SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT, dated as of March 30, 2001 (this "Amendment"), to
the Existing Credit Agreement (as defined below) is among OUTSOURCING SOLUTIONS
INC., a Delaware corporation (the "Borrower") and each of the Lenders party
hereto.
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower, the Lenders, Credit Suisse First Boston (as
successor in interest of DLJ Capital Funding, Inc.), as the Syndication Agent,
the Lead Arranger and the Sole Book Running Manger, Harris Trust and Savings
Bank, as the Documentation Agent, and Fleet National Bank, as the Administrative
Agent are parties to a Credit Agreement, dated as of November 30, 1999 (as
amended, supplemented, amended and restated or otherwise modified prior to the
date hereof, the "Existing Credit Agreement"); and
WHEREAS, the Borrower has requested that the Lenders amend the Existing
Credit Agreement as set forth below (the Existing Credit Agreement, as amended
by this Amendment, being referred to as the "Credit Agreement");
NOW, THEREFORE, in consideration of the agreements herein contained, and
for other valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
PART I
DEFINITIONS
SUBPART I.1. Certain Definitions. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural form thereof):
"Amendment" is defined in the preamble.
"Credit Agreement" is defined in the second recital.
"Existing Credit Agreement" is defined in the first recital.
"Second Amendment Effective Date" is defined in Part III.
SUBPART I.2. Other Definitions. Terms for which meanings are provided in
the Existing Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendment with such meanings.
PART II
AMENDMENTS TO THE
EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Second Amendment
Effective Date, the Existing Credit Agreement is hereby amended in
accordance
with this Part.
SUBPART II.1. Amendments to Article I. Article I of the Existing Credit
Agreement is hereby amended as set forth in Subparts 2.1.1 through 2.1.6.
SUBPART II.1.1. The following definitions shall be inserted into Section
1.1 of the Existing Credit Agreement in the appropriate alphabetical order:
"Additional Amounts" means, on or after March 12, 2001, the aggregate
amount of cash equity contributions made to the Borrower in consideration for
the issuance of OSI Common Stock, to the extent such contributions are made
pursuant to the Stock Subscription Agreement in an aggregate amount not to
exceed $44,000,000.
"Initial Funding Date" means the date on which the Borrower actually
receives the initial Additional Amounts (in an amount not to exceed $24,000,000)
pursuant to the Stock Subscription Agreement.
"Second Amendment Effective Date" means March 30, 2001.
"Second Funding Amounts" is defined in the definition of "Interest Coverage
Ratio".
"Stock Subscription Agreement" means the Stock Subscription Agreement,
dated as of April 3, 2001, by and among the Borrower, Gryphon Partners II, L.P.,
Gryphon Partners II-A, L.P., and the additional investors identified on the
Schedule of Purchasers attached thereto.
SUBPART II.1.2. The definition of "Interest Coverage Ratio" appearing in
Section 1.1 of the Existing Credit Agreement is amended by adding the following
proviso to the end of such definition:
provided further, however, that, if the Borrower receives any Additional
Amounts pursuant to the terms of the Stock Subscription Agreement at any
time after the Initial Funding Date but on or prior to the first
anniversary of the Initial Funding Date (the "Second Funding Amounts"), for
purposes of calculating the Interest Coverage Ratio for any calculation
period which includes the Fiscal Quarter in which the Borrower actually
received the Second Funding Amounts, the Second Funding Amounts shall be
deemed to have been received by the Borrower on the first day of the first
Fiscal Quarter of such calculation period, the aggregate amount of
Revolving Loans actually borrowed by the Borrower during such calculation
period shall be reduced dollar-for-dollar by the Second Funding Amounts,
and the Interest Expense for such calculation period shall be reduced
accordingly.
SUBPART II.1.3. The definition of "Interest Expense" appearing in Section
1.1 of the Existing Credit Agreement is amended by adding the following proviso
to the end of such definition:
; provided, however, that, notwithstanding any of the foregoing to the
contrary, if the Borrower receives at least $20,000,000 in Additional
Amounts pursuant to the terms of the Stock Subscription Agreement on or
prior to April 30, 2001, for purposes of calculating the Interest Coverage
Ratio, Interest Expense for the first full Fiscal Quarter of 2001 shall be
deemed to be $12,400,000.
SUBPART II.1.4. The definition of "Material Documents" appearing in Section
1.1 of the Existing Credit Agreement is amended by inserting the phrase "the
Stock Subscription Agreement" immediately after the phrase "the Consent
Solicitation Statement," appearing in such definition.
SUBPART II.1.5. The definition of "Net Equity Proceeds" appearing in
Section 1.1 of the Existing Credit Agreement is amended in its entirety to read
as follows:
"Net Equity Proceeds" means with respect to the sale or issuance by
the Borrower to any Person of any Capital Securities of the Borrower, or
any warrants or options with respect to any such Capital Securities or the
exercise of any such warrants or options after the Closing Date, the excess
of:
(a) the gross cash proceeds received by the Borrower from such
sale, exercise or issuance,
over
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage, accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred
in connection with such sale or issuance.
Notwithstanding the foregoing, Net Equity Proceeds shall not include (i)
any gross cash proceeds received by the Borrower from any directors,
officers, employees or consultants of the Borrower and its Subsidiaries, or
(ii) any Additional Amounts.
SUBPART II.1.6. The definition of "OSI Common Stock" appearing in Section
1.1 of the Existing Credit Agreement is amended in its entirety to read as
follows:
"OSI Common Stock" means the common stock of the Borrower, $0.01 par
value per share, including any and all series of such common stock.
SUBPART II.2. Amendments to Article VII. Article VII of the Existing Credit
Agreement is hereby amended as set forth in Subparts 2.2.1 through 2.2.3.
SUBPART II.2.1. Clause (b) of Section 7.2.4 of the Existing Credit
Agreement is amended by (a) deleting the date "03/31/01" appearing therein and
inserting "06/30/01" in its place and (b) deleting the date "04/01/01" appearing
therein and inserting "07/01/01" in its place.
SUBPART II.2.2. Clause (g) of Section 7.2.5 of the Existing Credit
Agreement is amended by inserting the phrase (a) "the sum of (i)" immediately
prior to the amount "$35,000,000" appearing in such clause, and (b) "and (ii)
any Additional Amounts, the proceeds of which were used to consummate or
otherwise finance a Permitted Acquisition" immediately following the phrase
"series of related transactions" appearing in such clause.
SUBPART II.2.3. Section 7.2.13 of the Existing Credit Agreement is amended
by (a) deleting the word "and" immediately prior to the number "(v)" appearing
in such Section, and (b) inserting the phrase ", or (vi) the fees and expenses
contemplated by Sections 6.02 and 8.01 of the Stock Subscription Agreement"
immediately after the phrase "at any time outstanding" appearing at the end of
such Section.
PART III
CONDITIONS TO EFFECTIVENESS
This Amendment (and the amendments and other modifications contained
herein) shall become effective as of the date first set forth above (the "Second
Amendment Effective Date") when the conditions set forth in this Part have been
satisfied.
SUBPART III.1. Execution of Counterparts. The Syndication Agent shall have
received counterparts of this Amendment, duly executed and delivered on behalf
of the Borrower and the Required Lenders.
SUBPART III.2. Affirmation and Consent. The Syndication Agent shall have
received counterparts of an Affirmation and Consent, dated as of the Second
Amendment Effective Date, and in form and substance satisfactory to the
Syndication Agent, duly executed and delivered by each OSI Shareholder
(including each investor party to the Stock Subscription Agreement) and each
Obligor other than the Borrower.
SUBPART III.3. Costs and Expenses, etc. The Syndication Agent shall have
received for the account of each Lender, all fees, costs and expenses due and
payable pursuant to Sections 3.3 and 10.3 of the Credit Agreement, if then
invoiced.
SUBPART III.4. Amendment Fee. The Syndication Agent shall have received for
the account of each Lender (that has delivered its signature page in a manner
and before the time set forth below), an amendment fee in an amount equal to 5
basis points on the sum of (i) such Lender's RL Percentage multiplied by the
Revolving Loan Commitment Amount plus (ii) the outstanding principal amount of
Term Loans owing to such Lender, but payable only to each such Lender that has
delivered (including by way of facsimile) its executed signature page to this
Amendment to the attention of Mr. Aaron Menzi at Mayer, Brown & Platt, 1675
Broadway, New York, New York 10019, facsimile number: 212-262-1910, at or prior
to 12:00 p.m., noon (New York time) on April 13, 2001.
SUBPART III.5. Legal Details, etc. All documents executed or submitted
pursuant hereto shall be satisfactory in form and substance to the Syndication
Agent and its counsel. The Syndication Agent and its counsel shall have received
all information, and such counterpart originals or such certified or other
copies of such materials, as the Syndication Agent or its counsel reasonably
request. All legal matters incident to the transactions contemplated by this
Amendment shall be satisfactory to the Syndication Agent and its counsel.
PART IV
MISCELLANEOUS PROVISIONS
SUBPART IV.1. Cross-References. References in this Amendment to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.
SUBPART IV.2. Loan Document Pursuant to Existing Credit Agreement. This
Amendment is a Loan Document executed pursuant to the Existing Credit Agreement
and shall be construed, administered and applied in accordance with all of the
terms and provisions of the Existing Credit Agreement.
SUBPART IV.3. Successors and Assigns. This Amendment shall be binding upon
and inure to the benefit of the Borrower, the Lenders and their respective
successors and assigns.
SUBPART IV.4. Full Force and Effect; Limited Amendment. Except as expressly
amended hereby, all of the representations, warranties, terms, covenants,
conditions and other provisions of the Existing Credit Agreement and the Loan
Documents shall remain unchanged and shall continue to be, and shall remain, in
full force and effect in accordance with their respective terms. The amendments
set forth herein shall be limited precisely as provided for herein to the
provisions expressly amended herein and shall not be deemed to be an amendment
to, waiver of, consent to or modification of any other term or provision of the
Existing Credit Agreement or any other Loan Document or of any transaction or
further or future action on the part of any Obligor or OSI Shareholder which
would require the consent of the Lenders under the Existing Credit Agreement or
any of the Loan Documents.
SUBPART IV.5. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSES SECTION 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).
SUBPART IV.6. Execution in Counterparts. This Amendment may be executed in
any number of counterparts by the parties hereto, each of which counterparts
when so executed shall be an original, but all the counterparts shall together
constitute one and the same agreement. The parties hereto agree that delivery of
an executed counterpart of a signature page to this Amendment by facsimile shall
be effective as delivery of an original executed counterpart of this Amendment.
SUBPART IV.7. Representations and Warranties. In order to induce the
Lenders to execute and deliver this Amendment, the Borrower hereby represents
and warrants to the Lenders that, both before and after giving effect to this
Amendment, all of the statements set forth in Section 5.2.1 of the Existing
Credit Agreement are true and correct.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers hereunto duly authorized as of the date
first above written.
OUTSOURCING SOLUTIONS INC.
By:/s/ Gary L. Weller
---------------------------------
Title: Exec. Vice President &
Chief Financial Officer
CREDIT SUISSE FIRST BOSTON
By:/s/ Robert Hetu
---------------------------------
Title: Director
By:/s/ William S. Lutkins
---------------------------------
Title: Vice President
FLEET NATIONAL BANK
By:
---------------------------------
Title:
HARRIS TRUST AND SAVINGS BANK
By:/s/ Donald J. Buse
---------------------------------
Title: Managing Director
BANK ONE , NA (FORMERLY KNOWN AS THE
FIRST NATIONAL BANK OF CHICAGO)
By:/s/
---------------------------------
Title: Vice President
CSAM FUNDING I
By:/s/ David H. Lerner
---------------------------------
Title: Authorized Signatory
THE CHASE MANHATTAN BANK
By:/s/ William J. Caggiano
---------------------------------
Title: Managing Director
DRESDNER BANK AG, NEW YORK
& GRAND CAYMAN BRANCHES
By:/s/
---------------------------------
Title:AT
By:/s/
---------------------------------
Title: Vice President
WACHOVIA BANK, N.A.
By:/s/
---------------------------------
Title: Senior Vice President
WELLS FARGO BANK, N.A.
By:/s/
---------------------------------
Title: Vice President
FIRST DOMINION FUNDING I
By:/s/ David H. Lerner
---------------------------------
Title: Authorized Signatory
FIRST DOMINION FUNDING II
By:/s/ David H. Lerner
---------------------------------
Title: Authorized Signatory
FIRST DOMINION FUNDING III
By:/s/ David H. Lerner
---------------------------------
Title: Authorized Signatory
FRANKLIN FLOATING RATE TRUST
By:/s/ Chauncey Lufkin
---------------------------------
Title: Vice President
HELLER FINANCIAL
By:/s/ K. Craig Gallehugh
---------------------------------
Title: Senior Vice President
KEMPER FLOATING RATE FUND
By:/s/
---------------------------------
Title: Senior Vice President
KZH RIVERSIDE LLC
By:/s/ Susan Lee
---------------------------------
Title: Authorized Agent
KZH STERLING LLC
By:/s/ Susan Lee
---------------------------------
Title: Authorized Agent
LIBERTY STEIN ROE ADVISOR FLOATING
RATE ADVANTAGE FUND,
By Stein Roe & Farnham Incorporated,
As Advisor
By:/s/ Brian W. Good
---------------------------------
Title: Sr. Vice President &
Portfolio Manager
MAPLE WOOD (CAYMAN) LIMITED
By Massachusetts Mutual Life Ins.
Company as Collateral Manager
By:/s/ Steven J. Katz
---------------------------------
Title: Second Vice President &
Associate General Counsel
MASS MUTUAL LIFE INSURANCE
By:/s/ Steven J. Katz
---------------------------------
Title: Second Vice President &
Associate General Counsel
MERRILL LYNCH GLOBAL INVESTMENT
SERIES: INCOME STRATEGIES PORTFOLIO
By Merrill Lynch Investment
Managers, L.P. as Investment Advisor
By:/s/ Anthony Heyman
---------------------------------
Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By:/s/ Anthony Heyman
---------------------------------
Title: Authorized Signatory
MORGAN STANLEY DEAN WITTER PRIME
INCOME TRUST
By:/s/ Sheila A. Finnerty
---------------------------------
Title: Senior Vice President
STEIN ROE & FARNHAM CLO 1 LTD.,
By Stein Roe & Farnham Incorporated,
As Portfolio Manager
By:/s/ Brian W. Good
---------------------------------
Title: Sr. Vice President &
Portfolio Manager
STEIN ROE FLOATING RATE LIMITED
LIABILITY COMPANY
By:/s/ Brian W. Good
---------------------------------
Title: Senior Vice President
VAN KAMPEN PRIME RATE INCOME TRUST
By: Van Kampen Investment
Advisory Corp.
By:/s/ Darvin D. Pierce
---------------------------------
Title: Principal
VAN KAMPEN SENIOR FLOATING RATE FUND
By:/s/ Darvin D. Pierce
---------------------------------
Title: Principal
VAN KAMPEN SENIOR INCOME TRUST
By:/s/ Darvin D. Pierce
---------------------------------
Title: Principal