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SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

Security Agreement

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT | Document Parties: ACCESS WORLDWIDE COMMUNICATIONS INC | AWWC NEW JERSEY HOLDINGS, INC | MANUFACTURERS AND TRADERS TRUST COMPANY You are currently viewing:
This Security Agreement involves

ACCESS WORLDWIDE COMMUNICATIONS INC | AWWC NEW JERSEY HOLDINGS, INC | MANUFACTURERS AND TRADERS TRUST COMPANY

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Title: SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
Governing Law: New York     Date: 5/20/2008
Industry: Business Services     Sector: Services

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT, Parties: access worldwide communications inc , awwc new jersey holdings  inc , manufacturers and traders trust company
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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:

 

Level

   Total Liabilities to
Net Worth Ratio
   Prime Rate +  

Level I

   <3.00    1.00 %

Level II

   ³ 3.00<3.50    1.25 %

Level III

   ³ 3.50    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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