Exhibit 10.3

EXECUTION COPY

INCOME TAX RECEIVABLE AGREEMENT

dated as of

October 7, 2014

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TABLE OF CONTENTS

 

 

         Page  

ARTICLE I

  

DEFINITIONS  

Section 1.01.

 

Definitions

     1    ARTICLE II    DETERMINATION OF REALIZED TAX BENEFIT   

Section 2.01.

 

Pre-IPO NOL Utilization

     8   

Section 2.02.

 

Tax Benefit Schedule

     8   

Section 2.03.

 

Procedures, Amendments

     8    ARTICLE III    TAX BENEFIT PAYMENTS   

Section 3.01.

 

Payments

     9   

Section 3.02.

 

No Duplicative Payments

     10    ARTICLE IV    TERMINATION   

Section 4.01.

 

Termination, Breach of Agreement, Change of Control

     11   

Section 4.02.

 

Early Termination Schedule

     12   

Section 4.03.

 

Payment upon Early Termination

     13    ARTICLE V    LATE PAYMENTS, ETC.   

Section 5.01.

 

Late Payments by the Corporation

     13   

Section 5.02.

 

Compliance with Indebtedness

     14    ARTICLE VI    CONSISTENCY; COOPERATION   

Section 6.01.

 

The Existing Stockholders Representative’s Participation in Corporation Tax
Matters

     14   

Section 6.02.

 

Consistency

     14   

Section 6.03

 

Cooperation

     15   

Section 6.04.

 

Administrative Services

     15    ARTICLE VII    MISCELLANEOUS   

Section 7.01.

 

Notices

     15   

Section 7.02.

 

Counterparts

     16   

 

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Section 7.03.   Entire Agreement; Third Party Beneficiaries    16  

Section 7.04.

 

Governing Law

     16   

Section 7.05.

 

Severability

     17   

Section 7.06.

 

Successors; Assignment; Amendments; Waivers

     17   

Section 7.07.

 

Titles and Subtitles

     18   

Section 7.08.

 

Resolution of Disputes

     18   

Section 7.09.

 

Reconciliation

     19   

Section 7.10.

 

Withholding

     20   

Section 7.11.

 

Affiliated Corporations; Admission of the Corporation into a Consolidated Group;
Transfers of Corporate Assets

     20   

Section 7.12.

 

Confidentiality

     21   

Section 7.13.

 

Headings

     21   

Section 7.14.

 

Appointment of Existing Stockholders Representative

     21   

Section 7.15.

 

Conflicting Agreements

     23   

 

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This INCOME TAX RECEIVABLE AGREEMENT (as amended from time to time, this
“Agreement”), dated as of October 7, 2014, is hereby entered into by and among
VWR Corporation, a Delaware corporation (the “Corporation”) and Varietal
Distribution Holdings, LLC, a Delaware limited liability company (the “Existing
Stockholders Representative”).

RECITALS

WHEREAS, the Existing Stockholders (as defined below), in the aggregate, hold
100% of the capital stock of the Corporation, directly or indirectly;

WHEREAS, the Corporation will become a public company pursuant to the IPO (as
defined below);

WHEREAS, after the IPO, the Corporation and its Subsidiaries organized in the
United States of America (the “Taxable Entities” and each a “Taxable Entity”)
will have net operating losses and AMT credit carryforwards (including AMT
credits that arise after the IPO as a result of limitations on the use of NOLs
under the AMT) (collectively, “NOLs”) that relate to periods (or portions
thereof) ending on or prior to the date of the IPO (the “Pre-IPO NOLs”);

WHEREAS, the Pre-IPO NOLs may reduce the liability for Taxes (as defined below)
that the Taxable Entities might otherwise be required to pay;

WHEREAS, the income, gain, loss expense and other Tax (as defined below) items
of the Taxable Entities may be affected by Imputed Interest (as defined below),
if any; and

WHEREAS, the parties to this Agreement desire to make certain arrangements with
respect to the effect of the Pre-IPO NOLs and Imputed Interest (as defined
below) on the reported liability for Taxes of the Taxable Entities.

NOW, THEREFORE, in consideration of the foregoing and the respective covenants
and agreements set forth herein, and intending to be legally bound hereby, the
parties hereto agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Definitions. As used in this Agreement, the terms set forth in
this Article I shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined).

“Acquired NOLs” means any NOL of any corporation or other entity acquired by the
Corporation or any of its Subsidiaries by purchase, merger, or otherwise (in
each case, from a Person or Persons other than the Corporation and its
Subsidiaries and, in each case, whether or not such corporation or other entity
survives) after the IPO that relate to periods (or portions thereof) ending on
or prior to the date of such acquisition.

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“Advisory Firm” means (i) Ernst & Young LLP or (ii) any other law or accounting
firm that is (A) nationally recognized as being expert in Tax matters and
(B) that is agreed to by the Corporation and the Existing Stockholders
Representative.

“Advisory Firm Report” shall mean (a) an attestation report from the Advisory
Firm expressing an opinion on management’s assertion as to whether the Tax
Benefit Schedule and/or the Early Termination Schedule has been prepared, in all
material respects, in accordance with the Agreement, or (b) another type of
report or letter from the Advisory Firm related to whether the information in
the Tax Benefit Schedule and/or the Early Termination Schedule has been prepared
in a manner consistent with the terms of the Agreement.

“Affiliate” means, with respect to any Person, any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such first Person.

“Agreed Rate” means LIBOR plus 300 basis points.

“Agreement” is defined in the preamble of this Agreement.

“Amended Schedule” is defined in Section 2.03(b) of this Agreement.

“Annual Tax Payment” is defined in Section 3.01(a) of this Agreement.

A “Beneficial Owner” of a security is a Person who directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise has
or shares: (i) voting power, which includes the power to vote, or to direct the
voting of, such security and/or (ii) investment power, which includes the power
to dispose of, or to direct the disposition of, such security. The terms
“Beneficially Own” and “Beneficial Ownership” shall have correlative meanings.

“Board” means the board of directors of the Corporation.

“Business Day” means Monday through Friday of each week, except that a legal
holiday recognized as such by the government of the United States of America or
the State of Pennsylvania shall not be regarded as a Business Day.

“Change of Control” means:

(i) a merger, reorganization, consolidation or similar form of business
transaction directly involving the Corporation or indirectly involving the
Corporation through one or more intermediaries unless, immediately following
such transaction, more than 50% of the voting power of the then outstanding
voting stock or other equities of the Corporation resulting from consummation of
such transaction (including, without limitation, any parent or ultimate parent
corporation of such Person that as a result of such transaction owns directly or
indirectly the Corporation and all or substantially all of the Corporation’s
assets) is held by the existing Corporation equityholders or their Affiliates
(determined immediately prior to such transaction and related transactions); or

 

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(ii) a transaction in which the Corporation, directly or indirectly, sells,
assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to another Person other than an Affiliate; or

(iii) a transaction in which there is an acquisition of control of the
Corporation by a Person or group of Persons (other than Existing Stockholders
and their Affiliates). For purposes of this definition, the term “control” shall
mean the possession, directly or indirectly, of the power to either (i) vote
more than 50% of the securities having ordinary voting power for the election of
directors (or comparable positions in the case of partnerships and limited
liability companies), or (ii) direct or cause the direction of the management
and policies of such Person whether by contract or otherwise (for the avoidance
of doubt, consent rights do not constitute control for the purpose of this
definition); or

(iv) a transaction in which individuals who constitute the Board of the
Corporation (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of the Board of the Corporation, provided that any Person
becoming a director subsequent to the effective date of this Agreement, whose
election or nomination for election (A) is contemplated by a written agreement
among equityholders of the Corporation on the effective date of this Agreement,
(B) was approved by a vote of at least two-thirds of the Incumbent Directors
then on the Board (either by a specific vote or by approval of the proxy
statement of the Corporation in which such Person is named as a nominee for
director, without written objection to such nomination) or (C) was nominated or
approved by a majority in interest of the Existing Stockholders, shall be an
Incumbent Director; provided, however, that no individual initially elected or
nominated as a director of the Corporation as a result of an actual or
threatened election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies or consents by or on behalf
of any Person other than the Board shall be deemed to be an Incumbent Director;
or

(v) the liquidation or dissolution of the Corporation.

“Code” means the Internal Revenue Code of 1986, as amended.

“Combined Taxation Group” means any consolidated, combined or unitary group or
any profit and/or loss sharing, affiliated group relief, group payment or
similar group or fiscal unity for Tax purposes (by election or otherwise).

“Control” means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise.

“Corporation” is defined in the preamble of this Agreement.

“Default Rate” means LIBOR plus 500 basis points.

 

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“Determination” shall have the meaning ascribed to such term in Section 1313(a)
of the Code or similar provision of state and local tax law, as applicable, or
any other event (including the execution of a Form 870-AD) that finally and
conclusively establishes the amount of any liability for Tax.

“Divestiture” means the sale or other divestiture of any Taxable Entity, other
than any such sale that is or is part of a Change of Control.

“Divestiture Acceleration Payment” is defined in Section 4.03(c) of this
Agreement.

“Early Termination Event” means (i) a breach of this Agreement to which
Section 4.01(b) applies and (ii) a Change of Control.

“Early Termination Date” means (i) in the event of a breach of this Agreement to
which Section 4.01(b) applies, the date of such breach, (ii) in the event of a
Change of Control, the effective date of such Change of Control and (iii) in the
event of a Divestiture, the effective date of such Divestiture.

“Early Termination Payment” is defined in Section 4.03(b) of this Agreement.

“Early Termination Rate” means LIBOR plus 100 basis points.

“Early Termination Schedule” is defined in Section 4.02 of this Agreement.

“Estimated Tax Benefit” is defined in Section 3.01(c) of this Agreement.

“Existing Stockholders” means the stockholders of the Corporation immediately
prior to the IPO (including, without limitation, the Existing Stockholders set
forth on Exhibit A to this Agreement).

“Existing Stockholders Representative” is defined in the Preamble of this
Agreement.

“Expert” is defined in Section 7.09 of this Agreement.

“Imputed Interest” shall mean any interest imputed under Section 1272, 1274 or
483 or other provision of the Code and any similar provision of state and local
tax law with respect to the Corporation’s payment obligations under this
Agreement.

“Incumbent Directors” is defined in the definition of “Change of Control” in
Section 1.01 of this Agreement.

“Individual Stockholder” means any Existing Stockholder that is an individual.

“Individual Termination Payment” is defined in Section 4.01(e) of this
Agreement.

 

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“IPO” shall mean the initial public offering of Common Stock of the Corporation
pursuant to the Registration Statement.

“ITR Payment” means any Annual Tax Payment, Early Termination Payment,
Divestiture Acceleration Payment or Individual Termination Payment required to
be made by the Corporation to the Existing Stockholders under this Agreement.

“LIBOR” means for each month (or portion thereof) during any period, an interest
rate per annum equal to the rate per annum reported, on the date two days prior
to the first day of such month, on the Telerate Page 3750 (or if such screen
shall cease to be publicly available, as reported on Reuters Screen page “LIBO”
or by any other publicly available source of such market rate) for London
interbank offered rates for U.S. dollar deposits for such month (or portion
thereof).

“Material Objection Notice” has the meaning set forth in Section 4.02.

“Net Tax Benefit” is defined in Section 3.01(b) of this Agreement.

“NOLs” is defined in the preamble of this Agreement.

“Objection Notice” has the meaning set forth in Section 2.03(a).

“Other NOLs” means any Post-IPO NOLs and any Acquired NOLs.

“Ownership Percentage” means, in the case of any Existing Stockholder, a
fraction where the numerator is the number of shares in the Corporation owned by
such Existing Stockholder as of immediately prior to the IPO, and the
denominator is the number of shares in the Corporation outstanding as of
immediately prior to the IPO. In the event of a transfer of shares in the
Corporation by an Existing Stockholder, the Existing Stockholders Representative
may amend this paragraph to reflect such transfer; provided, that in all cases
the total Ownership Percentage shall be equal to 100%.

“Payment Date” means any date on which a payment is required to be made pursuant
to this Agreement.

“Person” means any individual, corporation, firm, partnership, joint venture,
limited liability company, estate, trust, business association, organization,
governmental entity or other entity.

“Post-IPO NOLs” means any NOL arising in a Taxable Year or portion thereof
beginning after the date of the IPO.

“Pre-IPO NOLs” is defined in the preamble of this Agreement; provided, however,
that in order to determine whether an NOL is a Pre-IPO NOL or a Post-IPO NOL,
the Taxable Year of the relevant Taxable Entity that includes the effective date
of the IPO (the “Straddle Year”) shall be deemed to end as of the close of such
effective date; provided, further, however, that the Chief Executive Officer of
the Corporation, the Board and the Existing Stockholders Representative shall,
acting reasonably, together determine the amount of any NOL

 

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arising in the Straddle Year, or any portion thereof, that is included in the
amount of Pre-IPO NOLs; provided, further, however, that any Transferred NOLs
taken into account in calculating a Divestiture Acceleration Payment shall not
be considered Pre-IPO NOLs.

“Realized Tax Benefit” means, for a Taxable Year, the reduction in the liability
for (i) federal income Taxes of the Corporation, and (ii) state and local income
Taxes of each Taxable Entity, in each case, for such Taxable Year resulting from
the Pre-IPO NOLs and the deduction attributable to Imputed Interest, if any,
under the Agreement (giving effect to the principles of Section 3.02). If all or
a portion of the liability for Taxes for the Taxable Year arises as a result of
an audit by a Taxing Authority of any Taxable Year, such liability shall not be
included in determining the Realized Tax Benefit unless and until there has been
a Determination. For the absence of doubt, for purposes of clause (i), state and
local NOLs that are reflected in the Pre-IPO NOLs shall be disregarded such that
the calculation of federal income Taxes before the reduction resulting from the
Pre-IPO NOLs reflects any deduction (or other benefit) for state or local income
Taxes that would be available in the absence of such state NOLs.

“Reconciliation Dispute” has the meaning set forth in Section 7.09(a) of this
Agreement.

“Reconciliation Procedures” shall mean those procedures set forth in
Section 7.09 of this Agreement.

“Registration Statement” means the registration statement on Form S-1 (File
No. 333-196996) of the Corporation.

“Rollover Taxable Year” is defined in Section 2.02 of this Agreement.

“Schedule” means any Tax Benefit Schedule and any Early Termination Schedule.

“Schedule Delivery Date” is defined in Section 2.02 of this Agreement.

“Specified Filing Date” is defined in Section 2.02 of this Agreement.

“Straddle Year” is defined in the definition of “Pre-IPO NOLs” in Section 1.01
of this Agreement.

“Subject Taxable Year” is defined in Section 2.02 of this Agreement.

“Subsidiaries” means, with respect to any Person, as of any date of
determination, any other Person as to which such Person, owns, directly or
indirectly, or otherwise controls more than 50% of the voting power or other
similar interests or the sole general partner interest or managing member or
similar interest of such Person.

“Tax Benefit” is defined in Section 3.01(b) of this Agreement.

“Tax Benefit Schedule” is defined in Section 2.02 of this Agreement.

 

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“Tax Return” means any return, declaration, report or similar statement required
to be filed with respect to Taxes (including any attached schedules), including,
without limitation, any information return, claim for refund, amended return and
declaration of estimated Tax.

“Taxable Entity” is defined in the Preamble to this Agreement.

“Taxable Entity Return” means the federal, state or local Tax Return, as
applicable, of a Taxable Entity filed with respect to Taxes of any Taxable Year.

“Taxable Year” means a taxable year as defined in Section 441(b) of the Code or
comparable section of state or local tax law, as applicable, (and, therefore,
for the avoidance of doubt, may include a period of less than 12 months for
which a Tax Return is made) ending on or after the date hereof.

“Taxes” means any and all U.S. federal, state and local taxes, assessments or
similar charges measured with respect to net income or profits and any interest
related to such Tax.

“Taxing Authority” shall mean any domestic, federal, national, state, county or
municipal or other local government, any subdivision, agency, commission or
authority thereof, or any quasi-governmental body exercising any taxing
authority or any other authority exercising Tax regulatory authority.

“Transferred NOLs” means, in the event of a Divestiture, the Pre-IPO NOLs
attributable to the Taxable Entity that is sold in such Divestiture to the
extent such Pre-IPO NOLs are transferred with such Taxable Entity under
applicable Tax law following the Divestiture (disregarding any limitation on the
use of such Pre-IPO NOLs as a result of the Divestiture) and do not remain under
applicable Tax law with the Corporation or any of its Subsidiaries (other than
the Taxable Entity that is sold in such Divestiture).

“Treasury Regulations” means the final, temporary and proposed regulations under
the Code promulgated from time to time (including corresponding provisions and
succeeding provisions) as in effect for the relevant taxable period.

“Valuation Assumptions” shall mean, as of an Early Termination Date, the
assumptions that (i) in each Taxable Year ending on or after such Early
Termination Date, each Taxable Entity will generate an amount of taxable income
in accordance with management’s preexisting projections (or, in the absence of
such projections, as projected in good faith by management in a manner
consistent with their projections for other purposes), (ii) the utilization of
the Pre-IPO NOLs and the Imputed Interest for such Taxable Year or future
Taxable Years, as applicable, will be determined based on the Tax laws in effect
on the Early Termination Date and (iii) the federal income tax rates and state
and local income tax rates that will be in effect for each such Taxable Year
will be those specified for each such Taxable Year by the Code and other law as
in effect on the Early Termination Date (or, with respect to any Taxable Year
for which such federal income tax rates or state and local income tax rates are
not specified by the Code and other law as in effect on the Early Termination
Date, such federal income tax rates or state and local income tax rates that are
in effect on the Early Termination Date). For the

 

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purposes of clause (i) of this definition, the taxable income projections made
by the management of the Corporation shall be subject to the Reconciliation
Procedures. Such assumptions shall relate only to the projected income and loss
of the Taxable Entities (extending the same beyond the years of projection, as
applicable, at the same imputed growth rate), and shall include only the
utilization of tax attributes subject to the Agreement and not any anticipated
future attributes that might result from acquisitions, dispositions,
recapitalizations or refinancings. For the avoidance of doubt, in the event of a
Change of Control or Divestiture, such assumptions shall not take into account
any changes in the relevant Taxable Entities’ standalone tax position that might
result from the transaction giving rise to the Change of Control or Divestiture.

ARTICLE II

DETERMINATION OF REALIZED TAX BENEFIT

Section 2.01. Pre-IPO NOL Utilization. The Corporation, on the one hand, and the
Existing Stockholders, on the other hand, acknowledge that the Taxable Entities
may utilize the Pre-IPO NOLs to reduce the amount of Taxes that the Taxable
Entities would otherwise be required to pay in the future.

Section 2.02. Tax Benefit Schedule. Within 90 calendar days after the filing of
the U.S. federal income tax return of the Corporation for any federal Taxable
Year (each such federal Taxable Year together with the state or local Taxable
Years ending in the same calendar year as such federal Taxable Year, a “Subject
Taxable Year,” and such 90th day the “Schedule Delivery Date”), the Corporation
shall provide to the Existing Stockholders Representative a schedule showing,
for the Corporation and for each Taxable Entity, in the case of any relevant Tax
Return that has been filed after the IPO and prior to the Schedule Delivery Date
and has not previously been the subject of this Section 2.02 (but in the case of
any state or local Tax Return, only to the extent such Tax Return has been filed
on or prior to the 60th day following the filing of the U.S. federal income tax
return of the Corporation for the Subject Taxable Year (the “Specified Filing
Date”)), in reasonable detail, (i) the calculation of the Realized Tax Benefit
for the Subject Taxable Year, (ii) the calculation of any payment to be made to
the Existing Stockholders pursuant to Article III with respect to the Subject
Taxable Year, (iii) the calculation of any Realized Tax Benefit for the Taxable
Year immediately preceding the Subject Taxable Year (the “Rollover Taxable
Year”), in the case of any relevant Tax Return that was filed following the
Specified Filing Date relating to the Rollover Taxable Year, and (iv) the
calculation of any payment to be made to the Existing Stockholders pursuant to
Article III with respect to the Rollover Taxable Year (collectively a “Tax
Benefit Schedule”). Concurrently the Corporation shall also deliver to the
Existing Stockholders Representative all supporting information (including work
papers and valuation reports) reasonably necessary to support the calculation of
such payment. The Schedule will become final as provided in Section 2.03(a) and
may be amended as provided in Section 2.03(b) (subject to the procedures set
forth in Section 2.03(a)).

Section 2.03. Procedures, Amendments.

(a) Procedure. Whenever the Corporation delivers to the Existing Stockholders
Representative an applicable Schedule under this Agreement, including any

 

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Amended Schedule delivered pursuant to Section 2.03(b), and including any Early
Termination Schedule or amended Early Termination Schedule, the Corporation
shall also (x) deliver to the Existing Stockholders Representative schedules,
valuation reports, if any, and work papers providing reasonable detail regarding
the preparation of the Schedule and, upon request by the Existing Stockholders
Representative, an Advisory Firm Report related to such Schedule (the cost and
expense of which shall be paid by the Corporation) and (y) allow the Existing
Stockholders Representative reasonable access at no cost to the appropriate
representatives at each of the Corporation and the Advisory Firm, if applicable,
in connection with a review of such Schedule. The applicable Schedule shall
become final and binding on all parties unless the Existing Stockholders
Representative, within 30 calendar days after receiving any Schedule or
amendment thereto, provides the Corporation with notice of a material objection
to such Schedule (“Objection Notice”) made in good faith or unless the parties
agree in writing that such Schedule shall have become final and binding prior to
such 30 day period. If the parties, for any reason, are unable to successfully
resolve the issues raised in any notice within 30 calendar days of receipt by
the Corporation of such notice, the Corporation and the Existing Stockholders
Representative shall employ the reconciliation procedures described in
Section 7.09 of this Agreement (the “Reconciliation Procedures”).

(b) Amended Schedule. The applicable Schedule for any Taxable Year may be
amended from time to time by the Corporation (i) in connection with a
Determination affecting such Schedule, (ii) to correct material inaccuracies in
the Schedule identified as a result of the receipt of additional factual
information relating to a Taxable Year after the date the Schedule was provided
to the Existing Stockholders Representative, (iii) to comply with the Expert’s
determination under the Reconciliation Procedures, or (iv) to reflect a material
change (relative to the amounts in the original Schedule) in the Realized Tax
Benefit for such Taxable Year attributable to an amended Tax Return filed for
such Taxable Year, in each case with respect to any Taxable Entity (such amended
Schedule, an “Amended Schedule”); provided, however, that such a change under
clause (i) attributable to an audit of a Tax Return by an applicable Taxing
Authority shall not be taken into account on an Amended Schedule unless and
until there has been a Determination with respect to such change. The
Corporation shall provide any Amended Schedule to the Existing Stockholders
Representative within 30 calendar days of the occurrence of an event referred to
in clauses (i) through (iv) of the preceding sentence, and any such Amended
Schedule shall be subject to the approval procedures described in
Section 2.03(a).

ARTICLE III

TAX BENEFIT PAYMENTS

Section 3.01. Payments.

(a) Except as provided in Section 5.02, within 75 days after the end of any U.S.
federal Subject Taxable Year, the Corporation (on its own behalf and on behalf
of any other Taxable Entity) shall pay to each Existing Stockholder its share
(based on such Existing Stockholder’s Ownership Percentage) of the Annual Tax
Payment for such Subject Taxable Year, provided that no payment shall be made
pursuant to this Section 3.01 to any Individual Stockholder who received at any
time prior to the date of such payment an Individual

 

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Termination Payment pursuant to Section 4.01(e). The “Annual Tax Payment” for a
Subject Taxable Year means an amount, not less than zero, equal to (i) the
Estimated Tax Benefit determined pursuant to Section 3.01(c) for such Subject
Taxable Year, plus (ii) the excess, if any, of the Tax Benefit for a Subject
Taxable Year prior to the Subject Taxable Year over the Estimated Tax Benefit
for such prior Subject Taxable Year, to the extent any such excess amount was
not previously taken into account pursuant to this Section 3.01(a)(ii) to
increase the Annual Tax Payment for a Subject Taxable Year prior to the Subject
Taxable Year, minus (iii) the excess, if any, of the Estimated Tax Benefit for a
Subject Taxable Year prior to the Subject Taxable Year over the Tax Benefit for
such prior Subject Taxable Year, to the extent any such excess amount was not
previously taken into account pursuant to this Section 3.01(a)(iii) to reduce
the Annual Tax Payment for a Subject Taxable Year prior to the Subject Taxable
Year, plus (iv) 85% of the excess of the Realized Tax Benefit required to be
reflected on an Amended Schedule for a Subject Taxable Year prior to the Subject
Taxable Year over the Realized Tax Benefit required to be reflected on the Tax
Benefit Schedule for such prior Subject Taxable Year, to the extent any such
excess amount was not previously taken into account pursuant to this
Section 3.01(a)(iv) to increase the Annual Tax Payment for a Subject Taxable
Year prior to the Subject Taxable Year, minus (v) 85% of the excess of the
Realized Tax Benefit required to be reflected on a Tax Benefit Schedule for a
Subject Taxable Year prior to the Subject Taxable Year over the Realized Tax
Benefit required to be reflected on an Amended Schedule for such prior Subject
Taxable Year, to the extent any such excess amount was not previously taken into
account pursuant to this Section 3.01(a)(v) to reduce the Annual Tax Payment for
a Subject Taxable Year prior to the Subject Taxable Year. For the avoidance of
doubt, no Annual Tax Payment shall be made, nor Tax Benefit determined, in
respect of estimated tax payments, including, without limitation, estimated
federal income tax payments. For the further avoidance of doubt, the Existing
Stockholders shall not be required to return any portion of any previously made
Annual Tax Payment or other ITR Payment. Each payment pursuant to this
Section 3.01(a) shall be made by wire transfer of immediately available funds to
a bank account of the applicable Existing Stockholder previously designated by
the Existing Stockholder to the Corporation or as otherwise agreed by the
Corporation and the Existing Stockholder.

(b) A “Tax Benefit” for a Subject Taxable Year means an amount, not less than
zero, equal to 85% of: (i) the Taxable Entities’ Realized Tax Benefit, if any,
required to be reflected on the Tax Benefit Schedule for the Subject Taxable
Year, plus (ii) the Taxable Entities’ Realized Tax Benefit, if any, for the
Rollover Taxable Year, if any, to the extent required to be reflected on the Tax
Benefit Schedule for the Subject Taxable Year (as set forth in
Section 2.02(iii)).

(c) The “Estimated Tax Benefit” for a Subject Taxable Year means an amount, not
less than zero, equal to 85% of the Corporation’s reasonable good faith estimate
of the Taxable Entities’ Realized Tax Benefit, if any, for the Subject Taxable
Year.

Section 3.02. No Duplicative Payments. It is intended that the provisions of
this Agreement will not result in duplicative payment of any amount (including
interest) required under this Agreement. It is also intended that the provisions
of this Agreement provide that 85% of the Taxable Entities’ Realized Tax Benefit
for all Taxable Years be paid to the Existing Stockholders pursuant to this
Agreement. Carryovers or carrybacks of any NOL or other tax item shall be
considered to be subject to the rules of the Code and the Treasury Regulations
or the

 

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appropriate provisions of Tax law, as applicable, governing the use, limitation
and expiration of carryovers or carrybacks of the relevant type; provided,
however, that Pre-IPO NOLs treated as resulting in a Realized Tax Benefit for
one Taxable Year shall not be treated as resulting in a Realized Tax Benefit for
any other Taxable Year, and, for purposes of determining the Realized Tax
Benefit for any Taxable Year, each Taxable Entity shall be assumed (a) to
utilize any item of loss, deduction or credit arising in such Taxable Year (and
permitted to be utilized in such Taxable Year) before carrying back or carrying
forward to such Taxable Year any NOL that is permitted to be so carried back or
carried forward, (b) to utilize any available Pre-IPO NOL that is permitted (or,
for the absence of doubt, that would be so permitted but for such Other NOL) to
be carried back or carried forward to such Taxable Year before utilizing any
Other NOL, and (c) to utilize any Pre-IPO NOL in the first Taxable Year in which
such Pre-IPO NOL is permitted to be utilized; provided, further, however, that,
notwithstanding any other provision, the Chief Executive Officer of the
Corporation, the Board and the Existing Stockholders Representative shall,
acting reasonably, together determine the extent to which a Pre-IPO NOL can be
carried back or carried forward to a Straddle Year or any portion thereof. If a
carryover or carryback of any Tax item includes a portion that is attributable
to the Pre-IPO NOLs and another portion that is not, the Corporation shall be
assumed to utilize the portion attributable to the Pre-IPO NOLs before utilizing
such other portion. The provisions of this Agreement shall be construed in the
appropriate manner so that such intentions are realized.

ARTICLE IV

TERMINATION

Section 4.01. Termination, Breach of Agreement, Change of Control.

(a) Termination. This Agreement shall terminate at the time that all Annual Tax
Payments have been made to the Existing Stockholders under this Agreement.

(b) Breach of Agreement. In the event that the Corporation breaches any of its
material obligations under this Agreement, whether as a result of failure to
make any payment when due (as described below), failure to honor any other
material obligation required hereunder or by operation of law as a result of the
rejection of this Agreement in a case commenced under the Bankruptcy Code or
otherwise, then all obligations hereunder shall be accelerated and the
Corporation shall pay to the Existing Stockholders (1) the Early Termination
Payment, (2) any Annual Tax Payment agreed to by the Corporation and the
Existing Stockholders as due and payable but unpaid as of the Early Termination
Date and (3) any Annual Tax Payment due for the Taxable Year ending prior to,
with or including the date of a breach. Notwithstanding the foregoing, in the
event that the Corporation breaches this Agreement, the Existing Stockholders
shall be entitled to elect to receive the amounts set forth in (1), (2) and
(3) above or to seek specific performance of the terms hereof. In the event of a
breach of a material obligation under this Agreement, the Early Termination
Payment shall be calculated utilizing the Valuation Assumptions. The parties
agree that the failure to make any payment due pursuant to this Agreement within
three months of the date such payment is due shall be deemed to be a breach of a
material obligation under this Agreement for all purposes of this Agreement, and
that it will not be considered to be a breach of a material obligation under
this Agreement to make a payment due pursuant to this Agreement within three
months of the date such payment is due,

 

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provided that in the event that payment is not made within six months of the
date such payment is due, the Existing Stockholders (through the Existing
Stockholders Representative) shall be required to give written notice to the
Corporation that the Corporation has breached its material obligations and so
long as such payment is made within five Business Days of the delivery of such
notice to the Corporation, the Corporation shall no longer be deemed to be in
material breach of its obligations under this Agreement. The parties agree that
any breach of Section 7.15 of this Agreement by the Corporation (without
obtaining the advance written consent of the Existing Stockholders
Representative) shall be deemed to be a breach of a material obligation under
this Agreement.

(c) Change of Control. In the event of a Change of Control, then all obligations
hereunder shall be accelerated and the Corporation shall pay to the Existing
Stockholders (1) the Early Termination Payment, (2) any Annual Tax Payment
agreed to by the Corporation and the Existing Stockholders as due and payable
but unpaid as of the Early Termination Date and (3) any Annual Tax Payment due
for any Taxable Year ending prior to, with or including the effective date of a
Change of Control. In the event of a Change of Control, the Early Termination
Payment shall be calculated utilizing the Valuation Assumptions.

(d) Divestiture Acceleration Payment. In the event of a Divestiture, the
Corporation shall pay to the Existing Stockholders the Divestiture Acceleration
Payment in respect of such Divestiture, which shall be calculated utilizing the
Valuation Assumptions.

(e) Elective Individual Termination. Except as provided in Section 5.02, the
Corporation may, as determined by the Chief Executive Officer of the
Corporation, elect to terminate the rights of any Individual Stockholder under
this Agreement by paying to such Individual Stockholder a termination payment
(the “Individual Termination Payment”) as reasonably determined by the Chief
Executive Officer of the Corporation, provided that such election and the amount
of such Individual Termination Payment shall be subject to the consent of the
Board and the Existing Stockholders Representative and shall, as reasonably
practical, use the Valuation Assumptions (substituting references to the date of
such Individual Termination Payment for references to the Early Termination Date
in the definition of Valuation Assumptions).

Section 4.02. Early Termination Schedule. In the event of a Change of Control or
a Divestiture, the Corporation shall deliver to the Existing Stockholders
Representative no later than 60 calendar days prior to such Change of Control or
Divestiture, as applicable a schedule (the “Early Termination Schedule”) showing
in reasonable detail the information required pursuant to the penultimate
sentence of Section 2.02 and the calculation of the Early Termination Payment or
the Divestiture Acceleration Payment, respectively (including the projections of
the Taxable Entities’ taxable income under clause (i) of the Valuation
Assumptions). The Early Termination Schedule shall become final and binding on
all parties unless the Existing Stockholders Representative, within 15 calendar
days after receiving the Early Termination Schedule provides the Corporation
with notice of a material objection to such Schedule made in good faith
(“Material Objection Notice”). If the parties for any reason are unable to
successfully resolve the issues raised in such notice within 15 calendar days
after receipt by the Corporation of the Material Objection Notice, the
Corporation and the Existing Stockholders Representative shall employ the
Reconciliation Procedures as described in Section 7.09 of this Agreement.

 

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Section 4.03. Payment upon Early Termination. (a) Except as provided in
Section 5.02, no later than the Early Termination Date, the Corporation shall
pay to each Existing Stockholder its share (based on such Existing Stockholder’s
Ownership Percentage) of an amount equal to the Early Termination Payment or
Divestiture Acceleration Payment and any other payment required to be made
pursuant to Sections 4.01(b) and (c). Such payment shall be made by wire
transfer of immediately available funds to a bank account designated by the
applicable Existing Stockholders or as otherwise agreed by the Corporation and
the Existing Stockholder.

(b) The “Early Termination Payment” as of the Early Termination Date (other than
an Early Termination Date arising under clause (iii) of the definition thereof)
shall equal with respect to the Existing Stockholders the present value,
discounted at the Early Termination Rate as of such date, of all Annual Tax
Payments that would be required to be paid by the Corporation to the Existing
Stockholders beginning from the Early Termination Date assuming the Valuation
Assumptions are applied, provided that in the event of a Change of Control, the
Early Termination Payment shall be calculated without giving effect to any
limitation on the use of the Pre-IPO NOLs resulting from the Change of Control.
For purposes of calculating the present value pursuant to this Section 4.03(b)
of all Annual Tax Payments that would be required to be paid, it shall be
assumed that absent the Early Termination Event all Annual Tax Payments would be
paid on the due date (without extensions) for filing the relevant Taxable Entity
Return with respect to Taxes for each Taxable Year. The computation of the Early
Termination Payment is subject to the Reconciliation Procedures as described in
Section 7.09(b) of this Agreement.

(c) The “Divestiture Acceleration Payment” as of the date of any Divestiture
shall equal with respect to the Existing Stockholders the present value,
discounted at the Early Termination Rate as of such date, of the Annual Tax
Payments resulting solely from the Transferred NOLs that would be required to be
paid by the Corporation to the Existing Stockholders beginning from the date of
such Divestiture assuming the Valuation Assumptions are applied, provided that
the Divestiture Acceleration Payment shall be calculated without giving effect
to any limitation on the use of the Transferred NOLs resulting from the
Divestiture. For purposes of calculating the present value pursuant to this
Section 4.03(c) of all Annual Tax Payments that would be required to be paid, it
shall be assumed that absent the Divestiture all Annual Tax Payments would be
paid on the due date (without extensions) for filing the relevant Taxable Entity
Return with respect to Taxes for each Taxable Year. The computation of the
Divestiture Acceleration Payment is subject to the Reconciliation Procedures as
described in Section 7.09(b) of this Agreement.

ARTICLE V

LATE PAYMENTS, ETC.

Section 5.01. Late Payments by the Corporation. The amount of all or any portion
of any ITR Payment not made to the Existing Stockholders when due under the
terms of this Agreement shall be payable together with any interest thereon,
computed at the Default Rate and commencing from the date on which such ITR
Payment was due and payable.

 

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Section 5.02. Compliance with Indebtedness. Notwithstanding anything to the
contrary provided herein, if, at the time any amounts becomes due and payable
hereunder, (a) the Corporation is not permitted, pursuant to the terms of its
existing outstanding indebtedness listed on Exhibit B to this Agreement as in
effect on the date hereof, to pay such amounts, or (b) (i) the Corporation does
not have the cash on hand to pay such amounts, and (ii) no domestic Subsidiary
of the Corporation is permitted, pursuant to the terms of its existing
outstanding indebtedness listed on Exhibit B to this Agreement as in effect on
the date hereof, to pay dividends to the Corporation to allow it to pay such
amounts, then, in each case, the Corporation shall, by notice to the Existing
Stockholders Representative, be permitted to defer the payment of such amounts
until the condition described in clause (a) or (b) is no longer applicable, in
which case such amounts (together with accrued and unpaid interest thereon as
described in the immediately following sentence) shall become due and payable
immediately. If the Corporation defers the payment of any such amounts pursuant
to the foregoing sentence, such amounts shall accrue interest at the Agreed Rate
per annum, from the date that such amounts originally became due and owing
pursuant to the terms hereof to the date that such amounts were paid.

ARTICLE VI

CONSISTENCY; COOPERATION

Section 6.01. The Existing Stockholders Representative’s Participation in
Corporation Tax Matters. Except as otherwise provided herein, the Corporation
shall have full responsibility for, and sole discretion over, all Tax matters
concerning the Corporation and each Taxable Entity including without limitation
the preparation, filing or amending of any Tax Return and defending, contesting
or settling any issue pertaining to Taxes, subject to a requirement that the
Corporation act in good faith in connection with its control of any matter which
is reasonably expected to affect any Existing Stockholder’s rights and
obligations under this Agreement. Notwithstanding the foregoing, the Corporation
shall notify the Existing Stockholders Representative of, and keep the Existing
Stockholders Representative reasonably informed with respect to, the portion of
any audit of the Corporation or any Taxable Entity by a Taxing Authority the
outcome of which is reasonably expected to affect any Existing Stockholder’s
rights and obligations under this Agreement, and shall give the Existing
Stockholders Representative reasonable opportunity to provide information with
respect to and be consulted about the applicable portion of such audit.

Section 6.02. Consistency. Except upon the written advice of an Advisory Firm
(if requested by the Existing Stockholders Representative), the Corporation and
the Existing Stockholders Representative agree to report and cause to be
reported for all purposes, including federal, state, local and foreign Tax
purposes and financial reporting purposes, (i) the entry into this Agreement as
a distribution with respect to the stock of the Corporation held by the Existing
Stockholders Representative equal in amount to the fair value of the rights
received by the Existing Stockholders Representative under this Agreement
(measured when executed), with the fair value of such rights determined by
agreement between the Corporation and the Existing Stockholders Representative,
negotiating in good faith, and (ii) all other Tax-related items

 

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(including without limitation the Annual Tax Payment) in a manner consistent
with that specified by the Corporation in any Schedule required to be provided
by or on behalf of the Corporation or any Taxable Entity under this Agreement
and agreed by the Existing Stockholders Representative. Any dispute concerning
such advice or the value of the Existing Stockholders Representative’s rights
under this Agreement shall be subject to the terms of Section 7.09. In the event
that an Advisory Firm is replaced with another firm acceptable to the
Corporation and the Existing Stockholders Representative pursuant to the
definition of Advisory Firm, such replacement Advisory Firm shall be required to
perform its services under this Agreement using procedures and methodologies
consistent with those used by the previous Advisory Firm, unless otherwise
required by law or the Corporation and the Existing Stockholders Representative
agree to the use of other procedures and methodologies.

Section 6.03. Cooperation. Each of the Corporation and the Existing Stockholders
(through the Existing Stockholders Representative) shall (a) furnish to the
other party in a timely manner such information, documents and other materials
as the other party may reasonably request for purposes of making or approving
any determination or computation necessary or appropriate under this Agreement,
preparing any Tax Return or contesting or defending any audit, examination or
controversy with any Taxing Authority, (b) make itself available to the other
party and its representatives to provide explanations of documents and materials
and such other information as the requesting party or its representatives may
reasonably request in connection with any of the matters described in clause
(a) above, and (c) reasonably cooperate in connection with any such matter, and
the requesting party shall reimburse the other party for any reasonable
third-party costs and expenses incurred pursuant to this Section 6.03.

Section 6.04. Administrative Services. The Corporation shall perform
administrative services for the Existing Stockholders Representative as of the
date hereof for no additional consideration pertaining to equity plan
management, the preparation and filing of tax returns, distributions and other
ancillary corporate organizational matters.

ARTICLE VII

MISCELLANEOUS

Section 7.01. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed duly given and
received (a) on the date of delivery if delivered personally, or by facsimile
upon confirmation of transmission by the sender’s fax machine if sent on a
Business Day (or otherwise on the next Business Day) or (b) on the first
Business Day following the date of dispatch if delivered by a recognized
next-day courier service. All notices hereunder shall be delivered as set forth
below or pursuant to such other instructions as may be designated in writing by
the party to receive such notice:

If to the Corporation, to:

VWR Corporation

Radnor Corporate Center

Building One, Suite 200

100 Matsonford Road

Radnor, Pennsylvania 19087

Attention: Scott Baker

Facsimile: (610) 728-5737

 

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If to the Existing Stockholders Representative, to:

Varietal Distribution Holdings, LLC

c/o Madison Dearborn Partners, LLC

Three First National Plaza, Suite 4600

Chicago, Illinois 60602

Attention: Nicholas W. Alexos

Facsimile: (312) 895-1261

with a copy to (which shall not constitute notice):

Kirkland & Ellis LLP

300 North LaSalle Street

Chicago, Illinois 60654

Attention: Sanford E. Perl, P.C.

Mark A. Fennell, P.C.

Facsimile: (312) 862-2200

Any party may change its address or fax number by giving the other party written
notice of its new address or fax number in the manner set forth above.

Section 7.02. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. Delivery of an executed signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.

Section 7.03. Entire Agreement; Third Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof. This Agreement shall be binding upon and inure solely to
the benefit of each party hereto and their respective successors and permitted
assigns. The parties to this Agreement agree that the Existing Stockholders are
expressly made third party beneficiaries to this Agreement. Other than as
provided in the preceding sentence, nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.

Section 7.04. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.

 

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Section 7.05. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.

Section 7.06. Successors; Assignment; Amendments; Waivers. (a) Except as
otherwise expressly set forth in this Agreement, the Existing Stockholders
Representative and any Existing Stockholder may from time to time assign all or
a portion of its rights and obligations under this Agreement to any Person or
Persons without the prior written consent of the Corporation, provided that
(i) such assignment does not materially increase the Corporation’s obligations
under this Agreement and (ii) the assignee has executed and delivered, or, in
connection with such assignment, executes and delivers, a joinder to this
Agreement, in form and substance reasonably satisfactory to the Corporation and
the transferor, agreeing to be bound by all provisions of this Agreement.

(b) Except as otherwise expressly set forth in this Agreement, any Existing
Stockholder may from time to time assign all or a portion of its rights and
obligations under this Agreement to any Person or Persons with the prior written
consent of the Existing Stockholders Representative, provided that such
assignment does not materially increase the Corporation’s obligations under this
Agreement. For the avoidance of doubt, no Existing Stockholder may assign any of
its rights and obligations under this Agreement without the prior written
consent of the Existing Stockholders Representative.

(c) The Corporation may not assign any of its rights and obligations under this
Agreement without the prior written consent of the Existing Stockholders
Representative.

(d) No provision of this Agreement may be amended unless such amendment is
approved in writing by the Corporation and the Existing Stockholders
Representative. No provision of this Agreement may be waived unless such waiver
is in writing and signed by the party against whom the waiver is to be
effective.

(e) All of the terms and provisions of this Agreement shall be binding upon,
shall inure to the benefit of and shall be enforceable by the parties hereto and
their respective successors, assigns, heirs, executors, administrators and legal
representatives. The Corporation shall require and cause any direct or indirect
successor (whether by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Corporation, by written
agreement, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform
if no such succession had taken place.

 

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Section 7.07. Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

Section 7.08. Resolution of Disputes.

(a) Any and all disputes which cannot be settled amicably, including any
ancillary claims of any party, arising out of, relating to or in connection with
the validity, negotiation, execution, interpretation, performance or
nonperformance of this Agreement (including the validity, scope and
enforceability of this arbitration provision) shall be finally settled by
arbitration conducted by a single arbitrator in New York in accordance with the
then-existing Rules of Arbitration of the International Institute for Conflict
Prevention and Resolution. If the parties to the dispute fail to agree on the
selection of an arbitrator within 30 calendar days of the receipt of the request
for arbitration, the International Institute for Conflict Prevention and
Resolution shall make the appointment. The arbitrator shall be a lawyer and
shall conduct the proceedings in the English language. Performance under this
Agreement shall continue if reasonably possible during any arbitration
proceedings.

(b) Notwithstanding the provisions of paragraph (a), the Corporation may bring
an action or special proceeding in any court of competent jurisdiction for the
purpose of compelling a party to arbitrate, seeking temporary or preliminary
relief in aid of an arbitration hereunder, and/or enforcing an arbitration award
and, for the purposes of this paragraph (b), each Existing Stockholder (through
the Existing Stockholders Representative) (i) expressly consents to the
application of paragraph (c) of this Section 7.08 to any such action or
proceeding, (ii) agrees that proof shall not be required that monetary damages
for breach of the provisions of this Agreement would be difficult to calculate
and that remedies at law would be inadequate, and (iii) irrevocably appoints the
Corporation as its agent for service of process in connection with any such
action or proceeding and agrees that service of process upon such agent, who
shall promptly advise the Existing Stockholders Representative of any such
service of process, shall be deemed in every respect effective service of
process upon such Existing Stockholder in any such action or proceeding.

(c) (i) EACH EXISTING STOCKHOLDER (THROUGH THE EXISTING STOCKHOLDERS
REPRESENTATIVE) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED
IN NEW YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN
ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH (B) OF THIS SECTION 7.08, OR ANY
JUDICIAL PROCEEDING ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION
ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary
judicial proceedings include any suit, action or proceeding to compel
arbitration, to obtain temporary or preliminary judicial relief in aid of
arbitration, or to confirm an arbitration award. The parties acknowledge that
the fora designated by this paragraph (c) have a reasonable relation to this
Agreement, and to the parties’ relationship with one another.

(ii) The parties hereby waive, to the fullest extent permitted by applicable
law, any objection which they now or hereafter may have to personal jurisdiction
or to the

 

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laying of venue of any such ancillary suit, action or proceeding brought in any
court referred to in paragraph (c) (i) of this Section 7.08 and such parties
agree not to plead or claim the same.

Section 7.09. Reconciliation.

(a) In General. In the event that the Corporation and the Existing Stockholders
Representative are unable to resolve a disagreement with respect to the matters
governed by Sections 2.03, 4.02 and 6.02 within the relevant period designated
in this Agreement (or the amount of an Early Termination Payment in the case of
a breach to which Section 4.01(b) applies) (“Reconciliation Dispute”), the
Reconciliation Dispute shall be submitted for determination to a nationally
recognized expert (the “Expert”) in the particular area of disagreement mutually
acceptable to both parties. The Expert shall be a partner in a nationally
recognized accounting firm or a law firm (other than the Advisory Firm) or, in
the case of a dispute regarding the determination of the fair value of the
rights of the Existing Stockholders Representative under this Agreement, a
partner in a nationally recognized valuation firm (which may be an accounting
firm other than the Advisory Firm), and the Expert shall not, and the firm that
employs the Expert shall not, have any material relationship with the
Corporation or any of the Existing Stockholders or other actual or potential
conflict of interest. If the parties are unable to agree on an Expert within 15
days of receipt by the respondent(s) of written notice of a Reconciliation
Dispute, the Expert shall be appointed by the International Institute for
Conflict Prevention and Resolution. The Expert shall resolve any matter relating
to the Early Termination Schedule or an amendment thereto within 30 calendar
days and shall resolve any matter relating to a Tax Benefit Schedule or an
amendment thereto within 15 calendar days or as soon thereafter as is reasonably
practicable, in each case after the matter has been submitted to the Expert for
resolution. Notwithstanding the preceding sentence, if the matter is not
resolved before any payment that is the subject of a disagreement is due or any
Tax Return reflecting the subject of a disagreement is due, such payment shall
be made on the date prescribed by this Agreement and such Tax Return may be
filed as prepared by the Corporation or the relevant Taxable Entity, subject to
adjustment or amendment upon resolution. The costs and expenses relating to the
engagement of such Expert or amending any Tax Return shall be borne by the
Corporation, except as provided in the next sentence. Each of the Corporation
and the Existing Stockholders shall bear their own costs and expenses of such
proceeding. Any dispute as to whether a dispute is a Reconciliation Dispute
within the meaning of this Section 7.09 shall be decided by the Expert. The
Expert shall finally determine any Reconciliation Dispute and the determinations
of the Expert pursuant to this Section 7.09 shall be binding on the Corporation
and the Existing Stockholders and may be entered and enforced in any court
having jurisdiction.

(b) Income Projections for Early Termination Payments. Notwithstanding the
provisions of Section 7.09(a), solely with respect to disagreements regarding
the computation of an Early Termination Payment or Divestiture Acceleration
Payment that relates to the taxable income projections described in clause
(i) of the definition of “Valuation Assumptions,” the Corporation and the
Existing Stockholders (through the Existing Stockholders Representative) shall
each submit the Reconciliation Dispute for determination to an Expert in the
area of valuation services. Based on the income projections of such Experts, if
the higher of the resulting Early Termination Payment or Divestiture
Acceleration Payment computations does not exceed 110% of the lower, then the
Early Termination Payment or Divestiture Acceleration Payment

 

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shall be the average of such two amounts. If the higher of the Early Termination
Payment or Divestiture Acceleration Payment computations is more than 110% of
the lower, then the two Experts shall, within 20 days from such determination,
select a third Expert and shall notify the Corporation and the Existing Holders
of such selection. If the Early Termination Payment or Divestiture Acceleration
Payment computed by the third Expert is equal to the average of the first two
Early Termination Payment or Divestiture Acceleration Payment computations, then
the Early Termination Payment or Divestiture Acceleration Payment shall be such
average. If the third Early Termination Payment or Divestiture Acceleration
Payment computation is higher than the average of the first two computations,
then the Early Termination Payment or the Divestiture Acceleration Payment shall
be the average of such third computation and the higher of the first two
computations; provided, that if such average exceeds 110% of the higher of the
first two computations, then the Early Termination Payment or Divestiture
Acceleration Payment shall be 110% of the higher of the first two computations.
If the third Early Termination Payment or Divestiture Acceleration Payment
computation is lower than the average of the first two computations, then the
Early Termination Payment or Divestiture Acceleration Payment shall be the
average of such third computation and the lower of the first two computations;
provided, that if such average is less than 90% of the lower of the first two
computations, then the Early Termination Payment or Divestiture Acceleration
Payment shall be 90% of the lower of the first two computations.

Section 7.10. Withholding. The Corporation shall be entitled to deduct and
withhold from any payment payable pursuant to this Agreement such amounts as the
Corporation is required to deduct and withhold with respect to the making of
such payment under the Code, or any provision of state, local or foreign tax
law, provided that the Corporation (i) gives 10 days advance written notice of
its intention to make such withholding to the Existing Stockholders
Representative, (ii) identifies the legal basis requiring such withholding and
(iii) gives the Existing Stockholders Representative an opportunity to establish
that such withholding is not legally required. To the extent that amounts are so
withheld and paid over to the appropriate Taxing Authority by the Corporation,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the Existing Stockholders. The Corporation shall provide
evidence of such payment to the Existing Stockholders (through the Existing
Stockholders Representative) to the extent that such evidence is available.

Section 7.11. Affiliated Corporations; Admission of the Corporation into a
Consolidated Group; Transfers of Corporate Assets.

(a) If the Corporation is or becomes a member of an affiliated or consolidated
group of corporations that files a consolidated income tax return pursuant to
Sections 1501 et seq. of the Code (other than if the Corporation becomes a
member of such a group as a result of a Change of Control, in which case the
provisions of Article IV shall control), then: (i) the provisions of this
Agreement shall be applied with respect to the group as a whole; and (ii) Annual
Tax Payments shall be computed with reference to the consolidated taxable income
of the group as a whole.

(b) If any Taxable Entity is or becomes a member of a Combined Taxation Group
for purposes of state or local income Taxes (other than if a Taxable Entity
becomes a member of such a group as a result of a Change of Control or
Divestiture, in which cases the

 

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provisions of Article IV shall control), then: (i) the provisions of this
Agreement shall be applied with respect to the group as a whole; and (ii) Annual
Tax Payments shall be computed with reference to the combined taxable income of
the group as a whole.

(c) If any Person, the income of which is included in the income of any Taxable
Entity’s Combined Taxation Group, transfers one or more assets to a corporation
or any Person treated as such for Tax purposes, the income of which is not
included in such Combined Taxation Group for purposes of calculating the amount
of any Annual Tax Payment (e.g., calculating the gross income of a Taxable
Entity’s Combined Taxation Group and determining the Realized Tax Benefit) due
hereunder, such Person shall be treated as having disposed of such asset in a
fully taxable transaction on the date of such transfer. The consideration deemed
to be received by such entity shall be equal to the fair market value of the
transferred asset, plus (i) the amount of debt to which such asset is subject,
in the case of a transfer of an encumbered asset or (ii) the amount of debt
allocated to such asset, in the case of a transfer of a partnership interest.

Section 7.12. Confidentiality. (a) Each Existing Stockholder (through the
Existing Stockholders Representative) and each of its assignees acknowledges and
agrees that the information of the Corporation is confidential and, except in
the course of performing any duties as necessary for the Corporation and its
Affiliates, as required by law or legal process or to enforce the terms of this
Agreement, shall keep and retain in the strictest confidence and not disclose to
any Person all confidential matters of the Corporation or the Existing
Stockholders acquired pursuant to this Agreement. This Section 7.12 shall not
apply to (i) any information that has been made publicly available by the
Corporation or any of its Affiliates, becomes publicly available (except as a
result of an act of any Existing Stockholder in violation of this Agreement) or
is generally known to the business community; and (ii) the disclosure of
information to the extent necessary for any Existing Stockholder to prepare and
file its Tax returns, to respond to any inquiries regarding the same from any
Taxing Authority or to prosecute or defend any action, proceeding or audit by
any taxing authority with respect to such returns.

(b) If the Existing Stockholders Representative or any of its assignees commits
a breach, or threatens to commit a breach, of any of the provisions of this
Section 7.12, the Corporation shall have the right and remedy to have the
provisions of this Section 7.12 specifically enforced by injunctive relief or
otherwise by any court of competent jurisdiction without the need to post any
bond or other security, it being acknowledged and agreed that any such breach or
threatened breach shall cause irreparable injury to the Corporation or any of
its Subsidiaries and the accounts and funds managed by the Corporation and that
money damages alone shall not provide an adequate remedy to such Persons. Such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available at law or in equity.

Section 7.13. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

Section 7.14. Appointment of Existing Stockholders Representative.

(a) Appointment. Without further action of any of the Corporation, the Existing
Stockholders Representative or any Existing Stockholder, and as partial
consideration of the benefits conferred by this Agreement, the Existing
Stockholders Representative is hereby

 

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irrevocably constituted and appointed, with full power of substitution, to act
in the name, place and stead of each Existing Stockholder with respect to the
taking by the Existing Stockholders Representative of any and all actions and
the making of any decisions required or permitted to be taken by the Existing
Stockholders Representatives under this Agreement (and any potential agreement
with the Corporation to terminate this Agreement earlier than such time as is
provided in Section 4.01 provided that (for the absence of doubt, except in the
case of a termination covered by Section 4.01(e)) any payment made by the
Corporation upon such an early termination shall be paid to each Existing
Stockholder based on such Existing Stockholder’s Ownership Percentage). The
power of attorney granted herein is coupled with an interest and is irrevocable
and may be delegated by the Existing Stockholders Representatives. No bond shall
be required of the Existing Stockholders Representatives, and the Existing
Stockholders Representatives shall receive no compensation for its services.

(b) Expenses. If at any time the Existing Stockholders Representative shall
incur out of pocket expenses in connection with the exercise of its duties
hereunder, upon written notice to the Corporation from the Existing Stockholders
Representative of documented costs and expenses (including fees and
disbursements of counsel and accountants) incurred by the Existing Stockholders
Representative in connection with the performance of its rights or obligations
under this Agreement and the taking of any and all actions in connection
therewith, the Corporation shall reduce any future payments (if any) due to the
Existing Stockholders hereunder pro rata (based on their respective Ownership
Percentages in the Corporation) by the amount of such expenses which it shall
instead remit directly to the Existing Stockholders Representative. In
connection with the performance of its rights and obligations under this
Agreement and the taking of any and all actions in connection therewith, the
Existing Stockholders Representative shall not be required to expend any of its
own funds (though, for the avoidance of doubt, it may do so at any time and from
time to time in its sole discretion).

(c) Limitation on Liability. The Existing Stockholders Representative shall not
be liable to any Existing Stockholder for any act of the Existing Stockholders
Representative arising out of or in connection with the acceptance or
administration of its duties under this Agreement, except to the extent any
liability, loss, damage, penalty, fine, cost or expense is actually incurred by
such Existing Stockholder as a proximate result of the gross negligence, bad
faith or willful misconduct of the Existing Stockholders Representative (it
being understood that any act done or omitted pursuant to the advice of legal
counsel shall be conclusive evidence of such good faith and reasonable
judgment). The Existing Stockholders Representative shall not be liable for, and
shall be indemnified by the Existing Stockholders (on a several but not joint
basis) for, any liability, loss, damage, penalty or fine incurred by the
Existing Stockholders Representative (and any cost or expense incurred by the
Existing Stockholders Representative in connection therewith and herewith and
not previously reimbursed pursuant to subsection (b) above) arising out of or in
connection with the acceptance or administration of its duties under this
Agreement, except to the extent that any such liability, loss, damage, penalty,
fine, cost or expense is the proximate result of the gross negligence, bad faith
or willful misconduct of the Existing Stockholders Representative (it being
understood that any act done or omitted pursuant to the advice of legal counsel
shall be conclusive evidence of such good faith and reasonable judgment);
provided, however, in no event shall any Existing Stockholder be obligated to
indemnify the Existing Stockholders Representative hereunder for any liability,
loss, damage, penalty, fine, cost or expense to the extent (and only to the
extent) that the aggregate amount of

 

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all liabilities, losses, damages, penalties, fines, costs and expenses
indemnified by such Existing Stockholder hereunder is or would be in excess of
the aggregate payments under this Agreement actually remitted to such Existing
Stockholder. Each Existing Stockholder’s receipt of any and all benefits to
which such Existing Stockholder is entitled under this Agreement, if any, is
conditioned upon and subject to such Existing Stockholder’s acceptance of all
obligations, including the obligations of this Section 7.14(c), applicable to
such Existing Stockholder under this Agreement.

(d) Actions of the Existing Stockholders Representative. Any decision, act,
consent or instruction of the Existing Stockholders Representative shall
constitute a decision of all Existing Stockholders and shall be final, binding
and conclusive upon each Existing Stockholder, and the Corporation may rely upon
any decision, act, consent or instruction of the Existing Stockholders
Representative as being the decision, act, consent or instruction of each
Existing Stockholder. The Corporation is hereby relieved from any liability to
any Person for any acts done by the Corporation in accordance with any such
decision, act, consent or instruction of the Existing Stockholders
Representative.

Section 7.15. Conflicting Agreements. Other than with respect to the existing
agreements and indentures set forth on Exhibit B to this Agreement as in effect
on the date hereof governing the terms of the Corporation’s and its
Subsidiaries’ outstanding indebtedness or agreements and indentures expressly
consented to by the Existing Stockholder Representative, the Corporation shall
not, and shall cause its Subsidiaries to not, enter into any agreement or
indenture or any amendment or other modification to any agreement or indenture
(including, in each case, in connection with any refinancing) that would,
directly or indirectly, restrict or otherwise encumber (or in the case of
amendments or other modifications, further restrict or encumber) its ability to
make payments under this Agreement in accordance with its terms, including any
agreement that would, directly or indirectly, restrict or otherwise encumber (or
in the case of amendments or other modifications, further restrict or encumber)
the ability of the Corporation’s Subsidiaries to upstream cash (by dividend or
loan) to the Corporation to fund amounts payable by the Corporation under this
Agreement.

[Signatures pages follow]

 

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IN WITNESS WHEREOF, the Corporation and the Existing Stockholders Representative
have duly executed this Agreement as of the date first written above.

 

VWR CORPORATION By:   /s/ Gregory L. Cowan Name:   Gregory L. Cowan Title:  
Senior Vice President and Chief Financial Officer

 

VARIETAL DISTRIBUTION HOLDINGS, LLC, as Existing Stockholders Representative By:
  /s/ Scott K. Baker Name:   Scott K. Baker Title:   Assistant Secretary

 

Signature Page to Income Tax Receivable Agreement

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EXHIBIT A

Existing Stockholders

Varietal Distribution Holdings, LLC

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EXHIBIT B

Existing Agreements Governing Indebtedness

 

1. Indenture, dated as of June 29, 2007, by and among VWR Funding, Inc. (as
successor by merger to Varietal Distribution Merger Sub, Inc., a Delaware
corporation), the Guarantors (as defined therein) from time to time parties
thereto, and Law Debenture Trust Company of New York, as Trustee, as amended
through October 7, 2014, relating to 10.75% senior subordinated notes due 2017.

 

2. Credit Agreement, dated as of June 29, 2007, among VWR Funding, Inc. (as
successor by merger to Varietal Distribution Merger Sub, Inc., a Delaware
corporation), each of the Foreign Subsidiary Borrowers (as defined therein) from
time to time party thereto, the financial institutions from time to time party
thereto as Lenders (as defined therein), Bank of America, N.A., as
Administrative Agent and Collateral Agent for the Lenders, as amended through
October 7, 2014.

 

3. Receivable Purchase Agreement, dated as of November 4, 2011, among VWR
Receivables Funding, LLC, as Seller, VWR International, LLC, as Servicer, the
various Conduit Purchasers (as defined therein) from time to time party thereto,
the various Related Committed Purchasers (as defined therein) from time to time
party thereto, the various Purchaser Agents (as defined therein) from time to
time party thereto, the various LC Participants (as defined therein) from time
to time party thereto and PNC Bank, National Association, as Administrator and
LC Bank, as amended through October 7, 2014, and the Transaction Documents (as
defined therein).

 

4. Indenture, dated as of September 4, 2012, by and among VWR Funding, Inc., the
Guarantors (as defined therein) from time to time parties thereto, and Law
Debenture Trust Company of New York, as Trustee, as amended through October 7,
2014, relating to 7.25% senior notes due 2017.