EX-10 8 taca_f10k-123101.txt THIRD AMENDMENT TO CREDIT AGREEMENT THIRD AMENDMENT TO CREDIT AGREEMENT THIS THIRD AMENDMENT, dated as of January 24, 2002 (this "Amendment"), to the Existing Credit Agreement (as defined below) is among OUTSOURCING SOLUTIONS INC., a Delaware corporation (the "Borrower") and each of the Lenders party hereto. W I T N E S S E T H: -------------------- WHEREAS, the Borrower, the Lenders, Credit Suisse First Boston (as successor in interest of DLJ Capital Funding, Inc.), as the Syndication Agent, the Lead Arranger and the Sole Book Running Manger, Harris Trust and Savings Bank, as the Documentation Agent, and Fleet National Bank, as the Administrative Agent are parties to a Credit Agreement, dated as of November 30, 1999 (as amended, supplemented, amended and restated or otherwise modified prior to the date hereof, the "Existing Credit Agreement"); and WHEREAS, the Borrower has requested that the Lenders amend the Existing Credit Agreement as set forth below (the Existing Credit Agreement, as amended by this Amendment, being referred to as the "Credit Agreement"); NOW, THEREFORE, in consideration of the agreements herein contained, and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: PART I DEFINITIONS SUBPART 1.1. Certain Definitions. The following terms (whether or not underscored) when used in this Amendment shall have the following meanings (such meanings to be equally applicable to the singular and plural form thereof): "Amendment" is defined in the preamble. "Credit Agreement" is defined in the second recital. "Existing Credit Agreement" is defined in the first recital. "Third Amendment Effective Date" is defined in Part III. SUBPART 1.2. Other Definitions. Terms for which meanings are provided in the Existing Credit Agreement are, unless otherwise defined herein or the context otherwise requires, used in this Amendment with such meanings. PART II AMENDMENTS TO THE EXISTING CREDIT AGREEMENT Effective on (and subject to the occurrence of) the Third Amendment Effective Date, the Existing Credit Agreement is hereby amended in accordance with this Part. SUBPART 2.1. Amendments to Article I. Article I of the Existing Credit Agreement is hereby amended as set forth in Subpart 2.1.1. SUBPART 2.1.1. The following definitions shall be inserted into Section 1.1 of the Existing Credit Agreement in the appropriate alphabetical order: "Restructuring Charges" means nonrecurring charges, including severance, relocation, rent and certain asset write-downs incurred by the Borrower on or before June 30, 2002 in connection with the closing, conversion, realignment and relocation by the Borrower of (a) call centers in Roseville, MN; Englewood, CO, Trevose, PA; Jacksonville, FL; Richmond, VA; Atlanta, GA; Olympia, WA and Oxnard, CA, (b) offices in Fishkill, WA; Helena, MT; Bellevue, WA and Bakersfield, CA and (c) related business units. "Third Amendment Effective Date" means January 24, 2002. SUBPART 2.1.2. The definition of "EBITDA" is hereby amended by deleting the proviso appearing at the end of such definition and inserting a new clause (f) in its place to read as follows: plus (f) solely for the purpose of calculating whether the Borrower is in compliance with clauses (a) through (d) of Section 7.2.4, $2,200,000 of the amount deducted in determining Net Income representing cash Restructuring Charges. SUBPART 2.2. Amendment to Article VII. Clause (a) of Section 7.2.4 of the Existing Credit Agreement is amended in its entirety to read as follows: (a) The Borrower will not permit the Leverage Ratio as of the last day of any Fiscal Quarter occurring during any period set forth below to be greater than the ratio set forth opposite such period: Period Leverage Ratio ------ -------------- 01/01/00 through (and including) 3/31/01 5.00:1.00 04/01/01 through (and including) 06/30/01 4.75:1.00 07/01/01 through (and including) 12/31/01 4.50:1.00 01/01/02 through (and including) 03/31/02 4.50:1.00 04/01/02 through (and including) 06/30/02 4.25:1.00 07/01/02 through (and including) 9/30/02 4.25:100 10/01/02 through (and including) 12/31/02 4.00:1.00 01/01/03 through (and including) 6/30/03 3.50:1.00 07/01/03 through (and including) 06/30/04 3.00:1.00 07/01/04 through (and including) 12/31/04 2.50:1.00 01/01/05 and thereafter 2.00:1.00 PART III CONDITIONS TO EFFECTIVENESS This Amendment (and the amendments and other modifications contained herein) shall become effective as of the date first set forth above (the "Third Amendment Effective Date") when the conditions set forth in this Part have been satisfied. SUBPART 3.1. Execution of Counterparts. The Syndication Agent shall have received counterparts of this Amendment, duly executed and delivered on behalf of the Borrower and the Required Lenders. SUBPART 3.2. Affirmation and Consent. The Syndication Agent shall have received counterparts of an Affirmation and Consent, dated as of the Third Amendment Effective Date, and in form and substance satisfactory to the Syndication Agent, duly executed and delivered by each OSI Shareholder (including each investor party to the Stock Subscription Agreement) and each Obligor other than the Borrower. SUBPART 3.3. Costs and Expenses, etc. The Syndication Agent shall have received for the account of each Lender, all fees, costs and expenses due and payable pursuant to Sections 3.3 and 10.3 of the Credit Agreement, if then invoiced. SUBPART 3.4. Amendment Fee. The Syndication Agent shall have received for the account of each Lender (that has delivered its signature page in a manner and before the time set forth below), an amendment fee in an amount equal to 25 basis points on the sum of (i) such Lender's RL Percentage multiplied by the Revolving Loan Commitment Amount plus (ii) the outstanding principal amount of Term Loans owing to such Lender, but payable only to each such Lender that has delivered (including by way of facsimile) its executed signature page to this Amendment to the attention of Ms. Christine Azzaro at Mayer, Brown & Platt, 1675 Broadway, New York, New York 10019, facsimile number: 212-262-1910, at or prior to 5:00 p.m., (New York time) on January 24, 2002. SUBPART 3.5. Legal Details, etc. All documents executed or submitted pursuant hereto shall be satisfactory in form and substance to the Syndication Agent and its counsel. The Syndication Agent and its counsel shall have received all information, and such counterpart originals or such certified or other copies of such materials, as the Syndication Agent or its counsel reasonably request. All legal matters incident to the transactions contemplated by this Amendment shall be satisfactory to the Syndication Agent and its counsel. PART IV MISCELLANEOUS PROVISIONS SUBPART 4.1. Cross-References. References in this Amendment to any Part or Subpart are, unless otherwise specified, to such Part or Subpart of this Amendment. SUBPART 4.2. Loan Document Pursuant to Existing Credit Agreement. This Amendment is a Loan Document executed pursuant to the Existing Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Existing Credit Agreement. SUBPART 4.3. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the Borrower, the Lenders and their respective successors and assigns. SUBPART 4.4. Full Force and Effect; Limited Amendment. Except as expressly amended hereby, all of the representations, warranties, terms, covenants, conditions and other provisions of the Existing Credit Agreement and the Loan Documents shall remain unchanged and shall continue to be, and shall remain, in full force and effect in accordance with their respective terms. The amendments set forth herein shall be limited precisely as provided for herein to the provisions expressly amended herein and shall not be deemed to be an amendment to, waiver of, consent to or modification of any other term or provision of the Existing Credit Agreement or any other Loan Document or of any transaction or further or future action on the part of any Obligor or OSI Shareholder which would require the consent of the Lenders under the Existing Credit Agreement or any of the Loan Documents. SUBPART 4.5. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSES SECTION 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). SUBPART 4.6. Execution in Counterparts. This Amendment may be executed in any number of counterparts by the parties hereto, each of which counterparts when so executed shall be an original, but all the counterparts shall together constitute one and the same agreement. The parties hereto agree that delivery of an executed counterpart of a signature page to this Amendment by facsimile shall be effective as delivery of an original executed counterpart of this Amendment. SUBPART 4.7. Representations and Warranties. In order to induce the Lenders to execute and deliver this Amendment, the Borrower hereby represents and warrants to the Lenders that, both before and after giving effect to this Amendment, all of the statements set forth in Section 5.2.1 of the Existing Credit Agreement are true and correct. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers hereunto duly authorized as of the date first above written. OUTSOURCING SOLUTIONS INC. By: /s/ Gary L. Weller --------------------------------- Title: Executive Vice President and Chief Financial Officer CREDIT SUISSE FIRST BOSTON By: /s/ Paul J. Corona --------------------------------- Title: Director By: /s/ Robert Hetu --------------------------------- Title: Director FLEET NATIONAL BANK By: /s/ --------------------------------- Title: Vice President HARRIS TRUST AND SAVINGS BANK By: /s/ --------------------------------- Title: Vice President CENTURION CDO 1, LIMITED BY: AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC. AS COLLATERAL MANAGER By: /s/ Michael M. Leyland --------------------------------- Title: Managing Director CENTURION CDO II, LTD. BY: AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC. AS COLLATERAL MANAGER By: /S/ Michael M. Leyland --------------------------------- Title: Managing Director CENTURION CDO III, LIMITED AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC. AS COLLATERAL MANAGER By: /s/ Michael M. Leyland --------------------------------- Title: Managing Director CEDAR CBO, LIMITED BY: AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC. AS COLLATERAL MANAGER By: /s/ Michael M. Leyland --------------------------------- Title: Managing Director SEQUILLS-CENTURION V, LTD. AMERICAN EXPRESS ASSET MANAGEMENT GROUP INC. AS COLLATERAL MANAGER By: /s/ Michael M. Leyland --------------------------------- Title: Managing Director AG CAPITAL FUNDING PARTNERS, L.P. BY: ANGELO, GORDON & CO., L.P., AS INVESTMENT ADVISOR By: /s/ John W. Fraser --------------------------------- Title: Managing Director NORTHWOODS CAPITAL, LIMITED BY: ANGELO, GORDON & CO., L.P., AS COLLATERAL MANAGER By: /s/ John W. Fraser --------------------------------- Title: Managing Director NORTHWOODS CAPITAL, II, LIMITED BY: ANGELO, GORDON & CO., L.P., AS COLLATERAL MANAGER By: /s/ John W. Fraser --------------------------------- Title: Managing Director NORTHWOODS CAPITAL, III, LIMITED BY: ANGELO, GORDON & CO., L.P., AS COLLATERAL MANAGER By: /s/ John W. Fraser --------------------------------- Title: Managing Director BANK OF AMERICA, N.A. By: /s/ --------------------------------- Title: Senior Vice President MUIRFIELD TRADING LLC By: /s/ Diana L. Mushill --------------------------------- Title: Authorized Agent OLYMPIC FUNDING TRUST, SERIES 1999-3 By: /s/ Diana L. Mushill --------------------------------- Title: Authorized Agent BANK ONE By: /s/ Stephen E. McDonald --------------------------------- Title: Senior Vice President FIRST DOMINION FUNDING I By: /s/ David H. Lerner --------------------------------- Title: Authorized Signatory FIRST DOMINION FUNDING II By: /s/ David H. Lerner --------------------------------- Title: Authorized Signatory FIRST DOMINION FUNDING III By: /s/ David H. Lerner --------------------------------- Title: Authorized Signatory CSAM FUNDING I By: /s/ David H. Lerner --------------------------------- Title: Authorized Signatory DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES By: /s/ Gabriela Fields --------------------------------- Title: Associate By: /s/ James Jerz --------------------------------- Title: Vice President HELLER FINANCIAL INC. BY: HELLER FINANCIAL ASSET MANAGEMENT LLC AUTHORIZED AGENT By: /s/ Shelia C. Weimer --------------------------------- Title: Vice President BALANCED HIGH-YIELD FUND II, LTD. BY: ING CAPITAL ADVISORS LLC, AS ASSET MANAGER By: /s/ Gordon R. Cook --------------------------------- Title: Senior Vice President and Portfolio Manager ARCHIMEDES FUNDING III, LTD. BY: ING CAPITAL ADVISORS LLC, AS ASSET MANAGER By: /s/ Gordon R. Cook --------------------------------- Title: Senior Vice President and Portfolio Manager JP MORGAN CHASE BANK By: /s/ William J. Caggiano --------------------------------- Title: Managing Director KZH CYPRESSTREE-1 LLC By: /s/ Susan Lee --------------------------------- Title: Authorized Agent KZH ING-2 LLC By: /s/ Susan Lee --------------------------------- Title: Authorized Agent KZH RIVERSIDE LLC By: /s/ Susan Lee --------------------------------- Title: Authorized Agent KZH STERLING LLC By: /s/ Susan Lee --------------------------------- Title: Authorized Agent LASALLE BANK NATIONAL ASSOCIATION By: /s/ Brian Peterson --------------------------------- Title: First Vice President MAPLEWOOD (CAYMAN) LTD BY: MASS MUTUAL LIFE INSURANCE CO., AS INVESTMENT MANAGER By: /s/ Steven J. Katz --------------------------------- Title: Second Vice President and Associate General Counsel MASS MUTUAL LIFE INSURANCE COMPANY By: /s/ Steven J. Katz --------------------------------- Title: Second Vice President and Associate General Counsel WILBRAHAM CBO LTD BY: DAVID L. BABSON & CO., INC. AS INVESTMENT MANAGER By: /s/ Kathleen Lynch --------------------------------- Title: Managing Director MASSMUTUAL HIGH YIELD PARTNERS II, LLC BY: HYP MANAGEMENT, INC. By: /s/ Kathleen Lynch --------------------------------- Title: Managing Director MERRILL LYNCH GLOBAL INVESTMENT SERIES: INCOME STRATEGIES PORTFOLIO BY: MERRILL LYNCH INVESTMENT MANAGERS, L.P. AS INVESTMENT ADVISOR By: /s/ Anthony Heyman --------------------------------- Title: Authorized Signatory MERRILL LYNCH SENIOR FLOATING RATE FUND, INC. By: /s/ Anthony Heyman --------------------------------- Title: Authorized Signatory PILGRIM AMERICA HIGH INCOME INVESTMENTS INC. LTD. BY: ING PILGRIM INVESTMENTS LLC AS INVESTMENT MANAGER By: /s/ Jason Groom --------------------------------- Title: Vice President MORGAN STANLEY PRIME INCOME TRUST By: /s/ Shelia A. Finnerty --------------------------------- Title: Executive Director PILGRIM CLO 1999-LTD. BY: ING PILGRIM INVESTMENTS LLC AS INVESTMENT MANAGER By: /s/ Jason Groom --------------------------------- Title: Vice President ML CLO XII PIGRIM AMERICA (CAYMAN) LTD. BY: ING PILGRIM INVESTMENTS LLC AS INVESTMENT MANAGER By: /s/ Jason Groom --------------------------------- Title: Vice President ML CLO XX PILGRIM AMERICA (CAYMAN) LTD. BY: ING PILGRIM INVESTMENTS LLC AS INVESTMENT MANAGER By: /s/ Jason Groom --------------------------------- Title: Vice President PILGRIM PRIME RATE TRUST BY: ING PILGRIM INVESTMENTS LLC AS INVESTMENT MANAGER By: /s/ Jason Groom --------------------------------- Title: Vice President LIBERTY-STEIN ROE ADVISOR FLOATING RATE ADVANTAGE FUND. BY: STEIN ROE & FARNHAM INCORPORATED, AS ADVISOR By: /s/ James R. Fellows --------------------------------- Title: Senior Vice President STEIN ROE FLOATING RATE LIMITED LIABILITY COMPANY By: /s/ James R. Fellows --------------------------------- Title: Senior Vice President STEIN ROE & FARNHAM CLO I LTD., BY: STEIN ROE & FARNHAM INCORPORATED, AS PORTFOLIO MANAGER By: /s/ James R. Fellows --------------------------------- Title: Senior Vice President COLUMBUS LOAN FUNDING LTD. BY: TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY, LLC By: /s/ John Petchler --------------------------------- Title: Vice President THE TRAVELERS INSURANCE COMPANY By: /s/ John Petchler --------------------------------- Title: Vice President TRAVELERS CORPORATE LOAN FUND INC. BY: TRAVELERS ASSET MANAGEMENT INTERNATIONAL COMPANY, LLC By: /s/ John Petchler --------------------------------- Title: Vice President VAN KAMPEN SENIOR INCOME TRUST BY: VAN KAMPEN INVESTMENT ADVISORY CORP. By: /s/ Darvin D. Pierce --------------------------------- Title: Executive Director VAN KAMPEN PRIME RATE INCOME TRUST BY: VAN KAMPEN INVESTMENT ADVISORY CORP. By: /s/ Darvin D. Pierce --------------------------------- Title: Executive Director VAN KAMPEN SENIOR FLATING RATE FUND BY: VAN KAMPEN INVESTMENT ADVISORY CORP. By: /s/ Darvin D. Pierce --------------------------------- Title: Executive Director WACHOVIA BANK, N.A. By: /s/ Catherine A. Cowan --------------------------------- Title: Vice President WELLS FARGO BANK, N.A. By: /s/ --------------------------------- Title: Vice President SZUDDER FLOATING RATE FUND By: /s/ Kenneth Weber --------------------------------- Title: Senior Vice President