FIRST AMENDMENT
TO LOAN AND SECURITY
AGREEMENT
This First Amendment to Loan and Security
Agreement (this “ Amendment ”) is dated
as of May 19, 2009 and is between Anchor Funding Services, LLC
(“ Borrower ”), Textron
Financial Corporation (acting in the capacity as lender as
described in the Loan Agreement defined below (in such capacity,
“ Lender ”)) and Textron Financial
Corporation (acting in the capacity as administrative agent as
described in the Loan Agreement defined below (in such capacity,
“ Agent ”)).
Borrower, Lender and Agent are party to that
certain Loan and Security Agreement, dated as of November 21, 2008
(as amended, restated, supplemented, or otherwise modified from
time to time, the “ Loan Agreement
”);
Borrower has requested that Agent and Lender
amend the Loan Agreement.
Agent and Lender are willing to provide the
amendments subject to and upon the terms and conditions set forth
herein.
In consideration of the premises and the mutual
covenants set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as
follows:
. Capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to
them in the Loan Agreement, as amended hereby.
2.
AMENDMENTS TO LOAN
AGREEMENT
(a) The
“Definitions” section of the Loan Agreement is hereby
amended by inserting the following new definition in appropriate
alphabetical order:
“ Funded Debt ” of any Person
means, without duplication, the following: (a) all obligations for
Money Borrowed, (b) all obligations (including, during the
non-cancellable term of any lease in the nature of a title
retention agreement, all future payment obligations under such
lease discounted to their present value in accordance with GAAP)
secured by any Lien to which any property or asset owned or held by
such Person is subject, whether or not the obligation secured
thereby shall have been assumed by such Person, (c) all obligations
of other Persons which such Person has guaranteed, including, but
not limited to, all obligations of such Person consisting of
recourse liability with respect to accounts receivable sold or
otherwise disposed of by such Person and (d) in the case of
Borrower (without duplication) all Obligations under the Loan
Documents.
(b) The
“Definitions” section of the Loan Agreement is hereby
amended by amending and restating the definition of “Adjusted
Tangible Net Worth” as follows:
“ Adjusted Tangible Net Worth
” means, with respect to Borrower, on a consolidated basis
(a) stockholder’s equity determined in accordance with GAAP,
plus (b) the outstanding principal balance of Subordinated
Indebtedness, plus (c) the amount of the non-cash preferred
stock dividend accrual, minus (d) Intangible Assets
including but not limited to all unamortized debt discount and
expense, unamortized research and development expense, unamortized
deferred charges, goodwill, intellectual property, unamortized
excess of investments in subsidiaries over equity at
dates of acquisition, deferred taxes, deferred financing costs and
all similar items which should properly be treated as intangibles
in accordance with GAAP, minus (e) all loans or advances to
Affiliates of Borrower.
(c) The
“Definitions” section of the Loan Agreement is hereby
amended by amending and restating the definition of “Initial
Term” as follows:
“ Initial Term ” means the
period commencing on the Agreement Date and ending on December 31,
2009.
(d) The
“Definitions” section of the Loan Agreement is hereby
amended by amending and restating the definition of “Leverage
Ratio” as follows:
“ Leverage Ratio ” means, as
of the last day of each calendar month, the ratio of (a)(i) Funded
Debt of Parent and its Subsidiaries as of such day on a
consolidated basis, minus (ii) Subordinated Indebtedness, if
any, of Borrower as of such day to (b)(i) Adjusted Tangible Net
Worth of Parent and its Subsidiaries as of such day on a
consolidated basis, plus (ii) Subordinated Indebtedness of
Borrower as of such day.
(e) The
“Definitions” section of the Loan Agreement is hereby
amended by amending and restating the definition of “Maximum
Credit” as follows:
“ Maximum Credit ” means the
amount of $5,000,000.
(f) The
“Definitions” section of the Loan Agreement is hereby
amended by deleting the definition of “Maximum Credit
Increase Conditions” and the definition of “Maximum
Credit Increase Notice.”
(g) The
“Definitions” section of the Loan Agreement is hereby
amended by amending and restating the definition of
“Termination Date” as follows:
“ Termination Date ” means
the earliest to occur of: (a) the end of the Initial Term, (b) such
date as the Obligations shall have been accelerated pursuant to the
provisions of Section 10.2 or (c) such date as all
Obligations shall have been indefeasibly paid in full and the
Revolving Credit Facility shall have been terminated.
(h) Section 1.1(c) of
the Loan Agreement is hereby amended by amending and restating it
in its entirety as follows:
(i) Section 2.1 of the
Loan Agreement is hereby amended by amending and restating it in
its entirety as follows:
Closing Date and Post Termination Date
Fees . On the Closing
Date, Borrower shall pay to Agent a fee (the “ Closing
Fee ”) equal to $50,000, which fee shall be
non-refundable in any circumstance and shall be fully earned by
Agent on the Closing Date. Additionally, if all Obligations have
not been indefeasibly paid in full on or before the end of the
Initial Term, then on January 1, 2010 Borrower shall pay to Agent a
fee equal to $50,000, which fee shall be non-refundable in any
circumstance and shall be fully earned by Agent at the end of the
Initial Term.
(j) Section 2.2 of the
Loan Agreement is hereby amended by amending and restating it in
its entirety as follows:
Unused Line Fee . Commencing January 31, 2009 and on
the last Business Day of each calendar month thereafter Borrower
shall pay to Agent, for the benefit of Lenders, the Unused Line Fee
due in respect of such calendar month then ending, which Unused
Line Fee shall accrue from and include January 1, 2009, until but
not including, the Termination Date.
(k) Section 8.6 of the
Loan Agreement is hereby amended by amending and restating it in
its entirety as follows:
(a) Borrower
shall not permit the Leverage Ratio to be greater than (i) .5 to
1.0 as of the last day of its 2008 Fiscal Year and (ii) 2.35 to 1.0
as of the last day of each Fiscal Quarter thereafter.
