AMENDED AND RESTATED WARRANT AGREEMENT dated as of January 8, 1998
between OUTSOURCING SERVICES GROUP, INC., a company duly organized and
validly existing under the laws of the State of Delaware (the "Issuer"),
and Chase Manhattan Capital, L.P. (the "Investor") .
WHEREAS, the Issuer, the Subsidiary Guarantors listed on the
signature pages thereof and The Chase Manhattan Bank, N.A., are parties to
an Amended and Restated Senior Subordinated Loan Agreement dated as of June
30, 1997, providing, subject to the terms and conditions thereof, for
senior subordinated notes of the Issuer in an aggregate original principal
amount of $6,000,000 to be issued to The Chase Manhattan Bank and such
notes are being paid concurrently herewith.
WHEREAS, the Investor currently holds warrants for 80,883 shares of
common stock of the Issuer.
WHEREAS, the Company is currently refinancing its senior debt and
expects to issue high-yield notes, and wishes to modify the warrants in
connection therewith.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; Accounting Terms and Determinations.
1.01 Definitions. As used herein, the following terms shall have the
following meanings (all terms defined in this Section 1 or in other
provisions of this Agreement in the singular to have the same meanings when
used in the plural and vice versa):
"Accruing Liability" shall have the meaning assigned to such term in
Section 10-02(c).
"Additional Common Stock" shall mean all shares of Common Stock
issued or sold by the Issuer on or after the date hereof, other than
Excluded Securities.
"Affiliate" shall mean, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Applicable Disposition" shall mean any sale, transfer or other
disposition, prior to the date of a Qualified IPO, by a Principal
Shareholder or any Affiliate of such Principal Shareholder of Common Stock
representing in excess of 10% the aggregate amount of Common Stock
beneficially owned by such Principal Shareholder and its Affiliates.
"Board" shall mean the Board of Directors of the Issuer.
"Business Day" shall mean any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to remain closed.
"Call Notice" shall have the meaning assigned to such term in Section
11.01(b).
"Call Notice Date" shall mean the date on which a Call Notice shall
be received by the Holders.
"Call Price Per Unit" shall mean, as at any date, (a) Fair Market
Value as of such date divided by (b) the number of shares of Common Stock
outstanding on such date on a fully diluted basis.
"Call Right" shall mean the right of the Issuer to purchase Warrants
and Warrant Stock pursuant to, and in accordance with, Section 11.01.
"Closing Date" shall mean January 8, 1998
"Commission" shall mean the Securities and Exchange Commission or any
other similar or successor agency of the Federal government administering
the Securities Act and/or the Exchange Act.
"Common Stock" shall mean the Common Stock of the Issuer, par value
$0.001 per share, or any other common stock or other securities receivable
thereon, or into which the Common Stock is convertible or exchangeable, as
a result of any recapitalization, reclassification, merger or consolidation
of, or deposition of assets by, the Issuer.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract
or otherwise. "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Convertible Securities" shall mean evidences of indebtedness,
interests or other securities or rights which are exchangeable for or
exercisable or convertible into shares of Common Stock either immediately or
pon the arrival of a specified date or the occurrence of a specified event.
"Date of Issuance" shall have the meaning assigned to such term in
Section 14 hereof.
"Demand Registration" shall have the meaning assigned to such term in
Section 7.01 hereof.
"Election Notice" shall have the meaning assigned to such term in
Section 14 hereof.
"Election Period" shall have the meaning assigned to such term in
Section 14 hereof.
"Equity Securities" means Voting Securities, Convertible Securities
and Rights to Purchase Voting Securities.
"Excluded Securities" shall mean (a) shares of Common Stock issued or
issuable upon exercise of any options or warrants and other securities
(including options and warrants) issued to employees, consultants,
advisors, officers and directors, or (b) securities issued in connection
with any acquisition or merger.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"Exercise Price" shall have the meaning assigned to such term in the
form of Warrant attached as Annex 1 hereto.
"Expiration Date" shall have the meaning assigned to such term in
form of the Warrant attached as Annex 1 hereto.
"Fair Market Value" shall mean, as at any Put Notice Date, Call
Notice Date or any other date specified herein, as the case may be (i) if
there is not a public market for the Common Stock, the price for which all
the outstanding shares of Common Stock (on a fully diluted basis, assuming
receipt of applicable consideration for any conversion, exchange or
exercise of any Convertible Securities or Options which are exchangeable
for or convertible or exercisable into shares of Common Stock unless they
are Out of the Money) could be sold in an arm's length transaction to a
third party which is not an Affiliate in a sale conducted in an orderly
manner with a reasonable time for conducting the same, treating the Issuer
and its Subsidiaries as a going concern and without regard to the lack of
liquidity of the Common Stock due to any restrictions contained in this
Agreement or otherwise or any discount for minority interests and assuming
the conversion or exchange of all securities then outstanding which are
convertible into or exchangeable for Common Stock and the exercise of all
rights and warrants (including the Warrants) then outstanding and
exercisable to purchase shares of Common Stock or securities convertible
into or exchangeable for shares of Common Stock, or (ii) if there shall be
a public market for the Common Stock, the average of the daily market
prices for each day during the 30 consecutive trading days commencing 45
Business Days before such date as of which such a price can be established
in the manner set forth below. The market price for each such Business Day
shall be the last sale price on such day as reported in the Consolidated
Last Sale Reporting System or as quoted in the National Association of
Securities Dealers Automated Quotation System, or if such last sale price
is not available, the average of the closing bid and asked prices as
reported in either such system, or in any other case the higher bid price
quoted for such day as reported by The Wall Street Journal and the National
Quotation Bureau pink sheets.
If the Fair Market Value is being determined in connection with the
exercise of a Put Right, within 15 days after the applicable Put Notice
Date, the Issuer and the Holder exercising such Put Right shall each
designate a representative and such representatives will meet and use their
best efforts to reach an agreement on the Fair Market Value. If the Fair
Market Value is being determined in connection with the exercise by the
Issuer of a Call Right, within 15 days after the applicable Call Notice
Date, the Issuer and the Majority Warrant Stock Holders shall each
designate a representative and such representatives will meet and use their
best efforts to reach an agreement on the Fair Market Value.
If the representatives referred to in the preceding paragraph are
unable to reach such agreement within 15 days after the date on which the
later of the two representatives are designated, then (A) the holder
exercising its Put Right or the Majority Warrant Stock Holders, as the case
may be, shall immediately designate one Independent Appraiser; (B) the
Issuer shall immediately designate one Independent Appraiser; (C) the two
Independent Appraisers so selected shall, within 15 days after the date on
which the later of the two Independent Appraisers are appointed, determine
independently the Fair Market Value using the parameters established in the
first paragraph of this definition; (D) if the lesser of the two appraised
values exceeds or is equal to 90% of the other appraised value, then the
Fair Market Value will be the average of the two, which average amount
shall be conclusive and binding upon all the applicable parties; (E) if the
lesser of the two appraised values is less than 90% of the other appraised
value, then the two appraisers shall, within 15 days of the date of the
later of the two appraisals appoint a third Independent Appraiser; and (F)
the third Independent Appraiser so selected shall, within 15 days of its
appointment, determine independently the Fair Market Value (which shall be
an amount within the range established by the other two appraisal values)
using the parameters established in the first paragraph of this definition,
which determination shall be conclusive and binding upon all the applicable
parties.
The Issuer will provide each Independent Appraiser with all
information about the Issuer and its Subsidiaries which such Independent
Appraiser reasonably deems necessary for determining the Fair Market Value.
The fees and expenses of the appraisal process (including those of the
Independent Appraisers) will be paid by the Issuer. The Issuer may require
that the Independent Appraisers keep confidential any non-public
information received as a result of this paragraph pursuant to reasonable
confidentiality arrangements.
"Financing" shall mean the borrowing of money by the Issuer
(including in connection with any refinancing of existing indebtedness for
borrowed money of the Issuer), the sale or issuance of Additional Common
Stock, a recapitalization of the Issuer, a revaluation of the Issuer's
assets (to the extent permitted under applicable law and GAAP), transfers
by the Issuer from its capital to its surplus accounts, effecting the sale
of the Warrants and/or the Warrant Stock required to be purchased by the
Issuer under Section 10 to one or more third parties or any other
transaction (other than a sale of a majority of the assets of the Issuer)
pursuant to which the Issuer makes available funds in an amount sufficient
to satisfy in cash all of its obligations under Section 10.
"GAAP" shall mean generally accepted accounting principles,
consistently applied throughout the specified period.
"Go-Along Notice" shall have the meaning assigned to such term in
Section 9.02.
"Go-Along Sale" shall mean the sale, transfer or other disposition by
a Principal Shareholder and its Affiliates at any time prior to a Qualified
IPO of 50% or more of the Common Stock and other equity interests in the
Issuer beneficially owned by such Principal Shareholder and its Affiliates
in a bona fide arm's length transaction to or with a Third Party Purchaser
for consideration consisting solely of cash and/or marketable securities.
"Go-Along Seller" shall have the meaning assigned to such term in
Section 9.01.
"Governmental Authority" shall mean the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory, monetary or administrative
powers or functions of or pertaining to government.
"Holder" shall mean any Person who acquires Warrants or Warrant Stock
pursuant to the provisions of this Agreement, including any transferees of
Warrants or Warrant Stock; provided, however, that a holder of Warrant
Stock purchased pursuant to an effective registration statement or pursuant
to Rule 144 shall not be deemed a Holder.
"Include" and "including" shall be construed as if followed by the
phrase "without being limited to".
"Indebtedness" means with respect to any Person without duplication,
(i) all indebtedness, obligations and liabilities of such Person for
borrowed money, (ii) all indebtedness, obligations and liabilities of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all capitalized lease obligations of such Person, assumed as the
deferred purchase price of property, all conditional sale obligations and
all indebtedness, obligations and liabilities under any title retention
agreement (but excluding trade accounts payable and other accrued
liabilities arising in the ordinary course of business that are not overdue
by 90 days or more or are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted), (v) all
indebtedness, obligations and liabilities for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction, (vi) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (i) through (v) above and clause (viii)
below, (vii) all indebtedness, obligations and liabilities of any other
Person of the type referred to in clauses (i) through (vi) which are
secured by any lien on any property or asset of such Person, the amount of
such Indebtedness being deemed to be the lesser of the fair market value of
such property or asset or the amount of the Indebtedness so secured, and
(viii) all indebtedness, obligations and liabilities under currency
agreements and interest swap agreements of such Person.
"Independent Appraiser" shall mean an appraiser which is a recognized
independent expert (including any Investment Banking Firm) experienced in
valuing businesses similar or related to the principal business of the
Issuer and its Subsidiaries.
"Investment Banking Firm" shall mean a nationally recognized
investment banking firm.
"Investor" shall have the meaning assigned to such term in the
preamble of this Agreement.
"Issue Price" shall have the meaning assigned to such term in Section
14.
"Issuer" shall have the meaning assigned to such term in the preamble
of this Agreement.
"Kolmar Acquisition" shall mean Issuer's acquisition of the issued
and outstanding shares of Kolmar Laboratories, Inc. and certain assets
owned by CCL Industries Inc., an indirect parent of Kolmar Laboratories,
Inc. pursuant to the Share and Asset Purchase Agreement dated October 28,
1998, as amended.
"Lien" shall mean, with respect to any asset, any mortgage, lien,
pledge, charge,
security interest or encumbrance of any kind in respect of such asset. For
purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or
other title retention agreement relating to such asset.
"Majority Warrant Stock Holders" shall mean the Holders of a majority
of the Warrant Stock issued or issuable upon exercise of the Warrants. For
purposes of giving notices, waivers and consents hereunder, Holders of
Warrants shall be deemed holders of the Warrant Stock issued on exercise
thereof.
"NASDAQ" shall mean the National Association of Securities Dealers
automated quotation system.
"Notice of Issuance" shall have the meaning assigned to such term in
Section 14.
"Option Plan" shall mean an Employee Stock Option Plan of the Issuer
approved by each of the Issuer's non-employee directors.
"Option" shall mean any warrant, option or other right to subscribe
for or purchase shares of Common Stock.
"Other Equity Documents" shall mean the Option Plan, the Stockholders
Agreement, the certificate of incorporation of the Issuer, the by-laws of
the Issuer and any other instrument or document of organization or
governance of the Issuer.
"Out of the Money" shall mean (a) in the case of an Option, that the
fair market value of shares of Common Stock which the holder thereof is
entitled to purchase or subscribe for is less than the exercise price of
such Option and (b) in the case of a Convertible Security, that the
quotient resulting from dividing the fair market value of such Convertible
Security by the number of shares of Common Stock into or for which such
Convertible Security is exercisable, convertible or exchangeable is greater
than the fair market value of a share of Common Stock.
"Person" shall mean any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Principal Shareholder" shall mean any of ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ASC
Investment Partners, L.P., The ▇▇▇▇▇▇ + ▇▇▇▇▇▇ Investment Partnership, L.P.
and HarbourVest Partners IV-Direct Fund, L.P.
"Put Closing Date" shall have the meaning assigned to such term in
Section 10.02(a).
"Put Notice" shall have the meaning assigned to such term in Section
10.01(b).
"Put Notice Date" shall mean, with respect to a Put Notice, the date
on which such Put Notice is given or deemed given, as the case may be, to
the Issuer.
"Put Postponement" shall have the meaning assigned to such term in
Section 10.02(c).
"Put Price Per Unit" shall mean, as at any date, (a) the Fair Market
Value as of such date divided by (b) the number of shares of Common Stock
outstanding on such date on a fully diluted basis.
"Put Reactivation Date" shall have the meaning assigned to such term
in Section 10.02(c).
"Put Response Notice" shall have the meaning assigned to such term in
Section 10.02(b).
"Put Right" shall mean the right of a Holder to require the Issuer to
purchase Warrants and Warrant Stock pursuant to, and in accordance with,
Section 10.
"Put Withdrawal Notice" shall have the meaning assigned to
such term in Section 10.02(b).
"Qualified IPO" shall mean the Issuer's first firm
commitment underwritten public offering involving the sale of Common Stock
of the Issuer for an aggregate purchase price of at least $10,000,000
(before the payment of underwriting discounts and commissions), pursuant to
an effective registration statement under the Securities Act.
"Relevant Majority Holders" shall have the meaning
assigned to such term in the definition of "Fair Market Value" in this
Section 1.
"Restricted Certificate" shall mean a certificate for
Warrant Stock or Warrants bearing or required to bear the restrictive
legend set forth in Section 4.03.
"Restricted Securities" shall mean Restricted Warrant
Stock and Restricted Warrants.
"Restricted Warrant Stock" shall mean Warrant Stock
evidenced by a Restricted Certificate.
"Restricted Warrants" shall mean Warrants evidenced by a
Restricted Certificate.
"Rule 144" shall mean Rule 144 promulgated by the
Commission under the Securities Act (or any successor or similar rule then
in force).
"Rule 144A" shall mean Rule 144A promulgated by the
Commission under the Securities Act (or any successor or similar rule then
in force).
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar Federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"Seller" shall have the meaning assigned to such term in
Section 7.01 hereof.
"Seller Notice" shall have the meaning assigned to such
term in Section 7.01 hereof.
"Senior Debt" shall mean the principal of, premium, if
any, interest (including any interest accruing subsequent to the filing of
a petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law) fees and expenses on any Indebtedness of the Issuer,
whether outstanding on the Closing Date or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior
in right of payment to the Indebtedness incurred under the Senior
Subordinated Credit Agreement. Without limiting the generality of the
foregoing, "Senior Debt" shall also include the principal of, premium, if
any, interest (including any interest accruing subsequent to the filing of
a petition of bankruptcy at the rate provided for in the documentation with
respect thereof, whether or not such interest is an allowed claim under
applicable law) on, and all other amounts owing in respect of, (w) all
monetary obligations of every nature of the Issuer under the Senior Credit
Agreement and the Senior Subordinated Credit Agreement, including, without
limitation, obligations to pay principal and interest, reimbursement
obligations under letters of credit, fees, expenses and indemnities,
(y) all interest swap obligations and (z) all obligations under currency
agreements, in each case whether outstanding on the Closing Date or
thereafter incurred. Notwithstanding the foregoing, "Senior Debt" shall
not include (i) any Indebtedness of the Issuer to a Subsidiary of the
Issuer, (ii) Indebtedness to, or guaranteed on behalf of, any director,
officer or employee of the Issuer or any Subsidiary of the Issuer
(including, without limitation, amounts owed for compensation),
(iii) Indebtedness to trade creditors and other amounts incurred in
connection with obtaining goods, materials or services, (iv) any liability
for federal, state, local or other taxes owed or owing by the Issuer,
(v) Indebtedness which, when incurred and without respect to any election
under Section 1111(b) of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, is without recourse
to the Issuer, (vi) Indebtedness incurred in violation of the Senior Credit
Agreement or the Senior Subordinated Credit Agreement.
"Senior Credit Agreement" shall mean the Credit Agreement
dated as of January __, 1998, between the Issuer, Guarantor, Piedmont
Laboratories, Inc. and Aerosol Services Company, Inc., as Initial
Borrowers, the lenders party thereto in their capacities as lenders
thereunder and BT Commercial Corporation, as agent, together with the
related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity time to time, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (provided that there is
no increase in the aggregate principal amount of Indebtedness, as in effect
at such time, of the Issuer and its Subsidiaries) or adding Subsidiaries of
the Issuer as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"Senior Credit Subordinated Credit Agreement" shall mean
the Senior Subordinated Credit Agreement, dated as of January , 1998,
among the Issuer, as Borrower, Bankers Trust Company, as Agent, and the
Guarantors and Lenders party thereto, together with the related documents
thereto (including, without limitation, any guarantee agreements and
security documents), in each case as such agreements may be amended
(including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity time to time, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (specifically including
the documents governing any notes issued to refinance the Senior
Subordinated Credit Agreement,) or adding Subsidiaries of the Issuer as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement
and whether by the same or any other agent, lender or group of lenders.
"Shareholder" shall mean any Person who directly or
indirectly owns any shares of Common Stock (including Warrant Stock).
"Stock Unit" shall mean one share of Common Stock, as such
Common Stock is constituted on the date hereof, and thereafter shall mean
such number of shares (including any fractional shares) of Common Stock and
other securities, cash or other property as shall result from the
adjustments specified in Section 4.
"Stockholders Agreement" shall mean the Stockholder
Agreement, dated as of June 30, 1997, among the Investor, the Issuer and
certain shareholders of the Issuer, as it may hereafter be amended,
including by the Amendment to Stockholder Agreement dated as of January 8,
1998.
"Subsidiary" of a Person means (a) any corporation more
than 50% of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or indirectly, by
such Person or by one or more of its Subsidiaries or by such Person and one
or more of its Subsidiaries, or (b) any company, partnership, association,
joint venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall at the time
be so owned or controlled. Unless otherwise expressly provided, all
references herein to a "Subsidiary" shall mean a direct or indirect
Subsidiary of the Issuer.
"Tag-Along Sale" shall have the meaning assigned to such
term in Section 8.01.
"Tag-Along Seller" shall have the meaning assigned to such
term in Section 8.01.
"Third Party Purchaser" shall mean an entity not otherwise
an Affiliate of the Issuer or a Subsidiary or any of the Issuer's
Shareholders, which Person purchases Common Stock in a Go-Along Sale.
"Voting Securities" means the Common Stock and any other
securities of the Issuer of any kind or class having power generally to
vote for the election of directors;
"Rights to Purchase Voting Securities" means options and
rights issued by the Company whether presently exercisable or not) to
purchase Voting Securities or Convertible Voting Securities.
"Warrant Stock" shall mean all shares of Common Stock
issuable from time to time upon exercise of the Warrant.
"Warrant" and "Warrants" shall mean the Warrant originally
issued by the Issuer pursuant to this Agreement, evidencing rights to
purchase up to an aggregate of 80,883 Stock Units (which represents 6.0% of
the outstanding shares of Common Stock on a fully diluted basis on the date
hereof), and all Warrants issued upon transfer, division or combination of,
or in substitution for, any thereof.
1.02 Accounting Terms and Determinations. Except as
otherwise may be expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Holder
hereunder shall be prepared, in accordance with GAAP. All calculations made
for the purposes of determining compliance with the terms of this Agreement
shall (except as otherwise may be expressly provided herein) be made by
application of GAAP.
SECTION 2. Purchase and Sale of Warrant.
2.01 Authorization and Issuance of Warrant Stock and
Warrant. The Issuer has authorized: (a) the issuance of the Warrant
evidenced by the warrant certificate in the form of Annex 1; and (b) the
issuance of such number of shares of Common Stock as shall be necessary to
permit the Issuer to comply with its obligations to issue shares of Common
Stock pursuant to the Warrant.
2.02 Issuance of the Warrant. On the Closing Date:
(a) the Issuer shall confirm to the Investor the
validity of the Warrant;
(b) the Issuer shall deliver to the Investor a legal
opinion from counsel to the Issuer in form and substance satisfactory to
the Investor.
2.03 Purchase for Investor's Account. The Investor
represents and warrants to the Issuer as follows:
(a) The Investor purchased the Warrant for
investment for its own account, without a view to the distribution thereof,
all without prejudice, however, to the right of the Investor at any time,
in accordance with this Agreement, lawfully to sell or otherwise to dispose
of all or any part of the Warrant or the Warrant Stock held by it.
(b) The Investor is an "accredited investor" within
the meaning of Regulation D under the Securities Act.
2.04 Securities Act Compliance. The Investor understands
that the Issuer has not registered the Warrant or the Warrant Stock under
the Securities Act or applicable state securities laws, and the Investor
agrees that neither the Warrant nor the Warrant Stock shall be sold or
transferred or offered for sale or transfer without registration or
qualification under the Securities Act or applicable state securities laws
or the availability of an exemption therefrom, all as more fully provided
in Section 4.
SECTION 3. Representations and Warranties. The Issuer represents and
warrants as follows:
3.01 Existence; Qualification. Each of the Issuer and its
Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization. Each of the Issuer and
its Subsidiaries is duly qualified, licensed or admitted to do business and
is in good standing as a foreign corporation in every jurisdiction where
the failure to be so qualified would have a material adverse effect on the
business, financial condition, operations, assets, prospects, liabilities
or capitalization of the Issuer and its Subsidiaries taken as a whole and
has all requisite corporate power and authority to transact its business as
now conducted in all such jurisdictions.
3.02 No Breach. The execution, delivery and performance
of this Agreement and the Warrant by the Issuer and the consummation by it
of the transactions contemplated hereby and thereby will not (a) violate
the certificate of incorporation or by-laws or any other instrument or
document of organization or governance of the Issuer, (b) violate, or
result in a breach of or default under, any other material instrument or
agreement to which the Issuer is a party or is bound, (c) violate any
judgment, order, injunction, decree or award against or binding upon the
Issuer, (d) result in the creation of any material Lien upon any of the
properties or assets of the Issuer (other than as contemplated by the
Senior Credit Agreement), or (e) violate any law, rule or regulation
relating to the Issuer.
3.03 Corporate Action. The Issuer has all necessary
corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Warrant; the execution, delivery
and performance by the Issuer of this Agreement and the Warrant have been
duly authorized by all necessary action (including all Shareholder action)
on the part of the Issuer; this Agreement and the Warrant have been duly
executed and delivered by the Issuer and constitute the legal, valid and
binding obligations of the Issuer, enforceable against the Issuer in
accordance with their respective terms; the Warrant Stock initially covered
by the Warrant has been duly and validly authorized and reserved for
issuance and shall, when paid for, issued and delivered in accordance with
the Warrant, be duly and validly issued, fully paid and nonassessable and
free and clear of any Liens; and none of the Warrant Stock issued pursuant
to the terms hereof will be in violation of any preemptive rights of any
Shareholder.
3.04 Approvals. Except in connection with the
registration of the Warrant Stock pursuant to Section 7 and as required
under applicable California securities laws, no authorizations, approvals
or consents of, and no filings or registrations with, any Governmental
Authority or any other Person are necessary for the execution, delivery or
performance by the Issuer of this Agreement or the Warrant or for the
validity or enforceability thereof. Any such action required to be taken as
a condition to the execution and delivery of this Agreement, or the
execution, issuance and delivery of the Warrant, has been duly taken by all
such Governmental Authorities or other Persons, as the case may be.
3.05 Investment Company Act. The Issuer is not an
"investment company," or a company "controlled by" an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
3.06 Public Utility Holding Company Act. The Issuer is
not a "holding company," or an "affiliate" of a "holding company" or a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
3.07 Capitalization.
(a) On the date hereof, the total number of shares
of Common Stock that the Issuer has authority to issue is 6,000,000 of
which 1,267,174 are, and 3,360,174 immediately after the Kolmar
Acquisition, will be outstanding. Upon the issuance of the Warrant under
this Agreement, other than the Warrant and the Stockholders Agreement, the
Issuer did not have outstanding any Convertible Securities or Options
exercisable or convertible into or exchangeable for any interests or other
equity rights of the Issuer, nor did it have outstanding any agreements
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, any interests or equity
rights of the Issuer or Convertible Securities exercisable or convertible
into or exchangeable for any interests or equity rights of the Issuer,
except for options in favor of managers issued pursuant to an Option Plan.
(b) Other than the Other Equity Documents and this
Agreement and the documents pertaining to the Senior Subordinated Credit
Agreement, there is not in effect on the date hereof any agreement by the
Issuer pursuant to which any holders of equity securities of the Issuer
have a right to cause the Issuer to register such equity securities under
the Securities Act or any agreement to which the Issuer or (to its
knowledge) any of its Shareholders is a party relating to the voting,
transfer or sale of such equity securities.
(c) Except for the Stockholders Agreement, there is
not in effect on the date hereof any agreement by the Issuer or any of its
Shareholders which (i) restricts the transferability of the Warrant and/or
the Warrant Stock, except as provided in Sections 4 and 5, (ii) restricts
the transferability of the right of the Holder in this Agreement to any
transferee of all or a portion of the Holder's Warrant and/or Warrant
Stock, or (iii) requires any consent or other approval of any Person to the
exercise of the Warrant by the Holder or the issuance of Warrant Stock upon
such exercise.
3.08 Private Offering.
(a) Assuming the truth and accuracy of the
Investor's representations and warranties contained in Section 2.03, the
issuance and sale of the Warrant to the Investor hereunder are exempt from
the registration and prospectus delivery requirements of the Securities
Act.
(b) All equity interests of the Issuer heretofore issued
and sold by the Issuer were and all securities of the Issuer issued and
sold by the Issuer on the date hereof are being issued and sold in
accordance with, or were exempt from, the registration and prospectus
delivery requirements of the Securities Act.
3.09 Litigation.
(a) There is no action, suit, proceeding or
investigation pending or, to the best of the Issuer's knowledge after due
inquiry, threatened against the Issuer or any of its Subsidiaries before
any Governmental Authority seeking to enjoin the transactions contemplated
by this Agreement or the Warrant.
(b) There are no legal or arbitral proceedings or
any proceedings by or before any Governmental Authority, now pending or (to
the knowledge of the Issuer) threatened against the Issuer or any of its
Subsidiaries which, if adversely determined, is likely to have a material
adverse effect on the business, financial condition, operations, assets,
prospects, liabilities or capitalization of the Issuer and its Subsidiaries
taken as a whole which has not been described on the schedules to the
Senior Credit Agreement.
3.10 Brokers. All negotiations relative to this Agreement
and the transactions contemplated hereby have been carried out by the
Issuer directly with the Investor without the intervention of any Person on
behalf of the Issuer in such manner as to give rise to any valid claim by
any Person against the Investor or the Holder for a finder's fee, brokerage
commission or similar payment.
SECTION 4. Restrictions on Transferability.
4.01 Transfers Generally. Except as otherwise provided in
Section 5 and subject to the Issuer's consent, which shall not be
unreasonably withheld (as measured by the Stockholders Agreement), the
Restricted Securities shall be transferable only upon the conditions
specified in this Section 4 and in Section 7, which conditions are intended
to insure compliance with the provisions of the Securities Act and
applicable state securities laws in respect of the transfer of any
Restricted Securities.
4.02 Transfers of Restricted Securities Pursuant to
Registration Statements, Rule 144 and Rule 144A. The Restricted Securities
may be offered or sold by the Holder thereof pursuant to (a) an effective
registration statement under the Securities Act, (b) to the extent
applicable, Rule 144 or Rule 144A or (c) any other legally available means
of transfer.
4.03 Restrictive Legends. Unless and until otherwise
permitted by this Section 4, the certificate for the Warrant issued under
this Agreement, each certificate for any Warrants issued to any subsequent
transferee of any such certificate, each certificate for any Warrant Stock
issued upon exercise of any Warrant and each certificate for any Warrant
Stock issued to any subsequent transferee of any such certificate, shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THAT
CERTAIN AMENDED AND RESTATED WARRANT AGREEMENT DATED AS OF
JANUARY 8, 1998 (THE "WARRANT AGREEMENT"), BETWEEN
OUTSOURCING SERVICES GROUP, INC., A DELAWARE COMPANY (THE
"ISSUER"), AND CHASE MANHATTAN CAPITAL, L.P., AS THE
WARRANT AGREEMENT MAY BE MODIFIED AND SUPPLEMENTED AND IN
EFFECT FROM TIME TO TIME, AND NO TRANSFER OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL BE VALID
OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. A
COPY OF THE FORM OF THE WARRANT AGREEMENT IS ON FILE AND
MAY BE INSPECTED AT THE PRINCIPAL EXECUTIVE OFFICE OF THE
ISSUER. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF
THIS CERTIFICATE, AGREES TO BE BOUND BY THE PROVISIONS OF
THE WARRANT AGREEMENT."
4.04 Termination of Restrictions. All of the restrictions
imposed by this Section 4 upon the transferability of the Restricted
Securities shall cease and terminate as to any particular Restricted
Security when such Restricted Security shall have been effectively
registered under the Securities Act and applicable state securities laws
and sold by the Holder thereof in accordance with such registration or sold
under and pursuant to Rule 144 or is eligible to be sold under and pursuant
to paragraph (k) of Rule 144. Whenever the restrictions imposed by this
Section 4 shall terminate as to any Restricted Security as hereinabove
provided, the Holder thereof shall be entitled to receive from the Issuer,
without expense, a new certificate evidencing such Restricted Security not
bearing the restrictive legend otherwise required to be borne by a
certificate evidencing such Restricted Security.
SECTION 5. Dispositions of Securities.
5.01 Dispositions of Securities.
(a) Notwithstanding anything herein to the contrary,
no Investor may assign all or any portion of its rights under this
Agreement and the Warrant(s) held by such Investor if after giving effect
to such transfer there would be more than five holders of the Warrants.
Subject to the foregoing and to compliance with the Securities Act and the
Stockholders Agreement, applicable state securities laws and the
requirement as to placement of a legend on certificates for Restricted
Securities specified in Section 4.03, this Warrant and all rights hereunder
are transferable (subject to any restrictive legends hereon), in whole or
in part, upon surrender of this Warrant to the Issuer, together with a
written assignment of this Warrant duly executed by the Holder hereof or
such holder's agent or attorney. Such written assignment shall be in the
form of the Assignment Form attached as Annex 2 hereto. Upon such
surrender, and receipt by the Issuer of a written agreement (in form
reasonably satisfactory to the Issuer) of the assignee agreeing to be bound
by the Stockholders Agreement to the same extent that the Holder was so
bound, the Issuer shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denominations specified in
such instrument of assignment, and the original Warrant shall promptly be
canceled.
(b) The warrant may be exchanged for other Warrants
of the same series upon presentation to the Issuer, together with a written
notice specifying the denominations in which new Warrants are to be issued,
signed by the Holder hereof. The Issuer shall execute and deliver a new
Warrant or Warrants to the holder in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice. The Issuer shall
pay all expenses, taxes (including transfer taxes) and other charges
payable in connection with the preparation, issuance and delivery of the
Warrants, including any transfer or exchange thereof.
(c) The Issuer shall maintain books for the
registration and transfer of the Warrants, and shall allow each holder of
Warrants to inspect such books at such reasonable times as such holder
shall request.
SECTION 6. Adjustments.
6.01 Dividends, Distributions and Purchases.
(a) If at any time the Issuer shall pay any dividend
or make any other distribution to holders of its Common Stock of any cash,
evidence of indebtedness or other property of any nature whatsoever (other
than as provided in sections 6.02, 6.03(i)(A) and 6.04(i)(A) hereof), the
Issuer shall at the same time pay or distribute to each holder of Warrants
which are by their terms then exercisable (whether or not such holder
exercises such Warrants) the cash, evidence of indebtedness or other
property such holder would have been entitled to receive if such holder had
exercised such Warrants immediately prior to the record date for such
dividend or distribution.
(b) If at any time the Issuer shall propose to
purchase or redeem any shares of its Common Stock owned by any of its
Affiliates for cash, evidence of indebtedness or other property of any
nature whatsoever, the Issuer shall deliver to each holder of Warrants
which are by their terms then exercisable or shares of Warrant Stock a
notice of such proposed purchase or redemption, and each such holder shall,
at its option, have the right to require the Issuer to at the same time
purchase or redeem Warrants which are by their terms them exercisable and
shares of Warrant Stock owned by such holder, pro-rata based on the number
of shares of such other Common Stock to be so purchased or redeemed, on the
same terms and conditions as the proposed purchase or redemption of such
other Common Stock and for the same consideration per Warrant or share of
Warrant Stock, as the case may be, as is paid to the holders of such other
Common Stock for each share of Common Stock so redeemed or purchased,
minus, in the case of Warrants, the exercise price of the Warrants to be so
purchased or redeemed. Nothing in this Section 6.01(b) shall prohibit or
apply to repurchases of Common Stock from management shareholders in
compliance with and pursuant to the terms of the Stockholders Agreement.
6.02 Subdivisions and Combinations. If at any time the
Issuer shall
(a) take a record of the holders of its Common Stock
for the purpose of entitling them to receive a dividend or
other distribution of Common Stock;
(b) subdivide or reclassify its outstanding shares
of Common Stock into a larger number of shares of Common
Stock; or
(c) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock;
then immediately after the occurrence of any such event the number of
shares of Warrant Stock comprising a Stock Unit shall be adjusted so as to
equal the number of shares of Warrant Stock which such holder would have
been entitled to receive if such holder had exercised the Warrant
immediately prior to the occurrence of such event.
6.03 Issuance of Common Stock. In case at any time the
Issuer (i)(A) shall take a record of the holders of its Common Stock for
the purpose of entitling them to subscribe for or purchase shares of any
class or series of Common Stock or (B) shall otherwise sell or issue any
such securities and (ii) the consideration per share of Common Stock to be
paid upon such issuance or subscription is less than the Fair Market Value
per share of Common Stock on such record date, then the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted to be that number
determined by multiplying the number of shares of Warrant Stock comprising
a Stock Unit immediately prior to such record date by a fraction (not to be
less than one) (i) the numerator of which shall be equal to the product of
(A) the number of shares of Common Stock outstanding after giving effect to
such issuance, distribution, subscription or purchase and (B) the Fair
Market Value per share of Common Stock determined immediately before such
record date and (ii) the denominator of which shall be equal to the sum of
(A) the product of (1) the number of shares of Common Stock outstanding
immediately before such record date and (2) the Fair Market Value per share
of Common Stock determined immediately before such record date and (B) the
aggregate consideration to be received by the Issuer for the total number
of shares of Common Stock to be issued, distributed, subscribed for or
purchased. Aggregate consideration for purposes of the preceding clause (B)
shall be determined as follows: In case any shares of Common Stock shall be
issued or sold for cash, the consideration received therefor shall be
deemed to be the amount payable to the Issuer therefor, after deduction
therefrom of any expenses incurred or any underwriting commissions or
concessions or discounts or, in the case of a private placement thereof,
finders' fees or commissions paid or allowed by the Issuer in connection
therewith. In case any shares of Common Stock shall be issued or sold for a
consideration other than cash payable to the Issuer, the consideration
received therefor shall be deemed to be the fair value of such
consideration as determined by the Board, after deduction therefrom of any
expenses incurred or any underwriting commissions or concessions or
discounts paid or allowed by the Issuer in connection therewith. In case
any shares of Common Stock shall be issued in connection with any merger of
another corporation into the Issuer, the amount of consideration therefor
shall be deemed to be the fair value as determined by the Board of such
portion of the assets of such merged corporation as the Board shall
determine to be attributable to such shares of Common Stock.
The Fair Market Value per share of Common Stock shall in
each instance initially be determined by the Issuer in accordance with the
provisions of the definition of Fair Market Value in Section 1 hereof. The
Issuer shall notify the Holders of such determination. If the holders of a
majority in interest of the Warrants disagree with the determination of the
Issuer, the Issuer may appoint an Independent Appraiser to determine the
Fair Market Value per share of Common Stock and the determination of the
Independent Appraiser shall govern for purposes of determining the
adjustment pursuant to this Section. The Issuer shall notify each holder of
Warrants of the final determination of the Fair Market Value per share of
Common Stock. The Issuer shall pay the fees and expenses of the Independent
Appraiser.
6.04 Issuance of other Securities, Rights or Obligations.
In case at any time the Issuer (i)(A) shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or
purchase options to purchase or rights to subscribe for Common Stock or
securities directly or indirectly convertible into or exchangeable for
Common Stock (or options or rights with respect to such securities) or (B)
shall otherwise issue or sell any such options, rights or securities and
(ii) the consideration per share for which Common Stock is deliverable upon
exercise of such options or rights or conversion or exchange of such
securities (determined by dividing (x) the total amount received or
receivable by the Issuer in consideration of the issuance of or
subscription for such options, rights or securities, plus the minimum
aggregate amount of premiums (if any) payable to the Issuer upon such
exercise, conversion or exchange, by (y) the total maximum number of shares
of Common Stock necessary to effect the exercise, conversion or exchange of
all such options, rights or securities) shall be less than the Fair Market
Value per share of Common Stock on such record date or sale or issuance
date, as the case may be, then the number of shares of Warrant Stock
comprising a Stock Unit shall be adjusted to be that number determined by
multiplying the number of shares of Warrant Stock comprising a Stock Unit
immediately prior to such date by a fraction (not to be less than one) (i)
the numerator of which shall be equal to the product of (A) the total
maximum number of shares of Common Stock outstanding after giving effect to
the assumed exercise or conversion of all such options, rights or
securities and (B) the Fair Market Value per share of Common Stock
determined immediately before such date and (ii) the denominator of which
shall be equal to the sum of (A) the product of (1) the number of shares of
Common Stock outstanding immediately before such date and (2) the Fair
Market Value per share of the Common Stock determined immediately before
such date and (B) the aggregate consideration per share (determined as set
forth in subsection (ii)(x) and (y) above) for which Common Stock is
deliverable upon exercise conversion or exchange of such options, rights or
securities. Aggregate consideration for purposes of the preceding clause
(B) shall be determined as follows: In case any options, rights or
convertible or exchangeable securities (or options or rights with respect
thereto) shall be issued or sold, or exercisable, convertible or
exchangeable for cash, the consideration received therefor shall be deemed
to be the amount payable to the Issuer (determined as set forth in
subsection (ii)(x) and (y) above) therefor, after deduction therefrom of
any expenses incurred or any underwriting commissions or concessions or
discounts or, in the case of a private placement thereof, finders' fees or
commissions paid or allowed by the Issuer in connection therewith. In case
any such options, rights or securities shall be issued or sold, or
exercisable, convertible or exchangeable for a consideration other than
cash payable to the Issuer, the consideration received therefor (determined
as set forth in subsection (ii)(x) and (y) above) shall be deemed to be the
fair value of such consideration as determined by the Board, after
deduction therefrom of any expenses incurred or any underwriting
commissions or concessions or discounts paid or allowed by the Issuer in
connection therewith. In case any such options, rights or securities shall
be issued or sold, or exercisable, convertible or exchangeable in
connection with any merger of another corporation into the Issuer, the
amount of consideration therefor shall be deemed to be the fair value as
determined by the Board of such portion of the assets of such merged
corporation as the Board shall determine to be attributable to such
options, rights or securities.
The Fair Market Value per share of Common Stock shall be
determined as set forth in the last paragraph of section 6.03 hereof.
6.05 Superseding Adjustment. If, at any time after
any adjustment in the number of shares of Warrant Stock comprising a Stock
Unit shall have been made on the basis of the issuance of any options or
rights, or convertible or exchangeable securities (or options or rights
with respect to such securities) pursuant to section 6.04 hereof:
(a) the options or rights shall expire prior to
exercise or the right to convert or exchange any such securities shall
terminate; or
(b) the consideration per share for which shares of
Common Stock are issuable pursuant to the terms of such options or rights
or convertible or exchangeable securities shall be increased or decreased,
other than under or by reason of provisions designed to protect against
dilution;
such previous adjustment shall be rescinded and annulled. Thereupon, a
recomputation shall be made of the effect of such options or rights or
convertible or exchangeable securities with respect to shares of Common
Stock on the basis of
(A) treating the number of shares of Common Stock,
if any, theretofore actually issued or issuable pursuant
to the previous exercise, conversion or exchange of such
options, rights or securities as having been issued on
the date or dates of such exercise, conversion or
exchange and for the consideration actually received and
receivable therefore, and
(B) treating any such options, rights or securities
which then remain outstanding as having been
granted or issued immediately after the time of
such increase or decrease for the consideration
per share for which shares of Common Stock are
issuable upon exercise, conversion or exchange
of such options, rights or securities.
To the extent called for by the foregoing provisions of this Section 6.05
on the basis aforesaid, a new adjustment in the number of shares of Warrant
Stock comprising a Stock Unit shall be made, determined using the Fair
Market Value used at the time of the original determination, which new
adjustment shall supersede the previous adjustment so rescinded and
annulled. If the exercise, conversion or exchange price provided for in any
such option, right security shall decrease at any time under or by reason
of provisions designed to protect against dilution, then in the case of the
delivery of shares of Common Stock upon the exercise, conversion or
exchange of any such option, right or security, the Stock Unit purchasable
upon the exercise of a Warrant shall forthwith be adjusted in the manner
which would have obtained had the adjustment made upon issuance of such
option, right or security been made upon the basis of the issuance of (and
the aggregate consideration received for) the shares of Common Stock
delivered as aforesaid.
6.06 Other Provisions Applicable to Adjustments under this
Section 6. The following provisions shall be applicable to the making of
adjustments of the number of shares of Warrant Stock comprising a Stock
Unit:
(a) The sale or other disposition of any issued
shares of Common Stock owned or held by or for the account
of the Issuer shall be deemed to be an issuance thereof
for purposes of this Section 6, except for resales to
management employees of Common Stock purchased from
management employees pursuant to and in accordance with
the Stockholders Agreement.
(b) In computing adjustments under this Section 6,
fractional interests in Common Stock shall be taken into
account to the nearest one-thousandth of a share.
(c) If the Issuer shall take a record of the
holders of its Common Stock for the purpose of entitling
them to receive a dividend or distribution or subscription
or purchase rights and shall, thereafter and before the
distribution thereof, legally abandon its plan to pay or
deliver such dividend, distribution, subscription or
purchase rights, then thereafter no adjustment shall be
required by reason of the taking of such record and any
such adjustment previously made in respect thereof shall
be rescinded and annulled.
6.07 Merger, Consolidation or Disposition of Assets. If
the Issuer shall merge or consolidate with another corporation, or shall
sell, transfer or otherwise dispose of all or substantially all of its
assets to another corporation and pursuant to the terms of such merger,
consolidation or disposition of assets, cash, shares of common stock or
other securities of the successor or acquiring corporation, or property of
any nature is to be received by or distributed to the holders of Common
Stock of the Issuer, then each holder of Warrants which are by their terms
then exercisable shall, at such holder's election, have the right to
receive (whether or not such holder exercises such Warrants) the amount it
would have been entitled to receive if such holder had exercised such
Warrants immediately prior to the occurrence of such merger, consolidation
or disposition of assets, net of the exercise price of such Warrants, and
shall thereupon be deemed to have exercised such Warrants. In case of any
such merger, consolidation or disposition of assets in which the foregoing
election is not made, the successor or acquiring corporation (and any
affiliate thereof issuing securities) shall expressly assume the due and
punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Issuer and
all of the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of
the Board and reasonably acceptable to the holders of a majority in
interest of the Warrants) in order to provide for adjustments of Stock
Units which shall be as nearly equivalent as practicable to the adjustments
provided for in this Section. The foregoing provisions shall similarly
apply to successive mergers, consolidations and dispositions of assets.
6.08 Other Action Affecting Common Stock. If at any time
or from time to time the Issuer shall take any action affecting its Common
Stock, other than an action described in any of the foregoing subsections
of this Section 6 or an action taken in the ordinary course of the Issuer's
business and consistent with past practice, then, unless in the reasonable
opinion of the Board such action will not have a material adverse effect
upon the rights of the holders of the Warrants, the number of shares of
Warrant Stock comprising a Stock Unit shall be adjusted in such manner and
at such time as the Board shall in good faith determine to be equitable in
the circumstances, but no such adjustment shall decrease the number of
shares of Warrant Stock comprising a Stock Unit.
6.09 No Adjustment Necessary. Anything to the contrary herein
notwithstanding, no adjustment to the number of shares of Warrant Stock
comprising a Stock Unit Shall be made as a result of, or in connection
with, the issuance of up to an aggregate of 1,000,000 shares of Common
stock (subject to adjustments for stock splits) to management employees,
directly or pursuant to an Option Plan.
6.10 Notice of Adjustments. Whenever the number of shares
of Warrant Stock comprising a Stock Unit shall be adjusted pursuant to this
Agreement, the Issuer shall forthwith obtain a certificate signed by the
Issuer's chief financial officer (or, if a majority in interest of the
Holders so request after delivery of a certificate from the chief financial
officer, signed by a firm of independent accountants of recognized national
standing selected by the Issuer), setting forth, in reasonable detail, the
event requiring the adjustment and the method by which such adjustment was
calculated and specifying the number of shares of Warrant Stock comprising
a Stock Unit, after giving effect to such adjustment or change. The Issuer
shall promptly cause a signed copy of such certificate to be delivered to
each holder of Warrants. The Issuer shall keep at its office copies of all
such certificates and cause the same to be available for inspection at said
office during normal business hours by any holder of Warrants or any
prospective purchaser of Warrants designated by the registered holder
hereof.
6.11 Notice of Certain Corporate Action. If the Issuer
shall propose (i) to pay any dividend to the holders of its Common Stock or
to make any other distribution to the holders of its Common Stock; (ii) to
offer to the holders of its Common Stock rights to subscribe for or to
purchase any additional shares of Common Stock (or options or rights with
respect thereto); (iii) to effect any reclassification of its Common Stock;
(iv) to otherwise issue any Common Stock or other securities; (v) to effect
any capital reorganization; (vi) to effect any consolidation, merger or
sale, transfer or other disposition of all or substantially all of its
assets; or (vii) to effect the liquidation, dissolution or winding up of
the Issuer, then, in each such case, the Issuer shall give to each holder
of Warrants a notice of such proposed action, which shall specify the date
on which a record is to be taken for the purposes of such dividend,
distribution or rights offer, or the date on which such reclassification,
issuance, reorganization, consolidation, merger, sale, transfer,
disposition, liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of Common Stock, if any
such date is to be fixed, and shall also set forth such facts with respect
thereto as shall be reasonably necessary to indicate the effect of such
action on the Common Stock, and the number of shares of Warrant Stock which
will comprise a Stock Unit after giving effect to any adjustment which will
be required as a result of such action. Such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 20 days
prior to the record date for determining holders of the Common Stock for
purposes of such action, and in the case of any other such action, at least
20 days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of Common Stock, whichever shall be
the earlier.
SECTION 7. Registration.
7.01 Notice.
(a) Upon receipt of notice (a "Demand Notice") from
a Holder of any Warrants or shares of Warrant Stock given at any time after
the date that is 180 days after the consummation of a Qualified IPO
requesting that the Issuer effect the registration of Warrants and/or
shares of Warrant Stock held by such holder, or (b) whenever the Issuer
otherwise proposes to effect the registration of all or any part of the
Common Stock under the Securities Act, the Issuer shall promptly, and in
any event at least 30 days prior to the effective date of the proposed
registration statement, give written notice of such proposed registration
to all holders of Warrants or shares of Warrant Stock. Each holder of any
Warrants or shares of Warrant Stock that wishes to register its Warrants or
shares of Warrant Stock (each, a "Seller") shall, within 20 days after
receipt of such notice from the Issuer, deliver to the Issuer a notice (a
"Seller Notice") stating that such Seller wishes to participate in such
offering and setting forth the number of shares of Warrant Stock that such
Seller desires to include in such offering. The Issuer thereupon shall,
subject to Section 7.01(c) as expeditiously as practicable, use its best
efforts to effect the registration under the Securities Act of such shares
of Warrant Stock (any such registration effected or undertaken pursuant to
a Demand Notice being herein referred to as a "Demand Registration");
provided, however, that the Issuer shall not be required to effect a Demand
Registration pursuant to a Demand Notice from any holder of Warrants or
shares of Warrant Stock unless the holders of 50% in interest (on an
aggregate basis) of the then outstanding Warrants and shares of Warrant
Stock notify the Issuer of their wish to participate in an offering
pursuant to such registration; and, provided, further, that the Issuer
shall not be required to effect more than two Demand Registrations. In the
event that (i) the amount of securities proposed to be sold by Sellers
pursuant to a Demand Notice shall be reduced pursuant to Section 7.02(a)
hereof to an amount which is less than 85% of the amount of securities
originally proposed to be sold by Sellers, or (ii) any Demand Notice shall
be withdrawn by the holder or holders originally giving such Demand Notice
at any time prior to the filing by the Issuer of a preliminary registration
statement in connection with such Demand Notice, then, in such event, no
right to a Demand Registration shall be deemed to have been exercised or
forfeited and such Demand Notice shall not operate to reduce the Issuer's
obligation to effect a Demand Registration pursuant to a Demand Notice on
two occasions.
(b) Deferral of Filing. The Issuer may defer the
filing (but not the preparation) of a registration statement required by
Section 7.01(a) until a date not later than 90 days after the date of the
Demand Notice if (i) at the time the Issuer receives the Demand Notice, the
Issuer or any of its Subsidiaries is engaged in confidential negotiations
or other confidential business activities, disclosure of which would be
required in such registration statement (but would not be required if such
registration statement were not filed), and the Board determines in good
faith that such disclosure would be materially detrimental to the Issuer
and its shareholders or would have a material adverse effect on any such
confidential negotiations or other confidential business activities. A
deferral of the filing of a registration statement pursuant to this Section
7.01(c) shall be lifted, and the requested registration statement shall be
filed forthwith, if the negotiations or other activities are disclosed or
terminated. In order to defer the filing of a registration statement
pursuant to this Section 7.01(c), the Issuer shall promptly (but in any
event within 10 days), upon determining to seek such deferral, deliver to
each Seller a certificate signed by an executive officer of the Issuer
setting forth a statement of the reason for such deferral and an
approximation of the anticipated delay, which information the Sellers shall
treat as confidential. Within 20 days after receiving such certificate,
Sellers holding a majority in interest of the Warrant Stock for which
registration was previously requested may withdraw such request by giving
notice to the Issuer; if withdrawn, the Demand Notice shall be deemed not
to have been made for all purposes of this Agreement. The Issuer may not
invoke its right to defer the filing of a registration statement under this
Section 7.01(c) more than once in any twelve month period.
7.02 Proration.
(a) In the case of a Demand Registration, if the
underwriter (or, if the offering is not underwritten, an independent
financial advisor to the Sellers) determines that marketing factors require
a limitation on the number of securities to be offered and sold, there
shall be included in such registration only that number of securities that
the underwriter, or financial advisor, as the case may be, believes will
not jeopardize the success of the offering. Any reduction in the number of
securities to be so offered shall first be pro-rata among all Persons
(other than the Issuer) proposing to sell securities pursuant to such
offering who are not Sellers, based on the number of securities originally
proposed to be sold by each of them, and then, if necessary, pro-rata among
all Sellers based on the number of securities originally proposed to be
sold by each of them.
(b) In the case of a registration to be effected
pursuant to Section 7.01(b) hereof, if the underwriter (or, if the offering
is not underwritten, an independent financial advisor to the Issuer)
determines that marketing factors require a limitation on the number of
securities to be offered and sold in the offering, including securities
requested to be offered and sold by Sellers, there shall be included in the
offering only that number of securities that the underwriter, or financial
advisor, as the case may be, believes will not jeopardize the success of
the offering. Any reduction in the number of securities to be so offered
shall be pro-rata among the Shareholders, the Sellers and all other Persons
(other than the Issuer or securityholders who are exercising "demand"
registration rights), proposing to sell securities pursuant to such
offering, based on the number of securities originally proposed to be sold
by each such person.
Nothing contained herein shall be construed to limit in any way the
Issuer's right, in its sole discretion, to withdraw any registration
statement (other than a registration statement filed pursuant to a Demand
Notice) before such registration statement becomes effective, or to
postpone the offering of securities contemplated by any such registration
statement.
7.03 Registration Procedures. If and whenever the Issuer
is required by the provisions of Section 7.01(a) hereof or, with respect to
subsections (iii), (vi), (vii), (viii), (ix), (x) and (xiii) of this
Section 7.03, by the provisions of Section 7.01(a) or (b) hereof, to use
its best efforts to effect the registration of any of its securities under
the Securities Act, the Issuer shall, as expeditiously as possible,
(i) prepare and file with the SEC a registration
statement with respect to such securities and use its best efforts to cause
such registration statement to become and remain effective for a period of
not less than 180 days in the case of the Issuer's initial registration of
securities under the Securities Act and 90 days in the case of any
subsequent registration, to permit the sale of such securities in
accordance with the plan of distribution chosen by the Seller or Sellers
and the underwriter:
(ii) prepare and file with the SEC such amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all securities covered by
such registration statement;
(iii) furnish to each Seller such numbers of copies of
a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents, as such
Seller may reasonably request in order to facilitate the public sale or
other disposition of the securities owned by such Seller;
(iv) use its best efforts to register or qualify the
securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United States
as each Seller shall reasonably request, and do such other reasonable acts
and things as may be requested of it to enable such Seller to consummate
the public sale or other disposition in such jurisdictions of the
securities owned by such Seller, except that the Issuer shall not for any
such purpose be required to qualify to do business as a foreign corporation
in any jurisdiction wherein it is not so qualified;
(v) use its best efforts to cause the securities
covered by such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the Seller or Sellers thereof to consummate the disposition of such
securities;
(vi) notify each Seller of any securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the Issuer's becoming
aware that the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing (upon receipt of which each Seller agrees to forthwith cease
making offers and sales of such securities pursuant to such prospectus and
to deliver to the Issuer any copies of such prospectus then in the
possession of such Seller), and at the request of any such Seller promptly
prepare and furnish to such Seller a reasonable number of copies of a
prospectus supplemented or amended so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;
(vii) make available to its security holders, as soon
as reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with one
of the first three months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section
11 (a) of the Securities Act;
(viii) otherwise use its best efforts to comply with
all applicable rules and regulations of the SEC;
(ix) use its best efforts to list such securities on any
securities exchange on which the Common Stock of the Issuer is then listed,
or, if not so listed, on a national securities exchange, if the listing of
such securities is then permitted under the rules of such exchange;
(x) provide a transfer agent and registrar for all
the securities covered by such registration statement not later than the
effective date of such registration statement;
(xi) enter into such agreements (including an underwriting
agreement in customary form containing without limitation customary
indemnity and contribution provisions for the benefit of the underwriter or
underwriters and the Seller or Sellers) and take such other actions as the
Seller or Sellers shall reasonably request in order to expedite or
facilitate the disposition of such securities;
(xii) obtain an opinion from the Issuer's counsel and
a "cold comfort" letter from the Issuer's independent public accountants in
customary form and covering such matters as the Seller or Sellers shall
reasonably request;
(xiii) make available for inspection by any Seller of
securities covered by such registration statement, by any underwriter
participating in any disposition to be effected pursuant to such
registration statement and by any attorney, accountant or other agent
retained by any such Seller or any such underwriter, all pertinent
financial and other records, pertinent corporate documents and properties
of the Issuer, and cause all of the Issuer's officers, directors and
employees to supply all information reasonably requested by any such
Seller, underwriter, attorney, accountant or agent in connection with such
registration statement; and
(xiv) permit any Seller of securities covered by such
registration statement to require the insertion therein of material,
furnished to the Issuer in writing, which in the reasonable judgment of
such Seller should be included.
If any such registration or comparable statement refers to any Seller by
name or otherwise as the holder of any securities of the Issuer, then such
Seller shall have the right to require (A) the insertion therein of
language, in form and substance satisfactory to such Seller, to the effect
that the holding by such Seller of such securities is not to be construed
as a recommendation by such Seller of the investment quality of the
Issuer's securities covered thereby and that such holding does not imply
that such Seller will assist in meeting any future financial requirements
of the Issuer, or (B) in the event that such reference to such Seller by
name or otherwise is not required by the Securities Act, the deletion of
the reference to such Seller.
The Issuer may require each Seller of securities to, and
each such Seller, as a condition to including Securities in such
registration, shall, furnish the Issuer with such information and
affidavits regarding such Seller and the distribution of such securities as
the Issuer may from time to time reasonably request in writing in
connection with such registration. No Seller may participate in any
underwritten registration hereunder unless such Seller (a) agrees to sell
such Seller's securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements and
these registration rights.
Each Seller of securities agrees that upon receipt of any
notice from the Issuer of the happening of any event of the kind described
in Section 7.03(vi), such Seller will forthwith discontinue such Seller's
disposition of securities pursuant to the registration statement relating
to such securities until such Seller's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 7.03(vi) and, if
so directed by the Issuer, will deliver to the Issuer (at the Issuer's
expense) all copies, other than permanent file copies, then in such
Seller's possession of any prospectus relating to such securities at the
time of receipt of such notice.
7.04 Holdback on Sales. The Issuer and the Holders hereby
agree not to effect any public sale or distribution of any securities
similar to those registered in accordance with Section 7.03 hereof during
the 14 day period prior to, and during the 90 day period beginning on, the
effective date of any registration statement (except as part of such
registration statement).
7.05 Expenses. All reasonable expenses incurred in
complying with this Section 7, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Issuer, the reasonable fees and disbursements of one
counsel for the Seller or the Sellers (to be chosen by the Seller or the
Sellers holding a majority of the securities to be included by Sellers in a
registration statement), expenses of any special audits incident to or
required by any such registration and expenses of complying with the
securities or blue sky laws of any jurisdictions, shall be paid by the
Issuer; provided, that in no event shall the Issuer be required to pay any
underwriting discounts, commissions or fees attributable to the sale of
Warrant Shares by a Seller hereunder.
7.06 Indemnification.
(a) In the event of any registration of any of its
securities under the Securities Act pursuant to this Section, the Issuer
shall, and hereby agrees to, indemnify and hold harmless each Seller of
such securities, its directors and officers, and each other person, if any,
who controls such Seller within the meaning of Section 15 of the Securities
Act, against any losses, claims, damages, liabilities or expenses
("Losses") to which such Seller or any such director, officer or person may
become subject under the Securities Act or any other statute or at common
law, insofar as such Losses (or actions in respect thereof) arise out of or
are based upon any alleged untrue statement of any material fact contained
in any registration statement under which such securities were registered
under the Securities Act, any preliminary prospectus or final prospectus
with respect thereto, or any amendment or supplement thereto, or any
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse such Seller or such director, officer or controlling person
for any legal or any other expenses reasonably incurred by such Seller or
such director, officer or controlling person in connection with
investigating or defending any such Loss; provided, however, that the
Issuer shall not be liable in any such case to the extent that any such
Loss arises out of or is based upon any alleged untrue statement or alleged
omission made in such registration statement, preliminary prospectus,
prospectus, or amendment or supplement in reliance upon and in conformity
with written information furnished to the Issuer for inclusion therein by
such Seller; provided further, however that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, the indemnity agreement contained in this paragraph
shall not apply to the extent that any such Loss results from the fact that
a current copy of the prospectus was not sent or given to the person
asserting any such Loss at or prior to the written confirmation of the sale
of the securities concerned to such person if the Issuer had prior thereto
given such Seller the notice referred to in Section 7.03(vi) hereof and
provided to such Seller a supplemented or amended prospectus as
contemplated by Section 7.03(vi), and such current copy of the prospectus
would have cured the defect giving rise to such Loss. Such indemnity shall
remain in full force and effect regardless of any investigation made by or
on behalf of such Seller or such director, officer or controlling person,
and shall survive the transfer of such securities by such Seller.
(b) Each Seller of securities which are included in
a registration statement hereunder, as a condition to including securities
in such registration statement, shall, to the full extent permitted by law,
indemnify and hold harmless the Issuer, its directors and officers and each
other Person, if any, who controls the Issuer within the meaning of Section
15 of the Securities Act, against any Losses to which the Issuer or any
such director, officer or person may become subject under the Securities
Act or otherwise, insofar as such Losses (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in such registration statement,
any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made)
not misleading, if such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Issuer by such Seller
specifically for use in the preparation thereof; provided, however, that
the obligation to provide indemnification pursuant to this Section 7.06(b)
shall be several, and not joint and several, among such Sellers on the
basis of the number of securities included by each in such registration
statement and the aggregate amount which may be recovered from any holder
of securities pursuant to the indemnification provided for in this Section
7.06(b) in connection with any sale of securities shall be limited to the
total proceeds received by such holder from the sale of such securities.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Issuer or any such other Person
and shall survive the transfer of such securities by such Seller.
(c) Promptly after receipt by any Person under this
Section of notice of the commencement of any action, such Person (an
"Indemnified Party") shall, if a claim in respect thereof is to be made
against any other Person (an "Indemnifying Party") for indemnity under this
Section, notify the Indemnifying Party in writing of the commencement
thereof; but the omission so to notify the Indemnifying Party shall not
relieve it from any liability which it may have to any Indemnified Party,
except to the extent that the Indemnifying Party is prejudiced thereby. The
Indemnifying Party may, upon being notified of such action, assume the
defense thereof, with counsel satisfactory to such Indemnified Party, and,
after such assumption, the Indemnifying Party shall not be liable to such
Indemnified Party under this Section for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
Indemnified Party, in connection with the defense thereof; provided,
however, that the Indemnifying Party may not assume the defense of the
action, and shall remain liable to the Indemnified Party for its legal
expenses of counsel and other expenses, in the event that the Indemnified
Party determines that a conflict of interest may exist between the
Indemnified Party and the Indemnifying Party.
(d) If the indemnification provided for in this
Section is unenforceable although available, or insufficient to hold
harmless an Indemnified Party hereunder for any Losses (or actions in
respect thereof) in respect of which the provisions of Section 7.06(a) or
(b) would otherwise apply by their terms, then the Indemnifying Party shall
contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses (or actions in respect thereof) in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party on
the one hand and the Indemnified Party on the other hand in connection with
the statements or omissions which resulted in such Losses (or actions in
respect thereof), as well as any other relevant equitable considerations.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact relates
to information supplied by the Indemnifying Party on the one hand or such
Indemnified Party on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The parties agree that it would not be just and
equitable if contribution pursuant to this subsection were determined by
pro rata allocation or by any other method of allocation which does not
take account of the equitable considerations referred to in this
subsection. The amount paid or payable as a result of the Losses (or
actions in respect thereof) referred to above in this subsection shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
7.07 No Other Registration Rights. The Issuer shall not
grant any registration rights to any holder of equity securities of the
Issuer in respect of such securities if such registration rights would rank
senior to, or otherwise adversely affect, the registration rights granted
in this Section 7. This section 7.07 shall not prohibit the grant of
registration rights to others on a "pari passu" basis with those granted in
this Section 7, including the registration rights which may be granted to
Bankers Trust New York Corporation in connection with the Senior
Subordinated Credit Agreement.
SECTION 8. Tag-Along Sale.
8.01 Tag-Along Obligations.
(a) If at any time a Principal Shareholder or any
Affiliate of a Principal Shareholder ("Tag-Along Seller") shall, in one or
in a series of transactions, enter into an agreement to effect, or effect
or propose to effect, an Applicable Disposition to any transferee and it
does not elect to exercise its rights under Section 9 hereof (a "Tag-Along
Sale"), each holder of Warrants or shares of Warrant Stock shall have the
right, but not the obligation, to participate in such Tag-Along Sale by
selling up to the number of shares (on an aggregate basis) of Warrant Stock
subject to Warrants and shares of Warrant Stock equal to the product of (i)
the total number of shares (on an aggregate basis) of Common Stock proposed
to be sold in the proposed Tag-Along Sale multiplied by (ii) a fraction,
the numerator of which is equal to the number of shares (on an aggregate
basis) of Warrant Stock subject to Warrants and shares of Warrant Stock
owned by such holder together with the number of shares of Common Stock
owned by any holder thereof who is entitled to so called "Tag along" rights
and elects to exercise such rights in connection with the Tag along Sale,
in each case immediately prior to the Tag-Along Sale, and the denominator
of which is equal to (A) the number of shares of Common Stock owned by the
Tag-Along Seller immediately prior to the Tag-Along Sale plus (B) the
number of shares (on an aggregate basis) of Warrant Stock subject to
Warrants and shares of Warrant Stock owned by such holder together with the
number of shares of Common Stock owned by any holder thereof who is
entitled to so called "Tag along" rights and elects to exercise such rights
in connection with the Tag Along Sale, in each case immediately prior to
the Tag-Along Sale. Any such sales by such holder shall be on the same
terms and conditions as the proposed Tag-Along Sale by the Tag-Along
Seller, except the holder shall not be required to make any representations
or warranties except as to (x) its title to the Warrants or shares of
Warrant Stock to be sold by it, (y) such holder's power and authority to
effect such transfer and (z) such matters pertaining to compliance with
securities law as the transferee may reasonably require.
(b) The foregoing notwithstanding, the provisions of
this Section 8.02 shall not apply to any (i) bona fide public sale of
shares of Common Stock sold, or to the securities so sold or to holders
thereof, pursuant to an effective registration statement under the
Securities Act and (ii) any transfer, sale or disposition of shares of
Common Stock solely among the Principal Shareholder and its Affiliates.
8.02 Procedures.
(a) If a Tag-Along Seller is participating in a
Tag-Along Sale, at least 30 days before the proposed date thereof, the
Issuer shall provide each holder of Warrants or shares of Warrant Stock
with written notice of such Tag-Along Sale setting forth in reasonable
detail the consideration per share to be paid by the transferee and the
other terms and conditions of the Tag-Along Sale. Each holder of Warrants
or shares of Warrant Stock wishing to participate in the Tag-Along Sale
shall provide written notice to such Tag-Along Seller and to the Issuer
within 5 days of the date the notice specified in the preceding sentence is
received by such holder. Such notice shall set forth the number (on an
aggregate basis) of then exercisable Warrants and shares of Warrant Stock,
if any, such holder elects to include in the Tag-Along Sale. If such notice
is not received from a holder within the 5 day period specified above, the
Tag-Along Seller shall have the right to sell or otherwise transfer the
shares of Common Stock to the proposed transferee without any participation
by such holder, but only (i) on the terms and conditions stated in the
notice, and (ii) if the sale or transfer of such shares of Common Stock is
consummated not later than 60 days after the end of such 5 day period
specified above.
(b) The provisions of this Section 8.02 shall apply
regardless of whether the consideration received in the Tag-Along Sale is
cash, debt, equity securities, property-in-kind, or any combination
thereof; provided that, if the consideration to be received includes
securities, only holders who have certified to the reasonable satisfaction
of the Principal Shareholder that they are "accredited investors" (as
defined in Regulation D promulgated under the Securities Act) shall be
entitled to participate in such transfer unless the transferee consents
otherwise.
SECTION 9. Go-Along Sale.
9.01 Go-Along Obligations. If at any time there shall
occur a Go-Along Sale, each holder of Warrants or Warrant Stock shall be
obligated to, and shall, if so requested by the Shareholder or Shareholders
proposing to effect a Go-Along Sale (the "Go-Along Seller") in writing, (i)
sell, transfer and deliver, or cause to be sold, transferred and delivered
to the Third Party Purchaser, a portion of its Warrants and Warrant Stock
owned by it which represents the same percentage of such holder's shares of
the fully-diluted Common Stock of the Company as the shares being disposed
of by the Go-Along Seller and its Affiliates represent of the fully-diluted
Common Stock of the Company owned by the Go-Along Seller and its Affiliates
at the same price per share and on the same terms and conditions (except as
expressly permitted below) as are applicable to the Go-Along Seller, except
that the holder shall not be required to make any representations or
warranties except as to (x) its title to the Warrants or shares of Warrant
Stock to be sold by it to be sold in the Go-Along Sale, (y) such holder's
power and authority to effect such transfer, and (z) such matters
pertaining to compliance with securities law as the transferee may
reasonably require; and (ii) if shareholder approval of the transaction is
required, vote its shares of Warrant Stock entitled to vote thereon in
favor thereof (or abstain from voting, unless such abstention would defeat
the approval of such transaction) at any meeting of the Issuer's
shareholder called for the purpose of voting on such transaction (it being
understood that the holders of the Warrants and Warrant Stock shall not be
obligated to pay any portion of the transaction costs associated with a
Go-Along Sale or the sale, transfer or delivery of securities pursuant
thereto).
9.02 Procedures.
(a) If any Go-Along Seller proposes to effect a
Go-Along Sale, the Issuer shall deliver a written notice ("Go-Along
Notice") to each of the holders of the Warrants and Warrant Stock setting
forth in reasonable detail the consideration per share to be paid by the
Third Party Purchaser and the other terms and conditions of the Go-Along
Sale. Not later than the later of 20 days following the date of the
Go-Along Notice, each of such Holders shall deliver to the Issuer, for the
benefit of such Go-Along Seller Warrant certificates and certificates
representing Warrant Stock of such Holder, accompanied by duly executed
stock powers. At the closing for the Go-Along Sale, such Go-Along Seller
shall remit to each of such holders the consideration to which they are
entitled.
(b) If any holder of Warrants or Warrant Stock
should fail to deliver its Warrants or certificates representing Warrant
Stock, the Issuer shall cause the books and records of the Issuer to show
that such Warrants and/or Warrant Stock are bound by the provisions of this
Section 9 and that such Warrants and/or Warrant Stock shall be transferred
only to the Third Party Purchaser upon surrender for transfer by the holder
thereof.
(c) If, within 60 days after any Go-along Seller
delivers a Go-Along Notice, the Go-Along Sale is not completed, such
Go-Along Seller shall return to each holder of Warrants and Warrant Stock
all Warrants and certificates representing Warrant Stock that such holder
delivered for sale pursuant hereto.
SECTION 10. Put Rights.
10.01 Put Rights.
(a) At any time or from time to time after June 30,
2002, but prior to the earlier to occur of (i) the Expiration Date and (ii)
a Qualified IPO, each Holder will have the right to require the Issuer to
purchase (the "Put Right") all or any part of the Warrants and the Warrant
Stock owned by such Holder at the Put Price Per Unit as of the Put Notice
Date.
(b) Each Holder may exercise a Put Right by
delivering a notice to the Issuer stating that such Holder will require the
Issuer to purchase the Warrants or Warrant Stock specified in such notice
(a "Put Notice").
10.02 Procedures.
(a) The purchase and sale of the Warrants and the
Warrant Stock pursuant to a Put Right shall be consummated on a date
selected by the Issuer upon at least 10 days' prior written notice to such
Holders, which date in no event shall be earlier than the date 5 days, nor
later than the date 30 days, after the determination of Fair Market Value
(the "Put Closing Date"). On the Put Closing Date, the Issuer shall
purchase from the Holders which have given such Put Notice, and each such
Holder shall sell to the Issuer, the Warrants and/or the Warrant Stock
specified in such Put Notice: (i) in the case of Warrant Stock so
purchased, at a purchase price equal to the Put Price Per Unit as of the
Put Notice Date; and (ii) in the case of each Warrant, at a purchase price
equal to (A) the product of (1) the Put Price Per Unit as of the Put Notice
Date and (2) the number of shares of Warrant Stock for which such Warrant
is exercisable as of the Put Notice Date, minus (B) an amount equal to the
aggregate Exercise Price as of the Put Notice Date for such number of
shares of Warrant Stock. Payment of the purchase price for the Warrants
and/or the Warrant Stock so purchased by the Issuer shall be made by wire
transfer in immediately available funds.
(b) If the Issuer is prohibited from purchasing all
Warrants and Warrant Stock put to it pursuant to a Put Notice because (i)
of the existence of a contractual restriction or (ii) the Issuer does not
have sufficient funds legally available therefor under applicable law, then
the Issuer shall give notice (a "Put Response Notice") to each Holder which
has delivered such Put Notice of (x) the reason that it is unable to
purchase all Warrants and Warrant Stock put to it pursuant to a Put Notice,
including (1) if due to a deficiency, the computation thereof, and/or (2)
if due to such a contractual restriction, the nature of the provisions
which have been or would be breached and if such provisions are financial
covenants, a computation of the amounts or ratios setting forth the
deficiencies with respect to such covenants, and (y) the aggregate amount
of such Warrants and Warrant Stock, if any, which it will be able to
purchase, which Put Response Notice shall be delivered within 10 days of
the determination of Fair Market Value and shall be given together with the
notice of the Put Closing Date, if any, given by the Issuer pursuant to the
first sentence of Section 10.02(a) if a Put Response is delivered. Each
such Holder shall have the right to withdraw its Put Notice by delivering a
notice (a "Put Withdrawal Notice") to the Issuer at any time prior to the
Put Closing Date or if none is set in the Put Response Notice, prior to the
last day on which a Put Closing could occur pursuant to the first sentence
of Section 10.02(a). If any such Holders have not timely delivered Put
Withdrawal Notices, unless prohibited by a contractual restriction which
has not been waived by the requisite Persons, the Issuer thereupon shall
purchase from such Holders the aggregate amount of Warrants and Warrant
Stock, if any, it may purchase on such date with funds legally available
under applicable law for such purpose. Such purchase shall be allocated
among the Holders which have not timely delivered Put Withdrawal Notices
pro rata, based on the ratio of the number of Warrant Stock put to the
Issuer (including Warrant Stock issuable upon the exercise of Warrants put
to the Issuer) by each such Holder to the number of Warrant Stock put to
the Issuer (including Warrant Stock issuable upon the exercise of Warrants
put to the Issuer) by all such Holders.
If the Issuer is prohibited from purchasing any Warrants
and/or Warrant Stock upon the exercise by a Holder of a Put Right for any
of the reasons described in the first sentence of this Section 10.02(b),
then the Issuer shall use its best efforts to increase its legally
available funds under applicable law to an amount sufficient to enable it
to purchase legally all Warrants and Warrant Stock put to it pursuant to a
Put Notice and to obtain relief from any contractual restriction in order
to enable it to make the required payments, including through effecting a
Financing (provided such financing is available on reasonable terms and
provided no financing to replace the [high-yield notes] shall be required),
obtaining the consent of requisite number of holders of indebtedness or
otherwise, in each case, as soon as practicable.
(c) If the Issuer is prohibited from purchasing some
of or all Warrants and/or Warrant Stock upon the exercise by a Holder of a
Put Right for any of the reasons described in the first sentence of Section
10.02(b) and such Holder shall not have timely delivered a Put Withdrawal
Notice, then: (i) the Put Price Per Unit for such Holder with respect to
such unpurchased Warrants and/or Warrant Stock shall become an accruing
liability of the Issuer with interest thereon commencing on the date 10
days after the determination of Fair Market Value as provided above through
the date on which the related Warrants and/or Warrant Stock are purchased
by the Issuer at a rate per annum equal to 12.5%, compounded quarterly
(such liability and interest being herein called the "Accruing Liability");
and (ii) such obligation of the Issuer to purchase shall otherwise be
deemed suspended for so long as and only to the extent that the Issuer is
unable to repurchase such Warrants and/or Warrant Stock after taking all
the action described in the last paragraph of Section 10.02(b) (a "Put
Postponement"). On any Put Reactivation Date, the Put Price Per Unit for
such Warrants and Warrant Stock shall be deemed to be the Accruing
Liability. As used herein, "Put Reactivation Date" shall mean a date when
the Put Postponement lapses in whole or in part and the obligation of the
Issuer to purchase Warrants and Warrant Stock shall no longer be deemed
suspended to the same extent pursuant to clause (ii) of this Section
10.02(c).
(d) If on the Expiration Date any Holder is
prevented from exercising its rights under this Section 10 for any of the
reasons described in the first sentence of Section 10.02(b), the Issuer's
obligation to purchase Warrants and/or Warrant Stock shall be extended
until 5:00 p.m., New York City time, on the last day of the calendar month
next following by at least 90 days the date upon which the Issuer shall
notify the Holders that such reason or reasons no longer exist.
(e) Each Holder agrees, for the benefit of the
holders of the Senior Debt, that any Accruing Liability shall be
subordinated in right of payment to the prior payment in full of all the
Senior Debt and that no payment shall be made in respect of the principal
of or interest on the Accruing Liability until the earliest to occur of:
(i) the date on which the Senior Debt has been paid in full in cash; (ii)
the date on which the requisite consent of the holders of the Senior Debt
to such payment has been given; and (iii) the first date on which such
payment is permitted under this Agreement.
SECTION 11. Call Rights.
11.01 Call Rights.
(a) At any time or from time to time after June 30,
2003, but prior to the earlier to occur of (i) the Expiration Date and (ii)
a Qualified IPO, the Issuer shall have the right to purchase (the "Call
Right") all (but not less than all) of the Warrants and Warrant Stock owned
by all (but not less than all) the Holders.
(b) The Issuer may exercise a Call Right by
delivering an irrevocable notice to the Holders indicating that the Issuer
wishes to purchase the Warrants and/or the Warrant Stock of each Holder
specified in such notice (a "Call Notice").
(c) The purchase and sale of the Warrants and/or the
Warrant Stock pursuant to a Call Right shall be consummated on a date
selected by the Issuer by giving the Holders at least 10 days' prior
written notice thereof, which date in no event shall be earlier than the
date 5 days, nor later than the date 30 days, after the determination of
the Fair Market Value pursuant to the procedure described in the definition
of such term in Section 1. The Issuer shall purchase from the Holders, and
each Holder shall sell to the Issuer, Warrants and Warrant Stock: (i) in
the case of Warrant Stock so purchased, at a price equal to the Call Price
Per Unit as of the Call Notice Date; and (ii) in the case of a Warrant, at
a purchase price equal to (A) the product of (1) the Call Price Per Unit
and (2) the number of shares of Warrant Stock for which such Warrant is
exercisable as of the Call Notice Date, minus (B) an amount equal to the
aggregate Exercise Price as of the Call Notice Date for such number of
shares of Warrant Stock. Payment of the purchase price for the Warrants and
the Warrant Stock so purchased by the Issuer shall be made by wire transfer
in immediately available funds.
SECTION 12. Holders' Rights.
12.01 Delivery Expenses. If any Holder surrenders any
certificate for Warrants or Warrant Stock to the Issuer or a transfer agent
of the Issuer for exchange for instruments of other denominations or
registered in another name or names, the Issuer shall cause such new
instruments to be issued and shall pay the cost of delivering to or from
the office of such Holder from or to the Issuer or its transfer agent, duly
insured, the surrendered instrument and any new instruments issued in
substitution or replacement for the surrendered instrument.
12.02 Taxes. The Issuer shall pay all taxes (other
than Federal, state or local income taxes) which may be payable in
connection with the execution and delivery of this Agreement or the
issuance of the Warrants and Warrant Stock hereunder or in connection with
any modification of this Agreement or the Warrants and shall hold each
Holder harmless without limitation as to time against any and all
liabilities with respect to all such taxes. The obligations of the Issuer
under this Section 12.02 shall survive any redemption, repurchase or
acquisition of Warrants or Warrant Stock by the Issuer, any termination of
this Agreement, and any cancellation or termination of the Warrants.
12.03 Replacement of Instruments. Upon receipt by the
Issuer of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any certificate or instrument
evidencing any Warrants or Warrant Stock, and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that, if the Issuer's
Common Stock is not at the time publicly traded and the owner of the same
is any Investor or an institutional lender or investor, its own agreement
of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender or
cancellation thereof, the Issuer, at its expense, shall execute, register
and deliver, in lieu thereof, a new certificate or instrument for (or
covering the purchase of) an equal number of Warrants or Warrant Stock.
12.04 Indemnification. The Issuer shall indemnify and
hold harmless each of the Investor and the Holders and each of their
respective directors, officers, employees, shareholders, Affiliates and
agents (each, an "indemnified person") on demand from and against any and
all losses, claims, damages, liabilities (or actions or other proceedings
commenced or threatened in respect thereof) and expenses that arise out of,
result from, or in any way relate to, this Agreement or the Warrants, or in
connection with the other transactions contemplated hereby and thereby, and
to reimburse each indemnified person, upon its demand, for any legal or
other expenses incurred in connection with investigating, defending or
participating in the defense of any such loss, claim, damage, liability,
action or other proceeding (whether or not such indemnified person is a
party to any action or proceeding out of which any such expenses arise),
other than any of the foregoing claimed by any indemnified person to the
extent incurred by reason of the gross negligence or willful misconduct of
such indemnified person. No indemnified person shall be responsible or
liable to either the Issuer or any other Person for any damages which may
be alleged as a result of or relating to this Agreement or the Warrants
(other than in connection with a breach of this Agreement), or in
connection with the other transactions contemplated hereby and thereby. Any
claim for indemnity in connection with or relating to a registration of
securities pursuant to Section 7 hereof shall be governed by Section 7.06
hereof, without regard to the provisions of this Section 12.04.
12.05 Inspection Rights. At any time prior to a
Qualified IPO, the Issuer shall afford, and shall cause its Subsidiaries to
afford, any Holder or its authorized agents, access, at reasonable times,
upon reasonable prior notice, (i) to inspect the books and records of the
Issuer and its Subsidiaries, (ii) to discuss with management of the Issuer
and its Subsidiaries the business and affairs of the Issuer and its
Subsidiaries, and (iii) to inspect the properties of the Issuer and its
Subsidiaries.
SECTION 13. Other Covenants of Issuer. The Issuer agrees with each
Holder that, so long as any of the Warrants and/or Warrant Stock shall be
utstanding:
13.01 Financial Statements, Etc. The Issuer shall
deliver the information specified below to each Holder:
(a) within 90 days after the end of each fiscal year
of the Issuer, its audited consolidated and consolidating balance sheet and
related statements of operations, stockholders' equity and cash flows as of
the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, together with, in the case
of such consolidated financial statements, the report thereon by the
Issuer's independent public accountants of recognized national standing
(without any qualification or exception as to the scope of such audit) to
the effect that such consolidated financial statements present fairly in
all material respects the financial condition and results of operations of
the Issuer and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied and, in the case of such
consolidating financial statements, certified by its chief financial
officer as presenting fairly in all material respects the financial
condition and results of operations of the Issuer and each of its
consolidated subsidiaries in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes;
(b) within 45 days after the end of each month, the
Issuer's consolidated and consolidating balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end
of and for such month and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet,
as of the end of) the previous fiscal year, all certified by its chief
financial officer as presenting fairly in all material respects the
financial condition and results of operations of the Issuer and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) promptly after the same become publicly
available, copies of all periodic and other reports, proxy statements and
other materials filed by the Issuer or any Subsidiary with the Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
by the Issuer to its Shareholders generally; and
13.02 Repurchases and Redemption. Except as otherwise
specifically provided herein and other than repurchase or redemption of
shares of Common Stock from management, the Issuer shall not effect any
repurchase or redemption of shares of Common Stock and shall cause its
Subsidiaries not to effect any repurchase or redemption of shares of Common
Stock from any Shareholder, other than on a pro rata basis from all
Shareholders and Holders of Warrants participating in such repurchase or
redemption at the same type and amount of consideration. Any repurchase or
redemption of shares of Common Stock shall include Warrant Stock.
13.03 Transactions with Affiliates. Except as
expressly permitted by this Agreement, the Issuer shall not, nor shall it
permit any of its Subsidiaries to, directly or indirectly, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except (a) in the ordinary
course of business at prices and on terms and conditions not less favorable
to the Issuer or such Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties, (b) transactions between or among the
Issuer and its wholly owned Subsidiaries not involving any other Affiliate
or (c) any transactions or arrangements existing on the date hereof.
13.04 Restrictions on Performance. The Issuer shall
not at any time enter into an agreement or other instrument limiting in any
manner its ability to perform its obligations under this Agreement or the
Warrants, or making such performance or the issuance of Warrant Stock upon
the exercise of any Warrant a default under any such agreement or
instrument other than the Senior Subordinated Credit Agreement and the
Senior Credit Agreement and refinancings thereof with an increase in
principal and instruments relating to Issuer's proposed issuance of certain
high-yield notes which will be used to refinance Issuer's Indebtedness
under the Senior Subordinated Credit Agreement.
13.05 Modification of Other Equity Documents. The
Issuer shall not amend or consent to any modification, supplement or waiver
of any provision of any Other Equity Documents in any manner which would
have an adverse effect on the Warrant Stock Holders, in each case without
the prior written consent of the Majority Warrant Stock Holders. Without
limiting the generality of the foregoing, the Issuer shall not amend, or
consent to any modification, supplement or waiver of any provision of any
Other Equity Documents in a way which would (i) restrict the
transferability of the Warrants and the Warrant Stock, (ii) restrict the
transferability of the rights of any Holder in this Agreement to any
transferee of all or a portion of such Holder's Warrants and/or Warrant
Stock or (iii) require any consent or other approval of any Person to the
exercise of the Warrants by any Holder, the issuance of Warrant Stock upon
such exercise or the admission of such Holder as a member of the Issuer
upon such exercise.
SECTION 14. Right to Purchase Equity Securities.
(a) Following the Closing Date the Issuer shall not
issue any Equity Securities (except by way of stock dividends or other
distributions or offerings made available to holders of shares of Common
Stock generally) unless, prior to such issuance, the Issuer offers Holders
of Warrants or Warrant Stock the right to participate proportionately
according to such Holder's pro rata share as of the date of issuance of any
such Equity Securities (the "Date of Issuance") and on the same terms and
conditions and at the same per unit price (the "Issue Price"). The Issuer
shall give written notice to all Holders of Warrants or Warrant Stock of
any such issuance as far in advance of the Date of Issuance as possible,
but in no event less than 10 days in advance of the Date of Issuance (a
"Notice of Issuance"). The Notice of Issuance will describe in reasonable
detail the terms and conditions of the proposed issuance, including the
Issue Price, the maximum number of Equity Securities that such Holder will
be entitled to purchase (assuming for this purpose only that such Holder's
pro rata share does not change between the date of the giving of such
notice and the Date of Issuance) on the Date of Issuance. Notwithstanding
the foregoing, each Holders' preemptive right set forth above shall not
apply to any Equity Securities issued (i) in connection with a merger,
acquisition or other business combination transaction approved by the
Board, (ii) in sales to management employees pursuant to the Option Plan or
otherwise, up to a maximum of 1,000,000 shares of Common Stock in the
aggregate (subject to adjustment for stock splits), (iii) in connection
with an underwritten public offering, or (iv) in connection with any debt
financing that would otherwise not be available to the Issuer on similar
terms in absence of such Equity Securities.
(b) Each Holder of Warrants or Warrant Stock shall
have the option to elect to purchase all or part of such Holder's Pro Rata
Share of the Equity Securities described in a Notice of Issuance at the
Issue Price and on the other terms contained in the Notice of Issuance by
notifying the Issuer in writing (an "Election Notice") at least two
business days prior to the Date of Issuance (the "Election Period"), at
which time such Holder (or such designee) shall become irrevocably bound
(subject to the satisfaction of all regulatory requirements) to purchase
such Equity Securities. Each Election Notice will indicate the number of
units that such Holder elects to purchase.
(c) Any purchase and sale pursuant to the
provisions of this Section 14 shall occur on the Date of Issuance at the
principal offices of the Issuer unless otherwise agreed, subject to the
satisfaction of all regulatory requirements. At any closing of a purchase
and sale in accordance with this Section 14, the Issuer will deliver
certificates evidencing the Equity Securities to be so purchased against
delivery by such Holder of an amount equal to the number of units that such
Holder has elected to purchase multiplied by the Issue Price. Such amount
will be payable in immediately available United States funds. The Issuer
and such Holder will use their best efforts to accomplish the satisfaction
of all regulatory requirements with respect to such purchase, and the date
on which such purchase and sale must be completed in accordance with this
Section 14 will be extended automatically until such time as each
applicable Governmental Authority has given a final determination
permitting or prohibiting or otherwise denying necessary authorization for
such purchase and, in the case of a favorable determination, for an
additional five (5) business days.
(d) The failure of any Holder to exercise its right
to purchase Equity Securities under this Section 14 in connection with any
one issuance of Equity Securities by the Issuer will not, in any manner,
waive or otherwise impair the rights of such Holder to purchase such
Holder's Pro Rata Share in connection with any other proposed issuance of
Equity Securities to which this Section 14 is applicable.
(e) Notwithstanding anything contained in this
Section 14 to the contrary, the Issuer may at any time, regardless of
whether an Election Notice has been given, prior to the Date of Issuance
abandon an offering as to which it has given a Notice of Issuance, in which
case the Holders shall have no further right to purchase the Equity
Securities described in such Notice of Issuance.
SECTION 15. Miscellaneous.
15.01 Home Office Payment. Notwithstanding anything
to the contrary in this Agreement or the Warrants, so long as any Investor
or any nominee designated by it shall be a Holder, the Issuer shall
punctually pay all amounts which become due and payable with respect to any
Warrant or Warrant Stock to such Investor at the address registered on the
books of the Issuer maintained for such purpose, or at such other place and
in such manner as such Investor may designate by notice to the Issuer,
without presentation or surrender of such Warrant or the making of any
notation thereon. Each Investor agrees that prior to the sale, transfer or
other disposition of a part of any Warrant, it will make notation thereon
of the number of shares of Warrant Stock covered by the part of the Warrant
sold, transferred or disposed, or surrender the same in exchange for a
Warrant covering the number of shares of Warrant Stock remaining on the
Warrant so surrendered. The Issuer agrees that the provisions of this
Section 15.01 shall inure to the benefit of any other Holder registered on
the books of the Issuer.
15.02 Waiver. No failure on the part of any Investor
to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement or the
Warrants shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under this Agreement or the
Warrant preclude any other or further exercise thereof or the exercise of
any other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
15.03 Notices.
(a) All notices, requests and other communications
provided for herein and the Warrants (including any waivers or consents
under this Agreement and the Warrants) shall be given or made in writing,
(i) if to the Issuer:
Address for Notices:
Outsourcing Services Group
Attention: Chief Financial Officer, Inc.
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▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(ii) if to Chase Manhattan Capital, L.P.:
Chase Manhattan Capital, L.P.
c/o Chase Capital Partners
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(iii) if to any other Person who is the registered
Holder of any Warrants or Warrant Stock, to the
address for such Holder as it appears in the
stock or warrant ledger of the Issuer;
or, in the case of any Holder, at such other address as shall be designated
by such party in a notice to the Issuer; or, in the case of the Issuer, at
such other address as the Issuer may designate in a notice to the Investor
and all other Holders.
(b) All such notices, requests and other
communications shall be: (i) personally delivered, sent by courier
guaranteeing overnight delivery or sent by registered or certified mail,
return receipt requested, postage prepaid, in each case given or addressed
as aforesaid; and (ii) effective upon receipt.
15.04 Expenses, Etc. The Issuer agrees to pay or
reimburse the Investor and the Holders for: (a) all reasonable
out-of-pocket costs and expenses of the Investor and the Holders (including
the reasonable fees and expenses of Millbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
special New York counsel to the Investor), in connection with (i) the
negotiation, preparation, execution and delivery of this Agreement and the
issuance of Warrants hereunder, and (ii) any amendment, modification or
waiver of (or consents in respect of) any of the terms of this Agreement or
the Warrants; and (b) all reasonable costs and expenses of the Investor and
the Holders (including reasonable legal fees and expenses) in connection
with (i) any default by the Issuer hereunder or under the Warrants or any
enforcement proceedings resulting therefrom, and (ii) the enforcement of
this Section 15.04.
15.05 Amendments, Etc. This Agreement amends and
restates the Warrant Agreement dated as of June 30, 1997 between the
parties. Except as otherwise expressly provided in this Agreement, any
provision of this Agreement may be amended or modified only by an
instrument in writing signed by the Issuer and the holders of two-thirds of
the Warrant Stock issued or issuable upon exercise of the Warrants;
provided, however, that (a) the consent of the holders of any Warrant Stock
or Warrants shall not be required with respect to any amendment or waiver
which does not affect the rights or benefits of such class under this
Agreement, and (b) no such amendment or waiver shall, without the written
consent of all holders of such Warrant Stock and Warrants at the time
outstanding, amend this Section 15.05.
15.06 Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
15.07 Survival. All representations and warranties
made by the Issuer herein or in any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered
to have been relied upon by the Investor and shall survive the issuance of
the Warrants or the Warrant Stock regardless of any investigation made by
or on behalf of the Investor. All statements in any such certificate or
other instrument so delivered shall constitute representations and
warranties by the Issuer hereunder. All representations and warranties made
by the Investor herein shall be considered to have been relied upon by the
Issuer and shall survive the issuance to the Investor of the Warrants or
the Warrant Stock regardless of any investigation made by the Issuer or on
its behalf.
15.08 Specific Performance. Damages in the event of
breach of this Agreement by a Holder or the Issuer would be difficult, if
not impossible, to ascertain, and it is therefore agreed that each Holder
and the Issuer, in addition to and without limiting any other remedy or
right it may have, will have the right to an injunction or other equitable
relief in any court of competent jurisdiction, enjoining any such breach,
and enforcing specifically the terms and provisions hereof, and each Holder
and the Issuer hereby waives any and all defenses it may have on the ground
of lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief. The existence of this right will not
preclude the Holders or the Issuer from pursuing any other rights and
remedies at law or in equity which the Holders or the Issuer may have.
15.09 Captions. The captions and section headings
appearing herein are included solely for convenience of reference and are
not intended to affect the interpretation of any provision of this
Agreement.
15.10 Counterparts. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute
one and the same instrument and any of the parties hereto may execute this
Agreement by signing any such counterpart signature page or counterpart.
15.11 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the law of the State of New
York without giving effect to the conflicts of law principles thereof,
except to the extent that New York conflicts of laws principles would apply
the Delaware General Corporation Law to matters relating to corporations
organized thereunder.
15.12 Severability. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present
or future law, and if the rights or obligations of any party hereto under
this Agreement will not be materially and adversely affected thereby, (a)
such provision will be fully severable, (b) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof, (c) the remaining provisions
of this Agreement will remain in full force and effect and will not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of
this Agreement a legal, valid and enforceable provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible.
15.13 Entire Agreement. This Agreement supersedes
all prior discussions and agreements between the parties with respect to
the subject matter hereof, and together with the Warrant contains the sole
and entire agreement between the parties hereto with respect to the subject
matter hereof.
(Signature Page Follows)
[SIGNATURE PAGE WARRANT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have duly executed
this Warrant Agreement as of the date first above written.
OUTSOURCING SERVICES GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Chief Financial Officer
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CHASE MANHATTAN CAPITAL, L.P.
By: /s/ ▇▇▇▇ M.B. ▇'▇▇▇▇▇▇
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Name: ▇▇▇▇ M.B. ▇'▇▇▇▇▇▇
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Title: General Partner
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