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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
December 20, 1999 (December 10, 1999)
AEGIS COMMUNICATIONS GROUP, INC.
--------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-14315 75-2050538
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(State or other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
7880 BENT BRANCH DRIVE, SUITE 150, IRVING, TEXAS 75063
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(972) 830-1800
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On December 10, 1999, Aegis Communications Group, Inc. (the
"Company") completed the sale of 46,750 shares of newly issued Preferred F
senior voting convertible preferred stock ("Preferred F Shares") to Questor
Partners Fund II, L.P., a Delaware limited partnership ("Fund II"), Questor
Side-by-Side Partners II, L.P., a Delaware limited partnership (the
"Side-by-Side Fund"), and Questor Side-by-Side Partners II 3(c)(1), L.P., a
Delaware limited partnership (the "3(c)(1) Fund" and together with Fund II
and the Side-by-Side Fund, the "Questor Investors") for an aggregate purchase
price of $46,750,000. The Questor Investors obtained the funds used to
acquire the Preferred F Shares through capital contributions by their
partners. The Company used the net proceeds from the sale of the Preferred F
Shares to repay outstanding bank debt and pay transaction expenses. A copy of
the press release announcing the completion of the transaction is attached
hereto as Exhibit 99.1.
As a result of the sale of the Preferred F Shares, on an
as-converted basis and assuming a conversion price of $1.00 per share, the
Questor Investors collectively own approximately 47% of the Company's issued
and outstanding common stock and approximately 38% of the Company's fully
diluted shares outstanding. The Preferred F Shares vote on an as-converted
basis and represent approximately 47% of the voting equity stock.
Under a Stockholders Agreement with Thayer Equity Investors III,
L.P. ("Thayer Equity"), TC Co-Investors, LLC ("TCC" and together with Thayer
Equity, "Thayer") and the Company, the Questor Investors and Thayer are
required to use their best efforts to vote all of their shares to elect and
continue in office twelve directors, six of whom are nominated by the Questor
Investors and six of whom are nominated by Thayer. At the special meeting of
the Company's shareholders held on December 10, 1999, the following six
Questor nominees were elected to the Board: Henry L. Druker, Michael D.
Madden, Peter D. Fitzsimmons, Robert D. Denious, Dean Anderson and Kevin J.
Prokop. The following six Thayer nominees were also elected to the Board:
John R. Birk, Stephen A. McNeely, Edward Blank, Frederic V. Malek, Michael G.
Santry and Paul G. Stern. Because previously existing shareholders continue
to hold a majority of the issued and outstanding voting securities and
because under the terms of the Stockholders Agreement Thayer will have the
right to nominate six of twelve directors, the Company neither confirms nor
disclaims that a "change of control" has occurred for purposes of Item 1 of
Form 8-K.
Under the Series F Preferred Stock Certificate of Designation, so
long as any Preferred F Shares are outstanding, each share is entitled to
vote on all matters voted on by holders of the Company's common stock, voting
together as a single class with other shares entitled to vote thereon. With
respect to any such vote, each Preferred F Share shall have the number of
votes per share as is equal to the number of votes per share that such holder
would be entitled to cast had such holder converted his Preferred F Shares
into common stock as of the record date for such vote. For so long as there
are Preferred F Shares issued and outstanding with an aggregate investment
value of at least $15,000,000, if a majority of the holders of the Preferred
F Shares so request, then the number of directors on the Board will be
increased by two and the holders of a majority of the Preferred F Shares have
the exclusive right, voting as a single class without regard to series, to
elect
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two directors of the Company to fill such positions. Notwithstanding the
foregoing, the Questor Investors are not permitted to elect more than the
number of directors that they have the right to nominate to the Board
pursuant to the Stockholders Agreement.
So long as any of the Preferred F Shares are outstanding, the
Company cannot take the following actions without the prior approval of at
least a majority of the then outstanding Preferred F Shares:
(a) authorize, create or issue any new class or series of capital
stock or any other securities convertible into equity
securities of the Company (other than common stock) having a
preference over, or being on parity with, the Preferred F
Shares with respect to voting dividends, redemption,
liquidation or dissolution of the Company;
(b) increase or decrease (other than by redemption or conversion)
the total number of authorized Preferred F Shares;
(c) increase or decrease the par value of the Preferred F Shares;
(d) alter or change the powers, preferences or special rights of
the Preferred F Shares so as to affect them adversely;
(e) engage in certain "change of control transactions" (as defined
in the Certificate of Designation, attached hereto as Exhibit
4.1), provided that the rights of the holders of Preferred F
Shares pursuant to this provision terminate when the aggregate
investment value of all the Preferred F Shares outstanding is
less than $5 million; or
(f) declare or pay any dividend on or declare or make any other
distribution, direct or indirect, on account of other capital
stock of the Company or set apart any sum for any such
purposes.
Under the Stockholders Agreement, both the Questor Investors and
Thayer are also required to satisfy a "right of first offer" to the other
prior to a transfer of its shares to a third party and to provide each other
with certain "tag-along" rights in the event of a sale or transfer of shares
to a third party. The Questor Investors also agreed that from and after the
closing of the transaction they will use their best efforts to cause their
Board designees to abstain from voting on any Board action in connection with
the optional redemption of the Preferred F Shares. Further, Thayer agreed
that from and after the Closing they will use their best efforts to cause
their Board designees to abstain from voting on any Board action in
connection with the repayment of the Promissory Note by and among IQI, Inc.,
Ed Blank and the Blank Trust dated April 16, 1998 in the original aggregate
principal amount of $1.0 million and the Promissory Note by and between IQI,
Inc. and Thayer Equity dated April 16, 1998 in the original principal amount
of $2.0 million or the redemption or repurchase of any or all of either the
Preferred D Shares or the Preferred E Shares. Additionally, each committee of
the Board will be constituted so that the number of Questor Designees (as
defined in the Stockholders Agreement, attached hereto as Exhibit 10.4) and
Existing Stockholder Designees (as also defined in the Stockholders'
Agreement) on any such committee is as nearly as
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possible in the same proportion as the number of Questor Designees and
Existing Stockholder Designees on the entire Board.
The Stockholders Agreement and the Amended and Restated Bylaws
further provides that certain major decisions require the affirmative vote of
not less than three-fourths of the directors of the Board. These decisions
consist of the following:
1. issuing shares, including any indebtedness convertible into shares, or
any other form of equity in the Company (or any subsidiary) other than
a)granting options to Company directors or employees pursuant to any
incentive or other benefit plan adopted by the Board, b)issuing shares
of common stock pursuant to the exercise of such options and c)issuing
shares of common stock or any security, including any debt convertible
into shares of common stock, or any other form of equity in the
Company, in one or more offerings, where the aggregate purchase price
for all such issuances does not exceed $500,000.
2. adoption of any stock-based employee benefit plan by the Company.
3. incurring debt or entering into guarantees for borrowed money
(excluding trade payables) in excess of $2,500,000 in a 12-month
period.
4. selling, leasing, pledging or granting a security interest or
encumbrance in all or substantially all of the Company's or any
subsidiary of the Company's assets, except in connection with the
incurrence of indebtedness for borrowed money that does not involve a
major decision under 3 above;
5. acquiring (whether through an asset purchase, merger, equity purchase
or otherwise) any assets (excluding acquisitions of raw materials and
supplies in the ordinary course of business) having a value,
individually or in the aggregate for any series of related
transactions, in excess of $2,000,000;
6. selling or otherwise disposing of any assets (excluding sales or other
dispositions of inventory in the ordinary course of business) having a
value, individually or in the aggregate for any series of related
transactions, in excess of $2,000,000;
7. amending the by-laws or the certificate of incorporation of the
Company;
8. any "change of control transactions" (as defined therein);
9. executing or delivering any assignment for the benefit of creditors of
the Company;
10. filing any voluntary petition in bankruptcy or receivership with
respect to the Company; or
11. taking any action while there is a vacancy on the Board, including
without limitation the filling of such vacancy.
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In connection with the transaction, the Company also amended the
Rights Agreement dated December 16, 1998 between the Company and Harris Trust
& Savings Bank (the "Rights Plan") so that neither the entering into of the
purchase agreement relating to the Preferred F Shares nor any of the
transactions contemplated by such purchase agreement triggered the operation
of the Rights Plan or resulted in the distribution of separate rights
certificates, the occurrence of a "Distribution Date" or the Questor
Investors (including its affiliates) being deemed to be an "Acquiring
Person." The purchase agreement also required that the "Final Expiration
Date" be amended to coincide with the Closing so that when the Preferred F
Shares were sold, the Rights Plan terminated. Consequently, the Series D
Junior Participating Preferred Stock underlying the Rights has been
eliminated.
In connection with the transaction, because shares of the Series B
Preferred Stock (the current liquidation value of which is approximately
$150,000) remain issued and outstanding, the Series F Preferred Stock
Certificate of Designation was amended to provide that the Series F Shares
have priority and preference over the Preferred D and E Shares but are
subordinate to the Series B Shares regarding dividend and liquidation rights.
In addition, the Series D and E Preferred Stock Certificate of Designation
was amended to provide that the Series F Shares have priority over the
Preferred D and E Shares which are also subordinate to the Series B Shares
regarding dividend and liquidation rights.
Also in connection with the transaction, the Company and the
respective parties thereto also terminated the Registration Rights Agreements
dated May 4, 1998 and July 9, 1998. The registration rights represented by
these agreements were replaced by the registration rights described in the
Purchase Agreement.
The foregoing summarizes certain terms of the Stockholders
Agreement, Series F Certificate of Designation, the Bylaws and the Amendment
to the Series D and E Certificate of Designation and is qualified in its
entirety by reference to these documents, which are filed as exhibits to this
Form 8-K.
ITEM 5. OTHER EVENTS.
In connection with the transaction, the Company entered into the
Third Amended and Restated Credit Agreement dated December 10, 1999 (the
"Third Amendment") with the Bank of Nova Scotia and Credit Suisse First
Boston whereby the Company repaid approximately $37.9 million in term debt,
$3.7 million under its revolving credit commitment, $1.1 million in interest
under both the term debt and revolving credit commitment and increased its
revolving credit commitment from $30 million to $45 million. The Company also
paid approximately $.3 million in transaction fees relating to the Third
Amendment. The Company's revolving credit commitment can also be increased
under the Third Amendment by $5 million, subject to the achievement of
certain financial criteria by the Company in the fourth quarter of 1999 and
the first quarter of 2000. There is a mandatory reduction of the revolving
commitment of $5 million on June 30, 2002. The term of the Third Amendment
remains unchanged and will end on June 30, 2003.
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At the special meeting of the Company's shareholders held on December
10, 1999, in addition to approving the Questor transaction and electing
twelve directors, the shareholders approved amendments to the Company's
Certificate of Incorporation to increase the number of authorized shares of
common stock from 100,000,000 to 200,000,000, to increase the number of
shares of preferred stock from 1,000,000 to 2,000,000 and to remove the
provision relating to classification of the Board of Directors into three
separate classes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
3.1 Amendment to Certificate of Incorporation (filed herewith).
3.2 Amended and Restated Bylaws (filed herewith).
4.1 Series F Preferred Stock Certificate of Designation (filed
herewith).
4.2 Amendment to Series D& E Preferred Stock Certificate of
Designation of the Company (filed herewith).
4.3 Elimination Certificate for Series D Junior Participating
Preferred Stock (filed herewith).
10.1 Series F Senior Voting Convertible Preferred Stock Purchase
and Registration Rights Agreement dated August 25, 1999 (the
"Purchase Agreement") by and among the Company, Questor
Partners Fund II, L.P., a Delaware limited Partnership,
Questor Side-by-Side Partners II, L.P., a Delaware limited
partnership, Questor Side-by-Side Partners II 3(c)(1), L.P., a
Delaware limited partnership, Thayer Equity Investors III,
L.P., a Delaware limited partnership, TC Co-Investors, LLC, a
Delaware limited liability company, ITC Services Company,
Edward Blank, trusts created by Edward Blank as both grantor
and trustee under Article Fourth of The Edward Blank 1995
Grantor Retained Annuity Trust, dated December 29, 1995, a
trust organized under the laws of New Jersey (incorporated by
reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1999).
10.2 Amendment No. 1 to the Purchase Agreement (incorporated by
reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1999).
10.3 Amendment No. 2 to the Purchase Agreement (incorporated by
reference to the Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1999).
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10.4 Stockholders Agreement dated December 10, 1999 by and among
the Company, Questor Partners Fund II, L.P., a Delaware
limited Partnership, Questor Side-by-Side Partners II, L.P., a
Delaware limited partnership, Questor Side-by-Side Partners II
3(c)(1), L.P., a Delaware limited partnership, Thayer Equity
Investors III, L.P., a Delaware limited partnership and TC
Co-Investors, LLC, a Delaware limited liability company (filed
herewith).
10.5 Amendment to Shareholder Rights Plan dated August 25, 1999 by
and between the Company and Harris Trust & Savings Bank (filed
herewith).
10.6 Termination of Registration Rights Agreement dated July 9,
1998 (filed herewith).
10.7 Termination of Registration Rights Agreement dated May 4, 1998
(filed herewith).
10.8 Third Amended and Restated Credit Agreement dated December 10,
1999 (filed herewith).
99.1 Press Release dated December 13, 1999 (filed herewith).
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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.
Dated: December 20, 1999 AEGIS COMMUNICATIONS
GROUP, INC.
By: /s/ Matthew S. Waller
---------------------------
Matthew S. Waller
EXECUTIVE VICE PRESIDENT
AND CHIEF FINANCIAL OFFICER
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
3.1 Amendment to Amended and Restated Certificate of Incorporation (filed
herewith).
3.2 Amended and Restated Bylaws (filed herewith).
4.1 Series F Preferred Stock Certificate of Designation (filed herewith).
4.2 Amendment to Series D&E Certificate of Designation of the Company
(filed herewith).
4.3 Elimination Certificate for Series D Junior Participating Preferred
Stock (filed herewith).
10.1 Series F Senior Voting Convertible Preferred Stock Purchase and
Registration Rights Agreement dated August 25, 1999 (the "Purchase
Agreement") by and among the Company, Questor Partners Fund II, L.P., a
Delaware limited Partnership, Questor Side-by-Side Partners II, L.P., a
Delaware limited partnership, Questor Side-by-Side Partners II 3(c)(1),
L.P., a Delaware limited partnership, Thayer Equity Investors III,
L.P., a Delaware limited partnership, TC Co-Investors, LLC, a Delaware
limited liability company, ITC Services Company, Edward Blank, trusts
created by Edward Blank as both grantor and trustee under Article
Fourth of The Edward Blank 1995 Grantor Retained Annuity Trust, dated
December 29, 1995, a trust organized under the laws of New Jersey
(incorporated by reference to the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1999).
10.2 Amendment No. 1 to the Purchase Agreement (incorporated by reference to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999).
10.3 Amendment No. 2 to the Purchase Agreement (incorporated by reference to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999).
10.4 Stockholders Agreement dated December 10, 1999 by and among the
Company, Questor Partners Fund II, L.P., a Delaware limited
Partnership, Questor Side-by-Side Partners II, L.P., a Delaware limited
partnership, Questor Side-by-Side Partners II 3(c)(1), L.P., a Delaware
limited partnership, Thayer Equity Investors III, L.P., a Delaware
limited partnership and TC Co-Investors, LLC, a Delaware limited
liability company. (filed herewith).
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10.5 Amendment to Shareholder Rights Plan dated August 25, 1999 by and
between the Company and Harris Trust & Savings Bank filed herewith).
10.6 Termination of Registration Rights Agreement dated July 9, 1998 (filed
herewith).
10.7 Termination of Registration Rights Agreement dated May 4, 1998 (filed
herewith).
10.8 Third Amended and Restated Credit Agreement dated December 10, 1999
(filed herewith).
99.1 Press Release dated December 13, 1999 (filed herewith).
</TABLE>
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EXHIBIT 3.1
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION OF
AEGIS COMMUNICATIONS GROUP, INC.
Aegis Communications Group, Inc., a corporation organized and
existing under the Delaware General Corporation Law (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: that the Board of Directors of the Corporation, at a special
meeting of the Board of Directors called for such purpose, duly adopted
resolutions by unanimous vote authorizing proposed amendments to the
Certificate of Incorporation of said corporation, declaring said amendments
to be advisable, and directing that said amendments be submitted to the
shareholders of said corporation for their consideration. In applicable part,
the resolutions authorizing the amendments are as follows:
"RESOLVED, that . . . the amendment of the Company's
certificate of incorporation to (i) increase the Company's authorized
capital stock to 202,000,000 shares, comprised of 2,000,000 shares of
preferred stock and 200,000,000 shares of common stock and (ii) delete
Article Sixth to the extent that it provides for classifying the Board
of Directors into three separate classes shall, through a Certificate
of Amendment to the Restated Certificate of Incorporation, be and it
hereby is approved and adopted;
RESOLVED, that a special meeting of shareholders shall be held
at a date, and at such time and place as shall be determined by the
Company's Chairman, for the purposes of seeking shareholder approval to
. . . approve the amendments to the Certificate of Incorporation
described above . . . and that the officers of the Company, or any one
of them, are hereby authorized and directed, in the name and on behalf
of the Company, to do or cause to be done all such acts as they may
deem necessary or advisable in connection with the preparation,
execution and filing with the Securities and Exchange Commission of the
Proxy Statement, and thereafter the dissemination of the Proxy
Statement to the shareholders, and that proxies approving all matters
referred to therein be solicited; and that all such acts of such
officers that are in accordance with the purposes and intent of this
resolution, are hereby adopted, ratified and confirmed as the valid
acts of the Company . . .
RESOLVED, that each of the officers of the Company is hereby
authorized, empowered and directed to execute, verify, acknowledge,
certify, deliver and file such other agreements, instruments,
documents, and certificates, to attach to these resolutions such
additional resolutions, and to take or cause to be taken such other
actions as may be necessary, desirable, or appropriate to effect the
purposes and intentions of the foregoing resolutions."
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SECOND: that the amendment of the Certificate of Incorporation,
which would strike in its entirety Article Fourth of the Certificate of
Incorporation of the Corporation and insert in its place a new Article
Fourth, is as follows:
"FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue shall be 202,000,000 shares,
consisting of (a) 200,000,000 shares of common stock, $.01 par value
per share ("Common Stock"), and (b) 2,000,000 shares of preferred
stock, $.01 par value per share ("Preferred Stock").
A. Shares of Preferred Stock may be issued from time to time
in one or more series as authorized by the Board of Directors, each
such series to have such designations as may be fixed by the Board of
Directors prior to the issuance of any shares thereof. Each such series
shall have such voting powers, full or limited, and such designations,
preferences and relative, participating, optional or other special
rights, terms, qualifications, limitations or restrictions thereof, as
shall be stated and expressed in the Certificate of Incorporation or
any amendment thereto, or in the resolution or resolutions providing
for the issuance of such stock adopted by the Board of Directors. The
Preferred Stock of any series shall or may be, without limitation, (a)
subject to redemption at such time or times and at such price or
prices; (b) entitled to receive dividends at such rates, on such
conditions and at such times; (c) entitled to such rights upon the
dissolution of, or upon the distribution of the assets of, the
Corporation; (d) entitled to such voting rights; (e) subject to or
entitled to such preferences; (f) subject to or entitled to such
sinking fund provisions; and (g) made convertible into, or exchangeable
for, shares of any other class or classes, or any other series of the
same or any other class or classes of stock of the Corporation at such
price or prices or at such rates of exchange and with such adjustments,
as shall or may be provided, stated or expressed in the resolution or
resolutions adopted by the Board of Directors of the Corporation
providing for the issue of such series. Subject to the express terms of
any other series of Preferred Stock outstanding at the time, the Board
of Directors may increase or decrease the number of shares or alter the
designation or classify or reclassify any unissued shares of a
particular series of Preferred Stock by fixing or altering in any one
or more respects from time to time before issuing the shares any terms,
rights, restrictions and qualifications of the shares.
B. The Common Stock of the Corporation shall be subject to the
prior rights of the Preferred Stock as may be set forth in the
resolution or resolutions by the Board of Directors providing for the
issuance of the Preferred Stock. Except for such voting rights as may
be provided for in the resolution or resolutions creating one or more
series of Preferred Stock, voting rights solely shall be in the Common
Stock. Cumulative voting in any election of directors, regardless of
class or series, is hereby expressly denied.
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C. By resolutions duly adopted by the Corporation's Board of
Directors, on or prior to the date hereof, the Corporation has
designated the following: (a) 29,778 shares of Preferred Stock as
Series B Preferred Stock; (b) 231,902 shares of Preferred Stock as
Series D Preferred Stock; (c) 132,053 shares of Preferred Stock as
Series E Preferred Stock; and (d) 46,750 shares of Preferred Stock as
Series F Preferred Stock."
THIRD: that the amendment of the Certificate of Incorporation, which
would strike in its entirety Article Sixth of the Certificate of Incorporation
of the Corporation and insert in its place a new Article Sixth, is as follows:
"SIXTH: NUMBER, ELECTION AND TERMS OF DIRECTORS. Subject to the rights,
if any, of the holders of any series of Preferred Stock to elect
additional directors under circumstances specified in a Preferred Stock
designation, the number of directors of the Corporation will not be
less than two nor more than twelve and will be fixed from time to time
in the manner described in the bylaws of the Corporation. Each Director
will be elected for a one-year term and until his or her successor has
been duly elected and qualified."
FOURTH: that thereafter, shareholders of said corporation, which
hold the necessary number of shares as required by statute, duly adopted and
approved said amendments at the special meeting of the shareholders of the
Company noticed pursuant to Section 222 of the Delaware General Corporation
Law.
FIFTH: that said amendments was duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the Board of Directors of the Company has caused
this Certificate of Amendment to be executed and filed on this 10th day of
December, 1999.
AEGIS COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By: /s/ Stephen A. Mcneely
------------------------------------
Stephen A. McNeely
President and Chief Executive Officer
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EXHIBIT 3.2
AMENDED AND RESTATED BYLAWS OF
AEGIS COMMUNICATIONS GROUP, INC.
(A Delaware Corporation)
ARTICLE I
OFFICES
1.1 REGISTERED OFFICE. The registered office of the corporation
in the State of Delaware shall be 1209 Orange Street, Wilmington, Delaware
19801.
1.2 PRINCIPAL OFFICE. The principal office of the corporation
shall be in the City of Dallas, County of Dallas, Texas.
1.3 OTHER OFFICES. The corporation may also have offices at such
other places, both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation
may require.
ARTICLE II
STOCKHOLDERS
2.1 TIME AND PLACE OF MEETINGS. All meetings of the stockholders
shall be held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of meeting or in a duly executed
waiver thereof.
2.2 ANNUAL MEETING - ELECTION OF DIRECTORS. An annual meeting of
the stockholders shall be held each year at a time on the third Thursday
during the month of April to be selected by the board of directors, or at
such other date and time as may be selected by the board of directors. If
such day is a legal holiday, then the meeting shall be held on the next
secular day following. At the meeting, the stockholders shall elect directors
and transact such other business as may properly be brought before the
meeting.
2.3 SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes, described by the Act or by the articles of
incorporation, or by these bylaws, may be called by the chairman of the
board, if any, the president or secretary, and shall be called by the
chairman of the board, the president or secretary at the request in
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writing of a majority of the board of directors or the holders of twenty-five
percent (25%) or more of the shares entitled to vote at such meeting. Such
request shall state the purpose or purposes of the proposed meeting.
Business transacted at any special meeting of stockholders shall be limited
to the purposes stated in the notice of the meeting.
2.4 NOTICES. Written or printed notice of the annual or any
special meeting stating the place, day, and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called, shall be delivered to each stockholder of record entitled to vote not
less than ten nor more than fifty days before the date of the meeting, either
personally or by mail, by or at the direction of the chairman of the board,
the president, the secretary or the officer or person calling the meeting.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail addressed to the stockholder at the address as it appears
on the stock transfer books of the corporation, with postage thereon prepaid.
2.5 VOTING LIST. The officer or agent who has charge of the stock
transfer books of the corporation shall make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote
at said meeting or any adjournment thereof, arranged in alphabetical order,
with address of and the number of voting shares held by each. Such list shall
be kept on file at the principal office of the corporation for a period of
ten days prior to such meeting and shall be subject to inspection by any
stockholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be
subject to the inspection of any stockholder during the whole time of the
meeting. The original stock transfer books shall be prima facie evidence as
to who are stockholders entitled to examine such list or transfer books and
to vote at any meeting of stockholders.
2.6 QUORUM. The holders of a majority of the issued and
outstanding stock entitled to vote thereat, present in person or represented
by proxy, shall be requisite and shall constitute a quorum at all meetings of
the stockholders for the transaction of business except as otherwise provided
by statute, by the certificate of incorporation, or by these bylaws. If a
quorum is not present or represented at a meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum is present or
represented. At such adjourned meeting at which a quorum is present or
represented, any business may be transacted which might have been transacted
at the meeting as originally notified.
2.7 MAJORITY VOTE; WITHDRAWAL OF QUORUM. When a quorum is present
at any meeting, the vote of the holders of a majority of the shares having
voting
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power, present in person or represented by proxy, shall decide any question
brought before such meeting, unless the question is one upon which, by
express provision of the statutes or of the certificate of incorporation or
of these bylaws, a different vote is required in which case such express
provision shall govern and control the decision of such question. The
stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
2.8 VOTING. (a) Each outstanding share entitled to vote thereon,
regardless of class, shall be entitled to one vote on each matter submitted
to a vote at a meeting of stockholders, except to the extent that the voting
rights of the shares of any class or series are otherwise specified in the
certificate of incorporation. At any meeting of the stockholders, every
stockholder having the right to vote may vote either in person, or by proxy
executed in writing by the stockholder or by his duly authorized attorney in
fact. No proxy shall be valid after eleven months from the date of its
execution, unless otherwise provided in the proxy or by written agreement.
Each proxy shall be revocable unless expressly provided therein or by written
agreement to be irrevocable and unless otherwise made irrevocable by law.
Each proxy shall be filed with the secretary of the corporation prior to or
at the time of the meeting.
(b) Treasury shares, shares of stock owned by another corporation
the majority of the voting stock of which is owned or controlled by this
corporation, and shares of stock held by this corporation in its fiduciary
capacity shall not be voted, directly or indirectly, at any meeting and shall
not be counted in determining the total number of outstanding shares at any
given time.
(c) Directors shall be elected by plurality vote.
(d) Shares standing in the name of another corporation, domestic
or foreign, may be voted on by such officer, agent, or proxy as the bylaws of
such corporation may authorize or, in the absence of such authorization, as
the board of directors of such corporation may determine.
(e) Shares held by an administrator, guardian or conservator may
be voted by him so long as such shares forming part of an estate are in the
possession and forming a part of the estate being served by him, either in
person or by proxy, without a transfer of such shares into his name. Shares
standing in the name of a trustee maybe voted by him, either in person or by
proxy, but no trustee shall be entitled to vote shares held by him without a
transfer of such shares into his name as trustee.
<PAGE>
(f) Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his name if
authority so to be contained in an appropriate order of the court by which
such receiver was appointed.
(g) A stockholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the name of the
pledges, and thereafter the pledges shall be entitled to vote the shares so
transferred.
(h) Voting on any question or in any election at a meeting may
be by voice vote or show of hands unless the presiding officer shall order,
or the holders of at least ten percent of the shares entitled to vote shall
demand, that voting be by written ballot.
2.9 RECORD DATE; CLOSING TRANSFER BOOKS. The board of directors
may fix in advance a record date for the purpose of determining stockholders
entitled to notice of or to vote at a meeting of the stockholders, the record
date to be not less than ten (10) no more than sixty (60) days prior to the
meeting. In the absence of action by the board of directors, the date upon
which the notice of the meeting is mailed shall be the record date.
2.10 ACTION WITHOUT MEETING. Any action which may be taken at any
annual or special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting
forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
ARTICLE III
DIRECTORS
3.1 MANAGEMENT. The business and affairs of the corporation shall
be managed by the board of directors who may exercise all such powers of the
corporation and do all such lawful acts and things as are not (by statute or
by the articles of incorporation or by these bylaws) directed or required to
be exercised or done by the stockholders.
3.2 NUMBER; QUALIFICATION; ELECTION; TERM. The board of directors
shall consist of not fewer than two nor more than twelve directors as shall be
<PAGE>
fixed from time to time by resolution of the board of directors or by vote of
the stockholders. The first board after the adoption of these amended and
restated bylaws shall consist of twelve directors. At the next annual meeting
of stockholders following the occurrence of the First Break Point (as defined
in the Stockholders' Agreement), the number of directors on the board of
directors shall be reduced from twelve members to nine members. Directors
need not be residents of the State of Delaware or stockholders of the
corporation. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Bylaws 3.3, 3.4 and 3.6. Each director
shall hold office until his successor shall be elected and shall qualify.
3.3 MAJOR DECISIONS. (a) Any Major Decision (as defined below)
shall be approved by the affirmative vote of not less than three fourths (or
in the event that the number of directors constituting the entire board is
reduced to nine, by the affirmative vote of not less than two thirds) of the
directors then serving on the board.
(b) The term "MAJOR DECISION" means any decision by the board with
respect to any of the following matters (but, for the avoidance of doubt,
shall exclude any Board action in connection with either (W) an optional
redemption pursuant to Section 5(b) of the Series F Preferred Stock
Certificate of Designation of the Company, (X) the repayment of the
Promissory Note by and among IQI, Inc. Edward Blank, and The Edward Blank
1995 Grantor Retained Annuity Trust dated April 16, 1998 in the original
aggregate principal amount of $1.0 million, (Y) the repayment of the
Promissory Note by and between IQI, Inc. and Thayer Equity Investors III,
L.P. dated April 16, 1998 in the original principal amount of $2.0 million,
or (Z) the redemption or repurchase of any or all of the Series D Preferred
Stock or the Series E Preferred Stock):
(i) issuing any shares or any security, including any
indebtedness, convertible into shares, or any other form of equity
in the corporation or any subsidiary of the corporation, other than
(i) granting options to directors or employees of the corporation
pursuant to any incentive or other benefit plan adopted by the
board, (ii) issuing shares of common stock pursuant to the exercise
of such options, and (iii) issuing shares of common stock or any
security, including any indebtedness, convertible into shares of
common stock, or any other form of equity in the corporation, in
one or more offerings (excluding any issuances referred to in (i)
or (ii) above) where the aggregate purchase price for all such
issuances does not exceed $500,000, provided that any such issuance
shall be sold at Market Value (as hereinafter defined);
(ii) adoption of any stock-based employee benefit plan;
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(iii) incurring indebtedness or entering into guarantees for
borrowed money (excluding trade payables incurred in the ordinary
course of business) in excess of $2,500,000 in any twelve
consecutive month period;
(iv) selling, leasing, pledging or granting a security interest
or encumbrance in all or substantially all of the corporation's or
any subsidiary of the corporation's assets, except in connection
with the incurrence of indebtedness for borrowed money that does
not involve a Major Decision under the preceding paragraph;
(v) acquiring (whether through an asset purchase, merger,
equity purchase or otherwise) any assets (excluding acquisitions of
raw materials and supplies in the ordinary course of business)
having a value, individually or in the aggregate for any series of
related transactions, in excess of $2,000,000;
(vi) selling or otherwise disposing of any assets (excluding sales
or other dispositions of inventory in the ordinary course of business)
having a value, individually or in the aggregate for any series of
related transactions, in excess of $2,000,000;
(vii) amending these bylaws or the articles of incorporation of the
corporation;
(viii) any Change in Control Transaction (as hereinafter defined);
(ix) executing or delivering any assignment for the benefit of
creditors of the corporation;
(x) filing any voluntary petition in bankruptcy or receivership
with respect to the corporation; or
(xi) taking any action while there is a vacancy on the board of
directors, including without limitation the filling of such vacancy.
3.4 CHANGE IN NUMBER. Subject to Bylaw 3.3(xi), the number of
directors may be increased or decreased from time to time by resolution of
the board of directors at any meeting, but no decrease shall have the effect
of shortening the term of any incumbent director.
3.5 REMOVAL. Any director may be removed with or without cause at
any special or annual meeting of stockholders, by the affirmative vote of a
majority in number
<PAGE>
of shares of the stockholders present in person or by proxy at such meeting
and entitled to vote for the election of such director if notice of intention
to act upon such matter shall have been given in the notice calling such
meeting.
3.6 VACANCIES. Any vacancy occurring in the board of directors
(by death, resignation, removal or otherwise) may be filled by affirmative
vote of the directors then in office pursuant to Bylaw 3.3(xi). A director
elected to fill such a vacancy shall be elected for the unexpired term of his
predecessor in office.
3.7 COMPENSATION. By resolution of the board of directors, the
directors may be paid their expenses, if any, of attendance at each meeting
of the board of directors and may be paid a fixed sum of attendance at each
meeting of the board of directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may, by resolution of the board of directors, be allowed like
compensation for attending committee meetings.
3.8 MEETINGS OF THE BOARD OF DIRECTORS.
(a) PLACE. Meetings of the board of directors of the
corporation, regular or special, may be held either within or without the
State of Delaware.
(b) REGULAR MEETINGS. Regular meetings of the board of
directors may be held without notice at such time and at such place as shall
from time to time be determined by the board by resolution.
(c) SPECIAL MEETINGS. Special meetings of the board of
directors may be called by or at the request of the chairman of the board,
the president or the secretary and shall be called by the secretary on the
written request of two of the incumbent directors. The person or persons
authorized to call special meetings of the board of directors may fix the
place for holding any special meeting of the board of directors called by
them. Notice of any special meeting shall be given at least twenty-four (24)
hours previous thereto if given either personally (including written notice
delivered personally or notice by telephone) or by fax or telegram, and at
least seventy-two (72) hours previous thereto if given by written notice
mailed to each director at the address of his business and residence. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the board of directors need be specified in the notice or waiver
of notice of such meeting. If mailed, the notice shall be deemed to be
delivered when deposited in the United States mail addressed, in the
above-specified manner, with postage thereon prepaid. If notice be given by
fax or telegram, such notice shall be deemed to be delivered when the fax or
telegram is delivered to the telegraph company.
<PAGE>
Any director may waive notice of any meeting, as provided in By-law 4.2.
(d) QUORUM: MAJORITY VOTE. At all meetings of the board of
directors a majority of the number of directors fixed by these bylaws shall
constitute a quorum for the transaction of business. The act of a majority of
the directors present at any meeting at which a quorum is present shall be
the act of the board of directors, except as otherwise specifically provided
by statute or by the certificate of incorporation or by these bylaws.
(e) PROCEDURE. The board of directors shall keep regular
minutes of its proceedings. The minutes shall be placed in the minute book of
the corporation.
3.9 ACTION WITHOUT MEETING. Any action required or permitted to
be taken at a meeting of the board of directors may be taken without a
meeting if a consent in writing, setting forth the action so taken, is signed
by all the members of the board of directors. Such consent shall have the
same force and effect as a unanimous vote at a meeting. The signed consent,
or a signed copy, shall be placed in the minute book.
3.10 TELEPHONE AND COMMUNICATION EQUIPMENT MEETINGS.
Stockholders, members of the board of directors, and members of any committee
of the board of directors may participate in meetings by means of conference
telephone or other communications equipment to the full extent permissible by
Section 141(i) of the General Corporation Law of the State of Delaware.
ARTICLE IV
NOTICES
4.1 METHOD. Whenever by statute or the certificate of
incorporation or these bylaws, notice is required to be given to director or
stockholder, and no provision is made as to how the notice shall be given, it
shall not be construed to mean personal notice, but any such notice may be
given (A) in writing, by mail, postage prepaid, addressed to the director or
stockholder at the address appearing on the books of the corporation, or (B)
in any other method permitted by law. Any notice required or permitted to be
given by mail shall be deemed given at the time when the same is thus
deposited in the United States mails.
4.2 WAIVER. Whenever, by statute or the articles of incorporation
or these bylaws, notice is required to be given to a stockholder or director,
a waiver thereof in
<PAGE>
writing signed by the person or persons entitled to such notice, whether
before or after the time stated in such notice, shall be equivalent to the
giving of such notice. Attendance of a director at a meeting shall constitute
a waiver of notice of such meeting, except where a director attends for the
express purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
ARTICLE V
COMMITTEES OF THE BOARD OF DIRECTORS
5.1 DESIGNATION. The board of directors may by resolution of a
majority of the whole board, designate an executive committee, and one or
more other committees including an audit committee, a compensation committee,
and any such other special committees as the board shall deem advisable.
5.2 NUMBER, QUALIFICATION; TERM. Each committee shall consist of
one or more directors who will serve at the pleasure of the board of
directors. Each committee of the board shall be constituted so that the
number of Questor Designees (as such term is defined in the Stockholders'
Agreement) and Existing Stockholder Designees (as such term is defined in the
Stockholders' Agreement) on any such committee is as nearly as possible in
the same proportion as the number of Questor Designees and Existing
Stockholder Designees on the entire board. The compensation committee, if
any, may include the chief accounting and financial officer of the
corporation provided a majority of the committee are not officers or
full-time employees of the corporation.
5.3 AUTHORITY OF COMMITTEES.
(a) THE EXECUTIVE COMMITTEE. The executive committee, to the
extent provided in such resolution, shall have and may exercise all of the
authority of the board of directors in the management of the business and
affairs of the corporation, except where action of the full board of
directors is required by statute, the certificate of incorporation or these
bylaws, and shall have power to authorize the seal of the corporation to be
affixed to all papers which may require it. Without limiting the general
authority of the executive committee, it shall have the power subject to
Bylaw 3.3:
(1) to appoint officers and agents of the corporation and determine
their salaries (subject to recommendations of the compensation
committee, if any).
<PAGE>
(2) to borrow money, and issue bonds, notes or other obligations and
evidences of indebtedness therefor.
(3) to authorize the corporate seal to be affixed to documents of the
corporation.
(4) to determine questions of general policy with regard to the
business of the corporation.
(5) to make recommendations as to declaration of dividends.
(b) AUDIT COMMITTEE. The audit committee, if any, shall nominate
the independent public accountants to report on the financial statements of
the corporation, and shall have such other powers, duties and authority as
shall be set forth in the resolutions of the board of directors appointing
the committee.
(c) COMPENSATION COMMITTEE. The compensation committee, if any,
shall have the responsibility of reviewing the remuneration-of the officers
and key employees of the corporation including stock option and stock
purchase rights and such other powers, duties and authority as shall be set
forth in the resolutions of the board of directors appointing the committee.
(d) OTHER COMMITTEES. Any other committee or committees
appointed by the directors shall have and may exercise such powers of the
board of directors in the management of the business and affairs of the
corporation as shall be provided in the resolution(s) creating the committee.
Such committee or committees shall have such name or names as may be
determined from time to time by resolution of the board of directors.
5.4 CHANGE IN NUMBER. Subject to Bylaw 5.2, the number of members
of any committee may be increased or decreased from time to time by
resolution adopted by a majority of the whole board of directors.
5.5 REMOVAL. Subject to Bylaw 5.2, any member of a committee may
be removed by the board of directors by the affirmative vote of a majority of
the whole board, whenever in its judgment the best interests of the
corporation will be served thereby.
5.6 VACANCIES. A vacancy occurring in any committee (by death,
resignation, removal or otherwise) may be filled by the board of directors in
the manner
<PAGE>
provided for original designation in Bylaw 5.2.
5.7 MEETINGS. Time, place and notice (if any) of executive
committee meetings shall be determined by the committee.
5.8 QUORUM; MAJORITY VOTE. At meetings of each committee, all
members designated by the board of directors shall constitute a quorum for
the transaction of business. The act of a majority of the members present at
any meeting at which a quorum is present shall be the act of the committee,
except as otherwise specifically provided by statute or by the articles of
incorporation or by these bylaws. If a quorum is not present at a meeting of
the committee, the members present thereat may adjourn the meeting from time
to time, without notice other than an announcement at the meeting, until a
quorum is present.
5.9 COMPENSATION. See Bylaw 3.7.
5.10 PROCEDURE. Each committee shall keep regular minutes of its
proceedings and report the same to the board of directors when required. The
minutes of the proceedings of each committee shall be placed in the minute
book of the corporation.
5.11 ACTION WITHOUT MEETING. Any action required or permitted to
be taken at a meeting of any committee may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all the
members of the committee. Such consent shall have the same force and effect
as a unanimous vote at a meeting. The signed consent, or a signed copy, shall
be placed in the minute book.
5.12 TELEPHONE AND COMMUNICATION. Meetings of committees may be
held by telephone as provided by Bylaw 3.10.
5.13 RESPONSIBILITY. The designation of a committee and the
delegation of authority to it shall not operate to relieve the board of
directors, or any member thereof, of any responsibility imposed upon it or
him by law.
ARTICLE VI
OFFICERS AND AGENTS
6.1 NUMBER; QUALIFICATION; ELECTION; TERM.
(a) The corporation shall have:
<PAGE>
(1) A president, a vice president, a secretary and a treasurer, and
(2) Such other officers (including a chairman of the board, an
executive vice president and additional vice presidents) and assistant
officers and agents as the board of directors may deem necessary.
(b) Officers named in Bylaw 6.1(a)(1) shall be elected by the
board of directors on the expiration of an officer's term or whenever a
vacancy exists. Officers and agents named in Bylaw 6. l(a)(2) may be elected
by the board at any meeting.
(c) Unless otherwise specified by the board at the time of
election or appointment, or in an employment contract approved by the board,
each officer's and agent's term shall end at the first meeting of directors
after the next annual meeting of stockholders. He shall serve until the end
of his term or, if earlier, his death, resignation, or removal.
(d) Any two or more offices may be held by the same person.
6.2 REMOVAL. Any officer or agent elected or appointed by the
board of directors may be removed by the board of directors whenever in its
judgment the best interests of the corporation will be served thereby. Such
removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent shall not
of itself create contract rights.
6.3 VACANCIES. Any vacancy occurring in any office of the
corporation (by death, resignation, removal or otherwise) may be filed by the
board of directors.
6.4 AUTHORITY. Officers and agents shall have such authority and
perform such duties in the management of the corporation as are provided in
these bylaws or as may be determined by resolution of the board of directors
not inconsistent with these bylaws.
6.5 COMPENSATION. The compensation of officers and agents shall
be fixed from time to time by the board of directors.
6.6 CHAIRMAN OF THE BOARD. If there be a chairman of the board of
directors, he shall be chosen from among the directors. He shall have the
power to call special meetings of the stockholders and of the directors for
any purpose or purposes, and he shall preside at all meetings of the
stockholders and of the board of directors, unless he
<PAGE>
shall be absent or unless he shall, at his option, designate the president to
preside in his stead at some particular meeting. The chairman of the board
shall have all of the powers granted by the bylaws to the president including
the power to make and sign contracts and agreements in the name and on behalf
of the corporation. He shall, in general, have supervisory power over the
president, the other officers and the business activities of the corporation,
subject to the approval or review of the board of directors.
6.7 PRESIDENT. If there be a chairman of the board of directors,
the powers and duties of the president shall be subject to the powers and
duties of the chairman of the board of directors. If there be no chairman of
the board, the president shall have all the powers and duties provided for in
Bylaw 6.6 as well as those provided in this Bylaw 6.7. The president, who
need not be chosen from among the directors, shall, subject to the powers
conferred upon the chairman of the board under Bylaw 6.6 of this Article, be
the chief executive officer of the corporation; preside at all meetings of
the stockholders and the board of directors, shall have general and active
management of the business and affairs of the corporation, and shall see that
all orders and resolutions of the board are carried into effect. He shall
perform such other duties and have such other authority and powers as the
board of directors may from time to time prescribe.
6.8 EXECUTIVE VICE PRESIDENT. If there be an executive vice
president, he shall be the ranking vice president and shall be the chief
operating officer of the corporation unless the board of directors shall
designate another officer as chief operating officer. In the absence or
disability of the president, the executive vice president shall perform all
the duties, exercise the powers and assume all responsibilities of the
president. He shall also generally assist the president and exercise any
other powers and perform such other duties as are delegated to him by the
president and as the board of directors shall prescribe.
6.9 VICE PRESIDENTS. The vice presidents in the order of their
seniority, unless otherwise determined by the board of directors, shall, in
the absence or disability of the president, perform the duties and have the
authority and powers as the board of directors may from time to time
prescribe or as the president may from time to time delegate.
6.10 SECRETARY.
(a) The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose and shall
perform like duties for the executive committee when required.
<PAGE>
(b) He shall give, or cause to be given, notice of all meetings
of the stockholders and special meetings of the board of directors.
(c) He shall keep in safe custody the seal of the corporation
and, when authorized by the board of directors or the executive committee,
affix the same to any instrument requiring it and, when so affixed, it shall
be attested by his signature or by the signature of the treasurer or an
assistant secretary, which may be facsimile.
(d) He shall be under the supervision of the president. He shall
perform such other duties and have such other authority and powers as the
board of directors may from time to time prescribe or as the president may
from time to time delegate.
6.11 ASSISTANT SECRETARIES. The assistant secretaries in the
order of their seniority, unless otherwise determined by the board of
directors, shall, in the absence or disability of the secretary, perform the
duties and have the authority and exercise the powers of the secretary. They
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe or as the president may from time
to time delegate.
6.12 TREASURER.
(a) The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements of the corporation and shall deposit all monies and other
valuable effects in the name and to the credit of the corporation in such
depositories as may be designated by the board of directors.
(b) He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and directors, at the
regular meetings of the board, or whenever they may require it, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
(c) He shall perform such other duties and have such other
authority and powers as the board of directors may from time to time
prescribe or as the president may from time to time delegate.
6.13 ASSISTANT TREASURERS. The assistant treasurers in the order
of their seniority, unless otherwise determined by the board of directors,
shall, in the absence or disability of the treasurer, perform the duties and
have the authority and exercise the powers of the treasurer. They shall
perform such other -duties and have such other powers
<PAGE>
as the board of directors may from time to time prescribe or the president
may from time to time delegate.
6.14 BONDING OF OFFICERS. If required by the board of directors,
all or certain officers shall give the corporation a bond in such form, in
such sum, and with such surety or sureties as shall be satisfactory to the
board for the faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control belonging to
the corporation.
ARTICLE VII
CERTIFICATES AND STOCKHOLDERS
7.1 CERTIFICATES. The corporation shall deliver certificates
representing all shares to which stockholders are entitled. Certificates
shall be consecutively numbered and shall be entered in the books of the
corporation as they are issued. Each certificate shall state on the face
thereof the holder's name, the number and class of shares, the par value of
shares or a statement that such shares are without par value, and such other
matters as may be required by law. They shall be signed by the president or a
vice president and such other officer or officers as the board of directors
shall designate, and may be sealed with the seal of the corporation or a
facsimile thereof. The signature of any such officer may be facsimile. In
case any officer who has signed, or whose facsimile signature has been used
on such certificate, shall cease to be such officer of the corporation before
such certificate has been delivered by the corporation or its agents, such
certificate may nevertheless be issued and delivered with the same effect as
if he were still such officer at the date of issue.
7.2 PAYMENT FOR SHARES.
(1) KIND. The consideration for the issuance of shares shall
consist of money paid, labor done (including services actually performed for
the corporation), or property (tangible or intangible) actually received.
Neither promissory notes nor the promise of future services shall constitute
payment for shares.
(2) VALUATION. In the absence of fraud in the transaction, the
judgment of the board of directors as to the value of consideration received
shall be conclusive.
<PAGE>
(3) EFFECT. When consideration, as fixed by law, has been paid,
the shares shall be deemed to have been issued and shall be considered fully
paid and non-assessable.
(4) ALLOCATION OF CONSIDERATION. The consideration received for
shares shall be allocated by the board of directors, in accordance with law,
between stated capital and capital surplus accounts.
7.3 SUBSCRIPTIONS. Unless otherwise provided in the subscription
agreement, subscription of shares, whether made before or after organization
of the corporation, shall be paid in full at such time or in such
installments and at such times as shall be determined by the board of
directors. Any call made by the board of directors for payment on
subscriptions shall be uniform as to all shares of the same series, as the
case may be. In case of default in the payment on any installment or call
when payment is due, the corporation may proceed to collect the amount due in
the same manner as any debt due to the corporation.
7.4 LIEN. For any indebtedness of a stockholder to the
corporation, the corporation shall have a first and prior lien on all shares
of its stock owned by him and on all dividends or other distributions
declared thereon.
7.5 LOST, STOLEN OR DESTROYED CERTIFICATES. The corporation shall
issue a new certificate in place of any certificate for shares previously
issued if the registered owner of the certificate:
(a) CLAIM. Makes proof in affidavit form that it has been lost or
wrongfully taken or destroyed; and
(b) TIMELY REQUEST. Requests the issuance of a new certificate
before the corporation has notice that the certificate has been
acquired by a purchaser for value in good faith and without notice
of an adverse claim; and
(c) BOND. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the corporation may
direct, to indemnify the corporation (and its transfer agent and
registrar, if any) against any claim that may be made on account of
the alleged loss, destruction, or theft of the certificate; and
(d) OTHER REQUIREMENT. Satisfies any other reasonable
requirements imposed by the corporation. When a certificate has
been lost, apparently destroyed or
<PAGE>
wrongfully taken, and the holder of record fails to notify the
corporation within a reasonable time after he has notice of it, and
the corporation registers a transfer of the shares represented by
the certificate before receiving such notification, the holder of
record is precluded from making any claim against the corporation
for the transfer or for a new certificate.
7.6 REGISTRATION OF TRANSFER. The corporation shall register the
transfer of a certificate for shares presented to it for transfer if:
(a) ENDORSEMENT. The certificate is properly endorsed by the
registered owner or by his duly authorized attorney; and
(b) GUARANTY AND EFFECTIVENESS OF SIGNATURE. The signature of
such person has been guaranteed by a national banking association
or member of the New York Stock Exchange, and reasonable assurance
is given that such endorsements are effective; and
(c) ADVERSE CLAIMS. The corporation has no notice of an adverse
claim or has discharged any duty to inquire into such a claim; and
(d) COLLECTION OF TAXES. Any applicable law relating to the
collection of taxes has been complied with; and
(e) STOP TRANSFER ORDERS AND LEGENDS. The corporation has not
issued a stop-transfer order or placed a legend on such certificate
restricting transfer; or, if legended, the registered owner has
complied with the conditions for transfer provided for in the
legend.
7.7 REGISTERED OWNER. Prior to due presentment for registration
of transfer of a certificate for shares, the corporation may treat the
registered owner as the person exclusively entitled to vote, to receive
notices and otherwise to exercise all the rights and powers of a stockholder.
ARTICLE VIII
INDEMNIFICATION; INSURANCE
8.1 PERSONS. The corporation shall indemnify, to the extent
provided in Bylaws 8.1, 8.2 and 8.4:
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(a) Any person who is or was director, officer, agent or employee
of the corporation, and
(b) Any person who serves or served at the corporation's request
as a director, officer, agent, employee, partner or trustee of
another corporation or of a partnership, joint venture, trust or
other enterprise.
8.2 EXTENT. Derivative Suits. In case of a suit by or in the
right of the corporation named in Bylaw 8.1 by reason of his holding a
position named in Bylaw 8.1, the corporation shall indemnify him if he
satisfies the standard in Bylaw 8.3 for expenses (including attorney's fees
but excluding amounts paid in settlement) actually and reasonably incurred by
him in connection with the defense or settlement of the suit.
8.3 STANDARD -- DERIVATIVE SUITS. In case of a suit by or in the
right of the corporation, a person named in Bylaw 8.1 shall be indemnified
only if:
(a) He is successful on the merits of otherwise; or
(b) He acted in good faith in the transaction which is the
subject of the suit, and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the corporation.
However, he shall not be indemnified in respect of any claim, issue
or matter as to which he has been adjudged liable for negligence or
misconduct in the performance of his duty to the corporation
unless, and only to the extent that, the court in which the suit
was brought shall determine upon application that, despite the
adjudication but in view of all the circumstances, such person is
fairly and reasonably entitled to indemnity for such expenses as
the court shall deem proper.
8.4 EXTENT--NONDERIVATIVE SUITS. In case of a suit, action or
proceeding (whether civil, criminal, administrative or investigative)--other
than a suit by or in the right of the corporation -- together thereafter
referred to as a nonderivative suit, against a person named in Bylaw 8.1 by
reason of his holding a position named in Bylaw 8.1, the corporation shall
indemnify him if he satisfies the standard in Bylaw 8.5 for amounts actually
and reasonably incurred by him in connection with the defense or settlement
of the nonderivative suit as:
(a) Expenses (including attorney's fees);
(b) Amount paid in settlement;
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(c) Judgment; and
(d) Fines.
8.5 STANDARD--NONDERIVATIVE SUITS. In case of non-derivative
suit, a person named in Bylaw 8.1 shall be indemnified only if:
(a) He is successful on the merits or otherwise; or
(b) He acted in good faith in the transaction which is the
subject of the nonderivative suit, and in a manner reasonably
believed to be in, or not opposed to, the best interest of the
corporation and, with respect to any criminal action or proceeding,
he has no reason to believe his conduct was unlawful The
termination of nonderivative suit by judgment, order, settlement,
conviction, or upon a plea of NOLO CONTENDERE or its equivalent
shall not, of itself, create a presumption that the person failed
to satisfy the standard of this Bylaw 8.5(b).
8.6 DETERMINATION THAT STANDARD HAS BEEN MET. A determination
that the standard of Bylaws 8.3 or 8.5(b) (second sentence), the
determination may be made by:
(1) A majority of the directors of the corporation (whether or not a
quorum) who were not parties to the action, suit or proceeding, or;
(2) Independent legal counsel in a written opinion; or
(3) The stockholders of the corporation.
8.7 PRORATION. Anyone making a determination under Bylaw 8.6 may
determine that a person has met the standard as to some matters but not as to
others, and may reasonably prorate amounts to be indemnified.
8.8 ADVANCE PAYMENT. The corporation may pay in advance any
expenses (including attorney's fees) which may become subject to
indemnification under Bylaws 8.1-8.8 if (a) The board of directors authorizes
the specific payment; and (b) The person receiving the payment undertakes in
writing to repay unless it is ultimately determined that he is entitled to
indemnification by the corporation under Bylaws 8.1-8.8.
8.9 NONEXCLUSIVE. The indemnification provided by Bylaws 8.1-8.8
shall
<PAGE>
not be exclusive of any other rights to which a person may be entitled by
law, bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise.
8.10 CONTINUATION. The indemnification and advance payment
provided by Bylaws 8.1-8.8 shall continue as to a person who has ceased to
hold a position named in Bylaw 8.1 and shall inure to his heirs, executors
and administrators.
8.11 INSURANCE. The corporation may purchase and maintain
insurance on behalf of any person who holds or who has held any position
named in Bylaw 8.1, against any liability incurred by him in any such
position, or arising out of his status as such, whether or not the
corporation would have power to indemnify him against such liability under
Bylaws 8.1-8.8.
8.12 REPORTS. Indemnification payments, advance payments and
insurance payments made under Bylaws 8.1-.11 shall be reported in writing to
the stockholders of the corporation with the next notice of annual meeting.
ARTICLE IX
GENERAL PROVISIONS
9.1 DIVIDENDS AND RESERVES.
(a) DECLARATION AND PAYMENT. Subject to statute and the
certificate of incorporation, dividends may be declared by the board of
directors at any regular or special meeting and may be paid in cash, in
property, or in shares of the corporation. Subject to Bylaw 3.3, the
declaration and payment shall be at the discretion of the board of directors.
(b) RECORD DATE. The board of directors may fix in advance a
record date for the purpose of determining stockholders entitled to receive
payment of any dividend, the record date to be not more than fifty days prior
to the payment date of such dividend, or the board of directors may close the
stock transfer books for such purpose for a period of not more than fifty
days prior to the payment date of such dividend. In the absence of any action
by the board of directors, the date upon which the board of directors adopts
the resolution declaring the dividend shall be the record date.
(c) RESERVES. By resolution the board of directors may create
such reserve or reserves out of the earned surplus of the corporation as the
directors from time to time,
<PAGE>
in their discretion, think proper to provide for contingencies, or to
equalize dividends, or to repair or maintain any property of the corporation,
or for any other purpose they think beneficial to the corporation. The
directors may modify or abolish any such reserve in the manner in which it
was created.
9.2 BOOKS AND RECORDS. The corporation shall keep correct and
complete books and records of account and shall keep minutes of the,
proceedings of its stockholders and board of directors, and shall keep at its
registered office or principal place of business, or at the office of its
transfer agent, agent or registrar, a record of its stockholders, giving the
names and addresses of all stockholders and the number and class of the
shares held by each.
9.3 ANNUAL STATEMENT. The board of directors shall mail to each
stockholder of record, at least ten days before each annual meeting a full
and clear statement of the business and condition of the corporation,
including a reasonably detailed balance sheet, income statement, and surplus
statement, all prepared in conformity with generally accepted accounting
principles applied on a consistent basis.
9.4 CHECKS AND NOTES. All checks or demands for money and notes
of the corporation shall be signed by such officer or officers or such other
person or persons as the board of directors may from time to time designate.
9.5 FISCAL YEAR. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
9.6 SEAL. The corporation seal (of which there may be one or more
exemplars) shall contain the name of the corporation and the name of the
state of incorporation. The seal may be used by impressing it or reproducing
a facsimile of it, or otherwise.
9.7 RESIGNATION. Any director, officer or agent may resign by
giving written notice to the president or the secretary. The resignation
shall take effect at the time specified therein, or immediately if no time is
specified therein. Unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
9.8 AMENDMENT OF BYLAWS. These Bylaws may be altered, amended, or
repealed at any meeting of the board of directors at which a quorum is
present, in accordance with Bylaw 3.3, provided notice of the proposed
alteration, amendment, or repeal is contained in the notice of such meeting.
<PAGE>
9.9 CONSTRUCTION. Whenever the context so requires, the masculine
shall include the feminine and neuter, and the singular shall include the
plural and conversely. If any portion of these bylaws shall be invalid or
inoperative, then, so far as is reasonable and possible:
(a) The remainder of these Bylaws shall be considered valid and
operative.
(b) Effect shall be given to the intent manifested by the portion
held invalid or inoperative.
9.10 TABLE OF CONTENTS; HEADINGS. The table of contents and
headings are for organization, convenience and clarity. In interpreting these
Bylaws, they shall be subordinated in importance to the other written
material.
9.11 CERTAIN DEFINITIONS.
CHANGE IN CONTROL TRANSACTION: any of the following:
(a) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act),
other than the Corporation, or any of its Subsidiaries or any
Investor or Excluded Group (an "ACQUIRING PERSON") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 35% or more of the combined voting power or
economic interests of the then outstanding voting securities of the
corporation entitled to vote generally in the election of
directors; provided, however, that any transfer from any Investor
or Excluded Group will not result in a Change in Control if such
transfer was part of one or a series of related transactions the
effect of which, absent the transfer to such Acquiring Person by
the Investor or Excluded Group, would not have resulted in the
acquisition by such Acquiring Person of 35% or more of the combined
voting power or economic interests of the then outstanding voting
securities; or
(b) the individuals who at the beginning of any 12 consecutive
month period following the Closing constituted a majority of the
directors of the corporation (the "INCUMBENT MAJORITY") cease for
any reason to constitute at least a majority of such directors;
provided that (i) any individual becoming a director whose
election, or nomination for election by the corporation's
stockholders pursuant to the Stockholders Agreement, was approved
by a vote of the stockholders having the right to designate such
director pursuant to the Stockholders Agreement and (ii) any
director whose election to the Board or whose nomination for
election by the
<PAGE>
stockholders of the corporation was approved by the Incumbent
Majority, shall, in each such case, be considered as though such
individual were a member of the Incumbent Majority, but excluding,
as a member of the Incumbent Majority, any such individual whose
initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the
directors of the corporation (as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) and further
excluding any person who is an affiliate or associate of an
Acquiring Person having or proposing to acquire beneficial ownership
of 25% or more of the combined voting power of the then outstanding
voting securities of the corporation entitled to vote generally in
the election of directors; or
(c) the approval by the stockholders of the corporation of a
reorganization, merger or consolidation, in each case, with respect
to which all or substantially all of the individuals and entities
who were the respective beneficial owners of the voting securities
of the corporation immediately prior to such reorganization, merger
or consolidation do not, following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than
51% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors
of the corporation resulting from such reorganization, merger or
consolidation; or
(d) the sale or other disposition of assets representing 50% or
more of the assets of the corporation and its subsidiaries in one
transaction or series of related transactions.
EXCLUDED GROUP: a "group" (as such term is used in Rule 13d-5 of
the Exchange Act) that includes one or more of the Investors, including,
without limitation, for the purpose of this definition only, any party to the
Stockholder' Agreement.
INVESTOR: Questor or Thayer or their respective Affiliates.
MARKET VALUE: shall mean, as of any date: (i) if any equity
securities are listed on a national securities exchange, the average of the
closing prices as reported for composite transactions during the 30
consecutive trading days preceding the trading day immediately prior to such
date or, if no sale occurred on a trading day, then the mean between the
closing bid and asked prices on such exchange on such trading day; (ii) if
any equity securities are traded on the Nasdaq National Market ("NMM"), the
average of the closing prices as reported on the NMM during the 30
consecutive trading days preceding the trading day immediately prior to such
date or, if no sale occurred on a
<PAGE>
trading day, then the mean between the highest bid and lowest asked prices as
of the close of business on such trading day, as reported on the NMM; (iii)
if any equity securities are not traded on a national securities exchange or
the NMM but are otherwise traded over-the-counter, the arithmetic average
(for consecutive trading days) of the mean between the highest bid and lowest
asked prices as of the close of business during the 30 consecutive trading
days preceding the trading day immediately prior to such date as quoted on
the National Association of Securities Dealers Automated Quotation system or
an equivalent generally accepted reporting service; or (iv) if there is no
active market for any equity securities, the market value thereof as mutually
agreed by the corporation and a majority in interest of the stockholders.
STOCKHOLDERS AGREEMENT: the Stockholders Agreement, dated as of
December 10, 1999, among the corporation, Questor Partners Fund II, L.P.
("FUND II"), Questor Side-by-Side Partners II, L.P. (the "SIDE-BY-SIDE
FUND"), Questor Side-by-Side Partners II 3(c)(1), L.P. (the "3(c)(1) FUND"
and together with Fund II and the Side-by-Side Fund, "QUESTOR"), and Thayer
Equity Investors III, L.P. ("THAYER EQUITY") and TC Co-Investors, LLC ("TC
CO-INVESTORS" and, together with Thayer Equity, "THAYER").
<PAGE>
EXHIBIT 4.1
SERIES F PREFERRED STOCK
CERTIFICATE OF DESIGNATION
OF
_____________________________
AEGIS COMMUNICATIONS GROUP, INC.
(a Delaware corporation)
_____________________________
(PURSUANT TO SECTION 151(g) OF THE GENERAL CORPORATION LAW OF THE
STATE OF DELAWARE)
Aegis Communications Group, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "CORPORATION"), DOES HEREBY CERTIFY
THAT:
WHEREAS, pursuant to authority conferred upon the Board of
Directors of the Corporation (the "BOARD") by the Amended and Restated
Certificate of Incorporation of the Corporation (the "CERTIFICATE") and
Section 151 of the General Corporation Law of the State of Delaware (the
"DGCL"), the following resolutions were duly adopted by unanimous written
consent of the Board dated August 20, 1999, which resolutions are still in
full force and effect and are not in conflict with any provisions of the
Certificate or Bylaws of the Corporation or any certificate of designation
filed by the Corporation pursuant to Section 151 of the DGCL;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to authority vested
in the Board by the Certificate and Section 151 of the DGCL a series of
Preferred Stock of the Corporation to be known as "SERIES F PREFERRED STOCK"
is hereby established and provided for and the Board of Directors hereby
fixes, states and expresses the powers, designation, preferences and
relative, participating, optional and other special rights of such series and
the qualifications, limitations or restrictions of such series, as follows:
I. DESIGNATION. The Board does hereby provide for the issuance of
a new series of Preferred Stock of the Corporation, to be designated and
known as Series F Preferred Stock.
II. NUMBER OF SHARES. The number of shares constituting the
Series F Preferred Stock shall be and the same is hereby fixed at 46,750.
III. CAPITAL. For the purpose of Section 154 of the DGCL the
amount to be represented as capital for each share of Series F Preferred
Stock is and shall at all times be $1,000.00.
Section 1. DEFINITIONS. (a) For purposes of this Certificate of
Designation, the following definitions shall apply:
1
<PAGE>
"ADJUSTED EBITDA" means, for the year ended December 31, 1999, the sum
(without duplication), derived from the Corporation's audited consolidated
statement of operations for such period, of (a) Net Income; (b) the amount
deducted, in determining Net Income, representing amortization, provided
that in no event shall such amount include more than $1,469,000 in respect
of the period beginning January 1, 1999 and ended June 30, 1999 (the "STUB
PERIOD"); (c) the amount deducted, in determining Net Income, of all income
taxes (whether paid or deferred), provided that in no event shall such
amount include more than ($3,982,000) in respect of the Stub Period; (d)
the amount deducted, in determining Net Income, representing Interest
Expense, provided that in no event shall more than $3,580,000 be included
as Interest Expense in respect of the Stub Period; (e) the amount deducted,
in determining Net Income, representing depreciation of assets, provided
that in no event shall such amount include more than $6,206,000 in respect
of the Stub Period; (f) the amount deducted, in determining Net Income,
representing the goodwill writeoff in the amount of $20,399,000 recorded in
the Stub Period; (g) the amount deducted, in determining Net Income,
representing the restructuring charge in the amount of $541,000 recorded in
the Stub Period; and (h) fees and expenses relating to the issuance of the
Series F Preferred Stock and related transactions deducted in determining
Net Income consisting of (i) the transaction fees and expenses of Merrill
Lynch & Co. and Questor Management Company, (ii) the transaction legal and
accounting fees and expenses of the Corporation, (iii) extraordinary bank
fees incurred during the period beginning July 1, 1999 and ending
December 31, 1999 (the "SECOND STUB PERIOD"), (iv) the transaction expenses
of TC Management Partners, LLC, and (v) consulting fees, executive
severance costs (including in respect of non-cash charges in connection
with the acceleration of employee stock options), executive search and
relocation costs, any increases in the salary of the Chairman of the
Corporation, and other non-recurring charges incurred during the Second
Stub Period, net of related savings, in each case with respect to this
clause (v) as mutually agreed by a Majority of the Series F Preferred Stock
and the Corporation.
"AFFILIATES" shall mean any person that directly or indirectly through
one or more intermediaries controls, or is controlled by, or is under
common control with, the Person specified. No Person shall be deemed to be
an Affiliate of another Person solely as a consequence of the Purchase
Agreement or the Stockholders Agreement or the transactions contemplated
thereby.
"BOARD" means the board of directors of the Corporation.
"BUSINESS DAY" shall mean a day which is not a Saturday, Sunday or
legal holiday on which banking institutions in New York are authorized to
close.
"CHANGE IN CONTROL TRANSACTION" means any of the following:
(a) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), other than
the Corporation, or any of its Subsidiaries or any Investor or Excluded
Group (an "ACQUIRING PERSON"), of beneficial
2
<PAGE>
ownership (within the meaning of Rule 13d-5 promulgated under the
Exchange Act) of 35% or more of the combined voting power or economic
interests of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors; provided,
however, that any transfer from any Investor or Excluded Group will not
result in a Change in Control if such transfer was part of one or a
series of related transactions the effect of which, absent the transfer
to such Acquiring Person by the Investor or Excluded Group, would not
have resulted in the acquisition by such Acquiring Person of 35% or more
of the combined voting power or economic interests of the then
outstanding voting securities; or
(b) the individuals who at the beginning of any 12 consecutive month
period following the Original Issue Date that constituted a majority of the
directors of the Corporation (the "INCUMBENT MAJORITY") cease for any
reason to constitute at least a majority of such directors; provided that
(i) any individual becoming a director whose election, or nomination for
election by the Corporation's stockholders was approved by a vote of the
stockholders having the right to designate such director in accordance with
the Stockholders Agreement, and (ii) any director whose election to the
Board or whose nomination for election by the stockholders of the
Corporation was approved by the Incumbent Majority, shall, in each such
case, be considered as though such individual were a member of the
Incumbent Majority, but excluding, as a member of the Incumbent Majority,
any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of
the directors of the Corporation (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) and further excluding
any person who is an affiliate or associate of an Acquiring Person having
or proposing to acquire beneficial ownership of 25% or more of the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors; or
(c) the approval by the stockholders of the Corporation of a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who were the
respective beneficial owners of the voting securities of the Corporation
immediately prior to such reorganization, merger or consolidation do not,
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 51% of the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of directors of the Corporation resulting from such
reorganization, merger or consolidation; or
(d) the sale or other disposition of assets representing 50% or more
of the assets of the Corporation and its Subsidiaries in one transaction or
a series of related transactions.
"COMMON STOCK" shall mean the common stock, par value $.01 per share,
of the Corporation.
"COMMON STOCK'S FAIR MARKET VALUE" shall mean, as of any date, the
fair market value of a share of Common Stock on such date. Such fair
market value on a date shall
3
<PAGE>
mean (i) if shares of the Common Stock are listed on a national
securities exchange, the average of the closing prices as reported for
composite transactions during the 30 consecutive trading days preceding
the trading day immediately prior to such date or, if no sale occurred
on a trading day, then the mean between the closing bid and asked prices
on such exchange on such trading day; (ii) if shares of the Common Stock
are traded on the Nasdaq National Market ("NMM"), the average of the
closing prices as reported on the NMM during the 30 consecutive trading
days preceding the trading day immediately prior to such date or, if no
sale occurred on a trading day, then the mean between the highest bid
and lowest asked prices as of the close of business on such trading day,
as reported on the NMM; (iii) if the shares of the Common Stock are not
traded on a national securities exchange or the NMM but are otherwise
traded over-the-counter, the arithmetic average (for consecutive trading
days) of the mean between the highest bid and lowest asked prices as of
the close of business during the 30 consecutive trading days preceding
the trading day immediately prior to such date as quoted on the National
Association of Securities Dealers Automated Quotation system or an
equivalent generally accepted reporting service; or (iv) if there is no
active market for the Common Stock, the fair market value thereof as
mutually determined by the Corporation and the holders of a Majority of
the Series F Preferred Stock.
"DEFAULT RATE" means 15% per annum.
"DIVIDEND RATE" means 9.626% per annum.
"EQUITY SECURITY" means any stock or similar security of the
Corporation or any security (including indebtedness for borrowed money)
convertible or exchangeable, with or without consideration, into or for any
such stock or similar security, or any security (including indebtedness for
borrowed money) carrying any warrant or right to subscribe to or purchase
any such stock or similar security, or any such warrant or right.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCLUDED GROUP" means a "GROUP" (as such term is used in Rule 13d-5
of the Exchange Act) that includes one or more of the Investors, including,
without limitation, for purposes of this definition only, any party to the
Stockholders Agreement.
"INTEREST EXPENSE" means, for any period, the aggregate consolidated
interest expense of the Corporation for such period, determined in
accordance with generally accepted accounting principles consistently
applied.
"INVESTMENT VALUE" of any share of Series F Preferred Stock, means, as
of any date, the sum of (i) the Per Share Amount for such Series F
Preferred Stock, plus (ii) the amount of any unpaid dividends on such share
added to the Investment Value of such share on any Dividend Reference Date
pursuant to Section 2(a); and in the event of any liquidation, dissolution
or winding up of the Corporation, within the meaning of Section 3, or a
Change in Control Transaction, or the redemption or conversion of such
share, unpaid dividends on such share, whether or not earned or declared,
will be added to the
4
<PAGE>
Investment Value of such share on the payment or distribution date under
Section 3 or 4, as the case may be, or on the Optional Redemption Date
(as defined in Section 5), or on the Conversion Date (as defined in
Section 7), as the case may be, calculated cumulatively on a daily basis
to the close of business on such payment date, distribution date, or
Conversion Date or Optional Redemption Date, as the case may be.
"INVESTORS" means Questor, Questor Side-by-Side Partners II, L.P.,
Questor Side-by-Side Partners II (3)(c)(1), L.P., Thayer, TC Co-Investors,
LLC and their respective Affiliates (including for this purpose any of
their limited or general partners).
"JUNIOR STOCK" shall mean the Common Stock and all other shares of
capital stock of the Corporation, whether presently outstanding or
hereafter issued, other than the Series B Preferred Stock and the Series F
Preferred Stock.
"MAJORITY OF THE SERIES F PREFERRED STOCK" shall mean more than 50% of
the outstanding shares of Series F Preferred Stock.
"NET INCOME" means, for the year ended December 31, 1999, the
consolidated net income of the Corporation for such period, determined in
accordance with generally accepted accounting principles consistently
applied, provided that for purposes of determining the Corporation's
Adjusted EBITDA, in no event shall the Net Income of the Corporation for
the Stub Period used in such determination exceed ($28,278,000) and further
provided that for purposes of determining the Corporation's Adjusted
EBITDA, in no event shall the Net Income of the Corporation for the Second
Stub Period include extraordinary or nonrecurring gains except to the
extent included in the Revised 1999 Operating Plan - Summary with Regional
Detail, dated July 13, 1999, and specifically disclosed to Questor prior to
August 25, 1999.
"ORIGINAL ISSUE DATE" shall mean the first date on which shares of
Series F Preferred Stock are issued.
"OUTSTANDING OPTIONS" shall mean options granted under the
Corporation's 1992 Stock Option Plan, rights granted under the 1996 Stock
Exchange Rights Plan, options granted under the Corporation's 1996 Stock
Option and Restricted Stock Plan and options granted under the
Corporation's 1998 Stock Option Plan.
"OUTSTANDING WARRANTS" shall mean: (i) Warrant to Purchase One Million
One Hundred Thousand (1,100,000) Shares of Common Stock, $.01 Par Value,
dated April 7, 1998, at the price of $1.96 per share, held by Thayer Equity
Investors III, L.P.; (ii) Warrants to purchase 350,000 shares of Common
Stock issued pursuant to a commitment letter from Thayer to the Company at
an exercise price of $2.375; (iii) Series Four Warrant to Purchase Nine
Hundred Seven Thousand Nine Hundred Eighty-Four (907,984) Shares of Common
Stock, $.01 Par Value, dated June 30, 1999, at the price of $.90625 per
share, held by Thayer Equity Investors III, L.P.; (iv) Series Four Warrant
to Purchase Forty-Two Thousand Ninety-One (42,091) Shares of Common Stock,
$.01 Par Value, dated June 30, 1999, at the price of $.90625 per share,
held by Edward Blank;
5
<PAGE>
(v) Series Four Warrant to Purchase Nine Thousand Nine Hundred
Seventy-Eight (9,978) Shares of Common Stock, $.01 Par Value, dated June
30, 1999, at the price of $.90625 per share, held by Edward Blank 1995
Grantor Retained Annuity Trust; (vi) Series Four Warrant to Purchase
Thirty-Nine Thousand Nine Hundred Forty-Seven (39,947) Shares of Common
Stock, $.01 Par Value, dated June 30, 1999, at the price of $.90625 per
share, held by ITC Service Company; or (vii) Stock Purchase Warrant,
dated as of December 17, 1997, from IQI, Inc. to Edward Blank, to
purchase 25,403 shares for $808,600 and the Stock Purchase Warrant,
dated as of December 17, 1997, from IQI, Inc., to purchase 6,013 shares
for $191,400 (such two Stock Purchase Warrants to purchase IQI, Inc.
shares having been converted into warrants to purchase 306,347 shares,
in aggregate, of Common Stock at an exercise price of $3.26 per share).
"PER SHARE AMOUNT" means $1,000.00 (appropriately adjusted for
subdivisions or combinations of the Series F Preferred Stock).
"PERSON" means an individual, corporation, partnership, association,
trust, limited liability company or any other entity or organization,
including a government or political subdivision or an agency, unit or
instrumentality thereof.
"PREFERRED STOCK" means Preferred Stock, $.01 par value per share, of
the Corporation.
"PURCHASE AGREEMENT" means the Series F Senior Voting Convertible
Preferred Stock Purchase and Registration Rights Agreement, dated as of
August 25, 1999, as amended by a Letter Agreement, dated August 26, 1999,
and by Amendment No. 2, dated as of October 22, 1999, by and among the
Corporation, Questor Partners Fund II, L.P., Questor Side-by-Side Partners
II, L.P., Questor Side-by-Side Partners II 3(c)(1), L.P., Thayer, TC
Co-Investors LLC, ITC Services Company, Edward Blank and trusts created by
Edward Blank as both grantor and trustee under Article Fourth of The Edward
Blank 1995 Grantor Retained Annuity Trust.
"QUESTOR" means Questor Partners Fund II, L.P.
"SERIES B PREFERRED STOCK" shall mean the Series B Preferred Stock,
par value $.01 per shares, of the Corporation.
"SERIES B RIGHTS AND PREFERENCES" shall mean the Exhibit A `Rights and
Preferences of Series B Preferred Stock', attached to the Corporation's
Amended and Restated Certificate of Incorporation.
"SERIES D AND SERIES E CERTIFICATE OF DESIGNATION" means the
Certificate of Designation of the Series D and E Preferred Stock filed with
the Delaware Secretary of State on June 30, 1999 and amended on December
10, 1999.
"SERIES D PREFERRED STOCK" shall mean the Series D Preferred Stock,
par value $.01 per shares, of the Corporation.
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"SERIES E PREFERRED STOCK" shall mean the Series E Preferred Stock,
par value $.01 per shares, of the Corporation.
"SERIES F CERTIFICATE OF DESIGNATION" means this Certificate of
Designation of the Series F Preferred Stock filed with the Delaware
Secretary of State on December 10, 1999.
"SERIES F PREFERRED STOCK" shall mean the Series F Preferred Stock,
par value $.01 per share, of the Corporation.
"SPECIAL CONVERSION PRICE" shall mean $1.661.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement dated as of
December 10, 1999 among the Corporation, Questor Partners Fund II, L.P.,
Questor Side-by-Side Partners II, L.P., Questor Side-by-Side Partners II
3(c)(1), L.P., Thayer and TC Co-Investors III, L.P.
"SUBSIDIARY" shall mean, with respect to the Corporation, any Person
of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned
by the Corporation or a Subsidiary of the Corporation.
"THAYER" shall mean Thayer Equity Investors III, L.P., a Delaware
limited partnership.
"VOTING STOCK" shall mean any shares having general voting power in
electing the Board (irrespective of whether or not at the time stock of any
other class or classes has or might have voting power by reason or the
happening of any contingency). The Common Stock is Voting Stock.
Section 2. DIVIDENDS. (a) RIGHT TO DIVIDENDS. (i) Each of the
holders of record of the Series F Preferred Stock shall be entitled to
receive, when and as declared by the Board, and out of any funds legally
available therefor, cumulative dividends at the rate and in the manner
provided herein in preference to the payment of dividends on any Junior
Stock. Dividends on each share of the Series F Preferred Stock shall
accumulate and accrue on each such share from the date of its original issue
and shall accumulate and accrue from day to day thereafter, whether or not
earned or declared. Dividends shall accumulate and accrue on each share of
Series F Preferred Stock from the Original Issue Date and shall not be
affected by the transfer of shares of Series F Preferred Stock thereafter or
the cancellation and issuance or reissuance of certificates evidencing such
shares.
(ii) Dividends will be calculated cumulatively on a daily basis on
each share of Series F Preferred Stock at the Dividend Rate (or, pursuant to
Section 4(c)(ii) at the Default Rate) per annum on the Investment Value
thereof. To the extent not paid on any March 31, June 30, September 30 or
December 31 of any year (each a "DIVIDEND REFERENCE DATE"),
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commencing December 31, 1999, all dividends which have been calculated on
each share of Series F Preferred Stock then outstanding during the
three-month period (or other period in the case of the first Dividend
Reference Date) ending on such Dividend Reference Date, whether or not earned
or declared, will be added to the Investment Value of such share on such
Dividend Reference Date and will remain a part thereof until such share of
Series F Preferred Stock is converted, redeemed, repurchased or otherwise
retired in accordance with the terms hereof. If any Dividend Reference Date
is not a Business Day, the dividend otherwise due on such date shall be paid
on the next following Business Day (and this extension shall be included in
the determination of such dividend payment).
(b) (i) Unless full dividends on the Series B Preferred Stock for
all past dividend periods and the then current dividend period shall have
been paid or declared and a sum sufficient for the payment thereof set apart,
(1) no dividend whatsoever (other than a dividend payable solely in Common
Stock) shall be paid or declared, and no distribution shall be made, on any
share of Series F Preferred Stock or Junior Stock, and (2) no shares of
Series F Preferred Stock or Junior Stock shall be purchased, redeemed or
acquired by the Corporation (other than a redemption pursuant to Sections 4
and 5 hereof) and (3) no monies shall be paid into or set aside or made
available for a sinking fund for the purchase, redemption or acquisition
thereof; provided, however, that this restriction shall not apply to the
repurchase of shares of Common Stock from directors or employees of or
consultants or advisers to the Corporation or any Subsidiary pursuant to
agreements under which the Corporation has the option to repurchase such
shares upon the occurrence of certain events, including without limitation
the termination of employment by or service to the Corporation or any
Subsidiary.
(ii) Unless full dividends on the Series F Preferred Stock for all
past dividend periods and the then current dividend period shall have been
paid, or added to the Investment Value of each share of Series F Preferred
Stock as provided in Section 2(a)(ii) hereof, (1) no dividend whatsoever
(other than a dividend payable solely in Common Stock) shall be paid or
declared, and no distribution shall be made, on any share of Junior Stock,
and (2) no shares of Junior Stock shall be purchased, redeemed or acquired by
the Corporation and (3) no monies shall be paid into or set aside or made
available for a sinking fund for the purchase, redemption or acquisition
thereof; provided, however, that this restriction shall not apply to the
repurchase of shares of Common Stock from directors or employees of or
consultants or advisers to the Corporation or any Subsidiary pursuant to
agreements under which the Corporation has the option to repurchase such
shares upon the occurrence of certain events, including without limitation
the termination of employment by or service to the Corporation of any
Subsidiary.
(c) ADDITIONAL DIVIDENDS. After cumulative dividends on the
Series B Preferred Stock and the Series F Preferred Stock for all past
dividend periods and the then current dividend period shall have been
declared and paid or set apart, or added to the Investment Value of each
share of Series F Preferred Stock as provided in Section 2(a)(ii) hereof, and
after cumulative dividends on the Series D Preferred Stock and the Series E
Preferred Stock for all past dividend periods and the then current dividend
period shall have been declared and paid by cash or the issuance of
additional shares of Series D Preferred Stock or Series E Preferred Stock
sufficient for the payment thereof in accordance with the Series D and Series
E Certificate of Designation, if the Board shall elect to declare additional
dividends, such additional dividends shall be
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declared in equal amounts per share on all shares of the Series B Preferred
Stock, the Series F Preferred Stock, the Series D Preferred Stock, the Series
E Preferred Stock and Common Stock, but with each share of the Series B
Preferred Stock, the Series F Preferred Stock, the Series D Preferred Stock,
the Series E Preferred Stock being entitled to dividends based upon, in the
case of the Series B Preferred Stock, the Series B Rights and Preferences,
or, in the case of the Series F Preferred Stock, the Series D Preferred Stock
and the Series E Preferred Stock, the number of shares of Common Stock into
which such share of the Series F Preferred Stock, the Series D Preferred
Stock or the Series E Preferred Stock could be converted, in accordance with
provisions of this Series F Certificate of Designation or the Series D and E
Certificate of Designation, as the case may be, at the record date for the
determination of stockholders entitled to receive such dividend or, if no
such record date is established, on the date such dividend is declared.
Section 3. LIQUIDATION RIGHTS OF SERIES F PREFERRED STOCK. (a)
Upon any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Series B Preferred Stock then
outstanding shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, whether such assets are
capital, surplus, or earnings, before any payment or declaration and setting
apart for payment of any amount shall be made in respect of the Series F
Preferred Stock or the Junior Stock, the amount specified in Section A(iii)
of the Series B Rights and Preferences.
(b) SERIES F PREFERRED STOCK PREFERENCE. Upon any liquidation,
dissolution or winding up of the Corporation, the holders of the Series F
Preferred Stock shall be entitled to be paid, out of the assets of the
Corporation available for distribution to its stockholders, whether such
assets are capital, surplus, or earnings, before any payment or declaration
and setting apart for payment of any amount shall be made in respect of any
Series D Preferred Stock, Series E Preferred Stock or other Junior Stock, an
amount equal to the Investment Value per share with respect to the Series F
Preferred Stock on the date of payment. If upon any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, the
assets to be distributed to the holders of the Series F Preferred Stock under
this Section 3(b) shall be insufficient to permit the payment to such
stockholders of the full preferential amounts therein, then all of the assets
of the Corporation to be distributed remaining after payments to holders of
the Series B Preferred Stock pursuant to Section 3(a) hereof shall be
distributed ratably to the holders of the Series F Preferred Stock on the
basis of the number of shares of Series F Preferred Stock held.
(c) REMAINING ASSETS. After the payment or distribution to the
holders of the Series B Preferred Stock and the Series F Preferred Stock as
aforesaid, and after payment to the holders of the Series D Preferred Stock
and the Series E Preferred Stock of the full preferential amounts set forth
in the Series D and Series E Certificate of Designation, the holders of the
Series F Preferred Stock, the Series D Preferred Stock, the Series E
Preferred Stock and the Common Stock shall be entitled to receive ratably all
remaining assets of the Corporation to be distributed, but with all holders
of shares of Series F Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock treated (for this purpose only ) as if they had converted
their shares of Series F Preferred Stock, Series D Preferred Stock and Series
E Preferred Stock into Common Stock.
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Section 4. CHANGE IN CONTROL TRANSACTION. (a) In the event there
occurs a Change in Control Transaction, the Company will offer to purchase
from each holder of the Series F Preferred Stock, in cash or in securities
(including, without limitation, debt securities) received from the acquiring
corporation, if any, or a combination thereof, at the closing of any such
transaction, each share of Series F Preferred Stock held by such holder, for
an amount equal to the Investment Value per share thereof, as of the date of
full payment therefor (the "CHANGE IN CONTROL REDEMPTION PRICE") by delivery
of a notice of such offer (a "CHANGE IN CONTROL REDEMPTION NOTICE"), and each
holder of Series F Preferred Stock shall have the right (but not the
obligation) to require the Corporation to purchase any or all of the Series F
Preferred Stock held by such holder for the Change in Control Redemption
Price. Each holder of Series F Preferred Stock shall also be permitted,
until the fifteenth business day following delivery of the Change in Control
Notice, to convert any or all of the shares of Series F Preferred Stock held
by such holder pursuant to Section 7 below, and any shares of Common Stock
issuable upon conversion of any Series F Preferred Stock converted pursuant
to this sentence after a Change in Control Transaction has occurred shall be
entitled to receive the same amount of cash, securities and other property in
connection with such Change in Control Transaction as the Common Stock
outstanding prior to the Change in Control Transaction.
(b) Any securities or other property to be delivered to the
holders of the Series F Preferred Stock or Junior Stock pursuant to Section
4(a) hereof shall be valued as follows:
(i) Securities not subject to investment letter or other similar
restrictions on free marketability:
(A) If traded on a securities exchange, the value shall be
deemed to be the average of the closing prices of the securities on
such exchange over the 10-day period ending three (3) days prior to
the closing of any Change in Control Transaction;
(B) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid prices over the 10-day
period ending three (3) days prior to the closing of any Change in
Control Transaction; and
(C) If there is no active public market, the value shall be the
fair market value thereof, as mutually determined by the Corporation
and the holders of a Majority of the Series F Preferred Stock.
(ii) The method of valuation of securities subject to investment
letter or other restrictions on free marketability shall be to make
appropriate discount from the market value determined as above in paragraph
(i)(A), (B) or (C) to reflect the approximate fair market value thereof, as
mutually determined by the Corporation and the holders of a Majority of the
Series F Preferred Stock.
(iii) All other securities or other property shall be valued at the
fair market value thereof, as mutually determined by the Corporation and
the holders of a Majority of the Series F Preferred Stock.
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(iv) If the holders of a Majority of the Series F Preferred Stock and
the Corporation are unable to reach agreement on any valuation matter, such
valuation shall be submitted to and determined by a nationally recognized
independent investment banking firm selected by the Board and the holders
of a Majority of the Series F Preferred Stock (or, if such selection cannot
be made, by a nationally recognized independent investment banking firm
selected by the American Arbitration Association in accordance with its
rules).
(c) In the event the requirements of Section 4(a) hereof are not
complied with, or provision has not been made therefor by the setting apart of
cash and securities sufficient to permit the Corporation to comply with such
requirements:
(i) with respect to any Change in Control Transaction as to which the
Corporation is a party,
(A) the Corporation will cause the closing of such Change in
Control Transaction to be postponed until such time as the
requirements of this Section 4 have been complied with or adequate
provision therefor has been made; or
(B) the Corporation will cancel such transaction, in which event
the rights, preferences and privileges of the holders of the Series F
Preferred Stock shall revert to and be the same as such rights,
preferences and privileges existing immediately prior to the date of
the first notice referred to in Section 4(d) hereof; and
(ii) with respect to any Change in Control Transaction as to which the
Company is not a party, Dividends will be calculated at the Default Rate
until such time as the requirements of Section 4(a) are complied with or
adequate provision therefor has been made.
(d) The Corporation shall give each holder of record of Series F
Preferred Stock written notice of an impending Change in Control Transaction, if
known to the Corporation, not later than the earlier of (i) thirty (30) days
prior to the stockholders' meeting called to approve such transaction, and
(ii) thirty (30) days prior to the closing of such transaction. Such notice
shall describe the material terms and conditions of the impending transaction
and the provisions of this Section 4. No later than five business days
following the occurrence of a Change in Control Transaction, the Corporation
shall deliver a Change in Control Redemption Notice to each holder of Series F
Preferred Stock, which notice shall set forth (A) each holder's right to require
the Corporation to redeem all or any portion of the shares of Series F Preferred
Stock held by it at the Change in Control Redemption Price, (B) a date upon
which such redemption is offered to take place (which date shall be no more than
30 business days following the date of such Change in Control Redemption
Notice), and (C) the procedures to be followed by such holder in exercising its
right to cause such redemption. In the event a holder of shares of Series F
Preferred Stock shall elect to require the Corporation to redeem any or all such
shares of Series F Preferred Stock pursuant to Section 4(a), such holder shall
deliver within 15 business days of
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delivery of the Corporation's Change in Control Notice, a written notice to
the Corporation so stating, specifying the number of shares to be redeemed
pursuant to Section 4(a). The Corporation shall, in accordance with the
terms hereof, redeem the number of shares so specified on the date fixed for
redemption. Failure of the Corporation to give any notice shall not
prejudice the rights of any holders of such of Series F Preferred Stock to
cause the Corporation to redeem all such shares held by them.
(e) The provisions of this Section 4 are in addition to the
protective provisions of Section 8 hereof.
Section 5. REDEMPTION. (a) RESTRICTION ON REDEMPTION AND
PURCHASE. Except as expressly provided in this Section 5, the Corporation
shall not have the right to purchase, call, redeem or otherwise acquire for
value any or all of the Series F Preferred Stock.
(b) OPTIONAL REDEMPTION. At any time after the fifth but before
the eighth anniversary of the Original Issue Date, the Corporation may, at
its option, redeem not less than 60% of all of the then issued and
outstanding Series F Preferred Stock (the "OPTIONAL REDEMPTION"), at the
Redemption Price hereinafter specified; PROVIDED, HOWEVER, that the
Corporation shall not be entitled to redeem the Series F Preferred Stock or
give notice of any redemption unless the Corporation has sufficient and
lawful funds to redeem all of the then outstanding Series F Preferred Stock.
The date on which the Series F Preferred Stock is to be redeemed pursuant to
this Section 5(b) is herein called the "OPTIONAL REDEMPTION DATE."
(c) REDEMPTION PRICE. The Redemption Price per share of the
Series F Preferred Stock (the "REDEMPTION PRICE"), shall be the Investment
Value per share thereof as of the Optional Redemption Date. In connection
with an Optional Redemption, the Corporation shall pay the Redemption Price
for the Series F Preferred Stock to be redeemed in cash.
(d) REDEMPTION NOTICE. The Corporation shall, not less than
thirty (30) days nor more than sixty (60) days prior to the Optional
Redemption Date give written notice ("REDEMPTION NOTICE") to each holder of
record of Series F Preferred Stock to be redeemed. The Redemption Notice
shall state:
(i) That not less than 60% of the outstanding shares of Series F
Preferred Stock are to be redeemed and the total number of shares being
redeemed;
(ii) The number of shares of Series F Preferred Stock held by the
holder which the Corporation will redeem (which will be determined PRO RATA
based on the number of shares of Series F Preferred Stock held by each
holder);
(iii) The Optional Redemption Date and the aggregate Redemption Price
for the shares of Series F Preferred Stock held by such holder;
(iv) That the holder's right to convert the Series F Preferred Stock
will terminate on the Optional Redemption Date; and
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(v) The time, place and manner in which the holder is to surrender to
the Corporation the certificate or certificates representing the shares of
Series F Preferred Stock to be redeemed.
(e) PAYMENT OF REDEMPTION PRICE AND SURRENDER OF STOCK. On the
Optional Redemption Date, the Redemption Price of the Series F Preferred
Stock scheduled to be redeemed or called for redemption shall be payable to
the holders of the Series F Preferred Stock. On or before the Optional
Redemption Date, each holder of Series F Preferred Stock to be redeemed,
unless the holder has exercised its right to convert the shares as provided
in Section 7, shall surrender the certificate or certificates representing
such shares to the Corporation, in the manner and at the place designated in
the Redemption Notice, and thereupon the Redemption Price for such shares
shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired.
(f) TERMINATION OF RIGHTS. If the Redemption Notice is duly
given, and if at least ten (10) days prior to the Optional Redemption Date
the Redemption Price per share of Series F Preferred Stock to be redeemed is
either paid or made available for payment, then notwithstanding that the
certificates evidencing any of the shares of Series F Preferred Stock so
called or scheduled for redemption have not been surrendered, all rights with
respect to such shares shall forthwith after the Optional Redemption Date
cease and terminate, except only (i) the right of the holders to receive the
Redemption Price per share of such Series F Preferred Stock without interest
upon surrender of their certificates therefor or (ii) the right to receive
Common Stock plus dividends upon exercise of the conversion rights provided
in Section 7 on or before the Optional Redemption Date.
Section 6. VOTING RIGHTS. In addition to any voting rights
provided by law, the holders of shares of Series F Preferred Stock shall have
the following voting rights:
(a) So long as any shares of the Series F Preferred Stock are
outstanding, each share of Series F Preferred Stock shall entitle the
holder thereof to vote, in person or by proxy or written consent, at a
special or annual meeting of stockholders or in any written consent of
stockholders, on all matters voted on by holders of Common Stock voting
together as a single class with other shares entitled to vote thereon.
With respect to any such vote, each share of Series F Preferred Stock shall
entitle the holder thereof to cast that number of votes per share as is
equal to the number of votes that such holder would be entitled to cast had
such holder converted his number of Series F Preferred Stock into Common
Stock pursuant to Section 7 on the record date for determining the
stockholders of the Corporation eligible to vote on any such matters.
(b) For so long as these are shares of Series F Preferred Stock
issued and outstanding with an aggregate Investment Value of at least $15
million, if at any time or from time to time holders of a Majority of the
Series F Preferred Stock shall so request, then the number of directors
constituting the Board of Directors shall, without further action, be
increased by two, and the holders of a Majority of the Series F Preferred
Stock shall have, in addition to the other voting rights set forth herein,
the exclusive right,
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voting together as a single class without regard to series, to elect the
two directors (the "ADDITIONAL DIRECTORS") of the Corporation to fill
such newly-created directorships. Notwithstanding the foregoing, no
member of the Excluded Group shall be permitted to elect, pursuant to
the preceding sentence, more than the number of directors that such
member of the Excluded Group has a right to designate for nomination and
election to the Board of Directors pursuant to the Stockholders
Agreement.
Section 7. CONVERSION. The holders of Series F Preferred Stock shall
have the following conversion rights:
(a) RIGHT TO CONVERT. Each share of Series F Preferred Stock shall
be convertible, at any time prior to the eighth anniversary of the Original
Issue Date at the option of the holder thereof, into fully paid and
nonassessable shares of Common Stock and shall convert without any further
action on the part of the holder thereof, on the eighth anniversary of the
Original Issue Date.
(b) CONVERSION PRICE. The Series F Preferred Stock shall be
convertible into the number of shares of Common Stock which results from
dividing the Conversion Price (as hereinafter defined) in effect at the
time of conversion, or if the holders of Series F Preferred Stock convert
prior to the issuance of the Final EBITDA Certificate (as hereinafter
defined), the Special Conversion Price, into the Investment Value of each
share of Series F Preferred Stock being converted as of the Conversion Date
(as hereinafter defined). The Conversion Price shall be $1.506, subject to
adjustment from time to time as provided below (the "CONVERSION PRICE").
(c) MECHANICS OF CONVERSION. Each holder of Series F Preferred Stock
who desires to convert the same into shares of Common Stock shall surrender
the certificate or certificates therefor, duly endorsed, at the office of
the Corporation or of any transfer agent for the Series F Preferred Stock
or Common Stock, and shall give written notice to the Corporation at such
office that such holder elects to convert the same and shall state therein
the number of shares of Series F Preferred Stock being converted.
Thereupon the Corporation shall promptly issue and deliver to such holder a
certificate or certificates for the number of shares of Common Stock to
which such holder is entitled. Such conversion shall be deemed to have
been made (i) immediately prior to the close of business on the date of
such surrender of the certificate representing the shares of Series F
Preferred Stock to be converted, or (ii) on the eighth anniversary of the
Original Issue Date in the case of mandatory conversion (such date referred
to in clauses (i) and (ii), the "CONVERSION DATE"), and the Person entitled
to receive the shares of Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder of such shares of Common
Stock on such date. Any holder of Series F Preferred Stock mandatorily
converted on the eighth anniversary of the Original Issue Date shall be
entitled, upon surrender of the certificate or certificates therefor, duly
endorsed at the office of the Corporation or of any transfer agent for the
Series F Preferred Stock or Common Stock, to promptly receive from the
Corporation certificates representing the shares of Common Stock to which
such holder is entitled.
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(d) EBITDA ADJUSTMENT. The Conversion Price shall be adjusted to the
extent that the Corporation's Adjusted EBITDA is less than or more than
$17,000,000. For each $500,000 (and/or fraction thereof) that the
Corporation's Adjusted EBITDA is greater than $17,000,000, the Conversion
Price will be increased by $0.031. For each $500,000 (and/or fraction
thereof) that the Corporation's Adjusted EBITDA is less than $17,000,000,
the Conversion Price will be decreased by $0.031 (and/or fraction thereof).
In no case, however, shall the resulting Conversion Price be less than
$1.00 or more than $1.661. For purposes of the adjustment described in
this clause (d), the Corporation and the Investors shall engage
PricewaterhouseCoopers, LLP ("PWC"), or such other nationally recognized
accounting firm as the Investors mutually select, at the Corporation's
expense, to calculate the Adjusted EBITDA of the Corporation and to provide
a certificate (the "EBITDA CERTIFICATE") to the Corporation and each of the
Investors setting forth such calculation. Within 15 days after the
issuance of the Corporation's audited financial statements, PWC shall send
a draft of the EBITDA Certificate (the "DRAFT EBITDA CERTIFICATE") to the
Investors and the Corporation, each of whom shall have 30 days thereafter
(the "OBJECTION PERIOD") to make any objection thereto or suggest any
changes in order to conform the calculation therein to the terms of this
Certificate of Designation. Failure by any party to make any objection or
suggest any such changes within the Objection Period will be deemed to
constitute acceptance of the Draft EBITDA Certificate. The Corporation
will use its best efforts to cause PWC to issue the EBITDA Certificate (the
"FINAL EBITDA CERTIFICATE") as promptly as practicable, but in any event no
later than 30 days following the expiration of the Objection Period, and
the Final EBITDA Certificate shall be binding on all parties, including
without limitation the Corporation and the Investors and their successors
and assigns.
(e) STOCK DIVIDENDS. In case the Corporation after the date hereof
shall pay a dividend or make a distribution to all holders of shares of
Common Stock in shares of Common Stock, then in any such case the
Conversion Price in effect at the opening of business on the day following
the record date for the determination of stockholders entitled to receive
such dividend or distribution shall be reduced to a price obtained by
multiplying such Conversion Price by a fraction of which (x) the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on such record date and (y) the denominator shall be the sum of
such number of shares of Common Stock outstanding and the total number of
shares of Common Stock constituting such dividend or distribution, such
reduction to become effective immediately after the opening of business on
the day following such record date. For purposes of this subsection (e),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Corporation but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Corporation will not pay any
dividend or make any distribution on shares of Common Stock held in the
treasury of the Corporation.
(f) STOCK SPLITS AND REVERSE SPLITS. In case after the date hereof
outstanding shares of Common Stock shall be subdivided into a greater
number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the
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day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case after the date hereof
outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased, such
reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day
upon which such subdivision or combination becomes effective.
(g) OPTIONS, RIGHTS, AND WARRANTS. In case the Corporation after the
date hereof shall issue options, rights or warrants to holders of shares of
Common Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the Common Stock's Fair Market Value
on the record date for the determination of stockholders entitled to
receive such options, rights or warrants, the Conversion Price in effect at
the opening of business on the day following such record date shall be
adjusted to a price obtained by multiplying such Conversion Price by a
fraction of which (x) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on such record date plus the
number of shares of Common Stock that the aggregate offering price of the
total number of shares so to be offered would purchase at the Common
Stock's Fair Market Value and (y) the denominator shall be the number of
shares of Common Stock outstanding at the close of business on such record
date plus the number of additional shares of Common Stock so to be offered
for subscription or purchase, such adjustment to become effective
immediately after the opening of business on the day following such record
date. For purposes of this subsection (g), the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury
of the Corporation but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock.
Options, rights or warrants issued by the Corporation to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
Equity Securities, which options rights or warrants (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and
(iii) are also issued in respect of future issuances of Common Stock,
including shares of Common Stock issued upon exercise of the Series F
Preferred Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events (a "TRIGGER EVENT"), shall for
purposes of this subsection (g) not be deemed issued until the occurrence
of the earliest Trigger Event.
(h) SPECIAL DIVIDENDS. In case the Corporation after the date hereof
shall distribute to all holders of shares of Common Stock evidences of its
indebtedness or assets (excluding any regular periodic cash dividend),
Equity Securities (other than Common Stock) or rights to subscribe
(excluding those referred to in subsection (g) above) for Equity Securities
other than Common Stock, in each such case the Conversion Price in effect
immediately prior to the close of business on the record date for the
determination of stockholders entitled to receive such distribution shall
be adjusted to a price obtained by multiplying such Conversion Price by a
fraction of which (x) the numerator shall be the Common Stock's Fair Market
Value on such record date, less the then-current fair market value as of
such record date (as determined in accordance with
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Section 4(b)) of the portion of assets or evidences of indebtedness or
Equity Securities or subscription rights so distributed applicable to
one share of Common Stock, and (y) the denominator shall be the Common
Stock's Fair Market Value, such adjustment to become effective
immediately prior to the opening of business on the day following such
record date; PROVIDED, HOWEVER, that no adjustment shall be made if the
Corporation issues or distributes to each holder of Series F Preferred
Stock the subscription rights referred to above that each holder of
Series F Preferred Stock would have been entitled to receive had the
Series F Preferred Stock held by such holder been converted prior to
such record date. The Corporation shall provide any holder of Series F
Preferred Stock, upon receipt of a written request therefor, with any
indenture or other instrument defining the rights of the holders of any
indebtedness, assets, subscription rights or Equity Securities referred
to in this subsection (h). Rights, options or warrants issued by the
Corporation to all holders of Common Stock entitling the holders thereof
to subscribe for or purchase Equity Securities, which rights, options or
warrants (i) are deemed to be transferred with such shares of Common
Stock, (ii) are not exercisable and (iii) are also issued in respect of
future issuances of Common Stock, including shares of Common Stock
issued upon exercise of the Series F Preferred Stock, in each case in
clauses (i) through (iii) until the occurrence of a Trigger Event, shall
for purposes of this subsection (h) not be deemed issued until the
occurrence of the earliest Trigger Event.
(i) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND SUBSTITUTION. In
the event that at any time or from time to time the Common Stock issuable
upon the conversion of the Series F Preferred Stock is changed into the
same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets, provided for elsewhere in this
Section 7), then and in any such event each holder of Series F Preferred
Stock shall have the right thereafter to convert such stock into the kind
and amount of stock and other securities and property receivable upon such
recapitalization, reclassification or other change, by holders of the
maximum number of shares of Common Stock into which such shares of Series F
Preferred Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further
adjustment as provided herein.
(j) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If
at any time or from time to time there is a capital reorganization of the
Common Stock (other than a recapitalization, subdivision, combination,
reclassification or exchange of shares provided for elsewhere in this
Section 7) or a merger or consolidation of the Corporation with or into
another corporation, or the sale of all or substantially all of the
Corporation and its subsidiaries' properties and assets to any other
Person, then, as a part of such reorganization, merger, consolidation or
sale, provision shall be made so that the holders of the Series F Preferred
Stock shall thereafter be entitled to receive upon conversion of the Series
F Preferred Stock the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock
deliverable upon conversion would have been entitled on such capital
reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment shall be made in the application of the provisions
of this Section 7 with respect to the rights of the holders of the Series F
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Preferred Stock after the reorganization, merger, consolidation or sale to
the end that the provisions of this Section 7 (including adjustment of the
appropriate Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series F Preferred Stock) shall be
applicable after that event and be as nearly equivalent as may be
practicable.
(k) If any event occurs as to which Sections 7(e), 7(f), 7(g), 7(h),
7(i) and 7(j) are not strictly applicable or, if strictly applicable, would
not fairly and adequately protect the conversion rights of the Series F
Preferred Stock in accordance with the essential intent and principles of
such provisions, then there shall be made such adjustments in the
application of such provisions, in accordance with such essential intent
and principles, as shall be reasonably necessary to protect such conversion
rights as aforesaid.
(l) FURTHER ADJUSTMENT. The Conversion Price shall be reduced by
$.005 on each of the first eight anniversaries of the Original Issue Date,
which adjustment shall be prorated on a daily basis during each twelve
month period between such anniversaries.
(m) WHEN ADJUSTMENT NOT REQUIRED. If the Corporation shall take a
record of the holders of its Common Stock for purposes of taking any action
that requires an adjustment of the Conversion Price under this Section 7,
and shall, thereafter and before the effective date of such action, legally
abandon its plan to take such action, then thereafter no adjustment shall
be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
(n) ACCOUNTANTS' CERTIFICATE OF ADJUSTMENT. Except as provided in
Section 7(d), in each case of an adjustment or readjustment of the
Conversion Price or the number of shares of Common Stock or other
securities issuable upon conversion of the Series F Preferred Stock, the
Corporation, at its expense, shall cause independent public accountants of
recognized standing selected by the Corporation (who may be the independent
public accountants then auditing the books of the Corporation) to compute
such adjustment or readjustment in accordance with the provisions hereof
and prepare a certificate showing such adjustment or readjustment, and
shall mail such certificate, by first class mail, postage prepaid, to each
registered holder of the Series F Preferred Stock at the holder's address
as shown in the Corporation's books; PROVIDED that the Corporation shall be
required to deliver such a certificate to holders of Series F Preferred
Stock in connection with the adjustments required pursuant to Section 7(l)
only (i) once each year, within 45 days following the anniversary of the
Original Issue Date, which will reflect all adjustments made through such
anniversary, and (ii) no later than five days following the setting of any
record date to determine the stockholders of the Corporation entitled to
vote at any meeting of stockholders, which will reflect all adjustments
made through such record date. The certificate shall set forth such
adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based.
(o) NOTICES OF RECORD DATE. In the event of (i) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any capital
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reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation, any merger or
consolidation of the Corporation with or into any other corporation, or
any transfer of all or substantially all of the assets of the
Corporation to any other person or any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, the
Corporation shall mail to each holder of Series F Preferred Stock at
least thirty (30) days prior to the record date specified therein, a
notice specifying (1) the date on which any such record is to be taken
for the purpose of such dividend or distribution and a description of
such dividend or distribution, (2) the date on which any such
reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up is expected to become effective,
and (3) the date, if any, that is to be fixed, as to when the holders of
record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for
securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up.
(p) FRACTIONAL SHARES. Fractional shares of Common Stock otherwise
issuable upon conversion of shares of Series F Preferred Stock held by a
single holder shall be aggregated into whole shares and issued to such
holder. Otherwise, no fractional shares of Common Stock shall be issued
upon conversion of the Series F Preferred Stock. Except as provided above,
in lieu of any fractional share to which the holder would otherwise be
entitled, the Corporation shall pay cash equal to the product of such
fraction multiplied by the Common Stock's Fair Market Value on the date of
conversion.
(q) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series F Preferred Stock, such number of
its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Series F Preferred
Stock; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series F Preferred Stock, the Corporation will
take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
(r) NOTICES. Any notice required or permitted by this Section 7 or
any other provision of this Certificate of Designation to be given to a
holder of Series F Preferred Stock or to the Corporation shall be in
writing and be deemed given upon the earlier of actual receipt or three (3)
days after the same has been deposited in the United States mail, by
certified or registered mail, return receipt requested, postage prepaid,
and addressed (i) to each holder of record at the address of such holder
appearing on the books of the Corporation, or (ii) to the Corporation at
7880 Bent Branch Drive, Suite 150, Irving, Texas 75063, or (iii) to the
Corporation or any holder, at any other address specified in a written
notice given to the other for the giving of notice.
(s) PAYMENT OF TAXES. The Corporation will pay all taxes (other than
taxes based upon income) and other governmental charges that may be imposed
with respect to the
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issue or delivery of shares of Common Stock upon conversion of shares of
Series F Preferred Stock, including without limitation any tax or other
charge imposed in connection with any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which
the shares of Series F Preferred Stock, so converted were registered.
(t) NO DILUTION OR IMPAIRMENT. The Corporation shall not amend its
certificate of incorporation or participate in any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action for the purpose of avoiding or seeking to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in carrying out all such action as may be reasonably necessary or
appropriate in order to protect the conversion rights of the holders of the
Series F Preferred Stock against dilution or other impairment.
Section 8. RESTRICTIONS AND LIMITATIONS. So long as any shares of
Series F Preferred Stock remain outstanding, the Corporation shall not, and
shall not permit any Subsidiary to, without the prior vote or written consent by
the holders of a Majority of the Series F Preferred Stock:
(a) Authorize, create or issue any new class or series of capital
stock or any other securities convertible into equity securities of the
Corporation (other than Common Stock) having a preference over, or being on
parity with, the Series F Preferred Stock with respect to voting,
dividends, redemption, liquidation or dissolution of the Corporation;
(b) Increase or decrease (other than by redemption or conversion) the
total number of authorized shares of Series F Preferred Stock;
(c) Increase or decrease the par value of the Series F Preferred
Stock;
(d) Alter or change the powers, preferences or special rights of the
Series F Preferred Stock so as to affect them adversely;
(e) Engage in any transaction described in clauses (c) and (d) of the
definition of Change in Control, provided that, notwithstanding anything to
the contrary herein, the rights of the holders of Series F Preferred Stock
pursuant to this Section 8(e) shall terminate at such time as the aggregate
Investment Value of all the Series F Preferred Stock outstanding is less
than $5 million; or
(f) Declare or pay any dividend (whether in cash or in shares of
Common Stock or any other capital stock of the Corporation) on or declare
or make any other distribution, direct or indirect, on account of the
Junior Stock or set apart any sum for any such purpose.
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Section 9. NO REISSUANCE OF SERIES F PREFERRED STOCK. No share or
shares of Series F Preferred Stock acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be reissued, and, upon such
event, all such shares shall resume the status of authorized but unissued shares
of Preferred Stock.
Section 10. MISCELLANEOUS. Dollar amounts herein that appear within
parentheses represent negative numbers. All references in this Agreement to
Sections of or Rules under the Securities Act or the Exchange Act are intended
to include, and shall be deemed to include, references to all successor Sections
and Rules which are intended to replace the Sections and Rules herein
referenced.
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[SIGNATURE PAGE OF CERTIFICATE OF DESIGNATION]
IN WITNESS WHEREOF, the undersigned hereby executes this document and
affirms that the facts set forth herein are true under penalty of perjury this
10th day of December, 1999.
AEGIS COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By: /s/ Stephen A. McNeely
-------------------------------------
Stephen A. McNeely
President and Chief Executive Officer
ATTEST:
By: /s/ Jerry L. Sims, Jr.
------------------------------
Jerry L. Sims, Jr., Secretary
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<PAGE>
EXHIBIT 4.2
AMENDMENT TO
SERIES D AND E PREFERRED STOCK
CERTIFICATE OF DESIGNATION
OF
-------------------------------
AEGIS COMMUNICATIONS GROUP, INC.
(A DELAWARE CORPORATION)
-------------------------------
(PURSUANT TO SECTION 242 OF THE GENERAL CORPORATION LAW OF THE STATE OF
DELAWARE)
Aegis Communications Group, Inc., a corporation organized
and existing under the laws of the State of Delaware (the "CORPORATION"),
DOES HEREBY CERTIFY THAT:
WHEREAS, pursuant to authority conferred upon the Board of
Directors of the Corporation (the "BOARD") by the Amended and Restated
Certificate of Incorporation of the Corporation (the "CERTIFICATE") and
Section 242 of the General Corporation Law of the State of Delaware (the
"DGCL"), the following resolutions were duly adopted by a majority of the
holders of Series D Preferred Stock and Series E Preferred Stock and by a
majority of the Board at a special meeting held on August 20, 1999, which
resolutions are still in full force and effect and are not in conflict with
any provisions of the Certificate or Bylaws of the Corporation or any
certificate of designation filed by the Corporation pursuant to Section 242
of the DGCL, and which resolutions amend and restate in their entirety the
resolutions adopted by unanimous written consent of the Board dated June 30,
1999;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to authority
vested in the Board by the Certificate and Section 242 of the DGCL a series
of Preferred Stock of the Corporation to be known as "SERIES D PREFERRED
STOCK" and a series of Preferred Stock of the Corporation to be known as
"SERIES E PREFERRED STOCK" are hereby established and provided for and the
Board of Directors hereby fixes, states and expresses the powers,
designation, preferences and relative, participating, optional and other
special rights of such series and the qualifications, limitations or
restrictions of such series, as follows:
I. DESIGNATION. The Board does hereby provide for the
issuance of two new series of Preferred Stock of the Corporation, to be
designated and known as Series D Preferred Stock and Series E Preferred Stock.
II. NUMBER OF SHARES. The number of shares constituting the
Series D Preferred Stock shall be and the same is hereby fixed at 231,902,
and the number of shares constituting the Series E Preferred Stock shall be
and the same is hereby fixed at 132,053.
III. CAPITAL. For the purpose of Section 154 of the DGCL
the amount to be represented as capital for each share of Series D Preferred
Stock is and shall at all times be $100.00, and the amount to be represented
as capital for each share of Series E Preferred Stock is and shall at all
times be $100.00.
<PAGE>
Section 1. DEFINITIONS.
(a) For purposes of this Certificate of
Designation, the following definitions shall apply:
"BUSINESS DAY" shall mean a day which is not a
Saturday, Sunday or legal holiday on which banking institutions in New York
are authorized to close.
"COMMON STOCK" shall mean the common stock, par
value $.01 per share, of the Corporation.
"COMMON STOCK'S FAIR MARKET VALUE" shall mean, as
of any date, the fair market value of a share of Common Stock on such date.
Such fair market value on a date shall mean (i) if shares of the Common Stock
are listed on a national securities exchange, the average of the closing
prices as reported for composite transactions during the 20 consecutive
trading days preceding the trading day immediately prior to such date or, if
no sale occurred on a trading day, then the mean between the closing bid and
asked prices on such exchange on such trading day; (ii) if shares of the
Common Stock are traded on the Nasdaq National Market ("NMM"), the average of
the closing prices as reported on the NMM during the 20 consecutive trading
days preceding the trading day immediately prior to such date or, if no sale
occurred on a trading day, then the mean between the highest bid and lowest
asked prices as of the close of business on such trading day, as reported on
the NMM; (iii) if the shares of the Common Stock are not traded on a national
securities exchange or the NMM but are otherwise traded over-the-counter, the
arithmetic average (for consecutive trading days) of the mean between the
highest bid and lowest asked prices as of the close of business during the 20
consecutive trading days preceding the trading day immediately prior to such
date as quoted on the National Association of Securities Dealers Automated
Quotation system or an equivalent generally accepted reporting service; or
(iv) if there is no active market for the Common Stock, the fair market value
thereof as mutually determined by the Corporation and the holders of a
Majority of the Series D and E Preferred Stock.
"DIVIDEND RATE" means 15% per annum.
"INVESTMENT VALUE" of any share of Series D
Preferred Stock or share of Series E Preferred Stock, as the case may be,
means, as of any date, the sum of (i) the Per Share Amount for such Preferred
Stock, plus (ii) the amount of any unpaid dividends on such share added to
the Investment Value of such share on any Dividend Reference Date pursuant to
Section 2(a); and in the event of any liquidation, dissolution or winding up
of the Corporation, within the meaning of Section 3, or a merger,
consolidation or other transaction involving the Corporation described in
Section 4, or the redemption of such share, unpaid dividends on such share,
whether or not earned or declared, will be added to the Investment Value of
such share on the payment or distribution date under Section 3 or 4, as the
case may be, or on the Redemption Date (as defined in Section 5), as the case
may be, calculated cumulatively on a quarterly basis to the close of business
on such payment date, distribution date, or Redemption Date, as the case may
be.
"JUNIOR STOCK" shall mean the Common Stock and all
other shares of capital stock of the Corporation, whether presently outstanding
or hereafter issued,
<PAGE>
other than Series D Preferred Stock, Series E Preferred Stock, the Series B
Preferred Stock and the Series F Preferred Stock.
"MAJORITY OF THE SERIES D AND E PREFERRED STOCK"
shall mean more than 50% of the outstanding shares of Series D Preferred
Stock and Series E Preferred Stock.
"ORIGINAL ISSUE DATE" shall mean the first date on
which shares of Series D Preferred Stock or Series E Preferred Stock are
issued.
"OUTSTANDING OPTIONS" shall mean rights granted
under the Corporation's 1996 Stock Exchange Rights Plan, options granted
under the Corporation's 1992 Stock Option Plan, and options granted under the
Corporation's 1996 Stock Option and Restricted Stock Plan.
"OUTSTANDING WARRANTS" shall mean:
(i) warrants to purchase an aggregate of 1,000,000 shares
of Common Stock issued pursuant to that certain Securities Exchange Agreement
dated June 30, 1999 by and among the Corporation, Thayer, Edward Blank, The
Edward Blank 1995 Grantor Retained Annuity Trust and ITC Service Company;
(ii) warrants to purchase an aggregate of 350,000 shares of
Common Stock issued pursuant to that certain Commitment Letter dated July 2,
1998 from Thayer to the Corporation; and
(iii) a warrant to purchase an aggregate of 1,000,000
shares of Common Stock issued pursuant to that certain Reimbursement and
Indemnification Agreement dated May 4, 1998 by and among the Corporation,
Advanced Telemarketing Corporation, a Nevada corporation, and Thayer.
"PER SHARE AMOUNT" means $100.00 (appropriately
adjusted for subdivisions or combinations of the Series D Preferred Stock or
Series E Preferred Stock, as the case may be).
"PERSON" means an individual, corporation,
partnership, association, trust, limited liability company or any other
entity or organization, including a government or political subdivision or an
agency, unit or instrumentality thereof.
"PREFERRED STOCK" means Preferred Stock, $.01 par
value per share, of the Corporation.
"SERIES B CERTIFICATE OF DESIGNATION" means the
Certificate of Designation of the Series B Preferred Stock filed with the
Delaware Secretary of State on July 9, 1998.
"SERIES B PREFERRED STOCK" shall mean the Series B
Preferred Stock, par value $.01 per share, of the Corporation.
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<PAGE>
"SERIES D CERTIFICATE OF DESIGNATION" means the
Certificate of Designation of the Series D Preferred Stock filed with the
Delaware Secretary of State on June 30, 1999 and amended on December 10, 1999.
"SERIES D PREFERRED STOCK" shall mean the Series D
Preferred Stock, par value $.01 per share, of the Corporation.
"SERIES E CERTIFICATE OF DESIGNATION" means the
Certificate of Designation of the Series E Preferred Stock filed with the
Delaware Secretary of State on June 30, 1999 and amended on December 10, 1999.
"SERIES E PREFERRED STOCK" shall mean the Series E
Preferred Stock, par value $.01 per share, of the Corporation.
"SERIES F PREFERRED STOCK" shall mean the Series F
Preferred Stock, par value $.01 per share, of the Corporation.
"SERIES F CERTIFICATE OF DESIGNATION" shall mean
the Certificate of Designation of the Series F Preferred filed with the
Delaware Secretary of State on December 10, 1999.
"SUBSIDIARY" shall mean, with respect to the
Corporation, any Person of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by the Corporation or a Subsidiary of the Corporation.
"THAYER" shall mean Thayer Equity Investors III,
L.P., a Delaware limited partnership.
"VOTING STOCK" shall mean any shares having
general voting power in electing the Board (irrespective of whether or not at
the time stock of any other class or classes has or might have voting power
by reason or the happening of any contingency). The Common Stock is Voting
Stock.
Section 2. DIVIDENDS.
(a) RIGHT TO DIVIDENDS.
(i) Each of the holders of record of the
Series D Preferred Stock and the holders of record of the Series E Preferred
Stock shall be entitled to receive, when and as declared by the Board, and
out of any funds legally available therefor, cumulative dividends at the rate
and in the manner provided herein in preference to the payment of dividends
on any Junior Stock. Dividends on each of the Series D Preferred Stock and
the Series E Preferred Stock shall accumulate and accrue on each such share
from the date of its original issue and shall accumulate and accrue from day
to day thereafter, whether or not earned or declared. Such dividends shall be
cumulative so that if such dividends in respect of any previous or current
quarterly dividend period,
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<PAGE>
at the rate specified herein, shall not have been paid or declared and a sum
sufficient for the payment thereof set apart, the deficiency shall first be
fully paid before any dividend or other distribution shall be paid or
declared and set apart for any Junior Stock. Any accumulation of dividends on
the Series D Preferred Stock or the Series E Preferred Stock shall not bear
interest. Dividends shall accumulate and accrue on each share of Series D
Preferred Stock and on each share of Series E Preferred Stock from the
Original Issue Date and shall not be affected by the transfer of shares of
Series D Preferred Stock or Series E Preferred Stock thereafter or the
cancellation and issuance or reissuance of certificates evidencing such
shares.
(ii) Dividends will be calculated
cumulatively on a quarterly basis on each share of Series D Preferred Stock
and on each share of Series E Preferred Stock at the Dividend Rate per annum
on the Investment Value thereof. To the extent not paid on any March 31, June
30, September 30 or December 31 of any year (each a "DIVIDEND REFERENCE
DATE"), commencing June 30, 1999, all dividends which have been calculated on
each share of Series D Preferred Stock and on each share of Series E
Preferred Stock then outstanding during the three-month period (or other
period in the case of the first Dividend Reference Date) ending on such
Dividend Reference Date, whether or not earned or declared, will be added to
the Investment Value of such share and will remain a part thereof until such
dividends are paid. If any Dividend Reference Date is not a Business Day, the
dividend otherwise due on such date shall be paid on the next following
Business Day (and this extension shall be included in the determination of
such dividend payment).
(iii) The Corporation shall make all
quarterly dividend payments on the Series D Preferred Stock by issuing
additional shares of Series D Preferred Stock (a "D PIK DIVIDEND") to the
holders of all then outstanding Series D Preferred Stock, with each share of
Series D Preferred Stock to be issued in payment of a D PIK Dividend being
valued, for this purpose, at $100.00 per share (appropriately adjusted for
subdivisions or combinations of the Series D Preferred Stock). The D PIK
Dividend paid to any holder of Series D Preferred Stock may include the
issuance of a fractional share of Series D Preferred Stock, which fractional
share shall have the proportional powers, preferences, rights and privileges
of a whole share of Series D Preferred Stock.
(iv) The Corporation shall make all
quarterly dividend payments on the Series E Preferred Stock by issuing
additional shares of Series E Preferred Stock (an "E PIK DIVIDEND") to the
holders of all then outstanding Series E Preferred Stock, with each share of
Series E Preferred Stock to be issued in payment of an E PIK Dividend being
valued, for this purpose, at $100.00 per share (appropriately adjusted for
subdivisions or combinations of the Series E Preferred Stock). The E PIK
Dividend paid to any holder of Series E Preferred Stock may include the
issuance of a fractional share of Series E Preferred Stock, which fractional
share shall have the proportional powers, preferences, rights and privileges
of a whole share of Series E Preferred Stock.
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<PAGE>
(b) PRIORITY.
(i) Unless full dividends on the Series
B Preferred Stock for all past dividend periods and the then current dividend
period shall have been paid or declared and a sum sufficient for the payment
thereof set apart, and unless full dividends on the Series F Preferred Stock
for all past dividend periods and the then current dividend period shall have
been paid, or added to the investment value in accordance with the Series F
Certificate of Designation, (1) no dividend whatsoever (other than a dividend
payable solely in Common Stock) shall be paid or declared, and no
distribution shall be made, on any share of Series D Preferred Stock, Series
E Preferred Stock or Junior Stock, and (2) no shares of Series D Preferred
Stock, Series E Preferred Stock or Junior Stock shall be purchased, redeemed
or acquired by the Corporation (other than a redemption pursuant to Section 5
hereof) and no monies shall be paid into or set aside or made available for a
sinking fund for the purchase, redemption or acquisition thereof; PROVIDED,
HOWEVER, that this restriction shall not apply to the repurchase of shares of
Common Stock from directors or employees of or consultants or advisers to the
Corporation or any Subsidiary pursuant to agreements under which the
Corporation has the option to repurchase such shares upon the occurrence of
certain events, including without limitation the termination of employment by
or service to the Corporation or any Subsidiary.
(ii) Unless full dividends on the Series
D Preferred Stock and the Series E Preferred Stock for all past dividend
periods and the then current dividend period shall have been paid by the
issuance of D PIK Dividends or E PIK Dividends, as the case may be,
sufficient for the payment thereof, (1) no dividend whatsoever (other than a
dividend payable solely in Common Stock) shall be paid or declared, and no
distribution shall be made, on any share of Junior Stock, and (2) no shares
of Junior Stock shall be purchased, redeemed or acquired by the Corporation
and no monies shall be paid into or set aside or made available for a sinking
fund for the purchase, redemption or acquisition thereof; PROVIDED, HOWEVER,
that this restriction shall not apply to the repurchase of shares of Common
Stock from directors or employees of or consultants or advisers to the
Corporation or any Subsidiary pursuant to agreements under which the
Corporation has the option to repurchase such shares upon the occurrence of
certain events, including without limitation the termination of employment by
or service to the Corporation or any Subsidiary.
(c) ADDITIONAL DIVIDENDS. After cumulative
dividends on the Series B Preferred Stock, the Series F Preferred Stock, the
Series D Preferred Stock and the Series E Preferred Stock for all past
dividend periods and the then current dividend period shall have been
declared and paid or set apart, with respect to Series B Preferred Stock, or
added to the investment value in accordance with the Series F Certificate of
Designation, with respect to the Series F Preferred Stock, or declared and
paid by the issuance of D PIK Dividends and E PIK Dividends sufficient for
the payment thereof, with respect to Series D Preferred Stock and Series E
Preferred Stock, respectively, if the Board shall elect to declare additional
dividends, such additional dividends shall be declared in equal amounts per
share on all shares of Series D Preferred Stock, Series E Preferred Stock,
the Series B Preferred Stock, the Series F Preferred Stock and Common Stock,
but with each share of Series D Preferred Stock, Series E Preferred Stock,
the
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Series F Preferred Stock and the Series B Preferred Stock being entitled to
dividends based upon the number of shares of Common Stock into which such
share of Series D Preferred Stock, Series E Preferred Stock, the Series F
Preferred Stock or Series B Preferred Stock, as the case may be, could be
converted, in accordance with provisions of the Series D Certificate of
Designation, the Series E Certificate of Designation, the Series F
Certificate of Designation or the Series B Certificate of Designation, as the
case may be, at the record date for the determination of stockholders
entitled to receive such dividend or, if no such record date is established,
on the date such dividend is declared.
Section 3. LIQUIDATION RIGHTS OF SERIES D PREFERRED
AND SERIES E PREFERRED STOCK.
(a) SERIES B PREFERRED STOCK AND THE SERIES F
PREFERRED STOCK PREFERENCE. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders
of the Series B Preferred Stock and the Series F Preferred Stock then
outstanding shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, whether such assets are
capital, surplus, or earnings, before any payment or declaration and setting
apart for payment of any amount shall be made in respect of the Series D
Preferred Stock, the Series E Preferred Stock or the Junior Stock, the amount
specified in Section A(iii) of the Series B Certificate of Designation or in
the Series F Certificate of Designation, as the case may be.
(b) SERIES D PREFERRED STOCK AND SERIES E
PREFERRED STOCK PREFERENCE. After the payment or distribution to the holders
of the Series B Preferred Stock of the full preferential amounts aforesaid,
the holders of the Series D Preferred Stock and the holders of the Series E
Preferred Stock then outstanding shall be entitled to be paid, out of the
assets of the Corporation available for distribution to its stockholders,
whether such assets are capital, surplus, or earnings, before any payment or
declaration and setting apart for payment of any amount shall be made in
respect of the Junior Stock, an amount equal to the Investment Value per
share with respect to Series D Preferred Stock and the Investment Value per
share with respect to Series E Preferred Stock on the date of payment. If
upon any liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary, the assets to be distributed to the holders of the
Series D Preferred Stock and the holders of Series E Preferred Stock under
this Section 3(b) shall be insufficient to permit the payment to such
stockholders of the full preferential amounts therein, then all of the assets
of the Corporation to be distributed shall be distributed ratably to the
holders of the Series D Preferred Stock and the holders of the Series E
Preferred Stock on the basis of the number of shares of Series D Preferred
Stock and Series E Preferred Stock held.
(c) REMAINING ASSETS. After the payment or
distribution to the holders of the Series D Preferred Stock, the Series E
Preferred Stock, the Series F Preferred Stock and the Series B Preferred
Stock of the full preferential amounts aforesaid, the holders of the Common
Stock, the Series F Preferred Stock, the Series D Preferred Stock and the
Series E Preferred Stock shall be entitled to receive ratably all remaining
assets of the Corporation to be distributed, but with all holders of shares
of the Series F Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock treated
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(for this purpose only ) as if they had converted their shares of the Series
F Preferred Stock, Series D Preferred Stock and Series E Preferred Stock into
Common Stock.
Section 4. MERGER, CONSOLIDATION.
(a) At any time, in the event of:
(1) any consolidation or merger of the
Corporation with or into any other corporation or other entity or person
(other than a merger of a wholly owned subsidiary into the Corporation), or
(2) a sale or other disposition of all or
substantially all of the assets of the Corporation, then:
(A) holders of the Series B Preferred
Stock shall receive, for each share of such stock in cash or in securities
(including, without limitation, debt securities) received from the acquiring
corporation, or a combination thereof, at the closing of any such
transaction, the amount specified in Section A(iii) of the Series B
Certificate of Designation;
(B) after the payment or distribution to
the holders of the Series B Preferred Stock of the full preferential amounts
stated in Section 4(a)(2)(A) hereof, and after any applicable payment to
holders of the Series F Preferred Stock in accordance with the Series F
Certificate of Designation, holders of the Series D Preferred Stock and the
holders of the Series E Preferred Stock shall receive, for each share of such
stock in cash or in securities (including, without limitation, debt
securities) received from the acquiring corporation, or a combination
thereof, at the closing of any such transaction, an amount equal to the
Investment Value per share with respect to Series D Preferred Stock and the
Investment Value per share with respect to Series E Preferred Stock, as of
the date of full payment thereof; PROVIDED HOWEVER, in the event of any such
transaction, if the amounts available to be distributed to the holders of the
Series D Preferred Stock and the Series E Preferred Stock shall be
insufficient to permit the payment to such stockholder of the full amounts
provided for in this Section 4(a)(2)(B), then the amounts to be so
distributed shall be distributed ratably to the holders of the Series D
Preferred Stock and the Series E Preferred Stock on the basis of the number
of shares of Series D Preferred Stock and Series E Preferred Stock held; and
(C) after the payment or distribution to
the holders of the Series D Preferred Stock and the Series E Preferred Stock
of the full preferential amounts stated in Section 4(a)(2)(B) hereof, the
remaining proceeds of such transaction shall be distributed ratably to the
holders of Junior Stock then outstanding.
(b) Any securities or other property to be delivered
to the holders of the Series D Preferred Stock, Series E Preferred Stock, the
Series B Preferred Stock or Junior Stock pursuant to Section 4(a) hereof shall
be valued as follows:
(1) Securities not subject to investment
letter or other similar restrictions on free marketability:
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(A) If traded on a securities
exchange, the value shall be deemed to be the average of the closing prices
of the securities on such exchange over the 30-day period ending three (3)
days prior to the closing;
(B) If actively traded
over-the-counter, the value shall be deemed to be the average of the closing
bid prices over the 30-day period ending three (3) days prior to the closing;
and
(C) If there is no active public
market, the value shall be the fair market value thereof, as mutually
determined by the Corporation and the holders of a Majority of the Series D
and E Preferred Stock.
(2) The method of valuation of securities
subject to investment letter or other restrictions on free marketability
shall be to make appropriate discount from the market value determined as
above in paragraph (1)(A), (B) or (C) to reflect the approximate fair market
value thereof, as mutually determined by the Corporation and the holders of a
Majority of the Series D and E Preferred Stock.
(3) All other securities or other
property shall be valued at the fair market value thereof, as mutually
determined by the Corporation and the holders of a Majority of the Series D
and E Preferred Stock.
(4) If the holders of a Majority of the
Series D and E Preferred Stock and the Corporation are unable to reach
agreement on any valuation matter, such valuation shall be submitted to and
determined by a nationally recognized independent investment banking firm
selected by the Board and the holders of a Majority of the Series D and E
Preferred Stock (or, if such selection cannot be made, by a nationally
recognized independent investment banking firm selected by the American
Arbitration Association in accordance with its rules).
(c) In the event the requirements of Section
4(a) hereof are not complied with, the Corporation shall forthwith either:
(1) Cause such closing to be postponed
until such time as the requirements of this Section 4 have been complied
with; or
(2) Cancel such transaction, in which
event the rights, preferences and privileges of the holders of the Series D
Preferred Stock and the holders of the Series E Preferred Stock shall revert
to and be the same as such rights, preferences and privileges existing
immediately prior to the date of the first notice referred to in Section 4(d)
hereof.
(d) The Corporation shall give each holder of
record of Series D Preferred Stock and each holder of record of Series E
Preferred Stock written notice of such impending transaction not later than
thirty (30) days prior to the stockholders' meeting called to approve such
transaction, or thirty (30) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the
final approval of such transaction. The first of such notices shall describe
the material terms
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and conditions of the impending transaction and the provisions of this
Section 4, and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than thirty (30) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the Corporation has
given notice of any material changes provided for herein; provided, however,
that such periods may be shortened upon the written consent of the holders of
a Majority of the Series D and E Preferred Stock.
(e) The provisions of this Section 4 are in
addition to the protective provisions of Section 8 hereof.
Section 5. REDEMPTION.
(a) RESTRICTION ON REDEMPTION AND PURCHASE. Except
as expressly provided in this Section 5, the Corporation shall not have the
right to purchase, call, redeem or otherwise acquire for value any or all of
the Series D Preferred Stock or Series E Preferred Stock.
(b) REDEMPTION. At any time after the Original
Issue Date, the Corporation may, at its option, redeem the Series D Preferred
Stock and the Series E Preferred Stock in whole, but not in part, at the
Redemption Price hereinafter specified; PROVIDED, HOWEVER, that if the
Corporation should elect to redeem the Series D Preferred Stock and the
Series E Preferred Stock, the Corporation must redeem both such series of
Preferred Stock; PROVIDED, FURTHER, that the Corporation shall not be
entitled to redeem the Series D Preferred Stock and the Series E Preferred
Stock or give notice of any redemption unless the Corporation has sufficient
and lawful funds to redeem all of the then outstanding Series D Preferred
Stock and Series E Preferred Stock. The date on which the Series D Preferred
Stock and the Series E Preferred Stock is to be redeemed pursuant to this
Section 5(b) is herein called the "REDEMPTION DATE."
(c) REDEMPTION PRICE. The Redemption Price per
share of the Series D Preferred Stock or the Series E Preferred Stock, as the
case may be (the "REDEMPTION PRICE"), shall be the Investment Value per share
thereof and shall be paid, at the Corporation's election, in cash or by the
issuance of a convertible promissory note. With respect to Series D Preferred
Stock, such convertible promissory note shall (i) bear interest at the rate
of 12% per annum with such interest payable quarterly in kind, (ii) mature on
a date determined by the Corporation's Board of Directors with all unpaid
principal and accrued and unpaid interest due on such date, unless
accelerated prior to such date upon the occurrence of customary defaults,
(iii) be convertible into Common Stock at the rate of $2.00 per share
(subject to adjustments of the type set forth in Section 7 hereof), with
respect to and (iv) be subordinated to existing senior bank indebtedness.
With respect to Series E Preferred Stock, such convertible promissory note
shall (1) bear interest at the rate of 12% per annum with such interest
payable quarterly in kind, (2) mature on a date determined by the
Corporation's Board of Directors with all unpaid principal and accrued and
unpaid interest due on such date, unless accelerated prior to such date upon
the occurrence of customary defaults, (3) be convertible into Common Stock at
the rate of $2.375 per share (subject to adjustments of the type set forth in
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Section 7 hereof), with respect to and (4) be subordinated to existing senior
bank indebtedness.
(d) REDEMPTION NOTICE. The Corporation shall, not
less than thirty (30) days nor more than sixty (60) days prior to the
Redemption Date give written notice ("REDEMPTION NOTICE") to each holder of
record of Series D Preferred Stock and each holder of Series E Preferred
Stock to be redeemed. The Redemption Notice shall state:
(1) That all of the outstanding shares of Series D Preferred
Stock and Series E Preferred Stock are to be redeemed and the
total number of shares being redeemed;
(2) The number of shares of Series D Preferred Stock and/or
Series E Preferred Stock held by the holder which the
Corporation will redeem, and the form of consideration to be
paid (i.e., cash or convertible promissory note);
(3) The Redemption Date and the aggregate Redemption Price for
the shares of Series D Preferred Stock and/or Series E
Preferred Stock held by such holder;
(4) That the holder's right to convert the Series D Preferred
Stock and/or Series E Preferred Stock will terminate on the
Redemption Date; and
(5) The time, place and manner in which the holder is to
surrender to the Corporation the certificate or certificates
representing the shares of Series D Preferred Stock and/or
Series E Preferred Stock to be redeemed.
(e) PAYMENT OF REDEMPTION PRICE AND SURRENDER OF
STOCK. On the Redemption Date, the Redemption Price of the Series D Preferred
Stock and the Series E Preferred Stock scheduled to be redeemed or called for
redemption shall be payable to the holders of the Series D Preferred Stock
and the holders of the Series E Preferred Stock. On or before the Redemption
Date, each holder of Series D Preferred Stock and each holder of Series E
Preferred Stock to be redeemed, unless the holder has exercised its right to
convert the shares as provided in Section 7, shall surrender the certificate
or certificates representing such shares to the Corporation, in the manner
and at the place designated in the Redemption Notice, and thereupon the
Redemption Price for such shares shall be payable to the order of the person
whose name appears on such certificate or certificates as the owner thereof,
and each surrendered certificate shall be canceled and retired.
(f) TERMINATION OF RIGHTS. If the Redemption
Notice is duly given, and if at least ten (10) days prior to the Redemption
Date the Redemption Price per share of Series D Preferred Stock or Series E
Preferred Stock, as the case may be, to be redeemed is either paid or made
available for payment, then notwithstanding that the
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certificates evidencing any of the shares of Series D Preferred Stock or
Series E Preferred Stock so called or scheduled for redemption have not been
surrendered, all rights with respect to such shares shall forthwith after the
Redemption Date cease and terminate, except only (i) the right of the holders
to receive the Redemption Price per share of such Series D Preferred Stock or
Series E Preferred Stock without interest upon surrender of their
certificates therefor or (ii) the right to receive Common Stock plus
dividends upon exercise of the conversion rights provided in Section 7 on or
before the Redemption Date.
Section 6. VOTING RIGHTS. Each holder of shares of Common
Stock shall be entitled to one vote for each share thereof held. Except as
otherwise expressly provided herein or as required by law, neither the Series
D Preferred Stock nor the Series E Preferred Stock shall have voting rights.
Section 7. CONVERSION. The holders of Series D Preferred
Stock and the holders of Series E Preferred Stock shall have the following
conversion rights:
(a) RIGHT TO CONVERT. Each share of Series D
Preferred Stock and each share of Series E Preferred Stock shall be
convertible, at any time at the option of the holder thereof, into fully paid
and nonassessable shares of Common Stock.
(b) CONVERSION PRICE. The Series D Preferred Stock
shall be convertible into the number of shares of Common Stock which results
from dividing the D Conversion Price (as hereinafter defined) in effect at
the time of conversion into $100.00 for each share of Series D Preferred
Stock being converted. The Series E Preferred Stock shall be convertible into
the number of shares of Common Stock which results from dividing the E
Conversion Price (as hereinafter defined) in effect at the time of conversion
into $100.00 for each share of Series E Preferred Stock being converted. The
D Conversion Price shall be $2.00, subject to adjustment from time to time as
provided below (the "D CONVERSION PRICE"), and the E Conversion Price shall
be $2.375, subject to adjustment from time to time as provided below (the "E
CONVERSION PRICE"). The D Conversion Price and the E Conversion Price are
sometimes referred to hereinafter as the "CONVERSION PRICE."
(c) MECHANICS OF CONVERSION. Each holder of Series D
Preferred Stock or Series E Preferred Stock who desires to convert the same
into shares of Common Stock shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for the Series D Preferred Stock, Series E Preferred Stock or Common
Stock, and shall give written notice to the Corporation at such office that
such holder elects to convert the same and shall state therein the number of
shares of Series D Preferred Stock or Series E Preferred Stock, as the case
may be, being converted. Thereupon the Corporation shall promptly issue and
deliver to such holder a certificate or certificates for the number of shares
of Common Stock to which such holder is entitled and shall promptly pay in
cash or, if the Corporation is legally or financially unable to pay such
dividends in cash, Common Stock (valued at the Common Stock's Fair Market
Value at the time of surrender), all accumulated, accrued and unpaid
dividends on the shares of Series D Preferred Stock or Series E Preferred
Stock, as the case may be, being converted, whether or not earned or
declared, to and including the time of conversion. Such conversion shall be
deemed to
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have been made immediately prior to the close of business on the date of such
surrender of the certificate representing the shares of Series D Preferred
Stock or Series E Preferred Stock, as the case may be, to be converted, and
the Person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such
shares of Common Stock on such date.
(d) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If
the Corporation at any time or from time to time effects a stock split or
otherwise subdivides the outstanding Common Stock into a greater number of
shares, the Conversion Price then in effect immediately before that stock
split or subdivision shall be proportionately decreased, and conversely, if
the Corporation at any time or from time to time effects a reverse stock
split or otherwise combines the outstanding shares of Common Stock into a
smaller number of shares, the Conversion Price then in effect immediately
before the combination or reverse stock split shall be proportionately
increased. Any adjustment under this subsection (d) shall become effective at
the close of business on the date the stock split, subdivision, reverse stock
split or combination becomes effective.
(e) ADJUSTMENT FOR CERTAIN DIVIDENDS AND
DISTRIBUTIONS. If the Corporation at any time or from time to time makes, or
fixes a record date for the determination of holders of Common Stock entitled
to receive, a dividend or other distribution payable in additional shares of
Common Stock, then and in each such event the Conversion Price then in effect
shall be decreased as of the time of such issuance or, in the event such
record date is fixed, as of the close of business on such record date, by
multiplying the Conversion Price then in effect by a fraction (1) the
numerator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (2) the denominator of which shall be the
total number of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on such record
date, as the case may be, plus the number of shares of Common Stock issuable
in payment of such dividend or distribution; PROVIDED, HOWEVER, that if such
record date is fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the Conversion
Price shall be recomputed accordingly as of the close of business on such
record date, and thereafter the Conversion Price shall be adjusted pursuant
to this subsection (e) as of the time of actual payment of such dividends or
distributions.
(f) ADJUSTMENTS FOR OTHER DIVIDENDS AND
DISTRIBUTIONS. In the event the Corporation at any time or from time to time
makes, or fixes a record date for the determination of holders of Common
Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, then and in
each such event provision shall be made so that the holders of Series D
Preferred Stock and the holders of Series E Preferred Stock shall receive
upon conversion thereof, in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation which they
would have received had their Series D Preferred Stock or Series E Preferred
Stock, as the case may be, been converted into Common Stock on the date of
such event and had they thereafter, during the period from the date of such
event to and including the conversion date, retained such securities
receivable by them as aforesaid during such period, subject to all other
adjustments called
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for during such period under this Section 7 with respect to the rights of the
holders of the Series D Preferred Stock or Series E Preferred Stock, as the
case may be.
(g) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND
SUBSTITUTION. In the event that at any time or from time to time the Common
Stock issuable upon the conversion of the Series D Preferred Stock or Series
E Preferred Stock is changed into the same or a different number of shares of
any class or classes of stock, whether by recapitalization, reclassification
or otherwise (other than a subdivision or combination of shares or stock
dividend or a reorganization, merger, consolidation or sale of assets,
provided for elsewhere in this Section 7), then and in any such event each
holder of Series D Preferred Stock and each holder of Series E Preferred
Stock shall have the right thereafter to convert such stock into the kind and
amount of stock and other securities and property receivable upon such
recapitalization, reclassification or other change, by holders of the maximum
number of shares of Common Stock into which such shares of Series D Preferred
Stock or such shares of Series E Preferred Stock, as the case may be, could
have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided
herein.
(h) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR
SALES OF ASSETS. If at any time or from time to time there is a capital
reorganization of the Common Stock (other than a recapitalization,
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this Section 7) or a merger or consolidation of the Corporation
with or into another corporation, or the sale of all or substantially all of
the Corporation's properties and assets to any other Person, then, as a part
of such reorganization, merger, consolidation or sale, provision shall be
made so that the holders of the Series D Preferred Stock and the holders of
Series E Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series D Preferred Stock or Series E Preferred Stock, as
the case may be, the number of shares of stock or other securities or
property to which a holder of the number of shares of Common Stock
deliverable upon conversion would have been entitled on such capital
reorganization, merger, consolidation, or sale. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section
7 with respect to the rights of the holders of the Series D Preferred Stock
or Series E Preferred Stock, as the case may be, after the reorganization,
merger, consolidation or sale to the end that the provisions of this Section
7 (including adjustment of the appropriate Conversion Price then in effect
and the number of shares purchasable upon conversion of the Series D
Preferred Stock or Series E Preferred Stock, as the case may be) shall be
applicable after that event and be as nearly equivalent as may be practicable.
(i) ACCOUNTANTS' CERTIFICATE OF ADJUSTMENT. In each
case of an adjustment or readjustment of the Conversion Price or the number
of shares of Common Stock or other securities issuable upon conversion of the
Series D Preferred Stock or Series E Preferred Stock, the Corporation, at its
expense, shall cause independent public accountants of recognized standing
selected by the Corporation (who may be the independent public accountants
then auditing the books of the Corporation) to compute such adjustment or
readjustment in accordance with the provisions hereof and prepare a
certificate showing such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to each registered holder
of the Series D Preferred Stock
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and each registered holder of the Series E Preferred Stock at the holder's
address as shown in the Corporation's books. The certificate shall set forth
such adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based.
(j) NOTICES OF RECORD DATE. In the event of (i) any
taking by the Corporation of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or (ii) any capital
reorganization of the Corporation, any reclassification or recapitalization
of the capital stock of the Corporation, any merger or consolidation of the
Corporation with or into any other corporation, or any transfer of all or
substantially all of the assets of the Corporation to any other person or any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the Corporation shall mail to each holder of Series D Preferred
Stock and each holder of Series E Preferred Stock at least thirty (30) days
prior to the record date specified therein, a notice specifying (1) the date
on which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (2) the date
on which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become
effective, and (3) the date, if any, that is to be fixed, as to when the
holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation or winding up.
(k) FRACTIONAL SHARES. Fractional shares of Common
Stock otherwise issuable upon conversion of shares of Series D Preferred
Stock or Series E Preferred Stock held by a single holder shall be aggregated
into whole shares and issued to such holder. Otherwise, no fractional shares
of Common Stock shall be issued upon conversion of the Series D Preferred
Stock or the Series E Preferred Stock. Except as provided above, in lieu of
any fractional share to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to the product of such fraction multiplied
by the Common Stock's Fair Market Value on the date of conversion.
(l) RESERVATION OF STOCK ISSUABLE UPON CONVERSION.
The Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series D Preferred Stock and
the Series E Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series D Preferred Stock and all outstanding shares
of the Series E Preferred Stock; and if at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then outstanding shares of the Series D Preferred Stock and
the then outstanding shares of Series E Preferred Stock, the Corporation will
take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purpose.
(m) NOTICES. Any notice required or permitted by
this Section 7 or any other provision of this Certificate of Designation to
be given to a holder of Series
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D Preferred Stock, a holder of Series E Preferred Stock or to the Corporation
shall be in writing and be deemed given upon the earlier of actual receipt or
three (3) days after the same has been deposited in the United States mail,
by certified or registered mail, return receipt requested, postage prepaid,
and addressed (i) to each holder of record at the address of such holder
appearing on the books of the Corporation, or (ii) to the Corporation at 7880
Bent Branch Drive, Suite 150, Irving, Texas 75063, or (iii) to the
Corporation or any holder, at any other address specified in a written notice
given to the other for the giving of notice.
(n) PAYMENT OF TAXES. The Corporation will pay all
taxes (other than taxes based upon income) and other governmental charges
that may be imposed with respect to the issue or delivery of shares of Common
Stock upon conversion of shares of Series D Preferred Stock or Series E
Preferred Stock, including without limitation any tax or other charge imposed
in connection with any transfer involved in the issue and delivery of shares
of Common Stock in a name other than that in which the shares of Series D
Preferred Stock or Series E Preferred Stock, as the case may be, so converted
were registered.
(o) NO DILUTION OR IMPAIRMENT. The Corporation shall
not amend its certificate of incorporation or participate in any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action for the purpose of
avoiding or seeking to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in carrying out all such action as may be
reasonably necessary or appropriate in order to protect the conversion rights
of the holders of the Series D Preferred Stock and the holders of the Series
E Preferred Stock against dilution or other impairment.
Section 8. RESTRICTIONS AND LIMITATIONS. So long as any
shares of Series D Preferred Stock or any shares of Series E Preferred Stock
remain outstanding, the Corporation shall not, and shall not permit any
Subsidiary to, without the prior vote or written consent by the holders of a
Majority of the Series D and E Preferred Stock:
(a) Authorize, create or issue any new class or
series of capital stock or any other securities convertible into equity
securities of the Corporation (other than Common Stock) having a preference
over, or being on parity with, the Series D Preferred Stock or the Series E
Preferred Stock with respect to voting, dividends, redemption, liquidation or
dissolution of the Corporation;
(b) Increase or decrease (other than by redemption
or conversion) the total number of authorized shares of Series D Preferred
Stock or Series E Preferred Stock;
(c) Increase or decrease the par value of the Series
D Preferred Stock or the Series E Preferred Stock;
-16-
<PAGE>
(d) Alter or change the powers, preferences or
special rights of the Series D Preferred Stock or the Series E Preferred
Stock so as to affect them adversely;
(e) Merge or consolidate the Corporation with any
other entity or sell all or substantially all of the assets of the
Corporation; or
(f) Declare or pay any dividend (whether in cash or
in shares of Common Stock or any other capital stock of the Corporation) on
or declare or make any other distribution, direct or indirect, on account of
the Junior Stock or set apart any sum for any such purpose.
Section 9. NO REISSUANCE OF SERIES D PREFERRED STOCK OR
SERIES E PREFERRED STOCK. No share or shares of Series D Preferred Stock or
Series E Preferred Stock acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued, and, upon such event,
all such shares shall resume the status of authorized but unissued shares of
Preferred Stock.
-17-
<PAGE>
[SIGNATURE PAGE OF CERTIFICATE OF DESIGNATION]
IN WITNESS WHEREOF, the undersigned hereby executes this
document and affirms that the facts set forth herein are true under penalty of
perjury this 10th day of December, 1999.
AEGIS COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By: /s/ Stephen A. McNeely
-------------------------------------
Stephen A. McNeely
President and Chief Executive Officer
ATTEST:
By: /s/ Jerry L. Sims, Jr.
--------------------------------
Jerry L. Sims, Jr., Secretary
<PAGE>
EXHIBIT 4.3
CERTIFICATE ELIMINATING
REFERENCE TO A SERIES OF
SHARES OF STOCK FROM THE
CERTIFICATE OF INCORPORATION OF
AEGIS COMMUNICATIONS GROUP, INC.
Pursuant to the provisions of Section 151(g) of the General Corporation
Law of the State of Delaware ("DGCL"), it is hereby certified that:
1. The name of the corporation (hereinafter referred to as the
"Company") is Aegis Communications Group, Inc.
2. The designation of the series of shares of stock of the Company to
which this certificate relates is "Series D Junior Preferred Stock"(the
"Series D Junior Preferred Stock"), par value $.01 per share.
3. The voting powers, designations, preferences, and the relative,
participating, optional, or other rights, and the qualifications,
limitations, and restrictions of the Series D Junior Preferred Stock were
provided for in resolutions adopted by the Board of Directors of the Company
pursuant to authority expressly vested in it by the provisions of the
certificate of incorporation of the Company. A certificate setting forth
said resolutions has been heretofore filed with the Secretary of State of the
State of Delaware pursuant to the provisions of Section 151(g) of the DGCL.
4. On August 20, 1999, the Board of Directors of the Company adopted
the following resolutions:
RESOLVED, that the Rights Agreement, dated as of December 16, 1998,
between the Company and Harris Trust and Savings Bank, be amended effective
immediately prior to the execution of the Stock Agreement, to provide that
the Questor Investors and their affiliates and associates (as such terms
are defined in the Rights Agreement) will be excluded from the definition
of "Acquiring Person" under the Rights Agreement and in all other respects
to ensure that the Stock Agreement and the consummation of any of the
transactions contemplated in the Stock Agreement and any future issuance or
purchase of shares of capital stock of the Company by the Questor Investors
or their affiliates or transferees, including without limitation the
issuance of the Preferred Stock and the Conversion Shares and the
subsequent sale of any such shares will not result in the distribution of
separate rights certificates, the occurrence of a "Distribution Date" or in
any such person being deemed to be an "Acquiring Person" under the Rights
Agreement, and, subject to the Closing, to provide that the "Final
Expiration Date" under the Rights Agreement will be the Closing Date under
the Stock Agreement, and that a certificate stating that no shares of such
preferred stock are or will be issued and outstanding be filed pursuant to
Sections 103 and 151 of the Delaware General Corporation Law to have the
effect of eliminating from the Certificate of Incorporation all matters set
forth in the corresponding Certificate of Designations of
<PAGE>
Series D Junior Participating Preferred Stock relating to the rights
issued under such agreement, and that the officers of the Company, or
any one of them, are hereby authorized and directed, in the name and on
behalf of the Company, to do or cause to be done all such acts as they
may deem necessary or advisable in connection with effecting such
termination and cancellation, and that all such acts of such officers
that are in accordance with the purposes and intent of this resolution,
are hereby adopted, ratified and confirmed as the valid acts of the
Company;
RESOLVED, that each of the officers of the Company is hereby
authorized, empowered and directed to execute, verify, acknowledge,
certify, deliver and file such other agreements, instruments, documents,
and certificates, to attach to these resolutions such additional
resolutions, and to take or cause to be taken such other actions as may be
necessary, desirable, or appropriate to effect the purposes and intentions
of the foregoing resolutions.
IN WITNESS WHEREOF, Aegis Communications Group, Inc. has caused this
Certificate to be signed by its President, this 10th day of December, 1999.
AEGIS COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By: /s/ Stephen A. McNeely
-----------------------------------
Stephen A. McNeely, President
2
<PAGE>
TABLE OF CONTENTS
Page
1. Sales to Third Parties . . . . . . . . . . . . . . . . .1
1.1 Sales to Third Parties . . . . . . . . . . . . . . .1
1.2 Right of First Offer . . . . . . . . . . . . . . . .1
1.3 Involuntary Transfers. . . . . . . . . . . . . . . .3
2. Tag-Along Rights . . . . . . . . . . . . . . . . . . . .3
3. Election of Directors. . . . . . . . . . . . . . . . . .4
3.1 Board Make-up. . . . . . . . . . . . . . . . . . . .4
3.2 Irrevocable Proxy. . . . . . . . . . . . . . . . . .5
3.3 Major Decisions. . . . . . . . . . . . . . . . . . .5
4. Stock Certificate Legend . . . . . . . . . . . . . . . .7
5. Covenants; Representations and Warranties. . . . . . . .8
5.1 No Other Arrangements or Agreements. . . . . . . . .8
5.2 Additional Representations and Warranties. . . . . .8
6. Amendment and Modification . . . . . . . . . . . . . . .9
7. Parties. . . . . . . . . . . . . . . . . . . . . . . . .9
7.1 Assignment by the Company. . . . . . . . . . . . . .9
7.2 Assignment Generally . . . . . . . . . . . . . . . .9
7.3 Termination. . . . . . . . . . . . . . . . . . . . 10
7.4 Agreements to Be Bound . . . . . . . . . . . . . . 10
8. Recapitalizations, Exchanges, etc. . . . . . . . . . . 10
9. Further Assurances . . . . . . . . . . . . . . . . . . 11
10. Governing Law. . . . . . . . . . . . . . . . . . . . . 11
11. Invalidity of Provision. . . . . . . . . . . . . . . . 11
12. Waiver . . . . . . . . . . . . . . . . . . . . . . . . 11
13. Notices. . . . . . . . . . . . . . . . . . . . . . . . 11
<PAGE>
14. Headings; Execution in Counterpart . . . . . . . . . . 12
15. Counterparts . . . . . . . . . . . . . . . . . . . . . 12
16. Entire Agreement . . . . . . . . . . . . . . . . . . . 13
17. Injunctive Relief. . . . . . . . . . . . . . . . . . . 13
18. Miscellaneous. . . . . . . . . . . . . . . . . . . . . 13
19. Defined Terms. . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
STOCKHOLDERS AGREEMENT
AEGIS COMMUNICATIONS GROUP, INC.
Dated as of December 10, 1999
<PAGE>
EXHIBIT A
SPOUSAL WAIVER
[INSERT NAME] hereby waives and releases any and all equitable or
legal claims and rights, actual, inchoate or contingent, which she may acquire
with respect to the disposition, voting or control of the shares of Common Stock
subject to the Stockholders' Agreement of Aegis Communications Group, Inc.,
dated as of _______, 1999, as the same shall be amended from time to time,
except for rights in respect of the proceeds of any disposition of such Common
Stock.
_________________________
Name:
<PAGE>
EXHIBIT 10.4
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of December 10, 1999, among
Aegis Communications Group, Inc., a Delaware corporation (the "COMPANY"),
Questor Partners Fund II, L.P., a Delaware limited partnership ("FUND II"),
Questor Side-by-Side Partners II, L.P., a Delaware limited partnership (the
"SIDE-BY-SIDE FUND"), Questor Side-by-Side Partners II 3(c)(1), L.P., a
Delaware limited partnership (the "3(C)(1) FUND" and together with Fund II
and the Side-by-Side Fund, "QUESTOR"), and Thayer Equity Investors III, L.P.,
a Delaware limited partnership ("THAYER EQUITY") and TC Co-Investors, LLC, a
Delaware limited liability company ("TC CO-INVESTORS" and, together with
Thayer Equity, "THAYER" or "EXISTING STOCKHOLDERS"). The Existing
Stockholders and Questor are herein referred to collectively as the
"STOCKHOLDERS." Capitalized terms used herein without definition are defined
in Section 18.
The parties hereto agree as follows:
1. SALES TO THIRD PARTIES.
1.1 SALES TO THIRD PARTIES. Any Stockholder may Transfer all or
a portion of its Equity Securities to a third party, provided that such Transfer
is made in compliance with the provisions of Section 1.2 (Right of First Offer),
Section 2 (Tag-Along Rights) and Section 7.4 (Agreements to Be Bound). Any
Stockholder may Transfer all or a portion of its Equity Securities to an
Affiliate, provided that such Transfer is made in compliance with Section 7.4
(Agreements to Be Bound). For the purposes of Sections 1.2 and 2, a Transfer to
a "third party" shall not include a Transfer to any Existing Stockholder
Assignee or Questor Assignee or a Transfer in a Public Sale.
1.2 RIGHT OF FIRST OFFER. (a) PROCEDURE. If any Stockholder
(the "SELLING STOCKHOLDER") desires to Transfer any Equity Securities (other
than any Transfers referred to in the final sentence of Section 1.1), then prior
to Transferring such Equity Securities to any third party or parties, the
Selling Stockholder shall deliver to each of the other Stockholders a letter
(the "SALE NOTICE") signed by it setting forth:
(i) the number of Equity Securities such Selling Stockholder wishes to
Transfer;
(ii) the material terms and conditions on which such Selling
Stockholder wishes to Transfer such shares, including, without limitation, the
purchase price per
<PAGE>
security of Equity Securities; and
(iii) such Selling Stockholder's offer (irrevocable by its terms for 15
days following receipt) to Transfer to the other Stockholders all (but not less
than all) of such Equity Securities, for a purchase price and on the other terms
and conditions set forth in subparagraph (ii) of this section 1.2(a).
Within 15 days of receipt of the Sale Notice, each of the other
Stockholders may agree to purchase in the aggregate, all of the Equity
Securities covered by the Sale Notice, and (I) individually, that portion of
such Equity Securities offered by the Selling Stockholder equal to their PRO
RATA interest in the Company relative to each other (based on the percentage of
outstanding Common Stock Equivalents owned by each of them on the date of the
Sale Notice), (II) such other portion of such Equity Securities as the other
Stockholders may agree upon or (III) in the event any of the other Stockholders
does not exercise such right, all of the Equity Securities offered to such
declining Stockholders by the Selling Stockholder in amounts determined pursuant
to subclause (i) or (ii) above without regard to such declining Stockholders, by
delivering written notice to such effect to the Selling Stockholder setting
forth closing arrangements and a closing date not less than 30 nor more than 90
days following the delivery of such notice (or such later date as is necessary
to obtain all requisite governmental and regulatory approvals and consents).
(b) EFFECTING SALES. If, upon the expiration of 15 days
following receipt by the other Stockholders of the Sale Notice, none of the
other Stockholders shall have agreed to purchase the Equity Securities covered
by the Sale Notice, the Selling Stockholder may sell to a third party or parties
all, but not less than all, of the Equity Securities covered by the Sale Notice
for at least 95% of the price and upon the same other terms and conditions as
contained in the Sale Notice, PROVIDED that the Selling Stockholder and the
third party execute a binding purchase agreement (subject to customary closing
conditions) within 90 days after the expiration of such 15 day period and
consummate the closing thereunder within 120 days (or such later date as is
necessary to obtain all requisite governmental and regulatory approvals and
consents) from the execution of the binding purchase agreement. If the other
Stockholders shall have agreed to purchase the Equity Securities covered by the
Sale Notice, then the sale of such Equity Securities shall be consummated as
soon as practicable after the delivery of a notice of acceptance by the Selling
Stockholder, but in any event within 90 days of the delivery of the Sale Notice
(or such later date as is necessary to obtain all requisite governmental and
regulatory approvals and consents). Questor and the Existing Stockholders shall
have the right to assign to one or more Questor Assignees or Existing
<PAGE>
Stockholder Assignees, as the case may be, all or any of their rights to
purchase Equity Securities pursuant to this Section 1.2.
(c) Notwithstanding anything to the contrary herein, the rights
granted to and obligations imposed on Questor and the Questor Assignees, on the
one hand, and the Existing Stockholders and the Existing Stockholder Assignees,
on the other hand, pursuant to this Section 1.2 shall terminate if the Second
Break Point occurs.
1.3 INVOLUNTARY TRANSFERS. Any transfer of title or beneficial
ownership of Equity Securities upon default, foreclosure, forfeit, divorce,
court order or otherwise than by a voluntary decision on the part of a
Stockholder (each, an "INVOLUNTARY TRANSFER") shall be void unless the
Stockholder complies with this Section 1.3 and enables the Company to exercise
in full its rights hereunder. Upon any Involuntary Transfer, the Company shall
have the right to purchase such Equity Securities pursuant to this Section 1.3
and the person or entity to whom such Equity Securities have been Transferred
(the "INVOLUNTARY TRANSFEREE") shall have the obligation to sell such Equity
Securities in accordance with this Section 1.3. Upon the Involuntary Transfer
of any Equity Securities, such Stockholder shall promptly (but in no event later
than two days after such Involuntary Transfer) furnish written notice (the
"NOTICE") to the Company indicating that the Involuntary Transfer has occurred,
specifying the name of the Involuntary Transferee, giving a detailed description
of the circumstances giving rise to, and stating the legal basis for, the
Involuntary Transfer. Upon the receipt of the Notice, and for 60 days
thereafter, the Company shall have the right to purchase, and upon exercise of
such right the Involuntary Transferee shall have the obligation to sell, all
(but not less than all) of the Equity Securities acquired by the Involuntary
Transferee for a purchase price equal to the Market Value of such Equity
Securities.
2. TAG-ALONG RIGHTS. (a) If a Stockholder proposes to make a
Transfer of Common Stock that requires such Stockholder first to offer such
Common Stock pursuant to Section 1.2, the other Stockholders fail to agree to
purchase the Common Stock offered by the Selling Stockholder pursuant to Section
1.2 and the Selling Stockholder shall have agreed to sell any Common Stock
covered by the Sale Notice to a third party, then such Selling Stockholder
shall, in accordance with the procedures set forth in Section 2(b), offer each
of the other Stockholders a right (a "TAG-ALONG RIGHT") to participate (each a
"PARTICIPATING PARTY") PRO RATA (based on the number of shares of Common Stock
Equivalents owned by each Participating Party and the Selling Stockholder) in
such sale for a purchase price for such Common Stock and on other terms and
conditions no less favorable to such Participating Party than those applicable
to such Selling Stockholder.
(b) Within three days after the Selling Stockholder has entered
into an agreement to sell the Common Stock covered by the Sale Notice to a third
party, the Selling Stockholder shall give each Participating Party, as the case
may be, written notice
<PAGE>
of its Tag-Along Right (the "TAG-ALONG NOTICE"). No later than 15 days after
the receipt of the Tag-Along Notice (such date, the "TAG-ALONG DETERMINATION
DATE"), each Participating Party shall notify the Selling Stockholder in
writing whether it elects to participate in such sale. The failure of any
Participating Party to respond within such 15 day period shall be deemed to
be a rejection of the Selling Stockholder's offer to participate in such sale
and the Selling Stockholder shall be entitled to consummate such sale on the
terms set forth in such notice within the time period specified in Section
1.2(b). If such sale is not consummated within such period, the Selling
Stockholder may not effect such sale unless it again shall have complied with
this Section 2.
(c) Notwithstanding anything to the contrary herein, the rights
granted to Questor and the Questor Assignees, on the one hand, and to the
Existing Stockholders and the Existing Stockholder Assignees, on the other hand,
pursuant to this Section 2 shall terminate if the Second Break Point occurs.
3. ELECTION OF DIRECTORS.
3.1 BOARD MAKE-UP. (a) Subject to Section 3.1(b), each
Stockholder agrees that from and after the Closing such Stockholder will use
his, hers or its best efforts to nominate and elect and will vote all of the
Equity Securities owned or held of record by him, her or it that have voting
rights to elect and, thereafter for such period, to continue in office a Board
consisting of twelve members, six of whom shall be designated by Questor (the
"QUESTOR DESIGNEES") and six of whom shall be designated by Thayer (the
"EXISTING STOCKHOLDER DESIGNEES"). The persons designated pursuant to this
Section 3.1 by Questor and by Thayer may be changed from time to time by Questor
and by Thayer, respectively. If the directors are to be elected in staggered
terms, the number of nominees designated by Questor and by Thayer for each such
term shall equal the total number of Questor Designees or Existing Stockholder
Designees, respectively, divided by the number of such terms.
(b) The number of directors constituting the entire Board and the
number of Questor Designees and Existing Stockholder Designees will be subject
to reduction as provided in this Section 3.1(b). At the next annual meeting of
stockholders following the occurrence of the First Break Point, the Board shall
be reduced from twelve members to nine members. If, upon occurrence of the
First Break Point, (i) the Questor
<PAGE>
Parties own, beneficially or of record, a smaller number of Common Stock
Equivalents than the Existing Stockholder Parties, then Thayer shall be
entitled to designate six directors and Questor shall be entitled to
designate three directors otherwise in accordance with Section 3.1(a), or
(ii) the Existing Stockholder Parties own a smaller number of Common Stock
Equivalents than the Questor Parties, then Thayer will be entitled to
designate three directors and Questor will be entitled to designate six
directors otherwise in accordance with Section 3.1(a). If, upon the
occurrence of the Second Break Point, (i) the Questor Parties own a smaller
number of Common Stock Equivalents than the Existing Stockholder Parties,
then Questor will no longer be entitled to designate any directors, and
Thayer will be entitled to designate six directors, or (ii) the Existing
Stockholder Parties own a smaller number of Common Stock Equivalents than the
Questor Parties, then Thayer no longer will be entitled to designate any
directors, and Questor will be entitled to designate six directors otherwise
in accordance with Section 3.1(a). For the avoidance of doubt, except as
explicitly indicated in this Section 3.1(b), Section 3.1(a) shall remain in
full force, including the obligations of each party to vote for the directors
that such other party is entitled to designate.
3.2 IRREVOCABLE PROXY. In order to effectuate Section 3.1 and,
in addition to and not in lieu of Section 3.1, each Stockholder hereby grants to
the Secretary of the Company then in office an irrevocable proxy solely for the
purpose of voting all of the Equity Securities that have voting rights and owned
by the grantor of the proxy for the election of directors nominated only in
accordance with Section 3.1.
3.3 MAJOR DECISIONS. (a) Each Stockholder agrees that from and
after the Closing such Stockholder will use his, hers or its best efforts, and,
where applicable, will vote all of the Equity Securities owned or held of record
by him, her or it that have voting rights, to cause the By-laws of the Company
to require that (i) any Major Decision (as defined below) be approved by the
affirmative vote of not less than three fourths (or in the event that the number
of directors constituting the entire Board is reduced to nine pursuant to
Section 3.1(b), by the affirmative vote of not less than two thirds) of the
directors then serving on the Board, and (ii) any committee of the Board be
constituted so that the number of Questor Designees and Existing Stockholder
Designees on any such committee be as nearly as possible in the same proportion
as the number of Questor Designees and Existing Stockholder Designees on the
entire Board.
(b) The term "MAJOR DECISION" means any decision by the Board with
respect to any of the following matters (but, for the avoidance of doubt, shall
exclude any Board decision made pursuant to Section 3.3(c) hereof):
(i) issuing any shares or any security, including any
indebtedness, convertible into shares, or any other form of equity in
the Company or any subsidiary of the Company, other than (I) granting
options to directors or employees of the Company pursuant to any
incentive or other benefit plan adopted by the Board, (II) issuing
shares of Common Stock pursuant to the exercise of such options, and
(III) issuing shares of Common Stock or any security, including any
indebtedness, convertible into shares of Common Stock, or any other
form of equity in the Company, in one or more offerings (excluding
any issuances referred to in (i) or (ii) above) where the aggregate
purchase price for all such issuances does not exceed $500,000,
provided that any such issuance shall be
<PAGE>
sold at Market Value;
(ii) adoption of any stock-based employee benefit plan;
(iii) incurring indebtedness or entering into guarantees for
borrowed money (excluding trade payables incurred in the ordinary
course of business) in excess of $2,500,000 in any twelve consecutive
month period, provided, however, that the Board may approve pursuant to
this Section 3.3(b)(iii) a revolving credit or similar borrowing
facility together with subsequent draw-downs under such facility
without obtaining separate Board approval for each such draw-down;
(iv) selling, leasing, pledging or granting a security interest
or encumbrance in all or substantially all of the Company's or any
subsidiary of the Company's assets, except in connection with the
incurrence of indebtedness for borrowed money that does not involve a
Major Decision under the preceding paragraph;
(v) acquiring (whether through an asset purchase, merger,
equity purchase or otherwise) any assets (excluding acquisitions of raw
materials and supplies in the ordinary course of business) having a
value, individually or in the aggregate for any series of related
transactions, in excess of $2,000,000;
(vi) selling or otherwise disposing of any assets (excluding
sales or other dispositions of inventory in the ordinary course of
business) having a value, individually or in the aggregate for any
series of related transactions, in excess of $2,000,000;
(vii) amending the By-laws or the Certificate of Incorporation of
the Company;
(viii) any Change of Control Transaction;
(ix) executing or delivering any assignment for the benefit of
creditors of the Company;
(x) filing any voluntary petition in bankruptcy or receivership
with respect to the Company; or
(xi) taking any action while there is a vacancy on the Board,
including without limitation the filling of such vacancy.
(c) The Questor Parties agree that from and after the Closing they
will use
<PAGE>
their best efforts to cause the Questor Designees to abstain from voting on
any Board action in connection with an optional redemption pursuant to
Section 5(b) of the Series F Preferred Stock Certificate of Designation of
the Company. The Existing Stockholder Parties agree that from and after the
Closing they will use their best efforts to cause the Existing Stockholder
Designees to abstain from voting on any Board action in connection with the
repayment of the Promissory Note by and among IQI, Inc. Edward Blank, and The
Edward Blank 1995 Grantor Retained Annuity Trust dated April 16, 1998 in the
original aggregate principal amount of $1.0 million and the Promissory Note
by and between IQI, Inc. and Thayer Equity Investors III, L.P. dated April
16, 1998 in the original principal amount of $2.0 million or the redemption
or repurchase of any or all of either the Series D Preferred Stock or the
Series E Preferred Stock.
4. STOCK CERTIFICATE LEGEND. A copy of this Agreement shall be
filed with the Secretary of the Company and kept with the records of the
Company. Each certificate representing shares of Common Stock owned by the
Stockholders shall bear upon its face the following legends, as appropriate:
(i) "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY
NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL
REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL TO THE
STOCKHOLDER, WHICH COUNSEL MUST BE, AND THE FORM AND
SUBSTANCE OF WHICH OPINION ARE, SATISFACTORY TO THE ISSUER,
SUCH OFFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION,
TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION
OR IS OTHERWISE IN COMPLIANCE WITH THE ACT AND SUCH LAWS."
(ii) "THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER CONDITIONS,
AS SPECIFIED IN THE STOCKHOLDERS' AGREEMENT OF THE ISSUER
DATED AS OF DECEMBER 10, 1999 (THE "STOCKHOLDERS'
AGREEMENT"), COPIES OF WHICH ARE ON FILE AT THE OFFICE OF
THE ISSUER AND WILL
<PAGE>
BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH SHARES
UPON WRITTEN REQUEST AND MAY NOT BE OFFERED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS, IN THE OPINION OF COUNSEL TO THE
STOCKHOLDER, WHICH COUNSEL MUST BE, AND THE FORM AND
SUBSTANCE OF SUCH OPINION ARE, SATISFACTORY TO THE ISSUER,
SUCH OFFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION,
TRANSFER OR OTHER DISPOSITION IS IN COMPLIANCE WITH THE
STOCKHOLDERS' AGREEMENT. "
(iii) "THE ISSUER WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER
WHO SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS
OF EACH CLASS OR SERIES OF SHARES AUTHORIZED TO BE ISSUED
AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH
PREFERENCES AND/OR RIGHTS."
In addition, certificates representing shares of Common Stock owned by residents
of certain states shall bear any legends required by the laws of such states.
All Stockholders shall be bound by the requirements of such legends.
5. COVENANTS; REPRESENTATIONS AND WARRANTIES.
5.1 NO OTHER ARRANGEMENTS OR AGREEMENTS. Each Stockholder hereby
represents and warrants to the Company and to each other Stockholder that he or
she has not entered into or agreed to be bound by any other arrangements or
agreements of any kind that conflict with this Agreement. Each Stockholder
agrees that, except as expressly permitted under this Agreement, he will not
enter into any such other arrangements or agreements as he has represented and
warranted to above with any other party as long as any of the terms of this
Agreement remain in effect.
5.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Stockholder
represents and warrants to the Company and each other Stockholder that:
(i) such Stockholder has the power, authority and capacity (or,
in the case of any Stockholder that is a corporation, trust or limited
partnership, all corporate, trust or limited partnership power and authority, as
the case may be) to execute, deliver and perform this Agreement;
<PAGE>
(ii) in the case of a Stockholder that is a corporation, trust or
limited partnership, the execution, delivery and performance of this Agreement
by such Stockholder has been duly and validly authorized and approved by all
necessary corporate, trust or limited partnership action, as the case may be;
(iii) this Agreement has been duly and validly executed and
delivered by such Stockholder and constitutes a valid and legally binding
obligation of such Stockholder, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting or relating to creditors' rights generally and general principles
of equity; and
(iv) the execution, delivery and performance of this Agreement by
such Stockholder does not and will not violate the terms of or result in the
acceleration of any obligation under (A) any material contract, commitment or
other material instrument to which such Stockholder is a party or by which such
Stockholder is bound or (B) in the case of a Stockholder that is a corporation,
trust or limited partnership, the certificate of incorporation, certificate of
limited partnership, by-laws, limited partnership agreement or other
organizational documents, as the case may be.
6. AMENDMENT AND MODIFICATION. This Agreement may not be
amended, modified or supplemented except by a written instrument signed by the
Company, Questor, Thayer and, in the case of an amendment, modification or
supplement that would materially and adversely effect any other Stockholder, any
such other Stockholder. The Company shall notify all Stockholders promptly
after any such amendment, modification or supplement shall have taken effect.
7. PARTIES.
7.1 ASSIGNMENT BY THE COMPANY. The Company shall have the right
to assign to Questor or the Existing Stockholders and/or the right to cause
Questor or the Existing Stockholders to assume, all or any portion of its rights
and obligations under Section 1.3, PROVIDED that any such assignment or
assumption is accepted by the proposed assignee or assignees. If the Company
has not exercised its right to purchase Equity Securities pursuant to such
Section 1.3 within 15 days of receipt by the Company of the Notice giving rise
to such right, then Questor, in the case of an Involuntary Transfer by any
Existing Stockholder or Existing Stockholder Party and the Existing
Stockholders, in the case of an Involuntary Transfer by Questor or any Questor
Party, shall have the right to require the Company to assign to Questor or the
Existing Stockholders, respectively, such right to purchase those Equity
Securities not being purchased by the Company. Questor and the Existing
Stockholders shall have the right to assign to one or more of the Questor
Parties or the Existing Stockholder Parties, as the case may be, all or any of
their
<PAGE>
rights to purchase Equity Securities pursuant to this Section 7.1.
7.2 ASSIGNMENT GENERALLY. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns, PROVIDED that
the Company may not assign any of its rights or obligations hereunder without
the consent of Questor and the Existing Stockholders and PROVIDED, FURTHER, that
no Stockholder may assign any of its rights or obligations hereunder without the
prior written consent of Questor and the Existing Stockholders, unless such
assignment is in connection with a Transfer explicitly permitted by this
Agreement and, prior to such assignment, such assignee complies with the
requirements of Section 7.4.
7.3 TERMINATION. Any party to, or person who is subject to, this
Agreement which ceases to own Equity Securities or any interest therein, shall
cease to be a party to, or person who is subject to, this Agreement and
thereafter shall have no rights or obligations hereunder, PROVIDED, HOWEVER,
that a Transfer of Equity Securities not explicitly permitted under this
Agreement shall not relieve a Stockholder of any of his or her obligations
hereunder. Notwithstanding the foregoing, in connection with a Transfer to an
Affiliate explicitly permitted by this Agreement, prior to any such Person
ceasing to be an Affiliate of the Stockholder from whom such Person acquired its
Equity Securities, such Person shall be obligated to transfer such Equity
Securities back to such original Stockholder and such original Stockholder shall
thereupon again be subject to this Agreement. Notwithstanding any other
provision in this Agreement, this Agreement shall terminate and be of no further
force or effect at such time as either the Questor Parties or the Existing
Stockholder Parties beneficially own less than 5% of the outstanding Equity
Securities.
7.4 AGREEMENTS TO BE BOUND. Notwithstanding anything to the
contrary contained in this Agreement, any Transfer of Equity Securities by a
Stockholder (other than pursuant to a Public Sale) shall be permitted under the
terms of this Agreement only if the transferee of such Stockholder shall agree
in writing to be bound by the terms and conditions of this Agreement pursuant to
an instrument of assumption reasonably satisfactory in substance and form to the
Company, and, in the case of a transferee who is an individual and who resides
in a state with a community property system, such transferee causes his or her
spouse, if any, to execute a Spousal Waiver in the form of Exhibit A attached
hereto. Upon the execution of the instrument of assumption by such transferee
and, if applicable, the Spousal Waiver by the spouse of such transferee, such
transferee shall have the rights and be subject to all of the restrictions and
obligations of his or her transferor hereunder, PROVIDED, HOWEVER, that Section
1.1 (Right of First Offer) and Section 2 (Tag-Along Rights) shall not apply to
any Involuntary Transferee.
8. RECAPITALIZATIONS, EXCHANGES, ETC. Except as otherwise
provided
<PAGE>
herein, the provisions of this Agreement shall apply to the full extent
set forth herein with respect to (A) the Equity Securities and (B) any and all
shares of capital stock of the Company or any successor or assign of the Company
(whether by merger, consolidation, sale of assets or otherwise) which may be
issued in respect of, in exchange for, or in substitution for the Equity
Securities by reason of any stock dividend, split, reverse split, combination,
recapitalization, reclassification, merger, consolidation or otherwise. All
share numbers and percentages shall be proportionately adjusted to reflect any
stock split, stock dividend or other subdivision or combination effected after
the date hereof. Except as otherwise provided herein, this Agreement is not
intended to confer upon any person, except for the parties hereto, any rights or
remedies hereunder.
9. FURTHER ASSURANCES. Each party hereto shall do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto or person subject hereto may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
10. GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder and the persons subject hereto shall be governed by,
and construed and interpreted in accordance with, the laws of the State of
Delaware, without giving effect to the choice of law principles thereof.
11. INVALIDITY OF PROVISION. The invalidity or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
12. WAIVER. Waiver by any party hereto of any breach or default
by the other party of any of the terms of this Agreement shall not operate as a
waiver of any other breach or default, whether similar to or different from the
breach or default waived. No waiver of any provision of this Agreement shall be
implied from any course of dealing between the parties hereto or from any
failure by either party to assert its or his or her rights hereunder on any
occasion or series of occasions.
13. NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (A) delivered
personally, (B) mailed, certified or registered mail with postage prepaid, (C)
sent by next-day or overnight mail or delivery or (D) sent by fax, as follows
(or to such other address as the party entitled to notice shall hereafter
designate in accordance with the terms hereof):
<PAGE>
(i) If to the Company, to it at:
Aegis Communications Group, Inc.
7880 Bent Branch Drive
Suite 150
Irving, Texas 75063
Fax: (972) 868-0396
Attention:
with a copy to Questor and Thayer at their addresses set forth below.
(ii) If to Thayer, to it at:
Thayer Capital Management Partners
1455 Pennsylvania Avenue, N.W.
Suite 350
Washington, D.C.
Fax: (202) 371-0391
Attention:
(iii) If to Questor, to it at:
c/o Organization Services, Inc.
3411 Silverside Road
Wilmington, Delaware 19810
Fax: (302) 478-3667
Attention: Gilbert Warren
With a copy to:
Questor Management Company
4000 Town Center
Suite 530
Southfield, Michigan 48075
Fax: (248) 213-2200
Attention: President
All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (A) if by personal delivery on the day after such
delivery, (B) if by
<PAGE>
certified or registered mail, on the fifth business day after the mailing
thereof, (C) if by next-day or overnight mail or delivery, on the day
delivered, or (D) if by fax, on the next day following the day on which such
fax was sent, provided that a copy is also sent by certified or registered
mail.
14. HEADINGS; EXECUTION IN COUNTERPART. The headings to sections
in this Agreement are for the convenience of the parties only and shall not
control or affect the meaning or construction of any provision hereof.
15. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
16. ENTIRE AGREEMENT. This Agreement, the Purchase and
Registration Rights Agreement and the Series F Certificate of Designation,
constitute the entire agreement and understanding of the parties hereto with
respect to the matters referred to herein. This Agreement and the agreements
referred to in the preceding sentence supersede all prior agreements and
understandings among the parties with respect to such matters.
17. INJUNCTIVE RELIEF. The parties hereto agree that the
Company and the Stockholders will be irreparably damaged in the event this
Agreement is not specifically enforced. Each of the parties therefore agrees
that in the event of a breach of any provision of this Agreement, the
aggrieved party may elect to institute and prosecute proceedings in any court
of competent jurisdiction to enforce specific performance or to enjoin the
continuing breach of this Agreement. Such remedies shall, however, be
cumulative and not exclusive, and shall be in addition to any other remedy
which the Company or any Stockholder may have. Each Stockholder hereby
irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts in New York for the purposes of any suit, action or other
proceeding arising out of or based upon this Agreement or the subject matter
hereof. Each Stockholder hereby consents to service of process made in
accordance with Section 13.
18. MISCELLANEOUS. Prior to such time as the Existing
Stockholder Parties are no longer entitled to designate any directors pursuant
to Section 3 hereof, the Questor Parties agree that they will not exercise their
right to request the election of two directors pursuant to the terms of the
Series F Preferred Stock. All references in this Agreement to Sections of or
Rules under the Securities Act or the Exchange Act are intended to include, and
shall be deemed to include, references to all successor Sections and Rules which
are intended to replace the Sections and Rules herein referenced.
<PAGE>
19. DEFINED TERMS. As used in this Agreement, the following
terms shall have the meanings ascribed to them below:
AFFILIATE: person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the Person specified, and with regard to Questor or Thayer, any partner or
member of Questor or Thayer, respectively; provided that no Person shall be
deemed to be an Affiliate of another Person solely as a result of this
Agreement, the Purchase and Registration Rights Agreement or the other
agreements contemplated thereby, or solely as a result of the ownership of
Common Stock Equivalents.
"BENEFICIALLY OWN": the meaning given in Rule 13d-3 under the
Exchange Act.
BOARD: the board of directors of the Company.
CHANGE IN CONTROL TRANSACTION: any of the following:
(a) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act), other than the Company, or any of its Subsidiaries or any
Investor or Excluded Group (an "ACQUIRING PERSON") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 35% or more of the combined voting power or
economic interests of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors;
provided, however, that any transfer from any Investor or Excluded
Group will not result in a Change in Control if such transfer was
part of one or a series of related transactions the effect of
which, absent the transfer to such Acquiring Person by the Investor
or Excluded Group, would not have resulted in the acquisition by
such Acquiring Person of 35% or more of the combined voting power
or economic interests of the then outstanding voting securities; or
(b) the individuals who at the beginning of any 12
consecutive month period following the Closing constituted a
majority of the directors of the Company (the "INCUMBENT MAJORITY")
cease for any reason to constitute at least a majority of such
directors; provided that (I) any individual becoming a director
whose election, or nomination for election by the Company's
stockholders pursuant to this Agreement, was approved by a vote of
the stockholders having the right to designate such director
pursuant to this Agreement and (II) any director whose election to
the Board or whose nomination for election by the stockholders of
the Company was approved by the Incumbent Majority, shall, in each
such case, be considered as though such individual were a member of
the Incumbent Majority, but excluding, as a member of the Incumbent
Majority, any
<PAGE>
such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of the directors of the Company (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
and further excluding any person who is an affiliate or associate
of an Acquiring Person having or proposing to acquire beneficial
ownership of 25% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors; or
(c) the approval by the stockholders of the Company of
a reorganization, merger or consolidation, in each case, with
respect to which all or substantially all of the individuals and
entities who were the respective beneficial owners of the voting
securities of the Company or its parent immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly
or indirectly, more than 51% of the combined voting power of the
then outstanding voting securities entitled to vote generally in
the election of directors of the Company or its parent resulting
from such reorganization, merger or consolidation; or
(d) the sale or other disposition of assets representing 50% or
more of the assets of the Company and its subsidiaries in one
transaction or series of related transactions.
CLOSING: the "CLOSING" shall mean the date hereof.
COMMON STOCK: the common stock of the Company, par value $.01 per
share.
COMMON STOCK EQUIVALENTS: the number of shares of Common Stock
owned beneficially or of record by Questor or the Existing Stockholders, as the
case may be, as of the date of this Agreement as adjusted (in the case of
Questor) pursuant to Sections 7(d) of the Series F Preferred Stock Certificate
of Designation, which at any date of determination are owned beneficially or of
record by a Questor Party or Existing Stockholder Party. In the event that any
Questor Party or Existing Stockholder Party acquires beneficial or record
ownership of any Equity Securities after the date of this Agreement which are
not Common Stock Equivalents pursuant to the immediately preceding sentence, any
Equity Securities thereafter Transferred by such Person shall be deemed to be
such after acquired Equity Securities until the number of such after acquired
Equity Securities owned beneficially or of record by such Person has been
reduced to 0.
EQUITY SECURITY: any stock or similar security of the Company or
any
<PAGE>
security (including indebtedness for borrowed money) convertible or
exchangeable, with or without consideration, into or for any such stock or
similar security, or any security (including indebtedness for borrowed money)
carrying any warrant or right to subscribe to or purchase any such stock or
similar security, or any such warrant or right.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended.
EXCLUDED GROUP: a "group" (as such term is used in Rule 13d-5 of
the Exchange Act) that includes one or more of the Investors, including, without
limitation, for the purpose of this definition only, any party to the
Stockholders' Agreement.
EXISTING STOCKHOLDER ASSIGNEE: the Existing Stockholders and any
Affiliate of the Existing Stockholders, and, in the case of any individual, such
individual's spouse, parents, immediate family or lineal descendants.
EXISTING STOCKHOLDER PARTIES: the Existing Stockholders, the
Existing Stockholder Assignees and any third party other than an Involuntary
Transferee or Questor Party who receives Equity Securities from any Existing
Stockholder or any Existing Stockholder Assignee pursuant to Section 1 or
Section 2 of this Agreement.
FIRST BREAK POINT: the time at which the Total Ownership Ratio
for either the Questor Parties or the Existing Stockholder Parties falls below
25%.
INVESTOR: Questor or Thayer or their respective Affiliates.
MARKET VALUE: shall mean, as of any date: (i) if any Equity
Securities are listed on a national securities exchange, the average of the
closing prices as reported for composite transactions during the 30 consecutive
trading days preceding the trading day immediately prior to such date or, if no
sale occurred on a trading day, then the mean between the closing bid and asked
prices on such exchange on such trading day; (ii) if any Equity Securities are
traded on the Nasdaq National Market ("NMM"), the average of the closing prices
as reported on the NMM during the 30 consecutive trading days preceding the
trading day immediately prior to such date or, if no sale occurred on a trading
day, then the mean between the highest bid and lowest asked prices as of the
close of business on such trading day, as reported on the NMM; (iii) if any
Equity Securities are not traded on a national securities exchange or the NMM
but are otherwise traded over-the-counter, the arithmetic average (for
consecutive trading days) of the mean between the highest bid and lowest asked
prices as of the close of business during the 30 consecutive trading days
preceding the trading day immediately prior to such date as quoted on the
National Association of Securities Dealers Automated Quotation system or an
equivalent generally accepted reporting service; or (iv) if there is no active
market for
<PAGE>
any Equity Securities, the market value thereof as mutually agreed by
the Corporation and a majority in interest (based on Common Stock Equivalents
then owned) of the Stockholders.
INVOLUNTARY TRANSFER: the meaning set forth in Section 2.3.
PERSON: an individual, corporation, partnership, limited
liability company, joint venture, association, trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
PUBLIC SALE: Transfers (I) to the general public pursuant to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement, (II) to or through a broker or
dealer or underwriter in a public distribution or a public securities
transaction, or (III) (other than to a partner or affiliate (as defined under
the Securities Act) of the Questor Investors) in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act under
Section 4(1) thereof so that all transfer restrictions and restrictive legends
with respect to such Common Stock are removed upon the consummation of such
Transfer and the transferor and transferee of such Common Stock receive an
opinion of counsel for the Company, which shall be in form and content
reasonably satisfactory to the transferor and transferee and their respective
counsel, to the effect that such Common Stock in the hands of the transferee is
freely transferable without restriction or registration under the Securities Act
in a public or private transaction, or (IV) pursuant to Rule 144A under the
Securities Act; provided that a Public Sale shall not include Transfers of more
than 10% of the Common Stock of the Company on a fully diluted basis by any
party in one or a series of related transactions to any single Person or group
(as defined in Rule 13d-5 under the Exchange Act).
PURCHASE AND REGISTRATION RIGHTS AGREEMENT: The Series F Senior
Voting Convertible Preferred Stock Purchase and Registration Rights Agreement,
dated as of the date hereof, between the Company, Questor, the Existing
Stockholders, ITC Services Company, Edward Blank and trusts created by Edward
Blank as both grantor and trustee under Article Fourth of The Edward Blank 1995
Grantor Retained Annuity Trust.
QUESTOR ASSIGNEE: Questor and any Affiliate of Questor, and, in
the case of any individual, such individual's spouse, parents, immediate family
or lineal descendants.
QUESTOR PARTIES: Questor, any Questor Assignee and any third
party other than an Involuntary Transferee or Existing Stockholder Party who
receives Equity Securities from Questor or any Questor Assignee pursuant to a
Transfer to which Section
<PAGE>
1.2 hereof applies..
SECOND BREAK POINT: the time at which the Total Ownership Ratio
for either the Questor Parties or the Existing Stockholder Parties falls below
10%.
SECURITIES ACT: the Securities Act of 1933, as amended.
SERIES D PREFERRED STOCK: the Series D Preferred Stock of the
Company, par value $.01 per share.
SERIES E PREFERRED STOCK: the Series E Preferred Stock of the
Company, par value $.01 per share.
SERIES F PREFERRED STOCK: the Series F Senior Voting Preferred
Stock of the Company, par value $.01 per share.
SERIES F CERTIFICATE OF DESIGNATION: the Certificate of
Designation for the Series F Preferred Stock.
TOTAL OWNERSHIP: the total Common Stock Equivalents owned
beneficially or of record by the Existing Stockholder Parties and the Questor
Parties.
TOTAL OWNERSHIP RATIO: the total Common Stock Equivalents owned,
beneficially or of record, by either the Questor Parties or the Existing
Stockholder Parties, as the case may be, divided by Total Ownership;
TRANSFER: any direct or indirect sale, assignment, mortgage,
transfer, pledge, hypothecation or other disposal.
<PAGE>
IN WITNESS WHEREOF this Agreement has been signed by each of the
parties hereto, and shall be effective as of the date first above written.
COMPANY:
AEGIS COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By:
Name:
Title:
Address: ATC Communications Group, Inc.
7880 Bent Branch Drive
Suite 150
Irving, Texas 75063
<PAGE>
QUESTOR:
QUESTOR PARTNERS FUND II, L.P.
a Delaware limited partnership
By: Questor General Partner II, L.P.,
its General Partner
By: Questor Principals II, Inc.,
its General Partner
By:
Name:
Title:
Address: c/o Organization Services, Inc.
3411 Silverside Road
Wilmington, Delaware 19810
Attention: Gilbert Warren
With a copy to:
Questor Management Company
Address: 4000 Town Center
Suite 530
Southfield, Michigan 48075
<PAGE>
QUESTOR SIDE-BY-SIDE
PARTNERS II, L.P.
a Delaware limited partnership
By: Questor Principals II, Inc.
By:
Name:
Title:
Address: c/o Organization Services, Inc.
3411 Silverside Road
Wilmington, Delaware 19810
Attention: Gilbert Warren
With a copy to:
Questor Management Company
Address: 4000 Town Center
Suite 530
Southfield, Michigan 48075
<PAGE>
QUESTOR SIDE-BY-SIDE
PARTNERS II 3(C)(1), L.P.
a Delaware limited partnership
By: Questor Principals II, Inc.
By:
Name:
Title:
Address: c/o Organization Services, Inc.
3411 Silverside Road
Wilmington, Delaware 19810
Attention: Gilbert Warren
With a copy to:
Questor Management Company
Address: 4000 Town Center
Suite 530
Southfield, Michigan 48075
<PAGE>
TC CO-INVESTORS, LLC
a Delaware limited liability company
By: TC Management Partners, LLC
a Delaware limited liability company,
its General Partner
By:
Name:
Title:
Address: 1455 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
THAYER EQUITY INVESTORS III, L.P.
a Delaware limited partnership
By: TC Equity Partners, LLC
a Delaware limited liability company,
its General Partner
By:
Name:
Title:
Address: 1455 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
<PAGE>
EXHIBIT 10.5
AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT TO RIGHTS AGREEMENT (this "Amendment"), dated to be
effective as of August 25, 1999, is between AEGIS COMMUNICATIONS GROUP, INC.,
a Delaware corporation (the "Company"), and HARRIS TRUST AND SAVINGS BANK, an
Illinois banking corporation (the "Rights Agent"), at the direction of the
Company.
WHEREAS, the Company and the Rights Agent entered into a Rights
Agreement dated as of December 16, 1998 (the "Rights Agreement");
WHEREAS, SECTION 26 of the Rights Agreement permits the amendment of
the Rights Agreement by the Board of Directors of the Company;
WHEREAS, the Company's Board of Directors has approved the sale of
Series F Senior Voting Convertible Preferred Stock (the "Preferred Stock") to
Questor Partners Fund II, L.P., a Delaware limited partnership ("Fund II"),
Questor Side-by-Side Partners II, L.P., a Delaware limited partnership (the
"Side-by-Side Fund"), and Questor Side-by-Side Partners II 3(c)(1), L.P., a
Delaware limited partnership (the "3(c)(1) Fund" and together with Fund II
and the Side-by-Side Fund, the "Questor Investors") pursuant to the Series F
Senior Voting Convertible Preferred Stock Purchase and Registration Rights
Agreement dated August 25, 1999 by and among the Company, the Questor
Investors and certain existing stockholders of the Company (the "Stock
Agreement);
WHEREAS, pursuant to a resolution duly adopted on August 20, 1999,
the Board of Directors of the Company adopted and authorized the amendment of
the Rights Agreement so that the Rights Agreement will, among other things,
comply with the terms and conditions of the Stock Agreement;
WHEREAS, the Board of Directors of the Company has resolved and
determined that such amendment is desirable and consistent with, and for the
purpose of fulfilling, the objectives of the Board of Directors in connection
with the original adoption of the Rights Agreement;
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. AMENDMENT OF SECTION 1.
a. SECTION 1(a) of the Rights Agreement is hereby amended in its
entirety to read as follows:
(a) "ACQUIRING PERSON" means any Person that, together with
all Affiliates and Associates of such Person, is the Beneficial
Owner of 20% or more of the shares of Common Stock then
outstanding, but does not include (i) the Company; (ii) any
Subsidiary of the Company; (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company; (iv) any Person
organized, appointed, or established by the Company for or
pursuant to the terms of any such
<PAGE>
plan; (v) Thayer Equity Investors III, L.P., Edward Blank, ITC
Holding Company, Codinvest Limited, Questor Partners Fund II,
L.P., Questor Side-by-Side Partners II, L.P., Questor
Side-by-Side Partners II 3(c)(1), L.P., or any Affiliate or
Associate of such Persons; (vi) any Person that has reported
or is required to report such beneficial ownership on Schedule
13G (or any comparable or successor report) or on Schedule 13D
under the Exchange Act (or any comparable or successor report)
under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), which Schedule 13D does not state any
intention to, or reserve the right to, control or influence
the management or policies of the Company or engage in any of
the actions specified in Item 4 of such Schedule 13D (other
than the disposition of the Common Stock) and, within five (5)
Business Days (as defined below) of being requested by the
Company to advise it regarding the same, certifies to the
Company that such Person acquired beneficial ownership of
shares of Common Stock in excess of 20% inadvertently or
without knowledge of the terms of the Rights and such
certification is accepted as true by the Board of Directors
acting in good faith, such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so
that such Person no longer holds in excess of 20% of the
Common Stock then outstanding, and that, together with all of
such Person's Affiliates and Associates, thereafter does not
acquire additional shares of Common Stock to become the
Beneficial Owner of 20% or more of the shares of Common Stock
then outstanding; provided, however, that if the Person
requested to so certify fails to do so within five Business
Days, then such Person will become an Acquiring Person
immediately after such five Business-Day Period; (vii) any
Person that becomes an Acquiring Person solely as a result of
a reduction in the number of outstanding shares of Common
Stock in a transaction that is approved by the Board of
Directors, provided that such Person will immediately be an
Acquiring Person in the event such Person thereafter acquires
any additional shares of Common Stock (other than as a result
of a stock split or stock dividend) while the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding;
and (viii) any Person that is the Beneficial Owner as of the
date of this Agreement of in excess of 20% of the outstanding
Common Stock that has publicly disclosed such Beneficial
Ownership.
b. SECTION 1(h) of the Rights Agreement is hereby amended in its
entirety to read as follows:
(h) "EXCLUDED PERSON" means each of (i) Thayer Equity
Investers III, L.P., Edward Blank, ITC Holding Company, Codinvest
Limited, Questor Partners Fund II, L.P., Questor Side-by-Side
Partners II, L.P., Questor Side-by-Side Partners II 3(c)(1),
L.P., and any Affiliate or Associate of such Person and such
Person's spouse; (ii) such Person's lineal descendants and their
spouses with respect to Beneficial Ownership of Common Stock
received from such Person, such Person's spouse, and such
Person's lineal descendants or their spouses; (iii) any Person
established by one or more of the Persons referred to in CLAUSES
(i) or (ii) for charitable or estate planning purposes; and (iv)
any other Person controlled
2
<PAGE>
by one or more persons referred to in CLAUSES (i), (ii), or
(iii) or in which the Persons referred to in CLAUSES (i),
(ii), or (iii) beneficially own in excess of 51% of the
beneficial interest.
2. AMENDMENT OF SECTION 7(a).
SECTION 7(a) of the Rights Agreement is hereby amended in its entirety
to read as follows:
(a) Subject to SECTION 7(e), the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided in this Agreement including,
without limitation, the restrictions on exercisability set forth
in SECTION 9(c), SECTION 11(a)(iii), and SECTION 23(a)) in whole
or in part at any time after the Distribution Date upon surrender
of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side of the Rights Certificate
duly executed, to the Rights Agent at the principal office or
offices of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price with respect to the
total number of one one-thousandths of a share of Preferred Stock
(or other securities, cash, or other property, as the case may
be) as to which such surrendered Rights are then exercisable, at
or prior to the earlier of (i) the Closing as defined in the
Stock Agreement, (ii) the Close of Business on December 16, 2008,
(the "FINAL EXPIRATION DATE"),or (iii) the time at which the
Rights are redeemed as provided in SECTION 23 (the earlier of the
times referred to in CLAUSES (i) (ii) and (iii) being referred to
as the "EXPIRATION DATE")).
3. EFFECTIVENESS.
This Amendment to the Rights Agreement shall be effective as of the
date of this Amendment, and all references to the Rights Agreement shall, from
and after such time, be deemed to be references to the Rights Agreement as
amended hereby.
4. CERTIFICATION.
The undersigned officer of the Company certifies by execution hereof
that this Amendment is in compliance with the terms of SECTION 26 of the Rights
Agreement.
5. MISCELLANEOUS.
This Amendment may be executed in any number of counterparts, each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument. If
any term, provision, covenant or restriction of this Amendment is held by a
court of competent jurisdiction or other authority to be invalid, illegal, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date and year first above written.
AEGIS COMMUNICATIONS GROUP., INC.
By: ________________________________
Name: Matthew S. Waller
Title: Chief Financial Officer
HARRIS TRUST AND SAVINGS BANK, as
Rights Agent
By: _________________________________
Name: _________________________________
Title: _________________________________
4
<PAGE>
EXHIBIT 10.6
TERMINATION AGREEMENT
This Termination Agreement ("Termination Agreement"), dated as of
December 10, 1999, is by and among Aegis Communications Group, Inc., a
Delaware corporation, f/k/a ATC Communications Group, Inc. (the "Company"),
Thayer Equity Investors III, L.P., a Delaware limited partnership ("Thayer
Equity"), TC Co-Investors, LLC, a Delaware limited liability company ("TC
Co-Investors"), ITC Services Company ("ITC"), Edward Blank ("Blank"), and
trusts created by Edward Blank as both grantor and grantee under the Article
Fourth of the Edward Blank 1995 Grantor Retained Annuity Trust, a trust
organized under the laws of New Jersey (the "Blank Trust," and, together with
Thayer Equity, TC Co-Investors, ITC and Blank, the "Existing Investors").
RECITALS:
The Company and the Existing Investors are parties to that certain
Registration Rights Agreement dated as of July 9, 1998, as amended (the
"Registration Rights Agreement");
Subject to certain terms and conditions, the Company has agreed to
sell Series F Senior Voting Convertible Preferred Stock (the "Preferred
Stock") to Questor Partners Fund II, L.P., a Delaware limited partnership
("Fund II"), Questor Side-by-Side Partners II, L.P., a Delaware limited
partnership (the "Side-by-Side Fund"), and Questor Side-by-Side Partners II
3(c)(1), L.P., a Delaware limited partnership (the "3(c)(1) Fund" and
together with Fund II and the Side-by-Side Fund, the "Questor Investors");
A condition to the closing of the transactions contemplated by the
Series F Senior Voting Convertible Preferred Stock Purchase and Registration
Rights Agreement dated August 25, 1999, as amended, by and among the Company,
the Questor Investors and certain existing shareholders of the Company (the
"Stock Agreement") requires that the Registration Rights Agreement be
terminated;
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties to
this Termination Agreement hereby agree as follows:
1. TERMINATION OF REGISTRATION RIGHTS AGREEMENT. The Registration
Rights Agreement will terminate as of the date of this Termination Agreement.
2. ENTIRETY. This Termination Agreement contains the entire
agreement of the parties hereto with respect to the subject matter hereof,
and it shall not be amended except in writing executed by each of the parties
hereto.
3. CHOICE OF LAW. This Termination Agreement shall be governed by and
<PAGE>
construed in accordance with the internal laws (and not the law of conflicts
of law) of the State of Delaware.
4. COUNTERPARTS. This Termination Agreement may be executed in any
number of counterparts and by different parties in separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed on their behalf, as
of the day and year first above written.
AEGIS COMMUNICATIONS GROUP,
INC., a Delaware corporation
By:
Name:
Title:
THAYER EQUITY INVESTORS III,
L.P., a Delaware limited partnership
By:
Name:
Title:
TC CO-INVESTORS, LLC,
a Delaware limited liability company
By:
Name:
Title:
<PAGE>
ITC SERVICES COMPANY,
a Delaware corporation
By:
Name:
Title:
---------------------------------
EDWARD BLANK
EDWARD BLANK TRUSTS CREATED
BY EDWARD BLANK AS BOTH
GRANTOR AND GRANTEE UNDER
THE ARTICLE FOURTH OF THE
EDWARD BLANK 1995 GRANTOR
RETAINED ANNUITY TRUST, a
trust organized under the
laws of New Jersey
By:
Name:
Title:
<PAGE>
EXHIBIT 10.7
TERMINATION AGREEMENT
This Termination Agreement ("Termination Agreement"), dated as of
December 10, 1999, is by and among Aegis Communications Group, Inc., a
Delaware corporation, f/k/a ATC Communications Group, Inc. (the "Company"),
Thayer Equity Investors III, L.P., a Delaware limited partnership ("Thayer
Equity"), and TC Co-Investors, LLC, a Delaware limited liability company ("TC
Co-Investors," and, together with Thayer Equity, "Thayer").
RECITALS:
The Company and Thayer are parties to that certain Registration
Rights Agreement dated as of May 4, 1998, as amended (the "Registration
Rights Agreement");
Subject to certain terms and conditions, the Company has agreed to
sell Series F Senior Voting Convertible Preferred Stock (the "Preferred
Stock") to Questor Partners Fund II, L.P., a Delaware limited partnership
("Fund II"), Questor Side-by-Side Partners II, L.P., a Delaware limited
partnership (the "Side-by-Side Fund"), and Questor Side-by-Side Partners II
3(c)(1), L.P., a Delaware limited partnership (the "3(c)(1) Fund" and
together with Fund II and the Side-by-Side Fund, the "Questor Investors");
A condition to the closing of the transactions contemplated by the
Series F Senior Voting Convertible Preferred Stock Purchase and Registration
Rights Agreement dated August 25, 1999, as amended, by and among the Company,
the Questor Investors and certain existing shareholders of the Company (the
"Stock Agreement") requires that the Registration Rights Agreement be
terminated;
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties to
this Termination Agreement hereby agree as follows:
1. TERMINATION OF REGISTRATION RIGHTS AGREEMENT. The Registration
Rights Agreement will terminate as of the date of this Termination Agreement.
2. ENTIRETY. This Termination Agreement contains the entire
agreement of the parties hereto with respect to the subject matter hereof,
and it shall not be amended except in writing executed by each of the parties
hereto.
3. CHOICE OF LAW. This Termination Agreement shall be governed by
and construed in accordance with the internal laws (and not the law of
conflicts of law) of the State of Delaware.
4. COUNTERPARTS. This Termination Agreement may be executed in any
<PAGE>
number of counterparts and by different parties in separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed on their behalf, as
of the day and year first above written.
AEGIS COMMUNICATIONS GROUP,
INC., a Delaware corporation
By:
Name:
Title:
THAYER EQUITY INVESTORS III,
L.P., a Delaware limited partnership
By:
Name:
Title:
TC CO-INVESTORS, LLC, a Delaware
limited liability company
By:
Name:
Title:
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2. Use of Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . 29
1.3. Cross-References. . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.4. Accounting and Financial Determinations . . . . . . . . . . . . . . 29
ARTICLE II CONTINUATION OF EXISTING REVOLVING LOANS, COMMITMENTS,
BORROWING AND ISSUANCE PROCEDURES, NOTES
2.1. Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.1.1. Revolving Loan Commitment and Swing Line Loan Commitment. . . . . . 30
2.1.2. Letter of Credit Commitment . . . . . . . . . . . . . . . . . . . . 30
2.1.3. Lenders Not Permitted or Required To Make Loans or Issue or
Participate in Letters of Credit Under Certain Circumstances . . . 31
2.1.4. Issuer Not Permitted or Required to Issue Letters of Credit . . . . 31
2.2. Reduction of Commitment Amounts . . . . . . . . . . . . . . . . . . 31
2.2.1. Optional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.2.2. Mandatory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.3. Borrowing Procedures and Funding Maintenance. . . . . . . . . . . . 32
2.3.1. Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.3.2. Swing Line Loans. . . . . . . . . . . . . . . . . . . . . . . . . . 33
2.4. Continuation and Conversion Elections . . . . . . . . . . . . . . . 34
2.5. Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.6. Issuance Procedures . . . . . . . . . . . . . . . . . . . . . . . . 35
2.6.1. Other Lenders' Participation. . . . . . . . . . . . . . . . . . . . 36
2.6.2. Disbursements; Conversion to Revolving Loans. . . . . . . . . . . . 36
2.6.3. Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2.6.4. Deemed Disbursements. . . . . . . . . . . . . . . . . . . . . . . . 37
2.6.5. Nature of Reimbursement Obligations . . . . . . . . . . . . . . . . 38
2.7. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application . . . . . . . . . . . . . . 39
3.1.1. Repayments and Prepayments. . . . . . . . . . . . . . . . . . . . . 39
3.1.2. Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
3.2. Interest Provisions . . . . . . . . . . . . . . . . . . . . . . . . 40
3.2.1. Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.2.2. Post-Maturity Rates . . . . . . . . . . . . . . . . . . . . . . . . 41
3.2.3. Payment Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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<PAGE>
3.3. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.3.1. Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.3.2. Administrative Agent's Fee. . . . . . . . . . . . . . . . . . . . . 42
3.3.3. Letter of Credit Fee. . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE IV CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful. . . . . . . . . . . . . . . . . . . . . 43
4.2. Deposits Unavailable. . . . . . . . . . . . . . . . . . . . . . . . 43
4.3. Increased LIBO Rate Loan Costs, etc.. . . . . . . . . . . . . . . . 43
4.4. Funding Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.5. Increased Capital Costs . . . . . . . . . . . . . . . . . . . . . . 44
4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.7. Payments, Computations, etc.. . . . . . . . . . . . . . . . . . . . 46
4.8. Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . 47
4.9. Setoff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE V CONDITIONS PRECEDENT
5.1. Effectiveness: Initial Loans Hereunder. . . . . . . . . . . . . . . 48
5.1.1. Resolutions, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.1.2. Delivery of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.1.3. The Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.1.4. Closing Date Certificate. . . . . . . . . . . . . . . . . . . . . . 49
5.1.5. Affirmation and Consent . . . . . . . . . . . . . . . . . . . . . . 49
5.1.6. Payment of Outstanding Loans, etc.. . . . . . . . . . . . . . . . . 49
5.1.7. Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 49
5.1.8. Closing Fees, Expenses, etc . . . . . . . . . . . . . . . . . . . . 49
5.1.9. Borrowing Base Certificate. . . . . . . . . . . . . . . . . . . . . 49
5.2. All Credit Extensions . . . . . . . . . . . . . . . . . . . . . . . 49
5.2.1. Compliance with Warranties, No Default, etc.. . . . . . . . . . . . 49
5.2.2. Credit Extension Request. . . . . . . . . . . . . . . . . . . . . . 50
5.2.3. Satisfactory Legal Form . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE VI REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc.. . . . . . . . . . . . . . . . . . . . . . . . . 51
6.2. Due Authorization, Non-Contravention, etc.. . . . . . . . . . . . . 51
6.3. Government Approval, Regulation, etc. . . . . . . . . . . . . . . . 51
6.4. Validity, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.5. Financial Information . . . . . . . . . . . . . . . . . . . . . . . 52
6.6. No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . 52
6.7. Litigation, Labor Controversies, etc. . . . . . . . . . . . . . . . 52
6.8. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.9. Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . 53
6.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
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<PAGE>
6.11. Pension and Welfare Plans . . . . . . . . . . . . . . . . . . . . . 53
6.12. Environmental Warranties. . . . . . . . . . . . . . . . . . . . . . 53
6.13. Regulations U and X . . . . . . . . . . . . . . . . . . . . . . . . 55
6.14. Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . 55
6.15. Seniority of Obligations, etc.. . . . . . . . . . . . . . . . . . . 55
Year 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
ARTICLE VII COVENANTS
7.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . 56
7.1.1. Financial Information, Reports, Notices, etc. . . . . . . . . . . . 56
7.1.2. Compliance with Laws, etc.. . . . . . . . . . . . . . . . . . . . . 57
7.1.3. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . 58
7.1.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.1.5. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.1.6. Environmental Covenant. . . . . . . . . . . . . . . . . . . . . . . 58
7.1.7. Future Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 59
7.1.8. Future Leased Property and Future Acquisitions of Real Property . . 60
7.1.9. Use of Proceeds, etc. . . . . . . . . . . . . . . . . . . . . . . . 60
7.1.10. Rate Protection Agreements. . . . . . . . . . . . . . . . . . . . . 61
7.2. Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 61
7.2.1. Business Activities . . . . . . . . . . . . . . . . . . . . . . . . 61
7.2.2. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.2.3. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.2.4. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . 63
7.2.5. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.2.6. Restricted Payments, etc. . . . . . . . . . . . . . . . . . . . . . 64
7.2.7. Capital Expenditures, etc.. . . . . . . . . . . . . . . . . . . . . 65
7.2.8. Take or Pay Contracts . . . . . . . . . . . . . . . . . . . . . . . 65
7.2.9. Consolidation, Merger, etc. . . . . . . . . . . . . . . . . . . . . 66
7.2.10. Asset Dispositions, etc.. . . . . . . . . . . . . . . . . . . . . . 66
7.2.11. Modification of Certain Agreements. . . . . . . . . . . . . . . . . 66
7.2.12. Transactions with Affiliates. . . . . . . . . . . . . . . . . . . . 66
7.2.13. Negative Pledges, Restrictive Agreements, etc.. . . . . . . . . . . 67
7.2.14. Stock of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 67
7.2.15. Sale and Leaseback. . . . . . . . . . . . . . . . . . . . . . . . . 67
7.2.16. End of Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE VIII EVENTS OF DEFAULT
8.1. Listing of Events of Default. . . . . . . . . . . . . . . . . . . . 67
8.1.1. Non-Payment of Obligations. . . . . . . . . . . . . . . . . . . . . 68
8.1.2. Breach of Warranty. . . . . . . . . . . . . . . . . . . . . . . . . 68
8.1.3. Non-Performance of Certain Covenants and Obligations. . . . . . . . 68
8.1.4. Non-Performance of Other Covenants and Obligations. . . . . . . . . 68
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8.1.5. Default on Other Indebtedness . . . . . . . . . . . . . . . . . . . 68
8.1.6. Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.1.7. Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
8.1.8. Control of Aegis or the Borrower. . . . . . . . . . . . . . . . . . 69
8.1.9. Bankruptcy, Insolvency, etc.. . . . . . . . . . . . . . . . . . . . 69
8.1.10. Impairment of Security, etc.. . . . . . . . . . . . . . . . . . . . 70
8.1.11. Subordinated Notes. . . . . . . . . . . . . . . . . . . . . . . . . 70
8.2. Action if Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . 71
8.3. Action if Other Event of Default. . . . . . . . . . . . . . . . . . 71
ARTICLE IX THE AGENTS
9.1. Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.2. Funding Reliance, etc.. . . . . . . . . . . . . . . . . . . . . . . 72
9.3. Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.4. Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
9.5. Credit Extensions by Agents . . . . . . . . . . . . . . . . . . . . 73
9.6. Credit Decisions. . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.7. Copies, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9.8. The Documentation Agent and the Syndication Agent . . . . . . . . . 73
ARTICLE X GUARANTY
10.1. Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.2. Acceleration of Guaranty. . . . . . . . . . . . . . . . . . . . . . 74
10.3. Guaranty Absolute, etc. . . . . . . . . . . . . . . . . . . . . . . 74
10.4. Reinstatement, etc. . . . . . . . . . . . . . . . . . . . . . . . . 75
10.5. Waiver, etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.6. Postponement of Subrogation, etc. . . . . . . . . . . . . . . . . . 76
10.7. Successors, Transferees and Assigns; Transfers of Notes, etc. . . . 76
ARTICLE XI MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc. . . . . . . . . . . . . . . . . . . . . . 77
11.2. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.3. Payment of Costs and Expenses . . . . . . . . . . . . . . . . . . . 78
11.4. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.5. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.6. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.7. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
11.8. Execution in Counterparts, Effectiveness, etc.. . . . . . . . . . . 80
11.9. Governing Law; Entire Agreement . . . . . . . . . . . . . . . . . . 81
11.10. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 81
11.11. Sale and Transfer of Loans and Notes; Participations in Loans and
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.11.1. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
11.11.2. Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . 83
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11.11.3. SPC Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.12. Other Transactions. . . . . . . . . . . . . . . . . . . . . . . . . 85
11.13. Forum Selection and Consent to Jurisdiction . . . . . . . . . . . . 85
11.14. Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . . . 86
</TABLE>
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<TABLE>
<S> <C> <C>
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Amounts under Existing Credit Agreement
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Borrowing Base Certificate
EXHIBIT D - Form of Continuation/Conversion Notice
EXHIBIT E - Form of Closing Date Certificate
EXHIBIT F - Form of Compliance Certificate
EXHIBIT G - Form of Affirmation and ConsentEXHIBIT H-1
Conformed Copy of Aegis Security Agreement
EXHIBIT H-2 - Conformed Copy of Borrower Security Agreement
EXHIBIT H-3 - Conformed Copy of Subsidiary Security Agreement
EXHIBIT I-3 - Conformed Copy of Aegis Pledge Agreement
EXHIBIT I-2 - Conformed Copy of Borrower Pledge Agreement
EXHIBIT I-3 - Conformed Copy of Subsidiary Pledge Agreement
EXHIBIT J - Conformed Copy of Subsidiary Guaranty
EXHIBIT K - Form of Lender Assignment Agreement
EXHIBIT L-1 - Form of Opinion of Paul, Hastings, Janofsky & Walker LLP,
Counsel to the Obligors
EXHIBIT L-2 - Form of Opinion of Hughes & Luce, Counsel to Aegis
</TABLE>
vi
<PAGE>
EXHIBIT 10.8
[EXECUTION COPY]
THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of December 10, 1999,
among
IQI, INC.,
as the Borrower,
AEGIS COMMUNICATIONS GROUP, INC.,
as a Guarantor
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
THE BANK OF NOVA SCOTIA,
as Documentation Agent, and
Administrative Agent for the Lenders,
and
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent for the Lenders.
<PAGE>
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December
10, 1999 (amending and restating the Existing Credit Agreement, as defined
below), is among IQI, INC., a New York corporation (the "BORROWER"), AEGIS
COMMUNICATIONS GROUP, INC. ("AEGIS"), a Delaware corporation, as a Guarantor,
the various financial institutions parties hereto (each a "LENDER" and,
collectively, the "LENDERS"), THE BANK OF NOVA SCOTIA ("SCOTIA CAPITAL"), as
documentation agent (the "DOCUMENTATION AGENT") and administrative agent (the
"ADMINISTRATIVE AGENT") for the Lenders and CREDIT SUISSE FIRST BOSTON ("CSFB"),
as syndication agent (the "SYNDICATION AGENT").
W I T N E S S E T H:
WHEREAS, pursuant to the Second Amended and Restated Credit Agreement,
dated as of July 9, 1998 (as amended, supplemented, amended and restated or
otherwise modified prior to the Effective Date (such capitalized term, and other
capitalized terms used in these recitals, to have the meanings provided in
SECTION 1.1), the "EXISTING CREDIT AGREEMENT"), among the Borrower, Aegis, the
various financial institutions parties thereto immediately prior to the
Effective Date (the "EXISTING LENDERS") and Scotia Capital, as administrative
agent and documentation agent and CSFB, as syndication agent for the Existing
Lenders, the Existing Lenders made revolving loans (the "EXISTING REVOLVING
LOANS") and/or term loans, including the Additional Term Loans (as such term is
defined in the Existing Credit Agreement, and collectively referred to as (the
"EXISTING TERM LOANS") to the Borrower, with the outstanding principal amounts
of the Existing Revolving Loans and Existing Term Loans a portion of which (in
the case of the Revolving Loans) or all of which (in the case of the Term Loans)
are to be repaid on the Effective Date as set forth on SCHEDULE II hereto (the
Existing Term Loans, Existing Swing Line Loans and Existing Revolving Loans are
collectively referred to as the "EXISTING LOANS");
WHEREAS, Aegis will issue (the "EQUITY ISSUANCE"), pursuant to the Series
F Senior Voting Convertible Preferred Stock Purchase and Registration Rights
Agreement (as amended prior to the Effective Date and as amended, supplemented,
amended and restated or otherwise modified from time to time in accordance with
SECTION 7.2.11, the "STOCK PURCHASE AGREEMENT"), dated as of August 25, 1999, as
amended by a Letter Agreement dated as of August 26, 1999, and by Amendment No.
2, dated as of October 22, 1999, among Aegis, Questor Partners Fund II, L.P.
("QUESTOR"), Questor Side-by-Side Partners II, L.P., a Delaware limited
partnership (the "QUESTOR SIDE-BY-SIDE FUND"), and Questor Side-by-Side Partners
II 3(c)(1), L.P., a Delaware limited partnership (the "QUESTOR 3(C)(1) FUND"),
Thayer, TC Co-Investors, LLC, a Delaware limited liability company, ITC Services
Company, Edward Blank and certain trusts created by Edward Blank, 46,750 shares
of Series F Senior Voting Convertible Preferred Stock (the "SERIES F PREFERRED
SHARES") to the Questor Investors in exchange for gross cash proceeds of no less
than
<PAGE>
$46,750,000, the proceeds of which will be used to repay all of the Existing
Term Loans, a portion of the Existing Revolving Loans, pay accrued interest
on the Existing Loans (the "REPAYMENT"; the Repayment and the Equity
Issuance being collectively referred to as the "TRANSACTION"), and pay fees
and expenses in connection with the Transaction in an amount not to exceed
the Transaction Fee Amount;
WHEREAS,: (i) to consummate the Transaction, (ii) for the general
corporate and working capital needs of the Borrower and the wholly-owned
Subsidiaries of Aegis that are Guarantors and (iii) to finance Permitted
Acquisitions, the Borrower desires to amend and restate in its entirety the
Existing Credit Agreement to, among other things, continue approximately
$27,000,000 of Existing Revolving Loans as Revolving Loans under this Agreement,
and to obtain from the Lenders:
(i) a Revolving Loan Commitment (to include availability for
Revolving Loans and Letters of Credit, Swing Line Loans) pursuant to
which Borrowings of Revolving Loans, in a maximum aggregate principal
amount (together with all Swing Line Loans and Letters of Credit
Outstandings) not to exceed the Revolving Loan Commitment Amount, will be
made to the Borrower from time to time on and subsequent to the Effective
Date but prior to the Revolving Loan Commitment Termination Date;
(ii) a Letter of Credit Commitment, which shall be a sub-facility
of the Revolving Loan Commitment, pursuant to which an Issuer will issue
Letters of Credit for the account of the Borrower or any of the
Guarantors from time to time on and subsequent to the Effective Date but
prior to the Revolving Loan Commitment Termination Date in a maximum
aggregate Stated Amount at any one time outstanding not to exceed the
Letter of Credit Commitment Amount; and
(iii) a Swing Line Loan Commitment, which shall be a sub-facility
of the Revolving Loan Commitment, pursuant to which Borrowings of Swing
Line Loans in an aggregate outstanding principal amount not to exceed the
Swing Line Loan Commitment Amount will be made on and subsequent to the
Effective Date but prior to the Revolving Loan Commitment Termination
Date;
with all the proceeds of the Credit Extensions to be used for the purposes set
forth in SECTION 7.1.9; and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth, to amend and restate in its entirety the
Existing Credit Agreement in accordance with the terms hereof;
NOW, THEREFORE, the parties hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"ACCOUNT" means any account (as that term is defined in Section 9-106 of
the UCC) of the Borrower, Advanced or any of their wholly owned Subsidiaries
arising from the sale or lease of goods or rendering of services.
"ACCOUNT DEBTOR" is defined in CLAUSE (b) of the definition of "Eligible
Account".
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE and includes each other
Person as shall have subsequently been appointed as the successor Administrative
Agent pursuant to SECTION 9.4.
"ADVANCED" means Advanced Telemarketing Corporation, a Nevada
corporation.
"AEGIS" is defined in the PREAMBLE.
"AEGIS GUARANTY" means the obligations of Aegis under ARTICLE X.
"AEGIS OFFICER" is defined in SECTION 5.1.20.
"AEGIS PLEDGE AGREEMENT" means the Pledge Agreement, dated as of July 9,
1998, and executed and delivered by Aegis, a conformed copy of which is attached
as EXHIBIT I-1 hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"AEGIS SECURITY AGREEMENT" means the Security Agreement dated as of July
9, 1998, and executed and delivered by Aegis, a conformed copy of which is
attached as EXHIBIT H-1 hereto, as amended, supplemented, amended and restated
or otherwise modified from time to time.
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
<PAGE>
(b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGENT" and "AGENTS" means, as the context may require, the
Administrative Agent, the Syndication Agent and/or the Documentation Agent.
"AGREEMENT" means, on any date, this Third Amended and Restated Credit
Agreement as originally in effect on the Effective Date and as thereafter from
time to time amended, supplemented, amended and restated or otherwise modified
and in effect on such date.
"ALTERNATE BASE RATE" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of
(a) the rate of interest most recently established by the
Administrative Agent at its Domestic Office as its base rate for Dollar
loans; and
(b) the Federal Funds Rate most recently determined by the
Administrative Agent plus 1/2 of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Administrative Agent in connection with extensions of
credit. Changes in the rate of interest on that portion of any Loans maintained
as Base Rate Loans will take effect simultaneously with each change in the
Alternate Base Rate. The Administrative Agent will give notice promptly to the
Borrower and the Lenders of changes in the Alternate Base Rate.
"ANNUALIZED" means with respect to the (i) first Fiscal Quarter of the
2000 Fiscal Year, the applicable amount for such Fiscal Quarter multiplied by
four, (ii) the second Fiscal Quarter of the 2000 Fiscal Year and the first
Fiscal Quarter of the 2000 Fiscal Year, the applicable amount for all such
Fiscal Quarters multiplied by two and (iii) the Fiscal Quarters listed in clause
(ii) and the third Fiscal Quarter of the 2000 Fiscal Year, the applicable
amount for all such Fiscal Quarters multiplied by 1.333.
"APPLICABLE COMMITMENT FEE" means, prior to the Effective Date, the rate
calculated in accordance with the Existing Credit Agreement as in effect
immediately prior to the Effective Date and at all times following the
Effective Date, .375% per annum
"APPLICABLE MARGIN" means at all times during the applicable periods set
forth below,
(a) prior to the Effective Date, the rate calculated in
accordance with the Existing Credit Agreement as in effect immediately
prior to the Effective Date; and
(b) following the Effective Date, (i) with respect to the unpaid
principal amount of each Revolving Loan maintained as a Base Rate Loan,
the applicable percentage per
<PAGE>
annum set forth below under the column entitled "Applicable Margin for
Base Rate Loans" and (ii) with respect to the unpaid principal amount
of each Revolving Loan maintained as a LIBO Rate Loan, the applicable
percentage per annum set forth below under the column entitled
"Applicable Margin for LIBO Rate Loans":
<TABLE>
<CAPTION>
Applicable Margin Applicable Margin
for for
Debt to EBITDA Ratio Base Rate Loans LIBO Rate Loans
-------------------- --------------- ----------------
<S> <C> <C>
GREATER THAN 2.5:1 1.00% 2.00%
GREATER THAN 2.0:1 and LESS THAN 2.5:1 0.75% 1.75%
LESS THAN 2.0:1 0.50% 1.50%
</TABLE>
Notwithstanding anything to the contrary set forth in this Agreement
(including the then effective Leverage Ratio), the Applicable Margin for all
Loans from the Closing Date through (and including) delivery of the Compliance
Certificate for the Fiscal Quarter ending March 31, 2000 shall be 3.50% in the
case of each Revolving Loan maintained as a LIBO Rate Loan and 2.50% in the case
of each Revolving Loan maintained as a Base Rate Loan. The Debt to EBITDA Ratio
used to compute the Applicable Margin for Revolving Loans shall be the Debt to
EBITDA Ratio set forth in the Compliance Certificate most recently delivered by
the Borrower to the Administrative Agent pursuant to CLAUSE (c) of SECTION
7.1.1; changes in the Applicable Margin for Revolving Loans resulting from a
change in the Debt to EBITDA Ratio shall become effective upon delivery by the
Borrower to the Administrative Agent of a new Compliance Certificate pursuant to
CLAUSE (c) of SECTION 7.1.1. If the Borrower shall fail to deliver a Compliance
Certificate within the number of days after the end of any Fiscal Quarter as
required pursuant to CLAUSE (c) of SECTION 7.1.1 (without giving effect to any
grace period), the Applicable Margin for Revolving Loans from and including the
first day after the date on which such Compliance Certificate was required to be
delivered to but not including the date the Borrower delivers to the
Administrative Agent a Compliance Certificate shall conclusively equal the
highest Applicable Margin for Revolving Loans, respectively, set forth above.
"APPLICABLE PERSON" is defined in the definition of "Eligible Account".
"ASSIGNEE LENDER" is defined in SECTION 11.11.1.
"ATC" means ATC Communications Group, Inc., a Delaware corporation.
"ATC MERGER AGREEMENT" means the Agreement and Plan of Merger, dated as
of April 7, 1998, among the Borrower, ATC and Newco, as amended, supplemented,
amended and restated or otherwise modified from time to time in accordance with
SECTION 7.2.11.
<PAGE>
"AUTHORIZED OFFICER" means, relative to any Obligor, those of its
officers whose signatures and incumbency shall have been certified to the
Administrative Agent and the Lenders pursuant to SECTION 5.1.1.
"BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"BORROWER" is defined in the PREAMBLE.
"BORROWER PLEDGE AGREEMENT" means the Pledge Agreement, dated as of June
30, 1997 and executed and delivered by the Borrower, a conformed copy of which
is attached as EXHIBIT I-2 hereto, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"BORROWER SECURITY AGREEMENT" means the Security Agreement, dated as of
June 30, 1997 and executed and delivered by the Borrower, a conformed copy of
which is attached as EXHIBIT H-2 hereto, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"BORROWING" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
SECTION 2.1.
"BORROWING BASE AMOUNT" means, at any time, the Net Asset Value of all
Eligible Accounts at such time as determined in accordance with the definition
of "Net Asset Value" and as certified by the Borrower and Advanced to the
Lenders and the Agents in the most recently delivered Borrowing Base
Certificate.
"BORROWING BASE CERTIFICATE" means a certificate duly completed and
executed by the treasurer, assistant treasurer, chief accounting or financial
Authorized Officer of the Borrower and Advanced, substantially in the form of
EXHIBIT C hereto.
"BORROWING REQUEST" means a loan request and certificate duly executed by
an Authorized Officer of the Borrower, substantially in the form of EXHIBIT B-1
hereto.
"BUSINESS DAY" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in
New York, New York; and
(b) relative to the making, continuing, prepaying or repaying of
any LIBO Rate Loans, any day on which dealings in Dollars are carried on
in the London interbank market.
<PAGE>
"CAPITAL EXPENDITURES" means, for any period, the sum, without
duplication, of (a) the aggregate amount of all expenditures of Aegis and its
Subsidiaries for fixed or capital assets made during such period which, in
accordance with GAAP, would be classified as capital expenditures and (b) the
aggregate amount of all Capitalized Lease Liabilities incurred during such
period.
"CAPITAL STOCK" means (i) any and all shares, interests, participations
or other equivalents of or interests in (however designated) corporate stock,
including shares of preferred or preference stock, (ii) all partnership
interests (whether general or limited) in any Person which is a partnership,
(iii) all membership interests or limited liability company interests in any
limited liability company, and (iv) all equity or ownership interests in any
Person of any other type.
"CAPITALIZED LEASE LIABILITIES" means all monetary obligations of Aegis
or any of its Subsidiaries under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, and, for
purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a penalty.
"CASH EQUIVALENT INVESTMENT" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one year
after such time, issued or guaranteed by the United States Government;
(b) commercial paper, maturing not more than nine months from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any state of the United States or of
the District of Columbia and rated at least A-1 by S&P or P-1 by
Moody's, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing
not more than one year after such time, which is issued by either
(i) a commercial banking institution that is a member of
the Federal Reserve System and has a combined capital and surplus
and undivided profits of not less than $500,000,000, or
(ii) any Lender; or
<PAGE>
(d) any repurchase agreement entered into with any Lender (or
other commercial banking institution of the stature referred to in CLAUSE
(c)(i)) which
(i) is secured by a fully perfected security interest in
any obligation of the type described in any of CLAUSES (a) through
(c); and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase
obligation of such Lender (or other commercial banking
institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CHANGE IN CONTROL" means
(a) the failure of the Thayer Group and the Questor Investors or
any of their respective wholly-owed Subsidiaries to own in the aggregate,
free and clear of all Liens, at least 32.5% of the outstanding shares of
Capital Stock of Aegis on a fully diluted basis;
(b) the failure of Aegis to own, free and clear of all Liens
(other than in favor of the Administrative Agent pursuant to a Loan
Document), 100% of the outstanding shares of Capital Stock of the
Borrower or 98.94% or more of the outstanding Capital Stock of Advanced,
in each case, on a fully diluted basis; or
(c) any "person" or "group" (as such terms are used in Rule 13d-5
under the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and Sections 13(d) and 14(d) of the Exchange Act) of persons
(other than the Thayer Group or the Questor Investors or any of their
respective wholly-owned Subsidiaries) becomes, directly or indirectly, in
a single transaction or in a related series of transactions by way of
merger, consolidation, or other business combination or otherwise, the
"beneficial owner" (as such term is used in Rule 13d-3 of the Exchange
Act) of more than 20% of the total voting power in the aggregate of all
classes of Capital Stock of Aegis then outstanding entitled to vote
generally in elections of directors of Aegis.
"CLOSING DATE" means the date all closing conditions set forth in SECTION
5.1 are satisfied and the initial Credit Extension hereunder is made.
"CLOSING DATE CERTIFICATE" means a certificate of an Authorized Officer
of Aegis and the Borrower substantially in the form of EXHIBIT E hereto,
delivered pursuant to SECTION 5.1.4.
<PAGE>
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COMMITMENT" means, as the context may require, a Lender's Letter of
Credit Commitment, Revolving Loan Commitment or Swing Line Loan Commitment.
"COMMITMENT AMOUNT" means, as the context may require, the Letter of
Credit Commitment Amount, the Revolving Loan Commitment Amount or the Swing Line
Loan Commitment Amount.
"COMMITMENT TERMINATION EVENT" means
(a) the occurrence of any Event of Default described in CLAUSES
(a) through (d) of SECTION 8.1.9 with respect to Aegis or the Borrower;
or
(b) the occurrence and continuance of any other Event of Default
and either
(i) the declaration of the Loans to be due and payable
pursuant to SECTION 8.3, or
(ii) in the absence of such declaration, the giving of
notice by the Administrative Agent, acting at the direction of the
Required Lenders, to the Borrower that the Commitments have been
terminated.
"COMPLIANCE CERTIFICATE" means a certificate duly completed and executed
by the chief financial Authorized Officer of Aegis and the Borrower,
substantially in the form of EXHIBIT F hereto.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation under any Contingent Liability shall
(subject to any limitation set forth therein) be deemed to be the outstanding
principal amount (or maximum principal amount, if larger) of the debt,
obligation or other liability guaranteed thereby.
"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of EXHIBIT D hereto.
<PAGE>
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with Aegis or
the Borrower, are treated as a single employer under Section 414(b) or 414(c) of
the Code or Section 4001 of ERISA.
"CREDIT EXTENSION" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any previously issued Letter of Credit, by an
Issuer.
"CSFB" is defined in the PREAMBLE.
"DEBT" means the outstanding principal amount of all Indebtedness of
Aegis and its Subsidiaries referred to in CLAUSES (a), (b), (c) and (f) of the
definition of "INDEBTEDNESS".
"DEBT TO EBITDA RATIO" means, as of the last day of any Fiscal Quarter,
the ratio of
(a) Debt, excluding the Thayer Sub Debt and the Series F
Preferred shares (to the extent such Shares would otherwise constitute
Debt) outstanding on the last day of such Fiscal Quarter
TO
(b) EBITDA computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters.
PROVIDED, HOWEVER, that in computing the Debt to EBITDA Ratio for any
Fiscal Quarter ending on or prior to September 30, 2000, EBITDA (for
purposes of CLAUSE (a) of SECTION 7.2.4) shall be determined on an
Annualized basis.
"DEFAULT" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"DISBURSEMENT" is defined in SECTION 2.6.2.
"DISBURSEMENT DATE" is defined in SECTION 2.6.2.
"DISBURSEMENT DUE DATE" is defined in SECTION 2.6.2.
<PAGE>
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented or otherwise modified from
time to time by the Borrower with the written consent of the Administrative
Agent and the Required Lenders.
"DISINTERESTED DIRECTOR" shall mean, with respect to any Person and
transaction, a member of the board of directors (or analogous position in the
case of a non-corporate Person) of such Person who does not directly or
indirectly have any material monetary or other interest in or with respect to
such transaction.
"DOCUMENTATION AGENT" is defined in the PREAMBLE and includes each
other Person as shall have subsequently been appointed as the successor
Documentation Agent pursuant to SECTION 9.4.
"DOLLAR" and the sign "$" mean lawful money of the United States.
"DOMESTIC OFFICE" means, relative to any Lender, the office of such
Lender designated as such below its signature hereto or designated in the
Lender Assignment Agreement or such other office of a Lender (or any
successor or assign of such Lender) within the United States as may be
designated from time to time by notice from such Lender, as the case may be,
to each other Person party hereto.
"EBITDA" means (subject to the PROVISO below), for any applicable
period, the sum (without duplication) of
(a) Net Income,
PLUS
(b) the amount deducted, in determining Net Income, representing
amortization,
PLUS
(c) the amount deducted, in determining Net Income, of all income
taxes (whether paid or deferred) of Aegis and its Subsidiaries,
PLUS
(d) the amount deducted, in determining Net Income, of interest
expense,
PLUS
(e) the amount deducted, in determining Net Income, representing
depreciation of assets,
<PAGE>
PLUS
(f) the amount deducted, in determining Net Income, representing
fees and expenses actually paid in connection with the Transaction of not
more than the Transaction Fee Amount,
PLUS
(g) the amount deducted, in determining Net Income, representing
non-recurring restructuring expenses incurred by Aegis of not more than
$1,000,000 during the 2000 Fiscal Year.
"EFFECTIVE DATE" means the date this Agreement becomes effective pursuant
to SECTION 11.8.
"ELIGIBLE ACCOUNT" means, with respect to the Borrower and any of its
Subsidiaries and Advanced (the "APPLICABLE PERSONS"), at the time of any
determination thereof, any Account as to which each of the following
requirements has been fulfilled to the reasonable satisfaction of the
Administrative Agent:
(a) an Applicable Person owns such Account free and clear of all
Liens other than any Lien in favor of the Administrative Agent and the
Lenders granted pursuant to this Agreement or another Loan Document (and
the Administrative Agent shall have a first-priority (other than inchoate
statutory Liens otherwise permitted by SECTION 7.2.3) perfected Lien on
such Account);
(b) such Account is a legal, valid, binding and enforceable
obligation of the Person obligated under such Account (the "ACCOUNT
DEBTOR");
(c) such Account is not subject to any BONA FIDE dispute, setoff,
counterclaim or other claim or defense on the part of the Account Debtor
or any other Person denying liability under such Account; PROVIDED,
HOWEVER, that any such Account shall constitute an Eligible Account to
the extent it is not subject to any such dispute, setoff, counterclaim or
other claim or defense;
(d) an Applicable Person has the full and unqualified right to
assign and grant, and has assigned and granted, a Lien in such Account to
the Administrative Agent, for its benefit and that of the Lenders, as
security for the Obligations;
(e) such Account is evidenced by an invoice rendered to the
Account Debtor and is not evidenced by any instrument or chattel paper
(as the terms "instrument" and "chattel paper" are defined in Section
9-105 of the UCC);
<PAGE>
(f) such Account arose from the rendering of services by an
Applicable Person in the ordinary course of such Applicable Person's
business, and such services have been performed with the result that such
Account is due and payable;
(g) with respect to such Account, the Account Debtor is
(i) not an Affiliate of an Applicable Person,
(ii) not the subject of any reorganization, bankruptcy,
receivership, custodianship, insolvency or other condition
analogous with respect to such Account Debtor to those described
in CLAUSES (a) through (d) of SECTION 8.1.9,
(iii) either (A) located in one of the States of the
United States or Canada or (B) located in a jurisdiction other
than a State of the United States or Canada and payment of such
Account is supported by a letter of credit or other form of credit
support acceptable to the Administrative Agent (including, without
limitation, with respect to the issuer thereof) which has been
pledged and/or assigned to the Administrative Agent as collateral
for the Obligations, to the satisfaction of the Administrative
Agent; and
(iv) not a U.S. federal governmental entity or agency
unless the requirements of the Federal Assignment of Claims Act
(and each other statute, rule, regulation or order) applicable to
a first priority pledge thereof in favor of the Administrative
Agent for the benefit of the Lenders as collateral for the
Obligations have been complied with to the satisfaction of the
Administrative Agent;
(h) such Account is not outstanding more than 90 days past the
original billing date (which date shall not be later than 14 days from
the later of (i) the date of the completion and confirmation of the
services rendered that give rise to such Account and (ii) if such Account
is permitted to be billed only on a periodic basis, the date that such
Account becomes eligible for billing) for such Account;
(i) such Account is not an Account owing by an Account Debtor
having, at the time of any determination of Eligible Accounts, in excess
of 15% of the aggregate outstanding amount of all of such Account
Debtor's Accounts outstanding more than 90 days past the original invoice
date with respect thereto;
(j) with respect to the Account Debtor under such Account (other
than an Account Debtor that provides goods or services to an Applicable
Person necessary for the conduct of the business of such Applicable
Person or any other Applicable Person), none of the Applicable Persons is
indebted to such Account Debtor, unless the relevant Applicable Person
and such Account Debtor have entered into an agreement whereby the
<PAGE>
Account Debtor is prohibited from exercising any right of setoff with
respect to the Accounts of such Applicable Person; and
(k) such Account is payable only in U.S. Dollars or in Canadian
Dollars.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"EQUITY ISSUANCE" is defined in the SECOND RECITAL.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections.
"EVENT OF DEFAULT" is defined in SECTION 8.1.
"EXEMPT ENTITY" is defined in SECTION 7.2.10.
"EXISTING CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"EXISTING LENDERS" is defined in the FIRST RECITAL.
"EXISTING LOANS" is defined in the FIRST RECITAL.
"EXISTING REVOLVING LOANS" is defined in the FIRST RECITAL.
"EXISTING TERM LOANS" is defined in the FIRST RECITAL.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Scotia Capital from three federal funds brokers
of recognized standing selected by it.
FEE LETTER" means that certain confidential Fee Letter, dated as of
December 10, 1999, between the Borrower and the Administrative Agent.
<PAGE>
"FISCAL QUARTER" means any quarter of a Fiscal Year.
"FISCAL YEAR" means any period of twelve consecutive calendar months
ending on December 31st. References to a Fiscal Year with a number
corresponding to any calendar year (E.G. the "1999 Fiscal Year") refer to the
Fiscal Year ending on the December 31st occurring during such calendar year.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in SECTION 1.4.
"GRANTING BANK" has the meaning specified in SECTION 11.11.3.
"GUARANTOR" means each Person that (i) has executed and delivered to the
Administrative Agent a Guaranty, (ii) has executed and delivered to the
Administrative Agent a Security Agreement or (iii) the Capital Stock of which,
to the extent owned by any other Obligor, is pledged to the Administrative Agent
pursuant to a Pledge Agreement.
"GUARANTY" means, as the context may require, the Aegis Guaranty and/or
any Subsidiary Guaranty.
"HAZARDOUS MATERIAL" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance within the meaning of any other
applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
"HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities
of such Person under interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency exchange rates.
<PAGE>
"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular Section,
paragraph or provision of this Agreement or such other Loan Document.
"IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of any Obligor, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item
in such financial statement and which, as a condition to its removal,
would require an adjustment to such item the effect of which would be to
cause such Obligor to be in default of any of its obligations under
SECTION 7.2.4.
"INCLUDING" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of EJUSDEM GENERIS
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"INCREASE AMOUNT" means the cumulative incremental amounts as set forth
below under the column "Incremental Amount" by which the Revolving Loan
Commitment Amount shall be increased as a result of the EBITDA set forth in the
Compliance Certificate delivered by the Borrower to the Administrative Agent
pursuant to CLAUSE (c) of SECTION 7.1.1 for each of the Fiscal Quarters ending
December 31, 1999 and March 31, 2000:
EBITDA: INCREMENTAL AMOUNT:
Less than $3,500,000 $0
Greater than or equal to $3,500,000
but less than $4,000,000 $1,500,000
Greater than or equal to $4,000,000
but less than $4,500,000 $2,000,000
Greater than or equal to $4,500,000 $2,500,000
<PAGE>
"INDEBTEDNESS" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which
have been or should be, in accordance with GAAP, recorded as Capitalized
Lease Liabilities;
(d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging Obligations;
(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price
of property or services, and indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such
Person (including indebtedness arising under conditional sales or other
title retention agreements), whether or not such indebtedness shall have
been assumed by such Person or is limited in recourse; and
(g) all Contingent Liabilities of such Person in respect of any
of the foregoing.
For all purposes of this Agreement the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer (except to the extent that either by
operation of law or by the express terms of the relevant partnership or joint
venture agreement provide that liabilities incurred in connection therewith are
limited in recourse to such Person).
"INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.
"INDEMNIFIED PARTIES" is defined in SECTION 11.4.
"INTEREST COVERAGE RATIO" means, at the close of any Fiscal Quarter, the
ratio computed (except as set forth in the PROVISO below) for the period
consisting of such Fiscal Quarter and each of the three immediately prior Fiscal
Quarters of:
(a) EBITDA (for all such Fiscal Quarters)
<PAGE>
TO
(b) Interest Expense (for all such Fiscal Quarters);
PROVIDED, HOWEVER, that in computing the Interest Coverage Ratio for any Fiscal
Quarter ending on or prior to September 30, 2000, EBITDA and Interest Expense
(for purposes of CLAUSE (b) of SECTION 7.2.4) shall be determined on an
Annualized basis.
"INTEREST EXPENSE" means, for any Fiscal Quarter, the aggregate
consolidated cash interest expense (net of interest income) of Aegis and its
Subsidiaries for such Fiscal Quarter, as determined in accordance with GAAP.
"INTEREST PERIOD" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to SECTION 2.3.1 or
2.4 and ending on (but excluding) the day which numerically corresponds to such
date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), in each
case as the Borrower may select in its relevant notice pursuant to SECTION 2.3.1
or 2.4; PROVIDED, HOWEVER, that
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than five different dates;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
(c) if such Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first
Business Day of a calendar month, in which case such Interest Period
shall end on the Business Day next preceding such numerically
corresponding day); and
(d) no Interest Period may end later than the Stated Maturity
Date for such Loan.
"INTERSERV" means Interserv Services Corporation, a Delaware corporation.
"INVESTMENT" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business);
<PAGE>
(b) any Contingent Liability of such Person incurred in
connection with loans or advances described in CLAUSE (a); and
(c) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property.
"ISSUANCE REQUEST" means a Letter of Credit request and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the form of
EXHIBIT B-2 hereto.
"ISSUER" means, collectively, Scotia Capital (or any affiliate, unit or
agency thereof) in its individual capacity hereunder as issuer of any Letters of
Credit and such other Lender as may be designated by Scotia Capital (and agreed
to by the Borrower and such Lender) in its individual capacity as the issuer of
any Letters of Credit.
"LENDER" and "LENDERS" is defined in the PREAMBLE.
"LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement
substantially in the form of EXHIBIT K hereto.
"LETTER OF CREDIT" is defined in CLAUSE (a) of SECTION 2.1.2.
"LETTER OF CREDIT COMMITMENT" means, with respect to the Issuer, the
Issuer's obligation to issue Letters of Credit pursuant to SECTION 2.1.2 and,
with respect to each of the other Lenders that has a Revolving Loan Commitment,
the obligation of each such Lender to participate in such Letters of Credit
pursuant to SECTION 2.6.1.
"LETTER OF CREDIT COMMITMENT AMOUNT" means, on any date, a maximum amount
of $4,000,000, as such amount may be reduced from time to time pursuant to
SECTION 2.2.
"LETTER OF CREDIT OUTSTANDINGS" means, on any date, an amount equal to
the sum of
(a) the then aggregate amount which is undrawn and available
under all issued and outstanding Letters of Credit,
PLUS
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations in respect of such Letters of Credit.
<PAGE>
"LIBO RATE" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to the Administrative Agent's LIBOR
Office in the London interbank market as at or about 11:00 a.m. London time two
Business Days prior to the beginning of such Interest Period for delivery on the
first day of such Interest Period, and in an amount approximately equal to the
amount of the Administrative Agent's LIBO Rate Loan and for a period
approximately equal to such Interest Period.
"LIBO RATE (RESERVE ADJUSTED)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO RATE
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Administrative Agent on the basis of the LIBOR
Reserve Percentage in effect on, and the applicable rates furnished to and
received by the Administrative Agent from Scotia Capital, two Business Days
before the first day of such Interest Period.
"LIBO RATE LOAN" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBOR OFFICE" means, relative to any Lender, the office of such Lender
designated as such below its signature hereto or designated in the Lender
Assignment Agreement or such other office of a Lender as designated from time to
time by notice from such Lender to the Borrower and the Administrative Agent,
whether or not outside the United States, which shall be making or maintaining
LIBO Rate Loans of such Lender hereunder.
"LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of and including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
<PAGE>
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever.
"LOAN" means, as the context may require, a Revolving Loan, or a Swing
Line Loan of any type.
"LOAN DOCUMENT" means this Agreement, the Notes, each Letter of
Credit, each Borrowing Base Certificate, the Fee Letter, each Pledge
Agreement, each Guaranty, each Mortgage, each Security Agreement, each Rate
Protection Agreement and each other agreement, document or instrument
delivered in connection with this Agreement or any other Loan Document,
whether or not specifically mentioned herein or therein.
"MERGERCO" means ISC Merger Corp., a wholly-owned Subsidiary of the
Borrower organized under the laws of Delaware.
"MOODY'S" means Moody's Investors Service, Inc.
"MORTGAGE" means, collectively, each mortgage or deed of trust or
leasehold mortgage executed and delivered by the Borrower or any other
Obligor in favor of the Administrative Agent for the benefit of the Lenders
pursuant to the requirements of the Existing Credit Agreement or this
Agreement, in form and substance satisfactory to the Administrative Agent, in
each case as amended, supplemented, amended and restated or otherwise
modified from time to time.
"NET ASSET VALUE" means, at any time of any determination thereof, 85%
of an amount equal to (x) the book value of all Eligible Accounts as
reflected on the books of the Applicable Persons in accordance with GAAP, net
of (y) all credits, discounts and allowances.
"NET EQUITY PROCEEDS" means with respect to the sale or issuance by
Aegis or any of its Subsidiaries to any Person of any stock, warrants or
options or the exercise of any such warrants or options, the EXCESS of:
(a) the gross cash proceeds received by Aegis or such
Subsidiary, as the case may be, from such sale, exercise or issuance,
OVER
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually
<PAGE>
incurred in connection with such sale or issuance which have not been
paid to Affiliates of Aegis or such Subsidiary, as the case may be, in
connection therewith.
PROVIDED, however, that any cash received by Aegis (i) in connection with the
issuance of its Capital Stock to any Questor Investor in Fiscal Year 2000 and/or
(ii) in accordance with CLAUSE (ii) of SECTION 7.2.5 shall be excluded as "Net
Equity Proceeds" for the purposes of this definition.
"NET INCOME" means, for any period, the net income of Aegis and its
Subsidiaries for such period on a consolidated basis, excluding non-recurring
non-cash extraordinary gains and losses.
"NEWCO" means ATC Merger Sub, Inc., a New York corporation.
"1997 MERGER" means the merger by Interserv with and into MergerCo, with
MergerCo as the surviving corporation.
"1997 MERGER AGREEMENT" means the Agreement and Plan of Merger, dated
as of June 19, 1997, among the Borrower, Interserv, ITC Holding Company, Inc.
and MergerCo.
"NON-U.S. SUBSIDIARY" means any Subsidiary of Aegis that is not
incorporated or organized in or under the laws of the United States or any
state thereof.
"NOTE" means, as the context may require, a Revolving Note or a Swing
Line Note.
"OBLIGATIONS" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes and each other Loan Document.
"OBLIGOR" means Aegis, the Borrower or any other Person (other than
Thayer, the Questor Investors, any Agent, the Issuer or any Lender) obligated
under, or otherwise a party to, any Loan Document.
"ORGANIC DOCUMENT" means, relative to any Obligor, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of Capital
Stock.
"OTHER PERSON" is defined in the definition of "Subsidiary".
"PARTICIPANT" is defined in SECTION 11.11.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
<PAGE>
"PENSION PLAN" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which
Aegis or the Borrower or any corporation, trade or business that is, along
with Aegis or the Borrower, a member of a Controlled Group, may have
liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing
sponsor under section 4069 of ERISA.
"PERCENTAGE" means, relative to any Lender, the percentage relating
to Revolving Loans, as set forth opposite its name on its signature page
hereto or set forth in a Lender Assignment Agreement, as such percentage may
be adjusted from time to time pursuant to a Lender Assignment Agreement
executed by such Lender and its Assignee Lender(s) and delivered pursuant to
SECTION 11.11. As used herein, "Percentage" as it relates to a Lender's
Percentage of Letter of Credit Outstandings or Swing Line Loans shall be
equal to such Lender's Percentage of Revolving Loans.
"PERMITTED ACQUISITION" means, subject to CLAUSE (c) of SECTION 7.2.5,
any acquisition by Aegis, the Borrower or their respective Subsidiaries of
all or any part of the assets, shares or other equity interests in any
business or enterprise engaged in the business of providing telemarketing
services or market research services, in each case, for which the
Administrative Agent has received a Compliance Certificate with respect to
the computations of the applicable covenants as at the most recently ended
Fiscal Quarter of Aegis on a PRO FORMA basis as if such acquisition had been
consummated and the incurrence of Indebtedness with respect to such
acquisition had occurred at the end of such Fiscal Quarter.
"PERSON" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"PLAN" means any Pension Plan or Welfare Plan.
"PLEDGE AGREEMENT" means, as the context may require, the Subsidiary
Pledge Agreement, the Aegis Pledge Agreement and/or the Borrower Pledge
Agreement.
"QUARTERLY PAYMENT DATE" means the last day of each March, June,
September and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"QUESTOR" is defined in the SECOND RECITAL.
"QUESTOR CONTRIBUTION" means any cash equity contributed to Aegis by
any Questor Investor to make Permitted Acquisitions for the purpose of making
a Permitted Acquisition
<PAGE>
identified in a notice delivered to the Administrative Agent on or prior to
the date that such capital contribution is made.
"QUESTOR INVESTORS" means Questor, Questor Side-By-Side Fund, Questor
3(C)(1) Fund, and any other investment fund or vehicle managed or sponsored
by Questor Management Company, PROVIDED, that Questor Management Company
controls (by contract or otherwise) decisions and management of such
investment fund or vehicle, or as to which Questor Principals II, Inc. acts
directly or indirectly, as general partner.
"QUESTOR SIDE-BY-SIDE FUND" is defined in the SECOND RECITAL.
"QUESTOR 3(C)(1) FUND" is defined in the SECOND RECITAL.
"RATE PROTECTION AGREEMENT" means, collectively, any interest rate
swap, cap, collar or similar agreement entered into by the Borrower pursuant
to the terms of this Agreement under which the counterparty to such agreement
is (or at the time such Rate Protection Agreement was entered into, was) a
Lender or an Affiliate of a Lender.
"REFUNDED SWING LINE LOANS" is defined in CLAUSE (b) of SECTION 2.3.2.
"REIMBURSEMENT OBLIGATION" is defined in SECTION 2.6.3.
"RELEASE" means a "release", as such term is defined in CERCLA.
"RESTRICTED PAYMENT" means (a) the declaration or payment of any
dividend (other than dividends payable solely in Capital Stock of Aegis or
any Subsidiary) on, or the making of any payment or distribution on account
of, or setting apart assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of any
class of Capital Stock of Aegis or any Subsidiary or any warrants or options
to purchase any such Capital Stock, whether now or hereafter outstanding, or
the making of any other distribution in respect thereof, either directly or
indirectly, whether in cash or property, obligations of the Borrower or any
Subsidiary or otherwise or (b) (i) the payment or prepayment of principal of,
or make any payment of interest on (other than interest payments-in-kind),
any Subordinated Debt on any day other than the stated, scheduled date for
such payment or prepayment set forth in the Subordinated Debt Documents, or
which would violate the subordination provisions of such Subordinated Debt or
(ii) the redemption, purchase or defeasance of any Subordinated Debt.
"REPAYMENT" is defined in the SECOND RECITAL.
"REPLACEMENT NOTICE" is defined in SECTION 4.5.
"REQUIRED LENDERS" means, subject to the PROVISO below, at any time,
Lenders holding at least 51% of the sum of (a) the then aggregate outstanding
principal amount of the Loans plus (b)
<PAGE>
the aggregate amount of Letter of Credit Outstandings plus (c) the aggregate
amount of the unused Commitments (to the extent that such Commitments have
not terminated) PROVIDED, that at any time that there are fewer than three
Lenders, "Required Lenders" shall mean all Lenders.
"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, ET SEQ., as in effect
from time to time.
"REVOLVING LOAN" is defined in SECTION 2.1.1.
"REVOLVING LOAN COMMITMENT" means, relative to any Lender, such
Lender's obligation to make Revolving Loans pursuant to SECTION 2.1.1 and to
issue (in the case of an Issuer) or participate in (in the case of each of
the Lenders) Letters of Credit pursuant to SECTION 2.1.2.
"REVOLVING LOAN COMMITMENT AMOUNT" means, on any date, $45,000,000
plus the Increase Amount, as such aggregate amount may be reduced from time
to time pursuant to SECTION 2.2; PROVIDED, however, that the Revolving Loan
Commitment Amount shall not exceed $50,000,000.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earliest of
(a) June 30, 2003;
(b) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to SECTION 2.2; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in CLAUSE (b) or (c), the
Revolving Loan Commitments shall terminate automatically and without any
further action.
"REVOLVING NOTE" means a promissory note of the Borrower payable to
the order of any Lender, in the form of EXHIBIT A-1 hereto (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the Borrower to such Lender
resulting from outstanding Revolving Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or
renewal thereof.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"SCOTIA CAPITAL" is defined in the PREAMBLE.
"SECURITY AGREEMENT" means, as the context may require, the Aegis
Security Agreement, the Borrower Security Agreement and/or the Subsidiary
Security Agreement.
"SELLER" means Mr. Edward Blank in his individual capacity.
<PAGE>
"SELLER SUBORDINATED NOTE" means each of (i) the $808,600 12%
unsecured promissory note of the Borrower, dated December 17, 1997 and (ii)
the $191,400 12% unsecured promissory note of the Borrower, dated December
17, 1997, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with SECTION 7.2.11.
"SERIES F PREFERRED SHARES" is defined in the SECOND RECITAL.
"SPC" has the meaning specified in SECTION 11.11.3.
"STATED AMOUNT" of each Letter of Credit means, on any date, the total
amount available to be drawn under such Letter of Credit on such date.
"STATED EXPIRY DATE" is defined in SECTION 2.6.
"STATED MATURITY DATE" means June 30, 2003.
"STOCK PURCHASE AGREEMENT" is defined in the THIRD RECITAL.
"SUBJECT LENDER" is defined in SECTION 4.5.
"SUBORDINATED DEBT" means the Seller Subordinated Notes, the Thayer
Sub Debt, and all other unsecured Indebtedness of the Borrower for money
borrowed which is subordinated, upon terms satisfactory to the Administrative
Agent and the Syndication Agent, in right of payment to the payment in full
in cash of all Obligations and pursuant to documentation containing
maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to the Administrative Agent and the Syndication Agent.
"SUBORDINATED DEBT DOCUMENT" means, collectively, the loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements evidencing the terms of Subordinated Debt, as
amended, supplemented, amended and restated or otherwise modified in
accordance with SECTION 7.2.12.
"SUBORDINATION PROVISIONS" is defined in SECTION 8.1.11.
"SUBSIDIARY" means, with respect to any Person, any corporation,
limited liability company, partnership or other entity ("OTHER PERSON") of
which more than 50% of the Capital Stock of such Other Person (irrespective
of whether at the time Capital Stock of any other class or classes of such
Other Person shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by
such Person, by such Person and one or more other Subsidiaries of such
Person, or by one or more other Subsidiaries
<PAGE>
of such Person. Unless the context otherwise specifically requires, the term
"Subsidiary" shall be a reference to a Subsidiary of Aegis.
"SUBSIDIARY GUARANTOR" means, on the Effective Date, each Subsidiary
of Aegis that is a U.S. Subsidiary and thereafter, each Subsidiary of Aegis
that is required, pursuant to CLAUSE (a) of SECTION 7.1.7, to execute and
deliver a Subsidiary Guaranty.
"SUBSIDIARY GUARANTY" means the guaranty, dated as of June 30, 1997 or
July 9, 1998 and executed and delivered by each Subsidiary Guarantor pursuant
to the terms of the Existing Credit Agreement and this Agreement,
substantially in the form of EXHIBIT J hereto, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"SUBSIDIARY PLEDGE AGREEMENT" means each Security Agreement, dated as
of June 30, 1997 or July 9, 1998 and executed and delivered by each
Subsidiary party thereto, conformed copies of which are attached as EXHIBIT
I-3 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"SUBSIDIARY SECURITY AGREEMENT" means the Security Agreement, dated as
of June 30, 1997 or July 9, 1998 and executed and delivered by each
Subsidiary party thereto, conformed copies of which are attached as EXHIBIT
H-3 hereto, in each case as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time.
"SWING LINE LENDER" means Scotia Capital (or another Lender designated
by Scotia Capital with the consent of the Borrower, if such Lender agrees to
be the Swing Line Lender hereunder), in such Person's capacity as the maker
of Swing Line Loans.
"SWING LINE LOAN" is defined in CLAUSE (b) of SECTION 2.1.1.
"SWING LINE LOAN COMMITMENT" means, with respect to the Swing Line
Lender, the Swing Line Lender's obligation pursuant to CLAUSE (b) of SECTION
2.1.1 to make Swing Line Loans and, with respect to each Lender with a
Commitment to make Revolving Loans (other than the Swing Line Lender), such
Lender's obligation to participate in Swing Line Loans pursuant to SECTION
2.3.2.
"SWING LINE LOAN COMMITMENT AMOUNT" means, on any date, $4,000,000, as
such amount may be reduced from time to time pursuant to SECTION 2.2.
"SWING LINE NOTE" means a promissory note of the Borrower payable to
the Swing Line Lender, in substantially the form of EXHIBIT A-2 hereto (as
such promissory note may be amended, endorsed or otherwise modified from time
to time), evidencing the aggregate Indebtedness of the Borrower to the Swing
Line Lender resulting from outstanding Swing Line Loans, and also means all
other promissory notes accepted from time to time in substitution therefor or
renewal thereof.
<PAGE>
"SYNDICATION AGENT" is defined in the PREAMBLE and includes each other
Person as shall have subsequently been appointed as the successor Syndication
Agent pursuant to SECTION 9.4.
"TAXES" is defined in SECTION 4.6.
"THAYER" means Thayer Equity Investors III, L.P., a Delaware limited
partnership, a shareholder of Aegis.
"THAYER GROUP" means, collectively, Thayer and TC Co-Investors, LLC, a
Delaware limited company.
"THAYER SUB DEBT" means (a) the unsecured, payment-in-kind
subordinated debt issued by Aegis to the order of Thayer on March 30, 1999,
in an aggregate original principal amount of $5,666,666.67 and bearing
interest at a rate not in excess of 12% per annum and which is convertible
into shares of common stock of Aegis at a conversion price of $1.15 per
share, (b) the $2,000,000 in principal amount payment-in-kind unsecured
subordinated loan made by Thayer to the Borrower on April 16, 1998, (c) any
preferred stock of Aegis converted into payment-in-kind Subordinated Debt
issued to Thayer in accordance with SECTION 7.2.6 and (d) any other
Subordinated Debt issued to represent payment-in-kind interest on the
Subordinated Debt described in clauses (a), (b) and (c) of this definition
(or any payment-in-kind interest issued in respect thereof).
"TRANSACTION" is defined in the SECOND RECITAL.
"TRANSACTION FEE AMOUNT" means $5,100,000.
"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.
"UNITED STATES" or "U.S." means the United States of America, its
fifty States and the District of Columbia.
"U.S. SUBSIDIARY" means any Subsidiary of Aegis organized under the
laws of the United States or any state thereof.
"WAIVER" means an agreement in favor of the Administrative Agent for
the benefit of the Lenders and the Issuer in form and substance reasonably
satisfactory to the Administrative Agent.
<PAGE>
"WELFARE PLAN" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
"WHOLLY-OWNED SUBSIDIARY" shall mean, with respect to any Person, any
Subsidiary of such Person all of the Capital Stock (and all rights and
options to purchase such Capital Stock) of which, other than directors'
qualifying shares or investments by foreign nationals mandated by applicable
laws, are owned, beneficially and of record, by such Person and/or one or
more wholly-owned Subsidiaries of such Person.
SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in any Loan Document,
certificate, notice and other communication delivered from time to time in
connection with any Loan Document.
SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified,
references in this Agreement and in each other Loan Document to any Article
or Section are references to such Article or Section of this Agreement or
such other Loan Document, as the case may be, and, unless otherwise
specified, references in any Article, Section or definition to any clause are
references to such clause of such Article, Section or definition.
SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, all accounting determinations and computations
hereunder or thereunder (including under SECTION 7.2.4) shall be made, and
all financial statements required to be delivered hereunder or thereunder
shall be prepared in accordance with, those generally accepted accounting
principles ("GAAP") applied in the preparation of the financial statements
referred to in SECTION 6.5.
ARTICLE II
CONTINUATION OF EXISTING REVOLVING LOANS,
COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. COMMITMENTS. On the terms and subject to the conditions
of this Agreement (including ARTICLE V), each Issuer severally agrees that it
will issue Letters of Credit pursuant to SECTION 2.1.3, and each other Lender
that has a Revolving Loan Commitment severally agrees that it will purchase
participation interests in such Letters of Credit pursuant to SECTION 2.6.1.
SECTION 2.1.1. REVOLVING LOAN COMMITMENT AND SWING LINE LOAN
COMMITMENT. Each of the parties hereto acknowledges and agrees that the
Existing Revolving Loans shall continue as Revolving Loans for all purposes
under this Agreement and the other Loan
<PAGE>
Documents. In addition, subject to compliance by the Borrower with the terms
of this Agreement, the Revolving Loans and Swing Line Loans will be made as
set forth below.
(a) From time to time on any Business Day occurring prior to
the Revolving Loan Commitment Termination Date, each Lender will make
Loans (relative to such Lender, its "REVOLVING LOANS") to the Borrower
equal to such Lender's Percentage of the aggregate amount of the
Borrowing of Revolving Loans requested by the Borrower to be made on
such day. On the terms and subject to the conditions hereof, the
Borrower may from time to time borrow, prepay and reborrow Revolving
Loans.
(b) From time to time on any Business Day occurring prior to
the Revolving Loan Commitment Termination Date, the Swing Line Lender
will make Loans (relative to the Swing Line Lender, its "SWING LINE
LOANS") to the Borrower equal to the principal amount of the Swing
Line Loans requested by the Borrower. On the terms and subject to the
conditions hereof, the Borrower may from time to time borrow, prepay
and reborrow such Swing Line Loans.
SECTION 2.1.2. LETTER OF CREDIT COMMITMENT. Subject to compliance by
the Borrower with the terms of this Agreement,from time to time on any
Business Day occurring from and after the Effective Date but prior to the
Revolving Loan Commitment Termination Date, the Issuer will
(a) issue one or more standby or documentary letters of credit
(each referred to as a "LETTER OF CREDIT") for the account of the
Borrower or any Guarantor in the Stated Amount requested by the
Borrower on such day; or
(b) extend the Stated Expiry Date of an existing Letter of
Credit previously issued hereunder to a date not later than the
earlier of (x) the Revolving Loan Commitment Termination Date and (y)
one year from the date of such extension.
SECTION 2.1.3. LENDERS NOT PERMITTED OR REQUIRED TO MAKE LOANS OR ISSUE
OR PARTICIPATE IN LETTERS OF CREDIT UNDER CERTAIN CIRCUMSTANCES. No Lender
shall be permitted or required to, and the Borrower shall not request the Lender
to
(a) make any Revolving Loan or Swing Line Loan if, after
giving effect thereto, the aggregate outstanding principal amount of
all the Revolving Loans and Swing Line Loans
(i) of all Lenders, together with the aggregate amount
of all Letter of Credit Outstandings, would exceed the lesser
of (x) the Revolving Loan Commitment Amount and (y) the then
existing Borrowing Base Amount; or
<PAGE>
(ii) of such Lender, together with such Lender's
Percentage of the aggregate amount of all Letter of Credit
Outstandings, would exceed such Lender's Percentage of the
lesser of (x) the Revolving Loan Commitment Amount and (y) the
then existing Borrowing Base Amount; or
(b) make any Swing Line Loan if after giving effect to the
making of such Swing Line Loan, the outstanding principal amount of
all Swing Line Loans would exceed the then existing Swing Line Loan
Commitment Amount.
SECTION 2.1.4. ISSUER NOT PERMITTED OR REQUIRED TO ISSUE LETTERS OF
CREDIT. No Issuer shall be permitted or required to issue any Letter of Credit
if, after giving effect thereto,
(a) the aggregate amount of all Letter of Credit Outstandings
would exceed the Letter of Credit Commitment Amount; or
(b) the sum of the aggregate amount of all Letter of Credit
Outstandings plus the aggregate amount of all Revolving Loans and
Swing Line Loans then outstanding would exceed the lesser of (x) the
Revolving Loan Commitment Amount and (y) the then existing Borrowing
Base Amount.
SECTION 2.2. REDUCTION OF COMMITMENT AMOUNTS. The Commitment Amounts
are subject to reduction from time to time pursuant to this SECTION 2.2.
SECTION 2.2.1. OPTIONAL. The Borrower may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the Swing
Line Loan Commitment Amount, the Letter of Credit Commitment Amount or the
Revolving Loan Commitment Amount; PROVIDED, HOWEVER, that all such reductions
(i) shall be permanent and (ii) (x) in the case of Base Rate Loans (other
than Swing Line Loans) shall require at least one Business Day's prior notice
to the Administrative Agent, and any partial reduction of any Commitment
Amount shall be in a minimum amount of $500,000 and in an integral multiple
of $100,000 or (y) in the case of LIBO Rate Loans, shall require at least
three Business Days' prior notice to the Administrative Agent, and any
partial reduction of any Commitment Amount shall be in a minimum amount of
$500,000 and in an integral multiple of $500,000. Any reduction of the
Revolving Loan Commitment Amount which reduces the Revolving Loan Commitment
Amount below the sum of (i) the Swing Line Loan Commitment Amount and (ii)
the Letter of Credit Commitment Amount shall result in an automatic and
corresponding reduction of the Swing Line Loan Commitment Amount and/or
Letter of Credit Commitment Amount (as directed by the Borrower in a notice
to the Administrative Agent delivered together with the notice of such
voluntary reduction in the Revolving Loan Commitment Amount) to an aggregate
amount not in excess of the Revolving Loan Commitment Amount, as so reduced,
without any further action on the part of the Swing Line Lender or the Issuer.
<PAGE>
SECTION 2.2.2. MANDATORY. The Revolving Loan Commitment Amount, the
Swing Line Loan Commitment Amount and the Letter of Credit Commitment Amount
shall be reduced as set forth below.
(a) The Revolving Loan Commitment Amount shall, without any
further action, automatically and permanently be reduced (i) by
$5,000,000 on June 30, 2002; and (ii) with the proceeds of any Net Equity
Proceeds in an amount equal to that required pursuant to CLAUSE (c) of
SECTION 3.1.1.
(b) Any reduction of the Revolving Loan Commitment Amount which
reduces the Revolving Loan Commitment Amount below the sum of (i) the
Swing Line Loan Commitment Amount and (ii) the Letter of Credit
Commitment Amount shall result in an automatic and corresponding
reduction of the Swing Line Loan Commitment Amount and/or Letter of
Credit Commitment Amount (as directed by the Borrower in a notice to the
Administrative Agent) to an aggregate amount not in excess of the
Revolving Loan Commitment Amount, as so reduced, without any further
action on the part of the Swing Line Lender or the Issuer.
SECTION 2.3. BORROWING PROCEDURES AND FUNDING MAINTENANCE. Loans shall
be made by the Lenders in accordance with this Section.
SECTION 2.3.1. REVOLVING LOANS. By delivering a Borrowing Request to
the Administrative Agent on or before 12:00 noon, New York time, on a
Business Day, the Borrower may from time to time irrevocably request, on not
less than one (in the case of Base Rate Loans) or three (in the case of LIBO
Rate Loans) nor more than (in each case) five Business Days' notice, that a
Borrowing be made, in the case of LIBO Rate Loans, in a minimum amount of
$500,000 and an integral multiple thereof, and in the case of Base Rate
Loans, in a minimum amount of $500,000 and an integral multiple of $250,000,
or, in either case, in the unused amount of the applicable Commitment. On
the terms and subject to the conditions of this Agreement, each Borrowing
shall be comprised of the type of Loans, and shall be made on the Business
Day, specified in such Borrowing Request. On or before 11:00 a.m., New York
time, on such Business Day each Lender shall deposit with the Administrative
Agent same day funds in an amount equal to such Lender's Percentage of the
requested Borrowing. Such deposit will be made to an account which the
Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the
Administrative Agent shall make such funds available to the Borrower by wire
transfer to the accounts the Borrower shall have specified in its Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any
other Lender's failure to make any Loan.
SECTION 2.3.2. SWING LINE LOANS. (a) By telephonic notice, promptly
followed (within three Business Days) by the delivery of a confirming Borrowing
Request, to the Swing Line Lender on or before 11:00 a.m., New York time, on a
Business Day, the Borrower may from time to time irrevocably request that Swing
Line Loans be made by the Swing Line Lender in an aggregate minimum principal
amount of $200,000 and an integral multiple of $100,000.
<PAGE>
Each request by the Borrower for a Swing Line Loan shall constitute a
representation and warranty by the Borrower that on the date of such request
and (if different) the date of the making of the Swing Line Loan, both
immediately before and after giving effect to such Swing Line Loan and the
application of the proceeds thereof, the statements made in SECTION 5.2.1 are
true and correct. All Swing Line Loans shall be made as Base Rate Loans and
shall not be entitled to be converted into LIBO Rate Loans. The proceeds of
each Swing Line Loan shall be made available by the Swing Line Lender, by its
close of business on the Business Day telephonic notice is received by it as
provided in the preceding sentences, to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its notice therefor.
(b) If (i) any Swing Line Loan shall be outstanding for more than
four full Business Days or (ii) after giving effect to any request for a
Swing Line Loan or a Revolving Loan the aggregate principal amount of
Revolving Loans and Swing Line Loans outstanding to the Swing Line Lender,
together with the Swing Line Lender's Percentage of all Letter of Credit
Outstandings, would exceed the Swing Line Lender's Percentage of the
Revolving Loan Commitment Amount, the Swing Line Lender, at any time in its
sole and absolute discretion, may request each Lender that has a Revolving
Loan Commitment, and each such Lender, including the Swing Line Lender hereby
agrees, to make a Revolving Loan (which shall always be initially funded as a
Base Rate Loan) in an amount equal to such Lender's Percentage of the amount
of the Swing Line Loans ("REFUNDED SWING LINE LOANS") outstanding on the date
such notice is given. On or before 11:00 a.m. (New York time) on the first
Business Day following receipt by each Lender of a request to make Revolving
Loans as provided in the preceding sentence, each such Lender (other than the
Swing Line Lender) shall deposit in an account specified by the
Administrative Agent to the Lenders from time to time the amount so requested
in same day funds, whereupon such funds shall be immediately delivered to the
Swing Line Lender (and not the Borrower) and applied to repay the Refunded
Swing Line Loans. On the day such Revolving Loans are made, the Swing Line
Lender's Percentage of the Refunded Swing Line Loans shall be deemed to be
paid. Upon the making of any Revolving Loan pursuant to this clause, the
amount so funded shall become due under such Lender's Revolving Note and
shall no longer be owed under the Swing Line Note. Each Lender's obligation
to make the Revolving Loans referred to in this clause shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever; (ii) the occurrence
or continuance of any Default; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower or any other Obligor, including a
reduction in the Borrowing Base Amount subsequent to the date of the making
of a Swing Line Loan; (iv) the acceleration or maturity of any Loans or the
termination of the Revolving Loan Commitment after the making of any Swing
Line Loan; (v) any breach of this Agreement by the Borrower or any other
Lender; or (vi) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
(c) In the event that (i) Aegis, the Borrower or any of their
Subsidiaries is subject to any bankruptcy or insolvency proceedings as provided
in SECTION 8.1.9 or (ii) the Swing Line Lender
<PAGE>
otherwise requests, each Lender with a Revolving Loan Commitment shall
acquire without recourse or warranty an undivided participation interest
equal to such Lender's Percentage of any Swing Line Loan otherwise required
to be repaid by such Lender pursuant to the preceding clause by paying to the
Swing Line Lender on the date on which such Lender would otherwise have been
required to make a Revolving Loan in respect of such Swing Line Loan pursuant
to the preceding clause, in same day funds, an amount equal to such Lender's
Percentage of such Swing Line Loan, and no Revolving Loans shall be made by
such Lender pursuant to the preceding clause. From and after the date on
which any Lender purchases an undivided participation interest in a Swing
Line Loan pursuant to this clause, the Swing Line Lender shall distribute to
such Lender (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participation interest
is outstanding and funded) its ratable amount of all payments of principal
and interest in respect of such Swing Line Loan in like funds as received;
PROVIDED, HOWEVER, that in the event such payment received by the Swing Line
Lender is required to be returned to the Borrower, such Lender shall return
to the Swing Line Lender the portion of any amounts which such Lender had
received from the Swing Line Lender in like funds.
(d) Notwithstanding anything herein to the contrary, the Swing Line
Lender shall not be obligated to make any Swing Line Loans if it has elected
after the occurrence of a Default not to make Swing Line Loans and has
notified the Borrower in writing or by telephone of such election. The Swing
Line Lender shall promptly give notice to the Lenders of such election not to
make Swing Line Loans.
SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 12:00
noon, New York time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one (in the case of a conversion of LIBO
Rate Loans to Base Rate Loans) and three (in the case of a continuation of
LIBO Rate Loans or a conversion of Base Rate Loans into LIBO Rate Loans) nor
more than (in each case) five Business Days' notice that all, or any portion
in an aggregate minimum amount of $500,000 and an integral multiple thereof,
in the case of the continuation of, or conversion into, LIBO Rate Loans, or
an aggregate minimum amount of $500,000 and an integral multiple of $125,000
in the case of the conversion into Base Rate Loans, (other than Swing Line
Loans as provided in CLAUSE (a) of SECTION 2.3.2) be, in the case of Base
Rate Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate
Loans, be converted into a Base Rate Loan or continued as a LIBO Rate Loan
(in the absence of delivery of a Continuation/Conversion Notice with respect
to any LIBO Rate Loan at least three Business Days before the last day of the
then current Interest Period with respect thereto, such LIBO Rate Loan shall,
on such last day, automatically convert to a Base Rate Loan); PROVIDED,
HOWEVER, that (x) each such conversion or continuation shall be pro rated
among the applicable outstanding Loans of the relevant Lenders, and (y) no
portion of the outstanding principal amount of any Loans may be continued as,
or be converted into, LIBO Rate Loans when any Default has occurred and is
continuing.
<PAGE>
SECTION 2.5. FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking
facility created by such Lender) to make or maintain such LIBO Rate Loan, so
long as such action does not result in increased costs to the Borrower;
PROVIDED, HOWEVER, that such LIBO Rate Loan shall nonetheless be deemed to
have been made and to be held by such Lender, and the obligation of the
Borrower to repay such LIBO Rate Loan shall nevertheless be to such Lender
for the account of such foreign branch, Affiliate or international banking
facility. In addition, the Borrower hereby consents and agrees that, for
purposes of any determination to be made for purposes of SECTION 4.1, 4.2,
4.3 or 4.4, it shall be conclusively assumed that each Lender elected to fund
all LIBO Rate Loans by purchasing Dollar deposits in its LIBOR Office's
interbank eurodollar market.
SECTION 2.6. ISSUANCE PROCEDURES. By delivering to the
Administrative Agent an Issuance Request on or before 12:00 noon, New York
time, on a Business Day, the Borrower may, from time to time irrevocably
request, on not less than three nor more than ten Business Days' notice (or
such other notice as may be acceptable to the Issuer in its sole discretion),
in the case of an initial issuance of a Letter of Credit, and not less than
three nor more than ten Business Days' notice prior to the then Existing
Stated Expiry Date of a Letter of Credit (unless a shorter or longer notice
period is acceptable to the Issuer in its sole discretion), in the case of a
request for the extension of the Stated Expiry Date of a Letter of Credit,
that the Issuer issue, or extend the Stated Expiry Date of, as the case may
be, an irrevocable Letter of Credit for the Borrower's account or for the
account of any Guarantor, in such form as may be requested by the Borrower
and approved by the Issuer, solely for the purposes described in SECTION
7.1.9. Notwithstanding anything to the contrary contained herein or in any
separate application for any Letter of Credit, the Borrower hereby
acknowledges and agrees that it shall be obligated to reimburse the Issuer
upon each Disbursement of a Letter of Credit, and it shall be deemed to be
the obligor for purposes of each such Letter of Credit issued hereunder
(whether the account party on such Letter of Credit is the Borrower or a
Guarantor). Upon receipt of an Issuance Request, the Administrative Agent
shall promptly notify the Issuer and each Lender thereof. Each Letter of
Credit shall by its terms be stated to expire on a date (its "STATED EXPIRY
DATE") no later than the earlier to occur of (i) the Revolving Loan
Commitment Termination Date or (ii) in the case of standby Letters of Credit,
one year from the date of its issuance and, in the case of documentary
Letters of Credit, 180 days from the date of its issuance. The Issuer will
make available to the beneficiary thereof the original of each Letter of
Credit which it issues hereunder.
SECTION 2.6.1. OTHER LENDERS' PARTICIPATION. Upon the issuance of each
Letter of Credit issued by the Issuer pursuant hereto, and without further
action, each Lender (other than the Issuer) that has a Revolving Loan Commitment
shall be deemed to have irrevocably purchased from the Issuer, to the extent of
its Percentage to make Revolving Loans, and the Issuer shall be deemed to have
irrevocably granted and sold to such Lender a participation interest in such
Letter of Credit (including the Contingent Liability and any Reimbursement
Obligation and all rights with respect thereto), and such Lender shall, to the
extent of its Revolving Loan Commitment Percentage, be responsible for
reimbursing promptly (and in any
<PAGE>
event within one Business Day) the Issuer for Reimbursement Obligations which
have not been reimbursed by the Borrower in accordance with SECTION 2.6.3.
In addition, such Lender shall, to the extent of its Percentage to make
Revolving Loans, be entitled to receive a ratable portion of the Letter of
Credit fees payable pursuant to SECTION 3.3.3 with respect to each Letter of
Credit and of interest payable pursuant to SECTION 3.2 with respect to any
Reimbursement Obligation. To the extent that any Lender has reimbursed the
Issuer for a Disbursement as required by this Section, such Lender shall be
entitled to receive its ratable portion of any amounts subsequently received
(from the Borrower or otherwise) in respect of such Disbursement.
SECTION 2.6.2. DISBURSEMENTS; CONVERSION TO REVOLVING LOANS. The
Issuer will notify the Borrower and the Administrative Agent promptly of the
presentment for payment of any Letter of Credit issued by the Issuer,
together with notice of the date (the "DISBURSEMENT DATE") such payment shall
be made (each such payment, a "DISBURSEMENT"). Subject to the terms and
provisions of such Letter of Credit and this Agreement, the Issuer shall make
such payment to the beneficiary (or its designee) of such Letter of Credit.
Prior to 12:00 noon, New York time, on the first Business Day following the
Disbursement Date (the "DISBURSEMENT DUE DATE"), the Borrower will reimburse
the Administrative Agent, for the account of the Issuer, for all amounts
which the Issuer has disbursed under such Letter of Credit, together with
interest thereon at the rate per annum otherwise applicable to Revolving
Loans (made as Base Rate Loans) from and including the Disbursement Date to
but excluding the Disbursement Due Date and, thereafter (unless such
Disbursement is converted into a Base Rate Loan on the Disbursement Due
Date), at a rate per annum equal to the rate per annum then in effect with
respect to overdue Revolving Loans pursuant to SECTION 3.2.2 for the period
from the Disbursement Due Date through the date of such reimbursement;
PROVIDED, HOWEVER, that, if no Default shall have then occurred and be
continuing, unless the Borrower has notified the Administrative Agent no
later than one Business Day prior to the Disbursement Due Date that it will
reimburse the Issuer for the applicable Disbursement, then the amount of the
Disbursement shall be deemed to be a Revolving Loan constituting a Base Rate
Loan and following the giving of notice thereof by the Administrative Agent
to the Lenders, each Lender with a commitment to make Revolving Loans (other
than the Issuer) will deliver to the Issuer on the Disbursement Due Date
immediately available funds in an amount equal to such Lender's Percentage of
such Revolving Loan. Each conversion of Disbursement amounts into Revolving
Loans shall constitute a representation and warranty by the Borrower that on
the date of the making of such Revolving Loan all of the statements set forth
in SECTION 5.2.1 are true and correct.
SECTION 2.6.3. REIMBURSEMENT. The obligation (a "REIMBURSEMENT
OBLIGATION") of the Borrower under SECTION 2.6.2 to reimburse the Issuer with
respect to each Disbursement (including interest thereon) not converted into a
Base Rate Loan pursuant to SECTION 2.6.2, and, upon the failure of the Borrower
to reimburse the Issuer and the giving of notice thereof by the Administrative
Agent to the Lenders, each Lender's (to the extent it has a Revolving Loan
Commitment) obligation under SECTION 2.6.1 to reimburse the Issuer or fund its
Percentage of any Disbursement converted into a Base Rate Loan, shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment
<PAGE>
which the Borrower or such Lender, as the case may be, may have or have had
against the Issuer or any such Lender, including any defense based upon the
failure of any Disbursement to conform to the terms of the applicable Letter
of Credit (if, in the Issuer's good faith opinion, such Disbursement is
determined to be appropriate) or any non-application or misapplication by the
beneficiary of the proceeds of such Letter of Credit; PROVIDED, HOWEVER, that
after paying in full its Reimbursement Obligation hereunder, nothing herein
shall adversely affect the right of the Borrower or such Lender, as the case
may be, to commence any proceeding against the Issuer for any wrongful
Disbursement made by the Issuer under a Letter of Credit as a result of acts
or omissions constituting gross negligence or willful misconduct on the part
of the Issuer.
SECTION 2.6.4. DEEMED DISBURSEMENTS. Upon the occurrence and during
the continuation of any Event of Default of the type described in SECTION
8.1.9 or, with notice from the Administrative Agent acting at the direction
of the Required Lenders, upon the occurrence and during the continuation of
any other Event of Default,
(a) an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is undrawn
and available under all Letters of Credit issued and outstanding shall,
without demand upon or notice to the Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuer under such Letters of
Credit (notwithstanding that such amount may not in fact have been so
paid or disbursed); and
(b) upon notification by the Administrative Agent to the Borrower
of its obligations under this Section, the Borrower shall be immediately
obligated to reimburse the Issuer for the amount deemed to have been so
paid or disbursed by the Issuer.
Any amounts so payable by the Borrower pursuant to this Section shall be
deposited in cash with the Administrative Agent and held as collateral
security for the Obligations in connection with the Letters of Credit issued
by the Issuer. At such time when the Events of Default giving rise to the
deemed disbursements hereunder shall have been cured or waived, the
Administrative Agent shall return to the Borrower all amounts then on deposit
with the Administrative Agent pursuant to this Section, together with accrued
interest at the Federal Funds Rate, which have not been applied to the
satisfaction of such Obligations.
SECTION 2.6.5. NATURE OF REIMBURSEMENT OBLIGATIONS. The Borrower
and, to the extent set forth in SECTION 2.6.1, each Lender with a Revolving
Loan Commitment, shall assume all risks of the acts, omissions or misuse of
any Letter of Credit by the beneficiary thereof. The Issuer (except to the
extent of its own gross negligence or willful misconduct) shall not be
responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;
<PAGE>
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may prove
to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise;
or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a Letter
of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of
the rights or powers granted to the Issuer or any Lender with a Revolving
Loan Commitment hereunder. In furtherance and extension and not in
limitation or derogation of any of the foregoing, any action taken or omitted
to be taken by the Issuer in good faith (and not constituting gross
negligence or willful misconduct) shall be binding upon the Borrower, each
Obligor and each such Lender, and shall not put the Issuer under any
resulting liability to the Borrower, any Obligor or any such Lender, as the
case may be.
SECTION 2.7. NOTES. Each Lender's Loans under a Commitment shall be
evidenced by a Note payable to the order of such Lender in a maximum
principal amount equal to such Lender's Percentage of the applicable
Commitment Amount. All Swing Line Loans made by the Swing Line Lender shall
be evidenced by a Swing Line Note payable to the order of the Swing Line
Lender in a maximum principal amount equal to the Swing Line Loan Commitment
Amount. The Borrower hereby irrevocably authorizes each Lender to make (or
cause to be made) appropriate notations on the grid attached to such Lender's
Notes (or on any continuation of such grid), which notations, if made, shall
evidence, INTER ALIA, the date of, the outstanding principal of, and the
interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall be conclusive and binding on the Borrower absent
manifest error; PROVIDED, HOWEVER, that the failure of any Lender to make any
such notations shall not limit or otherwise affect any Obligations of the
Borrower or any other Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. REPAYMENTS AND PREPAYMENTS; APPLICATION.
<PAGE>
SECTION 3.1.1. REPAYMENTS AND PREPAYMENTS. The Borrower shall repay
in full the unpaid principal amount of each Loan upon the Stated Maturity
Date therefor. Prior thereto, the Borrower or Aegis (as the case may be)
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of
any
(i) Loans (other than Swing Line Loans), PROVIDED,
HOWEVER, that
(A) any such prepayment of Revolving Loans shall be
made PRO RATA among the Revolving Loans of the same type
and, if applicable, having the same Interest Period of all
Lenders that have made such Revolving Loans;
(B) the Borrower shall comply with SECTION 4.4 in
the event that any LIBO Rate Loan is prepaid on any day
other than the last day of the Interest Period for such
Loan;
(C) all such voluntary prepayments shall require at
least three but no more than five Business Days' prior
written notice to the Administrative Agent; and
(D) all such voluntary partial prepayments shall
be, in the case of LIBO Rate Loans, in an aggregate minimum
amount of $500,000 and an integral multiple thereof and, in
the case of Base Rate Loans, in an aggregate minimum amount
of $500,000 and an integral multiple of $125,000; or
(ii) Swing Line Loans, PROVIDED that all such voluntary
prepayments shall require prior telephonic notice to the Swing
Line Lender on or before 1:00 p.m., New York time, on the day of
such prepayment (such notice to be confirmed in writing within
24 hours thereafter);
(b) shall, on each date when any reduction in the then existing
Borrowing Base Amount shall become effective, make a mandatory prepayment
of Revolving Loans and (if necessary) Swing Line Loans and (if necessary)
deposit with the Administrative Agent cash collateral for Letter of
Credit Outstandings, in an aggregate amount equal to the excess, if any,
of the aggregate, outstanding principal amount of all Revolving Loans,
Swing Line Loans and Letter of Credit Outstandings over the then existing
Borrowing Base Amount, to be applied as set forth in SECTION 3.1.2;
(c) shall, concurrently with the receipt by Aegis or any of its
Subsidiaries of any Net Equity Proceeds, deliver to the Administrative
Agent a calculation of the amount of
<PAGE>
such Net Equity Proceeds, and no later than 5 Business Days following
the delivery of such calculation, make a mandatory reduction to the
Revolving Loan Commitment Amount and make prepayment of the Loans, in
each case in an amount equal to 50% of such Net Equity Proceeds, to be
applied as set forth in SECTION 3.1.2; and
(d) shall, on each date when any reduction in the Revolving Loan
Commitment Amount shall become effective, including pursuant to SECTION
2.2 or SECTION 3.1.2, make a mandatory prepayment of Revolving Loans and
(if necessary) Swing Line Loans, and (if necessary) deposit with the
Administrative Agent cash collateral for Letter of Credit Outstandings)
in an aggregate amount equal to the excess, if any, of the aggregate
outstanding principal amount of all Revolving Loans, Swing Line Loans and
Letters of Credit Outstanding over the Revolving Loan Commitment Amount
as so reduced.
Each prepayment of any Loans made pursuant to this Section shall be
without premium or penalty, except as may be required by SECTION 4.4.
SECTION 3.1.2. APPLICATION. Subject to the following sentence, each
prepayment or repayment of the principal of the Loans shall be applied, to the
extent of such prepayment or repayment, FIRST, to the principal amount thereof
being maintained as Base Rate Loans, and SECOND, to the principal amount thereof
being maintained as LIBO Rate Loans. Mandatory prepayments pursuant to CLAUSE
(c) of SECTION 3.1.1 shall be applied, to the extent of such prepayment, to a
permanent reduction in the Revolving Loan Commitment Amount.
SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this SECTION 3.2.
SECTION 3.2.1. RATES. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base Rate
Loan, equal to the sum of the Alternate Base Rate from time to time in
effect plus, the Applicable Margin for Base Rate Loans;
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus, the Applicable Margin
for LIBO Rate Loans; and
(c) with respect to Swing Line Loans, equal to the sum of the
Alternate Base Rate from time to time in effect plus the Applicable
Margin for Base Rate Loans which are Revolving Loans.
<PAGE>
All LIBO Rate Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO
Rate Loan.
SECTION 3.2.2. POST-MATURITY RATES. After the date any principal
amount of any Loan is due and payable (whether on the Stated Maturity Date,
upon acceleration or otherwise), or after any other monetary Obligation
(other than overdue Reimbursement Obligations which shall bear interest as
provided in SECTION 2.6.2) of the Borrower shall have become due and payable,
the Borrower shall pay, but only to the extent permitted by law, interest
(after as well as before judgment) on such amounts at a rate per annum equal
to the Alternate Base Rate plus the Applicable Margin for Base Rate Loans
plus a margin of 2% per annum.
SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the third month anniversary of the first day of such
Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO Rate
Loans on a day when interest would not otherwise have been payable
pursuant to CLAUSE (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to SECTION 8.2 or SECTION 8.3, immediately
upon such acceleration.
Interest accrued on Loans, Reimbursement Obligations or other monetary
Obligations arising under this Agreement or any other Loan Document after the
date such amount is due and payable (whether on the Stated Maturity Date,
upon acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. FEES. The Borrower agrees to pay the fees set forth in
this SECTION 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender that has a Revolving Loan
Commitment, for the period
<PAGE>
(including any portion thereof when any of the Lender's Commitments are
suspended by reason of the Borrower's inability to satisfy any condition of
ARTICLE V) commencing on the Effective Date and continuing through the
Revolving Loan Commitment Termination Date, a commitment fee at the rate of
the Applicable Commitment Fee on such Lender's Percentage of the average
daily unused portion of the Revolving Loan Commitment Amount (net of Letter
of Credit Outstandings); PROVIDED, that prior to the Effective Date, the
commitment fee shall accrue based on the "Revolving Loan Commitment Amount",
as defined in the Existing Credit Agreement. Such commitment fees shall be
payable by the Borrower in arrears on each Quarterly Payment Date and on the
Revolving Loan Commitment Termination Date. The making of Swing Line Loans
by the Swing Line Lender shall not constitute usage of the Revolving Loan
Commitment for the purpose of calculation of the commitment fees to be paid
by the Borrower to the Lenders pursuant to this SECTION 3.3.1.
SECTION 3.3.2. ADMINISTRATIVE AGENT'S FEE. The Borrower agrees to
pay to the Administrative Agent, for its own account, the non-refundable fees
in the amounts and on the dates set forth in the Fee Letter.
SECTION 3.3.3. LETTER OF CREDIT FEE. The Borrower agrees to pay to
the Administrative Agent, for the PRO RATA account of the Issuer and each
other Lender that has a Revolving Loan Commitment, a Letter of Credit fee in
an amount equal to (a) with respect to each standby Letter of Credit, the
Applicable Margin per annum for LIBO Rate Loans that are Revolving Loans
multiplied by the Stated Amount of each such Letter of Credit, and (b) with
respect to each documentary Letter of Credit, 1-1/4% per annum multiplied by
the Stated Amount of each such Letter of Credit, such fees being payable
quarterly in arrears on each Quarterly Payment Date. The Borrower further
agrees to pay to the Issuer for its own account on the date of issuance of
each Letter of Credit an issuance fee in an amount equal to 1/4 of 1% per
annum of the Stated Amount thereof.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO RATE LENDING UNLAWFUL. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that the introduction
of or any change in or in the interpretation of any law makes it unlawful, or
any central bank or other governmental authority asserts that it is unlawful,
for such Lender to make, continue or maintain any Loan as, or to convert any
Loan into, a LIBO Rate Loan of a certain type, the obligations of all Lenders
to make, continue, maintain or convert into any such Loans shall, upon such
determination, forthwith be suspended until such Lender shall notify the
Administrative Agent that the circumstances causing such suspension no longer
exist, and all LIBO Rate Loans of such type shall automatically convert into
Base Rate Loans at the end of the then current Interest Periods with respect
thereto or sooner, if required by such law or assertion.
<PAGE>
SECTION 4.2. DEPOSITS UNAVAILABLE. If the Administrative Agent shall
have determined that
(a) Dollar certificates of deposit or Dollar deposits, as the
case may be, in the relevant amount and for the relevant Interest Period
are not available to the Administrative Agent in its relevant; or
(b) by reason of circumstances affecting the Administrative
Agent's relevant market, adequate means do not exist for ascertaining the
interest rate applicable hereunder to LIBO Rate Loans of such type,
then, upon notice from the Administrative Agent to the Borrower and the
Lenders, the obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to
make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans
of such type shall forthwith be suspended until the Administrative Agent
shall notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 4.3. INCREASED LIBO RATE LOAN COSTS, ETC. The Borrower
agrees to reimburse each Lender for any increase in the cost to such Lender
of, or any reduction in the amount of any sum receivable by such Lender in
respect of, making, continuing or maintaining (or of its obligation to make,
continue or maintain) any Loans as, or of converting (or of its obligation to
convert) any Loans into, LIBO Rate Loans. Such Lender shall promptly notify
the Administrative Agent and the Borrower in writing of the occurrence of any
such event, such notice to state, in reasonable detail, the reasons therefor
and the additional amount required fully to compensate such Lender for such
increased cost or reduced amount. Such additional amounts shall be payable
by the Borrower directly to such Lender within five days of its receipt of
such notice, and such notice shall, in the absence of manifest error, be
conclusive and binding on the Borrower.
SECTION 4.4. FUNDING LOSSES. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to make, continue or maintain any portion of the principal amount of
any Loan as, or to convert any portion of the principal amount of any Loan
into, a LIBO Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loans on a date other than the scheduled last day
of the Interest Period applicable thereto, whether pursuant to SECTION
3.1 or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
<PAGE>
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/ Conversion Notice
therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to
the Administrative Agent), the Borrower shall, within five days of its
receipt thereof, pay directly to such Lender such amount as will (in the
reasonable determination of such Lender) reimburse such Lender for such loss
or expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
SECTION 4.5. INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank,
regulator or other governmental authority affects or would affect the amount
of capital required or expected to be maintained by any Lender or any Person
controlling such Lender, and such Lender determines (in its sole and absolute
discretion) that the rate of return on its or such controlling Person's
capital as a consequence of its Commitments, issuance of or participation in
Letters of Credit or the Loans made by such Lender is reduced to a level
below that which such Lender or such controlling Person could have achieved
but for the occurrence of any such circumstance, then, in any such case upon
notice from time to time by such Lender to the Borrower, the Borrower shall
immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate
of return. A statement of such Lender as to any such additional amount or
amounts (including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Borrower. In
determining such amount, such Lender may use any method of averaging and
attribution that it (in its sole and absolute discretion) shall deem
applicable. Each Lender hereby severally agrees that if such Lender (a
"SUBJECT LENDER") makes demand upon the Borrower for (or if the Borrower is
otherwise required to pay) amounts pursuant to this SECTION 4.5, the Borrower
may, within 90 days of receipt by the Borrower of such demand, give notice (a
"REPLACEMENT NOTICE") in writing to the Administrative Agent and such Subject
Lender of its intention to replace such Subject Lender with a financial
institution designated in such Replacement Notice. If the Administrative
Agent shall, in the exercise of its discretion and within 30 days of its
receipt of such Replacement Notice, notify the Borrower and such Subject
Lender in writing that the designated financial institution is reasonably
satisfactory to the Administrative Agent, then such Subject Lender shall, so
long as no Default or Event of Default shall have occurred and be continuing,
assign, in accordance with SECTION 11.11.1, all of its Commitments, Loans,
Notes and other rights and obligations under this Agreement and all other
Loan Documents to such designated financial institution; PROVIDED, HOWEVER,
that (i) such assignment shall be without recourse, representation or
warranty and shall be on terms and conditions reasonably satisfactory to such
Subject Lender and such designated financial institution and (ii) the
purchase price paid by such designated financial institution shall be in the
amount of such Subject Lender's Loans and its Percentage of outstanding
Reimbursement Obligations, together with all accrued and unpaid interest and
fees in respect thereof, plus all other amounts (including the amounts
demanded and unreimbursed under this SECTION 4.5),
<PAGE>
owing to such Subject Lender hereunder. Upon the effective date of such
assignment, the Borrower shall issue a replacement Note or Notes, as the case
may be, to such designated financial institution and such institution shall
become a "Lender" for all purposes under this Agreement and the other Loan
Documents.
SECTION 4.6. TAXES. All payments by the Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder (including
Reimbursement Obligations and fees) shall be made free and clear of and
without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges
of any nature whatsoever imposed by any taxing authority, but excluding
franchise taxes and taxes imposed on or measured by any Lender's net income
or receipts (such non-excluded items being called "TAXES"). In the event
that any withholding or deduction from any payment to be made by the Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative Agent
evidencing such payment to such authority; and
(c) pay to the Administrative Agent for the account of the
Lenders such additional amount or amounts as is necessary to ensure that
the net amount actually received by each Lender will equal the full
amount such Lender would have received had no such withholding or
deduction been required.
Moreover, if any Taxes are directly asserted against the Administrative Agent
or any Lender with respect to any payment received by the Administrative
Agent or such Lender hereunder, the Administrative Agent or such Lender may
pay such Taxes and the Borrower will promptly pay such additional amounts
(including any penalties, interest or expenses) as is necessary in order that
the net amount received by such person after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount such
person would have received had not such Taxes been asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Lenders for any
incremental Taxes, interest or penalties that may become payable by any
Lender as a result of any such failure.
Upon the request of the Borrower or the Administrative Agent, each Lender
that is organized under the laws of a jurisdiction other than the United States
shall, prior to the due date
<PAGE>
of any payments under the Notes, execute and deliver to the Borrower and the
Administrative Agent, on or about the first scheduled payment date in each
Fiscal Year, one or more (as the Borrower or the Administrative Agent may
reasonably request) United States Internal Revenue Service Forms 4224 or
Forms 1001 or such other forms or documents (or successor forms or
documents), appropriately completed, as may be applicable to establish the
extent, if any, to which a payment to such Lender is exempt from withholding
or deduction of Taxes. The Borrower shall not be obligated to pay Taxes to
the extent that (i) such Taxes are imposed as a result of the failure of a
Lender to submit the forms or documents referred to in the preceding
sentence, (ii) the information contained in such forms or documents is
materially inaccurate, or (iii) such forms or documents do not establish the
entitlement of the Lender to an exemption from U.S. federal withholding tax
on payments of interest hereunder other than as a result of a change in
applicable law, regulations or administrative practice effective after the
Effective Date.
SECTION 4.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by the Borrower pursuant to any Loan Document shall be
made by the Borrower to the Administrative Agent for the PRO RATA account of
the Lenders entitled to receive such payment. All such payments required to
be made to the Administrative Agent shall be made, without setoff, deduction
or counterclaim, not later than 11:00 a.m., New York, New York time, on the
date due, in same day or immediately available funds, to such account as the
Administrative Agent shall specify from time to time by notice to the
Borrower. Funds received after that time shall be deemed to have been
received by the Administrative Agent on the next succeeding Business Day.
The Administrative Agent shall promptly remit in same day funds to each
Lender its share, if any, of such payments received by the Administrative
Agent for the account of such Lender. All interest and fees shall be
computed on the basis of the actual number of days (including the first day
but excluding the last day) occurring during the period for which such
interest or fee is payable over a year comprised of 360 days (or, in the case
of interest on a Base Rate Loan (other than when calculated with respect to
the Federal Funds Rate), 365 days or, if appropriate, 366 days). Whenever
any payment to be made shall otherwise be due on a day which is not a
Business Day, such payment shall (except as otherwise required by CLAUSE (c)
of the definition of the term "INTEREST PERIOD" with respect to LIBO Rate
Loans) be made on the next succeeding Business Day and such extension of time
shall be included in computing interest and fees, if any, in connection with
such payment.
SECTION 4.8. SHARING OF PAYMENTS. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan or Reimbursement Obligation (other
than pursuant to the terms of SECTIONS 4.3, 4.4 and 4.5) or Letter of Credit in
excess of its PRO RATA share of payments then or therewith obtained by all
Lenders, such Lender shall purchase from the other Lenders such participations
in Credit Extensions made by them and/or Letters of Credit as shall be necessary
to cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; PROVIDED, HOWEVER, that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and each Lender which has sold a
participation to the purchasing Lender shall repay to the purchasing Lender the
purchase price to
<PAGE>
the ratable extent of such recovery together with an amount equal to such
selling Lender's ratable share (according to the proportion of
(a) the amount of such selling Lender's required repayment to the
purchasing Lender
TO
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights
of payment (including pursuant to SECTION 4.9) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section applies, such Lender shall,
to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lenders entitled under
this Section to share in the benefits of any recovery on such secured claim.
SECTION 4.9. SETOFF. Each Lender shall, upon the occurrence of any
Default described in CLAUSES (a) through (d) of SECTION 8.1.9 with respect to
the Borrower, and with the consent of the Required Lenders, upon the
occurrence of any other Event of Default, have the right to appropriate and
apply to the payment of the Obligations owing to it (whether or not then
due), and (as security for such Obligations) the Borrower hereby grants to
each Lender a continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of the Borrower then or thereafter maintained
with or otherwise held by such Lender; PROVIDED, HOWEVER, that any such
appropriation and application shall be subject to the provisions of SECTION
4.8. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such
Lender; PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such setoff and application. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff under applicable law or otherwise) which
such Lender may have.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. EFFECTIVENESS: INITIAL LOANS HEREUNDER. The obligations of
(i) the Existing Lenders to continue the Existing Revolving Loans as Revolving
Loans under this Agreement and (ii) the Lenders (or any issuer) to make the
initial Credit Extensions hereunder
<PAGE>
shall be subject to the prior or concurrent satisfaction of each of the
conditions precedent set forth in this SECTION 5.1.
SECTION 5.1.1. RESOLUTIONS, ETC. The Administrative Agent shall have
received from each Obligor a certificate, dated the Closing Date, of its
Secretary or Assistant Secretary as to
(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of each Loan
Document to be executed by it; and
(b) the incumbency and signatures of those of its officers
authorized to act on its behalf with respect to each Loan Document
executed by it,
upon which certificate each Agent, each Lender may conclusively rely until it
shall have received a further certificate of the Secretary or Assistant
Secretary of an Obligor canceling or amending such prior certificate with
respect to such Obligor.
SECTION 5.1.2. DELIVERY OF NOTES. The Administrative Agent shall
have received, for the account of each Lender, its Notes, issued (in the case
of Existing Lenders) in substitution or exchange for, and not in satisfaction
of, the Notes delivered under the terms of the Existing Credit Agreement,
duly executed and delivered by the Borrower.
SECTION 5.1.3. THE TRANSACTION. (a) The Agents shall have received
evidence satisfactory to each of them that (i) the Transaction has been
consummated on terms satisfactory to the Agents and (ii) the Transaction
related fees did not exceed the Transaction Fee Amount.
(b) Each Lender shall be satisfied with the final structure of the
Transaction and the terms and provisions of all documents, agreements and
contracts related to the Equity Issuance, and any and all material
amendments, waivers or other modifications of, or other forbearance to
exercise any rights with respect to, any of the terms or provisions of any
such documents, agreements or contracts.
SECTION 5.1.4. CLOSING DATE CERTIFICATE. The Agents shall have
received, with counterparts for each Lender, the Closing Date Certificate,
substantially in the form of EXHIBIT E hereto, dated the Closing Date and
duly executed and delivered by an Authorized Officer of Aegis and the
Borrower, in which certificate Aegis and the Borrower shall agree and
acknowledge that the statements made therein shall be deemed to be true and
correct representations and warranties of Aegis and the Borrower made as of
such date under this Agreement, and, at the time such certificate is
delivered, such statements shall in fact be true and correct.
SECTION 5.1.5. AFFIRMATION AND CONSENT. The Agents shall have received
an affirmation and consent in form set forth as EXHIBIT G hereto executed and
delivered by an
<PAGE>
Authorized Officer of each Obligor (other than the Borrower) under the
Existing Credit Agreement and related Loan Documents.
SECTION 5.1.6. PAYMENT OF OUTSTANDING LOANS, ETC. All Existing Term
Loans and no less than $3,000,000 of the Existing Revolving Loans, together
with all interest, all prepayment premiums in accordance with SECTION 4.4 and
other amounts due and payable with respect thereto, shall have been paid in
full from proceeds of the Equity Issuance.
SECTION 5.1.7. OPINIONS OF COUNSEL. The Agents shall have received
(i) an opinion, dated the Closing Date and addressed to the Administrative
Agent, the Syndication Agent and each of the Lenders, from Paul, Hastings,
Janofsky & Walker LLP, counsel to the Obligors, substantially in the form of
EXHIBIT L-1 hereto and (ii) an opinion, dated the Closing Date and addressed
to the Administrative Agent, the Syndication Agent and each of the Lenders,
from Hughes & Luce, L.L.P., counsel to Aegis, substantially in the form of
EXHIBIT L-2 hereto.
SECTION 5.1.8. CLOSING FEES, EXPENSES, ETC. The Administrative Agent
shall have received (a) for its own account, or for the account of each
Lender, as the case may be, all fees, costs and expenses due and payable
pursuant to SECTIONS 3.3 and 11.3, if then invoiced and any Commitment Fees
accrued and not paid at such time and (b) the Fee Letter, duly executed and
delivered by an Authorized Officer of the Borrower.
SECTION 5.1.9. BORROWING BASE CERTIFICATE. The Agents shall have
received an initial Borrowing Base Certificate, executed and delivered by an
Authorized Officer of Advanced and the Borrower, as of October 31, 1999.
SECTION 5.2. ALL CREDIT EXTENSIONS. The obligation of each Lender to
make any Credit Extension shall be subject to the satisfaction of each of the
conditions precedent set forth in this SECTION 5.2.
SECTION 5.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both
before and after giving effect to any Credit Extension the following
statements shall be true and correct:
(a) the representations and warranties set forth in ARTICLE VI and
in each other Loan Document shall be true and correct with the same
effect as if then made (unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date);
(b) except as set forth in Item 6.7 of the Disclosure Schedule, no
material adverse development shall have occurred in any litigation,
action, proceeding, labor controversy, arbitration or governmental
investigation disclosed pursuant to SECTION 6.7;
(c) the sum of the aggregate outstanding principal amount of all
Revolving Loans and Swing Line Loans does not exceed the then Existing
Borrowing Base Amount;
<PAGE>
(d) the sum of the aggregate outstanding principal amount of all
Revolving Loans and Swing Line Loans does not exceed the Revolving Loan
Commitment Amount; and
(e) no Default hereunder (and on the Effective Date, no Default
under (and as defined in) the Existing Credit Agreement) shall have then
occurred and be continuing, and neither Aegis, the Borrower, any other
Obligor, nor any of their respective Subsidiaries shall be in material
violation of any law or governmental regulation or court order or decree.
SECTION 5.2.2. CREDIT EXTENSION REQUEST. The Administrative Agent
shall have received a Borrowing Request or Issuance Request, as the case may
be, for each Credit Extension (other than Swing Line Loans). Each of the
delivery of a Credit Extension Request and the acceptance by the Borrower of
the proceeds of the Credit Extension shall constitute a representation and
warranty by the Borrower that on the date of such Credit Extension (both
immediately before and after giving effect to such Credit Extension and the
application of the proceeds thereof), the statements made in SECTION 5.2.1
are true and correct.
SECTION 5.2.3. SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on behalf of any Obligor shall be
satisfactory in form and substance to the Administrative Agent and its
counsel (it being understood that documents which are satisfactory in form
and substance to the Administrative Agent on the date delivered shall not be
deemed unsatisfactory on a date thereafter); the Administrative Agent and its
counsel shall have received all information, approvals, opinions, documents
or instruments as the Administrative Agent or its counsel may reasonably
request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuer and the Administrative Agent
to enter into this Agreement, continue the Existing Revolving Loans as Revolving
Loans hereunder and to make Credit Extensions hereunder, Aegis and the Borrower
each represents and warrants unto the Administrative Agent, the Issuer and each
Lender as set forth in this ARTICLE VI.
SECTION 6.1. ORGANIZATION, ETC. Each Obligor and each their respective
Subsidiaries is a corporation validly organized and Existing and in good
standing under the laws of the State of its incorporation, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction where the nature of its business requires such qualification
(except where the failure to be so qualified would not have a material adverse
effect on its business), and has full power and authority and holds all
requisite governmental licenses, permits and other approvals to enter into and
perform (a) the Transaction, and (b) its Obligations under
<PAGE>
this Agreement, the Notes and each other Loan Document to which it is a party
and to own and hold under lease its property and to conduct its business
substantially as currently conducted by it.
SECTION 6.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The
execution, delivery and performance by the Borrower of this Agreement, the
Notes and each other Loan Document executed or to be executed by it, and the
execution, delivery and performance by each other Obligor of each Loan
Document executed or to be executed by it, and the Borrower's, and each such
other Obligor's participation in the consummation of the Transaction, are
within each such Obligor's corporate powers, have been duly authorized by all
necessary corporate action, and do not
(a) contravene such Obligor's Organic Documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting such Obligor;
or
(c) result in, or require the creation or imposition of, any Lien
on any of such Obligor's properties (other than pursuant to a Loan
Document).
SECTION 6.3. GOVERNMENT APPROVAL, REGULATION, ETC. No authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other Person is required for the
due execution, delivery or performance by any Obligor of this Agreement, the
Notes or any other Loan Document to which such Obligor is a party, or for
such Obligor's participation in the consummation of the Transaction, except
for (a) those that have already been, or prior to the initial Credit
Extension shall have been, duly obtained or made and are, or as of the
Closing Date shall be, as the case may be, in full force and effect, (b)
those relating to filings and recordings required to perfect or maintain
perfection of the Liens granted pursuant to the Loan Documents and (c) such
filings, recordings, approvals and other actions, including, without
limitation, registrations and other actions under applicable securities laws
and regulations, as may be required for the exercise by the Administrative
Agent, the Issuer or any of the Lenders of their remedies under the Loan
Documents and realization of the benefits of the collateral granted
thereunder. No Obligor nor any of their respective Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 6.4. VALIDITY, ETC. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligations of
the Borrower enforceable against the Borrower in accordance with their
respective terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium or similar laws affecting creditors'
<PAGE>
rights generally and to general principles of equity); and each Loan Document
executed pursuant hereto by each Obligor will, on the due execution and
delivery thereof by such Obligor, be the legal, valid and binding obligation
of such Obligor enforceable against such Obligor in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or similar laws affecting creditors' rights
generally and to general principles of equity).
SECTION 6.5. FINANCIAL INFORMATION. All financial statements
furnished to the Administrative Agent and the Lenders, including those
delivered pursuant to CLAUSE (b) of SECTION 7.1.1, have been prepared in
accordance with GAAP consistently applied, and present fairly the
consolidated financial condition (or, if applicable, the PRO FORMA
consolidated financial condition) of the corporations covered thereby as at
the dates thereof and the results of their operations for the periods then
ended.
SECTION 6.6. NO MATERIAL ADVERSE CHANGE. Since the date of the last
audited financial statements described in SECTION 6.5, there has been no
material adverse change in the financial condition, operations, assets,
business, properties or prospects of (i) the Borrower and its Subsidiaries or
(ii) Aegis and its Subsidiaries, except as disclosed in Item 6.6 ("Material
Adverse Change") of the Disclosure Schedule.
SECTION 6.7. LITIGATION, LABOR CONTROVERSIES, ETC. There is no
pending or, to the knowledge of Aegis or the Borrower, threatened litigation,
action, proceeding, or labor controversy affecting Aegis, the Borrower or any
of their respective Subsidiaries, or any of their respective properties,
businesses, assets or revenues, which may materially adversely affect the
financial condition, operations, assets, business, properties or prospects of
Aegis, the Borrower or any of their respective Subsidiaries or which purports
to affect the legality, validity or enforceability of this Agreement, the
Notes or any other Loan Document, except as disclosed in ITEM 6.7
("Litigation") of the Disclosure Schedule.
SECTION 6.8. SUBSIDIARIES. Aegis does not have any Subsidiaries,
except (after giving effect to the Transaction) those Subsidiaries
(a) which are identified in ITEM 6.8 ("Existing Subsidiaries") of
the Disclosure Schedule; or
(b) which are permitted to have been acquired in accordance with
SECTION 7.2.5 or 7.2.9.
SECTION 6.9. OWNERSHIP OF PROPERTIES. Aegis, the Borrower and each
of their respective Subsidiaries owns good and marketable title to all of its
properties and assets, real and personal, tangible and intangible, of any
nature whatsoever (including patents, trademarks, trade names, service marks
and copyrights), free and clear of all Liens, charges or claims (including
<PAGE>
infringement claims with respect to patents, trademarks, copyrights and the
like) except as permitted pursuant to SECTION 7.2.3.
SECTION 6.10. TAXES. Aegis, the Borrower and each of their Subsidiaries
has filed all tax returns and reports required by law to have been filed by it
and has paid all taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
SECTION 6.11. PENSION AND WELFARE PLANS. During the
twelve-consecutive-month period prior to the date of the execution and
delivery of the Existing Credit Agreement and prior to the date of any Credit
Extension hereunder, no steps have been taken to terminate any Pension Plan,
and no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which might result in the incurrence by Aegis or the Borrower or
any member of the Controlled Group of any material liability, fine or
penalty. Except as disclosed in ITEM 6.11 ("Employee Benefit Plans") of the
Disclosure Schedule, neither Aegis, the Borrower nor any member of the
Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
SECTION 6.12. ENVIRONMENTAL WARRANTIES. Except as set forth in ITEM
6.12 ("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by Aegis, the Borrower or any of their
Subsidiaries have been, and continue to be, owned or leased by Aegis, the
Borrower and their Subsidiaries in material compliance with all
Environmental Laws;
(b) there have been no past, and there are no pending or, to
Aegis's or the Borrower's knowledge, threatened
(i) claims, complaints, notices or requests for
information received by Aegis, the Borrower or any of their
Subsidiaries with respect to any alleged violation of any
Environmental Law, or
(ii) complaints, notices or inquiries to Aegis, the
Borrower or any of their Subsidiaries regarding potential
liability under any Environmental Law;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by Aegis, the
Borrower or any of their Subsidiaries that, singly or in the aggregate,
have, or may reasonably be expected to have, a material adverse effect on
the financial condition, operations, assets, business, properties or
prospects of Aegis, the Borrower and their Subsidiaries;
<PAGE>
(d) Aegis, the Borrower and their Subsidiaries have been issued
and are in material compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters and
necessary or desirable for their businesses;
(e) no property now or previously owned or leased by Aegis, the
Borrower or any of their Subsidiaries is listed or proposed for listing
(with respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list of sites
requiring investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Aegis, the Borrower or any of their
Subsidiaries that, singly or in the aggregate, have, or may reasonably be
expected to have, a material adverse effect on the financial condition,
operations, assets, business, properties or prospects of Aegis, the
Borrower and their Subsidiaries;
(g) neither Aegis, Borrower nor any of their Subsidiaries has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list or which is the subject of federal,
state or local enforcement actions or other investigations which may lead
to material claims against Aegis, the Borrower or such Subsidiary thereof
for any remedial work, damage to natural resources or personal injury,
including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by Aegis, the
Borrower or any of their Subsidiaries of the Borrower that, singly or in
the aggregate, have, or may reasonably be expected to have, a material
adverse effect on the financial condition, operations, assets, business,
properties or prospects of Aegis, the Borrower and their Subsidiaries;
and
(i) to Aegis's or the Borrower's knowledge, no conditions exist
at, on or under any property now or previously owned or leased by Aegis
or the Borrower which, with the passage of time, or the giving of notice
or both, would give rise to liability under any Environmental Law.
SECTION 6.13. REGULATIONS U AND X. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Credit Extensions will be used to purchase or
carry margin stock or for a purpose which violates, or would be inconsistent
with, F.R.S. Board Regulation U or X. Terms for which meanings are provided in
F.R.S. Board Regulation U or X or any regulations substituted therefor, as from
time to time in effect, are used in this Section with such meanings.
<PAGE>
SECTION 6.14. ACCURACY OF INFORMATION. All factual information
heretofore or contemporaneously furnished by or on behalf of any Obligor in
writing to the Agents or the Issuer or any Lender (including all information
contained in the Loan Documents) for purposes of or in connection with the
Existing Credit Agreement, this Agreement or any transaction contemplated hereby
(including the Transaction) is, and all other such factual information hereafter
furnished by or on behalf of such Obligor to the Agents or the Issuer or any
Lender will be, true and accurate in every material respect on the date as of
which such information is dated or certified and, with respect to that
information delivered in connection with this Agreement, as of the date of
execution and delivery of this Agreement by each Agent and such Lender, such
information is not, or shall not be, as the case may be, incomplete by omitting
to state any material fact necessary to make the content of such information, in
light of the circumstances in which it was provided, not misleading.
SECTION 6.15. SENIORITY OF OBLIGATIONS, ETC. The subordination
provisions of each Subordinated Debt Document set forth therein will be
enforceable against the holder thereof by the holder of any "Senior
Indebtedness", or similar term referring to the Obligations, as applicable in
each such Subordinated Debt Document, which has not effectively waived the
benefits thereof. All monetary Obligations, including those to pay principal of
and interest (including post-petition interest, whether or not permitted as a
claim) on the Loans, and fees and expenses in connection therewith, constitute
"Senior Indebtedness", or similar term referring to the Obligations, in each
such Subordinated Debt Document, and all such Obligations are entitled to the
benefits of the subordination created by such. The Borrower acknowledges that
each Agent and each Lender is entering into this Agreement, and is extending its
Commitments, in reliance upon the subordination provisions of the Subordinated
Debt Documents and this Section.
SECTION 6.16. YEAR 2000. Each Obligor has reviewed the areas within
its business and operations which could be adversely affected by, and has
developed or is developing a program to address on a timely basis, the "Year
2000 Problem" (that is, the risk that computer applications used by such
Obligor may be unable to recognize and properly perform date-sensitive
functions involving certain dates prior to and any date after December 31,
1999). Based on such review and program, the Year 2000 Problem could not
reasonably be expected to have a material adverse effect on the financial
condition, operations, assets, business, properties or prospects of Aegis,
the Borrower and their Subsidiaries.
ARTICLE VII
COVENANTS
SECTION 7.1. AFFIRMATIVE COVENANTS. Each of Aegis and the Borrower
agrees with each of the Lenders, and the Agents that, until all Commitments have
terminated and all Obligations have been paid and performed in full, the
Borrower and Aegis will perform or Aegis will cause the Borrower to perform the
obligations set forth in this SECTION 7.1.
<PAGE>
SECTION 7.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The
Borrower will furnish, or will cause to be furnished, to each Lender, the Issuer
and the Administrative Agent copies of the following financial statements,
reports, notices and information:
(a) as soon as available and in any event within 45 days after
the end of each Fiscal Quarter of each Fiscal Year of Aegis (other than
the fourth Fiscal Quarter), consolidated and consolidating balance sheets
of Aegis and its Subsidiaries as of the end of such Fiscal Quarter and
consolidated and consolidating statements of earnings and cash flow of
Aegis and its Subsidiaries for such Fiscal Quarter and for the period
commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Quarter, certified by the chief financial or accounting
Authorized Officer of Aegis;
(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year of Aegis, a copy of the annual audit report
for such Fiscal Year for Aegis and its Subsidiaries, including therein
consolidated and consolidating balance sheets of Aegis and its
Subsidiaries as of the end of such Fiscal Year and consolidated and
consolidating statements of earnings and cash flow of Aegis and its
Subsidiaries for such Fiscal Year, in each case certified (without any
Impermissible Qualification) in a manner acceptable to the Administrative
Agent and the Required Lenders by PricewaterhouseCoopers LLP or other
independent public accountants acceptable to the Administrative Agent and
the Required Lenders, together with a report from such accountants
containing a computation of, and showing compliance with, each of the
financial ratios and restrictions contained in SECTION 7.2.4 and to the
effect that, in making the examination necessary for the signing of such
annual report by such accountants, they have not become aware of any
Default that has occurred and is continuing, or, if they have become
aware of such Default, describing such Default and the steps, if any,
being taken to cure it;
(c) together with the delivery of the financial information
required pursuant to CLAUSES (a) and (b) above, a Compliance Certificate
executed by the chief financial or accounting Authorized Officer of Aegis
and the Borrower, showing (in reasonable detail and with appropriate
calculations and computations in all respects satisfactory to the
Administrative Agent) compliance with the financial covenants set forth
in SECTION 7.2.4;
(d) within 15 days after the end of each calendar month, a
Borrowing Base Certificate for such calendar month that is calculated as
of the last day of such calendar month;
(e) promptly when available and in any event within 30 days
following the last day of each Fiscal Year of Aegis, financial
projections for Aegis and its Subsidiaries the next Fiscal Year, prepared
in reasonable detail by the chief accounting, financial or executive
Authorized Officer of Aegis;
(f) as soon as possible and in any event within three days after
the occurrence of each Default, a statement of the chief financial or
accounting Authorized Officer of the
<PAGE>
Borrower setting forth details of such Default and the action which the
Borrower has taken and proposes to take with respect thereto;
(g) as soon as possible and in any event within three days after
(x) the occurrence of any material and adverse development with respect
to any litigation, action, proceeding, or labor controversy described in
SECTION 6.7 or (y) the commencement of any labor controversy, litigation,
action, proceeding of the type described in SECTION 6.7, notice thereof
and copies of all documentation relating thereto;
(h) promptly after the sending or filing thereof, copies of all
reports which Aegis or the Borrower sends to its security holders;
(i) immediately upon becoming aware of the institution of any
steps by Aegis or the Borrower or any other Person to terminate any
Pension Plan, or the failure to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a Lien under
section 302(f) of ERISA, or the taking of any action with respect to a
Pension Plan which could result in the requirement that Aegis or the
Borrower furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan
which could result in the incurrence by Aegis or the Borrower of any
material liability, fine or penalty, or any material increase in the
contingent liability of Aegis or the Borrower with respect to any
post-retirement Welfare Plan benefit, notice thereof and copies of all
documentation relating thereto;
(j) promptly following the delivery and receipt, as the case may
be, of any material notice or communication pursuant to any Subordinated
Debt Document, a copy of such communication; and
(k) such other information respecting the condition or
operations, financial or otherwise, of Aegis, the Borrower or any of
their Subsidiaries as any Lender through the Administrative Agent may
from time to time reasonably request.
SECTION 7.1.2. COMPLIANCE WITH LAWS, ETC. Each of Aegis and the
Borrower will, and will cause each of their respective Subsidiaries to, comply
in all material respects with all applicable laws, rules, regulations and
orders, such compliance to include (without limitation):
(a) the maintenance and preservation of its corporate existence
and qualification as a foreign corporation; and
(b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
<PAGE>
SECTION 7.1.3. MAINTENANCE OF PROPERTIES. Each of Aegis and the
Borrower will, and will cause each of their respective Subsidiaries to,
maintain, preserve, protect and keep its properties in good repair, working
order and condition, and make necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times unless either Aegis or the Borrower, as
appropriate, determines in good faith that the continued maintenance of any of
its properties is no longer economically desirable.
SECTION 7.1.4. INSURANCE. Each of Aegis and the Borrower will, and will
cause each of their respective Subsidiaries to, maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
properties and business (including business interruption insurance) against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and will, upon request of the
Administrative Agent, furnish to each Lender and the Issuer at reasonable
intervals a certificate of an Authorized Officer of each of Aegis and the
Borrower setting forth the nature and extent of all insurance maintained by
Aegis, the Borrower and their respective Subsidiaries in accordance with this
Section.
SECTION 7.1.5. BOOKS AND RECORDS. Each of Aegis and the Borrower will,
and will cause each of their respective Subsidiaries to, keep books and records
which accurately reflect all of its business affairs and transactions and permit
each Agent and each Lender or any of their respective representatives, at
reasonable times and intervals, to visit all of its offices, to discuss its
financial matters with its officers and independent public accountant (and each
of Aegis and the Borrower hereby authorizes such independent public accountant
to discuss such Person's financial matters with each Lender, the Issuer or any
of their respective representatives whether or not any representative of Aegis
or the Borrower is present) and to examine (and, at the expense of either Aegis
or the Borrower, photocopy extracts from) any of its books or other corporate
records. Either Aegis or the Borrower, as appropriate, shall pay any fees of
such independent public accountant incurred in connection with any Agent's, the
Issuer's or any Lender's exercise of its rights pursuant to this Section.
SECTION 7.1.6. ENVIRONMENTAL COVENANT. Each of Aegis and the Borrower
will, and will cause each of their respective Subsidiaries to,
(a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) promptly notify the Administrative Agent and provide copies
upon receipt of all written claims, complaints, notices or inquiries
relating to the condition of its facilities and properties or compliance
with Environmental Laws; and
<PAGE>
(c) provide such information and certifications which the
Administrative Agent may reasonably request from time to time to evidence
compliance with this SECTION 7.1.6.
SECTION 7.1.7. FUTURE SUBSIDIARIES. After the Effective Date, upon any
Person becoming a direct or indirect Subsidiary of Aegis, or upon Aegis, the
Borrower or any of their respective Subsidiaries acquiring additional Capital
Stock of any existing Subsidiary of Aegis, the Borrower or any of their
respective Subsidiaries, Aegis or the Borrower, as the case may be, shall notify
the Administrative Agent of such acquisition, and
(a) in the case of U.S. Subsidiaries, either Aegis or the
Borrower, as appropriate, shall promptly cause such Subsidiary to execute
and deliver to the Administrative Agent, with counterparts for each
Lender, a supplement to the Subsidiary Guaranty and a supplement to the
Subsidiary Security Agreement (and, if such Subsidiary owns any real
property, a Mortgage), together with acknowledgment copies of Uniform
Commercial Code financing statements (form UCC-1) executed and delivered
by the Subsidiary naming the Subsidiary as the debtor and the
Administrative Agent as the secured party, or other similar instruments
or documents, filed under the Uniform Commercial Code and any other
applicable recording statutes, in the case of real property, of all
jurisdictions as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the security interest of the
Administrative Agent pursuant to the Subsidiary Security Agreement or a
Mortgage, as the case may be; and
(b) either Aegis or the Borrower, as appropriate, shall promptly
deliver, or cause to be delivered, to the Administrative Agent under a
Pledge Agreement (or a supplement thereto) certificates (if any)
representing all of the issued and outstanding shares of Capital Stock of
such Subsidiary owned by Aegis or the Borrower or any other Subsidiary of
Aegis or the Borrower, as the case may be, along with undated stock
powers for such certificates, executed in blank, or, if any securities
subject thereto are uncertificated securities, confirmation and evidence
satisfactory to the Administrative Agent that appropriate book entries
have been made in the relevant books or records of a financial
intermediary or the issuer of such securities, as the case may be, under
applicable law resulting in the perfection of the security interest
granted in favor of the Administrative Agent pursuant to the terms of a
Pledge Agreement;
together, in each case, with such opinions, in form and substance and from
counsel satisfactory to the Administrative Agent, as the Administrative Agent
may reasonably require; PROVIDED, that notwithstanding the foregoing, no
Non-U.S. Subsidiary shall be required to execute and deliver a Mortgage, a
supplement to the Subsidiary Guaranty or a supplement to the Subsidiary Security
Agreement, nor will Aegis, the Borrower or any of their respective Subsidiaries
be required to deliver in pledge pursuant to a Pledge Agreement in excess of 65%
of the total combined voting power of all classes of Capital Stock of a Non-U.S.
Subsidiary entitled to vote, if Aegis or the Borrower, as the case may be, has
delivered evidence satisfactory to the Administrative Agent that such actions
would result in material adverse tax consequences to Aegis, the Borrower and
their respective Subsidiaries (after giving effect to the utilization of any
available tax credits).
<PAGE>
SECTION 7.1.8. FUTURE LEASED PROPERTY AND FUTURE ACQUISITIONS OF REAL
PROPERTY. (a) Prior to entering into any new lease of real property or
renewing any existing lease of real property, each of Aegis and the Borrower
shall, and shall cause each of their respective Subsidiaries to, use its (and
their) best efforts (which shall not require the expenditure of cash or the
making of any material concessions under the relevant lease) to deliver to the
Administrative Agent a Waiver executed by the lessor of any real property that
is to be leased by Aegis, the Borrower or such Subsidiary for a term in excess
of one year in any state which by statute grants such lessor a "landlord's" (or
similar) Lien which is superior to the Administrative Agent's, to the extent the
value of any personal property of Aegis, the Borrower or their respective
Subsidiaries to be held at such leased property exceeds (or it is anticipated
that the value of such personal property will, at any point in time during the
term of such leasehold term, exceed) $500,000.
(b) In the event that Aegis, the Borrower or any of their respective
Subsidiaries shall acquire any real property having a value as determined in
good faith by the Administrative Agent in excess of $500,000, Aegis, the
Borrower or the applicable Subsidiary shall, promptly after such acquisition,
execute a Mortgage and provide the Administrative Agent with
(i) evidence of the completion (or satisfactory arrangements for
the completion) of all recordings and filings of such Mortgage as may be
necessary or, in the reasonable opinion of the Administrative Agent,
desirable effectively to create a valid, perfected first priority Lien,
subject to Liens permitted by SECTION 7.2.3, against the properties
purported to be covered thereby;
(ii) mortgagee's title insurance policies in favor of the
Administrative Agent and the Lenders in amounts and in form and substance
and issued by insurers, reasonably satisfactory to the Administrative
Agent, with respect to the property purported to be covered by such
Mortgage, insuring that title to such property is marketable and that the
interests created by the Mortgage constitute valid first Liens thereon
free and clear of all defects and encumbrances other than as approved by
the Administrative Agent, and such policies shall also include a
revolving credit endorsement and such other endorsements as the
Administrative Agent shall request and shall be accompanied by evidence
of the payment in full of all premiums thereon; and
(iii) such other approvals, opinions, or documents as the
Administrative Agent may reasonably request.
SECTION 7.1.9. USE OF PROCEEDS, ETC. The Borrower shall apply the
proceeds of the Revolving Loans made on and following the Effective Date (a) for
the general corporate and working capital needs of the Borrower and the
Subsidiary Guarantors, (b) to make Permitted Acquisitions, (c) to make
Restricted Payments in accordance with SECTION 7.2.6 and (d) to pay the
transaction fees, costs and expenses associated with Permitted Acquisitions.
<PAGE>
SECTION 7.1.10. RATE PROTECTION AGREEMENTS. The Borrower shall purchase
and maintain an interest rate swap, cap, collar or similar arrangement, on such
terms and in a notional amount as may be mutually satisfactory to the Borrower
and the Administrative Agent.
SECTION 7.2. NEGATIVE COVENANTS. Each of Aegis and the Borrower agrees
with the Administrative Agent, and each Lender that, until all Commitments have
terminated and all Obligations have been paid and performed in full, each of
Aegis and the Borrower will perform the obligations set forth in this
SECTION 7.2.
SECTION 7.2.1. BUSINESS ACTIVITIES. Neither Aegis nor the Borrower
will, nor will either permit any of their respective Subsidiaries to, engage in
any business activity, except providing telemarketing services and market
research services and such activities as may be incidental or related thereto.
SECTION 7.2.2. INDEBTEDNESS. Neither Aegis nor the Borrower will, nor
will either permit any of their respective Subsidiaries to, create, incur,
assume or suffer to exist or otherwise become or be liable in respect of any
Indebtedness, other than, without duplication, the following:
(a) Indebtedness in respect of the Credit Extensions and other
Obligations;
(b) [INTENTIONALLY OMITTED];
(c) [INTENTIONALLY OMITTED];
(d) Indebtedness in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding which is incurred by Aegis, the
Borrower or any of their respective Subsidiaries to a vendor of any
assets permitted to be acquired pursuant to SECTION 7.2.7 to finance its
acquisition of such assets;
(e) unsecured Indebtedness incurred in the ordinary course of
business, including current payables and accruals (including open
accounts extended by suppliers on normal trade terms in connection with
purchases of goods and services, but excluding Indebtedness incurred
through the borrowing of money or Contingent Liabilities);
(f) Indebtedness in respect of Capitalized Lease Liabilities to
the extent permitted by SECTION 7.2.7;
(g) Indebtedness of Aegis, and any Subsidiary Guarantor related
to or resulting from any loan or advance from, or any non-equity
investment by, the Borrower, which Indebtedness shall be evidenced by one
or more promissory notes in form and substance satisfactory to the
Administrative Agent which have been duly executed, delivered and
endorsed to the order of the Administrative Agent in pledge pursuant to a
Pledge Agreement;
<PAGE>
(h) other Indebtedness of Aegis, the Borrower and their
respective Subsidiaries in an aggregate amount not to exceed $1,000,000;
(i) the Thayer Sub Debt; and
(j) Indebtedness evidenced by the Seller Subordinated Notes;
PROVIDED, HOWEVER, that no Indebtedness otherwise permitted by CLAUSES (d), (f),
(g) or (h) shall be permitted if, after giving effect to the incurrence thereof,
any Default shall have occurred and be continuing.
SECTION 7.2.3. LIENS. Neither Aegis nor the Borrower will, nor will
either permit any of its Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon any of its property, revenues or assets, whether now owned
or hereafter acquired, except:
(a) Liens securing payment of the Obligations, granted pursuant
to any Loan Document;
(b) [INTENTIONALLY OMITTED];
(c) [INTENTIONALLY OMITTED];
(d) Liens granted to secure payment of Indebtedness of the type
permitted and described in CLAUSES (d) and (f) of SECTION 7.2.2 and
covering only those assets acquired with the proceeds of such
Indebtedness;
(e) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty
or being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP shall have been
set aside on its books;
(f) Liens of carriers, warehousemen, mechanics, materialmen and
landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books;
(g) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
<PAGE>
(h) judgment Liens in existence less than 15 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies or for which an
appeal is pending; and
(i) Liens upon tangible property acquired after the Effective Date
by Aegis, the Borrower or any of their respective Subsidiaries, which
Liens existed on such property before the time of its acquisition and was
not created in anticipation thereof and which may secure payment of
Indebtedness of the type permitted and described in CLAUSES (d) and (h)
of SECTION 7.2.2.
SECTION 7.2.4. FINANCIAL CONDITION.
(a) DEBT TO EBITDA RATIO. Aegis will not permit the Debt to
EBITDA Ratio as of the end of any Fiscal Quarter occurring during any
period set forth below to be greater than the ratio set forth opposite
such period:
<TABLE>
<CAPTION>
Debt to
Period EBITDA Ratio
------ ------------
<S> <C>
01/01/00 through 12/31/00 2.75: 1.00
01/01/01 through 03/31/01 2.50: 1.00
04/01/01 through 06/30/01 2.25: 1.00
07/01/01 and thereafter 2.00: 1.00
</TABLE>
(b) INTEREST COVERAGE RATIO. Aegis will not permit the Interest
Coverage Ratio as of the end of any Fiscal Quarter occurring during any
period set forth below to be less than the ratio set forth opposite such
period:
<TABLE>
<CAPTION>
Interest
Period Coverage Ratio
------ --------------
<S> <C>
01/01/00 through 03/31/00 3.75: 1.00
04/01/00 through 06/30/00 4.00: 1.00
07/01/00 through 09/30/00 4.25: 1.00
10/01/00 and thereafter 4.50: 1.00
</TABLE>
SECTION 7.2.5. INVESTMENTS. Neither Aegis nor the Borrower will, nor
will either permit any of their respective Subsidiaries to, make, incur, assume
or suffer to exist any Investment in any other Person, except:
(a) [INTENTIONALLY OMITTED];
(b) Cash Equivalent Investments;
<PAGE>
(c) Investments (i) not made with proceeds of Questor
Contributions for Permitted Acquisitions in an aggregate amount not
exceeding $10,000,000 at any time during the term of this Agreement;
PROVIDED, that the maximum aggregate amount of such Investments in
Permitted Acquisitions in any Fiscal Year shall not exceed $5,000,000,
and in any other case, in amounts and on terms in form and substance
satisfactory to the Agents and (ii) made with proceeds of Questor
Contributions;
(d) without duplication, Investments permitted as Indebtedness
pursuant to SECTION 7.2.2;
(e) without duplication, Investments permitted as Capital
Expenditures pursuant to SECTION 7.2.7;
(f) Investments by any Exempt Entity in any other Exempt Entity;
and
(g) other Investments in an aggregate amount at any one time not
to exceed $1,000,000;
PROVIDED, HOWEVER, that
(h) any Investment which when made complies with the requirements
of the definition of the term "CASH EQUIVALENT INVESTMENT" may continue
to be held notwithstanding that such Investment if made thereafter would
not comply with such requirements; and
(i) no Investment otherwise permitted by CLAUSES (c), (e), or (g)
shall be permitted to be made if, immediately before or after giving
effect thereto, any Default shall have occurred and be continuing or if
the Borrower or Aegis shall fail to have delivered to the Administrative
Agent a Compliance Certificate for the period of four full Fiscal
Quarters immediately preceding such Investment (prepared in good faith
and in a manner and using such methodology which is consistent with the
most recent financial statements delivered pursuant to SECTION 7.1.1)
giving PRO FORMA effect to the consummation of such Investment and
evidencing compliance with the covenants set forth in SECTION 7.2.4.
SECTION 7.2.6. RESTRICTED PAYMENTS, ETC. Neither Aegis nor the Borrower
will, and nor will they permit any of their respective Subsidiaries to, declare
or make a Restricted Payment, or make any deposit for any Restricted Payment,
other than Restricted Payments made by Subsidiaries to the Borrower or wholly
owned Subsidiaries other than:
(a) interest in respect of the Seller Subordinated Notes shall be
permitted to be paid in accordance with the terms thereof to the extent,
but only to the extent, that both immediately before and after giving
effect to each such interest payment no Default has occurred and is
continuing or would occur;
<PAGE>
(b) the Borrower and Aegis may prepay the Thayer Sub Debt and
redeem Aegis' preferred stock owned by any of the Thayer Group so long as
(i) no Default has occurred and is continuing or would occur as a result
thereof, (ii) the Borrower demonstrates compliance with SECTION 7.2.4 on
a PRO FORMA basis after giving effect to the proposed payment, for the
two immediately preceding full Fiscal Quarters for which a Compliance
Certificate has been delivered and (iii) after giving effect thereto the
Borrower shall have at least $10,000,000 available to be borrowed under
the Revolving Loan Commitment (based on the most recently delivered
Borrowing Base Certificate);
(c) the Borrower and Aegis may convert any of Aegis' preferred
stock owned by any of the Thayer Group into payment-in-kind Subordinated
Debt so long as no Default has occurred and is continuing or would occur
as a result thereof; and
(d) the Borrower and Aegis may redeem approximately $150,000 of
Aegis' Series B preferred stock.
SECTION 7.2.7. CAPITAL EXPENDITURES, ETC. Neither Aegis nor the
Borrower will, nor will either permit any of their respective Subsidiaries to,
make or commit to make Capital Expenditures in any period or Fiscal Year which
aggregate in excess of the amount set forth below opposite such period or Fiscal
Year:
<TABLE>
<S> <C>
2000 Fiscal Year $18,750,000
2001 Fiscal Year $22,000,000
2002 Fiscal Year $23,750,000
2003 Fiscal Year $28,000,000;
</TABLE>
PROVIDED, HOWEVER; (i) to the extent Capital Expenditures are made or
committed to be made in any Fiscal Year in an amount less than the maximum
amount permitted for such Fiscal Year, the Capital Expenditures which Aegis or
the Borrower or any of their respective Subsidiaries may make or commit to make
in the next following Fiscal Year shall be increased by 50% of the amount of the
permitted Capital Expenditures not so made or committed to be made in the
immediately preceding Fiscal Year (the "CARRY-FORWARD AMOUNT"), but no further
carry forward of such Carry-Forward Amount to any other succeeding Fiscal Year
shall be permitted and (ii) no portion of any Carry-Forward Amount shall be used
in any Fiscal Year until the entire amount of the Capital Expenditures permitted
to be made or committed to be made in such Fiscal Year shall have been used.
SECTION 7.2.8. TAKE OR PAY CONTRACTS. Neither Aegis nor the Borrower
will, nor will either permit any of their respective Subsidiaries to, enter into
or be a party to any arrangement for the purchase of materials, supplies, other
property or services if such arrangement by its express terms requires that
payment be made by Aegis, the Borrower or such Subsidiary regardless of whether
such materials, supplies, other property or services are delivered or furnished
to it.
<PAGE>
SECTION 7.2.9. CONSOLIDATION, MERGER, ETC. Neither Aegis nor the
Borrower will, nor will either permit any of their respective Subsidiaries to,
liquidate or dissolve, consolidate with, or merge into or with, any other
corporation, or purchase or otherwise acquire all or substantially all of the
assets of any Person (or of any division thereof) except (a) any such Subsidiary
may liquidate or dissolve voluntarily into, and may merge with and into, Aegis,
the Borrower or any other Subsidiary (PROVIDED, that a Subsidiary Guarantor may
only merge with, or liquidate or dissolve into, another Subsidiary Guarantor or
Aegis or the Borrower), and the assets or stock of any Subsidiary may be
purchased or otherwise acquired by Aegis, the Borrower or any other Subsidiary
(PROVIDED, that the assets or stock of a Subsidiary Guarantor may only be
acquired by Aegis, the Borrower or another Subsidiary Guarantor), and (b) so
long as no Default has occurred and is continuing or would occur after giving
effect thereto, Aegis, the Borrower or any of their respective Subsidiaries may
purchase all or substantially all of the assets of any Person, or acquire such
Person by merger, if permitted (without duplication) by SECTION 7.2.7 and
CLAUSE (c) of SECTION 7.2.5.
SECTION 7.2.10. ASSET DISPOSITIONS, ETC. Neither Aegis nor the Borrower
will, nor will either permit any of their respective Subsidiaries to, sell,
transfer, lease, contribute or otherwise convey, or grant options, warrants or
other rights with respect to, any part of its assets (including accounts
receivable and Capital Stock of Aegis's or the Borrower's Subsidiaries) to any
Person, unless such sale, transfer, lease, contribution or conveyance is either
(a) in the ordinary course of its business, (b) permitted by SECTION 7.2.9 or
(c) made by Aegis, the Borrower or any Subsidiary Guarantor (each an "EXEMPT
ENTITY") to any other Exempt Entity.
SECTION 7.2.11. MODIFICATION OF CERTAIN AGREEMENTS. Neither Aegis
nor the Borrower will consent to any amendment, supplement or other
modification of any of the terms or provisions contained in, or applicable to
the 1997 Merger Agreement, the ATC Merger Agreement, either Warrant, any
Subordinated Debt Document, or the Stock Purchase Agreement, other than, in
the case of any Subordinated Debt Document any amendment, supplement or other
modification which extends the date or reduces the amount of any required
repayment or redemption.
SECTION 7.2.12. TRANSACTIONS WITH AFFILIATES. Neither Aegis nor the
Borrower will, nor will either permit any of their respective Subsidiaries
to, enter into, or cause, suffer or permit to exist any arrangement or
contract with any of its other Affiliates unless such arrangement or contract
is fair and equitable to Aegis, the Borrower or such Subsidiary and is an
arrangement or contract of the kind which would be entered into by a prudent
Person in the position of Aegis, the Borrower or such Subsidiary with a
Person which is not one of its Affiliates; PROVIDED that Aegis and its
Subsidiaries may pay management fees to Thayer and/or Questor in amounts
satisfactory to the Agents, and in any case, only with the Agents' prior
written consent. For purposes of this Section, any transaction under
$1,000,000 with an Affiliate shall be deemed to have satisfied the standard
set forth in the first sentence hereof if (i) such transaction is approved by
a majority of the Disinterested Directors of the board of directors of Aegis,
the Borrower or such Subsidiary (as the case may be) or (ii) in the event
that at the time of any such transaction, there are no
<PAGE>
Disinterested Directors serving on the board of directors of Aegis, the
Borrower or such Subsidiary (as the case may be), such transaction shall be
approved by a nationally recognized expert with expertise in appraising the
terms and conditions of the type of transaction for which approval is
required.
SECTION 7.2.13. NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. Neither
Aegis nor the Borrower will, nor will either permit any of their respective
Subsidiaries to, enter into any agreement (excluding this Agreement, any other
Loan Document and any agreement governing any Indebtedness permitted either by
CLAUSES (d) or (f) of SECTION 7.2.2 as to the assets financed with the proceeds
of such Indebtedness) prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, or the
ability of Aegis, the Borrower or any other Obligor to amend or otherwise
modify this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any payments, directly
or indirectly, to the Borrower by way of dividends, advances, repayments
of loans or advances, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments, or any
other agreement or arrangement which restricts the ability of any such
Subsidiary to make any payment, directly or indirectly, to the Borrower.
SECTION 7.2.14. STOCK OF SUBSIDIARIES. Neither Aegis nor the Borrower
will permit any Subsidiary to issue any Capital Stock (whether for value or
otherwise) to any Person other than Aegis, the Borrower or another Subsidiary;
PROVIDED, HOWEVER, that the shares of Capital Stock of Advanced not owned by
Aegis as of the Closing Date may be held by Persons other than Aegis.
SECTION 7.2.15. SALE AND LEASEBACK. Neither Aegis nor the Borrower
will, nor will either permit any of their respective Subsidiaries to, enter
into any agreement or arrangement with any other Person providing for the
leasing by Aegis, the Borrower or any of their respective Subsidiaries of
real or personal property which has been or is to be sold or transferred by
Aegis, the Borrower or any of their respective Subsidiaries to such other
Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of
Aegis, the Borrower or any of their respective Subsidiaries.
SECTION 7.2.16. END OF FISCAL YEAR. Neither Aegis nor the Borrower will
change, or permit its or their Subsidiaries to change, the last day of their
Fiscal Year from December 31.
ARTICLE VIII
EVENTS OF DEFAULT
<PAGE>
SECTION 8.1. LISTING OF EVENTS OF DEFAULT. Each of the following events
or occurrences described in this SECTION 8.1 shall constitute an "EVENT OF
DEFAULT".
SECTION 8.1.1. NON-PAYMENT OF OBLIGATIONS. (a) The Borrower shall
default in the payment or prepayment of any Reimbursement Obligation (including
pursuant to SECTIONS 2.6 and 2.6.2) on the applicable Disbursement Due Date or
any deposit of cash for collateral purposes on the date required pursuant to
SECTION 2.6.4 or any principal of any Loan when due (and such default shall
continue unremedied for a period of two Business Days), or (b) any Obligor
(including the Borrower) shall default (and such default shall continue
unremedied for a period of three Business Days) in the payment when due of any
interest or commitment fee or of any other monetary Obligation.
SECTION 8.1.2. BREACH OF WARRANTY. Any representation or warranty of
Aegis, the Borrower or any other Obligor made or deemed to be made hereunder or
in any other Loan Document executed by it or any other writing or certificate
furnished by or on behalf of Aegis, the Borrower or any other Obligor to any
Agent, the Issuer or any Lender for the purposes of or in connection with this
Agreement or any such other Loan Document (including any certificates delivered
pursuant to ARTICLE VI) is or shall be incorrect when made in any material
respect.
SECTION 8.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS.
Either Aegis or the Borrower shall default in the due performance and observance
of any of its obligations under SECTIONS 7.1.1, 7.1.9 or 7.2 , other than
SECTION 7.2.4; or the Borrower shall default, and such default shall continue
unremedied for a period of 15 days or more, in the due performance of observance
of any of its obligations under SECTION 7.2.4.
SECTION 8.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Administrative Agent or any
Lender.
SECTION 8.1.5. DEFAULT ON OTHER INDEBTEDNESS. (a) A default shall
occur in the payment when due (subject to any applicable grace period),
whether by acceleration or otherwise, of any Indebtedness (other than
Indebtedness described in SECTION 8.1.1) of Aegis, the Borrower or any of
their respective Subsidiaries or any other Obligor having a principal amount,
individually or in the aggregate, in excess of $2,000,000; or a default shall
occur in the performance or observance of any obligation or condition with
respect to such Indebtedness if the effect of such default is to accelerate
the maturity of any such Indebtedness (other than Indebtedness described in
SECTION 8.1.1) or such default shall continue unremedied for any applicable
period of time sufficient to permit the holder or holders of such
Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity; or
<PAGE>
(b) a Subordinated Debt Event of Default (as such term or such
similar term is defined in the applicable Subordinated Debt Document has
occurred.
SECTION 8.1.6. JUDGMENTS. Any judgment or order for the payment of
money in excess of $1,000,000 shall be rendered against Aegis, the Borrower or
any of their respective Subsidiaries or any other Obligor and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 10 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
SECTION 8.1.7. PENSION PLANS. Any of the following events shall occur
with respect to any Pension Plan:
(a) the institution of any steps by Aegis, the Borrower, any
member of their respective Controlled Group or any other Person to
terminate a Pension Plan if, as a result of such termination, Aegis, the
Borrower or any such member could be required to make a contribution to
such Pension Plan, or could reasonably expect to incur a liability or
obligation to such Pension Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 8.1.8. CONTROL OF AEGIS OR THE BORROWER. (a) Any Change in
Control shall occur; or
(b) a Company Sale (as such term is defined in the applicable
Seller Subordinated Note) shall occur.
SECTION 8.1.9. BANKRUPTCY, INSOLVENCY, ETC. Either Aegis, the Borrower
or any of their respective Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for Aegis, the
Borrower or any of their respective Subsidiaries or any other Obligor or
any property of any thereof, or make a general assignment for the benefit
of creditors;
<PAGE>
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for Aegis, the Borrower or any of their
respective Subsidiaries or any other Obligor or for a substantial part of
the property of any thereof, and such trustee, receiver, sequestrator or
other custodian shall not be discharged within 60 days, provided that
Aegis, the Borrower, each of their respective Subsidiaries and each other
Obligor hereby expressly authorizes the Administrative Agent, and each
Lender to appear in any court conducting any relevant proceeding during
such 60-day period to preserve, protect and defend their rights under the
Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of Aegis, the Borrower or any of their
respective Subsidiaries or any other Obligor, and, if any such case or
proceeding is not commenced by Aegis, the Borrower or such Subsidiary or
such other Obligor, such case or proceeding shall be consented to or
acquiesced in by Aegis, the Borrower or such Subsidiary or such other
Obligor or shall result in the entry of an order for relief or shall
remain for 60 days undismissed, provided that Aegis, the Borrower, each
of their respective Subsidiaries and each other Obligor hereby expressly
authorizes the Administrative Agent and each Lender to appear in any
court conducting any such case or proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents; or
(e) take any corporate action authorizing, or in furtherance of,
any of the foregoing.
SECTION 8.1.10. IMPAIRMENT OF SECURITY, ETC. Any Loan Document, or
any Lien granted thereunder, shall (except in accordance with its terms), in
whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any Obligor party thereto;
Aegis, the Borrower, any other Obligor or any other party shall, directly or
indirectly, contest in any manner such effectiveness, validity, binding
nature or enforceability; or any Lien securing any Obligation shall, in whole
or in part, cease to be a perfected first priority Lien, subject only to
those exceptions expressly permitted by such Loan Document and except to the
extent that any such Lien has ceased to be a perfected first priority Lien
solely due to an act or omission by the Administrative Agent or a Lender.
SECTION 8.1.11. SUBORDINATED NOTES. The subordination provisions
relating to the Subordinated Debt (the "SUBORDINATION PROVISIONS") shall fail to
be enforceable by the Lenders (which have not effectively waived the benefits
thereof) in accordance with the terms thereof, or the principal or interest on
any Loan or other Obligations shall fail to constitute Senior Indebtedness (as
defined in the applicable Subordinated Debt Document (or similar term in any
such Subordinated Debt Document); or the Borrower or any of its Subsidiaries or
any holder of any Subordinated Debt shall, directly or indirectly, disavow or
contest in any manner (i) the effectiveness, validity or enforceability of any
of the Subordination Provisions, (ii) that any of
<PAGE>
such Subordination Provisions exist for the benefit of the Administrative
Agent and the Lenders or (iii) that all payments of principal or interest
with respect to any such Subordinated Debt made by the Borrower, or realized
from the liquidation of any property of the Borrower, shall be subject to any
of such Subordination Provisions.
SECTION 8.2. ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) through (d) of SECTION 8.1.9 shall occur with respect to Aegis, the
Borrower or any of their respective Subsidiaries or any other Obligor, the
Commitments (if not theretofore terminated) shall automatically terminate and
the outstanding principal amount of all outstanding Loans and all other
Obligations shall automatically be and become immediately due and payable,
without notice or demand.
SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default
(other than any Event of Default described in CLAUSES (a) through (d) of
SECTION 8.1.9 with respect to Aegis, the Borrower or any of their respective
Subsidiaries or any other Obligor) shall occur for any reason, whether voluntary
or involuntary, and be continuing, the Administrative Agent, upon the direction
of the Required Lenders, shall by notice to the Borrower declare all or any
portion of the outstanding principal amount of the Loans and other Obligations
to be due and payable, and/or declare the Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Loans and
other Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Commitments shall terminate.
ARTICLE IX
THE AGENTS
SECTION 9.1. ACTIONS. Each Lender hereby appoints Scotia Capital as
its Administrative Agent and Documentation Agent and CSFB as its Syndication
Agent under and for purposes of this Agreement, the Notes and each other Loan
Document. Each Lender authorizes the Administrative Agent to act on behalf
of such Lender under this Agreement, the Notes and each other Loan Document
and, in the absence of other written instructions from the Required Lenders
received from time to time by the Administrative Agent (with respect to which
the Administrative Agent agrees that it will comply, except as otherwise
provided in this Section or as otherwise advised by counsel), to exercise
such powers hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto. Each
Lender hereby indemnifies (which indemnity shall survive any termination of
this Agreement) each Agent, PRO RATA according to such Lender's Percentage,
from and against any and all liabilities, obligations, losses, damages,
claims, costs or expenses of any kind or nature whatsoever which may at any
time be imposed on, incurred by, or asserted against, such Agent in any way
relating to or arising out of this Agreement, the Notes and any other Loan
Document, including reasonable attorneys' fees, and as to which such Agent is
not reimbursed by the Borrower; PROVIDED, HOWEVER, that no
<PAGE>
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, claims, costs or expenses which are determined
by a court of competent jurisdiction in a final proceeding to have resulted
solely from such Agent's gross negligence or wilful misconduct. None of the
Agents shall be required to take any action hereunder, under the Notes or
under any other Loan Document, or to prosecute or defend any suit in respect
of this Agreement, the Notes or any other Loan Document, unless it is
indemnified hereunder to its satisfaction. If any indemnity in favor of any
Agent shall be or become, in such Agent's determination, inadequate, such
Agent may call for additional indemnification from the Lenders and cease to
do the acts indemnified against hereunder until such additional indemnity is
given.
SECTION 9.2. FUNDING RELIANCE, ETC. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
5:00 p.m., New York, New York time, on the day prior to a Borrowing that such
Lender will not make available the amount which would constitute its Percentage
of such Borrowing on the date specified therefor, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent and, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and the Borrower
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to the Borrower to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Loans comprising such Borrowing.
SECTION 9.3. EXCULPATION. None of the Agents nor any of their
respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it under this Agreement or
any other Loan Document, or in connection herewith or therewith, except for its
own wilful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by any
of the Loan Documents, or the validity, genuineness, enforceability, existence,
value or sufficiency of any collateral security, nor to make any inquiry
respecting the performance by the Borrower or any other Obligor of its
obligations hereunder or under any other Loan Document. Any such inquiry which
may be made by any Agent shall not obligate such Agent to make any further
inquiry or to take any action. Each Agent shall be entitled to rely upon advice
of counsel concerning legal matters and upon any notice, consent, certificate,
statement or writing which such Agent believes to be genuine and to have been
presented by a proper Person.
SECTION 9.4. SUCCESSOR. Any Agent may resign as such at any time
upon at least 30 days' prior notice to the Borrower and all Lenders. If any
Agent at any time shall resign, the Required Lenders may appoint another
Lender as a successor Agent which shall thereupon become an Agent hereunder
in the same capacity as the retiring Agent. If no successor Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving notice of
resignation, then the
<PAGE>
retiring Agent may, on behalf of the Lenders, appoint a successor Agent in
the same capacity as the retiring Agent, which shall be one of the Lenders or
a commercial banking institution organized under the laws of the U.S. (or any
State thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as an Agent hereunder
by a successor Agent, such successor Agent shall be entitled to receive from
the retiring Agent such documents of transfer and assignment as such
successor Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation
hereunder as such, the provisions of
(a) this ARTICLE IX shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this
Agreement; and
(b) SECTION 11.3 and SECTION 11.4 shall continue to inure to its
benefit.
SECTION 9.5. CREDIT EXTENSIONS BY AGENTS. Each Agent shall have the
same rights and powers with respect to (x) the Credit Extensions made by it or
any of its Affiliates, (y) the Notes held by it or any of its Affiliates, and
(z) its participating interests in the Letters of Credit as any other Lender and
may exercise the same as if it were not an Agent. Each Agent and its Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any of its Subsidiaries or Affiliate of the
Borrower as if such Agent were not an Agent hereunder.
SECTION 9.6. CREDIT DECISIONS. Each Lender acknowledges that it has,
independently of each Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower, this Agreement, the other
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitments.
Each Lender also acknowledges that it will, independently of each Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make its own credit
decisions as to exercising or not exercising from time to time any rights and
privileges available to it under this Agreement or any other Loan Document.
SECTION 9.7. COPIES, ETC. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by the Borrower pursuant to the terms of this
Agreement (unless concurrently delivered to the Lenders by the Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from the Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of this Agreement.
<PAGE>
SECTION 9.8. THE DOCUMENTATION AGENT AND THE SYNDICATION AGENT.
Notwithstanding anything else to the contrary contained in this Agreement or any
other Loan Document, neither the Documentation Agent nor the Syndication Agent,
in such capacity, shall have any rights, duties or responsibilities under this
Agreement or any other Loan Document, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against either the Documentation Agent or the Syndication Agent in such
capacity.
ARTICLE X
GUARANTY
SECTION 10.1. GUARANTY. Aegis hereby absolutely, unconditionally and
irrevocably
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise, of all Obligations of the Borrower now or hereafter
existing, whether for principal, interest, fees, expenses or otherwise
(including all such amounts which would become due but for the operation
of the automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. Section 362(a), and the operation of Sections
502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. Section
502(b) and Section 506(b)), and
(b) indemnifies and holds harmless each Lender and each holder of
a Note for any and all costs and expenses (including reasonable
attorney's fees and expenses) incurred by such Lender or such holder, as
the case may be, in enforcing any rights under the guaranty set forth in
this ARTICLE X.
The guaranty set forth in this ARTICLE X constitutes a guaranty of payment when
due and not of collection, and Aegis specifically agrees that it shall not be
necessary or required that any Lender or any holder of any Note exercise any
right, assert any claim or demand or enforce any remedy whatsoever against the
Borrower or any other Obligor (or any other Person) before or as a condition to
the obligations of Aegis under the guaranty set forth in this ARTICLE X.
SECTION 10.2. ACCELERATION OF GUARANTY. Aegis agrees that upon the
occurrence of an Event of Default of the nature set forth in CLAUSES (a) through
(d) of SECTION 8.1.9, at a time when any of the Obligations of the Borrower and
each other Obligor may not then be due and payable, then Aegis agrees that it
will pay to the Administrative Agent for the account of each Lender forthwith
the full amount which would be payable under the guaranty set forth in this
ARTICLE X by Aegis if all such Obligations were then due and payable.
SECTION 10.3. GUARANTY ABSOLUTE, ETC. The guaranty set forth in this
ARTICLE X shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full force and effect until
all Obligations of the Borrower and each other Obligor
<PAGE>
have been paid in full in cash, all obligations of Aegis under the guaranty
set forth in this ARTICLE X shall have been paid in full in cash, all Letters
of Credit have been terminated or expired, all Rate Protection Agreements
have been terminated or expired and all Commitments shall have terminated.
Aegis guarantees that the Obligations of the Borrower will be paid strictly
in accordance with the terms of this Agreement and each other Loan Document
under which they arise, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of any Lender or any holder of any Note with respect thereto. The
liability of Aegis under the guaranty set forth in this ARTICLE X shall be
absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of this
Agreement, any Note or any other Loan Document;
(b) the failure of any Lender or any holder of any Note
(i) to assert any claim or demand or to enforce any right
or remedy against the Borrower, any other Obligor or any other
Person (including any other guarantor (including Aegis)) under the
provisions of this Agreement, any Note, any other Loan Document or
otherwise, or
(ii) to exercise any right or remedy against any other
guarantor (including Aegis) of, or collateral securing, any
Obligations of the Borrower;
(c) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations of the Borrower, or any
other extension, compromise or renewal of any Obligation of the Borrower;
(d) any reduction, limitation, impairment or termination of any
Obligations of the Borrower for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be
subject to (and Aegis hereby waives any right to or claim of) any defense
or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations of the Borrower or otherwise;
(e) any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, any of the terms of this Agreement,
any Note or any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection
of any collateral, or any amendment to or waiver or release or addition
of, or consent to departure from, any other guaranty, held by any Lender
or any holder of any Note securing any of the Obligations of the
Borrower; or
<PAGE>
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Borrower,
any surety or any guarantor.
SECTION 10.4. REINSTATEMENT, ETC. Aegis agrees that the guaranty set
forth in this ARTICLE X shall continue to be effective or be reinstated, as the
case may be, if at any time any payment (in whole or in part) of any of the
Obligations is rescinded or must otherwise be restored by any Lender or any
holder of any Note, upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, all as though such payment had not been made.
SECTION 10.5. WAIVER, ETC. Aegis hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
of the Borrower and the guaranty set forth in this ARTICLE X and any requirement
that the Administrative Agent, any Lender or any holder of any Note protect,
secure, perfect or insure any security interest or Lien, or any property subject
thereto, or exhaust any right or take any action against the Borrower, any other
Obligor or any other Person (including any other guarantor) or entity or any
collateral securing the Obligations of the Borrower.
SECTION 10.6. POSTPONEMENT OF SUBROGATION, ETC. Aegis agrees that it
will not exercise any rights which it may acquire by way of rights of
subrogation under the guaranty set forth in this ARTICLE X, by any payment made
under the guaranty set forth in this ARTICLE X or otherwise, until the prior
payment in full in cash of all Obligations of the Borrower and each other
Obligor, the termination or expiration of all Letters of Credit, the termination
or expiration of all Rate Protection Agreements and the termination of all
Commitments. Any amount paid to Aegis on account of any such subrogation rights
prior to the payment in full in cash of all Obligations of the Borrower and each
other Obligor shall be held in trust for the benefit of the Lenders and each
holder of a Note and shall immediately be paid to the Administrative Agent for
the benefit of the Lenders and each holder of a Note and credited and applied
against the Obligations of the Borrower and each other Obligor, whether matured
or unmatured, in accordance with the terms of this Agreement; PROVIDED, HOWEVER,
that if
(a) each Guarantor has made payment to the Lenders and each
holder of a Note of all or any part of the Obligations of the Borrower,
and
(b) all Obligations of the Borrower and each other Obligor have
been paid in full in cash, all Letters of Credit have been terminated or
expired, all Rate Protection Agreements have been terminated or expired
and all Commitments have been permanently terminated,
each Lender and each holder of a Note agrees that, at Aegis's request, the
Administrative Agent, on behalf of the Lenders and the holders of the Notes,
will execute and deliver to the Aegis appropriate documents (without recourse
and without representation or warranty) necessary to evidence the transfer by
subrogation to Aegis of an interest in the Obligations of the Borrower resulting
from such payment by Aegis. In furtherance of the foregoing, for so long as any
Obligations or Commitments remain outstanding, Aegis shall refrain from taking
any action or
<PAGE>
commencing any proceeding against the Borrower (or its successors or
assigns, whether in connection with a bankruptcy proceeding or otherwise) to
recover any amounts in the respect of payments made under the guaranty set
forth in this ARTICLE X to any Lender or any holder of a Note.
SECTION 10.7. SUCCESSORS, TRANSFEREES AND ASSIGNS; TRANSFERS OF NOTES,
ETC. The guaranty set forth in this ARTICLE X shall:
(a) be binding upon Aegis and its successors, transferees and
assigns; and
(b) inure to the benefit of and be enforceable by the
Administrative Agent and each Lender.
Without limiting the generality of the foregoing CLAUSE (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including the guaranty set forth in this
ARTICLE X) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of SECTION 11.11 and ARTICLE X.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. WAIVERS, AMENDMENTS, ETC. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; PROVIDED, HOWEVER, that
no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular action
be taken by all the Lenders or by the Required Lenders shall be effective
unless consented to by each Lender;
(b) modify this SECTION 11.1, change the definition of "Required
Lenders", change the definition of "Net Asset Value","Eligible Account"
or "Borrowing Base Amount" (in each case, if the effect of such change
would be to require a Lender to make or participate in a Credit Extension
in an amount that is greater than such Lender would have had to make or
participate in immediately prior to such amendment), increase any
Commitment Amount or the Percentage of any Lender, reduce any fees
described in ARTICLE III, release any Guarantor from its obligations
under any Guaranty
<PAGE>
or release or amend all or substantially all collateral security
(except, in each case, as otherwise specifically provided in this
Agreement, a Guaranty, a Security Agreement or a Pledge Agreement) or
extend the Revolving Loan Commitment Termination Date shall be made
without the consent of each Lender and each holder of a Note;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on any
Credit Extension (or reduce the principal amount of or rate of interest
on any Credit Extension) shall be made without the consent of the holder
of that Note evidencing such Loan;
(d) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer thereof; or
(e) affect adversely the interests, rights or obligations of any
Agent (in such Agent's capacity as such Agent), any Issuer (in its
capacity as Issuer), or the Swing Line Lender (in its capacity as Swing
Line Lender) shall be effective unless consented to by such Agent, such
Issuer or Swing Line Lender, as the case may be.
No failure or delay on the part of any Agent, any Issuer, any Lender or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by any Agent, any Issuer,
any Lender or the holder of any Note under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 11.2. NOTICES. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address, or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address, or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
transmitted.
SECTION 11.3. PAYMENT OF COSTS AND EXPENSES. The Borrower agrees to pay
on demand all expenses of each Agent (including the fees and out-of-pocket
expenses of counsel to each Agent and of local counsel, if any, who may be
retained by counsel to such Agent) in connection with
<PAGE>
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated, and
(b) the filing, recording, refiling or rerecording of the
Mortgage, the Pledge Agreement and the Security Agreement and/or any
Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to any thereof and any and all
other documents or instruments of further assurance required to be filed
or recorded or refiled or rerecorded by the terms hereof or of the
Mortgage, a Pledge Agreement or the Security Agreement, and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save each Agent, each Issuer and the
Lenders harmless from all liability for, any stamp or other taxes which may be
payable in connection with the execution or delivery of this Agreement, the
Credit Extensions hereunder, the issuance of the Notes, the issuance of the
Letters of Credit, or any other Loan Documents. The Borrower also agrees to
reimburse each Agent, each Issuer and each Lender upon demand for all reasonable
out-of-pocket expenses (including attorneys' fees and legal expenses) incurred
by such Agent, such Issuer or such Lender in connection with (x) the negotiation
of any restructuring or "work-out", whether or not consummated, of any
Obligations and (y) the enforcement of any Obligations.
SECTION 11.4. INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds each Agent, each Issuer
and each Lender and each of their respective officers, directors, employees and
agents (collectively, the "INDEMNIFIED PARTIES") free and harmless from and
against any and all actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for which
indemnification hereunder is sought), including reasonable attorneys' fees and
disbursements (collectively, the "INDEMNIFIED LIABILITIES"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit Extension
hereunder and under (and as defined in) the Existing Credit Agreement;
(b) the entering into and performance of the Existing Credit
Agreement, this Agreement and any other Loan Document hereunder and also
as such term is defined in the Existing Credit Agreement by any of the
Indemnified Parties (including any action
<PAGE>
brought by or on behalf of the Borrower as the result of any
determination by the Required Lenders pursuant to ARTICLE V not to
make any Credit Extension);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any Person,
whether or not such Agent, such Issuer or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of
its Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence, wilful misconduct or breach of a material obligation under a Loan
Document. The Borrower and its successors and assigns hereby waive, release and
agree not to make any claim or bring any cost recovery action against, any
Agent, any Issuer or any Lender under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted. It is expressly understood and
agreed that to the extent that any of such Persons is strictly liable under any
Environmental Laws, the Borrower's obligation to such Person under this
indemnity shall likewise be without regard to fault on the part of the Borrower
with respect to the violation or condition which results in liability of such
Person. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
SECTION 11.5. SURVIVAL. The obligations of the Borrower under SECTIONS
4.3, 4.4, 4.5, 4.6, 9.3 and 11.4, and the obligations of the Lenders under
SECTION 9.1, shall in each case survive any termination of this Agreement, the
payment in full of all Obligations and the termination or expiration of all
Letters of Credit and the termination or expiration of all Letters of Credit and
the termination of all Commitments. The representations and warranties made by
the Borrower and each other Obligor in this Agreement and in each other Loan
Document shall survive the execution and delivery of this Agreement and each
such other Loan Document. In addition, the Borrower acknowledges and agrees
that all provisions of the Existing Credit Agreement and Loan Documents (as
defined in the Existing Credit Agreement) that by their terms survive
termination of the Existing Credit Agreement shall continue to survive and that
its obligations in respect thereof shall be included as "Obligations".
<PAGE>
SECTION 11.6. SEVERABILITY. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 11.7. HEADINGS. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 11.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement. This Agreement shall become effective
when counterparts hereof executed on behalf of the Borrower, the Issuer and each
Lender (or notice thereof satisfactory to the Administrative Agent) shall have
been received by the Administrative Agent and notice thereof shall have been
given by the Administrative Agent to the Borrower, the Issuer and each Lender
and each of the other conditions precedent set forth in Article V have been
satisfied or waived by the Administrative Agent or the Lenders (as applicable).
SECTION 11.9. GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This
Agreement, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.
SECTION 11.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to SECTION 11.11.
SECTION 11.11. SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS IN
LOANS AND NOTES. Each Lender may assign, or sell participations in, its Loans
and Commitments to one or more other Persons in accordance with this SECTION
11.11.
SECTION 11.11.1. ASSIGNMENTS. Any Lender,
<PAGE>
(a) with the written consents of the Borrower and the
Administrative Agent (which consents shall not be unreasonably delayed or
withheld) may at any time assign and delegate to one or more commercial
banks or other financial institutions, and
(b) with notice to the Borrower and the Administrative Agent, but
without the consent of the Borrower or the Administrative Agent, may
assign and delegate to any of its affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "ASSIGNEE LENDER"), all or any fraction of such Lender's total Loans,
Letter of Credit Outstandings and Commitments (which assignment and delegation
shall be of a constant, and not a varying, percentage of all the assigning
Lender's Loans, Letter of Credit Outstandings and Commitments) in a minimum
aggregate amount of $3,000,000 or the then remaining amount of a Lender's Loans;
PROVIDED, HOWEVER, that any such Assignee Lender will comply, if applicable,
with the provisions contained in the last sentence of SECTION 4.6 and FURTHER,
PROVIDED, HOWEVER, that, the Borrower, each other Obligor and the Administrative
Agent shall be entitled to continue to deal solely and directly with such Lender
in connection with the interests so assigned and delegated to an Assignee Lender
until
(c) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with respect
to such Assignee Lender, shall have been given to the Borrower and the
Administrative Agent by such Lender and such Assignee Lender,
(d) such Assignee Lender shall have executed and delivered to the
Borrower and the Administrative Agent a Lender Assignment Agreement,
accepted by the Administrative Agent, and
(e) the processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Administrative Agent has received an executed Lender Assignment Agreement, the
Borrower shall execute and deliver to the Administrative Agent (for delivery to
the relevant Assignee Lender) new Notes evidencing such Assignee Lender's
assigned Loans and Commitments and, if the assignor Lender has retained Loans
and Commitments hereunder, replacement Notes in the principal amount of the
Loans and
<PAGE>
Commitments retained by the assignor Lender hereunder (such Notes to be in
exchange for, but not in payment of, those Notes then held by such assignor
Lender). Each such Note shall be dated the date of the predecessor Notes.
The assignor Lender shall mark the predecessor Notes "exchanged" and deliver
them to the Borrower. Accrued interest on that part of the predecessor Notes
evidenced by the new Notes, and accrued fees, shall be paid as provided in
the Lender Assignment Agreement. Accrued interest on that part of the
predecessor Notes evidenced by the replacement Notes shall be paid to the
assignor Lender. Accrued interest and accrued fees shall be paid at the same
time or times provided in the predecessor Notes and in this Agreement. Such
assignor Lender or such Assignee Lender must also pay a processing fee to the
Administrative Agent upon delivery of any Lender Assignment Agreement in the
amount of $3,500. Any attempted assignment and delegation not made in
accordance with this SECTION 11.11.1 shall be null and void. Notwithstanding
any other term of this SECTION 11.11.1, the agreement of the Swing Line
Lender to provide the Swing Line Loan Commitment shall not impair or
otherwise restrict in any manner the ability of the Swing Line Lender to make
any assignment of its Loans or Commitments, it being understood and agreed
that the Swing Line Lender may terminate its Swing Line Loan Commitment, to
the extent such Swing Line Commitment would exceed its Revolving Loan
Commitment after giving effect to such assignment, in connection with the
making of any assignment. Nothing contained in this SECTION 11.11.1 shall
prevent or prohibit any Lender from pledging its rights (but not its
obligations to make Loans) under this Agreement and/or its Loans and/or its
Notes hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank. In the event that S&P, Moody's
or Thompson's BankWatch (or InsuranceWatch Ratings Service, in the case of
Lenders that are insurance companies (or Best's Insurance Reports, if such
insurance company is not rated by Insurance Watch Ratings Service)) shall,
after the date that any Lender with a Commitment to make Revolving Loans or
participate in Letters of Credit or Swing Line Loans becomes a Lender,
downgrade the long-term certificate of deposit rating or long-term senior
unsecured debt rating of such Lender, and the resulting rating shall be below
BBB-, Baa3 or C (or BB, in the case of Lender that is an insurance company
(or B, in the case of an insurance company not rated by InsuranceWatch
Ratings Service)), then the Issuer and the Swing Line Lender shall have the
right, but not the obligation, upon notice to such Lender and the
Administrative Agent, to replace such Lender with an Assignee Lender in
accordance with and subject to the restrictions contained in this Section,
and such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in this Section)
all its interests, rights and obligations in respect of its Revolving Loan
Commitment under this Agreement to such Assignee Lender; PROVIDED, HOWEVER,
that (i) no such assignment shall conflict with any law, rule and regulation
or order of any governmental authority and (ii) such Assignee Lender shall
pay to such Lender in immediately available funds on the date of such
assignment the principal of and interest and fees (if any) accrued to the
date of payment on the Loans made, and Letters of Credit participated in, by
such Lender hereunder and all other amounts accrued for such Lender's account
or owed to it hereunder.
SECTION 11.11.2. PARTICIPATIONS. Any Lender may at any time sell to one
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "PARTICIPANT") participating interests (or a
sub-participating interest, in the case of
<PAGE>
a Lender's participating interest in a Letter of Credit) in any of the Loans,
Commitments, or other interests of such Lender hereunder; PROVIDED, HOWEVER,
that
(a) no participation or sub-participation contemplated in this
SECTION 11.11.2 shall relieve such Lender from its Commitments or its
other obligations hereunder or under any other Loan Document,
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations,
(c) the Borrower and each other Obligor and the Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement
and each of the other Loan Documents, and
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in CLAUSE (b) or (c) of
SECTION 11.1.
The Borrower acknowledges and agrees that each Participant, for purposes of
SECTIONS 4.6, 4.8, 4.9, 7.1.1 and 11.4, shall be considered a Lender.
SECTION 11.11.3. SPC FUNDING. (a) Notwithstanding anything to the
contrary contained herein, any Lender (a "GRANTING LENDER") may grant to a
special purpose funding vehicle (a "SPC"), identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the
Borrower, the option to provide to the Borrower all or any part of any Credit
Extension that such Granting Lender would otherwise be obligated to make to the
Borrower pursuant to this Agreement; PROVIDED, that (i) nothing herein shall
constitute a commitment by any SPC to make any Credit Extension, (ii) whether or
not such SPC elects not to exercise such option, the Granting Lender shall
continue to be obligated to make such Credit Extension pursuant to the terms
hereof and (iii) no such SPC shall have any right to approve any amendment or
consent to or waiver of this Agreement, except for amendments, consents or
waivers resulting in (A) a postponement of the date fixed for any payment of
principal, interest or fees due hereunder, (B) an extension of the Stated
Maturity Date, (C) a reduction in the principal amount of any Credit Extension
or (D) a reduction in any rate of interest or fees payable by the Borrower
hereunder. Furthermore, the Granting Lender agrees to promptly reimburse the
Swing Line Lender and the Issuer for any increased costs and compensate the
Swing Line Lender and the Issuer for any reduced returns (promptly following
demand) which results from the Swing Line Lender or the Issuer "fronting" for
the SPC (as opposed to the Granting Lender) under the Swing Line Loan Commitment
or Letter of Credit Commitment. The making of a Credit Extension by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Credit Extension were made by such Granting Lender.
Each party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Lender)
<PAGE>
and in furtherance thereof each Granting Lender hereby acknowledges and
agrees that notwithstanding the introduction of a SPC pursuant to this
Section, such Granting Lender shall continue to be responsible for all of its
obligations as a "Lender" under the Loan Documents (including Article IX).
(b) In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in
full of all outstanding commercial paper or other senior indebtedness of
any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the
United States or any State thereof.
(c) In addition, notwithstanding anything to the contrary
contained in SECTION 11.11.1, any SPC may (i) with notice to, but without
the prior written consent of, the Borrower and the Administrative Agent
and without paying any processing fee therefor, assign all or a portion
of its interests in any Credit Extensions to the Granting Lender or to
any financial institutions (consented to by the Borrower and
Administrative Agent) providing liquidity and/or credit support to or for
the account of such SPC to support the funding or maintenance of Credit
Extensions and (ii) disclose on a confidential basis any non-public
information relating to its Credit Extensions to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC; PROVIDED, that the Administrative
Agent shall only be required to make payment owing to a Granting Lender
under the Loan Documents to such Granting Lender (and not to any SPC),
and notices required to be delivered to Lenders under the Loan Documents
need only be delivered to the Granting Lenders (and not to any SPC
notwithstanding notice of the introduction of a SPC pursuant to this
Section). This section may not be amended without the written consent of
each Granting Lender, all or any part of whose Loan is being funded by an
SPC at the time of such amendment.
SECTION 11.12. OTHER TRANSACTIONS. Nothing contained herein shall
preclude the Administrative Agent, the Issuer or any other Lender from engaging
in any transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging with any other
Person.
SECTION 11.13. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY
IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN
<PAGE>
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
THE BORROWER HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEMS (THE "PROCESS
AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW
YORK 10019, UNITED STATES, AS ITS AGENT TO RECEIVE, ON THE BORROWER'S BEHALF
AND ON BEHALF OF THE BORROWER'S PROPERTY, SERVICE OF COPIES OF THE SUMMONS
AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING TO THE BORROWER AS PROVIDED
IN SECTION 11.2 OR DELIVERING A COPY OF SUCH PROCESS TO THE BORROWER IN CARE
OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND THE BORROWER
HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH
SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE, THE BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW
YORK. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT
IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE
BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.14. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, THE
LENDERS, THE ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
ADMINISTRATIVE AGENT, THE LENDERS OR THE BORROWER. THE BORROWER
<PAGE>
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
ADMINISTRATIVE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
IQI, INC.
By:______________________________________
Name:
Title:
Address: 7880 Bent Branch Drive
Suite 150
Irving, TX 75063
Facsimile No.: 972-830-1844
Attention: Matthew S. Waller
AEGIS COMMUNICATIONS GROUP, INC.
By:______________________________________
Name:
Title:
Address: 7880 Bent Branch Drive
Suite 150
Irving, TX 75063
Facsimile No.: 972-830-1844
Attention: Matthew S. Waller
<PAGE>
THE BANK OF NOVA SCOTIA,
as Administrative Agent and Documentation Agent
By:____________________________________________
Name:
Title:
Address: One Liberty Plaza
New York, New York 10006
Facsimile No.: 212-225-5090
Attention: Jerome Noto
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent
By:__________________________________________
Name:
Title:
By:__________________________________________
Name:
Title:
Address: Eleven Madison Avenue
New York, New York 10010-3629
Telephone: 212-325-9155
Facsimile No.: 212-325-8309
Attention: Robert Hetu
<PAGE>
53.0% THE BANK OF NOVA SCOTIA
By:______________________________________
Name:
Title:
DOMESTIC & LIBOR OFFICE:
Address: One Liberty Plaza
New York, New York 10006
Facsimile No.: 212-225-5090
Attention: Jerome Noto
<PAGE>
47.0% CREDIT SUISSE FIRST BOSTON
By:__________________________________________
Name:
Title:
By:__________________________________________
Name:
Title:
DOMESTIC & LIBOR OFFICE:
Address: Eleven Madison Avenue
New York, New York 10010-3629
Telephone: 212-325-9155
Facsimile No.: 212-325-8309
Attention: Robert Hetu
<PAGE>
DISCLOSURE SCHEDULE
(Schedules omitted in accordance with Item 601 of Regulation S-K)
ITEM 6.6 MATERIAL ADVERSE CHANGE.
ITEM 6.7 LITIGATION.
ITEM 6.8 EXISTING SUBSIDIARIES.
ITEM 6.11 EMPLOYEE BENEFIT PLANS.
ITEM 6.12 ENVIRONMENTAL MATTERS.
The Company agrees to furnish supplementally a copy of any ommitted schedule
to the Commission upon request.
<PAGE>
EXHIBIT 99.1
QUESTOR COMPLETES PREFERRED STOCK INVESTMENT IN AEGIS
PAGE 1 OF 3
NEWS RELEASE FOR IMMEDIATE RELEASE
CONTACTS AT AEGIS:
- -----------------
(972) 830-1800
Matthew S. Waller Chief Financial Officer
Scott D. Guffey Vice President - Finance, Mergers & Acquisitions and
Investor Relations
CONTACTS AT QUESTOR:
- -------------------
(212) 297-1599
Henry L. Druker Questor Management Company
(212) 371-2200
Harry Savage Robert Marston Corporate Communications, Inc.
QUESTOR COMPLETES PREFERRED STOCK INVESTMENT IN AEGIS
AEGIS STOCKHOLDERS ELECT NEW DIRECTORS AT SPECIAL MEETING
IRVING, TEXAS AND SOUTHFIELD, MICHIGAN - December 13, 1999 - Aegis
Communications Group, Inc. ("Aegis", OTC Bulletin Board symbol: AGIS) and
Questor Partners Fund II, L.P. ("Questor") jointly announced that Questor
has completed the purchase of $46.75 million of newly issued Aegis Series F
senior voting convertible preferred stock. On an as converted basis and
assuming a conversion price of $1.00 per share, Questor owns approximately
47% of Aegis' issued and outstanding common stock and approximately 38% of
Aegis' fully diluted shares outstanding. The new preferred stock votes on an
as converted basis and thus initially represents approximately 47% of the
voting equity stock. Proceeds from Questor's investment were used to repay
approximately $43 million in existing bank debt providing Aegis with needed
flexibility to fund future growth.
In conjunction with the closing of the Questor investment and the repayment
of bank debt, the Company amended its credit agreement with its lenders,
thereby curing all outstanding defaults. Under the amended agreement, Aegis'
lenders expanded their aggregate revolving credit facility commitments from
$30 million to $45 million. If the Company meets certain financial targets
in the fourth quarter of 1999 and the first quarter of 2000, the aggregate
commitment will increase as much as $5 million, bringing the total revolving
facility to $50 million. At closing, Aegis estimated its available borrowing
capacity under the amended agreement at approximately $17 million.
<PAGE>
QUESTOR COMPLETES PREFERRED STOCK INVESTMENT IN AEGIS
PAGE 2 OF 3
Immediately prior to the closing of the Questor investment, Aegis held a
special meeting of stockholders at which the stockholders approved the
Purchase Agreement and the terms of the Series F Preferred Stock, the
issuance of the preferred stock, certain amendments to the Company's charter
to authorize additional capital stock to facilitate the transaction, and the
election of a new board of twelve directors, six of whom were nominated by
Questor and six of whom were nominated by existing investors.
Elected to the Company's board of directors were John R. Birk, who will
continue to serve as Chairman of the Board, Henry L. Druker, Michael D.
Madden, Peter D. Fitzsimmons, Robert D. Denious, Dean Anderson, Kevin J.
Prokop, Frederic V. Malek, Michael G. Santry, Edward Blank, Stephen A.
McNeely and Paul G. Stern.
"We welcome Questor as a partner and its representatives to our board,"
remarked Mr. Birk. "The combination of new capital and Questor's expertise
in the areas of finance and management will serve Aegis well as we seek
additional growth and a return to profitability."
Questor Management Company, based in Southfield, Michigan, manages the
Questor Partners Funds, which have more than $1 billion of committed equity
capital. The Funds' objective is to acquire significant positions in
companies that are underperforming, troubled, or have not met their owners'
expectations, but offer the potential for superior returns with the
application of appropriate levels of capital and turnaround or management
expertise. Questor Partners Fund I's portfolio includes AP Automotive
Systems, Inc., Toledo, Ohio; Channel Master, Inc., Smithfield, North
Carolina; and Schwinn/GT Corp., Boulder, Colorado.
The Questor Partners Funds were established by Jay Alix, founder of Jay Alix
& Associates, the nation's leading turnaround and crisis management firm, and
Dan Lufkin, co-founder of Donaldson, Lufkin & Jenrette. Other principals are
Henry L. Druker, Michael D. Madden, Wallace L. Rueckel and Robert E. Shields.
Aegis Communications Group offers complete, integrated marketing services
including customer acquisition, customer care, and marketing research to
leading corporations. Aegis manages and operates a national network of client
service centers, employing approximately 8,000 people and housing 5,400
production workstations. Aegis' blue-chip client base includes American
Express, AT&T, BellSouth, First USA, Integrion Financial Network, Citibank
Universal Card Services, U S West Communications and Western Union, among
others. Further information regarding Aegis and its services can be found on
its web-site at www.aegiscomgroup.com.
Based in Atlanta, Georgia, Aegis' Elrick & Lavidge division is recognized as one
of the premier custom marketing research firms in the United States. Established
in 1951, Elrick & Lavidge provides clients, representing a broad range of
industries, with customer satisfaction, quantitative and qualitative research,
and marketing services. Elrick & Lavidge's clients include American Century,
Compaq, Frito-Lay, Hallmark, 3M, and Procter & Gamble, among others. Further
information regarding Elrick & Lavidge is available on its web-site at
www.elavidge.com.
<PAGE>
QUESTOR COMPLETES PREFERRED STOCK INVESTMENTS IN AEGIS
PAGE 3 OF 3
THE FOLLOWING IS A "SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995: STATEMENTS CONTAINED IN THIS PROXY STATEMENT
THAT ARE NOT BASED ON HISTORICAL FACTS ARE "FORWARD-LOOKING STATEMENTS".
TERMS SUCH AS "ANTICIPATES", "BELIEVES", "ESTIMATES", "EXPECTS", "PLANS",
"PREDICTS", "MAY", "SHOULD", "WILL", THE NEGATIVE THEREOF AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH
STATEMENTS ARE BY NATURE SUBJECT TO UNCERTAINTIES AND RISKS, INCLUDING BUT
NOT LIMITED TO: AEGIS' RELIANCE ON CERTAIN MAJOR CLIENTS; REALIZING COST
REDUCTIONS AS A RESULT OF AEGIS' SITE MIGRATION PLAN AND RENEGOTIATED
TELECOMMUNICATIONS TARIFF; THE SUCCESSFUL COMBINATION OF ANTICIPATED REVENUE
GROWTH WITH OPERATING EXPENSE REDUCTION TO RESULT IN IMPROVED PROFITABILITY
AND CASH FLOW; GOVERNMENT REGULATION AND TAX POLICY; ECONOMIC CONDITIONS;
COMPETITION AND PRICING; DEPENDENCE ON AEGIS' LABOR FORCE; RELIANCE ON
TECHNOLOGY; TELEPHONE SERVICE DEPENDENCE; AND OTHER OPERATIONAL, FINANCIAL OR
LEGAL RISKS OR UNCERTAINTIES DETAILED IN THE COMPANY'S SEC FILINGS FROM TIME
TO TIME. THESE RISKS AND UNCERTAINTIES COULD CAUSE ACTUAL RESULTS OR EVENTS
TO DIFFER MATERIALLY FROM HISTORIC RESULTS OR THOSE ANTICIPATED. INVESTORS
SHOULD NOT PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS, AND THE
COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS.
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