[EXECUTION COPY]
FOURTH AMENDMENT
THIS FOURTH AMENDMENT, dated as of August 6, 1999 (this
"AMENDMENT"), is among IQI, INC., a New York corporation (the "BORROWER"),
AEGIS COMMUNICATIONS GROUP, INC., a Delaware corporation ("AEGIS"), each of
the Borrower's Subsidiaries (the "CONSENTING OBLIGORS") and the Lenders (such
capitalized term and other capitalized terms used in this preamble and the
recitals below to have the meanings set forth in, or as defined by reference
in, ARTICLE I).
W I T N E S S E T H:
WHEREAS, the Borrower, Aegis, the Lenders, Credit Suisse First
Boston, as Syndication Agent for the Lenders, and The Bank of Nova Scotia, as
Documentation Agent and Administrative Agent for the Lenders, are parties 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 date hereof, the "EXISTING CREDIT AGREEMENT");
WHEREAS, the Borrower has requested that the Lenders amend the
Existing Credit Agreement in certain respects as described below; and
WHEREAS, the Lenders have agreed, subject to the terms and
conditions set forth herein, to amend the Existing Credit Agreement, as set
forth below (the Existing Credit Agreement, as amended by this Amendment,
being referred to as the "CREDIT AGREEMENT");
NOW, THEREFORE, in consideration of the agreements herein contained,
and for other valuable consideration receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows.
ARTICLE I
DEFINITIONS
SECTION I.1 CERTAIN DEFINITIONS. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings
(such meanings to be equally applicable to the singular and plural form
thereof):
"AEGIS" is defined in the PREAMBLE.
"AMENDMENT" is defined in the PREAMBLE.
"BORROWER" is defined in the PREAMBLE.
"CONSENTING OBLIGORS" is defined in the PREAMBLE.
"CREDIT AGREEMENT" is defined in the THIRD RECITAL.
"EXISTING CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"FOURTH AMENDMENT EFFECTIVE DATE" is defined in SECTION 4.1.
SECTION I.2 OTHER DEFINITIONS. Terms for which meanings are provided
in the Existing Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Fourth Amendment
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this ARTICLE II; except as so amended, the Existing Credit Agreement
shall continue in full force and effect.
SECTION II.1 AMENDMENTS TO RECITALS. The Recitals to the Existing
Credit Agreement are hereby amended as follows.
SECTION II.1.1 The fifth recital of the Existing Credit Agreement is
hereby amended by (a) deleting the word "and" appearing at the end of clause
(ii) thereof, (b) deleting the period (".") at the end of clause (iii)
thereof and inserting "; and" in its place, and (c) inserting a new clause
(iv) to read as follows:
"(iv) on the Fourth Amendment Effective Date, an Additional
Term Loan Commitment pursuant to which Borrowings of Additional Term
Loans, in a maximum aggregate principal amount not to exceed
$7,500,000, will be made to the Borrower in a single Borrowing
occurring on the Fourth Amendment Effective Date."
SECTION II.1.2 The sixth recital of the Existing Credit Agreement is
hereby amended by inserting the phrase "and Additional Term Loans"
immediately after the phrase "make Revolving Loans" appearing in clause (vi)
thereof.
SECTION II.2 AMENDMENTS TO ARTICLE I. Article I of the Existing
Credit Agreement is hereby amended as follows.
SECTION II.2.1 Section 1.1 of the Existing Credit Agreement is
hereby amended by inserting the following definitions in such Section in the
appropriate alphabetical sequence:
"ADDITIONAL TERM LOANS" is defined in CLAUSE (b) of SECTION
2.1.1.
"ADDITIONAL TERM LOAN COMMITMENT" is defined in CLAUSE (b) of
SECTION 2.1.1.
"ADDITIONAL TERM LOAN COMMITMENT AMOUNT" means, on any date,
$7,500,000.
"ADDITIONAL TERM LOAN COMMITMENT TERMINATION DATE" means the
earliest of:
(a) August 6, 1999 (if the Additional Term Loans
have not been made on or prior to such date);
(b) the Fourth Amendment Effective Date
(immediately after the making of the Additional Term Loans
on such date); and
(c) the date on which any Commitment Termination
Event occurs.
Upon the occurrence of any event described in CLAUSE (b) or
(c), the Additional Term Loan Commitment shall terminate
automatically and without any further action.
"ADDITIONAL TERM NOTE" means a promissory note of the
Borrower payable to the order of any Lender, in form and substance
satisfactory to the Administrative Agent (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 Additional Term Loans, and also means all
other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"AMENDMENT NO. 4" means Amendment No. 4, dated as of August
6, 1999, to Second Amended and Restated Credit Agreement, among the
Borrower, Aegis and the Lenders, and consented to by each of the
Borrower's Subsidiaries.
"EXISTING TERM NOTE" means a promissory note of the
Borrower payable to the order of any Lender, in form and substance
satisfactory to the Administrative Agent (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 Existing Term Loans, and also means all
other promissory notes accepted from time to time in substitution
therefor or renewal thereof.
"FOURTH AMENDMENT EFFECTIVE DATE" is defined in Section 4.1 of
Amendment No. 4.
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"PARENT GUARANTY" means the guaranty executed and delivered
by the Parent pursuant to the terms of Amendment No. 4, in form and
substance satisfactory to the Administrative Agent, as amended,
supplemented, amended and restated or otherwise modified from time
to time.
SECTION II.2.2 Section 1.1 of the Existing Credit Agreement is
hereby amended by amending and restating the following definitions in such
Section so that they read in their entireties as follows:
"PERCENTAGE" means, relative to any Lender, the applicable
percentage relating to Revolving Loans, Existing Term Loans,
Additional Term Loans or its aggregate percentage for all facilities
provided herein, as the case may be, as set forth opposite its name
on SCHEDULE VII hereto under the applicable column heading or set
forth in a Lender Assignment Agreement under the applicable column
heading, 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.
A Lender shall not have any Commitment to make Existing Term Loans,
Additional Term Loans or Revolving Loans (as the case may be) if its
percentage under the applicable column heading on SCHEDULE VII is
zero. 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.
"STATED MATURITY DATE" means, in the case of any (a)
Revolving Loan, Swing Line Loan or Existing Term Loan, June 30,
2003, and (b) Additional Term Loan, December 31, 1999.
"TERM LOANS" means, collectively, the Existing Term Loans
and the Additional Term Loans.
"TERM NOTE" means, as the context may require, an
Additional Term Note or an Existing Term Note.
SECTION II.2.3 Section 1.1 of the Existing Credit Agreement is
hereby amended by amending
(a) clauses (a) and (b) of the definition of "Applicable
Margin" by
(i) inserting the phrase "and each Additional Term
Loan" immediately after the phrase "each Revolving Loan" in
each place such phrase appears in such clauses, and
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(ii) inserting the phrase "and Additional Term
Loans" immediately after the phrase "Rate Revolving Loans"
in each place such phrase appears in such clauses (including
in each of the appropriate columns set forth below clause
(b));
(b) clauses (c) and (d) of the definition of "Applicable
Margin" by inserting the word "Existing" immediately before the word
"Term" in each place such word appears in such clauses (including in
each of the appropriate columns set forth below clause (d));
(c) the definition of "Guarantor" by inserting the phrase
"and the Parent" immediately after the phrase "other than Aegis"
appearing therein;
(d) the definition of "Guaranty" by inserting the phrase
"the Parent Guaranty," immediately before the phrase "the Aegis
Guaranty" appearing therein; and
(e) the definition of "Obligor" by inserting the phrase
"the Parent," immediately before the word "Aegis" appearing therein.
SECTION II.3 AMENDMENTS TO ARTICLE II. Article II of the Existing
Credit Agreement is hereby amended as follows.
SECTION II.3.1 Section 2.1.1 of the Existing Credit Agreement is
hereby amended by inserting an "(a)" prior to the initial sentence thereof
and adding a new clause (b) immediately before the last sentence of such
Section to read as follows:
"(b) Subject to compliance by the Borrower with the terms
hereof, in a single Borrowing occurring on the Fourth Amendment
Effective Date, each Lender with a Percentage in excess of zero of
the Additional Term Loan Commitment Amount will make Loans (relative
to such Lender, its "ADDITIONAL TERM LOANS") to the Borrower equal
to such Lender's Percentage of the aggregate amount of the Borrowing
of Additional Term Loans requested by the Borrower to be made on
such day (the commitment of each such Lender described in this
CLAUSE (b) is herein referred to as its "ADDITIONAL TERM LOAN
COMMITMENT")."
SECTION II.4 AMENDMENTS TO ARTICLE III. Article III of the Existing
Credit Agreement is hereby amended as follows.
SECTION II.4.1 Section 3.1.1 of the Existing Credit Agreement is
hereby amended by
(a) inserting the word "Existing" immediately before the
word "Term" appearing in clause (f) thereof; and
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(b) re-lettering existing clause (g) thereof to clause (h)
and inserting a new clause (g) to read as follows:
"(g) shall, on the Stated Maturity Date for
Additional Term Loans, make a scheduled repayment of the
then aggregate outstanding principal amount of all
Additional Term Loans."
SECTION II.4.2 The second sentence of Section 3.1.2 of the Existing
Credit Agreement is hereby amended in its entirety to read as follows:
"Mandatory prepayments pursuant to CLAUSE (c), (d) and (h) of
SECTION 3.1.1 shall be applied, to the extent of such prepayment,
FIRST, to the outstanding principal amount Existing Term Loans (pro
rata among the scheduled repayments in CLAUSE (f) of SECTION 3.1.1)
until paid in full; SECOND, to the outstanding principal amount of
Additional Term Loans until paid in full; and, THIRD, to a permanent
reduction in the Revolving Loan Commitment Amount."
SECTION II.5 AMENDMENT TO ARTICLE VII. Section 7.1.9 of the Existing
Credit Agreement is hereby amended in its entirety to read as follows:
"SECTION 7.1.9. USE OF PROCEEDS, ETC. The Borrower shall
apply the proceeds of
(a) the Revolving Loans made on and following the
Effective Date (i) to refinance certain existing
Indebtedness of a direct, wholly-owned subsidiary of Aegis,
in connection with the Transaction, (ii) for the general
corporate and working capital needs of the Borrower and the
Subsidiary Guarantors, (iii) to make Permitted Acquisitions,
(iv) to pay the transaction fees, costs and expenses
associated with Permitted Acquisitions, and (v) to pay
related Transaction fees and expenses; and
(b) the Additional Term Loans made on the Fourth
Amendment Effective Date for the general corporate and
working capital needs of the Borrower and the Subsidiary
Guarantors."
SECTION II.6 AMENDMENT TO ARTICLE XI. Clause (b) of Section 11.1 of
the Existing Credit Agreement is hereby amended by inserting the phrase "the
Parent, Aegis or" immediately before the phrase "any Guarantor from its
obligations" appearing in such clause.
SECTION II.7 SIGNATURE PAGES TO CREDIT AGREEMENT. The Signature
Pages to the Existing Credit Agreement are hereby amended by deleting the
phrases (and the corresponding percentages appearing after each such phrase)
"Revolving Loan Commitment", "Swing Line Loan Commitment", and "Term Loan
Commitment" in each place each such phrase appears thereon.
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SECTION II.8 SCHEDULE VII TO CREDIT AGREEMENT. The Existing Credit
Agreement is hereby amended by adding a new Schedule VII thereto in the form
of SCHEDULE VII hereto.
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ARTICLE III
LIMITED WAIVER
Subject to the terms of this Amendment, effective on the Fourth
Amendment Effective Date, and in reliance upon the representations and
warranties made herein and in each other Loan Document, by their signatures
below the Lenders hereby waive, until August 31, 1999, any Default resulting
from the non-compliance by the Borrower with any financial covenants
contained in Section 7.2.4 of the Credit Agreement. Except as expressly
provided in this Amendment (including the limited waiver set forth in this
ARTICLE III), each Loan Document shall continue in full force and effect in
accordance with their respective terms.
ARTICLE IV
CONDITIONS TO EFFECTIVENESS
SECTION IV.1 AMENDMENT EFFECTIVE DATE. This Amendment (and the
amendments, and modifications, and the limited waiver contained herein) shall
become effective, and shall thereafter be referred to as "AMENDMENT NO. 4",
on the date (the "FOURTH AMENDMENT EFFECTIVE DATE") when all of the
conditions set forth in this SECTION 4.1 have been satisfied.
SECTION IV.1.1 EXECUTION OF COUNTERPARTS. The Administrative Agent
shall have received counterparts of this Amendment, duly executed and
delivered on behalf of the Borrower, each of the Consenting Obligors and the
Lenders.
SECTION IV.1.2 RESOLUTIONS, ETC. The Agents shall have received from
each of the Borrower and the Parent,
(a) a certificate, dated the Fourth Amendment Effective
Date, of its Secretary, Assistant Secretary or Member, as
applicable, as to (i) resolutions of its Board of Directors or
Managing Members, as applicable, then in full force and effect
authorizing the execution, delivery and performance of this
Amendment and each other Loan Document to be executed by it, and,
with respect to the Parent, evidencing (in form satisfactory to the
Lenders) the Parent's ability to timely fulfill its obligations
under the Parent Guaranty, (ii) the incumbency and signatures of
those of its officers or members, as applicable, authorized to act
on its behalf with respect to each Loan Document to be executed by
it, upon which certificate each Lender may conclusively rely until
it shall have received a further certificate of the Secretary,
Assistant Secretary or Member, as applicable, of such Person
canceling or amending such prior certificate, and (iii) the full
force and validity of each Organic Document of the Borrower and (x)
with respect to the Parent, copies thereof and (y) with respect to
the Borrower, copies of any amendments or other modifications
thereto which have been effected since July 9, 1998; and
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(b) a copy of a good standing certificate, dated a dated
reasonably close to the Fourth Amendment Effective Date, for each
such Person.
SECTION IV.1.3 DELIVERY OF NOTES. The Administrative Agent shall
have received, for the account of each Lender making Additional Term Loans,
its Additional Term Notes, duly executed and delivered by the Borrower.
SECTION IV.1.4 PARENT GUARANTY. The Administrative Agent shall have
received executed counterparts of the Parent Guaranty, dated the date hereof,
duly executed by an Authorized Officer of the Parent.
SECTION IV.1.5 OPINION OF COUNSEL. The Administrative Agent shall
have received a legal opinion, dated the Fourth Amendment Effective Date and
addressed to the Administrative Agent, the Syndication Agent and each of the
Lenders, from New York counsel to the Obligors, satisfactory in form and
substance to the Administrative Agent.
SECTION IV.1.6 CLOSING FEES, EXPENSES, ETC. The Administrative Agent
shall have received for the account of each Lender, all fees, costs and
expenses due and payable pursuant to Sections 3.3 and 11.3 of the Credit
Agreement or payable hereunder, if then invoiced.
SECTION IV.1.7 LEGAL DETAILS, ETC. All documents executed or
submitted pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and their
counsel shall have received all information and such counterpart originals or
such certified or other copies or such materials, as the Administrative Agent
or its counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment shall be satisfactory to the
Administrative Agent and its counsel.
ARTICLE V
AFFIRMATION AND CONSENT
SECTION V.1 ACKNOWLEDGMENT AND REAFFIRMATION. Aegis, the Borrower
and each Consenting Obligor hereby reaffirms, as of the Fourth Amendment
Effective Date, (a) the covenants and agreements contained in each Loan
Document to which it is a party, including, in each case, as such covenants
and agreements may be modified by this Amendment and the transactions
contemplated hereby, (b) its guarantee of payment of the Obligations pursuant
to the applicable Guaranty, and (c) its obligations with respect to
collateral security under each other Loan Document to which it is a party.
SECTION V.2 REPRESENTATIONS AND WARRANTIES, ETC. Aegis, the Borrower
and each Consenting Obligor hereby certifies that, as of the date hereof (and
after giving effect to the limited waiver set forth in ARTICLE III), the
representations and warranties made by it contained in each Loan Document to
which it is a party are true and correct in all material respects with the
same effect as if
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made on the date hereof, except to the extent any such representation or
warranty refers or pertains solely to a date prior to the date hereof (in
which case such representation and warranty was true and correct in all
material respects as of such earlier date).
SECTION V.3 LOAN DOCUMENTS. Aegis, the Borrower and each Consenting
Obligor further confirms that each Loan Document to which it is a party (a)
is and shall continue to be in full force and effect and the same are hereby
ratified and confirmed in all respects, except that upon the occurrence of
the Fourth Amendment Effective Date, all references in such Loan Documents to
the "Credit Agreement", "Loan Documents", "thereunder", "thereof", or words
of similar import shall mean the Credit Agreement and the Loan Documents, as
the case may be, in each case after giving effect to the amendments and other
modifications provided for in this Amendment, (b) if such Loan Document
relates to collateral security, such document shall also expressly and
completely secure all Additional Term Loans and all Obligations related
thereto and (c) if such Loan Document relates to a guarantee, such document
shall also expressly and completely guarantee all Additional Term Loans and
all Obligations related thereto.
SECTION V.4 COURSE OF DEALING, ETC. Each Consenting Obligor hereby
acknowledges and agrees that the acceptance by each Lender of this document
shall not be construed in any manner to establish any course of dealing on
any Lender's part, including the providing of any notice or the requesting of
any acknowledgment not otherwise expressly provided for in any Loan Document
with respect to any future amendment, waiver, supplement or other
modification to any Loan Document or any arrangement contemplated by any Loan
Document.
ARTICLE VI
MISCELLANEOUS
SECTION VI.1 BORROWING REQUEST. The Borrower hereby requests from
each Lender that has a Percentage in excess of zero of the Additional Term
Loan Commitment a Borrowing of Additional Term Loans in an aggregate
principal amount of $7,500,000 on August 6, 1999 as a Base Rate Loan in an
amount equal to such Lender's Percentage with respect to the Additional Term
Loan Commitment. The Borrower hereby acknowledges that, pursuant to Section
5.2.2 of the Credit Agreement, each of the delivery of this Amendment (which
all parties hereto agree shall be deemed to be a Borrowing Request) and the
acceptance by the Borrower of the proceeds of the Loans requested hereby
constitute a representation and warranty by the Borrower that, on the date of
the making of such Loans (both immediately before and after giving effect
thereto and to the application of the proceeds thereof), subject to the
limited waiver set forth in ARTICLE III, all statements made in Section 5.2.1
of the Credit Agreement are true and correct.
SECTION VI.2 CROSS-REFERENCES. References in this Amendment to any
Article or Section are, unless otherwise specified or otherwise required by
the context, to such Article or Section of this Amendment.
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SECTION VI.3 LOAN DOCUMENT PURSUANT TO CREDIT AGREEMENT. This
Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall be construed, administered and applied in accordance with all of the
terms and provisions of the Credit Agreement.
SECTION VI.4 SUCCESSORS AND ASSIGNS. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION VI.5 COUNTERPARTS. This Amendment may be executed by the
parties hereto in several counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SECTION VI.6 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the signatories hereto have caused this
Amendment to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
BORROWER:
IQI, INC.
By:
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Title:
AEGIS:
AEGIS COMMUNICATIONS GROUP,
INC.
By:
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Title:
CONSENTING OBLIGORS:
INTERSERV SERVICES CORP.
By:
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Title:
LEXI INTERNATIONAL, INC.
By:
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Title:
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CHILDREN'S EDUCATIONAL
PUBLISHING CORPORATION
By:
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Title:
ADVANCED TELEMARKETING CORP.
By:
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Title:
AURIC BROKERAGE, INC.
By:
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Title:
AURIC MANAGEMENT, INC.
By:
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Title:
LENDERS:
THE BANK OF NOVA SCOTIA
By:
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Title:
CREDIT SUISSE FIRST BOSTON
By:
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Title:
By:
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Title:
SCHEDULE VII
PERCENTAGES AFTER GIVING EFFECT TO AMENDMENT NO. 4
REVOLVING LOAN EXISTING TERM
COMMITMENT LOANS ADDITIONAL TERM LOANS AGGREGATE PERCENTAGE
------------------------------ -------------------- ----------------------- -----------------------
The Bank of Nova Scotia 71.000000% 48.000000% 50.000000% 56.721795%
Credit Suisse First
Boston 28.333333% 51.501283% 50.000000% 43.278205%
