AMENDMENT TO STOCKHOLDER AGREEMENT
THIS AMENDMENT TO STOCKHOLDER AGREEMENT (this "Amendment") is made and
entered into as of December 31, 1997, among OUTSOURCING SERVICES GROUP,
INC. (the "Company"); XXXXXX + XXXXXX INVESTMENT PARTNERSHIP, L.P., a
Delaware limited partnership ("GMIP"); ASC INVESTMENT PARTNERS, L.P., a
Delaware limited partnership ("ASCP"); HARBOURVEST VENTURE PARTNERS IV
DIRECT FUND, L.P. (presently named Xxxxxxx Venture Partners IV-Direct Fund,
L.P. and in the process of changing its name ) ("HarbourVest", and
sometimes with GMIP and ASCP referred to as the "Institutional Investors"),
and certain Founders and Management Shareholders, parties hereto that own
at least a majority of the shares of Common Stock that are owned by all
Founders and Management Shareholders.
R E C I T A L S
A. The Company, GMIP, ASCP, the Founders, HarbourVest and Management
Shareholders are parties to the Amended and Restated Stockholders
Agreement, dated as of June 30, 1997 (the "Agreement"). Capitalized terms
used herein and not otherwise defined, have the meanings given in the
Agreement.
B. The Company is party to a Share and Asset Purchase Agreement,
whereby the Company has agreed to acquire certain assets of CCL Industries
Inc. ("CCL") and the issued and outstanding shares of Kolmar Laboratories,
Inc. ("Kolmar") from CCL Industries Corporation, a wholly owned indirect
subsidiary of CCL (the "Kolmar Acquisition").
C. The Company intends to issue additional shares of its Common Stock
in order to finance the Kolmar Acquisition, including 1,100,000 shares to
an Affiliate of HarbourVest, which is becoming a party to the Agreement.
D. Section 11 to the Agreement provides that it may be amended by the
written agreement of the Company, the Institutional Investors by a required
vote, and the Founders and Management Shareholders owning a majority of the
shares of Common Stock that are owned by all the Founders and Management
Shareholders.
TERMS AND PROVISIONS
In consideration of the foregoing recitals and of the following terms
and provisions, it is agreed:
1. HarbourVest Name Change. All references in the Agreement to Xxxxxxx
shall now be to HarbourVest and its Affiliates.
2. Change in Board Makeup. Section 7.1 of the Agreement is hereby
amended and restated in its entirety as follows:
"7.1 Board Makeup. Until the earlier of (a) an IPO, (b) the date
upon which (i) GMIP and its Affiliates own in the aggregate fewer
than 33% of the greatest number of shares of Common Stock owned
by GMIP and such Affiliates at any time and (ii) HarbourVest and
its Affiliates own in the aggregate fewer than 33% of the
greatest number of shares of Common Stock owned by HarbourVest
and such Affiliates at any time, or (c) June 30, 2007, each of
the Shareholders agrees that from and after June 30, 1997 such
Shareholder will use his best efforts to nominate and elect and
will vote all of the shares of Common Stock owned or held of
record by him to elect and, thereafter from such period, to
continue in office a Board consisting of nine members, three of
whom shall be designated by the Founders and shall be reasonably
acceptable to GMIP; two of whom shall be designated by
HarbourVest; three of whom shall be designated by GMIP, and one
of whom shall be Xxxxxxxxxxx Xxxxxx, so long as he is the Chief
Executive Officer of the Company and is willing to serve. The
persons designated pursuant to this Section 7.1 by the Founders,
HarbourVest and GMIP may be changed from time to time by the
Founders, HarbourVest and GMIP, respectively, provided, however,
that Xxxxxx X. Xxx, Xxxxxx X. Xxx and Xxxxxx X. Xxxxxxxxx shall
each be one of the directors named by the Founders if he is
willing to serve as long as each such person holds at least
thirty-three percent (33%) of the Common Stock he now holds. If
both Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxxx are no longer
principals of the manager of GMIP, then HarbourVest shall have
the right to name one of the directors GMIP would otherwise have
the right to name, provided that HarbourVest is, at such time,
the beneficial owner of at least ten percent (10%) of the
Company's Common Stock. If either GMIP and its affiliates or
HarbourVest and its affiliates no longer hold at least thirty
three percent (33%) of the highest number of shares of the Common
Stock held at any time by them, the rights of GMIP, or
HarbourVest, as appropriate, to name a director shall terminate.
On each date that any one of Xxxxxx Xxx, Xxxxxx Xxx and Xxxxxx
Xxxxxxxxx ceases to own at least thirty three percent (33%) of
the Common Stock he now holds, the number of directors to be
named by the Founders shall decrease by one, and when all three
of such Founders cease to own at least thirty three percent (33%)
of the Common Stock they each now hold, the Founders shall no
longer have the right to name any directors. If Xxxxxxxxxxx
Xxxxxx ceases to be a director because he is no longer Chief
Executive Officer, Xx. Xxxxxx'x seat will be filled by the
incoming Chief Executive Officer. The positions as directors
formerly held by directors named by GMIP, HarbourVest or Founders
shall, once the other provisions of this Section 7.1 no longer
govern, be elected under the laws of Delaware without regard to
this Section 7.1."
3. Increase to Authorized Shares/Options. Section 10.3(a) of the
Agreement shall be amended and restated in its entirety as follows:
"(a) Issue any additional shares of Common Stock, except
for up to 750,000 shares which the Company may issue and sell
(directly or upon the exercise of stock options) to persons who
are, or effective on purchasing shares become, employees of or
substantially full-time consultants to the Company and become
Management Shareholders;"
4. Consents.
(a) Kolmar Acquisition. The undersigned hereby consent to the Kolmar
Acquisition and the issuance of up to 3,000,000 shares of the Company's
Common Stock in connection with the Kolmar Acquisition.
(b) Certificate of Amendment. The undersigned hereby consent to the
filing of Certificate of Amendment, dated as of January 8, 1998, to the
Company's Certificate of Incorporation in connection with the Kolmar
Acquisition, which Certificate of Amendment increases the authorized shares
of the Company's Common Stock from 2 million to 6 million and which amends
certain provisions of the Company's Preferred Stock.
(c) Ratification. The undersigned hereby ratify all actions taken by
or on behalf of the Company prior to the effective date hereof in connection
with Section 5(a) and (b) above.
5. Further Assurances. Each party hereto or person subject hereto
shall do and perform or cause to be done and performed all such further
acts and things and shall execute and deliver all such other agreements,
certificates, instruments and documents as any other party hereto or person
subject hereto may reasonably request in order to carry out the intent and
accomplish the purposes of this Amendment and the consummation of the
transactions contemplated hereby.
6. Governing Law. This Amendment and the rights and obligations of the
parties hereunder and the persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of
Delaware, without giving effect to the choice of law principles thereof.
7. Invalidity of Provision. The invalidity or unenforceability of any
provision of this Amendment in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Amendment in that
jurisdiction or the validity or enforceability of this Agreement, including
that provision, in any other jurisdiction.
8. Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience and shall not control or affect the
meaning or construction of any provision hereof. This Amendment may be
executed in any number of counterparts, each of which shall be deemed to be
an original and which together shall constitute one and the same
instrument.
9. Modifications and Conflicts. Except as expressly modified and
supplemented herein, all of the terms and conditions of the Agreement
remain in full force and effect; provided, however, that in the event of
any conflict between the provisions of the Agreement and the provisions of
this Amendment, the provisions of this Amendment shall control.
10. Integration. The Agreement as amended by this Amendment supersedes
all prior agreements or understandings between the parties relating to its
subject matter. There are no oral agreements pertaining to the subject
matter of the Agreement as amended by this Amendment, and this Amendment
shall supersede all oral representations and statements by the parties.
This Amendment may be modified only by as provided for in the Agreement.
11. Effectiveness. This Amendment shall become effective upon the
closing of the Kolmar Acquisition. Provided such closing occurs, the
"effective date" for purposes of this Amendment shall be December 31, 1997.
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE AMENDMENT TO STOCKHOLDER AGREEMENT]
IN WITNESS WHEREOF, this Amendment has been signed by each of the
parties hereto on the date opposite such party's signature hereto, and
shall be effective as of the date first above written.
OUTSOURCING SERVICES GROUP, INC.,
Date: 12/31/97 By: /s/ Xxxxxx Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx,
Chief Financial Officer
By: /s/ Xxxxxx Xxx
---------------------------------
Xxxxxx X. Xxx, Chairman
XXXXXX + XXXXXX INVESTMENT
PARTNERSHIP, L.P.
By: Xxxxxx + Xxxxxx Partners, L.P.,
General Partner
Date: 12/31/97 By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Title: General Partner
XXXXXXX VENTURE PARTNERS IV
DIRECT FUND, L.P.
By: Back Bay Partners XII L.P.
Its General Partner
By: Xxxxxxx Venture Partners Inc.
Its Managing Member
Date: 12/31/97 By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------
Authorized Officer
ASC INVESTMENT PARTNERS, L.P.
By: The Xxxxxx + Xxxxxx Group,
as general partner
Date: 12/31/97
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Title: Chairman
[SIGNATURE PAGE CONTINUES]
Date: 12/31/97 /s/ Xxxxxx Xxx
------------------------------------
Xxxxxx X. Xxx
Date: 12/31/97 /s/Xxxxxx Xxx
------------------------------------
Xxxxxx X. Xxx
Date: 12/31/97 /s/ Xxxxxx Xxxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxxx
By signing below HarbourVest Partners V-Direct Fund L.P. joins in and
becomes a party to the Agreement, as amended.
HARBOURVEST PARTNERS V-
DIRECT FUND L.P.
By: HVP V-Direct Associates L.L.C.
Its General Partner
By: HarbourVest Partners, LLC
Its Managing Member
Date: 12/31/97 By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Authorized Officer
