August 26, 1999
The persons set forth on the signature
lines to this letter agreement
Ladies and Gentlemen:
We are each parties to that certain Series F Senior Voting Convertible
Preferred Stock Purchase and Registration Rights Agreement dated as of
August 25, 1999 by and among Aegis Communications Group, Inc. (the "COMPANY"),
the Questor Investors (as defined below) and certain existing stockholders of
the Company identified therein (the "STOCK AGREEMENT"). Terms used in this
letter that are not otherwise defined will have the meanings given to them in
the Stock Agreement.
1. USE OF PROCEEDS The parties agree that notwithstanding the covenant of
the Company to use the proceeds from the sale of the Shares as set forth in
Section 20 of the Stock Agreement, the proceeds from such sale shall be used
exclusively for: (a) the reduction of outstanding indebtedness under the Credit
Agreement; (b) the repurchase on the Closing Date of the Company's Series D and
Series E Preferred Stock issued and outstanding prior to the Closing Date to the
extent (i) permitted by the Bank Approval or pursuant to the terms of the
Refinancing and (ii) approved by the Questor Investors in their sole discretion;
(c) the repurchase of each share of the Series B Preferred Stock tendered to the
Company on or prior to the Closing; and (d) the payment of fees and expenses in
connection therewith and the transactions contemplated by the Stock Agreement
(the "REVISED USE OF PROCEEDS"). In the event that any Series D or Series E
Preferred Stock is repurchased on or immediately following the Closing Date in
accordance with clause (b), the Series E Preferred Stock shall be repurchased in
full before any portion of the Series D Preferred Stock may be repurchased.
2. BANK APPROVAL; USE OF PROCEEDS. Section 17(a)(x) of the Stock Agreement
provides that the Questor Investors' obligations at Closing are subject to the
Company's having obtained the Bank Approval or consummated the Refinancing, on
terms reasonably satisfactory to the Questor Investors, and Section 17(a)(xvi)
provides that such obligations are conditioned on holders of all outstanding
shares of Series D and Series E Preferred Stock having tendered their Shares at
the Closing on terms reasonably satisfactory to the Questor Investors. Section
17(b)(v) of the Stock Agreement provides that the Company's obligations at
Closing are subject to the Company having obtained the Bank Approval or
consummated the Refinancing, on terms reasonably satisfactory to the Company.
Notwithstanding the foregoing:
(A) The Questor Investors hereby agree that if (i) as of the Closing,
all other conditions to their obligations under the Stock Agreement (as
modified by this letter agreement) have been satisfied (or otherwise waived
in writing by the Questor Investors in their sole discretion), (ii) the Bank
Approval has been obtained or a Refinancing has been consummated, and
(iii) upon the Closing of the transactions contemplated by the Stock
Agreement and immediately following the Revised Use of Proceeds, there will
be at least $15 million of immediately available funds under the revolving
credit facility under the Credit Agreement or under the credit agreement
entered into in connection with the Refinancing, after taking account of all
limitations on borrowing thereunder, including, without limitation, the
borrowing base, the Questor Investors agree that the conditions set forth in
Section17(a)(x) and 17(a)(xvi) will be deemed to be fulfilled, and
(B) The Company hereby agrees that if (i) as of the Closing, all other
conditions to the Company's obligations under the Stock Agreement (as
modified by this letter agreement) have been satisfied (or otherwise waived
in writing by the Company in its sole discretion), (ii) upon the Closing of
the transactions contemplated by the Stock Agreement, the Bank Approval has
been obtained, or a
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Refinancing has been consummated, and (iii) upon the Closing of the
transactions contemplated by the Stock Agreement and immediately following
the Revised Use of Proceeds there will be at least $15,000,000 of
immediately available funds under the revolving credit facility under the
Credit Agreement or under the credit agreement entered into in connection
with the Refinancing, after taking account of all limitations on borrowing
thereunder, including, without limitation, the borrowing base, the Company
agrees that the condition set forth in Section 17(b)(v) will be deemed to be
fulfilled.
The term "Bank Approval" as used in this letter agreement shall have the
same meaning as in the Stock Agreement, but all references in the definition
thereof in the Stock Agreement to "this Agreement" and to the "Use of Proceeds"
shall be deemed to be references to the Stock Agreement as modified by this
letter agreement and to the Revised Use of Proceeds, respectively.
3. CHANGES TO CERTIFICATE OF DESIGNATION. The Questor Investors, the
Company and ▇▇▇▇▇▇ Equity Investors III, L.P. ("▇▇▇▇▇▇") hereby agree that if
all shares of Series B, Series D and Series E Preferred Stock issued by the
Company prior to the Closing are not redeemed or repurchased at or prior to the
Closing, the Questor Investors, the Company and ▇▇▇▇▇▇ will work together in
good faith to revise the Certificate of Designations for the Series F Preferred
Stock (the "CERTIFICATE") to reflect that shares of Series B, Series D and/or
Series E Preferred Stock will remain outstanding, and to provide that the
Series F Preferred Stock will have priority and preference over the Series D and
Series E Preferred Stock, and will be subordinate to the Series B Preferred
Stock with respect to dividends and liquidation rights.
4. NEGOTIATIONS. The Company, ▇▇▇▇▇▇ and the Questor Investors each agree
to use their reasonable commercial efforts in obtaining the Bank Approval or in
consummating the Refinancing in accordance with the terms of the Stock Agreement
as modified by this letter agreement, including as to the Revised Use of
Proceeds. The Company and ▇▇▇▇▇▇ will (a) permit the Questor Investors to
participate in all negotiations relating to the Bank Approval (including the
negotiation of all amendments to the Credit Agreement) or the Refinancing,
including all meetings and pre-scheduled telephone conferences and, to the
extent reasonably practicable, telephone calls in connection therewith and will
promptly apprise the Questor Investors of all developments with respect to such
negotiations to the extent the Questor Investors have not so participated,
(b) will provide or make arrangements to provide the Questor Investors with
copies of all documents prepared or distributed in connection therewith at the
same time as they are received by the Company, ▇▇▇▇▇▇ or the lender banks, as
the case may be; (c) consult with the Questor Investors prior to entering into
any amendments to the Credit Agreement or any agreements in connection with the
Refinancing, and will take into account its advice and recommendations relating
to the terms of any such amendment or agreement.
5. REPURCHASE OF SERIES D AND SERIES E PREFERRED STOCK. To the extent any
or all of the Series D Preferred Stock or Series E Preferred Stock is not
repurchased by the Company on or prior to the Closing Date, the Certificate of
Designation of the Series D and Series E Preferred Stock will be amended
immediately following the Closing to provide that (a) the Redemption Price (as
defined therein) will be the greater of (i) the Redemption Price currently
provided in the Certificate of Designations, and (ii) the Common Stock Fair
Market Value (as therein defined) of the Series D and Series E Preferred Stock
on an as converted basis as of a date five days prior to the Redemption Date (as
therein defined), (b) to permit the Series D Preferred Stock and the Series E
Preferred Stock to be redeemed in whole or in part and separately or together,
subject only to the Company having sufficient and lawful funds to redeem the
Series D Preferred Stock and the Series E Preferred Stock called for redemption
and (c) to provide that the Series F Preferred Stock will have priority over the
Series D and Series E Preferred Stock with respect to dividends and liquidation
rights.
6. REPAYMENT OF NOTES. If the Company shall repay prior to the stated
maturity thereof, in whole or in part, that certain Promissory Note, dated as of
December 17, 1997, made by IQI, Inc. payable to the Blank Trust, in the
principal amount of $191, 400 and/or that certain Promissory Note, dated as of
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December 17, 1997, made by IQI, Inc. payable to Blank, in the principal amount
of $808,600, then the Company will immediately prior to such repayment, amend
that certain Stock Purchase Warrant, dated as of December 17, 1997, issued by
IQI, Inc. to the Blank Trust, and that certain Stock Purchase Warrant, dated as
of December 17, 1997, issued by IQI, Inc. to Blank, by deleting Section
2(i) from each such warrant.
7. EFFECT OF AGREEMENT. This Agreement modifies and amends the Stock
Agreement and, to the extent that there is any conflict between this letter
agreement and the Stock Agreement, this letter agreement shall govern.
8. CONFIDENTIALITY. This letter shall be subject to the confidentiality
restrictions set forth in Section 22(n) of the Stock Agreement, to the same
extent as if a part thereof.
9. CHOICE OF LAW. This letter agreement shall be governed by and construed
in accordance with the internal laws (and the conflicts of law) of the State of
Delaware.
Please execute this letter below to evidence your agreement to the
foregoing.
Very truly yours,
QUESTOR PARTNERS FUND II, L.P.
a Delaware limited partnership
By: Questor General Partner II, L.P.
its General Partner
By: Questor Principal II, Inc.
its General Partner
By:
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Name:
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Title:
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Address: c/o Organization Services, Inc.
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
Questor Management Company
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
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QUESTOR SIDE-BY-SIDE PARTNERS II, L.P.
a Delaware limited partnership
By: Questor Side-by-Side Partners II
3(c)(1), L.P.
By:
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Name:
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Title:
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Address: c/o Organization Services, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
Questor Management Company
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
QUESTOR SIDE-BY-SIDE PARTNERS II
3(C)(1), L.P. a Delaware limited
partnership
By: Questor Principals II, Inc.
By:
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Name:
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Title:
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Address: c/o Organization Services, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
Questor Management Company
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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AEGIS COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By:
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Name:
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Title:
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Address: ATC Communications Group, Inc.
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TC CO-INVESTORS, LLC
a Delaware limited liability company
By: TC Management Partners, LLC
a Delaware limited liability company,
its General Partner
By:
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Name:
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Title:
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇ EQUITY INVESTORS III, L.P.
a Delaware limited partnership
By: TC Equity Partners, LLC
a Delaware limited liability company,
its General Partner
By:
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Name:
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Title:
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Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
ITC SERVICES COMPANY
By:
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Name:
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Title:
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Address:
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▇▇▇▇▇▇ ▇▇▇▇▇
By:
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Name:
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Title:
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Address:
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TRUSTS CREATED BY ▇▇▇▇▇▇ ▇▇▇▇▇ AS BOTH
GRANTOR AND TRUSTEE UNDER ARTICLE
FOURTH OF THE ▇▇▇▇▇▇ ▇▇▇▇▇ 1995
GRANTOR RETAINED ANNUITY TRUST
a New Jersey trust
By:
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Trustee
Address:
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