Exhibit 4(c)
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREUNDER. THIS DEBENTURE IS NOT TRANSFERABLE EXCEPT TO AN
AFFILIATE OF EM INDUSTRIES, INCORPORATED. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A COMMON SHARE AND
DEBENTURE PURCHASE AGREEMENT DATED MAY 24, 1995 AND A STANDSTILL
AGREEMENT DATED FEBRUARY 27, 1995, AS AMENDED SEPTEMBER 15, 1995
(COPIES OF WHICH AGREEMENTS ARE ON FILE WITH THE SECRETARY OF THE
COMPANY) WHICH PROVIDE, AMONG OTHER THINGS, FOR CERTAIN
RESTRICTIONS ON TRANSFER THEREOF. ANY SALE OR OTHER TRANSFER NOT
IN COMPLIANCE WITH SUCH AGREEMENTS SHALL BE VOID.
VWR CORPORATION
SUBORDINATED DEBENTURE
DUE SEPTEMBER 15, 2005
September 15, 1995 $135,000,000.00
No. 1
VWR CORPORATION, a Pennsylvania corporation (hereinafter called the
"Company"), for value received, hereby promises, subject to Article 3 hereof, to
pay to the Holder (as defined below) on September 15, 2005 the principal amount
of One Hundred Thirty-five Million and 00/100's Dollars ($135,000,000.00), in
such coin or currency of the United States of America as at the time of payment
shall be legal tender for public and private debts, at the principal office of
the Company, and, subject to Article 3 hereof, to pay interest on the unpaid
portion of said principal amount on each Interest Payment Date (as defined
below) commencing on December 1, 1995, at said office, pursuant to the terms and
conditions of, and in the manner described in, Section 2.1 hereof.
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. The terms defined in this Article whenever used
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in this Debenture shall have the respective meanings hereinafter specified.
(a) "Administrative Agent" shall have the meaning set forth in the Bank
Credit Agreement.
(b) "Affiliate" shall have the meaning set forth in the Purchase
Agreement.
(c) "Bank Credit Agreement" shall mean that certain Credit Agreement,
dated as of September 14, 1995, by and among the Company, VWR Scientific of
Canada Ltd., Scientific Holdings Corp. and VWR Scientific International
Corporation, as Borrowers; the several lenders from time to time
parties thereto; CoreStates Bank, N.A., as Administrative Agent and Collateral
Agent; Bank of America National Trust and Savings Association, as Syndication
Agent; PNC Bank, National Association as Documentation Agent, BA Securities,
Inc., as Arranger; and Seattle-First National Bank, as Lead Manager, as the same
may be amended, supplemented or otherwise modified from time to time.
(d) "Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, 11
U.S.C. et seq., or any successor statute thereto.
(e) "Commitment" shall have the meaning set forth in the Bank Credit
Agreement.
(f) "Common Shares" shall mean the common shares, par value $1.00, of the
Company.
(g) "Company" shall mean VWR Corporation, a Pennsylvania corporation, and
any successor corporation by merger, consolidation, sale or exchange of all or
substantially all of the Company's assets, or otherwise.
(h) "Debenture" shall mean this Subordinated Debenture or such other
Subordinated Debenture or Debentures exchanged therefor as provided in Section
2.2 herein.
(i) "Debenture Shares" shall have the meaning set forth in Section 2.1(b)
herein.
(j) "Deferred Interest" shall have the meaning set forth in Section 2.1(c)
herein.
(k) "Event of Default" shall have the meaning set forth in Section 7.1
herein.
(l) "Final Debenture Share Delivery Date" shall have the meaning set forth
in Section 2.1(c) herein.
(m) "Holder" shall mean EM Industries, Incorporated or any Affiliate of EM
Industries, Incorporated to which this Debenture is issued or subsequently
transferred in accordance with the terms provided herein.
(n) "Indebtedness" of any Person shall mean, without duplication:
(1) all indebtedness of such Person for borrowed money;
(2) all obligations of such Person for the deferred purchase price of
property or services (other than trade payables incurred in the ordinary
course of such Person's business);
(3) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments;
(4) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property);
(5) all obligations of such Person as lessee under leases that have
been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases;
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(6) all obligations, contingent or otherwise, of such Person under
acceptance, letter of credit or similar facilities;
(7) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any capital stock of or
other ownership or profit interest in such Person or any other Person or
any warrants, rights or options to acquire such capital stock;
(8) all Indebtedness of others referred to in clauses (1) through (7)
above guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Indebtedness or to advance or supply
funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment
of such Indebtedness or to assure the holder of such Indebtedness against
loss, (iii) to supply funds to or in any manner invest in the debtor
(including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (iv)
otherwise to assure a creditor against loss; and
(9) all Indebtedness referred to in clauses (1) through (7) above
secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.
(o) "Insolvency Event" shall have the meaning set forth in Section 3.4.
(p) "Interest Deferral Period" shall have the meaning set forth in Section
2.1(c).
(q) "Interest Payment Date" shall have the meaning set forth in Section
2.1(a).
(r) "Obligor" shall have the meaning set forth in Section 3.1.
(s) "Payment Blockage Notice" shall have the meaning set forth in Section
3.5.
(t) "Payment Blockage Period" shall have the meaning set forth in Section
3.5.
(u) "Person" shall mean an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
(v) "Purchase Agreement" means the Common Share and Debenture Purchase
Agreement, dated May 24, 1995, between the Company and EM Industries,
Incorporated, as assigned by EM Industries, Incorporated to its wholly owned
subsidiary and Affiliate, EM Laboratories, Incorporated pursuant to an
Assignment and Assumption Agreement dated June 13, 1995.
(w) "Redemption Price" shall have the meaning set forth in Section 2.4.
(x) "Representative" shall mean (i) with respect to obligations under the
Bank Credit Agreement, the Administrative Agent and (ii) with respect to any
other Senior Debt the holder of such Senior Debt or any agent appointed for such
Senior Debt under the instrument under which such Senior Debt arose.
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(y) "Restricted Security" shall have the meaning set forth in Section 5.2.
(z) "SEC" shall mean the United States Securities and Exchange Commission.
(aa) "Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as in effect at the
time.
(ab) "Senior Debt" shall mean:
(i) all obligations and liabilities of the Company (whether for or on
account of principal, reimbursement obligations, accrued and unpaid
interest (including without limitation all interest accruing on and after
an Insolvency Event, whether or not such interest is allowed as a claim in
any proceeding or case involving the Company), fees, expenses, indemnities
and other amounts payable under or in connection with the Bank Credit
Agreement and all documents or instruments executed in connection
therewith, whether outstanding on the date of issuance of this Debenture or
hereafter created, assumed or incurred, and shall include all renewals,
extensions, refinancings and refundings thereof from time to time; provided
that, Senior Debt under this clause (i) shall not include any obligations
of the Company for principal or reimbursement obligations to the extent
(but only to the extent) such amounts exceed $300,000,000 in principal
amount in the aggregate (i.e., not including interest, fees, expenses,
indemnities and the like); or
(ii) all obligations and liabilities of the Company under any and all
interest rate protection agreements to the extent such obligations and
liabilities are secured by the collateral documents that secure the
Company's obligations under the Bank Credit Agreement (or any renewal,
extension, refinancing or refunding of the Bank Credit Agreement) and shall
include all renewals, extensions, refinancings and refundings thereof from
time to time.
(ac) "Standstill Agreement" shall mean that certain Standstill Agreement,
dated February 27, 1995, between the Company and EM Industries, Incorporated, as
assigned by EM Industries, Incorporated to its wholly owned subsidiary and
Affiliate, EM Laboratories, Incorporated pursuant to an Assignment and
Assumption Agreement dated April 13, 1995, as such Standstill Agreement was
amended on September 15, 1995.
(ad) "Subsidiary" shall mean any entity of which securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are owned
directly or indirectly by the Company.
ARTICLE 2
INTEREST; EXCHANGES AND TRANSFER; REDEMPTION
SECTION 2.1. Payment of Interest.
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(a) The Company shall pay to the Holder interest, subject to Article 3
hereof, in the form and manner described in this Section (computed on the basis
of a year of 365 or 366 days, as the case may be), on the unpaid principal
amount hereof at the rate of 13% per annum on March 1, June 1, September 1 and
December 1 of each year (subject to paragraphs (b) and (c) below) during the
term of this Debenture (each, an "Interest Payment Date"), commencing on
December 1, 1995.
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(b) Beginning on the first Interest Payment Date and on each subsequent
Interest Payment Date occurring on or before the Final Debenture Share Delivery
Date (as defined below), subject to clauses (1) and (2) of this paragraph (b),
the Company shall pay interest to the Holder in the form of the aggregate number
of Common Shares equivalent to the dollar value of the interest due and payable
on such Interest Payment Date (collectively, the "Debenture Shares"), at an
issue price deemed to be $12.44 per share (the "Debenture Share Issue Price"),
until such time (the "Final Debenture Share Delivery Date") as the Company shall
have issued and the Holder shall have received the aggregate number of Debenture
Shares needed to increase the total number of Common Shares held by the Holder
and its Affiliates, taking into account the Holder's receipt of such Debenture
Shares on such date, to 49.89% of the total issued and outstanding Common Shares
on such date.
(1) If, however, the total amount of accrued interest due and payable
on such final Interest Payment Date occurring on or before the Final
Debenture Share Delivery Date exceeds the dollar amount equal to the
product of the total number of Debenture Shares received by the Holder on
such Interest Payment Date times the Debenture Share Issue Price, then such
excess dollar amount of accrued interest shall be deferred and added to the
amount of Deferred Interest (as defined below) and shall become due and
payable and shall be paid by the Company as provided in paragraph (e)
below.
(2) No fractional Common Shares will be issued as Debenture Shares in
connection with the interest payments provided for in this paragraph (b),
but in lieu of such fractional shares, if any, on each Interest Payment
Date occurring before the Final Debenture Share Delivery Date an amount of
interest equal to the product of the applicable fraction multiplied by the
Debenture Share Issue Price shall be deferred and added to the amount of
Deferred Interest (as defined below) and shall become due and payable and
shall be paid by the Company as provided in paragraph (e) below.
(c) On each Interest Payment Date occurring during the time period
subsequent to the Final Debenture Share Delivery Date but prior to the second
anniversary of the issuance of this Debenture (the "Interest Deferral Period"),
the interest due and payable on this Debenture, plus such amounts of deferred
interest, if any, described in clauses (1) and (2) of paragraph (b) above, shall
accrue but shall be deferred (the "Deferred Interest"), and such Deferred
Interest shall become due and payable on September 15, 2005, as described in
paragraph (e) below.
(d) On each Interest Payment Date occurring subsequent to the completion
of the Interest Deferral Period, the Company shall pay to the Holder interest on
the unpaid portion of the principal amount of this Debenture at the interest
rate set forth above in paragraph (a) above at the Company's principal office in
the coin or currency of the United States of America as at the time of payment
shall be legal tender for public and private debts. On September 15, 2005,
subject to paragraph (e) below, all interest that shall have accrued on the
unpaid principal balance of this Debenture subsequent to the final Interest
Payment Date shall become due and payable, and the Company shall pay such
accrued interest to the Holder at the Company's principal office in the coin or
currency of the United States of America as at the time of payment shall be
legal tender for public and private debts.
(e) On September 15, 2005, in addition to the accrued interest described
in the second sentence of paragraph (d) above, all Deferred Interest shall
become due and payable and the Company will pay the Holder the total amount of
Deferred Interest, plus interest thereon at the interest rate set forth above in
paragraph (a) above, at the Company's principal office in the coin or currency
of the United States of America as at the time of payment shall be legal tender
for public and private debts.
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(f) If any amount of the principal of, or interest on, this Debenture
shall not be paid for a period of 30 days after the date when due, the Company
shall pay the Holder interest on such overdue amount at a rate equal to the sum
of the interest rate set forth above in paragraph (a) above plus 5% per annum on
the amount thereof from the date when due until such amount shall have been paid
in full.
SECTION 2.2. Exchange and Registration of Transfer of Debentures. The
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Holder may, at its option, surrender this Debenture at the office of the Company
and receive in exchange therefor a Debenture or Debentures, each in the
denomination of $1,000,000.00 or an integral multiple of $1,000,000.00 in excess
thereof, dated as of the date of this Debenture, and payable to such transferee,
or order, as may be designated by such Holder. The aggregate principal amount
of such Debenture or Debentures exchanged in accordance with this Section shall
equal the aggregate unpaid principal amount of this Debenture as of the date of
such surrender; provided, however, that upon such exchange there shall be filed
with the Company the name and address for all purposes hereof of the Holder or
Holders of the Debenture or Debentures delivered in such transfer. This
Debenture, when presented for registration of transfer or for exchange or
payment, shall (if so required by the Company) be duly endorsed by, or be
accompanied by a written instrument of transfer in form reasonably satisfactory
to the Company duly executed by, the Holder or its attorney duly authorized in
writing.
SECTION 2.3. Loss, Theft, Destruction of Debenture. Upon receipt of
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evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Debenture and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Debenture, the Company will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Debenture, a new Debenture of like
tenor and unpaid principal amount dated as of the date hereof. This Debenture
shall be held and owned upon the express condition that the provisions of this
Section are exclusive with respect to the replacement of a mutilated, destroyed,
lost or stolen Debenture and shall preclude any and all other rights and
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement of negotiable instruments or other
securities without their surrender.
SECTION 2.4. Optional Redemption by the Company. The Company at its
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election, upon notice given as provided in Section 2.5, may redeem this
Debenture in whole or in part at any time if it remains outstanding on or after
September 15, 2000 at the aggregate principal amount outstanding so to be
redeemed, together with accrued interest thereon to the date fixed for such
redemption (the "Redemption Price"); provided, however, that the source of funds
for such redemption shall be the Company's cash flow and shall not consist in
whole or in part of any Indebtedness of the Company incurred for the purpose of
funding such redemption. Partial redemptions shall be in an aggregate principal
amount of $1,000,000.00 or an integral multiple of $1,000,000.00 in excess
thereof. The amount to be redeemed shall be calculated according to the
respective unredeemed principal amount hereof.
SECTION 2.5. Notice of Redemptions. In the case of any redemption of this
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Debenture, notice thereof shall be given in writing to the Holder not fewer than
30 nor more than 60 days prior to the date fixed for such redemption, which
notice shall specify the date fixed for such redemption and make reference to
this Section 2.5 pursuant to which such redemption is to be made. Such notice
of redemption and all other notices to be given to the Holder shall be given by
registered mail at its designated address.
Upon notice of any redemption being given as provided in this Section, the
Redemption Price shall become due and payable to the Holder, at the office of
the Company on the date specified in such
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notice and from and after such date (unless the Company shall default in the
payment of the Redemption Price) interest shall cease to accrue on this
Debenture or portion hereof subject to such notice of redemption.
SECTION 2.6. Surrender of Debentures; Notation Thereon. Upon any
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redemption of a portion of the principal amount of this Debenture pursuant to
Section 2.4, the Holder at its option may require the Company to make and
deliver, at the expense of the Company (other than for transfer taxes, if any),
upon surrender of this Debenture, a new Debenture payable to the Holder, or to
such Person or Persons, or order, as may be designated by the Holder, for the
principal amount of this Debenture then remaining unredeemed, dated as of the
date to which interest has been paid on the unredeemed principal amount of this
Debenture (or, if no interest has been paid hereon, then dated as of the date of
this Debenture), or may present this Debenture to the Company for notation
hereon of the payment of the portion of the principal amount so redeemed. The
Company may, as a condition of payment of all or any of the principal of or
interest on this Debenture, require the Holder to present this Debenture for
notation of such payment and, if this Debenture be paid in full, require the
surrender hereof.
SECTION 2.7. Who Deemed Absolute Owner. The Company may deem the Person
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in whose name this Debenture shall be registered upon the registry books of the
Company to be, and may treat it as, the absolute owner of this Debenture
(whether or not this Debenture shall be overdue) for the purpose of receiving
payment of or on account of the principal of this Debenture and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
All such payments shall be valid and effectual to satisfy and discharge the
liability upon this Debenture to the extent of the sum or sums so paid.
ARTICLE 3
SUBORDINATION
The payment of this Debenture shall be subject to the following
restrictions:
SECTION 3.1. Agreement to Subordinate. Anything in this Debenture or the
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Purchase Agreement to the contrary notwithstanding, the Company agrees, and by
accepting this Debenture the Holder agrees, that the indebtedness evidenced by
this Debenture is subordinate and subject in right of payment, to the extent and
in the manner provided in this Article 3, to the prior payment in full in cash
of all Senior Debt and that the subordination is for the benefit of and
enforceable by the holders of Senior Debt. This Debenture shall in all respects
rank pari passu with all other present and future unsecured and unsubordinated
obligations of the Company, and only Senior Debt shall rank senior to this
Debenture. The subordination provided herein is absolute, unconditional and
irrevocable irrespective of:
(a) any failure of, or delay by, a holder of Senior Debt:
(i) to assert any claim or demand or to enforce any right, power or
remedy against the Company or any other Person primarily or secondarily
liable with respect to the Senior Debt (an "Obligor"); or
(ii) to exercise any right, power or remedy against the Company or any
Obligor or any collateral securing any Senior Debt;
(b) any change in the time, manner, or place of payment of, or in any
other term of, all or any Senior Debt;
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(c) any reduction, limitation, impairment, or termination of any Senior
Debt for any reason, including any claim of waiver, release, surrender,
alteration or compromise;
(d) any amendment to, rescission, waiver, or other modification of, or any
consent to departure from, any of the terms of the Bank Credit Agreement or any
other document under which Senior Debt is incurred;
(e) any addition, exchange, release, surrender or nonperfection of any
collateral securing any Senior Debt; or
(f) any other circumstances which might otherwise constitute a defense
available to, or a legal or equitable discharge of, or otherwise prejudicially
affect the subordination herein provided.
SECTION 3.2. Reinstatement, etc. The subordination provisions of this
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Article 3 shall continue to be effective or be reinstated, as the case may be,
if at any time any payment (in whole or in part) of any Senior Debt is rescinded
or must otherwise be restored by the holder of such Senior Debt upon any
Insolvency Event (as herein defined) or otherwise, all as though such payment
had not been made.
SECTION 3.3. Certain Waivers. The Holder hereby waives promptness,
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diligence, notice of acceptance, and any other notice with respect to any of the
Senior Debt and any requirement that any holder of the Senior Debt (or any agent
therefor) protect, secure, perfect, or insure any lien, security interest or
similar encumbrance or any property subject thereto, or exhaust any right or
take any action against the Company, any Obligor or any other Person or any
collateral securing any Senior Debt; provided, that the Company shall send, or
cause the Administrative Agent to send, to the Holder, at the following address
(or such other address as the Holder shall notify the Company and the
Administrative Agent in writing): c/o EM Industries, Incorporated, 0 Xxxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, a copy of any Payment Blockage Notice or
notice of acceleration of the principal amount owed under the Bank Credit
Agreement promptly after the same is sent by the Administrative Agent to the
Company; provided, that the failure of the Company or the Administrative Agent
to send to the Holder a copy of such notice shall not affect or impair in any
respect the rights of any holder of Senior Debt hereunder or the extent or scope
of the subordination provisions herein.
SECTION 3.4. Insolvency, Bankruptcy, Dissolution of Company. Upon any
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payment or distribution (whether in cash, securities or other property) to
creditors of the Company in the event of (i) any winding-up, insolvency,
bankruptcy, liquidation or reorganization of the Company, whether voluntary or
involuntary, (ii) any proceeding or case for reorganization, liquidation,
bankruptcy, dissolution or other winding-up of the Company or its assets,
whether or not involving insolvency or bankruptcy, (iii) any assignment by the
Company for the benefit of creditors or (iv) any receivership or other similar
proceeding or any marshalling of assets of the Company (each, an "Insolvency
Event"):
(a) all Senior Debt shall first be paid in full in cash (including without
limitation the cash collateralizing at 105% of the face amount of any
obligations under outstanding letters of credit) before the Holder shall be
entitled to receive any payment or other distribution on or in respect of this
Debenture; and
(b) until all Senior Debt is paid in full in cash (including without
limitation the cash collateralizing at 105% of the face amount of any
obligations under outstanding letters of credit), any payment or distribution to
which the Holder would be entitled but for this Article 3 (whether in cash,
property, securities or whatever) shall be made to holders of Senior Debt as
their interests may appear,
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except that the Holder may receive shares of the Company as reorganized or
readjusted or securities of the Company or any other corporation if (i) in the
case of securities, the payment of such securities is subordinate to Senior Debt
to at least the same extent as this Debenture is subordinate to Senior Debt and
(ii) in the case of stock or securities, such stock or securities are issued
pursuant to a plan of reorganization which does not alter, amend or impair (as
defined in Section 1124 of the Bankruptcy Code) the rights of any holder of
Senior Debt.
SECTION 3.5. Default on Senior Debt
----------------------
(a) The Company may not pay the principal of, premium, if any, or interest
on, this Debenture or make any deposit in respect of this Debenture and may not
repurchase, redeem or otherwise retire this Debenture (collectively, "pay this
Debenture") if:
(i) any Senior Debt is not paid when due,
(ii) there shall be a default under the Bank Credit Agreement with
respect to the following financial covenants, which covenants are currently
set forth in Sections 9.1 (a) through (e) therein: (v) Maintenance of
Consolidated Net Worth, (w) Minimum Consolidated EBITDA, (x) Interest
Coverage Ratio, (y) Senior Leverage Ratio or (z) Fixed Charge Coverage
Ratio, or
(iii) any other default on Senior Debt occurs and the maturity of
such Senior Debt is accelerated in accordance with its terms unless, in
each case, the default has been cured or waived and any such acceleration
has been rescinded or such Senior Debt has been paid in full in cash
(including without limitation the cash collateralizing at 105% of the face
amount of any obligations under outstanding letters of credit) and any
commitment in connection with such Senior Debt to extend further loans or
credit to the Company or any Affiliate thereof shall have been terminated
(including without limitation, with respect to obligations under the Bank
Credit Agreement, the termination of the Commitment).
During the continuation of any default (other than a default described in
clauses (i), (ii) or (iii) above) with respect to any Senior Debt, pursuant to
which the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay this
Debenture for a period (a "Payment Blockage Period") commencing upon the receipt
by the Company of written notice of such default from a Representative of such
Senior Debt specifying an election to effect a Payment Blockage Period (a
"Payment Blockage Notice") and ending 179 days thereafter (or earlier if such
Payment Blockage Period is terminated (i) by written notice to the Company from
the Representative which gave such Payment Blockage Notice, (ii) by repayment in
full in cash of such Senior Debt (including without limitation the cash
collateralizing at 105% of the face amount of any obligations under outstanding
letters of credit) and the termination of any commitment in connection with such
Senior Debt to extend further loans or credit to the Company or any Affiliate
thereof (including without limitation, with respect to obligations under the
Bank Credit Agreement, the termination of the Commitment) or (iii) because the
default specified in such Payment Blockage Notice is no longer continuing, as
verified in writing by the Representative that sent such Payment Blockage
Notice). Notwithstanding the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section), unless the holders
of such Senior Debt or the Representative of such holders shall have accelerated
the maturity of such Senior Debt, the Company shall resume payments (including
any missed payments) on this Debenture after the end of such Payment Blockage
Period unless such payment is otherwise prohibited under this Article 3.
Multiple Payment Blockage Periods may be imposed so long as (x) the cumulative
period covered by all such
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Payment Blockage Periods does not exceed 179 days in any 365 consecutive-day
period and (y) no more than one Payment Blockage Period may result from the same
default.
(b) The failure to make a payment or distribution on this Debenture by
reason of this Article 3 shall not be construed or deemed to prevent the
occurrence of an Event of Default hereunder; provided that any acceleration of
payment of this Debenture resulting therefrom shall be rescinded if and when the
following conditions shall be simultaneously satisfied: (i) each payment or
distribution which gave rise to such event of default shall be made, and (ii) no
other such event of default shall have occurred.
SECTION 3.6. Subordinated Acceleration; Standstill.
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(a) Holder agrees to give the Administrative Agent under the Bank Credit
Agreement not less than 5 days' prior notice of its intention to accelerate the
maturity of this Debenture pursuant to Section 6.2 hereof.
(b) Holder will not for a period of 90 days following an acceleration of
this Debenture (other than such acceleration resulting from the acceleration of
a majority in principal amount of the then outstanding amount of Senior Debt)
pursue or exercise any other right, power or remedy under this Debenture, the
Purchase Agreement or applicable law.
SECTION 3.7. Turnover. If Holder receives any payment or other
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distribution on this Debenture (whether in cash, property, securities or
whatever) at a time when such payment or distribution should not have been made
to Holder by reason of this Article 3, such payment or distribution shall be
deemed to have been received and held in trust for the benefit of the holders of
the Senior Debt, and shall be segregated from other property of Holder and be
paid and delivered as promptly as practicable to the holders of the Senior Debt,
as their interests may appear, for application to, or collateral for, the
payment or prepayment of the Senior Debt.
SECTION 3.8. Subrogation. If all Senior Debt has been paid in full in
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cash (including without limitation the cash collateralizing at 105% of the face
amount of any obligations under outstanding letters of credit) and any
commitment in connection with such Senior Debt to extend further loans or credit
to the Company or any Affiliate thereof shall have been terminated (including
without limitation, with respect to obligations under the Bank Credit Agreement,
the termination of the Commitment), then until this Debenture is paid in full,
Holder shall be subrogated to all rights of holders of Senior Debt, including
the right to receive payments or distributions in respect thereof. A payment or
distribution made to holders of Senior Debt pursuant to this Article 3 which
otherwise would have been made to Holder shall not be construed or deemed, as
between the Company and Holder, a payment or distribution in respect of Senior
Debt.
SECTION 3.9. Relative Rights. This Article 3 defines the relative rights
---------------
of Holder and the holders of Senior Debt. Nothing herein shall:
(a) impair, as between the Company and Holder, the obligation of the
Company, which is absolute and unconditional, to pay principal of, premium, if
any, and interest on this Debenture in accordance with its terms; or
(b) except as otherwise expressly provided herein, prevent Holder from
exercising its available remedies upon a default, subject to the rights of
holders of Senior Debt to receive distributions otherwise payable to Holder.
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SECTION 3.10. Subordination May Not be Impaired No right of any holder
---------------------------------
of Senior Debt to enforce the subordination of the indebtedness evidenced by
this Debenture shall at any time in any way be prejudiced or impaired by an act
or omission in good faith by a holder of Senior Debt (or any agent therefor), or
by any act or failure to act by the Company or by the Company's failure to
comply with this Debenture.
SECTION 3.11. Reliance by Holders of Senior Debt on Subordination
---------------------------------------------------
Provisions. Holder by accepting this Debenture acknowledges and agrees that the
----------
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt, whether such Senior Debt
was created or acquired before or after the issuance of this Debenture, to
acquire and continue to hold, or to continue to hold, such Senior Debt and such
holder of Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.
ARTICLE 4
RESTRICTIONS ON TRANSFER; REGISTRATION RIGHTS
SECTION 4.1. Restrictive Legend. Unless and until otherwise permitted by
------------------
this Section, any certificate for Debenture Shares initially issued pursuant to
this Debenture and any certificate for Common Shares issued to any subsequent
transferee of any such certificate, shall be stamped or otherwise imprinted with
a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO A COMMON SHARE AND DEBENTURE PURCHASE AGREEMENT DATED
MAY 24, 1995 AND A STANDSTILL AGREEMENT DATED FEBRUARY 27, 1995,
AS AMENDED SEPTEMBER 15, 1995 (COPIES OF WHICH AGREEMENTS ARE ON
FILE WITH THE SECRETARY OF THE COMPANY) WHICH PROVIDE, AMONG
OTHER THINGS, FOR CERTAIN RESTRICTIONS ON TRANSFER THEREOF. ANY
SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SUCH AGREEMENTS
SHALL BE VOID.
SECTION 4.2. Restrictions on Transfer; Notice of Proposed Transfers;
-------------------------------------------------------
Opinion of Counsel.
------------------
(a) This Debenture is not transferable to any Person who is not
an Affiliate of EM Industries, Incorporated.
(b) Prior to any transfer or attempted transfer of this Debenture
or any Debenture Shares held by a Holder before such Debenture or Debenture
Shares have been registered under the Securities Act in accordance with the
terms of this Debenture, the Holder shall give written notice to the Company of
its intention to effect such transfer. Each such notice shall describe the
manner and circumstances of the proposed transfer. Any sale or other transfer
not in compliance herewith shall be void.
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(c) For so long as the transfer restrictions set forth in the
Purchase Agreement, Standstill Agreement or this Debenture are in effect, any
certificate evidencing Debenture Shares issued upon transfer (each, a
"Restricted Security") shall bear the restrictive legend set forth in Section
4.1, provided, however, that in the event counsel for the Company shall opine
that the removal of any legend (or part thereof) required to appear on any
certificate pursuant to the Purchase Agreement from the certificates
representing the Common Shares is permissible, the Company shall remove from
such certificates all legends no longer required and shall rescind any stop-
transfer instructions previously communicated to its transfer agent relating to
such certificates.
SECTION 4.3. Registration Rights. The Company shall have no obligation to
-------------------
the Holder of any Restricted Security to cause or consent to the registration of
any such security under the Securities Act, except to the extent set forth in
the Standstill Agreement.
ARTICLE 5
COVENANTS
The Company covenants and agrees that so long as this Debenture shall be
outstanding:
SECTION 5.1. Payment of Debenture; Source of Funds. The Company will
-------------------------------------
punctually pay or cause to be paid the principal of, or interest on, this
Debenture according to the terms hereof. The source of funds for all such
payments of principal and interest shall be the Company's cash flow and shall
not consist in whole or in part of any Indebtedness of the Company.
SECTION 5.2. Notice of Default. If any one or more events occur which
-----------------
constitute or which, with the giving of notice or the lapse of time or both,
would constitute an Event of Default or if the Holder shall demand payment or
take any other action permitted upon the occurrence of any such Event of
Default, the Company will forthwith give notice to the Holder, specifying the
nature and status of the Event of Default or other event or of such demand or
action, as the case may be.
SECTION 5.3. Sufficient Number of Authorized Common Shares. The Company
---------------------------------------------
will at all times have authorized and reserved for issuance a sufficient number
of Common Shares to provide for the issuance of the Debenture Shares as provided
herein.
SECTION 5.4. Insurance. The Company will carry and maintain in full force
---------
and effect at all times with insurers the Company reasonably believes to be
financially sound and reputable such insurance in such amounts as is customary
in the respective industries of the Company and such subsidiaries.
ARTICLE 6
REMEDIES
SECTION 6.1. Events of Default. "Event of Default" wherever used herein
-----------------
means any one of the following events:
(a) default in the due and punctual payment of the principal of,
interest on, or any other amount owing in respect of, this Debenture when and as
the same shall become due and payable, and continuance of such default for a
period of thirty (30) calendar days; or
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(b) default in the performance or observance of any covenant or
agreement of the Company in this Debenture (other than a covenant or agreement a
default in the performance of which is specifically provided for elsewhere in
this Section), and the continuance of such default for a period of thirty (30)
calendar days after there has been given to the Company by a Holder a written
notice specifying such default and requiring it to be remedied; or
(c) the entry of a decree or order by a court having jurisdiction
in the premises adjudging the Company or any Subsidiary a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under the Bankruptcy
Code or any other applicable Federal or state law, or appointing a receiver,
liquidator, assignee, trustee or sequestrator (or other similar official) of the
Company or of any substantial part of its property, or ordering the winding-up
or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 90 calendar days; or
(d) the institution by the Company or any Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Code or any other applicable Federal or state law,
or the consent by it to the filing of any such petition or to the appointment of
a receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such action;
or
(e) any principal with respect to other Indebtedness (other than
Senior Debt) of the Company or any Subsidiary exceeding $1,000,000 is not repaid
within any applicable grace period after its final maturity date or becomes due
and payable by reason of default before its final maturity date.
SECTION 6.2. Acceleration of Maturity. If an Event of Default occurs and
------------------------
is continuing, then and in every such case the Holder may, subject to the
restrictions contained in Article 3, declare the principal of this Debenture to
be due and payable immediately, by a notice in writing to the Company, and upon
any such declaration the principal of this Debenture shall become immediately
due and payable.
SECTION 6.3. Remedies Not Waived. No course of dealing between the
-------------------
Company and the Holder or any delay in exercising any rights hereunder shall
operate as a waiver by the Holder.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Register. The Company shall keep at its principal office a
--------
register in which the Company shall provide for the registration of this
Debenture.
SECTION 7.2. Governing Law. This Debenture shall be exclusively governed
-------------
by and construed in accordance with the laws of the Commonwealth of Pennsylvania
without reference to the conflicts of laws principles thereof.
SECTION 7.3. Headings. The headings of the Articles and Sections of this
--------
Debenture are inserted for convenience only and do not constitute a part of this
Debenture.
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IN WITNESS WHEREOF, the Company has caused this Debenture to be signed
by its duly authorized officer under its corporate seal, attested by its duly
authorized officer, on the date of this Debenture.
VWR CORPORATION
By:/s/Xxxxxxx X. Xxxxxx
---------------------------
Name:
Title:
Attest
By:/s/Xxxxxx X. Xxxxx
------------------------
Name:
Title:
[Corporate Seal]
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