EIGHTH AMENDMENT TO ACCOUNTS RECEIVABLE FINANCING AGREEMENT
EXHIBIT
10.2
EIGHTH
AMENDMENT TO ACCOUNTS RECEIVABLE FINANCING AGREEMENT
This
Eighth Amendment to Accounts Receivable Financing Agreement (this “Amendment”)
is entered into as of November 23, 2010, by and between SILICON VALLEY BANK, a
California corporation, with its principal place of business at 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a loan production office located
at 000 Xxxxx Xxxxxx, Xxxxx 0-000, Xxxxxx, Xxxxxxxxxxxxx 00000 (“Bank”) and ARBINET CORPORATION (f/k/a
Arbinet-thexchange, Inc.), a Delaware corporation with its principal place of
business at 000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000
(“Borrower”).
1. DESCRIPTION OF EXISTING
INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations
which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to
a financing arrangement dated as of February 3, 2003, evidenced by, among other
documents, a certain Accounts Receivable Financing Agreement dated as
of February 3, 2003, between Borrower and Bank, as amended by a certain First
Amendment to Accounts Receivable Financing Agreement dated as of October 27,
2003, as further amended by a certain Second Amendment to Accounts Receivable
Financing Agreement dated as of May 28, 2004, as further amended by a certain
Third Amendment to Accounts Receivable Financing Agreement dated as of May 2,
2005, as further amended by a certain Fourth Amendment to Accounts Receivable
Financing Agreement dated as of June 7, 2006, as further amended by a certain
Fifth Amendment to Accounts Receivable Financing Agreement dated as of June 7,
2007, as further amended by a certain Sixth Amendment to Accounts Receivable
Financing Agreement dated as of December 17, 2007, and as further amended by a
certain Seventh Amendment to Accounts Receivable Financing
Agreement dated as of November 24, 2008 (as amended, the “AR Financing
Agreement”). Captialized terms used but not otherwise defined herein shall have
the same meaning as in the AR Financing Agreement.
2. DESCRIPTION OF
COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the AR Financing Agreement (together with any other
collateral security granted to Bank, the “Security Documents”). Hereinafter, the
Security Documents, together with all other documents evidencing or securing the
Obligations
shall be referred to as the “Existing Loan Documents.”
3. DESCRIPTION OF CHANGE IN
TERMS.
Modifications to AR
Financing Agreement.
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1.
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The
AR Financing Agreement shall be amended by inserting the following new
definition, appearing alphabetically in Section 1
thereof:
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“
“Liquidity” is (a)
Borrower’s unrestricted and unencumbered cash maintained with Bank and, without
duplication, Borrower’s unrestricted and
unencumbered
cash maintained in its two existing accounts with NatWest (account numbers 43891
and 39678), minus (b) the Obligations, including, without limitation, all
amounts owed by Borrower to Bank pursuant to that certain Non-Recourse
Receivables Purchase Agreement dated as of November 28, 2005, between Borrower
and Bank, as amended (the “Non-Recourse Receivables
Purchase Agreement”) (including, without limitation, the
Purchased Receivable
Amount (as defined in the Non-Recourse Receivables Purchase Agreement) for any
Purchased Receivable (as defined in the Non-Recourse Receivables Purchase
Agreement) for which Bank has not yet received payment in full).”
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2.
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The
AR Financing Agreement shall be amended by deleting the following
definition appearing in Section 1
thereof:
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“
“Maturity
Date” shall be November 26,
2010.”
and
inserting in lieu thereof the following:
“
“Maturity
Date” shall be February 26,
2011.”
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3.
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The
AR Financing Agreement shall be amended by deleting the following text,
appearing in Section 6.3
thereof:
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“
(L) Intentionally omitted.”
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and
inserting in lieu thereof the following:
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“ (L)
Maintain at all times, to be tested on the last day of each month, Liquidity of
at least Seven Million Five Hundred Thousand Dollars ($7,500,000.00).”
4. FEES. Borrower
shall pay to Bank a modification fee equal to Twenty Thousand Dollars
($20,000.00), which fee shall be fully earned, due and payable as of the date
hereof. Borrower shall also be obligated to reimburse Bank for any reasonable
legal fees and expenses incurred in connection with this Amendment.
5. CONSISTENT
CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
6. RATIFICATION OF PERFECTION
CERTIFICATE. Borrower has delivered to Bank an updated
Perfection
Certificate in connection with this Amendment, which is dated as of November 23,
2010 and which shall be deemed to replace that certain Perfection Certificate
dated as of June 3, 2007.
7. RATIFICATION OF LOAN
DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms
and conditions of all security or other collateral granted to the Bank, and
confirms that the indebtedness secured thereby includes, without limitation, the
Obligations.
8. NO DEFENSES OF
BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, and that if Borrower now has, or ever did have, any
such offsets, defenses, claims, or counterclaims against Bank, whether known or
unknown, at law or in equity, all of them are hereby expressly WAIVED and
Borrower hereby RELEASES Bank from any liability thereunder. Notwithstanding the
foregoing, the above representation and waiver shall not include, or pertain to,
any of Borrower’s assets that are managed by Bank’s Management
Group.
9. CONTINUING VALIDITY.
Borrower understands and agrees that in modifying the existing Obligations, Bank
is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Loan
Documents.
Except as expressly modified pursuant to this Amendment, the terms of the
Existing Loan Documents remain unchanged and in full force and
effect. Bank’s agreement to modifications to the existing Obligations
pursuant to this Amendment in no way shall obligate Bank to make any
future modifications to the Obligations. Nothing
in this Amendment shall constitute a satisfaction of the
Obligations. It is the intention of Bank and Borrower to retain as
liable parties all makers of Existing Loan Documents, unless the party is
expressly released by Bank in writing. No maker will be released by virtue of
this Amendment.
10. COUNTERSIGNATURE.
This Amendment shall become effective only when it shall have been executed by
Borrower and Bank.
[The remainder of this page is
intentionally left blank]
This
Amendment is executed as a sealed instrument under the laws of the Commonwealth
of Massachusetts as of the date first written above.
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BORROWER:
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BANK:
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ARBINET
CORPORATION
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SILICON VALLEY
BANK
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By:
/s/ Xxxx
Xxxxxx
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By: /s/ Xxxxx X.
Xxxxxxxxxx
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Name:
Xxxx
Xxxxxx
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Name: Xxxxx X.
Xxxxxxxxxx
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Title:
CFO
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Title: Vice
President
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