OUTSOURCING SOLUTIONS INC.
FIRST AMENDMENT TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT
This FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") is dated as of March 31, 1998 and entered into by and among
OUTSOURCING SOLUTIONS INC., a Delaware corporation ("Company"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as the "Lenders"), XXXXXXX XXXXX CREDIT
PARTNERS L.P. and THE CHASE MANHATTAN BANK, as Co-Administrative Agents (in such
capacities, "Co-Administrative Agents"), SUN TRUST BANK, ATLANTA, as Collateral
Agent (in such capacity, "Collateral Agent"), and is made with reference to that
certain Second Amended and Restated Credit Agreement dated as of January 26,
1998 (the "Credit Agreement"), by and among Company, the Lenders, Xxxxxxx Xxxxx
Credit Partners L.P. and Chase Securities Inc., as Arranging Agents and
Co-Administrative Agents and Collateral Agent (the Lenders party to the Credit
Agreement, Co-Administrative Agents and Collateral Agent are each individually
referred to herein as a "Lender Party" and collectively as the "Lender
Parties"). Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, the parties to the Credit Agreement desire to amend the Credit
Agreement to permit, subject to certain conditions, Company and its subsidiaries
to enter into certain collection agency arrangements.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT
1.1 Amendments to Section 1: Definitions
A. Subsection 1.1 of the Credit Agreement is hereby amended by deleting the
definition of "Consolidated Maintenance Capital Expenditures" set forth therein
and substituting the following therefor:
"Consolidated Maintenance Capital Expenditures" means, for any period, all
Consolidated Capital Expenditures for such period other than y)
Consolidated Capital Expenditures expended to make Permitted Acquisitions
or Permitted Portfolio Acquisitions and z)Consolidated Capital Expenditures
made with respect to Portfolio Advances."
B. Subsection 1.1 of the Credit Agreement is hereby further amended by
adding the following definitions of "Agency Acquisition Contract" and "Portfolio
Advances" which shall be inserted in appropriate alphabetical order:
"Agency Acquisition Contract" means an agreement whereby Company
and/or one or more of its Subsidiaries agrees to serve as agent for a third
party for purposes of collecting debt owed to such third party and pursuant
to which y) Company or any Subsidiary is obligated to make Portfolio
Advances; provided that, the aggregate of all such amounts required to be
advanced by Company and its Subsidiaries as Portfolio Advances, and not yet
paid, at any time shall not exceed $10 million per calendar quarter and z)
Company and/or any of its Subsidiaries is entitled to retain as
compensation for its services thereunder substantially all of the amounts
collected with respect to such debt."
"Portfolio Advances" means, with respect to any Agency Acquisition
Contract, all amounts required to be advanced or paid by Company or any of
its Subsidiaries pursuant to such Agency Acquisition Contract other than
amounts representing a portion of the recovery from third party debtors as
payments made on the debt of such third party debtors."
1.2 Amendments to Section 7: Negative Covenants
A. Subsection 7.4 of the Credit Agreement is hereby amended by adding a new
subdivision (x) thereto as follows:
"(x) Company and its Subsidiaries may become and remain liable with
respect to Agency Acquisition Contracts."
B. Subdivision (d) of subsection 7.7(v) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"(d) the aggregate amount expended for Permitted Portfolio
Acquisitions during any Fiscal Year, together with the aggregate amount of
all Investments made pursuant to subsection 7.3(v)(c) and the aggregate
amount advanced by Company and/or its subsidiaries as Portfolio Advances
during such Fiscal Year shall not exceed $60,000,000;"
SECTION 2. ACKNOWLEDGEMENT AND CONSENT
Each Subsidiary Guarantor hereby acknowledges that it has reviewed the
terms and provisions of this Amendment and consents to the amendment of the
Credit Agreement effected pursuant to this Amendment. Each Subsidiary Guarantor
hereby confirms that each Loan Document to which it is a party or otherwise
bound and all Collateral encumbered thereby will continue to guaranty or secure,
as the case may be, to the fullest extent possible, the payment and performance
of all Obligations.
Each Subsidiary Guarantor acknowledges and agrees that any of the Loan
Documents to which it is a party or otherwise bound shall continue in full force
and effect and that all of its Obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment.
SECTION 3. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, Company represents and warrants
to each Lender that the following statements are true, correct and complete:
A. Corporate Power and Authority. Each Loan Party has all requisite
corporate or partnership (as applicable) power and authority to enter into
this Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Credit Agreement as amended by this
Amendment (the "Amended Agreement") and the other Loan Documents.
B. Authorization of Agreements. The execution and delivery of this
Amendment and the performance of the Amended Agreement and the other Loan
Documents have been duly authorized by all necessary corporate or
partnership (as applicable) action on the part of each Loan Party.
C. No Conflict. The execution and delivery by each Loan Party of this
Amendment and the performance by each Loan Party of the Amended Agreement
and the other Loan Documents do not and will not (i) violate any provision
of any law or any governmental rule or regulation applicable to Company or
any of its Subsidiaries, the Certificate or Articles of Incorporation or
Bylaws (or other analogous organizational document) of Company or any of
its Subsidiaries or any order, judgment or decree of any court or other
agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries, (iii) result in or require the creation
or imposition of any Lien upon any of the properties or assets of Company
or any of its Subsidiaries (other than any Liens created under any of the
Loan Documents in favor of Collateral Agent on behalf of Lenders), or (iv)
require any approval of stockholders or partners or any approval or consent
of any Person under any Contractual Obligation of Company or any of its
Subsidiaries, except for such approvals or consents which will be obtained
on or before the Second Amendment Effective Date and disclosed in writing
to Lenders.
D. Governmental Consents. The execution and delivery by each Loan
Party of this Amendment and the performance by each Loan Party of the
Amended Agreement and the other Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority
or regulatory body.
E. Binding Obligation. This Amendment and the Amended Agreement have
been duly executed and delivered by each Loan Party and are the legally
valid and binding obligations of each Loan Party, enforceable against each
of them in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the effective date of this Amendment to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in
which case they were true, correct and complete in all material respects on
and as of such earlier date.
G. Absence of Default. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
SECTION 4. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the Other Loan
Documents.
(i) On and after the date of effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the "Credit
Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement shall mean and be a reference to the Credit Agreement
as amended by this Amendment.
(ii) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this Amendment shall
not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of any
Lender Party under, the Credit Agreement or any of the other Loan
Documents.
B. Headings. Section and subsection headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose or be given any substantive effect.
C. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
D. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment shall become effective as of March 31, 1998
upon the execution of a counterpart hereof by Company, each Subsidiary
Guarantor, and Requisite Lenders and receipt by Company and Co-Administrative
Agents of written or telephonic notification of such execution and authorization
of delivery thereof.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY: OUTSOURCING SOLUTIONS INC.
By: ---------------------------------------
Xxxxxx X. Xxxxx
Executive Vice President and
Chief Financial Officer
AGENTS AND LENDERS: XXXXXXX SACHS CREDIT PARTNERS L.P.,
individually and as a Co-Administrative Agent
By: ---------------------------------------
Authorized Signatory
THE CHASE MANHATTAN BANK,
individually and as a Co-Administrative Agent
By: ---------------------------------------
Name:
Title:
SUNTRUST BANK, ATLANTA,
individually and as Collateral Agent
By: ---------------------------------------
Name:
Title:
By: ---------------------------------------
Name:
Title:
AG CAPITAL FUNDING PARTNERS, LTD.
By: ---------------------------------------
Name:
Title:
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, Inc.,
as Collateral Manager
By: --------------------------------
Name:
Title:
ARES LEVERAGED INVESTMENT FUND
By: ---------------------------------------
Name:
Title:
BANK OF SCOTLAND
By: ---------------------------------------
Name:
Title:
BANKERS TRUST COMPANY
By: ---------------------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
By: ---------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By: ---------------------------------------
Name:
Title:
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By: ---------------------------------------
Name:
Title:
CREDITANSTALT - BANKVEREIN
By: ---------------------------------------
Name:
Title:
BANKBOSTON, N.A.
By: ---------------------------------------
Name:
Title:
FIRST DOMINION CAPITAL, L.L.C.
By: ---------------------------------------
Name:
Title:
XXXXXX FINANCIAL, INC.
By: ---------------------------------------
Name:
Title:
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
By: ING Capital Advisors, Inc.
as Investment Advisor
By: ---------------------------------------
Name:
Title:
LASALLE NATIONAL BANK
By: ---------------------------------------
Name:
Title:
ML CLO XII PILGRIM AMERICA
By: ---------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By: ---------------------------------------
Name:
Title:
XXXXXX HIGH YIELD TRUST
By: ---------------------------------------
Name:
Title:
XXXXXX HIGH YIELD ADVANTAGE FUND
By: ---------------------------------------
Name:
Title:
XXXXXX VT HIGH YIELD TRUST
By: ---------------------------------------
Name:
Title:
ROYALTON COMPANY
By: ---------------------------------------
Name:
Title:
SOUTHERN PACIFIC BANK
By: ---------------------------------------
Name:
Title:
XXX XXXXXX AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By: ---------------------------------------
Name:
Title:
INDOSUEZ CAPITAL FUNDING II, LTD.
By: INDOSUEZ CAPITAL LUXEMBOURG, as
Collateral Manager
By: --------------------------------
Name:
Title:
INDOSUEZ CAPITAL FUNDING III, LTD.
By: INDOSUEZ CAPITAL LUXEMBOURG, as
Collateral Manager
By: --------------------------------
Name:
Title:
SENIOR DEBT PORTFOLIO
By: BOSTON MANAGEMENT AND
RESEARCH, as Investment Advisor
By: --------------------------------
Name:
Title:
SPS SWAPS
By: ---------------------------------------
Name:
Title:
PILGRIM AMERICA PRIME RATE TRUST
By: ---------------------------------------
Name:
Title:
PACIFIC LIFE CBO 1998-1 LTD
By: ---------------------------------------
Name:
Title:
CYPRESS TREE BOSTON PARTNERS
By: ---------------------------------------
Name:
Title:
DELANO COMPANY
By: Pacific Investment Management Company,
as its Investment Advisor
By: ---------------------------------------
Name:
Title:
KZH HOLDING CORPORATION
By: ---------------------------------------
Name:
Title:
KZH-CRESCENT 2 CORPORATION
By: ---------------------------------------
Name:
Title:
KZH HOLDING CORPORATION III
By: ---------------------------------------
Name:
Title:
KZH IV CORPORATION
By: ---------------------------------------
Name:
Title:
SUBSIDIARY GUARANTORS:
ALASKA FINANCIAL SERVICES, INC.
CFC SERVICES CORP.
THE CONTINENTAL ALLIANCE, INC.
SOUTHWEST CREDIT SERVICES, INC.
By: ---------------------------------------
Name:
Title:
A.M. XXXXXX & ASSOCIATES, INC.
ACCOUNT PORTFOLIOS G.P., INC.
ACCOUNT PORTFOLIOS, INC.
ASSET RECOVERY & MANAGEMENT CORP.
FM SERVICES CORPORATION
XXXXX AND XXXXX, INC.
INDIANA MUTUAL CREDIT ASSOCIATION, INC.
XXXXXXXX XXXXXX & ASSOCIATES, INC.
NATIONAL ACCOUNT SYSTEMS, INC.
PAYCO AMERICAN CORPORATION
PAYCO AMERICAN INTERNATIONAL CORP.
PAYCO-GENERAL AMERICAN CREDITS, INC.
PROFESSIONAL RECOVERIES INC.
QUALINK, INC.
UNIVERSITY ACCOUNTING SERVICE, INC.
ACCELERATED BUREAU OF COLLECTIONS, INC.
NORTH SHORE AGENCY, INC.
By: ---------------------------------------
Name:
Title:
KZH-CRESCENT CORPORATION
By: ---------------------------------------
Name:
Title:
