EXHIBIT 10.24
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement and Mutual Release (this "Agreement") is
entered into as of the 8 th day of December, 2000, by and among Outsourcing
Services Group, Inc., a Delaware corporation ("OSG"), Piedmont Laboratories,
Inc., a Georgia corporation ("PLI"), and Xxxxxx Xxxxxxxxx, an individual
("Indemnitor").
R E C I T A L S
A. OSG and Indemnitor are parties to that certain Stock Purchase
Agreement, dated June 26, 1996 (the "Purchase Agreement"), pursuant to which OSG
acquired all of Indemnitor's interest in PLI, and Indemnitor became a
stockholder of OSG.
B. In connection with the transactions contemplated by the Purchase
Agreement, Indemnitor agreed to indemnify OSG for certain losses resulting from
breaches of representations and warranties made in the Purchase Agreement, and
in particular for environmental matters relating to PLI (the "Indemnification
Obligations"), in an mount not to exceed One Million Dollars ($1,000,000) (the
"Indemnity Cap").
C. OSG made claims against Indemnitor to recover indemnifiable expenses
incurred by OSG and PLI in connection with litigation and environmental matters
following the closing of the transactions under the Purchase Agreement.
D. The parties hereto desire to settle the outstanding obligations of
Indemnitor with respect to the Indemnification Obligations, on the terms and
conditions set forth in this Agreement.
E. The parties hereto, on behalf of themselves and on behalf of all
their respective parent corporations, subsidiary corporations, affiliates,
predecessors, successors and owners, and all of their respective officers,
directors, partners, members, employees, agents, servants, consultants,
advisors, attorneys, heirs, executors, representatives, administrators,
affiliates, predecessors, successors and assigns (all such released parties
being referred to herein collectively as the "Released Parties"), desire to
fully, finally and forever settle and compromise the claims or causes of action
held or asserted by each one against the other in connection with or arising out
of the Indemnification Obligations, the Purchase Agreement, and all other
agreements and matters related thereto, except as specifically stated below.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties, the
parties hereby agree as follows:
A G R E E M E N T:
1. SETTLEMENT OF INDEMNIFICATION OBLIGATIONS.
(a) In settlement of the Indemnification Obligations, Indemnitor
shall return to OSG that number of shares of common stock of OSG (the "Common
Shares"), which, when valued at Sixteen Dollars ($16.00) per share, has an
aggregate value equal to the Indemnity Cap, or Sixty-Two Thousand Five Hundred
(62,500) Common Shares (the "Settlement Shares"). Indemnitor shall deliver to
OSG stock certificates representing the Settlement Shares concurrently with the
execution of this Agreement. Upon receipt of certificate(s) representing the
Settlement Shares, OSG shall issue to Indemnitor a certificate for the balance
of the Common Shares represented by the surrendered certificate, if required.
(b) Indemnitor represents and warrants to OSG that he is the record
and beneficial owner of the Settlement Shares, and there are no liens or
encumbrances on the Settlement Shares, including the right of any third party to
purchase, or the obligation of Indemnitor to sell, the Settlement Shares, except
for any restrictions in OSG's Amended and Restated Stockholder Agreement, as
amended (the "Stockholder Agreement").
2. ADDITIONAL OBLIGATIONS OF THE PARTIES. In connection with the
settlement of the Indemnification Obligations, the parties further agree to the
following:
(a) Indemnitor will resign his position as a member on the Boards of
Directors of OSG and each of its subsidiaries (the "Boards"), including PLI.
Such resignation shall be effective immediately following the execution of this
Agreement by Indemnitor, and Indemnitor shall no longer be entitled to receive
any fees associated with his membership on the Boards.
(b) Indemnitor acknowledges and agrees that, except as specifically
stated otherwise in this Agreement, the remaining Common Shares beneficially
owned by him shall remain subject to the Stockholder Agreement, as the same may
be amended or revised, in all respects, including the provisions of Sections 1
and 6 regarding the transfer of the Common Shares.
(c) Notwithstanding the foregoing, OSG shall continue to provide
Indemnitor with the same group health benefits that he presently receives, or is
entitled to receive, on behalf of himself and his spouse, as a member of the
Boards, through August 1, 2001.
3. MUTUAL RELEASES. Except for any continuing obligations of OSG
pursuant to Section 2(c) of this Agreement, and Indemnitor pursuant to the
Indemnification Obligations described in Section 15, OSG and PLI, on the one
hand, and Indemnitor, on the other hand, do hereby release and discharge and
agree to hold harmless each other and all of the other party's respective
Released Parties from any and all rights, claims, debts, demands, acts,
agreements, liabilities, obligations, damages, costs, fees (including, without
limitation, those of attorneys and accountants), expenses, actions and/or causes
of action of every nature, character and description, whether known or unknown,
suspected or unsuspected, which the parties may now have or hereafter have or
claim to have against one another by reason of any matter, act or omission,
arising out of or related in any way to the Indemnification Obligations, the
Purchase Agreement, or any allegations, matter or agreement contained therein or
related thereto.
4. WAIVER OF CIVIL CODE SECTION 1542 AND RELATED STATUTES. The parties
hereto understand and agree that the releases provided herein extend to all
claims released above whether known or unknown, suspected or unsuspected. As to
those matters released herein only, the parties expressly waive and relinquish
any and all rights they may have under California Civil Code Section 1542, or
any similar state law, which provides as follows:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
The parties expressly waive and release any rights and benefits which they have
or may have under any similar law or rule of any other jurisdiction pertaining
to the matters released herein. It is the intention of each party through this
Release and with the advice of counsel to fully, finally and forever settle and
release the claims and disputes existing between them as set forth above. In
furtherance of such intention, the releases herein given shall be and remain in
effect as full and complete releases of such matters notwithstanding the
discovery of any additional claims or facts relating thereto.
5. BINDING UPON SUCCESSORS AND ASSIGNS; EFFECTIVENESS. This Agreement
shall be binding upon and shall inure to the benefit of the successors and
assigns of the parties hereto.
6. REPRESENTATIONS AND WARRANTIES. The parties represent and warrant to
and agree with each other as follows:
(a) Each party has received independent legal advice from attorneys
of its choice with respect to the advisability of making this settlement and the
releases provided herein and with respect to the advisability of executing this
Agreement.
(b) Except as expressly stated in this Agreement, no party has made
any statement or representation to any other party regarding any fact, which
statement or representation is relied upon by any other party in entering into
this Agreement. In connection with the execution of this Agreement or the making
of the settlement provided for herein, no party to this Agreement has relied
upon any statement, representation or promise of any other party not expressly
contained herein.
(c) This Agreement is intended to be final and binding upon the
parties and is further intended to be effective as a full and final accord and
satisfaction among them regardless of any claims of fraud, misrepresentation,
concealment of fact, mistake of fact or law, duress, or any other circumstances
whatsoever. Each party relies upon the finality of this Agreement as a material
factor inducing that party's execution of this Agreement.
(d) There are no other agreements or understandings between the
parties hereto relating to the matters referred to in this Agreement.
(e) The parties hereto and their counsel have made such
investigation of the facts pertaining to the releases contained herein as they
deem necessary.
(f) The terms of this Agreement are contractual and are the result
of negotiation among the parties.
(g) This Agreement has been carefully read by the parties hereto and
the contents thereof are known and understood by each of the parties. This
Agreement is signed freely by each party executing it.
(h) Each party covenants and agrees not to bring any action, claim,
suit or proceeding against any party hereto directly or indirectly regarding or
relating to the matters released hereby, and each further covenants and agrees
that this Agreement is a bar to any such claim, action, suit or proceeding,
except as described in Section 13 hereof.
7. ASSIGNMENT. The parties hereto, and each of them, represent and
warrant to each other that each is the sole and lawful owner of all right, title
and interest in and to every claim and other matter which each purports to
release herein, and that they have not heretofore assigned or transferred, or
purported to assign or transfer, to any person, firm, association, corporation
or other entity, any right, title or interest in any such claim or other matter.
In the event that such representation is false, and any such claim or matter is
asserted against any Released Party (and/or the successor of such party) by any
party or entity who is the assignee or transferee of such claim or matter, then
the party hereto who assigned or transferred such claim or matter shall fully
indemnify, defend and hold harmless the party against whom such claim or matter
is
asserted (and its successors) from and against such claim or matter and from all
actual costs, fees, expenses, liabilities and damages which that party (and/or
its successors) incurs as a result of the assertion of such claim or matter.
8. SURVIVAL OF WARRANTIES. The representations and warranties contained
in this Agreement are deemed to and do survive the execution hereof.
9. MODIFICATIONS. This Agreement may not be amended, canceled, revoked
or otherwise modified except by written agreement executed by all of the parties
to be charged with such modification.
10. ATTORNEYS' FEES. All parties hereto agree to pay their own costs
and attorneys' fees except as follows:
(a) In the event that any action, suit or other proceeding
(excepting any proceedings to enter and enforce judgment pursuant to
the terms of this Agreement) is instituted to remedy, prevent or obtain
relief from a breach of this Agreement, involving claims within the
scope of the releases contained in this Agreement, or pertaining to a
declaration of rights under this Agreement, the prevailing party, as
determined by the court, shall recover all of such party's attorneys'
fees incurred in each and every such action, suit or other proceeding,
including any and all appeals or petitions therefrom.
(b) As used herein, attorneys' fees shall be deemed, to the extent
allowed by law, to mean the full and actual costs of any legal services
actually performed in connection with the matters involved, calculated
on the basis of the usual fee charged by the attorneys performing such
services, and shall not be limited to "reasonable attorneys' fees" as
defined in any statute or rule of court.
11. SEVERABILITY. In the event any provision of this Agreement shall be
held to be void, voidable or unenforceable, the remaining provisions shall
remain in full force and effect.
12. GOVERNING LAW. This Agreement shall be construed in accordance with
and be governed by the laws of the State of Delaware.
13. VENUE. Any action, suit or other proceeding brought by or against
any of the parties hereto to enforce this Agreement shall be instituted and
maintained in any Federal or state court in the State of Delaware having proper
jurisdiction over the subject matter thereof.
14. WARRANTY OF AUTHORITY. Each party whose signature is affixed hereto
in a representative capacity represents and warrants that he is authorized to
execute this Agreement on behalf of and to bind the entity on whose behalf his
signature is affixed.
15. EXCLUSION OF CERTAIN CLAIMS. Notwithstanding the foregoing, the
parties hereto agree that no provision of this Agreement shall prevent OSG from
making a claim against the Indemnitor under the Indemnification Obligations with
respect to any assertion that the Indemnitor did not have valid title to the
stock of PLI at the time of the closing of the transactions contemplated by the
Purchase Agreement. OSG shall be entitled to proceed with any such claims as set
forth in Article VII of the Purchase Agreement, and may assert all rights and
remedies to which it is entitled, whether at law or at equity.
16. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes any and all other agreements, understandings,
negotiations, or discussions, either oral or in writing, express or implied,
relative to the matters which are the subject of this Agreement.
17. NOTICES. All notices or other communications required or permitted
hereunder shall be in writing, and shall be personally delivered or delivered by
overnight commercial carrier, sent by registered or certified mail, postage
prepaid, return receipt requested, telegraphed, delivered or sent by telex,
telecopy, cable or facsimile and shall be deemed received and effective upon the
earlier of (i) if personally delivered, the date of delivery to the address of
the person to receive such notice; (ii) if delivered by overnight commercial
carrier, one (1) day following the receipt of such communication by such carrier
from the sender, as shown on the sender's delivery receipt from such carrier;
(iii) if mailed, on the date of delivery as shown by the sender's registry or
certification receipt; (iv) if given by telegraph or cable, when delivered to
the telegraph company with charges prepaid; (v) if given by telex or telecopy,
when sent; or (vi) if sent by facsimile with confirmation of good transmission
and receipt, when sent. Any notice, request, demand, direction or other
communication sent by cable, telex or telecopy must be confirmed within
forty-eight (48) hours by letter mailed or delivered in accordance with the
foregoing in order to be deemed received and effective. The address of each
party for purposes of the delivery of notices hereunder is as follows:
OSG/PLI: Outsourcing Services Group, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxx
Facsimile No.: (000) 000-0000
With a copy to: Xxxxx X. Xxxxxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
17th Floor
000 Xxxx Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Indemnitor: Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxx Xxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
With a copy to: Xxxxx X. Xxxxx, Esq.
Seyfarth Xxxx
Suite 4200
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: (000) 000-0000
Notice of change of address shall be given by written notice in the manner
detailed in this Section 17. Rejection or other refusal to accept or the
inability to deliver because of changed address of which no notice was given
shall be deemed to constitute receipt of the notice, demand, request or
communication sent.
18. FURTHER ACTS. Each party hereto agrees to perform any further acts
and execute and deliver any further documents which reasonably may be necessary
to carry out the provisions and intent of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when executed and delivered shall be an original,
and all of which when executed shall constitute one and the same instrument. For
this purpose, the parties agree that facsimile signatures shall be accepted as
originals.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"OSG" OUTSOURCING SERVICES GROUP, INC.,
a Delaware corporation
By: /s/ Xxxxx Xxxxxx
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Print Name: Xxxxx Xxxxxx
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Print Title: Chief Financial Officer
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PIEDMONT LABORATORIES, INC.,
a Georgia corporation
By: /s/ Xxxxx Xxxxxx
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Print Name: Xxxxx Xxxxxx
-------------------------
Print Title: Chief Financial Officer
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"INDEMNITOR" /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
