SECOND AMENDMENT AND WAIVER
TO
FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT AND WAIVER dated as of October 26, 2000, to FIFTH
AMENDED AND RESTATED CREDIT AGREEMENT (the "Credit Agreement"), dated as of
December 31, 1999, as amended by the First Amendment to the Fifth Amended and
Restated Credit Agreement dated as of March 24, 2000, by and between NCO GROUP,
INC., a Pennsylvania corporation ("NCO Group" or the "Borrower" and sometimes an
"Obligor"), NCO TELESERVICES, INC. ("Teleservices" and sometimes an "Obligor"),
and the Lenders listed on the signature pages hereto (together with other
lenders party to the Credit Agreement from time to time pursuant to Section 11.9
of the Credit Agreement, and their successors and assigns, the "Lenders"),
MELLON BANK, N.A., a national banking association ("Mellon") for itself and as
Administrative Agent for the other Lenders (in such capacity, together with its
successors and assigns in such capacity, the "Administrative Agent") (this
"Amendment"). Capitalized terms used in this Amendment are used as defined in
the Credit Agreement unless otherwise defined herein.
WHEREAS, the Borrower has notified the Administrative Agent that it
plans to sell (i) substantially all of the assets of its Telemarketing Division
(the "Telemarketing Sale") pursuant to an Asset Purchase Agreement between
Teleservices and Creative Marketing Strategies, Inc. ("CMS"), and (ii)
substantially all of the assets of its Market Research Division (the "Market
Research Sale", and together with the Telemarketing Sale, the "Division Sale")
pursuant to an Asset Purchase Agreement among the Borrower, Teleservices and TRC
Holdings, Inc. ("TRC");
WHEREAS, in connection with the Division Sale, the Borrower has
requested that the Lenders waive the negative covenant contained in Section 6.10
of the Credit Agreement;
WHEREAS, as consideration for the Division Sale, Teleservices will
receive a promissory note issued by CMS (the "CMS Note") and a promissory note
issued by TRC (the "TRC Note", and together with the CMS Note, the "Division
Sale Notes") and the Borrower and Teleservices wish to confirm that the Division
Notes are subject to the Security Agreement and will be pledged to the
Collateral Agent thereunder; and
WHEREAS, the parties desire to waive Section 6.10 of the Credit
Agreement and further amend the Credit Agreement and the other Loan Documents,
all on the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the
Borrower, Teleservices and the Lenders agree as follows:
1. Waiver. For purposes of the Division Sale, the Lenders hereby waive
the restriction in Section 6.10 of the Credit Agreement that any division
disposed of by an Obligor
have an enterprise value on an arms length basis per transaction of $500,000 or
less, and agree to the release of the Collateral being sold in the Division
Sale. The foregoing waiver is limited to its express terms and does not imply
any other or future waivers.
2. Pledge of Division Sale Notes. The Borrower and Teleservices hereby
confirm and agree that the Division Sale Notes are Collateral subject to the
security interest granted by Teleservices under the Security Agreement.
Teleservices shall deliver each of the Division Sale Notes to the Collateral
Agent, together with undated note powers, as soon as practicable after the
closing of the Division Sale.
3. Amendments to Credit Agreement. The Credit Agreement is hereby
amended as follows:
a. Section 10.1, Certain Definitions. The following definition is added
in its correct alphabetical location in Section 10.1:
"Division Sale Notes" means the promissory notes of
each of Creative Marketing Strategies, Inc. and TRC Holdings,
Inc. originally issued to NCO Teleservices, Inc., and any note
issued in substitution therefor, together with all extensions
and renewals thereof, in whole or in part, in each case as the
same may be amended, modified, restated or supplemented from
time to time.
b. Section 1.7, Reductions Of RC Commitment. The following clause (iii)
is added immediately following clause (ii) of paragraph (a) of Section 1.7:
(iii) At anytime that an Obligor shall receive cash
proceeds in respect of principal under the Division Sale
Notes, the RC Commitment shall be reduced by an amount equal
to such proceeds.
4. Representations and Warranties. The Borrower represents and warrants
to the Lenders as follows:
a. Credit Agreement. Each of the representations and warranties
contained in the Credit Agreement is accurate on and as of the date hereof.
b. No Defaults. As of the date hereof, no Default or Event of Default
exists.
5. Continuing Effectiveness of Credit Agreement. Except as amended
hereby, the Credit Agreement and each other Loan Document remains in full force
and effect and is hereby ratified.
6. Effectiveness. This Amendment shall be effective when the necessary
Lenders, the Administrative Agent, and the Collateral Agent has executed a
counterpart hereto.
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7. Counterparts. This Amendment may be executed in any number of
counterparts each of which shall be an original and all of which, when taken
together, shall constitute one instrument.
[Signatures begin on next page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
NCO GROUP, INC.
NCO TELESERVICES, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxx,
as President and Chief Executive
Officer of each
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
MELLON BANK, N.A.,
for itself and as Administrative Agent
and as Collateral Agent
By:___________________________________
Xxxx X. Xxxxxxxx
Vice President
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
PNC BANK, NATIONAL ASSOCIATION
By:____________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
BANK OF AMERICA
By:_____________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
FIRST UNION NATIONAL BANK
By:_____________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
SUNTRUST BANK, ATLANTA
By:___________________________
Name:
Title:
By: __________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
UNION BANK OF CALIFORNIA, N.A.
By:___________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
NATIONAL CITY BANK OF PENNSYLVANIA
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
SUMMIT BANK
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
PROVIDENT BANK OF MARYLAND
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
MANUFACTURERS AND TRADERS TRUST
COMPANY
By:____________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
FLEET NATIONAL BANK
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
CITIZENS BANK OF MASSACHUSETTS
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
CHEVY CHASE BANK, F.S.B.
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
IBM CREDIT CORPORATION
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
BANK AUSTRIA CREDITANSTALDT
CORPORATE FINANCE, INC.
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
FIRSTAR BANK, N.A.
By:_______________________________
Name:
Title:
[Signature Page to Second Amendment and Waiver
to NCO Credit Agreement and Other Loan Documents]
