FIRST AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT

 

THIS FIRST AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT,
dated as of August 11, 2003 (this “Amendment”), is entered into by and between
ACCESS WORLDWIDE COMMUNICATIONS, INC., a Delaware corporation, ASH CREEK, INC.,
a Delaware corporation, AWWC NEW JERSEY HOLDINGS, INC., a Delaware corporation,
TELEMANAGEMENT SERVICES, INC., a Delaware corporation, TLM HOLDINGS CORP., a
Delaware corporation, (individually and collectively, the “Borrower”), and
CAPITALSOURCE FINANCE LLC, a Delaware limited liability company (the “Lender”).
Capitalized terms used and not otherwise defined herein are used as defined in
the Agreement (as defined below).

 

WHEREAS, the parties hereto entered into that certain Revolving Credit, Term
Loan and Security Agreement dated as of June 10, 2003 (as amended, supplemented,
or otherwise modified from time to time, the “Agreement”); and

 

WHEREAS, Borrower has requested Lender to revise certain financial covenants set
forth in the Agreement and Lender has agreed to do so in accordance with the
terms and conditions contained herein;

 

NOW, THEREFORE, in consideration of the premises and the other mutual covenants
contained herein, the receipt and sufficiency are hereby acknowledged, the
parties hereto agree as follows:

 

SECTION 1. Amendments.

 

(a) Annex I of the Agreement is hereby amended by deleting it in its entirety
and replacing it with Annex I attached hereto.

 

(b) Schedule 5.6 of the Agreement is hereby amended by deleting it in its
entirety and replacing it with Schedule 5.6 attached hereto.

 

SECTION 2. Conditions to Effectiveness. The effectiveness of this Amendment is
conditioned upon the following conditions precedent:

 

(a) Borrower shall have delivered to Lender the duly executed counterparts of
this Amendment; and

 

(b) Borrower shall have paid to Lender an amendment fee of $25,000.

 

SECTION 3. Miscellaneous.

 

(a) Borrower represents and warrants that after giving effect to this Amendment
and the transactions contemplated hereby, all of the representations and
warranties set forth in Article V of the Agreement are true and correct in all
material respects and no Default or Event of Default has occurred and is
continuing as of the date hereof.

 

(b) Except as expressly provided herein, the Agreement shall continue in full
force and effect, and the unamended terms and conditions of the Agreement are
expressly incorporated herein and ratified and confirmed in all respects. This
Amendment is not intended to be or to create, nor shall it be construed as, a
novation or an accord and satisfaction. From and after the date hereof,
references to the Agreement shall be references to the Agreement as amended
hereby. This Amendment shall be deemed a

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Loan Document as such term is defined and used in the Agreement.

 

(c) This Amendment constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof. Neither this Amendment nor any
provision hereof may be changed, waived, discharged, modified or terminated
orally, but only by an instrument in writing signed by the parties required to
be a party thereto pursuant to the Agreement.

 

(d) This Amendment may be executed in any number of counterparts (including by
facsimile), and by the different parties hereto on the same or separate
counterparts, each of which shall be deemed to be an original instrument but all
of which together shall constitute one and the same agreement.

 

(e) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE CHOICE OF LAW PROVISIONS SET FORTH IN THE AGREEMENT AND SHALL BE SUBJECT TO
THE WAIVER OF JURY TRIAL AND NOTICE PROVISIONS OF THE AGREEMENT.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the parties have caused this First Amendment to Revolving
Credit, Term Loan and Security Agreement to be executed by their respective
officers thereunto duly authorized, as of the date first above written.

 

BORROWER:

      ACCESS WORLDWIDE COMMUNICATIONS, INC.             By:                  

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John Hamerski, EVP – Chief Financial Officer

        ASH CREEK, INC.             By:                  

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John Hamerski, EVP – Chief Financial Officer

        AWWC NEW JERSEY HOLDINGS, INC.             By:                  

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John Hamerski, EVP – Chief Financial Officer

        TELEMANAGEMENT SERVICES, INC.             By:                  

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John Hamerski, EVP – Chief Financial Officer

        TLM HOLDINGS CORP.             By:                  

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John Hamerski, EVP – Chief Financial Officer

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LENDER:       CAPITALSOURCE FINANCE LLC             By:                  

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            Name:   Dean Graham              

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            Its:   Managing Director              

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ANNEX I

 

FINANCIAL COVENANTS

 

  1) Minimum EBITDA

 

Borrower shall not permit its EBITDA for the Test Period to be less than the
following amounts for the months indicated:

 

June 2003:

   ($ 523,000 )

July 2003:

   ($ 282,000 )

August 2003:

   ($ 179,000 )

September 2003:

   $ 444,000  

October 2003:

   $ 1,221,000  

November 2003:

   $ 2,031,000  

December 2003:

   $ 2,223,000  

January 2004:

   $ 1,544,000  

February 2004:

   $ 773,000  

March 2004:

   $ 293,000  

April 2004:

   $ 405,000  

May 2004:

   $ 652,000  

June 2004:

   $ 825,000  

July 2004:

   $ 696,000  

August 2004:

   $ 473,000  

September 2004:

   $ 689,000  

October 2004:

   $ 1,290,000  

November 2004:

   $ 1,290,000  

December 2004:

   $ 1,290,000  

January 2005:

   $ 1,544,000  

February 2005:

   $ 773,000  

March 2005:

   $ 293,000  

April 2005:

   $ 405,000  

May 2005:

   $ 652,000  

June 2005:

   $ 825,000  

July 2005:

   $ 696,000  

August 2005:

   $ 473,000  

September 2005:

   $ 689,000  

October 2005:

   $ 1,290,000  

November 2005:

   $ 1,290,000  

December 2005:

   $ 1,290,000  

January 2006:

   $ 1,544,000  

February 2006:

   $ 773,000  

March 2006:

   $ 293,000  

April 2006:

   $ 405,000  

May 2006:

   $ 652,000  

June 2006 and thereafter:

   $ 825,000  

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  2) Fixed Coverage Ratio (EBITDA/Fixed Charges)

 

Borrower shall not permit its Fixed Charge Coverage Ratio for the Test Period to
be less than the following amount for the months indicated:

 

June 2003:

   (1.37 )

July 2003:

   (0.70 )

August 2003:

   (0.41 )

September 2003:

   0.80  

October 2003:

   1.09  

November 2003:

   1.20  

December 2003:

   1.20  

January 2004:

   1.26  

February 2004:

   1.30  

March 2004:

   1.00  

April 2004:

   1.03  

May 2004:

   1.09  

June 2004:

   1.12  

July 2004:

   1.09  

August 2004:

   1.01  

September 2004:

   1.09  

October 2004 and thereafter:

   1.22  

 

  3) Cash Velocity

 

Collections of Borrower’s Accounts shall not be less than $3,750,000 for each
calendar month during the Term; provided, that upon any violation of or failure
to comply with this covenant Lender shall have the right, in its sole
discretion, to consider for all purposes under the Agreement as though Borrower
actually collected Accounts equal to such minimum required amount.

 

  4) Minimum Liquidity and Working Capital

 

At Closing and at all other times Borrower shall have not less than $700,000 of
Available Cash on hand which Lender shall create a reserve for under the
Borrowing Base.

 

For purposes of the covenants set forth in this Annex I, the terms listed below
shall have the following meanings:

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“Available Cash” shall mean, for and on any date, the sum without duplication of
the following for Borrower: (a) unrestricted cash on hand on such date, (b) Cash
Equivalents held on such date, and (c) the unborrowed Availability on and as of
such date.

 

“Cash Equivalents” shall mean (a) securities issued, or directly and fully
guaranteed or insured, by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than six months from the date
of acquisition, (b) U.S. dollar denominated time deposits, certificates of
deposit and bankers’ acceptances of (i) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000, or
(ii) any bank (or the parent company of such bank) whose short-term commercial
paper rating from Standard & Poor’s Ratings Services (“S&P”) is at least A-2 or
the equivalent thereof or from Moody’s Investors Service, Inc. (“Moody’s”) is at
least P-2 or the equivalent thereof in each case with maturities of not more
than six months from the date of acquisition (any bank meeting the
qualifications specified in clauses (b)(i) or (ii), an “Approved Bank”), (c)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (a), above, entered into with any
Approved Bank, (d) commercial paper issued by any Approved Bank or by the parent
company of any Approved Bank and commercial paper issued by, or guaranteed by,
any industrial or financial company with a short-term commercial paper rating of
at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent
thereof by Moody’s, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each thereof,
from S&P or Moody’s, as the case may be, and in each case maturing within six
months after the date of acquisition and (e) investments in money market funds
substantially all of whose assets are comprised of securities of the type
described in clauses (a) through (d) above.

 

“EBITDA” shall mean, for any Test Period, the sum, without duplication, of the
following for Borrower, on a consolidated basis: Net Income determined in
accordance with GAAP, plus, (a) Interest Expense, (b) taxes on income, whether
paid, payable or accrued, (c) depreciation expense, (d) amortization expense,
(e) all other non-cash, non-recurring charges and expenses, excluding accruals
for cash expenses made in the ordinary course of business, and (f) loss from any
sale of assets, other than sales in the ordinary course of business, all of the
foregoing determined in accordance with GAAP, minus (a) gains from any sale of
assets, other than sales in the ordinary course of business and (b) other
extraordinary or non-recurring gains.

 

“Fixed Charge Ratio” shall mean, for Borrower collectively on a consolidated
basis, the ratio of (a) EBITDA for the Test Period, to (b) Fixed Charges for the
Test Period.

 

“Fixed Charges” shall mean, the sum of the following: (a) Total Debt Service,
(b) Capital Expenditures, (c) income taxes paid in cash or accrued, and (d)
dividends paid or accrued or declared.

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“Interest Expense” shall mean, for any Test Period, total interest expense
(including attributable to Capital Leases in accordance with GAAP) fees with
respect to all outstanding Indebtedness including capitalized interest but
excluding commissions, discounts and other fees owed with respect to letters of
credit and bankers’ acceptance financing and net costs under Interest Rate
Agreements.

 

“Interest Rate Agreement” shall mean any interest rate swap, cap or collar
agreement or other similar agreement or arrangement designed to hedge the
position with respect to interest rates.

 

“Net Income” shall mean, the net income (or loss) determined in conformity with
GAAP, provided that there shall be excluded (i) the income (or loss) of any
Person in which any other Person (other than any Borrower) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to a Borrower by such Person, (ii) the income (or loss) of any Person
accrued prior to the date it becomes a Borrower or is merged into or
consolidated with a Borrower or that Person’s assets are acquired by a Borrower,
(iii) the income of any Subsidiary of Borrower to the extent that the
declaration or payment of dividends or similar distributions of that income by
that Subsidiary is not at the time permitted by operation of the terms of the
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) compensation expense
resulting from the issuance of capital stock, stock options or stock
appreciation rights issued to former or current employees, including officers,
of a Borrower, or the exercise of such options or rights, in each case to the
extent the obligation (if any) associated therewith is not expected to be
settled by the payment of cash by a Borrower or any affiliate thereof, and (v)
compensation expense resulting from the repurchase of capital stock, options and
rights described in clause (iv) of this definition of Net Income.

 

“Test Period” shall mean the three most recent calendar months then ended (taken
as one accounting period), or such other period as specified in the Agreement or
any Annex thereto.

 

“Total Debt” shall mean, at any date of determination, for Borrower individually
and collectively on a consolidated and consolidating basis, the total
Indebtedness on such date less cash and Cash Equivalents held on such date.

 

“Total Debt Service” shall mean the sum of (i) scheduled or other required
payments of principal on Indebtedness, and (ii) Interest Expense, in each case
for such period.