JUNIOR PREFERRED STOCK PURCHASE AGREEMENT
THIS JUNIOR PREFERRED STOCK PURCHASE AGREEMENT, dated as of
December 10, 1999 (this "Agreement"), is made by and among Outsourcing Solutions
Inc., a Delaware corporation (the "Company"), and the Purchasers listed on the
signature pages hereto (each a "Purchaser" and collectively the "Purchasers").
Except as otherwise indicated, capitalized terms used herein are defined in
Section 7 hereof.
The parties hereto agree as follows:
Section 1. Authorization of Junior Preferred Stock. The Company will
authorize a class of 50,000 shares of Junior Preferred Stock, no par value per
share, having the terms and provisions set forth on Exhibit A hereto (the
"Junior Preferred Stock").
Section 2. Purchase and Sale of Junior Preferred Stock.
2A. Purchase and Sale. Subject to the terms and conditions set forth
herein, the Company will sell to each Purchaser, and each Purchaser will
purchase from the Company, such number of shares of Junior Preferred Stock as is
set forth in Schedule 1 attached hereto at a purchase price of $1,000.00 per
share.
2B. The Closing. The closing of the sale and purchase of the Junior
Preferred Stock hereunder (the "Closing") will take place at the offices of
White & Case LLP, 1155 Avenue of the Americas, New York, New York 10036. At the
Closing, the Company will deliver to each Purchaser a certificate or
certificates evidencing the number of shares of Junior Preferred Stock to be
purchased by such Purchaser, registered in the name of such Purchaser against
payment of the purchase price therefor by delivery of a cashier's or certified
check or checks of immediately available funds or by wire transfer of
immediately available funds to a bank account designated by the Company. Each
Purchaser may satisfy his or its obligation to pay the purchase price by
directing that a portion of its redemption consideration in connection with that
certain Stock Subscription and Redemption Agreement, dated October 8, 1999, and
amended as of the date hereof, to which the Company and the Purchasers are
parties, be retained by the Company.
Section 3. Restrictions on Transfers.
3.A. Restrictions. Restricted Securities are transferable pursuant to (i)
public offerings registered under the Securities Act, (ii) Rule 144 or Rule 144A
of the Securities and Exchange Commission (or any similar rule then in force) if
such rule is available, and (iii) subject to the conditions specified in
paragraph 3B, any other legally available means of transfer pursuant to the
Securities Act.
3.B. Procedure for Transfer. In connection with the transfer of any
Restricted Securities (other than a transfer referred to in clauses (i) or (ii)
of paragraph 3A above), the holder thereof will deliver written notice to the
Company describing in reasonable detail the transfer or proposed transfer,
together with an opinion (reasonably satisfactory to the Company) of counsel
which (to the Company's reasonable satisfaction) is knowledgeable in securities
law matters to the effect that such transfer of Restricted Securities may be
effected without registration of such Restricted Securities under the Securities
Act. In addition, if the holder of such Restricted Securities delivers to the
Company an opinion of such counsel to the effect that no subsequent transfer of
such Restricted Securities will require registration under the Securities Act,
the Company will promptly upon such contemplated transfer deliver new
certificates for such Restricted Securities which do not bear the Securities Act
Legend set forth in paragraph 5A below. If the Company is not required to
deliver new certificates for such Restricted Securities not bearing such legend,
the holder thereof will not transfer the same until the prospective transferee
has confirmed to the Company in writing its agreement to be bound by the
conditions contained in this paragraph and paragraph 5A.
3.C. Transferees. Upon request of any Purchaser, the Company shall promptly
supply to such Purchaser or its prospective transferees all information required
to be delivered in connection with a transfer pursuant to Rule 144A of the
Securities and Exchange commission.
Section 4. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Purchaser that as of the Closing:
4.A. Organization, etc. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company has all requisite corporate power and authority to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement.
4.B. Authorization; No Breach. The execution, delivery and performance of
this Agreement and all other agreements and transactions contemplated hereby and
thereby have been duly authorized by the Company. This Agreement constitutes a
valid and binding obligation of the Company enforceable in accordance with its
terms, subject to the availability of equitable remedies and to the laws of
bankruptcy and other similar laws affecting creditors' rights generally. The
execution and delivery by the Company of this Agreement and all other agreements
and instruments contemplated hereby and thereby to be executed by the Company,
and the offering, sale and issuance of the Junior Preferred Stock hereunder, do
not and will not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, (iii) result in
the creation of any lien, security interest, charge or encumbrance upon the
Company's capital stock or assets pursuant to, (iv) give any third party the
right to accelerate any obligation under, (v) result in a violation of, or (vi)
require any authorization, consent, approval, exemption or other action by or
notice to or filing with any court or administrative or governmental body (other
than in connection with certain state and federal securities laws) or any other
third party pursuant to, the Fourth Amended and Restated Certificate of
Incorporation or the Bylaws, or any law, statute, rule, regulation, instrument,
order, judgment or decree to which the Company is subject or any agreement or
instrument to which the Company is a party, or by which its assets are bound.
The Junior Preferred Stock has been duly and validly authorized for issuance by
the Company and, when issued and paid for in accordance with this Agreement,
will be fully paid and non-assessable and free and clear of any liens and
preemptive or similar rights.
4.C. No Registration. Assuming the truth and accuracy of the
representations set forth in Section 5 hereof, the offers and sales of the
Junior Preferred Stock pursuant to the terms hereof are not required to be
registered under the Securities Act or any state securities laws.
Section 5. Purchasers' Representations and Warranties.
5.A. Purchasers' Investment Representations. Each Purchaser individually,
and not jointly or severally, hereby represents that he or it is acquiring the
Restricted Securities purchased hereunder for his or its own account with the
present intention of holding such securities for investment purposes and that it
has no intention of selling such securities in a public distribution in
violation of federal or state securities laws; provided that nothing contained
herein will prevent the Purchaser and the subsequent holders of such securities
from transferring such securities in compliance with the provisions of Section 3
hereof. Each certificate for Restricted Securities will be conspicuously
imprinted with a legend substantially in the following form (the "Securities Act
Legend"):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
DECEMBER 10, 1999, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). THE TRANSFER OF SUCH SECURITIES IS SUBJECT TO
THE CONDITIONS SPECIFIED IN THE JUNIOR PREFERRED STOCK PURCHASE AGREEMENT
DATED AS OF DECEMBER 10, 1999, BETWEEN THE ISSUER (THE "COMPANY") AND THE
ORIGINAL PURCHASER HEREOF, AND THE COMPANY RESERVES THE RIGHT TO REFUSE TO
TRANSFER SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH
RESPECT TO SUCH TRANSFER. UPON WRITTEN REQUEST, A COPY OF SUCH CONDITIONS
WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF WITHOUT CHARGE."
Whenever any shares of Junior Preferred Stock cease to be Restricted Securities
and are not otherwise restricted securities, the holder thereof will be entitled
to receive from the Company, without expense, upon surrender to the Company of
the certificate representing such shares of Junior Preferred Stock, a new
certificate representing such shares of Junior Preferred Stock of like tenor but
not bearing a legend of the character set forth above.
5.B. Other Representations and Warranties of the Purchasers. Each
Purchaser individually, and not jointly or severally, represents and warrants to
and covenants and agrees with, the Company that:
(i) the Purchaser has had an opportunity to ask questions and receive
answers concerning the terms and conditions of the securities purchased
hereunder and has had full access to such other information concerning the
Company as the Purchaser may have requested and that in making its decision to
invest in the securities being purchased hereunder it is not in any way relying
on the fact that any other person has decided to be a Purchaser hereunder or to
invest in the securities;
(ii) the Purchaser (a) is an "accredited investor" as defined in Rule
501(a) under the Securities Act or (b) by reason of his business and financial
experience, and the business and financial experience of those retained by him
to advise it with respect to its investment in the securities being purchased
hereunder, he, together with such advisors, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of
evaluating the merits and risks of its prospective investment in such
securities, is able to bear the economic risk of such investment and, at the
present time, is able to afford a complete loss of such investment; and
(iii) the Purchaser has all requisite power and authority to enter into,
deliver and consummate the transactions contemplated by this Agreement
(including the purchase of the securities to be purchased by the Purchaser
hereunder) and this Agreement has been duly authorized, executed and delivered
by the Purchaser and constitutes a valid and binding obligation of the Purchaser
enforceable in accordance with its terms (subject to the availability of
equitable remedies and to the laws of bankruptcy and other similar laws
affecting creditors' rights generally) and, as applicable, does not violate the
Purchaser's charter, by-laws or other organizational documents.
Section 6. Definitions.
"Bylaws" means the Bylaws of the company, as such Bylaws may be modified,
amended or amended and restated from time to time.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity or any
department, agency, or political subdivision thereof.
"Restricted Securities" means the Junior Preferred Stock issued hereunder
and any securities issued with respect to such Junior Preferred Stock by way of
any stock dividend or stock split, or in connection with a combination of
shares, recapitalization, merger, consolidation or other reorganization. As to
any particular Restricted Securities, such securities will cease to be
Restricted Securities when they have (a) been effectively registered under the
Securities Act and disposed of in accordance with the registration statement
covering them, (b) become eligible for sale pursuant to Rule 144 (excluding Rule
144(k)) or Rule 144A of the Securities and Exchange Commission (or any similar
rule then in force), or (c) been otherwise transferred and new securities for
them not bearing the Securities Act Legend set forth in paragraph 5A have been
delivered by the company in accordance with paragraph 3B. Whenever any
particular securities cease to be Restricted Securities, the holder thereof will
be entitled to receive from the Company, without expense, new securities of like
tenor not bearing a Securities Act Legend of the character set forth in
paragraph 5A.
"Rule 144" means Rule 144 promulgated by the Securities and Exchange
Commission under the Securities Act as such rule may be amended from time to
time, or any similar rule then in force.
"Rule 144A" means Rule 144A promulgated by the Securities and Exchange
Commission under the Securities Act as such rule may be amended from time to
time, or any similar rule then in force.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
Section 7. Miscellaneous.
7.A. Remedies. The holders of Junior Preferred Stock acquired hereunder
(directly or indirectly) will have all of the rights and remedies set forth in
this Agreement and the Certificate of Incorporation, and all of the rights and
remedies which such holders have been granted at any time under any other
agreement or contract, and all of the rights and remedies which such holders
have under any law. Any Person having any rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to recover
damages by reason of any breach of any provision of this Agreement, and to
exercise all other rights granted by law.
7.B. Amendments and Waivers. Except as otherwise provided herein, any
provision hereof may be amended or waived generally and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holders of at least a majority of the outstanding shares of Junior Preferred
Stock issued hereunder and, to the extent that any modification, amendment or
waiver adversely affects the rights of the holders of any class of Junior
Preferred Stock, by the holders of at least a majority of the outstanding shares
initially issued hereunder of such adversely affected class of Junior Preferred
Stock. No course of dealing between the Company and any holder of Junior
Preferred Stock or any delay on the part of any such holder in exercising any
rights hereunder or under any agreement contemplated hereby or under the
Certificate of Incorporation or the Bylaws will operate as a waiver of any
rights of any such holder.
7.C. Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by any party in connection
herewith will survive the execution and delivery of this Agreement, regardless
of any investigation made by any Purchaser or on its behalf.
7.D. Successors and Assigns.
(i) Except as otherwise expressly provided herein, all covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto will bind and inure to the benefit of the respective successors and
assigns of such parties whether so expressed or not. In addition, and whether or
not any express assignment has been made, the provisions of this Agreement which
are for the Purchaser's benefit as the purchaser or holder of Junior Preferred
Stock are also for the benefit of and enforceable by any subsequent holder of
such Purchaser's Junior Preferred Stock.
(ii) If a sale, transfer, assignment or other disposition of any Junior
Preferred Stock is made in accordance with the provisions of this Agreement to
any Person and such securities remain Restricted Securities immediately after
such disposition, such Person shall, at or prior to the time such securities are
acquired, execute a counterpart of this Agreement with such modifications
thereto as may be necessary to reflect such acquisition, and such other
documents as are necessary to confirm such Person's agreement to become a party
to, and to be bound by, all covenants, terms and conditions of this Agreement as
theretofore amended.
7.E. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable under any applicable law or rule in any jurisdiction, such
provision will be ineffective only to the extent of such invalidity, illegality
or unenforceability in such jurisdiction, without invalidating the remainder of
this Agreement in such jurisdiction or any provision hereof in any other
jurisdiction.
7.F. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together will constitute one and the
same Agreement.
7.G. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
7.H. Governing Law. All issues concerning the enforceability, validity and
binding effect of this Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the law of
any jurisdiction other than the State of New York.
7.I. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and shall be delivered personally or by telex or telecopy as described
below or by reputable over night courier, and shall be deemed given on the date
on which such delivery is made. If delivered by telex or telecopy such notices
or communications shall be confirmed by a registered or certified letter (return
receipt requested), postage prepaid. 1.K.
IN WITNESS WHEREOF, the parties hereto have executed this Junior
Preferred Stock Purchase Agreement as of the date first written above.
OUTSOURCING SOLUTIONS INC.
By: /s/ Gary L. Weller
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Its: EVP
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RAINBOW TRUST ONE
By /s/ Frank J. Hanna
---------------------------------
Name: Frank J. Hanna
Title: Trustee
RAINBOW TRUST TWO
By /s/ David G. Hanna
---------------------------------
Name: David G. Hanna
Title: Trustee
By /s/ Alan M. Miller
---------------------------------
Name: Alan M. Miller
By /s/ Timothy G. Beffa
---------------------------------
Name: Timothy G. Beffa
HELLER FINANCIAL, INC.
By /s/ Mark Hutchings
---------------------------------
Name: Mark Hutchings
Title: AVP
Title:
McCOWN De LEEUW & CO. III, L.P.
By /s/ David De Leeuw
---------------------------------
Name: David DeLeeuw
Title:
McCOWN De LEEUW & CO. III EUROPE, L.P.
By /s/ David DeLeeuw
---------------------------------
Name: David DeLeeuw
Title:
McCOWN De LEEUW & CO. III (ASIA), L.P.
By /s/ David DeLeeuw
---------------------------------
Name: David DeLeeuw
Title:
GAMMA FUND, L.L.C.
By /s/ David DeLeeuw
---------------------------------
Name: David DeLeeuw
Title: