AMENDMENT NO. 2
This Amendment No. 2, dated as of October 22, 1999, is to the Series F
Senior Voting Convertible Preferred Stock Purchase and Registration Rights
Agreement, dated August 25, 1999, by and among Aegis Communications
Group, Inc., a Delaware corporation, 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, ▇▇▇▇▇▇ Equity Investors III, L.P., a Delaware limited partnership,
TC Co-Investors, LLC, a Delaware limited liability company, ITC Services
Company, ▇▇▇▇▇▇ ▇▇▇▇▇, and trusts created by ▇▇▇▇▇▇ ▇▇▇▇▇ as both grantor and
trustee under Article Fourth of The ▇▇▇▇▇▇ ▇▇▇▇▇ 1995 Grantor Retained Annuity
Trust, dated December 29, 1995, a trust organized under the laws of New Jersey,
as amended by a Letter Agreement, dated August 26, 1999, among the Company, the
Questor Investors and the Existing Investors (such agreement, as amended, the
"PREFERRED STOCK AGREEMENT"). Any capitalized term used herein without
definition shall have the meaning assigned thereto in the Preferred Stock
Agreement.
1. AMENDMENT TO DEFINITIONS OF THE PREFERRED STOCK AGREEMENT. Section 1 of
the Preferred Stock Agreement is hereby amended by adding the following
definitions, each in alphabetical order:
"EBITDA" means the sum (without duplication), derived from the Company's
unaudited consolidated statement of operations included in the September
Financial Statements, of (A) Net Income; (B) the amount deducted, in
determining Net Income, representing amortization; (C) the amount deducted,
in determining Net Income, of all income taxes (whether paid or deferred);
(D) the amount deducted, in determining Net Income, representing Interest
Expense; and (E) the amount deducted, in determining Net Income,
representing depreciation of assets.
"INTEREST EXPENSE" means, for any period, the aggregate consolidated
interest expense of the Company for such period, determined in accordance
with generally accepted accounting principles consistently applied.
"NET INCOME" means the consolidated net income of the Company reflected on
the unaudited statement of operations included in the September Financial
Statements, but (i) excluding any extraordinary or nonrecurring gains and
(ii) including any negative prior period adjustments.
"NEW FINANCIAL STATEMENTS" means the Company's unaudited statements of
operations for each of the months ended July and August 1999.
"SEPTEMBER FINANCIAL STATEMENTS" means the Company's unaudited balance sheet
and statements of operations and cash flows for the month ended and the
three months ended September 30, 1999 prepared in accordance with GAAP
applied on a consistent basis."
2. AMENDMENT TO REPRESENTATIONS AND WARRANTIES OF THE PREFERRED STOCK
AGREEMENT. Section 4(h) of the Preferred Stock Agreement is hereby amended and
restated to read in its entirety as follows:
"(h) FINANCIAL STATEMENTS. The Company has furnished to the Questor
Investors a complete and correct copy of the following financial statements
(collectively, including all notes thereto, the "FINANCIAL STATEMENTS"):
(i) the Company's audited balance sheet, statements of operations, changes
in stockholders' equity and cash flows for the fiscal year ended
December 31, 1998 and for the twelve-month period then ended (including all
notes thereto, the "AUDITED FINANCIAL STATEMENTS"), and (ii) the Company's
unaudited balance sheet (the "BALANCE SHEET") as of August 31, 1999 (the
"BALANCE SHEET DATE") and statement of operations for the eight month period
ended as of the Balance Sheet Date (the "MOST RECENT FINANCIAL STATEMENTS").
The Audited Financial Statements have been prepared from the books and
records of the Company and present fairly the financial condition, results
of operations, changes in stockholders equity and cash flows of the Company,
as of the dates and for the periods indicated, and have been prepared in
accordance with generally accepted accounting principles ("GAAP")
consistently applied. The Most Recent Financial Statements have been
prepared from the
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books and records of the Company and present fairly the financial condition
and results of operations of the Company, as of the dates and for the
periods indicated, and have been prepared in accordance with GAAP
consistently applied, except that the Most Recent Financial Statements lack
footnotes and other presentation items and are subject to normal year-end
audit adjustments, which are not reasonably expected to be material in the
aggregate."
3. AMENDMENT TO REPRESENTATIONS AND WARRANTIES OF THE PREFERRED STOCK
AGREEMENT. Section 4(p) of the Preferred Stock Agreement is hereby amended and
restated to read in its entirety as follows:
"(p) ABSENCE OF CERTAIN CHANGES. Except as set forth in Section
(p)(i) and (ii) of the Disclosure Schedules, since the Balance Sheet Date,
neither the Company nor any of its Subsidiaries has made or suffered any
change in, or condition affecting, their respective condition (financial or
otherwise), properties, profitability or operations other than changes,
events or conditions in the ordinary course, none of which, individually or
in the aggregate, has had, or which the Company can reasonably foresee will
have, a Material Adverse Effect; PROVIDED, HOWEVER, that, subject to the
immediately succeeding proviso, any such change resulting from the loss of
(i) any customer or client or customer or client program since the Balance
Sheet Date will be viewed in the aggregate after taking into account any
customer or client or customer or client programs gained since the Balance
Sheet Date; PROVIDED FURTHER that the loss of (i) any customer or client set
forth on Section (p)(iii) of the Disclosure Schedules, or (ii) any program
of any such customer or client the loss of which program in itself could
reasonably be expected to have a Material Adverse Effect, will in each case
be deemed to constitute a Material Adverse Effect."
4. AMENDMENT REGARDING THE DATE OF THE REPRESENTATIONS AND WARRANTIES OF
THE PREFERRED STOCK AGREEMENT. The representations and warranties of the
Company, the Questor Investors and the Existing Investors contained in Sections
4 (except for subsections 4(s) and 4(t) thereof), 5 and 6 of the Preferred Stock
Agreement, respectively, shall be deemed to have been made as of the date
hereof.
5. AMENDMENT TO THE TERMINATION PROVISION OF THE PREFERRED STOCK
AGREEMENT. Section 21(b) of the Preferred Stock Agreement is hereby amended and
restated to read in its entirety as follows:
"(b)(i) by the Questor Investors or the Company if the Closing has not
occurred on or before January 31, 2000, and this Agreement has not
previously been terminated; PROVIDED, that the right to terminate the
Agreement under this Section 21(b)(i) shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or before
such date; or (ii) by the Questor Investors if the Company fails to deliver
the September Financial Statements within the time period specified in
Section 22(t) or to achieve the Minimum EBITDA (as hereinafter defined)."
6. AMENDMENT TO COVENANTS OF THE PREFERRED STOCK AGREEMENT. Section 22 of
the Preferred Stock Agreement is hereby amended by adding the following to the
end thereof:
"(t) ADDITIONAL FINANCIAL STATEMENTS AND MINIMUM EBITDA. The Company
(i) has delivered to the Questor Investors the New Financial Statements and
(ii) shall deliver as soon as practicable, but in any event no later than
the first to occur of November 15, 1999 and the date upon which the Company
files with the Commission its Form 10-Q for the quarter ended September 30,
1999, the September Financial Statements. The New Financial Statements have
been, and the September Financial Statements shall be, prepared from the
books and records of the Company. The New Financial Statements present, and
the September Financial Statements shall present, fairly the financial
condition, results of operations, changes in stockholders equity and cash
flows of the Company, as of the dates and for the periods indicated, and
have been, or shall be, respectively, prepared in accordance with GAAP
consistently applied, except that (i) the New Financial Statements lack, and
the September Financial Statements shall lack, footnotes and other
presentation items and are, or shall be, respectively, subject to normal
year-end audit adjustments, which are not reasonably
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expected to be material in the aggregate, and (ii) the New Financial
Statements include, and the September Financial Statements in any event
shall include, all negative prior period adjustments. The
September Financial Statements shall include a line item that correctly
calculates the Company's EBITDA for the three months ended September 30,
▇▇▇▇ (▇▇▇ "▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇"). The Third Quarter EBITDA shall not be
less than negative $150,000 without regard to any materiality adjustments
otherwise permitted under GAAP consistently applied (the "MINIMUM EBITDA").
Without limiting Section 22(r) hereof, the Questor Investors may engage
PricewaterhouseCoopers, LLP ("PWC") to review the September Financial
Statements, including the calculation of the Third Quarter EBITDA, which
review shall be completed no later than 10 days following the date upon
which the September Financial Statements are first delivered to the Questor
Investors. In connection with any such review by PWC, the Questor Investors
or any other representative of the Questor Investors, the Company shall, and
shall cause its auditors to, give PWC full access to its management and to
its books and records and any documentation used or developed in connection
with the preparation of the September Financial Statements."
7. AMENDMENT TO ABSENCE OF CERTAIN CHANGES DISCLOSURE SCHEDULE. Section
(p) of the Disclosure Schedules to the Preferred Stock Agreement is amended by
adding the following thereto immediately prior to the section entitled "SELECTED
CLIENTS", which section shall be renumbered as appropriate:
"(i) CHANGE IN FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company previously delivered to the Questor Investors the report
entitled "Aegis Communications Group, Inc., August 1999 Financial
Package, Presented to Questor, September 29, 1999" regarding the results
of operations in July and August 1999 and projections for expected
results of operations. The financial statements and projections included
in such report reflect certain adverse changes in the financial
condition, profitability and operations of the Company.
(ii) NASDAQ DELISTING
On September 17, 1999, Nasdaq informed the Company that the Company no
longer met certain minimum requirements for continued listing on the
Nasdaq National Market System or The Nasdaq SmallCap Market, and
therefore, the Nasdaq had determined that continued listing was no longer
warranted. Accordingly, the Company' s common stock began trading
over-the-counter on the National Association of Securities Dealers'
Electronic Bulletin Board effective September 20, 1999. The Company is in
the process of appealing the Nasdaq decision."
8. AMENDMENT TO THE CERTIFICATE OF DESIGNATION. The definition of
"Interest Expense" in Section 1 of the Series F Preferred Stock Certificate of
Designation, Exhibit A to the Preferred Stock Agreement, is hereby amended and
restated to read in its entirety as follows:
"INTEREST EXPENSE means, for any period, the aggregate consolidated interest
expense of the Company for such period, determined in accordance with
generally accepted accounting principles consistently applied."
9. AMENDMENT TO THE CERTIFICATE OF DESIGNATION. Section 7(d) of the
Series F Preferred Stock Certificate of Designation, Exhibit A to the Preferred
Stock Agreement, is hereby amended and restated to read in its entirety as
follows:
"(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
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the Investors shall engage PricewaterhouseCoopers, LLP ("PWC"), 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."
10. FULL FORCE AND EFFECT. Except as provided in this Amendment No. 1, the
Preferred Stock Agreement shall continue in full force and effect in accordance
with the provisions thereof.
11. GOVERNING LAW. This Amendment No. 2 shall be governed by, and construed
in accordance with, the laws of the State of Delaware without giving effect to
the conflicts of laws principles thereof.
12. MISCELLANEOUS. The section headings contained in this Amendment No. 2
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Amendment No. 2. This Amendment No. 2 may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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[SIGNATURE PAGE OF AMENDMENT NO. 2 TO THE SERIES F
CONVERTIBLE PREFERRED STOCKPURCHASE AND REGISTRATION
RIGHTS AGREEMENT]
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.
COMPANY:
AEGIS COMMUNICATIONS GROUP, INC.,
a Delaware corporation
By:
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Name:
Title:
Address: Aegis Communications Group, Inc.
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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:
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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 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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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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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,
a Delaware corporation
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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