EXHIBIT 10.3AMENDED AND RESTATED EXCLUSIVITY AGREEMENT

 

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                                                                    EXHIBIT 10.3

 

 

                              AMENDED AND RESTATED

                              EXCLUSIVITY AGREEMENT

 

 

         This Amended and Restated Exclusivity Agreement is made and entered

into as of June 30, 2005, and amends and restates in its entirety that certain

Letter Agreement dated August 19, 2002 (the "Original Agreement") by and between

CFSC Capital Corp. XXXIV, a Delaware corporation ("Lender"), and NCOP Lakes,

Inc., a Nevada corporation ("Lakes"), NCO Financial Systems, Inc., a Delaware

corporation ("Servicer"), NCO Portfolio Management, Inc., a Delaware corporation

("Parent"), and NCO Group, Inc., a Pennsylvania corporation ("NCOG"). Also

joining in this Agreement are NCOP Capital, Inc., a Nevada corporation ("NCOP

Capital"), and NCOP Capital I, LLC, a Nevada limited liability company ("NCOP

I"), which have previously acknowledged and agreed to be bound by the terms of

the Original Agreement. Additional entities may join in this Amended and

Restated Exclusivity Agreement as provided herein.

 

         Lender has from time to time entered into Credit Agreements

(collectively, the "Credit Agreements") with Lakes, NCOP Capital and NCOP I

(collectively, the "Borrowers"). Borrowers are wholly owned subsidiaries of

Parent. Additional affiliates of Parent may enter into additional Credit

Agreements in the future as contemplated hereby, each of which shall be

considered a Credit Agreement for the purposes hereof. Affiliates of Lender

(collectively the "Cargill Venturers") may enter into joint investment

arrangements (to be negotiated consistent with the terms set forth on Exhibit A)

(collectively "Joint Venture Agreements" or "Joint Ventures") with affiliates of

Parent (collectively the "NCO Venturers") for the purpose of acquiring interests

in certain classes of assets described in items 1, 3 and 4 on Exhibit A attached

hereto. (The Credit Agreements and Joint Venture Agreements are collectively

referred to herein as "Finance Agreements".)

 

         1. In order to induce Lender and the Cargill Venturers to make loans

under the Credit Agreements and investments under the Joint Venture Agreements

and as a condition precedent to such loans and investments, the Borrowers, the

Parent, the Servicer and NCOG (collectively, the Borrowers, the Parent, the

Servicer and NCOG are herein called the "Grantors"), on behalf of themselves and

on behalf of all parties, whether now existing or subsequently formed, including

any existing or future NCO Venturers, which are related to, controlling, or

controlled by, or under common control with any one or more of the Grantors

(either through financial investment or management responsibility), or any

member or equity holder of any Grantor which holds fifty percent (50%) or more

of the membership or other equity interests in such Grantor (collectively, the

"Affiliated Parties"), hereby grant to the Lender or the Cargill Venturers,

pursuant to the terms and conditions of this Agreement, the exclusive right to

finance (under the terms of the Credit Agreements) or joint venture (under the

terms of the Joint Venture Agreements) debt obligations of the following classes

(collectively, the "Obligations") to be acquired by any of the Grantors or any

Affiliated Party at any time from and after the date hereof to and including

June 30, 2009 or such later date as the parties hereto may subsequently

designate in writing (the "Termination Date"). "Obligations" shall include

portfolios of debt of the following types:

 

 

 

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            (a) US-based consumer debt with a purchase price equal to or greater

         than $1,000,000.

 

            (b) Non- US-based consumer debt.

 

            (c) Portfolios of payments due for health-care goods or services.

 

         Notwithstanding anything to the contrary contained herein, the Grantors

shall not be in violation of this Agreement as a result of maintaining, renewing

or extending, or performing under, any existing joint venture arrangement

between Marlin Integrated Holding Corporation or its affiliates and NCOG and its

subsidiaries, including, without limitation, Inovision-Medclr NCOP Ventures,

LLC, Inovision-Medclr-NCOP-NF, L.L.C., Inovision-Medclr-NCOP-F, L.L.C. and

NCOP/Marlin, Inc., as such existing joint venture arrangements may be amended

from time to time, provided that such existing joint venture arrangements are

not amended to add new Obligations other than in a manner expressly permitted

hereunder.

 

 

         2. The Grantors agree, on behalf of themselves and on behalf of each

Affiliated Party, that in the event any Grantor or any Affiliated Party desires

to purchase any Obligations, such Grantor or such Affiliated Party, as

applicable, shall not purchase such Obligations until the Lender or appropriate

Cargill Venturer shall have been given the opportunity to exercise its exclusive

right to finance or invest in the purchase of such Obligations pursuant to the

terms of this Agreement and a Finance Agreement. Thereafter, the Financier (as

defined below) shall accept or reject such Finance Request (as defined below)

within 5 days in accordance with the provisions of the applicable Finance

Agreement. Failure to accept such a request within 5 days in accordance with the

provisions of the applicable Finance Agreement shall be deemed a rejection. The

economic terms pertaining to advance rates, equity participations and residual

sharing arrangements with respect to classes of transactions shall be as set

forth on Exhibit A attached hereto; provided, however, that the Lender, or the

appropriate Cargill Venturer, in its sole discretion, may agree to economic

terms more favorable to the Grantor or the Affiliated Party on a

transaction-by-transaction basis.

 

         3. In the event that any of the Grantors or any Affiliated Party

desires to purchase any Obligations, the Grantors shall cause the appropriate

Borrower or NCO Venturer (a "Purchaser") that is the proposed Purchaser to

provide to the Lender or the appropriate Cargill Venturer (a "Financier") with

respect to such Obligations a request ("Finance Request") and a related bid

package in accordance with the provisions of the applicable Finance Agreement.

Thereafter, the Financier shall accept or reject such Finance Request within 5

days in accordance with the provisions of the applicable Finance Agreement.

Failure to accept such a request within 5 days in accordance with the provisions

of the applicable Finance Agreement shall be deemed a rejection. If the

Financier accepts such Finance Request, in the case of a transaction subject to

a Credit Agreement and the Borrower is the winning bidder and elects to close on

the purchase, (i) the Borrower shall borrow thereunder in its own name and

acquire the assets therein described in its own name or (ii) the Borrower shall

request that the Lender enter into a new set of loan documents with a newly

 

 

 

 

 

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created entity owned by the owners of the Borrower (herein, a "New Borrower"),

on substantially the same terms and conditions as the loan documents

contemplated by the existing Credit Agreement for NCOP Capital or hereby and,

upon consummation of the execution and delivery of such new loan documents in

form and content acceptable to the Lender (the "New Loan Documents"),

satisfaction of all terms and conditions for borrowing thereunder, the Lender

shall permit the New Borrower to satisfy the obligations of the Grantors

hereunder with respect to such accepted Finance Request. (Upon entering into a

Credit Agreement, a New Borrower shall join in this Agreement by executing and

delivering to Lender a joinder agreement in the form of Exhibit B attached

hereto.) The Grantors shall reimburse the Lender for all costs and expenses,

including fees and disbursements of counsel to the Lender, incurred in

connection with negotiation, preparation and delivery of the New Loan Documents,

which amounts shall be due and payable upon demand of the Lender and shall not

be paid from the proceeds of assets acquired. If the Financier accepts such

Finance Request, in the case of a transaction subject to a Joint Venture

arrangement and the Joint Venture is the winning bidder and elects to close on

the purchase, (i) the appropriate Joint Venture shall acquire the assets therein

described in its own name or (ii) affiliates of Lender and Parent shall enter

into a new Joint Venture Agreement in order to form a newly created Joint

Venture (herein, a "New Joint Venture"), on substantially the same terms and

conditions contemplated by attached Exhibit A or otherwise hereby and, upon

consummation of the execution and delivery of such new Joint Venture documents

in form and content acceptable to the respective Joint Venturers (the "New Joint

Venture Documents"), satisfaction of all terms and conditions for a purchase

thereunder, the Cargill Venturer shall permit the New Joint Venturer to satisfy

the obligations of the Grantors hereunder with respect to such accepted Finance

Request. (Upon entering into a Joint Venture Agreement, a New Joint Venturer

shall join in this Agreement by executing and delivering to Lender a joinder

agreement in the form of Exhibit B attached hereto.) If the Financier rejects a

Finance Request, thereafter any Grantor or any Affiliated Party (other than an

existing Borrower or NCO Joint Venturer) may purchase such Obligations with its

own funds, funds from the NCOG's credit facilities or may obtain financing to

purchase such Obligations from another party, provided the economic terms of

such requested financing are no more favorable to such other party than those

permitted to be offered to the Financier pursuant to the Finance Request

submitted to the Financier with respect to such Obligations. A purchase

completed in accordance with the requirements of this paragraph shall be

referred to as a "Complying Purchase."

 

         4. In a circumstance where the Parent or an Affiliated Party (other

than a Borrower or existing NCO Venturer) desires to purchase Obligations

without first complying with the requirements for a Complying Purchase, such

Parent or Affiliated Party, as applicable, may do so provided that it shall:

 

            (a) notify the appropriate Lender or Cargill Venturer in writing

         prior to such purchase, which notice shall include a description of the

         Obligations to be purchased and the purchase price and estimated

         purchase expenses for such Obligations;

 

            (b) purchase such Obligations pursuant to a purchase agreement (the

         "Purchase Agreement") that is fully assignable to the appropriate

         Borrower or NCO Venturer;

 

 

 

 

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            (c) immediately offer to assign all of such purchaser's, right,

         title and interest in and to such Obligations, the Purchase Agreement

         and any UCC-1 financing statement or other security received in

         connection therewith to the appropriate Purchaser pursuant to an

         assignment agreement (the "Assignment Agreement") under which the

         Parent or such Affiliated Party shall represent and warrant that (1)

         the Parent or Affiliated Party, as applicable, has not conducted any

         collection activities outside the ordinary course of business with

         respect to the Obligations purchased under the Purchase Agreement, and

         (2) any amount paid by the Purchaser to the Parent or Affiliated Party,

         as applicable, in connection with the execution and delivery of the

         Assignment Agreement contains no administrative expense or other fee in

         favor of the Parent or Affiliated Party, as applicable, and such amount

         does not, when aggregated with all amounts still owing to the seller

         under the Purchase Agreement, exceed the purchase price and estimated

         expenses set forth in the notice in (a) above;

 

            (d) cause a Purc