OUTSOURCING SOLUTIONS INC.
STOCKHOLDERS AGREEMENT
THIS AGREEMENT is made as of December 10, 1999, among Outsourcing Solutions
Inc., a Delaware corporation (the "Company"), Madison Dearborn Capital Partners
III, L.P. (the "Principal Investor"), Madison Dearborn Special Equity III, L.P.
("MDSE"), Special Advisers Fund I, LLC ("SA"), Ares Leveraged Investment Fund,
L.P. ("Ares I"), Ares Leveraged Investment Fund II, L.P., ("Ares II"), DB
Capital Investors, L.P. ("DB"), First Union Investors, Inc. ("First Union"),
Xxxxxx Capital 1330 Investors II, L.P. ("Xxxxxx"), Xxxxxx Capital Private Equity
Fund III, L.P. ("Xxxxxx III"), BNY Partners Fund, L.L.C. ("BNY"), Xxxxxx
Financial, Inc. ("Xxxxxx"), Magnetite Asset Investors L.L.C. ("Magnetite"), FBR
Financial Fund II, L.P. ("FBR") and Harvest Opportunity Partners, L.P.
("Harvest," and, together with the Principal Investor, MDSE, SA, Ares I, Ares
II, DB, First Union, Xxxxxx, Xxxxxx III, BNY, Xxxxxx, Magnetite, FBR and any
other Person that executes a counterpart to this Agreement from time-to-time in
such capacity, the "Investors"), each of the stockholders listed on Exhibit A
attached hereto (including stockholders who acquire capital stock of the Company
after the date hereof and execute a counterpart to this Agreement or otherwise
agree to be bound by this Agreement, the "Stockholders"), each of the
optionholders listed on Exhibit B attached hereto (including optionholders who
acquire options to purchase capital stock of the Company after the date hereof
and execute a counterpart to this Agreement or otherwise agree to be bound by
this Agreement, the "Optionholders") and each of the warrantholders listed on
Exhibit C attached hereto (including warrantholders who acquire warrants of the
Company after the date hereof and execute a counterpart to this Agreement or
otherwise agree to be bound by this Agreement, the "Warrantholders"). The
Investors, the Stockholders, the Optionholders and the Warrantholders are
collectively referred to as the "OSI Stockholders" and individually as an "OSI
Stockholder." Capitalized terms used herein are defined in paragraph 12 hereof.
The Company, certain of the OSI Stockholders, and others are parties to
a Stock Subscription and Redemption Agreement dated as of October 8, 1999, as
amended as of the date hereof (the "Recapitalization Agreement"). The execution
and delivery of this Agreement by the Company and the OSI Stockholders party
thereto is a condition to the Closing (as defined in the Recapitalization
Agreement) of the Recapitalization Agreement.
The Company and Ares I, Ares II, DB, First Union, Xxxxxx, Xxxxxx III,
BNY, Xxxxxx and Magnetite (collectively the "Unit Purchasers") are parties to a
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
wherein, inter alia, the Unit Purchasers are acquiring certain shares of Common
Stock (the "Unit Common Shares"). The execution and delivery of this Agreement
by the Company and the parties hereto is a condition to the closing of the
Purchase Agreement.
The Company, the Principal Investor, and DB, First Union, Xxxxxx,
Xxxxxx III, BNY, FBR and Harvest (collectively the "Co-Invest Purchasers") are
parties to an Assignment and Stock Purchase Agreement, dated as of the date
hereof (the "Assignment Agreement") wherein, inter alia, the Co-Invest
Purchasers are acquiring certain shares of Common Stock (the "Co-Invest Common
Shares").
The Company and the OSI Stockholders desire to enter into this
Agreement for the purposes, among others, of (i) establishing the composition of
the Company's Board of Directors (the "Board"), (ii) assuring continuity in the
management and ownership of the Company, (iii) limiting the manner and terms by
which the OSI Stockholders' Common Stock may be transferred, and (iv) granting
certain registration rights to the OSI Stockholders.
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 Closing and until the provisions of this paragraph 1
cease to be effective pursuant to 1(d) below, each OSI Stockholder, other than
the Rollover Stockholders, shall vote all of his, her or its OSI Stockholder
Shares which are voting shares and any other voting securities of the Company
over which such OSI Stockholder has voting control (other than Senior Preferred
Stock) and shall take all other necessary or desirable actions within his
control (whether in his, her or 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), and
the Company shall take all necessary or desirable actions within its control
(including, without limitation, calling special board and stockholder meetings),
so that:
(i) the authorized number of directors on the Board to be elected by
the holders of Common Stock shall be established at such number as shall be
determined from time to time in the sole discretion of the Principal Investor
(it being understood that upon the occurrence of a Voting Rights Triggering
Event (as defined in the Certificate of Designation) the holders of Senior
Preferred Stock may elect an additional two or more directors in accordance with
the terms thereof);
(ii) the following individuals shall be elected to the Board by holders
of the Common Stock:
(A) one individual designated by the Principal Investor who is a
member of the Company's management (the "Management Director"),
provided that until the first annual meeting of the Company's
stockholders, Xxxxxxx Xxxxx shall serve as the Management
Director;
(B) all other individuals designated by the Principal Investor (the
"Principal Investor Directors"), who shall initially be Xxxx Xxxx
and Xxxxxxx Xxxx; provided that the Principal Investor may
authorize in writing one or more other Persons (each an
"Authorized Person") to designate one or more additional
individuals to be elected to the Board on such terms and
conditions as the Principal Investor shall determine in its sole
discretion (provided, that any such Authorized Person shall
in writing to such designation and related obligations pursuant
to Section 3(c));
(iii) the removal from the Board (with or without cause) of any
individual designated hereunder by the Principal Investor shall be at the
Principal Investor's written request (or the written request of an Authorized
Person in the case of an individual designated by such Authorized Person), but
only upon such written request and under no other circumstances, provided that
if any director elected pursuant to subparagraph (ii)(A) above ceases to be an
employee of the Company and its Subsidiaries, he or she shall be removed as a
director promptly after his or her employment ceases; and
(iv) in the event that any individual designated hereunder by the
Principal Investor ceases to serve as a member of the Board during his term of
office, the resulting vacancy on the Board shall be filled by an individual
designated by the Principal Investor (or by an individual designated by an
Authorized Person in the case where the representative ceasing to serve as a
member of the Board was designated by such Authorized Person), provided that in
the event the Management Director ceases to serve as a member of the Board
during his term of office, the resulting vacancy on the Board shall be filled by
a member of the Company's management designated by the Principal Investor.
(b) The Company shall pay the reasonable out-of-pocket expenses incurred
by each director (including any director elected by holders of the Senior
Preferred Stock in accordance with the Certificate of Designation) in connection
with attending the meetings of the Board and any committee thereof.
(c) If the Principal Investor (or an Authorized Person) fails to
designate an individual to fill a directorship pursuant to the terms of this
paragraph 1, the individual previously holding such directorship shall be
elected to such position, or if such individual fails or declines to serve, the
election of an individual to such directorship shall be accomplished in
accordance with the Company's Bylaws and applicable law; provided that the OSI
Stockholders shall vote to remove any such individual the Principal Investor (or
the Authorized Person, if applicable) so directs in accordance with paragraph
1(a)(iii).
(d) The provisions set forth in this paragraph 1 shall remain in effect
until the consummation of a Qualified Public Offering.
2. Representations and Warranties. Each OSI Stockholder represents and
warrants as to itself that (i) such OSI Stockholder is the record owner of the
number of OSI Stockholder Shares set forth opposite his, her or its name on the
applicable Exhibit attached hereto, (ii) this Agreement has been duly
authorized, executed and delivered by such OSI Stockholder and constitutes the
valid and binding obligation of such OSI Stockholder, enforceable in accordance
with its terms, and (iii) such OSI Stockholder has not granted and is not a
party to any proxy, voting trust or other agreement which is inconsistent with,
conflicts with or violates any provision of this Agreement. No holder of OSI
Stockholder Shares shall grant any proxy or become party to any voting trust or
other agreement which is inconsistent with, conflicts with or violates any
provision of this Agreement. The Company represents and warrants that this
Agreement has been duly authorized, executed and delivered by the Company and
constitutes the valid and binding obligation of the Company, enforceable in
accordance with its terms
3. Restrictions on Transfer of OSI Stockholder Shares.
(a) Transfer of OSI Stockholder Shares. No holder of OSI Stockholder
Shares shall sell, transfer, assign, pledge or otherwise dispose of (whether
with or without consideration and whether voluntarily or involuntarily or by
operation of law) any interest in his, her or its OSI Stockholder Shares (a
"Transfer"), except pursuant to the provisions of this paragraph 3, or, with
respect to any OSI Stockholder other than the Principal Investor and its
Affiliates, with the prior written approval of the Principal Investor, which
approval shall not be unreasonably withheld (but which approval may be
conditioned upon the transferee agreeing to be bound by this Agreement);
provided, however, that the Principal Investor may withhold such approval in its
sole discretion with regard to any proposed Transfer to a Competitor, or an
affiliate of a Competitor, of the Company.
(b) Drag-Along Rights.
(i) If the Board and the holders of a majority of the shares of
Common Stock then outstanding approve a Sale of the Company (an "Approved
Sale"), each OSI Stockholder and each holder of OSI Stockholder Shares shall
vote for, consent to and take all actions required in connection with and raise
no objections against such Approved Sale. If the Approved Sale is structured as
a (A) merger or consolidation, each holder of OSI Stockholder Shares shall waive
any dissenters' rights, appraisal rights or similar rights in connection with
such merger or consolidation or (B) sale of stock, each holder of OSI
Stockholder Shares shall agree to sell all of his OSI Stockholder Shares and
rights to acquire OSI Stockholder Shares, in each case on the same terms and
conditions approved by the Board and applicable to all holders of the Common
Stock then outstanding. Each holder of OSI Stockholder Shares shall take all
necessary or desirable actions in connection with the consummation of the
Approved Sale as requested by the Company.
(ii) The obligations of the holders of OSI Stockholder Shares with
respect to the Approved Sale of the Company are subject to the satisfaction of
the following conditions: (A) upon the consummation of the Approved Sale, each
OSI Stockholder and each holder of OSI Stockholder Shares (in his or her
capacity as such) shall have the right to receive the same terms, conditions and
form of consideration with respect to such OSI Stockholder Shares (and in the
same proportion of the aggregate consideration with respect to such Approved
Sale that such holder would have received if the OSI Stockholder Shares
constituted all of the issued and outstanding capital stock of the Company and
if such aggregate consideration had been distributed by the Company in complete
liquidation pursuant to the rights and preferences set forth in the Company's
Certificate of Incorporation as in effect immediately prior to such Approved
Sale); (B) if any holders of a class of OSI Stockholder Shares are given an
option as to the form and amount of consideration to be received, each holder of
such class of OSI Stockholder Shares shall be given the same option; and
(c) each holder of then currently exercisable rights to acquire shares
of a class of OSI Stockholder Shares shall be given an opportunity to either (i)
exercise such rights prior to the consummation of the Approved Sale and
participate in such sale as holders of such class of OSI Stockholder Shares or
(ii) upon the consummation of the Approved Sale, receive in exchange for such
rights consideration equal to the amount determined by multiplying (1) the same
amount of consideration per share of a class of OSI Stockholder Shares received
by holders of such class of OSI Stockholder Shares in connection with the
Approved Sale less the exercise price per share of such class of OSI Stockholder
Shares of such rights to acquire such class of OSI Stockholder Shares by (2) the
number of shares of such class of OSI Stockholder Shares represented by such
rights assuming such rights were exercised as of the date of consummation of the
Approved Sale; provided, however, that if the purchaser in any Approved Sale
desires to have some or all OSI Stockholders who are members of the Company's
management retain or rollover some or all of their OSI Stockholder Shares and/or
desires to have the Principal Investor and/or other specified stockholders of
the Company retain or rollover some or all of their OSI Stockholder Shares in
order to qualify the Approved Sale for recapitalization accounting, the
foregoing provisions in (A), (B) and (C) shall not apply to the extent of any
such retention or rollover; provided further, however, that no OSI Stockholder
shall be required by this Agreement, without such OSI Stockholder's written
consent, to retain or rollover some or all of their OSI Stockholder Shares,
except in a merger in which all stockholders are required to be treated equally
with respect to such retention or rollover.
(iii) Each OSI Stockholder will bear, and shall not be required to bear
more than, his or its pro rata share (based upon the number of OSI Stockholder
Shares to be sold) of the costs of any sale of OSI Stockholder Shares pursuant
to an Approved Sale to the extent such costs are incurred for the benefit of all
such holders of OSI Stockholder Shares and are not otherwise paid by the Company
or the acquiring party; provided that no such OSI Stockholder shall be required
to make any such payment unless the Principal Investor is required to pay its
pro rata share. Costs incurred by the holders of OSI Stockholder Shares on their
own behalf will not be considered costs of the Approved Sale. Each OSI
Stockholder transferring OSI Stockholder Shares pursuant to an Approved Sale
shall be obligated to join on a pro rata basis (based on the number of OSI
Stockholder Shares to be sold) in any indemnification or other obligations that
are part of the terms and conditions of the Approved Sale (other than any such
obligations that relate specifically to a particular OSI Stockholder, such as
indemnification with respect to representations and warranties given by an OSI
Stockholder regarding such OSI Stockholder's title to and ownership of OSI
Stockholder Shares). Notwithstanding the foregoing, no OSI Stockholder shall be
obligated in connection with any Approved Sale to agree to indemnify or hold
harmless the transferees in an amount in excess of the net proceeds paid to such
OSI Stockholder in connection with the Approved Sale.
(c) Co-Sale Rights.
(i) In the event that the Principal Investor or its Afilliates (as
defined in paragraph 3(d) but not including its limited partners) or an
Authorized Person or its Affiliates (any of the above the "Transferring Holder")
propose to effect a direct or indirect Transfer (other than a Permitted Transfer
as defined in paragraph 3(d)) of OSI Stockholder Shares, the Transferring Holder
shall promptly give written notice (the "Co-Sale Notice") to the Company and the
other OSI Stockholders at least 30 days prior to the closing of such Transfer.
The Co-Sale Notice shall describe in reasonable detail the proposed Transfer
including, without limitation, the name of, and the number (by class) of OSI
Stockholder Shares to be purchased by, the transferee, the purchase price of
each OSI Stockholder Share to be sold, the number of shares the Transferring
Holder proposes to Transfer, any other terms of the proposed Transfer and the
date the proposed Transfer will be consummated, it being understood that if such
proposed Transfer by the Transferring Holder is in a public offering under the
Securities Act and the provisions of paragraph 6 apply, then this paragraph
3(c)(i) shall not apply.
(ii) Each other OSI Stockholder may elect to participate in the
contemplated Transfer by delivering irrevocable written notice to the
Transferring Holder setting forth the number of OSI Stockholder Shares such OSI
Stockholder desires to sell in the contemplated Transfer within 20 days after
receipt of the Co-Sale Notice. If any OSI Stockholders have elected to
participate in such Transfer (each, a "Participant"), each such Participant
(subject in the case of Optionholders and Warrantholders to the Option or
Warrant being exercisable and to the payment by such holder of the applicable
exercise price) shall be entitled to sell in the contemplated Transfer, at the
same price and on the same terms as the Transferring Holder, a number of OSI
Stockholder Shares equal to the product of (A) the quotient determined by
dividing the percentage of OSI Stockholder Shares owned by such Participant by
the aggregate percentage of OSI Stockholder Shares owned by the Transferring
Holder and all Participants and (B) the number of OSI Stockholder Shares to be
sold in the contemplated Transfer.
For example, if the Co-Sale Notice contemplated a sale of 100 OSI
Stockholder Shares by the Transferring Holder, and if the
Transferring Holder at such time own 30% of all OSI Stockholder
Shares and if the Participants own 20% of all OSI Stockholder
Shares, the Transferring Holder would be entitled to sell 60
shares (30% / 50% x 100 shares) and the Participants would be
entitled to sell 40 shares (20% / 50% x 100 shares).
(iii) The Transferring Holder shall use reasonable best efforts to
obtain the agreement of the prospective transferee(s) to the participation of
the Participants in any contemplated Transfer, and the Transferring Holder may
not Transfer any of their respective OSI Stockholder Shares to the prospective
transferee(s) if the prospective transferee(s) declines to allow the
participation of the Participants in accordance with the foregoing formula.
(iv) Each Participant will bear its pro rata share (based upon the
number of shares sold) of the reasonable costs of any sale of OSI Stockholder
Shares pursuant to a sale subject to this paragraph 3(c) to the extent such
costs are incurred for the benefit of all selling OSI Stockholders and are not
otherwise paid by the Company or the acquiring party; provided, that no such OSI
Stockholder shall be required to make any such payment unless the Principal
Investor is required to pay its pro rata share. Costs incurred by the OSI
Stockholders on their own behalf will not be considered costs of the transaction
hereunder.
(d) Permitted Transfers. The restrictions set forth in this paragraph 3
shall not apply with respect to any Transfer of OSI Stockholder Shares by any
OSI Stockholder (i) to the Company, (ii) in the case of any OSI Stockholder who
is a natural person, pursuant to applicable laws of descent and distribution or
among such OSI Stockholder's Family Group or Affiliates, as applicable, (iii) in
the case of an OSI Stockholder or Warrantholder that is a corporation,
partnership or limited liability company, to its Affiliates, (iv) in the case of
the Investors, to their respective officers, directors, employees, partners or
Affiliates or to other Investors, (v) as to any OSI Stockholder, pursuant to a
Public Sale, (vi) in the case of the Unit Purchasers and their Affiliates, of
Unit Common Shares to any Person in accordance with the Purchase Agreement,
(vii) in the case of the Co-Invest Purchasers and their Affiliates, of Co-Invest
Common Shares to any Person in accordance with paragraph 8, and (viii) in the
case of the Principal Investor and its Affiliates, to any Person, provided that
immediately after such transfer the Principal Investor and its Affiliates own
not less than sixty percent (60%) of the outstanding shares of the Company's
Common Stock (collectively referred to herein as "Permitted Transferees");
provided that the restrictions contained in this paragraph 3 shall continue to
be applicable to the OSI Stockholder Shares after any such Transfer (other than
a Transfer to the Company or as provided in paragraph 3(e)); provided, further
that the transferees of such OSI Stockholder Shares (other than in the case
where the Company is the transferee) shall have agreed in writing to be bound by
the provisions of this Agreement affecting the OSI Stockholder Shares so
transferred; provided, further that the provision in subparagraphs 3(d)(ii),
(iii) or (viii) shall not apply to Transfers by a Rollover Stockholder which is
a partnership or the Principal Investor to a partner of such Rollover
Stockholder or Principal Investor until such time as there has been an initial
public offering of the Company's securities (in which event such OSI Stockholder
Shares will remain subject to the other terms hereof, including paragraph 4);
provided, further that the restrictions set forth in this paragraph 3 shall not
apply with respect to the execution by an OSI Stockholder of, and any Transfers
pursuant to, the Pledge or the Senior Credit Pledge. For purposes of this
Agreement, "Family Group" means as to any OSI Stockholder who is a natural
person his or her spouse and descendants (whether natural or adopted) and any
trust solely for the benefit of such OSI Stockholder or his or her spouse and/or
descendants, and "Affiliate" of an OSI Stockholder means any other Person,
directly or indirectly controlling, controlled by or under common control with
such OSI Stockholder and any partner of an OSI Stockholder which is a
partnership and any officer or director of any OSI Stockholder which is a
corporation or other entity.
Any Affiliate of an OSI Stockholder (other than a natural person)
who receives any OSI Stockholder Shares shall Transfer such OSI Stockholder
Shares to the OSI Stockholder from whom the OSI Stockholder Shares were
originally received or acquired within 5 days after ceasing to be an Affiliate
of such OSI Stockholder.
Notwithstanding anything in this Agreement to the contrary, no
Rollover Stockholder which is a party to the Pledge shall Transfer any of his,
her or its OSI Stockholder Shares until such time as such OSI Stockholder Shares
are no longer subject to the Pledge, at which time such OSI Stockholder Shares
may be Transferred pursuant to the terms of this paragraph 3.
(e) Termination of Restrictions. The restrictions set forth in this
paragraph 3 shall continue with respect to each OSI Stockholder Share until the
earlier of (i) the date on which such OSI Stockholder Share has been transferred
in a Public Sale, (ii) the date on which such OSI Stockholder Share has been
transferred pursuant to this paragraph 3 (other than a transfer pursuant to
subparagraph 3(d) and other than a transfer approved by the Principal Investor
pursuant to paragraph 3(a) on the condition that the transferee agree to be
bound by this Agreement), (iii) the tenth anniversary of the date of this
Agreement or (iv) the consummation of a Qualified Public Offering.
4. Holdback Agreement. No holder of OSI Stockholder Shares shall effect
any public sale or distribution of any OSI Stockholder Shares or of any other
capital stock or equity securities of the Company (other than the Senior
Preferred Stock), or any securities convertible into or exchangeable or
exercisable for such stock or securities, during the seven days prior to and the
180-day period beginning on the effective date of any underwritten public
offering of capital stock (or securities convertible into or exchageable for
capital stock) (other than the Senior Preferred Stock) of the Company unless the
underwriters managing the registration otherwise agree. This paragraph 4 shall
remain in effect with respect to each OSI Stockholder Share until earlier of (a)
the date on which such OSI Stockholder Share has been transferred in a Public
Sale, or (b) the ninetieth (90th) day following the closing of a Qualified
Public Offering; provided, however, that for each holder of OSI Stockholder
Shares who is an employee of the Company at the time of a Qualified Public
Offering or who is not an Independent Third Party immediately after such
Qualified Public Offering, the restrictions on the transfer of OSI Stockholder
Shares set forth in this paragraph 4 shall terminate only upon (a) above.
5. Call Upon Termination of Management Stockholder's Employment.
(a) Notwithstanding any other provision of this Agreement to the
contrary, upon the death, disability, retirement or termination of employment
(each a "Call Event") of any Management Stockholder employed immediately prior
to such Call Event by the Company or any of the Company's Subsidiaries, the
Company or its designee shall, on terms and subject to the conditions set forth
in this paragraph 5, have the right (the "Management Call") at the option of the
Company, to purchase all but not less than all of the Call Shares and Vested
Stock Options held by such Management Stockholder, and any Permitted Transferee
of Call Shares or Vested Stock Options of such Management Stockholder, by
delivering written notice to such Management Stockholder or his or her Permitted
Transferees, within 60 days after the occurrence of the Call Event. The offering
price for the Call Shares or Vested Stock Options offered pursuant to this
paragraph 5 shall be equal to the Fair Market Value of such Call Shares or
Vested Stock Options at such time. As used in this Agreement, the "Fair Market
Value" of any OSI Stockholder Shares (including Call Shares) or any Vested Stock
Options shall be as determined in good faith by the Board of Directors of the
Company (without discount for lack of marketability or minority interest).
(b) If the Company shall elect to exercise the Management Call in
accordance with this paragraph 5, the closing of the purchase by the Company
shall take place no later than 45 days after the exercise of the Management
Call, which time in the case of the death of a Management Stockholder may at the
Company's election be extended to provide for probate of such Stockholder's
estate. On the date scheduled for such closing, the price for the OSI
Stockholder Shares or Vested Stock Options subject to the Management Call shall
be paid in full to the Management Stockholder holding such OSI Stockholder
Shares (including, if applicable, such OSI Stockholder Shares held by any
Permitted Transferee of such Management Stockholder) by the Company or its
designee against delivery of a certificate or certificates, as the case may be,
representing the purchased shares in proper form for transfer. In connection
with such closing, such Management Stockholder and/or Permitted Transferee (as
the case may be) shall warrant to the Company or its designee good and
marketable title to the purchased OSI Stockholder Shares or Vested Stock
Options, free and clear of all claims, liens, charges, encumbrances and security
interests of any nature whatsoever except those under this Agreement.
6. Piggyback Registration Rights.
(a) Right to Piggyback. Whenever the Company proposes to register any of
its Common Stock under the Securities Act (other than a registration on Form S-4
or S-8 or any successor or similar forms) for the account of the Company or any
other Person, and the registration form to be used may be used for the
registration of OSI Stockholder Shares (a "Piggyback Registration"), the Company
will give prompt written notice to all holders of OSI Stockholder Shares of its
intention to effect such a registration and, subject to paragraphs 6(c) and 6(d)
below, will include in such registration all OSI Stockholder Shares with respect
to which the Company has received written requests for inclusion therein within
15 days after the receipt of the Company's notice.
(b) Piggyback Expenses. In all Piggyback Registrations, all costs and
expenses incident to the Company's performance of or compliance with this
paragraph 6, including, without limitation, all registration and filing fees,
fees and expenses of compliance with securities or blue sky laws, printing
expenses, messenger and delivery expenses, fees and disbursements of custodians,
fees and disbursements of counsel for the Company, and all independent certified
public accountants, underwriters (excluding discounts and commissions), and
other persons retained or employed by the Company (all such expenses being
herein called "Registration Expenses") will be paid by the Company.
(c) Priority on Registrations. If a Piggyback Registration is an
underwritten registration, and the managing underwriters advise the Company in
writing (with a copy to each party hereto requesting registration of OSI
Stockholder Shares) that, in their opinion, the number of securities requested
to be included in such registration exceeds the number which can be sold in such
offering without adversely affecting the marketability of such offering, the
Company will include in such registration (1) with respect to a primary
registration: (a) first, the securities that the Company proposes to sell, and
(b) second, the OSI Stockholder Shares requested to be included in such
registration pursuant to this Section 6 together with any other holders of
securities to whom registration rights may hereafter be granted, pro rata among
the holders thereof on the basis of the number of OSI Stockholder Shares or
other securities owned by each such holder, and (2) with respect to a secondary
registration: (a) first, the shares of capital stock of the Company of any
stockholder exercising his, her or its right to include his, her or its shares
of Common Stock in a Demand Registration, and (b) second, the OSI Stockholder
Shares requested to be included in such registration pursuant to this Section 6
together with any other holders of securities to whom registration rights may
hereafter be granted, pro rata among the holders thereof on the basis of the
number of OSI Stockholder Shares or other securities owned by each such holder .
If, as a result of the proration provisions of this Section 6(c), any OSI
Stockholder shall not be entitled to include all OSI Stockholder Shares in a
Piggyback Registration that such OSI Stockholder has requested to be included,
such OSI Stockholder may elect to withdraw his request to include its OSI
Stockholder Shares in such registration (a "Withdrawal Election"); provided that
a Withdrawal Election shall be made prior to the effectiveness of the related
registration statement and shall be irrevocable and, after making a Withdrawal
Election, an OSI Stockholder shall no longer have any right to include its OSI
Stockholder Shares in the registration as to which such Withdrawal Election was
made.
(d) Withdrawal by Company. If, at any time after giving notice of its
intention to register any of its securities as set forth in paragraph 6(a) and
before the effective date of such registration statement filed in connection
with such registration, the Company shall determine, for any reason, not to
register such securities, the Company may, at its sole discretion, give prompt
written notice of such determination to each holder of OSI Stockholder Shares
and thereupon shall be relieved of its obligation to register any OSI
Stockholder Shares in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith as provided
herein).
7. Grant of Preemptive Rights.
(a) If the Company issues New Securities to any Person (such Person an
"Acquiring Person") at a subscription, offering, exercise or conversion price
lower than either (x) the Fair Market Value (as defined in paragraph 5(a)) of
such New Securities at the time such New Securities are issued or (y) the price
per Unit Common Share as set forth in Section 2.04 of the Purchase Agreement
(equitably adjusted for stock splits, stock dividends, stock combinations and
similar events), then the Company hereby grants each Rollover Stockholder and
each Investor and/or its respective Affiliates, as the case may be, so long as
such Investor and/or its Affiliates beneficially owns 35% or more of the shares
of Common Stock issued to such Investor or its Affiliates on the date hereof
(collectively with the Rollover Stockholders, the "Right A Holders"), preemptive
rights to purchase a pro rata portion of such New Securities at the same price
and on the same terms and conditions offered to such Acquiring Person. In the
event (and on each occasion) that the Company shall decide to undertake an
issuance of New Securities to an Acquiring Person, the Company will give all
Right A Holders written notice (a "Preemptive Notice") of the Company's
decision, describing the type of New Securities and the terms upon which the
Company has decided to issue the New Securities (including, without limitation,
the expected timing of such issuance which will in no event exceed 60 days after
the date of the Preemptive Notice).
(b) If the Company issues New Securities to the Principal Investor
or its Affiliates, which issuance (including any prior issuance with respect to
which such Unit Purchaser or Co-Invest Purchaser had no preemptive rights
hereunder) would either otherwise entitle a Unit Purchaser or Co-Invest
Purchaser to purchase at least $1.5 million of New Securities under this
paragraph 7(b) or dilute (calculated on a fully diluted basis) the percentage of
beneficial ownership of the Company's Common Stock by a Unit Purchaser or
Co-Invest Purchaser as of the issue date of the Common Stock by 10% or more,
then the Company hereby grants each Unit Purchaser, Co-Invest Purchaser and its
respective Affiliates (the "Right B Holders" and collectively with the Right A
Holders, the "Rights Holders"), preemptive rights to purchase a pro rata portion
of such New Securities at the same price and on the same terms and conditions
offered to the Principal Investor or its Affiliates, as applicable. In the event
(and on each occasion) that the Company shall decide to undertake an issuance of
New Securities to the Principal Investor or its Affiliates, the Company will
give all Right B Holders a Preemptive Notice of the Company's decision,
describing the type of New Securities and the terms upon which the Company has
decided to issue the New Securities (including, without limitation, the expected
timing of such issuance which will in no event exceed 60 days after the date of
the Preemptive Notice).
(c) Each of the Rights Holders, as applicable, shall have 20 business
days from the date on which it receives a Preemptive Notice to agree to purchase
its pro rata portion of such New Securities for the applicable price and upon
the same terms specified in the Preemptive Notice by giving written notice to
the Company. Each Rights Holder, as applicable, shall have the option to
purchase less than all of its pro rata portion. If, in connection with such a
proposed issuance of New Securities, any Rights Holders shall for any reason
fail or refuse to give such written notice to the Company within such 20-day
period, such OSI Stockholder shall, for all purposes of this paragraph 7, be
deemed to have refused (in that particular instance only) to purchase any of
such New Securities and to have waived (in that particular instance only) all of
its rights under this paragraph 7 to purchase any of such New Securities. Upon
expiration of the offering periods described in this paragraph 7, the Company
shall be entitled to sell such New Securities and other securities which the
Rights Holders, as applicable, have elected not to purchase during the 120 days
following such expiration on terms and conditions no more favorable to the
purchasers thereof than those offered to the applicable Rights Holders. Any New
Securities offered or sold by the Company after such 120-day period must be
reoffered to the applicable Rights Holders, as the case may be, provided that
the applicable Rights Holders continue to meet the requirements set forth in
this paragraph 7. The rights granted by this paragraph 7 shall terminate upon
the consummation of a Qualified Public Offering. Notwithstanding anything herein
to the contrary, no Rights Holder has any preemptive rights with respect to any
New Securities issued in connection with (i) debt or preferred stock financing
(so long as such preferred stock does not constitute New Securities), (ii) the
exercise of options, warrants or other rights or the conversion or exchange of
securities of the Company, (iii) the receipt of paid-in-kind dividends, (iv) a
stock split, stock dividend, stock distribution or recapitalization in which all
similarly situated OSI Stockholders are treated in a similar manner, (v)
issuances to the directors, officers or employees of the Company or any
Subsidiary of the Company pursuant to a benefit plan or similar arrangement or
as an inducement to hire a director, officer or employee of the Company or any
Subsidiary of the Company, provided that such issuances are approved by the
Board of Directors or (vi) issuances to customers or suppliers of the Company,
provided that such issuances are approved by the Board of Directors. As used in
this paragraph 7, the term "pro rata portion" with respect to a Rights Holder
shall mean the aggregate number of New Securities to be issued multiplied by a
fraction, the numerator of which is the number of OSI Stockholder Shares held at
such time by such Rights Holder and the denominator of which is the aggregate
number of OSI Stockholder Shares on a fully diluted basis.
8. First Offer Right. Prior to making any Transfer (other than a
Permitted Transfer) of any Co-Invest Common Shares by a Co-Invest Purchaser or
its assignee, such Person (the "Transferring Stockholder") shall deliver a
written notice (an "Offer Notice") to the Company and the Principal Investor.
The Offer Notice shall disclose in reasonable detail the proposed number of
Co-Invest Common Shares to be transferred, the proposed terms and conditions of
the Transfer and the identity, if known, of the prospective transferee(s).
First, the Company may elect to purchase all (but not less than all) of the
Co-Invest Common Shares specified in the Offer Notice at the price and on the
terms specified therein by delivering written notice of such election to the
Transferring Stockholder and the Principal Investor as soon as practical but in
any event within ten days after the delivery of the Offer Notice. If the Company
has not elected to purchase all of the Co-Invest Common Shares specified in the
Offer Notice within such ten-day period, the Principal Investor may elect to
purchase all (but not less than all) of the Co-Invest Common Shares specified in
the Offer Notice at the price and on the terms specified therein by delivering
written notice of such election to the Transferring Stockholder as soon as
practical but in any event within 5 days after expiration of the Company's
election. If the Company or the Principal Investor has elected to purchase
Co-Invest Common Shares from the Transferring Stockholder, the transfer of such
shares shall be consummated as soon as practical after the delivery of the
election notice(s) to the Transferring Stockholder, but in any event within 10
days after the expiration of the applicable election period. To the extent that
the Company and the Principal Investor have not elected to purchase all of the
Co-Invest Common Shares being offered, the Transferring Stockholder may, within
90 days after the expiration of the election period of the Principal Investor,
transfer such Co-Invest Common Shares to one or more third parties at a price no
less than 95% of the price per share specified in the Offer Notice and on other
terms not materially more favorable to the transferees thereof than offered to
the Company and the Principal Investor in the Offer Notice. Any Co-Invest Common
Shares not transferred within such 90-day period shall be reoffered to the
Company and the Principal Investor under this Section 8 prior to any subsequent
Transfer. The purchase price specified in any Offer Notice shall be payable
solely in cash at the closing of the transaction, or as otherwise agreed to with
the applicable Co-Invest Purchaser. Notwithstanding anything to the contrary in
this Agreement, (a) this Section 8 shall terminate and be of no further force
and effect immediately upon the consummation of a Qualified Public Offering or
at any time the Principal Investor ceases to beneficially own, in the aggregate
with its Affiliates, less than 40% of the outstanding shares of the Company's
Common Stock (on a fully diluted basis) and (b) the rights of the Principal
Investor pursuant to this Section 8 may not be assigned or otherwise transferred
to any Person other than its Affiliates.
9. Power of Attorney. In order to secure each Stockholder's,
Optionholder's and Warrantholder's obligation to (a) vote his, her or its OSI
Stockholder Shares and other voting securities of the Company in accordance with
the provisions of paragraph 1 (except for Rollover Stockholders) and (b) comply
with the requirements of paragraphs 3(b) and, as applicable, paragraph 5, each
Stockholder, each Optionholder and each Warrantholder hereby irrevocably
appoints the Principal Investor as his, her or its true and lawful
attorney-in-fact, with full power of substitution, to (i) vote all of his, her
or its OSI Stockholder Shares and other voting securities of the Company for the
election and/or removal of directors and all such other matters as expressly
provided for in paragraph 1 (except for Rollover Stockholders) and paragraph
3(b) and (ii) take all actions, and execute and deliver all agreements,
certificates or other documents, in each case necessary to implement and give
effect to the agreements set forth in paragraph 3(b) and paragraph 5 hereof in
the name and for the benefit and obligation of such Stockholder, Optionholder or
Warrantholder. The Principal Investor may exercise the irrevocable power of
attorney granted to it hereunder at any time any Stockholder, Optionholder or
Warrantholder fails to comply with the provisions of this Agreement. The power
of attorney granted by each Stockholder, Optionholder and Warrantholder pursuant
to this paragraph 9 is coupled with an interest and is given to secure the
performance of each Stockholder's, Optionholder's and Warrantholder's
obligations to the Principal Investor under this Agreement. Such power of
attorney is irrevocable, and shall survive the death, incompetency, disability,
bankruptcy or dissolution of such Stockholder, Optionholder or Warrantholder and
the subsequent holders of his, her or its OSI Stockholder Shares.
10. Legend. Each certificate evidencing OSI Stockholder Shares and each
certificate issued in exchange for or upon the transfer of any OSI Stockholder
Shares (if such shares remain OSI Stockholder Shares after such transfer) shall
be stamped or otherwise imprinted with a legend in substantially the following
form:
"The securities represented by this certificate are subject to a
Stockholders Agreement dated as of December 10, 1999 among the
issuer of such securities (the "Company") and certain of the
Company's stockholders, as amended and modified from time to
time. A copy of such Stockholders Agreement shall be furnished
without charge by the Company to the holder hereof upon written
request.
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws and may not be
transferred, sold or otherwise disposed of except pursuant to an
effective registration under the Securities Act or pursuant to an
opinion of counsel, satisfactory to the Company, to the effect
that an exemption from such registration is available.
The Company shall imprint such legend on certificates evidencing OSI Stockholder
Shares outstanding as of the date hereof. The legend set forth above shall be
removed from the certificates evidencing any shares which cease to be OSI
Stockholder Shares.
11. Transfer. Prior to transferring any OSI Stockholder Shares (other
than pursuant to a Public Sale or a Sale of the Company) to any Person, the
transferring holders of OSI Stockholder Shares shall cause the prospective
transferee to be bound by this Agreement, in the same capacity as the
transferor, and to execute and deliver to the Company and the other holders of
OSI Stockholder Shares a counterpart of this Agreement. The requirements of this
paragraph 11 shall terminate upon the consummation of a Qualified Public
Offering.
12. Definitions.
"Call Shares" shall mean collectively (i) restricted shares of Common
Stock granted, or (ii) shares of Common Stock received upon the exercise of
options granted, to certain key employees of the Company (or the Company's
Subsidiaries) pursuant to any Company stock option or stock award plan.
"Certificate of Designation" means the Certificate of Designation of
the Powers, Preferences and Relative, Participating, Optional and Other Special
Rights of Class A 14% Senior Mandatorily Redeemable Preferred Stock, Series A,
and Class B 14 % Senior Mandatorily Redeemable Preferred Stock, Series A, and
Qualifications, Limitations and Restrictions Thereof.
"Common Stock" means collectively the Company's Voting Common Stock,
par value $0.01 per share and Nonvoting Common Stock, par value $0.01.
"Competitor" means any Person who is engaged in the (i) accounts
receivable management services and outsourcing business, (ii) consumer debt
purchasing business (other than related to asset backed securities or similar
investments) or (iii) credit card business, and shall include, without
limitation, Capital One, Providian, Metris and NCO Group; provided, that no
Person or any Affiliate thereof shall be a Competitor for purposes of this
Agreement solely by reason of (a) the beneficial ownership for investment
purposes of (x) less than 15% of the voting equity securities of any Person
engaged, directly or through its Affiliates, in the business described in
clauses (i) or (ii), or (y) less than 50% of the voting equity securities of any
Person engaged, directly or through its Affiliates, in the business described in
clause (iii), and (b) being a lender to any Person, whether or not it is a
Competitor.
"Credit Agreement" means the Credit Agreement, dated as of
November 30, 1999, among the Company, the various financial institutions and
other Persons as are or may become parties thereto, DLJ Capital Funding, Inc.,
as the syndication agent, lead arranger and sole book running manager, Xxxxxx
Trust and Savings Bank, as documentation Agent, and Fleet National Bank, N.A.,
as administrative agent, as amended, supplemented, replaced, refinanced, amended
and restated or otherwise modified from time to time.
"Demand Registration" has the meaning ascribed to it in the
Registration Rights Agreement, dated as of the date hereof, among the Company
and the purchasers named therein, relating to the Company's Common Stock.
"Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, does not own together with its affiliates in
excess of 10% of the Company's Common Stock on a fully-diluted basis voting
capital stock (a "10% Owner)", who is not controlling, controlled by or under
common control with any such 10% Owner and who is not the spouse or descendent
(by birth or adoption) of any such 10% Owner or a trust for the benefit of such
10% Owner and/or such other Persons.
"Management Stockholder" shall mean the individuals listed on
Exhibit B, it being understood that any other member of the management of the
Company who becomes a stockholder or optionholder of the Company (including
through the receipt of Call Shares) shall be a Management Stockholder.
"New Securities" means (i) any Common Stock or (ii) any securities
of the Company which are convertible into, or any options, warrants or
other rights which are exercisable or exchangeable for, Common Stock.
"Options" means any options to purchase Common Stock issued by the
Company to Optionholders.
"OSI Stockholder Shares" means (i) any Common Stock purchased or
otherwise acquired by any OSI Stockholder, (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. For purposes of this Agreement, any Person who holds
Warrants or Options shall be deemed to be the holder of the OSI Stockholder
Shares issuable directly or indirectly upon conversion of the Warrants or
Options in connection with the transfer thereof or otherwise and regardless of
any restriction or limitation on the conversion thereof. As to any particular
OSI Stockholder Shares, such shares shall cease to be OSI Stockholder 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.
"Pledge" means, with respect to a Rollover Stockholder, the pledge
of such Rollover Stockholder's OSI Stockholder Shares pursuant to the Pledge
Agreement by and among the Company and the Rollover Stockholder dated as of the
date hereof.
"Public Sale" means any sale of OSI Stockholder 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 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.
"Rollover Stockholders" has the meaning ascribed to it in the
Recapitalization Agreement.
"Sale of the Company" means the sale of the Company to an
Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (i) capital stock of the Company possessing the
voting power under normal circumstances to elect a majority of the Company's
board of directors (whether by merger, consolidation or sale or transfer of the
Company's capital stock) or (ii) all or substantially all of the Company's
assets determined on a consolidated basis.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Senior Credit Pledge" means the pledge by each applicable OSI
Stockholder of its OSI Stockholder Shares pursuant to the Shareholders' Pledge
Agreement (which is Exhibit G-1 of the Credit Agreement), by and among Fleet
National Bank, N.A., in its capacity as administrative agent under the Credit
Agreement and each OSI Stockholder a signatory thereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Senior Preferred Stock" means collectively the Company's Class A
14% Senior Mandatorily Redeemable Preferred Stock, par value $0.01 per share (or
any series thereof) and the Class B 14% Senior Mandatorily Redeemable Preferred
Stock, par value $0.01 per share (or any series thereof).
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the limited liability company, partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control the managing director or general partner
of such limited liability company, partnership, association or other business
entity.
"Vested Stock Options" shall mean vested and exercisable stock
options for the Common Stock granted to certain key employees of the Company
pursuant to any Company stock option plan.
"Warrants" means any warrants to acquire Common Stock issued by the
Company to Warrantholders.
13. Transfers in Violation of Agreement. Any Transfer or attempted
Transfer of any OSI Stockholder Shares in violation of any provision of this
Agreement shall be void, and the Company shall not record such Transfer on its
books or treat any purported transferee of such OSI Stockholder Shares as the
owner of such shares for any purpose.
14. Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the OSI Stockholders unless such modification,
amendment or waiver is approved in writing by the Company and the holders of at
least 50% of the OSI Stockholder Shares and, with respect to any provision that
would, directly or indirectly, reduce the rights or increase the obligations of
any Investors hereunder, by the Investors (other than the Principal Investor or
its Affiliates) holding a majority of all OSI Stockholder Shares held by the
Investors (other than the Principal Investor or its Affiliates); provided,
however, that no modification, amendment or waiver that affects an OSI
Stockholder in a manner different from any other OSI Stockholder shall be
effective without such OSI Stockholder's consent. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance
with its terms.
15. 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.
16. 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.
Notwithstanding anything to the contrary, nothing contained in this Agreement
shall affect, limit or impair the rights and remedies of Xxxxxx in its capacity
as (i) agent and a lender to the Company or any Subsidiary pursuant to any
agreement under which the Company or any Subsidiary has borrowed money,
including without limitation the Credit Agreement, and (ii) the beneficiary of
any and all agreements entered into by the Company or any Subsidiary for the
benefit of Xxxxxx, as agent and lender, to induce Xxxxxx to enter into the
Credit Agreement.
17. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by the
Company and its successors and assigns and the OSI Stockholders and any
subsequent holders of OSI Stockholder Shares and the respective successors and
assigns of each of them, so long as they hold OSI Stockholder Shares; provided
that the rights of the Stockholders and Optionholders under paragraph 1 hereof
may not be assigned without the prior written approval of the Principal
Investor. Notwithstanding anything herein to the contrary, upon the exercise of
its rights under the Senior Credit Pledge with respect to any OSI Stockholder
Shares subject to the Senior Credit Pledge, the Administrative Agent (as defined
in the Senior Credit Pledge) shall succeed to the rights of each applicable OSI
Stockholder and automatically become subject to the obligations of each such OSI
Stockholder pursuant to this Agreement.
18. 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.
19. Remedies. The Company, the Investors, and the other OSI Stockholders
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, any Investor,
and any other OSI Stockholder 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.
20. 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 at the address set forth below and to any other
recipient at the address indicated on the schedules hereto and to any subsequent
holder of OSI Stockholder 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. The
Company's address is:
Outsourcing Solutions Inc.
c/o Madison Dearborn Capital Partners, III, L.P.
Xxxxx 0000
Xxxxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Director
with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, P.C.
Xxxxxxx X. Xxxxxx
21. 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 New York, 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
New York. In furtherance of the foregoing, the internal law of the State of New
York 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.
22. 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.
23. Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
24. Bank Holding Company. Notwithstanding anything to the contrary in
this Agreement, DB, First Union, and Xxxxxx or any of their respective direct or
indirect transferees of Unit Common Shares, or any other OSI Stockholder that is
a bank holding company or any affiliate thereof (each, a "Regulated Holder"),
shall not be entitled to vote with the other holders of Voting Common Stock
unless, until and to the extent (x) permitted by the Bank Holding Company Act of
1956, as amended, and Section 225.2(q)(2)(i) of Regulation Y promulgated
thereunder, and (y) such Regulated Holder provides written notice thereof to the
Corporation.
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement as of the date first written above.
OUTSOURCING SOLUTIONS INC.
By:
-------------------------------------
Its:
-------------------------------------
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:
-----------------------------
Its:
-----------------------------
MADISON DEARBORN SPECIAL EQUITY III, L.P.
By Madison Dearborn Partners III, L.P.
Its General Partners
By Madison Dearborn Partners, Inc.
Its General Partner
By:
-----------------------------
Its:
-----------------------------
SPECIAL ADVISORS FUND I, LLC
By:
-----------------------------
Its:
-----------------------------
ARES LEVERAGED INVESTMENT FUND, L.P.
By: Ares Management, L.P.
Its: General Partner
By:
-----------------------------
Its:
-----------------------------
ARES LEVERAGED INVESTMENT FUND II, L.P.
By: Ares Management II, L.P
Its: General Partner
By:
-----------------------------
Its:
-----------------------------
MAGNETITE ASSET INVESTORS L.L.C.
By: BLACKROCK FINANCIAL MANAGEMENT, INC.
As Managing Member
By:
--------------------------------------
Name:
Title:
DB CAPITAL INVESTORS, L.P.
By:
-----------------------------
Its:
-----------------------------
XXXXXX CAPITAL 1330 INVESTORS II, L.P.
By:Xxxxxx Capital 1330 GenPar II, L.L.C.,
its General Partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Manager
XXXXXX CAPITAL PRIVATE EQUITY
FUND III, L.P.
By: Xxxxxx Capital Management, L.L.C.,
its General Partner
By:
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Director of Co-Investing
BNY PARTNERS FUND, L.L.C.
By: BNY Private Investment Management,
Inc.,
its Member Manager
By:
--------------------------------------
Name:
Title:
XXXXXX FINANCIAL, INC.
By:
--------------------------------------
Name:
Title:
FBR FINANCIAL FUND II, L.P.
By:
------------------------------------
Its:
------------------------------------
HARVEST OPPORTUNITY PARTNERS, L.P.
By:
------------------------------------
Its:
------------------------------------
FIRST UNION INVESTORS, INC.
By:
------------------------------------
Its:
------------------------------------
EXHIBIT A: STOCKHOLDERS
Name Number of OSI Stockholder Shares
XxXxxx De Leeuw & Company, III, L.P.
219,940.82
XxXxxx De Leeuw & Company III Offshore (Europe), L.P. 18,568.55
XxXxxx De Leeuw & Company III Offshore (Asia), L.P. 4,336.86
Gamma Fund, L.L.C. 4,956.41
Xxxxx X. Xxxxxxx 144,518.39
Xxxxxx Financial, Inc. 6,537.91
Chase Equity Associates, L.P. 32,689.57
Clipper Capital Associates, L.P. 757.46
Clipper/Merchant Partners, L.P. 8,388.32
Clipper/Merban, L.P. 9,825.26
Clipper Equity Partners I, L.P. 7,368.95
Clipper/European RE, L.P. 4,912.63
CS First Boston Merchant Investments 1995/1996, L.P. 1,436.95
MLQ Investors 52,303.31
EXHIBIT B: OPTIONHOLDERS
Name Number of Options
Xxxxxxx Xxxxxx 10,000
Xxxxxxx Xxxxx 70,175
Xxxxxxx Xxxxxxx 12,500
Xxxxxxx XxXxxxx 50,000
Xxxxx Xxxxxxx 18,750
Xxxx Xxxxx 12,000
Xxxxxx Xxxxx 15,000
Xxx Xxxxxxx 10,000
C. Xxxxxxxx XxXxxx 15,000
Xxxxxxx Xxxxx 25,000
Xxxxxxx Xxxxx 25,000
Xxxx Xxxxxx 50,000
Xxxxxxx Xxxxxxxx 4,000
Xxxxx Xxxxxx 3,500
Xxxxxxx Xxxxxxx 2,000
Xxxxxx Xxxxxxxx 15,000
Xxxxxx Xxxxx 6,000
Xxxx Xxxxxxxxxxx 5,000
Xxxxx St. Xxxx 5,000
Xxxxxx Xxxxxxxx 10,000
Xxxxxxx Xxxx 5,000
Xxxxxx Xxxxxxxx 4,000
Xxxxxx Xxxxxxxx 7,500
Stuart Pim 4,000
Xxxxxxx Xxxxxxxx 5,000
Xxxx Xxxxxxx 3,000
Xxxxx Xxxxx 5,000
Xxxxx Xxxxxxx 9,000
Xxxxxxxxxxx Xxxxxx 5,000
Xxxxx Xxxxx-Xxxxxxxx 5,000
Xxxxxxx Xxxxxxx 3,000
Xxxxx Xxxxxxxxx 9,000
Xxxxxxxxx Xxxx 10,000
Xxxxx Xxxxxx 3,000
Xxxxx Xxxxx 9,000
EXHIBIT C: WARRANTHOLDERS
Name Number of Warrants
None
