OUTSOURCING SOLUTIONS INC.
VOTING AGREEMENT
----------------
THIS VOTING AGREEMENT (this "Agreement") is made as of April 16, 2001,
among Outsourcing Solutions Inc., a Delaware corporation (the "Company"),
Madison Dearborn Capital Partners III, L.P. (the "Principal Investor"), Gryphon
Partners II, L.P. ("GPII") and Gryphon Partners II-A, L.P. ("GPII-A" and
together with GPII, "Gryphon") (Gryphon and the Principal Investor are
collectively referred to herein as the "Investors"). Except as otherwise
provided, capitalized terms used herein are defined in paragraph 2 hereof.
The Company and Gryphon are parties to a Stock Subscription Agreement,
dated as of April 3, 2001 (the "Subscription Agreement"), wherein, inter alia,
Gryphon is acquiring certain shares of Senior Common Stock. A condition to
Gryphon's obligations under the Subscription Agreement is that the Company, the
Principal Investor and Gryphon enter into this Agreement for the purpose of
setting forth the terms and conditions pursuant to which the Investors shall
vote their OSI Shares (as defined below) in favor of certain designees to the
Company's Board of Directors.
Each of the Company, the Principal Investor and Gryphon desire to
facilitate the voting arrangements set forth in this Agreement and the sale and
purchase of the Senior Common Stock pursuant to the Subscription Agreement, by
agreeing to the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Board of Directors.
(a) From and after the Initial Closing and until the consummation of a
Qualified Public Offering, the Principal Investor designates Gryphon as an
Authorized Person pursuant to paragraph 1(a)(ii)(B) of the Amended and Restated
Stockholders Agreement and, in doing so, authorizes Gryphon to designate one
individual (the "Gryphon Director") to be elected to the Board. Gryphon hereby
consents to being designated as an Authorized Person under the Amended and
Restated Stockholders Agreement and to the obligations related to such
designation pursuant to paragraph 3(c) thereof.
(b) From and after the Initial Closing and until the provisions of this
paragraph 1 cease to be effective as provided in paragraph 1(b)(i) and 1(b)(ii)
below, as the case may be, each Investor shall vote all of its OSI Shares which
are voting shares and any other voting securities of the Company over which it
has voting control and shall take all other necessary or desirable actions
within its control (whether in its capacity as a stockholder, director, member
of a board committee or officer of the Company or otherwise, and including,
without limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings) so
that:
(i) prior to the termination of the provisions set forth in paragraph
1 of the Amended and Restated Stockholders Agreement, the individuals
specified in paragraph 1(a)(ii) of the Amended and Restated Stockholders
Agreement are elected to the Board; and
(ii) upon and subsequent to the consummation of a Qualified Public
Offering, two Principal Investor Directors and one Gryphon Director are
elected to the Board; provided, that Gryphon's voting obligations under
this paragraph 1(b)(ii) shall terminate at such time as Principal Investor
holds that number of OSI Shares which is less than one-third of the number
of OSI Shares held as of the date hereof, and Principal Investor's voting
obligations under this paragraph 1(b)(ii) shall terminate at such time as
Gryphon holds that number of OSI Shares which is less than 30% of the
number of OSI Shares held as of the date hereof.
(c) Upon any Permitted Transfer (as defined in the Amended and Restated
Stockholders Agreement) by an Investor (other than in the case of a Public
Sale), such Investor shall cause any transferee who, immediately after such
Permitted Transfer beneficially owns at least 5% of the voting securities of the
Company to assume the obligations of such Investor under this paragraph 1 and
such transferee shall execute an amendment to this Agreement or joinder or other
document reasonably acceptable to the other parties that are not party to such
transfer. Each certificate representing any OSI Shares that are subject to this
Agreement shall be endorsed by the Company with a legend reading substantially
as follows:
"THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT (A
COPY OF WHICH MAY BE OBTAINED UPON WRITTEN REQUEST FROM THE ISSUER)."
2. Definitions.
"Affiliate" of an Investor means any other Person, directly or indirectly
controlling, controlled by or under common control with such Investor and any
partner of an Investor which is a partnership and any officer, director or
managing member of any Investor which is a corporation or other entity.
"Amended and Restated Stockholders Agreement" means that certain Amended
and Restated Stockholders Agreement dated as of the date hereof among the
Company, the Principal Investor, Gryphon and certain other holders of OSI
Shares, as may be amended or supplemented from time to time.
"Common Stock" means collectively the Senior Common Stock, Voting Common
Stock, par value $0.01 per share and Nonvoting Common Stock, par value $0.01 per
share.
"OSI Shares" means (i) any Common Stock, (ii) any Common Stock issued or
issuable directly or indirectly upon exercise of Warrants or Options and (iii)
any Common Stock issued or issuable with respect to the securities referred to
in clauses (i) and (ii) above by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. As to any particular OSI Shares, such shares shall
cease to be OSI Shares when they have been disposed of in a Public Sale.
"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 and a governmental entity or any
department, agency or political subdivision thereof.
"Principal Investor Director" means any individual designated by the
Principal Investor pursuant to paragraph 1(a)(ii)(B) of the Amended and Restated
Stockholders Agreement.
"Public Sale" means any sale of OSI Shares to the public pursuant to an
offering registered under the Securities Act or, following a public offering of
any class of Common Stock of the Company registered under the Securities Act, to
the public pursuant to the provisions of Rule 144, or any successor provision
thereto, adopted under the Securities Act.
"Qualified Public Offering" means the issuance and sale by the Company in
an underwritten public offering registered under the Securities Act of shares of
the Company's Common Stock having an aggregate offering value of at least $50
million.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Senior Common Stock" means the Company's Senior Common Stock, par value
$0.01 per share.
3. Amendment and Waiver. No modification, amendment or waiver of any
provision of this Agreement shall be effective against the Company, the
Principal Investor or Gryphon unless, in the case of a modification or
amendment, such modification or amendment is approved in writing by each of the
Company, the Principal Investor and Gryphon and, in the case of a waiver, such
waiver is approved in writing by the Company, the Principal Investor or Gryphon,
as the case may be.
4. Severability. Whenever possible, each provision of this Agreement shall
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 in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement in such jurisdiction or affect the validity, legality or
enforceability of any provision in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
5. Entire Agreement. Except as otherwise expressly set forth herein, this
Agreement and the other agreements executed contemporaneously with this
Agreement embody the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
6. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Company, the Principal Investor and Gryphon and their respective successors, so
long as, in the case of the Principal Investor, the Principal Investor holds
that number of OSI Shares which is no less than one-third of the number of OSI
Shares held as of the date hereof, and, in the case of Gryphon, Gryphon holds
that number of OSI Shares which is no less than 30% of the number of OSI Shares
held as of the date hereof; provided that the rights of Gryphon under paragraph
1 hereof may not be assigned without the prior written approval of the Principal
Investor, other than to an Affiliate of Gryphon.
7. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be an original and all of which taken together shall
constitute one and the same agreement.
8. Remedies. The Company and the Investors shall be entitled to enforce
their rights under this Agreement specifically, to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages would not be an adequate remedy for any breach of the provisions of this
Agreement and that the Company and either Investor may in its sole discretion
apply to any court of law or equity of competent jurisdiction for specific
performance and/or injunctive relief (without posting a bond or other security)
in order to enforce or prevent any violation of the provisions of this
Agreement.
9. Notices. Any notice provided for in this Agreement shall be in writing
and shall be either personally delivered, or mailed by first class mail (postage
prepaid) or sent by reputable overnight courier service (charges prepaid) to the
Company, the Principal Investor and Gryphon at the addresses set forth below and
to any subsequent holder of OSI Shares subject to this Agreement at such address
as indicated by the Company's records, or at such address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party. Notices shall be deemed to have been given hereunder when
delivered personally, three business days after deposit in the U.S. mail and one
business day after deposit with a reputable overnight courier service.
if to the Company:
Outsourcing Solutions Inc.
390 South Woods Mill Road, Suite 350
Chesterfield, MO 63017
Attention: Eric R. Fencl
with a copy to:
Madison Dearborn Capital Partners, III, L.P.
Suite 3800
Three First National Plaza
Chicago, IL 60602
Attention: Timothy M. Hurd
Kirkland & Ellis
200 E. Randolph
Chicago, IL 60601
Attention: Michael H. Kerr, P.C.
Richard W. Porter
if to the Principal Investor:
Madison Dearborn Capital Partners, III, L.P.
Suite 3800
Three First National Plaza
Chicago, IL 60602
Attention: Timothy M. Hurd
with a copy to:
Kirkland & Ellis
200 E. Randolph
Chicago, IL 60601
Attention: Michael H. Kerr, P.C.
Richard W. Porter
if to the Gryphon:
Gryphon Partners II, L.P.
One Embarcadero Center, Suite 2750
San Francisco, CA 94111
Attention: Patrick Haiz
with a copy to:
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, CA 94111
Attention: Scott Haber
10. Governing Law. All issues and questions concerning the relative rights
of the Company and its stockholders and all other issues and questions
concerning the construction, validity, interpretation and enforceability of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions that would
cause the application of the laws of any jurisdiction other than the State of
Delaware. In furtherance of the foregoing, the internal law of the State of
Delaware shall control the interpretation and construction of this Agreement
(and all schedules and exhibits hereto), even though under that jurisdiction's
choice of law or conflict of law analysis, the substantive law of some other
jurisdiction would ordinarily apply.
11. Business Days. If any time period for giving notice or taking action
hereunder expires on a day which is a Saturday, Sunday or legal holiday in the
state in which the Company's chief-executive office is located, the time period
shall automatically be extended to the business day immediately following such
Saturday, Sunday or legal holiday.
12. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
13. Covenants of the Company. The Company agrees to use its reasonable best
efforts to ensure that the rights granted hereunder are effective and that the
parties hereto enjoy the benefits thereof. Such actions include, without
limitation, the use of the Company's reasonable best efforts to cause the
nomination and election of the directors as provided above. The Company will
not, by any voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be performed hereunder by the Company, but
will at all times in good faith assist, to the extent possible, in the carrying
out of all of the provisions of this Agreement and in the taking of all such
reasonable actions as may be necessary or appropriate in order to protect the
rights of the parties hereunder against impairment.
14. Execution by the Company. The Company, by its execution in the space
provided below, agrees that it will cause the certificates evidencing the shares
of Common Stock to bear the legend required by Section 1(c) herein, and it shall
supply, free of charge, a copy of this Agreement to any holder of a certificate
evidencing shares of capital stock of the Company upon written request from such
holder to the Company at its principal office. The parties hereto agree that the
failure to cause the certificates evidencing the shares of Common Stock to bear
the legend required by Section 1(c) herein and/or failure of the Company to
supply, free of charge, a copy of this Agreement as provided under this Section
5 shall not affect the validity or enforcement of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Voting Agreement as of the date first written above.
OUTSOURCING SOLUTIONS INC.
By: /s/ Timothy G. Beffa
-------------------------------------
Its: President and Chief Executive Officer
-------------------------------------
MADISON DEARBORN CAPITAL PARTNERS III, L.P.
By: Madison Dearborn Partners III, L.P.
Its: General Partners
By: Madison Dearborn Partners, Inc.
Its: General Partner
By: /s/ Paul R. Wood
-------------------------------------
Its: Managing Director
-------------------------------------
GRYPHON PARTNERS II, L.P.,
a Delaware limited partnership
By: Gryphon GenPar II, LLC
Its: General Partner
By: /s/ R. David Andrews
-------------------------------------
Name: R. David Andrews
Title: President
GRYPHON PARTNERS II-A, L.P.,
a Delaware limited partnership
By: Gryphon GenPar II, LLC
Its: General Partner
By: /s/ R. David Andrews
-------------------------------------
Name: R. David Andrews
Title: President