OUTSOURCING SERVICES GROUP, INC.
$105,000,000
10 7/8% Senior Subordinated Notes Due 2006
PURCHASE AGREEMENT
February 26, 1998
BT ALEX. XXXXX INCORPORATED
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Outsourcing Services Group, Inc., a Delaware corporation (the
"COMPANY"), and each of the Company's Subsidiaries listed on the signature pages
hereof (together with any Subsidiary that in the future executes a supplemental
indenture pursuant to which such Subsidiary agrees to guarantee the Notes (as
defined) the "GUARANTORS" and, together with the Company, the "ISSUERS") hereby
confirm their agreement with you (the "INITIAL PURCHASER") as set forth below.
1. THE SECURITIES. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell to the Initial Purchaser
$105,000,000 aggregate principal amount of its 10-7/8% Senior Subordinated Notes
due 2006 (the "NOTES"). The Notes will be guaranteed (collectively, the
"GUARANTEES") on a senior subordinated basis by each of the Guarantors. The
Notes and the Guarantees are collectively referred to herein as the
"SECURITIES". The Notes are to be issued under an indenture (the "INDENTURE")
to be dated as of March 3, 1998 by and among the Company, the Guarantors and
First Trust National Association, as Trustee (the "TRUSTEE").
The Securities will be offered and sold to the Initial Purchaser
without being registered under the Securities Act of 1933, as amended (the
"ACT"), in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Issuers have
prepared a preliminary offering memorandum dated February 6, 1998 (the
"PRELIMINARY MEMORANDUM") and a final offering memorandum dated February 26,
1998 (the "FINAL MEMORANDUM"; the Preliminary Memorandum and the Final
Memorandum each herein being referred to as a "MEMORANDUM") setting forth or
including a description of the terms of the Securi-
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ties, the terms of the offering of the Securities and a description of the
Company and its Subsidiaries.
The Company understands that the Initial Purchaser proposes to make an
offering of the Securities only on the terms and in the manner set forth in the
Final Memorandum and Sections 4 and 8 hereof as soon as the Initial Purchaser
deems advisable after this Agreement has been executed and delivered to persons
in the United States whom the Initial Purchaser reasonably believes to be
qualified institutional buyers ("QUALIFIED INSTITUTIONAL BUYERS" or "QIBS") as
defined in Rule 144A under the Act, as such rule may be amended from time to
time ("RULE 144A"), in transactions under Rule 144A, and outside the United
States to certain persons in reliance on Regulation S under the Act.
The Initial Purchaser and its direct and indirect transferees of the
Securities will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as EXHIBIT A (the
"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Issuers have agreed,
among other things, to file a registration statement (the "REGISTRATION
STATEMENT") with the Securities and Exchange Commission (the "COMMISSION")
registering the Securities or the Exchange Notes (as defined in the Registration
Rights Agreement) and related guarantees under the Act.
2. REPRESENTATIONS AND WARRANTIES. The Issuers, jointly and
severally, represent and warrant to and agree with the Initial Purchaser that:
(a) Neither the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and at all times subsequent thereto up to the
Closing Date (as defined in Section 3 below) contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 2(a) do not apply to statements or
omissions made in reliance upon and in conformity with information relating to
the Initial Purchaser furnished to the Company in writing by the Initial
Purchaser expressly for use in the Final Memorandum or any amendment or
supplement thereto.
(b) As of the Closing Date, the Company will have the authorized,
issued and outstanding capitalization set forth in the Final Memorandum; all of
the subsidiaries of the Company are listed in SCHEDULE I attached hereto (each a
"SUBSIDIARY"
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and collectively the "SUBSIDIARIES"); all of the outstanding shares of capital
stock of the Company and the Subsidiaries have been, and as of the Closing Date
will be, duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights; all of the
outstanding shares of capital stock of the Company and of each of the
Subsidiaries, except as set forth in the Final Memorandum, will be free and
clear of all liens and encumbrances (other than those imposed by the Act and the
securities or "Blue Sky" laws of certain jurisdictions); except as set forth in
the Final Memorandum, there are no (i) options, warrants or other rights to
purchase, (ii) agreements or other obligations to issue or (iii) other rights to
convert any obligation into, or exchange any securities for, shares of capital
stock of or ownership interests in the Company or any of the Subsidiaries
outstanding. Except for the Subsidiaries or as disclosed in the Final
Memorandum, neither the Company nor the Subsidiaries owns, directly or
indirectly, any shares of capital stock or any other equity or long term debt
securities or has any equity interest in any firm, partnership, joint venture or
other entity.
(c) Each of the Company and the Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation and has all requisite corporate power and
authority to own its properties and conduct its business as now conducted and as
described in the Final Memorandum; each of the Company and the Subsidiaries is
duly qualified to do business as a foreign corporation in good standing in all
other jurisdictions where the ownership or leasing of its properties or the
conduct of its business requires such qualification, except where the failure to
be so qualified would not, individually or in the aggregate, have a material
adverse effect on the general affairs, management, business, condition
(financial or otherwise), prospects or results of operations of the Company and
the Subsidiaries, taken as a whole (any such event, a "MATERIAL ADVERSE
EFFECT").
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under the Notes, the
Exchange Notes and the Private Exchange Notes (as defined in the Registration
Rights Agreement). The Notes, when issued, will be in the form contemplated by
the Indenture. The Notes, the Exchange Notes and the Private Exchange Notes
have each been duly and validly authorized by the Company and, when executed by
the Company and authenticated by the Trustee in accordance with the provisions
of the Indenture and, in the case of the Notes, when delivered to and paid for
by the Initial Purchaser in accordance with the terms of this
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Agreement, and in the case of the Exchange Notes and the Private Exchange Notes,
when issued in exchange for the Notes as contemplated in the Registration Rights
Agreement, will constitute valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture, and enforceable against the Company
in accordance with their terms,(A) except that the enforcement thereof may be
subject to (i) bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforcement is brought in a proceeding at law or in equity) and the
discretion of the court before which any proceeding therefor may be brought and
(B) except insofar as the usury waiver contained in Section 4.09 of the
Indenture may be unenforceable.
(e) Each Guarantor has all requisite corporate power and authority to
execute, deliver and perform each of its obligations under its Guarantee, its
guarantee of the Exchange Notes (each, an "EXCHANGE NOTES GUARANTEE") and its
guarantee of the Private Exchange Notes (each, "PRIVATE EXCHANGE NOTES
GUARANTEE"). The Guarantees, when issued, will be in the form contemplated by
the Indenture. The Guarantees, the Exchange Notes Guarantees and the Private
Exchange Notes Guarantees have each been duly and validly authorized by the
Guarantors and, in the case of the Guarantees, when delivered to and paid for by
the Initial Purchaser in accordance with the terms of this Agreement, and in the
case of the Exchange Notes Guarantees and the Private Exchange Notes Guarantees,
when issued in exchange for the Guarantees as contemplated in the Registration
Rights Agreement, will constitute valid and legally binding obligations of the
Guarantors, entitled to the benefits of the Indenture, and enforceable against
the Guarantors in accordance with their terms, (A) except that enforcement
thereof may be subject to (i) bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforcement is brought in a proceeding at law or in
equity) and the discretion of the court before which any proceeding therefor may
be brought and (B) except insofar as the usury waiver contained in Section 4.09
of the Indenture may be unenforceable.
(f) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Indenture.
The Indenture meets the requirements for qualification under the Trust Indenture
Act of 1939, as amended and as in effect on the date hereof (the "TIA") even
though it is not necessary to qualify the Indenture under the
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TIA in connection with the sale of the Securities to the Initial Purchaser and
the offering of the Securities by the Initial Purchaser in the manner set forth
in the Final Memorandum and Sections 4 and 8 hereof. The Indenture has been
duly and validly authorized by the Issuers and, when executed and delivered by
the Issuers (assuming the due authorization, execution and delivery by the
Trustee), will constitute a valid and legally binding agreement of each of the
Issuers, enforceable against each of the Issuers in accordance with its terms,
(A) except that the enforcement thereof may be subject to (i) bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether enforcement is brought
in a proceeding at law or in equity) and the discretion of the court before
which any proceeding therefor may be brought and (B) except insofar as the usury
waiver contained in Section 4.09 of the Indenture may be unenforceable.
(g) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Registration
Rights Agreement. The Registration Rights Agreement has been duly and validly
authorized by each of the Issuers and, when executed and delivered by the
Issuers, assuming due authorization, execution and delivery thereof by the
Initial Purchaser, will constitute a valid and legally binding agreement of each
of the Issuers, enforceable against each of the Issuers in accordance with its
terms, except that (A) the enforcement thereof may be subject to (i) bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights generally and
(ii) general principles of equity (regardless of whether enforcement is brought
in a proceeding at law or in equity) and the discretion of the court before
which any proceeding therefor may be brought and (B) except insofar as the usury
waiver contained in Section 4.09 of the Indenture may be unenforceable and
(C) any rights to indemnity or contribution thereunder may be limited by federal
and state securities laws and public policy considerations.
(h) Each of the Issuers has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. This Agreement and the
consummation by the Issuers of the transactions contemplated hereby have been
duly and validly authorized by the Issuers. This Agreement has been duly
executed and delivered by the Issuers.
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(i) No consent, approval, authorization or order of any court or
governmental agency or body, or third party is required for (i) the issuance and
sale by the Company of the Notes to the Initial Purchaser or the consummation by
the Company of the other transactions contemplated hereby and (ii) the issuance
and sale by the Guarantors of the Guarantees or the consummation by the
Guarantors of the other transactions contemplated hereby, except such as may be
required under state securities or "Blue Sky" laws in connection with the
purchase and resale of the Securities by the Initial Purchaser in the manner
contemplated by the Final Memorandum and Sections 4 and 8 hereof or any consent,
approval, authorization or order as will be obtained on or prior to the Closing
Date (including any waiver or amendment to the Credit Agreement (as defined)
permitted by Section 7(1) hereto). None of the Company and the Subsidiaries is
(i) in violation of its certificate of incorporation or bylaws (or similar
organizational document), (ii) in breach or violation of any statute, law,
judgment, decree, order, rule or regulation applicable to any of them or any of
their respective properties or assets, except for any such breach or violation
which would not, individually or in the aggregate, have a Material Adverse
Effect, or (iii) in breach of or default under (nor has any event occurred
which, with notice or passage of time or both, would constitute a default under)
or in violation of any of the terms or provisions of, any indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate, contract or other agreement or instrument to which any of
them is a party or to which any of them or their respective properties or assets
is subject (collectively, "CONTRACTS"), except for any such breach, default,
violation or event which would not, individually or in the aggregate, have a
Material Adverse Effect.
(j) The execution, delivery and performance by the Issuers of this
Agreement, the Indenture and the Registration Rights Agreement and the
consummation by the Issuers of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the Securities to the
Initial Purchaser) will not conflict with or constitute or result in a breach of
or a default under (or an event which with notice or passage of time or both
would constitute a default under) or violation of any of (A) the terms or
provisions of any Contract, except for any such conflict, breach, violation,
default or event which would not, individually or in the aggregate, have a
Material Adverse Effect, (B) the certificate of incorporation or bylaws (or
similar organizational document) of the Company or any of the Subsidiaries or
(C) (assuming compliance with all applicable state securities or "Blue Sky" laws
and assuming the accuracy of the representations and warranties
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of the Initial Purchaser in Section 8 hereof) any statute, judgment, decree,
order, rule or regulation applicable to the Company or any of the Subsidiaries
or any of their respective properties or assets, except for any such conflict,
breach or violation which would not, individually or in the aggregate, have a
Material Adverse Effect.
(k) Each of Deloitte & Touche LLP, KPMG Peat Marwick LLP, Coopers &
Xxxxxxx L.L.P. and Xxxxx, Xxxxxx & Company, P.C., who are reporting on the
audited consolidated financial statements of the Company and the Subsidiaries
included in the Final Memorandum, are independent public accountants with
respect to the Company within the meaning of the Act. The consolidated
financial statements of the Company and the Subsidiaries and related notes
thereto included in the Final Memorandum present fairly in all material respects
the consolidated financial position of the Company and its consolidated
subsidiaries, the results of their operations and the changes in their
consolidated cash flow at the dates and for the periods specified and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, except as otherwise stated therein. The summary and
selected financial and statistical data in the Final Memorandum present fairly
in all material respects the information shown therein and have been prepared
and compiled on a basis consistent with the audited financial statements
included therein unless otherwise so stated therein.
(l) The pro forma financial statements (including the notes thereto)
and the other pro forma financial information included in the Final Memorandum
(i) comply as to form in all material respects with the applicable requirements
of Regulation S-X promulgated under the Securities Act of 1933, as amended (the
"ACT"), (ii) have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and (iii) have been
properly computed on the bases described therein; the assumptions used in the
preparation of the pro forma financial data and other pro forma financial
information included in the Final Memorandum are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or circumstances
referred to therein.
(m) There is not pending or, to the knowledge of the Issuers,
threatened any action, suit, proceeding, inquiry or investigation to which the
Company or any of the Subsidiaries is a party, or to which the property or
assets of the Company or any of the Subsidiaries are subject, before or brought
by any court, arbitrator or governmental agency or body which
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would, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Securities to
be sold hereunder or the issuance of the Exchange Notes or the Private Exchange
Notes.
(n) Except as otherwise disclosed in the Final Memorandum, each of
the Company and the Subsidiaries possesses all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has made all
declarations and filings with, all federal, state, local and other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, presently required or necessary to own or lease, as the case may be,
and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Final
Memorandum ("PERMITS"), except where the failure to obtain such Permits would
not, individually or in the aggregate, have a Material Adverse Effect; each of
the Company and the Subsidiaries has fulfilled and performed all of its
obligations with respect to such Permits, and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other material impairment of the rights of the holder
of any such Permit; and none of the Company or the Subsidiaries has received any
notice of any proceeding relating to revocation or modification of any such
Permit, except as described in the Final Memorandum and except where such
revocation or modification would not, individually or in the aggregate, have a
Material Adverse Effect.
(o) Since the date of the most recent financial statements appearing
in the Final Memorandum, except as described therein or disclosed in writing to
the Initial Purchaser or its Affiliates, (i) none of the Company or the
Subsidiaries has incurred any liabilities or obligations, direct or contingent,
or entered into or agreed to enter into any transactions or contracts (written
or oral) not in the ordinary course of business, which liabilities, obligations,
transactions or contracts would, individually or in the aggregate, be material
to the general affairs, management, business, condition (financial or
otherwise), prospects or results of operations of the Company and the
Subsidiaries, taken as a whole, (ii) none of the Company or any of the
Subsidiaries has purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its capital
stock (other than with respect to any of such Subsidiaries, the purchase of, or
dividend or distribution on, capital stock owned by the Company or a
Subsidiary), except that the Company has declared, and has paid in part,
dividends
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on its Series A Preferred Stock and Series B Preferred Stock and (iii) there
shall not have been any change in the capital stock or long-term indebtedness of
the Company or the Subsidiaries.
(p) Each of the Company and the Subsidiaries has filed all necessary
federal, state and foreign income and franchise tax returns, except where the
failure to so file such returns would not, individually or in the aggregate,
have a Material Adverse Effect; and other than tax deficiencies which the
Company or any of the Subsidiaries is contesting in good faith and for which it
has provided reserves in accordance with generally accepted accounting
principles, the Company has paid all taxes shown as due thereon and there is no
tax deficiency that has been asserted against the Company or any of the
Subsidiaries that would have, individually or in the aggregate, a Material
Adverse Effect.
(q) The statistical and market-related data included in the Final
Memorandum are based on or derived from sources which the Issuers believe to be
reliable and accurate.
(r) None of the Company, the Subsidiaries or any agent acting on
their behalf has taken or will take any action that might cause this Agreement
or the sale of the Securities to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, in each case as in effect, or as the
same may hereafter be in effect, on the Closing Date.
(s) Each of the Company and the Subsidiaries has good and marketable
title to all real property and good title to all personal property described in
the Final Memorandum as being owned by it and good and marketable title to a
leasehold estate in the real and personal property described in the Final
Memorandum as being leased by it, free and clear of all liens, charges,
encumbrances or restrictions, except as described in the Final Memorandum or to
the extent the failure to have such title or the existence of such liens,
charges, encumbrances or restrictions would not, individually or in the
aggregate, have a Material Adverse Effect, (A) except that the enforcement
thereof may be subject to (i) bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforcement is brought in a proceeding at law or in
equity) and the discretion of the court before which any proceeding therefor may
be brought and (B) except insofar as the usury waiver contained in Section 4.09
of the Indenture may be unenforceable. All leases, contracts and agreements to
which the
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Company or any of the Subsidiaries is a party or by which any of them is bound
are valid and enforceable against the Company or such Subsidiary, as the case
may be, and are valid and enforceable against the other party or parties thereto
and are in full force and effect with only such exceptions as would not,
individually or in the aggregate, have a Material Adverse Effect except that the
enforcement thereof may be subject to (A) (i) bankruptcy, fraudulent conveyance,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general principles of
equity (regardless of whether enforcement is brought in a proceeding at law or
in equity) and the discretion of the court before which any proceeding therefor
may be brought and (B) except insofar as the usury waiver contained in
Section 4.09 of the Indenture may be unenforceable. The Company and the
Subsidiaries own or possess adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses now or proposed to be operated by them as
described in the Final Memorandum, and none of the Company or any of the
Subsidiaries has received any notice of infringement of or conflict with (or
knows of any such infringement of or conflict with) asserted rights of others
with respect to any patents, trademarks, service marks, trade names, copyrights
or know-how which would reasonably be expected to have a Material Adverse
Effect.
(t) There are no legal or governmental proceedings involving or
affecting the Company or any Subsidiary or any of their respective properties or
assets that would be required to be described in a prospectus filed in
accordance with Form S-1 pursuant to the Act that are not described in the Final
Memorandum, nor are there any material contracts or other documents that would
be required to be described in a prospectus filed in accordance with Form S-1
pursuant to the Act that are not described in the Final Memorandum.
(u) Except as disclosed in the Final Memorandum or as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect (A) each of the Company and the Subsidiaries is in compliance
with applicable Environmental Laws (as defined below), (B) each of the Company
and the Subsidiaries has made all filings and provided all notices required
under any applicable Environmental Law, and has, and is in compliance with, all
Permits required under any applicable Environmental Laws and each of them is in
full force and effect, (C) there is no civil, criminal or administrative action,
suit, demand, claim, hearing, notice of violation, investigation, proceeding,
notice or demand letter or request for
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information pending or, to the knowledge of the Company or any of the
Subsidiaries, threatened against the Company or any of the Subsidiaries under
any Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Company or the
Subsidiaries, (E) none of the Company or any of the Subsidiaries has received
notice that it has been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or any comparable state law, (F) no property or facility of
the Company or any of the Subsidiaries is (i) listed or proposed for listing on
the National Priorities List under CERCLA or is (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to CERCLA, or on any comparable list maintained by any
state or local governmental authority.
For purposes of this Agreement, "ENVIRONMENTAL LAWS" means the common
law and all applicable federal, state and local laws or regulations, codes,
orders, decrees, judgments or injunctions issued, promulgated, approved or
entered thereunder, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
hazardous materials into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of hazardous materials and (iii) underground and
above ground storage tanks and related piping, and emissions, discharges,
releases or threatened releases therefrom.
(v) Except as would not reasonably be expected to have a Material
Adverse Effect, there is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company or any of the Subsidiaries which is pending
or, to the knowledge of the Company or the Subsidiaries, threatened.
(w) Each of the Company and the Subsidiaries carries insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties based on customary industry practices.
(x) Neither the Company nor the Subsidiaries has any knowledge of any
liability or liabilities which would, in the aggregate, reasonably be expected
to have a Material Adverse Effect, for any prohibited transaction or funding
deficiency or
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any complete or partial withdrawal liability with respect to any pension, profit
sharing or other plan which is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), to which the Company or any of the
Subsidiaries makes or ever has made a contribution and in which any employee of
the Company or any of the Subsidiaries is or has ever been a participant. With
respect to such plans, the Company and the Subsidiaries are in compliance in all
respects with all applicable provisions of ERISA, except for non-compliance
which would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(y) Each of the Company, the Guarantors and Kolmar Canada, Inc.
(i) makes and keeps accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions are
recorded as necessary to permit preparation of its financial statements and to
maintain accountability for its assets, (C) access to its assets is permitted
only in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at reasonable
intervals.
(z) None of the Company or the Subsidiaries is an "investment
company" or "promoter" or "principal underwriter" for an "investment company,"
as such terms are defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(aa) The Notes, the Guarantees, the Indenture, the Registration Rights
Agreement, the Credit Agreement, dated as of January 8, 1996 (the "CREDIT
AGREEMENT"), among the Company, as guarantor, certain Subsidiaries, as initial
borrowers, the lender party thereto and BT Commercial Corporation, as agent, and
the Share and Asset Purchase Agreement dated as of October 28, 1997, as amended
(the "ACQUISITION AGREEMENT"), among CCL Industries Inc., CCL Industries
Corporation and the Company and the preferred stock of the Company will conform
in all material respects to the descriptions thereof in the Final Memorandum.
(bb) No holder of securities of the Company or any Subsidiary will be
entitled to have such securities registered under the registration statements
required to be filed by the Issuers pursuant to the Registration Rights
Agreement, other than as expressly permitted thereby.
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(cc) Immediately after the consummation of the transactions
contemplated by each of the Acquisition Agreement, the Credit Agreement, this
Agreement and the Indenture, the fair value and present fair saleable value of
the assets of each of the Issuers will exceed the sum of its stated liabilities
and identified contingent liabilities; none of the Issuers is, nor will any of
the Issuers be, after giving effect to the execution, delivery and performance
of the Acquisition Agreement, the Credit Agreement, this Agreement and the
Indenture, and the consummation of the transactions contemplated hereby and
thereby, (a) left with unreasonably small capital with which to carry on its
business as it is proposed to be conducted, (b) unable to pay its debts
(contingent or otherwise) as they mature or (c) otherwise insolvent.
(dd) None of the Issuers or any of their respective Affiliates (as
defined in Rule 501(b) of Regulation D under the Act) has directly, or through
any agent, (i) sold, offered for sale, solicited offers to buy or otherwise
negotiated in respect of, any "security" (as defined in the Act) which is or
could be integrated with the sale of the Securities in a manner that would
require the registration under the Act of the Securities or (ii) engaged in any
form of general solicitation or general advertising (as those terms are used in
Regulation D under the Act) in connection with the offering of the Securities or
in any manner involving a public offering within the meaning of Section 4(2) of
the Act. Assuming the accuracy of the representations and warranties of the
Initial Purchaser in Section 8 hereof, it is not necessary in connection with
the offer, sale and delivery of the Securities to the Initial Purchaser in the
manner contemplated by this Agreement to register any of the Securities under
the Act or to qualify the Indenture under the TIA.
(ee) No securities of any of the Issuers are of the same class (within
the meaning of Rule 144A under the Act) as the Securities and listed on a
national securities exchange registered under Section 6 of the Exchange Act, or
quoted in a U.S. automated inter-dealer quotation system.
(ff) None of the Issuers has taken, nor will any of them take,
directly or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the price of
the Securities.
(gg) None of the Issuers, any of their respective Affiliates or any
person acting on any of their behalf (other than the Initial Purchaser) has
engaged in any directed selling efforts (as that term is defined in Regulation S
under the Act
-14-
("REGULATION S")) with respect to the Securities; the Issuers and their
respective Affiliates and any person acting on behalf of any of them (other than
the Initial Purchaser) have complied with the offering restrictions requirement
of Regulation S.
(hh) The Final Memorandum contains all material developments relating
to the Company and the Subsidiaries, taken as a whole, occurring after the date
of the most recent historical financial statements included therein.
Any certificate signed by any officer of the Company or any Subsidiary
and delivered to the Initial Purchaser or to counsel for the Initial Purchaser
at or prior to the Closing shall be deemed a joint and several representation
and warranty by the Company and each of the Subsidiaries to the Initial
Purchaser as to the matters covered thereby.
3. PURCHASE, SALE AND DELIVERY OF THE SECURITIES. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Issuers agree to issue
and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase
the Securities, at 97.0% of their principal amount.
One or more certificates in definitive form for the Notes and
Guarantees that the Initial Purchaser has agreed to purchase hereunder, and in
such denomination or denominations and registered in such name or names as the
Initial Purchaser requests upon notice to the Company at least 36 hours prior to
the Closing Date, shall be delivered by or on behalf of the Issuers to the
Initial Purchaser, against payment by or on behalf of the Initial Purchaser of
the purchase price therefor by wire transfer (same day funds), to such account
or accounts as the Company shall specify prior to the Closing Date, or by such
means as the parties hereto shall agree prior to the Closing Date. Such
delivery of and payment for the Securities shall be made at the offices of
Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 A.M., New
York time, on March 3, 1998, or at such other place, time or date as the Initial
Purchaser, on the one hand, and the Company, on the other hand, may agree upon,
such time and date of delivery against payment being herein referred to as the
"CLOSING DATE." The Company will make such certificate or certificates for the
Securities available for checking by the Initial Purchaser at the offices of
Xxxxxx Xxxxxx & Xxxxxxx in New York, New York, or at such other place as BT
Alex. Xxxxx Incorporated may designate, at least 24 hours prior to the Closing
Date.
-15-
4. OFFERING BY THE INITIAL PURCHASER. The Initial Purchaser
proposes to make an offering of the Securities at the price and upon the terms
set forth in the Final Memorandum, as soon as practicable after this Agreement
is entered into and as in the judgment of the Initial Purchaser is advisable
solely to persons whom the Initial Purchaser reasonably believes to be (i) QIBs
and (ii) persons permitted to purchase the Notes in offshore transactions in
reliance upon Regulation S under the Act.
5. COVENANTS OF THE ISSUERS. The Issuers covenant and agree with
the Initial Purchaser that:
(a) The Issuers will advise the Initial Purchaser promptly and (if
requested by the Initial Purchaser) confirm such advice in writing of any
amendment or supplement to the Final Memorandum or any amendment or supplement
thereto of which the Initial Purchaser shall not previously have been advised
and will furnish a copy for a reasonable period of time prior to the proposed
amendment or supplement. The Issuers will promptly, upon the reasonable request
of the Initial Purchaser or counsel for the Initial Purchaser, make any
amendments or supplements to the Preliminary Memorandum or the Final Memorandum
or any change to a proposed amendment or supplement to the Final Memorandum that
may be necessary or advisable in connection with the resale of the Securities by
the Initial Purchaser.
(b) Prior to the sale of all the Notes by the Initial Purchaser in
accordance with Section 4, the Issuers will cooperate with the Initial Purchaser
in arranging for the qualification of the Securities for offering and sale under
the securities or "Blue Sky" laws of such jurisdictions as the Initial Purchaser
may designate and will continue such qualifications in effect for as long as may
be necessary to complete the resale of the Securities by the Initial Purchaser;
PROVIDED, HOWEVER, that in connection therewith, none of the Issuers shall be
required to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction or subject itself to taxation in excess
of a nominal dollar amount in any such jurisdiction where it is not then so
subject.
(c) If, at any time prior to the completion of the distribution of
the Securities by the Initial Purchaser any event occurs or information becomes
known as a result of which the Final Memorandum as then amended or supplemented
would include any untrue statement of a material fact, or omit to state a
material fact necessary to make the statements therein, in
-16-
the light of the circumstances under which they were made, not misleading, or if
for any other reason it is necessary at any time to amend or supplement the
Final Memorandum to comply with applicable law, the Issuers will promptly notify
the Initial Purchaser thereof and will prepare, at the expense of the Issuers,
an amendment or supplement to the Final Memorandum that corrects such statement
or omission or effects such compliance.
(d) The Issuers will, without charge, provide to the Initial
Purchaser and to counsel for the Initial Purchaser as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or supplement
thereto as the Initial Purchaser may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use of Proceeds" in the Final Memorandum.
(f) For so long as any of the Securities remain outstanding, the
Company will furnish to the Initial Purchaser copies of all reports and other
communications (financial or otherwise) furnished by the Company to the Trustee
or to the holders of the Notes.
(g) Prior to the Closing Date, the Company will furnish to the
Initial Purchaser, as soon as they have been prepared, a copy of any available
unaudited interim financial statements of the Company for any period subsequent
to the period covered by the most recent financial statements appearing in the
Final Memorandum.
(h) None of the Issuers or any of their Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale of
the Securities in a manner which would require the registration of the
Securities under the Act.
(i) The Issuers will not engage in any form of general solicitation
or general advertising (as those terms are used in Regulation D under the Act)
in connection with the offering of the Securities or in any manner involving a
public offering of the Securities within the meaning of Section 4(2) of the Act
other than the Exchange Offer.
(j) For so long as any of the Securities remain outstanding, the
Company will make available at its expense, upon request, to any holder of such
Securities and any prospective purchasers thereof the information specified in
Rule 144A(d)(4)
-17-
under the Act, unless the Company is then subject to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(k) The Company will use its best efforts to (i) permit the
Securities to be designated Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL market (the "PORTAL MARKET") and (ii)
permit the Securities to be eligible for clearance and settlement through The
Depository Trust Company.
(l) In connection with Securities offered and sold in an off-shore
transaction (as defined in Regulation S) the Company will not register any
transfer of such Securities not made in accordance with the provisions of
Regulation S and will not, except in accordance with the provisions of
Regulation S, if applicable, issue any such Securities in the form of definitive
securities.
6. EXPENSES. The Issuers jointly and severally agree to pay all
costs and expenses incident to the performance of their respective obligations
under this Agreement, whether or not the transactions contemplated herein are
consummated or this Agreement is terminated pursuant to Section 11 hereof,
including all costs and expenses incident to (i) the printing, word processing
or other production of documents with respect to the transactions contemplated
hereby, including any costs of printing the Preliminary Memorandum and the Final
Memorandum and any amendment or supplement thereto, and any "Blue Sky"
memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchaser of copies of the foregoing documents, (iii) the fees and disbursements
of the counsel, the accountants and any other experts or advisors retained by
the Issuers, (iv) preparation (including printing), issuance and delivery to the
Initial Purchaser of the Securities, (v) the qualification of the Securities
under state securities and "Blue Sky" laws, including filing fees and reasonable
fees and disbursements of counsel for the Initial Purchaser relating thereto,
(vi) one-half of the expenses in connection with any meetings with prospective
investors in the Securities other than the cost of the meeting rooms, (vii) fees
and expenses of the Trustee including fees and expenses of its counsel,
(viii) all expenses and listing fees incurred in connection with the application
for quotation of the Securities on the PORTAL Market and (ix) any fees charged
by investment rating agencies for the rating of the Securities. If the sale of
the Securities provided for herein is not consummated because any condition to
the obligations of the
-18-
Initial Purchaser set forth in Section 7 hereof is not satisfied, because this
Agreement is terminated or because of any failure, refusal or inability on the
part of the Issuers to perform all obligations and satisfy all conditions on
their part to be performed or satisfied hereunder (in each case other than
solely by reason of a default by the Initial Purchaser of its obligations
hereunder after all conditions hereunder have been satisfied in accordance
herewith), the Issuers jointly and severally agree to promptly reimburse the
Initial Purchaser upon demand for all out-of-pocket expenses (including fees,
disbursements and charges of Xxxxxx Xxxxxx & Xxxxxxx, counsel for the Initial
Purchaser) that shall have been incurred by the Initial Purchaser in connection
with the proposed purchase and sale of the Securities.
7. CONDITIONS OF THE INITIAL PURCHASER'S OBLIGATIONS. The
obligation of the Initial Purchaser to purchase and pay for the Notes shall, in
its sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Issuers,
in form and substance satisfactory to counsel for the Initial Purchaser, to the
effect that:
(i) Each of the Company, Aerosol Services Company, Inc. ("AEROSOL")
and Kolmar Laboratories, Inc. ("KOLMAR") is validly existing and in good
standing under the laws of its respective jurisdiction of incorporation and
has all requisite corporate power and corporate authority to (a) enter into
and perform its obligations under the Indenture, this Agreement and the
Registration Rights Agreement and (b) own, lease and operate its properties
and to conduct its business as described in the Final Memorandum. Each of
the Company, Aerosol and Kolmar is duly qualified to do business as a
foreign corporation in good standing in the jurisdictions listed on
Schedule II hereto.
(ii) The Company has all requisite corporate power and corporate
authority to execute, deliver and perform each of its obligations under the
Notes, the Exchange Notes and the Private Exchange Notes; each of Aerosol
and Kolmar has all requisite corporate power and corporate authority to
execute, deliver and perform each of its obligations under its Guarantee,
its Exchange Notes Guarantee and its Private Exchange Notes Guarantee; the
Inden-
-19-
ture meets the requirements for qualification under the TIA as in effect on
the date of such opinion; the Indenture has been duly authorized by each of
the Company, Aerosol and Kolmar and, when duly executed and delivered by
each Issuer (assuming the due authorization, execution and delivery thereof
by the Trustee), will constitute the valid and legally binding agreement of
each Issuer, enforceable against each Issuer in accordance with its terms,
except (i) to the extent that the enforceability thereof may be limited by
(A) bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting creditors'
rights generally and (B) general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and
(ii) that such firm need express no opinion as to the enforceability or
effect of Section 4.09 of the Indenture.
(iii) The Notes have each been duly authorized by the Company and, when
duly executed and delivered by the Company and paid for by the Initial
Purchaser in accordance with the terms of this Agreement (assuming the due
authorization, execution and delivery of the Indenture by the Trustee and
due authentication and delivery of the Notes by the Trustee in accordance
with the Indenture), will be valid and binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except (i) to the extent that the
enforceability thereof may be limited by (A) bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity) and (ii) that such firm need express no
opinion as to the enforceability or effect of Section 4.09 of the
Indenture.
(iv) The Guarantees by each of Aerosol and Kolmar have been duly
authorized by Aerosol and Kolmar, respectively, and, when duly executed and
delivered by Aerosol and Kolmar, respectively, in accordance with the terms
of this Agreement (assuming the due authorization, execution and delivery
of the Indenture by the Trustee and the Indenture and the Guarantee by
Piedmont), will be valid and binding obligations of the Guarantors
enforceable against each of the Guarantor in accordance with their terms,
ex-
-20-
cept (i) to the extent that the enforceability thereof may be limited by
(A) bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting creditors'
rights generally and (B) general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity), and
(ii) that such firm need express no opinion as to the enforceability or
effect of Section 4.09 of the Indenture.
(v) The Exchange Notes and the Private Exchange Notes have been duly
authorized by the Company, and if the Exchange Notes and the Private
Exchange Notes were duly executed and delivered by the Company in
accordance with the terms of the Registration Rights Agreement and the
Indenture on the date of such opinion (assuming the due authorization,
execution and delivery of the Indenture by the Trustee and due
authentication and delivery of the Exchange Notes and the Private Exchange
Notes by the Trustee in accordance with the Indenture), they would be valid
and binding obligations of the Company, entitled to the benefits of the
Indenture, and enforceable against the Company in accordance with their
terms, except (i) to the extent that the enforceability thereof may be
limited by (A) bankruptcy, insolvency, (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium and
other similar laws now or hereafter in effect relating to or affecting
creditors' rights generally and (B) general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity) and (ii) that such firm need express no opinion as to the
enforceability or effect of Section 4.09 of the Indenture.
(vi) The Exchange Notes Guarantees and the Private Exchange Notes
Guarantees of Aerosol and Kolmar have been duly authorized by Aerosol and
Kolmar, respectively, and, if the Exchange Notes Guarantees and the Private
Exchange Notes Guarantees were duly executed and delivered by Aerosol and
Kolmar, respectively, in accordance with the terms of the Registration
Rights Agreement and the Indenture on the date of such opinion (assuming
due authorization, execution and delivery of the Indenture by the Trustee
and the Indenture, the Exchange Note Guarantee and the Piedmont Exchange
Note Guarantee by Piedmont), they would be valid and binding obligations of
the Guarantors, enforceable against the Guarantors in accordance with their
terms, except (i) to the extent that the enforceability
-21-
thereof may be limited by (A) bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors' rights generally and (B) general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity), and (ii) that such firm need express no opinion as to the
enforceability or effect of Section 4.09 of the Indenture.
(vii) The Registration Rights Agreement has been duly authorized by
each of the Company, Aerosol and Kolmar and, when duly executed and
delivered by each of the Company, Aerosol and Kolmar (assuming due
authorization, execution and delivery thereof by the Initial Purchaser and
Piedmont), will be a valid and binding agreement of each of the Issuers,
enforceable against each of the Issuers in accordance with its terms,
except (i) to the extent that the enforceability thereof may be limited by
(A) bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium and other
similar laws now or hereafter in effect relating to or affecting creditors'
rights generally and (B) general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity) and
(ii) that any rights to indemnity or contribution thereunder may be limited
by federal and state securities laws and public policy considerations.
(viii) This Agreement and the consummation by each of the Company,
Aerosol and Kolmar of the transactions contemplated hereby have been duly
authorized by each of the Company, Aerosol and Kolmar. This Agreement has
been duly executed and delivered by each of the Company, Kolmar and
Aerosol.
(ix) The Indenture, the Notes, the Guarantees and the Registration
Rights Agreement, conform in all material respects to the descriptions
thereof contained in the Final Memorandum.
(x) The statements set forth under the headings "Risk Factors --
Subordination of the Notes and the Guarantees," "Description of Certain
Terms of the Preferred Stock and the Warrant Agreement," "Exchange Offer;
Registration Rights" and "Description of Notes" in the Final Memorandum,
insofar as such statements constitute a summary of legal matters, documents
or proceedings referred
-22-
to therein, fairly present such legal matters, documents and proceedings in
all material respects.
(xi) The execution and delivery by the Company, Kolmar and Aerosol of
this Agreement, the Registration Rights Agreement and the Indenture, the
issuance and sale of the Securities to the Initial Purchaser and the
performance of the Company's, Kolmar's and Aerosol's respective obligations
pursuant to this Agreement, the Registration Rights Agreement and the
Indenture (i) will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under the
Articles of Incorporation or similar organizational document or bylaws of
any of the Company, Kolmar or Aerosol, (ii) will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default (with the passage of time or otherwise) under, or
result in the imposition or creation of (or the obligation to create or
impose) any security interest, mortgage, pledge, claim, lien, encumbrance
or adverse interest of any nature (each, a "Lien") on any properties of the
Company, Kolmar or Aerosol or any of their respective subsidiaries or an
acceleration of indebtedness pursuant to any of the agreements listed on
Schedule III hereto, where, in any such instance, such breach, default,
Lien, acceleration of indebtedness or conflict could reasonably be expected
to have, individually or in the aggregate, a material adverse effect on the
general affairs, management, business condition (financial or otherwise),
prospects or results of operations of the Company and the Subsidiaries,
taken as a whole, and (iii) will not conflict with or violate any
Applicable Law (as hereinafter defined) or Applicable Order (as hereinafter
defined), it being understood that we express no opinion as to any
violation of any Applicable Law or Applicable Order as a result of the
Initial Purchaser's involvement, the involvement of any of the Initial
Purchaser's affiliates or the involvement of subsequent purchasers of the
Securities from the Initial Purchaser because of the Initial Purchaser's
legal or regulatory status or because of other facts specifically
pertaining to the Initial Purchaser, the Initial Purchaser's affiliates or
such other purchasers. The term "Applicable Law" means any law, rule and
regulation of the United States of America, the State of California, the
State of New York and any General Corporation Law of the State of Delaware
that, in our experience, is normally applicable to transactions of the type
contemplated by this Agreement, the Registration Rights Agreement and the
Indenture, provided, that we express no opinion as to the "blue sky" or
state
-23-
securities laws of any jurisdiction; and the term "Applicable Order" means
any order or decree of any United States, Delaware, California or New York
executive, legislative, judicial, administrative or regulatory body,
including without limitation, the Commission (each, a "Governmental
Authority"), by which the Company, Kolmar or Aerosol or any of their
respective subsidiaries is bound, the existence of which is actually known
to us or has been specifically disclosed to us in writing by the Company,
Kolmar or Aerosol.
(xii) Assuming (i) the accuracy of the representations and warranties
of the Company, Kolmar, Aerosol and Piedmont set forth in Section 2 of this
Agreement and of the Initial Purchaser in Sections 4 and 8 of this
Agreement, (ii) the due performance by the Company, Kolmar, Aerosol and
Piedmont of the covenants and agreements set forth in the Purchase
Agreement and the due performance by the Initial Purchaser of the covenants
and agreements set forth in this Agreement, (iii) the Initial Purchaser's
compliance with the offering and transfer procedures and restrictions
described in the Final Memorandum, (iv) the accuracy of the representations
and warranties made in accordance with this Agreement and the Final
Memorandum by purchasers to whom the Initial Purchaser initially resells
the Securities, and (v) that purchasers to whom the Initial Purchaser
initially resells the Securities receive a copy of the Final Memorandum
prior to such sale, the offer, sale and delivery by the Company of the
Securities to you as contemplated by the Final Memorandum, the execution
and delivery by Kolmar and Aerosol of their respective Guarantees as
contemplated by the Final Memorandum and the initial resale of the
Securities by you as contemplated by the Final Memorandum and Sections 4
and 8 of this Agreement, (A) do not require registration under the Act, (B)
do not require any Governmental Approval (as hereinafter defined), which
has not been obtained or made prior to the date hereof and (C) does not
require the qualification of the Indenture under the TIA, it being
understood that we express no opinion as to (a) any subsequent resale of
any Security, (b) state securities or "blue sky" laws and (c) any
Governmental Approval required as a result of the Initial Purchaser's
involvement, the involvement of any of the Initial Purchaser's affiliates
or the involvement of subsequent purchasers of the Securities from the
Initial Purchaser because of the Initial Purchaser's legal or regulatory
status or because of other facts specifically pertaining to the Initial
Purchaser, the Initial Purchaser's affiliates or such other purchasers.
-24-
"Governmental Approval" means any consent, approval, license, authorization
or validation of, or filing, recording or registration with, any
Governmental Authority pursuant to Applicable Laws.
(xiii) Assuming (i) the accuracy of the representations and warranties
of the Company, Kolmar, Aerosol and Piedmont set forth in Section 2 of the
Purchase Agreement and of the Initial Purchaser in Sections 4 and 8 of the
Purchase Agreement, (ii) the due performance by the Company, Kolmar,
Aerosol and Piedmont of the covenants and agreements set forth in the
Purchase Agreement and the due performance by the Initial Purchaser of the
covenants and agreements set forth in the Purchase Agreement, (iii) the
Initial Purchaser's compliance with the offering and transfer procedures
and restrictions described in the Final Memorandum, (iv) the accuracy of
the representations and warranties made in accordance with the Purchase
Agreement and the Final Memorandum by purchasers to whom the Initial
Purchaser initially resells the Securities, and (v) that purchasers to whom
the Initial Purchaser initially resells the Securities receive a copy of
the Final Memorandum prior to such sale, no Governmental Approval which has
not been obtained or taken and is not in full force and effect is required
to authorize or is required in connection with the execution, delivery or
performance of any of this Agreement, the Indenture or the Registration
Rights Agreement, except such as may be required (a) in connection with the
performance of the Registration Rights Agreement, by the federal securities
laws in connection with (i) registration thereunder of the Securities, the
Exchange Notes, the Private Exchange Notes, the Exchange Notes Guarantees
or the Private Exchange Notes Guarantees or (ii) qualification of the
Indenture under the TIA, (b) under state securities or "blue sky" laws in
connection with the offer and sale of the Securities or the registration
thereof or of the Exchange Notes, the Private Exchange Notes, the Exchange
Notes Guarantees or the Private Exchange Notes Guarantees and (c) by such
consents, authorizations, approvals, licenses orders, filings,
registrations or qualifications as have been obtained or made prior to the
date hereof. Such counsel will express no opinion, however, as to any such
consents, authorizations, approvals, licenses, orders, filings,
registrations or qualifications required as a result of the Initial
Purchaser's involvement, the involvement of any of the Initial Purchaser's
affiliates or the involvement of subsequent purchasers of the Securities,
the Exchange Notes, the Private Exchange Notes, the Exchange Notes
-25-
Guarantees or the Private Exchange Notes Guarantees from the Initial
Purchaser because of the Initial Purchaser's legal or regulatory status or
because of other facts specifically pertaining to the Initial Purchaser,
the Initial Purchaser's affiliates or such other purchasers.
(xiv) None of the Company or any of the Subsidiaries is, or immediately
after the sale of the Securities to be sold hereunder and the application
of the proceeds from such sale (as described in the Final Memorandum under
the caption "Use of Proceeds"), will be, an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(xv) Neither the consummation of the transactions contemplated by this
Agreement nor the sale, issuance, execution or delivery of the Securities
will violate Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
At the time the foregoing opinion is delivered, Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP shall additionally state that it has participated in
conferences with officers and other representatives of the Company and the
Subsidiaries, representatives of the Initial Purchaser and counsel for the
Initial Purchaser and representatives of the independent accountants of the
Company and the Subsidiaries, at which conferences the contents of the Final
Memorandum and related matters were discussed and, although such firm is not
passing upon, and does not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Final Memorandum and
has made no independent check or verification thereof, except to the extent
specified in subsections 7(a)(ix) and (x) above, on the basis of the foregoing,
no facts have come to such firm's attention that have led it to believe that the
Final Memorandum as of its date and as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading, except that such firm need express no opinion or
belief with respect to the financial statements, schedules and other financial
and statistical data included therein or excluded therefrom. For purposes of
the foregoing, such firm may note that the Final Memorandum has been prepared in
the context of a Rule 144A transaction and not as part of a registration
statement under the Securities Act.
In rendering the foregoing opinions, Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP may (i) state that their opinion is
-26-
limited to matters governed by the federal laws of the United States of America,
the laws of the States of New York and California and the General Corporation
Law of the State of Delaware, and (ii) rely, to the extent such counsel deems
proper, upon the representations set forth herein and on certificates of public
officials and officers of the Company, with respect to the accuracy of factual
matters contained therein which were not independently established; provided
that such certificates are provided to the Initial Purchaser.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for the Issuers, in
form and substance satisfactory to counsel for the Initial Purchaser, to the
effect that:
(i) Piedmont Laboratories, Inc. ("PIEDMONT") is duly incorporated and
is existing and in good standing under the laws of the State of Georgia,
and has the corporate power and authority to own its properties and to
conduct its business as described in the Final Memorandum. Piedmont is
duly qualified to do business as a foreign corporation in good standing in
all other jurisdictions where the ownership or leasing of its properties or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect.
(ii) The Company has the authorized, issued and outstanding capital
stock as set forth in the Final Memorandum under the caption
"Capitalization"; all of the outstanding shares of capital stock of the
Issuers have been duly authorized and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights; all of the outstanding shares of capital stock of the Guarantors
are owned, directly or indirectly, by the Company, free and clear of all
perfected security interests (other than those granted in connection with
the Credit Agreement) and, to the knowledge of such counsel, free and clear
of all other liens, encumbrances, equities and claims or restrictions on
transferability (other than those imposed by the Act and
-27-
the securities or "Blue Sky" laws of certain jurisdictions) or voting.
(iii) Except as set forth in the Final Memorandum (A) no options,
warrants or other rights to purchase from the Company or any Guarantor
shares of capital stock or ownership interests in the Company or any of the
Guarantors are outstanding, (B) no agreements or other obligations to
issue, or other rights to convert, any obligation into, or exchange any
securities for, shares of capital stock or ownership interests in the
Company or any Guarantor are outstanding and (C) no holder of securities of
the Company or any of the Guarantors is entitled to have such securities
registered under a registration statement filed pursuant to the
Registration Rights Agreement.
(iv) Piedmont has the corporate power and authority to execute,
deliver and perform each of its obligations under the Indenture, its
Guarantees, its Exchange Notes Guarantees and its Private Exchange Notes
Guarantees;
(v) The execution, delivery and performance of the obligations of
Piedmont under the Indenture, the Guarantees, the Exchange Notes
Guarantees, and the Private Exchange Notes Guarantees have been duly and
validly authorized by Piedmont.
(vi) Piedmont has the corporate power and authority to execute,
deliver and perform its obligations under the Registration Rights
Agreement; the execution, delivery and performance of the obligations of
Piedmont under the Registration Rights Agreement have been duly and validly
authorized by Piedmont.
(vii) Piedmont has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby; the execution, delivery and
performance of the obligations of Piedmont under this Agreement and the
consummation by Piedmont of the transactions contemplated thereby have been
duly and validly authorized by Piedmont. This Agreement has been duly
executed and delivered by Piedmont.
(viii) To such counsel's knowledge, no legal or governmental proceedings
are pending or threatened to which the Company or any of the Guarantors is
a party or to which any of their respective properties or assets is subject
which, if determined adversely to the Company or the Guar-
-28-
antors, would result, individually or in the aggregate, in a Material
Adverse Effect, or which seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the
Securities to be sold hereunder or the consummation of the other
transactions described in the Final Memorandum under the caption "Use of
Proceeds."
(ix) The execution, delivery and performance by the Issuers of this
Agreement, the Indenture and the Registration Rights Agreement and the
consummation of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and sale of the Securities to
the Initial Purchaser) will not conflict with or constitute or result in a
breach of or a default under (or an event which with notice or passage of
time or both would constitute a default under) or violation of any of (i)
the terms or provisions of any Contract listed on Schedule III hereto,
except for any such conflict, breach, violation, default or event which
would not, individually or in the aggregate, have a Material Adverse
Effect, (ii) the certificate of incorporation or bylaws of Piedmont, or
(iii) (assuming compliance with all applicable state securities or "Blue
Sky" laws and assuming the accuracy of the representations and warranties
of the Initial Purchaser in Section 8 hereof) any statute, law, judgment,
decree, order, rule or regulation of the United States of America, the
State of California or the State of Georgia known to such counsel to be
applicable to the Company or any of the Guarantors or any of their
respective properties or assets with respect to transactions contemplated
by this Agreement, except for any such conflict, breach or violation which
would not, individually or in the aggregate, have a Material Adverse
Effect.
(x) To the knowledge of such counsel based on their experience with
the Issuers and a review of their articles of incorporation (or similar
organizational document) and bylaws, none of the Issuers is (i) in
violation of its articles of incorporation (or similar organizational
document) or (in any material respect) its bylaws, (ii) in breach or
violation of any statute, law, judgment, decree, order, rule or regulation
which in such counsel's experience is normally applicable to the business
of any of them as described in the Final Memorandum or any of their
respective properties or assets, except for any such breach or violation
which would not, individually or in the aggregate, have a Material Adverse
Effect, or (iii) in breach or default under (nor has any event occurred
which,
-29-
with notice or passage of time or both, would constitute a default under)
or in violation of any of the terms or provisions of the Contracts listed
on Schedule III hereto, except for any such breach, default, violation or
event which would not, individually or in the aggregate, have a Material
Adverse Effect.
(xi) The Company and the Guarantors have obtained all Permits listed
on Schedule IV hereto, which to such counsel's knowledge are all permits
necessary to conduct the businesses now or proposed to be conducted by them
as described in the Final Memorandum, the lack of which would, individually
or in the aggregate, have a Material Adverse Effect. To such counsel's
knowledge each of the Company and the Guarantors has fulfilled and
performed all of its obligations with respect to such Permits in all
material respects and no event has occurred which allows, or after notice
or lapse of time would allow, revocation or termination thereof or results
in any other material impairment of the rights of the holder of any such
Permit.
(xii) To such counsel's knowledge, the Company and the Guarantors own
or possess adequate licenses or other rights to use all patents,
trademarks, service marks, trade names, copyrights and know-how necessary
to conduct the businesses now or proposed to be operated by them as
described in the Final Memorandum, and none of the Company or any of the
Guarantors has received any notice of infringement of or conflict with
asserted rights of others with respect to any patents, trademarks, service
marks, trade names, copyrights or know-how which, if such assertion of
infringement or conflict were sustained, would have a Material Adverse
Effect.
Such counsel has participated to a limited extent in the preparation
of the Final Memorandum and has reviewed the Sections described below in clauses
(A) and (B). From time to time such counsel has had discussions with the
officers, directors and employees of the Company, representatives of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, and representatives of the Initial Purchaser
concerning the information contained in the Final Memorandum. Based thereon, it
is such counsel's opinion that
(A) The Credit Agreement and the acquisition agreements conform in
all material respects to the descriptions thereof contained in the Final
Memorandum under the respective captions "Description of the Senior Secured
-30-
Credit Facility" and "Description of Acquisition Agreements".
(B) The statements set forth in the Final Memorandum under the
headings "Risk Factors -- Restrictions Imposed by Terms of the Company's
Indebtedness," "Business -- Environmental Compliance and Governmental
Regulation and Product Liability," and "Certain Relationships and Related
Transactions" insofar as such statements constitute a summary of legal
matters, documents, proceedings or conclusions of law referred to therein,
fairly represent such legal matters, documents, proceedings and
conclusions, in all material respects.
In rendering the foregoing opinions, Paul, Hastings, Xxxxxxxx & Xxxxxx
LLP may (i) state that their opinion is limited to matters governed by the
federal laws of the United States of America, the laws of the States of
California and Georgia, (ii) rely, to the extent such counsel deems proper, upon
the representations set forth herein and on certificates of public officials and
officers of the Company, with respect to the accuracy of factual matters
contained therein which were not independently established; provided that such
certificates have been provided to the Initial Purchaser.
References to the Final Memorandum in this subsection (b) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(c) On the Closing Date, the Initial Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser, dated
as of the Closing Date and addressed to the Initial Purchaser, of Xxxxxx Xxxxxx
& Xxxxxxx, counsel for the Initial Purchaser, with respect to certain legal
matters relating to this Agreement and such other related matters as the Initial
Purchaser may reasonably require. In rendering such opinion, Xxxxxx Xxxxxx &
Xxxxxxx shall have received and may rely upon such certificates and other
documents and information as it may reasonably request to pass upon such
matters.
(d) The Initial Purchaser shall have received from each of Deloitte &
Touche LLP, KPMG Peat Marwick LLP, Coopers & Xxxxxxx L.L.P. and Xxxxx, Xxxxxx &
Company, P.C. a comfort letter or letters dated the date hereof and the Closing
Date, in form and substance satisfactory to counsel for the Initial Purchaser.
-31-
(e) The representations and warranties of the Issuers contained in
this Agreement shall be true and correct in all material respects on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date; the statements of the Issuers' officers made pursuant to any
certificate delivered in accordance with the provisions hereof shall be true and
correct in all material respects on and as of the date made and on and as of the
Closing Date; the Issuers shall have performed in all material respects all
covenants and agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date; and, except as
described in the Final Memorandum (exclusive of any amendment or supplement
thereto after the date hereof), subsequent to the date of the most recent
financial statements in such Final Memorandum, there shall have been no event or
development, and no information shall have become known, that, individually or
in the aggregate, has or would be reasonably likely to have a Material Adverse
Effect.
(f) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(g) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), none of the Company or any of the Subsidiaries shall have
sustained any loss or interference with respect to its business or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slowdown or work stoppage or
from any legal or governmental proceeding, order or decree, which loss or
interference, individually or in the aggregate, has or would be reasonably
likely to have a Material Adverse Effect.
(h) The Initial Purchaser shall have received a certificate of each
of the Issuers, dated the Closing Date, signed on behalf of each of the Issuers
by its Chairman of the Board, President or any Senior Vice President and the
Chief Financial Officer, to the effect that:
(i) The representations and warranties of the Issuers contained in
this Agreement are true and correct in all material respects on and as of
the date hereof and on and as of the Closing Date, and the Issuers have
performed in all material respects all covenants and agreements and
satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date (with respect to Sections 7(a),
(b) and (c), satisfied in all material respects);
-32-
(ii) At the Closing Date, except as disclosed in the Final Memorandum,
since the date hereof or since the date of the most recent financial
statements in the Final Memorandum (exclusive of any amendment or
supplement thereto after the date hereof), no event or development has
occurred, and no information has become known, that, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse
Effect; and
(iii) To such officer's knowledge, the sale of the Securities hereunder
has not been enjoined (temporarily or permanently).
(i) On the Closing Date, the Initial Purchaser shall have received
the Registration Rights Agreement executed by each of the Issuers.
(j) The Indenture shall have been duly executed and delivered by each
Issuer and the Trustee, and the Notes and the Guarantees shall have been duly
executed by the Company and the Guarantors, respectively, and the Notes shall
have been duly authenticated by the Trustee;
(k) The Initial Purchaser shall have received a true and correct copy
of the Acquisition Agreement and any amendments thereto, and there shall have
been no material amendments, alterations, modifications or waivers of any
provisions of the Acquisition Agreement since the date of this Agreement.
(l) The Initial Purchaser shall have received a true and correct copy
of the Credit Agreement and any amendments or waivers thereto and there shall
have been no amendments, alterations, modifications or waivers of any provisions
of the Credit Agreement since the date of this Agreement other than consent
thereunder to permit the Indebtedness evidenced by the Securities and such other
amendments or waivers as may be satisfactory to the Initial Purchaser.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Subsidiaries as
they shall have heretofore reasonably requested.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial
-33-
Purchaser and counsel for the Initial Purchaser. The Company shall furnish
to the Initial Purchaser such conformed copies of such documents, opinions,
certificates, letters, schedules and instruments in such quantities as the
Initial Purchaser shall reasonably request.
8. OFFERING OF SECURITIES; RESTRICTIONS ON TRANSFER. (a) The
Initial Purchaser represents and warrants (as to itself only) that it is a QIB
and that it is not acquiring the Securities with any present intention of
offering or selling any of the Securities in any transaction that would violate
the Act or the securities laws of any state of the United States or any other
applicable jurisdiction. The Initial Purchaser agrees with the Issuers (as to
itself only) that (i) it has not and will not solicit offers for, or offer or
sell, the Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act or in
a manner that the initial purchaser reasonably believes; and (ii) it has and
will solicit offers for the Securities only from, and will offer the Securities
only to (A) in the case of offers inside the United States, persons whom the
Initial Purchaser reasonably believes to be QIBs or, if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to the Initial
Purchaser that each such account is a QIB, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A, and, in each case,
in transactions under Rule 144A and (B) in the case of offers outside the United
States, to persons other than U.S. persons in reliance upon Regulation S of the
Act ("foreign purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on a discretionary basis
for foreign beneficial owners (other than an estate or trust)); PROVIDED,
HOWEVER, that, in the case of this clause (B), in purchasing such Securities
such persons are deemed to have represented and agreed as provided under the
caption "Transfer Restrictions" contained in the Final Memorandum (or, if the
Final Memorandum is not in existence, in the most recent Memorandum).
(b) The Initial Purchaser represents and warrants (as to itself only)
with respect to offers and sales outside the United States that (i) it has and
will comply with all applicable laws and regulations in each jurisdiction in
which it acquires, offers, sells or delivers Securities or has in its possession
or distributes any Memorandum or any such other material, in all cases at its
own expense; (ii) the Securities have not been and will not be offered or sold
within the United
-34-
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Act or pursuant to an exemption from the
registration requirements of the Act; (iii) it has offered the Securities and
will offer and sell the Securities (A) as part of its distribution at any time
and (B) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date, only in accordance with Rule 903 of Regulation S
and, accordingly, neither it nor any persons acting on its behalf have engaged
or will engage in any directed selling efforts (within the meaning of Regulation
S) with respect to the Securities, and any such persons have complied and will
comply with the offering restrictions requirement of Regulation S; and (iv) it
agrees that, at or prior to confirmation of sales of the Securities, it will
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the
United States Securities Act of 1933 (the "Securities Act") and may
not be offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of the distribution of
the Securities at any time or (ii) otherwise until 40 days after the
later of the commencement of the offering and the closing date of the
offering, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above
have the meaning given to them in Regulation S."
Terms used in this Section 8(b) and not defined in this Agreement have the
meanings given to them in Regulation S. The Initial Purchaser acknowledges that
the Company, and for purposes of the opinions to be delivered to the Initial
Purchaser pursuant to this Agreement, counsel to the Company and counsel to the
Initial Purchaser, will rely upon the accuracy and truth of the foregoing
representations, and the Initial Purchaser hereby consents to such reliance.
9. INDEMNIFICATION AND CONTRIBUTION. (a) The Issuers jointly and
severally agree to indemnify and hold harmless the Initial Purchaser and the
affiliates, directors, officers, agents, representatives and employees of the
Initial Purchaser or their affiliates, and each other person, if any, who
controls the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Initial Purchaser
-35-
or such other person may become subject under the Act, the Exchange Act or
otherwise, insofar as any such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or
any application or other document, or any amendment or supplement thereto,
executed by an Issuer or based upon written information furnished by or on
behalf of an Issuer filed in any jurisdiction in order to qualify the
Securities under the securities or "Blue Sky" laws thereof or filed with
any securities association or securities exchange (each an "APPLICATION");
or
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, a material fact
required to be stated therein or necessary to make the statements therein
not misleading,
and will reimburse, as incurred, the Initial Purchaser and each such
other person for any legal or other expenses incurred by the Initial Purchaser
or such other person in connection with investigating, defending against or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action subject to the limitations set forth in Section 9(c)
hereof; PROVIDED, HOWEVER, the Issuers will not be liable (i) in any such case
to the extent that any such loss, claim, damage, or liability arises out of or
is based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in any Memorandum or any amendment or supplement thereto
or any Application in reliance upon and in conformity with written information
concerning the Initial Purchaser furnished to an Issuer by the Initial Purchaser
specifically for use therein or (ii) with respect to the Preliminary Memorandum
or any Final Memorandum, to the extent that any such loss, claim, damage or
liability arises solely from the fact that the Initial Purchaser sold Securities
to a person to whom there was not sent or given a copy of the Final Memorandum
(as amended or supplemented) at or prior to the written confirmation of such
sale if the Company shall have previously furnished copies thereof to the
Initial Purchaser in accordance with Section 5(d) hereof and the Final
Memorandum (as amended or supplemented) would have corrected any such untrue
statement or omission. This indemnity agreement will be in addition to any
liability that the Issuers may otherwise have to the indemnified parties. The
Issuers shall not be li-
-36-
able under this Section 9 for any settlement of any claim or action effected
without their prior written consent, which shall not be unreasonably withheld
(for purposes of this sentence, it is deemed reasonable to withhold consent if
such settlement (A) does not include an unconditional written release of the
Issuers, in form and substance reasonably satisfactory to the Issuers, from all
liability on claims that are the subject matter of such proceeding or
(B) includes any statement as to an admission of fault, culpability or failure
to act by or on behalf of any Issuer).
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Issuers, their respective directors, their respective officers, affiliates,
agents, representatives and employees or their affiliates and each person, if
any, who controls an Issuer within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which an Issuer or any such director, officer or controlling
person may become subject under the Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Memorandum or any amendment or
supplement thereto or any Application, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated in any
Memorandum or any amendment or supplement thereto or any Application, or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information concerning the Initial Purchaser, furnished
to an Issuer by the Initial Purchaser specifically for use therein; and subject
to the limitation set forth immediately preceding this clause, will reimburse,
as incurred, any reasonable legal or other expenses incurred by an Issuer or any
such director, officer or controlling person in connection with investigating or
defending against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action in respect thereof. This
indemnity agreement will be in addition to any liability that the Initial
Purchaser may otherwise have to the indemnified parties. The Initial Purchaser
shall not be liable under this Section 9 for any settlement of any claim or
action effected without its consent, which shall not be unreasonably withheld.
The Issuers shall not, without the prior written consent of the Initial
Purchaser, effect any settlement or compromise of any pending or threatened
proceeding in respect of which the Initial Purchaser is or could have been a
party, or indemnity could have been
-37-
sought hereunder by the Initial Purchaser, unless such settlement (A) includes
an unconditional written release of the Initial Purchaser, in form and substance
reasonably satisfactory to the Initial Purchaser, from all liability on claims
that are the subject matter of such proceeding and (B) does not include any
statement as to an admission of fault, culpability or failure to act by or on
behalf of the Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action for which such
indemnified party is entitled to indemnification under this Section 9, such
indemnified party will, if a claim in respect thereof is to be made against
the indemnifying party under this Section 9, notify the indemnifying party of
the commencement thereof in writing; but the omission to so notify the
indemnifying party (i) will not relieve it from any liability under paragraph
(a) or (b) above unless and to the extent such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification
obligation provided in paragraphs (a) and (b) above. In case any such action
is brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party; PROVIDED,
HOWEVER, that if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest (as defined by such counsel), (ii) the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after receipt by the indemnifying party of notice of
the institution of such action, then, in each such case, the indemnifying
party shall not have the right to direct the defense of such action on behalf
of such indemnified party or parties and such indemnified party or parties
shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed
to
-38-
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in addition to
local counsel) in any one action or separate but substantially similar
actions in the same jurisdiction arising out of the same general allegations
or circumstances, designated by BT Alex. Xxxxx Incorporated in the case of
paragraph (a) of this Section 9 or the Company in the case of paragraph (b)
of this Section 9, representing the indemnified parties under such paragraph
(a) or paragraph (b), as the case may be, who are parties to such action or
actions) or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified
party without the prior written consent of the indemnifying party (which
consent shall not be unreasonably withheld), unless such indemnified party
waived in writing its rights under this Section 9, in which case the
indemnified party may effect such a settlement without such consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to, or insufficient to
hold harmless, an indemnified party in respect of any losses, claims, damages or
liabilities (or actions in respect thereof), each indemnifying party, in order
to provide for just and equitable contribution, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party on the other from the
offering of the Securities or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative benefits
but also the relative fault of the indemnifying party or parties on the one hand
and the indemnified party on the other in connection with the statements or
omissions or alleged statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof). The relative
benefits received by the Issuers on the one hand and
-39-
the Initial Purchaser on the other shall be deemed to be in the same proportion
as the total proceeds from the offering (before deducting expenses) received by
the Issuers bear to the total discounts and commissions received by the Initial
Purchaser. The relative fault of the parties shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuers on the one hand, or the Initial
Purchaser on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission or
alleged statement or omission, and any other equitable considerations
appropriate in the circumstances. The Issuers and the Initial Purchaser agree
that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations referred
to in the first sentence of this paragraph (d). Notwithstanding any other
provision of this paragraph (d), the Initial Purchaser shall not be obligated to
make contributions hereunder that in the aggregate exceed the total discounts,
commissions and other compensation received by such Initial Purchaser under this
Agreement, less the aggregate amount of any damages that the Initial Purchaser
has otherwise been required to pay by reason of the untrue or alleged untrue
statements or the omissions or alleged omissions to state a material fact, and
no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls the Initial Purchaser within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Initial Purchaser, and each director
of an Issuer, each officer of an Issuer and each person, if any, who controls an
Issuer within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, shall have the same rights to contribution as the Issuers.
10. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Issuers, their
respective officers and the Initial Purchaser set forth in this Agreement or
made by or on behalf of them pursuant to this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf of
the Issuers, any of their respective officers or directors, the Initial
Purchaser or any controlling person referred to in Section 9 hereof and
(ii) delivery of and payment for the Securities. The respective agreements,
covenants,
-40-
indemnities and other statements set forth in Sections 6, 9 and 15 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
11. TERMINATION. (a) This Agreement may be terminated in the sole
discretion of the Initial Purchaser by notice to the Company given prior to the
Closing Date in the event that any of the Issuers shall have failed, refused or
been unable to perform all obligations and satisfy all conditions on its part to
be performed or satisfied hereunder at or prior thereto or, if at or prior to
the Closing Date:
(i) the Company or any of the Subsidiaries shall have sustained any
loss or interference with respect to its businesses or properties from
fire, flood, hurricane, accident or other calamity, whether or not covered
by insurance, or from any strike, labor dispute, slowdown or work stoppage
or any legal or governmental proceeding, which loss or interference, in the
sole judgment of the Initial Purchaser, has had or has a Material Adverse
Effect, or there shall have been, in the sole judgment of the Initial
Purchaser, any event or development that, individually or in the aggregate,
has or could be reasonably likely to have a Material Adverse Effect
(including without limitation a change in control of the Company or any of
the Subsidiaries), except in each case as described in the Final Memorandum
(exclusive of any amendment or supplement thereto);
(ii) Since January 1, 1998, trading in securities generally on the New
York Stock Exchange, American Stock Exchange or the NASDAQ National Market
shall have been suspended or minimum or maximum prices shall have been
established on any such exchange or market;
(iii) a banking moratorium shall have been declared by New York or
United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity
or emergency, or (C) any material change in the financial markets of the
United States which, in the case of (A), (B) or (C) above and in the sole
judgment of the Initial Purchaser, makes it impracticable or inadvisable to
proceed with the offering or the delivery of the Securities as contemplated
by the Final Memorandum; or
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(v) any securities of the Company shall have been downgraded or
placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Section 10 hereof.
12. INFORMATION SUPPLIED BY THE INITIAL PURCHASER. The statements
set forth in the last paragraph of the cover page and the third, fifth, sixth
and seventh paragraphs under the heading "Private Placement" in the Final
Memorandum (to the extent such statements relate to the Initial Purchaser)
constitute the only information furnished by the Initial Purchaser to the
Issuers for the purposes of Sections 2(a) and 9 hereof.
13. NOTICES. All communications hereunder shall be in writing and,
if sent to the Initial Purchaser, shall be mailed or delivered to BT Alex.
Xxxxx Incorporated, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department, with a copy to Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxxx; if sent to
the Issuers, shall be mailed or delivered to the Company at 000 Xx. Xxxxx
Xxxxxx, Xxxx xx Xxxxxxxx, XX 00000, Attention: Chief Financial Officer, with a
copy to Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxx Xxxxxx, Xxx
Xxxxxxx, XX 00000-0000, Attention: Xxxxxx X. Xxxxx.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; and one business
day after being timely delivered to a next-day air courier.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser, the Issuers and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the indemnities
of the Issuers contained in Section 9 of this Agreement shall also be for the
benefit of the affiliates, directors, officers, agents, representatives and
employees of the Initial Purchaser or their affiliates and any person or persons
-42-
who control the Initial Purchaser within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act and (ii) the indemnities of the Initial Purchaser
contained in Section 9 of this Agreement shall also be for the benefit of the
directors, officers, affiliates, agents, representatives and employees and their
affiliates of the Company and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Securities from the Initial Purchaser will be deemed a successor
because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between the Company,
the Guarantors set forth below and the Initial Purchaser.
Very truly yours,
OUTSOURCING SERVICES GROUP, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial
Officer
AEROSOL SERVICES COMPANY, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial
Officer
KOLMAR LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial
Officer
PIEDMONT LABORATORIES, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial
Officer
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The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
BT ALEX. XXXXX INCORPORATED
By: /s/ XXXXXXXX XXXXXXXXX
--------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Vice President
SCHEDULE I
SUBSIDIARIES
Jurisdiction of
Name Stockholder(s) Incorporation
---- -------------- ---------------
Aerosol Services Company, Outsourcing Services California
Inc. Group, Inc.
Kolmar Laboratories, Inc. Outsourcing Services Delaware
Group, Inc.
Piedmont Laboratories, Inc. Outsourcing Services Georgia
Group, Inc.
Kolmar Canada Inc. Kolmar Laboratories, Inc. Canada
Kolmar de Mexico, X.X. xx Xxxxxx Laboratories, Inc. Mexico
X.X.
Xxxxxx (Aust.) Pty. Ltd. Kolmar Laboratories, Inc. Australia
SCHEDULE II
UNITED STATES JURISDICTIONS IN WHICH THE
ISSUERS OWN OR LEASE PROPERTY
OSG: Delaware
Aerosol: California
Piedmont: Xxxxxxx
Xxxxxx: Delaware
California
New York
Pennsylvania
SCHEDULE III
MATERIAL AGREEMENT OF THE ISSUERS
