foreign and domestic, laws and regulations applicable to its
business, including without limitation the Environmental Control Statutes, the
Securities Act of 1933, the Securities Exchange Act of 1934, and the
provisions and requirements of all franchises, permits, certificates of
compliance and approval issued by regulatory authorities and other like grants
of authority held by Borrowers, except where failure to be in compliance would
not have a material adverse effect on the financial condition of the
applicable Borrower; and notify Agent immediately in detail of any such actual
or alleged failure to comply with or perform, breach, violation or default
under any such laws or regulations or under the terms of any of such
franchises or licenses, grants of authority, or of the occurrence or existence
of any facts or circumstances which with the passage of time, the giving of
notice or otherwise could create such a breach, violation or default or could
occasion the termination of any of such franchises or grants of authority.
(b) With respect to the Environmental Control Statutes,
notify Agent when, in connection with the conduct of Borrowers' business or
operations, any person, or EPA or any state or local or foreign agency or
governmental body provides oral or written notification to any Borrower or any
Subsidiary with regard to an actual or imminently threatened removal, spill,
release or discharge of hazardous or toxic wastes, substances or petroleum
products to the extent that any action taken with respect to the subject of
such notification could have a material adverse effect on the financial
condition of the applicable Borrower; and notify Agent in detail immediately
upon the receipt by a Borrower or any Subsidiary of an assertion of liability
under the Environmental Control Statutes, any actual or alleged failure to
comply with or perform, breach, violation or default under any such laws or
regulations or under the terms of any of such franchises or grants of
authority, or of the occurrence or existence of any facts, events or
circumstances which with the passage of time, the giving of notice, or both,
could create such a breach, violation or default or could occasion the
termination of any of such franchises or grants of authority.
5.11. ERISA.
-----
(a) Comply in all material respects with the provisions of
ERISA to the extent applicable to any employee benefit plan maintained for any
of Borrowers' or a Subsidiary's employees or any multiemployer pension plan to
which a Borrower, any Subsidiary or any ERISA Affiliate is required to
contribute; not incur any material accumulated funding deficiency or
withdrawal liability (within the meaning of ERISA), or any material liability
to the PBGC; and not permit any Prohibited Transaction or Reportable Event or
other event to occur which could have a material adverse effect on the
financial condition of Borrowers or any of them or any employee benefit plan
or which may be the basis for the PBGC to assert a material liability against
it or which may result in the imposition of a lien on Borrowers' properties or
assets.
(b) Notify Agent in writing promptly after it has come to
the attention of senior management of Borrowers of the assertion or threat of
any Prohibited Transaction or Reportable Event, the existence of any fact or
set of facts or event (including without limitation any change in the
actuarial assumptions or funding methods of any employee benefit plan or the
incurrence of any withdrawal liability under any multiemployer plan) which
could have a Material Adverse Effect or may be the basis for the PBGC to
assert a material liability against it or impose a lien on Borrowers'
properties or assets. Borrowers shall also provide to Agent promptly after
receipt thereof, copies of (i) all notices received by any of Borrowers or any
ERISA Affiliate of the reorganization of any multiemployer pension plan or the
PBGC's intent to terminate any employee benefit plan or multiemployer pension
plan administered or maintained by any of Borrowers or any ERISA Affiliate, or
to have a trustee appointed to administer any such employee benefit plan; and
(ii) at the request of a Bank each annual report and all accompanying
schedules, the most recent actuarial reports, the most recent financial
information concerning the financial status of each employee benefit plan or
multiemployer plan administered or maintained by any of Borrowers or any ERISA
Affiliate or to which any of them makes contributions, and schedules showing
the amounts contributed to each such plan by or on behalf of any of Borrowers
or any ERISA Affiliate in which any of their personnel participate or from
which such personnel may derive a benefit, and each Schedule B (Actuarial
Information) to the annual report filed by any of Borrowers or any ERISA
Affiliate with the Internal Revenue Service with respect to each such plan.
Period or Quarter Ends
----------------------
5.12. Consolidated Current Ratio. Maintain at all times a
Consolidated Current Ratio of not less than 1.8 to 1.
5.13. Minimum Consolidated Working Capital. Maintain as of the
last day of each fiscal quarter Consolidated Working Capital of not less than
Forty Million Dollars ($40,000,000).
5.14. Minimum Consolidated Tangible Net Worth. Maintain, as of
the last day of each fiscal quarter, Consolidated Tangible Net Worth of not
less than Thirty Million Five Hundred Thousand Dollars ($30,500,000) as of
December 31, 1994, increased for each fiscal quarter after December 31, 1994
as of the last day of each such fiscal quarter on a cumulative basis, by the
Quarterly Net Worth Covenant Adjustment.
5.15. Consolidated Total Liabilities to Tangible Net Worth Ratio.
Maintain, during the periods or on the dates set forth in the left hand
column, as of the last day of each fiscal quarter, the Consolidated Total
Liabilities to Tangible Net Worth Ratio in an amount not to exceed the ratios
set forth in the right hand column:
Quarter Ending Ratio
-------------- -----
9/30/94 3.50:1
12/31/94 4.20:1
3/31/95 4.60:1
6/30/95 - 9/30/95 4.80:1
12/31/95 3.90:1
3/31/96 4.10:1
6/30/96 - 9/30/96 4.30:1
12/31/96 3.50:1
3/31/97 3.80:1
6/30/97 - 9/30/97 4.00:1
12/31/97 3.00:1
3/31/98 3.30:1
6/30/98 - 9/30/98 3.50:1
12/31/98 2.60:1
3/31/99 2.80:1
6/30/99 - 9/30/99 3.10:1
5.16. Minimum Consolidated Cash Flow Ratio. Maintain as of the
last day of each fiscal quarter, for the four most recently-ended fiscal
quarters, a Consolidated Cash Flow Ratio of not less than 3 to 1.
5.17. Consolidated Fixed Charge Coverage Ratio. Maintain (a) as
of the last day of the fiscal quarter ended September 30, 1994, for such
fiscal quarter, a Consolidated Fixed Charge Coverage Ratio of not less than
1.25 to 1, and (b) as of the last day of each fiscal quarter thereafter as set
forth in the left hand column below, for the four most recently-ended fiscal
quarters, a Consolidated Fixed Charge Coverage Ratio as set forth in the right
hand column below:
Quarter Ending Ratio
-------------- -----
12/31/94 - 9/30/95 1.00:1
12/31/95 1.10:1
3/31/96 and thereafter 1.05:1
5.18. Funded Debt to Borrowing Base Ratio. Maintain, as of the
last day of each month, Funded Debt (including without limitation the
aggregate outstanding principal balance of the Loans) in an amount not to
exceed the Borrowing Base, provided, however, that during the applicability of
any Permitted Overadvance, so long as no other Funded Debt is at that time
outstanding, the aggregate outstanding principal amount of the Loans
(including the U.S. Dollar Equivalent of the Canadian Dollar Loan) may exceed
the Borrowing Base by the Permitted Overadvance.
5.19. Landlord Waivers. Maintain not less than ninety percent
(90%) of all of Borrowers' Eligible Inventory at locations which (a) are owned
free and clear of any mortgage or other lien by a Borrower, or (b) are leased
by a Borrower from the owner of such facility and such owner has executed a
landlord waiver and consent in form and substance satisfactory to Agent.
5.20. Subsequent Credit Terms. Notify Agent (which shall deliver
a copy of such notice to Banks within seven (7) Business Days after Agent's
receipt thereof) in writing not less than five (5) Business Days prior to
entering into any new credit arrangement or any amendment or modification of
any credit arrangement. Upon Borrowers' entry into any such new arrangement
or modification or amendment pursuant to which Borrowers or any of them agree
to financial covenants which are more restrictive to VWR and its Consolidated
Subsidiaries than those contained in Sections 5 and 6 hereof, the
corresponding covenants, terms and conditions of this Agreement shall be and
shall be deemed to be automatically and immediately amended to conform with
and to include the applicable covenants, terms and/or conditions of such other
agreement; provided, however, that this Paragraph 5.20 shall not be applicable
or be deemed to affect any provision of this Agreement if any new arrangement
or any amendment or modification is less restrictive to VWR and its
Consolidated Subsidiaries. Borrowers hereby agree promptly to execute and
deliver any and all such documents and instruments and to take all such
further actions as Agent may deem necessary or appropriate to effectuate the
provisions of this Paragraph 5.20.
5.21. Deposit Accounts. Maintain a deposit account with each
Bank.
5.22. Management Changes. Notify Agent (which shall deliver a
copy of such notice to Banks within seven (7) Business Days after Agent's
receipt thereof) in writing within thirty (30) days after any change of its
executive officers.
5.23. Other Documents/Information. Deliver to Agent any and all
other documents, instruments and information, financial or otherwise,
reasonably requested by Agent on behalf of Banks from time to time and
promptly upon the mailing thereof to the shareholders of VWR, copies of all
financial statements, reports and proxy statements so mailed, and upon the
filing thereof, copies of all registration statements and annual, quarterly or
current reports which VWR shall have filed with the Securities and Exchange
Commission.
5.24. Successor Agent. In the event of the appointment of any
successor Agent pursuant to Paragraph 9.15 hereof, execute and deliver any
documents reasonably requested by Banks to effectuate and confirm the transfer
to such successor Agent of all rights, powers, duties, obligations and
property vested in its predecessor Agent hereunder.
SECTION 6
NEGATIVE COVENANTS
------------------
So long as the Revolving Credit Commitment or Canadian Dollar
Commitment, or any indebtedness of Borrowers to Banks, remains outstanding
hereunder, each Borrower covenants and agrees that without Required Banks' or
Banks', as applicable, prior written consent, it will not and it will not
permit any Subsidiary to:
6.1. Guaranties. Guarantee or assume or agree to become liable
in any way for, either directly or indirectly, any indebtedness or liability
of others except: (i) as set forth on Exhibit F attached hereto; (ii) to
endorse checks or drafts in the ordinary course of business; (iii) other
guaranties in the ordinary course of business up to a maximum aggregate
principal amount of $500,000; and (iv) guaranties of indebtedness of
Subsidiaries to the extent the incurrence of such indebtedness would be
otherwise permitted hereunder.
6.2. Loans. Make any loans or advances to others except: (i)
loans or advances to another Borrower; (ii) loans or advances to employees in
an aggregate principal amount not in excess of One Million Dollars
($1,000,000) outstanding at any time; (iii) a five-year subordinated line of
credit not to exceed the aggregate principal amount of $5,000,000 to Momentum
Graphics Inc. ("Momentum") and which matures February 28, 1995; provided, that
VWR acknowledges and agrees that it will not make any advance to Momentum if:
(a) after giving effect to such advance, there would exist an Event of Default
or Default under the terms of this Agreement; (b) as of the date of any such
advance the amount of the advance were subtracted from total assets in
calculating Consolidated Tangible Net Worth, on a pro forma basis as of the
most recently-ended fiscal quarter, and as a result thereof VWR and its
Consolidated Subsidiaries would not be in compliance with Paragraph 5.14
hereof; or (c) as of the date of any such advance, the amount of the advance
were written off by VWR and as a result thereof, VWR and its Consolidated
Subsidiaries would fail to meet, on a pro forma basis as of the most recently-
ended fiscal quarter, any of the covenants set forth in this Agreement; and
(iv) VWR may lend up to Four Million Dollars ($4,000,000) to an ESOP.
6.3. Liens and Encumbrances. Create or suffer to exist any
mortgage, deed of trust, security interest or lien on any of its or its
Subsidiaries' property or assets of any kind or nature other than the security
interests granted pursuant to the Collateral Security Documents, and those
which are:
(a) pledges and deposits made in the ordinary course of
business in connection with workmen's compensation, unemployment insurance,
pensions and other social security benefits;
(b) liens securing the performance of bids, tenders,
leases, contracts (other than for the repayment of borrowed money), statutory
obligations, surety, customs and appeal bonds and other obligations of like
nature, incurred as an incident to and in the ordinary course of business;
(c) liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and vendors' liens, incurred in good
faith in the ordinary course of business and securing obligations which are
not yet due or which are being contested in good faith by appropriate
proceedings;
(d) liens securing the payment of taxes, assessments, and
governmental charges or levies, either (i) not delinquent or (ii) being
contested in good faith by appropriate legal or administrative proceedings and
as to which the applicable Borrower or a Subsidiary, as the case may be, shall
have set aside on its books adequate reserves as required by GAAP;
(e) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, restrictions on the
use of property or minor irregularities of title (and with respect to
leasehold interests, mortgages, obligations, liens and other encumbrances
incurred, created, assumed or permitted to exist and arising by, through or
under or asserted by a landlord or owner of the leased property, with or
without consent of the lessee), none of which materially impairs (i) the use
of any parcel of property material to the operation of the business of a
Borrower or any Subsidiary or (ii) the value of such property for the purpose
of such business;
(f) liens upon any property acquired or newly constructed
by a Borrower or any Subsidiary which are created or incurred
contemporaneously with or within ninety (90) days after such acquisition or
construction to secure or provide for the payment of any part of the purchase
price of such property or the cost of such construction (but no additional
amounts); provided that any such mortgage or security interest shall not apply
to any other property of a Borrower or any Subsidiary;
(g) liens on property existing at the time such property
is acquired by a Borrower or a Subsidiary, and liens on property of a
Subsidiary existing at the time it becomes a Subsidiary provided, in each
case, that such liens were not created in contemplation of the acquisition by
a Borrower or such Subsidiary of such property or the acquisition by a
Borrower of such Subsidiary;
(h) liens on the property or assets of a Subsidiary in
favor of VWR or another Subsidiary;
(i) liens existing on the date of this Agreement and
disclosed in the financial statements referred to in Paragraph 3.9 hereof or
the notes thereto;
(j) extensions, renewals and replacements of liens
referred to in subparagraphs (a) through (i) of this Paragraph 6.3; provided,
that any such extension, renewal or replacement lien shall be limited to
property or assets secured by the lien extended, renewed or replaced and that
the obligations secured by such extension, renewal or replacement lien shall
be in an amount not greater than the amount of the obligations secured by the
lien extended, renewed or replaced; and
(k) other liens incurred in the ordinary course of
business of a Borrower and its Subsidiaries securing indebtedness not in
excess of the aggregate principal amount of One Million Dollars ($1,000,000)
for all Borrowers and Subsidiaries; provided, however, that there shall be no
liens or encumbrances against inventory, accounts, contract rights, chattel
paper, instruments or documents of any kind derived from the sale of goods or
services, and that such liens shall not be covered by subparagraph (j) above.
6.4. Transfer of Assets; Liquidation. Sell, lease, transfer or
otherwise dispose of any part or amount of its assets, real or personal,
including without limitation any sale and leaseback of real property owned by
any Borrower for a sale price in excess of $1,000,000, other than such
transactions in the normal and ordinary course of business for value received;
or discontinue or liquidate any substantial part of its operations or
business.
6.5. Acquisitions and Investments. (i) Except in the ordinary
course of business, purchase or otherwise acquire (including without
limitation by way of share exchange) any part or amount of the capital stock
or assets of, or make any investments in, any other firm or corporation; (ii)
merge or consolidate with or into any other firm or corporation; (iii) enter
into any new business activities or ventures not directly related to its
present business; or (iv) create any Subsidiary unless within thirty (30) days
of its formation such Subsidiary becomes a party to this Agreement and
executes and becomes jointly and severally liable on any and all Notes which
are then or thereafter outstanding and executes such documents and joinders as
Required Banks shall reasonably request; provided, however, that Borrowers may
take such actions enumerated in subparagraphs (i) and (ii) above provided that
(x) VWR is the surviving corporation, (y) any such action shall not create and
there shall not be an Event of Default or Default hereunder and (z) the
aggregate consideration paid by Borrowers (including indebtedness assumed by
Borrowers) in connection with such transaction and any other transactions
since July 22, 1994 is less than One Million Dollars ($1,000,000).
6.6. Use of Proceeds. Use any of the proceeds of the Loans,
directly or indirectly, to purchase or carry margin securities within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System; or engage as its principal business in the extension of credit for
purchasing or carrying such securities.
SECTION 7
ADDITIONAL COLLATERAL AND RIGHT OF SET OFF
------------------------------------------
7.1. Additional Collateral. As additional collateral for the
payment of any and all of Borrowers' indebtedness and obligations to Banks,
whether matured or unmatured, now existing or hereafter incurred or created
hereunder or otherwise, Borrowers hereby grant to Banks a security interest in
and lien upon all funds, balances or other property of any kind of Borrowers,
or in which any Borrower has an interest, limited to the interest of Borrowers
therein, but only to the extent such funds, balances or other property are now
or hereafter in the possession, custody or control of any Bank.
7.2. Right of Set-off. Each Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set-off
and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Bank to or for the credit or the account of each Borrower
against any and all of the obligations of Borrowers now or hereafter existing
under this Agreement and the Note held by such Bank, irrespective of whether
such Bank shall have made any demand under this Agreement or such Notes and
although such obligations may be unmatured. Each Bank agrees promptly to
notify Borrowers after any such set-off and application made by such Bank;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank under this
Section 7 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Bank may have.
SECTION 8
DEFAULT
-------
8.1. Events of Default. Each of the following events shall be an
Event of Default hereunder:
(a) If Borrowers shall fail to pay when due any
installment of principal or any other sum payable to Banks hereunder or
otherwise or if Borrowers shall fail to pay when due, or within three (3)
Business Days thereafter, any interest payable to Banks hereunder;
(b) If any representation or warranty made herein or in
connection herewith or in any statement, certificate or other document
furnished hereunder is or becomes false or misleading in any material respect;
(c) If any Borrower shall default in the payment or
performance of any obligation or indebtedness to another in excess of
$1,000,000 aggregate principal amount or under any Permitted L/C, in each
case, whether now existing or hereafter incurred;
(d) If any Borrower shall default in or fail to observe at
any test date the covenants set forth in Paragraphs 5.12 through 5.18 or 6.1
through 6.5 hereof;
(e) If any Borrower shall default in the performance of
any other agreement or covenant contained herein (other than as provided in
subparagraphs (a), (b) or (d) above) or in any document executed or delivered
in connection herewith, and such default shall continue uncured for twenty
(20) days after notice thereof to Borrowers given by Agent pursuant to the
direction of Required Banks; provided, however, that Borrowers shall have up
to thirty (30) days after notice to Borrowers to cure a default under
Paragraph 5.19 hereof; provided further, however, that at no time shall less
than seventy-five percent (75%) of Eligible Inventory be located at locations
described in clauses (a) and (b) of Paragraph 5.19;
(f) If: (i) any person or group within the meaning of
Section 13(d) (3) of the Securities Exchange Act of 1934, as amended (the
"1934 Act") and the rules and regulations promulgated thereunder shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the 1934
Act), directly or indirectly, of securities of VWR (or other securities
convertible into such securities) representing 10% of the combined voting
power of all securities of VWR entitled to vote in the election of directors
(hereinafter called a "Controlling Person"); or (ii) a majority of the Board
of Directors of VWR shall cease for any reason to consist of (A) individuals
who on the date hereof were serving as directors of VWR or (B) individuals who
subsequently become members of the Board if such individuals' nomination for
election or election to the Board is recommended or approved by a majority of
the Board of Directors of VWR. For purposes of clause (i) above, a person or
group shall not be a Controlling Person if such person or group holds voting
power in good faith and not for the purpose of circumventing this subparagraph
(f) as an agent, bank, broker, nominee, trustee, or holder of revocable
proxies given in response to a solicitation pursuant to the 1934 Act, for one
or more beneficial owners who do not individually, or, if they are a group
acting in concert, as a group, have the voting power specified in clause (i)
above;
(g) If VWR ceases to own, directly or indirectly, one-
hundred percent (100%) of the legal and beneficial ownership of VWR Canada, of
Scientific Holdings and of VWR International, or if any additional Subsidiary
that has executed a joinder hereto pursuant to Paragraph 6.5 hereof ceases to
be a Subsidiary;
(h) If custody or control of any substantial part of the
property of any Borrower shall be assumed by any governmental agency or any
court of competent jurisdiction at the instance of any governmental agency; or
if any governmental regulatory authority or judicial body shall make any other
final non-appealable determination the effect of which would be to affect
materially and adversely the operations of any Borrower as now conducted;
(i) If any Borrower shall become insolvent, bankrupt or
generally fail to pay its debts as such debts become due; if any Borrower is
adjudicated insolvent or bankrupt; or if any Borrower admits in writing its
inability to pay its debts; or if any Borrower shall suffer the appointment of
a custodian, receiver or trustee for it or substantially all of its property
and if appointed without its consent, not be discharged within thirty (30)
days; or if any Borrower makes an assignment for the benefit of creditors; or
if any Borrower suffers proceedings under any law related to bankruptcy,
insolvency, liquidation or the reorganization, readjustment or the release of
debtors to be instituted against it and if contested by it not dismissed or
stayed within twenty (20) days; or if proceedings under any law related to
bankruptcy, insolvency, liquidation, or the reorganization, readjustment or
the release of debtors is instituted or commenced by any Borrower; or if any
order for relief is entered relating to any of the foregoing proceedings; or
if any Borrower shall call a meeting of its creditors with a view to arranging
a composition or adjustment of its debt; or if any Borrower shall by any act
or failure to act indicate its consent to, approval of or acquiescence in any
of the foregoing; or
(j) If any judgment, writ, warrant or attachment or
execution or similar process which calls for payment or presents liability in
excess of $1,000,000 shall be rendered or issued against or levied against any
Borrower or its property and such process shall not be paid, waived, stayed,
vacated, discharged, settled, satisfied or fully bonded within sixty (60) days
after its issuance or levy.
8.2. Remedies. Upon the happening of any Event of Default and at
any time thereafter, at the election of Required Banks, and by notice by Agent
to Borrowers (except if an Event of Default described in Paragraph 8.1(i)
shall occur in which case acceleration shall occur automatically without
notice), Required Banks may declare the entire unpaid balance, principal,
interest and fees, of all indebtedness of Borrowers to Banks, hereunder or
otherwise, to be immediately due and payable. Upon such declaration or deemed
declaration, the Revolving Credit Commitment shall immediately and
automatically terminate and Banks shall have no further obligation to make any
Advances and shall have the immediate right to enforce or realize on any
collateral security granted therefor, including without limitation pursuant to
the Collateral Security Documents, in any manner or order they deem expedient
without regard to any equitable principles of marshalling or otherwise. In
addition to any rights granted hereunder or in any documents delivered in
connection herewith, Banks shall have all the rights and remedies granted by
any applicable law, all of which shall be cumulative in nature.
SECTION 9
THE BANKS
---------
This Section sets forth the relative rights and duties of Agent
and Banks respecting the Loans and does not confer any enforceable rights on
Borrowers against Banks or create on the part of Banks any duties or
obligations to Borrowers.
9.1. Application of Payments.
-----------------------
(a) Except as set forth in Paragraph 9.1(c) below (i)
Agent shall apply all payments of principal and interest made to Agent
hereunder by or on behalf of Borrowers on account of the Revolving Credit Loan
or the Term Loan to the U.S. Banks on the basis of their respective Pro Rata
Shares with respect to such Loans, and (ii) Agent shall apply all payments of
fees, premiums and expenses made to Agent hereunder by or on behalf of
Borrowers to the U.S. Banks as provided in this Agreement; provided, however,
that in the event that Agent shall at any time receive any payments by or on
behalf of Borrowers in excess of the aggregate outstanding balance of the
Revolving Credit Loan and the Term Loan and all fees, premiums and expenses
due to U.S. Banks hereunder, then Agent shall forward the amount of such
excess to BOA Canada for application to the Canadian Dollar Loan in accordance
with Paragraph 9.1(b).
(b) Except as set forth in Paragraph 9.1(c) below, BOA
Canada shall apply all payments of principal, interest, fees or other amounts
made to it by or on behalf of Borrowers to the Canadian Dollar Loan, provided
however that in the event that BOA Canada shall at any time receive any such
payments by or on behalf of Borrowers in excess of the aggregate outstanding
balance of the Canadian Dollar Loan, then BOA Canada shall forward the amount
of such excess to Agent for application to the Revolving Credit Loan and the
Term Loan in accordance with Paragraph 9.1(a).
(c) Upon the occurrence and during the continuance of an
Event of Default, (i) all amounts received by BOA Canada by or on behalf of
Borrowers in connection with the Canadian Dollar Loan or otherwise, and all
amounts received by any U.S. Bank by or on behalf of Borrowers in connection
with Permitted L/Cs or otherwise, shall be forwarded to Agent for application
pursuant to clause (ii) following, and (ii) all amounts received by Agent by
or on behalf of Borrowers (whether voluntary, involuntary, realized from
Collateral, or otherwise) shall be distributed among CoreStates, BOA Canada
and the other Banks pro rata on the basis of the ratio which (x) the aggregate
principal amount of indebtedness to each Bank under the Loans plus the
aggregate amount available to be drawn under, and all unreimbursed draws
under, Permitted L/Cs issued or participated in by such Bank, bears to (y) the
aggregate principal amount of all indebtedness of Borrowers to Banks under the
Loans plus the aggregate amount available to be drawn under, and all
unreimbursed draws under, Permitted L/Cs; provided, however, that in the event
that any Bank shall have received an allocation of funds hereunder based on
amounts available to be drawn under any Permitted L/C issued by or
participated in by such Bank, and such Permitted L/C shall expire without
being drawn upon, then such Bank shall return such funds to Agent for
reallocation in accordance herewith.
(d) Any distribution of payments by Agent under Paragraphs
9.1(a) or (c) above shall be made promptly in federal funds immediately
available at the office of each Bank set forth above.
9.2. Setoff. In the event that a Bank, by exercise of its right
of set off, reduces indebtedness owing to it hereunder or under the Permitted
L/Cs by an amount greater than its pro rata share of such amount based upon
the Banks' respective shares of principal indebtedness outstanding hereunder
and of amounts available to be drawn under and unreimbursed draws under the
Permitted L/Cs immediately before such setoff or other reduction, such Bank
shall purchase a portion of the indebtedness hereunder owing to each other
Bank and of amounts available to be drawn under and unreimbursed draws under
Permitted L/Cs issued or participated in by each other Bank, so that after
such purchase each Bank shall hold its pro rata share of all the indebtedness
then outstanding hereunder and of amounts available to be drawn under and
unreimbursed draws under the Permitted L/Cs, based upon the Banks' respective
shares of principal indebtedness outstanding and of amounts available to be
drawn and unreimbursed draws under Permitted L/Cs immediately before such
setoff or other reduction, provided that if all or any portion of such excess
payment is thereafter recovered from such Bank, such purchase shall be
rescinded and the purchase price restored to the extent of any such recovery,
but without interest.
9.3. Modifications and Waivers. No modification or amendment
hereof, consent hereunder or waiver of any Event of Default shall be effective
except by written consent of the Required Banks, provided, however, that the
written consent of all Banks shall be required to (a) decrease the rate of
interest, (b) increase the amount of the Term Loan, the Revolving Credit
Commitment, or the Banks' respective Maximum Principal Amounts, (c) amend the
definition of Required Banks, (d) amend, modify, waive, discharge or suspend
compliance with any date of payment hereunder or the definition of the
Termination Date, (e) amend, modify, waive, discharge or suspend compliance
with the commitment fee, (f) amend, modify, waive, discharge or suspend
compliance with Paragraph 6.3 or 6.4 hereof, (g) release any portion of the
collateral under the Collateral Security Documents valued in excess of
$200,000 based on a certificate as to the value of the collateral to be
released provided to Banks by an executive officer of VWR, (h) increase the
advance rates under the Borrowing Base, or (i) modify, amend, waive, discharge
or suspend compliance with this Paragraph 9.3 hereof. Any amendment or waiver
made pursuant to this Paragraph 9.3 shall apply to and bind all of the Banks
and any future holder of any Notes.
9.4. Obligations Several. The obligations of the Banks hereunder
are several, and each Bank hereunder shall not be responsible for the
obligations of the other Banks hereunder, nor, will the failure of one Bank to
perform any of its obligations hereunder relieve the other Banks from the
performance of their respective obligations hereunder.
9.5. Banks' Representations. Each Bank represents and warrants
to the other Banks that (i) it has been furnished all information it has
requested for the purpose of evaluating its proposed participation under this
Agreement; and (ii) it has decided to enter into this Agreement on the basis
of its independent review and credit analysis of Borrowers, this Agreement and
the documentation in connection therewith and has not relied for such analysis
on any information or analysis provided by any other Bank.
9.6. Investigation. No Bank shall have any obligation to the
others to investigate the condition of Borrowers or any of the Collateral or
any other matter concerning the Loans.
9.7. Powers of Agent. Agent shall have and may exercise those
powers specifically delegated to Agent herein, together with such powers as
are reasonably incidental thereto.
9.8. General Duties of Agent, Immunity and Indemnity. Agent will
promptly deliver to Banks financial information and other material information
regarding Borrowers received by it from Borrowers, and which has not been
delivered by Borrowers to Banks. In performing its duties as Agent hereunder,
Agent will take the same care as it takes in connection with loans in which it
alone is interested, subject to the limitations on liabilities contained
herein; provided that Agent shall not be obligated to ascertain or inquire as
to the performance of any of the terms, covenants or conditions hereof by
Borrowers. Neither Agent nor any of its directors, officers, agents or
employees shall be liable for any action or omission by any of them hereunder
or in connection herewith except for gross negligence or willful misconduct.
Subject to such exception, each of the Banks hereby indemnifies Agent on the
basis of such Bank's Pro Rata Share of all Loans, against any such liability,
claim, loss or expense.
9.9. No Responsibility for Representations or Validity, etc.
Each Bank agrees that Agent shall not be responsible to any Bank for any
representations, statements, or warranties of Borrowers herein. Neither Agent
nor any of its directors, officers, employees or agents shall be responsible
for the validity, effectiveness, sufficiency, perfection or enforceability of
this Agreement and any collateral security therefor, or any documents relating
thereto or for the priority of any of Banks' security interests in any such
collateral security.
9.10. Action on Instruction of Banks; Right to Indemnity. Agent
shall in all cases be fully protected in acting or refraining from acting
hereunder in accordance with written instructions to it signed by Required
Banks unless the consent of all the Banks is expressly required hereunder in
which case Agent shall be so protected when acting in accordance with such
instructions from all the Banks. Such instructions and any action taken or
failure to act pursuant thereto shall be binding on all the Banks, provided
that except as otherwise provided herein, Agent may act hereunder in its own
discretion without requesting such instructions. Agent shall be fully
justified in failing or refusing to take any action hereunder unless it shall
first be specifically indemnified to its satisfaction by the other Banks on
the basis of their respective Pro Rata Shares of all Loans, against any and
all liability and expense which it may incur by reason of taking or continuing
to take any such action.
9.11. Employment of Agents. In connection with its activities
hereunder, Agent may employ agents and attorneys-in-fact and shall not be
answerable, except as to money or securities received by it or its authorized
agents, for the default or misconduct of agents or attorneys-in-fact selected
with reasonable care.
9.12. Reliance on Documents. Agent shall be entitled to rely
upon (a) any paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons and (b) upon the
opinion of its counsel with respect to legal matters.
9.13. Agent's Rights as a Bank. With respect to its share of the
indebtedness hereunder, Agent shall have the same rights and powers hereunder
as any other Bank and may exercise the same as though it were not Agent. Each
of the Banks may accept deposits from, lend money to, and generally engage in
any kind of banking or trust business with Borrowers as if it were not Agent
or a Bank hereunder.
9.14. Expenses. Each of the Banks shall reimburse Agent, from
time to time at the request of Agent, for its share of any expenses incurred
by Agent, based on such Bank's Pro Rata Share of all Loans, in connection with
the performance of its functions hereunder (excluding, however, unless an
Event of Default has occurred and is continuing, normal administrative costs
and expenses incident to the performance of its agency duties hereunder),
provided however that in the event Banks shall reimburse Agent for expenses
for which Borrowers subsequently reimburse Agent, Agent shall remit to each
Bank the respective amount received from such Bank against such expenses, and
provided further, that no Bank shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of Agent.
9.15. Resignation of Agent. Agent may at any time resign its
position as Agent, without affecting its position as a Bank, by giving written
notice to Banks and Borrowers. The Borrowers and Required Banks may at any
time request that Agent resign its position as Agent and Agent agrees to so
resign in accordance with the provisions hereof. Any such resignation shall
take effect upon the appointment of a successor agent in accordance with this
Paragraph. In the event Agent shall resign, Banks shall appoint a Bank as
successor agent, which successor Agent shall be subject to the approval of
Borrowers. If within thirty (30) days of the Agent's notice of resignation no
successor agent shall have been appointed by Banks and approved by Borrowers
and accepted such appointment, then Agent, in its discretion may appoint any
other Bank as a successor agent.
9.16. Successor Agent. The successor Agent appointed pursuant to
Paragraph 9.15 shall execute and deliver to its predecessor and Banks an
instrument in writing accepting such appointment, and thereupon such
successor, without any further act, deed or conveyance, shall become fully
vested with all the properties, rights, duties and obligations of its
predecessor Agent. The predecessor Agent shall deliver to its successor Agent
forthwith all collateral security, documents and moneys held by it as Agent,
if any, whereupon such predecessor Agent shall be discharged from its duties
and obligations as Agent under this Agreement.
9.17. Collateral Security. Agent will hold, administer and
manage any collateral security pledged from time to time hereunder either in
its own name or as Agent, but each Bank shall hold a direct, undivided
beneficial interest therein, on the basis of its share of the indebtedness
outstanding hereunder, by reason of and as evidenced by this Agreement, in
accordance with Paragraph 9.1 hereof.
9.18. Enforcement by Agent. All rights of action under this
Agreement and under the Notes and all rights to the collateral security, if
any, hereunder may be enforced by Agent and any suit or proceeding instituted
by Agent in furtherance of such enforcement shall be brought in its name as
Agent without the necessity of joining as plaintiffs or defendants any other
Banks, and the recovery of any judgment shall be for the benefit of Banks
subject to the expenses of Agent.
SECTION 10
MISCELLANEOUS
-------------
10.1. Indemnification and Release Provisions. Borrowers hereby
agree to defend Agent and each Bank and their respective directors, officers,
agents, employees and counsel from, and hold each of them harmless against,
any and all losses, liabilities (including without limitation settlement costs
and amounts, transfer taxes, documentary taxes, or assessments or charges made
by any governmental authority), claims, damages, interest judgments, costs, or
expenses, including without limitation fees and disbursements of counsel,
incurred by any of them arising out of or in connection with or by reason of
this Agreement, the Revolving Credit Commitment, or the making of the Loans,
including without limitation, any and all losses, liabilities, claims,
damages, interests, judgments, costs or expenses relating to or arising under
any Environmental Control Statute or the application of any such Statute to
any Borrower's or a Subsidiary's properties or assets. All obligations
provided for in this Paragraph 10.1 shall survive any termination of this
Agreement or the Revolving Credit Commitment and the repayment of the Loans.
10.2. Participations and Assignments. Borrowers hereby
acknowledge and agree that a Bank may at any time: (a) grant participations in
all or any portion of the amount of the Loans or any Note or of its right,
title and interest therein or in or to this Agreement (collectively,
"Participations") to any other lending office or to any other bank, lending
institution or other entity which has the requisite sophistication to evaluate
the merits and risks of investments in Participations ("Participants");
provided, however, that: (i) all amounts payable by Borrowers hereunder shall
be determined as if such Bank had not granted such Participation; and (ii) any
agreement pursuant to which any Bank may grant a Participation: (x) shall
provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of Borrowers hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provisions
of this Agreement; (y) may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement without the consent of the
Participant if such amendment, modification or waiver would reduce the
principal of or rate of interest on the Loans or postpone the date fixed for
any payment of principal of or interest on the Loans; and (z) shall not
relieve such Bank from its obligations, which shall remain absolute, to make
Advances hereunder; and (b) assign all or any portion of its rights under the
Loans with the prior written consent of the Agent and Borrowers together with
the payment to the Agent of a $2,000 transfer fee.
10.3. Binding and Governing Law. This Agreement and all
documents executed hereunder shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed as to their validity, interpretation and effect by the laws
of the Commonwealth of Pennsylvania.
10.4. Survival. All agreements, representations, warranties and
covenants of Borrowers contained herein or in any documentation required
hereunder shall survive the execution of this Agreement and the making of the
Loans hereunder and except for Paragraphs 5.9 and 10.1 which provide
otherwise, will continue in full force and effect as long as any indebtedness
or other obligation of Borrowers to any Bank remains outstanding.
10.5. No Waiver; Delay. If Banks or any of them shall waive any
power, right or remedy arising hereunder or under any applicable law, such
waiver shall not be deemed to be a waiver upon any other Bank or the later
occurrence or recurrence of any of said events with respect to any Bank. No
delay by Banks in the exercise of any power, right or remedy shall, under any
circumstances, constitute or be deemed to be a waiver, express or implied, of
the same and no course of dealing between the parties hereto shall constitute
a waiver of Banks' powers, rights or remedies. The remedies herein provided
are cumulative and not exclusive of any remedies provided by law.
10.6. Modification; Waiver. No modification or waiver of any
provision of this Agreement or any Note, nor any consent to any departure by
Borrowers herefrom or therefrom, shall in any case be effective unless the
same be in writing, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No notice
to or demand on Borrowers in any case shall entitle Borrowers to any other or
further notice or demand in any similar or other circumstances.
10.7. Headings. The various headings in this Agreement are
inserted for convenience only and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.
10.8. Notices. Any notice, request or consent required hereunder
or in connection herewith shall be deemed satisfactorily given if in writing
(including facsimile transmissions) and delivered by hand, transmitted or
mailed (registered or certified mail) to the parties at their respective
addresses or telecopier number set forth below or such other addresses or
telecopier numbers as may be given by any party to the others in writing:
if to Borrowers or any of them:
c/o VWR Corporation
1310 Goshen Parkway
West Chester, PA 19380
Attention: Walter S. Sobon, Vice President
of Finance and Chief Financial Officer
Telecopier: (215) 436-1760
with a copy to:
Drinker, Biddle & Reath
1000 Westlakes Drive
Suite 300
Berwyn, PA 19312
Attention: Thomas E. Wood, Esq.
Telecopier: (215) 993-8585
if to CoreStates:
CoreStates Bank, N.A.
1500 Market Street
Philadelphia, PA 19101-7618
Attention: Joseph Herbst, Vice President
Telecopier: (215) 973-6745
if to Seafirst:
Seattle-First National Bank
Northwest National Division
701 Fifth Ave., 12th Floor
Seattle Washington 98104
Attention: John Wilson, Vice President
Telecopier: (206) 358-3113
if to 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: Marc Elinger, Vice President
Telecopier: (604) 683-1940
if to PNC:
PNC Bank, National Association
P.O. Box 7648
Broad and Chestnut Streets
Philadelphia, PA 19101
Attention: Victoria Ziff, Vice President
Telecopier: (215) 585-5972
Failure to provide notice to Drinker, Biddle & Reath as provided above shall
not cause to be ineffective any notice provided to Borrowers which is
otherwise in accordance with the terms hereof.
10.9. Payment on Non-Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day other than a Business Day,
such payment may be made on the next succeeding Business Day, provided however
that such extension of time shall be included in the computation of interest
due in conjunction with such payment or other fees due hereunder, as the case
may be.
10.10. Time of Day. All time of day restrictions imposed herein
shall be calculated using Agent's local time.
10.11. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the
application of such provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by
law.
10.12. Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if all the signatures on such
counterparts appeared on one document, and each such counterpart shall be
deemed to be an original.
10.13. Withholding Taxes Clause. All amounts payable under this
Agreement, whether principal, interest or otherwise, shall be paid in full,
free and clear of any present or future taxes, levies, imposts, duties,
charges, fees or withholdings and without set-off or counterclaim or any
restriction or condition or deduction whatsoever. If Borrowers or any of them
are compelled by law to make any deduction or withholding, it or they will
ensure that the same does not exceed the minimum liability therefor and will
promptly pay Agent (for the benefit of Banks) such additional amount as will
result in the net amount received by Banks being equal to the full amount
which would have been receivable had there been no deduction or withholding.
10.14. Currency Conversion Clause.
(a) If any amount due from Borrowers under this Agreement
or any order or judgment given or made in relation hereto has to be converted
from United States currency or Canadian currency (as the case may be) (the
"first currency") in which the same is payable hereunder or under such order
or judgment into another currency (the "second currency") for the purpose of
(i) making or filing a claim or proof against Borrowers, (ii) obtaining an
order or judgment in any court or other tribunal, or (iii) enforcing any order
or judgment given or made in relation hereto, Borrowers hereby undertake to
indemnify Banks from and against any loss suffered as a result of any
discrepancy between (a) the rate of exchange used for such purpose to convert
the amount in question from the first currency into the second currency and
(b) the rate or rates of exchange of which Banks may in the ordinary course of
business purchase the first currency with the second currency upon receipt of
an amount paid to it in satisfaction, in whole or in part, of any such order,
judgment, claim or proof.
(b) Any such conversion shall be made at the buying spot
rate of exchange at which Banks could purchase the first currency with the
second currency at the close of business on the day before the day on which
the judgment is given at the place where such court is located. If there is a
change in such rate of exchange prevailing between the day before the judgment
is given and the date of payment thereof, Borrowers agree to pay such
additional amounts (if any) as may be necessary to ensure that the amount paid
on such date is the amount in the second currency which, when converted into
the first currency at such rate of exchange in effect on the date of payment,
is the amount then due under this Agreement in the first currency.
(c) Any amount due from Borrowers under this Paragraph
10.14 will be due as a separate debt and shall not be affected by or merged
into any judgment being obtained for any other amounts due under or in respect
of this Agreement. In no event, however, shall Borrowers be required to pay
more in the first currency at such rate of exchange when payment is made than
the amount of the first currency stated to be due hereunder, so that in any
event Borrowers' obligations hereunder will be effectively maintained as
obligations in the first currency.
10.15. Submission to Jurisdiction.
--------------------------
(a) Borrowers hereby irrevocably submit to the
jurisdiction of any Commonwealth of Pennsylvania or Federal court sitting in
Philadelphia, Pennsylvania, over any action or proceeding arising out of or
relating to this Agreement. VWR Canada, Scientific Holdings and VWR
International each hereby irrevocably appoint VWR (the "Process Agent"), as
its agent to receive on its behalf service of copies of summons and complaints
and any other process which may be served in any action or proceeding arising
hereunder. Such service may be made by mailing or delivering a copy of such
process by registered or certified mail, postage prepaid, to VWR Canada,
Scientific Holdings or VWR International, as the case may be, in care of VWR
at its address set forth at the beginning of this Agreement, and VWR Canada,
Scientific Holdings and VWR International each hereby irrevocably authorizes
and directs the Process Agent to accept such service on its behalf. Borrowers
agree that a final judgment in any such action or proceeding shall be
conclusive, subject to appellate relief, and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(b) Nothing in this Paragraph 10.15 shall affect the right
of Banks to serve legal process in any other manner permitted by law or affect
the right of Banks to bring any action or proceeding against Borrowers or any
of its or their properties in the courts of other jurisdictions to the extent
otherwise permitted by law.
(c) To the extent that Borrowers have or hereafter may
acquire (i) any immunity from jurisdiction of any court of the Commonwealth of
Pennsylvania or any federal court sitting in Philadelphia, PA or from any
legal process out of any such court (whether through service or notice,
attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, or (ii) any objection to
the laying of the venue or of an inconvenient forum of any suit, action or
proceeding, if brought in the Commonwealth of Pennsylvania or Federal court
sitting in Philadelphia, Pennsylvania under process served in accordance with
subparagraph
(a) above, Borrowers hereby irrevocably waive such immunity or objection in
respect of any suit, action or proceeding arising out of or relating to this
Agreement or the Loans
IN WITNESS WHEREOF, the undersigned have executed this Agreement the day
and year first above written.
ATTEST: VWR CORPORATION
By: (Signature) By (Signature)
-------------------------- ----------------------------
George R. Ritter Walter S. Sobon
Assistant Secretary Vice President Finance
[CORPORATE SEAL]
ATTEST: VWR SCIENTIFIC OF CANADA LTD.
By: (Signature) By (Signature)
-------------------------- ----------------------------
Deborah Corr Walter S. Sobon
Secretary Vice President
[CORPORATE SEAL]
SCIENTIFIC HOLDINGS CORP.
By (Signature)
----------------------------
George R. Ritter
Treasurer
[CORPORATE SEAL]
ATTEST: VWR SCIENTIFIC INTERNATIONAL CORPORATION
By: (Signature) By (Signature)
-------------------------- ----------------------------
Deborah Corr Walter S. Sobon
Assistant Secretary Vice President
[CORPORATE SEAL]
CORESTATES BANK, N.A., for itself and as Agent
By (Signature)
----------------------------
Joseph E. Herbst
Vice President
SEATTLE-FIRST NATIONAL BANK
By (Signature)
----------------------------
John Wilson
Vice President
BANK OF AMERICA CANADA
By (Signature)
----------------------------
Mark Ehlinger
Vice President & Manager
PNC BANK, NATIONAL ASSOCIATION
By (Signature)
-------------------------------
Vicky Ziff
Vice President
(..continued)
EXHIBIT 10
----------
AGREEMENT
---------
AGREEMENT between VWR Corporation, a Delaware corporation (the
"Corporation"), and Philip B. Hunsucker ("Vice President") dated as of
December 13, 1993.
RECITALS
--------
A. The Vice President is an executive of the Corporation and an
integral part of its management.
B. The Corporation wishes to assure both itself and the Vice President
of continuity of management in the event of any actual or threatened change in
control of the Corporation.
C. This Agreement is not intended to alter the compensation and
benefits that the Vice President could reasonable expect in the absence of the
occurrence of a Trigger Date as defined in this Agreement; consequently, this
Agreement will be operative only upon the Vice President's termination during
the term of this Agreement after the occurrence of a Trigger Date.
NOW, THEREFORE, it is hereby agreed as follows:
1. Term of Agreement. The effective date of this Agreement is December
13, 1993. This Agreement shall remain in effect until December 13, 1995,
except that if a Trigger Date, as defined in paragraph 2, occurs prior to
December 13, 1995, this Agreement shall remain in effect with respect to all
rights accruing as a result of the occurrence of the Trigger Date.
2. Operation of Agreement - Trigger Date. The provisions of this
Agreement shall become operative the day before each "Trigger Date" which
occurs during the term of this Agreement. For purposes of defining "Trigger
Date," the following terms are incorporated by reference to the Corporation's
Restated Certificate of Incorporation as executed on July 10, 1987 (the
"Certificate"): "Affiliate," "Associate," "Board of Directors," "40%
Shareholder," "Major Transaction," "Person," "Voting Power," and "Voting
Stock" as well as the other definitions in the Certificate which are utilized
in defining the foregoing terms. Any of the following shall constitute a
Trigger Date:
a. the effective date of a "Major Transaction" which is subject
to and satisfied the special voting requirement set forth in Article VIII,
Section I, of the Certificate.
b. the completion of a tender or exchange offer for Voting Stock
(other than a tender offer by the Corporation) which is accepted by the
holders of 51% of the Voting Power of the outstanding Voting Stock
c. the effective date of a merger, consolidation, reorganization,
or dissolution in which the Corporation is not the surviving entity; or
d. the date on which there is a "Significant Change" in the
membership of the Board of Directors occurring by the third annual meeting
after the effective date of a merger, consolidation, reorganization, or a
Major Transaction or the date on which any Person becomes a 40% Shareholder
(each of which is referred to as a "Significant Event"). A Significant Change
in the Board of Directors shall be deemed to have occurred if one-third or
more of the directors are individuals who (i) are or were Affiliates or
Associates of the 40% Shareholders or any party to the Significant Event and
(ii) were not Affiliates or Associates of the Corporation prior to the
Significant Event.
3. Termination of Employment. If, during the term of this Agreement,
there is a termination of the Vice President's employment after a Trigger
Date, the Vice President shall have the right to receive compensation and
benefits described in paragraphs 4 and 5. The term "termination of the Vice
President's employment," for purposes of this Agreement, shall mean
resignation or termination of the Vice President for any reason other than
cause, the Vice President has reached age 65, death, or disability if the
disability is covered by the Corporation's long-term disability plan. The
term "cause" shall mean gross misconduct in connection with the Vice
President's position in the Corporation which results in demonstrably material
injury to the Corporation. Bad judgment or negligence shall not constitute
gross misconduct nor shall any act or omission reasonably believed by the Vice
President to have been in, or not opposed to, the interests of the
Corporation.
4. Compensation. Subject to the provisions of Section 8, if there is a
termination of the Vice President's employment on or before 24 months after a
Trigger Date, the Vice President shall have the right to receive the
compensation described in this paragraph during the compensation period even
if the Vice President is employed by another employer during that period. The
term "compensation period" shall mean the period between the Vice President's
termination date and 24 months after such Trigger Date; except if the period
is less than 12 months, then the compensation period shall be 12 months. In
no event shall the compensation period extend beyond the end of the month in
which the Vice President reaches 65 years of age. During the compensation
period, the Vice President shall continue to receive his annual salary,
payable at the same time and in the same manner as it was paid immediately
prior to his termination. The term "annual salary" shall mean the annual
salary being paid the Vice President immediately before his termination
determined prior to any deductions from salary:
a. for salary reductions or deferrals under any plan of the
Corporation,
b. for payment of employee benefits under any plan of the
Corporation which are charged to the Vice President, and
c. for the purchase of stock under any plan of the Corporation.
In addition, the Vice President shall receive his target bonus (as
determined under the bonus plan last in effect for the Vice President) for the
fiscal year in which the Vice President terminated at the time that such bonus
was paid in the previous year. The same bonus shall be paid on the same month
and day in any succeeding year which occurs within the compensation period.
Notwithstanding any other provision in this paragraph, if the Vice President's
annual salary and target bonus is less than the average of the Vice
President's gross compensation for the three calendar years prior to the Vice
President's termination date, the Vice President shall receive, in monthly
payments, such average annual gross compensation during the compensation
period instead of his salary and target bonus. The term "gross compensation"
shall mean compensation as reported on the Vice President's Federal Income Tax
Withholding Statement (Form W-2) plus (i) any salary reductions or deferrals
under any plan of the Corporation, (ii) any amounts paid for employee benefits
under any plan of the Corporation which are charged to the Vice President, and
(iii) any amounts charged to the Vice President for the purchase of stock
under any plan of the Corporation. Notwithstanding any other provision of
this Agreement, if the aggregate present value of the payments to or for the
benefit of the Vice President under this Section and Section 5 equals or
exceeds three times the "base amount," as such term is defined in Internal
Revenue Code (the "Code") Section 280G, such that no deduction would be
allowed under that Section, the payments under this Section and Section 5
shall be reduced so that the aggregate present value of such payments shall
total $100.00 less than three times the base amount. The purpose of such
reduction is to ensure that the payments to the Vice President will not
constitute a parachute payment within the meaning of the Code Section
280G(b)(2)(A)(ii) as presently in effect. The Vice President shall have the
right (but shall not be required) to receive the benefit of any amendments to
the Code Section 280G which increase the amount that may be received without
loss of the deduction to the Corporation.
5. Benefits. Subject to the provision of Section 8, if there is a
termination of the Vice President's employment on or before 24 months after a
Trigger Date, the Vice President shall continue to be treated during the
compensation period as an "employee" under all stock option, purchase, or
acquisition plans in effect on his termination date; however, no new stock or
option awards shall be granted after the Vice President's termination date.
The Vice President, his dependents, beneficiaries and/or estate shall continue
to be entitled to all benefits under medical, dental, life insurance, and
similar plans (except for any disability plan) which are in effect on the Vice
President's termination date. If by reason of law or government regulation or
third-party contractual restriction the Vice President, his dependents,
beneficiaries, and/or estate cannot receive or participate in a benefit, the
Corporation shall, to the extent necessary, pay or provide for payment of such
benefit to the Vice President, his dependents, beneficiaries, and/or estate in
the same amount and manner as they would have been provided by the plan.
Notwithstanding the foregoing, if the Vice President is employed by another
employer, the Corporation shall not provide any medical, dental, life
insurance, and similar benefit to the extent it is provided by the employer.
The Vice President shall not continue to participate in the VWR Corporation
Retirement Plan, the VWR Tax Savings Plan, or in any other plan described in
the Code Section 401(a) after his termination date nor shall the Corporation
provide equivalent benefits. It is also understood that under present law an
incentive stock option would have to be exercised no later than three months
after termination of employment.
6. Restricted Stock Award - Indemnification of Vice President. The
Board of Directors has determined, in its best judgment, that the receipt of
stock by the Vice President under a Restricted Stock award or plan sponsored
by the Corporation, including a stock option plan, will represent "reasonable
compensation" (as defined in Section 280G of the Code) for services rendered
by the Vice President prior to the Vice President's termination. The
foregoing notwithstanding, the Corporation agrees that it shall indemnify the
Vice President against any excise tax payable pursuant to Section 4999 of the
Code by reason of his termination and the receipt of stock under a Restricted
Stock Award. Such indemnity shall be in an amount sufficient to cover the
compounding effect of the possible inclusion of the indemnity in any amount
determined to be an "excess parachute payment."
7. Effect of Death. In the event of the death of the Vice President
during the Compensation Period, the compensation under paragraph 4 for the
month in which death occurs shall be paid to the Vice President's estate and
the Compensation Period shall be deemed to have ended as of the close of
business on the last day of the month in which the death occurred. Coverage
of the Vice President and any dependents under any plan described in paragraph
5 shall also end on such date. Nothing in this paragraph shall affect
payments due in respect of the
Vice President's death.
8. Non-Competition and Confidentiality. The Vice President agrees
that:
a. There shall be no obligation on the part of the Corporation to
provide any further payments or benefits (other than benefits or payments
already earned or accrued) described in Sections 4 and 5 if, during the
compensation period, the Vice President shall be employed by or otherwise
engage or be interested in any business which is competitive with any business
of the Corporation or of any of its subsidiaries in which the Vice President
was engaged during his employment prior to a termination and if, but only if,
such employment or activity is likely to cause or causes serious damage to the
Corporation or any of its subsidiaries; and
b. During and after the compensation period, the Vice President
will not divulge or appropriate to the Vice President's own use or the use of
others any secret or confidential information or knowledge pertaining to the
business of the Corporation or any of its subsidiaries obtained during his
employment by the Corporation or any of its subsidiaries.
The Board of Directors has determined, in its best judgment, that the
payments to the Vice President under Sections 4 and 5 are reasonable
consideration for not competing as defined in paragraph a and for maintaining
the confidentiality of information as provided in paragraph b.
9. Arbitration of All Disputes. Any controversy or claim arising out
of or relating to this Agreement or the breach thereof shall be settled by
arbitration in the City of Philadelphia in accordance with the laws of the
Commonwealth of Pennsylvania by three arbitrators, one of whom shall be
appointed by the Corporation, one by the Vice President, and the third of whom
shall be appointed by the first two arbitrators. The arbitration shall be
conducted in accordance with the rules of the American Arbitration
Association, except with respect to the selection of arbitrators which shall
be as provided in this Section 9. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. In the
event it shall be necessary or desirable for the Vice President to retain
legal counsel and/or incur other costs and expenses in connection with the
enforcement of any and all of the Vice President's rights under this
Agreement, the Corporation shall pay the Vice President's reasonable
attorneys' fees, costs, and expenses in connection with the enforcement of his
said rights (including the enforcement of any arbitration award in court)
regardless of the final outcome, unless the arbitrators shall determine that
under the circumstances recovery by the Vice President of all or part of any
such fees, costs, and expenses would be unjust.
10. Notices. Any notices, requests, demands, and other communications
provided by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Vice President at the last address he has
filed in writing with the Corporation or, in the case of the Corporation, at
its principal executive offices.
11. Non-Alienation. The Vice President shall not have any right to
pledge, hypothecate, anticipate, or in any way create a lien upon any amounts
provided under this Agreement; and no benefits payable hereunder shall be
assignable in anticipation of payment either by voluntary or involuntary acts
or by operations of law.
12. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the Commonwealth of Pennsylvania.
13. Amendments. This Agreement may not be changed, waived, or
discharged orally but only by an instrument in writing, signed by the party
against which enforcement of such change, waiver, or discharge is sought.
14. Successors. This Agreement shall extend to and be binding upon the
Corporation, its successors, and assigns. For purposes of this Agreement,
unless the context otherwise requires, references herein to the Corporation
shall include its subsidiaries and affiliated persons.
15. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason,
the remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect.
16. Headings. The headings of the paragraphs in this Agreement are
solely for convenience or reference and shall not control the meaning or
interpretation of any provision of this Agreement.
VWR Corporation
By: (Signature)
---------------------------------
Jerrold B. Harris, President
By: (Signature)
-----------------------------------
Philip B. Hunsucker, Vice President
EXHIBIT 11
----------
COMPUTATION OF PER SHARE EARNINGS
Year Ended December 31,
1994 1993 1992
------------------------------------------------------------------------
(Amounts in thousands, except per share data)
PRIMARY
Average shares
outstanding 11,050 10,998 10,949
Net effect of
dilutive stock
options-based on
the treasury stock
method using average
market price 78 155 179
------- ------- ------
TOTAL 11,128 11,153 11,128
======= ======= ======
Income before cumulative
effect of accounting
change $ 2,053 $ 3,890 $9,430
======= ======= ======
Per share amount $ 0.18 $ 0.35 $ 0.85
======= ======= ======
Cumulative effect of
accounting change $(1,400)
=======
Per share amount $ (0.13)
=======
Net income $ 2,053 $ 2,490 $9,430
======= ======= ======
Per share amount $ 0.18 $ 0.22 $ 0.85
======= ====== ======
Year Ended December 31,
1994 1993 1992
-------------------------------------------------------------------------
FULLY DILUTED *
Average shares
outstanding 11,050 10,998 10,949
Net effect of
dilutive stock
options-based on
the treasury stock
method using period-
end market price,
if greater than
average market price 84 161 185
------- ------- ------
TOTAL 11,134 11,159 11,134
======= ======= ======
Income before cumulative
effect of accounting
change $ 2,053 $ 3,890 $9,430
======= ======= ======
Per share amount $ 0.18 $0.35 $ 0.85
======= ======= ======
Cumulative effect of
accounting change $(1,400)
=======
Per share amount $ (0.13)
=======
Net income $ 2,053 $ 2,490 $9,430
======= ======= ======
Per share amount $ 0.18 $ 0.22 $ 0.85
======= ======= ======
On April 20, 1992, the Company's Board of Directors authorized a two-for-one
stock split payable on June 3, 1992, to shareholders of record as of May 9,
1992. All share and per-share data give effect to the stock split.
* This information is presented for informational purposes.
EXHIBIT 21
----------
PARENT & SUBSIDIARIES
DECEMBER 31, 1994
There is no parent of the registrant.
Wholly-owned subsidiaries are:
VWR Scientific International Corporation - a Barbados Corporation
Scientific Holdings Corporation - a Delaware Corporation
VWR Scientific of Canada Ltd. - a Canadian Corporation, is
a wholly owned subsidiary of Scientific Holding Corporation.
EXHIBIT 23
----------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration Statements No.
33-49807, 33-35684, 33-03991, 33-34262, 33-05816, and 33-07590 on Forms S-8
and the related prospectus and No. 33-32002 on Form S-3 and the related
prospectus of our report dated February 7, 1995, with respect to the
consolidated financial statements and schedule of VWR Corporation included
in this Annual Report (Form 10-K) for the year ended December 31, 1994.
BY (SIGNATURE)
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
March 24, 1995
EXHIBIT 24
----------
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Jerrold B. Harris and Walter S. Sobon, or either of
them, their attorneys-in-fact, for them in any and all capacities, to sign the
Annual Report on Form 10-K of VWR Corporation for the twelve months ended
December 31, 1994, and to file same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact,
or their substitute or substitutes, may do or cause to be done by virtue
hereof.
Signature Title Date
--------- ----- ----
BY (SIGNATURE)
James W. Bernard
Director February 28, 1995
BY (SIGNATURE)
Richard E. Engebrecht
Director February 28, 1995
BY (SIGNATURE)
Jerrold B. Harris
Director February 28, 1995
BY (SIGNATURE)
Edward A. McGrath, Jr.
Director February 28, 1995
BY (SIGNATURE)
Curtis P. Lindley
Director February 28, 1995
BY (SIGNATURE)
Donald P. Nielsen
Director February 28, 1995
BY (SIGNATURE)
N. Stewart Rogers
Director February 28, 1995
BY (SIGNATURE)
Robert S. Rogers
Director February 28, 1995
BY (SIGNATURE)
James H. Wiborg
Director February 28, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000788043
<NAME> VWR CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 71,396
<ALLOWANCES> 619
<INVENTORY> 40,091
<CURRENT-ASSETS> 119,999
<PP&E> 65,816
<DEPRECIATION> 27,557
<TOTAL-ASSETS> 173,375
<CURRENT-LIABILITIES> 44,879
<BONDS> 0
<COMMON> 11,316
0
0
<OTHER-SE> 28,852
<TOTAL-LIABILITY-AND-EQUITY> 173,375
<SALES> 535,179
<TOTAL-REVENUES> 535,179
<CGS> 421,981
<TOTAL-COSTS> 421,981
<OTHER-EXPENSES> 105,040
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,137
<INCOME-PRETAX> 3,021
<INCOME-TAX> 968
<INCOME-CONTINUING> 2,053
<DISCONTINUED> 0
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<NET-INCOME> 2,053
<EPS-PRIMARY> .18
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