AMENDMENT NO. 2 AND CONSENT
TO SEVENTH AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDMENT NO. 2 AND CONSENT TO SEVENTH AMENDED AND RESTATED CREDIT
AGREEMENT (this "Amendment") is dated as of July 13, 2006, by and among NCO
GROUP, INC., a Pennsylvania corporation ("Borrower"), the LENDERS referred to in
the Credit Agreement (as hereinafter defined) and CITIZENS BANK OF PENNSYLVANIA,
a Pennsylvania state-chartered bank, 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"). Capitalized terms used and not
otherwise defined in this Amendment shall have the meanings ascribed in the
Credit Agreement,
BACKGROUND
WHEREAS, the parties hereto are party to a certain Seventh Amended and
Restated Credit Agreement dated as of June 21, 2005 (as amended, restated,
supplemented or modified from time to time, the "Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders modify the Credit
Agreement to allow the Borrower to enter into a certain Agreement and Plan of
Merger with one or more entities, controlled, directly or indirectly, by One
Equity Partners II, L.P., One Equity Partners LLC, their affiliates and/or
Xxxxxxx Xxxxxxx, pursuant to which, among other things, but subject to, the
required level of shareholder approval and certain other conditions, one of such
entities would be merged with and into the Borrower with the result that the
existing shareholders (excluding certain shareholders described therein) of the
Borrower would receive cash instead of shares and the shares of the post-merger
Borrower would be issued to another of such entities;
WHEREAS, the Borrower has told the Lenders that, if and when those
conditions are satisfied and the merger is consummated, the debt under the
Credit Agreement will be repaid in full; and
WHEREAS, the Administrative Agent and Majority Lenders are willing to
modify the Credit Agreement on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein contained,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Amendments to Credit Agreement and Consent, From and after the date on
which each of the conditions set forth in Section 2 below has been satisfied,
all references to the Credit Agreement in the Loan Documents shall mean and
refer to the Credit Agreement as modified as follows:
(a) Section 6.9 of the Credit Agreement (Mergers, Acquisitions, Etc.)
shall be amended by adding the following at the end thereof.
"Notwithstanding the foregoing, the Borrower may enter into the
Permitted Merger Agreement so long as:
(1) the Permitted Merger Agreement is terminated (subject to
Section 7.2 thereof) or consummated in accordance with
clause (2) below no later than the earlier of (a) the date
specified in Section 7.1(c) of the Permitted Merger
Agreement once executed and delivered by the parties thereto
and as the same may be amended by the parties thereto or (b)
March 15, 2007, subject in the case of both (a) and (b) to
an extension of up to 30 days at the election of the
Administrative Agent; and
(2) at the time that the merger transactions contemplated
thereby are consummated, the Secured Obligations are paid in
full (or, with the consent of such Lenders, Issuer or Swap
Parties as shall have Secured Obligations that are not paid
in full, cash collateralized in an amount equal to 110% or
otherwise secured to the satisfaction of such Persons) and
the Commitment is terminated."
(b) Section 6.14 (Limitation on Other Restrictions On Liens) is
amended by inserting the following phrase at the end thereof immediately prior
to the period: "and (c) the prohibitions on granting Liens set forth in the
Permitted Merger Agreement."
(c) Section 10.1 (Certain Definitions) is amended by inserting the
following additional definition in its correct alphabetical order.
"PERMITTED MERGER AGREEMENT" means that certain Agreement and Plan of
Merger among the Borrower and one or more entities controlled,
directly or indirectly, by One Equity Partners II, L.P., One Equity
Partners LLC, their affiliates and/or Xxxxxxx Xxxxxxx, in
substantially the form of the draft dated June 27, 2006, with such
changes thereto as the Administrative Agent may approve."
(d) The Lenders consent to the waiver of the provisions of Section
6.15 (Limitations on Restrictions on Amendment of the Loan Document) to allow
the Borrower to agree to Section 4.1 of the Permitted Merger Agreement but such
consent to waiver shall not be applicable after the occurrence and during the
continuance of an Event of Default.
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2. Conditions to Amendments. The amendments to the Credit Agreement and
Waiver set forth in Section 1 shall be effective as of the date first above
written upon satisfaction of each of the following conditions:
(a) the Administrative Agent, the Majority Lenders and Borrower shall
have duly executed and delivered to the Administrative Agent counterpart
signature pages to this Amendment; and
(b) Borrower shall have delivered such other information as the
Administrative Agent shall reasonably request.
3. Borrower's Representations and Warranties. Borrower hereby represents
and warrants to the Administrative Agent and Lenders as follows.
(a) All of the representations and warranties made by Borrower in the
Credit Agreement and the other Loan Documents to which it is party remain true,
complete and accurate in all material respects as of the date hereof, except to
the extent such representations and warranties were expressly made as of a
specified date.
(b) No Default or Event of Default exists, or will exist after giving
effect to this Amendment, under the Credit Agreement and other Loan Documents.
(c) Borrower has the corporate power and authority to execute,
deliver, perform this Amendment, and to execute, deliver, perform and take all
actions contemplated to be taken by it under this Amendment, and all such action
has been duly and validly authorized by all necessary corporate proceedings on
its part.
(d) This Amendment, the Credit Agreement and the other Loan Documents
to which Borrower is party constitute the legal, valid and binding agreements of
Borrower, enforceable in accordance with their respective terms, except as
enforceability may be affected by bankruptcy, insolvency, moratorium or other
laws affecting creditors' rights generally.
(e) Borrower has no claims, defenses or set-offs to its respective
obligations under the Credit Agreement and other Loan Documents to which it is
party.
4. Payment of Expenses. Borrower shall pay all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees) incurred by
the Administrative Agent in connection with this Amendment.
5. Effect of Agreement. Except as expressly amended in Section 1, the
Credit Agreement and the other Loan Documents in effect as of the date hereof
shall remain in full force and effect, unmodified, and are enforceable against
Borrower in accordance with their respective terms.
6. Binding Effect. This Amendment shall extend to and bind the parties
hereto and their respective successors and assigns.
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7. Governing Law, This Amendment and the rights and obligations of the
parties under this Amendment shall be construed in accordance with and shall be
governed by the laws of the Commonwealth of Pennsylvania.
8. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument. Delivery of a photocopy
or telecopy of an executed counterpart of a signature page to this Amendment
shall be as effective as delivery of a manually executed counterpart of this
Amendment.
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IN WITNESS WHEREOF, the undersigned parties have executed this
Amendment No. 2 and Consent to Seventh Amended and Restated Credit Agreement as
of the day and year first above written.
NCO GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: EVP and COO Shared Services
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[LENDER COUNTERPART SIGNATURE PAGE TO AMENDMENT]
Citizens Bank of Pennsylvania
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
[LENDER COUNTERPART SIGNATURE PAGE TO AMENDMENT]
NATIONAL CITY BANK
By: /s/ Xxxx X. Xxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
[LENDER COUNTERPART SIGNATURE PAGE TO AMENDMENT]
Wachovia Bank, National Association
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
[LENDER COUNTERPART SIGNATURE PAGE TO AMENDMENT]
BANK OF AMERICA, N. A.
By: /s/ Xxxxxx Xxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
HSBC BANK USA, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
[LENDER COUNTERPART SIGNATURE PAGE TO AMENDMENT]
Manufacturers and Traders Trust Company
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Vice President
[LENDER COUNTERPART SIGNATURE PAGE TO AMENDMENT]
US Bank, N.A.
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Vice President
[LENDER COUNTERPART SIGNATURE PAGE TO AMENDMENT]
PNC Bank, National Association
By: /s/ Xxxxxxxx Xxxxxxx
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Name: Xxxxxxxx Xxxxxxx
Title: Vice President
