Exhibit 10.28

 

--------------------------------------------------------------------------------

DEBT CONVERSION AGREEMENT

BY AND BETWEEN

AEGIS COMMUNICATIONS GROUP, INC.

AND

WORLD FOCUS INCORPORATED

Dated as of November 30, 2005

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

          Page

ARTICLE 1 TERMS OF DEBT CONVERSION

   2

        1.1

  

Conversion and Release.

   2

        1.2

  

Time and Place of Closing.

   2

ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF COMPANY

   2

        2.1

  

Organization, Standing, and Power.

   2

        2.2

  

Authority of the Company; No Breach By Agreement.

   3

        2.3

  

Capital Stock and Conversion Shares

   3

        2.4

  

Litigation.

   3

        2.5

  

Brokers and Finders.

   4

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF WORLD FOCUS

   4

        3.1

  

Organization, Standing, and Power.

   4

        3.2

  

Title to Promissory Notes.

   4

        3.3

  

Authority; No Breach By Agreement.

   4

        3.4

  

Litigation.

   5

        3.5

  

Brokers’ Fees.

   5

        3.6

  

Investment Representations.

   5

ARTICLE 4 CONDUCT OF BUSINESS PENDING CONSUMMATION

   6

        4.1

  

Affirmative Covenants of the Company.

   6

        4.2

  

Material Developments.

   6

ARTICLE 5 ADDITIONAL AGREEMENTS

   7

        5.1

  

Agreement as to Efforts to Consummate.

   7

        5.2

  

Filings with State Office.

   7

        5.3

  

Confidentiality.

   7

        5.4

  

Press Releases; Disclosure.

   7

        5.5

  

Meeting of Stockholders.

   8

        5.6

  

Preparation of Proxy Statement.

   8

ARTICLE 6 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

   9

        6.1

  

Conditions to Obligations of Each Party.

   9

        6.2

  

Conditions to Obligations of World Focus.

   9

        6.3

  

Conditions to Obligations of the Company.

   10

ARTICLE 7 TERMINATION

   10

        7.1

  

Termination.

   10

        7.2

  

Effect of Termination.

   11

--------------------------------------------------------------------------------

ARTICLE 8 MISCELLANEOUS

   11

        8.1

   Survival of Representations.    11

        8.2

   Definitions.    11

        8.3

   Expenses.    14

        8.4

   Entire Agreement.    14

        8.5

   Amendments.    14

        8.6

   Waivers.    14

        8.7

   Assignment.    15

        8.8

   Notices.    15

        8.9

   Governing Law; Jurisdiction and Venue; WAIVER OF TRIAL BY JURY.    16

        8.10

   Counterparts.    16

        8.11

   Interpretations.    16

        8.12

   Severability.    16

--------------------------------------------------------------------------------

DEBT CONVERSION AGREEMENT

THIS DEBT CONVERSION AGREEMENT (this “Agreement”) is made and entered into as of
November 30, 2005, by and between Aegis Communications Group, Inc. (“Company”),
a Delaware corporation, and World Focus, an affiliate of Essar Global Limited
(“World Focus”). Certain capitalized terms used in this Agreement are defined in
Section 8.1 of this Agreement.

Preamble

WHEREAS, World Focus is the holder of a series of promissory notes issued by the
Company, copies of which are attached hereto (the “Promissory Notes”);

WHEREAS, the outstanding principal and interest due and payable under the
Promissory Notes as of November 14, 2005 is $18,283,690, and such Promissory
Notes will continue to accrue interest until the closing of the Debt Conversion
(as defined below);

WHEREAS, World Focus, and its affiliates, own a majority of the issued and
outstanding Common Stock of the Company, par value $.01 per share (the “Common
Stock”), which is the only outstanding class of capital stock of the Company;

WHEREAS, World Focus and its affiliates have proposed that World Focus acquire
shares of Common Stock in exchange for cancellation of all outstanding principal
and accrued interest amounts due or which may become due under the Promissory
Notes (the “Debt Conversion”);

WHEREAS, the Board of Directors of the Company (the “Board”) has determined it
to be in the best interests of the Company to consummate the Debt Conversion on
fair and reasonable terms and has appointed a special committee of independent
and disinterested directors to undertake consideration of the Debt Conversion
(the “Special Committee”);

WHEREAS, the Board has delegated to the Special Committee full and complete
authority to negotiate and determine whether to approve the terms of the Debt
Conversion, with full power and authority to retain such independent legal
counsel and financial advisors as the Special Committee may, in its sole
discretion, deem appropriate and necessary to discharge the duties delegated to
it by the Board;

WHEREAS, in connection with its consideration of the Debt Conversion, the
Special Committee retained Legg Mason Wood Walker, Incorporated (“Legg Mason”)
to provide the Special Committee with assistance in evaluating the terms of the
Debt Conversion and, to the extent appropriate, provide it with an opinion as to
the fairness, from a financial point of view, of the Conversion Price to the
Company;

WHEREAS, the Special Committee has received the opinion of Legg Mason to the
effect that, as of November 22, 2005, the Conversion Price is fair, from a
financial point of view, to the Company (the “Fairness Opinion”);

WHEREAS, the Special Committee has reviewed the Fairness Opinion;

WHEREAS, the Special Committee, based on, among other things, its review of the
Fairness Opinion and of the other terms and conditions of the Debt Conversion,
has determined that it would be in the best interests of the stockholders of the
Company to convert the outstanding principal amount of the Promissory Notes and
all interest accrued and unpaid as of the Closing Date into shares of Common
Stock at the Conversion Price.

--------------------------------------------------------------------------------

NOW, THEREFORE, in consideration of the above, and the mutual warranties,
representations, covenants, and agreements set forth herein, the Parties agree
as follows:

ARTICLE 1

TERMS OF DEBT CONVERSION

1.1 Conversion and Release.

(a) Subject to the terms and conditions of this Agreement, at the Closing, World
Focus shall deliver the Promissory Notes free and clear of all Liens, other than
those transfer restrictions imposed by applicable securities Laws, in exchange
for such number of shares of the Common Stock determined as set forth in the
next succeeding sentence. On the Closing Date, the Promissory Notes shall be
converted into that number of shares of Common Stock (the “Conversion Shares”)
determined by dividing (x) the sum of the outstanding principal amount of the
Promissory Notes plus all interest accrued and unpaid as of the Closing Date by
(y) the Conversion Price. No fractional Conversion Shares shall be issued in
connection with the Debt Conversion, but in lieu of such fractional shares the
Company shall make a cash payment therefor rounded up to the next one cent.

(b) At Closing, the Company shall deliver to World Focus, against receipt of the
Promissory Notes free and clear of all Liens, other than those transfer
restrictions imposed by applicable securities Laws, a stock certificate
representing the Conversion Shares. Upon receipt by World Focus of a stock
certificate representing the Conversion Shares in accordance with
Section 1.1(a), World Focus hereby (i) agrees that such stock certificates shall
constitute full and final satisfaction of the amounts outstanding under the
Promissory Notes and (b) irrevocably releases and discharges the Company and its
Subsidiaries from any and all claims and demands it may have against the Company
and its Subsidiaries pursuant to the terms of the Promissory Notes or otherwise
in connection with the Promissory Notes.

1.2 Time and Place of Closing.

The transactions contemplated by this Agreement shall take place at a closing
(the “Closing”) at the offices of Pepper Hamilton LLP, 3000 Two Logan Square,
Eighteenth & Arch Streets, Philadelphia, PA 19103, commencing at 9:00 A.M. on
the third (3rd) Business Day following the satisfaction or waiver of the
conditions set forth in Article 6 (other than those conditions which are to be
satisfied by delivery or performance at the Closing) or at such other time and
place as the Company and World Focus may mutually agree (the “Closing Date”).

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF COMPANY

The Company hereby represents and warrants on the date of this Agreement to
World Focus as follows:

2.1 Organization, Standing, and Power.

The Company is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Delaware, and has the requisite
corporate power and authority to carry on its business as now conducted and to
own, lease and operate its assets. The Company is duly qualified or licensed to
transact business as a foreign corporation in good standing in the States of the
United States and foreign jurisdictions where the character of its assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect.

 

2

--------------------------------------------------------------------------------

2.2 Authority of the Company; No Breach By Agreement.

(a) The Company has the requisite corporate power and authority necessary to
execute and deliver this Agreement, to perform its obligations under this
Agreement and to consummate the transactions contemplated hereby, all in
accordance with this Agreement. The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated herein have been
duly and validly authorized by all necessary corporate action in respect thereof
on the part of the Company, with the exception of the approval and adoption by
the Company’s stockholders of an amendment to the Certificate of Incorporation
(the “Stockholder Approval”) to increase the number of shares of Common Stock
that the Company is authorized to issue thereunder from 800,000,000 to
2,000,000,000 (the “Certificate of Amendment”).

(b) Assuming the due authorization and execution of this Agreement by World
Focus, this Agreement represents a legal, valid, and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other Laws affecting creditors’ rights generally and except
insofar as the availability of equitable remedies may be limited by applicable
Law.

(c) Neither the execution and delivery of this Agreement by the Company, nor the
consummation by the Company of the transactions contemplated hereby, nor
compliance by the Company with any of the provisions hereof, (i) conflicts with
or results in a breach of any provision of the Company’s Certificate of
Incorporation or bylaws, or (ii) constitutes or results in a default under, or
require any Consent pursuant to, any Law or Order applicable to the Company.

(d) Except for (i) the filing of the Proxy Statement with the SEC, and (ii) the
filing and recordation of the Certificate of Amendment as required by the DGCL,
no notice to, filing with, or Consent of, any Regulatory Authority is necessary
to be provided, made or obtained by the Company for the consummation by the
Company of the transactions contemplated in this Agreement, except where the
failure to provide, make or obtain such notifications, filings or Consents is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect.

2.3 Capital Stock and Conversion Shares

(a) The capital stock of the Company consists of: (i) 800,000,000 shares of
authorized Common Stock, of which (A) 660,053.022 shares are issued and
outstanding, and (B) 475,600 are issued and held in the Company’s treasury; and
(ii) 2,000,000 shares of authorized preferred stock, $0.01 par value per share,
of which (A) 29,778 shares of Series B Preferred Stock are issued and
outstanding, and (B) none of which are otherwise reserved for issuance upon
exercise or conversion of outstanding options, warrants, convertible securities
or other rights to purchase or otherwise obtain shares of preferred stock.

(b) Assuming Stockholder Approval has been obtained and the Certificate of
Amendment has been filed and recorded with the Secretary of State of the State
of Delaware, the Conversion Shares, when issued and delivered in accordance with
the terms of this Agreement (including against cancellation of the Promissory
Notes), will be duly and validly issued and outstanding and fully paid and
nonassessable under the DGCL.

2.4 Litigation.

Except for the pending matter captioned as AllServe Systems, PLC, et al. v.
Aegis Communications Group, Inc., case number 061-N, filed in Delaware Chancery
Court, New Castle County, Delaware, there is no litigation, arbitration or other
similar proceeding pending or, to the Company’s knowledge, threatened in
writing, against the Company which seeks to enjoin, restrict or prohibit the
transactions contemplated by this Agreement.

 

3

--------------------------------------------------------------------------------

2.5 Brokers and Finders.

Except for Legg Mason, neither the Company nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
liability for any financial advisory fees, investment bankers’ fees, brokerage
fees, commissions, or finders’ fees in connection with this Agreement or the
transactions contemplated hereby.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF WORLD FOCUS

World Focus hereby represents and warrants on the date of this Agreement to the
Company as follows:

3.1 Organization, Standing, and Power.

World Focus is an entity duly organized, validly existing, and in good standing
under the Laws of its jurisdiction of organization. World Focus has the
requisite power and authority to carry on its business as now conducted and to
own, lease and operate its assets. World Focus is duly qualified or licensed to
transact business as a foreign entity in good standing in the states of the
United States and foreign jurisdictions where the character of its assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect.

3.2 Title to Promissory Notes.

World Focus owns the Promissory Notes, free and clear of all Liens, other than
those transfer restrictions imposed by applicable securities Laws. Except for
this Agreement, there are no outstanding agreements, arrangements, warrants,
options, puts, calls, rights, options, subscriptions or other commitments to
which World Focus is a party relating to the Promissory Notes, or the sale,
issuance or voting of the Conversion Shares. Upon delivery by World Focus to the
Company of the Promissory Notes, the Company shall acquire the Promissory Notes,
free and clear of all Liens, other than those transfer restrictions imposed by
applicable securities Laws.

3.3 Authority; No Breach By Agreement.

(a) World Focus has the requisite power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated herein,
have been duly and validly authorized by all necessary action in respect thereof
on the part of World Focus.

(b) Assuming the due authorization and execution of this Agreement by the
Company, this Agreement represents a legal, valid, and binding obligation of
World Focus, enforceable against it in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other Laws affecting creditors’ rights generally and except
insofar as the availability of equitable remedies may be limited by applicable
Law.

(c) Neither the execution and delivery of this Agreement by World Focus, nor the
consummation by World Focus of the transactions contemplated hereby, nor
compliance by World Focus with any of the provisions hereof, conflicts with or
results in a breach of any provision of the certificate of incorporation or
bylaws (or other governing documents) of World Focus.

 

4

--------------------------------------------------------------------------------

(d) No notice to, filing with, or Consent of, any Regulatory Authority is
necessary to be provided, made or obtained by World Focus for the consummation
by World Focus of the transactions contemplated in this Agreement, except where
the failure to provide, make or obtain such notifications, Consents, filings is
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect.

3.4 Litigation.

There is no litigation, arbitration or other similar proceeding pending or, to
World Focus’s knowledge, threatened in writing, against World Focus which seeks
to enjoin, restrict or prohibit the transactions contemplated by this Agreement.

3.5 Brokers’ Fees.

Neither World Focus nor any of its officers, directors, employees, or Affiliates
has employed any broker or finder or incurred any Liability for any financial
advisory fees, investment bankers’ fees, brokerage fees, commissions, or
finders’ fees in connection with this Agreement or the transactions contemplated
hereby.

3.6 Investment Representations.

(a) World Focus understands and acknowledges that the Conversion Shares it
receives, are not registered under the Securities Act of 1933, as amended (the
“Securities Act”) or applicable state securities Laws, nor qualified under the
securities Law of any other jurisdiction, and that the Conversion Shares are
being offered and sold in reliance upon exemptions provided by the Securities
Act and certain state securities Laws for transactions not involving any public
offering.

(b) World Focus is acquiring the Conversion Shares for investment purposes only
for its own account, and not on behalf of any other Person (regardless of
whether such Person is a U.S. resident) nor with a view to, or for resale in
connection with any distribution thereof).

(c) World Focus is able to bear the lack of liquidity inherent in holding the
Conversion Shares. World Focus has been given the opportunity to ask questions
of, and to receive answers from, Persons acting on behalf of the Company
concerning the business, properties, prospects and financial condition of the
Company, and to obtain additional information necessary to verify the accuracy
of any information furnished to World Focus or to which World Focus has had
access.

(d) World Focus is not a “U.S. person” (as defined in Regulation S, promulgated
under the Securities Act). The offer and issuance of Conversion Shares to World
Focus constitute an “Offshore Transaction” as defined in Rule 902 of the
Securities Act. World Focus is an “accredited investor” as defined in
Section 501(a) of the rules and regulations adopted pursuant to the Securities
Act and, accordingly, has such knowledge and experience in financial and
business matters that World Focus is capable of evaluating the merits and risks
of the Debt Conversion and issuance of Conversion Shares.

(e) World Focus hereby agrees to resell such Conversion Shares only pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration, and agrees not to engage in hedging transactions with regard
to such Conversion Shares unless in compliance with the Securities Act.

 

5

--------------------------------------------------------------------------------

(f) World Focus consents to the placement of the following legend on any
certificate representing the Conversion Shares:

THE SALE AND ISSUANCE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THE SECURITIES
REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
IN CONNECTION WITH, THE DISTRIBUTION THEREOF, AND MAY NOT BE OFFERED, SOLD,
PLEDGED, OR TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT UNDER THE ACT IS IN
EFFECT AS TO SUCH SECURITIES AND SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN
COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION,
OR (2) AN OPINION OF COUNSEL (INCLUDING INTERNAL LEGAL COUNSEL) ACCEPTABLE TO
THE CORPORATION THAT AN EXEMPTION FROM SUCH REGISTRATION STATEMENT IS AVAILABLE
AND SUCH OFFER, SALE, PLEDGE, OR TRANSFER IS IN COMPLIANCE WITH APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.

ARTICLE 4

CONDUCT OF BUSINESS PENDING CONSUMMATION

4.1 Affirmative Covenants of the Company.

From the date of this Agreement until the earlier of the Closing Date or the
termination of this Agreement, unless the prior written consent of World Focus
shall have been obtained, which consent shall not be unreasonably withheld,
delayed or conditioned, and except as otherwise provided or permitted herein,
the Company shall, and shall cause each of its Subsidiaries to, (i) operate its
business only in the usual, regular and ordinary course of the business,
consistent with past custom and practice of the Company, and (ii) take no action
which would (A) intentionally and adversely affect the ability of any Party to
obtain any Consents required to consummate the transactions contemplated hereby,
or (B) adversely affect the ability of any Party to perform its covenants and
agreements under this Agreement.

4.2 Material Developments.

(a) After it obtains knowledge thereof, the Company agrees to give written
notice promptly to World Focus upon: (i) the occurrence or impending occurrence
of any event or circumstance relating to the Company or any of its Subsidiaries
which would constitute a material breach of any of its representations,
warranties, or covenants contained herein, and to use commercially reasonable
efforts to prevent or promptly to remedy the same, (ii) any notice or other
communication from any Person alleging that the Consent of such Person is or may
be required in connection with the transactions contemplated by this Agreement,
or (iii) any Litigation instituted or pending, or, to the Company’s knowledge,
threatened against the Company that seeks to enjoin, restrict, or prohibit the
transactions contemplated by this Agreement.

 

6

--------------------------------------------------------------------------------

(b) From the date of this Agreement until the earlier of the Closing Date or the
termination of this Agreement, the Company shall keep World Focus advised of all
material developments relevant to its ability to consummate the transactions
contemplated herein.

(c) From the date of this Agreement until the earlier of the Closing Date or the
termination of this Agreement, (i) World Focus shall keep the Company advised of
all material developments related to its ability to consummate the transactions
contemplated herein and (ii) except for (A) the transfer of the Promissory Notes
to the Company at the Closing as contemplated by this Agreement, or (B) World
Focus shall neither transfer, sell, assign, convey or grant any interest in, nor
otherwise permit any transfer, sale, assignment, conveyance or granting of an
interest in, the Promissory Notes.

ARTICLE 5

ADDITIONAL AGREEMENTS

5.1 Agreement as to Efforts to Consummate.

Subject to the terms and conditions of this Agreement, each of the Parties
hereto agrees to use, and to cause its Subsidiaries to use, all commercially
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, all things necessary, proper, or advisable under applicable
Laws to consummate and make effective, as soon as reasonably practicable after
the date of this Agreement, the transactions contemplated by this Agreement,
including using commercially reasonable efforts to lift or rescind any Order
adversely affecting its ability to consummate the transactions contemplated
herein and to cause to be satisfied the conditions referred to in Article 6;
provided, that nothing herein shall preclude either Party from exercising its
rights under this Agreement and nothing herein shall require any Party to
institute Litigation in order to obtain a Consent.

5.2 Filings with State Office.

Upon the terms and subject to the conditions of this Agreement, the Company
shall execute and file the Certificate of Amendment with the Secretary of State
of the State of Delaware in connection with the Closing.

5.3 Confidentiality.

Except with the prior written consent of the other Party or as required by this
Agreement or applicable Law or Court Order, each Party shall, and shall cause
its advisers and agents to, maintain the confidentiality of (i) the existence,
nature or terms and conditions of this Agreement and the transactions
contemplated by this Agreement and (ii) all confidential information furnished
to it by the other Party concerning its and its Subsidiaries’ businesses,
operations, and financial positions and shall not use such information for any
purpose except in furtherance of the transactions contemplated by this
Agreement. If this Agreement is terminated prior to the Closing Date, each Party
shall promptly return or certify the destruction of all documents and copies
thereof, and all work papers containing confidential information received from
the other Party.

5.4 Press Releases; Disclosure.

No Party to this Agreement shall make, or cause to be made, any press release or
public announcement with respect to this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media with respect
thereto without the prior written consent of the other Party (which consent
shall not be unreasonably withheld, delayed or conditioned), and the Parties
shall cooperate as to the timing and contents of any such press release or
public announcement; provided, however, that such prior written consent shall
not be required for releases, announcements or

 

7

--------------------------------------------------------------------------------

communications by a particular Party to the extent obtaining such prior written
consent would prevent the timely and accurate dissemination of information which
such Party deems necessary or advisable to comply with any applicable Law.

5.5 Meeting of Stockholders.

Subject to compliance with their fiduciary duties under applicable Law: (a) the
Company will duly take all lawful action to call, give notice of, convene and
hold a meeting of its stockholders as soon as reasonably practicable (the
“Stockholders Meeting”) for the purpose of obtaining Stockholder Approval and
will its use commercially reasonable efforts to solicit the approval and
adoption by the Company’s stockholders of the Certificate of Amendment; and
(b) the Board will recommend approval and adoption of the Certificate of
Amendment by the Company’s stockholders and will not (i) withdraw, modify or
qualify (or propose to withdraw, modify or qualify) in any manner adverse to
World Focus such recommendation, or (ii) take any action or make any statement
in connection with the Stockholders Meeting that is inconsistent with such
recommendation.

5.6 Preparation of Proxy Statement.

(a) Preparation. As promptly as reasonably practicable following the date
hereof, the Parties will cooperate with each other in preparing, and the Company
will cause to be filed with the SEC, proxy materials that constitute the proxy
statement relating to the stockholders’ consideration of the approval and
adoption by the Company’s stockholders at the Stockholders Meeting of the
Certificate of Amendment (such proxy statement and any amendments or supplements
thereto, the “Proxy Statement”). The Company will use commercially reasonable
efforts to have the Proxy Statement cleared by the SEC. The Company will, as
promptly as practicable after receipt thereof, provide World Focus with copies
of any written comments and advise World Focus of any oral comments received
from the SEC with respect to the Proxy Statement. The Parties will cooperate
with each other and the Company will provide World Focus with a reasonable
opportunity to review and comment on any amendment or supplement to the Proxy
Statement prior to filing such with the SEC, and the Company will provide World
Focus with a copy of all such filings made with the SEC. The Company will use
commercially reasonable efforts to cause the Proxy Statement to be mailed to the
Company’s stockholders as promptly as practicable after the Proxy Statement is
cleared by the SEC. If at any time prior to Closing Date any information in the
Proxy Statement relating to World Focus or the Company, or any of their
respective Affiliates, officers or directors, should be discovered by World
Focus or the Company, as applicable, to be false or misleading in any material
respect, or that any information should be set forth in an amendment or
supplement to the Proxy Statement so that the Proxy Statement would not include
any misstatement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, the Party that discovers such information will
promptly notify the other Party and, to the extent required by applicable Law,
an appropriate amendment or supplement describing such information will be
promptly filed with the SEC and disseminated to the Company’s stockholders.

(b) Information Supplied.

(1) None of the information supplied or to be supplied by World Focus or the
Company for inclusion or incorporation by reference in the Proxy Statement will,
on the date it is first mailed to the Company’s stockholders or at the time of
the meeting of the Company’s stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. With regard to the
information supplied or to be supplied by World Focus or the Company for
inclusion or incorporation by reference in the Proxy Statement, such

 

8

--------------------------------------------------------------------------------

information will comply as to form in all material respects with the
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and the rules and regulations promulgated thereunder.

(2) Notwithstanding the foregoing provisions of this Section 5.6, no
representation or warranty is made by either Party hereto with respect to
statements made or incorporated by reference in the Proxy Statement based on
information supplied by the other Party hereto for inclusion or incorporation by
reference therein.

ARTICLE 6

CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

6.1 Conditions to Obligations of Each Party.

The respective obligations of each Party to perform this Agreement and
consummate the transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to
Section 8.6:

(a) Regulatory Approvals. All Consents of all Regulatory Authorities required
for consummation of the transactions contemplated hereby shall have been
obtained or made and shall be in full force and effect and all waiting periods
required by applicable Law shall have expired.

(b) Regulatory Proceedings. No Regulatory Authority shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which seeks to enjoin,
restrict or prohibit the consummation of the transactions contemplated by this
Agreement.

(c) Stockholder Approval. Stockholder Approval shall have been obtained.

6.2 Conditions to Obligations of World Focus.

The obligations of World Focus to perform this Agreement and consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by World Focus pursuant to Section 8.6:

(a) Representations and Warranties. The representations and warranties made by
the Company in Article 2 of this Agreement shall be true and correct in all
material respects.

(b) Performance of Agreements and Covenants. Each and all of the agreements and
covenants of the Company to be performed and complied with pursuant to this
Agreement and the other agreements contemplated hereby prior to the Closing Date
shall have been duly performed and complied with in all material respects.

(c) Officer Certificates. The Company shall have delivered to World Focus (i) a
certificate, dated as of the Closing Date and signed on its behalf by its chief
executive officer and its chief financial officer, to the effect that the
conditions set forth in Section 6.1 (as they relate to the Company) and in
Sections 6.2(a) and 6.2(b) have been satisfied, (ii) certified copies of
resolutions duly adopted by the Board and Special Committee evidencing the
taking of all corporate action necessary to authorize the execution, delivery
and performance of this Agreement, and the consummation of the transactions
contemplated hereby, and (iii) certified copies of resolutions duly adopted by
the Company’s stockholders approving the Certificate of Amendment.

 

9

--------------------------------------------------------------------------------

(d) Certificate of Amendment. The Company shall have delivered to World Focus a
copy of the Certificate of Amendment as filed with and certified by, the
Secretary of State of the State of Delaware.

(e) Stock Certificates. The Company shall have delivered to World Focus a stock
certificate representing the Conversion Shares registered in the name of “World
Focus”.

6.3 Conditions to Obligations of the Company.

The obligations of the Company to perform this Agreement and consummate the
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by the Company pursuant to Section 8.6.

(a) Representations and Warranties. The representations and warranties made by
World Focus in Article 3 of this Agreement shall be true and correct in all
material respects.

(b) Performance of Agreements and Covenants. Each and all of the agreements and
covenants of World Focus to be performed and complied with pursuant to this
Agreement and the other agreements contemplated hereby prior to the Closing Date
shall have been duly performed and complied with in all material respects.

(c) Officer Certificates. World Focus shall have delivered to the Company (i) a
certificate, dated as of the Closing Date and signed on its behalf by its chief
executive officer and its chief financial officer, to the effect that the
conditions set forth in Section 6.1 (as they relate to World Focus) and in
Sections 6.3(a) and 6.3(b) have been satisfied, and (ii) certified copies of
resolutions duly adopted by World Focus’s governing body evidencing the taking
of all action necessary to authorize the execution, delivery and performance of
this Agreement, and the consummation of the transactions contemplated hereby.

(d) Promissory Notes. World Focus shall have delivered to the Company the
Promissory Notes for cancellation.

ARTICLE 7

TERMINATION

7.1 Termination.

Notwithstanding any other provision of this Agreement, and notwithstanding the
receipt of Stockholder Approval, this Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Closing
Date:

(a) By mutual written agreement of the Company and World Focus; or

(b) By World Focus (provided, that World Focus is not then in material breach of
any of its representations, warranties, covenants or other agreements hereunder)
in the event of a breach by the Company of any representation, warranty,
covenant or agreement contained in this Agreement, which breach or inaccuracy
would, individually or in the aggregate together with all such other then
breaches and inaccuracies by the Company, constitute grounds for the conditions
set forth in Section 6.2(a) or 6.2(b) not to be satisfied at the Closing Date,
and which breach has not been cured within thirty (30) days after the giving of
written notice to the Company of such breach;

 

10

--------------------------------------------------------------------------------

(c) By the Company (provided, that the Company is not then in material breach of
any of its representations, warranties, covenants or other agreements hereunder)
in the event of a breach by World Focus of any representation, warranty,
covenant or agreement contained in this Agreement, which breach or inaccuracy
would, individually or in the aggregate together with all such other then
breaches and inaccuracies by World Focus, constitute grounds for the conditions
set forth in Section 6.3(a) or 6.3(b) not to be satisfied at the Closing Date,
and which breach has not been cured within thirty (30) days after the giving of
written notice to World Focus of such breach;

(d) By either World Focus or the Company in the event (i) any Consent of any
Regulatory Authority required for consummation of the transactions contemplated
hereby shall have been denied by final nonappealable action of such authority or
if any action taken by such authority is not appealed within the time limit for
appeal, or (ii) if there shall be any Law or Order enacted, promulgated, issued
or entered following the date of this Agreement that makes consummation of the
transactions contemplated hereby illegal or otherwise prohibited; or

(e) By either World Focus or the Company in the event that the transactions
contemplated by this Agreement shall not have been consummated by March 31,
2006, so long as the failure to consummate the transactions contemplated by this
Agreement on or before such date shall not have been principally caused by any
material breach of this Agreement by the Party providing notice of termination.

7.2 Effect of Termination.

In the event of the termination and abandonment of this Agreement pursuant to
Section 7.1, this Agreement shall become void and have no effect, except that
(i) the provisions of this Section 7.2, Section 5.3, Section 5.4 and Article 8,
shall survive any such termination and abandonment, and (ii) no such termination
shall relieve the breaching Party from liability resulting from any willful or
intentional breach by that Party of this Agreement.

ARTICLE 8

MISCELLANEOUS

8.1 Survival of Representations.

None of the representations and warranties contained in this Agreement or in any
certificate delivered pursuant to this Agreement shall survive the Closing Date.

8.2 Definitions.

(a) Except as otherwise provided herein, the capitalized terms set forth below
shall have the following meanings:

“Affiliate” of a Person means: (i) any other Person directly, or indirectly
through one or more intermediaries, controlling, controlled by or under common
control with such Person; (ii) any officer, director, partner, employer, or
direct or indirect beneficial owner of any 10% or greater equity or voting
interest of such Person; or (iii) any other Person for which a Person described
in clause (ii) acts in any such capacity.

“Agreement” has the meaning set forth in the recitals.

“Board” has the meaning set forth in the recitals.

 

11

--------------------------------------------------------------------------------

“Business Day” shall mean any day other than (i) a Saturday or Sunday or (ii) a
day on which banks in New York, New York are required or authorized by Law,
executive order or governmental decree to be closed.

“Certificate of Amendment” has the meaning set forth in Section 2.2(a).

“Certificate of Incorporation” means the Amended and Restated Certificate of
Incorporation of the Company, as amended.

“Closing” has the meaning set forth in Section 1.2.

“Closing Date” means the date on which the Closing occurs.

“Common Stock” has the meaning set forth in the recitals.

“Consent” means any consent, approval, authorization, clearance, exemption,
waiver, or similar affirmation by any Person pursuant to any agreement, Law,
Order, or Permit.

“Conversion Price” means $0.038 per share, subject to adjustment to reflect any
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of Common Stock that may occur between the date of this Agreement and
the Closing Date.

“Conversion Shares” has the meaning set forth in Section 1.1(a).

“Debt Conversion” has the meaning set forth in the recitals.

“DGCL” means the General Corporation Law of the State of Delaware.

“Exchange Act” has the meaning set forth in Section 5.6(b)(1).

“Fairness Opinion” has the meaning set forth in the recitals.

“Law” means any code, law (including common law), ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a Person or
its assets, Liabilities, or business, including those promulgated, interpreted
or enforced by any Regulatory Authority.

“Legg Mason” has the meaning set forth in the recitals.

“Lien” means any conditional sale agreement, default of title, easement,
encroachment, encumbrance, hypothecation, infringement, lien, mortgage, pledge,
reservation, restriction, security interest, title retention or other security
arrangement, or any adverse right or interest, charge, or claim of any nature
whatsoever of, on, or with respect to any asset.

“Material” or “material” for purposes of this Agreement shall be determined in
light of the facts and circumstances of the matter in question.

“Material Adverse Effect” means, with respect to a Party, an event, change or
occurrence which, individually or together with any other event, change or
occurrence, has or reasonably could have a material adverse impact on the
ability of a Party to perform its obligations under this Agreement or to
consummate the Debt Conversion or the other transactions contemplated by this
Agreement.

 

12

--------------------------------------------------------------------------------

“Nasdaq National Market” means the National Market System of Nasdaq Stock
Market, Inc.

“Order” means any administrative decision or award, decree, injunction,
judgment, order, quasi-judicial decision or award, ruling, or writ of any
federal, state, local or foreign Regulatory Authority.

“Party” means either the Company or World Focus.

“Person” means a natural person or any legal, commercial or governmental entity,
such as, but not limited to, a corporation, general partnership, joint venture,
limited partnership, limited liability company, limited liability partnership,
trust, business association, group acting in concert, or any person acting in a
representative capacity.

“Promissory Notes” has the meaning set forth in the recitals.

“Proxy Statement” has the meaning set forth in Section 5.6(a).

“Regulatory Authorities” means, collectively, the SEC, the Nasdaq National
Market, the Federal Trade Commission, the Department of Justice and all other
federal, state, county, local or other governmental or regulatory courts,
agencies, authorities (including taxing and self-regulatory authorities),
instrumentalities, commissions, boards or bodies having jurisdiction over the
Parties and their respective Subsidiaries.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” has the meaning set forth in Section 3.6(a).

“Securities Laws” means the Securities Act, the Exchange Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.

“Special Committee” has the meaning set forth in the recitals.

“Stockholder Approval” has the meaning set forth in Section 2.2(a).

“Stockholder Meeting” has the meaning set forth in Section 5.5.

“Subsidiaries” means all those corporations, associations, or other business
entities of which the entity in question either (i) owns or controls 50% or more
of the outstanding equity securities either directly or through an unbroken
chain of entities as to each of which 50% or more of the outstanding equity
securities is owned directly or indirectly by its parent (provided, there shall
not be included any such entity the equity securities of which are owned or
controlled in a fiduciary capacity), (ii) in the case of partnerships, serves as
a general partner, (iii) in the case of a limited liability company, serves as a
managing member, or (iv) otherwise has the ability to elect a majority of the
directors, trustees or managing members thereof.

“World Focus” has the meaning set forth in the recitals.

 

13

--------------------------------------------------------------------------------

(b) In this Agreement, unless otherwise specified or where the context otherwise
requires:

(1) the headings of particular provisions of this Agreement are inserted for
convenience only and will not be construed as a part of this Agreement or serve
as a limitation or expansion of the scope of any term or provision of this
Agreement;

(2) words importing the singular only shall include the plural and vice versa;

(3) words importing any gender shall include other genders;

(4) the words “include,” “includes” or “including” shall be deemed followed by
the words “without limitation;”

(5) the words “hereof,” “herein” and “herewith” and words of similar import,
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement;

(6) references to “Articles” and “Sections” shall be to Articles and Sections of
this Agreement; and

(7) references to any Person include the successors and permitted assigns of
such Persons.

8.3 Expenses.

Each of the Parties shall bear and pay all direct costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration and application fees, printing fees, and fees and
expenses of its own financial or other consultants, investment bankers,
accountants, and counsel.

8.4 Entire Agreement.

Except as otherwise expressly provided herein, this Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
between the Parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect thereto,
written or oral. Nothing in this Agreement expressed or implied, is intended to
confer upon any Person, other than the Parties or their respective successors,
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement.

8.5 Amendments.

This Agreement may be amended by a subsequent writing signed by each of the
Parties upon the approval of each of the Parties, whether before or after
Stockholder Approval has been obtained.

8.6 Waivers.

At any time prior to the Closing Date, any Party hereto may (a) extend the time
for the performance of any of the obligations or other acts of any other party
hereto, (b) waive any inaccuracies in the representations and warranties of any
other party contained herein or in any document delivered pursuant hereto and
(c) waive compliance by any other party with any of the agreements or conditions
contained herein. Any such extension or waiver will be valid only if set forth
in an instrument in writing signed by the Party or Parties to be bound thereby.
No failure or delay on the part of any Party hereto in the exercise of any right
hereunder will impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor will any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right.

 

14

--------------------------------------------------------------------------------

8.7 Assignment.

Except as expressly contemplated hereby, neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any Party hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other Parties. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and assigns.

8.8 Notices.

All notices or other communications which are required or permitted hereunder
shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, or by courier
or overnight carrier, to the Persons at the addresses set forth below (or at
such other address as may be provided hereunder), and shall be deemed to have
been delivered (a) on the date of delivery if delivered personally, or by
telecopy or facsimile, upon confirmation of receipt, (b) on the first Business
Day following the date of dispatch if delivered by a recognized next-day courier
service, or (c) on the fifth Business Day following the date of mailing if
delivered by registered or certified mail return receipt requested, postage
prepaid:

 

Company:                            Aegis Communications Group, Inc.    8001
Bent Branch Drive    Irving, Texas 75063    Facsimile Number: (972) 868-0267   
Attention: Chief Executive Officer    Hughes & Luce LLP    1717 Main Street   
Suite 2800    Dallas, Texas 75201    Facsimile Number: (214) 939-5849   
Attention: David Luther, Esq. Copies to:    Special Committee of Board of
Directors    c/o Aegis Communications Group, Inc.    8001 Bent Branch Drive   
Irving, Texas 75063    Facsimile Number: (972) 868-0267    Attention:    Mr.
John-Michael Lind and       Mr. Rashesh Shah    Pepper Hamilton LLP    3000 Two
Logan Square    18th and Arch Streets    Philadelphia, Pennsylvania 19103   
Facsimile Number: (215) 981-4750    Attention:    Barry M. Abelson, Esq. and   
   James D. Epstein, Esq.

 

15

--------------------------------------------------------------------------------

World Focus:                        

   World Focus    Essar House, 14th Floor,    KK Marg, Mahalakshmi,    Mumbai
400 034, India.    Tel No.:     91 22 5660 1100    Fax No.:     91 22 2495 4490
   Attention: Mr. Surendra Agarwal

8.9 Governing Law; Jurisdiction and Venue; WAIVER OF TRIAL BY JURY.

(a) Governing Law; Jurisdiction and Venue. Regardless of any conflict of law or
choice of law principles that might otherwise apply, the Parties agree that this
Agreement shall be governed by and construed in all respects in accordance with
the Laws of the State of Delaware. The Parties all expressly agree and
acknowledge that the State of Delaware has a reasonable relationship to the
Parties and/or this Agreement. As to any dispute, claim, or litigation arising
out of or relating in any way to this Agreement or the transaction at issue in
this Agreement, the Parties hereto hereby agree and consent to be subject to the
exclusive jurisdiction of the state and federal courts located in Delaware. Each
Party hereto hereby irrevocably waives, to the fullest extent permitted by Law,
(a) any objection that it may now or hereafter have to laying venue of any suit,
action or proceeding brought in such court, (b) any claim that any suit, action
or proceeding brought in such court has been brought in an inconvenient forum,
and (c) any defense that it may now or hereafter have based on lack of personal
jurisdiction in such forum.

(b) WAIVER OF TRIAL BY JURY. AFTER CONSULTATION WITH COUNSEL, EACH OF THE
PARTIES HEREBY AGREES THAT IT WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY.

8.10 Counterparts.

This Agreement may be executed in counterparts, each of which shall be deemed to
be an original, but all of which together shall constitute one and the same
instrument.

8.11 Interpretations.

Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed or resolved against any Party, whether under any rule of construction
or otherwise. No Party to this Agreement shall be considered the draftsman. The
Parties acknowledge and agree that this Agreement has been reviewed, negotiated,
and accepted by all Parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all Parties hereto.

8.12 Severability.

Any term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.

 

16

--------------------------------------------------------------------------------

[Signature Page Follows]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
on its behalf by its duly authorized officers as of the day and year first above
written.

 

COMPANY:

AEGIS COMMUNICATIONS GROUP, INC.

By:

 

/s/ Kannan Ramasamy

Name:

 

Kannan Ramasamy

Title:

 

President and CEO

WORLD FOCUS

By:

 

/s/ Rajiv Agarwal

Name:

 

Rajiv Agarwal

Title:

 

Authorized Signatory

[Signature Page to Debt Conversion Agreement]