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EXHIBIT (c)(3)
STANDSTILL AGREEMENT
by and between
VWR CORPORATION
and
EM INDUSTRIES, INCORPORATED
February 27, 1995
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS........................................................................................... 6
1.1 Act................................................................................................. 6
1.2 Affiliate........................................................................................... 6
1.3 Affiliated Director................................................................................. 7
1.4 Assignee............................................................................................ 7
1.5 Board............................................................................................... 7
1.6 Business Day........................................................................................ 7
1.7 Commission.......................................................................................... 7
1.8 Common Share and Warrant Purchase Agreement........................................................ 7
1.9 Common Stock....................................................................................... 7
1.10 Common Stock Equivalents........................................................................... 7
1.11 Effective Date.................................................................................... 7
1.12 Exchange Act...................................................................................... 7
1.13 Holder............................................................................................ 8
1.14 Investment Banking Firm........................................................................... 8
1.15 Market Disposition Program........................................................................ 8
1.16 Notice of Exercise................................................................................ 8
1.17 Notice of Issue................................................................................... 8
1.18 Notice of Proposed Sale........................................................................... 8
1.19 Percentage Limitation............................................................................. 8
1.20 Permitted Percentage.............................................................................. 8
1.21 Person............................................................................................ 8
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1.22 Principal Trading Market.......................................................................... 8
1.23 Private Sale...................................................................................... 8
1.24 Purchaser......................................................................................... 8
1.25 Purchaser Affiliate............................................................................... 9
1.26 Registrable Securities............................................................................ 9
1.27 Registration Expenses............................................................................. 9
1.28 Restriction Termination Date...................................................................... 9
1.29 Selling Expenses.................................................................................. 9
1.30 Twenty Day Average................................................................................ 9
1.31 Unaffiliated Director............................................................................. 9
1.32 Voting Securities................................................................................. 9
1.33 13D Group......................................................................................... 9
ARTICLE 2. RESTRICTIONS ON ACQUISITION OF ADDITIONAL SHARES BY PURCHASER......................................... 9
2.1 No Purchases Before Effective Date................................................................. 9
2.2 No Purchases Beyond Percentage Limitation.......................................................... 9
2.3 Permitted Purchase Due to Increases in Common Stock Equivalents.................................... 10
2.4 Procedures Concerning Purchaser's Acquisition of Shares From Company in Response to
Increases in Common Stock Equivalents.......................................................... 10
2.5 Limitation on Purchaser's Right to Purchase Common Stock Pursuant to Section 2.3 in the
Event of a Business Acquisition by Company..................................................... 11
2.6 Permitted Purchase If Company Proposes to Issue Voting Securities for Cash......................... 11
2.7 Permitted Purchase in Response To Third Party Tender Offer or Exchange Offer....................... 12
2.8 Permitted Purchase With Board Approval............................................................. 13
2.9 Permitted Purchase by 100% Tender Offer After Four Years........................................... 13
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2.10 Requirements for Tender Offers .................................................................... 13
2.11 Mandatory Disposal of Excess Shares ............................................................... 13
2.12 Monthly Report of Ownership ....................................................................... 14
2.13 General Rule Regarding Acquisition of Voting Securities ........................................... 14
2.14 Requirements of Trading Exchange or Stock Quotation System ........................................ 14
ARTICLE 3. SALES OF SHARES BY PURCHASER AND RELATED RIGHTS AND OBLIGATIONS OF PURCHASER AND COMPANY.............. 15
3.1 General Restrictions on Resale or Other Disposition................................................ 15
3.2 Allowed Sales Pursuant to Registration Rights...................................................... 15
3.3 Allowed Sales Pursuant to Rule 144................................................................. 15
3.4 Allowed Private Sales to Third Parties or Pursuant to Tender Offer................................. 15
3.5 Allowed Transfers by EMI and Purchaser Affiliates.................................................. 15
3.6 Allowed Transfers Upon Approved Business Disposition............................................... 15
3.7 Right of First Refusal............................................................................. 16
3.8 Procedures for Right of First Refusal.............................................................. 16
3.9 Purchaser's Covenants With Respect to Distribution of Shares....................................... 18
3.10 Company's Undertaking to Cooperate in Rule 144 Transactions....................................... 18
ARTICLE 4. LEGENDS AND STOP TRANSFER ORDERS...................................................................... 18
4.1 Placement of Legends and Entry of Stop Transfer Orders............................................. 18
4.2 Removal of Legends and Stop Transfer Orders........................................................ 19
ARTICLE 5. CERTAIN AGREEMENTS OF PURCHASER AND COMPANY........................................................... 19
5.1 Future Actions..................................................................................... 19
5.2 Acquisitions and Transfers in Contravention of Agreement........................................... 20
5.3 Company's Issuance of Securities................................................................... 20
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ARTICLE 6. BOARD OF DIRECTORS.................................................................................... 20
6.1 Size of Board...................................................................................... 20
6.2 Terms.............................................................................................. 20
6.3 Vacancies.......................................................................................... 21
6.4 Proportional Representation........................................................................ 21
ARTICLE 7. REGISTRATION RIGHTS................................................................................... 21
7.1 Duration of Registration Rights.................................................................... 21
7.2 Demand Registration Covenant....................................................................... 22
7.3 Participation Registration Covenant................................................................ 23
7.4 Company's Obligations in Connection with Registrations............................................. 23
7.5 Conditions to Obligations of Company Under Registration Covenants.................................. 24
7.6 Expenses........................................................................................... 26
7.7 Assignability of Registration Rights............................................................... 26
7.8 Indemnification.................................................................................... 26
ARTICLE 8. TERMINATION........................................................................................... 29
8.1 Termination........................................................................................ 29
8.2 Extended Cure Period............................................................................... 29
ARTICLE 9. REPRESENTATIONS AND WARRANTIES........................................................................ 29
9.1 Of Company......................................................................................... 29
9.2 Of EMI............................................................................................. 30
ARTICLE 10. MISCELLANEOUS........................................................................................ 30
10.1 Specific Enforcement.............................................................................. 30
10.2 Severability...................................................................................... 31
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10.3 Expenses.......................................................................................... 31
10.4 Assignment; Successors............................................................................ 31
10.5 Amendments........................................................................................ 31
10.6 Notices........................................................................................... 31
10.7 Attorneys' Fees................................................................................... 32
10.8 Integration....................................................................................... 32
10.9 Waivers........................................................................................... 32
10.10 Governing Law.................................................................................... 32
10.11 Counterparts..................................................................................... 33
10.12 Cooperation...................................................................................... 34
10.13 Section Headings and Captions.................................................................... 34
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STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT (the "Agreement") is made this 27th
day of February, 1995, by and between VWR CORPORATION, a Pennsylvania
corporation ("Company") and EM Industries, Incorporated, a New York corporation
("EMI").
RECITALS
A. Company and EMI have entered into a Common Share and
Warrant Purchase Agreement pursuant to which, among other things, Company shall
issue and sell to EMI Common Stock (as defined below) of Company and a common
share purchase warrant (the "Warrant").
B. The parties seek to regulate the acquisition and
disposition by Purchaser (as defined below) of Company's Voting Securities,
provide for EMI representation on Company's Board, and generally xxxxxx a
constructive and mutually beneficial relationship.
C. EMI and Company acknowledge that Company has made, prior to
the date hereof, a careful evaluation of Purchaser's investment objectives with
regard to its ownership of Voting Securities, and the compatibility of
Purchaser's management and objectives with the management and objectives of
Company; that such factors were critical to Company in its decision to enter
into this Agreement; that, absent the provisions of Articles 2 through 4 hereof,
Purchaser's ownership of Voting Securities would present an unusual opportunity
for it to gain effective control of Company and Company might have reached a
different decision with regard to entering into this Agreement and the Common
Share and Warrant Purchase Agreement; that, therefore, the provisions of
Articles 2 through 4 were a material inducement to Company to enter into this
Agreement and the Common Share and Warrant Purchase Agreement; and, that the
primary purposes of Articles 2 through 4 are that, so long as such provisions
remain in effect and except as permitted by such provisions, the Voting
Securities owned by Purchaser not come to rest in the hands of any single holder
or group of holders other than Purchaser, and Purchaser's ownership of Voting
Securities not be increased, other than as provided for in this Agreement or
with the consent of Company. EMI acknowledges that such purposes are reasonable
and that the provisions of Articles 2 through 4 are reasonable in view of such
purposes.
NOW, THEREFORE, in consideration of the mutual agreements and
covenants set forth herein and in the Common Share and Warrant Purchase
Agreement, and for other good and valuable consideration, the parties agree as
follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, in addition to other terms defined
elsewhere herein, the following terms have the respective meanings set forth
below:
1.1 Act. "Act" means the Securities Act of 1933, as amended.
1.2 Affiliate. "Affiliate" means any Person directly or
indirectly controlled by, controlling or under common control with another
Person. For purposes of this definition, "control" means the power to direct the
management or policies of the Person in question.
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1.3 Affiliated Director. "Affiliated Director" means any
member of the Board who has been designated by EMI under Article 6 for
nomination or appointment as a director of Company.
1.4 Assignee. See Section 10.4.
1.5 Board. "Board" means the Board of Directors of Company as
constituted from time to time.
1.6 Business Day. "Business Day" means any Monday through
Friday, inclusive, excluding any such day which is a Federal or Commonwealth of
Pennsylvania holiday.
1.7 Commission. "Commission" means the Securities and Exchange
Commission of the United States.
1.8 Common Share and Warrant Purchase Agreement. "Common Share
and Warrant Purchase Agreement" means the Common Share and Warrant Purchase
Agreement, dated February 27, 1995, between Company and EMI.
1.9 Common Stock. "Common Stock" means the common shares of
Company, par value $1.00 per share or such other par value as may be established
from time to time.
1.10 Common Stock Equivalents. "Common Stock Equivalents"
means the sum of the following, determined at any time during the term of this
Agreement: (a) the total number of shares of issued and outstanding Common
Stock, plus (b) the number of shares of Common Stock reserved for issuance
pursuant to stock options granted (but not yet exercised) under Company's stock
option plans, and plus (c) the number of votes which may be cast for the
election of directors (whether directly or by formula) as a result of ownership
of any Voting Securities other than Common Stock; provided, however, the shares
of Common Stock described in (b) above shall not be included in Common Stock
Equivalents until the earlier of (i) the date the options are exercisable, or
(ii) the end of the fiscal year of Company during which such options were
granted; provided, further, that the votes described in (c) above shall not be
included in Common Stock Equivalents until the Voting Securities other than
Common Stock are able to be voted for the election of directors.
1.11 Effective Date. "Effective Date" means the date the
acquisition of Common Stock by Purchaser is consummated pursuant to the terms of
the Common Share and Warrant Purchase Agreement.
1.12 Exchange Act. "Exchange Act" means the Securities
Exchange Act of 1934, as amended.
1.13 Holder. "Holder" means Purchaser and any Person to whom
the registration rights under Article 7 have been transferred in compliance with
Section 7.7.
1.14 Investment Banking Firm. "Investment Banking Firm" means
an internationally recognized investment banking firm.
1.15 Market Disposition Program. See Section 3.8(a).
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1.16 Notice of Exercise. See Section 3.8(b)(iii).
1.17 Notice of Issue. See Section 2.6.
1.18 Notice of Proposed Sale. See Section 3.8(a).
1.19 Percentage Limitation. See Section 2.2.
1.20 Permitted Percentage. "Permitted Percentage" means the
Percentage Limitation or, if the percentage of Common Stock Equivalents owned by
Purchaser increases as a consequence of (a) a reduction in the number of
outstanding Voting Securities other than as a result of (1) the expiration of
rights to acquire Common Stock under Company's stock option plans or (2) the
lapse of rights to vote for the election of directors as a result of ownership
of any Voting Securities other than Common Stock, (b) Purchaser's acquisitions
of Voting Securities with Board approval in accordance with Section 2.8, or (c)
Purchaser's acquisitions of Voting Securities in a tender offer permitted by
Section 2.7, following which Company fails to repurchase shares of Voting
Securities in accordance with Section 2.7(b), such greater percentage of Common
Stock Equivalents owned by Purchaser after such reduction, acquisition, or
failure, respectively. The Permitted Percentage shall be reduced from time to
time if, upon the issuance by Company of Common Stock Equivalents, Purchaser
either does not or is not permitted by this Agreement to purchase its full
Permitted Percentage of such issuance.
1.21 Person. "Person" means any individual, partnership,
association, corporation, trust, limited liability company or other entity,
including without limitation employee pension, profit sharing, and other benefit
plans and trusts.
1.22 Principal Trading Market. "Principal Trading Market"
means the principal trading exchange or national automated stock quotation
system on which the Common Stock is traded or quoted.
1.23 Private Sale. See Section 3.8(a).
1.24 Purchaser. "Purchaser" means EMI and Purchaser
Affiliates, jointly and severally.
1.25 Purchaser Affiliate. "Purchaser Affiliate" means any
Affiliate of EMI.
1.26 Registrable Securities. See Section 7.1.
1.27 Registration Expenses. See Section 7.6(a).
1.28 Restriction Termination Date. See Section 7.1.
1.29 Selling Expenses. See Section 7.6(a).
1.30 Twenty Day Average. "Twenty Day Average" means the
average closing sale price of Common Stock on the Principal Trading Market for
the twenty (20) trading days preceding the earlier of the closing of, or public
announcement date concerning, the issuance of Voting Securities by Company.
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1.31 Unaffiliated Director. "Unaffiliated Director" means a
director on the Board who is not an Affiliated Director.
1.32 Voting Securities. "Voting Securities" means Common Stock
and any other Company securities entitled to vote for the election of directors,
or any security (including any preferred stock of Company) convertible into or
exchangeable for or exercisable for the purchase of Common Stock or other
Company securities entitled to vote for the election of directors.
1.33 13D Group. "13D Group" means any group of Persons formed
for the purpose of acquiring, holding, voting or disposing of Voting Securities
required under Section 13(d) of the Exchange Act and the rules and regulations
thereunder (as now in effect) to file a statement on Schedule 13D with the
Commission as a "person" within the meaning of Section 13(d)(3) of the Exchange
Act disclosing beneficial ownership of Voting Securities representing more than
5% of any class of Voting Securities.
ARTICLE 2. RESTRICTIONS ON ACQUISITION OF ADDITIONAL SHARES BY PURCHASER
2.1 No Purchases Before Effective Date. Except as provided in
Section 2.7, Purchaser shall not, between the date of execution of this
Agreement and the Effective Date, acquire in any way or hold record or
beneficial ownership of any Voting Securities.
2.2 No Purchases Beyond Percentage Limitation. Except as
otherwise permitted herein, Purchaser shall not, directly or indirectly, acquire
any Voting Securities beyond its "Percentage Limitation." The "Percentage
Limitation" shall be 20.1% of the Common Stock Equivalents.
2.3 Permitted Purchase Due to Increases in Common Stock
Equivalents. If the Common Stock Equivalents increase at any time and, as a
consequence thereof Purchaser's aggregate ownership of Common Stock Equivalents
falls below the Percentage Limitation, Purchaser may acquire additional shares
of Common Stock up to the Percentage Limitation, as follows:
(a) Purchaser may at any time do so by open-market
purchases, partial tender offer, or private transaction; and/or
(b) Purchaser may, in accordance with Section 2.4,
purchase unissued or treasury shares of Common Stock from Company.
2.4 Procedures Concerning Purchaser's Acquisition of Shares
From Company in Response to Increases in Common Stock Equivalents.
(a) Within thirty (30) days after any increase in
Common Stock Equivalents (other than an increase previously notified to EMI
under Section 2.6), Company shall give EMI written notice setting forth the
number of Common Stock Equivalents prior to the increase, the number of Common
Stock Equivalents after the increase, Purchaser's Percentage Limitation, the
number of shares of Common Stock Purchaser may purchase as a consequence of said
increase, and the per share purchase price for such shares.
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(b) The purchase price per share of Common Stock
purchased under Section 2.3(b) shall be established as follows:
(i) if the Common Stock Equivalents
increased as a result of issuance by Company of one or more Voting Securities
(other than issuance of options under Company's stock option plans), the price
per share shall be the lesser of the Twenty Day Average or the aggregate fair
market value of all consideration received by Company for such Voting Securities
as determined in good faith by the Board (including attribution of the
consideration received with respect to each Voting Security other than Common
Stock) within thirty (30) days after the issuance, divided by the number of
Common Stock Equivalents issued by Company; or
(ii) if the Common Stock Equivalents
increased as a result of Company's issuance of stock options under Company's
stock option plans, the purchase price shall be the exercise price of such stock
options.
(c) Purchaser shall have the right to purchase from
Company a number of shares of Common Stock equal to its Percentage Limitation
multiplied by the increase in the Common Stock Equivalents. Purchaser shall have
sixty (60) days from receipt of Company's notice pursuant to Section 2.4.(a)
above to notify Company in writing whether it elects to purchase any of such
shares of Common Stock and, if it so elects, the number of shares it elects to
purchase. At the time Purchaser delivers its notice to Company, there shall be a
binding agreement between Purchaser and Company for the purchase and sale of the
number of shares of Common Stock elected by Purchaser. Purchaser shall pay the
purchase price to Company in immediately available funds, and Company shall
deliver certificates representing the shares to Purchaser, on a date specified
by Purchaser in its notice, which date shall not be more than ten (10) days
after Purchaser delivers its notice to Company.
2.5 Limitation on Purchaser's Right to Purchase Common Stock
Pursuant to Section 2.3 in the Event of a Business Acquisition by Company.
(a) Notwithstanding Section 2.3, Purchaser shall have
no right to purchase additional shares of Common Stock if (i) the Common Stock
Equivalents increased due to issuance by Company of Voting Securities in
connection with Company's acquisition of a business entity from a third party,
(ii) during the one year period following closing of such an acquisition,
Company repurchases a number of shares of Voting Securities equal to or greater
than the number of shares of Common Stock Equivalents issued to the third party,
and (iii) Company's plan to repurchase shares was approved by a majority of the
Board and notice thereof was given to Purchaser prior to the closing of the
acquisition. If Company does not within the one year period repurchase a number
of shares of Voting Securities equal to the number of Common Stock Equivalents
issued to the third party, Purchaser shall have all rights under Section 2.3 to
purchase shares of Common Stock up to its Percentage Limitation. For purposes of
Section 2.4, Company shall give notice to Purchaser in accordance with Section
2.4(a) within thirty (30) days after the end of the one year period, and the
purchase price to be paid by Purchaser to purchase shares from Company shall be
established in accordance with Section 2.4(b)(i) as of the date of the closing
of the business acquisition. Except as modified by the preceding sentence, the
provisions of Section 2.4 shall govern any such purchase.
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(b) The limitation contained in Section 2.5(a) shall
only apply to increases of fifteen percent (15%) or less in the Common Stock
Equivalents. If in connection with an acquisition Company issues Voting
Securities which cause the Common Stock Equivalents to increase more than
fifteen percent (15%), Purchaser shall have all rights under Section 2.3 to
purchase Common Stock in connection with such increase over fifteen percent
(15%).
2.6 Permitted Purchase If Company Proposes to Issue Voting
Securities for Cash. If Company proposes to issue Voting Securities solely for
cash pursuant to a registered offering or a private placement, and as a
consequence thereof Purchaser's aggregate ownership of Common Stock Equivalents
would fall below its Percentage Limitation, Company shall give EMI written
notice of such fact (the "Notice of Issue") at least thirty (30) days prior to
the anticipated date of such issuance stating the anticipated number of Common
Stock Equivalents to be issued and the anticipated price per Common Stock
Equivalent. Purchaser shall have the right to purchase from Company the number
of shares of Common Stock required for Purchaser to own in the aggregate the
Percentage Limitation of the Common Stock Equivalents following the issuance of
the shares actually issued in such registered offering or private placement.
Purchaser shall have fifteen (15) days from receipt of the Notice of Issue to
notify Company in writing whether it elects to purchase any of such shares of
Common Stock and, if it so elects, the number of shares it elects to purchase.
At the time Purchaser delivers its election to Company, there shall be a binding
agreement between Purchaser and Company for the purchase and sale of the number
of shares of Common Stock elected by Purchaser, subject to the consummation of
such sale described in the Notice of Issue. The purchase price per share shall
be the price per Common Stock Equivalent at which the Voting Securities are
actually issued by Company; provided, however, that without Purchaser's consent
the purchase price shall not be more than one hundred twenty percent (120%) of
the anticipated price per Common Stock Equivalent set forth in the Notice of
Issue. Purchaser shall pay the purchase price to Company in immediately
available funds, and Company shall deliver certificates representing the shares
of Common Stock to Purchaser, on the date of Company's issuance of the Voting
Securities.
2.7 Permitted Purchase in Response To Third Party Tender Offer
or Exchange Offer.
(a) If a tender or exchange offer is made by any
Person or 13D Group (other than Purchaser or any Person acting in concert with
Purchaser) to acquire Voting Securities, Purchaser may make a tender offer for
up to an equivalent number of shares of such Voting Securities as are sought to
be purchased by the party making the other tender offer. If Purchaser initiates
a tender offer under this Section 2.7, the tender offer may be on such terms as
Purchaser shall elect and Company agrees that it shall not in any way (whether
by active opposition, Board announcement or otherwise) contest said tender
offer.
(b) If, following such a tender offer by Purchaser,
it owns in the aggregate more than the Percentage Limitation of the Common Stock
Equivalents, Company shall have the right, exercisable at any time during the
six month period following completion of Purchaser's tender offer, to demand the
purchase from Purchaser a number of shares of such Voting Securities as will
cause Purchaser to own in the aggregate the Percentage Limitation of
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the Common Stock Equivalents following such purchase; provided, however, that
Purchaser shall not be obligated to sell any Common Stock Equivalents to Company
pursuant to this Section 2.7 until such time as such sale would not subject
Purchaser to liability under Section 16(b) of the Exchange Act or any other
applicable provision of federal or state law; and, provided further, that
Purchaser shall not be entitled to vote such Common Stock Equivalents between
the time of Company's demand to purchase pursuant to this Section 2.7(b) and
Purchaser's sale of such Common Stock Equivalents. Company shall, within said
six month period, notify EMI in writing whether it elects to purchase any of
such shares and, if it so elects, the number of shares it elects to purchase. At
the time Company delivers its notice to EMI, there shall be a binding agreement
between Purchaser and Company for the purchase and sale of the number of shares
of such Voting Securities elected by Company.
(c) The purchase price per share shall be the price
per share paid by Purchaser in such tender offer to the tendering shareholders.
In addition, Company shall reimburse Purchaser for Purchaser's pro-rata share of
the costs and expenses incurred in conducting said tender offer. The pro-rata
share of costs and expenses shall be the aggregate of all costs and expenses
(including Purchaser's cost of borrowing, not to exceed the lesser of the prime
interest rate plus 1% and Company's then-current cost of borrowing) actually
incurred by Purchaser, divided by the number of shares of Voting Securities
acquired by it in the tender offer. Company shall pay the purchase price and the
costs and expenses described in this paragraph to Purchaser in immediately
available funds, and Purchaser shall deliver certificates representing the
shares to Company, on a date specified by Company in its notice, which date
shall not be more than twenty (20) days after Company delivers its notice to
EMI.
(d) If Company's purchase is subject to or is
voluntarily submitted for shareholder approval, Purchaser shall vote all its
Voting Securities in favor of the purchase.
(e) If Company does not elect to purchase shares from
Purchaser, or elects to purchase only a portion of the shares under Section
2.7(b), Purchaser shall be entitled to retain the shares over the Percentage
Limitation but the Percentage Limitation shall remain 20.1%.
2.8 Permitted Purchase With Board Approval. Notwithstanding
any other provision of this Agreement, Purchaser may purchase additional shares
of Voting Securities at any time, if two thirds (2/3) of the Unaffiliated
Directors approve such purchase in advance.
2.9 Permitted Purchase by 100% Tender Offer After Four Years.
Notwithstanding any other provision of this Agreement, commencing on the fourth
anniversary of the Effective Date, Purchaser shall have the right to acquire
additional shares of Common Stock by means of a tender offer in accordance with
Section 2.10 below.
2.10 Requirements for Tender Offers.
(a) Whenever Purchaser shall make a tender offer for
shares of Common Stock under Section 2.9, Purchaser may not close the
acquisition of the tendered shares unless all of the following requirements have
been satisfied:
(i) Purchaser's offer shall have been made
to all holders of Common Stock;
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(ii) Purchaser shall offer to purchase for
cash all shares tendered; and
(iii) Purchaser's offer shall have been
accepted by shareholders owning not less than two-thirds (2/3) of the
outstanding Common Stock.
(b) With respect to calculating whether Purchaser's
offer has been accepted by shareholders owning two-thirds (2/3) of the
outstanding Common Stock, Common Shares beneficially owned by Purchaser shall be
excluded from the outstanding Common Stock.
2.11 Mandatory Disposal of Excess Shares. If in violation of
any provision of this Article 2 Purchaser shall at any time hold in the
aggregate in excess of its then Permitted Percentage, Purchaser shall be
required to dispose of such excess shares by promptly selling, subject to
Company's right of first refusal under Section 3.7, sufficient Voting Securities
so that after such sale Purchaser shall own in the aggregate not more than its
then Permitted Percentage, provided, however, that Purchaser shall not be
obligated to sell any Voting Securities to Company pursuant to this Section 2.11
until such time as such sale would not subject Purchaser to liability under
Section 16(b) of the Exchange Act or any other applicable provision of federal
or state law; and, provided further, that Purchaser shall not be entitled to
vote such Voting Securities between the time of Company's demand that Purchaser
dispose of such Voting Securities pursuant to this Section 2.11 and Purchaser's
disposal of such Voting Securities. If Purchaser fails to dispose of shares of
Voting Securities within one hundred eighty (180) days after receipt of notice
from Company advising EMI of its obligation so to dispose of shares (it being
understood that giving of notice by Company is not a precondition to Purchaser's
obligation to dispose of excess shares), Company shall have the right to redeem
at par value from Purchaser a number of shares of Common Stock so that after
such redemption the shares of Voting Securities owned by Purchaser do not exceed
Purchaser's then Permitted Percentage. Any Voting Securities held by Purchaser
in contravention of this Section 2.11 may not be voted in any manner on which
shareholders of Company are entitled to vote and Company shall not be required
to count any such votes, if cast, in determining the result of shareholder
voting on any matter.
2.12 Monthly Report of Ownership. During the term of this
Agreement, Purchaser will furnish to Company, within ten (10) days after the end
of each calendar month in which Purchaser acquires or disposes of any Voting
Securities, a statement showing the number of shares of Voting Securities
acquired or disposed of during the just ended month and the aggregate number of
shares of Voting Securities held by Purchaser at the end of such month. To the
extent that any such acquisition or disposition must be reported to the
Commission, Purchaser may fulfill the statement requirement in this Section 2.12
by providing to Company a copy of such report to the Commission.
2.13 General Rule Regarding Acquisition of Voting Securities.
Purchaser agrees that any and all acquisitions of Voting Securities shall be
made in compliance with all applicable federal and state securities laws. EMI
agrees to indemnify, defend and hold harmless Company, its officers, directors
and employees from and against any and all losses, claims, liabilities,
assertions and expenses incurred or suffered by any of them, including
attorneys' fees and costs
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of litigation, as a consequence of a claim by any party other than Company or
any of its Affiliates that Purchaser breached its obligations set forth in the
preceding sentence.
2.14 Requirements of Trading Exchange or Stock Quotation
System.
Notwithstanding any other provision of this Agreement, if, by
reason of the listing or other requirements of the principal trading exchange or
national automated stock quotation system on which the Company's Common Stock is
then traded or quoted, the issuance by Company of any additional Voting
Securities to Purchaser pursuant to this Article 2 requires approval of
Company's shareholders, then Company's obligation to issue and sell such
additional Voting Securities to Purchaser shall be subject to receipt of such
shareholder approval, which Company shall use its best efforts to obtain as soon
as possible after the date on which Purchaser shall otherwise become entitled to
purchase such additional Voting Securities from Company pursuant to this Article
2.
ARTICLE 3. SALES OF SHARES BY PURCHASER AND RELATED RIGHTS AND
OBLIGATIONS OF PURCHASER AND COMPANY
3.1 General Restrictions on Resale or Other Disposition.
During the term of this Agreement, Purchaser shall not sell, transfer any
beneficial interest in, pledge, hypothecate or otherwise dispose of any Voting
Securities except in compliance with Article 3.
3.2 Allowed Sales Pursuant to Registration Rights. Subject to
Company's right of first refusal under Section 3.7, Purchaser may at any time
sell Common Stock by means of an offering made pursuant to the registration
rights set forth in Article 7 below.
3.3 Allowed Sales Pursuant to Rule 144. Subject to Company's
right of first refusal under Section 3.7, Purchaser may at any time sell Common
Stock pursuant to Rule 144 of the General Rules and Regulations under the Act,
provided that Purchaser shall notify Company at least two Business Days prior to
the date of entering any sale or transfer order of Common Stock pursuant to Rule
144, and provided further that, if Company shall thereupon notify EMI of the
pendency of its public offering of any Voting Securities, Purchaser shall not
effect any sales under Rule 144 within 10 days prior to the commencement of or
during such offering.
3.4 Allowed Private Sales to Third Parties or Pursuant to
Tender Offer. Subject to Company's right of first refusal under Section 3.7,
Purchaser may at any time make private sales of Voting Securities to a third
person, including sales pursuant to a tender offer or exchange offer.
3.5 Allowed Transfers by EMI and Purchaser Affiliates. EMI and
Purchaser Affiliates may at any time transfer Voting Securities among
themselves, provided that such transfer would have no clear, adverse impact of a
financial character on Company, and would not adversely affect the liabilities
and/or responsibilities of EMI to Company, provided that the transferee shall
agree in advance in writing to be bound by the terms of this Agreement.
3.6 Allowed Transfers Upon Approved Business Disposition.
Purchaser may dispose of Voting Securities in conjunction with a merger or
consolidation in which Company is
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acquired, or in conjunction with a sale of all or substantially all of Company's
assets, provided a majority of the Board approved such merger, consolidation, or
sale.
3.7 Right of First Refusal. If during the term of this
Agreement, Purchaser desires to sell all or part of its Voting Securities
pursuant to Section 2.11, 3.2, 3.3 or 3.4, Company shall have a right of first
refusal to purchase said Voting Securities in accordance with the procedures set
forth in Section 3.8 below.
3.8 Procedures for Right of First Refusal.
(a) If Purchaser desires to sell a third party all or
part of its Voting Securities pursuant to Section 3.4 above ("Private Sale"), or
if Purchaser desires to sell all or part of its Common Stock in the open market
pursuant to Section 3.2 or 3.3 above ("Market Disposition Program"), Purchaser
shall transmit to Company a written notice ("Notice of Proposed Sale") setting
forth:
(i) if a Private Sale, (A) as to each Person
to whom such sale is proposed to be made: (1) the name, address and principal
business activity of such Person; (2) the number of shares of Voting Securities
proposed to be sold to such Person; (3) the manner in which the sale is proposed
to be made; and (4) the price at which or other consideration for which, and the
material terms upon which, such sale is proposed to be made, and (B)
representing that the Private Sale is bona fide; and
(ii) if sales pursuant to a Market
Disposition Program: (A) the approximate date the sales are scheduled to
commence; and (B) the amount of Common Stock sought to be disposed of.
(b) Upon receipt of the Notice of Proposed Sale
Company shall have an option to purchase, in the case of a Private Sale, all but
not less than all of the Voting Securities proposed to be sold, and in the case
of a Market Disposition Program, all, if the Market Disposition Program is a
firm commitment public offering, or, if it is not such an offering, any part, of
the Common Stock proposed to be disposed of, on the following terms and
conditions;
(i) If the option arises in connection with
a Private Sale, the purchase price shall be the price specified in the Notice of
Proposed Sale.
(ii) If the option arises in connection with
a Market Disposition Program, the purchase price per share of Common Stock shall
be the Twenty Day Average determined as if the day Purchaser delivers the Notice
of Proposed Sale to Company is the closing date of an issuance of securities by
Company in the absence of any public announcement.
(iii) If a majority of the Unaffiliated
Directors determine to exercise the option, they shall direct Company to send a
written notice (the "Notice of Exercise") to EMI within thirty (30) days after
the Notice of Proposed Sale is received by Company specifying the number of
shares Company is purchasing; provided, however, that in the case of a tender
offer or exchange offer, EMI must receive the Notice of Exercise not less than
forty-eight (48) hours prior to the earlier of (A) the expiration of the tender
offer or exchange offer or (B)
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any date after which shares tendered may be treated less favorably than shares
tendered prior thereto. If approval of such purchase by Company's shareholders
is required by law or Company's Restated Articles of Incorporation, and if the
Private Sale is in response to a tender offer, Company shall waive its right of
first refusal granted under Section 3.7; otherwise, Company's Notice of Exercise
shall be subject to receipt of such shareholder approval, which Company shall
use its best efforts to obtain as soon as possible, and in any event within one
hundred twenty (120) days after, the date of the Notice of Exercise. Company's
failure to obtain shareholder approval within the one hundred twenty (120) day
period shall give Purchaser the right to proceed with the proposed sale under
Section 3.8(c). If such repurchase is subject to shareholder approval, Purchaser
shall vote all its Voting Securities in favor of the purchase.
(iv) Upon EMI's receipt of the Notice of
Exercise, there shall be a binding agreement between Purchaser and Company for
the purchase and sale of the number of shares contained in the Notice of
Exercise. The closing of the purchase and sale shall occur on the thirtieth
Business Day following EMI's receipt of the Notice of Exercise. At the closing
Purchaser will deliver to Company certificates for the Voting Securities to be
sold, duly endorsed for transfer or accompanied by a duly executed stock power,
and Company will deliver to Purchaser the purchase price as follows: if
Company's purchase is following Purchaser's proposed Private Sale, Company shall
pay Purchaser the price specified in the Notice of Proposed Sale in the same
manner (and the sale shall be upon the same terms) specified therein, and if
Company's purchase is following Purchaser's proposed Market Disposition Program,
Company shall pay Purchaser at the closing for the shares purchased in
immediately available funds; provided, however, that if Company receives a
Notice of Proposed Sale on or before the third anniversary of the Effective
Date, Company shall have the option to pay Purchaser by delivery at the closing
of ten (10%) percent of the purchase price in immediately available funds, and
the balance by delivery of a promissory note providing terms specified in the
next succeeding sentence; provided, further, that notwithstanding the preceding
proviso, if the Notice of Proposed Sale received by Company on or before the
third anniversary describes a proposed Private Sale in response to a tender
offer, Company shall pay the purchase price in the same manner (and the sale
shall be upon the same terms) specified in the Notice of Proposed Sale. The
promissory note shall provide for: fixed interest at a rate equal to the
Company's then-current cost of borrowing; equal annual installments including
interest payable on each anniversary of the closing in immediately available
funds, with each installment in an amount sufficient to amortize the promissory
note in ten annual payments; and for the entire unpaid balance including accrued
and unpaid interest to be payable on the fifth anniversary of the closing.
(v) Company may assign its right to purchase
the Voting Securities and may designate in the Notice of Exercise one or more
Persons to take title to all or any part of the Voting Securities, but this
shall not relieve Company of its obligation to pay the purchase price.
(c) If following receipt of a Notice of Proposed Sale
Company fails to give EMI a Notice of Exercise within the prescribed time
period, Purchaser shall be free to effect such sale on the following terms and
conditions:
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(i) if a Private Sale was proposed,
Purchaser may effect such sale at any time during the period ending one hundred
twenty (120) days after the date Company's Notice of Exercise was required to be
given, to the Person or Persons specified in the Notice of Proposed Sale for the
consideration and on the terms specified in said notice; and
(ii) if a Market Disposition Program was
proposed, Purchaser may effect such sales at any time during the period ending
one hundred eighty (180) days after the date Company's Notice of Exercise
required to be given.
(d) If Purchaser does not make the sales within the
time periods provided above, the Voting Securities so proposed to be sold will
once again become subject to this Agreement to the same extent as if such sales
had not been proposed.
3.9 Purchaser's Covenants With Respect to Distribution of
Shares. In any transaction or transactions under Section 3.2 or 3.3, Purchaser
shall use its reasonable best efforts, and shall cause any underwriter involved
to use its reasonable best efforts, to sell the Common Stock in the United
States and in a manner which will effect the broadest distribution reasonably
possible, with no sales to any one person or group (as defined in the Exchange
Act) in excess of 10% of the Common Stock sold in such sale.
3.10 Company's Undertaking to Cooperate in Rule 144
Transactions. In the event of any proposed sales of Common Stock by Purchaser
under Section 3.3, Company shall cooperate with Purchaser to enable such sales
to be made in accordance with applicable laws, rules and regulations, the
requirements of Company's transfer agent, and the reasonable requirements of the
broker through which the sales are proposed to be executed, and shall, upon
request, furnish unlegended certificates representing Common Stock in such
numbers and denominations as Purchaser shall reasonably require for delivery in
connection with such sales.
ARTICLE 4. LEGENDS AND STOP TRANSFER ORDERS
4.1 Placement of Legends and Entry of Stop Transfer Orders.
Purchaser agrees:
(a) that, within ten (10) Business Days after its
acquisition of any certificates evidencing Voting Securities (or, in the case of
Voting Securities currently owned by Purchaser, within ten (10) Business Days
after the date hereof) to submit such certificates to Company for placing on the
face thereof the following legends:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAW AND ARE SUBJECT TO THE
RESTRICTIONS ON DISPOSITION SET FORTH IN AND TO THE OTHER
PROVISIONS OF A COMMON SHARE AND WARRANTY PURCHASE AGREEMENT,
DATED FEBRUARY 27, 1995, BETWEEN VWR CORPORATION AND EM
INDUSTRIES, INCORPORATED, AND A STANDSTILL AGREEMENT, DATED
FEBRUARY 27, 1995, BETWEEN VWR CORPORATION AND EM INDUSTRIES,
INCORPORATED. COPIES
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OF SUCH AGREEMENTS ARE ON FILE AT THE RESPECTIVE OFFICES OF
VWR CORPORATION AND EM INDUSTRIES INCORPORATED.";
and such additional legends designed to ensure compliance with Federal and
State laws as counsel for Company may reasonably request; and
(b) to the entry of stop transfer orders with the
transfer agents of any such Voting Securities, against the transfer of such
legended certificates except in compliance with this Agreement.
4.2 Removal of Legends and Stop Transfer Orders. Company
agrees that it will, upon receipt of an opinion from its counsel that it is
appropriate so to do and upon the presentation to its transfer agent of the
certificates containing the legends provided for in Section 4.1(a), remove such
legends and withdraw the stop transfer orders provided for in Section 4.1(b)
with respect to such certificates, upon the earlier of the following:
(a) any sale of the shares represented by such
certificates made under Section 3.2, 3.3, or 3.4; or
(b) termination of this Agreement.
ARTICLE 5. CERTAIN AGREEMENTS OF PURCHASER AND COMPANY
5.1 Future Actions. Purchaser shall not, unless the prior
written consent of the Board (in which a majority of the Unaffiliated Directors
shall concur) has been obtained, and then only to the extent express written
consent has been obtained:
(a) at any time before the expiration of four (4)
years after the Effective Date, solicit proxies or become a "participant" in a
"solicitation" (as such terms are defined in Regulation 14A under the Exchange
Act) in opposition to the recommendation of the majority of the directors on the
Board with respect to any matter; or
(b) deposit any Voting Securities in a voting trust
or subject them to a voting agreement or other arrangement of similar effect;
provided, however, that nothing in this Section 5.1 shall preclude Purchaser
from so depositing any Voting Securities if such trust, agreement or arrangement
is, and continues to be during the term of this Agreement, solely by and among
EMI and Purchaser Affiliates; or
(c) join a partnership, limited partnership,
syndicate or other group for the purpose of acquiring, holding or disposing of
Voting Securities within the meaning of Section 13(d) of the Exchange Act; or
(d) induce or attempt to induce any other Person to
initiate a tender offer for any securities of Company, or to effect any change
of control of Company, or take any action for the purpose of convening a
stockholders' meeting of Company; or
(e) acquire, by purchase or otherwise, more than 1%
of any class of equity securities of any entity which, prior to the time
Purchaser acquires more than 1% of such class, is publicly disclosed (by filing
with the Commission or otherwise) to be the beneficial
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owner of more than 5% of any class of the Voting Securities; if Purchaser owns
in the aggregate in excess of 1% of any such entity, it shall promptly divest
such excess; provided, however, that Purchaser shall not be obligated to divest
itself of such excess pursuant to this Section 5.1(e) until such time as such
divestment would not subject Purchaser to liability under Section 16(b) of the
Exchange Act or any other applicable provision of federal or state law; and,
provided further, that Purchaser shall not be entitled to vote such Voting
Securities until Purchaser shall divest itself of such excess; and, provided
further, that upon being notified by Company in writing that an entity owns in
excess of 5% of any class of the Voting Securities, Purchaser shall affirm in
writing to Company that Purchaser does not own, in the aggregate, more than 1%
of any class of equity securities of such Person.
5.2 Acquisitions and Transfers in Contravention of Agreement.
Notwithstanding Company's rights to seek injunctions or other relief, any Voting
Securities acquired or transferred by Purchaser in contravention of this
Agreement may not be voted on any matter on which shareholders of Company are
entitled to vote, any attempt to vote such Voting Securities shall be a breach
of this Agreement and Company shall not be required to count any such votes, if
cast, in determining the result of shareholder voting on any matter.
5.3 Company's Issuance of Securities. During the term of this
Agreement, Company shall not issue any security (including without limitation
any Voting Security) which provides the holder(s) thereof with any extraordinary
or special voting rights or any right to veto any action of Company, unless such
issuance is approved in advance by an Affiliated Director. Further, Company
shall not consider or approve any such issuance prior to the Effective Date.
ARTICLE 6. BOARD OF DIRECTORS
6.1 Size of Board. On or before the Effective Date, Company
shall take all requisite action to increase the size of the Board by two to
eleven and to appoint, effective as of the Effective Date, individuals
designated by EMI to fill the two new seats.
6.2 Terms. EMI shall advise company on or before the Effective
Date which of the Affiliated Directors shall have a term expiring at the second
annual meeting of shareholders of Company next following the Effective Date, and
which shall have a term expiring at the third such annual meeting. After the
term of any Affiliated Director expires, his or her successor shall serve a term
of three (3) years as provided in the Restated Articles of Incorporation of
Company.
6.3 Vacancies. In the event of the death, resignation,
retirement, disqualification or removal from office of any Affiliated Director
for any reason, EMI shall have the right to designate a replacement for such
Affiliated Director, or fill such vacancy, to the extent EMI would be entitled
to designate a nominee for election to the Board of Directors pursuant to
Section 6.4 hereof if directors were to be elected at an annual meeting
occurring at such date.
6.4 Proportional Representation.
(a) Company shall annually cause representatives
designated by EMI to be nominated for election to the Board so as to provide
Purchaser with that percentage
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representation on the Board, rounded down to the nearest whole number, as shall
equal the Permitted Percentage applicable at the time of each annual nomination.
With respect to committees of the Board, Purchaser shall be entitled to be
represented on any committee with respect to which EMI requests representation.
(b) Purchaser shall vote its shares of Common Stock
so as to elect to the Board its proportionate number of Affiliated Directors and
the persons who have been designated by the Unaffiliated Directors, and in all
other matters so as to provide other Company shareholders with corresponding
proportionate representation. If, pursuant to the Restated Articles of
Incorporation of Company, cumulative voting for the election of Company
directors is required, Purchaser may initially vote its shares to ensure that
its then proportionate number of Affiliated Directors are elected. Purchaser
agrees that, once its proportionate number of Affiliated Directors are elected,
Purchaser shall vote its shares of Common Stock so as to elect persons to the
Board who have been designated by the Unaffiliated Directors.
(c) Subject to the provisions of Section 6.3, Company
may effect changes in Board representation by increase in the size of the Board
or by resignations or retirements of Board members. Notwithstanding the
foregoing, Purchaser's right to proportional Board representation shall not
cause the number of Affiliated Directors to (i) decrease during the one year
period during which Company has the right to purchase Voting Securities under
Section 2.5(a), or (ii) increase during the six month period during which
Company has the right to purchase Voting Securities under Section 2.7(b).
ARTICLE 7. REGISTRATION RIGHTS
7.1 Duration of Registration Rights. Purchaser's rights to
have Company register shares of Registrable Securities (as defined below)
provided in this Article 7 shall terminate upon the Restriction Termination Date
(as defined below). Rights of a Holder other than Purchaser to have Company
register shares of Registrable Securities provided in this Article 7 shall
terminate upon the Restriction Termination Date. As used in this Article 7,
"Registrable Securities" shall mean all Common Stock so long as certificates
representing the same are required to bear the restrictive legend set forth in
Section 4.1 hereof, to the extent that such legend refers to registration under
the Act. As used in this Article 7, "Restriction Termination Date" shall mean,
with respect to any Registrable Securities, the earliest of (i) the date that
such Registrable Securities shall have been Registered and sold or otherwise
disposed of in accordance with the intended method of distribution by the seller
or sellers thereof set forth in the Registration Statement covering such
Registrable Securities or transferred in compliance with Rule 144 under the
Securities Act and (ii) the date that an opinion of counsel to Company, which
opinion of counsel shall be reasonably acceptable to Purchaser, containing
reasonable assumptions shall have been rendered and, based upon such opinion,
the legend referred to in Section 4.1 hereof, to the extent that such legend
refers to registration under the Act, shall have been removed.
7.2 Demand Registration Covenant.
(a) If a Holder requests in writing that Company
register under the Act any Registrable Securities then owned by Holder, Company
will use its best efforts to cause the
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offering and sale to be registered as soon as reasonably practicable. In
connection therewith Company shall prepare and file a registration statement
under the Act on such form as Company shall determine to be appropriate;
provided, however, that Company shall not be obligated to file more than one
registration statement pursuant to this Section 7.2 during any 12-month period.
The request shall specify the amount of Registrable Securities intended to be
offered and sold, shall express Holder's present intent to offer such
Registrable Securities for distribution, shall describe the nature or method of
the proposed offer and sale, and shall contain the undertaking of Holder to
comply with all applicable requirements of this Article 7.
(b) Upon receipt of a request for registration under
Section 7.2, Company will promptly give notice to all Holders other than those
initiating the request and provide a reasonable opportunity for such Holders to
participate in such registration. Any such other Holder must notify Company in
writing of its desire to participate, within thirty (30) days of receipt of
Company's notice.
(c) Any request for registration under Section 7.2
must be for a firm commitment public offering to be managed by one or more
Investment Banking Firms selected by the Holders requesting registration,
provided that such Investment Banking Firms are reasonably satisfactory to
Company. If, in the written opinion of the Investment Banking Firms marketing
factors require a limitation of the number of shares to be underwritten, and if
the total amount of securities that all Holders (initiating and non-initiating)
request pursuant to Section 7.2 to be included in such offering exceeds the
amount of securities that the Investment Banking Firms reasonably believe
compatible with the success of the offering, Company shall only be required to
include in the offering the amount of Registrable Securities that the Investment
Banking Firms believe will not jeopardize the success of the offering, and such
amount shall be allocated among such Holders in proportion to the respective
amounts of Registrable Securities proposed to be sold by each of the Holders.
Any shares of Registrable Securities that are so excluded from the underwriting
shall be excluded from the registration.
(d) Subject to the provisions of Section 7.2(a) and
7.2(b), if within forty-five (45) days after receipt of a request under Section
7.2(a) and any requests under Section 7.2(b), Company shall have obtained (i)
from Commission a "no-action" letter, in form and substance reasonably
satisfactory to the counsel of the Holders requesting registration, in which the
Commission has indicated that it will take no action if, without registration
under the Act, Holders dispose of the Registrable Securities covered by the
request(s) in the manner proposed or (ii) any opinion of its counsel (concurred
in by counsel for the requesting Holder(s)) that no registration under the Act
is required, Company need not comply with such request or request(s); provided,
however, that receipt of such "no-action" letter or opinion shall not constitute
a registration for the purpose of determining Company's obligations to Holders
under Section 7.2; and provided, further, that in such event counsel for Company
shall opine that, whether by reason of the "no-action" letter or otherwise, the
removal of any legend from certificates representing all shares to which such
"no-action" letter or opinion refers is permissible, and, if so, 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.
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7.3 Participation Registration Covenant. If Company shall
propose registration under the Act of an offering of Common Stock, Company shall
give prompt written notice of such fact to each Holder and will use all
reasonable efforts to cause the registration of such number of shares of Common
Stock then owned by Holders as Holders shall request, within fifteen (15) days
after receipt of such notice, to be included, upon the same terms (including the
method of distribution) of any such offering; provided, however, that (a)
Company shall not be required to give notice or include such Common Stock in any
such registration if the proposed registration (i) is not a primary registration
of securities by Company for its own account, or (ii) is primarily (A) a
registration of a stock option or compensation plan or of securities issued or
issuable pursuant to any such plan, or (B) a registration of securities proposed
to be issued in exchange for securities or assets of, or in connection with a
merger or consolidation with, another corporation; (b) the offering of Common
Stock by Holders shall comply with Section 3.9 above; and (c) Company may, in
its sole discretion and without the consent of the Holders, withdraw such
registration statement and abandon the proposed offering.
7.4 Company's Obligations in Connection with Registrations. In
connection with any registration of Registrable Securities undertaken by Company
under Article 7, Company shall:
(a) furnish to Holders or their underwriter such
copies of any prospectus (including any preliminary prospectus) Holders may
reasonably request to effect the offering and sale, but only while Company is
required under the provisions hereof to cause the registration statement to
remain current and effective;
(b) use its best efforts to qualify the offering
under applicable Blue Sky or other state securities laws to enable Holders to
offer and sell the Registrable Securities; provided, however, that Company shall
not be obligated to qualify as a foreign corporation to do business under the
laws of any jurisdiction in which it is not then qualified;
(c) furnish Holders, at the expense of Company, with
unlegended certificates representing ownership of the Registrable Securities
being sold in such numbers and denominations as Holders shall reasonably
request, meeting the requirements of the Principal Trading Market;
(d) use its best efforts to cause the registration
statement to remain current and effective for sixty (60) days following its
effective date or such lesser period as the underwriters may agree; and
(e) instruct the transfer agent(s) and the
registrar(s) of Company's securities to release the stop transfer orders with
respect to the Registrable Securities being sold.
(f) Company will promptly prepare and file with the
Commission such amendments and prospectus supplements, including post-effective
amendments, to the Registration Statement as Company determines may be necessary
or appropriate, and use its best efforts to have such post-effective amendments
declared effective as promptly as practicable; cause the related prospectus to
be supplemented by any prospectus supplement, and as so supplemented, to be
filed with the Commission; and notify the Holders of any securities included in
such Registration Statement and the underwriter thereof, if any, promptly when a
prospectus,
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any prospectus supplement or post-effective amendment must be filed or has been
filed and, with respect to any post-effective amendment, when the same has
become effective, and make the same available to such Holders and any
underwriter.
(g) Company will furnish to each Holder and the
underwriter thereof, if any, a signed counterpart, addressed to each Holder and
underwriter, of (i) an opinion or opinions of counsel to Company and (ii) a
comfort letter or comfort letters from Company's independent public accountants,
each in customary form and covering such matters of the type customarily covered
by opinions or comfort letters, as the case may be, as Holders or the
underwriter may reasonably request.
(h) Company will make generally available to its
securityholders, as soon as reasonably practicable, an earning statement
covering a period of 12 months, beginning three months after the effective date
of the Registration Statement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
(i) Company will use its best efforts to cause all
such Registrable Securities to be listed in the Principal Trading Market, and on
each securities exchange on which similar securities issued by Company are then
listed.
7.5 Conditions to Obligations of Company Under Registration
Covenants. Company's obligations to register the Registrable Securities owned by
Holders under Article 7 are subject to the following conditions.
(a) Company (upon the decision of a majority of the
Unaffiliated Directors) shall be entitled to postpone for up to ninety (90) days
the filing of any registration statement under Section 7.2, if at the time it
receives the request for registration such Unaffiliated Directors determine, in
their reasonable judgment, that such registration and offering would materially
interfere with any financing, acquisition, corporate reorganization or other
material transaction involving Company or any of its Affiliates. Company shall
promptly give Holders written notice of such determination.
(b) Company may require that the number of shares of
Registrable Securities offered for sale by Holders pursuant to a request for
registration under Section 7.3 be decreased or excluded entirely if, in the
opinion of Company's Investment Banking Firm, such reduction is desirable to
permit the orderly distribution and sale of the securities being offered. If
Company shall require such a reduction, Holders shall have the right to withdraw
from the offering.
(c) If Holders request registration pursuant to
Section 7.2, Company will enter into an underwriting agreement containing
representations, warranties and agreements not materially different from those
customarily included in underwriting agreements with an issuer for a secondary
distribution; provided, however, that Company will not be obligated to indemnify
the Investment Banking Firms on terms materially different from those set forth
in Section 7.8:
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(d) Company may require, as a condition to fulfilling
its obligations under the registration covenants in Sections 7.2 and 7.3, the
indemnification agreements provided in Section 7.8(b) from Holders and the
underwriters.
(e) It shall be a condition precedent to the
obligations of Company to take action pursuant to this Article 7 that each
Holder whose Registrable Securities are being registered, and each underwriter
designated by such Holder, will furnish to Company such information and
materials as Company may reasonably request and as shall be required in
connection with the action to be taken by Company. To the extent possible
Holders shall provide Company with any information and materials required to
obtain acceleration of the effective date of the registration statement.
(f) If, in the reasonable opinion of counsel to
Company it is necessary or appropriate for Company to comply with any applicable
rule, regulation, or release promulgated by the Commission, each Holder whose
Registrable Securities are being registered and any underwriter participating in
such public offering shall execute and deliver to Company an appropriate
agreement, in form satisfactory to counsel for Company, that such Holder or
underwriter will comply with all prospectus delivery requirements of the Act and
with all anti-stabilization, manipulation, and similar provisions of Section 10
of the Exchange Act and any rules issued thereunder by the Commission, and will
furnish to Company information about sales made in such public offering.
(g) Holders of Common stock included in the
registration statement shall not (until further notice) effect sales thereof
after receipt of written notice (which may include notice by telegraph) from
Company to suspend sales, to permit Company to correct or update a registration
statement or prospectus; provided, however, that the obligations of Company with
respect to maintaining any registration statement current and effective shall be
extended by a period of days equal to the period such suspension is in effect.
(h) At the end of the period during which Company is
obligated to keep any registration statement current and effective (and any
extensions thereof required by the preceding paragraph), and upon receipt of
notice from Company of its intention to remove from registration the securities
covered by such registration statement that remain unsold, Holders of
Registrable Securities included in the registration statement shall discontinue
sales of such Registrable Securities pursuant to such registration statement,
and each such Holder shall notify Company of the number of shares registered
belonging to such Holder that remain unsold promptly following receipt of such
notice from Company.
7.6 Expenses.
(a) In connection with any registration pursuant to
Section 7.2, all Registration Expenses (as defined below) shall be borne fifty
percent (50%) by Company and fifty percent (50%) by Holders of the Registrable
Securities on the basis of the number of shares registered by them, and all
Selling Expenses (as defined below) shall be borne by Holders of the Registrable
Securities on the basis of the number of shares registered by them. As used in
this Section 7.6, "Registration Expenses" shall mean all expenses incurred by
Company in complying with this Article 7, including, without limitation, all
federal and state registration, qualification
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and filing fees, printing expenses, fees and disbursements of counsel for
Company, Blue Sky fees and expenses, and the expense of any special audits
incident to or required by such registration. As used in this Section 7.6,
"Selling Expenses" shall mean all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities pursuant to this Agreement and
all fees and disbursements of counsel for any Holder.
(b) In connection with any registration pursuant to
Section 7.3, Company shall pay all Registration Expenses and Selling Expenses,
except to the extent the aggregate of such expenses exceeds the amount which
Company would have expended in conducting an offering of only the shares sold by
it, and the participating Holders pro rata shall pay such excess based on the
number of shares of Registrable Securities offered by each pursuant to such
registration statement. Such Holders shall pay all Registration Expenses and
Selling Expenses directly attributable to the inclusion in the offering of
Registrable Securities being sold by the Holders, including without limitation
fees and disbursements of their own counsel and accountants.
7.7 Assignability of Registration Rights. The registration
rights afforded Purchaser in this Article 7, shall be assignable to a transferee
of Registrable Securities from Purchaser so long as (i) such transferee has
acquired no fewer than two million (2,000,000) shares of Registrable Securities
(as adjusted from time to time to reflect stock splits, stock dividends and
similar changes in the capitalization of Company) from Purchaser, (ii) such
transferee has agreed with Company in writing to comply with all applicable
provisions of this Article 7, and (iii) Purchaser has otherwise complied with
all provisions of this Agreement which affect its right to sell, transfer or
otherwise dispose of shares of Registrable Securities. For a transfer of
registration rights to be effective, Purchaser shall give Company written notice
at the time of such transfer stating the name and address of the transferee and
identifying the shares with respect to which the rights under this Article 7 are
being assigned.
7.8 Indemnification.
(a) In the case of each registration effected by
Company pursuant to Section 7.2 or 7.3, to the extent permitted by law Company
("indemnifying party") agrees to indemnify and hold harmless each Holder, its
officers and directors, and each underwriter within the meaning of Section 15 of
the Act, against any and all losses, claims, damages, liabilities or actions to
which they or any of them may become subject under the Act or any other statute
or common law, including any amount paid in settlement of any litigation,
commenced or threatened, if such settlement is effected with the written consent
of Company, and to reimburse them for any legal or other expenses incurred by
them in connection with investigating any claims and defending any actions,
insofar as any such losses, claims, damages, liabilities or actions arise out of
or are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the registration statement relating to the sale of
such shares, or any post-effective amendment thereto, or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, if used prior to the effective date of such registration
statement, or contained in the final prospectus (as amended or supplemented if
Company shall have filed with the Commission
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any amendment thereof or supplement thereto) if used within the period during
which Company is required to keep the registration statement to which such
prospectus relates current under Section 7.4(d) (including any extensions of
such period as provided in Section 7.5.(g)), or the omission or alleged omission
to state therein (if so used) a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the indemnification agreement contained in
this Section 7.8(a) shall not (x) apply to such losses, claims, damages,
liabilities or actions arising out of, or based upon, any such untrue statement
or alleged untrue statement, or any such omission or alleged omission, if such
statement or omission was made in reliance upon and in conformity with
information furnished to Company by such Holder or underwriter for use in
connection with preparation of the registration statement, any preliminary
prospectus or final prospectus contained in the registration statement, or any
amendment or supplement thereto, or (y) inure to the benefit of any underwriter
or any Person controlling such underwriter, if such underwriter failed to send
or give a copy of the final prospectus to the Person asserting the claim at or
prior to the written confirmation of the sale of such securities to such Person
and if the untrue statement or omission concerned had been corrected in such
final prospectus.
(b) In the case of each registration effected by
Company pursuant to Section 7.2 or 7.3 above, each Holder and each underwriter
of the shares to be registered (each such party and such underwriters being
referred to severally as an "indemnifying party") shall agree in the same manner
and to the same extent as set forth in Section 7.8(a) to indemnify and hold
harmless Company, each Person (if any) who controls Company within the meaning
of Section 15 of the Act, the directors of Company and those officers of Company
who shall have signed any such registration statement, with respect to any
untrue statement or alleged untrue statement in, or omission or alleged omission
from, such registration statement or any post-effective amendment thereto or any
preliminary prospectus or final prospectus (as amended or supplemented, if
amended or supplemented) contained in such registration statement, if such
statement or omission was made in reliance upon and in conformity with
information furnished to Company by such indemnifying party for use in
connection with the preparation of such registration statement or any
preliminary prospectus or final prospectus contained in such registration
statement or any such amendment or supplement thereto.
(c) Each indemnified party will, promptly after
receipt of written notice of the commencement of an action against such
indemnified party in respect of which indemnity may be sought under this Section
7.8, notify the indemnifying party in writing of the commencement thereof. In
case any such action shall be brought against any indemnified party and it shall
so notify an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein, with the approval of any
indemnified parties, which approval shall not be unreasonably withheld, and to
the extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 7.8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding the foregoing, an indemnified party
shall have the right to
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employ separate counsel (reasonably satisfactory to the indemnifying party) to
participate in the defense thereof, but the fees and expenses of such counsel
shall be the expense of such indemnified party unless the named parties to such
action or proceedings include both the indemnifying party and the indemnified
party and the indemnifying party or such indemnified party shall have been
advised by counsel that there are one or more legal defenses available to it
which are different from or additional to those available to the indemnifying
party (in which case, if the indemnified party notifies the indemnifying party
in writing that it elects to employ separate counsel at the reasonable expense
of the indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action or proceeding on behalf of the indemnified
party, as the case may be, it being understood, however, that the indemnifying
party shall not, in connection with any such action or proceeding or separate or
substantially similar or related action or proceeding in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate counsel at any time for
the indemnifying party and all indemnified parties, which counsel shall be
designated in writing by the Holders of a majority of the Common Shares). If the
indemnifying party withholds consent to a settlement or proposed settlement by
the indemnified party, it shall acknowledge to the indemnified party its
indemnification obligations hereunder. The indemnity agreements in this Section
7.8 shall be in addition to any liabilities which the indemnifying parties may
have pursuant to law.
(d) If the indemnification provided for in this
Section 7.8 from an indemnifying party is unavailable to an indemnified party
hereunder in respect to any losses, claims, damages, liabilities or expenses
referred to herein, then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses in such proportion as is appropriate to reflect the relative fault of
the indemnifying party and indemnified party in connection with the statements
or omissions which result in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or indemnified party
and that party's relative intent, knowledge, access to information supplied by
such indemnifying party or indemnified party and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action,
suit, proceeding or claim.
ARTICLE 8. TERMINATION
8.1 Termination. This Agreement shall terminate upon the
earliest to occur of the following:
(a) Purchaser's completion of a tender offer in
accordance with Section 2.10, provided, that Purchaser's offer has been accepted
by shareholders owning not less than two-thirds (2/3) of the outstanding Common
Stock, as provided in such Section; or
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(b) by mutual written agreement of Company and EMI;
or
(c) if the transactions contemplated under the Common
Share Purchase Agreement shall not have been consummated, on August 1, 1995; or
(d) if elected by EMI, exercisable upon delivery of
written notice thereof to Company, upon the failure of Company to comply with
its obligations under this Agreement and cure of such failure does not occur
within thirty (30) days after EMI has given written notice of such failure to
Company; or
(e) if elected by Company, exercisable upon delivery
of written notice thereof to the EMI, upon the failure of Purchaser to comply
with its obligations under this Agreement and cure of such failure does not
occur within thirty (30) days after Company gives written notice of such failure
to EMI.
8.2 Extended Cure Period. Notwithstanding Sections 8.1(d) and
8.1(e), the parties agree that if the nature of the failure requires that more
than thirty (30) days are necessary to cure, this Agreement shall not terminate
if the failing party commences a cure within the thirty (30) day period and
thereafter continuously and diligently pursues all steps necessary to cure the
failure up to and including completion of the cure; provided, however, that such
extended cure period shall terminate sixty (60) days after the expiration of the
thirty-day period after the delivery of notice, as contemplated in Sections
8.1(d) and 8.1(e); provided, further, that this Section 8.2 shall not apply to
Company's failure to sell at the time provided shares of Common Stock to
Purchaser under Section 2.4 or 2.6.
ARTICLE 9. REPRESENTATIONS AND WARRANTIES
9.1 Of Company. Company hereby represents and warrants to EMI
as follows:
(a) Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania, with corporate power to own its properties and to conduct its
business as now conducted.
(b) The authorized capital stock of Company consists
of (i) 30,000,000 shares of Common Stock, of which at the date of this
Agreement, 11,066,367 shares were validly-issued and outstanding, fully paid and
nonassessable and no shares were held in Company's treasury, and (ii) 1,000,000
preferred shares, par value $1.00 per share, of which, at the date of this
Agreement, no shares were issued and outstanding. In addition, at the date of
this Agreement, an aggregate of 597,407 shares of Common Stock (including
authorized but unissued shares and treasury shares) were reserved for issuance
pursuant to presently existing options and future options under currently
existing stock option plans. Other than the Warrant, no other options, warrants,
rights or convertible securities providing for the issuance of Company capital
stock are outstanding.
(c) Company has full legal right, power and authority
to enter into and perform this Agreement, and the execution and delivery of this
Agreement by Company and the consummation of the transactions contemplated
hereby have been duly authorized by the Board and require no other Board or
stockholder action. This Agreement constitutes a valid and
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binding agreement of Company. Neither this Agreement nor the performance of this
Agreement by Company or EMI violate Company's Restated Articles of
Incorporation.
9.2 Of EMI. EMI hereby represents and warrants to Company as
follows:
(a) EMI is a corporation duly organized, validly
existing and in good standing under the laws of New York, with corporate power
to own its properties and to conduct its business as now conducted.
(b) EMI has full legal right, power and authority to
enter into and perform this Agreement, and the execution and delivery of this
Agreement by it and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors of EMI and require no other
Board of Directors or stockholder action. This Agreement constitutes a valid and
binding agreement of EMI.
ARTICLE 10. MISCELLANEOUS
10.1 Specific Enforcement. The parties hereto acknowledge and
agree that each would be irreparably damaged if any of the provisions of this
Agreement are not performed by the other in accordance with their specific terms
or are otherwise breached. It is accordingly agreed that each party shall be
entitled to seek an injunction or injunctions to prevent breaches of this
Agreement by the other and to enforce this Agreement and the terms and
provisions thereof specifically against the other, in addition to any other
remedy to which such aggrieved party may be entitled at law or in equity. Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any of the parties in the
courts of the Commonwealth of Pennsylvania, County of Xxxxxxx, in the United
States District Court for the Eastern District of Pennsylvania, courts of the
State of New York, New York County, or in the United States District Court for
the Southern District of New York, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
10.2 Severability. If any term or provision of this Agreement
is held by a court of competent jurisdiction or other authority to be invalid,
void, unenforceable or against its regulatory policy, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
10.3 Expenses. Except as otherwise provided herein, each party
hereto shall pay its own expenses in connection with this Agreement.
10.4 Assignment; Successors. This Agreement shall be binding
upon and shall inure to the benefit of and be enforceable by the successors and
permitted assigns of the parties hereto. Except as otherwise provided herein,
Company may not assign its rights and delegate its duties and obligations under
this Agreement without the prior written consent of EMI, and EMI may not assign
its rights or delegate its duties and obligations under this Agreement without
the prior written consent of Company and, in the absence of such consent, any
such purported
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assignment or delegation shall be void; provided, however, that EMI may assign
its rights and delegate its duties and obligations under this Agreement without
such consent to a directly or indirectly wholly owned subsidiary of EMI, or to
any corporation, partnership or other entity wholly-owned by the same person
which controls EMI, which subsidiary, corporation, partnership or other entity
(referred to herein as the "Assignee") may, following duly authorized execution
and delivery of an agreement assuming the obligations of EMI hereunder
reasonably satisfactory to Company, accept title to the Shares and/or Warrant
Shares. In the event that EMI assigns its rights and delegates all of its
obligations under this Agreement in accordance with this Section 10.4, all
references to EMI herein shall refer to the Assignee as well as to EMI and EMI
shall be jointly and severally liable with the Assignee for the performance of
its obligations hereunder.
10.5 Amendments. This Agreement may not be modified, amended,
altered or supplemented except by a written agreement signed by Company and EMI
which shall be authorized by all necessary corporate action of each party. Any
party may waive any condition to the obligations of any other party hereunder.
10.6 Notices. Every notice or other communication required or
contemplated by this Agreement to be given by a party shall be delivered either
by (a) personal delivery, (b) courier mail, or (c) facsimile mail addressed to
the party for whom intended at the following address:
To Company: VWR Corporation
0000 Xxxxxx Xxxxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy No.: (000)000-0000
With a copy to: Drinker Xxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telecopy No.: (000)000-0000
To EMI: EM Industries, Incorporated
0 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: President & Chief Executive Officer
Telecopy No.: (000) 000-0000
With a copy to: Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
or at such other address as the intended recipient previously shall have
designated by written notice to the other parties. Notice by courier mail
shall be effective on the date it is officially
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recorded as delivered to the intended recipient by return receipt or equivalent.
All notices and other communications required or contemplated by this Agreement
delivered in person or sent by facsimile mail shall be deemed to have been
delivered to and received by the addressee and shall be effective on the date of
personal delivery or on the date sent, respectively. Notice not given in writing
shall be effective only if acknowledged in writing by a duly authorized
representative of the party to whom it was given.
10.7 Attorneys' Fees. If any action or proceeding shall be
commenced to enforce this Agreement or any right arising in connection with this
Agreement, the prevailing party in such action or proceeding shall be entitled
to recover from the other party the reasonable attorneys' fees, costs and
expenses incurred by such prevailing party in connection with such action or
proceeding.
10.8 Integration. This Agreement, together with the Common
Share and Warrant Purchase Agreement and the Warrant, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein with respect to any matter.
10.9 Waivers. No failure or delay on the part of either party
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under this Agreement
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
10.10 Governing Law. This Agreement shall be exclusively
governed by, construed in accordance with, and interpreted according to the
substantive law of the Commonwealth of Pennsylvania without giving effect to the
principles of conflict of laws.
10.11 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
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original, but all of which together shall constitute one and the same
instrument.
10.12 Cooperation. The parties hereto shall each perform such
acts, execute and deliver such instruments and documents, and do all such other
things as may be reasonably necessary to accomplish the transactions
contemplated in this Agreement.
10.13 Section Headings and Captions. Section headings and
captions used in this Agreement are provided for convenience only and shall not
affect its meaning or interpretation.
IN WITNESS WHEREOF, Company and EMI have caused this Agreement
to be executed on the date first above written.
VWR CORPORATION
BY: /s/ Xxxxxxx X. Xxxxxx
------------------------------
ITS: President
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EM INDUSTRIES, INCORPORATED
BY: /s/ Xxxxxx X. Xxxxxxxx
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ITS: President
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