THIRD AMENDMENT TO CREDIT FACILITIES AGREEMENT
Exhibit
10.5
THIRD
AMENDMENT TO
This THIRD AMENDMENT TO CREDIT
FACILITIES AGREEMENT (this “Agreement”) is entered into and effective as of
February 28, 2008, by and among MTM TECHNOLOGIES, INC., a New York corporation,
MTM TECHNOLOGIES (US), INC., a Delaware corporation, MTM TECHNOLOGIES
(MASSACHUSETTS), LLC, a Delaware limited liability company, and INFO SYSTEMS,
INC., a Delaware corporation (collectively, and separately referred to as,
"Borrower" or "the Borrower"), and GE COMMERCIAL DISTRIBUTION FINANCE
CORPORATION ("CDF"), as Administrative Agent, and CDF, as the sole lender (the
“Lender”).
Recitals:
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A.
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Borrower,
Administrative Agent and the Lender are parties to that certain Credit
Facilities Agreement dated as of August 21, 2007, as amended by the First
Amendment to Credit Facilities Agreement entered into and effective as of
August 21, 2007, and as amended by the Second Amendment to Credit
Facilities Agreement entered into and effective as of February 4 , 2008
(as amended, the “Loan Agreement”).
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B.
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Administrative
Agent, Lender and Borrower have agreed to the provisions set forth herein
on the terms and conditions contained
herein.
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Agreement
Therefore, in consideration of the
mutual agreements herein and other sufficient consideration, the receipt of
which is acknowledged, Borrower, Administrative Agent and the Lender hereby
agree as follows:
1. Definitions. All
references to the “Agreement” or the “Loan Agreement” in the Loan Agreement and
in this Agreement shall be deemed to be references to the Loan Agreement as it
may be amended, restated, extended, renewed, replaced, or otherwise modified
from time to time. Capitalized terms used and not otherwise defined
herein have the meanings given them in the Loan Agreement.
2. Effectiveness of
Agreement.
This Agreement shall become effective, unless otherwise noted, as of the
date first written above, but only if this Agreement has been executed by
Borrower, Administrative Agent and the Lender, and only if all of the documents
listed on Exhibit A to this Agreement have been delivered and, as applicable,
executed, sealed, attested, acknowledged, certified, or authenticated, each in
form and substance satisfactory to the Lender. In addition, on or
before March 14, 2008, the Third Amendment Fee (as defined on Exhibit A) shall
be paid in same day funds to Administrative Agent for the sole account of the
Lender. Upon payment of the Third Amendment Fee, such fee shall be
fully earned and nonrefundable. If the Third Amendment Fee is
not paid on or before March 13, 2008, then the Administrative Agent is
irrevocably authorized, without any additional notice to Borrower or consent of
Borrower, to make a Revolving Loan Advance on March 14, 2008 to pay such Third
Amendment Fee.
3. Amendments. The
Loan Agreement is hereby amended as follows:
3.1. Projections. Section
11.15 is deleted in its entirety and replaced with the following:
“11.15. Projections. The
projections of Borrower’s financial condition, results of operations, and cash
flow for the period through March 31, 2008, a copy of which have been delivered
to Administrative Agent, represent, as of the Effective Date, Borrower’s good
faith estimate of Borrower’s future financial performance for the periods set
forth therein. Such projections have been prepared on the basis of
the assumptions set forth therein reasonably believed by Borrower in good faith
to be fair and reasonable.”
3.2. Representations and
Warranties. Section 11.24 is deleted in its entirety and
replaced with the following:
“11.24. Other Creditor
Indebtedness; Intercreditor Documents; Subordinated Indebtedness, Pequot
Indebtedness. There is no breach or default with respect to the
Other Creditor Indebtedness, and the Other Creditor Indebtedness has been
incurred in accordance with the terms of this Agreement. There is no
breach or default by or attributable to a Covered Person of any obligation set
forth in any Intercreditor Agreement or any Other Creditor Indebtedness
Document. There is no breach or default with respect to the
Subordinated Indebtedness, and the Subordinated Indebtedness has been incurred
in accordance with the terms of this Agreement. There is no breach or
default by or attributable to any holder of the Subordinated Indebtedness under
the Subordination Agreement. There is no breach or default with
respect to the Pequot Indebtedness, and the Pequot Indebtedness has been
incurred in accordance with the terms of this Agreement.”
3.3. Notices. Section
13.10.7 is deleted in its entirety and replaced with the following:
“13.10.7. Borrower
shall promptly deliver notice to Administrative Agent of the assertion by the
holder of any Capital Securities in a Covered Person, the Pequot Indebtedness,
the Subordinated Indebtedness or any other Indebtedness of a Covered Person in
the outstanding principal amount in the aggregate in excess of $500,000 that a
default exists with respect thereto or that such Covered Person is not in
compliance with the terms thereof, or of the threat or commencement by such
holder of any enforcement action because of such asserted default or
noncompliance.”
3.4. Indebtedness. A new
14.2.12 is hereby added to the Loan Agreement as follows:
“14.2.12. Unsecured
subordinated Indebtedness owing to Pequot Private Equity Fund III, L.P. and/or
Pequot Offshore Private Equity Partners III, L.P., up to $2,500,000 in the
aggregate principal amount with interest payable in preferred Capital Securities
of MTM Technologies, Inc. and which may be coupled with warrants for the Capital
Securities of MTM Technologies, Inc. (so long as the exercise thereof shall not
result in a Change of Control) (the “Pequot Indebtedness”) which such Pequot
Indebtedness may not be repaid without the prior written consent of the Required
Lenders, provided, however, if the Pequot Indebtedness has a stated maturity of
December 31, 2008 or later, then the Pequot Indebtedness may be repaid without
the consent of the Required Lenders by Borrower making a $750,000 principal
payment at any time from and including December 24, 2008 through and including
December 31, 2008, and a $1,750,000 principal payment at any time from and
including March 24, 2009 through and
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including
March 31, 2009, if and only if no Default or Event of Default exists at the time
of such payment and no Default or Event of Default would reasonably like to
occur from making of any such payment, and provided further however, if a
payment of principal on the Pequot Indebtedness that is scheduled to be made
cannot be made pursuant to the terms of this Section 14.2.12, then, if and when
the conditions of this Section 14.2.12 permit, any such missed scheduled
principal payment may be made.”
3.5. Payment on other
Indebtedness. Section 14.3 is deleted in its entirety and
replaced with the following:
“14.3. Payments on Other Creditor
Indebtedness; Subordinated Indebtedness; Pequot
Indebtedness. Make any nonscheduled prepayment of principal or
interest on any Other Credit Indebtedness unless both immediately before and
after giving effect to any such prepayment, there shall be no Default or Event
of Default; make any payment of principal on the Subordinated Indebtedness; make
any payment of interest on the Subordinated Indebtedness unless such payment of
interest is scheduled to be made under the Subordinated Indebtedness Documents
and such payment is expressly permitted by the terms of the applicable
Subordination Agreement and Section 6.3.3.2 hereof; make any payment of
principal on the Pequot Indebtedness unless such payment of principal is
schedule to be made under the Pequot Indebtedness Documents and such payment is
expressly permitted by the terms of Section 14.2.12 hereof or make any cash
interest payment on the Pequot Indebtedness; or modify, amend, supplement,
compromise, satisfy, release or discharge any of the Subordinated Indebtedness
Documents, any collateral securing the same, the Pequot Indebtedness Documents,
or any Person liable directly or indirectly with respect thereto.”
3.6. Prepayments. Section
14.4 is deleted in its entirety and replaced with the following:
“14.4. Prepayments. Prepay,
whether voluntarily or otherwise, any Indebtedness, including without
limitation, the Subordinated Indebtedness and the Pequot Indebtedness, other
than (a) the Loan Obligations in accordance with the terms of the Loan
Documents, (b) trade payables in the ordinary course of business consistent with
past practices, (c) as permitted by Section 14.3.”
3.7. Total Funded
Indebtedness. The definition of Total Funded Indebtedness is
deleted in its entirety and replaced with the following:
“"Total
Funded Indebtedness" means the sum of the following, without duplication (i)
outstanding principal and interest of the Loans (including any fees paid to
Administrative Agent or any Lender in connection with the execution and delivery
of this Agreement) excluding the principal outstanding under the Aggregate
Floorplan Loan Facility and, without duplication, the Interim Floorplan Loan
Facility and unfunded Approvals, (ii) the face amount of any letters of credit
issued on the account of any Borrower, (iii) the aggregate outstanding principal
balance of all other Indebtedness for borrowed money, including, without
limitation, the Capital Expenditure Equivalent, and (iv) the maximum amount
payable under any guaranty executed by a Borrower, but, excluding,
the Subordinated Indebtedness if a Subordination Agreement is in effect and
excluding
the Pequot Indebtedness.”
3.8. Minimum
EBITDA. Section 15.3 is deleted in its entirety and replaced
with the following:
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“15.3 Minimum
EBITDA. Each Borrower covenants that as of the last day of
each fiscal quarter, for the fiscal quarter then ended, Borrower’s EBITDA shall
not be less than the amounts set forth in the table below:
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The
Fiscal Quarter Ending On:
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Minimum
EBITDA
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September
30, 2007
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$800,000
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December
31, 2007
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$1,760,000
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March
31, 2008
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$440,000
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June
30, 2008
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$1,365,000
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September
30, 2008
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$2,000,000
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December
31, 2008
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$2,000,000
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March
31, 2009
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$2,000,000
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June
30,2009
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$2,000,000”
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3.9. Defaults. Section
16.1.11 is deleted in its entirety and replaced with the following:
“16.1.11. Other Creditor
Indebtedness; Subordinated Indebtedness; Pequot
Indebtedness. The occurrence of (a) any breach, default or
event of default with respect to any of the Other Creditor Indebtedness in
excess of $250,000 in the aggregate which is not cured or waived within any
applicable grace period or any acceleration thereof or right to accelerate, or
(b) the termination of any Intercreditor Agreement by any party thereto, other
than Administrative Agent, prior to the payment in full of all of the Other
Creditor Indebtedness covered thereby. The occurrence of (a) any
breach or default with respect to the Subordinated Indebtedness that is not
cured within any applicable grace period or any acceleration thereof or right to
accelerate, or (b) any breach or default of the Subordination Agreement by the
holder of any of the Subordinated Indebtedness. The occurrence of any
breach or default with respect to the Pequot Indebtedness that is not cured
within any applicable grace period or any acceleration thereof or right to
accelerate.”
3.10. Definitions. The
following new definitions are inserted in alphabetical order to Exhibit
2.1:
“Pequot
Indebtedness -- is defined in Section 14.2.12.”
“Pequot
Indebtedness Documents -- each document, instrument and agreement
evidencing all or any portion of the Pequot Indebtedness.”
The
definition of Material Agreement is deleted in its entirety and replaced with
the following:
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“Material
Agreement -- as to Borrower, any Guarantor or any other Covered Person,
any Contract to which Borrower, any Guarantor or any Covered Person is a party
or by which any such Borrower, any Guarantor or any other Covered Person is
bound which, if violated or breached, has or is reasonably likely to have a
Material Adverse Effect, including, without limitation, all Other Creditor
Indebtedness Documents, all Subordinated Indebtedness Documents, all Pequot
Indebtedness Documents, all documents referenced in any Intercreditor Agreement,
including, without limitation, the Other Creditor Indebtedness
Documents.”
4. General Representations and
Warranties of Borrower. Each Borrower hereby represents and
warrants to Administrative Agent and the Lender that (i) such Borrower’s
execution of this Agreement has been duly authorized by all requisite action of
such Borrower, (ii) no consents are necessary from any third parties for such
Borrower’s execution, delivery or performance of this Agreement except for those
already duly obtained, (iii) this Agreement, the Loan Agreement, and each of the
other Loan Documents, constitute the legal, valid and binding obligations of
such Borrower enforceable against such Borrower in accordance with their terms,
except to the extent that the enforceability thereof against such Borrower may
be limited by bankruptcy, insolvency or other laws affecting the enforceability
of creditors rights generally or by equity principles of general application,
(iv) except as disclosed on the disclosure schedule attached to the Loan
Agreement, and as set forth on Exhibit B attached hereto, all of the
representations and warranties contained in Section 11 of the Loan Agreement are
true and correct with the same force and effect as if made on and as of the date
of this Agreement with such exceptions as have been disclosed to Administrative
Agent and the Lenders in writing, (v) there is no Existing Default, (vi) the
execution, delivery and performance of this Agreement by Borrower does not
violate, contravene, or conflict with any Material Law or Material Agreement,
(vii) there are no Material Proceedings pending or, to the knowledge of
Borrower, threatened, and (viii) since August 21, 2007, no Borrower’s Charter
Documents have been amended, restated or otherwise modified in any manner which
has or is reasonably likely to have a Material Adverse Effect on any Covered
Person or which will or is reasonably likely to cause a Default or Event of
Default.
5. Reaffirmation; No
Claims. Each Borrower hereby represents, warrants,
acknowledges and confirms that (i) the Loan Agreement and the other Loan
Documents remain in full force and effect, (ii) the Security Interests of the
Administrative Agent under the Security Documents secure all the Loan
Obligations under the Loan Agreement, continue in full force and effect, and
have the same priority as before this Agreement, (iii) no Borrower has any
defenses to its obligations under the Loan Agreement and the other Loan
Documents, and (iv) no Borrower has any claim against Administrative Agent or
the Lenders arising from or in connection with the Loan Agreement or the other
Loan Documents, and each Borrower hereby releases and waives and discharges
forever any such claims it may have against Administrative Agent or the Lenders
arising from or in connection with this Agreement, the Loan Agreement or the
other Loan Documents which have arisen or accrued on or prior to the date
hereof. Until the
Loan Obligations are paid in full in good funds and all obligations and
liabilities of Borrower under the Loan Agreement and the Loan Documents are
performed and paid in full in good funds, Borrower agrees and covenants that it
is bound by the covenants and agreements set forth in the Loan Agreement, the
Loan Documents and in this Agreement. Borrower hereby ratifies and
confirms the Loan Obligations. This Agreement is a part of the Loan
Documents.
6. Effect of
Agreement. The execution, delivery and effectiveness of this
Agreement shall not and does not operate as a waiver of any right, power or
remedy of Administrative Agent or the Lenders under the Loan Agreement or any of
the other Loan Documents, nor constitute a waiver of any provision of the Loan
Agreement or any of the other Loan Documents or any Existing Default or Event of
Default. The
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execution,
delivery and effectiveness of this Agreement shall not and does not act as a
release or subordination of the liens and Security Interests of Administrative
Agent under the Loan Documents.
7. Payment of Fees and
Expenses. Borrower shall promptly pay to Administrative Agent
an amount equal to all reasonable fees, costs, and expenses, incurred by the
Administrative Agent (including all reasonable attorneys fees and expenses) in
connection with the preparation, negotiation, execution, and delivery of this
Agreement, and any further documentation which may be required in connection
herewith.
8. Governing Law. This
Agreement and the rights and obligations of the parties hereunder and thereunder
shall be governed by and construed and interpreted in accordance with the
internal Laws of the State of Illinois applicable to contracts made and to be
performed wholly within such state, without regard to choice or conflicts of law
principles.
9. Patriot
Act. Administrative Agent and each Lender hereby notifies the
Borrowers that, pursuant to the requirements of the USA Patriot Act, Title III
of Pub. L. 107-56, signed into law October 26, 2001 (as amended from time to
time (including any successor statute) and together with all rules promulgated
thereunder, collectively, the “Act”), it is required to obtain, verify and
record information that identifies the Borrowers and any Guarantor, which
information includes the name and address of the Borrowers and any Guarantor and
other information that will allow Administrative Agent and each Lender to
identify the Borrowers and each Guarantor in accordance with the
Act.
10. Section Titles. The
section titles in this Agreement are for convenience of reference only and
shall not be construed so as to modify any provisions of this
Agreement.
11. Counterparts; Facsimile
Transmissions. This Agreement may be executed in one or more
counterparts and on separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. Signatures to this Agreement may be given by facsimile or
other electronic transmission, and such signatures shall be fully binding on the
party sending the same.
12. Binding
Arbitration. This Agreement is subject to the binding
arbitration provisions contained in the Loan Agreement and the Loan Documents as
applicable to the parties hereto.
13. Incorporation By
Reference. Administrative Agent, Lender and Borrower hereby
agree that all of the terms of the Loan Documents are incorporated in and made a
part of this Agreement by this reference.
14. Notice—Oral Commitments
Not Enforceable.
ORAL AGREEMENTS OR COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS
OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE
CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.
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15. Statutory Notice-Insurance.
UNLESS
YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH
US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR
COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR
INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT
YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH THE
COLLATERAL. YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT
ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY
OUR AGREEMENT. IF WE PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL
BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM,
INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF
THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE
INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL
OUTSTANDING BALANCE OR OBLIGATION. THE COSTS OF THE INSURANCE MAY BE
MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR
OWN.
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IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.
GE COMMERCIAL DISTRIBUTION FINANCE
CORPORATION,
as
Administrative Agent and sole Lender
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By:
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/s/ |
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Name:
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______________________________________
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Title:
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______________________________________
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MTM TECHNOLOGIES, INC., as a Borrower
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By:
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/s/
X.X. Xxxxxxxx, III
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Name:
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X.X.
Xxxxxxxx, III
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Title:
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Senior
Vice President and Chief Financial
Officer
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MTM TECHNOLOGIES (US), INC.,
as a Borrower
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By:
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/s/
X.X. Xxxxxxxx, III
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Name:
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X.X.
Xxxxxxxx, III
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Title:
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Senior
Vice President and Chief Financial
Officer
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MTM TECHNOLOGIES (MASSACHUSETTS), LLC, as a Borrower
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By:
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/s/
X.X. Xxxxxxxx, III
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Name:
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X.X.
Xxxxxxxx, III
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Title:
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Senior
Vice President and Chief Financial
Officer
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INFO SYSTEMS, INC., as a Borrower
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By:
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/s/
X.X. Xxxxxxxx, III
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Name:
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X.X.
Xxxxxxxx, III
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Title:
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Senior
Vice President and Chief Financial
Officer
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