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Exhibit
10.6
SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT (this “ Amendment
”) is made effective as of May
, 2008 by and between ACCESS
WORLDWIDE COMMUNICATIONS, INC. (“ Borrower
”) and MANUFACTURERS AND TRADERS TRUST COMPANY (the
“Lender” ).
BACKGROUND
A. Borrower and Lender
previously entered into a certain Loan and Security Agreement dated
August 8, 2007 as amended by that certain First Amendment to
Loan and Security Agreement dated November 15, 2007 (as
amended, supplemented or restated from time to time, the “
Loan Agreement ”).
B. Borrower and Lender
are entering into this Amendment to amend certain terms and
conditions in the Loan Agreement.
C. Capitalized terms
not otherwise defined in this Amendment shall have the meanings set
forth therefor in the Loan Agreement.
NOW THEREFORE in
consideration of the foregoing premises and intending to be legally
bound, the parties hereto agree as follows:
1. Defined
Terms . The following defined term in
Section 1.1 of the Loan Agreement is hereby
amended and restated in its entirety as follows:
“ Applicable
Margin is equal to the percent per annum in excess of the
Prime Rate as set forth in the following pricing matrix:
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Level
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Total Liabilities to
Net Worth Ratio |
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Prime Rate + |
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Level I
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<3.00 |
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1.00 |
% |
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Level II
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³
3.00<3.50 |
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1.25 |
% |
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Level III
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³
3.50 |
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1.50 |
% |
From August 8, 2007
through November 15, 2007, the Applicable Margin for Advances
under the Revolving Credit Facility shall be the Applicable Margin
set forth for Level II in the above-described pricing matrix. From
November 15, 2007 until Lender’s receipt of
Borrower’s audited consolidated and consolidating financial
statements for Borrower’s fiscal year ending
December 31, 2008 (“ Applicable Margin Initial Reset
Date ”) the Applicable Margin for Advances under the
Revolving Credit Facility shall be the Applicable Margin set forth
for Level III in the above-described pricing matrix. Thereafter,
the Applicable Margin shall be based upon the ratio of Total
Liabilities to Net Worth of Borrower and its Subsidiaries adjusted
on a quarterly
basis as reflected on the
consolidated financial statements of Borrower and its Subsidiaries
delivered to Lender pursuant to Section 15.3 and
on the Borrower’s 10-Q Report delivered to Lender pursuant to
Section 15.6 and the compliance certificates
delivered to Lender pursuant to Section 15.10
for each fiscal quarter ending after the Applicable Margin Initial
Reset Date, provided , however , if the consolidated
financial statements or compliance certificates are not delivered
at the time specified in Sections 15.3 and 15.10
below, then the Applicable Margin for the Loan shall be the highest
Applicable Margin set forth above for the Loan during any period
that Borrower is delinquent in the delivery of such consolidated
financial statements and compliance certificates or, at the option
of Lender, the Default Rate. The adjustment in the Applicable
Margin, if any, shall be effective five (5) Business Days
after the later of receipt by Lender of the consolidated financial
statements of Borrower and its Subsidiaries delivered to Lender
pursuant to Section 15.3 or the compliance
certificates delivered to Lender pursuant to
Section 15.10 below. There shall be no reduction
in the Applicable Margin if a Default or an Event of Default has
occurred and is continuing uncured and the Minimum Net Availability
is less than $1,500,000.
Pledged Account
means collectively those certain certificated and uncertificated
certificates of deposit or money market accounts of Borrower held
by or with Bank and any and all renewals, replacements and
substitutions of such certificates of deposit and money market
accounts.”
2. New Defined
Terms . Section 1.1 of the Loan
Agreement is hereby amended to add the following new defined
terms:
“ Investment
Account means that certain investment account number
AZD-590628 with M&T Securities and any and all replacement or
substitution investment accounts.
Investment Account
Control Agreement means that certain control agreement
dated May , 2008 by and among
Borrower, Lender and M&T Securities, pursuant to which
Lender’s security interest in the Investment Account is
confirmed and Lender is granted control over such Investment
Account.”
3. Borrowing
Base . Section 2.3 of the Loan Agreement
is hereby amended and restated in its entirety as
follows:
“ 2.3.
Borrowing Base . The “ Borrowing Base
” as of the applicable date of determination shall be
determined based upon the following advance rates and
calculations:
(a) An advance rate of up to
85% of the Value of Borrower’s Eligible Accounts;
plus
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(b) An advance rate of up to
100% of the cash held in the Pledged Account with Lender;
plus
(c) An advance rate of up to
100% of the cash held in the Investment Account with M&T
Securities that is subject to the Investment Account Control
Agreement; plus
(d) An advance rate of up to
75% of the eligible securities, including eligible Investment
Property and eligible Financial Assets held in the Investment
Account with M&T Securities that is subject to the Investment
Account Control Agreement; minus
(e) All Reserves.
Percentages used from time to
time in calculating the Borrowing Base are for the sole purpose of
determining the maximum amount of Advances under the Revolving
Credit Facility that may be outstanding from time to time under
this Agreement and shall not be evidentiary of or binding upon
Lender with respect to the market value or liquidation value of any
Collateral. In the event that Lender has any questions regarding
Borrower’s calculation of the Borrowing Base, funding of
Advances under the Revolving Credit Facility shall be subject to a
resolution of such questions to Lender’s satisfaction. Any
request for an Advance under the Revolving Credit Facility which,
if funded, would result in the unpaid balance of an Advance under
the Revolving Credit Facility being in excess of the amount allowed
by this Agreement may be declined by Lender in its sole discretion
without prior notice.”
4. Borrower
Sublimits . Section 2.4(b) of the Loan
Agreement is hereby amended and restated in its entirety as
follows:
“(b) Borrower
Sublimits . Borrower shall only be entitled to receive
Advances under the Revolving Credit Facility based upon
Availability determined by Borrower’s Eligible Accounts, the
value of the cash in the Pledged Account and the value of the cash
in the Investment Account.”
5. Pledged
Account and Investment Account Withdrawals .
Section 2.7 of the Loan Agreement is hereby
amended and restated in its entirety as follows:
“ 2.7
Pledged Account and Investment Account Withdrawals .
Borrower may, from time to time, withdraw cash from the Pledged
Account and/or the Investment Account, provided that
:
(a) No Default or Event of
Default has occurred or will occur as a result of such
withdrawal;
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(b) Borrower shall provide
Lender with two (2) Business Days written notice of its intent
to withdraw such cash together with projections setting forth
Borrower’s anticipated use of such cash, satisfactory to
Lender;
(c) Borrower shall deliver to
Lender a Borrowing Base Certificate reflecting the aggregate amount
of cash being withdrawn from such Pledged Account and/or such
Investment Account;
(d) To the extent such
withdrawal causes the Revolving Credit Facility Usage to exceed the
Borrowing Base, Borrower shall pay to Lender in immediately
available funds the amount by which the Revolving Credit Facility
Usage exceeds the Borrowing Base;
(e) Lender shall have no
obligation to make an Advance or release cash from the Pledged
Account if such Advance or release would cause the Borrowing Base
to exceed the Revolving Credit Facility Usage; and
(f) After such withdrawal,
Borrower’s Minimum Net Availability is at least
$2,000,000.”
6. Collateral
Management Fee . Section 7.9 of the Loan
Agreement is hereby amended and restated in its entirety as
follows:
“7.9 Collateral
Management Fee . Borrower agrees to pay to Lender a monthly
collateral management fee in the amount of $3,000, payable on the
date hereof and on the first day of each calendar month thereafter,
in advance, which fee shall be fully earned by Lender on the date
that Lender makes the initial Advance and on the first day of each
month thereafter.”
7. Security
Interest . Pursuant to Section 9.1 of
the Loan Agreement, Borrower previously granted to Lender a first
priority, perfected security interest in all Personal Property of
Borrower, including without limitation all of Borrower’s
present and future Financial Assets and Investment Property.
Borrower hereby acknowledges and agrees that the Investment Account
constitutes a Financial Asset and/or Investment Property of
Borrower. Borrower further hereby acknowledges and agrees that the
Investment Account together with all Financial Assets or Investment
Property credited to the Investment Account and all additions,
substitutions, replacements, proceeds, income, dividends and
distributions thereon are subject to the first priority, perfected
security interest previously granted by Borrower in favor of
Lender.
8. Fixed Charge
Coverage Ratio . Lender agrees to waive defaults existing
for the fiscal quarter ending March 31, 2008, with respect to
the Fixed Charge Coverage Ratio covenant set forth in
Section 14.1 of the Loan Agreement prior to its
amendment pursuant hereto. Effective as of the date hereof, and at
all times hereafter, Section 14.1 of the Loan
Agreement shall be amended and restated to read in its entirety as
follows:
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“14.1 Fixed
Charge Coverage Ratio . Borrower and its Subsidiaries shall
maintain a Fixed Charge Coverage Ratio of not less than the ratios
set forth below for the corresponding periods set forth
below:
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