-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VSu8DSmR9LPZOu0sdNWdJgqRjkmKkIIP76IGK6Jn3t5pcNBrkA6uhWquOw1rSiir n/GlA1s4Bz5KdTa68MT1nQ== /in/edgar/work/20000811/0001027574-00-500007/0001027574-00-500007.txt : 20000921 0001027574-00-500007.hdr.sgml : 20000921 ACCESSION NUMBER: 0001027574-00-500007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000811 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OUTSOURCING SOLUTIONS INC CENTRAL INDEX KEY: 0001027574 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 582197161 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867 FILM NUMBER: 692746 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSI SUPPORT SERVICES INC CENTRAL INDEX KEY: 0000076741 STANDARD INDUSTRIAL CLASSIFICATION: [7320 ] IRS NUMBER: 391133219 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-05589 FILM NUMBER: 692747 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: PAYCO AMERICAN CORP DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION CORP CENTRAL INDEX KEY: 0000100817 STANDARD INDUSTRIAL CLASSIFICATION: [7320 ] IRS NUMBER: 250848970 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 002-27974 FILM NUMBER: 692748 BUSINESS ADDRESS: STREET 1: C/O OUTSOURCING SOLUTIONS STREET 2: 390 SOUTH WOOD MILL ROAD STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: C/O OUTSOURCING SOLUTIONS STREET 2: 390 SOUTH WOODS MILL RD STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: SUPER ELECTRIC PRODUCTS INC DATE OF NAME CHANGE: 19661121 FORMER COMPANY: FORMER CONFORMED NAME: UNION SPRING & MANUFACTURING CO DATE OF NAME CHANGE: 19660921 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSI COLLECTION SERVICES INC CENTRAL INDEX KEY: 0001029315 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 391314048 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-12 FILM NUMBER: 692749 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: PAYCO GENERAL AMERICAN CREDITS INC DATE OF NAME CHANGE: 19961219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIVERSITY ACCOUNTING SERVICE INC CENTRAL INDEX KEY: 0001029318 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 391357406 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-14 FILM NUMBER: 692750 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASSET RECOVERY & MANAGEMENT CORP CENTRAL INDEX KEY: 0001029319 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 391357406 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-15 FILM NUMBER: 692751 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INDIANA MUTUAL CREDIT ASSOCIATION INC CENTRAL INDEX KEY: 0001029320 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 391357406 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-16 FILM NUMBER: 692752 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRABLE GREINER & WOLFF INC CENTRAL INDEX KEY: 0001029386 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 391758997 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-17 FILM NUMBER: 692753 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: FURST & FURST INC DATE OF NAME CHANGE: 19961219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JENNIFER LOOMIS & ASSOCIATES INC CENTRAL INDEX KEY: 0001029387 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 953850888 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-18 FILM NUMBER: 692754 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QUALINK INC CENTRAL INDEX KEY: 0001029389 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 953850888 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-20 FILM NUMBER: 692755 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROFESSIONAL RECOVERIES INC CENTRAL INDEX KEY: 0001029390 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 953850888 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-21 FILM NUMBER: 692756 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PAYCO AMERICAN INTERNATIONAL CORP CENTRAL INDEX KEY: 0001029391 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 953850888 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-22 FILM NUMBER: 692757 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSI PORTFOLIO SERVICES INC CENTRAL INDEX KEY: 0001029715 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 510369044 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-07 FILM NUMBER: 692758 BUSINESS ADDRESS: STREET 1: 3300 NORTHEAST EXPRESSWAY STREET 2: BUILDING 1 STE M CITY: ATLANTA STATE: GA ZIP: 30341 BUSINESS PHONE: 7704514862 MAIL ADDRESS: STREET 1: 3300 NORTHEAST EXPRESSWAY STREET 2: BUILDING 1 STE M CITY: ATLANTA STATE: GA ZIP: 30341 FORMER COMPANY: FORMER CONFORMED NAME: ACCOUNT PORTFOLIOS INC /NEW DATE OF NAME CHANGE: 19990816 FORMER COMPANY: FORMER CONFORMED NAME: ACCOUNT PORTFOLIOS GP INC DATE OF NAME CHANGE: 19961227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OSI OUTSOURCING SERVICES INC CENTRAL INDEX KEY: 0001058624 STANDARD INDUSTRIAL CLASSIFICATION: [8741 ] IRS NUMBER: 133861550 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-29 FILM NUMBER: 692759 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FORMER COMPANY: FORMER CONFORMED NAME: INTERACTIVE PERFORMANCE INC DATE OF NAME CHANGE: 19980326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRANSWORLD SYSTEMS INC CENTRAL INDEX KEY: 0001058626 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 941728881 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-31 FILM NUMBER: 692760 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UCO PROPERTIES INC CENTRAL INDEX KEY: 0001058627 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 941728881 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-32 FILM NUMBER: 692761 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION FINANCIAL SERVICES GROUP INC CENTRAL INDEX KEY: 0001058628 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 222630947 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-33 FILM NUMBER: 692762 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN RECOVERY CO INC CENTRAL INDEX KEY: 0001058629 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 520937211 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-34 FILM NUMBER: 692763 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSN CORP CENTRAL INDEX KEY: 0001058630 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 251319485 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-35 FILM NUMBER: 692764 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENAD CONNECTOR CORP CENTRAL INDEX KEY: 0001058631 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 042428227 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-36 FILM NUMBER: 692765 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UCO MBA CORP CENTRAL INDEX KEY: 0001058632 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 231704744 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-16867-37 FILM NUMBER: 692766 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION SPECIAL STEEL CASTING CORP CENTRAL INDEX KEY: 0001058633 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 251154811 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-15867-38 FILM NUMBER: 692767 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTH SHORE AGENCY INC CENTRAL INDEX KEY: 0001067125 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 113399772 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-15867-42 FILM NUMBER: 692768 BUSINESS ADDRESS: STREET 1: 390 SOUTH WOODS MILL RD STREET 2: STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 BUSINESS PHONE: 3145760022 MAIL ADDRESS: STREET 1: C/O OUTSOURCING SOLUTIONS INC STREET 2: 390 SOUTH WOODS MILL RD STE 350 CITY: CHESTERFIELD STATE: MO ZIP: 63017 10-Q 1 0001.txt OUTSOURCING SOLUTIONS INC. 2000-2ND QUARTER 10Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 ------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ---------------- ------------------ Commission File Number 333-16867 ------------------- Outsourcing Solutions Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 58-2197161 - ------------------------------------ --------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 390 South Woods Mill Road, Suite 350 Chesterfield, Missouri 63017 - ------------------------------------ ------------------------------------ (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (314) 576-0022 Indicate by checkmark whether the registrant: (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Outstanding at Class June 30, 2000 - --------------------------------- ------------- Voting common stock 6,024,428.07 Non-voting common stock 480,321.30 ------------- 6,504,749.37 ============= Transitional Small Disclosure _______ (check one):Yes [ ] No [ X ] -------- ------- PAGE 2 OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES TABLE OF CONTENTS Part I. Financial Information Page Item 1. Financial Statements Condensed Consolidated Balance Sheets June 30, 2000 (unaudited) and December 31, 1999................................. 3 Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2000 (unaudited) and 1999 (unaudited).................................. 4 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2000 (unaudited )and 1999 (unaudited).................................................. 5 Notes to Condensed Consolidated Financial Statements (unaudited)....................................................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................... 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk........ 11 Part II. Other Information................................................... 12 PAGE 3 OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) - -------------------------------------------------------------------------------- June 30, December 31, 2000 1999 Unaudited Audited ------------ ------------ ASSETS Cash and cash equivalents $ 10,601 $ 6,059 Cash and cash equivalents held for clients 26,167 22,521 Accounts receivable - trade, less allowance for 55,864 52,082 doubtful receivables of $559 and $529 Purchased loans and accounts receivable portfolios 30,490 39,947 Property and equipment, net 44,491 43,647 Intangible assets, net 404,099 410,471 Deferred financing costs, less accumulated 25,017 27,224 amortization of $2,456 and $248 Other assets 27,401 22,761 -------- -------- TOTAL $ 624,130 $ 624,712 ======== ======== LIABILITIES AND STOCKHOLDERS' DEFICIT Accounts payable - trade $ 8,979 $ 6,801 Collections due to clients 26,167 22,521 Accrued salaries, wages and benefits 12,981 17,009 Debt 525,602 518,307 Other liabilities 66,834 68,306 Commitments and contingencies - - Mandatorily redeemable preferred stock; redemption 94,323 85,716 amount of $115,243 and $107,877 Stockholders' deficit: Voting common stock; $.01 par value; authorized 15,000,000 shares, 9,102,677.14 shares issued 91 90 Non-voting common stock; $.01 par value; authorized 2,000,000 shares, 480,321.30 issued and outstanding 5 5 Paid-in capital 198,138 196,339 Retained deficit (172,715) (155,525) -------- -------- 25,519 40,909 Notes receivable from management for shares sold (1,418) - Common stock in treasury, at cost; 3,078,249.07 shares (134,857) (134,857) -------- -------- Total stockholders' deficit (110,756) (93,948) -------- -------- TOTAL $ 624,130 $ 624,712 ======== ======== The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. PAGE 4 OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands) Three Months Six Months Ended June 30, Ended June 30, ------------------ ------------------ 2000 1999 2000 1999 REVENUES $ 137,373 $ 127,829 $ 270,623 $ 257,076 EXPENSES: Salaries and benefits 66,411 61,427 132,417 22,162 Service fees and other operating 43,414 39,482 85,011 79,894 and administrative expenses Amortization of purchased loans and accounts receivable portfolios 8,109 9,177 14,785 20,477 Amortization of goodwill and other intangibles 3,979 4,102 7,949 8,204 Depreciation expense 4,098 3,614 8,111 7,225 Nonrecurring realignment and relocation expenses 1,000 - 1,000 - Compensation expense related to redemption of stock options 187 - 187 - -------- -------- -------- -------- Total expenses 127,198 117,802 249,460 237,962 -------- -------- -------- -------- OPERATING INCOME 10,175 10,027 21,163 19,114 OTHER EXPENSE - - - 76 INTEREST EXPENSE - Net 15,209 12,644 29,452 25,209 -------- -------- -------- -------- LOSS BEFORE INCOME TAXES (5,034) (2,617) (8,289) (6,171) PROVISION FOR INCOME TAXES 169 375 294 375 -------- -------- -------- -------- NET LOSS (5,203) (2,992) (8,583) (6,546) PREFERRED STOCK DIVIDEND REQUIREMENTS AND ACCRETION OF SENIOR PREFERRED STOCK 4,364 - 8,607 506 -------- -------- -------- -------- NET LOSS TO COMMON STOCKHOLDERS $ (9,567)$ (2,992)$ (17,190)$ (7,052) ======== ======== ======== ======== The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. PAGE 5 OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Six Months Ended June 30, -------------------- 2000 1999 OPERATING ACTIVITIES AND PORTFOLIO PURCHASING: Net loss $ (8,583) $ (6,546) Adjustments to reconcile net loss to net cash from operating activities and portfolio purchasing: Depreciation and amortization 18,268 16,943 Amortization of purchased loans and accounts 14,785 20,477 receivable portfolios Change in assets and liabilities: Purchases of loans and accounts receivable portfolios (5,328) (4,088) Accounts receivable and other assets (8,242) (4,978) Accounts payable, accrued expenses and other liabilities (3,322) (8,378) ------- ------- Net cash from operating activities and portfolio purchasing 7,578 13,430 ------- ------- INVESTING ACTIVITIES: Acquisition of property and equipment (8,955) (7,260) Purchases of loans and accounts receivable portfolios for resale to FINCO (54,306) (29,324) Sales of loans and accounts receivable portfolios to FINCO 54,306 29,324 Other (1,577) (559) ------- ------- Net cash from investing activities (10,532) (7,819) ------- ------- FINANCING ACTIVITIES: Borrowings under revolving credit agreement 174,650 134,250 Repayments under revolving credit agreement (165,650) (133,050) Repayments of debt (1,705) (8,488) Proceeds from issuance of common stock 201 - Deferred financing fees - (248) ------- ------- Net cash from financing activitie 7,496 (7,536) ------- ------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4,542 (1,925) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,059 8,814 ------- ------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,601 $ 6,889 ======= ======= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during period for interest $ 27,621 $ 23,927 ======= ======= Net cash paid (received) during period for taxes $ 181 $ (39) ======= ======= SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION: Paid preferred stock dividends through issuance of preferred stock $ - $ 992 ======= ======= Accrued dividends on mandatorily redeemable preferred stock $ 7,366 $ - ======= ======= Accretion of mandatorily redeemable preferred stock $ 1,241 $ - ======= ======= Notes receivable for common stock $ 1,400 $ - ======= ======= The accompanying notes are an integral part of the unaudited condensed consolidated financial statements. OUTSOURCING SOLUTIONS INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (In thousands) NOTE 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2000 are not necessarily indicative of the results that may be expected for the year ended December 31, 2000. For purposes of comparability, certain prior year amounts have been reclassified to conform to current quarter presentation. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto contained in the Company's Form 10-K for the year ended December 31, 1999. Comprehensive loss for the periods presented is equal to the Company's net loss as the Company had no other comprehensive income (loss) items. NOTE 2. LITIGATION From time to time, the Company and certain of its subsidiaries are subject to various investigations, claims and legal proceedings covering a wide range of matters that arise in the normal course of business and are routine to the nature of the Company's businesses. In addition, as a result of the acquisition of The Union Corporation, certain subsidiaries of the Company are a party to several on-going environmental remediation investigations by federal and state governmental agencies and clean-ups and, along with other companies, has been named a "potentially responsible party" for certain waste disposal sites. While the results of litigation cannot be predicted with certainty, the Company has provided for the estimated uninsured amounts and costs to resolve the pending suits and management, in consultation with legal counsel, believes that reserves established for the ultimate resolution of pending matters are adequate at June 30, 2000. NOTE 3. PURCHASED LOANS AND ACCOUNTS RECEIVABLE PORTFOLIOS FINANCING OSI Funding LLC ("FINCO") is a special-purpose finance company with the Company owning approximately 78% of the financial interest but having only approximately 29% of the voting rights. The following summarizes the transactions between the Company and FINCO for the periods ended June 30: Three Months Six Months Ended June 30, Ended June 30, ---------------- ----------------- 2000 1999 2000 1999 Sales of purchased loans and accounts receivable portfolios by the Company to FINCO $37,782 $11,666 $54,306 $29,324 Servicing fees paid by FINCO to $5,032 $4,002 $9,337 $5,845 the Company Sales of purchased loans and accounts receivable portfolios ("Receivables") by the Company to FINCO were in the same amount and occurred shortly after such portfolios were acquired by the Company from the various unrelated sellers. In conjunction with sales of Receivables to FINCO and the servicing agreement, the Company recorded servicing assets which are being amortized over the servicing agreement. The carrying value of such servicing assets is $2,450 at June 30, 2000 and was $1,300 at December 31, 1999. At June 30, 2000 and December 31, 1999, FINCO had unamortized Receivables of $77,548 and $42,967, respectively. At June 30, 2000 and December 31, 1999, FINCO had outstanding borrowings of $64,766 and $32,051, respectively, under its revolving warehouse financing arrangement. NOTE 4: STOCKHOLDERS' DEFICIT In the quarter ended June 30, 2000, the Company issued 40,032.03 shares of its voting common stock at prices approximating fair value to certain members of senior management in exchange for cash and interest bearing notes secured by the shares along with certain personal assets of the members of senior management. The outstanding principal balances plus accrued interest of these notes amounted to $1,418 at June 30, 2000 and are classified as a reduction of stockholders' deficit. In addition, the Company sold 8,007 shares of its voting common stock at prices approximating fair value to certain directors of the Company. NOTE 5: NONRECURRING EXPENSES In continuing the adopted strategy to align the Company along business services and establish call centers of excellence, the Company incurred $1,000 of nonrecurring realignment and relocation expenses in the three months ended June 30, 2000. These expenses include costs resulting from closure of certain call centers, severance associated with these office closures and certain other one-time costs. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999 - ----------------------------------------------------------------------------- Revenues for the three months ended June 30, 2000 were $137.4 million compared to $127.8 million in the same period last year - an increase of 7.5%. The revenue increase of $9.6 million was due to increased collection, outsourcing and portfolio services revenues. Revenues from collection services were $95.7 million for the three months ended June 30, 2000 compared to $93.0 million in the comparable period in 1999. The increase in collection services revenue was primarily attributable to increased government and letter series business. Partially offsetting this increase, however, was a continued weakness in the bankcard market, primarily driven by changes in the portfolio sales market. The outsourcing services revenue of $18.1 million compared favorably to $14.5 million in 1999 due to increased revenue from new and existing business. Revenues from portfolio services increased 16.3% to $23.6 million for the three months ended June 30, 2000 from $20.3 million for the comparable period in 1999. The increased revenue was due to higher servicing fee revenues for the off-balance sheet collections of FINCO portfolios and higher strategic sales of portfolios partially offset by lower revenues from on-balance sheet portfolios resulting in the shift from on-balance sheet ownership of purchased loans and accounts receivable portfolios to off-balance sheet. During the three months ended June 30, 2000, the Company recorded revenue from FINCO servicing fees of $5.0 million on total collections of $14.3 million compared to servicing fees of $4.0 million on total collections of $10.0 million for the three months ended June 30, 1999. Operating expenses, inclusive of salaries and benefits, service fees and other operating and administrative expenses, were $109.8 million for the three months ended June 30, 2000 and $100.9 million for the comparable period in 1999 - an increase of 8.8%. The increase in these operating expenses resulted primarily from higher collection-related expenses associated with the increased revenues of collection and outsourcing services and increased collection expenses associated with collections of on and off-balance sheet purchased portfolios partially offset by lower consulting expenses. For the three months ended June 30, 2000, amortization and depreciation charges of $16.2 million were lower than the $16.9 million for the comparable period in 1999 by $0.7 million. The lower amortization and depreciation charges resulted primarily from lower portfolio amortization as a result of the shift towards off-balance sheet purchased loans and accounts receivable portfolios. In continuing with the strategy to align the Company along business services and establish call centers of excellence by industry specialization adopted in early 1999, the Company incurred nonrecurring realignment and relocation expenses of $1.0 million which includes costs for closure of certain call centers, severance associated with these office closures and certain other one-time costs. These costs were recognized as incurred in 2000. In the three months ended June 30, 2000, the Company incurred approximately $0.2 million of additional compensation expense resulting from the redemption of vested stock options. Earnings before interest expense, taxes, depreciation and amortization (EBITDA) for the three months ended June 30, 2000 was $26.4 million. Adding back the nonrecurring charges and the additional compensation expense, EBITDA of $27.5 million for the three months ended June 30, 2000 compared favorably to $26.9 million for the same period in 1999. Operating income of $10.2 million for the three months ended June 30, 2000 compared favorably to last year's operating income of $10.0 million for the same period. Adding back the nonrecurring charges of $1.0 million and the additional compensation expense of approximately $0.2 million, operating income was $11.4 million for the three months ended June 30, 2000 compared to $10.0 million for the same period in 1999 - an increase of 14%. The shift to off-balance sheet ownership of portfolios has negatively impacted EBITDA as revenue is recognized for off-balance sheet portfolios when servicing fees (a certain percentage of collections) are earned whereas for on-balance sheet portfolios the Company recognizes revenue when collections are received. Nevertheless, operating income has been positively impacted by lower amortization as the Company amortizes only on-balance sheet portfolios, which have become smaller. Net interest expense for the three months ended June 30, 2000 was $15.2 million compared to $12.6 million for the comparable period in 1999. The increase was due primarily to higher interest rates and higher amortization of deferred financing fees. The provision for income taxes of $0.2 million was provided for state and foreign income tax obligations, which the Company cannot offset currently by net operating losses. Due to the factors stated above, the net loss for the three months ended June 30, 2000 of $5.2 million compared unfavorably to the net loss of $3.0 million for the three months ended June 30, 1999. Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999 - ------------------------------------------------------------------------- Revenues for the six months ended June 30, 2000 were $270.6 million compared to $257.1 million in the same period last year - an increase of 5.3%. The revenue increase of $13.5 million was due to increased collection, outsourcing and portfolio services revenues. Revenues from collection services were $192.4 million for the six months ended June 30, 2000 compared to $186.8 million in the comparable period in 1999 due primarily to increased governement and letter series business. Partially offsetting this increase, however, was a continued weakness in the bankcard market, primarily driven by changes in the portfolio sales market. The outsourcing services revenue of $35.0 million compared favorably to $28.4 million in 1999 due to increased revenue from new and existing business. Revenues from portfolio services increased to $43.2 million for the six months ended June 30, 2000 from $41.9 million for the comparable period in 1999. The increased revenues was due to higher servicing fee revenues for the off-balance sheet collections of FINCO portfolios and higher strategic sales of portfolios partially offset by lower revenues from on-balance sheet portfolios resulting in the shift from on-balance sheet ownership of purchase loans and accounts receivable portfolios to off-balance sheet. During the six months ended June 30, 2000, the Company recorded revenue from FINCO servicing fees of $9.3 million on total collections of $26.2 million compared to servicing fees of $5.8 million on total collections of $14.7 million for the six months ended June 30, 1999. Operating expenses, inclusive of salaries and benefits, service fees and other operating and administrative expenses, were $217.4 million for the six months ended June 30, 2000 and $202.1 million for the comparable period in 1999 - an increase of 7.6%. The increase in these operating expenses resulted primarily from higher collection-related expenses associated with the increased revenues of collection and outsourcing services and increased collection expenses associated with the increase in collections of on and off-balance sheet purchased portfolios partially offset by lower consulting expenses. For the six months ended June 30, 2000, amortization and depreciation charges of $30.8 million were lower than $35.9 million for the comparable period in 1999 - a decrease of 14.2%. The lower amortization and depreciation charges resulted primarily from lower portfolio amortization as a result of the shift towards off-balance sheet purchased loans and accounts receivable portfolios. In continuing with the strategy to align the Company along business services and establish call centers of excellence by industry specialization adopted in early 1999, the Company incurred nonrecurring realignment and relocation expenses of $1.0 million which includes costs for closures of certain call centers, severance associated with these office closures and certain other one-time costs. These costs were recognized as incurred in 2000. In the six months ended June 30, 2000, the Company incurred approximately $0.2 million of additional compensation expense resulting from the redemption of vested stock options. Earnings before interest expenses, taxes, depreciation and amortization (EBITDA) for the six months ended June 30, 2000 was $52.0 million. Adding back the nonrecurring charges and the additional compensation expense, EBITDA was $53.2 million for the six months ended June 30, 2000 compared to $55.0 million for the same period in 1999. The decrease of $1.8 million was primarily attributable to the increased collection expenses in relation to the revenue reported from the collections of purchased portfolios partially offset by the contribution from increased collection and outsourcing services revenues and lower consulting expenses. While EBITDA was down slightly due to the off-balance sheet ownership of the portfolios, depreciation and amortization also declined resulting in operating income of $21.2 million. Adding back the nonrecurring charges of $1.0 million and the additional compensation expense of approximately $0.2 million, operating income was $22.4 million for the six months ended June 30, 2000 compared to $19.1 million for the same period in 1999. Net interest expense for the six months ended June 30, 2000 of $29.5 million compared unfavorably to $25.2 million for the same period in 1999 due primarily to higher interest rates and higher amortization of deferred financing fees. The provision for income taxes of $0.3 million was provided for state and foreign income tax obligations, which the Company cannot offset currently by net operating losses. Due to the factors stated above, the net loss for the six months ended June 30, 2000 of $8.6 million compared unfavorably to the net loss of $6.5 million for the six months ended June 30, 1999. Financial Condition, Liquidity and Capital Resources At June 30, 2000, the Company had cash and cash equivalents of $10.6 million. The Company's credit agreement provides for a $75.0 million revolving credit facility, which allows the Company to borrow for working capital, general corporate purposes and acquisitions, subject to certain conditions. As of June 30, 2000, the Company had $22.0 million outstanding under the revolving credit facility leaving $48.8 million, after outstanding letters of credit, available under the revolving credit facility. Since December 31, 1999, cash and cash equivalents increased $4.5 million primarily due to cash from operating activities and portfolio purchasing of $7.6 million and net cash from financing activities of $7.5 million offset by the use of cash of $10.5 million primarily for capital expenditures. The Company also held $26.2 million of cash for clients in restricted trust accounts at June 30, 2000. For the first six months in 2000, the Company made capital expenditures of $9.0 million primarily for the replacement and upgrading of equipment, expansion of facilities and expansion and conversion of the Company's information services systems. The Company anticipates capital spending of approximately $18.0 million during 2000, which the Company intends to fund from cash flow from operations and if necessary, borrowings under the revolving credit facility. See Item 3. "Quantitative and Qualitative Disclosures About Market Risk" for the Company's derivative activities during the quarter ended June 30, 2000. Forward-Looking Statements The following statements in this document are or may constitute forward-looking statements made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995: (1) statements concerning the anticipated costs and outcome of legal proceedings and environmental liabilities, (2) statements regarding the Company's expected capital expenditures, (3) any statements preceded by, followed by or that include the word "believes," "expects," "anticipates," "intends," "should," "may," or similar expressions; and (4) other statements contained or incorporated by reference in this document regarding matters that are not historical facts. Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to: (1) the demand for the Company's services, (2) the demand for accounts receivable management generally, (3) general economic conditions, (4) changes in interest rates, (5) competition, including but not limited to pricing pressures, (6) changes in governmental regulations including, but not limited to the federal Fair Debt Collection Practices Act and comparable state statutes, (7) legal proceedings, (8) environmental investigations and clean up efforts, (9) expected synergies, economies of scale and cost savings from acquisitions by the Company not being fully realized or realized within the expected time frames, (10) costs of operational difficulties related to integrating the operations of acquired companies with the Company's operations being greater than expected, (11) the Company's ability to generate cash flow or obtain financing to fund its operations, service its indebtedness and continue its growth and expand successfully into new markets and services, and (12) factors discussed from time to time in the Company's public filings. These forward-looking statements speak only as of the date they were made. These cautionary statements should be considered in connection with any written or oral forward-looking statements that the Company may issue in the future. The Company does not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect later events or circumstances or to reflect the occurrence of unanticipated events. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is subject to the risk of fluctuating interest rates in the normal course of business. From time to time and as required by the Company's credit agreement, the Company will employ derivative financial instruments as part of its risk management program. The Company's objective is to manage risks and exposures and not to trade such instruments for profit or loss. At December 31, 1999 (the most recent completed fiscal year), the Company had no outstanding interest rate agreements. Pursuant to the Company's credit agreement, the Company was obligated to secure interest rate protection in the nominal amount of $150.0 million by July 2000. In June 2000, the Company entered into interest rate collared swap agreements with several financial institutions for interest rate protection on the $150.0 million. Under the agreements, the Company pays floating three month LIBOR between 5.90% and 8.50% in addition to the applicable margin as set forth in the credit agreement. In the event, however, the three month LIBOR drops below 5.9%, the Company would be required to pay 7.0% plus the applicable margin, until such time the three month LIBOR rises above 5.90%, at which time the rate returns to a variable rate. PART II. OTHER INFORMATION Item 1. Legal Proceedings From time to time, the Company and certain of its subsidiaries are involved in various investigations, claims and legal proceedings covering a wide range of matters that arise in the normal course of business and are routine to the nature of the Company's business. Other information with respect to legal proceedings appears in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. Item 2. Changes in Securities See Note 4 of the Condensed Consolidated Financial Statements included elsewhere herein. Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a). Exhibits Exhibit 10.1 Management Stock Purchase Agreement, Non-recourse Secured Promissory Note and Management Stock Pledge Agreement dated as of April 19, 2000 between the Company and Timothy Beffa. Exhibit 10.2 Management Stock Purchase Agreement, Promissory Note and Management Stock Pledge Agreement dated as of April 19, 2000 between the Company and Gary Weller. Exhibit 10.3 Form of Director Stock Purchase and Option Agreement. Exhibit 10.4 Form of Non-Qualified Stock Option Award Agreement [F] Exhibit 27 Financial Data Schedule (Unaudited) (b). Reports on Form 8-K During the quarter, the following report on Form 8-K was filed: Report on Form 8-K filed June 30, 2000 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OUTSOURCING SOLUTIONS INC. (Registrant) /s/ Timothy G. Beffa ------------------------------------ Timothy G. Beffa President and Chief Executive Officer /s/ Gary L. Weller ------------------------------------ Gary L. Weller Executive Vice President and Chief Financial Officer Date: August 11, 2000 EX-10.1 2 0002.txt MANAGEMENT STOCK PURCHASE AGREEMENT-TIM BEFFA MANAGEMENT STOCK PURCHASE AGREEMENT THIS MANAGEMENT STOCK PURCHASE AGREEMENT, dated as of April 19, 2000 (this "Agreement"), is made by and among Outsourcing Solutions Inc., a Delaware corporation (the "Company"), and Timothy Beffa (the "Purchaser"). Except as otherwise indicated, capitalized terms used herein are defined in Section 5 hereof. The parties hereto agree as follows: Section 1. Purchase and Sale of Voting Common Stock. ---------------------------------------- 1A. Purchase and Sale. Subject to the terms and conditions set forth herein, the Company will sell to the Purchaser, and the Purchaser will purchase from the Company, 26,688.02 shares of Voting Common Stock at a purchase price of $37.47 per share. 1B. The Closing. The closing of the sale and purchase of the Voting Common Stock hereunder (the "Closing") will take place at the offices of Outsourcing Solutions Inc., 390 South Woods Mill Road, Suite 350, Chesterfield, MO 63017. At the Closing, the Company will deliver to the Purchaser a certificate or certificates evidencing the number of shares of Voting Common Stock to be purchased by such Purchaser, registered in the name of such Purchaser against payment of the purchase price therefor by delivery of $500 in cash and a $999,500 Promissory Note dated as of the date hereof. Section 2. Restrictions on Transfers. ------------------------- 2A. Restrictions. Restricted Securities are transferable pursuant to (i) public offerings registered under the Securities Act, (ii) Rule 144 or Rule 144A of the Securities and Exchange Commission (or any similar rule then in force) if such rule is available, and (iii) subject to the conditions specified in paragraph 2B, any other legally available means of transfer pursuant to the Securities Act. Nothing herein shall be deemed to create any obligations on the part of the Company, other than as set forth in the Stockholders Agreement dated December 10, 1999 (the "Stockholders Agreement"), to register any offering of Restricted Securities under the Securities Act or to cause the requirements for sale pursuant to Rule 144 or Rule 144a to be satisfied. 2B. Procedure for Transfer. In connection with the transfer of any Restricted Securities (other than a transfer referred to in clause (i) of paragraph 2A above), the holder thereof will deliver written notice to the Company describing in reasonable detail the transfer or proposed transfer, together with an opinion (reasonably satisfactory to the Company) of Kirkland & Ellis or other counsel which (to the Company's reasonable satisfaction) is knowledgeable in securities law matters to the effect that such transfer of Restricted Securities may be effected without registration of such Restricted Securities under the Securities Act. In addition, if the holder of such Restricted Securities delivers to the Company an opinion (reasonably satisfactory to the Company) of such counsel to the effect that no subsequent transfer of such Restricted Securities will require registration under the Securities Act, the Company will promptly upon such contemplated transfer deliver new certificates for such Restricted Securities which do not bear the Securities Act Legend set forth in paragraph 4A below. If the Company is not required to deliver new certificates for such Restricted Securities not bearing such legend, the holder thereof will not transfer the same until the prospective transferee has confirmed to the Company in writing its agreement to be bound by the conditions contained in this paragraph and paragraph 4A. Section 3. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser that as of the Closing: 3A. Organization, etc. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to carry on its businesses as now conducted and presently proposed to be conducted and to carry out the transactions contemplated by this Agreement. 3B. Authorization; No Breach. The execution, delivery and performance of this Agreement and all other agreements and transactions contemplated hereby and thereby have been duly authorized by the Company. This Agreement constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject to the availability of equitable remedies and to the laws of bankruptcy and other similar laws affecting creditors' rights generally. The execution and delivery by the Company of this Agreement and all other agreements and instruments contemplated hereby and thereby to be executed by the Company, and the offering, sale and issuance of the Voting Common Stock hereunder, do not and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any lien, security interest, charge or encumbrance upon the Company's capital stock or assets pursuant to, (iv) give any third party the right to accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body (other than in connection with certain state and federal securities laws) or any other third party pursuant to, the Fourth Amended and Restated Certificate of Incorporation or the Bylaws, or any law, statute, rule, regulation, instrument, order, judgment or decree to which the Company is subject or any agreement or instrument to which the Company is a party, or by which its assets are bound. Section 4. Purchasers' Representations and Warranties. ------------------------------------------ 4A. Purchasers' Investment Representations. The Purchaser hereby represents that he is acquiring the Restricted Securities purchased hereunder for his own account with the present intention of holding such securities for investment purposes and that he has no intention of selling such securities in a public distribution in violation of federal or state securities laws; provided that nothing contained herein will prevent the Purchaser and the subsequent holders of such securities from transferring such securities in compliance with the provisions of Section 2 hereof. Each certificate for Restricted Securities will be conspicuously imprinted with a legend substantially in the following form (the "Securities Act Legend"): "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON APRIL 19, 2000, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE TRANSFER OF SUCH SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN (A) THE MANAGEMENT STOCK PURCHASE AGREEMENT DATED AS OF APRIL 19, 2000, BETWEEN THE ISSUER (THE "COMPANY") AND THE ORIGINAL PURCHASER HEREOF AND (B) THE STOCKHOLDERS AGREEMENT DATED AS OF DECEMBER 10, 1999, BETWEEN THE COMPANY AND THE ORIGINAL PURCHASER HEREOF, AND THE COMPANY RESERVES THE RIGHT TO REFUSE TO TRANSFER SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. UPON WRITTEN REQUEST, A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF WITHOUT CHARGE." Whenever any shares of Voting Common Stock cease to be Restricted Securities and are not otherwise restricted securities, the holder thereof will be entitled to receive from the Company, without expense, upon surrender to the Company of the certificate representing such shares of Voting Common Stock, a new certificate representing such shares of Voting Common Stock of like tenor but not bearing a legend of the character set forth above. 4B. Other Representations and Warranties of the Purchasers. The Purchaser represents and warrants to and covenants and agrees with, the Company that: (i) the Purchaser has had an opportunity to ask questions and receive answers concerning the terms and conditions of the securities purchased hereunder and has had full access to such other information concerning the Company as the Purchaser may have requested and that in making its decision to invest in the securities being purchased hereunder it is not in any way relying on the fact that any other person has decided to invest in the securities; (ii) the Purchaser (a) is an "accredited investor" as defined in Rule 501(a) under the Securities Act or (b) by reason of its business and financial experience, and the business and financial experience of those retained by it to advise it with respect to its investment in the securities being purchased hereunder, it, together with such advisors, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of its prospective investment in such securities, is able to bear the economic risk of such investment and, at the present time, is able to afford a complete loss of such investment; and (iii) the Purchaser has all requisite power and authority to enter into, deliver and consummate the transactions contemplated by this Agreement (including the purchase of the securities to be purchased by the Purchaser hereunder) and this Agreement has been duly authorized, executed and delivered by the Purchaser and constitutes a valid and binding obligation of the Purchaser enforceable in accordance with its terms (subject to the availability of equitable remedies and to the laws of bankruptcy and other similar laws affecting creditors' rights generally) and, as applicable, does not violate the Purchaser's charter, by-laws or other organizational documents. Section 5. Definitions. ----------- "Bylaws" means the Bylaws of the Company, as such Bylaws may be modified, amended or amended and restated from time to time. "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 or a governmental entity or any department, agency, or political subdivision thereof. "Restricted Securities" means the Voting Common Stock issued hereunder and any securities issued with respect to such Voting Common Stock by way of any stock dividend or stock split, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Restricted Securities, such securities will cease to be Restricted Securities when they have (a) been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, (b) become eligible for sale pursuant to Rule 144 (excluding Rule 144(k)) or Rule 144A of the Securities and Exchange Commission (or any similar rule then in force), or (c) been otherwise transferred and new securities for them not bearing the Securities Act Legend set forth in paragraph 5A have been delivered by the Company in accordance with the second sentence of paragraph 2B. "Rule 144" means Rule 144 promulgated by the Securities and Exchange Commission under the Securities Act as such rule may be amended from time to time, or any similar rule then in force. "Rule 144A" means Rule 144A promulgated by the Securities and Exchange Commission under the Securities Act as such rule may be amended from time to time, or any similar rule then in force. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal law then in force. "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force. "Securities and Exchange Commission" includes any governmental body or agency succeeding to the functions thereof. "Voting Common Stock" means the Company's Voting Common Stock, par value $0.01 per share. Section 6. Miscellaneous. ------------- 6A. Amendments and Waivers. Except as otherwise provided herein, any provision hereof may be amended or waived generally and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Purchaser. No course of dealing between the Company and any holder of Voting Common Stock issued hereunder or any delay on the part of the Company or any such holder in exercising any rights hereunder will operate as a waiver of any rights of the Company or of any such holder. 6B. Survival of Representations and Warranties. All representations and warranties contained herein or made in writing by any party in connection herewith will survive the execution and delivery of this Agreement, regardless of any investigation made by the Company or the Purchaser or on its behalf. 6C. Successors and Assigns. ---------------------- (i) Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of such parties whether so expressed or not. (ii) If a sale, transfer, assignment or other disposition of any Voting Common Stock is made in accordance with the provisions of this Agreement to any Person and such securities remain Restricted Securities immediately after such disposition, such Person shall, at or prior to the time such securities are acquired, execute a counterpart of this Agreement with such modifications thereto as may be necessary to reflect such acquisition, and such other documents as are necessary to confirm such Person's agreement to become a party to, and to be bound by, all covenants, terms and conditions of this Agreement as theretofore amended. 6D. Severability. Whenever possible, each provision of this Agreement will 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 under any applicable law or rule in any jurisdiction, such provision will be ineffective only to the extent of such invalidity, illegality or unenforceability in such jurisdiction, without invalidating the remainder of this Agreement in such jurisdiction or any provision hereof in any other jurisdiction. 6E. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. 6F. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 6G. Governing Law. All issues concerning the enforceability, validity and binding effect of this Agreement 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 provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of New York. 6H. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and shall be delivered personally or by telex or telecopy as described below or by reputable over night courier, and shall be deemed given on the date on which such delivery is made. If delivered by telex or telecopy such notices or communications shall be confirmed by a registered or certified letter (return receipt requested), postage prepaid. * * * * * IN WITNESS WHEREOF, the parties hereto have executed this Management Stock Purchase Agreement as of the date first written above. OUTSOURCING SOLUTIONS, INC. By: /s/ Eric R. Fencl ----------------------------------------------- Its: Senior Vice President, General Counsel and Secretary /s/ Timothy G. Beffa -------------------------------------------------- Timothy Beffa $999,500 April 19, 2000 NON-RECOURSE SECURED PROMISSORY NOTE FOR VALUE RECEIVED, Timothy Beffa ("Maker"), hereby promises to pay to the order of Outsourcing Solutions Inc., a Delaware corporation ("Payee"), at such place as Payee shall designate to Maker from time to time in writing, the principal sum of $999,500.00, on the terms and conditions set forth herein. This Promissory Note shall bear interest (computed on the basis of a 360-day year, counting the number of actual days elapsed) on the principal balance outstanding from time to time from the date hereof at the rate of 6.71% percent per annum. The principal balance of this Promissory Note and all accrued and unpaid interest shall be paid on the seventh anniversary of the date hereof. Maker may prepay all or any portion of the outstanding principal amount of this Promissory Note, together with the full amount of any accrued interest on this Promissory Note through the date of prepayment, at any time without penalty or premium. Notwithstanding the foregoing: (a) The Payee may declare all or any portion of the outstanding principal amount of this Note (together with all accrued interest hereon and all other amounts due in connection herewith) immediately due and payable and may demand immediate payment thereof upon the termination of Maker's employment with Payee for any reason other than Maker's death, disability, or termination by the Payee without cause (as defined in the Amended and Restated Employment Agreement, dated as of June 4, 1999, by and between Payee and Maker); and (b) Immediately upon receipt by Maker of proceeds of any sale of Pledged Shares (as defined in the Management Stock Pledge Agreement, dated as of the date hereof, between Payee and Maker), Maker shall prepay this Note in an amount equal to such proceeds, with any such prepayment being applied first to any accrued and unpaid interest on the Note. Without affecting the liability of any maker, endorser, surety or guarantor, Payee may, without notice, grant renewals or extensions, accept partial payments, or agree not to sue any party liable on this Promissory Note. Whenever possible, each provision of this Promissory Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Promissory Note shall be prohibited by or invalid under such law, such provision shall be severable and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this Promissory Note. In the event Maker fails to pay any amounts due hereunder within 30 days of the date when such amounts are due, Maker shall pay to the holder hereof, in addition to such amounts due, all costs of collection, including reasonable attorneys fees. This Promissory Note shall be binding upon Maker and his successors and assigns, and shall inure to the benefit of Payee and its successors and assigns. Maker's rights, obligations and interests in and under this Promissory Note may not be assigned, sold, transferred or conveyed without the prior written consent of Payee in its sole discretion. This Promissory Note and the rights of the parties hereunder shall be governed by and construed in accordance with the internal laws of the State of New York. This Note is secured by a pledge of certain shares of Voting Common Stock of Outsourcing Solutions Inc. held by Maker pursuant to that certain Management Stock Pledge Agreement dated as of the date hereof between Payee and Maker. This Note is non-recourse to Maker and is recourse solely to the pledged stock under such Pledge Agreement. * * * * * IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has duly executed and delivered this Promissory Note on the date first set forth above. /s/ Timothy G. Beffa -------------------------------- Timothy Beffa MANAGEMENT STOCK PLEDGE AGREEMENT THIS MANAGEMENT STOCK PLEDGE AGREEMENT is made as of April 19, 2000 between Timothy Beffa ("Pledgor"), and Outsourcing Solutions Inc., a Delaware corporation (the "Company"). The Company and Pledgor are parties to a Management Stock Purchase Agreement dated as of the date hereof, pursuant to which Pledgor purchased shares of the Company's Voting Common Stock, par value $0.01 per share (the "Purchased Shares"). The Company has allowed Pledgor to purchase the Purchased Shares by delivery to the Company of a promissory note (the "Note") in an aggregate principal amount equal to the purchase price of the Purchased Shares. This Pledge Agreement provides the terms and conditions upon which the Note is secured by a pledge to the Company of the Purchased Shares and any other shares of the capital stock of the Company hereafter acquired by Pledgor, including any shares of capital stock acquired upon the exercise of any stock options (collectively with the Purchased Shares, the "Pledged Shares"). NOW, THEREFORE, in consideration of the premises contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Company to accept the Note as payment for the Purchased Shares, Pledgor and the Company hereby agree as follows: 1. Pledge. Pledgor hereby pledges to the Company, and grants to the Company a security interest in, the Pledged Shares as security for the prompt and complete payment when due of the unpaid principal of and interest on the Note and full payment and performance of the obligations and liabilities of Pledgor hereunder. 2. Delivery of Pledged Shares. In the event that the certificates representing the Pledged Shares are at any time delivered to Pledgor, Pledgor shall immediately deliver to the Company the certificates representing the Pledged Shares, together with duly executed forms of assignment sufficient to transfer title thereto to the Company. 3. Voting Rights; Cash Dividends. Notwithstanding anything to the contrary contained herein, during the term of this Pledge Agreement until such time as there exists a default in the payment of principal or interest on the Note or any other default under the Note or hereunder, Pledgor shall be entitled to all voting rights with respect to the Pledged Shares and shall, subject to the terms of the Note, be entitled to receive all cash dividends paid in respect of the Pledged Shares. Upon the occurrence of and during the continuance of any such default, Pledgor shall no longer be able to vote the Pledged Shares and the Company shall retain all such cash dividends payable on the Pledged Shares as additional security hereunder. 4. Stock Dividends; Distributions, etc. If, while this Pledge Agreement is in effect, Pledgor becomes entitled to receive or receives any securities or other property in addition to, in substitution of, or in exchange for any of the Pledged Shares (whether as a distribution in connection with any recapitalization, reorganization or reclassification, a stock dividend or otherwise), Pledgor shall accept such securities or other property on behalf of and for the benefit of the Company as additional security for Pledgor's obligations under the Note and shall promptly deliver such additional security to the Company together with duly executed forms of assignment, and such additional security shall be deemed to be part of the Pledged Shares hereunder. 5. Default. If Pledgor defaults in the payment of the principal or interest under the Note when it becomes due (whether upon demand, acceleration or otherwise) or any other event of default under the Note or this Pledge Agreement occurs (including the bankruptcy or insolvency of Pledgor), and such default is not cured within thirty (30) days, the Company may exercise any and all the rights, powers and remedies of any owner of the Pledged Shares (including the right to vote the shares and receive dividends and distributions with respect to such shares) and shall have and may exercise without demand any and all the rights and remedies granted to a secured party upon default under the Uniform Commercial Code of New York or otherwise available to the Company under applicable law. Without limiting the foregoing, the Company is authorized to sell, assign and deliver at its discretion, from time to time, all or any part of the Pledged Shares at any private sale or public auction, on not less than ten days written notice to Pledgor, at such price or prices as determined in good faith by the Company's Board of Directors and upon such terms as the Company may deem advisable. Pledgor shall have no right to redeem the Pledged Shares after any such sale or assignment. At any such sale or auction, the Company may bid for, and become the purchaser of, the whole or any part of the Pledged Shares offered for sale. In case of any such sale, after deducting the costs, attorneys' fees and other expenses of sale and delivery, the remaining proceeds of such sale shall be applied to the principal of and accrued interest on the Note; provided that after payment in full of the indebtedness evidenced by the Note, the balance of the proceeds of sale then remaining shall be paid to Pledgor and Pledgor shall be entitled to the return of any of the Pledged Shares remaining in the hands of the Company. Pledgor shall not be liable for any deficiency if the remaining proceeds are insufficient to pay the indebtedness under the Note in full (including the fees of any attorneys employed by the Company to collect such deficiency). 6. Costs and Attorneys' Fees. All costs and expenses (including reasonable attorneys' fees) incurred in exercising any right, power or remedy conferred by this Pledge Agreement or in the enforcement thereof, shall become part of the indebtedness secured hereunder and shall be paid by Pledgor or repaid from the proceeds of the sale of the Pledged Shares hereunder. 7. No Other Liens; No Sales or Transfers. Pledgor hereby represents and warrants that he has good and valid title to all of the Pledged Shares, free and clear of all liens, security interests and other encumbrances, other than those imposed by that certain Stockholders Agreement, dated December 10, 1999, between the Company and the stockholders of the Company, and Pledgor hereby covenants that, until such time as all of the outstanding principal of and interest on the Note has been repaid, Pledgor shall not (i) create, incur, assume or suffer to exist any pledge, security interest, encumbrance, lien or charge of any kind against the Pledged Shares or Pledgor's rights as a holder thereof, other than pursuant to this Agreement, or (ii) sell or otherwise transfer any Pledged Shares or any interest therein. 8. Further Assurances. Pledgor agrees that at any time and from time to time upon the written request of the Company, Pledgor shall execute and deliver such further documents (including UCC financing statements) and do such further acts and things as the Company may reasonably request in order to effect the purposes of this Pledge Agreement. 9. Severability. Any provision of this Pledge Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10. No Waiver; Cumulative Remedies. The Company shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder, and no waiver shall be valid unless in writing, signed by the Company, and then only to the extent therein set forth. A waiver by the Company of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Company would otherwise have on any future occasion. No failure to exercise nor any delay in exercising on the part of the Company, any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights or remedies provided by law. 11. Waivers, Amendments; Applicable Law. None of the terms or provisions of this Pledge Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by the parties hereto. This Agreement and all obligations of the Pledgor hereunder shall together with the rights and remedies of the Company hereunder, inure to the benefit of the Company and its successors and assigns. This Pledge Agreement shall be governed by, and be construed and interpreted in accordance with, the laws of the State of New York. * * * * * IN WITNESS WHEREOF, this Management Stock Pledge Agreement has been executed as of the date first above written. OUTSOURCING SOLUTIONS INC. By: /s/ Eric R. Fencl ----------------------------------------- Name: Eric Fencl Its: Senior Vice President, General Counsel and Secretary PLEDGOR: /s/ Timothy G. Beffa -------------------------------------------- Timothy Beffa STOCK POWER FOR VALUE RECEIVED, Timothy Beffa ("Employee"), hereby sells, assigns and transfers unto __________________________, _______ shares of the Voting Common Stock, par value $0.01 per share, of Outsourcing Solutions Inc., a Delaware corporation (the "Corporation"), standing in his/her name on the books of the Corporation represented by certificate no. _____ herewith and do hereby irrevocably constitute and appoint _________________________________ attorney to transfer said stock on the books of the Corporation with full power of substitution in the premises. Dated: ----------------------- /s/ Timothy G. Beffa --------------------------------- Timothy Beffa EX-10.2 3 0003.txt MANAGEMENT STOCK PURCHASE AGREEMENT-GARY WELLER MANAGEMENT STOCK PURCHASE AGREEMENT THIS MANAGEMENT STOCK PURCHASE AGREEMENT, dated as of April 19, 2000 (this "Agreement"), is made by and among Outsourcing Solutions Inc., a Delaware corporation (the "Company") and Gary Weller (the "Purchaser"). Except as otherwise indicated, capitalized terms used herein are defined in Section 5 hereof. The parties hereto agree as follows: Section 1. Purchase and Sale of Voting Common Stock. ---------------------------------------- 1A. Purchase and Sale. Subject to the terms and conditions set forth herein, the Company will sell to the Purchaser, and the Purchaser will purchase from the Company,13,344.01 shares of Voting Common Stock at a purchase price of $37.47 per share. 1B. The Closing. The closing of the sale and purchase of the Voting Common Stock hereunder (the "Closing") will take place at the offices of Outsourcing Solutions Inc., 390 South Woods Mill Road, Suite 350, Chesterfield, MO 63017. At the Closing, the Company will deliver to the Purchaser a certificate or certificates evidencing the number of shares of Voting Common Stock to be purchased by such Purchaser, registered in the name of such Purchaser against payment of the purchase price therefor by delivery of (i) $100,000 by means of a cashier's or certified check or checks of immediately available funds or by wire transfer of immediately available funds to a bank account designated by the Company and (ii) a $400,000 Promissory Note dated as of the date hereof. Section 2. Restrictions on Transfers. ------------------------- 2A. Restrictions.Restricted Securities are transferable pursuant to (i) public offerings registered under the Securities Act, (ii) Rule 144 or Rule 144A of the Securities and Exchange Commission (or any similar rule then in force) if such rule is available, and (iii) subject to the conditions specified in paragraph 2B, any other legally available means of transfer pursuant to the Securities Act. Nothing herein shall be deemed to create any obligations on the part of the Company, other than as set forth in the Stockholders Agreement dated December 10, 1999 (the "Stockholders Agreement"), to register any offering of Restricted Securities under the Securities Act or to cause the requirements for sale pursuant to Rule 144 or Rule 144a to be satisfied. 2B. Procedure for Transfer. In connection with the transfer of any Restricted Securities (other than a transfer referred to in clause (i) of paragraph 2A above), the holder thereof will deliver written notice to the Company describing in reasonable detail the transfer or proposed transfer, together with an opinion (reasonably satisfactory to the Company) of Kirkland & Ellis or other counsel which (to the Company's reasonable satisfaction) is knowledgeable in securities law matters to the effect that such transfer of Restricted Securities may be effected without registration of such Restricted Securities under the Securities Act. In addition, if the holder of such Restricted Securities delivers to the Company an opinion (reasonably satisfactory to the Company) of such counsel to the effect that no subsequent transfer of such Restricted Securities will require registration under the Securities Act, the Company will promptly upon such contemplated transfer deliver new certificates for such Restricted Securities which do not bear the Securities Act Legend set forth in paragraph 4A below. If the Company is not required to deliver new certificates for such Restricted Securities not bearing such legend, the holder thereof will not transfer the same until the prospective transferee has confirmed to the Company in writing its agreement to be bound by the conditions contained in this paragraph and paragraph 4A. Section 3. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser that as of the Closing: 3A. Organization, etc. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority to carry on its businesses as now conducted and presently proposed to be conducted and to carry out the transactions contemplated by this Agreement. 3B. Authorization; No Breach. The execution, delivery and performance of this Agreement and all other agreements and transactions contemplated hereby and thereby have been duly authorized by the Company. This Agreement constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject to the availability of equitable remedies and to the laws of bankruptcy and other similar laws affecting creditors' rights generally. The execution and delivery by the Company of this Agreement and all other agreements and instruments contemplated hereby and thereby to be executed by the Company, and the offering, sale and issuance of the Voting Common Stock hereunder, do not and will not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any lien, security interest, charge or encumbrance upon the Company's capital stock or assets pursuant to, (iv) give any third party the right to accelerate any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or other action by or notice to or filing with any court or administrative or governmental body (other than in connection with certain state and federal securities laws) or any other third party pursuant to, the Fourth Amended and Restated Certificate of Incorporation or the Bylaws, or any law, statute, rule, regulation, instrument, order, judgment or decree to which the Company is subject or any agreement or instrument to which the Company is a party, or by which its assets are bound. Section 4. Purchasers' Representations and Warranties. ------------------------------------------ 4A. Purchasers' Investment Representations. The Purchaser hereby represents that he is acquiring the Restricted Securities purchased hereunder for his own account with the present intention of holding such securities for investment purposes and that he has no intention of selling such securities in a public distribution in violation of federal or state securities laws; provided that nothing contained herein will prevent the Purchaser and the subsequent holders of such securities from transferring such securities in compliance with the provisions of Section 2 hereof. Each certificate for Restricted Securities will be conspicuously imprinted with a legend substantially in the following form (the "Securities Act Legend"): "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON APRIL 19, 2000, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE TRANSFER OF SUCH SECURITIES IS SUBJECT TO THE CONDITIONS SPECIFIED IN (A) THE MANAGEMENT STOCK PURCHASE AGREEMENT DATED AS OF APRIL 19, 2000, BETWEEN THE ISSUER (THE "COMPANY") AND THE ORIGINAL PURCHASER HEREOF AND (B) THE STOCKHOLDERS AGREEMENT DATED AS OF DECEMBER 10, 1999, BETWEEN THE COMPANY AND THE ORIGINAL PURCHASER HEREOF, AND THE COMPANY RESERVES THE RIGHT TO REFUSE TO TRANSFER SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. UPON WRITTEN REQUEST, A COPY OF SUCH CONDITIONS WILL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF WITHOUT CHARGE." Whenever any shares of Voting Common Stock cease to be Restricted Securities and are not otherwise restricted securities, the holder thereof will be entitled to receive from the Company, without expense, upon surrender to the Company of the certificate representing such shares of Voting Common Stock, a new certificate representing such shares of Voting Common Stock of like tenor but not bearing a legend of the character set forth above. 4B. Other Representations and Warranties of the Purchasers. The Purchaser represents and warrants to and covenants and agrees with, the Company that: (i) the Purchaser has had an opportunity to ask questions and receive answers concerning the terms and conditions of the securities purchased hereunder and has had full access to such other information concerning the Company as the Purchaser may have requested and that in making its decision to invest in the securities being purchased hereunder it is not in any way relying on the fact that any other person has decided to invest in the securities; (ii) the Purchaser (a) is an "accredited investor" as defined in Rule 501(a) under the Securities Act or (b) by reason of its business and financial experience, and the business and financial experience of those retained by it to advise it with respect to its investment in the securities being purchased hereunder, it, together with such advisors, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of its prospective investment in such securities, is able to bear the economic risk of such investment and, at the present time, is able to afford a complete loss of such investment; and (iii) the Purchaser has all requisite power and authority to enter into, deliver and consummate the transactions contemplated by this Agreement (including the purchase of the securities to be purchased by the Purchaser hereunder) and this Agreement has been duly authorized, executed and delivered by the Purchaser and constitutes a valid and binding obligation of the Purchaser enforceable in accordance with its terms (subject to the availability of equitable remedies and to the laws of bankruptcy and other similar laws affecting creditors' rights generally) and, as applicable, does not violate the Purchaser's charter, by-laws or other organizational documents. Section 5. Definitions. ----------- "Bylaws" means the Bylaws of the Company, as such Bylaws may be modified, amended or amended and restated from time to time. "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 or a governmental entity or any department, agency, or political subdivision thereof. "Restricted Securities" means the Voting Common Stock issued hereunder and any securities issued with respect to such Voting Common Stock by way of any stock dividend or stock split, or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. As to any particular Restricted Securities, such securities will cease to be Restricted Securities when they have (a) been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, (b) become eligible for sale pursuant to Rule 144 (excluding Rule 144(k)) or Rule 144A of the Securities and Exchange Commission (or any similar rule then in force), or (c) been otherwise transferred and new securities for them not bearing the Securities Act Legend set forth in paragraph 5A have been delivered by the Company in accordance with the second sentence of paragraph 2B. "Rule 144" means Rule 144 promulgated by the Securities and Exchange Commission under the Securities Act as such rule may be amended from time to time, or any similar rule then in force. "Rule 144A" means Rule 144A promulgated by the Securities and Exchange Commission under the Securities Act as such rule may be amended from time to time, or any similar rule then in force. "Securities Act" means the Securities Act of 1933, as amended, or any similar federal law then in force. "Securities Exchange Act" means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force. "Securities and Exchange Commission" includes any governmental body or agency succeeding to the functions thereof. "Voting Common Stock" means the Company's Voting Common Stock, par value $0.01 per share. Section 6. Miscellaneous. ------------- 6A. Amendments and Waivers. Except as otherwise provided herein, any provision hereof may be amended or waived generally and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Purchaser. No course of dealing between the Company and any holder of Voting Common Stock issued hereunder or any delay on the part of the Company or any such holder in exercising any rights hereunder will operate as a waiver of any rights of the Company or of any such holder. 6B. Survival of Representations and Warranties. All representations and warranties contained herein or made in writing by any party in connection herewith will survive the execution and delivery of this Agreement, regardless of any investigation made by the Company or the Purchaser or on its behalf. 6C. Successors and Assigns. (i) Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto will bind and inure to the benefit of the respective successors and assigns of such parties whether so expressed or not. (ii) If a sale, transfer, assignment or other disposition of any Voting Common Stock is made in accordance with the provisions of this Agreement to any Person and such securities remain Restricted Securities immediately after such disposition, such Person shall, at or prior to the time such securities are acquired, execute a counterpart of this Agreement with such modifications thereto as may be necessary to reflect such acquisition, and such other documents as are necessary to confirm such Person's agreement to become a party to, and to be bound by, all covenants, terms and conditions of this Agreement as theretofore amended. 6D. Severability. Whenever possible, each provision of this Agreement will 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 under any applicable law or rule in any jurisdiction, such provision will be ineffective only to the extent of such invalidity, illegality or unenforceability in such jurisdiction, without invalidating the remainder of this Agreement in such jurisdiction or any provision hereof in any other jurisdiction. 6E. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. 6F. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 6G. Governing Law. All issues concerning the enforceability, validity and binding effect of this Agreement 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 provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the law of any jurisdiction other than the State of New York. 6H. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and shall be delivered personally or by telex or telecopy as described below or by reputable over night courier, and shall be deemed given on the date on which such delivery is made. If delivered by telex or telecopy such notices or communications shall be confirmed by a registered or certified letter (return receipt requested), postage prepaid. * * * * * IN WITNESS WHEREOF, the parties hereto have executed this Management Stock Purchase Agreement as of the date first written above. OUTSOURCING SOLUTIONS, INC. By: /s/ Timothy G. Beffa ----------------------------------------- Its: President and Chief Executive Officer /s/ Gary L. Weller -------------------------------------------- Gary Weller $400,000 April 19, 2000 PROMISSORY NOTE FOR VALUE RECEIVED, Gary Weller ("Maker"), hereby promises to pay to the order of Outsourcing Solutions Inc., a Delaware corporation ("Payee"), at such place as Payee shall designate to Maker from time to time in writing, the principal sum of Four Hundred Thousand Dollars ($400,000.00), on the terms and conditions set forth herein. This Promissory Note shall bear interest (computed on the basis of a 360-day year, counting the number of actual days elapsed) on the principal balance outstanding from time to time from the date hereof at the rate of 6.71% percent per annum. The principal balance of this Promissory Note and all accrued and unpaid interest shall be paid on the seventh anniversary of the date hereof. Maker may prepay all or any portion of the outstanding principal amount of this Promissory Note, together with the full amount of any accrued interest on this Promissory Note through the date of prepayment, at any time without penalty or premium. Notwithstanding the foregoing: (a) The Payee may declare all or any portion of the outstanding principal amount of this Note (together with all accrued interest hereon and all other amounts due in connection herewith) immediately due and payable and may demand immediate payment thereof upon the termination of Maker's employment with Payee for any reason other than Maker's death, disability, or termination by the Payee without cause (as defined in the Employment Agreement, dated as of July 5, 1999, by and between Payee and Maker); and (b) Immediately upon receipt by Maker of proceeds of any sale of Pledged Shares (as defined in the Management Stock Pledge Agreement, dated as of the date hereof, between Payee and Maker), Maker shall prepay this Note in an amount equal to such proceeds, with any such prepayment being applied first to any accrued and unpaid interest on the Note. Without affecting the liability of any maker, endorser, surety or guarantor, Payee may, without notice, grant renewals or extensions, accept partial payments, or agree not to sue any party liable on this Promissory Note. Whenever possible, each provision of this Promissory Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Promissory Note shall be prohibited by or invalid under such law, such provision shall be severable and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this Promissory Note. In the event Maker fails to pay any amounts due hereunder within 30 days of the date when such amounts are due, Maker shall pay to the holder hereof, in addition to such amounts due, all costs of collection, including reasonable attorneys fees. This Promissory Note shall be binding upon Maker and his successors and assigns, and shall inure to the benefit of Payee and its successors and assigns. Maker's rights, obligations and interests in and under this Promissory Note may not be assigned, sold, transferred or conveyed without the prior written consent of Payee in its sole discretion. This Promissory Note and the rights of the parties hereunder shall be governed by and construed in accordance with the internal laws of the State of New York. This Note is secured by a pledge of certain shares of Voting Common Stock of Outsourcing Solutions Inc. held by Maker pursuant to that certain Management Stock Pledge Agreement dated as of the date hereof between Payee and Maker. To the extent that the shares pledged under such Pledge Agreement are insufficient to satisfy the amount due hereunder (including any attorney's fees incurred by Payee hereunder), Maker shall be liable for any deficiency only up to a maximum of $150,000. Otherwise, this Note is non-recourse to Maker. * * * * * IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has duly executed and delivered this Promissory Note on the date first set forth above. /s/ Gary L. Weller -------------------------------- Gary Weller MANAGEMENT STOCK PLEDGE AGREEMENT THIS MANAGEMENT STOCK PLEDGE AGREEMENT is made as of April 19, 2000 between Gary Weller ("Pledgor"), and Outsourcing Solutions Inc., a Delaware corporation (the "Company"). The Company and Pledgor are parties to a Management Stock Purchase Agreement dated as of the date hereof, pursuant to which Pledgor purchased shares of the Company's Voting Common Stock, par value $0.01 per share (the "Purchased Shares"). The Company has allowed Pledgor to purchase a portion of the Purchased Shares by delivery to the Company of a promissory note (the "Note") in an aggregate principal amount equal to a portion of the purchase price of the Purchased Shares. This Pledge Agreement provides the terms and conditions upon which the Note is secured by a pledge to the Company of the Purchased Shares (the "Pledged Shares"). NOW, THEREFORE, in consideration of the premises contained herein and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and in order to induce the Company to accept the Note as payment for the Purchased Shares, Pledgor and the Company hereby agree as follows: 1. Pledge. Pledgor hereby pledges to the Company, and grants to the Company a security interest in, the Pledged Shares as security for the prompt and complete payment when due of the unpaid principal of and interest on the Note and full payment and performance of the obligations and liabilities of Pledgor hereunder. 2. Delivery of Pledged Shares. In the event that the certificates representing the Pledged Shares are at any time delivered to Pledgor, Pledgor shall immediately deliver to the Company the certificates representing the Pledged Shares, together with duly executed forms of assignment sufficient to transfer title thereto to the Company. 3. Voting Rights; Cash Dividends. Notwithstanding anything to the contrary contained herein, during the term of this Pledge Agreement until such time as there exists a default in the payment of principal or interest on the Note or any other default under the Note or hereunder, Pledgor shall be entitled to all voting rights with respect to the Pledged Shares and shall, subject to the terms of the Note, be entitled to receive all cash dividends paid in respect of the Pledged Shares. Upon the occurrence of and during the continuance of any such default, Pledgor shall no longer be able to vote the Pledged Shares and the Company shall retain all such cash dividends payable on the Pledged Shares as additional security hereunder. 4. Stock Dividends; Distributions, etc. If, while this Pledge Agreement is in effect, Pledgor becomes entitled to receive or receives any securities or other property in addition to, in substitution of, or in exchange for any of the Pledged Shares (whether as a distribution in connection with any recapitalization, reorganization or reclassification, a stock dividend or otherwise), Pledgor shall accept such securities or other property on behalf of and for the benefit of the Company as additional security for Pledgor's obligations under the Note and shall promptly deliver such additional security to the Company together with duly executed forms of assignment, and such additional security shall be deemed to be part of the Pledged Shares hereunder. 5. Default. If Pledgor defaults in the payment of the principal or interest under the Note when it becomes due (whether upon demand, acceleration or otherwise) or any other event of default under the Note or this Pledge Agreement occurs (including the bankruptcy or insolvency of Pledgor), and such default is not cured within thirty (30) days, the Company may exercise any and all the rights, powers and remedies of any owner of the Pledged Shares (including the right to vote the shares and receive dividends and distributions with respect to such shares) and shall have and may exercise without demand any and all the rights and remedies granted to a secured party upon default under the Uniform Commercial Code of New York or otherwise available to the Company under applicable law. Without limiting the foregoing, the Company is authorized to sell, assign and deliver at its discretion, from time to time, all or any part of the Pledged Shares at any private sale or public auction, on not less than ten days written notice to Pledgor, at such price or prices as determined in good faith by the Company's Board of Directors and upon such terms as the Company may deem advisable. Pledgor shall have no right to redeem the Pledged Shares after any such sale or assignment. At any such sale or auction, the Company may bid for, and become the purchaser of, the whole or any part of the Pledged Shares offered for sale. In case of any such sale, after deducting the costs, attorneys' fees and other expenses of sale and delivery, the remaining proceeds of such sale shall be applied to the principal of and accrued interest on the Note; provided that after payment in full of the indebtedness evidenced by the Note, the balance of the proceeds of sale then remaining shall be paid to Pledgor and Pledgor shall be entitled to the return of any of the Pledged Shares remaining in the hands of the Company. Pledgor shall be liable for any deficiency (up to a maximum of $150,000) if the remaining proceeds are insufficient to pay the indebtedness under the Note in full, including the fees of any attorneys employed by the Company to collect such deficiency. 6. Costs and Attorneys' Fees. All costs and expenses (including reasonable attorneys' fees) incurred in exercising any right, power or remedy conferred by this Pledge Agreement or in the enforcement thereof, shall become part of the indebtedness secured hereunder and shall be paid by Pledgor or repaid from the proceeds of the sale of the Pledged Shares hereunder. 7. No Other Liens; No Sales or Transfers. Pledgor hereby represents and warrants that he has good and valid title to all of the Pledged Shares, free and clear of all liens, security interests and other encumbrances, other than those imposed by that certain Stockholders Agreement, dated December 10, 1999, between the Company and the stockholders of the Company, and Pledgor hereby covenants that, until such time as all of the outstanding principal of and interest on the Note has been repaid, Pledgor shall not (i) create, incur, assume or suffer to exist any pledge, security interest, encumbrance, lien or charge of any kind against the Pledged Shares or Pledgor's rights as a holder thereof, other than pursuant to this Agreement, or (ii) sell or otherwise transfer any Pledged Shares or any interest therein. 8. Further Assurances. Pledgor agrees that at any time and from time to time upon the written request of the Company, Pledgor shall execute and deliver such further documents (including UCC financing statements) and do such further acts and things as the Company may reasonably request in order to effect the purposes of this Pledge Agreement. 9. Severability. Any provision of this Pledge Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10. No Waiver; Cumulative Remedies. The Company shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder, and no waiver shall be valid unless in writing, signed by the Company, and then only to the extent therein set forth. A waiver by the Company of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Company would otherwise have on any future occasion. No failure to exercise nor any delay in exercising on the part of the Company, any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights or remedies provided by law. 11. Waivers, Amendments; Applicable Law. None of the terms or provisions of this Pledge Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by the parties hereto. This Agreement and all obligations of the Pledgor hereunder shall together with the rights and remedies of the Company hereunder, inure to the benefit of the Company and its successors and assigns. This Pledge Agreement shall be governed by, and be construed and interpreted in accordance with, the laws of the State of New York. * * * * * IN WITNESS WHEREOF, this Management Stock Pledge Agreement has been executed as of the date first above written. OUTSOURCING SOLUTIONS INC. By: /s/ Timothy G. Beffa --------------------------------------- Name: Timothy Beffa Its: President and Chief Executive Officer PLEDGOR: /s/ Gary L. Weller ------------------------------------------ Gary Weller STOCK POWER FOR VALUE RECEIVED, Gary Weller ("Employee"), hereby sells, assigns and transfers unto __________________________, _______ shares of the Voting Common Stock, par value $0.01 per share, of Outsourcing Solutions Inc., a Delaware corporation (the "Corporation"), standing in his/her name on the books of the Corporation represented by certificate no. _____ herewith and do hereby irrevocably constitute and appoint _________________________________ attorney to transfer said stock on the books of the Corporation with full power of substitution in the premises. Dated: ------------------------- /s/ Gary L. Weller -------------------------------------- Gary Weller EX-10.3 4 0004.txt DIRECTOR STOCK PURCHASE AND OPTION AGREEMENT DIRECTOR STOCK PURCHASE AND OPTION AGREEMENT THIS DIRECTOR STOCK PURCHASE AND OPTION AGREEMENT (this "Agreement") is made as of May 31, 2000, by and between Outsourcing Solutions Inc., a Delaware corporation (the "Company"), and _______________ (the "Purchaser"). Except as otherwise indicated herein, capitalized terms used herein are defined in Section 10 hereof. WHEREAS, Purchaser is a member of the board of directors of the Company, and Purchaser desires to purchase, and the Company desires to sell to Purchaser on the terms and conditions set forth herein, Common Stock of the Company, together with an option to purchase Common Stock of the Company. 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. Authorization and Closing. (a) Authorization of Common Stock. The Company shall authorize the issuance and sale to Purchaser of 2,669 shares of Common Stock (the "Purchased Shares"). (b) Purchase and Sale of Common Stock. At the Closing (as defined below), the Company shall sell to Purchaser and, subject to the terms and conditions set forth herein, Purchaser shall purchase form the Company, the Purchased Shares, for a per share price of $37.47, for an aggregate purchase price of $100,000.00 in cash. (c) The Closing. The closing of the purchase and sale of the Purchased Shares hereunder (the "Closing") shall take place on May 31, 2000 at such place as may be mutually agreeable to the Company and Purchaser. At the Closing, the Company shall deliver to Purchaser the Purchased Shares, upon payment of the purchase price thereof by a cashier's or certified check, or by wire transfer of immediately available funds to an account designated by the Company, in the amount of $100,000.00. (d) Stockholders Agreement. At the Closing, Purchase shall become a party to the Stockholders Agreement and execute the Stockholders Agreement signature page in the form of Exhibit A attached hereto. (e) Section 83(b). Within 30 days after the Closing, Purchaser will make an effective election with the Internal Revenue Service under Section 83(b) of the Internal Revenue Code and the regulations promulgated thereunder in the form of Exhibit B attached hereto. 2. Option. (a) Terms. Purchaser is granted an option (the "Option") to purchase up to 2,669 shares of Common Stock (the "Option Shares") at a price per share of $37.47 (the "Exercise Price"), payable upon exercise as set forth in Section 2(b) below. The Option shall expire at the close of business on May 31, 2010 (the "Expiration Date"), subject to earlier expiration as provided herein. (b) Payment of Option Price. Subject to Section 3 below, the Option may be exercised in whole or in part upon payment of an amount (the "Option Price") equal to the product of (i) the Exercise Price multiplied by (ii) the number of Option Shares to be acquired. Payment shall be made in cash (including check, bank draft or money order). 3. Exercisability/Vesting. (a) Normal Vesting. The Option may be exercised only to the extent it has become vested. The Option shall vest and become exercisable in accordance with the following schedule, if and only if Participant is, and has been, continuously a member of the Board from the date of this Agreement through and including the applicable date set forth below: Cumulative Percentage of Date Option Vested May 31, 2001 33 1/3% May 31, 2002 66 2/3% May 31, 2003 100% (b) Acceleration of Vesting on Sale of the Company or Qualified Public Offering. If Purchaser has been a member of the Board continuously from the date of this Agreement until the earlier of a Sale of the Company or a Qualified Public Offering, the portion of the outstanding Option which has not become vested at the date of such event shall immediately vest and become exercisable with respect to 100% of the Option Shares simultaneously with the consummation of the Sale of the Company or Qualified Public Offering, as applicable. 4. Expiration of Option. (a) Normal Expiration. In no event shall any part of the Option be exercisable after the Expiration Date set forth in Section 2(a) above. (b) Early Expiration Upon Termination of Membership. Any portion of the Option that was not vested and exercisable on the date Purchaser ceases to be a member of the Board shall expire and be forfeited on such date, and any portion of the Option that was vested and exercisable on the date Purchaser ceased to be a member of the Board shall also expire and be forfeited; provided that:(i) if the Purchaser ceases to be a member of the Board on account of death or Disability, the portion of the Option that is vested and exercisable shall expire 90 days from the date of the death or Disability, but in no event after the Expiration Date, and (ii) if you retire from the Board (with the approval of the Board) or if you are discharged from the Board other than for Cause, the portion of the Option that is vested and exercisable shall expire 30 days from the date of the retirement or discharge, but in no event after the Expiration Date. 5. Procedure for Exercise. Purchaser may exercise all or any portion of the Option, to the extent it has vested and is outstanding, at any time and from time to time prior to its expiration, by delivering written notice to the Company (to the attention of the Company's Executive Officer) and the written acknowledgement that Purchaser has read and has been afforded an opportunity to ask questions of management of the Company regarding all financial and other information provided to Purchaser regarding the Company, together with payment of the Option Price in accordance with the provisions of Section 2(b) above. 6. Representations and Warranties of Purchaser. In connection with the purchase and sale of the Purchaser Shares, Purchaser represents and warrants to the Company that: (a) The Purchaser Shares to be acquired by Purchaser pursuant to this Agreement will be acquired for Purchaser's own account and not with a view to, or intention of, distribution thereof in violation of the Securities Act, or any applicable state securities laws, and the Purchaser Shares will not be disposed of in contravention of the Securities Act or any applicable state securities laws. (b) Purchaser is a member of the Board of the Company, is sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Purchaser Shares. (c) Purchaser is able to bear the economic risk of his investment in the Purchaser Shares for an indefinite period of time because the Purchaser Shares have not been registered under the Securities Act and, therefore, cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available. (d) Purchaser has had an opportunity to ask questions and receive answers concerning the terms and conditions of the offering of Purchaser Shares and has had full access to such other information concerning the Company as he has requested. (e) This Agreement constitutes the legal, valid and binding obligation of Purchaser, enforceable in accordance with its terms, and the execution, delivery and performance of this Agreement by Purchaser does not and will not conflict with, violate or cause a breach of any agreement, contract or instrument to which Purchaser is a party or any judgment, order or decree to which Purchaser is subject. (f) Purchaser is a resident of the State of ___________. 7. Right to Purchase Shares Upon The Termination of Board Membership. (a) Repurchase of Shares. If Purchaser shall cease to be a member of the Board for any reason (the date on which such termination occurs being referred to herein as the "Termination Date"), then the Company shall have the option to repurchase all or any part of the Purchased Shares and Option Shares issued or issuable upon exercise of the Option (collectively, with the Purchased Shares, the "Shares"), whether held by Purchaser or by one or more of the transferees, at the price determined in accordance with the provisions of Section 8 below (the "Repurchase Option"). (b) Repurchase by Company. The Company may elect to purchase all or any portion of the Shares by delivery of written notice (the "Repurchase Notice") to Purchaser or any other holders of the Shares within 180 days after the Termination Date. The Repurchase Notice shall set forth the number of Shares to be acquired from Purchaser and such other holder(s), the aggregate consideration to be paid for such shares and the time and place for the closing of the transaction. The number of Shares to be repurchased by the Company shall first be satisfied to the extent possible from the Shares held by Purchaser at the time of delivery of the Repurchase Notice. If the number of Shares then held by Purchaser is less than the total number of Shares the Company has elected to purchase, then the Company shall purchase the remaining shares elected to be purchased from the other holders thereof, pro rata according to the number of shares held by each such holder at the time of delivery of such Repurchase Notice (determined as close as practical to the nearest whole shares). (c) Repurchase by Designees. If for any reason the Company does not elect to purchase all of the Shares pursuant to the Repurchase Option, then any such persons or entities as may be designated by the Company (each, a "Designee" and, collectively, the "Designees") shall be entitled to exercise the Company's Repurchase Option in the manner set forth in Section 8(a) for all or any portion of the number of Shares the Company has not elected to purchase (the "Available Shares"). As soon as practicable after the Company has determined that there shall be Available Shares, but in any event within 150 days after the Termination Date, the Company shall deliver written notice (the "Option Notice") to the Designees setting forth the number of Available Shares and the price for each Available Share. Each Designee may elect to purchase any number of Available Shares by delivering written notice to the Company within 20 days after receipt of the Option Notice from the Company. If more than one Designee elects to purchase the Available Shares and such elections exceed the number of Available Shares, the number of Available Shares to be purchased by the electing Designees shall be allocated among them as determined by the Company. As soon as practicable, and in any event within five days after the expiration of such 20-day period, the Company shall notify Purchaser and any other holder(s) of Shares as to the number of Shares being purchased from Purchaser by the Designees (the "Supplemental Repurchase Notice"). At the time the Company delivers the Supplemental Repurchase Notice to Purchaser and such other holder(s) of Shares, the Designees shall also receive written notice from the Company setting forth the number of shares each is entitled to purchase, the aggregate purchase price and the time and place of the closing of the transaction. (d) Closing of Repurchase of Shares. The purchase of Shares pursuant to this Section 7 shall be closed at the Company's executive offices within 20 days after the expiration of the 180-day period referred to in Section 7(b). At the closing, the purchaser or purchasers shall pay the purchase price in the manner specified in Section 8(c) below and Purchaser and any other holders of Shares being purchased shall deliver the certificate or certificates representing such shares to the purchaser or purchasers or their nominees, accompanied by duly executed stock powers. Any purchaser of Shares under this Section 7 shall be entitled to receive customary representations and warranties from Purchaser and any other selling holders of Shares regarding the sale of such shares (including representations and warranties regarding good title to such shares, free and clear of any liens or encumbrances) and to require all sellers' signatures to be guaranteed by a national bank or reputable securities broker. (e) Termination. The provisions set forth in this Section 7 shall terminate with respect to each Share upon the earlier of (i) the date on which such Share has been transferred in a Public Sale, (ii) consummation of a Qualified Public Offering, or (iii) the tenth anniversary of the date of this Agreement. 8. Purchase Price for Shares. (a) Purchase Price without Cause, etc. If Purchaser ceases to be a member of the Board due to his resignation, failure to be re-elected to the Board, involuntary termination (other than for Cause), death or Disability, the purchase price per share to be paid for the Shares purchased by the Company and its Designees (if any) pursuant to Section 7 above shall be equal to the Fair Market Value of such Shares as of the Termination Date. (b) Purchase Price with Cause. If Purchaser ceases to be a member of the Board due to the termination of such Board membership with Cause, the purchase price per share to be paid for the Shares purchased by the Company and its Designees (if any) pursuant to Section 7 above shall be equal to the lesser of (i) the Fair Market Value of such Shares as of the Termination Date or (ii) $37.47 per Share (as the same may be adjusted for stock splits, stock dividends, stock combinations or other similar events). (c) Manner of Payment. If the Company elects to purchase all or any part of the Shares, including Shares held by one or more transferees, the Company shall pay for such shares by certified check or wire transfer of funds. In addition, the Company may pay the purchase price for such shares by offsetting amounts outstanding under any indebtedness or obligations owed by Purchaser to the Company. If any Designees elect to purchase all or any portion of the Available Shares, such Designees shall pay for that portion of such Shares by certified check or wire transfer of funds. 9. Right to Put Shares Upon Termination of Board Membership. (a) Repurchase of Shares. If Purchaser shall cease to be a member of the Board by reason of his involuntary termination (other than for Cause) or his failure to be re-elected to the Board, then Purchaser shall have the option to require to the Company to repurchase all or any part of the Shares, whether held by Purchaser or by one or more of the transferees, at a per share price equal to the Fair Market Value of such Shares as of the Termination Date (the "Put Option"). (b) Put Procedure. Purchaser may elect to put all or any portion of the Shares by delivery of written notice (the "Put Notice") to the Company within 180 days after the Termination Date. The Put Notice shall set forth the number of Shares to be repurchased by the Company, and the time and place for the closing of the transaction. Within 60 days of receipt of the Put Notice, the Board shall deliver to Purchaser written notice of the Fair Market Value of such Shares (the "FMV Notice"). Within 10 days of receipt of the FMV Notice, Purchaser may withdraw his Put Notice by delivering written notice of such withdrawal to the Company. Nothing in this Section 9 shall in any manner limit the right of the Company to exercise the Repurchase Option pursuant to Sections 7 and 8, and in the event that both the Repurchase Option and the Put Option are exercised in respect of the same Shares, the Repurchase Option provisions shall govern. (c) Closing of Putof Shares. The repurchase of Shares pursuant to this Section 9 shall be closed at the Company's executive offices within 20 days after the expiration of the 60-day period referred to in Section 9(b). At the closing, the Company shall pay the purchase price by certified check or wire transfer of funds and Purchaser and any other holders of Shares being purchased shall deliver the certificate or certificates representing such shares to the purchaser or purchasers or their nominees, accompanied by duly executed stock powers. The Company shall be entitled to receive customary representations and warranties from Purchaser and any other selling holders of Shares regarding the sale of such shares (including representations and warranties regarding good title to such shares, free and clear of any liens or encumbrances) and to require all sellers' signatures to be guaranteed by a national bank or reputable securities broker. (d) Termination. The provisions set forth in this Section 9 shall terminate with respect to each Share upon the earlier of (i) the date on which such Share has been transferred in a Public Sale, (ii) consummation of a Qualified Public Offering, or (iii) the tenth anniversary of the date of this Agreement. 10. Definitions. For the purposes of this Agreement, the following terms shall have the meanings set forth below: "Board" means the board of directors of the Company. "Cause" shall mean any of the following as determined by the Board: (i) a material breach by Purchaser of this Agreement, (ii) the failure to adhere to any written policy of the Company or any Subsidiary (including but not limited to sexual or other harassment of a Company employee or agent) if Purchaser has been given a reasonable opportunity to comply with such policy or cure the failure to comply; (iii) the appropriation (or attempted appropriation) of a material business opportunity of the Company or any of its affiliates, including attempting to secure or securing any personal profit in connection with any transaction entered into on behalf of the Company or any of its affiliates; or (iv) the conviction of, or the entering of a guilty plea or plea of no contest with respect to, a felony, the equivalent thereof, or any other crime reasonably likely to damage the Company's reputation. "Code" shall mean the Internal Revenue Code of 1986, as amended, and any successor statute. "Common Stock" means the Company's Voting Common Stock, par value $0.01 per share. "Company" shall mean Outsourcing Solutions Inc., a Delaware corporation, and (except to the extent the context requires otherwise) any subsidiary corporation (as such term is defined in Section 425(f) of the Code) of Outsourcing Solutions Inc. "Disability" shall mean the permanent disability of the Purchaser. Purchaser shall be deemed to have suffered a "Disability" under this Agreement if Purchaser is determined to be disabled under the long-term disability policy carried by the Company or any Subsidiary of the Company which covers Purchaser or, if there is no such policy, by the Board in good faith. "Fair Market Value" of the Common Stock shall be determined in good faith by the Board; provided that Purchaser shall not participate in any deliberations or vote with respect to the Board's determination of Fair Market Value. "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. "Option Shares" shall mean (i) all shares of Common Stock issued or issuable upon the exercise of the Option and (ii) all shares of Common Stock issued with respect to the Common Stock referred to in clause (i) above by way of stock dividend or stock split or in connection with any conversion, merger, consolidation, recapitalization or other reorganization affecting the Common Stock. Option Shares shall continue to be Option Shares in the hands of any holder other than Purchaser (except for the Company or its Designees and, to the extent that Purchaser is permitted to transfer Option Shares pursuant to the Stockholders Agreement, purchasers pursuant to a public offering under the Securities Act), and each such transferee thereof shall succeed to the rights and obligations of a holder of Option Shares hereunder. "Person" shall mean 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. "Public Sale" shall mean any sale of Purchased Shares or Option Shares, as applicable, to the public pursuant to an offering registered under the Securities Act or to the public through a broker, dealer or market maker pursuant to the provisions of Rule 144 adopted under the Securities Act. "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. "Shares" shall have the meaning set forth in Section 7(a) hereof. "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. "Securities Act" shall mean the Securities Act of 1933, as amended, and any successor statute. "Stockholders Agreement" shall mean that certain Stockholders Agreement, dated as of December 10, 1999, by and among the Company and the parties signatory thereto (as the same may be amended, modified or supplemented from time to time). "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. 11. Securities Laws Restrictions and Other Restrictions on Transfer of Option Shares. Purchaser represent that when Purchaser exercises the Option Purchaser shall be purchasing Option Shares for his own account and not on behalf of others. Purchaser understands and acknowledges that federal and state securities laws govern and restrict the right to offer, sell or otherwise dispose of any Option Shares unless the offer, sale or other disposition thereof is registered under the Securities Act and state securities laws, or such offer, sale or other disposition is exempt from registration or qualification thereunder. Purchaser agrees that Purchaser shall not offer, sell or otherwise dispose of any Option Shares in any manner which would: (i) require the Company to file any registration statement with the Securities and Exchange Commission (or any similar filing under state law) or to amend or supplement any such filing or (ii) violate or cause the Company to violate the Securities Act, the rules and regulations promulgated thereunder or any other state or federal law (as to which the Company will require an opinion of its counsel in form and substance satisfactory to the Company as to the availability of any exemption from registration or qualification). Purchaser further understand that the certificates for any Option Shares Purchaser purchases shall bear the following legend: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON ________ AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE DIRECTOR STOCK PURCHASE AND OPTION AGREEMENT, DATED AS OF MAY 31, 2000, AS AMENDED AND MODIFIED FROM TIME TO TIME, BY AND AMONG THE ISSUER AND THE ORIGINAL HOLDER HEREOF, AND THE ISSUER RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE ISSUER TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE." 12. Non-Transferability of Option. The Option is personal to Purchaser and is not transferable by Purchaser other than by will or the laws of descent and distribution. During the lifetime only Purchaser (or the guardian or legal representative) may exercise the Option. In the event of the death of Purchaser, the Option may be exercised only (i) by the executor or administrator of the estate or the person or persons to whom the rights under the Option shall pass by will or the laws of descent and distribution and (ii) to the extent that Purchaser was entitled hereunder at the date of the death subject to the limitations set forth in Section 4 hereof. 13. Withholding of Taxes. The Company shall be entitled, if necessary or desirable, to withhold from Purchaser from any amounts due and payable by the Company to Purchaser (or secure payment from Purchaser in lieu of withholding) the amount of any withholding or other tax due from the Company with respect to any Option Shares issuable under this Plan, and the Company may defer such issuance unless indemnified by Purchaser to its satisfaction. 14. Adjustments. In the event of a reorganization, recapitalization, stock dividend or stock split, or combination or other change in the Common Stock, the Board, in order to prevent the dilution or enlargement of rights under the Option, make such adjustments in the number and type of shares covered by the Option and the Exercise Price specified herein as may be determined to be appropriate and equitable. The issuance by the Company of stock of any class, or options or securities exercisable or convertible into stock of any class, for cash or property, or for labor or services either upon direct sale, or upon the exercise of rights or warrants to subscribe therefor, or upon exercise or conversion of other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock then subject to the Option. 15. Remedies. The parties hereto (and any Designees as third- party beneficiaries) 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 acknowledge and agree that money damages would not be an adequate remedy for any breach of the provisions of this Agreement and that any party hereto (and any Designee as a third-party beneficiary) 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 bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement. 16. Amendment. Except as otherwise provided herein, any provision of this Agreement may be amended or waived only with the prior written consent of Purchaser and the Company. 17. Successors and Assigns. Except as otherwise expressly provided herein, all covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not. 18. 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 prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement. 19. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall constitute an original, but all of which taken together shall constitute one and the same Agreement. 20. Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. 21. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal law, and not the law of conflicts, of the state of Delaware. 22. Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered personally or mailed by certified or registered mail, return receipt requested and postage prepaid, to the recipient. Such notices, demands and other communications shall be sent to Purchaser and to the Company at the addresses indicated below: (a) If to Purchaser: ------------------------ ------------------------ ------------------------ (b) If to the Company: Outsourcing Solutions Inc. 390 South Woods Mill Road Suite 350 Chesterfield, MO 63017 Attn.: Chief Executive Officer and a copy to: Madison Dearborn Partners, Inc. Three First National Plaza Suite 3800 Chicago, IL 60602 Attn.: Paul R. Wood or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. 23. Entire Agreement. This Agreement constitutes the entire understanding between Purchaser and the Company, and supersedes all other agreements, whether written or oral, with respect to the acquisition by Purchaser of Common Stock of the Company. As an inducement to the Company to issue the Purchased Shares and the Option to Purchaser, and as a condition thereto, Purchaser acknowledges and agrees that neither the issuance of the Purchased Shares nor the Option to Purchaser nor any provision contained herein shall entitle Purchaser to remain a member of the Board or affect the right of the Company to remove Purchaser from the Board pursuant to the terms of its certificate of incorporation and by-laws, as they may be amended from time to time. 24. Confidentiality. Purchaser agree to keep the terms of this Agreement strictly confidential. * * * * IN WITNESS WHEREOF, the parties hereto have executed this Director Stock Purchase and Option Agreement as of the date first written above. OUTSOURCING SOLUTIONS INC. By: ----------------------------------------------- Its: ---------------------------------------------- -------------------------------------------------- ------------------------------ CONSENT The undersigned spouse of __________________ (the "Shareholder") hereby acknowledges that I have read the foregoing Director Stock Purchase and Option Agreement and that I understand its contents. I am aware that the Agreement provides for the repurchase of my spouse's Voting Common Stock ("Common Stock") under certain circumstances and imposes other restrictions on the transfer of such shares of Common Stock. I agree that my spouse's interest in the Common Stock is subject to this Agreement and the other agreements referred to therein and any interest I may have in such shares of Common Stock shall be irrevocably bound by this Agreement and the other agreements referred to therein and further that the my community property interest (if any) shall be similarly bound by this Agreement. The undersigned spouse irrevocably constitutes and appoints the Shareholder as the undersigned's true and lawful attorney and proxy in the undersigned's name, place and stead to sign, make, execute, acknowledge, deliver, file and record all documents which may be required, and to manage, vote, act and make all decisions with respect to (whether necessary, incidental, convenient or otherwise), any and all shares of Common Stock of the Company in which the undersigned now has or hereafter acquires any interest and in any and all shares of capital stock of the Company now or hereafter held of record by the Shareholder (including but not limited to the right, without further signature, consent or knowledge of the undersigned spouse, to exercise or not to exercise any and all options under any appropriate agreements and to exercise amendments and modifications of and to terminate the foregoing agreements and to dispose of any and all such shares of Common Stock and options), with all powers the undersigned spouse would possess if personally present, it being expressly understood and intended by the undersigned that the foregoing power of attorney and proxy is coupled with an interest; and this power of attorney is a durable power of attorney and will not be affected by disability, incapacity or death of the Shareholder, or dissolution of marriage and this proxy will not terminate without consent of the Shareholder and the Company. I am aware that the legal, financial and other matters contained in this Agreement are complex and I am free to seek advice with respect thereto from independent counsel. I have either sought such advice or determined after carefully reviewing this Agreement that I will waive such right. ------------------------------------------------ Signature ------------------------------------------------ Printed Name ------------------------------------------------ Witness STOCKHOLDERS AGREEMENT SIGNATURE PAGE I hereby agree to become a party to, and to be bound by, that certain Stockholders Agreement, dated as of December 10, 1999, by and among Outsourcing Solutions Inc., a Delaware corporation, and its stockholders, as such agreement may be amended from time to time. DATE: May 31, 2000 ------------------------------------------------ ---------------------- Exhibit B May 31, 2000 ELECTION TO INCLUDE STOCK IN GROSS INCOME PURSUANT TO SECTION 83(b) OF THE INTERNAL REVENUE CODE The undersigned purchased $100,000.00 of Voting Common Stock, par value $.01 per share (the "Shares"), of Outsourcing Solutions Inc., a Delaware corporation (the "Company"), on May 31, 2000. Under certain circumstances, the Company has the right to repurchase the Shares at cost or fair market value from the undersigned (or from the holder of the Shares, if different from the undersigned) should the undersigned cease to be a member of the Board of Directors of the Company. Hence, the Shares are subject to a substantial risk of forfeiture and are nontransferable. The undersigned desires to make an election to have the Shares taxed under the provision of Code ss.83(b) at the time he purchased the Shares. Therefore, pursuant to Code ss.83(b) and Treasury Regulation ss.1.83-2 promulgated thereunder, the undersigned hereby makes an election, with respect to the Shares (described below), to report as taxable income for calendar year 2000 the excess (if any) of the Shares' fair market value on May 31, 2000 over purchase price thereof. The following information is supplied in accordance with Treasury Regulation ss.1.83-2(e): 1. The name, address and social security number of the undersigned: ------------------------- ------------------------- ------------------------- Social Security Number: ________________ 2. A description of the property with respect to which the election is being made: 2,669 shares of Voting Common Stock, par value $.01 per share of Outsourcing Solutions Inc., a Delaware corporation. 3. The date on which the property was transferred: May 31, 2000. The taxable year for which such election is made: calendar year 2000. 4. The restrictions to which the property is subject: If the undersigned ceases to be a member of the Company's Board of Directors due to the undersigned's termination of membership of the Company's Board of Directors with cause, then the Company and its designees have the right to repurchase the securities of the Company held by the undersigned at a price equal to the lesser of (A) original cost and (B) fair market value. 5. The fair market value on May 31, 2000 of the property with respect to which the election is being made, determined without regard to any lapse restrictions: $37.47 per share of Voting Common Stock. 6. The amount paid for such property: $37.47 per share of Common Stock. A copy of this election has been furnished to the Secretary of the Company pursuant to Treasury Regulations ss.1.83-2(e)(7). Dated: May 31, 2000 ------------------------------------------------ ---------------------- EX-10.4 5 0005.txt FORM OF NON-QUALIFIED STOCK OPTION AWARD AGREEMENT OUTSOURCING SOLUTIONS INC. NON-QUALIFIED STOCK OPTION AWARD AGREEMENT [F] This Non-qualified Stock Option Award Agreement (this "Agreement"), dated as of ---------, 2000, is made between Outsourcing Solutions Inc. (the "Company") and -----------(the "Optionee"). All capitalized terms used herein that are not defined herein shall have the respective meanings given to such terms in the Outsourcing Solutions Inc. 2000 Equity Incentive Plan, as amended (the "Plan"). W I T N E S S E T H : - - - - - - - - - - 1. Grant of Option. Pursuant to the provisions of the Plan, the Company hereby grants to the Optionee, subject to the terms and conditions of the Plan and subject further to the terms and conditions herein set forth, the right and option to purchase from the Company all or any part of an aggregate of - --------- shares of the $0.01 par value voting common stock of the Company (the "Stock"), at a per share purchase price equal to $----- (the "Option"), such Option to be exercisable as hereinafter provided. The Option shall not be treated as an "incentive stock option," as defined in Section 422 of the Code. 2. Terms and Conditions. It is understood and agreed that the Award evidenced hereby is subject to the following terms and conditions: (a) Expiration Date. The Option shall expire ten (10) years after the date indicated above. (b) Exercise of Option. (i) Subject to the other terms of this Agreement and the Plan, the Option may be exercised on or after the dates indicated below as to that percentage of the total shares of Stock subject to the Option as set forth below opposite each such date, plus any shares of Stock as to which the Option could have been exercised previously, but was not so exercised. Date Percentage 25% 25% 25% 25% (ii) Notwithstanding the foregoing provisions of Section 2(b)(i) hereof, but subject to Section 2(a) and 2(d) hereof, immediately prior to a "Sale of the Company," as defined in and contemplated by the Stockholders Agreement, dated as of December 10, 1999, as may be amended from time to time, by and among Outsourcing Solutions Inc., Madison Dearborn Capital Partners III, L.P., and the OSI Stockholders (as defined therein) (the "Stockholders Agreement"), the Option may be exercised with respect to all or any portion of the total number of shares of Stock covered by the then unexercised Option. (iii) Any exercise of all or any part of the Option shall be accompanied by a written notice to the Company specifying the whole number of shares of Stock as to which the Option is being exercised. Upon the valid exercise of all or any part of the Option, a certificate (or certificates) for the number of shares of Stock with respect to which the Option is exercised shall be issued in the name of the Optionee, subject to the other terms and conditions of this Agreement and the Plan. Notation of any partial exercise shall be made by the Company on Schedule I attached hereto. (c) Consideration. At the time of any exercise of the Option, the purchase price of the shares of Stock as to which the Option shall be exercised shall be paid to the Company (i) in United States dollars by personal check, bank draft or money order, (ii) if permitted by applicable law and approved by the Committee in accordance with the Plan, with Stock, duly endorsed for transfer to the Company, owned by the Optionee (or the Optionee and his spouse jointly) for at least six (6) months prior to the tender thereof and not used for another such exercise during such six-month period and having a total fair market value, as determined in accordance with Paragraph 6(a) of the Plan ("Fair Market Value"), on the date of such exercise of the Option equal to such purchase price of such shares of Stock, or (iii) a combination of the consideration provided for in the foregoing clauses (i) and (ii) of this Section 2(c) having a total Fair Market Value on the date of such exercise equal to the purchase price of such shares of Stock. (d) Exercise Upon Death, Disability or Termination of Employment. The Option shall terminate upon the termination, for any reason, of the Optionee's employment with the Company or a subsidiary of the Company, and no shares of Stock may thereafter be purchased under the Option, except as follows: (i) In the event of the death of the Optionee while an employee of the Company or a subsidiary of the Company, the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) at the time of his or her death, may be exercised after the Optionee's death by the legal representative of the Optionee's estate or the legatee of the Optionee under his last will until the earlier to occur of the second anniversary of the Optionee's death and the stated expiration date of the Option. (ii) If the Optionee's employment with the Company or a subsidiary of the Company shall terminate by reason of permanent disability (as defined in the last sentence of this Section 2(d)(ii)), the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) upon such termination of employment, may be exercised after such termination until the earlier to occur of the first anniversary of such termination and the stated expiration date of the Option. For purposes of this Agreement, "permanent disability" shall mean an inability (as determined by the Committee) to perform duties and services as an employee of the Company or a subsidiary of the Company by reason of a medically determinable physical or mental impairment, supported by medical evidence, which can be expected to last for a continuous period of not less than eight (8) months. (iii) If (A) the Company or a subsidiary of the Company terminates the Optionee's employment with the Company or such subsidiary and such termination is not "for cause," or (B) the Optionee terminates employment with the Company or such subsidiary for "good reason," the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) upon such termination of employment, may be exercised after such termination until the earlier to occur of the first anniversary of such termination and the stated expiration date of the Option. For the purposes of this Agreement, Optionee shall be deemed to have been terminated "for cause" if his or her employment was terminated for: (i) embezzlement, theft or other misappropriation of any property of the Company or any subsidiary, (ii) gross or willful misconduct resulting in substantial loss to the Company or any subsidiary or substantial damage to the reputation of the Company or any subsidiary, (iii) any act involving moral turpitude which results in a conviction for a felony involving moral turpitude, fraud or misrepresentation, (iv) gross neglect of his or her assigned duties to the Company or any subsidiary, (v) gross breach of his or her fiduciary obligations to the Company or any subsidiary, or (vi) any chemical dependence which materially affects the performance of his or her duties and responsibilities to the Company or any subsidiary; provided that in the case of the misconduct set forth in clauses (iv) and (vi) above, such misconduct shall continue for a period of 30 days following written notice thereof by the Company to the Optionee. For purposes of this Agreement "good reason" shall mean the occurrence of any of the following events, except for the occurrence of such an event in connection with the termination of Optionee's employment by the Company or any of its Subsidiaries for cause: (i) a significant reduction in the authorities, duties or responsibilities of Optionee; or (ii) a failure to pay base salary after the due date thereof provided that the Company shall have received written notice of such failure to pay from Optionee and shall not have paid (or caused to be paid) such base salary amount within 20 days of such notice, a reduction in base salary, the reduction or discontinuance of any incentive compensation plan or the taking of any action which materially adversely affects Optionee's participation in or benefits under any fringe benefit provided to Optionee; provided that the actions referred to in clause (ii) above (other than with respect to a failure to pay, or reduction in, base salary) shall not constitute "good reason" events if such actions were taken by the Company or its Subsidiaries as part of an overall plan by the Company or its Subsidiaries and made applicable to the same extent to all executives of the Company or its Subsidiaries. (iv) If the Optionee's employment with the Company or a subsidiary of the Company is terminated by reason of the Optionee's retirement after attaining both five (5) years of continuous service with the Company or a subsidiary of the Company and 59 1/2 years of age, the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) upon such retirement, may be exercised after such retirement until the earlier to occur of the second anniversary of such retirement and the stated expiration date of the Option. (v) If the Optionee dies during the one-year or two-year period following termination of his or her employment specified in Section 2(d)(ii), 2(d)(iii) or 2(d)(iv), the Option, to the extent the Option would have been exercisable pursuant to Section 2(d)(ii), 2(d)(iii) or 2(d)(iv) as of the date of the Optionee's death, may be exercised after the Optionee's death by the legal representative of his estate or the legatee of the Optionee under his last will until the earlier to occur of the second anniversary of the Optionee's death and the stated expiration date of the Option. (vi) If the Optionee's employment is terminated by the Company or a subsidiary of the Company "for cause" (as defined in Section 2(d)(iii)), the Option shall automatically, without any further action required by the Company, terminate on the date of such termination of employment and shall cease to thereafter be exercisable with respect to any shares of Stock. (vii) If the Optionee's employment is terminated under circumstances not otherwise described in this Section 2(d), the Option, to the extent exercisable in accordance with Section 2(b)(i) or 2(b)(ii) upon such termination, may be exercised after such termination until the earlier to occur of 90 days following such termination and the stated expiration date of the Option. If the Optionee dies during the 90 day period following termination of his or her employment specified in this Section 2(d)(vii), the Option, to the extent the Option would have been exercisable pursuant to this Section 2(d)(vii), as of the date of the Optionee's death, may be exercised after the Optionee's death by the legal representative of his estate or the legatee of the Optionee under his last will until the earlier to occur of the first anniversary of the Optionee's death and the stated expiration date of the Option. (e) Nontransferability. The Option shall not be transferable otherwise than by will or the laws of descent and distribution, and are exercisable, during the lifetime of the Optionee, only by him. (f) Withholding Taxes. At the time of receipt of Stock upon the exercise of all or any part of the Option, the Optionee shall be required to pay to the Company in cash (or make other arrangements, in accordance with Section 12 of the Plan, for the satisfaction of) any taxes of any kind required by law t o be withheld with respect to such Stock; provided, however, tax withholding obligations may be met, in whole or in part, by the withholding of shares of Stock otherwise deliverable to the Optionee upon such exercise pursuant to procedures approved by the Committee; provided further, however, the amount of shares so withheld may not exceed the amount necessary to satisfy required Federal, state, local and foreign withholding obligations using the minimum statutory rate. In no event shall Stock or other property be delivered to the Optionee until the Optionee has paid to the Company in cash, or made arrangements satisfactory to the Company regarding the payment of, the amount of any taxes of any kind required by law to be withheld with respect to the Stock subject to the Option, and the Company shall have the right to deduct any such taxes from any payment of any kind otherwise due to the Optionee. (g) No Rights as Stockholder. The Optionee shall not become the beneficial owner of the shares of Stock subject to the Option, nor have any rights to dividends or other rights as a shareholder with respect to any such shares, until the Optionee has exercised the Option in accordance with the provisions hereof and of the Plan. (h) No Right to Continued Employment. The Option shall not confer upon the Optionee any right to be retained in the service of the Company or a subsidiary of the Company, nor restrict in any way the right of the Company or any subsidiary of the Company, which right is hereby expressly reserved, to terminate his employment at any time with or without cause. (i) Inconsistency with Plan. Notwithstanding any provision herein to the contrary, the Option provides the Optionee with no greater rights or claims than are specifically provided for under the Plan. If and to the extent that any provision contained in this Agreement is inconsistent with the Plan, the Plan shall govern. (j) Compliance with Laws, Regulations, Stockholders Agreement. The Option and the obligation of the Company to sell and deliver shares of Stock hereunder shall be subject in all respects to (i) all applicable Federal and state laws, rules and regulations, (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Committee shall, in its sole discretion, determine to be necessary or applicable and (iii) the terms of the Stockholders Agreement in all respects. Moreover, the Option may not be exercised if its exercise, or the receipt of shares of Stock pursuant thereto, would be contrary to applicable law. 3. Investment Representation. If at the time of exercise of all or part of the Option the Stock is not registered under the Securities Act of 1933, as amended (the "Securities Act"), and/or there is no current prospectus in effect under the Securities Act with respect to the Stock, the Optionee shall execute, prior to the issuance of any shares of Stock to the Optionee by the Company, an agreement (in such form as the Committee may specify) in which the Optionee, among other things, represents, warrants and agrees that the Optionee is purchasing or acquiring the shares acquired under this Agreement for the Optionee's own account, for investment only and not with a view to the resale or distribution thereof, that the Optionee has knowledge and experience in financial and business matters, that the Optionee is capable of evaluating the merits and risks of owning any shares of Stock purchased or acquired under this Agreement, that the Optionee is a person who is able to bear the economic risk of such ownership and that any subsequent offer for sale or distribution of any of such shares shall be made only pursuant to (i) a registration statement on an appropriate form under the Securities Act, which registration statement has become effective and is current with regard to the shares being offered or sold, or (ii) a specific exemption from the registration requirements of the Securities Act, it being understood that to the extent any such exemption is claimed, the Optionee shall, prior to any offer for sale or sale of such shares, obtain a prior favorable written opinion, in form and substance satisfactory to the Committee, from counsel for or approved by the Committee, as to the applicability of such exemption thereto. 4. Disposition of Stock. In addition to the restrictions set forth in Section 3, no share of Stock received by the Optionee upon exercise of the Option (or any interest or right in such shares) can be sold, assigned, pledged or transferred in any manner except as permitted by the Stockholders Agreement. 5. Optionee Bound by Plan; Stockholders Agreement. The Optionee hereby acknowledges receipt of a copy of the Plan and the Stockholders Agreement and agrees to be bound by all of the terms and provisions of each thereof, including the terms and provisions adopted after the granting of the Option but prior to the complete exercise hereof, subject to the last paragraph of Section 16 of the Plan as in effect on the date hereof. 6. Notices. Any notice hereunder to the Company shall be addressed to it at 390 South Woods Mill Road, Suite 350, Chesterfield, Missouri 63017, Attention: Chief Financial Officer, and any notice hereunder to the Optionee, shall be addressed to him at __________________________________, Attention: ____________, subject to the right of either party to designate at any time hereafter in writing some other address. 7. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Delaware applicable to contracts executed and to be performed entirely within such state, without regard to the conflict of law provisions thereof. 8. Severability. If any of the provisions of this Agreement should be deemed unenforceable, the remaining provisions shall remain in full force and effect. 9. Modification. Except as otherwise permitted by the Plan, this Agreement may not be modified or amended, nor may any provision hereof be waived, in any way except in writing signed by the party against whom enforcement thereof is sought. 10. Counterparts. This Agreement has been executed in two counterparts, each of which shall constitute one and the same instrument. IN WITNESS WHEREOF, Outsourcing Solutions Inc. has caused this Agreement to be executed by a duly authorized officer and the Optionee has executed this Agreement, both as of the day and year first above written. OUTSOURCING SOLUTIONS INC. By__________________________ Name: Timothy G. Beffa Title: President & Chief Executive Officer OPTIONEE__________________________
Schedule I NOTATIONS AS TO PARTIAL EXERCISE ====================== ==================== ==================== ==================== ==================== Date of Number of Shares Balance of Shares Authorized Notation Exercise of Stock Purchased of Stock on Option Signature Date - ---------------------- -------------------- -------------------- -------------------- -------------------- - ---------------------- -------------------- -------------------- -------------------- -------------------- - ---------------------- -------------------- -------------------- -------------------- -------------------- - ---------------------- -------------------- -------------------- -------------------- -------------------- - ---------------------- -------------------- -------------------- -------------------- -------------------- - ---------------------- -------------------- -------------------- -------------------- -------------------- - ---------------------- -------------------- -------------------- -------------------- -------------------- - ---------------------- -------------------- -------------------- -------------------- -------------------- - ---------------------- -------------------- -------------------- -------------------- -------------------- ====================== ==================== ==================== ==================== ====================
EX-27 6 0006.txt FDS -- OUTSOUCING SOLUTIONS INC.
5 Note: This schedule contains summary financial information extracted from the Form 10-Q for the Quarter Ended June 30, 2000 and is qualified in its entirety by reference to such financial statements. 0001027574 Outsourcing Solutions Inc. 1,000 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 36,768 0 56,423 559 0 0 92,804 48,313 624,130 0 0 94,323 0 96 0 624,130 0 270,623 0 249,460 0 0 29,452 (8,289) 294 (8,583) 0 0 0 (8,583) 0 0
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